Court of Appeal for Ontario

Citation: Dalewood Economy Limited v. Black Estate, 2010 ONCA 824

Date: 2010-12-06

Docket: C51803

Before: Doherty, Feldman and Juriansz JJ.A.

Between:

Dalewood Economy Limited and Meadowvale Land Limited

Applicants (Appellants)

and

Herbert Jack Greenstein and Harvey Geist, Executors and Trustees of the Estate of Samuel Black, and Herbert Jack Greenstein in his capacity as an Executor and Trustee of the Estate of Norman Black

Respondents (Respondents)

Counsel:

Peter W.G. Carey, for the appellants

Gavin MacKenzie, for the respondents

Heard: December 1, 2010

On appeal from the order of Justice Lois B. Roberts of the Superior Court of Justice, dated February 10, 2010.

ENDORSEMENT

[1] The appellants appeal the order of Justice Roberts dated February 10, 2010 that the appellants provide the respondents with an executed release in the form attached to the respondents’ Notice of Application. That order was an ancillary part of a broader order removing the respondents as bare trustees of interests in certain lands of which the appellant Dalewood Economy Limited was the beneficial owner. Dalewood had instructed the respondents to convey the lands to the appellant Meadowvale Land Limited. Apprehensive that they might face tax liability personally, the respondents had refused to convey the lands unless the appellants first provided a release in the requested form.

[2] Before the application judge, the appellants’ position seems to have been that Meadowvale was under no obligation to execute and provide any release in favour of the respondents. There was no issue that Dalewood, as the beneficiary of the trust, was bound by the trust agreement, which contained terms releasing and indemnifying the trustees from all responsibility with respect to the management and use of the lands. The application judge found that in the particular circumstances of the case there was good reason to require Meadowlands to provide the release. She went on to state that the form of release and indemnity sought by the respondents was “essentially no different” from the release and indemnity provisions in the trust agreement. She went on to observe that “The only express difference in my view is the requirement that Meadowvale, as well as Dalewood, execute the release and indemnity.” Consequently, she ordered the form of the release delivered by the respondents to be executed and provided by both appellants.

[3] On appeal the appellants did not contest that part of the order requiring Meadowvale to provide a release. Rather, they argued that the respondents were entitled only to be released in the terms set out in the trust agreement. They submitted that as the respondents’ draft release was broader than the terms of the trust agreement, they should not be required to provide it.

[4] Respondents’ counsel agreed that, generally, trustees are not entitled to demand a release as a precondition to the execution of their trust duties. However, he submitted that in this case the trust agreement entitled the trustees to a release, and the release drafted by the respondents simply implemented the intention of the trust agreement. We disagree.

[5] As noted the trust agreement released the respondents “from all responsibility with respect to the management and use of the lands” and “in connection with the Lands or out of the Trustee being registered on title as owner of the Lands”. On the other hand, the release requested by the respondents released them as transferors from all claims “whatsoever” “in connection with their being or acting as bare trustees of the Lands or otherwise”. It went on to indemnify them in respect of all claims made against them “in any capacity whatsoever”. We have no doubt that the requested release is broader in scope than the release provided by the trust agreement.

[6] Accordingly, we would allow the appeal, set aside para. 5 of the application judge’s order and replace it with an order that both appellants execute and deliver to the respondents a release and indemnity in the terms set out in the trust agreement.

[7] In light of the fact that the argument regarding the scope of the draft release does not appear to have been raised in the same way on the motion below, there will be no costs of the appeal.

“d. Doherty J.A.”

“K. Feldman J.A.”

“R.G. Juriansz J.A.”