“In Water’s Law of Trusts in Canada, at p. 362, a resulting trust is described as follows:
Broadly speaking, a resulting trust arises whenever legal or equitable title to property is in one party’s name, but that party, because he is a fiduciary or gave no value for the property, is under an obligation to return it to the original owner, or to the person who did give value for it.
In the recent decision of Drakoulakos v. Stirpe [2017] O.J. No. 2506, Perell, J. defined a resulting trust as follows at para. 46:
On the assumption that there is no substantive merit to the Defendants’ defence, the material facts in the immediate case constitute a claim for a resulting trust. A resulting trust arises when title to the property is in one party’s name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner: Pecore v. Pecore, 2007 SCC 17; Andrade v. Andrade, 2016 ONCA 368. In Kerr v. Baranow, 2011 SCC 10 [2011] 1 S.C.R. 269, at para. 12, Justice Cromwell stated that it has been settled since at least 1788 in England that the trust of a legal estate results to the person who advances the purchase money.
The concept of a purchase money resulting trust is described at para. 1 in the Supreme Court of Canada’s decision of Nishi v. Rascal Ltd, 2013 SCC 33 (CanLII), [2013] 2 S.C.R. 438 as follows:
A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of a property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust.”