Presumption of Resulting Trust Applies to Transfer of Land

Until recently there had been some questions in BC estate litigation as to whether or not the presumption of resulting trust applies to gratuitous transfers of real property, in light of the provisions of the Land Title Act, section 31 that provides that under the torrens system, the indefeasible title is conclusive evidence in law and in equity, that the person named in the title is entitled to an estate in fee simple in the land.

The court in Aujula v Kaila 2010 BCSC 1739, held that the conclusive evidence of title found under the Land Title act can be rebutted in some circumstances

as such  the operation of the presumption of resulting trust where there is an agreement between the parties that is contrary to the registered title, or to take into

account the underlying equitable interests between the parties.


In Fuller v. Harper, 2010 BCCA 421 at para. 43, (sub nom Fuller v. Fuller Estate)[2010] B.C.J. No. 1901 [Fuller], the Court of Appeal noted the existence of

appellant authority that appears to support the view that a presumption of resulting trust could be applied to a gratuitous transfer of real property.  Smith D. J.A.

, relying on Pecore, described how the burden of proof is affected by the presumption of resulting trust by placing the onus on the transferee to lead evidence of

the transferor’s contrary intention in order to rebut the presumption on a balance of probabilities: Fuller at paras. 44-47.


The relationship between the statutory presumption found in the Land Title Act and the presumption of resulting trust was addressed in Aujla.  Under the

statutory presumption, the party challenging the state of title has the onus of displacing the presumption that title, as currently registered, is conclusive of legal

and beneficial ownership.  However, at para. 37, Harris J. found that this burden could be discharged through the operation of the presumption of resulting trust

if the transfer was gratuitous. If no consideration was exchanged, the onus shifts to the transferee to prove on a balance of probabilities that the transfer was

intended as a gift.

$20 Million Lottery Jackpot Claim Dismissed Under Trust Law

$20 Million Lottery Jackpot Dismissed due to trust law.Lottery

It is not uncommon to hear about litigation claiming entitlement to share in lottery jackpots arising out of former friends or co- employees.

Invariably the claim is that for quite a long period of time, often years, a group of friends or co-workers contributed money to a lottery scheme with an intention to share the winningsContinue reading

“Gift” Set Aside – Resulting Trust Imposed on Asset

Gift v Resulting trust

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.Continue reading

Presumption of Resulting Trust Rebutted

Presumption of Resulting Trust Rebutted

Gift of House and Bank Accounts to Spouse Upheld as Gifts

In’s last blog, we discussed the Zukanovic v Malkoc case.

There, the court set aside various “gifts” made during the lifetime of the deceased, and found they were held in trust for the estate.

Hamilton v. Jacinto 2011 BCSC 52, although involving different facts altogether, also involved the same legal arguments of one side arguing that the asset was transferred to him or her without consideration, with the intention of gifting that asset, while the opposing party typically arguing that no intention of a gift was shown and that the asset accordingly, is held in trust for the estate.

In this decision, the court held that the transfer of various assets to his 2nd spouse, after the death of his wife of 59 years, was intended by the deceased to be a gift to his new spouse, and that he was competent, and free of undue influence to do so.

In 2003, the plaintiff’s elderly father, a Washington state resident, purchased a house in British Columbia in joint names with the defendant, and opened joint bank accounts with her,using assets of a Washington state trust, of which he was the sole trustee and beneficiary. She contributed no monies to the bank accounts or the house.

After the father’s death in 2004 at age 84, the plaintiff children commenced a court action to set aside the house and bank transactions.

The plaintiffs argued that the defendant held the property in trust for their father’s estate.

The evidence however showed that the father knew what he was doing and acted freely.

The court found that the presumption of resulting trust was rebutted, that there was no undue influence.

Accordingly the action was dismissed in favor of the defendant spouse.

The two contrasting decisions indicate how difficult it can be even for very senior estate specialists such as at, to predict the outcome of such court actions.

The next blog will show how the court penalized the plaintiffs with an award of double costs for failure to accept an offer to settle.

Gifts of Entire Estate During Lifetime Set Aside

Gifts of Entire Estate During Lifetime Set Aside

Will Varied to Give Daughter %25 and Favourite Son, %75 of $ One Million Estate

Zukanovic v Malkoc Estate 2011 BCSC 625 is a case of a father disinheriting a daughter in favor of a son who was clearly his favorite.

The testator suffered from diabetes most of his life which resulted in the amputation of a leg prior to his death.

In 2005 the deceased transferred basically his entire estate of approximately $800,000 to his son.

In 2007 he made a will leaving $1000 to his daughter, the forgiveness of a debt of $40,000 to his daughter, and the residue of his estate to his son.

The estate was only $24,000 at the time of his death.

The daughter commenced a court action alleging that the son held the house and shares that had been transferred prior to the death of her father, in trust for his estate.

The properties had been transferred to the son without any consideration.

She subsequently argued that once the assets formed part of the estate, that the 2007 will should be varied in her favor to provide her with an adequate and just award.

The court held that the son held the entire $1 million assets in trust for his father’s estate.

The court ordered that the properties that had been transferred to the fact form part of the estate of the deceased.

The court varied the will, dividing the estate approximately 75% to the favored son, and 25% to the plaintiff daughter, in recognition of the parties divergent circumstances and the testator’s desire to see that his son maintained the business. applauds this as a correct decision after the court very sensibly closely examined the circumstances of the transfers, in order to try and determine the true intention of the deceased, when he transferred the properties to his son.

For example, the court asked ” why would the deceased do a will in 2007 giving away his assets, when he had already transferred them in 2005 to his son?”

The son had argued that his father gifted him the properties prior to his death, and that therefore they did not form part of his estate, and belonged absolutely to the son.

The court found that when the deceased transferred the properties to his son, he did not intend to transfer of the beneficial ownership of the assets, and merely only transferred the legal interest of the properties.

Most importantly, the court concluded that despite being the registered owner, the son did not practically speaking, exercise control over the assets until after his father’s death.

The court basically asked the question : “when determining whether there was a gratuitous transfer or not, would the deceased have felt constrained for from asking for the return of the properties back to his name, and if he did, with the son have complied”.

The court concluded that the answer to the 1st question was no, and the answer to the 2nd was yes.

Therefore on the balance of probabilities, the court found that the deceased did not intend that the transfers to put the assets beyond his own reach. He demonstrated this in action and words after the date of the transfers.