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Notes (p. 400)
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Public policy generally reflects the ideals of the English judiciary: conditions held invalid are restraints on marriage, conditions encouraging divorces or separation, condition affecting parental duties, or restraints on alienation.
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Clayton v. Ramsden: Discrimination has not traditionally been a reason for voiding conditions.
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Re Noble and Wolf: The validity of discriminatory terms, draws a line between private choice and public policy and the concern expressed (Hogg. J.A.= not inventing new grounds of public policy).
Re Noble and Wolf Ont. C.A. 1949; 401; Condition NOT VOID for PUBLIC POLICY (racism).
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Facts: Noble purchased property for Saltier Co.. The S. Co. had subdivided larger tracts of land into 35 parcels intended for residential use. The conveyances made by the S co. contained a restrictive covenants that apply to the grantor, all heirs, assignees, and adminstrators. The restrictive covenants were to restrict the use of the lands and the character and location of the houses, but one covenant restricted sale/transfer/lease/rent of the premises to anyone who sis Jewish, Hebrew, Semitic, Negro or coloured race and blood and thus ownership, use, occupation and enjoyment is restricted to white or Caucasians only until Aug 1962 Bernard Wolf wanted to buy Noble’s land, and requested the vendor write up an order declaring the restrictive covenant void and no effect. Took notice to judge who stated that the restriction was valid and enforceable, and objection by purchaser stands.
Issue: 1 - Is a racist restrictive covenant void for being contrary to public policy? 2 – Is the clause void for uncertainty?
(Robertson C.J.O) 1 Racism NO - Purpose of the restriction is to assure that the summer colony are all residents who will get along well together. These people agreed amongst themselves that this is a matter for personal concern that affects only them and their property. Courts should recognize the impotence of laws forcing equality instead of its natural growth.
(Henderson) 1-2 NO/NO - 1 – Mrs. Noble is bound by her covenant, which is a contract, for another 15 years. 2 – Canadian census act places people in race categories, thus not void for uncertainty because % of blood is irrelevant. Person of “jewish blood” is understood by all.
(Hope) 1 NO 1 – Freedom of association is implicit to democracy, and it is unarguable that an association of land owners cannot freely associate as they wish through common covenants. Only unreasonable, unduly oppressive to the public will convenants will be voided by courts.
(Hogg) 1-2 NO/NO - Limitation test on public policy (not specifically a test, but he sets it out as such)
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Does the issue fall into a class concerning public policy that is already recognized in common law or statute?
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If no, then “harm to the public is not substantially incontestable,” then courts should not deal with public policy issue.
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Public policy rules should not be sought out in the rules of any other country or the United Nations Charter until the laws have been made part of the laws of Canada.
2 – The exact % of blood can never be ascertained, thus “race” is the ordinary and popular sence. Clause is not void for uncertainty.
Ratio: Public Policy evolves as a function of public opinion will determine if a clause is restricted based upon racism. Here the judges found that the covenants were not limited for racism or uncertainty.
Comments: Following this decision the Ont. Legislature amended the Conveyancing and Law of Property Act by adding a section that meant that restricting sale, ownership, occupation, or use of land because of race, creed, colour, nationality, ancestry or place of origin of any person was void and of no effect.
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Overturned by SCC on a technicality.
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Re Canada Trust Co. and Ontario Human Rights Commission; Ont. C.A. 1990; 401 - condition VOID for PUBLIC POLICY: (Racist requirements of a charity trust) DEFITION OF “PUBLIC POLICY”
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Facts: Rueben Leonard indentured his $ in trust to Canada trust for scholarships based upon White race as superior, maintenance of Christian religion, independence, stability and prosperity of the British Empire based upon birth and education of selected children – thus all who are not Christians of White Race, all who are not of British National or of British Parentage, and all who owe allegiance to any Foreign Government, Prince, Pope or Potentate and who recognize any such authority are excluded. Students must be protestant! Preference given to children of school teachers, clergy, CF members, RMC graduates, members of Eng. Institute, and members of mining institute. Female students get ¼ of male students.
Issue: 1 – Is the trust void in whole or in part because it is (1) uncertain or it (2) violates public policy? [NO/YES]
(Tarnopolsky J.A.) – NO/YES
Charitable Trusts: must have four purposes: Relief of poverty, advancement of education, advancement of religion, or another purpose enunciated by the courts. Must satisfy three conditions: It must have an object that is one of the purposes, its purpose must be wholly and exclusively charitable, and it must promote a public benefit. To satisfy public benefit: it must be beneficial and not harmful to the public and its benefits must be available to a cross section of the public (nexus between each of the beneficiaries and the settlor). All tests are met here (benefit is available to a sufficiently wide cross section of the public).
1 – Not uncertain. The clause is not uncertain as it is a condition precedent (no gift is intended until the condition is fulfilled) and here the proposed beneficiary’s are not a sufficiently certain as students over six decades. (Perhaps only the allegiance part is uncertain and thus can be severed).
2 – Against public policy. Public policy is determined through reference to a variety of courses, including prov. And fed. Statutes, official declarations of government policy and the Constitution. Public policy against discrimination is reflected in the anti-discrimination laws of every jurisdiction in Canada.
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Clearly this charitable trust on the ground of public policy to the extent that it discriminates on grounds of: race, colour, nationality, ethnic/religious origin, and sex.
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Affirmative action in Trusts: Trusts that are restricted to visible minorities, women, or other disadvantaged groups must be evaluated on a case by case basis and should have their validity challenged.
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This case should not be taken as authority for the proposition that all restrictions amount to discrimination and are therefore against public policy.
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Trusts to promote education of women, aboriginal peoples, physically or mentally handicapped, historically disadvantaged, financial need, bilingualism and multiculturalism (so restrictions on language) would not be void.
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All above would still have to go through an analysis of the context, purpose, and effect of the restriction.
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This decision only affects charitable trusts and not private, family trusts. Only where the trust is a public one devoted to charity will restrictions that are contrary to the public policy fo equality render it void (due to the preferential treament given to trusts as they are a benefit to the community.
Robins: 1 - Given the conclusion below, it is not necessary to decide if the trust is invalid by uncertainty or if other educational scholarships contravene public policy – no others go so far as to discriminate (colour and religion).
2 - Two premise of the document establishing the trust. 1 – That the white race is best qualified by nature to be entrusted with the preservation, development and progress of civilization along the best lines, and 2 – that attainment of world peace and advancement of civilization are best promoted by the education of students of the white race, British nationality, and Christian religion (protestant form).
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To keep such a trust that imposes such restrictive criteria on the basis of discriminatory notions is not conducive to public interest.
Ratio: Public policy is to be invoked only in clear cases where harm to the public is substantially incontestable, (based on documentary and institutional evidence (Prov/fed statutes, and constitution). Here harm to the public was found. Discrimination is permissible in private or family trusts…this only applies to Charity trusts.
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Fox V Fox Estate 1995: [423] Testator leaves his widow and executor 75% of his estate – with power to use capital for grandchildren, what is left is to go to his son Walter. Walter has two children by first marriage, then decides to marry again in 1989 to a non-jewish woman. Widow does not like, and uses power of encroachment to her grandchildren all estate residue. Galligan J.A. cites Canada Trust and finds that it is now against public policy to discriminate on grounds of race or religion. Rowan’s Important Note: This is now bringing the Canada trust limitations into private family trusts! If a settlor cannot dispose in a fashion that is racist, then it seems to follow that public policy also prohibits a trustee from exercising her discretion for racial or religious reasons. Any court today would not uphold a condition in a will which provides that a beneficiary is to be disinherited if he or she marries outside of a particular religious faith.
Re Rattray 1973 Ont. Sup; 421; Condition for for uncertainty; Socialist requirements from trust banned.
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Facts: 13 million left to Queen’s University on condition that $ was not given to “communists, socialists, or “a fellow traveller.”
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Struck down for uncertainty who is “a fellow traveller?”
Ratio: Void for uncertainty
Letter writer to the Globe & Mail: The uni had no problems taking the money before he died, but afterward they find it proper to alter his conditions which he never would have given money to in the first place if they were changed. Now his $ is available to persons whose political philosophy he hates! Could ask the students the following: can you in conscience subscribe to its intent in accepting the scholarship.
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This is the beginning of Courts interpretations of condition in favour of beneficiary:
Re Hurshman 1956: The settlor to inheret the property, only “provided she is not at that time [the time the property took effect] the wife of a Jew. She marries someone who the parties agree is “lay jewish.” McInnes J. holds condition is contrary to public policy because “in order for the daughter to inherit she must divest herself of her husband.
Re Ramsden Estate 1996: Bequest to university to create bursaries or scholarships awarded to “protestant students.” Court finds that the university was barred from administering the fund due to a “religious test,” but that another body could administer the test to achieve the same purpose. The court allowed the trust, the court held that it was not contrary to public policy in that is was distinguishable from Leonard Foundation on the basis that Leanard’s goal was “blatant religious supremacy and racism.” There was no basis in this case – thus motive of the testator plays a role.
University of Victoria v. The Queen 2000: Woman leaves money to UVic for bursaries. One is for a practicing Roman catholic student in education, and the other is for “a Roman catholic student” in music. Court finds 1 – It did not violate the Human Rights Code of the province because the trust fund did not constitute a public relationship between the University and the public. The Uni was simply a trustee appointed by a private citizen in a private bequest So private trust. 2 – Citing Canada Trust the doctrine of violating public policy should only be invoked “in clear cases.” Leonard was offensive and distinguishable for this trust. Restricting the trust to a class of recipients who are members of a particular religious faith does not offend public policy. – Unsure if this is motive.
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