Canada: Agricultural Law Netletter - Sunday, January 21, 2018

HIGHLIGHTS

*

A Justice of the Alberta Court of Queen's Bench has concluded that when a parent gives an adult child a joint interest in land which is intended by the parent to be a gift, the gift may include a "irrevocable" right of survivorship, such that the parent cannot later change their mind and prevent the child from receiving the parent's interest in the property if the parent dies first, by taking legal steps to "sever" the joint tenancy. In this case, a stepfather acting on his own behalf and as attorney for an incapacitated mother, attempted to sever a joint tenancy of the two parents and their daughter in a quarter section of farmland after a Court in an earlier case had upheld the daughter's claim by ruling that the mother and the stepfather had intended to make a gift to the daughter when they transferred a joint interest in the property to her.

The decision contains an in-depth discussion of the law concerning joint tenancies and the right of survivorship. [Editor's note: The decision, and the previous Court decision between the parties, illustrates the dangers of using joint tenancy as an Estate planning device.]. (Pohl v. Midtal, CALN/2018- 003, [2017] A.J. No. 1238, Alberta Court of Queen's Bench)

NEW CASE LAW

Pohl v. Midtal;

CALN/2018-003,

Full text: [2017] A.J. No. 1238;

2017 ABQB 711,

Alberta Court of Queen's Bench,

R. Khullar J.,

November 20, 2017.

Joint Tenancy -- Transfer of Farmland by Parents to Adult Children -- Whether the

Transfer includes an Irrevocable Gift of a Right of Survivorship.

Melva Pohl ("Melva") and the Litigation Representatives for James and Vivian Midtal (the "Midtals") applied to the Alberta Court of Queen's Bench based on an Agreed Statement of Facts to determine the issue of whether or not the Midtals were entitled to severe a joint tenancy with respect to lands held as joint tenants by the Midtals and Melva.

Vivian Midtal had 5 children when her first husband died. She married Gordon Midtal in 1974. Melva was Vivian's eldest child. She and her husband were the only members of Vivian's family who farmed.

In June, 2004, Gordon and Vivian added Melva as a joint owner to the title of their home quarter (the "Home Quarter"). Vivian made a Will at the same time which left nothing to Melva.

Gordon made a Will in 2010 which left nothing to Melva, but which indicated he had already provided for her.

In August of 2007, Gordon became Vivian's attorney because Vivian's mental health was deteriorating.

With respect to the jointly owned 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.

By 2010, Vivian had moved into long term care off the farm, and the relationship between Gordon and Melva and Dennis began to deteriorate.

In September of 2012, Gordon commenced an action against Melva claiming that a resulting trust arose from the transfer of the joint interest in the Home Quarter.

In October of 2014, Moreau, J issued a decision dismissing Gordon's action, on the basis that Melva had rebutted the presumption of the resulting trust by demonstrating that the transfer of the joint interest in the Home Quarter to her was a gift: Midtal v Pohl, [2014] A.J. No. 1173, 2014 ABQB 646, 598 AR 136; CALN/2015-009.

Moreau, J concluded at para. 118 of her 2014 decision that:

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] B.C.J. No. 1901, 2010 BCCA 421 at para. 53.

In February, 2015, Gordon (acting on his own behalf and as Vivian's attorney) served Melva with a written notice of his intention to register a transfer that would sever the joint tenancy of the land.

In March of 2015, Gordon 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 land as joint tenants, and Melva as the owner of an undivided one third interest in the land.

Following Vivian's death in 2016, Gordon registered a transfer conveying Vivian's interest in the Home Quarter to him, resulting in Gordon owning an undivided two thirds interest in the land.

Gordon died in May of 2017, before the matter came to trial.

Khullar, J [at para. 67 and 68] found in favour of Melva, and concluded that Gordon and Vivian were not entitled to exercise their rights to sever the joint tenancy because, on the facts of this case, the gift creating the joint tenancy also included an irrevocable right of survivorship. As a result of the deaths of Gordon and Vivian, it was declared that Melva was entitled to be the sole owner of the Home Quarter as the surviving joint tenant.

Khullar, J observed, at para. 27, that a right of survivorship is inherent to the creation of a joint tenancy, and that if the right of survivorship continues until the death of a joint tenant, the interest of the deceased joint tenant extinguishes and passes to the surviving joint tenants:

"...so, the right of survivorship is a key part of any gift of a joint interest in property and is, arguably, one of the key elements of a joint tenancy."

Khullar, J commented, at para. 29, that it is easy to sever a joint tenancy:

[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).

Khullar, J further commented that in this case there was no dispute that the correct steps were taken under the Law of Property Act and the Land Titles Act to sever the joint tenancy, but that the issue was whether Gordon and Vivian's joint interest in the land included an irrevocable right of survivorship, and whether Gordon and Vivian had given up their right to sever the joint tenancy [at para. 30].

Khullar, J considered the decision of the Supreme Court of Canada in Pecore v Pecore, 2007 SCC 17, [2007] S.C.J. No. 17, [2007] 1 SCR 795 ("Pecore") at para. 37 to 40, andconcluded, at para. 41 and 42:

[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 crystallize 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] A.J. No. 1369, 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.

Khullar, J declined to follow the decision of the Manitoba Court of Appeal in Simcoff v Simcoff, [2015] A.J. No. 1369, 2009 MBCA 80, 245 Man R (2d) 7 ("Simcoff") and decided, instead, to follow the decision of the Saskatchewan Court of Appeal in Thorsteinson Estate v Olson, 2016 SKCA 134, [2016] S.J. No. 578, 404 DLR (4th) 453 ("Thorsteinson") stating, at para. 50:

[50] ...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 of the joint accounts when 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.

Khullar, J observed, at para. 59, that Moreau, J had made a number of key findings in her decision and that, among other things, when they transferred the land it was their intention that Melva and Bryce would receive the Home Quarter as part of their Estates by transferring it to them as joint tenants. Khullar, J. concluded, at para. 64:

[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.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
O'Sullivan Estate Lawyers LLP
Miller Thomson LLP
Minden Gross LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
O'Sullivan Estate Lawyers LLP
Miller Thomson LLP
Minden Gross LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions