Endorsement
Court File No.: CV-24-00720837-00ES
Date: 2025-05-01
Ontario Superior Court of Justice
Between:
Somayeh Khosravi, Applicant
– and –
Aliasghar Mohammadi and Kobra Valizadeh, Respondents
Appearances:
Esmaeil Mehrabi, for the Applicant
Ayaz Mehdi, for the Respondents
Heard: May 1, 2025
Before: Anna Papageorgiou
Overview
1The Applicant's common law spouse, Mahdyar Mohammadi (the “Deceased"), passed away unexpectedly on November 9, 2023, at the age of 48 years old. After he passed away, the Applicant could not find a will and submitted an application for a Certificate of Appointment of Estate Trustee Without a Will.
2The Deceased’s next closest of kin are the Respondents, who are his parents. He also had a brother and sister.
3The Applicant and the Respondents are equal beneficiaries under the Deceased’s estate (the “Estate”).
4The Respondents objected to the probate application.
5The Applicant then issued this Application seeking directions from the Court, appointment of an Estate Trustee During Litigation (“ETDL”), and partition and sale of the property located at 18 Frank Kelly Drive, Holland Landing (the “Property”). After a case conference, David Mills was appointed the ETDL.
6The Applicant brings a motion within the Application for partition and sale of the Property, that 50% of the proceeds be released to her and that any remaining funds after payment of all sale costs be paid into court pending disposition of the Application. She also seeks an order reimbursing her for 50% of the carrying costs she paid. She also paid the administrative costs and funeral costs and seeks reimbursement.
7The ETDL attended at the motion and did not oppose the motion.
8The Respondents do not oppose the motion for sale. They do oppose the release of 50% of the net proceeds to the Applicant and any payment to her for carrying costs or funeral expenses. They say that only 25% should be released to her.
Decision
9For the reasons that follow, I grant the motion.
Issues
- Issue 1: Should partition and sale be ordered?
- Issue 2: Should 50% of the proceeds be distributed to the Applicant when the Property is sold?
- Issue 3: Is the Applicant entitled to be reimbursed for funeral costs and 50% of the carrying costs she has paid?
Analysis
Issue 1: Should partition and sale be ordered?
10The answer is a clear “yes”.
11Pursuant to r. 66.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, any joint tenant or tenant in common may bring a motion for partition and sale.
12The Applicant says that she and the Deceased began living together in 2020. They decided to buy a home to raise a family and purchased the Property, which is held as tenants in common as to 50%. The property was purchased for $1,215,000.
13She says that they intended that the Property should be held as joint tenants. She only discovered the error that the Property was registered as tenants in common after she began dealing with the Deceased’s affairs after his death.
14The Application is about the Applicant receiving 100% of the Property, but there is no issue that she holds 50% of it. The Respondents admit that she owns the Property as to 50%.
15There is no opposition to partition and sale of the Property. Therefore, I grant the order.
Issue 2: Should 50% of the proceeds be distributed to the Applicant when the Property is sold?
16Rule 66.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states as follows:
Proceeds of Sale
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.
17There 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 on a case-by-case basis. Additionally, this Court has broad discretion in making orders upon partition and sale of a Property, which includes the discretion to make all allowances and give such directions as will result in equity to the parties: Suave v. Davidson, 2024 ONSC 2091, para 30; Mammoliti v. Smutniak, 2022 ONSC 6461, para 44; Sidhu v. Kaur, 2024 ONSC 6008, paras 56-57.
18Factors that courts have considered in the exercise of the discretion include whether the applicant has clean hands, whether there is oppression or hardship, whether the proceeding is vexatious or whether the applicant is using the proceeding to avoid contractual obligations: Mammoliti at para 44.
19The Respondents argue that the funds should be held back and paid into court for the following reasons, all of which I reject.
Denial of Common Law Relationship
20The Respondents deny the common law relationship between the Applicant and the Deceased, but this is not a reason to deny distribution of the 50% to the Applicant because she is a 50% titled owner. In fact, the Respondents do not even challenge this. Paragraph 1 of their factum specifically asserts that the Applicant owns 50% of the Property as a tenant in common.
21The Applicant’s share is not dependent on the common law relationship. In any event, there is evidence to support what she says about their relationship. There is email correspondence that describes the Applicant and Deceased as fiancées. As well, the Applicant became pregnant in the Fall of 2020. She had medical complications and the pregnancy did not proceed but the parties were seeking fertility treatments. There is documentary support for this as well. The Applicant provided pictures of the Respondents who attended at the Deceased and Applicant’s home for a religious holiday.
22The Respondents taking the position that the Applicant was not a common law spouse in the circumstances raises credibility issues about all of their evidence, although as I will outline, the credibility issues do not impact the Applicant’s claim in this matter in any event.
Vulnerability of the Deceased
23They say that the Deceased was a vulnerable individual and that the Applicant took advantage of him. This is not supported. The evidence shows that the Deceased was a sophisticated businessman who operated a number of businesses. In any event, it is not clear how this allegation would impact the Applicant’s claim to 50% of the proceeds of sale as 50% titled owner, which she is at a minimum.
Alleged Loan to the Applicant
24They also say that they loaned money to the Applicant to assist with the purchase of the Property. However, there is no evidence to support this apart from their bald allegation. The Applicant has shown, with significant documentary support, that she paid $170,000 of the total $270,000 downpayment.
25In their affidavit the Respondents said that the Applicant “borrowed an amount of $111,650.00 from us for the downpayment of the property, which was paid from our company—2604312 Ontario’s account.” They attached as an exhibit a copy of a cheque in support of this, but the cheque they produced was actually a cheque written by the Applicant to 2604312 Ontario Inc. The Applicant says that she had written the cheque to use it to pay the real estate lawyer for the closing. She left the payable to portion blank and the cheque was mixed in with her belongings. She says that she believes the Respondent then took this cheque when they removed their belongings and inserted the payable portion of the cheque being to 2604312 Ontario’s account. There is evidence that supports the Applicant here.
26First, a cheque written by the Applicant to the numbered company does not support the existence of a loan from the numbered company. Notably, the date of the cheque was just days prior to the closing and it would have made no sense for the Applicant to write this cheque at this time.
27Second, when the Respondents were cross-examined, they suddenly changed their evidence to say that the loan did not come from the numbered company but from cash savings. However, they did not provide any evidence that would support a loan from their cash savings.
28They also allege that they loaned the Applicant $118,149.31 for the basement renovation. They provided a bank statement in support. There is no explanation as to what on the bank statement relates to this $118,149.31 and no reference to anything on that statement tying any amount to the Applicant. They also provided photocopies of cheques, one to the Receiver General in the amount of $5,000 and one that appears to be to the Applicant in the amount of $3,149.31 which does say that it was for the basement renovation. They provided no support that there were any significant renovations which the Applicant says were minor.
29In any event, even if this is true and the Respondents loaned the Applicant any money, then the Respondents may have a claim against the Applicant in respect of an alleged debt. They have not even sued the Applicant. I agree that refusing to pay out her portion of the proceeds of a Property to which she is a titled owner is tantamount to an order under r. 45.02 for a preservation of funds. I also agree that refusing to release the proceeds to the Applicant and payment into court would amount to execution before judgment: Tarling Estate (Re), para 12.
30In Aetna Financial Services v. Feigelman, para 8, the Supreme Court clarified that execution before judgment includes judicial orders impounding assets or otherwise restricting the rights of a party without a trial. The Respondents’ position is essentially that they are owed a debt and that the Applicant is required to provide security until that claim is litigated and decided.
31They have not made any trust claim against the Property by virtue of their alleged loans. Their claim is for repayment of a debt. I do not see how this would be any different than one of the Applicant’s unsecured creditors coming along and arguing that she should not receive her distribution until their claims are litigated and decided.
32They have brought no motion pursuant to r. 45.02, they have not set out the test, nor have they led evidence that would satisfy the existing test which includes consideration of whether there is a claim to a specific fund, a serious issue to be tried and whether the balance of convenience favours the relief.
Alleged Loans to the Deceased
33The Respondents also claim that they loaned the Deceased funds in the amount of $100,000. Even if they prove that the Deceased owed them funds, this would not impact the Applicant’s entitlement to 50% of the proceeds as a 50% titled owner. The Respondents’ claim for anything they loaned the Deceased is against the Estate and will be as against the Estate’s assets. Based upon the title, the Estate only has a 50% interest in the Property, at the maximum. Fifty per cent of the proceeds will be held back and they can assert their claim to the $100,000 as against any funds remaining after payment of the Estate’s debts etc.
Their Personal Belongings
34They baldly say that their personal belongings are held at the Property. Some of this property is described only as “business documents and equipment.” They also say that the Applicant has withheld Persian rugs and other furniture that belongs to them. They provided photographs but no documents to prove ownership or value. When cross-examined, they gave conflicting evidence regarding the furniture. The Applicant denies their ownership of these items.
35The evidence in support of this claim is bald and questionable. The Applicant has provided photos showing the Respondents removing their belongings when they were removed from the Property.
Probate Costs
36They say funds should be held back to cover probate. Again, this has no bearing on the Applicant’s claim to 50% of the proceeds as the 50% title owner which she is at a minimum. Probate costs are something paid by the Estate with Estate assets, which does not include the Applicant’s 50%: Estate Administration Act, R.S.O. 1990, c. E.22.
Occupation Rent
37The Respondents have no standing as beneficiaries of the Estate to make a claim for occupation rent against the Applicant. As set out by Justice Smith in the case of Rizzo v. Farruggia, 2024 ONSC 4615, para 22: "the law relating to occupation rent makes it plain that a claim for same must be made by a joint owner of the property in question." The Respondents’ interest is in the residue of the Estate. They have no property interest in the Property.
38In their factum, the Respondents even admit that as beneficiaries, they cannot make trust claims on behalf of the Estate.
Factors in Favour of Distribution
39Relevant factors in favour of the distribution to the Applicant are as follows:
40The Applicant suffered emotional distress following the Deceased’s unexpected passing. As a result, she was on leave of absence from her place of employment starting November 2023 and was completely disabled since mid-May 2024. The Applicant received a reduced income while on long-term disability and started a gradual return to work. However, since the Applicant is on medication and adjusting her health condition, the return to regular work hours and previous function was not guaranteed and depended on her health condition; as such, the Applicant's income remained reduced.
41In order to meet the monthly payment obligations of the Property, the Applicant was required to borrow money from family members and also use some of her savings' funds; however, it is no longer feasible to keep relying on the assistance of her family as their budgets are limited and the Applicant will ultimately be left with a significant debt to repay them.
42The evidence does not support the conclusion that the Applicant does not come to court with clean hands.
The Respondents Have No Standing
43In any event, I agree that the Respondents have no standing to challenge or seek directions under the Partition Act, R.S.O. 1990, c. P.4. Section 3 of the Partition Act says it applies to “any person interested in land in Ontario.”
44In Di Michele v. Di Michele, 2014 ONCA 261, paras 78-80, 104-105, the Court of Appeal confirmed that s. 3 should be interpreted to apply "only [to] those entitled to immediate possession of the property". The Respondents are merely beneficiaries who are entitled to the residue of the Deceased's Estate. They are not entitled to "immediate possession" of any property that forms part of the Estate. As such, they do not have standing to seek relief on the sale of the Property preventing the Applicant from receiving distribution in accordance with her title holding.
45Even though there are credibility issues related to the status of the relationship between the Applicant and the Deceased and the issue of the various loans alleged, these credibility issues are not relevant because they do not impact the Applicant’s entitlement to her 50% share of the proceeds as 50% titled owner. The cases referenced by the Respondents were cases involving equalization, which this is not: Ierullo v. Ierullo; Markpeace v. Brenninkmeyer, 2024 ONSC 1405; Denissov v. Trubyuk, 2023 ONSC 6184.
46The Respondents have not raised any compelling arguments to prevent the distribution to the Applicant of her 50% share as 50% titled owner. Their arguments fail in law and are not even compelling or sufficiently supported factually.
47The ETDL was present and agreed that there was no basis for the Estate to assert any claim to a co-owner’s 50% of the proceeds of sale.
48Therefore, I exercise my discretion to order the distribution of 50% of the proceeds of sale to the Applicant upon sale.
Issue 3: Is the Applicant entitled to be reimbursed for funeral costs and 50% of the carrying costs she has paid?
49Section 5 of the Estate Administration Act, R.S.O. 1990, c. E.22 provides as follows:
Payment of debts out of residuary estate
5 Subject to section 32 of the Succession Law Reform Act, R.S.O. 1990, c. S.26, the real and personal property of a deceased person comprised in a residuary devise or bequest, except so far as a contrary intention appears from the person's will or any codicil thereto, is applicable rateably, according to their respective values, to the payment of his or her debts, funeral and testamentary expenses and the cost and expenses of administration.
50The Applicant should be reimbursed the costs she has expended as follows:
- $4,622.05 in funeral costs
- 50% of the $28,518.44 she has paid from November 9, 2023 to June 17, 2024 for the mortgage, property tax, and home insurance payments.
51The Applicant received rental income from the basement apartment in the amount of $16,545.65 during this period as well and the expenses recovered should be net of 50% of this amount.
52The total amount is thus $10,608.44 [(28,518.44 x .5) + (4,622.05 x .5) – (16,545.65 x .5) = $10,608.44].
53I reject the argument that she cannot be reimbursed because she has been living there and could have sold the Property sooner. First, she has not claimed the utility costs. All other costs that she paid would have been incurred whether the Applicant lived at the Property or not. Second, the reason why there was delay in the sale of the Property was that the Respondents objected to the Applicant being appointed trustee, it took time to appoint the ETDL and then after the ETDL was appointed, the Respondents still objected to the distribution of the funds to the Applicant which then necessitated this motion.
Costs
54The Applicant seeks costs on a partial indemnity basis in the amount of $22,860.38 pursuant to a filed Bill of Costs. She seeks $7,500 from the Estate as the motion would have been necessary in any event, and the balance from the Respondents.
55The ETDL did not oppose this.
56The Respondents did not provide a Bill of Costs but estimate their costs to be $11,000 plus disbursements. They say that the costs should be limited to $5,000 because as a beneficiary the Property should have been placed for sale in October when the ETDL was appointed. As well, they made an offer to settle that the Applicant could be paid 25% of the proceeds.
57I am satisfied that the Applicant took reasonable steps to move this forward as quickly as possible. There were delays in obtaining a date and then a February date had to be adjourned because there was no judge available.
58The work was significant, the matter had a medium complexity and it was important to the Applicant because of her current situation. The rates and time spent was reasonable and the amount claimed is within the reasonable contemplation of the Respondents.
Conclusion
59I grant an order for partition and sale, that the Applicant be paid 50% of the proceeds of sale as well as her carrying costs in the amount of $10,608.44.
Anna Papageorgiou
Released: May 1, 2025