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GIFTS - Inter vivos - Presumption of advancement - Parent to child - Rebuttal

Tuesday, November 07, 2017 @ 6:01 AM  

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Appeal by the Executor of the Chris Kyle Estate from an order in favour of the Executor of the John Kyle Estate. Chris, now deceased, was named Executor of the Will of his father, John. At the time of John's passing, Chris held a joint account with John totaling $400,000. Upon John's death, Chris transferred the funds to his personal account and applied them to pay a mortgage on property owned by his company. Chris failed to disclose the existence of the joint account or the whereabouts of its contents to his three brothers. Upon learning of the true circumstances, one of the brothers, Robert, sued Chris seeking the return of the money to John's Estate. Chris's defence of the action put him in a conflict as the Executor of John's Estate. Robert's action sought an accounting, removal of Chris as Executor, a grant of Probate to Robert, related Estate relief, and judgment against Chris in respect of the missing funds from the joint account. The trial judge determined that John, in creating the joint account, did not intend a gift of the funds therein to Chris. The trial judge declared Chris held the monies in trust for himself and three brothers and ordered disgorgement of the funds. Chris appealed.

HELD: Appeal allowed in part. It was open to the trial judge to conclude Chris failed to rebut the presumption of resulting trust. No misapprehension of evidence arose in connection with that conclusion. The trial judge's conclusion that John intended to share the proceeds from the joint account equally with his children was supported by the evidence. However, the remedy of resulting trust required adjustment on appeal, as such remedy would result in partial intestacy. Instead, an order requiring disgorgement to the estate was substituted, to be dealt with according to the law relating to estates and with whatever claims or waivers may be asserted. In addition, the absence of a relationship between Chris's payment of a mortgage and a subsequent acquisition of property precluded the remedy of disgorgement in respect of the increase in value of that property. The order for full indemnification was set aside in favour of an order for party and party costs up to February 2015 and double costs thereafter.

Kyle Estate v. Kyle Estate, [2017] B.C.J. No. 2113, British Columbia Court of Appeal, M.E. Saunders, S. Stromberg-Stein and L. Fenlon JJ.A, September 15, 2017. Digest No. TLD-November62017004