COURT FILE NO.: FC-20-00056237-0000
DATE: 2022-12-07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DANIEL KIRK HOWARD
B. Kelly, for the Applicant
Applicant
- and -
TEAHA ADELE HOWARD
G. Dewar, for the Respondent
Respondent
HEARD: November 23, 2022
The Honourable Justice Piccoli
ENDORSEMENT
AMENDED as underlined at paragraph 48
Observers: Phil Moser, Mary Cookman, AM Yantz from Mr. Kelly’s office.
- This matter came before me on November 23, 2022, on a regular motions day where motions must be dealt with in under one hour. It has been outstanding for 714 days. At the commencement of the motion, and in consultation with counsel, I set the matter for its next step, namely, a settlement conference on December 16, 2022, at 2:15p.m.
Confirmation Forms
This matter offers yet another example of the importance of counsel taking the time to complete confirmation forms accurately and thoroughly.
The Applicant’s confirmation form is dated November 18, 2022. The listed issues to be dealt with include: exclusive possession of the matrimonial home; an advance on equalization in the sum of $381,389.75; an order that the Applicant have decision-making responsibility once the report of the Children’s Lawyer is filed with the court; an order determining parenting time and all incidental matters thereto as between the parties once the OCL report has been filed with the court; and costs. The form confirms that the outstanding “contempt motion” is only “to be spoken to.”
The Applicant in his confirmation form asked the court to read:
a) His Amended Notice of Motion dated December 6, 2021 (which seeks 10 heads of relief),
b) His affidavit dated December 6, 2021 (87 pages),
c) His affidavit dated March 7, 2022 (108 pages),
d) His supplemental affidavit dated April 6, 2022 (2 pages),
e) The Respondent’s Notice of Motion dated November 22, 2021 (which seeks 6 heads of relief plus 8 terms in relation to the sale of the matrimonial home),
f) Her affidavit dated November 22, 2021 (188 pages),
g) Her affidavit dated January 21, 2022 (45 pages).
The Applicant also sets out the material I am asked to read in relation to the contempt motion that is to be spoken to which includes: his Notice of Motion for Contempt, his affidavit in support dated June 21, 2022 (135 pages), and the Order of Justice Breithaupt Smith dated August 19, 2021.
This totals 565 pages for a one-hour motion (not including the lengthy OCL report) and some 16 heads of relief.
The Respondent, in her confirmation form dated November 18, 2022, seeks relief related to the sale of the Shadow Cruiser Trailer, the sale of the matrimonial home located at 39 Deer Creek Street, Kitchener, Ontario, terms in relation to that sale, and an order that the Respondent's half share of the proceeds of the sale of the cottage be immediately released to her and the remainder remain in trust.
In addition to those documents the Applicant has asked the court to read, the Respondent adds:
a) Her affidavit dated December 6, 2021
b) Her 35.1 and 35.1 A affidavit dated November 18, 2022,
c) Her factum,
d) The report of the Children’s Lawyer.
At the start of the motion, I advised counsel that the volume of material before the court and the numerous heads of relief being requested clearly made this matter a long motion. I drew their attention to the amended Notice to the Profession dated April 19, 2022.
The parties then advised that the court was only being asked to decide the Respondent’s request for partition and sale of the matrimonial home (and the terms in reference to the same), and the Applicant’s request for exclusive possession of the matrimonial home in exchange for which he would pay the Respondent her notional equity on a without prejudice basis in the sum of $381,387.75. It is hard to understand why the confirmation forms were completed in the manner they were and sent to the court. This shows a complete disregard for court resources. Confirmations should direct the court to what is necessary to be read for the issues on the motion and should not comprise a laundry list.
Both parties seek their costs. They agreed that the successful party would be entitled to $7,500.00 in costs.
But for the fact that the motions had been outstanding for approximately one year, I would have adjourned the motions.
The Applicant will be hereinafter referred to as the father and the Respondent will hereinafter be referred to as the mother.
Brief Background
The parties were married on October 3, 2014. They separated on July 23, 2020. They have two children: Ruby Adele Howard, born September 14, 2015, and Stella Rae Howard, born September 29, 2017 (collectively “the children”).
The matrimonial home is jointly owned and is located at the municipal address of 39 Deer Creek Street, Kitchener, Ontario N2A 0E7 (“matrimonial home”).
The children live with the mother in the matrimonial home. The father moved out of the matrimonial home in July 2020.
From the date of separation until early July 2021, the children resided primarily with the mother. They were in their father’s care on alternate weekends from Friday evening to Sunday evening and one weekday overnight. Commencing in October 2021, the father’s parenting time was supervised by Brayden Supervision.
Since August 2022, the father’s care of the children has no longer been supervised. The father’s parenting time gradually expanded such that, currently, he has the children in his care alternate weekends from Thursday after school until Monday morning.
Position of the Parties
The mother seeks partition and sale of the matrimonial home; a home in which she lives with the children. She asserts that the home has been the source of extreme conflict and that it must be sold. She relies on her affidavits of November 22, 2021, and January 21, 2022, as well as her Form 35.1 and 35.1 A affidavits dated November 16, 2022, in support of this motion.
The father seeks exclusive possession of the matrimonial home. He proposes to pay the mother, on a without prejudice basis, the sum of $381,387.75 which, he states, represents her 50% equity in the home. He acknowledges that the court has no jurisdiction to transfer the home to him, and he asserts that this is a creative way for the mother to receive her equity and allow him exclusive possession because, he states, the children do not want to leave the matrimonial home. The father relies on his Notice of Motion dated December 6, 2021, and his affidavits dated December 6, 2021, March 7, 2022, and April 6, 2022. He is not asking for any change to the parenting regime. He vehemently opposes the court’s reliance on the mother’s 35.1 and 35.1A affidavit; it is his position that she is trying to get evidence in through the “back door” that pertains to alleged family violence.
The parties agree that the $204,357.96 proceeds of the sale of the cottage are in Mr. Kelly’s trust account. The mother seeks that she be paid fifty percent of the proceeds of the sale of the cottage and the remainder be left in trust. The father asks that the proceeds of sale of the cottage be distributed equally. Given the amount of time taken at the beginning of the motion attempting to determine what issues the court was being asked to decide and what materials it was being asked to read, this issue was not argued. Hopefully it can be resolved at the upcoming settlement conference and, if not, the settlement conference judge may give directions regarding argument of the same.
For the reasons that follow, I order the home sold forthwith. In addition, I order that the mother receive 50% of the net proceeds of the sale of the matrimonial home and that the remainder be held in trust pending further court order or agreement.
Following argument of the motion, the parties advised they could likely agree on the terms of sale. On November 29, 2022, the court was advised that one term remained in dispute. I received written submission in respect of that term and have addressed the issue in this endorsement and in my order.
The Law Regarding Exclusive Possession of a Matrimonial Home and Application to the Facts
The criteria for determining exclusive possession of the matrimonial home are found in section 24(3) of the Family Law Act.
The children reside primarily with their mother.
There is no existing order for property or support. The father is in a better financial position than the mother. He has already secured alternate accommodation.
Both parties assert that the other has committed family violence against them. On conflicting affidavit material, it is not possible to make a finding at this stage.
There is no written agreement between the parties.
The father’s request in his notice of motion that he pay the mother for the amount that he has calculated that he owes her for 50% of the net value of the home does not support his position for exclusive possession. It does, however, support the mother’s position that she should receive 50% of the proceeds of sale of the home
There is no basis for the father to have exclusive possession of the matrimonial home. His claim for exclusive possession is dismissed.
The Law Regarding Sale of a Jointly Owned Property
Section 10 of the Family Law Act and section 2 of the Partition Act, R.S.O. 1990, c.P.4, give this court the jurisdiction to order the partition and sale of jointly owned property.
As articulated by the Ontario Court of Appeal in Davis v. Davis, 1953 148 (ON CA), [1954] O.R. 23, 1953 CarswellOnt 106 (C.A.), I accept that:
There continues to be a prima facie right of a joint tenant to partition or sale of lands. There is a corresponding obligation on a joint tenant to permit partition or sale, and finally the Court should compel such partition or sale if no sufficient reason appears why such an order should not be made.
In Afolabi v. Fala, 2014 ONSC, 1713, [2014] O.J. No. 2429 (S.C.J.), Mr. Justice Emery confirmed that the onus rests on the party opposing the request for partition and sale to establish evidence of “sufficient reasons” to require the court to exercise its discretion to refuse the remedy offered by section 2 of the Partition Act.
The Ontario Court of Appeal, in Latcham v. Latcham, 2002 44960 (ON CA), [2002] O.J. No. 2126, (2002) 27 R.F.L. (5th) 358 (C.A.), stipulated that the “proper standard for the exercise of judicial discretion to refuse partition under section 2 of the Partition Act required evidence of malicious, vexatious or oppressive conduct.”
In Dhaliwal v. Dhaliwal, 2020 ONSC 3971 (S.C.J.), at para. 16, Justice Pazaratz provided a restatement of the legal principles governing a motion for the sale of real property in the context of a family law case:
a) The Partition Act provides a prima facie right to an order for partition and sale.
b) A court is required to make such an order unless there is demonstrated reason not to do so.
c) The onus is on the party opposing the sale to establish that there is sufficient reason to refuse a sale.
d) The party opposing the sale must, generally, show malicious, vexatious, or oppressive conduct.
e) Meaningful disputes related to the property should be resolved before a sale order is made.
f) A sale should not be ordered if there is a legitimate family law basis or where a family law claim would be unfairly prejudiced.
g) The court should consider the prejudice to both parties and a sale should be ordered where a sale would likely be inevitable at trial. This is especially the case where a trial is not imminent.
h) A sale should be ordered where current carrying costs are unsustainable.
i) The court should consider the impact of a proposed sale on vulnerable parties, including, children (with consideration given to academic progress or other evidence impacting a child’s wellbeing).
j) The potential for unhappiness or dissatisfaction experienced by a party or by children is not enough to prevent a sale.
Application of Law to the Facts
In his originating pleading, the father asked that the matrimonial home be sold. He now seeks to delay the sale. The mother, who is the primary caregiver to the children and who lives in the matrimonial home, is the party seeking the sale.
I have seen no evidence of malicious, vexatious, or oppressive conduct on the part of the mother. There is no prejudice to the father in the court making an order for partition and sale. It is inevitable that the home will be sold, and the mother is entitled to have the home sold on the open market. There is no specific evidence of any particular vulnerabilities of the children before the court or that the children’s best interests or well-being will be affected. There is no evidence that this home is in anyway crucial to the children’s best interests; nor is there a robust record of possible harm to children if the home is sold: Petit v. Petit, 2016 ONSC 849 (S.C.J.)
The carrying costs of the home are beyond the mother’s means. At the time she filed her November 22, 2021 affidavit, the father was paying $3,200 into a joint account for support and his contribution towards joint expenses. In submissions, but not in evidence, the mother asserts that the father has not paid any support or the carrying costs since March 2022. She has been going into debt to make the mortgage payments. The father submits that, although not in evidence, he made an offer for payment of funds to the mother which was conditional on the signing of some form of separation agreement. The mother having to pay the carrying costs of the home is prejudicial: Chateauvert v. Chateauvert, 2019 ONSC 81 (S.C.J.).
There is no meaningful dispute in reference to this property nor is there a genuine family law claim that would be unfairly prejudiced by the sale of the home. Given the facts of this matter since separation, it is unlikely the father would be granted permanent exclusive possession at trial. The sale has been significantly delayed thus far.
In all of the circumstances, it is a foregone conclusion that the home will be sold.
Based on the evidence before me, I find that the father has not met the burden to be successful in resisting an order for sale of the home at this time. Based on these facts, I find that the mother would be prejudiced by any further delay in the sale of the home. As such, I exercise my discretion to order partition and sale of the matrimonial home.
The Law Regarding the Disbursement of Funds and Application to the Facts
A party cannot assume he or she will receive 50% of the net proceeds of sale of a jointly owned home: Monk v. Lamb, [2012] O.J. No. 617, 2012 CarswellOnt 1528. However, when a party jointly owns a property, they are prima facie entitled to 50% of the net proceeds of sale. If a party resists the release of funds under s.12 of the FLA, the party resisting the release of funds, has the onus of showing why the funds should be preserved: Godfrey v. Godfrey, 2019 ONSC 3093 (S.C.J.) at para. 15; Afshar v. Mahmoodi, 2016 ONSC 2875 at para. 31 (S.C.J.); Creasey v. Chretien, 2009 CarswellOnt 1997 (S.C.J.) at para. 56.
Although the Applicant does not consent, he does not take issue with the net family property statement provided by the mother in her affidavit which shows the father will owe her an equalization payment of almost $835,000 – very significantly more than 50% of the equity in the home. There are no circumstances (on the evidence before the Court) under which the mother will owe the father an equalization payment.
In his affidavit dated December 6, 2021, the father states, “I am fully prepared to advance to the Respondent one-half of the approximate equity in the home pending trial and on a without prejudice basis as to the final quantum, exclusive possession or sale via the Partition Act.” He calculates the mother approximate equity to be $381,389.75.
The mother also asserts there is a significant retroactive and prospective spousal and child support payment owing to her. It does not appear there is an order for child or spousal support in place. She is asking for 50% of the proceeds of sale.
I find that, on the evidence before me, the mother has met her onus of showing the court why the father’s share of the proceeds of sale of the matrimonial home should be preserved. I find that, in the circumstances, it would be appropriate for the mother to receive 50% of the net proceeds of sale of the matrimonial home and that the father’s 50% be held in trust pending written agreement between the parties or a court order.
Terms of Sale
- At the end of argument of the motion, and given that time had run out, the parties had made submissions on the terms of sale of the matrimonial home. They believed they could agree on the terms. I directed them to forward me the terms they agreed to and to highlight any terms they did not agree to and to provide their reasoning. On November 29, 2022, I received an email as to the one term they could not agree to, namely, whether the underlined words should form part of this paragraph:
No reasonable third party offer for the purchase of the home, to be assessed in consultation and consideration of the recommendations of their realtors, shall be refused by the parties. Unless otherwise agreed upon between the parties through counsel, the parties shall otherwise accept the first third party offer for the purchase of the home which meets or exceeds the listing price set for the home.
On November 30, 2022, I directed the parties to file written submissions on the one term not agreed to by the close of business on December 2, 2022. I further ordered that they provide caselaw and the legislation they were relying upon. I did not receive any caselaw from the father. He only referenced the Partition Act which does not address the issue raised. I received caselaw from the mother.
For the reasons that follow, I remove the words “third party” from this term.
In Dhaliwal, Justice Pazaratz reiterated that the court cannot compel one joint tenant to sell to the other. Nor can it give one joint tenant a right of first refusal: Martin v. Martin, 1992 CarswellOnt 226 (Ont. C.A.), 1992 7402. This does not mean that an owner wishing to keep a property cannot bid in the marketplace: Akman v. Burshtein [2009] O.J. No. 1499, 2009 CarswellOnt 1941, at para. 40. As stated by the Ontario Court of Appeal in Barry v. Barry, 2020 ONCA 321, at para 9: “if the respondent seeks to purchase the matrimonial home, he must compete with any other interested purchaser.”
However, I want to make it very clear that, while the father is entitled to compete with other interested purchases for the home, he must do so without any “inside information” as to other offers that have been made. He must participate in the process as would any other third party bidder, submitting to all of the formalities of same. The father cannot wait to see other offers and then offer to beat them marginally. That would distort the market: Murchison v. Sheriff, 2011 CarswellOnt 11501 (S.C.J.) The home should be sold to whoever makes the highest offer in a fair process.
The mother cannot be compelled to accept anything but cash for the house purchase as would be the case with any other non-arm’s length purchaser. Nor can the father look for what is essentially a right of first refusal. Nor can he look to be a “commission-free” or “commission-reduced” purchaser in the Listing Agreement.
I have amended the paragraph to remove the language in regard to accepting the first offer that meets or exceeds the listing price as I see that language as inviting conflict on the issue of the listing price itself.
As the Applicant was successful on this one issue, I have reduced the costs owing by the Applicant to the Respondent by $500 to $7,000.
Orders Made:
- Pursuant to the Partition Act, R.S.O. 1990, c. P.4, the parties’ matrimonial home, located at the municipal address of 39 Deer Creek Street, Kitchener, Ontario, N3E 0C3, shall be listed for sale within 14 days on the following terms, which are all on consent save and except term (h):
a) The home shall be listed through a split listing, with realtor Kate Broddick of the Kate Broddick Team to be retained by the Respondent, and Greg Bullock to be retained by the Applicant, or, in the alternative, the parties shall retain such other OREA licensed relator(s) as may be selected by the parties. The parties shall each retain their realtor within 7 days of the signing of this Order.
b) The parties will fully cooperate in all respects with their realtors in regard to the listing and sale of the home and shall sign all required listing documents which are necessary for the listing for sale of the home by their realtors, including but not necessarily limited to: Listing Agreement(s), Seller’s Direction re: Property/Offers, working with a Realtor OREA Form 810, and any other documents which are required by their realtors.
c) Subject to further written agreement between the parties, to be secured through counsel, acting reasonably, the home shall be listed in its current “as is” condition.
d) The home shall be listed for sale at a list price to be agreed upon between the parties through their solicitors, acting reasonably, in consultation with and in consideration of the recommendations of their realtors.
e) The parties shall cooperate in facilitating any pre-listing and ongoing marketing strategy/campaign for the listing of the home as may be recommended by their relators, including but not necessarily limited to: the home shall be listed on the Multiple Listing Service (MLS) as requested by their realtors, a “For Sale” sign shall be placed on the property as requested by their realtors, they shall provide any photographers with access to the home as requested by their realtors, and the home shall be staged in such manner as may be requested by their realtors. The parties shall execute any and all documentation required for the home’s listing on MLS.
f) The parties shall facilitate such access to the property and home as may be requested/required by their realtors and/or potential purchasers and their realtors, including for appointments via a key lockbox if requested and for open houses as shall be scheduled with their realtors. The Respondent and the children shall vacate the property for any showings or open houses which may be scheduled by their realtors.
g) In consultation with and in consideration of the recommendations of their realtors, the parties may set a date for the acceptance of offers, with the timeline to be agreed upon between the parties through counsel.
h) No reasonable offer for the purchase of the home, to be assessed in consultation and consideration of the recommendations of their realtors, shall be refused by the parties.
i) The parties shall secure a joint, or individual, real estate solicitor(s) for the purposes of effecting the closing of the sale of the home. The parties shall execute all required documentation as requested by their real estate solicitor(s) to ensure the closing of the sale of the home as agreed upon with the purchasers.
Upon the closing of the sale of the home, and after the payment of all liens and encumbrances registered against the home, and/or other payments from the proceeds of sale which may be required at closing, such as property tax owing for the home, and any other holdbacks which are required from the proceeds of sale, 50% of the net proceeds of sale shall be paid to the Respondent Mother. The remainder of the net proceeds of sale shall be held in trust by the real estate lawyer pending further agreement or court order.
A settlement conference date is set for December 16, 2022, at 2:15p.m.
The Applicant shall pay to the Respondent the sum of $7,000.00 in costs within 30 days.
The other issues (proceeds of the sale of the cottage, sale of the trailer, and the contempt motion scheduling) are adjourned to be spoken to only at the settlement conference.
Justice Piccoli
Released: December 7, 2022
COURT FILE NO.: FC-20-00056237-0000
DATE: 2022-12-07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DANIEL KIRK HOWARD
Applicant
and –
TEAHA ADELE HOWARD
Respondent
ENDORSEMENT
Released: December 7, 2022