Court File and Parties

COURT FILE NO.: FS-21-26004 DATE: 20240621 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Olga Ostapova, Applicant AND: Vitaliy Ostapov, Respondent

BEFORE: M. Kraft, J.

COUNSEL: Olga Ostapova, self-represented Galyina Pribytkova, for the Respondent

HEARD: June 20, 2024

Endorsement

Nature of Motions

[1] Both parties brought motions before the court regarding the sale of their matrimonial condominium unit, located at 601-151 La Rose Ave, Etobicoke, ON, (“MH”) and other related relief. However, there is already a final order that the MH be listed for sale, the carriage of which solely lies with the respondent, Vitaliy Ostapov (“Vitaliy”).

[2] On December 4 and 5, 2023, Akazaki, J. heard a trial of this matter. On December 6, 2023, a final order was made (“Final Akazaki Order”), followed by a costs order, dated February 4, 2024. Neither party appealed the Final Akazaki Order or the costs order.

[3] The Final Akazaki Order, among other things, required a. Vitaliy to pay child support to the applicant, Olga Ostapova (“Olga”) for the parties’ one child in the sum of $336 a month, based on an imputed annual income of $38,000 until April 2025 (when the child will graduate from community college); b. Vitaliy to pay retroactive child support to Olga of $9,027.79, including prejudgement interest; c. Vitaliy to pay Olga $3,151.39 on account of an equalization payment; and d. granted Vitaliy sole carriage of the sale of the MH and dispensed with the Olga’s consent to complete the sale of the home. Olga was permitted under the Final Akazaki Order to make an offer to purchase the MH provided her offer was accompanied by a commitment letter from an institutional mortgage lender. In addition, Vitaliy was authorized to retain a real estate lawyer and direct him/her to divide the net proceeds of sale equally, after adding to his share and deducting from Olga’s share, the sum of $19,147.

[4] Vitaliy has not paid the child support arrears ordered of $9,027.79, nor has he paid the equalization payment of $3,151.39 in accordance with the Final Akazaki Order.

[5] On February 4, 2024, Akazaki, J. ordered Olga to pay Vitaliy costs of the long motion, in the fixed sum of $55,000. These costs have not been paid by Olga.

[6] Notwithstanding the terms of the Final Akazaki Order, Olga now attempts to re-litigate the issues regarding the matrimonial home.

Relief being Sought by Olga

[7] Olga bring this motion asking the court to determine: a. the monetary value of each party’s share in the matrimonial home; b. which party should have possession of the matrimonial home; c. whether she should be permitted to participate in the sale of the matrimonial home and enter into an agreement of purchase and sale with a third-party purchaser if she cannot buy out the respondent’s share in the matrimonial home; d. that Vitaliy pay his share of the mortgage and maintenance fees incurred from June 1, 2024 onward to when the condominium is sold; and e. that Vitaliy pay her a lump sum to enable her to move out.

[8] Vitaliy brings a cross-motion seeking the following orders: a. Olga to vacate the matrimonial home by July 1, 2024, and that the order be enforceable by the Sheriff, so the MH can be sold; b. Olga to pay the costs of $55,000 ordered by Akazaki, J., dated February 4, 2024, by this sum being deducted from her share of the net proceeds of sale from matrimonial home and added to his share of the net sale proceeds of the matrimonial home; c. If the matrimonial home sells for less than $420,000, that half the difference between $420,000 and the sale price be deducted from Olga’s share of the net sale proceeds and added to his share of the net sale proceeds of the matrimonial home; d. If there is any outstanding amount of mortgage, or property taxes at the time of the closing of the matrimonial home, that the entire outstanding sum be paid out of Olga’s share of the net sale proceeds; and e. Costs of the motion.

Issues to be Decided

[9] I do not have jurisdiction to determine whether the Final Akazaki Order should be changed in any way. As mentioned above, neither party appealed the Order and, as such, it is an Order which must be followed by the parties. The only issues for me to determine are: a. Should Olga be ordered to vacate the matrimonial home by July 1, 2024 or some other date to give effect to the Final Akazaki Order; and b. What additional sums should be deducted from Olga’s share of the net proceeds of sale from the matrimonial home, such as the outstanding costs order arising from the long motion of $55,000, and/or any outstanding mortgage or property taxes, and/or any sum between the purchase price of the matrimonial home and $420,000.

Brief Factual Background

[10] The parties were married in the Ukraine in 2002. They separated six years ago on November 15, 2018.

[11] Vitaliy moved out of the matrimonial home on December 27, 2020 after an alleged incident.

[12] The parties have one child, a son, age 21. He is in community college and is expected to graduate in April 2025. He resides with Olga.

[13] The family immigrated to Canada in 2010. They purchased a condominium in 2014, which remains the MH.

[14] The parties were divorced in the Ukraine.

[15] Olga is employed full-time. In 2023, she earned an income of $61,700.85 as confirmed by her T4.

[16] In November 2023, prior to the trial of this matter, Olga qualified for a mortgage of $168,000. This was not sufficient to purchase Vitaliy’s half-share of the equity in the MH given the mortgage of about $95,000. She has not made an offer to purchase the MH since the Final Akazaki Order, nor is there evidence on record that she has qualified for a mortgage enabling her to purchase the MH.

Issue One: Should Olga should be ordered to vacate the MH home by July 1, 2024 or some other date to give effect to the Final Akazaki Order?

[17] To answer this question, an analysis of what has transpired since the Final Akazaki Order in terms of the listing for sale of the MH must be undertaken.

[18] In accordance with the Final Akazaki Order, Vitaliy listed the MH for sale on December 28, 2023, with a listing price of $449,000, as per the listing agent’s suggestion. Vitaliy engaged Serge Rybitsky as the real estate agent.

[19] The listing price has since been reduced twice. It is currently listed for sale for $425,000.

[20] The first offer to purchase the MH was made on January 19, 2024, for the price of $435,000. Although an Agreement of Purchase and Sale was signed, the buyers withdrew their offer on January 24, 2024.

[21] According to Olga she was told that the MH was sold on January 20, 2023 by the building manager, as opposed to by Vitaliy. Olga apparently responded to this news with surprise and stated that the property was not for sale and she was not moving. On January 30, 2024, Vitaliy’s counsel wrote to the building manager, named Azmeena, who works for Syrena Apartments Limited, to advise her that Olga’s information that the property was not for sale was not accurate. A copy of the Final Akazaki Order was sent to Azmeena to be sure it was clear to her that Vitaliy had sole carriage of the sale of the MH, and that Olga was not permitted to participate in its sale or consent to any terms of its sale.

[22] According to Vitaliy, Olga frustrated the sale process by calling Mr. Rybitsky and demanding that he delist the property; telling the potential purchasers that she refused to move out of the property; and contacting the office of the building management advising that she would not vacate the property. Olga denies that she interfered with this sale.

[23] Text messages between the parties, attached as Exhibits to both parties’ affidavits make it clear that Olga texted Vitaliy and Mr. Rybitsky telling them to take the matrimonial home off the market. I find that these text messages are evidence that Olga refused to accept the terms of the Akazaki Final Order and believed that she did not have to follow its term.

[24] Regardless of what happened, the purchasers did not complete the sale.

[25] On April 9, 2024, a second offer to purchase the MH was made, for the price of $420,000. The offer was conditional on the purchasers obtaining financing. The closing date was May 31, 2024.

[26] On May 1, 2024, Ms. Pribytkova wrote to Syrena Apartments Limited advising them that an offer to purchase the MH was made with a closing date of May 31, 2024 for $420,000. Counsel for Vitaliy reiterated the terms of the Final Akazaki Order and asked the building management office not to delay in approving the purchasers of the property. After this letter was sent, Vitaliy attempted to obtain the Status Certificate for the property. The office of the building management office refused to give Vitaliy the Status Certificate for the property because Olga kept insisting that she would not vacate the property. Without the Status Certificate, the purchasers backed out of the deal.

[27] The property remains listed for sale.

[28] Although the Final Akazaki Order gives Olga the right to make an offer to purchase the MH, she has not been able to do so with the necessary pre-approval of a mortgage.

[29] Vitaliy argues that Olga has demonstrated that she will continue to frustrate the sale of the MH and that she has no respect for court orders. For this reason, he seeks an order that Olga vacate the MH by July 1, 2024 so the home can be properly listed and available for showings, pursuant to s.10(a)(a) of the Family Law Act.

[30] Given that the parties have been divorced, s.24 of the Family Law Act , which deals with exclusive possession is not available in this case, since the definition of “spouse” in the Family Law Act does not include “former spouses.”

[31] Section 10 of the Family Law Act states as follows:

10 (1) A person may apply to the court for the determination of a question between that person and his or her spouse or former spouse as to the ownership or right to possession of particular property, other than a question arising out of an equalization of net family properties under section 5, and the court may, (a) declare the ownership or right to possession; (b) if the property has been disposed of order payment in compensation for the interest of either party; (c) order that the property be partitioned or sold for the purpose of realizing the interests in it; and (d) order that either or both spouses give security, including a charge on property, for the performance of an obligation imposed by the order, and may make ancillary orders or give ancillary directions. R.S.O. 1990, c. F.3, s. 10 (1) .

[32] Pursuant to s.10(1)(a), Vitaliy asks the court to make an order regarding the right to possess the MH and order Olga to vacate the MH by July 1, 2024.

[33] When asked by the Court if she had an alternate date on which she would consent to vacate the matrimonial home, Olga answered that she wishes to delay the sale of the MH until the parties’ son completes his college degree in April of 2025. This issue was squarely before Akazaki, J. when he made his Final Order. He specifically stated in paragraph [36] of his Endorsement, “apart from the fact that her son still lives with her, there was no evidence of any reason for extending the period of occupation under the Family Law Act , ss.23-24.

[34] Further, in paragraph 36 of the Final Akazaki Order he states that Olga has asked for a half year to find alternate accommodation, if the court ordered that it be sold before April 2025. By virtue of Olga’s conduct since the Final Akazaki Order, she has now had a further six months when she has lived in the MH and has that entire time to look for and find alternative accommodation.

[35] I find that Olga has clearly breached the Final Akazaki Order. I make this finding based on the following texts and emails Olga sent to Vitaliy and his counsel, Ms. Pribytkova as follows: a. On January 24, 2024, Olga texted Mr. Rybitsky, the real estate agent: “Good morning Sergiy, please take the apartment off the market.” b. On February 6, 2024, Olga texted Vitaliy stating, “Vitaliy, I texted Rebitsky [sic] to take the apartment off from the market.” c. On February 11, 2024, Olga texted Vitaliy: “Read last endorsement. And tell me how you understand that? If you don’t understand what is going on, then how you are [sic] participating in court processes? Are you continue [sic] to work for your lawyer? Please calculate the money. Take apartment off the market.” In response, Vitaliy wrote: “I have read the endorsement and understand it fairly thoroughly, it states you have to pay cost of my lawyer in addition to the half value of the apartment. Am I wrong in this understanding? Please let me know how you understand it.” Olga responded with two laughing emojis, and stated “Take apartment off the market.” Later that same day she responded “Take apartment off the market. If you have a little common sense!.” d. On April 13, 2024, Vitaliy texted Olga advising her that there was an offer made to purchase the cost for $420,000 and she responded as follows: “Again, I disagree to sell the apartment for which I am paying less then $440000. Tell your agent don’t push you if he will do that he will lost [sic] his license. I’m paying for this apartment. Or $445,000.” e. On April 17, 2024, in response to Vitaliy emailing Olga that the matrimonial home had been sold conditionally with a closing date of May 31, 2024, Olga emailed: “Tell your lawyer prepare application. She said that she will force me out from the home for which I’m paying and her client is depleting my assets….I will not pay your service. If your client has debt tell him to pay you. I told you and your client not to go to court, but you forced him. He can use money from his corporation to cover your service.” Later on April 17, 2024, Olga emailed Ms. Pribytkova, “Tell your client to pay your service from his corporation not to sell house.” f. On April 18, 2024 Ms. Pribytkova wrote to Olga at 9:38 a.m. and stated, “…Kindly vacate the property before May 31, 2024.”. At 10:05 a.m., Olga responded in an email to Ms. Pribytkova, “I will not vacate the property. I’m paying for it. If you want me to vacate the property then I will need your office to live.”

[36] It is clear to me, based on the texts that Olga has no respect for the terms in the Final Akazaki Order. She willfully refuses to cooperate in Vitaliy’s efforts to sell the MH in accordance with the terms of the Final Akazaki Order. Further, she willfully refuses to comply with the costs order and insists that it is Vitaliy’s responsibility to pay the costs, despite the clear terms of the order.

[37] An order is an order, not a suggestion. Non-compliance must have consequences .” : Gordon v. Starr at para 23.

[38] As stated by Justice Quinn in Gordon v Starr, “[o]ne of the reasons that many family proceedings degenerate into an expensive merry-go-round ride is the all-too-common casual approach to compliance with court orders”.

[39] Olga has had since December 7, 2023 to comply with Final Akazaki Order. She has had ample opportunity to find alternate accommodation. In Olga’s affidavit sworn on May 24, 2024, she deposed that she has found new accommodation. However, she did not make this submissions during the motion. Instead, Olga claimed during this motion that she could not find alternate accommodation because she does not yet know how much she will receive from her share of the net proceeds of sale from the MH. However, this statement is disingenuous. The calculation is not difficult to make, since Olga is aware of the mortgage balance since she is paying the mortgage and property taxes. If, for example, the last offer to purchase the matrimonial home had been accepted at $420,000, after the mortgage of $95,000 was discharged, the equity in the property is easily calculable. The Final Akazaki Order is clear that the net proceeds of sale are to be divided in half, subject to the sum of $19,147 being deducted from Olga’s 50% share and added to Vitaliy’s 50% share of the net proceeds of sale .

[40] Since Vitaliy has not paid the child support arrears or equalization payment to Olga as set out in the Final Akazaki Order, these sums can be deducted from Vitaliy’s 50% share of the net proceeds of sale and added to Olga’s 50% share.

[41] Given Olga’s refusal to move out of the matrimonial home and the fact that she has clearly told the building property manager, potential purchasers, Vitaliy and his counsel, that she will not move out of the unit, nor that is she willing to sell the home, I am persuaded that the only way to give effect to the Final Akazaki Order is for Olga to vacate the matrimonial home. She shall do so by August 1, 2024.

Issue Two: What additional sums should be deducted from Olga’s share of the net proceeds of sale from the matrimonial home, such as the outstanding costs order arising from the long motion of $55,000, and/or any outstanding mortgage or property taxes, and/or any sum between the purchase price of the matrimonial home and $420,000.

[42] Olga was ordered to pay Vitaliy costs in the sum of $55,000. She has not satisfied this outstanding order. Accordingly, this sum shall be deducted from Olga’s half share of the net proceeds of sale from the matrimonial home.

[43] Olga advised this court that she has paid the mortgage and property taxes associated with the matrimonial home since the Final Akazaki Order was made and that there are no outstanding amounts. If there are any such outstanding payments, they too shall be calculated and deducted from Olga’s share of the net proceeds of sale.

[44] Vitaliy has asked that the difference between the actual purchase price of the matrimonial home and $420,000 be deducted from Olga’s half share of the proceeds of sale, if the property sells for less than $420,000. Presumably he has asked for this relief because he blames the sale falling through on Olga’s conduct. I am not prepared to make this order.

Costs

[45] Vitaliy has been entirely successful on this motion and, as such, is presumptively entitled to costs of the motion.

[46] Modern family costs rules are designed to foster four fundamental purposes: to indemnify successful litigants for the cost of litigation, to encourage settlements, to discourage and sanction inappropriate behaviour by litigants, and to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867, at para. 10. The touchstone considerations of costs awards are proportionality and reasonableness: Beaver v. Hill, 2018 ONCA 840, at para. 12. The reasonable expectations of the unsuccessful party are a relevant consideration: Delellis v. Delellis, [2005] O.J. No. 4345.

[47] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[48] Pursuant to r. 24 of the FLRs, the successful party is presumptively entitled to costs, subject to the factors set out in r. 24: Beaver, at para. 10. In setting the amount of costs, the court must consider the reasonableness and proportionality the factors listed in r. 24(12) as they relate to the importance and complexity of the issues. These factors include each party’s behaviour, the time spent by each party, any written offers to settle, including those that do not meet the requirements of r. 18, any legal fees and any other expenses, and any other relevant matter.

[49] There is no general approach in family law of “close to full recovery costs”: Beaver, at para. 11. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8), or beating an offer to settle under r. 18(14): Beaver, at para. 13.

[50] Rules 24(5) and 24(8) require that the court consider the reasonableness of each party’s behaviour. The principles of reasonableness and proportionality still prevail in determining the amount of costs, even if the conditions for Rule 18(14) are otherwise satisfied.

[51] Rule 24(4) provides that a successful party who has behaved unreasonably may be deprived of all or part of their costs or ordered to pay all or part of the unsuccessful party's costs.

[52] I have found that Olga has conducted herself in an unreasonable manner. Despite the clear terms of the Final Akazaki Order, Olga has interfered with the sale process of the MH. She has expressly stated in texts and emails that she refuses to vacate the MH and demanded that the MH be taken off the market. Further, she has indicated a willfully refusal to pay the costs ordered by Akazaki, J.

[53] Ability to pay costs can be considered as “any other relevant matter” under subrule 24(11). The financial means of the unsuccessful party is a factor that may rebut the presumption that the successful party is entitled to full recovery for costs: See M. (A.CV.) v. M. (D.), (2003) 18880 (ONCA); Harrington v. Harrington 2009 ONCA 190.

[54] However, ability to pay is relevant on the issue of quantum or scale of costs, but not to another party’s entitlement to costs. A party’s limited finances may not be used to shield liability, particularly where that party has acted unreasonably.

[55] In arriving at an award of costs for this motion, which is fair and reasonable, the court must take into account Olga’s limited resources as one of the relevant factors. But I return to the three primary objectives of costs orders: a. To partially indemnify successful litigants for the cost of litigation; b. To encourage settlement; and c. To discourage and sanction inappropriate behaviour by litigants.

[56] As stated by Pazaratz, J. in Izyuk v. Bilousoc, 2011 ONSC 7476, “ It is counter intuitive to suggest that these objectives are less applicable to litigants of modest (or no) means. To the contrary, those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings. As Glithero J. noted in Balaban v. Balaban, 2007 CarswellOnt 1518, at paragraph 7 : “... when a person's financial position is such that they cannot really afford the cost of litigation, then there is all the more reason to attempt compromise of a meaningful nature.

[57] I have reviewed his Vitaliy’s Bill of Costs, which demonstrates that his full indemnity fees for the motion came to $7,261.38. Vitaliy’s counsel is a 2011 Call to Bar and bills out an hourly rate of $380.00. The fees are reasonable and proportionate to the motions before the Court, particularly, when Vitaliy’s motion is essentially one to enforce the Final Akazaki Order and should not have had to be brought.

[58] I order Olga to pay Vitaliy’s costs of this motion in the fixed sum of $5,800, to be paid out of her 50% share of the net proceeds of sale of the MH and added to Vitaliy’s 50% share of the net proceeds of sale of the MH.

ORDER

[59] This court makes the following order: a. Pursuant to s.10(1)(b) of the Family Law Act, the applicant shall vacate the matrimonial home including removing all of her personal property from the premises by no later than August 1, 2024 at noon. The applicant shall ensure that the matrimonial home is left in a reasonably clean condition. If she does not do so, the respondent shall arrange for the reasonable cleaning of the premises. Any reasonable costs associated with that cleaning are to be deducted from the applicant’s share of the net sale proceeds. In the event of a disagreement, the matter may be returned to be for an assessment of those costs. b. A writ of possession shall issue which shall be enforceable by any peace officer including the Sheriff in the City of Toronto. c. The respondent shall then have possession of the matrimonial home from August 1, 2024 at noon until the matrimonial home is sold to an arm’s length third party. d. Between the date of this Endorsement and August 1, 2024 at noon, the applicant shall fully cooperate with the listing agent by ensuring that the matrimonial home is clean and ready for showings upon 24 hours notice by the real estate agent that a potential purchaser has a showing. If she does not do so, the respondent has leave to bring an urgent motion before the Court on short notice to the applicant requiring her to immediately vacate the matrimonial home within 24 hours. e. The applicant shall pay the respondent’s costs of this motion, fixed in the sum of $5,800 to be paid out of her share of the matrimonial home net proceeds. f. Upon the closing for sale of the matrimonial home, the proceeds of sale shall be dealt with as follows: i. The following expenses shall be paid from the matrimonial home proceeds:

1. Real estate commissions;
2. Amounts required to discharge registered encumbrances;
3. Legal fees and disbursements relating to the sale: and
4. All other sale adjustments. ii. After paying the amounts in (i) above, the remaining proceeds will be divided between the parties as follows:
5. 50% to Olga, a. plus $9,027.79 on account of retroactive child support as per the para. [43]2. of the Final Akazaki Order, b. plus $3,151.39 on account of equalization of net family property as per para. [43]4. of the Final Akazaki Order, c. less $19,147 as a credit as per paragraph [43]5. of the Final Akazaki Order, d. less $55,000 on account of the Akazaki costs order; e. less $5,800 on account of this costs order; and f. less any adjustments for taxes, utilities, municipal fees or levies on account of sums not paid by Olga from the date of the Final Akazaki Order and the date of the closing of sale.
6. 50% to Vitaliy, a. less $9,027.79 on account of retroactive child support as per the para. [43]2. of the Final Akazaki Order, b. less $3,151.39 on account of equalization of net family property as per para. [43]4. of the Final Akazaki order, c. plus $19,147 as a credit as per paragraph [43]5. of the Final Akazaki Order, and d. plus $55,000 on account of the Akazaki costs order; e. plus $5,800 on account of this costs order; and f. plus, any adjustments for taxes, utilities, municipal fees or levies on account of sums not paid by Olga from the date of the Final Akazaki Order and the date of the closing of sale.

Released: June 21, 2024 M. Kraft, J.