Only a co-owner can request the termination of the co-ownership, a trustee in bankruptcy of one of the spouses cannot force the sale under judicial control and the distribution of the net proceeds of the sale with the other spouse.
The family home is often the fortress in which a couple takes refuge when everything collapses around them.
A married couple acquires, "in undivided co-ownership, a residence and make it their family home." Several years go by and the husband transfers his assets. The family home, valued at $340,000 at the time, is encumbered by a $260,000 mortgage. The bankruptcy trustee asks the wife to acquire the other undivided half, failing which he will file a request with the Court to terminate the undivided co-ownership in order to proceed with the division (termination of the undivided co-ownership) and the sale of the residence through legal means. The bankrupt wife refuses to comply with the trustee's request.
The Court rules that the bankruptcy trustee exercises "in certain cases the rights of a creditor and in other situations those of a debtor." The trustee can sell a spouse's undivided share in the family home without the consent of the other spouse. The rights over the family home only have effects between the spouses and do not limit the rights of a creditor of one spouse to sell the undivided share. The trustee, acting as a creditor, can sell the undivided half of the family residence, but the wife can then exercise her right of withdrawal (right of redemption) by reimbursing the buyer the price that the buyer has paid, plus expenses.
The Court concludes that there are no cases where the trustee can force the sale under judicial control and the division of the net proceeds of the sale with the wife since only a co-owner can request the termination of the undivided co-ownership.
The trustee can storm the fortress from the outside as a creditor or from the inside as a co-owner, but cannot do both.
*505-11-008495-074 (C.S. Longueuil)
