HIGHLIGHTS
A Justice of the British Columbia Supreme Court has held that a 1995 transfer of a farm by a father to one of his adult 6 children constituted a gift, based on the transferee's recollection, and a clause in a subsequent Will. The Court concluded that the presumption of resulting trust was rebutted. The case contains a good review of British Columbia law with respect to joint tenancy and presumptions of resulting trust. (Schouten Estate v. Swagerman-Schouten, CALN/2015-001, [2014] B.C.J. No. 3043, British Columbia Supreme Court)
NEW CASE LAW
Schouten Estate v. Swagerman-Schouten; CALN/2015-001, Full text: [2014] B.C.J. No. 3043; 2014 BCSC 2320, British Columbia Supreme Court, J.R. Dillon J., December 9, 2014.
Transfer of Farm Land into Joint Tenancy -- Gifts and Resulting Trust -- Evidence Required to Rebut Resulting Trust.
Renita Sawkins ("Renita") brought an action against her sister, Maria Cornelia Swagerman-Schouten ("Maria") for a declaration that a transfer from their father, Jan Schouten ("Jan") into the joint names of Jan and Maria in 1995 was not a gift, but created a resulting trust pursuant to which the farm was held in trust by Renita to be distributed in accordance with the terms of Jan's Will.
Jan died on May 3, 2011 leaving 6 children including Maria and Renita. Renita was appointed his executor and was the sole beneficiary under his Will.
The land was transferred into the joint names of Jan and Maria in 1995 with the assistance of a local Notary Public. At the time of the transfer, the assessed value of the farm was $398,000.00. Maria testified that her father told her he wanted to transfer the farm to her as a gift. A Will signed by Jan in 2009 contained the following provision:
"I CONFIRM that I hold the lands and premises situate, lying and being at 367 McCallum Road, in the City of Abbotsford, in the Province of British Columbia, being all and singular a parcel or tract of lands and premises consisting of nine (9) Acres, more or less, as a Joint Tenant with my daughter, Maria Cornelia Swagerman-Schouten, and I hereby confirm that joint tenancy and I understand that as a joint tenancy those said lands and premises will form no part of my estate."
Decision: Dillon, J. [at para. 46] concluded that Jan intended to gift the farm to Maria in 1995 by transfer into joint tenancy. The action was dismissed [at para. 47].
Dillon, J. reviewed the British Columbia law with respect to gratuitous transfers, resulting trusts and joint tenancy at para. 2 to 4:
[2] In disputes over gratuitous transfers, common law presumptions provide a guide to resolve the dispute if the evidence of intention of the transfer cannot be proven on a balance of probabiliities (Pecore v. Pecore, [2007] 1 S.C.R. 795, 2007 SCC 17 (CanLII) at paras. 23, 43-44 [Pecore]). The court must determine the proper presumption that applies (Pecore at para. 55). When a transfer is made for no consideration to independent adult children and is challenged, the applicable presumption is of a resulting trust (Pecore at para. 26; Bergen v. Bergen, [2013] B.C.J. No. 2552, 2013 BCCA 492 (CanLII) at para. 5 (Bergen)). The onus is then on the transferee to demonstrate that a gift was intended (Pecore at para. 24). As described in Fuller v. Harper, 2010 BCCA 421 (CanLII) at para. 47 [Fuller], the presumption only becomes evident after all of the evidence on the surrounding circumstances in which the transfer was made has been weighed. If the judge is unable to reach a conclusion about the transferor's actual intention at the time of transfer, the presumption will apply to tip the scales (see also Bergen at para. 5).
[3] Thus, in gratuitious transfer situations, the actual intention of the transferor is the governing consideration (Pecore at paras. 43-44; Kerr v. Baranow, [2011] S.C.J. No. 10, 2011 SCC 10 (CanLII) at para. 18; Bergen at para. 38). In the case of an interest in land as joint tenants, it does not follow as a matter of law that an immediate irrevocable gift was given: the transferee must still rebut the presumption of resulting trust by bringing evidence of intention (Bergen at para. 22).
[4] It appears settled now in British Columbia that the equitable presumptions established in Pecore apply to real property transfers (Fuller at paras. 41-45; Chung v. La, [2011] B.C.J. No. 2156, 2011 BCSC 1547 (CanLII), at paras. 45-46, 55 [Chung]; Aujla v. Kaila, [2010] B.C.J. No. 2453, 2010 BCSC 1739 (CanLII) at paras. 31-37 [Aujla]; Modonese v. Delac Estate, [2011] B.C.J. No. 93, 2011 BCSC 82 (CanLII) at paras. 141-12; Suen v. Suen, [2013] B.C.J. No. 1382, 2013 BCCA 313 (CanLII) at paras. 35-38). Thus, the presumption of title in s. 23(2) of the Land Title Act, R.S.B.C. 1996, c. 250 as conclusive proof of title may be displaced by equitable presumptions that take into account the equitable interests between the parties in certain circumstances (Chung at para. 47; Aujla at para. 32). This is so even though title to the property in question may have been settled before 2007 when Pecore was decided (Kuo v. Kuo, [2014] B.C.J. No. 538, 2014 BCSC 519 (CanLII) at paras. 225-227).
Dillon, J. observed the issue is whether the intention was to gift the farm to Maria at the time of the transfer in 1995 and that if it was determined to have been a gift on a balance of probabilities, then the determination of beneficial ownership prevails and it is necessary to rely upon the presumption. If it is unclear whether Jan intended that the transfer be a gift, then the presumption of resulting trust as established by Pecore applies [at para. 7].
Dillon, J. reviewed the family background and the circumstances surrounding the transfer in detail at para. 8 to 45 before concluding that Jan intended to gift his farm to Maria in 1995 by transferring to joint tenancy, and that the presumption of resulting trust had been rebutted.
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