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GIFTS - Inter vivos - Validity of transfer

Tuesday, December 03, 2019 @ 6:26 AM  


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Appeal by the plaintiff from trial judgment finding that the appellant’s mother succeeded in having her property transmitted to the respondents, her other two children, without it passing through her estate. The mother transferred title to her assets to herself and the respondents as joint tenants. During her lifetime, the respondents held their interests as trustees for the mother. They held their survivorship interests for their own benefit. A clause in the deed that served as the mechanism for the scheme provided that the mother could, during her lifetime, take action to deprive the respondents of their survivorship interests. After her death, the appellant sought a declaration that the deed was ineffective to transfer the survivorship interests and that the assets formed part of the mother’s estate. The trial judge rejected the idea that the deed could be construed as a testamentary instrument. Instead, he construed the deed to immediately grant rights of survivorship. The judge also found that, if he was wrong, and the deed did not convey a right of survivorship, the mother’s intentions were clear, so that any presumption that the respondents held their interests in a resulting trust were rebutted.

HELD: Appeal dismissed. While it was unclear whether the right of survivorship was being granted immediately or whether it was supposed to be granted on the mother’s death, the ambiguity must be resolved in favour of interpreting the deed as giving an immediate grant of the right of survivorship as most consistent with the language used in the deed, in conformity with the mother’s clear intentions. The deed could not be construed as a testamentary document. The deed did not purport to make the right of survivorship revocable but acknowledged that certain inter vivos dealings with the property would result in the right of survivorship disappearing. While such an action would render the right a worthless one, the possibility of it occurring did not render the gift invalid. Given that the joint tenancy was not severed during the mother’s lifetime, the respondents, as survivors, were entitled to a beneficial interest in the joint tenancy and acquired the assets on the mother’s death.

Herbach v. Herbach Estate, [2019] B.C.J. No. 2004, British Columbia Court of Appeal, H. Groberman, S. Stromberg-Stein and S.A. Griffin JJ.A., October 11, 2019. Digest No. TLD-December22019005