All About Estates

When is a Gift not a Gift?

Styres v. Martin 2018 ONCA 956 is a case of a gift that unfolded a saga (not over yet and far from it) of diminished capacity, alleged breach of trust, breach of fiduciary duty, unjust enrichment, undue influence to name a few.

Mr. Styres lived in a house he built on land given by his father, for about 20 years, when in 1998, he suffered a very serious brain injury from a motorcycle accident and was unable to work. Mr. Styres began a relationship with Ms. Martin around 2000, and she ultimately became his caregiver. In 2002, he signed a Power of Attorney for Personal Care and for Property, naming Ms. Martin as his Attorney.

In 2004, Mr. Styres transferred the house to Ms. Martin. Ms. Martin paid off a $32,000 mortgage on the house to register the house in her name. Notably, the parties did not seek legal advice on any of this. In 2009, Ms. Martin granted a mortgage to her mother Janet, to secure a $200,000 loan from her.

In 2013, Mr. Styres and Ms. Martin separated. He requested that she re-convey title to the house to him. She did not do so, and shortly thereafter transferred the house to her mother in satisfaction of the mortgage, which had come due the year before. Her mother passed away in 2015, and the estate sold the house for $300,000.

At trial, Mr. Styres asserted claims for damages, breach of trust, breach of fiduciary duty and unjust enrichment against the estate and Ms. Martin. The evidence at trial focused on the parties’ explanations for the transfer of the house in 2004. Mr. Styres maintained he transferred the house ‘in trust”, because he was worried that it would be seized in an excise tax matter related to his selling unmarked cigarettes. The estate and Ms. Martin maintained that the house was an outright gift.

The trial judge favored Ms. Martin’s evidence. In brief reasons, he found that that she was generous and kind to Mr. Styres, gave him the proceeds of her caregiver cheques amounting to a couple of thousand dollars, purchased vehicles which he used, and helped him with child support and various bills, household expenses, and utilities. He concluded that this was “hardly predatory conduct of one person taking advantage of another vulnerable one”. He determined that there was no trust regarding the house without a written instrument in accordance with the Statute of Frauds.

Mr. Styres went to the Court of Appeal asserting that that the trial judge erred by failing to fully consider or address the various claims for breaches of trust and fiduciary duty, and unjust enrichment.

The Court of Appeal agreed, noting that this was a case of a disabled man, with a catastrophic brain injury and admitted cognitive difficulties, conveying his only significant asset to his caregiver and common law partner, who also held his power of attorney. He had no legal advice, let alone independent legal advice. The absence of a written document or instrument was not enough of an answer to his claim of resulting trust, nor did it have any relevance to the other claims made.

Accordingly, the appeal was allowed and the matter was remitted to the Superior Court of Justice for a new trial on all issues before a different judge.

Some painful lessons learnt (and to be learnt) in this not the least being that it never hurts as much when you seek professional advice.

Happy Reading

About Steven Frye
Baker Tilly WM LLP is a leading, independent audit, tax, and business advisory firm based in Vancouver and Toronto, serving clients across Canada. Drawing on well-trained teams across a variety of disciplines, we ensure the alignment of our professional’s skills and experience with client requirements, resulting in exceptional service and business outcomes.


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