Case reference: Foley v. McIntyre, 2015 ONCA 382
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The parties’ father, DF, made three transfers of money to the defendant and made a bequest to her of his Canada Savings Bonds. The first transfer involved the proceeds of a mature bond, which were used to purchase a GIC in the defendant’s name. When the GIC matured, the principal and interest were deposited into one of DF’s bank accounts and then transferred to the defendant’s bank account the same day. The defendant claimed that the proceeds were paid into DF’s account because of a bank error, which the bank immediately corrected. The other two transfers were accompanied by written instructions from DF to his financial advisor. There was evidence that DF carefully recorded the loans he made to family members, and his financial records did not record the transfers as loans. DF deposited his Canada Savings Bonds into a joint investment account with a right of survivorship, naming the parties as joint tenants. According to his financial advisor, he was looking for a way to avoid probate costs. The bank placed the following stamp on the back of the bonds: “For deposit only to the account of the registered holder. CIBC WOOD GUNDY SECURITIES INC.”. The plaintiff brought an action to set aside the money transfers and the bequest. The action was dismissed. The plaintiff appealed.
Held, the appeal should be dismissed.
The trial judge did not err in finding that DF had the capacity to make the gifts and the bequest and that the defendant did not exert undue influence on him. He was entitled to find that there was sufficient corroborating evidence to rebut the presumption of resulting trust. He did not err in finding that the testamentary gift did not adeem when DF deposited the Canada Savings Bonds into a joint account. The bonds did not become negotiable instruments when they were deposited as they were not endorsed by DF. The teller’s stamps were not restrictive endorsements that had the effect of making the proceeds of the bonds payable to CIBC, rather than DF.
C. The Law Pertaining to Gifts
[25] A valid inter vivos gift is one that is intended to take effect during the lifetime of the donor. It consists of a voluntary transfer of property to another with the full intention that the property will not be returned. To establish a gift, one must show intention to donate, sufficient delivery of the gift and acceptance of the gift: McNamee v. McNamee (2011), 106 O.R. (3d) 401, [2011] O.J. No. 3396, 2011 ONCA 533, at para. 24.
(1) Presumption of resulting trust
[26] Equity presumes bargains, not gifts. Thus, when a parent gratuitously transfers property to an adult child, the law presumes that the child holds the property on a resulting trust for the parent: Pecore v. Pecore, [2007] 1 S.C.R. 795, [2007] S.C.J. No. 17, 2007 SCC 17, at para. 36. The onus shifts to the adult child to rebut the presumption by proving the contrary intent on a balance of probabilities: Sawdon Estate v. Watch Tower Bible and Tract Society of Canada (2014), 119 O.R. (3d) 81, [2014] O.J. No. 573, 2014 ONCA 101, at paras. 56-57; Mroz (Litigation guardian of) v. Mroz (2015), 125 O.R. (3d) 105, [2015] O.J. No. 1284, 2015 ONCA 171, at para. 72. The trial judge must begin her inquiry with the presumption and then weigh all the evidence in an attempt to determine the parent’s actual intent at the time of the transfer: Pecore, at para. 44; Sawdon, at para. 57; Mroz, at para. 72.
[27] The evidence necessary to rebut the presumption depends on the facts of the case: Pecore, at para. 55. Evidence of the parent’s post-transfer conduct is admissible, so long as it is relevant to the parent’s intention at the time of the transfer: Pecore, at para. 59.
(2) Presumption of undue influence
[28] Where the potential for domination inheres in the relationship between the transferor and transferee, the presumption of undue influence applies: Goodman Estate v. Geffen, [1991] 2 S.C.R. 353, [1991] S.C.J. No. 53, at p. 378 S.C.R. The transferee must establish on a balance of probabilities that the gift was the result of the transferor’s “full, free and informed thought”: Goodman Estate, at p. 379 S.C.R. Evidence that the transferor received qualified, independent advice can be used to rebut the presumption: Goodman Estate, at p. 379 S.C.R. However, this is not to say that evidence of independent advice is required in every case: Laird v. Mulholland, [1998] O.J. No. 855, 21 E.T.R. (2d) 204 (Gen. Div.), at paras. 36-37; Bank of Montreal v. Duguid (2000), 47 O.R. (3d) 737, [2000] O.J. No. 1356 (C.A.), at paras. 26-27, leave to appeal to S.C.C. allowed [2000] S.C.C.A. No. 298, appeal discontinued August 2, 2001.
(3) Corroborative evidence
[29] The common law requires corroborating evidence to rebut the presumptions. The corroborating evidence can be direct or circumstantial, and it can consist of a single piece or evidence or several pieces considered cumulatively: Burns Estate v. Mellon (2000), 48 O.R. (3d) 641, [2000] O.J. No. 2130 (C.A.), at para. 29.
[30] In addition, where the donor is deceased, the Evidence Act, R.S.O. 1990, c. E.23 requires corroborative evidence. Section 13 provides:
In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
*source: Ontario Reports
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