Estate Planning

Taking "Gifts": The Very High Burden on Attorneys for Property to prove Gifts

By Hull & Hull LLP

Attorneys for property who receive gifts from grantors tomorrow will have to give them back, unless they have good evidence supporting the fact of the gift.  The rule that fiduciaries (including attorneys for property) must prove purported gifts is stated in Cooke v. Lamotte(1851), 15 Beav. 234 at page 239.

Justice Sheard applied this rule in Kee v. Yip [1995] O.J. No. 2879, disallowing a series of transfers by an attorney to himself, stating with respect to one such transfer, 'The burden on Tom Kee to show that his mother gave him the $20,000 is a heavy one. His evidence, simply the assertion that this transaction, one of many that he did under power of attorney, was intended by her as a gift to him falls well short of discharging that burden of proof. Under the principle stated in Cooke v. Lamotte, supra, the $20,000 cannot be allowed as a gift and must be refunded." 

Even more recently, in Volchuk v. Kotsis, 2007 CanLII 28527 (ON S.C.) Justice Langdon disallowed a series of purported gifts (cheques and money transfers) effected by an attorney, noting in addition that attorneys were precluded from relying solely on their own evidence by section 13 of the Ontario Evidence Act, which provides that the claimant 'shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.' 

In estates litigation, this rule is very useful in passings of accounts initiated pursuant to section 42 of the Sustitute Decisions Act by disappointed beneficiaries of an estate against the deceased's former attorney for property.  Of course, this rule forms part of the Common Law and is not confined to passing of accounts proceedings.

Merry Christmas to fiduciaries including attorneys, and enjoy your presents.

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

Full post as published by Toronto Estate Law Blog on December 24, 2009 (boomark / email).