Banilevic v Cairney, 2023 SKCA 31

Court of Appeal for Saskatchewan Docket: CACV3590 Citation: Banilevic v Cairney , 2023 SKCA 31 Date: 2023-03-08 Between: Murray Banilevic and Murray Banilevic as Trustee for the Banilevic Family Trust Appellant (Petitioner/Plaintiff) And Shilo Cairney Respondent (Respondent/Defendant) Before: Jackson, Barrington-Foote and Kalmakoff JJ.A. Disposition: Appeal dismissed; Application to introduce fresh evidence dismissed Written reasons by: The Honourable Mr. Justice Kalmakoff In concurrence: The Honourable Madam Justice Jackson The Honourable Mr.

Justice Barrington-Foote On appeal from: 2020 SKQB 25 , Moose Jaw Appeal heard: October 21, 2022 Counsel: Jeffery W. Deagle and Nathaniel D. Day for the Appellant Shilo Cairney appearing on her own behalf Kalmakoff J.A. I. INTRODUCTION [ 1 ] Former spouses Murray Banilevic and Shilo Cairney went to trial in the Court of Queen’s Bench in relation to two actions (DIV 33 of 2016 [Divorce Action] and QBG 985 of 2016 [Civil Action]) that were consolidated into one (DIV 66 of 2016 [Consolidated Action]).

Although the trial has not yet concluded, the trial judge rendered a decision that made a number of determinations about certain matters that were in issue. In particular, he held that: (

i) an interspousal contract that purported to deal with the division of family property was not enforceable; (ii) an alleged trust agreement – the Banilevic Family Trust [Trust] – that purported to hold certain property in trust for designated beneficiaries was not a valid trust; and (iii) Mr. Banilevic had failed to establish the exemptions from divisibility that he claimed over certain property: Banilevic v Cairney , 2020 SKQB 25 [ Decision ].

Despite reaching those conclusions, the trial judge determined that the parties had not led sufficient evidence concerning the identification or valuation of the divisible property to permit him to complete the task of property division in the Divorce Action. Accordingly, he ordered that the trial be re-opened so that they could lead further evidence relevant to those issues. He did not render a final judgment disposing of the claim in the Civil Action. [ 2 ] Mr. Banilevic, in both his personal capacity and his capacity as trustee of the Trust, appealed against the Decision .

Shortly after he filed the appeal, Mr. Banilevic passed away. The executors of his estate (who I will refer to as the appellants) have taken over the prosecution of the appeal. They assert that the trial judge made various errors that undermine the Decision . They seek an order remitting the matter to the trial court and permitting them to lead additional evidence respecting the creation of the Trust and the property over which Mr. Banilevic claimed exemptions.

The appellants also seek to introduce fresh evidence on the appeal in support of their arguments. [ 3 ] As I will discuss in the reasons that follow, I have concluded that the appeal must be dismissed because, in the circumstances, it is premature. The trial has not yet concluded, and the relief the appellants seek in this Court is relief that is properly sought before the trial judge. That being so, the appellants’ application to introduce fresh evidence on the appeal is moot. II. BACKGROUND A. The Divorce Action and the Civil Action [ 4 ] Mr. Banilevic and Ms. Cairney were married on February 8, 2000.

They separated on October 21, 2015. Together, they had two daughters: Payton, born in 2002; and Paige, born in 2004. [ 5 ] On January 22, 2016, Mr. Banilevic filed a petition to commence the Divorce Action. In the petition, he sought a divorce and an unequal division of family property, among other remedies. The family law proceedings that followed have been protracted and acrimonious. [ 6 ] On April 29, 2016, Mr. Banilevic, on behalf of the beneficiaries of the Trust, commenced the Civil Action by filing a statement of claim. In the Civil Action, Mr.

Banilevic claimed that he was the trustee for the Trust, which had been created through documents executed on May 2, 2010, and July 6, 2013, and that the Trust held property in trust for four beneficiaries, namely: Payton, Paige, and Mr. Banilevic’s sisters, Kim Pinel and Shelly Marcyniuk. The statement of claim alleged that Ms.

Cairney had held herself out as a trustee of the Trust even though she was “not a trustee, beneficial, legal owner, or a beneficiary” of any of the properties held by the Trust, and that she had converted assets (including land, housing, household goods, incoming rent money, and motor vehicles) belonging to the Trust to her own use. By way of relief Mr. Banilevic, on behalf of the beneficiaries, sought damages, an accounting of Ms. Cairney’s dealing with the Trust property, and injunctive relief restraining her from occupying or interfering with the Trust property. [ 7 ] In the statement of defence that Ms.

Cairney filed in the Civil Action, she denied that Mr. Banilevic was a trustee, and denied

that a valid trust existed. She claimed that she was a registered legal owner of all the property listed in the Trust documents and, given that status, she had not inappropriately converted any property or assets to her own use. She also asserted that the purported Trust documents were not legally enforceable for various reasons, including that: (

a) the Trust documents had not been executed or endorsed by one of the purported settlors; (

b) the purported grantors did not legally own the property described in the Trust documents; and (

c) the alleged Trust was a fictitious instrument that Mr. Banilevic had created to evade payment of taxes owing on income he earned from various revenue properties. [ 8 ] The existence and validity of the Trust have been squarely in issue throughout the proceedings.

For reasons that are self- evident, the determination regarding the validity of the Trust is pivotal to the resolution of the Civil Action and directly affects the determination of what property is available for division between the parties in the Divorce Action. [ 9 ] On March 21, 2017, the Divorce Action and Civil Action were consolidated ( Banilevic v Cairney (21 March 2017) Moose Jaw, QBG 985 of 2016 and DIV 33 of 2016 (Sask QB) [ Consolidation Fiat ]). In the Consolidation Fiat , Brown J. also set the parameters for moving the matters on to pre-trial.

In that respect, he held that “[a]ll outstanding issues before the court” would be canvassed at the pre-trial, including “[w]hat is the extent of family property, whether there are any exemptions and what the division of such family property ought to be”.

He also held that this would include the Trust “and what the limits of that are as well as the matters raised in the Statement of Claim and Defence” from the Civil Action (at 1–2). [ 10 ] Although the Trust had been represented by legal counsel from the outset of the Civil Action, by the time the pre-trial conference took place on April 19, 2017, that was no longer the case; counsel had been discharged. Mr.

Banilevic, at one point, advised the Court that his mother, Joyce Banilevic, would be taking over as the Trust’s representative and there was a subsequent application by another person to be allowed to act on behalf of the Trust but, ultimately, no other representative appeared. When the trial began, it was Mr. Banilevic who was representing the Trust. B. Mr. Banilevic seeks an adjournment of the trial [ 11 ] Trial dates were eventually set for October 2–11, 2019. In the lead-up to those dates, there were several other applications and appearances that are not of consequence to this appeal.

However, on August 2, 2019, Mr. Banilevic wrote to the local registrar of the Court of Queen’s Bench to advise that he and Ms. Cairney had settled their property matters and, as such, he believed a trial was no longer necessary. [ 12 ] In this communication, Mr. Banilevic said that the majority of the property in question had already been exchanged or liquidated, and that proceeding to trial would require the parties to attempt to undo many things that could not be easily undone.

Moreover, he stated that, in his view, neither party would be adequately prepared to proceed on the scheduled trial dates, given the steps that had been taken to settle the matter. [ 13 ] Mr. Banilevic’s communication was brought to the attention of the trial judge. This caused the trial judge to issue a fiat, dated August 2, 2019. In it, he stated that, before the Court would take any steps in relation to Mr. Banilevic’s request, he “must serve [Ms.

Cairney] with a proper Application, either to adjourn the Trial or to seek Judgment based on a settlement” ( Banilevic v Cairney (2 August 2019) Moose Jaw, QBG 985 of 2016 and DIV 66 of 2016 (Sask QB)). [ 14 ] A short time later, Ms. Cairney filed an application seeking an order removing Mr. Banilevic from the family home and an order for production of documents. Mr. Banilevic responded by filing his formal application to “[a]djourn or dismiss the scheduled Trial”. The basis for Mr.

Banilevic’s application was his allegation that the property division matters had been settled on the terms set out in an interspousal contract dated March 29, 2019. These applications were heard by Tochor J. on September 23, 2019. Ms. Cairney’s applications were dismissed. As for Mr. Banilevic’s application to “adjourn or dismiss” the trial, Tochor J. noted in his fiat of the same date that Ms. Cairney opposed the application, and that she had filed evidence that called into question the enforceability of the purported settlement.

Justice Tochor also acknowledged that both parties, in their affidavit material, had raised questions about their readiness to proceed with the trial and stated that “if either party believes the trial cannot proceed on [the trial] date”, they should “contact the Registrar to arrange a conference with the trial judge so that the prospect of an adjournment, and any other case management issues, can be discussed” ( Banilevic v Cairney (23 September 2019) Moose Jaw, QBG 985 of 2016 and DIV 66 of 2016 (Sask QB) (at para 19). [ 15 ] A conference call of that nature took place before the trial judge on September 24, 2019.

Both parties, still self-represented, indicated that they were not ready to proceed to trial, and stated that they intended to retain counsel. Notably, no one other than Mr. Banilevic appeared on behalf of the Trust or its beneficiaries. Mr. Banilevic based his request for an adjournment on the communication set out above, while Ms. Cairney, in addition to expressing an intention to engage counsel, advised the trial judge that personal health issues had left her unable to adequately prepare for the trial. Notwithstanding the fact that both Mr. Banilevic and Ms.

Cairney had requested an adjournment, the trial judge ordered that the trial proceed as scheduled ( Banilevic v Cairney (24 September 2019) Moose Jaw, QBG 985 of 2016 and DIV 66 of 2016 (Sask QB)). In that respect, he observed that their “attempts to obtain counsel are of recent origin, and were not done with sufficient time to allow such counsel to be ready to proceed with the trial” (at para 2), and that overall, they had only themselves to blame for being unprepared. [ 16 ] After considering, and rejecting, Mr.

Banilevic’s suggestion that the trial should proceed only to determine the enforceability of the purported interspousal agreement, on the basis that “the agreement cannot be considered in a vacuum” (at para 8), the trial judge said: [9] This then brings me back to the parties apparent, and admitted, lack of preparation for trial. This lack of preparation is of the parties’ own making. They have not taken the necessary steps to ready themselves. There is no indication the situation would be improved by allowing for more time.

There is no plan presented for what difference an adjournment would make to either party’s ability to marshal their case and present it to the court. [ 17 ] That decision having been made, the trial began as scheduled on October 2, 2019. C. The trial proceeds

[ 18 ] When the trial began, neither Mr. Banilevic nor Ms. Cairney were represented by counsel. As mentioned above, the Trust and its beneficiaries were represented only by Mr. Banilevic. [ 19 ] At the outset, Mr. Banilevic advised the trial judge that he wanted to deal solely with the interspousal contract (or, as Mr. Banilevic described it, the “private agreement”) because, in his view, it entirely resolved the family property matters in issue. Mr.

Banilevic told the trial judge that he did not intend to call any other witnesses at the trial, because his position was that the purported interspousal contract made doing so unnecessary. [ 20 ] Mr. Banilevic testified first at the trial. He began by providing his version of the events that had led to the creation of the interspousal contract, and his understanding of what its terms meant. Eventually, he came to the portion of his evidence where he discussed the creation of the Trust.

He proffered a document dated May 2, 2010, that he asserted was the Private Trust Agreement that established the Trust, along with various land titles documents pertaining to the properties he said were held in trust for the Trust’s beneficiaries. [ 21 ] As Mr. Banilevic neared the end of his testimony-in-chief, the trial judge asked him if he had any further evidence to give before Ms. Cairney conducted her cross-examination of him. Mr.

Banilevic responded that he did not “have a ton of evidence” because he had approached the trial with the view that he was “strictly here dealing with the [interspousal] contract”. He also reiterated that he had come to the realization that the trial was “going to entail way more than [he was] … prepared to deal with” because he had come to trial only “prepared to deal with the [interspousal] contract”, and that he had not brought evidence about “all the liabilities that need to be accountable”. [ 22 ] After Mr. Banilevic completed his evidence-in-chief, Ms. Cairney began her cross-examination.

That cross-examination continued until the end of the first day of the trial. [ 23 ] On the morning of the second day of the trial, Mr. Banilevic renewed his request for an adjournment. He said that he was “confused about this process”, because he thought the interspousal agreement had settled the matter, and that he had not come to trial prepared to address any matters outside of that. The trial judge rejected Mr.

Banilevic’s request to adjourn the proceedings but invited him to renew his application for an adjournment if new matters arose as the trial proceeded. [ 24 ] Following the lunch break on the second day of the trial, Mr. Banilevic renewed his request for an adjournment. Once again, he made the submission that he was not properly prepared for the trial because he believed the interspousal contract had rendered a trial unnecessary. [ 25 ] The trial judge rejected this request as well.

In doing so, he observed that the pre-trial judge had clearly spelled out for the parties what was to be in issue at the trial and that Mr. Banilevic had had ample time to prepare his case. He also noted that Ms. Cairney now wished to proceed with the trial and had prepared herself to do so.

In the end, the trial judge said: In the result, I am satisfied, at this stage, that this litigation can proceed; however, the issue of an adjournment will remain a live issue, as more information comes across concerning what the property is and what the actual issues are between the parties; but, at this stage, I decline to adjourn the trial. … [ 26 ] The trial then continued for several more days. Mr. Banilevic completed his testimony, various other witnesses were called, and Mr. Banilevic read in portions from the transcript of questioning. Ms.

Cairney also testified and called witnesses in support of her case. Both parties closed their cases and made their final submissions on November 18, 2019. The trial judge reserved his decision. D. The Decision [ 27 ] The trial judge rendered the Decision on January 27, 2020. He began by summarizing the nature of the actions that were before him and making a finding that the parties were well aware of the issues that were in play. He also provided additional detailed reasons for having denied Mr.

Banilevic’s mid-trial requests for an adjournment. [ 28 ] Next, the trial judge addressed the question of the enforceability of the purported interspousal contract. As stated previously, Mr. Banilevic took the position that this contract settled all legal proceedings between the parties, including the division of the family property. The trial judge rejected Mr. Banilevic’s argument and found that the purported agreement was not enforceable.

The appellants take no issue with that determination. [ 29 ] Having concluded that the interspousal contract was not enforceable, the trial judge set about determining what family property was available for division. Mr. Banilevic took the position that there was little, if any, family property to be divided, because all of the real property in which he and Ms. Cairney were shown to have a legal interest was beneficially held by the Trust. [ 30 ] The trial judge rejected Mr.

Banilevic’s claim respecting the existence of the Trust, finding that the evidence was not sufficient to establish that “the various assets are owned in an arrangement other than as reflected by their legal status” and, as such, the parties’ interest in the property held by the Trust would be divisible as family property (at paras 192–193). [ 31 ] The trial judge also rejected Mr. Banilevic’s claims that certain property was exempt from division on the basis that he owned it before the parties were married. In that respect, the trial judge found that Mr.

Banilevic had not met the onus of establishing the exemptions he claimed and that, accordingly, the entirety of the family property was available for division under The Family Property Act , SS 1997, c F-6.3 . [ 32 ] Finally, the trial judge concluded that the trial would need to be re-opened because the state of the evidence did not allow him to identify or determine the value of the family property with the degree of precision necessary to make a proper decision about its division.

In that respect, after reviewing the evidence and highlighting the areas in which he found it to be deficient, he said: [208] The court is left in the position of having virtually no evidence upon which to make an appropriate determination on the division of

family property and/or the payment to be made to equalize such property division, with respect to the real properties. To act on the state ofthe present evidence is to engage in little more than speculation. It is not even guesswork, as there is nothing provided upon which to basea guess as to value. [209] As a result, I have determined it is necessary to re-open the trial. That is required to permit the parties an opportunity to presentevidence on these issues. … [212] As a result, I direct the trial of this matter shall resume.

The purpose of the resumption is to permit the parties to tender suchfurther evidence regarding the extent of, and valuation of, the family property assets, as they determine appropriate. Following receipt ofsuch evidence, the parties shall be entitled to then present further argument. … [33] As set out above, the trial judge made no final determination of the claim advanced in the Civil Action. III. ANALYSIS [34] The appellants take issue with three aspects of what the trial judge has decided so far. The first is the denial of Mr. Banilevic’srequests for an adjournment of the trial.

The second is the trial judge’s determination respecting the non-validity of the Trust. The third ishis finding that Mr. Banilevic failed to establish the exemptions from divisibility that he claimed over certain property. The appellantscontend that Mr. Banilevic was not properly prepared to conduct the trial because he had taken the view that the only issue that he neededto address was the interspousal contract and, in light of the fact that Mr.

Banilevic was representing not only himself but the Trust and itsbeneficiaries, the trial judge’s decision to deny the requests for an adjournment resulted in a substantial unfairness, because it meant thatrelevant evidence regarding the validity of the Trust and the exemptions Mr. Banilevic claimed was not tendered. They argue that theappropriate way to remedy this unfairness is to set aside the Decision as it relates to the validity of the Trust and the availability of theexemptions and re-open the trial to permit them to lead further evidence on those points. [35] The trial has not yet concluded.

No final judgment has been rendered, and no order has been taken out. Because of that, aquestion arises as to whether this Court has jurisdiction to hear and determine the appeal at this mid-trial stage and, if there is jurisdiction,whether it is proper to exercise it. This is because appeals are creatures of statute. Except as provided by statute, there are no rights ofappeal and no corresponding appellate court jurisdiction.

In the present context, there are two potential sources of statutory authority forthe appellants’ appeal: s. 7 of The Court of Appeal Act, 2000, SS 2000, c C-42.1 [The Court of Appeal Act], and s. 55 of The FamilyProperty Act. [36] Section 7(2) of The Court of Appeal Act provides a general right of appeal. It states that “an appeal lies to [this Court] from adecision … of the Court of [King]’s Bench or a judge of that court”. The term “decision” is defined in s. 2 of as including “any judgment,order, decree, verdict or finding”.

All three of the judicial determinations that the appellants seek to challenge would appear to fit withinthis broad definition. However, the right of appeal conferred by s. 7(2) is subject to s. 7(3), which states that if another enactment “confersonly a limited right of appeal, that enactment prevails”. It is also subject to s. 8, which imposes a leave requirement on appeals from mostinterlocutory decisions. [37]

Section 55 of The Family Property Act provides as follows: 55 An appeal lies to the Court of Appeal for Saskatchewan from any order or judgment made or given on or pursuant to an applicationpursuant to this Act. [38] The circumstances of this case raise several questions about the nature and scope of any right of appeal that may exist inconnection with the three aspects of the Decision with which the appellants take issue. [39] For example, there may be questions about whether the trial judge’s determinations respecting the validity of the Trust and theavailability of the exemptions that Mr.

Banilevic claimed over certain property were an “order or judgment” of the sort referred to in s. 55of The Family Property Act, given that they did not constitute the final word on property division, and given that no formal judgment hadbeen rendered, and no order taken out. With respect to the trial judge’s decision denying Mr. Banilevic’s requests for an adjournment, ifthe right of appeal is found to exist in s. 7(2) of The Court of Appeal Act, there would be a question about whether leave to appeal wasrequired, given the interlocutory nature of that decision.

There may also be questions about whether any of these rulings were “incidentaldecisions” and, if they were, whether s. 9(4) of The Court of Appeal Act would preclude a mid-trial appeal on that basis. [40] However, as I will explain, these are not questions that need to be answered in this appeal. [41] While there are decisions which have held that, where the right of appeal exists, there is a duty on an appellate court to receiveand determine the appeal (see, for example: CAE Aircraft Ltd. v Canadian Commercial Corp. (1989), (MB CA), 61Man R (2d) 201 (CA) at para 20), the general rule is that appellate courts ought not entertain appeals from rulings or orders made in thecourse of a trial, while the trial is still ongoing, because doing so risks fragmenting the proceedings and creating an undesirable appeal byinstalments approach.

In short, mid-trial appeals are generally not entertained because they are premature (see, for example: Prince AlbertCredit Union Limited v Diehl, (SK CA), [1986] 3 WWR 543 at 544 (Sask CA); Bank of Montreal v Kergen andKergen (1988), (SK CA), 70 Sask R 166 (CA); Aquino v First Choice Capital Fund Ltd. (1995), (SK CA), 134 Sask R 241 (CA); and Rask v Hus, 2006 SKCA 29 at para 3). [42] Appellate courts may properly depart from the general rule, however, and hear an appeal from a mid-trial ruling if there areexceptional or unusual circumstances, such as where it would be manifestly unjust to one or more of the parties to let the trial continue toits conclusion on the basis of the ruling from which the appeal is taken (see: Paterson v Hamilton, 1996 ABCA 143 at paras 12–13, [1996]7 WWR 257; Mercury v Manitoba (Minister of Government Services), (MB CA), [1995] 7 WWR 210 at 212–213;and Northumberland Ferries Ltd. v Golten Marine Co.

Inc. (1991), (PE SCAD), 96 Nfld & PEIR 273 at 275 (PEI SC

(App Div))). [ 43 ] It is certainly arguable that this case presents the sort of exceptional circumstances that would make hearing and determining a mid-trial appeal appropriate. The trial judge proceeded with the trial notwithstanding that both parties had requested an adjournment and had both indicated that they were not prepared to proceed. There were lingering questions about Mr. Banilevic’s ability to properly represent the Trust.

Further, and importantly, the trial judge has already decided on his own motion to re-open the trial for the purpose of receiving further evidence relating to the extent and value of the family property, as he has concluded that such evidence is required to enable him to dispose of the family property application. [ 44 ] However, even if I had concluded that these factors were sufficient to constitute special circumstances, it would not automatically follow that this Court would hear and determine the appeal.

The decision as to whether to do so is discretionary and, in the unique circumstances of this case, I would not exercise that discretion. That is so for the following reason. Trial judges have wide discretion to re-open a trial to receive additional evidence, if that is what fairness requires (see, for example: Moradkhan v Mofidi , 2013 BCCA 132 at paras 28–31 , 360 DLR (4th) 622; and Malkov v Stovichek-Malkov , 2018 ONCA 620 at paras 12–15 , 15 RFL (8th) 255). In the present case, the trial judge is not functus in relation to the Trust issue, as a formal judgment has not yet been entered.

As such, he has the authority to reconsider his decision as to the Trust and the exemptions. [ 45 ] In these circumstances, it remains open to the appellants to apply to the trial judge for an order that they also be permitted to lead further evidence respecting the validity of the Trust and the exemptions that Mr. Banilevic claimed over the divisibility of certain property, and to reconsider the decisions he made on those issues. If the appellants choose to make these applications, it would be a relevant consideration that the trial judge ordered that the trial be re-opened on his own motion.

For that reason, he did not have the benefit of having heard from the parties as to the scope of that order, which would now doubtless include submissions from the appellants based on the fresh evidence bearing on the issues that they sought to adduce on this appeal. [ 46 ] In my view, that is the better approach. The appellants should seek this relief from the trial judge.

Given that the trial has already been re-opened for certain purposes, it cannot be said that it would be manifestly unjust to the appellants, or to the other purported beneficiaries of the Trust, to decline to determine the appeal at this stage. [ 47 ] Accordingly, I would dismiss the appeal as premature. That being the case, the application to introduce fresh evidence is moot and must also be dismissed. IV. CONCLUSION [ 48 ] For the foregoing reasons, I would dismiss the appeal and award costs in Ms. Cairney’s favour, fixed at $1,500. “Kalmakoff J.A.” Kalmakoff J.A. I concur. “Jackson J.A.” Jackson J.A.

I concur. “Barrington-Foote J.A.” Barrington-Foote J.A.