SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-18/D168

DATE: 2021/01/19

RE: Megan Dombrowski, Applicant

AND:

Ian Dombrowski, Respondent

BEFORE: Madam Justice M. Fraser

COUNSEL: Jonathon S. Solomon, Counsel for the Applicant

Dylan Crosby, Counsel for the Respondent

HEARD: January 6, 2021

ENDORSEMENT

[1] As a result of COVID-19 which has caused the suspension of regular court operations at this time, as set out in the Notice to the Profession dated March 15, 2020 (available at https://www.ontariocourts.ca/scj/covid-19-suspension-fam/) this matter was heard by telephone conference.

[2] The Applicant, Megan Dombrowski (the “Applicant”) brings a motion for the sale of their jointly owned property located at the municipal address of 187 Barron Canyon Road, Pembroke, ON. (the “matrimonial home”). The Respondent, Ian Dombrowski (the “Respondent”) opposes the proposed sale. He continues to reside in the home and wishes to keep it by having the Applicant’s interest in the home set off the equalization he claims she will owe him. He asks that the issue be left to be determined at trial.

[3] The Applicant also asks for an order requiring the parties to communicate through the Family Wizard application. The Respondent is agreeable to this.

Background:

[4] The parties lived together for approximately eighteen years (thirteen as a married couple). They were married on August 30, 2003. They separated on November 20, 2016.

[5] There are two children of the marriage, River Janek Dombrowski born December 13, 2007 and Asha Leahn Dombrowski born October 1, 2009. Both children have primarily resided with the Applicant since the parties’ separation. They reside with the Respondent every other weekend and one weekday night on the off-week.

[6] Upon separating in November 2016, the Applicant left the matrimonial home with the children. The Respondent has remained resident at the matrimonial home to date.

[7] The Applicant is employed full-time as a teacher with the Renfrew County District School Board.

[8] The Respondent worked in various capacities through the marriage, initially as a restaurant manager and then as a project manager for a construction company.

[9] In 2015, the Respondent was diagnosed with depression and anxiety. Since then, it appears, he has taken several medical leaves from employment. The Respondent maintains that due to his health issues, he has not worked for several lengthy periods of time in the years following the parties’ separation.

[10] The Applicant commenced this Application on March 20, 2018. The Respondent did not initially respond. Therefore, at a Case conference on August 30, 2018, James J. noted the Respondent in default, granted the Applicant leave to bring a motion for the sale of the matrimonial home and made an order that, among other things, the issues proceed to an uncontested trial.

[11] The Respondent then decided he wished to respond to the proceeding and an order was made (on consent) on December 17, 2018, setting aside the noting in default. This Order also provided that the Respondent was to pay the Applicant monthly child support in the amount of $755.00 for the two children based upon his income of $50,000.00 per annum.

[12] The Respondent filed his Answer, Form 35.1 Affidavit and sworn Financial Statement on December 21, 2018.

[13] The parties advise that they unsuccessfully attempted to mediate the outstanding issues in March 2019.

[14] This litigation has not progressed since that time. No settlement conference has been held nor has there been a request to schedule a settlement conference.

[15] The Respondent has continued to reside in the matrimonial home. He wishes to purchase the Applicant’s one-half interest in the equity by setting off the equalization payment he claims the Applicant will owe him.

[16] The Applicant had the matrimonial home appraised as at the date of separation. The value attributed to the home at that time was $300,000.00. No up-to-date appraisal has been conducted.

[17] There is a mortgage debt secured against the home. As at September 15, 2020, the balance outstanding was $239,265.24.

[18] The Applicant has continued to pay 50% of the monthly mortgage payment (which includes the property taxes) for the matrimonial home since separation notwithstanding the fact that the Respondent has lived there exclusively. She also sometimes paid more than one half

of the monthly payment and, on a number of occasions, she made the full payment. She did so because she was concerned that otherwise the mortgage would fall into arrears and negatively impact her credit.

[19] The parties agreed, when the mortgage came up for renewal in September 2019, that any equalization payment owed by the Applicant would be reduced, at a minimum, by the dollar amount she contributed towards the payment of the mortgage post-separation.

[20] The current mortgage payments on the matrimonial home are $1296.00 monthly.

[21] In March 2020 and due to the COVID-19 pandemic, the Respondent applied for and was granted a six-month deferral under the COVID-19 Mortgage Payment Deferral program. As such, the mortgage payments were suspended for a six-month period commencing in March 2020.

[22] The evidence of the Respondent is that he is unable to qualify for a mortgage due to his poor credit score. He asserts that his parents are willing to pay out the current mortgage registered on title and have the property transferred to them.

[23] The Respondent wishes to continue to reside in the matrimonial home through an arrangement and with the assistance of his parents. His Net Family Property Statement would suggest that the Applicant will owe him approximately $105,812.39. Based upon the value of the matrimonial home at the date of separation, the Applicant’s share of the equity would presently approximate $33,867.38.

[24] The Applicant has provided a Letter of Opinion which suggests the matrimonial home may now be worth $400,000.00 to 425,000.00. This Letter of Opinion was prepared by an agent who did not view the property. If this does represent the true present value of the property, then the value of the Applicant’s equity more approximates $80,000.00.

[25] As such, even if the matrimonial home has increased in value, an offset is still feasible. The Respondent is prepared to have the appraisal on the matrimonial home updated to reflect its current value.

[26] The Applicant had a workplace pension. The Family Law Act value of the Applicant’s pension is $247,256.21. The value of this asset has been included in the Respondent’s equalization calculation. The Applicant does not want this.

[27] The Applicant wishes her pension to be divided. She wishes to sale the matrimonial home so that her share of the equity will be available to her as cash “in hand.” She doesn’t want her share included in the equalization calculation as this would mean that she will emerge with no present liquidity. Her assets will then mainly consist of retirement funds.

[28] The Applicant wishes to take advantage of the present real estate market. She does not wish to be burdened any longer with the financial obligation of the mortgage on the matrimonial home given she has to additionally address the costs of her own property, which she purchased outright from her grandmother’s estate.

[29] She suggests that the Respondent could live at his parents or at their cottage.

[30] The Applicant additionally points out that the child support ordered payable by the Respondent is in arrears. This has further added to her present financial burden.

[31] In response, the Respondent points out that his parents do not have a spare bedroom at their home and that their cottage is located two hours away from Pembroke and is not winterized. Also, he claims that the child support obligation needs to be varied, including retroactively, to reflect the fact that he has been unemployed for a significant period of time since that order was made.

[32] The Respondent has made a claim for spousal support from the Applicant. While he has not pursued any payment on an interim basis, it has not been disputed by the Applicant that the Respondent has suffered from health issues and that throughout the marriage his income level was rather significantly less than that of the Applicant. A DivorceMate calculation appended to his affidavit would suggest that the Spousal Support Guidelines would recommend that the Applicant pay spousal support ranging from $1,044 to $1,392 monthly based upon his position that the Applicant’s income is $95,632 and his is $30,000.

[33] The Respondent advises that if given the opportunity, he will assume any further payment of the mortgage pending trial.

The Law:

[34] Sections 2 and 3 of the Partition Act, R.S.O. c. P.4 provide as follows:

2. Who may be compelled to make partition or sale

All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.

3(1) Who may bring action or make application for partition

Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

[35] In Batler v. Batler (1988), 1988 4726 (ON SC), 18 R.F.L. (3d) 211 (Ont. H.C.), Grainger J. held that a joint tenant has a prima facie right to sale prior to trial. This right exists unless the other joint tenant has made claims that would be prejudiced if the property were sold.

[36] Grainger J. held that in order to successfully resist an application for sale, the responding party should have an order for interim exclusive possession, or be able to show that the claims he/she intends to put forward at trial will be prejudiced by an immediate sale.

[37] The Court of Appeal addressed the issue further in both Silva v. Silva (1990), 1990 6718 (ON CA), 30 R.F.L. (3d) 117 and Martin v. Martin (1990), 1990 12225 (ON SC), 31 R.F.L. (3d) 210 (Ont. Ct. Gen. Div.), aff’d at (1991), 1991 12830 (ON SCDC), 34 R.F.L. (3d) 173 (Ont. Div. Ct.), rev’d in part at (1992), 1992 7402 (ON CA), 38 R.F.L. (3d) 217 (Ont. C.A.). The Court recognized that a joint owner has a prima facie right to partition and sale; however, as stated by the court in Silva at para. 23:

… 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, the 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.

[38] In Martin, the Ontario Court of Appeal confirmed that the sale of the matrimonial home prior to trial should not be made as a matter of course. At para. 26:

Although there is clear jurisdiction under the Partition Act to order the sale of the parties’ matrimonial home, I do not wish to be taken to have endorsed the wholesale issuance of these orders. In my view, an order directing the sale of the matrimonial home before trial should only be made in cases where, in all of the circumstances, such an order is appropriate. Orders for the sale of the matrimonial home made before the resolution of Family Law Act, 1986 issues (particularly the determination of the equalization) should not be made as a matter of course. See Binkley v. Binkley (1988), 1988 8717 (ON CA), 14 R.F.L. (3d) 336 (Ont. C.A.). In addition, spousal rights of possession (s. 19) and any order for interim exclusive possession should be taken into account.

[39] In assessing and guarding against potential prejudice, the court must take a realistic view of the potential impacts of a sale — both positive and negative — in relation to the interests of both joint tenants. Where the financial or other circumstances of the parties are such that a sale would be the inevitable result at trial, there is little justification for delaying the sale. See Zargar v. Zarrabian, 2016 ONSC 2900 (Ont. S.C.J.); Giglio v. Giglio, 2015 ONSC 8039 (Ont. S.C.J.); Keyes v. Keyes, 2015 ONSC 1660 (Ont. S.C.J.).

[40] The court must be mindful of the whole of the proceeding, and the need to achieve a final resolution for the family as fairly and expeditiously as possible See Kereluk v. Kereluk 2004 34595 (ON SC), [2004 CarswellOnt 4332 (Ont. S.C.J.)], 2004 34595.

[41] Timing can be a relevant consideration in dealing with a motion for sale at a temporary stage. The availability of a trial within a short period might reduce the pressure for an immediate sale. See Goldman v. Kudeyla, 2011 ONSC 2718 (Ont. S.C.J.).

[42] A pending equalization claim may also be relevant. While the court cannot compel one joint tenant to sell to the other, or give either joint tenant a right of first refusal, a recipient of an equalization payment may propose to set that entitlement off against their former spouse's share of the equity in the home. If a sufficiently particularized proposal seems viable, a sale should be delayed to allow proper consideration of that option. See Chaudry v. Chaudry, 2012 ONSC 2149 (Ont. S.C.J.).

Analysis:

[43] For the following reasons, I am not prepared to order the immediate listing and sale of the matrimonial home.

[44] The Family Law Act's primary goal is a division of assets that is fair to both spouses.

[45] I must consider and attempt to guard against potential prejudice. To do so I must ask whether there are realistic issues or claims yet to be determined on a final basis, which would be prejudiced or precluded if a property is ordered to be sold at the temporary stage.

[46] The Respondent opposes the partition and sale of the former matrimonial home because he wishes to retain the home. He seeks the opportunity of showing at trial that, with the equalization payment due to him and other adjustments for retroactive and future support, he would be in a position to set off the Respondent's interest in the home against amounts due and owing to him.

[47] It is clear that the Respondent will be entitled to an equalization payment from the Applicant. What amount will be payable to the Respondent will, to a great extent, depend on whether a division of the Applicant’s pension is ordered.

[48] While the Applicant takes the position that she wishes to divide her pension with the Respondent so that she gains the benefit of some liquid funds after trial, and while section 10.1 of the Family Law Act provides a mechanism to order the immediate transfer of a lump sum from the pension plan, there is no presumption in favour of a lump sum transfer as opposed to a cash equalization payment. The Family Law Act simply provides that equalization may be paid by pension rollover to permit the payor to retain some liquidity following separation.

[49] In determining whether to order the immediate transfer of a lump sum out of a pension plan and in determining the amount to be transferred, the court in this instance will need to consider, among other things, the following:

1. The nature of the assets available to each spouse at the time of the hearing.

2. The proportion of a spouse's net family property that consists of the imputed value, for family law purposes, of his or her interest in the pension plan.

3. The liquidity of the lump sum in the hands of the spouse to whom it would be transferred.

4. The resources available to each spouse to meet his or her needs in retirement and the desirability of maintaining those resources.

[50] In this instance, the spousal support calculation provided for this hearing would suggest that the Respondent has a potential support claim against the Respondent. While it could be that the evidence, at trial will mitigate against such a claim, I do not believe the evidence available for this motion is sufficient to discount a possible claim.

[51] The Respondent is prepared to assume payments of the mortgage in full pending trial.

[52] While the Respondent was initially slow to respond to this proceeding resulting in an approximate four month delay, I do not find that the evidence before me supports any conclusion that the greater delay which has occurred since then (from December 2018 to date) is attributable to either party.

[53] If the parties choose, there is very likely every opportunity this matter can proceed to trial in the spring sittings. This means a three to four-month delay for the Applicant if she succeeds in her request that the matrimonial home be sold. However, this delay seems minor in the overall timeline of this proceeding.

[54] Finally given that the real estate market tends to slow down during the winter months, and given the present “stay-at-home” order made as a consequence of the COVID-19 pandemic, I am not satisfied that the Applicant would gain anything by listing the matrimonial home prior to a trial which could occur in the spring 2021.

Disposition:

[55] For these reasons, I make the following order:

1. The Applicant’s request for an order that the matrimonial home be listed for immediate sale is denied;

2. The Respondent shall be solely responsible for the payment of the mortgage on the matrimonial home pending trial;

3. If the Respondent defaults on a mortgage payment pending trial, the Applicant’s motion may be renewed;

4. On consent, there will be a temporary order requiring the parties to use the Family Wizard application for their communications;

5. Should the parties be unable to agree on costs, the Respondent may make written submissions as to costs within 15 days of the release of this endorsement. The Applicant shall have 15 days thereafter to respond. All such written submissions shall be no more than three pages in length, double-spaced, in addition to any pertinent offers and draft bills of costs.

Date: January 19, 2021