Presumptions of Advancement and Resulting Trusts

Presenter: Elizabeth Strange, Solicitor and Acting Queen’s Printer, Office of the Attorney General, New Brunswick

At the 2006 meeting of the Conference, one topic raised in the “new projects” presentation was the necessity of maintaining the presumptions of advancement and resulting trusts. As at that time the Supreme Court of Canada had agreed to hear two companion cases on the topic, a wait-and-see approach was taken.

Ms. Strange provided a brief overview of the presumptions of advancement and resulting trusts, noting that these are presumptions respecting the intention of a person who has transferred property to another gratuitously. Both presumptions are rebuttable. The presumption of advancement from husband to wife (and vice-versa) has been largely abandoned, both judicially and legislatively. However, the issue of the application of the presumption of advancement for a parent-to-child transfer is still open to debate. Both presumptions have been the subject of criticism from academics and the judiciary, and many critics advocate their abolition.

In the companion cases of Pecore and Brooks, the Supreme Court of Canada had an opportunity to address the topic. Both cases came from Ontario, and were similar in that an aging father had put significant funds into a joint account with an adult daughter. Ms. Strange provided an analysis of both cases. In the Pecore case all the judges agreed that the presumptions have a role to play in disputes or gratuitous transfers, as they provide guidance for courts where there is little or no evidence as to the transferor’s intent. Also, the court in Pecore has given direction as to when each presumption should be applied, and the standard of proof to be applied.

Ms. Strange concluded that, as the Supreme Court of Canada has stated its belief in the continuing importance of the presumptions of advancement and resulting trust and has given direction as to when each should be applied, unless the Uniform Law Conference of Canada sees a strong reason to legislate in favour of a certain presumption, or to remove the presumptions legislatively, there does not appear to an obvious project for the Conference on this topic.

RESOLVED:

THAT the Civil Section Steering Committee continue to monitor developments in the law and, if appropriate, make recommendations to the New Projects Committee.