The Supreme court of Canada dismissed an appeal of Lorintt v Boda 2014 BCCA 354 finding that when the father transferred his house to himself and his son as joint tenants, the father had donative intent at the time of the transfer, and found that the filial relationship did not give rise to a presumption of undue influence by the son. The case sets out the criteria for dealing with rebutting presumptions
The executor appealed that decision and the Supreme Court of Canada dismissed the application for leave to appeal with costs.
I had previously blogged about this case but under the heading of the criteria that appeal court’s use in reviewing a chambers judge decision who decided the matter on affidavits rather than verbal testimony.
The facts of the case are as follows:
In February 2000 a father transferred his residence from himself to himself and his son in joint tenancy. After the father’s death in 2008, his executor sought a declaration that the son held the property in trust for the father’s estate. The chambers judge dismissed the executor’s claim. He held that the father intended to gift the property to the son. He found that the relationship between the parties was such that the presumption of undue influence did not apply. The executor now appeals. He submits that the chambers judge erred in determining that the presumption of resulting trust had been rebutted and further, and in the alternative, he erred in failing to find the transaction should be set aside because of undue influence.
Held: Appeal dismissed. It was open to the chambers judge on the evidence to find that the father had a donative intent. There was no basis to interfere with the chambers judge’s findings that the relationship between the parties did not give rise to the potential domination of one party by another
Rules Governing Presumptions
[74] This case concerns both the presumption of resulting trust and the presumption of undue influence. The presumption of resulting trust is a rebuttable presumption of law and a general rule that applies to most gratuitous transfers, including transfers to adult children. When the transfer is challenged, the presumption allocates the legal burden of proof. Thus where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: Pecore.
[75] The presumption of undue influence arises in circumstances where the relationship between the parties gives rise to the potential domination of one party by another. Once a dominant relationship has been established such that potential for influence exists, the onus moves to the defendant to rebut it and show that the plaintiff entered into the transaction as a result of his own “free, full and informed thought”: Geffen v. Goodman Estate, [1991] 2 S.C.R. 353 at paras. 42-45.
[76] The presumption of resulting trust and the presumption of undue influence can both be rebutted on the balance of probabilities. In Pecore, Rothstein J. explained the role of presumptions in a trial:
[44] As in other civil cases, regardless of the legal burden, both sides to the dispute will normally bring evidence to support their position. The trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. Thus, as discussed by Sopinka et al. in The Law of Evidence in Canada, at p. 116, the presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.
Evidence Subsequent to the Transfer
[77] The traditional rule was that evidence adduced to show the intention of the transferor at the time of the transfer “ought to be contemporaneous, or nearly so”: Clemens v. Clemens Estate, [1956] S.C.R. 286 at p. 294, citing Jeans v. Cooke (1857), 24 Beav. 513 at 521. In Pecore, after reviewing the authorities, the Court concluded, at para. 59, that evidence of intention that arises subsequent to a transfer should not automatically be excluded, but that such evidence must be relevant to the intention of the transferor at the time of the transfer. The Court cautioned that judges must assess the reliability of such evidence and determine what weight it should be given, guarding against evidence that is self-serving or that tends to reflect a change of intention.
[78] A major foundation of the appeal is that the chambers judge erred in giving no weight to the affidavits filed on behalf of the executor pursuant to which he attempted to put before the Court evidence of the father’s intent. In regards to that evidence, the chambers judge noted that the father’s inconsistent comments, combined with medical practitioners’ inconsistent diagnoses, led him to conclude that this evidence was at best equivocal and ambiguous. He found it was simply not clear whether the evidence reflected what the father actually believed was his intention some years earlier, or whether it was the result of some elemental incompetence or dementia.
[79] I agree with the chambers judge’s analysis of that evidence. The evidence consists of various oral statements made by the father in 2006. While Dr. Sloan found that the father, at the time of his interview on June 19, 2006, had testamentary capacity, he noted that the father’s preoccupation with alleged wrongdoing by his son including allegations that his son had stolen things from him, used various legal methods to take away his rightful property, and sold or destroyed things with great sentimental value. He found the father’s insight and judgment appear to be reduced. He indicated the father’s test results were consistent with mild dementia. When Mr. Menkes met with the father shortly after the father had seen Dr. Sloan, the father did not initially recall Dr. Sloan
