COURT FILE NO.: FS-19-13511
DATE: 20200904
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jason Domingo, Applicant
AND:
Lourdes Guilarte, Respondent
BEFORE: Kiteley J.
COUNSEL: Anthony Macri, counsel for the Applicant
Peter Smith, counsel for the Respondent
HEARD: September 1, 2020
ENDORSEMENT
[1] This is a motion by the Applicant pursuant to s. 2 of the Partition Act for an order for the sale of the matrimonial home. After service of the motion record, the Respondent consented to the order for sale. The parties have not agreed on the conditions of sale, and particularly, whether the Respondent should be ordered to vacate before the property is listed for sale. For the reasons that follow, the motion is granted.
Background
[2] The parties married in August 1998 when the Respondent’s son of a prior relationship was about 10 years old. The parties have three children: twins born in 2000 and a daughter born in July 2002.
[3] The parties separated in June 2012 and have not resumed co-habitation since then. When they separated, the Applicant left the jointly owned matrimonial home and the Respondent has continued to reside in it up to the present.
[4] For some period, the parents shared responsibility for the children. Since sometime in about 2017, the children have lived with the Applicant.
[5] Since the separation, the Applicant paid to the Respondent the amount of $1000.00 per month that he says was his share of the mortgage and which she says was on account of spousal support. I need not resolve that difference.
[6] In late 2019, the Respondent stopped paying the mortgage notwithstanding the monthly contributions by the Applicant.
[7] The Application was issued on October 31, 2019 and was served on December 3, 2019. The Applicant did not make a claim for an equalization of net family property but did ask for an order for sale of the home.
[8] As a result of the suspension of regular court operations, no steps were taken during the spring of 2020. The case conference was held on August 5, 2020 at which time Pollak J. made an order on consent that included leave for the Respondent to serve and file an Answer and financial statement form 13.1. In her endorsement, Pollak J. noted that the issue of limitation period was discussed but no agreement was reached. Pollak J. also scheduled this motion for sale.
[9] In his affidavit sworn August 19, 2020, the Applicant deposed as follows. The Respondent has paid no child support. He wanted to sell the jointly owned home in order to recover his equity. Despite having deposited funds into the bank account, the Respondent had not paid the mortgage since October 2019 and he learned in late June 2020 that the mortgage was in default and in arrears over $10,000. A collection agency contacted him on August 14. The Respondent has refused to sell. The Applicant asked for an order that the Respondent vacate the home by October 15, 2020 because he was concerned that the Respondent would not cooperate with the sale and, because of the state of the home, it would be difficult to prepare the home for sale if the Respondent was living there. According to the younger daughter, when she last visited her mother in December 2019, she said she did not want to return because the home was in such a state of disrepair. He said that it would take some time and effort to repair the home and conduct minor renovations to properly stage the home to maximize the sale price. He pointed out it will likely need a complete repainting and other repairs.
[10] The Applicant indicated that he was interested in having vacant possession of the home to facilitate the sale but that he had no intention of moving in. He made a commitment to list the house as soon as it was ready. He said that he needed his share of the proceeds to address his other financial obligations and assist in caring for the children.
[11] In her affidavit sworn August 25, 2020, the Respondent indicated that she had been reluctant to sell the house but now realized it was inevitable. In paragraphs 5 and 6, she listed many significant repairs that had to be done and confirmed that she has no financial resources to pay for them. She agreed that she would be responsible for half of the cost of the work out of her share of the proceeds of sale of the property.
[12] The Respondent vigorously resists the request that she be required to vacate the home by October 15, 2020. She explained the employment difficulties she has experienced in 2020 and the prospects of obtaining employment in September or October as a public health (covid) nurse. She noted that her now 31 year old son has a partial disability, suffers from intense anxiety and needs to be factored into finding a suitable new home. She pointed out that she has no family to assist her financially. Because of her employment challenges, she says that she would not qualify to rent accommodation and, in effect, the order requiring her to vacate by October 15, 2020 would render her (and her adult son) homeless.
[13] The Respondent also asserted that she has a property claim against the Applicant that she described in paragraph 10. She noted that she needed to bring a motion to extend the limitation period to allow her to make a claim for the equalization of net family property because that claim expired in 2018. She said that she would seek an extension because the Applicant had changed his position on the house which included what she said was an agreement that the house would belong to her. She also objected to payment of the proceeds to each of the parties on closing because of the property claims she intends to assert but which are presently barred by limitation period.
[14] Although the mortgage was in default, she asserted that the urgency would be overcome if the Applicant agreed to apply for the Covid mortgage deferral.
[15] In his reply affidavit sworn August 27, 2020, the Applicant responded to much of the evidence in the Respondent’s affidavit. He observed that if the Respondent has low income, no steady job and very bad credit, it is a result of her own actions. He had held off bringing the motion for eight years. He said that the Respondent was aware of this motion because she was served with the Application in late 2019. He said a motion would have been brought earlier but for the Covid crisis.
[16] The Applicant repeats his assertion that the Respondent would not co-operate with the sale of the home. He also asserted that she had not been forthright about her financial resources and gave some examples.
[17] With respect to the repairs, he pointed out that he had not been in the house for some time, and that many of the repairs she had listed had been outstanding for several years and she not taken any steps to fix them. He insisted that the home had to be vacant so that the trades people would have free and unfettered access to the property. The Respondent had prepared a draft Answer that has not been filed but he (and his counsel) indicated that the Respondent made serious allegations about him and for that reason he did not wish to be in the home when she is present or living there. He said he intended to borrow the money necessary to do the repairs.
[18] The Applicant emphasized the tendency of the Respondent to cause delay. He noted that she was to have completed her tax filings and financial statement by March 16, 2020 and had not done so. The current deadline is September 15, 2020.
[19] In paragraph 11 he disputed that there was any verbal agreement with respect to the home and provided his version of what had occurred. He insisted that all of the net proceeds of sale be distributed and not held in trust. He explained why the Covid mortgage deferral program was not an option.
Motion by the Applicant
[20] In his notice of motion, the Applicant asked that the Respondent’s consent to the sale of the home be dispensed with, that she be ordered to vacate by October 15, 2020, that he could select a realtor and list and sell the home and sign all transfer documents, that he be free to make repairs or minor renovations as are required to sell the home and that 50% of the costs would be reimbursed to him from her share of the proceeds of sale. He confirmed that he would accept the best offer or any offer recommended by the listing agent. The Applicant also asked that after reimbursement of 50% of the repair costs, that the net proceeds would be divided equally provided that all liens or claims registered on title, except for the mortgage, should be paid from her share of the proceeds of sale.
[21] The Respondent has not brought a motion but in her factum, she asks for an order that the house be listed on November 15, 2020, that the parties agree as to the listing broker, that the Applicant’s motion for exclusive possession be dismissed so that she could continue to reside there with her son until the date of closing. She took the position that the mortgage should be paid in full and then each party receive $50,000 (for a total of $100,000) and the balance would be paid into court pending resolution of her claims. She agreed that any liens for which she was responsible would be paid out of her $50,000.
[22] In their affidavits neither of the parties addressed the value of the home and the calculation of the net proceeds. In response to my questions to counsel, it appears that the home may sell for $1 million to $1.2 million. After the mortgage and closing costs, the net proceeds might be in the range of $700,000 to $800,000.
Analysis
[23] Pursuant to s. 2 and s. 3 of the Partition Act, as a joint owner, the Applicant has the prima facie right to sell the property [Marchese v. Marchese, 2019 ONCA 116]. The Respondent now concedes that an order for sale should be made. The issue before me is the conditions of sale.
[24] I agree that the Applicant should have vacant possession so that he can assess the extent of the disrepair, identify and carry out the repairs and renovations that are essential before listing the house for sale. Assuming she vacates as ordered, he is committed to do what is necessary in 30 days so as to list the property for sale by November 15, 2020.
[25] The Respondent insists that if she is required to leave the home, that she will be homeless, as will her son. (In submissions, the Respondent’s counsel agreed that if the court made an order that she vacate the premises, that she would ensure that her adult son left with her.) The Respondent has occupied the home for 8 years. She has known since before the August 5, 2020 case conference, and indeed, as early as December 2019, that the Applicant wanted to sell the house. She has had many months to organize her affairs to obtain accommodation. The circumstances of her adult son’s accommodation are not a legal factor to be considered in this motion. I do not accept the submission that an order requiring her to vacate by October 15 would be “harsh and cruel”. Until the responding affidavit sworn August 25, 2020 and the factum dated August 27, 2020, the Respondent had resisted the sale. I agree that the Applicant ought not to have to rely on her belated willingness to sell the property. It is in the interests of both of the owners that the sale price be maximized. Based on the evidence as to the repair and renovation and sale of the home, I accept that the Applicant will act responsibly.
[26] As for the proceeds of sale, only the Application is before me and in that the Applicant seeks sale and division of proceeds, not an equalization of net family property. In her affidavit, the Respondent describes a claim for a “date of marriage exclusion”, an “unjust enrichment claim for one half of the property ownership costs”, a claim for an equalization of net family property (which is admittedly barred by limitation period) that includes a claim against his pension. None of those issues have been formally claimed because the Answer has not been filed. As of the hearing of the motion, the only legal issue is the claim for sale and division of the proceeds pursuant to the Partition Act. There is no legal justification for paying hundreds of thousands of dollars into court. The net proceeds should be divided on closing.
ORDER TO GO AS FOLLOWS:
[27] The draft order submitted by the Applicant is approved as indicated below, subject to deleting the question of costs on which I did not receive submissions.
[28] The Respondent’s consent to the sale of the matrimonial home is dispensed with.
[29] The Respondent shall vacate the home by October 15, 2020 at 5:00 p.m.
[30] The Applicant shall be free to select a realtor to list and sell the matrimonial home and to sign the listing agreement and all transfer documents.
[31] The Applicant shall be free to make and pay for such repairs or minor renovations as are required to sell the matrimonial home.
[32] The Applicant shall accept the best offer for the sale of the home, or any offer recommended by the listing agent.
[33] Once the mortgage and closing costs have been paid, the balance of the proceeds of sale shall be allocated 50/50 to each party. All other liens or claims registered on title to the property shall be paid from the Respondent’s portion of the proceeds of sale. From her portion of the proceeds of sale, the Respondent shall pay 50% of the cost of repairs or renovations arranged and documented by the Applicant.
[34] The real estate lawyer shall pay to the Applicant his half of the net proceeds of sale plus 50% of the costs of repairs or renovations from the Respondent’s half of the net proceeds. The real estate lawyer shall pay to the Respondent her half of the net proceeds of sale less 50% of the costs of repair or renovations and such liens or claims registered on title other than the mortgage.
[35] Counsel may forward unapproved draft order to my attention for signing.
[36] If by September 15, 2020 the parties have not agreed to costs of the motion, then counsel shall make written submissions consisting of no more than three pages plus bill of costs and offer(s) to settle on this schedule:
(a) by September 22, 2020, the Applicant;
(b) by September 29, 2020, the Respondent.
[37] Any order made with respect to costs of the motion shall be paid out of the portion of the net proceeds of sale to which the payor is entitled.
Kiteley J.
Date: September 4, 2020