More Thoughts on Joint Accounts
As Madam Justice Greer said, a gift is not a kiss in the dark. Unlike the memory of a kiss, which fades in time, the giving of a gift has lasting consequences: Feeney's Canadian Law of Wills, 4th Edition (Lexis Nexis), p. 1.1, per Justice Greer in Schilthuis v. Ainold, [1991] O.J. No. 2212 (Gen. Div.) at p. 2 of 25.
There are two fundamental ways in which a person may make a gift. The first is, of course, by testamentary disposition and the second is by inter vivos gift. The question of validity is naturally paramount in the context of estate litigation matters. Consequently, once the intended gift has been challenged, unless there has been compliance with the appropriate legal requirements to perfect that type of gift, the transaction will be invalidated, no matter how clear the intention of the donor might otherwise be.
Generally speaking, the governing statement of law with respect to the ownership of money deposited in a joint account, when the money is deposited by one of the account holders only, is as set out by the Supreme Court of Canada in Niles v. Lake, [1947] 2 D.L.R. 248 at 254 (per Taschereau J.).
As such, the onus is on the recipient of the inter vivos gift to rebut the presumption of a resulting trust and, where the person is deceased, the presumption can only be met by providing the same convincing and unimpeachable corroborative evidence.
The decision of Mr. Justice Cullity in Cho Ki Yau Trust v. Yau Estate (1999), 29 E.T.R. (2d) 204 (Ont.Sup.Ct.J.), is an excellent illustration of how the Courts have dealt with the whole question of ownership of inter vivos gifts and joint accounts. The Court considered issues such as the ownership of the joint account in light of the lack of an express right of survivorship in the language of the bank's joint account agreement. Justice Cullity made it clear that, in circumstances such as this, the question of whether the son obtains a beneficial right to the funds on deposit depends upon the intention of his mother and that, for this purpose, the terms of the document provided by the bank for their signatures are of secondary importance. The Court made it clear that those documents really just determine the rights and obligations in respect of the bank.
In essence, the Court made it clear that where there is evidence that the original deposit of the funds was made by one of the individual joint account holders, in the absence of any evidence to the contrary, it must be presumed that the sole depositor was the beneficial owner of the funds. This circumstance, where the one individual deposits most, if not all, of the funds into the account and the other joint holder is there solely for the convenience and benefit of the depositor, is of course common in many family situations.
As for Episode 6 of our Hull on Estates Podcast on Testamentary Capacity, there was an interesting discussion of the question of whether or not one can have partial capacity, and we looked at the decision of Re Bohrmann [1938], 1 All. E. R. 271, where the Court considered this issue. In this case, one clause only of a Codicil was rejected on the ground of lack of testamentary capacity.
Suzana noted that the Re Bohrmann decision has been severely criticized and she referred to the Fulton v. Andrew (1875), L.R. 7, H.L. 448 decision, which seems to run contrary to the Re Bohrmann approach of essentially "splitting hairs" in the whole determination of testamentary capacity.
Ian noted the fact that the question of determining testamentary capacity is very much time-sensitive and the Courts are anxious to determine this issue with some real precision. In this regard, Suzana noted the important and leading decision of Parker v. Felgate (1883), 8 P.D. 171 at 173, where the Court examined circumstances where the testator may have had capacity at the time that he gave instructions but where there was a marked deterioration subsequently in his mental condition. In Parker v. Felgate, the Court said the test was as follows:
"I gave my solicitor instructions to prepare a Will making a certain disposition of my property. I have no doubt that he has given effect to my intention, and I accept the document which is put before me as carrying it out."
That is all for Episode 6 and for today's Blog ... Have a safe and happy weekend!
All the best, Suzana and Ian. --------
