WestlawNext Canada insight Blog

Epstein’s This Week in Family Law | Foreign Property

Judge found way for applicant to access value of her foreign property in recent decision

Epstein’s This Week in Family Law

Philip Epstein

A Court’s Jurisdiction over a Foreign Immovable

Jung v. Jung, 2016 CarswellOnt 7331 (Ont. S.C.J.) - MacKinnon J. This interesting decision penned by Justice Jennifer MacKinnon of the Ontario Superior Court of Justice in Ottawa canvasses a number of issues.

The first is whether there is jurisdiction to grant a divorce between the parties. Neither spouse had been ordinarily resident in Ontario for at least one year immediately preceding the commencement of the proceeding, but the applicant argued that section 3(1) of the Divorce Act was not intended to preclude the filing of a divorce application by a spouse who has been resident in Canada for over a year from claiming a divorce in the province in which she ordinarily resides at the time the application is filed. In this case the applicant resided in Quebec from 2009 until October, 2015, when she moved to Ontario, and of course, in those circumstances, at the present moment, there is no court in Canada which can entertain a divorce.

Justice MacKinnon reviews the cases that deal with section 3(1) such as Willenbrecht v. Willenbrecht, 47 R.F.L. (4th) 200 (Ont. C.A. [In Chambers]) and Butt v. Mills, 1990 CarswellNfld 289 (Nfld. U.F.C.). She was not satisfied that the applicant was temporarily absent from Ontario and she also notes that the courts have strictly interpreted section 3(1) and that there is no naturally existing right to a divorce, but rather a right based in statute to present the petition. See Garchinski v. Garchinski, 2002 CarswellSask 494 (Sask. Q.B.), at para. 25 and Winmill v. Winmill, 1974 CarswellNat 56 (Fed. C.A.).

It may well be that the strict interpretation of section 3(1) leaves spouses, temporarily, without a jurisdiction in Canada in which to apply for a divorce, but that is the effect of the statute. See Thurber v. Thurber, 2002 CarswellAlta 950 (Alta. Q.B.) and Jadavji v. Jadavji, 2001 CarswellBC 1235 (B.C. Master). Simply put, if one does not meet the residence jurisdiction in the province in which the petition is intended to be issued, then the court cannot proceed with the divorce.

The second claim dealt with here is even more interesting. There is property in issue in Quebec that the wife wants the court to settle. She points out that in Catania v. Giannattasio, 1999 CarswellOnt 950 (Ont. C.A.), the Ontario Court of Appeal has held that Canadian courts can make orders to enforce personal obligations between parties that would affect land in foreign jurisdictions when exercising in personam jurisdiction over the defendant. However, in order to exercise that jurisdiction the courts have insisted on four prerequisites:

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.

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 able to bar to the granting of the order. Thus Justice MacKinnon finds that unless the circumstances fit within the exceptions, an Ontario court ought not to accept jurisdiction over land situated in another province. That is not to say that the court does not have in personam jurisdiction over the respondent. It clearly has, which is to say that an application for child support is an action in personam as is a spousal support obligation. See, for example, Prichici v. Prichici, 14 R.F.L. (6th) 425 (Ont. S.C.J.) and Welsh v. Welsh, 9 R.F.L. (7th) 409 (Alta. Q.B.).

Justice MacKinnon asks herself the question of whether her court can make an in personam order against a respondent that is capable of meeting the 3rd and 4th criteria. Different courts have come to different answers on this question. See Macedo v. Macedo, 19 R.F.L. (4th) 65 (Ont. Gen. Div.), where Justice Beaulieu found that the Court did not have jurisdiction to grant a requested order that title in a Portuguese property be vested in the wife but that the Court did have jurisdiction to make an order for sale of the property. That is, Canadian courts do not have jurisdiction to make an order concerning right, title or an interest to a foreign immovable, but they can order a titled owner to do something with the property.

Justice MacKinnon notes that other judges have refused to grant orders for the sale of foreign property where the order would be of no effect. See Aning v. Aning, 30 R.F.L. (5th) 237 (Ont. S.C.J.) and Cork v. Cork, 44 R.F.L. (7th) 276 (Ont. S.C.J.).

Justice MacKinnon acknowledges that while the case law is divided on this point, her view is that the ability to potentially find the respondent in contempt of an Ontario order to sell the Quebec property would not meet the third criteria of Catania.

However, section 34 of the Family Law Act gives the court certain powers on an application for child support including the right to order a lump-sum payment. The Court thus orders the respondent to make a lump-sum payment for child support equal to his one-half share of the equity in the jointly-owned property in Quebec. It seems that Justice MacKinnon is well aware of the reciprocal enforcement of maintenance orders under Quebec legislation and that Quebec will likely enforce this order for support. This proves that there is more than one way to resolve the foreign immovable problem created by previous case law.

The importance of this case should not be underestimated. Justice MacKinnon, ex proprio motu has found a solution for the applicant in a way for her to access the value of the foreign property. This will be a useful device in cases where child or spousal support is owing and the court recognizes that while they cannot deal with title to the foreign property, they can certainly make a titled owner access its equity. This is all, however, somewhat dependent on the foreign jurisdiction having an agreement with Ontario to enforce Ontario support orders.

View the Complete Sample Newsletter
© Copyright Westlaw Canada, Thomson Reuters Canada Limited. All rights reserved.