Jackson v. Rosenberg, 2025 ONCA 48, offers important guidance for real estate lawyers on joint tenancy severance and resulting trusts. This decision of the Ontario Court of Appeal clarifies fundamental principles that every transactional lawyer should understand when dealing with co-ownership structures.
The Facts
The case involved a property in Port Hope, Ontario, with a complex factual background that illustrates the risks of using joint tenancy for estate planning purposes.
Nigel Jackson and Bernie Taube were long-time romantic partners (since 1963) who ran an antiques business together. When Taube died in 2010, Jackson became the sole owner of a Yorkville condominium they had owned jointly, through right of survivorship. Jackson sold this property in May 2011 and used the proceeds to purchase the Port Hope property, taking title as sole owner.
In February 2012, Jackson transferred the property from himself as sole owner to himself and Lori Rosenberg (Taube’s great-niece) as joint tenants. Jackson’s stated intention was estate planning – he wanted to avoid probate fees while ensuring the property would pass to Rosenberg upon his death. Crucially, Jackson had no intention of gifting any present interest to Rosenberg, and she never lived at the property or contributed financially to it.
The arrangement worked smoothly until August 2020, when Rosenberg’s husband allegedly told Jackson they planned to upgrade and sell his home, using the proceeds to buy a golf course property where Jackson could live with them. Shocked by this conversation, Jackson became concerned about losing control of his home and instructed his lawyer to sever the joint tenancy in September 2020.
Rosenberg contested this severance, arguing that Jackson’s transfer was an unconditional gift and that the severance breached his fiduciary duties as trustee of the property. She also claimed there was a tripartite agreement between herself, Jackson, and Taube regarding the distribution of their estates.
The Application Judge’s Error
The Superior Court judge made several correct findings: the joint tenancy was validly severed, creating a tenancy in common, and Rosenberg held her 50% interest on resulting trust for Jackson. The conclusion pertaining to the resulting trust was based on the undisputed fact that the transfer to Rosenberg as joint tenant was a gratuitous transfer and that, pursuant to Bradshaw v. Hougassian, 2023 ONSC 3266, a resulting trust arises in such situations.
However, the judge made a critical error by concluding that Rosenberg retained a “partial right of survivorship” in her favour even after the joint tenancy was severed.
This error was reflected in the original formal judgment, which stated: “when Mr. Jackson dies, Ms. Rosenberg’s 50% share of whatever equity remains in the Port Hope property will pass to her through the right of survivorship.”
The Court of Appeal’s Correction
Both parties agreed the application judge erred on this point. The Court of Appeal emphasized a fundamental principle: a right of survivorship cannot exist in a tenancy in common.
The Court referenced Hansen Estate v. Hansen (2012), 2012 ONCA 112, to clarify the critical distinction between joint tenancies and tenancies in common:
“Through the right of survivorship, the interest of a co-owner in a joint tenancy will pass equally to all of the other co-owners upon his or her death… In contrast, upon the death of a co-owner in a tenancy in common, the deceased’s interest in the property passes to his/her estate.”
The Court confirmed that, before the 2020 transfer, Rosenberg held her interest in the joint tenancy in trust for Jackson, and she had a right of survivorship. The Court, however, explained that once the joint tenancy was severed in 2020, “what Ms. Rosenberg continued to hold was an interest in a tenancy in common in trust for Mr. Jackson. No right of survivorship could attach to or flow from that interest.”
Resulting Trust Principles
The decision reinforces important principles about resulting trusts in real estate. The Court noted that as the beneficiary of a resulting trust, Jackson was entitled to demand that Rosenberg comply with her duties as trustee, including the fundamental duty to return legal title to the original owner.
Citing Pecore v. Pecore, 2007 SCC 17, the Court explained that “a resulting trust arises when title to property is in one party’s name, but that party… is under an obligation to return it to the original title owner.”
The Revised Judgment
The Court of Appeal ordered significant revisions to the formal judgment to correct the legal error:
- Clarified the trust relationship: Rosenberg holds her 50% share as tenant-in-common in a resulting trust for Jackson
- Confirmed beneficial ownership: Jackson is the beneficial owner of 100% of the property
- Eliminated survivorship rights: Deleted any reference to Rosenberg having survivorship rights
- Ordered vesting: Added a vesting order to clean up title and avoid future litigation
The revised judgment now clearly states that Jackson “retains all rights and interests in the Port Hope property, that he is a beneficial owner of 100% of the property, and that he is free to encumber or sell the Property.”
Key Takeaways for Real Estate Lawyers
- Joint Tenancy as Estate Planning Tool – Proceed with Caution The case serves as a cautionary tale for using joint tenancy to avoid probate fees. While Jackson successfully avoided probate when he inherited Taube’s Yorkville condominium, his attempt to replicate this strategy with Rosenberg led to expensive litigation that far exceeded any probate fees saved.
- Documentation and Client Education Are Critical Jackson signed documents describing the transfer as a “gift” for “nominal consideration,” yet maintained it was not intended as a gift. The case highlights the hazards of improper documentation that misrepresents the parties’ intentions and can tempt litigation.
- Joint Tenancy Severance is Definitive When a joint tenancy is validly severed, the right of survivorship is completely extinguished. There is no such thing as a “partial” right of survivorship in a tenancy in common.
- Resulting Trust Consequences If one party holds legal title but another party is the beneficial owner under a resulting trust, the trustee has a duty to return legal title when demanded by the beneficiary.
- Practical Title Considerations Courts will order vesting to avoid forcing parties into additional litigation to clean up title issues. This underscores the importance of getting ownership structures right from the outset.
- Procedural Flexibility The Court demonstrated that in appropriate circumstances, it will treat requested changes as a cross-appeal even without formal notice, particularly when both parties agree on the legal error.
Conclusion
Jackson v. Rosenberg serves as a valuable reminder of fundamental co-ownership principles that can have significant practical consequences. For transactional lawyers, the decision emphasizes the importance of understanding the legal implications of different ownership structures and ensuring that documentation accurately reflects the parties’ intentions and legal rights.
The case also highlights how seemingly technical legal distinctions can have profound practical effects on property rights, underscoring the need for precision in drafting and advising clients on co-ownership arrangements.
