Carlson v. Carlson Date:, 2011 BCPC 228

Citation: Carlson v. Carlson Date: 20110906 2011 BCPC 0228 File No: 16810 Registry: Kitimat IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: ROBERT CARLSON CLAIMANT AND: TERI CARLSON DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE H.J. SEIDEMANN III Counsel for the Claimant: T. Wright Appearing on their own behalf: Teri Carlson Place of Hearing: Kitimat , B.C. Date of Hearing: March 18, 2011 Date of Judgment: September 6, 2011 [ 1 ] This case is about who is the true owner of the vessel “Diablo”.

The vessel is presently in the possession of the defendant, who has a licence for it issued to her by Transport Canada. The claimant is the father of the defendant’s deceased husband, and claims that he has at all times been and remains the owner of the vessel. There is no doubt the claimant purchased the vessel from its manufacturer. The issue which will decide this question is whether or not the claimant gave the vessel to the defendant’s deceased husband, the claimant’s son. [ 2 ] The short

summary of the factual skeleton for this case is simple. The claimant is a successful businessman. He has owned a succession of vessels over time. In 1999, he had a 36 foot cruising vessel which he moored in Kitimat, where he lived. When he attended the Vancouver Boat Show in 1999, the claimant agreed to purchase an 18 foot vessel with an outboard motor, for use as a tender with his larger vessel and to trailer to inland lakes and rivers for use in hunting and fishing.

That vessel was delivered to him in Kitimat in May, 1999, was named by him the “Diablo”, and is the subject matter of these proceedings. [ 3 ] The claimant did not obtain a licence for the Diablo when he purchased it, although it had a size of engine that clearly required it to be licenced pursuant to the provisions of the Canada Shipping Act and Regulations, as they then were. For many years the regulations have required any vessel powered by an engine of 10 horsepower or more to be licenced. That is why so many outboard engine manufacturers have for many years produced 9.9 horsepower engines.

The engine of this vessel is 130 horsepower. [ 4 ] The Canada Shipping Act was substantially revised in 2001, the Regulations were changed and given more publicity, and the claimant says that he first became aware that the Diablo was required to be licenced in 2002. The vessel was then licenced, but the Vessel Licence was issued in the name of the claimant’s son, Donald Carlson, with the claimant’s full knowledge. [ 5 ] Both the claimant and his son used the Diablo on a regular basis.

For several years, the claimant’s son attempted to operate a sport fishing charter business, using the Diablo and the larger vessel owned by the claimant. During this time, the claimant’s son ended an extended common-law relationship and met and married the defendant. That relationship broke down and the parties separated in late 2007. Donald Carlson died within a year, the parties never having divorced, and the defendant obtained Letters of Administration of his

estate. The claimant concedes that whatever belonged to Donald Carlson at the time of his death legitimately now belongs to the defendant. The defendant has provided the Letters of Administration to Transport Canada and Transport Canada has issued a Vessel Licence for the Diablo in the name of the defendant. [ 6 ] The position of the claimant is that the Vessel Licence is not a document of title and, notwithstanding that the original licence was issued in the name of Donald Carlson, the Diablo always remained the property of the claimant.

The defendant acknowledges, as she must, that the Vessel Licence is not determinative of title, but says that it is evidence of title, that she was told by her husband that his father had given him the Diablo, and that she has acted only as she was entitled to do following her husband’s death. [ 7 ] The reality of the situation is that, given the Vessel Licence having been originally issued in Donald Carlson’s name, the claimant could now only legally operate the vessel if he persuaded the defendant to sign the vessel over to him or brought an application to court such as the proceedings we now have.

Transport Canada could not properly issue a Vessel Licence to the claimant without proof of transfer from the prior licenced owner or a court determination as to proper title. It is illegal to operate a vessel such as the Diablo unless a licence has been issued to the proper owner, except for the time period of 90 days from a change of ownership, while a new licence is being issued. [ 8 ] That bare skeleton of facts is fleshed out with a variety of details that the parties say support their positions. The claimant says that he paid for the moorage and insurance for the vessel until last year.

He says that he paid for major repairs that were required by the vessel. He says that he used the vessel whenever he wanted to. He says that he would not have given the vessel to his son, as, if his daughters became aware of that, he would have had to give each of them something of equal value. [ 9 ] The defendant says that her husband used the vessel whenever he wanted, without requesting permission from his father. Her husband carried on a charter fishing business with the vessel and did not pay his father anything for the use of the vessel or any share of the proceeds of the business.

She says that, in connection with the business, her husband paid at least some of the moorage charges for the vessel. She says that her husband paid for the day-to-day, ongoing maintenance and other expenses of the vessel. [ 10 ] The claimant acknowledges that his son was not good with money. He describes his son as, “if he had money, he spent it”.

The claimant acknowledges that the major repairs to the vessel, which he has proven that he paid for, were required by a breakdown that occurred on a trip that he and his son took together with both the cruising vessel and the Diablo. [ 11 ] The claimant has provided to me an Application For Pleasure Craft Licence dated June 28, 2002, that applies to have the vessel licenced in the name of Donald Carlson, but is signed by both the claimant and Donald Carlson as “Joint Owners”. The claimant says that this is the application upon which the licence was issued in Donald Carlson’s name.

The claimant says that the vessel was to be licenced in Donald Carlson’s name because the claimant was often absent on business, Donald Carlson was more likely to be operating the vessel, and the claimant thought that it would be easier if Donald Carlson was ever stopped or inspected by the authorities if the vessel were licenced in his name.

Notwithstanding that the application form which has been produced to me is signed by two persons as joint owners, it is clear that the claimant was well aware that the licence for the vessel was issued in the name of his son alone. [ 12 ] As I said earlier, it is clear that Donald Carlson never bought the vessel from his father. The only way in which he could have obtained title to the vessel was if his father had given it to him. A valid gift requires that there be established: (

a) Capacity of the donor; (

b) Intention of the donor to make a gift; (

c) Completed delivery of the gift to a donee; and (

d) Acceptance of the gift by the donee. [ 13 ] In this case, there is no doubt about the complainant’s capacity to make a gift and, if there was gift, that it was accepted by the claimant’s son. The claimant says that he had no intention to make a gift and that there was never a completed transfer of the vessel to his son. [ 14 ] The onus is normally on the donee of a gift to prove all of the elements of a valid gift.

In particular, the law normally assumes that, if a person transfers possession of something of value to another without consideration, that it is a loan or bailee relationship unless the recipient establishes otherwise. However, in some circumstances, the law may presume that it is intended to be a gift unless the donor establishes otherwise. In particular, when a person transfers property to a person who would be in a position to inherit on the death of the donor, the law presumes that the transfer is a gift and an advance on the inheritance unless proven otherwise.

A transfer to a spouse or child falls within this. This was clearly recognized by the claimant, when he said that, if he gave the vessel to his son, he would have to give a like value to each of his daughters. [ 15 ] The claimant in this case says that he did not have an intention to gift the vessel to his son. He says that that is borne out by the fact that he says that he never transferred title to the vessel to his son.

The claimant’s position is that, if title was never transferred to his son, delivery was not completed and there could be no gift, regardless of his intention. [ 16 ] Although the Vessel Licence is not determinative of title, it is clear evidence of title. I do not accept that the Application For Pleasure Craft Licence document which has been produced to me is the document upon which the Pleasure Craft Licence for the vessel eventually was issued. The document which has been produced to me is an original document.

It does not have on it any stamp indicating that it has been accepted by or produced to the government office which issues the vessel licences. It is signed by two persons, but the licence which was issued was in the name of Donald Carlson alone. It is dated June 28, 2002, but the licence was not issued until August 6, 2002. [ 17 ] The Small Vessel Regulations under the Canada Shipping Act, as they were in 2002, provided that:

(1) The owner of a pleasure craft may obtain a licence for it by submitting an application form, completed and signed by the owner, to the Minister of Fisheries and Oceans or a person designated by that Minister, along with a document that establishes ownership of the vessel.

(2) The Minister of Fisheries and Oceans or a person designated by that Minister shall issue a licence for the pleasure craft to its owner without charge upon the receipt of the completed and signed application form and the document that establishes ownership. And: 12.

(1) Immediately after the ownership of a licenced pleasure craft has been transferred, the transferor shall (

a) Sign and deliver to the new owner the transfer form that is printed on the reverse side of the licence; or (

b) Submit a signed, written notice of the transfer to the Minister of Fisheries and Oceans or a person designated by that Minister, specifying the licence number and the name and address of the new owner.

(2) Immediately after the ownership of a licenced pleasure craft is transferred, the new owner shall (

a) complete and sign the transfer form that is printed on the reverse side of the licence or an application form for a new licence; and (

b) submit to the minister of fisheries and Oceans or a person designated by that Minister i. the completed and signed form, and ii. a copy of the bill of sale or any other document that establishes ownership of the pleasure craft.

(3) The Minister of Fisheries and Oceans or a person designated by that Minister shall issue a new licence for the transferred pleasure craft to the new owner without charge on receipt of the documents described in paragraph (2)(b). [ 18 ] In this case, as the Diablo had not previously been licenced,

section 9 would have applied. [ 19 ] There is a presumption of regularity, that government officials charged with performing duties under legislation act properly unless the contrary is shown. In this situation, I should presume that the officials who issued the Vessel Licence to Donald Carlson received an application signed only by him and documents establishing his ownership of the vessel unless shown otherwise.

I gave an opportunity to the claimant at the conclusion of the trial to attempt to contact the appropriate office and obtain a copy of the actual documents upon which the Vessel Licence was issued, but that opportunity was not taken up. [ 20 ] The only way in which Donald Carlson could have provided proof of ownership of the vessel by him was to show the original purchase of the vessel by the claimant and a document of transfer from the claimant to himself. Unless Donald Carlson was acting fraudulently and forged a transfer to himself, the claimant must have executed a document of transfer to his son.

There is a presumption against fraud. Unless it is proven, I must assume that Donald Carlson did not act fraudulently. Since the claimant has not shown me that his son forged a document of transfer, I can only conclude that the claimant did execute a document of transfer of the vessel to his son and delivered that to his son to accompany the application for a licence. [ 21 ] In the result, I find as a fact that title to the vessel did pass to Donald Carlson, and that the presence or absence of an intention to gift is, accordingly, relevant. With respect to this issue, I have two diametrically opposite positions.

The claimant says that he never had any intention to give the vessel to his son. The defendant says that her husband told her that his father had given the vessel to him. [ 22 ] I must ask myself, why, if there was no intention to gift the vessel to his son, did the claimant transfer the vessel to him as I have found that he did. I found the claimant’s explanation for why the Vessel Licence was to be issued in his son’s name to be entirely unsatisfactory. It did not make any sense to me. It simply did not ring true to me and I do not accept it.

And I cannot ignore the fact that, if I were to accept the claimant’s explanation, the claimant was consciously and deliberately licencing the vessel in the name of someone who was not the true owner. Operation of the vessel by he, his son, or anyone else in those circumstances would be contrary to the regulations I have previously referred to. Section 8 (1) of those regulations provided: 8.

(1) No person shall operate a vessel unless, under

section 9 or 12, as applicable, a licence has been issued to the owner for the vessel or, under

section 14, a licence has been issued to a dealer who is demonstrating the vessel. [ 23 ] I conclude that Mr. Carlson did give the vessel to his son. The fact that he paid moorage and insurance subsequently were simply to ensure that he had ongoing access to the vessel, as his son was imprudent with money and might not meet those expenses. The repairs that he paid for a major problem with the engine were for a problem that occurred while on a joint trip with his son. He may have felt responsible.

Again, if the father did not pay for those repairs it is possible that the son would not have been able to pay for them and the vessel would not have been available to either of them. [ 24 ] It is likely that the gift was made in the expectation, either express or implied, that Mr. Carlson would continue to have use of the vessel when he desired, but such use is not inconsistent with a gift. For the reasons which Mr. Carlson expressed in his evidence, neither he nor his son would have wanted to advertise the fact of this gift, as Mr. Carlson’s daughters would then, justifiably, expect to be treated equally.

[ 25 ] When the gift was made, neither Mr. Carlson nor his son contemplated the circumstances that have now arisen. Had they directed their minds to this, Mr. Carlson’s son could have left the vessel to his father in a Will. Had the son survived for a longer time, it is likely that he would have divorced from the defendant, and she would then have had no entitlement to his estate. But that is not what happened. We must deal with the circumstances as they have unfolded. [ 26 ] I am satisfied that the vessel was transferred from the claimant to his son.

I find that transfer was a gift and, at the time of the death of Donald Carlson, the vessel was the property of Donald Carlson. The claimant concedes that whatever was the property of Donald Carlson at his death legitimately became the property of the defendant. The vessel became and still is the property of the defendant. The claimant’s claim is denied. The defendant’s costs of filing her reply should be paid by the claimant to her forthwith. ___________________________ H.J. Seidemann III Provincial Court Judge