Smilley v McMillan, 2018 ABQB 988

Court of Queen’s Bench of Alberta Citation: Smilley v McMillan, 2018 ABQB 988 Date: 20181204 Docket: FL04 02707 Registry: Grande Prairie Between: Thelma Irene Smilley Plaintiff/Applicant - and - Brian McMillan Defendant/Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice R.J. Hall _______________________________________________________ [ 1 ] On November 13, 2018 , Ms. Smilley applied to this Court for an Order to sever her and Mr. McMillan’s joint tenancy ownership of their home. The application was heard on November 16, 2018.

I requested further written submissions from counsel on the issue of whether the Court has the jurisdiction to grant the Order. Counsel obliged me. Background [ 2 ] Ms. Smilley and Mr. McMillan are adult interdependent partners. They began their common-law relationship in 1997 and

separated in early October of 2018. During their relationship, the parties purchased a residential property in Grande Prairie, Alberta (the “Property”), which they hold in joint tenancy. [ 3 ] Ms. Smilley was diagnosed with lung cancer in July 2017 and received a terminal diagnosis on October 18, 2018. She told Mr. McMillan in early October that she wanted to end their relationship. Since then, she has revised her Will so that no part of her estate will be left to Mr. McMillan. [ 4 ] In an attempt to ensure that her interest in the Property passes to her estate rather than to Mr. McMillan, Ms.

Smilley seeks to sever the joint tenancy and convert her interest to an interest held as a tenant in common. If the joint tenancy is not severed prior to Ms. Smilley’s death, under the right of survivorship her interest in the Property would be extinguished and passed on to Mr. McMillan as the surviving joint tenant. [ 5 ] Ms. Smilley has applied to the Court for an Order to sever the joint tenancy. At the time of her application, she had taken no further steps to sever the joint tenancy. [ 6 ] Mr. McMillian resists the application, arguing that this Court does not have the jurisdiction to grant the Order.

Issue [ 7 ] At issue is whether this Court has the jurisdiction to grant the requested Order of severance. Law a. Jurisdiction [ 8 ] Rule 1.2 of the Alberta Rules of Court , Alta Reg 124/2010 [ Rules ] states:

(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way. [ 9 ] Rule 1.3 of the Rules states:

(1) The Court may do either or both of the following: (

a) give any relief or remedy described or referred to in the Judicature Act ; (

b) give any relief or remedy described or referred to in or under these rules or any enactment. [ 10 ]

Section 8 of the Judicature Act , RSA 2000, c J-2 states: The Court in the exercise of its jurisdiction in every proceeding pending before it has power to grant and shall grant, either absolutely or on any reasonable terms and conditions that seem just to the Court, all remedies whatsoever to which any of the parties to the proceeding may appear to be entitled in respect of any and every legal or equitable claim properly brought forward by them in the proceeding, so that as far as possible all matters in controversy between the parties can be completely determined and all multiplicity of legal proceedings concerning those matters avoided. [emphasis added] [ 11 ] As explained by the Court of Appeal,

section 8 of the Judicature Act grants the Court general jurisdiction to grant remedies subject to reasonable terms and conditions, “so as to avoid, if at all possible, multiple proceedings and to ensure that all matters between the parties are completely determined”: F (RJ) v F (CM) , 2014 ABCA 165 at para 91 ; Gramaglia v Alberta (Minister of Government Services) , 2007 ABCA 93 at para 39 . b.

Joint Tenancy [ 12 ] To create a joint tenancy at common law, four unities must exist: 1. unity of interest – the interests must equal in nature, extent, and duration; 2. unity of title – the interests must be derived from same act or instrument; 3. unity of time – the interests must be created at the same time; and 4. unity of possession – the co-owners must have equal rights to the entire property: Bruce Ziff, Principles of Property Law , 6 th Ed, (Toronto: Thomson Reuters Canada Limited, 2014) at 338; Herunter v Kostiuk , 2011 ABQB 452 at para 86 . [ 13 ] In Alberta, in addition to these four unities, the parties must also expressly state their intention to create a joint tenancy in the instrument: Law of Property Act , RSA 2000, c L-7, s 8. [ 14 ] A key characteristic of joint tenancy is the right of survivorship, whereby the death of a joint tenant entitles a surviving joint tenant to increase their holdings.

In contrast, there is no right of survivorship between tenants in common: Principles of Property Law at 338-341.

[15] In the case at hand, the parties do not dispute that they hold the Property as joint tenants. c. Severance [16] A joint tenancy may be converted to a tenancy in common by a process known as severance. The term severance refers to thedestruction of the right of survivorship. Severance can be effected both at common law and under statutory law. i. Common Law [17] The leading case on severance of joint tenancies in Alberta is Sorenson v Sorenson (1977), (AB CA), 90DLR (3d) 26 (Alta CA) (leave to appeal to SCC allowed (1977), 6 AR 540, appeal discontinued [1979] 1 SCR xiii). The Court of Appealin Sorenson set out three ways to sever a joint tenancy at common law: 1.

an act of one of the persons interested operating on his or her own share; 2. mutual agreement; and 3. any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common: at 32. [18] As held by Sirrs J in Alberta (Public Trustee) v Felske Estate, 2007 ABQB 682, aff’d 2009 ABCA 209 [Felske Estate], atparagraph 34: The rules of common law severance continue to operate in a land registry system, if they are not contrary to a legislative enactment:citing Stonehouse v British Columbia (Attorney General), (SCC), [1962] SCR 103 [Stonehouse], Sorenson, andHavlik v Whitehouse, 2000 ABQB 242 [Havlik]. [19] In the circumstances of Ms.

Smilley’s application, the first method of severance is most applicable, as Mr. McMillan isexpressly opposed to the severance and no course of dealing has been suggested to the Court that might support a finding that the parties’interests were treated as a tenancy in common. [20] The first method is based on the idea that any act that destroys one of the four essential unities must end the joint tenancy.Such acts include unilateral acts by joint tenants: Stonehouse.

For example, where “A” and “B” hold property as joint tenants, and Aconveys her interest to “C”, the new co-ownership relationship between “B” and “C” is a tenancy in common because the conveyancedestroyed the unities of title and time, thereby severing the joint tenancy. “A” need not inform “B” of the conveyance to “C” for the jointtenancy to be severed, and severance occurs immediately upon the transfer of the interest to “C”. [21] Similarly, if “A” were to convey her interest to herself, it would, in theory, sever the joint tenancy between “A” and “B”because the new title would destroy the unity of time and title.

However, at common law in Alberta such transfers are void: Havlik atpara 35; Principles of Property Law at 345. ii. Statutory Law [22] The Law of Property Act provides for: 1. severance through the transfer of a joint tenancy to oneself: s 12; and 2. severance through an Order of partition and sale: s 15 and 19. 1. Transfer of a joint tenancy to oneself [23] Although transfer of a property interest to oneself at common law is invalid,

section 12 of the Law of Property Act allows ajoint tenant to convey her interest to herself as a tenant in common. Unlike severance at common law, severance through transfer tooneself under the Law of Property Act does not take effect until the transfer is registered under

section 65 of the Land Titles Act, RSA2000, c L-4. [24]

Section 12 of the Law of Property Act states:

(1) An interest in real or personal property may be validly conveyed ... (

d) by a person who holds the property as a joint tenant to that person as a tenant in common, ... to the same extent and in the same manner as the interest might be conveyed to a third party. ...

(3) A transfer by a person as a joint tenant to that person under subsection (1)(

d) has, on the registration of the transfer under the LandTitles Act, the same effect of severing the joint tenancy as a transfer to another person. [25]

Section 65 of the Land Titles Act states:

The Registrar shall not register a transfer that has the effect of severing a joint tenancy unless (

a) the transfer is executed by all the joint tenants, (

b) all the joint tenants, other than those executing the transfer, give their written consent to the transfer, or (

c) the Registrar is provided with evidence satisfactory to the Registrar that all the joint tenants who have not executed the transfer or given their written consent to the transfer have by (

i) personal service, or (ii) substitutional service pursuant to a court order, been given written notice of the intention to register the transfer. 2. Order of partition and sale [ 26 ] A joint tenancy may also be severed by an Order of partition or sale made under

Part 3, Partition and Sale of the Law of Property Act . [ 27 ]

Section 15 states:

(1) A co-owner may apply to the Court for an order terminating the co-ownership of the interest in land in which the co-owner is a co- owner.

(2) On hearing an application under subsection (1), the Court shall make an order directing (

a) a physical division of all or part of the land between the co-owners, (

b) the sale of all or part of the interest of land and the distribution of the proceeds of the sale between the co-owners, or (

c) the sale of all or part of the interest of one or more of the co-owners’ interests in land to one or more of the other co-owners who are willing to purchase the interest. ... [ 28 ]

Section 19, referring to an Order of partition or sale under section 15(2), states: If the interest in land that is the subject of an order is held in joint tenancy, the order on being granted severs the joint tenancy. Analysis [ 29 ] In support of Ms. Smilley’s application, counsel relies on this Court’s recent decision in Dobransky v Roteliuk , 2018 ABQB 660 and

section 8 of the Judicature Act . [ 30 ] In Dobransky , Bokenfohr J granted an application to enforce a 2010 Order severing joint tenancy and to rectify the title to a parcel of land to reflect the severance. [ 31 ] The 2010 Order was granted by Browne J, and provided: 1. It is hereby declared that the joint tenancy of William Dobransky and Marjorie Roteliuk with respect to the property described below is severed effective immediately. 2.

The Registrar of the North Alberta Land Registration District be and hereby is directed to register the property in the name of William Dobransky...and Marjorie Roteliuk...as Tenants in Common 3. ... [ 32 ] Prior to the Order, Mr. Dobransky had sought to sever a joint tenancy held by him and Ms. Roteliuk, his daughter, by serving on her a Notice of Intention to Register a Transfer of Land under s 65 of the Land Titles Act . He did not register the transfer with the Registrar of Titles. Mr. Dobransky died in 2014.

At the time of his death, the Land Titles Office had not yet registered the Order. [ 33 ] Justice Bokenfohr found that the Order had immediately severed the joint tenancy, despite the fact that the Land Titles Office did not register the property in the names of the parties as tenants in common. [ 34 ] Counsel argues that the facts of Ms. Smilley’s case are sufficiently analogous to the facts of Dobransky to support the Court exercising its jurisdiction under

section 8 of the Judicature Act and granting an Order of severance, even where

section 12 of the Law of Property Act and

section 65 of the Land Titles Act have not been complied with. [ 35 ] Mr. McMillan’s counsel argues that the Court’s jurisdiction to order severance of a joint tenancy is limited to its authority under

section 15 of the Law of Property Act . In support of this position, counsel cites Kozyra v Kozyra , 1998 ABQB 641 , in which Veit J denied an application for an Order to sever two joint tenancies, as the applicant had not cited authority for the Court to “merely sever a joint tenancy without order the sale of real property”: at para 3. In her reasons at paragraph 15, Veit J considered the jurisdiction

provided under

section 15 of the Law of Property Act : Nor, with respect, do I think the Law of Property Act has any direct application here.

Section 15 of the Act gives the court jurisdiction to sever a joint tenancy, but, on its face, only if that decision is coupled with an order for the physical division of the property, or an order for sale of the property. There does not appear to be any jurisdiction to do what the defendant wants, which is merely to order the severance of the joint tenancy. [emphasis in original] [ 36 ] However, Veit J did not comment on the applicability of

section 12 of the Law of Property Act , which recognizes that a joint tenant can effect severance by transferring a joint tenancy interest to herself as a tenant in common. [ 37 ] Rule 1.3 of the Rules allows the Court to give any relief or remedy described or referred to in the Judicature Act or under any enactment, and

section 8 of the Judicature Act allows the Court to grant “all remedies whatsoever” to which a party appears to be entitled. The purpose of this broad jurisdiction is to provide a means by which the Court can fairly and efficiently resolve matters. [ 38 ] Ms. Smilley has asked the Court to Order the severance of her and Mr. McMillan’s joint tenancy. This relief is available under

section 12 of the Law of Property Act , which allows a joint tenant to transfer her joint tenancy interest to herself a tenant in common interest. Therefore, it is a remedy within this Court’s jurisdiction. [ 39 ] I find that, by bringing this application before the Court, and serving it upon the Respondent, the Applicant has satisfied the requirements of s. 65 (

c) of the Land Titles Act . Order [ 40 ] Under rule 1.3 of the Rules and

section 8 of the Judicature Act , I grant an Order containing the following terms: 1. It is hereby declared that Ms. Smilley and Mr. McMillan’s joint tenancy ownership of the Property is severed, transforming their co-ownership relationship into a tenancy in common; 2. It is hereby declared that Ms. Smilley has transferred the Property to herself as a tenant in common under

section 12 of the Law of Property Act ; 3. It is hereby declared that Ms. Smilley has satisfied the notice requirement set out in

section 65 (

c) of the Land Titles Act ; 4. The Registrar of Titles is hereby directed to register the Property in the names of Ms. Smilley and Mr. McMillan as tenants in common; and 5. This Order, to the extent necessary, is nunc pro tunc to Friday, November 16, 2018; [ 41 ] Pursuant to rule 9.2(1) the Rules , I direct Ms. Smilley’s counsel to prepare a draft of the Order, in accordance with these written reasons, for the Court's review and signature. [ 42 ] If the parties are unable to agree to costs, they may make arrangements to address the Court on the matter within 60 days of the date of this Decision.

Heard on the 13 th and 16 th day of November, 2018. Dated at Grande Prairie, Alberta this 4 th day of December, 2018. R.J. Hall J.C.Q.B.A. Appearances: Glenn Taylor for the Plaintiff/Applicant

H. Kim Doniger for the Defendant/Respondent