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Trusts - Resulting Trusts (4). Lalli v. Lalli
In Lalli v. Lalli (Ont CA, 2026) the Ontario Court of Appeal reviews the law of 'resulting trusts':[25] The common law doctrine of resulting trust is a complex body of law of ancient origin. In Bosanac v. Commissioner of Taxation, [2022] H.C.A. 34 (Austl. H.C.), 405 C.L.R. 37, Gordon and Edelman JJ. of the High Court of Australia prefaced their comprehensive survey of the doctrine by noting, at para. 92, Cromwell J.’s warning that “there is not much one can say about resulting trusts without a well-grounded fear of contradiction. There is debate about how they should be classified and how they arise, let alone many of the finer points”: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 16.
[26] For the purposes of this appeal, however, it is not necessary to wade into the finer points of doctrine. As will be explained, the appeal must be allowed because of the trial judge’s error in deciding that the evidence of Mr. Nanda was not relevant to deciding the resulting trust claim.
[27] Nevertheless, it will be useful to set out a few basic principles.
[28] There are many categories of resulting trust. This appeal concerns what is required to establish a purchase money resulting trust - a trust created when a transferor contributes purchase money towards the purchase of an asset without taking legal title and with the intention to take a beneficial interest.
[29] To establish the purchase money resulting trust in this case, the appellants ask the court to apply a presumption of resulting trust. This is the presumption that where a person pays the whole or a part of the purchase price of property, that person is presumed to have declared a trust over the property. In support, the appellants rely particularly on Nishi v. Rascal Trucking, 2013 SCC 33, [2013] 2 S.C.R. 438, at para. 1:A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust. [30] It should be noted that this statement from the opening paragraph of Rascal Trucking functions in the reasons for judgment as an overview or introductory statement that is further developed and qualified over the course of the judgment. It should not be taken as a comprehensive statement of doctrine, and in particular should not be taken as standing for the proposition that courts are to presume a resulting trust without first assessing the evidence of the transferor’s intent.
[31] In Rascal Trucking, Rothstein J. did not purport to depart from his earlier reasons in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, where he emphasized, at para. 5, that what matters in the analysis is the “actual intention of the transferor”. The presumption only arises, because it is only necessary, in situations where evidence of the transferor’s intention is unavailable or uninformative.
[32] As LaForme J.A. set out in Saylor v. Brooks (2005), 2005 CanLII 39857 (ON CA), 261 D.L.R. (4th) 597 (C.A.), 203 O.A.C. 295, at para. 24, aff’d 2007 SCC 18, [2007] 1 S.C.R. 838:Reliance on the presumptions has diminished because the courts are now examining all the evidence to determine the transferor’s intent. That is to say, courts are tending to examine the evidence in its entirety, and base findings regarding intention on all the facts. It will only be where the evidence itself is unclear that reliance on presumptions becomes necessary. [33] As set out above, the appellants argue that as they advanced the funds for the purchase but did not take title, the presumption arises, and the onus then rests on the respondents to marshal evidence to rebut it. The respondents counter that the presumption does not arise, because on the evidence accepted by the trial judge, the intention of the appellants was not to create a trust but to satisfy a debt.
[34] Although the appeal was argued over the application of the presumption, the operation of the presumption does not actually arise on the facts that were established before the trial judge. The presumption is not needed by the appellants to advance their claim in any event.
[35] Whether a presumption of resulting trust arises is determined on a factual inquiry: Falsetto v. Falsetto, 2024 ONCA 149, 171 O.R. (3d) 448, at para. 18; Holtby v. Draper, 2017 ONCA 932, 138 O.R. (3d) 481, at para. 53; Schwartz v. Schwartz, 2012 ONCA 239, 349 D.L.R. (4th) 326, at para. 43; Saylor v. Brooks, at paras. 24-25. The facts of a case give rise to one of three scenarios.
[36] First, where a plaintiff has led evidence to establish an objective intention on the part of the person who provided all or some of the purchase price to hold an equitable interest in the property, there is then a case for the defendant to meet: Falsetto, at para. 18; Schwartz, at para. 43; Andrade v. Andrade, 2016 ONCA 368, 131 O.R. (3d) 252, at para. 67; Nussbaum v. Nussbaum (2004), 2004 CanLII 23086 (ON SC), 9 R.F.L. (6th) 455 (Ont. S.C.), at paras. 20, 32; Bosanac, at para. 108. In this circumstance, there is no need to resort to an evidential presumption: Andrade, at para. 61; Pisarski v. Piesik, 2019 BCCA 129, 23 B.C.L.R. (6th) 312, at para. 46.
[37] A presumed intention to create a resulting trust could add nothing to the case and would serve no purpose. There is a case to meet, and the defendant can meet it through objective evidence that at the time of the transfer the transferor did not intend to take a beneficial interest in the property.
[38] Second, if the plaintiff’s evidence instead establishes an objective intention inconsistent with a resulting trust, then there is no case for the defendant to meet: Bosanac, at para. 109. Again, the presumption does not arise.
[39] The presumption of resulting trust only arises on a third scenario: where the evidence led by the plaintiff is “unpersuasive”, “neutral, truly equivocal, non-existent or uninformative” of the transferor’s objective intentions at the time of the transaction: Pecore, at para. 23; Bosanac, at para. 110; Saylor, at para. 24; Wu v. Sun, 2010 BCCA 455, 91 R.F.L. (6th) 24, at para. 18; Sidney N. Lederman, Michelle K. Fuerst, & Hamish C. Stewart, Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 6th ed. (Toronto: LexisNexis Canada, 2022) at § 4.51. It is only where there is an absence of evidence of the transferor’s actual intentions – most commonly where the transferor is deceased or otherwise unable to give evidence – that there is any need for the presumption: Pecore, at paras. 5, 44; Andrade, at para. 61. In such scenarios, the presumption follows logically: absent a living transferor, the transferee is the party best situated to “bring evidence about the circumstances of the transfer”: Pecore, at para. 26. However, where there is clear evidence of actual intentions, no presumption is necessary.
....
[44] For the purpose of the resulting trust argument, it is not necessary to ascertain the intention of both parties at the time of the purchase. It is the “intention of the grantor or contributor alone [that] counts”: Andrade, at para. 62; Pecore at para. 5; MacIntyre v. Winter, 2021 ONCA 516, 158 O.R. (3d) 321, at para. 24. .... . Mellace v. Mellace
In Mellace v. Mellace (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, this brought against "a partial determination" of mutual applications in a family corporation context.
Here the court finds the application judge erred in their treatment of a resulting trust issue:(iv) Failure to consider or apply the law of resulting trust
[37] Finally, the wife argues that the application judge erred in both fact and law in her determination that the adult children are the sole beneficial owners of the Alliston property. I agree.
[38] The evidence before the application judge included that the wife had advanced the funds for the down-payment and made all mortgage and maintenance payments since the acquisition of the property. However, the wife and both sons were all on title.
[39] These underlying (and uncontested) facts required the application judge to engage directly with the presumption of resulting trust and – to reach her stated conclusion – find on a balance of probabilities that the presumption was rebutted by evidence of a gift. The reasons reflect neither an engagement with the presumption nor findings of fact capable, without more, of rebutting the presumption. This conclusion too must be set aside. . Alami v. Haddad
In Alami v. Haddad (Ont CA, 2025) the Ontario Court of Appeal considered a resulting trust situation on appeal:(1) Presumption of resulting trust
[13] The wife argues that the trial judge erred in law and in fact in finding that the husband had a beneficial interest in the former matrimonial home pursuant to the doctrine of resulting trust. She says that because the parties had already divorced by the time he claimed a resulting trust interest in the home, s. 14 of the Family Law Act, R.S.O. 1990, c. F.3, had no application because it refers to “spouses” and not “former spouses.” Further, she states that the trial judge erred in her application of the law to the facts.
[14] The trial judge did not err in applying the doctrine of resulting trust to the determination of ownership of the former matrimonial home. Section 10(1) of the Family Law Act authorizes the court to determine questions of title between spouses. This includes whether legal title actually reflects beneficial ownership. Before property can be equalized, a court must determine the net family property of each spouse. This requires that questions of title be settled: Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 47; Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70, at p. 91. In other words, “property entitlements must be determined before they can be equalized”: Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at para. 25.
[15] The general rule for gratuitous transfers is that the rebuttable presumption of resulting trust applies. Where a transfer is made for no consideration, the onus is on the transferee to show that the gift was intended: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 24. As previously set out by this court, “[t]he presumption of resulting trust flows from the principle that equity presumes bargains and not gifts”: Belokon v. Krygyz Republic, 2016 ONCA 981, 136 O.R. (3d) 39, at para. 56, leave to appeal refused, Entes Industrial Plants Construction & Erection Contracting Co. v. Kyrgyz Republic, [2017] S.C.C.A. No. 74; Qu v. Zhang, 2025 ONCA 391, at para. 11. The presumption may be rebutted on a balance of probabilities by evidence that the transferor intended the transfer to be a gift: Qu, at para. 12; Pecore, at paras. 24,43. The function of s. 14 of the Family Law Act is to codify this equitable doctrine for spouses specifically, and provide two exceptions to the presumption.
[16] On the evidence before her, the trial judge found that both parties contributed the funds used to purchase their first home in 1999, which was registered in the wife’s name alone. When the first home was sold, the proceeds were put towards the second home, which was purchased in 2004. She found it “highly improbable” that the wife alone had provided the funds for purchase of the first or second home, given her evidence that she was primarily responsible for the care of their young children and earned a modest income at that time. She considered the husband’s evidence that he was the primary breadwinner and that he paid most of the purchase price of the homes. She found as a fact that the husband had contributed financially to the acquisition of the second home, and that he did not intend to gift his interest to the wife. These findings were available to the trial judge and we see no palpable and overriding error.
[17] Having found that the general presumption of resulting trust as set out in Pecore applies, it is unnecessary to address the wife’s argument that s. 14 of the Family Law Act, does not apply to former spouses or the reference by the trial judge to that section. In the circumstances of this case, it is of no consequence.
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