Background:
The parties began cohabitating in 2005 and had three children together. In 2018 the parties separated and at the point of separation, the Respondent father held two properties, Bandelier and Brettonwood, both of which were in his name alone. One of these homes, Brettonwood, was used as the family’s matrimonial home and the other, Bandelier, was used as an investment property to rent out. The matrimonial home was purchased in the sole name of the Respondent because the Applicant did not qualify for financing. However, the parties acted as if the property was jointly owned – they each worked toward paying the mortgage and shared expenses.
In purchasing the investment property, the parties mortgaged the matrimonial home and the Applicant contributed $24,000. The Respondent insisted on his name being the only one on title, but the real estate lawyer wanted to ensure that the Applicant’s interest in the property was protected. The parties executed a trust agreement which indicated that although the Applicant is not on title for the property, she has a 50% beneficial interest in it. After the parties separated, the Applicant sought an order for the sale of the investment property so that she could recover her 50% interest in the property. The Respondent counter-claimed that the Trust Agreement should be set aside, and he should be declared the sole legal and beneficial owner of the rental property.
Analysis:
In determining who is eligible to bring a claim to compel the sale of land the court considered Sections 2 and 3(1) of the Partition Act:
2. All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.
3(1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.
Considering these factors, the court found that the Applicant was clearly a “person interested in” the investment property. Thereby, the Applicant was in a position to bring an application to the court to have the property listed for sale. The onus is on the party resisting the sale of the property to demonstrate that there is a sufficient reason for resisting the sale. It is understood that the court has a very limited discretion in resisting an application for the sale of the home. In order for the court to exercise this discretion the resisting party must show malicious, vexatious or oppressive conduct to justify the refusal. In the case at hand, the Respondent did not provide any sufficient reason as to why the partition for the sale of home should not be ordered.
Conclusion:
The Trust Agreement clearly outlined that the Respondent was holding an interest in the investment property in trust for the Applicant. The court ordered that there be an immediate sale of the investment property and that the proceeds of the sale be divided equally between the parties.