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The BC Court of Appeal recently heard an appeal from a BC Supreme Court decision granting the daughter of a deceased a declaration that her brother held two properties in-trust for the benefit of the deceased’s estate.
Pavlovich v. Danilovic, 2020 BCCA 239 concerned a deceased father and his two children, Ljuba and Alexander. The wife of the deceased and mother of the children had long-ago passed away. Prior to her death, she and the deceased owned two properties in joint tenancy. On the wife’s death, her interest passed to her husband by way of the right of survivorship. Now widowed, the deceased gratuitously transferred both properties into joint tenancy with his son, Alexander. Just like when his wife died, when the deceased died, his interest in the two properties passed to Alexander.
Ljuba filed a lawsuit in BC Supreme Court seeking a declaration that Alexander held a half-interest in the properties in trust for her. Following trial, the trial judge found that the evidence put forth by the parties as to the deceased father’s intentions in transferring the properties into joint tenancy essentially cancelled each other out with neither position being more persuasive than the other. As the Court of Appeal described:
[18] The judge determined the presumption of resulting trust applied, consistent with Pecore v. Pecore, 2007 SCC 17, as she was unable to determine the father’s intention on the evidence. Based on the documentary evidence, the trial judge found “[i]t is just as likely that the joint tenancies reflect a financial strategy aimed at saving the family money—both in taxes during his lifetime and in probate upon his death—as they do an intention for Alexander to hold the properties outright and to the exclusion of Ljuba upon Dragomir’s death” (at para. 47).
[19] On the oral testimony, the judge stated that both parties had provided evidence to support their version of events, such that “the evidence stands in equipoise” (at para. 55). The judge was unable to determine Dragomir’s intention on the balance of probabilities, and the presumption of resulting trust applied.
As such, the trial judge relied on the presumption of resulting trust and found that Alexander had failed to rebut that presumption. In those circumstances, he found in favour of Ljuba.
On appeal, Alexander argued that the trial judge failed to consider relevant oral and documentary evidence; that the trial judge’s conclusions were not be supported by the evidence; and that the trial judge erred in applying the presumption of resulting trust.
In dismissing the first ground of the appeal, the Court of Appeal found that the trial judge considered all relevant evidence including oral evidence offered by both parties about conversations each had had with the deceased before he died. The trial judge simply chose to place very little weight on those statements as they came from the parties who were obviously interested in the outcome of the litigation.
Alexander also argued that the effect of the trial judge’s ruling would defeat the financial strategy the court determined his father had in transferring the properties and, because of that, his father could not have possibly been motivated by financial matters. In rejecting this ground, the Court of Appeal had this to say:
[43] Alexander’s submission on this point, respectfully, misses the point. Clearly the judge found that Dragomir had a general motivation to avoid at least probate fees. This prompted a layman’s desire to keep the properties out of his estate. The fact that the strategy will not now work in light of this litigation and indeed, to be colloquial, has backfired, is quite beside the mark and in no way affects Dragomir’s motivation as found by the judge. One notes that if Alexander had accepted the transfers on the understanding that he would later gift a one-half interest to Ljuba, Dragomir’s “financial strategy” would have worked at least to an extent.
Finally, Alexander argued that erred by failing to consider the possibility that the deceased could have intended to retain beneficial ownership of the properties, but still transfer to him the right of survivorship. In doing so, Alexander relied on Herbach v. Herbach Estate, 2019 BCCA 370 wherein the Court of Appeal had previously acknowledged that a person can do such a thing. Still, in this case, the Court of Appeal found that the trial judge had made no errs in this regard.
In concluding its reasons for dismissing the appeal, the Court of Appeal made some interesting comments on burdens of proof:
[57] In Rhesa Shipping Co. S.A. v. Edmunds, [1985] 2 All E.R. 712 (H.L.), Lord Brandon recalled the well-known exchange between Sherlock Holmes and Dr. Watson on fact finding. Holmes said:
How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable must be the truth?
[58] Lord Brandon rejected this default position for three reasons. It is the first reason that applies here:
… namely that the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.
