Court File and Parties
COURT FILE NO.: FS-19-96725-00 DATE: 2020 04 08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RAMESH MANN Rupa Murthi, for the Applicant Applicant
- and -
SURINDER MANN Sukhwinder Samra, for the Respondent Respondent
HEARD: April 7, 2020 via tele-conference
REASONS FOR JUDGMENT
Fowler Byrne J.
1This motion was heard by teleconference, as per the Notice to the Profession dated March 18, 2020 (the “Notice to the Profession”). The Applicant has asserted this matter is urgent because it pertains to the parties’ dire financial circumstances, as set out in Section A.2.c of the Notice to the Profession. Upon the initial triage, it was determined that the matter appeared urgent and both parties were directed to file materials in accordance with the Notice to the Profession. This motion by teleconference was then scheduled.
2The matter was originally scheduled to commence at 10:00 a.m. on April 7, 2020. Unfortunately, the Respondent had technical difficulties joining the call, so it was rescheduled for 11:15 a.m. the same day. At the rescheduled time, both counsel were present and able to make submissions. The cooperation of counsel in this regard is appreciated.
3The Applicant seeks an order for the following relief: (a) leave to proceed on an urgent basis in advance of a case conference; (b) the sale of the jointly owned property located at 129 Dingle Place, in London (“the Property”), including the authority to arrange for the sale without the consent or participation of the Respondent; and (c) an amendment to her Application seeking to add the claim for a sale.
4The Respondent opposes this relief, advancing both procedural and substantive arguments. Procedurally, he argues that the parties are already divorced and have been since 1994. He states that as a result, this entire Application was brought in bad faith. He asserts that since the parties are no longer married and are not bound by the Family Law Rules, O. Reg. 114/99, this application should have been brought under the Partition Act, R.S.O. 1990, c. P.4, and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
5The Respondent’s substantive response is three-fold. His first submission is that the matter is not urgent. He relies on a press release from the TD Bank (“TD”), who is the mortgagee, dated March 24, 2020, stating that TD is committed to working with personal banking customers to help them through the COVID-19 crisis, which relief includes up to a six-month payment deferral for mortgages. In addition, he provided a press release from the City of London indicating that interest and penalties for unpaid 2020 property tax installments due on March 31, 2020 would be waived for 60 days. He also relies on an article from the Canadian Real Estate Magazine dated March 26, 2020, indicating that real estate prices will be down and it is not a good time to put a house on the open market. Finally, he relies on a press release by the Ontario Real Estate Association dated March 24, 2020, indicating that there are restrictions on open houses and showings.
6His second argument, on which he concentrated the most in his written materials, was that this Application was malicious, vexatious and oppressive in that the Applicant was launching a collateral attack on the divorce and their settlement in 1994. He maintains that cross-examinations and a full trial on whether the divorce is valid are required before the sale of the Property can be considered.
7His final substantive point is that he wants the option to purchase the Applicant’s interest in the Property using the value of $750,000. He wants 45 days to ascertain if he can arrange financing (by himself or with help), and if not, to list the Property cooperatively, still giving him the option to purchase. He has not lived in the house since September 2018.
8The following facts are not contested. Despite the apparent divorce, the parties continued to live together until September 18, 2018. They also had one more child. The Respondent was forced to leave the home as a result of criminal charges alleging domestic abuse. The Applicant commenced this Application on December 11, 2019 and served it on the Respondent soon thereafter. The Respondent was on his second lawyer when his responding materials were filed in March 2020. To be fair to the Respondent, he had surgery in late December 2019 which delayed his response. Initially the Application did not seek the sale of the home, but the Applicant stopped receiving disability payments shortly thereafter, putting her in a position of financial urgency. The home is owned by the parties as joint tenants. There are three children of the marriage, but all are grown and independent.
9It is also not disputed that the mortgage and the secured line of credit have been in arrears for several months. TD has sent several warning letters threatening legal action, the last of which was dated February 26, 2020, and there is evidence of internal communications within TD on March 18, 2020 requesting an update on the legal proceedings against the parties. No action has yet been commenced by TD. Presently the Applicant has no income and can no longer maintain the property. The Respondent supports himself with disability payments. While he is not able to contribute to the mortgage or secured line of credit, he made payments towards the insurance and some utilities in late 2019 and into January 2020. The Respondent relies on his financial statement but did not provide a copy in his materials.
10In addition to the oral submissions made, I reviewed the revised Notice of Motion, two affidavits of the Applicant, two affidavits of the Respondent, as well as a factum from both parties.
Issues
11There are three issues to be determined:
a) Is this motion urgent? b) Should the amendment be allowed and on what terms? c) Should the property be ordered sold and who should have carriage of that sale?
Urgency
12The Notice to the Profession states that for non-child protection and custody matters, family law matters could be considered urgent if they relate to “dire issues regarding the parties’ financial circumstances including for example the need for a non-depletion order”.
13The requirements of “urgency” were recently laid out by Kurz J. in Thomas v. Wohleber, 2020 ONSC 1965, at para. 38. After reviewing the dictionary definition of the term “urgent”, the circumstances of urgency set out in the Notice to the Profession, the examples of urgency offered in Hood and Rosen, and other cases that apply the Notice to the Profession’s test of urgency, he found that the following factors are necessary in order to meet the Notice to the Profession’s requirement of urgency:
a) The concern must be immediate; that is one that cannot await resolution at a later date; b) The concern must be serious in the sense that it significantly affects the health or safety or economic well-being of parties and/or their children; c) The concern must be a definite and material rather than a speculative one. It must relate to something tangible (a spouse or child’s health, welfare, or dire financial circumstances) rather than theoretical; d) It must be one that has been clearly particularized in evidence and examples that describes the manner in which the concern reaches the level of urgency.
14This motion relates to a significant joint asset of the relationship. Currently, the parties are at risk of losing some of their equity if TD forces a sale. It appears on the evidence that the Applicant was working with TD prior to the COVID-19 crisis, and they allowed her two months to sell the property herself before TD took any enforcement measures. She has now been in default for four months and has been unable to gain the cooperation of the Respondent to put the house on the market.
15The Respondent argues that due to the announcements of TD and the city of London with respect to COVID-19, the urgency is gone. With respect, the press releases and articles submitted are not evidence. These are novel times – the court is not in the position to take judicial notice that mortgagees are not enforcing their security. There is no way to know if the parties will be given any relief on their mortgage due to their persistent default prior to the pandemic. The most recent evidence presented was an e-mail dated March 18, 2020 showing that TD continued to be concerned about the default and continues to speak of legal action. The property tax relief described in the press release is with respect to unpaid 2020 property tax installments due on March 31, 2020. This is only a small part of the parties’ property tax arrears. While the real estate market appears to be affected, the industry attempting to adjust as are most businesses. A volatile real estate market is nothing new to the industry.
16I have received no evidence that either party is in a different financial position because of the pandemic. The Applicant was receiving no income before the pandemic and continues to receive none. Likewise, the Respondent was receiving disability payments before the pandemic and continues to do so. There is no way to know if either of these parties will be able to avail themselves of the relief offered by TD or whether they will be eligible for income supplements.
17The Respondent relies on Uwitonze v. Mugaborabona, 2018 ONSC 6334, in support of the proposition that the default of a mortgage does not constitute urgency. With respect, that case involved an allegation of urgency where the issue of a sale was first raised in 2013, and no steps were taken for many years. The bank had already sued, the moving party failed to defend, and the bank had judgment for a period of time already. This is not the situation before me where the default is new and there is an opportunity to prevent the Notice of Sale being issued and an action being commenced. The parties here have an opportunity to preserve their equity.
18The parties’ default continues. Fees, penalties and interest continue to accumulate, further eroding their equity. Neither party can maintain the mortgage. The urgency is immediate, material and particularized in the evidence. The Respondent’s response is to wait longer. This is not tenable. The house has been empty for many months and the Respondent did nothing to deal with it. While limited case conferences are now available, none are available until June 2020. This is too far away. The current COVID-19 crisis is not to be used as a tool to shirk a party’s financial obligations within a family law proceeding.
19Accordingly, I find this situation is one of urgency as contemplated by the Notice to the Profession and Thomas.
Amendment
20The court shall give permission to a party to amend an application unless the amendment would disadvantage another party in a way for which costs or an adjournment would not compensate: Family Law Rules, r. 11(3).
21In this matter, the Respondent has just recently filed an Answer. The amendments sought were with respect to the Applicant’s claim for the sale of the home and to advance a trust claim. No case conference has been scheduled. This matter is in its early stages. Any prejudice that the Respondent may experience is easily compensated with an order allowing him time to amend his Answer and an order for costs for the purpose of having to amend his Answer and refile it.
22The Applicant shall have permission to amend her Application.
Sale of the Property
23Prior to considering the substantive relief sought, I must address the Respondent’s procedural objections. He maintains this matter was not commenced in the proper jurisdiction and that it should not have been commenced under the Family Law Rules.
24The Divorce Order was granted in Court File No. D29269/94 by the Ontario Court (General Division) in Brampton on November 24, 1994. Pursuant to s. 11(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, the Ontario Court (General Division) was continued under the name Superior Court of Justice. The Respondent has provided no useful authority for the proposition that this Application should have been brought under the old court file number, rather than starting a new application. Given the changes in the family courts and the Family Law Rules since 1994, it is unknown whether the same court file number could have been used. If the Respondent is later able to find such an authority, he can move to have the court file number changed at that time. It is an insufficient reason not to proceed with this motion.
25The issues raised by the Applicant are covered in rr. 1(2)(a)(b) and (c) of the Family Law Rules. Whether or not the parties are legally spouses is not relevant. Accordingly, the matter is properly brought as a family law application, whether or not the Applicant is ultimately successful.
26The Applicant sought partition and sale under the Partition Act within this family law application.
27In order for the court to exercise its discretion to refuse partition under s. 2 of the Partition Act, malicious, vexatious or oppressive conduct must be shown: Latcham v Latcham. Also, an application under s. 2 of the Partition Act should not proceed where it can be shown that it would prejudice the rights of either spouse under the Family Law Act: Silva v. Silva (1990), 1 O.R. (3d) 436 (Ont. C.A.).
28Upon reviewing the evidence, I find no evidence of malicious, vexatious or oppressive conduct by the Applicant in relation to the preservation or sale of the property at issue. She maintained the mortgage after the Respondent left. She simply cannot afford to do so any longer.
29The Respondent has argued that the court has the right to order that one party transfer their interest to the other under the Family Law Act, and accordingly the sale of the home should be deferred until the Respondent’s rights to purchase the property are determined. He relies on Silva in support of that proposition.
30On the evidence before me, I do not find that the Respondent’s rights under the Family Law Act will be prejudiced if the sale proceeds. The power of the court to order that a property be transferred is discretionary and may only to used to satisfy an obligation to equalize net family property and only when there is a proven concern that any equalization payment will not be made: Buttar v Buttar, 2013 ONCA 517 at para. 47, 56. The Respondent himself that has argued that the parties are not spouses and thus the Family Law Act has no application. If the Respondent’s position prevails, then there are no Family Law Act property rights to protect. If the Applicant establishes that equalization should occur, the proceeds of sale will be held, so the Respondent’s claim is protected.
31There are no minor children living in the home. Neither party has lived there for some time. The parties have been separated for almost two years. There is no reason for this issue to be deferred any longer.
32Currently, the Respondent is prohibited from communicating with the Applicant except through counsel. He is also not permitted to attend at the Property. Accordingly, the Respondent is currently prohibited from working directly with the Applicant to have the property sold. In addition, from at least January 2020, if not earlier, the Applicant has sought the Respondent’s cooperation in the sale, but none has been forthcoming.
33The Respondent, in his materials, is willing to accept the value of $750,000. Accordingly, the Applicant will be given authority to deal with the sale of the property as long as the listing price and sale price do not fall below this amount. If it does, the consent of the Respondent is necessary. Also, the Respondent indicates he wants an opportunity to purchase the property himself. Accordingly, he will be given until May 8, 2020, to secure financing and reach a suitable resolution with the Applicant. If he is unable to do so, then the Property will be immediately listed and he is free to make an offer along with any member of the public.
Conclusion
34Accordingly, I make the following orders:
a) Leave is granted to the Applicant to bring this motion in advance of a case conference and pursuant to the Notice to Profession, dated March 18, 2020. b) The Application shall be amended in accordance with the draft Amended Application attached as exhibit “A” to the affidavit of Ramesh Mann, sworn April 2, 2020. c) The Respondent is granted leave to serve an Amended Answer no later than May 8, 2020, to be filed forthwith upon the courts being able to accept such filings. d) The Applicant shall pay to the Respondent his costs associated with having to redraft, reserve and refile his Answer, fixed in the sum of $500, payable in 30 days. e) The property located at 129 Dingle Place, London, Ontario (“the Property”) shall be listed for sale, no earlier than May 8, 2020. f) The Applicant shall have sole authority to select and consult with the listing agent. The listing agent shall only consult with the Applicant in order to ready the Property for sale, schedule photos or videos, or to schedule showings, being in person or remotely. g) The Respondent’s consent or authority to list the property is not required if the listing price is $750,000 or higher. If the listing agent recommends a lower listing price, the consent and authority of the Respondent is required. h) The Applicant shall have the sole authority to negotiate, accept or counter-offer any offer to purchase the Property as long as the final agreed-upon purchase price is $750,000 or higher. In the event that the Applicant is only able to negotiate a price that is lower than $750,000, the Respondent’s consent is required before an agreement can be finalized. i) In the event that the Property is sold for $750,000 or more, the Applicant has the sole authority to close the transaction, including signing all documentation, without consultation with or the consent of the Respondent. In the event the Property is sold for less than $750,000, the Respondent is required sign all necessary documentation in order to close the transaction. j) In the event the Respondent’s consent is required, all communication between the parties shall be in accordance with the restrictions set out in the Respondent’s Recognizance. k) Upon the sale of the Property being completed, all property taxes, registered encumbrances, outstanding utilities and adjustments shall be paid forthwith, and the remaining proceeds of sale shall be held in trust by the real estate lawyer who completed the transaction, or held by any other agreed upon individual. l) The Applicant shall have the sole authority to select the real estate lawyer who will represent the parties on the sale of the property, as long as it does not entail a conflict of interest. The legal fees associated with the closing of the transaction shall be paid from the proceeds of the sale. m) The monies being held in trust shall remain so held until ordered otherwise by the court, or the parties agree in writing. n) In the event that the Respondent’s consent is required, such consent shall not be unreasonably withheld. In the event that the Respondent’s consent is required, and either party believes the other is acting unreasonably with respect to the listing, negotiation or completion of the sale of the Property, they may bring a motion in writing, to my attention, seeking the appropriate relief. o) The Applicant was overall successful in this motion and should have her costs, subject to any offers to settle that have been exchanged. The parties are encouraged to agree upon the quantum of costs themselves. If they are unable to do so, the Applicant shall serve and file her costs submissions, limited to 2 pages, single-sided and double spaced, exclusive of Costs Outline, offers and case law, no later than 4:30 on April 24, 2020. Any responding submissions by the Respondent, with the same size restrictions, shall be served and filed no later than 4:30 p.m. on May 1, 2020. All costs submissions will be filed by emailing same to my judicial assistant sara.stafford@ontario.ca.
Fowler Byrne J.
Released: April 8, 2020