Is Friendship a bar to Trusteeship?

In a recent BC Supreme Court case, Re Newton Trust, 2013 BCSC 799, the court addressed the issue of appointing a third trustee to fill a vacancy left by the death of a former trustee (Mr. Mayson), where the two remaining trustees disagreed as to who should fill the vacancy. One of the remaining trustees (Ms. Cohen) sought to have Mr. Woodward appointed as trustee; however, the other remaining trustee (Mr. MacKenzie) sought to have a judicial trustee appointed. He argued that Mr. Woodward lacked independence due to his friendship with Ms. Cohen. Mr. MacKenzie alleged that Ms. Cohen had demonstrated a strong will and effort to control the trust, requiring that the new trustee be completely independent of her.

Based on the following three factors from the English Court of Appeal decision, In Re Tempest, (1866) 1 Ch. App. 485, the court found that Mr. Woodward was an appropriate trustee:

1)      The wishes of the author of the trust, expressed in or deduced from the trust instrument;

2)      The wishes of the beneficiaries, as held above all other interests; and

3)      The question of whether the appointment will promote or impede the execution of the trust.

Mr. Woodward was an appropriate trustee under the factors in Tempest because the trust allowed, and even promoted, the trustee to have a relationship with the beneficiaries, of which Ms. Cohen was one, and provided broad discretionary powers to the trustee.  Furthermore, the beneficiaries promoted Mr. Woodward as trustee and there was no evidence adduced that the execution of the trust would be impeded if Mr. Woodward was a trustee.

Despite the lack of evidence that the execution of the trust would be impeded by Mr. Woodward, the court still had to address whether Mr. Woodward’s friendship with Ms. Cohen barred him from being a trustee. The court concluded that friendship with a trustee or beneficiary does not impugn the independence of a trustee due to the presumption of good faith.  Mr. MacKenzie failed to provide cogent evidence to rebut the presumption of Mr. Woodward’s good faith.  Furthermore, Mr. MacKenzie failed to show that Ms. Cohen had tried to control the trust, as his evidence was rejected as insufficient to reach such a conclusion.  Due to these failures, Mr. MacKenzie did not demonstrate that friendship between Mr. Woodward and Ms. Cohen disqualified Mr. Woodward from being a trustee.

This case reminds us that a trustee does not have to be completely independent of other trustees or beneficiaries, as long as the trust instrument and the beneficiaries allow a relationship to exist, and the relationship will not impede the execution of the trust.  The court will give weight to the presumption of good faith, and it will not be rebutted based solely on a friendship between a trustee and his or her fellow trustees or the beneficiaries.

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Can you challenge a Will based on a broken promise?

Sabey v. Beardsley, a recent decision from the BC Supreme Court, involved a dispute as to the rightful owner of a farm property located in Langley. The dispute arose because the Will of the deceased (Kim von Hopffgarten) provided that the property would go to one person (Burgi Rommel) but the farm had been promised to another person (Jesse Sabey), who lived and worked on the farm. The farm had previously been owned jointly by Kim and her husband Dietrich, who died in 2006.

Jesse began visiting the farm as a teenager and took dressage horseback riding lessons from Kim and Dietrich. Jesse was very close to the couple and eventually moved to the farm as a working student to assist with the horses and the maintenance of the farm. At the same time, he studied accounting in Bellingham and commuted back and forth between the farm in Canada and his school in the United States. Although Jesse did receive free boarding and some free groceries and dressage lessons, he was paid less than other students who worked on the farm.

Jesse challenged the will and his primary argument was based on the equitable principal of proprietary estoppel. In basic terms, a claim for proprietary estoppel can be made where three requirements are met: (1) one person makes a representation or promise to another; (2) the second person reasonably relies on the representation or promise; and (3) in relying on the promise or representation, the second person suffers some sort of detriment.

The court ultimately agreed that Jesse’s claim for proprietary estoppel was made out and that he was entitled to the farm. The court accepted Jesse’s evidence that he had been assured by Dietrich and Kim that the farm would one day belong to him. Jessie’s evidence was also supported by the fact that Kim had attempted to prepare a codicil to her will to change the gift of the farm from Burgi to Jesse, but the codicil was not properly executed and was therefore invalid. The court also found that Jesse relied on the statements made by Dietrich and Kim to his detriment since he organized his career choices and personal life around the farm in order to maximize his time available to work on the farm on the assumption that he would own the farm in the future.

This case is a reminder of how powerful a claim in proprietary estoppel can be, since a successfully established claim allows a court to ignore the provisions of the deceased’s Will. It is also interesting to note that if this case was decided under the Wills Estates and Succession Act (WESA), which is due to come into force on March 31st, 2014, it may have been possible for the court to give effect to the codicil. Under WESA, courts will have expanded powers to cure deficiencies in a will or codicil that was not executed in accordance with the technical requirements of the legislation.

Resolving Unexpected Death and the Role of the Coroner’s Office

A sudden and unexpected death of a loved one is undoubtedly one of the most painful and distressful events of a person’s life. The surviving family may have a desperate need for answers as to how, when and why their loved ones died. Who can they turn to for answers?

In British Columbia, the office of the Coroners Service is responsible for the investigation of all unnatural, sudden and unexpected, unexplained or unattended deaths.  Once the death is reported to the Coroners Service, the Coroner begins a preliminary investigation. The preliminary investigation may lead to one of the following:

1.      Natural death. If the Coroner’s preliminary investigation reveals the death is a natural event, the Coroner will consult the deceased’s family doctor to ensure the nature of the death is consistent with the deceased’s medical history. Once confirmed that the death is natural, the family doctor completes the Medical Certificate of Death.

2.      Further Coroner’s investigation. The Coroner has the authority to conduct a full investigation, including collecting information, conducting interviews, inspecting and seizing documents, and ordering an autopsy. The result of Coroner’s investigation is released in a report, which may not be automatically sent to the family. However, the report is a public document, and is available by request from the Regional Coroner’s office.  

3.      Coroner’s Inquest. The Coroner may determine that it would be beneficial to hold a Coroner’s Inquest, which is a formal court proceeding held to publicly review the circumstances of a death. Normally, an inquest is held to assist in finding information about the deceased or circumstances around a death, to address community concern about a death or to draw attention to a cause of death if such awareness can prevent future deaths. Upon the conclusion of the Inquest, a written report is prepared.

Please note that the Coroner does not assign fault or liability, but conducts a fact-finding investigation into deaths that are unnatural, unexpected, unexplained or unattended. One of the most important purposes of a Coroner’s investigation is to identify risk factors to prevent future deaths.  As such, a written Coroner’s report includes, whenever possible, recommendations to prevent further deaths.

It was recently reported that BC has the lowest autopsy rate in Canada, raising concern amongst some experts that too many deaths in the province, and even possible homicides, are inadequately investigated. The funding cutbacks to the Coroners Service may have contributed to the concern. The Coroner obviously has some discretion in determining whether a full investigation is required for a particular case. With funding pressures, that discretion may be exercised more conservatively. As such, it is essential that family members be proactive and ensure that if a full investigation is warranted that their concerns be brought to the attention of the Coroner’s office.