Gratuitous Transfers Into Joint Tenancy And The Gift Of The Right Of Survivorship: Part 2

• Jurisdiction: Canada
• Law Firm: Miller Thomson LLP
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Real Estate, Landlord & Tenant - Leases
• Author: Ms Lauren Hamilton and Gail Black
• Published date: 26 April 2023

In the first part of this two-part series, we discussed the ownership interests that can arise when property is gratuitously transferred into joint tenancy. We focused specifically on the gift of the right of survivorship. In this second part, we will discuss how the gift of the right of survivorship is applied when dealing with real property.

When it comes to real property, Canadian Courts are divided on whether the ability of the donor to deal with his or her property remains unrestricted during his or her lifetime when a gift of the right of survivorship has been made.

The Manitoba and British Columbia approach

Both the Manitoba Court of Appeal and the British Columbia Court of Appeal have held that the gift of the right of survivorship does not limit the donor's right to sever the joint tenancy during the donor's lifetime. In Simcoff v Simcoff¹, a mother transferred title into joint tenancy with her son. Years later, after the mother and son had a falling out, the mother sought a declaration that she was the sole owner of the property, or, in the alternative, she sought an order for partition and sale of the property. The Manitoba Court of Appeal had to decide if the lower Court erred in law in finding that the presumption of resulting trust had been rebutted and in dismissing her application for partition and sale. The Court held that:

... where an individual, such as this mother, is found to have made a gift of one-half joint interest in property to her son, she cannot retract that gift at a later point in time. However, the right of survivorship is an incident of joint tenancy that takes effect only if the joint tenancy continues to exist as of the death of one of the joint tenants. The gift of one-half of the property cannot be rescinded, but the joint tenancy can be converted into a tenancy in common, which does not carry with it the right of survivorship.

Simply, and conceptually, the fact that a "complete gift" may have been given and that this gift included a right of survivorship does not, prima facie, prevent a donor from dealing with the retained joint interest while alive...²

The Court found that bank accounts can be drained and joint tenancy in real property can be severed; the gift of the right of survivorship does not prevent such actions from being taken.³

The British Columbia Court of Appeal has consistently adopted this view. In 2016 in the decision of Zeligs Estate v Janes⁴ Dickson J.A. held that:

The principal and distinguishing...