ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-12-0327

DATE: 2014-09-02

B E T W E E N:

Russell Scott Halls,

Mary Ann Currie, for the Applicant

Applicant

• and -

Laureen Frances Bennett-Halls,

Lauren Conti, for the Respondent

Respondent

HEARD: August 28, 2014,
at Thunder Bay, Ontario

J. dep. Wright, J.

Reasons For Judgment

Background

[1] This is an "interlocutory” motion brought by the wife for sale of jointly owned matrimonial property. That property consists of the matrimonial home which sits on 7.5 acres of land and a separate adjoining parcel consisting of another 7.5 acres of land.

[2] The husband opposes the motion.

Underlying Premises

[3] For purposes of this motion the parties agree that the amount of the equalization payment owing by the wife to the husband substantially exceeds the value of the wife’s equity in the property. Once an order for equalization is made the husband proposes to ask the court to vest the wife’s equity in him in partial satisfaction of the wife’s equalization obligation pursuant to s. 9(1)(d)(i) of the Family Law Act.

[4] As I understand it the wife would not oppose her interest being vested in the husband if certain terms were met:

1. the existing mortgage would have to be discharged so that she would have no continuing liability in that regard,
2. The order would have to provide that the husband advance the wife some money immediately to provide her with cash to enable her to move from the premises, (which sum could be added to the amount ultimately owing by the wife to the husband for equalization. The problem being that she needs cash, the equalization payment is being generated by her civil service pension which I understand she cannot access herself but which can be “rolled over” in part to the husband for purposes of equalization.)
3. There would have to be an agreement or a judicial finding regarding the value of the equity being transferred.  At the present time the wife suggests the total value in today’s rising market is $279,900 for the house and $99,000 for the vacant lot. The husband does not agree with this figure. In the absence of agreement the wife wants the value to be determined by the open market.
4. The vesting order was made expeditiously

Husband’s Position

[5] As I understand the position of the husband he:

1. accepts that the existing mortgage would have to be discharged before the land was vested in him, (his ability to refinance will presumably be no better after a trial than it is today.  Unless the property is sold to a third party the wife will have little if any cash to pay on equalization. Otherwise, satisfaction of the equalization owing will have to be effected by a transfer of property: pension and real estate. Presumably, if the husband can place a new mortgage on the house there is room to increase it somewhat to provide the wife with moving funds.)
2. argues that the value suggested by the wife is too high. 
3. argues that the effect of an order for sale would be to destroy the husband’s right to a trial of the vesting order issue. The court should not order the immediate sale of the property in the face of the husband’s request to have the property vested in him unless an order for sale (to a third party) would be the inevitable result of a trial. (Ames v. Bond (1992) 1992 14045 (ON CA), 39 R.F.L. (3d) 375 (CA);  Binkley v. Binkley (1988) 1988 8717 (ON CA), 14 R.F.L. (3d) 336 (CA))
4. argues that given the following factors it cannot be said that sale to a third party would be the inevitable result of a trial:

a) Thousands of dollars in real estate commissions (@ 4%) and other costs of sale can be saved by the couple by a vesting order,

b) there is a principle that in family law cases each party should normally be accorded the opportunity of buying out the property interest of the other (Dearing v. Dearing (1991) 1991 12812 (ON SC), 37 R.F.L. (3d) 102 ¶6; Martin v. Martin 1992 7402 (ON CA), 1992 8 O.R. (3d) 41 (CA),

c) there are benefits to the two young children of the marriage to have the continuity of one parent remaining in the former matrimonial home in a nice rural setting.

[6] The wife argues:

1. there is nothing in the Family Law Act to suggest that, absent consent, one spouse should have a special right to purchase the matrimonial home. (Martin v. Martin (1992) 1992 7402 (ON CA), 8 O.R. (3d) 41 (CA))
2. a litigant has a right to have his or her interest fairly and justly quantified by sale and if the other party wishes to exercise his or her right to buy, that party should be in a position of having to compete with any other interested purchaser. (Martin v. Martin (1992) 1992 7402 (ON CA), 8 O.R. (3d) 41 (CA))
3. The wife argues that given the following factors the order for sale should be made immediately:

a) The maintenance of a house and 15 acres of land in a rural area is a hardship upon her, especially when she is gainfully employed and caring for two children, ages 10 and 14

i. The wife has been left with the sole maintenance of the property,

ii. Issues such as snow plowing are burdensome,

iii. The house is heated by wood and oil. For reasons of economy wood is heavily relied upon and its use is labour intensive.

iv. The wife’s cash flow has been adversely impacted because of the failure of the husband to pay child support and to comply with a restitution order.

b) At the present time the real estate market is rising but that may change with the onset of winter.

c) In order to secure a home for her children in a rising market, given that she will have to vacate eventually anyway, the mother has made an offer on another house.

d) Given the fact that the equalization amount owed exceeds the value of the wife’s equity the husband has the means to purchase the house now if he makes an offer with which the wife agrees or which is ultimately found to be the highest bid.

e) In each case cited by the husband which postponed the issue of sale until trial either the ownership of the property was in issue or the resisting party was in possession of the property or had a triable claim for possession. These conditions do not exist in this case.

Conclusion

[7] I accept that two desires should be accommodated if possible: the husband’s desire to be accorded an opportunity to buy out the other and the wife’s right to receive fair market value for her property.

[8] I accept that while the general rule is that a joint owner has a prima facie right to sell (Latcham v. Latcham (2002) 10 May 2003 (CA)) when the jointly owned property is the matrimonial home the Family Law Act places the onus upon the moving party to establish that the consent of the resisting party is being unreasonably withheld. (Walters v. Walters (1992 8599 (ON SCDC), 92 D.L.R. (4th) 398).

[9] In this case, however, the question of sale is not in issue. Both parties want the property sold. What is in issue is the timing and terms of the sale.

[10] For the reasons argued by the wife she should be allowed to proceed with the sale of both parcels of land located at 1650 Hilldale Road, Gorham Twsp., on terms that allow the husband to inspect the property and make an offer before the parties become obligated to pay real estate commission

Terms

[11] Unless otherwise agreed between the parties:

1. The property shall not be listed for sale until  after 15 Sept. (Once the listing agreement is signed  the agent will be entitled to the commission no matter who purchases.)
2. The wife shall provide the husband with timely access to the house to inspect it so that he may make an offer before the house is listed.
3. Either the wife accepts the husband’s offer or she does not.
4. If the wife does not accept the husband’s offer the listing shall be with Royal LePage or such other realtor as the wife directs and shall be on a multiple listing basis.
5. The listing prices shall be $279,900 for the house and $99,000 for the vacant land.
6. The husband may submit further offers,
7. The husband shall be notified forthwith by the realtor of all offers to purchase that are made,
8. An offer for the amount of the listing price may be accepted but only five days after communicating it to the husband to allow him to make a significantly better offer.
9. The solicitor for the wife or that solicitor’s nominee shall have carriage of the sale.
10. Upon sale, the proceeds of sale shall be paid to the solicitor involved, in trust.  That solicitor shall pay the costs of sale and pay the balance into an interest earning account pending further order of the court. Arguments, if any, concerning how much of the wife’s money, if any, should be held as security for equalization may be made at that time.
11. An offer made by the husband is valid even if conditional upon the wife paying or giving credit for her equalization payment.
12. The trial judge may conduct an accounting as to the effect of the wife having made the husband’s share of the house-upkeep after separation, who should bear the cost of the real estate commission if it proves to have been unnecessarily incurred, as well as any other items that would ordinarily be subject to accounting.

[12] I may be spoken to regarding costs of this motion.

The Hon. Mr. Justice J. deP. Wright

Released: September 2, 2014

COURT FILE NO.: FS-12-0327

DATE: 2014-09-02

ONTARIO
SUPERIOR COURT OF JUSTICE

B E T W E E N:

Russell Scott Halls,

Applicant

• and -

Laureen Frances Bennett-Halls,

Respondent

DECISION ON MOTION

J. deP. Wright J.

Released: September 2, 2014

Final

/mls