Besides the numerous statutes, regulations, and rules dealing specifically with family law, family lawyers need to be acquainted with some legislation of general application that we may not think of in connection with a family law case. This article is a brief introduction to the Partition Act, RSO 1990, c P.4.
Partition Act, R.S.O. 1990, c. P.4
The Partition Act comes into play when a co-owner of real property (whether a joint tenant or a tenant in common) wants an order for the property to be partitioned or sold, so that they can recover their equity, and the other co-owner does not agree. An order for partition or sale can also be brought by a mortgagee or other third party with an interest in the property.
The Partition Act applies only to property in Ontario: Spagnola v. Romanelli, 2021 ONSC 4236. The reason is that the courts may not make in rem orders concerning property in a foreign jurisdiction, which includes other provinces and territories. See: Duke v. Andler, [1932] S.C.R. 734, 1932 CanLII 32 (SCC) ; Catania v. Giannattasio 174 D.L.R. (4th) 170, 118 O.A.C. 330 (C.A.).
Partition means physically dividing the property into two or more parcels. In family law cases, the Partition Act cannot be used to divide property in specie and distribute a part to each spouse. It can only be used to order a sale. See: Buttar v. Buttar, 2013 ONCA 517 (the property in question was a farm).
Interim sale of the matrimonial home; limited jurisdiction of the FLA
One spouse may want to sell the matrimonial home before trial, while the other spouse does not want it sold. Under the Family Law Act, RSO 1990, c F.3, the court’s jurisdiction to order that the matrimonial home be sold is limited. Sections 9(1)(d), 10, and 23 empower the court to order sale of a matrimonial home, but they do not give the court jurisdiction to order a sale of property owned jointly or as tenants in common.
Section 9(1)(d) of the FLA empowers the court to order that property be partitioned or sold, but only as a way of enforcing an equalization payment. The section does not grant a party a substantive right. See: Martin v. Martin, 8 O.R. (3d) 41, 89 DLR (4th) 115 (C.A.); Maguire v. Maguire, 45 R.F.L. (5th) 430, [2003] OJ No 3060 (QL) (S.C.J.); Batler v. Batler, 67 O.R. (2d) 355, 18 R.F.L. (3d) 211 (H.C.J.). In Buttar v. Buttar, above, the Court of Appeal held that the application judge erred in partitioning a jointly owned farm property and distributing it between the parties under s. 9 of the FLA.
Under s. 10 of the FLA, sale of property cannot be ordered unless there is a question of ownership or right to possession of particular property between the parties: See: Martin v. Martin; Mignella v. Federico, 2012 ONSC 5696, at para. 27.
Sections 19-23 of the FLA protect married spouses’ right to possession of the matrimonial home. Section 21 prohibits a spouse from disposing of or encumbering the matrimonial home unless the other spouse participates or consents to the transaction. Section 23 provides remedies where s. 21 has been breached and also protects a sole owner spouse from being held hostage, intentionally or not, by the other spouse’s inability or refusal to consent to a sale.
FLA, s. 23(b) provides that where one spouse wishes to dispose of or encumber their interest in the matrimonial home, but the other spouse is missing or unavailable; is incapable; or is unreasonably refusing to consent, the court may authorize the disposition or encumbrance of the home and may impose conditions. See: Batler v. Batler above where the court reviewed the previous case law and concluded that s. 23 does not give the court jurisdiction to order sale of a jointly owned property. It protects the possessory interest of a non-owning spouse, while permitting a sole owner to sell the property if the non-owning spouse’s consent cannot be obtained or is unreasonably withheld.
Partition or sale under the Partition Act
Section 2 of the Act sets out who may be required to accept partition or sale of land. This article focuses on situations where spouses own property, the matrimonial home in particular, as joint tenants or tenants in common.
Section 3(1) sets out who may bring an action or make an application for partition or sale. It specifies that sale may be ordered if the court considers it more advantageous to the parties. Where the property in question is a matrimonial home, sale is the appropriate order, unless the resisting party can satisfy the court that sale is premature.
The remaining provisions of the Act deal with matters such as sale of lands passed by a will or an intestacy, guardianship of minors and the interests of missing person, and effects of a court-ordered sale on minors and incapable persons.
Appeal route
An order for partition or sale is a final order. See: Laurignano v. Laurignano, 2009 ONCA 241. However, under s. 7 of the Act, “[a]n appeal lies to the Divisional Court from any order made under this Act” and not to the Court of Appeal.
If you wonder why the Court of Appeal has decided so many of the Partition Act cases below, despite s. 7 of the Act, the main reasons are (1) the appeal of the Partition Act order was brought with other orders that lie within the jurisdiction of the Court of Appeal; (2) a Divisional Court appeal order was being appealed; or (3) nobody raised an issue about jurisdiction.
Pre-trial sale of a co-owned matrimonial home
A co-owner has a prima facie right to partition or sale of the co-owned property: Davis v. Davis, [1954] O.R .23, [1954] 1 D.L.R. 827 (C.A.).
The decision whether to grant or refuse an order for sale is discretionary; each case must be considered in the light of its own facts and circumstances; and the court must then exercise its discretion in a judicial manner. See: Davis v. Davis, above.
The court’s discretion to refuse an application for partition or sale is not untrammeled. It is limited to cases where there has been malicious, vexatious or oppressive conduct in relation to the request for partition or sale: Latcham v. Latcham, 27 R.F.L. (5th) 358 (Ont. C.A.). However, there is tension between a co-owner’s prima facie right to partition or sale and the protection of parties’ rights under the Family Law Act. The “malicious, vexatious or oppressive conduct” standard is modified in family law cases.
An application under s. 2 of the Partition Act should not proceed if it can be shown that it would prejudice the rights of either spouse under the Family Law Act: Silva v. Silva, 1 O.R. (3d) 436, 30 R.F.L. (3d) 117 (C.A.). Orders for the sale of a matrimonial home should not be made as a matter of course before Family Law Act issues, in particular the equalization payment, have been resolved. See: Martin v. Martin above.
“Prejudice” in this context means prejudice to a substantial right. Inconvenience is not enough to prevent a sale. Disappointment is not enough. The fact that one spouse would like to buy the other spouse’s interest in the home is, by itself, not enough to prevent a third-party sale if the parties cannot agree to terms of a buy-out. See Silva, above, and Gainer v. Gainer, [2006] OJ No 1631, 24 R.F.L. (6th) 18 (S.C.J.).
The Court of Appeal held in Martin v. Martin, above, that a right of first refusal is not available on a sale under the Partition Act. While a matrimonial home occupies a special place in the statutory scheme established by the FLA, once it is ordered to be sold, each spouse is entitled to receive fair market value for their interest in it.
If the party resisting a pre-trial order for the sale of a matrimonial home has established a prima facie case that he or she is entitled to a competing interest under the FLA, the court should deny the motion for sale, unless the selling party can demonstrate that the sale would not prejudice the rights of the resisting party. If no prima facie case has been established, the right to sale prevails. See: Goldman v. Kudeyla, 2011 ONSC 2718.
The cottage, too — keep in mind that the spouses can own more than one matrimonial home. Depending on the facts and circumstances, the court might order sale of one property but not the other.
Exclusive possession
An order for sale may be refused if one spouse has been granted exclusive possession of the matrimonial home, or has a strong case for exclusive possession because the children’s best interests or another compelling interest requires it. If the case for exclusive possession is not strong, sale will be ordered. See: Gainer v. Gainer, 24 R.F.L. (6th) 18, [2006] OJ No 1631 (QL); and Martin, above.
On the flip side, if sale is ordered or agreed to and one spouse is likely to obstruct the sale, the court may grant the spouse who applied for sale exclusive possession and exclusive carriage of the sale. See: Flores v. Flores, 2020 ONSC 5809.
There is abundant case law on pre-trial sale of a matrimonial home. In this brief introduction I have cited mostly the foundational cases. I hope it will help you, whether your client is seeking the sale before trial of a matrimonial home or wants sale to be deferred.
Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.