ORDERS OF THE DAY
Hon. Jim Ernst (Government House Leader): Madam Speaker, would you call for second reading of Bill 9 followed by Bill 11.
SECOND READINGS
Bill 9--The Wills Amendment Act
Hon. Rosemary Vodrey (Minister of Justice and Attorney General): Madam Speaker, I move, seconded by the Minister of Environment (Mr. Cummings), that Bill 9, The Wills Amendment Act; Loi modifiant la Loi sur les testaments, now be read a second time and be referred to a committee of this House.
Motion presented.
Mrs. Vodrey: Madam Speaker, I am pleased to move the second reading of The Wills Amendment Act. Although the bill makes only a small change to the English version of Section 23, its effect of making sure that the wishes of the makers of wills are not defeated by technicalities is very important.
As honourable members know, The Wills Act sets out the requirements for a valid will. A holograph will, one that is entirely in the maker's own handwriting and signed by the maker, is valid in Manitoba. However, formal wills with typewritten text are more commonly made. The Wills Act sets out a number of very specific formal requirements for the execution of these wills. For example, the signature of the maker of the will must be witnessed by two persons who must also sign the will in the presence of each other and in the presence of the maker.
At common law, the failure to comply with even one of the formal requirements of The Wills Act had the effect of invalidating the entire will. This was so even where it was perfectly clear that the document in question accurately represented the intentions of the person who made it.
In 1980, the Manitoba Law Reform Commission recommended that this be changed. It recommended that the courts be given the power to waive those sorts of technical errors and to give effect to wills where errors can be made in complying with the formal execution requirements of The Wills Act, so long as the court was convinced that the document represented the true testamentary intentions of the maker. The commission argued that the technical rules of form should not be allowed to defeat the substance and the clear wishes of the will makers.
In 1983, the Legislature adopted the recommendations of the Manitoba Law Reform Commission with the enactment of Section 23 of The Wills Act. Manitoba thus became the first jurisdiction in North America to give the courts the power to waive technical errors. Since that time, Saskatchewan has adopted a similar measure and the Uniform Law Conference of Canada has recommended a similar provision to all of Canada's provinces and territories.
The Manitoba Court of Appeal recently interpreted Section 23 of The Wills Act in a way which narrows the discretion of the courts to overcome technical errors. The court held that it could recognize a will containing errors in the execution formalities only if the maker of the will had substantially complied with those requirements. In other words, the testator must get most of the execution requirements right and make a mistake in only a few of them. Only in these circumstances, the court said, could it use the power to waive Section 23.
The Manitoba Law Reform Commission reviewed this decision of the Court of Appeal and noted that Section 23 of The Wills Act was intended to have a broader effect. It should not matter whether the maker of a will has failed to meet only one of the execution requirements of The Wills Act or whether that person has failed to meet all of those requirements.
What is important is whether, considering all of the circumstances, the document represents the true testamentarian intention of the maker of the will. Therefore, the purpose of this amendment is to restore to Section 23 of The Wills Act a broad and generous scope, and it allows courts to truly do justice.
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Mr. Gord Mackintosh (St. Johns): I move, seconded by the member for Broadway (Mr. Santos), that debate be now adjourned.
Motion agreed to.
Bill 11--The Trustee Amendment Act
Hon. Rosemary Vodrey (Minister of Justice and Attorney General): I move, seconded by the Minister of Environment (Mr. Cummings), that Bill 11, The Trustee Amendment Act; Loi modifiant la Loi sur les fiduciaires, now be read a second time and be referred to a committee of this House.
Motion presented.
Mrs. Vodrey: I am pleased to move the second reading of The Trustee Act. This bill adopts a recommendation of the Manitoba Law Reform Commission, that in the absence of direction from the trust instrument, a trustee who holds money or property on behalf of beneficiaries should be allowed to consider nonfinancial criteria when formulating investment policy or when making an investment decision provided that the trustee always meets the usual standard of prudence that is expected of trustees.
A trust can rise in a number of different circumstances. For example, it may rise where an executor holds and invests money for a number of years on behalf of infant beneficiaries of a will; a trustee pension plan is an example of a trust with many more beneficiaries. No matter the size of the trust, every trustee has an obligation to obtain the best financial return possible for his or her beneficiaries. Unless the document creating the trust permits it, it may be argued that considering nonfinancial criteria could be a breach of the trustee's duties for which the trustee could be sued.
However, as honourable members know, it has become increasingly common in recent years for some investors to consider nonfinancial or ethical criteria while making their investment decisions. Such criteria are often of social, religious, environmental or other philosophical nature. These investors may not want their money to be used to advance purposes with which they disagree philosophically, or, alternatively, they may see investment as a tool to implement a special purpose which they wish to promote.
Ethical investment can pose problems in a trust situation. Can a trustee consider such nonfinancial factors? The answer is clear if the document setting up the trust covers the issue; however, the answer is not at all clear if the document is silent. Neither the general law of trust prevailing in Manitoba nor our Trustee Act answers these questions.
Continued uncertainty in this area is undesirable because of the increasingly significant sums of money invested in trusteed funds and the equally increasing and legitimate concerns of both trustees and beneficiaries concerning the investment use of these funds. The proliferation of ethical investment funds in Canada highlights the growing general concern with issues of this nature.
This amendment to The Trustee Act recommended by the Manitoba Law Reform Commission will balance recognition of the use of nonfinancial criteria with restraints to prevent unreasonable financial detriment. Where a trust instrument is silent concerning the use of nonfinancial criteria, its trustee should not be under a legal disability to consider nonfinancial criteria. Of course, the predominant goal should remain the securing of a reasonable return.
A trustee who uses nonfinancial criteria should continue to be obliged to meet the usual standards of prudence. This moderate approach is designed to remove the present uncertainty and clarify the acceptability of considering ethical and other nonfinancial considerations while preserving the primary obligation to maximize financial benefit to the beneficiaries of this trust.
Mr. Gord Mackintosh (St. Johns): I move, seconded by the member for Broadway (Mr. Santos), that debate be adjourned.
Motion agreed to.
House Business
Hon. Jim Ernst (Government House Leader): I move, seconded by the Minister of Culture, Heritage and Citizenship (Mr. Gilleshammer), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.
Motion agreed to, and the House resolved itself into a committee to consider of the Supply to be granted to Her Majesty, with the honourable member for La Verendrye (Mr. Sveinson) in the Chair for the Department of Industry, Trade and Tourism; the honourable member for Sturgeon Creek (Mr. McAlpine) in the Chair for the Department of Education and Training; and the honourable member for St. Norbert (Mr. Laurendeau) in the Chair for the Department of Health.