SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Lisa Shouldice, Applicant
AND
Robert Roland Shouldice, Respondent
BEFORE: J. Mackinnon J.
COUNSEL: Wade L. Smith, Counsel, for the Applicant
Tania Pompilio, Counsel, for the Respondent
HEARD: March 9, 2015
ENDORSEMENT
1At the conclusion of the oral hearing on March 9, I endorsed the record with several directions, including partial distribution of funds in trust, terms of disclosure for both parties and limited questioning to be conducted if at all, within 30 days. I reserved my decision on the primary issues before me, namely whether one or both of two jointly owned real properties should be ordered sold before trial. I advised counsel that I would reserve my decision for two weeks to enable the parties to determine whether they could agree to mutually satisfactory terms for the purchase or sale of either or both properties between themselves. I also required each party to provide me with a comparative Net Family Property (NFP) statement within the same time frame.
2No such agreement has been reached. I have received a draft NFP statement from each litigant. Each contains a number of entries marked “to be determined” (TBD). The applicant’s draft suggests the respondent should pay her an equalization payment of $16,279.02. The respondent’s suggests the applicant will owe him $39,159.69.
3The properties in question are the matrimonial home, currently occupied by the applicant and children, and a rental property, currently occupied by the respondent. Title to both properties is joint.
4The applicant seeks the sale of the rental property with a view to applying her equity in it against other debt, so that she might be able to retain the matrimonial home as part of the final outcome of the case. She says that as a joint owner she has a right to sale under the Partition Act, R.S.O. 1990, c. P.4 and that there are no competing Family Law Act (FLA) claims that would require the issue to be postponed to trial.
5The respondent wants to retain the rental property as a place for him and the children to reside. He also opposes its sale because he is of the belief that the applicant will owe him an equalization payment; he would like the rental property transferred to him in partial or full satisfaction of the equalization payment.
6The respondent sought the following order in his notice of motion (Continuing Record, Volume 4, Tab 4, items 1 a. and b.):
- An Order under section 9 of the Family Law Act that:
a. The Applicant shall obtain refinancing of the mortgage registered against the jointly-owned matrimonial home (6265 McCordick Road, North Gower) in an amount that is sufficient to extinguish the existing liability registered against this property and also satisfy the equalization payment owed to the Respondent. Thereafter the Respondent shall transfer his interest in the property to the Applicant.
b. The Respondent shall obtain refinancing of the mortgage registered against the jointly-owned rental property (6916 Gallagher Road, North Gower) and thereafter the Applicant shall transfer her interest in the property to the Respondent in order to satisfy the balance of the equalization payment owed to the Respondent the details of which are set out in the Respondent’s affidavit.
7These terms are well beyond the ability of the court to order. The scheme of the FLA is to equalize the value of family property, not to change the ownership of assets. The court does not have the power to rearrange assets between spouses. The authority to transfer ownership of property between spouses is found in s. 9 (1)(d)(i) of the FLA:
- (1) In an application under section 7, the court may order,
(d) that, if appropriate to satisfy an obligation imposed by the order,
(i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years…
8In Webster v. Webster, 1997 CanLII 12119 (ON SC), 1997 CarswellOnt 815 (Gen.Div.) the court held at paras 83 and 84:
83Thus, orders for partition or sale should not be issued as a matter of course before the resolution of Family Law Act issues. If there is potential prejudice to the claims put forward at trial a partition or sale application should not be granted before the trial. In my view the principle is equally applicable to jointly owned assets which are not “matrimonial homes” as defined in the Act.
84There is potential prejudice to Mrs. Webster if the Bermuda property is partitioned or sold prior to the determination of the family law issues in dispute. I note that in those cases referred to by counsel none of them considered the prejudicial effect of a partition and sale to a possible remedy to satisfy equalization under s. 9(1)(d)(i). Mrs. Webster would be deprived of a potential remedy available to her for the satisfaction of her equalization entitlement. This deprivation, in my view, is sufficient prejudice upon which to deny on an interim basis, an application for partition pursuant to the Partition Act and therefore would be sufficient grounds to grant an injunction preventing partition or sale if the property were located in Ontario.
9In my view, given that the respondent's current draft NFP statement shows an equalization payment owing to him of only $7,000 less than the value of the applicant’s one half equity in Gallagher Road, and since there are so many TBDs in both NFP statements, I find it would be premature to order the sale of this property on an interim basis. Making what is after all a final order for sale now, on an interim basis, may prejudice a legitimate claim the respondent could advance at trial under the FLA.
10Additionally, in May 2014 the parties consented to a temporary order providing exclusive possession of Gallagher Road to the respondent, “until further agreement or order of the court and in the interim this property is not to be not to be listed for sale”. Although not so described, this is an order available under s. 12 of the FLA which provides for the interim preservation of property if necessary for the protection of a spouse’s interests under the FLA.
11The temporary order provided exclusive possession of the matrimonial home to the applicant “until further order of the court”. She is also claiming a final order for exclusive possession. While her current estimate of the equalization payment owed her is only $16,279, and one half the equity in the matrimonial home is $168,895, the value of the respondent’s business, Shouldice Plumbing, remains in issue. Accordingly the equalization payment may change in her favour, and she may have the ability to seek an order at trial under s. 9 of the FLA for the transfer of the respondent’s equity in the matrimonial home to her in full or partial satisfaction of it.
12For these reasons the motions for sale of these two jointly owned properties are both dismissed.
13The respondent also sought an order releasing $16,000 to him from the remaining funds in trust. His submission is that he incurred a debt during cohabitation and worked it off post separation. He would like to be reimbursed. The debt was not joint. The applicant questions whether there was a debt and if so, whether it was repaid. This order is also denied.
14Neither party has been successful. It appears to me that there may well be no costs sought by either of them. However if costs are sought I will permit the parties to file brief written submissions on costs within 10 working days from today, failing which the order shall issue on a no costs basis.
J. Mackinnon J.
Date: March 25, 2015
CITATION: Shouldice v. Shouldice, 2015 ONSC 1948
COURT FILE NO.: FC-13-2819
DATE: 20150325
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Lisa Shouldice, Applicant
AND
Robert Roland Shouldice, Respondent
BEFORE: J. Mackinnon J.
COUNSEL: Wade L. Smith, Counsel, for the Applicant
Tania Pompilio, Counsel, for the Respondent
ENDORSEMENT
J. Mackinnon J.
Released: March 25, 2015