COURT OF APPEAL FOR ONTARIO DATE: 20241204 DOCKET: COA-23-CV-0905
van Rensburg, Zarnett and George JJ.A.
BETWEEN
Nigel Jackson Applicant (Respondent)
and
Lori Rosenberg Respondent (Appellant)
AND BETWEEN
Lori Rosenberg Applicant (Appellant)
and
Nigel Jackson* and Nigel Jackson, Estate Trustee of the Estate of Bernard Taube Respondents (Respondent*)
Counsel: Mobina Basiri, for the appellant Gosia Bawolska and Maneka Kaur, for the respondent
Heard: April 9, 2024
On appeal from the judgment of Justice Robert Charney of the Superior Court of Justice, dated July 28, 2023, with reasons reported at 2023 ONSC 4403.
Overview
1Joint tenancy is a form of property ownership with specific attributes, one of which is the right of survivorship. Upon the death of one joint tenant, their interest in the jointly held property passes to the surviving joint tenant – it does not form part of the estate of the deceased joint tenant and is not subject to probate fees.
2But the right of survivorship is not the only attribute of a joint tenancy. During their joint lives each joint tenant with a beneficial interest has immediate rights, including an undivided interest in the ownership of the property, a right to possession, a statutory right to compel partition or sale of the entire property, 1 and the right to sever the joint tenancy, converting it to a tenancy in common. Tenants in common do not have a right of survivorship.
3These features of a joint tenancy provide the backdrop for the issues that arise in this litigation concerning the effect of two transfers, by the respondent, Nigel Jackson, of title to his home in Port Hope, Ontario.
4In 2012, Mr. Jackson transferred title, previously held by him alone, into his name and that of the appellant, Lori Rosenberg, as joint tenants. Ms. Rosenberg, the great niece of Mr. Jackson’s late romantic partner, was not asked to, nor did she, pay anything for what she received.
5The second transfer took place in 2020. Mr. Jackson transferred his interest in the property to himself with the intention of severing the joint tenancy by converting it into a tenancy in common.
6The application judge found that the effect of the 2012 transfer was a gift to Ms. Rosenberg, but only of a right of survivorship; otherwise she held her interest in the property in trust for Mr. Jackson during their joint lives and had no rights exercisable during his lifetime. Mr. Jackson remained free to encumber or sell the property if he chose to.
7The application judge also held that Mr. Jackson had retained the right to sever the joint tenancy, which he did by the 2020 transfer. The result was to eliminate Ms. Rosenberg’s right of survivorship with respect to Mr. Jackson’s 50% share of the property, but not with respect to the 50% share held in trust by Ms. Rosenberg for Mr. Jackson. To the extent there was equity in the property upon Mr. Jackson’s death, a 50% share of it would pass to Ms. Rosenberg. 2
8Ms. Rosenberg appeals. She submits that the application judge erred in finding that the 2012 transfer was limited to gifting the right of survivorship rather than a full beneficial interest with immediate rights. In any event, she argues that once gifted, the right of survivorship could not be taken away from her, even in part, and the application judge erred in giving that effect to the 2020 transfer. Mr. Jackson supports the application judge’s decision with one exception. Although he does not cross-appeal, he maintains that the entire right of survivorship ended with the severance of the joint tenancy.
9For the reasons that follow, I would dismiss Ms. Rosenberg’s appeal.
10The application judge’s factual finding that, at the time of the 2012 transfer, Mr. Jackson did not intend to gift any rights to Ms. Rosenberg other than a right of survivorship is well supported on the record and is entitled to deference. There is strong authority for the proposition that a gift of a right of survivorship may be made without any gift of other rights associated with joint ownership.
11The application judge was entitled to find that the 2020 transfer brought the joint tenancy to an end. It was in the nature of the right of survivorship that it was co-extensive with the subsistence of the joint tenancy. Absent circumstances that are not present in this case, a joint tenancy – even one created by gift – is subject to the right of either joint tenant to bring it to an end, even though the end of a joint tenancy means the end of the right of survivorship.
12Since, as both parties contend, a right of survivorship only flows from an interest as a joint tenant, there was no basis for the application judge’s finding that the right of survivorship remained in effect as to a 50% interest in the property after the 2020 transfer. I would invite submissions on whether variations are required to the application judge’s judgments to delete any reference to Ms. Rosenberg continuing to have a right of survivorship after the severance of the joint tenancy.
Factual Background
13Mr. Jackson was in a long-term relationship with Ms. Rosenberg’s great uncle, Mr. Taube. Mr. Taube and Mr. Jackson had a close relationship with Ms. Rosenberg. In 2005, Mr. Taube and Mr. Jackson signed mirror wills, naming each other as sole beneficiary and Ms. Rosenberg as alternate beneficiary.
14Mr. Taube died in 2010. Mr. Taube’s assets included a condominium in Toronto, which Mr. Jackson and Mr. Taube owned as joint tenants; Mr. Taube’s interest passed to Mr. Jackson by right of survivorship. In 2011, after Mr. Taube’s death, Mr. Jackson sold the condominium and used the proceeds to purchase the home in Port Hope. Mr. Jackson alone paid for the home and its upkeep since acquisition. Only Mr. Jackson was ever shown as owner on the property insurance.
15Mr. Jackson had no family of his own and, as part of his estate planning, he wanted to leave his Port Hope home to Ms. Rosenberg on his death. Although his 2005 will would have accomplished that, he wanted to do so without probate fees. To that end, Mr. Jackson instructed a lawyer to make Ms. Rosenberg a joint tenant of the Port Hope property.
16The 2012 transfer was therefore effected. It was a gratuitous transfer. Both Mr. Jackson and Ms. Rosenberg signed a direction to the lawyer confirming that the home was to be transferred into their names as “joint tenants with right of survivorship and not as tenants in common”. The direction confirmed that they had “instruct[ed] [the lawyer] to effect [the 2012 transfer] as a GIFT on the basis that no consideration [was] passing between the parties in any manner whatsoever.” The Land Transfer Tax Statement prepared at the time of the 2012 transfer indicated that the consideration was nominal ($2.00), the explanation being that a “gift” was involved.
17Mr. Jackson’s evidence was that the implications of Ms. Rosenberg being a joint tenant, in so far as it related to any rights she might have during his lifetime, were not explained to him at the time of the 2012 transfer.
18After the 2012 transfer, Mr. Jackson continued to solely pay for the upkeep of the home and lived in it. He kept it insured in his name. Ms. Rosenberg has never contributed financially to the home, nor did she ever live there.
19In or around August 2020, Ms. Rosenberg and her spouse visited Mr. Jackson. While Ms. Rosenberg was out of the room, her spouse told Mr. Jackson that he and Ms. Rosenberg intended to renovate the home and sell it. They would use the proceeds to purchase a new property in which Mr. Jackson could live with them.
20Mr. Jackson was shocked, frightened and worried that Ms. Rosenberg and her spouse would take steps to force him out of his home. He wanted to regain full ownership of the home.
21On September 22, 2020, Mr. Jackson asked a real estate lawyer to sever the joint tenancy and convert it to a tenancy in common. His reason, as the application judge put it, was “so that if he died before he regained ownership of his home, Ms. Rosenberg would not get the entire home.”
22The 2020 transfer was therefore made. Mr. Jackson transferred his interest to himself as a tenant in common. The Land Transfer Tax Statement prepared in connection with the 2020 transfer stated that the transfer was for no consideration, explaining that it was to “sever a joint tenancy”.
The Proceedings Below
23The parties both brought applications which were dealt with together. As the application judge described them: “[b]oth applications deal with the same question: Did Mr. Jackson’s transfer of the title of his home from himself as sole owner to himself and Ms. Rosenberg as joint tenants, for no consideration, create a resulting trust in Mr. Jackson’s favour, or was this transfer intended as a gift to Ms. Rosenberg?”
24Mr. Jackson’s position was that the presumption of resulting trust was not rebutted for the 2012 transfer. He testified that he never intended for Ms. Rosenberg to have any rights over his home until his death, and that the lawyer who prepared the transfer never advised him about any rights Ms. Rosenberg might have over the home as a joint tenant during his lifetime. He also submitted that the 2020 transfer terminated any right of survivorship.
25Ms. Rosenberg’s position was that she was a beneficial owner of the home. She argued that the respondent had made an unconditional gift to her in the 2012 transfer, making her a joint owner both on title and beneficially. She also maintained that the severance of the joint tenancy in 2020 was ineffective, because a gift cannot be revoked and because it was a breach of a mutual wills agreement made among her, Mr. Taube and Mr. Jackson. Under the alleged mutual wills agreement, Mr. Jackson had promised to leave all his assets to her instead of sharing Mr. Taube’s assets with her upon Mr. Taube’s death.
The Application Judge’s Decision
26As noted above, Mr. Jackson made Ms. Rosenberg a joint tenant of his home for no consideration. The application judge held that the presumption of resulting trust applied – a rebuttable presumption that the transferor in a gratuitous transaction intended to create a trust rather than make a gift. When this presumption applies, the onus rests on the transferee to demonstrate that a gift was intended. If they fail to do so, they hold the property in trust for the transferor.
27In determining whether Ms. Rosenberg had rebutted the presumption of resulting trust, the application judge noted that he had to consider not just whether Mr. Jackson intended to make a gift but also the nature of the alleged gift. He referred to Mr. Jackson’s evidence that he intended to leave Ms. Rosenberg whatever equity was left in the home when he died, but not any rights to the home during his lifetime; the direction to the lawyer at the time of the 2012 transfer that a gift was intended; Mr. Jackson’s 2005 will; the intention to avoid probate fees; and the fact that this was Mr. Jackson’s home and there was no intention that Ms. Rosenberg ever live there during his lifetime.
28The application judge concluded the following:
Considering the evidence as a whole, I am satisfied that Mr. Jackson’s intention at the time of the [2012] transfer was to gift the right of survivorship in the Port Hope property to Ms. Rosenberg … The right of survivorship included whatever equity was left in the property after he died. Mr. Jackson did not intend to gift the property to Ms. Rosenberg during his lifetime … There was no intention to give Ms. Rosenberg any control over the property before Mr. Jackson’s death … Ms. Rosenberg’s beneficial interest in the property would arise only after Mr. Jackson’s death.
29The application judge held that, in law: (i) there could be a gift of the right of survivorship in the absence of an intent to give the property to the transferee during the transferor’s lifetime; (ii) the gift of the right of survivorship is an immediate gift, even though its benefit is enjoyed only on death of the transferor; and (iii) although the gift is immediate, it is a gift only of what remains at the time of the death of the transferor.
30Accordingly, the application judge held that the presumption of resulting trust arising from the 2012 transfer had been partially rebutted. Thus, Ms. Rosenberg held (a) her interest in the home during Mr. Jackson’s lifetime in trust for Mr. Jackson, and (b) a right of survivorship entitling her to the entire equity in the home, if any remained, upon Mr. Jackson’s death. During his lifetime, Mr. Jackson retained the right to sell or encumber the home.
31The application judge also concluded that although the gift of the right of survivorship took effect immediately, and a gift cannot be revoked, that did not preclude Mr. Jackson from severing the joint tenancy and thereby eliminating the right of survivorship. The application judge followed the decisions in Simcoff v. Simcoff, 2009 MBCA 80, 245 Man. R. (2d) 7 and Bergen v. Bergen, 2013 BCCA 492, 52 B.C.L.R. (5th) 258, which he viewed as standing for this proposition.
32The application judge noted the existence of arguably conflicting authority on this latter point: Thorsteinson Estate v. Olson, 2016 SKCA 134, 404 D.L.R. (4th) 453 and Pohl v. Midtdal, 2018 ABCA 403, 78 Alta. L.R. (6th) 78. He preferred the approach of the Manitoba and British Columbia appellate courts in Simcoff and Bergen. He found them to be more consistent with Ontario law, which holds that a joint tenant has a unilateral right to sever their joint tenancy at any time, thereby ending the right of survivorship.
33The application judge concluded that the 2020 transfer severed the joint tenancy, making each of Mr. Jackson and Ms. Rosenberg a tenant in common with a 50% interest in the property. The presumption of resulting trust applied, such that Ms. Rosenberg held her 50% interest in trust for Mr. Jackson. The application judge further held that “[w]hile severance of the joint tenancy eliminates Ms. Rosenberg’s right of survivorship with respect to Mr. Jackson’s 50% share, Mr. Jackson cannot revoke the right of survivorship with respect to Ms. Rosenberg’s 50% share.” He ordered that, when Mr. Jackson dies, his 50% share of whatever equity remains in the Port Hope property will form part of his estate, while “Ms. Rosenberg’s 50% share of whatever equity remains in the property will pass to her in accordance with the intention of the [2012 transfer].”
Analysis
(1) The Application Judge Did Not Err in Determining the Effect of the 2012 Transfer
34Ms. Rosenberg argues that the application judge erred in his conclusion concerning the effect of the 2012 transfer. The argument has both a factual and a legal component.
(i) The Application Judge Was Entitled to Find on the Facts that Mr. Jackson Intended Only to Gift a Right of Survivorship
35Ms. Rosenberg submits that Mr. Jackson intended to convey legal and beneficial title to her as a joint tenant owner. She asserts that Mr. Jackson made the transfer to honour his “agreement” with Mr. Taube to leave his estate to her. She also argues that the application judge should not have given any weight to Mr. Jackson’s stated intent to avoid probate fees, because she became subject to more onerous capital gains taxes by being placed on title as a joint owner. She submits that the application judge gave inadequate weight to all the evidence in concluding that the respondent never intended to gift an absolute interest to her during his lifetime.
36I do not accept these arguments. The application judge’s finding as to Mr. Jackson’s intention at the time of the 2012 transfer is entitled to appellate deference; it is not the role of this court to interfere with it absent a palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 10, 19. The application judge assiduously reviewed the evidence; there was ample evidence to support his finding that Mr. Jackson did not intend to gift to Ms. Rosenberg any rights concerning his home that she could exercise during his lifetime, but only intended to gift a right of survivorship. Ms. Rosenberg has not identified any palpable and overriding error that taints that finding.
37Moreover, to the extent Ms. Rosenberg’s complaint about the application judge’s factual finding is premised on his alleged failure to recognize that the 2012 transfer was made to fulfill an agreement among herself, Mr. Jackson and Mr. Taube, it fails for the same reasons as Ms. Rosenberg’s mutual wills argument failed before the application judge. The existence of an enforceable agreement was not established. 3 Indeed, in this court Ms. Rosenberg concedes that there was no binding contract concerning how Mr. Jackson would dispose of his property upon his death.
38Nor is there merit to the argument that the application judge should not have accepted Mr. Jackson’s explanation of the 2012 transfer as an attempt to leave the home to Ms. Rosenberg on his death while avoiding probate fees. Ms. Rosenberg’s counsel submits that putting an interest in the name of Ms. Rosenberg exposed her to capital gains taxes if the home was sold during Mr. Jackson’s lifetime; the implication of the argument is that Mr. Jackson would not have created that exposure for Ms. Rosenberg unless he intended to gift her a current beneficial interest in the home as well as the right of survivorship.
39Fatally undercutting this argument, however, is the lack of any evidence to support it. There was no evidence that capital gains tax exposure was ever considered by Mr. Jackson. Indeed, it was never put to Mr. Jackson that he had, or even should have, thought about this. 4 In determining whether a gift was intended, it is the intention of the transferor alone that counts: Andrade v. Andrade, 2016 ONCA 368, 131 O.R. (3d) 532, at para. 63.
40Finally, contrary to Ms. Rosenberg’s submission, Belchevski v. Milka Dziemianko, 2014 ONSC 6353, 49 R.P.R. (5th) 303 does not demonstrate that the application judge erred in finding that Mr. Jackson never intended to gift her a beneficial interest in the property during his lifetime. The legal conclusion in Belchevski – that the transferors had gifted a beneficial interest in a property – flowed from factual circumstances not comparable to those present in this case. Among other things, in Belchevski there was clear evidence from the lawyer who arranged the transfer that the transferors understood, by entering into the joint tenancy, that they would lose exclusive control over the property during their lifetimes: Belchevski, at para. 21. There was no evidence of any such understanding on the part of Mr. Jackson, and the application judge was entitled to accept Mr. Jackson’s evidence that he received no such advice.
(ii) A Gift of the Right of Survivorship Unaccompanied by a Gift of Beneficial Rights During the Donor’s Lifetime is Recognized in Law
41The application judge reached the factual conclusion that Mr. Jackson’s intention was to give the home to Ms. Rosenberg upon his death but to give her no rights in it during his lifetime. This factual conclusion led him to the legal conclusion that that there was a gift of the right of survivorship but that all other rights relating to the joint tenancy interest in Ms. Rosenberg’s name were held in trust by her for Mr. Jackson. That was the correct legal conclusion.
42A gratuitous transfer engages the presumption of resulting trust, under which the transferee is obliged to return the interest transferred to the original title holder: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20. In other words, although a gratuitous transfer of a joint interest gives legal ownership of that interest to the transferee, it is presumed to be held in trust for the transferor who remains the beneficial or “real” owner of the interest: Pecore, at paras. 3-4, citing Csak v. Aumon (1990), 69 D.L.R. (4th) 567 (Ont. H.C.), at p. 570.
43The 2012 transfer to Ms. Rosenberg of a joint tenancy interest was gratuitous. The entire interest transferred to her, with all its attributes, was presumed to be held in trust for Mr. Jackson.
44Showing that a gift was intended rebuts the presumption of resulting trust: Pecore, at para. 24. But the authorities establish that in the case of property transferred gratuitously from the owner into joint names, a showing that a gift was intended, not of any current rights but solely of what remains of the property upon death of the transferor, only partially rebuts the presumption. The result is a gift only of the right of survivorship, not of any rights exercisable during the transferor’s lifetime. The latter rights are held in trust for the transferor.
45In Pecore, Rothstein J. recognized that a person could gratuitously place assets into a joint account with the intention of retaining exclusive control of the account until his or her death, at which time the transferee would take the balance through survivorship. He held that courts can give effect to this intention. The result is an inter vivos gift of the right of survivorship, even though the transferor has retained the right to deplete the account. The gift is of whatever remains in the account at the time of the transferor’s death: at paras. 47-52; see also paras. 63-66.
46In Bergen v. Bergen, 2013 BCCA 492, 52 B.C.L.R. (5th) 258, the court rejected the proposition that gratuitously placing real property into joint tenancy accompanied by an intention that the transferee will take the property on death of the transferor in itself constitutes a gift of an immediate beneficial interest in the property itself: at paras. 36 and 42. The court quoted with approval, at para. 42, a passage from Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Carswell, 2012) that explained that an intention that the transferee take the benefit of the property if predeceased by the transferor only partially rebuts the presumption of resulting trust.
47In MacIntyre v. Winter, 2021 ONCA 516, 158 O.R. (3d) 321, this court applied these principles. In that case, the appellant (Alex) had purchased homes with his own funds, and then placed them into joint tenancy with the respondent (Ron). The court held that the trial judge erred in finding that Alex’s intention, which was to have Ron receive the homes on his death, was sufficient to entirely rebut the presumption of resulting trust with respect to all rights arising from their sale during their joint lives, such as the right of Alex to receive what he had paid for their acquisition. At para. 33, the court stated:
The trial judge erred in extrapolating from the fact of joint tenancy, entered into with the intention of Ron taking a right of survivorship in the homes, to a finding of an intention to gift Ron the funds contributed by Alex for the acquisition of the homes. The point that a right of survivorship alone is not sufficient to rebut the presumption of a resulting trust that operates during the parties’ joint lives is clearly made in Mark Gillen, Lionel Smith & Donovan W.M. Waters, Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Thomson Reuters Canada, 2012), at § 10.II.B.2 (WL):
If A supplies the purchase money and conveyance is taken in the joint names of A and B, B during the joint lives will hold his interest for A; B will also hold his right of survivorship—again by way of a resulting trust—for A's estate, because that right is merely one aspect of B's interest. In other words, the starting point is that B holds all of his interest on resulting trust for A, or A's estate. However, evidence may show that, while A intended B to hold his interest for A during the joint lives, it was also A's intention that, should he (A) predecease, B should take the benefit of the property. The presumption of resulting trust would then be partially rebutted, in relation to the situation that has arisen, so that B would not hold his interest (now a sole interest and not a joint tenancy) on resulting trust. He would hold it for his own benefit. [Footnote omitted.] [Emphasis added.] 5
(iii) Conclusion
48The result reached by the application judge correctly flowed from his factual findings about intent. It was consistent with the law. Accordingly, I reject the argument that the application judge made any error in determining the effect of the 2012 transfer.
(2) The Application Judge Did Not Err in Determining that Mr. Jackson Retained the Right to Sever
49A gift, once made, cannot be revoked: Abdollahpour v. Banifatemi, 2015 ONCA 834, at para. 36, citing Berdette v. Berdette (1991), 81 D.L.R. (4th) 194 (Ont. C.A.), at pp. 200-201, leave to appeal refused, [1991] S.C.C.A. No. 306. Ms. Rosenberg submits that if the effect of the 2012 transfer was a gift of a right of survivorship, it must follow that Mr. Jackson could not sever the joint tenancy. Severance terminates a right of survivorship: Hansen Estate v. Hansen, 2012 ONCA 112, 109 O.R. (3d) 241, at paras. 34-35. Permitting severance would, in effect, permit the revocation of the gift of the right of survivorship. Accordingly, Ms. Rosenberg submits that the application judge erred in finding that the 2020 transfer had any effect on Ms. Rosenberg’s right of survivorship, that is, her right to take the benefit of the entire property on Mr. Jackson’s death. 6
50Ms. Rosenberg adds that Ontario property law does not allow for a right of survivorship to exist in the absence of a joint tenancy. There was no basis for the application judge to find both that the 2020 transfer severed the joint tenancy and that a right of survivorship continued over a 50% share of the property. The error was in considering that the joint tenancy had been severed. 7
51I do not accept the principal component of Ms. Rosenberg’s argument. In my view the application judge was right to find that Mr. Jackson maintained the right to sever the joint tenancy after the 2012 transfer even though to do so would end the right of survivorship.
52I reach this conclusion for three related reasons.
53First, it is inherent in a joint tenancy that each joint tenant has the unilateral right to sever it at anytime, thereby ending the right of survivorship. In Hansen Estate, at para. 32, Winkler C.J.O. cited the classic statement from the English case of Williams v. Hensman (1861), 70 E.R. 862 (Eng. Ch.)8 concerning the three ways in which severance could occur to end the right of survivorship. One of them is that “[e]ach [joint tenant] is at liberty to dispose of his own interest in such manner as to sever it from the joint fund—losing … at the same time, his own right of survivorship”. At para. 34 of Hansen Estate, this mode of severance was described as “unilaterally acting on one’s own share, such as selling or encumbering it”. 9
54I see no basis, in applying this statement, to distinguish between joint tenancies created for consideration and those created gratuitously. Were an owner of land to sell an interest and create a joint tenancy with the purchaser, what was sold would include a right of survivorship (as well as a current beneficial interest in the property). Similarly, if two people acquire property, each contributing financially to the acquisition, and place it in joint tenancy, each would have a right of survivorship and a current beneficial interest. Yet absent an agreement between them preventing severance, the original owner in the first example would be free to unilaterally sever the joint tenancy (as would the purchaser), ending both of their rights of survivorship, and each joint tenant in the second example would have a right to sever and end all rights of survivorship. It is difficult to see why a gifted right of survivorship would prevent the donor joint tenant from exercising a right to sever when the same right, transferred or acquired for consideration, would not.
55Second, the right of survivorship is entirely contingent on there being no severance. That is the very nature of the right. In the classic statement adopted in Hansen Estate, at para. 32, it was described as follows: “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 [it]” (emphasis added). To adopt the view that a gifted right of survivorship precludes severance is to change the nature of the right.
56Third, there is the nature of the gift itself. As the court held in Pecore, at para. 50, the gift of the right of survivorship is only of what remains when the transferor dies; this meant in Pecore that the transferor was free in the meantime to dissipate the jointly held bank account. In other words, the gift of the right of survivorship does not, on its own, prevent dealings by the donor that could denude the right of any value. 10 In Simcoff, and cases that have followed it, courts have applied this reasoning to land, observing that a gift of the right of survivorship does not prevent the donor from dealing with the retained joint interest – for example by exercising the right to sever – in a way that puts an end to the right of survivorship: Simcoff, at para. 64; see also Bergen, at paras. 40-41; McKendry v. McKendry, 2017 BCCA 48, 93 B.C.L.R. (5th) 215, at paras. 27-30; and Herbach v. Herbach Estate, 2019 BCCA 370, 28 B.C.L.R. (6th) 360, at para. 37 where the court observed that an inter vivos transfer of a right of survivorship is properly characterized as a gift “even though there was a possibility that severance of the joint tenancy could rob the gift of any value”.
57It follows that the application judge did not err in following the statements in Simcoff, at para. 63, that a gift of a joint tenancy interest in land did not prevent the donor from severing the joint tenancy and putting an end to the right of survivorship, or, at para. 64, that there is nothing in the right of survivorship that somehow prevents the donor joint tenant from severing the joint tenancy and ending the right of survivorship. 11 Regardless of whether these statements were necessary to the result in Simcoff, they are correct. The gift in Simcoff was of a joint tenancy interest that included current beneficial rights and a right of survivorship. I see no reason why the same result would not follow when the gift is only of a right of survivorship with no gift of beneficial rights during the transferor’s lifetime, as is the case here.
58Like the application judge, I do not view the decision of the Saskatchewan Court of Appeal in Thorsteinson Estate to reflect the law of Ontario to the extent it holds that after gifting a joint tenancy interest that includes a right of survivorship, the donor cannot sever the joint tenancy. The decision does not address the reasons that militate against that conclusion, addressed above at paras. 51-56. Moreover, Thorsteinson Estate is distinguishable.
59First, unlike in Ontario, s. 156 of Saskatchewan’s Land Titles Act, 2000, S.S. 2000, c. L-5.1, prevents a joint tenant from unilaterally effecting a transfer to sever a joint tenancy. The implication of this provision is that “a joint tenancy with respect to land can only be terminated in Saskatchewan by written agreement of the joint tenants or by court order”: Thorsteinson Estate, at para. 63. Second, although in Thorsteinson Estate a donor had commenced an application for severance, a court order authorizing a severance within the meaning of s. 156 was not obtained before the donor died. Thus, the request by the donor’s estate that the court grant a severance was made after the right of survivorship had been triggered. The court noted this as one feature distinguishing Simcoff, and in this context stated, at paras. 66-67:
Moreover, the facts in Simcoff were significantly different than those of the case now before this Court, as in Simcoff, both joint tenants were living.
[The donor’s] application for severance of the joint tenancy should have been dealt with by the trial judge on its merits. However, the trial judge’s conclusion that [the donor] had gifted [the donee] joint ownership of the land is, in my view, determinative of the severance application, as her gift included the right of survivorship. This was explained by Rothstein J. in Pecore:
Some judges have found that a gift of survivorship cannot be a complete and perfect inter vivos gift because of the ability of the transferor to drain a joint account prior to his or her death … The nature of a joint account is that the balance will fluctuate over time. The gift in these circumstances is the transferee’s survivorship interest in the account balance — whatever it may be — at the time of the transferor’s death, not to any particular amount.
Having gifted the right of survivorship, [the donor] could not take it back. [Emphasis added by the Sask. C.A.]
60Nor do I consider the decision of the Alberta Court of Appeal in Pohl to undermine the result reached by the application judge or to assist Ms. Rosenberg. In her first instance reasons in Pohl12, the trial judge, after discussing Simcoff, Bergen, Pecore and Thorsteinson Estate, appears to have rejected two rigid positions: (i) that a gift of a joint tenancy interest always preserves the donor’s right to sever, and (ii) that such a gift never allows the donor to sever. Instead, she stated that the presumption is that a gift of a joint tenancy interest leaves intact the donor’s right to sever, but that the presumption can be rebutted by evidence of the donor’s commitment never to sever. She said, at para. 52:
The analysis will become a factual analysis as to what the intention of the parent/transferor was at the time the joint tenancy was created. That was the case in Pecore, and that is the situation here. There is a presumption that the right of survivorship is given with the joint tenancy in a “normal” way, preserving the ability of the [transferor] to sever. But that presumption can be rebutted by evidence that the intention of the transferor was to give an irrevocable right of survivorship which would prevent the transferor from applying to sever the joint tenancy in the future.
61That was the approach the trial judge in Pohl applied to the case before her. She found that the evidence rebutted “the prima facie position that nothing prevents the transferor from dealing with the joint interest while alive” and drew an inference that the transferors had given up their right to sever: at paras. 63-64.
62In its decision the Alberta Court of Appeal endorsed that approach. They rejected the argument that, as a matter of law, a right of survivorship could never be irrevocably gifted (in the sense of the donor having given up the right to sever), drawing an analogy to the ability of a joint tenant to contract out of the presumptive right to sever: at para. 6. The court noted that “[t]he trial judge concluded, based upon Pecore and having regard to the fact that the respondent was a gratuitous transferee within that case, that there was a presumption – namely that the right to sever was not relinquished by the donor along with the grant of joint survivorship – that could be rebutted depending on the donor’s intention”, and that the factual finding that the presumption had been rebutted was not challenged: at para. 11. The court held that in doing so, the trial judge applied the reasoning in Pecore and properly extended it to the facts that were before her: at para. 14.
63However, even applying the approach in Pohl to this case, the application judge’s conclusion that Mr. Jackson retained the right to sever is unaffected. Under that approach it was possible for Mr. Jackson in the 2012 transfer to gift a right of survivorship without relinquishing his right, during his lifetime, to sever. He would only relinquish that right if he intended to do so. And the rebuttable presumption would be that he did not intend to relinquish the right to sever.
64The application judge’s findings of fact do not permit the conclusion that the presumption that Mr. Jackson did not intend to relinquish his right to sever was rebutted. The application judge found an intention to gift the right of survivorship, but no intention to gift any rights exercisable in connection with the property during Mr. Jackson’s lifetime. Addressing himself specifically to a point made in Pohl, he stated that “[w]hile joint tenants can agree by contract that they will not sever the joint tenancy, no such agreement exists in this case, and I am not prepared to infer (as was the trial judge in Pohl) that such a restriction should be implied.”
65Accordingly, I see no error in the application judge’s conclusion that following the 2012 transfer, Mr. Jackson maintained the right to sever the joint tenancy and that the 2020 transfer effected such a severance.
(3) Should the Application Judge’s Order Regarding the Right of Survivorship Continuing over a 50% Interest Be Varied?
66Both parties submit that the application judge was wrong to conclude that the right of survivorship could continue in effect as to a 50% interest in the property if a joint tenancy ceased to exist. In Hansen Estate, at paras. 30-31, this court observed as follows:
Ultimately, the critical distinction between [a joint tenancy and a tenancy in common] … is the right of survivorship ….
Through the right of survivorship, the interest of a co-owner in a joint tenancy will pass equally to all of the other co-owners upon his or her death. If multiple co-owners remain, the joint tenancy remains in existence, while if only one owner survives, the entire interest in the property passes to the survivor. In contrast, upon the death of a co-owner in a tenancy in common, the deceased’s interest in the property passes to his/her estate. [Emphasis added; internal citations omitted.]
67Before the 2020 transfer, Ms. Rosenberg held her interest in the joint tenancy in trust for Mr. Jackson, and she had a right of survivorship. As the joint tenancy was severed in the 2020 transfer, what Ms. Rosenberg continued to hold was an interest in a tenancy in common in trust for Mr. Jackson. No right of survivorship could attach to or flow from that interest.
68Although Mr. Jackson has not formally cross-appealed, he does take issue with the application judge’s holding that Ms. Rosenberg has a right of survivorship following the severance of the joint tenancy. Ms. Rosenberg also submits that a right of survivorship could not exist under a tenancy in common.
Disposition
69Accordingly, I would dismiss the appeal.
70I would invite the parties to make written submissions, not exceeding three pages each, as to whether any changes to the formal judgments of the application judge are appropriate as a result of his erroneous holding that any right of survivorship subsisted following the 2020 transfer. The submissions of Mr. Jackson shall be made within ten days of the release of these reasons; those of Ms. Rosenberg shall be made within ten days thereafter.
71I would award costs of the appeal to Mr. Jackson in the sum of $6,418.76, inclusive of disbursements and applicable taxes.
Released: December 4, 2024 “K.M.v.R.” “B. Zarnett J.A.” “I agree. K. van Rensburg J.A.” “I agree. George J.A.”
Footnotes
Footnotes
- Partition Act, R.S.O. 1990, c. P.4, ss.2 and 3.
- The application judge also rejected an argument of Ms. Rosenberg that she was entitled to 100% of the property upon Mr. Jackson’s death under the doctrine of mutual wills. Ms. Rosenberg does not appeal the rejection of her mutual wills claim.
- It is one thing for parties to agree to make wills in a certain way. But an enforceable agreement arises only if the parties also agree that they will not revoke the wills. The application judge found there was no evidence of an agreement by Mr. Jackson not to revoke.
- Nor is it clear (i) how Ms. Rosenberg would be subject to capital gains taxes on a sale during Mr. Jackson’s lifetime if she held her interest during Mr. Jackson’s lifetime in trust for him, or (ii) that her capital gains tax exposure would be different if she acquired the home upon his death by right of survivorship compared to if she inherited it under Mr. Jackson’s will.
- This is the same passage in Waters’ Law of Trusts that was cited with approval in Bergen, at para. 42.
- Ms. Rosenberg also challenges the application judge’s characterization of the 2020 transfer on the basis that “the severance of the gift of joint tenancy” should not give rise to a resulting trust. However, this submission overlooks the application judge’s finding that the presumption of resulting trust applied equally to the 2012 and 2020 transfers and had not been rebutted in respect of either.
- Mr. Jackson agrees that there was an error in this finding, but he says the error was in finding the right of survivorship subsisted at all after the severance of the joint tenancy – a severance he says was perfectly valid.
- (1861), 70 E.R. 862 (Eng. Ch.).
- There is no issue in this case that severance may be effected under this mode by a transfer to oneself with the intention to sever: Simcoff, at para. 65.
- Ms. Rosenberg’s attempt to distinguish Pecore is unpersuasive. She argues that real estate is different from bank accounts in that joint bank accounts typically allow any of the account holders to draw on the account without consent, whereas co-owners of real estate require each other’s consent before they encumber the property. But the application judge found that Mr. Jackson was free during his lifetime to deal with the home, including selling or encumbering it, because during his lifetime Ms. Rosenberg held the interest transferred to her in trust for him. Accordingly, he did not need her consent to sell or encumber – she was bound as a trustee to provide it.
- In Simcoff, the court referred to the right to sever and end the right of survivorship sometimes as a “prima facie right” and other times in more absolute terms: see paras. 61-64. The court did not discuss what would displace the prima facie right.
- Pohl v. Midtal, 2017 ABQB 711, 62 Alta. L.R. (6th) 229.
