Critchley v. Critchley, (2006) 246 N.S.R.(2d) 76 (SC)

• Judge: Warner, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: July 07, 2006
• Jurisdiction: Nova Scotia
• Citations: (2006), 246 N.S.R.(2d) 76 (SC);2006 NSSC 219

Critchley v. Critchley (2006), 246 N.S.R.(2d) 76 (SC);

    780 A.P.R. 76

MLB headnote and full text

Temp. Cite: [2006] N.S.R.(2d) TBEd. JL.030

Winnifred Harriet Critchley (applicant) v. Beryl Elizabeth Critchley and John Grave Critchley (respondents)

(S.H. No. 263007; 2006 NSSC 219)

Indexed As: Critchley v. Critchley

Nova Scotia Supreme Court

Warner, J.

July 7, 2006.

Summary:

A testator died in 1986, survived by his second wife and his three children from his first marriage. A large investment account was held in trust, with his wife, daughter and son as trustees. Income and capital were to be used to maintain the wife during her life, with the balance divided amongst his children on her death. In 1996, the daughter was removed as trustee. The son directed the investment of the account, which was heavily weighted in the technology sector and suffered a big loss in 2000. In 2006, the daughter applied under the Trustee Act to have the wife and son removed as trustees. The wife wished removal. The son opposed removal.

The Nova Scotia Supreme Court dismissed the application.

Trusts - Topic 5987

The trustee - Removal - Grounds - A testator died in 1986, survived by his second wife and three children from his first marriage - A large investment account was held in trust, with the wife, daughter and son as trustees - Income and capital were to be used to maintain the wife during her life, with the balance upon her death to the children - The daughter was removed as trustee in 1996 - In 2006, the daughter applied under the Trustee Act to remove the son as trustee - In 2000, the account, weighted heavily in the technology sector, suffered big losses - The daughter alleged that the son acted dishonestly, deceived her in making investments, failed to provide a proper accounting, failed to file estate tax returns and failed to invest as a prudent investor - The Nova Scotia Supreme Court dismissed the application - The son acted honestly and in good faith in performing his duties - However, he made two errors in managing the trust - He failed to get proper advice respecting income tax reporting - Further, while the investment objectives of the estate may have been in accordance with the testator's directions and reasonable before 2000, his investments (objectives and risk tolerances) since then were inconsistent with the "prudent investor" rule - However, there was no evidence that either error resulted in financial detriment to the trust - The son was capable of implementing a prudent investment with assistance and advice from an independent investment counsellor - There would be no benefit in changing trustees.

Cases Noticed:

Farna v. Chorny, 1951 CarswellBC 133 (C.A.), refd to. [para. 16].

Trider Estate, Re (1978), 41 N.S.R.(2d) 663; 76 A.P.R. 663; 1978 CarswellNS 76 (Prob. Ct.), refd to. [para. 33].

MacCulloch (Bankrupt), Re (1991), 102 N.S.R.(2d) 147; 279 A.P.R. 147 (Prob. Ct.), refd to. [para. 38].

Winter Estate, Re (2001), 197 N.S.R.(2d) 385; 616 A.P.R. 385; 2001 CarswellNS 379 (S.C.), affd. (2002), 202 N.S.R.(2d) 5; 632 A.P.R. 5; 2002 CarswellNS 66 (C.A.), refd to. [para. 39].

Letterstedt v. Broers (1884), 9 App. Cas. 371 (P.C.), refd to. [para. 40].

Learoyd v. Whitley (1886), 33 Ch.D. 347 (C.A), appealed (1887), L.R. 12 App. Cas. 727 (H.L.), refd to. [para. 55].

Sanford v. Porter (1889), 16 O.A.R. 565 (C.A.), refd to. [para. 75].

Statutes Noticed:

Trustee Act, R.S.N.S. 1989, c. 479, sect. 3A, sect. 3B [para. 46].

Authors and Works Noticed:

Feeney, Thomas G., The Canadian Law of Wills (4th Ed. 2000) (Looseleaf Update), pp. 8.20 to 8.42 [para. 61].

Macdonell, Sheard and Hull, Probate Practice (4th Ed. 1996), pp. 163 [para. 40]; 164 [para. 41].

Waters, Donovan W.M., The Law of Trusts in Canada (3rd Ed. 2005), pp. 843 to 850 [para. 44]; 848 [para. 58]; 919, 920 [para. 48]; 922, 923, 925 [para. 49]; 931 [para. 50]; 950 [para. 51]; 956 [para. 52]; 962 [para. 56].

Counsel:

Peter Bryson, Q.C., for the applicant;

Gregory D. Barro, for the respondents.

This application was heard on June 6-7, 2006, at Halifax, N.S., before Warner, J., of the Nova Scotia Supreme Court, who delivered the following judgment on July 7, 2006.