Whaley Estate Litigation Newsletter, Vol.5 No. 8, November 2015 REVISED

We apologize for resending this edition of our Newsletter, however there was an error in the version we sent out this morning. The first two paragraphs of Section IV in the Law Review were misplaced at the end of Section III. This has been corrected in this version.

Whaley Estate Litigation provides litigation, mediation and dispute resolution to clients throughout Ontario:

* Albert Oosterhoff, Professor Emeritus Western University, Counsel to WEL consults on matters within his areas of expertise, providing opinions concerning Wills, Estates, Trusts and related Property matters.

Please Enjoy,

Kimberly A. Whaley

WEL

CLICK HERE TO VIEW WEL FIRM DIRECTORY

PART I: WEL NEWS

1. CBA WILLS, ESTATE AND TRUST FUNDAMENTALS FOR ESTATE PRACTITIONERS

Kimberly was a guest speaker at the dinner program of the CBA Wills, Estate and Trust Fundamentals for Real Estate Practitioners and spoke on "Building an Estates Practice" on October 15th. She also taught workshop program on October 16th on Predatory Marriages.

Link to her Predatory Marriage paper

2. BAYCREST PROFESSIONAL ADVISORY BOARD, BREAKFAST SEMINAR

WEL attended at the Baycrest Professional Advisory Board Breakfast Seminar on October 22, 2015, where the topic involved Tax Changes effecting Trusts and Estates in 2017; Familial Demands on Seniors' Assets.

3. LSUC, THE INTERSECTION OF ESTATES LAW AND BANKRUPTCY LAW: ADMINISTRATION OF THE INSOLVENT ESTATE

Benjamin Arkin together with Frank Bennett chaired the LSUC, Intersection of Estates Law and Bankruptcy Law and Kimberly was on a panel with the Honourable Thomas McEwen, Howard Manis, Bartosz Sarsh, and Melanie Yach.

4. CHAMBERS AND PARTNERS

Kimberly Whaley was recognized by Chambers Canada as a leading lawyer in the area of Private Client Contentious Trust (2016).

5. OSGOODE PROFESSIONAL DEVELOPMENT : ADVISING THE ELDERLY CLIENT, NOVEMBER 4-5, 2015

Heather Hogan spoke with Shelley Hobbs on: Best Practices and Pitfalls on Guardianship Proceedings

Link to Heather's materials

Mark Handelman spoke on: Advising the Elderly Client: Advance Care Planning, End of Life Decisions

Link to Mark's materials

Kimberly Whaley spoke on: New Spouse/old Money: Claims Arising Out of Later in Life Partnerships

Link to Kim's materials

6. CANADIAN ELDER LAW CONFERENCE (CCEL), VANCOUVER, B.C. NOVEMBER 12-13, 2015

Kimberly Whaley and Heather Hogan spoke on: Legal Capacity to marry, Co-Habit, Separate and Divorce and Predatory Marriages.

Link to WEL paper

7. 2016 OSGOODE PD ELDER LAW WEBINAR SERIES

Elder Law is rapidly expanding area of practice for legal professionals. The link below is a PDF flyer for the 2016 Osgoode PD Elder Law Webinar Series.

Osgoode PD Elder Law Webinar Series Info PDF

8. ARMSTRONG, ESTATE ADMINISTRATION, A SOLICITOR'S REFERENCE MANUAL

Arieh Bloom's article: Release Me: An Analysis Of The LawSurrounding The Use Of Releases In The Estate And Trust Context", will be published in the Selected Legal Literature section of Armstrong, Estate Administration, A Solicitor's Reference Manual.

9. WEL ON GUARDIANSHIP

WEL has just recently published our book on Guardianships.

For details, please contact Kim Whaley at: kim@whaleylawyers.com

10. OBA, MAKE A WILL MONTH

November is the Ontario Bar Association's Make a Will Month. On November 4, Ben Arkin spoke on capacity issues at a joint Make a Will Month program hosted by the Alzheimer's Society and the Ontario Bar Association

11. SCOTIABANK WATERFRONT MARATHON, OCTOBER 2015

Kim ran her first half marathon this year with 16 year old daughter Sammi who ran her first ever. A proud moment for mom!

PART II: LAW REVIEW

(i) Besaw Estate v. Besaw, 2015 CanLII 62411 (NL SCTD)

http://canlii.ca/t/glgdt

Besaw Estate v. Besaw and the Presumption of Due Execution

by Kimberly Whaley

Disappointed beneficiaries, or people who expected to be beneficiaries, often feel compelled to bring a claim to contest the validity of a will. In Besaw Estate v. Besaw[1] the challengers of the will alleged that it was not duly executed in proper form as one of the witnesses did not actually "witness" the testator's signature. The case provides a helpful overview of the presumption of due execution.

Facts

Mary Rose Besaw died in 2013 having previously made a will in 2003. She drafted her Last Will and Testament using what is commonly called a "stationer's form" of will, which is a partially typed document where the testator fills in the blanks. Except for the usual printed clauses, the Will was otherwise in the handwriting of the deceased.

While the deceased had six adult children, she chose to leave her only asset, her house, valued at $90,000.00 to her favourite grandson. The adult children of the deceased were of the opinion that their mother would have (or should have) left the family home to them, and contested the validity of the Will.

The sole issue before the Court was whether the Will was executed and witnessed in compliance with the Wills Act, RSN 1990, c W 10 section 2. There was no issue as to the authenticity of the signatures, nor were there allegations that she lacked testamentary capacity or that the Will did not reflect her true intention.

The adult children's only argument was that one of the witnesses (the deceased's daughter-in-law, and spouse of one of the challengers) did not actually see the deceased execute the will. The second witness, however, executed an affidavit of due execution and swore that he was present and saw the deceased sign the Will in his presence and in the presence of the daughter-in-law.

The daughter-in-law on direct examination testified that she did not see the deceased execute the Will, suggesting it was signed before or after the witnesses signed it. However, on cross-examination she testified that she did not pay attention and it may or may not have been signed by the deceased before she signed it.

Presumption of Due Execution

Justice Hurley reviewed the relevant jurisprudence setting out the "presumption of due execution", including Pelley Estate v. Pelley Estate (1985), 54 Nfld. & P.E.I.R. 232 (Nfld. S.C.T.D), re Laxer [1963] 1 OR 343 (CA) and Beniston Estate v Shepherd (1996), 67 ACWS (3d) 846 (BCSC): Where the circumstances indicate that a testator intended a document to constitute his or her Will and was under the impression that he or she was complying with the legislation as to execution, courts will lean towards giving effect to the testamentary wishes.

To rebut the presumption of due execution (where the testamentary document appears to have been properly executed) any evidence of a defect in execution must be clear, positive and reliable. Apparent due execution is sufficient to cause the Court to presume that everything was done right. A contrary rule would make the right of beneficiaries depend as much upon the honesty and reliability of witnesses as upon the language of the testamentary instrument. [2]

Justice Hurley found that the daughter-in-law's evidence was neither clear nor reliable and that it was not enough to rebut the presumption of due execution.

Conclusion

Sometimes when an expectant beneficiary perceives an unjust result they are willing to pursue any possible claim to challenge a will. One such ground is alleging lack of due execution, but as this case shows, the presumption of due execution is a high hurdle to get over. Be sure to have clear and reliable evidence before attempting to rebut this presumption.

Either way, a nunc pro tunc order is an extraordinary power for the judiciary, and a useful tool for a lawyer to know about if the client she was had so zealously represented in court suddenly passes away, before having the benefit of the court's decision.

[ 1] Besaw Estate v. Besaw 2015 CanlII 62411 (NLSCTD) [Besaw]

[2] Besaw at paras. 14-15.

(ii) Peters v. Peters Estate, 2015 ABCA 301

http://canlii.ca/t/gl7wt

An Instructive Intestacy Tale for Step-Children & Step-Parents

by Kimberly Whaley

In Peters v. Peters Estate,[1] the Alberta Court of Appeal confirmed that step-children are not considered "lineal descendants" under the Wills and Succession Act, SA 2010, c W-12.2 and therefore will not inherit on intestacy, no matter how sympathetic the facts may be. This case highlights the issues that can arise when someone makes plans or promises regarding their estate, yet fail to make a Will. Those promises carry little weight and intestacy laws prevail.

The Facts

The facts are probably quite common: A single father of four daughters married for the second time. With his second wife, he had a son. While the wife never adopted her new husband's daughters, she treated them as her own and introduced them as her daughters. They were a family for 43 years until the husband died. At the time of the husband's death, the husband and wife were on the verge of bankruptcy. One of the step-daughters (the Applicant in this case) assisted in bringing about a successful conclusion to the bankruptcy for her step-mother. All five children decided to give up their interest in their father's estate so that the mother could benefit. After these events, according to the Applicant, the mother advised that her estate would be distributed amongst all five of the children accordingly. However, despite these assurances, the mother died without confirming these instructions in a Will and died intestate.

The Application

The Applicant step-daughter sought an equal division of the net proceeds of the estate amongst all five children/step-children.

The chambers judge dismissed the application[2] and held that a stepchild was not a "descendent" for the purposes of sections 65 and 66 of the Wills and Succession Act SA 2010,c W-12.2 (the "Act"). Therefore, the only descendant of the deceased was her biological son and he was the sole beneficiary of her estate. The step-daughter appealed.

The Appeal

First, the Court of Appeal reviewed the legislation and noted that "descendants" in the Act is defined as "all lineal descendants of an individual through all generations".

"Lineal descendant" is not defined in the Act. The Court turned to the definition of "lineal descendent" in Blacks Law Dictionary, 10th ed: "a blood relative in the direct line of descendent - children, grandchildren and great grandchildren are lineal descendants".

The Act does not define "child" but the Court noted that other statutes do, such as the Fatal Accidents Act, RSA 2000, c F-8 which includes step-sons and step-daughters. If the legislature had intended to provide that stepchildren should have the same rights as natural and adopted children when a parent died intestate, it could have drafted the Act in a similar manner. [3 ]

The appellant step-daughter argued in her factum that the Act "has failed to recognize the need to protect blended families".[4] The Court, in response to this argument noted that intestate succession legislation in Alberta has historically excluded stepchildren from inheriting the estate of an intestate stepparent. Also, recent studies by the Alberta Law Reform Institute continue to support the exclusion of stepchildren, as the relationships between stepchildren and stepparents are too variable to support a presumption that a majority of stepparents intend their stepchildren to inherit in their estate. [5]

The Appellate Court concluded that the "legislation is clear in its intent" and that the Court was "bound to follow it". [6] The stepdaughter also unsuccessfully argued that the deceased had created a secret trust and that the biological son held the property in trust for the benefit of himself and his stepsisters. However, to form a secret trust, the intestate's intention that the property should be held in trust for others needs to be communicated to the beneficiaries of the trust and the trustee. Here, there was no evidence that the deceased communicated this intention to the trustee son. There was also no evidence that the son acquiesced to hold the property of the deceased's estate in trust, another required element to form a secret trust. No secret trust was found.

Conclusion

The Appeal Court, comprised of Justice Rowbotham, Justice McDonald and Justice O'Ferrall, acknowledged that the underlying theme of the appellant's submissions was that the result was "unfair", and responded:

In conclusion we can do no better than to repeat the words of the chambers judge: this case is an example of the personal difficulties and harm to relationships that can occur when an individual does not have a will. [7]

While the end result may appear harsh, this is a good reminder for blended families: no matter how sympathetic the facts may be, blood relatives trump stepchildren on intestacy, even if those children were treated as the deceased's own.

[1] 2015 ABCA 301.

[2] Peters (Re), 2015 ABQB 168.

[3] 2015 ABCA 301 at para. 12.

[4] 2015 ABCA 301 at para. 13.

[5] 2015 ABCA 301 at para. 13.

[6] 2015 ABCA 301 at para. 16.

[7] 2015 ABCA 301 at para. 26.

(iii) Chapman v. Treakle : What is a "Marriage-Like Relationship"?

2014 BCSC 2127 (CanLII); http://canlii.ca/t/gf9ng

by Kimberly Whaley

The definition of common law spouse varies from province to province and within different contexts. The case of Chapman v. Treakle[1] examines the definition of "common law spouse" and the determination of a "marriage-like relationship" under intestacy legislation in British Columbia. While in Ontario common law spouses do not have the same statutory rights as married spouses under intestacy legislation, this is not true in British Columbia, where both common law and married spouses have the same statutory rights on intestacy. However, unmarried spouses must first show that they were indeed "common law spouses" under the legislation.

The Facts

Ms. Chapman and the deceased began living together in 1981 in a subsidized apartment complex, where the deceased was employed as the building manager. In 2002, Ms. Chapman secured a well-paying job and thought that their rent would no longer be subsidized so she asked that her name be taken off the lease, even though she testified that she continued to live in the apartment with the deceased.

Around the same time, Ms. Chapman's daughter became severely ill and Ms. Chapman began spending nights at her daughter's house to care for her and for her granddaughter. Ms. Chapman testified that she still spent the majority of her time at the apartment with the deceased and she continued in a spousal relationship with him until he died in 2012. They shared a bed and had an intimate relationship and maintained sexual fidelity to one another. They communicated their feelings to each other and exchanged gifts. While they maintained separate bank accounts they pooled their money to meet their combined living expenses. The deceased had proposed to her several times over the years but for various reasons a wedding never took place.

When the deceased died intestate and without children of his own, Ms. Chapman brought a claim declaring that she was his sole heir under the law of intestate succession established by the Estate Administration Act, R.S.B.C. 1996, c. 122 (the "EAA", which has now been repealed but was in force at the time of death). The deceased's sister defended the claim arguing that the Ms. Chapman stopped living with the deceased in 2002 and that they were not in a common law relationship.

The Legislation

Under the EAA, a common law spouse includes a person who has lived and cohabited with another person in a marriage-like relationship for a period of at least 2 years immediately before the other person's death.

Justice Ballance canvassed the leading cases in B.C. on the interpretation of "marriage-like" relationship within this definition and noted that there is "no checklist of characteristics" determinative of a 'marriage-like' relationship as spousal relationships are many and varied.[2] Some blend their finances and others keep their property and finances completely separate; for some couples sexual relations are very important, while others do not share beds; some couples are affectionate and demonstrative while others do not engage in public affection, etc.[3] The leading cases also provided that the "lynchpin of the analysis as to the status of unmarried persons is whether the couple considered themselves committed to the lifelong support of one another".[4] Also that where the assessment of each party's subjective intention was elusive, reliance on an evaluation of objective indicators may well be necessary.

Justice Balance heard testimony from several witnesses regarding Ms. Chapman's and the deceased's relationship, including from relatives and neighbours. The court was also presented with several holograph wills that did not comply with the formalities of execution. Each of these wills, dating from 2007 to 2010, referred to Ms. Chapman as the deceased's "spouse" "wife" or "companion" and left everything to her.

The court found that after 2002 Ms. Chapman spent less time at the deceased's apartment, since she had to care for her sick daughter, but that this time away from the deceased, did not stop the court from finding that the "preponderance of evidence" demonstrated that they were in a committed lifelong relationship.[5] Some of the evidentiary considerations included:

They continued to play bingo and enjoy outings together;
Shared meals and travelled together;
Helped raise Ms. Chapman's granddaughter together;
The holograph wills, while not valid wills, were evidence of an on-going spousal relationship, and the deceased's intention in relation to his relationship with Ms. Chapman;
While the plaintiff might have slept at her daughters house on some nights the Court concluded that this did not reflect a lack of fidelity or diminished devotion to the deceased; and
The fact that they maintained separate bank accounts was not determinative that their relationship had ended.

The Court concluded that Ms. Chapman was the deceased's common law spouse under the EAA and therefore inherited the entirety of his estate.

Conclusion

This case echoes the many interesting and unique circumstances that courts will consider in finding a spousal relationship to have existed -indeed there is an increase in decisions in this area. Relationships do not have to be conventional to be tantamount to spousal relationships. The law in this area relevant to what factors are considered to determine a spousal relationship continues to expand. This decision of course also serves as a reminder of the importance of having a validly executed Will. Had the deceased consulted an estate planning lawyer to verify whether his holograph wills were indeed valid, much of this turmoil and difficulty that his spouse of 31 years had to face to have her rights recognized could have been avoided.

[1] 2014 BCSC 2127.

[2] 2014 BCSC 2127 at para. 22.

[3] 2014 BCSC 2127 at para. 22 citing Austin v. Goerz 2007 BCCA 586 at para.58.

[4] 2014 BCSC 2127 at para. 20.

[5] 2014 BCSC 2127 at para. 100.

(iv) Options for disgruntled beneficiaries in the face of the rule in Howe v. Lord Dartmouth

by Joanne Hwang

Sometimes the cost of maintaining an asset is greater than the profit it generates, an oft-encountered example being an old, dilapidated rental building. The current state of the law in Canada is that, in spite of the even hand rule and unless specifically directed in the will, the estate trustee is not required to dispose of and invest the proceeds of a wasting real property. This article reviews the relevant court decisions and the possible options for those beneficiaries whose financial interests in an estate are dependent on wasting real property.

Application of the even hand rule as between income and capital beneficiaries

The even hand rule is a principle familiar to all estate and trust practitioners: In all their dealings with trust affairs, the trustees must act in such a way that, if there are multiple beneficiaries, each beneficiary receives exactly what the terms of the trust confers upon him and otherwise receives no advantage and suffers no burden which other beneficiaries do not share [1] . In the common event where the testator favours certain beneficiaries more than others, the trustee must still ensure that the manner in which she administers the estate does not favour or burden any beneficiary in a way not prescribed by the will.

Flowing from the even hand rule is the rule in Howe v. Lord Dartmouth [2] , which impose upon trustees a duty to convert wasting or unproductive personalty into authorized investments. The rule presumes that the testator had intended to treat the income and capital beneficiaries equitably [3] . Howe v. Lord Dartmouth was adopted with approval by the Supreme Court of Canada in Lottman v. Stanford [4] .

In Kemp v. Kemp, the court refers to Howe v. Lord Dartmouth and describes the even hand rule as it applies to income and capital beneficiaries:

The basic premise of the rule, in other words, is that both income and capital beneficiaries should enjoy so far as possible the same property so that assets which are rapidly diminishing in value or are likely to diminish must be concerted and failing that a portion of the income must be set aside as capital [5].

The rule in Howe v. Lord Dartmouth and its non-applicability to wasting real trust property

It is important to recognize that currently the rule in Howe v. Lord Dartmouth applies only to personalty in Canada.

In Lottman v. Stanford[6], the Supreme Court declined an opportunity to extend the rule in Howe v. Lord Dartmouth to realty. The facts of the case are as follows. The will of the testator directed his trustees to keep the residue invested and to pay the income derived therefrom to his wife until her death, at which point the residue would be divided equally among those of his four children then living. A power to encroach upon the capital of the residuary estate in favour of the wife was also conferred upon the trustees. A provision of the will directed conversion of the testator's personal estate and a power to postpone such conversion. The bulk of the estate consisted of real property. The wife was dissatisfied with the income she was receiving from the trustees and brought proceedings in which she sought, inter alia, an order directing the trustees to sell the residuary realty and to invest the proceeds in authorized investments.

The trial court held that as the trustees were not under a duty to convert the realty. The Ontario Court of Appeal allowed the wife's appeal and extended the rule in Howe v. Lord Dartmouth to realty. The trustees were thus ordered to sell the residuary realty and invest the proceeds. In the Court of Appeal's view, unless the will showed a contrary intention, the parts of the estate that are of a wasting or reversionary or unproductive nature must be realized by the trustees and the proceeds invested in authorized investments[7].

The Supreme Court disagreed with the Court of Appeal and held that unless the will imposed a duty upon the trustees to convert the residuary realty, there was no duty on the trustees to do so. The court held that the extension of the long-standing rule[8] in Howe v. Lord Dartmouth, if it were to happen, should be done by the legislature. The court emphasized that it was dealing with an equitable rule relating to estate administration, as opposed to dependant's relief legislation which enabled the court to alter testamentary provisions in order to do justice between the testator and members of his family[9].

Since 1980, across Canada, the rule in Howe v. Lord Dartmouth and the Supreme Court's decision in Lottman v. Stanford have been referred to in few cases. Two Ontario cases that apply Lottman v. Stanford are Kemp v. Kemp[10] and Williams Estate, Re[11]. In both cases, the wills in question conveyed wide discretion on the defendant trustees to invest, realize, and dispose of real property, with no specific direction as to the sale of any real property.

The plaintiff in Kemp v. Kemp was the testator's widow and the income beneficiary under his will. The executors in Kemp were given uncontrolled discretion to make investments for the estate and were declared by the will not to be liable for any losses from investments made in good faith. Between 1986 and 1989, the income from the estate properties went to maintaining them. The rental income and the property values rose. The market crashed in 1989 and the prices the properties generated were much lower than their 1980's valuations. The court applied Lottman v. Stanford and further noted that there was no evidence of negligence or breach of trust by the executors. The court confirmed in Williams Estate, Re that where a testator gives his estate trustees discretion to convert the estate's real property or to postpone conversion, then the estate trustees were under no duty to convert and may retain the real property at their discretion[12].

Options for the disgruntled beneficiary [13]

1. Dependant's relief application

The Supreme Court appeared to suggest in Lottman v. Stanford that the widow could have brought a dependant's relief application, rather than relying on the rule in Howe v. Lord Dartmouth, to obtain an order altering the testamentary provisions in the will. This is an avenue to consider for those beneficiaries suffering financially as a result of an executor's handling of a wasting real property.

2. Unlawful exercise of discretion

Even if the will gives the estate trustee absolute discretion to convert or postpone the conversion of realty, thereby ousting the rule in Howe v. Lord Dartmouth, the trustee must still act in good faith. If there is no evidence of mal feasons on the part of the estate trustee, then the trustee's discretion is absolute and should not be interfered with by the court. This was the situation in Williams Estate, Re[14].

What if the trustee's decision to retain a wasting real property is motivated in part by a "good" reason and in part by mal feasons?

Ontario courts have steadfastly refused to interfere with a trustee's discretion except in limited circumstances.

The Fox v. Fox Estate[15] case involved an executor who exercised her power to encroach on the residue primarily as a result of her disapproval of her son's decision to marry outside the family's faith. The appeal came before a panel of three judges at the Court of Appeal. While all of the learned justices allowed the appeal, the reasons were not the same.

Galligan J.A. determined that the executor's exercise of discretion to the prejudice of her son was based on a reason extraneous to the duty which the will imposed on her. This extraneous consideration demonstrated sufficient mala fides to bring her conduct within the scope of judicial supervision. Her exercise of discretion was set aside as her reason, being her disapproval of her son's marriage outside the family's faith, was abhorrent to contemporary community standards and contrary to public policy. McKinlay J.A. found it obvious that the executor did not consider the terms of the will at all when she made the encroachments. She had no understanding of her duties as an executor and acted in the firm belief that she was dealing with her own property. Accordingly, the learned justice determined that the encroachments were breaches of trust and were set aside. Catzman J.A. agreed with McKinlay J.A. that the executor dealt with the property as though it was her own but that she was at least in part motivated by her concern for the financial welfare of her grandchildren. In Catzman J.A.'s view, the preferred approach is that if an executor exercises her discretion to encroach for a "good" reason that is clearly within the scope of the power conferred upon her by the will, the court should be reluctant to interfere on the ground that she was, additionally, motivated by a "bad" reason that the court is unprepared on public policy grounds to support.

In Edell v. Sitzer[16], the Ontario Superior Court of Justice considered and refused to interfere with the discretionary power of a trustee to vary the terms of a trust.

Fox and Edell stand for the proposition that the court should not interfere in with good faith exercise of a discretion by a trustee unless:

(a) the trustee has achieved an outcome unauthorized by the power conferred upon him or

(b) it is clear that the trustee would not have acted as he did

(i) had he not taken into account considerations which he should not have taken into account, or

(ii) had he not failed to take into account considerations which he ought to have taken into account. [17]

To summarize, the beneficiary should have an appreciation for the court's reluctance to interfere in such exercise of discretion and carefully consider the trustee's reasons for not converting wasting real property before resorting to court.

3. Devastavit - Maybe?

A devastavit is the mismanagement of the estate by the executor, in squandering or misapplying the assets contrary to the duty imposed upon him or her[18]. The term appears in case law when a creditor of an insolvent estate seeks to impose personal liability upon an executor for the estate's debts. If the plaintiff can prove there are insufficient assets in the estate to satisfy its debts as a result of mismanagement of assets by the executor, the executor may be held to be personally liable.

Can the creditor charge the estate trustee, who is given absolute discretion over the realty in the estate under the will, with a devastavit if the realty is of a wasting nature? How does devastavit interact with the rule in Howe and Dartmouth? This has not yet been addressed in case law.

Summary

The Supreme Court's decision in Lottman v. Stanford continues to be the law in Canada: where a testator gives his estate trustees discretion to convert the estate's realty or to postpone conversion, the estate trustees are under no duty to convert and may retain the realty at their discretion even if it is of a wasting nature. The position seems clear and unambiguous, though, luckily for beneficiaries, there are other ways of attacking the testamentary dispositions in the will by way of a dependant's relief application or by showing that the trustees have failed to act in good faith. It is not clear, from the creditor's point of view, whether they can seek to impose personal liability for the estate's debts, to the extent that the estate has insufficient assets to pay its liabilities, for holding onto a wasting real property.

[1] Waters, Donovan, Waters Law of Trusts in Canada, 4th ed. 2012 Thomson Reuters Canada Limited, p. 1023.

[2] (1802), 7 Ves. Jun. 137, 32 E.R. 56 (Ch.).

[3] Jenkins, Jennifer and H. Mark Scott, Compensation & Duties of Estates Trustees, Guardians and Attorneys, Chapter 12, General Duties of Trustees, May 2010, p. 12-20.1.

[4] 1980 CarswellOnt 521.

[5] 1996 CarswellOnt 1178 (ONSC (Gen. Div.)), para. 47.

[6] Lottman v. Stanford, 1980 CarswellOnt 521.

[7] Lottman et al v. Stanford et al., 1978 CanLII 69 (ONCA), at para. 10.

[8] The Supreme Court of Canada noted in Lottman v. Stanford that all of the authorities and writers it had been able to discover emanating from common law jurisdictions, excepting the United States of America, confined the operation of the rule in Howe v. Lord Dartmouth to personalty. See para. 11.

[9] Lottman v. Stanford, 1980 CarswellOnt 521, at para. 13

[10] 1996 CarswellOnt 1178 (OCJ (Gen. Div.)).

[11] 2005 CarswellOnt 1345 (ONSC).

[12] Williams Estate, Re, at para. 11; see also Hopkins, Re (1982), 39 O.R. (2d) 673 (Ont. C.A.).

[13] Arieh Bloom's article, "Fish in a Barrel: Protecting Beneficiaries' Interests in Real Property", 34 E.T.P.J. 361 provides a detailed review of the options available to residuary beneficiaries in protecting their interest in the real property of an estate.

[14] Supra, paras. 8, 11.

[15] 1996 CanLII 779 (ONCA).

[16] 2001 CanLII 27989 (ON SC).

[17] Forbes v. Canadian Tire Corporation Limited, 2013 ONSC 132 (CanLII) at para. 45.

[18] Archie Rabinowitz, "Plene Administravit: Obscure But Not Obsolete" (2009) 28 T.E.P.J. 110.

PART III: UPCOMING EVENTS

STEP Passport Series: Charities

November 18, 2015

Moderator: Elaine Blades

Speakers: Malcolm Burrows, Elena Hoffstein

Program Info