June 26, 2024 – Sale of Jointly-Owned Property: The Principles

“The applicable legal principles include the following:

a.  Section 2of 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. Dayal2016 ONSC 3559 (SCJ); Marchese v. Marchese  2017 ONSC 68515 (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 Doucett2020 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 issuein 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. Davis1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.); Steele v Doucett.

h.  In family law cases, an order under the Partition Actshould 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 Actdoes 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 Zarrabian2016 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 currentlyunsustainable, 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. Delongte2019 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 Darrigo2018 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 34593 (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. Martin1992 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?”

          Dhaliwal v. Dhaliwal, 2020 ONSC 3971 (CanLII) at 16