Kavanagh v Kavanagh, 2016 ABQB 107

Court of Queen ’ s Bench of Alberta Citation: Kavanagh v Kavanagh, 2016 ABQB 107 Date: 20160218 Docket: 4803 142185 Registry: Edmonton Between: Pius Eugene Kavanagh Plaintiff - and - Halina Kavanagh Defendant Corrected judgment: A corrigendum was issued on February 19, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ I. Introduction

[ 1 ] This Decision divides the remaining matrimonial property at the end of a lengthy and acrimonious divorce proceeding between Pius Eugene Kavanagh [“Mr. Kavanagh”] and his former wife Halina Kavanagh [“Ms. Kavanagh”]. The couple’s divorce was granted on Feb. 11, 2010. What remained outstanding were disputes over division of the matrimonial property. This, however, first required clarification on the status of a family owned business.

That aspect was resolved on Jan. 11, 2013 by an order of Crighton J. [ 2 ] The Court now divides the remaining matrimonial property and evaluates the status of certain liabilities incurred by the parties. What remains are three real properties and trust funds derived from the liquidation of a number of businesses. In most divorces this stage of the litigation would be a rather straight-forward question of evidence and accounting. However, little in this divorce has been simple. [ 3 ] That is the fault of one individual: Mr. Kavanagh. What became very apparent as this trial proceeded was that Mr.

Kavanagh was an unreliable witness, and that the many excuses and obstacles that he advanced were part of a consistent pattern of delay, deception, and deceit. Mr. Kavanagh did what he could to hamper division of the matrimonial property. This was part of a larger historic pattern of activity which had no apparent object except to harm Ms. Kavanagh and her interests. [ 4 ] There are consequences, of course, to that. [ 5 ] Another complication arises out of Mr. Kavanagh’s marriage to Ms. Lien Le. Mr. Kavanagh transferred the share of matrimonial property that was in his name to her as a joint tenant with himself.

Ms. Le therefore had an obvious interest in this litigation, and she was ordered to appear at trial. However, she did not appear. Mr. Kavanagh had many contradictory explanations for that. Resolving Ms. Le’s interest - if any - is another part of this litigation. [ 6 ] I have structured this judgment in an unorthodox manner because Mr. Kavanagh’s abusive litigation strategy is a factor in the Court choosing an appropriate path to resolve this dispute. The divorce process has lasted far too long, and again, this is Mr. Kavanagh’s fault. It is time for this to stop. II.

Background [ 7 ] It is first necessary to provide a narrative of Mr. and Ms. Kavanagh and their interactions. This background is also part of my findings of fact, though I will in many cases elaborate further on these elements. [ 8 ] The parties entered into a relationship in October 1985. They each had been previously married, with two and three children, respectively. They married in 1987. During this period Ms. Kavanagh purchased a business, Wedding World. While she was the initial owner in 1989, she later gave Mr. Kavanagh half the shares in the business.

At that point the Kavanaghs set up a second business, Tamfor, a wedding product wholesaler. Mr. Kavanagh ran Tamfor. In 1994, Wedding World funded the setting up of a third business, Starb, which owned the building that housed Wedding World and Tamfor. [ 9 ] In 1999, Ms. Kavanagh’s son, John Borowiecki, became involved in the wedding business and received 50% of an umbrella corporation, Tamfor Corp. Mr. and Ms. Kavanagh equally split the remaining shares. However, the preferred shares and business equity were held only by Mr. and Ms. Kavanagh. [ 10 ] Mr.

Kavanagh was injured in a motor vehicle accident in 2003 and at that point largely stopped working in the family businesses. The accident led to a large settlement and disability pension, both of which were retained by Mr. Kavanagh, even though Tamfor had been a successful plaintiff and had paid for legal costs. [ 11 ] The wedding businesses began to slow in the 2005-2006 period. The parties responded by selling an acreage and borrowing $310,000.00 from John Borowiecki to pay off the Starb mortgage. [ 12 ] The Kavanaghs separated on Aug. 15, 2006, but both remained involved in the wedding businesses.

This proved problematic. Ms. Kavanagh’s version of what followed, which I accept, is that Mr. Kavanagh began a campaign of interfering with the Wedding World business by obtaining an ex-parte court order that required his signature on cheques, and then withholding that. Ms. Kavanagh was unable to obtain funds from Wedding World for her own purposes between 2008-2009. As well, Mr. Kavanagh removed critical business records, such as those that documented which bridal dresses had been ordered by which customers.

This seriously impeded the operation of the Wedding World business. [ 13 ] This pattern of interference in the Wedding World business escalated. Mr. Kavanagh padlocked the business, stole wedding dresses, and dumped stock in the Wedding World parking lot. Ultimately he assaulted Ms. Kavanagh in front of witnesses and pled guilty to that. A two-year restraining order was issued against Mr. Kavanagh, even though he continued to be a co-owner of the wedding businesses. Ms. Kavanagh operated Wedding World as best she could, in hopes of finding a buyer; but Mr.

Kavanagh’s interference in the financial operation of the businesses led to Ms. Kavanagh incurring significant personal debts because Mr. Kavanagh would not co- sign any cheque that transferred funds to Ms. Kavanagh. [ 14 ] The court order that permitted Mr. Kavanagh to interfere with Wedding World was part of a broader oppression action that involved all the family’s businesses. The oppression claims were ultimately dismissed. [ 15 ] Eventually Wedding World and the other related businesses were either sold or liquidated.

However, the Wedding World, Tamfor and Starb corporations remain, with certain associated funds held in trust and outstanding administrative tasks requiring completion. Several distributions occurred to both Kavanaghs between 2009 and 2015 that are not in dispute. [ 16 ] Tamfor ceased operation in 2008 because of the disruptions by Mr. Kavanagh. While Ms. Kavanagh attempted to liquidate its assets via auction, that was blocked for 2.5 years by Mr. Kavanagh. Ultimately the business was liquidated but the proceeds were essentially consumed by the clean-up and disposal costs.

[ 17 ] The remaining matrimonial property is largely a number of real properties. When the relationship began, Ms. Kavanagh had a house [the “63 Ave residence”] and an acreage [the “Acreage”]. These two properties and $20,000.00 in savings were used to finance building of a $120,000.00 residence on the Acreage. The Acreage was sold in 2005 and the proceeds were applied to the wedding business debts.

The Kavanaghs then returned to the 63 Ave residence. [ 18 ] Two more properties were acquired by the Kavanaghs during the marriage: a lakeside property [the “Lake property”] and a rental property [the “83 Ave residence”]. The latter purchase was financed by a $30,000.00 loan to Ms. Kavanagh from her father. This loan remains unpaid. The Lake property is in an unfinished and uninhabitable state. [ 19 ] At the date of separation, the parties had outstanding mortgages on the 63 Ave, 83 Ave and Lake property residences, and the $30,000.00 loan from Ms. Kavanagh’s father. Ms.

Kavanagh has been the only one to make payments on those mortgages. She has also paid the other post-separation expenses associated with the Lake property, the 63 Ave residence (occupied by Mr. Kavanagh), and the 83 Ave residence. [ 20 ] The gradual collapse of the Wedding World business forced Ms. Kavanagh to fund much of its operation via credit cards, which led to additional financing issues. Ms. Kavanagh attempted to pay those debts with funds from Wedding World, her own resources, and assistance from her father. The last source at least mitigated the interest charges on the credit cards. Ms.

Kavanagh in 2009 received a lump sum $150,000.00 from her father’s line of credit for this purpose. This paid off the higher interest rate credit card debts that existed at the time of the separation. This loan to Ms. Kavanagh from her parents remains unpaid. [ 21 ] Another debt incurred by Ms. Kavanagh arose from the purchase of a replacement automobile, which required another $17,700.00 loan from her father. After Wedding World was sold, Ms. Kavanagh worked for a period with the new owner and then retrained to be a realtor. Ms.

Kavanagh currently lives in a unit in a four-plex, which was owned by her father and has agreed to pay $1,000.00 in rent monthly, but has been unable to do so. Ms. Kavanagh’s father died in 2014, and the four-plex is now owned by her son John and his wife. Ms. Kavanagh continues to owe large sums to her father’s estate. [ 22 ] Mr. Kavanagh resisted repayment of the amount borrowed from John Borowiecki, which led to litigation and ultimately an agreement by all parties that Starb would repay the amount loaned. [ 23 ] Mr. Kavanagh subsequently remarried with Ms. Le. After the marriage, Mr.

Kavanagh had his joint interest in the 83 Ave and Lake property matrimonial properties severed from Ms. Kavanagh. He then transferred his 50% interest into joint title with Ms. Le. Similarly, Mr. Kavanagh purportedly transferred his shares in the matrimonial businesses into joint title with Ms. Le. [ 24 ] At present, the status of the major property that remains is: • 63 Ave property - assessed value of $360,000.00; CIBC mortgage ($100,748.00 remaining, Ms. Kavanagh’s share is $23,475.00); Ms. Kavanagh, John Borowiecki, Tammy Borowiecki, Michelle Borowiecki as joint tenants; lis pendens by Mr.

Kavanagh. • 83 Ave property - assessed value of $385,000.00; 50% Ms. Kavanagh and 50% Mr. Kavanagh and Ms. Le (joint owners); CIBC mortgage ($106,578.00 remaining); a writ to the Bank of Montreal, which on Aug. 28, 2015 was for $32,116.69. • Lake property - assessed value of $525,000.00; 50% Ms. Kavanagh and 50% Mr. Kavanagh and Ms.

Le (joint owners); CIBC mortgage ($152,558.00 remaining); a writ to the Bank of Montreal which on Aug. 28, 2015 was for $32,116.69 (this is the same debt as attached to the 83 Ave property). • matrimonial businesses - about $600,000.00 remains from the liquidations; with 50% equitable interest by Ms. Kavanagh, and 50% (allegedly) jointly owned by Mr. Kavanagh and Ms. Le. III. Mr. Kavanagh’s Credibility [ 25 ] A key aspect of this Decision depends on the credibility of the primary witnesses: Mr. and Ms. Kavanagh. When in conflict I prefer the evidence of the latter over the former.

I also prefer the information in any document or that may be inferred from the documentary record over that provided by Mr. Kavanagh. [ 26 ] I did not find Mr. Kavanagh to be a credible witness, and indeed came to the opposite conclusion: that anything Mr. Kavanagh said should be viewed with, at a minimum, skepticism. This has many consequential implications for this judgment and its analysis, but for the moment I will provide a number of examples of why I viewed Mr. Kavanagh’s evidence with such caution. [ 27 ] Mr. Kavanagh on many occasions contradicted himself.

He also habitually alternated between taking strong positions on certain issues, and, when the basis for his claims was probed, he indicated he did not recall, or did not know. He claimed to be unfamiliar with many of the documents which he was shown. This was proven false by both email correspondence records and the disclosed documentary record. [ 28 ] As one example, Mr. Kavanagh denied which lawyer had filed his statement of claim in the 2003 motor vehicle accident litigation. I believe it is useful to reproduce a cross-examination exchange between Mr. Kavanagh and Ms.

Kavanagh’s counsel, as it is representative of much of the trial proceeding, at least whenever Mr. Kavanagh was involved. Q. ... my understanding is you directed Mr. Lister to file a statement of claim for you and it was filed in - on December 8, 2004. A. Actually it was Adam Campbell filed initially. Q. Well, I’ve got - I’ve got the statement of claim, sir, and it’s not Adam Campbell. It’s Phil Lister Professional Corporation as being the party that filed it.

A. That’s not possible. Q. Can you look at the statement of claim just confirm you’re the plaintiff? A. That’s really weird because Adam was the lawyer looking after it before he re - retired. Q. This is Mr. Campbell that appeared before yesterday. A. Yes. And when he retired, Phil took his - I have no idea. Q. Mr. Kavanagh, can you identify that claim for me? A. I don’t recall seeing it. It may have been a long time ago but it - I don’t - no. I don’t think I’ve ever - probably never seen it. Q. You never saw this. A. No. I would never even have reason to see it. [ 29 ] Mr.

Kavanagh persistently shifted blame or minimized his own conduct. A good example of that was how Mr. Kavanagh characterized his assault on Ms. Kavanagh which led to a criminal conviction. I have no doubt the assault occurred; Ms. Kavanagh introduced documents from the criminal proceedings against Mr. Kavanagh. Mr. Kavanagh reported something different. While he first admitted there was an assault by him on Ms. Kavanagh, in his closing argument he denied it entirely: “He mentioned an assault. Actually there was no assault.” [ 30 ] At another point Mr.

Kavanagh explained: “I made a mistake and pled guilty.” Though Mr. Kavanagh was charged with possession and use of a weapon, he maintained that was inappropriate and misrepresented what had occurred: ... I think it was my butter knife or something. No, my utility knife. My box knife. For box - cutting boxes. I note in passing that box cutters can most certainly be, and have been, effective weapons. [ 31 ] Then there were the narratives which emerged that I would characterize as ‘flights of fantasy’, none of which were substantiated in any way. For example, Mr.

Kavanagh explained a series of medical crises that had affected himself and his family. He indicated his “son in Vietnam” had experienced a curious medical condition that incurred $200,000.00 in costs: My son - my son in Vietnam, he had a brain tumour and I had in 2 - I borrowed - I think it’s just over $200,000 US. This was going back aways and there was a problem in the eyes but now they call a minor tumour. He did have surgery for shunts and things and they couldn’t - the USA, their standard was you do surgery which is a 80% chance of brain damage.

And New York standard was don’t do it unless it’s at the last second which had a risk. It was conflicting information. And he was in Vietnam and I couldn’t - they wouldn’t allow my wife to come back into Canada unless - because she had too many reasons to stay here, having me here. So I couldn’t bring him over and that was a problem and I had - they had to bring in doctors from all over to do it basically free but you had to pay for their families and them first class on a vacation, that’s what it boils down to. But it was a lot of other costs, all kinds of things. It was over 200,000. [ 32 ] Mr.

Kavanagh, too, was afflicted: ... I also - I had this very sick problem in my abdomen that nobody knew what the problem was. I was told it was in my mind and everything else. I was in Vietnam, I - I went to a French hospital and then I went to Hanoi with the senior officer and political party hospital which my wife had a friend there. And they put me on to Singapore and it cost me about 30, $40,000 for medical expenses in 2008, I believe. And they found the problem and I had the surgery here later which was a big mistake ... I should have had it over there.

I didn’t trust Vietnam and Singapore wanted like $100,000 for the surgery. So I came back here, it’s free but they almost killed me. I’ve been in a lot of trouble since. [ 33 ] However, the most dramatic and curious medical troubles were allegedly experienced by his wife, Ms. Le. Mr. Kavanagh’s description of Ms. Le is interesting. On the first day of trial, a Monday, he explained that she is an accountant, an MBA, and has a law degree. By Tuesday, Mr. Kavanagh described her as having an LLB and “she did a lot of law years ago”, an MBA, is re-doing a CPA, and had been completing a PhD.

She has 18-19 years of university, and “[s]he took six years of physics for some strange reason.” [ 34 ] Mr. Kavanagh explained that in 2010 Ms. Le had experienced a medical crisis. On Monday, Ms. Le’s health issues were described in this manner: There’s a little problem there. I have her - five years ago, she had some problems, health, which caused a stroke and - 2010, and literally, she has no memory of before that. She’s had to relearn to speak. Her English is about the worst I’ve ever seen in my life. She did speak four languages before. ...

I’m trying not to discuss anything with her because she’s redoing her - she’s redoing her chartered accounting right at this moment. She’s kind of fragile in a lot of ways. She kind of doesn’t know what’s going on here, and I’m not telling her anything, and she said she received an email. I just told her it’s for me, and she just doesn’t understand what it’s all about. ... [ 35 ] Ms. Le had been summoned to appear as a witness two days later. Mr. Kavanagh’s explanation above was why he warned the Court Ms. Le might not attend, even though the e-mail was from Ms. Kavanagh’s counsel and included a Notice to Attend.

In any case, Mr. Kavanagh indicated that Ms. Le needed a Vietnamese translator to assist with her evidence. [ 36 ] An issue in this litigation was that Ms. Le appears on the title to a number of matrimonial assets, and that makes her a potentially interested and affected party. But she was absent. Between the first day of trial and Wednesday, Mr. Kavanagh proposed to reverse his having put Ms. Le on title to the 83 Ave property and Lake property, and the matrimonial business shares. He said he had a Power of Attorney that would authorize him to do that.

[ 37 ] On Tuesday, Mr. Kavanagh appeared and claimed to have an airline boarding pass and Ms. Le’s passport which indicated she had returned from Phoenix to Canada on the Friday before the Monday the trial started. He subsequently expanded on the situation when asked to confirm whether Ms. Le would attend the following day: I didn’t discuss it with her. She’s - I asked her about it and she says I’m aware of it and she says, well, maybe I’ll - [counsel for Ms. Kavanagh] did send a - she says she finally looked in her emails last night and early this morning, because she was out of the country.

She said it doesn’t matter if you asked her - if you want to avoid - if you wish to avoid appearing, just acknowledge that you will go along with what the Court decides on these properties. So she’ll decide that tonight. Well, she will - ... That’s - I - I can’t - I don’t argue with her over these things. She has her own mind. ... I - I don’t control her. [ 38 ] I stressed that Mr. Kavanagh should inform Ms. Le that there are serious consequences to failing to attend after being summoned to court. [ 39 ] In cross-examination Mr. Kavanagh then confirmed that Ms.

Le had suffered a blood clot-based injury which “I assume would be a stroke.” Now he explained that Ms. Le can speak English, just “[n]ot like she used to.” [ 40 ] On Wednesday, Ms. Le did not appear. Instead Mr.

Kavanagh presented a letter dated August 30, 2015 (the day before the trial was scheduled to commence) which read: Dear Sir, In response to your attached email to Pius Kavanagh dated August 29, 2015; I acknowledge that I will transfer my interest in the properties and corporations jointly registered to myself and Pius E Kavanagh, as per the upcoming Court Judgement in the matrimonial property action between Pius Kavanagh and his ex-wife. I have been striving to have another child, and it is highly probable that I am presently pregnant. I do not wish to jeopardize the pregnancy in any way with this matter.

Regards, Lien H Le [ 41 ] Mr. Kavanagh explained his wife had sent him this letter by email on August 30, 2015. Though it was addressed to counsel for Ms. Kavanagh, it was not sent to him, only to Mr. Kavanagh. Mr. Kavanagh indicated Ms. Le was, apparently, in Calgary staying with a friend. She had just arrived from Phoenix. When I asked him for copies of the email communication that involved this correspondence he promised he would check, but he had been using his phone and “... things end up vanishing from my phone. ...”. [ 42 ] The content of this letter is in a number of senses curious.

First, this letter, dated days earlier, apparently established the position that Ms. Le had no interest in the matrimonial properties, but Mr. Kavanagh the day before said that Ms. Le had refused to resolve this very issue in her communication with Mr. Kavanagh. Second, Ms. Le supposedly has a law degree, but she has misspelled a word one would expect a legal professional to know: “judgment”. Ms. Le said it was “highly probable” she was pregnant. Pregnancy is a readily detectable condition. A woman attempting to get pregnant might be expected to know her current status. [ 43 ] Beyond that, on Monday Mr.

Kavanagh had testified that Ms. Le had suffered a devastating stroke just several years earlier, which had erased her memory and forced her to re-learn languages. “Her English is about the worst I’ve ever seen in my life.” That was obviously inconsistent with the August 30, 2015 letter. [ 44 ] I believe it is helpful to reproduce Mr. Kavanagh’s explanation which followed when that inconsistency was pointed out. In advance, I observe that when Mr. Kavanagh speaks he does not do so with what I would call an accent. She signed it. She signed and she wrote it. She sent it to me, that’s all I know.

She’s been taking English, she’s - she’s enrolled at the University of Lethbridge. Her English is not perfect and in a situation like this she gets very confused with accents. She - that’s the problem, is everybody speaks different. She may understand me at least 90% but she doesn’t understand anybody else. Just massive confusion. So she does everything in Vietnamese. She’s doing C.A. programs through Vietnamese friends in Toronto, Vancouver and Calgary and she’s on - speaking to them on camera all the time to sort this stuff out but she - this is the problem - she reads reasonably well. I would say well.

She always has a dictionary there, a translator always there but the speaking is a problem. To do a - she had to do exams for entrance, she did them about five times. She took one, two - one, two, three, four, five courses of English for academic purposes at U of A over the few years just to try to grasp. Two she failed totally. Some exams she took, she tried one at NAIT, she tried one as - challenged the exam, I don’t know what it’s called. I don’t forget what - I forget what it’s called for non- English speakers for academic pers - NAIT has one and she did it.

The speaking and read - speaking and listening, that was where she lost everything. ... Ma’am, I have a - sorry, I have a - sometime when that was done, I think about four or five years ago she - I don’t even remember who did that. I have a power of attorney and I should have brought it with me. I know in the box it’s in. Mr. Lister prepared it for me one time, that’s all I remember and I had it signed over in Saigon by the consulate I think - sworn by the Consulate. Some - I don’t recall exactly, but I do have a power of attorney for that. I should have brought it, I should have looked for it.

So I don’t have a problem with - it was - I put her name on this jointly for my - for security if I died. I just didn’t want it to go to my ex-wife automatically. It would be very

difficult to challenge a joint thing. I think that’s what I was told. ... She’s not replying to me. I don’t own her, it’s not 1940. I have a pro - well, I don’t have a problem. She’s been trying to have another child and she think she’s pregnant and she’s had a lot of problems maintaining her pregnancy within the first month or two or three. Very unusual problems. The pregnancy fails. So she won’t allow herself to go do anything - any slight little stress whatsoever. And she has a bad stomach, she’s been hospitalised quite a few times and this is where the problems started five years ago.

The bleeding, then the drugs to stop the bleeding caused blood clots and she doesn’t want to put herself in any position. That’s why she’s not in Edmonton for the past - she had to undergo IV. [ 45 ] Mr. Kavanagh also provided a fascinating explanation for email correspondence that was entered in evidence by Ms. Kavanagh, and generally addressed to her counsel. Mr.

Kavanagh’s explanation, which I will detail further below, is that he did not send this email correspondence, or, when it was sent by others, it had somehow not reached him. [ 46 ] I will start with an example, an email dated July 15, 2010 from “piuskavanagh@gmail.com” titled “my last email.to bohunk runt”: martyn says i should not email you any more. you stupid bohonk. it does not matter who is director to cra enforcement .alberta courts do not matter to cra either, bohunk displayed his angry boy. just cost polock parents $200-300k audit. that should make up for her brothers destruction of house .but mathew with the knife has some answering. next step is files to cra re her son. re his theft.. is this judge really the “typical lesbian” you and olivierei said?????i am appalled as a citizen. if kozicky assists you in coverup., cra and icaa will stop him and then destroy him. its rather nice being married to an auditor who has done work for cra. , will see you sept , and 2 years later in appeals if required is your wifey still going back to german boy for a bit? like old times?terrible having bohunk runt husband, its more about you and me now. you so far cost each of us $250 k in ww refusal to sell.

Total of $150+ tfrefusal to sell, bldg. only god knows, lake property 200k. plus the $1.5 mil your polocks stole. please give this to your stated lesbian. i was surprised, she looked like a hot heterosexual to me i think they should change your nickname, use your wifes” runt” together with bohunk. [sic] [ 47 ] Mr. Kavanagh’s lawyer at the time was Martyn Laurin. This email was sent in the period when Mr. Kavanagh was attempting to block Ms. Kavanagh’s son, John Borowiecki, from recovering Starb debts owed to him. The judge referred to is a member of this Court. [ 48 ] Mr.

Kavanagh also denies that he sent an Oct. 22, 2010 email with the same apparent source address to Ms. Kavanagh’s counsel that has a similar tone, content, and format to the July 15, 2010 communication. The Oct. 22 email threatens to collaborate with banks to have judgments registered against matrimonial properties. It also contains outrageous and racist comments involving other named Alberta judges. I note that Mr. Kavanagh has in fact consented to his debt being registered as writs against the 83 Ave and Lake properties. [ 49 ] A number of other emails were entered into evidence that Mr.

Kavanagh denied ever having seen, or he argued they do not reflect what actually had occurred during events such as the settlement of Mr. Kavanagh’s motor vehicle collision injury action, hearings concerning the sale of the Starb building, shareholder dividends from the matrimonial businesses, Law Society of Alberta complaints concerning counsel for Ms. Kavanagh, and the activities of Ms. Le and her communication with the Canada Revenue Agency concerning alleged fraud by Ms. Kavanagh. [ 50 ] Other emails that Mr. Kavanagh claims to not have authored or to have never seen involve his current wife, Ms. Le.

In a May 20, 2010 email from “piuskavanagh@gmail.com”, which shares the style of the other emails from that account, Mr. Kavanagh explains that Ms. Le is an accountant and expert in Canadian tax law, and that she will be auditing the matrimonial properties and reporting fraud to the Canada Revenue Agency. He describes Ms. Le as “a concerned shareholder.” A July 13, 2010 email (again which Mr. Kavanagh denies writing) stresses Ms. Le is a shareholder in the matrimonial properties and “... she does not agree with sale at this time as well ...”. [ 51 ] A May 23, 2010 email to counsel for Ms.

Kavanagh from “liennetwork@gmail.com”, signed as “Lê Hông Liên”, repeats essentially the same message, that she will audit the matrimonial businesses, but has a decidedly hostile tone: Mr. Kavanagh forwarded your disrespectful email and other conversations with reference to me. Please do not refer to me in a Courtroom or elsewhere as “some woman in Vietnam”. I find your actions quite offensive. I do not recall your name on my alumni list at Yale or Oxford.

I suggest in the future, before you display any further prejudiced ignorance, please review your own genealogical background and your poor reputation among your peers. I recommend you review your code of professional conduct as I will be doing so. In regards to the action you are dealing with, I am not a direct party to that action, and I am not governed by Court orders granted in that action for many obvious reasons. I will remain very involved in the accounting matters of the related corporations to ensure integrity, as

per Canada Income Tax Act , Alberta Business Corporations Act , Matrimonial Property Act of Alberta , guidelines of ICCA, CICA, IFRS, as well as my own professional ethical rules. If you disagree, I suggest you seek relief to have these statutes and guidelines varied to your specifications. You may also seek a Court order to disallow Canada Revenue Agency from accepting criminal tax evasion informant leads from myself and my agents. I recently received related corporate computer images and backup tapes.

Backup tapes are for fiscal years 2007 and previous, which include all computer files later deleted through external ports by your clients, and non-tampered original ledger files. My own audit will now begin. I assure you I will be also auditing and reviewing with Mr. Kozicky on a regular basis. I will not allow a seven figure fraud to simply vanish. If he chooses not follow guidelines and tax law, I will seek separate relief and enforcement, and Canada Revenue Agency will take delivery of my concerns through my assigned Canadian agent. There will be no hesitation. Please govern yourself accordingly.

I am currently on maternity leave in HCMC. My address for service and written formal apologies is: Ms., Lê Hông Liên 15/16 Lê Vãn Huân , P. 13, Q. Tân Binh, HCMC Viêt Nam [ 52 ] Other emails purportedly from Ms. Le to an accountant, Mr. Kozicky, again threaten audits, CRA investigations (“The agency has recently opened a file for this matter.”), allege “gross multiple errors”, and demands compliance with Mr. Kavanagh’s instructions. She warns of “fraudulent ledgers”. [ 53 ] Yet in cross-examination Mr. Kavanagh testified that Ms.

Le never was an accountant, nor had any knowledge of the matrimonial corporations: ... She was not - hasn’t worked as a chartered accountant. Did a CPA back 18 years ago, never worked at it. ... ... She’s never dealt with CRA matters. She couldn’t answer one question on any of these corporations... ... she could not even answer - she could not even give you the name of these corporations. [ 54 ] Another interesting email that Mr. Kavanagh denies was sent on April 25, 2011 from the “piuskavanagh@gmail.com” address and purports to be from Ms. Le, writing on behalf of Mr.

Kavanagh who “... will not be available for a few days due to funeral ...”. I note that this email was sent after Ms. Le had purportedly lost all memory of earlier events and the use of any language. Again, if this email is from Ms. Le (and I will comment later on that possibility), then that too runs contrary to Mr. Kavanagh’s narrative concerning the condition of his current wife. [ 55 ] So how did Mr. Kavanagh explain these many emails that he had either not seen, had not sent, or which could not have come from his wife, Ms. Le? Hackers. Hackers did it. Never seen it before.

Oh, when you look at the date here it co- coincides when - my computer was attacked in the summer of 2013. Including my emails and I would say 90% of the emails related to any legal action was deleted. All the files and documents except down - downloads and 90% of the whole area of probably - Oh my God - five-six years were deleted from there completely. ... Right, I didn’t send it. If you - you remind me there’s something called - I had it on my old phone. Someone gave me it. It’s app that’s called spook.

Spook or spooking that you can take any phone on the - and phone someone and have your number show up on it as if it’s coming from you. As well as with emails. You can just type in an email and - from your address, type in someone else’s name, address, and send it out to someone as if you sent it. It’s called spooking or spoofing because I had this problem two years ago. ... A friend’s son showed me what the - he says everybody’s using these things. It’s a - most of them are just going in and messing up people’s email but some of them are doing criminal stuff and all kinds of things. ...

I’ve had so many [computer viruses] I don’t know what to do. I’ve - we had a lot in 2013. Everything - eventually all our - even our backup data - the backup drive fries, my hard drive dies. Oh my God, everything - everything was attacked. The phones, everything ... in 2013 it was a huge problem. ... oh it was going on for four or five years so we - I switched to an Apple computer trying to - I was told at one time that I wouldn’t have those problems with Apple but it wasn’t so. ... Actually the virus problem started in 2008 but the real serious issue I believe - I don’t - I know we had a real problem in 2013.

I have a block of emails from 2008 to - up to ’13 that I’ve just - everything was wiped out. Anything, any documents but I was having a lot of problems. In fact I still have the computer I had problems with. I’ve never - I’ve re - did something with it and I’ve been afraid to plug it in. I had somebody redo it. I’ve never used it since. I still have it, it’s a very good computer. I brought it to Vietnam, my brother-in-law’s a professor in communications. He did some inspection trying to trace things for me and it was - he says it was Asian - it was Chinese -

stuff originated in China and India, that’s all I know. [ 56 ] It would be overkill to dissect in detail the absurdity of Mr. Kavanagh’s explanation for the various allegedly “spooked” emails received by Ms. Kavanagh’s counsel (and which in many instances were also addressed to Mr.

Kavanagh’s own lawyers). [ 57 ] In V.W.W. v Wasylyshen , 2013 ABQB 327 , 563 AR 281, leave denied 2014 ABCA 121 , 572 AR 235, Manderscheid J was confronted by a vexatious litigant who argued the litigant did not want to pursue a lawsuit, but was nevertheless compelled to do so because, among other things, the vexatious litigant’s dead sister was haunting her and insisted that the lawsuit proceed.

Justice Manderscheid at para 52 concluded that evidence such as this should be tested via a principle that extraordinary claims require extraordinary proof: I have no difficulty concluding that V.W.W. is neither credible nor reliable.

Many of her claims are extraordinary, and do not meet the principle suggested by Marcello Truzzi in "On the Extraordinary: An Attempt at Clarification", (1978) 1 Zetetic Scholar 11 at 11, and subsequently popularized by scientist Carl Sagan, that "[a]n extraordinary claim requires extraordinary proof." V.W.W.'s allegations of conspiracy, murder, counterfeiting, poisoning attempts, and supernatural contact obviously fall within this category. [ 58 ] Mr.

Kavanagh’s hearsay evidence from an unnamed Vietnamese brother-in-law, who just happens to be a professor with skills in hacker tracing, does not satisfy the “extraordinary proof” threshold, or, for that matter, any threshold. The fact that Mr. Kavanagh was willing to take the stand and argue that Chinese hackers had seized control of his computer for the purpose of sending his ex-wife’s lawyer emails that call the lawyer a “bohunk runt” pretty much sums it up concerning Mr.

Kavanagh and his credibility. [ 59 ] I find as fact that any email which originated from the “piuskavanagh@gmail.com” account was written by Pius Kavanagh, and not authored and “spooked” by Chinese hackers. I find as fact that, when Mr. Kavanagh says he did not receive an email or had not seen a document that plausibly would have come to his attention, such as any disclosed litigation material, Mr. Kavanagh was indeed aware of those items. [ 60 ] As for the emails from Ms. Le, they pose more of an issue. I think it is entirely plausible that the communications that allegedly came from Ms.

Le were, instead, written and sent by Mr. Kavanagh personally. [ 61 ] I made it extremely clear to Mr. Kavanagh that lying in court has consequences. I had inquired as the trial proceeded as to whether Mr. Kavanagh realized he was giving evidence under oath. On the Wednesday when Ms. Le was scheduled to appear, but did not, I had the following conversation with Mr. Kavanagh about perjury: Q. ... I would like to again reiterate something I said to you before but which I am going to make it stronger. You must be careful about your testimony.

You must carefully listen to the questions and reflect on your answer. [Counsel for Ms. Kavanagh] began today asking you if knew what perjury was. A. Yes. Q. You understand that perjury is lying under oath and that you are currently under oath and have been... A. Yes I do. Q. ... the entire time you have been on the stand. Perjury is a Criminal Code offense... A. Yes. Q. ... and is punishable by up to 14 years in gaol. I just want you to confirm you understand that. A. Yes, I understand. [ 62 ] It is obvious that Mr. Kavanagh says many things that are false.

There are times when witnesses say things that are clearly not true, but it is clear that they believe what they are saying (for any number of reasons). This is not the case here. Mr. Kavanagh contradicted himself on numerous occasions. He gave self-serving evidence that was clearly not capable of belief. I have no difficulty finding that he lied deliberately on several occasions during this trial. Perhaps some of what he said was true. But, it would be almost impossible to sort that from the lies, without corroborating evidence (which was in short supply from him).

Sometimes I received evidence from another source, and then I had a basis to make a finding of fact or draw a logical and probable inference. However, the place where that is the greatest concern is in relation to Ms. Le. I will return to that subject later. IV. Mr. Kavanagh’s Litigation Strategies [ 63 ] I will now take the unusual step of evaluating Mr. Kavanagh’s overall litigation approach, which in legal terminology is called “vexatious”.

The term “vexatious” captures a number of kinds of litigation conduct: 1. persons who engage in persistent and futile litigation as a consequence of their having a specific psychiatric condition, “querulousness” (Paul E.

Mullen and Grant Lester, “Vexatious Litigants and Unusually Persistent Complainants and Petitioners: From Querulous Paranoia to Querulous Behaviour” (2006), 24 Behavioral Sciences and the Law 333; Grant Lester, et al , “Unusually persistent complainants” (2004), 184 British Journal of Psychiatry 35, for example McMeekin v Alberta (Attorney General) , 2012 ABQB 456 , 543 AR 132; McMeekin v Alberta (Attorney General) , 2012 ABQB 625 , 543 AR 11); 2. individuals who are affected with mental health issues that leads them to engage in litigation because of their altered perceptions or delusions (for example Re FJR (Dependent Adult) , 2015 ABQB 112 ; Koerner v Capital Health Authority , 2011 ABQB 191 , 506 AR 113, affirmed 2011 ABCA 289 );

3. litigants who have become obsessed with a single issue that they perceive as a critical interest and on which they re-litigate aggressively, a situation that occurs with disturbing frequency in family law litigation scenarios; 4. persons who litigate on the basis of false but allegedly legal principles which are intended to subvert correct legal principles and procedures, generally known as “Organized Pseudolegal Commercial Argument” litigants ( Meads v Meads , 2012 ABQB 571 , 543 AR 215); and 5. people who out of malice attempt to harm others by conducting litigation without a valid basis or attempt to frustrate valid legal action and steps (for example Lymer (Re) , 2014 ABQB 696 ; 644036 Alberta Ltd v Morbank Financial Inc , 2014 ABQB 681 ). [ 64 ] What unites these subcategories is their effect.

All misuse legal procedure in a manner that has no valid purpose, and, as a consequence, causes harm to involved litigants and the waste of court resources. While non-legal dictionary

definitions of “vexatious” focus on

an act being wrongful, harassing, malicious, or intended to annoy, the legal meaning is this word is broader. A vexatious proceeding is one that in effect abuses or misuses legal processes. [ 65 ] The common law and Canadian court Rules provide a number of tools to manage problematic litigation, including Rules to strike out pleadings ( Rule 3.68) or order

summary judgment ( Rule 7.3), restrictions on filing or continuing litigation ( Judicature Act , RSA 2000, c J-2, s 23.1), and a broad common law authority of the superior courts to control their own processes, for example: Peddle v Alberta Treasury Branches , 2004 ABQB 608 . [ 66 ] Recently in Chutskoff v Bonora , 2014 ABQB 389 at paras 80-93 , 590 AR 288, affirmed 2014 ABCA 444 , 588 AR 303), Justice Michalyshyn reviewed the principles and factors on which a court tests whether a person is a vexatious litigant: 1. the entire history of a dispute, including activities both inside and outside court; 2. other litigation and court history is relevant; 3. a person is presumed to intend the natural consequences of their acts; and 4. features and traits of vexatious litigation, which include:

a) collateral attacks on previous judicial decision-making, including attempts to circumvent the effects of court orders;

b) hopeless proceedings that cannot be expected to provide the form or scale of relief sought, involve disproportionate remedies and/or cost claims, or that are incomprehensible;

c) escalating proceedings, where grounds and issues re-appear in subsequent litigation, and/or new parties, subjects, and issues are added;

d) proceedings with an improper purposes, such as to frustrate litigation, for an ulterior motive or to obtain a collateral advantage, or which are intended to extort a benefit, as revenge, harassment, or to cause harm; e) “busybody” lawsuits that relate to third parties;

f) failure to abide by court orders;

g) spurious appeals;

h) inappropriate courtroom behaviour;

i) unsubstantiated allegations of conspiracy, fraud, and misconduct, including allegations of bias, harassment, and offensive and defamatory allegations;

j) scandalous or inflammatory language in pleadings or before the court;

l) OPCA arguments; and

m) attempts to use court processes to further criminal activity ( Re Boisjoli , 2015 ABQB 629 at para 98-103 ). [ 67 ] Mr. Kavanagh in the present and past litigation engaged in many activities that are characteristic of vexatious litigation. A. Failure to Appear at Trial [ 68 ] An ongoing theme was Mr. Kavanagh’s attempts to block progress of this litigation without proper purposes. That led to the very inauspicious start to the trial that was, unfortunately, an accurate harbinger of what was to come. [ 69 ] Mr. Kavanagh did not appear at the first scheduled date, Monday Aug. 31, 2015.

He had a week earlier applied for an adjournment, but that was denied by Goss J. Instead, former counsel for Mr. Kavanagh, Adam Campbell, appeared to inform the court that Mr. Kavanagh was hospitalized and in the care of a psychiatrist, Dr. Jason Long. According to Ms. Kavanagh’s counsel, he had met Mr. Kavanagh the Friday before the Monday on which the hearing started. Mr. Kavanagh at that point indicated there would be no trial because a doctor would deal with it. [ 70 ] Dr. Long appeared by telephone, and explained that Mr. Kavanagh had made an emergency appointment with him the week before concerning anxiety.

This was their first contact for two years. Mr. Kavanagh reported to Dr. Long that he was depressed, suffering

from chronic pain, was drinking heavily, and was contemplating suicide by carbon monoxide poisoning. Mr. Kavanagh was subsequently admitted to the Misericordia Hospital. [ 71 ] Questioning of Dr. Long revealed several additional points. First, Mr. Kavanagh had not disclosed prior unsuccessful attempts to delay the matrimonial property trial. Mr. Kavanagh also did not tell Dr. Long that he had recently fired his lawyers, but instead had explained that he was now facing trial without a lawyer because his previous lawyer was sick, or had “somehow dropped the ball”. Dr. Long had relied on Mr.

Kavanagh’s testimony concerning his alcohol consumption and mental state, and other circumstances. Dr. Long had had no contact with Mr. Kavanagh for several years until the emergency appointment the week before the trial commenced. [ 72 ] I refused to adjourn the trial and concluded that Mr. Kavanagh, having been unsuccessful in his other attempts, had sought to be committed to mental health care as a mechanism to avoid the matrimonial trial. I concluded Mr. Kavanagh had “outright lied about certain things to Dr.

Long.” [ 73 ] Therefore, on the morning of the first day of trial, I ordered this trial proceed in Mr. Kavanagh’s absence, and then adjourned until the afternoon. [ 74 ] At that point Mr. Kavanagh did appear. B. Delay and Ambush [ 75 ] As I have noted, the psychiatric episode is part of a broader phenomenon. Mr. Kavanagh followed a pattern of delay. He has gone through a number of lawyers. In relation to this trial, he unsuccessfully applied for an adjournment a week prior to the hearing.

When that was denied by Goss J, he tried on multiple occasions to arrange for another adjournment hearing with the Queen’s Bench trial coordinators, but he did not disclose the unsuccessful Goss J application. Earlier trial dates had been lost when Mr. Kavanagh’s counsel would not sign court forms. Nevertheless, Mr. Kavanagh argues he was never at fault for that: “I was very pushful on getting this trial. I wanted this done years ago.” I also accept counsel for Ms. Kavanagh’s submissions that, while Mr. Kavanagh was represented, the lawyers managed to nearly negotiate a resolution to the division of property. Mr.

Kavanagh then fired his lawyers. [ 76 ] At trial, Mr. Kavanagh went further, and claimed not only that his lawyers had acted without his instructions, they had released trust funds without authorization: ... This man, Harold [indiscernible] Hinz, I don’t know anything - nothing about it. I’m caught off guard. I was quite shocked. I brought this up to some people a few days ago, and they were totally shocked as well to someone dealing with trust funds like this without authorization. [ 77 ] When I inquired if Mr.

Kavanagh realized that he had made an extremely serious allegation of lawyer misconduct, and had done so under oath, he confirmed that he did. I then ordered that transcripts for Aug. 31, 2015 be provided to Mr. Kavanagh’s former lawyers who were the target of these allegations. Mr. Kavanagh had also previously reported counsel for Ms. Kavanagh to the Law Society of Alberta for allegedly having done the same thing. [ 78 ] Another disturbing event was the late appearance of records that I conclude Mr. Kavanagh had concealed on purpose. Mr.

Kavanagh provided for the first time at trial bank credit card records, though he had undertaken to provide those many years earlier, in 2009-2010. His explanation for the delay was that these records were in some manner locked by “litigation”: ... He asked me to look up - he didn’t ask for the records. To inquire with the companies can they provide me. They wouldn’t provide the - it was all in litigation, so they wouldn’t respond to me. One company says it’s at a collection, and they - I phoned them. They wouldn’t supply anything unless - if you pay the bill, they’ll arrange it.

A law firm in - C - WCB said wouldn’t - said it’s a special collection or a special thing, and I asked for them. They wouldn’t supply them. ... [ 79 ] Mr. Kavanagh then claimed these new documents indicated matrimonial debts he had incurred at the time of separation. He said he had disclosed this information to his lawyers many times. His concluded that apparently the lawyers had not forwarded the documents to Ms. Kavanagh. However, then Mr. Kavanagh indicated that his last law firm had advised Mr. Kavanagh that he was free to bring this evidence to the trial, no matter its history. I questioned Mr.

Kavanagh at some length about his claim that his lawyer at the time, an experienced litigator, would say Mr. Kavanagh was not subject to the usual rules of disclosure. I inquired further: The Court: If Mr. Skovberg was asked to come in here and testify, do you think he would be telling me that he told you you could show up and just provide anything that you wanted? Mr. Kavanagh: I have no idea. [ 80 ] Mr. Kavanagh emphasized he had disclosed this information to his lawyers. Counsel for Ms. Kavanagh stressed he had repeatedly sought this exact information, but never received it. Counsel for Ms.

Kavanagh subsequently indicated he had repeatedly sought this information and had not received the material presented at trial by Mr. Kavanagh. I accepted this was correct. Mr. Kavanagh then provided yet another explanation for the new documents: Okay. Yes. Yes. I think I put them together at some time and totally forgot because I was looking for the actual photo - bills. Which I didn’t have. Not - forgetting that I had made photocopies back in 2006 and then again in 2008. And I kept looking for the actual statements. And the bookkeeper had everything and - but I did get from her and photocopy specific times.

Separation and then in June or July of 2008 I did photocopy those but then forgot about it, assumed I had the actual statements. I didn’t think the statements - that’s where - and it caused the trouble. I couldn’t find anything. I don’t know if I put it - I didn’t remember bringing something in as undertakings. I don’t remember what. I know it was credit card statements. That’s all I know. ... I assumed I have the actual credit card - this was just stored as extra papers. Without giving a through till oh, god. I think it was just

past January that I was throwing out portions and I went through and I found these - the photocopies. [ 81 ] This led to an extended discussion where Mr. Kavanagh alternatively claimed he had forgotten about the billing information he possessed, or that he did not understand that he had an obligation as an undertaking to locate and produce long overdue disclosure items. Mr. Kavanagh’s explanation was “I wasn’t advised of that. I wasn’t advised of that.”, though he was physically present during the relevant discussions between counsel. [ 82 ] I exclude Mr. Kavanagh’s late evidence of these credit card debts.

This was litigation by ambush. I find Mr. Kavanagh did not meet his disclosure requirements and that is another part of his vexatious litigation pattern. The late claims of Mr. Kavanagh’s matrimonial debt will not be considered in the matrimonial property division calculation. C. Collateral Attack [ 83 ] Mr. Kavanagh engaged in collateral attacks on previous litigation subjects, including: 1. He attempted to enter documents from the adjournment proceeding before Justice Goss. He claimed these show Ms. Kavanagh had not responded to undertakings. 2.

He attempted to enter transcripts and re-argue issues from the hearings before Justice Crighton. 3. He argued issues that would have re-opened the oppression action decided by Justice Lefsrud. [ 84 ] Mr. Kavanagh engaged in escalating proceedings, including adding allegations of fraud that were not pled in the Statement of Claim. At trial, for the first time he sought spousal support. When challenged that this was not in his Statement of Claim (though that remedy was sought but not pursued by Ms. Kavanagh), Mr. Kavanagh assured the Court that his lawyer had filed an amended pleading with that claim.

Unsurprisingly, there is no such document on the record. D. Litigation for Inappropriate Purposes [ 85 ] Litigation for improper purposes includes both initiating and conducting litigation without a valid purpose, or taking steps to block or frustrate legitimate litigation processes. Mr. Kavanagh engaged in both these forms of abuse of process. [ 86 ] My review of this action makes it difficult in retrospect to view Mr.

Kavanagh’s actions in relation to the matrimonial businesses, his litigation in this matter, and the related oppression and debt collection efforts, as anything other than a malicious campaign to harm his ex-wife and her relatives. [ 87 ] What is particularly notable and troubling about Mr. Kavanagh’s actions is his willingness to injure himself in this process. For example, his sabotage of the matrimonial businesses and their liquidation affected him financially as much as it did his wife.

He was half owner, but nevertheless was willing to engage in extraordinary steps that negatively affected the matrimonial businesses, apparently out of malice to his now ex-wife. [ 88 ] This campaign continued after the couple separated. I find as fact that Mr. Kavanagh encumbered the 83 Ave and Lake properties with the intention of complicating this action. The same is true for why he put Ms. Le on joint title. I reject Mr. Kavanagh’s explanations for Ms. Le’s failure to appear in the trial. What I do not know is whether Ms. Le is complicit in Mr.

Kavanagh’s schemes, or whether those have been concealed from her. E. Disobeying Court Orders [ 89 ] It appears that Mr. Kavanagh has either disobeyed or circumvented court orders. This occurred in the action before Crighton J, where she ordered Mr. Kavanagh to cease communicating with the CRA. At the time Mr. Kavanagh was informing the CRA that the matrimonial businesses had not filed their tax information correctly because of Ms. Kavanagh’s alleged misconduct. This is a prominent subject of the “bohunk runt” emails sent by Mr. Kavanagh. [ 90 ] After Crighton J ordered Mr.

Kavanagh to stop communicating with the CRA, Ms. Le stepped into the breach. A number of email communications apparently authored by Ms. Le were sent to involved parties and counsel. These emails indicated Ms. Le would not follow the Court’s instructions because she considered that she was not bound by that. As I have previously noted, there is a possibility these emails were not sent by Ms. Le at all and instead this was Mr. Kavanagh. [ 91 ] In any case, Mr. Kavanagh indicated at trial that he not did believe he was bound by Justice Crighton’s instructions and the Court’s order.

He said he had contacted someone at the CRA who informed Mr. Kavanagh that the Queen’s Bench order was not legal. As often is the case, Mr. Kavanagh’s explanation and recollection became very vague once I and counsel for Ms. Kavanagh began to probe into the details of events: ... I did recall contacting CRA to ask them if a court of this type could - could make an order like that. They said no. They put me onto someone else. They said no. It requires a federal court. Whatever a federal court is. They said it would have to strike down a portion of - or all the Income Tax Act to allow this. ...

Oh, I remember - I don’t recall - I remember contacting the CRA and asking them about a director of a corporation to report things and I said there was a court order made that I’m not supposed to talk to CRA and they said that can’t be valid. Because Income Tax files under Canadian - I don’t know what they were talking - it flew over my head but they said don’t worry about it. It - it can’t be valid. It’s not - it’s not a valid - it can’t be a valid order and it can’t - I don’t remember the courts. I keep thinking federal court.

They said that requires a federal court. ... or now they Queen’s Bench which they call ... Superior Court.

[ 92 ] Mr. Kavanagh’s confusion becomes even more peculiar when one considers he at another time explained that he, like his wife, is a trained accountant: I’m a member of the Association of Chartered Certified - chartered accountants association. I’m accredited, so I have an extra interest in the filings. I finished every requirement of my designation, but I - my shoulders were so bad, I couldn’t work - ever work at it. I - so I stopped. ... [ 93 ] As with many other things said by Mr. Kavanagh, I think this explanation speaks for itself. Unsurprisingly, Mr. Kavanagh had no evidence to substantiate his claims.

F. Unsubstantiated Allegations of Conspiracy, Fraud, and Misconduct [ 94 ] Another characteristic of vexatious litigation is that Mr. Kavanagh engaged in many allegations of conspiracy, fraud, and misconduct that were not supported by evidence. I have previously described several examples, such as the allegations directed at his former lawyers, and his ongoing persecution and “spooking” by Chinese hackers. Mr. Kavanagh alleged fraud, though that was not pled, and was not substantiated at trial. [ 95 ] There were others. One was that his wife, Ms. Le, and her children had been targeted for intimidation, or worse.

Mr. Kavanagh testified Ms. Le had been intimidated and twice had to flee Canada for her safety. The children were threatened too. [ 96 ] This concern re-appeared when counsel for Ms. Kavanagh asked about Mr. Kavanagh’s children with Ms. Le. What were names and ages? Mr. Kavanagh refused to answer: I cannot answer that because of security. I’m sorry but my wife was assaulted by his client. She’s been stalked. My son’s school has been stalked on a regular basis. I had the police involved and they advised me to not give any information on those children whatsoever to anybody.

And - and I promised my wife I would never do it either. Because with that - with - if I give the dates of birth or their true legal names, there’s going to be some people in this room would be making a lot of trouble for me using them. Presumably the “people in this room” were Ms. Kavanagh and her children. [ 97 ] Unlike Ms. Kavanagh who produced criminal prosecution documents, Mr. Kavanagh had no evidence to support his bald allegations. Similarly, I reject Mr. Kavanagh’s allegations that counsel for Ms. Kavanagh had attempted and/or promised to sabotage Mr. Kavanagh’s adoption of a son from Vietnam. G.

Conclusion [ 98 ] Usually a court evaluates litigant conduct to see if it is vexatious as a step to terminate or limit litigation conducted for a bad purpose, or after a trial when the court considers what kind of cost award should be made to the successful party. Here, I have taken the unusual step of evaluating Mr. Kavanagh’s litigation as a precursor to the remainder of the judgment and analysis. The reason I have taken this approach is because, as the judgment develops, I will take somewhat unusual steps and alternatives in how I order the division of property. [ 99 ] In light of Mr.

Kavanagh’s pattern of bad litigation conduct, I will chose alternatives that protect Ms. Kavanagh and other potentially affected parties. I developed an appreciation that, when it comes to causing harm to Ms. Kavanagh and her family, Mr. Kavanagh shows an impressive capacity to take disruptive and harmful steps. This means that, when there is a simple or standard solution to an issue, I have sometimes taken a different approach to ensure this litigation is concluded, and concluded fairly to all. V. The Ms. Le Conundrum [ 100 ] Ms. Le is a wrench in the mechanism of this trial decision.

I am confronted by a number of objectives that are at cross-purposes. One is that I end this litigation in a timely manner so that Ms. Kavanagh can go on with her life, have access to her fair share of the matrimonial property, and not have to deal with Mr. Kavanagh again. The last part of that objective has a special significance because I have concluded that Mr. Kavanagh has litigated in a vexatious manner, and, unfortunately, that he has conducted a quite remarkably effective campaign that has misused this Court to injure his ex-spouse and her family.

The time has come for that to end. [ 101 ] The other issue is Ms. Le. Perhaps she is a skilled international businesswoman with high-ranking connections in the Asian continent. Perhaps she is a brain-injured mother-to-be. I have previously observed that the correspondence to the Court and others from Ms. Le may be entirely fabricated. Mr. Kavanagh’s descriptions of his wife and her motivations shift like the wind. [ 102 ] Ms. Le was ordered to appear at trial. She did not. I have already reviewed the events surrounding that. On Sept. 4, 2015 I ordered that Ms.

Le appear at a Sept. 18, 2015 hearing to explain her apparent contempt of court. Ms. Le again did not appear. Counsel for Ms. Kavanagh could not confirm service on Ms. Le. I was at that time not willing to order Ms. Le’s arrest, given the possibility this matrimonial property action was concealed from her by Mr. Kavanagh. [ 103 ] On one hand, some of Ms. Le’s correspondence indicates she considers herself deeply involved in Mr. Kavanagh’s legal disputes with his ex-wife as a shareholder in the matrimonial businesses. But at the trial, Mr. Kavanagh was emphatic that Ms.

Le had not paid for her interest in the matrimonial corporation shares and real properties: ... She didn’t pay me. I did indicate that she was quite helpful to me with the business at one time. From a long distance. Helping in Asian things.

[ 104 ] He then denied that he had transferred ownership in those properties to Ms. Le: Q. ... my understanding as well is that you caused to be transferred to your wife an interest in your corporations. A. No. There was no transfer. Q. What did you do? A. I put her on joint ownership with me. In case of my - in case I died. Q. I don’t understand that sir. How did you put somebody on joint ownership of a share certificate or a share ownership certificate without causing there to be a transfer? A. There’s not a transfer. Nothing changed. Q. What do you mean nothing changed? A. I’m still owner. Joint owner.

We - it’s the same thing. There’s no value change. Nothing’s really changed hands. [ 105 ] Mr. Kavanagh now testifies his wife has no interest in or knowledge of those properties whatsoever - “she could not even give you the name of these corporations” - and says Ms. Le’s potential interest in the matrimonial business and real properties should be ignored. His proof is a letter from his wife (which, as I noted, appeared late in the trial), and a Power of Attorney that Mr. Kavanagh ultimately produced and which he argues gives him the right to act on his wife’s behalf in her absence. [ 106 ] Mr.

Kavanagh also seemed curiously unaffected by the prospect of his wife facing arrest or contempt proceedings for her failure to appear at the matrimonial property trial. By his account, his wife was at a vulnerable stage in a pregnancy. [ 107 ] It occurs to me that it is quite possible, and indeed is probable, that Ms. Le has little or no knowledge of the matrimonial property litigation and the trial that she did not attend. I think it is entirely possible that Mr. Kavanagh has concealed the court summons from her and intercepted her email (if indeed any correspondence from those accounts was from Ms. Le at all).

When asked to provide a telephone number to reach Ms. Le, allegedly then staying with a friend in Calgary, Mr. Kavanagh could offer nothing. It is strange that a husband cannot provide that kind of information. [ 108 ] I think Mr. Kavanagh would very much prefer Ms. Le not have any contact with the Court. This raises the interesting question of what we would learn if Ms. Le were to appear. A plausible explanation for that is that Mr. Kavanagh is planning to cheat his wife of her legal interest in the matrimonial properties.

He asks the Court to simply allocate to him property interests that are formally in his wife’s name (the 83 Ave and Lake properties) and the purported joint matrimonial corporation share interests. He says it never really was hers anyway. [ 109 ] Another plausible alternative is that Mr. Kavanagh intends to use Ms. Le as a mechanism to once more disrupt this matrimonial property division process, so that if I were to simply divide the property as proposed by Mr. Kavanagh, then Ms.

Le would subsequently appear and challenge that outcome, arguing that her property interests and legal rights have been ignored. [ 110 ] Mr. Kavanagh is a liar and litigates in a vexatious manner. He is not an appropriate agent for Ms. Le. I therefore refuse to permit Mr. Kavanagh to act as Ms. Le’s agent, though he is (apparently) authorized to make decisions on her behalf by the Power of Attorney that was presented to the Court. I have no confidence in that document for the reasons I have previously explained. [ 111 ] So how does the Court protect Ms.

Le from the potential abuse by her husband, but also bring this litigation to a close? I believe these competing interests can generally be addressed by dividing the matrimonial property into three parts: 1. Ms. Kavanagh’s half share, 2. Mr. Kavanagh’s half share, less, 3. property interests transferred by Mr. Kavanagh into joint title with Ms. Le. [ 112 ] As I have previously explained, I am not satisfied that Ms. Le’s intentions in relation to her interests in the matrimonial property have been established by the letter that was (purportedly) sent by her and dated Aug. 29, 2015. Since Mr.

Kavanagh is an unreliable person with a history of engaging in improper conduct, I believe the best way to preserve Ms. Le’s potential interests is to take the potential fraction of the property, separate it, and have it paid into Court and held in trust until Ms. Le’s status and intent is clarified. That means I will not order the release of Ms. Le’s potential portion of the matrimonial property to Mr. Kavanagh, or anyone else, until Ms.

Le personally appears before me to advise on her status and intentions regarding the property interests that were transferred into her name. [ 113 ] With these preliminary steps complete, I move to evaluating the matrimonial property assets and debts, and the division of the property. VI. The Parties Positions A. Mr. Kavanagh [ 114 ] Mr. Kavanagh presented a suggested division of property:

• Ms. Kavanagh has the 63 Ave property as an exempt property, the Lake property as matrimonial property, and be credited for the associated post-marriage upkeep costs; • Mr. Kavanagh would receive the 83 Ave property, and Ms. Kavanagh is credited for the associated post-marriage upkeep costs; • the Wedding World, Starb, and Tamfor corporations would be liquidated and dissolved, with tax administration steps conducted by Ms. Kavanagh’s accountant and paid from the corporate resources, with proceeds then distributed by to the owners (him and Ms. Kavanagh, but not Ms.

Le); and • all other debts and assets are attributed to the relevant party. [ 115 ] Mr. Kavanagh testified that his ex-wife had engaged in many poorly or undocumented financial dealings with the matrimonial residences and businesses. He characterizes these transactions as ranging from mysterious, to attempts to benefit her children at his expense, to fraudulent. In the last category he stresses Ms.

Kavanagh: • claimed that income tax records indicate income from 83 Ave rental property, which is false; • claimed income from the 63 Ave residence, in 2006 - but the Kavanaghs were living in that location at the time; and • two cheques had same number, which must be fraud, and part of larger irregularities concerning credit card debts; other cheques are missing bank notations that Mr. Kavanagh argues are significant and indicate fraud as certain cheques advanced by Ms. Kavanagh were fake. [ 116 ] Other examples of alleged misconduct include that Ms. Kavanagh changed Mr.

Kavanagh’s CRA correspondence address so he did not receive or have copies of his own tax returns. Similar things allegedly happened to his bank accounts, line of credit, and credit cards. Ms. Kavanagh has all the matrimonial financial records, and picks and chooses what she released for her own benefit. [ 117 ] Mr. Kavanagh indicated he deserves a larger share of the residential properties because of his efforts to build, improve and maintain those properties.

For example, he argues the property he currently occupies, the 63 Ave residence, is a “money pit” with many issues, and that he has engaged in large-scale efforts to keep that property livable. This is a counterweight to any contribution by Ms. Kavanagh to the property’s mortgage, tax, and other expenses. [ 118 ] Another complaint by Mr. Kavanagh is that his former law firm had without his consent entered into an agreement that he should pay occupation rent for the 63 Ave residence. Mr.

Kavanagh explained he had never met the lawyer who had purportedly represented him in this discussion: “I never met the man in my life.” He also maintained that this lawyer was also in a conflict of interest. [ 119 ] Mr. Kavanagh acknowledged that Ms. Kavanagh had an interest in the 63 Ave property, but many of her debts were incurred post-separation and should not be attributed to him. He is not responsible for Ms. Kavanagh paying rent for living in a property owned by her father, and other obligations to her family members.

Those were either living expenses, gifts, future inheritances, or are inadequately documented. [ 120 ] Other concerns include that Ms. Kavanagh should be made accountable for a decrease in the assessed value of the Lake property. Mr. Kavanagh says it was her fault the property is in their names, he would have sold it long ago. The net result, in his submission, is he should receive half the $175,000.00 decrease in value. B. Ms. Kavanagh [ 121 ] Counsel for Ms. Kavanagh argued that the situation at present is relatively simple.

The parties’ remaining undivided matrimonial property assets were the three matrimonial residences and the funds held by the now inactive matrimonial corporations. [ 122 ] An ancillary issue is exactly how to manage distribution of the companies co-owned by the Kavanaghs. Ms. Kavanagh submits that court intervention is necessary, given that the operation of these corporations has been paralyzed by Mr. Kavanagh’s refusal to cooperate. Ms. Kavanagh asks that she be authorized to wind up the businesses and address outstanding related matters. [ 123 ] Ms.

Kavanagh had incurred significant debts prior to and after their separation that are documented in her credit card evidence. She borrowed money from her relatives, and has large outstanding debts owed to her father (now his estate) and mother. Ms. Kavanagh expects to pay those outstanding debts from the distribution of the matrimonial property. [ 124 ] Ms. Kavanagh submits these should be considered matrimonial debt and therefore be factored into the matrimonial property division. As for Mr. Kavanagh’s matrimonial debt, Ms.

Kavanagh takes the position that the evidence before the Court is questionable at best. [ 125 ] Ms. Kavanagh offers a proposed distribution scheme that identifies the relevant property and how it should be divided between her and Mr. Kavanagh. [ 126 ] Ms. Kavanagh responded to Mr. Kavanagh’s allegations of fraud concerning the 63 Ave and 83 Ave residences. The 2006 tax information that income had been generated from the 63 Ave property was the result of an error by the accountant who had prepared the tax record; the accountant had mistakenly used the wrong address, which should have been for the 83 Ave residence.

This error was subsequently rectified. Second, Mr. Kavanagh’s complaint that Ms. Kavanagh has failed to report income in relation to the 83 Ave Residence is due to him not understanding that calculation of income from that property for the purposes of income tax does not include repayment on principal, so on a net basis the 83 Ave property does not generate income, but may accumulate equity. [ 127 ] Ms. Kavanagh had no clear explanation for the two cheques marked with the same number, but in any case these did not result in any deceitful or illegal movement or transfer of funds.

Both cheques were returned by the bank, because the source account did not

have sufficient funds. [ 128 ] In

summary, in relation to matrimonial property, Ms. Kavanagh’s position is that between the point where the couple cohabited and married there was no substantial shift in equities. Ms. Kavanagh acquired Wedding World in this period, but that was balanced by borrowing from relatives and against her properties. The 63 Ave residence was her property before, throughout, and after the marriage. The Acreage was sold during the marriage and the proceeds essentially consumed. The Lake Property was acquired during the marriage. The 83 Ave property was acquired during the marriage as well, but it was financed by Ms.

Kavanagh or by loans to Ms. Kavanagh. During the marriage, the couple acquired two companies, Tamfor and Starb. A reorganization of Tamfor led to Ms. Kavanagh’s son acquiring an interest in the property, but because of the share structure, any real value from Tamfor still belonged to the Kavanaghs, 50/50%. [ 129 ] Between the date of separation and 2008, the matrimonial businesses paid the mortgages and other requirements of the couple. That changed with the conflict around Wedding World and, from that point onward, Ms.

Kavanagh was forced to cover the costs of the matrimonial property, including mortgages and other costs, on her own. This means the post-separation debt she accumulated is a consequence of the marriage and the interference by Mr. Kavanagh. [ 130 ] The dispute concerning the corporate properties ultimately resolved with all of Mr. Kavanagh’s applications being dismissed, and the physical property of each was liquidated. VII. The Real Properties [ 131 ] The three real properties fall into two subcategories, • the 63 Ave property which is owned by Ms.

Kavanagh and her three children, but subject to a lis pendens filed by Mr. Kavanagh, and • and the 83 Ave and Lake property, which are 50% owned by Ms. Kavanagh and 50% by Mr. Kavanagh and Ms. Le (joint owners), and subject to a the Bank of Montreal writ for over $32,000.00. [ 132 ] The parties agree to the valuation of these properties, and there is no dispute that Ms.

Kavanagh has been responsible for the costs associated with all three properties. [ 133 ] Property acquired during a marriage is presumptively divided equally between the parties, unless doing so is not just and equitable: Matrimonial Property Act , RSA 2000, c M-8, s 7(4) [“ MPA ”]. Many factors are potentially relevant to that question: MPA , s 8. The Court has a very broad authority to make orders to effect property division. [ 134 ] As a finding of fact, I accept the calculations of counsel for Ms. Kavanagh on the equitable interests in all three properties, and his calculations of the costs incurred by Ms.

Kavanagh to maintain these properties, pay taxes, mortgages, and other expenses. I reject Mr. Kavanagh’s unsubstantiated evidence that the 63 Ave property that he occupies is a “money pit” and that he therefore should have an enhanced interest in it, per MPA , ss 7(4), 8. [ 135 ] The conventional solution would be to order Mr. Kavanagh to leave the 63 Ave property, which is not his in any case, and to order the sale of the 83 Ave and Lake properties. The proceeds of the latter sales would then be part of the pool of funds for distribution. In that model Ms. Le’s and Mr.

Kavanagh’s fraction of the liquidated matrimonial resources would then be the subject for distribution to Mr. Kavanagh’s creditor, the Bank of Montreal, and between Mr. Kavanagh and Ms. Le. [ 136 ] I am not going to order that for a number of reasons. First, I am troubled by the possibility that Mr. Kavanagh will find some way to engage in mischief concerning the 63 Ave property which he occupies. I have, sadly, come to understand his ability to interfere in and frustrate the rights of others. It is simpler to leave him where he is, even though the fact he occupies the 63 Ave property at all is only because Ms.

Kavanagh fled from her home due to Mr. Kavanagh’s violent behaviour. I order that title to the 63 Ave property be transferred to Mr. Kavanagh and that Mr. Kavanagh assume the mortgage on that property. Ms. Kavanagh and the other three joint owners will receive the fair market value of the property, less the outstanding mortgage, which I believe will be about $260,000.00, which will be paid from the matrimonial resources. The expenses incurred by Ms. Kavanagh to preserve this property will be addressed as proposed by Ms. Kavanagh’s counsel and considered to be matrimonial debts. [ 137 ] Similarly, I order that Mr.

Kavanagh and Ms. Le sell their interest in the 83 Ave and Lake properties to Ms. Kavanagh. Title to the 83 Ave and Lake properties will be transferred to Ms. Kavanagh, along with the associated mortgages. [ 138 ] The reason I have ordered the purchase of that interest by Ms. Kavanagh, instead of a court-ordered sale pursuant to MPA , s 9(2)(b), is that I conclude that in the present economic situation a court-ordered sale would lead to a poor return on these properties. This is a particular concern for the unfinished Lake property. Ms. Kavanagh has indicated she is willing to take that property, Mr.

Kavanagh has stated he only wanted cash for his interest in the Lake property, and a transfer between the ex-spouses therefore meets all these objectives. [ 139 ] Again, Ms. Kavanagh’s expenses to maintain these properties are post-separation matrimonial debt. [ 140 ] I conclude that Ms.

Le’s legal and possible equitable interest in the 83 Ave and Lake properties is one that is subject to my authority on the basis that the MPA , s h(ii) permits the Court to consider “that a spouse has made ... a transfer of property to a third party other than a bona fide purchaser for value.” No evidence (no matter how suspect) has been advanced that Ms. Le is a bona fide purchaser for value. Second, the transfer by Mr. Kavanagh of his interests into a joint title with Ms. Le and his subsequent litigation strategy has dissipated the value of these properties to Ms. Kavanagh’s detriment: MPA , s 8(l).

The MPA also permits the court to order severing of a joint tenancy for property owned by spouses: MPA , s 9(3)(i), and I conclude that the general authority to “make any other order that in

the opinion of the Court is necessary” ( MPA , s 3(j)) permits me to make orders that affect Ms. Le’s potential interest, particularly since my chief objective in taking these steps is to

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