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Dealing with Life Interests in Property

Goldie and Kevin inherited a life interest in real property in Nova Scotia. Under the will, the survivor will get the property in fee simple.

Goldie wanted to have the property divided up. In the alternative, she wanted it sold and the proceeds split. Kevin opposed.

Could Goldie force the partition or sale of the lands? The Nova Scotia Court of Appeal said no.

In its decision of Fownes v. Ernst, 2021 NSCA 8 (CanLII), the Court of Appeal considered the nature of each of the party’s interests in the land. The Court considered that neither party had a “vested” fee simple interest, and only a contingent interest. At best, the parties had an “expectancy”, and an expectancy is not a property right. The right of survivorship granted in the will did not create an interest in the land until one of the life tenants died.

The Court of Appeal concluded that the Partitions Act “permits actions by those holding estates in possession, not in remainder or reversion.” Goldie could not force the sale of the land.

The Court of Appeal noted that the language of the Ontario legislation is broader, and permits life interest holders to bring partition proceedings. However, even with the broader language, Ontario courts do not permit holders of a contingent remainder interest to bring partition proceedings, as their interests were not “possessory”.

The issue is put another way in the Ontario decision of S. B. v. W. B., 2020 ONSC 5023 (CanLII). There, the court noted that partition or sale may occur where the life interest “runs concurrently” with the other interests, by not where the life interest runs “consecutively” with the other interests. Presumably, where the interests of the remainders are not immediate, but only arises after the life interest is determined, the remainders cannot seek partition or sale and oust the life tenant.

Thank you for reading. Have a great weekend.

Paul Trudelle