Transferor’s Intention Is Key to “Right of Survivorship”


The Transferor’s Intention when the “gift” in dispute was created is the key indicator as to whether a right of survivorship is valid or not as 2013 BCCA 492 Bergen v. Bergen reviews leading case law confirms.

the case involved a dispute between respondents and their son (‘R’) regarding proceeds of sale of property purchased by respondents for their retirement home.

The son 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.

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 SCC17.

The  BC appeal Court dismissed the appeal and found that the “gift” was not valid

CA 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. 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.

The Appeal Court determined that Pecore SCC would not have changed the decision of the trial Judge despite the fact that it was not argued at the trial level and quoted inter alia:

7]       It is the third major holding in Pecore, however, with which we are concerned in the case at bar. Under the heading “How Should Courts Treat Survivorship in the Context of a Joint Account?”, Rothstein J. considered the operation of the presumption of resulting trust in the context of joint bank accounts. He began as follows:

In cases where the transferor’s proven intention in opening the joint account was to gift withdrawal rights to the transferee during his or her lifetime (regardless of whether or not the transferee chose to exercise that right) and also to gift the balance of the account to the transferee alone on his or her death through survivorship, courts have had no difficulty finding that the presumption of a resulting trust has been rebutted and the transferee alone is entitled to the balance of the account on the transferor’s death.

In certain cases, however, courts have found that the transferor gratuitously placed his or her assets into a joint account with the transferee with the intention of retaining exclusive control of the account until his or her death, at which time the transferee alone would take the balance through survivorship. …

There may be a number of reasons why an individual would gratuitously transfer assets into a joint account having this intention. A typical reason is that the transferor wishes to have the assistance of the transferee with the management of his or her financial affairs, often because the transferor is ageing or disabled. At the same time, the transferor may wish to avoid probate fees and/or make after-death disposition to the transferee less cumbersome and time consuming. [At paras. 45-7.]

Recommended Posts