Trust and Consequences of a Falling Out Between Parents and an Adult Child Living on Their Property
The Court of Appeal recently sided with the respondent property owners in reasons for judgment dated May 25, 2021: Devins v. Devins, 2021 BCCA 213. This was an appeal by the appellant (plaintiff) daughter of the defendants who was unsuccessful in Summary Trial: Devins v. Devins, 2020 BSCS 2009.
The plaintiff claimed against her parents alleging that they held real property transferred by her maternal grandfather to them in trust for her and her sister. The defendants counterclaimed against their daughter for an order that she vacate the property.
The plaintiff’s grandfather owned a 117-acre parcel of land located just outside of Smithers between 1943 to 1971. In 1971 he transferred the property to the defendants who were his daughter and son-in-law for consideration of $1.00.
The plaintiff moved a trailer onto the property in 1993 and the defendants assisted with the move, including building a road, a culvert, a septic system, and clearing access for power to the property at their own expense. The plaintiff lived for nearly three decades on the property rent-free, while the defendants continued to pay the property taxes.
The defendants sold their home in 2012 and lived in an RV on the property during parts of the year until 2016 when there was a falling out between parents and child. The defendants, both in their 80s with limited incomes, decided to either sell the property or have it logged. The plaintiff filed a Certificate of Pending Litigation when she heard of her parents’ plan, and commenced an action claiming the defendants held the property in trust for herself her sister.
In Summary Trial, the plaintiff argued that her parents were never the true owners of the property and that it was known in the community that it was going to be owned by her and her sister. The defendants argued that their position had always been that it was their property and that if they owned it at the time of their death the daughters would inherit it, but they were free to sell the property if they wanted.
Where a dispute such as this arises between two parties, the starting point is the presumption of indefeasible title, set out in the Land Title Act, RSBC 1990, c 250. The presumption is that the registered title accurately reflects the party’s actual ownership interest. This presumption can be rebutted by the presumption of what is called a resulting trust, or by enforcement of an agreement between the parties in order to prevent an unjust enrichment if the face of a title is upheld. The actual intention of the grantor is the governing consideration. Where a gratuitous transfer is being challenged, the court will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. In this case the property had been gratuitously transferred for $1 consideration, but there was no evidence that the grandfather intended for his grandchildren to have the property.
The Court sided with the defendants, who had owned the property for 49 years. The Court found the plaintiff never contributed to paying the property taxes. There was no evidence the defendants were unjustly enriched by having the plaintiff stay on their property without compensation. The plaintiff only challenged the defendants’ ownership of the property after having a falling out and concerned her inheritance would be jeopardized by the property being logged or sold.
The plaintiff’s appeal was dismissed, with the Court deciding not to allow fresh evidence. In order for fresh evidence to be admitted in an appeal, a party must (1) show that the evidence could not have been adduced at trial, (2) be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial, (3) the evidence must be credible in that it is reasonably capable of belief, and (4) if believed it could reasonably, when taken with the other evidence, be expected to have affected the result (Palmer v. The Queen, [1980] 1 SCR 759). The plaintiff attempted to rely on evidence which had been adduced in a family action, but this was not allowed in part because it failed the first step of the above test as it was available at the time of trial. The Court also held that it failed the second criteria, and there was no compelling evidence that the property’s title holders ever intended to create a trust.
Ultimately, the defendants did receive the order they sought to have the plaintiff vacate the property, but this order was stayed until June 30, 2021. Although successful in litigation, the defendants have experienced a two-year delay in their efforts to sell their property despite allowing their adult daughter to live free-of-charge on their property for nearly 30 years.