Just over one year ago, I blogged about Jackson v. Rosenberg, 2023 ONSC 4403, a case that shed light on the relationship between severance of a joint tenancy and the subsequent effect on a gifted right of survivorship. As it turns out, the application judge’s decision was appealed, with the Court of Appeal releasing its decision in December 2024.

The Application Judge’s Decision

For a more detailed explanation of the decision, please refer to my previous blog. To briefly recap, the respondent (“Ms. Rosenberg”) was the applicant’s (“Mr. Jackson”) great-niece. In 2012, Mr. Jackson transferred a property that he solely owned (the “Port Hope Property”) to himself and Ms. Rosenberg as joint tenants with the right of survivorship (the “2012 Transfer”). The transfer was a gift to Ms. Rosenberg. In August 2020, Ms. Rosenberg’s husband informed Mr. Jackson that they intended to sell the Port Hope Property and use the proceeds of sale to purchase a new property for all three of them to live in. Mr. Jackson was shocked and was strongly opposed to that idea, and in September 2020, he severed the joint tenancy, leaving him and Ms. Rosenberg as tenants in common of the Port Hope Property.

The court held that Mr. Jackson intended to gift the right of survivorship in the Port Hope Property to Ms. Rosenberg, however he did not intend for Ms. Rosenberg to have any beneficial interest in the Port Hope Property until he died, at which time she would receive the remaining equity in the Port Hope Property. Mr. Jackson intended, and the court agreed based on the evidence, that while he was alive, he would retain all rights and interests in the Port Hope Property and was free to deal with the property as he pleased.

While the gift of the right of survivorship took effect immediately, and that gift could not be revoked, the court found that this did not preclude Mr. Jackson from severing the joint tenancy, thereby eliminating the right of survivorship.

In conclusion, as succinctly summarized by the Court of Appeal:

The application judge concluded that the 2020 transfer severed the joint tenancy, making each of Mr. Jackson and Ms. Rosenberg a tenant in common with a 50% interest in the property. The presumption of resulting trust applied, such that Ms. Rosenberg held her 50% interest in trust for Mr. Jackson. The application judge further held that “[w]hile severance of the joint tenancy eliminates Ms. Rosenberg’s right of survivorship with respect to Mr. Jackson’s 50% share, Mr. Jackson cannot revoke the right of survivorship with respect to Ms. Rosenberg’s 50% share.” He ordered that, when Mr. Jackson dies, his 50% share of whatever equity remains in the Port Hope property will form part of his estate, while “Ms. Rosenberg’s 50% share of whatever equity remains in the property will pass to her in accordance with the intention of the [2012 transfer].”

The Court of Appeal’s (“COA”) Decision

Ms. Rosenberg appealed, submitting that the application judge erred in finding that the 2012 Transfer was limited to gifting the right of survivorship rather than a full beneficial interest with immediate rights. She further submitted that the application judge erred in giving effect to the 2020 transfer that severed the joint tenancy.

Ultimately, the COA dismissed the appeal for the following reasons:

1. The Application Judge Did Not Err in Determining the Effect of the 2012 Transfer

First and foremost, the COA noted that the application judge’s finding regarding Mr. Jackson’s intention as to the 2012 Transfer was entitled to appellate deference, and it is not the role of the COA to interfere absent a palpable and overriding error, which they did not find any evidence of. There was ample evidence to support the fact that Mr. Jackson did not intend the gift to include any rights concerning the Port Hope Property that Ms. Rosenberg could exercise during his lifetime. Ms. Rosenberg put forward further submissions about other elements of the 2012 Transfer, however the COA found these to be without merit and lacking evidence to support them.

Further, the COA found that gifting the right of survivorship unaccompanied by the gift of beneficial rights during the donor’s lifetime is properly recognized in law. It is well-known that a gratuitous transfer engages the presumption of a resulting trust, and showing that the transfer was meant as a gift rebuts that presumption. However, the authorities (which the decision goes into in more detail) have established that in the scenario where a gift was intended, but not of any current rights, and solely of what remains of the property upon death of the transferor, which was exactly the case here, this only partially rebuts the presumption.

2. The Application Judge Did Not Err in Determining that Mr. Jackson Retained the Right to Sever

As a gift cannot be revoked, Ms. Rosenberg submitted that if the effect of the 2012 Transfer was to gift her the right of survivorship, Mr. Jackson could not sever the joint tenancy as severance terminates the right of survivorship. She further submitted that Ontario law does not allow for the right of survivorship to exist in the absence of a joint tenancy. The COA did not accept these arguments and found that Mr. Jackson maintained the right to sever the joint tenancy even though doing so would end the right of survivorship for the following reasons:

1. In a joint tenancy, each joint tenant always has a unilateral right to sever at anytime. There is no basis to distinguish between joint tenancies created for consideration and those created gratuitously;
2. To adopt the view that a gifted right of survivorship precludes severance is to change the nature of the right; and
3. The nature of a gift of the right is survivorship is only to transfer what remains when the transferor dies; the gift does not on its own prevent dealings by the transferor that could strip the gift of any value.

The COA confirmed that past jurisprudence have properly applied the principles established in Pecore[1] to land, observing that a gift of the right of survivorship does not prevent the donor from dealing with the retained joint interest in a way that puts an end to the right of survivorship, for example by exercising the right to sever.

3. Should the Application Judge’s Order Regarding the Right of Survivorship Continuing over a 50% Interest Be Varied?

Interestingly, both Mr. Jackson and Ms. Rosenberg submitted that the application judge was wrong to conclude that the right of survivorship could continue in effect as to a 50% interest in the property if a joint tenancy ceased to exist. Inherently, the critical distinction between a joint tenancy and a tenancy in common is the right of survivorship.[2] The COA stated that as the joint tenancy was severed in 2020, no right of survivorship could attach or flow from Ms. Rosenberg’s interest as a tenant in common being held in trust for Mr. Jackson. The COA called the application judge’s decision on this point “an erroneous holding”, and invited both parties to make written submissions as to whether any changes to this judgment are appropriate. It is yet to be seen how this issue will be determined.

[1] Pecore v. Pecore, 2007 SCC 17.

[2] Hansen Estate v. Hansen, 2012 ONCA 112, at paras. 30-31.