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Resulting Trust: What is the Relevance of an Intention to Defeat Creditors?

Holtby v. Draper 2017 Ont CA

Husband transferred a property to wife to hide the property from creditors, in essence to defeat or delay their claims. Ultimately, husband settled with his creditors. He then wanted title to the property transferred back to him, given that wife had paid no consideration for the original transfer. The court held that there was a resulting trust (i.e. wife held the property in trust for the husband as beneficiary). The court held that, although intention to defeat creditors can be evidence of a gift, it is not conclusive and, in this case, the facts demonstrated that there was no intention to gift. Wife was ordered to retransfer the property.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.