Mehmal v Mehmal 2018 BCSC 2057 discussed an alleged family agreement that certain siblings held property in trust for other siblings, but because the legal and beneficial title was never divided and no property was ever transferred, the court held that without a transfer of title no trust can result and the presumption ( of resulting trust) is not engaged.
The court held that at some point title has to pass from one party to another and relied upon Fuller v Harper 2010 BCCA 421 in which the BC Court of Appeal referred to Pecore v Pecore (2007) 1 SCR 795 said the presumption arises when entitled the property is in one party’s name, but that party, because he or she is a fiduciary, or gave no value for the property, is under an obligation to return it to the original title over.
Without a transfer of title no trust can result in the presumption is not engaged. This point was expressly made by the BC Court of Appeal in Elsen v Elsen 2011 BCCA 313
Elsen stated at paragraph 19:
“first, and most obviously, the principal as stated by Waters regarding the “transfer”of a legal or equitable interest is literally inapplicable because there was no transfer owned in equity. The properties were received by her as trustee for the beneficiaries-she never owned the beneficial interests and never transfer them.
The court noted that one of the key features of a resulting trust is that the claimant must have provided the property or equitable interest vested in the person bound by the trust ie the beneficiaries. Waters cited Baird v Columbia Trust Company (1915) 22 DLR 150 BCSC.
The court found that on the facts that a none of the siblings behaved as if they had any obligations to the trust. No one returned to the ranch or participated in any way and activities of the ranch once they left home. There were no papers drawn to reflect trust. The court found that it made sense for the siblings would all remove the way to begin on their own, to give up their interests in order to ensure that their mother continued to have a place to live along with the two siblings who remained on the ranch. It was a small sacrifice for them, and ensured that the ranch did not need to be broken up and sold to pay their inheritance. For some of the siblings it was no sacrifice at all.