WEL NEWSLETTER February 2024, Vol. 13, No. 11 | |
Dear Kenneth,
The Valentine’s Edition, as you know, is always my favourite! Happy Day of Love! I hope everyone has a fun-filled Valentine’s Day! May our love prevail and continue to heal the world. This year I have prepared a special selection of tunes on Spotify: "Kim's Valentine's Day Playlist". Listen & enjoy!
I found a new documentary that I love, Pompeii: Secrets of the Dead on Disney+. I first visited Pompeii when I was 16 on a Roman Life Trip through school since I studied Latin for 5 years. I was fascinated by it. I have always been fascinated with all thing’s archaeology, anthropology, paleontology, geology, ancient civilizations, and Indiana Jones! Speaking of which the most recent 2023 release was fun too, Indiana Jones and the Dial of Destiny. One last item, the Grammy Awards - anyone watch? Trevor Noah rocks! It was a fun show…better than the Golden Globes for certain. One point of shameful amusement, a “you know you're old when” moment, SZA an artist who I thought was literally called SZA (as in say the letters…) until the Grammys when Trevor Noah kept referring to “Sizza” performing live, and I had no idea he meant SZA. Ok, but at least I knew who she was and what she sings in my defence!! Do you?!
This month already we have had a few legal presentations on topics including Joint Tenancy and POA Misuses & Abuses. We welcome our new Law/IT Applications Clerk, Jordan Atkinson. Apologies if any of you received 2 newsletters last month, but we had a new provider and well this stuff happens from time to time - the imperfections of the digital era - mea culpa!
This month, Canada celebrates Black History Month and the theme in 2024 is: Black Excellence: A Heritage to Celebrate; and a Future to Build. The City of Toronto has a dedicated web page for upcoming events: https://www.toronto.ca/explore-enjoy/history-art-culture/black-history-month/. Destination Toronto also has a web page of local events to discover and participate in: https://www.destinationtoronto.com/leisure-blog/post/black-history-month-events-toronto/. Be sure to take part in some of the many local learning initiatives as well as celebratory events.
We are still trying to hire an experienced litigator. If any of you have any suggestions, please spread the word-we could use some help getting the message around.
To make up for my rather long message last month, I will end it here.
As ever, enjoy the read,
Kim
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1. ONTARIO LEGAL CONFERENCE, FEBRUARY 7, 2024 |
Kimberly Whaley and Gabriella Banhara attended the OBA Ontario Legal Conference “Family, Estates and Real Estate Law” which brought together lawyers and speakers from all over Canada. The Presumption of Resulting Trust was discussed within the lens of Joint Tenancy and Trust claims. The panelists included Kim Whaley, Zahra Moayyed and Moderator, Raphael Tachie. WEL Partners' paper entitled, “A Gift, Trust, or Joint Tenancy? Understanding the Presumptions of Advancement & Resulting Trust and Principles Associated with Joint Tenancy” prepared by Gabriella Banhara can be found here.
The panelists sent a message loud and clear; placing property in joint title to avoid probate fees is not worth the risk of the litigation that may ensure after. Ontario probate fees are $0 for the first $50,000 of the Estate, and for the remaining value, a 1.5% tax applies. Such option presents the potential to save a small value for the Estate but must be weighed against the potentially astronomical cost of litigation. Lawyers and clients alike are reminded to consider deeds of gift, trust vehicles, or other means of documenting actual intention when it comes to legal and beneficial ownerships. Unnecessary confusion respecting the intent of a parent in both living and deceased circumstances, often raises the question of whether the parent’s intent was:
- for their property to result back to them solely to form a part of their estate after death; or
- to gift the adult child the property by right of survivorship.
Important cases that were discussed included Jackson v Rosenberg (notably, under appeal) and, Petrick (Trustee) v Petrick.
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2. WEL PARTNERS ON MISUSE AND ABUSE OF POWERS OF ATTORNEY, FEBRUARY 8, 2024 |
On February 8, Kim Whaley and Brett Book provided expertise of the misuse and abuse of Powers of Attorney for financial advisors/planners and life agents across Canada.
The hour one session will be released sometime in 2024 and will be available on CE Corner. CE Corner is a platform with over 30,000 free subscribers; anyone can register on the site and take their first four courses for free. WEL Partners was honoured to have been invited to contribute to CE Corner’s growing database of resources for professionals. We look forward to seeing the finished product sometime this year.
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3. STEP CANADA’S CLIENT SERVICE RESOURCE: A GUIDE FOR ASSISTING PERSONS IN VULNERABLE SITUATIONS |
Earlier this year, STEP Canada released its highly anticipated Client Service Resource (“CSR”), A Guide for Assisting Persons in Vulnerable Situations (the “Guide”). The Guide is the outcome of a cross-sector conversation in 2021 and provides a valuable resource to help TEPs navigate complexities arising when assisting clients in vulnerable situations. Notably, the Guide provides an overview of the United Nations Convention on the Rights of Persons with Disabilities (“CRPD”), resources on ageism, ableism, unconscious and implicit bias, and having conversations with clients. The Guide also takes a deep dive into professional and industry codes of conduct, provincial office of the Public Guardian and Trustee and the Public Curator.
Kim Whaley assisted with colleagues, Kathleen Cunningham, Marie Beaulieu, Elaine Blades, Carole Cohen, Martin Franssen, Peter Weissman, Adam Wiseman, and Alison Leaney, in creating the Guide, which can be accessed here.
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The Canadian Bar Association’s (“CBA”) Annual General Meeting (“AGM”) was held on February 8, 2024. The AGM was well attended by members from across Canada who gathered virtually to vote on a few important resolutions.
Elder Abuse
Importantly, the CBA Elder Law section, which Kim Whaley is an Honorary Member-at-Large and Brett Book is a Member-at-Large, presented resolution 24-08-A, Criminal Code Amendments to Combat Elder Abuse. The resolution, which can be found here, sought support for reforms and new offences related to elder abuse to address aspects of elder abuse that are currently missing in the Criminal Code of Canada, while retaining the CBA’s opposition to a specific offence of elder abuse.
Thanks to the hard work of the CBA’s resolution subcommittee, the leadership of Krista James who has worked tirelessly for the past year in getting this together, and the submissions of executive members Graham Webb of the Advocacy Centre for the Elderly and Nithila Murugadas of NIKA Law LLP, this resolution was passed.
Medical Assistance in Dying
Notably, the CBA also heard resolution 24-13-A, Medical Assistance in Dying for Individuals Whose Sole Underlying Medical Condition is a Psychiatric Condition. The resolution, which can be found here, sought support for the CBA position that prior statements supporting Medical Assistance in Dying (“MAiD”) for those whose sole underlying condition is a psychiatric condition be withdrawn and that the CBA urge the federal government not to extend MAiD to those people “unless and until there is a reliable manner to determine whether the psychiatric conditions are irremediable.” This resolution was defeated, meaning that the CBA will maintain its support for allowing people to seek a medically assisted death solely on the grounds of a mental disorder.
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WEL PARTNERS HONOURS TRAILBLAZER MARY ANN SHADD CARY | |
By Brett Book
You may have noticed that Canada Post has come out with a new commemorative stamp for Black History Month. If you’re like myself, you may also be curious to learn the story of the name behind the face. This article will highlight the life and times of Mary Ann Camberton Shadd Cary (“Mary”), educator, publisher, lawyer, and abolitionist.
Mary was born on October 9, 1823, in Wilmington, Delaware in the United States of America.[1] She was the first of 13 children born into a prominent abolitionist family; her father, Abraham, was a leader in Delaware’s free Black community.[2] In fact, their home was one of the stops along the Underground Railroad, providing assistance to freedom seekers into Pennsylvania and further north to Canada.[3] The Shadd’s eventually moved to West Chester, Pennsylvania, where Mary was educated in a Quaker-sponsored school. By the age of 16, however, Mary would return to Wilmington where she would open a school for Black children.[4]
After the Fugitive Slave Act of 1850 was passed, making it “legal” for free Black people to be captured and re-enslaved, the Shadd family moved to Windsor, Ontario.[5] Having already been teaching for close to ten years, Mary’s services were requested by Henry and Mary Bibb, Black newspaper publishers living in and around the Windsor area. In 1851, Mary moved to Windsor and opened an integrated private school for children of freedom seekers.
In addition to teaching, Mary became heavily involved in community affairs. In 1852, she published a pamphlet entitled A Plea for Emigration; or Notes of Canada West which highlighted Canada as a preferable destination for enslaved and free African Americans.[6] Mary was a fierce advocate and due to her outspokenness, a controversial figure at the time. She often challenged community leaders, both Black and White. Eventually, however, her unwavering convictions would cause her to lose her teaching position.[7]
After leaving her post as a teacher, Mary focused her rebellious and courageous nature into the art of dissemination, creating The Provincial Freeman, a paper which wrote on slavery abolition and reflected on the condition of Black women.[8] To ensure the paper was published, Mary concealed her identity by working with publisher and abolitionist, Samuel Ringgold Ward, who became the public editor. She also reduced her name to her initials to hide her gender.[9]
Mary’s paper was first published on March 24, 1853, in Windsor, Ontario, making her the first Black woman in North America to establish and edit a newspaper.[10] Just over a year later, on March 25, 1854, The Provincial Freeman began publishing weekly out of Toronto. The motto of the paper was “Self-reliance is the true road to independence.” The paper championed women’s rights and engaged in investigative reporting while advising readers to insist on fair treatment and seek legal redress where their efforts failed.
According to Huda Hassan, “What Shadd Cary understood was the political and social power of newspapers in disseminating reflections and information on their dire conditions, cautioning a future under these systems.”[11] Unfortunately, due to financial constraints, the paper stopped its production in 1857.[12]
Mary soon wed Toronto businessman Thomas F. Cary in 1856. Sadly, in 1860, Thomas died. After the loss of her husband, Mary returned to America where she helped Martin Delany recruit Black soldiers during the Civil War.
After the Civil War ended, Mary enrolled in the law program at Howard University School of Law, an all-Black male school, becoming Howard’s first Black female law student.[13] At the age of 60, she graduated from Howard, becoming one of the first women to obtain a law degree in America.[14] True to her spirit, Mary would eventually go on to sue Howard for discrimination.
Mary would later join the women’s suffrage movement and in 1874, addressed the House Judiciary Committee regarding women’s right to vote.[15]
Mary Ann Shadd Cary died on June 5, 1893. Her lifetime was marked by many firsts and achievements and her long-lasting contributions to freedom and equal rights resonate to this day.
As a testament to her legacy, Mary received many eponyms including the Mary Shadd Public School which opened in Scarborough in 1985, designation as a National Historic Person in Canada in 1994, and the Canada Post release of a commemorative stamp in her honour in January 2024.[16] Mary has been commemorated with a bronze bust and historical plaque in Chatham Ontario. You can visit the Buxton National Historic Site and Museum to see her printing press on display here.[17]
A virtual tour of her family barn at the Buxton Historical Site can be seen here.
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[1] Adrienne Shadd, “Mary Ann Shadd” (November 6, 2013), The Canadian Encyclopedia, accessed online: https://www.thecanadianencyclopedia.ca/en/article/mary-ann-shadd [Adrienne Shadd].
[2] Her father was the first recorded African American abolitionist and one of the first Black persons in Canada to become an elected official. Her sister Eunice was the first woman to graduate from Howard University.
[3] Adrienne Shadd, supra.
[4] Ibid.,
[5] The Fugitive Slave Act led to the exodus of thousands of formerly enslaved people into Canada where slaved had been abolished in 1833 by Great Britain under the Slavery Abolition Act, 1833.
[6] Our Ontario, “Ontario Black History - Mary Ann Shadd Cary”, accessed online: https://vitacollections.ca/multiculturalontario/476/exhibit/10 where it is shared that from this pamphlet Mary Ann wrote, “[in Canada]…If a colored man understand his business, he receives the public patronage the same as a white man. He is not obliged to work a little better, and at a lower rate – there is no degraded class to identify him with, therefore every man’s work stands or fails according to merit, not as is his color.”
[7] Adrienne Shadd, supra.
[8] Huda Hassan, “How Mary Ann Shadd Cary set the blueprint for abolitionist feminist writing” (October 27, 2022), CBC Arts – Against the Grain, accessed online: https://www.cbc.ca/arts/how-mary-ann-shadd-cary-set-the-blueprint-for-abolitionist-feminist-writing-1.6631709 [Hassan].
[9] Adrienne Shadd, supra.
[10] Adrienne Shadd, supra.
[11] Hassan, supra.
[12] Ibid.
[13] Mary was not only a student, but also taught at Howard University.
[14] Ibid.
[15] Bayan Atari, “Mary Ann Shadd Cary, Howard University’s First Black Female Law Student” (March 30, 2023), Howard University – The Dig, accessed online: https://thedig.howard.edu/all-stories/mary-ann-shadd-cary-howard-universitys-first-black-female-law-student-0
[16] Adrienne Shadd, supra.
[17] Ontario Black History, supra.
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(i) DOES THE COURT HAVE JURISDICTION TO VARY OR TERMINATE A CHARITABLE TRUST? | |
By Albert H. Oosterhoff
1. Introduction
The question raised in the title is not raised that often, but it is an important one, I’d like to address it by reference to two cases. One, Re Baker,[1] is almost 40 years old. The other, The Bank of Nova Scotia Trust Company v Burnett,[2] to which, for the sake of economy, I shall refer simply as Burnett, is quite recent. It refers to Baker, though not in detail. The answer to the question is Yes, but the jurisdiction must be exercised sparingly and not indiscriminately. Further, the Public Guardian and Trustee in Ontario or the Attorney General in other provinces has a right to attend and to be heard.
2. Re Baker
The testator, Harold Baker, had been a physician at the Northwestern General Hospital in North York for many years (the “Hospital”). He died in 1980. His Will left the residue of his estate in trust to pay the net income to his wife, Grace Baker, for life, with power in the trustees to encroach on the capital in her favour. On the death of the survivor of him and his wife the trustees had to pay the residue to the named hospital “to be used for the general purposes of the hospital”. He added a wish (clearly non-binding) that the residue be used to construct an auditorium in the hospital that would bear his and his wife’s names.
The hospital had been incorporated in 1950. In 1980 another corporation, Northwestern General Hospital Foundation (the “Foundation”), was created. Its objects were to establish and hold funds for the advancement of medical education and research and related charitable activities, and inter alia also “by way of gift to Northwestern General Hospital”. Thus, its objects were not to maintain and operate a general hospital. In 1982, yet another corporation, the Harold, and Grace Baker Centre (the “Centre”), was created. Its objects were to maintain a nursing home, a retirement home, a day care centre, and a nursery school in North York. It could also transfer funds to the Foundation. Its objects also did not include the operation of a general hospital. However, the Hospital, Foundation, and Centre were all charities.
All the beneficiaries under the Will brought an application for various orders the effect of which would be allow the residue under the Will to be used for the purposes of the Foundation and the Centre. They argued: (1) that the Public Trustee did not have standing to argue the merits; and (2) that the application should be granted either under the rule in Saunders v Vautier[3] or based on the inherent jurisdiction of the court. (The notice of motion seems to have invoked the provisions of the Variation of Trusts Act[4], however the applicants abandoned that statute at the opening of argument.) The Public Trustee (as that corporation sole was then called) opposed the application.
Justice White held that the Charities and Accounting Act[5] in its entirety requires the Public Trustee to protect the public interest and monitor the disposition of property bequeathed for charitable purposes. Thus, the Public Trustee serves as an invigilator of the executor or trustee. Historically, the Attorney General acted on behalf of the Crown in its parens patriae jurisdiction over charities and the Act confers that jurisdiction on the Public Guardian. Alternatively, if necessary, the Public Guardian can be considered to be an amicus curiae. Later in the judgment, at paragraph 30, Justice White relies also on Re Royal Society’s Charitable Trusts[6] to make the point that the court’s jurisdiction is confined to cases in which the Attorney General formerly and now the Public Guardian, “acting on behalf of the Crown as parens patriae consents or does not object to the variation”. Thus, the court should defer to the Public Guardian in charity matters.
On the Saunders v Vautier issue, Justice White acknowledged that a charity can rely on the rule to terminate a trust under which it has been given property absolutely (as distinct from a charitable trust that gives it only the income.[7] However, that it not what the applicants sought to do. They did not seek to terminate the Trust. Rather, they sought to divert the residue from the charity to which Dr Baker gave it in his Will to a different charity. Thus, they could not rely on the rule.
On the inherent jurisdiction of the court issue, the Public Trustee argued that the court lacks jurisdiction to re-write a charitable trust in whole or in part. The court’s role is not to create a trust but to support the original trust. Thus, the court could not redirect the reside to the Foundation or the Centre because they were not named in the Will. Justice White noted that the application did not seek to apply the cy-près doctrine and in any event, it could not be applied since there was no impracticability in carrying out the Trust.
Justice White agreed with Public Trustee’s argument and held that while the three corporations were in some respects inter-related, the objects of the Foundation and the Centre differed from that of the Hospital, and it was only the latter to which the testator directed the residue to be paid. He also agreed that it is not the role of the court to rewrite a trust, and relied, inter alia, on a statement by Farwell J in Re Walker,[8] who said, “I decline to accept any suggestion that the court has an inherent jurisdiction to alter a man’s will because it thinks it beneficial”. He also referred to Chapman v Chapman,[9] which limited the court’s jurisdiction in this regard to four circumstances. However, with respect, this reference seems inapt since Chapman was effectively overruled in England and elsewhere in jurisdictions that enacted the Variation of Trusts Act. Indeed, that statute was enacted to overcome Chapman.
Very significantly Justice White noted, with reference to Re Royal Society’s Charitable Trusts,[10] that the court must exercise its jurisdiction in charitable matters sparingly and not indiscriminately.
Since the Public Trustee opposed the proposed variation, Justice White concluded that the court had no jurisdiction in the matter and dismissed the application.
3. Burnett
The Burnett case is somewhat different. The testator, a retired colonel, had a keen interest in military history. He made his Will in 1957 and died in 1961. The Will left his property on trust to pay the income to his spouse, his children, and certain of his grandchildren. He directed that after the death of the income beneficiaries the residue should be held upon a perpetual trust, the income of which he directed to be used to fund publication of his own unpublished manuscripts if any, as well as Canadian history books, with a bias toward military history. The court interpreted this trust, rightly it seems, as a charitable trust for education.
The Will was unclear and that resulted in disagreement among the grandchildren. The relevant portions of paragraph 3(e) of the Will read:
(i) Upon the death of either of my said children, to pay his or her share of the said net income to the children of my said daughter in equal shares, share and share alike; PROVIDED that if my son die [sic], leaving one grandchild only living at the time of my death, to pay my son’s share of the said net income to all my grandchildren in equal shares, and upon the death of my other child, BETTY ELEANOR, to pay the said net income to all my grandchildren in equal shares.
(ii) Upon the death of any of my grandchildren, to pay his or her share to my remaining grandchildren in equal shares; Upon the death of all my grandchildren, to pay the said net income into a fund to be used annually to publish any of my manuscripts remaining unpublished and after such manuscripts have been published, to pay the said net income to publish Canadian historical books with a strong bias towards the military history of Canada, the choice of such books to be at the discretion of the Dominion Archivist.
The testator’s wife died in 1977. He had two children, Robert and Betty. Betty died in 2008, survived by two daughters, Kathryn, and Betty Jr, both of whom were alive at the testator’s death. Robert died in 2020, survived by two children, Robert Jr and Rosalie. Robert and his first wife adopted the children in 1962 and 1964. Both were alive at the testator’s death, but they had not yet been adopted by then. Robert Jr disappeared in 1970 and, despite the trustee’s reasonable efforts, could not be located. In 2022 Gilmore J ordered that he was not entitled to further notice of the proceedings. Kathryn and Betty Jr have been receiving a share of the net income from the trust since Betty’s death.
In 2022 Rosalie swore an affidavit in which she claimed that after her father Robert’s death she was also entitled to share in the income. She sought to wind up the trust for the benefit of Kathryn, Betty Jr, and herself, but later she abandoned the claim to wind up the trust. Kathryn and Betty Jr argued that Rosalie was not entitled to a share of the income. They did not seek a winding up or variation of trust.
The Public Guardian and Trustee (“PGT”) took the position that the capital of the trust forms a perpetual charitable trust for education, subject only to the interests of the income beneficiaries. The PGT stated that it could not agree to winding up the trust for the benefit of the testator’s descendants because that would conflict with the testator’s charitable purpose. The PGT took no position about which grandchildren were entitled to income.
Justice Dietrich concluded that it was clear that while Betty and Robert were alive, they were entitled equally to the income. Further, when Betty died her children became entitled equally to her share. The Will also provided that when Robert died, Betty’s children were entitled to share in the income Robert had been receiving during his life. But the eligibility of Robert’s children to his share of the income was conditional. A surviving child of Robert was entitled if: (a) the grandchild was living at the testator’s death; and (b) Robert had only one child living at the testator’s death.
It was clear that both Rosalie and Robert Jr were Robert’s children by adoption and although they were adopted after the testator’s death, under the provisions of section 217 of the Child, Youth, and Family Services Act, 2017[11] and its predecessor, the Child Welfare Act, as interpreted by the courts, when a testator made a will before the 1970 amendments to the former Act and when a child is adopted after the testator’s death, the child is considered to be issue of the testator. While the testator appears to have closed the class of beneficiaries at the date of his death, since Rosalie and Robert Jr were then alive, they qualified as the testator’s grandchildren.
However, the Will inexplicably required that for a child of Robert to share in his share of the trust income there could be only one child of Robert. There was no evidence of surrounding circumstances at the time the Will was made to explain this condition and, therefore, since Robert had two children who survived him and who were living at the testator’s death, neither could share in his share of the income. Consequently, when Robert died, his share of the income also fell to be divided equally among Betty’s two children, Kathryn, and Betty Jr.
Clause 3(e)(ii) of the Will did continue to provide that on the death of any of the testator’s grandchildren, his or her share was to be paid “to my remaining grandchildren”. However, because they did not qualify under the conditions the Will imposed, Rosalie and Robert Jr were not grandchildren entitled to income on their father’s death. Hence, only Kathryn and Betty Jr could qualify as remaining grandchildren.
Justice Dietrich then goes on to consider how the Trust is to be administered on the death of Kathryn and Betty Jr. and asks the question whether the trust can be wound up and the income and capital be paid to the grandchildren. Her remarks that follow would seem to be dicta, since Rosalie abandoned her claim to have the trust wound up. Nevertheless, they are worthy of consideration since she makes some important points.
Justice Dietrich accepted the submission of the PGT that a trust for the advancement of education, such as this trust, if a valid charitable trust. She also accepted the PGT’s submission that the gifts of income during the lifetimes of the life tenants did not taint the testator’s overall charitable intent of a perpetual gift to charity and cited a couple of important cases for this point.[12] She noted that the Will did not empower the Trustee to wind up the trust and distribute the income or capital among the Testator’s grandchildren. Moreover, while the court has broad jurisdiction over charities, including an inherent jurisdiction to vary charitable trusts, that jurisdiction must be exercised sparingly and not indiscriminately. As an example, she pointed to the court’s scheme-making and cy-près jurisdictions. But she noted by reference to Re Baker[13] and other cases that these jurisdictions are not available to the court unless the PGT consents or does not object to the proposed variation.
Her Honour concluded by noting that, even if she had the jurisdiction (which she did not since the PGT refused to consent), winding up or varying the Trust for the benefit of any descendant of the Testator would not be in furtherance of the charitable purposes of the Trust.
4. A Concluding Comment and Caveat[14]
It is indubitable that the PGT has very broad supervisory powers over charities and therefore it appropriately refused to consent to the applications made in Baker and Burnett. It was its right and obligation to prevent diversion of the property given for specific charitable purposes in both of those cases. Similarly, it has supervisory jurisdiction over any trust gift, bequest, or trust given to a charity.
But this does not mean that the PGT can always prevent an action that a charity proposes to take. I refer to Re Centenary Hospital Association[15] on this point. The Association operated a public hospital that was incorporated under the Corporations Act,[16] and thus its purposes were charitable. It owned property adjacent to the hospital and wanted to construct a medical arts building on it, integrated with the hospital, to provide offices for specialists and other health and related services. The project, which was designed to earn income for the hospital, had the blessing of the Minister of Health subject to the approval of the Public Trustee. The hospital had obtained a ruling from the Minister of National Revenue to the effect that the building would be treated as an investment and not as a business. But the Public Trustee regarded the project as a business and refused to approve it. The Public Guardian believed the hospital would not be occupying the land itself and would therefore not be in actual use or occupation of the land for charitable purposes. The Association brought an application for an order determining whether the Public Trustee had any supervisory jurisdiction over the hospital.
Justice Osler noted that under the Public Hospitals Act[17] the Minister of Health has broad powers over public hospitals, including its financial affairs and the acquisition and use of property by them. Hence Justice Osler concluded in paragraph 20:[18]
Thus, with the exception of property subject to specific trusts, the Hospital corporation has the power to deal with its assets, including its lands, in a manner as unfettered as provided for any corporation under the Corporations Act subject only to the necessity to obtain the approval of the Minister of Health for various activities, including the use of its lands, buildings, and other premises.
Justice Osler went on in paragraphs 64 and 65 to say:
64 The activities of public hospitals were not covered by the Charities Accounting Act[19] and in my view the effect of the amendment[20] was to extend the coverage of that statute to corporations incorporated for doing the same things hitherto done by non-incorporated trustees who carried out charitable purposes. Had it been intended to give the Public Trustee, for the first time, power to supervise the financial affairs of public hospitals, quite independently of and possibly in a manner that would conflict with the powers of the Lieutenant-Governor in Council and the Minister under the Public Hospitals Act, it would have been plainly so stated in the legislation.
65 It was submitted by counsel for the Hospital, and not disputed by counsel for the Public Trustee, that in all other cases where the Public Trustee was intended to exercise powers under particular statutes, such powers were expressly conferred. It is impossible to reconcile the view that the Public Trustee has powers to supervise or question the administration of public hospitals with the express provisions in the Public Hospitals Act that such institutions are to have all the powers conferred by the statute under which they are incorporated and the stipulation in the Charities Accounting Act that that statute was not to apply to or affect any rights which any person had under any other Act.
Accordingly, Justice Osler held that the Public Trustee lacked power to refuse to approve the project.
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[1]1984 CarswellOnt 560, 47 OR 2d 415 (HC).
[2]2023 ONSC 3639.
[3] (1841), 4 Beav 115, 49 ER 282, affirmed 1 CR & Ph 240, 41 ER 482.
[4] RSO 1980, c 519.
[5] RSO 1980, c 65.
[6] [1956] 1 Ch 87.
[7] See, e.g., Wharton v Masterman, [1895] AC 186; Re Beresford (1966), 57 DLR 2d 380 (BCSC).
[8] [1901] 1 Ch 879 at 885.
[9] [1954] AC 429.
[10] Supra.
[11] SO 2017, c 14, Sched 1.
[12] Re Doering, 1948 CarswellOnt 77, [1948] OR 923; and Canada Trust v Shaver, BCSC 54, paras 44, 46, and 47.
[13] Supra.
[14] The alliteration was unintentional.
[15] 1989 CarswellOnt 530, 69 OR (2d) 1 (HC)
[16] RSA 1980, c 95.
[17] RSO 1980, c 410.
[18] Emphasis supplied.
[19] Footnote 5, supra.
[20] That is the amendment made by SO 1951, c 10, s 23, which brought corporations incorporated for a “religious, educational, charitable or public purpose” under the Act by deeming them to be trustees within the meaning of the Act. That provision is contained in s 1(2) of the Act.
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(ii) A FIDUCIARY MAY NOT ENGAGE IN SELF-DEALING | |
By Albert H. Oosterhoff
1. Introduction
The rule mentioned in the title is such a basic and well-known rule that you would think it would not merit a comment. It means, among other things that a fiduciary may not purchase property from the estate. A fiduciary can avoid the rule if the testator gives her an option to purchase property below market value. So also, if all the beneficiaries are sui juris and consent to the proposed sale, it can proceed. And if the court concludes that a purchase is clearly for the benefit of the beneficiaries it can authorize the sale. But otherwise, the rule is applied strictly. However, fiduciaries will occasionally try to bypass the rule, as in Re Dewberry Estate.[1] So perhaps a blog will not be amiss.
2. Facts
The deceased, William Dewberry, died intestate in 2016, survived by his three daughters, Angela, Tracey, and Elaine. Angela obtained a grant of administration. She sold the deceased’s truck and the contents of his house, and the only main asset remaining was the deceased’s home. It was encumbered by two mortgages in the total amount of $70,000. In 2017 Angela obtained an appraiser’s report that valued the property on the date of death at $170,000. She listed the property for sale, but the highest offer received was only $155,000, so she withdrew the house from the market. Then she moved onto the property but did not pay any rent to the estate. The mortgages had to be refinanced in 2020. To accomplish the refinancing, three appraisals were obtained which valued the property at $145,000, $152,000, and $284,000. Angela would like to purchase the property from the estate. She entered negotiations with her sisters, but they could not agree on the price. So, she brought an application for an order authorizing the sale of the property to herself of $179,600. Tracey opposed the application on the ground that there was no basis for selling the property at less than the current fair market value of $284,000, and Elaine apparently agreed with Tracey.
3. Analysis and Judgment
The court held that, as a fiduciary, Angela owes a duty of loyalty to the beneficiaries. She is in a conflict of interest if she purchases the property, and the purchase would amount to a breach the duty of loyalty. Angela argued that her sisters would be unjustly enriched if she were forced to purchase at the higher price, since she had expended much time and effort, as well as her own funds to protect the property. However, as the court noted, recovery of her expenses and her right to compensation could be dealt with when she passed her accounts, although at that time she might also be assessed for the non-payment of rent during the time she occupied the property. But the court could not approve a sale of the property at a price that was more than $100,000 below the appraised value. A sale that price would in any event clearly not be in the best interests of the beneficiaries.
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[1] 2023 BCSC 1325, 88 ETR 4th 154.
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(iii) WHAT IS A CHARITY?
WEL ON CHARITIES SERIES – PART 1 of 4 | |
By Oliver O'Brien
Charities are an integral part of our society; they provide a positive impact and afford the means for people to give to others. Whereas it is common to give to charities during one’s lifetime, in recent years, there has been a significant increase in Canadians leaving gifts to charities in their Wills.[1]
But what is a charity and how do courts deal with them? In this series, ‘WEL on Charities’ I will cover some of the important legal aspects of a charity including:
- What constitutes a charity at law;
- The requirements for a valid charitable trust;
- The benefits of a charitable trust;
- The court’s powers and discretion to administer and implement charitable trusts; and
- How charities are governed in Canada, including the rights of a charity named as a beneficiary in a Will.
This blog will begin by discussing what a charity is and what are deemed as charitable purposes at law.
What is a Charity?
In Canada, charities are governed by legislation and the common law. The principal legislation governing the eligibility and registration of charities is the federal Income Tax Act (“ITA”).[2] The definition of ‘charity’ as provided in the ITA is a “charitable organisation or charitable foundation”.[3] The ITA defines a ‘charitable foundation’ in section 149 as:
a corporation or trust that is constituted and operated exclusively for charitable purposes, no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee, or settlor thereof, and that is not a charitable organization.[4]
Accordingly, there are three key requirements to be regarded as a charity at law:
- An exclusive dedication of property;
- To a charitable purpose; and
- Which provides a public benefit.
Charities as Corporations and Trusts
It is important to note that there is no such legal entity as a ‘charity.’ Instead, when we speak of charities, we refer to the charitable activities that are carried out by a corporation or a trust.[5]
In Canada, those organizations wishing to become a charity can do so via incorporation at a federal or provincial level. Most large charitable institutions in Canada are corporations who register as a charity across several provinces. For instance, Heart and Stroke Foundation Canada are registered as a separate charity in six Canadian provinces including Ontario, British Columbia, and Quebec.
A charity can also be a trust, or more specifically, a charitable trust. A charitable trust is a true express trust. It can be created either as an inter vivos trust, or as testamentary trust (such as in a Last Will and Testament). Because it is an express trust, many of the rules that apply to express trusts apply also to a charitable trust. Thus, for example, the settlor or testator must clearly intend to create the trust, the property of the trust must be certain, and the trust must be constituted, i.e., the property must be transferred to the trustee.[6]
Charitable Purposes
Of the three key requirements, courts typically encounter the most difficulty in determining whether the corporation or trusts’ purposes are sufficiently charitable. The ITA does not define what ‘charitable purposes’ are, instead, these are provided by the common law as follows:
- The Relief of Poverty;
- The Advancement of Education;
- The Advancement of Religion; and
- Any benefit to the community, not falling under the preceding heads.
The four categories were established by the English House of Lords in Commissioners for Special Purposes of Income Tax v. Pemsel in 1891.[7]
The origin of these charitable purposes goes back to Elizabethan England and the Charitable Uses Act 1601.[8] The preamble to the Charitable Uses Act contains a list of what were then considered by Parliament to be charitable purposes, which are as follows:
… relief of aged, impotent, and poor people; the maintenance of sick and maimed soldiers and mariners, schools of learning, free schools, and scholars in universities; the repair of bridges, ports, havens, causeways, churches, sea banks and highways; the education and preferment of orphans; the relief, stock, or maintenance of houses of correction; marriages of poor maids; supportation, aid, and help of young tradesmen, handicraftsmen, and persons decayed; the relief or redemption of prisoners or captives; and the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers, and other taxes.[9]
To this day, Canadian courts interpret the four heads of charitable purposes narrowly and will do so by strict analogy to the preamble found in the Charitable Uses Act. For instance, in Vancouver Regional Freenet Association v. Minister of National Revenue,[10] a non-profit volunteer network sought to provide free-internet access through an “information highway”. The court approved the charitable status of the volunteer network under the fourth ‘benefit to the community’ head. It found that the “information highway” was analogous to the “repair of bridges, ports, causeways and highways” found in the Charitable Uses Act preamble. This is because both are considered essential for public welfare.
Summary
In summary, a corporation or trust wishing to be designated as a charity in Canada must:
(i) exclusively allocate property;
(ii) for a charitable purpose; and
(iii) for a public benefit.
The next article in this series of 4 will explore in greater detail what these requirements mean.
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[1] See National Post, ‘Leaving their legacy: More Canadians donating to charity in their will’, accessible online at: < https://nationalpost.com/sponsored/life-sponsored/leaving-their-legacy-more-canadians-donating-to-charity-in-their-will#:~:text=According%20to%20a%20study%20commissioned,%2437%20billion%20in%20future%20donations.>
[2] (R.S.C., 1985, c. 1 (5th Supp.)) [ITA].
[3] Ibid. at s.149.1(1)
[4] Ibid. at s.149.1(1)
[5] D.M.W Waters, Waters’ Law on Trusts in Canada, (Thomson Reuters: 5th ed) at Chapter 14.1
[6] Albert Oosterhoff, Charitable and Non-Charitable Purpose Trusts (LexisNexis, 2023)
[7] Commissioners for Special Purposes of Income Tax v. Pemsel, 1891 CanLII 21 (FOREP)
[8] (U.K.), 43 Eliz. I, c. 4.
[9] Ibid.
[10] Vancouver Regional FreeNet Assn. v. M.N.R. (C.A.), 1996 CanLII 4076 (FCA), [1996] 3 FC 880
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(iv) WESTOVER ESTATE v. JOLICOUER | |
By Fabiana Araujo M. S. Kennedy
Westover Estate v. Jolicouer, 2024 ONCA 81 https://canlii.ca/t/k2mt1
This week the Ontario Court of Appeal upheld a Superior Court of Justice decision by Justice F. Bruce Fitzpatrick dismissing the appeal in the case of Westover Estate v. Jolicouer.[1]
Facts
In 1997, Milton Westover (“Mr. Westover”) with the assistance of Mr. Westover’s accountant and a lawyer, authorized the transfer of his farm and house property to the respondents, Joanie Marie Jolicouer and her husband, Joseph Allen Jolicoeur (the “Jolicoeurs”).
In Mr. Westover’s 2015 Will, he acknowledged that the transfer of the house property into joint tenancy was for estate planning purposes.
In 2017, Mr. Westover commenced the within action concerning the impugned transfer of Mr. Westover’s farm and house property to his daughter and son-in-law as aided by his other daughter, Debra Westover-Morriseau (“Ms. Westover-Morriseau”). Unfortunately, Mr. Westover passed away in 2018.
Betty Scheibler (“Appeallant”), who is the administrator of the Estate of Mr. Westover, continued with the action. She alleged that the respondents used Mr. Westover’s power of attorney to carry out the transfers without her father’s authority or knowledge.[2]
Dismissal of the Action
The outcome of the trial turned on the trial judge’s findings that Mr. Westover knew about and authorized the transfer of his property to the respondents in 1997, from which he considerably benefitted, and that there was no evidence given at the trial that supported the allegations of conspiracy and fraud.[3]
In particular, the trial judge accepted Ms. Westover-Morriseau’s evidence, including that Mr. Westover instructed her to transfer his property. The trial judge also found that the transfer was done for valuable consideration, despite the discrepancy between the agreement price and the amount paid, and that it was carried out openly with the assistance of Mr. Westover’s accountant and a lawyer.[4]
The trial judge found no evidence that the transfer was done for consideration below fair market value. Mr. Westover was an elderly widower and mostly retired from farming. The Jolicouers were the only family members interested in continuing to farm the property.
Ontario Court of Appeal
The Court of Appeal confirmed that there was no basis to interfere with the trial judge's conclusion.
The Court of Appeal also rejected that the trial judge was biased, as there was no merit to the allegation.[5]
Costs Appeal
The appellant sought leave to appeal the trial judge’s costs award that she was to pay 67% and the estate 33% of the respondents’ substantial indemnity costs.[6]
The appellant sought leave to appeal on the narrow issue that the trial judge’s costs order is plainly wrong because he erred in principle in ordering that the appellant, as the estate administrator, pay the respondents’ costs personally, when there was no basis for such an award.[7]
The Court of Appeal confirmed that estate trustees are generally “entitled to be indemnified for all reasonably incurred costs in the administration of an estate”. However, this is not an absolute rule. A court may order otherwise if an estate trustee has acted unreasonably or in substance for their own benefit, rather than for the benefit of the estate. That is this case.[8]
The trial judge made explicit findings that the appellant unduly influenced Mr. Westover to make the claims he made in this action. The trial judge also found that the appellant’s continuation of the action was primarily to benefit herself and Mr. Westover’s other beneficiaries, rather than her father, who died shortly after the litigation was commenced, or his estate. As a result, the trial judge found that the appellant’s testimony to further the action and the unsubstantiated allegations of fraud and conspiracy was self-serving.[9]
The trial judge properly accounted for the portion of the costs attributable to the appellant’s unreasonable decision to continue the litigation.[10]
As a result, the Court of Appeal dismissed the appeal as meritless and of no benefit to the estate. The respondents were entitled to their costs on a substantial indemnity basis from the appellant personally.[11]
Commentary
The Court of Appeal made it clear in this case that when an estate trustee acts unreasonably and depletes the assets of the estate with unnecessary litigation costs, the Court has the authority to award costs to be paid personally. This decision reiterates the legal obligations of an estate trustee to act in the best interests of the estate’s beneficiaries and to manage the estate with care, diligence, and honesty.
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[1] Westover Estate v. Jolicouer, 2024 ONCA 81 (CanLII)
[2] Ibid at para 2
[3] Ibid at para 5
[4] Ibid at para 5
[5] Ibid at para 8
[6] Ibid at para 9
[7] Ibid at para 10
[8] Ibid at para 14
[9] Ibid at para 15
[10] Ibid at para 16
[11] Ibid at para 20
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(v) KURT v. KURT AND SULLIVAN | |
By Gabriella Banhara
Kurt v. Kurt and Sullivan[1], 2024 ONSC 589 (“Kurt”) is a recent decision that serves as a useful reminder of the Court’s modern approach to costs awards. Additionally, the Court described what constituted “laudable” conduct by a Plaintiff during litigation, setting out factors it considered to be behavior worth sanctioning.
Cost Principles
Traditional approach:
Traditionally, Courts took an approach to cost orders that entitled a litigant’s costs to be payable out of the Estate.[2] After the seminal decision of Salter v Salter Estate[3], Justice Brown reprimanded the parties for treating the assets of the Estate “as a kind of ATM bank machine for which withdrawals automatically flow to fund litigation.”[4] This prompted the Courts to impose the “loser pays” principle to deter unreasonable behavior during litigation.[5]
Modern approach:
By exposing litigants to the chance of being held personally responsible for cost awards, an incentive was created for litigants to act proportionately. In McDougald Estate v Gooderham[6], the Court held that cost rules in civil litigation would follow, apart from the few exceptions posed by public policy exceptions. If such exceptional circumstances arise, the Court has a greater incentive to award costs payable by the Estate. McDougald Estate referenced “two public policy considerations for deviating from the standard civil cost rules”[7]:
(1) where the litigation was reasonably necessary to ensure the proper administration of the estate, as in the case where there are reasonable grounds on which to question the execution of a will or the testator’s capacity to make a will; and
(2) where the litigation arose because of the actions of the testator or those with an interest in the residue of the estate.[8]
Additionally, the Court in Kurt stated that the “modern costs rules are designed to foster three fundamental purposes”[9]:
- to indemnify successful litigants for the cost of litigation;
- to encourage settlements; and
-
to discourage and sanction inappropriate behavior by litigants[10]
Facts
The daughter of the Deceased (the “Plaintiff”) attested that she was owed $800,000 by the Deceased’s Estate. This assertion by the Plaintiff derived from the “alleged legacy” that was intended for her according to the Deceased’s secondary will.[11] The Deceased’s lawyer (the “Defendant”) who drafted the secondary will, took the position that there had been a drafting error in the will. The Defendant acknowledged to the Court that he had made a drafting error, which allowed the Court to determine the intent of the Deceased’s disposition, which was not to leave $800,000 to the Plaintiff.[12] The Court dismissed her claim after rejecting the Plaintiff’s interpretation of the Deceased’s secondary will.
The Plaintiff sought substantial indemnity on her costs “in the amount of $96,973.90, or in the alternative, her partial indemnity costs in the amount of $65,998.80, be paid by either the estate of the Deceased” or the Defendant, and the Defendant’s law firm or a combination of the two.[13]
The Plaintiff contended the estate should cover the Plaintiff’s costs given the drafting error triggered the public policy considerations. The Plaintiff in Kurt held, “one such consideration is that where the litigation is caused by the testator, it is appropriate for the estate to bear the costs of the dispute”.[14]
Analysis
The Plaintiff’s public policy considerations were rejected by the Court because it was stated that it was more of a responsibility on the Defendant to identify the error in the Will, rather than the Deceased himself. The Plaintiff raised the decision of Lipson v Lipson[15], where the Court ruled that the costs of the parties were payable out of the Estate due to the drafting error in the propounded will. However, Lipson differed from the case at hand because the testator had never read the will before signing it. The Court went on to state that regardless of whether the Deceased should have some responsibility for the litigation:
[19], I nonetheless decline to order the Plaintiff’s costs be recoverable from the Estate in light of the Plaintiff’s conduct which is not to be sanctioned with an award of costs.[16]
The Court stated the “Plaintiff’s less than laudable conduct includes the following”[17]:
1) The Plaintiff insisted on proceeding by way of action, rather than application, thus incurring costs with discovery that were not necessary in the litigation.
2) The Court described the Plaintiffs’ actions as “tactical” given she did not have a close relationship with her father “such as would entitle her to an extra $800,000 legacy from her father’s estate.”
3) The Plaintiff’s weak offers to settle “one on January 24, 2022, for $790,000 plus interest and costs, and a second, on August 24, 2022, for $600,000 plus interest and costs. The Court held “neither offer is reflective of an earnest attempt at compromise.”[18]
This decision demonstrates the importance of behaving reasonably and proportionally as a litigant. In spite of the fact that the Plaintiff’s claim for the reduction of her cost award contained merit, the Court was unable to look past the Plaintiff’s reprehensible behaviour.
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[1] Kurt v. Kurt and Sullivan, 2024 ONSC 589 (“Kurt”)
[2] Kurt at para 5.
[3] Salter v. Salter Estate, 2009 CanLII 28403 (“Salter”)
[4] Salter at para 6.
[5] Salter at para 6.
[6] McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA)
[7] Kurt at para 8.
[8] Kurt at para 8.
[9] Kurt at para 13.
[10] Kurt at para 13.
[11] Kurt at para 19.
[12] Kurt at para 3.
[13] Kurt at para 5.
[14] Kurt at para 5.
[15] Lipson v. Lipson et al., 2010 ONSC 475.
[16] Kurt at para 19.
[17] Kurt at para 19.
[18] Kurt at para 19.
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(vi) ANALYSING THE REPUDIATION OF MINUTES OF SETTLEMENT IN AN ESTATES MATTER | |
By Brett Book
As many of you are aware, Estates litigation can be highly contentious and involve bitter disputes, often between family members. Reaching a negotiated settlement is, therefore, a welcome resolution that aims to save the parties great expense and time. Often, these settlements are documented in a form known as ‘Minutes of Settlement,’ constituting a binding agreement. But what happens when one of the parties fails to live up to the terms of the agreement?
That was the issue in Johnston et al v. Johnston et al.,[1] where Madam Justice C.D. Braid clarified that Minutes of Settlement are a contract and one that was repudiated in this case by the applicants.[2]
Background
The dispute concerned a farm property in Rockwood, Ontario (the “Farm”), owned by Mrs. Johnston (the “Deceased”). The Farm had been in her family since 1929 and comprised a two-story farmhouse, a bank barn, and land used as a cash crop operation.[3]
For five years, her four daughters (who were also her co-attorneys) were embroiled in bitter litigation over the sale of the Farm. The litigation was resolved on December 31, 2015, by way of Minutes of Settlement (the “Minutes”). The Minutes, which were drafted to reflect the wording of the Deceased’s Will,[4] included terms which provided that the applicants would pay $422,750 to the respondents and receive title to the farm property.[5]
The parties had numerous disputes, and the property was not transferred by the agreed upon closing date.[6] The applicants, through an email sent by their counsel, stated to the respondents that their intention was to achieve the Minutes by seeking an order. On April 28, 2016, a consent Judgment (the “Judgment”) was signed, however, failed to include the paragraphs from the Minutes which dealt with the transfer of the Farm.
By March of 2018, the respondents provided the applicants with a deadline of April 15, 2018, to fulfill the Minutes, failing which the respondents would understand that the applicants did not intend to carry out their obligations. That deadline passed.
The Deceased died on November 12, 2020. Shortly thereafter, the applicants commenced the within application and in April 2022, the parties consented to the appointment of BMO Trust Company to administer the estate on an interim basis. The applicants also requested orders providing that the Minutes and Judgment are valid and enforceable and allowing them 60 days to pay the respondents for the transfer of title to the Farm.
The applicants submitted that the interpretation of the Judgment should include a consideration of the surrounding circumstances and the intent of the parties (in this case, their anticipation that the Minutes would become a judgment). In rejecting this position, Braid J. offered the following analysis:
Are Minutes of Settlement a Judgment or a Contract?
Braid J. held that court orders must be read in consideration of the plain dictionary meaning of the words and that any interpretation must be based on this wording, and not on intent or surrounding circumstances. Citing with authority the decision in Carey v. Laiken,[7] Braid J. also held that the first element for a finding of civil contempt is that the order alleged to have been breached must state clearly and unequivocally what should and should not be done.[8]
Applying the decision in Ruskin v. Chutskoff Estate,[9] Her Honour held that “Minutes of settlement in a court proceeding constitutes a contract, and the ordinary law of contracts should apply" [emphasis added].[10]
Repudiation
Braid J. held that repudiation involves conduct by a party demonstrating their intention to not fulfill their contractual obligations, which constitutes a fundamental breach of a contract, depriving the innocent party of substantially or the whole benefit of the contract. In these circumstances, Her Honour held that a reasonable person would conclude that the breaching party no longer intends to be bound by the contract. The contract will be terminated on the grounds of repudiation where the non-repudiating party accepts the repudiation.[11]
Pursuant to Justein v. 3900 Yonge Street Ltd.,[12] Her Honour held that if a contract contains specifics regarding price, land, objects to be purchased, and the parties, the court can infer that the parties reasonably expected that the transaction would be closed within a reasonable period of time. Where there is no express stipulation regarding the time of performance, the law will imply that a term will be performed within a reasonable time. What is ‘reasonable’ will be determined upon the facts of each case.[13]
Finally, Her Honour held that pursuant to Sanko Steamship Co. v. Eacom Timber Sales Co.,[14] where time is not of the essence in a contract, the innocent party is relieved of their obligations when the delay becomes so long as to go to the root of the contract, amounting to a repudiation of it.[15]
Application of the Law
Although the Minutes did not include a time is of the essence clause, there was a reasonable expectation that the terms would be fulfilled promptly. The applicants’ delay, therefore, went to the root of the contract and amounted to a repudiation of it. As such, Braid J. found that the applicants extreme delay repudiated the Minutes and pursuant to Gettle Bros. Construction Co. Ltd. v. Alwinsal Potash of Canada Ltd.,[16] the respondents were justified in treating the ‘contract’ as at an end.
Pursuant to Brown v. Belleville (City),[17] Her Honour held that in order for the respondents to void the contract on the basis of repudiation, they must prove, on a balance of probabilities, that they accepted the repudiation and communicated that acceptance.
Braid J. accepted as evidence for acceptance of the repudiation, a March 19, 2018, email from the respondents to the applicants wherein they note that the Minutes were signed in December 2015 and referred to a closing date of February 18, 2016. Further, their email stated that, “the agreement was not intended to extend over a period of time and needs to be fulfilled by taking the following steps.” The steps set out a final deadline of April 15, 2018, to receive an offer to purchase.[18]
Disposition
Braid J. held that the terms of the Minutes were no longer enforceable and directed the estate trustee to sell the farm property on the open market. The applicants were not, however, prohibited from making an offer to purchase the Farm when it is listed on the open market.
Concluding Thoughts
Parties to a settlement should be fully aware that Minutes of Settlement constitute a binding agreement in the form of a contract. In this case, the Minutes contemplated the execution of a consent judgment which would also give effect to the Minutes. However, the parties were not careful in ensuring that the relevant terms of the Minutes were incorporated into the Judgment. This could have been avoided by either repeating every term of the Minutes in the Judgment or simply attaching the Minutes as a Schedule.
This case demonstrates that as a contract, if the terms of Minutes of Settlement are not fulfilled in a reasonable amount of time (or within the agreed upon deadline), the innocent party can take appropriate steps to end the contract on the basis of repudiation.
Where a negotiated settlement has been reached, parties and counsel alike are reminded to review the terms of agreement and make all necessary efforts to fulfill their contractual obligations in a reasonable period of time.
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[1] 2024 ONSC 603 [Johnston].
[2] In contract law, repudiation of a contract occurs when one party to the contract demonstrates that they are unwilling/unable to fulfill their contractual obligations. Repudiation, however, is of no consequence unless the other party accepts the repudiation and gives the repudiator notice of their acceptance.
[3] Johnston, supra note 1 at para. 6.
[4] The Deceased’s Will directed that the Farm is not to be sold until at least one year after her death to allow one or more of her children to find a way to keep it in the family, stating “it is my fervent wish that my children will assist one another in ensuring that, if at all possible, the farm will remain in the ownership of one or more of them.”
[5] The Minutes also provided for the withdrawal or dismissal of three court actions while setting out the process for disbursing the Deceased’s funds and setting aside a reserve fund for her ongoing support.
[6] The Minutes provided for a closing date for the transfer of the farm of February 18, 2016. The transfer was stalled in January 2016 by the preparation of an agreement of purchase (“APS”) which contained many errors requiring amendments, the applicants the further stalled the process by stating on December 8, 2016, that they required an environmental site assessment (“ESA”) to be completed before they could proceed with the sale. The terms of the Minutes did not require an APS or ESA, but the applicants unilaterally imposed these requirements before they would permit the distribution of funds.
[7] 2015 SCC 17, [2015] 2 SCR 79 at paras. 33-35.
[8] Johnston, supra note 1 at para. 19.
[9] 2004 SKCA 107, 243 D.L.R. (4th) 432 at para. 22.
[10] Johnston, supra note 1 at para. 22.
[11] See Jedfro Investments (U.S.A.) Ltd. v. Jacyk, 2007 SCC 55, [2007] 3 S.C.R. 679 at para. 20; Guarantee Co. of North America v. Gordon Capital Corp., 1999 SCC 664, [1999] 3 S.C.R. 423 at para. 40; Spirent Communications of Ottawa Limited v. Quake Technologies (Canada) Inc., 2008 ONCA 92, 88 O.R. (3d) 721 at para. 37.
[12] 1983 CarswellOnt 648 (H.C.J.).
[13] See Illidge v. Sona Resources Corporation, 2018 BCCA 368 at para. 61.
[14] (1986), 32 D.L.R. (4th) 269 (B.C. S.C.) at para. 20.
[15] Johnston, supra note 1 at para. 37.
[16] (1969), 5 D.L.R. (3d) 719 (SKCA) at para. 21, aff’d [1971] S.C.R. 320.
[17] 2013 ONCA 148, 114 O.R. (3d) 561 at paras. 45 and 55.
[18] Johnston, supra note 1 at para. 48.
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STEP 2023-2024 Branch/Chapter Bundles – National Webinar
What to Do When Things Go Off the Rails: A Cross-Canada Examination of Capacity Disputes
February 22, 2024 – 12:00 pm – 2:00 pm EST
Moderator/Speaker: Kimberly Whaley
Chair: Paul Taylor
Panelists: Kathleen Cunningham, Marilyn Piccini Roy and Jasmine Sweatman
https://web.cvent.com/event/25853b02-c044-4c2e-95ae-84991762a023/websitePage:72e3a99c-16ea-4577-a625-dbc5dbfaf0b6?RefId=Calendar
2024 Osgoode Intensive Program in Wills & Estates: Managing Consent and Capacity Issues in Wills & Estates Practice
March 19, 2024, Chair: Kimberly Whaley
https://osgoodepd.ca/professional-development/short-courses-and-conferences/managing-consent-and-capacity-issues-in-wills-and-estates-practice/
2024 Osgoode Intensive Program in Wills & Estates: Passing of Accounts and Fiduciary Accounting
April 2, 2024, Chair: Kimberly Whaley
WEL Speakers: Albert Oosterhoff, Tracey Phinnemore
https://osgoodepd.ca/professional-development/short-courses-and-conferences/the-osgoode-intensive-program-in-wills-estates/
2024 Forum on Estate Planning and Litigation, Banff Springs
April 7-9, 2024, Steering Committee Member, Kimberly Whaley https://www.cambridgeforums.com/forums/eplf/
CBA Elder Law Webinar
April 16, 2024, Scams and Fraud Targeting Older Adults
Speaker: Kimberly Whaley
LSO – Six-Minute Estates Lawyer, 2024
April 18, 2024, Dealing With Emotional Clients and grieving Clients, WEL Speaker: Kimberly Whaley, Co-Chairs Andrea Hill and Ian Hull
https://store.lso.ca/the-six-minute-estates-lawyer-2024
2024 Osgoode Intensive Program in Wills & Estates; Power of Attorney and Guardianship: Contentious and Non-Contentious Matters
April 22, 2024, WEL Speaker: Kimberly Whaley
ACFI Conference – Association of Certified Forensic Investigators of Canada
May 13, 2024, ACFI Fraud Conference
Fraud & Scams in Wills, Estates and POA’s
Speakers: Kimberly Whaley and Bryan Gilmartin
https://www.acficonference.ca/
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