Sunday, August 23, 2015

Gifts Void Against Public Policy: McCorkill Estate

The usual rule in Canada is that a will-maker may leave wealth to whom he or she chooses. This is subject to claims of a spouse or children under various wills variation or dependent relief legislation, which varies from province to province, but apart from such legislation, it is generally true that a will-maker my choose his or her beneficiaries.
Though not common, there is another exception to the usual rule. A court may find a gift to be void as being contrary to public policy.

Harry Robert McCorkill, who died on February 20, 2004, left his estate to the National Alliance, a white supremacist organization based in the United States.
His sister challenged the gift on the grounds that it was against public policy. If successful, she and her brother would inherit the estate as Harry McCorkill’s next-of-kin (he did not have a spouse or children).

Mr. Justice Grant of the New Brunswick Court of Queen’s Bench, in McCorkill v. Streed, 2014 NBQB 148 (CanLii)  reviewed the National Alliance foundational documents as well as various publications, which he described “as racist, white supremacist and hate-inspired.  They are disgusting, repugnant and revolting.” He found that the organization's communications were hate propaganda, and as such violated the Criminal Code of Canada.
Before concluding that the National Alliance’s activities did offend public policy, Mr. Justice Grant set out the authorities dealing with gifts that are void as against public policy as follows:

[58]   What constitutes public policy is a question that has been considered in many cases. In the case of Re: Wishart Estate (No. 2) 1992 CanLii 2679 (NBQB); (1993) 1992 CanLII 2679 (NB QB), 129 NBR (2d) 397 Riordon, J. considered whether or not a direction in a will to destroy four horses violated public policy. He quoted extensively from the Missouri case of Eyerman et al v Mercantile Trust Co. N.A. et al 524 S.W.2d 210 including the following:
The term ‘public policy’ cannot be comprehensively defined in specific terms but the phrase ‘against public policy’ has been characterized as that which conflicts with the morals of the time and contravenes any established interest of society.  Acts are said to be against public policy ‘when the law refuses to enforce or recognize them, on the ground that they have a mischievous tendency, so as to be injurious to the interests of the state, apart from illegality or immorality’.  Dille v. St. Luke’s Hospital, 355 Mo. 436; 196 S.W. 2d 615, 620 (1946); Brawner v. Brawner, 327 S.W. 2d 808, 812 (Mo. banc 1959).
[59]   In Canada Trust Co. v. Ontario Human Rights Commission 1990 CanLII 6849 (ON CA), [1990] O.J. No. 615 (O.C.A.) the court considered whether a trust document establishing a charitable trust based on white supremacy, religious supremacy, racism and sexism violated public policy. Writing for the majority, Robins, J.A. stated at paragraph 34:
34.     Viewing this trust document as a whole, does it violate public policy?  In answering that question, I am not unmindful of the adage that “public policy is an unruly horse” or of the admonition that public policy “should be invoked only in clear cases, in which the harm to the public is substantially incontestable, and does not depend on the idiosyncratic inferences of a few judicial minds”: Re Millar, 1937 CanLII 10 (SCC), [1938] S.C.R. 1,  [1938] 1 D.L.R. 65 [per Crocket J., quoting Lord Aitkin in Fender v. Mildmay, [1937] 3 All E.R. 402, at p. 13 S.C.R.].  I have regard also to the observation of Professor D.W.M. Waters in his text on the Law of Trusts in Canada, 2nd ed. (Toronto: Carswell, 1984), at p. 240 to the effect that:
The courts have always recognized that to declare a disposition of property void on the ground that the object is intended to contravene, or has the effect of contravening public policy, is to take a serious step.  There is the danger that the judge will tend to impose his own values rather than those values which are commonly agreed upon in society and, while the evolution of the common law is bound to reflect contemporary ideas on the interests of society, the courts also feel that it is largely the duty of the legislative body to enact law in such matters, proceeding as such a body does by the process of debate and vote.
Nonetheless, there are cases where the interests of society require the court’s intervention on the grounds of public policy. 
[60]   In the case of Re Estate of Charles Millar, Deceased 1937 CanLII 10 (SCC), [1938] S.C.R. 1 Duff C.J. stated at p. 4:
It is the duty of the courts to give effect to contracts and testamentary dispositions according to the settled rules and principles of law, since we are under a reign of law; but there are cases in which rules of law cannot have their normal operation because the law itself recognizes some paramount consideration of public policy which over-rides the interest and what otherwise would be the rights and powers of the individual.  It is, in our opinion, important not to forget that it is in this way, in derogation of the rights and powers of private persons, as they would otherwise be ascertained by principles of law, that the principle of public policy operates.
[61]   Public policy, then, embodies the “interests of society” as expressed in the morals of the time, the common law and legislation. In respect to the latter in Canada Trust Co., supra., Tarnopolsky, J.A. stated at paras. 92-94:
92      Public policy is not determined by reference to only one statute or even one province, but is gleaned from a variety of sources, including provincial and federal statutes, official declarations of government policy and the Constitution.  The public policy against discrimination is reflected in the anti-discrimination laws of every jurisdiction in Canada.  These have been given a special status by the Supreme Court of Canada in Ontario Human Rights Commission v. Simpsons-Sears Ltd., 1985 CanLII 18 (SCC), [1985] 2 S.C.R. 536, 52 O.R. (2d) 799 (note), 17 Admin. L.R. 89, 9 C.C.E.L. 185, 7 C.H.R.R. D/3102, 86 C.L.L.C. Paragraph17, 002, 23 D.L.R. (4th) 321, [1986] D.L.Q. 89 (note), 64 N.R. 161, 12 O.A.C. 241, at p. 547 S.C.R., p. 329 D.L.R. 
The accepted rules of construction are flexible enough to enable the Court to recognize in the construction of a human rights code the special nature and purpose of the enactment (see Lamer J. in Insurance Corporation of British Columbia v. Heerspink, 1982 CanLII 27 (SCC), [1982] 2 S.C.R. 145 at pp. 157-58), and give to it an interpretation which will advance its broad purposes.  Legislation of this type is of a special nature, not quite constitutional, but certainly more than the ordinary – and it is for the courts to seek out its purpose and give it effect.
93      In addition, equality rights “without discrimination” are now enshrined in the Canadian Charter of Rights and Freedoms in s. 15; the equal rights of men and women are reinforced in s. 28; and the protection and enhancement of our multicultural heritage is provided for in s. 27.
94      Finally, the world community has made anti-discrimination a matter of public policy in specific conventions like the International Convention on the Elimination of All Forms of Racial Discrimination (1965), G.A. Res. 2106 A (XX), and the International Convention on the Elimination of All Forms of Discrimination Against Women (1979), G.A. Res. 34/180, as well as Articles 2, 3, 25 and 26 of the International Covenant on Civil and Political Rights (1966), G.A. Res. 2200 A (XXI), all three of which international instruments have been ratified by Canada with the unanimous consent of all the provinces.  It would be nonsensical to pursue every one of these domestic and international instruments to see whether the public policy invalidity is restricted to any particular activity or service or facility.   
Next Mr. Justice Grant considered whether it was sufficient for the gift to be to an organization whose activities were against public policy to declare the gift void. In contrast to most of the cases in which a gift or a condition to a gift is found to be void as against public policy, Mr. McCorkill’s will does not expressly provide that the funds in his estate are to be used to promote an object (in this case hate propaganda) that is against public policy. One may make a valid gift in a will to a bad person, even one who has committed horrendous crimes.
Mr. Justice Grant distinguished between a gift to a person who has committed a crime, and an organization whose very purpose is contrary to public policy. He wrote:
[72]   While the jurisprudence on voiding bequests on the grounds of public policy tends to deal with conditions attached to specific bequests, in my opinion the facts of this case are so strong that they render this case indistinguishable from those. 
[73]   Unlike most beneficiaries, the National Alliance has foundational documents which state its purposes.  Moreover, those purposes have been expanded upon, explained and disseminated in various forms of media by the NA since its inception.  They consistently show that the National Alliance stands for principles and policies, as well as the means to implement them, that are both illegal and contrary to public policy in Canada.  If the organization has changed in these respects since its inception then it was incumbent upon the respondent, particularly through the evidence of Erich Gliebe, the current President of the National Alliance, to demonstrate that in this application.  It has not done so.
[74]   The facts of this case can be distinguished from most other cases because in most cases, a beneficiary of an estate does not “stand for” something identifiable. They don’t have foundational documents.  A drug dealer does not “stand for” dealing drugs.  He or she may have a criminal record of doing that but that does not mean that that is what they stand for. Their crimes are not the purpose for which they exist, their raison d’ĂȘtre.
Accordingly, the gift to the National Alliance is void. In the result, the estate will go to Mr. McCorkill’s next-of-kin. The New Brunswick Court of Appeal upheld Mr. Justice Grant’s decision, (2015 NBCA 50(Canlii).
Post Script

The quotations in the reasons for judgment from the National Alliance publications are bound to make the strongest of stomachs turn. But one line caused me to giggle. In describing its “Aryan values,” one document says:
In specific terms, this means a society in which young men and women gather to revel with polkas or waltzes, reels or jigs or any other White dances, but never to undulate or jerk to [adjective omitted]… jazz or rock rhythms. …
I have nothing against polkas or waltzes (and I am not sure what reels or jigs are) but I cannot conceive of my world without jazz.

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