This release features substantial updates to the case law in Chapter 2: Who Can Claim Relief, Chapter 5: Conduct to Which the Oppression Remedy Applies, Chapter 6: Remedies: General Principles and Practical Applications, Chapter 7: The Oppression Remedy and Other Statutory Remedies and Chapter 8: Litigating an Oppression Claim.
Highlights
Chapter 2: Who Can Claim Relief-§ 2:6. Potential Shareholders- In Shifrin v. LDF Frozen Foods et al., the applicant sought a declaration that he was the beneficial owner of 15% of the outstanding sares of the corporate respondent, LDF Frozen Foods and that the individual respondents held those shares in trust for him. He also sought a declaration that he had standing as a “complainant” under the OBCA. The applicant claimed that there was an agreement that he would invest $100,000 in LDF and work at LDF and, as consideration, receive 15% of the shares of LDF. There was no dispute that the applicant paid the $100,000 and worked at LDF, but there was a dispute as to whether there was an enforceable agreement among the parties with respect to the 15% interest and whether the applicant’s $100,000 investment had been repaid. Justice Dietrich concluded that there was an enforceable agreement among the parties to provide the applicant with 15% of the shares of LDF and that the applicant complied with the terms of the agreement by investing the $100,000, which had not been repaid. Having concluded that the applicant was indeed the beneficial owner of 15% of the shares, Justice Dietrich then found that the applicant was a proper complainant under the oppression remedy and entitled to seek relief in the form of the production of financial records and other relevant documents, stating that “[t]he relief sought by Mr. Shifrin is also consisted with other decisions of the court and others across the country which have found that where a respondent has refused to issue shares and an applicant is contractually entitled to receive those shares a claim under the Oppression Remedy is appropriate”. (Shifrin v. LDF Frozen Foods et al., 2025 CarswellOnt 5372, 2025 ONSC 2095).
Chapter 2: Who Can Claim Relief-§ 2:7. Warrantholders and Other Beneficial Owners-With respect to the distinction between legal and beneficial ownership of shares of a corporation, in Dhaliwal v. Cheema, Kimmel J. was required to determine whether the complainants were beneficial owners of the shares of various transportation companies, notwithstanding that the corporate records reflected that the respondent was the sole shareholder. Justice Kimmel noted that “[c]orporate records play an important role in governance, are subject to a statutory obligation of accuracy, and are presumed to be accurate, absent compelling evidence to the contrary”, but that “[a]n oral agreement and understanding regarding the beneficial share ownership is the type of compelling evidence that can rebut the presumption of share ownership.” Justice Kimmel concluded that the presumption had been rebutted based on her assessment of the complainants’ capital and in-kind contributions at the formation of the business and the respondents’ conduct over the past two decades. Having concluded that the complainants were beneficial owners, she found that their reasonable expectation was to be treated as owners and to continue to participate in management. The failure of the respondent to recognize their status as owners and to exclude them from management was oppressive and unfairly prejudicial their interests. (Dhaliwal v. Cheema, 2025 Carswell Ont 707, 2025 ONSC 382).
This release delivers a comprehensive overhaul of Chapter 8 – rewritten, reorganized, and retitled “Conflicts of Interest by Practice Area”. The revised chapter includes updated commentary, case law and academic literature by practice area.
Highlights:
Conflicts of interest can arise in any area of law but tend to predominate when lawyers represent more than one client. For example, there are some specialized areas of practice where conflicts of interest have become part of the institutional setting. These specialized areas of practice include bankruptcy and insolvency law, family law, insurance, real estate and wills and estates law, where conflicts of interest tend to arise more frequently than other practice areas. This is so because of the duties inherent in the relationships between and among the various parties. But conflicts can arise in any area of practice and there are many variables which give rise to what can be described as “systemic” conflict of interest issues. The first is the nature of the transaction that occurs between the parties. In real estate matters, for example, the parties may use an intermediary, a real estate agent, who has an interest in earning a commission by selling the property, and a bank that will provide a mortgage to the buyer. In some situations, it may be appropriate for one lawyer to act for multiple parties, but since the parties to the transaction may have different motives, conflicts can arise. A conflict of interest can exist even though the interests of the parties initially coincide. There is a myth, largely due to the use of “conflict” in “conflict of interest” that for a conflict of interest to exist there must be an adverse interest at stake or some form of contentious proceedings. The drafting of a separation agreement in a family matter or the preparation of a partnership agreement, particularly if there are several parties involved, can in fact give rise to a conflict of interest. The parties may share the same goals and objectives, but they may in fact disagree, or have divergent interests, in achieving these goals. The basic principles of adequate disclosure and consent remain the same as they do for matters that are contentious. The rules of professional conduct recognize that, in addition to the existence of a real or actual conflict of interest, there may be the appearance of a conflict of interest or the potential for a conflict of interest to occur.
This release contains amendments and updates to the commentary in Chapter 2 (Assets); Chapter 3 (Claims Against the Estate for Debts); Chapter 5 (Bequests and Beneficiaries); Chapter 15 (Resignation, Removal and Appointment of Trustees); and Chapter 17 (Dependants’ Relief Claims and Spousal Property on Death).
Highlights of This Release, Include:
Dependants’ Relief – Moral Obligation to Create Henson Trust – The court was asked to consider whether the testator breached her moral obligation by not putting an adult child’s inheritance into a Henson trust. The testator had three adult children. The testator’s will provided for modest bequests to her two grandchildren, with the remainder of the estate to be divided between each of her three children. The estate was a significant size, each child was to receive more than $ 1.8 million. The plaintiff, one of the testator’s children, was receiving government disability benefits and resided in social housing. It had been determined that the plaintiff was unable to work, and she received disability assistance. Eligibility for housing was based on provincial housing guidelines. She commenced a summary application seeking to vary her mother’s will to add terms that would place her share of the estate in a fully discretionary trust (Henson Trust). The intended impact of the discretionary trust was to ensure that the plaintiff would not lose her entitlement to disability benefits, and therefore her housing. The application to vary the will was dismissed with leave to re-apply. The court found that the only relevant determination was whether the testator, by leaving the plaintiff a direct distribution, failed to make adequate provision for her because she had failed to create the trust. The court stated that the factors in the application giving rise to concern included the size of the plaintiff’s inheritance and that, although disability benefits provided for subsistence level standard of living, evidence regarding the plaintiff’s expenses beyond what was covered through her disability benefits was sparse. The evidence fell short of allowing the court to conclude that the plaintiff would lose her housing if she received her inheritance by way of direct distribution. Overall, the evidence of the plaintiff’s current arrangements was of limited value in determining whether the testator failed to satisfy her moral obligations to provide for the plaintiff’s maintenance. In these circumstances, the court held that it was not possible for it to find that the testator failed to make adequate provision for the plaintiff’s proper maintenance and support. The court went on to note that if the plaintiff’s share of the estate provided her with sufficient funds to meet all of her needs and many of her wants, without resort to publicly funded disability benefits, the provisions of the will may be entirely appropriate: Damgaard v. Damgaard Estate, 2025 BCSC 208, 2025CarswellBC 334 (B.C. S.C.).
Competency of Executor’s – Animosity between Co-Executors – A coexecutor brought an application to “pass over” her brother who had been named in her father’s will as her co-executor of his estate. The grounds for her application was the personal animosity between herself and her brother. She argued that because of this they could not work together to administer the estate. Her brother disagreed and maintained that he was ready and willing to put his personal feelings aside and administer the estate according to his father’s wishes. He stated that he could work with his sister and act impartially. The court dismissed the application, finding it premature to say that the animosity between the parties would necessarily jeopardize the proper and efficient administration of the estate or the welfare of the beneficiaries. At the point at which the application was brought, the parties had not attempted to work together: Parkinson Estate (Re), 2025 BCSC 152, 2025 CarswellBC 212 (B.C.S.C.).
Division of Property – Determination of Ownership of Property – Equitable Presumption of Tenancy in Common – Applicability to Col-operative Housing – A husband and wife owned one share in a corporation and 200 common shares of W Co-operative Housing Inc. The corporation owned title to W, which was a housing co-operative. Title to the co-operative housing units at W were held by way of a share in the corporation, rather than holding title directly. The share certificate set out the registered owners as the husband and wife but there was no indication whether the share was owned as tenants in common or as joint tenants. The wife died in 2021, and the husband died in 2022, but they had lived apart for decades. The wife’s will left the husband her interest in W. The husband’s estate brought a motion for a declaration that it was the sole beneficial and legal owner. The motion was granted. The court found that the husband and wife held their share in the corporation, as well as the common shares in W, jointly. The wife’s share passed to the husband by way of survivorship upon her death. Therefore, the husband’s estate was the sole beneficial and legal owner of the shares. The equitable presumption of tenancy in common did not apply. The definition of “land” in the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 (CLPA), could not be expanded to apply to shares in the co-operative housing unit. Therefore, the common law presumption of joint tenancy applied, the share was jointly owned, and presumptions in s. 14 of the Family Law Act, R.S.O. 1990, c. F.3, applied. The court also found that there was sufficient evidence to rebut the presumption of resulting trust: there was no evidence of any intention to not take the shares as joint tenants, nor that the parties had attempted to sever their interests; the documents did not indicate specific interests; there was no evidence as to the parties’ contributions to the purchase price; the parties were not divorced; and neither equitable presumptions nor the CLPA applied: Gruber v. Glickman Estate et al., 2025 ONSC 258, 2025 CarswellOnt 619 (Ont. S.C.J.).
“The purpose of this Practice Direction is to further the goal of providing timely and meaningful judicial intervention and assistance to families engaged in family disputes. It is to encourage the expeditious scheduling of a triage conference in family proceedings as is required by the Family Case Flow Scheduling Model.
Parties involved in a family proceeding are entitled to participate in a triage conference which provides the opportunity to resolve contentious matters in a timely manner. Timely access to early and meaningful judicial intervention is a cornerstone of the Family Case Flow Scheduling Model. To the extent that timely access is now being compromised by an increasing number of adjournments related to the Triage Screening List, this issue must be addressed.
Triage Screening List Adjournments
King’s Bench Rule (KBR) 70.24(16) requires a party seeking a triage conference to file and serve a Request for Triage Conference (Form 70D.2), a Certificate of Prerequisite Completion (Form 70D.3) and a triage brief on the other party at least fourteen (14) days before the triage screening date.
KBR 70.24(17) states that the responding party must file and serve their Certificate of Prerequisite Completion and triage brief no later than four (4) days before the triage screening date. Where a responding party fails to file and serve their Certificate of Prerequisite Completion and triage brief four days before the triage screening date as is required, the family proceeding is adjourned on the Triage Screening List. There have been cases where a family proceeding has been adjourned repeatedly as a result of the failure of a responding party to file and serve the required documents.
The failure of a responding party to file and serve their triage documents may be the result of the parties wishing to focus on settlement discussions. Regrettably, the failure may also be due to a responding party attempting to delay the scheduling of a triage conference.
Counsel are reminded that in the event of unnecessary delay in setting the date of a triage conference, a moving party should seek an order from an associate judge forthwith. An associate judge will grant the appropriate order and cost award if requested, to ensure that a moving party is able to proceed to triage on a timely basis
Effective February 3, 2026, where a proceeding appears on the Triage Screening List a third time, the required triage documents of the moving and the responding parties must be filed, failing which it will be struck off the List on a without prejudice basis. Only where the Associate Chief Justice has granted an adjournment, which will be granted only in exceptional circumstances, will the proceeding not be struck off the list.
A proceeding that has been struck off may be brought back on the Triage Screening List by filing a new Request for Triage Conference (Form 70D.2) and a requisition with payment of the filing fee.
Scheduling A Triage Conference
The Triage Conference Co-ordinator advises counsel and/or the self-represented party(ies) by email when all applicable prerequisites in a family proceeding have been satisfied. The email sets out the available hearing dates for a triage conference and requests that counsel and/or the self-represented party(ies) confirm their availability by return email no later than 11:00 a.m. on the Tuesday Triage Screening List.
Ms. Angie Tkachuk, Triage Conference Co-ordinator, presides over the Triage Screening List every Tuesday from 9:00 a.m. to 11:00 a.m. She may be contacted by email or by teleconference.
In the event that neither counsel nor the self-represented party(ies) respond to the email from the Triage Conference Co-ordinator, the proceeding will be struck off the Triage Screening List on a without prejudice basis.
The proceeding may be brought back on the Triage Screening List by filing a new Request for Triage Conference (Form 70D.2) and a requisition with payment of the requisite filing fee.
Coming into effect
This Practice Direction comes into effect immediately.”
This release includes updates to Chapter 3 (Solicitor-and-Client Costs), Chapter 4 (Costs of Motions), Chapter 5 (Security for Costs), Chapter 8 (Appeals), Chapter 11 (Costs in the Federal Court), Chapter 14 (Costs in the Family Court and the Small Claims Court) and Chapter 15 (Costs in Construction Actions).
Highlights
Appeals—Appeals from Orders as to Costs—Exceptions—This decision was the second of two motions dealing with the defendant. RB, seeking leave to have the Court of King’s Bench of Manitoba reconsider a decision on costs released May 25, 2023. This litigation began in 2016 pursuant to the oppression remedies in the Corporations Act (Man.). Numerous motions were filed during the litigation dealing with a multitude of issues. The trial proceeded during two separate timeframes and lasted approximately 17 days. The trial judge then set aside two days to hear submissions on costs. The judge made an award of costs on a party-party basis. The judge did not award solicitor and client costs respecting all steps in the proceedings. RB filed a notice of motion seeking, among other things, an order granting a reconsideration of the cost decision on the merits of the case. The judge had to decide if the court should grant leave to re-open the issue of costs and reconsider the costs decision and whether the court grant a stay of the costs decision pending release of the decision from the Court of Appeal. After reviewing the caselaw presented by the parties, and applying those principles to the facts and circumstances to the case, the judge was not satisfied that RB had met the criteria to re-open the issue of costs and to reconsider the cost decision. As the judge noted, this was not a case where new evidence became available subsequent to the costs hearing and that there was a reasonable explanation for the evidence not being filed prior to the hearing. This was also not a case where there was a serious risk of a miscarriage of justice unless a rehearing was granted. Judge concluded that RB failed to meet the criteria required to reopen the cost decision. Campbell et al. v. Brar et al., 2024 A.C.W.S. 5119, 2024 MBKB 149 (Man. K.B.).
Costs in Construction Actions—General—Overview—In this case in the Superior Court of Justice for Ontario, the Associate Justice discharged the claim for lien of the plaintiff pursuant to the old Construction Act (Ont.), section 47 and dismissed the action as the court found that the claim for lien was frivolous, vexatious, and an abuse of process and that the lien claimant had not complied with a previous removal order. The Associate Justice also ordered that the related certificate of action be vacated from title. Costs were awarded to the defendant BP in the amount of $85,000 for the motion and the action and to the defendant JDI in the amount of $45,000 for the motion and the action. After reviewing the chronological history of the matter regarding the registration of the lien and the commencement of the action, the court then addressed the test for liability for costs under the old Construction Act and whether FR was liable for the costs owing by the plaintiffs under that subsection. As noted, the defendants brought their motions pursuant to the old Construction Act section 86(1)(b)(i). The court went on to state, “Given this gatekeeping function, the argument was whether the costs sanction of section 86(1)(b)(i) applies only to cases where the representative has subjective actual knowledge of the baselessness of the claim for lien.” The Associate Justice, after a review of case law, found that liability for costs under section 86(1)(b)(i) required a finding that the representative subjectively knew of the baselessness of the claim for lien when it was registered and perfected. The case law also established that evidence of bad faith or improper purpose qualified the lawyer for a costs order under this subsection. The Associate Justice found that liability for costs under section 86(1)(b)(i) includes recklessness and wilful blindness. The Associate Justice concluded that there was insufficient evidence that FR had actual knowledge of the baselessness of the lien when it was preserved and perfected nor was FR reckless or wilfully blind in that regard. Accordingly, the motions were dismissed in their entirety. 2708320 Ontario Ltd. cob Viceroy Homes v. Jia Development Inc., 2024 ONSC 1608 (Ont. S.C.J.), affirmed 2024 ONSC 6519 (Ont. Div. Ct.).
This release features updates to Appendix B. Quantum Tables and Appendix IF. Issues in Focus.).
Highlights
APPENDIX IF. ISSUES IN FOCUS-Under what circumstances is there a duty of care between students and universities or university professors, and, if one does exist, what is the scope of that duty?-In Bella v. Young, the Supreme Court of Canada succinctly delineated the law of negligence, and illustrated the duty of care that formed the core of tortious liability based on negligence or negligent misrepresentation. However, in Bella, it was not the law of negligence that was noteworthy, because the basic legal principles of negligence were well established and fairly non-controversial. Rather, it was the novel context of the case that was of primary significance: a duty of care arising between a student and university professors, as well as with the university itself. Bella’s recognition of the existence of a duty of care is significant because it expanded the circumstances in which the law of negligence applied, with the imposition of attendant responsibilities and liabilities for damages. While Bella recognized a duty of care between students and universities/professors, the exact scope of that duty remains indeterminate. The judicial perspective on the issue of the existence of a standard of care was reinterpreted in 2010 by the Ontario Court of Appeal in Gauthier c. Saint-Germain, 2010 ONCA 309 (Ont. C.A.), where it held that where “the plaintiff alleges factors that constitute a cause of action based on torts or a breach of contract, while claiming damages, the court has jurisdiction, even if the dispute stems from academic or educational activities of the university in question”. However, even where a court is found to have jurisdiction, a plaintiff must still plead the requisite elements of the cause of action. Regarding a tort action, the Court of Appeal made it clear that a student cannot simply state that a professor was too demanding in their evaluations, or revealed their incompetence.
APPENDIX B. QUANTUM TABLES- Harper v. Mezo, 2024 CarswellBC 1458 – Plaintiff, aged 64, suffered injuries when the driver of the vehicle in which she was a passenger fell asleep and drove off the highway at a speed of 80 km/h, traveling into a ditch and suffering significant damage to the front passenger side. After the collision plaintiff was airlifted to hospital with three spinal fractures, and remained in hospital for 10 days. Plaintiff suffered significant injuries, including a mild traumatic brain injury, three vertebral fractures, injuries to her sternum, soft tissues injuries to her shoulder, neck, and back, an injury to her left abdominal wall, right leg, right knee, and headaches. She had significant back pain, leg pain, arm numbness, shooting pains, and spasms. Pre-existing vertigo and dizziness were aggravated. She suffered anxiety and depression, post-concussion syndrome, cognitive difficulties, sleep difficulties, and chronic pain in her left shoulder, neck, and back. The impact of these injuries on plaintiff’s life was devastating. Defendants failed to establish that plaintiff failed to mitigate her damages. Power (J.A.) J. awarded plaintiff general damages in the amount of $250,000, as well as $517,100 for cost of future care.
This release includes updates to Chapter 2 (Party-and-Party Costs):
Party-and-Party Costs—Liability for Costs—Liability of Successful Party for Costs—In this case before the Ontario Superior Court of Justice the defendant brought a motion to dismiss the plaintiffs’ action for delay for failing to comply with a court ordered timetable and for various breaches of the Rules of Civil Procedure (Ont.). The motion judge denied the defendant’s motion but ordered a new litigation timetable peremptory on the plaintiffs. The court then considered the submissions with respect to costs. Based on all of the circumstances and the applicable law, the motion judge ordered that the plaintiffs pay costs of the motion to the defendants in the amount of $4000 all-inclusive. Pokrajac et al. v. The Corporation of the Town of Essex et al, 2025 ONSC 595 (Ont. S.C.J.).
Party-and-Party Costs—Several Defendants—Third Party Proceedings—This matter in the Ontario Superior Court of Justice involved in a motor vehicle collision. The plaintiff suffered serious injuries. The defendant commenced a third party claim against the parties responsible for winter road maintenance operations for the subject highway. In her costs submissions, the defendant conceded that there was never any issue of contributory negligence in the main action. The only issue in the main action was damages. The entire focus of the defendant’s liability argument was against the Ministry of Transportation for Ontario (“MTO”). The plaintiff and the defendant finally resolved the main action for $210,000 plus prejudgment interest with only costs to be agreed upon or assessed. The MTO refused to accept the settlement was reasonable. It took the position that the defendant would have to prove the damages as against it. The court found it deeply concerning that the MTO would not accept a relatively modest settlement of $210,000 as reasonable given the plaintiff’s evidence of his injuries and lost career. As the court found, the MTO’s position on this issue was entirely unreasonable and would be factored into its cost award. Continuing on the judge said, “The defendant was insured. The insurer is a sophisticated litigant who was instructing its counsel. The insurer knew it was ultimately responsible to the plaintiff for all damages. It had the funds to pay the claim in full yet it decided to make a tactical decision to drag out this litigation, putting undue pressure on an innocent plaintiff, even after the plaintiff had reduced its claim to an amount well within the range of what could have been awarded at trial. In my view, once the plaintiff made his offer in April 2024, the matter should have resolved. Instead, the defendant insisted on contribution from the third party. This forced the plaintiff to prepare for a lengthy trial. While it was open to the defendant to make tactical decisions, it does so at the risk of exposing itself to additional costs.” In the court’s discretion on costs, the judge accepted the plaintiff was entitled to legal fees on a partial indemnity basis. The third party took the position that it was entirely unreason able to bring it into this litigation and was seeking partial indemnity costs. As the third party was successful in its defence of the third-party claim, the third party was entitled to costs. Costs are to “indemnify” parties — either on a partial, substantial, or full indemnity basis. The court cannot assess what it is indemnifying without knowing what is actually being charged to the client. I therefore accept the defendant’s position that I cannot rely upon the amounts set out within the MTO’s Bill of Costs as it does not provide that invaluable piece of information.” Mitten v. Ministry of Transportation, 2025 ONSC 2645 (Ont. S.C.J.).
This release features updates to Chapters 2 (Assault and Battery), 6 (Defamation), 15 (Malicious Prosecution), 16 (Negligence (General)), 19 (Negligence (Special)), 20 (Nuisance), 27 (Developing Torts), 29 (Liability), 29A (Vicarious Liability), and 30 (Damages).
Highlights
Chapter 6—DEFAMATION—6:29 Judicial Proceedings— In Tuharsky v. O’Chiese First Nation, 2025 CarswellAlta 1715, the plaintiff was former general counsel of the defendant First Nation. Defendant engaged in litigation with former lawyers and in course of that litigation, negative comment about the plaintiff made in pleading and hearings; plaintiff sues in defamation. Chambers judge rejects absolute privilege claim of defendant; on appeal, defamation claim dismissed. Once statement made within a step in judicial proceeding there is an absolute privilege regardless of the content of statement or motive behind it. Moreover, it is not relevant whether the statement was false or made with malice; nor is there any exception for statement about a non-party in the proceeding.
Chapter 16—NEGLIGENCE (GENERAL)—16:26 Residual Policy— In Paddy-Cannon v. Canada (Attorney General), 2025 CarswellOnt 8084, plaintiffs were indigenous children placed with non-indigenous family members after being taken into care. Plaintiffs suffered emotional and physical abuse while with family members and sue Canada in negligence as a result of government failing to follow through on plan to return plaintiffs to indigenous family in Saskatchewan. Canada owed the plaintiffs an ad hoc fiduciary duty (required to act in best interest of the children and were a defined group of individuals that were vulnerable to Canada’s control) and had a positive duty of care to the plaintiffs (grounded in fact that Canada had control of the plan for a return. Plan was inter-provincial and Canada’s responsibility indigenous people’s culture and identity). Moreover, harm associated with loss of culture, language and identity was reasonably foreseeable.
Chapter 20—NUISANCE—20:21 Injunctions— In Hill v. Herd, 2025 CarswellBC 1530, homeowner at trial successfully establishes nuisance claim as against adjacent gas station that renovated its business thereby creating light and sound pollution as well as fumes to impact the homeowners’ enjoyment of their property. Despite finding a nuisance, the trial judge refused to is sue an injunction against the gas station; this on the basis that some measures had been taken to lessen the nuisance, the renovations provided for safer delivery and storage of fuel and the gas station was integral to the community; the trial judge instead ordered damages. While the trial judge erred in referring to the injunction sought as a discretionary equitable remedy rather than there being a prima facie basis in successful nuisance claims. The trial judge was justified in declining to issue an injunction based on the facts.
What’s New in This Update: This release contains amendments and updates to the commentary in Chapter 2 (Assets); Chapter 5 (Bequests and Beneficiaries); Chapter 13 (Duty to Keep Records); Chapter 15 (Resignation, Removal and Appointment of Trustees); and Words and Phrases.
Highlights of This Release, Include:
Presumption in Favour of Early Vesting — Ademption — Abatement —Impact on Gifts of Real Estate — The testator died in 1994, he was survived by his wife and their 13 children. In his will, dated February 20, 1989, he gave a life estate to his wife after which two farm properties were to go to two of his sons, Robert and Winfield. These gifts were subject to the sons paying specified amounts ($50,000 and $90,000 respectively), for the properties. The will, testator died in 1994, he was survived by his wife and their 13 children. In his will, dated February 20, 1989, he gave a life estate to his wife after which two farm properties were to go to two of his sons, Robert and Winfield. These gifts were subject to the sons paying specified amounts ($50,000 and $90,000 respectively), for the properties. The will, inter alia, provided that a mortgage to Robert was to be forgiven and the residue of the estate was to be divided among all his children with the exception of Robert. The testator died five years after preparing his will. His wife lived another 24 and a half years. By then, the value of the two farms had “skyrocketed”, dwarfing the specified amounts his sons were required to pay for them and dwarfing the gifts to the testator’s other children. Robert died intestate before his mother, he was survived by his wife Lynn. In 1994, with the consent of all beneficiaries, the estate had assigned the mortgage to the testator’s wife and Robert started paying the mortgage interest to his mother and not to the testator’s estate. In 2018, his mother executed a new will that did not include any gift to Robert’s estate of mortgage forgiveness. She died shortly after. Her death triggered a tax liability which, as of June 2022, was about $462,000 and the CRA had begun enforcement proceedings against the estate. The bulk of this liability arose because of the deemed disposition of the two farms. The estate was unable to pay the amounts it owed from the residue or from the mortgage. In order to meet these obligations, one or both of the farms had to be sold, or money otherwise raised against the value of the farms. The court had to decide several issues. Among these was whether the gift of mortgage forgiveness to Robert failed because the mortgage had been assigned to his mother. The court found that it did. The court noted that all beneficiaries, including Robert, had agreed to the assignment. The trustees had broad power under the will to “sell or otherwise dispose of” the estate’s assets. The phrase “otherwise dispose of”, in the view of the court, was sufficient to include “assign”. Robert and his wife acted on the assignment by making payments to Robert’s mother directly. They continued to benefit from the interest-only aspect of the mortgage. The mother never demanded payment of the mortgage after it matured. The validity of the assignment went unchallenged for 26 years. In these circumstances, the court found that it would be wrong to now hold that the assignment was invalid. The court also had to determine whether Robert needed to have survived his mother for the gift of the farm to him to succeed. In the court’s view the answer to this was no. The court found that the presumption in favour of early vesting was applicable in this case. Noting that this presumption was sometimes referred to as the rule in Browne v. Moody, 1936 CarswellOnt 92, [19361 O.R. 422 (Jud. Corn. of Privy Coun.): Fraser Estate, Re, 1986 CarswellOnt 661, 55 O.R. (2d) 268 (Ont. H.C.); Howes v. Hartley, 1986 CarswellSask 285, [19871 2 W.W.R. 749 (Sask. C.A.), at para. 10; Vea Estate v. Clemson Estate, 2014 BCSC 1970, 2014 CarswellBC 3119 (B.C. S.C.), at para. 25; Bradley Estate, 2023 BCSC 618, 2023 CarswellBC 1001 (B.C. S.C.), at para. 23, the court pointed out that the decision in Browne in fact appears to address the contingency of a residuary beneficiary dying before the life tenant. It noted that although this was obiter, MacMillan L.J. wrote in that decision that, “[a] legatee predeceasing the son without leaving issue would not be affected by the clause and the interest of such a legatee would pass on her death to her representatives.. .This is in accordance with well-settled principles.” The court went on to point out that multiple Canadian cases decided after Browne, did not distinguish it on this basis: Merritt, Re, 1945 CarswellOnt 224, [19451 O.W.N. 470 (Ont. H.C.); Rauckman, Re, 1969 CarswellSask 84, 71 W.W.R. 73 (Sask. Q.B.); Howes v. Hartley; McKeen Estate v. McKeen Estate, 1993 CarswellNB 35, 49 E.T.R. 54 (N.B. Q.B.); Schradi Estate, Re, 2006 CarswellOnt 1765, 24 E.T.R. (3d) 63 (Ont. S.C.J.); and Vea Estate v. Clemson Estate. In each of these cases, a residual legatee died before the life estate ended and it was held that the residual legatee’s estate was entitled to the gift because the residual gift vested upon the testator’s death. The trustee also argued that the gift of the farms to Robert and Winfield were void for uncertainty. The will instructed the trustees to give the first right to purchase the farms at the price of $50,000 and $90,000 respectively and “upon such terms as may be mutually agreed between [them] and my trustees.” The trustee submitted that this phrase left terms and conditions to be determined by a future agreement, and this was unenforceable. The court did not agree. It noted that the trustee had not identified any terms or conditions that might have presented a problem. The key factor—price—had been determined by the will and furthermore, there has been no failure to agree to terms after good faith efforts. To satisfy the outstanding tax liability, it was necessary for the court to then determine how the rules of abatement impacted the gifts. Citing Albert H. Oosterhoff, Oosterhoff on Wills, 9th ed. (Toronto: Thomson Reuters, 2021), at p. 722, the court observed that the common law order of abatement for testamentary gifts was: (1) residuary personalty; (2) residuary real property that is not specifically devised; (3) general legacies, including pecuniary legacies payable from residue; (4) demonstrative legacies; (5) specific bequests and legacies of personalty; and (6) specific devises of real property. The court noted that it had considered whether there was anything in the language of the will that would suggest that the gifts of the farms should not abate rateably (i.e., proportionately, or pro rata) and it could find nothing in the will to support that. Further, the court went on to hold that the trustee had a discretion to sell, mortgage, or otherwise raise funds from the farms or to enter into an arrangement with Robert’s estate or Winfield (or both of them) that allowed them to receive the farms but also allowed the estate to pay all its debts. A motion was brought by Lynn and Winfield for a stay of the court’s order permitting the trustee to sell the farm properties, pending appeal. This was dismissed. See Stewart Estate v. Stewart, 2025 ONCA 575, 2025 CarswellOnt 12228 (Ont. C.A.): Hale v. Stewart, 2025 ONSC 2275, 2025 CarswellOnt 7616 (Out. S.C.J.).
Express Trust —— Real Estate — Declarations of Trust — Purchase Money Resulting Trust — The deceased died intestate. At the time of his death, he owned a condominium. Two weeks prior to purchasing the condomin ium he had signed a declaration of trust declaring that he held the condomin ium in his name on behalf of the Islamic School of Ottawa. This was the prede cessor organization to the respondent, the Arabic and Islamic Education Foundation of Ottawa (“Foundation”). The deed indicated that the property was transferred to the deceased “in trust,” but without any reference to the Founda tion or its predecessor. The court found that although the deceased may have intended to hold the property in trust, the requirements to create an express trust had not been met: the deceased did not own the property when he signed the declaration of trust. Because of this, he was not legally enabled to declare a trust when he signed the declaration. The court cited the Court of Appeal in Ruhner v. Bistricer, 2019 ONCA 733, 2019 CarswellOnt 14766 (Ont. C.A.), at para. 58, additional reasons 2020 ONCA 226, 2020 CarswellOnt 4098 (Ont. C.A.), leave to appeal refused 2020 CarswellOnt 3973, 2020 CarswellOnt 3974 (S.C.C.): “Any type of property can be the subject-matter of a trust, save for ‘future property’, that is, property that the settlor does not yet own”. The respondents had submitted that the deceased, as a layperson, had simply signed the declaration of trust when he was asked to do so by the bank. He would not have known it would be insufficient to create a trust. Moreover, over the years, he had continued to sign and receive documents referring to the property as be ing “in trust”. The respondents stated that, through these documents, he had effectively declared himself to be a trustee. In making this submission they relied on Elliott (Litigation Guardian of) v. Elliott Estate, 2008 CarswellOnt 7448, 45 E.T.R. (3d) 84 (Ont. S.C.J.), at para. 39, where the court held that a trust may be constituted through a declaration of self as trustee and that it is not necessary to use technical or legal terms to do so. It is sufficient that the in dividual or organization demonstrate the intention to become a trustee. The court held, however, that a self-declaration alone was not sufficient to establish an express trust—as was held in Elliott, all of the other requirements of an express trust had to be met. It observed that the important factual distinction between Elliott and the present case was that the matter before it involved land. As a result, the formality requirements in the Statute of Frauds, R.S.O. 1990, c. S.19, were engaged and section 9 required that all declarations of trust in land be proved by a writing signed by the party who is by law enabled to de clare such trust. While the documents referred to by the respondents might be evidence of the deceased’s (undisputed) intention to hold the property in trust, they did not otherwise meet the requirements for establishing an express trust. This was because they did not identify the beneficiary and they provided no certainty that the Foundation or the School was the object of the trust. More over, while many of the documents referred to the property, they did not clearly identify it as the subject of the trust. The respondents’ alternative argument was that there was a resulting trust in favour of the Foundation, based on its financial contributions to the purchase of the property. The court found that there was no evidence, however, that the Foundation contributed to the purchase price of the property. The Foundation had made mortgage payments, but the court found that the payment of the mortgage cannot result in a purchase money resulting trust—the relevant time for the contribution of funds to give rise to a purchase money resulting trust is at the time the property is acquired. The mortgage payments proven in evidence were made years after the property was acquired. Moreover, it was not clear that those payments contributed to the purchase of the property. While the mortgage was in the deceased’s name, the Foundation or its predecessor occupied and had use of the property. The court observed that, therefore, the Foundation’s subsequent mortgage payments might be relevant to other types of claims, but they did not establish a purchase price resulting trust: May v. Alsousi et al., 2025 ONSC 795, 2025 CarswellOnt 2213 (Ont. S.C.J.).
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