B.C. Supreme Court rejects retroactive trust amendment tied to Witmar liquidation

The Kelowna Law Courts, where Justice Richard Hewson heard the applications in the latest stage of the Witmar Holdings family trust dispute.

File photo

---

A B.C. Supreme Court judge has rejected an attempt to apply a rewritten family trust provision retroactively in litigation connected to the ongoing liquidation of Kelowna real-estate company Witmar Holdings Ltd.

In an Aug. 25 decision, Justice Richard Hewson ruled that a trust provision rewritten in January 2026 can operate going forward, but cannot be used to change rights that existed before the amendment was made.

The ruling is the latest development in litigation surrounding Witmar Holdings, a family-owned company that has held real-estate assets for decades and is now being liquidated under a court order.

According to the judgment, Withold “Willy” Weisstock and Maria Weisstock incorporated Witmar in 1981 as a holding company for family real-estate assets. Their four children later became shareholders, either personally or through holding companies.

City of Kelowna records show Witmar and members of the Weisstock family were involved in local planning and development matters over a number of years. A 2006 application involving Witmar Holdings and Walter, Tony and Albert Weisstock proposed 224 apartment units on KLO Road, while a 2004 South Pandosy public hearing recorded Albert representing Witmar and himself as owners of properties on Meikle and Cedar avenues.

The family also held interests in Witmar through the Willy and Maria Weisstock Trust, established in 2012.

Liquidation ordered after shareholder dispute

In April 2020, Albert Weisstock, one of the four shareholders, began a proceeding under B.C.’s Business Corporations Act seeking liquidation of Witmar.

Justice D. Allan Betton granted Albert’s petition in 2022 and ordered the company liquidated. The B.C. Court of Appeal upheld that decision the following year, and the liquidation remains ongoing, according to the Aug. 25 judgment.

A separate legal dispute developed over a provision in the family trust that allowed the trustee to suspend distributions to or remove a beneficiary in certain circumstances, including where the beneficiary commenced specified legal proceedings involving a company in which the trust held shares.

On Feb. 2, 2022, shortly before the Witmar proceeding had originally been scheduled to be heard, Tony executed a deed purporting to remove Albert as a secondary beneficiary of the trust. Albert later challenged both the trust provision and the attempted removal.

Original provision found unenforceable

In a 2024 ruling, Betton found the original provision contrary to public policy.

The problem identified by the court was that the clause could allow a beneficiary to lose an interest in the trust for seeking a legitimate legal remedy, including where the proceeding was brought in good faith and succeeded.

Betton did not immediately determine the effect of that finding because another provision in the trust gave the trustee authority to amend a provision if a court found it unenforceable. That issue eventually brought the dispute back before the court.

In January 2026, trustee Antony “Tony” Weisstock executed a deed replacing the disputed provision.

The new language no longer made the commencement of a court proceeding itself the trigger. Instead, it permitted the trustee to act where a beneficiary took action reasonably determined to threaten the viability, value or operations of a company in which the trust held an interest.

The replacement provision could allow a beneficiary to be removed or distributions to be suspended or terminated. It also required the trustee to act in good faith and in accordance with fiduciary duties.

The deed stated that the new provision would operate retroactively to the creation of the trust.

Court says amendment can only operate going forward

Hewson upheld the rewritten provision itself, finding that the new language corrected the public-policy problem identified in the earlier decision and remained within the amendment authority provided by the trust.

The judge noted that the revised wording was broader than the original provision, but found that its underlying purpose remained protecting assets held through the trust. The new provision also imposed requirements of reasonableness, good faith and compliance with fiduciary obligations.

The court declared the replacement provision valid and enforceable on a prospective basis beginning Jan. 30, 2026.

Hewson rejected, however, the attempt to give the amendment retroactive effect.

The judge found that the amendment dealt with substantive rights, including who remained a beneficiary and who could receive distributions. Applying the new provision to earlier conduct would mean assessing that conduct under a standard that did not exist at the time.

Hewson characterized the trust’s amendment authority as a power to cure an unenforceable provision once a problem had been identified. Without clear language authorizing retroactive changes, that power could not be used to alter rights that had already arisen.

The portion of the January 2026 deed purporting to make the new provision retroactive was therefore declared invalid.

Earlier removal has no legal effect

As a result, the 2022 deed purporting to remove Albert as a secondary beneficiary was declared void and of no force or effect.

The court declared that Albert remained, and had at all times remained, a secondary beneficiary of the trust.

Albert also argued that Tony’s use of the amendment power amounted to what trust law calls a “fraud on a power,” or an exercise of the power for an improper purpose.

Hewson dismissed that branch of Albert’s application, but did not determine whether Tony had acted for an improper purpose.

The legal test required Albert to establish both that the amendment fell outside the authority granted by the trust and that the power was deliberately exercised for an ulterior purpose. Because Hewson found the amendment itself was within the scope of Tony’s authority, the first part of the test was not met and it was unnecessary to decide the second.

Tony’s cross-application was ultimately granted in part and dismissed in part.

The issue of costs remains open. The court gave counsel 30 days from the release of the judgment to make written submissions if a costs order is required.