



COURT OF APPEAL FOR ONTARIO

CITATION: Jansen v.
    Niels Estate, 2017 ONCA 312

DATE: 20170418

DOCKET: C61687

Simmons, Pepall and
    Huscroft JJ.A.

BETWEEN

Marjolein Jansen

Applicant (Appellant)

and

The Estate of Theadora
    Anna Robertina Niels by her Estate Trustee, Richard Eugene Jan Niels, Richard
    Eugene Jan Niels personally,
Ingrid Niels
, Arend Karel Frans Shoemaker,
    Jessica Shoemaker, Albert Jan Shoemaker and Alan Melville John Stephens

Respondents (
Respondent
)

Colin A. Brown, for the
    appellant

Judith L. Turner for the
    respondent, Ingrid Niels

Heard: November 14, 2016

On appeal from the judgment of
    Justice Hugh K. OConnell of the Superior Court of Justice, dated January 12,
    2016, and from the cost order dated November 1, 2016.

By the Court

[1]

This appeal concerns the estate of Theadora Niels, who died in November
    2010. The principal issue is whether her interest in her house passed by right
    of survivorship to her daughter-in-law, Ingrid Niels, pursuant to a joint
    tenancy established by gift, or became part of her estate that is to be shared among
    her children.

[2]

Theadoras daughter, Marjolein Jansen, brought an application seeking a
    declaration that the house is part of the estate and should be distributed
    under a will and codicil made in 2004. Her application was dismissed by the
    application judge. She appeals from that decision and seeks leave to appeal the
    application judges costs award.

[3]

The appeal is dismissed for the reasons that follow. Leave to appeal the
    costs award is granted but the appeal is dismissed.

A.

Background

[4]

Theadora Niels made two wills prior to the 2004 will and codicil, one in
    1998 and one in 1999. These wills divided her estate into three shares, one for
    her son Richard, one for Marjolein, and one to be divided between her son Arend
    (Frank) and his children.

[5]

Marjoleins relationship with Richard was not good. She and her mother were
    once close, but this changed when her mother began a relationship with a
    live-in companion in 1998.

[6]

Things came to a head in 2004, when Marjolein noticed a for sale sign
    on Theadoras property. On November 29, 2004, Marjolein wrote a provocative
    letter to her mother asserting that the sale of the property was her business;
    that Theadora had always said that the house belonged to her and her brothers
    Richard and Frank; and that it was wrong for Theadora to sell the house.

[7]

Marjolein also criticized Ingrid, who was married to Richard at the
    time, and her motives, stating that Ingrid and Richard had succeeded in getting
    rid of her and Frank. Marjolein said that Ingrid was interested only in her
    inheritance and would not care for Theadora, but, instead, would put her into a
    nursing home before she knew it. The letter concluded: You better tell me to
    my face that you have disinherited me.

[8]

Marjolein received no response to her letter. She and her mother never
    spoke again.

[9]

On December 1, 2004  two days following Marjoleins letter  Theadora
    made a new will. She removed Marjolein as an executor but continued to leave
    her a one-third share of her estate. Richard remained executor and Carol Harding,
    the assistant to Theadoras lawyer, was added as an alternate executor.

[10]

Theadora
    had purchased the property that is the subject of this appeal  2425 Flos Road
    10 East, Elmvale Ontario (Flos Road property)  but the sale had not yet
    closed when she made her new will. A codicil dated December 1, 2004 was
    executed providing that if Theadora died before title was taken to this
    property, title would be taken by Richard and the purchase would be funded by
    Theadoras estate.

[11]

Theadora
    took title to the Flos Road property on April 29, 2005. However, title was
    converted to a joint tenancy in two subsequent transactions. On July 18, 2005,
    Theadora transferred title to herself and Richard as joint tenants. On March 5,
    2007, Theadora and Richard transferred title to Theadora, Richard, and Ingrid
    as joint tenants.

[12]

Following
    the purchase of the Flos Road property, an addition of approximately 2800
    square feet was built, which Richard and Ingrid occupied.

[13]

On
    February 28, 2009, Richard and Ingrid signed a separation agreement that
    Richard prepared from a form he obtained on the Internet (2009 separation
    agreement). The agreement, which was made without legal advice, provided that
    Richard would transfer his interest in the Flos Road property to Ingrid following
    the death of Theadora and, among other things, stated that the Flos Road
    property was to be the inheritance of their children. The separation agreement
    also provided (presumably in error) that until transfer  Party 1 [Richard]
    would have the right to exclusive occupation and possession of the matrimonial
    home.

[14]

Theadora
    was diagnosed with cancer in 2010 and given 6-12 months to live. She asked
    Ingrid to take care of her and Ingrid did so. Shortly before her death on November
    22, 2010, Theadora made a phone call to her alternate executor, Carol Harding
    (dialing the number with Ingrids assistance), seeking assurance that the Flos
    Road property would go to Richard and Ingrid when she died. Ms. Harding assured
    her of this.

[15]

On
    October 31, 2011, Richard and Ingrid signed an Amending Agreement to their 2009
    separation agreement. The Amending Agreement, prepared by a lawyer, stated that
    they jointly owned the Flos Road property and that Richard was transferring his
    right, title and interest to Ingrid. On December 12, 2011, a transfer was
    registered, transferring title from Richard and Ingrid to Ingrid alone.

[16]

On February 17, 2012, Marjolein brought her application seeking a
    declaration that the Flos Road property is part of Theadoras estate.

B.

The application judges decision

[17]

The
    application judge flatly rejected Marjoleins allegation that Ingrid had, in
    essence, taken advantage of Theadora and thereby deprived Marjolein of her
    share of the Flos Road property as an inheritance.

[18]

The
    application judge found that Ingrid was a caring and loving daughter-in-law and
    accepted her evidence completely. He found that Ingrid cared for Theadora, in
    contrast to what he described as the callousness shown to Theadora by Marjolein
    and her husband. Where the evidence conflicted, the application judge accepted
    the evidence of Ingrid over that of Marjolein and her husband.

[19]

The
    application judge found that although she did not say specifically that she was
    gifting the Flos Road property, Theadora clearly intended to do so and
    completed her gift in accordance with the requirements set out by this court in
McNamee v. McNamee
,
2011 ONCA 533, 106 O.R. (3d) 401 and
Foley v. McIntyre
, 2015 ONCA 382,
    125 O.R. (3d) 721. The gift was fully and freely informed and the presumption
    of undue influence was rebutted. The application judge found, at para. 187,
    that to the end, Mrs. Niels was cognitively engaged, unfettered by persuasion
    and did what she wanted. The evidence is clear on this point. There is simply
    no evidence to suggest otherwise. Consequently, the resulting trust
    presumption was rebutted.

[20]

The application judge found that Theadora acted with legal advice
    in creating the joint tenancy, first with Richard and then with Richard and
    Ingrid, and that Theadora understood the difference between joint tenancy and
    tenancy in common. The application judge stated, at para. 180: There is not
    one scintilla of evidence to suggest that the parties intended to mutually
    treat the tenancy as constituting a tenancy in common. He stated, further,
    that the 2009 separation agreement between Ingrid and Richard did not evidence
    a course of conduct to sever the bona fide joint tenancy. The application
    judge did not address the concept of severance in detail. Instead, he adopted the
    submissions of counsel for Ingrid that the joint tenancy had not been severed, submissions
    that were based on this courts decision in
Hansen Estate v. Hansen
,
2012 ONCA 112, 109 O.R. (3d) 241.

[21]

The
    application judge found that no shenanigans, or manoeuvres of title were used
    to deprive the estate of an asset. He found no unjust enrichment and no
    constructive trust. The application judge summarized his decision as follows,
    at para. 191:

[T]his case [concerns] an inter vivos gift meant to be
    accomplished outside of the estate stream, and I am completely satisfied that
    the gifting and the intent of the testatrix make for bona fide ownership of the
    property in the hands of Ingrid Niels.

C.

Issues on appeal

[22]

Marjolein
    submits that the application judge made several errors in his judgment and
    costs award. The issues may be summarized and addressed as follows:

1.

Did
    the application judge err in concluding that the joint tenancy had not been
    severed?

2.

Did
    the application judge err in concluding that Theadora gifted the property to Richard
    and Ingrid?

3.

Did
    the application judge err in concluding that Theadora was not subject to undue
    influence?

4.

Did
    the application judge err in awarding costs against her and not the estate, or,
    in the alternative, err in the amount that he awarded?

D.

Analysis

Was the Joint Tenancy Severed?

[23]

It
    is well established that severance of a joint tenancy may be achieved in one of
    three ways  described as the three rules in
Hansen
, at para 34, and
    summarized as follows:

Rule 1: unilaterally acting on ones own share, such as selling
    or encumbering it;

Rule 2: a mutual agreement between the co-owners to sever the
    joint tenancy; and

Rule 3: any course of dealing sufficient to intimate that the
    interests of all were mutually treated as constituting a tenancy in common.

[24]

Marjoleins
    primary submission is that that the joint tenancy was severed by the 2009
    separation agreement, pursuant to which Richard agreed to transfer his interest
    in the property to Ingrid on the death of Theadora and, which, in any event,
    included a grant of exclusive possession of Richard and Ingrids matrimonial
    home. This, it is said, means that Theadoras interest is no longer identical
    in nature, extent, and duration to Richards or Ingrids, and that both Richard
    and Ingrid hold their interests as tenants in common. Marjoleins submission
    relies on Rules 1 and 3.

[25]

This
    submission must be rejected.

[26]

First, as to Rule 1, assuming that the 2009 separation agreement
    between Richard and Ingrid was valid and enforceable  a matter not addressed
    by the application judge  it did no more than express an intention to convey
    Richards interest in the Flos Road property in the future. It is not clear
    that an expression of intention is sufficient to achieve severance: see Kevin
    Gray and Susan Francis Gray,
Elements of Land Law
,
    5th ed. (
Oxford: Oxford University Press, 2009), at p. 950.

[27]

The
    agreement is ambiguous, as might be expected given the parties lack of legal
    advice. But the submission that conveyance of Richards interest, and the grant
    of exclusive possession, severed the joint tenancy fails in any event, for a
    more fundamental reason. Where, as here, there are three joint tenants, the
    conveyance of one joint tenants interest to another, or the grant of exclusive
    possession by one joint tenant to another, severs only the interest of the
    joint tenant making the conveyance or granting exclusive possession. It does
    not sever the whole of the joint tenancy.

As
    Latham C.J. explains in
Wright v. Gibbons
, [1949] 78 C.L.R. 313 (H.C.A),
    at p. 324-325:

If there are three joint tenants, A, B and C, and one joint
    tenant A transfers his interest to another joint tenant B, the result is that A
    then has no interest in the land, B becomes a tenant in common as to one-third
    interest in the land, and remains a joint tenant with C as to a two-thirds
    interest.

See also:
Megarry & Wade: The Law of Real
    Property
, 8th ed.
(London:
    Sweet & Maxwell, 2012), at p. 513; Gray, at pp. 947-948, Bruce Ziff,
Principles of Property Law
, 6th ed. (Toronto: Carswell,
    2014), at pp. 344-345; and
Anger & Honsberger
, loose-leaf, 3rd ed.
    (Toronto: Thomson Reuters, 2016), at para. 14.20.120.

[28]

Thus,
    the 2009 separation agreement could sever no more than Richards one-third interest
    in the joint tenancy. The joint tenancy held by Theadora and Ingrid over their two-thirds
    interest of the Flos Road property would subsist, with Richard holding a
    one-third interest as a tenant in common. When Theadora died, the two-thirds interest
    she held jointly with Ingrid passed to Ingrid by survivorship, leaving no
    portion of the property to pass to her estate.

[29]

If, on the other hand, the separation agreement
    did not have the effect of severing Richards interest in the joint tenancy
,
then the joint
    tenancy continued. On Theadoras death, her one-third interest would have
    passed to Richard and Ingrid by right of survivorship, leaving no portion of
    the property to pass to her estate. Richard and Ingrid would have become joint
    tenants of the whole of the Flos Road property.

[30]

Thus,
    in either case, no part of the Flos Road property would become part of the
    estate.

[31]

Marjoleins
    submission that the joint tenancy was severed by the provision in the 2009
    separation agreement that Richard and Ingrids children would inherit the
    property must also be rejected. In general, a joint tenancy is unaffected by a
    will, because property is conveyed pursuant to the joint tenancy outside the
    terms of the will: see Ziff, at pp. 345-346. However, even assuming that the
    simultaneous execution of mutual wills could have the effect of severing a
    joint tenancy, no finding was made that mutual wills were executed in this case.

[32]

Marjoleins
    submission that the parties made a mutual decision to sever the joint tenancy
    must also be rejected.

[33]

As
    the court explained in
Hansen
, at para. 7:

A proper application of the course of dealing test for severing
    a joint tenancy requires the court to discern whether the parties intended to
    mutually treat their interests in the property as constituting a tenancy in
    common. It is not essential that the party requesting a severance establish
    that the co-owners conduct falls into a formulation found to have had the
    effect of severing a joint tenancy in other cases. The courts inquiry cannot
    be limited to matching fact patterns to those in prior cases. Rather, the court
    must look to the co-owners entire course of conduct  in other words the
    totality of the evidence  in order to determine if they intended that their
    interests were mutually treated as constituting a tenancy in common. This
    evidence may manifest itself in different ways.

[34]

In
    short,
Hansen
requires a court to determine,
    having regard to all of the evidence, whether the parties intended to treat
    their interests as constituting a tenancy in common. This is a fact-specific
    inquiry that is subject to deference on appeal.

[35]

As
    noted above, the application judge found not one scintilla of evidence that
    the parties intended to mutually treat the tenancy as a tenancy in common. He
    found, further, that Richard and Ingrids 2009 separation agreement did not
    evidence a course of conduct to sever the bona fide joint tenancy. This was so
    in spite of any divided living or exclusive possession arrangements related to the
    occupation of the property.

[36]

These
    findings were open to the application judge on the record before him and they
    are fatal to this submission.

Was the Property Gifted?

[37]

Marjolein
    submits that the application judge erred in several respects in concluding that
    Theodora gifted the Flos Road property to Richard and Ingrid. For example, Marjolein
    notes that Richard claimed to have purchased the property; that Ingrid did not
    claim that a gift had been made to her until the hearing; that neither
    Theadoras lawyer nor her alternate executor, Carol Harding, testified that a
    gift had been intended; that there was no explanation for the exclusion of
    Frank from the will; and that the will, at the time of the transfers, had
    divided both real and personal property into thirds for the three children.

[38]

Marjolein
    adds that the application judge erred in assuming that Theadoras action in
    placing her property into joint names was evidence that a gift was being made. Finally,
    Marjolein argues that the application judge wrongly relied on notes documenting
    a visit and phone call Theadora made to her lawyers office in determining her
    intention concerning the gift.

[39]

These
    submissions must be rejected.

[40]

The
    application judge applied the proper test for a gift, as set out in
McNamee
and summarized in
Foley
at para.
    25
: To establish a gift, one must show intention to donate,
    sufficient delivery of the gift, and acceptance of the gift.

[41]

As
    the application judge noted, it was not necessary for Theadora to state that
    she was gifting the property. Her intention to gift the property was evident
    from her instructions to her solicitor and his assistant and the executed
    documents, all of which supported this finding. This included:

·

her
    advice to her solicitor that she would take title alone and add Richard to the
    deed later;

·

the
    codicil to her will, making it clear that the home would not form part of her
    estate;

·

her
    request that the joint tenancy between herself and Richard be created on his
    return to Canada;

·

the
    absence of any request to revert the title to tenancy in common; and

·

her
    call to Carol Harding seeking assurance that her home would pass to Richard and
    Ingrid on her death.

[42]

Furthermore,
    the application judge found that Theadora received legal advice from a lawyer
    who knew her well; that she understood the consequences of joint tenancy as
    opposed to tenancy in common; and that she was mentally engaged and cognitive
    until her death.

[43]

The
    application judge did not wrongly rely on evidence of notes documenting
    Theadoras visit to her lawyers office in September 2004 and a phone call made
    to the office in November, 2004, in determining her intention concerning the
    gift. The application judges reasons, and in particular para. 148, do not
    reflect acceptance of the notes on Theadoras visit as evidence of intention.
    Rather, the notes were part of the narrative explaining the steps that led to
    title being in the names of Theadora and Richard and the contents of the
    codicil. This would also help explain why the appellant took no objection at
    trial to the admission of the notes.

[44]

As for the note documenting the
    November, 2004 call, although it was not admissible for the truth of its
    contents, its use was limited and served to provide a chronology of a visit
    that Marjoleins husband admitted he made to Theadora. Theadoras upset could
    reasonably be inferred from: the evidence proffered by the appellant including
    her incendiary letter sent to her mother dated November 29, 2004; the will and
    codicil made two days later; the appellant's testimony that her mother would
    not talk to her; and the fact that November 29, 2004 was the last time the
    appellant talked to her mother. We note also the application judge's finding of
    Theadora's independence and capacity; Theadoras estrangement from the
    appellant; and the application judges credibility findings favouring Ingrid.
    In sum, the note of the telephone call had no material bearing on the outcome
    of the application.

Was Theadora Subject to Undue Influence?

[45]

Marjolein
    submits that the application judge erred by, in effect, requiring her to
    establish undue influence rather than simply demonstrate that the relationship
    of the parties gave rise to a potential for undue influence.

[46]

There
    is no merit to this submission.

[47]

The
    application judge applied the law as set out in
Foley
, in which this
    court noted, at para. 28, that the presumption of undue influence applies [w]here
    the potential for domination inheres in the relationship between the transferor
    and transferee, citing
Goodman Estate v. Geffen
,
    [1991] 2 S.C.R. 353, at p. 378. Where the presumption applies, the transferee
    must establish that a gift was the result of the full, free, and informed
    thought of the transferor. Evidence that the transferor received qualified and
    independent advice can be used to rebut the presumption, although it is not
    required in every case. But corroborating evidence is required in order to
    rebut the presumption, whether direct or circumstantial in nature.

[48]

The
    application judge applied the presumption that undue influence was exerted, but
    based on his factual findings concluded, at para. 184, that the potential for
    domination and therefore undue influence is completely rebutted. The application
    judge emphasized the independence of Theadora. He found that her advanced age
    was not a trigger for domination. This was not a case in which a totally new
    estate plan had been entered by a person facing a terminal illness. Theadora
    was pursuing an intention to gift the property that she developed in 2004 and
    never wavered from. She was cognitively engaged and unfettered by persuasion.

[49]

Although
    the application judge said that Marjolein provided no evidence of undue
    influence, when his decision is read as a whole, it is clear that he did not
    reverse the burden of proof and require Marjolein to prove undue influence. On the
    contrary, the application judge acknowledged the operability of the presumption
    but found that it was rebutted. As the application judge put it, at para. 179:
    Nothing in the evidence causes me any concern that the direction and eventual
    registration of the tri joint tenancy deed, was done with anything less than
    the full acquiescence, acceptance and complete concurrence of Mrs. Niels.

[50]

This
    ground of appeal must be rejected.

Costs Award

[51]

The
    application judge awarded the respondent costs of $55,951, inclusive of taxes
    and disbursements.

[52]

Marjolein
    submits that the application judge erred in awarding costs against her and not
    against the Estate. She says that the Estate was a party to the proceedings and
    the application judge erred in concluding otherwise. She submits, further, that
    Theadora was at fault for failing to spell out her intentions with regard to placing
    the property into joint names, and a hearing was required to determine the matter
    as a result. In these circumstances, public policy considerations require the
    Estate to pay costs.

[53]

We
    would reject this submission.

[54]

The
    Estate had minimal involvement in the proceedings and was not represented at the
    hearing. The litigation was brought by Marjolein in an attempt to undo
    arrangements Theadora had made in order to ensure that no part of the Flos Road
    property would pass to her. Marjoleins submissions were rejected
    comprehensively by the application judge and her application was dismissed. We
    see no public policy considerations that warrant relieving her of the
    responsibility to pay costs normally borne by the losing party: see
McDougald
    Estate v. Gooderham
(2005), 255 D.L.R. (4th) 435 (Ont. C.A.).

[55]

As
    to the quantum, the application judge considered the fairness, reasonableness,
    and proportionality of the costs in all the circumstances. As the application
    judge noted, the parties cost outlines were within $1,000 of each other, with counsel
    for Marjolein seeking the slightly higher amount. In all of these
    circumstances, we would not interfere with the exercise of the application
    judges discretion.

E.

Disposition

[56]

The
    appeal is dismissed.

[57]

The
    respondent is entitled to her costs on the appeal, fixed in the amount of $9,000,
    inclusive of taxes and disbursements.

[58]

Leave
    to appeal the costs awarded on the application is granted, but the appeal is
    dismissed.

Released: SEP APR 18 2017

Janet Simmons J.A.

S.E. Pepall J.A.

Grant Huscroft J.A.


