In Playford v. McRae , 2024 ONSC 5374, approximately 20 months before the deceased’s death, the respondent son received funds from the deceased totalling $776,000.00. The applicant daughter sought to argue that the inter vivos transfers comprising the entire sum, being a $98,000 cheque, $500,000 from the deceased’s investment account, and 89 separate e-transfers totalling $178,000.00 were void because they were subject to a resulting trust. The applicant further argued that the respondent must have exercised undue influence over the deceased father in the circumstances.

The Court began its analysis by re-stating well-established trusts principles. There are two presumptions that apply to an inter vivos gift, ie. a voluntary transfer of property to another with the full intention that the property will be returned.

First, there is a presumption of resulting trust. When a parent gratuitously transfers property to an adult child, for example, the law presumes that the adult child holds the property on a resulting trust for the parent and the onus is placed on the adult child to rebut the presumption on a balance of probabilities.

Second, there is a presumption of undue influence if there is a potential for domination in the relationship between the donor and recipient. The recipient of the funds must demonstrate on a balance of probabilities that the gift was the result of full, free and informed thought.

If either presumption applies, then direct or circumstantial corroborating evidence is required to rebut the presumption. Such corroborative evidence can include the post-transfer conduct of the parent, where that is relevant to the parent’s intention to make a gift. It can also include written confirmation from the donor that the money is a gift.

Applying those principles to the case at bar, the Court found first that the $98,000 cheque was not a valid inter vivos gift and was therefore subject to a resulting trust. While there was evidence of the deceased’s having given financial gifts to his children in varying amounts, the amount of the impugned cheque was far larger than any gift he had given in the past. The only direct evidence of the $98,000 being a gift was from the respondent son. Further, the respondent’s own evidence was that the deceased had intended for the $98,000 to be loaned to the respondent and given to the respondent’s son. However, it was not clear that the full amount was transferred to the respondent’s son.

The Court also found that a portion of the 89 separate e-transfers were subject to a resulting trust, given the respondent’s admission that a portion of the monies were reimbursement for expenses he incurred on the deceased’s behalf. As regards the balance of the monies, there was no credible evidence to rebut the presumption of a resulting trust.

With regard to the $500,000 that was transferred from the deceased’s investment account, the Court found that the presumptions of undue influence and resulting trust did not apply. The “Gift Letter” in the name of the deceased unambiguously confirmed his instructions to provide a financial gift of $500,000 to the respondent. While the Gift Letter had been filled out by the respondent, there was no doubt that it had been signed and dated by the deceased. The deceased further verbally confirmed his instructions to the investment advisor in–person, who testified that he recalled the deceased gave “direct and clear” instructions and was “quite intent” on effecting the transfer.