Grace v. Draper, 2013 ONSC 7112
CITATION: Grace v. Draper, 2013 ONSC 7112
DIVISIONAL COURT FILE NO.: DC-13-1885
DATE: 2013/12/03
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PARDU, MCCARTNEY, HENNESSEY JJ.
BETWEEN:
STEPHEN JOSEPH GRACE
Applicant (Respondent)
– and –
MICHAEL DRAPER, DAVID DRAPER AND PATRICK DRAPER
Respondents (Appellants)
Michael A. Chambers, for the Applicant/Respondent
Robert W. Baldwin, for the Respondents/Appellants
HEARD: November 4, 2013 (Ottawa)
REASONS FOR JUDGMENT
PARDU J. (ORALLY):
[1] The parties are the owners, as tenants in common of residential real property. The applicant, Stephen Grace, applied for an order for sale of the property, pursuant to the Partition Act. The respondent Drapers filed an affidavit in which Patrick Draper indicated that he either wished to purchase the applicant’s interest in the property or have the property severed.
[2] The application judge ordered that the property be sold. He concluded that partition of the property was,
“Impossible due to geographic nature of the property.”
And,
“Use of existing logical division lines leading to inequity.”
[3] The respondent appeals from this order, submitting that the application judge erred in ordering sale rather than physical partition of the property and erred in failing to order a reference to determine the best method of sale.
[4] It is common ground that a co-owner of land is entitled to bring the co-ownership to an end, either by partition or sale in the absence of malicious, vexatious, or oppressive intent or conduct. No such conduct is alleged in this case.
[5] The property consists of both halves of a semi-detached house and a larger lot that abuts one of the homes. Given this configuration, it would be difficult to physically severe the property into two parcels in a way that would make sense and be fair. In any event, the balance of factors favours sale rather than physical severance.
[6] The home ordinarily rented by the Drapers is now vacant. The evidence indicates that the property is dilapidated and in poor repair. The Drapers are in arrears for their share of Municipal property taxes by $16,509.61 and allowed the fire insurance policy on the property to lapse.
[7] Section 50(2) of the Planning Act provides that no order under the Partition Act for partition of land shall have any effect in law unless the requisite consent by the municipality is forthcoming. The affidavit evidence indicates that an application for severance would require extensive plans for the development of the vacant lot, including building, parking, minor variances, grading and drainage plans, and payment of development charges. And that if the two homes were part of the severance, major renovations would be required to bring the 100-year-old building in compliance with fire code standards and that new water and sewer connections to city services would be required.
[8] In the course of argument, the appellant suggested that two severances; one for the vacant area and another to divide the two halves of the semi-detached homes would be a feasible mode of dividing the parties’ interests.
[9] Given that the Drapers have been unwilling or unable to pay the municipal taxes and the fire insurance, there is no reasonable prospect that they could cooperate in obtaining a severance and there is no evidence that a severance or severances would likely be granted.
[10] The grant of an order for partition or sale under the Partition Act is discretionary, as observed with approval in Cook v. Johnston, 1970, 24, Ontario reports, 2nd, 701 at paragraph 3,
“The meaning of the legislature was that when you see that the property is of such a character that it cannot reasonably be partitioned, then you are to take it as more beneficial to sell it and divide the money against the parties.”
[11] The order for sale hearing was a reasonable exercise of the application judge’s discretion. Considering all of these circumstances the application judge did not err in ordering sale and the appeal is dismissed.
[12] Nor was the application judge bound to direct a reference; this appears to be ordinary residential property.
[13] The application judge reserved to himself the ability to make such further orders as may be necessary to give effect to the sale. If necessary, if one of the parties does not cooperate, he can order that another of the parties be given carriage of the sale, order vacant possession, if appropriate to facilitate the sale, determine the terms of a listing agreement and the price at which the property is to be offered if the parties cannot agree, and can order that a particular offer be accepted.
[14] Stephen Grace cross-appeals from the decision of the application judge. He asks for an order that the Drapers be ordered to sell their half share of the property to him for $350,000. While this may well be a reasonable proposal, it is foreclosed by the decision of the Court of Appeal in Buttar v. Buttar, 2013 ONCA 517, citing Batler v. Batler with approval,
As Granger J. said in Batler v. Batler (1989), 1988 4726 (ON SC), 67 O.R. (2d) 355 (H.C.J.) at 356:
A joint tenant is entitled to the highest price for his or her interest which may be more than the appraised value of the property. In today’s real estate market, the appraised value of the property may not reflect the fair market value. The true test of the fair market value is to sell the property in an open market. Unless the parties agree to a transfer of the property at an agreed price, the property should be listed for sale and sold, to ensure that fair market value is obtained.
[64] This court has jealously guarded the rights of joint owners to the best price for jointly-owned property. Martin v. Martin (1992), 1992 7402 (ON CA), 8 O.R. (3d) 41 (C.A.) provides an example of this principle in a slightly different context. In that case, this court explained the rationale behind the rule that one party cannot be given a right of first refusal with respect to matrimonial property ordered sold. As Osborne J.A. explained in Martin at p. 48:
A right of first refusal will most often work to discourage other interest buyers. If a spouse is granted a right of first refusal, the effect of it is to remove that spouse from the competitive market for the matrimonial home . . . .
Both Dr. and Mrs. Martin have a right to buy the matrimonial home. If Dr. Martin wants to exercise that right he should be in a position of having to compete with any other interested purchaser. It is only in that way that Mrs. Martin’s interest in the property will be fairly and justly quantified.
[15] Stephen Grace also asked that he be awarded his costs in this Court and of the application. While the application judge ordered that there be no costs, there was no reason articulated as to why costs should not have followed the event. We would allow the cross-appeal to the extent of allowing to Stephen Grace his costs of the application and of the appeal, but dismissing his request for an order allowing him to purchase the property.
PARDU J.
MCCARTNEY J.
HENNESSY J.
DATE OF REASONS FOR JUDGMENT: November 4, 2013
DATE OF RELEASE: December 3, 2013
CITATION: Grace v. Draper, 2013 ONSC 7112
DIVISIONAL COURT FILE NO.: DC-13-1885
DATE: 2013/12/03
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PARDU, MCCARTNEY, HENNESSEY JJ.
BETWEEN:
STEPHEN JOSEPH GRACE
Applicant (Respondent)
– and –
MICHAEL DRAPER, DAVID DRAPER AND PATRICK DRAPER
Respondents (Appellants)
REASONS FOR JUDGMENT
PARDU J.
DATE OF REASONS FOR JUDGMENT: November 4, 2013
DATE OF RELEASE: December 3, 2013