SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 1283-15

DATE: 15/07/02

RE: THE CORPORATION OF THE MUNICIPALITY OF STRATHROY-CARADOC
(Applicant)

And:

JAMES GENTLEMAN, WILLIAM J. LAING, and WILLIAM TANNER
(Respondents)

BEFORE: Justice I. F. Leach

COUNSEL:
Robert G. Waters, for the Applicant

Respondents deceased and unrepresented

HEARD: In writing

ENDORSEMENT

[1] Before me is an application in writing, brought on an ex parte basis, for an order dispensing with service on the named respondents, (who are all deceased), and transferring and vesting title to a certain parcel of property to and in the applicant Municipality, free and clear of any trust obligations, writs of execution or other encumbrances.

[2] At the risk of over-simplification, the general background to the current application is as follows:

• The property underlying the application is located in what was formally known as the hamlet or village of Melbourne, in the County of Middlesex. The former geographic boundaries of that hamlet or village now straddle the boundary between what are now the Municipality of Strathroy-Caradoc and the Municipality of Southwest Middlesex, (which respectively include what formally were known as the Township of Caradoc and the neighbouring Township of Ekrid).

• By way of a written instrument dated May 15, 1923, a committee of named individuals, on behalf of a branch or “Camp” of an organization known as “Woodsmen of the World”, transferred the relevant property to the three named respondents “in trust as Trustees, to permit the same and any building now upon or hereafter erected thereon to be used as a Public Hall”. The same instrument set forth various additional terms, regulating such matters as annual public meetings for the election of trustees by and from adult males resident in Melbourne, (as well as their term or terms of office), and the transaction of business pertaining to the said public hall. The elected trustees were charged with responsibility for making “such rules and regulations as they [deemed] expedient for the proper government” of the hall, which were then to have been submitted for “approval, amendment or rejection” at the contemplated and required annual meetings.

• A public hall was either in place at the time of the 1923 instrument or was erected thereafter, as a building which came to be known as the “Melbourne Community Hall” apparently is still standing. Until sometime in or around 2014, it seems to have been used by residents of the community, (living in the two neighbouring townships or municipalities), for many decades.

• Over time, the precise terms of the trust, and the precise legalities of the property’s ownership, nevertheless either were forgotten and ignored, and operation of the hall in accordance with the terms of the trust fell by the wayside. Details of how and when that may have occurred seem lost in the mists of time. Records have been sought, but none have been found.

• In recent years, de facto responsibility for operation of the hall had been assumed by an informal committee of volunteers, who seem to have paid for utilities and internal upkeep of the building through revenues generated by its operation. More serious maintenance was dealt with by the two neighbouring townships, and more recently by the applicant municipality, which in recent years has acted under a mistaken impression that it was the owner of the property. (That mistaken belief apparently was fostered and/or reinforced by a 1985 transfer of lands adjoining the property, although the relevant transfer formally did nothing to alter the title arrangements made in 1923.) Consistent with that mistaken impression of ownership, and/or recognizing “the public nature of the trust”, the applicant and its predecessors also have not levied municipal taxes in relation to the property.

• Members of the relevant volunteer committee now are deceased or aged. Those who remain felt unable to keep up with the demands and expense associated with continued operation of the public hall, which has been deteriorating. Moreover, the building no longer meets Fire Code requirements for “assembly occupancy”, under the Fire Protection and Prevention Act, 1997, S.O. 1997, c.4., and there now are two other community halls within the hamlet that easily can accommodate the activities formerly undertaken in the old public hall. Operation of the public hall therefore now has been abandoned.

• Concerned that the building will become a safety hazard over time, the applicant determined that the “best outcome” would involve demolition of the existing building, and/or a declaration that the property is “surplus” as a prelude to its possible sale, with user groups being accommodated in other community facilities. However, a title search in furtherance of those intentions brought the existing legal realities to light.

[3] With the written consent of the neighbouring Corporation of the Municipality of Southwest Middlesex, the applicant now brings this application.

[4] In the affidavit material filed by the applicant, it is said that the present title to the property and its hall should be “rectified”, vesting title in the applicant free and clear of any trust or other obligations, and that the application is being brought for the purposes of “curing” title to the property in that regard.

[5] With respect, it seems to me that these are not appropriate or accurate characterizations of the situation and the legalities involved.

[6] A “rectification” seeks to make legalities conform to what originally was intended, and “curing” a defect in title assumes that title otherwise was to have vested free of the suggested defect.

[7] However, the original 1923 transfer in this case clearly did not intend to transfer title to the applicant or its municipal government predecessors.

[8] Nor is the applicant correct in its assumption that no one else need be served with the application simply because the original grantees and trustees of the property are long dead.

[9] In my view:

• The situation instead clearly involves a valid charitable purpose trust, the identified and exclusively charitable object of which was both possible and practical when the legal interest vested in the original trustees by virtue of the written instrument of gift that took effect in 1923.

• The existence of a valid constituted trust does not lapse with intervening (and even innocuous) breaches of trust in relation to its administration, and “a trust never fails for lack of a trustee”.

• That valid charitable purpose trust may now have been overtaken by a supervening impracticability or impossibility. However, in such cases, the law is well settled as to what must happen if the original dedication of the property to charity contains no “gift over” and the property was given exclusively to a charitable purpose, (as in this case). In particular, “if there is an exclusive dedication, and the purpose can no longer be carried out because of impossibility or impracticability, the property is regarded as dedicated to charity, and passes to the Crown in right of the province as the ultimate protector of charity and charities”, although “by long custom, the Crown will now agree to the drawing up of a cy-pres scheme for the approval of the court”. [Emphasis added.] See Oosterhoff & Gillese, Text, Commentary and Cases on Trusts, (4th ed.), at p.874, quoting from an article published by Professor Donovan Waters in (1974), 52 Can. Bar. Rev. 598 at 598-599.

• Moreover, it seems to me that the situation falls squarely within the provisions of ss. 1(1) and 5(4) of the Charities Accounting Act, R.S.O. 1990, c.C.10, requiring that an application of this nature be served on the Public Guardian and Trustee. In particular, under the terms of the 1923 “instrument in writing”, real property was given to or vested in persons as trustees for a charitable or public purpose, or was to be applied by the persons for such a purpose, thereby constituting a charitable donation within the meaning of s.1(1) of the legislation. The applicant now has brought a proceeding effectively seeking to vary that written instrument by substituting itself as the transferee and owner of both the legal and beneficial title to the property. Pursuant to s.5(4) of the legislation, the Public Guardian and Trustee therefore must be served with the application, and if no one appears as representing the “charitable or public institution”, the Public Guardian and Trustee has the right to intervene in the proceeding, as well as the right to object or consent, and the right to be heard as a party.

[10] The Public Guardian and Trustee, as representative of the provincial Crown, may very well consent to particular cy-pres arrangements proposed by the applicant, which generally seems intent on continued use of the property and/or its proceeds of sale for the direct or indirect benefit of those whom the original charitable purpose trust was designed to serve.

[11] Nothing herein is meant to question the bona fide intentions of the applicant in that regard.

[12] However, as a matter of law, the legal and beneficial title to a property subject to a valid and vested charitable purpose trust cannot effectively be expropriated “free and clear” of all obligations in the simple manner suggested by the application.

[13] The application accordingly is dismissed, without prejudice to the applicant municipality’s ability to bring a further and appropriate application, on notice to the Public Guardian and Trustee, for court approval of a proposed cy-pres distribution in relation to the property.

[14] In the meantime, the applicant is ordered and directed to serve a copy of this endorsement on the Public Guardian and Trustee, along with a copy of the original application material.

Justice I F. Leach

Date: July 2, 2015