Severing A Joint Tenancy By Will; Marley v. Salga, 2019 ONSC 3527

In an unusual decision of the Ontario Superior Court of Justice (Marley v. Salga, 2019 ONSC 3527, released June 6, 2019), Mr. Justice Reid may have opened a Pandora's Box with respect to the sanctity of the holding of property in joint tenancy with right of survivorship, challenging estate planners' accepted understandings of property law, the extent of a person's estate upon death and the rights of a testator to deal with his or her interests in jointly-held property.

The testator, Leslie Salga, died in or about August 2015.[1] He was divorced from his first wife with whom he had three children: Suzanna, Michelle and Andrew. In 1999, he married Karen Marley, the applicant,[2] and was still married to her at the time of his death. In 2004, the testator and the applicant purchased the subject property (the "Loretta Drive Property") as joint tenants. The Loretta Drive Property was occupied by the testator and the applicant as their matrimonial home and was held as such at the date of the testator's death.

The testator died testate, having made his last will July 29, 2015, approximately one month prior to his death. The validity of the will was not contested as part of the applications. The will named Helmet Klassen as estate trustee. In the will, the testator purported to deal with his undivided one-half interest in the Loretta Drive Property as follows:

To allow my wife, KAREN ANNE MARLEY, if she survives me, the use, occupation and enjoyment of my one-half (1/2) interest in the house and lot municipally known as 28 LORETTA DRIVE, NIAGARA-ON-THE-LAKE, ONTARIO, on the following terms:

(i) KAREN ANNE MARLEY's right to occupy such premises is conditional upon her continuing to pay all taxes, insurance premiums, mortgage interest (if any), repairs and maintenance, and any other charges relating to the said residence. In the event that, in the judgment of my Trustee, KAREN ANNE MARLEY is in default of her obligations hereunder, my Trustee may, in my Trustee's sole discretion, give KAREN ANNE MARLEY sixty (60) days' notice to remedy the default to my Trustee's satisfaction, failing which, my Trustee will have the right to recover possession of the premises; and

(ii) KAREN ANNE MARLEY's rights with respect to the premises will cease, and her right to occupy the premises will end in any event when:

1. She dies;

2. She shall in writing advise my Trustee that she no longer desires to have such property held for her;

3. She no longer personally makes her home in said premises;

4. My Trustee decides to exercise my Trustee's right to recover possession of the premises in accordance with the terms and conditions of subclause (i) hereof;

5. She is absent from the said real property for an extended period of time with no reasonable expectation of her return to the said property; or

6. She becomes a spouse or co-habits within the meaning of the Family Law Act, R.S.O. 1990, c.F3, as amended,

whichever event shall first occur, whereupon the said dwelling house or residence shall be sold and the net proceeds shall be added to the residue of my...