The Second Opinion: It Takes Two To Tango? When A Party Can (And Cannot) Contract With Herself

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

At common law, a party is generally unable to contract with itself, or to transfer property to itself.  In some provinces, these limitations have been overcome through  explicit legislation.   In a recent ruling, Penny v. DeLong Estate, 2013 NSCA 74, the Nova Scotia court confirmed that, in the absence of statutory intervention, equity will not intercede to overcome this common law prohibition.

The case involved a joint tenancy over a parcel of land.  One of the co-owners wished to sever the joint tenancy to create a tenancy in common.  One of the ways in which this can be done is by the joint tenant conveying her interest in the land to a third party. Instead of following this well-accepted strategy, the co-owner of the parcel sought to sever the joint tenancy by conveying her interest in the property to herself.