Property Division, Sharing & The Matrimonial Home

At Wife’s Request, Court Force Sale of Husband’s “Life’s Work”


At Wife’s Request, Court Force Sale of Husband’s “Life’s Work”

The recent case of Reiss v. Garten had a lot of interesting elements: The demise of a 35-year marriage between wealthy spouses. Numerous commercial properties, assets, and investments to evaluate and divide. Complex lawsuits in both family and civil court to untangle the complicated web of their finances. Multiple trial dates that might be years away. And amongst the jewels in the couple’s commercial-holdings tapestry:

A mid-town Toronto office building, that generated nearly a $1 million in yearly income – and one that the wife wanted to be sold immediately, by court order if necessary.

The question was: should the court allow it?

For his part, the husband objected to the sale of the property, which was located on Merton Street and consisted of a “boutique five-story”, fully-tenanted commercial building. During their long-term marriage, the spouses had used the $850,000 annual income generated from the property to meet their expenses. The husband considered the Merton property to be his “life’s work”.

The wife countered by pointing out that she and the husband were the two sole shareholders of the property (which was mortgage-free): She held 49 percent; he held 51 percent, and it tied up a good deal of their joint assets. She was asking for its immediate sale because after the demise of the marriage she wanted to return to the U.S. (where she was a citizen), in order to get a “fresh start” and care for her elderly and infirm mother in New York City. The wife had been trying to sell the property since mid-2013, but – despite previous expressions of interest by potential buyers – the husband refused to even consider it; this prompted several lawsuits. Based on a proposal put together by a property marketing company she had hired, the property would sell very quickly. (Besides, the wife pointed out, the husband was free to bid on the Merton property himself in response to the sale if he wanted to keep it so badly.)

She proposed a roughly 50/50 split of the proceeds and asserted her right to force a sale under the Ontario Family Law Act, the Partition Act, the Family Law Rules and the Ontario Business Corporations Act, as well as the court’s inherent jurisdiction.

After assessing all the facts, the court agreed with the wife. It granted her motion for an immediate sale of the property, and in doing so commented on the following:

• The litigation had started in 2013 and the trial itself was likely at least a year away; yet the now-divorced spouses were still no closer to resolving their financial affairs.

• Even though they separated in 2011, the husband had made any sort of advance on the sizeable equalization payment he was certain to owe the wife (estimated at $5.5 million).

• The Merton property was worth at least as much as the net value of all the other corporate properties in contention, combined. It was also the most readily marketable.

• The Canadian dollar was no longer on par with the U.S. dollar, as it had been when the litigation had commenced.

Not only would the sale of the Merton property at this point be “just and convenient”, but the court found that to compel the wife to wait until trial would actually prejudice her financially: she clearly needed the funds now. Yet, despite being a minority shareholder with a direct interest in the property, those funds had been tied up for four years. In short, the court found that selling the property now, rather as part of a sale of all the assets at the same time, was a “sensible approach”.

For the full text of the decision, see:

Reiss v. Garten, 2015 CarswellOnt 7859

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About the author

Russell Alexander

Russell Alexander is the Founder & Senior Partner of Russell Alexander Collaborative Family Lawyers.