Evidence of Donor’s Intention After Gratuitous Transfer Admissable

Gratuitous Transfer

Evidence of a donor’s intention after a gratuitous transfer as to whether a gift or a trust was intended  may be admissable if relevant as per   Wong v Chong 2016 BCSC 953

Evidence Subsequent to the Transfer
[56] The traditional rule is that evidence adduced to show the intention of the transferor at the time of the transfer “ought to be contemporaneous, or nearly so”, to the transaction: see Clemens v. Clemens Estate, [1956] S.C.R. 286, at p. 294, citing Jeans v. Cooke (1857), 24 Beav. 513, 53 E.R. 456. Whether evidence subsequent to a transfer is admissible has often been a question of whether it complies with the Viscount Simonds’ rule in Shephard v. Cartwright, [1955] A.C. 431 (H.L.), at p. 445, citing Snell’s Principles of Equity (24th ed. 1954), at p. 153:
The acts and declarations of the parties before or at the time of the purchase, [or of the transfer] or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration . . . . But subsequent declarations are admissible as evidence only against the party who made them . . . .
The reason that subsequent acts and declarations have been viewed with mistrust by courts is because a transferor could have changed his or her mind subsequent to the transfer and because donors are not allowed to retract gifts. As noted by Huband J.A. in Dreger, at para. 33: “Self-serving statements after the event are too easily fabricated in order to bring about a desired result.”

[59] … I am of the view that the evidence of intention that arises subsequent to a transfer should not automatically be excluded if it does not comply with the Shephard v. Cartright rule. Such evidence, however, must be relevant to the intention of the transferor at the time of the transfer: Taylor v. Wallbridge (1879), 2 S.C.R. 616. The trial judge must assess the reliability of this evidence and determine what weight it should be given, guarding against evidence that is self-serving or that tends to reflect a change in intention.
[Emphasis added.]

[73] In Schultz v. Landry, 2007 BCSC 994 at para. 18, the B.C. Supreme Court noted three potential presumptions that can arise when a spouse gratuitously transfers property into joint tenancy:

1. The presumption of resulting trust. This would arise in favour of the spouse who provided all of the funds for the purchase of a property.
2. The presumption of advancement. This would arise in favour of the spouse whose name has been gratuitously put on title by the contributing spouse.
3. The presumption of indefeasibility, i.e. that the holder of legal title is presumed to hold both legal and equitable interest in the property. This presumption arises by virtue of the doctrine of indefeasible title within the Land Title Act, R.S.B.C. 1996, c. 250. Sub-section 23(2) of that act establishes that registration of an indefeasible title is conclusive evidence at law and in equity that the person named is indefeasibly entitled to an estate in fee simple. Thus, the burden is on the party seeking to challenge the state of title to prove otherwise (see Bajwa v. Pannu (2006), 57 B.C.L.R. (4th) 161, 2006 BCSC 921 at ¶ 11-12).
[Emphasis added.]

[74] The trial judge is obliged to examine the totality of the evidence, both direct and circumstantial, for the purpose of determining, if possible, the intention of the parties at the time of the purchase: Fuller v. Harper, 2010 BCCA 421 at para. 42.

[75] The Supreme Court of Canada in Pecore was addressing the issue of resulting trust in relation to a joint bank account. The Court noted, at para. 48, that “the rights of survivorship, both legal and equitable, vest when the joint account is opened and the gift of those rights is therefore inter vivos in nature.”

[76] More recently, in Bergen v. Bergen, 2013 BCCA 492, the B.C. Court of Appeal applied Pecore to joint tenancy in land. In that case, a couple transferred one-third of a property to their son in joint tenancy, saying they wanted to bypass probate when they died. They supplied all funds for the purchase of the property and toward the construction of a house. When the relationship deteriorated, the couple severed the joint tenancy and brought a claim that the son held his one-third interest in trust for them. The Court discussedPecore and then stated:
[40] Where a joint tenancy in land is concerned … either of the joint tenants is at liberty to sever the joint tenancy at any time – a fact that clearly undermines the notion that as a matter of law, a joint tenant receives a “full and perfect” inter vivos gift of the “survivorship”…. Severance, which occurs automatically upon the destruction of the four unities, ends the jus accrescendi, with the result that each co-owner becomes entitled to a distinct share in the land rather than an undivided interest in the whole…. As observed by Steel J.A. in Simcoff v. Simcoff, 2009 MBCA 80, a case involving land, “the fact that a ‘complete gift’ … included a right of survivorship does not, prima facie, prevent a donor from dealing with the retained interest while alive. The right of survivorship is only to what is left.” In the case of real property (and personalty, for that matter) nothing remains of the right of survivorship.
[41] Of course it remains true that once a gift has been made of an interest in real property or any other type of property, the gift cannot be revoked whether the transferee takes as a joint tenant or tenant in common. As stated by D. Smith J.A. in Fuller v. Harper, “The gift of a joint interest in real property is an inter vivos rather than a testamentary gift and cannot be retracted by the donor. It is a ‘complete and perfect inter vivos gift’ …”. (At para. 53.) At the same time, in cases where the property was provided by the transferor, the transferee must still prove that a gift was intended i.e., he or she must rebut the presumption of resulting trust. Pecore cannot be read as suggesting that the Court intended to do away with the presumption or the necessity of rebutting it with reference to the transferor’s intention: that was the crux of the majority’s reasons. To quote again para. 53 of Pecore:
Of course, the presumption of a resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Otherwise, the assets will be treated as part of the transferor’s estate to be distributed according to the transferor’s will.

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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