Ontario Superior Court of Justice, Family Court (London)

Court file no. F1463/19

Date: 20200915

Applicant: Kristen Nicole Wright Minnie

Respondent: Mark Edward Minnie

THIS MOTION HAVING BEEN HEARD BY VIDEO CONFERENCE, PURSUANT TO THE PROTOCOL IN PLACE DURING SUSPENSION OF NORMAL COURT OPERATIONS DUE TO THE COVID-19 OUTBREAK.

DATE: September 15, 2020

APPEARANCES:

Erin O’Leary, for the Applicant

Carolyn J. Lloyd, for the Respondent

ENDORSEMENT

Overview

1. Before me are two motions for interim relief, both of which are said to be brought on an urgent basis, therefore warranting their being heard:

a. notwithstanding the current restrictions on the hearing of family law motions during the ongoing suspension of regular court operations because of the COVID-19 pandemic; and

b. in advance of a case conference, (currently scheduled for September 28, 2020, at 2:00pm), pursuant to Rule 14(4) of the Family Law Rules.

2. The first motion is brought by the Applicant. The precise relief she seeks is set forth in her notice of motion dated August 26, 2020. However, her principal request is an order permitting certain amendments to an existing asset preservation/restraining order made vis-à-vis the Respondent on April 8, 2020, whereby certain additional wording would be included, formal legal descriptions would be added for certain specified real estate, (already identified informally in the existing order by various municipal addresses), and an additional property and associated formal legal description, (i.e., a specified condominium residence purchased by the Respondent post-separation), would be inserted/added, all with a view to facilitating the amended order’s registration on title. That principal request is coupled with ancillary requests for:

a. a declaration that the Respondent has breached the existing order, and

b. an order directing that the proceeds of any property sold by the Respondent, in breach of the preservation/restraining order, are to be held in trust pending final resolution of the ongoing property dispute between the parties.

3. The second motion is brought by the Respondent, apparently in response to the motion brought by the Applicant. The precise relief he seeks is set forth in his notice of motion dated September 2, 2020. However, in addition to requesting a dismissal of the Applicant’s motion, the Respondent essentially seeks an order vacating the existing preservation/restraining order in its entirety, or at least a significant scaling back of that preservation/restraining order limiting its scope to assets sufficient to address the Respondent’s estimated value of the Applicant’s entitlement to an equalization payment.

Additional background

4. The full context for the two motions is described in considerable detail in the motion material filed by the parties, which in turn makes reference to additional extensive material filed in relation to an earlier motion.

5. I have reviewed and considered, but will not attempt to replicate here, all of that information. For present purposes, I think the following relatively brief summary will suffice:

a. The parties were married in July of 1994, and their relationship endured, (apart from an eight-month separation in 2016), until their final separation in May of 2019.

b. There are three children of the marriage, currently 24, 22 and 20 years old, all of whom currently are pursuing post-secondary education, and living with the Applicant in the former matrimonial home because their educational institutions are here in London and/or because of the impact of the coronavirus on post-secondary studies.

c. There is no dispute that the Respondent was the primary source of family income, working as a self-employed entrepreneur who created and operated a number of successful, (or at least previously successful), incorporated businesses and real estate management and/or holding companies. The Applicant previously was a qualified teacher, who transitioned from full time teaching, through maternity leaves, to part time teaching, before she ceased teaching approximately 12 years ago – such that her certificates have now lapsed and/or need to be upgraded before she would have the ability to resume teaching.

d. In addition to various real estate properties, (some of which are rental properties, some of which was purchased for development, and some of which was/is associated with active business operations such as a motorcycle dealership), owned in whole or in part by the Respondent through various corporations, the parties built a substantial matrimonial home in respect of which the Applicant alone is the registered owner.

e. From the Applicant’s perspective, the Respondent has behaved erratically post-separation, sending the Applicant derogatory, aggressive and defiant communications, (not denied by the Respondent), calling the Applicant various extremely unpleasant names, and expressly indicating his intention to deal with the property in his name as he pleases, while deliberately drawing out these legal proceedings as much as possible. In that regard:

i. Concerns of the Applicant, prompted by such communications, have been reinforced by the Respondent engaging in significant financial transactions without the Applicant’s knowledge and consent, and/or against her wishes; e.g., substantially refinancing various properties, increasing mortgage debt, relocating existing business operations, making new investments, and suggesting an intention to pursue other transactions, along with his purchase of an expensive new condominium unit as his post-separation residence.

ii. At the same time, the Respondent was taking other actions that seem petty, vindictive and/or consistent with his stated intention to deal with his property as he pleases and resist provision of support to his wife and children; e.g., unilaterally cancelling credit cards, failing to pay bills and the children’s university tuition, failing to pay child and/or spousal support, and indicating that previously profitable businesses are no longer being operated.

iii. While engaged in such conduct, the Respondent is said to have been living a post-separation lifestyle not consistent with someone who is struggling financially; e.g., insofar as the Respondent is said to have taken frequent vacations, and to have presented his current partner with an expensive automobile as a gift.

f. From the Respondent’s perspective, while he regrets earlier communications sent to the Applicant, his financial transactions post-separation have been demonstrably rational and justified for the reasons set out at length in his affidavit material; e.g., as legitimate business transactions, as a means of necessarily acquiring a post-separation residence, and/or because certain family expenditures, (such as the cancelled phone service for his children), were becoming excessive. He also emphasizes, (albeit in a general way, without provision of detail apart from an indication that one of his company’s commercial tenants has been struggling to pay rent), that his various businesses have been impacted in a negative way by the ongoing pandemic, and by these proceedings.

g. As far as those proceedings are concerned, the Applicant commenced her application in January of this year and, prompted by the concerns outlined above, brought a motion in March of this year seeking disclosure, financial support and a preservation/restraining order; i.e., preventing the Respondent from depleting assets. Prior to its being argued, that motion was resolved by way of a consent order formally made by Justice Price on April 8, 2020. The complete provisions of that order form part of the continuing record. By way of summary, however, it included provisions requiring the Respondent:

i. to disclose certain information about his financial dealings;

ii. to pay the Applicant substantial monthly spousal support;

iii. to pay the Applicant a monthly amount in relation to various specified expenses associated with the matrimonial home;

iv. to continue making monthly payments associated with vehicles operated by the Applicant and the children;

v. to pay the children’s post-secondary education expenses; and

vi. to refrain from “selling, disposing, trading, encumbering or engaging in any similar activity”, either personally or through the corporations he controls, in relation to four specified properties identified by their municipal addresses, thereby “providing for the preservation and safekeeping of property to protect and preserve the Applicant’s equalization claim”.

h. The Applicant’s current motion was been prompted by a number of developments, (many of which are not denied by the Respondent), said to have taken place following the making of that consent order. In particular:

i. the Respondent has not provided required disclosure;

ii. alleging impecuniosity, the Respondent has not been paying the ordered spousal support, or the mandated payment in relation to household expenses, in turn prompting the Applicant to register the order with the Family Responsibility Office for enforcement; and

iii. the Respondent formally listed his recently purchased condominium residence for sale, and declined to provide requested disclosure in relation to matters such as the intended used of the sale proceeds that might be generated by the sale of that condominium, and the intended ownership of the Respondent’s new residence, if that was where the sale proceeds from the condominium would be directed.

i. Before bringing her motion, the Applicant complied with the triage procedure implemented, (in association with the Notice to the Public and Profession issued by the Chief Justice on May 19, 2020), to determine what matters warranted an “urgent” hearing during the current suspension of regular court operations brought about by the ongoing COVID-19 pandemic. In particular, on August 18, 2020, after considering submissions made on behalf of the Applicant, Justice Korpan found the Applicant’s intended motion to be presumptively urgent, and set a timetable for each party’s delivery of material relating to the Applicant’s intended motion, leading up to the authorized hearing of that motion.

j. In response, but without complying with the aforesaid triage procedure, the Respondent unilaterally brought his cross-motion, with supporting affidavit material indicating, amongst other things:

i. that he is struggling financially, for reasons he attributes in part to the pandemic and in part to the asset preservation/restraining order;

ii. that any breach of the existing preservation/restraining order was inadvertent, insofar as he did not understand that selling his condominium and converting its proceeds into other assets, with a contemplated comparable value, would violate an order intended to avoid depletion of assets; and

iii. that he now has obtained and recently served, (at considerable expense), expert valuations which, along with an estimate of the matrimonial home’s value, suggest that the Applicant will be entitled to an equalization payment of $1,000,000 to $1,500,000, in turn suggesting that an asset preservation/restraining order is not required, or can at least be scaled back considerably only to preserve assets sufficient to address that estimated equalization payment entitlement of the Applicant.

k. Again, both motions have been brought in advance of a case conference, now scheduled for a video conference hearing on the afternoon of September 28, 2020.

General principles

6. Pursuant to section 12 of the Family Law Act, R.S.O. 1990, c.F.3, (or “the FLA”), if the court considers it necessary for the protection of the other spouse’s interests under Part I of that Act, dealing with family property, the court may make an interim or final order:

a. restraining the depletion of a spouse’s property; and

b. for the possession, delivering up, safekeeping and preservation of the property.

7. Pursuant to section 40 of the FLA, a court may, on application, make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under Part III of the Act, dealing with support obligations.

8. In addition to the evidence filed by the parties, counsel referred me to numerous authorities wherein our courts have addressed the manner in which sections 12 and 40 of the FLA should be applied. While I have read those cases, I think it unnecessary to review them in detail here. For present purposes, I note that general principles suggested by those authorities include the following:

a. The object of sections 12 and 40 of the FLA is the protection of a spouse’s interests under the FLA by helping to ensure that there will be assets available to satisfy the entitlements of a spouse who is successful in obtaining relief under the Act. Relevant to that exercise is an assessment of the risk that assets in existence prior to trial will be dissipated.[^1]

b. Drawing analogies to principles applied when considering to grant interim or interlocutory injunctions, but without intending to lay down explicit and/or rigid formula or guidelines for the granting of such discretionary relief, courts applying sections 12 and 40 of the FLA frequently have regard to the following factors:

i. the relative strength of a claimant’s case;

ii. the balance of convenience or inconvenience; and

iii. the potential for irreparable harm.[^2]

c. The court accordingly will consider how likely it is that the claimant will be entitled to an equalization payment and/or support, as well as the effect the granting or not granting of such orders will have on the parties.[^3]

d. Preservation and restraining orders generally should be restricted to specific assets, (as opposed to an all-encompassing order binding all of a party’s property in a general manner), and a claimant seeking such an order should show, on a prima facie basis, that he or she is likely to receive an equalization payment or support equal to the value of the specific assets.[^4]

e. Restraining orders granted pursuant to section 40 of the FLA usually are made when there is evidence that the party obliged to pay support is not complying with a support order or there is other evidence of blameworthy conduct. The recipient spouse cannot rely on bare allegations or assumed beliefs; i.e., there must be something more than an “unsupported concern”.[^5]

9. With those legislative provisions and general principles in mind, I turn to an assessment of the particular motions before me.

Assessment

10. As I indicated during the course of counsel submissions, I frankly am reticent to address the Respondent’s motion on its merits for a number of reasons. In that regard:

a. I am mindful of the reality that, unlike the Applicant, the Respondent took no steps to have his motion screened through the applicable triage procedure to determine its urgency, in advance of the video-conference scheduled in accordance with the endorsement Justice Korpan made, as the triage judge, to address the motion brought by the Applicant, after that motion had been assessed and found to be presumptively urgent.

b. In my view, that is not necessarily an insurmountable barrier to the Respondent’s motion being heard and determined at the same time as the Applicant’s motion. In particular, I do not think it would be wise to hold that a party responding to an urgent motion, found to be presumptively urgent by a triage judge performing the preliminary assessment contemplated by the Notice to the Public and Profession issued by the Chief Justice, should always be precluded from asking the court to hear a responding cross-motion on an urgent basis if there has been no compliance with the triage process. The triage process currently in place usually involves the court receiving preliminary submissions regarding urgency on an ex parte basis, and the party making those submissions may have little or no incentive to disclose or raise possibly related issues perceived to be equally or more urgent by the responding party; a party who realistically may not be left with sufficient time, after being served with the endorsement of the triage judge, to engage and complete the triage process in relation to his or her own contemplated responding motion.

c. On the other hand, the fact that a triage judge has approved a specified motion as presumptively urgent self-evidently should not be regarded as a figurative “open door” through which any and all motions contemplated by the opposing party should be permitted to enter. In particular:

i. Such an approach would quickly undermine the necessary restrictions the Chief Justice’s Notice to the Public and Profession and associated triage procedure were designed to implement, during the current suspension of regular court operations.

ii. A triage judge not only approves the hearing of a specified contemplated motion by finding it to be presumptively urgent, but also imposes restrictions on the timing and extent of material to be filed for the permitted hearing of the urgent motion. When a party to an urgent motion approved for hearing by a triage judge unilaterally brings a responding motion, it will not have been subjected to the same controls/restraints, and/or is likely to create understandable concern on the part of the party bringing the original motion as to whether he or she can or should file “reply” material addressing the additional issues raised by the unexpected responding motion.

d. In my view, such concerns are brought to the fore in the present case, by the motion the Respondent wished to argue before me. For example:

i. For reasons attributed in part to the restrictions the triage judge placed on the permissible material to be filed by the parties, the Respondent has provided little or no detailed evidence in support of his somewhat bald assertions that his business operations are suffering because of the pandemic and/or the current preservation/restraining order to which he voluntarily agreed, (with the benefit of counsel, and with the substantial indefinite disruptions of the pandemic already underway), just four months ago. In the circumstances, there not only has been no finding that the Respondent’s motion is presumptively urgent, (based on the criteria outlined in the notice issued by the Chief Justice), but I find it difficult to find such urgency based on the material currently before me. Without limiting the generality of the foregoing, as the material before me indicates the Respondent was content with the making of the current preservation/restraining order on consent a relatively short time ago, it seems to me that the Respondent has an obligation to provide the court with at least some information indicating the existence of some material change requiring his current motion to be heard now, on an urgent basis.

ii. For reasons also attributed to the restrictions the triage judge placed on the permissible material to be filed by the parties, the Respondent has not filed the recently obtained and served expert valuations on which he bases his current assertions that there will be more than sufficient assets remaining, after trial, to address and satisfy an equalization entitlement of the Applicant that is only acknowledged but sizeable; i.e., in an amount the Respondent estimates at $1,000,000 to $1,500,000 million dollars. In my view, it would be inappropriate to rule on the Respondent’s motion without the court having the opportunity to review those valuations.

iii. However, the timing of the Respondent’s service of such valuations and his unilateral responding motion also prevent the Applicant from securing and presenting her own intended expert reports; e.g., critiquing the valuations obtained by the Respondent, offering competing valuations of the property owned by the Respondent, (through his corporations), and/or suggesting a quite different value for the matrimonial home.

11. For all such reasons, I decline to hear the Respondent’s motion, and will instead adjourn it to be spoken to at the case conference already scheduled for September 28, 2020.

12. As for the Applicant’s motion, which the triage judge found to be presumptively urgent, I do think it appropriate to address and deal with that motion on its merits. In that regard:

a. I do not think it appropriate to make a declaration finding that the Respondent is in breach of the consent order made on April 8, 2020, at least insofar as paragraph 7 of the order, (i.e., the paragraph containing the preservation/restraining order provisions), is concerned. Without limiting the generality of the foregoing:

i. The request was grounded mainly on the undisputed fact that the Respondent listed his condominium residence for sale.

ii. I agree with the submission, made by Applicant counsel, that the Respondent cannot easily emphasize that he is a successful and “savvy” businessman, (albeit one currently struggling because of the pandemic and the current preservation/restraining order), and credibly suggest, at the same time, that he had no idea that listing a property for sale would not fall within the concept of “selling” expressly included in the list of activities addressed by the preservation/restraining order.

iii. However, the Applicant’s request for a finding that the Respondent intentionally breached the preservation/restraining order is tantamount to a request for a finding of contempt; a finding requiring satisfaction of a high threshold, and one that includes a requirement that the relevant court order clearly prohibited the act done by the alleged contemnor. In this case, I note that the relief sought by the Applicant in her motion effectively confirms that the terms of the preservation/restraining order actually made on April 8, 2020, actually did not include wording making it absolutely clear that it applied to “all property” of the Respondent, and included no express reference to the Respondent’s condominium residence – although that arguably was in the contemplation of the parties, insofar as purchase of the condominium unquestionably seems to have been funded by a refinancing of properties expressly referred to in the order that was made.

iv. Moreover, the evidence before me makes it clear that the condominium residence was not sold, and that the Respondent terminated/removed the condominium sale listing after the Applicant made known her position that the contemplated sale would constitute a breach of the existing preservation/restraining order. In the circumstances, there was at most a threatened breach of the order which did not materialize, and to the extent that was contemptuous conduct, that contempt has been purged.

v. For the above reasons, I find the requested declaration of the Respondent having breached the existing preservation/restraining order inappropriate and unnecessary.

vi. Although the Applicant requested an order directing sale proceeds to be held in trust pending final resolution of property issues between the parties, “in the event” the Respondent sells any property in breach of the court’s order, in my view the court generally should avoid granting such hypothetical relief, and instead tailor the granting of such relief to the particular circumstances of any established breach of a court order.

b. The Respondent nevertheless admittedly is in breach of his support obligations created by the consent order made on April 8, 2020. To the extent a formal declaration is sought in that regard, I make it. Precise quantification and enforcement of the support arrears will be addressed by the Family Responsibility Office, unless the Respondent takes action to address the arrears or formally amend his support obligations. (I note that the Respondent’s outstanding motion does not request the latter relief.)

c. As for the Respondent’s disclosure obligations under the order, they were not the subject of detailed evidence or argument, and I decline to make a declaration in that regard either, without prejudice to the ability of the Applicant to bring a further motion in that regard, and/or to request an appropriate production order at the pending case conference.

d. Although the Applicant seeks to amend the existing order by inserting the words “all property” in the first line of paragraph 7 of the existing order, after the word “encumbering”, in my view that would have the effect of making the order all-encompassing; i.e., binding any and all property of the Respondent. As noted above, such preservation/restraining orders are not favoured by our courts, and I think it inappropriate to permit an amendment that has that effect, when the evidence before me does not make it clear that the Respondent intended to consent to such an order when it was made, and it is certainly being opposed now. In my view, a more appropriate amendment, to the first line of paragraph 7 of the existing preservation/restraining order, would be the insertion of the words “the properties specified below” after the word “encumbering”.

e. In my view, the requested amendment permitting inclusion of the additional sub-paragraph referring to the Respondent’s condominium residence in the 505 Talbot Street building should be included. There is no dispute that its purchase was funded by the Respondent’s encumbering of other properties specifically identified in the existing order, and the conduct of the parties in the prelude to the hearing before me strongly suggests, (on a balance of probabilities, if not the higher standard contemplated for a contempt finding), an understanding that the relevant condominium property should have been referenced in the original order, even though it may have been omitted through inadvertence.

f. As I indicated during the course of counsel submissions, I frankly do not view the amendments inserting/adding formal legal descriptions of the specified properties to expand in any way on the substantive relief agreed upon by the parties. Inclusion of the formal legal descriptions, with a view to facilitating registration of the amended order on title to the specified properties, is being done simply with a view to facilitate bringing the existence of the order to the attention of others; i.e., those who might otherwise participate in the encumbering, sale, transfer or other disposition of the specified properties without notice. The desired amendments certainly enhance enforceability of the order agreed upon by the parties. However, I cannot see how that gives rise to any valid complaint on the part of the Respondent. In particular, it hardly seems appropriate for the Respondent to complain that amendments might make it easier for him to be held to his court ordered obligations.

g. As noted above, I am mindful of the general obligation of a party claiming a preservation/restraining order to show, on a prima facie basis, that he or she is likely to receive an equalization payment and/or support equal to the value of the specific assets identified in the order. However, in the particular circumstances of this case:

i. The Applicant’s entitlement to a sizeable equalization payment is acknowledged.

ii. The Applicant’s entitlement to substantial spousal support, and the obligation of the Respondent to provide support in relation to the post-secondary education of his children, also were not disputed.

iii. This is not a case where I am being asked to consider the granting of such an order ab initio. To the contrary, the parties agreed back in April, with the benefit of counsel, that such an order was necessary and appropriate in the circumstances. In my view, that is sufficient to meet the prima facie showing required of the Applicant in the circumstances, even if the Respondent now may be able to establish, on a more fulsome evidentiary record, (including his expert evaluations, tested by the Applicant and her intended experts), that a preservation/restraining order less extensive than that initially intended and agreed upon by the parties may no longer be appropriate.

iv. Without further evidence, (e.g., expanding on the Respondent’s somewhat bald assertions that he and his business operations are somehow suffering because of the pandemic and the current court order, and/or that there has been some kind of material change since the original order was agreed upon), I find it difficult to find that continuation of the existing agreed order, at least until the Respondent’s motion can be heard, would represent a substantial inconvenience to the Respondent, or cause him irreparable harm.

v. As noted above, the Respondent also is not complying with his current court-ordered support obligations, buttressing the apparent need for protection of the Applicant’s entitlements pursuant to the FLA.

h. In addition to all of the above considerations, I think it important to bear in mind and emphasize that the Respondent himself has expressly indicated, in writing, an intention to deal with the property in his name as he pleases, regardless of the Applicant’s entitlements, and to abuse the court’s process to delay and/or frustrate those entitlements to the extent possible. In my view, that is certainly blameworthy conduct. He may have abandoned that intention, with the benefit of legal advice and more careful consideration. However, in my view the circumstances in this particular case now warrant heightened vigilance to further the goals reflected in sections 12 and 40 of the FLA.

Order

13. By way of summary, for the reasons outlined above, an order shall go, on an interim basis, whereby:

a. The Respondent’s motion is adjourned to be spoken to at the case conference already scheduled for September 28, 2020, at 2:00pm.

b. The Respondent is declared to be in breach of the court order made on April 8, 2020, insofar as his support obligations are concerned. However, the request for a similar declaration in relation to the provisions of paragraphs 1 and 7 of that court order is dismissed. The request for an order directing sale proceeds to be held in trust, if and when the court’s order is breached, is dismissed without prejudice to the Applicant’s ability to seek such relief in the event of an established breach of the court order.

c. Paragraph 7 of the order made on April 8, 2020, shall be and is hereby amended in the manner requested in paragraph 2 of the prayer for relief in the Applicant’s notice of motion dated August 26, 2020, except that the words “the properties specified below”, instead of the words “all property”, shall be inserted after the word “encumbering” in the first line of the paragraph.

Costs

14. Because my decision was reserved, the parties were unable to make any cost submissions having regard to the substantive outcome of the motions.

15. In the circumstances, I indicated that I would make provision in my endorsement for written cost submissions, if the parties could reach no agreement in that regard. To that end, if the parties are unable to resolve cost issues associated with the Applicant’s motion and the Respondent’s adjourned cross-motion:

a. the Applicant may deliver written cost submissions, not exceeding five pages, (not including any written settlement offers), within one week of receiving this endorsement;

b. the Respondent may deliver written responding cost submissions, also not exceeding five pages, (not including any written settlement offers), within one week of the time for delivery of the Applicant’s cost submissions; and

c. the Applicant may deliver written reply cost submissions, if any, not exceeding two pages, within one week of receiving the Respondent’s written responding cost submissions.

16. If no written cost submission are received within two weeks of the release of this endorsement, no costs shall be awarded in relation to either motion.

Ian F. Leach

Justice I.F. Leach

[^1]: See, for example: Bronfman v. Bronfman, 2000 22710 (ON SC), [2000] O.J. No. 4591 (S.C.J.), at paragraph 29, and Bandyopadhyay v. Chakraborty, 2019 ONSC 802, at paragraph 44.

[^2]: See Bronfman v. Bronfman, supra, at paragraphs 26-28, Both v. Both, 2008 15219 (ON SC), at paragraph 16; and Bandyopadhyay v. Chakraborty, 2019 ONSC 802, at paragraph 43.

[^3]: See Bronfman v. Bronfman, supra, at paragraph 29, and Bandyopadhyay v. Chakraborty, supra, at paragraph 44.

[^4]: See Lasch v. Lasch, 1988 4581 (ON SC), [1988] O.J. No. 488 (H.C.J.), at paragraphs 16-17, cited in Barber v. McGee, [2016] O.J. No. 7140 (C.A.), at paragraph 11; and Bandyopadhyay v. Chakraborty, supra, at paragraph 42.

[^5]: See Keyes v. Keyes, [2015] O.J. No. 1303 (S.C.J.), at paragraph 76.