Pan v Pan Estate 2011 BCSC 856 is an excellent example of a court case that deals between the “tug of war” in legal terms of a gift versus a resulting trust.
In 1994 the plaintiff withdrew $450,000 from her bank in Taiwan and transferred into an account in the name of her husband in Vancouver.
In 2001 the husband placed the funds and investment certificates and the names of himself, their son, and the plaintiff.
In 2001 the husband and the son, signed a document acknowledging that the fund belonged to the plaintiff and that she was entrusting it to them for management.
In 2003 the husband transfered the proceeds of the funds into the name of the son.
The husband died in 2005 and the son instructed the bank to deposit the money, now approximately $550,000 into his own account.
The son transferred the fund into the name of his wife and then died ten days later.
The sons wife claimed that her husband gave her the funds as a gift, and that they belong solely to herself.
The plaintiff claimed that the fund was always hers, and that she had entrusted it to her late husband and her son to manage the funds for her.
The court had no difficulty in finding judgment for the plaintiff, stating that there was overwhelming evidence in favor of the plaintiff, that clearly established an intention on the part of the plaintiff to retain ownership of the fund.
The plaintiff was the sole contributor to the fund, and she made the transfer for the purpose of eliciting her husband’s assistance in managing it.
The court found that the document signed by the husband and son in 2001 was an enforceable declaration of trust.
The court referred to the 2007 Supreme Court of Canada decisions re Pecore v Pecore, and Madsen Estate, and stated that it now appears that a presumption of resulting trust applies in all cases of gratuitous transfers, with some very narrow exceptions, such as transfers between parents and minor children.
Therefore, the onus is on the transferee, namely the daughter in law, to establish on the balance of probabilities that the transfer of the funds from the plaintiffs bank account in Taiwan to the account in Vancouver, was not done by her with the intention of retaining beneficial ownership in the fund.
disinherited.com agrees completely with the reasoning and outcome of this decision and states that it is a good example of how the courts should examine and determine the difference between a gift and the resulting trust.
They were always the plaintiffs monies and remained such despite the alleged gift from the son to his widow. The son in effect never had any ownership in the monies and therefore was unable to transfer ownership to his surviving wife.