COURT FILE NO.: Sudbury CV-21-00009960-0000
DATE: 20210923
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHANTAL LABELLE
Applicant
– and –
PATRICK FITZPATRICK
Respondent
C. McInnis, for the Applicant
J. C. Gardner, for the Respondent
HEARD: September 10, 2021
REASONS FOR JUDGMENT
WILCOX J.
INTRODUCTION
[1] This is an application under the Partition Act for the listing for sale of a jointly-owned property, municipally known as 4599 Fergus Avenue, Val Therese, Ontario, and associated relief.
[2] The parties cohabited in the property, separated on March 23, 2021 and continued to reside separate and apart in it. The property is subject to a mortgage to the Caisse Populaire with an outstanding balance of $297,000.00. There are also two writs against the respondent for child support arrears for a total of about $62,000.00. It is not disputed that the amount actually owing is now about $32,000.00, payable pursuant to a court order at $500.00 per month.
[3] The affidavits of the parties and of a real estate sales person, Katelyn Kruk, (the realtor) were filed with the court. The parties make various conflicting allegations which cannot be resolved in this forum. On the other hand, I find Ms. Kruk to be credible. The parties have indicated their faith in her by using her services to buy the property and then again for listing it for sale in recent months. Ms. Kruk stands to benefit if the property is sold for the highest possible price and, so, can be expected to be reasonably attuned to anything that might detract from that.
[4] The applicant sought an order for the listing of the property for sale with Katelyn Kruk and to have carriage of the sale, and other related relief.
[5] The respondent sought co-listings for the sale, with each party having their own agent, to participate in the sale without restrictions, and to have the property listed for sale “as is”. Also, he wants to bid on the property himself.
[6] The respondent has been interested in buying the property since at least as far back as May, 2021, when he obtained counsel (not present counsel) for that purpose and sought to re-finance with the Caisse. He says that he is prepared to buy it from the applicant for $375,000.00 and was approved by the Caisse for that. The Caisse obtained an appraisal which the respondent says he lacks a copy of. The applicant deposed that it was $440,000.00, to her understanding. The respondent does not contradict that, but just says that he believes it was over $400,000.00. The respondent’s affidavit includes as an exhibit email correspondence with the Caisse in which he gives instructions to it not to release the appraisal to the applicant because she would want more money! In contrast, the respondent deposed that he agreed to list the home only if the purchase price was over $400,000.00. Otherwise he wanted to proceed with a buyout of the applicant’s interests.
[7] The parties listed the property with the realtor, Ms. Kruk, at $379,900.00. The listing agreement was signed on June 3 and 4, 2021 for the period of June 8 to September 8, 2021. Three offers were received, these being between $350,000.00 and $375,000.00, which the applicant countered at $375,000.00. The realtor says that the property did not attract higher offers because of the respondent’s behaviours. These included:
• Limiting the time for offers and therefore the number of prospective buyers.
• Refusing to deal with the three offers, or make counter offers, in a negotiating process.
• Telling a prospective buyer’s agent that the shingles needed replacing and the basement leaked, contrary to what he had told the realtor.
• Telling prospective buyers and their agent that he would not sell.
• Locking the master bedroom door so that it could not be viewed, further reducing the number of prospective buyers.
• Scrawling a message to the applicant on that door.
• Refusing further showings, resulting in the realtor having to cease advertising the property.
• Trying to cancel the listing.
[8] The Partition Act provides for the making of orders for the partition or sale of land under the direction of the court.
[9] The applicant’s counsel filed the case of Martin v. Martin[^1], a decision of the Ontario Court of Appeal. It dealt in part with Partition Act proceedings and the issue of whether there could be a right of first refusal therein. Although the present case does not involve such a right, there are some parallels in the two cases and the court’s comments are instructive. Quoting from Dibattista (in trust) v. Menecola[^2], which dealt with a Partition Act proceeding, it said, “both parties are free to bid at such sale and can be expected to act to protect their investment”. The court then went on to say, “finally, if the spouse with a right of first refusal is in possession, the existence of the right of first refusal will provide a disincentive to maintaining the property, so as to increase its value and saleability. I acknowledge that, in some degree, the same disincentive may operate if a spouse in possession, without a right of first refusal, wants to buy the matrimonial home”. In the present case, the respondent has that disincentive.
[10] The respondent sought the co-listing because, he submitted, the realtor was no longer neutral, having done an affidavit on the applicant’s behalf. I am not persuaded of the necessity of this. As previously noted, she was entrusted by both parties with the listing for the sale after previous dealings with them. Her affidavit is mostly informative rather than partisan. Her interest, because it affects her income, is to get the best price possible. Involving another co-agent raises the spectre of conflicting instructions requiring further litigation to resolve the differences.
[11] With respect to listing the property “as is”, the realtor recommended against it. She noted that they had not bought “as is”, and that the respondent had not requested that in the June, 2021 listing agreement. This is something new. The respondent submitted that the request was out of concern for litigation if buyers sued on the basis of the condition of the property. He would then cross-claim against the applicant and claim against the realtor as a third party. This is all very speculative. Also, although counsel acknowledged the importance of disclosing defects, the realtor deposed that listing a property as “as is” connotes a fixer-upper, which she said this property is not, limiting the pool of potential buyers and resulting in a lower price.
[12] Both agreed to listing the house for sale. This is not necessarily a highly controversial matter even among separating spouses. It appears to have become controversial, complicated and litigious because of conflicting aims. The respondent’s desire is to get the property for the lowest possible price and his conduct has had the effect of depressing that price, to the detriment of the applicant who would benefit from getting the highest purchase price.
[13] In the circumstances, the property should be exposed to the market so as to maximize the price received, while allowing the respondent to bid on it without distorting the sale process. His conduct to date did distort the process. Although he claims in his affidavit of July 27, 2021 to be a changed man in that regard, having received legal advice, I am not convinced as he does not appear to have taken any steps since then to achieve the sale of the property.
[14] Consequently, I find that the proposed terms in the draft order filed by the applicant’s counsel are apt, with an amendment to improve the property’s marketability. Therefore, there will be an order in the following terms:
THIS COURT ORDERS that the property legally described as PCL 31575 SEC SES SRO; LT 3 PL M506, Hanmer, Greater Sudbury, PIN 73504-1747 (LT) and municipally known as 4599 Fergus Avenue, Val Therese, Ontario (“Property”) shall be listed for sale.
THIS COURT ORDERS that the applicant shall forthwith sign an MLS Listing Agreement for the sale of the Property with Katelyn Kruk, Lanctot Realty Inc. Broker (“Realtor”) for a period of 90 days with the list price determined by the Realtor.
THIS COURT ORDERS that the requirement for the respondent to sign the Listing Agreement, or any other documents required to be signed by the Realtor to list the Property and any Agreement of Purchase and Sale, shall be dispensed with.
THIS COURT ORDERS that both parties shall accept advice from the Realtor regarding and shall make reasonable efforts to put the property into a presentable state for viewing by prospective purchasers. That would include providing access to all areas of the property.
THIS COURT ORDERS that the negotiation of, and acceptance or rejection of, any Agreements of Purchase and Sale shall be at the sole discretion of the applicant. The applicant will solely have carriage of the sale of the Property.
THIS COURT ORDERS that:
a. Neither party shall be in or around the Property for any showings, upon being provided with 2 hours-notice of any showings; and,
b. Neither party shall be in or around the Property during any home inspections commissioned by prospective buyers.
- THIS COURT ORDERS that if the respondent wishes to make a bid for the Property and make an Offer to Purchase the Property:
a. he shall use an independent realtor to present and register his Offer(s); and,
b. The respondent is not entitled to know the details of any other Offers made on the Property except in accordance with the Realtor's ethical obligations to prospective buyers.
THIS COURT ORDERS that after the payment of the ordinary closing costs and sale adjustments, the net sale proceeds from the sale of the Property will be paid to the parties equally. The unsatisfied Writs of Execution registered on title against the respondent shall not be considered ordinary closing costs or a sale adjustment. The amounts required to be paid out under the Writs of Execution against the respondent shall be paid out exclusively from his portion of the net sale proceeds.
THIS COURT ORDERS that the Notice of Application is otherwise adjourned sine die, returnable on 5 days written notice by either party.
THIS COURT ORDERS that the claim for costs of the within Notice of Application is adjourned to be determined by a Judge, unless otherwise agreed upon.
[15] One issue that was not addressed was how to protect the integrity of the process if the applicant has sole carriage of the sale and the respondent bids on the property, given his statement in his affidavit that “I don’t believe (the applicant) wishes to sell me the home at any price”. A mechanism might be needed, in the event that the respondent is not the successful bidder, to demonstrate to him that there was a superior bid. If necessary, counsel may arrange to make submissions on this point.
The Honourable Justice James A. S. Wilcox
Released: September 23, 2021
COURT FILE NO.: Sudbury CV-21-00009960-0000
DATE: 20210923
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHANTAL LABELLE
Applicant
– and –
PATRICK FITZPATRICK
Respondent
REASONS FOR JUDGMENT
WILCOX J.
Released: September 23, 2021
[^1]: 1992 7402 (ON CA), 8 O.R. (3d) 41 [^2]: (1990), 1990 6888 (ON CA), 75 O.R. (2d) 443