Court File and Parties
COURT FILE NO.: FC-23-00059121-0000 DATE: October 7, 2024
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Amratpal Sidhu Applicant – and – Amandeep Kaur Respondent
Counsel: Barry Paquette, Counsel for the Applicant Matthew Kelly, Counsel for the Respondent
HEARD: September 4, 2024
THE HONOURABLE JUSTICE Piccoli
Endorsement on Motion of September 4, 2024
[1] The Respondent (mother) brings a motion seeking partition and sale of the jointly owned property located at 47-350 Dundas Street in Cambridge, Ontario (Dundas Street Property), an order that she have sole carriage in respect of the listing and sale of the property, an order dispensing with the consent of Applicant (father) with respect to any listing or sale of the property, an order that the father cooperate in all facets of the listing and sale of the property, an order, if necessary, granting the mother exclusive possession of the Dundas Street Property and an order directing that following the payout of the mortgage on the property located at 67 Lardner Street, in Cambridge (Lardner Street Property), the proceeds of sale be held in trust. She also seeks an order for child support based on an imputed income to the father of $34,000 per annum which would require him to pay $517 per month for their two dependant children. She asks that the child support commence July 1, 2024. She relies on her notice of motion dated June 10, 2024, and her financial statement and affidavit of same date. The court was advised at the commencement of motions court that the issue of child support has been resolved.
[2] The father opposes the motion and relies on his affidavit and financial statement dated July 11, 2024.
[3] Both parties have uploaded case law to Case Center.
[4] The parties also made written submissions following argument of the motion as it relates to the payment of the mortgage registered on title to the Lardner Street Property.
Background
[5] The parties participated in a religious/family wedding in India in December 1997 but, according to mother, they were never legally married.
[6] The mother asserts the parties were in an on and off common-law relationship from 1997 to 2020 before separating on a final basis on December 31, 2020. The father asserts that the parties married on December 4, 1997 and they separated on January 1, 2021. The father acknowledges that he went through two other marriages with two other women for immigration purposes. He asserts that he and the mother are legally married.
[7] The parties have three children: Bhavan born December 30, 2001 (age 22), Bavneet born September 3, 2003 (age 21) and Mannraj born March 22, 2009 (age 15).
[8] There is no dispute that the children have lived with their mother since the separation and that they have limited contact with their father. Mother asserts that she has been the primary caregiver to all three children since they were born.
[9] Bhavan has graduated from high school. He works at Toyota. He continues to live with his mother.
[10] Bavneet is in her second year at Wilfrid Laurier in the Kinesiology program. She too lives with her mother.
[11] Mannraj is in Grade 9 at Jacob Hespeler Secondary School and also resides with his mother. He is involved in various extra-curricular activities, including hockey.
[12] The mother alleges that she has suffered family violence at the hands of the father. The court is not able to make a determination as it relates to family violence on this motion based on the conflicting material before it.
[13] The mother works at CIBC bank as a client advice manager and earns approximately $67,500 per annum.
[14] The father is a self-employed truck driver for his own trucking company MJ Trucklines. He states that he is the only driver.
[15] The father’s notices of assessment for the years 2020 to 2022 show line 150 income of $36,909, $21,600 and $20,400 in those years.
[16] He asserts that he was off work for a period of time but that he is now working and earning an income commensurate with the income he has agreed be imputed to him on in interim without prejudice basis.
[17] The property located at 67 Lardner Street, in Cambridge (Lardner Street Property), is registered solely to the mother.
[18] The mother and children reside at the Lardner Street Property. This is where the parties resided together as a family with the children. Subsequent to separation the mother and children remained at the property and the father moved to the Dundas Street Property.
[19] The father advances claims for an equalization payment if the court finds the parties married and a trust claim as it relates to the Lardner Street Property should the court determine the parties are unmarried.
[20] The parties do not agree as it relates to the tracing of funds for the purchase of the Lardner Street Property. The father asserts he fully paid for the downpayment on the property in the amount of $150,000 to $160,000. The mother asserts that she paid fully for the downpayment of the property from her own funds and funds advanced to her from her uncle. The court has not been asked to, nor could it, determine the merits of each party’s position as it relates to the Lardner Street Property on this motion.
[21] The Dundas Street Property is registered in the joint names of the parties. This is the property where the father resides. According to the mother’s financial statement the home is worth approximately $650,000. There is no mortgage registered against this property.
[22] The Dundas Street Property was purchased on May 17, 2018. There is no dispute that a mortgage was taken out on the Lardner Street Property in the amount of $262,000 (“the mortgage”) to facilitate the purchase of the Dundas Street Property. The mortgage is registered in the name of the mother but the father personally guaranteed the mortgage. The guarantee signed by the father on May 11, 2018 confirms his obligation to pay the mortgage.
[23] The parties did not live at the Dundas Street Property as a family at the date of separation and as such, if it is determined the parties were married, this property is not a matrimonial home.
[24] The Lardner Street Property is estimated to be worth $850,000. The equity in this property, whether the mortgage debt is $220,000 or $228,000, would be in the neighbourhood of $620,000.
[25] The mother has received several dishonoured payment notices from CIBC (March and May 2024) related to the mortgage. The notices are directed to both parties as borrowers. In submissions but not in evidence, the mother indicated the current rate of interest on the mortgage is over 10%.
[26] The father agrees that the parties had a verbal agreement following the separation that he would make the mortgage payments related to the mortgage. He made those payments until March 2024. He indicates that he then fell into hard times. He is not prepared to resume making those payments as he has now consented to an order to pay child support.
Position of the Parties
[27] The mother asserts that the Dundas Street Property should be sold, the father should not participate in the sale process and proceeds of the sale be used to pay the mortgage on the Lardner Street Property. She asks that the proceeds of sale remaining after paying real estate fees and commissions and the mortgage on the Ladner Street Property, be held in trust. In the alternative, she asserts that the proceeds be paid out equally to the parties.
[28] The father asserts that the issues relating to the two properties are inextricably intertwined and as such the Dundas Street Property should not be sold. If the court orders the home sold, he will essentially be homeless. He further asserts that if the court orders that the Dundas Street Property be sold, the proceeds should not be used to pay the collateral mortgage registered on the Lardner Street Property and should instead be divided equally between the parties.
[29] For the reasons that follow, the court orders that the Dundas Street Property be sold, that the father participate in the sale, that the proceeds of sale be used to pay off the collateral mortgage on the Lardner Street Property, and that thereafter following the payment of real estate and legal fees referable to the sale, the remaining funds be paid to the parties equally.
Preliminary Issue of Failure to Plead the Partition Act
[30] The father has raised the issue that the mother has failed to plead specifically the Partition Act, R.S.O. 1990, c. P.4. in her Answer and Claim and in this motion. He points to Kereluk v. Kereluk (2004), 9 R.F.L. (6th) 385, at para. 20; Oppong Nketiah v. Oppong Nketiah, 2021 ONSC 4807, at paras. 38-48 and Mignella v. Federico, 2012 ONSC 5696, at para. 32, as standing for the proposition that the Partition Act has to be plead where relief is sought under that Act.
[31] In this case, the court agrees with the mother that failure to specifically plead the Partition Act is not fatal. In her Answer at paragraph 8 she specifically asks for the partition and sale of the Dundas Street Property. In her notice of motion, she also asks for the partition and sale of the Dundas Street Property. Given her position as it relates to not being married, the Family Law Act would not apply. There is no prejudice in this case to the failure to name the legislation as the pleadings clearly request an order for partition and sale. It would not be fair or a good use of the parties’ resources, or the resources of the court, to dismiss the motion on this basis only to have it reconstituted. (see Hamilton v. Hamilton, 2021 ONSC 274 and in Barbieri v. Vistoli, 2019 ONSC 6385).
The Law as it Relates to the Sale of Jointly Owned Property
[32] Justice Pazaratz in Ricketts v. Ricketts, 2024 ONSC 206, at para. 12, referred to his decision in Dhaliwal v. Dhaliwal, 2020 ONSC 3971, where the court summarized the applicable legal principles. The Divisional Court in Nogueira v. Nogueira, 2021 ONSC 7564, at para. 3, cited Dhaliwal with approval. He also refers to the decision of Justice Kurz in R.L. v. M.F., 2022 ONSC 1677, 71 R.F.L. (8th) 398.
[33] Justice Pazaratz summarized the law as follows: a. Section 2 of the Partition Act empowers the court to order the sale of a jointly owned property, including a matrimonial home. McNeil v. McNeil, 2020 ONSC 1225 (SCJ). b. A joint tenant has a prima facie right to an order for the partition or sale of property held with another joint tenant. Kaphalakos v. Dayal, 2016 ONSC 3559 (SCJ); Marchese v. Marchese, 2017 ONSC 6815 (SCJ); Jama v. Basdeo, 2020 ONSC 2922 (SCJ); Davis v. Davis; Brienza v. Brienza, 2014 ONSC 6942 (SCJ). c. A court is required to compel partition and sale unless the opposing party has demonstrated that such an order should not be made. Jama v. Basdeo; Steele v. Doucett, 2020 ONSC 3386 (SCJ). d. The other joint tenant has a corresponding obligation to permit the sale. These are fundamental rights flowing from joint tenancy. Steele v. Doucett. e. The onus is on the party who opposes a sale to establish that there is a sufficient reason, recognized in law, why the court should exercise its discretion to refuse a sale. Afolabi v. Fala, 2014 ONSC 1713 (SCJ). f. Generally, the party opposing the sale must show malicious, vexatious or oppressive conduct relating to the partition and sale issue in order to avoid the sale. Silva v. Silva (1990), 1 O.R. (3D) 436 (ON CA); Jama v. Basdeo; Steele v. Doucett. g. Each case must be considered on its own facts. The court must consider all relevant factors in exercising its discretion. Davis v. Davis, [1954] O.R. 23 (C.A.); Steele v. Doucett. h. In family law cases, an order under the Partition Act should generally not be made until any dispute related to the property has first been determined. Maskewycz v. Maskewycz (1973), 2 O.R. (2d) 713 (ON CA). i. The Family Law Act does not displace the Partition Act. But in family cases a partition application should generally not be granted where it can be shown that a legitimate family law claim would be unfairly prejudiced. Silva v. Silva; Parent v. Laroche, 2020 ONSC 703 (SCJ); Latcham v. Latcham (2002), 27 R.F.L. (5th) 358 (ON CA); Dulku v. Dulku, 2016 ONSC 6400 (SCJ). j. In assessing and guarding against potential prejudice, the court must take a realistic view of the potential impacts of a sale — both positive and negative — in relation to the interests of both joint tenants, and the family as a whole. Where the financial or other circumstances of the parties are such that a sale would be the inevitable result at trial, there is little justification for delaying the sale. Zargar v. Zarrabian 2016 ONSC 2900 (SCJ); Giglio v. Giglio 2015 ONSC 8039 (SCJ); Keyes v. Keyes, 2015 ONSC 1660 (SCJ). k. More to the point, where it is evident at the temporary motion stage that monthly carrying costs are currently unsustainable, it is inappropriate to indefinitely perpetuate financial hardship for the entire family. Quite commonly, house expenses which were barely affordable when the family unit was intact immediately become unaffordable once the same income has to fund two separate households. Sometimes harsh new realities need to be faced sooner as opposed to later — in order to avoid even more painful consequences such as power of sale proceedings or even bankruptcy. l. The court must consider the impact of a proposed sale on children or a vulnerable spouse -- including the emotional impact, and the fundamental need to ensure that they have appropriate housing. Delongte v. Delongte, 2019 ONSC 6954 (SCJ); Kaing v. Shaw, 2017 ONSC 3050 (SCJ). The availability and affordability of alternate housing must be considered. As part of the analysis, support obligations may need to be co-ordinated — even on a temporary basis — to ensure that any party displaced by a sale will have the resources to arrange reasonable replacement accommodation. 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. 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). o. On the other hand, a request for sale during summer months may entail some timeliness if seasonal market opportunities are favourable; or to reduce the likelihood of a child having to change residence (and possibly catchment area) while a school year is in session. p. The stage of a child's academic progress might also be relevant. Sale might be delayed if it would allow a child to complete a certain grade level before an inevitable switch to another school. On the other hand, immediate sale might be more appropriate if the child happens to be transitioning to a new school in any event. q. But the mere existence of children in a household is not in itself a sufficient basis to oppose a sale. A generic statement that children enjoy living in their current house or that they will be unhappy if they have to move, is not sufficient. The party opposing a sale must establish a likely negative impact more serious than the inevitable adjustments and disruptions which all families face when parents decide to separate. r. A pending equalization claim may also be relevant. The court cannot compel one joint tenant to sell to the other. Martin v. Martin. Nor can it give either joint tenant a right of first refusal. Dibattista v. Menecola. But a recipient of an equalization payment may propose to set that entitlement off against their former spouse's share of the equity in the home. If a sufficiently particularized proposal seems viable -- and especially if it would benefit a child -- sale should be delayed to allow proper consideration of that option. Chaudry v. Chaudry, 2012 ONSC 2149 (SCJ). s. The court must consider and attempt to guard against potential prejudice. Are there realistic issues or claims yet to be determined on a final basis, which would be prejudiced or precluded if a property is ordered to be sold at the temporary stage?
Analysis as to Whether the Dundas Street Property Should be Sold
[34] In this case, the mother has a prima facie right to a sale of the Dundas Street Property. The father has not met the onus of showing why the home should not be sold. He has not shown a sufficient reason as to why the home should not be sold.
[35] There is no evidence before the court, nor does the father submit that the mother is acting in a malicious, vexatious or oppressive manner in seeking the house be sold. The father asserts it would be unfair. That is not the test.
[36] The property dispute between the parties does not relate to the Dundas Street Property; it relates to the Ladner Street Property. There is sufficient equity in the Ladner Street Property to satisfy the claims being made by the parties.
[37] The children do not reside in the Dundas Street Property and as such there is no impact of the proposed sale on the children.
[38] If father receives 50% of the proceeds of sale, after the payment of the mortgage, he will have sufficient resources to obtain appropriate housing following the sale.
[39] A sale of the Dundas Street Property would be the inevitable result of a trial.
[40] The parties are not close to a trial; they have had a case conference. The court is advised there will be questioning, likely undertakings and then a settlement conference and trial management conference. It is not likely the matter will be ready for trial until the latter part of 2025.
Analysis as to Whether the Court Should Dispense with the Applicant’s Consent on the Documents Related to the Sale of the Dundas Street Property
[41] The mother asserts “[g]iven the history between us, I do not believe the Applicant will willingly consent to or cooperate with a sale of the Dundas property.”
[42] This request by the mother is premature at best. There is no evidence before the court that the father will not comply with the orders of the court.
[43] The mother’s assertions that the father has not paid child support to date do not amount to a breach of a court order. The father’s explanation that he was paying the mortgage may be an answer to her concerns.
[44] The lack of communication between the parties is also not a reason to disentitle the father from participating in the sale process. Both parties have lawyers who will direct them appropriately.
[45] The mother’s speculation that the father will not cooperate is not a sufficient reason to disallow his participation. The court does not have a crystal ball. The court expects parties to always comply with orders of the court.
[46] There is also no reason to grant the mother exclusive possession of the Dundas Street property. She and the children live in the Ladner Street Property. There is no evidence that the father will not cooperate in the sale process.
Payment of the Mortgage from the Proceeds of Sale of the Dundas Street Property
[47] The court has the authority to make an order respecting the distribution of sale proceeds following the forced partition and sale of a jointly owned property (See Rule 66.03 of the Rules of Civil Procedure, Curtis v. Curtis 2019 ONSC 1527 and Atkinson v. White 2024 ONSC 3990, A.C.W.S 2302).
[48] The father is not agreeing to pay the mortgage on the Ladner Street Property despite his acknowledgement that the parties had a verbal agreement that he would do so and despite it being a joint debt.
[49] The mortgage is the joint responsibility of both parties. The father’s obligation is clearly set out in the guarantee.
[50] In this case, as in Atkinson v. White 2024 ONSC 3990, the father agreed to take on a responsibility for a joint debt and then failed to pay it. In this case the monthly mortgage payment is not specified; the father has agreed to pay $517 in child support. These two issues are not tied together as it relates to the issue of payment of the mortgage and even if they were his consent to now pay child support does not impact his responsibility to pay the joint debt.
[51] The mortgage is a debt of both parties. It was used to purchase the property that this court is ordering be sold and as such should be paid from the proceeds of sale of that property.
[52] It would be unfair and prejudicial to the mother if she were solely required to pay the mortgage.
Proceeds of Sale
[53] 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 ONSC 1000 (S.C.), at para. 8. However, when a party jointly owns a property, they are prima facie entitled to 50% of the net proceeds of sale: Creasey v. Chretien, at para. 56; Afshar v. Mahmoodi, 2016 ONSC 2875, at para. 31. If a party resists the release of funds under s. 12 of the Family Law Act, the party resisting the release of funds has the onus of showing why the funds should be preserved: Godfrey v. Godfrey, 2019 ONSC 3093, at para. 15; Afshar v. Mahmoodi, at para. 30.
[54] If the parties are not married, it is not s. 12 of the Family Law Act that applies but instead r. 66.03 of the Rules of Civil Procedure.
[55] Rule 66.03 states: 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. O. Reg. 396/91, s. 13.
[56] Justice Raikes in Curtis v. Curtis, 2019 ONSC 1527, at para. 41, dealt with the disbursement of funds under r. 66.03 and stated: In my view, the principles that apply to whether to order a sale apply with necessary modification to any order made regarding distribution of the proceeds of the sale; viz. there is a prima facie right to an order for distribution in accordance with the title holding which is subject to the exercise of the court’s discretion. The exercise of that discretion requires a contextual analysis on a case by case basis to determine whether the applicant has clean hands, whether there is oppression or hardship, whether the proceeding is vexatious and whether the moving party is using the Act to avoid contractual obligations.
[57] Justice Chown in Urness v. McDonald, 2022 ONSC 1697, 2002 CarswellOnt 3275, dealt with disbursement of funds pursuant to r. 66.03 at para. 60: “Where parties cannot agree on how much should be distributed from trust, courts will order an amount that is reasonable bearing all factors in mind including possible equalization payment”.
[58] I make no finding on the merits of this case. The evidence before me is incomplete, however, I find that on the evidence: (a) If none of the proceeds are disbursed, the father will suffer hardship as he will be unable to secure alternate accommodations; (b) If I accept the mother’s primary position it may give her an unfair advantage; and (c) The mother agrees, in the alternative, that 50% of the proceeds following the payment of the mortgage, real estate and legal fees related to the sale, can be disbursed to each party.
[59] In this case and in exercising my discretion, I find that it is appropriate that following the payment of the collateral mortgage and the real estate fees and legal fees associated with the sale of the Dundas Street Property the proceeds of sale be distributed equally between the parties.
[60] There is sufficient equity in the Ladner Street Property to satisfy the father’s claims. As a precaution, the court is ordering that the mother be required to give notice of any intention to sell or encumber the Ladner Street Property.
Court Orders:
[61] On consent, and on an interim without prejudice basis, the Applicant father shall pay to the Respondent mother child support in the sum of $517.00 per month based on an imputed income of $34,000 per annum commencing September 1, 2024 and on the first of each and every month thereafter for the children, Bavneet Sidhu born September 23, 2003 and Mannraj Sidhu born March 22, 2009.
[62] The jointly owned property, located at 47-350 Dundas Street, Cambridge, Ontario, legally described as Unit 86, Level 1, Waterloo Condominium Plan No. 638 and its Appurtenant Interest; Subject To and Together with Easements as set out in Schedule A as in Wr1110961; City of Cambridge (PIN 23638-0086 LT) and Unit 73, Level 1, Waterloo Standard Condominium Plan No. 638 and its Appurtenant Interest, Subject To and Together with Easements as set out in Schedule A as in WR1073994; City of Cambridge (PIN 23638-0073 LT), shall be immediately listed for sale and sold, pursuant to the Partition Act.
[63] While the Applicant father remains residing at the Dundas Street Property, he shall permit the attendance of the Respondent mother, real estate agents, prospective buyers, inspectors, and any other individuals who need to attend the Dundas Street Property for purposes of completing the sale. These individuals shall give the Applicant father 24 hours’ written notice of such attendance at the Dundas Street Property.
[64] Upon the sale of the Dundas Street Property, the sale proceeds shall be used to pay off the CIBC Mortgage/Charge registered on title to the property located at 67 Lardner Street, Cambridge, Ontario, legally described as Lot 135, Plan 58M-222, S/T Right of Entry As In LT96313 and closing costs, including realtor and lawyer fees. The remaining proceeds of the sale of the Dundas Street Property shall be disbursed equally between the parties.
[65] The Respondent mother shall provide the Applicant father with 120 days notice of any intention to sell or refinance the property located at 67 Lardner Street, Cambridge, Ontario, legally described as Lot 135, Plan 58M-222, S/T Right of Entry As In LT96313 Until 10 Yrs From Dec. 5, 2002; Cambridge on July 31, 2018 as Instrument No. WE1128829.
[66] The parties are strongly encouraged to resolve the issue of costs. If the parties are not able to resolve the issue of costs, the Respondent mother shall serve and file her written costs submissions by October 18, 2024. The Applicant father shall have until October 28, 2024, to serve and file his submissions as it relates to costs. The Respondent’s reply (if any) shall be served and filed by October 31, 2024. The narrative portion of costs submissions shall not exceed three pages, typed, and double spaced. Both parties shall submit bills of costs with their submissions directed to my attention by email to Kitchener.SCJJA@ontario.ca.
D. Piccoli J. Released: October 7, 2024