No Take Backs: Gifting and Changes of Heart
“This is one of too many cases that appear in our courts demonstrating family disputes over what the preceding generation has left behind. In coming to court for resolution, the parties risk any potential for a continuing, friendly or at least cordial relationship amongst siblings; the present generation. At times the problem is over the failure of the children to acknowledge the intention of their parent as expressed in a will. Here, unhappily, the problem arises from the actions and apparent change of heart by the father … .”
This lament comes from the opening paragraphs of 1268223 Ontario Limited v. Fung Estate, 2016 ONSC 8020 (CanLII). There, the father incorporated a company, being the plaintiff. His daughter was sole officer, director and shareholder of the company. The company then purchased a building in Toronto with funds provided by the father. Years later, the property was sold. The father said that he needed money in order to cover other debts, and received a cheque from the company for $1,070,000.
The father never repaid the money. The daughter then sued the father for repayment. The father defended, alleging that the property and the sale proceeds were held in trust for him. After he died, his estate continued the defence.
At trial, the judge found that the father gifted the company and the purchase money for the property to the daughter. There was extensive evidence to support this, including the fact that the father had made similar gifts to his other two children, the fact that the father had told the daughter that “I am going to buy you a property.”, the fact that the mother referred to the property as being the daughter’s property or the daughter’s mall; the fact that none of the documentation surrounding the purchase of the property suggested that it was a purchase in trust for the father, and the fact that, although the father remained involved in the operation of the property, it was the daughter who determined that the property should be sold. Perhaps most tellingly, in an alleged exchange between the father and one of his sons, the son said “you gave it to her…you can’t take it back”, to which the father said “so what…I want it back”.
The trial judge concluded that “There is no basis upon which [the father or the father’s estate] can claim the ownership of the money taken. There is no evidence that there was any intention that the company or the property it purchased, operated and sold, was for the benefit of anyone other than [the daughter].”
It is not clear if the presumption of resulting trust was argued. The presumption is not addressed in the reasons for decision. However, it is likely that the daughter’s evidence could have rebutted the presumption.
The decision was upheld on appeal. The Court of Appeal found that the evidence supported the three criteria for a gift set out in McNamee v. McNamee, 2011 ONCA 533 (CanLII), being an intention to make a gift, an acceptance of the gift by the done, and a sufficient act of delivery or transfer.
Thank you for reading.