Court File and Parties
COURT FILE NO.: CV-21-87901 DATE: 2023/08/18 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SUSAN YVONNE COUVILLON Applicant – and – CLARENCE DOUGLAS COUGHLER Respondent
COUNSEL: J.L.Lee Mullowney, for the Applicant David Contant, for the Respondent
HEARD: May 18, 2023
Reasons for Judgment
Rees J.
Overview
1Susan Couvillon and Clarence Douglas Coughler are registered joint tenants in the property known municipally as 2283 Stagecoach Road, Osgoode, Ontario (the “Property”). Ms. Couvillon seeks an order for the sale of the Property under the Partition Act, R.S.O. 1990, c. P.4 and Rule 66 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Ms. Couvillon seeks 50 percent of the proceeds from the sale of the Property, less her share of the costs of selling the Property.
2Mr. Coughler brings what is effectively a cross-application. In his factum and at the hearing, Mr. Coughler narrowed the relief he is seeking. He acknowledges that Ms. Couvillon has an interest in the Property. He wishes to reach what he says is an equitable outcome. He seeks a constructive trust from the date of the couple’s separation.
3At the start of the hearing, I directed on consent that the two applications be heard together.
Facts
Marriage and Divorce
4Ms. Couvillon and Mr. Coughler married on February 25, 1989. On June 28, 1994, the parties purchased the Property together for $125,000. They were – and remain – registered as joint tenants. Each paid half of the down payment for a mortgage.
5Mr. Coughler worked at a body shop, repairing cars. He then briefly ran his own feed business before returning to body shop work.
6Ms. Couvillon had limited income. She received some income support through the Ontario Disability Support Program and from cleaning homes. There was some dispute about whether she occasionally made mortgage payments directly during marriage. But nothing turns on this. I find that Ms. Couvillon contributed what she could to the household expenses. Which spouse paid for which household expense during marriage is of no moment. Both contributed according to their means.
7After 15 to 16 years of marriage, the parties separated in May or June 2004 or sometime in 2005. Recollections differ as to exactly when.
8The parties divorced on August 10, 2006. At the time of divorce, the parties had limited means. While there is ambiguity about whether any legal advice was obtained, ultimately there was no separation agreement nor an application for equalization of net family property under the Family Law Act, R.S.O. 1990, c. F.3, ss. 5 and 7. The limitation period for applying to the court for the equalization of net family property has passed: Family Law Act, s. 7(3).
9Currently, Mr. Coughler is 81 years old. Ms. Couvillon is 68 years old.
The Property After the Parties’ Separation
10When they separated, Ms. Couvillon left the Property and Mr. Coughler remained there. He continued to pay the mortgage down until it was discharged on September 10, 2019. He also paid the utility bills and property taxes for the Property. For her part, Ms. Couvillon continued to own the Property as a joint tenant, but did not make any payments to the mortgage or associated expenses after they separated.
11Ms. Couvillon’s evidence is that the parties applied for a divorce without seeking equalization or property division to save money on legal fees. She stated that Mr. Coughler wanted to keep the Property and that he promised to pay her for her share of the equity. She stated that whenever she contacted Mr. Coughler to discuss a buyout, he would become angry.
12Mr. Coughler disputes this account. His evidence is that when they divorced there was never an agreement that he would buy out her share of the equity. He states that Ms. Couvillon did not meaningfully contribute to the Property during their marriage, and she told him that she wanted nothing to do with it. He states that there were no equalization terms in their divorce because they had no assets except the Property, which he says he always paid for.
13Ms. Couvillon and Mr. Coughler co-signed an early mortgage renewal agreement in 2016 and another mortgage renewal agreement in 2018. Ms. Couvillon admitted on cross-examination that these were the only two renewals she co-signed.
14Ms. Couvillon alleges that the parties agreed in 2016 that Mr. Coughler would pay Ms. Couvillon her share of the equity in the Property if she agreed to renew the mortgage so that he could get a loan to make repairs on the residence before listing the Property for sale. Mr. Coughler denies this. He states that he never spoke to Ms. Couvillon about buying out her share of the Property and that was never their agreement.
15Mr. Coughler also stated in his affidavit that he never contacted Ms. Couvillon to obtain her consent to a renewal of their mortgage; the mortgage simply renewed automatically. Mr. Coughler’s account that the mortgage simply renewed automatically is contradicted by the signed mortgage renewal agreements in 2016 and 2018.
16But I accept Mr. Coughler’s evidence that he did not refinance the Property to obtain a loan. There is no evidence of a bank loan in respect of the mortgage renewals in 2016 or 2018. From the bank’s mortgage history report, no additional amounts were loaned. Rather, the mortgage history report shows consistent monthly deposits paying interest and principal, until the mortgage is discharged.
17There were several inaccuracies in Ms. Couvillon’s affidavit, which were identified on cross-examination. It is not clear whether this was due to poor drafting, her difficulty recalling events accurately, or her lack of comprehension regarding the contents of her affidavit at the time she swore it. Based on her answers during cross-examination, I do not find that Ms. Couvillon intended to mislead. But the inconsistencies in her evidence diminish the weight I give to her account.
18Most importantly, she admitted during cross-examination that she formed the intention to use the Property as “a business venture” once it became clear to her that the limitation period had expired for her to apply for relief under the Family Law Act. As Ms. Couvillon put it, “my name is half on the deed, and I want my share.” She conceded that she never conducted business with Mr. Coughler with respect to the Property, nor did she make a written demand for a share of the Property.
19Ms. Couvillon may have had the intention to use her share of the equity in the Property as an investment; she may even have raised this with Mr. Coughler; but on the record, I am not persuaded that he agreed to do so. Nor am I persuaded that Mr. Coughler agreed in 2016 and 2018 to pay Ms. Couvillon her share of the equity in the Property if she agreed to renew the mortgage. That said, I am persuaded that she pressed Mr. Coughler orally over the years to pay her her share of the equity in the residence, and that he refused to do so.
The Value of the Property
20Ms. Couvillon filed an unsworn opinion letter from a realtor based on a drive-by inspection of the Property. The realtor estimated the value of the Property would be in the range of $950,000–$1,100,000 as at April 28, 2021.
21Mr. Coughler disputes the realtor’s estimate, and does not accept this as a proper valuation of the Property. He does not suggest that the present value of the Property is far off from the realtor’s estimate, but says that there is not sufficient evidence before the court to provide an accurate valuation.
22Instead, Mr. Coughler filed an unsworn appraisal report of the historical value of the Property as at April 1, 2006. The appraisal states that the market value of the Property at that time was $225,000.
Analysis
Has the applicant established a presumptive right to the partition or sale of the Property?
23Ms. Couvillon has established a presumptive right to the partition or sale of the Property. There is no dispute that Ms. Couvillon is a registered joint tenant in the Property. A joint tenant has a presumptive right to partition or sale: Partition Act, s. 2; David v. Davis, [1954] O.R. 23 (C.A.).
24A court must compel the partition or sale unless the party resisting it demonstrates that there is sufficient reason for refusal. The court has very little discretion to refuse the relief. To justify refusal, the respondent must establish malicious, vexatious, or oppressive conduct: Silva v. Silva (1990), 1 O.R. (3d) 436 (C.A.); Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2004), 75 O.R. (3d) 478 (C.A.).
Would the partition or sale of the Property be oppressive to the respondent?
25Here, there is no allegation that Ms. Couvillon acted maliciously or vexatiously. Mr. Coughler argues that ordering the partition or sale of the Property would be oppressive because it would cause him hardship. He says it would cause him emotional hardship and leave him with no place to live or to store his belongings, which include his tools and vehicles.
26Oppression includes hardship. The court can refuse “partition and sale because hardship to the co-tenant resisting the application would be of such a nature as to amount to oppression”: Greenbanktree Power Corp., at para. 2.
27Mr. Coughler has not persuaded me that ordering the sale of the Property would cause him hardship to the point of oppression. Unlike Rainville v. Walsh, 2021 ONSC 446, at para. 10, Mr. Coughler would not be put out on the street. Even on a conservative estimate of the Property’s current value, he could use his portion to secure other accommodation. To accede to Mr. Coughler’s argument would disentitle most applicants from relief where the respondent is of advanced years. Nor is the length of time he lived on the Property a sufficient basis to deny relief. While no doubt difficult for Mr. Coughler, it does not meet the legal test for denying Ms. Couvillon her right to partition or sale as a joint tenant.
Is the respondent entitled to a constructive trust?
28To support his proposed outcome, Mr. Coughler argues that he is entitled to a constructive trust in the Property. He argues that since the couple separated he alone has paid down the mortgage, utility bills, household expenses, and property taxes. He contends that, since their separation, he has increased the equity in the Property through his sole contributions, and Ms. Couvillon should not get the benefit of this. Otherwise, she would be unjustly enriched. Thus, Mr. Coughler seeks a constructive trust from the date of the couple’s separation.
29Mr. Coughler contends that an equitable division would be to take the historical appraisal value of the Property in 2006 [1] (the year of the parties’ divorce) of $225,000, subtract $125,000 for the Property’s purchase price in 1994, and split the balance equally. This would net Ms. Couvillon $50,000.
30A constructive trust is an equitable remedy for unjust enrichment. To determine whether there has been an unjust enrichment, the court must consider: (a) whether Ms. Couvillon has been enriched; (b) whether Mr. Coughler has suffered a corresponding deprivation; and if so (c) whether there is a juristic reason for Ms. Couvillon being enriched at the expense of Mr. Coughler: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. This determination is fact specific. Barker v. Barker, 2011 ONCA 447, 278 O.A.C. 395 is not analogous.
31To award Ms. Couvillon 50 percent of the Property would unjustly enrich her, to the corresponding deprivation of Mr. Coughler. There would not be a juristic reason for this enrichment. This would amount to a windfall: she would benefit from all of Mr. Coughler’s interest and mortgage payments from separation until the mortgage was discharged. Although she left her equity in the Property at separation – and thereby assumed the risk that the market could fall as well as rise – she did not contribute to the Property in any other way since separation.
32But I cannot accept Mr. Coughler’s proposed remedy. It would be inequitable and would lead to Mr. Coughler’s substantial unjust enrichment to Ms. Couvillon’s detriment.
33Both parties knew throughout the intervening years that they were joint tenants in the Property and chose not to change their legal interest. Their legal interest in the Property should be given effect, so too should their choices. It would be inequitable to turn the clock back to 2006, as Mr. Coughler proposes.
34Mr. Coughler knew that Ms. Couvillon remained a joint tenant in the Property following their separation and divorce. The parties chose not to seek an equalization or division of property on their separation and divorce to save on legal fees. In the intervening years, Mr. Coughler could have sought partition or sale or purchased Ms. Couvillon’s share. He did neither. Instead, he was content with the status quo.
35For Ms. Couvillon’s part, I am not persuaded that she deliberately slept on her rights and sprung them on Mr. Coughler. As discussed, she pressed Mr. Coughler over the years to sell the property and pay her her share. He refused to do so.
36Granted, Mr. Coughler alone paid the interest and mortgage payments since the couple separated. But this does not establish that it would be equitable for him to reap the entire increase to the Property’s value since their separation. Ms. Couvillon left her equity in the house at separation, which would have allowed her to secure alternate accommodation. By Mr. Coughler’s own admission, the couple had no other assets at separation, so he could not have bought her out; they would have had to sell the Property to each take their share. And Ms. Couvillon left her equity in the Property until the present day, with a view to treating it as an investment. It would be inequitable to freeze her entitlement to 2006. She was risking her equity in the Property. She should benefit in some measure from the rise in the Property’s market value.
37Instead, I conclude that the fairest division is that Ms. Couvillon is entitled to 35 percent of the Property. This accounts for two factors that pull in different directions. First, this accounts for Mr. Coughler’s payments of interest and principal on the mortgage from separation until the mortgage was discharged. He took the entire burden of paying them for little over half of a 25-year mortgage amortization period. Second, this accounts for Ms. Couvillon’s renewal of the mortgage in 2016 and 2018, thereby risking her credit and allowing Mr. Coughler to continue to reside in the Property. He did not have the means to buy out her share in 2016 or 2018. Mr. Coughler therefore derived a benefit from Ms. Couvillon remaining a co-mortgagor.
38I do not make any deduction for Mr. Coughler’s payment of utilities or property taxes because he benefited from having the Property as accommodation and for his business. Nor did he improve the Property in the period following the parties’ separation.
Partition or sale?
39There is a presumption in favour of partition unless the parties agree, or the court concludes that a sale is more advantageous to the parties or that the land is not suitable for partition: Partition Act, s. 3(1); Garfella Apartments Inc. v. Chouduri, 2010 ONSC 3413, 102 O.R. (3d) 624 (Div. Ct.), at para. 11.
40The parties did not specifically address partition versus sale and there is insufficient evidence for me to determine whether a sale is more advantageous to the parties over partition. If the parties cannot agree to which relief – partition versus sale – is preferrable, they may each make written submissions of no more than 750 words. The applicant shall have thirty days from the release of this decision and the respondent thirty days thereafter to file written submissions, supported by any evidence they may wish to rely on.
Disposition
41The parties are joint tenants in the Property. I find there is a constructive trust in the Property in favour of Mr. Coughler. Mr. Coughler has a 65 percent equitable interest in the Property; Ms. Couvillon has a 35 percent equitable interest in the Property.
42I will await the parties’ submissions on partition versus sale. Given their advancing years, I encourage the parties to reach an agreement in this regard and avoid further litigation.
43Costs can be addressed after the remaining issue of partition versus sale is resolved.
Justice Owen Rees
Released: August 18, 2023
1As discussed, there was some uncertainty regarding the date of the parties’ separation. Mr. Coughler relies on an appraised value of the Property as at 2006, the year of the parties’ divorce. There is no suggestion anything turns on the precise date used for the valuation, so for simplicity I will refer to 2006 because this is the only evidence of the historical valuation of the Property and is the year used by Mr. Coughler in his proposed calculations.