Canada: Legal Title Ain't What It Used To Be - The Importance Of Estate Planning And Documenting Intentions

Last Updated: September 11 2017
Article by Ari Wormeli

The case of Warde v. Slatter, 2017 BCSC 274 involves a company, started by the parents of the husband.  The husband and his spouse were both involved in running the company.  The company had become quite successful, and then, apparently, became mired in litigation and its value was significantly reduced.  The legal title to the shares was held by the husband's mother.  The dispute was about whether or not the beneficial interest in the shares belonged to the husband's mother, the husband, or both the wife and the husband.

The judgment also contains, at paragraphs 7-15, and again at paragraphs 58-61, an excellent summary of some of the basic principles of trust law which can sometimes get muddied.

There are two paragraphs that are particularly pertinent in the judgment.  The first is this:

[2] Before their separation, Elaine and Brian ran Slatter Holdings Ltd and its predecessor, PeeJay Contracting Ltd.  They treated it as though they owned it, and no one challenged that position until they separated.  At that point, Brian's mother, the respondent Fern Slatter, asserted ownership and dismissed them both from their positions as officers and directors of the company.

While the judgment itself goes into a lot of details of the evidence, the point is that the evidence essentially boiled down to the company always being intended to go to the husband, but the actual transfer, for a variety of reasons, never actually happened.  The husband and his mother, after a marital separation from the wife, appeared to seize on this as a clear indicator that it was, in fact, never intended to go to him at all.

Nevertheless, in the face of the parties treating the company like their own, to the extent that the husband actually felt comfortable using the shareholder's loans which contained capital not injected into the company by him, this failure to complete was insufficient to make the husband and his mother's case.

There are two important principles to be derived from this case.  The first, as a matter of law, is that you can't allow people to just casually take over a business in all but name and expect that the "all but name" portion will save you or your family's investment.  It's hard to conduct business and everyday life very casually one day and then expect technicalities to save you the next, particularly in family law litigation, which is a very different beast.  If someone is going to be given control of a company and the ability to both use it and keep the profits as they see fit, there needs to be very strong documentation and explanations of just how it is that someone else retains an interest in that company to avoid a result similar to the one in this case.

The second is that , when faced with a problematic position such as the one the husband and the mother were in, fighting to the bitter end can be counterproductive (though, of course, we don't know what settlement offers may have been exchanged).  The  other paragraph from the judgment, which is a warning to litigants, is this one:

[5] The story is not a happy one.  The business that became PeeJay Contracting Ltd was started by the late Grant Slatter–Brian's father and Fern's husband.  Over the years, it was built into a business that was ultimately sold for a handsome sum, which proceeds became the principal asset of Slatter Holdings.  All of the parties contributed at different times to the building of the business.  It was not easy.  They built it through the sweat and effort of long, cold, hard hours.  Now, years of litigation have significantly reduced the value of the company's assets. 

As a result of the finding that the son is essentially the 100% beneficial owner, the wife will almost certainly have some type of share, and it may be significant (though there may be interesting arguments about excluded property and perhaps no increase in value to share, depending upon when it went downhill and what the circumstances were).  The bottom line, however, assuming a 50/50 split, is that both parties are worse off.  Indeed, if there are issues of exclusion, such that the husband is, say, entitled to 75%, that means he's actually lost more fighting this because he's got 75% of something significantly less than it was.  In other words, the company over which the parties were fighting has essentially been significantly depleted by the fighting, rather than the parties being able to share in the more valuable company before litigation.

These kinds of reactions, where people dig their heels in, are not uncommon in family law.  What is tragic is when people allow themselves to be so guided by it that they end up, essentially, shooting themselves in the foot. The fact that, as indicated in the judgment, the husband thought he could actually sell the business himself because he owned it; the fact that he didn't sell it came as a "revelation" to the lawyer assisting with the sale, was an indication about the degree to which he assumed ownership (though not determinative of the question, as the judge rightly points out—that stems, essentially, from his mother's intention in letting him do everything that he was doing).

It should be noted that while there are several of these types of cases reported which occurred under the former Family Relations Act (FRA), this is one of a few that's been reported on this point since the new Family Law Act came in.  While hopefully the parties can resolve their differences out of court, it would be interesting to see the next steps play out if it continues to be litigated.

The big takeaway, though, is that better estate planning or a cohabitation agreement (sometimes called a prenup) could have helped significantly here.  For example, if the intention truly was to keep it for the benefit of the mother, a discussion could have been had about the husband doing work and running the company for a fair remuneration, but with the notion clearly spelled out that the husband's mother was to be the beneficiary, along with a discussion about what that looks like (i.e., dividends paid out to her).  A cohabitation agreement might also have been signed between the husband and wife in which the wife acknowledged this.

Alternatively, if the company was to be transferred to the husband, a cohabitation agreement could have been signed indicating the value of the company, that it was an excluded asset, and that the increase in value would all go to the husband (in the modern era).  When the parties got together, it was under the FRA, and some different rules applied, and there are issues about the duration of the relationship and how much it would have held up, it could have left the husband in a better position.  It would have also meant that the parties would have talked to each other and to legal counsel about their expectations, and could have received advice about how to behave to increase the chances that those expectations would be upheld.

About Mackrell International – Canada - Lindsay Kenney LLP is a full service business law firm with offices in Vancouver and Langley, BC and a member of Mackrell International. Mackrell International – Canada is comprised of four independent law firms in Alberta, British Columbia, Ontario and Quebec. Each firm is regionally based and well-connected in our communities, an advantage shared with our clients. With close relations amongst our Canadian member firms, we are committed to working with clients who have legal needs in multiple jurisdictions within Canada.

This article is intended to be an overview and is for informational purposes only.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions