Joint tenancy is a common form of ownership for family holdings
and is often used for estate planning purposes. The main benefit of
a joint tenancy is the right of survivorship which provides that
when one joint tenant dies, his or her interest in the property
passes automatically to the surviving joint tenant(s). A recent
decision of the British Columbia Court of Appeal gives a good
reminder that a joint tenant may, through his or her unilateral
actions, unintentionally sever a joint tenancy, thereby converting
ownership into a tenancy in common and extinguishing the right of
The decision in Zeligs v. Janes, 2016 BCCA 280 (CanLII) considered whether
funds withdrawn from a joint bank account by one joint tenant and
then transferred to herself for her own use would sever a joint
tenancy. In this case, Dorothy Burnett owned a property (the
"Knox Road Property") jointly with her
daughter, Diana Janes. Janes held a power of attorney for her
mother and, in 2010, she sold the Knox Road Property for $2.7
million. The net proceeds from the sale of the Knox Road Property
were deposited into a joint bank account in the names of Janes and
her mother, Mrs. Burnett. That same day, Janes withdrew the full
amount of the proceeds to pay for another property that Janes and
her husband had purchased. A few months later, Mrs. Burnett
In her will, Mrs. Burnett provided that her three grandchildren
should be given $50,000 each and the remainder of her estate should
be divided equally among her two daughters, Janes and Barbara
Zeligs. Zeligs died one year after her mother and Zeligs'
husband, as executor of Zeligs' estate, commenced an action
against Janes claiming, among other things, that the joint tenancy
on the Knox Road Property had been severed when the property was
In arriving at its decision, the BC Court of Appeal provided an
excellent summary of the law relating to joint tenancy and how a
joint tenancy may be severed. For a joint tenancy to exist, the
court affirmed that "four unities" must exist: unity
of title, unity of interest, unity of time and unity of possession.
Unity of title means that the title of each joint tenant arose from
the same instrument. Unity of interest means that the holdings are
equal in nature, extent and duration. Unity of time means that all
the interests are vested concurrently. Unity of possession means
that each joint tenant has a right to present possession and
enjoyment of the whole property but no right to exclusive
possession of any part of the whole.
Considering prior case law, the court maintained that a joint
tenancy may be severed and converted into a tenancy in common in
three ways. First, a joint tenant may act unilaterally upon his or
her share so as to destroy the four unities. Second, joint tenants
may agree to sever by mutual agreement. And third, the joint
tenants may, in the course of their dealings, intimate that their
interests constituted a tenancy in common.
On this appeal, Janes argued that a joint tenant holding a joint
bank account has the right to withdraw funds from the account and,
when he/she does, the funds become the exclusive property of the
withdrawer unless the funds are held on a resulting trust (which,
on the facts of this case, the lower court found not to exist).
Janes submitted generally that the withdrawal of funds from a joint
account does not sever a joint tenancy.
The court disagreed. The court noted that a jointly held legal
right to withdraw funds from a joint account does not enable an
accountholder to assume beneficial ownership of the funds on
deposit by the mere act of withdrawal. Further, the court found
than when Janes withdrew the funds and transferred the proceeds to
herself and her husband, she destroyed the unity of title in the
joint ownership and hence converted the interest into a tenancy in
common. Her unilateral act severed the joint tenancy and thus
extinguished the right of survivorship.
As a consequence of the severance of the joint tenancy, the
court decided that half of the sale proceeds from the Knox Road
Property flowed to the estate of Mrs. Burnett. After the gifts to
the grandchildren, Janes and her sister were to share the remainder
This case highlights that care must be taken when dealing with
assets held in joint tenancy. In particular, in dealing with bank
accounts held in joint names, a joint account holder should be
cautious in withdrawing funds unilaterally to be used for his/her
own benefit. Such unilateral actions could sever the joint interest
and the right of survivorship.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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