In civil litigation, there are sometimes disputes between parties who own land together. When co-owners of property cannot agree and co-ownership ceases to be feasible, one remedy is to seek a court order for the partition and sale of the land.
What is a Partition or Sale?
Rule 66.01(1) of Ontario’s Rules of Civil Procedure states that anyone who is entitled to do so can commence an application or action to partition land under the Partition Act.[1]
The Partition Act states:
Who may be compelled to make partition or sale
2 All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. [emphasis added]
Who may bring action or make application for partition
3 (1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.
When proceedings may be commenced
(2) Where the land is held in joint tenancy or tenancy in common or coparcenary by reason of a devise or an intestacy, no proceeding shall be taken until one year after the decease of the testator or person dying intestate in whom the land was vested.
In Davis. v. Davis,[2] the Ontario Court of Appeal held there is a prima facie right of a joint tenant, tenant in common or coparcener to the partition or sale of land and a corresponding obligation to permit partition or sale. Only in exceptional circumstances will a joint tenant or tenant in common be denied their request that a property be partitioned or sold.[3]
A court has the discretion to refuse a request for partition or sale of land when the party requesting partition or sale has engaged in “malicious, vexatious or oppressive conduct”.[4] For instance, the Ontario Court of Appeal has stated:
“oppression” properly includes hardship, and a judge can refuse partition and sale because hardship to the co-tenant resisting the application would be of such a nature as to amount to oppression.[5]
The onus is on the party opposed to the request to established wrongful conduct – just because a party requests a partition or sale does not equate to bad faith or malicious conduct.[6]
Ultimately, the court has broad discretion and the power to make all allowances and give such directions that will result in equity to all the parties involved.[7]
Partition or Sale process
Once an order for partition or sale is made, a judge can direct that the mechanics of the sale be determined by a referee (such as another judge, an association judge, or private arbitrator). The information found in Ontario court Form 66A gives direction to the referee as to what they need to determined before allowing the distribution of the sale proceeds.[8]
Rule 66.03 of the Rules of Civil Procedure states that “all money realized in a partition proceeding from sale of land shall forthwith be paid into court, unless the parties agree otherwise, and no money shall be distributed or paid out except by order of a judge or, on a reference, by order of the referee”[9].
In the recent case of Peraziana v. Savage,[10] the court ordered that the estate of the deceased was to facilitate the sale of the property and distribute the proceeds, less any liabilities owing, in the ordinary course of the administration of the estate.
Case law
The partition and sale of a property was recently ordered in Sauve v. Davison.[11] In this case, the deceased died without a Will. The deceased held an interest in a property with her three brothers, which they held as tenants in common.
The deceased’s surviving spouse, acting as estate trustee, approached the three brothers and inquired if they were interested in purchasing the estate’s share of the property. Following no material response, he commenced an application for partition and sale.
The court noted that the deceased’s estate, as co-owner of the property, has a prima facie right to an order for partition and sale. The court further noted that none of the three brothers had responded to the application, nor was there evidence of malicious, vexatious or oppressive conduct. Accordingly, the court ordered that the property be partitioned and sold.
In Gartree Investments Ltd. v. Cartree Enterprises Ltd.,[12] the court refused a request for partition and sale. Gartree Investments Ltd held an interest in four Toronto properties and requested that they be partitioned and sold. The two remaining co-owners offered to buy-out Gartree Investments Ltd’s share of the properties for 15% over market value. This offer was declined.
The court found that Gartree Investment Ltd’s request was both vexatious and malicious. They were found to have abused their prima facie right under the Partition Act in an attempt “to thwart the legitimate concerns of the majority of co-owners”. This was sufficient reason for the court to exercise its discretion to refuse the application for partition and sale.
Summary
Obtaining an order for the partition or sale of a property is the prima facie right of any property owner in Ontario. However, this right is subject to the conduct of the parties involved and the ultimate discretion of the court.
The partition or sale of property is often seen in estate disputes where beneficiaries jointly inherit real property but the parties are in dispute and there is no agreement on the management of the property.
—
[1] Rules of Civil Procedure, RRO 1990, Reg 194, Rule 66.02.
[2] Davis. v. Davis, 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.), at p. 29; See also, Inniss v. Blackett, 2022 ONCA 166, at para 23.
[3] Brienza v Brienza, 2014 ONSC 6942, Rennie v. Rennie et al., 2019 ONSC 2948, at para. 26; and Duong et al. v. Duong, 2021 ONSC 4627, at para. 7.
[4] Economopoulos (Re), 2014 ONCA 687 at para 89 and Peraziana v. Savage, 2024 ONSC 217, at para 129.
[5] Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2005), 2004 CanLII 48652 (ON CA), 75 OR (3d) 478,
[6] Ghada Kassab v. Margaret Abrahem, 2021 ONSC 3770, at para 21.
[7] Mastron v. Cotton, 1925 CanLII 464 (ON CA), [1926] 1 D.L.R. 767 (Ont. S.C. App. Div.), at p. 768.
[8] Ghada Kassab v. Margaret Abrahem, 2021 ONSC 3770 (CanLII), at para 32.
[9] Rules of Civil Procedure, RRO 1990, Reg 194, Rule 66.03
[10] Peraziana v. Savage, 2024 ONSC 217, at para 129.
[11] Sauve v. Davidson, 2024 ONSC 2091 (CanLII)
[12] Gartree Investments Ltd. v. Cartree Enterprises Ltd., 2002 CanLII 49640 (ON SC)
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Written by: Oliver O'Brien
Posted on: April 25, 2024
Categories: Commentary, WEL Newsletter
In civil litigation, there are sometimes disputes between parties who own land together. When co-owners of property cannot agree and co-ownership ceases to be feasible, one remedy is to seek a court order for the partition and sale of the land.
What is a Partition or Sale?
Rule 66.01(1) of Ontario’s Rules of Civil Procedure states that anyone who is entitled to do so can commence an application or action to partition land under the Partition Act.[1]
The Partition Act states:
Who may be compelled to make partition or sale
2 All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. [emphasis added]
Who may bring action or make application for partition
3 (1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.
When proceedings may be commenced
(2) Where the land is held in joint tenancy or tenancy in common or coparcenary by reason of a devise or an intestacy, no proceeding shall be taken until one year after the decease of the testator or person dying intestate in whom the land was vested.
In Davis. v. Davis,[2] the Ontario Court of Appeal held there is a prima facie right of a joint tenant, tenant in common or coparcener to the partition or sale of land and a corresponding obligation to permit partition or sale. Only in exceptional circumstances will a joint tenant or tenant in common be denied their request that a property be partitioned or sold.[3]
A court has the discretion to refuse a request for partition or sale of land when the party requesting partition or sale has engaged in “malicious, vexatious or oppressive conduct”.[4] For instance, the Ontario Court of Appeal has stated:
“oppression” properly includes hardship, and a judge can refuse partition and sale because hardship to the co-tenant resisting the application would be of such a nature as to amount to oppression.[5]
The onus is on the party opposed to the request to established wrongful conduct – just because a party requests a partition or sale does not equate to bad faith or malicious conduct.[6]
Ultimately, the court has broad discretion and the power to make all allowances and give such directions that will result in equity to all the parties involved.[7]
Partition or Sale process
Once an order for partition or sale is made, a judge can direct that the mechanics of the sale be determined by a referee (such as another judge, an association judge, or private arbitrator). The information found in Ontario court Form 66A gives direction to the referee as to what they need to determined before allowing the distribution of the sale proceeds.[8]
Rule 66.03 of the Rules of Civil Procedure states that “all money realized in a partition proceeding from sale of land shall forthwith be paid into court, unless the parties agree otherwise, and no money shall be distributed or paid out except by order of a judge or, on a reference, by order of the referee”[9].
In the recent case of Peraziana v. Savage,[10] the court ordered that the estate of the deceased was to facilitate the sale of the property and distribute the proceeds, less any liabilities owing, in the ordinary course of the administration of the estate.
Case law
The partition and sale of a property was recently ordered in Sauve v. Davison.[11] In this case, the deceased died without a Will. The deceased held an interest in a property with her three brothers, which they held as tenants in common.
The deceased’s surviving spouse, acting as estate trustee, approached the three brothers and inquired if they were interested in purchasing the estate’s share of the property. Following no material response, he commenced an application for partition and sale.
The court noted that the deceased’s estate, as co-owner of the property, has a prima facie right to an order for partition and sale. The court further noted that none of the three brothers had responded to the application, nor was there evidence of malicious, vexatious or oppressive conduct. Accordingly, the court ordered that the property be partitioned and sold.
In Gartree Investments Ltd. v. Cartree Enterprises Ltd.,[12] the court refused a request for partition and sale. Gartree Investments Ltd held an interest in four Toronto properties and requested that they be partitioned and sold. The two remaining co-owners offered to buy-out Gartree Investments Ltd’s share of the properties for 15% over market value. This offer was declined.
The court found that Gartree Investment Ltd’s request was both vexatious and malicious. They were found to have abused their prima facie right under the Partition Act in an attempt “to thwart the legitimate concerns of the majority of co-owners”. This was sufficient reason for the court to exercise its discretion to refuse the application for partition and sale.
Summary
Obtaining an order for the partition or sale of a property is the prima facie right of any property owner in Ontario. However, this right is subject to the conduct of the parties involved and the ultimate discretion of the court.
The partition or sale of property is often seen in estate disputes where beneficiaries jointly inherit real property but the parties are in dispute and there is no agreement on the management of the property.
—
[1] Rules of Civil Procedure, RRO 1990, Reg 194, Rule 66.02.
[2] Davis. v. Davis, 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.), at p. 29; See also, Inniss v. Blackett, 2022 ONCA 166, at para 23.
[3] Brienza v Brienza, 2014 ONSC 6942, Rennie v. Rennie et al., 2019 ONSC 2948, at para. 26; and Duong et al. v. Duong, 2021 ONSC 4627, at para. 7.
[4] Economopoulos (Re), 2014 ONCA 687 at para 89 and Peraziana v. Savage, 2024 ONSC 217, at para 129.
[5] Greenbanktree Power Corp. v. Coinamatic Canada Inc. (2005), 2004 CanLII 48652 (ON CA), 75 OR (3d) 478,
[6] Ghada Kassab v. Margaret Abrahem, 2021 ONSC 3770, at para 21.
[7] Mastron v. Cotton, 1925 CanLII 464 (ON CA), [1926] 1 D.L.R. 767 (Ont. S.C. App. Div.), at p. 768.
[8] Ghada Kassab v. Margaret Abrahem, 2021 ONSC 3770 (CanLII), at para 32.
[9] Rules of Civil Procedure, RRO 1990, Reg 194, Rule 66.03
[10] Peraziana v. Savage, 2024 ONSC 217, at para 129.
[11] Sauve v. Davidson, 2024 ONSC 2091 (CanLII)
[12] Gartree Investments Ltd. v. Cartree Enterprises Ltd., 2002 CanLII 49640 (ON SC)
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