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  • Writer's pictureJared Davies, Lawyer

Force the sale of the matrimonial home Ontario

Introduction


In Ontario, there is a mechanism to force the sale of jointly owned property vis-à-vis section 2 and 3 of the Partition Act. This comes in handy when a married couple separates, and parties have different views on what should happen to the matrimonial home. Parties opposing the sale need to try and show malicious, oppressive or vexation conduct on the part of the person who wishes for the sale. These will be findings of fact specific to each case. Marchese v Marchese, a 2019 Ontario Court of Appeal decision, importantly notes:

As the trial judge correctly stated, the respondent had a prima facie right to an order for the partition and sale of the matrimonial home. As a result, the trial judge was required to order the sale unless the appellant demonstrated that such an order should not be made and showed there was malicious, vexatious or oppressive conduct on the part of the respondent in relation to the sale itself. The trial judge found that the appellant did not allege there was any such conduct nor did she put forward any other legal basis to preclude the sale of the matrimonial home.

The Family Law Act provides additional considerations which may limit the Partition Act where there is certain findings of prejudice. The Ontario Court of Appeal decision of Silva v Silva adds:

The two statutes [the Partition Act and the Family Law Act] are not incompatible, but where substantial rights in relation to jointly owned property are likely to be jeopardized by an order for partition and sale, an application under the Partition Act should be deferred until the matter is decided under the F.L.A. Putting it more broadly, an application under s. 2 should not proceed where it can be shown that it would prejudice the rights of either spouse under the F.L.A.

In other words, the Family Law Act seems to temper the Partition Act with additional considerations specifically for the matrimonial home. Taken together, family courts have the power to force the sale of a jointly owned matrimonial home. The question becomes, when will they exercise this power? The short answer is that each case depends on its own facts.

The relevant provisions in the Partition Act


The relevant provisions in the Partition Act are sections 2 and 3 as follows:

2 All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. R.S.O. 1990, c. P.4, s. 2.

3 (1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

Malicious, oppressive or vexatious conduct

When a party argues against a forced sale of the matrimonial home, many courts cite the need for malicious, oppressive or vexatious conduct to be present on the part of the person seeking the sale or some other prejudice. However, few define this conduct. Hutchison-Perry v. Perry, 2019 ONSC 4381 (S.C.J.), provides an overview:


There is some overlap in the scope of the terms "malicious" or "malice", "vexatious", and "oppressive". "Malice" arises when a proceeding is brought for an improper purpose including spite, ill-will, vengeance, or to gain a private collateral advantage: Nelles v. Ontario, 1989 CanLII 77 (SCC), [1989] 2 S.C.R. 170 (S.C.C.), at pp. 193-194. A proceeding may be viewed as "vexatious" for numerous reasons including when multiple proceedings are brought to re-litigate an issue already decided or when a proceeding is brought to harass or oppress others rather than to assert a legitimate right: Lang Michener Lash Johnston v. Fabian (1987), 1987 CanLII 172 (ON SC), 59 O.R. (2d) 353 (Ont. H.C.); Chinese Publications for Canadian Libraries Ltd. v. Markham (City), 2017 ONCA 968 (Ont. C.A.), at para. 9; Van Sluytman v. Muskoka (District Municipality), 2018 ONCA 32 (Ont. C.A.), at para. 23. A motion for the sale of a matrimonial home is "oppressive" when the co-tenant that opposes the sale will suffer serious hardship if the matrimonial home is sold: MacDonald v. MacDonald (1976), 1976 CanLII 845 (ON SC), 14 O.R. (2d) 249 (Ont. Div. Ct.), at p. 254.

Some examples of considerations in forcing the sale of the matrimonial home

Case law on exclusive possession


Cases like Humphrey v Humphrey, [2007] WDFL 2054, suggest that if one party has exclusive possession of the matrimonial home, the court may decide that they will not impose the sale of the matrimonial home on an interim basis:

In my view, notwithstanding the position of the husband that it is not financially possible to avoid selling the home, the law is quite clear that it would be an error in law to order partition and sale at this stage for the three reasons set out by this court in Walters v. Walters: there is genuine issue for trial concerning exclusive possession of the home;

As stated by Potts J. in Fraser v. Fraser:

The court ought not to order the sale of a jointly owned matrimonial home while one joint tenant has exclusive possession of the home and while the order for sale would defeat claims one joint tenant intends to put forth at trial. In this case the claims that would be defeated are the wife's claims for exclusive possession of the matrimonial home and support for herself and the youngest child of the marriage.

Arguments for exclusive possession of the matrimonial home can be found here.

Hardship and best interests of the child


Among other considerations, the best interests of the child can play a significant role in this analysis. Gertley v Gertley, 2022 ONSC 1750 recently demonstrated some of these considerations:

These cases, therefore, confirm that there is some judicial discretion to make an order for the sale of a jointly owned matrimonial home and to limit the cases where an order should be made based upon the circumstances of the case. This discretion arises where the sale may prejudice a parties' substantive rights concerning equalization or support at trial.

Alternatively, there is authority to exercise discretion where the sale may work a hardship on vulnerable children who are at issue in the litigation.

Both grounds were outlined by Pinto J. in Fernando v. Fernando, 2021 ONSC 5851 at para. 11 and 12 of the decision. He firstly cites Pazaratz J. in Dhaliwal v. Dhaliwal, which suggests that the "court must consider the impact of a proposed sale on children or a vulnerable spouse -- including the emotional impact, and the fundamental need to ensure that they have appropriate housing." Pazaratz J. suggested that support obligations and alternative housing availability must be canvassed. Pinto J. notes that Pazaratz J. suggests a wholistic approach, ensuring that the court make orders for sale of the home at the interim stage bearing in mind the need to "need to achieve a final resolution for the family as fairly and expeditiously as possible".

Additionally, in Scodros v Scodros, [2005] O.J. No. 1711 (S.C.J.), the best interests of the children were found to warrant a sale because the mother was living in the home with two of the children, and the father only had an apartment for the remaining two children: the father needed his equity from the home to place the children in his care on an equal footing with those children with the mother.

Financial hardship


In Lalonde v Agha, 2021 ONSC 5223, one party brought a motion for sale of the matrimonial home while the other brought a motion for exclusive possession of home. The issue was whether financial hardship was enough to force the sale, notwithstanding the children. The court stated:

…[T]he applicant is experiencing financial hardship. It is clear that she has significant debts. She is currently unable to capitalize on the equity in the home. As a joint owner, she has the prima facie right to request the sale of the property pursuant to the Partition Act, the question to be answered is whether such an order should be made in light of the cross-motion brought by the respondent for exclusive possession.

The respondent does not allege that the motion brought by the applicant arises out of malice, is vexatious, or reflects oppressive conduct on the part of the applicant. He maintains that it is in the best interests of the children that the applicant's motion be temporarily stayed and that he be granted temporary exclusive possession of the matrimonial home.

The respondent concedes that he may or may not be able to find alternative accommodations if the house is sold and he receives his share of the proceeds. He further conceded that should the court make an order for the sale of the matrimonial home, it would not negatively impact any issue of equalization of net family property. The respondent has not established that the sale of the home at this time would result in any prejudice to him.

The oldest child, I, is currently 22 years old, a university student and lives with the respondent. The parties dispute, in their affidavits where J lives. The youngest child lives with the applicant, but apparently spends a good deal of time with the respondent father.

The respondent has had the advantage of living in a mortgage free home for almost six years. While he claims that he may not be able to find suitable alternative accommodations, he offers no evidence to support that statement.

On the other hand, the applicant has provided proof that she is significantly in debt and needs to access her share of the proceeds of the sale to avoid enforcement action against her to collect those debts.

It is difficult, from the material before me, to gauge what impact, if any, an order for the sale of the home would have on the children. I accept that they may like their home and not want to move, however, in my view that is not sufficient to decline to make the order. Even if I accept that both I and J reside with their father, they are both university students and not young children who require the comfort and stability of maintaining a routine as it relates to school and home. Again, there is no evidence before me to suggest how the children would be adversely impacted by an order for the sale of the home.

Accordingly, on the totality of the evidence before me, I find that the respondent has not established any reason why the motion brought by the applicant should be stayed as he urges me to do. The sale of the home seems to be inevitable and I will grant the applicant's motion for the sale of the home which will free up significant equity for both parties and will alleviate some of the applicant's financial hardship.

In Bailey-Lewis v Lewis, 2020 ONSC 7525, the court found that it was inappropriate not to sell the home merely because one party was trying to delay the matter to get financing to buy the home out themselves:

While an order for the sale of a matrimonial home prior to trial should not be made as a matter of course, there is no reason not to do so in this case. It appears that the Respondent does not want the property sold on the open market so that he may buy it directly from the Applicant at what appears to be at a discount in order to increase the chances of obtaining financing for its purchase on his modest income. That is not a sufficient reason to oppose this motion particularly as the court-imposed deadline for providing proof of qualification for financing passed more than eight months ago. Given that the Respondent seeks to prevent or delay the sale of the matrimonial home on the open market so that he may continue to try to cobble together financing in order to purchase it, I agree with the Applicant that she should have control over the sale process on certain terms. If the Respondent is able to arrange such financing, then he will be at liberty, like anyone else, to make an offer to purchase the matrimonial home on the open market.

Conclusion


Obvious takeaways? The court will consider whether there is malicious, vexatious or oppressive conduct on the part of the person seeking the sale. The court is also concerned with the substantive rights of the person seeking the sale, and whether they will be prejudiced if the sale is not ordered. In addition, the best interests of the child will be a primary consideration in this analysis. Partition and sale of the matrimonial home commonly competes with an exclusive possession request, which carries with it additional considerations. Ultimately, these orders are made on a case-by-case basis depending on the factual findings of the court.






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