At issue       

Sometimes estate assets have commercial value, other times emotional attachment, and frequently both. That last situation is ripe ground for estate disputes.

I have a friend who was a shareholder in a business corporation which owned Toronto Maple Leaf season tickets used to entertain clients. When the team moved from the Gardens to its new home at Air Canada Centre, the new tickets (and this may have been true of the old ones) were required to be held in his personal name, not in the name of the corporation as they had been at the time. When the corporation was wound down a few years later, one of the shareholders bought out the tickets, and they all shook hands and called it a day.

Their amicable resolution contrasts sharply with a recent case where an estate’s claim to Leaf tickets was opposed by the deceased’s business colleagues. But first, here are a few cases as warmups to the main event.

Fobasco Ltd. v. Cogan, 72 O.R. (2d) 254 [1990]

When major league baseball arrived in Toronto in 1976, Cogan subscribed for eight Blue Jays season tickets. Six of the eight tickets were subsequently offered to and paid for by the plaintiffs. Cogan advised in 1986 that he would soon cease making the tickets available to the plaintiffs, and though the dispute was settled for a time, he stopped sharing the tickets in 1989 when the Jays moved into the Skydome.

The plaintiffs failed in all their arguments under contract, resulting or constructive trust, and fiduciary duty. Importantly on the trust arguments, the judge found that Cogan initiated the purchase for his own benefit vis-à-vis the Blue Jays, then extended an offer to the plaintiffs.

Byers v. Foley, 16 O.R. (3d) 641 [1993]

The parties were members of a men’s softball team that decided to purchase Toronto Blue Jays season tickets beginning in 1983. Two of the teammates were designated to make the arrangements, and their names were recorded in the official records. In 1989 those two advised the others that they were no longer going to share the tickets.

The plaintiffs commenced an action based on constructive trust. As both the certainty of subject-matter (the tickets) and objects (the parties) were ascertained, the only issue was whether the third certainty of intention to create a trust had been met. In distinction to Fobasco v. Cogan, the purchasers acted on behalf of the group from the beginning, leading the judge to hold that the purchasers held the tickets as trustees throughout.

Trustee of estate of A.M.K. Investments Limited v. Kraus, (1996) 42 CBR (3d) 227

Kraus was listed as the licence holder for Toronto Raptors season tickets. His corporation, AMK, paid for and used the actual tickets. After AMK was petitioned into bankruptcy by its creditors, Kraus contended that he continued to own the ongoing licence. 

The judge acknowledged the distinction between the licence and ticket purchase, but found on the facts that AMK funded the cost of both. Kraus was held to be trustee under a purchase money resulting trust in both respects, and was ordered to transfer the licence to AMK.

Anspor et al v. Neuberger, 2016 ONSC 75

Chaim Neuberger and Harry Sporer emigrated from Poland to Canada, launching a successful construction business in partnership as Nuspor. In the late 1960s or early 1970s, a business contact brokered a deal for the two to purchase Toronto Maple Leaf season tickets from its then-owner Harold Ballard. They were advised (incorrectly, though nothing turns on the point) that the tickets could not be held by Nuspor, so they decided to register in Neuberger’s name alone.

After Neuberger’s death in 2012, his daughter as executor took the position that the tickets were his personally, and in turn belonged to the estate. The plaintiffs argued that Nuspor was always the beneficial owner, with Neuberger (and later the estate) serving as trustee.

As in Byers, the facts and surrounding conduct showed that the tickets were being acquired for Nuspor, not Neuberger personally. Furthermore, and akin to AMK v. Kraus, Nuspor paid all amounts, thus satisfying the requirements of a purchase money resulting trust. The executor was ordered to transfer the tickets to Nuspor.

Practice points
  • Though these cases all involve Toronto franchises, a quick search of news and legal databases reveals that the issue crosses many borders – both geographic, and between here and the hereafter.
  • Inherent in the estate cases is that a person cannot pass on a better title than was held during life. Indeed, the estate will be bound by any restrictions imposed upon the living person, and will likely be required to extricate itself from any continuing involvement.
  • Whatever the commercial requirements of any sports club, it would be a good idea for any pooled ownership arrangements to be backed-up by clear documentation acknowledged by all purported owners and trustees.