Dear Colleagues:

In S.A. v. Metro Vancouver Housing Corp. 2019 SCC 4 (https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/17473/index.do) the Supreme Court of Canada, for the first time, examined the nature of the Henson Trust which is the standard way in which Canadians provide for the interests of severely disabled children and relatives in situations where they pre-decease these children and relatives. In short the court found that these types of trusts are valid and will largely perform their intended function. For those interested in court orders, their also is a discussion about the availability of declarations. The reasoning of the court, on the main issue, is helpfully summarized by Justice Cote in the following 4 paragraphs:

[1]  At issue in this appeal is whether the interest that the appellant, S.A., has in a trust that was set up for her care and maintenance should be treated as an “asset”, which would negatively affect her eligibility to participate in a rental subsidy program offered by her landlord, the respondent, Metro Vancouver Housing Corporation (“MVHC”).

[2]  Resolving this issue requires this Court to consider, for the first time, the nature of a specific type of trust — commonly known as the “Henson trust” — settled for the benefit of a person with disabilities who relies on publicly funded social assistance benefits …. The central feature of the Henson trust is that the trustee is given ultimate discretion with respect to payments out of the trust to the person with disabilities for whom the trust was settled, the effect being that the latter (a) cannot compel the former to make payments to him or her, and (b) is prevented from unilaterally collapsing the trust under the rule in Saunders v. Vautier…. Because the person with disabilities has no enforceable right to receive any property from the trustee of a Henson trust unless and until the trustee exercises his or her discretion in that person’s favour, the interest he or she has therein is not generally treated as an “asset” for the purposes of means-tested social assistance programs … The Henson trust therefore makes it possible to set aside money or other valuable property for the benefit of a person with disabilities in a manner that jeopardizes that person’s entitlement to receive social benefits as little as possible.

[3]  S.A. is a person with disabilities for whose benefit a Henson trust was settled in 2012 (the “Trust”). She resides in a housing complex operated by MVHC. In addition to providing affordable housing in the Greater Vancouver area, MVHC offers rental assistance in the form of rent subsidies to certain eligible tenants on a discretionary basis. An “eligible tenant” is one who, among other things, has less than $25,000 in assets. At issue in this case is whether S.A.’s interest in the Trust should be treated as an “asset” for the purpose of determining whether she is eligible to be considered by MVHC for a rent subsidy. Both of the courts below answered this question in the affirmative. S.A. appeals to this Court.

[4]  I would allow the appeal. In my view, S.A. has no actual entitlement to the trust property under the terms of the Trust… [S]he has no independent, concrete right to compel any payments to be made to her or for her benefit, and cannot unilaterally terminate the Trust. Her interest in the trust property therefore amounts to a “mere hope” that the trustees will exercise their discretion in a manner favourable to her …. For this reason, I conclude that her interest in the Trust is not an asset that could disqualify her from being considered by MVHC for a rent subsidy.

Congratulations go out to ODGers Robert Chambers, Geoff Hall, Mitchell McInnes and Lionel Smith on their citations in the decision.

Sincerely,

Jason Neyers
Professor of Law
Faculty of Law
Western University
Law Building Rm 26
e. jneyers@uwo.ca
t. 519.661.2111 (x88435)