Court File and Parties

COURT FILE NO.: FS-19-9429

DATE: 20210423

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: V. Shaganenko, Applicant

AND:

N. Shaganenko, Respondent

BEFORE: S. Shore, J.

COUNSEL: Self-Represented

Self-Represented

HEARD: April 20, 2021

ENDORSEMENT

[1] By order of Justice Hood, dated February 4, 2021, there were two motions returnable before me today:

1. The Applicant’s motion to find the Respondent in contempt of the non-depletion order; and

2. The Respondent’s motion for the listing and sale of the matrimonial home, municipally known as 32 Orchard Park Drive, Toronto, ON (“matrimonial home”).

[2] The parties each included requests for other relief in their materials, but Justice Hood’s order was specific as to which motion were going to be proceeding today. Despite Justice Hood limiting the contempt motion to the non-depletion order, the Applicant was seeking an order for contempt on a multitude of issues. I have addressed most of these issues below as they were easy to dispose of and dismiss.

[3] I am not prepared to hear the other motions at this time.

Motion for a finding of Contempt:

[4] The Applicant has brought a contempt motion under rule 31 of the Family Law Rules, alleging the Respondent is in contempt of the following orders:

1. He has failed to pay spousal support in accordance with my order dated December 18, 2019;

2. He has failed to pay the capital expenses on the matrimonial home in accordance with my order dated December 18, 2019;

3. He has failed to provide disclosure;

4. He depleted his assets, contrary to my order dated December 18, 2019;

5. For allegedly bribing witnesses; and

6. He lied to the court and specifically to Justice Goodman, during their conference, in alleging he had not money to pay support.

[5] For the reasons set out below, I cannot find the respondent in contempt on items #1, #2, #3, #5 and #6 above. I do find that the respondent breached the non-depletion order, but I am exercising my discretion to remedy the breach by other means, other than a finding of contempt.

[6] Rule 31 of the Family Law Rules states:

31. (1) An order, other than a payment order, may be enforced by a contempt motion made in the case in which the order was made, even if another penalty is available. O. Reg. 114/99, r. 31 (1). [emphasis added]

[7] Rule 31 is clear that I cannot make an order finding the Respondent in contempt with respect to a payment order. Therefore, I cannot make an order finding the Respondent in contempt of my order to pay spousal support or to pay the capital expenses on the matrimonial home, as this is a payment order. Further, with respect to payment of the capital expenses on the home, my order required both parties to pay their half share of the capital expenses on the home. The Applicant alleges the Respondent has not paid his share and the Respondent alleges that the Applicant has not paid her share but that he has paid his. I cannot make a finding beyond a reasonable doubt on this issue in any event, which is a requirement to make a finding of contempt.

[8] With respect to items #5 and #6, first, I cannot make an order for a finding of contempt with respect to alleged lies told to a judge at a conference or for allegedly bribing or influencing witnesses. The first requirement for proving contempt is that it must be contempt of a court order. The Applicant has not referred to court orders. There may be different routes to address her concerns about items #5 and #6, but it is not by bringing a motion for contempt of a court order. Further, conferences are confidential. Statements made at conference cannot be disclosed to any other judge except in very limited circumstances. Rule 17(23) states:

(23) No brief or evidence prepared for a settlement conference and no statement made at a settlement conference shall be disclosed to any other judge, except in,

(a) an agreement reached at a settlement conference; or

(b) an order. O. Reg. 114/99, r. 17 (23). [emphasis added]

[9] Finally, the “facts” being relied on for item #5 are only allegations at this time. Nothing has been proven and no findings of facts have been made. This remains a triable issue and cannot be determined by this court on the conflicting affidavit evidence.

[10] So, the only issues to consider at this motion are whether the Respondent is in contempt of the non-depletion order and the order to provide disclosure.

[11] What does the Applicant need to prove? In L. (A.G.) v. D. (K.B.), 2009 14788 (ON SC), [2009] O.J. No. 1342 (Ont. S.C.J.), the court said that in relation to each of the alleged breaches, the court must make the following findings:

1. That the relevant order was clear and unambiguous;

2. The fact of the order's existence was within the knowledge of the respondent (on the Motion) at the time of the alleged breach;

3. That the respondent intentionally did, or failed to do, anything that was in contravention of the order; and

4. That the respondent was given proper notice of the terms of the order.

(See: Haywood v. Haywood, 2010 ONSC 5615, [2010] O.J. No. 4317 at paras.41-43 (S.C.J.))

[12] The Applicant alleges the Respondent is in contempt of orders for disclosure. The Applicant did not direct this court to any clear order listing the disclosure to be provided by the Respondent. The Applicant did not provide a clear list of the disclosure outstanding by the Respondent. The only specific issue raised by the Applicant was that the Respondent failed to disclose one account and should have filed an updated financial statement as required by the Rules. The Applicant’s evidence was that she found new Visa cards for both the Respondent and their son and the Visa has never been disclosed. The Respondent evidence is that he and his son did receive a new Visa, but they never activated the cards or used them and therefore there were not statements to disclose. The standard on a contempt motion is high. The contempt must be proven beyond a reasonable doubt. I cannot find beyond a reasonable doubt that the Respondent failed to make disclosure in this regard.

[13] With respect to the non-depletion order, on December 18, 2019, I made the following order at paragraph 20:

(a) The Respondent shall not deplete his property, pursuant to section 40 of the Family Law Act, except in the usual course of business until further order of this court or agreement between the parties.

(b) The respondent is restrained and enjoined from encumbering, depleting, selling, removing or otherwise dealing with is assets except in the usual course of business.

[14] The Applicant alleges that the Respondent sold off business equipment, despite the non-depletion order. The Respondent denies selling off the business equipment, advising that without his equipment he cannot run his business. This allegation was not proven beyond a reasonable doubt. I cannot find for certainty on the evidence before me that the Respondent sold business assets/equipment. I cannot make a finding for contempt on this claim.

[15] However, despite the non-depletion order, the Respondent acknowledges that he drew down on the line of credit, in the amount of $69,000. His explanation was that he needed the money to meet his support obligation and to keep his business afloat. He further submits that he maintained the line of credit and made the mortgage payments so there was no prejudice to the Applicant. He alleges that the Applicant sabotaged his ability to earn an income by bad mouthing him to his clients, who will no longer do business with him.

[16] In Jackson v. Jackson 2016 ONSC 3466, [2016] O.J. No. 2870 (SCJ), Justice Chappel provided the following summary of the circumstances which warrant the use of contempt in family court proceedings:

a) It ultimately remains a matter for the Court’s discretion.

b) because of its seriousness and quasi-criminal nature, it must be used cautiously and with great restraint.

c) it cannot be reduced merely to a mechanism for enforcing judgments.

d) it should be used sparingly and as a measure of last resort where there are no other adequate remedies available. [emphasis added]

e) it is reserved for cases involving defiant conduct that is at the most significant end of the spectrum and where it appears to be the only reasonable means of sending a message to a litigant that court orders cannot be flaunted.

f) the complex emotional dynamics involved in family law disputes and the desirability of avoiding further escalation of the conflict between the parties are additional factors that prompt a cautious approach.

[17] A judge retains an overriding discretion to decline to make a contempt finding where the foregoing factors are met where it would be unjust to do so. The Ontario court of Appeal set out the following principles in Hefkey v. Hefkey, 2013 ONCA 44 (Ont. C.A.):

1. The civil contempt remedy is one of last resort;

2. A contempt order should not be granted where other adequate remedies are available to the aggrieved party i.e. in relation to an alleged access denial, a variation or enforcement of the access order;

3. Great caution should be exercised when considering contempt motions in family law cases; and

4. Contempt findings should be made sparingly and only where conferences to resolve problems or motions for enforcement have failed.

[18] Although I find that the Respondent is in breach of the non-depletion order, I find that there are other adequate remedies to enforce the order and remedy the situation. The court has a variety of powers under the Family Law Act and Rules to enforce its orders without recourse to the contempt power. For example, Rule 1(8) of the Family Law Rules provides:

1(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,

(a) an order for costs;

(b) an order dismissing a claim;

(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;

(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case;

(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;

(f) an order postponing the trial or any other step in the case; and

(g) on motion, a contempt order.

[19] The parties have significant equity in the matrimonial home. As set out below, I am ordering the sale of the matrimonial home. The Respondent shall be solely responsible for paying back the money he removed from the line of credit in breach of the court order from his share of the net proceeds of sale. Further, this is one of the reasons why I am not prepared to release to the Respondent his share of the net proceeds of sale of the home upon the closing of sale.

[20] Although I probably should have raised this issue at the start, the Applicant did not properly serve her Notice of Contempt Motion.

NOTICE OF CONTEMPT MOTION

(2) The notice of contempt motion (Form 31) shall be served together with a supporting affidavit, by special service in accordance with subrule 6 (4), unless the court orders otherwise. O. Reg. 114/99, r. 31 (2); O. Reg. 322/13, s. 19.

[21] The Applicant did not serve the Respondent by personal service. She served him by email. However, I advised the parties that I would exercise my discretion and approve the service as it came to the attention of the Respondent and the ability to serve someone in person is restricted by the stay at home restrictions due to COVID.

Sale of the Matrimonial Home:

[22] For these reasons set out below, I am ordering the sale of the matrimonial home.

[23] The matrimonial home is jointly owned by the parties. The parties have been living separate and apart since August 2018. The Applicant has remained in the matrimonial home. She is living there alone. The Respondent is renting an apartment.

[24] The Respondent has been paying (most of) the capital expenses on the home, despite my order that the Applicant contribute 50% towards these expenses. I also ordered the Applicant to pay the utility bills for the matrimonial home. The Applicant has not been paying the utility bills and they have gone into arrears. The Respondent is struggling to pay his own living expenses, spousal support and all of the capital expenses of the matrimonial home. The Respondent has been wanting to bring a motion for the sale of the matrimonial home at least since November 2019, when he was given leave to do so. The motion was not heard mainly due to the reduction of matters that could be heard because of COVID-19.

[25] There is a prima facie right to partition and sale of the jointly held home under the Partition Act. Section 2 of the Partition Act provides that all joint owners may be compelled to make or suffer partition or sale of land. The Court has very little discretion to refuse an order for partition and sale. A court can refuse to make an order if the application is malicious, vexatious or oppressive or if the pretrial sale would prejudice a genuine substantive right for trial. Neither exception applies to this case.

[26] The Applicant submitted that the house cannot be sold and belongs to her because she used damages from a car accident to purchase the home, and therefore the home is excluded from division. The Applicant was relying on information she advised she obtained on a government website. It appears that the Applicant has misread or misunderstood section 4(2) of the Family Law Act (FLA), which discusses excluded property, property that does not form part of a party’s net family property for the purpose of calculating the equalization payment owing between the parties under s.5 of the FLA. Section 4(2)(3) does state that damages for personal injury are excluded property, but then s. 4(2)(5) states that property, other than a matrimonial home, into which property referred to above can be traced is also excluded. So, if the Appellant applied the money she received for damages to purchase the matrimonial home, she has lost the exclusion.

[27] The Applicant also submits that the house should not be sold as a result of s.5(6) of the Family Law Act (although she refers to the Divorce Act), which provides for an unequal division of net family property in certain circumstances. If the Applicant is ultimately successful in her claim for an unequal division, the equalization is a money payment, not a transfer of property (or the transfer of the matrimonial home to the Applicant). A finding of unequal division of net family property would not be affected by the sale of the matrimonial home.

[28] I am ordering the sale of the matrimonial home. I am also ordering that the Applicant receive her half share of the net proceeds of sale of the home upon closing of sale. It will be important for the Applicant to have access to these funds to find alternate accommodations.

[29] I am not releasing more than $50,000 of the Respondent’s half share of the net proceeds to him, for a few reasons. The Respondent acknowledged in the past that he will owe the Applicant a significant equalization payment, although the amount is unknown. The Respondent has breached the non-dissipation order and I find it necessary to hold some money in trust to ensure he does not dissipate his assets further. The Respondent should receive some money to ease some of the financial strains being experienced by both parties. I am not prepared to release additional money (more than the half share already being released above) to the Applicant as an advance of the equalization payment because there will be some post-separation adjustments, including reimbursing the Respondent for the Applicant’s half share of the capital expenses of the home that should have been paid under my earlier order.

[30] Section 23 of the Family Law Act allows a court to dispense with the consent of the non-consenting spouse if consent is being unreasonably withheld. I am not in a position to make an order at this stage dispensing with the Applicant’s consent, although there were indications that the Applicant may not cooperate with the listing and sale of the home. I am going to give her the benefit of the doubt and assume that she will adhere to court orders. If she fails to adhere to the court order and cooperate with the listing and sale, the Respondent may bring a 14B motion for carriage of the listing and sale of the home to my attention.

[31] Finally, there are some repairs that need to be done to the home to prepare it for sale. The home has not yet passed an inspection, having been built more recently. As such, both parties shall be jointly financially responsible for any work to be done on the home to prepare it for sale. The parties shall complete any work deemed necessary by the inspector to pass inspection. The parties should use the line of credit, if available, to pay for the work. Again, if there are issues between the parties in getting this work completed, either party may bring a 14B motion to my attention.

[32] No other motions may be brought without leave of the conference judge. This case needs a final resolution and should proceed to be set down for trial on a timely basis. The next step is a settlement conference.

[33] On a final note this is a high conflict case, with two self-represented litigants with a long history plagued with distrust, anger, revenge and misrepresentations. Both parties made passive aggressive comments towards the court, talking about appealing court orders and threatening further action if orders were made against them. They both accused the other of trying to manipulate judges to gain sympathy of the court. Both threatened not to listen to unfair court orders. Despite direction and reminders from the court both parties spent a considerable amount of time in their submissions on issues that were completely irrelevant to the issues to be determined on this motion. The parties have rights under our law if unhappy with my orders, but these shenanigans have absolutely no effect on my decision on these motions and no place in a court. It is entirely irrelevant in determining the issues before me and inappropriate of both parties.

[34] Order to go as follows:

1. The Applicant’s motion for a finding of contempt is dismissed.

2. I find that the Respondent has failed to obey the non-depletion order, dated December 18, 2019. I have addressed enforcement of the order below.

3. The Respondent shall arrange for an inspector to attend at the matrimonial home for an inspection forthwith. The Applicant shall cooperate in giving the inspector access to the home. The inspector shall be asked to provide written recommendations as to what work needs to be done for the house to pass inspection. The Respondent shall arrange for the recommended work to be done on the home, and the Applicant shall cooperate with same. The parties shall be jointly responsible for the cost of completing this work. If available, the parties shall use the line of credit to pay for the costs.

4. Upon completion of the work, the Respondent shall provide the names of three real estate agents to list the matrimonial home. The Applicant shall have 48 hours from receipt of these names to respond, in writing, as to her choice. If she fails to respond, the Respondent may pick the agent of his choice.

5. The house shall be listed for sale at the listing price recommended by the real estate agent.

6. The Applicant shall ensure the house is kept in a clean and tidy condition for all showings. The Applicant shall vacate the home for any showings. The Applicant shall not interfere with or hinder the listing, showing or sale of the matrimonial home.

7. The parties shall accept the first reasonable offer on the home.

8. If the Applicant fails to cooperate with any of the above, the Respondent may bring a 14B motion to my attention for exclusive possession of the matrimonial home pending closing of sale and carriage of the sale.

9. Upon the closing of sale of the matrimonial home and after the usual adjustment (such as payment of encumbrances registered against the home, mortgage, real estate commissions etcetera), the Applicant shall receive her half share of the net proceeds of sale of the matrimonial home. The Respondent shall be solely responsible for paying down the initial $69,000 owing on the line of credit from his share of the proceeds of sale. The Respondent shall receive $50,000 from his share of the net proceeds of sale of the matrimonial home. The remaining proceeds of sale shall be held in trust with the real estate lawyer pending court order or agreement between the parities.

10. The next step in this file shall be a settlement conference. As per previous order, no motions may be brought before me without leave of the conference judge. I am requesting that the trial coordinator’s office coordinate a settlement conference for the parties if one has not already been scheduled by prior court order.

S. Shore, J.

Date: April 23, 2021