Zombie Deeds Can Finally Be Laid To Rest

• Published date: 04 November 2020
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: Cox & Palmer
• Author: Mrs Tanya Butler and Jonathan Hooper, TEP

In the spirit of the season, it seems timely to review the recent Ontario case of Thompson v Elliott Estate, which considered the validity of "zombie" deeds. As the judge in that case describes them, a zombie deed is "a transfer of an interest in land registered after the death of the grantor as if the grantor were still alive."¹

In this case, a husband and wife owned their house as joint tenants. The marriage soured, and the wife made a new will leaving her estate to the children of her first marriage instead of her third and current husband. She signed the Ontario equivalent of a deed to sever the joint tenancy, which would allow her half of the house to pass under her will, rather than by right of survivorship. The deed and the will were executed, but the deed inadvertently missed being recorded before the wife died. When the error was discovered, the lawyer recorded the deed right away. In order to do so, he had to make certain statements to the land registration office about his client's age, residency, and marital status.

The Court held that the lawyer knew or should have known the registration documents were no longer accurate because of her death, and he should not have registered the transfer.² Had the wife's death been disclosed to the land registry, the registration would have been rejected. The Court cautioned that "Lawyers that knowingly retain "zombie" deeds/transfers [.] in their files to register after the date of death of a transferor will find themselves unable to register those deeds/transfers and without recourse to the courts."³ In the end, the Court declared that the joint tenancy was in fact severed. On the date that the deed was signed, the wife had a clear intention to sever the joint tenancy immediately and unconditionally, and gave instructions to register the transfer without delay. The lawyer's error was not held against her estate.

The Court held that, in determining the validity of a deed, one must look at whether the grantor's intention and conduct was to immediately and unconditionally transfer the land at the time of execution.⁴ The status of registration is not determinative.⁵ If the grantor still retains control...