Severance of JT Flashcards
Three ways to sever:
1) Unilateral Action by one joint tenant that destroys one of the three additional unities ( almost always “title”)
2) Mutual Intent between all joint tenants
3) Unilateral Intent by one joint tenant, falling short of breaking one of the 3 unities. (doesnt apply here in canada)
Stonehouse v AGBC (1962, SCC)
a secret transfer to a third party will sever. Note the key focus here is on the effect (i.e. was on of the unities destroyed). Severance occurs at the execution (ie. delivery) of an unregistered deed that destroys a unity
(Unilateral Destruction)
In our system, does a mortgage sever?
In Torrens, there is no conveyance to a mortgagee and the security sits on top as a burden, therefore the Australian cases have taken the position that a mortgage does not sever (because no destruction of a unity)
However in Australian jurisdiction the process of foreclosure is gone and replaced by a statutory provision by a mortgagee to execute the charge is in place – this is not the case in BC
On one hand- it is registered as a charge under Torrens which doesn’t sever in itself
On the other hand-if the capital+interest is not repaid, the mortgagee can foreclose which is predicated on the title being moved
North Van v.Carlisle–the judges were divergent as to whether a mortgage in BC conveyed the legal estate
Land Title Registrar historically takes the position that a mortgage does sever because the title in theory is conveyed so as to enable foreclosure to be applied if necessary. There is no judicial decision that authoritatively determines this
Property Law Act 18(3) - A transfer by a JT to himself/herself in f/s or by a charge has and is deemed always to have had the same effect a severance in JT as a transfer to a stranger
This would add weight to the idea that in BC we would have the theory of actual transfer of a title
There is an argument that : it only becomes a transfer of the title when and if there is a need for a foreclosure
When foreclosure arrives, we theorize that there will be a transfer of an actual title.
Howell thinks this is a sensible option.
Lyons v Lyons (1967, SC Victoria*)
should follow 3 steps to determine if there has been a severance:
(1) First, must analyse the “juristic” nature of the event i.e. what is the legal perspective – was it a transfer or simply a charge. In this case: under the Torrens System mortgages do not convey title to the mortgagee, but rather the mortgage acts as a charge (i.e. an encumbrance) on the title to secure the promise (covenant) to pay, and so legal title remains with the mortgagor. Therefore, since only a charge on the JT’s (i.e. the mortgagors) interest, the mortgage dies with the mortgagor (and so the mortgagee loses out – but suppose that the wife had died first, in which case the husband’s interest would have increased to full title, and the mortgage would remain but now with security of the whole property)
(2) Second, apply the rule that a JT is severed on loss of any of the 3 additional unities, but not severed if they aren’t affected. In this case, under Torrens system a mortgage is only a charge and so does not destroy any of the unities, therefore no severance
(3) Note are not concerned with intention of parties, but only the result/consequences of the transaction are relevant (i.e. is a unity destroyed).
Ratio: In torrens jurisdictions the situation is different re: mortgages severing title
North Vancouver v Carlisle (1922, BCCA)
Mortgage passes title in BC (OVERRULES LYONS)
Ratio: The B.C. Land Registry Act refers to a mortgage as a “charge”, but unlike other Torrens jurisdictions, we do not have legislation that allows for this charge to be converted on foreclosure and the property sold. So, at least when considering foreclosure, must continue to think of mortgages in B.C. as having transferred title according to the old common law. seems to overrule Lyons here in B.C., suggesting that the common law position of severance on mortgage applies unchanged by the B.C. Land Registry Act, and further it could be argued that to recover a security in B.C. one must rely on foreclosure so should not only consider a transfer to have taken place when actually foreclosing.
*So, in discussing these issue must describe the common law position, the two cases, and the Land Registry Act treatment of a mortgage as a “charge”.
Public Trustee v Mee (1972, BCCA)
Conveyance to trust is just like conveyance to person . Equity recognizes a severance of a JT where a trust is established through three certainties (intent, beneficiary, property) (should have double use - ziff)
Foort v Chapman (1973, BCSC)
Agreement for sale and purchase does not affect title/ does not sever JT . An agreement of sale for purchase creates a charge on a joint tenancy and does not sever until a right to conveyance is sought upon payment of installments.
Howell’s view - severance occurs at moment of specific performance and you are entitled to this upon completion of payment of installments
There are 4 ways a gift can be made from a donor to a donee:
a) by transfer, conveyance or delivery of the property to the donee
b) by transferring, conveying or delivering the property to a 3rd party as trustee for the donee
c) by the donor declaring themselves a trustee of the property for the donee
d) by will
Re: Sorensen and Sorensen (1977, alta App. Div)
The declaration of a trust by a joint tenant severs a joint tenancy (as in Public Trustee v. Mee)
A unilateral declaration by one party of an intention to sever that falls short of destroying one of the 3 additional unities, without any other act, and without acceptance by the other joint tenants, does not sever.
The onus of proof that there was a severance is on the one who asserts it.
Thus the question of whether one JT granting a lease can sever was dodged in this case and remains unresolved. Although a lease gives a right of possession by a different instrument, it doesn’t transfer legal title (which is what unity of title is all about). Some authorities say a lease only a charge/encumbrance on an estate, others say it does sever.
Suggestion that no severance so long as survivorship not lost i.e. in this case if the life holder predeceases the joint tenant then the right of survivorship is revived upon his death so no severance, but if the joint tenant predeceases the life holder then severance occurs and it becomes a TIC
Flannigan v Wotherspoon (1953, BCSC)
Severance by mutual agreement – express or implied by course of dealings/actions as if TIC
inference made from the actions of all the co-owners. Emphasis here therefore is on mutual intentions, and so must focus on the facts of the case.
Case makes it clear that parties dont need to understand the law/ the difference between TIC and JT. It focuses on how they conduct themselves.
Hansen case (not assigned) - re mutual intent to sever
Recent case where husband and wife are separating after 17 yrs. Wife leaves house and leases an apartment.
In process of dividing assets the wifes lawyer writes a letter wanting to negotiate straightforward equalization of property. Will concern all the co-owners assets including the house (he could stay in the house if wanted but would have to buy out her interest) …..
Husband replied ok lets get the valuations done, and then he dies. At that point the wife said oh hey survivorship. But the daughters of the husband from a previous marriage challenged that the documents indicated they had conducted themselves as TIC. Appeal court accepted this. The process initiated by the wife and agreed to by the husband indicate TIC. Amounted to severance
Leaves open the third category as to whether there can be a severance by a unilateral intent to sever.
Walker v Dubord (1992, BCCA)
In B.C. a unilateral (e.g. written) declaration of intent to sever, even if notice was given to other JT’s, does not sever unless carried through all the way.
The rules for realty and personalty JT’s do not differ at common law in Canada (despite the suggestion in the English Law of Property Act 1925)
Unilateral declaration of intent to sever personalty fell short of severance. Recall from above Re: Sorenson and Sorenson, (1977) (Alta. App. Div.) which said, after reviewing the authorities, a unilateral action (short of destruction of a unity) such as an application for partition in equity cannot sever…
No authority can be found regarding severance of personal property being permitted
Other cases have assumed you could do that, including one BC case, but most of those you can reconcile on the basis that it was a mutual course of dealing and not a unilateral intent.
