Calgary Gift Loan Family Lawyers handle cases where one spouse may argue monies advanced by one of the spouse’s parents is a loan and the other spouse says no it wasn’t it was a gift to both of them that should not have to be repaid and deducted off of matrimonial property before it is divided. A 2018 Alberta Queen’s Bench decision provides a tidy summary for our Calgary Gift Loan Family Lawyers and our Calgary family law clients. MacLean Law’s Calgary family lawyers operate from our downtown Calgary Bankers Hall office.
Calgary Gift Loan Family Lawyers 403-444-5503
Dagg v Wong, 2018 ABQB 73 dealt with two advances of money from the wife’s parents that were used to buy homes. The wife said they were a loan, the first monies had a written loan type agreement and the second advance was not “papered”. Before deciding whether the monies advanced were a loan to be deducted or a gift that each spouse would get to keep the Court explained how the law of matrimonial property division works in Alberta:
[25] The purpose of the Matrimonial Property Act, RSA 2000, c M-8 (MPA) is to “legally recognize marriage as an economic partnership, founded on the presumption that the parties intended to share the fruits of their labour during and as a result of it, on an equal basis”: Jensen v Jensen, 2009 ABCA 272 (CanLII) at para 1, 70 RFL (6th) 63. An obvious corollary is the presumption that the parties generally also equally bear the risks of their joint efforts and investments.
[27] The law is clear that matrimonial property is valued as of the date of trial. However, the s. 8 factors in a particular case may justify an unequal division through valuation of certain assets at a date other than the date of trial: Hodgson v Hodgson, 2005 ABCA 13 (CanLII) at para 2, 361 AR 190.
Calgary Gift Loan Family Lawyers 403-444-5503
Calgary Gift Loan Family Lawyers appreciate the summary the Justice of the Alberta Court of Queen’s Bench provided in Dagg:
[87]A presumption of resulting trust arises when there is a gratuitous transfer of property from a parent to an adult child. Because the adult child gave no value for the property, the child is under an obligation to return it to the original owner. When a transfer is challenged, the onus is on the transferee to demonstrate, on a balance of probabilities, that a gift was intended by the transferor at the time of the transfer: Pecore v Pecore, 2007 SCC 17 (CanLII), [2007] 1 SCR 795.
[88]The approach in Pecore has been adopted by courts in determining whether money advanced by a parent to a couple to help fund the down payment of their matrimonial home was a gift or a loan: Barber v Magee, 2017 ONCA 558 (CanLII), [2017] OJ No 3409, JAM v DLM, 2008 NBCA 2(CanLII), 289 DLR (4th) 37.
[89]Certain objective factors may be relevant in determining whether an advancement is a gift or a loan, including: any contemporaneous documents; whether the manner for repayment was specified; whether there was security for the loan; whether there was any demand for payment before separation of the parties; whether there was any partial repayment; and whether there was any expectation or likelihood of repayment: Locke v Locke, 2000 BCSC 1300(CanLII) at para 21, [2000] BCTC 681.
In the end result the Court determined both advances were loans. This area of law is technical so it pays to document loans at the time advances are made and if it is a loan to document demands for repayment, proof of repayments, the intereast rate if any, the due date it is to be repaid and whether at any point the loan became a gift and what the reality was of whether the loan could ever be repaid.
