High evidentiary threshold to rebut the presumption of resulting trust

I blogged a few years ago on the old law of presumption of advancement and new law of presumption of resulting trust established in the landmark Supreme Court of Canada Pecore decision. Click here for my previous blog.

The presumption of resulting trust applies in estate contexts when a parent gratuitously transfers his or her assets to an adult child.  The court will presume that the child is holding the property in trust for the parent’s estate, unless the child can prove that the transfer was intended to be a gift. In other words, the child has to rebut the presumption of resulting trust if the child claims that the transfer was a gift.

Children who attempt to rebut the presumption of resulting trust need strong evidence that their parent intended to gift them the property.  A recent BC judgment in McKendry v McKendry, 2015 BCSC 2433 illustrates that the evidentiary threshold is high to rebut the presumption of resulting trust.

In Mckendry, the deceased died in 2012 and was survived by five adult children, one son and four daughters. In 2008, she transferred title to her home into a joint tenancy with the son. At the time of the transfer, the deceased wanted the son to hold the home in trust for her estate. In that regard, she made two separate trust declarations outlining how the son would divide the home amongst all her children upon her death.

In 2010, the deceased decided to gift the home to the son. She provided in her Will that she gave the home to her son and the residue of her estate to her four daughters in equal shares. However, the deceased did not take steps to transfer the title of the home into the son’s name only. Instead, the home remained in the names of the deceased and the son in joint tenancy.

Upon the death of the deceased, her daughters challenged the gift of the home to the son, arguing that it was held in trust for their mother’s estate.  The court held that, because of the conflicting evidence in the form of the deceased’s trust declarations and her Will, the son was unable to rebut the presumption of resulting trust. In particular, the court stated that the son failed to discharge the burden on him to show that in 2008 when the joint tenancy was arranged the deceased intended to make an immediate gift to him of the survivorship interest in the home.

With respect to the 2010 change of intention of the deceased, the court commented that if in 2010 the deceased intended to make a gift of the home to the son, then the deceased failed to take the steps necessary to make a valid, legally binding gift.

The Mckendry decision stands as a cautionary tale to willmakers that they must be certain of their intention before transferring property. It is highly recommended that people consult with professionals to make their intention expressly known and to have professionals guide them through the steps to make a valid and legally binding gift if a gift is indeed intended.

Thank you to Michael Wilson for his assistance with this blog post!

Estop and Think Before Relying on Future Estate Interests

Proprietary estoppel is a legal doctrine that protects parties who detrimentally rely on assurances made by others about their property.  The doctrine is intended to prevent parties from profiting by misleading others.

While the former English interpretation of proprietary estoppel was stringent and specific, recent Canadian decisions have crafted more liberal criteria for applying the doctrine.  However, the recent decision of Cowper-Smith v Morgan, 2016 BCCA 200 [Cowper-Smith] might signal a return to a more-stringent application of proprietary estoppel.

In Cowper-Smith, the Defendant (Gloria) offered her brother (Max) an option to purchase her one-third interest in their Mother’s Estate if he returned from England to take care of their Mother (Elizabeth).  As Elizabeth was not deceased at the time of Gloria’s offer, Gloria did not yet own the one-third interest, but would receive it upon her Mother’s death.  Max agreed and cared for Elizabeth until she passed away, at which time he attempted to exercise his option to purchase Gloria’s interest in the Estate.  She refused.

While the BC Court of Appeal agreed that proprietary estoppel required a representation by a property owner, and reliance on this representation, they limited proprietary estoppel’s scope to actual owners of property.

Dismissing Max’s argument, the Court held that, since Gloria’s estate interests were not legally vested until Elizabeth’s death, Gloria was only a possible owner of the property.  The Court then warned that a potential beneficiary of an Estate (a possible owner) was not a true/ actual owner of property and thus was protected from proprietary estoppel claims with respect to property that has not yet been received.

The Cowper-Smith case indicates that, before relying on a promise made in respect of property, one should ensure that the promisor owns the property that is being promised.  The case, therefore, appears to mark a more-stringent and specific application of proprietary estoppel.

Physician-Assisted Death – Bill C-14

On April 14, 2016, the government introduced Bill C-14 that would legalize medical assistance in dying if it comes into force.

To understand the implications of the language in Bill C-14, a bit of history is in order. In February 2015, the Supreme Court of Canada held that a blanket ban on assisted death was unconstitutional, and ordered Parliament to draft right-to-die legislation that respects the Charter. The Supreme Court of Canada in Carter v. Canada (Attorney General) specifically held that the test for qualifying for medically assisted death in Canada should be: competent adult persons that (1) clearly consent to the termination of life, and (2) have a grievous and irremediable medical condition that causes enduring and intolerable suffering to the individual in the circumstances of his or her condition.

Bill C-14 does not go that far. The key is found in the proposed s. 241.2(2)(d), where the eligibility criterion of having a “grievous and irremediable medical condition” is defined.

Grievous and irremediable medical condition

(2) A person has a grievous and irremediable medical condition if

(a) they have a serious and incurable illness, disease or disability;

(b) they are in an advanced state of irreversible decline in capability;

(c) that illness, disease or disability or that state of decline causes them enduring physical or psychological suffering that is intolerable to them and that cannot be relieved under conditions that they consider acceptable; and

(d) their natural death has become reasonably foreseeable, taking into account all of their medical circumstances, without a prognosis necessarily having been made as to the specific length of time that they have remaining.

(emphasis added)

The condition that the person’s natural death be reasonably foreseeable can be interpreted to mean that a person wishing to qualify for medical assistance in dying must be in the terminal stages of illness. This requires more than the Supreme Court of Canada’s ruling that the test for qualifying should simply be those who have a grievous and irremediable medical condition that causes enduring and intolerable suffering to the individual in the circumstances of his or her condition.

While controversy stirs from all sides as the new Bill C-14 is hotly debated in the press, the government now has about five weeks to debate, study and pass the bill before the Supreme Court’s June 6 deadline. The justice committee will likely have time to study and propose amendments before the deadline. It remains to be seen, however, whether any amendments will be proposed, or whether Bill C-14 will even be passed. Updates on this matter will follow.

Thank you to Kevin Tjia for assisting with this blog post.