Sale of a Matrimonial Home – the Partition Act versus the Family Law Act

• by Amruta Ponkshe

Originally published in the OFLM 2024-02 edition

Overview

For many separated spouses, decisions regarding the matrimonial home, its possession and disposition, can be a point of contention as it is often a significant (if not the most significant) family asset with high sentimental value. One party may insist on having exclusive possession of the matrimonial home, while the other may insist on its sale.

In Ontario, a party who wishes to force the sale of a jointly owned property may rely on section 2 of the Partition Act that empowers the court to order the sale of a jointly held property, including a matrimonial home.

The Partition Act does not apply when the matrimonial home is owned by one spouse. In such situations, the spouse who has sole title to the matrimonial home is prima facie entitled to sell the home, but section 21 of the Family Law Act prohibits alienation of the home without the other spouse’s consent.

Section 23 of the Family Law Act empowers the court to authorize the sale of a matrimonial home if the court finds that the spouse whose consent is required is unreasonably withholding consent.

This article looks at the tests established in common law, family law principles and other factors that dictate whether an order for the sale of a jointly owned matrimonial home can be made, and provides a synopsis of leading and recent case law.

The Court’s Discretion – the “malicious, vexatious or oppressive” test

The word “may” (as opposed to “shall”) in section 2 of the Partition Act settles that the court has discretion to refuse partition and sale. The test for the exercise of the court’s discretion to refuse partition and sale was affirmed by the Ontario Court of Appeal in Silva v. Silva (1990 CanLII 6718 (ON CA)) and requires malicious, vexatious or oppressive conduct.

In simpler words, to avoid an order for partition and sale, the non-consenting party must show the court that the conduct of the party requesting the sale is “malicious, vexatious or oppressive”.

Very few court decisions have provided insight into what amounts to “malicious, vexatious or oppressive” conduct. Justice Faieta provides an overview in Hutchison-Perry v. Perry (2019 ONSC 4381) at paragraph 35:

There is some overlap in the scope of the terms ‘malicious’ or ‘malice’, ‘vexatious”, and “oppressive’.  ‘Malice’ arises when a proceeding is brought for an improper purpose including spite, ill-will, vengeance, or to gain a private collateral advantage: Nelles v. Ontario (1989 CanLII 77 SCC) at paras. 193-194.  A proceeding may be viewed as ‘vexatious’ for numerous reasons including when multiple proceedings are brought to re-litigate an issue already decided or when a proceeding is brought to harass or oppress others rather than to assert a legitimate right: Re Lang Michener et al. v. Fabian et al. (1987) (1987 CanLII 172 ONSC); Van Sluytman v. Muskoka (District Municipality) (2018 ONCA 32), at para. 23.  A motion for the sale of a matrimonial home is ‘oppressive’ when the co-tenant that opposes the sale will suffer serious hardship if the matrimonial home is sold: MacDonald v. MacDonald (1976 CanLII 845 ONSC), at para. 254. (emphasis added)

Intersection of the Partition Act and the Family Law Act

In Jarvis v. Jarvis (2023 ONSC 7203), the court discussed the intersection between the Partition Act and the Family Law Act at paragraphs 13 and 14 by referencing the seminal case of Silva v. Silva (above).

In Silva, the Court of Appeal dealt with the interplay between the Partition Act and the Family Law Act and at paragraph 24, the Court wrote:

The two statues are not incompatible, but where substantial rights in relation to jointly owned property are likely to be jeopardized by an order for partition and sale, an application under the Partition Act should be deferred until the matter is decided under the F.L.A.  Putting it more broadly, an application under s. 2 (of the Partition Act) should not proceed where it can be shown that it would prejudice the rights of either spouse under the F.L.A.

In Silva, the custodial mother had relocated to England with the child and was supported on welfare. She received no support payments from the husband, who resisted the sale the matrimonial home until the equalization issue was determined. The Ontario Court of Appeal held that there was no reason to defer the sale and division of proceeds while the parties waited to have their equalization claim determined later, illustrating the importance of freeing up capital to support the immediate needs of the family.

In Martin v Martin (1992 ONCA 7402), the Ontario Court of Appeal stated that orders for the sale of a matrimonial home before the resolution of Family Law Act issues (particularly the determination of the equalization payment) should not be made as a matter of course and that, in addition, spousal rights of possession under section 19 of the Family Law Act and any order for interim exclusive possession should be taken into account.

In other words, if the substantive rights under the Family Law Act may be jeopardized by an order for partition and sale, the sale should be deferred pending the determination of rights under the Family Law Act.

When a sale of a matrimonial home is sought under section 23 of the Family Law Act, the onus is on the non-consenting spouse to establish, for example, that their claim to have exclusive possession of the homes triumphs the other party’s right to sale or that the children of the marriage would be adversely affected by the move. Justice Akazaki discussed this at paragraph 15 in Jarvis (above), referencing Jamil v. Iqbal (2014 ONSC 4650), at paragraph 6, and Goldman v. Kudeyla (2011 ONSC 2718), at paragraph 19.

Hardship and best interests of the children

In Dhaliwal v. Dhaliwal (2020 ONSC 3971), at paragraph 16, Justice Pazaratz summarized the following:

  1.      The court must consider the impact of a proposed sale on children or a   vulnerable spouse -- including the emotional impact, and the fundamental need to ensure that they have appropriate housing.  Delongte v. Delongte (2019 ONSC 6954); Kaing v. Shaw (2017 ONSC 3050).  The availability and affordability of alternate housing must be considered.  As part of the analysis, support obligations may need to be co-ordinated - even on a temporary basis - to ensure that any party displaced by a sale will have the resources to arrange reasonable replacement accommodation.
  2. Orders for sale of a matrimonial home at the interim stage should not be made as a matter of course.  Fernandes v Darrigo (2018 ONSC 1039). The court must be mindful of the whole of the proceeding, and the need to achieve a final resolution for the family as fairly and expeditiously as possible.  Kereluk v. Kereluk (2004 CanLII 34595).
  1.    The stage of a child’s academic progress might also be relevant.  Sale might be delayed if it would allow a child to complete a certain grade level before an inevitable switch to another school.  On the other hand, immediate sale might be more appropriate if the child happens to be transitioning to a new school in any event.
  2.    But the mere existence of children in a household is not in itself a sufficient basis to oppose a sale.  A generic statement that children enjoy living in their current house or that they will be unhappy if they have to move, is not sufficient.  The party opposing a sale must establish a likely negative impact more serious than the inevitable adjustments and disruptions which all families face when parents decide to separate. (emphasis added)

Additionally, in Scodras v. Scodras (2005 CanLII 14146 (ON SC)), the best interests of the children were found to warrant a sale of the matrimonial home. The parties had four children together and each party cared for two children. While the mother lived in the home with the younger two children, the father only had an apartment for the older two children. Justice Gordon held that the father needed his equity from the matrimonial home to place the older children in his care on an equal footing with the younger children who were in the mother’s care.

Financial hardship

In Jarvis, the father had sole ownership of the matrimonial home. While he moved out of the home after the parties’ separation, the mother enjoyed de facto exclusive possession of the matrimonial home with the two children of the marriage for approximately seven years. The father had requested the mother’s consent to sell the home, liquidate the equity and ameliorate the parties’ ability to look after the children on an equal economic footing. The mother refused the sale. Ultimately, the father brought a motion for an order under section 23 of the Family Law Act, to dispense with the mother’s consent to sell the property.

The father had been carrying the property, including two mortgages, in addition to his child and spousal support payments.  Despite earning a good income, he incurred a monthly deficit in the order of $4,000.  He serviced a personal line of credit and two credit cards, all approaching $50,000.  He had to borrow money from family members in the total amount of almost $100,000.  He was in arrears with his landlord.  The effect of this staggering debt could mean that the father would soon be unable to provide a home for the children during his parenting days.

Justice Akazaki acknowledged the father’s financial hardship and granted the motion for sale of the matrimonial home. At paragraph 21, his Honour also discussed that the circumstances of the children clearly dictated that it was in their best interest to free up the capital locked into the home, and allow the parents to relieve financial pressure.

Nasser v. Nasser (2024 ONSC 303)

In the recently heard case of Nasser v. Nasser (2024 ONSC 303), the parties were married in 1975 and separated in 2020, after which the husband moved out of the matrimonial home. The parties were retired and had their two independent adult children. The husband had approximately $600,000 in savings and drove a Porsche, while the wife had about $123,000 in savings.

The husband brought a motion for sale of the matrimonial home and requested that the proceeds of the sale be held in trust.  He stated that he required the equity from the home to fund his day-to-day living expenses. The wife resisted the sale of the home and asked for its exclusive possession. 

Justice Mandhane reiterated that as a joint tenant, the husband was prima facie entitled to partition and sale of the home. However, the husband’s motion would not proceed if the wife could establish that the sale would prejudice the rights of either party under the Family Law Act, or that the husband had been malicious, vexatious or oppressive in pursuing the sale.

The wife argued that the proceeds from the sale would be required to secure a future order of equalization and that she may be entitled to an uneven distribution of funds. Justice Mandhane held that there was no risk of the funds being depleted or otherwise becoming unavailable for the purposes of equalization since the husband had requested that the proceeds be held in trust.

In terms of the wife’s argument for exclusive possession, Justice Mandhane did not accept that the wife would be unable to find alternate housing. Her Honour discussed that the wife may not have as favourable a financial position as the husband, but she still had substantial savings.

Justice Mandhane ordered for that the matrimonial home be listed for sale withing 60 days of the date of the order. Her Honour also order the wife to pay $5,000 in costs to the husband for her unreasonable position resisting sale of the home.

Conclusion

Key takeaways? The court will consider whether there is malicious, vexatious or oppressive conduct on part of the person seeking the sale. The court is also concerned with the substantive rights of the party seeking the sale, and whether they will be prejudiced if the sale is not ordered. In addition, the best interests of the children will be primary consideration in this analysis.

Ultimately, as discussed in Davis v. Davis (1953 ONCA 148), each case must be considered on its own facts. The court must consider all relevant factors in exercising its discretion.

Therefore, as family lawyers, it is important for us to be mindful of all of the above factors whether we represent the spouse trying to sell or trying to stop the sale.