Court File and Parties

COURT FILE NO.: CV-93-00004779-00ES DATE: 20230823

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

PAMELA PAL Moving Party – and – FAYTHE R. PAL Responding Party

COUNSEL: Richard J. Worsfold, for the Moving Party Faythe R. Pal, Self-Represented

HEARD: June 13, 2023

Reasons for Decision

DIETRICH J.

[1] Pamela Pal (the “Moving Party”) and her daughter Faythe Pal (the “Responding Party”) own a residential property at 46 Glenarden Road, in the City of Toronto (the “Property”). They inherited the Property from the late Erwin Greenspoon, who was the Moving Party’s father and the Responding Party’s grandfather.

[2] The Moving Party and the Responding Party are tenants in common. The Moving Party owns an 80-per cent interest, and the Responding Party owns a 20-per cent interest in the Property.

[3] The Responding Party resides in the Property, where she operates an online retail business. The Moving Party, who is currently residing with her sister and brother-in-law, would like to sell the Property so she can buy herself a condominium and live independently. The Responding Party is strongly opposed to a sale.

[4] The Moving Party seeks an order pursuant to the Partition Act, R.S.O. 1990, c. P.4 (the “Partition Act”) requiring the sale of the Property. She also seeks a fresh writ of possession to replace the writ that she obtained but has been stayed. The Moving Party also seeks an order directing the application and distribution of the net proceeds of sale from the Property.

[5] For the reasons that follow, an order shall issue granting a partition or sale of the Property, and granting a fresh writ of possession, if required, following compliance with certain terms of the minutes of settlement entered into by the parties.

Background Facts

[6] The Moving Party is 75 years of age. She is the Estate Trustee of the estate of the late Erwin Greenspoon (the “Estate”).

[7] The Moving Party wishes to access her equity in the Property. She estimates that the value of her 80-per cent interest in the Property would be approximately $850,000. The Responding Party disputes the Moving Party’s estimate of value. Neither party has adduced a formal appraisal of, or opinion of value for, the Property.

[8] The Responding Party is 48 years of age. For financial reasons, in 2011, she closed the retail stores she had been operating. She then started an internet-based clothing distribution business from the Property, which she continues to operate. The Responding Party also resides at the Property with her boyfriend.

[9] There is a $640,000 CIBC Line of Credit (the “CIBC LOC”) registered against the Property. The parties disagree on how the CIBC LOC was incurred. The Moving Party submits that the CIBC LOC was registered against the Property with the Moving Party’s permission, but it was incurred solely by the Responding Party for her business. The Responding Party submits that the Moving Party incurred the CIBC LOC to finance her divorce proceedings.

[10] In addition to the CIBC LOC, the Property is encumbered by liens that the Ministry of National Revenue placed on the Property and registered against the Responding Party. There are also some executions registered against the Responding Party.

[11] In 2014, the Moving Party, as Estate Trustee of the Estate, brought an application naming the Responding Party as the responding party. In that proceeding, the Moving Party sought directions regarding the Estate and an order confirming that she had satisfied, by way of cash payments and property transfers, all the Responding Party’s entitlements to the Estate.

[12] The parties proceeded to mediation, each with her own counsel. Following mediation, on September 9, 2014, the parties entered into Minutes of Settlement (the “Minutes of Settlement”).

[13] Pursuant to the Minutes of Settlement, the Moving Party was obligated to pay the Responding Party $345,000. Regarding the Property, the Minutes of Settlement provided that a) the Property would not be sold for three years; b) the Responding Party would be permitted to reside in the Property for a period of three years during which the Moving Party would pay the interest on the CIBC LOC, following which the Responding Party would pay the interest, or the Property would be sold; c) on a sale of the Property, the CIBC LOC would be paid off, and the net proceeds would be divided between the Moving Party (as to 70 per cent), and the Responding Party (as to 30 per cent); d) the Responding Party would be responsible for all day-to-day expenses related to the Property while she occupied it, including all utilities; and e) the Moving Party would be responsible for any major repairs and property taxes related to the Property.

[14] The Minutes of Settlement also provided that a) the Moving Party would dissolve a fur company owned by the Estate and pay to the Responding Party her 10-per cent interest in the company, net of expenses and taxes; b) the Responding Party would assume all of her business-related expenses after September 9, 2014, for which the Moving Party would no longer have any responsibility; c) a timeshare in Aruba (the “Aruba timeshare”), jointly owned by the Moving Party and the Responding Party (indirectly through a company known as Occidental Allegra Group Ltd.), would be sold within 60 days of the Minutes of Settlement and the proceeds of sale divided equally between them; d) property owned by the Responding Party’s business and the Responding Party’s personal effects stored at the Moving Party’s residence would be preserved for three years, following which the Responding Party would remove them; e) the parties would have equal access to information relating to, and could participate in the expropriation of, farm land in Milton, Ontario held by the Estate (the “Milton Lands”); and f) the parties would execute a Full Mutual Release related to any other claims as against each other or the Estate.

[15] Neither the Aruba timeshare nor the Milton Lands have been sold. The Moving Party made efforts to sell the Aruba timeshare but the Responding Party was not prepared to sell based on those efforts. The Moving Party has since offered the entire Aruba timeshare to the Responding Party, for her own use absolutely. The Responding Party has not accepted this offer, which remains outstanding. The Responding Party’s evidence is that the Aruba timeshare has a value of approximately $100,000. There is no evidence of a formal appraisal or opinion of value for the Aruba timeshare.

[16] At the end of the three-year period provided in the Minutes of Settlement, the Responding Party did not take over the interest payments on the CIBC LOC, and she did not remove her business’s property from the Moving Party’s home.

[17] The Moving Party made the payments on the CIBC LOC from September 2017 to June 2018, in the total amount of $27,808.24. In 2018, the Responding Party began to make the interest payments, with the exception of the payments for July, August and September 2019.

[18] On September 30, 2019, I ordered the Responding Party to make all the missed interest payments forthwith. The Responding Party did so on November 14, 2019, but she then failed to make the November 1, 2019, December 1, 2019, and January 1, 2020 payments. At that time, the Responding Party had still not removed the property belonging to her business from the Moving Party’s property.

[19] On January 15, 2020, the Moving Party sought, among other orders, an order for possession and an order for partition or sale. These orders were not granted. The parties consented to terms of an order on other matters regarding the Property and the Minutes of Settlement. The January 15, 2020 Order (the “January 2020 Order”) directed the parties to cooperate to attempt to sell the Aruba timeshare and the Milton Lands. They did not cooperate and these assets remain unsold.

[20] On August 7, 2020, I granted the Moving Party possession of the Property based on the Responding Party’s failure to make the CIBC LOC payments, and I ordered the Responding Party to provide vacant possession by October 1, 2020 (the “August 2020 Order”). On November 24, 2020, the parties appeared before Cavanagh J., who, on consent of the parties, stayed the August 2020 Order temporarily, on the condition that the Responding Party continue to make the interest payments on the CIBC LOC.

[21] Since November 24, 2020, the Responding Party has been making the interest payments on the CIBC LOC.

[22] The Moving Party submits that the Responding Party remains in default of the Minutes of Settlement because she has failed to maintain the Property and she failed to pay utility bills, with the result that the unpaid amounts were added to the property taxes that the Moving Party is required to pay. The Moving Party also submits that the Responding Party has also refused to permit the Moving Party to access the Property, notwithstanding that she is an 80-per cent owner who is responsible for major repairs.

[23] It appears from the record that, as of January 4, 2023, the Responding Party had paid all outstanding utility bills for the Property. She submits that she failed to pay these bills as they came due because the Moving Party had directed the bills to be sent to an address other than the Property. As a result, the bills did not come to the attention of the Responding Party.

[24] The Minutes of Settlement are silent on when the Responding Party is required to vacate the Property or under what circumstances. The Minutes of Settlement do provide that if the Responding Party does not pay the interest on the CIBC LOC, the Property shall be sold, and the proceeds of sale shall be applied to a) paying off the CIBC LOC; b) paying 70 per cent to the Moving Party; and c) paying 30 per cent to the Responding Party.

[25] In February 2022, counsel to the Moving Party sent a letter to the Responding Party’s counsel confirming the Moving Party’s desire to sell the Property.

[26] In March 2022, the Moving Party’s counsel discussed with the Responding Party’s then counsel the possibility of a consent order permitting the sale of the Property. The Responding Party did not consent.

[27] In July 2022, the Moving Party served on the Responding Party her motion record in this motion.

Positions of the Parties

The Moving Party

[28] The Moving Party submits that she is an 80-per cent owner of the Property, and she is prima facie entitled to an order granting partition or sale.

[29] The Moving Party further submits that she is not motivated by bad faith in seeking this relief, as the Responding Party suggests. She submits that her monthly expenses, which include storage fees (for the belongings she stored when she sold her residence that she could no longer afford to maintain), property taxes on the Property and on the Milton Lands, and insurance, exceed her limited income, comprised of Old Age Security, Canada Pension Plan pension, and interest on investments. She submits that she needs her share of the proceeds from the sale of the Property to buy herself a condominium so she can live independently.

[30] The Moving Party also submits that the Responding Party is standing in the way of the sale of the Property for her own personal, financial reasons. That is, the Responding Party is concerned that her share of the net proceeds of the Property will not cover the liens and executions registered against her. The Moving Party rejects this concern and submits that the Responding Party has adduced no evidence to show that the Responding Party cannot relocate; rather, the Responding Party can afford alternative accommodation using the funds she is now using to service the CIBC LOC (approximately $3,500 per month) and the funds she is applying to reduce her income tax debt, both of which debts would be paid off on the sale of the Property.

[31] The Moving Party also submits that the relationship between the tenants in common is not conducive to a tension-free co-ownership. The Moving Party submits that the Responding Party is in breach of the Minutes of Settlement because she has not paid utility bills, she has failed to maintain the Property, and she has refused to permit an inspection of the Property to assess its current state of repair. The Moving Party further submits that the ongoing deterioration of the Property is to the detriment of both parties.

[32] The Moving Party contends that she has given the Responding Party considerable notice about the Moving Party’s plan to sell the Property, and the Moving Party’s motion has already been adjourned once because the Responding Party failed to comply with the timetable.

The Responding Party

[33] The Responding Party submits that the Moving Party is acting in bad faith by presenting the court with a false narrative that the Moving Party is lacking in financial resources when she is not.

[34] The Responding Party further submits that the Moving Party is motivated to sell the Property to hurt the Responding Party by causing her financial ruin through the loss of her business, which requires a lot of space for inventory, packaging, and shipping, and by causing her to become homeless.

[35] The Responding Party disputes the Moving Party’s estimate of the value of the Property at $1.1 million and submits that 20 per cent of the actual value of the Property would not cover the Responding Party’s debts.

[36] The Responding Party further submits that the Moving Party is in breach of the Minutes of Settlement and the January 2020 Order for her failure to sell the Aruba timeshare and the Milton Lands.

Partition or Sale

Law

[37] Pursuant to ss. 2 and 3 of the Partition Act, all joint tenants or tenants in common and all parties interested in 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. Any person interested in land in Ontario may seek an Order for the sale of the land under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

[38] The Partition Act provides a prima facie right to a joint tenant or tenant in common to partition or sale of lands. There is a corresponding obligation on the other owner to permit partition or sale.

[39] The court should compel such partition or sale if no sufficient reason appears why such an order should not be made: Davis v. Davis, [1954] 1 D.L.R. 827 (C.A.), at p. 830.

[40] The discretion to refuse partition should only be granted in circumstances of malice, oppression, or vexatious intent: Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2004), 75 O.R. (3d) 478 (C.A.), at para. 1, and Latcham v. Latcham (2002), 27 R.F.L. (5th) 358 (Ont. C.A.).

[41] The case law generally favours an order for partition or sale of a home by a co-tenant unless the opposing party can demonstrate prejudice. The onus is generally on the party resisting the sale to show prejudice. Prejudice has been defined as conduct by the moving party seeking the sale that is malicious, vexatious, or oppressive. That type of conduct is characterized by bad faith involving some sort of hidden agenda or purpose connected to the requirement for a sale of the property: Crews v. Bradford, 2018 ONSC 6413, at para. 15; Akman v. Burshtein, [2009] O.J. No. 1499 (S.C.), at para. 38.

[42] Personal hardship or inconvenience is not a sufficient reason to refuse an order granting partition or sale: Davis v. Davis; Akman v. Burshtein, at para. 58.

Analysis

[43] For the reasons that follow, I find that the Moving Party should be entitled to an order granting partition or sale of the Property. Under the Partition Act, the Moving Party has a prima facie right to the sale of the Property in which she owns an 80-per cent interest. I do not find that the Moving Party seeks partition or sale of the Property in bad faith. The Responding Party has not met her onus to show sufficient reason why such an order of petition or sale should not be made. Further, I find that an order of partition or sale is more advantageous to the parties in this case, who have been engaged in disputes relating to the Estate, including the Property, since at least 2014.

[44] The Responding Party submits that the Moving Party seeks the partition or sale to cause the Responding Party hardship. The Responding Party submits that if the Property is sold, she will not be able to operate her business and she will be homeless. However, the Responding Party has not provided any evidence that she is unable to relocate her business, nor has she provided sworn evidence of her financial situation. She is entitled to receive 30 per cent of the net proceeds of the sale of the Property, and 20 per cent of the net proceeds of the sale of the Milton Lands. The Moving Party has offered the Responding Party 100 per cent of the Aruba timeshare, which the Responding Party estimates to have a value of approximately $100,000.

[45] The Responding Party submits that the Moving Party has overestimated the value of the Property, but the Responding Party has not provided sworn evidence of its value. The Responding Party has not given the Moving Party access to the Property, making it difficult for the Moving Party to arrange for a reliable valuation.

[46] The Responding Party has not shown that she suffers from a disability that would prevent her from finding work if she were unable to continue to operate her business. She has had more than 18 months’ notice of the Moving Party’s desire to sell the Property.

[47] I accept that a sale of the Property will be inconvenient for the Responding Party, as she will need to relocate her business or find other employment, and she will need to find alternative accommodation. However, in my view, this is not a sufficient reason to deny the Moving Party’s request for an order granting partition or sale. I do not find that the Responding Party has shown that she will suffer prejudice as a result of conduct by the Moving Party that is malicious, oppressive, or vexatious with the result that the Moving Party’s motion should be denied: Greenbanktree Power Corp., at para. 1; Latcham v. Latcham.

[48] I do not find that the Moving Party’s conduct can be described in this way. Personal hardship and inconvenience of the kind that the Responding Party will experience do not amount to oppression of the kind that should cause a court to decline to grant an order for partition or sale: Crews v. Bradford, at para. 16; Akman v. Burshtein, at para. 58.

[49] The Moving Party deposed that she needs the equity in the Property to purchase a condominium so that she can live independently. The Moving Party submits that there was never any contemplation between the parties that she would be denied access to the equity that she now requires to support herself at 75 years of age.

[50] The Responding Party has not shown that the Moving Party is acting in bad faith or with a hidden agenda or a purpose connected to the requirement for the sale of the Property. The Moving Party’s agenda is clear from her evidence. She wishes to purchase a residence for herself. She does not wish to rely on the generosity of her sister for shelter. The Responding Party has not adduced evidence to show that the Moving Party has sufficient resources to purchase a condominium and meet her other expenses without the benefit of the Moving Party’s equity in the Property. The Responding Party did not cross-examine the Moving Party on her affidavit.

[51] Further, to ease the Responding Party’s financial burden, the Moving Party has offered the Responding Party the entire Aruba timeshare, as opposed to 50 per cent of the net proceeds of sale.

[52] The Responding Party submits that the Moving Party is in breach of the Minutes of Settlement, which required the Moving Party to sell the Aruba timeshare within 60 days. She further submits that the Moving Party is in breach of the January 2020 Order, in which I ordered the Moving Party to a) provide to the Responding Party financial documents relating to the Estate’s sale of the fur company; and b) cooperate in attempts to sell the Aruba timeshare and the Milton Lands and to exchange and execute the necessary documents to effect these sales.

[53] In fact, the Minutes of Settlement do not impose an obligation on the Moving Party to sell the Aruba timeshare within 60 days. Rather, the Minutes of Settlement state that the parties agreed that the Aruba timeshare would be sold within 60 days. Because the Aruba timeshare is owned by both parties, indirectly, it is implicit that they would cooperate to sell the Aruba timeshare within the timeframe they agreed upon. Similarly, in the January 2020 Order, the parties were ordered to cooperate in attempts to sell the Aruba timeshare and the Milton Lands. Based on the record, I find that both parties are in breach of their obligations under the Minutes of Settlement to sell the Aruba timeshare, and neither of them has complied with the terms of the January 2020 Order insofar as the Aruba timeshare and the Milton Lands are concerned. The sale of these two properties would be advantageous to both parties.

[54] While the Minutes of Settlement are silent on the term of the Responding Party’s occupancy, in my view, this does not mean that the Responding Party is entitled to occupy the Property indefinitely. In Billimoria v. Mistry, 2022 ONCA 276, 470 D.L.R. (4th) 406, the Court of Appeal agreed with the trial judge’s finding that although there was an initial agreement that the responding party could reside in the property, it was never an expectation that she could reside there forever. In that case, there was no evidence that the moving party’s actions in attempting to displace the responding party were malicious, oppressive, or vexatious, which would justify a refusal to sell the property.

[55] If the duration of a contract is not fixed, the courts will typically imply that an agreement can be terminated on reasonable notice: 1193430 Ontario Inc. v. Boa-Franc Inc. (2005), 78 O.R. (3d) 81 (C.A.), at paras. 44-45. In determining what is reasonable notice, a court will consider the circumstances of the case, including the expectations of the parties. See also 1397868 Ontario Ltd. v. Nordic Gaming Corporation (Fort Erie Race Track), 2010 ONCA 101, at para. 13, where the Court of Appeal held that when the term of a contract is not fixed and there is no provision for termination on reasonable notice, a court may treat a contract as either perpetual in nature or as an indefinite term contract into which the court implies a provision of unilateral termination on reasonable notice.

[56] In the case at bar, the Responding Party has had at least 18 months’ notice of the Moving Party’s desire to sell the Property. During that time, she has not taken any steps to relocate herself or her business. I find that it could not have been within the expectation of the parties that the Moving Party, at 75 years of age, would be forced, for financial reasons, to sell her residence that she could no longer afford, to store her belongings, to move in with her sister and brother-in-law, and to continue to live there indefinitely, while the Responding Party occupied a residence in which the Moving Party has an 80-per cent ownership interest. Under these circumstances, it is reasonable to expect that the Responding Party would yield to a sale.

Writ of Possession

[57] For the reasons that follow, I find that a fresh writ of possession, if required, should issue following certain steps taken by the parties to comply with the Minutes of Settlement and the January 2020 Order, or on further direction of this court.

[58] Both parties are in breach of the Minutes of Settlement and the January 2020 Order in which this court ordered the parties to cooperate to attempt to sell the Aruba timeshare and the Milton Lands, and to exchange and execute whatever documentation may be necessary to effect these sales.

[59] It is apparent that the Responding Party will be disadvantaged by the sale of the Property. Though she did not provide sworn evidence regarding her current needs and means, it is clear from the liens and the executions registered against the Responding Party that she does not have a lot of equity in the Property, even if the Moving Party’s estimate of value is accurate. Further, as a consequence of the sale of the Property, the Responding Party will lose both her place of business and her place of residence.

[60] In the Minutes of Settlement signed by the parties nearly nine years ago, the Aruba timeshare was to be sold within 60 days. That has not happened. The Moving Party made some efforts to sell the timeshare, but the Responding Party rejected those efforts on the basis of her belief that a higher price could be garnered.

[61] Similarly, the parties have had nearly nine years to agree on a plan to liquidate the Milton Lands. They have been unable to cooperate to do so. In my view, the sale of the Milton Lands is likely to be an ongoing source of conflict between the parties, which should be resolved sooner rather than later. The proceeds from the sale of the Milton Lands would be to the advantage of both the Moving Party and the Responding Party.

[62] The transfer of the Aruba timeshare to the Responding Party will put an additional asset into the hands of the Responding Party, which may assist her in financing the relocation of her business and herself. Accordingly, it is appropriate that the Moving Party take the necessary steps to effect the transfer of the Aruba timeshare to the Responding Party, or as the Responding Party shall direct.

[63] Regarding the Milton Lands, it is appropriate that the Moving Party make a written plan to sell the Milton Lands within the next 12 months. That plan shall be submitted to the Responding Party for her approval. Should the Responding Party fail or decline to approve the plan within 30 days of receipt, upon notice to the Responding Party, the Moving Party shall seek the court’s approval to sell the Milton Lands.

[64] Once the Aruba timeshare has been transferred to the Responding Party, or as directed by her, and the Moving Party’s plan for the sale of the Milton Lands has been approved, a writ of possession of the Property shall issue to the Moving Party, if required.

Disposition

[65] The Moving Party’s motion for an order for partition or sale of the Property is granted.

[66] An order shall issue:

1. granting the partition or sale of the Property (municipally known as 46 Glenarden Road, in the City of Toronto, Ontario);
2. granting the Moving Party reasonable access to the Property, on not less than 24 hours’ notice to the Responding Party, for the purposes of repairing the Property, or for the purposes of listing, marketing, and preparing the Property for sale;
3. directing the Moving Party to arrange for a transfer of her interest in the Aruba timeshare to the Responding Party, for the Responding Party’s own use absolutely, or otherwise as the Responding Party shall direct in writing;
4. directing the Moving Party to make a written plan for the sale of the Milton Lands to occur within 12 months of the date of the order, which plan shall be approved by the Responding Party within 30 days of receipt of the plan, failing which the Moving Party shall, on notice to the Responding Party, seek the court’s approval of the plan;
5. if required, granting a writ of possession to the Moving Party following a) the transfer of the Aruba timeshare to the Responding Party, as herein provided; and b) the Responding Party’s approval, in writing, of the Moving Party’s plan to sell the Milton Lands, or failing such approval, approval by this court of the said plan;
6. if required, varying the Order of Cavanagh J., dated November 24, 2020, to permit the issuance of a writ of possession irrespective of the Responding Party’s compliance with that Order regarding interest payments on the CIBC LOC;
7. for the purposes of the sale of the Property, granting the Moving Party the sole right to appoint a listing agent, to sign a listing agreement for the listing of the Property for sale and to execute any Agreement of Purchase and Sale for the Property, and any and all documentation required to effect the sale and transfer of the Property to a new owner without the signature of the Responding Party, provided that a copy of each such document shall be provided to the Responding Party within 24 hours of such document having been executed;
8. directing the proceeds of sale of the Property to be distributed as follows: a. first, to the discharge of the CIBC LOC registered against the Property; b. second, to the discharge of any arrears of property taxes (which shall be deducted from the Moving Party’s share of the net proceeds) and utilities relating to the Property (which shall be deducted from the Responding Party’s share of the net proceeds); c. third, to the reasonable legal costs of the solicitor retained to effect the transfer of the Property; and d. fourth, to the division of the balance of the proceeds between the Moving Party, as to 70 per cent, and the Responding Party, as to 30 per cent; and directing that the Responding Party’s interest in the Property is solely subject to all liens registered against the Property in respect of unpaid income taxes owing by the Responding Party and all executions registered against the Responding Party; and
9. Directing that, on notice to the other, either party is at liberty to seek directions from the court regarding the transfer of the Aruba timeshare, the plan to sell the Milton Lands, or the sale of the Property.

Costs

[67] The Moving Party has been overall successful on her motion. She is entitled to her costs. Having reviewed the Moving Party’s costs outline, and having considered the principles for awarding costs as set out in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I fix the Moving Party’s costs, on a partial indemnity scale, at $18,500 inclusive of disbursements and HST. If the Responding Party has not paid these costs prior to the sale of the Property, these costs may be deducted from the Responding Party’s share of the net proceeds of sale of the Property.

Dietrich J. Released: August 23, 2023