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Wills, Estates & Trusts Law - Gifts - Inter vivos - Presumption against gift, resulting trust - Rebuttal - Presumption of advancement - Person in loco parentis - Rebuttal - Validity of transfer

Thursday, November 24, 2016 @ 7:00 PM  


Appeal by the plaintiff, the Thorsteinson Estate, from a judgment dismissing an action and upholding a gift in favour of the defendant, Olson. The testator had served as the defendant’s nanny and they subsequently developed a close relationship akin to parent and child. As an adult, the defendant lived at the testator’s property for several years. In 2000, the testator signed a deed of gift transferring nine parcels of farmland to herself and the defendant as joint tenants. In 2001, a dispute arose between the parties and the testator subsequently commenced an action seeking to have the transfers set aside on the basis of resulting trust, undue influence and breach of fiduciary duty, and seeking an accounting for the defendant’s use and occupation of the land. The testator’s Estate continued the action following the testator’s passing. The trial judge dismissed the action in its entirety and upheld the gift. The trial judge found no evidence of undue influence, and concluded that if the presumptions of either undue influence or resulting trust had arisen, both were rebutted by evidence of an intention to provide a complete and unconditional gift to the defendant. The Estate appealed.

HELD: Appeal dismissed. The trial judge did not err in fact or law in the application of the presumption of resulting trust. Significant evidence supported the trial judge’s conclusion of a gratuitous transfer in favour of the defendant. The trial judge did not err in finding the presumption was rebutted in the event it was available. Although the facts supported the presence of the presumption, there was no evidence of manipulation or coercion, and it was clear that the testator initiated the land transaction with a clear intent to benefit the defendant. In finding the presumption of undue influence was rebutted, the trial judge properly considered the issue of the independent advice received by the testator, and found she understood the nature of the transaction. The factual findings underlying the conclusion that no fiduciary relationship existed between the parties were supported by the evidence, as there was no indication the defendant managed the testator’s financial affairs. The finding that the transfer was a valid gift was dispositive of the application to sever the joint tenancy. No basis for an accounting by the defendant was established.