Perpetuities
Continued From Page 9
The former states that no
legal interest in property is valid
unless it is certain at the time
when the trust or other dispos-
ition takes effect and that the
interest must vest within a life or
lives in being plus 21 years. “In
other words,” the report stated,
“property may not be tied up in
trust, subject to restricted use, or
otherwise held subject to any
contingency, for longer than
twenty-one years after the death
of a person who is alive at the
time of the disposition and whose
life is relevant to the validity of
the disposition.”
Issues also arise over the
nature of the property interests.
“It is not always clear whether a
future interest is vested or con-
tingent, nor why the lines
between them are drawn as they
are,” the report pointed out. “A
remainder interest following a
life tenancy is considered to be
vested, but an interest held in
trust during the life of the current
occupant is not.”
The authors also found the
rule is marked by a series of
exceptions that depend in many
cases on very subtle distinc-
tions in language. For example,
they said, it is difficult to deter-
mine the difference between
conditions subsequent, which
are bound by the rule, and
determinable fees, which are
not bound.
“
The law reform commission...believes abolition
is the best course of action—and that abolishing
the rule of perpetuities should be retroactive.
Rule, including all of its exceptions and partial exceptions, and
a thorough canvassing of all
remote and unlikely possibilities
of lifespan and life events of all
possible ‘lives in being’ and their
offspring, can the drafter have
confidence that perpetuities
problems have been avoided,” the
report writers concluded.
The rule made sense in its
original context, noted Gibbon.
unreformed rule of perpetuities
on the books. “Most other juris-
dictions have adopted a wait and
see rule. We don’t even have that
in Nova Scotia.”
The law reform commission
is not recommending that
option for the province. It
believes abolition is the best
course of action—and that
abolishing the rule of perpetu-
ities should be retroactive. “The
experience of the courts under
variation of trusts legislation
strengthens our impression that
a case specific approach to the
problem of unvested, contin-
gent property interests is pref-
erable to a categorical rule
which deems all such interests
void after a certain period of
time,” the authors stated.
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Invalidity of condition may result in failure of gift
Discrimination
Continued From Page 9
criteria were not clear enough.
However, things may be
changing. In Murley Estate v.
Murley [1995] N.J. No. 177, the
court struck a religiously
restrictive condition, observing
(without explanation) that it
was against public policy. In
Fox v. Fox Estate [1996] O.J.
No. 375, Justice Galligan cited
an Ontario Court of Appeal
charitable trust decision, Can-
ada Trust Co. v. Ontario Human
Rights Commission [1990] O.J.
No. 615, for the proposition that
discrimination is against the
trust law doctrine of public
policy. There is also an emer-
ging body of academic scholar-
ship arguing against the
enforcement of discriminatory
trust conditions.
Adam Parachin is an asso-
ciate professor at the Faculty of
Law at the University of
Western Ontario.
We want to hear from you!
Email us at: tlw@lexisnexis.ca
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