Balkisson v. Sandy: Unraveling Resulting Trusts and Inheritance Gifts in Ontario Family Property Disputes

Case Analysis: Balkisson v. Sandy (2025 ONSC)

Introduction

The case of Balkisson v. Sandy (2025 ONSC, January 14, 2025) addresses a family dispute over the ownership of a residential property, raising critical questions about resulting trusts and gifts in the context of gratuitous property transfers between a parent and adult children. The applicant, Veronica Ann Balkisson, sought a declaration that her son, Stefan Sandy, held title to a property at 78 Lambeth Street, Brampton, as a bare trustee for her under a resulting trust. Stefan and his wife, Andrea, argued that Veronica gifted the property to Stefan and his sister, Heaven, as an early inheritance, and that Veronica’s attempt to reclaim it stemmed from a deteriorated relationship with Andrea. The court, presided over by Justice L. Brownstone, dismissed Veronica’s application, finding that Stefan rebutted the presumption of resulting trust and established the property as a gift. This analysis explores the facts, legal framework, judicial reasoning, and lessons from the case.

Summary of Facts

Veronica Ann Balkisson, the mother of four living children and one deceased, funded the $905,000 purchase of a property at 78 Lambeth Street, Brampton, in March 2024, with title registered in her eldest son Stefan’s name. The funds came from the expropriation of Veronica’s Wheatley property, which yielded $1,267,931.32, and the sale of another property (Thamesville). Veronica claimed Stefan held the property as a bare trustee for her, intending it as a family home for all her children, with control retained by her. She sought to have the title transferred to her name, citing a resulting trust.

Stefan, supported by his wife Andrea, argued that Veronica gifted the property to him and his youngest sister, Heaven, as an early inheritance. He claimed Veronica intended to distribute $420,000 to each of her children (Stefan, Heaven, and Ricky) from the Wheatley proceeds, as outlined in a handwritten will dated February 12, 2024, and reflected in text messages. Since Heaven was a minor at the time of purchase, the property was registered solely in Stefan’s name, but he maintained it was beneficially owned equally by him and Heaven. The relationship between Veronica and Andrea soured after the family moved into the property in May 2024, culminating in a significant argument on May 23, 2024, after which Veronica sought to reclaim the property. She amended her will on May 29, 2024, listing the Lambeth property as her asset and alleging Stefan failed to honor his trustee obligations.

Key evidence included text messages between Veronica, Stefan, and Heaven, which referred to the funds as an “inheritance gift” and outlined a repayment plan for $79,000 (the amount exceeding the $840,000 allocated for Stefan and Heaven). Veronica’s actions, such as moving furniture to the property and expressing intent to live there after an assault by her ex-boyfriend, were contested as evidence of her ownership intent. The court ordered viva voce cross-examinations to assess credibility, given the conflicting affidavit evidence.

Governing Law

The case is governed by the principles of resulting trusts and gifts as articulated in Pecore v. Pecore, 2007 SCC 17, and subsequent cases like Pandke Estate v. Lauzon, 2021 ONSC 123, and McNamee v. McNamee, 2011 ONCA 533. Key legal principles include:

• Presumption of Resulting Trust: When a parent gratuitously transfers property to an adult child, a resulting trust is presumed, meaning the child holds the property in trust for the parent unless the presumption is rebutted (Pecore, para. 24). The child bears the burden of proving, on a balance of probabilities, that the parent intended the transfer as a gift (Pecore, para. 43).
• Rebutting the Presumption: To rebut the presumption, the child must demonstrate the parent’s actual intention at the time of transfer was to make a gift (Pecore, para. 55). Evidence post-transfer may be considered if it is relevant to the transferor’s intent at the time but must be scrutinized for reliability and to avoid self-serving claims or evidence of a change in intention (Pecore, para. 59).
• Elements of a Gift: A valid gift requires: (1) the transferor’s intention to make a gift, (2) acceptance by the transferee, and (3) a sufficient act of transfer (Pandke Estate, para. 10; McNamee, para. 27). In this case, only the intention was disputed, as acceptance and transfer were conceded.
• Irrevocability of Gifts: Once a gift is validly made, it cannot be revoked, even if the donee fails to meet the donor’s expectations (Abdollahpour v. Banifatemi, 2015 ONCA 834, para. 36).
• Evidence and Credibility: Courts assess contemporaneous evidence (e.g., text messages, documents) and viva voce testimony to determine intent, with credibility playing a significant role in conflicting accounts (Pecore, para. 55).

Analysis

Justice Brownstone’s decision hinged on determining Veronica’s intention at the time of the March 2024 property transfer, guided by Pecore. The court found that Stefan rebutted the presumption of resulting trust, establishing that Veronica intended to gift the Lambeth property to Stefan and Heaven as equal beneficial owners. The analysis focuses on the court’s reasoning and evidence.

• Contemporaneous Evidence and Text Messages:
  The court placed significant weight on text messages from February to March 2024, which consistently referred to the funds as an “inheritance gift” (e.g., March 13, 2024: “it is going in your name as an inheritance gift for you and Heaven”). These messages aligned with Veronica’s February 12, 2024, handwritten will, which allocated $420,000 to each child, supporting Stefan’s claim that the $840,000 (for Stefan and Heaven) was a gift. The repayment plan for the $79,000 overage, with no repayment obligation for the $840,000, further corroborated the gift intention, as noted in Barber v. Magee (2017 ONCA 558, para. 4), where the absence of repayment expectations indicates a gift.
• Post-Transfer Evidence and Change of Intention:
  Veronica’s attempt to reclaim the property followed her May 23, 2024, argument with Andrea and was formalized in her amended will on May 29, 2024. The court rejected this as evidence of her original intent, citing Pecore (para. 59) and Abdollahpour (para. 36), which caution against post-transfer evidence reflecting a change in intention. The May 29 will was deemed an attempt to retract the gift after family relations soured, not a reflection of Veronica’s March 2024 intent.
• Credibility Assessments:
  The court found Stefan credible, noting his consistent testimony and alignment with documentary evidence. Conversely, Veronica and Heaven were deemed unreliable. Veronica’s claim that she intended to live at the property was undermined by her failure to move, inconsistent explanations (e.g., winter as a barrier despite the May closing), and lack of a designated bedroom for her. Her assertion that she needed legal documentation for a gift but not for a trust was deemed illogical. Heaven’s evasive responses (e.g., dismissing clear gift references as “poorly worded”) further weakened their case.
• Rebutting the Presumption:
  Stefan met the Pecore burden by proving, on a balance of probabilities, that Veronica intended a gift. The court’s findings were supported by:
  • Text messages explicitly calling the transfer a gift.
  • The repayment structure for only the overage, consistent with a gift of $840,000.
  • Veronica’s references to the funds as her children’s money, not hers.
  • The plan for Stefan and Heaven to live in the property, sell it, and split proceeds, inconsistent with a trust.
• Veronica’s Counterarguments:
  Veronica’s arguments were unpersuasive:
  • Her claim of intending to live at the property lacked corroboration, as furniture storage was linked to cost-saving, not residency.
  • Her assault by her ex-boyfriend, while serious, did not alter her gift intention, as she remained in her residence.
  • The amended will was post-transfer and irrelevant to March 2024 intent.
  • A prior court endorsement suggesting Stefan claimed full ownership was explained as a misunderstanding due to new counsel, not affecting his credibility.

Lessons Learned

• Importance of Clear Documentation: The absence of formal legal documentation (e.g., a trust agreement or gift declaration) led to ambiguity and litigation. Families making significant transfers should consult lawyers to draft clear agreements to avoid disputes over intent.
• Contemporaneous Evidence is Critical: Text messages and wills drafted at the time of transfer were pivotal in proving intent. Parties should preserve and document communications reflecting their intentions to strengthen their position in potential disputes.
• Irrevocability of Gifts: Once a gift is completed (intent, acceptance, transfer), it cannot be revoked, even if relationships deteriorate or expectations are unmet (Abdollahpour). Donors must be certain of their intent before transferring property.
• Credibility Matters: Courts heavily weigh credibility in trust disputes, especially with conflicting accounts. Consistent, straightforward testimony aligned with documentary evidence enhances a party’s case.
• Legal Advice for Minors: The inability to register the property in Heaven’s name due to her age highlights the need for legal structures (e.g., trusts) to protect minors’ interests in property transactions.
• Family Dynamics and Estate Planning: Intra-family transfers can lead to disputes when relationships sour. Professional estate planning can mitigate risks by clarifying intentions and avoiding reliance on informal arrangements.

Conclusion

Balkisson v. Sandy reaffirms the Pecore framework for resolving disputes over gratuitous transfers, emphasizing the presumption of resulting trust and the burden on the transferee to prove a gift. The court’s reliance on contemporaneous text messages, credibility assessments, and the irrevocability of gifts led to the dismissal of Veronica’s application. This case underscores the need for clear documentation, legal advice, and caution in family property transfers to prevent costly litigation.