BC Estate Lawyer – Was There a Settlement?

Trevor Todd and Jackson Todd have over sixty combined years of estate litigation which often includes issues such as was there a settlement?

In Hutton v. Hutton, 2020 BCSC 2046, the Honourable Chief Justice Hinkson reviewed various authorities which dealt with summary applications, brought in an action to enforce agreements to compromise that same action. At para. 30, he concluded that he could properly enforce a settlement agreement and grant a stay of proceeding through such motion if he were to find that there was a binding settlement agreement.

Essential Terms
[20] The question then remains—was there a settlement agreement between these parties?

[21] Again, reference to the Hutton case provides recent and persuasive authority on such assessment. At paras. 31–33, Hinkson C.J.S.C. says:

Is there an Enforceable Agreement between the Parties?

[31] The burden of proving the existence of a settlement agreement is on the party seeking to enforce or rely on it: Salminen v. Garvie, 2011 BCSC 339 [Salminen] at para. 26. The standard of proof required is on the balance of probabilities.

[32] To determine if a settlement agreement is enforceable, the court must consider whether the parties reached agreement on all essential terms. In Fieguth v. Acklands Ltd. (1989), 59 D.L.R. (4th) 114 (B.C.C.A), [Fieguth] Chief Justice McEachern stated at 121:

… The first question is whether the parties have reached an agreement on all essential terms. There is not usually any difficulty in connection with the settlement of a claim or action for cash. That is what happened here and as a settlement implies a promise to furnish a release and, if there is an action, a consent dismissal unless there is a contractual agreement to the contrary, there was agreement on all essential terms.

[33] In Apotex Inc. v. Allergan, Inc., 2016 FCA 155, at paras. 32–33, Mr. Justice Stratas phrased the test to determine if an enforceable settlement had been reached as follows:

[32] The court is to view the specific facts of the case objectively in light of the practical circumstances of the case and ask whether the parties intended to be legally bound by what was already agreed or, in other words, whether an “honest, sensible business [person] when objectively considering the parties’ conduct would reasonably conclude that the parties intended to be bound or not” by the agreed-to terms: G Percy Trentham Ltd v Archital Luxfer Ltd. (1992), [1993] 1 Lloyd’s Rep 25, 63 B.L.R. 44 (C.A.) at paras. 50 and 86; Ward at para. 61; Hughes v. City of Moncton, 2006 NBCA 83, 304 N.B.R. (2d) 92 at para 6. Put another way, looking not through the eyes of lawyers, but through the eyes of reasonable businesspeople stepping into the parties’ shoes, was there something essential left to be worked out? See Investors Compensation v. West Bromwich Building Society, [1998] I All E.R. 98; [1998] 1 W.L.R. 896 (H.L,); Chartbrook v. Persimmon Homes, [2009] UKHL 38, [2009] A.C. 1101; Re Sigma Finance, [2009] UKSC 2, [2010] 1 All E.R. 571. Another way of putting it is to ask how “a reasonable [person], versed in the business, would have understood the exchanges between the parties”: Bear Steams Bank pic v. Forum Global Equity Ltd., [2007] EWHC 1576 (Q.B.D. Comm.) at para 171.

[33] When courts find that there has been an agreement on essential terms, they will often imply non-essential terms into the agreement: McCabe, above at para 20; Fieguth, above; Hughes, above at para. 6. The lack of agreement on non-essential terms will not stand in the way of a finding of an agreement. Put another way, “it is not necessary that the original contract include all the ancillary terms that are already implicit in its content”: Ward, above at para. 54. “Even if certain terms of economic or other significance to the parties have not been finalized, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to a concluded and legally binding agreement”: RTS Flexible Systems, above at para. 45. For example, assuming an agreement on essential terms is otherwise in place, courts can imply terms concerning the granting of a release, the manner of payment and the timing of payment: Fieguth, above at para 21; Hodaie v. RBC Dominion Securities, 2012 ONCA 796 at para. 3; Imperial Oil Ltd. v. 416169 Alberta Inc., 2002 ABQB 386, 310 A.R. 338. Often these will be “mere formalities or routine language” Bawitko, above at p. 106.

BC Estate Lawyer – Power of Attorney Does Not Allow Gifts

Trevor Todd and Jackson Todd have over sixty combined years of experience in handling power of attorney and other estate litigation issues.

Re Derth 2024 BCSC 1033 the daughter of a demented mother  using her mother’s power of attorney asked the court to approve a $250,000 gift from the mother  to the daughter ( the attorney)..

The court refused.

The patient would have still been left with $3 million dollars to care for her self and there was evidence of a previous agreement to give the $250,000 to the daughter.

THE DECISION:

With some regret, I have concluded that the proposed gift is not lawful because it is foreclosed by s. 20(2) of the PAA. Accordingly, the question of an exercise of the court’s discretion does not arise.

[11] Statutory interpretation requires a reading of the text of a statute in its entire context and in its grammatical and ordinary sense harmoniously with the scheme of the statute, its object, and the intention of the legislature; Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC) at para. 21; Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20 at para.50.

[12] Broadly speaking, the PAA exists to regulate the exercise of powers of attorney. Powers of attorney are ubiquitous in estate planning. They are both useful and treacherous, because they enable the disposition of property without the consent of its owner. The owner is therefore vulnerable to misuse of the power of attorney. The vulnerability is acute where the owner is no longer legally competent. Subsections 20(1) to (3) of the PAA address this situation. They provide as follows:

20(1) An attorney may make a gift or loan, or charitable gift, from the adult’s property if the enduring power of attorney permits the attorney to do so or if

(a) the adult will have sufficient property remaining to meet the personal care and health care needs of the adult and the adult’s dependants, and to satisfy the adult’s other legal obligations, if any,

(b) the adult, when capable, made gifts or loans, or charitable gifts, of that nature, and

(c) the total value of all gifts, loans and charitable gifts in a year is equal to or less than a prescribed value.

(2) An attorney may receive a gift or loan under subsection (1) if the enduring power of attorney permits.

(3) Permissions under subsections (1) and (2)

(a) must be express, and

(b) may be in relation to a specific gift or loan, or charitable gift, or to gifts or loans, or charitable gifts, generally.
[Emphasis added.]

[13] The intention is clear. The sections are concerned with gratuitous transfers – gifts or loans – from the property of an adult person under disability. They establish that such transfers are permissible, but only in specified circumstances.

[14] Subsection 20(1) deals with gratuitous transfers in general and identifies two cases: (1) where the enduring power permits the transfer (which by subsection (3) means, expressly permits); and (2) alternatively, where the three requirements in subsections (2)(a) to (c) are satisfied.

[15] Subsection 20(2) deals with the special case of a gratuitous transfer (a gift or loan) to the attorney. Such a transfer is only permitted if the enduring power of attorney expressly permits.

[16] The language of the enduring power of attorney granted by Doreen is entirely general. The power of attorney does not expressly permit Eugene to effect a $250,000 gift to himself from Doreen’s funds. It makes no difference that Doreen intended the gift, prior to her incapacity. Express permission in the power of attorney is required by s. 20(2), and it is absent.

[17] I conclude that the proposed gift is not lawful. In the face of the statutory prohibition in s. 20(2), the court cannot authorize it.

BC Estate Lawyer-S. 58 WESA-Is It a Will?

Trevor Todd and Jackson Todd have practiced estate litigation for over sixty combined years , including S. 58 WESA claims as is the documents a valid will?

 

Section 58 WESA-“ Is It a Will”

 

Section 58 of Wills, Estates and Succession Act, SBC 2009, c.13 [“WESA”] has now been in effect in British Columbia for just over ten years. The purpose of this paper is to examine how this provision, perhaps the most “far reaching” of the WESA estate overhaul, has changed the estate litigation landscape. I venture to say that most non-legally trained people will find some of the recent s. 58 case law remarkable.

Section 58 WESA permits the court to allow a document to be fully effective as though it had been made as a will, where the court determines the document represents a deceased’s final testamentary intentions. Before WESA, documents that failed to strictly comply with the formal requirements of the Wills Act, R.S.B.C. 1996, c. 489 regarding the making, signing, and witnessing of a will were invalid.

The clear intent of s. 58 WESA is to allow the court to focus on what was the testator’s testamentary intention, rather than on technical deficiencies in the execution of the will. The court is permitted to give testamentary effect to a document, including one in digital form, that was not properly executed as a will, if the court is satisfied that the document represents the true testamentary intentions of the deceased.

The case law typically breaks down into two different scenarios with many variations:

  • Where will maker simply failed to comply with the formal requirements in completing a form such as proper execution-these are usually home – him made will situations; or
  • Where a third-party document is put forward is sufficient proof of the necessary intention to either make alter, revoke or revive a will-such as the lawyer’s file notes as to the will maker’s intentions.

The courts in several BC cases have stated that the closer the will comes to satisfying the formal requirements for complying with the proper execution of a will, the greater the chance is the court will apply s. 58 to cure it:

THE LAW

Simply put, section 58 of WESA permits the court to give testamentary effect to a document that was not properly executed as a will, if the court is satisfied that the document represents the testamentary intentions of the deceased.

The test to be applied became reasonably quickly settled in the two leading cases of by Estate of Young 2015 BCSC182 and Re Hadley Estate 2017 BCCA 311.

What makes these cases interesting is the myriad of facts that can leave one wondering if it could be a valid will.

 

 

Manitoba

The BC Courts have followed the reasoning of a Manitoba Court of Appeal case George v. Daily (1997) 143 DLR (4th) 273, which discussed at length the limits placed on a courts “curative powers” and held there must be a deliberate or fixed and final expression of intention as to the disposal of his/her property on death.

However, it must be established that the document(s) being propounded as a will was intended by the deceased to have testamentary effect. The court must therefore be satisfied on a balance of probabilities that the writing embodies the testamentary intent of the testator or testatrix.

The term “testamentary intention” means much more than a person’s expression of how he would like his/her property to be disposed of after death. The essential quality of the term is that there must be a deliberate or fixed and final expression of intention as to the disposal of his/her property on death: Bennett; Molinary v. Winfrey (1960), [1961] S.C.R. 91; and Canada Permanent Trust Co. v. Bowman, [1962] S.C.R. 711.

 

BC Law – Cured Wills

One of the leading cases on the curative powers of s.58 in B.C. involved curing pages of a memorandum done to a will and referred to as signed in the will, but the documents presented to the court were not signed.

Re Young Estate 2015 BCSC 182, which largely follows George v. Daily, held the memorandums disposing of personal effects were cured and formed part of the last will of the deceased.

…” The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death. A deliberate or fixed and final intention is not the equivalent of an irrevocable intention, given that a will, by its nature, is revocable until the death of its maker. Rather, the intention must be fixed and final at the material time, which will vary depending on the circumstances.”

The burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is a balance of probabilities.  A wide range of factors may be relevant to establishing their existence in a particular case.  Although context specific, these factors may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document:

While imperfect or even non-compliance with formal testamentary requirements may be overcome by application of a sufficiently broad curative provision, the further a document departs from the formal requirements the harder it may be for the court to find it embodies the deceased’s testamentary intention:  George at para. 81.

 

Re Hadley Estate 2017 311 confirmed the test set out two years earlier in Re Young. The case establishes:

  • British Columbia does not require a minimum level of execution or other formality to create a will;
  • a fixed and final intention does not mean an irrevocable intention;
  • the material time is usually when the document was created, but depending on the circumstances, a document may acquire a testamentary character by subsequent and sufficient manifestation of the will maker’s intention;
  • wide array of extrinsic evidence is admissible to illuminate the deceased’s state of mind and intentions; and
  • these issues are decided upon the civil standard of the balance of probabilities and are intensely fact specific.

 

“IMPROPERLY” WITNESSED WILLS

Re Yaremkewich Estate 2015 BCSC 1124, was an uncontested application to cure the defects of improperly witnessed wills. In this particular case, the court found that the two witnesses to the will testified they signed as witnesses to a blank will template, that had no attached pages setting out bequests as was found  with the will after death. They could not recall if the deceased signed the will, at the same time as them.

For hundreds of years prior to WESA the court would have found the will to be invalid for failure of proper execution. Instead, the court followed section 58(3)(a), which empowers the court to order that a document or other record is fully effective as the will of the deceased person if the court is satisfied that the document represents the testamentary intentions of that deceased person.

The court was further satisfied as to the testamentary intentions by reason of detailed wordings and pages of attachments left by the deceased in an envelope entitled with the name of the deceased and declaring it to be her last will.

Extrinsic evidence is admissible on the question of testamentary intent, and the court is not limited to the evidence that an inspection of the document provides.

 

 

 

Computer Message

In Re Hubschi Estate 2019 BCSC 2040 an electronic document found on the deceased’s computer entitled “Budget for 2017” message was found to be a valid will. The word document stated: “get a will made out at some point. A5-way assets split for remaining brothers and sisters. Greg, Annette or Trevor as an executor.”

The court followed Re Hadley that there is no minimum level of execution or other formality for a testamentary document to be found fully effective.

The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased property on death.


Signed Suicide Note

Gregoire v Cordani, 2020 BCSC 276 held that a signed but unwitnessed suicide note was remedied under section 58 WESA and held to be a valid will.

The note stated:

 

This is my will. Please respect my wishes.

Claude common-law husband gets my apartment and all its contents, and HSBC bank account

Michael brother gets all the rest RRSP account at HSBC

Stephen and Adam get nothing

Nobody, no doctors is to blame. Please be happy for me.

Signed- social insurance number

The court considered the following factors in reaching the conclusion the suicide note was a valid will, namely:

 

  • The document is referred to a will and states her intention that the

notice to be treated as such;

  • the note does not appoint an executor but specifically addresses the referred to parties to please respect my wishes. The court held that this is the direction to those parties to act on her behalf;
  • -the note was in the deceased’s handwriting, and signed by her;
  • the note was not witnessed, but it does refer to her depression and appears to be written in contemplation of taking her own life;
  • the note was found in a locked car by the place near where her body was found, indicating an intention that it be found;
  • the note was dated the same date that she went missing;
  • the deceased made specific bequests of major assets of her estate;
  • the notes stated, or social insurance number, bank account numbers and -the address of her apartment;
  • the language of the note as an air of finality;
  • she left nothing to her two other brothers and mother, which is consistent -with statements made to her common-law spouse husband; and
  • there are no allegations of testamentary incapacity or undue influence .

Lawyers Letters

Re McGavin Estate 2023 BCSC 819, the deceased, while in a rest home, met with her lawyers on two occasions. The lawyers in turn sent the client two letters confirming their instructions and asking for some clarifications or any possible changes that might be desired. The letters largely summarized the deceased’s assets and liabilities and her instructions for dividing her estate specifically amongst identified beneficiaries and specific purpose portions.

Covid struck and the client was not allowed visitors for the purpose of executing the will and while she told her lawyers that she did not wish to die intestate, she in fact appeared to do so.

The court found that the lawyer’s two letters of instructions for dividing up the estate were authentic, and they contained the full, final and fixed intention of the deceased for reasons that were included in the exchange of letters.


Unsigned/ Undated

Skopyk Estate 2017 BCSC 2335 cured an unsigned/undated will that varied an earlier will. The court found that the handwriting on the will was similar to other samples of handwriting produced.

The court was persuaded by the following extrinsic evidence:

  • it was pinned to a bulletin board in the apartment so it would be found;
  • The distribution was rational and the previous beneficiary had died;
  • directing the division of the residue in certain specific shares in mind with language that mirrored the language of the 1995 will;
  • although it was not signed or witness the word witness was written near the bottom;

 

  • -although the document was not dated, there was a reference at the top of the deceased will dated November 16, 1995, and it also corrected a typographical error in the 1995 will;

 

  • the handwriting was reasonably similar to handwriting in a letter entered and evidence; and

 

  • the day for heart surgery the deceased said he had been working on his well, and that his wishes were different from that of the 1995 will

 

Two Letters Changed the Will

In Re Noel Estate, 2023 BCSC 2473, a testator had a change of heart re a joint account held by her and the petitioner. She phoned and then wrote to her lawyer to change her will and the lawyer said it would be easier to prepare a letter to indicate her new intentions rather than doing a whole new will. The testator signed the letter in front of two witnesses.

The court found the letter to be authentic and to reflect the deceased’s intentions which she stated many times verbally and in the letter to more than one person. The court held that the letter altered the terms of the previous will.

 

White-Out Allowed

In Re Levesque Estate 2019 BCSC 927, the court found that the use of “white out” (and presumably a dark pen as well) to delete a gift in an existing will was a deliberate and considered act, which was validated under S.58 WESA.

 

CASES WHERE “THE CURE” REFUSED

Six Notes Refused

Re Lane Estate, 2015 BCSC 2162, set out for and against examination of the factors the court considered, and concluded that the six various documents did not form a valid will.

The factors supporting finding a will were:

  • the deceased used the formal language of “I, Elda Lane leave … to my son” in several of the notes;
  • some of the notes are signed at their end by the deceased;
  • the deceased told the petitioner she wanted him to have her house after she died and that she had left a note to that effect;
  • six of the notes contemplate a distribution of the estate by which the petitioner would receive all of the residue of the estate; and

 

  • the October 21, 2012 note identifies the property to be left to the petitioner as including the deceased’s principal assets, her house and the Scotiabank account.

Factors finding against a will were:

  • each of the notes is written on the back of a receipt, grocery list, calendar, or other scrap paper, suggesting impermanence and informality rather than a fixed and final intention;
  • none of the notes were witnessed.  They all lack one of the fundamental hallmarks of formal validity;

 

  • there is no express revocation of the deceased’s Will.  This case is distinguishable from Estate of Youngwhere the document admitted to probate was generally consistent with the deceased’s will;

 

  • none of the documents bear a title. Here there is no evidence that the deceased either showed or provided copies of her notes to anyone else;

 

  • the deceased appears to have made the December 15, 2014 and  January 9, 2015 notes at times when she thought she might shortly die.  By suggesting that the gift was contingent upon her imminent death these notes may not represent an expression of the deceased’s fixed and final testamentary intention.


No Final Testamentary Expression

Pulk Estate, 2018 BCSC 1321, dealt with a will done following major surgery and before the deceased’s death a few days later. A will was drafted following the surgery that purported to leave the deceased’s estate to his four siblings in equal shares. The will was not drafted by the deceased, and it was not signed by him prior to his death.

Contrary evidence was obtained where the best friend of the deceased told him he was going to leave everything to his daughter. The court found that the will did not represent a deliberate and final expression of the deceased testamentary intentions and refused to invoke the provisions of section 58 WESA to cure any deficiencies.

 

CONCLUSION

The critical issue in every section 58 will case is whether the document represents the deliberate or fixed and final intention of the deceased person as to his or her testamentary wishes.  The case law indicates that finality is the central concern.

It is obvious from the case law approving a curing of a will that the courts have allowed a very liberal interpretation as to what may got a valid last will.

Various factors have been considered section 58 applications, but no single factor is determinative, and could be given lesser more weight depending upon the circumstances in each case. For example, having a witness present to the execution of the will, will be given some weight by the court, and while British Columbia is not a substantial compliance jurisdiction, and has no minimal level of compliance needed, the absence of a signature or witness is not fatal to the will.

*Attention Reader: GET LEGAL ADVICE – It’s more complicated than you think*

The public is reluctant to pay a lawyer’s hourly rate to prepare what they invariably regard is a “simple” will. (Every notary/lawyer should know there is no such thing as a simple will).

Many lawyers have historically been prepared to prepare wills as a loss leader, but with increased overheads and consumer sensitivity to price,  there is friction in the area of preparation of wills, powers of attorney, representation agreements and other estate planning documents that, when combined with the information available on the internet, will cause many in the public to save on costs by preparing their own wills and other estate documents .

As the public becomes more aware of the curative provisions of WESA, they will become increasingly encouraged to prepare their own wills.

Most law firms that are economically viable in wills and estates now charge their hourly rate which is often much higher than the client is prepared to pay.

The curative provisions of WESA such as sections 58 and 59 were well-intentioned and generally are reasonable once the court is satisfied that the documents are authentic and reflect the final intentions of the deceased.

The problem essentially is that the legal test for mental capacity is a legal test, not medical, and the removal of the lawyer from the preparation of the will process is simply an unintended consequence  hat will ultimately lead to more contested “homemade” wills litigation, particularly in issues related to mental capacity, undue influence and wills interpretation.

BC Estate Lawyer- Joint Tenancy Severance

Jackson Todd and Trevor Todd have over sixty years experience in resolving estate disputes, including where a joint tenant’s conduct may sever the joint tenancy.

   JOINT TENANCY v TENANTS IN COMMON

 

Joint tenancy and tenancy in common are the two most common forms of concurrent property ownership in Canada.

In a joint tenancy, the “four unities” of title, interest, time and possession are present and co-owners hold an equal interest in the property as a unified whole. The common law treats joint tenants as a single tenant: each holding the whole for all, with no distinct shares held by anyone.

In contrast, in a tenancy in common one co-owner may hold a greater proportionate interest in the property than the other co-owner(s)

The principal and distinguishing characteristic of joint tenancy is the right of survivorship. When one joint tenant dies, his or her interest in the property is extinguished and passes to the surviving joint tenant(s) automatically by operation of law.

 

The right of survivorship is a revocable “expectancy” that manifests only upon success in the so-called “ultimate gamble” – survival – and then only if the joint estate has not been previously destroyed by an act of severance.

 

Unlike that of a joint tenant, a tenant in common’s interest in property remains intact upon death and passes into his or her estate

 

The Four Unities Required To Create a Joint Tenancy

 

  • Unity of title- means the title of each joint tenant arose from the same act or instrument.
  • Unity of interest -means their holdings are perfectly equal in nature, extent and duration.
  • Unity of time -means all the interests vested simultaneously.
  • Unity of possession -means each joint tenant has a right to present possession and enjoyment of the whole property, but no right to exclusive possession of any individual part of the whole.

Assuming all four unities are present, the question of whether a joint tenancy or a tenancy in common has been created is determined by the intention of the grantor.

 

 

SEVERANCE OF A JOINT TENANCY

 

A joint tenant is free to deal with his or her interest and may sever a joint tenancy, with or without the consent or knowledge of the other joint tenant(s).

After a joint tenant dies however, severance is no longer possible because death extinguishes the joint interest, thus a will cannot sever a joint tenancy: Bergen v. Bergen, 2013 BCCA 492 at para. 40;

 

When a joint tenancy is severed , the joint tenancy is converted into a tenancy in common and the right of survivorship is extinguished.

It is important to know that once the joint tenancy is severed it remains such and like a broken “ humpty dumpty” it can only be put together  by starting over and recreating the four unities.

 

As a consequence of severance each co -owner then becomes entitled to a  distinct share rather than an undivided interest in the whole. Bergen v Bergen 2013 BCCA 492.

 

              Severance Is “Typically” Affected In One of Three Ways:

 

1) By one person acting unilaterally ( and usually deliberately) upon his or her own interest, so as to destroy the four unities ( ie by transferring his or her interest to his or herself as provided for in the Property Act and the Law and Equity Act) ;

2) By mutual agreement, such as a written marital separation contract;

3) By any “ course of dealing” sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common- for example, conduct which demonstrates both tenants mutually dealt with their interests as several and separate.

The onus of proof rests on the party asserting the severance. McKee v .National Trust Co.(1975) 7 O.R (2d) 614 (CA).

There are several other modes of severance including but not restricted to bankruptcy, partition, and order made under matrimonial legislation.

The BC Court of Appeal in Bergler v Odenthal 2020 BCCA 175 confirmed that both a declaration of trust and a secret trust would have the effect of severing a joint tenancy. ( see also Public Trustee v Mee (1972) 2 WWR 424 where a bare trust declaration was held to sever a joint tenancy)

 

      

                                  SEVERANCE BY CONDUCT

 

The underlying rationale for a course of dealing, severing a joint tenancy is that it ensures that a right of  survivorship does not operate unfairly in favour of one owner, where the co-owners have demonstrated  through their conduct a  common intention to no longer treat their respective shares in the property as an indivisible unified whole.

The following are five courses of conduct between joint tenants that have resulted in a severance of their joint tenancy, sometimes without any knowledge or intention on their  part to have done so.

  1. Acrimonious Conduct between the Joint Tenants

 

In Preskar Estate v Wagner 20023 BCSC 80 a BC court found that a joint tenancy with a right of survivorship had been severed into a tenancy in common by reason of the joint owners acrimonious conduct to each  that was inconsistent with joint tenancy unity.

An unmarried  couple who owned their property in joint tenancy had acrimonious family litigation for many years, starting in 2007 that  never resolved. The joint tenancy was never severed and when Mr. Preskar  died, his interest in the joint tenancy property immediately went to his partner by right of survivorship.

The estate successfully sued arguing that their acrimonious course of conduct over many years of litigation showed that their “notional” unity of ownership under a joint tenancy had been abandoned, and thus the joint tenancy had been severed many years before his death in 2020.

The decision  meant that the half interest of the deceased would go to his estate rather than to the former joint tenant by right of survivorhip.

The BC court adopted the reasoning of the Ontario Court of Appeal as follows:

Hansen Estate v. Hansen, 2012 ONCA 112  dealt with spouses who separated and retained legal counsel, one party prepared  a new will,  and lawyers negotiated dividing  their joint assets, but one spouse died before the negations were completed.

The Appeal court held that even failed or uncompleted negotiations can lead to severance because “the negotiation of shares and separate interests represents an attitude that shows that the notional unity of ownership under a joint tenancy has been abandoned”.

 

 

  1. Agreement to Ultimately Pay the Sale Proceeds Into Two Separate Accounts

The Tessier v Tessier 2001 SKQB 399  cautions  that even the simple fact of retiring  parties signing an agreement to sell their  jointly owned property and pay the proceeds into separate accounts can by their conduct sever the joint tenancy into a tenancy in common.

The couple agreed to sell the property to a family member and prior to her death, the wife and husband had agreed that one-half of purchase price would be paid to each of them and the proceeds were to be maintained  in separate bank accounts .

These facts were sufficient indicia of destruction of unities of interest and possession, both by agreement and course of conduct.

 

  1. Partnership of Jointly Owned Property

 

In Garland v Newhouse 2021 BCSC 1291  ( upheld at 2022 BCCA 276) a partnership between non-spouses of a jointly owned property ran for profit or loss  was held to sever the joint tenancy when one of the partners died.

The parties had no personal relationship and had equally contributed to the purchase of the investment property, equally shared expenses associated with the property, and equally shared in profits derived. Their objective was to earn profit over time. They opened the joint bank account to manage the financial aspects of the business. The accounting records describe the arrangement as a partnership and individuals as partners.

The court found that there was in fact a partnership and that it was inconsistent with a joint tenancy with right of survivorship. Partners share profits and losses and the legal framework of a partnership is not compatible with the legal principles of a joint tenancy.

Where the property in issue is partnership property, there is a presumption that there is no right of survivorship as between partners, at least as concerns their beneficial interest in partnership assets:

Absent compelling evidence of a contrary agreement, a surviving partner holds legal title to property held in joint tenancy on trust for the surviving partner and the estate of the deceased partner: Agro Estate v. CIBC Trust Corp. (1999), 26 E.T.R. (2d) 314 at para. 44.

 

 

 

 

  1. Never Intended A Joint Tenancy

 

Lescano v Unlu 2016 BCSC 1535  – The court found that if the joint tenants ever were a couple their relationship ahd ended long ago, that at least one of the parties, if not both, did not understand the legal effect of a joint tenancy and did not want it from the outset. A hand written will prepared by one of the joint owners indicated that she wished her share of the property to go to her three children equally in the event of her death, and the survivor testifies neither of them ever did want a joint tenancy.

 

 

  1. Misuse of Power of Attorney

 

In  Zeligs v Janes 2016 BCCA 280 the BC Court of Appeal upheld a trial decision finding that a joint bank account was severed when one of the joint tenants withdrew funds from the joint account using a power of attorney that benefitted only herself.

In doing so the joint tenant automatically severed the joint fund and converted it into a tenancy in common thus extinguishing the right of survivorship.

 

            CONCLUSION

 

It is not exactly clear what evidence  and how much of it the courts may require in order to find that a joint tenancy has been severed by conduct, but it is certainly a growing area of law and the courts have shown a willingness to expand the area.

The courts are being presented with more and more fact patterns  of conduct where the co-owners have demonstrated  through their conduct a  common intention to no longer treat their respective shares in the property as an indivisible unified whole.

What is particularly interesting about this growth area of law is how uninformed the public and even the legal profession are about severance by conduct and  the possible significant financial and emotional consequences of their actions.

More importantly the lack of knowledge of a severance by conduct can lay dormant for many years until typically contested after death,  such as in the  Preskar Estate where the acrimonious behavior that severed the joint tenancy many years before was not reflected on the land title deed.

It will increasingly become the norm in matrimonial and estate litigation cases to explore whether in years past there was ever conduct between the joint tenants that might have severed their joint tenancy so that one half of the property is “ up for grabs” by the estate instead of going to the surviving joint tenant.