



COURT OF APPEAL FOR ONTARIO

CITATION:
Davydov v. Kondrasheva, 2012 ONCA 488

DATE: 20120706

DOCKET: C55040

OConnor A.C.J.O., MacPherson and Rouleau JJ.A.

BETWEEN

Igor Davydov

Appellant (Respondent)

and

Marianna Kondrasheva

Respondent (Applicant)

Igor Davydov, in person

Alexandra Abramian and Brigitta Tseitlin, for the
    respondent

Heard: July 4, 2012

On appeal from the order of Justice John P.L. McDermot of
    the Superior Court of Justice, dated January 27, 2012.

ENDORSEMENT

[1]

This is an appeal from the motion judges
    order finding the appellant in contempt of a non-dissipation order issued in a
    matrimonial proceeding.  Non-dissipation orders find their origin in sections
    12 and 40 of the
Family Law Act
,
RSO 1990, c F.3.

[2]

Section 12
provides as follows:

In an application under section 7 or 10, if the court considers
    it necessary for the protection of the other spouses interests under this
    Part, the court may make an interim or final order,

(a) restraining the depletion of a
    spouses property; and

(b) for the possession, delivering up,
    safekeeping and preservation of the property.

[3]

Section 40 provides that:

The court may, on application, make an interim or final order
    restraining the depletion of a spouses property that would impair or defeat a
    claim under this part.

[4]

The appellant was born in Russia and, after
    spending two years in Israel, immigrated to Canada in 1993.  The parties were
    married in Russia in October 2005 and separated in early 2011.

[5]

An application for relief under the
Family Law Act
issued on March 16, 2011.  On March 23, 2011, the applicant and her
    counsel attended before McGee J. in order to obtain a number of orders
    including exclusive possession of the matrimonial home, spousal support of
    $5,000 per month and an order that the respondent pay all expenses on the
    home.  McGee J. dismissed the motion for lack of notice but made an order that
    neither party is to dissipate assets until further order or written
    agreement.

[6]

The respondent brought a motion for contempt of the
    non-dissipation order of Justice McGee.  The motion judge gave the Appellant 60
    days to purge his contempt by payment of $723,999.12.

[7]

In response to the motion for contempt, the
    appellant conceded that he was aware that a non-dissipation order had been made
    and that, after the order was made, he transferred $780,502.73 to an account in
    Cyprus.  The appellant explained that these funds were used to partially repay
    a legitimate debt he had incurred prior to the date of separation.  In his
    affidavit filed on the motion, he stated that his counsel had not discussed
    with him nor did he understand the nature and effect of the non-dissipation
    order.  He admitted to using the moneys to pay debts and acknowledged this
    may have breached the non-dissipation order.  He went on to state that,

At the time I did not understand the nature and effect of that
    provision of the order and I did not knowingly believe that by paying these
    debts, which I really considered to be a debit and credit transaction, meant
    that I was breaching the order.  As I have earlier indicated, I did not think
    this would make a difference in the equalization of our net family properties
    because the debts I was paying were incurred prior to the date of separation
    and would be considered in the final equalization.

[8]

As to the timing of the payment, he indicated that
    the creditor,

began to push me very hard for repayment when she learned about
    my separation and my stock market losses  she is Russian and Russians deal
    with disputes differently than do Canadians.  Knowing her and her Russian rules
    of handling business disputes, I felt I had no choice but to repay that
    legitimate debt.

[9]

In his reasons, the motion judge correctly set out
    the criteria relevant to a finding of contempt of court.  As set out by this
    court in
Prescott
    Russell Services for Children and Adults v. G.(N.)
(2006),
    82 O.R. (3d) 686 (Ont. C.A.):

A three-prong test is required.  First, the order that was
    breached must state clearly and equivocally what should and should not be
    done.  Secondly, the party who disobeys the order must do so deliberately and
    wilfully.  Thirdly, the evidence must show contempt beyond a reasonable doubt.

[10]

The trial judge, however, appears to have been of
    the view that a non-dissipation order cannot be ignored because the money was
    being used to pay down debts and then, later in his reasons, states that it
    does not matter whether he used the funds to pay debt 

[11]

As to the appellants submission that the debt he
    paid was legitimate and did not represent a depletion of property or in any way
    defeat a claim that could be advanced by his spouse, the motion judge made no
    finding.  The motion judge stated:

I am not in a position to prejudge whether or not an
    equalization payment will have to be made and the respondent will have to do a
    better job at proving his debts than he has done to the present if he is to
    utilize those debts as reduction for calculating his net family property.

[12]

In order for contempt to have been made out in this case, the
    motion judge would have had to make specific findings with respect to the
    nature and consequences of the appellants decision to pay the substantial
    Russian debt.

[13]

Since no such findings were made, we would set
    aside the finding of contempt.

[14]

In setting aside the finding of contempt, we should
    not be taken as condoning the conduct of the appellant nor should we be taken to
    say that a finding of contempt is not available in this case.

[15]

Whether the payment in question was made in
    repayment of a legitimate debt incurred prior to separation is closely
    connected to an assessment of this familys net family property.  It is also an
    important factor in the allegation of contempt and the determination of an appropriate
    penalty.  We are of the view therefore that the trial of an issue is required. 
    That is, the respondent is at liberty to bring a renewed motion for contempt where
    the legitimacy of the debt can be determined as well as its impact on the issue
    of the equalization of net family property.

[16]

For these reasons, the order of the motion judge is
    set aside.

[17]

There will be no costs of the appeal and the costs
    of the proceedings below are reserved to the judge hearing the contempt
    proceedings.

D. OConnor A.C.J.O.,

J.C. MacPherson J.A.

Paul Rouleau J.A.


