Joint Tenancy Severed By Conduct

Joint Tenancy Severed By Conduct

Lescano v Unlu 2016 BCSC 1535 is a case exemplifying how conduct of joint tenants that is inconsistent with joint tenancy can have the legal effect of severing the joint tenancy into a tenancy in common.

The court found that if the joint tenants ever were a couple that it long ago ended and 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.

Was the joint tenancy severed?

[6]             There is no dispute that any discussion of severance of a joint tenancy must begin with the decision of Vice-Chancellor Wood in Williams v. Hensman (1861), 70 E.R. 862, at p. 867.  Vice-Chancellor Wood set out the three ways in which a joint tenancy may be severed.

These ways often referred to subsequently as “Rules” were summarized by Chief Justice Winkler, for the Ontario Court of Appeal, in the last sentence of para. 34 of Hansen Estate v. Hansen, 2012 ONCA 112, as follows:

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.

[7]             In Hansen Estate, the Ontario Court of Appeal expressly declined to follow or adopt what may be described as an added pre-requisite enunciated by Justice Southin, writing on behalf of the British Columbia Court of Appeal in Tompkins Estate v. Tompkins, [1993] B.C.J. No. 445 (C.A.).  In Tompkins Estate, Justice Southin stated that Vice-Chancellor Wood’s “Rules” were a species of estoppel.  At para. 17 of her Reasons she wrote:

In my opinion, the Vice-Chancellor was postulating a species of estoppel which might be put thus:  if joint tenants conduct themselves in their legal dealings with one another on a footing consonant only with their interests being several and not joint, one of them may not later resile and assert the interest was joint if a right of survivorship in him would be unjust to his fellow co-tenants who have themselves proceeded on the footing the interests were several.

[8]             Based on this conclusion, Justice Southin stated that the party seeking to assert severance must show that it relied on the acts of a co-tenant, to its detriment.

[9]             In Hansen Estate, Chief Justice Winkler provided cogent and compelling reasons for rejection of these added elements.  In paras. 47 and 49 through 51, Chief Justice Winkler explained the basis of his rejection of Justice Southin’s requirements for proof of reliance and detriment.

[10]         Having carefully considered both the decision in Hansen Estate and the cases cited to me that have applied it; and the decision in Tompkins Estate and the cases cited to me that have applied it: I prefer the reasoning in Hansen Estate.  I am satisfied, however, that even if I am bound to follow Tompkins Estate, the plaintiffs in the case at bar have established that a severance of the joint tenancy between Delma B and Mr. Unlu occurred before Delma B’s death in 2015.

[11]         As discussed in Hansen Estate, and in Tompkins Estate, the primary characteristic distinguishing joint tenancy from tenancy in common is the right of survivorship − that is, that upon the death of one joint tenant, his or her interest passes by operation of law to the other joint tenant or tenants.

 I am satisfied that the facts referred to in the Statement of Agreed Facts, supplemented by the facts set out in these Reasons, establish a course of dealing indicating that Mr. Unlu and Delma B considered themselves to have become tenants in common.

[52]         I have already referred to Mr. Unlu’s testimony indicating that he never wanted joint tenancy and from the outset did not understand or agree that on his death the entire property (the 99% interest he and Delma B held) would become the property of Delma B.  The handwritten “will” prepared by Delma B in December 2000 indicates that she also did not intend that her interest in the property pass to Mr. Unlu by right of survivorship.  She intended her “share” of the property to go to her three children in the event of her death.

[53]         If there was a spousal relationship between Mr. Unlu and Delma B, it ended soon after the purchase of the Richmond home.  Thereafter, the two lived separate and apart in the same home and conducted separate lives.  They did not maintain joint bank accounts or intermingle their finances in any way.  The parties did not maintain any other joint assets.  Delma B moved out of the home temporarily in 2004 and later Mr. Unlu permanently vacated the premises, leaving Delma B in sole possession.

[54]         In 2004, Mr. Unlu attempted to make a will leaving his share of the property to his daughter.  Mr. Unlu’s lawyer, Mr. Ash, wrote to Delma B and asserted on behalf of Mr. Ash that the joint tenancy had been severed at the time the parties separated.  Delma B did not, so far as the evidence indicates, dispute that assertion.  I am of the view that Delma B, who apparently had no legal representation at that time, relied on the representation made by Mr. Ash on behalf of Mr. Unlu, to her detriment.  After December 2005, she paid all of the expenses associated with the home, including the entirety of the mortgage and taxes, without demanding a contribution from Mr. Unlu.  Even after the fire occurred and she could no longer reside in the property, Delma B continued to bear all of the costs of preserving the property.  I conclude she would not have done so had she believed that in the event of her death, the entire benefit of payments made solely by her would go to Mr. Unlu.

[55]         I conclude that the joint tenancy between Mr. Unlu and Delma B was severed prior to the death of Delma B and that at the time of her death, the parties were tenants in common.

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