ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-09-0316-03
DATE: 2014-04-24
B E T W E E N:
Tammy Ley Watkins,
Chris Arnone, for the Applicant
Applicant
- and -
Christopher Charles Watkins,
Respondent
The Respondent not attending on this motion
Jasmine Watkins,
Nancy Erickson, for Jasmine Watkins
HEARD: April 17, 2014,
at Thunder Bay, Ontario
Mr. Justice D. C. Shaw
Reasons On Motion
[1] On August 9, 2013, Justice Wright ordered, inter alia, that:
“8. The Respondent shall grant, execute, and deliver to the Applicant’s counsel the collateral mortgage against the Respondent’s home, municipally known as 149 Cadillac Circle, to stand as security for all indebtedness, now or in the future owing to the Applicant under any court order granted in this proceeding, and in particular for existing and future child support, spousal support, legal costs, interest, and costs pertaining to enforcement of the security.
The Respondent shall execute and deliver to the Applicant’s counsel the collateral mortgage documentation within 5 days of the date of receipt of the document for his signature, failing which the Sheriff of the Judicial District of Thunder Bay is hereby vested with authority and appointed as trustee for the Respondent to execute and deliver such security documentation forthwith on behalf of the Respondent.
A copy of this Order shall be registered on title to the Respondent’s home, municipally known as 149 Cadillac Circle, in the applicable land registry office.”
[2] The respondent signed the collateral mortgage as required by the order. However, because the respondent is married and the home at 149 Cadillac Circle, which is solely owned by the respondent, is a matrimonial home within the meaning of s. 18(1) of the Family Law Act, the Land Registrar’s office took the position that the respondent’s wife must consent to the collateral mortgage or the applicant must obtain a court order dispensing with the need for the consent of the respondent’s wife.
[3] The respondent advised counsel for the applicant that his wife, Jasmine Watkins, was not prepared to consent to registration of the collateral mortgage.
[4] This is a motion to authorize registration of the collateral mortgage and to dispense with the consent of the respondent’s wife.
[5] The respondent’s wife is represented on the motion, by counsel, Nancy Erickson. Ms. Erickson advises that Jasmine Watkins is prepared to consent to registration of the collateral mortgage, but only to the extent of the present arrears of child support owed by the respondent to the applicant. Jasmine Watkins is concerned that, at some time in the future, the home could be sold under the collateral mortgage to the prejudice of her and the child which she and the respondent have. She states that although title to the home is solely in the name of the respondent, she has put significant work into the home.
[6] Section 21(1) of the Family Law Act provides:
“21(1) No spouse shall dispose of or encumber an interest in a matrimonial home unless,
(a) the other spouse joins in the instrument or consents to the transaction;
(b) the other spouse has released all rights under this Part by a separation agreement;
(c) a court order has authorized the transaction or has released the property from the application of this Part; or
(d) the property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled.”
[7] Section 21(5) provides:
“21(5) This section does not apply to the acquisition of an interest in property by operation of law or to the acquisition of a lien under section 48 of the Legal Aid Services Act, 1998.”
[8] In my view, this issue is governed by the decision of the Supreme Court of Canada in Maroukis v. Maroukis, 1984 76 (SCC), [1984] 2 S.C.R. 137 (S.C.C.).
[9] In Maroukis, the Court dealt with s. 42(1) of the Family Law Reform Act. The wording of the Family Law Reform Act section 42(1) was very similar to the wording of s. 21(1) of the Family Law Act. It provided:
“42.(1) No spouse shall dispose of or encumber any interest in a matrimonial home unless,
(a) the other spouse joins in the instrument or consents to the transaction;
(b) the other spouse has released all rights under this Part by a separation agreement;
(c) the transaction is authorized by a court order or an order has been made releasing the property as a matrimonial home; or
(d) the property is not designated as a matrimonial home under section 41 and an instrument designating another property as a matrimonial home of the spouses is registered under section 41 and not cancelled.”
[10] In Maroukis, the wife argued that an execution taken by a creditor against the husband constituted an encumbrance within the meaning of s. 42(1) of the Family Law Reform Act.
[11] Justice McIntyre, writing for the Court, held, at p.6:
“… Furthermore, the prohibition in s. 42 is against a disposition or an encumbrance of an interest in a matrimonial home by a spouse. Giving those words their plain meaning in the context in which they are used in s. 42, it is my opinion that they cannot be extended to include an execution taken by creditors of one of the parties to the marriage.”
[12] In my view, the purpose of s. 21(1) is to limit the right of a spouse to encumber a matrimonial home. The purpose is not to limit the right of the court to encumber the home to secure the respondent’s financial obligations to the applicant.
[13] This interpretation is reinforced by s. 21(5) which provides that s. 21(1) does not apply to the acquisition of an interest in property by the operation of law. As noted in Black’s Law Dictionary, Eighth Edition, “operation of law” is the means by which a right or liability is created for a party, regardless of the party’s actual intent.
[14] Here, the court created the liability of the collateral mortgage, irrespective of the respondent’s wishes. The encumbrance arose by operation of law, not by the action of the respondent. In my opinion, section 21(1) restricts a spouse’s intentional act to encumber a matrimonial home, but it does not extend to restrict the jurisdiction of the court to impose a charge against the matrimonial home to enforce legal obligations of the titled spouse.
[15] In submissions, counsel for Jasmine Watkins conceded that the collateral mortgage ordered by Justice Wright arose by operation of law. If so, it must follow that section 21 (1) is not applicable to the collateral mortgage ordered and that there is therefore no requirement that Jasmine Watkins must consent to registration of the change.
[16] For the reasons given, an order shall issue that:
(1) The collateral mortgage described in paragraphs 8 and 9 of the order of the Honourable Justice J. deP. Wright, dated August 19, 2013, shall be registered on title against the respondent’s home known municipally as 149 Cadillac Circle, Thunder Bay, Ontario, and legally described as PCL 3-1 SEC 55M523 SRO; LT 3 PL 55M523 McIntyre; S/T F6134 Thunder Bay.
(2) The consent of Jasmine Watkins to the registration of the said collateral mortgage is dispensed with.
(3) The respondent shall forthwith execute all documents as may be necessary to permit registration of the said collateral mortgage and shall deliver the original signed documents to counsel for the applicant not later than 4:00 pm April 30, 2014.
(4) The applicant shall have her costs of this motion as against Jasmine Watkins. Counsel for the applicant, Chris Arnone, and counsel for Jasmine Watkins, Nancy Erickson, shall contact the Trial Co-ordinator with 20 days to arrange a date to speak to the quantum of costs unless the quantum of costs has otherwise been agreed upon.
“Original Signed By”
The Hon. Mr. Justice D. C. Shaw
Released: April 24, 2014
COURT FILE NO.: FS-09-0316-03
DATE: 2014-04-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Tammy Ley Watkins,
Applicant
- and -
Christopher Charles Watkins,
Respondent
Jasmine Watkins,
DECISION ON MOTION
Shaw J.
Released: April 24, 2014
/mls/nf