Creditor Of Husband Cannot Enforce Against Wife’s Interest In Jointly Owned Matrimonial Home

Take a coffee break with Melanie Larock and read a weekly blog post about family law decisions released by the Court of Appeal for Ontario.

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In the Court of Appeal for Ontario’s decision in Senthillmohan v. Senthillmohan, 2023 ONCA 280 (released April 26, 2023, please click here for full decision), the matrimonial home was owned by the spouses as joint tenants. A third-party creditor obtained a default judgment against the husband and had filed a writ. The Husband’s creditor sought to seize the wife’s interest in the matrimonial home vis-à-vis her 50% share of the net proceeds of sale.

The creditor had initially agreed to temporarily lift the writ in order for the matrimonial home to be sold in the context of the family law proceeding. After the writ had been filed, the Wife brought an urgent motion in family court to sever the joint tenancy in the matrimonial home. The Court severed the tenancy resulting in each spouse holding title as tenants in common. The Wife further brought a motion for the release of her 50% share of the net sale proceeds of the matrimonial home, which was granted. The creditor appealed. The creditor argued that since the wife was a joint tenant at the time default judgment was obtained and the writ filed, the creditor had priority over the wife’s interest in the sale proceeds. The creditor argued that because joint tenants are essentially one owner until the joint tenancy is severed, a creditor has the right to claim against the full interest.

The Court of Appeal held that a creditor cannot seize the interest of a non-debtor joint tenant. The debt was not jointly held and therefore the entire property was not exigible. An execution creditor can execute only against the debtor’s exigible interest in jointly held property.

Given that only the husband had been responsible for the debt, the creditor could only execute on the husband’s share. As a result, the Wife was entitled to her 50% share of the net proceeds of sale of the matrimonial home.

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About Melanie Larock

Melanie Larock is a family law litigator and a partner in Thomson Rogers’ Family Law group. Melanie’s focus is on all areas of family law with a particular emphasis on complex financial issues and high conflict parenting disputes. Melanie was trained by an illustrious litigator, and she is a self-proclaimed evidence law nerd.