ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-0259
DATE: 2012-07-05
IN THE MATTER OF THE TRUSTEES ACT
IN THE MATTER OF THE GAYLE D. LIESCH, MARGUERITE M. LIESCH
FAMILY TRUST
B E T W E E N:
ROSEMARY FREDSON,
Alan G. Jones , for the Applicant
Applicant
J. dep. Wright, J.
Reasons For Order
[ 1 ] This is an exparte application for an order for payment of residual funds from the above trust into court to the credit of the Accountant of the Superior Court of Justice (Ontario).
[ 2 ] This is not an appropriate case for the order sought.
[ 3 ] The applicant is the trustee of a family trust created in California in 1992 by two settlors (termed "trustors" in the trust) who were residents of the State of California, County of San Bernardino. By an amendment to the trust 1995 it was provided that upon the death of the surviving trustor the trust should terminate and the trustee should distribute the net income and principal remaining in the trust amongst six beneficiaries, four of whom were persons, one of which was the Humane Society of San Bernardino and the other of which was the "Leukemia Fund".
[ 4 ] The trustee now wishes to wind up the estate. All of the beneficiaries have been paid and have provided releases to the trustee except for the last. The trustee deposes that she is unable to determine which of hundreds if not thousands of charities devoted to leukemia related issues is the particular fund which was referred to in the trust amendment.
[ 5 ] The trustee claims that she has annexed a statement of distribution showing all of the monies received by the trust and all of the expenditures made together with the proposed distribution required by the trust but these are not included in the material placed before the court.
[ 6 ] The law is loath to allow a charitable gift to lapse or to be rendered ineffective. It would appear that the intention of the trustors was to benefit some organization, presumably in San Bernardino California or the state of California whose object involved leukemia. There is no justification for paying the money into an Ontario court where it will languish.
[ 7 ] It may be that there are hundreds if not thousands of charities devoted to leukemia related issues but this does not justify the trustee in simply washing her hands of her responsibility.
[ 8 ] The trustee should inform the court of the steps taken to identify the appropriate beneficiary. For example:
• Does the lawyer who drafted the amendment to the trust have any notes as to the identity of the fund?
• Did either of the trustors suffer from leukemia? If so, did she receive assistance from any particular organization dedicated to helping those with leukemia?
• Do the financial records of the trustors disclose any previous contributions to an organization dealing with leukemia?
• What organizations in San Bernardino support leukemia sufferers or research?
• Which organization or organizations does the trustee think is or are the most likely candidates?
[ 9 ] If the court is to intervene it would appear that it would do so by exercising a cy-près jurisdiction. "In cases where there is no institution with the precise name given by the testator, it is fairly easy to avoid a lapse because in the majority of cases, if discovery of the intended recipient proves impossible, the fact that the testator has not bothered to find out the exact name of his intended recipient may itself reveal a general charitable intent for the work undertaken by that institution." (Waters Law of Trusts in Canada (3 rd ) page 767)
[ 10 ] The first question is whether the trustors were identifying a particular beneficiary or whether they were in fact referring to the purposes for which the beneficiary existed.
[ 11 ] If the identity of the actual beneficiary cannot be ascertained then the trustee may present a disposition scheme to be drawn up for the trust property to be applied to an object or mode of achieving the object which is as close as possible to that set out by the trustors.
"For the court to have this jurisdiction two things must be established; first, that it is impossible to carry out the object or mode of attainment, or, if it is indeed possible, that to carry out the object or mode would in the circumstances the impracticable. Second, it must be shown that the donor in making the gift had a general or overriding charitable intent. If both tests are satisfied, then the court as part of its inherent jurisdiction will, in its discretion, make the appropriate order for a cy-près scheme.” (Waters Law Of Trusts In Canada (3 rd ed) page 773)
[ 12 ] In other words, if one cannot ascertain the appropriate beneficiary then advise the court how the money is proposed to be distributed and the reasons therefore. I would not consider that the trustee would have any difficulty in satisfying the requirement of showing that the donor making the gift had a general or overriding charitable intent.
[ 13 ] For some reason the original application record was styled "IN THE MATTER OF THE MUNICIPAL ACT, 2001 SO 2001, Part XI”. I assume this is in error and I have amended the style of cause to read:
"IN THE MATTER OF THE TRUSTEES ACT,
AND IN THE MATTER OF GAYLE D. LIESCH AND MARGUERITE M. LIESCH FAMILY TRUST"
[ 14 ] Order to go:
(i) Dismissing the application to pay money owing to Leukemia Fund into court.
(ii) Directing the trustee to present a scheme to the court for achieving the object of the trust with respect to "Leukemia Fund" which scheme shall be supported by details of inquiries made.
__________ ”original signed by”_ ___
The Hon. Mr. Justice J. deP. Wright
Released: July 5, 2012
COURT FILE NO.: CV-12-0259
DATE: 2012-07-05
ONTARIO SUPERIOR COURT OF JUSTICE IN THE MATTER OF THE TRUSTEES ACT IN THE MATTER OF THE GAYLE D. LIESCH, MARGUERITE M. LIESCH FAMILY TRUST B E T W E E N: ROSEMARY FREDSON, Applicant REASONS FOR ORDER J. deP. Wright J.
Released: July 5, 2012
/mls