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Real Property - Partition Act. Pantoja v. Belilla
In Pantoja v. Belilla (Ont CA, 2023) the Court of Appeal considered an appeal argument regarding a lower court order to partition and sale:[10] Morgan J. made no error in ordering the partition and sale of the properties. He did not, as the moving parties assert, state that they had agreed to sell their house. Rather, he noted that the properties had to be sold according to the application of the law. There is no dispute that the parties’ relationship has so badly deteriorated that they cannot agree on anything, including the sales ordered by Vermette J. The case management of the sales by the associate judge was essential to carry out the sales orders.
[11] Morgan J. referenced and applied the correct legal principles, rightly stating that the court has limited jurisdiction to refuse an application for partition and sale. To decline ordering a sale, a court must be satisfied that the party seeking the sale is acting in a malicious, vexatious, or oppressive fashion, and the onus to demonstrate this is the case rests on the party resisting the sale: Inniss v. Blackett, 2022 ONCA 166, at para. 23. That he was not persuaded that the factual circumstances justified an exception was his decision to make and supported by the record before him. The moving parties have pointed to no error other than they are displeased that he did not prefer their version of events. . Dhir v. Malaviya
In Dhir v. Malaviya (Div Court, 2023) the Divisional Court considered a family court appeal [under CJA 19(1)(a.1)] from a final order made under an Ontario statute, here that of the Partition Act:Jurisdiction
[10] Section 19(1) of the Courts of Justice Act (“CJA”), RSO 1990, c C.43 provides that an appeal lies to the Divisional Court from a final order of a judge of the Family Court made under a provision of an Act or Regulation of Ontario. Section 7 of the Partition Act, RSO 1990, c P.4 provides that an appeal lies to the Divisional Court from any order made under it. . Dhaliwal v. Dhaliwal
In Dhaliwal v. Dhaliwal (Div Court, 2023) the Divisional Court considers a s.2 Partition Act motion:[6] This is a Motion brought by the Respondent father.
a. He wants to force the immediate sale of two jointly owned properties, including the matrimonial home where the Applicant mother resides with their two children ages seven and four.
b. The Applicant doesn’t want either property sold at this time.
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[16] The applicable legal principles include the following: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 1953 CanLII 148 (ON CA); 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) 1990 CanLII 6718 (ON CA), 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 1953 CanLII 148 (ON CA), [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) 1973 CanLII 603 (ON CA), 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) 2002 CanLII 44960 (ON CA), 27 R.F.L. (5th) 358 (ON CA); Dulku v. Dulku 2016 CarswellOnt 16066 (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, 2004 CanLII 34595 (SCJ).
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 1992 CanLII 7402 (ON CA). Nor can it give either joint tenant a right of first refusal. Dibattista v. Menecola 1990 CanLII 6888 (ON CA). 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? . Scanga v Scanga
In Scanga v Scanga (Div Court, 2023) the Divisional Court identifies the appeal route [s.7] for Partition Act orders, and considers the criteria for a partition and sale order:[4] An appeal lies to this court of any order made under the Partition Act by operation of section 7 of the Act. As an order for sale was made, the order of Chozik J. is a final order (Nifco v. Nifco 2017 ONSC 7475 at para 6).
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[8] In our view, the reasons for ordering the sale by Chozik J. were clear and sufficient. She identified the legal test which balances the prima facie right of a titled party to sale with the corresponding obligation to consider whether a sale would prejudice the rights of a party resisting sale. Chozik J. considered the status quo circumstances of the parties and their adult children. Chozik found that Ms. Scanga had not produced evidence of prejudice sufficient to prevent an order for sale. Ms. Scanga’s rights to pursue other family law act remedies against Mr. Scanga were in no way affected by the order for sale. Chozik J., in our view, appropriately considered the provisions of section 24(3) of the FLA in determining that Ms. Scanga did not produce evidence entitling her to a prima facie entitlement to exclusive possession and therefore dismissed the relief she claimed on the motion. . Engenheiro v. Runco
In Engenheiro v. Runco (Div Court, 2022) the Divisional Court considered a Partition Act issue, here in a domestic law context:[8] Mr. Engenheiro contends that Sanderson J. fundamentally misapprehended the nature of the dispute before her. In his submission, this is a contract dispute. Sanderson J. should have considered whether Ms. Runco should be ordered, pursuant to the divorce agreement, to sell her interest in the property to Mr. Engenheiro, and whether she had proved that her advisors’ tax opinion should be preferred. Instead, Sanderson J. simply applied the test under s. 3(1) of the Partition Act, unfairly putting the onus on Mr. Engenheiro to prove that Ms. Runco had behaved in a malicious, oppressive, or vexatious way.
[9] Mr. Engenheiro acknowledges that the interpretation of a non-standard agreement, such as the divorce agreement at issue here, is entitled to deference unless a judge makes an extricable error of law. Extricable errors of law include “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a legal factor”: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII), [2014] 2 SCR 633, at para. 53.
[10] In our view, Mr. Engenheiro has failed to establish that Sanderson J. made any extricable error of law.
[11] Contrary to Mr. Engenheiro’s argument, the parties’ agreement did not displace the remedies available under the Partition Act. The divorce agreement explicitly anticipated the situation that developed. If Mr. Engenheiro did not exercise his right of first refusal within a 90-day peremptory delay, he lost the right to buy out Ms. Runco’s interest in the property. As both the New York State Court and Sanderson J. found, Mr. Engenheiro did not fulfill the prerequisites to obtain the transfer of the property to him within the prescribed timeline. His right to first refusal was exhausted and he was not entitled to require that Ms. Runco sell her interest to him. In these circumstances, there was nothing precluding an order under the Act.
[12] Mr. Engenheiro argued that Sanderson J. should have considered whether Ms. Runco unreasonably refused to accept Mr. Engenheiro’s estimate of the tax liability arising on the sale of the property, and instead relied on a revised calculation that was twice the amount previously discussed. This argument is an attempt to relitigate findings of fact open to the application judge on the record before her.
[13] Given the lapse of Mr. Engeheiro’s right to acquire the property pursuant to the divorce agreement, Sanderson J. correctly applied the principles relevant to an application under the Partition Act. An order for sale was appropriate unless Mr. Engenheiro could show that Ms. Runco engaged in malicious, oppressive or vexatious conduct. Sanderson J. concluded that he had not done so. . Billimoria v. Mistry
In Billimoria v. Mistry (Ont CA, 2022) the Court of Appeal considers when "a joint tenant or tenant in common" of real estate may compel sale against the wishes of another such owner:The Partition Act Issue
[38] Section 2 of the Partition Act provides that a joint tenant or tenant in common may be compelled to make partition or sale. The onus is on the party resisting sale to demonstrate reasons why it ought not to be sold. There must be malicious, vexatious or oppressive conduct to justify the refusal to sell: Brienza v. Brienza, 2014 ONSC 6942, at paras 24-27.
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