In Chhom v. Green, 2023 ONCA 692, the Ontario Court of Appeal recently affirmed that occupation rent is not an exceptional remedy in Ontario.
The parties owned the matrimonial home in common. Ms. Chhom enjoyed exclusive possession of the matrimonial home after separation in July 2017. Mr. Green made voluntary payments to Ms. Chhom of $4,000 per month from separation to January 1, 2020 (approximately two years before trial).
At trial, Ramsay J. ordered, among other things, that the home be sold forthwith, the proceeds paid into Court, and that Ms. Chhorn continue to have exclusive possession until March 2023. He also ordered that Ms. Chhom pay Mr. Green $31,500 in occupation rent while Mr. Green pay Ms. Chhom spousal support and an equalization payment. Ms. Chhom appealed the decision, arguing that the trial judge erred in law by not applying the requirement that an order for occupation rent be “exceptional”.
The Court of Appeal disagreed, citing Griffiths v. Zambosco, 54 O.R. (3d) 397 (ON CA): “While it is settled law in Ontario that an order for occupation rent be reasonable, it need not be exceptional.” In Griffiths, the Court of Appeal found that orders for occupation rent need to be “reasonable and equitable” and based on the following factors: “the timing of the claim for occupation rent; the duration of the occupancy; the inability of the non-resident spouse to realize on their equity in the property; any reasonable credits to be set off against occupation rent; and any other competing claims in the litigation.”
Applying the Griffiths factors, the Court of Appeal here found the trial judge properly, though not explicitly, applied the correct legal test. Notably, Mr. Green enjoyed no tax relief from his $4,000 monthly payments to Ms. Chhom who, as a result, had a tax advantage along with an extended period of exclusive possession (ultimately lasting 63 months). The trial judge also found the home could have conservatively rented for $1,750 per month; the $31,500 awarded was far less than what was potentially owing.
The Court of Appeal was notably silent on the post-Griffiths body of case law expanding on the five factors (see for example: Higgins v. Higgins, [2001] O.J. No. 3011 at paragraph 53 and Saroli v. Saroli, 2021 ONSC 4450 at paragraph 312).
From Chhom v. Green it is clear that delay is a key factor when claiming occupation rent. Ms. Chhom and Mr. Green separated in July 2017 and the trial decision was made just over five years later. The fact that Ms. Chhom lived in the home alone for over five years created a substantial claim by Mr. Green and undoubtedly contributed to the award.
Timeliness is essential to two of the factors applied by the Court; litigants should consider their living arrangements realistically and review them frequently so they can avoid such a compelling claim for occupation rent. The non-occupying party may wish to consider a motion for the sale of the matrimonial home as soon as possible rather than being left to claim occupation rent (and having to quantify the value of the rental). On the other hand, occupying parties should weigh the potential rent owing versus their savings accumulated by staying in the home. Even if they are paying for the carrying costs of the home, occupying parties should also consider whether those carrying costs truly offset against a claim for occupation rent, given Ontario’s soaring housing market.
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