Pohl v Midtal, 2017 ABQB 711

Court of Queen’s Bench of Alberta Citation: Pohl v Midtal, 2017 ABQB 711 Date: 20171120 Docket: 1503 17621 Registry: Edmonton Between: Melva Pohl Plaintiff - and - James Gordon Midtal and Vivian L. Midtal Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice R.

Khullar _______________________________________________________ Introduction [ 1 ] When a parent gives an adult child a joint interest in real property during his or her lifetime, can that gift include an irrevocable right of survivorship that has the effect of preventing the parent from later severing the joint tenancy? [ 2 ] In light of the development of the law in Pecore v Pecore , 2007 SCC 17 , [2007] 1 SCR 795 [ Pecore ], I have concluded that this question must be answered in the affirmative.

That is, I have concluded that a parent’s inter vivos gift of a joint interest in real property to his or her adult child can include an irrevocable right of survivorship that prevents the parent from later exercising his or her right to sever the joint tenancy. Whether a parent has made such a gift depends on what his or her intention was when he or she created the joint tenancy.

Relevant Facts [ 3 ] This matter came before me by way of a

summary trial based on an Agreed Statement of Facts, and the facts found in an earlier action (Action Number 1203 14243). The stated question for the Court to answer is: Whether the defendants were entitled, at law, to exercise their rights to sever the joint tenancy pursuant to s 65 of the Land Titles Act , with respect to the lands legally described in the Statement of Claim filed in this action. [ 4 ] The lands are described as: ALL THAT PORTION OF THE SOUTH WEST QUARTER OF

SECTION THIRTY FOUR

(34) TOWNSHIP FORTY FIVE

(45) RANGE ONE

(1) WEST OF THE FIFTH MERIDIAN, WHICH IS NOT COVERED BY THE WATERS OF THE BATTLE RIVER, AS SHOWN ON A PLAN OF SURVEY OF THE SAID TOWNSHIP SIGNED AT OTTAWA ON THE 3 RD DAY OF SEPTEMBER, A.D. 1902, CONTAINING 62.0 HECTARES (153.33 ACRES) MORE OR LESS. EXCEPTING THEREOUT: HECTARES (ACRES) MORE OR LESS

A) PLAN 1808 MC – ROAD 0.417 1.03

B) PLAN 9222532 – ROAD 0.664 1.64 EXCEPTING THEREOUT ALL MINES AND MINERALS (the Lands). [ 5 ] The Defendant Vivian L. Midtal (Vivian) had five children when her first husband died. She then married the Defendant James Gordon Midtal (Gordon), in 1974. [ 6 ] At the time of his marriage to Vivian, Gordon was a farmer who owned six quarter sections of land. After they were married, Gordon transferred title to all of the quarter sections to himself and Vivian as joint tenants. [ 7 ] The Lands are the quarter

section that Gordon and Vivian built a home and lived on. They are also referred to as the Home Quarter in this decision. [ 8 ] The Plaintiff Melva Pohl (Melva), is Vivian’s eldest child. She and her husband Dennis were the only members of Vivian’s family who farmed. They lived twenty minutes away from the Home Quarter. Melva was in daily communication with Vivian; and Melva and Dennis socialized with Vivian and Gordon, and they helped each other out on their farms.

They were all close to one another. [ 9 ] One of Gordon and Vivian’s quarter sections was sold to Gordon’s brother. [ 10 ] In May 2004, Gordon and Vivian sold three of the remaining quarter sections to Melva and Dennis and their son and his wife. [ 11 ] In June 2004, Gordon and Vivian added Melva as a joint tenant on the title to the Home Quarter, and Vivian’s son Bryce as a joint tenant on the title to the last quarter section. Vivian made a will at the same time. Her will left her estate to Gordon or, if he predeceased her, to her other three children.

There was no mention of Melva or Bryce in Vivian’s will. [ 12 ] In August 2007, Gordon became Vivian’s attorney as her mental health had been deteriorating. [ 13 ] In 2010, Gordon transferred the quarter

section he and Vivian held with Bryce as joint tenants to Bryce alone. He also made a will in which he left his estate to Vivian’s three other children. His will explained that he left nothing to Melva or Bryce because “I have provided for them during my lifetime.” [ 14 ] With respect to the Home Quarter, the plan had been for Melva and Dennis to move into the house on the lands when Vivian and Gordon were no longer living there. In the meantime, Gordon continued to farm the Home Quarter.

By 2010, Vivian had moved into long-term care off the farm, and the relationship between Gordon and Melva and Dennis had begun to deteriorate. [ 15 ] In September 2012, Gordon, acting on his own behalf and as Vivian’s attorney, commenced Action Number 1203 14243 against Melva, claiming that a resulting trust arose from the transfer of a joint interest in the Home Quarter to Melva in June 2004. [ 16 ] In October 2014, Moreau J (as she then was) issued a decision dismissing that action, on the basis that Melva had rebutted the presumption of resulting trust by demonstrating that the transfer of a joint interest in the Home Quarter to her was a gift: Midtal v Pohl , 2014 ABQB 646 , 598 AR 136.

[ 17 ] Moreau J found “that it was Gordon and Vivian’s intention to continue to reside on the Home Quarter until they were ready to move elsewhere”; and that they continued to take the benefits from the farm operation and the oil leases, and to pay the taxes on the lands: para 112. She also found that their gift to Melva was made freely and, in Gordon’s case, to honour Vivian’s wishes and to maintain the farm through the next generation. [ 18 ] At paragraph 118 of her decision, Moreau J said: In all of the circumstances, I conclude that Melva has rebutted the presumption of a resulting trust.

Gordon and Vivian's transfer of a joint interest in the Home Quarter to Melva constituted an irrevocable inter vivos gift and the right of survivorship vested when the gift was made: Fuller v Fuller Estate , 2010 BCCA 421 at para 53 . [ 19 ] Moreau J’s decision confirmed that Gordon, Vivian, and Melva owned the Home Quarter as joint tenants. [ 20 ] In February 2015, Gordon (acting on his own behalf and as Vivian’s attorney) served Melva with written notice of his intention to register a transfer that would sever the joint tenancy of the Lands.

The notice enclosed a consent form for Melva’s signature, but she did not sign it. She registered a Caveat against the Lands instead (Instrument 152-058-552). [ 21 ] Shortly thereafter, in late February 2015, the Judgment Roll dismissing Gordon’s and Vivian’s earlier action (Action Number 1203 14243) was entered. [ 22 ] In March 2015, Gordon (acting on his own behalf and as Vivian’s attorney) registered a transfer to sever the joint tenancy.

The resulting title showed Gordon and Vivian as the owners of an undivided two-thirds interest in the Lands as joint tenants, and Melva as the owner of an undivided one-third interest in the Lands. [ 23 ] In May 2015, Gordon (acting on his own behalf and as Vivian’s attorney) registered a transfer conveying Vivian’s interest in the Lands to him.

As a result, the latest title shows that Gordon has an undivided two-thirds interest in the Lands, and Melva has an undivided one-third interest in the Lands. [ 24 ] In September 2015, Gordon (acting on his own behalf and as Vivian’s attorney) served Melva with a notice to take proceedings on her Caveat. Melva responded by commencing this action in November 2015. [ 25 ] Vivian died in December 2016, and Gordon died in May 2017. Preliminary Matter [ 26 ] At the outset of the hearing of the

summary trial, the Defendants sought permission to amend the style of cause to reflect the fact that Gordon and Vivian are now deceased. That application is granted. The Defendants can amend the style of cause to name litigation representatives in the place of Gordon and Vivian, pursuant to Rule 2.11(

e) of the Alberta Rules of Court . Elements of a Joint Tenancy [ 27 ] For a joint tenancy to exist, the four unities must be present: title, interest, time and possession. Each joint tenant has the right to use the entire property. The right of survivorship is inherent to the creation of a joint tenancy. The right of survivorship provides that, where a joint tenancy continues until the death of a joint tenant, the interest of the deceased joint tenant is extinguished and passes to the surviving joint tenant(s).

So, the right of survivorship is part of any gift of a joint interest in property and is, arguably, one of the key elements of a joint tenancy. [ 28 ] Typically, a joint tenant has the right to sever the joint tenancy and transform it into a tenancy in common. There is no right of survivorship in a tenancy in common. Instead, if one owner dies, his or her interest in the property passes to his or her estate, not to the other owner(s). AJ McClean discusses the severance of joint tenancies at common law in “Severance of Joint Tenancies” (1979) 57 Can B Rev 1. In Alberta,

section 12 of the Law of Property Act , RSA 2000, c L-7 and

section 65 of the Land Titles Act , RSA 2000, c L-4 set out how a joint tenancy can be severed. [ 29 ] It is quite easy to sever a joint tenancy. A joint tenant can sever the joint tenancy by transferring his or her interest in the property to himself or herself as a tenant in common. This is what Gordon did (acting on his own behalf and as Vivian’s attorney). [ 30 ] In this case, there is no dispute that the correct steps were taken under the Law of Property Act and the Land Titles Act to sever the joint tenancy.

The issue is whether Gordon and Vivian’s gift of a joint interest in the Lands to Melva included an irrevocable right of survivorship, meaning that Gordon and Vivian gave up their right to sever the joint tenancy. Put another way, the question I must answer is whether Gordon and Vivian intended to irrevocably gift the right of survivorship to Melva and relinquish their right of severance. Parties’ Positions [ 31 ] Melva’s position is that, in Pecore , the Supreme Court of Canada recognized that a parent can make an inter vivos gift of a joint interest in property to an adult child.

The nature of the gift might be that the parent will keep the beneficial interest in the entire property during his or her life time, and the child will receive the property on the parent’s death. Melva argues that, by implication, in this type of circumstance, the parent is agreeing to give up his or her right to sever the joint tenancy during his or her life time or, to put it another way, the parent is giving the child an irrevocable right of survivorship.

[32] Melva argues that the Saskatchewan Court of Appeal recognized this in Thorsteinson Estate v Olson, 2016 SKCA 134, 404DLR (4th) 453 [Thorsteinson], and that this Court should follow Thorsteinson.

She acknowledges that there are contrary decisions fromthe Manitoba Court of Appeal (Simcoff v Simcoff, 2009 MBCA 80, 245 Man R (2d) 7 [Simcoff]) and the British Columbia Court ofAppeal (Bergen v Bergen, 2013 BCCA 492, 346 BCAC 207 [Bergen]; and McKendry v McKendry, 2017 BCCA 48, 93 BCLR (5th)215 [McKendry]), but says those decisions are distinguishable or should not be followed. [33] It is Melva’s position that Moreau J’s finding that “Gordon and Vivian’s transfer of a joint interest in the Home Quarter toMelva constituted an irrevocable inter vivos gift and the right of survivorship vested when the gift was made” is the finding necessary tosupport the conclusion that Gordon and Vivian gave up their right to sever the joint tenancy: para 118. [34] Gordon and Vivian take the position that the Manitoba and British Columbia Courts of Appeal have interpreted Pecorecorrectly.

Pecore deals with the presumption of resulting trust that applies when a parent transfers a joint interest in property to an adultchild, and how that presumption can be rebutted so that a gift can be found. Pecore does not change the well-accepted law relating tojoint tenancy. That is, the law remains that the right of survivorship is an incident of joint tenancy that co-exists with a joint tenant’s rightto sever the joint tenancy (changing it into a tenancy in common and extinguishing the right of survivorship).

There is nothing in Pecorewhich stands for the proposition that a gift of a joint interest in property sterilizes the transferor’s ability to sever the joint tenancy in thefuture. Such a conclusion would be a departure from established legal and equitable principles and would disrupt the Torrens system ofland registration in Alberta. [35] Gordon and Vivian say that Thorsteinson is an outlier and should be ignored.

Moreau J’s comment about the right ofsurvivorship vesting (in paragraph 118) was superfluous; it was an unnecessary addition to her conclusion that the transfer of a jointinterest in the Home Quarter to Melva was a gift, because the gift, by implication, includes a right of survivorship. Moreau J was notrecognizing the ability to make an irrevocable gift of survivorship. [36] The parties acknowledge that there is no case in Alberta considering these issues. Melva urges me to follow the SaskatchewanCourt of Appeal. Gordon and Vivian urge me to follow the British Columbia and Manitoba Courts of Appeal.

Legal Principles [37] The cases within which the legal principles arise all follow a similar fact pattern. A parent (or someone in a parent-likerelationship) transfers a joint interest in property (typically a bank account or real property) to an adult child. After the joint tenancy hasbeen created, a dispute arises about whether the transfer was a real gift or done for the benefit of the parent, meaning instead of a gift, aresulting trust was created.

After Pecore, the law is that there is a presumption of a resulting trust in these circumstances that can berebutted by establishing that a gift was intended. [38] Melva’s argument is based on an

interpretation of Pecore that requires this Court to go one step further. In order for theSupreme Court of Canada’s decision to make sense, it must be that a party can gift an irrevocable right of survivorship. So, a necessarystarting point is to examine the analysis in Pecore. [39] In Pecore, the Supreme Court of Canada was dealing with a father who had made his adult daughter a joint owner of his bankaccounts.

The relevant part of the decision sets out the principles surrounding the presumption of a resulting trust and the evidencerequired to rebut the presumption: 45 In cases where the transferor's proven intention in opening the joint account was to gift withdrawal rights to the transferee duringhis or her lifetime (regardless of whether or not the transferee chose to exercise that right) and also to gift the balance of the account tothe transferee alone on his or her death through survivorship, courts have had no difficulty finding that the presumption of a resultingtrust has been rebutted and the transferee alone is entitled to the balance of the account on the transferor's death. 46 In certain cases, however, courts have found that the transferor gratuitously placed his or her assets into a joint account with thetransferee with the intention of retaining exclusive control of the account until his or her death, at which time the transferee alone wouldtake the balance through survivorship: see e.g.

Standing v. Bowring (1885), 31 Ch. D. 282, at p. 287; Edwards v. Bradley, (ON CA), [1956] O.R. 225 (C.A.), at p. 234; Yau Estate, at para. 25. 47 There may be a number of reasons why an individual would gratuitously transfer assets into a joint account having this intention.A typical reason is that the transferor wishes to have the assistance of the transferee with the management of his or her financial affairs,often because the transferor is ageing or disabled.

At the same time, the transferor may wish to avoid probate fees and/or make after-death disposition to the transferee less cumbersome and time consuming. 48 Courts have understandably struggled with whether they are permitted to give effect to the transferor's intention in this situation.One of the difficulties in these circumstances is that the beneficial interest of the transferee appears to arise only on the death of thetransferor. This has led some judges to conclude that the gift of survivorship is testamentary in nature and must fail as a result of notbeing in proper testamentary form: see e.g. Hill v.

Hill (1904), 8 O.L.R. 710 (H.C.), at p. 711; Larondeau v. Laurendeau, (ON SC), [1954] O.W.N. 722 (H.C.); Hodgins J.A.'s dissent in Re Reid (1921), (ON CA), 64 D.L.R. 598 (Ont.S.C., App. Div.). For the reasons that follow, however, I am of the view that the rights of survivorship, both legal and equitable, vestwhen the joint account is opened and the gift of those rights is therefore inter vivos in nature. This has also been the conclusion of theweight of judicial opinion in recent times: see e.g. Mordo v. Nitting, [2006] B.C.J. No. 3081 (QL), 2006 BCSC 1761, at paras. 233-38;Shaw v.

MacKenzie Estate (1994), 4 E.T.R. (2d) 306 (N.S.S.C.), at para. 49; and Reber v. Reber (1988), (BC SC), 48D.L.R. (4th) 376 (B.C.S.C.); see also Waters' Law of Trusts, at p. 406. 49 An early case that addressed the issue of the nature of survivorship is Re Reid in which Ferguson J.A. of the Ontario Court ofAppeal found that the gift of a joint interest was a "complete and perfect inter vivos gift" from the moment that the joint account wasopened even though the transferor in that case retained exclusive control over the account during his lifetime. I agree with this

interpretation. I also find MacKay J.A.'s reasons in Edwards v. Bradley (C.A.), at p. 234, to be persuasive: The legal right to take the balance in the account if A predeceases him being vested in B on the opening of the account, it cannot be the subject of a testamentary disposition. If A's intention was that B should also have the beneficial interest, B already has the legal title and there is nothing further to be done to complete the gift of the beneficial interest.

If A's intention was that B should not take the beneficial interest, it belongs to A or his estate and he is not attempting to dispose of it by means of the joint account. In either event B has the legal title and the only question that can arise on A's death is whether B is entitled to keep any money that may be in the account on A's death or whether he holds it as a trustee under a resulting trust for A's estate. [Emphasis added] Edwards v.

Bradley was appealed to the Supreme Court of Canada but the issue of survivorship was not addressed. 50 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: see e.g. Hodgins J.A.'s dissent in Re Reid . Like the Ontario Court of Appeal in Re Reid , at p. 608, and Edwards v. Bradley , at p. 234, I would reject this view. 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. 51 Treating survivorship in these circumstances as an inter vivos gift of a joint interest has found favour in other jurisdictions, including the United Kingdom and Australia: see Russell v. Scott (1936), 55 C.L.R. 440, at p. 455 ; Young v. Sealey , [1949] 1 All E.R. 92 (Ch. Div.), at pp. 107-8 ; (in obiter) Aroso v.

Coutts , [2002] 1 All E.R. (Comm) 241, [2001] EWHC Ch 443, at paras. 29 and 36. ... 53 Of course, the presumption of a resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor.

Otherwise, the assets will be treated as part of the transferor's estate to be distributed according to the transferor's will. [ 40 ] The key fact in Pecore was that, after making his daughter the joint owner of the bank accounts, the father was the only one to exercise rights with respect to the accounts. The Supreme Court of Canada recognized that, despite having a legal interest in the accounts, the daughter did not have a beneficial interest in them during her father’s lifetime.

This might have led to the conclusion that the daughter held the assets in the accounts in trust for her father’s benefit (or the benefit of his estate) but, on the evidence, the Court found that the father’s intention, when he set the accounts up, was to gift the daughter a right of survivorship, such that she would become the sole owner of the assets in the accounts on his death. A characteristic of the joint tenancy created was that the accounts might have nothing in them when the father died. Nevertheless, that did not defeat the father’s intention to gift the daughter the right of survivorship.

The key point was one of evidence: did the transferor intend to gift the right of survivorship to the assets remaining in the joint account to the survivor?: Pecore at para 53 . [ 41 ] Pecore adapted the concept of joint tenancy, as the joint tenants in that case did not have the same rights with respect to the property; they had the same legal ownership, but the daughter’s beneficial interest did not crystalize until her father’s death.

The Supreme Court of Canada recognized that: • joint tenants can have different beneficial interests in the property; and • it is necessary to determine the intention of the transferor at the time the joint tenancy is created to determine if an inter vivos gift is made with different beneficial interests. So, the question becomes, if an inter vivos gift of a joint interest in property is made, is it possible for that gift to include an irrevocable right of survivorship? [ 42 ] I think the answer to that question must be yes.

Joint tenants can agree by contract that they will not sever the joint tenancy: see Bruce Ziff, Principles of Property Law , 6th ed (Toronto: Carswell, 2014) at 350-1; and Haan v. Haan , 2015 ABCA 395 , 609 AR 371. Therefore, one should be able to relinquish his or her right to sever a joint tenancy by irrevocably gifting the right of survivorship to another. I think this conclusion is the logical implication that flows from Pecore .

Whether such a gift was made will depend on the transferor’s intention at the time the gift was made. [ 43 ] The argument before me was not explicitly addressed by the Supreme Court of Canada in Pecore , nor by Moreau J in the parties’ earlier action. However, other courts have addressed the issue and most of them have reached decisions that support Vivian and Gordon’s position. [ 44 ] The mother in Simcoff transferred title of the property in dispute from her name alone into the names of herself and her son as joint tenants in 1992.

For three years, she continued to receive all rents from the property and assumed responsibility for the property’s maintenance and upkeep. She then lived in the property for nine years, before moving into a senior’s residence. The property was then rented to her granddaughter, and her son received all the rents and assumed responsibility for the property’s maintenance and upkeep. As a result of a falling out between the mother and son in 2007, the mother sought a declaration that she was the property’s sole owner.

She took the position that a presumption of resulting trust was present with respect to the son’s interest in the property. Alternatively, she requested a partition and sale of the property. [ 45 ] The Manitoba Court of Appeal upheld the applications judge’s finding that the mother intended to gift her son an interest in the property when she placed the property into joint tenancy.

However, it concluded that the applications judge erred in refusing to allow the mother’s application for partition and sale. [ 46 ] After ordering a partition and sale, the Court went on to “make a few obiter comments” in response to the son’s argument that the mother’s gift had created an irrevocable right of survivorship: para 57. At paragraph 63, the Court held:

Certainly, where an individual, such as this mother, is found to have made a gift of a one-half joint interest in property to her son, she cannot retract that gift at a later point in time. However, the right of survivorship is an incident of joint tenancy that takes effect only if the joint tenancy continues to exist as of the death of one of the joint tenants.

The gift of one-half of the property cannot be rescinded, but the joint tenancy can be converted into a tenancy in common, which does not carry with it the right of survivorship. [ 47 ] In the next paragraph, the Court cited Pecore and said, “the fact that a ‘complete gift’ may have been given and that this gift included a right of survivorship does not, prima facie , prevent a donor from dealing with the retained joint interest while alive. The right of survivorship is only to what is left”: para 64. [ 48 ] This reasoning was followed in Bergen and McKendry , which dealt with analogous but different facts.

The point made in both cases is that, just because a parent has gifted an adult child a joint interest in property, does not mean that he or she has given up the right to sever the joint tenancy. [ 49 ] In Thorsteinson , the Saskatchewan Court of Appeal came to the opposite conclusion. At issue in that case was the validity of a deed of gift Ms. Thorsteinson signed during her lifetime, which transferred nine parcels of farmland into the names of herself and Mr. Olson (an adult she had a parent-child like relationship with) as joint tenants with a right of survivorship. After signing the deed of gift, Ms.

Thorsteinson commenced an action against Mr. Olson requesting that the transfers be set aside for many reasons, including that they created a resulting trust. In the alternative, she sought to sever the joint tenancy. The trial judge upheld the gift and dismissed Ms. Thorsteinson’s action. One of the questions on the appeal was: if the gift was valid, should Ms. Thorsteinson have been able to sever the joint tenancy? The Saskatchewan Court of Appeal said no. In so doing, it distinguished Simcoff and relied on Pecore .

At paragraph 67 of its decision, the Court held: Marjorie’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 Marjorie had gifted William 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 : [50] 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: see e.g. Hodgins J.A’s dissent in Re Reid ... 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 balance of the account balance – whatever it may be – at the time of the transferor’s death, not to any particular amount. (Emphasis added) Having gifted the right of survivorship, Marjorie could not take it back. [ 50 ] I decline to follow the analysis in Simcoff . First, as noted in Thorsteinson at paragraph 66 , it was clearly obiter and, therefore, less weighty.

Second, while not articulated this way in Thorsteinson , based on the reasoning in Pecore , it seems logical to conclude that, by gifting a joint interest in property to his or her adult child, a parent can give up his or her right to sever the joint tenancy. If the facts of Pecore are used, the finding is that the father intended the daughter to be the beneficial owner of the joint accounts when he died, but he would be the beneficial owner while he was alive.

In order to give effect to that intention, the implication is that the father will not or cannot exercise the right of severance while he is alive, though he can use all of the assets in the accounts to his own benefit. By analogy, in the case at bar, Gordon and Vivian could use the Home Quarter in any way to their own benefit while joint tenants with Melva. But, in order to give effect to their gift of survivorship to Melva, when they created the joint tenancy, they gave up their right to severance.

To find otherwise would defeat the point of a gift of property that will only take effect upon the death of the transferor. To the extent this is seen as a stretch of the law of joint tenancy, the first step of that stretch was taken in Pecore . [ 51 ] A third reason is this evolution in the law (if that is what it is) is not as disruptive as it might appear on first glance.

In Simcoff , the Manitoba Court of Appeal observed that a gift of a joint interest in property, including the right of survivorship, “does not, prima facie , prevent a donor from dealing with the retained joint interest while alive”: para 64 (emphasis added).

That might be the prima facie position but, in the face of evidence of the intention of the transferor to gift something else, such as in irrevocable right of survivorship, then this intention would prevent a transferor from severing the joint interest while alive. [ 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 parent 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. [ 53 ] This principle was applied in Wong v Chong Estate , 2016 BCSC 953 , [2016] BCJ No 1114 (QL), where a judge of the British Columbia Supreme Court recognized that a joint tenant did not have the ability to sever the joint tenancy based on the intention of the transferor when the joint tenancy was created. Mr. Wong gratuitously transferred a joint interest in land to his spouse, Ms.

Chong, but all that was gifted was the right of survivorship if he died. Any other interest in the land was held in a resulting trust by Ms. Chong for the benefit of Mr. Wong. The Court found that, at the time of the transfer, Mr. Wong had no intention of gifting Ms. Chong the beneficial interest in the land “to make use of as she pleased”: para 89. Rather, it was his intention that, should he predecease Ms. Chong, she would take the benefit of the land. Therefore, Ms. Chong’s severance of the joint tenancy was ineffective.

This case is an example of the right of survivorship being gifted separately from any other beneficial interest in the land and is consistent with the analysis here. It depends on the evidence of intent at the time the gift was made. [ 54 ] One of the challenges in this area is a tautology in the reasoning in those cases that follow the obiter comments of the Manitoba Court of Appeal in Simcoff . Basically, that analysis holds that a joint tenancy has two relevant aspects to it: first, the right of survivorship and second, the right to be able to sever the joint tenancy.

Since a joint tenancy includes the right to sever, there cannot be a separate irrevocable right of survivorship. This analysis presumes the conclusion in how it frames the question. The issue that I have been asked to address is whether it is possible, in law and equity, for a transferor to gift a joint interest in real property with an irrevocable right of survivorship which by definition sterilizes the right of severance. [ 55 ] AJ McClean’s

article (referenced above) offers an interesting and helpful discussion of the development of the law in this

area. It starts with the presumption that a joint tenancy can be severed in certain circumstances. It does not address the question of whether that right of severance can be sterilized. [ 56 ] Lastly, I reject the argument that the conclusion I have come to could undermine the Torrens system of land registration. The law already recognizes equitable interests in property that are not reflected on title, such as a resulting trust.

The types of equitable interests discussed here – whether a transferor has given an irrevocable right of survivorship in the context of estate planning of a parent and adult child – will not create a floodgate of equitable claims overrunning the Torrens system. Application to the Facts [ 57 ] In her decision resolving the parties’ earlier action (at paragraphs 107 to 109), Moreau J referenced Pecore and its discussion of the right of survivorship. Whether the presumption of resulting trust had been rebutted turned on what Gordon and Vivian’s intention was when they made Melva a joint tenant.

Moreau J found that the facts were similar to those in Pecore . She said: 112 ... [I]t was Gordon and Vivian’s intention to continue to reside on the Home Quarter until they were ready to move elsewhere. During that period, Gordon and Vivian took the benefits from the farm operation and the oil leases and continued to pay the taxes on the property.

This was similar to the situation in Pecore , where the father, who had gratuitously added his daughter’s name as joint holder of his investment accounts, continued to control the funds in the accounts and paid income tax on the earnings on the investments until his death. The trial judge in that case found that doing so was not inconsistent with an intention that the balance remaining in the accounts would belong to his daughter on his death.

His finding was not disturbed on appeal. 113 I am of the view that the timing of the transfer is a strong indication that the two quarter sections transferred to Bryce and Melva as joint tenants respectively had already been dealt with and would not form part of the estate. This occurred eight days after disposing three quarters by way of sale. It was also on the same day Vivian executed her will which left her assets to Gordon, and in the event of his death, to three of the five children (excluding Bryce and Melva). ... 116 ... [Melva] was the only child actively involved in farming.

Keeping Gordon and Vivian on title reflected their intention to remain in control of the property while living there. Lands were gifted to [Melva] and Bryce and the remaining assets, which Gordon valued at trial at $692,000 (Gordon) plus $76,000 (Vivian) were to be divided by will among the remaining three children.

Bryce and Melva were excluded from sharing in those assets, as each had received a joint interest in the unsold quarter sections. [ 58 ] These findings led Moreau J to conclude that Gordon and Vivian’s transfer of a joint interest in the Home Quarter to Melva was “an irrevocable inter vivos gift and the right of survivorship vested when the gift was made”: para 118.

Melva, as a joint tenant, would not and did not have the benefit of the joint property during Gordon and Vivian’s lifetime but the intention was that she had the right of survivorship – that there was a gift of joint tenancy and not a resulting trust. [ 59 ] Moreau J made a number of relevant key findings, including that: • the transfers to Melva and Bryce (of a joint interest in the Home Quarter and another quarter section, respectively) occurred on the same day that Vivian made her will leaving nothing to Melva and Bryce; • Gordon and Vivian did not intend to have the jointly-owned quarter sections form part of their estates; and • it was Gordon and Vivian’s intention that Melva and Bryce would be taken care of by way of the joint tenancies.

This was confirmed in 2010, when Gordon made his will dividing his estate amongst the three other siblings and noting that Bryce and Melva were taken care of during his lifetime. [ 60 ] No one is challenging the conclusion that a valid inter vivos gift (as opposed to a testamentary gift) of a joint interest in the Home Quarter was made to Melva just because the gift was really only intended to take effect on Vivian and Gordon’s deaths.

But Melva takes the conclusion one step further and says, for the gift in Pecore , or her gift, to have any meaningful effect, it must mean that the joint tenancy cannot be severed by the transferor. To permit otherwise is to undermine the gift. If the recipient of the gift of a joint interest in property cannot benefit from the use of the property when the transferor is alive (seemingly contrary to basic principles of joint tenancy), then the only content to the gift is the right to take the interest in the entire property on the transferor’s death.

As in any joint tenancy, there is no guarantee as to the status of the property at the time of the transferor’s death (the bank account could be drained, the real property spoiled). That does not change the applicable legal principles. Of course, the right of survivorship operates between or among the joint tenants. So, if Melva were to predecease Vivian and Gordon, Vivian and Gordon would own the Home Quarter and could then dispose of it as they see fit.

However, Melva argues that, if Vivian and Gordon were to die first, the intent is that Melva would own the Home Quarter. [ 61 ] Vivian and Gordon argue that Pecore may have found that the creation of a joint tenancy can be an inter vivos gift, and not a testamentary disposition, even though it takes effect upon death. However, this does not change the law with respect to joint tenancy: the transferor can still sever the joint tenancy and change it into a tenancy in common. The recipient still has an interest in the property upon the transferor’s death, but it will be to his or her share of the property only.

Nothing in Pecore changes this. [ 62 ] In fairness to Moreau J, the issue that is before me was not argued before her; she was dealing with the question of whether the presumption of resulting trust had been rebutted. I do not think that her statement in paragraph 118 is determinative of this case. For ease of reference, that paragraph states: In all of the circumstances, I conclude that Melva has rebutted the presumption of a resulting trust. Gordon and Vivian's transfer of a joint interest in the Home Quarter to Melva constituted an irrevocable inter vivos gift and the right of survivorship vested when the gift

was made ... [ 63 ] However, this statement, taken with the other findings made about the estate planning context to the decision to make Melva a joint tenant, provides enough evidence to rebut the prima facie position that nothing prevents the transferor from dealing with the joint interest while alive. I find that, in this case, the evidence establishes that, in 2004, Gordon and Vivian’s intention was that Melva would get the Home Quarter when they died, though she understood that they would use the Home Quarter for their own benefit while they were alive.

After their death, she would get the benefit of the whole Home Quarter. That is why she was not in Vivian’s will in 2004. In 2010, Gordon confirmed this intention in his will, when he said Melva was excluded from the will because she had been taken care of during his lifetime. [ 64 ] Gordon and Vivian clearly intended that Melva would get the Home Quarter on their deaths. To give effect to their intention, an inference can and should be drawn that they gave up their right of severance in 2004, when they made Melva a joint tenant.

Limitations Argument [ 65 ] Gordon and Vivian raise a limitations argument, though not very aggressively. They say that, if Melva is alleging that an independent right of survivorship arose in 2004, this should have been raised in her Statement of Defence in the earlier action because she could never have a greater right than whatever was gifted in 2004. Melva says that, if she was gifted the right of survivorship in 2004, the denial of that gift is an ongoing breach and is not barred by the Limitations Act , RSA 2000, c L-12. [ 66 ] I reject Gordon and Vivian’s limitation argument for two reasons.

First, the earlier action, adjudicated by Moreau J, was about whether the joint tenancy created in 2004 was a resulting trust or outright gift. Moreau J’s analysis and conclusion was that it was an outright gift which included the right of survivorship. Accordingly, the issue was adjudicated on and concluded in the earlier action. Additionally, if for some reason it is found that the issue was not determined by Moreau J, I would find that the gift was created in 2004 and there has been an ongoing and enduring breach which continues to this day, which would sidestep any limitation issue.

Conclusion [ 67 ] Based on the facts the parties have agreed to, and those that Moreau J found, I can answer the question presented as follows: Question: Whether the Defendants were entitled at law to exercise their rights to sever the joint tenancy pursuant to s 65 of the Land Titles Act with respect to the Lands legally described in the Statement of Claim in this Action. Answer: “No”.

The reason the Defendants were not entitled to exercise their rights to sever the joint tenancy is because, in this case, the gift creating the joint tenancy included an irrevocable right of survivorship. [ 68 ] As a result, in light of the deaths of both Gordon and Vivian, I declare Melva to be sole owner of the Home Quarter as the surviving joint tenant. Heard on the 16 th day of June, 2017. Dated at the City of Edmonton, Alberta this 20 th day of November, 2017. R. Khullar J.C.Q.B.A. Appearances: Ian L. Wachowicz Dentons Canada LLP for the Plaintiff Louis M.H. Belzil, Q.C. Rackel Belzil LLP for the Defendants