IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Stone v. Royal Trust Corporation of Canada, |
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2025 BCSC 1890 |
Date: 20250929
Docket: S05489
Registry: Abbotsford
Between:
Colby Josephine Stone and Joseph Stone
Petitioners
And
Royal Trust Corporation of Canada
Respondent
- and -
Docket: S05727
Registry: Abbotsford
In the Matter of the Lisa Johnstone Trust
Before: The Honourable Justice Caldwell
Reasons for Judgment
In Chambers
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Counsel for Colby Stone and Joseph Stone: |
S.C. Albert |
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Counsel for Royal Trust Corporation of Canada: |
M.S. Kerwin |
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Counsel for the Public Guardian & Trustee, |
J.J. Locke |
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Place and Date of Hearing: |
Chilliwack, B.C. June 30, 2025 |
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Place and Date of Judgment: |
Abbotsford, B.C. September 29, 2025 |
Table of Contents
[1] Colby Josephine Stone (“Colby”) and her son Joseph Stone (“Joseph”) petition the court seeking acceleration of a Trust established by Colby’s late mother, Lucille Johnstone (“Lucille”) in February 1991. Colby was formerly known as Lisa Johnstone but subsequently changed her name to Colby.
[2] Colby is currently 53 years old. Joseph is 32 years old and has three children, all minors. Lucille passed away in December 2004, at the age of 80.
[3] Royal Trust Corporation of Canada (“Royal”) is the successor Trustee and takes no position in respect of the relief sought. Royal has also brought their own petition seeking directions regarding the issues raised in Colby’s petition (S05727). By consent of the parties, the petitions of Royal and Colby were heard together and these reasons serve as direction to both petitioners.
[4] The Public Guardian and Trustee (“PGT”) has been served with the materials as the relief sought may affect the interests of the minor children of Joseph. The PGT takes no position in respect of the relief sought in either petition.
[5] Lucille was a self-made, eminent and well-respected member of the British Columbia business community. She headed major corporations and was on the board of directors of the Expo 86 Corporation, the Crown corporation which organized the 1986 World Exposition in Vancouver.
[6] In the late 1960s and early 1970s, she and her then husband adopted three children. Colby was the last of those children and was adopted at the age of six weeks. Following her divorce in the early 1980s, Lucille retained sole custody of all three children.
[7] Colby is a member of the Heiltsuk Indian Band located in Bella Bella. She was part of the “Sixties Scoop” which saw First Nations children removed from their birth parents. She first met her birth parents in 2005.
[8] In February 1991, when Colby was 20 years old and had no children, Lucille settled a trust in her favour (the “Trust”). Similar trusts were also settled in favour of Colby’s two brothers by adoption. Details of those trusts are not before the court. The material before me indicates that those trusts have been wound up, but again, no evidence was presented regarding the details of such winding up.
[9] The Trust was settled with payment of approximately $89,000 in February 1991. The intention was that the Trust would provide funds for the purchase and maintenance of a residence for Colby. Over the years, homes have been bought and sold for that purpose. Colby now lives in a home which she shares with Joseph, his spouse and their children. The current overall value of the Trust is approximately $1.75 million in cash, savings, real estate and receivables.
[10] The Trust provides that Colby is to receive the income from Trust investments. That income is approximately $2,100 per month at present, but has varied over time as the generated interest income has varied.
[11] The Trust provides that on Colby’s death (the “Division Date”) the Trust property is to be divided equally among Colby’s children. Such children are to take the Trust property at age related intervals – one-quarter at age 20, one-third of the balance at age 25, and the entire balance at age 30. There are provisions for any grandchildren to take their parent’s share in the event of a child of Colby’s predeceasing the Division Date.
[12] Colby seeks to have the Trust accelerated and to have the entirety of the Trust’s assets transferred to Joseph.
[13] She deposes that:
- the Trust has well and properly provided for her over the years but that she no longer has need of continued assistance from the Trust or its assets;
- she has no intention of having more children, either by birth or by adoption; and
- Joseph, at his age and stage of life, can benefit from acceleration of the Trust and the resulting access to and use of the Trust assets, and that she wishes to provide Joseph with those benefits now rather than forcing him to await her death.
[14] Section 86 of the Trustee Act, R.S.B.C. 1996, c. 464, provides:
86 (1) A trustee, executor or administrator may, without commencing any other proceeding, apply by petition to the court, or by summons on a written statement to a Supreme Court judge in chambers, for the opinion, advice or direction of the court on a question respecting the management or administration of the trust property or the assets of a will-maker or intestate.
(2) The application under subsection (1) must be served on, or the hearing attended by all persons interested in the application, or by those that the court thinks expedient.
(3) The costs of an application under subsection (1) are in the discretion of the court.
[15] The court has jurisdiction to determine the questions posed by the various petitioners, both as a current and immediate matter or as a hypothetical.
[16] In McGavin v. National Trust Co., [1998] B.C.J. No. 810, 1998 CanLII 5355 (C.A.) the court dealt with this type of premature determination of a trust:
[9] Relying upon Brannan v. British Columbia (Public Trustee) (1991), 56 B.C.L.R. (2d) 113 (B.C.C.A.), the learned chambers judge concluded that, absent evidence of a contrary intention on the part of the settlor, the disclaimer operated as an acceleration and that the effect of the disclaimer was to vest immediately and absolutely the trust property in the petitioner, James McGavin.
[10] Brannan holds that, upon a premature determination of an interest in a trust, there is a presumption that the subsequent interests are accelerated unless an intention to the contrary can be found. The settlors' intention is determined by reference to the trust deed or other document creating the trust and the circumstances existing when the trust deed was executed. In this context the settlor's intention means the intention a reasonable person, placing himself or herself in the settlor's chair, would suppose the settlor had in view of the surrounding circumstances. See Brannan at pp. 120-21.
[17] In the subsequent case of Clarke v. Di Bella, 2010 BCSC 505, Mr. Justice Prior found:
[14] From this decision and the cases contained therein, I am bound to follow four clear principles:
a. Acceleration is presumed unless there is an indication to the contrary;
b. In assessing whether there is an intention to the contrary, the court must look at both the instrument and the surrounding circumstances;
c. The instrument must be examined in its entirety, and clauses must not be examined in isolation; and
d. The intentions must be viewed, as nearly as is possible, from what would be the views of the Testatrix, applying an objective standard.
[18] Justice Glennie of the Court of Queen’s Bench of New Brunswick, in Turnbull v. Hagman, 2011 NBQB 23, referencing both McGavin v. National Trust Co. and Clarke v. Di Bella, succinctly summarised the approach of the courts:
[15] If a life interest has been accepted … it cannot be disclaimed but it can be surrendered. On the determination of a particular interest, the subsequent interests are accelerated unless there is an intention to the contrary. When a person holding the life interest under a testamentary trust disclaims or surrenders that interest, there is usually no further reason for postponing a residuary interest and acceleration may take place unless there is a contrary expression to be found in the words of the will establishing the interests. …
[20] In the four corners approach, the court focusses on the intention of the testator or settlor as it may be determined from the express terms of the document before the court. Surrounding circumstances are not considered unless the wording of the document is not sufficient to determine such intention.
[21] The armchair approach requires the court to place itself in the position of the testator or settlor at the time the instrument was created and to consider the then existing, surrounding context within which the instrument was created in order to ascertain the subjective intention of the testator or settlor.
[22] Mr. Justice Blok raised and reviewed the two approaches in Killam v. Killam, 2017 BCSC 175. He commented at para. 56:
[56] The fact that our Court of Appeal has endorsed both approaches in different cases leaves the issue in an unsatisfactory state of uncertainty. Resort to other sources does not assist in resolving that uncertainty.
[23] The decision in Killam was approved by the British Columbia Court of Appeal in 2018 BCCA 64. The Court clarified that:
[13] The “four corners” approach provides that the intention of the testator is to be gleaned from the will itself, and surrounding circumstances are only to be taken into account if the testator’s intention cannot be established from the will. The “armchair” approach requires the court to put itself in the position of the testator at the time the testamentary document was written and to consider the contemporaneous surrounding circumstances in order to ascertain the subjective intentions of the testator. Implicit in the “four corners” approach is recourse to the “armchair” approach if the testator’s intent cannot be made out from the text of the will alone.
[14] The judge said that both approaches to the interpretation of wills have been endorsed by the British Columbia Court of Appeal. The expansive “armchair” approach was endorsed in Davis Estate v. Thomas (1990), 40 E.T.R. 107; while Smith v. Smith Estate, 2010 BCCA 106, stipulates the “armchair” approach is only to be relied upon if the intention of the testator cannot be ascertained by examination of the will alone – i.e., endorsing the “four corners” approach. With respect to the “armchair” approach, the Court in Davis Estate quoted with approval the decision of Mr. Justice Laidlaw in Re Burke (1959), 20 D.L.R. (2d) 396 at 398 (Ont. C.A.):
The Court is now called upon to construe a particular document and, at the outset, I emphasize what has been said before so frequently. The construction by the Court of other documents and decisions in other cases respecting the intention of other testators affords no assistance whatsoever to the Court in forming an opinion as to the intention of the testator in the particular case now under consideration. Other cases are helpful only in so far as they set forth or explain any applicable rule of construction or principle of law. Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed and which might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator. When an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so.
[24] As seen above, the courts are equivocal on whether the four corners approach or the armchair approach is the appropriate starting point to determine intentions of a testator. I do not need to make a determination on this legal question today, as I find the four corners approach is not determinative when it comes to this Trust (see below). Use of the armchair approach is therefore necessary.
1. the Trust was set up with an injection of cash for the stated purpose of providing for the residential needs of Colby;
2. the terms provided flexibility to the trustee in terms of purchase, sale, replacement, and payment of monies from the available funds from time to time;
3. the trustee was provided with at least a limited power to encroach on capital in certain circumstances; and
4. the Trust provides that, in the event of determination (i.e. the death of Colby) her children would receive portions of the trust assets at the ages of 20, 25 and 30 years, and in such circumstances the power to encroach on capital is significantly increased.
[26] In my view, those provisions are highly suggestive of an intention on the part of Lucille to provide for possible acceleration but are not, in and of themselves, determinative.
[27] Placing the court in Lucille’s position at the time the Trust was settled, I note:
1. Colby was only 20 and Lucille 66 when the Trust was settled, and it appears that the intention was to ensure Colby’s security while she was reasonably young;
2. the age of 20 coincides with the age at which Lucille’s grandchildren (Colby’s children) could begin to receive a partial share of the capital of the Trust in the event of determination;
3. had determination occurred, Lucille’s grandchildren, or here the sole grandchild, could receive the whole of their share of the Trust at the age of 30;
4. this “age dependent” structure reinforces the view that Lucille’s primary concern was to ensure provision for any and all of the beneficiaries during their relatively early years, but to a much more limited degree upon reaching the age of 30;
5. there is no indication in the Trust as to any reason why Colby should be treated more restrictively than her children; and
6. Colby could determine the Trust by committing suicide, an option which I find would clearly not have been in the contemplation or intentions of Lucille at the time that the Trust was settled.
[28] In 1991, Lucille settled the Trust to benefit Colby and, in certain circumstances, Colby’s children. The amount involved was modest but not insignificant. The purposes of the Trust were specific and limited, not multigenerational or dynastic: See McGavin v. National Trust Co., at para. 21.
[29] The Trust has succeeded in meeting its stated intentions over the course of some 34 years. Colby has succeeded with the assistance of the Trust. She no longer requires or wishes the provisions of the Trust for her own benefit. She wishes, much like Lucille before her, to provide, as best she can, for her child, his well-being and his ability to provide for his family. It is hard to imagine that Lucille would have intended to deny Colby that opportunity.
[30] In the circumstances, I make the following determination and declarations:
1. In the event that Colby disclaims her interest in the Lisa Johnstone Trust, that Trust will be accelerated and vest absolutely in Joseph Stone, the residual beneficiary pursuant to clause 5.1 of the Trust instrument.
2. Such acceleration is not contrary to the intentions of Lucille as the settlor of the Trust.
[31] All parties are entitled to their costs as special costs payable from the Trust.
“Caldwell J.”