THE LAWYERS WEEKLY
April 8, 2011 | 9
Human rights and trusts
Dealing with testators’ discriminatory trust conditions
ADAM
PARACHIN
Human rights may at first
seem to have very little to do
with trusts and estates — an area
more known for technical and
bewildering doctrine than progressive social policy. But there
exist some potential points of
contact.
Regulating testamentary
freedom has been a perennial
theme in trusts and estates law.
Rules against perpetuities and
accumulations limit the reach of
the “dead hand” by controlling
the period of time throughout
which testators may control
property. But there are also
qualitative limits on the freedom of testators to condition
beneficial interests in trusts in
ways that contradict public
policy.
Testators often draft into
trusts conditions that limit the
circumstances in which trust
property may be distributed to
beneficiaries. These conditions
are usually innocuous, such as
conditions that delay vesting
until the beneficiary attains a
particular age.
However, from time to time,
testators test the boundaries of
testamentary freedom. They
may require beneficiaries to
practise (or not practise) a par-
ticular religion or prohibit bene-
ficiaries from participating in
certain relationships — for
example, interracial, interfaith
or same-sex marriages. These
kinds of conditions raise com-
plex questions on the relevance
of human rights norms to trusts
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and estates law.
The guiding principle is that
trust provisions contrary to public policy are void. Not surprisingly, the precise scope of the
public policy doctrine is unclear.
While conditions requiring a
beneficiary to perform an illegal
act or get divorced have consistently been struck on public
policy grounds, the status of discriminatory conditions is less
clear under current law.
In Blathwayt v. Baron Cawley [1976] A.C. 397 (H.L.), Lord
Wilberforce famously concluded
that “discrimination is not the
same thing as choice” and that
“private selection [has not] yet
become a matter of public
policy.” Consistent with this
view, religiously restrictive conditions in trusts have been
upheld in case after case.
Even where such conditions
have been struck, courts have
tended not to rely exclusively (or
even at all) on the discriminatory character of the condition
as the basis of invalidity. Emphasizing the need for certainty in
property transactions, courts
have in many cases struck discriminatory conditions on the
ground that the exclusionary
See Discrimination Page 14
NS commission recommends
abolishing perpetuities rule
DONALEE MOULTON HALIFAX
The end is in sight for Nova
Scotia’s rule of perpetuities. The
province’s law reform commission
has officially recommended its
abolition. In its place, the commission would like to see the courts be
given new and expanded powers.
There are two main reasons
for the recommendation. First,
said Angus Gibbon, legal
research counsel with the Law
Reform Commission in Halifax,
“it’s an extremely complex rule.
That complexity creates enor-
mous problems.”
Among those problems is
what the commission’s final
report, The Rule Against Perpetu-
ities, calls a “preoccupation with
remote hypotheticals.” The auth-
ors noted that, “In order to be
certain, at the time when the
disposition is effective, that the
interests it creates are valid, all
contingencies possible as of that
time must be canvassed. If one of
them results in an interest vest-
ing beyond the perpetuity period,
or not at all, the disposition is
void at the outset.”
That is the second primary
reason why the commission is
recommending abolition. “The
effect of the rule is to deprive
people of property interests,” said
Gibbon. “What creates that effect
is often unintentional.”
The complex and abstract
nature of Nova Scotia’s rule of
perpetuities poses practical prob-
lems for lawyers and their clients,
an issue raised in the report. The
rule, it is noted, “results in a sub-
stantial risk that beneficiaries or
grantees will be deprived of their
interests through inadvertent
errors in drafting.”
Further compounding these
problems posed by the rule, which
limits the duration of certain
restrictions on the use and trans-
fer of property, is the concept of
identifying a “life or lives in being,”
as well as the not-always-clear
distinction between vested and
contingent property interests.
