Court File and Parties

COURT FILE NO.: FC328/21

DATE: December 19, 2023

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

RE: Ryan Joey Picanco, Applicant

AND:

Sabrina Fontaina Sousa, Respondent

BEFORE: MITROW J.

COUNSEL: Kenneth B. Fraser for the Applicant

Isha Wadhwa for the Respondent

HEARD: November 15, 2023

ENDORSEMENT

INTRODUCTION

[1] The sole remaining issue on the applicant father’s motion is his request for the sale of the jointly-owned matrimonial home.

[2] For reasons that follow, the matrimonial home shall be listed and sold subject to the terms and conditions as set out in the order below.

BRIEF BACKROUND

[3] The parties began to cohabit in 2009, they were married in 2011 and separated on January 1, 2017.

[4] The parties have two children, who were ages 10 and 8 when the motion was heard. The respondent mother has continued to reside in the matrimonial home since separation.

[5] The applicant retained his counsel in October 2020 to address issues arising from the parties’ separation. The applicant’s counsel attempted to engage the respondent in productive discussions, including the sale of the matrimonial home, and obtaining financial disclosure from the respondent. These efforts were unsuccessful, resulting in the applicant issuing and serving his application in March 2021. Further delays ensued due to the respondent’s failure to serve and file responding material despite extensions to do so granted by the court. It was not until November 2021 that the respondent retained counsel and served her responding material.

[6] A case conference was held on February 16, 2022. The applicant’s motion for the sale of the matrimonial home was returnable initially, over a year ago, on October 19, 2022. That motion also sought various financial disclosure; however, the applicant deposes in a recent affidavit that this financial disclosure now has been provided.

[7] The respondent brought a motion also returnable October 19, 2022, seeking interim orders for spousal support and child support.

[8] On October 19, 2022, Korpan J. made various interim orders, the relevant portions of which are summarized as follows:

a. The applicant’s annual income was found to be $120,796 and the respondent’s annual income was found to be zero;

b. Pursuant to s. 9 of the child support guidelines, and the shared parenting arrangements in place for the children, the applicant was ordered to pay the respondent child support in the amount of $1,725 per month;

c. The applicant was ordered to pay spousal support to the respondent in the amount of $1,832 per month;

d. The child support and spousal support payments were ordered to be made on an interim without prejudice basis and were to commence on November 1, 2022;

e. Effective November 1, 2022, the respondent was to pay the mortgage and property taxes for the matrimonial home;

f. The parties were ordered to exchange fully documented net family property statements within 60 days, and the parties were ordered to try to resolve arrears of child support, spousal support, and post-separation adjustments within 60 days; and

g. The respondent was ordered, within 90 days, to produce to the applicant, if she is able, proof of financing to purchase the applicant’s interest in the matrimonial home, together with an offer to settle the disposition of the matrimonial home.

[9] Korpan J. had ordered the matter to be returned before her on February 1, 2023; however, just prior to this date, the parties agreed to mediation, which was eventually arranged and occurred in July 2023. The parties were unsuccessful in resolving the issues of child support arrears, spousal support arrears and post-separation adjustments.

[10] Also, the parties were not able to reach any agreement for the respondent to purchase the applicant’s interest in the matrimonial home. The applicant is not opposed to allowing the respondent to buy out his interest; however, it is the applicant’s position that the respondent has not provided proof of financing to enable her to do so.

[11] The respondent does not dispute the applicant’s evidence that the parties did exchange net family property statements as ordered, and that there is a small equalization payment of approximately $3,500 owing by the respondent to the applicant.

[12] The respondent deposes that she received a valuation of the matrimonial home as of August 2022, in the amount of $975,000. Although the respondent deposes that she “believes” that the value has “likely gone down”, she offers no reliable evidence as to corroborate her belief.

[13] The respondent does not dispute the applicant’s evidence that the balance of the jointly-held mortgage as of November 1, 2022 (when the respondent took over making the mortgage payments pursuant to the order of Korpan J.) was $204,112 and that this translates to an approximate total equity of $770,888. Each party’s equal share of the equity would be approximately $385,444.

[14] There are contested issues regarding child support and spousal support. The applicant seeks to impute income to the respondent. Evidence regarding each party’s income is contained in the respondent’s affidavits.

[15] The respondent had worked for a fast-food chain for 18 years, including the position of manager. The respondent deposes that she is unable to work due to medical reasons. For 2018, the respondent’s employment earnings were $28,840; in 2019 her earnings were $10,500, dropping off to $4,375 in 2020. Commencing in 2021, the respondent has had no employment earnings. The respondent lists the applicant’s income for the years 2018 to 2021 inclusive, ranging from a low of $94,614 in 2020 to a high of $132,135 in 2019. In 2021, the applicant’s income was $120,796.

[16] The applicant does not dispute that he will owe the respondent arrears of child support and spousal support from the date of separation. However, the quantification of the arrears is in dispute.

[17] In her initial affidavit[^1], the respondent quantified the total arrears at just over $84,000. The applicant deposes that the arrears are more in the range of $55,000.

[18] In a subsequent affidavit[^2] the respondent included a calculation suggesting that the child and spousal support arrears exceed $155,000. However, I place little weight on that calculation. The respondent fails to explain why this calculation differs from her initial calculation of approximately $84,000; further, for 2022 the respondent uses a projected income of just over $178,000 for the applicant, which creates arrears of over $57,000 for that year alone. There is no evidence to explain how this projected income was arrived at, and also, the projected income differs substantially from the income of $120,796 used in the order of Korpan J. dated October 19, 2022.

[19] During argument, for the purpose of the motion, it is noted that the respondent was not opposed to the using the arrears calculation of $84,000.

JURISPRUDENCE

[20] The jurisprudence establishes that a joint tenant has a prima facie right pursuant to the Partition Act, R.S.O. 1990, c. P.4, to an order for partition or sale of lands held with another joint tenant, and that the court is required to compel partition or sale unless the resisting party demonstrates that such an order should not be made: Kaphalakos v. Dayal, 2016 ONSC 3559 (Divisional Court), at paras. 16, 17.

[21] The standard for the exercise of the court’s discretion to refuse an order for partition or sale requires malicious, vexatious or oppressive conduct by the person seeking the sale and this narrow standard for the exercise of discretion flows from a joint owner’s prima facie right to partition or sale: Latcham v. Latcham, 2002 CanLII 44960 (ON CA), 2002 CarswellOnt 1757 (Ont. C.A.), at paras. 1, 2 (and cited in Kaphalakos, supra at para. 17).

[22] The malicious, vexatious or oppressive conduct must relate to the bringing of the application and not the conduct of the person bringing the motion; the aforesaid conduct should relate to the partition or sale issue itself and it is necessary to look at the reasonableness of the positions taken by the parties: Kaphalakos, supra at para. 17.

[23] Where the exercise of the court’s discretion to compel partition or sale involves a matrimonial home, the court should determine first 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, R.S.O. 1990, c. F.3. If not, the right to sale prevails, and if so, the sale is denied unless the selling party can demonstrate that the sale would not prejudice the right of the resisting party. A sale may also be denied where there are compelling circumstances such as availability of a trial within a short period, prejudice relating to 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: Goldman v. Kudeyla, 2011 ONSC 2718, 5 R.F.L. (7th) 149 (S.C.J.) at paras. 17 – 19, cited with approval in Malaviya v. Dhir, 2022 ONSC 4756 (S.C.J.), at para. 15, Aragon v. Sobon, 2021 ONSC 6516 (S.C.J.), at paras. 9, 10, McInnes v. McInnes, 2017 ONSC 3921 (S.C.J.), at para. 42, and Chaudry v. Chaudry, 2012 ONSC 2149 (S.C.J.), at para. 21.

DISCUSSION

[24] There is no evidence that the applicant has engaged in malicious, vexatious or oppressive conduct. Rather, the applicant’s conduct has been quite the contrary. The applicant waited for over three years after separation to move forward with this matter; he attempted without success to address issues before issuing the application and he agreed to participate in mediation.

[25] The matrimonial home is the parties’ main asset. This case is not on the trial list and the settlement conference is not until July 2024. No claim is advanced by the respondent for exclusive possession of the matrimonial home, although even if such a claim was advanced it would not, per se, be a determinative factor. This is not a case where the respondent is entitled to an equalization payment which can be used to purchase the applicant’s interest in the matrimonial home. Rather, the evidence is that the respondent will owe a small equalization payment to the applicant. In her answer, the respondent requests that the matrimonial home be sold. Although I point this out, I have not considered this claim made in the answer in deciding this motion, as this point was not specifically raised or addressed by either party.

[26] Despite the order of Korpan J. mentioned earlier, the respondent has not provided evidence that she has obtained or is capable of obtaining financing to purchase the applicant’s interest in the matrimonial home. While the applicant does admit owing child support and spousal support arrears, there was no credible evidence from the respondent that she would be in a position to purchase the applicant’s interest in the matrimonial home even after taking into account the arrears calculations, given the applicant’s significant equity in the matrimonial home.

[27] There was no suggestion in the respondent’s material that she plans to enter the workforce in the foreseeable future. The evidentiary record does not disclose any reasonable prospect of changes in the respondent’s income or her ability to obtain financing.

[28] In relation to the children, I take into account that the parties have a shared-parenting arrangement. While a move is always disruptive, the applicant has been most patient as the parties have been separated for over six years. The respondent has had more than ample time to either acquire the applicant’s interest in the matrimonial home or to make plans for alternate accommodation should the matrimonial home be sold.

[29] The respondent will have substantial funds from her share of the equity to acquire alternate accommodation.

[30] The evidentiary record supports the conclusion, which I make, that the sale of the matrimonial home will be the inevitable result in this case.

[31] The respondent deposed that if the matrimonial home is sold, that she would like certain renovations done, and it was her evidence that the parties had agreed to do the renovations. The applicant deposes that if the matrimonial home is listed for sale, that he is prepared to work with the respondent to complete any renovations or repairs as recommended by the real estate agent.

[32] The order below deals with the issues of renovations or repairs. The applicant had proposed that those expenses be shared equally; however, given the financial position of the parties, it is appropriate for the applicant to bear those expenses upfront subject to being reimbursed when the sale closes. The date by which the matrimonial home is to be listed is set out in order below and takes into consideration that the parties will need to complete any repairs or renovations.

[33] I find in the circumstances that $100,000 should be withheld from the applicant’s share of the net sale proceeds to address arrears of child support, spousal support and post-separation adjustments. The small equalization payment owing by the respondent can be offset against support arrears. During his submissions at the hearing of the motion, the applicant was not opposed to a $100,000 holdback. The applicant had proposed to include in the order a provision that each party should be able to make an offer; that term in included in the order below.

ORDER

[34] For the foregoing reasons, I make the following order:

1. The matrimonial home shall be listed and sold subject to the following terms:

a. The property will be listed for sale by no later than April 1, 2024. The parties shall make best efforts to agree to a listing agent within 14 days of the date of this order, failing which the listing agent shall be selected by the applicant;

b. The applicant and the respondent shall follow all recommendations of the listing agent with respect to any renovations, repairs, or staging (hereinafter collectively referred to as “sale preparation expenses”) needed to prepare the property for sale. The sale preparation expenses shall be shared equally by the parties, but the applicant shall pay the expenses upfront and shall be reimbursed for the respondent’s share from the matrimonial home sale proceeds immediately on closing;

c. Once listed, the property shall be maintained in a suitable condition for showing and the applicant and the respondent shall accommodate all reasonable requests for showings;

d. The applicant and the respondent shall accept the best offer to purchase the property in consultation with the listing agent, which may include an offer by either party to purchase the property;

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;

f. Pending the sale of the matrimonial home, the respondent shall remain in possession of the matrimonial home and shall pay the mortgage, property taxes, property insurance and utilities. If the respondent fails to do so, those expenses shall be paid from her share of the net sale proceeds, except that, consistent with para. 6 of the order of Korpan J. dated October 19, 2022, all payments for the mortgage, property taxes, and property insurance are without prejudice to the respondent’s claim for a post-separation adjustment for the amounts paid; and

g. If any other issue arises regarding the sale of the matrimonial home, which the parties are unable to resolve, then either party may bring a motion for directions, and if the circumstances warrant, the motion may be brought on an urgent basis.

2. The net proceeds from the sale of the matrimonial home, after payment of all expenses associated with the sale including payment of the mortgage, real estate commission, legal fees, and any other expenses or adjustments, shall be dealt with as follows:

a. 50% of the net sale proceeds, less 50% of the sale preparation expenses incurred by the applicant, shall be paid to the respondent, and the amount withheld for sale preparation expenses shall be paid to the applicant; any expenses not paid by the respondent as required by paragraph 1(f) of this order, shall be paid from the respondent’s share of the net sale proceeds, but without prejudice to the respondent’s right to a subsequent post-separation adjustment;

b. 50% of the net sale proceeds, less a holdback of $100,000, shall be paid to the applicant;

c. The holdback referred to (b) shall be held in trust by the lawyer acting for the applicant in this proceeding, or otherwise in trust as may be agreed to in writing by the parties, as security for arrears of child support, spousal support and any post-separation adjustments, and shall not be paid out except on the written consent of both parties or court order; and

d. If subsequent to this order, material facts arise which may affect whether the respondent should receive her entire share of the net sale proceeds as provided in (a), or whether the amount of the holdback specified in (b) should be changed, then either party may bring a motion for such relief.

3. The parties may make written costs submissions regarding the motion. The costs submissions shall be limited to three typed pages, minimum font 12 and double-spaced (maximum two pages for reply). In addition, costs submissions may include copies of bills of costs, time dockets and offers to settle. Any references to authorities shall be hyperlinked in the written costs submissions. The applicant shall serve and file his costs submissions within three weeks, the respondent shall serve and file her costs submissions within three weeks thereafter, and any reply, is due within one week thereafter. If the parties settle the costs, then they shall forthwith advise the trial coordinator.

“Justice Victor Mitrow”

Justice Victor Mitrow

Date: December 19, 2023

[^1]: Respondent’s affidavit sworn October 14, 2022, para. 16 and exhibit C

[^2]: Respondent’s affidavit sworn January 26, 2023, exhibit B