Notaries May Not Draw Wills with Trusts or Life Interests

Notaries May Not Draw Wills with Trusts or Life Interests

The BC Court of Appeal upheld a Supreme Court decision that notaries are not allowed to prepare wills in British Columbia that create life estates or trusts under the Notaries act – in the decision Society of Notaries v Law Society of British Columbia 2017 BCCA 448.

The decision largely revolved around an interpretation of section 18 of the Notaries act RSBC , and in particular section 18 (b) (1) that states:

A member enrolled and in good standing may do the following:

b) draw and supervise the execution of wills

1) by which the will- maker directs the will makers estate to be distributed immediately on death;

2) that provide that if the beneficiaries named in the will predecease the will maker, there is a gift over to alternative beneficiaries vesting immediately on the death of the will maker, or

3) that provide for the assets of the deceased to vest in the beneficiary or beneficiaries as members of a class not later than the date when the beneficiary or beneficiaries or the youngest of the class attains majority.

The court reviewed the history of the legislation in British Columbia pertaining to notaries and referred to a previous decision in Law Society of British Columbia v. MacDonald 2013 BC SC 1204, that restrained the notary from engaging in the unauthorized practice of law, wherein the notary had drawn a will that included a trust and a life estate.

The McDonald decision stated that the notaries act appears directed at simple wills, where the gift is distributed both legally and beneficially immediately

The McDonald decision stated that the interpretation of the words distributed immediately on death in section 18 (B)(1) referred to the immediate distribution of the estate, and did not mean that some beneficial interest will be distributed immediately with rights to full legal title and to possession to be distributed later because the remainder man’s right to distribution is postponed by the life tenant’s right to possession, a will that contains a life estate does not affect immediate distribution.

The court concluded that when comparing the wording of the Legal Profession act and the Notaries act, it was evident that the legislative assembly authorize notaries to draw only the three types of wills described in sections 18 B, (1), (2), and (3).

That provision is disjunctive in that each of its subsections describes a different type of will.

The court then looked at several dictionary interpretations of the words distribute or distribution and found a distinguishing interpretation between the use of the word distributed and the use of the word vested into other subsections, that failed to support the legal argument advanced by the notaries.

The court referred to Jarman on Wills, as approved in the decision Browne v. Moody 1936 AC 635 that stated:

“ Even though there is no other gift than in the direction to pay or distribute in future: yet if such payment or distribution appeared to be postponed for the convenience of the fund their property, the vesting will not be deferred until the period in question. Thus, where a sum of stock is bequeathed to A for life, and after his decease, to trustees, upon trust to sell and pay and divide the proceeds to in between C and D, or to pay certain legacies there out to C. Indeed, as the payment or distribution is evidently deferred until the deceased of A, for the purpose of giving precedence to his life interest, the alternator legatees take a vested interest at the decease of the testator.”

Accordingly, the court rejected the notaries argument that the legislature had authorized notaries to draw wills that contain life estates and trusts in which the beneficial interest or interests vest immediately on the death of the will maker.

Life Estate Can Be Partitioned

Life Estate Can Be Partitioned

Aho v Kelly 1998 CarawellBC 1285 held that a one third owner of a property who also held a life estate in the property had the right to capitalize the life estate and force a sale of the property under the partition of property Act. The other two co owners could not have partitioned the property while the life estate was in place but the holder of the life estate could do so.

Here, this petitioner is a tenant in common in her own right. While she is also a trustee with the respondents under s. 96 of the Estate Administration Act (if that section still applies in light of the 1995 settlement), she nevertheless enjoys an independent capacity as a tenant in common and in that capacity she can invoke s. 2 of the Partition of Property Act.

28 Obviously, a court would be extremely cautious in ordering the sale of lands subject to a life estate where the life tenant does not consent. But where the life tenant agrees, the court enjoys jurisdiction to order a sale:

Chupryk v. Haykowskl (1980), 110 D.L.R. (3d) 108 (Man. C.A.) leave to appeal S.C.C. refused (1980), 110 D.L.R. (3d) (S.C.C.) 108n

29 Chupryk was a case similar to that at bar to the extent that the life tenant there was also a reversioner as to a one-third interest in title to the lands. Matas J.A. considered the cases at length. He summarized the Ontario cases (at 62):

The relationship of tenants in common to each other and to a life tenant has been considered in several decisions. In summary, it has been held (not unanimously) that partition legislation may be invoked in Canada only by persons having “an estate in possession” or having “the immediate right to its possession”: Laskin, ibid, p. 402.

In an early case, Lalor v. Lalor (1883), 9 P.R. 455, it was held by Proudfoot J., that a tenant for life is entitled to a partition and where there is a right to a partition there may be a right to a sale as the Court may determine. But in Murcar v. Bolton (1884), 5 0.R. 164 (followed in Rajotte v. Wilson (1904), 3 0.W.R. 737) in a contest between a life tenant and her children who held the remainder in fee, as tenants in common, it was held by a majority (2:1) that there was no power to compel a sale of land as against the tenant for life. …

30 Matas J.A. concluded (at 65):

… In my respectful view (supported, I think, by the reasoning in Lalor, supra, and in the dissenting judgments in Murcar and Bunting, supra) Mr. Chupryk is entitled to apply for an order for sale and the Court is empowered under the Act to exercise its equitable jurisdiction to make the order. The power is discretionary: Fritz v. Fritz (No. 1), 57 Man. R. 510, [1950] 1 W.W.R. 446, [1950] 2 D.L.R. 104 (C.A.).

No doubt the discretion would be exercised cautiously. It would be a rare case where a life tenant would be compelled to suffer partition or sale against his wishes. But here, the life tenant, who is also the registered owner of an estate in remainder, has not objected to a sale.

31 Chupryk was considered in Morris v. Howe (1982), 38 O.R. (2d) 480 (Ont. H.C.).

32 DuPont J. held (at 485, referring to Chupryk,):

To the extent that this decision may be seen as authority for the propositions that a life tenant may obtain sale of land over the opposition of a remainderman, or that one of several remainderman may obtain partition (and hence possibly sale) of the lands before the remainder has fallen into possession and without the consent of a prior life tenant, Lalor and Bunting v. Servos, establishes that the law of this province is to the contrary. But I think the conflict between the laws of Manitoba and Ontario in these respects may be more apparent than real. The essential fact in Chupryk, was that all the parties interested in the land desired sale. This, it appears to me, distinguishes the case from the various Ontario decisions to which I have referred. This also distinguishes it from the instant application.

33 It will be seen that the case at bar presents a different variation on the theme in Morris . Here one of the reversioners, who is also a life tenant, seeks a sale of the lands.

34 In Morris, DuPont J. goes on to say (at 485):

I do not think that where, as here, land is subject to consecutive interests of a sole life tenant and a remainderman, this Court can or ought to grant the life tenant an order the effect of which will be to defeat the remainderman’s interest in the lands without his consent and against his reasonable opposition. I find that the respondent’s opposition to sale of the lands is reasonable, having regard to all the circumstances. I leave open for future consideration factual situations where it can be concluded that such opposition is not reasonable.

35 I conclude that it is open to me to follow Chupryk, and I do so.

36 That then engages the court’s discretion under sections 2 and 7 of the Partition of Property Act.

37 I will deal with the exercise of my discretion, after I have considered the remaining questions which I have posed.

(b) Common Law Life Estate and Value

38 Clearly a common law life estate is a property interest having some “value”. I use that word in the sense of an amount of money or goods for which a thing can be exchanged in the open market. At common law, a life estate is alienable. Upon a transfer it becomes an estate pur autre vie.

39 Kwasnycki (supra) reminds us that a life tenant has the right to occupy the property in question and to rent or lease the whole or part thereof for his or her lifetime and to enjoy the net income therefrom.

44 That a common law life estate has value was finally, implicity, recognized in Crow v. Samiroden (December 22, 1997), Doc. New Westminister S0-34057 (B.C. S.C.) and Blowers, Re (1985), 24 E.T.R. 143 (Man. Q.B.).

45 I repeat the second question in this analysis:

Does the common law life tenant’s interest have a value capable of capitalization which should properly be discharged out of the proceeds of sale under the Partition of Property Act?

I respond in the affirmative.

Life Estate Valuation

Life Estate Valuation

Re: Zarowiecki 1092 CarswellMan 99 dealt with the valuation of a life estate in a homestead and followed the formula dictated by the Supreme Court of Canada in Re Morice v Davidson (1943) SCR 545, utilizing actuarial calculations.

The Supreme Court of Canada decision, Re Morice; Morice v. Davidson, [1943] S.C.R. 94, 545, [1943] 1 D.L.R. 680, [1943] 4 D.L.R. 658, establishes the proper procedure to be followed. At p. 97 Hudson J. states:

When the appellant and respondent agreed to sell the property, they were selling two separate estates: the life estate of the appellant and the remainder of the fee simple held by the respondent as executor of the estate. The proceeds of the sale belonged to the parties in the proportion which the life estate bore to the remainder.

Further:

20 “… the value of the life estate must be ascertained on the basis of $4,275”, (the net proceeds of the sale) “being the value of both life estate and remainder, and when this is done the appellant will be entitled to be paid the amount fixed as value of the life estate.” And at p. 98:

If the parties cannot agree no doubt the amount should be fixed on a reference with the aid of an actuary.

21 There has been no agreement in this case nor any apparent hope of agreement.

22 The learned justice concluded, at p. 98:

The net proceeds of the sale of the homestead should be divided in proportion to the respective values of the life estate and of the remainder, the widow accordingly receiving out of such proceeds the share representing the value of the life estate.

23 The net proceeds of the sale of the homestead property amounted to $202,284.51, as agreed by counsel. The value of the widow’s life estate, the amount to which she is entitled out of the sale proceeds, is calculated on the basis of actuarial evidence. The ingredients in the calculation are the interest rate, the value of the property and the life expectancy of the widow: Re Casselman (1974), 6 O.R. (2d) 742, 47 D.L.R. (3d) 354 (H.C.).

24 Two experts were heard in the present case on the application of the three factors. Dr. John McCallum, economist and professor of finance and administrative studies at the University of Manitoba, testified that the interest rate to be used would represent a real rate of return. That would take into account such items as inflation and any other of a negative character, as opposed to the nominal interest rate. He stated that in conventional use in North America, two to three per cent were indicative of a real return. He found that three per cent in this case would be a not unreasonable figure.

25 Mr. John Corp, consulting actuary of Reed Stenhouse, adopted the three per cent interest rate as an acceptable and reasonable real rate of return in his calculation of the life interest based on the sale proceeds. He also took into account, he testified, the age of Mary Zarowiecki, which, it was agreed, was 82 years at the time of sale. He used the Manitoba Life Tables for females, 1975-77, published by Statistics Canada. Mr. Corp found that the proportion of the value of the property attributable to the life tenant is 17.83 per cent. The time of sale, when the life estate was disposed of, was the proper time on which to base the calculation. According to Mr. Corp’s testimony, he followed accepted actuarial practice.

26 I find that the value of the life estate is 17.83 per cent of the net proceeds of the sale of the homestead or $36,067.39, which sum is payable forthwith in a lump sum upon receipt by the estate of the sale proceeds.

Understanding the Value of Life Estates

Life estates or life interests means that someone gets the use of a piece of property or some monies and investment or something along those lines for their lifetime and then after they pass away, the interest, whatever it was, goes to what is known as the remainder then.

Many issues can arise in the course of a life estate because many years, of course, are involved in the use of it and this video and paper deal with many of those types of issues. A life estate can be created by many different ways such as a will or a trust or a court order or a transfer or an intestacy. As it pertains, it lasts for a lifetime and then ceases to exist. The value of this can be a substantial sum of money. If it’s for example a house, it would be the value of the use of that property such as rent for the whole lifetime of the person or it may not be substantial enough at all depending on the circumstances.

Adverse Possession

Adverse Possession

Mowaqtt v BC Attorney general 2016 BCCA 113 dealt with a long established principle of  adverse possession  relating to  squatters long time  use of  property that had escheated to the crown .  A claim of squatters to  legal entitlement to a parcel of property  occasionally occurs in estate disputes  in this blog from the BC Court of Appeal  explains this long-established  legal principle .

The appeal was  from an order dismissing the appellant’s claim, based on the doctrine of adverse possession, for recognition of title to land long possessed by them and others.

The claim derived from occupancy of land on Kootenay Lake by squatters no later than 1909.

The absolute legal title to this land escheated to the Crown by dissolution of the corporate titleholder in 1930.

The trial  judge found that the appellants had not proved continuous possession of the land for the years 1916 to 1920. This gap, he said, broke the continuity required for a successful claim.

The BC Court of Appeal  allowed the appeal :

The claim depended upon limitations provisions that derive from 1833 English limitations legislation, received into British Columbia law November 19, 1858, contemporaneously with proclamation of the Colony of British Columbia. The claim depended on a web of circumstantial evidence that should be tested on the basis of “its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions”.

The issues are resolved as follows:

1) The appellants did not lack standing to bring the claim. Whatever claim prior possessors of the land had was passed to the appellants.

2) It was not necessary for the appellants to establish that the squatters’ use of the property was inconsistent with the use of the land intended by the owner of the absolute title. The requirement to prove inconsistent use does not apply in British Columbia.

3) Evidence not considered, or not fully considered in the context of other evidence, demonstrated that the gap in likely possession was shorter than found by the judge. Applying an approach consistent with the Land Title Inquiry Act and the nature of proof available, and considering the shortened gap, the nature of the property and the circumstances known of persons associated with the property, it is more likely than not that the adverse possession of the land by squatters had the degree of continuity between 1916 and 1920 required for the claim. As years subsequent to 1923 were not addressed by the judge, the petition is remitted to the Supreme Court of British Columbia for final determination.

The Doctrine of  Adverse Possession

[5] Adverse possession is an ancient doctrine rooted in the common law’s recognition of a possessory estate in fee simple and attenuated by the application of statutes of limitation. Recognition of an estate based on possession creates conflict between the rights of the possessor (sometimes called the squatter) and the superior right of the true or “paper” owner who has a right to evict the person in possession.

[6] Since 1833 in England, by the Real Property Limitation Act, 1833 (3 & 4 Will 4, c. 27), received in British Columbia on November 19, 1858 through what is now s. 2 of the Law and Equity Act, R.S.B.C. 1996, c. 253, the doctrine of adverse possession has required the true owner to sue to recover possession of land within a limitation period. Once the applicable limitation period has expired, the true owner’s cause of action in trespass and ejectment may be barred or extinguished, in consequence of which the true owner’s title may be extinguished and a person in possession will be entitled to have that title recognized. As L. Smith J. observed in Re: Land Title Inquiry Act and Canadian Pacific Railway Company, 2002 BCSC 1041:

[47] … where a party has had the intention to possess property and has in fact possessed it for the period of time stipulated in the limitation statute, effectively excluding the true owner, the true owner will be barred from bringing an action to recover the land. …

[7] As a true owner’s title is ultimately defeated by failing to pursue his cause of action against a squatter within the limitation period, the doctrine of adverse possession recognizes that the true owner must be in a position to assert his or her rights against someone. Accordingly, various preconditions and limitations to a claim to adverse possession have developed. In Principles of Property Law, 6th ed. (Toronto: Carswell, 2014), Bruce Ziff explains the necessary elements for adverse possession at 142:

… To succeed, the acts of possession must be open and notorious, adverse, exclusive, peaceful (not by force), actual (generally), and continuous. If any one of these elements is missing, at any stage during the statutory period, no rights against the paper owner can be successfully asserted. …

In general, … the adverse use must be such as to put the paper owner on notice that a cause of action has arisen. After all, the doctrine is based on the failure to bring suit within the limitation period, and therefore time should not run unless it is fair to hold a delay against the owner. Hence, the occupation must be open and notorious, and not clandestine. The adverse possessor must send out a clarion call to the owner, who, if listening, should realize that something is awry. Usually this means that the squatter must use the land in the way that an owner might.

[8] The doctrine of adverse possession does not require that the adverse possessor be the same person, provided adverse possession is continuous. Possession by different squatters can be “tacked” on one after the other, provided there is always someone for the true owner to sue. Anger & Honsberger, Law of Real Property, loose-leaf (consolidated December 2015), 3rd ed. by Anne W. La Forest (Toronto: Canada Law Book, 2006) at §28:50 states:

Once adverse possession has commenced, thus causing a right of action to accrue in some person with a superior right to possession, the time will continue to run against that person so long as there is continually some person in adverse possession who may be sued. Thus, either successors by transfer or by devolution to the title of the original adverse possessor, or a subsequent adverse possessor who is acting independently to dispossess the original adverse possessor or those claiming under them, may add together, or tack, all the prior periods of time together to extinguish the superior claim. However, if the original adverse possessor or those claiming title under them should abandon possession before the superior right of possession is extinguished, and there should be a gap before a subsequent adverse possessor acquires possession, no tacking is possible. During the period when no one was in adverse possession, the person with the superior right to possession would have no person to sue. Accordingly, time ceases to run against that person and, when the subsequent adverse possession occurs, time starts running an

Court Costs In Estate Litigation

Court costsIt is very old fashioned thinking that court costs come out of the estate , win or lose, as costs are now an important factor in settlement considerations.

 

The decision Deuschmann Estate v Fallis  2011 BCSC 1009 at paragraph 95 sets out the general principles of costs in estate litigation as pronounced by the BC Court of Appeal in Re Collett Estate 2005 BCCA 291.

 

The relevant principles as they relate to costs in estate proceedings are set out in Collett Estate, Re, 2005 BCCA 291 (B.C. C.A.) by Smith J.A. who, for the court, said:

[7] The general principles that guide the exercise of the discretion to award costs in proceedings in the Supreme Court involving executors and trustees are set out in Turner v. Andrews (1999), 23 C.C.P.B. 84, 30 E.T.R. (2d) 126 (B.C.S.C.), aff’d 85 B.C.L.R. (3d) 53, 2001 BCCA 76. That case concerned an application by a plaintiff for an order that his reasonable legal costs be paid prospectively out of the trust fund in issue in his representative action against the trustees of his pension fund. In dismissing the application, Allan J. summarized the relevant principles as follows:
[8] Section 86 of the Trustee Act, R.S.B.C. 1996, c. 464, reflects the historic statutory authority which permits a trustee to seek the opinion, advice or direction of the Court on a question respecting the management or administration of trust property. In such circumstances, the Court may order the costs of the parties to be paid out of the estate. That principle was expanded in Re Buckton, [1907] Ch. 406 (Eng. Ch. Div.) which held that, in litigation against a trustee, the legal fees of a plaintiff beneficiary may be paid out of the trust fund on an indemnity basis where the issue concerns the interpretation of the trustee’s powers.
Buckton considered the beneficiary’s entitlement to costs in three classes of cases:
(1) An application made by trustees of a will or settlement, asking the Court to construe the trust instrument for their guidance; to ascertain the interests of the beneficiaries; or to answer a question which arises in the administration of the trusts. In such instances, the costs of all parties, which are necessarily incurred for the benefit of the estate, should be taxed as between solicitor and client and paid out of the estate.
(2) An application made by the beneficiaries as a result of difficulty of construction or administration of the trust which would have justified an application by the trustees. Again the application is necessary for the administration of the trust and the costs of all parties, which are necessarily incurred for the benefit of the estate, are paid out of the estate.
(3) An application made by the beneficiaries who make claims adverse to other beneficiaries. Such litigation is adversarial in nature and, subject to the Court’s discretion, the unsuccessful party bears the costs of those whom he or she brings to Court.
[9] The Court stated at p. 415:
It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs.
96      The facts of this case bear the greatest similarities to the third category of action. Thus, I am satisfied that it is the plaintiffs in this case, rather than the estate, who should bear the costs of this action.
97      Furthermore, an order of special costs against the plaintiffs is warranted. In Starko Estate v. Harbour Cove Investment Corp., 2009 BCSC 1473 (B.C. S.C.), District Registrar Sainty set out how special costs in estate litigation differ from special costs in other types of litigation:
[76] I should also note that, to some extent, special costs in estate litigation differ somewhat from other types of litigation where special costs ordered paid are by one party to another for conduct that is scandalous, outrageous, misbehaviour or “deserving of reproof or rebuke”: see Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (B.C.C.A.) and Leung v. Leung (1993), 77 B.C.L.R. (2d) 314.).
In general executors are entitled to full indemnification for their legal costs, provided such executor has not pursued unnecessary or wasteful litigation. …

Son May Not Inherit For Murdering Mother

murder mom

Re Fenotti Estate 2014 BCSC 1533 reviewed the law and held that a murderer of the deceased, his mother, son may not inherit from her as a result of public policy that prevents a wrong doer from benefiting from his or her own crime.

The personal representative of the deceased’s estate applied to the court for various directions, including whether a surviving son who  murdered his mother can inherit from her estate on an intestacy.

The Court held a clear NO.

 

THE  LAW

 

“As to the first question, the petitioner referred me to the decision of Mr. Justice LoVecchio of the Alberta Court of Queen’s Bench in Re Bowlen (Estate), 2001 ABQB 1014, 207 D.L.R. (4th) 175. In that case, a woman had murdered her parents. Both parents left wills under which the daughter would receive bequests. The personal representative of the estates of the parents applied for advice and directions as to who was entitled to receive the interest that the culpable daughter would have received from the estates.

[10]         In obiter dicta at para. 17 of his reasons, Mr. Justice LoVecchio, relying on earlier decisions in Cleaver v. Mutual Reserve Fund Life Association, [1892] 1 Q.B. 147, 56 J.P. 180 (C.A.), and Garbe v. Alberta (Public Trustee), [1999] 5 W.W.R. 696, 64 Alta. L.R. (3d) 103 (Surr. Ct.), held:

[17]      The rule of public policy which excludes the criminal has also been applied to exclude all claiming under the criminal, unless they have alternative or independent rights. In order to take under these independent or alternative rights, the person exercising the right must have clean hands. [Footnote omitted.]

[11]         His statement as to the existence of a rule of public policy preventing a criminal from benefitting from his or her crime is supported by a line of authority in this province, to which LoVecchio J. did not refer.

[12]         In In re Medaini Estate, [1927] 2 W.W.R. 38, 38 B.C.R. 319 (S.C.), Mr. Justice Murphy heard an application, brought by the administrator de bonis non of the estate of Mary P. Medaini, for directions as to whether, in the case of an intestacy, a murderer is entitled to share in the distribution of the estate of the murdered person.

[13]         Murphy J. held, at 39:

The English Courts have decided that a murderer can take nothing under the will of his victim. The decisions are based upon public policy. I can see no reason why the principle is not applicable to cases of intestacy. The reason assigned in some American decisions for refusing to deprive a murderer of benefits accruing to him under the intestacy of his victim is that to do so would be to contravene the express provisions of the Statutes of Distribution. This reason would be equally valid in the case of a will which also depends upon a statute for its validity. The Wills Act, R.S.B.C., 1924, ch. 274, declares that the will speaks from the death of the testator. The English decisions binding on me have overridden this provision in the case of a murderer. There is nothing which makes the Statutes of Distribution more sacrosanct than the Wills Act. If public policy is a good ground for overriding the latter, it is equally so for acting likewise in regard to the former. I, therefore, hold the murderer takes nothing under the intestacy.

[14]         In Baumann v. Nordstrom (1959), 30 W.W.R. 385,[1959] B.C.J. No. 42 (S.C.), Mr. Justice Wilson, as he then was, considered a case where a man was killed by a fire which destroyed his dwelling. He left no will. His widow, an inmate of the provincial mental hospital, had set the fire that killed him. Acting through her committee, she attempted to claim her statutory share of his estate. Her claim was opposed by a daughter of the man from a previous marriage.

[15]         At 386, Wilson J. adverted to two propositions that were accepted by both counsel before him:

1.         That if her crime, whether murder or arson, killed her husband she cannot inherit and the rule is the same on an intestacy as it would be if the property had been willed to her. See In re Sigsworth; Bedford v. Bedford [1935] 1 Ch 89, 104 LJ Ch 46.

2.         That if at the time she set the fire she was insane within the meaning of the M’Naghten rules there was no crime and she may inherit. See In re Pitts; Cox v. Kilsby [1931] 1 Ch 546, 100 LJ Ch 284; and In re Houghton [1915] 2 Ch 173, 84 LJ Ch 726.

[16]         Wilson J. held, at 396, that the defendant wife, when she set the fire, “did not then appreciate the nature and quality of her act or know that it was wrong.” Accordingly, she was entitled to inherit.

[17]         A majority of the British Columbia Court of Appeal, in reasons for judgment reported at 34 W.W.R. 556 and 27 D.L.R. (2d) 634, did not find it necessary to review the finding as to the defendant’s insanity, but allowed the appeal of the matter on the ground that the trial judge was without jurisdiction to determine by way of originating summons, or other civil proceeding, whether or not a person had committed a crime.

[18]         In reasons for judgment reported at [1962] S.C.R. 147 and 37 W.W.R. 16, the Supreme Court of Canada allowed the appeal and dismissed the cross appeal, thereby restoring the decision of the trial judge. Mr. Justice Ritchie, for the majority on the issue, stated at 156 that:

The rule of public policy which precludes a person from benefiting from his or her own crime is an integral part of our system of law, and although some doubts have been raised as to whether this rule overrides the statute law as to the distribution of the estate of an intestate (see In re Houghton, Houghton, v. Houghton [[1915] 2 Ch. 173 at 176]), the better view appears to me to be that it applies to such cases (see In re Pitts, Cox v. Kilsby [[1931] 1 Ch. 546 at 550], Whitelaw v. Wilson [(1934), 62 C.C.C. 172 at 177], and Re Estate of Maud Mason [[1917] 1 W.W.R. 329, 31 D.L.R. 305]). As Fry L.J. in Cleaver v. Mutual Reserve Fund Life Association [[1892] 1 Q.B. 147, 61 L.J.Q.B. 128]… at p. 156 said:

It appears to me that no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting to the person asserting them from the crime of that person.

Purported Trust is a “Sham” Trust

sham trusts

Plaintiff’s often allege that a purported trust is a sham trust that the courts should ignore.

The following is the criteria that the courts utilize when dealing with such an assertion as was discussed in

M. Dhaliwal Holdings Inc. v. Pacific Blue Farms Ltd. , 2014 BCSC 1482

Sham Trusts

45      The petitioner argues that, should a trust be found in this case, the Registrar should have gone on to find that the trust was a sham, quoting the test for a “sham” transaction given by Lord Diplock in Snook v. London and West Riding Investments Ltd., [1967] 2 Q.B. 786 at 802:
…. it means acts done or documents executed by the parties to the “sham” which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities … that for acts or documents to be a “sham”, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating.
46      The above passage was quoted from TLC The Land Conservancy of British Columbia (Re), 2014 BCSC 97 at para. 204, where Fitzpatrick J. went on to say:
[205] As can be seen from the above statement, the essence of a sham transaction arises from the intention of all parties to the instrument. As stated in Waters at 146, this concept is different than the requirement of certainty of intention and is more concerned with the intention of the settlor to perpetrate an “illegality” or “illusory trust”, as a result of which the trust is void.
[206] This principle from Snook has been applied in Canada generally: Minister of National Revenue v. Cameron, [1974] S.C.R. 1062 at 1068; Trident Foreshore Lands Ltd. v. Brown, 2004 BCSC 1365at para. 39.
[207] In addition, the principle has been applied in Canada in respect of alleged “sham trusts”, often in cases involving bankruptcies and fraudulent transactions affecting creditors. In Hirji v. Scavetta (1993), 15 O.R. (3d) 371, [1993] O.J. No. 2546 (Gen. Div.) at para. 32, the court found that a transfer in trust was designed to avoid creditors. In Biggar (Re), 2005 BCSC 1657, the court, after reviewing other examples of “sham trust” (para. 23), concluded that the bankrupt had dealt with the subject property as his alone and had never intended to divest any beneficial interest in the shares.
[208] In Forsyth (Re), 2010 BCSC 1720, and following Biggar and Hirji, the court found a declaration of trust to be void as an attempt by a bankrupt to shield his assets from his creditors. At para. 24, the court accepted that post “trust” conduct was relevant to a consideration and determination of the true intention of the settlor.

How to Sever a Joint Tenancy With a Co Owner

joint tenancyA prospective client called yesterday inquiring whether three siblings who had joint tenancy with a fourth sibling, can force a sale so as to buy out the troublemaking fourth sibling.

I answered yes,  as the Partition of Property act allows for a severance of the co owned  joint tenancy, subject to the court’s discretion, in some  situations such as economic oppression.

More information on the Partition of Property act can be found in the disinherited.com blog dated January 3, 2014, The Partition Act Allows Courts to Order Co-Owned Property to be Sold.

Three further detailed articles on severance of joint tenancies can be found in my blogs.  Severance of Joint Tenancies (Part 1), Severance of Joint Tenancies (Part 2) and Severance of Joint Tenancies by a Course of Dealing.

To sever the joint tenancy and convert it into a tenancy in common where there is no right of survivorship, the co owner can simply file a transfer from oneself to oneself for the sole purpose of severing the joint tenancy.

The Formalities of a Valid Marriage

valid marriageThe Formalities of a Valid Marriage

 

 45 If the parties to a marriage, solemnized in good faith and intended to be in compliance with the legislation, are not under a legal disqualification to contract such marriage and have lived together and cohabited as a married couple after such solemnization, such marriage shall be deemed a valid marriage, although the person who solemnized the marriage was not authorized to solemnize marriage, and despite the absence of or any irregularity or insufficiency in the publication of banns or the issue of the licence.[FN1] Where neither party has the requisite good faith, no defect will be overlooked and the marriage will be regarded as invalid.[FN2]

§46 The mere irregularity of failing to wait for the expiration of the time set for the issuing of the licence before getting married will not make the marriage a nullity.[FN3] If a marriage does not formally comply with the legal requirements, the party who wishes to prove the validity of the marriage has the burden to prove the marriage was valid on a balance of probabilities.[FN4]

§47 Being under age at the time of obtaining a licence does not invalidate the subsequent marriage, unless the provincial statute expressly states that the marriage is void.[FN5]

§48 The validity of a marriage and its formal requirements are determined according to the law where the marriage took place.[FN6] If a marriage has been entered into in a country by the law of which no formalities are required other than an agreement to marry followed by cohabitation, such marriage will be regarded as formally valid in Ontario.[FN7]

§49 Whether a religious ceremony is required depends entirely upon the law of the place where the marriage is celebrated; a marriage valid under such law cannot be questioned on the ground that it violates religious principles binding on one or both parties to the marriage.[FN8] On the other hand, a religious marriage is treated as void if it does not receive recognition under the law of the place where the marriage is celebrated.[FN9]

§50 If a marriage has taken place in another country and all that is known is that it was publicly solemnized by a minister or other person who usually solemnizes marriages in that country, and that the parties ever after were treated and reputed there as man and wife, the court should, in the absence of express proof of some law of that country rendering such a marriage illegal, presume the marriage to have been duly contracted according to the law of the country in which it took place.[FN10] In respect of the formal validity of the marriage, that is, the validity of the ceremony, once the ceremony and subsequent cohabitation have been proven, the law will presume that everything necessary to the validity of the ceremony occurred or was performed.[FN11] Retroactive legislation of foreign countries validating informal marriages contracted within the foreign jurisdiction is recognized as binding.[FN12] Consent must be considered as part of the form of marriage, and the forms of entering into a contract of marriage are to be regulated by the lex loci contractus.[FN13]

FN1. Marriage Act, R.S.A. 2000, c. M-5, s. 23(1); Marriage Act, R.S.B.C. 1996, c. 282, s. 11 [am. 2002, c. 74, s. 45; 2011, c. 25, s. 403]; Marriage Act, R.S.M. 1987, c. M50, C.C.S.M., c. M50, s. 29 [am. 2008, c. 42, s. 62(5)]; Marriage Act, R.S.O. 1990, c. M.3, s. 31 [am. 2005, c. 5, s. 39(5)]; Marriage Act, S.S. 1995, c. M-4.1, s. 21; Luu v. Ma (1999), 1999 CarswellOnt 493 (Ont. Gen. Div.) (parties married in Vietnam; if marriage not valid according to Vietnamese law, marriage validated pursuant to Marriage Act, s. 31; parties intending to marry, living together as husband and wife and having child together); Upadyhaha v. Sehgal (2000), 2000 CarswellOnt 3306 (Ont. S.C.J.) (saving provision not operating to create valid marriage as parties not living together or cohabiting as man and wife after ceremony); McKenzie v. Singh (1972), 1972 CarswellBC 163 (B.C. S.C.) (marriage for immigration purposes; marriage not entered into in good faith); Alspector v. Alspector (1957), 1957 CarswellOnt 39 (Ont. C.A.) (lack of marriage licence not invalidating marriage); Czuba v. Hassan (1977), 1977 CarswellOnt 172 (Ont. H.C.) (parties intending compliance); Alspector v. Alspector (1957), 1957 CarswellOnt 38 (Ont. H.C.); affirmed (1957), 1957 CarswellOnt 39 (Ont. C.A.) (position under Act being unclear when only one party acting in good faith); Friedman v. Smookler (1963), 1963 CarswellOnt 48 (Ont. H.C.); Birinyi v. Lindstrom (2009), 2009 CarswellBC 180 (B.C. S.C.).

FN2. McKenzie v. Singh (1972), 1972 CarswellBC 163 (B.C. S.C.).

FN3. Penner v. Penner (1947), 1947 CarswellBC 5 (B.C. S.C.).

FN4. Chhokar v. Bains (2012), 2012 CarswellOnt 15208 (Ont. S.C.J.).

FN5. Hobson v. Gray (1958), 1958 CarswellAlta 27 (Alta. T.D.); but see Ross (MacQueen) v. MacQueen (1948), 1948 CarswellAlta 6 (Alta. T.D.).

FN6. Cao v. Le (2007), 2007 CarswellBC 737 (B.C. S.C.) (parties having no ceremony to mark marriage but marriage registered in appropriate government office in Vietnam; numerous people in Vietnam satisfied that parties validly married under Vietnamese law; accordingly, parties’ relationship meeting requirements of marriage under Vietnamese law; parties therefore spouses for purposes of Canadian legislation in question).

FN7. Forbes v. Forbes (1912), 1912 CarswellOnt 25 (Ont. H.C.).

FN8. Despatie v. Tremblay (1921), 1921 CarswellQue 59 (Quebec P.C.) (Quebec law).

FN9. De Wilton, Re, [1900] 2 Ch. 481; but see Alspector v. Alspector (1957), 1957 CarswellOnt 38 (Ont. H.C.); affirmed (1957), 1957 CarswellOnt 39 (Ont. C.A.) (parties not obtaining licence; marriage performed according to rites of Jewish faith held valid).

FN10. Doe d. Breakey v. Breakey (1846), 2 U.C.Q.B. 349 (U.C. Q.B.) at 355; Robb v. Robb (1891), 20 O.R. 591 (Ont. H.C.) at 597 (well known principle of law and morality asserting, where doubt existing as to legality of marriage, that courts of justice are bound to decide in favour of marriage); Sottomayer v. De Barros (1877), 3 P.D. 1 (Eng. C.A.); McColm v. McColm (1969), 1969 CarswellOnt 222 (Ont. H.C.) (Scottish marriage irregular in form but valid under Scottish law); see also Harris v. Cooper (1871), 1871 CarswellOnt 177 (Ont. Q.B.) (marriage of slaves).

FN11. Clark v. R. (1921), 1921 CarswellNB 3 (S.C.C.); Tero, Re (1949), 1949 CarswellBC 61 (B.C. C.A.); Forbes v. Forbes (1912), 1912 CarswellOnt 25 (Ont. H.C.).

FN12. Starkowski v. Attorney-General (1953), [1954] A.C. 155 (U.K. H.L.) (prior religious marriage validated by retroactive legislation before celebration of subsequent marriage).

FN13. Hunt v. Hunt (1958), 14 D.L.R. (2d) 243 (Ont. H.C.).