CITATION: George v Wang, 2020 ONSC 6175
COURT FILE NO.: FS-19-13049 DATE: 20201013
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JULIAN ROCKY GEORGE Applicant
– and –
LI (SHIRLEY) WANG Respondent
COUNSEL: Shelly Kalra lawyer for the applicant Chad R. Rawn lawyer for the respondent
HEARD: October 8, 2020
ENDORSEMENT
DIAMOND J.:
Overview
[1] Pursuant to the Endorsement dated September 16, 2020 of Justice Nishikawa, the applicant brings this motion for the following relief:
(a) an order releasing 50% of the net sale proceeds from the property municipality known as 54 York Minister Road, Toronto, Ontario, M2P 1M3 (“the property”) to the applicant, without prejudice to his position that he is entitled to the total sum of $850,000.00 as per the Mediation Agreement dated March 26, 2019;
(b) an order that from the applicant’s 50% share of the net sale proceeds, he direct the real estate lawyer to pay the respondent the sum of $19,200.00 for child support arrears which accrued between June 2019 - October 2020;
(c) an order that the balance of the net sale proceeds remain in trust until further court order or agreement between the parties; and
(d) costs of the motion on a full recovery basis.
[2] The respondent did not seek leave to bring a cross-motion, nor was any cross-motion served or filed. The respondent opposes the relief sought by the applicant on two primary grounds:
(a) this Court lacks jurisdiction to hear this motion on the grounds that the subject matter of the relief sought by the applicant is properly within the jurisdiction of the mediator/arbitrator; and
(b) the respondent’s claims for damages arising from the applicant’s alleged misconduct relating to the listing and sale of the matrimonial home should be set off against the amounts claimed by the applicant on this motion.
[3] At the conclusion of the hearing, I took my decision under reserve.
Summary of Relevant Facts
[4] On March 26, 2019, the parties attended a mediation with Paul McInnis. That mediation dealt with the financial issues arising from the breakdown of their common law relationship (ie. the support and parenting issues were not mediated). According to the applicant, the main dispute addressed what to do with the property which was jointly owned by the parties.
[5] Ultimately, and with Mr. McInnis’ assistance, the parties entered into the Mediation Agreement dated March 26, 2019 (“the agreement”) whereby the respondent would obtain a new mortgage and purchase the applicant’s 50% interest in the property for $850,000.00.
[6] Clause 7.1 of the parties’ agreement provided as follows:
The parties agree that any issues arising out of this agreement shall be mediated and if no agreement arbitrated by Paul McInnis. Mr. McInnis’ arbitration agreement is attached as Schedule “A”.
[7] The draft arbitration agreement attached as Schedule “A” required the parties to arbitrate “the resolution of any issues arising from the implementation and enforcement” of the agreement, and to waive any right to further litigate those issues in court.
[8] The respondent did not end up purchasing the applicant’s interest in the property for $850,000.00 (or any sum). The respondent argues that the applicant interfered with her ability to secure the necessary financing by delivering threatening emails/texts to her attention. As set out hereinafter, this Court has already come to a different conclusion than the position advanced by the respondent.
[9] After efforts to try and save the deal failed, the applicant commenced this proceeding by way of Application issued on November 20, 2019. The scope of the relief sought in this application was wide, and included financial issues and custody/access issues. While the respondent has yet to serve and file an Answer, there is no dispute that the respondent has taken various active steps in this proceeding as detailed below.
[10] On December 5, 2019, mere weeks after this proceeding was issued, the parties entered into the consent order of Justice Gilmore (“the Gilmore Order”). Paragraphs 8 through 12 of the Gilmore Order permitted the respondent to reside in the property with the children on a temporary, without prejudice basis. The parties further agreed to list the property for sale by no later than January 20, 2020, and work co-operatively towards choosing a real estate agent and signing a listing agreement for the purpose of selling the property.
[11] In their respective affidavits filed on this motion, the parties differ as to why the property was not sold during the first six months of 2020. The applicant gave evidence that he was unable to secure the respondent’s consent to reduce the listing price, with the respondent continuously delaying and creating road blocks to prevent the property from being listed and/or shown to prospective purchasers. The respondent disputes the applicant’s account, but did not provide much in the way of evidence to support her position. In any event, this specific issue has already been brought before the Court, resulting in several endorsements which not only support the applicant’s version of events, but ultimately resulted in an order dispensing with the respondent’s consent to sell the property for $2,300,000,00.
[12] The transaction closed on September 30, 2020, and there is currently the sum of $1,209,863.07 being held in trust representing the net sale proceeds.
[13] To date, the respondent has participated in three case conferences and five motions (not including the within motion) in this proceeding. The respondent has never brought a motion seeking a stay of this proceeding on the basis of a lack of jurisdiction.
[14] When the applicant brought a motion before Justice Kraft seeking, inter alia, an order permitting dispensing with the respondent’s consent to sell the property for $2,300,000.00, the respondent not only opposed that relief, but brought her own cross-motion seeking (a) an order permitting her to purchase the applicant’s 50% interest in the property for the sum of $1,180,000.01, or in the alternative (b) an order permitting the respondent to purchase the applicant’s 50% interest in the property for $1.00 more than the current highest valid offer (i.e. granting the respondent a first right of refusal).
[15] In addition, the respondent sought an order mandating the applicant to be responsible for payment of one half of the mortgage and line of credit expenses existing on the property as at March 26, 2019 including all interest charges accruing to that date.
[16] In granting the applicant’s motion (and dismissing the respondent’s cross-motion), Justice Kraft made the following findings:
• It was clear on the record that the respondent did not comply with the agreement by failing to buy out the applicant’s 50% interest in the property for $850,000.00.
• It was clear on the record that even though the respondent knew by July 2019 that the property had to be sold, she failed to respond to any requests to move the sale forward and took no steps to list the property until the matter proceeded before Justice Gilmore.
• The respondent subsequently delayed in signing the listing agreement until February 2020.
• The respondent conducted herself as an unwilling vendor, as she (i) did not ready the property for sale, (ii) interfered with showings and (iii) refused to erect a “for sale” sign on the property.
• The respondent subsequently refused to lower the purchase price, even though zero offers to purchase were received at the original listing price of $2,695,000.00 for approximately four months.
[17] In a subsequent endorsement, Justice Kraft further found on the record before her that the respondent never made a good faith attempt to provide the buy-out amount of $850,000.00 to the applicant.
[18] It was not until the September 16, 2020 case conference before Justice Nishikawa (nearly one year after this proceeding was commenced) that the respondent formally raised the issue of whether this Court had jurisdiction to deal with the relief sought on the within motion. As stated, no cross-motion seeking a stay of this proceeding was brought by the respondent.
[19] Notwithstanding Justice Kraft’s findings, the respondent maintains that the applicant is liable to her for $562,695.00 in damages for the following reasons:
(a) $400,000.00 for the reduction in fair market value when the property ultimately sold for $2,300,000.00;
(b) $143,945.00 in real estate agent fees;
(c) a mortgage cancellation penalty in the amount of $17,000.00; and
(d) legal fees on the sale of the real estate property in the amount of $2,750.00
[20] The applicant has produced evidence on this motion that, despite the respondent agreeing to purchase the applicant’s 50% interest in the property for $850,000.00, in September 2019 the respondent renewed the Scotiabank mortgage registered against title to the property for an additional three years without the applicant’s consent.
[21] Scotiabank has delivered correspondence confirming the applicant’s position, namely that the respondent told Scotiabank that she secured the applicant’s consent when no consent was ever requested or provided.
Issue #1: Does this Court lack jurisdiction to hear the applicant’s motion?
[22] To begin, the respondent argues that she has never taken any steps akin to “attornment”, and thus the subject matter of the within motion is “an issue arising from the implementation and enforcement of” the agreement that triggers the mediation/arbitration clause and places the matter before Mr. McInnis.
[23] Contrary to the respondent’s submissions, this Court’s jurisdiction to hear and decide the issues in this proceeding is bestowed by the issuance of the application, not the terms of the Gilmore Order. The respondent’s position that this Court’s jurisdiction is limited to the matters arising from the listing and sale of the property (ie. what the respondent deems to be the “scope of the Gilmore Order”) is simply incorrect. Until such time as a motion is brought to stay this proceeding, this Court maintains jurisdiction to hear all the issues raised and/or joined in the pleadings. The fact that the parties consented to the Gilmore Order (the terms of which go beyond the listing and sale of the property) is not the originating document bestowing jurisdiction upon this Court. The application, which seeks various remedies pursuant to statutory and common law rights, is the originating document.
[24] Further, the respondent’s argument is the definition of piecemeal. After participating in three case conferences and five motions, including seeking relief on two separate cross-motions before Justice Kraft, it cannot possibly lie in the respondent’s mouth to now take the position that this Court lacks jurisdiction to hear the within motion. Jurisdiction is not an elastic concept, as this Court either has jurisdiction, or it does not. Using the respondent’s own logic, if the subject matter of her previous two cross-motions was clearly an issue arising from the implementation and enforcement of the agreement, how was she able to pursue that relief before Justice Kraft? The answer is that she fully participated on the merits because it suited her. Even though the respondent was not successful before Justice Kraft, this does not change the fact that the respondent was content with, and availed herself of, this Court’s jurisdiction to advance her own interests.
[25] As held by Justice Curtis in Tameanko v. Goldman 2014 ONCJ 580, where a party does not raise the existence or effect of an arbitration clause and its possible impact upon a legal proceeding, that party acquiesces to a waiver of the arbitration clause. Such a result is even more obvious when that party not only fails to raise the existence or effect of the arbitration clause, but then takes active steps in the legal proceeding to pursue his/her rights, interests and claims. This is exactly what the respondent did in this proceeding.
[26] The respondent never sought to enforce the mediation/arbitration clause. She in fact sought the return of her retainer funds from Mr. McInnis after this proceeding was commenced. As found by Justice Kraft, the respondent has delayed matters, and is now hoping that this Court follows her lead to place her head in the sand and ignores the events since the issuance of this proceeding. Such a result is neither reasonable nor correct.
[27] I thus reject the respondent’s submissions, and find the answer to Issue #1 to be “no”.
Issue #2: Should 50% of the net sale proceeds be released to the applicant?
[28] The respondent’s argument on this issue is premised on two principal grounds:
(a) the applicant’s entitlement to the sum of $850,000.00 was based upon the respondent buying out the applicant’s 50% interest (which did not happen); and,
(b) the net sale proceeds should remain in trust as security for the respondent’s damages allegedly caused by the applicant.
[29] Dealing with the first ground, once again I cannot see how the respondent can insist upon strict compliance with the agreement when it was the respondent herself who breached the terms of that agreement (as found on several occasions by Justice Kraft). It is noteworthy that as part of the agreement, the applicant was entitled to the sum of $850,000.00 due to, in part, releasing any rights he had to various other properties (which the respondent has since sold generating a minimum of $1,174,700.00). The respondent has enjoyed all the benefits due to her under the agreement, but has failed to honour the one primary term which benefits the applicant.
[30] The primary objective of the Family Law Rules is to enable the Court to deal with all cases justly and fairly, with a view to saving time and expense, and dealing with cases efficiently while taking in mind their importance and complexity. As previously found by Justice Kraft, the respondent’s conduct was designed to frustrate the applicant’s ability to receive the sum of $850,000.00. That misconduct came with a risk, and the respondent must now face the consequences of her actions.
[31] With respect to the respondent’s alleged set-off claims (based upon a theory of damages yet to be pleaded in this action as the respondent has not delivered an Answer), the findings made by Justice Kraft have resulted in the respondent’s theory of damages being built upon a foundation of sand. The alleged $400,000.00 reduction in fair market value lays squarely at the feet of the respondent. The real estate agent fees would never have been incurred had the respondent simply complied with her obligations under the agreement and purchased the applicant’s 50% interest in the property for $850,000.00. The mortgage cancellation penalty was incurred as a result of the respondent renewing the mortgage for a further three years without securing the applicant’s consent.
[32] The respondent argues that Justice Kraft’s findings were made on interim motions, and that her damages claim is still being pursued at trial. As such, she submits that it is premature for this Court to release 50% of the net sale proceeds to the applicant when the respondent’s damages claim may still succeed.
[33] I have significant difficulty with this submission. All of the evidence to be proffered by the respondent at trial already existed at the time of the motions before Justice Kraft, and in fact was placed by the respondent before Justice Kraft on those motions. While those motions were not technically seeking full or partial summary judgment, given the respondent’s position on those motions, one would have expected the respondent to “lead trump” and place all available evidence before the Court. On my review of the record before Justice Kraft, the respondent did just that, and is now simply repeating that same evidence in response to this motion. However, even if the respondent did not “lead trump”, all of that evidence was nevertheless available and the respondent chose not to tender it. That is a decision which should not be visited upon the applicant at this stage.
[34] The answer to question #2 is therefore “yes”, and I order the sum of $604,500.00 to be released from the net sale proceeds to the applicant forthwith, with the sum of $19,200.00 paid from the $604,500.00 to the respondent for the outstanding child support arrears. The balance of the net sale proceeds shall remain in trust to the credit of this proceeding pending further court order or agreement between the parties.
Costs
[35] I would urge the parties to exert the necessary efforts to try and resolve the costs of this motion. If those efforts prove unsuccessful, they may serve and file written costs submissions, totalling no more than five pages including a Costs Outline, in accordance with the following schedule:
(a) the applicant’s costs submissions to be served and filed within seven (7) business days from the release of this Endorsement; and
(b) the respondent shall thereafter have an additional seven (7) business days from the receipt of the applicant’s costs submissions to serve and file her responding costs submissions.
Diamond J.
Released: October 13, 2020
CITATION: George v Wang, 2020 ONSC 6175
COURT FILE NO.: FS-19-13049 DATE: 20201013
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JULIAN ROCKY GEORGE Applicant
– and –
LI (SHIRLEY) WANG Respondent
ENDORSEMENT
Diamond J.
Released: October 13, 2020