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Request to sell Matrimonial Home refused

February 4th, 2021 by

While a joint owner to a property has prima facie right to its partition and sale, that right may be restricted if the party requesting the sale is engaging in conduct that is malicious, vexatious, or oppressive.

In Rainville v. Walsh, 2021 ONSC 446, the court refused to Order a sale of the matrimonial home because it would result in the husband having no place to live. Justice Ellies stated:

“The owner of real property has a prima facie right to have the property sold and to recover the value of their interest in the property: Partition Act, s. 2; Davis v. Davis (1953), 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.), at p. 29. However, that right is subject to a narrow exception, namely where the party seeking the sale is guilty of malicious, vexatious, or oppressive conduct: Latcham v. Latcham, 2002 CanLII 44960 (ON CA), at para. 2. In Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2004), 2004 CanLII 48652 (ON CA), 75 O.R. (3d) 478, at para. 2, the Ontario Court of Appeal held oppression includes hardship on a co-owner resulting from the order. In the circumstances of this case, I have concluded that there would be hardship to Mr. Walsh if the Jane Street property were to be sold at this time.”

Mr. Walsh was an alcoholic who though sober at the time of the motion, did not appear to be in a very stable state. He had lost his driver’s licence more than once for impaired driving and had been hospitalized for alcoholism or other alcohol-related illnesses. While Mr. Walsh’s company had several rental properties, they were all being occupied except for one which required repairs. Even if Mr. Walsh gave notice to a tenant to vacate one of the units so he could occupy it, given the recent passage of O. Reg. 13/21 passed under the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9, which currently prohibits residential evictions. the court was not certain the Mr. Walsh would be able to evict them.

The wife’s request for partition and sale was denied.

Right of First Refusal to Buy the Family or Matrimonial Home

January 28th, 2021 by

When parties who own a home together separate, often one person wants the home sold while the other would like to keep the home. It would ordinarily not be a big deal except often, the person who wants the home sold has one or more of the following reasons:

  • They believe they would get more money if they sold to an arms-length party;
  • They do not believe their ex-partner would be able to afford to buy out their interest in the home;
  • They believe it would take longer for their ex-partner to arrange financing than selling in the open market;
  • They are simply uncomfortable with the other party getting to keep the family home;
  • This list would not be complete without sweet old revenge being one of the reasons why a party refuses to sell to their ex-partner.

Unfortunately for the person who wants to keep the home, there is nothing the courts can do to ensure this. Too much time and money is spent on motions where a person is seeking a right to first refusal to purchase a property. Sadly, in some cases, trial judges do in fact grant this relief but, on an appeal,, it most certainly would be reversed as was the case in Barry v. Barry, 2020 ONCA 321

What is a right of first refusal?

In the context of a matrimonial home or a family residence, the right of first refusal gives one party the first opportunity to buy out the other party’s interest/ share of the matrimonial home, without the home being listed for sale. If the home is listed for sale, the right of first refusal means the party with the right of first refusal gets the first opportunity to buy the house.

According to the court in Martin v. Martin which was cited by the Ontario Court of Appeal in Barry v. Barry:

As this court explained in Martin v. Martin, [1992] 8 O.R. (3d) 41 (C.A.), a right of first refusal is a substantive right that has economic value. It falls outside the boundaries of what is ancillary or what is reasonably necessary to implement the order for sale of the matrimonial home. It distorts the market for the sale of the matrimonial home by eliminating the need to compete against any other prospective purchaser, thus potentially reducing the amount the joint owning spouse realizes on the sale. In the absence of consent, the right of first refusal should not have been granted in this case. If the respondent seeks to purchase the matrimonial home, he must compete with any other interested purchaser.

A few takeaways from the quote in the Martin’s case:

  1. A right of first refusal has economic value. It is separate and above the rights of a joint tenant to deal with their property.
  2. A right of first refusal distorts the market for the sale of the home in favor of the party who has that right.
  3. Parties can agree to a right of first refusal but it is outside the boundaries of what is reasonably necessary for a judge to order for the sale of the home.
  4. A joint owner is always able to compete in the open market and purchase the house by offering the best price.

In Barry v. Barry, the Court of Appeal held that the right of first refusal should not have been granted in that case. It allowed the wife’s appeal and vacated the section of the trial judge’s Order granting the right of first refusal. Because the wife’s appeal was successful, costs were awarded in her favor.

The lesson here is, if you will like to keep the matrimonial home or family residence, your best and only option is to negotiate and get the other party’s consent. I recognize this may range from unpleasant to impossible in some situations, but truly, there is no other way.

GIFT vs LOAN – How money from parents and grandparents may be treated under Ontario Family Law

January 13th, 2021 by
Is it a gift or is it a loan? That is a question that we often grapple with in our family law practice.
A typical scenario is Jane and John are married and want to buy a home. Jane and John have both saved up some money for their down payment but unfortunately, not enough. Jane’s grandparents so kindly transfer $50,000 to Jane and John’s joint bank account and now they have enough for the downpayment and both are super excited to finally be able to purchase that dream home. All is right and well in the universe, until it isn’t.
Jane and John decide to call it quits and now must equalize their net family properties. Jane’s grandparents want their $50,000 back (or at least so says Jane) but John refuses, saying the $50,000 was a gift to him and Jane. Therein lies the problem! John has $25,000 at stake. He feels that the money really wouldn’t go back to Jane’s grandparents and is essentially Jane taking more than she is entitled to, in fact, he thinks, as a matter of principle, it is just wrong to ask for a gift to be repaid. Jane, of course, feels John is being ungrateful. Her grandparents simply helped them achieve their goal at the time. They have now accrued significant equity in their home so why shouldn’t her grandparents get their money back? She always understood it was a loan but even if it’s a gift, it’s her grandparents and her gift, right?  If John isn’t being greedy, why can’t he just repay her grandparents and keep the equity he has accrued which by the way they never would have been able to get without her grandparent’s help.
As you can see neither John nor Jane is wrong. Their respective positions make sense. It truly does. However, the legal question remains. How does it get resolved? Simple. The intention of the grandparents at the time of giving them the $50,000 is what counts. That’s it. Not what Jane thought, not what John thought, but what the grandparents themselves intended. If Jane’s grandparents expected to be repaid, then it is a loan if they didn’t, then it’s a gift. I wish the analysis ended there though, but it doesn’t. That’s the nature of the law.
Even though Jane’s grandparents may have intended for the $50,000 to be paid back, if the court believes that the loan is not likely to be repaid, or is unlikely to be repaid in full, the courts can discount the loan, all the way to $0. What do I mean? t means, based on the facts of the case, the courts can decide that only half of the loan is likely to be paid back and so the court can discount the loan by 50% thereby allowing only a deduction of $25,000 from the NFP calculations. The court can also find that the entire loan is not likely to be repaid, in which case, the entire loan will be discounted to $0.
The law generally does not presume a gift, where money is transferred by a parent or grandparent to an adult child. So in this case, John would have the burden to prove that the transfer to Jane was a gift.
If you’re a parent or grandparent making a loan, what are some steps you can take to ensure that your intentions are respected by the courts?
  1. Prepare a loan agreement
  2. Include interest on the loan
  3. Include a loan repayment date.
  4. Consider registering a mortgage to secure the loan
  5. Provide for periodic repayment of the loan
  6. Even if periodic payments are missed, document demands for loan repayment.
As you can see, while the true test is the intention of the parents or grandparents at the time of the transfer, events after the fact, such as demand for repayments are considered by the courts in determining if the money is a true loan. While monetary transactions between family members can be very informal, the legal ramifications can be serious. It is important for all parties to be on the same page and documentation of your intentions can prevent future conflicts.
For further assistance, please contact us. We are waiting to help.

The Matrimonial Home – Love it or List It

February 25th, 2019 by

Unequal Division of Net Family Property

November 6th, 2017 by

Thinking of asking for an unequal division of your net family property? Getting an order for unequal division requires you to meet a high threshold. The Family Law Act R.S.O. 1990, CHAPTER F.3 lists the grounds on which a court may make this Order.

Variation of share
(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d) a spouse’s intentional or reckless depletion of his or her net family property;

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g) a written agreement between the spouses that is not a domestic contract; or

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5 (6).

Division of Property on Divorce or Separation

August 29th, 2015 by

o-DIVORCING-COUPLE-facebookProperty Division

Whether you are married, separated, divorced, or under common law, the law has rules about how to decide the value of family property and how to divide the property. If you are married, the law sees marriage as an economic partnership. If you are divorced, the family assets and debts that have built up during your marriage (net family property) must be divided equally. However, if you and your partner were not legally married and are classified as common law, you will not automatically have the same rights.

Property can be defined as anything you own, such as your homes, cars, personal and household items, pensions, bank accounts and any other investments, including debts.

Separation/Divorce: 

When a marriage ends, the equal contribution of each person to the marriage is recognized. The law requires that the value of any kind of property that was established by a spouse during the marriage and still exists at separation must be divided equally between the spouses. Also, any increase in the value of property owned by a spouse at the date of marriage must be shared. The payment that may be owed to one of the spouses in order to effect this sharing is called an equalization payment, or an equalization of net family property.

Types of Property 

Matrimonial Home:

The family home, or matrimonial home, is the home where your family mostly lived before you separated. If you own this home, each of you has the right to share in the value of the equity on the home. The only time the value of the home would not be shared is if you and your spouse had signed an agreement (marriage contract) that says the home will be kept out of the equalization process.

Pensions:

Starting January 1, 2012, pension plan members who have to pay their former spouse a settlement based on the value of their pension plan will be able to make some or all of the payment from the pension plan itself. The pension plan administrator will also now be responsible for valuing the pension plan so that spouses do not have to hire an actuary to do this for them.

Personal and Household Items: 

Reasonable ‘personal effects’ (belongings) are normally not considered to be matrimonial assets. What a ‘reasonable personal effect’ is may be hard to figure out in some cases, especially if the item in question is valuable (like jewellery). Legal advice is often helpful to assist you in deciding what items are ‘personal.’

House hold items are goods and products used within households. They are the tangible and movable personal property placed in the living rooms, dining rooms, kitchens, family rooms, guest rooms, bedrooms, bathrooms, recreation rooms, hallways, attics, and basements and other rooms of a house.
When it comes to household items and repairs, the parties by agreement, can decide who is to arrange, carry out or pay for things like house repairs, insurance, mortgage and taxes on the matrimonial home.

If the parties cannot agree, then either one of them can file a motion for ‘interim’ relief requesting that a judge decide these issues for the short term until a final hearing or trial can be scheduled.   Get legal advice about your rights and obligations. A lawyer can help you sort out different ways to do this that may be able to benefit you, or the family as a whole.

Debt:

Matrimonial or family debt is debt that was acquired by either spouse or both spouses together during the marriage that was used for ordinary family matters. These may include such things as household expenses, the mortgage on the family home, or debt used to finance a family car. If some debts were acquired after you separated from your spouse they may be considered matrimonial debts if they were used to pay for necessary living expenses or to maintain the house or car or other assets.
As a general rule, both spouses are equally responsible for a debt that is in both of their names. You may also share responsibility for debts that are only in your spouse’s name if the money was used to buy something that benefited you or your family. Examples are heating oil or a family vacation. Usually you are not responsible for your spouse’s non-matrimonial debts unless you co-signed or guaranteed them. For example, you would not usually be responsible for debts your spouse acquired to run their business, or debts acquired by your spouse before the marriage.

What is the process for dividing property?
The process of dividing family property is called equalization. There are two steps in the equalization process.

Step 1: Calculate net family property:

  • The first step in the process is that each of you calculates the value of your net family property.
  • To do this, each of you must make a list of your assets at the time you separated and total the value of the assets. From this amount, you deduct the value of:
  • debts owing at separation
  • the value of property that you brought into the marriage
  • gifts you were given
  • property you inherited
  • damages for personal injury

Step 2: Share the family property equally:
Once each of you has calculated your net family property, its value must be equalized. Each of you must tell the other your net family property. The spouse whose net family property is higher must pay the other spouse half of the difference between the two amounts. This is called an equalization payment.
In some cases, the court can order a different equalization payment if the equalization amount is unfair. For example, the court could order your spouse to pay more if he did not tell you about large debts he had when you were married, or if he got into major debt on purpose.

Common-law:
Property rights are very different for people who in to live common-law relationships. Each of you owns whatever property you brought into the relationship and whatever you bought while you were together.  Complications arise when the property increases in value and it is owned by just one common-law spouse.

If you and your partner lived in a common-law relationship, you do not have equal rights to the value of your matrimonial home. The home that you lived in as a couple belongs to the person whose name is on the title.

You and your common-law partner could write a cohabitation agreement to set out how you would deal with property and debts if you separate. If you do not have a cohabitation agreement and you cannot agree about how to divide your property, either one of you can go to court. You can ask a judge to award you a share of what you bought as a couple, or a share of the amount that a property increased in value during the relationship.

Cases: 

In the case of Collins v. Collins, 2000 192 Nfld & PEIR 6; 6 RFL (5th) 101, the Plaintiff, Mrs. Collins, claims she is entitled to equal division of the property between her and her husband Mr. Collins.

The evidence is clear in this matter that Mrs. Collins has been the sole person responsible for all maintenance of the property for the past 15 years. She was responsible for all municipal taxation and the day to day upkeep of the property. This was done while Mrs. Collins also endeavoured to support the two children of the marriage.

Mr. Collins did not make substantial contributions to the children’s maintenance during the early years of separation. This is evidenced by the fact that Mrs. Collins had to resort to assistance from the Department of Social Services, as Mr. Collins was not in a position to provide financial support to his family on a continuous basis in the years prior to receiving a disability pension.

In circumstances such as the mentioned case, section 4(6) of the Family Law Act allows for an unequal division of assets after certain factors are considered.
Section 4(6) FLA states:

PART I FAMILY PROPERTY

Variation of share 

  1. (6)  The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d) a spouse’s intentional or reckless depletion of his or her net family property;

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g) a written agreement between the spouses that is not a domestic contract; or

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5 (6).

This was a case where an unequal division of the matrimonial home was substantially in favour of Mrs. Collins. Therefore the decision was made in her favour for an unequal division of the net family property.

If you or anyone you know are having issues with dividing property with your spouse or have any questions about the process do not hesitate to call A. Princewill Law Firm at 1-289-622-7662 or email us at [email protected]