Canada: SA v Metro Vancouver Housing Corp, 2019 SCC 4

Last Updated: August 8 2019
Article by Dale Orlando and Ryan Marinacci

Could an interest in a Henson trust set up for care and maintenance be treated as "assets" adversely affecting eligibility to participate in a rental subsidy program?

No, according to the recent Supreme Court of Canada decision in SA v Metro Vancouver Housing Corp, 2019 SCC 4 [ link].

What happened?

SA received disability benefits and lived in subsidized housing owned by the MVHC which required meeting financial eligibility criteria on an annual basis. Rental assistance was discretionary—the soft cap was $25,000 in assets. Any assets over that amount had to be disclosed on the annual Application.

After her father died, SA inherited one third of his estate. The terms of the will appointed SA and her sister as co-trustees. After becoming aware of the trust, the MVHC demanded that SA disclose the balance. SA refused and the MVHC stopped paying the subsidy, treating SA's application as incomplete.

Both SA and the MVHC petitioned the British Columbia Supreme Court on the issue of whether SA's interest in the trust had to be disclosed on the Application. The chambers judge sided with MVHC and held that the term "assets" in the Application was broad enough to encompass SA's interest in the trust.

A unanimous panel of the Court of Appeal dismissed SA's appeal and imported the expansive definition of "assets" from the MVHC Asset Ceiling Policy into the Application. It concluded that the MVCH was entitled to request the information concerning the trust in determining whether to provide rental assistance.

A majority of the SCC disagreed. The Majority found that Henson trusts could not be treated as enriching the person with disabilities for whom the trust was settled. Rather, these trusts were structured such that the trust property was beyond that person's control, which allowed for entitlement to social assistance benefits despite granting a contingent interest to disbursements of funds for care. Indeed, this was the very reason why Henson trusts were used as a means of setting money aside for persons with disabilities.

The court's reasoning

SA's interest in the trust

At the outset, the majority found that SA's status as a co-trustee was irrelevant because all decisions had to be unanimous and a new co-trustee could be named only if SA's sister was unwilling or unable to act as a trustee (as opposed to unwilling to make distributions to SA). This prevented SA from unilaterally issuing payments to herself.

The majority then made two important findings with respect to SA's interest in the trust. First, it found that the trustees (SA and her sister) had no obligation to make payments. SA did not have an enforceable right to receiving anything unless and until the trustees exercised their discretion in her favour. By contrast, among the beneficiaries of fixed trusts there existed a legally enforceable right to the distribution of funds by virtue of the obligation on trustees to distribute those funds. They could sue the trustees to distribute the funds.

Second, SA could not unilaterally collapse the trust under the rule in Saunders v Vautier.1 This rule allowed for a beneficiary to terminate a trust and demand legal title over the remaining assets if it had capacity and was absolutely entitled to all the rights of beneficial ownership in the trust property. SA's interest in the trust was not absolute because any remaining assets would pass to third parties upon her death and she could not name herself or her creditors as remainder beneficiaries.

Based on those two reasons, the majority found that SA's interest in the trust was akin to a "mere hope" that some or all of its property would be distributed to her at some point in the future.

The proper interpretation of the word "assets" in the Assistance Application

Contrary to the BCCA, the majority declined to import the definition of "assets" from the Asset Ceiling Policy into the Application given the lack of evidence that SA and the MVHC understood that to be the case.

Instead, the majority reasoned that the plain meaning of the word "assets" denoted valuable property that a person could use to discharge debts and other liabilities. This was consistent with the purpose of the Rental Assistance Program, which was to provide rent subsidies to those in need.

As such, the court found that there was no reason why the MVHC would consider a financial resource such as a contingent interest in a trust that an applicant could not use to pay their rent in their decision about whether to grant a rent subsidy.

SA's interest was not within the meaning of "assets" in the Application

The majority determined that the trust only provided SA with a "mere hope" of receiving some or all of the property at some point in the future. Unless the trustees actually decided to make a distribution, any interest was not in practice something that SA could rely on to pay rent.

The court concluded that the MVHC was entitled to request information concerning the structure of the trust to determine whether the interest could be characterized as an asset. However, because SA had already done so, and given the majority's conclusion that her interest was not an asset within the meaning of the Agreement, she did not have to disclose any information on the value of the trust.

Future application

Finally, the majority provided the caution that this did not mean that interests in Henson trusts would never be considered assets. The inquiry was fact-specific, and would depend on the statutory and contractual language, as well as the overarching purpose of the program. The eligibility criteria of any social benefits program had to be analyzed on their own terms to determine whether an interest in a Henson trust factored into any applicable means-test.

This passage significantly narrows the holding of this case and provides at least one avenue for distinguishing this case in the future.

The contractual and statutory language governs. Simply put, the legislature or a social benefit provider could define "assets" to include interests in any discretionary trust and this case would not apply since the Rental Assistance Application at issue was silent on the definition of asset.

Indeed, the majority declined to award special costs on the basis that the matter was not of exceptional public interest because at issue were social benefits available only to the MVHC tenants.


1 (1841), Cr & Ph 240, 41 ER 482.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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