In Heritage Capital Corp. v. Equitable Trust, 2016 SCC 19, the Supreme Court considered whether incentive payments (to compensate for designation as an historical resource) constitute positive covenants running with land, either under legislation (s. 29 of the Alberta Historical Resources Act) or by contract (between the building owner and the city of Calgary). The court found that the common law rule that positive covenants do not run with the land was not displaced by the narrow exceptions listed in the HRA, nor did the incentive agreement reveal an intention that the payments would run with the land. As noted in this McInnes Cooper commentary, the case highlights the need for both municipalities and subsequent property purchasers to scrutinize development agreements involving such covenants carefully. The case also confirms that the applicable standard of review for contractual interpretation is the more rigorous palpable and overriding error, not correctness.

Section 8 of the Interest Act, read purposively, applies both to discounts (incentives for performance) as well as to penalties for non‑performance whenever their effect is to increase the charge on the arrears beyond the rate of interest payable on principal money not in arrears, according to a divided Supreme Court in Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18. Parliament clearly intended that mortgage terms guised as a “bonus”, “discount” or “benefit” would not as such comply with s. 8. Substance, not form, is to prevail. What counts is how the impugned term operates, and the consequences it produces, irrespective of the label used. If its effect is to impose a higher rate on arrears than on money not in arrears, then s. 8 is offended. (para. 25) These articles discuss the implications of the decision for mortgage lenders and real estate practitioners: Rate hike on mortgage in arrears slapped down by Supreme Court - Court’s 6-3 ruling significant for real estate, insolvency bars – Lawyers Weekly It’s Substance Over Style: The SCC Clarifies Permissible Structuring of Interest Provisions under s. 8 of the Interest Act in Krayzel Corp v Equitable Trust Co. - McCarthy Tétrault Penalty/Relief – Two Sides of the Same Mortgage Interest Coin When it Comes to Offending S. 8 of the Interest Act? – Lawson Lundell

In Russell Inns Ltd v Manitoba, 2016 MBCA 43, the court dismissed the Province’s appeal of a Land Value Appraisal Commission decision certifying compensation for injurious affection caused to the respondent’s land as a result of a partial expropriation. The court rejected the Province’s argument that the Commission should have preferred the larger parcel theory put forward by its appraiser in determining what constituted the “remaining land” under s. 30(1)(a) of The Expropriation Act. “Methodology is a question of fact, and decisions as to methodology are directly within the expertise of the Commission,” said the court, and “deference should be accorded to the Commission’s decision.”

In Timm v. Rudolph, 2016 MBQB 123, the court considers just how much latitude a judge should give when exercising the dispensation power under s.23 of The Wills Act (to admit a will to probable which does not meet all of the formal requirements) in the face of opposition to the application. In this case, the court declined to admit to probate the signed and endorsed notes of the articling student who took instructions from the dying testatrix, since there was no evidence the testatrix intended that the notes would operate provisionally until a more formal will was prepared. The court acknowledged the unfairness resulting from the decision (in which the natural daughter of the testatrix lost out to the estranged daughter of the testatrix’s husband), but noted that the limited interpretation of s. 23 outlined in George v. Daily, (1997), 115 Man. R. (2d) 27 (C.A.) must be respected.

In Garwood v. Garwood Estate, 2016 MBQB 113, the court denied a son’s application to revoke the grant of probate he had been granted for his mother’s will. The will provided that the son and his wife were to share in the residue of the estate provided that they were residing together as husband and wife on the date the testator died. The daughter-in-law left the marriage several months after probate was granted and declared bankruptcy after filing an application seeking payment of her portion of the estate. The litigation was continued by her trustee in bankruptcy. The son (whose interest in the outcome made his credibility suspect) argued, among other things, that his mother could not have read and approved of the will as she was blind and because it contained errors she would not have approved of; that there were suspicious circumstances negating the presumption that she had the requisite knowledge for a valid will; and that the bequest to the residual beneficiaries was ambiguous. Although the court had concerns about the circumstances surrounding the preparation of the will and the evidence concerning its execution, in the end it was satisfied that the testator knew and approved of its contents and the will was therefore found to be valid.

Section 46(2) of The Builders’ Liens Act does not mandate an exclusive process by which a certificate of substantial performance is issued according to the court in Bukhari v. Mannington Custom Homes Ltd., 2016 MBQB 96. “While s. 46(2) does require the owner to issue a certificate of substantial performance where certain statutory conditions are satisfied and the contractor requests the certificate, there is nothing preventing the parties from deciding to create a valid certificate of substantial performance by following a different process.” In this case, where two certificates had been issued, the builder was unsuccessful in arguing that the earlier certificate was invalid because it was requested by the owner (for financing purposes) and not the contractor, and because the owner never signed it. The court found that the earlier certificate was valid and that the lien was therefore filed out of time.

The mother and committee of a 40-year-old handicapped daughter (the recipient of a court ordered structured trust settlement and government benefits) was denied leave to bring a constructive trust claim seeking damages for inadequate support from the father in Hardt (Committee of) v. Hardt, 2016 MBQB 86. The mother argued that the claim raised a novel argument that parents of handicapped adult children should be required to accept financial responsibility for their children in amounts greater than those provided for in the Divorce Act or The Family Maintenance Act, and that a gap in the legislation precludes this. The court disagreed, finding “no reasonable grounds justifying the continuation of the “doomed to fail” trust litigation (para. 51). According to the court, the common law has never recognized an obligation by parents to care for disabled adult children and, as a matter of social policy, allows them to rely on government resources to assist them with the higher costs of such care.

The Manitoba Law Reform Commission released its paper on Indefeasibility of Title and Resulting and Constructive Trusts on May 5, 2016. The paper examines whether resulting and constructive trusts can be recognized by courts in Manitoba notwithstanding s. 59(1) of The Real Property Act, or, alternatively, whether the principle of indefeasibility of title expressed under s. 59(1) of the Act effectively trumps these equitable interests in real property. It provides an overview of the Torrens system of land registration, the concept of indefeasibility of title, and the nature of resulting and constructive trusts, and discusses recent Manitoba cases as well as decisions from other jurisdictions.

"Hidden" Property Tax Liability on Certain Farm Realty – in this Pitblado Law post Ned Brown advises those reviewing possible farmland purchases to determine the "status" of the land under The Manitoba Municipal Assessment Act, because the Act provides for a lien against the farmland to secure the required property tax payback, and such lien will follow the farmland into the hands of successive owners. Road Closure Dispute Could Redefine Municipal Board’s Jurisdiction – this Aikins Law article discusses a recent case in which leave to appeal was granted to consider the extent of the Municipal Board’s jurisdiction concerning inter-jurisdictional road disputes. Succession Will, Estate and Tax Planning - this Rotfleisch & Samulovitch PC article summarizes the issues affecting income tax succession and estate planning in Canada. Think of Charities in Your Will – this Aikins Law article discusses the benefits and tax advantages of making charitable gifts by will. Controlling the housing bubble – the author of this Lawyers Weekly article questions the wisdom of using foreign investment laws to regulate real estate acquisitions by non-Canadians. The Parameters Of Municipal Power: Supreme Court Of Canada Decides Municipality Can't Block Radiocommunication Tower Construction In Rogers Communications Inc. v. Châteauguay (City) – this publication discusses the recent SCC decision in Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, in which the court limited the municipality’s authority to dictate the location of telecommunications towers. Heavy duty – this Lawyers Weekly article summarizes the duties of executors and POAs and stresses the importance of honesty and detailed record keeping when acting in these roles.

The CPD Replay schedule is now posted on the LSM website. If you missed attending one of these popular programs the first time around, replays are a cost effective way to catch up on your CPD hours during the slower paced summer months. Find a program and date that works for you, with a wide variety of programming topics offered from July 18 to August 10, 2016. Don't see a time that fits your schedule? These DVDs are available for purchase and can be viewed at your own convenience.