Joint Tenancy In Matrimonial Home Severed By Owners “Course of Dealing”

Joint Tenancy In Matrimonial Home

The Ontario Court of Appeal decision Hansen v Hansen Estate 2012 CarswellOnt 2051 is an excellent example to illustrate how co-owners of a property, held as joint tenants with a right of survivorship, can through a course of dealing, legally convert the joint tenancy ownership into one of tenancy in common, that has no right of survivorship. has blogged about this topic previously and this case is  a Court of Appeal decision in Ontario that is pursuing a line of court decisions that previously opined would expand.

The facts in this case are reasonably simple:

A husband and wife after 17 years of marriage separated with the wife moving out of the joint tenancy home.

The wife advised her husband that she wished to negotiate a separation agreement to divide the property quickly and that he could remain in the home while it was being appraised, if he’d bought her out.

The husband made a new will giving the estate to his daughters from a prior marriage and appointing them executors, and change the utilities to his own name.

The parties executed financial statements.

The husband died unexpectedly.

The wife claimed ownership of the home by way of joint tenancy.

The daughters brought an unsuccessful application at the trial level for a declaration that the father’s estate was entitled to an undivided one half interest in the home.

The trial judge reviewed the various methods of severing a joint tenancy, including a course of dealing, and referred to the definition of “course of dealing” in a law dictionary as “clearly recognizable pattern of conduct established or series of transactions or implementation of decisions”

The trial judge noted that there was no exchange of offers, discussion of division of proceeds of divorce, actions against each other, or exchange of correspondence regarding interests or otherwise formal severance of the joint tenancy such as in other cases, and accordingly the judge determined that a severance had not occurred in law.

The daughters appealed and the appeal was allowed by the Ontario Court of Appeal

The Appeal court held that the trial judge correctly enunciated the appropriate principles and correct legal test for severing a joint tenancy, but erred in restricting the application of severance by “course of dealing” to cases which followed patterns of conduct established in prior cases.

The test for severance by course of conduct required determination of whether the parties intended to mutually treat the interests in the property as constituting a tenancy in common, and the party asserting that joint tenancy was severed did not have to establish that co-owners conduct fell into the formulation found to have had effect of severing joint tendencies in other cases.

The court had to look at to the totality of the evidence to determine if the parties intended that the interest be treated mutually as constituting a tenancy in common.

The wife’s assertion of a right of survivorship was entirely inconsistent with the couples mutual intention to divide the property interests and hold interests in common rather than jointly. is of the view that this is a very significant case in the expanding case law of severance of joint tenancy by a “course of dealing”.

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