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Case Law


Hansen Estate v. Hansen, 2012 ONCA 112
May 25, 2012

joint tenancy. severance

joint tenancy. presumptions. severance by course of dealing

The appellants were the estate trustees of the deceased husband. They were his daughters of a prior marriage. The respondent was their step-mother.


The husband and wife were married to each other in April of 1983. Both had children from previous relationships. In 2003 they purchased their matrimonial home together and held title to the property as joint tenants.


They separated at some time in March of 2010.


In March of 2010, the husband engaged counsel to act on his behalf to negotiate the terms of a separation agreement. He drew a new will which “cut out” his second wife and left his estate to his children.


The wife also engaged counsel. Her lawyer wrote a detailed letter to the husband’s lawyer indicating that all assets should be divided equally, pointing out that the matrimonial home was equally owned, demanding an equal division of assets, and advising that he would be obtaining a market value assessment of the house. The wife’s lawyer set out stringent timelines for a reply.


In turn, the deceased husband’s lawyer indicated that he was prepared to negotiate and suggested a meeting after the exchange of financial statements to resolve the matter.


In May of 2010, the respondent moved into an apartment and signed a 12-month lease. The parties closed out their joint banking accounts and the utility bills for the home were transferred into the husband’s name.


Before matters moved further, the husband died.


The wife asserted that she was the sole owner of the matrimonial home as it passed to her by right of survivorship. The estate took the position that the parties had severed the joint tenancy by their conduct.


The trial judge held that the joint tenancy had not been severed. On her review of the facts, she held that all of their conduct did not reveal a “course of dealing” that matched the fact patterns of prior established precedents.


The estate trustees appealed.


a) The nature of joint tenancy


A joint tenancy and a tenancy in common are the main forms through which two or more persons may collectively hold interests in property. In a joint tenancy, the co-owners hold property as a unified “whole” such that each has an equal interest in property. The distinction between a tenancy in common and a joint tenancy, however, is the right of survivorship. Through the right of survivorship, the co-interest of a joint owner will pass equally to all of the surviving co-owners upon his or her death. If multiple co-owners remain, the joint tenancy remains in existence. Once only one owner survives, the entire interest passes to the survivor.


By contrast, upon the death of a co-owner in a tenancy in common, the deceased’s interest in the property passes to his or her estate.


b) “The three rules”


It is well-established, from the decision of Williams v. Hensman (1861), 70 E.R. 862 p. 867, that a joint tenancy can be severed in three distinct ways:

Rule 1: By an owner unilaterally acting in his or her own share, such as selling it or encumbering it;


Rule 2: By a mutual agreement between all of the co-owners to sever the joint tenancy; and


Rule 3: By any course of dealings sufficient to intimate that the interests of all of the joint tenants were mutually treated as constituting a tenancy in common.


c) The distinction between “mutual agreement” and “a course of dealing”


Rule 3, dealing with “a course of conduct” operates where there is no explicit agreement between the parties. Thus, it is contrasted with Rule 2 where a mutual agreement to sever exists. Put another way, proof of intention contemplated by Rule 3 does not require proof of an explicit intention communicated by each owner to the other. To hold otherwise, would render Rule 3 redundant.


d) “Sufficient intimation”


The phrase in Rule 3 “the interests of all were mutually treated” requires two elements:


  • the co-owners know of the others’ position; and

  • they all treated their respective interests in the property as no longer being held jointly.

Such knowledge can be inferred from communications or conduct. Thus, it is inherently a fact-specific assessment.


e) Knowledge vs. Estoppel


The underlying rationale is a means of ensuring that a right of survivorship does not operate unfairly in favour of one or more of the owners where the co-owners have shown, through their conduct, a common intention to no longer treat their respective shares in the property as an indivisible, unified whole.


What is required is that the co-owners know of the others’ position and that they treat their respective interests in the property as no longer being held jointly. It is this knowledge and conduct that matters. It is unnecessary to engraft upon their
“course of dealing” any concept of detrimental reliance. The rationale for severing the joint tenancy relates to the inappropriateness of the right of survivorship in circumstances where the co-owners have mutually treated their interests in the property as being held in common. The rationale, therefore, is not contingent upon the fact that one party relied upon the representation to his or her detriment.


f) Rule 1 and Rule 3 Contrasted


[Ed’s note]: Although not mentioned in the Court of Appeal decision, the right of survivorship can be extinguished, under Rule 1, by a unilateral dealing with the property by a joint tenant. The most common method of so dealing is a deed to one’s self. This was established in the Court of Appeal decision of Kozub v. Timco (1984), 39 R.F.L. (2d) 146. Thus, the fact that a party did not take such an active step does not negate the application of Rule 3.


g) The test on appeal


While it is clear that fact-finding is the province of a trial judge, the mis-application of a legal principle to the facts can constitute a reversible error. The trial judge’s approach – one of finding precise categories of cases similar to the case at bar – led to error. She failed to appreciate the significance of all of the facts.


h) The Court of Appeal’s conclusion


The Court concluded, on the totality of the evidence, that there had been a “course of dealing” sufficient to indicate that the parties mutually severed the joint tenancy. Amongst the factors were:


  • the wife moved out of the matrimonial home

  • she entered into a long-term lease of an apartment

  • the husband remained in the home

  • the husband transferred the utility bills into his own name

  • both parties engaged lawyers

  • the wife’s lawyer looked for an equal division of all property

  • the wife’s lawyer invited negotiations

  • the wife’s lawyer sought an equal division of all assets

  • the wife’s lawyer suggested that his client be bought out

  • the letter was forceful and included deadlines (as contrasted with a mere invitation to negotiate)

  • an appraisal was obtained for the purposes of valuation or buy out

  • the husband drafted a new will (although the Court took pains to point out that the right of survivorship would override a will)

  • the parties closed out their joint bank accounts


In summary, the Court concluded that giving effect to the wife’s right of survivorship would confer an unwarranted windfall upon her contrary to the mutual intentions that the parties had formed prior to the husband’s death.



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