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TRUSTS - Express trusts - Requirements - Certainty of intention

Wednesday, March 03, 2021 @ 6:21 AM  

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Appeal by the wife from a finding that a corporate-owned family residence was subject to an express trust in the wife’s favour and therefore a family asset. Cross-appeal by the husband for a larger share of the residence and the setting aside of an order directing him to bear 50 per cent of the residence’s expenses. Both also appealed orders determining and dividing other assets. The wife’s parents owned a seafood business consisting of the corporations BHIT, VIE and BHIS. Both spouses worked in the business during the marriage. BHIT purchased a residential home where the spouses resided until separation in 2012. BHIT paid the mortgage, property taxes and renovation and insurance costs. The trial judge determined the residence was the subject of an express trust in favour of the wife and should be apportioned equally between the spouses. The judge found that the wife’s father unambiguously told her and others that the house was being gifted to her. The trial judge found that the father’s goal in creating the trust was to protect his daughter’s interest in the house from claims by the husband but concluded he had failed in that objective because a trust property that would be a family asset if owned by a spouse was a family asset. The wife argued that the judge erred in finding that she was not entitled to a 50 per cent share of properties acquired by husband after trial.

HELD: Appeals allowed in part. The declaration that BHIT held the property in trust for the wife was set aside. As a result, many of the issues raised by the husband were resolved. The division of the other assets was not disturbed. The findings of fact the judge relied on to find an express trust fell short of establishing the certainties of intention and object. The judge’s findings that the father told the wife and others that the property was being gifted to her, that the house was for the wife and the husband, that the father wanted the company to pay the mortgage for tax-saving purposes, and that once the mortgage was paid title would be transferred into both spouses’ names were consistent with an intention to make a future gift to both spouses and did not support an intention to immediately transfer a beneficial interest to the wife alone. All the statements relied on referred to the house being intended for both spouses. The statements relied on were consistent with either an imperfect gift or an unenforceable gratuitous promise to transfer the house to the spouses at a future date.

Xu v. Hu, [2021] B.C.J. No. 5, British Columbia Court of Appeal, L.A. Fenlon, J.J.L. Hunter and G.B. Butler JJ.A., January 7, 2021. Digest No. TLD-March12021005