Jackson v Rosenberg Appeal
1. Introduction
In 2023 I wrote a blog on Jackson v Rosenberg.[1] It is an important case because it addresses the question whether it is possible to make an irrevocable gift of the right of survivorship and the impact of the presumption of resulting trust. The Ontario Court of Appeal has now handed down its reasons for dismissing Ms Rosenberg’s appeal.[2] In this blog I shall briefly summarize the decision of the application judge, and then I shall discuss the reasons of the Court of Appeal.
2. Facts
Mr Jackson and Mr Taube were long-time romantic partners. Mr Taube died in 2010. He was Ms Rosenberg’s great uncle. In 2005 Mr Jackson and Mr Taube made mirror wills in which each named the other as the sole beneficiary of his estate and named Ms Rosenberg as substitute beneficiary. Mr Taube’s will was not probated because all his assets were owned jointly with Mr Jackson. In 2011 Mr Jackson sold their former home and purchased a new home in Port Hope with his own money. Ms Rosenberg did not contribute any money to purchase the home, and she never lived in it. In 2012, to avoid probate fees on the house, Mr Jackson transferred the title to himself and Ms Rosenberg as joint tenants. He testified that the lawyer he used for this purpose never informed him of the effects of a joint tenancy. In 2020, he became concerned about Ms Rosenberg’s plans for the house and took steps to regain full ownership of the property. So he instructed another lawyer to sever the joint tenancy and convert it into a tenancy in common. Then he brought an application for a declaration that Ms Rosenberg holds title on a resulting trust for himself and that he has full beneficial interest in the home. Ms Rosenberg brought her own application for a declaration that she is the beneficial owner of the home. The applications were dealt with together.
3. Decision at First Instance
The application judge found that, on the evidence as a whole, Mr Jackson intended to make a gift to Ms Rosenberg in 2012, but only of a right of survivorship in the property. Such a gift is an immediate gift but one that can be enjoyed only on the death of the transferor, and it is a gift only of what remains at the time of the transferor’s death Since the transfer to Ms Rosenberg was made without consideration, a presumption of resulting trust arose but the presumption was only partially rebutted, for Ms Rosenberg held her interest on a resulting trust for Mr Jackson during their joint lives. The application judge also held that Ms Rosenberg held no exercisable rights during her lifetime, that Mr Jackson continued to be entitled to encumber or sell the property if he wished, that he retained the right to sever the joint tenancy, and that the 2020 transfer did sever the joint tenancy. His Honour held further that this eliminated Ms Rosenberg’s right of survivorship with respect to Mr Jackson’s 50% interest in the property. However, he went on to hold that the 50% share Ms Rosenberg held in trust for Mr Jackson was not eliminated. Hence, to the extent that there remains any equity in the property when Mr Jackson dies and Ms Rosenberg survives, 50% of it would pass to her.
In reaching this conclusion, the application judge considered two lines of cases. One line was from Alberta and Saskatchewan, which holds that when the owner of property places the title into joint tenancy, he cannot unilaterally thereafter sever the joint tenancy.[3] The other line was from British Columbia and Manitoba, which holds that the right to sever remains in effect.[4] His Honour followed the case law from the latter two provinces.
Ms Rosenberg appealed. Mr Jackson did not formally cross-appeal.
4. The Decision on the Appeal
The Court of Appeal dismissed Ms Rosenberg’s appeal. Justice Zarnett, wrote the reasons for the court, with which van Rensburg and George JJA agreed.
Justice Zarnett held that the application judge was entitled to find on the facts that Mr Jackson intended to make a gift only of the right of survivorship, a finding that is subject to appellate deference. He also held that the argument that the transfer was made pursuant to an agreement between the parties or pursuant to alleged but unproved mutual wills between Mr Jackson and Mr Taub, failed for lack of supporting evidence. By reference to Pecore v Pecore,[5] his Honour also held that the application judge reached the correct conclusion on the facts that Mr Jackson intended to give Ms Rosenberg only a right of survivorship and no beneficial rights while he lived, and that the gratuitous transfer raised a presumption of resulting trust in favour of the transferor. Justice Zarnett also agreed with the application judge’s finding that Mr Jackson retained the right to sever the joint tenancy. He reached this conclusion for the following reasons: (1) It is inherent in a joint tenancy, absent an agreement between the parties, that each joint tenant has the unilateral right to sever the tenancy, whether the tenancy was created for compensation or was gratuitous. (2) According to Hansen Estate v Hansen,[6] ‘the right of survivorship is entirely contingent on there being no severance’ (para 55). (3) According to Pecore,[7] the nature of ‘the gift of the right of survivorship is only of what remains when the transferor dies’, and therefore the transferor retains the right to dispose of the property. Consequently, his Honour agreed with the British Columbia and Manitoba line of cases and disagreed with the Alberta and Saskatchewan line of cases, both referred to above.
However, Justice Zarnett took issue with the application judge’s conclusion that the right of survivorship continued in effect with respect to the 50% interest in the property even though the joint tenancy ceased to exist. His Honour stated:
[67] Before 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.
Both parties also argued the application judge erred on this issue, since a right of survivorship cannot exist under a tenancy in common.
Accordingly, Justice Zarnett invited the parties to make written submissions about whether any changes to the formal judgments of the application judge should be made because of his ‘erroneous holding that any right of survivorship subsisted following the 2020 transfer’ (para 70).
—
[1] 2023 ONSC 4403. See https://welpartners.com/blog/2023/11/can-you-make-an-irrevocable-gift-of-the-right-of-survivorship/.
[2] Jackson v Rosenberg, 2024 ONCA 875.
[3] Midtdal v Pohl, 2014 ABQB 646; Pohl v Midtal, 2017 ABQB, affirmed 2018 ABCA 403 (there is no explanation for the different spellings of the name of one of the parties); Thorsteinson Estate v Olson, 2016 SKCA 134.
[4] Simcoff v Simcoff, 2009 MBCA 80; Bergen v Bergen, 2013 BCCA 492; Zeligs v Janes. 2016 BCCA 280, para 41; McKendry v McKendry, 2017 BCCA 48, paras 27-30; Herbach v Herbach Estate, 2019 BCCA 370, para 37; Kennedy v Smith, 2022 BCSC 1622.
[5] 2007 SCC 17, para 20.
[6] 2012 ONCA 112, para 32.
[7] Footnote 5, supra, para 50.
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Written by: Albert Oosterhoff
Posted on: January 9, 2025
Categories: Commentary, Right of Survivorship
1. Introduction
In 2023 I wrote a blog on Jackson v Rosenberg.[1] It is an important case because it addresses the question whether it is possible to make an irrevocable gift of the right of survivorship and the impact of the presumption of resulting trust. The Ontario Court of Appeal has now handed down its reasons for dismissing Ms Rosenberg’s appeal.[2] In this blog I shall briefly summarize the decision of the application judge, and then I shall discuss the reasons of the Court of Appeal.
2. Facts
Mr Jackson and Mr Taube were long-time romantic partners. Mr Taube died in 2010. He was Ms Rosenberg’s great uncle. In 2005 Mr Jackson and Mr Taube made mirror wills in which each named the other as the sole beneficiary of his estate and named Ms Rosenberg as substitute beneficiary. Mr Taube’s will was not probated because all his assets were owned jointly with Mr Jackson. In 2011 Mr Jackson sold their former home and purchased a new home in Port Hope with his own money. Ms Rosenberg did not contribute any money to purchase the home, and she never lived in it. In 2012, to avoid probate fees on the house, Mr Jackson transferred the title to himself and Ms Rosenberg as joint tenants. He testified that the lawyer he used for this purpose never informed him of the effects of a joint tenancy. In 2020, he became concerned about Ms Rosenberg’s plans for the house and took steps to regain full ownership of the property. So he instructed another lawyer to sever the joint tenancy and convert it into a tenancy in common. Then he brought an application for a declaration that Ms Rosenberg holds title on a resulting trust for himself and that he has full beneficial interest in the home. Ms Rosenberg brought her own application for a declaration that she is the beneficial owner of the home. The applications were dealt with together.
3. Decision at First Instance
The application judge found that, on the evidence as a whole, Mr Jackson intended to make a gift to Ms Rosenberg in 2012, but only of a right of survivorship in the property. Such a gift is an immediate gift but one that can be enjoyed only on the death of the transferor, and it is a gift only of what remains at the time of the transferor’s death Since the transfer to Ms Rosenberg was made without consideration, a presumption of resulting trust arose but the presumption was only partially rebutted, for Ms Rosenberg held her interest on a resulting trust for Mr Jackson during their joint lives. The application judge also held that Ms Rosenberg held no exercisable rights during her lifetime, that Mr Jackson continued to be entitled to encumber or sell the property if he wished, that he retained the right to sever the joint tenancy, and that the 2020 transfer did sever the joint tenancy. His Honour held further that this eliminated Ms Rosenberg’s right of survivorship with respect to Mr Jackson’s 50% interest in the property. However, he went on to hold that the 50% share Ms Rosenberg held in trust for Mr Jackson was not eliminated. Hence, to the extent that there remains any equity in the property when Mr Jackson dies and Ms Rosenberg survives, 50% of it would pass to her.
In reaching this conclusion, the application judge considered two lines of cases. One line was from Alberta and Saskatchewan, which holds that when the owner of property places the title into joint tenancy, he cannot unilaterally thereafter sever the joint tenancy.[3] The other line was from British Columbia and Manitoba, which holds that the right to sever remains in effect.[4] His Honour followed the case law from the latter two provinces.
Ms Rosenberg appealed. Mr Jackson did not formally cross-appeal.
4. The Decision on the Appeal
The Court of Appeal dismissed Ms Rosenberg’s appeal. Justice Zarnett, wrote the reasons for the court, with which van Rensburg and George JJA agreed.
Justice Zarnett held that the application judge was entitled to find on the facts that Mr Jackson intended to make a gift only of the right of survivorship, a finding that is subject to appellate deference. He also held that the argument that the transfer was made pursuant to an agreement between the parties or pursuant to alleged but unproved mutual wills between Mr Jackson and Mr Taub, failed for lack of supporting evidence. By reference to Pecore v Pecore,[5] his Honour also held that the application judge reached the correct conclusion on the facts that Mr Jackson intended to give Ms Rosenberg only a right of survivorship and no beneficial rights while he lived, and that the gratuitous transfer raised a presumption of resulting trust in favour of the transferor. Justice Zarnett also agreed with the application judge’s finding that Mr Jackson retained the right to sever the joint tenancy. He reached this conclusion for the following reasons: (1) It is inherent in a joint tenancy, absent an agreement between the parties, that each joint tenant has the unilateral right to sever the tenancy, whether the tenancy was created for compensation or was gratuitous. (2) According to Hansen Estate v Hansen,[6] ‘the right of survivorship is entirely contingent on there being no severance’ (para 55). (3) According to Pecore,[7] the nature of ‘the gift of the right of survivorship is only of what remains when the transferor dies’, and therefore the transferor retains the right to dispose of the property. Consequently, his Honour agreed with the British Columbia and Manitoba line of cases and disagreed with the Alberta and Saskatchewan line of cases, both referred to above.
However, Justice Zarnett took issue with the application judge’s conclusion that the right of survivorship continued in effect with respect to the 50% interest in the property even though the joint tenancy ceased to exist. His Honour stated:
[67] Before 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.
Both parties also argued the application judge erred on this issue, since a right of survivorship cannot exist under a tenancy in common.
Accordingly, Justice Zarnett invited the parties to make written submissions about whether any changes to the formal judgments of the application judge should be made because of his ‘erroneous holding that any right of survivorship subsisted following the 2020 transfer’ (para 70).
—
[1] 2023 ONSC 4403. See https://welpartners.com/blog/2023/11/can-you-make-an-irrevocable-gift-of-the-right-of-survivorship/.
[2] Jackson v Rosenberg, 2024 ONCA 875.
[3] Midtdal v Pohl, 2014 ABQB 646; Pohl v Midtal, 2017 ABQB, affirmed 2018 ABCA 403 (there is no explanation for the different spellings of the name of one of the parties); Thorsteinson Estate v Olson, 2016 SKCA 134.
[4] Simcoff v Simcoff, 2009 MBCA 80; Bergen v Bergen, 2013 BCCA 492; Zeligs v Janes. 2016 BCCA 280, para 41; McKendry v McKendry, 2017 BCCA 48, paras 27-30; Herbach v Herbach Estate, 2019 BCCA 370, para 37; Kennedy v Smith, 2022 BCSC 1622.
[5] 2007 SCC 17, para 20.
[6] 2012 ONCA 112, para 32.
[7] Footnote 5, supra, para 50.
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