What does it mean that a person has a “prima facie” right to sell a jointly owned asset?

The term “prima facie” right to sell jointly owned assets, such as houses, rentals, real estate, and more. This means that, at first glance, one can and has the legal right to request the sale of an asset that they co-own. This is a basic right that is recognized under the law for certain individuals who have jointly owned properties.

The principle is mainly relevant in legal contests involving the partition of property, where an owner from one side wishes to sell their share or the entire property. In the context of a jointly owned property, having a “prima facie” right implies that the co-owner seeking the sale has an initial presumption of entitlement to proceed and continue with the sale.

However, this right isn’t absolute, it can be challenged or restricted based on the circumstances. Here is an example: The opposing co-owner can contest the sale by demonstrating that it would be unfair, malicious, and oppressive to them, particularly in cases involving family law or matrimonial homes. They might argue that the sale would adversely affect their financial stability, along with living arrangements, or other related legal rights.

To add on, legal challenges to the “prima facie” right often involve demonstrating significant reasons why the sale of the asset should not proceed as it might cause prejudice to the rights of the opposing party. The court will mainly consider factors for this such as the impact on any children involved, the financial situation of the parties, and other relevant circumstances to determine whether to uphold or override the prima facie right to sell the jointly owned property. In essence, while a person may have an initial legal basis to request a sale, the actual execution of this right can be complex and contingent upon a deeper legal examination of the involved parties’ circumstances and rights.

What other factors does the judge consider?

Along with the Ontario Partition Act, “The court must consider the impact of a proposed sale on children or a vulnerable spouse — including the emotional impact, and the fundamental need to ensure that they have appropriate housing.” 

Under what grounds will the sale not be forced? 

In Ontario, the courts have the discretion not the force the sale of a matrimonial home under certain circumstances, they are primarily aimed at ensuring fairness and equality to prevent any misuse of the legal processes. This discretion is crucial in cases where the motives behind the sale could lead to unfair outcomes or where the implications of such a sale could adversely affect the parties involved. In many cases, these are fragile parties involved in family separations or divorces.

Vexatious or oppressive: One of the key grounds for not enforcing the sale is if the action is considered vexatious or oppressive. This condition applies when the request to sell the property is intended to harass or unduly pressure the other party. In the situation where a request to sell is intended to cause unfair outcomes instead of a legitimate financial or personal need to liquidate the asset, the court will take over and not comply with the request. For example, if one party seeks the sale purely to inflict financial stress on the other, without any genuine necessity for the sale, the court may view this as an abusive use of the legal system and decide against forcing the sale.
Significant Prejudice: Moreover, significant prejudice against one party is another critical ground. This typically involves situations where enforcing a sale would adversely affect one party’s established legal rights under the Family Law Act, such as impacting ongoing disputes or settlements related to spousal support, child support, or property division. The court is particularly cautious to ensure that a forced sale does not preemptively undermine a certain party’s financial security or legal claims that are still yet to be resolved.
Welfare of Children: The welfare of children involved in the proceedings also plays a central role in these decisions. The court often refrains from ordering a sale if it could negatively impact the children’s living conditions, emotional stability, or educational continuity. Disrupting a child’s environment during a critical developmental period can have long-term negative effects, which the courts aim to avoid. Thus, if a sale would result in children having to move schools, lose their community ties, or significantly alter their living arrangements the court would weigh heavily against the decision to force a sale.
Financial hardship caused by the forced sale is also a significant consideration. If the sale would leave one party without reasonable alternatives for housing or would plunge them into financial instability, the courts are likely to consider these factors as a basis to reject the sale. This consideration is especially important in cases where one party might not have the means to secure similar or adequate housing, thus potentially leading to homelessness or severe financial distress.

Case Example:

Dhaliwal v. Dhaliwal, 2020 ONSC 3971 (CanLII)

• This court case covers an example where the father, who was considered “extraordinarily wealthy,” was made to sell a marital residence that was held jointly but was never occupied. This can happen when a couple is divorcing and one of them (with or without the marriage’s children) is still residing in the house. It can also happen when a couple has officially split but continues to live together. 

• Many legal principles come into consideration when needing a forced sale and it is up to the court to make that decision.