MD Private Trust Company v. Shaw, 2022 NSSC 142

SUPREME COURT OF Nova Scotia Citation: MD Private Trust Company v. Shaw , 2022 NSSC 142 Date: 20220315 Docket: Hfx No. 504415 Registry: Halifax Between: MD Private Trust Company in its capacity as trustee of The Shaw Alter Ego Trust and MD Private Trust Company in its capacity as attorney for Albert Joseph Shaw Applicant v. Albert Brian Shaw, Mary Kathleen Anderson, Lorraine Marie McKelvie, Gregory Joseph Shaw, Anne Marie McLaughlin, Michael Joseph Shaw and Stephen Joseph Shaw Respondents Decision Judge: The Honourable Justice C.

Richard Coughlan Heard: Oral Decision: Written Release of Decision: December 17, 2021, February 24, and March 4, 2022, in Halifax, Nova Scotia March 15, 2022 May 25, 2022 Counsel: Brian K.

Awad, Q.C., for the Applicant Anne Marie McLaughlin, Self-Represented, Respondent Stephen Joseph Shaw, Self-Represented, Respondent (Present March 4, 2022 only) By the Court (Orally): [ 1 ] MD Private Trust Company (MDPT) in its capacity as trustee of The Shaw Alter Ego Trust and as attorney for Albert Joseph Shaw filed an application in Chambers for directions and an order terminating The Shaw Alter Ego Trust pursuant to the Variation of Trusts Act , R.S.N.S., 1989 c. 486 and an order approving and passing the accounts of MDPT in connection with its activities acting as attorney for property for Dr.

Shaw, pursuant to the Powers of Attorney Act , R.S.N.S. 1989 c. 352 . [ 2 ] MDPT provides financial advise and services to Canadian physicians with regard to estate planning, financial management and the administration of estates and trusts. On January 29, 2010, Dr. Albert Joseph Shaw established an alter ego trust by an agreement between himself as settlor and trustee and MDPT as alternate trustee and provider of administrative services. Dr. Shaw was the beneficiary of the trust during his life and after his death any amounts remaining were to be transferred to a new trust for his wife Lillian Rose Shaw.

Upon the last death of Dr. Shaw and Lillian Rose Shaw the trusts terminate and any remaining balance of the trust fund shall be divided into seven equal portions with one portion transferred to each of the children of Dr. and Mrs. Shaw. [ 3 ] On March 12, 2010, Dr. Shaw transferred $417,842.55 into the Alter Ego trust account. Beginning April 1, 2010, the trust began to send monthly payments to Dr. Shaw’s account. At first the amount sent was $3,000 which later increased to $5,000. From time to time, additional amounts were paid to Dr. Shaw’s account as requested by him. Dr.

Shaw’s RRIF account also paid approximately $1,400 each month to Dr. Shaw’s account. Dr. and Mrs. Shaw sold their matrimonial home and paid the net proceeds of the sale in the amount of $374,261.93 to the trust on March 17, 2017. [ 4 ] Lillian Rose Shaw died on December 2, 2014. Probate of her Estate was never opened.

[ 5 ] Dr. Shaw signed an enduring power of attorney and advance personal directive appointing MDPT as his attorney on August 31, 2010. [ 6 ] In 2016, Dr. Shaw became a resident of Camp Hill Veteran’s Memorial Hospital. In the fall of 2016, MDPT took the following actions pursuant to the power of attorney, as set out in Deborah Kennedy’s affidavit deposed to on March 16, 2021. 22. In Fall 2016, MDPT took the following actions pursuant to the POA: (

i) MDPT opened a new account for Dr. Shaw’s non-registered assets (“POA Account #1”). That account, rather than the RBC bank account, would become the account that paid Dr. Shaw’s bills, in particular, the cost of him being at Camp Hill. (ii) MDPT opened a second new account to hold Dr. Shaw’s registered assets (“POA Account #2”). (iii) MDPT stopped the monthly transfers of $5,000 that had been going from the AET Account to RBC. (iv) MDPT redirected the RRIF payments such that they went to POA Account #1 instead of RBC. [ 7 ] Dr. Shaw died January 16, 2018.

He had executed a will on January 29, 2010 in which MDPT was named as executor. Probate of his will was granted to MDPT on April 9, 2018. [ 8 ] An estate account was opened. MDPT paid estate expenses from the estate account as well as the trust account pursuant to clause 10(

m) of the Alter Ego Trust Agreement which provides: 10. In addition to all other powers conferred upon the Trustees by the other provisions of this Trust Agreement or by any statute or general rule of law, the Trustees shall have the power to administer the Trust Fund in whatever manner they determine and they shall have the right to take action in connection with the Trust Fund and to exercise any rights, powers and privileges which may exist or arise in connection therewith to the same extent and as fully as an individual could if he were the sole owner of the Trust Fund. Without limiting the generality of the foregoing, the Trustees shall be authorized and empowered … (

m) To pay out of the Trust Fund such amounts as the Trustees in their absolute discretion consider advisable and necessary to carry out the provisions of the Last Wills and Testaments of Albert Joseph Shaw and Lillian Rose Shaw. These amounts shall include but not limited to the payment of Probate Fees, Executor’s commissions and income taxes. [ 9 ] Pursuant to clause 10(

m) of the Trust Agreement, MDPT as trustee paid the following accounts of McInnes Cooper for legal fees, disbursements and HST for services for the Estate of Albert Joseph Shaw: March 28, 2018 $2,525.77 April 30, 2018 449.64 May 23, 2018 1,143.61 May 31, 2018 277.93 July 27, 2018 5,533.04 September 21, 2018 6,095.00 October 31, 2018 2,328.29 November 30, 2018 3,975.37 December 31, 2018 1,588.36 February 28, 2019 1,959.58 May 31, 2019 3,499.10 June 30, 2019 4,983.53 July 31, 2019 4,983.53 September 30, 2019 8,796.84 October 31, 2019 6,478.58 December 31, 2019 1,618.11 February 29, 2020 7,328.86 March 31, 2020 2,001.72 April 30, 2020 3,599.21 Total $69,166.07 [ 10 ] Any legal fees and disbursements in connection with the Estate of Albert Joseph Shaw would be subject to a determination by the Probate Court if they are reasonable and appropriate. [ 11 ] Accounts rendered by McInnes Cooper from May 31, 2020 to November 30, 2021, are for services provided to both the Estate of Albert Joseph Shaw as well as the Alter Ego Trust.

There are not separate accounts rendered to the separate entities. The original application in chambers concerning the matters before this Court was filed on February 25, 2021. [ 12 ] The Court of Probate will have to review the accounts for legal fees and disbursements from May 31, 2020 to November 30, 2021 to determine whether the legal fees and disbursements relating to the administration of the Estate of Albert Joseph Shaw are reasonable and appropriate.

[ 13 ] The account rendered on December 31, 2021 in the amount of $3,484.78 is in connection with this hearing concerning the Trust. [ 14 ] I do not have any accounts for legal fees and disbursements incurred by the Trust in 2022. [ 15 ] A number of the respondents, including Stephen Joseph Shaw, have asked for an order pursuant to section 92(4) of the Probate Act for an order awarding costs incurred in defending the Estate of Albert J. Shaw. This proceeding is dealing with the Alter Ego Trust not the Estate.

The Probate Act has no application to this proceeding. [ 16 ] The respondent, Kathleen Anderson, seeks reimbursement of $2,700 for legal advise Ms. Anderson obtained concerning the Alter Ego Trust. Ms. Anderson did not provide evidence in support of her claim so reimbursement will not be made to Ms. Anderson from the trust. [ 17 ] The respondent Anne Marie McLaughlin, is not making any claim against the Trust.

She disputes the amount of legal fees but that issue will be dealt with by the Probate Court. [ 18 ] The remaining assets of the Alter Ego Trust are to be distributed in accordance with the terms of the Trust subject to any claim of the Canada Revenue Agency and to the review and determination by the Court of Probate as to the reasonableness and appropriateness of the legal fees and disbursements owed by the Estate of Albert Joseph Shaw which were paid by the Trust including any such legal fees and disbursements billed after December 31, 2021. Coughlan, J.