As I have recently discussed, gratuitous inter vivos transfers made without consideration frequently give rise to Vancouver estate litigation. As people age they often transfer property gratuitously to their adult children, and then hold it with them in joint tenancy. If, after the parent dies, it is unclear whether the parent intended to gift the property to the child, then the presumption of resulting trust will apply, with the effect being that the child holds the property in trust for the parent’s estate, to be distributed in accordance with the parent’s will. The intention of a person who transfers property gratuitously to another is sometimes difficult to determine, particularly in the situation just described where the transferor is deceased. However, as the BC Court of Appeal emphasized in McKendry v. McKendry, 2017 BCCA 48, if there is sufficient evidence of the transferor’s actual intention, the presumption of resulting trust is not required to determine the outcome of the case.
Mary McKendry owned a home on West 48th Avenue in Vancouver. Estate litigation arose after Mary’s death on February 23, 2012 to determine beneficial ownership of the property. The evidence established that in 2008, Mary transferred legal title to the property into joint tenancy with her son John, with the intention that John would hold the property in trust for her estate. In 2010, Mary decided to remove the trust conditions so that John would receive the property absolutely on her death and Mary informed her lawyer in writing accordingly. When she executed her will in 2010, Mary also signed a two-page document, which provided: “… I want my home to be my son’s property on my death absolutely – no strings attached. I have made this decision after much consideration and I fully understand that this gives my son the majority of my assets. My house constitutes the majority of my assets.” Mary’s will provided that the residue of her estate was to be divided equally among her four daughters.
Three of Mary’s daughters commenced the estate litigation, arguing that John held the property in trust for Mary’s estate and seeking variation of the will. The sisters said that Mary’s intention in January 2008 when she transferred the property into joint tenancy should govern the outcome of the case. The trial judge agreed with the sisters and found that John held beneficial title to the property on a resulting trust for his late mother’s estate. On appeal, Dickson J.A. concluded that the trial judge erred in declaring John held the property in trust for Mary’s estate. In the Court of Appeal’s view, Mary’s intentions in 2008 and 2010 were manifest and unambiguous. At the time of the transfer in 2008, Mary clearly did not intend to gift to John a beneficial right of survivorship in the property. From January 2008 onward, John held legal title with Mary jointly and all of the beneficial interest, including survivorship rights, in trust. However, the evidence established that Mary changed her intention in 2010. In the two-page document prepared by her lawyer, Mary unambiguously renounced her beneficial interest in the right of survivorship in John’s favour should he survive her. In doing so, she clearly intended to make an immediate inter vivos gift of that incident of the joint tenancy to John. As the last surviving joint tenant, John took full ownership of the property and it was unnecessary to vary Mary’s will.
A central issue on appeal was whether the trial judge erred in finding that Mary was required to execute a written deed of gift under seal to perfect the gift to John of the right of survivorship in the property. Transfers of land are subject to statute. Pursuant to the Law and Equity Act, contracts respecting land must be in writing to be enforceable. Pursuant to the Land Title Act, transfers of land must be in a prescribed or otherwise acceptable form and registered against title to land. Dickson J.A. held that Mary’s renunciation of her beneficial interest in the right to survivorship did not amount to a “disposition” of land pursuant to s. 59(1) of the Law and Equity Act. Accordingly, the requirements of s. 59(3) that the contract be in writing did not apply. And in any event, the two-page document in which Mary renounced her interest was a signed writing as contemplated by s. 59(3).
Given that she had previously transferred legal title to the property to John in joint tenancy, Mary did everything necessary in December 2010 to give her beneficial interest to John. Her intention was made manifest in the signed two-page document her lawyer prepared and no further act of delivery was required because of the existing joint tenancy. Nothing more would have been gained had Mary executed a deed of gift under seal, given her clear and formally expressed intention. The immediate inter vivos gift was complete and binding.
In rendering her decision, Dickson J.A. provided a helpful overview of the form of concurrent property ownership known as joint tenancy. Here are the key principles:
Dickson J.A.’s reasons also contain a summary of how the presumption of resulting trust is to be applied, which will be of assistance in all Vancouver estate litigation:
The actual intention of the transferor is the governing consideration in Vancouver estate litigation. The presumption of resulting trust determines the result only where there is insufficient evidence of intention to rebut the presumption on a balance of probabilities. When legal title to property is transferred gratuitously and the presumption of resulting trust applies, the right of survivorship is held on trust by the transferee.
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