Court File and Parties

COURT FILE NO.: CV-22-00000198 DATE: 2023/02/24 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

FRIENDS OF NELLIE LUNN and BENJAMIN SAMANN, Applicants – and – THE CORPORATION OF THE TOWNSHIP OF WOLLASTON, Respondent

Counsel: James McCarthy and Tony Fleming, for the Applicants Jennifer Ng and Jennifer Savini, for the Respondent

HEARD: October 27, 2022 with additional submissions received November 1, 2022

Reasons for Decision

HOOPER J.

[1] In 1981 Boleslaw Klincewicz (“Klincewicz”) executed a will (the “Klincewicz Will”) in which he left a parcel of land to the Corporation of the Township of Wollaston (“Township”). The land was to be used for a park and was to be named the Nellie Lunn Park. It is situated on Urbach Lake.

[2] The Township no longer wants this land. On August 8, 2022, the Township’s council passed a resolution the property be sold. The Township thereafter entered into an agreement of purchase and sale with a private landowner. That sale was to close on October 31, 2022; however, the parties entered into a consent order that will delay the sale until the decision of this court.

[3] The Applicants contend that the Klincewicz Will established a charitable trust over the land, and the Township holds the land as trustee. As such, they argue that the contemplated sale would be a breach of trust. In the alternative, the Applicants argue that Township’s motion to sell the property was ultra vires as it was not properly authorized by by-law.

[4] The Township denies any trust was ever intended or created over the land that would limit its fee simple ownership. Accordingly, the Applicants’ attempt to interfere with the sale of the land is improper. Further, the Township objects to the ultra vires argument as it was not reflected in the Notice of Motion and was first raised in the Applicants’ factum. If the court considers the ultra vires argument, the Township states that the sale was properly authorized and must stand.

Decision

[5] For the reasons that follow, I find that a charitable trust was not created. I further find that the sale of the property was not properly authorized by by-law and therefore is ultra vires. The Township can correct that issue by passing a by-law to authorize the sale if it still chooses to do so.

Background

[6] This application is brought in the name of two applicants. The Friends of Nellie Lunn Park Inc. (“FONL”) is an Ontario corporation founded by three individuals associated with an informal social group of the same name. Benjamin Samann, is an individual who resides in the Township of North Kawartha.

[7] The Respondent is a municipal corporation located in Hastings County, approximately 20 kilometres south of the Town of Bancroft. As of the 2016 Census, it had a recorded population of 670, with approximately 791 private dwellings of which only 312 are occupied by usual residents. Its 2018 operating budget (total municipal expenditures) was approximately $2.1 million.

[8] The property known as Nellie Lunn Park (the “Property”) bears legal description LT 14 CON 4 WOLLASTON; WOLLASTON; COUNTY OF HASTINGS EXCEPT FORFEITED MINING RIGHTS, IF ANY and PIN 40119-0081 (the “Property”). The Township received the Property from the Estate of Boleslaw Klincewicz.

[9] The Klincewicz Will stated, in part:

“I GIVE, DEVISE, BEQUEATH AND APPOINT all my estate, both real and personal, of every nature and kind whatsoever and wheresoever situate, and over which I have any power of appointment, to my Trustee, hereinafter named, upon the following trusts

1. To transfer and convey all my real estate located in the Township of Wollaston, in the County of Hastings, to the Town of Coehill for the purpose of a Park, and I direct that such Park shall be called the “Nellie Lunn Park”.

[10] Mr. Klincewicz passed away on May 9, 1981. Nellie Lunn Park was the only specific bequest in the Klincewicz Will.

[11] On September 8, 1981, the Township’s Council authorized the Clerk to advance the funds to have the deed of the Property registered in the Township’s name. The Minutes of Township Council authorizing that the Township receive the Property read, in part:

That Council authorize clerk to send $50.00 to Haskett, Dalton Whaley & Associates to have deed for Lot 14, Cons. 4 registered in Township’s name as per instructions in will of Boleslaw Klincewicz. This Property has been left to Wollaston Township for a park and future recreation facilities.

[12] The Klincewicz Will appointed the Testator’s friend, Nellie Claus, as the sole Executrix of the estate. Nellie Claus and Nellie Lunn are the same person. In her capacity as Executrix, Nellie Claus executed the indenture transferring the Property to the Township “in fee simple” and releasing all future claims.

History of the Township’s ownership of the Property

[13] The Property is landlocked. Access to the park is primarily via the unopened road allowance to a public road known as Ridge Road. The road allowance borders a parcel of land owned by the intended purchasers of the park, Frederick and Jo Ann Cox. A private road exists, starting at the Ridge Road on the Cox property, crossing the Property, and continuing on to several cottage lots.

[14] The Township describes the Property as “vacant and undevelopable land it has held for over four decades”. Due to conservation requirements in the area, the Township’s evidence is that there is no prospect for the construction of any private dwelling, cabins or buildings on the Property.

[15] In February 2002, the Township took steps to improve access routes to the Property after entering into a logging agreement with a third party for the harvesting of trees. The logging agreement triggered a group of concerned citizens called the “Nellie Lunn Park Committee” to raise concerns about the logging and access road building activities on the Property. After resolving this issue, the Nellie Lunn Park Committee created a management plan that included language for proposed bylaws that would enable the “official establishment and protection of the park.” The Township did not agree with this, advising the committee in writing that it was “reluctant to tie the hands of future councils.” That response from the Township indicated it would not agree to anything that would bind the Township to devote future resources to the Property.

[16] In 2011, the Township passed a resolution authorizing certain owners of the surrounding parcels of land to travel via vehicle across the logging routes on the Property without legally deeded access. This allowed the Township’s Chief Building Officer to issue building permits for the construction of cottages along the south shore of Urbach Lake.

[17] The Township argues that its decisions during its ownership of the Property demonstrate the Township’s view that this was its land, and it could authorize use of the Property in any way it saw fit.

[18] In November 2020, the Township voted to close the park during the hunting season. In February 2021, the Township voted to close the park to the public altogether, pending the outcome of a grant application for funding through the Province of Ontario’s Rural Economic Development program. When the Township realized that this program is a cost-sharing model and the Township would have to agree to bear at least 50% of the cost of any improvements, it withdrew the application.

[19] On June 6, 2022, the Township passed a motion resolving that the property be sold by public tender and that preference may be given to adjoining landowners. On July 5, 2022, an advertisement for public tenders to purchase the Property was posted on the Township’s website.

[20] Three tenders were received. The highest tender was from Fred and Jo Ann Cox, the adjacent property owners. The Cox tender was $100,000 over the next highest tender, that of the FONL. FONL’s tender specified that FONL would accept the land in trust on condition that the Property remain a park.

[21] On August 8, 2022, at the regular council meeting, the Township’s council passed a resolution to sell the Property to Fred and Jo Ann Cox and directed the Mayor and the Clerk to complete the necessary documentation for the Agreement of Purchase and Sale and the documents required for the closing of the sale. The Minutes from that August 8, 2022 meeting do not reference any by-law authorizing this sale and, Bernice Crocker, Clerk for the Township, agreed on cross-examination that no by-law was passed specifically authorizing the sale of the Property.

[22] The Applicants brought a motion for an interlocutory injunction preventing the sale pending the outcome of this Application. That injunction was resolved by way of a consent order.

Issues

[23] The principal issue before me is whether the land is subject to a charitable trust. If there is such a charitable trust, the Township cannot sell the Property and must maintain the land in perpetuity as a park. If the Property is not held in trust, the Township is free to do whatever it wishes with it.

[24] If the property is not held in trust, I must consider whether the sale was properly authorized by Township’s Council or is ultra vires.

The Property is not held in trust

[25] The creation of a trust requires two key components. First, a declaration of trust with three certainties: certainty of intention, certainty of subject-matter, and certainty of objects. Second, the constitution of the trust, which requires the transfer of title of the trust property to the trustee: see White v. Gicas, 2014 ONCA 490, 232 O.A.C. 79 at para. 37, Mee et al. v. Y.M.C.A. Properties Inc. et al., 2022 ONSC 2621 at para 43.

[26] The Respondent’s position is that neither certainty of intention nor certainty of objects has been established.

Certainty of Intention

[27] When interpreting a will, a court’s task is to determine the testator’s actual or subjective intention as to how he intended to dispose of his property: see Trezzi v. Trezzi, 2019 ONCA 978, 150 O.R. (3d) 663, at para.13.

[28] Certainty of intention is a question of factual interpretation. The use of the word “trust” does not, in and of itself, create a trust, nor does its absence prohibit the finding that a trust has been established: see Tillsonburg Scout Association v. Scouts Canada, 2020 ONSC 747, 12 R.P.R. (6th) 248, at para. 30; Rubner v. Bistricer, 2019 ONCA 733, 50 E.T.R. (4th) 17, at para. 53. While there are no magic words required, the alleged settlor must employ language that clearly shows his intention that the recipient should hold on trust: see Byers v. Foley, (1993), 16 O.R. (3d) 641 (Gen. Div.).

[29] In the absence of formal trust documentation, the court must look at the surrounding circumstances and the evidence as to what the parties intended, what was actually agreed, and how the parties conducted themselves to determine whether there was “certainty of intention”: see Byers.

[30] The Applicant argues that certainty of intention only requires the transfer of property from its owner to another (the trustee) with the intention that the trustee hold and manage the property for the exclusive benefit of others: see Tillsonburg at para 29.

[31] The Respondent argues that more than the transfer of property is required. The Respondent suggests that in determining whether parties have the requisite intention to create a trust, the court must first determine the intention of the parties as set out in the underlying documents and, second, consider the intention of the parties having regard to all of the circumstances: see O’Neil Community Ratepayers Assn. v. Oshawa (City), (1995), 22 O.R. (3d) 648. The Respondent’s position is that upon consideration of the express terms of the Deed, the underlying Will, and the extrinsic evidence of the parties’ intentions, there was no manifest intent sufficient to establish the creation of any trust of the nature asserted by the Applicants that would, in effect, enjoin the Township from selling the Property.

[32] The Respondent argues that the terms of the Deed are unambiguous and reference no intention to transfer anything less than an estate in fee simple, without restrictions. The wording in the will is a precatory trust – an expression of the donor’s desire to have the property used for a specific purpose without the creation of a true trust for the purpose.

[33] In furtherance of this argument, the Respondent relies on Powell v. Vancouver 1912 CarswellBC 1361 (B.C. S.C.) aff’d 1912 CarswellBC 226 (B.C. C.A.). In Powell, the defendant City was conveyed lands “to build the City Hall and offices and maintain the same for city purposes on the lots hereinafter by this indenture granted”: see Powell at para 1-2. The City erected the municipal buildings and maintained them for 11 years, but then decided to move the location of City Hall. The original municipal buildings fell into a state of disrepair. Mr. Powell argued that the land conveyed to the City was imposed with a trust such that, if the lands were not to be used for the purpose intended, the lands ought to revert to the grantor if the purpose for the grant was no longer made out.

[34] In finding no trust had been imposed by the language in the deed, the British Columbia Supreme Court stated:

A grantor, in conveying real property to a municipal corporation for a specific public purpose, may, by the use of apt terms, subject the title to liability to forfeiture for breach of a condition expressed in the deed, and upon the failure of the municipality to comply with the condition, the title will revert to the grantor, as in the case of a similar grant to an individual. The question whether a deed is to be construed as containing a condition subsequent in the case of grants to a city or other municipality, is to be determined upon the same principles as in the case of other grants. If the deed merely specifies the use or purpose for which the land is granted to the City, e. g. 'for a public street' or 'for the erection thereon of a city hall,' or 'for school purposes,' the purpose expressed does not qualify the estate taken but simply regulates and defines the use for which the land granted shall be held. The specification of the purpose is not construed as a condition subsequent, and the property does not revert to the grantor or his heirs upon a discontinuance of the use.

[35] In response, the Applicants rely upon the decision of West Vancouver (District) v. British Columbia (Attorney General), 2020 BCSC 966, 3 M.P.L.R. (6th) 80. In that decision, the court considered the following wording in the will at para. 35:

. . . I DEVISE my said dwelling-house and premises to The Corporation of the District of West Vancouver free of all duties estate taxesand probate fees to be used and maintained by it for public park purposes and I express the wish that in developing the said Amended Lots as a public park the trees and natural growth be preserved as far as may be practical.

[36] The court in West Vancouver was provided with evidence of the context leading up to the preparation of the will, including communications between the testator and the Mayor. Before accepting the land, the Mayor wrote a letter to the testator indicating that after a review by senior parks management the land “would be highly appropriate for a neighbourhood park and would certainly become a treasured community asset.” The will was only executed after the Mayor’s letter had been received.

[37] Much stronger language is seen in other cases wherein a trust was found. In Save our Waterfront Parks Society v. The City of Vancouver et al., 2004 BCSC 430, 47 M.P.L.R. (3d) 265, the City of Vancouver purchased the land and the provisions of the transfer deed contained the following language at para. 24:

TO HAVE AND TO HOLD unto the said Grantee its successors and assigns, to and for its and their sole and only use so long as the said lands are used for the purposes of a public park; . . .

AND the said Grantee hereby covenants with the said Grantor its successors and assigns that it the said Grantee its successors and assigns will not at any time use or cause to be used the lands hereby conveyed for any purpose other than that of a public park. [Emphasis in original]

[38] Similarly in Armstrong v. Langley (City), 1992, 94 D.L.R. (4th) 21 (B.C. C.A.), the relevant covenants contained in the agreement included the following at para. 25:

THE GRANTEE DOTH HEREBY COVENANT AND AGREE that the said lands will be dedicated by by-law to be used only for the purpose of a public park, playground and for recreational facilities.

[39] Contrast this language with that used in MacLeod v. Town of Amherst et al, (1974), 44 D.L.R. (3d) 723 (N.S. S.C. (A.D.)) at p. 725, where the language conveying the lands stated they were “for use as a public or community beach and for other recreational purposes.” The Nova Scotia Court of Appeal affirmed the trial judge’s conclusion that the operative words in the deed were “clear and unambiguous and conveyed a fee simple.”

[40] The Applicants rely heavily on Re Gemmill, [1946] 1 DLR 480 (O.N. S.C.). In that case, one of the bequeaths granted within the will was acreage to the Town of Almonte to construct, establish, and maintain a public park or recreational ground. The language used in the will in Gemmill is similar to the Township’s Council minutes accepting the Property “for a park and future recreation facilities.” However, I note that in Gemmill, Almonte’s obligation to hold the land for this purpose was not the contested issue. Almonte wanted the land to be used for a park. The issue before the court was whether that bequest could be severed from a separate bequest that was found by the court to be invalid. In finding that severance was not possible, both trusts failed.

[41] In the case before me, there is no evidence of the circumstances leading up to the execution of the will, nor is there any evidence that supports a finding that the Township accepted this land with the understanding it would be required to hold and maintain the land as a public park into perpetuity.

[42] I find the Applicants have not met their burden in proving the certainty of intention was met and therefore no trust was created. As the trust fails on this ground, I do not need to determine the issue of certainty of object.

The Decision of Township’s Council was Ultra Vires

[43] Within its factum, the Applicant’s argued that the decision to sell the park should be invalidated by this court as being ultra vires because it was not authorized by by-law. This was not included within the Notice of Application and took the Respondent by surprise.

[44] The Respondent relies on the decision of Molloy J., sitting as a single judge in the Divisional Court, in 2183164 Ontario Inc. v. Gillani, 2013 ONSC 1456, 114 O.R. (3d) 676 (Div. Ct.) for the proposition that allowing arguments to be raised that are not within the Notice of Application would result in procedural unfairness.

[45] In 2183164 Ontario Inc., the plaintiff had no notice that the issue would be raised and had no opportunity to provide material in response. In the case before me, although the argument was raised for the first time in the Applicants’ factum, the Respondent did not seek an adjournment, did not seek leave to file additional material, and the Respondent dealt with this issue in its factum. As a result, it cannot be said that there is any procedural unfairness to the Respondent if the court considers this argument.

[46] On August 8, 2022, the Township’s council passed a confirming by-law. A confirming by-law ratifies decisions that have already been made by council in which specific by-laws have not been passed. They are not unusual and have been upheld by the court as being lawful: see Jackson v. Vaughan (City), (2009), 55 M.P.L.R. (4th) 14 (Ont. S.C.). A confirming by-law only ratifies previous council decisions.

[47] The confirming by-law in this case was passed at the same meeting the sale of the Property was approved but before the sale was approved. It appears the Township’s council wanted to discuss the Property’s sale in a closed session. It therefore passed the confirming by-law, went into closed session, and then passed a motion to sell the Property. That confirmation by-law could not have ratified that decision.

[48] The Township has conceded that there is no specific by-law passed authorizing the sale. The Township takes the position the confirming by-law was sufficient. In the alternative, the Township relies upon a Delegation By-Law, dated February 2022, which delegated authority to the Clerk/Administrator to execute any documents needed to give effect to Council’s decisions during the lame duck period between the last council meeting and the municipal election. As the Agreement of Purchase and Sale was executed during this time period, the Township argues it was valid.

[49] Section 5(3) of the Municipal Act, 2001, S.O. 2001 c. 25 states that the powers of a municipality must be exercised by by-law, including the powers under s. 9 which grants the municipality the capacity, rights, powers and privileges of a natural person. “The powers conferred on a municipal corporation by the legislature are required to be exercised by council and council must exercise its power by by-law”: see Magical Waters Fountains Ltd. v. Sarnia (City), (1992), 8 O.R. (3d) 689 (Gen. Div. Div. Ct.).

[50] Without a by-law authorizing the decision to sell the land, I find the sale of the Property is ultra vires the authority of the Township. This cannot be saved by the Delegation By-Law which only provided the Clerk/Administrator the power to execute documents to effect Township decisions properly authorized.

Conclusion

[51] As a result of the above, I find that a charitable trust was not established by the Applicants and the Township holds the Property in fee simple. I further find that the decision to sell the Property was not properly authorized by by-law and is ultra vires. The Agreement of Purchase and Sale between the Township, Fred and Jo Ann Cox is therefore null and void. This, however, can be corrected by the Township with the passage of a by-law approving the sale.

[52] As there was mixed success on this application, there will be no order for costs to either party.

Justice J. Hooper

Released: February 24, 2023