Court File and Parties

COURT FILE NO.: FS-14-398336 DATE: 20200526 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JENNIFER ANN LEITCH Applicant – and – ANTHONY CHARLES JAMES NOVAC BOTH IN HIS PERSONAL CAPACITY AND IN HIS CAPACITY AS TRUSTEE OF THE NOVAC FAMILY TRUST (2013) MICHAEL NOVAC, BOTH IN HIS PERSONAL CAPACITY AND IN HIS CAPACITY AS TRUSTEE OF EACH OF THE NOVAC 2011 FAMILY TRUST AND THE NOVAC FAMILY TRUST (2013), NELLY NOVAC, IN HER CAPACITY AS TRUSTEE OF THE NOVAC 2011 FAMILY TRUST, SONCO GROUP INC., THE NOVAC 2011 FAMILY TRUST, THE NOVAC FAMILY TRUST (2013), JOHN MCCLURE IN HIS CAPACITY AS TRUSTEE OF THE LULU TRUST (2006), DAVID TAM IN HIS CAPACITY AS TRUSTEE OF THE LULU TRUST (2006) Respondents

Counsel: Ilana Zylberman Dembo, Sheila Gibb and Stephanie Romano, for the Applicant Avra Rosen & Kelly Eckert, for the Respondent Anthony Charles James Novac No one appearing for the Respondents other than the Respondent Anthony Charles James Novac

HEARD: May 19, 2020

M. D. FAIETA j.

Reasons for Decision

Introduction

[1] The Applicant, Jennifer Ann Leitch (“Jennifer”) and the Respondent Anthony Charles James Novac (“Anthony”) separated on September 29, 2012 following 15 years of marriage.

[2] Jennifer practiced construction litigation for several years during the marriage and for the last few years has taught law on a part-time basis. Anthony has worked as a consultant in the casino and gaming industry for about 20 years. His father, Michael Novac (“Michael”), operates various real estate and gaming businesses through Sonco Group Inc. (“Sonco”) and related entities.

[3] From the outset of this application, Jennifer has taken the position that Anthony has failed to disclose his interest in, and income derived from, Sonco and its related entities. Various proceedings described below arising from this position, have resulted in enormous legal expense for both parties nevertheless leaving the issues of support and property equalization still to be finally determined.

[4] Jennifer is the sole owner of a property municipally known as 9749 10th Side Road in Erin, Ontario (the "Farm"). It was purchased during the marriage. Jennifer states that she cannot afford to maintain the Farm. There are property tax arrears of about $65,000.00. The Farm is scheduled to be sold at a tax sale on August 12, 2020. Jennifer submits that the tax sale will result in a lower price for the Farm than could be achieved by immediately listing the Farm for sale.

[5] As a consequence, Jennifer asks this Court to permit her to immediately list and sell the Farm without Anthony’s consent or involvement and to permit her to retain the net proceeds of sale. Ms. Romano advises that the Sonco/Novac Respondents consent to the relief sought.

[6] On May 8, 2020, Justice Hood determined that this motion was “urgent” within the meaning of the Notices to Profession dated March 15, 2020 and April 2, 2020 and scheduled this motion to be heard.

[7] For the reasons given below, I have authorized the listing and sale of the Farm on certain conditions.

Background

[8] In October, 2014, Jennifer filed this Application for, amongst other things, a divorce, spousal support, child support and equalization of net family property. She alleges that Anthony and his Michael have intermingled business interests and that Anthony has attempted to minimize his support obligations by manipulating his income.

[9] In June, 2015, Jennifer and Anthony agreed on a temporary and without prejudice basis that Anthony would pay child support of $5,629.00 per month and spousal support of $11,193.00 per month commencing July 15, 2015.

[10] In June, 2016, Jennifer amended her Application to add Michael and the other Respondents. Amongst other things, Jennifer claimed an interest in Anthony’s business and property interests, as well as damages against the added Respondents (which include Anthony’s parents) for conspiring to hide Anthony’s income and assets for the purpose of minimizing his support obligations.

[11] In January, 2017, the Sonco/Novac Respondents (meaning all the added Respondents other than John McClure and David Tam) brought a motion for summary judgment to strike the conspiracy claim.

[12] In February, 2017, Anthony brought a motion to vary the temporary support Order.

[13] On February 23, 2017, it was ordered that the motion for summary judgment brought by the Sonco/Novac Respondents be heard together with Anthony’s motion to vary the temporary support order.

Motion for Disclosure

[14] In November, 2017, Jennifer brought a motion to compel the Respondents to disclose various documents in support of her financial claims. I granted the motion and subsequently ordered that costs of $40,000 be paid by the Respondents: See Leitch v. Novac, 2017 ONSC 6888.

[15] At that time, I encourage the parties, including the Sonco/Novac Respondents, to settle this dispute:

... I was not provided with an outline of costs by the parties at the hearing of the motion, however I expect that the amount of legal fees claimed will be significant. Whether the parties are both able and willing to sustain this continued pace of legal expense and conflict in their lives through trial (estimated to be at least six weeks long) remains to be seen. It is obviously not too late for the parties to attempt to settle their differences. Should they wish this court's assistance to help them settle their differences, then I would be only too happy to make those arrangements on their behalf with one of my colleagues. If all parties would like to take the court up on this offer, then I ask that they notify me of same within five days. [para. 67]

[16] The parties accepted the above invitation. In December, 2017, they attended a full day settlement conference before Justice G. Speigel. Unfortunately, the parties were unable to reach a settlement.

Motions for Summary Judgment and Variation of Support

[17] On January 31, 2019, following a nine day hearing over six months, the Sonce/Novac Respondents’ motion for summary judgment was granted by Justice Gilmore as she dismissed Jennifer’s claim for conspiracy against them. In addition, Anthony’s motion to vary the temporary support Order, retroactively and prospectively, was granted. For 2017, child support was reduced to $3,200 per month and spousal support was reduced to nil. For 2018 and thereafter, child support was reduced to $1,230 per month and spousal support was $1,489 per month (“Temporary Support Variation Order”). The amount of support overpaid by Anthony would form a credit towards any equalization or support obligation as determined at trial: See Leitch v. Novac, 2019 ONSC 794.

[18] On March 7, 2019, Jennifer was ordered to pay costs of $900,000 to the Sonco/Novac Respondents and costs of $340,000 to Anthony. It was ordered that $150,000 of the $340,000 awarded to Anthony would be enforceable as legal fees related to the payment/collection of support: Leitch v. Novac, 2019 ONSC 1534. Both Anthony and the Sonco/Novac Respondents registered a Writ of Seizure and Sale in respect of their costs awards against the Farm.

Motion for Security for Costs and Preservation Order

[19] Shortly after the release of this Court’s decision dated January 31, 2019 two further motion were brought. The Sonco/Novac Respondents brought a motion for security for costs as they were concerned that they would not be able to collect the costs that they anticipated would be ordered in respect of the motion for summary judgment. Anthony brought a motion for a preservation order requiring that Jennifer to transfer the Farm to him as it was his view that he was already owed more than its value given that the amounts owed to him by Jennifer for costs, overpayment of support and equalization payment.

[20] Given the outstanding costs Order, the Court granted the Sonco/Novac Respondent’s motion and ordered that the Farm and all other assets be held as security for costs pursuant to Rule 24(13) of the Family Law Rules. Anthony’s motion for an order transferring the Farm to him was dismissed: Leitch v. Novac, 2019 ONSC 1541.

Ontario Divisional Court

[21] On May 31, 2019, the Ontario Divisional Court dismissed Jennifer’s motion for leave to appeal the Temporary Support Variation Order dated January 31, 2019 as well as the costs Order related to the Temporary Support Variation Order dated March 7, 2019. Costs of $5,000.00 were awarded to Anthony.

[22] On June 28, 2019, the Ontario Divisional Court granted Jennifer’s motion for leave to appeal the Security for Costs Order and Preservation Order granted on March 8, 2019 with costs in the discretion of the court deciding the appeal. The Divisional Court also ordered that a case management conference be held if this appeal was not consolidated with the action pending in the Court of Appeal by October 31, 2019.

Ontario Court of Appeal

[23] On March 4, 2019, Jennifer appealed to the Ontario Court of Appeal from the order granting summary judgment to the Sonco/Novac Respondents. On April 1, 2019, she amended her Notice of Appeal to ask that the costs Order dated March 7, 2019 be set aside as well.

[24] On April 17, 2020, the Ontario Court of Appeal reversed the above 2019 decisions of Justice Gilmore. It determined that partial summary judgment was not appropriate in the circumstances and, as a consequence, also set aside the costs Orders, the Order for security for costs and the preservation Order. Costs of the appeal in the amount of $50,000 were awarded to Jennifer: Leitch v. Novac, 2020 ONCA 257. The Court of Appeal directed that this case proceed to trial before a different judge and reserved the costs of the motion for summary judgment to the trial judge.

[25] The Sonco/Novac Respondents subsequently removed the Writ of Seizure and Sale that they had registered against the Farm.

The Sale of the Farm

[26] Jennifer’s evidence regarding the Farm is as follows:

• She and Anthony purchased the Farm in 2011 for $900,000;
• The Farm is solely owned by Jennifer;
• The Farm is her most significant asset;
• There is no mortgage on the Farm;
• Before they separated it was Anthony’s dream to extensively renovate the Farm and he spent $1 million of their joint funds on this renovation;
• Anthony’s renovation of the Farm continued after their separation without her knowledge or consent;
• Once it became evident to Anthony that Jennifer was not going to transfer her interest in the Farm to him, he abandoned the renovation and the Farm leaving her to solely financially maintain the Farm;
• Jennifer cannot afford to pay the Farm’s carrying costs;
• The cost of maintaining the Farm are astronomical. Heating costs are about $500 per month. Electricity and water costs are about $600 per month. Landscaping costs are about $200 per month;
• The tax arrears for the Farm are about $65,000.00. She has no ability to pay the arrears or to pay property tax on the Farm on a go-forward basis;
• Jennifer engaged a real estate agent; and
• The tax sale is scheduled for August 12, 2020.

[27] Jennifer states that Anthony has refused to give his consent to the sale of the Farm. She states:

• Anthony has refused to consent to the sale of the Farm and has asked her to transfer ownership of the Farm to him;
• On January 30, 2020, Jennifer also proposed that she would borrow funds, secured against title, from her partner to pay the tax arrears which would then be followed by the listing of the Farm for sale. On February 3, 2020, Anthony refused this offer for various reasons: (1) the Order of Justice Kristjanson precludes Jennifer from granting a mortgage to Mr. Hutchinson; (2) Jennifer would be obliged to preserve the Farm (given the Orders in existence at that time) and could not sell the Farm; (3) If the Farm was sold at a tax sale, then Anthony would be paid $155,000 in costs; (4) Jennifer has not repaid Anthony any part of the overpayment of support assessed by Justice Gilmore; (5) she has owed Anthony an equalization payment since September 2012 when their former matrimonial home was sold and Jennifer retained all of the proceeds of sale of $1.1 million;
• Anthony has refused to sign the listing agreement so that he can purchase the Farm at a public auction at a significantly reduced price; and
• She received unsolicited offer to purchase the Farm on April 4, 2020 for $1.1 million. On April 7, 2020, Jennifer contacted Anthony who refused to participate in making a counter offer given that none of the costs or expenses that he incurred after the date of separation in relation to the Farm or for chattels located on the Farm would be allocated to him from the proceeds of sale. Jennifer indicated that the proceeds of sale would be held in trust until all claims were resolved.

[28] Anthony states that he did offer his consent to the listing of the Farm. An email dated December 3, 2019 from Ms. Rosen states that Anthony will consent to the listing of the Farm provided: (1) he is involved in all aspects of the listing and sale of the Farm; (2) he is paid $155,000 on account of outstanding orders for the payment of costs; (3) he is paid for furniture, appliances which were delivered after their separation but never installed as well as steel which remains in the garage. These conditions were rejected. By email dated December 3, 2019, Ms. Gibb stated that:

In light of the impending public auction, your client should be signing the listing agreement without any conditions. He may have input on the listing price and be involved in reviewing offers. We agree that neither party can provide any prospective purchaser with any warranties, and the property will be purchased on an as-is basis. All of the funds will have be held in trust with the real estate lawyer pending written agreement by all concerned or court order,

[29] Anthony states that the Farm was his “project” during their marriage. He states that he spent $1,493,719 on the Farm after their separation on the Farm after receiving Jennifer’s assurances that he would receive the Farm. Jennifer explained on Questioning on March 3, 2016 that Anthony would buy her interest in the Farm which would then fund her purchase of a home in the city. Anthony states that $446,982 came from his personal account or from his holding company’s account. He states that the remaining funds came from a joint account held with Jennifer to which he was the sole contributor. Anthony states that he stopped paying for Farm expenses on January 12, 2015 when it became clear that Jennifer would not transfer the Farm to him or compensate him for his post-separation expenditures.

Order Sought

[30] On this motion, Jennifer seeks the following relief:

• A declaration that Jennifer’s motion is urgent pursuant to the Notice to Profession;
• An Order permitting her to immediately list the Farm for sale;
• An Order dispensing with Anthony’s consent or authority to list and complete the closing of the eventual sale of the Farm, pursuant to section 23 of the Family Law Act;
• An Order that Jennifer have the sole authority to negotiate, accept or counter-offer any offer to purchase the Farm;
• An Order that Jennifer have the sole authority to close the sale of the Farm, including signing all documentation, without consultation with or without the consent of the Respondent;
• An Order that Anthony be required to lift and withdraw the Writ of Seizure and Sale registered against title to the Farm immediately;
• An Order that the net proceeds of sale be immediately released to Jennifer upon closing of the sale;
• An Order validating service via email of Jennifer’s Amended Notice of Motion and Supplementary Affidavit in support of same on Anthony, through his counsel, Avra Rosen;
• An Order granting Jennifer leave to commission affidavits in this matter by telephone or video conference;
• An Order directing the filing office to have this Order signed and entered; and
• An Order that Anthony pay Jennifer’s costs of this motion on a full indemnity basis.

[31] There was no objection expressed in relation to the administrative and procedural relief sought. Justice Hood has already determined the question of urgency and it need not be revisited: Chahine v. Martins, 2020 ONSC 1825, para. 25.

[32] Both parties agree that the Farm should be sold. The main issues on this motion is what role should Anthony have in the sale of the Farm and whether the net proceeds of sale should be paid immediately after closing to Jennifer.

Analysis

[33] The parties agree that the Farm is a “matrimonial home” within the meaning of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”). Spouses, even if a spouse does not own the matrimonial home, have certain rights related to its possession, notice of the enforcement of a lien, encumbrance or execution, and approval of its disposal or encumbrance: FLA, ss. 19, 21, 22.

[34] Given that the Farm is a matrimonial home, Jennifer cannot dispose of the Farm without Anthony’s consent or this Court’s approval. In this regard, s. 21(1) of the FLA states:

No spouse shall dispose of or encumber an interest in a matrimonial home unless,

(a) the other spouse joins in the instrument or consents to the transaction;

(b) the other spouse has released all rights under this Part by a separation agreement;

(c) a court order has authorized the transaction or has released the property from the application of this Part; or

(d) the property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled. [Emphasis added]

[35] With respect to obtaining this Court’s approval, clause 23(b)(iii) of the FLA states:

The court may, on the application of a spouse or person having an interest in property, by order, …

(b) authorize the disposition or encumbrance of the matrimonial home if the court finds that the spouse whose consent is required, …

(iii) is unreasonably withholding consent,

subject to any conditions, including provision of other comparable accommodation or payment in place of it, that the court considers appropriate; [Emphasis added]

Unreasonable Withholding of Consent?

[36] Anthony agrees that the Farm should be listed for sale. However, his consent is conditional on the following terms:

• Anthony shall be permitted to fully participate in the listing and sale of the Farm;
• He shall be paid $155,000 from the proceeds of sale in satisfaction of outstanding costs Orders;
• He shall be paid a further $76,111 from the proceeds of sale in satisfaction of his purchases of furniture, appliances and tools which he purchased with his own funds post-separation and which are being sold with the Farm; and
• The remaining proceeds of sale shall be held in trust by the real estate lawyer representing Jennifer on the sale of the Farm.

[37] Given that Anthony’s consent to the sale of the Farm is conditional on certain conditions that Jennifer does not accept, there is no consent within the meaning of s. 21(1)(a) of the FLA.

[38] The Court may authorize the sale of a matrimonial home when the spouse whose consent is required has unreasonably withheld consent.

[39] The withholding of consent for the sale of a matrimonial home is reasonable when the best interests of the children would be harmed: Jiang v. Zeng, 2019 ONSC 1457, para. 51; Goodman v Goodman, 2014 ONSC 3466, paras. 33-34. It is also reasonable to withhold consent when the sale of a matrimonial home would prejudice an equalization payment or equitable interest or other cause hardship to the spouse whose consent is required: Jiang, paras. 52-53; Royal Bank v. King (1991), 82 D.L.R. (4th) 225 (Ont. Gen. Div.), paras. 29, 40.

[40] For reasons described below, I find that Anthony unreasonably withheld his consent by requiring acceptance of the above-noted conditions.

Appropriate Conditions on the Sale of a Matrimonial Home

[41] In M. v. H., [1999] S.C.J. No. 23 (SCC), para. 85, the Supreme Court of Canada adopted the following statement:

The purpose of the Family Law Act is to provide for the equitable resolution of economic disputes that arise when intimate relationships between individuals who have been financially interdependent break down.

[42] Whether it is appropriate to impose a condition on the sale of a matrimonial home is a fact specific exercise that turns on a determination of what is “appropriate” in the circumstances having regard to the purpose of the FLA.

Should Anthony Participate in the Listing and Sale of the Farm?

[43] At the hearing of the motion, I asked counsel to determine whether there were any terms related to the process for the sale of the Farm that they could agree upon. Within two days, the parties advised that they had agreed to the following terms:

(1) The Farm will be listed for sale on the open market as soon as practicable; (2) Louise Vezina of Sotheby’s International Realty shall be the listing agent; (3) Ms. Vezina shall provide Jennifer and Anthony with a marketing plan and market comparisons and that she will recommend the appropriate listing price; (4) I shall be seized of this matter and, should a dispute arise, the parties may return this matter before me for a summary determination on one day’s notice; (5) Although Ms. Vezina will provide recommendations for the appropriate listing price, the Farm shall not be listed for sale for less than $1.25 million; (6) Anthony may remove the outdoor oven from the Farm; and (7) With the exception of the outdoor oven, all appliances and chattels currently situated on the Farm may be sold with the Farm.

[44] Anthony submits that he should be involved in all aspects of the negotiation and sale of the Farm and that his approval should be required for the acceptance of any offer or the making of a counter-offer. Jennifer disagrees. She submits that she should have sole carriage of the listing and sale of the Farm however Anthony: (1) shall be kept apprised of all offers, negotiations and counter-offers between Jennifer and a prospective purchaser; (2) may speak with the real estate agent and provide his input regarding the sale of the Farm.

[45] Given the fact that Jennifer seeks to sell the Farm on the open market in order to avoid a tax sale on the above terms is ample evidence that she seeks to maximize the price paid for the purchase of the Farm. I find that Anthony’s interest in maximizing the sale price of the Farm are appropriately addressed by the agreed upon terms and the additional terms proposed by Jennifer.

Is there an Outstanding Costs Order(s) of $155,000?

[46] Anthony submits that the Ontario Court of Appeal’s decision on April 17, 2020 did not set aside the costs order made by Justice Gilmore as it relates to Anthony’s motion to vary support. In that regard, as noted earlier, Justice Gilmore ordered that $150,000 of the $340,000 awarded to Anthony would be enforceable as legal fees related to the payment/collection of support.

[47] The parties’ difference regarding the effect of the Ontario Court of Appeal’s decision should be resolved by contacting the Registrar of the Ontario Court of Appeal in order to obtain an appointment to have the terms of the Order settled. In the event, that any portion of the $340,000 award of costs has not been set aside by the Ontario Court of Appeal, then such outstanding award of costs shall be paid from the proceeds of sale of the Farm to Anthony. In the absence of an Order from the Ontario Court of Appeal that settles this interpretive dispute, it was unreasonable to require the payment of $150,000 in costs as a condition for the sale of the Farm. Similarly, it is inappropriate to require such payment until an Order specifies that such payment is required to be made by Jennifer to Anthony.

[48] In addition, counsel for Jennifer agrees that the $5,000 award of costs made by the Divisional Court is outstanding and shall be paid from the proceeds of sale of the Farm.

Should Anthony be Paid from the Net Proceeds of Sale for the Cost that he Incurred to Purchase Chattels that are being Sold with the Farm?

[49] Anthony claims $76,111 for the expense that he incurred in purchasing various chattels for use at the Farm after his separation from Jennifer. Not all of the invoices relied upon by Anthony are billed to him. Some of the invoices are billed to another person (Alexander Josephson). Other invoices show that the purchased items delivered to a location other than the Farm. Jennifer’s evidence does not address these specific items. It is her position that the current value of these chattels is much less than their cost of purchase.

[50] Given these concerns, I find the determination of whether Anthony purchased these items for the Farm post-separation should be determined at trial, if the parties cannot come to an agreement on this point. Accordingly, I find that it was unreasonable for Anthony to withhold his consent to the sale of the Farm on this basis. I also find that it is inappropriate that such condition be imposed on the sale.

Should the Overpayment of Support be Paid to Anthony from the Net Proceeds of Sale of the Farms?

[51] At the hearing of this motion, Ms. Rosen submitted that Anthony should be paid $346,803 from the net proceeds of sale of the Farm on account of the finding by Justice Gilmore that Anthony had overpaid interim support in 2017 and 2018. Ms. Romano submits that the overpayment amounted to $228,428.00 once the tax consequences related to the overpayment of spousal support for both parties were considered. Nevertheless, Justice Gilmore states that any credit owed to Anthony from the overpayment of support in 2017 and 2018 is to be used as “… a credit toward equalization, retroactive child or spousal support or in any manner which the trial judge sees fit”: Leitch v. Novac, 2019 ONSC 794, para, 416. Accordingly, it is inappropriate to order that the overpayment of support be paid from the proceeds of sale.

Should the Net Proceeds of Sale be Held in Trust?

[52] Jennifer submits that the net proceeds of sale, following the payment of any outstanding costs Orders, should be immediately paid to her following the closing of the sale. Her affidavit states:

I am in desperate need of funds and have been financially drained as a result of this litigation. I owe approximately $65,000 in property tax arrears for the Farm. I owe approximately $60,000 in personal income tax arrears. I have not been able to pay my children’s school tuition for the upcoming school year and, to add insult to injury, I owe Anthony costs in the amount of $5,000. I have no ability to pay for any of these expenses, unless I am able to access my equity in the Farm.

In addition to my personal obligations, there is no end in sight in this litigation with Anthony and the Novac/Sonco Respondents. Significant work is required to bring this matter to a trial. For example, disclosure is now staled dated, as I have no financial information past 2017. Expert reports will have to be prepared and updated and further questionings may be required, given the failure to produce certain key witnesses for the summary judgment motion.

Anthony and the Novac/Sonco Respondents’ “catch me if you can” approach in this litigation has cost me millions of dollars in legal fees to date, much of which I have not been able to pay. In fact, the Respondents are very much aware that Epstein Cole LLP has been representing me through this litigation and the appeal without being paid. …

I am advised and verily believe that Epstein Cole LLP cannot continue to provide their services indefinitely without at least a partial payment. Unless the net sale proceeds of the Farm (which is my solely owned asset) are released to me, I will not be able to continue pursuing my family law entitlements. [Emphasis added]

[53] Aside from asking that certain amounts be paid to him immediately, Anthony submits that the balance of the proceeds of sale should be held in trust pending the final disposition of this Application in order to preserve Jennifer’s ability to pay a trial judgment in favour of Anthony.

[54] In the normal course of a relatively uncomplicated economic dispute following the dissolution of a marriage, the proceeds of sale of a matrimonial home owned by one spouse have been held in trust pending the final determination of the parties’ respective financial claims: Goldman v. Kudelya, 2011 ONSC 2718, para. 38; Jiang, para. 58; Goodman, 2014 ONSC 3466, para. 35.

[55] The claim advanced by Jennifer is admittedly complex. Anthony’s financial interests are intertwined with entities controlled by his parents and ascertaining the extent that Anthony’s financial interests have been allegedly underreported is a matter that has required Jennifer to incur great cost in obtaining broad disclosure that was largely resisted by the Respondents.

[56] Given their differing views regarding Anthony’s financial interests, millions of dollars separate the parties’ positions regarding equalization of property and support.

[57] Jennifer submits that her lawyers will no longer be able to represent her if she does not make a partial payment towards their outstanding costs and thus, she will not be able to pursue this claim if she does not receive the net proceeds of sale.

[58] On the other hand, Anthony submits that he will be prejudiced if the net proceeds of sale are not held in trust pending the final determination of the parties’ claims as the Farm is Jennifer’s only significant asset against which he can recover his award. In my view, Anthony’s request that the net proceeds of sale from the Farm be held in trust is designed to secure pre-judgment execution and thus is in the nature of a freezing order. As such, it requires proof of a “strong prima facie” case: See O2 Electronics Inc. v. Sualim, 2014 ONSC 5050, para. 67; Sibley & Associates LP v. Ross, 2011 ONSC 2951, para. 12.

[59] Anthony’s confidence in the merits of his case may be ultimately borne out, but I am in no position to make that determination on this motion. The determination of Anthony’s financial means will turn on the evidence at trial including various emails and memos. In fact, the Ontario Court of Appeal seemed to suggest that certain documents support Jennifer’s position: (1) although his father Michael kept all of the proceeds of the buyout of Sonco’s gaming management contract of the River Cree Casino, “… at very least, there was an agreement that Anthony had an entitlement to a portion of the buyout proceeds”; (2) “… an ongoing intention among the alleged co-conspirators to divert funds to Anthony”: Leitch v. Novac, 2020 ONCA 257, paras. 53, 56.

[60] Accordingly, I am not satisfied that the alleged prejudice claimed by Anthony will be realized in the event that the net proceeds of sale are not held in trust. However, I am satisfied that Jennifer’s ability to pursue her claims under the FLA will be prejudiced if the net proceeds of sale are not paid to her on closing. In my view, the equitable resolution of this economic dispute would not be promoted if Jennifer was effectively denied access to justice because she was unable to use the proceeds of sale to pay her lawyers so that they would continue to represent her.

[61] In my view, it is appropriate in these circumstances, for the net proceeds of sale of the Farm be paid to Jennifer immediately after closing and after the payment of any outstanding costs Order owed by Jennifer to Anthony.

Conclusions

[62] For the reasons, given Order to go as follows:

• Jennifer shall be permitted to list the Farm for sale on the open market as soon as practicable;
• Jennifer shall have the sole authority to negotiate, accept or counter-offer any offer to purchase the Farm;
• Jennifer shall have the sole authority to close the sale of the Farm, including signing all documentation, without consultation with or without the consent of the Respondent;
• Anthony’s consent or authority to list and complete the closing of the sale of the Farm, is dispensed with pursuant to section 23 of the FLA with the exception that:
  • Jennifer shall, in a timely manner, keep Anthony apprised of all offers, negotiations and counter-offers between Jennifer and a prospective purchaser;
  • Anthony may provide his views regarding the terms of the proposed marketing and sale of Farm to the listing agent;
• The sale of the Farm shall be subject to the following terms:
  • Louise Vezina of Sothebys International shall be the listing agent;
  • Ms. Vezina shall provide Jennifer and Anthony with a marketing plan and market comparisons and that she will recommend the appropriate listing price;
  • The Farm shall not be listed for sale for less than $1.25 million;
  • Anthony may remove the outdoor oven from the Farm prior to the closing of the sale of the Farm;
  • All appliances and chattels currently situated on the Farm may be sold with the Farm;
  • Should any dispute arise related to the sale of the Farm, the parties may return to have that matter adjudicated by me, in a summary manner, on one day’s notice;
• The net proceeds of sale be immediately released to Jennifer upon closing of the sale subject to the payment of any outstanding costs Orders owed by Jennifer to Anthony;
• Anthony shall lift and withdraw the Writ of Seizure and Sale registered against title to the Farm immediately;
• Service of Jennifer’s Amended, Amended Notice of Motion, Amended Notice of Motion and Supplementary Affidavit on Anthony, through his counsel, Avra Rosen, is validated;
• The parties are granted leave to commission affidavits in this matter by telephone or video conference; and
• This Order shall take immediate effect without a formal Order being signed and entered.

[63] If the parties be unable to come to an agreement on costs, then I may be contacted.

[64] It is shocking that millions of dollars have spent in this litigation well before trial. Given the long, expensive and uncertain road ahead for all parties, the many years that have passed since their separation and the weight that this litigation has undoubtedly had on the parties, their new partners and their children, I encourage the parties to consider a further round of settlement discussions. If they wish the assistance of the Court, I would be happy to make such arrangements.

[65] Finally, given the concerns that I have described, and having regard to Rules 2(2), 2(3) and 2(5) of the Family Law Rules, I shall case manage this Application and I expect all counsel to make every effort to assist this Court to move this proceeding along to resolution in a manner that promotes that primary objective of Family Law Rules. Towards that end, a case management conference shall be held by teleconference on June 25, 2020 at 10 am. I ask that the parties consult with one another in the preparation of a timetable that describes the various anticipated next steps in this proceeding, their timing and duration, and that identifies the earliest possible date that the parties would be ready for trial along with the estimated length of that trial and list of witnesses.

Mr. Justice M. D. Faieta

Released: May 26, 2020

COURT FILE NO.: FS-14-398336 DATE: 20200526 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JENNIFER ANN LEITCH Applicant – and – ANTHONY CHARLES JAMES NOVAC BOTH IN HIS PERSONAL CAPACITY AND IN HIS CAPACITY AS TRUSTEE OF THE NOVAC FAMILY TRUST (2013) MICHAEL NOVAC, BOTH IN HIS PERSONAL CAPACITY AND IN HIS CAPACITY AS TRUSTEE OF EACH OF THE NOVAC 2011 FAMILY TRUST AND THE NOVAC FAMILY TRUST (2013), NELLY NOVAC, IN HER CAPACITY AS TRUSTEE OF THE NOVAC 2011 FAMILY TRUST, SONCO GROUP INC., THE NOVAC 2011 FAMILY TRUST, THE NOVAC FAMILY TRUST (2013), JOHN MCCLURE IN HIS CAPACITY AS TRUSTEE OF THE LULU TRUST (2006), DAVID TAM IN HIS CAPACITY AS TRUSTEE OF THE LULU TRUST (2006) Respondents

REASONS FOR DECISION Mr. Justice M. D. Faieta

Released: May 26, 2020