When Johnston v Johnston Estate was first mentioned at the office, the facts appeared straight forward enough: David and Sharon married in 1968; they bought a house for $37,500.00; they separated in 1971; Sharon remained in the home; 40 years passed; Sharon died without a will; the house (now worth $1.2 million) passed to David.
Pardon me? If there is one thing I learned in law school it is that the law of succession does not allow an ex-spouse to inherit their former partner’s property. Under British Columbia’s Wills, Estates, and Succession Act (“WESA”), once a person ceases to be a spouse, that person no longer has a right to claim a spousal share of the estate if his or her former spouse died without a will. Though they never divorced, David and Sharon ceased to be spouses because, pursuant to s. 2(2) of WESA, they lived separate and apart for at least two years -in this case, nearly 40 years- and at least one of them had the intention to live separate and apart permanently.
At this point, you may be wondering how David could inherit his ex-wife’s home given that the law so clearly prohibits this outcome.
Thankfully for both of us, law school also taught me that when the law doesn’t make sense, it is probably because you are missing something crucial. (It is a humbling place, that law school.)
Let’s dig a little deeper, shall we?
The aforementioned facts are true, albeit incomplete. When David and Sharon purchased the property in 1968, they registered their names as tenants-in-common, each with an undivided one-half interest. They resided in the home together until they separated in 1971 at which time David moved out. David and Sharon never divorced. More importantly, David and Sharon never resolved the matter of property division. Save for a short-lived attempt at divorce proceedings, the parties had virtually no contact after their separation in 1971. Sharon paid off the mortgage in 1974 and continued to live there with her common-law spouse and son. Until her death in 2009, Sharon was solely responsible for the maintenance and care of the property. Perhaps Sharon thought that as far as the property was concerned, David was but a name on the annual property tax notice.
But then Sharon would be mistaken.
Section 23(2) of the Land Title Act, R.S.B.C. 1996, c.250, creates a statutory presumption that persons registered on title to property are presumed to hold the legal and beneficial interest. It provides that an indefeasible title is “conclusive evidence at law and in equity … that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple…”.
In other words, David’s interest remained his interest, notwithstanding his lack of use. When it comes to land, there is no legal equivalent of “use or lose it.”
After Sharon passed away, her one-half interest in the property was transferred to her son. Sharon’s son and ex-husband now each held an undivided one half interest in the property as tenants-in-common.
The issue had finally come to a head. David wanted to sell the property and collect his half of the proceeds; the son didn’t think David should be entitled to the property at all.
The law is in favour of David and here’s why:
Section 6 of the Partition of Property Act provides that where a party has a one half interest in a property and where they request the court to direct a sale of the property, the court must do so “unless it sees good reason to the contrary.” As the presiding judge pointed out, the Court’s discretion to order otherwise is narrow and something in the order of significant hardship will have to be demonstrated to avoid a sale: Ryser v. Rawlings, 2008 BCSC 1050 at para 27.
For his part, the son made a strong argument that the parties actually had a Separation Agreement, evidenced by their conduct and their limited communications they had while considering a divorce.
The judge, however, did not accept this view. Instead, Madam Justice Warren found that the parties’ conduct and limited attempts were indicative of a couple who were avoiding their problem. David did not press his claim for an interest in the property because he knew that Sharon would likely respond by pursuing a claim for spousal support. Conversely, Sharon likely did not press her claim for spousal support because she knew that David would likely respond by claiming an interest in the property. A stalemate if I ever saw one.
The result leads to an important lesson. Avoiding the issue did nothing to diminish the trouble for the parties involved in this matter; the problem simply transferred from Sharon to her offspring. Though we will never know Sharon’s final wishes, I cannot imagine it was for her son and ex-husband to spend time in court. Property division is rarely a pleasant task but it is possible. It needn’t take decades to tackle.
The judgment of Johnston v Johnston Estate, 2015 BCSC 1479 was released on August 21, 2015.