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Court Finds Transfer of House from Mother to Son a Valid Gift, Subject to a Life Interest of Financial Support For Mother

Transfer of House

Ruff v Ruff 2013 BCSC 169 is a very interesting and creative judgment relating to the thorny question of how do the courts treat a gift of real property from a parent to an adult child, when the parent subsequently changes his or her mind and demands the return of title to the property.

In this particular case the court found that the adult did intend to get the house to the son, and thus allowed the sun to keep the home, but found that the adult also expected that she would remain in the house, and thus a trust was created such that the sale proceeds from the home would be held in trust for the adults lifetime, and the income would be available for the adults reasonable maintenance and support.

The plaintiff adult, transferred title to her house to her son, the defendant in 2005.

The adult remained in the house alone until 2008 when the son and his wife moved in with her, when she was then 88 years of age.

After approximately 2 years friction had developed between the parties to the extent that litigation was commenced by the mother, who sought a declaration claiming that the title to her house was held in trust for her by her son. The litigation was commenced after the defendant had taken steps to sell the property.

The court allowed the property to be sold, but found that the proceeds should be held in trust for the plaintiffs lifetime, and the income used for her support.

 

Transfer of House

The following quotes of law are taken from the decision:

 63]         I repeat that the relevant time to determine the intent of Freida Ruff was the time of the transfer: see Farrell Estate v. Turner Estate, 2002 BCSC 165 at para. 26, and Hamilton Estate, supra, at para. 74.

[64]         It is Freida Ruff’s intent, and hers alone, that is relevant: see Kerr v. Baranow, 2011 SCC 10 at para. 25.

[65]         Evidence tendered to show Freida Ruff’s intent at the time of the transfer should be contemporaneous to the time of transfer: Pecore at para. 56. Evidence of intention that arises after the transfer may be admitted if it can be shown to be relevant to the intention of the transferor at the time of the transfer: Pecore at para. 59. Evidence arising after a transfer may be unreliable for a variety of reasons, not the least of which can be remorse on the part of the transferor, or self-interested justification on the part of the transferee, and its relevance to actual intent at the time of transfer is questionable: see Fuller at para. 65.

[66]         Freida Ruff’s intention at the time of the transfer is not the same as her reasons for the transfer, although her motives shed some light on her intention. Thus, her desire to minimize the opportunities for her sons to quarrel over the portion of her estate represented by the property is relevant to the determination of her intention, but not determinative

Freida Ruff would not fare any better on the basis of unjust enrichment. The requirements are:

1.       An enrichment of the defendant;

2.       A corresponding deprivation of the plaintiff; and

3        An absence of juristic reason for the enrichment: Garland v. Consumer’s Gas Co., 2004 SCC 25 at para. 30.

Mrs. Ruff has established that she conferred a benefit on Robert through the transfer of title, with the corresponding detriment to her of giving up title. She would not succeed in a claim based in unjust enrichment because her intent to gift the land to Robert would constitute a juristic reason for the benefit/detriment result.

[80]         Had Freida Ruff succeeded in having the property restored to her, Robert and Denise Ruff would have had a valid claim in unjust enrichment. In that case, the money and labour they put into improvements to 140 South Petersen Road would have benefited Freida Ruff, to their corresponding detriment, and there would be no juristic reason to support that benefit/detriment result. As to remedy, however, they have not gone much further than a rough estimate of the money they have spent on improving the property, and have not attempted to quantify the amount or value of their labour.

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