When a trier of fact has to consider the evidence before them, the sequence of events may be critical. For instance, in estate litigation, the date of death and the date of the making of any will are often key events upon which evidentiary findings may pivot. In cases where there is a transfer of real property in dispute, the date of the transfer is another such event. What was the intention at the time of the transfer and what is the evidence as to that intention?
Consider a case where a parent gratuitously transfers title to her house to one of her adult children. There is a rebuttable presumption that the child holds the property on a resulting trust for the parent. Although this concept was initially applied in Pecore to joint bank accounts, the presumption of resulting trust has also been applied to transfers of real property into joint ownership with an adult child.
Presumptions at law generally exist to provide protection to what is “presumed” to be the norm in the absence of evidence. In an ideal world, there will always be sufficient evidence to prove with absolute certainty what the parent’s intentions were. But, of course, that is not always the case and that is not the test. The file of the lawyer who acted on the transfer may not be available and the test in civil cases is one of balance of probabilities: given two possible outcomes, which one is at least 51% likely to be correct?
Of course, it is the balance of probabilities analysis that makes the job of a judge so difficult and makes for so much courtroom drama. In the case of a gratuitous transfer from a parent to an adult child, the evidence required to rebut the presumption is evidence of the transferor’s contrary intention, at the time of the transfer.
But what if there is no evidence of intention contemporaneous with the transfer? Does the presumption prevail? Not necessarily: there is no requirement for evidence to be contemporaneous with the transfer. Evidence subsequent to the transfer may be used to rebut the presumption if such evidence is relevant to the transferor’s intention at the time of the transfer.
Such was the finding in the recent unreported case of Rae v Rae, a decision of Justice Chang of the Ontario Superior Court of Justice. There, in the absence of the file of the lawyer who acted on the transfer, the Court had to look to other evidence in finding that the presumption of resulting trust was rebutted. The Court accepted the evidence of a subsequent lawyer retained to make a Will for an elderly mother who held the property in joint tenancy with her adult daughter. The lawyer was informed by the mother that she wished to transfer title to the property to the daughter as she wanted the daughter to receive the property upon her death. The mother had forgotten she had transferred the property some 12 years prior. When the subsequent lawyer gave effect to this direction by omitting the house from the will, it gave effect to this long held intention and served as evidence of her intention at the time of the initial transfer. The Court found that this evidence, as well as the evidence of a long-time neighbour, evidenced a continuity of donative intention. Despite the fact that this evidence was not exactly isolated to intention at the time of the transfer, it was sufficient for the Court to infer intention and to rebut the presumption.
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