We previously covered a court case where the “extraordinarily wealthy” father was forced to sell a jointly-owned matrimonial home that he never used. This can occur when a divorcing couple has separated, and one of them is still living in the home (with or without any children of the marriage). Or, it can even occur when the couple has formally separated, but is still living under the same roof.
For those who are in the position of needing a forced sale, there are a number of legal principles and factors that will dictate whether a court will make the order. The list is long, and no single factor dominates over the other. The following list is a brief summary.
Factors the court may look at when considering a forced sale:
- The governing legislation is the Ontario Partition Act. It empowers the court to order the sale of a jointly owned property, including a matrimonial home.
- A joint owner has a prima facie right to an order for the partition or sale. Conversely, the other joint owner has an obligation to permit it. But the court cannot compel one joint owner to sell to another.
- A court must order a sale unless the person opposing it demonstrates a sufficient reason, recognized in law, as to why the order should not be made.
- The court must consider, and attempt to guard against, potential prejudice around upcoming legal claims that still have to be determined by the court.
- Each case must be considered on its own facts.
- Generally, to avoid the sale the party opposing it must show malicious, vexatious or oppressive conduct relating to the issue.
Now, when the property in question happens to be a matrimonial home, there are some added issues arising from the Family Law aspect.
Factors the court may consider when ordering forced sale of the matrimonial home:
- An order under the Partition Act should generally not be made until any dispute related to the property has first been determined.
- Although the Family Law Act (FLA) does not displace the Partition Act, prejudice to any legitimate FLA claim will tend to forestall a partition order.
- 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 owners, and the family as a whole.
- If monthly carrying costs are currently unsustainable, it is inappropriate to indefinitely perpetuate financial hardship for the entire family.
- A pending equalization claim under the FLA may also be relevant.
- Timing is a consideration, especially if the sale would take place before the divorce trial.
As the court put it, “Sometimes harsh new realities need to be faced sooner as opposed to later – in order to avoid even more painful consequences such as power of sale proceedings or even bankruptcy.”
Finally, the presence of children in the mix is also a a key factor.
How can children affect a court’s decision to force sale of the matrimonial home?
- The mere fact there are children is not – alone – a sufficient reason to oppose a sale.
- The court must consider the best interests of the children and the impact of a proposed sale on them, including how it affects their schooling.
- A generic statement that children will be “unhappy” about a move, is not sufficient. The opposing party must show a likely negative impact.
Full text of the decision: Dhaliwal v. Dhaliwal, 2020 ONSC 3971