Court File and Parties

Court File No.: 14-60313 Date: 2017/07/21 Superior Court of Justice - Ontario

Re: Allan James Nolan, Applicant And Diane Vestergaard Nolan, Respondent

Before: Justice Engelking

Counsel: Barbara Thompson and Phil Augustine, Counsel for the Applicant John J. Cardill, Counsel for the Respondent

Heard: June 6, 2017

Endorsement

[1] Allan Nolan and Diane Nolan were married on June 29, 1990 and separated on August 31, 2012. There are five children of the marriage, the two eldest of whom, Carter (20) and Callum (17), live with Mr. Nolan, while the three younger, Macauley (16), Kaden (9) and Adam (7), live with Ms. Nolan in what was the matrimonial home at 1344 South Beach Boulevard, Greely, Ontario.

[2] Mr. Nolan seeks an order for immediate sale of the matrimonial home on the basis that the parties can no longer afford to keep it. Ms. Nolan opposes his request and seeks an order requiring Mr. Nolan to pay the fees of Collins Barrow to assess Mr. Nolan’s pre-marriage assets, which remain in dispute.

[3] For the reasons provided below, I grant an order for immediate sale of the matrimonial home, and I dismiss Ms. Nolan’s motion.

Sale of the Matrimonial Home

Facts

[4] Ms. Nolan has occupied the parties’ matrimonial home since the date of separation, originally with all five of the children. However, in the summer of 2013, Carter went to live with Mr. Nolan and his partner June Samson in a rental home in Nepean. In the summer of 2014, Callum also went to live with Mr. Nolan and Ms. Samson.

[5] Carter attends Bishops University in Sherbrooke, Quebec and returns for the summer; Callum has just completed grade 12 at Mother Teresa High School; Macauley has just completed grade 10 at St. Mark Catholic High School; and Kaden and Adam attend a Christian private school.

[6] For the past five years (less one month), Mr. Nolan has made the mortgage payments on the home to the RBC directly, originally for $2,278 per month and since April of 2017 for $2,226.05 per month. Mr. Nolan pays Ms. Nolan $3,500 per month in spousal support and $2,600 per month in child support. He deducts the amount directly paid to RBC from the monthly amount paid to Ms. Nolan.

[7] The overall cost of maintaining the home is between $3,117 and $4,000 per month with utilities.

[8] Mr. Nolan states that he rents with Ms. Samson, and for $2,600 per month ($1,300 being his share), he has adequate housing for all five children when they are with him. Ms. Nolan admits that there are rental accommodations in her neighbourhood for $2,500 to $3,000 per month which would likely be adequate for the family.

[9] Ms. Nolan has not been paying property taxes on the home and as of May 30, 2017 the tax arrears had accumulated to $44,378. With interest and penalties it will likely be higher at the point at which the home is sold.

[10] The following debts are currently registered against the home: a) the mortgage at or about $431,933; b) outstanding property taxes at or about $44,378; c) a RBC line of credit at or about $80,800; and d) a PC Writ at or about $16,000, for a total debt of over $570,000.

[11] The matrimonial home is the parties’ only significant joint asset. Ms. Nolan places the value of the house at $685,000, while Mr. Nolan values it at $750,000.

[12] Ms. Nolan also has additional credit card debt, which is in arrears or collections totalling approximately $59,800, and which is at risk of also possibly being registered against the home.

Analysis

[13] There is clear jurisdiction under the Partition Act to order the sale of jointly owned property, including a matrimonial home, prior to trial. However, an order for directing the sale of a matrimonial home before trial should only be made where, in all the circumstances, it is appropriate to do so. Additionally, an application for partition and sale should not proceed where it would prejudice the rights of either spouse under the Family Law Act (Martin v. Martin; Silva v. Silva).

[14] Ms. Nolan has not sought an order of exclusive possession of the matrimonial home on this motion, although she has claimed it in her Form 10 Answer. Thus, as in Keyes v. Keyes, 2015 ONSC 1660, Mr. Nolan’s request is effectively one for summary judgment. As such, I must determine if Ms. Nolan’s claim for exclusive possession of the matrimonial home raises a triable issue. I find that it does not.

[15] The criteria to be considered in determining whether to make an order for exclusive possession of a matrimonial home is contained in section 24(3) of the Family Law Act, and includes the following factors;

(a) The best interests of the children affected; (b) Any existing orders under Part I and existing support orders; (c) The financial position of both spouses; (d) Any written agreement between the parties; (e) The availability of other suitable and affordable accommodations; and (f) Any violence committed by a spouse against the other spouse and children.

[16] In this case, while Ms. Nolan did state the importance of the Christian Community School to Kaden and Adam, no particular evidence was led with respect to the effect a sale of the matrimonial home on the children’s best interests. The children are certainly integrated into their community, but like Justice Benotto in the case of Cox v. Adibfar, I had “no evidence as to why this particular house is necessary for the children’s best interests.” (para. 9)

[17] With respect to the second factor, there is support in place and being paid.

[18] The financial position of both spouses is significant in that neither can really afford to maintain the matrimonial home. More significantly, they both risk losing whatever equity remains in the home if more debt is secured against it. They also risk foreclosure by the City of Ottawa for the property taxes which currently remain unpaid.

[19] There is no written agreement between the parties in relation to the matrimonial home, and there has been no violence alleged between the spouses or by a spouse towards the children.

[20] As was mentioned previously, there appears to be other affordable and suitable accommodation in the same neighborhood which would permit the children to continue to attend the school and participate in the community in which they are so comfortable.

[21] As was stated by Benotto, J. in Cox v. Adibfar at paragraph 13: “The mere claim of exclusive possession does not create a triable issue where there is no factual basis for the claim.” I find that Ms. Nolan’s claim to permanent exclusive possession of the matrimonial home is not an issue that requires a trial, and as such, an order for partition and sale prior to trial would not be prejudicial to her.

[22] Ms. Nolan has also indicated that it would be her intention to buy out Mr. Nolan’s interest in the matrimonial home once the issue of equalization of the parties’ net family property has been determined. She argues that an order for the immediate sale of the home would prejudice her interests in this regard. However, the Ontario Court of Appeal has made it clear in Martin v. Martin that the court does not have statutory authority to make an order granting a spouse a right of first refusal. At paragraph 27, Osborne, J. A. noted: “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. As a matter of general principle, while a matrimonial home occupies a special and separate place in the statutory scheme established by the Family Law Act, once the matrimonial home is ordered to be sold, each spouse is entitled to receive fair market value for his or her interest in it.”

[23] It is difficult to envision how Ms. Nolan would be in a position to purchase the matrimonial home, even were she to be ultimately granted a substantive equalization, given the amount of debt currently registered against the home and the cost of Mr. Nolan’s interest in it. Additionally, this matter has not proceeded to settlement conference nor is it yet listed for trial. It is conceivable, given the current state of trial scheduling that this matter will not be heard for another year. At the rate that debt is currently being accumulated, it is equally conceivable that there will be no equity left in the home by the time the matter gets to trial.

[24] It is in the interest of everybody, including Ms. Nolan, that the house be sold such that the existing debts can be satisfied, and the parties can benefit from any remaining equity. Mr. Nolan has indicated through his counsel, moreover, that he would be prepared to have his half of the proceeds of the sale held in trust pending the trial of this matter. Ms. Nolan’s claim for an equalization payment is thus not jeopardized by an order requiring that the house be sold.

Interim Order for Disbursements

[25] Ms. Nolan disputes the pre-marriage assets claimed by Mr. Nolan, specifically in relation to his 50% ownership in 11 Countryside Green, Nepean, a $49,168 RRSP, and the value of his 75% ownership of Dante Furnishings Ltd.

[26] Mr. Nolan provided a report dated July 14, 2016 by S.R. Pittman regarding the value of Mr. Nolan’s interest in Dante Furnishings at the date of marriage. Ms. Nolan alleges that Mr. Pittman’s report is lacking in that the latter did not have sufficient information to accurately assess the value. Ms. Nolan further states that Mr. Nolan produced additional information concerning Dante Furnishings after the date Mr. Pittman’s report was released, which may or may not alter his findings.

[27] Ms. Nolan wishes to retain the services of Dave Clarke of Collins Barrow to prepare a report on the value of Mr. Nolan’s pre-marriage assets. Mr. Clarke’s services are estimated to cost between $10,000 and $15,000. Ms. Nolan is requesting an order from the court that Mr. Nolan be required to pay for the Collins Barrow report.

Analysis

[28] Pursuant to Rule 24(12) of the Family Law Rules, the court may make an order that a party pay an amount of money to cover part or all of the expenses of carrying on a case by the other party. The power to do so is discretionary and the discretion must be applied to further the primary objection of fairness. (Rogers, J. Stuart v. Stuart)

[29] The rule is intended to enable the court “to provide a level playing field, to ensure that all parties can equally provide or test disclosure, make appropriate valuations of net family property, make or consider offers to settle or prepare and proceed to trial.” (Boris v. Boris)

[30] In paragraph 29 of Woodburn v. Woodburn, 2016 ONSC 7000, Justice Emery summarized the principles applicable on a motion for payment of interim costs as follows:

1. The moving party must provide evidence to establish that, on the balance of probabilities, there is a prima facie case of sufficient merit to warrant pursuit;
2. The moving party must provide evidence that the interim payment of a specific amount of money for expenses to carry the case is necessary and the basis for the amount requested;
3. The moving party must demonstrate that she or he is incapable of funding the requested amounts.
4. The moving party must provide evidence that there are no resources available to fund the cost or that it would not be fair or reasonable to access resources for the litigation;
5. The court has discretion in special circumstances to level the playing field so that all parties have an equal and fair opportunity to engage the litigation process for a just determination of their issues.

[31] Ms. Nolan’s position is that the true value of Mr. Nolan’s pre-marriage assets will have a significant impact on the issue of equalization. This is no doubt the case, as that is the scheme contained in the Family Law Act with respect to net family property calculations. However, I am not convinced by the evidence before me that Ms. Nolan has a prima facie case of sufficient merit to warrant pursuit such that an order requiring Mr. Nolan to pay for Mr. Clarke’s engagement should issue. Nor am I convinced by the evidence that it is necessary.

[32] This is not a situation where Mr. Nolan has refused or provided no expert report regarding his pre-marital assets. He had them assessed by Mr. Pittman, as is his obligation. Mr. Pittman has acknowledged his duty to the court to provide non-partisan evidence. While Ms. Nolan may consider Mr. Pittman’s assessment faulty, I do not find that her basis for doing so is so compelling as to require Mr. Nolan to pay for a new one. Certainly, Mr. Pittman can be questioned on his methods, the information he had available to him in the conduct of his assessment and the reasons for the conclusions reached. While Ms. Nolan may wish to have a second opinion, as it were, I can see no justification to require Mr. Nolan to pay for it.

[33] Given my order with respect to the sale of the matrimonial home, moreover, in the event that Ms. Nolan wishes to obtain her own report, she may use her share of the proceeds of the sale to do so.

Order

[34] There shall be an immediate sale of the matrimonial home located at 1344 South Beach Blvd., Ottawa, Ontario on the terms set out in Schedule “A” to the Applicant’s Notice of Motion at Volume 3, Tab 1 of the Continuing Record.

[35] Mr. Nolan’s share of the proceeds from the sale of the matrimonial home shall be held in trust pending any agreement by the parties or further order of the court.

[36] The Respondent, Ms. Nolan’s, motion requesting an order for an interim disbursement is dismissed.

[37] The Applicant is entitled to costs for this motion. I have been provided with the parties’ bills of costs. If the parties cannot agree on costs then they may make written submissions not exceeding three pages together with any offers to settle within 15 days of the release of this decision.

Madam Justice Tracy Engelking Date: July 21, 2017