Court File and Parties

COURT FILE NO.: CV-21-1712-0000 DATE: 2023-08-15

SUPERIOR COURT OF JUSTICE – ONTARIO 491 Steeles Avenue East, Milton ON L9T 1Y7

RE: Bruce Ward Rae, Applicant -and- Patricia Frances Rae, Respondent

BEFORE: C. Chang J.

COUNSEL: J. Marler and S. Smith, for the Applicant M. Lahn, for the Respondent

HEARD: August 8, 2023 (in-person)

ENDORSEMENT

[1] The applicant brings this application for directions respecting the testamentary estate of Mary Frances Rae (“Mary”). Pursuant to the consent order of Mills J. dated July 27, 2022, the parties attended before me for a hearing to determine whether beneficial ownership of the property municipally known as 293 Savoy Court in Oakville (the “Subject Property”) passed to the respondent by right of survivorship or results back to Mary’s estate. As set out in the said order of Mills J., the determination of that issue will summarily dispose of this application.

[2] The applicant argues that ownership results back to Mary’s estate by way of a resulting trust in favour of Mary. The respondent argues that ownership of the Subject Property passed to her on Mary’s death by right of survivorship.

FACTS

[3] The facts relevant to this application are, for the most part, undisputed.

[4] The undisputed facts can be summarized as follows:

a. Mary was born on March 27, 1928, passed away on February 28, 2021 and is survived by three children: Kyle Russel Rae; Bruce Ward Rae (the applicant); and Patricia Frances Rae (the respondent);

b. Mary’s husband, Robert Russel Rae, predeceased her on June 30, 1995;

c. Mary and her husband jointly purchased the Subject Property in 1958 and title was transferred into Mary’s name alone on December 12, 1977;

d. Mary’s three children grew up together at the Subject Property, Kyle Russel Rae moved out in 1972, the applicant moved out in 1983 and the respondent moved out briefly for schooling and work, but moved back in 1989;

e. Mary transferred title to the Subject Property into her own and the respondent’s names, as joint tenants, on October 13, 2004 for $1.00 (the “2004 Transfer”);

f. Mary’s last will is dated May 17, 2016 (the “2016 Will”), was prepared by Michael C. Vokes, names the applicant and the respondent as executors, sets out specific bequests to the respondent and names the applicant and respondent as equal beneficiaries of the residue of Mary’s estate;

g. Mary’s previous will is dated July 14, 2011 (the “2011 Will”), was also prepared by Mr. Vokes, names the applicant and respondent as executors, sets out specific bequests to the respondent, including the Subject Property, and to two of Mary’s grandchildren and names the applicant and respondent as equal beneficiaries of the residue of Mary’s estate;

h. before 2011, Paul Davidson was Mary’s lawyer, as well as the “family’s lawyer”, and, among other things, prepared her wills and dealt with her real estate, including the 2004 Transfer;

i. Mr. Davidson passed away in 2012, following which Mr. Vokes purchased his legal practice;

j. no one has been able to locate Mr. Davidson’s file for Mary, including respecting Mary’s previous will(s) and the 2004 Transfer;

k. when Mary met with Mr. Vokes to review and execute the 2016 Will, she commented that it did not contain the specific bequest of the Subject Property to the respondent, he reminded her of the 2004 Transfer and she proceeded to execute the will;

l. the applicant admits that Mary “clearly wanted to gift the [Subject Property] to [the respondent] in 2011 and 2016”; and

m. the respondent sold the Subject Property on April 28, 2022 and, pursuant to the consent order of Mills J. dated July 27, 2022, the transaction closed on August 31, 2022, certain specific distributions were paid and the balance of approximately $1,000,000.00 is being held in trust by the Law Office of William Kerr subject to further court order.

[5] In addition to their own affidavits, the parties also filed:

a. an affidavit from Marijke Ooosterhoff, Mary’s close friend and long-time neighbour;

b. the transcript and exhibits from the examination of Mr. Vokes pursuant to rule 39.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, who was Mary’s lawyer from 2011; and

c. an affidavit from Kyle Russel Rae, in which he states, among other things, that he does not “feel qualified to comment on whether or not the [Subject Property] forms part of [Mary’s] estate”.

ISSUE

[6] Although framed differently in their respective factums, the parties agreed during oral argument that the sole issue to be decided is whether there is sufficient evidence to rebut the presumption of resulting trust respecting the 2004 Transfer.

ANALYSIS

Parties’ Positions

[7] The applicant submits that the 2004 Transfer was a gratuitous transfer between a parent and a capable adult child and is therefore subject to a resulting trust in favour of Mary and, consequently, her estate. He argues that there is no evidence to rebut the presumption of resulting trust, as Mary could have made the 2004 Transfer for reasons other than a gift to the respondent, including to avoid probate fees or as part of a “care and management” arrangement for the Subject Property. Therefore, submits the applicant, the net proceeds of sale from the Subject Property should revert to Mary’s estate, where he would be entitled to half of them.

[8] The respondent submits that Mary’s clear intention in making the 2004 Transfer was to ensure that the respondent received the Subject Property upon Mary’s passing. This intention, submits the respondent, is evinced by the transfer document itself, as well as Mrs. Oosterhoff’s and Mr. Vokes’s evidence. She argues that there is sufficient evidence to rebut the presumption of resulting trust and that she took full ownership by right of survivorship on Mary’s passing.

Law

[9] It is well settled law that, where there is a gratuitous transfer of property between a parent and an independent adult child, there is a rebuttable presumption that the child holds the property on resulting trust for the parent (see: Pecore v. Pecore, 2007 SCC 17, at paras. 27-36). That presumption is rebuttable by the adult child with evidence of the parent’s contrary intention on a balance of probabilities (see: Pecore, at para. 43). The evidence must be clear, convincing and cogent that: 1) the parent intended to gift the property to the child; 2) the child accepted the gift; and 3) the transaction was completed by a sufficient act of delivery or transfer of the property (see: Falsetto v. Falsetto, 2023 ONCA 469, at para. 27). Evidence of the quality of the relationship between the transferor and the transferee can be considered in determining whether the presumption has been rebutted (see: Pecore, at para. 37).

[10] Although the general rule is that the proffered evidence “ought to be contemporaneous, or nearly so”, evidence of intention arising after the transfer that is relevant to the parent’s intention at the time of transfer may also be considered (see: Kent v Kent, 2020 ONCA 390, at para. 36). The court should assess that evidence for reliability and weight and guard against evidence that is self-serving or tends to reflect a change of intention (see: Kent, at para. 36).

[11] The court is to begin with the presumption of resulting trust and then weigh all of the evidence in order to ascertain the transferor’s actual intention; the presumption only being determinative “where there is insufficient evidence to rebut it on a balance of probabilities” (see: Pecore, at para. 44). Only if the trial judge is unable to reach a conclusion about the transferor's actual intention at the time of the transfer, will the presumption be applied to tip the scales in favour of the transferor or his estate (see: Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 3d ed. (Markham, ON: LexisNexis Canada, 2009) at page 159, § 4.60).

Decision

[12] I find that the respondent has rebutted the presumption of resulting trust respecting the 2004 Transfer. There is clear, convincing and cogent evidence that Mary intended to gift the Subject Property to the respondent, the respondent accepted that gift and the transaction was completed by way of the 2004 Transfer.

Evidence of Mary’s Intention in Making the 2004 Transfer

[13] I do not accept the applicant’s argument that the complete absence of Mr. Davidson’s file means that there is no evidence of Mary’s intention in making the 2004 Transfer. While it is unfortunate that Mr. Davidson’s file could not be located, in my view, there is sufficient evidence that Mary’s intention in making that transfer was to gift a joint interest in the Subject Property to the respondent so that she would solely own it upon Mary’s passing.

[14] I accept the respondent’s affidavit evidence that sets out the background circumstances leading up to the 2004 Transfer, the context in which that transfer was made and relevant events since. It is clear, convincing and cogent respecting Mary’s intention in making the 2004 Transfer, is neither controverted nor contradicted (including by the applicant’s or Kyle Russel Rae’s evidence) and the applicant did not challenge it by cross-examination.

[15] More than that, the respondent’s evidence is corroborated by the 2004 Transfer document itself, as well as evidence from Mary’s longtime close friend and neighbour, Mrs. Oosterhoff, and from Mary’s lawyer, Mr. Vokes.

[16] The transfer document discloses that the applicable consideration for the respondent’s joint interest was $1.00 and explained that nominal consideration as, “other: Transfer from mother to mother and daughter as joint tenants”. The respondent’s evidence is that she was present when Mary instructed Mr. Davidson to prepare and effect the 2004 Transfer. This is contemporaneous evidence of Mary’s intention.

[17] Mrs. Oosterhoff’s and Mr. Vokes’s evidence, although not necessarily contemporaneous (being from after the 2004 Transfer), confirms Mary’s stated intention in effecting that transfer as the means to ensure that the respondent became the sole owner of the Subject Property when Mary died.

[18] Mrs. Oosterhoff’s evidence, which I accept, is that Mary discussed on numerous occasions her and the respondent’s joint ownership of the Subject Property, the reasons for it and the fact that she and the respondent were sharing the Subject Property’s expenses accordingly.

[19] Mr. Vokes’s evidence, which I also accept, is that, in the preparation of two of her wills, Mary unequivocally stated that her intention in giving joint ownership of the Subject Property to the respondent was so that she became the sole owner of it when Mary died. Consistent with that stated intention, the 2016 Will omitted any specific bequest of the Subject Property or any reference to it, as, upon Mary’s death, full ownership of it would be the respondent’s through her right of survivorship. Mr. Vokes’s evidence is also that the respondent forewent career pursuits to live at the Subject Property and care for both her mother and father until they each passed away.

Applicant’s Arguments Respecting That Evidence

[20] I do not accept the applicant’s argument that Mary’s intention in making the 2004 Transfer could have been to avoid probate taxes or as part of a “care and management” arrangement for the Subject Property. As the applicant admits, there is no evidence of any kind to support that argument; therefore, this argument is based on nothing more than conjecture and supposition.

[21] I also do not accept the applicant’s arguments respecting the reliability or weight of any of the respondent’s, Mrs. Oosterhoff’s or Mr. Vokes’s evidence. There are no reasonable bases on which to ground this argument. As outlined above, nothing in the evidence contradicts any of their evidence and neither the respondent nor Mrs. Oosterhoff was cross-examined.

[22] Contrary to the applicant’s argument, Mrs. Oosterhoff’s evidence is neither equivocal nor opinion. Her evidence is clear and speaks to what she observed and heard from Mary – her close friend and long-time neighbour – respecting her intentions about the respondent’s ownership of the Subject Property. It is notable that the applicant did not cross-examine Mrs. Oosterhoff on her affidavit in order to address any alleged equivocation in or other issues with her evidence.

[23] Contrary to the applicant’s argument, Mr. Vokes’s evidence is also not opinion. His evidence speaks to what he observed and heard from Mary – his client – respecting her intentions about the respondent’s ownership of the Subject Property and his testimonial evidence is corroborated by the contemporaneous notes he made of his meetings with her. Also contrary to the applicant’s argument, Mr. Vokes’s evidence is not limited to what Mary told him about her applicable intentions in 2011 or 2016, but also evinces what she told him about her intention respecting the 2004 Transfer, which intention did not change. Therefore, although not necessarily contemporaneous with the 2004 Transfer, Mr. Vokes’s evidence is that Mary told him in 2011 and 2016 about what her intentions were in making the 2004 Transfer.

[24] I have no concerns with reliability of the respondent’s, Mrs. Oosterhoff’s or Mr. Vokes’s evidence and see no issues with its credibility. The respondent’s and Mrs. Oosterhoff’s evidence is uncontroverted, uncontradicted and unchallenged. Neither Mrs. Oosterhoff nor Mr. Vokes has a “horse in the race”, so their evidence is, in no way, self-serving and I have no other reason to doubt the truthfulness of it. I also have no concerns that the evidence, in any way, reflects a change in Mary’s intention respecting the 2004 Transfer. In fact, in my view, the evidence shows a clear continuity of expressed donative intention which starts with the 2004 Transfer document itself and continues, at least, to Mary’s May 17, 2016 meeting with Mr. Vokes from which intention Mary did not, at any time, resile.

[25] I do not accept the applicant’s argument that it is improbable and incredible that Mary had forgotten about the 2004 Transfer when she met with Mr. Vokes on May 17, 2016. Mary was eighty-eight years of age when she had that meeting, had gone through at least two different wills to that point and was in the process of executing at least her third. In addition, Mr. Vokes’s uncontroverted evidence is that he reminded Mary of the 2004 Transfer and, in accordance with his advice, she agreed to proceed with the 2016 Will without bequeathing the Subject Property; already having transferred joint ownership of it to the respondent in 2004.

[26] As outlined above, the applicant has adduced no evidence to contradict any of the respondent’s, Mrs. Oosterhoff’s or Mr. Vokes’s evidence or that could reasonably speak to Mary’s intention in making the 2004 Transfer. What evidence he has adduced contains little – if anything – more than inadmissible opinion and legal arguments/conclusions. Again, the applicant’s arguments are based only on conjecture and supposition.

Summary

[27] As outlined above, I am satisfied on the evidence of Mary’s continuity of expressed donative intention that she, by the 2004 Transfer, intended to gift joint ownership of the Subject Property to the respondent so that she became the sole owner on Mary’s passing. The respondent has rebutted the presumption of resulting trust and full beneficial ownership of the Subject Property passed to the respondent on Mary’s death.

COSTS

[28] Pursuant to the July 27, 2022 consent order of Mills J., the successful party on this application is to have his/her costs in the amount of $7,500.00 + H.S.T., which comes to the all-inclusive amount of $8,475.00.

[29] As the successful party, the respondent is entitled to those costs.

DISPOSITION

[30] I therefore make the following orders:

a. Mary’s interest in the Subject Property passed to the respondent by right of survivorship on Mary’s February 28, 2021 date of death and the respondent is therefore solely entitled to the balance of the net proceeds of sale currently held in trust by the Law Office of William Kerr;

b. the Law Office of William Kerr shall forthwith release to the respondent the balance of the net sale proceeds from the Subject Property [^1]; and

c. the applicant shall pay to the respondent her costs of this application, which are fixed in the all-inclusive amount of $8,475.00 and payable within 30 days of the date of this endorsement.

C. Chang J.

Date: August 15, 2023

[^1]: For reason(s) known only to them, neither counsel was able to provide me with the exact amount of the net sale proceeds, which exact amount I suspect Mr. Kerr will require be specified in the order directing his office to release the subject funds. Counsel are to ensure that the draft judgment submitted for issuance correctly contains that exact amount.