The Tribune

THE Privy Council upheld a Court of Appeal decision regarding who is responsible for a mortgage on a jointly owned property after one of the owners dies.

The case focused on whether the surviving joint tenant should be liable for the entire mortgage or if the deceased person’s estate should share the responsibility.

William Graham Scavella died without a will on November 19, 2012. He was survived by his former wife Gina Scavella, their two daughters, Bria and Erin, and his second wife,Audrey Flowers.

In September 2011, Mr Scavella and Ms Flowers took out a $540,000 mortgage from the Finance Corporation of The Bahamas Ltd (FCB) on a property they owned jointly at No 1 Harold Heights, New Providence. When Mr Scavella passed away, most of the mortgage was still unpaid.

As the surviving joint tenant, Ms Flowers became the sole owner of the property automatically upon Mr Scavella’s death. She later became the administrator of Mr Scavella’s estate and used $165,000 from his life insurance policy to pay the mortgage. This life insurance policy was Mr Scavella’s main asset but was not connected to the mortgage.

In 2017, Gina Scavella and her daughters sued Ms Flowers, arguing that the mortgage should have been paid from the estate, not just by Ms Flowers. They based their claim on section 65 of the Probate and Administration of Estates Act 2011, which states that if a person dies and their property is charged with a debt, that property should be used to pay the debt unless the deceased person specified otherwise.

The Supreme Court initially ruled in favour of Ms Scavella and her daughters. However, the Court of Appeal overturned this decision in 2022, ruling that section 65 did not apply in this case. The Court of Appeal ruled that when Mr Scavella died, the property did not become part of his estate because it automatically passed to Ms Flowers as the surviving joint tenant. Therefore, the property was not available to cover Mr Scavella’s debts.

The Privy Council agreed with the Court of Appeal, ruling that section 65 does not apply to property held in joint tenancy. Once Mr Scavella died, his interest in the property ceased to exist, and it could not be used to settle his debts.

This decision clarifies that if a property is held in joint tenancy, the surviving owner is not automatically responsible for the deceased person’s share of the mortgage unless both were originally liable for the debt.