Unjust Enrichment- Joint Mortgage Debt After Death

Parrott-Ericson v Ericson Estate 2006 BCSC 1409 relied upon the law of unjust enrichment to hold that the surviving joint tenant of property with a mortgager takes both the property and the entire mortgage debt as the surviving joint tenant would be unjustly enriched if the estate had to pay one half of the mortgage debt as the petitioner sought.

The surviving spouse of the joint tenancy property brought a petition for an order that the deceased’s estate was liable to the surviving joint tenant to pay one half of the $400,000 mortgage on the property.

The parties were jointly and severally liable under lines of credit secured by way of mortgage is a gift to the strata properties.

After the death the wife took sole title to strata lots and the estate refused to pay one half of the loan.

The court dismissed the petition as the wife’s claim for contribution arose in equity, and was based on unjust enrichment. The wife had by operation of survivorship receive the entire interest in secured the joint and several obligations.

In the circumstances the wife could not equitably be entitled to call in the estate to pay half of the debt.

The mortgage debt in land were clearly connected. The loan was based upon which the property was acquired. No arrangement was made that the estate would be liable for one half of the debt.

As the wife received the land entirely should be unjustly enriched as the estate had to pay one half of the debt.

The children of the deceased had brought a wills variation claim.

The court found that the joint debt was used to acquire the land and the petitioner received the land entirely, and thus would be just unjustly enriched if the estate had to pay one half of the debt .

The court followed the decision of Cunningham Reid v Public Trustee (1944) 1 KB 602 held it is a principle of equity that a joint tenant, it takes the entire benefit of an interest in real property through a survivorship must take the burden associated with the benefit, particularly were in that joint debt has been used to acquire the real property.

In equity the claim to contribution in such circumstances must fail.

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