“Courts in this province have routinely referred to Walters (Re) and Ginn in deciding whether negotiations between spouses during a marriage breakdown have revealed an intention to mutually treat the interests in a matrimonial home as constituting a tenancy in common: see, e.g., McKee and National Trust Co. (Re) (1975), 1975 CanLII 442 (ON CA), 7 O.R. (2d) 614, [1975] O.J. No. 2234 (C.A.), at pp. 618-19 O.R.; Sampaio Estate v. Sampaio, 1992 CanLII 8603 (ON SCDC), [1992] O.J. No. 771, 90 D.L.R. (4th) 122 (Gen. Div.), at pp. 126-28 D.L.R.; Robichaud, at pp. 46-47 O.R.; Jurevicius v. Jurevicius, [2011] O.J. No. 698, 2011 ONSC 696 (S.C.J.), at paras. 21-22. Courts in other provinces have taken a similar approach in applying the course of dealing test in this context: see, e.g., Tessier Estate v. Tessier, [2001] S.J. No. 515, 2001 SKQB 399, 211 Sask. R. 50 (Q.B.), at para. 12; Lam v. Le Estate, [2002] M.J. No. 35, 2002 MBQB 31, 25 R.F.L (5th) 72, at paras. 18-20; [page255] Davison v. Davison Estate, [2009] M.J. No. 340, 2009 MBCA 100, 251 Man. R. (2d) 1 (C.A.), at para. 4.
However, the British Columbia Court of Appeal has framed the course of dealing test somewhat differently than have courts in Ontario and elsewhere in Canada. In Tompkins Estate, the court considered the meaning of the course of dealing test in the context of a marriage breakdown. Southin J.A., speaking for the court, expressed the view, at p. 199 D.L.R., that in articulating the third rule of severance in Williams v. Hensman, the vice-chancellor was “postulating a species of estoppel”. In her view, for severance to be established through a course of dealing, there must be evidence of detrimental reliance such as would ordinarily be required to invoke the doctrine of estoppel. Southin J.A. declared, at p. 199 D.L.R., that “in so far as the judgment in Ginn v. Armstrong . . . was founded on an application of the third category inconsistent with this judgment” — that is, that did not require evidence of detrimental reliance — “it can no longer be considered good law in this province”.
Southin J.A. may have been correct in stating that the vice-chancellor applied the course of dealing test to what was, on the facts of Williams v. Hensman, an instance of estoppel. However, to the extent that Southin J.A. interprets rule 3 as a “species of estoppel” requiring proof of detrimental reliance, I cannot agree.
In describing the course of dealing test, the reasons of the vice-chancellor in Williams v. Hensman do not refer to the doctrine of estoppel, nor do his reasons invoke the concept of detrimental reliance. It is possible that Southin J.A. may have viewed the course of dealing test as a species of estoppel because both legal principles are designed to prevent unfairness or injustice as between the parties. However, the elements of each doctrine are different, as are the requirements of proof.
An estoppel may be established through evidence that one party made a representation, whether communicated expressly or through conduct, to another and that the other party relied on that representation to his or her detriment: see Ryan v. Moore, [2005] 2 S.C.R. 53, [2005] S.C.J. No. 38, 2005 SCC 38, at paras. 67-69; Scotsburn Co-operative Services Ltd. v. WT Goodwin Ltd., 1985 CanLII 57 (SCC), [1985] 1 S.C.R. 54, [1985] S.C.J. No. 2, at pp. 65-66 S.C.R. Upon such facts being established, the doctrine of estoppel may be applied to prevent the party from resiling from his or her representation to prevent unfairness.
In contrast, a course of dealing that is sufficient to establish a severance of a joint tenancy requires that the co- owners knew of the other’s position and that they all treated their respective interests in the property as no longer being held jointly. However, unlike in the case of an estoppel, the course of dealing test does not require proof that a party relied to his/her detriment on a representation that a co-owner no longer wants to hold the property jointly. The rationale for severing the joint tenancy relates to the inappropriateness of the right of survivorship in circumstances where the co-owners have mutually treated their interests in the property as being held in common. The rationale is not contingent on the fact that one party relied on the representation to his/her detriment.
Indeed, a likely act of reliance in a course of dealing case would be the act of refraining from pursuing other methods of severance based on the understanding that the co-owners were mutually treating the property as a tenancy in common. However, it would be difficult to prove that the failure to pursue a different means of severance was attributable to reliance. Moreover, the challenge in proving reliance is significantly complicated by the fact that such evidence is unlikely to become relevant until after the death of the individual who is said to have relied on the representation.
In addition to generally disagreeing with Southin J.A.’s view in Tompkins that the course of dealing test is a form of estoppel requiring evidence of detrimental reliance, I respectfully cannot agree with Southin J.A.’s specific characterization of the third rule as requiring the presence of “facts which preclude one of the parties from asserting that there was no agreement” (at p. 199). Rule 3 does not require evidence of an agreement. As noted above, the English Court of Appeal concluded in Burgess that the presence of an agreement is not part of the analysis under rule 3. A request for severance in those circumstances would be dealt with under rule 2. Rule 3 relates more broadly to evidence disclosing a course of conduct indicating that the interests in the property were being held in common and not jointly.
(2) Applying the course of dealing test to the facts of this case, the application judge erred in applying the test to the evidence.”