BC Estate Lawyer- Explaining Partition and Sale of Property

Trevor Todd and Jackson Todd have over sixty years experience in estate litigation including the Partition and Property and the forced sale of same.

The Partition of Property Act provides:

Parties may be compelled to partition or sell land

2 (1) All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.

(2) Subsection (1) applies whether the estate is legal or equitable or equitable only.

Sale of property where majority requests it

6 In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions.

Given that each party is registered as a joint owner of one-half of the Property, s. 6 must be applied to allow the sale unless the respondent shows a “good reason” why the Property should not be sold. A joint owner of at least 50% has a prima facie right to an order for sale unless justice requires that no order should be made: Bindley Estate v. Quartermaine Holdings Ltd., 2017 BCSC 672 at para. 21.

In terms of the nature of this test, the Court in Ryser v. Rawlings, 2008 BCSC 1050, stated:

[34] A party who does not wish to “suffer partition or sale” bears the onus of demonstrating to the court that justice requires that the order for partition or sale not be made. As mentioned, the court’s discretion is quite narrow: Bard v. Bird, supra. Failing such a demonstration, the court must enforce the interested party’s prima facie right to partition or sale…
The Court previously suggested that its discretion to refuse partition in these circumstances was “severely limited”: Reitsma v. Reitsma, [1975] 3 W.W.R. 281, 1974 CanLII 1786 at p. 283. However, the Court of Appeal has arguably softened this position, broadening the judicial discretion to allow courts to ensure justice between the parties. The Court of Appeal has now indicated that “the discretion conferred by s. 6 is broad and unfettered”: Sahlin v. The Nature Trust of British Columbia, Inc., 2011 BCCA 157 at para. 24.

The Court of Appeal stated in Bradwell v. Scott, 2000 BCCA 576, that a good reason for refusing such an order can include serious hardship to a respondent, lack of good faith, vexatiousness or maliciousness. The list is not closed:

To the extent that “serious hardship” was said in Dobell to be the test for “good reason to the contrary” I would respectfully disagree. Serious hardship to a respondent may be a proper ground for refusing an order for sale, as might lack of “good faith, vexatiousness or maliciousness” on the part of the petitioner. But these are not the exclusive measure of “good reason”. I agree with Mr. Justice Seaton that we should not limit the discretion by creating a general rule that might serve to justify refusal in any given case. The facts and circumstances of each case must be examined to determine whether a good reason, of whatever sort, exists for refusing the order.

Examples of cases where the courts have found “good reason” not to order a sale include the following:

a) Lona Enterprises Ltd. v. Eurocan Industries Inc., 2018 BCSC 842: The respondent opposing partition had a written right of first refusal over any sale of the property that had not yet been complied with.

b) Nguyen v. Pham, 2023 BCSC 1246: The Court refused to order a sale because there was a concurrent civil action for specific performance brought by the respondent. Ordering a sale would have effectively determined the specific performance claim without a trial of the issue. As in Lona Enterprises Ltd., the Court found that pre-existing contractual agreements between parties governing the sale of property can be a good reason to refuse a sale, or at least a significant factor: para. 50.

c) Fournier v. Broatch, 2010 ONSC 2768: In this family case, the petitioner applying for sale did not actually assert an ongoing interest in the property, but rather was simply seeking to have his name removed from the mortgage. Further, any sale would have resulted in a large mortgage prepayment penalty for the respondent.

d) Holman v. Brooke, 2022 BCSC 526: The Court refused to order the sale of a co-owned duplex for various reasons. The property was never intended to be an investment property, as both parties envisioned that it would be their residence for the rest of their lives. There was an ongoing mutual intention to treat the halves of the duplex separately. The respondent would suffer hardship if she had to leave. The duplex was readily divisible into two lots, making a forced sale of the entire property unnecessary. The Court described the home as an “idiosyncratically personal residence”: para. 33. The Court did acknowledge that a long-term relationship between the parties, without more, is not a good reason.

Conversely, situations where courts have not found the existence of a “good reason” include the following:

a) Sundberg v. Sundberg, 2022 BCSC 2188: It was insufficient that the respondent had an “emotional attachment” to a property, the inability to purchase the opposing parties’ share, and an inability to buy a comparable property.

b) McRae v. Seymour Village Management Inc., 2014 BCSC 714: The Court stated that “significant hardships that affect people at a fundamental level” are insufficient, without more, to justify refusing to order a sale: paras. 39, 45. A small minority of strata owners opposed a sale, but were forced to sell and move from their homes. Justice Fenlon, as she then was, acknowledged the respondents’ difficult position but stated that shared ownership has significant disadvantages – “a forced sale by the other co owners is one of them”: para. 44.

c) Ryser: The fact that the respondent was claiming more than a 50% entitlement to the value of the property was insufficient.

d) Bradwell: It was insufficient that the respondent alleged that:
i. the claimant was not acting with clean hands,
ii. the respondent was 70 years old and had spent substantial time at the property.

e) ter Borg v. Morris, 2012 BCSC 554: The respondent’s desire to settle the accounting between the parties before any sale and the potential need to pay a mortgage prepayment penalty did not prevent the sale from going forward.

f) Zimmerman v. Vega, 2011 BCSC 757: The respondent’s desire to hold the property long-term was insufficient, particularly where there was no written agreement confirming how long the property would be held. The fact that there was also an allegation of unequal contributions did not alter the outcome.

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