Joint Tenancy | Tenancy in Common

A suboptimal dichotomy

Joint Tenancy | Tenancy in Common

Under our Torrens system, there are two predominant forms of ownership: tenancy in common and joint tenancy. Tenancy in common provides, essentially, that the parties own the property in the proportion listed on title. Simple. Joint tenancy, on the other hand, is an odd beast. It provides for a rather peculiar, non-capitalistic, and non-individualistic notion that both parties own all of the property.

Most lawyers probably remember the “four unities” rule of joint tenancy from law school (time, title, interest, and possession). Without going into detail, in theory this rule attracts two obvious problems, especially where the joint tenants are family members: (1) the joint tenancy can be severed unilaterally at any time by any joint tenant(s) and without the knowledge of the other joint tenant(s) (resulting in a tenancy in common), which (2) would then put the “common law” ownership of the property at odds with what is described by the land registry.

A February 2011, BC Law Institute “Report on Joint Tenancy” notes “the common law rules arose at a time when spouses could not own land in joint tenancy.” It also calls joint tenancy and tenants in common “anachronistic.” And predominantly, joint tenancy poses problems to familial owners. Yet, British Columbian families continue to put property into joint tenancy; one would assume this is driven by right of survivorship, which is not available for tenancies in common.

In the landmark case V.J.F. v S.K.W., 2016 BCCA 186 the Court of Appeal reckoned with two divergent lines of law from the Supreme Court in considering the appropriate treatment of excluded property (property a spouse would ordinarily retain after separation) that is transferred from the name of one spouse into the other spouse. Would that property be “followed” into the other spouse’s name such that the exclusion was maintained, or was the exclusion lost by way of what was ostensibly a “gift?”

The court found for the latter — the property was divisible as family property. On my analysis, it did this for two predominant reasons: (1) a more policy-centred argument: the transferor had transferred the property to his spouse’s name and thus represented to the world that the property was the transferee’s (I call this the “can’t have it both ways” test); and (2) a more technical argument under the Family Law Act that nothing was “derived from” the transferred property, and thus no exclusion remained.

The same question was subsequently raised for what would have otherwise been excluded property transferred into joint tenancy. It’s a trickier question, because it’s not so clear if the property has been “transferred” or “gifted” to the other party when it is moved into joint tenancy. The leading case on this is Pisarski v. Piesik, 2019 BCCA 129, and the Court of Appeal upheld the trial judge’s “intention” test — the transferor in that case lost their exclusion because they intended to “pool [their] contribution with [their spouse’s] funds for the purposes of the marriage” (see para 30 and on).

The intention test, of course, is extraordinarily fact driven. And generally, fact-driven tests give lawyers a good opportunity to make money, and the courts leeway to do justice on the individual cases put before them, but provide little in the way of certainty, predictability, or a speedy and inexpensive resolution to claims for other litigants or would-be litigants.

All of this makes it awfully tricky for parties in relationships to arrange their affairs in a streamlined, certain manner. Practically speaking, they either have to create and maintain documentary evidence during their relationships recognizing their intended treatment of transfers, or roll the dice down the road. I imagine most spouses do not have the legal sophistication necessary to form an intention “to pool” or “not to pool,” and so I suspect most of these arguments are probably post hoc attempts to rationalize past behaviour through faulty human memory. In the result, parties essentially have no easy, automatic, or compulsory mechanism by which they can recognize their desired treatment of contributions to shared property during a relationship, if they also want a right of survivorship.

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