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Severing a Joint Tenancy by Audio Recording ?

In the case of Hansen Estate v. Hansen, 2012 ONCA 112 (CanLII), 109 O.R. (3d) 241, at para. 32, the Ontario Court of Appeal endorsed three ways in which a joint tenancy may be severed,[1] referring to the classic statement by Vice-Chancellor Wood in Williams v. Hensman (1861), 70 E.R. 862, (Eng. Ch.), at p. 867:

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. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund — losing, of course, at the same time, his own right of survivorship. Secondly, a joint-tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been effected, as happened in the cases of Wilson v. Bell [(1843), 5 Ir. Eq. R. 501 (Eg. Eq. Exch.)] and Jackson v. Jackson [(1804), 9 Ves. 591 (Eng. Chancellor)].

Chief Justice Winkler continued in Hansen Estate at para. 34:

The three modes of severance referred to in Williams v. Hensman have come to be known as the “three rules” … [which] may be summarized as follows:

Rule 1:  unilaterally acting on one’s own share, such as selling or encumbering it;

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

Rule 3:  any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. (emphasis added)

I did not know about Rule 3.  This concept was applied recently in a unique way in Marley v. Salga 2019 ONSC 3527.

The deceased and his second wife purchased their matrimonial home jointly in 2004. In his Will prepared a month before his death the husband granted a life interest in the jointly owned matrimonial home to his wife. No changes to the ownership on title were made by the deceased prior to his death.

Justice Reid referenced Hansen Estate as above and indicated that “the equitable principle underlying the rule (Rule 3) is to prevent a party from asserting a right of survivorship where doing so would not do justice between the parties in cases where there is no explicit agreement to severed the joint tenancy. {22].”

The Court received evidence of a taped recording made by one of the deceased’s daughters of a conversation in the hospital between the deceased and his wife wherein the wife acknowledged the life interest and 50:50 ownership of the matrimonial home.

Within the recording the wife appears to confirm that she made the effort to have the will prepared in an effort to be fair to the deceased’s children from the first marriage. There appeared to be…

Based on the totality of the evidence, and in particular the recorded conversation, the Court found that the joint tenancy had been severed under Rule 3.

There is no indication why the severence did not occur on title when the will was prepared.

This may be a case of making the law fit the facts and should be applied with caution.

It is troubling that the recorded conversation was admitted and given weight. Far too often family members are resorting to cell phone recordings in highly stressed and emotional situations. These actions ought to be discouraged by the Courts.

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