Young v. Veselic

2022 BCSC 2172 Young v. Veselic IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Young v. Veselic, 2022 BCSC 2172 Date: 20221215 Docket: S6077 Registry: Golden Re: The Estate of Kristina Veselic Between: Ivana Young Plaintiff And Stanislav Veselic Defendant Docket: S-S-130115 Registry: Kelowna Between: Stanislav Veselic, as Executor of the Estate of Kristina Veselic Petitioner And Ivana Young Respondent Before: The Honourable Justice Branch Reasons for Judgment Counsel for the Plaintiff/Respondent: B. Fairley The Defendant/Petitioner, appearing in person: S. Veselic Place and Date of Trial: Golden, B.C. October 24, 2022 Place and Date of Judgment: Golden, B.C. December 15, 2022 Table of Contents I. INTRODUCTION. 4 II. JOINT ACCOUNTS. 4 III. THE $10,000 DISTRIBUTION. 7 IV. WILLS VARIATION. 8 V. CONCLUSION. 10 I. INTRODUCTION [1] These are my reasons in relation to the residual claims left outstanding following my decision on the validity of the last will prepared by the plaintiff's mother. My earlier reasons are indexed as Young v. Veselic, 2022 BCSC 697 (the "Round 1 Reasons" or "R1R"). I will not repeat the facts set out in the R1R except as necessary for this judgment, and I will use the same defined terms. [2] The residual claims include: a) a request for directions in relation to certain accounts held jointly between the plaintiff daughter and the Testatrix mother, including the proper treatment of $20,000 distributed from these accounts by the daughter to herself and to the defendant son shortly after the Testatrix's death; and b) a claim for a wills variation under the Wills Estate and Succession Act, S.B.C. 2009, c. 13 [WESA]. [3] The parties called no additional evidence for this follow on trial. II. JOINT ACCOUNTS [4] As noted at paras. 14 and 98 of the R1R, the daughter held certain joint accounts with the Testatrix. The accounts were held at the bank at which the daughter worked. At para. 158 of the R1R, I held as follows: [158] In terms of the son's allegations against the daughter, [the] Testatrix had sufficient trust in the daughter to make her a joint account holder. Moreover, the daughter was able to provide explanations for the transfers made to her. More importantly, even if not originally authorized, the daughter was able to walk through an accounting exercise with the court that showed that she repaid more than she received, even accounting for a reasonable amount for rent for the period she stayed in the Home. The son did nothing to undercut the accuracy of the daughter's accounting. [5] The bank has been unwilling to allow the daughter to receive the funds in the joint accounts without a court order. [6] The son argued that his mother had requested that these accounts be moved out of joint names prior to her death, but there was no evidence of such an effort presented at trial. Further, and in any event, no such plan was ever implemented. [7] The son also argued that the daughter should not be entitled to these funds because she had "stolen" money from her mother. However, this argument was already rejected as part of the R1R. [8] Finally, the son argued that the daughter should not be entitled to the funds in the joint accounts since they were comprised of the Testatrix's own funds. Although as a lay litigant he was unable to express his argument in these terms, I find that it should be construed as a claim that the funds were imbued with a resulting trust in favour of the Testatrix. [9] I note that in the first trial the daughter made a similar resulting trust claim in relation to the Testatrix's transfer of her Home to the son. In the R1R, I reviewed the principles applicable to such a claim, but rejected it stating: [72] In Di Giacomo v. Di Giacomo, 2021 BCSC 2313, Justice G.C. Weatherill described the proper approach to assessing gratuitous transfers of real property between a parent and an independent adult child: [40] In a case involving, as here, a gratuitous transfer of an interest in land to an independent adult child, it does not follow as a matter of law that an immediate irrevocable gift was made. Rather, the donee must rebut the legal presumption of a resulting trust: Schouten Estate v. Swagerman-Schouten, 2014 BCSC 2320 at paras. 2-3; Pecore at paras. 24-26; Bergen at para. 5. If, on a balance of probabilities, the donee establishes that the donor's intention was to make an irrevocable gift, a resulting trust will not be found: Pecore at paras. 43-44, 55; Schouten Estate at para. 7. [41] The actual intention of the donor at the time of the transfer is the governing consideration in the assessment of whether the presumption of resulting trust has been rebutted: McKendry at para. 31 [73] When assessing the donor's intention, the court considers both direct and circumstantial evidence, as well as the surrounding circumstances: McMaster Estate at para. 45 [142] As noted, when a gratuitous transfer is made from a parent to an independent adult child, there is a presumption of a resulting trust. To rebut this presumption, the son must prove the Testatrix's actual intent at the time of the Second Transfer was to make an irrevocable gift of joint title in the Home. [143] I find that my analysis above relating to the Testatrix's knowledge of the effect of her decision establishes her donative intent. The Testatrix clearly intended to arrange her affairs such that the son would receive the fruits of the Home on a gratuitous basis. The plan was to give it to her son in the Second Will, and the only reason it became an inter vivos transfer was Mr. Wendell's advice as to the most cost-effective way to arrange a transfer. [144] The Testatrix's concurrent disinheritance of the daughter in the Second Will is relevant context which serves to establish her donative intent in relation to the Transfer. The consistency indicates the Testatrix had decided to leave her entire estate to her son. [145] Accordingly, I find the son has rebutted the presumption of a resulting trust with respect to the Second Transfer of the Home and the resultant Home Proceeds. [10] The same principles apply here. Given that the Testatrix's funds were transferred gratuitously into a joint account with her adult child, I find that is a presumption of resulting trust. For the reasons set out below, I conclude that the daughter has not rebutted that presumption. [11] Although the account was set up with a right of survivorship, this fact does not carry a particularly heavy weight: Weaver v. Weaver Estate, 2019 BCSC 132 at para. 88. Otherwise, any presumption would be rebutted in virtually all joint account situations. [12] The decision in Pecore v. Pecore, 2007 SCC 17 provides that the court may consider evidence arising after the establishment of the joint account, to the extent that such evidence helps in determining the original intention of the donor: Williams v. Williams Estate, 2018 BCSC 711, para. 90. [13] There was much evidence as to the Testatrix's complaints about the daughter's management and expenditures from the joint accounts. This weighs against a finding that there was an intention to gift the amounts therein. The Testatrix was clearly of the view that she retained beneficial control over the funds therein, during her lifetime at a minimum. [14] Further, from the use of the account, it is clear that the accounts were largely set up in joint names in order to facilitate the payment by the plaintiff of the Testatrix's bills and other obligations. There was no testimony and no documents which described an intention to gift on the part of the Testatrix, either the funds in the accounts or a right of survivorship thereto. Although the daughter made certain limited deposits into the joint accounts, these largely related to her own perceived responsibility to pay back monies she felt were owed to her mother generally or on account of rent. If a gift was intended, there would presumably have been no need for her to make such repayments in her mother's favour: Re Ferguson Estate, 2018 PECA 19 at paras. 20, 29; Mong Alter Ego Trust No. 1 v. Yip, 2022 BCSC 1327 at para. 289. [15] Of particular significance, I note that the daughter distributed $10,000 to both herself and her brother from the joint accounts following the Testatrix's death: R1R, para. 51. There would have been no reason for her to make a distribution in favour of her brother from these accounts if they were in fact joint accounts with a right of survivorship gifted to her. Rather, the daughter herself was clearly treating the funds in the joint accounts as part of the Testatrix's estate which, on her own evidence, she believed at the time would be divided equally according to the Testatrix's last will of which she was aware. [16] Based on the cumulative effect of this direct and circumstantial evidence, I cannot find that the daughter has rebutted the applicable presumption of resulting trust. [17] I should make it clear I do not find it necessary to provide a right to the daughter to seek an accounting of any amounts she repaid into the accounts. I conclude that the daughter made a good faith effort to estimate the total amount owing to her mother when she made these payments. III. THE $10,000 DISTRIBUTION [18] As noted, the daughter agreed to make a distribution of $10,000 from the joint accounts to each of herself and her brother shortly after the Testatrix's death. The daughter now argues that the $10,000 provided to the son should be returned to her, as it was made under a mistake of fact. Specifically, at the time the transfer was made, she says she understood that the First Will would govern the distribution of the Testatrix's estate, a will under which the estate was to be divided equally. However, in light of my finding that the joint accounts are impressed with a resulting trust, I find that no order should be made in the daughter's favour in relation to the $10,000 payment to the son. Indeed, if anything, it would be more proper to order that both parties repay the $10,000 to the estate before any distribution. However, as the son did not seek such an order, I find that it is reasonable that both be allowed to simply retain these funds, particularly given my judgment below in relation to the wills variation claim IV. WILLS VARIATION [19] I reviewed the principles applicable to wills variation claims in Enns v. Gordon Estate, 2018 BCSC 705 at paras. 58-62. [20] In this case, I find that the applicable test for a variation has been met: a) The daughter was primarily responsible for the mother's care until she was moved from Golden to the hospital in Kelowna, creating a strong moral obligation, and a reasonably held expectation, that the daughter would benefit from the estate. b) The Testatrix's reasons for excluding the daughter as expressed to her counsel and in the Second Will were not rational, as: i. there was in fact no estrangement between the mother and the daughter: see R1R at para. 35; and ii. I do not agree that the daughter had stolen from the Testatrix or that the daughter owed the Testatrix any amount at the time that the Second Will was executed. Again, my finding in the R1R was that any monies provided to the daughter were loans that were subsequently repaid. Rather, it was the son whom I found took monies from the Testatrix's accounts without proper approval. Yet the son was not subjected to equivalent "punishment" under the Second Will (thereby further illustrating the irrationality of the expressed reasons). c) Even if one were to expand the Testatrix's reasons beyond those stated in the Second Will to the other possible explanations for exclusion proffered by the son and other lay witnesses, I am unable to find that the daughter had a drinking or drug problem that supported exclusion. The daughter was able to maintain a position of trust in a major Canadian bank. She was able to make regular visits to the Testatrix in each of the three hospitals in which she was hospitalized. Furthermore, a substance abuse problem arguably calls for more private support and not less: Soule v. Johansen Estate, 2011 ABQB 403 at para. 52. I note as well that a trust could have been established to prevent any concerns that there would be an undue dissipation of assets. d) I find no misconduct or poor character on the part of the daughter. e) The daughter does not have such financial means that she could not materially benefit from a share of the estate. f) There is no suggestion that the alteration of the estate ordered below would result in a material imbalance in the standard of living between the parties. g) The gifts and bequests made to the son by the Testatrix outside the estate were overwhelming, when compared to the value of the estate. [21] In terms of the appropriate adjustment, I find that the overwhelming factor is consideration of other pre-death gifts given by the Testatrix to her son. The earlier gift of the Home to the son so overwhelms the value of the estate that I conclude that it would be appropriate to award the daughter 50% of the value of the estate. The Testatrix's wish to have her son benefit to a greater extent than her daughter should be considered and respected, but the proportion awarded to the son should be balanced against the gifts he received outside the Second Will and the competing policy objectives embedded within WESA. [22] In Ryan v. Delahaye Estate, 2003 BCSC 1081, there was a clear and continuing relationship with both children, but the testator saw fit to leave only a 20% share to her daughter and 80% to her son. The stated reason for unequal distribution was that the daughter did not help her parents as much as the son and that the daughter had already received assistance through the grandmother's estate. The court held that the reasons given for unequal distribution were not valid and rational. The court ordered a 50/50 split. I find that the same outcome is appropriate in the present case. V. CONCLUSION [23] The Court declines to confirm that the daughter has a right of survivorship over the joint accounts. The amounts in the joint accounts should be added to the residue of the estate. [24] No orders shall be issued in relation to the $10,000 already distributed to each of the parties. [25] The estate shall distribute 50% of the residue to the plaintiff and 50% to the son. [26] Certain preliminary submissions were provided on the issue of costs following the R1R. However, I directed that the costs of the first and second trials be considered together. If the parties are unable to agree on the costs of all matters, they may make further written submissions to the Court on the following schedule: a) Plaintiff's Submission: 30 days from this judgment; b) Defendant's Response: 30 days from receipt of the plaintiff's submission; c) Plaintiff's Reply: 10 days from receipt of the defendant's response. "The Honourable Mr. Justice Branch"