Tag: title

08 Apr

Can an Attorney for Property sever a joint-tenancy in real property?

Stuart Clark Power of Attorney Tags: , , , , , , , , , , , , , , , , , 0 Comments

It is often said that an Attorney for Property can do anything on behalf of the grantor’s behalf except make a will. This is on account of section 7(2) of the Substitute Decisions Act (the “SDA“), which provides:

The continuing power of attorney may authorize the person named as attorney to do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will.” [emphasis added]

Although at first glance it would appear that the potential tasks that an Attorney for Property could complete on behalf of a grantor are almost absolute, with the Attorney for Property being able to do anything on behalf of the grantor except sign a new will, in reality the tasks that an Attorney for Property may complete relative to the grantor’s estate planning is more restrictive than this would suggest at first glance. This is because the definition of “will” in the SDA is defined as being the same as that contained in the Succession Law Reform Act (the “SLRA“), with the SLRA in turn defining “will” as including not only typical testamentary documents such as a Last Will and Testament or Codicil, but also “any other testamentary disposition“. As a result, the stipulation that an Attorney for Property can do anything on behalf of the grantor “except make a will” would include not only a restriction on the Attorney for Property’s ability to sign a new Last Will and Testament or Codicil on behalf of the grantor, but also a restriction on the Attorney for Property’s ability to make “any other testamentary disposition” on behalf of the grantor.

It is fairly common for individuals such as spouses to own real property as joint-tenants with the right of survivorship. When one joint-owner dies ownership of the property automatically passes to the surviving joint-owner by right of survivorship, with no portion of the property forming part of the deceased joint-owner’s estate. Although such an ownership structure may make sense when the property is originally purchased, it is not uncommon for circumstances to arise after the property was registered (i.e. a divorce or separation) which may make one of the joint-owners no longer want the property to carry the right of survivorship. Should such circumstances arise, one of the joint-owners will often “sever” title to the property so that the property is now held as tenants-in-common without the right of survivorship, making efforts to attempt to ensure that at least 50% of the property would form part of their estate should they predecease the other joint-owner.

Although severing title to a property is fairly straight forward while the owner is still capable, circumstances could become more complicated should the owner become incapable as questions may emerge regarding whether their Attorney for Property has the authority to sever title to the property on behalf of the grantor, or whether such an action is a “testamentary disposition” and therefor barred by section 7(2) of the SDA.

The issue of whether an Attorney for Property severing title to a property is a “testamentary disposition” was in part dealt with by the Ontario Court of Appeal in Champion v. Guibord, 2007 ONCA 161, where the court states:

The appellants argue that the severing of the joint tenancies here constituted a change in testamentary designation or disposition and is therefore prohibited by s. 31(1) of the Substitute Decisions Act because it is the making of a will.

While we are inclined to the view that the severance of a joint tenancy is not a testamentary disposition, we need not decide that question in this case. Even if it were, we see no error in the disposition made by the application judge, because of s. 35.1(3)(a) of the Substitute Decisions Act.” [emphasis added]

Although the Court of Appeal does not conclusively settle the issue in Champion v. Guibord, the court appears to strongly suggest that they are of the position that an Attorney for Property severing a joint-tenancy is not a “testamentary disposition” within the confines of the SDA.

Thank you for reading.

Stuart Clark

07 Jan

Change in Practice Direction – How to refer to “Masters” in court

Stuart Clark General Interest Tags: , , , , , , , , , , , , 0 Comments

If you are anything like me you have previously struggled with how you are to refer to Masters in court. Referring to them as “Master” always felt a little bit awkward, while at the same time you were always not sure if the more formal “Your Honour” was reserved solely for Judges.

If you have ever experienced similar uncertainty wonder no more, as the Consolidated Practice Direction for the Ontario Superior Court of Justice was recently amended to clarify how you are to refer to Masters in court. In accordance with the revised item 114 of the Practice Direction, it is confirmed that you are to refer to Masters as “Your Honour” in English and “Votre Honneur” in French.

Now that the potential embarrassment of using the incorrect honorific in referring to Masters has been resolved, now may also be an opportune time to provide a reminder that in accordance with item 58 of the same Consolidated Practice Direction lawyers are not required to gown when appearing before a Master.

So in summary, in accordance with the updated Consolidated Practice Direction you are to refer to Masters as “Your Honour” when appearing before them, while at the same time you are not required to gown. Consider yourself properly prepared for you next appearance before a Master.

Thank you for reading.

Stuart Clark

17 Apr

The Purchase Money Resulting Trust

Ian Hull Estate & Trust, Estate Planning, General Interest, Trustees, Wills Tags: , , , , , , 0 Comments

The concept of the purchase money resulting trust was considered by the Supreme Court of Canada in Nishi v Rascal Trucking Ltd, 2013 SCC 33.

Rascal Trucking Ltd. leased land from Kismet Enterprises Inc. There was a prior dispute  between the companies, which resulted in an order being granted requiring Rascal to remove topsoil from the land. Due to non-compliance with the order granted, the City of Nanaimo added the amount of $110,679.74 to Kismet’s tax bill. After this, Kismet stopped making its mortgage payments to CIBC, and as such, CIBC began paying the mortgage payments and added the amount to the mortgage debt. CIBC eventually sold the land to a principal at Kismet. Rascal contributed the amount of $110,679.74 to the purchase of the property, equal to the debt it owed Kismet. In 2008, Rascal sued Kismet’s principal claiming a resulting trust. Rascal lost at trial, won in the Court of Appeal, and lost at the Supreme Court of Canada.

As defined in the decision at paragraphs 1 and 2:

A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust.

The presumption can be rebutted by evidence that at the time of the contribution, the person making the contribution intended to make a gift to the person taking title. While rebutting the presumption requires evidence of the intention of the person who advanced the funds at the time of the advance, after the fact evidence can be admitted so long as the trier of fact is careful to consider the possibility of self-serving changes in intention over time.

The Supreme Court of Canada concluded that Rascal intended to make a substantial gift by repaying the cost of the debt. This intention was strong enough to rebut the presumption of a resulting trust, and as such, there was no resulting trust and Rascal did not hold a beneficial interest in the property.

Thanks for reading,

Ian M. Hull

Other Articles You Might Be Interested In

Resulting Trusts – Protect Yourself

Real Property and the Presumption of Resulting Trust

Resulting Trusts – Don’t Overlook Them

 

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