A recent decision of the Supreme Court of British Columbia, Semenoff Estate v. Bridgeman, highlights the problems that can result when joint tenancy is used as an estate planning tool , non-lawyers draft their own legal documents and ask their lawyers to accept and put into writing what they have agreed to between themselves. It also highlights the pitfalls of a party self- representing himself at trial without the benefit of a lawyer.
The Semenoff family consisted of the matriarch Polly, her children William (Bill), Michael, Steve and Marion Demosky.
Polly owned some land in rural BC. Sometime in the 1970s, Polly transferred her interest in the land to her four children, as joint tenants, taking back a life estate. The children were not involved in the transaction and had no idea why their mother put the property into joint tenancy. When Polly died, sometime in 1979, her son Bill and his family moved into the home on the property where he resided for many years.
Sometime in 1987, Bill and his siblings came to an arrangement whereby Bill would repay his siblings for his use of the property and also secure some arrangement that would recognize his right to remain on the property and eventually get a portion of the property in his own name. Bill instructed his lawyer, the defendant lawyer Lewis Bridgeman to prepare an agreement between Bill and his siblings. Mr. Bridgeman was not asked to negotiate anything; rather he was instructed to put the agreement negotiated by the siblings themselves into “legalese”.
The terms of the agreement set out the following:
“1. That the “house” (lot 20) was presently registered “in all four names….”
2. That as at the date of the letter (April 10, 1987) it could not be subdivided because of water problems.
3. That Bill could remain living in the house and that he would (eventually
when subdivided) buy it and to that end provide each of his three siblings with
$7,000 towards an as yet undetermined sale price. The subdivision contemplated the creation of four lots of roughly equal size.
4. That various appraisal provisions were expressed and a statement made that Bill was permitted continued occupation of the house.
5. That provision #5 stated: “For the time being, until a subdivision can be effected, the registered ownership of the property will not change.”
Unfortunately, Mr. Bridgeman was not aware that the property was registered in joint tenancy and he did not do any title search to confirm the title to the property.
In 1990, Bill had Mr. Bridgman prepare his will which contained the following clause:
“I HEREBY DECLARE for greater certainty that I am one of the registered
owners of property legally described as Lot 20, District lot 4598, Kootenay
District, Plan 4882, but that I have a greater than one-quarter interest in such
property by virtue of an agreement contained in a letter dated April 10, 1987
from my lawyer, Lewis J. Bridgeman, to my brothers, Mike Semenoff and Steve Semenoff and my sister Marion Demosky, and that the (sic) my interest pursuant to this agreement presently forms part of my assets.”
Bill died on September 15, 2006. As the property was in joint tenancy, the surviving siblings had another lawyer (not Mr. Bridgeman) effect a transmission of the title to themselves as surviving joint tenants. Because the property was held in joint tenancy, there was nothing to devise under the terms of Bill’s will.
One of Bill’s sons, Robert, who was the executor of the estate, sued the lawyer Bridgeman in negligence for failing to protect his father’s interests under the agreement.The lawyer denied liability and indicated that he was simply following the siblings’ instructions and in particular, instructions that “until a subdivision can be effected, the registered ownership will not change”.
Robert Semenoff represented himself on behalf of the estate. A review of the reasons for judgment makes it clear that Robert failed to lead any evidence as to the standard of care to be expected of a real estate solicitor in the circumstances or any evidence as to the nature of the retainer between Mr. Bridgeman and his late father.
At the conclusion of the plaintiff’s case (9 days in total), the Court dismissed the claim on a motion to dismiss by the third parties (the other siblings) on account of the failure of the Plaintiff to adduce sufficient evidence to support the claim.
This case highlights the pitfalls of using joint tenancy as an estate planning tool particularly when a parent is gifting property to children. While the defendant lawyer in this case was found not to be negligent, the result may have been different had proper expert evidence been adduced as to the duties of a solicitor in these circumstances.