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At trial, the court found that Ms. Brooks was evasive and gave conflicting evidence. 6 The judge found no
evidence to support the position that her father intended to gift the contents of the joint account to her. 7 After
reviewing the presumption of resulting trust and the presumption of advancement, the court concluded that the
presumption of advancement from parent to child should be abandoned in favour of resulting trust in all but the
most limited cases. 8 The historical justification for the presumption of advancement was financial dependence;
thus, where the parent is elderly and the child is an adult, dependence does not exist and the presumption should
not apply. 9
On appeal, Laforme J.A. concluded that the presumption of advancement can apply to transfers of property
from a parent to a child, including an independent adult child. 10 The trial judge was therefore incorrect when
she applied the law of resulting trust. The trial judge’s error was moot, however, as the majority found ample
evidence to suggest that the contents of the joint accounts were not intended to be a gift to Ms. Brooks, thereby
not requiring an application of the presumption of advancement. 11
In her dissent, Feldman J.A. thoughtfully examined the social and practical implications of judicial interference
with the presumption of advancement. She suggested that to the extent that the existing law is flawed, it was
the legislature that must address such issues, as it did with the presumptions in the context of spouses. In the
meanwhile, she suggested, that the presumptions of resulting trust and advancement provide certainty and
predictability to the increasingly common dilemma of the beneficial ownership of joint accounts.
New Direction for Presumptions from the Supreme Court of Canada
The Supreme Court of Canada released their decisions in Pecore and Madsen on May 3, 2007. The reasons for
the majority are found in Pecore, where Rothstein J. writes for the majority.
At the outset, Rothstein J. notes that joint accounts between parents and their children have become common
estate planning tools. Each joint tenant may be able to withdraw any or all of the funds and each may have a
right of survivorship. Given their widespread use for estate purposes, many commentators have referred to joint
accounts as ‘the poor man’s will’.
Regardless of how the general public understands joint accounts, the courts of equity distinguish between legal
and beneficial ownership. This distinction is drawn by the intention of the transferor at the time of transfer.
Unfortunately, intention is often difficult to ascertain, especially when the transferor is deceased. 12
Rothstein J. explored the origins of the presumption of advancement and found it to be a tool whereby a parent
could transfer assets to a child. But what happens when the children are adults and financially independent of
their parents? Rothstein J. examined a number of recent cases, including McLear v. McLear Estate where the
court held that it is dangerous to presume that an elderly parent is making a gift. 13 One of the concerns expressed
in McLear was that in modern times, the joint account may have a purpose other than succession planning:
the management of the elder’s finances in later years. Rothstein J. adopted the rationale behind these cases and
held that where there is no parental obligation to support their children, it is wrong to assume that the parent
intended to advance the child through a gift.
The Dissent
In a strongly worded dissent, Abella J. tried to preserve the presumption of advancement. She noted the
longevity of the presumption of advancement in English and Canadian jurisprudence and concluded that there
was no reason to limit the presumption of advancement to non-adult children or to remove the presumption of
advancement from the “judicial toolbox” in assessing intention. 14
Abella J. challenged Rothstein J.’s rejection of parental affection as a basis of the presumption of advancement. In
cases from Grey (Lord) in 1677 to the modern extended family drama in Yao, the presumption of advancement had
been based upon “natural consideration of blood and affection” not solely on financial dependence. 15 Historically,
this “affection” applied to adult children as well as minor children.
6 Deadbeat • Volume 26, No. 1