Kennedy-Dowell v. Dowell

Kennedy-Dowell v. Dowell Court Court of Appeal Date 2002-05-17 Citation 2002 NSCA 63 Docket CA 178591 Judge/Registrar/Adjudicator Cromwell, Thomas A. (Honourable Justice) Document Type Decision Decision Content Date: 20020516 Docket: CA 178591 NOVA SCOTIA COURT OF APPEAL [Cite as: Dowell v. Kennedy-Dowell, 2002 NSCA 63] BETWEEN: EDGAR DOUGLAS DOWELL, JR. Appellant - and - KRISTINA LAURA KENNEDY-DOWELL Respondent D E C I S I O N Counsel: Appellant in person Julia Cornish for the respondent Application Heard: May 9th, 2002 Decision Delivered: May 16, 2002 BEFORE THE HONOURABLE JUSTICE CROMWELL IN CHAMBERS CROMWELL, J.A.: (in Chambers) [1] Edgar Dowell has filed a notice of appeal from a corollary relief judgment given by Campbell, J. The appeal challenges the judge’s order for the immediate sale of the former matrimonial home, his refusal to order spousal support for Mr. Dowell and the classification by the judge of a family trust as a non-matrimonial asset. Mr. Dowell has applied in Chambers for an order setting the appeal down for hearing and for a stay of execution of the judgment under appeal relating to the immediate sale of the former matrimonial home. Ms. Kennedy has applied to strike out various grounds of appeal and for an order for security for costs. [2] I am advised that the formal order arising from the decision under appeal has not yet been settled or issued. As discussed at the hearing, I will not set the appeal down for hearing until that order has been issued. Mr. Dowell should re-apply by way of telephone Chambers to set down the appeal once the formal order has been taken out. [3] In relation to Ms. Kennedy’s application for an order striking out various grounds of appeal, a judge of this Court in chambers has no jurisdiction to make such an order. That application is accordingly dismissed. [4] That leaves for consideration Mr. Dowell’s stay application and Ms. Kennedy’s application for security for costs of the appeal. [5] Although the documents filed by Mr. Dowell ask generally for a stay of Campbell, J.’s order in its entirety, Mr. Dowell made it clear in his submissions to me that what he seeks is a stay of that part of the order relating to the sale of the former matrimonial home. [6] Campbell, J. addressed the matrimonial home issue at some length in his reserved judgment which runs to over 50 pages and which followed a 5 day trial. I will quote from Campbell, J.’s reasons on this issue to provide the context for the stay application: MATRIMONIAL HOME ¶ 68 The matrimonial home at 5 Melwood Avenue, Halifax, registered in the petitioner's name is valued at $128,000.00 and $130,000.00 in the respective statements of property of the petitioner and the respondent. It was subject to a mortgage which at the time of the statement of property was $87,000.00. It was financed in addition by a loan from the petitioner/wife's father for which he currently has judgement against the respondent for approximately $34,000.00. ¶ 69 The respondent husband has been in possession of the property since the separation and very much wishes to maintain it recognizing that he would use it with his children when they have parenting time with him in Nova Scotia. He has incurred very substantial debts as of the trial date and continues to earn an income much lower than he could have achieved if he had remained in the teaching profession. ¶ 70 There had been substantial property tax arrears and Mr. Dowell has incurred substantial other debts, some of which will be referred to below. There had been periods when he was unable to pay the mortgage installment. The petitioner/wife contends that she paid almost $4,800.00 in mortgage installments post‑separation. It is relatively clear that the respondent does not have the capacity to borrow or otherwise raise the funds necessary to repay his portion of the debt to the petitioner's father. It is equally clear that he cannot carry the burden of the mortgage and other upkeep costs. The only practical direction in regard to the matrimonial home is for it to be immediately sold and I so order. The parties shall cooperate with an orderly sale of the property. From the proceeds, the balance of the mortgage, the judgement to the petitioner's father, tax arrears if any, selling costs including legal fees shall be paid. ¶ 71 Because of the extremely precarious nature of the respondent's finances and the need to avoid problems that might come from a lack of cooperation in regard to decision making about sale price and other closing arrangements, I will include in the order a provision that this property shall be released as a matrimonial home pursuant to the provisions of section 8(c) of MPA. As I understand the evidence, the deed to the property is in the petitioner's name alone. The above provision will permit her to sell the property by signing both the listing agreement, the agreement of sale and the deed herself without calling upon the respondent. I do this for administrative clarity in getting the property sold. I would comment that I would expect the petitioner to obtain a reasonable value for the property. ¶ 72 Depending on the sale price, it is highly probable that the proceeds will be insufficient to retire the above noted payouts. All of those items will need to be paid, however, in order to close the sale transaction. The mortgage, the debt to the father and the property taxes are all incumbrances while the sales commission and legal fees cannot usually go unpaid. In the unlikely event that there is a surplus, I would direct that such surplus be divided equally between the parties. In the event that there is a shortfall, I would expect that the petitioner would find it to be in her own best interests to finance that shortfall from her own separate funds in order to complete the transaction. In the event that she should elect to do so, I order that 50% of any such shortfall shall constitute a debt due to her from the respondent, payable forthwith thereafter. In so ordering, I recognize that the respondent is unlikely to be in a position to pay such a debt and my objective is simply to put the petitioner in a position where that debt is immediately crystallized so that she can rank equally with any other creditors of the respondent and in a position to use whatever is available to her by way of collection effort. (Emphasis added) [7] Mr. Dowell has filed two affidavits in support of his stay application. A lengthy affidavit by Ms. Kennedy was filed but subsequently withdrawn with leave of the Court. I have not considered that affidavit in reaching my decision in this matter and I direct that it be removed from the file. I have ignored references to that affidavit in the brief filed by Ms. Kennedy’s counsel prior to the withdrawal of the affidavit. [8] There are two children of the marriage who were born in February of 1996 and June of 1997, respectively. According to Mr. Dowell’s affidavit, he and Ms. Kennedy have been living separate and apart since October of 1999 and have been formally separated since late December of that year. The parties have joint legal custody of the two children who reside primarily with their mother. Since separation, Ms. Kennedy and the children have been living in Toronto. The custodial arrangements between the parties include a provision that the children reside with their father every third week from Thursday at 3:00 p.m. until Sunday at 3:00 p.m. along with other specified dates including a substantial division of the summer break. Mr. Dowell frequently travels to Toronto for the periods which the children are to reside with him. He has spent considerable time with the children in Toronto and elsewhere in Ontario, including periods during six weeks in February and March of this year as well as time at his sister’s in Windsor, Ontario and in a hotel over Christmas 2001. He testified in cross-examination that he considers all of the time he has spent with the children to be of benefit to them. [9] The matrimonial home was purchased in anticipation of the birth of the second child who was born in June of 1997. As noted, the children have not lived full-time in that residence since October of 1999 when they were 3 and 2 years of age. Mr. Dowell has continued to live in the home since October of 1999, although with frequent absences and has been responsible for the mortgage and the upkeep costs, although not always able to pay them. The children have had six week summer visits there in the years 2000 and 2001 and 5 weeks are planned for 2002 . [10] Mr. Dowell’s main argument in support of his stay application is that immediate sale of the property is not in the best interests of the two children of the marriage who have had and, in his submission, should continue to have their Nova Scotia access time at the former matrimonial home. Mr. Dowell says that the children have “immediate and clear” recollections of living in the home during the summer visits and that the home is ideal for their well-being. He also says that he believes that his son Alec has difficulty adjusting to change and that an immediate sale of the home would be detrimental to his emotional well-being. [11] Campbell, J. found, and Mr. Dowell does not seriously dispute this finding , that he cannot carry the burden of the mortgage on the home and other upkeep costs. Mr. Dowell’s position is that if, as he seeks on appeal, spousal support were ordered to help offset the costs of his travels to Toronto to visit with the children or if some portion of the trust were awarded to him, he would be in a position to pay the costs associated with the home. Mr. Dowell points out that he spends large sums of money on access costs which prevents him from paying the mortgage and other costs of upkeep of the house. He also notes that he is frequently absent from the house in order to spend time with the children in Ontario. As things stand, however, the stay which Mr. Dowell seeks would result in either further arrears on the mortgage payments or payment of such arrears by Ms. Kennedy until the appeal is heard and determined. [12] There is no automatic stay of execution pending appeal in this Province. Normally what must be shown is that there are arguable grounds of appeal, that the appellant will suffer irreparable harm if the stay is not granted and that the balance of convenience favours granting the stay. Even if this test is not met, a stay may nonetheless be granted in exceptional circumstances. Where, as here, it is submitted that a stay would serve the best interests of the children, that factor must be weighed heavily. [13] I am satisfied that there are arguable grounds of appeal which if accepted by the Court, could have the result of allowing Mr. Dowell to remain in the home. For example, if spousal support were ordered in his favour or if he were awarded a portion of Ms. Kennedy’s family trust on appeal, it could be more realistic for him to buy out Ms. Kennedy’s interest in the home. [14] Mr. Dowell does not allege any irreparable harm apart from the disruption of the children if the home is sold immediately. His interest in remaining in the home is concerned with the welfare of the children while they are with him in Nova Scotia and I will consider that aspect separately later in my reasons. That consideration apart, no other sort of irreparable harm to Mr. Dowell is established. [15] I must also consider the effect that granting the stay would have on Ms. Kennedy. In light of the trial judge’s findings concerning Mr. Dowell’s precarious financial position and the unlikelihood of there being any equity in the home, there is a serious risk that if the stay is granted Ms. Kennedy will suffer further maintenance costs for the matrimonial home pending the hearing of the appeal that she would not be able to recover from Mr. Dowell if his appeal fails. The inability to recover money from a person who is unable to pay may constitute irreparable harm: see, e.g., RJR— MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. [16] I, therefore, conclude that there is a serious risk of irreparable harm to Ms. Kennedy if the stay is granted. [17] The more difficult question is whether the stay is justified as an exceptional matter on the basis that granting a stay pending appeal better serves the interests of the children than would denying the stay or, put another way, whether the sale of the house will cause irreparable harm by taking away the place where the children have lived with their father during their times with him in Nova Scotia. [18] No doubt the former matrimonial home is an excellent place for the children to spend time when they visit Nova Scotia. However, they have not lived there for more than a few weeks in total in the last two years and have not been in the home for nearly a year. I am not persuaded by the evidence put forward that the children have any significant attachment to the house or that the immediate sale of the house is contrary to their best interests. What the stay, if granted, would accomplish, in effect, would be to have Ms. Kennedy pay for a place for the children to stay in Nova Scotia with Mr. Dowell pending the hearing of the appeal. That is not an order I have any jurisdiction to make directly and I will not, in the circumstances of this case, achieve the same result indirectly through granting the stay. [19] The stay application is, therefore, dismissed. [20] In relation to the security for costs application brought by Ms. Kennedy, I am not satisfied on the material before me that such an order would be appropriate or just at this time. From all the material, I agree that if costs are ordered in Ms. Kennedy’s favour on appeal they may not be collectable. However, I am concerned that ordering security could effectively put an end to the appeal and that such would not be a just result at this time. There is an unpaid order for costs against Mr. Dowell but it was made quite recently. If it is not paid within a reasonable time, Ms. Kennedy may, if so advised, re-apply for security for costs of the appeal. The application is, therefore, dismissed. [21] As success on the applications is divided, there will be no order for costs of these applications against or in favour of either party. Cromwell, J.A.