How Courts Interpret Unclear Wills

unclear willHow Courts Interpret Unclear Wills?

Whether a will is prepared by a lawyer or a layman, it is often the case that the will or a portion thereof is unclear as to its intention or meaning, and when that is the case is referred to the Supreme Court of British Columbia to interpret the will or portion thereof that needs interpretation.

The   recent decision of Re Ali Estate 2014 BCSC 340,  involved in interpretation of the words” my interest in the company “.

The deceased owned shares of the company operated with his brother, and left an estate valued at $9 million including the company worth approximately 1/2 that amount .

The testator was owed a  shareholders loan as well as a debt  from  the company under a promissory note.

In his will the testator left 70% of my interest in the company to his brother.

On an application to  interpret the meaning of that clause, the court found on the proper interpretation of the will as a whole and in light of the circumstances known to the will maker  at the date of the will, that the testator intended the shareholders loan and the promissory note to be included in the bequest of his interest in the company.

THE  LAW Re INTERPRETATION OF WILLS

The general principles which govern the disposition of this matter are not controversial. In Thiemer Estate, 2012 BCSC 629, I summarized the governing principles as follows:

[45]      In construing a will, the objective of the court is to ascertain the intention of the testator as expressed in his or her will when it is read as a whole in light of any properly admissible extrinsic evidence: Rondel v. Robinson Estate, 2011 ONCA 493, at paras. 23-24; Theobald on Wills, 15th ed. (London: Sweet and Maxwell, 1993) at 199. It is a cardinal principle of interpretation that the testator’s intention is to be gathered from the will as a whole and not solely from those provisions which have given rise to the controversy: Perrin v. Morgan, [1943] A.C. 399 at 406 (H.L.); Re: Burke (1960), 20 D.L.R. (2d) 396 at 398-399 (Ont. C.A.).

[46]      Another fundamental tenet affirmed by an established line of authorities is that the court is to ascertain the expressed intention of the testator – the meaning of the written words used in the particular case – as opposed to what the testator may have meant to do when he or she made the will: Perrin at 406.

[47]      Earlier lines of authority endorsed an objective approach to will interpretation. However, modern jurisprudence recognizes that a strict literal approach can defeat the intention of the testator, thereby leading to unjust results: Law Reform Commission of British Columbia, Report on Interpretation of Wills, LRC 58 (Victoria, MAG, 1982) at 6. The liberal interpretive approach finds its roots in the seminal decision of the House of Lords in Perrin.

[48]      In keeping with contemporary judicial thinking, the courts of this province have favoured the subjective approach to interpreting wills, wherein the objective is to ascertain the actual meaning the testator ascribed to the words he or she used in the will. In determining the testator’s intention the courts have endorsed the analytical approach commonly described as the “armchair rule”. The rule requires that the court put itself in the position of the testator at the point in time when he or she made the will, and from that vantage point construe the language in the will in light of the surrounding facts and circumstances known to the testator.

[49]      In Re: Burke, the Ontario Court of Appeal articulated the guiding principles which were cited with approval by our Court of Appeal in Davis Estate v. Thomas (1990) 40 E.T.R. 107 (B.C.C.A.) and Smith v. Smith Estate, 2010 BCCA 106, at paras. 18 and 28 respectively:

… Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed and which might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator. When an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so.

 

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[51]      Since the meaning of words in wills can differ so much according to the context and circumstances in which they are used, previously decided cases are of limited assistance except in so far as they may express general principles of construction. This notion has repeatedly been embraced by Canadian courts: Kaptyn Estate (Re) at para. 32; Perrin at 406; Re: Burke at 398.

The court will also in its interpretation of the will, look to the ordinary meaning of words as per a reputable dictionary.

The Canadian Oxford Dictionary, 2d ed., defines interest as:

5 (a)     “A financial stake (in an undertaking, etc.)”.

(b)        “A legal concern, title or right (in property)”.

[32]         The Dictionary of Canadian Law, 2d ed. defines interest as:

Something which a person has in a thing when that person has advantages, duties, liabilities, losses or rights connected with it, whether ascertained or potential, present or future”

[33]         The ordinary meaning of “interest” is expansive and in my view the ordinary meaning of an “interest” in a company is not limited to shareholdings in that company. It follows that in gifting his “interest in the Company”, the Deceased intended to dispose of more than his shares in the Company. It is reasonable to conclude that in the context of the Will, the Deceased intended to bequeath the entirety of his financial stake in the Company, including any indebtedness owing to him by the Company, be it a shareholder’s loan or other debt evinced by a promissory note.

[34]         Recourse to the armchair rule and consideration of the circumstances known to the Deceased at the time he made the Will also support the conclusion that he intended that the Shareholder’s Loan and Promissory Note were to be included in the subject bequest.

 

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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