Court File and Parties

OSHAWA COURT FILE NO.: FC-19-1831

DATE: 20201007

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Shawn Steven Ricketts, Applicant

AND:

Luanne Anita Mackenzie, Respondent

BEFORE: The Honourable Mr. Justice R.E. Charney

COUNSEL: Shawn Steven Ricketts, Self-Represented Michelle Williams, Counsel for the Respondent

HEARD: September 24, 2020

ENDORSEMENT

[1] The respondent, Luanne Mackenzie, brings this motion for an order that the net proceeds from the sale of 2 Sunny Ridge Trail, Hampton, Ontario, (the Sunny Ridge property) be divided equally between the parties, and various corollary relief relating to their family law proceeding.

Facts

[2] The respondent and the applicant, Shawn Ricketts, were never married, but lived together in a spousal relationship from August 2015 to November 2018. They continued to reside in the same house until October 2019, when the respondent moved out. They have one child together, born January 2016.

[3] The parties agreed to purchase the Sunny Ridge property in May 2016 for $660,000. The deal closed on August 19, 2016.

[4] In the spring of 2019, they agreed to list the Sunny Ridge property for sale. The property was sold in February 2020 for $875,000. After the discharge of the mortgage and other fees, approximately $240,995 is held in trust by the real estate lawyer.

Procedural History

[5] This motion is somewhat irregular from a procedural perspective. Since the parties were never married, and the definition of spouse for the purposes of Parts I and II of the Family Law Act is limited to married spouses (see s. 1), the parties’ respective pleadings did not seek any relief with respect the equalization of net family property under Part I of the Family Law Act. Neither party sought the division or distribution of the net proceeds of sale from the home, which, at the time of the separation was still held in both parties’ names.

[6] The parties’ respective pleadings (Application and Answer) dealt only with custody, access and support under Part III of the FLA, where the expanded definition of spouse applies (see s. 29). The only reference to the Sunny Ridge property was the respondent’s request for an Order that she be permitted to return to and reside in the property.

[7] Even though the pleadings did not address the equalization or division of property, the parties raised the issue of the distribution of net proceeds from the sale of the home at a Case Conference held on December 9, 2019. On that date, the Sunny Ridge property had been listed for sale and a conditional offer had been made. In his Endorsement, the Case Conference judge indicated that either party could bring a motion regarding the sale of the home or the interim disbursement of proceeds from the sale of the home, and that the proceeds of sale would be held in trust pending agreement of the parties or further court order. There is no indication that either party sought leave to amend their respective pleadings.

[8] The Case Conference continued on January 20, 2020, and one of the issues discussed was the applicant’s request for an unequal division of the proceeds of sale from the home. Again, the Endorsement of the Case Conference judge stated: “Motions re: distribution of sales proceeds…permitted.” Again, there is no indication that either party sought leave to amend their respective pleadings.

[9] On May 14, 2020 the respondent brought a motion asking for an order that certain joint debts relating to the sale of the Sunny Ridge property that had not yet been paid, be paid from the proceeds of the sale of the Sunny Ridge property. The motion was not opposed. On May 22, 2020 Nicholson J. issued an Order that these debts – for work related to the septic tank on the property, a balance owing for appliances purchased for the property, and legal fees relating to the sale of the property – be paid from the proceeds of the sale.

[10] On August 4, 2020, the respondent brought a 14B motion for an order “setting a motion date on the issue property”. The motion was scheduled for September 24, 2020.

Position of the Parties

[11] The respondent served her affidavit material in support of her motion on September 15, 2020.

[12] The respondent takes the position that she and the applicant purchased the property as joint tenants. The parties are both named as owners on the parcel register under the Land Titles Act. The parcel register also names both on the mortgage for the property, which was first with the Ukrainian Credit Union (for $472,000), and then refinanced with CIBC (for $900,000). They are both named as purchasers in the Agreement of Purchase and Sale (APS) dated May 11, 2016.

[13] As joint tenants, the respondent argues, the parties co-own the property, and each holds an equal interest in the property. As such, the net proceeds should be divided equally regardless of each party’s contribution to the purchase price.

[14] The respondent also alleges that since purchasing the home the parties shared equally in the carrying costs, including the mortgage and utilities.

[15] The applicant served and filed his responding affidavit on September 21, 2020.

[16] He alleges that he paid approximately $213,000 towards the Sunny Ridge property out of the proceeds from the sale of a home that he owned solely. He alleges that the respondent was added to the title of the Sunny Ridge property only so that he could qualify for a mortgage for that property, and that he made all the mortgage payments. He also alleges that he paid another $52,000 for renovations for the property. He argues that he never intended any of this to be a gift to the respondent. Including his own labour, the respondent alleges that he invested $300,000 into the Sunny Ridge property. While his affidavit evidence is somewhat disorganized, he appears to be claiming a resulting trust and/or unjust enrichment.

[17] The applicant also alleges that he has additional exhibits to support his allegations, but that due to page limits imposed by the court for motions filed online (ten pages of narrative and ten pages for exhibits), he was not able to include all of his evidence in his affidavit. The applicant did not bring a 14B motion in advance of the hearing to permit him to file a longer affidavit, even though this is permitted by the Notice to the Profession and Family Law Litigants – Protocol for Family Matters in the Superior Court of Justice, Central East Region (Effective June 26, 2020), para. 3(b) 19.

[18] The respondent objected to the filing of the applicant’s affidavit. She argues that the applicant did not plead resulting trust or unjust enrichment in his Application, and he should not be able to raise these issues for the first time just 3 days before her motion. The respondent declined my offer to adjourn the motion to permit her to respond to these allegations. While she disputes the applicant’s allegation that she did not contribute to the carrying costs of the house, she takes the position that since the parties owned the Sunny Ridge property as joint tenants, she is entitled to 50% of the net proceeds as a matter of law.

Analysis

[19] The procedural irregularities that gave rise to this motion have placed the court in a difficult position. As indicated, neither party raised the division of the net proceeds from the sale of the Sunny Ridge property in their pleadings. Nonetheless, the court did authorize both parties to bring motions relating to the distribution of sales proceeds from the home. Neither party appears to have objected to this procedure, nor requested an opportunity to amend their pleadings to set out their position.

[20] As matters progressed, it has become clear that there are significant factual disputes that may be relevant to the resolution of this issue. These disputes would have been clear earlier in the proceedings if the issues had been properly pled at some point. The importance of the pleadings is sometimes overlooked, particularly in family law cases where the issues in dispute frequently evolve over time. Discussion at a case conference is not a substitute for proper pleadings.

[21] The issues in a civil action must be decided within the boundaries of the pleadings. In Musicians’ Pension Fund of Canada (Trustees of) v. Kinross Gold Corp., 2014 ONCA 901, the Ontario Court of Appeal held, at para. 84:

As this court has consistently emphasized, it is central to the litigation process that issues in a civil action be decided within the boundaries of the pleadings. Fundamental fairness and the efficacy of the civil litigation process demand no less.

[22] Similarly, in Wilson v. Beck, [2013] ONCA 316, leave to appeal to S.C.C. refused, [2013] S.C.C.A. No. 300, at para. 27, MacPherson J.A. set out the principle that “[i]t is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings.”

[23] The same principle has been affirmed by the Supreme Court of Canada in Lax Kw'alaams Indian Band v. Canada (Attorney General), 2011 SCC 56, at para. 43:

Pleadings not only serve to define the issues but give the opposing parties fair notice of the case to meet, provide the boundaries and context for effective pre-trial case management, define the extent of disclosure required, and set the parameters of expert opinion. Clear pleadings minimize wasted time and may enhance prospects for settlement.

[24] In the present case, neither party has pled the issue they seek to address in this motion. It is not surprising, therefore, that the materials filed are not adequate to address the legal and factual disputes that have arisen.

[25] In short, the materials filed by the parties do not give me the confidence that I can make the relevant findings of fact necessary to apply the facts to the law. Maybe this issue can proceed by way of motion, maybe this will require the trial of an issue, but this question was not addressed by either side because of the lack of proper pleadings and the rather truncated process by which the motion arose.

[26] There is approximately $240,000 in dispute on this motion, and the record provided by both parties appears to be deficient. In making this observation I do not mean to be critical of either party. Sometimes what first appears as a simple, straightforward question becomes more complicated than either party envisioned. In this regard, some reference to case law would have been of assistance to the court, yet neither party presented case law to support their respective positions.

[27] It is now clear that this motion could not be dealt with on the basis of the abridged schedule adopted by the parties. It would not be appropriate to decide this motion without some reply from the respondent regarding her position with respect to the allegations made by the applicant, and/or some legal submissions (from each party) as to whether or how the applicant’s allegations are relevant to the disposition of this motion.

[28] Another difficulty with the respondent’s evidence is that she relies on the parcel register under the Land Titles Act as evidence that the parties owned the land as “joint tenants”. The parcel register does not, however, in this case, indicate the nature of the parties’ title or interest in the land. It simply names each party. It does not, anywhere, refer to them as “joint tenants”. None of the documents relied on by the respondent refers to the parties as joint tenants. This is an important point, and the respondent should be given an opportunity to rectify this deficiency by filing the Transfer Deed or Land Transfer Tax Statement, or some other document that may identify the nature of the parties’ title to the property.

[29] Similarly, the applicant should be given an opportunity to include in his affidavit any exhibits that he considers necessary for his case. As a self-represented litigant, he may not have been aware that he could have applied to the Court for permission to file a longer affidavit or more exhibits, and it would not be fair to decide this case if he was under this misunderstanding.

[30] Once the pleadings are amended, the parties may choose to proceed to a Settlement Conference to address the issues as pled.

[31] Since the parties were previously given leave to bring a motion on this issue, the respondent may reschedule her motion through the Trial Coordinator’s Office without proceeding to a Settlement Conference. As indicated, it is not yet certain whether the issues raised on this motion can be properly dealt with in a regular motion. That is a question that the respondent will have to reassess once the pleadings are amended.

[32] Since I am already familiar with the parties’ positions and the evidence filed to date, I will remain seized of the motion if the respondent decides to reschedule the motion rather than proceeding to a Settlement Conference.

Conclusion

[33] Accordingly, I am exercising my jurisdiction under Rule 14(7) to give the following directions:

a. Each party is given leave to amend their respective pleadings (Application and Answer) within 30 days of the date of this decision.

b. Once the pleadings are amended, the parties may schedule a Settlement Conference through the Trial Coordinator’s Office.

c. In the alternative, once the pleadings are amended, the respondent, Luanne Mackenzie, may re-schedule her motion through the Trial Coordinator’s Office.

d. If the respondent chooses to proceed with her motion, the respondent, shall serve her affidavits and exhibits in support of this motion with the Notice of Motion and at least 30 days before the motion is scheduled to be heard.

e. The applicant, Shawn Ricketts, shall file any affidavits and exhibits on which he intends to rely at least 20 days before the motion is scheduled to be heard.

f. The respondent shall file any reply affidavits at least 15 days before the motion is scheduled to be heard.

g. The respondent shall file a factum in support of her motion at least 10 days before the motion is scheduled to be heard.

h. The applicant shall file a reply factum in support of his position by at least 5 days before the motion is scheduled to be heard.

i. Factums are limited to 10 pages. Affidavits and exhibits may exceed the page limit set out in para. 3(b) 19 of the Notice to the Profession, supra.

j. If this motion proceeds prior to a Settlement Conference, I remain seized of the motion.

k. Costs of this motion are reserved to the court that hears the motion on its merits.

Justice R.E. Charney

Date: October 7, 2020