eLaw - Property & Succession Update

February 2014 - No. 68

ISSN 1916-3894

In This Issue

Judgment Assignee Not Entitled to Assignment of Tax Sale Certificate: MBCA

Right to Act as Executor Not Absolute: MBCA

Builders' Liens Act Doesn't Displace Common Law Remedies: MBCA

Other Appeal Decisions

Legal Description Error Complicates Property Purchase and Results in Trial: MBQB

Unexplained Estate Freezes and Divestitures Risky: MBQB

Cost Sanction for Wilful Behaviour in Delaying Estate Finalization: MBQB

Veto Right Decision Stands

Recommended Reading

Upcoming CPD Programs: LSM

MBA Program

STEP Programs

Judgment Assignee Not Entitled to Assignment of Tax Sale Certificate: MBCA

In Daylight Capital Corp. v. Winnipeg (City) et al., 2014 MBCA 17, the appeal court confirmed the City's position that it was acting in accordance with the provisions of s.385(3) of the

City Charter when it refused to transmit a tax sale certificate to the assignee of a judgment because the assignment was not evidenced by a certificate of judgment against the title to the property. Neither a judgment nor an assignment, by themselves, create an interest in, or charge on, land, said the court. Rather, "(i)t is only a certificate issued by the court, as evidence of the validity of a judgment or of an assignment, which is a registerable instrument in the Winnipeg Land Titles Office as contemplated by the legislation." (para.25) The court rejected the assignee's argument that the lack of clarity in The Judgments Act ( s.8(2) addresses priority of registration for judgments but does not deal with assignments) should mean that there was no need to file a further certificate after assignment. Were that the issue in the case, the court said, it "would adopt the argument advanced by Winnipeg that the filing under s. 3(2) of a certificate of judgment after an assignment is a recognition of the transfer of the original judgment to a new party and the legal consequences that flow from it. However, until that registration, equitable notice provisions do not supplant the requirements under the RPA and the Torrens system." (para.29)

Right to Act as Executor Not Absolute: MBCA

Where a beneficiary/executor's "actions in advancing his beneficial interests result in him failing in his duty as an executor and trustee to put the interests of the trust and other beneficiaries first, his own interests have come into conflict with those of the trust and he may...be removed as executor in favour of another executor who can act in a neutral manner," according to the court in Bereskin Estate, Re, 2014 MBCA 15. While the court will not remove a testator-chosen executor lightly, in this case the appellant had crossed the line and the court found that the motion judge made no palpable error in concluding that it was necessary to remove him to protect the estate.

Builders' Liens Act Doesn't Displace Common Law Remedies: MBCA

The motion judge erred in declaring that the general contractor of the new football stadium satisfied its trust obligations by filing a lien bond in court in the full amount of the subcontractor's lien and could disburse progress payments without breaching the trust provisions of The Builders' Liens Act according to the court in Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel, 2014 MBCA 8. Section 56 of the Act clearly states that the lien bond stands in place of the land, not in place of the lien, said the court, and "the Act and the jurisprudence interpreting it make clear that rights given to a subcontractor, pursuant to the trust provisions found in ss. 4-9, and the right to claim a lien upon the property in respect of which the contract work was done, provide two potential remedies separate and distinct from one another and beyond the mere common law right to sue for breach of contract." (paras. 37-38)

Other Appeal Decisions

The Armstrong's Point Association lost another appeal in its quest to quash the conditional use and variance orders allowing Westgate Collegiate to obtain a development permit to expand its facilities in The Armstrong's Point Association Inc. v. The City of Winnipeg et al., 2013 MBCA 110. The Court of Appeal found that the reviewing judge showed deference to the tribunal's interpretation of its own statute and zoning by-law and concluded that "in the context of administrative law, there is no legal error if (the decision) is reasonable."

1984 Enterprises Inc. v. Strider Resources Ltd. et al., 2013 MBCA 100 - the appeal court upheld a contempt order and $10,000 fine against a corporation and its director for the surreptitious removal of materials that were the subject of a lien from a mining site.

Legal Description Error Complicates Property Purchase and Results in Trial: MBQB

The court declined to grant specific performance on a summary judgment basis in Vend-All Marketing Inc. v. Hunter et al., 2014 MBQB 11, finding that the complex triable issues outstanding in the case should not be determined by way of affidavit evidence. At play in the court's decision were the complicated and interrelated facts of the case, the significant time lapse since the initial flawed offer to purchase and the corresponding alterations in the market, the fact that both parties had changed positions and were seeking to amend their pleadings, and the fact that the court would have to rule on whether the property's uniqueness justified an order of specific performance. The court did allow both sides to amend their pleadings/withdraw admissions, in order to facilitate the placing of all triable issues before the trial court.

Unexplained Estate Freezes and Divestitures Risky: MBQB

In Hamm v. Hamm (Estate of), 2014 MBQB 14, a farm wife who was not informed by her spouse that he had divested himself of the family farm assets by an estate freeze and share divestiture several years before he died was successful in her bid to have the assets included in an accounting and equalization pursuant to the Family Property Act. The court found that the farmer had made an excessive gift when he gave preferred shares worth $179,000 to his sons, stripping the entire farm operation of its assets and leaving his wife with almost nothing.

Cost Sanction for Wilful Behaviour in Delaying Estate Finalization: MBQB

In Estate of Catherine Davediuk, 2013 MBQB 307, the court ordered two beneficiaries who willfully delayed finalization of an estate and refused to sign a release dispensing with a formal passing of accounts to bear the costs of both the passing of accounts and the renewal of the administration bond. In the court's view "the actions or lack thereof of these two beneficiaries constitute the type of "rare and exceptional" circumstance where solicitor and client costs ought to be required to be paid by the offending beneficiaries."

Veto Right Decision Stands

The Supreme Court of Canada dismissed the application for leave to appeal Chartier v. MMP Ltd, 2013 MBCA 41, the Manitoba Court of Appeal decision finding that the right of a non-owner spouse to withhold consent to a disposition of a homestead falls within the definition of property in s. 2 of the Bankruptcy and Insolvency Act and vests in the trustee upon an assignment in bankruptcy.

Recommended Reading

B.C.'s new Wills, Estates and Succession Act (passed September 24, 2009) will come into force March 31, 2014, consolidating and modernizing several pieces of legislation dealing with wills, estate administration and probate. Some of the many changes are discussed here, including a reference to the controversial new s.58, which some argue is broad enough to allow judges the discretion to admit email wills.

Real Estate Broker's Failure to Disclose That It Was Acting for Both Buyer and Seller Results in Forfeit of Nearly $18,000 Commission - this Slaw post discusses an Ontario case in which a broker who failed to disclose his dual agency status in breach of the listing agreement was disentitled to commission on the aborted sale.

Defaulting Purchasers Lose their Deposits, Even in Rising Real Estate Markets - this article from The Court questions the continuing relevancy of the traditional real estate principle that defaulting purchasers lose their deposit regardless of the impact of the breach on the vendor.

Statutory Wills - this report of the Uniform Law Conference of Canada working group reviews the law on statutory wills for persons without testamentary capacity and considers the case for changes in this area.

Upcoming CPD Programs: LSM

The always popular 2014 Annual Hot Topics in Real Estate program will be held twice this year, on April 28, 2014 and May 7, 2014. Among the topics to be covered by presenters Jeff Shypitt, John Neufeld, Q.C., Russell Davidson, and Faron Trippier are: litigation notes for solicitors, easements and foreclosures, and title insurance. Register soon to ensure you get your preferred date.

The next session in the Leadership Skills series, Resilience and Embracing Change focuses on change management. It is designed to help lawyers manage the people side of change and support themselves and their staff through transitions. It takes place February 7, 2014, from 9:00 a.m. to 3:00 p.m. at the Law Society classroom. Presenters Judy Mathieson and Denise Zaporzan will also host upcoming sessions in the series: Generational Diversity: Maximize Performance Throughout Your Organization (March 14, 2014), and Presenting With Confidence (May 29, 2014). Register for more than one session and save money.

MBA Program

The Real Property Law section of the MBA is hosting a program on insurance considerations for owners, tenants and security holders on February 13, 2014. Speaker Bruce Mazur will discuss how lawyers can best accommodate their clients' needs by understanding what insurers can (and cannot) provide and by "asking the right questions" of insurance agents, brokers and consultants. The meeting starts at 5:00 p.m. at the offices of Pitblado LLP.

STEP Programs

Upcoming programs from the Winnipeg branch of the Society of Trust and Estate Practitioners (STEP) include: US Cross Border Issues (February 18, 2014), Charitable Giving Strategies, with Leilani Kagan (March 20, 2014), and Testamentary Trusts, with Paul Prendergast (May 13, 2014).

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