Bergen v Bergen 2013 BCCA 492, sets out a very good summary of the law relating to jointly held assets such as houses and bank accounts, and whether the gratuitous transfer of the asset is held as a resulting trust and thus an estate asset, or a gift to the survivor who owns it absolutely.
The case involved a dispute between respondents and their son (‘R’) regarding proceeds of the sale of property purchased by the respondents for their retirement home.
R constructed a house on the property (for which the parents paid) and expected they intended for him to own it. At one point, they made him a one-third owner as joint tenant, but later severed the joint tenancy.
The trial judge accepted the evidence of the mother (the father having died by the time of trial) that the parents had put the property into joint tenancy thinking it would become R’s “eventually”, but that they had not intended to give him a beneficial interest in the property during their lifetimes. The property was sold pursuant to court order prior to trial.
The Trial judge found that the parents have not intended to “gift” the property to R and thus that the presumption of resulting trust had not been rebutted. The Court did not refer to Pecore v. Pecore 2007 SCC 17.
Held: R’s appeal was dismissed.
The appeal court did not agree with R’s submission that once the “right of survivorship” is conferred (through the setting up of a joint account, or placing a party of title as a joint tenant) a “complete and perfect” inter vivos gift has been made both with respect to the legal title as well as immediate beneficial interest.
Leading authorities, including Pecore, indicate that the transferor’s intention is the key factor.
Any discussion of “right of survivorship” in respect of bank accounts, contrasted with joint tenancy in personalty or realty. In the latter context, any joint tenant may sever the joint tenancy at any time − a fact that undermined R’s argument that as a matter of law, a joint tenant receives a “full and perfect” inter vivos gift of the survivorship as well as the property itself.
When severance occurs, nothing remains of the right of survivorship. The presumption of resulting trust not having been rebutted, the respondents had not made an immediate gift of the beneficial interest in the property itself and the mother was entitled to the entire proceeds of sale.
The trial judge had not erred in fact in finding that no gift was intended.
As mentioned many times in my blogs, it ultimately comes down to the court examining the intention of the transferor at the time of the transfer.
 As we have seen, the majority’s reasons in Pecore also show that the transferor’s intention is key to the question of what if anything passes when a joint bank account is established by an account-holder. (It was on this basis that the Court in the companion case to Pecore, Madsen Estate v. Saylor 2007 SCC 18, reached a different result than in Pecore.) Recently, in Kerr v. Baranow 2011 SCC 10, the Supreme Court of Canada reinforced this reading of Pecore:
The Court’s most recent decision in relation to resulting trusts is consistent with the view that, in these gratuitous transfer situations, the actual intention of the grantor is the governing consideration: Pecore v. Pecore … at paras. 43-44. As Rothstein J. noted at para. 44 of Pecore, where a gratuitous transfer is being challenged, [the trial judge] will commence his or her inquiry with the applicable presumption and will weigh all the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. [At para. 18; emphasis added.]