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Real Property - Joint Tenancies. Jackson v. Rosenberg [survivorship]
In Jackson v. Rosenberg (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal, here from an application judge's order establishing joint title and survivorship rights:[31] The application judge also concluded that although the gift of the right of survivorship took effect immediately, and a gift cannot be revoked, that did not preclude Mr. Jackson from severing the joint tenancy and thereby eliminating the right of survivorship. The application judge followed the decisions in Simcoff v. Simcoff, 2009 MBCA 80, 245 Man. R. (2d) 7 and Bergen v. Bergen, 2013 BCCA 492, 52 B.C.L.R. (5th) 258, which he viewed as standing for this proposition.
[32] The application judge noted the existence of arguably conflicting authority on this latter point: Thorsteinson Estate v. Olson, 2016 SKCA 134, 404 D.L.R. (4th) 453 and Pohl v. Midtdal, 2018 ABCA 403, 78 Alta. L.R. (6th) 78. He preferred the approach of the Manitoba and British Columbia appellate courts in Simcoff and Bergen. He found them to be more consistent with Ontario law, which holds that a joint tenant has a unilateral right to sever their joint tenancy at any time, thereby ending the right of survivorship.
[33] The application judge concluded that the 2020 transfer severed the joint tenancy, making each of Mr. Jackson and Ms. Rosenberg a tenant in common with a 50% interest in the property. The presumption of resulting trust applied, such that Ms. Rosenberg held her 50% interest in trust for Mr. Jackson. The application judge further held that “[w]hile severance of the joint tenancy eliminates Ms. Rosenberg’s right of survivorship with respect to Mr. Jackson’s 50% share, Mr. Jackson cannot revoke the right of survivorship with respect to Ms. Rosenberg’s 50% share.” He ordered that, when Mr. Jackson dies, his 50% share of whatever equity remains in the Port Hope property will form part of his estate, while “Ms. Rosenberg’s 50% share of whatever equity remains in the property will pass to her in accordance with the intention of the [2012 transfer].”
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(2) The Application Judge Did Not Err in Determining that Mr. Jackson Retained the Right to Sever
[49] A gift, once made, cannot be revoked: Abdollahpour v. Banifatemi, 2015 ONCA 834, at para. 36, citing Berdette v. Berdette (1991), 1991 CanLII 7061 (ON CA), 81 D.L.R. (4th) 194 (Ont. C.A.), at pp. 200-201, leave to appeal refused, [1991] S.C.C.A. No. 306. Ms. Rosenberg submits that if the effect of the 2012 transfer was a gift of a right of survivorship, it must follow that Mr. Jackson could not sever the joint tenancy. Severance terminates a right of survivorship: Hansen Estate v. Hansen, 2012 ONCA 112, 109 O.R. (3d) 241, at paras. 34-35. Permitting severance would, in effect, permit the revocation of the gift of the right of survivorship. Accordingly, Ms. Rosenberg submits that the application judge erred in finding that the 2020 transfer had any effect on Ms. Rosenberg’s right of survivorship, that is, her right to take the benefit of the entire property on Mr. Jackson’s death.[6]
[50] Ms. Rosenberg adds that Ontario property law does not allow for a right of survivorship to exist in the absence of a joint tenancy. There was no basis for the application judge to find both that the 2020 transfer severed the joint tenancy and that a right of survivorship continued over a 50% share of the property. The error was in considering that the joint tenancy had been severed.[7]
[51] I do not accept the principal component of Ms. Rosenberg’s argument. In my view the application judge was right to find that Mr. Jackson maintained the right to sever the joint tenancy after the 2012 transfer even though to do so would end the right of survivorship.
[52] I reach this conclusion for three related reasons.
[53] First, it is inherent in a joint tenancy that each joint tenant has the unilateral right to sever it at anytime, thereby ending the right of survivorship. In Hansen Estate, at para. 32, Winkler C.J.O. cited the classic statement from the English case of Williams v. Hensman[8] concerning the three ways in which severance could occur to end the right of survivorship. One of them is that “[e]ach [joint tenant] is at liberty to dispose of his own interest in such manner as to sever it from the joint fund—losing … at the same time, his own right of survivorship”. At para. 34 of Hansen Estate, this mode of severance was described as “unilaterally acting on one’s own share, such as selling or encumbering it”.[9]
[54] I see no basis, in applying this statement, to distinguish between joint tenancies created for consideration and those created gratuitously. Were an owner of land to sell an interest and create a joint tenancy with the purchaser, what was sold would include a right of survivorship (as well as a current beneficial interest in the property). Similarly, if two people acquire property, each contributing financially to the acquisition, and place it in joint tenancy, each would have a right of survivorship and a current beneficial interest. Yet absent an agreement between them preventing severance, the original owner in the first example would be free to unilaterally sever the joint tenancy (as would the purchaser), ending both of their rights of survivorship, and each joint tenant in the second example would have a right to sever and end all rights of survivorship. It is difficult to see why a gifted right of survivorship would prevent the donor joint tenant from exercising a right to sever when the same right, transferred or acquired for consideration, would not.
[55] Second, the right of survivorship is entirely contingent on there being no severance. That is the very nature of the right. In the classic statement adopted in Hansen Estate, at para. 32, it was described as follows: “The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under [it]” (emphasis added). To adopt the view that a gifted right of survivorship precludes severance is to change the nature of the right.
[56] Third, there is the nature of the gift itself. As the court held in Pecore, at para. 50, the gift of the right of survivorship is only of what remains when the transferor dies; this meant in Pecore that the transferor was free in the meantime to dissipate the jointly held bank account. In other words, the gift of the right of survivorship does not, on its own, prevent dealings by the donor that could denude the right of any value.[10] In Simcoff, and cases that have followed it, courts have applied this reasoning to land, observing that a gift of the right of survivorship does not prevent the donor from dealing with the retained joint interest – for example by exercising the right to sever – in a way that puts an end to the right of survivorship: Simcoff, at para. 64; see also Bergen, at paras. 40-41; McKendry v. McKendry, 2017 BCCA 48, 93 B.C.L.R. (5th) 215, at paras. 27-30; and Herbach v. Herbach Estate, 2019 BCCA 370, 28 B.C.L.R. (6th) 360, at para. 37 where the court observed that an inter vivos transfer of a right of survivorship is properly characterized as a gift “even though there was a possibility that severance of the joint tenancy could rob the gift of any value”.
[57] It follows that the application judge did not err in following the statements in Simcoff, at para. 63, that a gift of a joint tenancy interest in land did not prevent the donor from severing the joint tenancy and putting an end to the right of survivorship, or, at para. 64, that there is nothing in the right of survivorship that somehow prevents the donor joint tenant from severing the joint tenancy and ending the right of survivorship.[11] Regardless of whether these statements were necessary to the result in Simcoff, they are correct. The gift in Simcoff was of a joint tenancy interest that included current beneficial rights and a right of survivorship. I see no reason why the same result would not follow when the gift is only of a right of survivorship with no gift of beneficial rights during the transferor’s lifetime, as is the case here.
[58] Like the application judge, I do not view the decision of the Saskatchewan Court of Appeal in Thorsteinson Estate to reflect the law of Ontario to the extent it holds that after gifting a joint tenancy interest that includes a right of survivorship, the donor cannot sever the joint tenancy. The decision does not address the reasons that militate against that conclusion, addressed above at paras. 51-56. Moreover, Thorsteinson Estate is distinguishable.
[59] First, unlike in Ontario, s. 156 of Saskatchewan’s Land Titles Act, 2000, S.S. 2000, c. L-5.1, prevents a joint tenant from unilaterally effecting a transfer to sever a joint tenancy. The implication of this provision is that “a joint tenancy with respect to land can only be terminated in Saskatchewan by written agreement of the joint tenants or by court order”: Thorsteinson Estate, at para. 63. Second, although in Thorsteinson Estate a donor had commenced an application for severance, a court order authorizing a severance within the meaning of s. 156 was not obtained before the donor died. Thus, the request by the donor’s estate that the court grant a severance was made after the right of survivorship had been triggered. The court noted this as one feature distinguishing Simcoff, and in this context stated, at paras. 66-67:Moreover, the facts in Simcoff were significantly different than those of the case now before this Court, as in Simcoff, both joint tenants were living.
[The donor’s] application for severance of the joint tenancy should have been dealt with by the trial judge on its merits. However, the trial judge’s conclusion that [the donor] had gifted [the donee] joint ownership of the land is, in my view, determinative of the severance application, as her gift included the right of survivorship. This was explained by Rothstein J. in Pecore:Some judges have found that a gift of survivorship cannot be a complete and perfect inter vivos gift because of the ability of the transferor to drain a joint account prior to his or her death … The nature of a joint account is that the balance will fluctuate over time. The gift in these circumstances is the transferee’s survivorship interest in the account balance — whatever it may be — at the time of the transferor’s death, not to any particular amount.
Having gifted the right of survivorship, [the donor] could not take it back. [Emphasis added by the Sask. C.A.] [60] Nor do I consider the decision of the Alberta Court of Appeal in Pohl to undermine the result reached by the application judge or to assist Ms. Rosenberg. In her first instance reasons in Pohl,[12] the trial judge, after discussing Simcoff, Bergen, Pecore and Thorsteinson Estate, appears to have rejected two rigid positions: (i) that a gift of a joint tenancy interest always preserves the donor’s right to sever, and (ii) that such a gift never allows the donor to sever. Instead, she stated that the presumption is that a gift of a joint tenancy interest leaves intact the donor’s right to sever, but that the presumption can be rebutted by evidence of the donor’s commitment never to sever. She said, at para. 52:The analysis will become a factual analysis as to what the intention of the parent/transferor was at the time the joint tenancy was created. That was the case in Pecore, and that is the situation here. There is a presumption that the right of survivorship is given with the joint tenancy in a “normal” way, preserving the ability of the [transferor] to sever. But that presumption can be rebutted by evidence that the intention of the transferor was to give an irrevocable right of survivorship which would prevent the transferor from applying to sever the joint tenancy in the future. [61] That was the approach the trial judge in Pohl applied to the case before her. She found that the evidence rebutted “the prima facie position that nothing prevents the transferor from dealing with the joint interest while alive” and drew an inference that the transferors had given up their right to sever: at paras. 63-64.
[62] In its decision the Alberta Court of Appeal endorsed that approach. They rejected the argument that, as a matter of law, a right of survivorship could never be irrevocably gifted (in the sense of the donor having given up the right to sever), drawing an analogy to the ability of a joint tenant to contract out of the presumptive right to sever: at para. 6. The court noted that “[t]he trial judge concluded, based upon Pecore and having regard to the fact that the respondent was a gratuitous transferee within that case, that there was a presumption – namely that the right to sever was not relinquished by the donor along with the grant of joint survivorship – that could be rebutted depending on the donor’s intention”, and that the factual finding that the presumption had been rebutted was not challenged: at para. 11. The court held that in doing so, the trial judge applied the reasoning in Pecore and properly extended it to the facts that were before her: at para. 14.
[63] However, even applying the approach in Pohl to this case, the application judge’s conclusion that Mr. Jackson retained the right to sever is unaffected. Under that approach it was possible for Mr. Jackson in the 2012 transfer to gift a right of survivorship without relinquishing his right, during his lifetime, to sever. He would only relinquish that right if he intended to do so. And the rebuttable presumption would be that he did not intend to relinquish the right to sever.
[64] The application judge’s findings of fact do not permit the conclusion that the presumption that Mr. Jackson did not intend to relinquish his right to sever was rebutted. The application judge found an intention to gift the right of survivorship, but no intention to gift any rights exercisable in connection with the property during Mr. Jackson’s lifetime. Addressing himself specifically to a point made in Pohl, he stated that “[w]hile joint tenants can agree by contract that they will not sever the joint tenancy, no such agreement exists in this case, and I am not prepared to infer (as was the trial judge in [Pohl]) that such a restriction should be implied.”
[65] Accordingly, I see no error in the application judge’s conclusion that following the 2012 transfer, Mr. Jackson maintained the right to sever the joint tenancy and that the 2020 transfer effected such a severance.
(3) Should the Application Judge’s Order Regarding the Right of Survivorship Continuing over a 50% Interest Be Varied?
[66] Both parties submit that the application judge was wrong to conclude that the right of survivorship could continue in effect as to a 50% interest in the property if a joint tenancy ceased to exist. In Hansen Estate, at paras. 30-31, this court observed as follows:Ultimately, the critical distinction between [a joint tenancy and a tenancy in common] … is the right of survivorship ... .
Through the right of survivorship, the interest of a co-owner in a joint tenancy will pass equally to all of the other co-owners upon his or her death. If multiple co-owners remain, the joint tenancy remains in existence, while if only one owner survives, the entire interest in the property passes to the survivor. In contrast, upon the death of a co-owner in a tenancy in common, the deceased’s interest in the property passes to his/her estate. [Emphasis added; internal citations omitted.] [67] Before the 2020 transfer, Ms. Rosenberg held her interest in the joint tenancy in trust for Mr. Jackson, and she had a right of survivorship. As the joint tenancy was severed in the 2020 transfer, what Ms. Rosenberg continued to hold was an interest in a tenancy in common in trust for Mr. Jackson. No right of survivorship could attach to or flow from that interest. . Jackson v. Rosenberg
In Jackson v. Rosenberg (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal, here from an application judge's order establishing unusual joint title and survivorship rights:The Application Judge’s Decision
[26] As noted above, Mr. Jackson made Ms. Rosenberg a joint tenant of his home for no consideration. The application judge held that the presumption of resulting trust applied – a rebuttable presumption that the transferor in a gratuitous transaction intended to create a trust rather than make a gift. When this presumption applies, the onus rests on the transferee to demonstrate that a gift was intended. If they fail to do so, they hold the property in trust for the transferor.
[27] In determining whether Ms. Rosenberg had rebutted the presumption of resulting trust, the application judge noted that he had to consider not just whether Mr. Jackson intended to make a gift but also the nature of the alleged gift. He referred to Mr. Jackson’s evidence that he intended to leave Ms. Rosenberg whatever equity was left in the home when he died, but not any rights to the home during his lifetime; the direction to the lawyer at the time of the 2012 transfer that a gift was intended; Mr. Jackson’s 2005 will; the intention to avoid probate fees; and the fact that this was Mr. Jackson’s home and there was no intention that Ms. Rosenberg ever live there during his lifetime.
[28] The application judge concluded the following:Considering the evidence as a whole, I am satisfied that Mr. Jackson’s intention at the time of the [2012] transfer was to gift the right of survivorship in the Port Hope property to Ms. Rosenberg ... The right of survivorship included whatever equity was left in the property after he died. Mr. Jackson did not intend to gift the property to Ms. Rosenberg during his lifetime ... There was no intention to give Ms. Rosenberg any control over the property before Mr. Jackson’s death ... Ms. Rosenberg’s beneficial interest in the property would arise only after Mr. Jackson’s death. [29] The application judge held that, in law: (i) there could be a gift of the right of survivorship in the absence of an intent to give the property to the transferee during the transferor’s lifetime; (ii) the gift of the right of survivorship is an immediate gift, even though its benefit is enjoyed only on death of the transferor; and (iii) although the gift is immediate, it is a gift only of what remains at the time of the death of the transferor.
[30] Accordingly, the application judge held that the presumption of resulting trust arising from the 2012 transfer had been partially rebutted. Thus, Ms. Rosenberg held (a) her interest in the home during Mr. Jackson’s lifetime in trust for Mr. Jackson, and (b) a right of survivorship entitling her to the entire equity in the home, if any remained, upon Mr. Jackson’s death. During his lifetime, Mr. Jackson retained the right to sell or encumber the home.
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(ii) A Gift of the Right of Survivorship Unaccompanied by a Gift of Beneficial Rights During the Donor’s Lifetime is Recognized in Law
[41] The application judge reached the factual conclusion that Mr. Jackson’s intention was to give the home to Ms. Rosenberg upon his death but to give her no rights in it during his lifetime. This factual conclusion led him to the legal conclusion that that there was a gift of the right of survivorship but that all other rights relating to the joint tenancy interest in Ms. Rosenberg’s name were held in trust by her for Mr. Jackson. That was the correct legal conclusion.
[42] A gratuitous transfer engages the presumption of resulting trust, under which the transferee is obliged to return the interest transferred to the original title holder: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20. In other words, although a gratuitous transfer of a joint interest gives legal ownership of that interest to the transferee, it is presumed to be held in trust for the transferor who remains the beneficial or “real” owner of the interest: Pecore, at paras. 3-4, citing Csak v. Aumon (1990), 1990 CanLII 8070 (ON SC), 69 D.L.R. (4th) 567 (Ont. H.C.), at p. 570.
[43] The 2012 transfer to Ms. Rosenberg of a joint tenancy interest was gratuitous. The entire interest transferred to her, with all its attributes, was presumed to be held in trust for Mr. Jackson.
[44] Showing that a gift was intended rebuts the presumption of resulting trust: Pecore, at para. 24. But the authorities establish that in the case of property transferred gratuitously from the owner into joint names, a showing that a gift was intended, not of any current rights but solely of what remains of the property upon death of the transferor, only partially rebuts the presumption. The result is a gift only of the right of survivorship, not of any rights exercisable during the transferor’s lifetime. The latter rights are held in trust for the transferor.
[45] In Pecore, Rothstein J. recognized that a person could gratuitously place assets into a joint account with the intention of retaining exclusive control of the account until his or her death, at which time the transferee would take the balance through survivorship. He held that courts can give effect to this intention. The result is an inter vivos gift of the right of survivorship, even though the transferor has retained the right to deplete the account. The gift is of whatever remains in the account at the time of the transferor’s death: at paras. 47-52; see also paras. 63-66.
[46] In Bergen v. Bergen, 2013 BCCA 492, 52 B.C.L.R. (5th) 258, the court rejected the proposition that gratuitously placing real property into joint tenancy accompanied by an intention that the transferee will take the property on death of the transferor in itself constitutes a gift of an immediate beneficial interest in the property itself: at paras. 36 and 42. The court quoted with approval, at para. 42, a passage from Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Carswell, 2012) that explained that an intention that the transferee take the benefit of the property if predeceased by the transferor only partially rebuts the presumption of resulting trust.
[47] In MacIntyre v. Winter, 2021 ONCA 516, 158 O.R. (3d) 321, this court applied these principles. In that case, the appellant (Alex) had purchased homes with his own funds, and then placed them into joint tenancy with the respondent (Ron). The court held that the trial judge erred in finding that Alex’s intention, which was to have Ron receive the homes on his death, was sufficient to entirely rebut the presumption of resulting trust with respect to all rights arising from their sale during their joint lives, such as the right of Alex to receive what he had paid for their acquisition. At para. 33, the court stated:The trial judge erred in extrapolating from the fact of joint tenancy, entered into with the intention of Ron taking a right of survivorship in the homes, to a finding of an intention to gift Ron the funds contributed by Alex for the acquisition of the homes. The point that a right of survivorship alone is not sufficient to rebut the presumption of a resulting trust that operates during the parties’ joint lives is clearly made in Mark Gillen, Lionel Smith & Donovan W.M. Waters, Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Thomson Reuters Canada, 2012), at § 10.II.B.2 (WL):If A supplies the purchase money and conveyance is taken in the joint names of A and B, B during the joint lives will hold his interest for A; B will also hold his right of survivorship—again by way of a resulting trust—for A's estate, because that right is merely one aspect of B's interest. In other words, the starting point is that B holds all of his interest on resulting trust for A, or A's estate. However, evidence may show that, while A intended B to hold his interest for A during the joint lives, it was also A's intention that, should he (A) predecease, B should take the benefit of the property. The presumption of resulting trust would then be partially rebutted, in relation to the situation that has arisen, so that B would not hold his interest (now a sole interest and not a joint tenancy) on resulting trust. He would hold it for his own benefit. [Footnote omitted.] [Emphasis added.][5] . Grady v. Grady
In Grady v. Grady (Ont CA, 2023) the Court of Appeal considered a leading case (Hansen) on severing a joint tenancy:[8] The application judge was required to determine the threshold issue of whether, before his death, Michael Grady had severed the joint tenancy in the matrimonial home that he held with his wife, Margaret Grady, who survived him. This was the key contentious issue that prevented the appointment of an executor and the orderly administration of Margaret Grady’s estate. In determining that Michael Grady had not severed the joint tenancy, the application judge properly considered and applied the governing principles set out in Hansen Estate v. Hansen, 2012 ONCA 112, 109 O.R. (3d) 421, particularly that “a testamentary disposition cannot, in itself, sever a joint tenancy”: at para. 63.
[9] The application judge concluded, correctly in our view, that in the circumstances of this case, Michael Grady’s testamentary disposition to leave his entire estate to only Tracey Ann Grady was not sufficient to sever the joint tenancy with Margaret Grady. The onus was on Tracey Ann Grady to provide evidence to demonstrate the severance of the joint tenancy: see Re McKee and National Trust Co. Ltd. et al. (1975), 1975 CanLII 442 (ON CA), 7 O.R. (2d) 614, at p. 620. Contrary to her argument that the third method of severance under Hansen Estate applied, Tracey Ann Grady did not provide evidence of “any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common”: Hansen Estate, at para. 32. . Senthillmohan v. Senthillmohan
In Senthillmohan v. Senthillmohan (Ont CA, 2023) the Court of Appeal considered the execution status of one of two joint-tenant owners of real estate:[8] Because a creditor cannot seize the interest of a non-debtor joint tenant, the appeal must be dismissed.
[9] In our view, the appellant’s position fundamentally misunderstands the law of creditors’ remedies against jointly-held property where only one of the owners guaranteed the debt. Having so concluded it is not necessary to consider the appellants’ arguments about the date of severance.
[10] The appellant relies on authorities which stand for the proposition that each joint tenant holds an undivided interest in the whole of the property: Zeligs v. Janes, 2016 BCCA 280; Royal & SunAlliance Insurance Co. v. Muir, 2011 ONSC 2273, 9 R.P.R. (5th) 104. As Royal & SunAlliance notes at para. 2, each joint tenant “holds everything and yet holds nothing.” The appellant’s argument is 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. While Royal & SunAlliance does set out the characteristics of joint tenancy – unity of title, unity of interest, unity of possession, and unity of time – it does not support the conclusion that where the debt itself is not jointly held that the entire property is exigible.
[11] While there is little jurisprudential guidance on this discrete question, it is the natural corollary of the generally accepted and commonly cited proposition that an execution creditor can execute against the debtor’s interest in jointly held property. In other words, to accept the appellant’s position would render meaningless the use of the words “the debtor’s interest in”.
[12] Arnold Bros. Transport Ltd. v. Murphy, 2013 MBQB 137, 295 Man. R. (2d) 66, aff’d. 2014 MBCA 9, 303 Man. R. (2d) 140, upon which the appellant relies, does not assist as it interprets the statutory scheme that governs in Manitoba, which differs from the law in Ontario. In Manitoba, s. 136(3) of the Real Property Act, C.C.S.M. c. R30, prescribes the order of payment as follows: 1) expenses occasioned by the sale; 2) payment due or owing to the mortgagee or encumbrancer; 3) payment of subsequent mortgages, encumbrances, or liens, if any, in the order of their priority; with 4) the surplus being paid to the owner or other person entitled. In Manitoba, a writ constitutes a lien on the land and accordingly falls within step 3 above. In this way, writs are paid out before any remaining surplus is paid to joint tenants.
[13] In Ontario, s. 9(1) of the Execution Act, R.S.O. 1990, c. E.24 provides that:9(1) The sheriff to whom a writ of execution against lands is delivered for execution may seize and sell thereunder the lands of the execution debtor, including any lands whereof any other person is seized or possessed in trust for the execution debtor and including any interest of the execution debtor in lands held in joint tenancy. [Emphasis added.] [14] The process of seizure and execution on debts only contemplates the execution against the debtor’s exigible interest in the land held in joint tenancy. For instance, when a sheriff takes sufficient steps to seize property, the joint tenancy is severed and, once severed, the debtor joint tenant has no claim to the whole. So, too, for the creditor, who can now execute against the debtor’s share of the tenancy in common.
[15] Section 10(6) of the Execution Act also provides that a writ “binds the lands against which it is issued”. While this does not expressly state that a writ can effect only a seizure of the debtor’s exigible interest in land held in joint tenancy, it is the natural interpretation of the provision when read in conjunction with s. 9 and the right of survivorship. That is to say, where property is jointly held and one joint tenant dies, the remaining joint tenant acquires the entire interest in the property through their right of survivorship. And, where a writ is filed against jointly held land before the debtor joint tenant’s death, it does not continue to bind the surviving non-debtor’s complete interest in the property acquired through their right of survivorship: Power v. Grace, 1932 CanLII 116 (ON CA), [1932] O.R. 357 (Ont. C.A.). . Gefen Estate v. Gefen
In Gefen Estate v. Gefen (Ont CA, 2022) the Court of Appeal set out the ways of severing a joint tenancy:[101] ... She [the trial judge] described the three ways in which a joint tenancy can be severed as set out in Hansen Estate v. Hansen, 2012 ONCA 112, 288 O.A.C. 116, at para. 34:Rule 1: unilaterally acting on one’s own share, such as selling or encumbering it;
Rule 2: a mutual agreement between the co-owners to sever the joint tenancy; and
Rule 3: any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. . Inniss v. Blackett
In Inniss v. Blackett (Ont CA, 2022) the Court of Appeal stated basics of joint tenancies regarding the Partition Act:The trial judge did not err in ordering that the house should be sold by virtue of the Partition Act
[23] Joint tenants have a prima facie right to force a sale of a property under s. 2 of the Partition Act: Davis v. Davis, 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.), at p. 29. The onus is on the party resisting the sale of the property to demonstrate that the property should not be sold. To exercise its discretion not to approve a sale, a court must be satisfied that the party seeking the sale is acting in a malicious, vexatious or oppressive fashion: Brienza v. Brienza, 2014 ONSC 6942, at para. 25. . Toronto-Dominion Bank v. Phillips
In Toronto-Dominion Bank v. Phillips (Ont CA, 2014) the Court of Appeal sets out the essential characteristics of joint tenancy ownership of real property, and addresses when it is severed by bankruptcy and execution proceedings:(4) Joint Tenancy
[35] Having said the above, the appellant and the respondent held the real property as joint tenants. The judgment and execution in favour of BMO was also joint. As such, it would be open to BMO to realize the joint debt as against the respondent, as any interest of the respondent was unaffected by the stay. As Perell J. noted in Royal & SunAlliance Insurance Company v. Muir, 2011 ONSC 2273 (CanLII), 2011 ONSC 2273, 9 R.P.R. (5th) 104, at para. 23: “Joint tenants have identical undivided interests in the same property. Each joint tenant holds ‘totum tenet et nihil tenet’ or ‘per mie et per tout’ which means each holds everything and yet holds nothing.”
[36] The characteristics of a joint tenancy are succinctly described in Jeffrey W. Lem and Rosemark Bocska, Halsbury’s Laws of Canada – Real Property, 1st ed. (Markham, Ont.: LexisNexis Canada, 2012), at HRP-37:There are four essential attributes of a joint tenancy, known as the four unities. A joint tenancy requires:
(1) Unity of Interest – the interest of each joint tenant must be equal in nature, extent and duration;
(2) Unity of title – the interests must arise from the same act or instrument;
(3) Unity of Time – the interests must vest at the same time; and
(4) Unity of possession – the interests must relate to the same piece of property.
A joint tenancy depends on the continuance of the unity of interest, title and possession. The unity of time of vesting only applies to the original creation of the tenancy and cannot be affected by any subsequent act. [37] The continuance of a joint tenancy depends on the maintenance of the unities of title, interest and possession; a destruction of any of these unities leads to a severance: Power v. Grace, 1932 CanLII 116 (ON CA), [1932] O.R. 357 (C.A.), at p. 360. Severance of a joint tenancy may occur: through the unilateral action of a joint tenant on his or her own share, such as selling or encumbering it; through a mutual agreement between the co-owners to sever the joint-tenancy; or through any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common: Lem and Bocska, at HRP-41.
[38] Severance also may occur on bankruptcy. This is because the bankrupt’s property vests in the trustee in bankruptcy, and the four unities are therefore not maintained: see Cameron (Re), 2011 ONSC 6471 (CanLII), 2011 ONSC 6471, 108 O.R. (3d) 117, at fn. 9.
[39] Severance by execution is not so straightforward. Lem and Bocska describe such severance, at HRP-42:Seizure of property through lawful execution procedures will sever a joint tenancy. However the mere filing of the writ is insufficient; it must be acted upon. Thus, where the sheriff holds a writ of execution against a joint tenant but does not execute it prior to that tenant’s death, the surviving joint tenant inherits the property free from the execution. [40] The appellant argues that the joint tenancy in the surplus was severed such that BMO could only recover from the respondent’s 50% interest in the surplus. The appellant submits that the joint tenancy was severed in either one of two ways: as a result of BMO’s efforts to collect its debt, or as a consequence of her consumer proposal. She particularly relies on Power, supra and Muir, supra in support of her position.
[41] The respondent counters with the following: there was no severance; the application judge’s determination that the joint tenancy was not severed was a finding of fact; and in any event, the parties’ interests are subject to an accounting and the equities of the case. He relies in part on Arnold Bros. Transport Ltd. v. Murphy, 2013 MBQB 137 (CanLII), 2013 MBQB 137, 34 R.P.R. (5th) 217, and on Sirois v. Breton, 1967 CanLII 193 (ON SC), [1967] 2 O.R. 73 (Co. Ct.) in support of his position.
[42] In Power, this court determined that while advertisement of a sale was sufficient to constitute a seizure that severed a joint tenancy, the mere filing of a writ of execution with the sheriff was insufficient. In Maroukis v. Maroukis, 1984 CanLII 76 (SCC), [1984] 2 S.C.R. 137, at p. 143, the Supreme Court stated that Power “stands for the proposition that, where a writ of fieri facias is delivered to the sheriff covering the interest of one joint tenant in real property and no further steps are taken in the execution process, the death of that joint tenant will pass the whole estate to the survivor free of execution.”
[43] In Muir, Perell J. concluded that the execution creditor took sufficient steps to execute the judgment, severing the joint tenancy. The steps included advertising the sale of property by the sheriff. Perell J. stated, at para. 26:Severance may occur when an execution creditor takes sufficient steps to execute the judgment against the debtor’s interest in the property, although the filing of the writ of execution does not by itself result in a severance. [44] The decision of Sirois, relied upon by the respondent, also determined that the mere filing or delivery of a writ to the sheriff was insufficient to effect a severance of a joint tenancy. This is of little assistance on this appeal. Similarly, Arnold Bros. is a very different case. The key issues were whether the sale of property by a mortgagee or property division negotiations between separated spouses served to sever the joint tenancy. Neither was found to sever the joint tenancy, and the creditor, who held an execution in the name of only one of the joint tenants, was entitled to be paid from the pool of funds prior to any distribution to the joint tenants.
[45] The facts in the case under appeal are quite different and indeed, rather unusual. Here, there could be no execution against the appellant because execution against her was stayed. However, the debt was joint, and BMO therefore was at liberty to recover its debt against the respondent. The parties to the application and BMO appeared before the application judge and made submissions. The parties consented to, and the application judge granted, an order authorizing payment to BMO. The execution was completed and acted upon. In my view, in these circumstances, the joint tenancy was severed, and the payment to BMO could only be from the respondent’s 50% share of the surplus.
[46] I am also not persuaded of the respondent’s other submissions. In my view, the application judge erred in law in ignoring the stay and in not finding a severance of the joint tenancy. Furthermore, in the face of a proposal, it is not open to the court to effect ostensible equitable readjustments to the allocation of the funds in issue. Lastly, I note that in oral argument, counsel for the appellant acknowledged that the respondent could seek redress under the provisions of the BIA however, I do not propose to address that potential eventuality.
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