SA v Metro Vancouver Housing Corp, 2019 SCC 4

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...