Tag: supreme court of canada

05 Feb

Hull on Estates #565 – The Supreme Court of Canada on Henson Trusts

76admin Estate & Trust, Litigation, Podcasts Tags: , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Nick Esterbauer discuss S.A. v Metro Vancouver Housing Corp., in which the Supreme Court of Canada addresses Henson trusts for the very first time.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Natalia Angelini.

Click here for more information on Nick Esterbauer.

10 Dec

Are remedial constructive trusts available on the basis of “good conscience”?

Nick Esterbauer Estate & Trust, Litigation, RRSPs/Insurance Policies Tags: , , , , , , , , , 0 Comments

The Supreme Court of Canada’s recent decision in Moore v Sweet provided meaningful clarification on the Canadian law of unjust enrichment and, in particular, the juristic reason analysis.

As it made a finding of unjust enrichment, it was not necessary for the Court to consider the second issue before it, being whether, in the absence of unjust enrichment, a constructive trust could nevertheless be imposed in the circumstances on the basis of “good conscience”.

In 1997, the Supreme Court released its decision in Soulos v Korkontzilas.  That case considered situations that may give rise to a constructive trust remedy.  In referring to the categories in which a constructive trust may be appropriate, which were noted to historically include where it was otherwise required by good conscience, Justice McLachlin (as she then was) stated as follows:

I conclude that in Canada, under the broad umbrella of good conscience,  constructive trusts are recognized both for wrongful acts like fraud and breach of duty of loyalty, as well as to remedy unjust enrichment and corresponding deprivation…Within these two broad categories, there is room for the law of constructive trust to develop and for greater precision to be attained, as time and experience may dictate.

Since 1997, Soulos and the above excerpt have been interpreted inconsistently by scholars and courts of appeal throughout Canada.  Some consider Soulos to restrict the availability of constructive trust remedies to only situations where there has been a finding of unjust enrichment or wrongful conduct, while others favour a more liberal interpretation.

The appellant in Moore v Sweet sought, in the alternative to a remedy on the basis of unjust enrichment, a remedial constructive trust with respect to the proceeds of the life insurance policy on the basis of good conscience.  In choosing not to address this issue, Justice Côté (writing for the Majority) stated as follows:

This disposition of the appeal renders it unnecessary to determine whether this Court’s decision in Soulos should be interpreted as precluding the availability of a remedial constructive trust beyond cases involving unjust enrichment or wrongful acts like breach of fiduciary duty. Similarly, the extent to which this Court’s decision in Soulos may have incorporated the “traditional English institutional trusts” into the remedial constructive trust framework is beyond the scope of this appeal. While recognizing that these remain open questions, I am of the view that they are best left for another day.

It will be interesting to see if and when the Supreme Court ultimately chooses to determine “the open questions” regarding the availability of the remedial constructive trust.  Until then, it appears that some debate regarding the circumstances in which it may be imposed will remain.

Thank you for reading.

Nick Esterbauer

26 Nov

Moore v Sweet: Hull & Hull LLP at the Supreme Court of Canada

Hull & Hull LLP Beneficiary Designations, Litigation, News & Events Tags: , , , , , , , , , 0 Comments

Earlier this year, we argued the appeal in Moore v Sweet before the Supreme Court of Canada.  On Friday, the Court released its decision, which has provided what, in our view, was necessary clarification of the juristic reason component of the test for unjust enrichment.  The Supreme Court has also confirmed the circumstances in which a constructive trust remedy is appropriate within the context of unjust enrichment.  Our firm was pleased to argue the appeal at the Supreme Court in February 2018 and to learn on Friday of our client’s success in the reversal of the split decision of the Ontario Court of Appeal.

The facts of the case were relatively straightforward: The appellant had previously been married to the deceased.  Around the time of their separation, the appellant and the deceased entered into an oral agreement whereby the appellant would remain the designated beneficiary for the life insurance policy on the deceased’s life on the basis that she would continue to pay the related premiums.  The appellant paid the premiums on the life insurance policy until the deceased’s death approximately 13 years later, while, unbeknownst to the appellant, the deceased named his new common law spouse (the respondent), as irrevocable beneficiary of the policy soon after the oral agreement was made.  At the time of his death, the deceased’s estate was insolvent.

At the application hearing, Justice Wilton-Siegel awarded the appellant the proceeds of the life insurance policy on the basis of unjust enrichment.  The respondent was successful in arguing before the Ontario Court of Appeal that the designation of an irrevocable beneficiary under the Insurance Act was a “juristic reason” that permitted what was otherwise considered the unjust enrichment of the respondent at the appellant’s expense.  The appellant was subsequently granted leave to appeal to the Supreme Court of Canada.

Justice Coté, writing for the Majority, agreed that the test for unjust enrichment was flexible and permits courts to use it in the promotion of justice and fairness where required by good conscience.  The Court clarified that the juristic reason permitting an unjust enrichment needs to justify not only the enrichment of one party but also the corresponding deprivation of the other party.  While the irrevocable beneficiary designation may have required the payment of proceeds for the policy to the respondent, it could not be considered as also requiring the appellant’s deprivation of the proceeds to which she was entitled under the oral agreement.  The Court found that a designation of an irrevocable beneficiary under the Insurance Act precludes claims by creditors of an estate, but it does not state “with irresistible clearness” that it also precludes a claim in unjust enrichment by a party who has a contractual or equitable interest in the proceeds.

While reaching the opposite result, the dissent acknowledged that this was a difficult appeal, in which both parties were innocent and had strong moral claims to the proceeds of the life insurance policy.

We thoroughly enjoyed the opportunity to argue this case before the Supreme Court of Canada earlier this year and look forward to following the role of this decision in further developments in the Canadian law of unjust enrichment.

Thank you for reading.

Ian M. Hull
Suzana Popovic-Montag
David Morgan Smith

30 Jul

Should advanced age be a factor considered during criminal sentencing?

Nick Esterbauer Elder Law, Ethical Issues, Health / Medical Tags: , , , , , , , , , , 0 Comments

The Supreme Court of Canada recently refused leave to appeal a decision of the Quebec Court of Appeal that raises the issue of whether old age should be considered as a factor during sentencing.

The appellant had been convicted of fraud, conspiracy to commit fraud, and laundering the proceeds of crime at the direction of or in association with a criminal organization.  A prior appeal regarding the conviction itself had been dismissed by the Quebec Court of Appeal.

The Lower Court recognized the role of the appellant as a directing mind of a criminal organization and the losses suffered by the government as a result of his fraudulent acts.  The Court had stated that age, even if it could be taken into account, was “only one factor among many”, which “cannot have a determinative impact because of the great number of aggravating factors”.

The appellant subsequently sought leave to appeal his four-year prison sentence.  The appellant asserted that, at 81 years of age and in a poor state of health, his sentence ought to be replaced with a conditional sentence to be served in the community or otherwise limited in duration to allow him the prospect of life after prison.

The Quebec Court of Appeal summarized the law as it relates to the consideration of age during sentencing as follows (at paras 38, 39, 42, 43):

The advanced age of an accused must be taken into account when determining a sentence, as Chief Justice Lamer indicated in R. v. M. (C.A.)

The age factor must, however, be considered in light of the health of the offender as it relates to his life expectancy. Consequently, the mere fact that an accused is elderly is not, in and of itself, a mitigating factor in determining a prison sentence, unless the evidence reveals that he has little chance of serving the sentence before passing away. This is increasingly true with the general aging of the Canadian population and the raised probability of longer life expectancies.

As a result, if at the time a sentence is imposed, the offender’s state of health does not suggest that he is unlikely to complete the sentence before his demise, the judge then has the necessary discretion to impose an appropriate sentence in light of all the usual factors and criteria…

It is possible that an offender’s state of health deteriorates following sentencing. This possibility increases with the age of the offender. The sentencing judge may not, however, speculate on this subject and must determine the sentence in accordance with the evidence before him when it is rendered…

The Court nevertheless considered the prison sentence to be appropriate, notwithstanding the expectation of the appellant that he may not survive it.  The Supreme Court agreed with the reasons of the Quebec Court of Appeal.

With Canada’s aging population, cases like this, in which an individual convicted of a crime is elderly and/or in a poor state of health, can be expected to increase in frequency.  The Supreme Court has confirmed that (for the time being at least), while age is a factor to be considered during sentencing, it is merely one to be assessed among others, rather than being determinative of the issue.

Thank you for reading.

Nick Esterbauer

14 May

SCC to Revisit Standards of Review

Nick Esterbauer General Interest, Litigation Tags: , , , , , , , , 0 Comments

Last week, the Supreme Court of Canada granted leave to appeal the judgment of the Federal Court of Appeal in the Minister of Citizenship and Immigration v Alexander Vavilov, and announced that this appeal will be heard along with the appeals of two other judicial review matters.

The Vavilov appeal concerns the decision of the Registrar of citizenship to revoke the status of a Canadian on the basis that his parents were not lawful Canadian citizens or permanent residents at the time of his birth.  Though Canadian citizens, the man’s parents had been undercover spies and, under the provisions of the Citizenship Act, were considered to be “employees or representatives of a foreign government”, rather than lawful citizens of Canada whose son would be Canadian by virtue of their citizenship and the place of his birth alone.  The man’s application for judicial review of the decision of the Registrar to cancel his citizenship was initially dismissed by the Federal Court on the basis that the relevant section of the Citizenship Act did not limit the meaning of representatives or employees of foreign governments.  The Federal Court of Appeal reversed this decision, concluding that the decision of the Registrar was unreasonable and that the purpose of the section of the Citizenship Act in dispute was to apply only in respect of representatives of foreign governments who enjoy diplomatic immunities or other privileges.

While it is rare for the Supreme Court to release reasons granting or refusing leave to appeal beyond one sentence, the Court’s recent judgment granting leave to appeal elaborates as follows:

The Court is of the view that these appeals provide an opportunity to consider the nature and scope of judicial review of administrative action, as addressed in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, 2008 SCC 9, and subsequent cases. To that end, the appellant and respondent are invited to devote a substantial part of their written and oral submissions on the appeal to the question of standard of review, and shall be allowed to file and serve a factum on appeal of at most 45 pages.

Matters of judicial review are generally unrelated to estates law.  However, members of our firm have assisted clients with applications for judicial review involving estate-related issues and we can appreciate the value of the clarification of the state of the law involving standards of review that may come from the Supreme Court’s reconsideration of these principles.

Thank you for reading.

Nick Esterbauer

 

Other blog entries that you might enjoy reading:

 

22 Feb

Was there a breach of duty? The Q&A from the New SCC Decision

Doreen So Estate & Trust, Executors and Trustees, General Interest, In the News, Passing of Accounts, Trustees Tags: , , , , , , 0 Comments

The facts in the new Supreme Court of Canada decision on trustee duties were previously set out in last Tuesday’s edition of this blog.

Valard Construction Ltd. v. Bird Construction Co. arose from a commercial matter in which Valard was a subcontractor in a construction oilsands project where Bird was the general contractor.  Bird was the trustee of a labour and material payment bond that could have been available for Valard’s claim for unpaid invoices if notice of claim was given to the surety within a fixed time limit.  Valard claimed against Bird when Bird failed to disclose the existence of the bond to Valard within the relevant time period.

Justice Brown, for the majority, found that Bird had a fiduciary duty to disclose the bond to Valard even though Valard did not explicitly ask about the existence of the bond until it was too late.  In order to determine whether a breach of trust occurred, Justice Brown went on to consider what was required of Bird in order to discharge its duties to Valard because “the question is not what Bird could have done in this case, but what Bird should reasonably have done in the circumstances of this case to notify beneficiaries such as Valard of the existence of the bond” (paragraph 29).  In concluding that the duty was breached in this instance, paragraph 26 is particularly instructive for the analysis:

Like all duties imposed upon trustees, the standard to be met in respect of this particular duty is not perfection, but rather that of honesty, and reasonable skill and prudence.[31] And the specific demands of that standard, so far as they arise from the duty to disclose the existence of a trust, are informed by the facts and circumstances of which the trustee ought reasonably to have known at the material time.[32] In considering what was required in a given case, therefore, a reviewing court should be careful not to ask, in hindsight, what could ideally have been done to inform potential beneficiaries of the trust.  Rather, the proper inquiry is into what steps, in the particular circumstances of the case — including the trust terms, the identity of the trustee and of the beneficiaries, the size of the class of potential beneficiaries and pertinent industrial practices — an honest and reasonably skillful and prudent trustee would have taken in order to notify potential beneficiaries of the existence of the trust. But, where a trustee can reasonably assume that the beneficiaries knew of the trust’s existence, or where practical exigencies would make notification entirely impractical,[33] few, if any, steps may be required by a trustee.

In this case, Justice Brown found that Bird could have reasonably discharged its duties by posting notice of the bond on its information board and that some method of notice was required of the company to notify beneficiaries like Valard with a caveat.  The caveat being that, in some circumstances, nothing could be required to discharge this duty where industry practice and knowledge would render notice unnecessary.

Interestingly, what was or was not industry practice in this case was the question that divided the Court.  For Justice Karakatsanis‘ dissenting opinion, she would have dismissed the appeal because Bird was not under an obligation to inform Valard beyond responding accurately when asked because this type of bond was common in this industry in her view.

Thanks for reading!

Doreen So

20 Feb

New SCC Decision on Duty to Disclose Trust to Beneficiaries

Doreen So Continuing Legal Education, Estate & Trust, Executors and Trustees, Passing of Accounts, Trustees, Uncategorized Tags: , , , , , 0 Comments

The Supreme Court of Canada released a decision last Thursday that is a must read for estates and trusts practitioners.  Interestingly enough, Valard Construction Ltd. v. Bird Construction Co., 2018 SCC 8, arose from a commercial matter.

Bird was a general contractor for a construction project.  When Bird subcontracted with Langford, Langford was required to obtain a labour and material payment bond which named Bird as trustee of the bond.  If Langford was delinquent in paying its contractors, the bond would permit the contractor to sue and recover from Langford’s surety on the condition that notice of the claim must be made within 120 days of the last date in which work was provided to Langford.  Langford became insolvent and some of Valard’s invoices went unpaid.  Unfortunately, Valard was not notified of the existence of the bond and did not inquire about whether there was a bond in place until after the 120 day notice period.  The surety denied Valard’s claim and Valard sued Bird for breach of trust.  This matter was dismissed at first instance by the Alberta Queen’s Bench, dismissed again by the Alberta Court of Appeal, and finally reversed by the Supreme Court of Canada (with a dissent from Justice Karakatsanis).

Justice Brown for the majority (per McLachlin C.J., as she then was, Abella, Moldaver and Rowe J.J.) found that Bird had a fiduciary duty to disclose the terms of the trust, i.e. the bond, to Valard notwithstanding the fact that the express terms of the bond did not stipulate this requirement.  Justice Brown was clear that “While the ‘main source’ of a trustee’s duties is the trust instrument, the ‘general law’ which sets out a trustee’s duties, rights and obligations continues to govern where the trust instrument is silent” (para.15).  Justice Brown then went on to say that a beneficiary’s right to enforce the terms of the trust is precisely what keeps the trustee from holding the “beneficial as well as legal ownership of the trust property” (para. 18).  Otherwise, no one would have an interest in giving effect to the trust.

With this logic in mind, Justice Brown developed the following framework at paragraph 19,

“In general, wherever “it could be said to be to the unreasonable disadvantage of the beneficiary not to be informed” of the trust’s existence,[17] the trustee’s fiduciary duty includes an obligation to disclose the existence of the trust. Whether a particular disadvantage is unreasonable must be considered in light of the nature and terms of the trust and the social or business environment in which it operates,[18] and in light of the beneficiary’s entitlement thereunder. For example, where the enforcement of the trust requires that the beneficiary receive notice of the trust’s existence, and the beneficiary would not otherwise have such knowledge, a duty to disclose will arise.[19] On the other hand, “where the interest of the beneficiary is remote in the sense that vesting is most unlikely, or the opportunity for the power or discretion to be exercised is equally unlikely”,[20] it would be rare to find that the beneficiary could be said to suffer unreasonable disadvantage if uninformed of the trust’s existence.”

Thanks for reading and more to follow later this week on Valard Construction Ltd. v. Bird Construction Co.

Doreen So

23 Jan

Podcast #538 – Supreme Court of Canada: Cowper-Smith v Morgan

76admin Hull on Estate and Succession Planning, Hull on Estates, News & Events, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, Uncategorized Tags: , , , , , , 0 Comments

Today on Hull on Estates, Noah Weisberg and Rebecca Rauws discuss the recent decision of the Supreme Court of Canada in Cowper-Smith v Morgan , 2017 SCC 61, and the expanded scope of the doctrine of proprietary estoppel.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Noah Weisberg.

Click here for more information on Rebecca Rauws.

28 Nov

Supreme Court Advocacy

David M Smith Continuing Legal Education, Estate & Trust, Estate Planning, General Interest, Litigation, Wills Tags: , , , , , 0 Comments

I was able to attend a recent CPD program by the Advocate’s Society titled “Supreme Court of Canada Advocacy.”

A powerful keynote address was presented by the Honourable Madam Justice Suzanne Côté of the Supreme Court of Canada. Justice Côté’s remarks included an inside look at what lies behind the Supreme Court of Canada’s “big mahogany doors,” as she so eloquently phrased it. The Honourable Marshall Rothstein, Q.C., then spoke about the unwritten rules to getting leave to appeal.

Debate was had over the need for a script. Most panelists supported coming prepared with a script but cautioned against being married to it. When it comes to answering questions, advocates should see this as an opportunity to get off their script and engage in a dialogue with the bench. As Justice Côté points out, an oral argument is not supposed to be a monolog.

After discussion on the power of oral advocacy, the discussion shifted to the importance of the written argument. Although the factum is a critical component of any appeal, parties are under no obligation to reach the maximum page length. It was suggested that some of the most successful arguments can be made in 25 pages or less.

In addition to the factum, the Condensed Book can be a vital tool for advocates appearing before the Supreme Court. Under the Supreme Court rules, the Condensed Book may contain a two page outline of the oral argument. Preparing the this two page outlines forces advocates to truly narrow down their key points.

The panelists also spoke about the important role interveners can have in a case. Within the confines of a 10 page factum, and 5 minutes of oral argument, an intervenor can illustrate why a matter is of public interest, and provide supplemental answers to questions posed to the parties by the Justices. Interveners can play a critical role, and should not be overlooked.

Finally, the panel highlighted the power of a moot. Practice moots are one of the most valuable tools an advocate can use to prepare their case. The Supreme Court Advocacy Institute offers moot sessions where participants have the opportunity to moot their case before a panel of experienced litigators and retired justices.

Thanks for reading,

David Morgan Smith

14 Aug

Qualifying Expert Witnesses: Bruff-Murphy v. Gunawardena

Doreen So Uncategorized Tags: , , , , , , , 0 Comments

The Court of Appeal recently released a decision on the role of expert witnesses and the role of the trial judge as gatekeepers of such evidence.

OLYMPUS DIGITAL CAMERA

In Bruff-Murphy v. Gunawardena, 2017 ONCA 502, the Court of Appeal considered an appeal from a car accident case. Bruff-Murphy, the appellant, claimed that she suffered physical and mental injuries as a result of a car accident caused by Gunawardena. Gunawardena admitted liability and a 23-day jury trial occurred to determine Bruff-Murphy’s damages. At trial, the jury awarded Bruff-Murphy $23,500.00 in general damages. On appeal, Justices Lauwers, Hourigan, and Benotto overturned the trial decision and ordered a new trial because “the defence proffered the evidence of a wholly unsuitable expert witness” (para. 72).

The expert at issue was a psychiatrist and he was the last witness in the defence’s case. In particular, his expert opinion was that the plaintiff did not develop any psychiatric disorders or limitations as a result of the accident. However, the methodology of his process and the tone of his expert report were found by the Court of Appeal to be more prejudicial than probative. The Court of Appeal was highly critical of how unfair it was for this expert to focus on the inconsistencies between the information that he received from the plaintiff though an interview and the information that he later discovered from reviewing the plaintiff’s medical records without putting these inconsistencies to the plaintiff and giving her the opportunity to explain. The overall tone of the expert report, where the expert went out of his way to make damaging comments to the plaintiff’s case, was also found to be reliable indicator of the expert’s testimony.

While the Court of Appeal appreciated that the trial judge correctly turned his mind to the four traditional criteria for the admissibility of expert evidence as established in R. v. Mohan, the trial judge was found to have erred for failing to weigh the prejudicial effect of this expert’s evidence against it’s probative value as the final step during the qualification stage.

To quote Justice Hourigan at paragraphs 35 and 36 of this decision, the test during the qualification stage is as follows,

[35]      The first component requires the court to consider the four traditional “threshold requirements” for the admissibility of the evidence established in R. v. Mohan1994 CanLII 80 (SCC), [1994] 2 SCR 9: (i) relevance; (ii) necessity in assisting the trier of fact; (iii) absence of an exclusionary rule; and (iv) the need for the expert to be properly qualified.

[36]      The second component is a “discretionary gatekeeping step” where “the judge balances the potential risks and benefits of admitting the evidence in order to decide whether the potential benefits justify the risks”: para. 24. It is a cost-benefit analysis under which the court must determine whether the expert evidence should be admitted because its probative value outweighs its prejudicial effect.

For those who are interested in the topic of admissibility of expert evidence, click here for the Supreme Court of Canada decision in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23.

Thanks for reading and stayed tuned for my blog later this week on the trial judge’s gatekeeper role after the qualification stage.

Doreen So

 

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET