This person didn’t want to spend money on Lawyers

(we are not the heathens we’re made out to be !)

Introduction

The ownership of land here in B.C. has become a legally complex topic. It may be simply the evolution of our law in this area.  Over the decades and centuries, various major cases (in England and Canada) have had their impact on our property law.  Consider also that our Land Title Act has almost 400 sections. 

Today, there are several ways ownership of land can be expressed.  For example, a person may have a beneficial interest in land (which is a legally recognized term) and that person’s name may not appear on the title.  In addition, the owner(s) shown on a title to land may not own the full interest in it, despite being on title.   Add to all this the recent changes in the taxation of land, including the vacancy tax, empty homes tax, and you have complexity!  

I still hear, with some regularity, from persons who want to discuss changing the title to their land in order to avoid exposure to Probate fees when they pass and their Wills need to go to Probate.   Though I understand the sentiment, this topic needs to be discussed on an ongoing basis because this kind of transaction is, on the whole, “underplanned” (I think that’s a word !), in my opinion. 

Earlier this month, reasons for judgment were delivered by the BC Supreme Court in a case called Sandwell v. Sayers.  This case provides a good example of a transaction gone wrong.

Facts

The Plaintiff is a 91 year old Widower and the Father of two adult children.  In 2008, he signed a transfer document, under which he transferred his home to his son.   Those documents were never registered.  They were found in November, 2020 by the Plaintiff’s daughter.  A note on the transfer document said that it was not to be registered without the Plaintiff’s consent or his loss of health.  

The daughter gave evidence that she brought the documents to her Father’s attention but he did not remember them.   She advised him to see a Lawyer but he said he’d already spent enough money on Lawyers.  Instead, he went to a Notary Public.  The Plaintiff Father wanted to now transfer a partial interest in the house to his daughter, such that she would receive the entire house on his death.  With some hesitation, the Father ultimately decided to do the transfer.   He also signed a Deed of Gift.   This document is a written expression of the intention of the person transferring, that they indeed want to make a gift of the interest in the property.

The transfer was done in December, 2020.  The daughter became a joint

tenant registered owner of the property with her Father.  Not long after, the Father wanted to annul the transfer and take back full title to the property.   The daughter opposed.

Court’s Decision

The Court was confronted with a claim by the Father under a doctrine called “Unconscionable Procurement” as well as the better known doctrine of “Unjust Enrichment”.  In general, the Plaintiff argued he was not fully informed when he made the transaction.

The Court noted that even the Plaintiff agreed that, with the Deed of Gift having been made, there was no undue influence.

With regard to the Unconscionable Procurement, the Court held that this doctrine overlaps with legal doctrines we already have in BC, namely, Undue Influence and Resulting Trust.   The Court concluded that in any event, no undue influence existed here from the daughter.   Furthermore, the Court felt that the Plaintiff did not provide enough evidence to show that he misunderstood what he was doing and he also did not indicate what was his motive or intention in looking to set aside the transfer.   The Notary he saw did tell the Plaintiff to give more thought to what he wanted and the Plaintiff did that.

Finally, on the Unjust Enrichment aspect, the Deed of Gift nullified a claim pursuant to this legal principle. 

The Court held that the transfer was valid.   The daughter remained a joint tenant owner of the property.

Conclusions

The Court noted the difficulty of this case, being between two members of a family.   However, the case strongly suggests the urgency of discussion and consideration when looking at this kind of transaction involving title to property.   Note that the Father in this case now has to declare on his 2022 tax return that he transferred his title.   That “flags” his file with CRA.  His daughter, now a joint owner, may in future be subject to a capital gain, being a registered owner of property that is not her principal residence.  Also, the transaction will not likely be able to be challenged by the Plaintiff’s son (if that is ever sought).  It is not clear from the reasons here, whether the Father really wanted his property to go fully to his daughter upon his death, despite signing the documents to put that in place.  Perhaps spending the money on a Lawyer may have been helpful in this case (not to criticize the Notary, who appears to have done a good job here) but readers should consider this case when looking to take similar steps with their own properties.