BACKGROUND: A married couple – the respondent on appeal, Barbara Lorraine Hansen, and the deceased, Willy Hansen – held title to their matrimonial home as joint tenants. They were in the process of separating and dividing their matrimonial assets when Mr. Hansen died. At the time of his death, legal title to the home remained as a joint tenancy. After Mr. Hansen died, the respondent claimed exclusive ownership of the home through the right of survivorship, the defining feature of a joint tenancy. Two of the husband‘s daughters from a prior marriage, the appellants in the present appeal, were the trustees for Mr. Hansen‘s estate. They were of the contrary view that the joint tenancy was severed before their father died and that he therefore held the home with his wife as tenants in common. Their position was that, upon their father‘s death, his one-half interest in the matrimonial home devolved to his estate. Under the terms of his will, which Mr. Hansen had drawn shortly before his death, he left his entire estate to his four daughters. The appellants commenced an application seeking a declaration that their father‘s estate is entitled to an undivided one-half interest in the matrimonial home ('the property'). The application judge dismissed the application on the basis that the joint tenancy between Mr. Hansen and Mrs. Hansen, the respondent on appeal, had not been severed prior to Mr. Hansen‘s death. Mr. Hansen's daughters appealed.
APPELLATE DECISION: The appeal was allowed and the Court of Appeal granted a declaration that the appellants were entitled to an undivided, one-half interest in the property. At issue was the question of what constitutes a 'course of dealing' sufficient to establish that a joint tenancy in property should be declared severed, with the result that the co-owners' interests in the property are held by way of a tenancy in common. While the application judge correctly enunciated the appropriate principles concerning how a joint tenancy may be severed, she erred in her application of the established test for severing a joint tenancy. The time-honoured test is whether there was a course of dealing sufficient to intimate that the interests of the parties were mutually treated as constituting a tenancy in common. A proper application of the course of dealing test for severing a joint tenancy requires the court to discern whether the parties intended to mutually treat their interests in the property as constituting a tenancy in common. Each case is idiosyncratic and will turn on its own facts. In the present case, by adopting this category-based approach to the course of dealing test, the application judge failed to appreciate the significance of the following aspects of the evidence before her: the respondent moved out of the matrimonial home; the spouses were negotiating the separation of their family assets – the most significant of which was the matrimonial home – on the undisputed premise of achieving an equal division; the respondent took steps towards valuing her half-interest in the home; Mr. Hansen re-wrote his will in a way that was inconsistent with the operation of a right of survivorship; and the spouses opened separate bank accounts. The respondent‘s assertion of a right of survivorship whereby she would acquire exclusive ownership of the property was entirely inconsistent with the co-owners‘ mutual intention, as revealed by their correspondence and their conduct, to divide their interests in the property and hold their interests in common rather than jointly.