“Where one person transfers money to another in circumstances where the payor is not indebted to the payee or where no presumption of advancement arises, once the transfer is proved, the burden then falls on the recipient of the money to show that it was not repayable. Rothstein J. in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at paras. 24 and 25 explained:
The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: see Waters’ Law of Trusts, at p. 375, and E. E. Gillese and M. Milczynski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.
The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of a resulting trust.
Also see MacIntyre v. Winter, 2021 ONCA 516, 2021 CanLII 516 (Ont. S.C.), at para. 18.
Thus, the onus is on the defendant to establish on a balance of probabilities that the money transferred to her is a gift. Common-law relationships or romantic friendships do not give rise to a presumption of gift: Zachariadis Estate v. Giannopoulos, 2019 ONSC 6505, 2019 CanLII 6505 (Ont. S.C.), at para. 68. The court must look at all the circumstances to see if the requirements of a gift have been met. Three requirements are necessary to establish a valid gift inter vivos: (i) an intention to donate; (ii) a sufficient act of delivery; and (iii) acceptance of the gift.
As stated by the Court of Appeal in Chechui v. Nieman, 2017 ONCA 669, 136 O.R. (3d) 705, at paras. 59-60, the onus is on the recipient of the money to show that the transferor intended at the time of the transfer that the monies be a gift:
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 in Chechui v. Neiman.]
More recently in MacIntyre v. Winter, the Court of Appeal again asserted that the onus is on the recipient, in this case the defendant, to establish on a balance of probabilities that the transferor intended for the monies to be a gift. After quoting from the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10, [2011] S.C.R. 269, Nordehimer J.A. stated:
On this point, the nature of the onus or burden that rests on Ron, in terms of rebutting the presumption, is the civil standard of a balance of probabilities. In other words, Ron must establish, on a balance of probabilities, that it was Alex’s intention to gift these monies: Pecore, at para. 43. The standard of proof on a balance of probabilities requires “clear, convincing and cogent” evidence: F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 46.
Further, it is the transferor’s actual intention at the time of transfer that is the critical consideration: Nishi v. Rascal Trucking Ltd., 2013 SCC 33, [2013] 2 S.C.R. 438, at paras. 2, 30, and 41.
In Barber v. Magee, 2015 ONSC 8054, 2015 CanLII 8054 (Ont. S.C.), aff’d 2017 ONCA 558, [2017] O.J. No. 3409 (C.A.), Fitzpatrick J. set out a list of the factors to assess in determining whether the advancement of a sum of money is a gift or a loan. He stated at para. 42:
The courts in British Columbia have been helpful in suggesting factors to look to when determining a resulting trust claim. The British Columbia Supreme Court recently reviewed the caselaw in Byrne v. Byrne, 2015 BCSC 318, 57 R.F.L. (ih) 215. The Court in Byrne referenced the factors adopted by their Court of Appeal that ought to be reviewed when determining whether a gift or loan was intended: see Kuo v. Chu, 2009 BCCA 405, 180 A.C.W.S (2d) 903, citing Locke v. Locke, 2000 BCSC 1300, [2000] B.C.J. No. 1850. Those factors are as follows:
a. Whether there were any contemporaneous documents evidencing a loan;
b. Whether the manner for repayment is specified;
c. Whether there is security held for the loan;
d. Whether there are advances to one child and not others or advances on equal amounts to various children;
e. Where there has been any demand for payment before the separation of the parties;
f. Whether there has been any partial repayment; and,
g. Whether there was an expectation or likelihood of repayment.”