The Concept of a Gift/Don
Comparative Study - Civil Law
Common Law - Tax Law
2. Common law
The term “gift” translates into don in the Income Tax Act. This is one of the translations that has been accepted for common law in French, the other one being donation. Hence, once again, there are no terminological problems associated with the use of the term “gift”.
2.2 General principles
One of the sources of the basic principle underlying the definition of gift/don in common law comes from an Australian decision:
But, it is, I think, clear that to constitute a “gift”, it must appear that the property transferred was transferred voluntarily and not as a result of a contractual obligation to transfer it and that no advantage of a material character was received by the transferor by way of return.
Thus, a gift is the voluntary and gratuitous transfer of property. Furthermore, the donor must not draw any personal benefit, either directly or indirectly, in consideration for the transfer. The gesture must be entirely gratuitous and a reflection of liberal intent on the part of the donor in regard to the donee.
Under common law, there are generally two categories of gifts: donatio mortis causa and giftsinter vivos.
2.3 donatio mortis causa
In addition to the liberal intent, donatio mortis causashould meet three other conditions in order to be valid:
It is further conceded that for an effectual donatio mortis causa three things must combine: first, the gift or donation must have been made in contemplation, though not necessarily in expectation, of death; secondly, there must have been delivery to the donee of the subject-matter of the gift; and thirdly, the gift must be made under such circumstances as shew that the thing is to revert to the donor in case he should recover.
Therefore, at the moment the donor makes the gift, he or she should be contemplating the prospect of his or her imminent, though not necessarily certain, death. Furthermore, the imminence of this death should be what motivates the donor to give. Thus, the donative intent is motivated by the possibility of the donor's death.
The second condition requires that the property be effectively delivered to the donee or that the formalities required for this delivery have been fully completed; the donee should be able to take possession of the property that is the subject-matter of the transfer in his or her favour without any encumbrance. The transfer of possession is essential in the case of a donatio mortis causa.
The third condition requires that the gift can only be complete and perfect upon the death of the donor. Therefore, the donor has to die for the donatio mortis causa to be valid, since this type of gift only takes effect at such time. Consequently, the gift is automatically revoked as soon as the donor recovers.
Therefore, a person contemplating his or her own imminent death could make a donatio mortis causa to a qualified donee, such as a charitable organization, but a gift under these circumstances would not be valid under civil law.
2.4 Gifts inter vivos
Three conditions must be met for a gift inter vivos to be valid. The first one is that the individual making the transfer actually intends to make a gift; it must be demonstrated that the donor's objective was to make a gift when he or she transferred the property.
The second condition is that the donee accepts the gift made to him or her; the donee must agree to the transfer of property that the donor made in his or her favour. In general, such acceptance is presumed once the third condition is met, that is to say the delivery of the property that is the subject-matter of the transfer by the donor to the donee.
The donor has to divest him or herself of the property; he or she has to place it in the possession of the donee. This delivery confirms the donor's intent to make the gift and must be deemed to be unequivocal since the courts will refuse to intervene to perfect a gift that is not complete.
On the other hand, the importance of delivery must be mitigated since it is possible that a donor may only benefit from a gift at a later date. The donor's intent in transferring title to the donee must be immediate, unequivocal and irrevocable, even if the donee can only benefit from it at a later date. This would be the case with the owner in fee simple of land and buildings who gives them as follows: a life estate to a third party for his or her life, and upon his or her death the remainder interest will devolve to a registered charity who will then be the owner of the real property. As long as the third party is alive, he or she will benefit from the revenue and the possession of the real property which is the subject-matter of the gift, which revenue and possession will only devolve to the registered charity at the former's death.
Delivery of a chose in possession requires the actual transfer of the property in question so that effective possession (“seizing”) comes into the hands of the donee; the property has to be physically in the hands of the donee. On the other hand, the physical transfer of the property in question will not be necessary if the gift is made under a valid deed of gift (a sealed contract). In such a case, the three elements will occur concurrently in an instrument that is devoid of ambiguity. The deed of gift will clearly demonstrate the donative intent of the donor, the acceptance by the donee and will contain the acknowledgment by the donee that the subject matter of the gift was divested and is effectively in his or her possession.
Moreover, in order to be valid, the gift of real property will also have to respect the formalities set out under the applicable provincial rules.
With respect to choses in action, all of the conditions required to perfect the transfer in order to ensure that the delivery is complete will have to be met in form and in substance. Thus, a cheque would have to be presented for payment and honoured by the bank and shares would have to be recorded in the corporation's register.
2.5 Other forms of gift
In addition to gifts inter vivos and donatio mortis causa, the term “gift” can also be used to designate the transfer of property in the nature of a gift that uses different instruments for achieving it.
Such is the case with the gift by will. Such a gift only takes effect once the testator donor dies; the delivery or transfer of the property subject-matter of the gift can only occur after the donor's death since the gift will not materialize before said death. Also, the will containing the gift must respect the conditions of form set out in the applicable provincial laws. The gift by will is the equivalent of a legacy in a will under the Civil Code of Québec.
Another form of gift is the gift in trust. Such a gift is most often made through an express trust, which enables a donor to proceed with the transfer of property to another by creating a trust for the benefit of the donee. The trust will have to meet all of the requisite conditions in order to be validly created. Furthermore, the gift made to the trust will also have to respect the conditions for the validity of a gift. For example, there will be a gift in trust if a donor transfer a sum of money to a trust that the trustee will administer in order to give the revenue generated by that sum of money to a registered charity.
Confronted to a case of inadequate delivery, it may be difficult, if not impossible, to rely on the doctrine of trust and argue that a resulting trust was created since the courts generally refuse to invoke equity to perfect such inadequate delivery.
Even if it is only aimed at the specific institutions of donatio mortis causa and gifts inter vivos, the term “gift/don” in common law covers all transactions that are designed to transfer property to a person without consideration being received, no matter what form or instrument is used to make such a transfer.
3. Civil law - common law comparison
3.1 General principles
The need to have a liberal intent in order to ensure the validity of a gift/don is an element that is required under both common law and civil law. No consideration or quid pro quo, even of an indirect nature, may be received by the donor, or it will not be deemed a gift. Only full abnegation on the part of the donor can ensure the validity of the gift. Civil law accepts that liberal intent bears only on a part of the value of the property given, but this option does not exist in common law, which considers the contract as being indivisible.
Another similarity is that only property/biens can be the object of a gift. Therefore, a gift cannot consist of the contribution of services. Under both civil law and common law, a gift requires a transfer of property from the donor to the donee without any consideration.
3.2 Gifts mortis causa - donatio mortis causa
There is a significant difference between a gift mortis causa in civil law and donatio mortis causa in common law.
Civil law limits gift mortis causa to marriage and requires the existence of a marriage contract made in due form of law in order to be valid. Only spouses, future spouses, their common and respective children may benefit from such a gift. Furthermore, subject to some exceptions, a gift inter vivos made by a donor during an illness deemed to be mortal is null as having been made mortis causa.
Under common law, property must be put in the possession of the donee while the donor is still alive, but the gift becomes irrevocable when the latter dies. A similar gift under civil law would be invalid, since it would be made mortis causa. Hence, the two institutions are quite different.
3.3 Gifts inter vivos
In terms of gifts inter vivos, there is once again the issue of liberal intent and acceptance on the part of the donee, which are common to both civil and common law. In addition, there has to be a divestiture of the property in favour of the donee. On the other hand, civil law requires that there be an irrevocable transmission of the right of ownership to the donee, while the common law requires, instead, that the donee be placed in possession of the property given. In one case, the right is transmitted whereas in the other, it is the property itself that is transferred. This difference is a result of a difference in the concept of property law under the two systems. This distinction is mitigated, if not eliminated, if the gift is made through a formal deed or an instrument under seal.
In terms of the manual gift applicable to movable property, it would seem that the gift of personal property is similar in common law since both require delivery in order to be complete. Here again, there is a difference since under civil law, delivery concerns the right to the thing that is being transmitted rather than the thing itself. Therefore, the handing over of a cheque will be a sufficient delivery of movable property in civil law, whereas the cheque would have to be presented for payment and honoured for the gift to be complete in common law.
3.4 Other differences between civil and common law
With respect to conditional gifts, common law requires that the conditions required for each type of gift be present and complete for a gift to be valid; if one condition is missing, the gift does not exist. On the other hand, in the case of a valid gift, it is possible that, even though the title of “ownership” of the property is transferred to the donee, he or she may not be able to benefit from it until a later date. Thus, if the required conditions are present and there is a gift, the gift cannot be conditional, only the benefit to the donee can be postponed.
In civil law, the only limitation is that the condition should not be potestative, which means it should not depend on the will of the donor. A gift that is conditional on the sale by the donor of his or her stamp collection would be invalid as such a sale depends entirely on the donor's discretion. A gift may be conditional on an event that does not rely solely on the wish or will of the donor. Such would be the case if the gift of property is under the condition that the Toronto Stock Exchange index reaches a set or specified level.
With respect to disguised gifts, they are only allowed in civil law since common law considers the nature of the deed that would contain this gift, rather than its effect. Thus a sale below the market value of the property will still be deemed a sale in common law, even if, in civil law, the difference between the value of the property and the amount of the consideration paid may be the “subject matter” of a gift. The same rule will apply to indirect gifts.
A final difference pertains to the scope of the term gift/don under the two private law systems. In civil law the terms seems to refer only to the nominate contract in the Civil Code of Quebec. It is clear that common law will consider a gift/don regardless of the form of the instrument. Thus, common law will recognize the validity of a gift, whether it is made in a trust, a valid will or if it respects the conditions specific to gifts.
Finally, it should be noted that in civil law, a gift must be made through a notarial act en minute, except in the case of a manual gift and indirect and disguised gifts. In common law, all that is needed is that the conditions required for the gift be met, regardless of the form.
Under common law, a gift/don will be much closer to the concept of liberality under civil law than to the simple contract of gift. In summary, despite certain elements common to both systems, the use of the term gift/don covers two different realities in civil law and common law, even though there are similarities on some points.
 PAJLO/POLAJ, Canadian Common Law Dictionary: Law of Property and Estates / Dictionnaire canadien de la Common Law: Droit des biens et droit successoral,(Cowansville, Quebec, Yvon Blais / The Canadian Bar Association, 1997). The French common law terms that are used are taken from this dictionary. If the term is not included therein, we use the Juriterm databank at the University of Moncton's Faculty of Law Centre of Legal Translation and Terminology.
Commissioner of Taxation of the Commonwealth v. McPhail,[1967-68] 41 A.L.J.R. 346 at 348 (hereinafter “Commissioner of Taxation”), cited in: Canada v. Zandstra,  2 F.C. 254 (Federal Court - Trial Division) (hereinafter “Zandstra”).
 Black's Law Dictionary, 7th ed., Garner, B.A., Editor, (Minnesota, West Group, 1999); PAJLO/POLAJ, op. cit. note57; DUKELOW, D.A. and NUSE, B., The Dictionary of Canadian Law, 2nd ed., (Scarborough, Carswell, 1995); BURKE, J., Jowitt's Dictionary of English Law, 2nt ed., (London, Sweet & Maxwell, 1977).
 Canada (Minister of National Revenue) v. Burns, 88 D.T.C. 6106 (Federal Court of Appeal) (hereinafter “Burns”); Hudson Bay Mining and Smelting Co., Limited v. The Queen, 86 D.T.C. 6244 (Federal Court of Appeal) (hereinafter “Hudson Bay Mining”); Canada (Minister of National Revenue) v. McBurney, 85 D.T.C. 5433 (Federal Court of Appeal) (hereinafter “McBurney”). Black's Law Dictionary, ibid.; PAJLO / POLAJ, ibid.; DUKELOW, D.A. and NUSE, B., ibid.; BURKE, J., ibid.
 Cain v. Moon,  2 Q.B. 283 at 286 (Lord Russel of Killowen C.J.) cited in Brown v. Rotenburg,  4 D.L.R. 139 (Ontario Court of Appeal) and in Re Kuyat, 33D.L.R. (2d) 153 (British Columbia Court of Appeal).
 Bruce ZIFF, Principles of Property Law, 2nd ed., (Toronto, Carswell, 1996), p. 140-142; Mary Jane MOSSMAN and William F. FLANAGAN, Property Law - Cases and Commentary, (Toronto, Emond Montgomery Publications, 1998), p. 471-472; Derek MENDES DA COSTA, Richard J. BALFOUR and Eileen S. GILLESE, Property Law - Cases, text and materials, 2nd ed., (Toronto, Emond Montgomery Publications, 1990), 5:55-5:62.
 Re Zachariuc; Chevrier v. Public Trustee, (1984) 16 ETR 152 (Ontario District Court), as discussed in: M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 471-481; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. See also: B. ZIFF, ibid.
 B. ZIFF, ibid.; M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 471-472.
 B. ZIFF, ibid. at 140; M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 471; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:55.
 B. ZIFF, ibid. at 135; M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 436.
 Thomas v. Times Book Co. Ltd.,  1 WLR 911 (High Court of England). B. ZIFF, ibid.; M. J. MOSSMAN and W. F. FLANAGAN, ibid.; D. MENDES DA COSTA, R. J. BALFOUR and . S. GILLESE, op. cit. note 62 at 5:29-5:38.
 Johnstone v. Johnstone, (1913) 12 D.L.R. 537 (Ontario Court of Appeal). B. ZIFF, ibid.; M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 471; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:8-5:12.
 B. ZIFF, ibid.; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:8.
 Cochrane v. Moore, (1890) 25 Q.B.D. 57 (Court of Appeal of England) (hereinafter “Cochrane”). B. ZIFF, ibid. at. 135-136; M. J. MOSSMAN and W. F. FLANAGAN, op. cit note 62 at 436-442 and 446; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:2-5:8.
 This principle is found in Milroy v. Lord (1862), 45 E.R. 1185 (hereinafter “Milroy”) cited in: B. ZIFF, ibid. at 136; M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 445; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:15.
 M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 470-471; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:29-5:30.
 In re Cole,  1 Ch. 175 (CA) cited and discussed in: M. J. MOSSMAN and W. F. FLANAGAN, ibid. at 447-457; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:13-5:20. See also: B. ZIFF, op. cit. note 62 at 137-139.
 B. ZIFF, ibid. at 136; M. Jane MOSSMAN and W. F. FLANAGAN, ibid. at 446.
 B. ZIFF, ibid. at 139; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:2.
 B. ZIFF, ibid. at 139-140; M. J. MOSSMAN and W. F. FLANAGAN, op. cit. note 62 at 457; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:22-5:29.
 PAJLO/POLAJ, op. cit.note 57. See hereinafter the comparative study on the scope and distinctions under Quebec's civil law.
 J. MOSSMAN and W. F. FLANAGAN, op. cit. note 62 at 470-471; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:44-5:54.
J. MOSSMAN and W. F. FLANAGAN, ibid. at 470; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, ibid. at 5:44.
 Art. 704 and 731 C.C.Q.
 PAJLO/POLAJ, op. cit. note 57. See hereinafter the comparative study on the scope and distinctions under Quebec's Civil Law.
 Cochrane v. Moore, supra note 70. B. ZIFF, op. cit. note 62 at 136; M. J. MOSSMAN and W. F. FLANAGAN, op. cit. note 62 at 443-445; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:37-5:38. See also: Eileen S. GILLESE, The Law of Trusts, Concord (On.), Irwin Law, 1997 at 37 ff.
 They consists in the three certainties, concepts that can be found in the decision Knight v. Knight (1840) 49 E.R. 58 (Ch). The three certainties are: 1) certainty on intention to create a trust; 2) certainty of subject; and 3) certainty of object.
 This principle is found in Milroy v. Lord, supra note 71. B. ZIFF, op. cit. note 62 at 136; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:15 and 5:37. ; M. J. MOSSMAN and W. F. FLANAGAN, op. cit. note 62 at 445.
[85 Art. 1810 C.C.Q. D. VINCELETTE, loc. cit.note 15, para. 8 at 435; M. D. CASTELLI, loc. cit. note 15 at 959.
 Allan W. S. Tite v. Canada (Minister of National Revenue), 86 D.T.C. 1788 (Tax Court of Canada) (hereinafter “Allen W.S. Tite”). The basis of the rule is that in common law, as soon as there is any consideration, there can be no gift: Burns, Hudson Bay Mining and. McBurney, supra note 60.
 Art. 1820 C.C.Q. P. CIOTOLA, loc. cit. note 17, para. 22 at 8; D. VINCELETTE, loc. cit. note 15, paras. 12-13 at 436-437.
 G. BRIÈRE, op. cit. note 13, para. 145 at 101; R. COMTOIS, loc. cit. note 18, para. 513-514 at 195-196.
 B. ZIFF, op. cit. note 62 at 139; D. MENDES DA COSTA, R. J. BALFOUR and E. S. GILLESE, op. cit. note 62 at 5:23-5:24.
 Allan W. S. Tite supra note 86. See also: Gervais v. Canada, 85 D.T.C. 5004 (Federal Court Trial Division) (hereinafter “Gervais”) and The Queen v. Littler, 78 D.T.C.6179 (Federal Court of Appeal) (hereinafter “Littler”).
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