In Kelava v. Kelava, 2021 ONCA 345, the Ontario Court of Appeal dealt with a motion by a Husband to “stay” portions of an Order that directed a matrimonial home to be listed for sale. The case provides helpful instruction to family litigants seeking to appeal arbitration decisions.

The parties in this case were married in 2000 and had two children together. In 2006, the parties bought a matrimonial home in Oakville to which the Wife contributed $120,000.00 of her savings as part of the down payment. She was also jointly listed on the mortgage.

For most of the marriage, the Husband and Wife both believed that the matrimonial home was jointly owned. Around 2015, the parties separated. The Wife moved to Indianapolis with the children but started an application in family court in Ontario. At that time, both the Husband and Wife listed the matrimonial home as jointly owned in their Financial Statements. The parties then attempted to resolve their separation through arbitration.

Around May 2019, when the matrimonial home was refinanced, the Husband learned that he was the sole owner of title to the property. Upon discovering this, the Husband changed his position right before the arbitration process and claimed that he was the sole owner of the matrimonial home and that any post-separation increase in the value of the property was his alone. That is, the Wife’s entitlement to a share of the property should be restricted to the home’s value in 2015, as opposed to its current and much higher value.

Siding with the Husband, the arbitrator decided that the matrimonial home should be treated solely as the Husband’s asset for equalization purposes. The arbitrator also ordered that the Wife was to return the children to Toronto. Both parties appealed.

At the initial appeal at the Superior Court of Justice, the Hon. Justice Kurz overturned the arbitrator’s decisions regarding the matrimonial home. He ordered that the matrimonial home should be treated as jointly owned for equalization purposes and that it should be listed for sale by March 1, 2021. As it related to the return of the Children, Justice Kurz maintained the arbitrator’s decision that the children should be returned to Ontario.

ONCA

Dissatisfied with Justice Kurz’s decision, the Husband appealed to the Ontario Court of Appeal.

Notably, this “second appeal” required leave (or permission) of the Court. The Husband had no statutory right to appeal to the Court of Appeal under the Arbitration Act (1991, S.O. 1991, c. 17, ss. 45(2), (3) and (6)) as appeals of arbitrations are to go to the Superior Court. Because the Husband wanted to appeal the Superior Court’s decision, this “second appeal” to the Ontario Court of Appeal was not automatic and required permission (Arbitration Act, 1991, s. 49).

Before the leave to appeal motion could be heard, the Husband brought a motion to stay Justice Kurz’s Order – notably the provision requiring that the matrimonial home to be listed for sale. A “stay” is like pausing an order while it is being appealed. Under rule 63.01, most orders are automatically stayed or paused when you deliver a Notice of Appeal. But where the right to appeal is not automatic and you need leave, under rule 63.02(1) of the Rules of Civil Procedure R.R.O. 1990, Reg. 194, you can bring a motion to obtain a “stay” of an Order. This is because if you do not obtain a stay, the Order you are appealing could be enforced, thus undermining the very purpose of your appeal.

Here, the Husband must have realized that if he did not pause Justice Kurz’s Order, by the time the appeal was heard, his house would already be sold making his appeal a useless exercise. Thus, he brought the motion to stay Justice Kurz’s Order.

At the Husband’s motion, the Wife argued against pausing the Order for the sale of the home because she needed her equalization payment to buy a home for herself and the children. Both of her children had special needs. She also needed a home because she had complied with the arbitrator’s Orders and returned to the jurisdiction where she and the children no longer had a home.

The test to obtain a stay of a judgment is the 3-part test for an interlocutory injunction as set out in the case RJR – MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311:

1. a serious question to be determined on the motion for leave to appeal (low threshold whereby courts must determine whether the issues are neither frivolous nor vexatious);
2. the moving party will suffer irreparable harm if the stay is denied (which cannot be quantified with a monetary award); and
3. the balance of convenience favours granting the stay (who would suffer greater harm from granting or refusing the stay, pending a decision on the merits).

In such motions, the Court decides whether the interests of justice call for a stay, and who the balance of convenience favours.

Here, the Court of Appeal sided with the Wife. The Husband failed to satisfy the last two parts of the test: irreparable harm and balance of convenience. It was obvious that the Wife would suffer greater harm if the sale was paused. The Husband would be merely inconvenienced, but the Wife needed access to the equity in the matrimonial home to buy a place for her and the children.

The Court of Appeal was also unconvinced that the Husband would be able to afford the equalization payment without selling the home. As it was, the Wife was living in a strained housing situation because she had yet to receive her equalization payment. The situation obviously could not continue.

Lessons

This case provides an excellent example of strategies and likely hurdles litigants are to face when appealing arbitration decisions to the Ontario Court of Appeal. Firstly, as the appealing party, you need to be mindful of the requirement for leave (permission). That means you do not automatically get to take your appeal to the Ontario Court of Appeal. But secondly, and more importantly, you need to know that if you require leave, the Orders made at the Superior Court also do not automatically stay (get paused). Things continue to happen that could make your appeal useless unless you bring a motion and can convince a court to grant you a stay. This is especially a problem if things happen prior to your motion for leave to appeal – as was the case here.

Ultimately, at these motions to stay, the Court will look at the circumstances of the litigants to see who the balance of convenience favours, or stated otherwise, who is more worthy of the Court’s mercy. This is especially important because by refusing the stay, the Court can in effect summarily end the appeal. Once again, in these cases if you do not stay the order you are appealing, by the time your appeal is heard, it may be too late and possibly even pointless to win the appeal.

In this case, the Wife had honoured the arbitrator’s Order by returning to the jurisdiction. This decision had clearly put her in difficult circumstances. In contrast, the Husband had historically defaulted on mortgage payments, informed her they were at risk of losing the matrimonial home, defaulted on paying property taxes, and even defaulted on his child support obligations until the Wife moved to compel payment. His conduct was clearly not winning him any popularity contests. His new position on ownership of the matrimonial appeared like a brazenly opportunistic attempt to diminish the Wife’s share in the home. Historically, he treated the property as jointly owned. Why appeal that view now? Ultimately, the Court of Appeal was unlikely to entertain this quixotic exercise, and by refusing the stay, effectively ended the entire purpose of the appeal.