This case is a valuable reminder of the evidence courts will require when donative intent is alleged or challenged

The Estate of WRW v. GH et al., 2024 ONSC 4190

When William died in July 2021 at the age of 88, he left behind a legacy of business success, post-secondary education, and philanthropy. He also left behind litigation over the more than $30 million in transfers he made during the last decade of his life.

William was survived by his wife of 53 years, Phyliss, who was housebound and in poor health. The couple had no children. William acted as Phyliss’ attorney for property.

William hired Gillian Henry as a personal support worker for Phyliss at an annual salary of $60,000. William and Gillian later became romantically involved, and their relationship remained a secret for more than a decade. The Court described the relationship as “real…intimate…and long standing” (at para. 71). Gillian was married and had children when the relationship began, although her marriage was ending.

Over the years, William advanced approximately $30 million to Gillian. The funds were used by Gillian to discharge debts including a mortgage; purchase a home and horses; assist her daughter; pay for private school and post-secondary education for her daughter; acquire real estate that she later gifted to relatives; incorporate holding companies; and start a business.

After William’s death, Phyliss’ new attorney for property commenced litigation against Gillian and members of Gillian’s extended family. The claim concerned the funds William advanced, and the businesses, personal property, and real estate acquired with those funds. The legal questions were familiar but factually complex: were the transfers gifts, loans, investments, or property impressed with a trust in favour of William’s Estate? And were the transactions the product of William’s free will, rather than undue influence, fraud, or coercion?

Phyliss had a life interest in William’s Estate. The other beneficiaries of the estate were charities, and the Estate was only worth approximately $500,000 when William died.

The Court emphasized that William was sophisticated and financially astute. Over the years, he sought advice from lawyers, accountants, and financial advisors. Sometimes he documented the purpose of payments to Gillian; sometimes he did not. That distinction mattered. Where he expected repayment, he tended to document the advance. William approved the transfers to Gillian, and his professional advisors knew funds were flowing to her, although they did not know about the relationship. They also advised him on ways to document the payments or pursue repayment, but he declined that advice.

The Court found that William had a “comprehensive understanding of Gillian’s financial affairs” (at para. 182), including her gifts to family members. He was not duped. With limited exceptions, William was found to have donative intent when he transferred funds to Gillian (at para. 367). That finding defeated the Estate’s resulting trust claim for most transfers. Gillian was not unjustly enriched by the transfers because, on the evidence, the money had been gifted to her. The Court also held that where the documentation supported loans, Gillian was required to repay them to William’s Estate.

The Court also considered, but rejected, the Estate’s claims based on undue influence, fraud, and coercion.

Because Gillian’s gifts to her extended family were made from funds that William had gifted to her, the Court dismissed the claims against Gillian’s family members.

The evidentiary analysis is one of the most useful parts of the decision. The Court required compliance with section 13 of Ontario’s Evidence Act, which requires corroboration in estate litigation. The Estate sought to rely on notes William made over the years, but the Court rejected most of them as unreliable, vague, and not capable of being tested through cross-examination. The exception was a note relating to King of Hearts, a horse stabling operation Gillian had started. The Court accepted that note because it was typed, carefully stored, and corroborated by other evidence (at para. 227). On that record, the Court found that the funds used to establish King of Hearts were not gifts, but investments William hoped would pay off. The Estate was awarded an 80% interest in the business and associated assets, and the Court ordered their sale.

The limitation period analysis was also significant. The Court held that the relevant date was when William became aware of a proprietary or equitable right to property, not when the Estate representative later became aware of it (at para. 248). As a result, most claims were statute-barred.

Family Law

The decision also touched on family law. The Court found that William and Gillian worked together when Gillian submitted a false statement of assets in her divorce proceeding. William signed a document about Gillian’s alleged debt to him that the Court described as “convenient” (at para. 183), because it almost exactly offset her assets. The divorce proceeded uncontested, with no property or support settlement.

Fiduciary Obligations to Phyliss

The trial evidence showed that William used some of Phyliss’ money when advancing funds to Gillian. While William was free to deal with his own money, he was a fiduciary for Phyliss and had to account to her. Gillian was also a fiduciary to Phyliss, who was vulnerable and dependent on Gillian in her role as a care worker. The Court found that the common enterprise between William and Gillian to benefit from Phyliss’ money was unconscionable (at para. 330). Gillian was ordered to return $2.85 million to William’s Estate in trust for Phyliss. Importantly, Phyliss was not a party to the action, and her ability to bring her own claim against Gillian was not estopped.

Counterclaim

Gillian counterclaimed against the Estate. The Court dismissed the counterclaim, finding that it lacked credible and corroborated evidence, was inconsistent, arose only after the litigation began, and was financially motivated.

Conclusion

The takeaway is practical rather than doctrinal. The decision does not change the law, but it is a valuable reminder of the evidence courts will require when donative intent is alleged or challenged. Documentation, contemporaneous conversations, professional advice, whether that advice was accepted or rejected, and consistency of conduct all mattered. The case also underscores a related point: personal autonomy permits people to make gifts others may view as unwise, but fiduciary obligations still impose hard limits when another person’s money is involved.