Brose v. Brose, 2025 ONSC 2858
Court File No.: FS-21-000741 (Stratford)
Date heard: April 1, 2025
Date released: May 13, 2025
Ontario Superior Court of Justice
Between:
Heather Lynne Brose, Applicant
– and –
Timothy Ernest Brose, Respondent
Appearances:
Kathryn M. Ritsma, for the Applicant
Patrick Di Monte, for the Respondent
Before: Jasminka Kalajdzic
Endorsement
[1] The Applicant, Heather Lynne Brose, has brought this motion seeking three orders. First, she asks for partition and sale of the matrimonial home that sits on a jointly-owned 100-acre farm located at 1983 Line 45, Gads Hill, Ontario (the “Property”). She seeks $900,000 from the proceeds of the sale to be paid to her as an advance on her equalization payment so that she can purchase a home, and for the balance to be held in trust.
[2] Second, the Applicant requests an order compelling the Respondent to provide extensive financial disclosure by a fixed date, failing which his pleadings shall be struck. She seeks this interim relief in the context of her Application for a divorce, spousal support and equalization of net family property.
[3] Finally, the Applicant seeks leave to amend her Application to plead s. 3 of the Partition Act, R.S.O. 1990, c. P.4.
[4] The Respondent, Timothy Brose, resists the motion for partition and sale on three bases. First, he argues that he and the Applicant formed a partnership in the farming business and that the Property is an asset of the partnership, which cannot be sold. Relatedly, he submits that he and the Applicant had a verbal agreement the Property would never be sold on the open market. Second, he submits that the sale of the property would cause the parties’ son hardship. Finally, he states that there is no need to sell the Property on the open market because he is willing to buy her interest through one of his companies and that doing so will save them capital gains tax and a real estate commission.
[5] The Respondent does not dispute that he must comply with his disclosure obligations but claims he needs until September 30, 2025 at the earliest to do so.
[6] Lastly, he does not object to the request for leave to amend the Application and states that he intends to file an amended Answer in which he will plead a verbal agreement with the Applicant that the Property would not be sold.
[7] For the reasons that follow, I grant the Applicant’s motion for partition and sale but order that the sale be stayed for a period of four months. I also order the Respondent to produce the financial documents listed at Schedule “A” to this order by July 15, 2025, failing which the Applicant may move to strike his Answer. Finally, I grant leave to amend the Application and the Answer.
Background: Facts
[8] The parties began living together in 1990, were married in August 1997, and separated in February 2021. They have two adult children. Their 32-year-old son who is a recovering addict does not live independently. He is currently living on the Property with the Respondent.
[9] In 2003, the parties purchased a 100-acre farm in Gads Hill, Ontario. It is registered in both parties’ names. The Respondent sharecrops this land with a third party. He does not personally run the farm. His main source of income throughout the parties’ relationship was his accounting business.
[10] The Respondent is an accountant. In 2015, he sold his accounting business to MNP with a pay-out spread over ten years. The pay-out agreement has not been disclosed. He continues to prepare tax returns for a living.
[11] The Respondent has interests in seven closely held companies, including a company that receives large annual amounts from MNP.
[12] The income from the sharecropping operation is reported equally on the Applicant’s and the Respondent’s income tax returns each year.
[13] After separation, the Applicant moved out of the matrimonial home located on the Property and into rental accommodations. The Respondent has remained in the matrimonial home.
[14] The Respondent closed the Applicant’s access to his bank accounts following separation. After some negotiation, he agreed to pay the Applicant $6,000 a month.
[15] According to the Form 13.1 filed by the Respondent in October 2021, his net family property value is $2,474,568, not including the value of the Property.
[16] The Property was valued at $2,850,000 in March 2024, but the Respondent is prepared to accept an earlier valuation of $2,955,000. There is a very small mortgage registered on title. The Applicant believes that the Property is the largest asset to be equalized.
[17] On this motion, the Respondent submitted that the total value of the parties’ assets is between $5,400,000 and $6,000,000.
Background: Litigation History
[18] The Applicant commenced this proceeding in June 2021. Very little progress has been made to date.
[19] Following the first case conference in this matter on February 8, 2022, the Respondent was ordered to produce his 2019 and 2020 notices of assessment and 2021 tax return. Under the same order, he was required to disclose year-end financial statements for his seven companies up to and including 2021. To date, this disclosure has not been made.
[20] In early 2023, the Respondent’s former counsel sent numerous financial documents (spreadsheets and reports without supporting documentation) to the Applicant. The documents were generated from the Respondent’s own internal accounting software, the accuracy and completeness of which, according to the Applicant’s accountant, could not be verified.
[21] Shortly before the settlement conference that was held on November 22, 2024, the Respondent’s lawyer obtained an order removing himself from the record. The Respondent attended the conference with Mr. Di Monte, who is now his lawyer of record. At the settlement conference, Leach J. made an order requiring that the Respondent provide full financial disclosure by January 15, 2025. The disclosure list is attached at Schedule A.
[22] There is no dispute that the Respondent has not complied with the disclosure order. The Respondent states that due to a change in personnel and bookkeepers, he needs until at least the fall to compile the material.
Law and Analysis
[23] The three issues to be decided are as follows:
a. Is an order for partition and sale of the matrimonial property appropriate in all the circumstances?
b. Should a disclosure order be made against the Respondent, and if so, on what terms?
c. Should leave be granted to amend the Application?
[24] Because the issue of amendment of the Application must be determined before I decide the partition application, I will address the pleadings issue first.
Leave to Amend Application
[25] The day before the hearing of the motion, the Respondent late-filed his responding affidavit and factum. For the first time, the Respondent raised an objection that the Applicant could not advance her claim for partition and sale because she did not check the box for sale of family property on her Application, nor did she plead the Partition Act.
[26] The Applicant sought leave to amend her Application at the outset of the motion and submitted that the Respondent suffered no prejudice because it was made clear, at the latest, by the November 2024 settlement conference that the Applicant was seeking a sale of the Property. In addition, in her original Application, she claimed an order “providing for the sale of any jointly owned assets in the parties’ joint names in the event that the parties cannot resolve equalization of net family property.”
[27] At this point, four years after the Application was commenced, the parties have not resolved equalization of net family property and the order sought on this motion accords with the relief explicitly claimed in the Application.
[28] Respondent’s counsel did not point me to any case where the court held that an applicant was not entitled to this statutory order because the Partition Act was not pleaded in the Application. I find that there is no prejudice to the Respondent in granting leave to amend the Application to specifically plead reliance on the Partition Act. I also grant leave to the Respondent to file an Amended Answer within 30 days of service of the Amended Application.
Partition and Sale
[29] All tenants of any land in Ontario may be compelled to make or suffer partition or sale of the land per s. 2 of the Partition Act.
[30] If the property in question is not a matrimonial home, there is a narrow standard for the exercise of the court’s discretion to refuse the prima facie right of a joint owner to partition and sale. The standard for exercise of that discretion is the existence of malicious, vexatious, or oppressive conduct by the party seeking the partition: Latcham v. Latcham, para 2.
[31] The Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), does not displace the Partition Act. The Ontario Court of Appeal in Silva v. Silva, dealt with the interplay between the Partition Act and the FLA. The court stated that an application under s. 2 of the Partition Act should not proceed if it can be shown that it would prejudice the rights of either spouse under the FLA. The burden of proof rests with the party alleging such prejudice and opposing the application: Brohman v. Brohman, 2025 ONSC 1667, paras 16-18.
[32] 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. The court must consider the impact of a proposed sale on children or a vulnerable spouse: Delongte v. Delongte, 2019 ONSC 6954.
[33] An order directing the sale of a matrimonial home before trial should only be made in cases where, in all the circumstances, such an order is appropriate. Orders for the sale of a matrimonial home made before the resolution of FLA issues (particularly the determination of the equalization payment) should not be made as a matter of course: Martin v. Martin.
[34] Applying these legal principles to the case before me, I find as follows:
a. There is no evidence that the Applicant’s request for the immediate sale of the Property is motivated by vexatious, oppressive, or vindictive conduct.
b. The Respondent wants to remain on the Property and buy the Applicant’s interest in it. As the Divisional Court recently found in Brohman, at para. 17, the sale of a matrimonial home does not prejudice a party’s claim to retain possession. The Respondent can bid for the Property in the open market.
c. While the case law refers to the impact of a sale on children of the marriage, the parties’ 32-year-old son is not a child. The Respondent filed no evidence that he would be unable to find alternative housing for himself and his son. He states that the sale will cause his son hardship because he is happy at the farm and has a purpose there, but that generic statement without more is insufficient to displace the Applicant’s prima facie right to a sale under s. 2 of the Partition Act. On this point, the case is on all fours with Chaudry v. Chaudry, 2012 ONSC 2149, para 20, where the court ordered partition and sale notwithstanding the argument that the parties’ 33-year-old son with schizophrenia was “better off” staying in the matrimonial home.
d. I am not satisfied that the tax treatment of a sale to a third party constitutes prejudice for the purposes of the FLA. There is scant evidence that a sale to a company owned by the Respondent will be superior from a capital gains perspective than selling to another third party. In any event, the Respondent’s company may bid on the Property when it is open for tender and thus realize any tax benefits.
e. The only other prejudice advanced by the Respondent is that he and the Applicant had a verbal agreement to retain the Property. He claims that they have a partnership, but he filed no evidence in support of this claim, and he concedes that there is no partnership agreement. Even if I accepted that the parties were in a partnership, the inevitable result is that the partnership will be declared dissolved. The normal remedy in such circumstances is to order a liquidation of the partnership assets: 2057552 Ontario Inc. v. Dick, 2016 ONSC 329, para 18.
f. The Respondent submits that there is no prejudice to either party in waiting until financial disclosure is complete. I reject this argument. That is not the legal test under s. 2 of the Partition Act. He has the burden of proving prejudice to his rights under the FLA. He has not done so. Moreover, the Applicant has lived in rental accommodations for four years because she does not have funds to purchase a home while the Respondent lives in the matrimonial home. The four-year delay to date has been caused mainly by the Respondent’s lack of disclosure. He has not met court-imposed deadlines for disclosure. Under the circumstances, it is not fair that he holds the Property “hostage”: Brohman, at para. 18, citing Silva, at pp. 445-446.
g. There is no advantage to waiting until trial. Because the Respondent has not disclosed his companies’ financial statements, there is no assurance that the money he proposes to use to buy the Respondent’s interest in the Property will not deplete the funds needed to equalize her share of the family assets. The circumstances of the parties are such that a sale is the inevitable result at trial, and there is little justification for delaying it: Zargar v. Zarrabian, 2016 ONSC 2900.
[35] As a result, I find that partition and sale will not result in prejudice to a legitimate family law claim. I grant the order, but it will be stayed for a period of four months (until September 15, 2025) to give the Respondent time to find alternate housing or for the parties to negotiate the Respondent’s purchase of the Applicant’s interest in the Property.
[36] The Applicant seeks an order that the Property be sold by way of a tender process and that her counsel’s law firm (specifically Matthew Orchard or Andrew Phillips) be in charge of the tender process.
[37] Unless the Respondent agrees to this appointment, I am not prepared to appoint the Applicant’s counsel’s own firm to be in charge of the sale. The Respondent would not be faulted for viewing this process with scepticism. There is the appearance of a conflict of interest. A different firm in Stratford shall be appointed to maximize the price and obtain the most advantageous closing date. If the parties cannot agree on the identity of the firm, they may return to court for directions.
[38] Finally, I agree that the Applicant should receive $900,000 from the proceeds of the sale. The Respondent did not dispute that this amount was reasonable for the purposes of buying a home. The balance of the proceeds of sale shall be held in trust by the law firm appointed to oversee the sale until further order of this court or agreement of the parties.
Disclosure
[39] The Respondent does not dispute that he did not meet the January 15, 2025 deadline imposed by Leach J. for the production of financial statements, tax returns and other financial disclosure. He states that his previous lawyer had a lot of material but that it was not in the best form. He further states that the spring is the busiest time for his accounting business, and, according to his counsel at the motion, it is “the wrong time of the year to put aside his work and deal with disclosure.”
[40] The Respondent’s disclosure obligations have been outstanding since the first case conference in February 2022. He has known since that time that full financial disclosure was needed to properly resolve the Application. Financial reports generated from his own accounting software were disclosed in 2022, but no formal financial statements were delivered, and the information provided was insufficient for the Applicant’s accountant to do a proper analysis. The Respondent is himself an accountant and should understand that a ‘document dump’ of internal reports without supporting documentation does not constitute proper financial disclosure.
[41] The Respondent must prioritize this litigation and comply with his legal duties. I order that he produce the documents listed in Schedule A by July 15, 2025, failing which the Applicant may move for an order striking his Answer.
Order and Costs
[42] The court orders that:
a. The Applicant is granted leave to file an Amended Application within 14 days of this endorsement. The Respondent is granted leave to file an Amended Answer within 30 days of receipt of the Amended Application;
b. The parties shall sell the Property, no earlier than September 15, 2025, by tender process to be conducted by a law firm in Stratford of their choosing, and all terms of the tender are to be determined by the appointed law firm to maximize the price and obtain the most advantageous closing date relating to the sale;
c. If the parties cannot agree on the law firm, they shall move for directions from the court;
d. The appointed law firm shall have the discretion to accept a bid by tender or to determine that a reasonable tender bid has not been received;
e. If the parties fail to receive a reasonable bid by tender, the Property shall be sold by auction to be arranged by the appointed law firm on terms to be set by the appointed law firm, including the minimum bid;
f. Upon the closing of the successful sale of the Property, the sum of $900,000 shall be paid to the Applicant as an advance on her equalization payment;
g. The balance of the net proceeds from the sale of the Property shall be held in trust by the appointed law firm until further court order or written agreement of the parties; and
h. The Respondent shall provide the disclosure set out in Schedule A to this endorsement on or before July 15, 2025, failing which the Applicant may move for an order striking the Respondent’s Answer.
[43] If the parties cannot agree on costs, the Applicant may file written submissions of no more than five, double-spaced pages and a Bill of Costs by May 30, 2025. The Respondent may file his submissions 14 days after receipt of the Applicant’s material.
Schedule “A”
In accordance with Order of Justice Leach, November 22, 2024
Disclosure Required from Respondent Husband
(i) Personal income tax returns and Notices of Assessment for Timothy Brose: 2020, 2021, 2022 and 2023
(ii) Financial Statements, inclusive of Balance Sheets and Income Statements for 2021, 2022 and 2023 for:
a. Tim Brose Professional Corporation;
b. Tim Brose 2012 Professional Corporation;
c. Ernest Henderson Corporation;
d. Brose Holdings Inc.
(iii) Mortgage documents, including legal description and Parcel Registers for any mortgages held by any corporate entity controlled by the Respondent.
(iv) Contact information for the mortgagors set out in (iii)
(v) Investment statements from IG Wealth for any personal investments or corporate assets as close to February 13, 2021 as possible and current statements as of September 30, 2024 for all of these investments / assets.
(vi) RESP Statement as of September 30, 2024 at Franklin Templeton (Assante)
(vii) Investia Financial Services - Investment Statement as of September 30, 2024, or as close to that date as possible, and as of February 13, 2021 (currently we have statements as of December 31, 2019)
(viii) Dynamic Funds Statement as close to September 30, 2024 and February 13, 2021 as possible (we have December, 2018)
(ix) Hollingworth Portfolio Statement of RRSP - as of February 13, 2021 and as of October 31, 2024.
(x) All corporate Income Tax Returns and Notices of Assessment for all corporations controlled by Tim Brose for 2022 and 2023.
(xi) Copies of the buyout Agreement between MNP Accounting Corporation and Timothy Brose’s accounting corporation, and a history of the yearly payments received by the Respondent’s Professional Corporation since the purchase was made by MNP.
Released: May 13, 2025
Jasminka Kalajdzic