Court File and Parties
Court File No.: FS-20-00023029-0000 Date: 2022-08-08 Ontario Superior Court of Justice
Between:
Deborah Elizabeth Sokoloski Applicant
– and –
Chad Randolph Sokoloski Respondent
Counsel: Nicola Munro, for the Applicant James Carpino, for the Respondent
Heard: July 29, 2022
Decision on Motion
(Re: Sale of Matrimonial Home vs Exclusive Possession)
K.E. Cullin, J.
Summary of the Motion
[1] This matter appeared before me in motions court. The respondent is seeking an order pursuant to the Partition Act, R.S.O. 1990, c.P.4, directing the sale of the matrimonial home. The applicant has brought a cross-motion seeking an order for exclusive possession of the matrimonial home until July 1, 2026; she seeks this order pursuant to s. 24 of the Family Law Act, R.S.O. 1990, c.F.3.
Factual Background
[2] The parties were married on March 18, 2000, and separated in July 2019. They are the parents of four 4 children – three daughters, who are triplets, and one son. Their daughters are currently 13 years of age (soon to be 14) and their son is 10 years of age (soon to be 11). There appears to be no dispute that, save and except for the stress of the separation, the children are all in good health and have no special needs.
[3] The applicant, Deborah Sokoloski, is employed by the Town of Espanola and earns approximately $34,000.00 annually. The respondent, Chad Sokoloski, is self-employed through a corporation of which he is the sole owner and director; he provides sub-sea safety training to oil and gas companies overseas. His income varies; he earned approximately $150,000.00 in 2018, $39,000.00 in 2019, and $88,000.00 in 2020. He submits that his income has been impacted by the pandemic; his 2021 income was not available at the time of the motion.
[4] At the time of the separation, the parties resided in a home in Whitefish Falls, Ontario, which they owned jointly. It is a waterfront home and, according to an appraisal dated February 23, 2022, its value is estimated to be $1,250,000.00. The only charge on the property is a line of credit with a current balance of $19,000.00.
[5] The applicant commenced this proceeding on or about May 24, 2020; among other things, the application includes a request for exclusive possession of the matrimonial home and its contents. A case conference has been completed. On March 16, 2022, a settlement conference was adjourned by Justice Cornell on the basis that it was premature; he ordered that Questioning be completed by June 30, 2022, and that the respondent provide particulars from his business appraiser of the value of the cryptocurrency held by the respondent’s corporation.
[6] Questioning (of the respondent, at least) appears to have been conducted on June 20, 2022. An appraisal of the matrimonial home has been completed, and the respondent has obtained an estimated value of the shares of his corporation. There is no evidence before me regarding a rescheduled date for the settlement conference; given that the settlement conference has not been completed, it seems fair to conclude that there is no imminent trial date.
[7] On November 17, 2020, the parties consented to an interim, interim without prejudice Order which provided the following:
a. That the parties would have joint custody of the children. Primary residence of the children would be with the applicant, subject to access by the respondent;
b. That the parties would meaningfully consult regarding decision-making for the children, with the applicant having final decision-making authority in the event of a disagreement;
c. That the respondent would pay Guideline child support to the applicant in the amount of $979.00 per month, commencing December 1, 2020, based upon his 2019 income of $40,181.00;
d. That the applicant would have exclusive possession of the residence located on the matrimonial home property, while the respondent would have exclusive possession of the loft on the property. The respondent was not to attend the loft with any romantic partner; and,
e. That the respondent’s access to the children was to be reviewed upon him obtaining alternate living arrangements.
[8] It is the respondent’s evidence that he voluntarily increased his child support payments to $1,945.00 in January 2022, which is the Guideline amount based upon his Line 150 income of $82,526.00 in 2021. It is his further evidence that he pays support monthly by e-transfer directly to the applicant. It is the applicant’s evidence that she has not received child support consistently or in accordance with the respondent’s income since the separation, nor has she received spousal support. In spite of this assertion, a review of the file reveals:
a. No interim motion has been brought by the applicant for child support or spousal support, or to vary the existing Consent Order; and,
b. The Consent Order of November 17, 2020 has not been submitted to the Family Responsibility Office for enforcement.
[9] There is consensus that the parties’ current living arrangements are untenable. Although some of the incidents listed in the affidavits are dated, the applicant cites as an example the respondent entering the matrimonial home by using an axe to breach the front door, while the respondent cites the applicant changing the locks to the loft while he was working out of the country. The children appear to be caught in the middle of their parents’ conflict.
The Law
[10] Pursuant to s. 24(1)(b) of the Family Law Act, R.S.O. 1990, c.F.3, the court may, “direct that one spouse be given exclusive possession of the matrimonial home or part of it for the period that the court directs”. In determining whether to make an order for exclusive possession, the court is required to consider (s. 24(3)):
a. the best interests of the children affected by the order;
b. any existing orders under Part I of the Act, and any existing support orders or support obligations;
c. the financial position of the spouses;
d. any written agreement between the spouses;
e. the availability of other suitable and affordable accommodation; and,
f. any incidents of domestic violence involving the spouses or the children.
[11] In assessing the best interests of the children, the court is required to consider (s. 24(4)):
a. the possible disruptive effects of a move on the children; and,
b. the children’s views and preferences, if they can be determined.
[12] The existence of an interim Order for exclusive possession of the matrimonial home presents a triable issue which may weigh against its sale pending trial (Martin v. Martin, 1992 7402 (ON CA), para. 26; Brar v. Brar, 2020 ONSC 5637, para. 67). As noted by McGee J. in Goldman v. Kudeyla, 2011 ONSC 2718, a court faced with a request for a pre-trial sale must consider the proceeding’s various moving parts (at para. 20):
Issues arising from relationship breakdown are by their very nature inextricably intertwined. I agree with Justice Wright’s reasoning in Walters supra, confirmed in Kereluk, supra 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 effect the equal division of family assets and establish post separation parenting patterns.
[13] A party’s entitlement to an order for exclusive possession is a factor to be considered by the court on a motion for a pre-trial sale, however, it is not determinative. As noted by Wright J. in Walters v. Walters, 1992 8599 (ON SCDC) (at para. 15):
A claim for exclusive possession is a substantive property right. It is determined on the facts as they are shown to exist at the trial. Entitlement or non-entitlement to an order for exclusive possession at a time prior to trial is not determinative of the issue whether or not a sale should be ordered prior to trial. For example, the spouse moving for sale may have left the matrimonial home and taken the children to another community. The resisting spouse may be alone in the matrimonial home without any right to or need for exclusive possession before trial, but he or she may be claiming exclusive possession as an integral part of a claim for custody at trial.
[14] In this case, the respondent’s request for a pre-trial sale of the matrimonial home is made pursuant to the Partition Act, which provides at ss. 2-3:
2 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) 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.
[15] The test to be applied by the court in determining whether to direct the pre-trial sale of a matrimonial home was best summarized by McGee J. in Goldman, at paras. 17-19:
[17] 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 interests under the Family Law Act that would otherwise be defeated.
[18] 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.
[19] There have been a number of cases in which the court has denied an interim motion for sale prior to trial such as Arlow v. Arlow (1990) 1991 12940 (ON CA), 33 R.F.L. (3rd) 44 (OCA,) Walters v. Walters 1992 8599 (ON SCDC), 1992 CarswellOnt 811 and more recently, Kereluk v. Kereluk 2004 34595 Ontario S.C.J. In each case there were compelling circumstances in which one or both tests favoured the resisting party, such as the availability of trial within a short period, prejudice on the equalization payment, or the need to preserve the residence for a vulnerable spouse or child who might well retain the home in the cause.
[16] The impact of a sale on any dependent children residing in the matrimonial home is a consideration in determining whether a sale is appropriate. As is the case with other factors, however, it is not determinative. In Delongte v. Delongte, 2019 ONSC 6954, Shaw J., faced with an argument that the matrimonial home ought not to be sold because it would be disruptive to the children, noted the following at paras. 38-42:
[38] The applicant’s position is that the home should not be sold as it is the only home the children have known. The children have significant attachment to that house, it is close to their school and it provides them with a sense of stability. If that was a sufficient basis to resist the sale of a matrimonial home following separation, no matrimonial home would be sold in situations where a spouse wished to remain in the home with the children. In most cases, the children are attached to the home, it is close to their school and it provides a sense of stability. That is not, in and of itself, a sufficient basis to defeat a presumptive right to sell a jointly owned property, pursuant to the Partition and Sale Act.
[39] The applicant submits that selling the matrimonial home is extreme relief. I do not agree. An order for the sale of the matrimonial home is relief that is 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 other property or paying debt.
[40] Based on a review of the jurisprudence as set out above, there is no basis for the applicant to successfully resist the sale of the matrimonial home. Although she alleges that the children have been having difficulty with the separation and have attended counselling, that is an all-too-common occurrence in high conflict situations. The children are young teenagers and there was no independent evidence led as to how the sale of the home might have a detrimental impact on their well-being, other than what can be typically expected when parties separate and then reformulate a new family unit after separation. Separation is a very dramatic and life-changing event for all involved. It means moving on from the familiar – often including the matrimonial home – to the new and unfamiliar.
[41] In most situations where parties separate, there is a transitional period of time when financial necessity dictates that the home is sold and the parties must move into their own respective homes. It is to be expected that the children will be dislocated from their home, which will be difficult – as it always is in these situations.
[42] Based on a review of the evidence, there is no child-focused reason not to sell the home.
[17] Child-focused reasons to decline a request for sale and order exclusive possession include the need to provide security for child support payments (Ariyaratne v. Ariyaratne, 2012 ONSC 1487, para. 23; Duhnych v. Duhnych, 2004 11777 (ON SC), para. 65).
Analysis
[18] In support of her argument for interim exclusive possession of the matrimonial home, the applicant highlighted the existing interim interim Consent Order, dated November 17, 2020. The respondent disputed that this was an order, or that the court should place any weight on it in its deliberations.
[19] While a formal order appears not to have been issued and entered, in my view it is clear that the parties did, in fact, consent to an interim interim Order. The consent was drafted and signed by the respondent on the same day that a case conference was conducted; the applicant, for reasons which are unclear to me, appears not to have signed it until February 28, 2021. Once it was signed, however, it was binding and either party could have proceeded to have an order issued and entered on the terms set out in the consent.
[20] In my view, the question is not whether an order exists, but rather what weight is to be placed on it in my analysis. In the circumstances of this case, I find that very little weight ought to be placed upon it.
[21] The consent executed by the parties gave rise to an interim interim, without prejudice order. It was intended to be a stopgap while the parties navigated the legal proceedings. The consent contemplated that the respondent would eventually be obtaining alternate living accommodations, at which time his parenting schedule with the children would be reviewed.
[22] Under ideal circumstances, the status quo would remain in place until the legal proceedings were resolved, either with a settlement or at trial. Unfortunately, however, there is nothing ideal about the circumstances of the applicant and the respondent.
[23] It is clear that the applicant and the respondent are unable to peacefully co-exist on the property. Although the respondent appears to be frequently away for extended periods for his work, those absences do not appear to make the parties’ hearts grow fonder. Instead, the brief and infrequent encounters between the applicant and the respondent are fraught with conflicts which are conducted in full view of the children. It is not in anyone’s best interests that these interactions continue.
[24] The applicant cites the need to secure support payments as a rationale for remaining in the matrimonial home but has provided no corroborating evidence that the respondent has failed to fulfill his support obligations. To the contrary, there is a consent in place for the payment of child support which the respondent submits he has been voluntarily paying with monthly e-transfers, and which he voluntarily increased on its anniversary date in January 2022. If this were inaccurate, one would have expected the applicant to submit the underlying Order to the Family Responsibility Office for enforcement; there is no evidence that this has been done, nor is there an explanation to justify why it has not been done. This leads me to conclude that the respondent has, in fact, been voluntarily paying monthly child support.
[25] The applicant also cites her expectation that she will receive the matrimonial home as part of an equalization of the parties’ net family property. On the evidence before me, this appears highly unlikely. Based upon the appraisal of the matrimonial home and the estimated fair market value of the respondent’s corporate shares, it appears more likely that the applicant will owe a substantial equalization payment to the respondent if she intends to retain the matrimonial home. The applicant has not acknowledged or addressed this in her evidence, nor is there any evidence before me that she intends to obtain her own expert reports.
[26] In the alternative, the applicant cites that she should be permitted to remain in the matrimonial home with the children until the parties’ daughters graduate from high school in 4 years. She notes that she will no longer need the house once they graduate; this assumes, of course, that they will, in fact, graduate and leave home. She submits that, in the interim, it would be “hard” to move and relocate four children, and that she fears being “homeless” if the matrimonial home sells and there is no available replacement.
[27] Considering this proceeding in its totality, and in particular the pace at which the litigation has proceeded, it is my view that the applicant is well aware that she will be required to pay a substantial equalization to the respondent if she wishes to retain the matrimonial home, that she is well aware that she does not have the financial means to fund such an equalization, and that she is advancing the litigation at a glacial pace with the hope that she can remain in the home for as long as possible. This is the only reasonable explanation for her failure to pursue support more proactively, her failure to take steps to obtain her own valuations (or to seek an advance for this purpose), and her deferral of the three settlement conferences that have been initiated by the respondent since June 2021.
[28] On the evidence before me, it is clear that the matrimonial home is the parties’ largest asset and, until its status is addressed, this litigation will remain in limbo. Further, until the respondent has access to his equity in the matrimonial home, he will be unable to move forward with a purchase of his own residence, and he will continue to have limited parenting time with the children.
[29] On the evidence before me, I find that the applicant’s request for ongoing exclusive possession of the matrimonial home ought to be denied, and that the property ought to be listed for sale.
[30] In denying the applicant’s request for ongoing exclusive possession of the matrimonial home, I make the following specific findings:
a. The best interests of the children favour bringing an end to the toxic conflict being waged between their parents in their own backyard. This is not going to occur as long as the parties remain tethered together through the matrimonial home.
b. The best interests of the children also favour a normalized relationship with their father, away from the watchful gaze of their mother and outside of the shadow of her residence.
c. While there is an existing Consent Order, it was an interim interim, without prejudice Order which, in my view, contemplated that the parties were moving toward a resolution of their outstanding issues. It is clear on the evidence before me that this proceeding is not moving forward, and that it will not move forward until the disposition of the matrimonial home is finalized.
d. The applicant is not now, nor is she going to be, in a position to purchase the respondent’s interest in the matrimonial home. In her evidence, the applicant acknowledges that she will have no need for the house in four years when her daughters graduate from high school.
e. The applicant will receive substantial funds from the sale of the matrimonial home that will permit her to purchase suitable, affordable, and appropriate accommodations for herself and the children. She will not be rendered “homeless” by a sale.
f. Exclusive possession of the matrimonial home is not required to secure the respondent’s support obligations. Pending the final outcome of this proceeding, that concern can be addressed by retaining proceeds of sale in trust.
g. There is no compelling, corroborating evidence before me that the respondent has not been fulfilling his obligation to pay child support. If the applicant is of the view that he is underpaying support, she is at liberty to bring a motion to vary the existing Consent Order.
h. There is no evidence that the applicant and the children require exclusive possession in order to protect them from domestic violence.
[31] In granting the respondent’s request to list the matrimonial home for sale, I have made the following findings:
a. While the respondent has a prima facie right to request the sale of the matrimonial home, that right is subject to the applicant’s request for exclusive possession in her application; that request is a competing interest under the Family Law Act.
b. The applicant has not established a prima facie case that she would be entitled to exclusive possession under the Family Law Act upon the final disposition of this application. As such, the respondent’s right to a sale prevails.
c. There are no compelling circumstances which supersede the respondent’s right to pursue a sale. There is no imminent trial date. The applicant will not be prejudiced in her pursuit of an equalization payment or support, as a portion of the respondent’s net proceeds of sale will be held in trust pending the final outcome of the application. While the children are unlikely to be enthusiastic about moving, they have no special or exceptional needs which will be adversely impacted by a move, and their best interests will be served by prodding their parents toward a resolution of their conflict. If the children have any contrary views and preferences, those were not presented in the evidence before me.
Disposition and Orders
[32] For the reasons given, I hereby order as follows:
a. The applicant’s request for interim exclusive possession of the matrimonial home, municipally located at 1446 Bay of Islands Drive, Whitefish Falls, Ontario, is denied.
b. The interim interim Consent Order, dated November 17, 2020, granting the applicant exclusive possession of the residence and the respondent exclusive possession of the loft shall remain in force and effect pending the sale of the matrimonial home.
c. The matrimonial home municipally located at 1446 Bay of Islands Drive, Whitefish Falls, Ontario, shall be listed for sale within 15 calendar days of today’s date.
d. I shall remain seized of this matter for the purpose of resolving any issues that may arise regarding the sale only; any other motions or disputed issues may be addressed by the parties during the regular processes of the court. Any issues requiring direction from me regarding the sale will be addressed by appointment, to be scheduled through the Trial Co-ordinator.
e. The parties shall agree on a listing agent within seven 7 calendar days of today’s date. If they are unable to agree, then each side will provide the resumés of three real estate agents and I will choose one.
f. The parties shall agree on real estate counsel to conduct the sale transaction within 14 calendar days of today’s date. If the parties cannot agree, I may be spoken to.
g. The parties shall arrange to sell the house with a closing date of not less than 90 days from the date of any accepted offer.
h. The parties shall follow the reasonable advice of the listing agent on the price, as well as all other issues in relation to the listing agreement and the acceptance of offers to sell the property.
i. In the event that the real estate agent recommends repairs to the property, those repairs will be carried out forthwith, and will be paid using the line of credit registered against the property.
j. The applicant and the respondent shall provide reasonable access to the areas of the property over which they have exclusive possession and shall ensure that the property remains in appropriate condition for showing.
k. In providing vacant possession of the property on closing, the applicant and the respondent shall comply with all terms of the agreement of purchase and sale, and specifically the terms relating to the fixtures and chattels to remain in and on the property after its sale.
l. All costs associated with the sale of the property including the discharge of any encumbrances, shall be paid from the funds received on closing.
m. The applicant shall be entitled to an advance on equalization in the sum of the lesser of 45% of the net proceeds of the sale of the matrimonial home or $450,000.00.
n. The respondent shall be entitled to an advance on equalization in the sum of the lesser of 35% of the net proceeds of the sale of the matrimonial home or $350,000.00.
o. The remaining net sale proceeds obtained from the sale of the matrimonial home shall be held, in trust, in the trust account of the lawyer responsible for the sale of the property, subject to his or her consent, until further written agreement of the parties or court order.
p. If necessary, the applicant and the respondent are granted leave to, at their sole discretion, bring an urgent motion, on notice, pursuant to ss. 23 and 24 (and specifically s. 23(b)), and related provisions of the Family Law Act R.S.O. 1990, c. F.3, as amended, to sell the property without the consent of the other, as well as for exclusive or vacant possession of the same.
q. The costs of this motion are reserved to the trial judge or to any judge hearing a motion brought pursuant to ss. 23 or 24 of the Family Law Act, R.S.O. 1990, c.F.3 to compel a sale without the consent of the other party.
r. This matter is otherwise adjourned to the motions court scheduled on August 25, 2022, to address any outstanding request for relief in the applicant’s notice of motion.
K.E. Cullin, J.
Released: August 8, 2022