Thompson v Elliott Estate, 2020 ONSC 1004 http://canlii.ca/t/j5rnj
A “zombie transfer” is a land transfer that is registered after the transferor’s death, as if the transferor were still alive. The Land Registry Office generally rejects these transfers.
Thompson v Elliott Estate is a recent case in which the court held that a severance of joint tenancy, which had become a “zombie transfer” due to a lawyer’s errors, was valid nonetheless. The decision considers precisely when a severance of joint tenancy can be held to have taken effect, and discusses what a transferor’s lawyer should do after having mistakenly delayed registration such that it has become posthumous.
The deceased (“Elliott”) had been married to the applicant (“Thompson”) until her death. The couple had purchased their matrimonial home as joint tenants.
Elliott was hospitalized several months before her death, and stayed in the hospital for the remainder of her life. Approximately one month before her death, she contacted a lawyer, and indicated that she wished to make a new will. When the lawyer visited her, she explained that her marriage had broken down, and that in addition to a new will that disinherited Thompson, she also wished to sever the joint tenancy in their home. She had already made new Powers of Attorney in favour of her adult children.
When Elliott executed the will, she noticed that her name had been misspelled. The lawyer later sent two staff members to have Elliott sign a corrected will, as well as an Acknowledgement and Direction to transfer her stake in the home so as to sever the joint tenancy.
After Elliott’s death, the lawyer discovered that, despite Elliott’s instruction to register the land transfer, the document had instead been left in her will file by mistake. The lawyer promptly registered the transfer anyway, making inaccurate “law statements” as if Elliott were still alive. Had the lawyer not made these inaccurate statements, the transfer would have been rejected.
Thompson was not aware that Elliott had executed any of the above documents until after Elliott’s death. He learned of the transfer when her estate trustees approached him to negotiate the sale of the home. The parties cooperated to sell the home, with the estate trustee’s falsely reporting the date of Elliott’s death so that it appeared to have occurred one day after the lawyer had registered the transfer. Thompson then commenced an application to determine his entitlement to the proceeds of the sale.
Elliott’s capacity was not an issue in the proceedings.
MacLeod-Beliveau J., found that the severance of joint tenancy was valid, and that Thompson was entitled to a 50% interest in the proceeds of the property as a tenant in common. The severance had taken effect when Elliott had signed the Acknowledgement and Direction, and then delivered it to the lawyer, unconditionally and with the instruction that it be immediately registered. Thompson’s application was dismissed.
MacLeod-Beliveau J., rejected Thompson’s argument that the severance of joint tenancy could only take effect when the transfer was registered. Instead, on review of the relevant caselaw and statutory provisions, she found that “[t]he law in Ontario… is settled and clear in that it is the delivery, and not the actual registration of the deed/transfer that determines if a joint tenancy has been severed.”
With regard to what constitutes “delivery,” MacLeod-Beliveau J. found that it was not merely the receipt by the lawyer of the signed Acknowledgement and Direction, but also Elliott’s indication that she intended to be “immediately and unconditionally bound” by the transfer. Elliott’s instructions had been clear, and although the lawyer had not immediately registered the transfer, Elliott’s intention had been that the lawyer would do so.
Whether a transferor’s actions constitute delivery is a question of fact, with the onus on the party seeking to uphold the purported severance? Elliott’s estate trustees provided sufficient evidence of delivery, such that the joint tenancy was severed.
How to Resolve a Lawyer’s Error
MacLeod-Beliveau J., helpfully noted that instead of registering the transfer after Elliott’s death, and making inaccurate “law statements” in the process, the lawyer should have:
[brought] an application in the Superior Court of Ontario requesting a certificate of pending litigation and a declaration of an interest in land and for a vesting order under s. 100 of the Courts of Justice Act, setting out all the material facts in support of the inadvertence and the circumstances as to the delivery of the transfer, in an application to be determined by the court.
S. 25 of the Land Titles Act compels the registrar to obey court orders in relation to registered land.
 2020 ONSC 1004
 RSO 1990, c L.5
This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.