



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Tsai v. Tsai,









2014 BCCA 22




Date: 20140123

Docket:
CA040533

Between:

David Tsai

Appellant

(Plaintiff)

And

Gamaliel Tsai,
also known as John Tsai, Joseph Tsai, and
Christian Tsai by his Litigation Guardian, Marie Rachelle Losier

Respondents

(Defendants)




Before:



The Honourable Madam Justice Saunders

The Honourable Madam Justice Kirkpatrick

The Honourable Mr. Justice Harris




On appeal from:  An
order of the Supreme Court of British Columbia, dated
December 11, 2012 (
Tsai v. Tsai
, 2012 BCSC 1863, Victoria Docket S098072).




Counsel for the Appellant:



R.D. Holmes, Q.C.
J.J. Weisman





Counsel for the Respondent:



G.N. Harney





Place and Date of Hearing:



Vancouver, British
  Columbia

November 18, 2013





Place and Date of Judgment:



Vancouver, British
  Columbia

January 23, 2014









Written Reasons by:





The Honourable Mr. Justice Harris





Concurred in by:





The Honourable Madam Justice Saunders

The Honourable Madam Justice Kirkpatrick








Summary:

Appeal from a decision that
found there was no binding agreement between the appellant and his parents to
transfer a property to him.

HELD: Appeal dismissed. The
appellants arguments on appeal amounted to a significant recasting of the case
from how it was argued at trial. The appellant raised new issues on appeal that
required findings of fact that the trial judge was not asked to make. The trial
judge was entitled to decide the case as it was pleaded and argued before him.

Reasons
for Judgment of the Honourable Mr. Justice Harris:

[1]

This appeal concerns the ownership of a commercial property, referred to
as Newport.  Newport was owned within the Tsai family and at various times registered
ownership was transferred among family members.  At the time of the trial,
title was registered in the names of Joseph Tsai and his son Christian.  The
plaintiff is Josephs brother, David Tsai, who claimed that title to Newport properly
belonged to him.  He had at one time held registered title and alleged that the
transfer of title to Joseph and Christian was improper.  He contended that they
could not rely on registered title as proof of ownership.

[2]

Newport had originally been owned by David and Josephs parents,
Gamaliel and Kwei Tsai.  Registered title was at one time transferred to Joseph
and then back to the parents, before title was registered in Davids name.  Subsequently,
the father, using a power of attorney, transferred registered ownership from
David to Joseph and Christian.

[3]

The trial judge identified the issue before him as whether there was an
agreement between David and his parents that he would receive ownership of
Newport in consideration for agreeing to marry a Chinese wife of his parents
choosing.  David argued Newport was transferred to him because he fulfilled his
side of the bargain.  As the trial judge saw it, the issue was whether David
had proven the agreement and, if so, whether the parents (or father, Gamaliel)
had breached the agreement either because they did not have beneficial
ownership to transfer to David in the first place (having previously
transferred it to Joseph, as Joseph alleged) or because they purported
subsequently to transfer legal and beneficial ownership to Joseph, which they
had no right to convey having already transferred it to David.

[4]

The trial judge dismissed Davids action.  Although he did not accept
that at the time David became registered owner Joseph owned the beneficial
interest in Newport, he rejected Davids case that legal and beneficial
ownership of Newport was transferred to fulfil his parents obligations under
the alleged agreement.  He found that David had not proven the agreement on
which he rested his case.  As a result, he found that David had never owned the
beneficial interest in Newport and that the transfer of the registered interest
in Newport to Joseph and Christian did not violate Davids rights.  In the
result, he held that the current state of registered title reflected legal and
beneficial ownership of Newport.

[5]

David contends that the trial judge made a series of errors.  Before
delving into the substance of this appeal, I pause to say this.  The points
David takes on appeal involve a substantial recasting of the case he advanced
at trial.  He raises issues on appeal that were not argued before the trial
judge.  Central to his argument is the contention that the trial judge erred by
focusing on whether there was a contract to transfer Newport to him.  David now
argues, as but one example, that the trial judge took too restrictive an
approach to the nature of the consideration capable of rebutting the
presumption of resulting trust.  Quite apart from any contract, such
consideration passed, and David took beneficial as well as legal ownership.

[6]

In respect of this and other arguments I would dismiss the appeal.  In
my view, the trial judge was entitled to decide the case as it was pleaded and
argued before him.  His conclusions rest on findings of fact that were open to
him on the evidence and relevant to the issues as they were presented to him. 
Before us on appeal, David attempted to introduce new arguments not put to the
trial judge and in respect of which a proper factual foundation does not exist.
 I would not accede to those grounds of appeal.

Background

[7]

I do not intend to canvass the evidence or facts in any detail beyond
what is required to set the issues on appeal in context.  The evidence and
facts found by the trial judge are extensively reviewed in his reasons.  It
may, however, be useful to set out a brief chronology and summary of some of
the background to the trial and the appeal.

[8]

The Tsai family immigrated to Canada in 1965.  The family at that time
consisted of the father, Gamaliel, mother, Kwei, and five children.  Four of
the children immigrated with the family and three more children were born in
Canada.  Among the children were sons, David, Joseph and Daniel, each of whom
played a significant part in the events underlying this action.

[9]

The family worked hard and, alongside other endeavours, the parents
accumulated a substantial portfolio of real estate in the Victoria area.  It
was not uncommon for the parents to register title in the names of their
children and to change the registered owner from time to time.  The general
purpose for doing so appears to have been to protect the properties from
creditors but not to actually convey ownership to the child registered on title.

[10]

Among the properties purchased by the parents was Newport, which was a
commercial property housing a photography studio.  It was bought in 1974 and
registered in the parents names.

[11]

In 1987, Joseph became the registered owner of Newport, ostensibly in
consideration for a payment of approximately $105,000.  The trial judge
accepted evidence that the money used to purchase the property was likely
posted by Gamaliel, rather than Joseph.

[12]

On November 23, 1988, Joseph transferred registered title back to his
mother and father.

[13]

On November 3, 1989, Gamaliel transferred his one half registered
interest.  One quarter was transferred to his wife (who then held three
quarters of the title) and one quarter was transferred to David.

[14]

On March 1, 1991, Kwei transferred her registered interest to David, who
at this point held the entire interest in Newport.

[15]

In March 1991, David, as landlord, and Gamaliel, as tenant, entered a
lease agreement for Newport.  The lease was for 15 years with a 5-year right of
renewal.  It enabled Gamaliel to collect the rents and pay the expenses,
essentially controlling the property, for only $1 per year.

[16]

In August 1991, David granted Gamaliel a power of attorney in relation
to a number of properties, including Newport, which was registered in the Land
Title Office in March 1994.

[17]

David married on March 19, 1994.

[18]

In November 1994, David signed a declaration of trust declaring that he held
Newport in trust for his parents.  Shortly afterwards, David met with a
chartered accountant, Fred Wong, to discuss tax issues.  Mr. Wongs notes
from this meeting indicate that the properties in Davids name were held in
trust for his parents.  The trial judge found these notes to contain an
admission that, at that time, David knew he held Newport in trust for his
parents: para. 151.

[19]

On November 21, 2002, Gamaliel transferred registered ownership from
David to Joseph and Christian, using the power of attorney.

[20]

The chronology set out above is the bare bones of some critical events
underlying the action.  Evidence relating to many other events was canvassed by
the trial judge.  For current purposes it is useful to point out that there is
no dispute that the parents wanted David to sponsor and marry a Chinese woman
of their choosing.  It is not in dispute that in or about 1988 they discussed
with David the idea of his marrying a woman from China.  Jia Qi Chen, who was
studying medicine in China, was identified as a suitable bride.  It took
several years to arrange Jia Qi Chens immigration, from roughly 1988 to the
end of 1993.

The trial judgment

[21]

The trial judge defined the issue before him in the following terms:

[67]      The central factual and
legal issue in this case, because it is the foundation of Davids claim, is
whether, as he asserts, there was an oral contract with his parents under which
he would receive Newport.

[22]

The trial judges appreciation of the essence of Davids case was based
in part on Davids argument which opened with these words: David Tsai made a
bargain with his parents  that if he married a Chinese woman he would get the
Newport Property.  David did not resile from that assertion, although he did
argue that the issue before the Court was not the
enforceability
of the
arrangement, but the fact that the bargain was acted on.  In other words,
according to his written submissions, the property was transferred to David
pursuant to the bargain and David received the legal and beneficial interest
in the Newport Property in 1991 because he was committed to marry Jia Qi Chen.

[23]

The judges identification of the issue he had to decide was defined by
Davids pleadings.  The trial judge set out the pleadings in his reasons as
follows:

[68]      In the Third Amended Statement of Claim, which
amendment was proposed during argument, David advances the claim as follows:

11. In or about 1988, Mum and Dad
asked the plaintiff to marry a Chinese woman of their choosing.

...

13. In or about 1990, the plaintiff
told Dad and Mum he was prepared to sponsor Jia Qi Chen to Canada for purposes
of marriage.  The plaintiff said he would marry Ms. Chen on the condition
that he receive the Newport property.

...

22. On or about March 19, 1994 the
plaintiff married Jia Qi Chen further to the agreement he had with his dad and
mum that he would marry Ms. Chen on the condition that he receive the
Newport property.

...

34. The agreement that the Plaintiff would marry Ms. Chen
on the condition he receive the Newport Property advanced the time when the
plaintiff would receive the property to the time when he agreed to the
marriage.

[24]

On several occasions throughout the judgment the trial judge reiterated
that the essential or central factual and legal issue was whether the parents
transferred Newport because of the alleged agreement.  The agreement was the
foundation of Davids claim and the basis for concluding, if proven, that the
parents intended to transfer the beneficial interest to him.  In my view, the
trial judge was entirely correct in reasoning that David advanced no other
basis for his claim to the beneficial interest in Newport.  David did not
allege he received Newport as a gift.  Nor did he allege the grounds advanced
on appeal, that something less than a contractual agreement can be sufficient
to rebut the presumption of resulting trust.  In brief, the judge decided the
case he was asked to decide.

[25]

The trial judge proceeded to analyze and weigh the evidence to decide
whether David had proven the bargain he alleged.  He concluded that David had
failed to prove the existence of the agreement and, accordingly, failed to
prove that he owned the beneficial interest in Newport.  On route to that
conclusion, the trial judge accepted that the parents did have the beneficial
interest in Newport to transfer to David, if in fact they intended to do so.  He
reached that conclusion because he rejected Josephs claim that he owned the
beneficial interest in Newport, even though he had transferred registered title
back to his parents in 1988.

[26]

The trial judges reasons for judgment are lengthy.  They involve a
detailed examination of the evidence that was probative of the issue the trial
judge was asked to decide.  Weighing the evidence to make findings of fact
involved assessing the credibility of the witnesses including, most
importantly, David, Joseph, Daniel and Gamaliel, each of whom he found
seriously wanting on critical points.  The trial judge tested their evidence
against a limited documentary record, as well as the subsequent conduct or
statements that were relevant to the intentions of the parties at the time of
the material transfers.

[27]

I refer the reader to the careful analysis undertaken by the trial judge,
but I would add several comments pertinent to this appeal.  It is clear to me
that in his analysis, the trial judge kept in sharp focus the central issue:
whether the evidence disclosed an agreement that was acted upon and proved that
the parents intended to transfer beneficial ownership of Newport to David.  In
particular, the trial judge made proper use of after the fact conduct,
statements, and documents to help assess the parties intentions
at the time
of the transfer
.  David raised the trial judges use of after the fact
conduct on appeal; however, I find the judge properly applied the principles
governing the use of such evidence as stated in
Pecore v. Pecore
, 2007
SCC 17 at para. 59.

[28]

I set out below some extracts from the reasons for judgment that capture
the heart of the trial judges conclusions:

[225]    Upon a consideration of all of the evidence, I have
concluded that David has failed to prove that he made an agreement with his
parents that they would transfer Newport to him beneficially if he sponsored
and married Jia Qi Chen.

[226]    I did not find Davids evidence in light of all of
the evidence at trial persuasive that such an agreement existed.  As I
mentioned in these reasons, I did not find Davids evidence compelling and I
think that there were strong elements of wishful thinking underlying many aspects
of it.

[227]    The agreement is of great significance in this
case.  It is the foundation of the plaintiffs case However, in the absence of
an agreement, his parents were free to change their minds before they disposed
of Newport, and that is what they have done.

[228]     I find the existence of such an agreement to be
inconsistent with the surrounding circumstances as a whole, particularly the
subsequent declaration and statements by David that he held the property in
trust for his parents.  If David had received Newport beneficially before he
signed that declaration, as he asserts is the case, he would have not signed
that declaration of trust or would at least have specifically objected to it. 
The fact that the parents had their children hold properties for them in trust
was not an unusual occurrence.

[229]    If David and his parents had made the agreement that
he alleges, I expect that that there would be some contemporaneous reference to
it in some document but none was shown.

[230]    Given the transfer of title, the sponsorship and the
parents desire that their sons marry Chinese women, there is obviously
circumstantial evidence supporting the oral agreement.  The parents proclivity
to transfer their properties and offer them to their children as inducements
for certain things provides some background that might suggest that the
existence of such an agreement was not unreasonable.  I have considered that
without Newport going to David, the parents may not have provided for David the
way that they have for other children; but does that support the alleged
agreement?

[231]    Other extrinsic evidence points against the
agreement David alleges.  I found Davids explanation that his parents
transferred a ¼ interest and later a ¾ interest to avoid property transfer tax
to be an odd and not very compelling explanation.

[232]    If there was an agreement, I think that it is
reasonable to consider that it would likely be advanced at the forefront of the
litigation: why was it so slow being pleaded?  It should have been obvious that
the agreement, if it existed, would be relied on as the basis upon which David
received beneficial title to Newport, but it was not pleaded until the trial of
this action, and not actually formally advanced until the third amended
pleading which was proposed during argument.



[234]    David and his wife testified about the existence of
an agreement but described it in different ways; none of the other children
(other than Daniel) testified that they were aware of the Newport for sponsoring
and marrying agreement David alleges I reject Daniels evidence that he was
told of the agreement by his mother (and his father) - it is inconsistent with
his apparent belief at the time that David was not the beneficial owner of
Newport but a trustee.



[236]    Of much more significance in this case than the late
pleading of the alleged agreement is the conduct of David that was inconsistent
with a belief in the existence of the agreement he asserts  The following I
find were inconsistent with David believing he entered into the agreement that
he alleges that he became the beneficial owner on the condition of sponsoring
and marrying Jia Qi:

·

in November 1994, after his marriage, David signed a declaration
that he held Newport in trust for his parents;

·

during the meeting in 1994 shortly thereafter with Fred Wong, the
chartered accountant, David acknowledged that he held certain properties
(including Newport) in trust for his parents and that the decision as to what
to do with the properties awaited the parents instructions;

·

During the negotiations with Zebra in 2001, and in emails drafted
with the assistance of Daniel (a lawyer), David referred to himself as a
trustee and his parents as beneficiaries of the Newport property;

·

after David learned of the transfer of Newport to Joseph and
Christian, David, I find, does not appear to have mentioned to his parents or
to his siblings the specific oral agreement that he relies on;

·

David never claimed the income from Newport as his.

[237]    I recognize that the parents have transferred other
properties beneficially to their children and in the past may have indicated a
general intention that David would receive Newport, but the evidence does not
show that they ever acted on that possible intention, and most importantly, it
does not show that they made an agreement that he would receive Newport if he
sponsored and married a particular young female doctor from China.



[239]    The evidence of David about getting the Newport
Property and his control over the various properties by David is, in part,
based on his expectations, and more on his wishful thinking about what he
expected his parents to do in terms of succession planningThere is, in my
assessment, a strong element of wishful thinking in Davids recollection of the
events surrounding Newport.

[240]    I have to take into account the fathers evidence
that he did not intend to transfer ownership to David by his transfer in 1989
and by his wifes transfer in 1991.  Frankly, I do not place great weight on
what the father now says that his intention was at that time, as he has a
long-standing practice of transferring titles to create illusions to protect
himself from creditors.



[242]    Of greater weight to the question of true ownership
is the fact that even after the transfer to David, the parents purported to be
the beneficial owners of Newport in fact and declared the income and paid the
expenses, rather than David.



[249]     The father may have wanted to show David as a man
of means for the purposes of the application to sponsor his wife or may have
wanted to keep the parents properties away from creditors.  Perhaps given
Josephs own difficulties, the parents put Newport, like others, in Davids
name for creditor-proofing.  Perhaps they did it because they expected that
they would ultimately transfer beneficial title to David.



[252]    I think that Davids case is rooted in
disappointment from an expectation that he would get Newport.  Davids
testimony weaves through facts and documents to attempt to present a coherent
case.  Although his marriage to Jia Qi after the transfer of Newport provides
some surface attraction to his contention, the plaintiffs case falls down when
considered in light of the whole of the evidence.  I find it difficult to
accept that he did not appreciate the power of attorney gave his father power
over Newport, that he did not appreciate that the lease was really only a
creditor-avoidance device, or that the declaration of trust actually meant that
he held Newport, among other properties, in trust for his parents.  His
comments to the accountant Henry Wong indicated he understood that he held the
properties, including Newport, in trust.



[254]    Davids case is not supported by a robust reading of
the documents.  He limits the declaration of trust, he ignores the power of
attorney powers, and he never states clearly in contemporary documents that
Newport belongs to him.

[255]    Accordingly, I find that insofar as David is
concerned, there was no breach by his father of the duties under the power of
attorney when Gamaliel, through the power of attorney, conveyed title to Joseph
and Christian in 2002.   I agree with Ms. Fisher, counsel for Gamaliel,
that in order to establish that Gamaliel breached a fiduciary duty by using the
power of attorney, the plaintiff must first establish he had a beneficial
interest in Newport.  Because David has not proven the agreement that he
alleges, and he did not have beneficial ownership in Newport, the claim against
Gamaliel for breach of fiduciary duty and breach of contract must fail.

[256]    Without an enforceable agreement, there is no
consideration for the transfer and the transfer to David was gratuitous.  That
would [give] rise to a presumption of a resulting trust, a trust I find that he
in fact acknowledged at the time.  In the absence of a proven agreement, there
is no allegation of gift and the presumption of resulting trust in favour of
his parents would not have been rebutted.



[258]    I conclude that in 2002
whether prompted by Joseph (which appears likely) or otherwise, the parents,
who then had beneficial title to Newport, conveyed the title to Newport
beneficially to Joseph and his son Christian.

[29]

It is obvious that the trial judges findings of fact are predominantly
the result of his assessment of the credibility of the various witnesses when
tested against the documents and probabilities of the circumstances.  As such,
this Court owes them a high level of deference.  The findings of fact were not
seriously challenged on appeal, although David does argue that the trial judge
misread documents such as the power of attorney and the declaration of trust
and should not have relied on conduct after the transfers in 1989 and 1991 to
the extent he did.  On my review of the evidence and the trial judges reasons,
these assertions have no merit.

On Appeal

[30]

David contends that the trial judge made a series of related errors in
dismissing his action.  He submits, first, that the trial judge erred in
requiring David to prove a legally enforceable contract with his parents in
order to rebut the presumption of resulting trust.  David argues the trial
judge set the bar too high and the presumption can be rebutted by evidence of
consideration for the transfer falling well short of an enforceable
agreement.

[31]

Secondly, the trial judge erred in failing to appreciate that whether
David received Newport as a gift was a live issue on the pleadings, properly
interpreted.

[32]

Thirdly, David contends the defendants were not entitled to defeat his claim
to Newport by arguing that the transfer of registered title occurred to mislead
immigration authorities about his financial means as an immigration sponsor.  David
argues that the trial judge should not have considered this rationale for the
transfer because the defendants did not have clean hands and cannot rely on
their improper conduct as a basis for claiming a continuing interest in the
property.

[33]

Finally, David argues that the trial judge failed to give proper effect
to s. 23(2) of the
Land Title Act
, R.S.B.C. 1996, c. 250 [
LTA
],
which provides in substance that registered title is conclusive evidence that
the registered title holder is indefeasibly entitled to both legal and
beneficial ownership of the property, subject only to the exceptions provided
in the section such as proof of fraud.  David argues that, in the circumstances
of this case, the effect of s. 23(2) is to displace the presumption of
resulting trust.  Accordingly, the trial judge erred in relying on the
presumption in concluding that David did not receive beneficial ownership of
Newport when he received registered title.  Rather, the trial judge should have
given effect to the statute and treated Davids registered interest as
conclusive evidence of ownership and found the subsequent transfer to be of no
legal effect.

Did the trial judge err by requiring proof of an enforceable agreement to
rebut the presumption of resulting trust?

[34]

I have already observed that the issues raised on appeal recast the case
and the issues from how they were presented to the trial judge.  As noted above,
Davids case at trial was that he received Newport from his parents because he
had an agreement with them that he would receive it if he agreed to marry a
Chinese woman of their choosing, which he did.  That was the case he pleaded in
his Third Amended Statement of Claim.  The trial judge was correct to describe
the alleged agreement as the foundation of the plaintiffs case and to
characterize his essential claim as one of contractual entitlement: paras. 27,
20.

[35]

It follows that the trial judges statements of legal principle must be
read in light of the case as it had been framed by David and the issues he
raised in support of his claim.  The trial judge, for example, concluded that
unless David proved the agreement the transfer would be gratuitous because it
occurred without consideration.  Similarly at para. 60 he observed:

[60]       Apart from the
promise to sponsor and marry, the consideration under the alleged agreement,
there is no consideration for the transfers in 1989 and 1991 and, in the
absence of an agreement for good consideration, there would be a presumption of
a resulting trust in favour of the parents at that time:
Pecore v Pecore
2007 SCC 17 (CanLII), [2007] 1 SCR 795.

[36]

I do not take these statements to be asserting a general principle of
law that transfers are gratuitous or engage the presumption of resulting trust
if they occur outside the context of an enforceable contract supported by
consideration.  The judge is not suggesting that other lesser or different
forms of consideration are insufficient to support a non-gratuitous transfer
in other circumstances.  He is simply framing an analysis that is applicable to
the case he was asked to decide.  David said the transfer occurred because of
an agreement that he performed, the consideration for which was marrying a
Chinese wife of his parents choosing.  He did not suggest that there was any
other consideration supporting the transfer or that there was an alternative
basis to consider the transfer non-gratuitous.  In the context of the case, if
he failed to prove the agreement, the foundation of his case, the trial judges
conclusion that the transfer was gratuitous or engages the presumption of
resulting trust is simply an application of principle to the specific
circumstances in issue.

[37]

Moreover, although the trial judge does say that [w]ithout an
enforceable contract, there is no consideration for the transfer and the
transfer to David was gratuitous (at para. 256), I do not think, reading
the reasons as a whole, that the judge in fact placed any weight on the legal
enforceability
of the agreement in analyzing the case.  It is clear throughout his reasons
that he is examining whether there was in substance an agreement, a bargain, or
an arrangement that David would receive Newport if he married a Chinese woman. 
The legal enforceability of any such bargain was not the issue for the trial
judge.

[38]

Setting to one side the potential implications of s. 23(2) of the
LTA
for the moment, the trial judges statement in para. 256 that [i]n
the absence of a proven agreement, there is no allegation of gift and the
presumption of resulting trust in favour of his parents would not have been
rebutted, is a correct statement of the law as it applies to the case the
trial judge was asked to decide.

[39]

I would make two additional comments.  First, in my view, the trial
judge was correct in observing that David did not allege that he received
Newport as a gift: para. 20.  His initial pleadings claimed only that he
had received Newport from his parents.  His Statement of Claim was amended to
articulate the foundation of his entitlement to Newport, which was the
agreement.  Nothing in the defendants pleadings can fairly be read as
admitting Newport was gifted to David.  Given the parties pleadings, the judge
was entitled to decide the case on the basis that whether or not Newport was gifted
to David was not in issue.

[40]

Secondly, I do not think the trial judges conclusions ultimately turn
on the application of the presumption of resulting trust.  Certainly, the trial
judge considered the presumption and what would be required to rebut it.  He
used it as an organizing principle for the analysis in the reasons.  However, the
trial judge was alive to the fact that the presumption allocates burdens of
proof, but that its significance only becomes evident after all the relevant
evidence has been weighed and the facts found.  If all of the necessary facts
can be found, it is unnecessary to resort to the presumption to decide the
case.  In such circumstances, the presumption is not applied to determine the
outcome.

[41]

In this case, although certainly the trial judge concluded that David
did not rebut the presumption, he went further and found facts that disposed of
Davids claim to have ever owned the beneficial interest in Newport.  One such
critical finding was that David acknowledged he held Newport on trust for his
parents while he was its registered owner.  The trial judge identified a number
of occasions when David acknowledged that fact.  Not the least of them was in
the Declaration of Trust, which, in my view, the trial judge was entitled to
treat as an admission and acknowledgement.  The acknowledgment that he held
Newport on trust is critical to the intention of the parties, including of
course the parents, when the transfer occurred.  The trial judges conclusion
that David held Newport in trust for his parents is a finding of fact based on
weighing the evidence and not the consequence of applying a presumption to
ground a conclusion.

[42]

The fundamental problem with Davids position on this appeal is the
extent to which he now takes new positions that were not argued before the
trial judge.  As is well known, this Court is loath to entertain new issues
advanced for the first time on appeal.  Generally, leave to introduce a new
issue is denied if raising the issue requires new evidence to be led.

[43]

In
Athey v. Leonati
,

[1996]
3 S.C.R. 458
at para. 51,
140 D.L.R. (4th) 235,
Major J. for the Supreme Court of Canada stated:

51         The
general rule is that an appellant may not raise a point that was not pleaded,
or argued in the trial court, unless all the relevant evidence is in the
record: John Sopinka and Mark A. Gelowitz,
The Conduct of an Appeal
(1993), at p. 51.

[44]

The general principles for entertaining new issues on appeal were recently
reviewed in
Devine

v.

Devine,
2012 BCCA 509 at para. 45:

[45]      An appeal court should
only allow a new issue on appeal where the interests of justice require it and
where the court has a sufficient evidentiary record and findings of fact to
decide the issue (
Quan v. Cusson
, 2009 SCC 62 at para. 37, [2009] 3
S.C.R. 712, citing
Wasauksing First Nation v. Wasausink Lands Inc.
(2004), 184 O.A.C. 84 at para. 102, 129 A.C.W.S. (3d) 2 (Ont. C.A.)).  In
balancing the interests of justice, the court will consider potential prejudice
to the other party.  As Prowse J.A. stated in
OBryan v. OBryan
(1997), 43 B.C.L.R. (3d) 296, 97 B.C.A.C. 62, the prohibition against
permitting one party to raise a new issue on appeal for which the evidentiary
groundwork was not fully laid in the trial court is primarily to prevent
prejudice to the party against whom the issue is raised (at para. 24) as
evidence might have been led at trial if it had been known that the matter
would be an issue on appeal (at para. 23).  Issues of pure law are more
likely to be granted leave than issues that require the leading of evidence (
Emmett
v. Arbutus Bay Estates Ltd.
(1994), 95 B.C.L.R. (2d) 339 at para. 9,
48 B.C.A.C. 26, citing
R. v. Vidulich
(1989), 37 B.C.L.R. (2d)
391 at 398-399, 8 W.C.B. (2d) 52 (C.A.).

[45]

In my view, Davids attempt to recast this case must fail for the
reasons just described.  The issues he raises require evidence and findings of
fact the trial judge was not asked to make.  To permit them to be advanced now
would be prejudicial to the defendants.

[46]

David argues the trial judge should have considered whether, failing
proof of an agreement, the evidence established a sufficient nexus between Davids
marriage to Jia Qi on the one hand, and the transfer of Newport to David on the
other, to constitute sufficient consideration to conclude the parents
intended to transfer the beneficial interest to David.

[47]

With respect, I disagree.  The trial judge was not invited to consider
whether some consideration other than what was involved in the alleged
bargain would support a transfer of the beneficial interest.  The only nexus
advanced by David was the alleged agreement.  Assuming some different or lesser
consideration might have been sufficient to transfer the beneficial interest, that
issue should have been pleaded or properly put in issue.  It was not.  If it
had been, the evidence that was led may well have been different.  The trial
judge would have had to embark on a different analysis of the evidence to find
the relevant facts.  It is too late to raise this issue on appeal.

[48]

I have already accepted that the trial judge made no error in concluding
that David did not allege a gift.  He cannot be faulted for failing to consider
explicitly whether the parents intended a gift.  In any event, the findings of
fact that he did make are inconsistent with finding a gift.  Those findings are
entitled to deference.  Again, I would not entertain this argument on appeal.

[49]

The trial judge examined every aspect of the relationship between the
sponsorship, marriage and transfer to determine whether the parents intended to
transfer beneficial ownership.  He concluded that they did not intend to make
such a transfer.  I do not think that finding can be challenged on the facts in
the absence of a palpable and overriding error.  It is evident to me that the
trial judge made no such error.

Did the trial judge err in entertaining the assertion that the transfer was
intended to mislead the immigration authorities about Davids financial means?

[50]

David argued on appeal that the judge erred in considering the
defendants explanation that the transfer was a sham to mislead the immigration
authorities into believing David was a person of financial means capable of sponsoring
Jia Qi.  David argues if that explanation cannot be considered then under s. 23(2)
of the
LTA
there would be conclusive evidence that he owned Newport
beneficially.

[51]

Again, this argument was not made to the trial judge and it was not an
issue at trial.  If it had been, it might have affected what evidence was
admissible as well as the evidence that was admitted.  If it had been advanced,
the trial judge would have been called on to consider whether the argument was
correct and to make the necessary findings of fact.  As it is, the trial judge
did review various possible explanations for the transfer of registered title
to David, including the possibility that it was a sham.  However, the trial
judge did not find that this was the reason for the transfer.  At best the
trial judge merely found it was one possibility among several, as his findings
of fact were limited to those relevant to whether the parents intended to
transfer beneficial ownership to David.  Moreover, to the extent that the
transfer to David might have been for an improper purpose, the relevance of Davids
involvement and complicity in the transaction would have had to be considered.  This
in turn would have required further findings of fact.

[52]

The trial judge was not asked to embark on this inquiry and, in my view,
we ought not to entertain this entirely new argument on appeal.  This issue
does not raise a pure issue of law in respect of which all the necessary
findings and evidence are in the record.

Section 23(2) of the
Land Title Act

[53]

I have reached the same conclusion with respect to the argument advanced
to us with respect to the effect of s. 23(2) of the
LTA
.  Mr. Holmes
argued that s. 23(2) is, by its terms, a legislative enactment that
declares registered title to be conclusive evidence of legal and beneficial
ownership, subject only to certain limited statutory exceptions.  In this case,
the only applicable exception relates to fraud.  The relevant parts of this
provision are as follows:

(2) An indefeasible title, as long as it remains in force and
uncancelled, is conclusive evidence at law and in equity, as against the Crown
and all other persons, that the person named in the title as registered owner
is indefeasibly entitled to an estate in fee simple to the land described in
the indefeasible title, subject to the following:



(i) the
right of a person deprived of land to show fraud, including forgery, in which
the registered owner has participated in any degree;



[54]

Mr. Holmes argues the effect of this section is to oust the
application of the presumption of resulting trust.  He contends that the line
of cases in which registered title has been found to be subject to the
presumption of resulting trusts goes beyond what is supportable in law.  In his
submission, such cases are (or should be) restricted to relations between joint
purchasers, particularly those who go on title as joint tenants.  He invites
this Court to declare the law to be so.

[55]

Mr. Holmes argument is that the trial judge erred in relying on
the presumption of resulting trust to defeat Davids registered interest because
s. 23(2) required that he accept registration as conclusive evidence of
beneficial as well as legal ownership.  He says David was in substance alleging
that Joseph and Christian acquired their title fraudulently.  Accordingly,
their title should have been set aside and effect given to s. 23(2).  In
short, Mr. Holmes contends that the trial judge ought to have started his
analysis by accepting that Davids registered title in 1991 was conclusive
evidence that he was the beneficial owner of Newport and then concluded that
Joseph had acquired his registered title by fraud.

[56]

I do not think we ought to allow this issue to be raised on appeal for a
number of reasons.  Not the least of which is that this argument is, in any
event, problematic.

[57]

Mr. Holmes accepted in argument that even if the presumption of
resulting trust is ousted by the operation of s. 23(2), it would always be
possible to prove the existence of an unregistered resulting trust between a
transferor and transferee.  Mr. Holmes conceded that his argument was
really about where the burdens lie.  He acknowledged the possibility of a
resulting trust existing that was inconsistent with registered title.  In that
situation, he said, if the transferee denied the trust he would be guilty of
equitable fraud and the statutory exception in s. 23(2)(i) would apply.  In
this case, the trial judge found as a fact that David held title on a resulting
trust because he acknowledged that he did so.  As between David and his
parents, David held Newport in trust for them (or, at the very least, his
mother).  This would mean that on Mr. Holmes analysis Davids assertion
of title would be a fraud.

[58]

Clearly, the trial judge was entitled on any approach to examine the
facts to determine as between David and his parents what interest David took
when he went on title to Newport.  That is what he did when he examined whether
David acquired Newport because of the agreement.  The trial judge was not
invited by David to approach the case on the basis that s. 23(2) was
conclusive evidence of his ownership and the onus was on the defendants to
establish that David was denying the existence of a resulting trust.  In my
view, it is not open, at this stage, for David to recast the case in this way.

[59]

While David did plead that his fathers use of the power of attorney to
transfer registered title from David to Joseph and Christian was a breach of
fiduciary duty, the trial judge dismissed that allegation.  Specifically, he
found Gamaliel did not breach his fiduciary duty in using the power of attorney
to transfer title.  I agree with the reasoning of the trial judge on this
point.

[60]

The trial judge was not invited to consider whether the transfer to
Joseph and Christian fell within the exception set out in s. 23(2)(i).  However,
in order to do so, the trial judge would have had to determine what interest
David had in Newport.  This is a critical finding preliminary to being able to
determine whether Joseph and Christian received that interest through fraud in
which they participated.  The trial judge, of course, concluded that David did
not have a beneficial interest.  The trial judge was not invited to decide
whether the starting point of his analysis should be that title registered in
Davids name was conclusive evidence of beneficial ownership.  Nonetheless, I
am not convinced, given the trial judges findings, it would have made a
difference to his conclusions.

[61]

As I have already observed, the trial judge did refer to the presumption
of resulting trust but the case did not ultimately turn on it.  Davids failure
to prove the agreement he alleged opened the door to the application of the
presumption, but the trial judge found as a fact that there was a resulting
trust that was acknowledged by David.  His ultimate conclusion was not
dependent on the presumption.

[62]

Finally, in this case, registered title to Newport at the time of trial
was in the names of Joseph and Christian.  On Davids argument, they would be
entitled to set up their title as conclusive evidence of beneficial ownership. 
The onus would then be on David to prove they had received it fraudulently and
that they had participated in the fraud.  He would, I think, therefore have had
the onus of demonstrating that they had acquired an interest in Newport that
was properly his.  That would require proof of his interest, which, of course,
he had attempted to do by proving the agreement.  This was the very issue the
judge decided.  It is far from clear to me that this argument advanced on
appeal in any substantial way alters what the trial judge did or lays a
foundation to think the result would have been any different if the judge had
approached the case in the way David now suggests he should have done.

[63]

It follows that I am not persuaded that this case calls for a decision
by this Court about the full scope of the application of the presumption of resulting
trust in the face of s. 23(2).  The issue does not arise on the facts.  I
will, however, note that this Court very recently considered the relevance and
applicability of the presumption in the context of a joint tenancy that did not
involve joint purchasers:
Bergen v. Bergen
, 2013 BCCA 492.  While the
case is not directly on point for this appeal, I refer to it in response to the
argument that s. 23(2) and the jurisprudence dictate that the presumption
only properly applies in cases of joint purchasers.

Conclusion

[64]

The trial judge decided the case as he was asked to decide it.  He was
not asked to address the issues in the way Mr. Holmes put them to us on
appeal.  The trial judge found on the facts that David held Newport on a
resulting trust, which he acknowledged, and that he had not proven that he
acquired the beneficial interest by agreement.  In my view, we ought not to
consider the case on the basis suggested by Mr. Holmes.  He raises points
not argued before the trial judge that call for findings of fact the judge was
not asked to make.

[65]

In the result, I would dismiss the appeal.

The Honourable Mr. Justice Harris

I
agree:

The
Honourable Madam Justice Saunders

I
agree:

The
Honourable Madam Justice Kirkpatrick


