Bergler v Odenthal 2020 BCCA 175 found that a secret trust would have severed the joint tenancy between a husband and wife, when the husband instructed his wife surviving to transfer various assets to his brother and family from the joint tenancy property between them, and the wife agreed to do so.
The court held that there is no doubt that a valid declaration of trust, although not registered in the appropriate land registry office, could effectively sever a joint tenancy to the same extent as a transfer made to a trustee would do.
The principle that a declaration of trust has the same binding effect as a transfer to a trustee has long been the law and is set out in the often cited case of Milroy v Lord (1862), 45 ER 1185 at 494.
The land registry act did not change the common-law principle that a joint tenancy is destroyed by the alienation, even though not registered, by a joint tenant of his or her interest, thus ending the unity of title.
Bergler cited the decision of British Columbia Public Trustee v Mee (1971) 23 DLR (3d) 491 BCCA which stated:
“I fail to see any distinction in case where a joint tenant alienated his interest in the property director the person he wishes to benefit to one where he alienated it to a trustee to hold, and deal with for the benefit or interest of that person.
Both would affect the severance of the tenancy, so long as the owner of the interest binds himself by his dealings and therein, in my opinion, lies the main factor as to whether a severance is effected.”
The court saw no difference in principle between an ordinary declaration of trust, like occurred in the Mee decision, and the acceptance by a trustee of an obligation of a secret trust.
The trustee becomes the legal owner of the subject assets immediately, holding for the benefit of the beneficiaries.
A secret trust may be established where, in addition to the usual requirement for the three certainties for creating a trust, two elements are made out on the usual civil standard of proof: a communication by the deceased to their devisee, legatee, or intestate heir, and acceptance by that person of the request that they will hold the property in trust.
In addition the three certainties necessary for any express trust must be exhibited:
The words making the trust must be imperative;
The subject matter of the trust must be certain;
The object or person intended to take the benefit of the trust must be certain, and those certainties must be exhibited at the time the trust is created. Waters, Law of trusts In Canada at 107
In Zelligs v Janes 2016 BCCA 280 the appeal court upheld the decision of the trial judge who found that a joint tenancy bank account had been severed when one daughter withdrew funds from the joint bank account for her sole benefit, and then used them to acquire property and investments for her and her husband’s sole benefit.
The daughter had used her power of attorney to sell her mother’s property prior to her death, and deposited the net funds into a joint bank account that she held with her mother.
The trial judge held that the joint tenancy survived the sale using the power of attorney, but was severed when the daughter withdrew the funds from the joint bank account for her sole benefit while the mother was alive.
The court held that the withdrawal of the funds automatically severed the joint fund by severing the unity of title, and converted it into a tenancy in common, and extinguished any right of survivorship.
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. The right of survivorship is, however 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. When given inter vivos, a gift of survivorship rights is to be what is left, if anything, when the gamble is won.
The interest of a tenant in common is different with respect to survivorship. Unlike that of a joint tenant, a tenant in common’s interest in property remains intact upon death, and passes to his or her estate. Fuller v Harper 2010 BCCA 421 at para. 53.
Parties may hold legal title to property in one form of co-ownership while holding equitable title in another. For example, a mother and daughter may be joint tenants in law and tenants-in-common in n equity with respect to jointly held property by virtue of a trust or an act of severance. If the mother dies first, the daughter assumes full legal title by right of survivorship, but the mothers equitable interest, being held in common, passes to her estate and the daughter holds legal title, as trustee for the beneficial owners, namely herself and her mother’s estate.
Equity leans against joint tenancies. The relevant maxim is that equity is equality.
When a joint tenant dies, the old belongings to the survivor and the deceased’s estate takes nothing, which favours the tenant of longevity and is thus unequal, except perhaps for an equal chance at survival. For this reason, equity often treats persons were joint tenants at law, such as business partners are unequally contributing co-owners, as tenants-in-common. Mischief Holdings Property LTD v Mischel (2013) VSCA 375 at paras. 60-61
When a joint tenancy is severed, the joint tenancy is converted into a tenancy in common in the right of survivorship is extinguished. In consequence, each affected co-owner becomes entitled to a distinct share rather than an undivided interest in the whole.
In joint tenancy is composed of more than two persons, a blend of interest may be present.ie a mixture of joint tenancy between two parties who hold an interest in tenancy in common with the third.
Severance of a joint tenancy is typically affected in one of three ways:
By one persons acting unilaterally upon his or her own shares, so as to destroy the few unities i.e. by selling it;
by mutual agreement, i.e., by written contract
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 all tenants mutually dealt with their interests as several.
Other possible modes of severance include bankruptcy, partition or an order made under matrimonial property legislation. Tessier estate v Tessier 2001 SKQB 399 at para. 8.
The court in Zeligs agreed with the Tessier decision that the parties conduct may provide an evidentiary basis from which agreement can be inferred.
The question under the third rule is whether, in the absence of agreement, it would be unjust to permit a party to assert survivorship rights, because of the parties mutual treatment of their interests.
Ascertaining whether a joint tenancy has been severed is a factual question, often determined on the basis of reasonable inferences. It requires the application of a legal standard to the facts.
The court found that the joint tenancy bank accounts were severed when the monies were transferred from the joint account of the sale proceeds, into an account for solely herself and her husband, while her mother was still alive.
When the daughter transferred the sale proceeds to herself and her husband, she destroyed the unity of title on the joint bank accounts, and thus converted the account into a joint tenancy in common composed of two equal shares and extinguishing the right of survivorship.
The nature of a joint tenancy includes the right of survivorship, which is it’s principal distinguishing characteristic.
In Zeligs v Janes 2016 BCCA 280 the court described the right of survivorship at paragraph 41:
The right of survivorship is, however, a revocable expectancy that manifests only upon success in the so-called ultimate gamble – survival – and then only if the joint estate is not been previously destroyed by an act of severance. When given inter vivos , a gift is survivorship rights is to what is left, if anything, when the gamble is one. Simcoff v Simcoff MBCA 80 at 64:“
In McKendry v McKendry 2017 BCCA 48 the court also considered the right of survivorship at paragraph 29:
“So long as the requirements of a binding gift are met, the owner of property may, during his or her lifetime, make an immediate gift of a joint tenancy, including the writer survivorship. This is so regardless of whether the donee of the gift is to hold it for the benefit of the donor will he or she is alive. When gifted inter vivos, the right of survivorship is a form of expectancy regarding the future. It is a right to which is left of the jointly held interest, if anything, when the donor dies. Bergen v Bergen 2013 BCCA 492 at para.37
The Four Unities
A joint tenancy is defined by the confluence of the four unities: unity of title, interest, time and possession.
The four unities were described in Zeligs v Janes 2016 BCCA 280 as follows:
“Unity of title means the title of each joint tenant arose from the same act or instrument.
2. Unity of interest means their holdings are perfectly equal in nature, extent and duration.
3. Unity of time means all of the interests vested simultaneously.
4. 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.”
Beneficial Ownership Between Joint Title Holders
Not all jointly owned property is subject to a true joint tenancy.
In Pecore v Pecore 2007 SCC 17 property that is held in joint tenancy can give rise to three potential scenarios in terms of the beneficial interests of the titleholders:
a) A true joint tenancy, in which the joint tenants are each owner of the whole. Each enjoys the full benefit of property ownership of the ultimate survivor will enjoy the whole title for him or herself;
b) A resulting trust, wherein only one joint tenant has any beneficial interest in the property and the other joint tenant, usually a gratuitous transferee, holds title in trust for the other. And has no beneficial interest in the property;
c) A scenario which is sometimes referred to as the gift of the right of survivorship, were in a joint tenant is gratuitously placed on title and has no beneficial entitlement to the property during the lifetime of the donor, but if the donee survives the donor, the donee will receive the entire property by right of survivorship. In Bergen v Bergen 2013 BCCA 492 at para. 37, the court stated that a gift of the right of survivorship in a joint account as an immediate gift of the joint interest consisting of whatever balance exists in the account on the transfer his death, assuming he or she dies first”
A joint tenant may sever a joint tenancy with or without the consent or knowledge of the other joint tenant. Many joint owners are shocked to learn that this has in fact happened without their knowledge. They may be even more surprised to learn that their conduct also lead to a severance of their joint tenancy interest.
When a joint tenancy is severed the joint tenancy is converted into a tenancy in common, and the right of survivorship is extinguished. As a result of the severance, each affected co-owner(s) ceases to become a joint tenant, and instead as a tenant in common, owns a distinct share rather than an undivided interest in the whole.
It is long-established law that severance is typically affected in one of three ways:
1) By one person acting unilaterally upon his or her own shares, so as to destroy the four unities ( ie by transferring his or her interest to his or herself) ;
2) By mutual agreement, such as a written 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
The onus of proof rests on the party asserting the severance. McKee v . National Trust Co.(1975) 7 O.R (2d) 614 (CA).
The BC Court of Appeal in Mayer v Mayer Estate 2018 BCSC 2225 adopted the reasoning of the Ontario Court of Appeal in Hansen estate v Hansen 2012 ONCA 112 as to what constituted a course of dealing sufficient to establish that the joint tenancy and property was severed, with the result that the co-owners interest in the property are held by way of tenancy in common.
The Ontario court stated:
131. A proper application of the course of dealing, test for severing a joint tenancy requires the court to discern whether the parties intended to mutually treat their interest in the property as constituting a tenancy in common. It is not essential that the party requesting the severance establish that the co-owners conduct falls into a formulation found to have had the effect of severing a joint tenancy. In other cases. The court’s inquiry cannot be limited to matching fact patterns to those in prior cases. Rather, the court must look in the corners entire course of conduct – in other words, the totality of the evidence – in order to determine if they intended that their interests are mutually treat it as constituting a tenancy in common. This evidence may manifest itself in different ways. Each case is idiosyncratic and will turn on its own facts.
The court went on to state that the interests of all were mutually treated requires that the co-owners knew of the other’s position, and that they all treated their respective interests in the property is no longer being jointly held. Such knowledge can be inferred from communications her conduct.
The underlying rationale for a course of dealing, severing a joint tenancy is that it ensures that a writer survivorship does not operate unfairly in favor of one owner, where the co-owners have showing, through their conduct, common intention to no longer treat their respective shares in the property is an indivisible, unified whole.
For example, in the context of negotiations between spouses were in the midst of a marriage breakdown, even failed to uncompleted negotiations can lead to a severance because the negotiation of shares in separate interests represents an attitude and that shows that the notional unity of ownership under a joint tenancy has been abandoned.
After a joint tenant dies, severance is no longer possible, because death extinguishes the joint interest. For this reason a testamentary disposition ( a will) cannot sever a joint tenancy. Bergen v Bergen 2013 BCCA 492 at para. 40
Zeligs v James 2016 BCCA 280 describes the nature of and differences between a joint tenancy and a tenancy in common.
In my experience, the general public as a poor understanding of the difference between these similar sounding yet vastly different legal principles.
In fact joint tenancy and tenancy in common are the two most common forms of joint ownership and basic estate planning in Canada.
Probably most married couples for example own their house in joint tenancy, although not necessarily.
Any property, both real and personal may be owned in either joint tenancy or tenancy in common.
The principal and distinguishing characteristic of a joint tenancy is the right of survivorship in that when one joint tenant dies, his or her interest in the property is extinguished and passes to the surviving joint tenant(s).
The interest of a tenant in common is very different with respect to survivorship. 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. Fuller v Harper 2010 BCCA 421 at para.53
In a joint tenancy, the four unities of title, interest, time in 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 the all, with no distinct share 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-owners. Hansen Estate v Hansen 2012 ONCA at paras 19-30.
Joint Tenancy: The Four Unities:
1) Unity of title means the title of each joint tenant arose from the same act or instrument.
2) Unity of interest means their holdings are perfectly equal in nature, extent and duration.
3) Unity of time means all the interest, vested simultaneously.
4) 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 legal question may still remain as to whether the joint tenancy or a tenancy in common has been created, as determined by the intention of the grantor. Felske Estate v Donszelmann 2009 ABCA 209.
If the land title registry does not reflect that the title is held in joint tenancy, then barring a clerical error at the and title office, the law presumes that the property is held as tenants in common.
In Gully v Gully 2018 BCSC 1590 the court rejected a claim by a mother who transferred her property into joint tenancy with her son without his knowledge, and held that the transfer was a gift as per the law relating to intention at the time of the transfer as being determinative if it is a gift or a resulting trust.
In 1999 Ms. Gully purchased her home in Burnaby, using proceeds of sale from a previous home owned by her and her husband. In 2015, she added her son is a joint tenant on title based on estate planning advice. She received at the time, but did not advise her son that he had been added as a joint tenant of the property.
In 2017. The sun consented to judgment in the amount of $800,000, not knowing that he was on title to the Burnaby property.
The creditor registered a certificate of judgment upon his undivided half interest in the Burnaby property and sought execution proceedings.
the Court held that the transfer was a gift to the son and that the judgement creditor was correct in being able to file a judgment against the son’s interest in the property.
Ms. Gully sued asserting that she had no intention of transferring any part of her beneficial interest in the Burnaby property to her son, and that the registration of joint tenancy was made solely to facilitate the transfer of the property to her grandchildren on her death. This statement, however, was contrary to the statement of intention found in the will itself.
The court referred to Fuller v Fuller 2010 BCCA 421 BCCA on how the evidence of the transferors intention should be considered:
48. “ In Pecore the Supreme Court of Canada discuss the nature of the evidence to be considered. In general, evidence of the transfers intention at the time of the transfer ought to be contemporaneous, or nearly so, to the transaction—“
The court went on to discuss various authorities that common-law where the courts have traditionally viewed with mistrust the admissibility of evidence on post transfer conduct or statements, because of transferor could’ve changed his or her mind. Subsequent to the transfer and because donors are not allowed to retract gifts. The court also noted that evidence by a party to the litigation may be admissible against that party for a limited purpose if it is found the relevant to the issue of the transferors intention at the time of the transfer.
49 “ in adopting this more liberal stance on the admissibility of post transfer conduct, the court cautioned that the trial judge must assess the reliability of this evidence and determine what weight it should be given, guarding against evidence that is self-serving or that tends to reflect the change in intention. The assessment of the reliability of post transfer conduct admitted into evidence will include an assessment of the reasonableness of any inferences that are sought to be drawn from that conduct, including the inherent probability or in probability of competing explanations as to the transferor intent.
Ajayi v Oziegbe2017 ONSC2732 discussed the concept of occupational rent where one co owner occupies a jointly owned property to the exclusion of the co owner, and the co owner seeks damages for the use of the property and the occupying party seeks competing damages for the costs of carrying on the property such as maintenance and upkeep.
Occupation Rent and Carrying Costs
101 This brings me to Mr. Ajayi’s claim for occupation rent. The principles relating to occupation rent are set out in Erb v. Erb, 2003 CanLII 2112 (ON SC), where the Court stated at paras. 73 and 74:
In evaluating the claim for occupation rent, the jurisprudence establishes that a court has jurisdiction to grant occupation rent where it would be equitable and reasonable to do so. The court should look to a number of factors, including when the claim was first raised, the duration of the occupancy, as well as other circumstances existing between the parties: McColl v. McColl (1995), 12 R.F.L. (4th) 449; McKinlay v. McKinlay (1996), 22 R.F.L. (4th) 212. I subscribe to the observations of J.W. Quinn J. as set forth in paragraph 57 of Higgins v. Higgins, [2001] O.J. No. 3011. I think the case of Adams v. Adams (2001), 15 R.F.L. (5th) 1, relied upon by the defendant, to have little application to this case in that there the amounts paid by the husband were “prepayments” on the mortgage and were agreed by him to have been paid voluntarily for the family’s benefit. The expenses paid by the plaintiff in this case were not of that type or for that purpose.
I accept the defendant’s submission, supported as it is by remarks in Higgins, supra that as a basic proposition there should be an allowance for occupation rent if there is a claim for expenses during occupancy and prior to sale. The evaluation of those competing interests has to be decided based on all the circumstances in the case.
102 In resisting a claim for occupation rent, Ms. Oziegbe points to the decision of Horkins J. in B(J) v. M.(D.), 2014 ONSC 7410, where she states at para. 152:
The facts of this case do not support the respondent’s claim for occupancy rent. The respondent’s inability to use the matrimonial home arose from his criminal conduct when he assaulted the applicant. The applicant has been solely responsible for all of the household expenses since separation. It is not reasonable or equitable to award occupation rent given these facts. The request is denied.
103 When these decisions are reviewed, it is clear that the Court has the ability to consider the equities of the case in deciding whether to order occupation rent. The conduct of Mr. Ajayi in assaulting Ms. Oziegbe is a factor that supports denying Mr. Ajayi’s claim for occupation rent. However, I am of the view that this factor is outweighed by the factors in favour of granting occupation rent. These factors are:
a) The title to half the property should have been with Mr. Ajayi, and his equity has been tied up in the home, preventing him from investing it elsewhere.
b) Mr. Ajayi is responsible for the carrying costs for the home. As noted by Glithero J. in Erb, supra, where there is a claim for expenses there should be an allowance for occupation rent.
c) The delay in Mr. Ajayi obtaining his equity between September of 2015 and now is as a result of Ms. Oziegbe defending this case, and claiming that there was no resulting trust.
104 The parties have agreed on the amount that should be charged for occupation rent, and I have included that in my calculations in Appendix “1”. When the carrying costs are set off against the occupation rent, then Mr. Ajayi owes Ms. Oziegbe an adjustment of $5,773.44, which will be paid out of the proceeds from the house.
Bindley Estate v Quartermaine Holding Ltd. 2017 BCSC 672 ordered partition and sale of a property %50 owned by two parties where one party wished to sell and the other refused. They we unable to agree on a price for the respondent to buy out the petitioner’s interest. The petitioner estate wished to sell in order to wind up the estate of a deceased owner in a residential apartment .
The Court ordered a sale of the property pursuant to section 6 of the Partition of Property act.
Sections 2 and 6 of the act states:
2 (1) All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.
6 In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions.
[27]In McRae v. Seymour Village Management Inc., 2014 BCSC 714, a case involving a condominium development near Seymour Mountain in North Vancouver where 105 owners wanted to sell and 9 did not, Justice Fenlon stated at para. 20:
… [T]he Court, in exercising its discretion, is concerned with doing justice and must ultimately weigh the significance of the respondents’ reasons for objecting to the sale against the petitioners’ interest and reasons for wanting the [sale]. …
[28]In the end, and as all the cases seem to agree, it is a matter of discretion under s. 6. In the exercise of the court’s discretion, the court must act judicially and fairly. One consideration will be whether an overriding fairness and similar result can be obtained by some other reasonable process: Richardson. v. McGuinness (13 December 1996), Vancouver Registry, C965381, (B.C.S.C.) at para. 34.
[38]The court has a broad discretion to fashion a remedy that brings the parties’ dispute to an end in the fairest and most appropriate possible way. The respondent asks that if an order for sale is to be made, that I consider postponing it to allow for some tax planning and possible refinancing. The petitioner says that, given that this petition was filed some six months ago, the respondent has had sufficient time already.
[39]I have considered the various options that may help a party solve this impasse. I find that the most appropriate remedy is to make the following orders:
a)On or before June 9, 2017, and absent an agreement to the contrary, or absent any further court order, the parties will jointly appoint and engage an independent real estate broker (the “Broker”) to offer the Property for sale and obtain the highest price and most favourable terms (collectively called the “Sale Terms”) available on the open market. If the parties are unable to agree on the Broker to be engaged, the parties are at liberty to apply for an order in respect thereof.
b)The respondent is at liberty to apply for an extension for the listing of the Property for sale past the June 9, 2017 deadline should the respondent consider it has appropriate grounds for an extension.
c)Each of the parties may submit an offer to purchase the Property if either so wishes, provided that neither of them will act or omit to act in any way that affects the integrity of the sales process and the Broker’s mandate as set out in this order.
d)Except as provided in subpara. (e) below, and subject to a right of first refusal, the Property will be sold pursuant to the sale terms, and upon completion of the sale, the net sale proceeds will be distributed equally between the parties.
e)Instead of a sale of the Property, upon a determination of the sale terms, each of the parties may offer to purchase from the other that other’s 50 percent interest in the Property for an amount equal to the net amount that the vendor will receive if the Property is sold pursuant to the sale terms.
f)If necessary, each party has liberty to apply to the court for directions with respect to the marketing of the Property or as to the conduct of sale on three days’ notice to the other if such directions are necessary.
g)All necessary accounts, directions and inquiries may be taken, including a determination of net income owing to the parties, from the operation of Property, up to the date the sale of the Property completes.
h)The parties have liberty to apply for the appointment of a trustee to conduct the sale of the Property and to distribute the net sale proceeds as the court directs.
Whether property be owned as tenants in common, or as joint tenants, if the parties cannot agree on the sale of the property, the BC Court has the power to do so under the provisions of the Partition of Property Act RSBC. This blog sets out the type of partition and sale court order that should be sought.
The jurisdiction to order the partition or sale of land owned by co-tenants is found in the Partition of Property Act, R.S.B.C. 1996, c. 347
In an Ontario case MammomeEstatevMammome 2017 ONSC 3403 there was initially a court order made for partition and Sale that was subsequently amended by a second court order that provided for greater certainty due to the failure of one party to co operate with the named realtor by such things as refusing to allow a for sale sign and refusing to sign a listing agreement.
First Order
THIS APPLICATION made by the Applicants for an order directing the properties municipally known as 7912 Kipling Avenue and 7918 Kipling Avenue, Vaughan, Ontario (the “Properties”) be sold, for an order directing an accounting of the income and expenses of the Properties, and for an order directing that the Respondent Density Garden Enterprises Inc. be wound up, and this CROSS-APPLICATION made by the Respondents for an order for specific performance directing that the Applicants’ one-half direct and indirect interests in the Properties be sold to the Respondent, Emilio Mammone, . . . .
1. THIS COURT ORDERS THAT the following lands and premises be listed for sale, marketed and sold:
2. THIS COURT ORDERS THAT the sale of the Properties shall be conducted in accordance with the following:
(a) The Parties shall retain a real estate agent selected by the Applicants, to assist with the listing for sale, marketing and sale of the Properties, and who shall act on the instructions of the Applicants;
(b) The Parties shall retain Frank Sgro, real estate solicitor, to assist with the completion of the legal work necessary to facilitate and effect the sale of the Properties; and
(c) The Parties will accept offers to purchase either of the Properties if such offers are recommended for acceptance by the real estate agent identified in subparagraph (a) above, and will otherwise take all reasonable steps to co-operate with the real estate agent to effect the sale of the Properties.
3. THIS COURT ORDERS THAT the net proceeds of the sales of the Properties shall be paid as follows:
(a) in respect of 7912 Kipling,
(i) 50% thereof to the Estate of Frank Mammone, and
(ii) 50% thereof to the Respondent Emilio Mammone,
4. THIS COURT ORDERS that the Cross-Application of the Respondents is dismissed.
5. THIS COURT ORDERS that the Respondents shall provide an accounting to the Applicants with respect to all rental and other revenues generated by the Properties, and all taxes and expenses paid . . . . The accounting agreed to by the Parties shall include an assessment of the services performed by Emilio Mammone for the purpose of calculating its value. . . .
7. . . . . subject to the accounting hereafter referred to;
(b) in respect of 7918 Kipling,
(i) 50% thereof to the Estate of Frank Mammone, as a shareholder of 50% of the shares of the Respondent, Density Garden Enterprises Inc. and,
(ii) 50% thereof to the Respondent Emilio Mammone, as a shareholder of 50% of the shares of the Respondent, Density Garden Enterprises Inc.
subject to the accounting hereafter referred to.
The Applicants brought their application to sell the properties and to remove Emilio as a participant in the sale process.
C. Discussion and Analysis
22 It undoubtedly saves considerable legal expense if the parties to a Partition Act proceeding will co-operate to sell the property, but in the immediate case, the parties will not co-operate and more expensive direct court intervention is required. There is little doubt that Justice Dow’s Order is not working and that the Order needs to be revised to bring closure to this family dispute in a way that is fair to both sides.
23 There is no dispute that the court has the jurisdiction to vary Justice Dow’s Order and both parties sought the court to exercise the jurisdiction in their favour and in a way that would disfavour the other.
24 Court supervision in a Partition Act application is typically done by referring the sale to a Master, but, in my opinion, that is not necessary in the immediate case and all that is required is to delete paragraph 2 from Justice Dow’s Order and to substitute the following:
Amended Order
2. THIS COURT ORDERS THAT the sale of the Properties shall be conducted in accordance with the following:
(a) The Applicants shall retain and sign a standard listing agreement with a term of 45 days with Alfredo DiGenova, to assist with the listing for sale, marketing and sale of the Properties, and who shall act on the instructions of the Applicants;
(b) The Parties shall retain Frank Sgro, real estate solicitor, to assist with the completion of the legal work necessary to facilitate and effect the sale of the Properties;
(c) The acceptance of any offer is subject to court approval and if the Applicants receive an offer within the listing period, they may bring a motion for court approval of the sale;
(d) The Respondent Emilio Mammone may submit offers but shall not have a right of first refusal;
(e) If no offer is received within the period of the listing, the Applicants may apply for an order extending the time for the listing of the properties or for any other order that is just;
(f) If the court approves the acceptance of the offer, and the Respondents refuse to sign the transfer to the purchaser, the court shall make a Vesting Order pursuant to s. 100 of the Courts of Justice Act;
(g) The real estate commission, conveyancing lawyer’s fees shall be paid out of the proceeds of sale; and
(h) If Emilio has not paid the costs awards of the Partition Act proceedings made against him, those costs shall be deducted from his share of the proceeds of sale.
A gift requires three elements to be legally effected, namely an intention to donate, an acceptance of the gift, and delivery of the gift. All three elements must be present for the gift to be complete, and it is then irrevocable.
The gift is the voluntary transfer of property from one person to another without full consideration.
It is well settled law, as confirmed by the Supreme Court of Canada in the Pecore v Pecore 2007 SCC 17 that the courts look to the intention of the donor at the time of the transfer in order to determine if a gift was actually intended.
Anyone who intends to make a gift of property for little or no consideration must ensure that the intention of the donor is well documented. A Deed of gift given under seal, along with the statutory declaration of the intention to gift is probably the best evidence that the courts will rely upon.
The problem however is that a minority of purported gifts are not substantiated at all as to the intention of the donor, which then forces, the court to assess the reliability of the evidence, if any of intention to gift.
Probably the most common form of contentious gifts are the use of joint tenancy in both real property and investments. By reason of the nature of the joint tenancy, upon the death of a joint tenant, the surviving joint tenant automatically becomes the registered owner of the property by right of survivorship. This happens immediately upon death, and does not form part of the estate of the deceased or attract probate fees.
Common reasons for putting property in joint tenancy is to avoid probate fees or avoid a claim under the wills variation statutes, which are inconsistent with an intention to gift and will typically result in a claim of resulting trust being made against the surviving joint tenant.
Accordingly, a mere transfer of the legal title into joint tenancy is not conclusive as to the transfers intention as the beneficial interest may belong to the estate of the deceased and not the surviving joint tenant unless there was a clear indication of the transfers intention to gift.
While the courts will primarily look at the time of the transfer as to the intention of the deceased as to whether a gift was intended, the courts may also consider the donors subsequent actions to the extent that those actions are relevant to the donors intention of the time of transfer.
Accordingly, a transfer of title into joint tenancy has three potential legal consequences:
A) an immediate gift of both legal and beneficial title;
B) a transfer of the legal title only, so that the transferee holds the property on a resulting trust for the transferor’s estate;
C) as recognized in the Pecore decision, a transfer of the legal title with a right of survivorship in the asset, but a transfer of beneficial title only upon the death of the transferor.
McKendry v McKendry 2015 BCSC 2433 followed the Pecore case and stated inter alia:
[109] The legal principles applicable when considering a gratuitous transfer into joint tenancy are not in dispute. The basic question is whether the transferor intended to make a gift, or whether the transferee holds the property transferred on a resulting trust.
[110] Pecore v. Pecore, 2007 SCC 17, is the leading case.
[111] It is the actual intention of the transferor at the time of the transfer that is relevant: Pecore, at paras. 5,44 and 59. The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers.
When a transfer is challenged, the presumption allocates the legal burden of proof.
Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended. See Pecore, at paras. 24 and 43.
Rothstein J. also noted (Pecore, at para.44):
[44] As in other civil cases, regardless of the legal burden,
both sides to the dispute will normally bring evidence to support their position. The trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. Thus, as discussed by Sopinka et al, in The Law of Evidence in Canada, at p. 116, the presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.
[112] Accordingly, where a gratuitous transfer is being challenged, the trial judge must begin the inquiry by determining the proper presumption to apply and then weigh all the evidence relating to the actual intention of the transferor to determine whether the presumption has been rebutted: Pecore, at para. 55. In general, evidence of the transferor’s intention at the time of the transfer ought to be contemporaneous, or nearly so to the transaction: Pecore, at para. 56.
Nevertheless, evidence of intention that arises subsequent to a transfer should not automatically be excluded. However, such evidence “must be relevant to the intention of the transferor at the time of the transfer
