Bethel Estate, Re, 2015 NSSC 216

• Judge: Pickup, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: January 12, 2015
• Jurisdiction: Nova Scotia
• Citations: 2015 NSSC 216;(2015), 363 N.S.R.(2d) 251 (SC)

Bethel Estate, Re (2015), 363 N.S.R.(2d) 251 (SC);

    1143 A.P.R. 251

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. JL.046

The remainder beneficiaries of the trusts established under the Last Will of Harold F. Bethel, namely the Rotary Club of Truro Charitable Trust; Acadia University; St. Andrew's United Church, Truro; Pine Hill Divinity Hall; and the Governing Council of the Salvation Army, Canada (applicants) v. The Bank of Nova Scotia Trust Company, trustee of the Last Will of Harold F. Bethel (respondent) and The Attorney General of Nova Scotia, representing her Majesty the Queen in right of the Province of Nova Scotia (respondent)

(Truro No. 430703; 2015 NSSC 216)

Indexed As: Bethel Estate, Re

Nova Scotia Supreme Court

Pickup, J.

July 24, 2015.

Summary:

The applicants were five charitable trusts that were the remaining beneficiaries of the testator's 1976 will. Under the will, each of the applicants received $5,000 annually until the trust property was exhausted. At the end of 2013, the estate's assets exceeded $2 million. The funds were unlikely ever to be exhausted. The applicants sought an order under s. 3 of the Variation of Trusts Act to wind up the five trusts and distribute the balance between them.

The Nova Scotia Supreme Court allowed the application.

Trusts - Topic 8007

Variation of trusts - General - Jurisdiction - [See first Trusts - Topic 8028 ].

Trusts - Topic 8028

Variation of trusts - Trusts which may be varied - Charitable trust - The applicants were five charitable trusts that were the remaining beneficiaries of the testator's 1976 will - Under the will, each of the applicants received $5,000 annually until the trust property was exhausted - At the end of 2013, the estate's assets exceeded $2 million - The funds were unlikely ever to be exhausted - The applicants sought an order under s. 3 of the Variation of Trusts Act to wind up the five trusts and distribute the balance between them - The trustee asserted that s. 3 did not apply to charitable trusts - The Nova Scotia Supreme Court, in allowing the application, rejected the trustee's position - While the previous version of the Act permitted variation of a trust on behalf of "any person", the current version contemplated variation with the consent of or on the behalf of a "beneficiary" - This was a much broader category - As a matter of plain language, "beneficiary" could include a non-person, such as an unincorporated association - Further, s. 3(1) permitted the application to be made by a person without any of the pre-amendment qualification of that term - The charitable trust beneficiaries fell within the Act - See paragraphs 27 to 39.

Trusts - Topic 8028

Variation of trusts - Trusts which may be varied - Charitable trust - The applicants were five charitable trusts that were the remaining beneficiaries of the testator's 1976 will - Under the will, each of the applicants received $5,000 annually until the trust property was exhausted - At the end of 2013, the estate's assets exceeded $2 million - The funds were unlikely ever to be exhausted - The applicants sought an order under s. 3 of the Variation of Trusts Act to wind up the five trusts and distribute the balance between them - The trustee asserted that the applicants did not have a fully vested or contingent interest in the capital of the trust's income as required under s. 3(2) of the Act - The Nova Scotia Supreme Court, in allowing the application, rejected the trustee's position - The trusts were not limited to gifts in perpetuity - They contemplated encroachment on capital - The language used to confer the trusts contemplated their eventual exhaustion - There was no contingency left for which the beneficiaries had to wait - The interests were vested - See paragraphs 40 to 50.

Trusts - Topic 8056

Variation of trusts - Grounds for variation - Changed circumstances - The applicants were five charitable trusts that were the remaining beneficiaries of the testator's 1976 will - Under the will, each of the applicants received $5,000 annually until the trust property was exhausted - At the end of 2013, the estate's assets exceeded $2 million - The funds were unlikely ever to be exhausted - The applicants sought an order under s. 3 of the Variation of Trusts Act to wind up the five trusts and distribute the balance between them - The Nova Scotia Supreme Court allowed the application - While the application was a significant departure from the testator's intentions, that was not a strong argument against the variation - The testator intended to provide relatively significant funds to the beneficiaries - That was not practically possible under the terms as they existed - The testator also intended that the funds would eventually be exhausted - See paragraphs 51 to 58.

Wills - Topic 8060

Construction - Conditional gifts - Vesting - Generally - Contingent v. absolute gifts - [See second Trusts - Topic 8028 ].

Words and Phrases

Beneficiary - The Nova Scotia Supreme Court considered the meaning of the word "beneficiary" as used in the Variation of Trusts Act, R.S.N.S. 1989, c. 486 - See paragraphs 27 to 39.

Cases Noticed:

Bell, Re (1980), 7 E.T.R. 129; 1980 CarswellOnt 529 (C.J.), refd to. [para. 30].

Halifax School for the Blind v. Kelley Estate, [1937] S.C.R. 196, refd to. [para. 46].

Statutes Noticed:

Variation of Trusts Act, R.S.N.S. 1989, c. 486, sect. 3(1), sect. 3(2), sect. 3(5) [para. 18].

Authors and Works Noticed:

McLean, A.J., Variation of Trusts in England and Canada (1965), 43 Can. Bar Rev. 181, generally [para. 30].

Counsel:

Dennis James, Q.C., and Alayna Kolodziechuk, for the applicants;

Richard Niedermayer and Elizabeth Brachaniec (articled clerk), for the respondent, the Bank of Nova Scotia Trust Company.

This application was heard at Truro, N.S., on January 12, 2015, by Van den Eynden, J., of the Nova Scotia Supreme Court, and on June 10, 2015, by Pickup, J., of the Nova Scotia Supreme Court. On July 24, 2015, Pickup, J., delivered the following decision for the court.