Life Estate Can Be Partitioned

Life Estate Can Be Partitioned

Aho v Kelly 1998 CarawellBC 1285 held that a one third owner of a property who also held a life estate in the property had the right to capitalize the life estate and force a sale of the property under the partition of property Act. The other two co owners could not have partitioned the property while the life estate was in place but the holder of the life estate could do so.

Here, this petitioner is a tenant in common in her own right. While she is also a trustee with the respondents under s. 96 of the Estate Administration Act (if that section still applies in light of the 1995 settlement), she nevertheless enjoys an independent capacity as a tenant in common and in that capacity she can invoke s. 2 of the Partition of Property Act.

28 Obviously, a court would be extremely cautious in ordering the sale of lands subject to a life estate where the life tenant does not consent. But where the life tenant agrees, the court enjoys jurisdiction to order a sale:

Chupryk v. Haykowskl (1980), 110 D.L.R. (3d) 108 (Man. C.A.) leave to appeal S.C.C. refused (1980), 110 D.L.R. (3d) (S.C.C.) 108n

29 Chupryk was a case similar to that at bar to the extent that the life tenant there was also a reversioner as to a one-third interest in title to the lands. Matas J.A. considered the cases at length. He summarized the Ontario cases (at 62):

The relationship of tenants in common to each other and to a life tenant has been considered in several decisions. In summary, it has been held (not unanimously) that partition legislation may be invoked in Canada only by persons having “an estate in possession” or having “the immediate right to its possession”: Laskin, ibid, p. 402.

In an early case, Lalor v. Lalor (1883), 9 P.R. 455, it was held by Proudfoot J., that a tenant for life is entitled to a partition and where there is a right to a partition there may be a right to a sale as the Court may determine. But in Murcar v. Bolton (1884), 5 0.R. 164 (followed in Rajotte v. Wilson (1904), 3 0.W.R. 737) in a contest between a life tenant and her children who held the remainder in fee, as tenants in common, it was held by a majority (2:1) that there was no power to compel a sale of land as against the tenant for life. …

30 Matas J.A. concluded (at 65):

… In my respectful view (supported, I think, by the reasoning in Lalor, supra, and in the dissenting judgments in Murcar and Bunting, supra) Mr. Chupryk is entitled to apply for an order for sale and the Court is empowered under the Act to exercise its equitable jurisdiction to make the order. The power is discretionary: Fritz v. Fritz (No. 1), 57 Man. R. 510, [1950] 1 W.W.R. 446, [1950] 2 D.L.R. 104 (C.A.).

No doubt the discretion would be exercised cautiously. It would be a rare case where a life tenant would be compelled to suffer partition or sale against his wishes. But here, the life tenant, who is also the registered owner of an estate in remainder, has not objected to a sale.

31 Chupryk was considered in Morris v. Howe (1982), 38 O.R. (2d) 480 (Ont. H.C.).

32 DuPont J. held (at 485, referring to Chupryk,):

To the extent that this decision may be seen as authority for the propositions that a life tenant may obtain sale of land over the opposition of a remainderman, or that one of several remainderman may obtain partition (and hence possibly sale) of the lands before the remainder has fallen into possession and without the consent of a prior life tenant, Lalor and Bunting v. Servos, establishes that the law of this province is to the contrary. But I think the conflict between the laws of Manitoba and Ontario in these respects may be more apparent than real. The essential fact in Chupryk, was that all the parties interested in the land desired sale. This, it appears to me, distinguishes the case from the various Ontario decisions to which I have referred. This also distinguishes it from the instant application.

33 It will be seen that the case at bar presents a different variation on the theme in Morris . Here one of the reversioners, who is also a life tenant, seeks a sale of the lands.

34 In Morris, DuPont J. goes on to say (at 485):

I do not think that where, as here, land is subject to consecutive interests of a sole life tenant and a remainderman, this Court can or ought to grant the life tenant an order the effect of which will be to defeat the remainderman’s interest in the lands without his consent and against his reasonable opposition. I find that the respondent’s opposition to sale of the lands is reasonable, having regard to all the circumstances. I leave open for future consideration factual situations where it can be concluded that such opposition is not reasonable.

35 I conclude that it is open to me to follow Chupryk, and I do so.

36 That then engages the court’s discretion under sections 2 and 7 of the Partition of Property Act.

37 I will deal with the exercise of my discretion, after I have considered the remaining questions which I have posed.

(b) Common Law Life Estate and Value

38 Clearly a common law life estate is a property interest having some “value”. I use that word in the sense of an amount of money or goods for which a thing can be exchanged in the open market. At common law, a life estate is alienable. Upon a transfer it becomes an estate pur autre vie.

39 Kwasnycki (supra) reminds us that a life tenant has the right to occupy the property in question and to rent or lease the whole or part thereof for his or her lifetime and to enjoy the net income therefrom.

44 That a common law life estate has value was finally, implicity, recognized in Crow v. Samiroden (December 22, 1997), Doc. New Westminister S0-34057 (B.C. S.C.) and Blowers, Re (1985), 24 E.T.R. 143 (Man. Q.B.).

45 I repeat the second question in this analysis:

Does the common law life tenant’s interest have a value capable of capitalization which should properly be discharged out of the proceeds of sale under the Partition of Property Act?

I respond in the affirmative.

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