I previously blogged about the presumption of resulting trust, which applies to gratuitous transfers between a parent and an adult child (equity presumes a bargain, and not a gift). Rebutting the presumption of resulting trust (i.e. proving that the parent intended to make a gift to the adult child) often comes down to a matter of credibility – can the witness be believed?
The British Columbia Court of Appeal has recently reminded us that there are no fixed rules for weighing the evidence submitted, especially when it comes to making a determination of credibility.
In Franklin v Cooper, a dispute arose between two sisters over their mother’s home. The mother was predeceased by her husband and her third daughter, Shirley. In 1989, the mother transferred a half interest in her home to one of her daughters, Patricia, such that the mother and Patricia became joint tenants. The mother died in 2012, and her other daughter, Leslie, commenced a claim asserting that Patricia held the home in trust for their mother’s estate.
Patricia submitted that the transfer of title was in consideration of Patricia having paid for her mother’s living expenses in the past, and in consideration of Patricia’s promise to pay for her mother’s living expenses in the future. However, Leslie argued that their mother’s decision to transfer half of the interest in the home was to protect the property from theft or fraud.
The trial judge assessed the evidence and testimonies of the parties and their families, including those of Leslie’s husband and her children, as well as Shirley’s children. The trial judge ultimately agreed with Leslie and found no evidence that an agreement between the mother and Patricia existed. As well, the trial judge found that at the time of the transfer of title, and continuing to her death, the mother’s intention was that Leslie, Patricia and Shirley’s daughters would inherit the property.
Applying Pecore v Pecore, which confirms the presumption of resulting trust, the trial judge found that the transfer of title was gratuitous, and declared that Patricia held the property in trust for the estate. In coming to her decision, the trial judge noted that the issues before her turned largely on assessing the credibility of the parties. Overall, the trial judge preferred the evidence of Leslie and other family members to that of Patricia and that of one of Shirley’s children.
Patricia appealed the trial judge’s decision, arguing that the trial judge made palpable and overriding errors of fact, which led to erroneous findings of credibility. Patricia’s counsel referred to the inconsistencies in the testimonies of Leslie and her family members that might have led the trial judge to draw a different conclusion.
The Court of Appeal dismissed Patricia’s appeal. In coming to its conclusion, the Court of Appeal noted that the trial judge had referred to the contradictions in the evidence provided by both parties, and had also “meticulously” explained why, despite some inconsistencies, she found Leslie to be more credible.
Citing the Supreme Court of Canada’s decision in Housen v Nikolaisen, the Court of Appeal noted that it would not interfere with the trial judge’s finding of fact unless there was misapprehension of evidence, or a palpable and overriding error. The Court of Appeal concluded that the trial judge had not made a palpable and overriding error, and that the trial judge’s decision was supportable on the evidence.
The Court of Appeal noted that “particularly in divisive litigation between members of a family,” it is common for parties to provide different versions of events. As well, the Court noted that it is “not unusual for there to be minor internal inconsistencies” in a person’s evidence, and that inconsistencies can vary in their nature and importance.
In the language of the British Columbia Court of Appeal, “credibility issues are the exclusive province of the trial judge.” It is important to remember that heavy deference is given to a trial judge’s assessment of creditability, and an appeal court will rarely interfere with a judge’s findings of fact.