COURT FILE NO.: FS-19-146-00
DATE: 2021 10 01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARGARITA ARAGON
Applicant
N. Epstein, for the Applicant
- and -
TOMASZ JAN SOBON
Respondent
M. Dibua, for the Respondent
HEARD: July 15, 2021
REASONS FOR JUDGMENT
SHAW J.
Introduction
[1] The respondent, Mr. Sobon, seeks an order for the sale of the jointly-owned matrimonial home pursuant to s. 3(1) of the Partition Act, R.S.O. 1990, c. P.4 (the “Act”). He also seeks an order that each party receive $100,000 upon the sale of the home, with the balance held in trust pending further agreement or court order. The applicant, Ms. Aragon, opposes sale of the home principally on the basis that Mr. Sobon acted in bad faith during and after their cohabitation.
[2] Mr. Sobon also seeks an order for decision-making authority regarding their son, who is 17 years old, and a shared parenting arrangement. He also seeks an order terminating his child support obligations. Ms. Aragon opposes this termination on the basis that their son has lived with her in the matrimonial home since the parties separated.
[3] For the following reasons, I find that the matrimonial home is to be listed for sale and sold forthwith. Each party shall receive $100,000 from the net proceeds of sale, with the balance held in trust pending further order or agreement.
[4] There is insufficient evidence before the court to make any order regarding changes to the current parenting arrangements, or to make any order for ongoing child support. The issue may be revisited when both parties file updated financial statements, confirmation of their current earnings, and further affidavits regarding the current parenting arrangements for their son.
Applicable Legal Principles regarding Sale of the Home
[5] The jurisprudence is clear that a requesting party has a prima facie right to sell a jointly-owned property under ss. 2 and 3 of the Act. The onus is on the resisting party to show sufficient reasons why the order for sale should not be made.
[6] In Silva v. Silva (1990), 1990 6718 (ON CA), 75 D.L.R. (4th) 415 (Ont. C.A.), the court dealt with the interplay between the Act and proceedings commenced under the Family Law Act, 1986, S.O. 1986, c. 4, as amended, in relation to the matrimonial home. The court found, at p. 424, that the two statutes are not incompatible, but:
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. [Family Law Act]. Putting it more broadly, an 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.
[7] In Afolabi v. Fala, 2014 ONSC 1713, 46 R.F.L. (7th) 75, at para. 33, the court found that should an application be made for sale under the Act, the party opposing the sale must provide evidence of malicious, vexatious, or oppressive conduct on behalf of the requesting spouse. If the spouse opposing the sale can establish such conduct, the court has narrow discretion to refuse to order the sale of the home: Latcham v. Latcham (2002), 2002 44960 (ON CA), 27 R.F.L. (5th) 358 (Ont. C.A.), at para. 2.
[8] When considering oppressive conduct, the court may consider whether the sale of the home would cause hardship to the opposing party or the children. For example, it would constitute oppressive conduct if the opposing party did not have the ability to find somewhere else to live or the children would be deprived of a place to live: Kaing v. Shaw, 2017 ONSC 3050, 94 R.F.L. (7th) 396, at para. 34.
[9] In Goldman v. Kudeyla, 2011 ONSC 2718, 5 R.F.L. (7th) 149, at paras. 17-18 and 20, McGee J. summarized the interplay between the Family Law Act, R.S.O. 1990, c. F.3 and the Act as follows:
A property owner, whether the holder of an exclusive interest or a joint interest has a prima facie right to sale. When the property consists of an interest in a matrimonial home, that prima facie right is subject to any competing interest under the Family Law Act that would otherwise be defeated.
To make a pre-trial order for the sale of a matrimonial home the court must first determine whether the resisting party has established a prima facie case that he or she is entitled to a competing interest under the Family Law Act. If not, then the right to sale prevails. If so, then the motion for sale is denied unless the selling party can demonstrate that the sale would not prejudice the rights of the resisting party.
… Issues arising from relationship breakdown are by their very nature inextricably intertwined. I agree with Justice Wright’s reasoning in Walters [citation omitted], confirmed in Kereluk, [citation omitted] that orders for the sale of the home should not be made as a matter of course. One must always be mindful of the whole of the proceeding and the need to move forward as fairly and expeditiously as possible. At the same time, determinations must have a starting point. The sale of the matrimonial home is often the most appropriate catalyst to affect the equal division of family assets and establish post separation parenting patterns.
[10] As McGee J. noted, there have been cases in which the court has denied interim motions for sale. In each, there were compelling circumstances favouring the resisting party, such as trial availability within a short period, prejudice to the resisting party’s right to an equalization payment, or the need to preserve the residence for a vulnerable spouse or child who may retain the home after trial.
Position of the Parties
[11] Mr. Sobon’s position is that the jointly-owned matrimonial home should be sold given the significant equity it holds.
[12] Ms. Aragon’s position is that the matrimonial home should not be sold. She alleges Mr. Sobon is in arrears of child support and should not be rewarded with the sale of the home. She has also advanced a constructive trust claim against the respondent’s one-half interest in the home, claiming that the respondent recklessly incurred debts during their cohabitation that necessitated a refinancing of the home. She also asserts the respondent has acted in bad faith, as he has failed to pay his share of home expenses and only seeks a sale to pay his debts.
Background
[13] The parties were in a common-law relationship, but they disagree on the date they began living together and the date they separated. They do agree that they have a son who is now 17 years of age. However, they do not agree on the current parenting arrangement. Ms. Aragon alleges they began living together in 2003 and separated on December 14, 2017. Mr. Sobon alleges they began living together in 2004 and separated in January 2019. He remained living in the house until August 2019.
[14] For this motion, I do not have to resolve the conflicting evidence regarding the length of their cohabitation, but this dispute highlights the extent of the conflicting evidence in the filed affidavits.
[15] Ms. Aragon initially commenced an application in the Ontario Court of Justice (“OCJ”). An interim order was made on April 15, 2019, requiring Mr. Sobon to pay $400 per month in child support. At the time of the order, Mr. Sobon was earning $71,000 per year. According to Ms. Aragon, Mr. Sobon is in arrears after not paying this support, but Ms. Aragon has not filed a Statement of Arrears from the Family Responsibility Office.
[16] As the OCJ does not have jurisdiction to deal with property issues, this action was commenced by Ms. Aragon in July 2019. In addition to seeking custody and support, she is advancing an argument for a constructive or resulting trust over the equity in the home, based on the mortgage refinancing required to pay and repay debts incurred by Mr. Sobon during their relationship.
[17] Mr. Sobon filed an answer and claim seeking custody, support, and sale of the home. He advanced a constructive trust claim over a Mercedes Benz vehicle the parties purchased during their relationship.
[18] Both parties are also seeking compensation from the other for conduct during the marriage. Ms. Aragon seeks damages for mental anguish and Mr. Sobon seeks damages for being “used and manipulated.” I make no findings regarding these claims.
[19] While there is a great deal of disputed evidence before this court, it is not in dispute that the parties purchased the home in 2004, before their son was born. Ms. Aragon has lived in the home since the parties separated. Mr. Sobon filed a Comparative Market Analysis prepared by a real estate agent at Royal Lepage that suggests a list price for the home of $920,000 to $950,000. Ms. Aragon did not dispute this evidence. There is an existing mortgage, which as of October 16, 2020, had a remaining principal owing of $440,433.40. There is, therefore, equity in the home of approximately $500,000. Again, Ms. Aragon did not dispute this evidence in her affidavit.
[20] According to Ms. Aragon, their son lives primarily with her in the home. This differs from Mr. Sobon’s evidence that their son lives with them both on an equal basis. Mr. Sobon’s account is confirmed in a report from the Office of the Children’s Lawyer (“OCL”), dated October 19, 2020, which indicates that the son says he spends equal time with both parents, at his discretion.
[21] In her affidavit, Ms. Aragon deposed that, commencing in September 2020, their son was spending a week at a time with Mr. Sobon because Mr. Sobon moved to a residence near their son’s school. Her evidence is that prior to this date and since January 2021, however, their son lived principally with her. She states their son no longer spends extended time with Mr. Sobon.
[22] According to recommendations in the OCL’s report Mr. Sobon should have sole custody of their son and final say in major decisions. The OCL also recommended that the son spend alternate weeks with each parent. Mr. Sobon seeks an order implementing these recommendations on an interim basis.
[23] In my view, based on the evidentiary record before me, a decision regarding the sale of the home in this case, does not turn on the parenting arrangements, which are instead relevant to the quantum of child support owing.
[24] It is also not disputed that in September 2018 the mortgage on the home was refinanced, and several debts were paid with the proceeds of the refinancing. The debts included payment of the existing first mortgage, a joint line of credit, Mr. Sobon’s debt to Canada Revenue Agency, the purchase of a Mercedes Benz vehicle for approximately $53,000, and various credit cards. There was a balance remaining from the refinancing of approximately $29,400. As the parties could not agree on how the funds were to be disbursed, the balance was held in trust by the lawyer retained for the refinancing.
[25] Initially, from January 2019 to May 2019, the funds held in trust were used to pay the ongoing monthly mortgage payment of approximately $3,000. These payments ended, however, when both parties alleged the other was not making the full mortgage payment with funds released to them by the lawyer. It remains unclear to me why these payments did not continue if both parties intended for the funds to be used to pay the mortgage. While there are, therefore, still funds in the lawyer’s trust account, there is no evidence before me regarding the balance of these funds. Ms. Aragon’s position is that Mr. Sobon did not make the mortgage payments with these funds as he should have, and she had to cover the difference. There will have to be a reconciliation of what mortgage payments were paid by Ms. Aragon since May 2019, and whether she should be reimbursed from the funds still held in trust.
[26] Similar to the mortgage, Ms. Aragon has paid other carrying costs for the home since May 2019. She claims Mr. Sobon ought to have been paying his one-half share as a joint owner. An accounting will be necessary as Mr. Sobon has an obligation to pay his share of these additional expenses, such as taxes and insurance. Likewise, he may have a claim for occupation rent from Ms. Aragon. I also note that Mr. Sobon wrote letters to Ms. Aragon in 2019 and 2020 seeking the sale of the home, but Ms. Aragon would not agree, thus necessitating this motion. She has therefore been aware for some time that Mr. Sobon wanted the home sold.
[27] Mr. Sobon was working as an employee for New-Can Group Inc. when the parties separated. His work involved installing flooring in nursing homes. According to his financial statement sworn September 10, 2019, his income was $67,106 per year. No updated income information for Mr. Sobon has been filed for the 2020 or 2021 tax years.
[28] According to Ms. Aragon’s financial statement sworn July 5, 2019, her income working at a bank was $39,996 per year. No updated income information for Ms. Aragon has been filed for the 2020 or 2021 tax years.
[29] Neither party filed an updated financial statement for this motion.
[30] In December 2020, Mr. Sobon was diagnosed with throat cancer. He has filed medical information confirming his diagnosis. He has commenced chemotherapy treatment. Mr. Sobon filed a letter from his employer dated March 6, 2021, indicating that Mr. Sobon had not worked since December 4, 2020 due to business reductions caused by COVID-19 restrictions. The letter said the company would have him return to work once restrictions eased. The letter also stated Mr. Sobon was undergoing cancer treatment which further impeded his ability to work. Mr. Sobon’s oncologist stated, in a letter dated May 26, 2021, that Mr. Sobon was approved to be off work for six months.
[31] There is no evidence regarding Mr. Sobon’s current income, such as whether he has been in receipt of employment insurance or other benefits like short-term disability.
[32] As a result of his cancer diagnosis, Mr. Sobon sought an order staying his child support obligations. On May 31, 2021, Harris J. found that there had been a material change in Mr. Sobon’s income and ordered a temporary four-month stay of enforcement of the support order. In his endorsement, Harris J. stated it was clear to him that Mr. Sobon could not afford the payments at that time.
Analysis
a) Sale of the home
[33] An order for the sale of the matrimonial home is relief routinely sought in matrimonial litigation. It is not uncommon that parties wish to access the equity in the matrimonial home for a variety of reasons, such as purchasing another residence or paying debt. Needing access to equity to pay debts is not a basis to deny the sale.
[34] As Mr. Sobon is a joint owner of the property, he has a prima facie right to a sale. The onus then shifts to Ms. Aragon to establish prejudice if the home is sold, through evidence of malicious, vexatious, or oppressive conduct on behalf of Mr. Sobon. In my view, she has failed to do so. There is nothing malicious or oppressive about Mr. Sobon seeking the sale of the home, particularly when there is significant equity in the home.
[35] It is evident from the affidavits that there is, unfortunately, a great deal of animosity between the parties. Ms. Aragon’s claims of Mr. Sobon’s conduct and alleged financial irresponsibility during their relationship is not, however, a basis to deny the sale of the home.
[36] In my view, Mr. Sobon’s request to sell the house is reasonable. There is considerable equity in the home. Both parties can use the funds to purchase separate residences and/or pay debt. There would also be funds to pay any arrears of support which may have accrued.
[37] Based on a review of the jurisprudence set out above, there is no basis for Ms. Aragon to successfully resist the sale of the matrimonial home. She does not have a competing interest in the home under the Family Law Act. For example, there is no basis for a claim for exclusive possession. While she has advanced a constructive trust claim against Mr. Sobon’s one-half interest, that claim is ill-defined in her pleadings. She has led insufficient, if any, evidence to support her claim in that regard. A bald assertion on a motion that a constructive claim will be pursued at trial is insufficient to defeat the prima facie right of a joint tenant to seek the sale of a jointly-owned property. In any event, should such a claim be successful, funds could be held back upon the sale of the home to pay any such claim.
[38] It is not uncommon for a party to claim prejudice if it can be established that a claim to an equalization payment would be jeopardized when the home is sold. As the parties were not married, there is no such claim in this matter.
[39] Furthermore, this case is distinguishable from cases that have denied a request for the sale of a home where it is necessary to preserve the home for a vulnerable spouse or child. I have considered this factor in ordering the sale of the home. There is no evidence that Ms. Aragon or her son are vulnerable. Ms. Aragon disclosed no health issues. She works full-time. There is no need to preserve the home for her or her son.
[40] Another factor that I have considered in ordering the sale is that this case is also not one where a trial date has, or will be, scheduled in the near future. COVID-19 has resulted in a significant backlog of all cases in Ontario. In this region, the next date for a settlement conference is in the summer of 2022. As a settlement conference has not yet been scheduled, it is unlikely, therefore, that this matter will proceed to trial until some time in 2023.
[41] Ms. Aragon relies on Kaphalakos v. Dayal, 2016 ONSC 3559 (Div. Ct.) to support her position. In that case, the party resisting the sale of the home had been attacked in the home with a hammer and was critically injured. The party seeking the sale was charged with attempted murder. The court found that her physical and mental impairments supported a finding that bringing the motion was oppressive: at para. 33. Those facts are distinguishable, as there is no equivalent evidence that Ms. Aragon is in any way oppressed by this motion. While she may be inconvenienced, and there may be hardship as she will have to move and find a new residence, that is not equivalent to oppression. Mr. Sobon is not acting in bad faith in seeking the sale.
[42] In most situations where parties separate, there is a transitional period when financial necessity dictates that the home be sold and the parties move into new residences. It is to be expected that the party residing in the home will be dislocated from their home, which will be difficult – as it always is in these situations. This does not mean that the party seeking the sale is behaving in bad faith or that their conduct is vexatious or oppressive. In this case, Mr. Sobon has been patient. He did not bring this motion immediately when the parties separated. Ms. Aragon has had almost two years to organize her affairs and seek new accommodations for herself.
[43] Ms. Aragon’s position is that Mr. Sobon demonstrated bad faith as she claimed he refused to renew the mortgage after the parties separated. However, in her affidavit she also says the mortgage was renewed and is up for renewal again in early November 2021. This does not constitute any evidence of bad faith. Furthermore, Mr. Sobon’s failure to contribute towards the mortgage payment while Ms. Aragon lived in the home is not evidence of bad faith that would deprive a joint owner of the sale of the home. There will be an accounting that will consider mortgage payments made by Ms. Aragon, together with a possible claim for occupation rent by Mr. Sobon.
[44] Ms. Aragon raises non-payment of child support as a basis to prevent the sale. There is, however, conflicting evidence with respect to the parenting arrangements and whether there should in fact be a set-off amount calculated. This issue should be addressed at trial, together with Ms. Aragon’s claim for any arrears of support owing. Furthermore, given Mr. Sobon’s health and employment status, there is a current order staying the enforcement of child support. Accordingly, in my view and based on the evidence before this court, there is no basis to find that Mr. Sobon’s alleged non-payment of support rises to the level of bad faith that defeats his claim for the sale of the home.
[45] As funds will be held back from the sale, Ms. Aragon’s claim for arrears will not be prejudiced by the sale. If Ms. Aragon is successful at trial and establishes that there are arrears of support owing, she will be able to assert that those arrears be paid from Mr. Sobon’s share of the proceeds of sale held in trust.
[46] In addition, as funds will be held back, there will also be funds to pay any successful claim for damages made by one party against the other.
[47] If Ms. Aragon would like to purchase Mr. Sobon’s one-half interest in the property, it is not a competing interest or a compelling reason to resist the sale. Ms. Aragon can only purchase Mr. Sobon’s interest if he agrees to sell to her. There is no right of first refusal, meaning that Mr. Sobon can insist that the home be listed for sale. Ms. Aragon can make an offer for the property like any other third party once it is listed for sale to the public, assuming Mr. Sobon does not agree to sell his interest to her prior to the listing. I note that there is no evidence that Ms. Aragon has made any inquires to determine if she would individually qualify for mortgage financing to purchase Mr. Sobon’s interest.
b) Parenting and Child Support
[48] Mr. Sobon requests an order that the recommendations from the OCL assessor be implemented on an interim basis. I am not prepared to do so at this time. Those recommendations have not been tested at trial. I also note that there is conflicting evidence from the parties regarding the parenting arrangement. They have both made simply bald allegations about their son’s living arrangements, although the OCL report appears to support Mr. Sobon’s claims.
[49] I am not prepared to make any parenting order at this time as further evidence is required from both parties specifying the exact dates and times that their son lives with them. I also note that by the time this matter is scheduled for trial, their son will be 18 and thus no parenting order will be required.
[50] Their son’s living arrangements will have a bearing on a determination of the quantum of child support that one party might owe the other.
[51] Harris J.’s order for a stay of enforcement expires this month. Given the medical evidence from Mr. Sobon’s oncologist, I am prepared to continue that stay until December 1, 2021. If the parties cannot agree on their son’s living arrangements at that time, this matter can be returned to court. Both parties must file updated financial statements and confirmation of their 2020 and 2021 earnings to date. If Mr. Sobon is not working at that time, he must file updated medical evidence and evidence from his employer regarding the status of his employment.
Conclusion
[52] The matrimonial home located at 3 Gold Park Place in Brampton, Ontario shall be forthwith listed for sale. The parties may seek further court direction if they cannot agree on the terms of sale, such as listing agent and price. I am to hear any further motion related to the sale of the matrimonial home only.
[53] Upon the sale of the property, each party is to be paid the sum of $100,000 from the net proceeds of sale. The balance shall be held in trust pending agreement or further court order.
[54] Mr. Maurizio Vani, the lawyer currently holding proceeds from the 2018 mortgage refinancing, shall forward those funds to the lawyer retained for the sale of the home who is to hold the net proceeds of sale in trust. The 2018 refinancing funds shall also be held in trust with the net proceeds of sale of the home pending further agreement or court order.
[55] The stay of enforcement of child support as ordered by Harris J., dated May 31, 2021, shall continue until December 1, 2021. If the parties cannot agree on the parenting arrangement for their son or ongoing child support at that time, they may return the matter to court with further updated affidavit evidence, providing specifics of their son’s living arrangements together with updated financial statements and confirmation of their 2020 and 2021 incomes.
[56] If the parties cannot agree on costs for this motion, they must both file their costs outline and submissions, which shall be no more than two pages, and any relevant offers to settle, by November 1, 2021.
L. Shaw J.
Released: October 1, 2021
COURT FILE NO.: FS-19-146-00
DATE: 2021 10 01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARGARITA ARAGON
Applicant
– and –
TOMASZ JAN SOBON
Respondent
REASONS FOR JUDGMENT
L. Shaw J.
Released: October 1, 2021