Easingwood v Cockroft & ors 2013 BCCA 182

WTLR Issue: December 2016 #165

EASINGWOOD

V

COCKROFT & ORS

Analysis

Reginald Easingwood (Reginald) was married to Kathleen Easingwood (Kathleen) from 1983. He had four children by his first wife, who had died in 1976. In April 2001, Reginald executed an enduring power of attorney in favour of his two children acting together. Three years later, in March 2004, Reginald made a will. Under that will, Kathleen was to have an entitlement to income in a fund of $525,000 (plus adjustment for each year), which upon her death would be divided between his children, his step children, and his grandchildren. He also gave his wife a life interest in the matrimonial home.

By 2007, Reginald was suffering from dementia, and one of the attorneys, Hank, was diagnosed with cancer. There were concerns about how Reginald’s finances would be managed if one of the attorneys were to die, as the enduring power of attorney could only be exercised jointly. Accordingly, the attorneys settled the bulk of Reginald’s assets in trust for his benefit. Reginald was entitled to the income during his lifetime, and on his death, the terms of the trust mirrored the will.

Reginald died in 2009. Hank had predeceased him. Kathleen subsequently brought a claim challenging the creation of the trust and the transfer of Reginald’s assets thereto, and she also brought an application to vary his will under the Wills Variation Act. The trial judge found against her and she appealed.

Held:

  1. 1) Attorneys operating under a valid general power of attorney had the power to create an inter vivos trust or transfer to such a trust assets held by the principal, provided the trust created did not otherwise step into territory prohibited by other general principles of law or statutory prohibitions.
  2. 2) An attorney did not have power to make a testamentary disposition. Doing so runs afoul of the Wills Act 1996, c489. This safeguarded the true wishes of the testator as to dispositions after death. But the settlement was an inter vivos disposition in respect of which the three certainties were met, and which was immediately effective and irrevocable.
  3. 3) The judge had not erred in finding that the settlement mirrored the terms of the will. He had referred to the concordance of the terms of the will and the trust as demonstrating that the attorneys had acted in conformity with Reginald’s intentions. That was an appropriate line of reasoning, given the predominant requirement that attorneys considered the best interests of the principal. An understanding of the principal’s demonstrated intentions is relevant and material to that question. It was however not necessary to infer that Reginald would have consented to the creation of the settlement and the transfer thereto of his assets.
  4. 4) Reginald was a man of business who had executed a will that complied fully with the terms of a marriage agreement. The settlement, in turn, was entirely consistent with the marriage agreement, the will, and business prudence, and the trust secured Reginald’s assets for his use during his lifetime. It would be a fiction to say the attorneys were acting in breach of their duty to Reginald in the creation of the settlement, when it conformed to all the arrangements which he had made.
  5. 5) Nor were the attorneys to be prohibited from taking a prudent step as would be taken by a reasonable business person, such as tax planning, which incidentally benefited all the beneficiaries including themselves by preserving the value of assets.
JUDGMENT SAUNDERS J: [1] This appeal concerns the validity of estate planning steps taken by attorneys under a valid enduring power of attorney made by Reginald Henry (Reg) Easingwood, now deceased. As a result of those steps taken in anticipation of Reg Easingwood’s death, most of his assets were placed in an inter vivos trust …
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Counsel Details

T Todd and C Cho for the appellant.

JD Buchan for the respondent beneficiaries.

DJ Manson and J Zaitsoff for the respondents, Lauren Cockroft and Elizabeth Paterson, as trustees.

Cases Referenced

  • AB v CD 2009 BCCA 200
  • (
  • Alberta Ltd v Otter Bay Developments Ltd 2009 BCCA 37
  • (
  • Anderson (Administration of Costello Estate) v Patton [1948] 2 DLR 202, Alta SC.
  • Bank of Nova Scotia Trust Co v Lawson (2005) 22 ETR (3d) 198, Ont SCJ.
  • Banton v Banton (1998) 164 DLR (4th) 176, Ont SCJ; affd 53 OR (3d) 567, Ont CA.
  • Bell Canada v Office and Professional Employees' Int'l Union, Local 131 (1973) 37 DLR (3d) 561, [1974] 1 SCR 335.
  • British Columbia v Surrey School District No 36 2005 BCCA 106.
  • (
  • Canadian Aero Service Ltd v O'Malley [1974] SCR 592
  • Chichester Diocesan Board of Finance v Simpson [1944] UKHL 2
  • Cock v Cooke (1866) LR 1 P & D 241.
  • Corlet v Isle of Man Bank Ltd (1937) 3 DLR 163, Alta SC.
  • Desharnais v Toronto Dominion Bank 2001 BCSC 1695, (2001) ETR (2d) 192; rvsd on different grounds 2002 BCCA 640.
  • Domtar Inc v Belkin Inc (1989) 62 DLR (4th) 530, BCCA.
  • Duff Development Co v Kelantan Government [1923] AC 395, [1923] All ER Rep 349, HL.
  • Egli v Egli 2004 BCSC 529.
  • (
  • Greg Dowling Architects Inc v J Raymond Griffin Architect Inc 2012 BCCA 366, (2012) 36 BCLR (5th) 269.
  • Housen v Nikolaisen 2002 SCC 33, [2002] 2 SCR 235, Can SC.
  • JEL Investments Ltd v Boxer Capital Corp 2011 BCCA 142, (2011) 18 BCLR (5th) 75.
  • MacDougall v MacDougall (2005) 262 DLR (4th) 120, Ont CA.
  • Mawdsley v Meshen 2012 BCCA 91, 15 ITELR 66.
  • (
  • Mordo v Nitting 2006 BCSC 1761.
  • (
  • Nicholls, Re (1987) 34 DLR (4th) 321, Ont CA.
  • O'Hagan v O'Hagan 2000 BCCA 79, (2000) 183 DLR (4th) 30.
  • Olympic Industries Inc v McNeil (1994) 86 BCLR (2d) 273, BC CA.
  • Petty v Telus Corp 2002 BCCA 135.
  • (
  • Pioneer Shipping Ltd v BTP Tioxide Ltd [1981] 2 All ER 1030, [1982] AC 724, HL.
  • Regal (Hastings) Ltd v Gulliver [1942] UKHL 1
  • Rudolph v Molly (1906) 12 BCR 8016 ITELR 364 at 367
  • Saunders v Vautier [1841] EWHC Ch J82
  • Schuler (L) AG v Wickman Machine Tool Sales Ltd [1973] 2 All ER 39, [1974] AC 235, HL.
  • Tataryn v Tataryn Estate [1994] 2 SCR 807, Can SC.
  • Volvo Canada Ltd v UAW, Local 720 [1980] 1 SCR 178, Can SC.
  • Wonnacott v Loewen (1990) 44 BCLR (2d) 23, BC CA.
  • Wood v Public Trustee (1986) 70 BCLR 373, BC CA.
  • Zimmerman v Fenwick 2010 ONSC 2947, (2010) 57 ETR (3d) 101, Ont SCJ.

Legislation Referenced

  • Income Tax Act
  • Powers of Attorney Act 1996
  • Wills Variation Act, c489, c490, Pt 2, Pt 3, s8