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Gifts - Elements. Falsetto v. Falsetto
In Falsetto v. Falsetto (Ont CA, 2023) the Court of Appeal considered authority on gifts and resulting trusts:[27] Next, the trial judge considered whether the transfers from Salvatore to Sam were gifts. In deciding this matter, the trial judge relied on Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, in which the Supreme Court held that when a parent gratuitously transfers property to their adult child, the law presumes that the child holds the property on resulting trust for the parent. To rebut the presumption, the adult child must proffer clear, convincing, and cogent evidence that: (1) the parent intended to make a gift of the property to the child, (2) the child accepted the gift, and (3) a sufficient act of delivery or transfer of the property occurred to complete the transaction.
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[45] Pecore provides that when a parent gratuitously transfers property to their adult child, the law presumes that the child holds the property on resulting trust for the parent. That is, the law presumes the child is a fiduciary. However, the presumption can be rebutted in whole or in part. So, for example, in Pecore, the presumption was rebutted in part because the court found that the father had added his adult daughter as a joint account holder with the intention of gifting to her the right of survivorship.
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[62] I do not accept this submission. The trial judge’s findings are a full answer to it. For the gifts of property, delivery occurred when Sam took title to the properties and, for the gifts of money, as the trial judge stated, “the cashing of the cheques or bank drafts are tangible proof that the gifts were delivered to Sam”: see Teixeira v. Markgraf Estate, 2017 ONCA 819, 137 O.R. (3d) 641, at para. 46. . Teixeira v. Markgraf Estate
In Teixeira v. Markgraf Estate (Ont CA, 2017) the Court of Appeal set out the elements of a "gift":[38] The three elements of a legally valid gift identified by the application judge and referred to at para. 10, above, are well established: (1) an intention to make a gift on the part of the donor, without consideration or expectation of remuneration; (2) an acceptance of the gift by the donee; and (3) a sufficient act of delivery or transfer of the property to complete the transaction: McNamee v. McNamee, at para. 24. All three requirements are essential: Mary Jane Mossman & William F. Flanagan, Property Law: Cases and Commentary, 2nd ed. (Toronto: Emond Montgomery Publications Limited, 2004), at p. 441. . Teixeira v. Markgraf Estate
In Teixeira v. Markgraf Estate (Ont CA, 2017) the Court of Appeal focusses on the element of 'delivery':[39] The first two elements are not at issue on this appeal. The central issue here is whether the delivery of the cheque for $100,000 into the hands of the appellant could be a sufficient act of delivery of the gift. The wrinkle in this case is that there were insufficient funds in Mary’s account.
Delivery
[40] The delivery requirement has been a part of the modern law of gifts since the seminal case of Irons v. Smallpiece (1819), 2 B. & A. 551. The delivery requirement is an important distinguishing feature of gifts as compared to other methods of transferring property, such as by contract. As Mossman and Flanagan note in Property Law: Cases and Commentary, at p. 442:The delivery requirement marks an important difference between contract law and the law of gifts. A contract involves an exchange of promises. A gift, a unilateral promise, does not. Contract law will enforce an exchange of promises (a “bargain” promise) with expectation damages. On the other hand, the law of gifts attaches no significance to a unilateral promise to pay in the absence of delivery. [41] The delivery requirement in the law of gifts continues to serve several important functions. It forces a would-be donor to consider the consequences of their expressed intention to make a gift and it furnishes tangible proof that a gift has in fact been made: see Bruce Ziff, Principles of Property Law, 6th ed. (Toronto, Thomson Reuters, 2014), at pp. 161-2. See also: Philip Mechem, “The Requirement of Delivery in Gifts of Chattels and of Choses in Action Evidenced by Commercial Instruments” (1926) 21 Ill. L. Rev. 341, at pp. 348-352.
Indicia of delivery
[42] The most obvious form of delivery is the actual physical transfer of the subject matter of the gift from the donor to the donee such that the gift is literally given away: see Ziff, at p. 161.
[43] However, in certain circumstances, such as where the item is unwieldy, courts have acknowledged that constructive delivery will suffice. In these cases, the critical questions have been whether or not the donor retained the means of control and whether all that could be done had been done to divest title in favour of the donee: see Ziff, at p. 165.
[44] Ultimately, in order for a gift to be valid and enforceable, the donor must have done everything necessary and in his or her power to effect the transfer of the property: Kavanagh v. Lajoie, 2014 ONCA 187 (CanLII), 317 O.A.C. 274, at para. 13.
Gifts by cheque
[45] A gift of cash can be readily effected by delivery to the donee. ...
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