Denbow v. Leong

In a recent case, Denbow v. Leong, 2007 BCSC 1400, the Supreme Court of British Columbia held that when John Denbow transferred his condominium into a joint tenancy with his then common-law spouse, Wendy Leong, he made a gift. After Mr. Denbow and Ms. Leong had separated, Mr. Denbow asked Ms. Leong to transfer the title back into his sole name. When she refused, Mr. Denbow sued her.

Mr. Denbow’s evidence was that he transferred the title into joint names with Ms. Leong so that she could represent him on the strata council. He argued that there is a presumption of that Ms. Leong held an interest on the property on a resulting trust for him.

When one person transfers property into another’s name gratuitously, in British Columbia there is a presumption that the transferor did not intend to make a gift. This is called the presumption of resulting trust. When this presumption is applied, the court holds that the recipient of the title holds the title in trust for the transferor. This presumption applies to most relationships, with the exception of transfers between married spouses.

Because the presumption of resulting trust is just that-—a presumption—the recipient may keep the property if she satisfies the court that the transfer was a gift.

Ms. Leong said that before she moved in to the condominium with Mr. Denbow, he said he loved her. She understood that he transferred a half-interest in the condominium as a demonstration of his love.

Madam Justice Brown considered the evidence of the notary public who handled the transfer as well as the transfer document. The transfer document said that the consideration was “$1.00 and natural love and affection.” The notary public had no independent recollection of the transfer, and no longer had the file. She testifies that she only uses the words “natural love and affection” if the parties are in a relationship. She also said that if Mr. Denbow had told her that he wanted to transfer an interest in the title so that Ms. Leong could sit on the strata council, she would have recommended that he transfer a one-percent interest, instead of a half interest.

Madam Justice Brown also considered the fact that when Ms. Leong stopped sitting on the strata council, Mr. Denbow did not ask for the title to be transferred back until several years later.

My sense is that the courts may more readily find a gift when dealing with transfers of real estate than with joint bank accounts. Although the presumption of resulting trust may apply in both cases, one person may contribute funds to a joint account with another purely for the convenience of allowing the other to assist with banking. For example, a parent may set up a joint account with a child so that the child can use the account if necessary to help the parent pay bills. With real estate, it is generally not convenient to have the property in two names. In fact it is less convenient. If the property needs to be sold or mortgaged, both owners must sign the documents to transfer title or register a mortgage.