Court File and Parties
Court File No.: CV-23-18 Date: 2023-11-02 Superior Court of Justice – Ontario (Parry Sound)
Re: Jodi Lynn Marner, Applicant And: James Angus Godfrey, Respondent
Before: The Honourable Madam Justice J.S. Richard
Counsel: Matthew Jantzi, for the Applicant Riley Brooks, for the Respondent
Heard: October 30, 2023
Endorsement
[1] The Applicant applies to the court for an order under the Partition Act, R.S.O. 1990, c.P.4, that would force the sale of a property municipally identified as 99 Lakeview Crescent, in Burk’s Falls, Ontario (the “Home”). The Notice of Application further requests that the proceeds of sale be paid into court.
[2] The Home was purchased by the Applicant and the Respondent on March 7, 2020 for $500,000. Title was registered as a joint tenancy, and the parties were in a romantic relationship at the time.
[3] The parties shared the Home until their relationship ended in or around October, 2022. On November 17, 2022, the Applicant severed the joint tenancy to a tenancy in common. Around that time, there was a mortgage with an outstanding balance of approximately $346,000. The mortgage continues to be outstanding, and both parties continue to be registered on it.
[4] The parties never married, and they cohabited for somewhere between 9 months and 4 years, the specifics of which are highly contested by the parties. Neither of them commenced an application under the Family Law Act, R.S.O. 1990, c.F.3, after the breakdown of their relationship, and there are no family law applications before any court involving these parties at this time.
[5] The Respondent opposes the Applicant’s application under the Partition Act on two bases. Namely, he submits:
(1) This court does not have jurisdiction “to contemplate, let alone order, the sale of the subject property” as this dispute ought to be decided by the Family Court, pursuant to sections 21.1, and 21.8 of the Courts of Justice Act, R.S.O. 1990, c.C.43; and,
(2) In the alternative, if this court of the Superior Court of Justice does have jurisdiction, the forced sale of the Home would be oppressive and cause the Respondent to suffer undue hardship.
[6] During the parties’ sharing of the Home, the Respondent operated a business out of this Home, and he continues to do so today. The landscaping business is known as “Lakehouse Property Management” (the “Business”). The Business markets itself as cottage care specialists that serves the Almaguin Highlands region, and the landscaping services include maintenance and repairs of cottages in the community. Although not detailed specifically in the evidence before the court, it appears the Business would have been started sometime in 2021.
[7] The Respondent argues that, not only would the forced sale of the Home result in emotional and financial hardship due to the time, money and labour invested into the Home over the last three years, it would threaten his livelihood and his ability to earn an income. He argues, furthermore, that the division of the proceeds claimed by the Applicant would result in unjust enrichment, or a constructive trust claim, or at least trigger spousal support obligations for the Applicant.
[8] After the relationship ended in October 2022, the Applicant asked the Respondent to buy out her interest. He refused. The mortgage on the Home stood at approximately $337,000 at the time of this hearing. An appraisal report dated June 15, 2023, estimates that the Home has an approximate value of $725,000.
Analysis
Jurisdiction of this court
[9] I disagree that this court does not have the authority to deal with this Application. The sale of the Home may end up triggering spousal support obligations, as argued by the Respondent, but whether it does or not is irrelevant as no one is seeking this relief, or any other relief under the Family Law Act, as part of this Application. None of these reliefs, moreover, are even being sought in any court proceedings at this time.
[10] In other words, the proper court is not determined by the nature of the parties’ partnership or relationship, but rather, by the relief sought.
[11] The Partition Act remains a remedy available to both civil law matters and family law matters, and the Applicant’s application was properly brought. This is evidenced by not only the Partition Act itself, but also by the Rules of Civil Procedure, which state at Rule 66:
Where Available
66.01 (1) A person who is entitled to compel partition of land may commence an action or application under the Partition Act.
(…)
66.03 All money realized in a partition proceeding from sale of land shall forthwith be paid into court, unless the parties agree otherwise, and no money shall be distributed or paid out except by order of a judge or, on a reference, by order of the referee.
[12] Constructive trusts and unjust enrichment claims are also not limited to family law proceedings. As a matter of fact, they are routinely dealt with in civil cases of a commercial nature, in estates law, or in cases involving siblings, for example.
[13] So, while the Respondent argues that the order cannot be made in a vacuum, the reality is that the Applicant is not asking the court to do so. Rather, she is requesting that the order be made under the Partition Act. The Partition Act, moreover, defines “court” to mean “the Superior Court of Justice,” thereby granting jurisdiction to the Superior Court of Justice, regardless of whether it is before a general Superior Court of Justice, or before its Family Law division.
[14] If the result of the Application is such that an order made under the Partition Act results in the triggering of spousal support obligation, then it will be up to the Respondent to make an application of his own to request relief under the Family Law Act. At this time, no such applications are before any court.
Partition Act
[15] Section 2 of the Partition Act states that a tenant-in-common may compel a partition or sale of a property. Specifically:
Who may be compelled to make partition or sale
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. [emphasis added]
[16] In Delongte v. Delongte, 2019 ONSC 6954, at para. 20, Justice Shaw borrows from an earlier decision to explain:
[20] In Goldman v. Kudeyla, 2011 ONSC 2718, 5 R.F.L. (7th) 149, McGee J. summarized the interplay between the Family Law Act and the Partition Act as follows: 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 interest under the Family Law Act that would otherwise be defeated. 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. (…) [emphasis added]
[17] No one disputes that the parties are tenants-in-common. The Applicant therefore has a prima facie right to force the sale of the Home, unless the home is qualified as a matrimonial home. If it is a matrimonial home, then her prima facie right becomes conditional, or subject to, competing interests and rights that exist under the Family Law Act. Then the court would have to conduct an analysis of this prima facie right, and the family law rights that may exist for the parties, to determine if the family law rights in light of a certain set of facts should trump the prima facie right to sell.
[18] It is unequivocally clear, however, that regardless of whether the parties were just dating as alleged by the Applicant, or whether they were in fact “cohabitating” as argued by the Respondent, the Home does not qualify as a “matrimonial home” under the Family Law Act.
[19] A “matrimonial home” can only be defined as such if the parties were married while residing in it. The Applicant and the Respondent never married, and per s. 1 and 18 of the Family Law Act, they do not qualify as “spouse”:
s.1(1) In this Act,
“spouse” means either of two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right. (“conjoint”)
s.18 (1) Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home.
[20] There is a prima facie right of a tenant-in-common to partition or sell land, with a corresponding obligation on a tenant-in-common to permit partition and sale. The caselaw is abundantly clear that the court must compel such partition or sale if no sufficient reason appears as to why such an order should not be made. The court’s discretion is therefore not only narrow, such “sufficient reasons” are limited to circumstances of malice, oppression and vexatious intent. (See O’Brien v. McGilvray, 2018 ONSC 2442, at para 12. See also Economopoulos (Re), 2014 ONCA 687 at para. 89)
[21] The Respondent argues that the sale of the Home would consist of oppression. Specifically, he submits that a forced sale would result in undue financial and emotional hardship that would also impair his ability to earn a living, thereby amounting to oppression.
[22] The Respondent’s affidavit evidence details that he invested his time, money and labour into the subject property, and that he has been carrying the expenses of the Home since June 2021, or at least since October 2022. He submits that this amounts to a reasonable expectation that he would not be compelled to suddenly sell the subject property after the breakdown of the relationship.
[23] The Respondent further submits that the Burk's Falls community is unique in its size and characteristics, such that he could not viably relocate his Business. His office is located in the Home, and he uses it to prepare his quotes for jobs. He stores tools and materials for the Business at the Home. He has 5 full-time employees, or part-time depending on the season, though none of them actually work in the Home, as they all consist of labourer-type positions. Finally, he expresses concern about the viability of his business if he is forced to sell as his market is strongly based on his sense of community, and the idea that clients are comfortable having a “neighbour” take care of their cottage, especially in their absence. He is also vice president of the local Chamber of Commerce, is the chair of its Event Committee, and also sits on the economic development board. He also submits that selling would result in the termination his employees, as he would be unable to afford an alternative workspace in the area.
[24] While I sympathize with the Respondent, he cannot keep holding the Home hostage. The Applicant is exposed to serious and unnecessary liability as she continues to be tied to the mortgage, which also affects her own buying potential and credit score. Her liability even extends to the Respondent’s Business, which is only about two years old and remains unincorporated. The Business was never a joint venture, and it is not the Applicant’s responsibility to help the Respondent maintain it, nor should she have to accept being exposed to so much liability that comes with co-owing a property, and risks that are involved with a business that is tied to it.
[25] It is also worth mentioning that while the Respondent has been carrying the costs of the Home since the Applicant left, he is not, and has not been, paying the Applicant any occupation rent.
[26] The Respondent was given an opportunity to buy out the Applicant’s interest, but he chose not to do so. He could have done so by remortgaging the property, obtaining a business loan, or finding alternate ways to finance it. If all of those efforts were exhausted, then it just further highlights the level of liability to which the Applicant is exposed.
[27] While the sale of the Home may lead to great inconveniences for the Respondent, these inconveniences do not constitute oppression.
[28] The Application must therefore be granted.
Proceeds of sale
[29] According to Rule 66(3) of the Rules of Civil Procedure, “all money realized in a partition proceeding from sale of land shall forthwith be paid into court, unless the parties agree otherwise, and no money shall be distributed or paid out except by order of a judge.”
[30] The Applicant contends that she made significantly larger financial contributions to the Home than the Respondent did, which translates into a larger share of the proceeds of sale. The Respondent disputes these calculations.
[31] The Respondent, on the other hand, alleges that he made significant improvements to the Home which increased its value, thereby entitling him to a larger share of the proceeds than the Applicant. The Applicant admits to some of the improvements, but argues that the calculations proposed by the Respondent are grossly exaggerated.
[32] The issue of the distribution of proceeds was not part of this short motion, as detailed evidence, questioning, and potentially viva voce evidence, may be required to assist the court in making this determination.
[33] If the Respondent feels the sale does trigger spousal support obligations, then he can commence a family law Application.
[34] In any case, the proceeds of sale shall be held in trust, as suggested by counsel during the hearing.
[35] As the successful party on this partial hearing, the Applicant is entitled to costs. The Bill of Costs submitted by the Applicant outlines costs, on a partial indemnity basis at 60% of total fees, totalling $18,258.55. Since this hearing only addressed a portion of the Application, costs shall be set at $10,000, but shall remain without prejudice to the costs assessed for the whole of the Application when the matter concludes.
Order
[36] The following is ordered:
(a) The property municipally known as 99 Lakeview Crescent, in Burk’s Falls, Ontario, and legally described as PCL 17548 SEC SS; LT 4 PL M320 AND PT OF THE ORIGINAL SHORE RDAL IN FRONT OF LOT 27 CONCESSION 13 DESIGNATED AS PART 1 42R18783, (CLOSED BY BY-LAW ATTACHED TO GB24791); ARMOUR, bearing PIN 52146-0404 (LT), shall be sold;
(b) Subject to the cost order herein, the net proceeds of the sale shall be held in trust by a law firm mutually agreed upon by the parties;
(c) The disposition of the net proceeds of sale shall be determined upon the first of the following:
- By agreement between the parties, and the filing of Minutes of Settlement;
- By hearing pursuant to the Northeast Region’s Long Motion Protocol;
- By way of family law proceedings, if one of the parties commences a family law Application.
(d) The Respondent shall pay the Applicant costs in the amount of $10,000.00, all inclusive, which may be released and paid out of the net proceeds of sale, immediately upon sale. For greater clarity, this amount shall be paid out of the Respondent’s share.
The Honourable Madam Justice J. Richard Date: November 2, 2023