- Payment sought based on independent valuation of estate of $12.5
million plus punitive damages
- Family suffered financial and physical hardship due to inheritance
not being disclosed for 50 years
- Potentially precedent-setting case raises serious issues for trust
companies, executors, estate planners, and families
TORONTO, Nov. 9 /CNW/ - A lawsuit brought against The Canada Trust Company, a division of TD Canada Trust, by the daughter of deceased Liberal MPP and Cabinet Minister, The Hon. Norman O. Hipel, has been scheduled for trial beginning December 1, 2009 before the Superior Court of Justice in Kitchener, Ontario.
The lawsuit, brought by Mr. Hipel's daughter, Norma Irene Jacques, who is 89, seeks the payment of $20 million in supplementary and punitive damages for the alleged breach of fiduciary duty, negligence, breach of trust, and other failures by Waterloo Trust and Savings Company (acquired by Canada Trust in 1968) in the handling of her father's estate. Waterloo Trust was the co-executor of Norman Hipel's estate from 1953-1968. Following the acquisition, Canada Trust, a wholly owned subsidiary of TD Canada Trust, continued as co-executor until 1978.
Norman Hipel was first elected an MPP in Ontario as the Liberal Party candidate for Waterloo South in 1930. He also served as Speaker of the House from 1935 to 1938 and held senior ministerial portfolios from 1938 to 1943. At the time of his death in 1953, he left his wife, Olive, who died in 1978, and two children, George, who died in 2004, and Norma.
For more than 50 years, Mrs. Jacques incurred significant financial and physical hardship raising her family of seven children and being wholly unaware of the substantial inheritance to which she was entitled.
In 2004, Mrs. Jacques, living in Calgary, suffered a debilitating stroke at age 84. While arranging her mother's papers and other possessions prior to the arrival of nursing support, Mrs. Jacques' daughter, Nancy Jacques Dasent, found an obituary of her grandfather, Norman Hipel, and for the first time learned of the impressive history of his life. Sensing that something was amiss in the family's financial affairs, in June 2004, she obtained copies of her grandparents' wills. For the first time, Mrs. Jacques was then made aware of the fact that she was entitled to 50 percent of the apparently substantial estates of her parents, Norman and Olive, including her father's company, N.O. Hipel Ltd.
There followed more than five years of an intense and costly investigative effort by Mrs. Jacques' family, led by Mrs. Dasent, to determine what had happened to the estates and to gather evidence supporting the allegations that are the basis of the lawsuit against Canada Trust.
"Ours has been a David vs. Goliath battle. We have had to overcome a concerted effort by TD Canada Trust to keep us from learning the truth of how Norman Hipel's estate was denied to my mother," says Mrs. Dasent.
"We have confirmed that although Ontario's Succession Duty Act was repealed in 1979, it remains applicable to anyone who died prior to its repeal. Under the Act, an Estate Trustee, such as Waterloo Trust was for the Hipel estate, is prohibited from destroying the records when the value of the estate exceeds $50,000 unless written consent is received from the Minister of Revenue. If the estate records are destroyed, the Estate Trustee is subject to penalties.
"However, Canada Trust has repeatedly told us that it does not have records of the Hipel estate. TD Canada Trust has produced exactly one file divider, denied us access to information, and we believe has purposely dragged out this case in an effort to exhaust our families' financial resources.
"In the face of this," Mrs. Dasent says, "we have taken the two wills of my grandparents, an obituary of Norman Hipel, a few scraps of paper, and a piece of correspondence and turned them into 29 boxes of documents to support this lawsuit."
As the family was gathering its evidence, Mrs. Jacques filed her lawsuits in 2005 against the estate of her brother, George Hipel, and The Canada Trust Company. Mrs. Jacques alleges that Canada Trust therefore is liable for her unrealized inheritance as a beneficiary of her father's estate.
Mrs. Jacques alleges that Waterloo Trust breached its fiduciary duty by failing to administer, account for, and distribute her entitlement to her. Mrs. Jacques claim seeks or alleges the following:
- damages "for breach of trust and breach of fiduciary duty in an
amount equal to one-half the value of the estate of Norman Hipel...
as it should have been but for the improvident depletion of assets to
the benefit of George Hipel, deceased and others." The terms of
Norman Hipel's will put his estate in Trust until the death of his
- that Waterloo Trust negligently and in breach of trust permitted N.O.
Hipel Ltd., the principal asset of the estate, to be mortgaged and
mismanaged without due regard to Mrs. Jacques' entitlement. At the
time of Norman's death in 1953, N.O. Hipel Ltd. was a flourishing
lumber, coal, construction, and manufacturing company located in
Preston, Ontario and was one of the leading industries of its kind in
- that Waterloo Trust's breach of trust allowed George Hipel to assume
control of N.O. Hipel Ltd. and unchallenged, he plundered the company
for his own unjust enrichment;
- damages "arising out of the negligence of Waterloo Trust and Savings
Company to profitably manage the operations of N.O. Hipel Ltd.";
- "damages to compensate the plaintiff for the lost opportunity to
enjoy the proceeds, invest or otherwise benefit from her receipt of a
capital distribution"; and
- that Canada Trust is in a breach of trust and in breach of its
fiduciary duty to Mrs. Jacques by failing to account to her and
failing to provide her with her entitlement in the estate of her
father Norman Hipel and that the true nature of Mrs. Jacques'
entitlement was fraudulently concealed from her.
In addition, Mrs. Jacques is seeking punitive and exemplary damages "for the emotional shock suffered in June 2004 upon learning of the complete failure of Waterloo Trust to act in accordance with its fiduciary duty."
This case raises many serious issues for executors, estate planners, trust companies, and families, including a number of significant questions. Among those are the following.
1. How was it seemingly possible for executives of a trust company to
keep Mrs. Jacques unaware for decades of her entitlement to this
2. How was it possible for a trust company to permit the draining of
assets from the estate and the ruination of its chief asset?
3. How is it possible that the full value of the assets of Norman
Hipel's estate was never disclosed on probate and why is there no
evidence that the executors, including Waterloo Trust, ensured that
the required Succession Duty taxes were paid?
4. Why has there never been an accounting of the disposition of the
5. How is it possible that a trust company can be unable to locate any
files whatsoever concerning the estate of Norman Hipel, for which it
was responsible as executor for more than 25 years?
6. How is it possible that a trust company's fiduciary records, which
are protected under all applicable law (including the Succession Duty
Act of Ontario), could be non-existent regarding this estate?
The Superior Court of Ontario, on January 4, 2008 dismissed a motion by Canada Trust seeking to dismiss Mrs. Jacques' claim. In its reasons, the Court noted that "Canada Trust is unable to produce any releases which it says would have been obtained after Olive's death in 1978 when Norman's estate was wound up... which could then lead to an inference that it breached its duty to Norma as one of the estate's beneficiaries."
The Court further noted that "there is no evidence that Norma received notification of her entitlement to share in Norman's estate. There is no evidence that Norma received her share of Norman's estate."
Mrs. Jacques has been represented throughout these proceedings by David M. Smith, a partner of Hull and Hull LLP, Toronto, a recognized leader in the field of Estate and Trust litigation.
Earlier this year, Mrs. Jacques received an email from a former Director of another Canadian bank. Calling Mrs. Jacques' story "troubling", he wrote "On the surface it would appear that TD Bank acquired Waterloo Trust and Savings and incurred a contingent liability that is now subject to litigation. With the great power and resources available to the bank it could outlast the aging Norma (Hipel) Jacques by skillful legal maneuvering. It is my hope that some member of the Board of TD Canada Trust will have the courage to ask management whether it is the bank's intention to stall a senior citizen's claim or, alternatively to expedite the legal process so justice can be done and so all of us can have faith that the bank conducts its affairs with exceptional integrity."
BACKGROUND ON THE HONORABLE NORMAN HIPEL
Norman Otto Hipel, born March 21, 1890 in a log shanty in rural Waterloo Township near Breslau Ontario, was a highly successful business man, politician, and humanitarian. He left school at age 14 to work as a laborer to help his father support his three siblings and finished his education by correspondence course. After learning carpentry from his father, he started his own lumber and construction company, N.O. Hipel Ltd. in 1920 in Preston, Ontario. Through diligence, perseverance, and continuous study, he succeeded in building a flourishing company, and having a distinguished political career.
Mr. Hipel's political career began in 1921 when he was elected to the Preston town council. In 1922 he became the town's Reeve and then Mayor in 1923-1924. In 1930, he ran as the Liberal Party's candidate to represent Waterloo South in the Ontario Legislator and was an elected an MPP. He was re-elected in 1934, served as Speaker of the House from 1935 to 1938, and represented the province of Ontario at the coronation of George VI. From 1938-1943, Mr. Hipel served as Minister of Labour, Minister of Public Works, Minister of Lands and Forest, and Provincial Secretary and Registrar. He was elected President of the Ontario Liberal Association in 1947. His many political achievements ranged from co-authoring the Unemployment Insurance Act to heading the War Effort for the province of Ontario. His legacy continues to benefit the citizens of Ontario.
In 1953, at 63 years of age, Mr. Hipel died of a heart attack. At the time of his death, Prime Minister Louis St. Laurent stated that "it was with deep regret" that he learned of Mr. Hipel's passing after "such a notable career", and Leslie M. Frost, Premier of Ontario, stated that Mr. Hipel "gave freely of his time and talents in his service to his community and province and his steadying influence and wise council will be missed." The local newspaper stated that "few men in the riding have had the distinctive record of public service, undertaken in a spirit of true Canadian citizenship and still retained the human touch that was exemplified by the deceased."
At the time of his death, Mr. Hipel left his wife, Olive and two children, George and Norma.
SOURCE NANCY DASENT
For further information: For further information: Richard (Dick) Wertheim, Managing Partner, Wertheim + Company Inc., (416) 594-1600 or (416) 518-8479 (cell)