The Partition Act -Courts Order Co-Owned Property Sold

Partition of property actWhether 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.

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 It is clear that physical partition is impossible, so a sale is the only method for the division of the parties’ interests.
The relevant provisions of the Act are set out below:

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.

(2) Subsection (1) applies whether the estate is legal or equitable or equitable only.

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.

In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if it appears to the court that because of the nature of the property involved, or of the number of parties interested or presumptively interested in it, or of the absence or disability of some of those parties, or of any other circumstance, a sale of the property and a distribution of the proceeds would be more beneficial for the interested parties than a division of the property, the court may

on the request of any of the interested parties and despite the dissent or disability of any other interested parry, order a sale of the property, and give directions.

8.(1) In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, then if any party interested in the property involved requests the court to order a sale of the property and a distribution of the proceeds instead of a division of the property, the court may order a sale of the property and give directions.

The court may not make an order under subsection (1) if the other parties interested in the property, or some of them, undertake to purchase the share of a party requesting a sale.
If an undertaking is given, the court may order a valuation of the share of the party requesting a sale in the manner the court thinks fit, and may give directions.

Section 2 provides the authority to order partition or sale on application of a tenant in common. Section 6 provides that where parties entitled collectively to one-half or more of the property request a sale, the court must order a sale unless it sees good reason to the contrary. Section 7 provides for a situation not coming within s. 6 where a party or parties requests a sale.

It is only s. 8 of the Act that provides for the valuation of property and the purchase by one or more of the parties of the interest of the party requesting a sale upon the giving of an undertaking. In my view, Tina is not entitled to rely on s. 8 for two reasons. Firstly, she is the party who by commencing the action requested the sale and it is the other parties who would have the ability to purchase her interest (see Hunfeld v. Molendijk. 2012 BCSC 797 (B.C. S.C.) at paras. 55 — 56). Secondly, and in any event, Tina has not provided the necessary undertaking under s. 8. She merely asks for an opportunity to buy the Property if she can obtain financing.

1961 SCC Case Holds an Unregistered Transfer of Land Severs a Joint Tenancy

Sever JT SCC stonehouse.

1961 CarswellBC 159, 37 W.W.R. 62, [1962] S.C.R. 103, 31 D.L.R. (2d) 118

Stonehouse v. British Columbia (Attorney General)

Stonehouse (Plaintiff) Appellant v. Attorney-General of British Columbia (Defendant) Respondent

Supreme Court of Canada

Judgment: December 15, 1961

Family Law — Family property on marriage breakdown — Assets which may be excluded from property to be divided — Division of property in joint tenancy

Real Property — Joint Tenancy — Conveyance by Joint Tenant of Interest Operates as Severance — Unregistered Transfer of land — Result Unaffected by Land Registry Act, B.C., S. 35 — No Duty on Registrar to Inquire Whether Transferor Dead or Alive.

The execution by a joint tenant of a transfer of his interest in land destroys the unity of title without which a joint tenancy cannot exist at common law. This result obtains under the Land Registry Act, RSBC, 1948, ch. 171, even though said transfer is unregistered, by virtue of the opening exception to sec. 35 of said Act, “Except as against the person making the same ….” Davidson v. Davidson, [1946] S.C.R. 115, at 119, which affirmed [1945] 2 W.W.R. 576, 62 B.C.R. 161, 9 Abr Con (2nd) 284, quoted and applied. Wright v. Gibbons (1949) 78 Comm LR 313, distinguished, on the ground that the section of the Tasmania Real Property Act under consideration therein contained no such exception.

An alienation of his interest by a joint tenan as a severance of the joint tenancy. Williams v. Hensman (861) 1 J & H 546, at 557, 30 LJ Ch 878, 70 ER 862, quoted. There is nothing in said Act which changes the effect of the common law in this regard.

In view of this result from the execution by a joint tenant of an unregistered transfer, the registrar is under no obligation, on the presentation of said transfer for registration, to inquire whether the joint tenant who executed said transfer is dead or alive.

Appeal from the judgment of the British Columbia Court of Appeal, (1960-61) 33 W.W.R. 625, 1960 Can Abr 1492, which allowed an appeal from the judgment of Manson. J., (1960-61) 33 W.W.R. 66, dismissed.

The judgment of the court was delivered by Ritchie, J.:

1 This is an appeal from a judgment of the Court of Appeal of British Columbia, (1960-61) 33 W.W.R. 625, reversing and setting aside the judgment of the trial judge, (1960-61) 33 W.W.R. 66, by which the appellant had been awarded damages against the Attorney-General of British Columbia under the provisions of sec. 223 (1) of the Land Registry Act, RSBC, 1948, ch. 171, which read as follows:

223. (1) … any person sustaining loss or damages caused solely as a result of any omission, mistake, or misfeasance of the Registrar, or any of his officers or clerks, in the execution of their respective duties under this Act, may bring and maintain an action in the Supreme Court against the Attorney-General as nominal defendant for the purpose of recovering the amount of the loss or damages and costs from the Assurance Fund.

2 On March 23, 1956, at which time the appellant and his wife were the registered owners of 3384 Southeast Drive in Vancouver as joint tenants, Mrs. Stonehouse, without telling her husband what she was doing, conveyed “all her interest in and to” this property to Mrs. Shirley Munk, her daughter by a former marriage. From the time of its execution until after his wife’s death on March 1, 1959, the appellant was unaware of the existence of this deed which remained unregistered until March 2, 1959, when Mrs. Munk made application for its registration at the office of the registrar of titles at Vancouver.

3 It is contended on behalf of the appellant that by reason of the provisions of sec. 35 of the Land Registry Act the unregistered deed from Mrs. Stonehouse to her daughter had no effect on the appellant’s interest as a joint tenant and that when this three-year-old deed was presented for registration the registrar should have been alerted to the possibility of the grantor having died since its execution and the whole title having thus become vested in the appellant as the surviving joint tenant. It is the failure of the registrar to make inquiry before he registered this deed as to whether the grantor was dead or alive that is now claimed to constitute “an omission or mistake” which was the sole cause of the appellant sustaining damage and which accordingly entitled him to bring and maintain the present action against the attorney-general in accordance with the provisions of sec. 223 (1).

4 When, as in this case, application is made for registration of a transfer of land, the title to which is registered, the registrar is placed under the duty described in sec. 156 of the Land Registry Act as follows:

156. … the Registrar, upon being satisfied that the conveyance or transfer produced has transferred to and vested in the applicant a good safe-holding and marketable title, shall, upon production of the former certificate or duplicate certificate of title, register the title claimed by the applicant in the register.

5 When Mrs. Munk applied for registration there was in force and uncancelled a certificate of indefeasible title which certified that the appellant and his wife were absolutely entitled to the property in question as “joint tenants” subject only to an outstanding judgment which Mrs. Stonehouse had registered against her husband’s one-half interest and by virtue of the provisions of sec. 38 (1) such a certificate is

… conclusive evidence … as against Her Majesty and all persons whomsoever, that the person named in the certificate is seised of an estate in fee-simple in the land therein described ….

6 Sheppard, J.A. has said of this section in the course of his decision in the court of appeal that (p. 632):

As the certificate is conclusive of the owner being seised as against all persons, … it would be conclusive against the Registrar.

7 Counsel for the appellant, however, contends that this section must be read in conjunction with sec. 156, and that once it is accepted that the unregistered deed did not sever the joint tenancy, it follows that the registrar could not be satisfied that a three-year-old deed from one joint tenant had “transferred to and vested in the applicant a good safeholding and marketable title” to an undivided one-half interest in the property until he had also satisfied himself, by inquiry if necessary, that the grantor of that deed was still alive. I do not, however, find it necessary to decide this question because I have formed the opinion that the joint tenancy in question was severed at the time of the execution and delivery of the deed to Mrs. Munk.

8 As has been indicated, the contention advanced on behalf of the appellant in this latter regard is based on the provisions of sec. 35 of the Land Registry Act, the relevant portions of which read as follows:

35. Except as against the person making the same, no instrument … executed and taking effect after the thirtieth day of June, 1905, purported to transfer, charge, deal with, or affect land or any estate or interest therein, shall become operative to pass any estate or interest, either at law or in equity, in the land … until the instrument is registered in compliance with the provisions of this Act …. [The italics are mine.]

9 In finding that the joint tenancy had not been severed by the execution of the unregistered deed and that the jus accrescendi operated in favour of the appellant immediately on his wife’s death so as to vest the whole title in him to the exclusion of Mrs. Munk, the learned trial judge relied, in great measure, as did the appellant’s counsel before this court, on the case of Wright v. Gibbons (1949) 78 Comm LR 313. This is a decision of the High Court of Australia which held that under the Real Property Act of Tasmania the registration of a document evidencing mutual transfers of their interests inter se between two out of three registered joint tenants had the effect of severing the joint tenancy. This case is cited as authority for the proposition that a registered estate as joint tenants can only be severed by some dealing which results in an alteration of the register book, but the decision is of necessity based on the provisions of the Real Property Act of Tasmania of which Riche, J. says at 78 Comm LR 326:

The scheme of transfer and registration is the only method by which any alienation or disposition of a share or interest in land may be made.

10 This observation clearly indicates that the statute under consideration in that case did not include the exception which is made a part of the British Columbia scheme of transfer and registration by the opening words of sec. 35 and in the absence of some evidence that those words were considered by the High Court of Australia, Wright v. Gibbons, supra, cannot be considered as an authority bearing in any way directly on the present case.

11 In Davidson v. Davidson, [1946] S.C.R. 115, which affirmed [1945] 2 W.W.R. 576, 62 B.C.R. 161, Estey, J. had occasion to consider the opening words of sec. 35, and speaking on behalf of this court at p. 119 he said:

These words, ‘except as against the person making the same,’ expressly make operative an unregistered instrument against the party making the same. Therefore, the transfer executed by the respondent was operative to transfer to the Minto Trading and Development Company Limited whatever estate, either at law or in equity, he was in possession of.

12 It is, therefore, apparent that the deed here in question operated as an alienation of the interest of Mrs. Stonehouse, and the very fact of her interest being transferred to a stranger of itself destroyed the unity of title without which a joint tenancy cannot exist at common law.

13 The effect at common law of a conveyance by one joint tenant to a stranger in title is accurately stated in Cheshire’s “Modern Real Property,” 8th ed., at p. 308, in the following terms:

… it has long been the law that one joint tenant can alienate his share to a stranger. The effect of such alienation is to convert the joint tenancy into a tenancy in common, since the alienee and the remaining tenant or tenants hold by virtue of different titles and not under that one common title which is essential to the existence of a joint tenancy.

14 The following passage from the decision of Vice-Chancellor Sir Page Wood in Williams v. Hensman (1861) 1 J & H 546, at 557, 30 LJ Ch 878, 70 ER 862, is to the same effect. He there says:

A joint-tenancy may be severed in three ways: In the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi.

15 There is nothing in the Land Registry Act which changes the effect of the common law in this regard as between the two joint tenants in the present case, and it follows that because the unregistered deed was operative against the share of Mrs. Stonehouse it had the effect of severing the joint tenancy. As Davey, J.A. has said in the course of his decision in the court of appeal (p. 629):

It is the binding effect upon himself of an owner’s dealings with his own property that effects a severance of the joint tenancy.

16 Under the provisions of sec. 35 an unregistered deed could not be operative “to pass any estate or interest either at law or in equity” other than that of the grantor, but the effect of Mrs. Munk’s deed was not “to pass” any such estate or interest of Mr. Stonehouse but rather to change its character from that of a joint tenancy to that of a tenancy in common and thus to extinguish his right to claim title by survivorship which is an incident of the former but not of the latter type of interest. The right of survivorship under a joint tenancy is that, on the death of one joint tenant, his interest in the land passes to the other joint tenant or tenants (Megarry and Wade, The Law of Real Property, 2nd ed., p. 390). But, on the execution and delivery of the transfer by Mrs. Stonehouse, she divested herself of her entire interest in the land in question. At the time of her death, therefore, there was no interest in the land remaining in her which could pass to her husband by right of survivorship.

17 The “omission or mistake” within the meaning of sec. 223 attributed to the registrar by the learned trial judge was that he “omitted to make inquiry as to whether the deed was delivered in the lifetime of the grantor and as to whether she was dead or alive.” The learned trial judge’s finding that there was no delivery of the deed during the lifetime of the grantor was properly set aside by the court of appeal and was not relied on by the appellant’s counsel in this court, and in my opinion, having regard to the state of the register and to the fact that the unregistered deed was operative to sever the joint tenancy at common law the registrar was under no obligation to inquire as to whether Mrs. Stonehouse was dead or alive at the time of the application for the registration of Mrs. Munk’s deed. As there is no suggestion of any other omission, mistake or misfeasance on the part of the registrar, the appellant’s claim must fail.

18 I would accordingly dismiss this appeal with costs.


Seniors Beware of Care For Life Agreements

Senioirs beware care for life

Seniors often fall victim to the best of intentioned Care For Life Agreements with a child, that often turn disastrous.

I was recently retained by a senior who advanced over $400,000.00 to his only son and his wife. He did so on the understanding they would purchase a home in which they all would live and the couple would care for the senior for the rest of his life. The house was purchased in the couple’s name. The senior lived downstairs in the home until four years later when his son met an untimely death. Title to the house was then transferred to the widow as surviving joint tenant whereupon she immediately evicted her father-in-law. The end result is the senior is now penniless and the widow has pocketed the monies and departed. In only four short years, my client went from having control of his life and finances to being a destitute and broken person.

This devastating fact pattern is unfortunately happening all too frequently. Unquestionably many lawyers and estate practitioners will be consulted with respect to these types of failed agreements in the coming years. As our population continues to age, more of these informal kinds of family arrangements will certainly be made. The typical scenario will involve a senior transferring property in exchange for a promise of lifetime care. Most often the property will be the family home which is transferred outright or into joint tenancy with the caregiver. Such arrangements typically will be made between a parent and one of their adult children or with another relative or trusted friend. Caregiver kids range form those that have never left home to the black sheep who returns after a long absence to take care of elderly parent and winds up with the house.

Often these arrangements are entered with the best of intentions, however the parties are naïve as to the careful thought and discussion required. Such agreements are usually oral and accordingly vague. They are likely done without any legal advice and the formalization of such agreements is usually almost non-existent.

From the senior’s perspective, the care agreement is perceived to be a simple solution to allow him or her to stay in the home until death. Many seniors may fear finishing their days, isolated, in a nursing home or other institution. From their perspective transferring the property to the caregiver, in return for continued care, may seem an ideal solution. They often look upon their prospective caregiver through “rose coloured glasses” and naively look forward to a harmonious life surrounded by loving family or friends who are grateful for the substantial financial benefit bestowed upon them.

There is often an incentive for both sides to enter such an arrangement. Many seniors of modest means purchased homes years ago. Those homes have now greatly appreciated in value. Potential caregivers are often relative newcomers to the real estate market and in the absence of some financial assistance likely could not afford to buy such a home.

Thus the demographics of our aging population, the high cost of real estate and the increasingly uncertain economic conditions, will combine to ensure the future proliferation of such arrangements. Just as certainly, there will be a boom in related litigation when such arrangements fail.

These informal agreements unfortunately leave disastrous legal problems for the parties when they fail. The results may be especially serious for the senior. The outcome is often the outright loss of the home leaving the senior extremely vulnerable. On the other hand, after many years service, the caregiver may become embroiled in litigation with rival siblings who suspect undue influence on the parent.

There are many legal pitfalls to informal care for life agreements. Invariably there is little consideration by the parties of the innumerable hypothetical questions that should be asked before concluding such an arrangement. A myriad of potential problems may thwart the success of such arrangements. They include control issues, unforeseen longevity or early death, incompatibility, depression, hospitalization, divorce or financial ruin of the caregiver.

A review of case law indicates that most care for life arrangements fail because of the breakdown of the relationship between the parties. The individual expectations are rarely discussed in advance, let alone reduced to writing. Such breakdowns may result in the senior being evicted from his or her former home. In effect they may lose their home and their financial security without receiving the emotional security of the promised long term care. Needless to say, such a loss will render a senior financially, psychologically and emotionally insecure.

A carefully drafted care agreement prepared by a lawyer will usually provide better protection to both seniors and caregivers. It is however, a simple fact that many people will continue to make informal arrangements on their own. There are a number of motives for avoiding the use of lawyers, ranging from false sense of economy to a preference to follow “a wish and a prayer” that things will work out. Indeed some seniors are even reluctant to mention the care agreement when providing legal instructions to transfer the property to a child or friend.

From a practice point of view, a lawyer or notary should always make detailed enquiries to determine the reasons a substantial asset is being transferred for little or no consideration. If the underlying facts indicate that a “care for life arrangement” exists, then written advice is essential urging the client to protect himself or herself properly documenting the agreement in writing. A detailed written agreement may also help minimize future family conflict. It can assist in explaining the arrangement to other family members who might otherwise challenge the land transfer after the senior’s death. At the very least, where the home or other real property is to be transferred to the caregiver, the legal adviser should urge the senior to register a life interest against the title.


Almost invariably the informality of care for life arrangements will create difficulties for courts charged with interpreting the actual terms of the agreement. A review of current case law indicates the challenge to courts faced with litigation involving such arrangements. It seems the courts are pulled between handling such matters as contract cases or treating such transfers as gifts. In the case of contracts they must apply the legal principles of contract law. In the case of gifts they may apply equitable principles such as undue influence, unconscionable transactions, or resulting trusts. The problem for those wishing to review the law is compounded by difficulty in finding the appropriate index titles. For eg. case law in this area may be reported under several different headings such as “undue influence”. It is likely not referenced to litigation involving “care for life” agreements.

While such agreements may appear to be contracts, the courts often presume that family members are relying on mutual trust and affection and do not intend to create legal relations in their arrangements. Thus, the most recent cases tend to treat such informal care agreements as gifts, rather than contracts.

While there are usually only fleeting discussions as to the terms of the care arrangement, the transfer of the property from the senior to the caregiver, will certainly create legal relations between them. Subsequent litigation usually involves the question of who owns what interest in the subject property.

If the courts conclude the care agreement amounted to a contract they are then expected to interpret the contract and determine any damages payable for breach of that contract. The law relating to contract will be involved, including:

(a) The intention of the parties to legally contract. Was there a meeting of the minds and the necessary intent to make a binding contract?

(b) Consideration. If there is a contract, then the promise to care will generally be found as the consideration for the transfer of the property;

(c) Terms of the Contract. An oral agreement to provide care for life will invariably raise many issues of the express and implied terms based on the reasonable expectations

(d) Uncertainty. In the decision of Folia v Trelinski, 1996 New Westminster Supreme Court Registry No. 19961104, a promise to care for a parent for life was found to be enforceable. It was held not to be uncertain.

In that case, a mother transferred her home to her daughter and son-in-law. In exchange they promised to care for her and to allow her continue to live in the home the transaction set aside. The relationship broke down very quickly.

The mother left the house and ultimately sued to have the transaction set aside. The caregivers asked the mother to vacate the home during the ongoing litigation.

The Courts enforced the agreement and stated that the mother had not been permanently evicted, and was only evicted for the duration of the litigation. Therefore, the act of asking the mother to leave the home, did not repudiate the contract. The mother was only allowed damages for the time period out of the home, as under the care agreement, the children were to provide care. In his reasons for judgment, the judge stated living together for the parties, particularly after the litigation, will be difficult, but not impossible.

Surely neither party was satisfied with that outcome


e) Breach of Contract

If an important term of the contract is not performed, the aggrieved party can sue for damages or, if the term of the contract is sufficiently important, then to treat the contract at an end.
Rescission of the contract is another remedy, where the Courts may order compensation so as to put the parties back to the position that they were in before entering the agreement.

The problem from the senior=s perspective, is that contract law can often be applied by the Courts in a somewhat harsh manner, just as it was in the Folia case aforesaid. Contract law is far more rigid in its application and remedies than legal remedies that flow from the Courts of Equity. As seen in the Folia v Trelinski case, the Courts gave a contract law remedy of damages only. The Court=s view that it is the parties that make their own bargain, and unless it is unconscionable, then the Courts may well enforce what may be a poor bargain between the senior and the care giver.

As previously stated, most courts tend to view the transfer by the senior as a gift. In Peter v Beblow 1993 1 S.C.R., the Court defined a gift as Athe intentional giving to another without expectation of remuneration

Probably the most common allegation made in this type of litigation is that of undue influence. This was the situation in Hicks v Hicks, (1997) B.C.J. No. 296, in which I was counsel . My client was a son of the senior and he successfully had a transfer of land set aside after his mother=s life, in favour of his

The amount of influence must amount to coercion. It is often difficult to prove, as there are rarely any witnesses to the influence that was exerted. The Court will investigate any suspicious circumstances

Another equitable remedy available to the Courts is to find that there is a resulting trust, which is an implied trust that is created when a person transfers legal title to another , (usually for little or no consideration), but intends to retain the beneficial interest. The Courts of equity presume a bargain, and in such a situation, the Courts will often presume that the property is held in trust by the recipient for the transferor or his or her estate. This presumption can be rebutted by evidence showing that the transfer was intended to be a gift.


As stated above, it is my view that these types of arrangements will continue to proliferate in the future, and will undoubtedly lead to an increase in litigation in this area. The B.C Law Institute ( formerly the Law reform Commission) is currently undertaking a project to investigate these agreements and determine what if anything should be done about them. For example, the State of Alabama has a statute that states A any conveyance of realty wherein a material part of the consideration is the agreement of the grantee ( the caregiver) to support the grantor( the senior) during life is void at the option of the grantor (senior).

It is important for seniors in particular to know that disastrous legal problems can occur, often to their detriment, when they enter into these types of care for life agreements with family or friends, and the arrangement does not work out. Seniors need to be educated about these pitfalls and encouraged to reduce the contract to writing, preferably with legal assistance. Practitioners, need to be educated to ask the right questions of the seniors when transfers of homes are occurring to family or friends for little or no consideration. If the practitioner fails to take adequate steps to protect the rights of the seniors in those situations, then the professional may be met in the future with an allegation of professional negligence.

Thanks and acknowledgment to Professor Margaret Hall, of the University of British Columbia, for her extensive work involving the Law Institute’s project on Legal issues affecting seniors and providing me with her consultation paper and background materials, which I made use of in the preparation of this paper.

The ultimate in elder abuse can even occur as a result of an incentive on the part of an abusive caregiver to hasten the death of the senior.

Delusions and Testamentary Capacity

Delusions are often overlooked as a cause for lack of mental capacity.

I was recently retained by a sister of a deceased person who advised that in her opinion, she had been disinherited from her late brother’s will as a result of his cocaine abuse. She asserted that he may have been delusional about her at the time he made his last will. My client was a nurse who had cared for her brother in previous years when he had been alcoholic and had suffered a stroke. They had been close. She gave me many examples of the deceased’s increasingly paranoid behavior prior to his death. This somewhat bizarre behavior had been noted in medical files.

My client explained that the pivotal event occurred when the deceased had asked her to call the police if she had not heard from him by a certain time. When she had not, she called the police. They attended and took the deceased to hospital. He was diagnosed as being in a cocaine induced psychosis. The police seized his guns. The deceased blamed the sister for the seizure and increasingly came to blame his sister for meddling in his life and causing virtually all his myriad of problems. His behavior was verified by many independent witnesses.

The deceased drew a new will disinheriting his sister and siblings, and left his estate to charity. His prior will left his estate to his sister and siblings.

The lawyer who drew the will noted that the deceased was angry at his sister for meddling in his affairs. He thought the deceased had testamentary capacity.

The case was complicated by the fact that the deceased was murdered. Maybe he was not paranoid after all?

Most legal challenges relating to capacity to make a will involve a testator suffering from senile dementia. These cases typically involve aged testators whose mental functioning may be so reduced by dementia, that they lack sufficient capacity to prepare a will. Most practitioners are aware of dementia related concerns and take appropriate steps to assess the mental status of the testator.

Far less frequently challenged however, are wills made by delusional testators. These involve cases where it is alleged that the testator suffered from a delusion that affected his or her decision concerning the will, to the extent that the testator was not legally capable of preparing a will.

The purpose of this article is to examine the law relating to testamentary capacity and delusions.


It is trite law to state that a person must be of “sound mind, memory and understanding” to be able to make a valid will. The testator must understand the nature and quality of the act of preparing a will.

In a leading Canadian case Leger v. Poirier 1944 3 D.L.R. 1 (SCC) Justice Rand, speaking for the Supreme Court of Canada, said that a “disposing mind and memory” is:

“capable to comprehend, of its own initiative and volition, the essential elements of will making, property, objects, just claims to consideration, revocation of existing disposition, and the like”.


A leading English case of Banks v. Goodfellow 1870 LR 5 QB 549, sets out four criteria for the test of mental capacity to make a will.

(i) the testator understands that he is making a will and that a will disposes of property upon his death;

(ii) the testator must know the assets he disposes of, that is, he understands the nature and extent of his property;

(iii) the testator understands and appreciates the claims to which he ought to give effect, that is, those who have an appropriate claim upon his bounty;

(iv) the testator must be free of delusions which may affect his decision.

These four criteria, read together , have consistently been adopted by Canadian courts as the standard test for testamentary capacity.


delusion is a belief in a state of facts which no rational person would believe. Delusions are beliefs that are not backed up by reality. They may remain despite obvious evidence to the contrary, and the fact that nobody else believes them to be true. The delusions are often accompanied by hallucinations and/or feelings of paranoia, which act to strengthen confidence in the delusion. Delusions are distinct from culturally or religiously based beliefs that may be seen to be untrue by outsiders.

Delusions are a common symptom of several mood and personality related mental illnesses. These may include schizophrenia, shared psychotic disorder, major depressive disorder, and bipolar disorder. They are also the major feature of delusional disorder. Delusions are also often common amongst substance abusers of amphetamines, cocaine, and hallucinogens.

Delusional disorders are a form of psychosis in which a person has paranoid delusions, often long-lasting, with no obvious physical or medical basis for the delusion. Delusional disorders are relatively uncommon. They affect roughly 1 in 3333 people and most commonly start between the ages of 40 and 55 years of age. Delusions are suffered slightly more commonly by women than by men. The delusions may be somewhat permanent or transitory.

What is a Psychosis?

A psychosis is a mental disorder that is characterized by extreme impairment of a person’s ability to think clearly, respond emotionally, communicate effectively, understand reality, and behave appropriately. Psychotic symptoms interfere with a person’s daily functioning and can be quite debilitating.

People with paranoid delusions are often very suspicious about receiving any treatment. They typically do not believe that there is anything wrong with them and the suggestion that they get medical help, may only serve to exacerbate their paranoid delusions and thus make things worse.

Categories of Delusional Disorders

Individuals with delusional disorder suffer from long-term, complex delusions that typically fallen to one of six categories: persecutory, grandiose, jealousy, erotomanic, somatic, or mixed.

A brief explanation of the six categories is as follows:

1) Persecutory:

Individuals with persecutory delusional disorder are plagued by feelings of paranoia and an irrational yet unshakable belief that someone is plotting against them, or up to harm them. Paranoid delusions are beliefs of a suspicious nature, where the person believes something is not right with them, another person or persons, or the world in general, which poses serious problems for them.

2) Erotomanic :

Individuals with this disorder believe that another person, often a stranger, is in love with them. The object of their affection is typically of a higher social status, sometimes a celebrity. This type of delusional disorder often leads to stalking or other potentially dangerous behavior. Many of us have read about the long-time fixation of the Saskatchewan farmer and his obsessive love for Anne Murray.

3) Somatic :

Somatic delusions involve the belief that something is physically wrong with the individual. The delusion may involve a medical condition or illness or perceived deformity. This condition differs from hypochondria in that the deformity or illness is perceived as a fixed condition and not temporary.

4) Grandiose :

Individuals with grandiose delusional disorder have an overinflated sense of self-worth. Their delusion center on their own importance, such as believing that they have done or created something of extreme value. They often believe that they have a special mission in life.

5) Jealous :

Jealous delusions are unjustified and irrational beliefs that an individual spouse or significant other has been unfaithful.

6) Mixed :

Mixed delusions are those characterized by two or more of the aforesaid five categorizations.


A person may suffer from a delusion or delusions that might outwardly make them appear to be insane, and yet they may still be capable of making a will.

An insane person may still have testamentary capacity if he or she holds irrational beliefs that have no relation to his or her property or to the persons that might be expected to benefit. A delusion that affects testamentary capacity must be one of insanity, as opposed to capricious whims or idiosyncrasies.

It is often a difficult task for the court to decide whether the testator was merely eccentric in not adequately providing for those attacking the will, or alternatively, he was actually suffering from delusions that were the cause of the failure to provide for the disappointed beneficiary.

As stated in the case of Banks v. Goodfellow, ibid, “the existence of the delusion, compatible with the retention of the general power and faculties of the mind, will not be sufficient to overthrow a will, unless it were such as was calculated to influence the testator in making it.”

In fact the testator in that case had spent some time in an insane asylum and remained subject to certain fixed delusions that he was molested by evil spirits. The English Court of Appeal upheld his will because of the absence of any reasonable connection between the delusions and the dispositions made by the testator. His will was in fact rational in the sense that he left his assets to his nearest relative.

The courts have consistently found that, in order for a delusion to affect testamentary capacity, the delusion must have such a hold on the testator’s mind that it governs the making of the will.

Lucid Intervals

A further complication is the fact an individual may suffer general insanity and incapacity to make a will, but may experience lucid intervals. If the testator was in fact lucid for such an interval, then the Courts may determine that he or she had sufficient capacity to properly give instructions and execute a will.

An additional difficulty for the practitioner is the fact that people with delusions are often very firm in their beliefs and can appear totally rational and competent. They are often very good at concealing that they are in fact under an insane delusion.

The decision of Skinner v Farquharson 1902 32 S.C.R. 58 case held that the capacity required of a testator is that he should be able rationally to consider the claims of all those who are related to him and who according to the ordinary feelings of mankind are supposed to have some claim to his consideration when dealing with his property as it is to be disposed of after his death. It is not sufficient that the will upon the face of it should be what might be considered a rational will. The Court found that it is necessary to go below the surface and consider whether the testator was in such a state of mind that he could rationally take into consideration not merely the amount and nature of his property but the interest of those who by personal relationship or otherwise had claims upon him.

The Skinner decision went on to say at page 69 that “it is not the law that anyone who entertains wrongheaded notions, capricious whims, or absurd idiosyncrasies, cannot make a will. The existence of an insane delusion did not necessarily mean an absence of testamentary capacity. There must be evidence that the delusion, if it existed, controlled the testator’s mind and prompted him to execute the will in question.”

Justice Sedgewick stated at page 66 that an insane delusion is defined to be” a belief of things as realities which exist only in the imagination of the patient, and the incapacity of the mind to struggle against the delusion constitutes an unsound frame of mind.”

Justice Sedgewick also dealt with lucid intervals , and defined same at page 67 as: “… by the term `lucid interval’, it was said by Lord Thurston in A.G. v. Parnther (1793), 3 Bro. C.C. 409, 29 E.R. 962, is not meant `merely a cooler moment, an abandonment of pain or violence or of a higher state of torture, a mind relieved from excessive pressure but an interval in which the mind having thrown off the disease had recovered its general habit.’ In Waring v. Waring (1848), 6 Moo. P.C. 341, 354, 13 E.R. 715, it is said that `a lucid interval is not the mere absence of the subject of the delusion from the mind. By a lucid interval is not meant a concealment of delusions, but their total absence, their non existence in all circumstances and a recovery from the disease and a subsequent relapse.”

In Montreal Trust Co. v. McKay (1957) 21 W.W.R. 611 (Alta. T.D.) at page 613, the trial judge stated as follows:

“The testator may be capable of transacting business even of an intricate nature, but may be incapable of making a will if he has psychotic delusions towards the persons whom we should ordinarily consider as having a claim on his bounty at the time of the making of the will, and this is so even if he appeared to make a reasonable provision for these persons. Such factors are important in deciding if he was suffering from delusions. But if in fact it is proven that he had delusions directed towards those persons to whom he should normally be giving consideration, the testamentary capacity may not be there irrespective of what he actually provided in the will.”

A review of the case law relating to delusions and capacity makes it clear that before the court will set aside a will on the ground that the testator was subject to insane delusions, it must be sure that such delusions influenced the dispositions made by him by his will.

It is not always easy however to predict whether or not a court will find that the delusions influenced the dispositions made by the testator in the will, so as to find a lack of capacity.

For example, in the decision Momberg v. Jones 32 W.L.R. 513, the testatrix was dying of uremic poisoning, the result of the disease for which he suffered.the testatrix entertained the entirely unfounded belief that her husband had poisoned her. The court nevertheless found that the testator had testamentary capacity.

On the other hand, the following are three examples of cases where the courts found the delusions were such as to make a finding of lack of testamentary capacity:

a) Ouderkirk v Ouderkirk ( 1936) S.C.R. 619:

In this case the testator labored under the permanent delusion that his wife who was 70 years of age, was entertaining men for immoral purposes. He left his wife the sum of 5 dollars a year, and stated that he wanted to provide a home for her.

The Supreme Court of Canada held that the testator was suffering under delusions, and that the delusions were undoubtedly of the nature calculated to affect the disposition of his property. Since the delusions were of such a nature, the condition of testamentary power failed.

b) Reference Re Grant Estate (1944) 1 W.W.R. 71

The Manitoba Court of Appeal held the testator who believed he was hounded by the devil was mentally incompetent because he had been influenced to dispose of his property in a way that he would not have done if he had been of sound mind. The court followed the Ouderkirk decision.

c) Re Cadman 28 Man.R. (2d) 130

In this case a testatrix named her niece as sole beneficiary in a 1977 will. A close relationship had existed between the testatrix in the niece until 1981. The testatrix suffered a stroke, and formed the impression thereafter that her niece was attempting to “clean her out “. In a 1982 will she testatrix named different beneficiaries in a 1982 will. The niece was successful in setting aside this 1982 will.

The evidence disclosed that the testatrix suffered from delusions as to her niece’s intentions, to the extent that the testatrix was incapable of making sound decisions of the time of making her 1982 will. The court held that no rational motive existed for the testatrix to change her beneficiary.

An interesting recent case is Flurry, executor of Fuller v Fuller, and the Philadelphia Church of God. Stanley Fuller died in July 2000, his will distributed $1,000 to his three adult children and gave the rest, approximately $1 million, to his church. His three children alleged he was delusional when he made his will.


Mr. Fuller was a very religious fellow. He forbade the installation of running water, electric power, or telephone in the family home. Mr. Fuller’s word was the law on the homestead. At all material times Mr. Fuller was a devout and devoted member of the church and its predecessor the Worldwide Church of God. By all accounts Mr. Fuller was a deeply religious person. He accepted his church’s doctrine and lived by its precepts.

In 1995 he sold his property and netted approximately $1.8 million. He gave each of his three children a gift of $200,000. He told them to spend the money wisely.

He tithed $260,000 to his Church. He had a history of tithing.

In 1995 Mr. Fuller made Rosemary a joint owner of his bank accounts and investment certificates. He sought and heeded her advice concerning the investments he should make. The trial Judge found that in 1995, at least, he trusted her completely.

In 1996, Mr. Fuller told Rosemary that he did not want his money to be locked into inflexible and non-liquid investments. He said that he wanted to have his money readily available because according Church doctrine he might have to retreat with his money to a ‘place of safety’ on only two weeks notice. Rosemary was not keen on this idea, and said so to her father. She pointed out that the investments she recommended would return higher interest than the more liquid investments he wanted to use. Mr. Fuller replied that he was not concerned about the lower interest rate.

During this conversation she questioned the bona fides of the Church. She suggested that the head of the church was not the good man Mr. Fuller believed him to be; that the Church was after his money; and that he might come to a tragic end such as the poor unfortunates at Jonestown, where hundreds of Jim Jones’ followers died by poison. Rosemary testified that as soon as those words were out of her mouth, her father took an expression of deep anger and she knew that she had gone too far in her questioning his faith in his Church. From that point on relations between her and her father cooled and became strained.

In the fall of 1996 Mr. Fuller implied that Rosemary had stolen $3500 while he was away. This hurt her. She came to understand he subsequently found the money, but he never apologized.

In November 1996,Rosemary asked to borrow $55,000 at a better interest rate than he was earning, and he refused the loan.

In March 1997 he instructed a lawyer to prepare a new will leaving each child $1000 and the residue to the Church. He gave her four reasons for his wishes:

a) He felt Rosemary had railroaded (Ms. Ongman’s words) him into making the 1993 will;

b) The $200,000 he had given to the children in 1995 was their inheritance;

c) He wanted the children to have only another $1,000 each from his estate; and

d) He wanted his church to have the balance of his estate when he died.

The lawyer wanted a medical certificate as to his competency. This was provided by the family physician who stated that Mr. Fuller passed two mental state examinations and was competent to sign a new will. The will was executed.

A geriatric specialist saw the deceased for the first time in September 1998. He found that he had an atypical dementia in that his social function was largely preserved, but that he had profound and disabling delusions. He interpolated back to say that the deceased did not have capacity when he signed the March 1997 will. A neurologist, a psychiatrist and a psychologist all agreed with the geriatric physician. They found he was severely paranoid and delusional due to Alzheimers disease.

The Judge put weight on a neighbours evidence that he cut his children out of his will as they were out to rob him. There were other examples of paranoid ideation towards his children.


The Judge found that the will was invalid due to delusions caused by a disease that poisoned his affections for his children.

The only discussion of the law centered on the Judges statement that “the authorities are clear that only delusions that bear directly on and influence the testator’s deliberations may bottom an attack on testamentary capacity. “

The Judge went to say that if he is wrong, then under the Wills Variation Act, he would later the will to provide 50% to the Church and %50% equally to the three children.

I am of the opinion that the case is important in that it recognizes that the frequently held opinions of demented persons that their loved ones are out to rob them, or such paranoid ideation, is in fact delusional, and thus no testamentary capacity.


In Re Barter Estate, (1939) 2 D.L.R. 201, the New Brunswick Court of Appeal dealt with a will that was attacked on the grounds that the deceased had been suffering from insane delusions with respect to his daughter for some time prior to making his will. It was alleged that these delusions affected him in the making of bequests to his daughter.

The Probate Court Judge found that, with one exception, the alleged delusions appeared to be transitory. He upheld the will, holding that the burden of proof was on the party setting up the insane delusions. He ruled that those opposing the will had not satisfied that burden.

The appeal was allowed, and a finding was made that the Probate Court Judge was in error as to the burden of proof. Once the delusions affecting his daughter had been proved to exist, it was for the proponents of the will to remove them.

The Court stated “the burden of proof in the sense of the burden of “going forward” in a case of this kind is upon the party alleging insane delusions but when evidence of such delusions has been given, even though not conclusive or not preponderant, a jury, if there is one, must be directed that if their minds are left in doubt they must find against the validity of the will. The same rule must govern a Judge sitting as a jury. In the present case it was for the proponents of the will to adduce preponderating evidence that the delusions or insane ideas could not reasonably be conceived to have had anything to do with the deceased’s power of considering the claims of his relations upon him and the manner in which he should dispose of his property.”

In another Supreme Court of Canada decision, O’Neil v. Royal Trust Co. [1946] S.C.R. 622 (S.C.C.) the testatrix was subject to hallucinations and delusions which “at times” disturbed her but “were never very fixed at any time”. The testator smelled either gas or dusting powder in her room and she was tasting poison in her food. It was conceded that she was generally rational, that she had a good memory and that she was conversant with her husband’s estate and with the contents of the two first wills.

At page 632 Justice Estey made the following comments:

“The decision of Banks v. Goodfellow makes it clear that these early authorities go too far. That while the burden of proof always rests upon the parties supporting the will, and that the existence of proved hallucinations and delusions often presents a “difficult and delicate investigation”, it remains a question of fact to be determined as in civil cases by a balance of probabilities. In the determination of this fact the contents of the will and all the surrounding circumstances must be considered by the jury or the Court called upon to arrive at a decision. If satisfied that at the relevant time the testator was not impelled or directed by hallucinations or delusions and was in possession of testamentary capacity, the will is valid.”


I venture to say that most practitioners are not attuned to the need to be on guard for delusional clients. The delusional client may be extremely difficult to detect while taking instructions as the client will not necessarily appear psychotic or strange. The client may present as rational and sane, but hold very firm opinions that could in fact be delusional. The client will most likely be guarded or even refuse to be closely questioned about his or her firm beliefs.

Being more aware of this fascinating area of potential concern will assist the practitioner in dealing with such a client.

Mental Capacity and Marriage: What’s Required?

Mental Capacity And Marriage

The law is currently in error with respect to this area, stating that only a low level of capacity is required for marriage.

I question in light of that, why about one quarter of lawyers earn their keep trying to get people out of the supposedly simple contract that they entered.

Most of us have heard of the infamous case of playboy playmate Anna Nicole Smith who laid claim to the estate of her 90 year old husband. This odd couple met at a topless bar where Smith earned her living. He was 89 and she was 26. Their marriage lasted just over one year before the husband died leaving an estate of $475 million. He died in 1995 and the litigation is still before the courts.

From time to time newspapers report similar situations involving a lonely, enfeebled old man who marries a much younger waitress or care worker. Increased longevity will undoubtedly give rise to yet more disputes about the validity of such marriages.

Some courts have made apparently contradictory findings that a deceased senior, who is not mentally capable of executing a will, is still mentally capable of marrying thereby revoking his or her existing will. Banton vs. Banton 164 D.L.R. (4th) 176 is just such a case.

This was an Ontario decision involving an 86-year-old man who formed a friendship with a 31 year old waitress from the restaurant of his retirement home. She persuaded him to secretly marry and to prepare two wills in her favor. At the time of the marriage and the execution of the wills, the court found that the deceased suffered from terminal cancer, serious hearing problems, restrictions of physical mobility, incontinence and depression. They found he was cognitively impaired and enfeebled.

The court concluded that Mr. Banton did not have testamentary capacity when he signed his wills in this woman’s favour, and that it was her undue influence which procured the wills. Nevertheless the court found that he had sufficient mental capacity to enter into his marriage and thus the marriage was valid.

The court ruled that although the test for testamentary capacity is quite stringent, the test for capacity to marry is not. Capacity to marry requires only that the person understand the nature of the relationship and its responsibilities. In this case, the testator had some experience in that he had been married twice before. The court concluded that he had sufficient capacity to enter into the marriage and was not coerced into doing so.

In fact cases as far back as Durham v. Durham (1885) 1 T.L.R.338 have ruled that it does not require a high degree of intelligence to comprehend the significance of entering into a marriage.

Hart v. Cooper 2 E.T.R. (2d) 168 (B.C.S.C.) is a good example of the extent of evidence required to set aside a questionable marriage. In this case the deceased drew a will in 1988 naming his three children as his beneficiaries. In 1990 he was widowed and 1991 he married the younger plaintiff. He was her sixth husband.

The deceased did not tell his children of his plans to marry and the marriage was witnessed by acquaintances of the plaintiff, wife. Indeed he disappeared from hospital and married 2 days before his scheduled examination by a psychiatrist to determine his mental capacity. Following the marriage, the plaintiff effectively isolated the husband, refusing to allow his children or doctor to contact him. This ultimately lead to police intervention. When they spoke to the husband he told them that he had been kidnapped and that he wanted to return to the hospital. He died in hospital within one month of the suspect marriage.

After the death of the husband, the plaintiff wife sought a declaration that 1988 will had been revoked as a result of their marriage. The deceased’s children challenged the validity of the marriage.

The family doctor testified that in his opinion the plaintiff was manipulating the deceased to derive a benefit from his estate. He further stated that the deceased’s mental state was impaired to such a degree that he was incapable of comprehending the importance of any issues before him and would not have had the mental capacity to comprehend the contract of marriage.

Justice Lowry did not accept this uncontroverted medical evidence and found that the children had not proven lack of mental capacity. He was not satisfied that the husband could not understand the simple nature of the contract of marriage and as a result he ruled the marriage valid. Thus, the prior will was revoked by operation of law pursuant to the terms of the Wills Act.

This case illustrates the lengths to which the courts may go to uphold what appears to be a questionable marriage by a vulnerable older person.

Evidence Required to Set a Marriage Aside

The Alberta decision of Barrett Estate v. Dexter 34 E.T.R. (2d) 1, is another good example of the extent of evidence required to set a marriage aside based on lack of mental capacity. A 93 year-old man married his 54-year-old housekeeper and died a short time later. His estate brought an action to have the marriage declared a nullity.

Three medical specialists had examined the deceased shortly before and after the date of the marriage. All three testified that he suffered advanced dementia. Their evidence was near unanimous that the deceased was ” quite significantly deteriorated in cognitive function and certainly not aware of legal and financial matters and that his judgment is impaired along with his other cognitive and intellectual factors.”

The court cited the reasoning of their appellate court in Chertkow vs. Feinstein (1929) 24 Alta.L.R.188 holding “that the capacity to enter into a valid contract of marriage is a capacity to understand the nature of the contract, and the duties and responsibilities which it creates.” The court here ruled that the plaintiff impugning the validity of the marriage had met the burden of proof required and satisfied the court the marriage ought to be ruled invalid.

Similarly the Ontario Court of Appeal upheld the trial decision in Re Sung Estate 11 E.T.R. (3d) 169. Once more this case involved an enfeebled and depressed elderly man who secretly married his younger housekeeper. When the deceased’s five children learned of the marriage the wife assured them that their father had protected their position financially with a prenuptial agreement. In fact a prenuptial agreement was prepared but never signed.

The medical evidence indicated that the time of the marriage, the groom required full-time assistance from a caregiver, suffered from Parkinson’s disease and needed a respirator to breathe and a wheelchair for transport. Further he was rapidly succumbing to lung cancer and was taking massive amounts of medication. The family doctor testified that the deceased was unable to think clearly and logically at the time of the marriage.

The trial judge found that the deceased lacked sufficient capacity to enter into a form of marriage. The Court of Appeal upheld this decision in what they described, notably, as a close case.


The act of marriage gives rise to significant legal ramifications in both matrimonial law and estate/ inheritance law. Indeed many people do not even know that marriage automatically revokes a will. Whatever the historical basis may have been in holding that marriage is a simple contract not requiring a high degree of mental capacity, that ought not to be the case in modern times.

Today many seniors may marry for the second or third time. Modern matrimonial law includes many presumptions of entitlement to share in family assets and spousal maintenance law can be complicated. Needless to say marriages in blended family situations may create a great amount of uncertainty with respect to the various claims of the children. Unfortunately disputes often arise involving the distribution of wealth following the death of one of the spouses.

Savvy seniors will wish to enter into prenuptial agreements that will require independent legal advice to be enforceable. Surely a significant mental capacity is required to understand the legal consequences.

The common law courts have traditionally ruled it should not be too difficult to enter into marriage. Marriage, however, automatically entails important consequences to the testator’s financial affairs and estate planning. For example the very act of marrying automatically revokes the spouses’ previous wills and gives any surviving spouse significant rights under our modern legislation.

Surely it is paradoxal that person, who is not mentally capable of executing a will, may nevertheless be mentally capable of marrying and thus effectively revoke his or her existing will and estate plan. It seems inappropriate our Wills Act should prescribe an automatic will revocation in the event of marriage, even when a spouse does not have the mental capacity to execute a new will. Surely if there is to be a statutory revocation of a will upon marriage, it should be limited to those cases where a spouse has full testamentary capacity at the time of that marriage.

The Pitfalls of Joint Tenancy

Happy to open Joint account

The Pitfalls of Joint Tenancy

For many years estate planners have advised their clients to transfer their assets into joint tenancy ownership with loved ones so they may inherit by right of survivorship and avoid paying legal and probate fees.

The rationale has been that the surviving joint owner, by right of survivorship automatically becomes sole owner of the entire property including the deceased’s share. Thus the asset does not fall into the deceased’s estate but instead passes to the surviving joint owner. As a result, legal costs and probate fees are avoided. The thinking has been: No muss, no fuss and, what is more, no delays!

Indeed for many years, joint tenancy arrangements have been used by families and very close friends. Most often they are used for home ownership or for financial assets such as bank accounts and investment accounts. Indeed, other than a will, this type of arrangement is probably the commonest form of estate planning.

It is very important to understand, however, that such ownership can lead to hotly contested legal disputes. This is particularly the case where only one of the joint owners has contributed most or all of the funds to the investment account or to the purchase of the property.

Fortunately such disputes rarely arise in cases where both of the joint owners have made substantial contributions to the acquisition of the assets for example in the case of joint ownership by spouses who have been long married.

A relatively common fact pattern, however, involves an elderly parent, let us suppose a mother, who transfers her home into joint tenancy with only one of her children. She may well think that she is being prudent in avoiding the payment of probate fees upon her death and believe that the one “favoured” child will do the right thing and share the home with the other siblings.

By the time this mother dies, however, the favoured child has convinced himself or herself that the other siblings have no claim to the home because mother intended to leave it for him or her alone.

Almost invariably the elderly parent does not document their intention in writing. Thus the question remains: What was the deceased’s intention? Did she intend to gift the property outright to one child alone? Or did she intend that one child to hold the property in trust for her estate after her death?

Predictably the disappointed siblings commence a court action claiming the surviving owner holds the property in trust for the estate of their mother. The defendant child denies there was a trust and instead claims that “Mom intended to give me the house outright” (reading “because she loved me more than you”)

These estate disputes involving the question of gifts versus resulting trusts are becoming unfortunately all too common.

What is a Resulting Trust as opposed to a Gift?

Most of us are familiar with gifts, but what is a resulting trust?

A resulting trust is a historic legal doctrine developed by the courts of equity. It provides that where one person (the “transferor”) transfers an interest in property gratuitously to another person (the “transferee”) In such a case, the transferee will be presumed to hold it in trust for the transferor. The transferee is said to hold the property on a resulting trust because he or she remains under an obligation to return it to the original owner, the transferor. Although the transferee may have legal title to the property, the transferor remains the real owner or equitable owner.

Thus where a gratuitous transfer of property is made, equity does not assume a gift to the transferee, rather it assumes that the property has been transfer to be held in trust for the transferor. In order to establish that there has been outright gift of the property, equity requires the transferee to prove that there was an intention to gift both the legal title and the equitable interest in the property (true ownership includes both the legal and equitable interest)

If the transferee cannot prove the transferor intended to gift the property (whether home, bank account or other asset) then he or she will be presumed to hold the asset in trust for the transferor. In other words, the transferor (or upon death, the transferor’s estate) will remain the real owner of the property. Even if it is no longer in the transferor’s legal name, he or she continues to have an equitable interest in the property.

A historical exception to this presumption of resulting trust involved transfers by a husband to a wife or by a father to his children. In these cases, the opposite presumption applied. That is, the courts presumed that the transfer was meant to be an outright gift of both legal and equitable interest, unless and until it was proven otherwise. This presumption was called the presumption of advancement.

The question of whether a transfer was meant as a gift or a resulting trust generally arises in cases where the transferor did not properly document his or her intention at the time of the transfer. So for example, where the transferor signs a deed of gift together with the transfer, his or her intention will be clear.

Unfortunately however such clear declarations of intention are rare. Often joint ownership may continue for years before the transferor dies and the litigation begins.

The courts are then left with the difficult task of determining the deceased’s original intention, at the time of the transfer many years before.

Two recent decisions of the Supreme Court of Canada have helped to clarify some of the legal principles the courts apply in deciding these questions. Reasons for judgment were issued in Pecore v Pecore 2007 SCC 17 and Madsen Estate v. Saylor 2007 SCC 18 in May 2007.

Pecore v. Pecore

On the advice of his financial adviser a father transferred most of his wealth into joint bank and investment accounts with his daughter. The adviser told him that by doing so, he would ultimately save probate fees. This father also gave his daughter a power of attorney allowing her to manage his finances.

In this case, the father had three children. This daughter, however, was the only one with significant financial challenges. She worked at low paying jobs, was married to a quadriplegic and often benefited from the financial assistance of her father during his lifetime.

After the transfers, the father’s accountant made him aware the transfers of the investments could trigger capital gains tax. Thus the father wrote to the financial institutions to advise them that he continued to own the accounts and they had not been gifted to his daughter.

The father continued to pay the income tax on all of the income from the investments and used the accounts as his own for the rest of his lifetime. His daughter, Paula, made a few withdrawals but she was required by her father to notify him before doing so, in other words, he maintained control of the accounts until his death.

Some time after these transfers, the father drew up a new will leaving the residue of his estate to this daughter and her husband Michael. In discussing his assets with the lawyer preparing the will, the father discussed a number of his assets but did not mention the joint accounts.

Further there was evidence that the father had told a number of people, that he intended to look after his daughter Paula after his death but that “the system” would take care of her husband, Michael who was severely disabled.

At the time of death, the joint accounts worth $1 million passed to Paula. The issue of their ownership was raised later in divorce proceedings between Paula and Michael. Michael argued that the accounts had been held in trust for the estate and as a beneficiary of the residue, he was entitled to a share in those monies.

In this case the Supreme Court of Canada upheld the decision by the trial judge that the father had intended to gift the accounts to Paula and those monies now belonged to her.

2. Madsen Estate v. Brooks

The facts in this case may seem similar to those in Pecore, yet the court reached a contrary conclusion as to ownership.

In this case, Mr. Madsen had three children. He transferred his bank and investment accounts into joint names with his daughter, Patricia Brooks. He alone had contributed all of the funds in these accounts and he alone continued to have control of the accounts and pay income tax on the accounts during his lifetime.

There were no statements or declarations by Mr. Madsen as to what his intention was in transferring the accounts into joint names with his daughter. The value of the accounts was $185,000 when he died.

Patricia claimed the monies as her own as a surviving joint tenant. She alleged that her father had given her these monies as a gift because he preferred her to her two siblings. Not surprisingly these siblings disagreed and argued that the monies formed part of their father’s estate.

The Supreme Court of Canada upheld the decision by the trial judge that the daughter held the monies in trust for her father’s estate.

The different results in these cases is explained by the difference in the evidence in one case, the father had made it clear he intended to gift the monies to his daughter. In the other case, he had not done so. It is these different findings of fact that led to the different results.

These two contrary decisions serve to highlight the continuing challenge for the courts to find the intention of the deceased, in the absence of a clear statement of intention being made at the time of the transfer.

The Supreme Court of Canada did assist by enunciating a number principles of law that apply in these cases:

1. When there is a gratuitous transfer from either a father or mother to their infant child, the law presumes that the transfer was a gift. In other words, there is a presumption of advancement or gift which applies. No such presumption applies in the case of an adult child.

2 . When there is a gratuitous transfer from either a father or mother to their adult child, the law presumes that the transfer was a a resulting trust and that the child holds the property in trust for the parent or the estate of the parent upon death. In other words, there is a presumption of resulting trust which applies.

3. Both of these presumptions are rebuttable presumptions of law. As such, they “provide a guide for the courts in resolving disputes over transfers where evidence of the transferor’s intent in making the transfer is unavailable or unpersuasive”

4. A transfer into joint tenancy, whether it be by way of a gift or a resulting trust, immediately vests the right of survivorship. Thus the transfer is an inter vivos transfer and does not attract probate fees or succession duties.


Every day people transfer significant assets into joint names with others. Frequently they do so without properly documenting their intention.

Thus the question remains : Is the transfer a gift of the property or is the property to be held in trust? So, for example, did the parent transfer over that bank account simply for convenience to permit the child to help the parent with their banking or did the parent intend to gift the account to this one child to the exclusion of the others?

The Supreme Court has limited the presumption of gift or advancement to cases involving transfers to minor children. Thus in the case of transfers to adult children, the child will be presumed to hold that asset in trust for the estate of the deceased parent. The child will thus bear the burden of proving that the transfer was meant as a gift.

In spite of this recent clarification by the courts, these disputes will continue. Indeed we believe the courts will see more and more litigation involving jointly owned assets. Judges will continue to be called upon to second guess the deceased’s intention long after the initial transfers.

A word to the wise

We conclude with two last cautionary notes:

1) It is crucial to document the transferor’s intention in writing.

Where a gratuitous transfer is made it is essential for a legal professional to enquire and document in writing the transferor’s intention does he or she intend an outright gift or does he or she intend the transferee to hold the property in trust?

Failure to make these enquiries and keep such notes may well result in potential liability on the part of the legal professional to a disappointed beneficiary.

2) Be sure to consider estate planning tools other than joint ownership, as we have seen that the latter can be risky.

Other estate planning tools such as a trust, may be preferable to joint ownership to ensure an orderly succession upon death.

As well there may be unintended income tax ramifications to a disposition of property by way of a transfer into joint tenancy to oneself and another.

Other related legal problems that may arise include severance of the joint tenancy whether under The Family Relations Act or by a severance by the other joint tenant who then claims an interest in the property even before the death of the transferor.

Vancouver Estate Claims – Have You Been Disinherited?

Keep on DisinheritingHave You Been Disinherited?


Legal test for capacity:
Banks v. Goodfellow 1870

must understand that a will is being made and that it disposes property on death;
must know the nature and extent of his property;

must understand who has an appropriate claim upon his property;
must be free of delusions that affect his decisions, ie, be of sound mind, memory and understanding;
Lager v. Poirier SCC

“the mind must be able to comprehend of its own initiative and volition” at the time that instructions to the lawyer are given;

a will was recently upheld where the testator thought he was being poisoned by gases into his apartment, as he knew what he owned and what he wanted to do with his estate, and who he had to provide for;

Problems encountered:
– no standard method of assessing capacity
– variety of testing and types of causes of dementia
– problems testing due to language, customs, hearing or sight losses
– medical history/records important
– Dementia not well recognized even by doctors/health professionals or professionals
– people good at covering up, or having things done for them
– most people, including health care, underestimate degree of cognitive impairment
– well settled that a proper assessment cannot be done from superficial discussions – must be “probing of the mind”
– typical indications – short term memory loss, paranoid ideas to family, confusion, difficulty with self care/finances
– disorientation to time/person/place, problems recognizing, easily swayed in opinion


This is an influence that is exerted over the mind of another that amounts to coercion of the other’s free will so as to control the other’s mind, ie, an extreme example is a cult leader.

– demented people are very vulnerable to mental pressure
– hard to prove, look for “suspicious circumstances” – a recent article listed 64 examples of such “suspicious circumstances”
– the propounder of a will has to prove proper execution of the will, knowledge and approval of its contents, and mental capacity where there are circumstances that are suspicious, rather than it being presumed that the testator knew and approved of the contents of the will
– individuals are frequently taken advantage of by care-givers, family, acquaintances, salespeople or power of attorney holders
– where there is a special relationship such as a doctor/patient, lawyer/client, care-giver, parent, child, etc., the B.C. Court of Appeal did in May 1998 rule that there is then a presumption of undue influence that shifts the burden to the defendant to disprove it.


Requirements of a valid will:

must be in writing
must be signed at the end by the testator, and witnessed by 2 or more individuals, all 3 signing in the presence of each of other
must purport to deal with the property of the testator

Common mistakes:
beneficiaries or spouses of beneficiaries cannot witness the will or the bequest is invalid
– marriage after the will is executed will revoke the will
– the witnessing procedures are frequently not properly carried out
– a failure to dispose of the estate or part of the estate
– using incorrect/vague/contradictory language
– using precise words such as “issue” or words such as “per stirpes” which have been interpreted by the Courts to have different meanings


Under British Columbia law spouses and children of a deceased have the right to contest an estate on the basis that the deceased parent or spouse failed to “make adequate provision for their proper maintenance and support”.

In the near future a Court challenge will be made to the Wills Variation Act by a common-law spouse, who currently does not have the right to bring such an action.

There has been a hugh increase in the number of these claims, especially by adult children who have been disinherited.

Applies to any assets owned by the deceased that pass under a valid will and form part of the deceased’s estate – it does not apply to property that passes by right of survivorship such as a joint tenancy, insurance, or pensions where there are named beneficiaries and so forth.

The Court has a wide discretion to vary a will in any manner that it thinks just.

The Court may also take into account evidence of the testator’s reasons for not making adequate provision for the spouse or child that is contained in a statement in writing signed by the testator.

The action must be brought within 6 months from the date of the granting of Letters Probate.

The test with respect to a testator and his adult children is that of the “judicious parent”, and a parent has a moral obligation to provide for his or her children. If the children have estranged themselves, then the testator may not have to provide for the children. The test is that of the judicious parent or spouse, not necessarily a kindly one, as to what he or she should have to provide in order to discharge the marital or parental duty, having regard to both economic and moral considerations.

In a Supreme Court of Canada land mark decision Tataryn v. Tataryn 1994, a wife of 43 years was not adequately provided for in the deceased’s will. One son was provided for generously and another son was disinherited.

The Court found that it should search for “contemporary justice”. It held that a testator has a legal obligation to provide for his or her spouse, and only a moral obligation to provide for adult children. Legal obligations take priority over moral obligations. If there are sufficient assets, then both legal and moral obligations should be met.

The Courts acknowledge that a testator should be free to dispose of his or her assets as he or she sees fit, but the Court will interfere to vary a will where it is appropriate.

In Tataryn the Court held that as a minimum, the widow should get what she would have received had the parties separated, as well as some extra monies in the form of maintenance for her twilight years.


Since changed after WESA April 1,2014

See attached Glossary for the formula for the distribution of assets when a person dies without a will.

Separation of spouses for one year prior to death disqualifies the surviving spouse from taking deceased’s spouse estate on an intestacy.


This area of the law usually deals with a purported gift of an asset by one individual to another.

Resulting trusts arise in 3 instances:

where the individual gratuitously transfers the assets;
where the individual supplies all or substantially all of the purchase price;
where the individual puts his/her property into another’s name and the other person gave no consideration (ie, paid no monies);

The lack of consideration is the common element – the individual must therefore have intended the recipient to hold the asset in trust and that at some point it will go back to the transferor, as the law of equity assumes bargains not gifts. This presumption can be rebutted on a balance of probabilities but the onus rests on the volunteer to show that it was a gift. If the transferor and the transferee have a close relationship at the time of the transfer, the presumption is weakened and slight evidence will be required to rebut it. The evidence will be confined in time to the date of the transfer and may be written, verbal or circumstantial.

A resulting trust will not be presumed if the transfer was to a wife or child, then the onus will remain on the person who asserts the trust or was from a common-law husband to a common-law wife, or was from a father to a child (and presumably will include mother to child) or was from a step-parent to a step-child.


Generally when an account is opened in the name of 2 or more persons, if the holders are joint tenants, then the survivor has the right to the whole amount. However, in equity the beneficial title is the issue:

who has the right to the income and capital while both joint tenants are alive;
is there a right of survivorship;

Typically when both joint tenants have deposited monies into account, then the survivor is entitled to the proportionate deposits. Where only one of the joint tenants deposits money into the account, then a presumption of resulting trusts arise.

There are a number of decisions that have held that the bank document giving right to the purported right of survivorship is merely for a matter of convenience and it is always a question of intention, that must be proved by evidence. The Supreme Court of Canada has held that the bank form giving rise to the purported right of survivorship does not necessarily evidence a depositor’s intention to make a gift of the account.


This also is a very big growth area in estate law. The situation typically applies to common-law spouses, same sex spouses, or any one who has been in a “relationship” with another and there has been:

an enrichment enjoyed by one party;
a corresponding deprivation suffered by the other party;
an absence of any juristic reason for the deprivation/enrichment;

There have been a number of Supreme Court of Canada decisions such as Peter v. Beblow that have extended the claim for unjust enrichment to include contributions of homemaking and child care services, rather than the traditional test of financial contribution. The Supreme Court of Canada recently in Soulos held that the test for constructive trust is now “good conscience.”

This law has in recent years been applied to same sex relationships.

Constructive trust claims have been and will continue to be more prevalent.

Constructive trusts may also arise in other circumstances than common-law or same sex relationships, such as mutual wills. A constructive trust may be imposed on the survivor of the parties if it can be shown that there was an agreement between the parties not to revoke their wills and to dispose of their property in a particular way if the survivor has broken the agreement and has made another will.


A fiduciary relationship is one in which there is a duty to one person, the fiduciary, to act on behalf of another person with respect to property which is the subject of the relationship. Where there is a fiduciary relationship, then the fiduciary must act honestly, impartially and cannot personally benefit other than for prescribed fees for services. The fiduciary is bound to protect the interests of the beneficiary, and cannot act in a conflict of interest, nor personally benefit. Fiduciaries are typically lawyers, bankers, directors, or any other person in a high position of trust.

A person using a power of attorney cannot use that document to personally benefit him or herself, or this will be a breach of fiduciary duty.

There is an onus on the fiduciary to prove that he or she acted properly when called into question.


A lawyer is under a duty of care to carefully consider a client’s mental capacity and the thoroughness required is proportionate to the gravity of the transaction:

A lawyer owes a duty to his client to draft a will in accordance with the instructions, and to provide all required advice and attend to the execution of the will expeditiously given the circumstances – the responsibility to carry the client’s wishes extends to an intended beneficiary ( the disappointed beneficiary) who may be foreseeably deprived of a inheritance by the lawyer’s negligence.

A lawyer may breach his duty by failing to enquire, if appropriate, into:
obtaining a medical certificate;
probing the client’s mind;
properly recording notes;
looking for suspicious circumstances;
allowing interested parties to be present during the interview;
failing to take steps to test for capacity;
taking instructions from a beneficiary and not confirming same with the testator;
a common area of lawyer negligence is missing a limitation date, ie, failing to commence a Wills Variation action within 6 months from the date of probate.

Severance of Joint Tenancies

Severance of Joint Tenancies

The severance of joint tenancies is an increasingly important issue in estate litigation. It can occur without the registered joint owners even when knowing it if their conduct is inconsistent with joint ownership.

We often assume that property, registered in joint tenancy, will automatically pass to the surviving joint tenant(s) upon the death of another joint tenant.

This is, however, not always the case. As demonstrated in the recent Pecore and Madsen cases from the Supreme Court of Canada, one possibility is that the surviving joint tenant actually holds the property in trust for the estate of the estate of the deceased.

A second option, which we will examine in this paper, is the possibility where joint tenancies have been somehow terminated prior to the death of one co-owner.

Legal practitioners should always consider the question of whether property, apparently held in joint tenancy, indeed remained in joint tenancy at the time of death.

Subject always to the principles set out in Pecore, where a joint tenancy has not been terminated prior to a joint tenant’s death, then the property will automatically pass to the surviving joint tenant.

On the other hand, if the joint tenancy has been somehow terminated, then the deceased’s share in the property will be included in his or her estate and distributed accordingly.

Severance of Joint Tenancies

The legal process of converting a joint tenancy arrangement into a tenancy in common, is referred to as “severance”. The distinction is important because of the right of survivorship which attaches to a joint tenancy but not to tenants in common.

It is possible to sever a joint tenancy either intentionally or inadvertently. Where a tenancy in common has been created prior to the death of one owner, the deceased’s property interest will not pass the other owners, but rather will form part of the deceased’s estate.

The severance of the joint tenancy can have a very significant effect on the outcome of both matrimonial and estate litigation. Recently this is especially so because real property increasingly represents the major asset owned by the Deceased.

Requirements of Joint Tenancies

Our law presumes joint owners to hold as tenants in common, rather than as joint tenants unless the title of the property specifically describes the owners as “joint tenants”.

In addition to the form of registration, there are four essential pre-conditions of ownership in joint tenancy. These are known legally as the “four unities” . In the absence of any of these four unities, the law presumes the owners to be tenants in common, and not joint tenants.

Briefly, the four unities are the following;

1) Unity of Interest

The interest of all joint tenants must be identical in duration, extent, and nature. For example , two joint owners would each have 50% , or four joint owners would each have a 25% interest. (Thus a 30/70 per cent ownership can exist only as for tenants in common.)

2) Unity of Possession

Each joint tenant must have an undivided share of the property at the same time as the other joint tenants. No joint tenant can have the exclusive right to possess the whole property. ( Possession in this context refers to the actual ownership of the property, and not actual physical occupancy.) The concept of an undivided share means that there is no actual division of any kind in the property. From a legal perspective, there is only the whole property, there is no such thing as a division of the whole;

3) Unity of Time

The interest of all joint tenants must be created at the same time and for the same period. Each joint tenant must receive his or her interest at the same time and the interest must be of the same duration.

4) Unity of Title

Each joint tenant must have an equal title to the property, created by the same legal document. The document creating the title may be a transfer document, a will, a trust declaration, a deed of gift, or contract. What is crucial, however, is that it be the same legal document which creates each of the respective interests as joint tenants.

Should any of these four unities fail, this may cause the severance of the joint tenancy, and create a tenancy in common.

Acts Severing a Joint Tenancy

The leading English case is Williams v. Hensman ( 1861) 70 E.R. 862. Here the court held that a joint tenancy may be severed in three different ways.

1) By an act of one person acting on his or her own share; ( i.e. Mr. Smith registers a transfer from himself to himself at the land title office).

In other words, one joint tenant, without the consent of or even notice to the other tenants, may deal with his interest in such a way as to destroy one of the unities. In British Columbia our Land Title Act, s 18 permits such a transfer to sever a joint tenancy;

2) By mutual agreement

This typically occurs when all of the joint tenants enter into an agreement which expressly purports to sever the joint tenancy. Most often this occurs during a marriage breakup. It may be set out in a separation agreement or court order. Where, however, an agreement does not specifically address the severance of the joint tenancy, our courts often require that the parties establish severance by mutual course of conduct. McKee v. National Trust (1975) 56 D.L.R. (3d) 190)-;

3) By any course of dealing that intimates that the interests of all were mutually treated as constituting a tenancy in common.

Many acts can cause the severance of the joint tenancy, sometimes unwittingly. For severance by conduct, however, there must be mutuality of intention to treat the ownership as a tenancy in common. Both joint tenants must openly and mutually treat the tenancy as a tenancy in common. For example, a declaration of irreconcilability under the Family Relations Act, RSBC, will sever any joint tenancy ownerships of property held by the couple.

Case Discussion: Joint Tenancies

Most reported cases seem to involve the question of “mutual treatment” as tenants in common i.e. whether or no the parties carried out a course of conduct sufficient to enable the court to find their interests as constituting a tenancy in common.

Commonly the courts seem to focus on negotiations or actual agreements between the parties in respect of the property in question. These have been found to be evidence of an intention to treat the ownership interests as a tenancy in common.

In Schofield V. Graham (1969) 6 D.L.R. (3d) 88, a husband and wife had purchased property initially as joint tenants. Years later, when their marriage was dissolved, a dispute arose regarding the ownership of the property. The wife commenced an action for a declaration that each owned an undivided one half interest as joint tenants. That action settled prior to trial on the basis that the property would be listed for sale, and the proceeds divided equally. Prior to final sale, however, the husband died and the wife claimed full ownership of the property as a surviving joint tenant.

The wife’s claim was denied. The court held there was sufficient evidence to conclude that the parties intended to destroy their unity of possession. Therefore it ruled the joint tenancy had been severed.

Perry v Perry Estate

This decision was followed in Perry v. Perry Estate 39 E.T.R. (2d) 115, an Alberta decision. Here a couple divorced but no court order was made with respect to the family home registered in their names as joint tenants. The home was sold, however the husband died before the sale proceeds were distributed.

Once again, the court ruled that the joint tenancy had been severed. The court found that the finalization of the divorce and the decision to sell the home indicated that the parties intended to terminate the unity of possession. They said the agreement to sever was implicit in the parties’ actions. Accordingly the wife was only entitled to one half of the proceeds of the sale, with the other falling into the husband’s estate.

Feinstein v. Ashford

Feinstein v. Ashford, 2005 BCSC 1379 is an example of the importance of careful analysis of various ownership interests. In this case one joint tenant, unbeknownst to the other joint tenant, signed a land transfer at his lawyer’s office to reregister title to their joint property as a tenancy in common. A few hours later he died.

A legal dispute thus arose as to whether this unregistered transfer was effective to sever the joint tenancy. The court held that, upon execution, the transfer was effective to sever the joint tenancy.

Walker v. Dubard

A leading British Columbia case is Walker v. Dubard 45 E.T.R. 209 (BCCA) This case involved a couple who owned several assets jointly. Shortly before her death due to cancer, the wife was apparently upset with her husband’s lack of sensitivity to her illness and wanted to avoid her estate passing to his relatives. Accordingly she both changed her will and transferred several assets out of joint tenancy. The husband made a claim under the Wills Variation Act and also sought declarations with respect to ownership of some of the joint assets.

One question was the effectiveness of some letters to the Deceased’s bank which had been drafted by the Deceased’s lawyer and signed by the Deceased. These letters spoke of her intention to sever the joint tenancy in respect of some investment certificates and bonds. They did not however specifically direct the bank to transfer these assets.

The appeal court upheld the trial judge’s finding that the joint tenancy had not been severed. The bank investments therefore passed to the husband by way of right of survivorship.

The court ruled that it is insufficient to sever a joint tenancy where there is merely a unilateral declaration of intent to sever, and nothing more, regardless of whether notice of that intent is given to the other joint tenant(s).

Zuk v. Zuk

The case Zuk v. Zuk 2007 BCSC 300 involved the untimely death of a wife in the midst of matrimonial proceedings against her husband. At the time of death, there had not yet been any declaration of irreconcilability made under the Family Relations Act.

The wife’s daughter continued the action as her personal representative and sought reapportionment of the former matrimonial should be made in favour of the estate. The husband argued that the matrimonial home was his alone as surviving joint tenant.

The court found there had been no severance. In doing so they cited Tompkins Estate v. Tompkins (1993) 76 B.C. LR (2d) (BCCA) in which Southin, J.A. stated in Para (9) she is “not wholly in accord with the learned trial judge’s conclusion that severance requires either alienation or agreement. I prefer to say that it requires either alienation or agreement or facts which preclude one of the parties from asserting that there was no agreement.”


It is not entirely clear what the courts may require in order to find where joint tenancies have been severed. Nevertheless it is safe to predict that in future there will likely be court challenges to estate plans using joint tenancies, on the basis that the conduct of the parties has resulted in a severance of the joint tenancy.

For example, we recently reviewed a file where a transfer of property had been made to a father and son as joint tenants. Simultaneously they signed a trust agreement wherein the son acknowledged that he actually held his interest in trust for both himself and his sister. This in fact occurred in Public Trustee v Mee (1972) 2W.W.R. 424.The court held that when the bare trust declaration was signed, the property was transferred to the trustee, and thus the joint tenancy severed. This lack of basic understanding of the 4 unities, defeated the joint ownership arrangement from the outset.

There seems to an unfortunate lack of consideration by some legal professionals of the effects of some legal documents on the nature of ownership of the property.

Further posts on Joint Tenancies include

The Nature of Joint Tenancy

Using Joint Tenancy for Estate Planning

Joint Tenancy & Property


Wrongful Death Damages Fail To Provide For Grief

GriefWrongful Death Damages Fail To Provide For Grief and Emotional Injury in BC

One of the glaring inequities in wrongful death claims in British Columbia is the failure of our legislation to provide authorization for the courts to make an award for compensation for individual grief suffering as a result of the loss of a close family member.

Simply put the court does not compensate or have authority to award compensation for injuries that may have been suffered as a result of a nerve a shock or grief or other psychological or emotional injury caused by, the negligence of the defendant. The court does not compensate for the indirect results or reaction to the death or injury of a loved one.


This can have disastrous results for parents who lose a child to the neglect or fault of another and are then informed there is no pecuniary award for grief-just financial loss.

In Devji v Burnaby 1999 BCCA 599 followed previous complicated case law as follows;

It must be remembered, however, that the claim must be for actual psychiatric or emotional injury caused by (not just resulting from) the actionable conduct of the defendant. Because of the dichotomy between principle and policy, in many cases there have been several sets of reasons for judgments and many significant dissents. This makes the law exceedingly difficult to rationalize. As will be seen, the divergence of opinion has been settled in the United Kingdom by policy decisions of the House of Lords in Alcock v. Chief Constable of the South Yorkshire Police, [1991] 4 All E.R. 907 and White and Others v. Chief Constable of South Yorkshire and Others, [1999] 1 All E.R. 1 (H.L.). In White, at 41, Lord Hoffman formulated the circumstances in which recovery for psychological injury will be permitted:

(1). The plaintiff must have close ties of love and affection with the victim. Such ties may be presumed in some cases (e.g. spouses, parent and child) but must otherwise be established by evidence. (2) The plaintiff must have been present at the accident or its immediate aftermath. (3) The psychiatric injury must have been caused by direct perception of the accident or its immediate aftermath and not upon hearing about it from someone else. (Emphasis added)


[5] The foregoing, however, does not state the law of this Province. The Supreme Court of Canada, in a number of cases, has adopted the approach to liability enunciated in Anns v. Merton London Borough Council, [1977] 2 All E.R. 492 (H.L.)which has since been overruled in the United Kingdom, and there is a previous nervous shock decision of a five-judge panel of this Court which is binding upon us to the extent of that which it actually decides. One of the questions to be decided in the case at bar is whether that case, Rhodes v. C.N.R. (1990), 50 B.C.L.R. (2d) 273, precludes recovery by the plaintiffs.

The Evolution of the Law Relating to Psychiatric or Psychological Injury Cases


[15] The first test for liability on the part of a defendant is reasonable foreseeability of particular harm as a consequence of his conduct. Thus, as was stated by Lord Denning in King v. Phillips, [1953] 1 All E.R. 617 (C.A.) at 623, “… there can be no doubt since Hay (or Bourhill) v. Young, [1942] 2 All E.R. 396 (H.L.), that the test of liability for shock is foreseeability of injury by shock.” As the cases show, however, this general proposition is directed not to the world at large, but only to that class of persons which might reasonably be within the contemplation of the alleged wrongdoer. It also seems clear that while foreseeability is one test for liability, it must be reasonable foreseeability, and that every foreseeable injury does not create a duty of care. This is confirmed by numerous judicial pronouncements, including a passage from the opinion of Lord Wilberforce in McLoughlin v. O’Brian, [1982] 2 All E.R. 298 (H.L.) to which I shall return later in these Reasons. At 303, that learned judge said:

That foreseeability does not of itself, and automatically, lead to a duty of care is, I think, clear. I gave some examples in Anns v. Merton London Borough [1977] 2 All E.R. 492 at 498…, Anns itself being one. I may add what Lord Reid said in McKew v. Holland & Hannen & Cubitts (Scotland) Ltd. [1969] 3 All E.R. 1621 at 1623: ‘A defender is not liable for a consequence of a kind which is not foreseeable. But it does not follow that he is liable for every consequence which a reasonable man could foresee.’

[16] One of the difficulties arising from the simple test of foreseeability is to determine how it is to be applied in particular circumstances. As already mentioned, some eminent judges believe nervous shock cases can be decided solely by reference to the principle of foreseeability. Other courts have taken the view that the application of the foreseeability principle is too open-ended and that “control mechanisms” are required. This is illustrated by a comment of Lord Bridge in McLoughlin (supra), at 313, that it is readily foreseeable that a significant number of mothers exposed suddenly to a casualty or the consequences of a casualty that causes the death of their children might break down under the shock of the event and suffer psychiatric illness. I note, however, that this comment includes a “control mechanism” by limiting its operation to the defendant’s foreseeability of harm by nervous shock not to the world at large, but only to mothers. This, of course, was only an example within the context of the case under consideration but it illustrates the two points of view.

[17] As already stated, in the U.K. the contest between pure foreseeability and “control mechanisms” has already been decided in favour of the latter in the opinions in Alcock and White, which I shall discuss below. In Canada, the Supreme Court of Canada in Kamloops v. Nielsen, [1984]2 S.C.R. 2, included a caveat about public policy negating a duty of care not to cause reasonably foreseeable injury. More directly, “control mechanisms” in nervous shock cases were actually imposed in Rhodes. Nevertheless, it may be useful to record briefly how the law has evolved incrementally in the United Kingdom and elsewhere.

Wrongful Death Claims – Loss of Financial Support

Wrongful Death Claims

Yesterday I blogged about the Family Compensation Act of British Columbia which allows a spouse, parent, or child of a person whose death has been caused by the wrongful act negligence or default of another, to sue for compensation.

There are several heads of damages, and probably the largest in terms of pecuniary amount is that of loss of financial support.

The following cases are a brief summary of this head of damage:

In the decision Johnson v. Carter, 2007 BCSC 622, the court referred to some of the principles in the following paragraphs:

Here, the claim is for loss of financial support.

In Keizerv. Hanna, [1978] 2 S.C.R. 342, Dickson J. said the following at 351-52:

… The appellant is entitled to an award of such amount as will assure her the comforts and station in life which she would have enjoyed but for the untimely death of her husband. If one is speaking of contingencies, I think it is not unreasonable to give primary attention to the contingencies, and they are many, the occurrence of which would result in making the award, in the light of events, entirely inadequate. An assessment must be neither punitive nor influenced by sentimentality. It is largely an exercise of business judgment. The question is whether a stated amount of capital will provide, during the period in question, having regard to contingencies tending to increase or decrease the award, a monthly sum at least equal to that which might reasonably have been expected during the continued life of the deceased.

The conventional approach to determining an award for loss of future earnings is as follows:

1. A calculation is made of the income

which has been lost up to the date of the trial.

2. A calculation is made of the loss of

future earnings.

3. A reduction is then made for personal

consumption of the deceased.

4. Contingencies are reviewed to

determine if a further reduction is required.

[Cogar Estate v. Central Mountain Air Services Ltd.

(1992), 72 B.C.L.R. (2d) 292 (C.A.)]


Loss of support, like loss of future earning capacity, involves an inquiry into the unknowable:

Because damage awards are made as lump sums, an award for loss of future earning capacity must deal to some extent with the unknowable. The standard of proof to be applied when evaluating hypothetical events that may affect an award is simple probability, not the balance of probabilities: Athey v. Leonati, [1996] 3 S.C.R. 458. Possibilities and probabilities, chances, opportunities, and risks must all be

considered, so long as they are a real and substantial possibility and not mere speculation. These possibilities are to be given weight according to the percentage chance they would have happened or will happen.

[Rosvoldv. Dunlop (2001), 84 B.C.L.R. (3d) 158, 2001 BCCA 1 at [paragraph] 9]

[6] Our Court of Appeal in Brown v. Finch, 42 B.C.L.R. (3d) 116 also said at 1J3:

3. The basis upon which damages must be assessed is that stated by McFarlane J.A. in Cox v. Takahashi (1977), 5 B.C.L.R. 162 (B.C.C.A.) at 164:

It is well established that the measure of damages under the statute as interpreted by the Privy Council in Nance v. B.C. Bee. Ry., [1951] A.C. 601, 2 W.W.R. (N.S.) 665, [1951] 3 D.L.R. 705, is the pecuniary loss suffered by the dependants as a consequence of the death. That pecuniary loss is the actual financial benefit of which they have been deprived and includes financial benefit which might reasonably be expected to accrue in the future if the death had not occurred