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.

Intention of Transferor Determined at Time of Transfer

Intention of Transferor Determined at Time of Transfer

In Gully v Gully 2018 BCSC 1590 the court rejected a claim by a mother who transferred her property into joint tenancy with her son without his knowledge, and held that the transfer was a gift as per the law relating to intention at the time of the transfer as being determinative if it is a gift or a resulting trust.

In 1999 Ms. Gully purchased her home in Burnaby, using proceeds of sale from a previous home owned by her and her husband. In 2015, she added her son is a joint tenant on title based on estate planning advice. She received at the time, but did not advise her son that he had been added as a joint tenant of the property.

In 2017. The sun consented to judgment in the amount of $800,000, not knowing that he was on title to the Burnaby property.

The creditor registered a certificate of judgment upon his undivided half interest in the Burnaby property and sought execution proceedings.

the Court held that the transfer was a gift to the son and that the judgement creditor was correct in being able to file a judgment against the son’s interest in the property.

Ms. Gully sued asserting that she had no intention of transferring any part of her beneficial interest in the Burnaby property to her son, and that the registration of joint tenancy was made solely to facilitate the transfer of the property to her grandchildren on her death. This statement, however, was contrary to the statement of intention found in the will itself.

The court referred to Fuller v Fuller 2010 BCCA 421 BCCA on how the evidence of the transferors intention should be considered:

48. “ In Pecore the Supreme Court of Canada discuss the nature of the evidence to be considered. In general, evidence of the transfers intention at the time of the transfer ought to be contemporaneous, or nearly so, to the transaction—“

The court went on to discuss various authorities that common-law where the courts have traditionally viewed with mistrust the admissibility of evidence on post transfer conduct or statements, because of transferor could’ve changed his or her mind. Subsequent to the transfer and because donors are not allowed to retract gifts. The court also noted that evidence by a party to the litigation may be admissible against that party for a limited purpose if it is found the relevant to the issue of the transferors intention at the time of the transfer.

49 “ in adopting this more liberal stance on the admissibility of post transfer conduct, the court cautioned that the trial judge must assess the reliability of this evidence and determine what weight it should be given, guarding against evidence that is self-serving or that tends to reflect the change in intention. The assessment of the reliability of post transfer conduct admitted into evidence will include an assessment of the reasonableness of any inferences that are sought to be drawn from that conduct, including the inherent probability or in probability of competing explanations as to the transferor intent.