Joint Tenant’s Presumptive Right to Partition or Sale
1. Introduction
The law is clear that a joint tenant has a presumptive right to partition or sale of the jointly owned property. But whether the court should grant the order depends on the facts in each case. The issue was raised in the recent case, Couvillon v Douglas Coughler.[1]
2. Facts
Ms. Couvillon and Mr. Coughler were married in 1989. They purchased the family home in 1994 for approximately $125,000 and took title as joint tenants. Both contributed to the down payment. Both also contributed to the household expenses according to their means. The parties separated in 2004 or 2005 and divorced in 2006. They had limited means at the time. For that reason, they did not enter into a separation agreement or apply for equalization of net family property under the Family Law Act[2] to save on legal fees. But both co-signed mortgage renewal agreements in 2016 and 2018.
When they separated, Ms. Couvillon left the property and Mr. Coughler remained in it. He continued to pay the utilities and property taxes. He also paid the mortgage payments until the mortgage was discharged in 2019. Although Ms. Couvillon continued to own the property as joint tenant, she ceased contributing to the mortgage payments and other expenses after the parties separated.
Ms. Couvillon brought an application for an order for sale of the property under the Partition Act[3] and Rule 66 of the Rules of Civil Procedure.[4] She claimed 50% of the proceeds of sale less her share of the costs of selling the property. She claimed that Mr. Coughler promised to pay her for her share of the equity, but he denied that he ever agreed to do so. Mr. Coughler brought a cross-application. In it he acknowledged that Ms. Couvillon has an interest in the property but that she is not entitled to 50%. He sought a constructive trust from the date of the parties’ separation. The two applications were heard together.
Mr Couvillon submitted an unsworn opinion letter from a realtor estimating the current value of the property to be around $950,000 to $1,100,000. However, he disputed that estimate and instead relied on an unsworn appraisal report of the historical value of the property of $225,000 in 2006.
3. Analysis and Judgment
The court found that Mr. Coughler did not agree to share the equity in the house with Ms. Couvillon. However, it also found that she pressed him orally over the years to pay her share of the equity and that he refused to do so.
Justice Rees held that, as a registered joint tenant, Ms. Couvillon has a presumptive right to partition or sale under section 2 of the Act and went on to state that a court must compel partition or sale unless the respondent shows that there is sufficient reason for refusal. Although the court has very little discretion to refuse relief, it may do so if the respondent can establish malicious, vexatious, or oppressive conduct on the part of the applicant.
Justice Rees found that Ms. Couvillon had not acted maliciously or vexatiously. It went on to hold that granting partition or sale would not be oppressive or cause hardship to Mr. Coughler. He would not be put out on the street but could use his share of the proceeds to find alternative accommodation.
However, Justice Rees agreed that he was entitled to a constructive trust in the property since separation. He had paid for all the outgoings since then and Ms. Couvillon should not be entitled to take advantage of that. Otherwise, she would be unjustly enriched. On the other hand, to determine an equitable division the court should not rely on the 2006 historical appraised value as Mr. Coughler contended. That would cause him to be unjustly enriched at Ms. Couvillon’s expense. And therefore, it would be inequitable to freeze her entitlement at the 2006 value. Instead, she should benefit in some measure from the rise in the market value of the property.
Justice Rees concluded that, considering that Mr. Coughler shouldered the mortgage costs since separation, the fairest division would entitle Ms. Couvillon to 35% of the value of the property and Mr. Coughler to 65%.
Justice Rees went on to note that there is a presumption in favour of partition unless the parties agree or the court holds that a sale is more advantageous to the parties, or that the property is unsuitable to partition. Since the parties did not address which remedy, they preferred, his Honour gave them opportunity to make written submissions on that point.
—
[1] 2023 ONSC 4745.
[2] RSO 1990, c F.3, ss 5 and 7.
[3] RSO 1990, c P.4.
[4] RRO 1990, Reg 194.
Menu
Written by: Albert Oosterhoff
Posted on: December 23, 2023
Categories: Commentary, WEL Newsletter
1. Introduction
The law is clear that a joint tenant has a presumptive right to partition or sale of the jointly owned property. But whether the court should grant the order depends on the facts in each case. The issue was raised in the recent case, Couvillon v Douglas Coughler.[1]
2. Facts
Ms. Couvillon and Mr. Coughler were married in 1989. They purchased the family home in 1994 for approximately $125,000 and took title as joint tenants. Both contributed to the down payment. Both also contributed to the household expenses according to their means. The parties separated in 2004 or 2005 and divorced in 2006. They had limited means at the time. For that reason, they did not enter into a separation agreement or apply for equalization of net family property under the Family Law Act[2] to save on legal fees. But both co-signed mortgage renewal agreements in 2016 and 2018.
When they separated, Ms. Couvillon left the property and Mr. Coughler remained in it. He continued to pay the utilities and property taxes. He also paid the mortgage payments until the mortgage was discharged in 2019. Although Ms. Couvillon continued to own the property as joint tenant, she ceased contributing to the mortgage payments and other expenses after the parties separated.
Ms. Couvillon brought an application for an order for sale of the property under the Partition Act[3] and Rule 66 of the Rules of Civil Procedure.[4] She claimed 50% of the proceeds of sale less her share of the costs of selling the property. She claimed that Mr. Coughler promised to pay her for her share of the equity, but he denied that he ever agreed to do so. Mr. Coughler brought a cross-application. In it he acknowledged that Ms. Couvillon has an interest in the property but that she is not entitled to 50%. He sought a constructive trust from the date of the parties’ separation. The two applications were heard together.
Mr Couvillon submitted an unsworn opinion letter from a realtor estimating the current value of the property to be around $950,000 to $1,100,000. However, he disputed that estimate and instead relied on an unsworn appraisal report of the historical value of the property of $225,000 in 2006.
3. Analysis and Judgment
The court found that Mr. Coughler did not agree to share the equity in the house with Ms. Couvillon. However, it also found that she pressed him orally over the years to pay her share of the equity and that he refused to do so.
Justice Rees held that, as a registered joint tenant, Ms. Couvillon has a presumptive right to partition or sale under section 2 of the Act and went on to state that a court must compel partition or sale unless the respondent shows that there is sufficient reason for refusal. Although the court has very little discretion to refuse relief, it may do so if the respondent can establish malicious, vexatious, or oppressive conduct on the part of the applicant.
Justice Rees found that Ms. Couvillon had not acted maliciously or vexatiously. It went on to hold that granting partition or sale would not be oppressive or cause hardship to Mr. Coughler. He would not be put out on the street but could use his share of the proceeds to find alternative accommodation.
However, Justice Rees agreed that he was entitled to a constructive trust in the property since separation. He had paid for all the outgoings since then and Ms. Couvillon should not be entitled to take advantage of that. Otherwise, she would be unjustly enriched. On the other hand, to determine an equitable division the court should not rely on the 2006 historical appraised value as Mr. Coughler contended. That would cause him to be unjustly enriched at Ms. Couvillon’s expense. And therefore, it would be inequitable to freeze her entitlement at the 2006 value. Instead, she should benefit in some measure from the rise in the market value of the property.
Justice Rees concluded that, considering that Mr. Coughler shouldered the mortgage costs since separation, the fairest division would entitle Ms. Couvillon to 35% of the value of the property and Mr. Coughler to 65%.
Justice Rees went on to note that there is a presumption in favour of partition unless the parties agree or the court holds that a sale is more advantageous to the parties, or that the property is unsuitable to partition. Since the parties did not address which remedy, they preferred, his Honour gave them opportunity to make written submissions on that point.
—
[1] 2023 ONSC 4745.
[2] RSO 1990, c F.3, ss 5 and 7.
[3] RSO 1990, c P.4.
[4] RRO 1990, Reg 194.
Author
View all posts