



COURT OF APPEAL
    FOR ONTARIO

CITATION: Donaldson v. Braybrook, 2020 ONCA 66

DATE: 20200131

DOCKET: C66684

Simmons, Lauwers and Nordheimer JJ.A.

BETWEEN

Wendy Elaine Donaldson

Plaintiff

(Respondent)

and

Margaret Susan Braybrook
    and Thomas Walker Braybrook

Defendants

(Appellants)

David N. Delagran, for the appellants

Nathaniel Read-Ellis, for the respondent

Heard: January 20, 2020

On appeal from the order of Justice Hugh K. OConnell of
    the Superior Court of Justice, dated February 8, 2019, with reasons reported at
    2019 ONSC 810.

REASONS FOR DECISION

[1]

The defendants appeal from the summary judgment granted by the motion
    judge that declared that the plaintiff had a life interest, with exclusive
    possession, in a particular property. For ease of reference, we will refer to
    all of the parties by their first names.

[2]

The property at issue is the parties family cottage. The
    parties are all siblings  Wendy, Susan, Thomas and Barry. The cottage property
    was owned by their mother, Margaret.

[3]

There is no dispute that, during Margarets lifetime, all of the
    children were given generous access to the cottage and all of them used it.
    Indeed, Margaret lived year-round in an apartment over the garage on the cottage
    property as her permanent residence, so that the main cottage could be used by her
    children. Margaret distributed cottage time in the spring of each year, allocating
    weeks among those of her children who wished to use the cottage. There is also
    no dispute that her system of allocation was always fair. Any child who asked
    for time at the cottage was given it.

[4]

On March 13, 1995, Margaret attended at the offices of her solicitor and
    signed a transfer of the cottage property from herself alone to herself, Susan
    and Thomas (As joint tenants and not as tenants in common as to the remainder
    in fee), with additional transferees listed as Wendy  As to a life estate,
    and Barry, also As to a life estate. Margaret took this step in secret. That
    is, she did not inform any of her children that she was making these
    arrangements.

[5]

On the same day, Margaret executed a new Last Will and Testament. In her
    Will, she referred to the cottage property in two respects. One was to provide that
    Margarets live-in companion would be permitted to reside in the garage
    apartment as long as he wished. The other was to provide that the entire
    residue of her estate was to be held in a trust for five years to be used to
    pay taxes, maintenance and insurance on the cottage property. The Wills stated
    purpose for the trust was "that none of my children shall have the
    obligation to maintain the Muskoka Lakes cottage property". After five
    years, the residue was to be divided equally among her four children.

[6]

In 1997, Margaret executed a new Will. In this Will, she continued the
    provision permitting her companion to live in the garage apartment. She extended
    the provision for the payment of expenses of the cottage property from the
    residue of her estate to a ten-year period. In 2003, Margaret executed a
    codicil to her 1997 Will in which she removed the provision permitting her
    companion to live in the garage apartment. In 2004, Margaret executed yet
    another new Will in which she removed the provision that had created a trust of
    the residue of the estate to pay the expenses for the cottage property.

[7]

Margaret continued to live in the apartment above the cottage garage for
    another eight years after the 1995 transfer. Her companion also continued
    living there with her. Throughout, Margaret continued to maintain control over
    the use of the cottage and allocated time as between her children as she had
    always done.

[8]

In or about September 2000, Margaret told Susan of the 1995 transfer,
    namely that she had transferred the cottage property to Susan, Thomas, and
    herself as joint tenants. She did not tell Susan about the life interests to
    Wendy and Barry.

[9]

Margaret passed away on February 24, 2007. She never told Wendy about
    the transfer nor did Susan or Thomas. Wendy never learned she was on title as a
    an additional transferee, [a]s to a life estate, until five years after
    Margaret's death.

[10]

Shortly after Margaret's death, Thomas and Susan severed the joint
    tenancy on the cottage property such that they each owned 50% as tenants in
    common. After Margarets death, Thomas and Susan paid the expenses related to
    the cottage property, something that was apparently unknown to Wendy.

[11]

However, Susan, Thomas and Wendy continued to use the cottage in the
    same manner as they had before Margaret died. Barry does not appear to have continued
    to use the cottage.

[12]

By 2013, the annual carrying costs for the cottage property had risen
    substantially. Moreover, in 2013, Thomas moved to British Columbia.
    Accordingly, Thomas and Susan decided to sell the cottage property. They
    recognized that in order to do so, they needed to have Barry and Wendy release
    their legal life interests registered on title.

[13]

Barry immediately agreed to release his life interest without
    compensation. On February 25, 2013, he assigned his life interest to Thomas and
    Susan. Barry died some time later.

[14]

Wendy did not agree. She took the position that she was an equal owner
    of the cottage property, and ultimately commenced this action. While,
    initially, Wendy claimed that the cottage property was held equally by all four
    children, she subsequently amended her claim to include alternative relief that
    she had a life interest in the cottage property, with the exclusive right to
    its use, occupation and possession. Other relief was also claimed including restitution
    for unjust enrichment.

The decision below

[15]

The motion judge held that Wendy had a life interest in the cottage
    property with a right to
exclusive
use. He also concluded
    that the appellants had been unjustly enriched through their use of the cottage
    property since Margarets death but made no corresponding award. Rather, the
    motion judge ordered that the court shall attempt to fix the quantum of
    damages if counsel wish to provide further written material on this topic. When
    further material was provided, the motion judge determined he was
functus
and, thus, could not address the issue.

[16]

The motion judge concluded that the evidence as a whole demonstrated
    Margarets intention to gift to Wendy a life interest in the cottage property.
    He rejected the suggestion that the use of the cottage property after the
    transfer but before Margarets death, negated this life tenancy. He found, at
    para. 176:

Clearly Margaret wanted two of her four children to have a
    proprietary right in the cottage property, and two of the others to have a life
    tenancy.

Analysis

[17]

In our view, the motion judge erred in both law and fact in concluding
    that Wendy has an
exclusive
life interest in the
    property.

[18]

The appellants argue that the motion judge erred in law by failing to
    undertake an analysis of the mothers actual intentions at the time she
    executed the transfer, in failing to distinguish the difference between an
    intention to transfer legal title and an intention to transfer beneficial
    interests, and in concluding that the presumption of resulting trust had been
    rebutted. They also argue that the evidence simply does not support the
    conclusion.

[19]

For the most part, we agree with the appellants.

[20]

The wording on the registered transfer on title is ambiguous. It lists Margaret,
    Susan and Thomas as transferees without limiting their interest in any way. It
    states that they take title As joint tenants and not as tenants in common
as to the remainder in fee
 (emphasis added), which
    suggests that they have interests beyond the remainder in fee. There are no
    limiting words along the lines that Margaret, Susan or Thomass interest is
    subject to a life interest. The Deed also lists Wendy and Barry as additional
    transferees.

[21]

Given this ambiguous wording, it is appropriate to look to the evidence
    of actual intention.

[22]

In our view, the evidence as a whole supports only one reasonable
    conclusion as to Margarets intent, namely, that she intended all of her
    children to continue to enjoy shared use of the cottage after her death in the
    manner that they had during her lifetime; and that she intended for Susan and
    Thomas alone to enjoy ownership interests beyond the shared right to use during
    their lifetimes.

[23]

Given the history, there is nothing to suggest that Margaret intended
    her transfer of title in the cottage property to herself, Susan and Thomas,
    with an additional transfer of a life interest to Wendy and Barry, to carry
    with it any exclusivity rights. Margarets children had all enjoyed the cottage
    property throughout their lives. There is no evidence that suddenly Margaret
    intended that Wendy would be the only child entitled to use the cottage
    property. That conclusion is not only inconsistent with the concurrent life
    interest that was given to Barry (whether he chose to avail himself of it or
    not), it is also inconsistent with Margarets intention (as reflected by her
    actual use of the cottage and her 1995 Will) that her companion would also have
    the right to use the garage apartment. He would not be able to do so if Wendy
    had the right to exclusive possession of the cottage property. Further, the
    motion judges conclusion is inconsistent with Margarets provision in the 1995
    Will that the residue of her estate would be used to pay all expenses associated
    with the cottage property. There is no apparent reason why Margaret would have had
    her estate pay all of the expenses if only Wendy had the right to use the cottage
    property.

[24]

Significantly, if the motion judges conclusion is correct, then
    Margaret herself had no right to use the cottage property after she made the
    transfer. That reality should, on its own, have caused the motion judge to
    question his conclusion.

[25]

In our view, it is clear on the evidence that Margarets intention was
    to give title to the cottage property to Susan and Thomas while maintaining a licence
    to occupy to Barry and to Wendy that would permit them to continue to use the cottage
    property throughout their lives in the same manner as all of the siblings had throughout
    Margarets life.
[1]
It is equally clear that Margaret intended that all of her children would share
    the use of the cottage property after her death as they had before.

[26]

As for the appellants reliance on the presumption of resulting trusts,
    the guiding authority is
Pecore v. Pecore
, 2007 SCC 17, [2007] 1 S.C.R.
    795. In that case, the Supreme Court of Canada confirmed that, while the
    presumption of advancement normally applies to a transfer between parents and
    children, that presumption does not apply once the children are adults. As
    Rothstein J. said, at para. 41:

There will of course be situations where a transfer between a
    parent and an adult child was intended to be a gift. It is open to the party
    claiming that the transfer is a gift to rebut the presumption of resulting
    trust by bringing evidence to support his or her claim.

[27]

However, the issue of the proper presumption has limited effect since
    the presumption only applies if the court is unable to determine the intent of
    the transferor. As this court said in its decision in
Pecore v. Pecore
(2005),
    17 R.F.L. (6th) 261 (Ont. C.A.), at para. 9,
per
Lang J.A.:

Since both presumptions can be rebutted by evidence of actual
    intention, in my view, the presumptions become relevant only if, after
    considering all the evidence and the circumstances surrounding the transfer, a
    court is unable to draw a conclusion about the transferor's actual intention.
    Only in such a case, would a court resort to the presumptions to determine the
    issue.

[28]

In our view, since the evidence of actual intention in this case is so
    clear, the presumption of resulting trust becomes irrelevant. It is easily
    rebutted by the evidence and circumstances surrounding the transfer that
    clearly demonstrate that Margaret transferred title for the purpose of
    succession planning and therefore with the clear intent to gift the property.

[29]

Finally, two other issues need to be addressed. One is that, in light of
    our conclusion, it is unnecessary for us to determine whether the notes of
    Margarets solicitor were admissible in evidence as business records.

[30]

The other is the submission by the respondent that, if the appeal is
    allowed, the matter should be returned to the Superior Court of Justice to
    proceed to trial. We do not see any reason to do that. In light of our
    conclusion, there are no other issues, raised in the pleadings, that fall to be
    determined.

Conclusion

[31]

The appeal is allowed, the order below is set aside, and in its place an
    order is made that Wendys interest in the cottage property is limited to a
    life-time licence to occupy the cottage property on a non-exclusive basis,
    consistent with the manner in which the cottage property was used in the past.
    Susan and Thomas also have such a life-time licence to occupy the cottage
    property, also on a non-exclusive basis. In addition, Susan and Thomas are entitled
    to the remainder in fee.

[32]

The appellants are entitled to their costs of the appeal fixed in the
    amount of $15,000 inclusive of disbursements and HST and the costs of the
    motion below in the amount of $35,000 inclusive of disbursements and HST as
    fixed by the motion judge.

Janet Simmons J.A.

P. Lauwers J.A.

I.V.B. Nordheimer J.A.





[1]

This conclusion is consistent with the approach taken in
Moore
    v. Royal Trust
, [1956] S.C.R. 880.


