Ontario Superior Court of Justice
Court File No.: FS-21-19
Date: 2025/03/06
BETWEEN:
Kimberly Ann Beites, Applicant / Responding Party
– and –
Serafim Beites, Respondent / Moving Party
Appearances:
Susan von Achten, for the Applicant / Responding Party
Sara Rainsberry, for the Respondent / Moving Party
Heard: January 8, 2025, in person and via videoconference
Reasons on Motion
P. J. Boucher, Regional Senior Justice
Introduction
1The respondent moved for an order granting him exclusive possession of real property the parties jointly own in the State of Texas, U.S.A., and for an order restraining the applicant from attending that property. The applicant opposes the motion.
Background
2The parties are married. They separated on May 7, 2021.
3Between them, the parties own three residences: a cottage on Manitoulin Island (the “Spring Bay property”), owned by the respondent; a townhouse in Panama (the “Panama property”), owned by a corporation controlled by the applicant; and 255 Conch Drive, Port Isabel, Texas (the “Texas property”) which they jointly own.
4From separation until August 2024, the applicant resided in the Spring Bay property during the spring and summer. The respondent argues that the applicant left the property in such a state of disrepair that it is uninhabitable. He also submits that she stripped the property of chattels and sold them.
5The respondent further argues that the applicant stayed in the Panama property in the fall and winter since separation. He believes the applicant’s neglect of the property has reduced its value by approximately two-thirds, in addition to selling its chattels. The parties are having difficulties selling the Panama property due to its state of disrepair.
6The respondent has enjoyed the use of the Texas property since separation, to the exclusion of the applicant. On October 29, 2024, counsel for the applicant emailed counsel for the respondent indicating that the applicant would be occupying the Texas property from December 1, 2024, to the second week of March 2025. This motion was brought in response to that email.
Positions of the Parties
7The respondent submits that the applicant has displayed a pattern of neglect regarding the properties in Spring Bay and Panama. In addition, he believes she has sold chattels from these properties and has retained the proceeds. He worries that the same thing will happen to the Texas property and its chattels if she is not restrained from attending it. He further submits that the parties are unaware of the extent of the equalization payment to be made, heightening the need to protect their remaining assets from dissipation.
8The applicant opposes the motion and denies the respondent’s allegations. She submits that the respondent and their children, and not herself, removed chattels from the Spring Bay property and left it in a state of disrepair.
The Law
9Section 5 of the Family Law Act, R.S.O. 1990, c. F.3 provides for the equalization of net family properties between spouses who are divorced or separated with no reasonable prospect of reconciliation. Section 7 of the Family Law Act permits a spouse to apply to the court for a determination of any matter regarding a spouse’s entitlement under section 5.
10Section 12 of the Family Law Act permits orders for the preservation of property. It reads as follows:
12 In an application under section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, 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. [Citation omitted.]
Analysis
11In Taus v. Harry, 2016 ONSC 219, paras. 28, 30-33, Gauthier J. identified principles applicable to preservation orders under s. 12 of the Family Law Act:
The Family Law Act is a debtor-creditor statute and each spouse is free, subject to court order, to deal with his or her property as he or she sees fit. Gray v. Gray, [1990] O.J. No. 2518, 31 R.F.L. (3d) 97 (Ont. Gen. Div).
The purpose of a s. 12 preservation order is to ensure that if an equalization payment is found to be owing there are sufficient assets available to satisfy that payment. Lasch v. Lasch, 64 O.R. (2d) 464 (H.C).
There must be some evidence to establish that an order pursuant to s. 12 of the Family Law Act is necessary for the preservation of the other party’s property in order to protect the moving party’s interest in an equalization payment. In other words, a prima facie case in favour of a preservation order must be made for such relief to be granted.
A party seeking a preservation or restraining (non-dissipation) order is in a stronger position if equalization has been determined and ordered, however interim preservation and restraining (non-dissipation) orders are commonly made in family law matters to protect an equalization payment claimed. Levan v. Levan, [2006] O.J. No. 4599, 32 R.F.L. (6th) 359.
Although such an order must be necessary to protect a party’s claim to an equalization payment and to prevent the claim from being defeated, the very high legal threshold required for the granting of a Mareva injunction is not the applicable standard. Radosavljevic v. Radosavljevic, 57 O.R. (2d) 51 (H.C.).
12For the reasons that follow, I am not satisfied this is an appropriate case for a restraining or preservation order.
13The respondent argues the details of the equalization payment are unknown because the parties have not completed financial disclosure. His evidence is that he believed the applicant had approximately $2,000,000 worth of property at the date of separation. His financial statement filed for this motion, dated February 23, 2022, sets out his estimated net family property at $4,164,990 as of the date of separation. Notably, this figure does not include the value of two businesses. Instead, there is a notation that they are being valued. The only debt in the financial statement relates to contingent income taxes attributable to RRSPs and mutual funds.
14The Texas property is valued at $290,000 in the financial statement. In his affidavit filed for this motion, the respondent included a copy of a document titled, “2020 Notice of Appraised Value”, issued by the Cameron Appraisal District in San Benito, Texas. It appears on its face to be the equivalent to an MPAC property assessment in Ontario. It sets the Texas property’s appraised value for tax purposes at $227,476 USD.
15Normally, the party that moves for a preservation order is the one that expects an equalization payment to be coming back to them. Thus, where there is a fear that the potential payor respondent is dissipating assets and will be unable to make the payment, a preservation order can be used to protect the future payment.
16Here, on the respondent’s own incomplete evidence, an equalization payment appears to be heading to the applicant. The respondent’s argument is that the Texas property must be preserved for any future payment. But the value of the Texas property is insignificant compared to the respondent’s estimated net family property, without considering the two business interests. I am not satisfied, on this record, that a preservation or non-dissipation order is required regarding the Texas property to preserve an equalization payment. The parties appear to have plenty of other property to satisfy this payment.
17In the end, the respondent’s motion appears to be an attempt to obtain exclusive possession of the Texas property so that he can continue to enjoy its use during the fall and winter, rather than to preserve its value for a future equalization payment.
18That leads to a further reason why I would not grant the relief sought by the respondent.
19The parties did not provide the court with any authorities regarding the court’s jurisdiction to make orders regarding foreign-owned immovables, particularly the use of s. 12 of the Family Law Act in this context. Further, no authority was submitted to suggest s. 12 of the Family Law Act permits orders for exclusive possession of real property, regardless of its location.
20The court invited submissions from the parties regarding two Ontario cases which address foreign-owned real property. Webster v. Webster, a family law case, followed Duke v. Andler, [1932] S.C.R. 734, and held, at pp. 738-740, that while Ontario courts have no in rem jurisdiction over foreign-owned property, they may exercise in personam jurisdiction over the parties in the proceeding, provided certain prerequisites are met.
21Two years after the Webster decision, the Court of Appeal for Ontario followed Duke and confirmed that Canadian courts “will exercise this exceptional in personam jurisdiction only if four criteria are met” (emphasis added): Catania v. Giannattasio, para. 12. The criteria are set out in Catania, at para. 12, as follows:
(1) The court must have in personam jurisdiction over the defendant. The plaintiff must accordingly be able to serve the defendant with originating process, or the defendant must submit to the jurisdiction of the court.
(2) There must be some personal obligation running between the parties. The jurisdiction cannot be exercised against strangers to the obligation unless they have become personally affected by it…An equity between the parties may arise in various contexts. In all cases, however, the relationship between the parties must be such that the defendant’s conscience would be affected if he insisted on his strict legal rights…
(3) The jurisdiction cannot be exercised if the local court cannot supervise the execution of the judgment…
(4) Finally, the court will not exercise jurisdiction if the order would be of no effect in the situs…. The mere fact, however, that the lex situs would not recognize the personal obligation upon which jurisdiction is based will not be a bar to the granting of the order.
22In this case, the respondent argues the criteria are satisfied. He submits that this court, rather than the Texas court, can supervise an order made under s. 12 as against the applicant, such as through contempt proceedings. Further, he argues that it does not matter whether Texas would recognize this court’s order because this court is able to deal with family property issues between the parties.
23In the correct circumstances, such as to preserve a possible equalization payment, s. 12 of the Family Law Act may indeed be used to enjoin a party from dissipating an asset in a foreign jurisdiction. Those circumstances do not exist here.
24One of this court’s duties in this proceeding is to determine, if the parties cannot agree, the equalization of their net family properties. That necessarily includes determining the ownership interests in and value of all their property, foreign and domestic. However, I am not persuaded, in these circumstances, that it should extend to an order for exclusive possession of the Texas property.
25The record for this motion is very brief, possibly because it was brought in haste after the applicant’s one month notice regarding her intention to occupy the Texas property this winter. Other than the appraisal from the Cameron Appraisal District, no corroborating evidence was filed to establish legal ownership of the Texas property. Nor was any evidence filed regarding the possible enforcement by Texas authorities of an Ontario order for exclusive possession.
26Accordingly, if the order was made, and the applicant attended at the Texas property, it is unknown whether authorities in Texas would enforce this court’s order. That would leave contempt proceedings here as the only remedy to remove the applicant from the property. This leads to further unanswered questions. How would the court compel the applicant’s attendance here for the contempt hearing, if she is residing in Texas? Further, would officials in Texas enforce an ex parte contempt order made in Ontario?
27I therefore decline to exercise the exceptional in personam jurisdiction that an exclusive possession/restraining order would require.
Conclusion
28For these reasons, the respondent’s motion is dismissed.
29If the parties cannot agree on costs, the applicant may file written submissions on costs of no more than two pages, double-spaced, not including any offers to settle and bills of costs within 15 days of the date of this decision. The respondent may file written submissions of no more than two pages, double-spaced, not including any offers to settle and bills of costs within 30 days of the date of this decision. Late submissions will not be considered.
Regional Senior Justice P. J. Boucher
Date: March 6, 2025