6 Sale Of Property Where Majority Requests

CASE LAW

Baseless Assertion of Trust No Good Reason to Not Grant Order for Sale

The appellate court found that the chambers judge below did not err in granting an order for sale of real estate owned by two brothers, Rick and Kelvin, pursuant to s. 6 of the Partition of Property Act. The brothers had become registered owners of the property as joint tenants following the 1988 transfer, for no consideration, of the interests of Rick and their mother, who had been registered owners as joint tenants. Kelvin formally severed the tenancy in 2018 by transferring his interest to himself and registering the transfer in the land title office. Section 6 of the Partition of Property Act required the court to grant the application in a case such as this, unless there was “good reason to the contrary”. Rick pleaded that Kelvin had been placed on title in 1988 as a trustee for Rick, contrary to the presumption created by s. 23 of the Land Title Act; the court said the onus was on Rick to assert some basis for his defence. It was the mother of the two brothers who gave up an interest in the property; she, not Rick, would have been the beneficiary of any resulting trust. The trial judge found that Kelvin was the legal and equitable owner of his half share (Soo v. Soo, 2020 BCCA 149).

Absent Evidence of Agreement, No Beneficial Interest Gifted, No Reason Not to Order Sale

The petitioner mother and the respondent son purchased a residence as tenants in common, with the mother paying about half the purchase price and the son agreeing to pay the mortgage. There was no written agreement. The petitioner occupied the ground floor suite, the respondent and his family the upper level. After moving out of the ground floor suite into assisted living the next year, the mother, who had multiple sclerosis, applied for an order for sale pursuant to the Partition of Property Act, s. 6. She had paid for repairs, her share of two years’ property taxes, and the respondent’s car. She said she needed her equity for her daily expenses. The court found the mother was the legal and beneficial owner of one-half interest in the property, there being no evidence as to the terms of any agreement between the parties respecting the property, and no evidence that the petitioner had gifted her beneficial interest to the respondent. The court granted the order for sale, there being no good reason to the contrary, and granted the petitioner sole conduct of the sale (Dixon v. Morgan, 2020 BCSC 1329).

Absent Formal Arrangement to Preserve Property, Sale to Province to Benefit the Public

The petitioner was the court-appointed executrix of the estate of JS, who died in June 2018. The estate owned a 75% interest in a 20-acre property that had been in the family of JS and the other nine owners (the respondents) for more than 100 years. There was a small private cemetery on the property that was registered under the then Cemeteries Act, R.S.B.C. 1948, c. 41 (now repealed and replaced). In 2019, the property was appraised at $400,000. The petitioner wrote to the other owners offering to sell the 75% interest to them for $300,000 plus GST, and advising that if they did not intend to make an offer on it, she would apply for partition and sale. The Province had expressed an interest in acquiring the property at an appraised value for the purpose of including it in the adjacent park. The petitioner applied under s. 6 of the Partition of Property Act for an order for partition and sale of the property. Six of the other owners opposed the application. Held, order for sale granted. Despite the apparent wishes of the parties’ ancestors, no formal arrangement had been made to preserve the property and to cover the cost of its continued ownership. None of the respondents resided on the property, and the evidence was not clear about how often any of them visited it. JS’s will provided her trustee with broad discretionary powers to keep, convert, or invest her estate, or any part of it, into money or any other form of property or security. It seemed that the respondents’ interests would be best protected by a sale of the property to the Province for inclusion in the park. The Province was the purchaser most likely to be interested in the property, to preserve the cemetery, and to preserve the property in its current condition for the benefit of the public, including the respondents. It remained open to the respondents to make an alternative proposal to the petitioner or to appear to oppose the terms of any sale if and when the matter came before the court for the approval of a sale (Smith Estate v. Hawkins, 2021 BCSC 80).

Estate Administrator Cannot Prevent Sale of Real Property They Do Not Own in Their Personal Capacity

The petitioner’s late father, SN, originally owned two strata lots in a building in East Vancouver (the “Property”). He died intestate in October 2018. SN gifted to the petitioner an undivided one-half ownership interest in Unit 110 around 1993, and an undivided one-half interest in Unit 208 in early 2000. In 2015, he gifted the other half interest in Unit 208 to his daughter, YT. He retained the remaining half interest in Unit 110 until his death. In February 2020, his widow, HC, was granted administration of the estate. SN’s ownership interest in Unit 110 was transferred to her in her capacity as administrator. The petitioner wanted to sell the Property for financial reasons. He said he and his wife were unemployed and wanted funds to start a business. The respondents were opposed. HC was residing in Unit 110. She was 78 years old and had a variety of chronic health issues. Two of her three daughters, YT and SH, both of whom had mental health conditions and received disability income, resided in Unit 208. On the evidence of HC and YT, they provided mutual support and care for each other and for SH. The central issue on two companion petitions was whether the petitioner could force the sale of the Property under the Partition of Property Act over the respondents’ objections. Held, for the petitioner. Unless there is good reason not to do so, the sale of property under s. 6 of the Act must be ordered if a petitioner has at least a 50% ownership interest in the property. The court retains a broad and unfettered residual discretion under s. 6 to refuse a sale when required by the ends of justice. While the respondents do not technically bear the burden of proof, for all practical purposes, they should adduce evidence to establish a good reason why the Property should not be sold. The petitioner had met the statutory prerequisites for seeking a court-ordered sale pursuant to s. 6. He was the registered owner of an undivided half interest in the Property as a tenant in common with the respondents: he and HC, in her capacity as administrator, co-owned Unit 110; he and YT co-owned Unit 208. As the threshold requirements of ss. 2 and 6 of the Act had been met, the next question to address was whether there was any good reason not to order a sale. HC co-owned Unit 110 as administrator of the estate. In that capacity, her role was to distribute the assets of the estate after all debts were settled. She provided no legal authority to support the conclusion that an administrator can prevent the sale of real property that they do not own in their personal capacity pursuant to s. 6 of the Act. There were multiple unresolved conflicts in the evidence about how much money SN had gifted to his four children, whether and to what extent the parties currently experienced or would suffer financial hardship if the Property were sold, the nature and quality of SN’s former relationships with his children, the alleged poor treatment of HC by SN and the petitioner, and the parties’ failed efforts to resolve their disputes. The evidence did not support the conclusion that HC would face significant hardship if Unit 110 were sold. She did not dispute having real estate holdings outside Canada and admitted that she recently sold an apartment in Taiwan. On her own evidence, she had a substantial beneficial interest in SN’s $400,000 “legacy funds” in China. There was no good reason not to order a sale of Unit 110. Similarly, the court was not persuaded on the evidence that YT would face significant hardship if Unit 208 were sold. Any hardship had to be weighed against the prejudice to the petitioner if it were not sold. He had been unemployed since mid-2019, and his wife had been unemployed since early 2017. They had a young son, were renting accommodation in Toronto, and had been unable to benefit from his ownership interest in the Property (Tseng v. Tseng, 2021 BCSC 27).