Case reference: Urness v. McDonald, 2022 ONSC 1697
This historical case summary discusses the decision identified above. Later decisions and legislative changes may affect how it applies today. Obtain legal advice about your circumstances.
The parties were married on August 8, 2009 and were separated on December 1, 2017. During the marriage, they operated a substantial farm operation. This operation is conducted on:
a. five jointly owned farm properties;
b. two properties solely owned in the name of the respondent; and
c. other lands which are rented, in some cases regularly, and in some cases not regularly, depending on the rental market.
The parties have been unable to resolve the issues arising from the breakdown of their marriage. The largest financial issue between the parties is equalization. At the request of both parties, a consent order was made bifurcating the trial. They hoped determinations of the values of the properties would assist them in negotiating a resolution. I heard the first part of the bifurcated trial and have issued reasons at 2021 ONSC 1014 in which I determined values as required.
The applicant brought a motion which was argued on the first day of the trial for an order for the sale of the jointly owned properties. I released an endorsement in which I said I would reserve my decision as I anticipated the evidence I was about to hear during the trial would be important to the decision.
I received additional argument on the motion at the end of the trial. While my decision was under reserve, White v. White, 2021 ONSC 6018came to my attention. As this decision had been released after argument of the motion, I decided I should give the parties an opportunity to make submissions arising from it. I have now received and considered those submissions.
POSITIONS OF THE PARTIES
The respondent argues that s. 11 of the Family Law Act applies in this case and prohibits me from ordering the sale of any of the farm properties.
The applicant argues that s. 11 of the FLA does not apply, but s. 2 of the Partition Act does apply. She argues that the factors which might justify refusing an order for the sale of the properties are not present, and binding jurisprudence requires that I order the sale of all the jointly owned properties.
GENERAL PRINCIPLES
The applicable principles to be considered a motion for sale of jointly owned properties during family law proceedings were set out in Dhaliwal v. Dhaliwal (2020) ONSC 3971, at para. 16:
a. Section 2 of the Partition Act empowers the court to order the sale of a jointly owned property, including a matrimonial home.
b. A joint tenant has a prima facie right to an order for the partition or sale of property held with another joint tenant.
c. A court is required to compel partition and sale unless the opposing party has demonstrated that such an order should not be made.
d. The other joint tenant has a corresponding obligation to permit the sale. These are fundamental rights flowing from joint tenancy.
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.
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.
g. Each case must be considered on its own facts. The court must consider all relevant factors in exercising its discretion.
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.
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.
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.
k. Orders for sale of a matrimonial home at the interim stage should not be made as a matter of course. 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.
l. 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.
m. A pending equalization claim may also be relevant. The court cannot compel one joint tenant to sell to the other. Nor can it give either joint tenant a right of first refusal. 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.
n. 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? [Citations omitted.]
*source: Canlii
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