



COURT OF APPEAL FOR ONTARIO

CITATION: Kent v. Kent, 2020 ONCA 390

DATE: 20200617

DOCKET: C67851

Gillese, Brown and Jamal JJ.A.

BETWEEN

Ronald Gordon Kent

Applicant

(Appellant)

and

Elissa Laurel Kent, Graham William Blakely Kent

and The Estate
    of Marian Laurel Graham

Respondents

(Respondents)

Ronald Kent, acting in person

Aleksandr G. Bolotenko, Phillipa C.
    Goddard and Miriam Vale Peters, for the respondents

Heard: In Writing

On appeal from the order of Justice Stephen
    T. Bale of the Superior Court of Justice, dated November 27, 2019.

Gillese J.A.:

[1]

Pecore v. Pecore
, 2007 SCC 17, [2007] 1 S.C.R. 795, provided welcome guidance on how
    to approach a gratuitous transfer of property from a parent into joint names
    with a capacitated adult child. It held that, in such circumstances, a
    rebuttable presumption arises that the child holds the property on resulting
    trust for the parent (para. 36). However, when the transfer is of real property
    and, following the transfer, the child and her husband occupy the property for
    a lengthy period, family law considerations enter the equation. How are the two
    sets of legal considerations to be reconciled? This appeal depends on the
    answer to that question.

[2]

The family law provisions engaged on this appeal
    are ss. 18(1) and 26(1) of the
Family Law Act
, R.S.O. 1990, c. F.3
    (the FLA). For ease of reference, I set them out now.

Matrimonial Home

18 (1) Every property in which a
    person has an interest and that is  ordinarily occupied by the person and his
    or her spouse as their family residence is their matrimonial home.

Joint tenancy in matrimonial
    home

26 (1) If a spouse dies owning an
    interest in a matrimonial home as a joint tenant with a third person and not
    with the other spouse, the joint tenancy shall be deemed to have been severed
    immediately before the time of death.

BACKGROUND

[3]

Marian Laurel Graham (Marian) had only one
    child, a daughter named Janice. Janice married Ronald Gordon Kent (Gordon) and
    they had two children: Elissa Laurel Kent (Elissa) and Graham William Blakely
    Kent (Graham).

[4]

Gordon is the appellant in this proceeding; the
    two children and Marians estate are the respondents (together, the Respondents).

[5]

In 1983, Marian bought a property in Fenelon
    Falls, Ontario (the Property) and began living on it.

[6]

In September 1996, Marian was the sole owner of the
    Property. She transferred title to herself and Janice as joint tenants (the
    1996 Transfer), for nominal consideration. Janice was an adult at that time.

[7]

At the time of the 1996 Transfer, Marian had a
    will dated July 24, 1978 (the 1978 Will). Under the terms of the 1978 Will:
    Janice was the beneficiary; if Janice predeceased Marian, Janices issue alive
    at Marians death were the beneficiaries; and, if Janice predeceased Marian and
    had no issue alive at the time of Marians death, Gordon was the beneficiary.

[8]

After the 1996 Transfer, Marian continued to
    live alone on the Property.

[9]

In 2008, Janice, Gordon and their two children
    moved in with Marian. For the purpose of this appeal, I will assume that Janice
    and Gordon lived with Marian, on the Property, until Janices death on July 22,
    2014.
[1]
Pursuant to Janices will, Gordon was the beneficiary of her estate.
[2]

[10]

After Janice died, Gordon continued to reside
    with Marian on the Property.

[11]

Marian moved to a long-term care home in July or
    August 2015. Gordon continued to reside on the Property.

[12]

Marian paid all of the costs and expenses of the
    Property until she died in 2016, including after she moved into long-term care.
    At no time did Janice or Gordon pay rent while living on the Property.

[13]

On July 14, 2015, Marian made a new will (the
    2015 Will). The 2015 Will named Elissa and Graham as the executors and
    trustees. Clause 4(b) of the 2015 Will is the provision most relevant to this
    appeal. It reads as follows:

4.
I GIVE, DEVISE AND BEQUEATH

all my property of every nature and kind and wheresoever situate,  to my
    said Trustee[s] upon the following trusts, namely:

(b) To transfer any home or condominium I
    may die possessed of to my son-in-law
Ronald Gordon Kent
, and
    my grandchildren,
Graham William Blakely Kent

and
Elissa
    Laurel Kent
. [Emphasis in the original.]

[14]

On July 30, 2015, Marian registered a
    survivorship application on title to the Property in her name alone. She then
    registered a transfer deed to the Property in which she conveyed the Property
    to herself, Elissa, Graham, and Gordon as joint tenants (the 2015 Transfer).

[15]

After Marians death, questions arose as to the
    ownership of the Property. In March 2018, Gordon brought an application for a
    declaration that he owned a two-thirds share of the Property (the
    Application).

[16]

The Respondents opposed the Application. They
    claimed that Gordon, Elissa and Graham were each entitled to a one-third share of
    the Property.

THE APPLICATION

The Parties Positions on the Application

[17]

Gordon claimed a two-thirds entitlement to the
    Property. He maintained that when he and Janice moved in with Marian, the Property
    became their matrimonial home and it was their matrimonial home at the time of
    Janices death. Based on s. 26(1) of the FLA, he contended that the joint
    tenancy in the Property was deemed to have been severed immediately before
    Janices death with the result that, as the beneficiary under Janices will, he
    became a one-half owner of the Property with Marian as tenants-in-common.  After
    Marians death, based on her 2015 Will, Gordon said that he became entitled to
    an additional one-third share of Marians one-half interest in the Property.
    Hence, he claimed to be entitled to a two-thirds interest in the Property and
    that Elissa and Graham were each entitled to a one-sixth interest in it.

[18]

The Respondents contended that each of Gordon,
    Elissa and Graham were entitled to a one-third interest in the Property. They maintained
    that Marian transferred title to the Property to herself and Janice as joint
    tenants in 1996 for estate planning purposes. Thus, they argued, the 1996 Transfer
    raised the presumption of a resulting trust, Janice did not have a beneficial
    interest in the Property, s. 26(1) of the FLA did not apply, and Marians 2015
    Will operated to give each of Gordon, Elissa, and Graham a one-third interest
    in the Property.

[19]

In reply, Gordon argued that he had rebutted the
    presumption of resulting trust and that the 1996 Transfer was a gift to Janice
    of a beneficial interest in the Property.

The Decision Below

[20]

The application judge began his analysis by agreeing
    with the Respondents that if there was a resulting trust, s. 26(1) of the FLA
    did not apply. He then relied on
Pecore

to conclude that the
    1996 Transfer from Marian to Marian and Janice, as joint tenants, raised the presumption
    of resulting trust.

[21]

Thus, the application judge saw the primary
    issue on the Application to be whether, on the whole of the evidence, Gordon
    had rebutted that presumption. The application judge noted that the evidence
    required to rebut the presumption is evidence of the transferors contrary
    intention, at the time of the transfer, on a balance of probabilities:
Pecore
,
    at para. 43. However, he also noted that evidence of events subsequent to the
    transfer could be admitted, provided it was relevant to the testators
    intention at the time of the transfer:
Pecore
, at para. 59.

[22]

The application judge observed that both the
    transferor (Marian) and the transferee (Janice) were deceased and there was no
    contemporaneous evidence of Marians intention in making the 1996 Transfer. He also
    noted that Gordon admitted he had nothing to do with the 1996 Transfer and
    only learned about it afterward.

[23]

The application judge found no evidence capable
    of rebutting the presumption of resulting trust. He described Gordons written
    summary of the evidence on which he relied to rebut the presumption as evidence
    that was either equally consistent with the existence of a resulting trust, or
    begs the question. He also observed that after Janices death, Gordon did not
    register an interest in the Property pursuant to her will nor had he produced
    any documents relating to the administration of her estate. The application
    judge added that because Gordon did not assert an interest in the Property
    until after Marians death, Marians evidence as to intention was unavailable.

[24]

The application judge found that the provisions
    in Marians 2015 Will and the 2015 Transfer suggested that Marian believed she
    was the sole owner of the Property. Further, he saw no evidence to suggest that
    those actions were self-serving or reflected a change of intention in relation
    to the 1996 Transfer.

[25]

Accordingly, by order dated November 27, 2019,
    the application judge dismissed the Application with costs to the Respondents.

THE ISSUES

[26]

On appeal, Gordon makes three submissions.

[27]

First, he contends that as Janice was Marians
    only child and Marian was a widow, the 1996 Transfer was a completed gift to Janice.
    He says that the application judge erred in failing to so find.

[28]

Second, he argues that if the 1996 Transfer did
    raise the presumption of resulting trust, the 1978 Will in which Marian
    designated Janice as her residuary beneficiary rebuts the presumption.

[29]

Third, he submits that because Marian allowed
    Janice  an owner of the Property by joint tenancy  and her husband to live on
    the Property, beginning in 2008, Marian created a matrimonial home
    circumstance governed by s. 26(1) of the FLA, thereby removing any consideration
    of resulting trust.

ANALYSIS

Was the 1996 Transfer a Gift?

[30]

In submitting that the 1996 Transfer was a gift
    from Marian to Janice, Gordon asks this court to apply the legal principles
    relating to the making of
inter vivos

gifts. This submission
    cannot stand in the face of
Pecore
.
Although
Pecore

concerned the gratuitous transfer of title to a bank account into the joint
    names of the parent and child, it is clear that its dictates are intended to
    encompass the gratuitous transfer of title to other forms of property from
    parent to adult capacitated child. The fact that Janice was Marians only child
    and Marian was a widow does not change the applicability of the legal
    principles in
Pecore
.

[31]

Consequently, the application judge was correct
    when he determined that the legal principles in
Pecore
applied and that
    the presumption of resulting trust arose in respect of the 1996 Transfer. And,
    as I explain below, I see no error in his determination that the presumption
    had not been rebutted. Therefore, the 1996 Transfer was not a gift of an
    interest in the Property to Janice.

Was the Presumption of Resulting Trust
    Rebutted by the 1978 Will?

[32]

On this ground of appeal, Gordon argues that
    Marians 1978 Will naming Janice her trustee and residuary beneficiary was
    evidence that rebutted the presumption of resulting trust. He raised this same
    point on the Application in a document entitled Evidence Points Rebutting any
    Presumption of Resulting Trust (the Document).

[33]

The application judge did not deal specifically with
    Gordons argument that the 1978 Will was evidence capable of rebutting the
    presumption. However, he dealt with the Document as a whole, at para. 15 of his
    reasons, stating that all of the points in it were equally consistent with the
    existence of a resulting trust, or begs the question.

[34]

I see no error on the part of the application
    judge in so finding.

[35]

I would add the following observations, however.

[36]

Paragraphs 55 - 59 of
Pecore
provide
    guidance on what evidence was to be considered in determining Marians
    intention in making the 1996 Transfer. At para. 56, the Supreme Court reiterates
    the traditional rule that evidence adduced to show the transferors intention
    at the time of the transfer ought to be contemporaneous, or nearly so to the
    transaction. In paras. 57-59, the Court explains that evidence of intention
    arising subsequent to the transfer and which is relevant to intention at the
    time of the transfer is also admissible. However, the Court cautions judges to assess
    the reliability of such evidence and to determine what weight it should be given,
    guarding against evidence that is self-serving or that tends to reflect a
    change in intention.

[37]

The 1978 Will was made almost two decades before
    the 1996 Transfer was effected so falls into neither category of evidence: it was
    not contemporaneous or nearly so to the 1996 Transfer nor was it made subsequent
    to the 1996 Transfer. As the 1978 Will was operative at the time Marian made the
    1996 Transfer, its provisions may provide context  but that does not elevate
    it to evidence of Marians intention in making the 1996 Transfer.

[38]

The application judge followed the dictates in
Pecore
in determining whether the presumption of resulting trust had been rebutted. After
    finding no contemporaneous evidence of Marians intention at the time of the
    1996 Transfer, he considered evidence of events subsequent to the Transfer that
    were relevant to her intention at that time. He found that Marians actions in
    2015 indicated that she believed she was the sole owner of the Property. He
    also found that Marians conduct in 2015 was neither self-serving nor
    reflective of a change in intention.

[39]

I see no palpable or overriding error in these
    findings.

[40]

It will be recalled that Janice died in July
    2014 and that Marian took three significant steps in July 2015. First, Marian made
    the 2015 Will, in which she devised any home of which she might be possessed at
    the time of her death to Gordon, Graham and Elissa. Second, Marian registered a
    survivorship application on title to the Property in which she transferred
    title back into her name alone. In the survivorship application, Marian gives
    Janices date of death and states The property was not a matrimonial home
    within the meaning of the Family Law Act of the deceased at the time of death.
    Third, Marian registered the 2015 Transfer on title to the Property. The 2015
    Transfer was from Marian to Elissa, Graham, Gordon, and herself, as joint
    tenants.

[41]

The application judge made no error in concluding
    that the presumption of resulting trust had not been rebutted. On the contrary,
    on the findings of the application judge, that conclusion appears inescapable.

Was the Property a Matrimonial Home?

[42]

I do not accept Gordons submission that in
    allowing him, Janice, and their children to live on the Property together with
    her, beginning in 2008, Marian made the Property their matrimonial home and
    thereby removed any consideration of resulting trust.

[43]

Determining whether the Property was Janice and
    Gordons matrimonial home begins with a consideration of s. 18

(1) of
    the FLA. It will be recalled that s. 18(1) provides that:

Every property in which a person has
    an interest and that is  ordinarily occupied by the person and his or her
    spouse as their family residence is their matrimonial home.

[44]

Although the application judge made no express
    finding on the matter, it appears beyond dispute that Janice and Gordon
    occupied the Property as their family residence, beginning in 2008 when they,
    together with their children, moved onto the Property and began living there
    with Marian. Thus, in determining whether the Property was Janice and Gordons
    matrimonial home, we must decide whether either Janice or Gordon had an
    interest in the Property within the meaning of s. 18(1).

[45]

Did Janice have an interest in the Property
    within the meaning of s. 18(1) of the FLA? In my view, she did not.

[46]

Janice became a joint tenant of the Property
    with Marian as a result of the 1996 Transfer. As I have explained, the 1996 Transfer
    raised the presumption of resulting trust and, on the findings of the
    application judge, the presumption was not rebutted. Thus, the 1996 Transfer
    had the effect of placing Janice on title to the Property in the capacity of a trustee.
    As this court stated at para. 45 of
Spencer v. Riesberry
, 2012 ONCA
    418, it is self-evident that the duties and powers of a trustee are not an
    interest in the property within the meaning of s. 18(1) of the FLA because
    those powers and duties are held not in a personal capacity but in the
    fiduciary role of a trustee. Consequently, the 1996 Transfer did not give
    Janice an interest in the Property within the meaning of s. 18(1).

[47]

Did Gordon have an interest in the Property
    within the meaning of s. 18(1) of the FLA? In my view, he did not. In reaching
    this conclusion, I reject Gordons submission that s. 26(1) of the FLA gave him
    such an interest. Recall that s. 26(1) reads as follows:

If a spouse dies owning an interest
    in a matrimonial home as a joint tenant with a third person and not with the
    other spouse, the joint tenancy shall be deemed to have been severed
    immediately before the time of death.

[48]

It is correct that when Janice died, she appeared
    on title to the Property as a joint tenant with Marian, a third person.
    However, as I have just explained, as Janice was on title to the Property in
    the capacity of a trustee, she did not have an interest in the Property within
    the meaning of s. 18(1) of the FLA. Thus, when Janice died, she did not own an
    interest in a matrimonial home as a joint tenant with Marian, a third person. Consequently,
    s. 26(1) does not apply and Gordon cannot claim an interest in the Property
    pursuant to it.

DISPOSITION

[49]

Accordingly, I would dismiss the appeal with
    costs to the Respondents. If the parties are unable to agree on the quantum of those
    costs, they make written submissions on that matter, to a maximum of three
    pages in length, such submissions to be received by this court no later than
    ten days from the date of release of these reasons.

Released: June 17, 2020 (E.E.G.)

E.E. Gillese J.A.

I agree. David Brown J.A.

I agree. M. Jamal J.A.





[1]
On the Application, the
Respondents disputed Gordons claim
    that the Property was the matrimonial home on factual grounds, as well as legal
    ones. Among other things, they said that Janice did not live full time on the
    Property between the fall of 2012 and October 2014 when she attended school in
    Peterborough and stayed in accommodation there.



[2]

Janices will further provided that if Gordon did not
    survive her or died within 30 days of her death, her estate was to go to her
    children.


