“Further, at the application hearing, Ian advanced a resulting trust claim concerning his repayment of Victoria’s indebtedness under the joint line of credit. As I have already mentioned, the application judge concluded that a presumption of resulting trust did not arise in Ian’s favour because, in his view, a presumption of resulting trust can apply only on the purchase or transfer of property, and not to a post-purchase reduction of liabilities associated with the purchase or transfer of property.
As I see it, there are several difficulties with the application judge’s analysis of this issue.
First, Ian’s repayment of the $1 million line of credit, established to facilitate the purchase of the Brookdale property, was gratuitous and directly linked to the acquisition of the house. The Supreme Court emphasized in Kerr, at paras. 18 and 19, citing its earlier decision in Pecore v. Pecore, [2007] 1 S.C.R. 795, [2007] S.C.J. No. 17, 2007 SCC 17, at paras. 43-44 and 24, that in situations involving gratuitous transfers, as in this case, the governing consideration is the transferor’s actual intention. The intention of the transferor alone counts, as “[t]he point of the resulting trust is that the claimant is asking for his or her own property back”: Kerr, at para. 25. As Rothstein J. explained in Pecore, at para. 44, in such cases,
The trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention.
(Emphasis added) [page 716]
See, also, Andrade v. Andrade (2016), 131 O.R. (3d) 532, [2016] O.J. No. 2553, 2-2016 ONCA 368, at paras. 62 and 67. Further, it is the transferor’s actual intention at the time of transfer that is the critical consideration: Nishi v. Rascal Trucking Ltd., [2013] 2 S.C.R. 438, [2013] S.C.J. No. 33, 2013 SCC 33, at paras. 2, 30 and 41.
Kerr also instructs that, when a gratuitous transfer is made, the transferee bears the onus of demonstrating that a gift was intended. Failing such a demonstration, the transferred property is deemed to be held in trust by the transferee for the transferor, as beneficial owner.”