In The Matter of John Horvath

In The Matter of John Horvath

The trust deeds were rescinded because the settlor acted under a fundamental mistake as to their legal effect (he did not intend to alienate ownership or control); the deeds were inexpertly drafted by a notary, the settlor had limited English and relied on incorrect advice, the trusts were voluntary with no...

Source-derived case information.

Citation
2000 BCSC 117
Parties
Applicant / Settlor: John Horvath; Guardian Ad Litem for Infant Beneficiaries: Guardian ad litem; Beneficiaries (infants, Ages 10 and 9): Children (two daughters); Drafter of Trust Deeds (respondent by Implication): Notary Public; Public Trustee (notified): Public Trustee
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
20 January 2000
Procedural Posture
Application to Revoke/inter Vivos Trust for Mistake / Application Heard and Judgment Given (rescision Granted)
Outcome
Application granted; trust agreements rescinded and declared void; corpus of trust to be returned to settlor
Legal Topics
Mistake, Rescission, Voluntary Settlement, Inherent Jurisdiction, Guardian Ad Litem/public Trustee Involvement
Source Language
english
Trusts Equity Property Law Family Law (matrimonial) Mistake Rescission Voluntary Settlement Inherent Jurisdiction +1 more

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Parties

John Horvath

Applicant / Settlor

Guardian ad litem

Guardian Ad Litem for Infant Beneficiaries

Children (two daughters)

Beneficiaries (infants, Ages 10 and 9)

Notary Public

Drafter of Trust Deeds (respondent by Implication)

Public Trustee

Public Trustee (notified)

Procedural Posture

Application to Revoke/inter Vivos Trust for Mistake / Application Heard and Judgment Given (rescision Granted)

Legal Issues

  1. 1 Whether the trust agreements could be revoked for fundamental mistake as to their legal effect
  2. 2 Whether the settlor intended to divest himself of ownership and control
  3. 3 Whether equity permits rescission of a voluntary trust made without consideration

Ratio Decidendi

The trust deeds were rescinded because the settlor acted under a fundamental mistake as to their legal effect (he did not intend to alienate ownership or control); the deeds were inexpertly drafted by a notary, the settlor had limited English and relied on incorrect advice, the trusts were voluntary with no consideration, and equity supports rescission in these circumstances.

Court Disposition

Application granted; trust agreements rescinded and declared void; corpus of trust to be returned to settlor

Orders

  • Trust agreements rescinded and declared void
  • Property comprising the corpus of the trusts to be transferred back to the petitioner (mechanics to be dealt with by counsel)