Rebutting the Presumption of Resulting Trust Encore
1. Introduction
Cases in which the presumption of resulting trust arises when property is transferred by a parent to an adult, independent child now occur frequently. And invariably they raise the issue of the evidence required to rebut the presumption. But it is good on occasion to look closely at the evidence the court considers in deciding the issue. The matter arose in the recent case, Rae v Rae.[1]
2. Facts
Mary Rae died a widow in 2021. Her three children, Kyle, the applicant Bruce, and the respondent Patricia, survived her. Mary and her husband (who died in 1995) had purchased the family home in 1958 and took title as joint tenants but they transferred title into Mary’s name alone in 1977. In 2004 Mary transferred title into the name of herself and Patricia as joint tenants.
In 2011 Mary made a will that named Bruce and Patricia her executors, made specific bequests, including a devise of the house, to Patricia, as well as bequests to two grandchildren. She left the residue equally to Bruce and Patricia. In 2016 Mary made a new will, prepared by the same lawyer. It also named Bruce and Patricia as executors, made specific bequests to Patricia, and left the residue equally to Bruce and Patricia. The 2016 will did not contain a devise of the house to Patricia. Mary raised the issue with the lawyer but executed the will after he reminded her of the 2004 transfer.
Mary’s previous lawyer died in 2012 and his file for Mary could not be found. Thus the court did not have access to any previous wills if any, or the lawyer’s notes about previous wills or the 2004 transfer.
Bruce brought an application in which he claimed that the 2004 transfer to Patricia raised the presumption of resulting trust, and that the presumption was not rebutted, so that the property resulted to Mary’s estate. Patricia responded and claimed that presumption was rebutted and that she was therefore entitled to the property.
Both parties filed affidavits. An affidavit from Mary’s close friend and neighbour, and an affidavit by the drafting lawyer containing the transcript and exhibits from his examination were also filed.
3. Analysis and Judgment
By reference to the leading case, Pecore v Pecore,[2] Justice Chang began his analysis by reviewing the law of the presumption of resulting trust and the evidence needed to rebut the presumption when a parent transfers property to an adult, independent child. His Honour noted:
The evidence must be clear, convincing, and cogent that: 1) the parent intended to gift the property to the child; 2) the child accepted the gift; and 3) the transaction was completed by a sufficient act of delivery or transfer of the property…. Evidence of the quality of the relationship between the transferor and the transferee can be considered in determining whether the presumption has been rebutted…
By reference to Kent v Kent[3] he noted:
Although the general rule is that the proffered evidence “ought to be contemporaneous, or nearly so”, evidence of intention arising after the transfer that is relevant to the parent’s intention at the time of transfer may also be considered…. The court should assess that evidence for reliability and weight and guard against evidence that is self-serving or tends to reflect a change of intention….
His Honour concluded that Patricia had rebutted the presumption. There was clear and cogent evidence that Mary intended to give the property to Mary, that Mary accepted the gift, and that the gift was completed when the 2004 transfer was made. He found that Patricia’s evidence was not controverted by Bruce. Further, it was corroborated by the 2004 transfer and by the evidence of Mary’s close friend and neighbour and the lawyer. Patricia testified that she was present when Mary instructed her previous lawyer to prepare and register the 2004 transfer. And the evidence of the friend and the lawyer, though not contemporaneous, confirmed Mary’s intention to transfer the property into joint ownership so that Patricia would become the sole legal and beneficial owner when her mother died. Both affiants confirmed Mary’s stated intention to make a gift of the property to her daughter.
His Honour rejected Bruce’s argument that Mary’s 2004 transfer may have been motivated by other reasons than making a gift, as being nothing more than conjecture and supposition. He also found that there were no reasonable bases to support Bruce’s arguments that the evidence of the neighbour and the lawyer were unreliable and should not be accorded much weight. In fact, he found the evidence of both to be clear and to the point and spoke to what they observed and heard from Mary. Moreover, he found their evidence to be reliable and credible.
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[1] 2023 ONSC 4707.
[2] 2007 SCC 17.
[3] 2020 ONCA 390.
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Written by: Albert Oosterhoff
Posted on: January 24, 2024
Categories: Commentary
1. Introduction
Cases in which the presumption of resulting trust arises when property is transferred by a parent to an adult, independent child now occur frequently. And invariably they raise the issue of the evidence required to rebut the presumption. But it is good on occasion to look closely at the evidence the court considers in deciding the issue. The matter arose in the recent case, Rae v Rae.[1]
2. Facts
Mary Rae died a widow in 2021. Her three children, Kyle, the applicant Bruce, and the respondent Patricia, survived her. Mary and her husband (who died in 1995) had purchased the family home in 1958 and took title as joint tenants but they transferred title into Mary’s name alone in 1977. In 2004 Mary transferred title into the name of herself and Patricia as joint tenants.
In 2011 Mary made a will that named Bruce and Patricia her executors, made specific bequests, including a devise of the house, to Patricia, as well as bequests to two grandchildren. She left the residue equally to Bruce and Patricia. In 2016 Mary made a new will, prepared by the same lawyer. It also named Bruce and Patricia as executors, made specific bequests to Patricia, and left the residue equally to Bruce and Patricia. The 2016 will did not contain a devise of the house to Patricia. Mary raised the issue with the lawyer but executed the will after he reminded her of the 2004 transfer.
Mary’s previous lawyer died in 2012 and his file for Mary could not be found. Thus the court did not have access to any previous wills if any, or the lawyer’s notes about previous wills or the 2004 transfer.
Bruce brought an application in which he claimed that the 2004 transfer to Patricia raised the presumption of resulting trust, and that the presumption was not rebutted, so that the property resulted to Mary’s estate. Patricia responded and claimed that presumption was rebutted and that she was therefore entitled to the property.
Both parties filed affidavits. An affidavit from Mary’s close friend and neighbour, and an affidavit by the drafting lawyer containing the transcript and exhibits from his examination were also filed.
3. Analysis and Judgment
By reference to the leading case, Pecore v Pecore,[2] Justice Chang began his analysis by reviewing the law of the presumption of resulting trust and the evidence needed to rebut the presumption when a parent transfers property to an adult, independent child. His Honour noted:
The evidence must be clear, convincing, and cogent that: 1) the parent intended to gift the property to the child; 2) the child accepted the gift; and 3) the transaction was completed by a sufficient act of delivery or transfer of the property…. Evidence of the quality of the relationship between the transferor and the transferee can be considered in determining whether the presumption has been rebutted…
By reference to Kent v Kent[3] he noted:
Although the general rule is that the proffered evidence “ought to be contemporaneous, or nearly so”, evidence of intention arising after the transfer that is relevant to the parent’s intention at the time of transfer may also be considered…. The court should assess that evidence for reliability and weight and guard against evidence that is self-serving or tends to reflect a change of intention….
His Honour concluded that Patricia had rebutted the presumption. There was clear and cogent evidence that Mary intended to give the property to Mary, that Mary accepted the gift, and that the gift was completed when the 2004 transfer was made. He found that Patricia’s evidence was not controverted by Bruce. Further, it was corroborated by the 2004 transfer and by the evidence of Mary’s close friend and neighbour and the lawyer. Patricia testified that she was present when Mary instructed her previous lawyer to prepare and register the 2004 transfer. And the evidence of the friend and the lawyer, though not contemporaneous, confirmed Mary’s intention to transfer the property into joint ownership so that Patricia would become the sole legal and beneficial owner when her mother died. Both affiants confirmed Mary’s stated intention to make a gift of the property to her daughter.
His Honour rejected Bruce’s argument that Mary’s 2004 transfer may have been motivated by other reasons than making a gift, as being nothing more than conjecture and supposition. He also found that there were no reasonable bases to support Bruce’s arguments that the evidence of the neighbour and the lawyer were unreliable and should not be accorded much weight. In fact, he found the evidence of both to be clear and to the point and spoke to what they observed and heard from Mary. Moreover, he found their evidence to be reliable and credible.
—
[1] 2023 ONSC 4707.
[2] 2007 SCC 17.
[3] 2020 ONCA 390.
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