Tuesday, June 18, 2013

Purchase money resulting trust

Nishi v. Rascal Trucking Ltd. 2013 SCC 33 upholds the doctrine of purchase money resulting trust. A purchase money resulting trust is a species of gratuitous transfer resulting trust that arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property.  Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person's contribution.  This presumption can be rebutted if the recipient of the property proves, on a balance of probabilities, that at the time of the contribution, the person making the contribution intended to make a gift to the person taking title.  While rebutting the presumption requires evidence of the intention of the person who advanced the funds at the time of the advance, after the fact evidence can be admitted so long as the trier of fact is careful to consider the possibility of self‑serving changes in intention over  time. The Court holds:

[22]                          As Cromwell J. noted in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 12, it has been "settled law since at least 1788 in England (and likely long before) that the trust of a legal estate, whether in the names of the purchaser or others, 'results' to the person who a

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