The Canada Trust Company v. Browne, 2012 ONCA 862

Case Summary

The appellant appealed a decision interpreting a varied trust deed. The trust had been converted into a percentage trust (unitrust) to allow the trustee to invest for maximum returns. Due to market downturns, the trustee had to sell capital assets to meet the mandatory minimum percentage distributions to the income beneficiaries, depleting the trust's capital. The application judge found that the trust deed's terms made the percentage payments mandatory and ousted the trustee's duty to maintain an even hand between income and capital beneficiaries regarding distributions. The Court of Appeal dismissed the appeal, holding that the application judge correctly interpreted the trust deed based on its clear language and the surrounding factual matrix, including the prior court approval and tax rulings.

COURT OF APPEAL FOR ONTARIO

CITATION: The Canada Trust Company v. Browne, 2012 ONCA 862

DATE: 20121207

DOCKET: C53262

Feldman, Simmons and Cronk JJ.A.

In the Matter of the Primo Poloniato Grandchildren’s Trust

BETWEEN

The Canada Trust Company Trustee of the Primo Poloniato Grandchildren's Trust Applicant (Respondent)

and

Russell Browne, John Mori Jr., Andrea L. Mori-Mickus, Laura Lee, Marla L. Ashmore, Teresa O'Neil, Michael Poloniato, Kristen Wiley, Brandon Ashmore, and The Children's Lawyer on behalf of the minors, Rachel Browne, Hailey Browne, Michelle Wiley, Jessica Ashmore, Julia Mickus, Robert Mickus, Olivia Mickus, John Mickus, Marissa Lee, Erica Lee and on behalf of the unborn and unascertained beneficiaries of the Primo Poloniato Grandchildren's Trust Respondents (Appellant/Respondents)

Earl A. Cherniak, Q.C. and Cynthia B. Kuehl, for the appellant

Archie J. Rabinowitz, David Lobl, and Jeremy C. Millard, for the respondent Canada Trust Company

Mark Abradjian, Christopher R. Durdan and Brad Wiseman, for the respondents John Mori Jr., Marla L. Ashmore and Teresa O’Neil

Heard: April 11, 2012

On appeal from the order of Justice Laurence A. Pattillo of the Superior Court of Justice, dated October 5, 2011, with reasons reported at 2011 ONSC 731.

Feldman J.A.:

INTRODUCTION

[1] The Children’s Lawyer brings this appeal on behalf of the minor, unborn and unascertained beneficiaries of the Primo Poloniato Grandchildren’s Trust (the “Trust”). The Trust was settled in October 1980 by Primo Poloniato, the founder of Primo Foods Ltd., in favour of his grandchildren (the income beneficiaries) and their issue, his great-grandchildren (the capital beneficiaries). The Trust’s principal asset is shares in 679312 Alberta Ltd. (the “Holding Company”), a private investment company controlled by the Trust. While the value of the Trust has fluctuated over the years, at its peak it was worth in excess of $130 million.

[2] Since its inception, the Trust has been varied with court approval twice - in December 1988 and again by a deed of arrangement, dated December 1997, which was approved in March 1998. Both variations were made based on the agreement and consent of all parties, including the Children’s Lawyer (in 1988, the Official Guardian) on behalf of minor, unborn and unascertained beneficiaries.

[3] The application that gives rise to this appeal was brought by Canada

The Canada Trust Company v. Browne, 2012 ONCA 862

Case Summary

COURT OF APPEAL FOR ONTARIO

Feldman J.A.:

INTRODUCTION

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 1

Legal Tests 1

Legislation 2