ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MARTHA ANN REID ) Hailey Abramsky and Max Samuels, for the )Applicant
Applicant )
– and – ) Maija Pluto, for the Respondent
DAVID FREDERICK MAYNARD )
Respondent )
) HEARD: November 26, 2024
REASONS FOR DECISION
LEIPER J.
Introduction and Background
1Martha Ann Reid (“Martha”) and her brother David Frederick Maynard (“David”) own the better part of Timmerman’s Island in Bob’s Lake which is in Eastern Ontario (the “Property”).1
2Martha seeks an order pursuant to the Partition Act, R.S.O. 1990, c. P.4, for an order vesting title in her share of the Property as identified in her material, and a declaration that any such relief is subject to the Planning Act, R.S.O. 1990 c. P.13. She seeks to partition 9.1 hectares of the 52 hectare Property on Timmerman’s Island, which is 17.5 % of the overall hectarage and a proportionate share of the mainland parking area, that would yield her two parking spaces.
3There are two cottages on the Property. The original cottage was constructed by the parents of the parties. Over the years, the family renovated and added on to the original cottage. In 1984, Martha built a second cottage on the Property, completing that construction in 1989. She paid for that with her own funds, and with a monetary gift from her father.
4Since building the second cottage, Martha has only used the second cottage. She and David do not pay for any maintenance or improvements costs relative to each other’s cottages. They each use a separate dock. Martha contributes to the property taxes and hydro in proportion to her ownership share of the Property.
5David, his family and friends, and more recently, short-term renters, use the original cottage. David has not involved Martha in the administration, insurance, costs or profits achieved from renting out the original cottage.
The Bob’s Lake Agreement
6In 1978, David and Martha’s parents chose to transfer their property interest to their eight children. As part of the transfer, the siblings signed an agreement, known as the “Bob’s Lake Agreement” (the “Agreement”) which was to govern how they would manage and deal with the Property.
7Over the years, the other siblings transferred their interest to David. Recently, David transferred an interest to his spouse, Vanessa which is permitted by the Agreement.
8Martha and David and Vanessa hold their property interests as tenants in common. The result is that Martha owns a 17.5 per cent interest, and David and Vanessa own an 82.5 per cent interest in the Property.
9The Agreement provided for a 50 year less a day lease to Martha and David’s parents. The lease expired on the death of their mother, Anna Patricia Maynard in June of 2021. The Agreement sets out detailed rules as to the use and management of the Property.
10Paragraphs 2 to 8 of the Agreement contain terms with respect to the use and management of the Property, and to a dispute resolution mechanism by way of arbitration for any matters described in paragraph 6.
11Paragraph 22 of the Agreement limits the ability of the parties to transfer or otherwise deal with their property interests, without the consent of the other parties.
12While the Agreement does contemplate transfers by a party to their children or to a spouse, the Agreement requires any such transferee to agree to also be bound by it.
The Legal Framework: The Law of Partition
13Pursuant to ss. 2 and 3 of the Partition Act, all joint tenants or tenants in common and all parties interested in any land in Ontario may be compelled to make partition or sale of land, or any part of lands of a legal or equitable estate.
14The Partition Act provides a prima facie right to a joint tenant or tenant in common to partition or sale of lands. The court should compel such partition or sale if no sufficient reason appears why such an order should not be made: Davis v. Davis, 1953 CanLII 148 (ON CA), [1954] 1 D.L.R. 827 (C.A.), at p. 830.
15The discretion to refuse partition should only be exercised in circumstances of malice, oppression, or where it is being brought out of a vexatious intent: Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2004), 2004 CanLII 48652 (ON CA), 75 O.R. (3d) 478 (C.A.), at para. 1, and Latcham v. Latcham (2002), 2002 CanLII 44960 (ON CA), 27 R.F.L. (5th) 358 (Ont. C.A.); McGeer v. Green (1960), 1960 CanLII 345 (BC SC), 22 D.L.R. (2d) 775 at p. 799 (B.C.).
16Oppressive conduct can refer to a financial impact but non-binding case law suggests that such financial impact should be significant to be considered “oppressive”: Korolew v. Korolew, 1972 CanLII 1894 (B.C.S.C.), at p. 165.
17The case law places the onus generally on the party who resists the sale to show prejudice. Any hardship occasioned by partition must rise to the level of being oppressive: Greenbanktree at para. 2.
The Issues on the Application
18These are the issues raised by the Application:
i. Does the Bob’s Lake Agreement oust the court’s jurisdiction to order partition?
ii. Should the partition application be denied because it is contrary to the Agreement and the historic and intended use of the Property?
iii. Has David shown that the request for partition is motivated by malice or spite or is otherwise oppressive?
iv. Does the Planning Act prevent making an order for partition?
Analysis
Does the Bob’s Lake Agreement Oust the Court’s Jurisdiction to Order Partition?
19David submits that the arbitration paragraph in the Agreement ousts the court’s jurisdiction to order arbitration. He submits that the Application is premature and should await arbitration.
20I disagree. Martha negotiated with David to try and obtain his consent to partition. She issued this Application on May 8, 2023. The arbitration provisions in the Agreement refer to a reference to an arbitrator within 15 days of a meeting at which the parties could not agree. David’s affidavit, sworn March 10, 2024 does not refer to efforts by either party to pursue arbitration, rather, it describes the history of the property and responds to the substance of Martha’s partition application. Counsel for David raised the issue of the arbitration clause during cross-examination on Martha’s affidavit on July 30, 2024, and in the factum filed for the hearing of the Application.
21Delay and attorning to the jurisdiction of the court are valid reasons for declining to grant a stay in preference for arbitration: 6 Hoya Lens Canada Inc v 2364141 Ontario Inc, 2018 ONSC 4338 at paras. 22-25.
22David has attorned to the jurisdiction of the court by filing material and participating in the Application. He filed an affidavit in response to the substance of the Application. The hearing was adjourned once on the consent of the parties to explore a mutually beneficial resolution. This did not happen. I conclude that the time and expense devoted by the parties to resolving this dispute in court should not be wasted. I decline to grant a stay of these proceedings to require arbitration.
Should the partition application be denied because it is contrary to the Agreement and the historic and intended use of the Property?
23David submits no order for partition should be made in accordance with the Agreement. In particular, he submits that paragraph 22 of the Agreement should be given effect which reads:
Except as provided by this agreement, no party shall sell, transfer, assign, mortgage, charge, pledge or in any way dispose of or encumber or deal with his ownership interest in the Property without the unanimous consent of the other parties to the agreement.
24The parties agree that the Agreement was intended to formalize their parents’ intention to keep the Property in the family as a long enjoyed vacation property. I agree with David’s submission that it is relevant to the issues on this Application.
25David relies on a line of cases for the proposition that partition or sale will not be ordered where such an order would conflict with an agreement between the parties concerning the property in question.
26Each of these cases rises and falls on their own facts. For example, in Pallot v Douglas, 2015 BCSC 1296, upheld, 2017 BCCA 254, partition and sale of an interest in a vacation property was denied on the basis that [the petitioner] did not have standing because he had an equitable but not a possessory interest in the property. The Court of Appeal upheld the application judge’s findings, noting that “the interest of the beneficiary [in this case] under a trust is the right to claim that the trust be performed in accordance with its terms. It is not an immediate right to possession of the trust property.” The Court of Appeal found that ordering partition would “do violence” to the trust terms: Pallot v. Douglas, 2017 BCCA 254 at paras. 34-35.
27Although the application judge would not have granted partition because the whole family had used the property as a vacation property and agreed in writing not to sell it without unanimous consent, the Court of Appeal declined to address this argument based on the findings that the appellant lacked standing to bring the application.
28In these circumstances, Pallot v. Douglas is of limited precedential value. It has a different factual background than the case at bar. However, it is aligned with Ontario jurisprudence which I accept, that the circumstances of use of a property and any written agreement are relevant factors to weigh in deciding a partition application.
29David also relies on Rouse v. Rouse, 1999 CarswellOnt 873, [1999] O.J. No. 948 (OCJ Gen. Div.). In that case, an isolated camp property with a tradition of being used “as a whole and not piecemeal” was ordered to be sold. The nature and characteristics of the property did not make it suitable for partition. Again, this is a different scenario from the past 35 years of use of the Property, with each of the parties using and maintaining their cottages on the island separately. Each case rises and falls on its own facts.
30An agreement by the parties, in writing, about the use of a property is a factor to consider in whether to grant partition. Indeed, it may be considered a “ very significant factor”: Shabinsky v. Cohen, [1983 ] O.J. No. 1096 (Ont. Div. Ct.) at para. 5.
31Martha has argued that the Agreement is no longer in force because the parties have not followed many of its provisions. Certainly, the Agreement contemplated one cottage with decision-making shared among multiple siblings with equal interests. There have been significant changes to how the Property is used and managed, leading to the outcome of only two siblings holding unequal shares. As a result, much of the Agreement has been ignored. However, that does not mean the Agreement is ineffective. Paragraph 30 provides that “A failure by any party to insist upon or enforce any provision of this agreement in the event of its breach shall not constitute a waiver by that party of that provision with respect to any subsequent breach of any other rights given to that party.”
32I find that the agreement is a factor I must consider. Partition would be a form of “dealing with the property” that the parties agreed they would not undertake without the consent of the others. Martha acknowledged this expectation in her attempts to obtain David’s consent to partition of the property in a way proportionate to their ownership interests and having each assume title to their cottages on the Property prior to her pursuing this Application.
33Accordingly, I find that the agreement continues to govern the relationships between the parties and should be considered, but it does not prevent partition in all circumstances. This is because there is no language in the Agreement which waives resort to the Partition Act. Parties who are said to have contracted out of a statutory provision must do so by clear and direct language: Husack v. Husack, 2023 ONSC 949 at para. 70, upheld 2024 ONCA 117.
34Thus, while I find that Martha has not waived all rights to seek partition by signing the Agreement, I must consider it as a factor on this Application. Related to any agreement is the important question of how the parties have used the property.
35For the past thirty-five years of use, Martha has exclusively used the second cottage that she built on the Property. Martha and her two sons, who are in their forties, have used the cottage every summer since it was built in 1989.
36The parties treat the island as two separate areas. They do not involve each other in the decision-making involving each of their respective cottages or the immediate lands around them. Other than sharing in their proportionate share of taxes and hydro on the property, each pays for the upkeep, improvements and maintenance of their own cottage. David has not involved Martha in his use of the original cottage to generate income, nor has he involved her negotiating or being covered by his insurance policy in the event of a renter making a claim while staying at the original cottage or using the island. During this Application, David produced the insurance documents, however he declined to produce any rental agreements or the “House Rules” which are provided to each renter. This speaks to his attitude of possession and control over the main cottage and matters related to his property interest.
37Martha has been left without information as to how renters are expected to interact with her, her family and guests either relative to parking on the mainland or their movements around the island. This is not intended as a criticism of David, rather it is an example of the separate uses made by each sibling of their respective cottages and areas on the island without consulting or involving the other sibling, which is not in keeping with the Agreement which contemplated regular meetings and consultation. It is also some objective evidence to support Martha’s concerns about her potential for liability in the event of an accident on the Property.
38The “House Rules” document might have been an important document that would have demonstrated David’s efforts to mitigate any such risks to both owners. I draw a negative inference from David’s refusal to produce that document that it does not assist with his position vis-à-vis Martha’s potential liability. I see no good reason for his refusal to produce that document given that both counsel made submissions on the background and the nature of the relationship between the siblings. Martha sees an impasse. David disagreed with that characterization.
39The parties agree about what can be expected to happen next depending on the outcome of this Application. Martha is concerned that her sons’ ability to access the new cottage after her ownership interests passes to them. Martha worries that the history of their relationship, and breakdown in the trust between them means that David and his family may restrict her son’s access to their longstanding use of the second cottage, and to the land on which the second cottage sits. As the majority interest holder, David has the voting control over the use of the lands. On this application, David took the position that Martha is trying to obtain ownership over “50% of the dwellings on the Property and 50% of the docks.” (Each cottage has its own dock for access.) That position reveals an attitude toward control of the cottages that may reflect future steps to limit the access of Martha’s heirs to the second cottage based on his majority ownership and control of the votes to make changes.
40David is concerned that Martha is trying unfairly to ensure that he does not obtain 100% ownership in the Property. He also submits that partition would risk her heirs selling that portion to a third party, which is contrary to the Agreement and the shared intention of the siblings who signed it to keep the Property in the family. During cross-examination for this Application, David’s lawyer stated that Martha’s stated intention to keep the Property in the family was “meaningless to us.”
41David’s position is that his sister is acting out of spite. Martha’s position is that she does not trust her brother. They both stated that neither wants to transfer the Property outside the family.
42I agree that such an event is possible post-partition than if partition is refused. The prejudice to Martha in refusing partition is her fear that David will interfere with her son’s use of her cottage based on his majority ownership in the Property.
43The evidence does not permit a firm conclusion as to what will happen in the future. However, I am prepared to draw certain inferences from the available evidence.
44I accept the evidence of all that they continue to wish to have the Property be part of their family. The regular use, decades-long use of the Property’s two cottages by the families connected to them is evidence that all wish this arrangement to continue. Although not determinative, the best predictor of future behaviour is past behaviour. Fears for what “could happened” are not necessarily predictors of what will happen.
45There is no evidence of financial need on Martha’s side of the equation or of impulsive change relative to the Property which might predict the risk of a sale in the foreseeable future.
46From David’s perspective, there could be an inference from his use of the original cottage to earn income from summer rentals that he needs financial assistance with the carrying costs. However, he has said, and I accept this evidence, that is only a few weeks every summer. I infer from this that David’s finances do not make it likely that he needs to sell his property if partition were ordered. At most, I conclude that he is renting it to defray some of the costs when it is not in use. The Agreement does not prevent that use. It is only the manner of how he does so that is relevant; his use is consistent with he and Martha dealing with their respective cottages independently of one another.
47This is a close decision with the equities not falling neatly in favour of one party or the other. The Agreement supports David’s position. The historic use over the past 35 years supports Martha’s position, as does the evidence of David’s defensiveness in relation to information about the use of the original cottage and surrounding lands by third parties.
48I conclude that given the longstanding use, changes in ownership, stated intentions of the parties to keep this property in the family, that Martha has made the case for partition in proportion to their ownership of the lands. Aline can be drawn and has been proposed by an experienced land surveyor in a sketch attached to his affidavit. David has provided no countervailing evidence nor did he cross-examine the surveyor on the location of the proposed boundary line.
49However, that does not end the analysis. David may show that irrespective of these factors that partition may be contrary to law, or that it would be oppressive. I turn to those arguments next, beginning with the question of oppressiveness.
Has David shown that the request for partition is malicious, vexatious or oppressive?
50I do not find that Martha’s conduct in this case to be “malicious, vexatious or oppressive.” Strong views on either side of an issue do not amount to vexatiousness, even though they may feel personally vexing. Simply bringing an application for partition does not amount to malice or vexatiousness. If that were the case, logic would mean partition would always be refused in the absence of consent.
51The longstanding use and connection of Martha and David and their families to the cottages, docks and areas of the island suggests that this type of use can be expected to continue. While there may be some uncertainty over what might happen in the medium term, those outcomes could amount to inconvenience. However, any change arising from partition would not rise to the level of oppression of the kind that should cause a court to decline to grant the order sought.
52The immediate practical result of partition reflects the status quo as the parties have known it for 35 years. Each uses their cottage. Each has access to their own dock. They do not involve each other in matters of upkeep, cottage rental or use. The rationale given by Martha for partition is to enable her to leave her cottage to her children, and to avoid the possible liability from renters of David’s cottage on lands shared by the two of them.
53There is no expert evidence to support David’s alternative assertion that partition would decrease the value of the remaining 82.5% lands that he would retain. There is likewise no expert evidence that the parcel corresponding to her proportionate ownership interests is worth more than that interest or that her cottage is on a more favourable area of the island. Given the expressed intention of the parties to retain the property and not sell it, and David’s submission that effect should be given to the intentions of their parents, I cannot conclude that the potential for some unquantified impact on the value of the remaining portions supports a finding of maliciousness, vexatiousness or oppression.
54David has characterized Martha’s position at the time of her brother Paul’s application for partition and sale as being oppressive because she has failed to come to court with “clean hands”. I consider that argument next.
The 1998 Application to Sever and the Argument that the “Clean Hands” Doctrine Applies
55In 1998, one of the siblings, Paul, brought an unsuccessful application for partition and sale. Paul had financial issues and wanted to sell his interest in the Property.
56At that time there were six siblings with shared interests in the Property. Martha swore an affidavit opposing Paul’s application on the basis that severance was not consistent with her late father’ wishes about the property and that it would be difficult to sever the property into six respective shares.
57Martha submits that the changes in use and number of owners are no longer impediments. She responds that given her stated intention to not convey away her interest to third parties, but to have it remain in the family is consistent with the intentions of her parents when the Agreement was negotiated and signed.
58I accept this explanation for Martha’s change in position. David argues that having taken this position 26 years earlier, Martha is not coming to court with “clean hands” I do not agree. The explanation for the change in position may be unacceptable to David, but it is not illogical or unlawful for Martha to do so in the circumstances of this case. There is no evidence of an oblique or improper motivation behind the change in position. Martha has explained the reasons for her opposition to Paul’s application: impracticability and contrary to the intention behind the agreement.
59The clean hands doctrine requires impugned conduct relative to the transaction before the court: 2324702 Ontario v. 1305 Dundas, 2019 ONSC 1885 at para. 20. It derives from the doctrine of equity that one “who comes into equity must come with clean hands”: Toronto (City) v. Polai, 1969 CanLII 339, 8 D.L.R. (3d) 689 (Ont. C.A.) at pp. 699-700.
60Having “clean hands” in relation to a transaction will mean there is no evidence of illegality or bad faith on the part of the claimant. It is not an absolute doctrine but should be applied in a discretionary manner: Nagel’s Debt Review Inc. v Mosiuk, 2019 SKCA 16; [2019] 4 W.W.R. 60 at para. 69.
61I do not accept that Martha has not come to court with “clean hands” for bringing an Application for partition after having challenged her brother’s application for partition and sale in different circumstances. Her explanation for changing her mind about partition in the intervening years is reasonable. Further she attempted to seek David’s agreement prior to bringing this application.
62David has not shown that Martha is acting in bad faith or with a hidden agenda. Martha’s agenda is clear from her evidence. She wishes to ensure her family has continued uninterrupted access to her cottage after she passes away. She wishes to protect herself from liability associated with David’s decision to rent the original cottage for periods of time during the summer when he and Vanessa are not there.
63Overall, I conclude that David has not established that partition would lead to a malicious, vexatious or oppressive outcome.
Does the Planning Act prevent making an order for partition?
64David also submits that s. 50(3)(b) of the Planning Act bars an order for partition because after partition, Martha would continue to own lands abutting the land she previously owned, in contravention of this provision.
65Subparagraph 50(3)(b) states that:
s. 50(3) No person shall convey land by way of a deed or transfer, or grant, assign or
exercise a power of appointment with respect to land, or mortgage or charge land,
or enter into an agreement of sale and purchase of land or enter into any agreement
that has the effect of granting the use of or right in land directly or by entitlement
to renewal for a period of twenty-one years or more unless,
(b) the grantor by deed or transfer, the person granting, assigning or exercising a
power of appointment, the mortgagor or chargor, the vendor under an agreement of purchase and sale or the grantor of a use of or right in land, as the case may be, does not retain the fee or the equity of redemption in, or a power or right to grant, assign or exercise a power of appointment in respect of, any land abutting the land that is being conveyed or otherwise dealt with other than land that is the whole of one or more lots or blocks within one or more registered plans of subdivision.
66There are several problems with this assertion.
67While the policy of the Planning Act is “… to prevent subdivision of land except within stated limitations, the chief of which is to register an approved plan of subdivision or obtain a consent to severance from the appropriate local authorities” there is no blanket prohibition on the subdivision of land except on certain terms and conditions but rather only prohibition on subdivision of land by certain methods: Ontario (Attorney General) v. Yeotes, 1981 CanLII 1959 (ON CA), 1981 CarswellOnt 509, 120 D.L.R. (3d) 128, 14 M.P.L.R. 156, 18 R.P.R. 161, 31 O.R. (2d) 589, at para. 27
68An order for partition does not come within the scope of s. 50(3). As the Ontario Court of Appeal stated in Ontario (Attorney General) v. Yeotes, 1981 CanLII 1959 (ON CA), 1981 CarswellOnt 509, 120 D.L.R. (3d) 128, 14 M.P.L.R. 156, 18 R.P.R. 161, 31 O.R. (2d) 589, at paras. 28 and 29:
… The methods of dealing with land[s] that are prohibited without compliance with specified conditions are: "convey by way of a deed or transfer", "grant, assign or exercise a power of appointment with respect to land", "mortgage or charge land", "enter into an agreement of sale or purchase of land", or "enter into an agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more".
An order for partition, or a vesting order in partition proceedings, or a consent to the granting of such an order cannot by any stretching of language be brought within any of the proscribed methods or instruments.
69Even if an order for partition did come within the scope of s. 50(3), subparagraph (b) is inapplicable given that under a partition order there is no “grantor”: Yeotes, para. 29.
70Thus, a partition order should not be refused solely because it is contrary to the subdivision control policy of the Planning Act: Yeotes, paras. 35, 36, 39.
71However, in the wake of the Yeotes decision, the Province of Ontario amended the Planning Act to address dealings with land by seeking partition orders: See Planning Amendment Act, 1981, S.O. 1981, c 15. As a result, Subsection 50(20) of the Partition Act provides that:
No order made under the Partition Act for the partition of land shall have any effect in law unless,
(a) irrespective of the order, each part of the land described in the order could be conveyed without contravening this section; or
(b) a consent is given to the order.
72While s. 50(20) does not prohibit the subdivision of land by an order for partition, it provides that an order for the partition of land has no effect unless a consent is granted by a municipality or each part of the partitioned land could be conveyed without contravening section 50 of the Planning Act.
73Assuming that “conveyed” as it appears in s. 50(20)(a) means a conveyance by deed or transfer as described in s. 50(3), I find that it is likely that the conveyance of the 42.9 acre lot to David as proposed by Martha would contravene s. 50(3) as she would retain the fee in her 9.1 acre lot which abuts the lot conveyed to David: See Simone, para. 25.
74However this does not end the matter. The evidence tendered on the application from Martha is that if partition is granted, she will seek municipal consent: s. 50(20)(a) : See 1312733 Ontario Inc. v. Simone, 2019 ONSC 4420; Simone v. 1312733 Ontario Inc., 2020 ONSC 6546 (Div. Ct.); O’Brien v. McGilvray, 2018 ONSC 2442 at para. 12. Martha’s expert surveyor filed an affidavit that he believes that the local municipality may favourably consider Martha’s consent application. He was not cross-examined on that assertion. There is no evidence of municipal land use planning policies that would prevent the granting of municipal consent. I conclude that the Planning Act does not prevent me from making an order for partition, but that any such order should make it clear that it is subject to municipal approval.
Conclusion
72On balance, and for the reasons above, I exercise my discretion to grant this Application. Martha has demonstrated that the historic use of the property conforms to her intentions. I have considered the Agreement which brings this decision close to the line but does not prevent making the order sought. I have rejected the submission that Martha has not brought this Application with “clean hands”. There is no evidence of malice, vexatiousness or oppressive conduct. The Planning Act does not prohibit the partition of lands in favour of two tenants in common although the legal effect of partition will turn on the success of Martha’s municipal consent application.
73Martha’s application for an order for partition of the Property is granted as proposed in her record and subject to municipal approval.
Costs
74The parties are encouraged to agree as to costs. If they are unable to do so, brief written submissions may be made to my attention (Maximum 3 pages) on or before January 17, 2025.
Leiper J.
Released: January 7, 2025
COURT FILE NO.: CV-23-00699193-0000
DATE: 20250107
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARTHA ANN REID
Applicant
– and –
DAVID FREDERICK MAYNARD
Respondent
REASONS FOR DECISION
Leiper J.
Released: January 7, 2025