Volume 30, No. 4 – August 2012
Trusts & Estates Law Section
Hansen Estate v. Hansen: Severing a Joint Tenancy Through a
“Course of Dealing”
Erin Cowling
In Hansen Estate v. Hansen, 1 the Ontario Court of Appeal recently examined the type of conduct or
“course of dealing” that may sever a joint tenancy between co-owners of a property and convert it to a
tenancy in common. This issue is important in the estates context as there is no right of survivorship in a
tenancy in common and the deceased’s interest in a co-owned property passes to his or her estate, unlike a
joint tenancy where it passes to the co-owner or co-owners by right of survivorship.
The Facts
In this case, a married couple, Barbara and Willy Hansen, were in the process of separating and dividing
their matrimonial assets when Willy died. Their largest asset was the matrimonial home which they had
held as joint tenants.
Shortly before Willy’s death, Barbara had, among other things, moved out of the matrimonial home,
obtained an appraisal of the value of the home for purposes of the separation, and opened a separate bank
account from her estranged husband.
Meanwhile, Willy had the billing name for the expenses relating to the matrimonial home changed to his
name, changed the locks on the home and executed a new will excluding Barbara as a beneficiary. Also,
the Hansens each hired legal counsel to deal with their separation. Counsel exchanged a few letters
discussing a possible settlement and the drafting of a separation agreement. However, the Hansens had
not completed a formal severing of the joint tenancy of their home.
After Willy died, Barbara claimed exclusive ownership of the home through the right of survivorship,
which is the defining feature of a joint tenancy.
The trustees for Willy’s estate, his daughters from a previous marriage, disagreed. Instead, they insisted
that based on the steps that the Hansens’ had taken to separate and divide their matrimonial assets before
Willy’s death, it was Willy and Barbara’s intention that the joint tenancy be severed and that the home
was now held in a tenancy in common. The daughters brought an application seeking a declaration that
Willy’s estate was entitled to an undivided one-half interest in the home.
1
2012 ONCA 112 (CanLII)
2
The Law
After outlining the facts, the application judge reviewed the three ways to sever a joint tenancy, which are
by:
1. unilaterally acting on one’s own share, such as selling or encumbering it;
2.
a mutual agreement between the co-owners to sever the joint tenancy; and
3. any course of dealing sufficient to intimate that the interests of all were mutually treated as
constituting a tenancy in common.
In support of their application, the daughters argued that the Hansens’ actions to separate and divide the
matrimonial assets before Willy’s death were a “course of dealing” which showed that they had “mutually
treated their interests in the home as constituting a tenancy in common”.
The application judge disagreed. In determining that the joint tenancy had not been severed prior to
Willy’s death she looked to previous cases where a severance was found to have occurred through a
“course of dealing”. She concluded that the Hansens’ actions and conduct were not the same as the
actions and conduct in the previous cases.
The daughters, however, successfully appealed the decision to the Ontario Court of Appeal. The Court
found that the application judge made a reversible error by treating the previous “course of dealing” cases
as if they created recognized categories of conduct and then determined that the Hansens’ conduct did not
fit these categories. Instead, each “course of dealing” case must turn on its own facts. While the
application judge can look to previous cases for guidance, she should have looked at the Hansens’ entire
course of conduct and asked, based on that course of conduct, did the Hansens mutually treat their
interests in the home as a tenancy in common and not a joint tenancy?
After looking at all of the evidence the Court of Appeal determined that:
[u]ltimately, [Barbara’s] assertion of a right of survivorship whereby she would acquire exclusive
ownership of the property is entirely inconsistent with the co-owners’ mutual intention, as
revealed by their correspondence and their conduct, to divide their interests in the property and
hold their interests in common rather than jointly. Indeed, giving effect to the asserted right of
survivorship would confer a windfall upon the respondent at the expense of [Willy’s] estate that
would be contrary to these mutual intentions.[emphasis added]
This case is a reminder that actions can speak volumes and even if there has been no formal severing of a
joint tenancy a court may still find one based on the conduct of the co-owners. Remember, it is the
'intention' of the co-owners that is key in determining these types of joint ownership-survivorship cases as
recent case law and Supreme Court of Canada cases 2 have indicated.
Erin Cowling is an associate at Whaley Estate Litigation.
2
See Pecore v. Pecore, 2007 SCC 17(CanLII) and Madsen Estate v. Saylor, 2007 SCC 18 (CanLII).