Ontario Superior Court of Justice

Court File No.: CV-23-37
Date: 2025/07/14

RE: Caralee Madelyn Paul (the Applicant)
AND
Jeffrey Dean Baker (the Respondent)

Before: Marc R. Labrosse
Counsel:
Kenneth Wise, for the Applicant
G. Edward Lloyd, for the Respondent

Heard: June 25, 2025

Reasons for Decision – Part 2: Expenses

Overview

[1] This Application was filed under the Partition Act, R.S.O. 1990, c. P.4, for the sale of the jointly owned property known municipally as 7 Main Street, Odessa, Ontario (the “Property”). The joint owners are the applicant, Caralee Madelyn Paul, and the respondent, Jeffrey Dean Baker.

[2] On January 15, 2025, I issued my Reasons for Decision which concluded that the applicant was properly entitled to the partition and sale of the Property as a result of her 50% joint ownership. My decision goes on to require that the parties deal with any adjustments to be made based on their contribution as co-owners with the respondent then having 30 days to obtain financing should the parties agree on the purchase price for the respondent to buy out the interest of the applicant.

[3] I have considered the parties’ respective positions on the issue of adjustments.

Applicant’s Position

[4] The applicant seeks for no adjustments to be made to the sale proceeds. She advances the notion of occupation rent but only to defend against a claim by the respondent for the reimbursement of some or all of his carrying costs related to his occupation of the premises. However, the applicant simply seeks an even split to the net proceeds of sale.

Respondent’s Position

[5] As for the respondent, he seeks in large part to be reimbursed for his share of the equity in the property in July 2018. He has arrived at a calculation that is based on an equivalent amount for the equity in the property when his sister was bought out, less the advance received on the mortgage back in 2018, plus his claim to his proportionate share of the total capital contribution, being the reduction in the mortgage.

Court’s Analysis

[6] I have made it clear throughout this proceeding that it was not up to the court to re-write the bargain entered into by the parties. I disagree with the respondent that he should be able to be repaid the value of his initial interest in the property less the mortgage advance of $18,737. There is nothing in the documentation between the parties that would allow him to get that amount off the top, prior to dividing the rest with the applicant, subject to certain adjustments for capital contribution. The deal was made between the parties in order to allow the respondent to keep his family home. His initial interest in the property was protected by his 50% ownership. The applicant brought her borrowing power and her security for the mortgage which was something that the applicant never had. She also made some contributions to the mortgage despite the fact that the respondent continued to reside in the premises on his own. However, it is not disputed that the respondent contributed more to the mortgage and expenses since 2018 while she was residing in the property.

[7] The respondent has been unable to point to any significant capital investment in the property. However, the applicant was not caused to make any future capital repairs or maintenance in the property, and I recognize that the respondent has made small amounts of improvements and maintenance to the property and notwithstanding that he was living there, he did not ask the applicant to contribute. I find the respondent’s position to be reimbursed for the applicant’s share of his expenses to be reasonable. However, he must share in the amount. The total claimed is $4,174.11 and I conclude that the applicant must reimburse half of that amount.

[8] In addition, the respondent was required to maintain the mortgage after the renewal period at a higher rate than if they had renewed the mortgage. This issue becomes more challenging to consider given the increase in mortgage rates and then their subsequent decrease over the past few years. Regardless, as a result of the parties’ inability to come to an agreement on even a short term renewal of the mortgage, the respondent was required to pay the overholding rate. I am of the view that this goes beyond the offset for occupation rent and that the parties should share equally in the increase in the annual interest payable since the mortgage expired. I trust that the parties can arrive at a reasonable amount but if not, I will decide the issue.

[9] Accordingly, I conclude that there are no significant capital expenditures that require adjustment between the two joint property owners. The respondent shall be reimbursed for half of his maintenance and repair costs and the parties shall share equally in the increase in mortgage and interest payments since the date the mortgage expired. Otherwise, the parties shall share equally in the net proceeds of sale.

Sale Process and Further Directions

[10] At this point the respondent shall have 30 days to attempt to negotiate a purchase price with the applicant to buy out her interest in the property. Should the parties fail to reach such an agreement the property shall be listed for sale and Justice Labrosse shall remain seized of the sale process with respect to the selection of an agent, listing price and required steps in order to ensure that the property can be properly sold. When disputes are brought back to Justice Labrosse for adjudication, the unsuccessful party shall be liable for the costs of such an appearance.

[11] As discussed with the parties at the hearing of this motion continuation, the respondent is to have 48 hours to match any agreement of purchase and sale that the applicant seeks to accept. It is likely that the most efficient way of doing so will be to have any offer remain open for acceptance for a sufficient amount of time to allow the respondent to confirm that he wishes to purchase the property on the same terms and conditions as the offer which is acceptable to the applicant. However, in the event of a dispute or allegations of wrongful conduct, the parties may re-attend before Justice Labrosse to resolve any disputes.

[12] The costs of these proceedings shall remain in the cause until the outstanding issues are finally resolved.

Marc R. Labrosse
Date: July 14, 2025