Canada: Resulting Trusts – A Question Of Intention

Two recent decisions from the Supreme Court of British Columbia illustrate the importance, and difficulty, of determining the intentions someone who transfers property when ownership of that property is later challenged. In Pavlovich v Danilovic, 2019 BCSC 153, Justice Iyer found that she could not determine the intentions of a deceased father, concluding that his son held the properties on resulting trust for the estate. In contrast, in Iberg v. Claridge, 2019 BCSC 165, Justice Grauer was able to determine the plaintiff mother's intentions, holding that she did not intend to make a gift of certain funds to her son and declaring that a property registered in his name was impressed with a constructive trust.

Pavlovich v Danilovic, 2019 BCSC 153

Pavlovich involved a dispute between two adult children regarding properties owned by their late father, Dragomir. Before he died, Dragomir transferred two properties into joint tenancy with his son, Alexander, one for $1 and the other for $1 and "Natural Love and Affection". Dragomir's daughter, Ljuba, claimed that Alexander held the properties in trust. Alexander opposed her action, saying that Dragomir intended to gift both properties to him.

Transfers from Dragomir to Alexander

Ljuba's claim required the judge to ascertain Dragomir's intention when he created the joint tenancies. This was difficult, however, as the dispute divided the family, and none of the witnesses were disinterested or objective.

For his part, Alexander testified that his father created the first joint tenancy to carry on the family's culture and traditions. He also said, however, that Dragomir referred to the principal residence income tax exemption, which the transfer would allow Alexander to claim, and testified that Dragomir later stated he did not want Ljuba to get anything from his estate. In contrast, Ljuba testified that Alexander told her that he had been placed on title for tax purposes. She also said that Dragomir confirmed that nothing would change with his Will—the transfer would save on taxes and everything was for both of Alexander and Ljuba.

Regarding the second transfer, carried out by Alexander using Dragomir's Power of Attorney, Alexander testified that he made the transaction at Dragomir's direction. Ljuba testified that she understood only Alexander would be on title after Dragomir's death, but that this was okay because the Will provided that she and Alexander would inherit equally. She was also confident that her brother would "do the right thing".

Determining Dragomir's Intentions

Because the transfers had been made for nominal value, the presumption of resulting trust applied: Alexander was presumed to hold only legal title to the properties and to hold the beneficial interest in trust for Dragomir's estate. To defeat Ljuba's claim, Alexander was required to prove that Dragomir intended that Alexander hold both legal and beneficial title to the properties. The governing consideration, however, was Dragomir's actual intention. The court would only resort to the presumption if there was insufficient evidence of Dragomir's intention or the evidence was unpersuasive.

Here, there were significant difficulties with the evidence. It was just as likely that the joint tenancies reflected a financial strategy aimed at saving the family money (both in taxes during Dragomir's lifetime and in probate on his death) as they did an intention for Alexander to hold the properties to the exclusion of Ljuba on Dragomir's death. Similarly, the fact that Dragomir had granted Alexander a Power of Attorney that included the power to gift himself Dragomir's assets could reflect an intention to gift, but could also reflect an intention for Alexander to manage Dragomir's affairs for the benefit of both children. Finally, each side painted a picture of their relationship with Dragomir that supported the outcome they sought, bolstering their relationship with Dragomir and downplaying that of the other.

The judge was unable to determine Dragomir's intention on the evidence. As a result, "this [was] one of those rare cases where the outcome must be decided based on the burden of proof": para. 55. Alexander had not displaced the presumption by establishing that Dragomir intended to gift the properties to him. By operation of the presumption, Alexander held the properties on resulting trust for Dragomir's estate.

Iberg v. Claridge, 2019 BCSC 165

In contrast, in Iberg, Justice Grauer was able to determine the plaintiff mother's intentions and found that she had not intended to gift certain funds to her son.

Acquisition of the Property

In 2008, Ms. Iberg paid over $100,000 towards the purchase of a house to live in with her son, Mr. Claridge. Later, she contributed significant sums for furniture, appliances, and landscaping. Mr. Claridge did not contribute any money to the purchase, but paid equally towards the mortgage, for which he was the sole mortgagor, and towards other expenses.

In 2018, Mr. Claridge served his mother with a notice to end tenancy. Ms. Iberg claimed that it was in these circumstances that she discovered she had signed documents resulting in a registration of the property in her son's name alone, and making her a tenant and her son a landlord.

Ms. Iberg claimed a beneficial interest in the property by way of constructive trust, alleging that Mr. Claridge had been unjustly enriched. Mr. Claridge resisted the claim, arguing that there was a legal reason for his benefit: Ms. Iberg intended to gift the money to him. As equity presumes bargains, not gifts, Mr. Iberg bore the onus of proving his mother intended a gift.

An Intention to Gift?

At the outset, Justice Grauer observed that while Ms. Iberg was a highly credible witness, Mr. Claridge was more combative. Further, his evidence "made little sense except when viewed through the lens of an elevated sense of entitlement": para. 15.

Mr. Claridge pointed to three documents to support his claim of a gift: (1) an Assignment of Purchase Contract, by which Ms. Iberg assigned her interest under the purchase contract to Mr. Claridge; (2) a Gift Letter; and (3) a residential tenancy agreement. However, the judge held that these documents did not support a gift to Mr. Claridge, in part because of evidence provided by the mortgage broker, Mr. Ingram.

Mr. Ingram testified that Ms. Iberg had contacted him to obtain mortgage financing. He determined that although she had money for a down payment, she was not likely to qualify for a mortgage. They discussed Mr. Claridge, who had a decent income but no capital, and came up with a solution. Because of Ms. Iberg's poor credit, the mortgage application would be in Mr. Claridge's name alone. Ms. Iberg would be cast as a tenant to enhance Mr. Claridge's income, and her funds would be designated as a gift. Notwithstanding these events, Mr. Ingram understood that both parties would be buyers.

The judge concluded that the documents evidenced what the parties needed to do to qualify for financing, not what they intended as between themselves. As such, Mr. Claridge failed to prove that the funds were a gift to him. The parties intended that they would both be purchasers and would both live in the house. They would share the expenses, including payments on the mortgage that required Mr. Claridge's participation to obtain. The property was therefore impressed with a constructive trust in Ms. Iberg's favour, proportionate to the unjust enrichment of Mr. Claridge.

The Importance of Intention

Both Pavlovich and Iberg demonstrate the significance of intention in determining true ownership of property, and the importance of leading credible evidence of this intention. In each case, the plaintiff succeeded in establishing a trust of property because the defendant failed to prove a gift to him. In Pavlovich, the judge could not ascertain Dragomir's intentions such that the presumption of resulting trust determined the outcome. Dragomir was not available to provide evidence regarding his intentions, and none of the witnesses was objective. In Iberg, the evidence established that Ms. Iberg did not intend a gift. Ms. Iberg was present to give evidence about her intentions, and this was supported by the evidence of an objective witness, Mr. Ingram.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions