Tag: wills variation

Court Discretion In Wills Variation Claims

In wills variation cases now brought under S. 60 WESA , the judge has “entire discretion” in deciding pro or against a claimant on its findings of fact.

In Swain v Dennison 1967 SCR 7 the Supreme Court of Canada held that the jurisdiction of the court in such claims is statutory, not founded in equity and the entire jurisdiction of the court is discretionary.

Within reason the court can make findings of fact in its discretion which makes it very difficult to appeal since the appeal court would have to substitute its own findings of fact in place of the trial judge unless the appeal court finds that the trial judge did not give sufficient weight to relevant factors.

The BC Appeal court in Kish v Sobchak and Doyle 2016 BCCA 65 stated the following about the courts proper use of discretion:

33. The line between the exercise of judicial discretion and the finding of facts is not easy to enunciate. For purposes of this case, I respectfully adopt Lord Bingham’s description of judicial discretion given in The Business of Judging: Selected Essays and Speeches(2000):

According to my definition, an issue falls within a judge’s discretion if, being governed by no rule of law, its resolution depends on the individual judge’s assessment (within such boundaries as have been laid down) of what it is fair and just to do in the particular case.

He has no discretion in making his findings of fact. He has no discretion in his rulings on the law. But when, having made any necessary finding of fact and necessary ruling of law, he has to choose between different courses of action, orders, penalties or remedies he then exercises a discretion. It is only when he reaches the stage of asking himself what is the fair and just thing to do or order in the instant case that embarks on the exercise of a discretion.

I believe this definition to be broadly consistent with the usage adopted in statutes. [At 36; emphasis added.]

Lord Bingham also explains that fact-finding is not “discretionary”, although some judges have described it as such. In his words:

… it is one thing to say that the responsibility of finding the facts is entrusted to a particular person or body, be he judge, arbitrator, official or public authority, and that such finding is to be treated as conclusive or virtually so. But it is quite another to describe that function as discretionary. It is, I suggest, nothing of the kind. In finding the facts the judge’s job is to consider all the conflicting evidence this way and that and decide as best he can where the truth lies. It is very much the task performed, for instance, by the historian or the journalist as part of his stock in trade. The judges of course are constricted by formalities and rules of evidence which do not afflict them. On the other hand, he has powers of compelling testimony which they would envy. It is none the less essentially the same function. Yet to say of a historian or journalist that he exercised a discretion in reaching conclusions of fact would, I suggest, be regarded as a libellous. The judge must exercise judgment, not discretion, in finding the facts, and it is usually the most difficult and often most exacting task which the civil trial judge has to undertake. [At 37; emphasis added.]

Disabled Adult Succeeds Wills Variation

Willott v. Willott Estate 1997 CarswellBC 2016, [1997] B.C.J. No. 2073, 20 E.T.R. (2d) 211 is a 1997 wills variation action where a deceased parent’s estate was required to pay additional monies to a disabled son who unable to work, survived on a small disability pension due to his mental illness.

The estate was approximately $500,000 and was left solely to the sister of the deceased.

The disabled son succeeded in his wills variation claim ( now section 60, WESA) with the court finding that state paid disability benefits are the bare minimum and that a parent still has a moral obligation to provide more for the child’s benefit.

THE COURT STATED:

73 Therefore, I find that a judicious testatrix, as part of her consideration of what is adequate support for an adult child who is incapable of supporting himself due to disabilities, may take into account the provisions made by the state for that person. That is the starting point. The state provides for basic needs. But the state also is willing to provide for those needs without deduction while allowing for some “extras” for the disabled person. Thus arise the exemptions in the Disability Benefits Program Act and the Regulations to that Act.

74 I find on the whole of the evidence that Iris Willott did not make adequate provision for the proper maintenance and support of her son, and did not discharge her moral obligation to him. Lot 1 will provide accommodation for him should he chose to live there or, if he chooses to sell that property, I find it will provide him with enough money to purchase other suitable accommodation. His benefits under the regulations to Disability Benefits Program Act will cover his house insurance, taxes, fuel, water, hydro, garbage and basic telephone expenses (s. 5 Schedule A). In addition, benefits will provide him and his wife with medical and dental coverage, eye care, prescriptions and home support. But the monthly amount of $608 which he will then receive (assuming he and his wife are together) is not sufficient, I find, to maintain him to the standard which was reasonable given his own circumstances at the time of his mother’s death and the other factors the court is required to consider when dealing with Wills Variation Act actions, including the size of the estate.

75 I find that Mr. Willott should be provided with a further lump sum which (together with the remainder of the cash bequest which he received under the will) will enable him to purchase a reasonably reliable vehicle and certain household items which he requires. Many needs for the later will be satisfied by his receipt of the balance of Iris Willott’s effects which all the defendants agree he should have. I find the additional amount that Mr. Willott should receive is $20,000. If Mr. Willott, with the assistance of his wife and others, plans efficiently, this sum should also suffice to cover his initial vehicle insurance costs as well as living and other transitional expenses which he will incur over the one to three months which I estimate will be the time during which he will not receive benefits due to receipt of funds from the estate. Should Mr. Willott choose to sell the property he can and should plan the sale and any purchase of other property to minimize the time during which he will not receive benefits.

76 In addition, Mr. Willott should have the benefit of a trust as contemplated by the Disability Benefits Program Act and Regulations. This trust shall be in the amount of $100,000. Mr. Willott shall receive the income from this trust to the maximum allowed under the regulations. The balance of the annual trust income, after payments of all costs related to the administration of the trust, shall be paid to the Society, from whose share of the estate the trust shall be created. Upon Mr. Willott’s death the capital of the trust shall revert to the Society. At present this means Mr. Willott will receive from the trust a maximum of $5,484 per year or $457 per month in addition to the $608 in monthly benefits which he receives. If necessary, counsel may speak to the question of the appointment of an appropriate trustee.

77 The trust shall be created from funds from the sale of Lot 102 which shall be listed for sale forthwith. Mr. Willott may call for the transfer of Lot 1 and the balance of the funds owing directly to him at any time from the date of this judgment but not later than three months after the establishment of the trust. Until that time, he shall be entitled to interest on the funds owing directly to him in the amount of 5% per year payable at the time he receives the funds. Should Mr. Willott chose to defer the transfer of Lot 1 he will not be entitled to any accounting with respect to the income from it, nor shall he be responsible for any of the expenses relating to it.

78 The additional lump sum payment shall fall rateably on the estate. Mr. Onwood’s share of the estate shall be satisfied next after that of Mr. Willott. Thereafter the congregation’s share of the estate shall be satisfied, following which the Society shall receive its share.

WESA Wills Issues wills variation wills variation act BC Wills Variation Acts

Will Variation: Daughter Awarded Entire Estate

Will Varied to Give Daughter Entire Estate

Hagen-Bourgeault v. Martens 2016 BCSC 1096 varied a will (S. 60 WESA) to give a 25 year old daughter with two young children on social assistance, the entire estate of $2,200 per month until 2025, instead of her husband of two years who was well off but left the entire estate under her will.

The court found that the husband beneficiary of the estate had was financially independent and had limited legal or moral entitlement to the estate.

The daughter in turn had great financial need.

The Court Stated:

The leading Canadian decision on variation principles is Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807; 93 B.C.L.R. (2d) 145. In delivering the Court’s unanimous judgment, McLachlin J., as she then was, confirmed that the language of the WVA confers on the trial court a broad discretion to make orders that are just in the specific circumstances of a case, and in light of contemporary standards. The WVA is to be seen as imposing limitations of testamentary authority. At a minimum, survivors are not to be left destitute, such that they will impose a burden on the state; but what is to be considered “adequate, just and equitable” is not limited to need alone.

Entire estate

[20] Tataryn further discusses the means by which competing claims are to be assessed:

How are conflicting claims to be balanced against each other? Where the estate permits, all should be met. Where priorities must be considered, it seems to me that claims which would have been recognized during the testator’s life — i.e., claims based upon not only moral obligation but legal obligations — should generally take precedence over moral claims. As between moral claims, some may be stronger than others. It falls to the court to weigh the strength of each claim and assign to each its proper priority. In doing this, one should take into account the important changes consequent upon the death of the testator. There is no longer any need to provide for the deceased and reasonable expectations following upon death may not be the same as in the event of a separation during lifetime. A will may provide a framework for the protection of the beneficiaries and future generations and the carrying out of legitimate social purposes. Any moral duty should be assessed in the light of the deceased’s legitimate concerns which, where the assets of the estate permit, may go beyond providing for the surviving spouse and children.

[21] In my judgment, the needs of the plaintiff, in relation to the very modest size of the estate, completely outweigh all claims of Mr. Martens. Mr. Martens, though he was no doubt the loving spouse of the deceased, had only a short relationship and demonstrates no financial dependence upon her during their lifetime. The amount of the structured settlement fund did not increase in value during their relationship. He has no claims founded in unjust enrichments. In the circumstances, he would not have been entitled to spousal support on the breakup of their marriage. His legal and moral entitlement to a share in Michelle’s estate is consequently limited, at best. Furthermore, the size of the estate is so modest that in their entirety, the structured settlement proceeds would appear to be sufficient only just to lift the plaintiff and her two dependent children out of poverty, and then only for so long as the fund lasts.

[22] In the present case it does little violence to the testator’s intentions to make an immediate full reapportionment in the plaintiff’s favour. It is a fair inference, from the evidence, that the testator’s decision to leave to Mr. Martens’ discretion the amount of support to be paid to the plaintiff, when the will was made in 2012, may have reflected some hesitation as to the plaintiff’s ability to exercise good judgment. Whatever qualms may have led the testator to structure her will in this fashion, as opposed to leaving an outright gift to the plaintiff, there is no evidence now which points to any such concern. Indeed, the mechanism of the structured settlement itself would serve as a check on the funds being squandered. The plaintiff appears, on the evidence, to have survived a difficult adolescence and now to be doing her utmost to see to the need of her children, in very challenging circumstances.

Contesting a Will WESA wills variation wills variation act BC Wills Variation Acts

Interim Payments Under Wills Variation

Grant v Grant estate 1997 Carswell BC 3773 allowed a widow in need of funds to receive interim payments under the wills variation provisions of WESA.

The Grant and Hecht cases are only a few reported cases of the ability to apply to court for an interim distribution of funds where appropriate provided there is no risk to the ultimate redistribution of the estate should the will be varied.

The Judge in the Grant case stated:

In Hecht v. Reid et al, 39 E.T.R. 165, Justice Donald as he then was, reviewed this section, came to the conclusion that a partial legacy under a Will can be paid notwithstanding a pending claim for variation when the risk that the Variation Order will encroach upon the funds needed to satisfy the legacy is remote.

13 In my view, the jurisdictional question has been settled by this court.

14 The only issue for determination is whether the proposed payments to Nancy Grant pose a risk to the ultimate distribution in the event

there is a variation to the Will.

probate WESA wills variation wills variation act BC Wills Variation Acts

Marriage Like Relationships

Weber v Leclerc 2015 BCSC 6550 reviewed the law relating to what constitute a marriage like relationship in a matrimonial dispute where the female was against the institution of marriage and opposed such a finding of being in a marriage like relationship.

The parties did a considerable number of things together that would indicate that their relationship was marriage like, whether the female intended it to be or not:

The parties lived together from 2002 until at least 2011, or later (according to Mr. Weber). The following facts are not disputed:

Mr. Weber has two sons, and Ms. LeClerc has one. The children resided with them (although Mr. Weber shared parenting responsibility with his ex-wife), before they left home as adults.
The boys were about the same age. Mr. Weber and Ms. LeClerc raised their separate children together.
They had family portraits including themselves and all three boys that were displayed in their home.
They shared a bedroom and had sexual relations throughout that period and were monogamous.
They had a family dog and a boat.
The parties had contact with extended family, particularly Mr. Weber’s family. They visited that family and exchanged Christmas gifts and received presents from them.
The parties purchased property together and shared expenses. The title of the home in which they lived is in Ms. LeClerc’s name, although Mr. Weber made a contribution to its purchase and shared mortgage payments, until the mortgage was paid off in 2008.
The parties purchased other properties together and generated income from those properties according to Mr. Weber. This is not contradicted by Ms. LeClerc.
For the most part, the parties kept their finances separately. Ms. LeClerc assisted Mr. Weber by loaning him money from time to time. Mr. Weber repaid those loans.
The parties vacationed together, along with their sons. They collected memorabilia from those vacations and stored them with labels stating: “Weber LeClerc family”.
Mr. Weber and Ms. LeClerc shared meals together, although Mr. Weber was busy with his son’s hockey activities.
They both did the grocery shopping.
They spent their evenings together, although Mr. Weber would watch television and Ms. LeClerc would read in a separate room.
They went out together as a couple for dinner or to dinner parties with friends.
Mr. Weber and Ms. LeClerc did not discuss marriage, except perhaps on one occasion. Ms. LeClerc is opposed to marriage.

6 The parties disagree on how they spoke of each other, whether it was as a spouse or partner. Mr. Weber says he would introduce Ms. LeClerc as his wife, Ms. LeClerc disagrees.

THE LAW

In Austin v. Goerz, 2007 BCCA 586, the court explained that no single factor is dispositive of the issue of whether the parties were spouses. For example, financial dependence was at one time considered to be an essential aspect of marriage of the marital relationship. That is no longer the case. At paragraph 55 the court states: “Today marriage is viewed as a partnership between equals and there is no principled reason why marital-equivalent relationships should be viewed differently.”

The court adopted the judgment of the Ryan-Froslie J. in Yakiwchuk v. Oaks, 2003 SKQB 124 at paragraph 58:

[58] It is understandable that the presence or absence of any particular factor cannot be determinative of whether a relationship is marriage-like. This is because equally there is no checklist of characteristics that will invariably be found in all marriages. In this regard I respectfully agree with the following from the judgment of Ryan-Froslie J. in Yakiwchuk v. Oaks, 2003 SKQB 124:[10] Spousal relationships are many and varied. Individuals in spousal relationships, whether they are married or not, structure their relationships differently. In some relationships there is a complete_blending of finances and property – in others, spouses keep their property and finances totally separate and in still others one spouse may totally control those aspects of the relationship with the other spouse having little or no knowledge or input. For some couples, sexual relations are very important – for others, that aspect may take a back seat to companionship. Some spouses do not share the same bed. There may be a variety of reasons for this such as health or personal choice. Some people are affectionate and demonstrative. They show their feelings for their “spouse” by holding hands, touching and kissing in public. Other individuals are not demonstrative and do not engage in public displays of affection. Some “spouses” do everything together – others do nothing together. Some “spouses” vacation together and some spend their holidays apart. Some “spouses” have children – others do not. It is this variation in the way human beings structure their relationships that make the determination of when a “spousal relationship” exists difficult to determine. With married couples, the relationship is easy to establish. The marriage ceremony is a public declaration of their commitment and intent. Relationships outside marriage are much more difficult to ascertain. Rarely is there any type of “public” declaration of intent. Often people.

[12] Madam Justice Dardi in J.J.G. v. K.M.A., 2009 BCSC 1056 provided a helpful summary of the authorities in paragraph 37:begin cohabiting with little forethought or planning. Their motivation is often nothing more than wanting to “be together”. Some individuals have chosen to enter relationships outside marriage because they did not want the legal obligations imposed by that status. Some individuals have simply given no thought as to how their relationship would operate. Often the date when the cohabitation actually began is blurred because people “ease into” situations, spending more and more time together. Agreements between people verifying when their relationship began and how it will operate often do not exist.

In summary, in undertaking an analysis of whether persons are living together as spouses, the court must examine the relationship as a whole and consider all the various objective criteria referred to in the authorities. The presence or absence of one particular factor will not be determinative. The court must recognize that each relationship is unique and, in applying a flexible approach within the context of the particular relationship, make a determination as to whether the parties intended to and were living in a marriage-like relationship.

Ms. LeClerc’s lack of belief in the institution of marriage is beside the point. As is pointed out in Yakiwchuk, people may choose not to be married for a variety of reasons: “[t]heir motivation is often nothing more than wanting to ‘be together”‘. This appears to have been the motivation here.

Family Law WESA wills wills variation

WESA: Forcing the Executor to Act & Rule 25-11

Forcing Executor to Act. Rule 25-11 of WESA permits ‘a person interested in the estate’ to use a Citation to compel the named executor to apply for probate or be deemed to have renounced.

This is an important tool in the arsenal of estate litigators when dealing with parties who for often unknown reasons refuse to proceed with the task of taking control of the deceased’s assets and affairs, getting the will probated, the debts paid, and the assets distributed to the beneficiaries.

Rule 25-1 (4) provides that an executor renounces executorship upon two circumstances:

in the circumstances set out under paragraph 25 – 11 (5) where the executor is deem to have renounced executorship following a citation to apply for probate;
when a Notice of Renunciation in Form 17 from the executor is filed in the relevant application or proceeding. There is now a prescribed notice of renunciation.

Since Rule 25-11 permits ” a person interested in the estate” to issue a Citation, so it is certainly arguable that the citation process will be available to not just named executors, beneficiaries, and creditors, but also to intestate heirs and potential wills variation claimants.

The Citation is issued in Form P32 of the WESA Rules.

The Citation must clearly identify the citor, the deceased, and the document which is to be probated as the will, as well as the citor¹ s grounds for believing that the document exists.

The citation must be personally served and is not filed with the court registry to commence the Citation process .

If the cited executor does apply for the grant, it is still open to the citor to apply under s. 158 of the WESA to remove or pass over the executor under appropriate circumstances.

The executor served with the Citation must, within 14 days after being served provide a copy of the grant of probate by ordinary mail, or if no probate has yet been granted, then serve the Citor as follows:

if they have submitted the probate documents to the registry, then provide by ordinary mail copies of the documents ;
file an answer and form 33 stating that the cited person will either apply for a grant of probate or refuses to apply for a grant of probate .

Under rule 25 – 11 (5) a person who is cited to apply for a grant of probate is deemed to have renounced executorship to that document unless the grant of probate is obtained within six months after the date in which the citation was served, or within any longer. The court on application by the cited party may allow, or has filed an answer stating that the executor refuses to apply for a grant of probate in respect of the testamentary document.

The standard 21 day notice of the application for probate will use up a significant portion of that six month period .

Any issue concerning the validity of the will or another impediment such as a notice of dispute, then the time period would be impossible to meet.

It is likely that in such scenarios that a court applications to extend the time period would be necessary.

Executor Removal Executors and Fiduciaries Fiduciary WESA wills wills variation

Wills Variation: Elderly Common Law Spouse

Mars v Blais 2011 BCSC 1714 involved a 91 year old widow who brought a wills variation action ( now S. 60 WESA) against the estate of her late common law partner of 9 years. The wills variation action was prior to WESA but would likely have been decided the same after WESA came into effect.

They value of the estate was approximately $1.5 million.

The deceased left a will, leaving the plaintiff a life estate in the matrimonial home, plus $50,000. He left the residue of the estate to his 62-year-old son who had no income and owned no property.

The 91-year-old plaintiff was economically independent with their own pension income plus rental from the property, and the judge found that she would not need to use her own capital in order to live.

All of the assets of the deceased’s estate were accumulated by the deceased prior to meeting the plaintiff. They lived a modest lifestyle and did not share or intermingle their assets.

The court awarded the plaintiff the sum of $200,000 and the life estate in the matrimonial home on the same terms of the will, which provided for the estate to pay for the upkeep and taxes of the home and property, which was in need of substantial repair.

Discussion

[61] There are two interests protected by the WVA. The first is to ensure adequate, just and equitable provision for the testator’s spouse and children and the second is to honour his testamentary autonomy (Tataryn v. Tataryn 1994 51 (SCC), [1994] 2 S.C.R. 807; Hall v. Korejwo, 2011 BCCA 355 , 2011 BCCA 355 at para. 35).

[62] The first consideration is the testator’s legal obligations to a spouse and children and the second is the moral obligations to spouses and children with legal obligations taking precedence over moral obligations. (Hall at para. 35).

[63] In determining the legal obligation the first consideration is the testator’s legal obligations to support his spouse or children (Picketts v. Hall (Estate), 2009 BCCA 329 , 2009 BCCA 329 at para. 50). “The legal aspect of [the plaintiff’s] claim under the [WVA] is limited to the claim she would have had for spousal support” (Picketts at para. 58).

[64] None of the assets in the estate came into being through any joint effort involving Ms. Mars. There was no evidence tendered about Ms. Mars’ life expectancy or evidence of her ongoing financial needs for support. The general statement made by her that she does not need more money to meet her needs satisfies me that she is able to live comfortably, on her current income, at the level they shared before Mr. Bain’s death.

[65] In view of the incomes of the parties throughout their time together and the modest life style enjoyed by them, Mr. Bain’s Will was more than adequate to meet his legal obligations to provide spousal support for Ms. Mars as contemplated by Low J.A. in Picketts.

[66] The assessment of Mr. Bain’s support obligations is the same whether based on the compensatory or non-compensatory approach. (Morgan v. Pengelly Estate 2011 BCSC 1114 , 2011 BCSC 1114 at para 205).

[67] The second question is whether Mr. Bain’s Will has satisfied his moral obligations to family members that could reasonably be expected of a judicious person in like circumstances. Claims based on legal obligations will generally take precedence over those based on moral duties, and what is adequate, just and equitable in the circumstances is judged by contemporary standards. See Hall at para. 35.

[68] Any variation of Mr. Bain’s will should be limited to the extent required to achieve the objectives of the WVA. (Tataryn at 823-4;Crerar v. Crerar 1998 5375 (BC CA), (1998) 61, B.C.L.R. (3^rd) 55.

[69] The Estate Administration Act, R.S.B.C. 1996, c. 122, provides some indication of contemporary standards but does not directly affect the considerations that govern the applications under the WVA (Hall at paras. 44 and 46).

[70] In analyzing Mr. Bain’s moral obligation I am informed by the comments by McLachlan J. in Tataryn at 822-23 in assessing a testator’s moral obligation:

For further guidance in determining what is “adequate, just and equitable”, the court should next turn to the testator’s moral duties toward spouse and children. It is to the determination of these moral duties that the concerns about uncertainty are usually addressed. There being no clear legal standard by which to judge moral duties, these obligations are admittedly more susceptible of being viewed differently by different people. Nevertheless, the uncertainty, even in this area, may not be so great as has been sometimes thought. For example, most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after his death, a strong moral obligation to do so exists if the size of the estate permits. Similarly, most people would agree that an adult dependent child is entitled to such consideration as the size of the estate and the testator’s other obligations may allow. While the moral claim of independent adult children may be more tenuous, a large body of case law exists suggesting that, if the size of the estate permits and in the absence of circumstances which negate the existence of such an obligation, some provision for such children should be made: Brauer v. Hilton 1979 746 (BC CA), (1979), 15 B.C.L.R. 116 (C.A.); Cowan v. Cowan Estate (1988), 30 E.T.R. 216 (B.C.S.C.), aff’d (1990), 37 E.T.R. 308 (B.C.C.A.); Nulty v. Nulty Estate 1989 244 (BC CA), (1989), 41 B.C.L.R. (2d) 343 (C.A.). See also Price v. Lypchuk Estate, supra, and Bell v. Roy Estate1993 1262 (BC CA), (1993), 75 B.C.L.R. (2d) 213 (C.A.) for cases where the moral duty was seen to be negated.

[71] In Bridger v. Bridger Estate, 2006 BCCA 230 , 2006 BCCA 230 McKenzie J.A. discussed the tension between competing moral claims:

[20] … Tataryn recognizes that there is no clear legal standard to judge moral claims and the test is more nebulous where the surviving spouse is not strictly speaking a dependent spouse and the children are all financially independent adults. While, as McLachlin J. observes in Tataryn, there may be a number of options for dividing assets by a testator which are adequate, just and equitable, I do not think they include a disposition that entirely prefers the moral claims of adult independent children to those of a loyal spouse who provided care for the testator over years of debilitating decline.

[72] Low J.A. in Picketts described several helpful factors in assessing the moral obligations of a testator. He examined:

• the absence of a legal obligation to the testator’s sons;

• the length of the marital relationship – in this case nine years;

• the agreement of the spouse to give up a career depriving her of the opportunity to accumulate in the estate of her own;

• the necessity of the spouse to dip into her savings to supplement living expenses the testator had agreed to provide;

• the lengthy period of loving and effective care provided by the spouse to the testator during his decline;

• a promise made by the testator to take care of the spouse as though she were his wife; and

• the size and liquidity of the estate.

[73] In this case, there appears to be a moral obligation owed by Mr. Bain to his son. Daniel Bain is 62 years of age and appears to be vocationally and economically vulnerable. He has no income and no property (except for the Scottish property) and has been dependent on the estate for his living expenses for at least eight months. He is not looking for work but he seems to have little demonstrated ability to find or keep work. There was little or no evidence to explain Daniel’s circumstances and I am left to reach a conclusion without an abundance of information.

[74] In the present case the parties began cohabitating quite late in life and remained together for nine years. They did not engage in a sharing of assets or significant economic contributions to the estate other than sharing the Odlum Street house. Both of Mr. Bain’s properties and his savings were acquired before they joined their households. It appeared to me that Ms. Mars did not have an expectation of sharing Mr. Bain’s properties.

[75] Ms. Mars argued that Mr. Bain’s efforts to contact his lawyer about changes to his will and their plans to marry demonstrated an intention to share assets or make a different provision for the distribution of his estate after death. The evidence of what he intended is too speculative to be a factor in the assessment of his moral obligation.

[76] Ms. Mars is economically self-sufficient with income from her own pension and the veteran’s pension provided by Mr. Bain. With her right to receive income from the Odlum Street house coupled with the $50,000 bequest she will not likely need to use her own funds to provide for her support.

[77] Ms. Mars and Mr. Bain enjoyed a very modest but fulfilling relationship during their nine years together. Ms. Mars did provide care and support for Mr. Bain during his decline and until his death. Unlike Ms. Pickett’s role, the evidence of Ms. Mars’ care of Mr. Bain was quite limited.

[78] The size of Mr. Bain’s estate is considerable. The liquidity in the estate is less certain; the evidence suggested that there could be significant capital gains taxes to be paid by the estate triggered by Mr. Bain’s death.

[79] Ms. Mars has expressed a deep desire to continue to reside in the Odlum Street house. While counsel suggested that, in light of her age, she may not be able to remain in the house, there was no evidence that she is, or will be, incapable of living there.

[80] Low J.A. commented that the spouse in Picketts was entitled to administer her own financial affairs and was entitled to a measure of testamentary autonomy of her own so that she could pass her own estate to whomever she wished (para. 65). I take Mr. Justice Low’s comment to suggest that the analysis of a moral obligation ought not to be influenced by the fact that the assets received after a variation of the will may not be used by the beneficiary before her death. The fact that Ms. Mars may give away or bequeath all of her assets to another person should not affect her entitlement to receive that which Mr. Bain was morally obliged to give her under the Will.

[81] Mr. Bain left the bulk of the capital of his estate to Daniel. Daniel is, in my view, in serious need of support, although he professed an ability to support himself, the evidence suggests otherwise. The fact he has been using estate funds to support himself is one indication of his current need.

WESA wills wills variation Wills Variation Acts

Executor Cannot Use Estate Funds To Defend Personally

In a Wills variation claim (now section 60, WESA) an executor cannot use estate funds to defend him or herself if a beneficiary, and may use reasonable estate funds to defend the claim but only in the capacity of executor and not beneficiary.

In a wills variation claim the executor cannot use estate funds to defend his personal interests.

The executor may have his reasonable legal fees paid in his role as executor but should have separate counsel in most cases and the fees should be kept to a minimum–typically for advising on estate developments, liabilities and assets.

Generally, the executor is required to play a neutral role in litigation, and as a result of having to play a neutral role, the executor is generally entitled to special costs from estate.

But when the executor is also a beneficiary the costs must be separated.

If one counsel acts for the executor in both the capacity of executor and personal beneficiary, then the legal fees must be apportioned between the two separate roles, with the estate paying only for the role of executor. Wilcox v Wilcox 2002 BCCA 574.

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.

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

Here are the facts of Steernberg:

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 the executor of the will.

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

Legal fees for defendant’ 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 the wife’s consent and no funds from estate were made available to the wife before, during or after trial for her legal fees.

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

The parties agreed that the issue would be decided after the court gave its decision on whether will should be varied.

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

In a Wills Variation Act (S. 60 WESA) claim the validity of will itself was not being challenged and there was no need for the 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 a beneficiary.

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

The losing beneficiaries must pay the wife’s costs personally, not out of the estate.

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

Conflict of Interest Executor Administrator Executor Issues Executor Removal Executors and Fiduciaries Fiduciary Fiduciary Issues WESA wills variation wills variation act BC

Long Delayed Court Action Justified

An application for dismissal of the court action for want of prosecution was dismissed when the court found that the reasons for the 13 year delay of the court action was justified.

The law relating to dismissal for want of prosecution was recently summarized in Eastman v. Eastman Estate 2016 BC SC 209.

FACTS:

In 2003 a widow commenced court action to vary her late husband’s will on the basis that she was not adequately provided for.

The widow and the three children of the deceased subsequently entered into a temporary standstill agreement and never filed a statement of defense to the court action, and no further steps whatever taken in the proceedings.

The widow continued to live in the matrimonial home for the remaining 13 years until she died at age 90.

After her death her estate issued a notice of intention to proceed with the court action under the wills variation, and the defendants applied to strike out the claim for want of prosecution.

The court dismissed the application and found that the widow was justified in allowing the court action to sit idle for 13 years .

THE LAW

36 However, the wording of Rule 22-7 does not prevent a party in default from bringing an application to dismiss for want of prosecution. The court’s focus is on the length of the delay, the reason for it, and any resulting prejudice. Ultimately, dismissing an action for want of prosecution involves an exercise of discretion to be exercised in the interests of justice. It is not an order that is made lightly.

37 The considerations on an application for dismissal for want of prosecution are well-settled, having been established in a number of cases. They are derived from the reasons for judgment of Lord Justice Salmon in Allen v. Sir Alfred McAlpine & Sons Ltd., [1968] 2 Q.B. 229 (Eng. C.A.), at pp. 268-269. The parties agree that those considerations were summarized in March v. Tam, 2002 BCSC 1125 (B.C. S.C. [In Chambers]):

… The defendants must establish that there has been inordinate delay and that this delay is inexcusable. If those two factors are established a rebuttable presumption of prejudice arises and the onus shifts to the plaintiff to prove on a balance of probabilities that the defendants have not suffered prejudice or that on balance justice demands that the action not be dismissed. [para. 25]

[Emphasis in original]

38 As a result, in this case, I will consider:

(a) the length of the delay and whether it was inordinate;

(b) any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances;

(c) whether the delay has caused serious prejudice to the defendants in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be readied for trial after its reactivation by the plaintiff; and

(d) whether, on balance, justice requires dismissal of the action.

39 In this case, the delay in proceeding with the action has been almost thirteen years which, all parties agree, is inordinate. Such a delay cannot meet the object of the Rules which is to secure the just, speedy and inexpensive determination of every proceeding in its merits (Rule 1-3).

40 I also accept, on the evidence, that the defendants have suffered not just rebuttable prejudice but actual prejudice. Buela is now deceased and no steps were taken by the Executors to secure any evidence from her while she was still competent or before her death. Carole says that while the estate has kept records for estate purposes, they have not secured financial and other documentation pre-dating Donald’s death for litigation purposes. Further, some of Buela’s and Donald’s friends are now deceased.

41 The real argument between these parties is whether the delay was justified.

42 For the reasons which follow, I have concluded that Buela had justification for her delay.

43 First, when the standstill agreement was entered into, it was at the defendants’ request and it was the defendants who were to take the next step. The defendants were seeking an indulgence from Buela. Because of their conflict of interest as Executors, and as personal defendants to the Wills Variation Act claim, they would have been required to renounce their executorship or forego any interest in the residue of the Estate following Buela’s death. As a result of the standstill agreement they were not required to defend the action or to elect.

44 Although the standstill agreement was intended to be temporary, at any time either party could have ended it by delivering notice. Neither did.

45 Second, although Carole, on behalf of the Executors says that she believed that a resolution had been reached with Buela, the Executors never formally sought a release of the CPL or a dismissal of the action. Throughout, they were aware that the CPL remained on title and the action remained extant. No release and dismissal of the action was ever finalized.

46 Third, both Carole and Darlene acknowledge that Buela and Donald’s family valued their ongoing relationship. Darlene says that Buela did not want to upset that relationship by aggressively pursuing her Wills Variation Act claim. I accept that the delay in this case is not through inadvertence or due to negligence on the part of solicitors, however, unlike the situation in Irving v. Irving (1982), 38 B.C.L.R. 318 (B.C. C.A.), where the delay was deliberate in the hope that the law might change in the future, this is not a case in which Buela sought some tactical legal advantage by laying in the weeds. Rather, she sought family peace and, according to Darlene’s affidavit, left the litigation for after her death.

47 All parties benefited from the standstill agreement. Buela maintained family peace and all parties benefitted from the continuation of the relationship they had established during the 18 years Donald and Buela were married. Further, the Executors were not required to elect to remain as Executors or forego any interest they had in the residue of the Estate after Buela’s death. The Estate which was not large, would have been depleted by legal fees to the detriment of all parties.

48 Fourth, while Carole says that the Executors acted on their understanding that there had been agreement, exhausting the estate’s liquid assets to have Buela remain in the Home to the potential detriment of their interest as residual beneficiaries, in my view that issue is best assessed when considering their obligations under the Will in the context of Buela’s claim to a variation of it. It may ultimately be determined that the Executors did no more than was required of them under the Will.

49 Finally, I am satisfied that the steps taken by the Executors in furtherance of what they believed to be was an agreement with Buela, can be taken into account by the court when assessing the merits of Buela’s Wills Variation Act claim. The court will be able to assess whether, in light of all the circumstances and the benefits she received over the years since Donald’s death, Buela is entitled to anything further from the Estate.

Legal Procedures WESA wills variation

S 60 WESA (Wills Variation): Second Marriages/Families

Wong v Soo 2015 BCSC 1741 involves the increasingly familiar fact scenario of second or third marriages resulting in the death of one spouse and leaving his or her entire estate to the children of the first marriage to the exclusion of the surviving spouse.

The deceased died prior to March 31, 2014 so the cases brought under the previous wills variation act and not section 60 WESA.

There is no difference in the outcome under either statute as there are essentially the same.

The plaintiff was married to the deceased for 12 years and the defendants were her four children of her first marriage, along with her sister, who inherited in equal shares.

The deceased died at age 61 and the plaintiff was mostly retired and had his own children from a first marriage. The plaintiff was not provided for in the will.

The major asset of the estate was the matrimonial home, which had increased in value by $1 million since the date of marriage.

The estate value itself was $1,280,000, and a further $780,000 such as insurance and joint accounts passed outside of the estate to the defendants.

The plaintiff claimed that the entire estate was $2 million and that he had a claim against all of it.

The plaintiff received $89,000 outside of the will from an insurance fund, as well as to pensions from the deceased. He received five pensions in total for a monthly income of $3500.

The deceased were Statutory Declaration when she signed her will three months prior to her death, stating that she and the plaintiff had already separated their assets and agreed with each other that they would each leave their estate to their children from their first marriage.

This alleged agreement was not in writing and was held to be invalid under the provisions of section 61 of the Family Relations Act, ( FRA) which states that marriage agreements must be in writing. The court did hold that the invalid agreement was a factor for consideration and not determinative of entitlement (Miller v Miller 2011 BCSC 29)

The court awarded the second spouse an additional $230,000.

The Court held that the Family Law Act provisions apply to disinherited spouses

The Law: Second Spouses and Varying a Will

Legal Duty:

[73] In cases such as this, family law legislation must be given consideration.

[74] In Houston v Fowler 2014 BCSC 489 Justice Macaulay states at para. 30:

In determining whether Bob made adequate provision for Angela, the first step is to determine his minimum legal obligations. For a spouse, the legal obligations are measured by a notional division of family property under the Family Relations Act, R.S.B.C. 1996, c. 128, and a notional determination of Angela’s right to support under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), immediately before Bob’s death. See Glanville v. Glanville (1998), 58 B.C.L.R. (3d) 240 (C.A.) at paras. 14-15.

[75] In this case, when applying the legal duty element of the WVA test, the parties are agreed that the old FRA is applicable. The Family Law Act, S.B.C. 2011, c. 25 [FLA] came into force on March 18, 2013. At the time of Maureen’s death the FRA was in force and the final date in which the Will could be changed was the date of death on July 17, 2012. Therefore the FRA applies.

[76] For the purpose of analysis, the issue of equal division of assets must be considered under the FRA and any unfairness that may result. Further, consideration must be given to a division based on the increase in values of family assets.

[77] Under the FRA there is a presumption of equal division of family assets. Under s. 56(2), each spouse is entitled to an undivided half-interest as a tenant in common in each family asset upon the occurrence of a triggering event (in this case, the date of death). This is an undivided one-half interest in the family asset, and therefore spouses share equally in any increase or decrease in value since the triggering date.

[78] The interest of the husband is subject to consideration of the fairness provisions set out in s. 65 of the FRA, the relevant parts of which read as follows:

Judicial reapportionment on basis of fairness

65 (1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to

(a) the duration of the marriage,

(b) the duration of the period during which the spouses have lived separate and apart,

(d) the extent to which property was acquired by one spouse through inheritance or gift,

(e) the needs of each spouse to become or remain economically independent and self sufficient, or

(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse, the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.

Moral Duty

[79] The issue of second marriages and first children presents a unique problem − the court must assess moral obligations of a deceased towards a second spouse.

[80] The principals with respect to the moral obligations owed by a testator to her or his spouse and children, as set out in Tataryn, were summarized by Martinson J. in Steernburg v, Steernburg, 2006 BCSC 1672 at paras. 62-66 as follows:

[62] Second, the Court should consider the testator’s moral obligations to his or her spouse and children, in light of “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards” (at ¶28). With respect to the moral obligation to a spouse, the Court concluded that most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after death, a strong moral obligation to do so exists if the size of the estate permits. The moral obligation is broader than the legal obligation and is assessed at the date of death.

[63] The moral duty is customized to each specific claimant. The test in determining whether a testator spouse has breached his or her moral duty is whether, as a just husband or wife he or she properly considered the situation of his or her spouse and an appropriate standard of living for that person: Holland v. Holland (1995), 9 E.T.R. (2nd) 119 (B.C.S.C.).

[64] The moral claim of independent adult children is more tenuous than the moral claim of spouses. But if the size of the estate permits, and in the absence of circumstances negating the existence of such an obligation, some provision for adult independent children should be made (at ¶31).

[65] Circumstances that will negate the moral obligation of the testator are “valid and rational” reasons for disinheritance. To constitute “valid and rational” reasons for disinheritance, the reason must be based on true facts and the reason must be logically connected to the act of disinheritance: Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213 (B.C.C.A.); Clucas v. Clucas Estate (1999), 25 E.T.R. (2d) 175 (B.C.S.C.); Comeau v. Mawer Estate (1999), 25 E.T.R. (2d) 276 (B.C.S.C.); and Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (B.C.C.A.).

[66] As between moral claims, some may be stronger than others. The Court must weigh the strength of each claim and assign to each its proper priority. In doing so, the Court should take into account the important changes resulting from the death of the testator. There is no longer any need to provide for the person who died and reasonable expectations following upon death may not be the same as in the event of a separation during lifetime. A will may provide a framework for the protection of the beneficiaries and future generations and the carrying out of legitimate social purposes. Any moral duty should be assessed in light of the person who dies’ legitimate concerns which, where the assets of the estate permit, may go beyond providing for the surviving spouse and children: Tataryn at ¶32.

[81] The moral duty of a testator in a second marriage was considered by Russell J. in Saugestad v. Saugestad, 2006 BCSC 1839, varied on a different ground 2008 BCCA 38 at paras. 121-130. An important consideration in determining the moral obligation owed to a second spouse is that spouse’s contribution to the estate as set out in Saugestad at para. 126:

[126] The more limited moral claim of a second wife where the bulk of the testator’s estate was acquired during a first marriage was also considered as a relevant factor in Howard v. Howard Estate (1997), 32 B.C.L.R. (3d) 1, 16 E.T.R. (2d) 161 (C.A.) at para. 5 (although there was also a prenuptial agreement in that case). Along a similar line of reasoning, in Price v. Lypchuk Estate (1987), 11 B.C.L.R. (2d) 371, 26 E.T.R. 259 (C.A.), the fact that the testator’s estate had been built up by the joint efforts of the testator and his second wife was a factor considered by Lambert J.A. in the majority’s decision not to vary the will in favour of the children of the testator’s first marriage (at 382 B.C.L.R.). Thus, the contribution of a spouse to the estate is an important factor in determining the moral entitlement of that spouse.

[82] Other relevant considerations include any competing obligations with children from the first marriage, whether the spouse knew of the testator’s intention for his or her own children to inherit the estate, and the financial state of the spouse: Saugestad at paras. 125-129.

wills variation wills variation act BC Wills Variation Acts