The BC Court of Appeal decision in Winstanley v. Winstanley, 2017 BCCA 265, was released July 17, 2017. In finding the trial judge had failed to properly apply the presumption of resulting trust, the Court of Appeal affirmed the elements required to rebut the presumption of a resulting trust and the correct methodology for its application.
The appellant (Andrew) and his brother (Carl) were in dispute over the division of the estate of their mother (Jessie).
Andrew was the sole residual beneficiary of Jessie’s estate. Jessie’s home and bank account were held in joint tenancy with Carl, meaning both of those assets passed to him upon her death. Jessie’s Will included an acknowledgement that she held assets jointly with Carl and those would not form part of her estate. This ownership structure was not challenged by Andrew.
The crux of the matter was that Carl had transferred large sums of Jessie’s money into the joint bank account right before she died – money that Andrew claimed belonged to him as the residual beneficiary of Jessie’s estate. The trial judge dismissed the majority of Andrew’s claims on the basis that the joint account was a truly legal and beneficial joint account.
On appeal, Andrew argued, among other things, that the trial judge failed to properly apply the presumption of resulting trust to the transfers in dispute.
Madam Justice Garson for the Court of Appeal agreed with Andrew, who was represented by our firm, and “[m]ost reluctantly” ordered a new trial (para. 65).
The Court affirmed the established law as concerns the rebuttable presumptions of advancement and resulting trust and provided:
 The effect of the majority’s decision in Pecore is that an adult child — whether independent or dependent — who receives a gratuitous transfer from a parent is now presumed to hold the transferred property on resulting trust for the parent, whereas formerly the parent was presumed to have advanced the property to the child as a gift.
Although evidence regarding an adult child’s dependence on the deceased transferor parent may help to rebut the presumption of a resulting trust, the onus remains on the dependent child to make those arguments (paras. 33, 39).
The Court held that the trial judge failed to make an express finding that Carl had rebutted the presumption of resulting trust and erred in his analytical approach (see paras. 37-40).
The Court held that the transfers should have been considered independently to determine whether Carl had rebutted the presumption of resulting trust for each one. If he was unable to prove that his mother authorized him to deposit the funds into the joint account and transfer funds out of the joint account into his personal account, the funds would be impressed with a resulting trust and rightly belong to Andrew (paras. 41-43).
In sum, where the presumption of a resulting trust arises, the onus rests on the surviving joint account holder to prove that the deceased intended to make the gift at the time of the transfer. Otherwise, the asset will be treated as part of the deceased’s estate to be distributed accordingly. When arguments are raised to rebut this presumption, careful and precise analysis of the individual circumstances and the deceased’s intentions will be required.
To learn more about these issues, contact one of the lawyers in our Wills, Estates + Trusts Practice Group.