Docket: CACV2432 Stanley Roy Smysniuk v. John Ivanechko,, 2013 SKCA 106

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 106 Date: 2013-10-17 Between: Docket: CACV2432 Stanley Roy Smysniuk and John Ivanechko, also known as John Ivanochko Respondents/Appellants (Defendants) - and - Alan Stecyk Applicant/Respondent (Plaintiff) - and - Roy Smysniuk, Alroy Oilfield Construction Incorporated, All-Roy Oilfield Contractors Corporation Respondents/Respondents (Defendants) Before: Caldwell J.A. (in Chambers) Counsel: Jessie Buydens, for the respondents/appellants Robert J. Gibbings, Q.C., for the respondents/respondents Ivan Holloway for the applicant/respondent

Application: Heard: September 23, 2013 Disposition: Granted Written Reasons: October 17, 2013 By: The Honourable Mr. Justice Caldwell Caldwell J.A. [1] The trial judge awarded damages against the respondents to this application for losses caused by breaches of fiduciary duties,fraudulent conveyances and conspiracy to commit the same (see: 2013 SKQB 227). The respondents, Stanley Roy Smysniuk and JohnIvanechko, have appealed therefrom and, as a result, the execution the judgment by the applicant has been automatically stayed under theoperation of Rule 15(1) of The Court of Appeal Rules (Civil).

The applicant applies to lift the stay of execution imposed on the judgment. [2] The applicant seeks a wide range of interim relief under his application. He chiefly seeks to have this Court lift the stay ofexecution and the stay of proceedings, whether in whole or in part; he also seeks orders to: (

i) require the respondents to pay into courtthe amounts awarded by the trial judge, or such other amount as this might Court see fit, (ii) require the Registrar of Titles to remove alock placed on the title to certain land owned by All-Roy Oilfield Contractors Corp., (iii) require the respondents to post security for thejudgment amount and for the costs of the appeal, and (iv) designate the appeal an “expedited appeal” under Rule 43. [3] In support of the relief he chiefly seeks, the applicant notes the trial judge found 14 different “badges of fraud” on the part of therespondents and imputed fraudulent conduct to the individual respondents.

He particularly notes the trial judge found that Mr. RoySmysniuk had breached court orders by disposing of assets owned by Alroy Oilfield Construction Incorporated.

In light of this, theapplicant expressed his concern that the time requirements inherent in an appeal might give the respondents the opportunity to furtherdissipate their assets and generally hinder his ability to collect on his judgment should the appellants prove unsuccessful on appeal. [4] The respondents, on the other hand, say the appeal has proceeded in a timely manner thus far and they point out that theapplicant has already placed enforcement charges (e.g., caveats or other charges in the land titles registry and charges in the personalproperty registry) against much of their real and personal property, which should prevent dissipation pending the hearing of the appeal.The respondents further say the applicant, if he is successful in responding to the appeal, will suffer no resultant prejudice when it comesto enforcing his money judgment after the appeal.

The individual respondents claim not to have the financial resources to pay into courtthe amount of the judgment made against them personally. Moreover, Messrs. Stanley Roy Smysniuk and John Ivanechko allege in theiraffidavits that they will be financially unable to continue the appeal if the stay is lifted. [5] The principles applicable to an application to lift a stay of execution are well-known. In Ochapowace First Nation v. Araya(1994), (SK CA), 123 Sask.

R. 311, Lane J.A. described the Court’s approach in these terms: [11] … The underlying principle is to prevent injustice and to ensure that the result is fair and equitable to all sides. The purpose is tominimize prejudice pending the appeal and to balance the competing interests of the respondent who has been successful against those ofan appellant who ought not to be prejudiced simply by appealing. See also: Tekarra Properties Ltd. v. Saskatoon Drug and Stationery Co. (1985), (SK CA), 17 D.L.R. (4th) 155 (Sask.C.A.), and Horseshoe Creek Farms Ltd. v. Sterling Structures Co.

Ltd., Ferguson and Swertz (No. 1) (1982), (SKCA), 15 Sask. R. 54 (C.A.). [6] Obviously, each application must turn on its facts and the distinctive equities involved; however, as a starting point it must beaccepted that Rule 15(1) would be rendered meaningless if stays were lifted simply because a stay inherently postpones the enforcementthe judgment under appeal. Nevertheless, as Sherstobitoff J.A. acknowledged in Bank of Nova Scotia v. Omni Construction Ltd. (1981), (SK CA), 14 Sask.

R. 81 (C.A.), the inevitable delays in the preparation and setting down of appeals are a factor toconsider when exercising a discretion under Rule 15. Moreover, the jurisprudence under Rule 15 indicates the Court has lifted a stay as aresult of delay where the delay is materially detrimental to a respondent. See: Vagi et al. v. Peters (1989), (SK CA),74 Sask. R. 46 (C.A.); Rieger v. Burgess (No. 2), (SK CA), [1987] 2 W.W.R. 137 (Sask. C.A.); MacKay ConstructionLtd. v. Potts Construction Co. (1983), (SK CA), 25 Sask. R. 81 (C.A.); Middlemiss Holdings Ltd. v.

Brothers’Grocery Ltd. and Kiosses (1987), (SK CA), 56 Sask. R. 273 (C.A.); and Simonot v. Bank of Nova Scotia (1992), (SK CA), 100 Sask. R. 257. The objective of the Court being, at all times, to arrive at a result which is fair and equitable asbetween the contending parties. [7] Here, the applicant is concerned the inherent duration of the appeal process will afford the respondents time to dissipate assetswhich might otherwise be used to satisfy the damages awards made in his favour after trial.

Of course, this danger is present, to onedegree or another, in every appeal against an award of damages and the applicant’s concern, without more, is not a sufficient reason tolift the stay. However, in this case, the applicant has a strong factual basis for his concern because the trial judge found that Mr. RoySmysniuk had in fact dissipated assets in the face of a court order intended to restrain him from doing so. While there was no suchfinding against the other individual respondents, the trial judge found that both of them had colluded with Mr. Roy Smysniuk to deplete

the assets of Alroy Oilfield Construction Incorporated prior to judgment. [ 8 ] I balance against the possibility of further dissipation the fact that the applicant prudently holds enforcement charges against much of the respondents’ real and personal property. Moreover, the applicant would have the right to recover any fraudulently transferred assets under The Fraudulent Preferences Act , R.S.S. 1978, c. F-21, or The Fraudulent Conveyances Act, 1571, 13 Eliz. I, c. 5 (“ The Statute of Elizabeth ”), as would any litigant in his position.

His security and the legislative protections, though, provide no guarantee that the respondents will maintain the value of their assets in the interim. Simply put, given the facts found by the trial judge, the specter of the applicant being required to bring action against transferees of assets which have been alienated by the respondents looms large. Indeed, the applicant has suggested that Alroy Oilfield Construction Incorporated has already improperly transferred property to Mr. Roy Smysniuk’s spouse and daughter.

This is real cause for the applicant’s concern. [ 9 ] On the other hand, the respondents’ claim to being financially unable to proceed with the appeal if the stay is lifted must, by its substance, be the most significant factor weighing against the lifting of the stay in this case. However, the only evidence supporting the respondents’ allegations of impecuniosity are their statements to that effect and the personal property and land titles registry entries, which disclose charges against their respective properties.

The respondents provided no other documentary evidence and very little direct evidence as to their personal savings or incomes.

As such, I am unable to place much weight on the prejudice that might befall the respondents if the stay were lifted and certainly not sufficient weight to counterbalance the real concern of the applicant as to the possibility of asset dissipation. [ 10 ] On the whole of it then, upon balancing the particular factors at play in this application, I have decided to lift the stay under Rule 15(1) so as to minimize the potential for prejudice arising on the appeal from the trial decision but I do so subject to the following conditions: (

a) If the applicant or his agents give enforcement instructions to the sheriff in respect of this matter pending the disposition of the appeal, then the applicant shall, in the event of the appellants’ success on appeal, indemnify the sheriff for all fees and costs incurred by the sheriff in carrying out enforcement measures on the applicant’s instructions. (

b) If called upon to seize land, the sheriff shall effect the seizure of land by a means other than taking physical possession of it and, if applicable, the 12-month period set forth in s. 104 (

a) of The Enforcement of Money Judgments Act , S.S. 2010, c. E-9.22, which must elapse before the sheriff may dispose of land, is hereby extended until after the determination of the appeal, and furthermore the sheriff shall not apply under s. 105 of that Act to register a transfer of a title or an interest in such land until after the appeal has been determined. (

c) The sheriff shall effect seizure of any other tangible property other than by taking physical possession of it. (

d) The applicant shall deliver to the sheriff all funds received by him or his agents in relation to this matter and such funds delivered into the hands of the sheriff shall form part of the fund constituted pursuant to s. 107 of The Enforcement of Money Judgments Act in relation to this matter. (

e) The sheriff shall not distribute the fund constituted pursuant to s. 107 of The Enforcement of Money Judgments Act in relation to this matter, whether to the applicant or otherwise, until after the appeal has been determined; rather, the sheriff shall keep the fund invested in such interest-bearing manner as the sheriff may direct pending disposition of the appeal. [ 11 ] As to the other relief sought by the applicant: (

a) I dismiss the application for relief in the nature of an order requiring the respondents to make payment into court in satisfaction of the judgment below. (

b) I dismiss the application for orders for security for the judgment amount and for security for costs, the latter brought generally and under Rule 53(1). The respondents appear to have assets in Saskatchewan, many of which are already subject to charges in favour of the applicant. There is no indication that the respondents are not diligently pursuing the appeal. The applicant has not shown any special circumstance which would justify an order for security for costs. The applicant provided no authority for the proposition that a judge in Chambers is empowered to order “security for the judgment amount”. (

c) The lock on the title to All-Roy Oilfield Contractors Corporation’s land in Kindersley, Saskatchewan, was imposed on April 26, 2005 and its imposition may have had nothing to do with the underlying action. Given the lack of information as to why the title is locked, I decline to interfere with the Registrar of Titles’ decision to lock it. (

d) I dismiss the application to have the within appeal designated as an “expedited appeal” under Rule 43. There is no indication that the appeal is not currently proceeding at an adequate speed. The stay of execution has been lifted and the applicant has provided no other reason to conclude he might be prejudiced if the appeal were to proceed in the usual manner. At this time, I see no urgency to the appeal. [ 12 ] As costs were not requested, I make no order in that respect. DATED at the City of Regina, in the Province of Saskatchewan, this 17 th day of October, A.D. 2013. “Caldwell J.A.” _____________________ Caldwell J.A.