Clifford Winfield Burrows Sifton died when his daughter was only 13. He left property in trust for his daughter; the trustees are to make annual payments to/for her until she turns 40 (a discretionary trust). She is entitled to what the trustees think that she needs until she is 40. When she turns 40 she is to get the entire income for the remainder of her life. However, there is a clause stating that the payments are only to be made "so long as she continues to reside in Canada". Elizabeth brought at action for clarification on the meaning of this condition. The trial judge, and the appeal court judge had a hard time with the problem. In the result they essentially stated that there is no definite answer, and that the daughter will have to come back to court whenever she has questions about if something that she wants to do is permissible, and they will determine it on a case-by-case basis.
- What is the meaning of the condition, or is it voidable for uncertainty?
Appeal allowed, clause void for uncertainty.
Romer, writing for the unanimous court, says that in defeasible or determinable estates the terminating event must be examined from the grantee's point of view. The grantee has a right to know exactly what will make her lose her interest up front. Under the older law, there was a heavy presumption in favour of the person imposing the provision that it was certain enough – it was hard to show that it was uncertain. This totally reverses after this case; there is almost a presumption of uncertainty with regard to divestiture clauses. They have to pass a high bar in order to be sufficiently certain. The phrase "precise and distinct" is what is used to define the necessary standard for certainty.
In the case at bar, this is a defeasible interest, therefore the condition subsequent of living in Canada is stricken and the rest of the estate remains the same.
- Where there is any ambiguity of a forfeiture clause, it will be decided in favour of the grantee.
- There is a high bar that must be met in order for a clause to be certain, and it is always in favour of the grantee.
- In defeasible interests, if the condition subsequent is void then it is merely stricken and the grant becomes absolute.