Vesting Order: Newton v Newton, 2014 ONSC 2757, 240 ACWS (3d) 689

Newton v Newton, 2014 ONSC 2757, 240 ACWS (3d) 689

This case addresses the issue of when it may be appropriate to make a vesting order.

Background

The parties were married on February 15, 1992 and separated on February 5, 2008.  At the date of separation, the parties resided in a home worth approximately $90,000 that was subject to a mortgage in the amount of $28,353.15.  The husband remained in the home when the parties separated and has since that date paid off the mortgage and paid all taxes, insurance and utilities associated with said home.

The wife has failed to make financial disclosure in this case and has breached numerous court orders which were made “to enforce her legal obligations of financial disclosure” (paragraph 11).  Further, the wife was found in contempt for failure to abide by the terms of such orders and as a condition of her release, the wife was to attend court on July 27, 2012 and bring with her a sworn Financial Statement, income and asset verification and pension information.  The wife did not attend court and failed yet again to comply with the court’s order.

By means of penalty enforced by the court and costs payable, the wife owed the husband a total of $49,100.  The husband proposed that the court make an order vesting in him title to the home.

In consideration of the vesting of title, he proposes that the equalization payment of $4,775 and Ms. Newton’s equity in the home of $30,323, totalling $35,099, be offset against the penalty and costs owing to him of $45,075.58, with the difference  of approximately $10,000 in his favour to be extinguished.

Analysis

Section 100 of the Courts of Justice Act states:

A court may by order vest in any person an interest in real or personal property that the court has authority to order be disposed of, encumbered or conveyed.

A vesting order is dual character in nature as “on the one hand [it is] a court order (allowing the court to effect the change of title directly), and on the other hand [it is] a conveyance of title (vesting an interest in real or personal property in the party entitled thereto under the order)” (HSBC Bank of Canada v Regal Constellation Hotel Ltd. (Receiver of)).  In Lynch v Segal it was found that the courts have a broad discretion to make such an order and the granting of such will depend upon the circumstances of the particular case.  Further, Lynch v Segal held:

in the family law context…the court will need to be satisfied…that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour, indicate that the payment order will not likely be complied with in the absence of more intrusive provisions…. The spouse seeking the vesting order…will need to persuade the court that the vesting order is necessary to ensure compliance.

The husband submitted that the court had authority to grant a vesting order under section 100 of the Courts of Justice Actthrough s. 9(1)(d)(i) of the Family Law Act.  The Court, however, disagreed, but found that an order under “the Partition Act could be interpreted as providing the authority to convey property as required by section 100 of the Courts of Justice Act” (paragraph 23).  Further, Justice Shaw found that the wife has an obligation to pay the husband for the penalty and costs incurred throughout this matrimonial matter.  Further, Justice Shaw found that the wife’s “past conduct and future behaviour indicates that she would be unlikely to comply without the more intrusive remedy of a vesting order” (paragraph 25).

Justice Shaw found that there was a “reasonable relationship between the value of Ms. Newton’s equity in the home and the amount of her liability to Mr. Newton” (paragraph 26).  As such, the court made a vesting order as it was equitable considering the circumstances particular to this case.

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