Whalen v Barton, 2022 NSSC 24

SUPREME COURT OF Nova Scotia Citation: Whalen v Barton , 2022 NSSC 24 Date: 2022-01-24 Docket: Hfx. No. 504220 Registry: Halifax Between: Jennifer Louise Whalen Plaintiff v. Douglas Wayne Barton Defendant Judge: The Honourable Justice Gail L. Gatchalian Heard: December 16, 2021 in Halifax, Nova Scotia Counsel: Quy Linh, for the Plaintiff Brian F. Bailey, for the Defendant Joshua J. Santimaw, for the Royal Bank of Canada, watching Luke C. Godin, for CitiFinancial Canada East Corporation, watching BY THE COURT: Introduction [ 1 ] This is a motion for

summary judgment on the evidence. The Plaintiff, Jennifer Louise Whalen, and the Defendant, Douglas Wayne Barton, own a property together. They bought it in 2012 when they were a common law couple. They separated in 2018 and she moved out. Mr. Barton still lives there with his partner and their child. Ms. Whalen wants an order for the sale of the property and for equal division of the sale proceeds. Mr. Barton wants to keep the property and buy out Ms. Whalen’s interest. [ 2 ] Ms. Whalen has made a motion for

summary judgment. She wants an order under the Partition Act , R.S.N.S. 1989, c.333 . She has a right to have the property sold and the proceeds divided. There is a strong presumption that the sale proceeds will be divided equally when the property is held in joint tenancy.

Summary [ 3 ] Because Ms. Whalen and Mr. Barton own the property as joint tenants and a fair division of the property is not possible, Ms. Whalen is entitled on the undisputed facts and on the law to an order for sale. There are two mortgages on the property. Mr. Barton argues that the second mortgage is Ms. Whalen’s personal debt and that the payment of that debt should come out of her share of the proceeds. The undisputed evidence is that the second mortgage was signed by Mr. Barton, as well as by Ms. Whalen, and that Ms. Whalen used the money to purchase items for the home.

The evidence on the motion does not rebut the presumption of equal sharing in joint tenancy. Ms. Whalen is entitled to an order for an equal share of the net sale proceeds, subject to an adjustment for mortgage payments made after the parties separated. There is a factual dispute about the date of the parties’ separation. One says that they separated in February, 2018 and the other says that the separation happened in December, 2018. [ 4 ] Ms. Whalen is entitled to

summary judgment in part. The property will be sold and the proceeds divided equally subject to equitable allowances in both parties’ favour for mortgage payments made by them from January 1, 2019 to the date of sale. There is a dispute about their entitlement to equitable allowances for mortgage payments made between February 1, 2018 to December 31, 2018. That will be resolved at trial. The Test for

Summary Judgment

[5] The first question to ask in a motion for

summary judgment is whether there is a genuine issue of material fact. If the answer is“yes,” the motion fails. If the answer is “no,” the second question is whether there is a question of law that requires determination. If theanswer to questions 1 and 2 are both “no,”

summary judgment must issue. The onus is on Ms. Whalen to show that there is no genuineissue of material fact. However, the judge’s assessment is based on all the evidence from any source. A material fact is one that wouldaffect the result. Each party is expected to put their best foot forward with evidence and legal submissions. See Civil Procedure Rules13.04(1), (2) and (4) and Shannex Inc. v Dora Construction Ltd., 2016 NSCA 89 at paras.34 and 36.

The Partition Act [6] Under s.4 of the Act, "[a]ll persons holding land as joint tenants, co-parceners or tenants in common, may be compelled to havesuch land partitioned, or to have the same sold and the proceeds of the sale distributed among the persons entitled, in the mannerprovided in this Act.” [7]

Section 5 of the Act gives the right of action to any anyone holding land as joint tenants, co-parceners or tenants in common. [8] Section 28(1)(

a) of the Act provides that “where the land, or any part thereof, cannot be divided without prejudice to theparties entitled … the Court or a judge may order that such land shall be sold after such notice and in such manner as the Court or judgedirects, and that the net proceeds of such sale shall be divided among the parties entitled.” [9] Therefore, if land is co-owned and the nature of the property is such that the land is incapable of division, there is a primafacie right to an order for sale under the Act: see, for example, Finanders v. Finanders, 2005 NSSC 145 at para.16 and Roach v.

McNeil,2014 NSSC 112 at para.60. The court is required to compel a sale if no sufficient reason can be shown why such an order should not bemade: see Finanders, supra at para.14 and Afolabi v. Fala, 2014 ONSC 1713 at para.27.

Ontario courts have confined “sufficientreasons” to a narrow standard, requiring evidence of malicious, vexatious or oppressive conduct before they will refuse an order for saleor partition: see Afolabi, supra at para.33. [10] The issues of sale and division of proceeds are treated separately: see Finanders, supra at paras. 9 and 19. [11] There is a strong presumption that the sale proceeds will be divided equally in situations of joint tenancy, subject to certainequities: see Anderson v.

Wilson (1986), (NS SC), 73 N.S.R. (2d) 1 (T.D.) at paras.12 and 24 and Soubliere v.MacDonald, 2011 NSSC 98 at paras.21-22. [12] The cases support crediting the party who paid the full mortgage payments since separation with one-half of those payments:see Soubliere, supra at paras.32 and 35. The Request for Sale [13] Ms. Whalen has demonstrated that there is no genuine issue of material fact concerning her request for an order for sale. Sheand Mr. Barton own the property as joint tenants and a fair division of the property is not possible. The property is a 4545 square foot lotthat contains a single-family home.

There is no question of law to be determined. Ms. Whalen is entitled on the undisputed facts and onthe law to an order for sale. The Second Mortgage [14] In his Statement of Defence, Mr. Barton claimed that Ms. Whalen used $25,000 of the $30,000 loan to buy a car. The partieswere cross-examined at the hearing. In his testimony, Mr. Barton acknowledged that he was incorrect when he said that Ms. Whalenused the second mortgage to buy a car. [15] In his affidavit, Mr. Barton said that Ms. Whalen obtained the second mortgage “to pay various debts she had.” [16] In response, Ms.

Whalen’s affidavit evidence was that the second mortgage “was used jointly for the benefit of the property,and for the common law relationship at that time.” She said that $8,000 to $10,000 of the funds were used for landscaping and a fencefor the property, and that the remainder was used for furniture and household items and to pay off credit cards with The Brick, AshleyFurniture and Home Depot. Ms. Whalen attached a copy of the second mortgage document to her affidavit. It is signed by both parties. [17] In his rebuttal affidavit, Mr. Barton said that Ms.

Whalen obtained a personal loan of approximately $20,000.00 in 2014, whichwas not secured by a mortgage. He said that $6,000 to $8,000 of those funds were used for renovations that benefitted them both, but thatthe remainder was used exclusively by Ms. Whalen. Mr. Barton said that Ms. Whalen requested further advance on the loan but that thebank required security, resulting in the second mortgage. Mr. Barton said that funds from the second mortgage were spent exclusively byMs. Whalen to pay credit cards in her name that were used exclusively by her for things that she wished. He said that Ms.

Whalen alsospent the funds from the second mortgage on her cellphone bill, a pay-day loan account and other personal things. He said that he had noaccess to those funds and never received any of those funds. [18] In her oral testimony, Ms. Whalen maintained that the money from the loan was used for the property, for example, to build afence, for landscaping and windows, and to pay off credit cards in her name that were used to buy furniture and items for the home, suchas groceries, bathroom products, sheets and pillows.

At various times, she said that these items were paid for from the 2014 loan, and atother times she said that they were paid for from the 2017 advance. She could not remember whether there was a balance left on the2014 loan when they executed the second mortgage in 2017. At no time did she say that the funds from the second mortgage, or thecredit cards that were paid from the funds, were used for anything other than the property and the home. Ms. Whalen disagreed with thesuggestion that Mr. Barton had no say in how the funds from second mortgage were spent.

[ 19 ] Mr. Barton acknowledged in his testimony that he signed the second mortgage as a co-borrower and that he understood that by signing the mortgage he was responsible for it if Ms. Whalen did not pay or if she defaulted. He agreed that, on paper, the money was half his, but said that he received no money from the loan. He agreed that Ms. Whalen bought furniture, groceries, and “everything she says,” but that “it was her doing,” not his. He said that he had a couch and coffee table that were only a year-and-a-half old. He did not think it was necessary to buy new furniture, but Ms.

Whalen and her parents wanted to buy furniture and make upgrades to the home. He did not want a big debt, which is why he “let her do everything she wanted to do,” and “that’s why the cards were in her name.” He agreed that, while they were together, it was a “normal” relationship, and that one would pay for one thing, one would pay for the other, and sometimes they would “go splits”. He agreed that Ms. Whalen used the loan to buy a new couch and that he sat on it. He agreed that they shared the same groceries, and ate the same food, adding that he paid half for the groceries.

He agreed that the things that were done for the home were a benefit to him, but that all he wanted was the fence for their dogs. He said that, with respect to the other expenditures, he told Ms. Whalen, “you can do whatever you want, it has nothing to do with me.” [ 20 ] In re-examination, Mr. Barton said that the property improvements that Ms. Whalen talked about were not paid from second mortgage but from the 2014 loan, and that the 2014 loan balance was paid in full before the 2017 mortgage. Mr.

Barton said that, in or around August, 2021, he contacted the bank and was given documents pertaining to the second mortgage. Mr. Barton did not enter into evidence any of the documents he obtained concerning the second mortgage. He confirmed that he did not want to take on too much debt, which is why the credit cards for Ashley Furniture and Home Depot, for example, were in Ms. Whalen’s name. During their relationship, he had no credit cards in his name. [ 21 ] I am not to assess credibility or weigh evidence on a motion for

summary judgment on the evidence, and I have not done so: see Hatch Ltd. v. Atlantic Sub-Sea Construction and Consulting Inc. , 2017 NSCA 61 at para25 . [ 22 ] The facts material to the question of whether the second mortgage is a personal debt of Ms. Whalen are undisputed and are as follows: • Mr. Barton signed the second mortgage as a co-borrower. • He understood that by signing the mortgage he was responsible for it if Ms. Whalen did not pay or if she defaulted. • On paper, the money was half his. • Ms.

Whalen used the funds from the second mortgage, or the credit cards that she paid with the funds, to buy furniture, groceries, and other items for the home. • While they were together, one would pay for one thing, one would pay for the other thing, and sometimes they would “go splits.” • The things that Ms. Whalen bought for the home with the funds from the second mortgage and with the credit cards paid with the funds were a benefit to Mr. Barton. [ 23 ] Ms.

Whalen has established that there is no genuine issue of material fact with respect to the second mortgage. [ 24 ] There is no question of law that requires determination. There is a strong presumption of equal sharing, subject to certain equities. Mr. Barton’s argument in favour of an equitable allowance depended on characterizing the second mortgage as Ms. Whalen’s personal debt. On the undisputed facts, this is not an accurate characterization. He has not rebutted the strong presumption of equal sharing. The equities are not in his favour. Even though it was Ms.

Whalen who spent the money, the undisputed facts are that he signed the second mortgage as a co-borrower, he understood that he was responsible for the second mortgage if Ms. Whalen did not pay or if she defaulted, the money was half his, Ms. Whalen used the funds or the credit cards that she paid with the funds to buy items for the home, and Mr. Barton benefitted for those items. Ms. Whalen is entitled to an order for the equal division of the net sale proceeds, subject to my discussion immediately below concerning the mortgage payments made after separation.

Post-Separation Mortgage Payments [ 25 ] The undisputed facts are that:

(1) Mr. Barton has been making the full payments on the first mortgage, approximately $435 bi- weekly, since separation;

(2) Ms. Whalen has been making the full payments on the second mortgage, approximately $580 monthly, since separation; and

(3) Mr. Barton contributed $1850 to the second mortgage since separation. [ 26 ] Neither party lead evidence about what it would have cost Mr. Barton to rent or who has been paying the property insurance and property taxes since separation. Both parties were required to put their best foot forward. [ 27 ] There is a dispute about the date of separation, and whether it was in February or December of 2018. There is therefore a dispute about whether the parties should receive a credit for the mortgage payments that they made between February and December of 2018.

This is a genuine issue of material fact. [ 28 ] There is no genuine issue of material fact with respect to the mortgage payments made since January 1, 2018. There is no question of law that requires determination with respect to these mortgage payments. The cases support granting such a credit to the party who has made the full mortgage payments since separation. Therefore, Mr. Barton is entitled to a credit, out of the net sale proceeds, for half of the payments he has made on the first mortgage since separation. Ms.

Whalen is also entitled to a credit, out of the net sale proceeds, for half of the payments she had made on the second mortgage, less $1850. This results in a net credit to Mr. Barton. [ 29 ] A sum of money equivalent the net credit to Mr. Barton from February 1, 2018 to December 31, 2018 can be held back from the net sale proceeds and placed in trust pending determination of the date of separation. As a result, I find that the dispute about the date

of separation can be divided from the other issues in the motion and will not affect the determination of the other issues. See P roost v. Ferncroft Equities Ltd. , 2014 NSSC 99 at paras.26-27. Order for Partial

Summary Judgment [ 30 ] Ms. Whalen’s motion for

summary judgment is granted in part. Ms. Whalen is entitled to an order for sale, on the terms set out below, and for the equal distribution of the net sale proceeds, subject to equitable allowances in both parties’ favour on account of the mortgage payments made by them from January 1, 2019 to the date of sale. [ 31 ] There is a genuine issue of material fact regarding the parties’ entitlement to an equitable allowance for mortgage payments made by them from February 1, 2018 to December 31, 2018. This issue will be determined at trial. The Terms and Conditions of Sale [ 32 ] Under Rule 13.07(1), an order for

summary judgment may provide any remedy the court provides on the trial or hearing of a proceeding. [ 33 ] Mr. Barton wants an opportunity to purchase Ms. Whalen’s interest in the home to avoid a sale. I decline to order this for three reasons: 1. Ms. Whalen does not agree to the proposal. She wants the property to be listed on the open market with a real estate agent to maximize the sale price See Darlington v. Moore , 2011 NSSC 152 at para.61, MacDonald v. Jollymore , 2006 NSSC 152 at paras.44-45, Tabensky v. Campbell , 2012 NSSC 39 at paras.14 and 290, and Braithwaite v.

Turner , 2015 NSSC 221 at para.32, where, on agreement, the court granted one party time to purchase the other party’s interest, failing which the property would be sold. 2. There is no current appraisal of the property and therefore insufficient evidence with which to calculate the value of the property and Ms. Whalen’s interest: see K.A.R. v. P.J.T. , 2018 NSSC 4 , where the respondent was given time to purchase the property at full value before sale despite the applicant having requested sale by sheriff, but where the parties agreed on the value of the home: at paras.60 and 170. 3.

A sale through a real estate agent is likely to maximize the sale price: see Roach v. McNeil , 2014 NSSC 112 at para.64 [ 34 ] Mr. Barton is not precluded from making a competitive offer to purchase the property once the property is listed for sale. [ 35 ] Nonetheless, I will provide the parties with time to reach an agreement regarding the sale of the property.

If the parties do not reach an agreement by 5 p.m. on February 24, 2022, the property will be sold on the following terms: • The parties must, no later than April 25, 2022, list the property at 85 Colby Drive, Dartmouth, Nova Scotia, PID #40283434 for sale with a mutually-acceptable realtor knowledgeable of property values in the area where the property is located, and at a list price arrived at in conjunction with the realtor. In the event that the parties cannot agree on a realtor, either party may apply to the court, on abbreviated notice, for an order confirming the realtor or list price, or both.

Costs may also be sought at this time. • No reasonable offer will be refused by either Ms. Whalen or Mr. Barton. In the event that the parties cannot agree on what is a reasonable offer, either party may apply to the court, on abbreviated notice, for an order confirming that an offer is reasonable. Costs may also be sought at this time. • Both parties must co-operate fully in the listing and sale of the property and each party is to, without delay, sign whatever documentation may be required, or perform such actions that may be required, to effect the terms and provisions of this order. • Mr.

Barton must cooperate with the realtor in showing the property to potential purchasers. • Mr. Barton is to continue making the payments on the first mortgage until the property is sold. • Ms. Whalen must continue to make the payments on the second mortgage until the property is sold. • There was no evidence of who has been paying the property insurance, property taxes or utility bills since separation.

The party who has been paying these expenses since separation must continue to pay them until the property is sold. • Once the property is sold, all encumbrances on the property shall be paid from the proceeds forthwith. Real estate commission, legal fees, and the usual adjustments on closing will be deducted from the sale proceeds. In the event that the parties cannot agree on the terms of the disbursement of the proceeds of sale, either party may apply to the court, on abbreviated notice, for an order confirming the same.

Costs may also be sought at this time. • From the balance of the net sale proceeds, the parties are to hold back an amount representing the net credit to Mr. Barton from February 1, 2018 to the end of December, 2018 (half of the mortgage payments on the first mortgage minus half of the mortgage payments on the second mortgage for those months), pending determination of the date of separation. This amount held back shall be retained in a solicitor trust account, which solicitor is mutually-acceptable to the parties.

In the event that the parties cannot agree on the amount to be held back or on the solicitor, either party may apply to the court, on abbreviated notice, for an order confirming the same. Costs may also be sought at this time. • The balance of the net sale proceeds (after payment of the encumbrances, real estate commission, legal fees, the usual adjustments

on closing, and the hold-back discussed above) shall be divided equally between the parties, subject to the following credits, which shall be calculated before the balance of net proceeds are paid to either party:

(1) Mr. Barton will receive a credit in his favour representing half of the payments he has made on the first mortgage since January 1, 2019 to the date of sale, this credit to be deducted from Ms. Whalen’s share of the net sale proceeds;

(2) Ms. Whalen will receive a credit in her favour representing half of the payments she has made on the second mortgage since January 1, 2019 to the date of sale, less $1850, this credit to be deducted from Mr. Barton’s share of the net sale proceeds. [ 36 ] Counsel for both mortgagees attended the hearing. Counsel for the mortgagees and counsel for the parties indicated that, should the court grant

summary judgment and order a sale, they had come to an agreement on a form of order that addresses the potential for a deficiency and for disclosure to the bank of listings, offers, and a draft statement of adjustments in the event of a deficiency. [ 37 ] Ms. Whalen is to prepare the order. If the parties cannot agree on costs, I will receive costs submissions within 30 calendar days of this decision. Gatchalian, J.