Partition of Estate Property? Not So Fast!

March 16, 2018 Hull & Hull LLP Common Law Spouses, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Uncategorized, Wills 0 Comments

Considering an application for partition or sale of real property that was bequested to you? Then consider the effect of s. 3(2) of the Partitions Act, R.S.O 1990, Chapter P.4.

The Partitions Act allows a joint tenant or tenant in common to bring an application or an action for  the partition or sale of the land. However, s. 3(2) of the Act contains a prohibition on when such a proceeding can be commenced. In particular, where the land is held in joint tenancy or tenancy in common by reason of a devise or an intestacy, no proceeding shall be taken until one year after the decease of the testator or person dying intestate in whom the land was vested.

In Clayton v. Clayton, 2018 ONSC 1612 (CanLII), the court dismissed a motion for “partition and sale” of a property by the estate trustee of a joint holder of a property because it was brought before the expiration of one year after the death of the deceased applicant. As such, it was held to be a nullity.

The court dismissed the application for partition or sale without any reasons, other than a reference to s. 3(2) of the Partitions Act. It is not entirely clear, however, that the section applies, as the application was not brought by the beneficiaries of the estate, but rather, by the estate trustee of the estate. It is not entirely clear that the land was held in joint tenancy or tenancy in common “by reason of a devise or an intestacy”. It appears that the tenancy was between a husband and wife. The sole beneficiaries of the wife’s estate were her two children, who were not parties to the proceeding.

Clayton dealt with two other issues, as well. One issue was dismissed, and one was abandoned.

On the question of costs, the court held that as the respondent was entirely successful, he was prima facie entitled to costs. However, as there was no evidence that the applicant estate trustee was acting in breach of her duties to the estate or the beneficiaries, the court declined to make a costs award against the applicant personally. Further, as a costs award against the estate would ultimately come out of the pockets of the beneficiaries, the court declined to make a costs award against the estate. No order as to costs was made.

Keep s. 3(2) of the Partition Act in mind when considering any proceeding for partition or sale involving estate property.

For other commentary on partition or sale, see our blog “Partition and Sale” or our podcast on Partition and Sale proceedings.

Have a great weekend.

Paul Trudelle

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