Court File and Parties

Court File No.: FS-21-00026364-0000 Date: 2023-01-04 Superior Court of Justice - Ontario

Re: Angela Sparkman, Applicant And: Bradley Sparkman, Respondent

Before: L. Brownstone J.

Counsel: John Bruggeman, for the Applicant Eli Karp, for the Respondent

Heard: November 15, 2022

Endorsement

[1] The applicant wife seeks an order that the parties’ matrimonial home located at 3 Northbridge Trail, Caledon, ON L7K 1T6 (“the matrimonial home” or “the home”) be listed for sale on specific terms, and that the proceeds of sale be paid into court. The respondent husband opposes the motion.

Background

[2] The parties began living together in 2012 and were married in 2013. There is a dispute about the separation date; the wife claims separation occurred in 2019; the husband in 2018. There are no children of the marriage.

[3] The parties are engaged in extensive litigation. There are three proceedings outstanding. The family law application within which this motion is brought involves claims of equalization and support. The husband and a numbered Ontario corporation (of which the wife appears to be a shareholder) are plaintiffs in two other related claims. In one, they claim trust interests in a number of properties owned by the wife’s corporation (“the Properties”). In the other, they claim against professional advisors who provided advice in respect of transactions involving the Properties. The husband’s position is that it would be unfair to adjudicate the sale of the matrimonial home without also adjudicating the ownership interests in the Properties. He describes the dispute about the Properties, the parties’ business dealings, various claims to other assets and allegations of misdeeds in a lengthy affidavit. In her responding affidavit, the wife claims that these issues have been dealt with in part in the civil litigation. To the degree they have not been dealt with, they are still the subject of that litigation which, she says, is not moving forward at all.

[4] The parties own the matrimonial home, in which there is significant equity, as tenants in common. The husband currently lives in the matrimonial home and the wife indicates she has been denied access to it since November 2019.

Issues and Analysis

[5] The parties acknowledge that the court in a family law proceeding may grant an order for partition and sale under s. 2 of the Partition Act R.S.O. 1990 c. P. 4 when one owner seeks such an order unless:

a. an interim sale will prejudice a substantial right of one of the parties under the Family Law Act (Silva v. Silva, 1 O.R. (3d) 436, [1990] O.J. No. 2183 para. 23) or

b. the responding party demonstrates that the applicant’s conduct in seeking the order is malicious, vexatious or oppressive (Latcham v. Latcham, [2002] O.J. No 2126 para. 2)

[6] The husband claims that both exceptions apply; the wife disagrees. She acknowledges that the sale will cause inconvenience for the husband, but inconvenience does not equate to hardship or prejudice to a substantive right of the husband.

Issue one: Will an interim sale prejudice a substantive right of the husband under the Family Law Act?

[7] The net family property calculations in this case have not been concluded. The wife has been asking for the matrimonial home to be sold since September of 2019. She has received neither spousal support nor occupational rent from the husband who continues to occupy the home. Her evidence, which is uncontradicted in this regard, is that she has been excluded from the matrimonial home, that alarm codes have been changed, and that he once telephoned the police to keep her away from the home, falsely claiming he had a restraining order. She is concerned about a declining real estate market, but no evidence on that issue was adduced.

[8] As noted above, both parties claim that they expect to be owed an equalization claim at the conclusion of the family law litigation. The respondent claims based on Punit v. Punit, 2014 ONCA 252 and Kereluk v. Kereluk that the outstanding equalization issues are sufficient to bar the partition and sale of the matrimonial home.

[9] In Kereluk, the husband wished to purchase the matrimonial home as it was the “psychological home base” for the parties’ daughter, a concern the court took seriously (para. 21). In addition, should the husband have bought out the wife’s interest in the matrimonial home at that stage of the litigation, there was a real possibility that he would be overpaying his net family property share. Neither of those concerns applies here. First, there are no children involved. Second, the wife is seeking that the monies be paid into court until equalization is determined, such that the respondent’s right to financial payment, should it exist, cannot be prejudiced.

[10] Nor is Punit of assistance. There, the trial was scheduled to begin within weeks of the appeal, and the motions judge had failed to address whether a substantive Family Law Act right of the respondent would have been prejudiced by the sale.

[11] The husband’s net family property calculation is not complete. Therefore, the equalization process is not imminent. Further, where the opposition to the sale is based upon a desire to have funds available for payment of an eventual equalization claim, the courts have generally allowed the sale to proceed: Kamboh v Majeed, 2021 ONSC 892, para. 33.

[12] The husband further argued prejudice to his substantive right to seek a vesting order in the home if he is owed an equalization claim.

[13] The Court has a broad discretion to make vesting orders; the onus is on the person seeking a vesting order to establish that it is appropriate (Lynch v. Segal, 277 DLR (4th) 36 (ON CA), at para. 32). The payment liability, as well as the amount of the liability, must be established before a vesting order can be made. The vesting order may be made if it is necessary in order to ensure compliance with the payment obligation. (Lynch, at para. 32). This can be established if “the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour, indicate that the payment order will not likely be complied with in the absence of more intrusive provisions” (Lynch, at para. 32). There should also be a reasonable relationship between the amount of the asset sought to be vested and the amount of the liability (Lynch at para. 33). The respondent claims that the test at this stage is whether there is a genuine issue for trial in respect of the vesting order Walters v. Walters para. 14. The applicant points out that the genuine issue for trial should be confined to those in respect of the matrimonial home, not a vesting order, a constructive or resulting trust or other issues not pleaded.

[14] At this stage, the respondent has not claimed a vesting order in his pleadings. Nor has he pleaded a trust claim in respect of the matrimonial home. A vesting order in this case is too remote a possibility to be considered a substantive right of the kind that would inhibit the sale of a jointly owned matrimonial home as contemplated in Silva.

[15] In support of his claim that he has a substantive right to the matrimonial home, the husband also relied in argument on reasons of Myers, J. in a motion the husband brought seeking certificates of pending litigation on the Properties in the civil litigation. In his decision of July 18, 2021 denying the relief sought reported at Sparkman v 2574328 Ontario Ltd., 2021 ONSC 484 Myers, J. makes three mentions of the matrimonial home, in the following paragraphs:

[11] Mr. Sparkman does not approach the court with “clean hands”. His evidence was significantly misleading. His claim, at best, is compensable in money. Moreover, he currently has possession of the parties’ matrimonial home that is jointly owned. Ms. Sparkman’s equity in the house will more than offset any damages that Mr. Sparkman might be able to show from a loss of control of the timing of sale of the various investment properties. Moreover, while this action was not improper, it would have been more proper for Mr. Sparkman to bring divorce proceedings or family law proceedings where the parties’ full rights inter se can be assessed.

[31] 2574328 Ontario Ltd. sold one of the three investment properties after learning that Mr. Sparkman was bringing this proceeding. The proceeds are being held by counsel. Mr. Sparkman seeks an order holding up that fund under Rule 45.02 of the Rules of Civil Procedure. Mrs. Sparkman submits that she needs access to the money to bring family law proceedings and to live. Mr. Sparkman has the matrimonial home and is not paying voluntary support. She submits that Mr. Sparkman is trying to starve her of funds to limit her ability to bring family law proceedings and simply to punish her.

[43] In my view, the issues in this case sound best in money. The overriding issue is the division of the parties’ properties. This will include considering whether the butterfly transaction was proper or a sham perpetrated by Mr. Sparkman through his own accountants and Dentons Canada LLP. If Mr. Sparkman has been deprived of money or investment opportunities, he can readily prove his losses. He currently has exclusive possession of a valuable house that is jointly owned by Ms. Sparkman. He has lots of time to bring all of the monetary issues on both sides of the ledger to a family law court for just and equitable title determinations and equalization.

[16] I do not read the decision of Myers, J. as doing anything in respect of the matrimonial home other than describing the situation as it existed at the time of the motions before him. The decision of Myers, J did not create a right for the husband to continue to occupy the matrimonial home indefinitely. Given that the relief sought on this motion is for the proceeds of sale to be paid into court, the husband’s financial interests, should he be found to have them, will continue to be protected in accordance with the reasoning of Myers, J.

[17] Finally, I turn to two additional relevant factors as set out by Pazaratz, J. in Dhaliwal v. Dhaliwal, 2020 ONSC 3971 at paragraph 16:

m. Orders for sale of a matrimonial home at the interim stage should not be made as a matter of course. Fernandes v. Darrigo, 2018 ONSC 1039 (SCJ). The court must be mindful of the whole of the proceeding, and the need to achieve a final resolution for the family as fairly and expeditiously as possible. Kereluk v. Kereluk (SCJ).

n. Timing can be a relevant consideration in dealing with a motion for sale at a temporary stage. The availability of a trial within a short period might reduce the pressure for an immediate sale. Goldman v. Kudeyla, 2011 ONSC 2718 (SCJ).

[18] In this case, given the fact that there are three proceedings outstanding, and that none of them is moving forward with any alacrity, I find that in the context of the whole proceedings between the parties partition and sale of the matrimonial home is appropriate. As noted above, trial is far from imminent. In the words of Finlayson JA in Silva (para. 24) “I can think of no reason why the husband should hold the house hostage until his claim has been adjudicated. …I do not think that his concern about collecting a subsequent award, in the circumstances of the case, amounts to prejudice within the meaning of the case law.”

[19] I find the partition and sale will not interfere with any substantive right of the husband in the family law proceeding.

Issue two: Has the husband demonstrated that the order sought would be oppressive, malicious or vexatious?

[20] The husband also claims that the second exception applies. He claims it is vexatious and malicious to remove him from the matrimonial home when, for several years, this step was not undertaken. There will be no benefit to the applicant since the funds will remain in trust until further court order. He claims the motion is vexatious because there is no pecuniary benefit to either party if she succeeds.

[21] The vexatious conduct must relate to the issue of the sale of the matrimonial home; it is not whether there is vexatious conduct in general that is to be considered: Marchese v. Marchese, 2017 ONSC 6815, at para. 18, aff’d 2019 ONCA 116.

[22] The wife’s uncontradicted evidence is that she has been asking for the matrimonial home to be sold since 2019. It is not a new request.

[23] In my view, the fact that the funds will be paid into court until further order of the court in accordance with Rule 66.03 of the Rules of Civil Procedure does not render the bringing of this motion vexatious, oppressive or malicious. The husband states that there is no pecuniary gain for the wife; I would say there is no immediate pecuniary gain. Certainly, the sale of the property moves the parties closer to being able to conclude their dealings with one another. It allows a motion to be brought to disburse some of the funds if needed by the parties as is suggested in the wife’s materials. The wife is not interfering with an entitlement of the husband – he is not entitled to occupy their jointly owned property indefinitely, with no occupation rent being paid to the wife. Moving this matter forward can hardly be said to be vexatious, oppressive or malicious.

[24] Accordingly, the wife’s motion is allowed. I order:

1. The matrimonial home located at 3 Northbridge Trail, Caledon, ON L7K IT6 ("the property") shall be listed for sale forthwith, in accordance with the following terms of sale, pursuant to Section 2 of the Partition Act, R.S.O. 1990 c. P. 4: i. within 10 days of the date of this order, the Applicant shall provide the Respondent, Bradley Sparkman, with the names of 3 licensed real estate agents who are available to list and sell the property; ii. within 15 days of the date of this order, the Respondent shall select 1 of these 3 agents to list and sell the property, failing which the Applicant shall select such person and be authorized to sign the listing agreement for the sale; iii. the property shall be forthwith listed for sale at a price that the selected agent recommends, based upon his or her professional opinion and a review of comparable properties; iv. within 60 days of the date of this order, the Respondent shall provide the Applicant, with the names of 3 real estate lawyers who are available to jointly represent the parties in order to complete the transactions; v. within 70 days of the date of this order, the Applicant shall select 1 of these 3 lawyers to jointly represent the parties in order to complete the transaction; vi. the parties shall cooperate and sign any and all documents necessary to list and sell the properties and complete the transactions; vii. the Respondent shall vacate the property within 60 days of the date of this order and shall leave the property in broom swept condition; viii. the Respondent shall cooperate with the real estate agent and allow open houses, staging, showings and inspections by such person and/or prospective purchasers and shall maintain the property in a clean and presentable manner so as to maximize the sale price; and ix. from the proceeds of sale of the property, any and all outstanding property taxes and utilities, real estate commissions, legal fees, disbursements and HST necessary to complete the transaction shall be paid and the balance shall be held in trust pending further order or the written agreement of the parties.

[25] The parties are encouraged to agree upon costs. If they are unable to reach agreement, they may make brief written submissions to me (maximum three pages double-spaced) by email to my judicial assistant at linda.bunoza@ontario.ca. The Applicant may have 10 days from the release of this decision to provide her submissions, with a copy to the Respondent; the Respondent a further 10 days to respond. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

Brownstone J. Date: January 4, 2023