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Transfer to One Child Held Resulting Trust, Not Gift

Transfer to One Child Held Resulting Trust, Not Gift

Flesjer v Butterfield 2019 BCSC 2332 held that the transfer of a mother’s interest in all her real property and all her financial investments to one for four children when she was elderly and terminally ill, was a resulting trust, and not a gift to the recipient child.

The defendant did not provide any consideration for the assets he received and consequently the transfers of property and financial assets give rise to a rebuttable presumption of resulting trust in favour of the estate.

From 2013 onwards three of the four children lived with their mother in the matrimonial home.

In 2013 the mother executed a power of attorney in favour of one child and signed a transfer to have that child added as a joint tenant to her property.

In June 2013 the mother and said son signed a contract of purchase and sale for another property owned by a company owned are associated to that sons wife’s family. The mother and son became the registered owners in joint tenancy of that property and at the same time, a $500,000 mortgage was registered against the property and the former matrimonial home property. The mother deposited the only funds towards the second properties  purchase.

The court referred to Harshenin v Khadikin 2015 BCSC 1213 in restating the somewhat trite law that in a case involving an alleged resulting trust, the determining factor is the intention of the party who made the transfer ie gift or if not, a trust.

The court must weigh all of the relevant evidence, both direct and circumstantial, in an attempt to ascertain on a balance of probabilities, the transferor’s actual intention. The assessment may include any reasonable inferences that are sought to be drawn from the evidence, including the inherent probability or in probability of competing explanations as to the transferor’s intent. Fuller v Harper 2010 BCCA 421 at para.49.

In other words, the court may consider if the transferor had any rational purpose for the transfer, other than as a gift.

The presumption of resulting trust provides a guide for the courts in resolving disputes over transfers were evidence as to the transferor’s intent in making the transfer is unavailable or unpersuasive. This may be especially true when the transferor’s deceased, and thus is unable to tell the court his or her intention in affecting the transfer.

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 this applicable a presumption and will weigh all of the evidence an attempt to ascertain, on the balance of probabilities, the transfers actual intention. The presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.

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