Mother Gives Property To Only 3 of 8 Children - Presumption of Advancement and Resulting Trust Discussed

Hegel Estate v. Logan, 2014 BCSC 1026

The defendants, the children of the deceased, brought an application to dismiss their brother’s claim against their mother’s estate by summary trial.  Their brother, the Plaintiff, felt that a transfer of property by their mother to only 3 of her 8 children was not fair, in the circumstances.  The Plaintiff was one of the children that did not benefit from the property transfer.  The Plaintiff sought to show that the transfer was a result of either undue influence or a forged signature on the transfer document.  The Plaintiff further argued that the Defendants failed to rebut the presumption of a resulting trust. 

The Plaintiff is one of eight children of the deceased Mrs. Hegel.  The property in question is one in which Mrs. Hegel decided to transfer to herself and three of her eight children (the defendants).  Mrs. Hegel had only included three of her children as the other five were successful, not in financial need, and the three would benefit from the property to a greater extent. 

The Plaintiff argued that the transfer was due to undue influence as he felt that his mother would never transfer the property to only three of the children when 5 would not benefit.  He felt that such a transfer would not have been made and therefore something suspicious must have occurred. 

HELD:  Application allowed

The matter was appropriate for summary trial.  The Plaintiff was unable to provide any evidence to support his suspicions of undue influence and the forged signature.  In providing the judgment, J. Weatherill discussed the presumption of advancement and rebutting the presumption of resulting trust

As to the presumption of advancement, Weatherill reiterated that the presumption only applies from a parent to a minor child or children.  As none of the children were minors nor dependents, the presumption did not apply. 

As to the presumption of resulting trust:

[43]        The plaintiff claims that the defendants hold the Chase Property in trust for the estate arguing that the gratuitous transfer of the property was to avoid property taxes, and on this basis the property is a resulting trust. Indeed, according to the leading text book, Waters’ Law of Trust in Canada, 3rd Edition, 2005, at p. 362:

A resulting trust arises whenever legal or equitable title to property is in one party’s name, but that party, because he is a fiduciary or gave no value for the property is under an obligation to return it to the original title owner, or to the person who did give value for it.

[44]        But as mentioned, the resulting trust proposition is a rebuttable presumption that can be rebutted on the balance of probabilities. Evidence introduced to support or rebut a resulting trust may only concern the intention of the parties at the date of the transfer (Waters at p. 211). The parties’ intention at a later date is not relevant: Ng v. Ng, 2008 BCSC 172 (CanLII) at para. 36.

[45]        So even if Mrs. Hegel transferred the property to herself and three of her eight children to avoid probate taxes, the transfer does not vitiate the gift to the defendants if she intended to leave it to them anyway.

The court also found that Ronald, the Plaintiff, had been assisted by his parents far more than his siblings.  He had been advanced loans and received much financial support over the years.  The court found that this assistance resulted in disparity and unhappiness leading the judge to unveil the Plaintiff’s litigation as one motivated by financial gain and even jealousy toward his siblings. 

The court found that the deceased was of sound mind and under no undue influence.  The court preferred the evidence provided by the defendants, other siblings, and the lawyer who oversaw the transfer to that of the Plaintiff.  It was concluded that the defendants had rebutted the presumption of resulting trust.  The transfer of the property was valid and that giving the property to members of the family who would benefit more, assisting a subset of the family, in the courts words, “makes perfect sense”. 

The court even commented on the new WESA and how it may have applied had Mrs. Hegel died after it came into force:

[111]     I am mindful of the new Wills, Estates and Succession Act, S.B.C. 2009, c. 13 specifically s. 52. However, Mrs. Hegel died before it came into force, so per. 186(1) it is not applicable to this case. But even if it were, on the facts, the defendants have discharged their common law onus of proving they did not exercise undue influence over their mother with respect to the will or in any other matter. In fact, the evidence discloses that none of the defendants or children exerted undue influence on their mother. So Ronald could not discharge the onus that the Wills, Estates and Succession Act, s. 52 now places on those alleging undue influence.

The full Discussion is found below:

Discussion

[102]     Before turning to my analysis and findings, I will take a moment to note a key fact: over the years, Mr. and Mrs. Hegel assisted Ronald much more than their other children, including financial assistance by way of loans that the evidence deposes resulted in disparity and unhappiness. Consequently, I find that his litigation was motivated by his desire to secure more financial assets for himself and perhaps his jealousy that other children were receiving assets that he thought were his. This very evident desire seriously compromises his credibility and reliability.

[103]     Where his evidence conflicts with others, I disregard it completely.

[104]     This summary trial rests on two key findings: whether undue influence arose and whether the presumption of resulting trust is rebutted.

[105]     First, regarding undue influence, I find the evidence discloses no undue influence on the part of any of the defendants or indeed on any part of the children. To the contrary, the evidence demonstrates that Mrs. Hegel determined she wanted to gift the Chase property to three of her eight children to benefit them financially. And on the eve of her colon cancer surgery, she chose to do so.

[106]     The essence of the plaintiff’s argument is that he does not believe his mother would have transferred the Chase property unless she was under some pressure or was otherwise unduly influenced. But his case is based on suspicions and accusations without evidentiary foundation.

[107]     As the evidence demonstrates, Mr. Faulkner obtained instructions from Mrs. Hegel, prepared and witnessed her executing the transfer after satisfying himself that she was of the correct state of mind and was not subjected to any outside pressures. On this subject, I fully accept his evidence and that of Renate and Margarete.

[108]     Mrs. Hegel was lucid and mentally aware when she made this transfer. She was clearly capable of making business decisions on her own. She was neither in any weakened emotional state nor were any of her children controlling or influencing her in an undue manner.

[109]     Curiously, Ronald thinks his mother was lucid and not under duress when she transferred the 449970 BC Ltd. interest to him. But on matters where he does not benefit financially - i.e., the Chase Property transfer - his mother must certainly not be lucid and under duress. That argument has no logic, and it demonstrates the fundamental flaw with Ronald’s theory of this case.

[110]     I find that when Margarete gave Mrs. Hegel advice - i.e. that neither Renate, Laura or Margarete’s families needed the Chase Property - she was merely informing her mother of the factual reality and advising her that her other siblings would benefit more from the property’s use and value. Her actions were rooted in the best of intentions.

[111]     I am mindful of the new Wills, Estates and Succession Act, S.B.C. 2009, c. 13 specifically s. 52. However, Mrs. Hegel died before it came into force, so per. 186(1) it is not applicable to this case. But even if it were, on the facts, the defendants have discharged their common law onus of proving they did not exercise undue influence over their mother with respect to the will or in any other matter. In fact, the evidence discloses that none of the defendants or children exerted undue influence on their mother. So Ronald could not discharge the onus that the Wills, Estates and Succession Acts. 52 now places on those alleging undue influence.

[112]     Second, considering all the evidence before me, I find that the defendants have, on a balance of probabilities, rebutted the presumption that they hold the Chase property in a resulting trust for the estate.

[113]     I am mindful of the plaintiff’s argument and concern that he believes that his mother would never have considered gifting her interest in the Chase Property to three of her eight children. I am also mindful of the plaintiff’s argument that he believes his mother would have wanted to transfer the property to six of the eight children, as opposed to all eight of them, despite what occurred.

[114]     In the circumstances of a family of eight adult children, some of whom the evidence discloses are better off financially than others and some of whom have benefitted from the Hegel parents more than others, that a mother would consider assisting a subset of the family who she thought were in need makes perfect sense.

[115]     As the British Columbia Court of Appeal reiterated in Wu, intention in resulting trust/gratuitous transfer cases is largely a question of fact.

[116]     On the facts necessary to rebut the presumption of a resulting trust, I also accept Mr. Faulkner, Renate and Margarete’s evidence in full. Mr. Faulkner, Renate and Margarete had nothing to gain from this transfer. The defendants have discharged their onus of demonstrating their mother’s intention. So I see no reason to disturb that intention.

[117]     I am also mindful of the object of the rules: securing the just, speedy and inexpensive determination of every proceeding on its merits and that so far as practicable conducting the proceeding in manner that is proportionate to the amount involved in the proceeding.

[118]     Accordingly, I order that the action is summarily dismissed.

[119]     I further order that the certificate of pending litigation the plaintiff filed against the Chase property, located at 1211 Okanagan Avenue, Chase, B.C., legally described as Lot 6, DL 517 KDYD Plan 29320 be cancelled and discharged.

[120]     I also order that the requirement that the plaintiff sign the Order that will result from this judgment be dispensed with.