All About Estates

What Happens When One Joint Owner is in Debt?

While the right of survivorship is often thought of as the defining characteristic of joint tenancy, joint tenancy is also defined by “four unities.” Justice Perell succinctly defined the “four unities” in Royal & SunAlliance Insurance Company v Muir, 2011 ONSC 2273:

A joint tenancy is distinguished by what are known as four unities: (1) unity of title, the co-owners take under the same instrument; (2) unity of interest, the co-owners take an equivalent interest; (3) unity of possession; and (4) unity of time, the interest of all the co-owners vests at the same time. Joint tenants have identical undivided interests in the same property. Each joint tenant holds “totum tenet et nihil tenet” or “per mie et per tout” which means each holds everything and yet holds nothing.

Despite having a “unified” interest in the property, co-owners often lead very different lives. For example, one co-owner may run up debts (online gambling is increasing in popularity in Ontario). In that case, can the creditor seize the interest of the non-debtor joint tenant in order to satisfy the debt? The Court of Appeal of Ontario held that, in the case of judgment debts, the answer is no.

In Senthillmohan v Senthillmohan, 2023 ONCA 280, a husband and wife were in the process of getting divorced. In January 2021, they obtained an order directing them to sell the matrimonial home (which was held in joint tenancy) and to hold the net proceeds in trust pending the resolution of the wife’s equalization claim.

In September 2021, a default judgment was obtained against the husband by a third party creditor in a civil action. The third party creditor filed a writ against title to the matrimonial home. (Generally, a writ of seizure and sale of land enables a judgment creditor to seize land and sell it in order to recover the amount owing to him pursuant to the judgment.)

In October 2021, the husband and wife entered into an agreement of purchase and sale. The third party creditor agreed to temporarily lift the writ to facilitate the sale. The net proceeds, after the discharge of the existing mortgage and sale costs, was approximately $925,000.

In November 2021, before the sale closed, the wife brought an emergency motion and obtained an order severing the joint tenancy.

In February 2022, the wife brought a motion in family court seeking the release of her 50% share of the net sale proceeds. The third party creditor attended the motion and argued against the release of any funds prior to the repayment of his debt. The third party creditor argued that the husband and wife were joint tenants when default judgment was obtained and when the writ was filed; therefore, he had priority over the wife’s interest in the property. The motion judge disagreed and granted the wife’s request to an immediate distribution of her 50% share of the net proceeds.

The third party creditor appealed the motion judge’s decision. Among other reasons, the third party creditor argued that the motion judge erred by failing to consider that the writ attached to the full proceeds of a voluntary sale of jointly owned property.

The third party creditor was unsuccessful on the appeal. The Court of Appeal held: “Because a creditor cannot seize the interest of a non-debtor joint tenant, the appeal must be dismissed.” For this reason, the Court of Appeal held that the timing of the severance was irrelevant.

Citing ss. 9(1) and 10(6) of the Executions Act, RSO 1990, c E.24, the Court of Appeal held that, in Ontario, an execution creditor can only execute against the debtor’s interest in jointly held property. The Court of Appeal provided the following example, which is particularly relevant in the estates context:

…where property is jointly held and one joint tenant dies, the remaining joint tenant acquires the entire interest in the property through their right of survivorship. And, where a writ is filed against jointly held land before the debtor joint tenant’s death, it does not continue to bind the surviving non-debtor’s complete interest in the property acquired through their right of survivorship.

While this decision should give joint owners some comfort that they will not necessarily be saddled with the debts of their co-owner, severing the joint tenancy is still the best way to protect an interest in land where one of the co-owners is in debt. Severing the joint tenancy can be done at any time by either of the co-owners, and will help avoid any question about whether the entire interest in a jointly held property is available to satisfy the debts of only one of the co-owners.

About Gillian Fournie
Gillian is a lawyer with de VRIES LITIGATION LLP. Her practice focuses on the area of trusts and estates litigation. More of Gillian's blogs can be found at


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