Superior Court of Justice - Ontario

COURT FILE NO.: FS-20-126

DATE: 2022-08-17

RE: SANJAI “SANJAY” MALAVIYA Applicant

AND:

ANU DHIR Respondent

BEFORE: Justice J. Stribopoulos

COUNSEL: Mr. D. Gelgoot & Ms. V. Amyot, for the Applicant Ms. H. Hansen & Ms. M. Edwards, for the Respondent

HEARD: August 16, 2022, by Zoom Videoconference

ENDORSEMENT

[1] This is the court’s endorsement concerning a motion to compel the sale of a home brought by Mr. Malaviya, the Applicant, in the context of ongoing family litigation. Ms. Dhir, the Respondent, opposes the motion.

[2] The parties, who never married, cohabitated for approximately 18 years, and separated sometime in 2020. They have two children, now 14 and 5 years of age.

[3] To their credit, the parties have reached interim agreements concerning parenting time, spousal and child support. At this point, the principal issue between them in the litigation appears to be whether Ms. Dhir is entitled to equitable relief for contributions she claims to have made to Mr. Malaviya’s business interests.

[4] The resolution of that claim will likely turn on the validity of the cohabitation agreement the parties entered in December 2005. Ms. Dhir advances various claims in seeking to set aside that agreement, including that it was executed without the benefit of full financial disclosure by Mr. Malaviya and while Ms. Dhir was under duress occasioned by his abusive and controlling behaviour.

[5] Mr. Malaviya denies these allegations. He has brought a motion for summary judgment to dismiss Ms. Dhir’s equitable claims and enforce the cohabitation agreement, which is scheduled to be heard on October 3, 2022.

[6] Quite obviously, on this motion, I cannot adjudicate the competing claims between the parties concerning the validity of the cohabitation agreement. That will be for another judge to decide at a future date.

[7] At the time of separation, the parties, along with their children, were living at 1470 Watersedge Road, Mississauga (“the property”). Mr. Malaviya purchased the property in August 2007 and holds title to it alone. However, Ms. Dhir maintains that he purchased the property with money she provided. Mr. Malaviya appears to concede as much; given that he acknowledges that Ms. Dhir enjoys an equitable equal interest in the property.

[8] Although the parties continued cohabitating at the property after separation, Mr. Malaviya eventually moved out. Since then, Ms. Dhir has purchased a home in Toronto, where the children attend school. After that, Mr. Malaviya also purchased a home in Toronto to facilitate his parenting time. Under an interim agreement, the residence of the children is essentially shared between the parties.

[9] Ms. Dhir opposes the sale of the property. She notes that the property has been the children’s home since birth, and that they have friends and family in the neighbourhood. Ms. Dhir and the children spend weekends at the property and return to their residence in Toronto for the school week. In these circumstances, Ms. Dhir submits that the sale of the home would be contrary to the children’s best interests.

[10] Ms. Dhir further submits that Mr. Malaviya has no present need for the proceeds from the sale of the property. Given this, she submits that his interest in selling it now reflects a continuation of the same controlling and abusive behaviour he subjected her to throughout their relationship.

[11] Finally, Ms. Dhir maintains that the court should not order the sale of the property because if she succeeds in her equitable claims, she would be able to purchase it from Mr. Malaviya, something she cannot presently afford to do.

[12] Mr. Malaviya responds that he wants to sell the property because Ms. Dhir’s equitable claims are meritless, and their cohabitation agreement contemplates its sale.

[13] Mr. Malaviya notes that he alone has been paying the carrying costs for the property, which total $5,630 per month. While Ms. Dhir opposes the sale, she refuses to make any contribution towards the carrying costs unless Mr. Malaviya agrees to increase the quantum of interim support that he pays her at present. (Mr. Malaviya is currently paying Ms. Dhir $50,000 per month in spousal support and $25,000 per month in child support.)

[14] Finally, Mr. Malaviya denies that the sale of the property would adversely impact the children, noting that the children attend school in Toronto, where each of the parties now own well-appointed homes.

[15] Generally, the court’s discretion to decline to order the partition or sale of a jointly owned property under s. 2 of the Partition Act is relatively narrow. That is because an owner has a prima facie right to sell a jointly owned property. As a result, the court must ordinarily order the sale unless the moving party has behaved maliciously, oppressively or with a vexatious intent towards the responding party: Latcham v. Latcham, 2002 44960 (ON CA), [2002] O.J. No. 2126, 27 R.F.L (5th) 358 (C.A.), at para. 2.

[1] The court’s authority to decline to order a sale is more expansive in family cases, given the potentially competing interests that co-owners might have under the Family Law Act, R.S.O., 1990, c. F.3, and the risk that those interests could be prejudiced by the sale: see Silva v. Silva (1990), 1990 6718 (ON CA), 1 O.R. (3d) 436 (C.A.); Goldman v. Kudeyla, 2011 ONSC 2718, at para. 17; Parent v. Laroche, 2020 ONSC 703, at para. 11. As Justice McGee explained in Goldman, at paras. 18-19:

[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] As the quoted passage from Goldman suggests, the cases have come to recognize the best interests of the children as an important consideration in deciding whether to grant a motion to compel the sale of a family home: Dhaliwal v. Dhaliwal, 2020 ONSC 3971, at para. 16q; R.L. v. M.F., 2022 ONSC 1677, at paras. 31-32; Kaing v. Shaw, 2017 ONSC 3050, para. 34.

[17] Considering the evidence, the governing principles, and the able submissions of counsel for both parties, I am satisfied that, in all the circumstances, the court should order the property sold. I have come to this conclusion for several reasons.

[18] First, at present, the property is not the principal residence of either party. Ms. Dhir and the children only use it on weekends during the school year. Nevertheless, Mr. Malaviya is incurring significant carrying costs for the property each month. In these circumstances, with Ms. Dhir refusing to contribute towards the carrying costs unless there is an increase in the $75,000 that she receives in interim monthly support, I am hard pressed to accept Mr. Malaviya’s desire to sell at this point has some malevolent motivation. Although Mr. Malaviya appears to be extraordinarily wealthy, not wanting to spend nearly $6,000 a month on a home he does not use, and which Ms. Dhir and the children only appear to use on weekends during the school year, seems to me to be an entirely justifiable position for him to take.

[19] Second, although I accept that the children have friends and family in the neighbourhood where the property is located, I am far from convinced that having continued access to the property is essential to maintaining those relationships. There is no apparent reason why Ms. Dhir could not travel with the children on weekends to visit family and friends in Mississauga. Ms. Dhir has failed to marshal evidence capable of reasonably supporting a finding that the sale of the property would negatively impact the children. That is not surprising, after all, the children have the benefit of very comfortable homes whenever they are with either Mr. Malaviya or Ms. Dhir at their respective residences in Toronto.

[20] Third, unlike most of the decided cases, where selling a property would involve uprooting children from the family home, this is not such a case for the reasons just explained. That is an important distinguishing feature between the circumstances in this case, and in those cases relied on by Ms. Dhir, where the best interests of children have led courts to decline to order a property sold. For example, in Kaing, in refusing to order a sale, Justice Shaw noted, at para. 34, that: “The sale of the family home will deprive the children of a place to live at a time when Ms. Kaing has no means to obtain reasonable alternative accommodation.” Thankfully, for these parties and their children, the circumstances could not be more different.

[21] Ultimately, the main thrust of Ms. Dhir’s argument is that she wants to purchase Mr. Malaviya’s interest in the property so that she can retain it and that she will only have the resources to do that if her equitable claims in the litigation prove successful. Ms. Dhir submits that if the court orders the sale, at this point, it will effectively guarantee Mr. Malaviya’s purchase of the property, something he has made no secret he desires. That is because unless and until she is successful in her equitable claims at trial, she could not possibly match any offer that he might make. Ms. Dhir submits that this will occasion prejudice that justifies this court declining to order the property sold.

[22] In making that argument, Ms. Dhir points out that she enjoys the first right between them to purchase the property under the cohabitation agreement. She argues that if the court orders a sale, it will deny her the opportunity of exercising that contractual right because Mr. Malaviya is far wealthier and will invariably be able to outbid her. I have a few difficulties with this submission

[23] First, the unfairness claimed by Ms. Dhir is prefaced on adhering to the terms of the cohabitation agreement, which, at the same, she attacks as invalid.

[24] Second, Mr. Malaviya has already offered to sell his interest in the property to Ms. Dhir for half of its appraised value, an offer she declined. Ms. Dhir had the opportunity to buy the property, but she chose to purchase another almost equally valued home in Toronto instead.

[25] Finally, and most importantly, in my view, one party’s desire to await the outcome of the litigation so that they might have the resources necessary to purchase a home that the other party wishes sold would not seem to qualify as the type of “prejudice” that would justify the court exercising its discretion to fetter a co-owner’s right to sell: see Pagnanelli v. Pagnanelli, [2002] O.J. No 2705 (S.C.), at paras. 6, 14; R.L. v. M.F., 2022 ONSC 1677, at para. 23 (citing Pagnanelli with approval).

[26] For all these reasons, the court grants the Applicant’s motion to sell the property.

[27] Mr. Malaviya seeks an equal distribution of the sale proceeds as between the parties, as contemplated by the cohabitation agreement. In contrast, Ms. Dhir, if the court were to order the sale of the property, pleaded that the proceeds be held in trust with the lawyer who handles the transaction pending the outcome of the application. However, under Rule 66.03 of the Rules of Civil Procedure, unless the parties agree otherwise, the court must order the proceeds paid into court.

[28] Accordingly, the following Order shall issue:

1. The property located at 1470 Watersedge Road, Mississauga, Ontario (“the property”), shall be sold, on the following terms:

a. The property will be listed for sale by no later than September 15, 2022, with Christopher Invidiata as the listing agent.

b. The parties will follow all recommendations of the listing agent with respect to any repairs and/or staging needed to prepare the property for sale. The cost of the repairs and/or staging will be shared equally by the parties.

c. Once listed, the property will be maintained in a suitable condition for showings, and the parties will accommodate all reasonable requests for showings.

d. The parties will accept the best offer to purchase the property, in consultation with the listing agent, which may include a bid by either party.

e. In the event of a dispute as to whether an offer to purchase should be accepted, either party may bring a motion on an urgent basis.

2. The net proceeds from the sale of the property shall be deposited into court on account of the application and shall not be distributed without either a further court order or the consent of both parties.

[29] Before the court issued its decision on the motion, the parties agreed on the costs for the motion that should be awarded to the successful party. Given that agreement, Ms. Dhir shall forthwith pay Mr. Malaviya his costs for the motion, fixed in the amount of $12,500, inclusive of HST and disbursements.

“J. Stribopoulos J.”

Date: August 17, 2022