Court File and Parties

COURT FILE NO.: FS-18-91326-00 DATE: 2018 09 19

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Roger Peterson - and - Althea Peterson

BEFORE: LeMay J.

COUNSEL: S. Maiato, Counsel for the Applicant E. Booth, Counsel for the Respondent

ENDORSEMENT

[1] This is a motion brought by the Applicant father for partition and sale of the matrimonial home. The Respondent mother brings a cross motion seeking exclusive possession of the matrimonial home as well as interim child support. On consent, the child support issue was adjourned.

[2] The parties separated in January of 2016. The Respondent has continued to live in the matrimonial home, where she runs an in-home daycare business. She has been running that business since 2004. She does not want the home sold before trial because she is advancing a claim for exclusive possession, and it would not be in the best interests of the children.

[3] The Applicant is currently employed on a part-time basis. He is seeking to have the matrimonial home sold so that he can pay off a significant amount of the debt that he has accumulated, and can find regular accommodation.

[4] For the following reasons, I have determined that the matrimonial home is to be listed for sale, subject to terms.

Facts

a) Background Facts

[5] Before commencing my outline of the facts, I note that this is a motion. There may ultimately be a trial in this matter. As a result, I have focused my analysis on the essential facts necessary to make a decision on this motion. Further, nothing in my findings of fact binds the trial judge in any way on the issues that remain for trial.

[6] The parties were married on August 13th, 2000, and separated on January 31st, 2016. This application was brought in January of this year, after the parties spent some time last year attempting to resolve the issues through mediation.

[7] There are two children of the marriage, boys aged 16 and 14. They attend the local secondary school in Brampton and are involved in activities at the school. The younger child has a form of sickle cell anemia, which necessitates some medical care from time to time. On occasion, issues with this condition can arise suddenly, which result in the younger child needing immediate attention from one or the other of his parents, even when at school.

[8] The underlying application addresses custody issues, as well as financial issues. However, given the age of the children, the focus of the litigation is on financial issues, and particularly Net Family Property and support.

b) The Matrimonial Home and the Daycare Business

[9] The parties jointly own the matrimonial home, which is located at 60 Dutch Crescent in Brampton. The property is valued somewhere between $535,000.00 and $585,000.00. The actual value of the property is the subject of some dispute, and it is not necessary for me to make a finding of the precise value of the home. There is a mortgage of between $185,000.00 and $190,000.00 on the property.

[10] The Respondent says that she has paid the carrying costs of the house since the separation. The Applicant does not seem to dispute this in his Affidavit, but he does dispute any claim that he has not provided the Applicant with support payments. He states that he has provided approximately $10,620.00 in payments between February 1, 2016 and June 1, 2018.

[11] The Respondent runs a home based daycare, and has done so since well before the parties separated. It is her primary source of income, and she earns somewhere between $30,000.00 and $50,000.00 per year. The documents filed paint a picture of a well-run daycare that is valued by its clientele and by the wider community.

[12] In her Affidavit, the Respondent states that the location of her daycare is key because it is near a park, near an early child care centre, and convenient for the parents who send their kids to it.

[13] There is a company (Faithful Servant Management Inc.) that was incorporated in 2008 to run the daycare. It is owned by the parties, and has no other assets except that the daycare business is run under this company. I was not given any actual documentation regarding the corporate structure.

[14] As part of this proceeding, the Respondent wishes to buy the Applicant’s interest in the home. To that end, she has arranged for financing for $318,000.00. It is not clear on the documentation before me whether the Respondent would have sufficient financing to buy the Applicant’s share of the house. However, for reasons that I will come to, this is not an issue that I am required to resolve.

c) The Applicant’s Employment History and Financial Circumstances

[15] At the time the parties separated, the Applicant was obtaining a degree in Employee Relations and Human Resources. This degree is not yet complete. However, the Applicant has a significant amount of debt. In total, his debts are approximately $85,000.00.

[16] Since the middle of 2016, the Applicant has worked on and off in the courier business. In 2016, his Line 150 income was approximately $16,000.00. In 2017, it was approximately $29,000.00.

[17] In 2018, the Applicant continued to work as a courier. However, he filed materials indicating that his regular route as a courier had been terminated, and that he was only receiving irregular hours.

[18] In addition, it is clear that the Applicant has changed the place where he is living on a number of occasions since the parties separated. The Applicant also deposes that selling the matrimonial house would result in him being able to use his portion of the proceeds to find more permanent accommodation, and have more access with the children.

[19] On that subject, the Respondent asserts that the children would prefer to live in the matrimonial home, as it is the only home that they have known. The Respondent disagrees with this assertion, and states:

3. Having had the opportunity to review the Respondent’s Affidavit, I observed that she simply stated as a fact (without even providing a basis for the assertion) that our children Isaiah and Elijah wish to remain in our home with the Applicant. I can say however that I have spoken with both of Isaiah and Elijah, separately and collectively, about the separation, their views and preferences, and the possibility of moving, and how they would feel about such changes. The Respondent and I separated well over two years ago so initially I did not bring up these topics and focused more on acclimating the Children to the Respondent and I not living under the same roof, as well as just being there for them in terms of arranging to spend time with them either at the home or away from it on our own, in order for them to adjust to post-separation life.

[20] This statement concerns me. Parents should avoid discussing their divorce proceedings with their children if at all possible, and children should not be asked by their parents for views on issues in the litigation. In this case, however, the evidence of the children is relevant and I will have more to say about each party’s position when I address this issue.

d) The Domestic Violence Allegations

[21] The Respondent alleges that the Applicant has been regularly entering the matrimonial home since the separation. In addition, she described one incident where the Applicant allegedly entered the home late at night and tried to enter the Respondent’s bedroom, which was barricaded.

[22] The Respondent also detailed a series of other incidents that she alleged happened, including an incident where a window was broken and an incident where the Applicant made a hole in the wall.

[23] In response to these allegations, the Applicant states that he has been spending time with the Respondent since the separation, and that this time spent has been amicable. In addition, he either specifically denies, or provides an explanation for, any of the incidents that the Respondent claims took place.

[24] Finally, the Applicant claims that a number of these incidents took place well before the parties separated. It is also worth noting that the issue of exclusive possession of the matrimonial home was raised in the pleadings.

Positions of the Parties

[25] The Applicant brings a motion for partition and sale of the matrimonial home. He argues that the Respondent has received the entire benefit of the house for the past two and a half years, and that he should be entitled to obtain his portion of the equity and move forward with his life. He also argues that obtaining the equity in the property will allow him to find more permanent living accommodations, which will foster a better relationship with his children. In other words, this sale will lead to results that are in the best interests of the children.

[26] The Respondent opposes this motion on the basis the house should not be sold, as it is in the best interests of the children for them to continue living in the property.

[27] In addition, the Respondent has brought a motion for exclusive possession of the matrimonial home, and interim support. The interim support motion was adjourned on consent of the parties, and not argued before me. The Respondent seeks exclusive possession of the matrimonial home until trial because there is, in her view, a triable issue over whether the Respondent should have exclusive possession of the matrimonial home. If there is a triable issue, then the motion for partition and sale should not be brought.

[28] The Applicant opposes this motion and argues that there is no triable issue over exclusive possession.

[29] Based on the following, I must determine the following two issues:

a) Is there a basis for the Respondent to have interim exclusive possession of the matrimonial home until trial? b) Should partition and sale be ordered in this case?

[30] I will address each issue in turn.

Issue #1 - Exclusive Possession of the Matrimonial Home

[31] Exclusive possession of the matrimonial home can be ordered on either an interim or a final basis. The factors to be considered in granting exclusive possession of the matrimonial home are set out in section 24 of the Family Law Act, which states, in part:

24. ORDER FOR POSSESSION OF MATRIMONIAL HOME – (1) Regardless of the ownership of a matrimonial home and its contents, and despite section 19 (spouse’s right of possession), the court may on application, by order,

(b) direct that one spouse be given exclusive possession of the matrimonial home or part of it for the period that the court directs and release other property that is a matrimonial home from the application of this Part;

(2) Temporary OR INTERIM ORDER – the court may, on motion, make a temporary or interim order under clause (1)(a), (b), (c), (d) or (e).

(3) ORDER FOR EXCLUSIVE POSSESSION: CRITERIA – In determining whether to make an order for exclusive possession, the court shall consider.

(a) the best interests of the children affected;

(b) any existing orders under Part 1 (Family Property) and any existing support orders or other enforceable support obligations;

(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 or the children

(4) BEST INTERESTS OF CHILD – In determining the best interests of a child, the court shall consider,

(a) the possible disruptive effects on the child of a move to other accommodation; and

(b) the child’s views and preferences, if they can reasonably be ascertained.

[32] When the factors that are set out in subsection (3) are considered, the only relevant ones are the financial circumstances of the parties, the history of violence and the best interests of the children. I will deal with each one in turn.

[33] In terms of the financial circumstances of the parties, this is a factor that supports no order being made for exclusive possession. While I acknowledge that the daycare business is being run out of the house, this is not grounds for a finding that the Respondent is entitled to exclusive possession of the house because there is no evidence that the Applicant is interfering with the management of the business. In addition, the house is the parties’ only asset, and the Applicant’s financial situation must also be considered. The Applicant’s financial situation clearly favours denying an order for exclusive possession.

[34] Then, there is the history of violence factor. There is some evidence that there may be some history of violence between the parties in this case. However, there were no police reports, and no sense that there was any third party corroboration for these allegations. Finally, virtually all of the incidents pre-date the separation. The one incident that took place after separation was when the Applicant sought to enter the Respondent’s bedroom, where she had barricaded herself in. There are conflicting versions of this event.

[35] As a result, I see no significant connection between the history of violence and a permanent order granting exclusive possession. Based on the one post-separation incident, however I can see that a temporary order for exclusive possession of the matrimonial home pending its sale might be appropriate. I will return to that in my conclusion.

[36] Finally, there is the best interests of the children. As I described at paragraphs 25 and 26 of these reasons, each parent asserts that adopting their position is in accordance with the best interests and/or wishes of the children. I have two problems with the positions taken by both parties.

[37] First, there is no direct evidence to support the position of either party that selling (or not selling) the matrimonial home would be in the best interests of the children. The Applicant has asserted that obtaining permanent accommodations would allow him to spend more time with the children, and Respondent’s counsel concedes that this is likely correct. However, the details in the materials that I was provided with about the relationship between the Applicant and his children are limited.

[38] The Respondent has asserted that the children go to school in this school district, and would be happiest if they were able to continue to do that. However, the Respondent has failed to provide any evidence to establish her contentions. In particular:

a) There is no evidence that the children would be required to change schools if they were required to move homes. In addition, the Respondent has not provided any evidence to counter the Applicant’s claim that the children are in French immersion and would be able to continue going to their current school even if they moved outside of the school boundaries. b) There is no evidence as to the availability (or non-availability) of other similar, but less expensive, houses in the school’s catchment area. c) There is no evidence that it is necessary for the children to remain in this home because of the fact that the younger child has a medical condition.

[39] This type of motion is, in essence, a motion for partial summary judgment. The lack of evidence is fatal to the Respondent’s claims on this point, as she has an obligation to lead her best evidence at this stage.

[40] In any event, however, the case-law does not generally support maintaining the children in the matrimonial home after a divorce, even if it is their preference. On this point, see Chrobok v. Chrobok, 2006 ONSC 3243, at paragraph 19 and Cox v. Adibfar, 2000 ONSC 2238, at paragraph 12. In addition, the consideration of the children’s best interests involves the non-custodial parent as well as the custodial parent (Rodgers v. Rodgers, 2008 ONSC 1673).

[41] In the circumstances, there is no basis for a claim for exclusive possession of the matrimonial home.

Issue #2 - Partition and Sale

[42] If interim exclusive possession had been granted, then there would be an issue for trial under the Family Law Act, R.S.O. 1990, c. F.3. However, I am not granting interim exclusive possession.

[43] As a result, I am left with an application for partition and sale pursuant to section 10 of the FLA and section 3 of the Partition Act, R.S.O. 1990, c. P.4. In these cases, the guiding authority is Silva v. Silva, where the Court stated:

The F.L.A authorizes the court to do whatever is necessary with the collectivity of spousal assets to bring about an equal division of them. It should be the statute of first resort in matrimonial disputes, but it is not necessarily the only one. I think it is significant that s.14(a) of the F.L.A. states that “the fact that property is held in the names of spouses as joint tenants is prima facie proof that the spouses are intended to own the property as joint tenants”. This is a recognition of the identical legal title of both spouses to an undivided ownership in the whole of the property. In my opinion, it is wrong to say, as it was said in Scanlan v. Scanlan, that the F.L.A. ousts the jurisdiction of the Partition Act when dealing with jointly owned spousal property. The two statues are not incompatible, but 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.

[44] As a result, the Court must consider the rights and interests of the parties in the family law litigation before ordering partition and sale. In addition, it would be an error to order partition and sale where there was a genuine issue for trial over the question of exclusive possession (Humphrey v. Humphrey, 2006 ONSC 42709).

[45] In this case, there is no issue over the question of exclusive possession. However, there are two arguments that must be considered in determining whether ordering partition and sale would interfere with the rights and interests in the family law litigation. First, whether the children’s best interests favour ordering partition and sale. Second, and related to this, is the question of whether the daycare business is going to be unduly harmed by an order for partition and sale.

[46] I have already set out at paragraphs 36 to 40 my views on whether the children’s best interests are served by granting the Respondent exclusive possession of the matrimonial home. That analysis applies here as well. However, there is one more issue to be considered. It is in the children’s best interests to have parents who have a steady source of income.

[47] In this case, the evidence is clear that the daycare business provides a steady source of income to the Respondent, and assists her in paying for the children’s needs. As a result, maintaining that business is in the children’s best interests, particularly since the Applicant has not been able to maintain full time employment since the separation.

[48] This brings me to the question of whether the Respondent’s business is going to be unduly harmed as a result of moving. There is no evidence before me to substantiate that claim.

[49] I start by acknowledging that a daycare is the type of business that is location-specific. It is unlikely that parents in Caledon will bring their children to a daycare in the south end of Mississauga, for example. As a result, there is something of value in the location of the daycare and, therefore, the matrimonial home.

[50] However, there is no evidence before me to establish that the Respondent could not find another home in the area to run her daycare business out of. The Applicant has a prima facie right to partition and sale of a jointly owned property. As a result, the Respondent must show that there is a basis to deny partition and sale. She has failed to do so.

[51] The facts in this case are similar to the Rodgers, supra, decision. In that case, Wein J. was faced with a very similar situation, where the mother wanted to remain in the home because of her daycare business. Wein J. dismissed the mother’s request for many of the same reasons I have set out above. I find the reasoning in that decision persuasive.

[52] However, there should be conditions attached to this sale. First, the business should be disrupted as little as possible. As a result, the period between now and the closing should be long enough for the Respondent, and her clients, to make alternate plans. In my view, the end of the current school year (June 30th, 2019) is an appropriate time for the house sale to close. In addition, the sale should not interfere with the operation of the business.

[53] Finally, the selling of the house will not necessarily resolve all of the financial issues between the parties, as there are other debts, as well as an accounting of the expenses borne by the Respondent versus any claim for occupation rent that the Applicant may make. In order to ensure as seamless as possible a transition for the Respondent’s business, this matter should be taken to trial as quickly as possible. To that end, I will be making some Orders in relation to the completion of this litigation.

[54] In addition, the Respondent argues that she should be given a right of first refusal to purchase the house. She has even provided evidence that suggests that she is close to being able to finance the entire house and carry it on her own, while paying out the Applicant’s portion of the Net Family Property, including the house.

[55] In argument, I asked counsel for the Applicant whether the Applicant would be willing to give the Respondent a right of first refusal to purchase the property. Counsel advised me that the Applicant would not be willing to give the Respondent this right, and I have no basis on which to enforce that right. However, I do note that the Respondent has the right to bid on the property, and nothing in these reasons should be seen as derogating that right in any way.

Conclusion and Costs

[56] For the foregoing reasons, I am ordering as follows:

a) The matrimonial home, municipally known as 60 Dutch Crescent in Brampton, is to be partitioned and sold. b) The sale described in paragraph (a) is not to be completed before June 30th, 2019. c) The efforts to sell the home will not impede on the operation of the daycare business. In particular, showings of the home are not to take place during the daycare’s regular operations. d) Within thirty (30) days of the release of these reasons, the parties are to exchange names of real estate agents that they would be prepared to have act on the selling of the home. They are then to agree on the agent to sell the house. e) I retain jurisdiction to address any and all issues relating to the sale of the home, including the selection of the real estate agent if the parties cannot agree. If an appearance is necessary, the parties are free to contact my judicial assistant at sara.stafford@ontario.ca. f) The parties are to agree on a timetable for ensuring that this matter can go to trial during the May, 2019 civil/family blitz sitting in Brampton. This timetable is to address disclosure, questioning, whether any expert reports are required and any other issues. The parties are to file the agreed-upon timetable with the Court office, and provide my assistant with a copy. If they are unable to agree on a timetable, then I will impose one, and an appearance can be arranged for that as well.

[57] Finally, I indicated at paragraph 35 that there might be a basis for the Respondent to seek an interim order for exclusive possession of the matrimonial home as a result of the allegations of domestic violence. If the Respondent is seeking such an Order, her counsel is free to contact my judicial assistant within fourteen (14) days of the release of these reasons, and a hearing on that point, based on the record as it stands currently, will be scheduled.

[58] The parties are encouraged to agree on the costs of this motion. If they are unable to agree, then the Applicant is to file his costs submissions of not more than two (2) single-spaced pages, exclusive of bills of cost, offers to settle and case law within fourteen (14) days of the release of these reasons.

[59] The Respondent will then have fourteen (14) days from receiving the Applicant’s costs submissions to file her responding submissions. Again, these submissions are to be no more than two (2) single-spaced pages, exclusive of bills of cost, offers to settle and case law.

[60] There are to be no reply submissions without leave of the Court.

LeMay J. DATE: September 19, 2018