Charitable Intent Found In Impractical Trust, Cy-Pres Doctrine Applied

Bentley v Anglican Synod of the Diocese of New Westminster 2009 BCSC 1608 is indicative of the type of litigation that can ensue between various charities that are or had previously been closely aligned.

Several churches in recent years have undergone bitter disputes amongst its congregation to do with issues such as same-sex marriage.

The elderly testatrix bequeathed property in Hong Kong worth approximately $2.2 million to “the building fund of the Church of the Good Shepherd”, which was her home church.

However due to the decision of the Bishop to authorize the right for blessing of same-sex relationships, several congregations left the diocese, including the named church.

The plaintiffs brought an application for an order for a cy-pres scheme for the proceeds from disposition of the property, and succeeded.

The court found that the bequest was to the parish, not the congregation.

The incorporating declaration of the parish stated that it was “Chinese community in Greater Vancouver Regional District”

The court found that the testatrix intended the proceeds to be applied to build the needs of the parish serving the Chinese community.

However all the churches with substantial Chinese congregations had left the diocese and affiliated with the Anglican Network in Canada.

Accordingly the court found that it would be unlikely there would be a need in the diocese for new building for the Chinese community.

Accordingly the court ordered a scheme for the funds to be held for the building needs of the Anglican Network in Canada congregation that best fulfilled the testatrix charitable intent.

The decision contained a good deal of discussion on the doctrine of cy-pres:

 

” The approach to determining a testator’s intention was recently set out in Re Johnston Estate, 2008 BCSC 1185 at para. 18, 42 E.T.R. (3d) 286:

When attempting to glean a testator’s intentions in the context of a possible charitable bequest, the law has taken a broad approach with a view to finding such an intention where the evidence supports it.  It is not a matter of asking what a reasonable person in the place of the testator would have meant, but rather attempting to discern what the specific testator meant when he or she made the bequest. The Will itself is the primary source of that intention, but it is not the only source. Regard may be had to the surrounding circumstances, and that is so whether on its face the Wll is ambiguous or not.

Cy- pres is a remedy used to save an existing trust that is otherwise impossible or impracticable to perform. Donovan W.M. Waters, ed., Waters’ Law of Trusts in Canada, 3rd ed. (Toronto: Thomson Carswell, 2005) at 773 describes the cy-pres doctrine in these terms:

It sometimes happens that when the donor’s instrument of gift takes effect, the charitable object or the required mode of achieving the object cannot be carried out. The court will then by order approve a scheme, or require a scheme to be drawn up, for the trust property to be applied to an object or mode of achieving the object which is as close as possible to that set out by the donor.  For the court to have this jurisdiction two things must be established; first, that it is impossible to carry out the object or mode of attainment, or, if it is indeed possible, that to carry out the object or mode would in the circumstances be impracticable. Second, it must be shown that the donor in making the gift had a general or overriding charitable intent. If both tests are satisfied, then the court as part of its inherent jurisdiction will, in its discretion, make the appropriate order for a cy­pres scheme.

[323]  A number of prerequisites to cy-pres jurisdiction can be drawn from the foregoing:

(1) the donor must have transferred property in trust for a particular charitable purpose or object;

(2) it must be impossible or impracticable to administer the trust according to that purpose or object; and

(3) the donor must have demonstrated a general or overriding charitable intent. Where these conditions are met, the court then has jurisdiction to order a scheme for the trust property that is as close as possible to that intended by the donor.

[324] An example of a case involving religious property in which the cy-pres doctrine was invoked is Parish of Christ Church v. Canada Permanent Trust Co. A testator left part of his estate in trust for a parish corporation. The trust income was permitted to be used for church repairs but the capital was only to be used for the purpose of constructing a new church, whenever that might occur. Parish members applied to vary the terms of the trust on the basis of the cy-pres doctrine. They argued that the existing historical building required extensive repairs and renovations, and they sought to be permitted to direct the funds to that purpose. They additionally submitted that even if the church were accidentally destroyed some time in the future, insurance proceeds would cover the cost of rebuilding.

[325]  Rogers J. held that the arguments advanced by the plaintiffs did not justify application of the cy-pres doctrine. He observed that though laudable, the plaintiffs’ present desire to preserve the old church did not bind future church officials who might hold a different view of the matter. He also considered irrelevant the fact that the church was adequately insured, as it could not be assumed that the policy would always be in force or cover every contingency. Ultimately, Rogers J. wrote, the Court had to concern itself with the wishes of the testator as to the disposition of the property, not the wishes of others; the testator’s intention in that case was clear.

[326]  In Re Lysaght, [1966] 1 Ch. 191 (Chancery Div.), is another example of the doctrine being invoked. The testatrix had bequeathed funds to the Royal College of Surgeons for scholarship purposes. A recipient had to be “of the male sex and the son of a duly qualified British born medical man … and any such student must be a British born subject and not of the Jewish or Roman Catholic faith”.   The Royal College declined to accept the bequest on those terms, stating that the exclusion of students of the Jewish and Roman Catholic faiths was “so invidious and so alien to the spirit of the college’s work as to make the gift inoperable in that form.” (It did not appear to object to the other restrictions.) The College was willing to accept the gift with that provision deleted.

[327] The Court held that the paramount intention of the testatrix was that the College be the trustee of an endowment fund. If the provision requiring religious discrimination was insisted upon, the College would disclaim the trust and thus defeat the testatrix’s paramount intention entirely. Performance of the trust was therefore impracticable. The Court ultimately ordered that the trust as set out in the will be amended by omitting the words “and not of the Jewish or Roman Catholic faith”. As the Court wrote at 207, “[t]he impracticability of giving effect to some ineffectual part of the testatrix’s intention cannot, in my judgment, be allowed to defeat her

Will Invalid For Not Being Signed At Its End

Will Invalid

Ellis v Turner 20 ETR (2d) 306 BCCA involved a decision of the British Columbia Court of Appeal were by the court upheld the trial judge’s decision that the will of the deceased was invalid by reason of the fact that he printed his name at the top of the will document but not at the bottom of the document.

The will was declared not to be testamentary and the testatrix was declared to have died intestate

Section 4 of the wills act says that subject to section 5, a will is not valid unless at its end is signed by the testator or signed in his name by some other person in his presence and by his direction.

The same provision also provides that the testator must make or acknowledged his signature in the presence of two or more attesting witnesses present at the same time, and that two or more of the attesting witnesses subscribe the will in the presence of the testator.

” The Wills Act creates a scheme designed to insure that a document purporting to be a testamentary disposition is in fact the will of the testator. A strong indicia of authenticity is proof that the will was signed at its end in the presence of witnesses. This Court must interpret, apply and respect the law as passed by the legislature. To declare the will in this case to be valid would be to by-pass the clear provisions of the Wills Act and to create a discretion in this Court which is not found in the Act. This is something which we cannot do.”

Marriage Separation Agreement Not a Bar to a Wills Variation Claim

Marriage Separation Agreement

Ward v. Ward et al, 2006 BCSC 448 is one of a few BC court decisions that hold that a marriage separation agreement is not a bar to a claim subsequently brought under the Wills Variation act by a surviving former spouse.

 

The rules applying to Wills Variation claims are different from the harsher divorce laws as per the Supreme Court of Canada’s decision in Hartshorne v Hartshorne (2004) SCJ  NO. 20 ( SCC)

 

The defendants,  Ward and David  Ward, are beneficiaries of their deceased father’s estate. Their father, David Forsyth Ward, divorced their mother and, in 1986, married the plaintiff, Shirley Ann Ward.

Two days before their wedding, David Forsyth Ward and Shirley Ann Ward signed a pre-nuptial agreement (the “marriage agreement”), clause 14 of which states:

14.      The Wife is not either during the Husband’s lifetime, or after his death, should he predecease her, save and except as may be expressly provided in a valid Will and Testament of the Husband, to take, claim,demand or receive any right in any property that he might own at his death, nor is she to demand, take or receive any dependant’s award or allowance as provided for by the Wills Variation Act, or similar legislation; AND SAVE as otherwise herein provided each party hereby forever waives, releases and relinquishes to the other and to the heirs, executors, administrators, devisees, legatees and assigns of the other all rights, interest or claims of inheritance and to a distributive share in the estate of the other (in the event of intestacy), either as widow, widower, heir, survivor, distributee, or next of kin in and to all of the estate of the other whether now owned or hereafter acquired.

David Forsyth Ward died in September 2004. By a will dated December 22, 2000, he left the entirety of his estate, with the exception of his pension benefits, to his two adult sons (the “will”).

In April 2005, the plaintiff commenced an action claiming, in part, under s. 2 of the Wills Variation Act, R.S.B.C. 1996, Chap. 490, for a declaration that the will fails to make adequate provision for her proper maintenance and support.

The court firstly reviewed some existing case law :

“In Boulangerv. Singh, [1984] B.C.J. No. 3163 (C.A.), the court upheld the decision of the trial judge that the separation agreement was not a bar to recovery under the Wills Variation Act. Without discounting in any way the evidentiary importance of the separation agreement, the court said this:

Thus, an agreement between parties may be perfectly suitable at the time it is made, and it may be treated as binding upon the parties during the lifetime of the testator. But, having regard to the scope and policy of the statute and the public interest, the moral duty of the testator may have to be reviewed in a wider context, and in the light of the circumstances existing at the date of the death of the testator.

Later, the court referred to the “facts of their marriage, separation arrangements and conduct after separation” as affecting the appellant’s moral claim upon the testator (at para. 29). The court reapplied the Boulangerlest in Wagner v. Wagner Estate, [1991] B.C.J. No. 3404 (C.A.). There, the court reaffirmed that the moral duty must be assessed as at the date of the death of the testator.”

 

  Finally, counsel referred to the trial and appellate court decisions in Chutter v. Chutter Estate. I need only refer to the latter, found at [2000] B.C.J. No. 653 (CA), in relation to the issue at hand, namely whether the agreement operates as an automatic bar. Mackenzie J A., for the court, stated:

The trial judge correctly, in my respectful view, did not consider the separation agreement to be an automatic bar to the appellant’s claim, but that it was a factor to be considered in weighing the merits of the appellant’s moral claim, (para. 9)

What Does a Hotchpot Clause In a Will Mean?

Hotchpot clause has been around since at least the 12th Century, although disinherited.com has seen fewer in more recent years than even 25 years ago.

The purpose of such a clause in a will is to equalize the benefits that beneficiaries have or will receive, as advances during the life of the testator, so as in the words of Re Cosier (1897) 1 Ch. 325 ( C.A.)” :

“What is the object of every hotchpot clause? It is simply to prevent a person to whom a testator has left a share of his estate, and who has been advanced in the testator’s lifetime, from obtaining, by the combined effect of the bequest and the advance, more of the testator’s property than he intended the legatee should have.”

 

Black’s Law Dictionary defines “hotchpot” as:

“the blending and mixing [of] property belonging to different persons, in order to divide it equally.

Anciently applied to the mixing and blending of lands given to one daughter in frank marriage, with those descending to her and her sisters in fee-simple, for the purpose of dividing the whole equally among them; without which the daughter who held in frank marriage could have no share in the lands in fee-simple. Hotchpot or the putting in hotchpot, is applied in modern law to throwing the amount of an advancement made to a particular child, in real or personal estate, into the common stock, for the purpose of a more equal division, or of equalizing the shares of all the children.”

Thus in order to achieve this equity, the testator might in his will refer to the fact that certain property :

 

1) has already been transferred and that it should be brought into account by hotchpot;

2) a debt owing at death is in turn converted into an advancement by way of a loan and brought into account by hotchpot

– See more at: http://www.disinherited.com/blog/what-does-hotchpot-clause-will-mean#sthash.g6kiB7FU.dpuf

Estate Funds Not to Be Used To Defend Wills Variation Claim ( S. 60 WESA)

Injunction

Defendants may not use estate funds to defend their personal interests in wills variation cases ( now section 60 WESA)

As plaintiff’s counsel, Steernberg v. Steernberg Estate (2007), 33 E.T.R. (3d) 78, 74 B.C.L.R. (4th) 126, 40 R.F.L. (6th) 106, 2007 BCSC 953, 2007 CarswellBC 1533, Martinson J. (B.C. S.C.); additional reasons to (2006), 2006 CarswellBC 2751, 32 R.F.L. (6th) 62, 28 E.T.R. (3d) 1, 2006 BCSC 1672, [2006] B.C.J. No. 2925, D. Martinson J. (B.C. S.C.)   is one of my favourite cases, primarily for the reason in the headnote.

Prior to this case, it was not uncommon for defendants to routinely use estate funds in the hope of depriving a plaintiff of sufficient resources to continue the fight.

Steerberg levels the playing field  by making each party pay for their own legal costsas the litigation proceeds,  save for the executor, who must remain neutral in the litigation.

Here are the facts of Steerberg:

The Wife, husband’s son, husband’s three daughters and husband’s brother-in-law were beneficiaries under husband’s will.

The  Plaintiff wife challenged husband’s will — Husband’s son was executor of will.

An Offer to settle made under R. 37 of Rules of Court, 1990 was signed by son as executor and other four beneficiaries, but not on behalf of son in his personal capacity as beneficiary

Legal fees for defendants’ litigation counsel of $148,250.62 and legal fees of counsel for executor of $72,895.24 were deducted before net values of estate were calculated

Shortly after the  trial ended and before reasons for judgment were issued, the estate paid defendants’ litigation counsel’s invoice of $60,700

None of these payments were made or recorded with wife’s consent and no funds from estate were made available to wife before, during or after trial for her legal fees.

During the trial, the wife raised concern that defendants took substantial sum of money out of estate for legal fees to defend action before trial started

Parties agreed that issue would be decided after Court gave its decision on whether will should be varied

Aubsequent to the trial this hearing was held to determine that issue and costs generally

It was inappropriate to withdraw funds from estate at start of litigation, or throughout course of litigation to fund defence of Wills Variation Act claim in absence of court order or unanimous agreement of beneficiaries

 In Wills Variation Act claim validity of will itself was not being challenged and there was no need for executor to “defend” will

The son was not entitled, in his neutral role as executor, to make a R. 37 offer and he did not join in the offer in his personal capacity as beneficiary

It was not offer made on behalf of all persons beneficially interested in assets of estate and hence would not be binding on estate

The losiing beneficiaries must pay wife’s costs personally, not out of estate

It was directed that executor pass his accounts before Registrar and that Registrar enquire into and make recommendations with respect to net value of estate after taking into account appropriate legal fees and income that ought to have been earned on funds had they remained invested.

Conditional Gift In Will Found Invalid

conditional gift
A Conditional gift in will is surprisingly common, and depending on their particular proviso, the Court may or may not uphold the gift.
The 1996 BC case of Unger v Gossen is a case where the conditional gift was found to be invalid.The testator in BC left the residue of his estate to nephews who lived in a foreign communist country, the USSR , provided they become residents of Canada within 15 years of her death.

If the nephews did not fulfill this immigration condition, or died before qualifying, then the children of that nephew were to receive his share on the condition that they become residents of Canada within 16 years of the testators death

The testator became mentally incapable to change her will after communism collapsed in the country before her death.

The nephews by operation of law were not able to become residents of Canada. An expert opinion from an immigration lawyer opined that due to the selection criteria set out in the Immigration Act, none of the nephews would be eligible to immigrate to Canada.

All of the potential beneficiaries agreed that the estate should be divided equally amongst the nephews, and the executor sought a Court order to that effect.

The Court found the conditional gift to be a condition precedent that should be found to be invalid.

The Court held that the main consideration of the testator was her intention to provide for the nephews, and the condition precedent she provided was impossible to perform due to the laws of Canada’s Immigration Act.

The purpose of the condition precedent was to ensure that her estate went to the nephews directly, and did not fall into the hands of the Communist government, which was known to occur.

It was the gift, and not the condition precedent that was the testator a motivation, and the performance of the condition was not the very reason for the gift, and thus the condition failed.

The court reviewed several similar decisions, as well as Feeney, the Canadian Law of Wills, 3d edition at page 246, that stated in part that condition precedents in wills that are impossible to perform, that are so known to the testator, should be disregarded. It must be shown that the performance of the condition was not the sole motive for the bequest.
Similarly, if the impossibility was not known to the testator, or if the condition when created was possible, but has since become impossible by an act of God, or a contrary law, or some act not attributable to the testator, then both the legacy and the condition are void.

– See more at: http://www.disinherited.com/blog/conditional-gift-will-found-invalid#sthash.4yH7wqci.dpuf

Beware The Words Issue Per Stirpes and Per Capita

Legal terms

Issue per stirpes and per capita should not be used when drafting wills.

There seems no end to the ongoing litigation that arises in will interpretation cases due to the coontinued use of the legal terms” issue per stirpes” or “issue per capaita” and other such technical words in wills drafting.

The said words have been around for centuries and have very specific meanings in legalese, but the problem conitnues to be that they are often used.

incorrectly and lead to the very litigation that they were presumably used to avoid

The Ontario Court of Appeal case of Dice v Dice Estate 2012 CarswellOnt 8608 is juut the latest of a plethora of caselaw that has developed due to the

misuse of these terms of art.

Disinherite.com has written  previous articles  thata are on the website realting to Wills Drafting that explain in more detail where the confusion mostly occurs

The word “issue” used only by itself has been interpreted to mean all of the lineal descendants of the deceased, which can often be a huge number

 

“issue per stirpes” means that if a child of the deceased predeceases the testator, then in that event, the share “goes down” to the children of the

predeceased child,  the grandchildren,  instead of the surviving children.

“Issue per capita” means that the predeceased child’s children do not inherit and instead the share of the deceased child instead goes equally to the surviving

children, the siblings.

In the Dice case the deceased left his  estate to his wife for her lifetime use and then the residue to the two children “per stirpes”

One child died in 2000 and the wife died in 2010.

Both the children of the deceased child, as well as the surviving child claimed the share of the deceased child

The court awarded the share to the children of the deceased child, holding that the words “per stirpes” were deliberately used as the testator realized that one

child might die before his wife which is what happened.
The court held that despite no conclusive authority existed, it did not need to as the most logical meaning was that the use of the phrase conveyed the intention

to benefit the testator”s children”s children,  ie grandchildren

Per stirpes had to have some meaning and the court of appeal upheld the trial judges finding that the grandchildren inherited their deceased parents share

disinherited.com stresses that words such as children and grandchildren should be used in wills drafting,  rather than precise legal terminology that invaribly is frequently misused.

– See more at: http://www.disinherited.com/blog/beware-words-stirpes-and-issue-wills-drafting#sthash.HKbrBuu8.dpuf

“Money and Cash” Interpretted In Will

MOney cash meaning

“Money and Cash” Interpretted In Will

The words used in many wills are often ambiguous or capable of different interpretations,which often then results in a court application to determine the meaning of the words used in the will.

Such was the case with the use of the words “money and cash” in the case of ThIemer Estate v Clapper  2012 BCSC

The deceased’s estate consisted of a variety of various assets, including shares in three private companies, bank accounts, GIC’s, a mortgage, property, an income tax refund, a death benefit and personal effects.

His will directed that his surviving spouse be paid ” the balance of any money left  at the time of my death”.

His will defined ‘money” to specifically include ” shares”

The remaining assets in the residue  were to be held in a spousal trust for her lifetime and then after her death were to go to various family members

The executor brought a Petition to court to determine which assets were included in the ‘money’ bequest.

The court held that shares in a private company could not readily be converted into money such as shares in a public company can, so the private shares were not included in ‘money”, and the court held that the testator only interned his shares in private companies to be included in the definition of ‘money”

The fact that the testator did not own any public shares was not determinative, as if the shares in the private company were included then there would be very little residue, and would be inconsistent with the overall intention of the will

The management of the private companies was demanding and complex and it was consistent that the shares would go into the spousal trust and be managed by the lawyer and accountant who were appointed the executors.

The bank accounts and GiC’s were clearly cash and money, but the mortgage was not as it was more akin to an interest in land

Similarly, the death benefit and income tax returns could not be included as they were not payable until after death

Lastly, the shareholders loans were not included as the viability for payment depended on the companies solvency and liquidity

– See more at: http://www.disinherited.com/blog/money-and-cash-interpretted-will#sthash.7LN9yWB3.dpuf

Wills Interpretation: The Courts Have Presumption Against Intestacies

Young v Abercrombie 2008 BCSC 389 involved an estate dispute relating to a conflict between the wording of the deceased’s will and the subsequent codicil to the will.

Donald William Abercrombie (“Donald”) died on December 16, 2005, leaving a will executed on November 19, 1981, and a codicil to the will executed on October 28, 2004.  He was survived by his two adult children, Kim Amanda Young (“Kim”), the named Executor, and Barry Donald Abercrombie (“Barry”).

[3]                Clause 4(d) of Donald’s will directs the Executor to:

… divide the rest and residue of my estate equally between my two children, KIM AMANDA ABERCROMBIE and BARRY DONALD ABERCROMBIE.  If either of my said children shall predecease me leaving issue, then such issue shall take in equal shares per stirpes the share such child would have taken if living.  If any of my said children shall predecease me leaving no issue, then the share to which such deceased child would have been entitled shall be transferred to my surviving child for his or her own use absolutely.

[4]                The codicil sets out the following:

Should either of my children become incapacitated due to illness or accident it is my instruction that my Trustee invest my incapacitated child’s share of my estate into investments or a form of annuity.  My Trustee shall have the sole discretion to invest monies and advance monies as she or he she sees fit.

In all other respects I confirm this will.

 

The court reviewed various rules of construction of wills and turned to the issue of the strong presumption that the probate courts have against finding an intestacy. The courts will where possible, construe a will so as not to lead to an intestacy.

 

 

 “Further, in the construction of wills, there is a strong presumption against intestacy.  This often-cited principle was articulated by Lord Esher, M.R. in Re Harrison Estate (1885), 30 Ch.D. 290 at 393-4, as follows:

There is one rule of construction, which to my mind is a golden rule, viz., that when a testator has executed a will in solemn form you must assume that he did not intend to make it a solemn farce – that he did not intend to die intestate when he has gone through the form of making a will.  You ought, if possible, to read the will so as to lead to a testacy, not an intestacy.  This is a golden rule.

 

In Baldissera v. Baldassi (1997), 18 E.T.R. (2d) 128 (B.C.S.C.) at para. 10, Edwards J., citing The Canadian Law of Wills, vol. 2, confirmed that:

There is a presumption against intestacy and the court will prefer an interpretation of the will which avoids an intestacy.

And further, at para. 11, Edwards J. held:

The court on reading the will as a whole may conclude that the testator clearly intended to dispose of his entire estate.  Once such an intention is clear the court will construe the will so as to give effect to the will in preference to a construction which will result in a partial or total intestacy.

A similar conclusion is found in Jankowski v. Pelek Estate, [1996] 2 W.W.R. 457, 131 D.L.R. (4th) 717 (Man. C.A.), where Helper J.A. at para. 76 stated, “[i]f the will is capable of two constructions, one which disposes of the whole estate and the other which leaves part of the estate undisposed of, the court will prefer the former.”

 

And finally, if it is reasonable to do so, the will and codicil should be read in harmony so as to avoid an intestacy.  Donald clearly intended to dispose of his entire estate, and it is therefore the role of the court to construe his will and codicil in a manner that does so.

[36]            Here, if an intestacy is the result, one of Donald’s children, Kim, will receive 75% of his estate, while the heirs of the other, Barry, will receive 25%.  That result does not confirm Donald’s will; it re-writes it, both in respect of the bequest to Barry, and also to Kim.  The intended equal sharing between Donald’s children would not be the result.

[37]            In all of the circumstances, I have concluded that Donald’s will and codicil, when read together, provide for the vesting of one-half of the residue of Donald’s estate in Barry when Donald died.

Court Rectifies Will By Deleting Words

Rectify willCourt Rectifies Will ( see Blog Dated March 24,2014 for the WESA update on the courts expanded powers to interpret wills)

Verity Estate v Fedorek 2012 BCSC 650 involves a successful application brought by the executor of the deceased to rectify the last will of the deceased on the basis that it was prepared in error and did not accurately reflect the testatrix’s instructions given to the drafting lawyer with respect to the disposition of the residue of her estate.

The last will dated 2003 directed the estate residue to be divided into halves, with one half divided equally among 10 surviving nieces and nephews and the other equally among the four children of an niece who had died in 1984.

On the application of the executrix, the court ordered rectification of the will, finding that the testatrix had intended the division of her residue into 11 shares, with one share to be divided among the four children of the niece who had died.

The power of the court to rectify will permits the court to delete words that were mistakenly included in the will, but not to add them.

The evidence clearly demonstrated the relationship between the testatrix and nieces and nephews was very close her previous wills had been drafted in the same manner of equal shares among the nieces and nephews. The deceased had no children and they were her next of kin.

The court found that her late solicitor either mistook your instructions, which was unlikely, or more likely, made an error in drafting the 2003 will.

The Court then gave an excellent summary of the alw in this area, starting with Dardi J’s excellent summary in Re Ali Estate 2011 BCSC 537:

 

“5. The parties agree on the essential principles of law which guide a court in the exercise of its power to rectify will. That power permits a court to delete words that were mistakenly included in a will, but not to add them. There is no suggestion by the petitioner that words ought to be added to the 2003 Will, but some authorities which discuss the question of whether words may be added are nevertheless useful on the application before me.

[6]             One of those authorities is Re Ali Estate, 2011 BCSC 537, in which Dardi J. under the heading “Legal Framework”, provided a valuable discussion of the principles of law which are engaged by a wills rectification application. Paragraphs 21 to 27 should be quoted in full:

21.       The Supreme Court has jurisdiction to sit both as a court of probate and as a court of construction. Notwithstanding that the single court is empowered with dual jurisdictions, historically the court has exercised its probate function and its interpretation or construction function in separate proceedings. In broad terms, when ruling upon the validity of a will, the court sits as a court of probate, and when interpreting a will, it sits as a court of construction. The divided jurisdiction is significant because the powers available to the court depend on which jurisdiction it assumes: Law Reform Commission of British Columbia, Report on Interpretation of Wills, LRC 58 (Victoria, 1982) at 1.

22.       The jurisdiction exercised by a court of probate relates to whether the testamentary instrument submitted for probate represents the true last will and testament of a deceased and whether the named personal representative is entitled to administer the estate. In essence, a court of probate focuses on what constitutes the testamentary instrument of the testator and its validity. The inquiry pertaining to the validity of the testamentary document encompasses the issues of the capacity and the volition of the testator and whether the testator duly executed the testamentary document with knowledge and approval of its contents.

23.       On the other hand, in exercising jurisdiction as a court of construction, the court is concerned with ascertaining the meaning of the testamentary documents that have been approved by the court in the exercise of its probate jurisdiction. It is axiomatic that court must interpret or construe a will in the form in which it has been admitted to probate.

24.       In probate hearings, the court, in determining whether or not the document before it is truly the testator’s will, is permitted to consider extrinsic evidence, including direct evidence as to the testator’s intentions. That evidence may include copies of earlier wills and codicils, prior drafts of the will, and the notes of the solicitor who prepared the will. In contrast, the scope of admissible evidence is generally more constrained in a construction hearing. In that instance, a court may only consider the words of the will and if, applying the subjective approach, the evidence of the surrounding circumstances known to the testator at the time the will was made. Except in very restricted circumstances (such as equivocation), the court is not permitted to review direct evidence of the testator’s intentions on a construction application: British Columbia Law Institute, “Wills, Estates and Succession: A Modern Legal Framework,” in B.C.L.I. Report No. 45 (B.C., 2006) at 37.

25.       It is in the context of these general principles that I next address the petitioner’s application for rectification.

26.       At the outset, it is important to observe that the equitable remedy of rectification, as developed to permit a court to correct errors in contracts or other written documents, does not apply to wills: British Columbia Law Institute, “Wills, Estates and Succession: A Modern Legal Framework” at 36. I also note parenthetically that in British Columbia there is currently no legislation in force which confers powers on the court to rectify will.

27.       However, the court, in exercising its probate jurisdiction, does have a limited power to rectify a mistake in a will where the language of the will fails to express the testator’s actual intentions. A will is only valid to the extent a testator knew and approved of its contents. As a constituent element of establishing the validity of a will, the court must be satisfied that the testator knew and approved of its contents. It is well established on the authorities that before a will is admitted to probate, the court may, in the exercise of its probate jurisdiction, delete words from a will that have been included without the testator’s requisite knowledge and approval: Alexander Estate v. Adams (1998), 51 B.C.L.R. (3d) 333, 20 E.T.R. (2d) 294 (S.C.) [Alexander Estate]; and Clark v. Nash (1987), 61 D.L.R. (4th) 409, 34 E.T.R. 174 (B.C.C.A.) [Clark].

[7]             In Alexander Estate v. Adams (1998), 20 E.T.R. 394, Burnyeat J., of this Court, at paras. 19 and 20 wrote the following, under the heading “Burden of Proof in Mistake”:

A Court of Probate can review evidence which is relevant to the question of whether or not words included in the Will have been included without the knowledge and approval of the Testatrix. That evidence may include copies of earlier Wills and Codicils prior drafts of the particular Will, and as well as the notes and recollections of the solicitor preparing the Will. In this case, I have reviewed the two Wills, the two Codicils, and the affidavit of the solicitor who prepared the two Codicils and the 1996 Will in order to ascertain what instructions were provided by the testatrix.

…

The following passage from Williams, Mortimer and Summcks, supra, sets out the burden of proof:

… if the testator has duly executed his will the presumption is that he knew and approved of all its contents, and that presumption becomes very grave and a strong one and only to be rebutted by the clearest evidence in cases where the will was read over to the to testator. It is however, going too far to say that it must established beyond all doubt that the words which a party seeks to have omitted did not form part of the testator’s will. Furthermore, the reading over must be a proper one. But where the will was not read over to the testator and the mistake is made in circumstances in which the court may omit words or dispositions, the mistake may be established on a balance of probabilities. (at p.167)

[8]             In Vout v. Hay, [1995] 2 S.C.R. 876, the court heard an appeal in which it was alleged there were “suspicious circumstances” surrounding the execution of a will. At para. 26, Sopinka J. for the court observed:

…Although the propounder of the will has the legal burden with respect to due execution, knowledge and approval, and testamentary capacity, the propounder, is aided by a rebuttable presumption. Upon proof that the will was duly executed with the requisite formalities, after having been read over to or by a testator who appeared to understand it, it will generally be presumed that the testator knew and approved of the contents and had the necessary testamentary capacity.

[9]             The “propounders” of the 2003 Will are the Fedorek respondents.

[10]         The jurisdiction of the English probate court to rectify will was modified and enlarged by the Administration of Justice Act, 1982. There is no similar legislation in British Columbia, but English authority on rectification of wills, prior to the coming into force of the English statute on January 1, 1983, continues to be persuasive in British Columbia.

[11]         In Re Morris (deceased) [1970] 1 All E.R. 1057 a testatrix executed a will making a pecuniary legacy in sub clause 7[iv]. The testatrix later instructed her solicitor to prepare a codicil altering the provisions of sub clause 7[iv] but instead the solicitor mistakenly prepared a codicil which revoked all of clause 7, thereby depriving the beneficiary of the legacy. The testatrix took the codicil to her bank to execute it, “but there was no discussion about its meaning and effect”. The learned judge nevertheless held “the testatrix read it in the sense of casting her eye over it”.

[12]         The learned judge in Re Morris addressed the history of the relevant law of England and referred to Guardhouse v. Blackburn, (1866) L.R. 1 P. & D. 109 [1861-73] All E.R. 680, which articulated a pronounced mid-Victorian reluctance to rectify will, even if it could be demonstrated that it did not actually conform with the testator’s wishes. Lord Penzance laid down what was characterized in Re Morris as “absolute rules” one of which was that “the fact that the Will had been duly read over to a capable testator on the occasion of its execution, or that its contents have been brought to his notice in any other way, should, when coupled with his execution thereof, be held conclusive evidence that he approved as well as knew the contents thereof”.

[13]         The learned judge in Re Morris observed there must have been good reason for the court in Guardhouse v. Blackburn “to fetter its own power to get at the true facts. But has not the more modern trend in many fields been to strike such fetters off, so that the court can make the best use of all materials available to ascertain the truth?” and went on to quote with approval from an earlier English case in which it was held that the probate court on a rectification application is:

…to consider all the relevant evidence available and then, drawing such inferences as it can from the totality of that material, it has to come to a conclusion whether or not those propounding the Will have discharged the burden of establishing that the testatrix knew and approved the contents of the document which is put forward as a valid testamentary disposition. The fact that the testatrix read the document, and the fact that she executed it, must be given the full weight apposite in the circumstances, but in law those facts are not conclusive, nor do they raise a presumption of law.

[14]         I should note that while the law of England may not raise a presumption of knowledge and approval if a will is read by a testator, but the law of British Columbia, as articulated in Vout v. Hay supra, appears to have retained a rebuttable presumption that a will reflects the intentions of the testator if it was read to or by the testator at the time of execution.

[15]         In Re Morris supra the learned judge concluded:

In my judgment, wherever the line is drawn, this case on its facts falls into the category where the court has power to do what it can by omission. The introduction of the words ‘Clause 7’ instead of ‘Clause 7(iv)’ was per incuriam. The solicitor’s mind was never applied to it, and never adverted to the significance and effect. It was a mere clerical error on his part, a slip. He knew what the testatrix’s instructions and intentions were, and what he did was outside the scope of his authority. And he did it, of course, without knowing and approving what he himself was doing. How can one impute to the principal the agent’s knowledge and approval which the agent himself has not got? Accordingly, I hold that the testatrix was not bound by this mistake of the draftsman which was never brought to her notice. The discrepancy between her instructions and what was in the codicil was to all intents and purposes total and was never within her cognisance.