ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 26741/15
DATE: 2015-9-30
BETWEEN:
LORNE LANCE MITCHELL
Plaintiff
– and –
EVA LEACH, also known as EVA MITCHELL, and GERALD P. MAICH
Respondents
P. Skeggs, Counsel for the Plaintiff
R. MacRae, Counsel for the Defendant, Eva Leach, also known as Eva Mitchell
HEARD: August 20, 2015
RULING ON MOTION
RASAIAH J.
OVERVIEW
[1] The Plaintiff is seeking:
(a) an order pursuant to the Partition Act R.S.O. 1990, Chapter P.4, directing that the matrimonial home be listed for sale with Broker John Filipetti of Castle Realty (2000) Ltd. at a list price to be determined by the selected realtor, acting reasonably;
(b) if the order for sale is granted, an order that 50% of the proceeds of the sale be paid out to the Plaintiff, and that the balance of the proceeds be paid into Court to the credit of this action; and
(c) if the order for sale is granted, an order, that if the following articles are located, namely item 10, 11, 21, 22, 26, 31, 34, 37, 38, 39, 42, 43, 44, 45, 46, 48, and 49 set out in Exhibit “A” of the Affidavit of Eva Leach, sworn July 30, 2015, these articles shall be returned to him.
The Parties
[2] The parties were married August 31, 2007.
[3] The Plaintiff is 84 years of age. The Defendant Leach is 78 years of age. The Plaintiff was 76 at the time of the marriage and the Defendant Leach was 71.
[4] The Defendant Leach is the Plaintiff’s third wife. His first wife passed away in September of 1993 after 41 years of marriage. His second wife passed away as a result of cancer in 2005 after 10 years of marriage.
[5] The parties separated April 22, 2013 after five years and eight months of marriage.
The Matrimonial Home
[6] The parties moved to 18 Tilley Road, Sault Ste. Marie, Ontario (“matrimonial home”) shortly after their marriage, namely December of 2007.
[7] The Plaintiff owned the matrimonial home prior to the marriage. He purchased the matrimonial home on or about May 26, 1968. It was his home for approximately 45 years where he resided with his two previous spouses. He left the matrimonial home after the date of separation. The Plaintiff says the Defendant Leach demanded that he leave the property. He says he did so to keep the peace, rather than have an argument with the Defendant Leach. This is contested by the Defendant Leach.
[8] The Plaintiff moved in with his daughter. He will continue to reside with her pending the outcome of this matter.
[9] The Plaintiff believes the matrimonial home to be valued at $300,000.00 to $400,000.00.
[10] The Defendant Leach has resided in the matrimonial home since the date of separation, for approximately two and one-half years.
[11] The Defendant Leach’s permanently disabled adult daughter resides in the lower level apartment of the matrimonial home. The Defendant Leach’s daughter had moved into the matrimonial home sometime prior to the parties’ separation. She claims the Plaintiff actively encouraged her daughter to move into the lower level of the home so that both the Plaintiff and Defendant Leach could assist her. Further, by moving into the matrimonial home, her daughter’s rent reduced from $800.00 to $450.00. Defendant Leach claims the Plaintiff advised her daughter she could stay there as long as she wanted to. The Plaintiff says this was not the case. This is contested.
[12] The Defendant Leach stated that her daughter is totally disabled and requires specialized accommodation in order to maintain as independent a lifestyle as possible given her disabilities. Her daughter receives disability income of approximately $1,000.00 monthly.
[13] The home is mortgage-free.
Marriage Contract dated August 23, 2007
[14] The Plaintiff says that eight days prior to their marriage, the parties signed a marriage contract dated August 23, 2007 (“contract one”). He further says the contract one was prepared by Defendant Maich on instruction of his client, Defendant Leach. The Plaintiff was represented by Mr. Laidlaw.
[15] Contract one provides that the matrimonial home will not be shared equally.
[16] Contract one provides that no agreement to vary it is binding unless made in writing; signed by the parties; and witnessed.
[17] The Plaintiff says that he was vitally concerned with protecting his full interest in the matrimonial home from any claims from the Defendant Leach should they marry. This concern, he says, largely drove the preparation of contract one.
[18] The Defendant Leach states that she did not sign contract one before marriage. She says she signed it October 22, 2007 after being told her marriage would be annulled if she did not. She claims no consideration passed in respect of the execution of contract one. This is contested.
[19] As to conflict as to when contract one was signed, the Plaintiff states that no matter what date it was signed, by paragraph 4 of contract one, the effective date of contract one is August 23, 2007.
Matrimonial Home Title Changes
[20] The Plaintiff claims that on or about January of 2008, the Defendant Maich at the instruction of his client, Defendant Leach, prepared a conveyance to transfer the matrimonial home in to the joint names of the parties for nominal consideration of $1.00. The Defendant Maich and/or his staff, the Plaintiff says, attended with him for the signing. The transfer was registered February 8, 2008. After separation, the Plaintiff severed the joint tenancy on or about April 29, 2014.
[21] The Plaintiff in his statement of claim is asking for, amongst other things, against the Defendant Leach:
(a) A declaration that the conveyance of the property registered February 8, 2008 be declared void and of no force and effect;
(b) Further or in the alternative, a declaration that the Defendant Leach holds her interest in the title to property in trust for the Plaintiff;
(c) An order requiring the Defendant Leach to re-convey and restore title to the property back into the sole name of the Plaintiff;
(d) An order directing the Land Registrar to restore title to the property into the sole name of the Plaintiff;
(e) An order restoring possession of the property to the Plaintiff; and
(f) An order for the sale of the property with 50% of the proceeds being paid to the credit of this action and 50% to be paid to the Plaintiff.
[22] The Plaintiff states that he neither appreciated nor understood the effect of executing the transfer nor was same explained to him by Defendant Maich. He has made a claim against the Defendant Maich for being in a conflict with respect to the transaction; undermining the contractual terms of contract one; and conduct falling below a reasonable standard of care of a prudent solicitor.
[23] The Plaintiff claims that the conduct of Defendant Maich permitted Defendant Leach to take unlawful advantage of him, to deprive him of his property.
[24] The Plaintiff states at no time did he form an intention to transfer or gift any of the property to Defendant Leach. Against the Defendant Leach, the Plaintiff asserts that: the Defendant Leach exerted undue influence over him in respect of the execution of the transfer in that she stood in a special relationship to him at the time; she dominated him during the course of the relationship; she designed to deprive him of an interest in the property to her own benefit; she brought him to Defendant Maich for this purpose; she was aware he had his own solicitor; and she engaged in a course of conduct clearly designed so that the Plaintiff could not form his own full, free, and informed thought regarding the substance of the transfer.
[25] The Defendant Leach denies all of the Plaintiff’s allegations. As for the transfer, the Defendant Leach states that she did as the Plaintiff asked. She says that she did not participate or initiate the transfer discussions or participate in any fraudulent transaction. The Plaintiff, she says, unilaterally undertook all of the necessary steps for the transfer. She denies any domination. She further claims that the Plaintiff wanted her to have the home in the event of his death and that this is what prompted the transfer. She states the transfer occurred for love and affection; to provide financial security for her. The parties she states resided in the home as a married couple. She contributed substantially to the financial costs of the operation of the home and that the separation was a complete surprise and shock to her.
[26] The Defendant Maich denies the allegations made against him. His statement of defence indicates that the Plaintiff as an experienced and successful businessman advised Defendant Maich that he wanted the Defendant Leach to own the matrimonial home if he died and instructed him to prepare the transfer; that the Plaintiff declined his suggestion to seek advice or to have the work performed by another lawyer; that the legal effect of the transfer was explained to the Plaintiff; that the Plaintiff orally and in writing confirmed his acknowledgement and agreement; and that the Plaintiff at all times was capable, competent and knowledgeable as to the nature and effect of his instructions.
Marriage Contract dated January 8, 2008
[27] The parties appear to have executed a new/amending marriage contract dated January 8, 2008 (“contract two”).The Defendant Leach stated that, after having sworn her affidavit of June 24, 2015, she reviewed her documents and located contract two. The Defendant Leach claims that the Plaintiff, like the transfer of the matrimonial home, arranged to have contract two completed by his counsel Mr. Laidlaw.
[28] Contract two appears to be signed by both parties. It includes an acknowledgement of the Plaintiff of having obtained independent legal advice from Mr. Laidlaw and that the contract was being entered into without any undue influence, fraud or coercion.
[29] It appears that contract two was witnessed by the same person by looking at the signatures. It is suggested that the witness was Defendant Maich. There is no information from Mr. Maich before me confirming that or denying that.
[30] Contract two contains terms excluding the matrimonial home from the net family property exclusion clause and “waiver of interest/rights to share in” clause. In respect of the matrimonial home, contract two contains a clause setting out that the home is to be shared equally and includes a term requiring the Plaintiff to prepare and sign a deed to put the home into both parties’ names as joint tenants.
[31] The Plaintiff says he has no recollection of signing contract two or meeting with Mr. Laidlaw regarding it.
[32] The time between the signing of contract one and contract two is only, approximately three and one-half to four and one-half months, depending on what date will be found as the date contract one was executed.
[33] At the time of the argument of the motion, the Plaintiff, on the basis of privilege, had not yet elected to obtain and/or confirm within the file of/ or with Mr. Laidlaw, the circumstances if any, that may enlighten the parties on the circumstances surrounding the making and execution of contract two. The Defendant Leach has asked for this information.
[34] The Defendant Leach argues that contract two is the valid and governing contract between the parties and that she is entitled to an interest in the matrimonial home and other joint assets as set out in contract two. There now exists, issues as to which contract is the valid and governing contract between the parties, which will affect the outcome of the parties’ claims and/or defences.
Financial Circumstances of the Parties
[35] The Plaintiff says he requires funds to assist him with his daily necessities and this is why he is asking for half of the proceeds of the sale of the home.
[36] The Defendant Leach challenged the Plaintiff’s statements that he has fallen on hard times or is in need. She pointed to a 25% share ownership of Town and Country Towing Limited which continues to operate; and a 100% interest in the property municipally known as 1156 Great Northern Road, Sault Ste. Marie, a property from which this towing company operates.
[37] Further, the Defendant Leach says that the Plaintiff removed $31,000.00 from their joint savings and an unknown amount from another joint savings account. She further stated that she believed that the Plaintiff resided with a new partner and not with his daughter.
[38] The Defendant Leach says it would be an incredible undue hardship upon her to be required to move from the home to another home before the trial of this matter has been finalized. She stated that she lives on fixed income and does not have any disposable additional monies to purchase or to rent accommodations.
[39] The Defendant Leach stated that her daughter’s disability income is $1,000.00 monthly and that her daughter pays $450 in rent to her.
[40] The Defendant Leach also stated that, given the subsidized rate that she and the Plaintiff (she adamantly states) agreed to regarding her disabled daughter residing in the lower level apartment, it would be virtually impossible in Sault Ste. Marie for her disabled daughter to find alternative accommodations on a temporary basis.
[41] In terms of purchasing the home should it be listed for sale, the Defendant Leach says she cannot borrow the money given (a) her limited and restricted income and (b) the Plaintiff’s claim that she has no interest in the property. She states that if contract two is found to be the valid and governing contract (which has yet to be determined) between herself and the Plaintiff, that she may be able to borrow funds to purchase the matrimonial home because she would have $150,000.00 to $200,000.00 in equity to leverage, if the Plaintiff’s estimate of the value of the matrimonial home is correct.
[42] The Plaintiff did not deny removing $31,000.00 but indicated that he did not believe he removed any funds belonging to the Defendant Leach.
[43] The Plaintiff denied that he was residing with another woman.
[44] As to his property interests, the Plaintiff replied in simply stating that these were interests he has had for some time and that the income from them was minimal. Particulars were not provided.
[45] The Plaintiff stated that the Defendant Leach was not as financially burdened as she indicated. He stated that she is in receipt of a survivor pension in respect of her deceased former spouse’s pension; she is in receipt of C.P.P.; she is in receipt of a pension she earned through her previous employment; she has capital from the sale of her Manitoulin Island home; and she lives with her disabled daughter who is in receipt of disability income. The Defendant Leach acknowledged having pension income but did not set out the particulars.
Other
[46] The Defendant Leach has not initiated a support claim against the Plaintiff.
[47] The Defendant Leach has not initiated a claim for exclusive possession of the matrimonial home.
[48] Support is not payable by either party to the other in either of contract one and two.
[49] Examinations for discovery and/or cross-examination on the affidavits filed by the parties have not yet occurred.
Position of the Plaintiff
[50] The Plaintiff argues that the court should compel the sale of the matrimonial home. It is his prima facie right pursuant to the Partition Act, which he states applies. He says he was essentially forced out of his home; is in need of funds for daily living; and believes it is easier to find a purchaser in the summer months. He says at best, if the Defendant Leach is successful, he is still entitled to 50% of the value of the home by contract two. He states the law provides that the court has limited discretion to refuse the application. He states the evidence does not support the court exercising its discretion.
Position of the Defendant Leach
[51] The Defendant Leach argues that the Partition Act does not apply. She says it does not apply because the Plaintiff is claiming to be the owner legally and equitably of the entire estate in his statement of claim. The Defendant Leach claims that what the Plaintiff is really seeking is an interlocutory mandatory injunction. The Defendant Leach states that the Plaintiff has a heavy onus to obtain such an injunction. To succeed, the Plaintiff must establish a strong prima facie case, meaning, not only satisfying the court that there is a serious issue to be tried, but also that the Plaintiff is clearly right and almost certain to be successful at trial, which she says he cannot establish. Further, this remedy is an extra-ordinary one, to be granted only in a clear case, for the purpose of preventing an irreparable injury from occurring before the court has had a chance to decide the case.
[52] The Defendant Leach says she will be prejudiced and suffer irreparable harm if the sale was ordered. If contract two was found to be the valid and governing contract, her ownership interest would be valid; she would have a 50% interest in the value of the matrimonial home and other joint assets, such as one half of the $31,000.00 the Plaintiff removed from the joint account; and she would be in a position to purchase the home, which she is not in at present. She further states that she has no alternative suitable accommodations to move to for herself (on her limited income); and her permanently disabled daughter (who also has limited income) who resides in the lower level of the home at a significant subsidized rate and which apartment meets her needs. An order for sale would force the Defendant Leach to move at 78 years of age, after having resided in the matrimonial home since the date of separation for two and one-half years. She says the Plaintiff is not in financial need or without a home to reside in. She has requested the disclosure of Mr. Laidlaw’s file on the issue of contract two’s validity.
[53] Alternatively, if the Partition Act does apply, the Defendant Leach states that the order ought not to be made. All of the foregoing arguments she made equally establishes sufficient reasons to refuse the application for partition and sale.
LAW AND ANALYSIS
[54] I am satisfied that the Partition Act applies to this motion. Section 2 of the Act provides as follows:
All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. R.S.O. 1990, c. P.4, s. 2.
[55] Based on the manner in which title is currently held; the claims of each of the Plaintiff and the Defendant Leach to an interest in the matrimonial home; and the fact that they are married, they meet the section at the very least, as parties interested in the matrimonial home as contemplated by the Act.
[56] The Court of Appeal addressed partition and sale in Silva v. Silva (1990), 1990 5400 (BC CA), 30 R.F.L. (3d) 117, 75 D.L.R. (4th), 1 O.R. (3d) 436 (C.A.); and Martin v. Martin (1990), 1990 12225 (ON SC), 31 R.F.L. (3d) 210 (Ont. Ct. Gen. Div.), aff’d at (1991), 1991 12830 (ON SCDC), 34 R.F.L. (3d) 173 (Ont. Div. Ct.), rev’d in part at (1992), 1992 7402 (ON CA), 38 R.F.L. (3d) 217 (Ont. C.A.). The Court recognized that a joint owner has a prima facie right to partition and sale; however, as stated by the Court in Silva at para. 23:
... where substantial rights in relation to jointly owned property are likely to be jeopardized by an order for partition and sale, an application under the Partition Act should be deferred until the matter is decided under the F.L.A. Putting it more broadly, an application under s. 2 should not proceed where it can be shown that it would prejudice the rights of either spouse under the F.L.A.
[57] In Davis v. Davis 1953 148 (ON CA), the Court stated:
…There are two cases … that give some help on this matter: Szuba v. Szuba, 1950 306 (ON SC), and Brown v. Brown, 1952 296 (ON SC). Both of them indicate that there is a prima facie right, which will not be denied unless there has been vexatiousness or oppressiveness, and that it is the conduct of the applicant for partition that must be considered in this connection.
[58] In Greenbanktree Power Corp. v. Coinamatic Canada Inc. 2004 48652 (ON CA), Laskin J.A. wrote:
…In our view, "oppression" properly includes hardship and that a judge 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.
[59] The onus is on the party resisting partition or sale to demonstrate sufficient reasons for refusal: Davis v. Davis, supra; Silva v. Bettencourt; Brienza v. Brienza 2014 ONSC 6942.
[60] In Garfella Apartments Inc. v. Chouduri 2010 ONSC 3413, the court looked at the test for oppression.
[61] In Klakow v. Klakow 1972 1883 (ON SC), hardship was found where the responding spouse would otherwise be left without a place to live.
[62] In my view, on the particular facts and circumstances of this case, the court’s discretion ought to be exercised to refuse the application for sale.
[63] I find that the Defendant Leach has established jeopardy to her substantial rights given the claims she has made, including that she was a true joint owner of the matrimonial home pursuant to a valid marriage contract and transfer, and that this will amount to hardship and oppression if an immediate sale is ordered.
[64] The Plaintiff has chosen, as he is entitled, not to waive his solicitor client privilege in respect of Mr. Laidlaw’s information and/or files. He has stated that he will sometime in the future want to investigate that.
[65] If contract two is found to be the valid and governing contract, the Defendant Leach’s title and interest in the matrimonial home may be confirmed.
[66] I am mindful of the cases which indicate that a co-owner’s desire to buy out the interest of the other is not a bar to obtaining relief under the Act, but those cases are distinguishable.
[67] The Defendant Leach and her disabled daughter would be forced to move. Being forced to move in this particular case would be a hardship beyond mere inconvenience and financial difficulty.
ORDER
The Plaintiff’s motion for sale of the matrimonial home is dismissed.
The Plaintiff’s motion regarding certain chattels, since the sale was not ordered, is adjourned sine die, returnable on four days’ notice.
If the parties are unable to agree on the issue of costs, written submissions may be provided to the Court.
Rasaiah J.
Released: September 30, 2015
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LORNE LANCE MITCHELL
- and -
EVA LEACH, also known as EVA MITCHELL and GERALD P. MAICH
RULING ON MOTION
Rasaiah J.
Released: September 30, 2015