December 27, 2023 – Business Losses and Income

“The courts have shown a marked reluctance to allow employees to deduct business losses from employment income for child support purposes and have frequently refused to deduct the loss from their income (see Proulx v. Proulx 2009 CanLII 19938 (ON SC); Burrell v. Robinson, (2009), 2009 CanLII 33027 (ON SC), 78 R.F.L. (6th) 351 (Ont. Sup. Ct.); Luke v. Richards, 2018 ONSC 1695; Hargrove v. Holliday, 2010 ABQB 70; Thomas v. Thomas, 2019 NLCA 32). This is because it would be unreasonable to ask the other parent to assist in financing a business venture by accepting a lesser amount of child support (Boak v. Boak, 1999 CarswellBC 2876 (B.C.S.C.))

In Burrell, Justice Eberhard disallowed rental loses that the payor had deducted against his employment as a pilot. In paragraph 5, Justice Eberhard wrote:

The respondent father also argued that it would be unfair to disentitle his reliance on these losses since the income he may someday derive from these rental properties will certainly be required to be included. At such time as there may be such income, the cost of earning same may well become relevant but at the moment the rental properties are merely an investment into which he has decided to put his available resources. Once support is determined this court does not dictate how individuals spend their resources. The increase in equity is testament to the good sense of the Respondent Father’s choice. That does not relieve him of the obligation to pay support in accordance with the income available to him.

Justice Eberhard’s reasoning seems to be that, since the payor’s assets will ultimately be enhanced, the deductions against his employment income should not be allowed.

In Richards, Justice Timms concluded that legitimate hard costs – such as mortgage interest, insurance, utilities, and municipal taxes – are acceptable deductions against employment income for the purposes of determining a payor’s income for child support purposes.”

Mastrangelo v. Di Cristofaro, 2019 ONSC 7264 (CanLII) at 98-101

December 22, 2023 – Changing the Status Quo: Part 2 of 2

“Generally, any disposition concerning the parenting of a child must be in accordance with the child’s best interests as defined in s. 16 of the Divorce Act.  The provisions in s. 16 which are raised in this motion is the relative ability of the parties to meet the child’s needs, especially for stability (s. 16(1)(a)), the views and preferences of the children (s. 16(1)(e)) and the issue of family violence as raised by the Applicant (s. 16(1)(j)).

However, in the case of the request by the Applicant to change an existing status quo and order in an interim motion, more is necessary.  In addition, the Applicant must meet the high threshold necessary to make an interim change to an existing status quo.  In the present case, the Applicant relies upon the s. 112 report completed by Ms. Vaillencourt for the Office of the Children’s Lawyer.

The law concerning changes in a status quo can be summed up as follows:

a.  The courts have traditionally taken a dim view of any change in a parenting status quo on a temporary motion.  That is because such a motion is brought on unreliable and conflicting affidavit evidence where credibility of parties cannot be determined.  As well, if the status quo does change on an interim motion, there is, of course the risk that the change will be undone at trial, resulting in the children moving twice rather than once, creating instability.

b.  Because of this, the court requires compelling reasons to depart from the status quo prior to the hearing of the motion.  Alternatively, the test has been set out as requiring “exceptional circumstances where immediate action is mandated”:  see Grant v. Turgeon, 2000 CanLII 22565 (ON SC), [2000] O.J. No. 970 (S.C.J.) at para. 17.  Other cases have suggested that there must be some danger to the child remaining in the present status quo:  see Miranda v. Miranda, 2013 ONSC 4704 and Elliott v. Filipova, 2019 ONSC 4506.

c.  In addition, if a party is seeking to change the terms of an existing court order, temporary or otherwise, there must be a change in circumstances prior to making the order:  see the Divorce Act, s. 17(5)and Lonsdale v. Smart, 2018 ONSC 3991 at para. 9.

d.  If a party wishes to rely upon the recommendations in an assessment report or s. 112 investigation in changing the status quo, the court must exercise caution in doing so.  The traditional viewpoint is that an assessment report or an investigation as in the present case is only one piece of evidence to be used at trial and should not be acted upon until the court can assess the weight to give to the report through cross-examination and trial:  see Genovesi v. Genovesi, 1992 CanLII 8562 (ON SC), [1992] O.J. No. 1261 (Gen. Div.), Grant v. Turgeon, supraand JLM v. PDAB, 2012 ONSC 4696 at para. 15-16.

e.  There is authority, however, that the evidencecontained in an assessment report (as opposed to the expert’s recommendations) may be relied upon if it is sufficiently compelling to warrant a change in a status quo or previous order: see Bos v. Bos, [2012] ONSC 3425 and Krasaev v. Krasaev, 2016 ONSC 5951.  In fact, in Krasaev, Douglas J. distinguished between the evidence in the report and the recommendations when he says [at para. 38]: “I note that the caution that applies with respect to the weight to be given to assessment reports at the interim stage of proceedings applies primarily to the conclusions and recommendations of the assessor, rather than the evidence and observations set out in the report.”

In reviewing the weight to be given to that evidence, Bos v. Bossupra offers some guidance.  Mitrow J. suggested that Genovesi should not prevent the court from reviewing evidence contained in an investigative report, stating [at para. 23] that

…although the general principle enunciated in Genovesi continues to be well founded, it is not so rigid and inflexible as to prevent a court on a motion to give some consideration to the content of an assessment report where that assessment report provides some additional probative evidence to assist the court, particularly where the court is making an order which is not a substantive departure from an existing order or status quo.”

            Miller v. Miller, 2022 ONSC 7237 (CanLII) at 23-26

December 21, 2023 – Changing The Status Quo: Part 1 of 2

“The status-quo, and avoiding reckless creation of a new status-quo, are important considerations at the interim stage: Cosentino v. Cosentino, 2016 ONSC 5621 (CanLII) at paras. 16 and 17.

It is a long-standing legal principle that absent evidence of material change and that an immediate change is required, the status-quo is ordinarily to be maintained until trial: Niel v. Niel, 1976 CanLII 1925 (ON CA), 28 R.F.L. 257 (Ont. C.A.), Grant v. Turgeon, 2000 CanLII 22565 (ON SC), 5 R.F.L. (5th) 326 (Ont. S.C.J.); Kimpton v. Kimpton, 2002 CarswellOnt 5030 (Ont. S.C.J.).

In making an interim order, a court should generally maintain the status-quo in the absence of important reasons suggesting that change is necessary in the child’s best interests: McEachern v. McEachern (1994) 1994 CanLII 7379 (ON SC), 5 RFL (4th) 115.

To disturb the status-quo, there must be compelling evidence to show the welfare of the child would be in danger in maintaining the status quo, namely the evidence must clearly and unequivocally establish that the status-quo is not in the child’s best interests: Miranda v. Miranda, 2013 ONSC 4704 (CanLII), para. 26.

The rationale for this principle lies in the fact that there is a concern for fairness to the parties and a concern for the best interests of the child.  Generally, it is not in the best interests of a child to change the residential arrangements if there is a possibility of yet another change because of a pending trial: Copeland v. Perreault 2007 ONCJ 217 (CanLII), [2007] O.J. No.1889 (O.C.J.) at para. 49.

It is generally not in the best interests of a child to disturb a status-quo on a temporary basis pending trial without compelling reasons. Those compelling reasons usually include an assessment report from a private assessor or the Office of the Children’s Lawyer recommending an immediate change in residence; an indication that the children are doing poorly under a particular regime; serious mental health issues in connection with one of the parents; and drug or alcohol addiction on the part of one of the parents. As well, it must be demonstrable that one or more children are doing very poorly as a result of the parenting regime: Shotton v. Switzer, 2014 ONSC 843 (CanLII).

Children should not be needlessly disrupted by a parent unilaterally creating a new status-quo through manipulation or deliberate acts:  Izyuk v. Bilousov 2011 ONSC 6451 (SCJ); Nyari v. Velasco 2008 ONCJ 272 (OCJ).”

            Sayeau v. Buttle, 2022 ONSC 7246 (CanLII) at 14-20

December 20, 2023 – Surreptitious Recordings

“Several Ontario cases speak to surreptitious recordings by parents in family law proceedings creating opportunities for further conflict and mistrust. They cite strong policy arguments against admitting surreptitious recordings into evidence. They have been fully set out by Kurz J. in Van Ruyvern v. Van Ruyven, 2021 ONSC 5963, 62 RFL (8th) 451, at paras. 30 to 43. In this case, the parties will have years to co-parent L together and do not need ammunition to fuel further distrust. As stated aptly by Kurz J. at para. 40 in Van Ruyvern,

…routinely allowing our courts to reward a party’s attempt to secretly spy on the other by admitting the fruits of that conduct into evidence contributes to the corrosiveness of matrimonial litigation. That approach must be discouraged.”

Dworakowski v. Dworakowski, 2022 ONSC 7209 (CanLII) at 36

December 19, 2023 – LMP: Still the Leading Case on Material Change

L.M.P. v. L.S., 2011 SCC 64 (CanLII), [2011] 3 SCR 775 remains the leading authority for the correct approach to determine whether there has been a change in circumstances which warrants a review of a spousal support order under section 17(1) the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.), (“the Act “). The long established definition of a change in circumstances refers to a “material” change that “if known at the time would likely have resulted in different terms.”   This definition, first found in Willick v. Willick, 1994 CanLII 28 (SCC), [1994] 3 S.C.R. 670, a child support variation, was adopted for variations of spousal support in G. (L.) v, B. (G), 1995 CanLII 65 (SCC), [1995] 3 S.C.R. 370. (See L.M.P. at para. 30).

The two sets of reasons in L.M.P., which concur in the result, diverge on the question of how the principles enunciated in Miglin v. Miglin, 2003 SCC 24 (CanLII), [2003] 1 S.C.R. 303 factor into the analysis. The approach in the majority opinion hones in on the differences between the legislative provisions applicable to initial applications for support, such as in Miglin, and those at play in the variation context. The majority conclude that the Miglin analysis, conducted under section 15(2) of the Act should not be imported into the analysis for variations under section 17. (See L.M.P. at paras. 22 to 28).

A section 17 variation inquiry begins with the presumption that the existing order’s terms complied with the objectives of the Act when it was made. (See L.M.P. at para. 33).  This means the initial focus is on the nature and sufficiency of the change to determine whether the threshold test for a variation consideration has been satisfied by the moving party. The change must be enduring. (See L.M.P. at para. 35) If the moving party discharges this threshold onus, then the context and magnitude of the change will shape the scope of the inquiry, as well as the remedy. In this sense, L.M.P. guides us away from a rigid approach, which describes the hearing as either de novo or not, towards a more fluid approach regarding the proper scope of the hearing, driven by the unique facts of each case.  (See L.M.P. at para. 47).

Kim argues that the principles in Hickey v. Prince, 2015 ONSC 5596 (Div. Ct.)  apply to bar this review on the basis that early retirement is not material change in circumstances. In Hickey, the Divisional Court allowed an appeal where the motion judge erred in finding that the husband’s voluntary early retirement on a full pension constituted a material change in his income. The court held that the motion judge failed to consider the husband’s income earning capacity and his overall wealth in determining whether there was a material change in his condition, means, and other circumstances. The court concluded he was in good health and had the ability to continue to earn more than enough for the continuation of the wife’s existing support. In short, the Divisional Court concluded there was no material change in income earning capacity. The facts here are different as they relate to the threshold question.

As noted by the court in L.M.P., a parties’ agreement is not ignored under section 15(2) or section 17 but its treatment will be different because of the different purposes for each provision. (See L.M.P. at para. 27). Here the parties’ Minutes of Settlement were incorporated into a final order, subjecting their terms to the narrower scope of review under section 17.  Paragraph 3 of the final consent order reads as follows: “The spousal support payable by the Respondent is subject to review in the event of a material change in circumstance, and a material change in circumstance may [emphasis added] include but not be limited to the retirement of the husband.”

The plain meaning of this provision is that the parties contemplated that Rick’s retirement might entitle him to trigger a review of the support obligation. Notably there is no reference to Kim’s retirement even though she was working full-time when the Minutes were formulated. It matters that the order has language which specifically contemplates Rick’s retirement. Given that there is no stipulated age of retirement in this provision and that Rick has, in fact, retired and is moving permanently to Mexico, I find that his circumstances have changed in a material way within the meaning of section 17.  His new place of residence alone constitutes a material change in circumstances since he is moving to a jurisdiction which has no reciprocal support enforcement mechanism with Canada. This effectively deprives Kim of the benefit of an operative term in their current order, namely the ability to enforce it through the Family Responsibility Office.

That said, an affirmative answer to the question of whether the moving party has met the threshold test does not necessarily translate into an increase, decrease, suspension or termination of the obligation. It merely opens the door to further inquiry and a consideration of what order is required now, having regard to the objectives of section 17(7) of the Act.”

Lepoidevin v. Lepoidevin, 2019 ONSC 7434 (CanLII) at 4-10

December 18, 2023 – The Duty of Honest Performance

“The duty of honest performance in contract, formulated in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, applies to all contracts and requires that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract. In determining whether dishonesty is connected to a given contract, the relevant question is whether a right under that contract was exercised, or an obligation under that contract was performed, dishonestly. While the duty of honest performance is not to be equated with a positive obligation of disclosure, in circumstances where a contracting party lies to or knowingly misleads another, a lack of a positive obligation of disclosure does not preclude an obligation to correct a false impression created through that party’s own actions.

The organizing principle of good faith recognized in Bhasin is not a free‑standing rule, but instead manifests itself through existing good faith doctrines. While the duty of honest performance and the duty to exercise discretionary powers in good faith are distinct, like each of the different manifestations of the organizing principle, they should not be thought of as disconnected from one another. The duty of honest performance shares a common methodology with the duty to exercise contractual discretionary powers in good faith by fixing on the wrongful exercise of a contractual prerogative. Each of the specific legal doctrines derived from the organizing principle rest on a requirement of justice that a contracting party have appropriate regard to the legitimate contractual interests of their counterparty. They need not subvert their own interests to those of the counterparty by acting as a fiduciary or in a selfless manner. This requirement of justice reflects the notion that the bargain, the rights and obligations agreed to, is the first source of fairness between parties to a contract. Those rights and obligations must be exercised and performed honestly and reasonably and not capriciously or arbitrarily where recognized by law.

The duty of honesty as contractual doctrine has a limiting function on the exercise of an otherwise complete and clear right since the duty, irrespective of the intention of the parties, applies to the performance of all contracts, and by extension, to all contractual obligations and rights. Instead of constraining the decision to terminate in and of itself, the duty of honest performance attracts damages where the manner in which the right was exercised was dishonest. This focus on the manner in which the termination right was exercised should not be confused with whether the right could be exercised. No contractual right, including a termination right, can be exercised dishonestly and, as such, contrary to the requirements of good faith.

The requirements of honesty in performance can go further than prohibiting outright lies. Whether or not a party has knowingly misled its counterparty is a highly fact‑specific determination, and can include lies, half‑truths, omissions, and even silence, depending on the circumstances. One can mislead through action, by saying something directly to its counterparty, or through inaction, by failing to correct a misapprehension caused by one’s own misleading conduct.

The duty of honest performance is a contract law doctrine, not a tort and therefore a nexus with the contractual relationship is required. A breach must be directly linked to the performance of the contract. The framework for abuse of rights in Quebec is useful to illustrate the required direct link between dishonesty and performance from Bhasin. Authorities from Quebec serve as persuasive authority and comparison between the common law and civil law as they evolve in Canada is a particularly useful and familiar exercise for the Court. Like in the Quebec civil law, no contractual right may be exercised dishonestly and therefore contrary to the requirements of good faith. The direct link exists when the party performs their obligation or exercises their right under the contract dishonestly. While the duty of honest performance has similarities with civil fraud and estoppel, it is not subsumed by them. Unlike estoppel and civil fraud, the duty of honest performance does not require a defendant to intend that the plaintiff rely on their representation or false statement.

The duty of honest performance attracts damages according to the ordinary contractual measure. The ordinary approach is to award contractual damages corresponding to the expectation interest. That is, damages should put the injured party in the position that it would have been in had the duty been performed. Although reliance damages, which are the ordinary measure of damages in tort, and expectation damages will be the same in many if not most cases, they are conceptually distinct, and there is no basis to hold that a breach of the duty of honest performance should in general be compensated by way of reliance damages.”

            C.M. Callow Inc. v. Zollinger, 2020 SCC 45 (CanLII) (headnote)

December 15, 2023 – Islamic Divorce

“The question on this appeal is whether Canadian law recognizes an Islamic talaq divorce (a “bare talaq divorce”), performed in Ontario and subsequently registered with Egyptian governmental agencies.

A bare talaq divorce arises from the husband’s unilateral and exclusive right to dissolve the marriage through a “private recital of verbal formula”: Chaudhary v. Chaudhary, [1984] 3 All E.R. 1017 (C.A.), at p. 1031; Amin v. Canada (Minister of Citizenship and Immigration), 2008 FC 168, [2008] 4 F.C.R. 531, at para. 20; Abdulla v. Al-Kayem, 2021 ONSC 3562, at para. 20; Al Sabki v. Al Jajeh, 2019 ONSC 6394, 148 O.R. (3d) 741, at para. 23. Courts have declined to recognize bare talaq divorces as effective; without some form of adjudicative or official oversight, they are regarded as “manifestly contrary to public policy”: Chaudhary, at p. 1032; Amin, at para. 20; Abdulla, at para. 21.

It is not controversial that bare talaq divorces, without more, have not been recognized as valid in Canada. While a bare talaq divorce that is performed in accordance with customary requirements is sufficient to establish the validity of the divorce under Islamic religious law, it does not comprehend the civil law component of adjudicative or official oversight “to address important public policy issues which can arise out of the domestic recognition of informal or religiously-based divorces”: Amin, at para. 20; Canada v. Hazimeh, 2009 FC 380, 344 F.T.R. 160, at para. 8; Butt v. Canada (Citizenship and Immigration), 2010 CanLII 78765 (CA IRB), at paras. 24-25. Those public policy issues include the potential for abuse and lack of natural justice (including lack of notice) because of the unilateral nature of a bare talaq divorce that, as confirmed by the expert evidence in this case, is effective under Islamic law upon the husband’s third pronouncement of his intent to divorce. Despite its effect on the wife’s status and her rights to corollary relief, the wife has no participatory role and cannot stop the divorce from coming into effect.

Here, respectfully, the motion judge erred. Foreign law is a fact to be proved by expert evidence. While a foreign divorce decree granted by a competent authority is presumptively valid, the onus of proving that a foreign divorce is a foreign divorce decree granted by a competent authority is on the party seeking to rely upon it (here, the respondent): Abdulla, at para. 22. There was no expert evidence that the Egyptian governmental authorities, which authenticated the bare talaq divorce by registration, were divorce-granting authorities or that the registered bare talaq divorce was a foreign divorce decree granted by a competent authority that, under common law, was presumptively valid. Moreover, as with the Egyptian governmental registration of the bare talaq divorce, the Ontario governmental issuance of a marriage licence, following the Declaration of Divorce, did not serve to recognize the registered bare talaq divorce as a valid foreign divorce that had been granted by a divorce-granting authority, for the purposes of s. 22 of the Divorce Act.

For any part of s. 22 of the Divorce Act to be engaged and a foreign divorce recognized under Canadian law, the divorce must be granted and not only administratively registered or recognized by a competent authority. Here, there was no evidence that a competent authority granted the divorce, as required under s. 22 of the Act.”

            Abraham v. Gallo, 2022 ONCA 874 (CanLII) at 1-2, 20-23

December 14, 2023 – Habitual Residence: Balev and Ludwig

“The purpose of the Hague Convention is to secure the prompt return of a child wrongfully removed or wrongfully retained. Article 1 provides:

The objects of the present Convention are –

      1. a)   to secure the prompt return of children wrongfully removed to or retained in any Contracting State; and

b) to ensure that rights of custody and of access under the law of one Contracting State are effectively respected in the other Contracting States.

Wrongful removal or retention

Not every removal or retention is wrongful. As per art. 3 of the Hague Convention, the removal or the retention of a child from her habitual residence is wrongful when:

a)  it is in breach of rights of custody attributed to a person … under the law of the State in which the child was habitually resident immediately before the removal or retention; and

b)  at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention.

A removal or retention is wrongful if the child was habitually resident in the country immediately before the alleged wrongful removal or retention. Therefore, habitual residence is central to the Hague Convention because it defines when a removal or retention is wrongful: see Ludwig, at para. 22.

Habitual residence

The approach to habitual residence was changed in 2018 when the Supreme Court of Canada issued its decision in Office of the Children’s Lawyer v. Balev, 2018 SCC 16, [2018] S.C.R. 398. The parental intention model previously used was replaced with a hybrid model. The hybrid model considers parental intention, but also the circumstances of the child.

This court’s decision in Ludwig, incorporating the changes from Balev, outlined a two-step process to determine habitual residence. At the first stage, the court is to determine the date of the alleged wrongful removal or retention. At the second stage, the court is to look to all the circumstances, including parental intention and the circumstances of the child, to determine the “focal point of the child’s life”, having regard to the child’s links to both countries and the circumstances of the move from one country to the other. The application judge’s conclusion is entitled to deference.”

            Parmar v. Flora, 2022 ONCA 869 (CanLII) at 20-24

December 13, 2023 – Wrongful Removal Justifies Accelerated Schedule

“Ms. Kelly’s submissions rely heavily on a view that the children are unaccustomed to spending time with their father, and that any contact should start modestly and be expanded slowly.

I place no weight on this submission.

In the same manner that a wrongful removal or withholding of a child does not alter the child’s habitual residence pursuant to section 22(3) of the Children’s Law Reform Act; a wrongful removal or withholding does not alter a child’s best interests as set out in section 24 of the CLRA. 

In determining the best interests of a child, the court shall consider all factors related to the circumstances of the child, and, in doing so, shall give primary consideration to the child’s physical, emotional and psychological safety, security and well-being, see section 24(2.) The factors to be considered are set out in section 24(3) CLRA:

a)  the child’s needs, given the child’s age and stage of development, such as the child’s need for stability;

b)  the nature and strength of the child’s relationship with each parent, each of the child’s siblings and grandparents and any other person who plays an important role in the child’s life;

c)  each parent’s willingness to support the development and maintenance of the child’s relationship with the other parent;

d)  the history of care of the child;

e)  the child’s views and preferences, giving due weight to the child’s age and maturity, unless they cannot be ascertained;

f)   the child’s cultural, linguistic, religious and spiritual upbringing and heritage, including Indigenous upbringing and heritage;

g)  any plans for the child’s care;

h)  the ability and willingness of each person in respect of whom the order would apply to care for and meet the needs of the child;

i)  the ability and willingness of each person in respect of whom the order would apply to communicate and co-operate, in particular with one another, on matters affecting the child;

j)   any family violence and its impact on, among other things,

k)  the ability and willingness of any person who engaged in the family violence to care for and meet the needs of the child, and

l)   the appropriateness of making an order that would require persons in respect of whom the order would apply to co-operate on issues affecting the child; and

m) any civil or criminal proceeding, order, condition, or measure that is relevant to the safety, security, and well-being of the child. 2020, c. 25, Sched. 1, s. 6.

In the absence of family violence, or other just reason, the removal or withholding of children from the left-behind parent speaks to the need for an accelerated return to a normative parenting schedule, not a delayed return.  The parenting deficits created by the removal of a supportive, previously stable relationship must be ameliorated, not extended.”

            Bansal v. Kelly, 2022 ONSC 7049 (CanLII) at 17-21

December 12, 2023 – Court Order Made in Face of Mediation-Arbitration Agreement

“Ms. Nugent brings an urgent motion on an ex parte basis seeking a temporary without prejudice Order that Mr. Nugent be restrained from depleting his assets and that he preserve his assets.

Ms. Nugent deposes that she learned on Thursday December 8, 2022 that Mr. Nugent had recently taken steps to withdraw $1.25 million dollars from a specific account, which, by agreement, were not to be distributed without her consent. After separation, Mr. Nugent had agreed to put a dual signature requirement on the account, which she says Mr. Nugent has now unilaterally changed without notice to her and without her consent.

Ms. Nugent deposes that she has learned that Mr. Nugent has used the funds in question to pay off two lines of credit, as well as his Mastercard. Her information is that he has also put some of those funds in a term deposit.  Ms. Nugent points out that these transactions were not reflected in Mr. Nugent’s updated financial statement sworn December 5, 2022, for the Med-Arb process.

Ms. Nugent deposes that she is worried that Mr. Nugent will take steps to compromise her family law entitlements. She has not served him with this motion for fear that he will deplete further assets pending the hearing of a motion on notice.

On August 3, 2022, a Court Order was made which confirmed that all issues in the parties’ litigation would be submitted to Mediation-Arbitration with Gerald Sadvari. They entered into a Mediation-Arbitration Agreement on September 28 and 30, 2022. Under that Agreement, all issues in the proceeding are to be mediated, and if necessary, arbitrated.

The Mediation-Arbitration Agreement is entered into under the Family Law Act and the Arbitration Act. The Family Law Rules also apply.

Under section 6 of the Arbitration Act, the court retains jurisdiction to intervene in the conduct of an Arbitration to “assist in conducting” an arbitration, to ensure that arbitrations are conducted in accordance with arbitration agreements, and to prevent unfair or unequal treatment of parties to arbitration agreements.

Under section 8 of the Arbitration Act, the court specifically retains the power to intervene with respect to the preservation of property. That section reads: “The court’s powers with respect to the detention, preservation, and inspection of property, interim injunctions and the appointment of receivers are the same in arbitrations as ion court actions.”

I have considered whether this motion should have been brought before Mr. Sadvari, on notice or otherwise. While the motion could likely be brought ex parte, given the applicability of the Family Law Rules to the any Arbitration under that Agreement, practically speaking that is not helpful. Any Arbitration Award made by Mr. Sadvari would be unlikely to be enforced by financial institutions without having been taken out as a Court Order. Meanwhile, time would pass during which further dissipation could transpire, if that is indeed happening.

In all of the circumstances, the Order sought by Ms. Nugent is, on a temporary and without prejudice basis, appropriate in the circumstances.”

            Nugent v. Nugent, 2022 ONSC 7370 (CanLII) at 1-10