Court File and Parties
Court File No.: FC-15-95 Date: 2019/07/16 Ontario Superior Court of Justice
Between: Tara Dear, Applicant And: David Lawrence Kennedy, Respondent
Counsel: Mary Cybulski, counsel for the Applicant Blake R. Lyngseth, counsel for the Respondent
Heard: July 9, 2019 (at Ottawa)
Endorsement
Shelston, J.
Overview
[1] This matrimonial litigation started in January 2015 and is set to proceed to trial on the September 2019 trial sittings on issues regarding custody, access, child support, spousal support, equalization and costs.
[2] The applicant seeks various claims for relief including an amendment to her application and the immediate listing for sale of the jointly own matrimonial home. The respondent opposes any such sale and submits that the matter should be left to the trial judge as he will be prejudiced by a sale before the trial.
[3] The respondent seeks medical disclosure regarding the applicant and seeks an independent physical examination and assessment by Dr. Marshall or other medical practitioner as recommended by the Dr. Marshall.
Consent Issues
[4] On consent of the parties, the applicant’s application is hereby amended to reference the Partition Act.
[5] On the consent of the parties, the applicant will, within 14 days, request and provide forth with to the respondent, once obtained:
(a) an updated medical report from Dr. Taryn-Lise Taylor, outlining her current condition, current symptoms, ongoing treatment and any progress in relation to her symptoms; (b) a copy of her complete medical file with Dr. Taryn-Lise Taylor; (c) a copy of the applicant’s medical records with any other medical practitioner involved in her treatment for post-concussive symptoms, from February 24, 2015 to present including Dr. Marshall, Dr. Papineau, Dr. Jeffries and Dr. Jardine; and (d) proof of completion of the Coping with Disability and Health Conditions outpatient program.
Contested Issues
[6] The remaining issue regarding disclosure of medical information was the respondent’s request that the applicant provide a copy of her hospital records from February 24, 2015 until present. After hearing submissions from the parties, I granted the respondent’s request.
[7] With respect to the request for an independent medical examination of the applicant, I dismissed that claim for oral reasons given at the hearing.
[8] The remaining issues were the requests of the applicant seeking the following relief:
(a) the immediate listing for sale of the jointly owned matrimonial home; (b) an order dispensing with the respondent’s consent and/or approval with respect to the sale of the matrimonial home; (c) an order that the respondent cooperate with the listing of the matrimonial home and to provide the realtor chosen by the applicant with access at all reasonable times and upon reasonable notice; (d) an order that the respondent vacate the premises prior to the closing of the sale of the matrimonial home; (e) an order that the respondent not destroy or cause any damage to the matrimonial home pending it sale; (f) an order that the proceeds of sale from the matrimonial home be applied towards the joint debts being the joint lines of credit with TD Canada Trust, legal fees and disbursements regarding the sale and the real estate commission on the sale of the matrimonial home; (g) an order that half of the net proceeds of sale from the matrimonial home be released to the applicant forthwith and that the remaining half of the net proceeds of sale to be held in trust pending the determination of the equalization of the net family property; and (h) costs.
Background Facts
[9] The parties separated in July 22, 2013 after 14 years of cohabitation. There are two children of the marriage age 13 and 8 years of age.
[10] The applicant is unemployed. The respondent is a systems architect and self-employed consultant.
[11] The respondent has resided in the matrimonial home since the date of separation. Subsequent to separation, the respondent provided the applicant with a $450,000 advance on any equalization payment and the applicant has purchased her own residence.
[12] The children have been in the primary care of the applicant since separation and the respondent has regular access.
[13] The history of the proceedings is as follows:
(a) proceedings commenced on in 2015; (b) the parties attended a case conference on May 14, 2015 dealing with various issues including disclosure, child support, spousal support and the sharing of section 7 expenses; (c) on November 20, 2015, the parties agreed to the appointment of an assessor and reached an agreement on disclosure; (d) on January 5, 2017, a motion date was struck due to the respondent’s failure to file a factum and costs were reserved to the motions judge; (e) on June 8, 2017, on consent of the parties, the assessor was mandated to update the assessment report and costs were awarded in favour of the applicant in the amount of $1,500 payable in any event in the cause; and (f) on November 2, 2018, the parties attended a settlement conference where the parties completed the Trial Schedule Endorsement Form. Further, the court ordered that the matter be placed on the September 2019 trial list and that a trial management conference to be scheduled prior to the end of July 2019. In addition, leave was granted to the applicant to seek the sale of the jointly own matrimonial home.
[14] The parties have the addressed the issue of the potential sale of the matrimonial home of on the following dates:
(a) on April 6, 2017, the respondent provided a redacted copy of an appraisal of the matrimonial home as of July 2012 providing a value of $1,080,000; (b) in May 2017, the respondent indicated in two separate letters that he would be providing a current appraisal of the matrimonial home; (c) on June 14, 2017, counsel for the applicant wrote to the respondent requiring an updated appraisal of the matrimonial home; (d) on December 8, 2018, counsel for the respondent advised that he would be obtaining an “opinion of value” from a real estate agent as of the date of separation and the current value; (e) on January 14, 2019, counsel for the applicant advised the appraisal of the matrimonial home was not appropriate as it was obtained for financing problems and requested a letter of opinion from the respondent’s real estate agent; (f) on January 30, 2019, counsel for the respondent advised the he would be retaining an experienced real estate agent to provide a letter of opinion as to the current value of the matrimonial home as well is the date of separation and if the applicant disagreed, she would be able to have access to the matrimonial home for the purpose of obtaining her own appraisal; (g) four months later, on March 8, 2019, the applicant served her motion seeking the sale of the home and other relief returnable April 23, 2019; (h) the respondent provided an appraisal of the matrimonial home on March 25, 2019; (i) on April 12, 2019, the respondent served his motion for medical disclosure and for an independent medical examination of the applicant; (j) on April 15, 2019, counsel for the applicant indicating she would be obtaining her own appraisals; (k) on April 23, 2019, the day of the return of the motion, counsel for the respondent was ill and consequently the motion was adjourned to a date to be set through the trial coordinator’s office; and (l) on May 9, 2019, the applicant served her notice of motion returnable July 9, 2019. On May 24, 2019, the respondent served his notice of motion returnable July 9, 2019.
Position of the parties
[15] The applicant submits that the matrimonial home should be sold prior to the trial for four reasons:
(a) if the trial is heard in September/October, 2019, the decision may be taken under reserve for a period of up to six months thereby delaying the applicant’s right to receive her half equity in the matrimonial home; (b) the applicant is in financial need and she has exhausted her nonregistered assets and has significant debt; (c) the Partition Act provides the right to apply to sell the home, that the respondent’s rights will not be prejudiced the trial and that any in any event the court will order the sale of the home at trial; and (d) the respondent admits he owes an equalization payment to the applicant.
[16] On the issue of dispensing with the consent of the respondent, the applicant submits the following factors for the court to take into consideration:
(a) the proceedings have been going on for four years; (b) the respondent’s consent is being unreasonably delayed; (c) there are three costs awards against the respondent based on his unreasonable behaviour; (d) there have been significant disclosure delays with productions at the last minute by the respondent; and (e) the respondent’s value for the matrimonial home has not increased since separation.
[17] The respondent’s submissions are:
(a) that the respondent will be prejudiced if the home is sold before trial because he does not know what is the equalization payment owed to the applicant; (b) the respondent denies that the applicant is in financial hardship; (c) the respondent denies that he is unreasonable and will attempt to delay the sale; and (d) the respondent submits that he wishes to purchase the applicant’s interest in the matrimonial home but that the parties cannot agree on the sale price.
Legislative and jurisprudential framework
[18] A joint owner of property has a prima facie right to partition and sale pursuant to section 2 of the Partition Act.
[19] The jurisprudence provides that a court should consider the following factors in determining whether or not to order the partition and sale of a jointly owned property prior to trial as follows:
(a) the application will be granted unless the opposing party can demonstrate that any sale would prejudice the rights of either spouses under the Family Law Act (Silva v. Silva, 1990 O.J. No. 2183 Court of Appeal); (b) the onus is generally on the party resisting the sale to show prejudice (Afolabi v. Fala, 2014 ONSC 1713); (c) the court can only refuse to order partition and sale of a jointly owned property where there is malicious, vexatious or oppressive conduct (Latcham v. Latcham); (d) prejudice is defined as malicious, vexatious or oppressive conduct by the moving party seeking the sale (Silva, supra, and Latcham v. Latcham, 2002, 27 RFL (5th) 358 Court of Appeal); and (e) before making a pre-trial order for the sale of the matrimonial home under the Partition Act, the court should consider whether or not granting the order would cause undue prejudice to either party’s claims (Punit v. Punit, 2014 ONCA 252 Court of Appeal).
Analysis
[20] The respondent has had de facto exclusive possession of the matrimonial home since separation in 2013. The litigation has been before the court since January 2015 and there was no motion brought for the sale of the matrimonial home until April 23, 2019, almost 6 years after separation.
[21] Leave to bring the motion brought was granted on November 2, 2018, but a further period of four months went by before the applicant served her motion for the sale of the home.
[22] The applicant is entitled to seek the sale of the matrimonial home but this right is not an absolute right. The court must balance the interests of the parties so that if the respondent can show that he will be prejudiced as a result of the sale, the order should not be granted.
[23] Further, if the trial is imminent, courts have refused to grant the order. In Punit, supra, Justice Juriansz, J.A., in dealing with an appeal of a motion judge’s decision dated June 18, 2013 to order the partition and sale of the matrimonial home, commented that the matter was to proceed to trial on April 21, 2014, a little more than six weeks later:
- From a practical perspective, the trial in these proceedings is scheduled to begin on April 21, 2014. Since the motion was heard, the respondent has been able to live without any funds from the sale of the home. The appellant has been able to live in the home and the ongoing expenses associated with the home have been met. Even if the order for partition and sale was upheld by this Court, it is unlikely the house would be sold before trial. If the house were sold, rule 66.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 would require that the funds be paid into court. The respondent would not be able to receive any funds before trial.
[24] Justice Mesbur in Ludmer v. Ludmer, 2012 ONSC 4478 stated at paragraph 31:
- As to the sale of the matrimonial home, the husband has been living there since the parties separated more than seven years ago. The children reside with him half the time. He operates his law practice from the home. The trial is now set for October of this year. Even if I were to exercise my discretion and order the sale of the home, the evidence is insufficient for me to determine what, if any part, of the proceeds should be paid out to either party. If the property were sold, I would require all the proceeds to be held in trust pending the trial of the action where all the property issues will be decided. I assume that is not what the wife wants.
[25] In Mignella v. Federico, 2012 ONSC 5996 Justice Price addressed the issue of timing. In rendering his decision, Price, J. noted that the applicant had not pled the Partition Act. At paragraph 33, the court stated:
- Even if Mr. Mignella had applied pursuant to the Partition Act, the court would not have exercised its discretion to order the property sold pending the trial, which is now only two months away. As noted above, an order for interim sale of a matrimonial home under the Partition Act will normally not be made where it would prejudice the other spouse's right to assert an ownership or possessory interest in the property at trial. Mr. Mignella has not established that there is no genuine issue for trial as to whether his wife is entitled to retroactive support or an equalization payment from him that may justify an order permitting her to buy his interest and remain in possession of the home.
[26] In Punit, the trial was less than two months away, in Ludmer, three months away and in Mignella, less than two months away. In this case the trial is scheduled to proceed a little more than nine weeks away.
[27] With respect to the allegation the applicant is in dire financial situation, I note that the applicant’s Bank Accounts, Savings and Securities have increased from $225,000 at separation to $259,591 as of March 7, 2019. Further, the mortgage on her home has decreased by approximately $325,000 since the purchase. In addition, the applicant has not provided the secured line of credit statements for January, February and March 2019 requested by the respondent to verify the debt on that line of credit. If a party is alleging financial difficulty, that party has an obligation to provide relevant disclosure. There is no reply to this allegation in the applicant’s materials.
[28] In addition, the respondent has been paying child support of $1,916 and spousal support of $916 per month since May 14, 2015. There has been no motion to vary said payments.
[29] I also note that the respondent made an advance payment of $450,000 to the respondent which the applicant indicated she used $350,000 towards the down payment of her new home purchased after separation for the primary residence of the children. However, the Statement of Trust Funds prepared by the law firm acting on the purchase indicates that the sum of $235,862.26 was used for the purchase with a mortgage of $650,000.00. There is no explanation provided for this contradiction in the evidence. Further, according to the applicant’s Personal Line of Credit dated April 2019, the balance is $103,120.61, and the balance on the mortgage is $222,762.41, for a total of $325,883.02. It appears that there has been a significant reduction in the debt related to the applicant’s home. However, upon a review of her financial statement dated March 7, 2019, the applicant indicates that she has now has a personal loan to Tim Dear in the amount of $300,000 related to her home. No further particulars are provided. I cannot find on the evidence presented that the applicant has significant debts that she has incurred since separation that must be paid prior to the trial.
[30] I dismiss the submission that the fact that the decision may be taken under reserve is a factor to consider in ordering the sale of the matrimonial home. While I accept that the decision may be under reserve depending on the complexity of the evidence, that possibility is not a sufficient reason to order the sale of the matrimonial home on an interim motion.
[31] I reject the argument that the respondent is unreasonable because he was ordered to pay costs. Upon a review of the costs endorsements in this matter, I note the following:
(a) costs were awarded in favour of the applicant in the amount of $2,000 at the motion heard on November 20, 2015; (b) on June 8, 2017, costs were awarded in favour of the applicant in the amount of $1,500 payable in any event because of the last-minute agreement by the respondent to accept the applicant’s offer to settle the terms of the motion; and (c) on November 2, 2018, the costs of the settlement conference were reserved to the trial judge but the respondent was ordered to pay costs of $850 in respect of the need to settle the orders payable forthwith.
[32] I cannot find that the respondent has acted unreasonably because he was ordered to pay $4,350 in costs over 4 years of litigation. I am also cognizant that the respondent make a $450,000 equalization advance in December 2013, over a year before litigation started.
[33] Another factor is that the parties cannot agree on the sale price. The respondent provided two expert report both prepared dated March 18, 2019. The first report valued the home at the date of separation at $1,080,000. The second report valued the home as of March 13, 2019 at $1,160,000. The applicant challenged the valuations provided. Despite counsel for the applicant stating in her letter dated April 15, 2019 that the applicant would obtain her own appraisal within 14 days, no valuation was provided until early July 2019. The valuation that was provided consists of an email from a real estate agent dated July 2, 2019, who did not have access to the home, which values the home between $1,275,000 and $1,350,000. This report is not an expert report. I find that the value of the home is in dispute and a trial will permit the trial judge to determine the home’s fair market value which will be necessary to set the sale price.
[34] I also agree with the respondent that since he seeks to purchase the applicant’s interest in the home, determining the fair market value is a genuine issue requiring a trial. If the parties cannot agree on one party buying out the other’s interest in the home, the home will be sold.
[35] Considering all these factors, the applicant’s motion is denied.
Costs
[36] My initial review is that success on these motions has been divided and no costs should be awarded. However, if a party seeks costs, I order that the party shall provide his/her cost submissions not to exceed three pages plus a detailed bill of costs and any offers to settle by July 29, 2019. The other party is to provide his/her cost submissions by August 12, 2019, with said submissions not to exceed three pages plus a detailed bill of costs and any offers to settle.
Shelston J. Released: July 16, 2019