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Creation of a Charitable Trust of a Park

1. Introduction

Well-meaning property owners regularly leave land to a municipality with the intention that it be held in trust for a park or other public uses. This is a laudable object and can be effective, provided that the landowner and its legal advisors dot all the i’s and crosses all the t’s. That did not happen in the recent case, Friends of Nellie Lunn et al v Township of Wollaston.[1] Caveat actor!

2. Facts

The testator, Boleslaw Klincewicz made his will in 1981 and died later that year. In the will he devised a parcel of land to the Township of Wollaston ‘for the purpose of a Park, and I direct that such Park shall be called the “Nellie Lunn Park”’. He appointed his friend, Nellie Claus (also known as Nellie Lunn) executor. She executed the deed transferring the property to the Township ‘in fee simple’, and  the Township Council authorized the Clerk to pay a law firm to the deed registered in the Township’s name. The minutes of the meeting stated that the property had been given to the Township for a park and future recreational facilities

Subsequently an informal social group sought to promote development of the park and three of its members formed ‘The Friends of the Nellie Lunn Park Inc (‘FONL’) with the same goal.

In 2020 the Township voted to close the park during the hunting season, and in 2021 it voted to close the park to the public altogether. Then, in 2022 it passed a motion resolving that the property be sold by public tender. The highest tender was from adjacent property owners, and it was $100,000 more than the tender from the FONL. In August the Township Council resolved to sell the property to the highest bidders, and authorized its officers to do what was necessary to complete the sale.

The FONL and a resident in a neighbouring township brought this application, claiming that the Will created a charitable trust of the property and that the Township held the property as trustee. The parties agreed to a consent order to delay the sale until the court decided the matter.

3. Analysis and Judgment

Justice J Hooper rightly began the analysis by discussing the legal requirements for creating a trust. These are: (a) the declaration must satisfy the three certainties of intention, subject-matter, and objects; and (b) the trust must be constituted by transfer of the property to the trustee.[2] These requirements apply equally to private and charitable trusts, although with respect to the certainty of objects, the objects of a charitable purpose trust are purposes, not persons.

The Township argued that there was no certainty of intention or of objects. The court concluded that there was no certainty of intention and therefore did not have to consider the issue of certainty of objects.

Justice Hooper noted that to create a trust, the use of the word ‘trust’ does not of itself create a trust; nor does its absence mean that no trust has been created. But to determine whether the testator intended to create a trust, he must use language indicating that he intends the recipient to hold the property in trust.[3]

In considering the language used and the surrounding circumstances at the time the testator made his will, the court considered a number of cases in which testators had given property to a municipality for the establishment of a park or another municipal purpose. In some the courts found that the language, bolstered by the surrounding circumstances, showed a clear intention to create a trust. In others they found that there was no clear intention to do so. If the language of gift simply specifies the intended use of the property, it is unlikely that a trust is created.[4] On the other hand, if such language is buttressed by prior correspondence with the municipality in which its officials state that the property will be very appropriate for the intended purpose, the court may conclude that a trust is created.[5] Further, if the deed conveying the property states that the property is given to the grantee for its use only so long as it is used for a public park and the grantee covenants to use it solely for that purpose a trust will have been created.[6] In contrast, if the deed does state that the property is to be used for a public park but in fact conveys the full fee simple to the municipality, there will be no trust.[7]

Having considered these and other cases, Justice Hooper found that there was no evidence of circumstances leading up to the execution of the will. Nor was there any evidence that the Township accepted the conveyance of the land on the basis that it would have to hold and maintain it as a public park in perpetuity. Therefore the court held that the Applicants did not meet the burden of proving intention to create a trust. Consequently the requirement that the trust be constituted was also not satisfied.

The court then went on to consider whether the decision of the Township’s Council was valid. It held that the decision was ultra vires because it was not made by by-law as required by statute.[8] Instead, it passed a resolution that the property be sold, and then it entered into an agreement to sell the property. The Council did pass a confirming by-law. However, it passed that by-law in the same meeting in which it approved the sale but before it passed the motion to sell the property. Thus, the confirming by-law could not have ratified the subsequent decision. However the Township could rectify the problem by passing a by-law confirming the sale.

[1]    2023 ONSC 1327.

[2]    There is also a third requirement for a testamentary trust, namely that it is contained in a will that satisfies the formalities for a will. That requirement was obviously satisfied.

[3]    Citing, Tillsonburg Scout Association v Scouts Canada, 2020 ONSC 747, para 30; Rubner v Bistricer, 2019 ONCA 733, para 53; and Byers v Foley (1993), 16 OR 3d 641 (Gen Div).

[4]    See, e.g., Powell v Vancouver, 1912 Carswell BC 1361 (SC), affirmed 2012 CarswellBC 226 (CA).

[5]    See, e.g., West Vancouver (District) v British Columbia (Attorney General), 2020 BCSC 966.

[6]    See, e.g., Save Our Waterfront Parks Society v The City of Vancouver, 2004 BCSC 430.

[7]    See, e.g., McLeod v Town of Amherst (1974), 44 DLR 3d 723 (NSSC App Div).

[8]    Municipal Act, 2001, SO 2001, c 25, s 5(3).


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