THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2005 SKCA 120 Date: 20051014 Between: Docket: 1007 James Edward Little in his personal capacity and in his capacity as Executor of the estate of Mildred G. Little, deceased and Sandra Lee Nelson and Leslie Sharon Gallagher Respondents Coram: Sherstobitoff, Richards Smith JJ.A. Counsel: Lyle O. Phillips for the Appellant David R. Barth for the Respondents Appeal: From: 2004 SKQB 310 (CanLII) Heard: September 12, 2005 Disposition: Appeal Dismissed Written Reasons: October 14, 2005 By: The Honourable Mr. Justice Sherstobitoff In Concurrence: The Honourable Mr. Justice Richards The Honourable Madam Justice Smith SHERSTOBITOFF J.A. [1] On October 4, 1982, Mildred Little made will naming her only son, the appellant James Little, executor. She made few specific gifts and then left her home to her son, and divided the residue of her estate between her two daughters, the respondents Sandra Nelson and Leslie Gallagher. [2] In the 1990’s Ms. Little transferred title to the house to the names of herself and the appellant jointly. She also transferred some bank deposits of various kinds of total value of $57,056.36 into the joint names of herself and the appellant, and designated him the person to receive payments under Registered Retirement Income Fund owned by her of value of $29,508.55. The appellant gave no consideration for these transfers and the designation. He had no access to these assets during the life of Ms. Little. [3] When Ms. Little died on August 12, 1999, the appellant took the position that the bank deposits and the proceeds of the RRIF did not pass under the will but were given to him for the benefit of Ms. Little’s grandchildren, great-grandchildren and himself, and he in fact paid about $45,000 to the grandchildren and great-grandchildren, but nothing of those funds to his sisters, the residuary beneficiaries named in the will. The sisters brought action against the appellant claiming that the funds were a part of the residue of the estate and obtained a judgment to that effect as well a judgment against the appellant for the amounts they, as the residuary beneficiaries, should have received. This appeal is against that judgment. [4] The appellant, in his factum, raised these issues: Did the trial judge err in law in failing to consider the effect of section 75 of The Queen’s Bench Act, 1998, S.S. 1998, c. Q-1.01 upon the Respondents’ claim to the RIF? Did the trial judge err in mixed law and fact in finding that the joint bank and investment accounts were subject to resulting trust in favour of the residue of the estate? Did the trial judge erred in law in failing to consider the application and effect of section 57 of The Trustee Act, R.S.S. 1978, c. T-23, which gives courts discretion to relieve trustees of liability, in whole or in part, for technical breaches of trust where trustee acted honestly, reasonably, and where it is fair to excuse the breach? [5] preliminary issue is whether the appellant should be allowed to raise and argue issues one and three since they were not raised, argued, or dealt with in the court below. Cameron J.A. of this Court made an order allowing the appellant to amend his Notice of Appeal to include these grounds, but made the order without prejudice to the respondents’ ability to contend on the argument of the appeal that neither issue should be entertained because each gives rise to an entirely new argument on the appeal. The respondents did so contend. [6] As to the preliminary issue, there is general rule against raising an entirely new argument for the first time on appeal: Perka v. The Queen, 1984 CanLII 23 (SCC), [1984] S.C.R. 232, at p. 240 and Hawkeye Tanks Equipment Inc. v. Farr-Mor Fertilizer Services Ltd. et al. (2002), 2002 SKCA 44 (CanLII), 219 Sask. R. 148 (Sask. C.A.) at paras. [8] to [11], and the authorities cited therein. The rule, however, is not absolute. In this case, the respondents are not in any way prejudiced by consideration of the new issues since they do not involve the introduction of any new evidence, and they have had adequate time to prepare and present submissions respecting the new issues. The interests of justice are best served by allowing the issues to be raised. [7] The first issue raised in the appellant’s factum is that the trial judge erred in law in failing to consider s. 75 of The Queen’s Bench Act, 1998, S.S. 1998, c. Q-1.01, which provides as follows: 75(1) In this section: “carrier” means carrier as defined in section 146.3 of the Income Tax Act (Canada); («émetteur») “contract holder” means an individual who has entered into contract for retirement income fund with carrier; («titulaire») “retirement income fund” means an arrangement between carrier and contract holder that is defined to be retirement income fund by the Income Tax Act (Canada). («fonds de revenu de retraite») (2) Where, in accordance with the terms of contract for retirement income fund, contract holder designates person to receive payments under the retirement income fund in the event of the contract holder’s death: (a) the carrier is discharged on paying to the designated person the amount of the payments; and (b) on the death of the contract holder, the designated person may enforce payment of the amount payable, but the carrier is entitled to set up any defence that the carrier could have set up against the contract holder or the contract holder’s personal representatives. (3) contract holder may alter or revoke designation made under contract for retirement income fund in the manner set out in the contract for the retirement income fund. (4) This section does not apply to designation of beneficiary to which The Saskatchewan Insurance Act applies. [8] The appellant’s argument is misconceived. Section 75 does not apply to the case before us. It does not address the issue before the court below or this Court. The respondents have not, in the court below or in this Court, taken the position that the appellant is not the person entitled by law to receive the proceeds of the RRIF from the administrator of the fund and to give the administrator binding discharge. Accordingly, when the appellant received the money, the section was complied with and has no further application. The matter in issue both here and below is the capacity in which the appellant received the money. Did Ms. Little intend the appellant to receive it in his own capacity and for his own benefit? Or did she intend that he receive it as trustee upon an express trust to use it for the benefit of her grandchildren and great-grandchildren? Or did she intend that he receive it in his capacity as the executor named in her will to be distributed to the respondents in accordance with the terms of the will? Or since the designation was without consideration, was there resulting trust in favour of the estate? All of these possibilities were raised by the evidence, the judgment below and the arguments of the parties. These are the issues raised in the appellant’s factum as the second ground of appeal, and these are the issues considered and determined by the trial judge. Section 75 does not speak to them. [9] number of authorities were cited in relation to s. 75 and similar legislation: Baltzan Estate v. Royal Bank (1990), 1990 CanLII 7795 (SK QB), 82 Sask.R. 280 (Sask. Surr. Ct.); Clark Estate v. Clark, 1997 CanLII 22786 (MB CA), [1997] W.W.R. 62 (Man. C.A.); Fekete Estate v. Simon (2000), 32 E.T.R. (2d) 202 (Ont. C.J.); and, Amherst Crane Rentals Ltd. v. Perring (2004), 2004 CanLII 18104 (ON CA), 241 D.L.R. (4th) 176 (Ont. C.A.). These cases all dealt with the issue of whether creditors of the estate of deceased person had access to such funds when there was designated recipient. The answer seems to be no. But that was not the issue here. [10] The appellant, in his factum, stated the second ground of appeal to be that the trial judge erred in mixed law and fact in finding that the joint bank and investment accounts were subject to resulting trust in favour of the estate. [11] In this respect, the trial judge carefully reviewed the law respecting the presumption of advancement and the presumption of resulting trust. The appellant’s factum stated that he accepted the judge’s statement of law in its entirety. Accordingly it cannot be said that the judge erred in law. [12] The appellant further conceded in his factum that “none of the evidence supports the presumption of advancement”. Accordingly he conceded that none of the bank deposits and the RRIF were intended to be gifts to the appellant. He argued that the evidence indicated trust in favour of the grandchildren and great-grandchildren of the deceased rather than in favour of the estate. [13] The trial judge, in her reasons for decision, reviewed the evidence touching upon these matters in considerable detail. Her conclusions, which include the only findings of fact set out in her reasons, are as follows: [38] am satisfied that the presumption of advancement can apply to mothers and adult children, however the evidence is clear that Mildred did not intend to make gift of these funds to James. He acknowledges that clearly in his own evidence. [39] It is also clear from the evidence that Mildred retained beneficial ownership and control over the funds during her lifetime. She contributed all of the money required to acquire the funds and paid any tax owing on the interest generated by those funds. James had no access to any of these funds during Mildred's lifetime. [40] Accordingly, James holds these funds as trustee for Mildred's estate. There is conflicting evidence about whether or not Mildred wanted to have the grandchildren and great-grandchildren benefit. James and the two grandchildren who testified assert that Mildred wished to provide funds to the grandchildren and great-grandchildren. With the exception of some specific bequests, this was clearly not her intention at the time of the execution of her will. There was also evidence that Mildred expressed her intention to provide inter vivos gifts to the grandchildren and great-grandchildren, however she did not do so. [41] The plaintiffs, Leslie and Sandra assert that Mildred's intentions were to treat her three children equally. In addition, Sandra testified that Mildred specifically told her that she did not intend to leave anything to the grandchildren and great-grandchildren. [42] The best evidence of Mildred's intentions are those expressed in her will in which she leaves the residue of her estate equally to her daughters. [14] The reasons for decision show that the judge found, as matter of fact, that Ms. Little did not intend to make gift of the bank deposits and the proceeds of the RRIF to the appellant (para. [38]). This conclusion was supported by the evidence. As to the bank deposits the appellant’s evidence was as follows at pp. 112 and 115 of the transcript of evidence: see. What about her bank accounts? Those were hers. It was joint names just in case something happened to her, so that could get done what she wanted to do. And so what were your mother’s wishes in regard to the money in the bank? To be given to the grandchildren and the great-grandchildren. As to the RRIF, the appellant’s evidence was as follows, at pp. 125 and 126: Did your mother ever tell you that it was the entire RIF was going to be gift to you? Not gift to me, no. She wanted me to look after make sure the money was there to help out for the rest of the time, or whatever time, in their lifetime, the grandchildren, the great-grandchildren. [15] The reasons for decision also show that the judge found as fact that Ms. Little did not intend the funds in question to go to the appellant for the benefit of the grandchildren and great-grandchildren. Although the appellant, in argument, did not use the term express trust for the grandchildren and great-grandchildren, that was the arrangement made according to his evidence. Although the trial judge did not spell it out clearly in her reasons, she obviously rejected the part of the appellant’s evidence to the effect that Ms. Little intended the bank deposits and the proceeds of the RRIF to benefit the grandchildren and the great-grandchildren as well as himself. That the judge carefully considered the appellant’s evidence to that effect is clear from paras. [40], [41] and [42]. It is trite law that judge can accept part of the evidence of witness and reject another part. This is an issue of fact respecting the credibility of witness and this Court can interfere only in the presence of palpable and overriding error: H. L. v. Canada, (2005) 2005 SCC 25 (CanLII), 251 D.L.R. (4th) 604 (S.C.C.). The decision in this respect was open to the judge. [16] The judge did not, in her statement of the issues or in her analysis of the law, mention the possibility of an express trust in favour of the grandchildren and great-grandchildren. Nevertheless, she must have considered whether such an express trust existed because that was exactly what the appellant’s evidence suggested and exactly what the trial judge rejected in her findings of fact. [17] Since the funds in question were not given to the appellant as a gift, and were not given to him in trust for the grandchildren and great-grandchildren, they must, of necessity, revert to the estate of Ms. Little. [18] In the case of the bank deposits, the funds would revert to the estate on the basis of resulting trust. resulting trust arises when person voluntarily transfers or gifts property to another person. The law presumes that the transferor did not intend the transferee to have the benefit of the property and that the transferee is obligated to return the property to the transferor because the transferee gave no value for the property: Cooper v. Cooper Estate et al. (1999), 1999 CanLII 12613 (SK QB), 181 Sask.R. 63 (Q.B.); Dell'Aquila Estate v. Mellof (1996), 1996 CanLII 6755 (SK QB), 143 Sask.R. (Q.B.). The Supreme Court of Canada in Niles v. Lake, 1947 CanLII (SCC), [1947] S.C.R. 291, held that the presumption of resulting trust arises with respect to voluntary transfers and, more particularly, with the voluntary transfer of monies. The presumption of resulting trust is rebuttable by the transferee proving that the transferor intended the transfer as true gift: Cooper v. Cooper Estate. On the evidence, it was open to the trial judge to find resulting trust and that the appellant held the funds for the estate. [19] In the case of the RRIF, the funds would revert to the estate on somewhat different basis. Simple lack of consideration would not avoid the designation of beneficiary of the RRIF and, accordingly, the presumption of resulting trust would not apply. However, in this case, there is something more than the lack of consideration. There is the evidence of the beneficiary, the appellant, that the proceeds of the RRIF were not intended by Ms. Little to be gift to him, evidence which the judge accepted (para. [38]). As result, he is precluded from claiming the funds for himself. The judge also found as fact, as noted above, that the monies were not intended to benefit the grandchildren and great-grandchildren. Since there was no gift to the appellant, and no trust in favour of the grandchildren and great-grandchildren, the monies must, of necessity, revert to the estate. [20] These conclusions of the trial judge were reasonable ones. The evidence of the intentions of the deceased with respect to the funds in question was conflicting. Every single witness said something different with respect to the intention of Ms. Little. There was also evidence as to gifts inter vivos of money the deceased intended to make to the grandchildren and great- grandchildren but did not due to change of mind. It was the role of the trial judge to arrive at finding of fact as to the deceased’s intentions out of all the conflicting evidence. It was open to her to find, as she did, in all of the circumstances of this case, that the deceased, when she transferred the bank deposits into the joint names of herself and the appellant, and named the appellant to be the beneficiary of the RRIF, intended, in effect, only to facilitate the execution of the directions given in the will as to disposition of the funds: the funds were to be given to the respondents, the residuary beneficiaries named in the will. Since the appellant was named the executor of the will it was logical for the deceased to do what she did. Her reason for doing so came out of the mouth of the appellant: “It was joint names just in case something happened to her, so that could get done what she wanted to do.” [21] While the appellant characterized this issue as being one of mixed law and fact, it was essentially one of fact alone: the issue was what Ms. Little intended when she transferred the bank deposits and designated the payee of the RRIF. The standard of review in respect of such an issue, as noted previously, is palpable and overriding error. The judge made no such error. The appellant cannot succeed on this point. [22] Finally, the appellant asks, if he is unsuccessful on his first two points, that this Court grant him relief under s. 57 of The Trustee Act, R.S.S. 1978, c. T-23, in respect of the monies paid by him to the grandchildren and great-grandchildren, approximately $45,000.00. Section 57 is as follows: 57 If in any proceeding affecting trustees or trust property it appears to the court that trustee, whether appointed by the court or by an instrument in writing or otherwise, or that any person who in law may be held to be fiduciarily responsible as trustee, is or may be personally liable for breach of trust, but has acted honestly and reasonably and ought fairly to be excused for the breach and for omitting to obtain the directions of the court in the matter in which it was committed, the court may relieve the trustee either wholly or partly from personal liability. [23] The appellant says he paid the monies to the grandchildren and great-grandchildren in the honest belief that he was carrying out Ms. Little’s wishes. He gained no personal benefit from doing so, and did not act dishonestly. He also points out that the bulk of the funds went to children or grandchildren of the respondents, his sisters. The other side of the coin is that the trial judge did not accept his evidence that Ms. Little intended that the funds in question benefit the grandchildren and great-grandchildren. Furthermore, the appellant knew from the outset that the respondents disagreed with the position taken by him and intended to take proceedings against him. The disagreements were such that they could not even agree upon the funeral of Ms. Little. In the circumstances, the appellant’s actions in distributing the funds without at least getting directions from the court were imprudent for a trustee, notwithstanding that he made the distribution upon legal advice that he was entitled to do so. The circumstances simply do not justify, on any equitable basis, compelling the innocent respondents to bear the loss to them occasioned by the trustee’s imprudence. [24] The appeal is dismissed with costs under Double Column V in the usual way. DATED at the City of Regina, in the Province of Saskatchewan, this 14th day of October, A.D. 2005. SHERSTOBITOFF J.A. RICHARDS J.A.
The deceased made a Will appointing her only son, the appellant, as executor. In her Will, she left her home to her son, and divided the rest and residue between her two daughters, the respondents. The deceased transferred title to her house to the names of herself and the appellant jointly. She also transferred some bank deposits totalling approximately $57,000 into the joint names of herself and the appellant and designated him as the person entitled to receive payments under a RRIF totalling approximately $29,000. After her death, the appellant took the position that the bank deposits and the proceeds of the RRIF did not pass under the Will but were given to him for the benefit of the deceased's grandchildren and himself. He paid out about $45,000 to the grandchildren and himself, but nothing to his sisters, the residuary beneficiaries under the Will. The sisters brought action against him, claiming the funds were part of the residue of the estate and obtained a judgment to that effect against him. He appeals against that judgment. HELD: Appeal dismissed with costs.  1) Section 75 of The Queen's Bench Act does not apply to this case. 2) The trial judge carefully reviewed the evidence and the law respecting the presumption of advancement and the presumption of resulting trust. The judge did not mention the possibility of and express trust in favour of the grandchildren. She must have considered whether an express trust existed because that was exactly what the appellant's evidence suggested and exactly what the trial judge rejected in her findings of fact. Since the funds in question were not given to the appellant as a gift, and were not given to him in trust for the grandchildren, they must of necessity revert to the estate. In the case of the bank deposits, the funds would revert to the estate on the basis of a resulting trust. In the case of the RRIF, the funds would revert to the estate on a different basis. Since there was no gift to the appellant, and no trust in favour of the grandchildren, the monies must revert to the estate. 3) While the appellant characterized this issue as being one of mixed law and fact, it was essentially one of fact alone, the issue was what the deceased intended when she transferred the bank deposits and designated the payee of the RRIF. The standard of review in respect of such an issue is palpable and overriding error. The judge made no such error.  4) The appellant asked for relief pursuant to s. 57 of The Trustee Act in respect of the money paid by him to the grandchildren. The appellant says he paid the monies to the grandchildren in the honest belief that he was carrying out the wishes of the deceased. The appellant knew from the outset that his sisters disagreed with his position and intended to take proceedings against him. The appellant's actions in distributing the funds without at least getting directions from the Court were imprudent for a trustee. The circumstances do not justify, on any equitable basis, compelling the innocent respondents to bear the loss to them occasioned by the trustee's imprudence