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Wills, Estates & Trusts Law - GIFTS - Inter vivos - Presumption of advancement - Parent to child - Validity of transfer - Donative intent (animus donandi)

Thursday, March 02, 2017 @ 7:00 PM  

Appeal by the defendant, John McKendry, from a trial judgment declaring he held real property in trust for his mother’s Estate. The respondents, Margaret, Jean and Alexis, were three of the appellant’s four sisters, all of whom were entitled to share in the mother’s Estate. From 2006 through the mother’s passing in 2012, John resided with the mother in her Vancouver home. In 2008, the mother transferred legal title in the home into joint tenancy with John. Initially, John held the beneficial interest in trust in equal shares for himself and his four sisters. In 2010, the mother removed the trust conditions attached to the transfer to ensure John would receive the property upon her death. She informed her lawyer in writing of her intention. The mother’s 2010 Will divided the residue of her Estate equally among the sisters and included a paragraph stating John would receive the home. In 2012 and 2014, John’s sisters brought litigation in respect of the home. The trial judge found the mother was required to execute a written deed of gift under seal for John to take beneficial ownership of the home upon her death, and therefore John held the property in trust for the Estate. John appealed.

HELD: Appeal allowed. The trial judge erred in declaring John held the property in trust for the mother’s Estate. The governing consideration was the mother’s actual intention. The presumption of resulting trust was not required to determine the outcome given the mother’s manifest and unambiguous intention. In 2008, the mother’s gratuitous transfer of legal title to John in joint tenancy intended he hold the property in trust. In 2010, that intention changed, as the mother unambiguously renounced her beneficial interest in her survivorship rights in favour of John. In doing so, the mother clearly intended an immediate inter vivos gift to John. The change in intention was evidenced by the mother’s note to her lawyer, which satisfied the requirements of s. 59(3) of the Law and Equity Act. Nothing more would have been gained by executing a deed of gift under seal, as the mother’s immediate inter vivos gift was complete and binding.