“Ms. Draper contends that there was no “transfer” of property by Mr. Holtby to her, as both parties participated in the incorporation of Knapton, so the doctrine of resulting trust does not apply. She further asserts that her receipt of the Knapton shares was not gratuitous: first, because she gave consideration, when she paid the $100 subscription for her shares, and second, because Knapton (in which she was already a 50% shareholder) gave fair market consideration to Mr. Holtby when it purchased the farm property and other assets from him. In this sense, Mr. Holtby did not make any gratuitous transfer of property to Knapton. She contests the trial judge’s reliance on Paddock v. Paddock (2008), 78 R.F.L. (6th) 54 (Ont. S.C.), aff’d 2009 ONCA 264, 78 R.F.L. (6th) 69.
In Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 44, Rothstein J. explained that the trial judge must commence his or her inquiry with the applicable presumption and weigh all the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. When a gratuitous transfer is made, the transferee has the onus to demonstrate a gift was intended, to rebut the presumption of resulting trust: Pecore, at para. 24. The presumption of resulting trust applies to married spouses, except that where property is held in joint ownership, the presumption is that they intended to each own one half, in the absence of evidence to the contrary: Family Law Act, s. 14. The transferor’s intention at the time of the transfer is the critical consideration: Nishi v. Rascal Trucking Ltd., 2013 SCC 33, [2013] 2 S.C.R. 438, at paras. 2, 30 and 41. Evidence of intention that arises subsequent to a transfer must be relevant to the intention of the transferor at the time of the transfer. Its reliability must be assessed to determine weight, guarding against evidence that is self-serving or reflects a change in intention: Pecore, at para. 59; Andrade v. Andrade, 2016 ONCA 368, 131 O.R. (3d) 532, at para. 63.”