Court File and Parties
COURT FILE NO.: FS-23-105864-00 DATE: 2023 10 18 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
PAMELA LIPPA Applicant Stephanie Di Federico, for the Applicant
- and -
NAQIBULLAH JAWANSHIR Respondent Paul Veugelers, for the Respondent
HEARD: Oct. 12, 2023, by video-conference
REASONS FOR DECISION
Emery J.
[1] The applicant brings this motion for two orders. The first order she seeks is to prevent the respondent from removing any further funds from the Royal Bank of Canada (RBC) line of credit registered against the matrimonial home. The second order she seeks is for leave to have a certificate of pending litigation (CPL) issued for registration against title to an investment property at 1008-290 Adelaide Street West in Toronto (the “Toronto condo”). Both properties are held in the name of the respondent alone.
Preliminary objection
[2] The respondent raised the preliminary matter of what issues the court should hear on this motion. He raises this matter because of the limited permission to bring motions given by Regional Senior Justice Ricchetti in his endorsement dated July 24, 2023, after an early case conference. This early case conference was heard before any Case Conference had been held.
[3] RSJ Ricchetti identified that the two issues before him on July 24, 2023 were the applicant’s claim for exclusive possession of the matrimonial home, and the freezing of the respondent’s ability to draw funds from the line of credit. RSJ Ricchetti granted permission for the parties to bring motions on those discrete issues. He further ordered that the parties must proceed to a Case Conference on all other issues.
[4] The motion to give exclusive possession of the matrimonial home to the applicant has been resolved on consent. The parties may provide a consent in writing along with a draft Order to my attention, by emailing those documents to my judicial assistant to have that Order issued.
[5] The applicant’s notice of motion returnable today asked for a number of other orders. Among them, she asked for an order that a CPL issue against title to the Toronto condo. She seeks this order as she has learned that the respondent has listed the Toronto condo for sale since the early case conference on July 24, 2023. The applicant made submissions that there is approximately $400,000 in equity in the Toronto condo in which she has made a trust claim, and that her ability to recover what the court might award her would be impaired if her interest is not protected.
[6] Upon hearing the submissions of counsel, I ruled that I would also hear the motion for the CPL against the Toronto condo. I made this determination because the need for the motion has arisen since RSJ Ricchetti issued his endorsement. There is no time to wait for a Case Conference to conference this issue. I am of the view that not addressing the prospect of the sale of the Toronto condo before the applicant’s claims have been adjudicated or accommodated by the court puts the applicant at risk of financial hardship. The directive under FLR 2(2) is to apply the Family Law Rules to deal with cases justly. This establishes the urgency required under FLR 14 (4.2) to the hear the motion for a CPL before a Case Conference.
Order to freeze the line of credit
[7] The applicant states in her primary affidavit dated August 8, 2023 that the line of credit at RBC had a zero balance on the date of separation. She goes on to state that the respondent had drawn down over $68,000 since that date. The applicant later states in her reply affidavit dated October 5, 2023 that the respondent has drawn down almost $50,000 more from the line since July, for a total of $116,000. There is approximately $175,000 of available credit left. This means that the respondent will exhaust the maximum room on the line of credit if he is not prevented from doing so. This will represent a corresponding reduction of equity in the matrimonial home.
[8] I agree with the conclusion reached by Kurz J. in Thomas v. Wohleber, 2020 ONSC 1965 that freezing a line of credit and restraining the depletion of property comes within the rubric of s. 12 of the Family Law Act. I find this conclusion is applicable to the facts in this case as the interests of each party are threatened by the respondent’s unimpeded access to the line of credit.
[9] Sachs J. held in Bronfman v. Bronfman, [2000] O.J. No. 4591 at paragraph 31 that the court will give considerable weight when deciding whether to make a non-depletion order where it is clear that the claimant will receive an equalization payment. The applicant has filed evidence that meets the three factors set out in paragraph 28 of Bronfman. She has demonstrated the relative strength of her case, that the balance of convenience favours her, and that she will suffer irreparable harm if the respondent is permitted to draw down on the line of credit much further.
[10] I find on the evidentiary record before me that there is a reasonable prospect that the applicant will receive a significant amount for equalization. The respondent’s payment of this equalization claim may come in large part from his interest in the matrimonial home after the applicant’s trust interest is considered. The applicant estimates that her equalization payment from the respondent will be at least $745,000. She advised the court through counsel that she may ask for a vesting order to the matrimonial home in part satisfaction of that entitlement.
[11] An Order shall issue freezing the line of credit at RBC secured against the matrimonial home. This relief is granted as a preservation order under s. 12 of the Family Law Act. I consider this order to be necessary to protect the applicant’s interests on an interim basis to restrain the respondent from depleting the value of her trust interest in the matrimonial home. The order also preserves the respondent’s interest in the matrimonial home that would otherwise be available for equalization.
[12] The only other term I must decide on this part of the motion is to determine if, or by how much, the respondent should be permitted to draw down the line of credit before this Order takes effect. He has provided a list of fixed expenses to maintain various properties, obligations and lifestyle expenses totaling $16,000 a month. This list of expenses includes $3,650 a month for rent, $450 for utilities and insurance for his rental property. It also includes $3,000 a month for food, cell phone, gas and other miscellaneous expenses including legal fees.
[13] The respondent states that he is unemployed, and that he relies on the line of credit to meet these expenses. However, in an application to rent his new accommodation dated August 29, 2023, he states that he is employed as a consultant by Domestic Exotic Imports where he earns $25,000 a month. This is evidence that the respondent currently has other income to meet his commitments.
[14] The Order freezing the respondent’s ability to draw down on the line of credit at RBC is effective immediately. All or part of the funds the respondent has drawn down from the RBC line of credit will be subject to such post separation adjustments he may be ordered at trial to repay to the applicant.
CPL to issue against the Toronto condo
[15] An order for a CPL is made under section 103 of the Courts of Justice Act, read in conjunction with rule 42.01 of the Rules of Civil Procedure. A party in a family case in Ontario the resort to the Rules of Civil Procedure under FLR 1(7) that provides where the Family Law Rules do not cover the matter adequately, the court may decide a matter by reference to the Rules of Civil Procedure.
[16] The test on a motion to grant a CPL is the same as on a motion to discharge a CPL obtained without notice. In either case, permitting a CPL requires the court to exercise discretion in equity. The court shall consider all the relevant matters between the parties to determine whether a CPL should either be granted, vacated or permitted to remain. See Perruzza v. Spatone, 2010 ONSC 841, at para. 20.
[17] The burden of proof on a motion for a CPL is on the moving party but may shift to the opposing party on motion. The onus is first on the party claiming an interest in land to show that she has a reasonable claim to an interest in land that is subject to litigation. The threshold for showing a reasonable claim to an interest in land is low. Once established, the onus is on the party opposing the CPL to demonstrate that there is no triable issue: Roseglen Village for Seniors Inc. v. Doble, 2010 ONSC 3239, at para. 10.
[18] I have considered those matters that are relevant to the applicant’s motion for a CPL. I find the applicant has made out a reasonable claim to an interest in the Toronto condo by virtue of the trust claims she is pleaded in her application. There is evidence that the Toronto condo was purchased with joint funds, and expenses for the Toronto condo have been paid out of joint funds. This evidence lays the foundation for the applicant’s claim that she has an equitable interest in the Toronto condo by way of a resulting or constructive trust.
[19] The applicant has attached marketing material for the listing the Toronto condo to her primary affidavit showing it has been listed for sale at $669,000. After subtracting the mortgage balance of approximately $270,000, this leaves $399,000 in equity to cover her trust claim.
[20] The respondent has not persuaded me that there is no triable issue, and therefore no reason to grant a CPL. There is no evidence that the respondent is refuting that the applicant has an interest in the Toronto condo. As there is no order containing terms to list the Toronto condo for sale, the respondent may not accommodate the applicant’s claim when it is sold unless a CPL is in place.
[21] An order is granted for a CPL to issue against title to the Toronto condo.
Conclusion and costs
[22] The motion is granted. Orders to go per the draft filed.
[23] The parties are encouraged to resolve costs between them. In the event they cannot agree on costs, the applicant shall file written submissions by October 24 and the respondent shall file responding submissions by October 31, 2023. No reply submissions shall be permitted. Each of the submissions shall be limited to two typewritten pages, not including a bill of costs or offer to settle.
[24] All submissions may be filed by email to my judicial assistant at melanie.powers@ontario.ca.
Emery J. Released: October 18, 2023