Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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Today’s blog is the last in my series this week on the variation of a trust under the Variation of Trusts Act and touches upon the Application material to be brought in respect of the variation.

The Application seeking approval of the variation is usually brought by one or more of the capacitated beneficiaries. The respondents are typically all of the beneficiaries who are not named as the applicant(s) and the trustee (unless the trustee is the, or one of the, Applicant(s)). As a trustee is to act impartially toward the beneficiaries, it may not be appropriate for the trustee to bring the Application depending on the circumstances.
 

The Notice of Application sets out the relief being sought including (the following is not meant to be exhaustive): (i) any representation order required; (ii) Judgment approving the Deed of Arrangement on behalf of the respective interest;(iii) Orders for any ancillary relief that may be necessary; and (iv) costs.

The grounds being relied upon for the relief being sought are also included as are the materials being relied on. 

The supporting affidavit typically includes the relevant facts and verifies the recitals in the Deed of Arrangement. Any pertinent document such as the trust document, the listing of the trust property, and documents from another proceeding from which the variation arose, can, as necessary, be made exhibits to the affidavit.

The draft Judgment typically refers to all of the materials filed with the Court and includes, as necessary, provisions that, among other things, address the appointment of the litigation guardian, the approval of the Deed of Arrangement of behalf of incapacitated beneficiary, any ancillary relief and costs. 

Have a nice weekend. Craig
 

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Today’s blog is a continuation of my blogs this week on the variation of a trust under the Variation of Trusts Act and will focus on the Deed of Arrangement. 

The approach to, and content of, the Deed of Arrangement will most certainly depend on the circumstances involved. The approach to the Deed of Arrangement may be quite different if the variation arises as a result of an ongoing proceeding (and has been negotiated as part of that proceeding conditional on Court approval) than if it does not.
 

A Deed of Arrangement typically names and is signed by all capacitated beneficiaries. These beneficiaries are usually identified and grouped according to their interest in the trust. The trustee is also usually identified and is a signatory of the Deed of Arrangement as the trustee consents to act under the varied trust. Incapacitated beneficiaries are not typically named as parties to the Deed of Arrangement as the Court is approving the variation on their behalf.

A Deed of Arrangement may (depending on the provision and as necessary) also contain (the following are not meant to be exhaustive) (i) recitals which provide background on the trust, the parties, trustee, potential beneficiaries and provisions of the trust including, as necessary, the term in the trust that is being varied, (ii) a paragraph that the Deed of Arrangement is subject to Court approval on behalf of the incapacitated beneficiary(ies), (iii) paragraphs setting out the variation, with the paragraph number of where the paragraph fits into the trust and indicating how the paragraph fits into the trust, (iv) paragraphs addressing, if applicable, any action that is required as part of the variation, (v) a paragraph allowing for the Deed of Arrangement to be signed in counterpart if there are numerous parties, (vi) a paragraph addressing the payment of the costs of the preparation of the Deed of Arrangement and the Application, and (vii) a paragraph addressing the legal advice obtained.

Thanks for reading, Craig
 

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In yesterday’s blog on the procedure typically involved with a variation of a trust proceeding under the Variation of Trusts Act, I mentioned that today I would touch upon the need to appoint a litigation guardian for a minor, unascertained, unborn and/or for an incapable party in such a proceeding. 

Rule 7 of the Rules of Civil Procedure regulates the bringing of proceedings by or against parties under disability.  As set out in the commentary to the Rule, “its central requirement is that persons under disability must be represented by a litigation guardian…Rule 7.02 creates a presumptive right for a mentally incapable person’s guardian or attorney under power of attorney to act as litigation guardian, so long as the guardian or attorney has the authority to act by the terms of his or her appointment as guardian or attorney.”  

However, a litigation guardian for such a defendant or respondent must be appointed by the Court.  The procedure for same is set out in Rule 7.03.  Unless there is some other proper person willing to act as litigation guardian, the Court is to appoint the Children’s Lawyer or the Public Guardian and Trustee as applicable.

Rule 7.03(2), specifically requires, however, that where a proceeding (ie. a variation of trust) is against a minor in respect of the minor’s interest in an estate or trust, the Children’s Lawyer shall act as the litigation guardian of the minor respondent, unless the Court orders otherwise.

It may also be that a representation order, pursuant to Rule 10 of the Rules of Civil Procedure, is required to have a person appointed to represent persons who are unborn or unascertained and have an interest in the trust.

Although Rule 10 does not refer specifically to the Children’s Lawyer, the Courts have traditionally appointed the Children’s Lawyer to represent this class of beneficiaries.

If there is more than one group of incapacitated beneficiaries requiring representation by the Children’s Lawyer, the Public Guardian and Trustee will often represent one group if there is a conflict of interest.

Thanks for reading.  Craig

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I hope everyone had a nice Thanksgiving weekend.

In a recent blog of mine (“To vary a Trust or not to vary a Trust: Does a Statute have the Answer?”), I touched upon the Variation of Trusts Act (R.S.O. 1990, c. V.1) as the authority to vary a trust.In today’s blog and several more this week, I will comment on the procedure and documents typically involved with a variation of trust.

Having decided that a variation is necessary, the trust document should be carefully reviewed to ensure that all terms of the trust are properly understood, and to identify all of the persons having an interest or potential interest (actual and potential beneficiaries) in the trust, to consider those that need to sign the proposed arrangement (which sets out the variation proposed), to consider who will require representation before the Court and those that will be affected by the variation.

The procedure for such a variation consists of the preparation of and signature of a Deed of Arrangement (or agreement setting out the variation that the Court is requested to approve), and an Application to the Ontario Superior Court of Justice (to be heard before a single Judge) seeking a Judgment approving the Deed of Arrangement on behalf of the minor, unborn, unascertained, incapable or contingent beneficiary.

The Application materials, in turn, consist of a Notice of Application and affidavit material supporting the variation. A factum will also be required unless leave is sought further to Rule 38.09(4) of the Rules of Civil Procedure dispensing with the necessity of the factum. A draft Judgment should also be submitted when the materials are served and filed.

A Consent to the Application signed by all of the capacitated beneficiaries is best included as part of the Application material.   A letter/document from the Children’s Lawyer/Public Guardian and Trustee indicating their position (ie. that they do not object on behalf of their respective interest) is also typically a part of the Application materials, unless the Children’s Lawyer/Public Guardian and Trustee are attending in Court at the Application before the Judge.

In tomorrow’s blog, I will take a look at the appointment of the litigation guardian for the minor, unborn, unascertained or incapable beneficiary of the trust for the purposes of a variation of trust.

Thanks for reading. Craig

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In Cummings v. Cummings, the Court of Appeal affirmed the decision made by the application judge at first instance.

In coming to this conclusion, the Court of Appeal was strongly influenced by the concepts set out in the decision of the Supreme Court of Canada in Tataryn v. Tataryn Estate ([1994] 2 S.C.R. 807 (S.C.C.)).

The decision in the Tataryn case held that moral considerations were applicable to a determination as to the amount of a dependant's support award in the context of the British Columbia statute (The Wills Variation Act, R.S.B.C. 1979, c. 435).

Until the Cummings v. Cummings decision, the approach to quantifying dependant's relief claims in Ontario was to essentially ignore the Tataryn moral considerations approach. This was as a result of the fact that the Tataryn decision was an appeal from the British Columbia Court of Appeal and was in respect to section 2(1) of the Wills Variation Act, which included substantially different wording than that of the SLRA. The Wills Variation Act assists dependants where there is a will which does not "in the Court's opinion, make adequate provision for the proper maintenance and support of the testator's wife, husband or children".

It is this language that has allowed the British Columbia Courts to approach the whole question of quantifying dependant's relief on a very different basis and on a moral conviction approach. The language in the Wills Variation Act is broadly drafted and essentially allows the Court to do what it thinks is adequate, just and equitable in the circumstances.

With the Cummings v. Cummings decision essentially embracing the decision of Tataryn, a very different approach must be considered in respect of quantifying dependant's relief claims in Ontario.

We hope this case gives you an idea of the application of the basics legal definitions and terms.

All the best, Suzana and Ian. --------