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Cross-border aspects of separation and divorce can be complicated, especially since proceedings that are commenced in a different jurisdiction may impact issues such as property division or support. While there are limited grounds for a Canadian court to decline to recognize a foreign divorce, there are measures that courts can take to protect a party’s interests, even if assets are located outside of Canada.
Applicant Requests Foreign Divorce Not be Recognized
Pratt v. Korculanic addressed several issues, including a request for the court to decline to recognize a divorce obtained by the respondent in Spain. The applicant also requested an order restraining the respondent from depleting family property under section 12 of the Family Law Act (FLA). The parties were married for nearly 27 years, but had resided at different times in Ontario, the Bahamas, and finally in Spain, at the time of their separation. The applicant now lived in Toronto, while the respondent had Croatian and Canadian citizenship and was thought to be residing in Croatia.
The applicant previously obtained a Mareva injunction from the Ontario courts, which restrained the respondent and any corporation in which he had an interest from dealing with assets, including the parties’ Bahamas home, as well as the respondent’s company. Nevertheless, the respondent did not comply with the interim Mareva injunction and continued to transfer assets to his lawyers in Ontario, the Bahamas, the United States, and Spain, as well as to transfer rental proceeds from the Bahamas home to himself. The Spanish divorce order did not grant the applicant any property rights and awarded all marital assets to the respondent. It also did not provide the applicant with spousal support.
Ontario Court Determines it Has Jurisdiction Over the Parties’ Divorce
The applicant sought a divorce based on the fact that the parties had been living separate and apart, but also requested that the court not recognize the Spanish divorce. The judge reviewed previous cases and found that there were limited grounds on which an Ontario court could refuse to recognize a foreign divorce that is otherwise presumptively valid. These included:
- where the foreign court or other authority that granted the divorce did not have the jurisdiction to do so under the law of the foreign country;
- where there is evidence of fraud, going to the jurisdiction of the granting court;
- where there has been a denial of natural justice, such as the absence of notice;
- where the foreign divorce is contrary to Canadian public policy.
In this case, there were several grounds in which the court could refuse to recognize the Spanish divorce. The judge first determined that there had been a denial of natural justice, as the applicant was not aware that the Spanish court had issued a divorce decree for over two months after it was made, which constituted an absence of notice. A jurisdictional motion was previously argued, and an order confirming Ontario had jurisdiction was issued. Following that, the applicant took steps to alert the Spanish authorities that Ontario courts had assumed jurisdiction. The respondent knew of the order, but proceeded to obtain a Spanish divorce. In Novikova v. Lyzo, an Ontario court refused to recognize a Russian divorce on the basis there was a lack of notice. The applicant was aware that her husband was obtaining a divorce in Russia, but he did not provide her with the divorce documents. As a result, she had no opportunity to obtain legal advice about them and was unaware that she would not be eligible for spousal support in Canada after a divorce in Russia had been granted. The Ontario Court of Appeal concluded the motion judge could decline to recognize the Russian divorce due to the denial of natural justice.
Judge Finds the Foreign Divorce Was Obtained Through Misrepresentations
Justice Sah also believed the Spanish divorce was obtained through unfair forum shopping. She explained that “occurs when a party’s driving reason for pursuing a divorce order in a foreign jurisdiction is to avoid court-imposed obligations under Ontario law”. Here, the respondent argued the jurisdictional matter before the Ontario courts, claiming that Spain was the correct jurisdiction. However, when Ontario was determined to have jurisdiction over the parties’ divorce, he proceeded to pursue the Spanish divorce instead. The judge believed the respondent tried to “deceitfully pursue the divorce in another forum for his own benefit”.
Finally, the judge concluded that there was evidence of fraud, which would have affected the jurisdiction of the Spanish court’s authority to grant the divorce. In Powell v. Cockburn, the Supreme Court of Canada explained that if a “foreign court is fraudulently misled into believing the jurisdictional facts are such as to give it jurisdiction, when in truth they are not, this will be a ground for refusal of the domestic court to recognize the [divorce order].” Additionally, in Ahmed v. Ahmed, the divorce was not recognized because the information provided in the foreign divorce application was inaccurate. The Ontario court found that the foreign divorce was obtained through material misrepresentations. Similarly, in this instance, the respondent never provided the Spanish court with the Ontario jurisdiction order. Nothing indicated that the Spanish court was aware that the jurisdiction issue had already been argued and that Ontario courts had assumed jurisdiction over the matter. Justice Sah concluded these were misrepresentations or omissions before the Spanish court, and there was a basis to conclude that the Spanish divorce was granted based on fraud. Overall, the applicant met her burden to establish that the Spanish divorce was not properly obtained, and the judge declined to recognize the foreign divorce.
Mareva Injunction was Warranted to Protect the Applicant’s Claims
The applicant also requested that the final order include a Mareva injunction pending the enforcement of the orders regarding equalization, property, and spousal and child support. The judge found that the request was not unreasonable and agreed that the existing Mareva injunction would continue post-judgment, as there was a real risk that the applicant would suffer irreparable harm if it were terminated before the enforcement of the order. The judge explained that it was necessary to keep the injunction in place because the respondent had taken concerted efforts to defeat the applicant’s claims before the Ontario courts. The worldwide Mareva injunction was to remain in effect until the equalization amount, retroactive child support, and lump sum spousal support orders were paid in full.
The applicant also sought a further precaution under sections 12 and 40 of the FLA, freezing assets that belonged to the respondent. Section 12 enables a court to make an order preserving property, while section 40 permits a court to make an order restraining the depletion of a spouse’s property that would impair a claim. In Fraser v. Fraser, the court indicated that the party alleging a need for a preservation order to protect their interests bears the burden of establishing that their claim for support would be impaired unless a preservation order is made. The court found that the respondent owed the applicant equalization payments, retroactive child support, and a lump sum for spousal support. But, there was a real risk that the respondent could defeat those awards if the preservation or non-depletion orders were not made. There was the potential of irreparable harm to the applicant, which included non-payment of the awards by the respondent, as well as the possible inability to locate the respondent later. Justice Sah found that the applicant met the onus of demonstrating that a preservation order was warranted. The result was that the respondent was restrained from disposing of or depleting any assets in Ontario or worldwide, and also required to preserve those assets. Additionally, the applicant sought a further remedy, requesting a declaration that the corporate veil of the respondent’s corporation be pierced so that any of the respondent’s liabilities would fall on the corporation. This was also permitted under the Family Law Rules¸, and the judge agreed that, given the facts of the case, the request was reasonable.
Experienced Windsor Family Lawyers Assisting Clients with Cross-Border Divorce
When cross-border issues threaten to deplete assets or defeat your claims, the stakes are too high to navigate alone. As this case demonstrates, Canadian courts have the power to refuse to recognize a foreign divorce obtained through misrepresentation, and they can impose powerful tools, such as Mareva injunctions and preservation injunctions, to freeze assets globally.
The dedicated team at Johnson Miller Family Lawyers is equipped to aggressively protect your property rights and support claims in complex international disputes. If you are facing a divorce with international assets or a foreign proceeding, let us help you act decisively to secure what is rightfully yours. Contact us today by completing our online questionnaire or calling 519.973.1500 for a confidential consultation.
