A property was registered in the name of M.  L had wanted to buy the property but she did not qualify for a mortgage.  M assisted her through a mortgage broker and L lived in the property, making the monthly mortgage payments and all other costs to maintain the house.  L was considered a tenant.

After a number of years, M advised L that her tenancy was at an end and that the property was to be sold.  The value of the property had increased substantially.

L sued M, who maintained that the property was purchased as an investment with the intent to rent it to their son.  The son did not agree with that plan and M therefore rented it to L.

The court believed L over M and imposed on M a resulting trust in favour of L.  All this heartache and costs could have been avoided by a written record of L’s contributions by way of intent to purchase, and M’s intent to assist by taking registration and acting as a “bare” trustee in the case.

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In another case, a 79-year-old woman sued her solicitor.

The plaintiff had transferred her interest in property to a foundation, preserving a life interest to live in property for her and her husband.  She also received a $318,000 tax credit for the conveyance, which she took to her accountant.

Eight years later, the woman sued, saying she only just learned she no longer owned the property.  She alleged the lawyer merely asked her to sign a paper that she thought was a testamentary gift. The solicitor gave evidence that he completely reviewed the transfer with the plaintiff and the accountant gave evidence that the plaintiff was pleased with transfer and its tax consequences.

Although the plaintiff was 79-years-old, the court found that she was intelligent and fully functional. Her mind was sharp and she understood she was making a gift of her property and receiving a “substantial tax benefit” in return.

You can conclude from the ruling that the trial judge looked carefully at the plaintiff’s credibility, which did not stack up against the lawyer and the accountant.

Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.