Equity Protects Unpaid Vendor’s Liens

Unpaid Vendor's Liens

Unpaid Vendor’s Liens

Hall v Hall 2015 BCCA 96 reviews the law of equitable vendor’s liens, which is similar to the law of resulting trusts, in that if you receive a significant benefit or gift, equity intervenes to scrutinize the transaction, based on the presumption in equity that one should pay for one’s benefits.

 

A great number of cases on the topic are incorporated into Chu v Chen 2004 BCCA 209

 

In Chu v. Chen, 2004 BCCA 209, Southin J.A., at paras. 46-66, traced and analyzed the law of equitable vendor’s liens. She quoted at length from Storeys Equity Jurisprudence, which she described as one of the great legal texts of all time. As set out in that text, the origin of the doctrine can, with high probability, be traced back to Roman law, from which it was imported into the equity jurisprudence of England. The leading English authorities begin with Hearn v. Botelers (1604) Cary 25, 21 E.R. 14 and include subsequent decisions such as Hughes v. Kearney (1803), 1 Sch. & Lef 132, Mackreth v. Symmons (1808), 15 Ves. Jun 329, 33 E.R. 778, Rice v. Rice, 2 Drewry 73, 61 E.R. 646, In re Albert Life Assur. Co. (1870), L.R. 11 Eq. 164at 178; Lysaght v. Edwards (1876), 2 Ch.D. 499, at 506, 45 L.J. Ch. 554; Kettlewell v. Watson (1882) 21 Ch.D. 685, 51 L.J. Ch. 281, at 283, aff’d 26 Ch.D. 501, 53 L.J. Ch. 717, and Allen v. Inland Revenue Commrs., [1914] 2 K.B. 327, 83 L.J.K.B. 649.

 

29      The foundation of the equitable vendor’s lien is that a person who has received the estate of another ought not, in conscience as between them, be allowed to keep it and not to pay the full consideration. The equitable lien secures the sum for which the property was sold rather than capturing any interest in the property. Unlike the situation of a resulting trust, the lien holder does not receive the benefit of any appreciation in the value of the property after it is sold.

 

From Chu v Chen aforesaid, Southin stated: 47] The short point is that yes, a vendor’s lien arises by operation of law, but the ultimate issue is whether in all the circumstances the Court will exercise its equitable jurisdiction and enforce such a lien: Freeborn et al v. Goodman, 6 D.L.R. (3d) 384 (S.C.C. 1969) at 409-410.

 

 

What Evidence Courts Examine to Determine Gift or Not

What Evidence Courts Examine to Determine Gift or Not

Schouten Estate v Swagerman-Schouten 2014 BCSC 2320 examines the range of evidence and its significance when attempting to determine the intention of the donor when he transferred title to his farm to himself and one of his 6 children as joint tenants in 1995.

In the will of the deceased 14 years later, he showed an intention to gift the same property to the same child.

The Court reviewed the type of evidence it will consider when determining whether the defendant has rebutted the presumption that he held the property as a resulting trustee for the estate:

5. “What type of evidence may be considered to determine the transferor’s intention? Once the court has determined the proper presumption to apply, all of the relevant evidence should be weighed, depending on the facts of the case (Pecore at para. 55). The type of evidence that may be considered was discussed in Pecore at paras. 56-70. The Supreme Court of Canada at para. 59 expanded the traditional rule that evidence of intention ought to be contemporaneous with the transaction and said that evidence of intention subsequent to a transfer that is relevant to intention at the time of transfer should be assessed for reliability and weighed. Generally, the types of evidence germane to ascertaining intention include declarations and conduct contemporaneous with the transfer, evidence subsequent to the transfer, the documentary record as it relates to the asset, subsequent control and use of the property, other legal instruments, and tax treatment (Pecore at paras. 56-70; Doucette v. Doucette Estate, 2009 BCCA 393 (B.C. C.A.) at paras. 56-64; Fuller at paras. 48-50, 66-67; Chung at para. 49; Anderson v. Anderson, 2010 BCSC 911 (B.C. S.C.) at para. 161 [Anderson]). The grant of a power of attorney at the same time as a grant of joint ownership may indicate that the transferor intended to give more than management control of property (Pecore at para. 67). A Property Transfer Tax Return filed in relation to a transfer is a factor to consider in relation to intention and may suggest the intention of gift if the presumption of advancement was the applicable presumption at the time of transfer (Chung at paras. 52-54). Evidence of intention that arises subsequent to a transfer must be relevant to the intention of the transferor at the time of transfer (Pecore at para. 59; Turner v. Turner, 2010 BCSC 49 (B.C. S.C.) at para. 57). Continuing control and use of property after the transfer by the transferor may not be conclusive because it may not be inconsistent with a gift (Pecore at paras. 62-66; Fuller at paras. 66-67; Zukanovic v. Malkoc Estate, 2011 BCSC 625 (B.C. S.C.) at paras. 134-135).

6      Care must be taken to guard against after the fact evidence that may be self-serving (Pecore at para. 59; Fuller at para. 49; Chung at para. 51; Anderson at para. 164). The credibility of a witness should be gauged by its harmony with the preponderance of probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions (Faryna v. Chorny (1951), [1952] 2 D.L.R. 354 (B.C. C.A.), at 357, Aujla at para. 36). Care must also be taken not to treat any single type of evidence as determinative but to weigh all of the evidence (Pecore at paras. 55, 68-69). D. Smith J.A. for the court in Fuller at para. 49 put it in a nutshell: “In short, the court must consider if the transferor had any rational purpose for the transfer other than a gift”.

Credibility in Gift vs Resulting Trust Actions

credibility

Credibility in Gift vs Resulting Trust Actions

One of the most common types of estate litigation is the conflicting stories of one party testifying that the asset was gifted to him or her, while others in the family argue resulting trust, and the Judge must decide who to believe.

Examples of such findings and determination of the case are found in the following examples:

It is clear that many cases where a transferee seeks to persuade a court that a gratuitous transfer was intended to be a gift turn on questions of credibility;

. Madsen Estate v. Saylor, 2007 SCC 18at para. 18,

Aujla v. Kaila, 2010 BCSC 1739at paras. 42, 62, 104, aff’d 2013 BCCA 158;

Modonese v. Delac Estate, 2011 BCSC 82at para. 69, aff’d 2011 BCCA 501;

Bakken Estate v. Bakken, 2014 BCSC 1540at paras. 33-35.

Resulting Trust Presumption Applies to Real Property

Presumtion and ignoranceResulting Trust Presumption

 

The decision Schouten Estate v Swagerman- Schouten  2014 BCSC 2320 confirmed the case law that the law relating to resulting trust presumption law also apply to real property (land).

 

There had been some issue in law at one time due to the provisions of the Land Title Act.

 

3) in gratuitous transfer situations, the actual intention of the transferor is the governing consideration (Pecore at paras. 43-44; Kerr v. Baranow, 2011 SCC 10 at para. 18; Bergen at para. 38). In the case of an interest in land as joint tenants, it does not follow as a matter of law that an immediate irrevocable gift was given: the transferee must still rebut the presumption of resulting trust by bringing evidence of intention (Bergen at para. 22).

[4]             It appears settled now in British Columbia that the equitable presumptions established in Pecore apply to real property transfers (Fuller at paras. 41-45; Chung v. La, 2011 BCSC 1547, at paras. 45-46, 55 [Chung]; Aujla v. Kaila, 2010 BCSC 1739 at paras. 31-37 [Aujla]; Modonese v. Delac Estate, 2011 BCSC 82 at paras. 141-142; Suen v. Suen, 2013 BCCA 313 at paras. 35-38). Thus, the presumption of title in s. 23(2) of the Land Title Act, R.S.B.C. 1996, c. 250 as conclusive proof of title may be displaced by equitable presumptions that take into account the equitable interests between the parties in certain circumstances (Chung at para. 47; Aujla at para. 32). This is so even though title to the property in question may have been settled before 2007 when Pecore was decided (Kuo v. Kuo, 2014 BCSC 519 at paras. 225-227).

Wills Variation -Daughter Succeeds vs Second Spouse

Wills Variation- $15,000 Inheritance Increased to $250,000

McLellan v McLellan 2011 BCSC 461 is a wills variation case involving interesting facts, where a daughter’s bequest was increased from $15,000 to $250,000 of a $1.75 million estate.

The testator married his 1st wife in 1966 and they had 2 children.

In 1988 his wife suffered a stroke and was left debilitated.

In 1990 the testator left his wife for another woman, whom he married within one year.

The plaintiff was 19 years when her father left the matrimonial home.

The plaintiff was left to care for her debilitated mother over a relatively long period of time that interrupted her education.

The plaintiff also had to finance her post secondary education in circumstances where she had a reasonable expectation that her father would assist her financially, which he did not.

The relationship between the plaintiff and her father remained strained for many years.

The deceased left the plaintiff $15,000, her sister $35,000, and the residue of the estate to his 2nd wife.

No reasons were stated for the modest bequest to the plaintiff.

The estate was approximately $1.75 million.

In addition his wife received assets of almost $1 million outside of the estate.

The widow also had an income of approximately $250,000 per year from the various franchises that she and the deceased owned.

The plaintiff had inherited $300,000 from her mother’s estate, and she and her husband had joint assets of $1.78 million.

The court increased the plaintiff daughters inheritance from $15,000 to $250,000.

It is noteworthy that the court found that the deceased, as the parent and much more mature adult, bore the greater responsibility for the estrangement between himself and the plaintiff.

It is the experience of us at disinherited.com, that the reasons for the estrangement between a parent and a child are more often than not directly attributed to improper parenting rather than the fault of the child.