Father Goes to Court Against His Children in Estate Litigation Over Property

In a recent Ontario Court of Appeal decision, the court was faced with an estate dispute between a father and his own children over the ownership of a piece of property.

What Happened?

The mother had only one daughter.

Her daughter later married and had two children with her husband.

In 1983, the mother bought a property in Ontario  and began living on it. She was the sole owner of the property

In September 1996, the mother transferred title of the property to herself and her daughter as joint tenants, for nominal consideration (the “1996 Transfer”). The daughter was an adult at that time.

In 2008, the daughter, her husband and their children moved in with the mother.

The daughter passed away on July 22, 2014. Pursuant to her will, her husband was the beneficiary of her estate.

After the daughter died, her husband continued to reside with the mother on the property.

In July or August 2015, the mother moved to a long-term care home and the husband continued to reside on the property.

The mother paid all the costs and expenses of the property until she died in 2016, continuing to do so after she had moved into long-term care. At no time did the daughter or her husband pay rent while living on the property.

On July 14, 2015, the mother made a will (the “2015 Will”). The 2015 Will named the daughter’s children as the executors and trustees.

On July 30, 2015, the mother registered a survivorship application on title to the property in her name alone. She then registered a transfer deed to the property in which she conveyed the property to herself, the daughter’s children and the husband as joint tenants (the “2015 Transfer”).

After the mother’s death, questions arose as to the ownership of the property.

In March 2018, the husband brought an application for a declaration that he owned a two-thirds share of the property.

The two children opposed the application. They claimed that they and the husband were each entitled to a one-third share of the property.

Parties’ Positions

The husband claimed a two-thirds entitlement to the property. He maintained that when he and the daughter moved in with the mother, the property became their matrimonial home and it was their matrimonial home at the time of the daughter’s death. Based on s. 26(1) of the Family Law Act (the “FLA”), he contended that the joint tenancy in the property was deemed to have been severed immediately before the daughter’s death with the result that, as the beneficiary under the daughter’s will, he became a one-half owner of the property with the mother as tenants-in-common. After the mother’s death, based on her 2015 Will, the husband said that he became entitled to an additional one-third share of the mother’s one-half interest in the property. Therefore, he claimed to be entitled to a two-thirds interest in the property and that the children were each entitled to a one-sixth interest in it.

The children contended that they and the husband were each entitled to a one-third interest in the property. They maintained that the mother transferred title to the property to herself and the daughter as joint tenants in 1996 for estate planning purposes. As a result, they argued that the 1996 Transfer raised the presumption of a resulting trust,s. 26(1) of the FLA did not apply, the daughter did not have a beneficial interest in the property and the mother’s 2015 Will operated to give each of them a one-third interest in the property.

In reply, the husband argued that he had rebutted the presumption of resulting trust and that the 1996 Transfer was a gift to the daughter of a beneficial interest in the property.

Lower Court Judgment

The application judge dismissed the husband’s application with costs to the children.

Court of Appeal Decision

First, the court agreed with the lower court judge that the 1996 Transfer was not a gift of an interest in the property to the daughter.

Second, the court found no error in the application judge’s conclusion that the presumption of resulting trust had not been rebutted.

Finally, the court found that, as the daughter was on title to the property in the capacity of a trustee, she did not have an interest in the property within the meaning of s. 18(1) of the FLA. Thus, when the daughter died, she did not own an interest in a matrimonial home as a joint tenant with the mother, a third person. Consequently, s. 26(1) did not apply and the husband could not claim an interest in the property pursuant to it.

As a result, the court dismissed the appeal.

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