Today on Hull on Estates, Paul Trudelle and Holly LeValliant discuss a decision of the Queen’s Bench of Saskatchewan, which dealt with the issue of whether a person who transfers real property into joint tenancy is entitled to change her mind.
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Click here for more information on Holly LeValliant.
As I was recently researching the duty of trustees, I stumbled upon a term that I might fully have expected to have found in a Dr. Seuss book rather than a legal text. I shall use it in the context in which it appears, as a subject title, although I doubt this will help you figure out what it means:
Dishonourable duty to “gazump”
I found the whole passage so fascinating that I shall reproduce it for your enjoyment and potential enlightenment:
“Where trustees who have entered into negotiations for the sale of trust property receive a subsequent higher offer from another party they should at least probe the subsequent offer irrespective of questions of commercial morality which might have led a vendor who was not a trustee to close the deal with the original purchaser. Nevertheless, the trustees retain such a discretion as will allow them to act with proper prudence, and may pray in aid the commonsense rule underlying the old proverb “A bird in the hand is worth two in the bush”; so that there may be cases in which they could properly refuse a higher offer and proceed with a lower one.”
Underhill & Hayton, “The Law of Trusts and Trustees” (London: LexisNexis Butterworths, 2007) at page 716
Click here for the Wikipedia definition of gazumping and its opposite, gazundering (just for fun). Here is a link to a gazumping reference in a 2006 judgment, just in case you don’t believe me – see paragraph 45.
There are a couple of lessons to be learned here. The first is that not all legal terms need be Latin or pretentious-sounding. The second is that while the law may apparently foist a dishonourable duty upon (poor unsuspecting) trustees, if they happen to be holding a bird in one hand they will probably be okay.
I’ll bet every Who in Whoville already knew that.
Sharon Davis – Click here for more information on Sharon Davis.
The death of Edward M. Kennedy on August 25, 2009 marked the end of era. The Lion of the Senate received much praise for his 47-year contribution to American politics.
In his memoir – True Compass – “Teddy” provides a posthumous review of his life and of his famous family. It is a reminder that people leave a range of legacies when they die. Several of his siblings left their own mark, including his sister Eunice. Edward Kennedy’s political accomplishments are a great part of his legacy. (I have read about JFK and Bobby and will enjoy this read.)
There is the financial side of Edward Kennedy’s life (and of each Kennedy) which presumably continues to back many of the endeavours of the current generation. Edward Kennedy, apparently, reported a net worth in 2008 between $15 million and $72.6 million, but a year earlier the range was between $46.9 and $157 million. As a U.S. senator, Kennedy earned a base salary of $165,200 a year.
The main source of Kennedy’s wealth was his father and family patriarch Joseph P. Kennedy, a former U.S. Ambassador to Great Britain, whose fortune stemmed from banking, real estate, liquor, films and Wall Street holdings that eventually grew to an estimated $500 million by the 1980s.
A big portion of that wealth came from Kennedy Sr.’s purchase of Chicago’s Merchandise Mart in 1945 for $12.5 million. Spanning two city blocks and rising 25 stories, the sprawling limestone and terra-cotta mart had its own zip code. It was the world’s largest building until the Pentagon was built in the 1940s. The Kennedy family sold its interest in the Merchandise Mart in 1998 for $450 million in cash and a $100 million interest in the purchasing trust. The holdings of Edward Kennedy included a string of publicly and non-publicly traded trusts and assets.
The Kennedy family contributed a great deal to public service. Liberal projects and public service work by the family is supported in part, I expect, by the resources available to them through family investments.
While we did not know the patriarch of the Kennedy family, we can glimpse the satisfaction he likely felt that his investments – in his family and businesses – contributed to the greater good.
The scale may be far different, but within our own families, each of us can support the work and the dreams of the next generation with careful planning and wise investments of our time, energy and financial resources.
Thank you for reading.
Jonathan Morse – Click here for more information on Jonathan Morse.
On Tuesday I blogged about mortgage fraud and suggested that financial institutions may be at greater risk because of the B.C. Court of Appeal decision: Re Oehlerking Estate, 2009 BCCA 138.
Why would they be at increased risk?
In the B.C. case, the Judge ordered that the fraudster’s title be set aside and that a new title be issued in the name of the plaintiff executrix. However, the Judge was satisfied that the financial institution had not “participated in the fraud” therefore the mortgage remained as a valid charge on title to the land.
The B.C. Court of Appeal overturned that latter point when it declared that the mortgage is null and void as against the plaintiff and her title.
The reasons were the same as those presented in a B.C. Court of Appeal decision released on the same day in Gill v. Bucholtz (2009 BCCA 137). There is a thorough review of the Torrens land registry system and the development of B.C.’s Land Title Act. Land title systems differ per province but the B.C. decision is likely persuasive.
In Gill v Bucholtz, the Court held that the B.C. Legislature adopted the policy that the cost of frauds perpetrated against mortgagees and other chargeholders should be borne not by the public (as the funders of the Assurance Fund but by lenders and other chargeholders themselves.”
Parties to real estate transactions rely on title searches. The case law shows that title searches have limitations, especially if a fraudster has used someone else’s identification to change the title document. It is up to lenders to now perform due diligence that may require that they delve deeper than the documents alone. Sometimes good old fashioned shoe leather might be put to work to check out the property in question; even a knock on the door to ensure that the owner is actually refinancing by way of a new mortgage. This extra work may come with a fee though.
Thank you for reading.
The cooler weather is cause for many people, retirees especially, to plan an annual sojourn south.
In preparing for the winter, protecting real property — often a significant asset — may be top of mind.
My colleague, Paul Trudelle, wrote about "Real Estate Transactions Involving Powers of Attorney" in July 2008. While travelling south for the winter does not require a sale, steps can be taken to minimize risks to real property. The Government of Ontario suggests that to avoid real estate fraud one should protect his or her identity and be alert to identity theft.
Regarding a Power of Attorney, the government also suggests caution: "Whenever you give another person a power of attorney that permits them to deal with your personal assets, you should consult with your lawyers or advisers regarding appropriate limitations."
In a 2004 Canadian Bar Association paper — Cross-Border Issues for Snowbirds and Roaming Retirees – Marilyn Piccini Roy wrote: "If the Snowbird owns real estate elsewhere, this power of attorney may not be recognized there if the law of the situs applies its own law to the formal or substantive validity of the power of attorney or to its effectiveness vis-à-vis third parties." If a Power of Attorney deals with assets in different jurisdictions, one should seek legal advice in the jurisdiction of the asset(s).
Recent Ontario case law highlights issues that can arise regarding real estate when a fraudulent Power of Attorney is used. Reviczky v. Meleknia; Caplan (Intervenor) 2007 Canlii 56494 (On. S.C.) raises quesitons about a solicitor’s duty to"go behind" a Power of Attorney by enquiring about the donor’s mental capacity at the time of signing and later, as well as evidentiary requirements. The recent case law reminds all of us, including snowbirds, of the risks that exist with a Power of Attorney.