Leonard Foundation Trust, Re, (1990) 37 O.A.C. 191 (CA)

• Court: Court of Appeal (Ontario)
• Case Date: April 24, 1990
• Jurisdiction: Ontario
• Citations: (1990), 37 O.A.C. 191 (CA)

Leonard Fdn. Trust, Re (1990), 37 O.A.C. 191 (CA)

MLB headnote and full text

In The Matter Of the Leonard Foundation Trust Application under section 60 of the Trustee Act, R.S.O. 1980, c. 512.

Canada Trust Company, Trustee under an Indenture made the 28th day of December, 1923 establishing the Leonard Foundation (applicant/respondent in appeal) v. Ontario Human Rights Commission (respondent/appellant in appeal) and Royal Ontario Museum, Class of Persons Eligible to Receive Scholarships from the Leonard Foundation, and the Public Trustee (intervenors)

(Nos. 586/87; 622/87)

Indexed As: Leonard Foundation Trust, Re

Ontario Court of Appeal

Robins and Tarnopolsky, JJ.A., and Osler, J.(ad hoc)

April 24, 1990.

Summary:

In 1923 a settlor created the Leonard Foundation Trust to provide educational scholarships. The trust was based on the belief that Christians of the white race were best qualified to be entrusted with the development of civilization. Scholarship eligibility was restricted to white Christians of British nationality or parentage who did not owe allegiance to any foreign government, Prince, Pope etc. Similar restrictions were placed on universities, schools and colleges in which the scholarships could be granted. Issues arose respecting (1) whether the provisions of the trust contravened the Ontario Human Rights Code or public policy, and (2) if the answer to that question was yes, could the doctrine of cy-pres be applied to save the trust.

The Ontario High Court of Justice, per McKeown, J., in a decision reported 61 O.R.(2d) 75, held that the provisions of the trust did not violate either the Human Rights Code (Ont.) or public policy. The Ontario Human Rights Commission appealed.

The Ontario Court of Appeal allowed the appeal. The court held that the trust, based on racism and religious supremacy, was contrary to contemporary public policy. The court held however that the trust should not fail, but rather it was appropriate and reasonable that the court apply the cy-pres doctrine and invoke its inherent jurisdiction to change the terms of the trust to bring it into accord with public policy.

Administrative Law - Topic 9052

Boards and tribunals - Jurisdiction - Provincial human rights commissions - [See Trusts - Topic 4563].

Trusts - Topic 1190

Charitable trusts - Failure of - Cy-pres doctrine - Where trust contrary to public policy - In 1923 a settlor established a scholarship trust fund, based on the belief that Christians of the white race were best qualified to be entrusted with the development of civilization - Scholarship eligibility was restricted to white Christians of British nationality or parentage and who did not owe allegiance to any foreign government, Prince, Pope etc. - In 1990, the Ontario Court of Appeal held that the trust was contrary to public policy, but applied the cy-pres doctrine and changed the trust to bring it into accord with public policy.

Trusts - Topic 4563

Administration - Directions from court - Jurisdiction - In 1923 a settlor established a trust based on the belief that Christians of the white race were best qualified to be entrusted with the development of civilization - Scholarship eligibility was restricted by race, religion, nationality etc. - In 1990 directions were sought from the court respecting whether the trust provisions contravened the Human Rights Code or public policy - The Ontario Court of Appeal held that the Ontario High Court of Justice (a superior court), as opposed to the Ontario Human Rights Commission, had jurisdiction in this matter - See paragraphs 8, 64 to 68.

Trusts - Topic 8055

Variation of trusts - Grounds - Public policy - [See Trusts - Topic 1190].

Cases Noticed:

In re Millar, [1938] S.C.R. 1, refd to. [paras. 34, 80].

Blathwayt v. Cawley, [1976] A.C. 397 (H.L.), refd to. [para. 35].

National Anti-Vivisection Society v. Inland Revenue Commissioners, [1948] A.C. 31, refd to. [para. 44].

Power v. Attorney General for Nova Scotia (1905), 35 S.C.R. 182, refd to. [para. 45].

In re Fitzpatrick (1984), 6 D.L.R.(4th) 644 (Man. Q.B.), refd to. [para. 45].

Re Tacon, [1958] 1 Ch. D. 447, refd to. [para. 45].

In re Dominion Students' Hall Trust, [1947] 1 Ch. 183, refd to. [paras. 45, 76, 96].

Blainey v. Ontario Hockey Association (1986), 14 O.A.C. 194; 54 O.R.(2d) 513, refd to. [para. 64].

Bhadauria v. Seneca College, [1981] 2 S.C.R. 181; 37 N.R. 455; 124 D.L.R.(3d) 193, refd to. [paras. 64, 66].

Bell v. Ontario Human Rights Commission, [1971] S.C.R. 756, refd to. [para. 68].

R. v. Tottenham and District Rent Tribunal, Ex parte Northfield (Highgate) Ltd., [1957] 1 Q.B. 103, refd to. [para. 68].

Income Tax Commissioners v. Pemsel, [1891] A.C. 531, refd to. [para. 69].

Re Levy (1989), 68 O.R.(2d) 385, refd to. [paras. 69, 70].

Ministry of Health v. Simpson, [1951] A.C. 251 (H.L.), refd to. [paras. 70, 90].

McGovern v. Attorney General, [1982] 1 Ch. 321, refd to. [para. 70].

Gilmour v. Coates, [1949] 1 All E.R. 848, refd to. [para. 70].

Oppenheim v. Tobacco Securities Trust Company Limited, [1951] A.C. 297, refd to. [para. 70].

Ex parte Dawes (1886), 17 Q.B.D. 275, refd to. [para. 72].

Jones v. T. Eaton Co. Ltd., [1973] S.C.R. 635, refd to. [para. 74].

McPhail v. Doulton, [1971] A.C. 424 (H.L.), refd to. [para. 74].

Re Selby's Will Trusts, [1965] 3 All E.R. 386 (Ch.D.), refd to. [para. 74].

In re Allen, Faith v. Allen, [1953] 1 Ch. 810 (C.A.), refd to. [para. 74].

In re Gott, [1944] 1 Ch. 193, refd to. [para. 74].

Re Lysaght, [1966] 1 Ch. 191, refd to. [paras. 76, 92, 93].

Re Clayton v. Ramsden, [1943] A.C. 326, refd to. [para. 76].

Re Tarnopolsk et al., [1958] 3 All E.R. 479, refd to. [para. 76].

Christie v. York Corporation, [1940] S.C.R. 139, refd to. [para. 77].

Re Noble and Wolf v. Alley, [1949] O.R. 503, refd to. [para. 78].

Re Drummond Wren, [1945] O.R. 778, refd to. [paras. 78, 80].

Bhadauria v. Board of Governors of Seneca College (1979), 105 D.L.R.(3d) 707 (Ont. C.A.), refd to. [para. 79].

Ontario Human Rights Commission, Dunlop, Hall and Gray v. Borough of Etobicoke (1982), 40 N.R. 159; 132 D.L.R.(3d) 14, refd to. [para. 79].

Ontario Human Rights Commission and O'Malley v. Simpsons-Sears Ltd. (1985), 64 N.R. 161; 23 D.L.R.(4th) 321, refd to. [para. 83].

Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143; 91 N.R. 255, refd to. [paras. 88, 89].

In re Wilson, Twentyman v. Simpson, [1913] 1 Ch. 314, refd to. [para. 92].

Statutes Noticed:

Canadian Charter of Rights and Freedoms, 1982, sect. 15 [paras. 84, 89]; sect. 15(2) [para. 88]; sect. 27, sect. 28 [para. 84].

Charities Accounting Act, R.S.O. 1980, c. 65, generally [para. 69].

Convention on the Elimination of All Forms of Discrimination Against Women (1979) [para. 85].

Conveyancing and Law of Property Act, R.S.O. 1980, c. 90, sect. 13 [para. 81]; sect. 22 [para. 90].

Human Rights Code, S.O. 1981, c. 53, generally [paras. 4, 81, 90]; sect. 1, sect. 13 [para. 88]; sect. 31(2) [para. 51]; sect. 40(1) [para. 67].

Insurance Act, R.S.O. 1980, c. 218, sect. 117 [para. 81].

International Convention on the Elimination of All Forms of Racial Discrimination (1965) [para. 85].

International Covenant on Civil and Political Rights, art. 2, art. 3, art. 25, art. 26 [para. 85].

Labour Relations Act, R.S.O. 1980, c. 228, sect. 13 [para. 81].

Ministry of Citizenship and Culture Act, S.O. 1982, c. 6, sect. 4 [para. 81].

Rules of Civil Procedure (Ont.), rule 14.05(2), rule 14.05(3) [paras. 2, 48].

Trustee Act, R.S.O. 1980, c. 512, sect. 60 [paras. 2, 66, 68].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 5, para. 505, p. 309 [para. 70]; para. 696 [para. 92].

Hansard Official Report of Debates of Legislative Assembly of Ontario, 2nd Session, 33rd Parliament, May 28, 1986, pp. 937-941 [para. 82].

Ontario, Race Relations Directorate, Policy on Race Relations [para. 82].

Scott on Trusts (4th Ed. 1989), vol. IVA, pp. 535, 536 [para. 45].

Waters, Law of Trusts in Canada (1986), pp. 240 [para. 34]; 611-632 [para. 45].

Waters, Law of Trusts in Canada (2nd Ed. 1974), c. 14 [para. 69]; pp. 460-504 [para. 70]; 502 [para. 91]; 601-603, 626 [para. 90].

Counsel:

Janet E. Minor, for the appellant, Ontario Human Rights Commission;

Alan P. Shanoff and Francy Kussner, for Intervenor-appellant Royal Ontario Museum;

H. Donald Guthrie, Q.C., and John W.R. Day, for the Canada Trust Company, respondent;

Wm. L.N. Somerville, Q.C., and Lindsay A. Histrop, for Class of Persons Eligible to Receive Scholarships from the Leonard Foundation, Intervenor;

Stan J. Sokol, for the Public Trustee, Intervenor.

This appeal was heard on September 7 and 8, 1989, before Robins and Tarnopolsky, JJ.A., and Osler, J. (ad hoc) of the Ontario Court of Appeal. The decision of the Court of Appeal was released on April 24, 1990, including the following opinions:

Robins, J.A. (Osler, J. (ad hoc), concurring) - see paragraphs 1 to 47;

Tarnopolsky, J.A. - see paragraphs 48 to 98.