Court File and Parties

COURT FILE NO.: CV-23-00001428-00ES DATE: 20240904 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

YVONNE MARIE CLEMENTS Applicant – and – ESTATE OF KATHERINE JEAN EVERSON, and KELLY JEAN EVERSON, SHANE EVERSON, and KEVIN EVERSON, in their capacity as estate trustees of the Estate of Katherine Jean Everson Respondents

Counsel: Alissa N. Winicki, for the Applicant Michael J. Bolotenko, for the Respondents

HEARD: July 4, 2024

Reasons for Decision

CASULLO J.:

Overview

[1] The applicant, Yvonne Clements, seeks a declaration that title of the property located at Part Lot 18, Concession 2 (“Thorah”) be restored in her favour pursuant to a joint tenant ownership. In the alternative, the applicant seeks an order declaring that the respondents have been unjustly enriched given her contributions to Thorah.

Background

[2] Given the potential for confusion, once they have been identified, I will use the parties’ given names throughout these reasons. No disrespect is intended.

[3] Yvonne is one of seven children of the late John and Mildred Clements.

[4] Katherine Everson was another of the seven children of John and Mildred.

[5] The respondents, Kelly Everson, Shane Everson, and Kevin Everson are the children of Katherine Everson.

[6] John and Mildred purchased Thorah in 2000. Title was registered to John and Mildred, as well as one of their daughters, Mary Clements, as joint tenants.

[7] In 2001, title in Thorah was transferred to John, Mildred, Yvonne and Katherine, as joint tenants.

[8] In 2004, John, Mildred, Yvonne and Katherine entered into a trust agreement. Yvonne and Katherine became the trustees of Thorah; John and Mildred remained the beneficial owners. While the trustees held a one-half registered title to Thorah, they held their interest in trust for their parents, who had exclusive right to the use of Thorah. Yvonne and Katherine’s interest was transferred to them as joint tenants.

[9] Pursuant to the trust agreement, if either John or Mildred predeceased Yvonne or Katherine, the estate of the remaining parent continued as the true beneficial owner of Thorah. The remaining parent’s estate therefore governed the disposition of Thorah.

[10] Mildred died in 2007. In 2009, her name was removed from title pursuant to a survivorship application. John, Yvonne and Katherine were listed as surviving joint tenants of Thorah.

[11] Yvonne and Katherine paid rent to John until he passed in 2016.

[12] Given that Mildred died first, John’s will was the authority on the subsequent ownership of Thorah. Subparagraph II.B. of the will directed John’s trustees to,

[G]rant, quit claim and release to my said daughters, KATHERINE JEAN EVERSON and YVONNE MARIE CLEMENTS, the said described property for their own use absolutely. In the event that either of KATHERINE JEAN EVERSON and YVONNE MARIE CLEMENTS should desire to acquire the other person’s interest in the subject property, they are at liberty to do so and become the sole owner of the property. In the event that both of my daughters, KATHERINE JEAN EVERSON and YVONNE MARIE CLEMENTS, predecease me, this gift and devise shall lapse and the property shall be included in the residue of my estate and dealt with accordingly.

[13] By way of a survivorship application, John’s name was removed from title in 2016. The resulting instrument reflects that Yvonne and Katherine took title to Thorah as joint tenants.

[14] Katherine passed away on August 6, 2021.

Thorah

[15] It would be instructive at this juncture to provide a description of Thorah, and the living arrangements of Yvonne and Katherine.

[16] The property itself consists of 4.8 acres of land with two modest dwellings. Yvonne and Katherine each lived in one of the dwellings. Katherine’s home was first after entering the property; Yvonne had to drive past Katherine’s home to get to hers.

[17] John’s early efforts to sever the property were unsuccessful due to limited water and road access. The only access to drinking water was via a well located in front of Katherine’s home. Yvonne’s home did not have its own water supply, and she was dependent on the plumbing from Katherine’s home. Katherine’s home also contained the water softener and water purification systems.

[18] There are varying versions of who paid the carrying costs of Thorah before Katherine’s death.

Joint Line of Credit

[19] In 2016, black mold was discovered in Katherine’s home, causing her to move out while extensive renovations were undertaken. Katherine could not afford to cover the repair costs, and could not qualify for a loan on her own. Accordingly, Yvonne and Katherine obtained a joint line of credit for $50,000, secured against Thorah.

[20] As of May 2023, the line of credit amounted to $25,856.13. Since Katherine’s death, Yvonne has been responsible for all payments.

A Wrinkle in Time

[21] Up to the date of Katherine’s death, ownership of Thorah appeared to be straightforward. In other words, upon her passing, Thorah would presumptively pass to Yvonne by way of right of survivorship.

[22] However, in 2015, Yvonne assigned herself into bankruptcy. Kevin Thatcher & Associates (“Thatcher”) was appointed the trustee in bankruptcy. As part of the application for bankruptcy, Yvonne assigned her interest in Thorah to Thatcher. In so doing, the joint tenancy was severed, and Thatcher held an undivided, one-half interest in Thorah. Katherine held the other one-half interest. In other words, Thatcher and Katherine held title as tenants in common.

[23] For reasons that are not relevant to this application, the assignment was not registered until 2021, just before Katherine’s death.

[24] In March of 2022, a consumer proposal was entered into, addressing satisfaction of Yvonne’s debt.

[25] On July 6, 2022, Thatcher registered a notice of disclaimer on title to Thorah, which read in part:

This notice is pursuant to Section 71 of the Land Titles Act

Schedule: Kevin Thatcher & Associates Ltd., Licensed Insolvency Trustee, Trustee of the Estate of Yvonne Clements, one of the registered owners of the herein described lands, hereby applies under Section 71 of the Land Titles Act to have registered a Notice of Disclaimer to divest Kevin Thatcher & Associates Ltd., of its interest and the said parcel to be amended to show the name of the registered owner of its interest to Yvonne Clements.

[26] On August 25, 2022, Thatcher confirmed that Yvonne’s consumer proposal was fully performed, and the trustee in bankruptcy disclaimed.

[27] On October 28, 2022, a Land Registrar’s Order requested that the ownership field of Thorah be amended to remove Thatcher and add Yvonne’s name back in, pursuant to the notice of disclaimer.

[28] The parcel abstract for Thorah, dated October 28, 2022, was amended as follows:

Schedule: In the matter of title of the selected PIN the Land Registrar orders pursuant to Subsection 158(2) of the Land Titles Act that the Ownership Field be amended to remove KEVIN THATCHER & ASSOCIATES LTD., IN BANKRUPTCY and add CLEMENTS, YVONNE, pursuant to Notice of Disclaimer DR2150551 registered 2022/07/06.

[29] While the Land Registrar’s Order restored title as requested, the “capacity” section of the parcel abstract is left blank. That is, there was no notation as to whether Yvonne and Katherine held title as joint tenants, or tenants in common.

Estate of Katherine Everson

[30] Pursuant to an application for a Certificate of Appointment of Estate Trustee with a Will, Kelly is the trustee for her mother’s estate.

[31] Katherine’s will left the residue of her estate to be divided into three equal parts between Kelly, Shane, and Katherine’s cousin, Donna Clements.

[32] Katherine’s will specifically did not list as beneficiaries her son, Kevin Everson, or her late daughter’s children.

The Issues

[33] Were Yvonne and Katherine to own Thorah as joint tenants, or tenants in common?

Positions of the Parties

[34] Yvonne submits that it was her parents’ wish to gift each of their seven children with one of their properties in Beaverton. This wish was made clear to all of their children over the years. The understanding was that these properties were not to pass to any of the siblings’ spouses, common law partners, children or grandchildren.

[35] Pursuant to the subject trust agreement, Yvonne and Katherine were to become the eventual beneficial owners of Thorah pursuant to a joint tenancy with the right of survivorship. Yvonne submits the intention to gift a joint tenancy is clear from the provision in John’s will that either sister could acquire the other’s interest.

[36] Thus, the issue is a simple one. Yvonne and Katherine carried out John’s intention, and they took title to Thorah as joint tenants. Yvonne’s bankruptcy severed the joint tenancy, and Thatcher failed to ensure that ownership of Thorah was restored to Yvonne and Katherine as joint tenants. The solution, Yvonne submits, is a simple one, being a court order which restores the joint tenancy.

[37] Kelly too would describe the issue as a simple one. She submits that John intended Yvonne and Katherine to take title to Thorah as tenants in common. The fact that Yvonne and Katherine took title as joint tenants was contrary to John’s intentions, and the court should uphold the current ownership of Yvonne and Katherine which, as stated in the parcel register, is as tenants in common.

[38] In support of this argument, Kelly submits that the words “for their own use absolutely” in subparagraph 11.B. of John’s will emphasize the singular possessive, not plural. In other words, Thorah did not belong to Yvonne and Katherine together, but to each of them, individually, by way of a one-half interest.

[39] Further, John’s intention that Yvonne or Katherine could acquire the other’s interest contradicts the presumption of joint tenancy. The nature of a joint tenancy is such that each holds the property as a unified whole. The nature of a tenancy in common is that the tenants take an undivided interest. It is in this way that one tenant in common can acquire title from the other.

The Evidence

[40] As this is an application, the court did not receive the benefit of viva voce evidence.

[41] Yvonne was subject to a very brief cross-examination on her affidavit, and asked only the following questions:

• Whether it was her signature on the signature page;
• Whether she discussed her evidence with anyone before attending the examination;
• Whether she was referring to John’s will in paragraphs 15 and 16 of her affidavit; and
• Whether there was any other document, after the will was executed, in which John discussed his wishes with regard to what would happen to Thorah after he died.

[42] Three of Yvonne’s sisters also filed affidavits: Julie Cunningham, Jean Clements, and Victoria Schnurr. They were not cross-examined.

[43] Julie’s affidavits supports Yvonne’s submission that John and Mildred acquired properties with the intention of giving one to each of their children, as well as the position that any property gifted by John and Mildred was not to pass to any of their grandchildren.

[44] Jean’s affidavit supports Yvonne’s submission that John and Mildred acquired properties with the intention of giving one to each of their children.

[45] Victoria’s affidavit provides background into Yvonne’s bankruptcy, and her dealings with Thatcher, as she was one of Yvonne’s attorneys for property.

[46] Kelly was not cross-examined on her affidavit. While she provided background and colour to the narrative, Kelly could not speak to the manner in which John intended Yvonne and Katherine to take title to Thorah. She did, however, paint a picture of a family at odds with one another. There had been a falling out among various factions of the siblings, and Katherine’s relationship with Julie, Jean and Victoria was non-existent at the time of her death.

[47] Yvonne and Katherine appear to have led separate lives on Thorah, and had not communicated with one another for a number of years. Since Katherine’s death, Kelly has been paying her mother’s share of the carrying costs for Thorah.

[48] Both sides produced documentation to support their views on how Yvonne and Katherine took title to Thorah. Yvonne relies on the survivorship applications from 2009 and 2016, which indicate that Yvonne and Katherine were joint tenants.

[49] Kelly relies on a parcel register dated October 26, 2023, which listed Yvonne and Katherine as “TCOM” (denoting tenants in common) in the capacity field.

[50] There is also a parcel register dated August 8, 2022, which listed Katherine as an owner with nothing entered into the capacity field, and Thatcher as an owner, with “TBKR” (denoting trustee in bankruptcy) entered into the capacity field.

[51] As noted above, the October 28, 2022 parcel register documenting Thatcher’s removal from title and restoring Yvonne as an owner, left the capacity field blank for both Yvonne and Katherine.

Analysis and Findings

[52] Subsection 13(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C. 34 (the “CLPA”) governs devises of property to two or more people under, inter alia, a will:

Where by any letters patent, assurance or will, made and executed after the 1st day of July, 1834, land has been or is granted, conveyed or devised to two or more persons, other than executors or trustees, in fee simple or for any less estate, it shall be considered that such persons took or take as tenants in common and not as joint tenants, unless an intention sufficiently appears on the face of the letters patent, assurance or will, that they are to take as joint tenants.

[53] In Hardy v. The Estate of Louise Winters Hardy, 2022 ONSC 1966, 78 E.T.R. (4th) 320, at para. 13, Leach J. provided helpful background to the evolution of s. 13(1) of the CLPA:

a. Through long-standing principles of common-law, when real property or personal property was granted to two or more persons with no words of severance, the persons were considered joint tenants, with a right of survivorship in relation to the property.

b. However, it was also well established that the Courts of Equity did not favour joint tenancy; e.g., because the entire property subject to such a joint tenancy at common law would belong to the survivor, and the representatives of the deceased would receive nothing. Such an outcome was not viewed as fair or “equitable”, except – possibly - from the standpoint of pure chance determining which owner would take by right of survivorship.

c. Equity therefore always leaned in favour of tenancy in common, rather than joint tenancy, and over time developed a rule of construction that effectively reversed the common law presumption in such cases. In particular, when real or personal property was granted to two or more persons, in the absence of an express declaration as to the beneficial interest, Courts of Equity would treat the persons as tenants-common of the beneficial interest, and any party entitle [entitled] to the whole estate by right of survivorship at common law was required to hold the deceased owner’s erstwhile share of the property in trust for the representatives of the deceased. The practical result was a presumption of tenancy in common, rather than a joint tenancy, in the case of any grant to two or more persons without an express indication that they were to receive title as joint tenants.

d. In time, legislatures embraced the rule of construction developed by the courts of equity. Here in Ontario, that embrace and restatement currently takes the form of subsection 13(1) of the Conveyancing and Law of Property Act.

[54] John’s will, the document through which Thorah was conveyed, did not provide an express declaration as to the beneficial interests of Yvonne and Katherine. Thus, Yvonne and Katherine must be taken to have received the property as tenants in common. There is nothing before me to rebut this presumption.

[55] For example, different parcel registers provide different capacity notations. Counsel could provide no reasonable explanation when I asked why one parcel register kept the capacity section blank, and yet others listed capacity. This was described as a mystery. I cannot then rely on the parcel registers as being definitive source documentation outlining how title to Thorah was held.

[56] Likewise, Yvonne and Julie’s submission that any property gifted by John and/or Mildred was not to pass to any spouses or grandchildren, but instead be absorbed by the remaining siblings, is not supported by the evidence. If this position were accurate, surely the will of at least one of the surviving six siblings would contain a provision to this effect. Such evidence could have easily been provided to the court.

[57] Given my finding that Yvonne and Katherine should have taken title to Thorah as tenants in common ab initio, I need not consider the other arguments advanced by counsel. For example, there was no joint title to rectify following Yvonne’s petition into bankruptcy and the severance of the joint tenancy to a tenancy in common. The interest on title at the time of Yvonne’s bankruptcy was properly tenants in common. If it reflected a joint tenancy with right of survival, this was a mistake on both Yvonne’s and Katherine’s part.

[58] Similarly, there is no need to analyse and interpret John’s will to tease out his intentions. Both sides argued that the condition that Yvonne and Katherine could acquire the other’s interest in Thorah and become sole owners supported their own positions: to Yvonne, this meant John intended a joint tenancy; to Kelly, this indicated John’s intention to convey Thorah to Yvonne and Katherine as tenants in common. The fact remains that John’s will failed to specify how Yvonne and Katherine were to take ownership, and the presumption against tenants in common has not been rebutted.

Unjust Enrichment/Line of Credit

[59] If I were to find that Yvonne and Katherine held title to Thorah as tenants in common, Yvonne submits that Katherine’s estate has been unjustly enriched by not contributing sufficiently to the carrying costs of Thorah from the date of Katherine’s death to the present. Yvonne further submits that Katherine’s estate should be responsible for satisfying the line of credit from its one-half share of Thorah upon its eventual sale.

[60] Kelly submits that the court should direct a reference to determine what the respective parties contributed to the carrying costs of Thorah, as well as the responsibility of the line of credit.

[61] This matter has already consumed more than its fair share of legal fees and judicial resources, not to mention the emotional toll to the parties. A reference is not necessary, as the movement forward to the finish line is a simple mathematical exercise.

[62] The carrying costs of Thorah should be born by both Yvonne and Katherine’s estate. Each of Yvonne and Kelly can provide a spreadsheet setting these expenses out.

[63] Responsibility for the line of credit is also easily determined. Yvonne submits that the entirety of the money borrowed went to repairs to Katherine’s home. Kelly submits that a portion of the money went towards new plumbing and repairs to Yvonne’s roof. Again, a spreadsheet setting out where the monies were expended will assist in determining how much Yvonne must pay toward the line of credit, and how much Katherine’s estate must pay.

[64] Yvonne has made payments to the line of credit following Katherine’s death. If it is determined that she did not utilize any of the $25,000, either personally or for her home, then she is entitled to be reimbursed for said payments.

Conclusion

[65] Yvonne and Katherine acquired ownership to Thorah by way of a tenancy in common. Accordingly, upon Katherine’s death, her one-half interest fell into her estate.

[66] The carrying costs of Thorah following Katherine’s death shall be borne by Yvonne and Katherine’s estate in proportion to their respective contributions.

[67] Likewise, satisfaction of the line of credit is to be determined based on what portion of the $25,000 has been used by Yvonne and Katherine’s estate.

Costs

[68] This is an unusual situation. The predicament the parties find themselves in can be traced to the ambiguity in subparagraph II.B. of John’s will – to wit, how title to Thorah was to be conveyed. Typically, the estate would bear the costs of litigation based on such uncertainty.

[69] However, this is not an estate matter, hence there is no estate to turn to to recover costs.

[70] Because Yvonne and Katherine each bore the risks and benefits of taking title to Thorah as joint tenants instead of tenants in common, the burden of remedying the situation should be apportioned equally.

[71] Accordingly, in these particular circumstances, each party shall bear their own costs.

CASULLO. J. Released: September 4, 2024