“In the case of Hansen Estate v. Hansen, 2012 ONCA 112 (CanLII), 109 O.R. (3d) 241, at para. 32, the Ontario Court of Appeal endorsed three ways in which a joint tenancy may be severed, referring to the classic statement by Vice-Chancellor Wood in Williams v. Hensman (1861), 70 E.R. 862, (Eng. Ch.), at p. 867:
A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund — losing, of course, at the same time, his own right of survivorship. Secondly, a joint-tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been effected, as happened in the cases of Wilson v. Bell [(1843), 5 Ir. Eq. R. 501 (Eng. Eq. Exch.)] and Jackson v. Jackson [(1804), 9 Ves. 591 (Eng. Chancellor)].
Chief Justice Winkler continued in Hansen Estate at para. 34:
The three modes of severance referred to in Williams v. Hensman have come to be known as the “three rules” … [which] may be summarized as follows:
Rule 1: unilaterally acting on one’s 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.
For the purpose of these applications, the parties agree that the potentially relevant mode of severance is by a “course of dealing.”
The equitable principle underlying the rule is to prevent a party from asserting a right of survivorship where doing so would not do justice between the parties in cases where there is no explicit agreement to sever the joint tenancy.”
