In September of 2022, the Supreme Court of British Columbia released a decision wherein the Court found that a joint tenancy can be considered an inter vivos gift of survivorship rather than a joint tenancy, regardless of what the legal title says.

In Kennedy v. Smith, 2022 BCSC 1622, Mr. Smith, the Petitioner, sought a declaration that the proceeds of the sale of a jointly owned home owing to the other joint tenant on title be held on a resulting trust, or alternatively, in a constructive trust on the basis of unjust enrichment. Ms. Kennedy, the Respondent, sought a division of family property, spousal support, and a protection order against Mr. Smith.

Ms. Kennedy claimed that the pair were involved in a marriage-like relationship, although there was no evidence of a romantic or sexual relationship, the two did not present themselves to the world as a couple, they engaged in no shared leisure activities, and did not carry out personal, housekeeping, or caregiving support for each other. For these reasons, the Court determined that there was no marriage-like relationship, and Ms. Kennedy’s claims under the Family Law Act were dismissed. The case proceeded on the basis of the resulting trust claim.

Mr. Smith and Ms. Kennedy were good friends. Around 2011 Mr. Smith was planning to buy a home at the same time that Ms. Kennedy was being evicted. The downpayment and all the mortgage payments were made by Mr. Smith, although both the title and the mortgage were registered in joint tenancy. Mr. Smith stated that this was because Ms. Kennedy was at that time his closest friend, and it was his intention that she inherit his house upon his death. He did not consult her when he bought it, and did not consider it to have anything to do with her. He offered Ms. Kennedy the option of living with him, which she accepted, but at all times he understood the house to be his property, and not hers. The Court agreed and found that at no point was the house treated as joint property, and that both parties treated it as Mr. Smith’s house. Mr. Smith made the argument that his gift of joint tenancy was really a gift of a right to survivorship, which would take effect upon his death and which was now meaningless since the property subject to that survivorship had since been sold.

The Court considered whether Ms. Kennedy had provided any consideration for the purchase of the house and found that despite her theoretical exposure to mortgage liability, she had not provided any consideration, and that as a result, the transfer was completely gratuitous.

The Court looked at Petrick (Trustee) v. Petrick, 2019 BCSC 1319, and noted that there are three legal scenarios that can arise when a gratuitous transfer of property into joint tenancy is made.

1. A true joint tenancy with full rights of ownership as a joint owner beneficially;
2. A resulting trust where the property is held on trust for the donor’s estate upon their death; or
3. A gift of the right of survivorship where the donee receives what remains upon the donor’s death.

The Court determined that Mr. Smith was clear that he did not want Ms. Kennedy having an ownership interest in the house during his lifetime, and only wanted her to inherit upon his death. The registration of joint tenancy had therefore created an immediate inter vivos gift of survivorship in property, where Mr. Smith retained all the remaining right and interest in the property during his lifetime, and where Ms. Kennedy only had whatever was leftover of Mr. Smith’s interest in the home upon his death, which following its sale, was nothing. As a result, the Court found that the proceeds of the sale equitably belonged to Mr. Smith.

This case may be instructive in cases where a home is registered in joint tenancy, but where there is clear, credible, and uncontroverted evidence of the purchaser’s intentions when the property was registered in joint tenancy.