The Rural Voice, 2019-06, Page 61 In Ontario, the Partition Act
allows a co-owner of property to
apply to the Court to break up the co-
ownership. If two or more parties
own a piece of land, and one wants
out, that co-owner is generally
entitled either to an order dividing
the property itself or, more often, an
order requiring the sale of the jointly
held property and the division of the
proceeds.
The Court has a discretion to
refuse to grant partition or sale in
circumstances of “malice,
oppression, and vexatious intent”, but
the bar for exercising this discretion
is high. Also, the Court may in
certain cases award one owner a
greater share of the property or
proceeds of sale than the other co-
owner or owners, in spite of the
presumption that tenants in common
with unspecified ownership interests
are entitled to equal shares of the
property or proceeds. A common
argument in favour of unequal
division is that one co-owner
contributed more to the property than
another and should be compensated
for it (based on the law of unjust
enrichment).
In one recent case, the Ontario
Superior Court of Justice addressed
the question of whether a property
should be divided in pieces or sold.
Two former brothers-in-law were
disputing how their co-ownership of
a 100-acre farm parcel (consisting of
64 acres of agricultural land, and 36
acres of woodlot) should be ended.
Brother-in-law O made the
application to the Court for an order
to sell the property and divide up the
sale proceeds. Brother-in-law M,
who lived part of the year in a small
house on the woodlot portion, asked
the Court instead to divide up the
land itself. M proposed that he
receive the 36-acre woodlot along
with a continuing interest in the 64-
acre balance. The 64-acre section
would then be sold with O receiving
the largest portion of the proceeds of
sale to compensate for M getting the
woodlot.
As is the case in most partition
applications, the Court ordered that
the entire property be sold and the
proceeds of sale divided between the
two co-owners because the land
could not be reasonably partitioned.
Firstly, the Court found that the local
municipality would impose
restrictions on the land if it was
severed that would affect the value of
the land, something that would
prejudice of O. Secondly, M’s
proposal would result in what would
effective be a forced sale by O to M
of the woodlot portion of the
property, something that the Court
does not have jurisdiction to grant.
Thirdly, M’s proposal would compel
the two co-owners to continue, at
least for a time, in an “ongoing,
untenable relationship”; avoiding that
situation is a primary purpose of the
Partition Act. The Court rejected M’s
proposal, and also ordered that O’s
costs of the application be payable
out of M’s share of the proceeds
from the sale of the property.
In another recent case, the
Superior Court dealt with a request
for an unequal split of proceeds of
sale. A mother, the Applicant, and
her daughter, the Respondent,
disputed the division of the proceeds
from the sale of a property they had
owned together. The mother had
purchased the property in the early-
1980s with her then common law
spouse, the father of the Respondent.
The father died in 2009 and left his
share of the property to his daughter.
The property was sold in 2015, and
mother and daughter agreed to split
on an equal basis a portion of the
proceeds of the sale (representing the
2009 appraised value of the
property). The remaining proceeds
were held in trust to be disputed.
The mother brought an application
seeking an order dividing the
remaining proceeds equally between
her and her daughter.
Relying on unjust enrichment, the
daughter claimed an unequal share of
the remaining funds – three-quarters
of the remainder for her, and one-
quarter of the remainder for her
mother. The daughter had acted as
Estate Trustee of her father’s estate,
and took the position that the
increase in the value of the property
between 2009 and 2015 was
attributable to “her money, time and
effort”. She had entered into an
agreement with a farmer to clear the
property and install tile drainage,
which rendered 35 acres workable.
As such, she argued, the mother was
unjustly enriched at the expense of
the daughter, without legal
justification.
The judge hearing the case
disagreed. While she found that the
increase in value benefitted the
mother, it also benefitted the
daughter. And the judge was unable
to put a monetary value on the efforts
contributed by the daughter. With
respect to the agreement reached
with the farmer who cleared and tiled
the land, the judge questioned
“whether the time required to achieve
the agreement took 30 minutes, 30
days, or 300 days of negotiations.”
The land clearing and tiling may
have contributed to the increase in
value of the property, but the
daughter’s only contribution to this
was negotiating, creating and signing
two agreements. The judge ordered
that the remaining balance of the
proceeds of sale be divided equally
between mother and daughter.◊
______________________________
John D. Goudy’s law practice
includes real property and
environmental litigation,
expropriation law, energy regulation,
and regulatory offences. Agrilaw
provides information of interest to
the farming community, not legal
advice. Readers should consult a
legal professional about their
particular circumstances.
JUNE 2019 57
It’s time to part
ways – breaking
up co-ownership
of property
John D. Goudy
is a partner in
Scott Petrie
LLP Law Firm,
and also farms
north of
London.
Agrilaw
Deadline for the
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June 12