Ontario Superior Court of Justice dismisses joint tenant's application to order property's sale

Litigant sought to terminate her obligations towards the property

Ontario Superior Court of Justice dismisses joint tenant's application to order property's sale

The Ontario Superior Court of Justice has rejected an application to sell a property made by one of the joint tenants.

The court determined that the applicant had not incurred harm by fulfilling her obligations towards the property, and thus, issuing an order for partition and sale of the property was unnecessary.

In Weise v. Weise, 2023 ONSC 5227, the parties had entered into a joint tenancy agreement for a property. The applicant’s brother and his wife, the respondent, had sought to buy the property in May 2011 but by themselves did not qualify for a mortgage. They asked the applicant for assistance in purchasing the property; subsequently, the applicant and the respondent entered into an agreement of purchase and sale where the land title was registered under both names as joint tenants. The applicant and the respondent also became joint mortgagors via CIBC Mortgages Inc.

The applicant was named a bare trustee in a separate agreement, with the respondent becoming the beneficial owner of the land. As per the agreement, the respondent would handle all expenses related to the land, such as all realty taxes, insurance, heat, utilities, mortgage payments, and maintenance repairs.

The issue arose when the respondent and the applicant’s brother separated in January 2021, with the applicant’s brother vacating the property. In July 2021, the applicant learned that CIBC Mortgages Inc. was taking mortgage payments out of her account because the respondent was allegedly not making her payments promptly. The applicant claimed she had sought to have her name taken off the property’s title and mortgage several times, but the respondent either refused or ignored the requests.

The respondent claimed in an August 2022 affidavit that she had communicated with the mortgage company on what was needed to remove the applicant’s name from the property’s title and mortgage; she was advised that based on what she understood to be standard procedure, she needed to present the company with a separation agreement before they could consider the refinancing.

The respondent claimed that she had missed the payments because she did not know the new payment amount after the mortgage was transitioned to an open mortgage and because she had been establishing new bank accounts after the separation. She submitted that in each case, she had paid the applicant back and that the applicant was owed no money.

While the applicant confirmed that the respondent had repaid some of the missing payments, there was still an outstanding mortgage payment valued at $3,329.37. To ensure that she would no longer be responsible for mortgage-related costs and liabilities, the applicant applied for an order to sell the property. She cited the provisions of the Partition Act, R.S.O. 1990, c. P.4, and rules 3.02, 54.02, and 66.01 of the Rules of Civil Procedure.

The Ontario Superior Court of Justice dismissed the application and refused to issue such an order. The court shot down the applicant’s argument that she possessed “all the rights, powers, and obligations of a joint owner and/or that she has an interest in the Property by being named a joint owner and/or having agreed to be a joint mortgagee,” pointing out that both parties confirmed that the applicant was a bare trustee. Thus, she had “no independent power, discretion or responsibility in connection with the property.”

The court added that the trust agreement did not include a term that allowed the applicant to seek the partition and sale of the property; in the event of a sale, the applicant would also not be entitled to any share of the proceeds.

The trust agreement permitted the applicant to bring a claim against the respondent for indemnification; however, the respondent had settled her debts with the applicant. Despite the outstanding mortgage amount, the applicant had not been chased up to make further payments since July 2021. Thus, the court did not “consider a sale to be more advantageous to the parties who are interested.”

The court ruled for the application’s dismissal in full, given that the relief sought by the applicant must be preceded by an order for partition and sale, which the court refused to issue.

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