“The Supreme Court of Canada summarized as follows the principles applicable to a “purchase money resulting trust” in Nishi v. Rascal Trucking Ltd., 2013 SCC 33 at paras. 1-2 (“Nishi”):
A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of 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.
The presumption can be rebutted by evidence that at the time of the contribution, the person making the contribution intended to make a gift to the person taking title. While rebutting the presumption requires evidence of the intention of the person who advanced the funds at the time of the advance, after the fact evidence can be admitted so long as the trier of fact is careful to consider the possibility of self-serving changes in intention over time. [Emphasis in the original.]
When there is no evidence of a gratuitous transfer, the presumption of resulting trust does not apply: see Gill v. Gill, 2022 ONSC 4610 at para. 33.
As stated above, if the presumption of resulting trust applies, it can be rebutted by evidence that at the time of the contribution, the person making the contribution intended to make a gift to the person taking title. There is a gift at law when the evidence demonstrates that, at the time of the transfer, the transferor intended the transferee to hold the beneficial interest in the property being purchased: see Nishi at para. 37. A contribution to the purchase price without any intention to impose conditions or requirements is a legal gift: see Nishi at para. 31.
The courts have developed a list of relevant factors to consider when determining whether advances from parents to children constitute a loan or a gift. The following factors have been identified:
a. whether there are any contemporaneous documents evidencing a loan;
b. whether the manner of 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 of unequal amounts to various children;
e. whether 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 any expectation, or likelihood, of repayment.
See Locke v. Locke, 2000 BCSC 1300 at para. 20 and Chao v. Chao, 2017 ONCA 701 at para. 54.”