Unsent Draft Text Message Valid Will – Australia

Executor Remuneration and Passing of Accounts

A court in Australia has accepted an unsent, draft text message on a dead man’s mobile phone as an official will.

The 55-year-old man had composed a text message addressed to his brother, in which he gave “all that I have” to his brother and nephew.

The message was found in the drafts folder on the man’s phone after he took his own life last year.

Brisbane Supreme Court ruled that the wording of the text indicated that the man intended it to act as his will.

In the message, the man gave details of how to access his bank account and where he had hidden money in his house.

“Put my ashes in the back garden,” he wrote. “A bit of cash behind TV and a bit in the bank.”

According to ABC News, the man’s wife applied to manage his assets and argued that the text mess
age was not valid as a will because it was never sent.

Typically, for a will to be valid in Queensland, it must be written and signed by two witnesses.

Justice Susan Brown said the wording of the text message, which ended with the words “my will”, showed that the man intended it to act as his will.

“The reference to his house and superannuation and his specification that the applicant was to take her own things indicates he was aware of the nature and extent of his estate, which was relatively small,” she said.

She said the “informal nature” of the message did not stop it representing the man’s intentions, especially as it was “created on or about the time that the deceased was contemplating death, such that he even indicated where he wanted his ashes to be placed”.

Validity of Wills

In 2006, the law in Queensland was changed to allow less formal types of documents to be considered as a will.

Another unusual will accepted in Queensland includes a DVD marked with “my will”, in 2013.

Executor Remuneration and Passing of Accounts

Executor Remuneration and Passing of Accounts

Re Beerenbrouk 2017 BCSC 1785 is a good summary of the law relating to executor remuneration and the passing of executor accounts.

A farm property worth $2 million was administered for 8 years and was complex and the beneficiary difficult.

The court awarded Capital Fee – (4% x $2 million): $80,000.00, b) Care and Management Fee: 64,000.00, c) 5% of rental income and interest income: 3,488.68 for a Total of $147,488.68

12 The administrator’s application to pass accounts and fix his remuneration is brought pursuant to Rule 25-13(1) which provides as follows:

(1) A personal representative or a person interested in an estate administered by a personal representative may apply, in accordance with subrule (2), for an order for one or both of the following:

(a) an order for the passing of the personal representative’s accounts in relation to the estate;
(b) an order to fix and approve the personal representative’s remuneration.

13 Upon hearing such an application, the options available to the court are provided in Rule 25-13(3):

(3) In an application under subrule (1), the court may do one or more of the following:
(a) hear and decide any matter relating to the accounts or the remuneration of the personal representative;
(b) direct the registrar to conduct an inquiry, assessment or accounting in relation to any matter relating to the accounts or the remuneration of the personal representative;
(c) make any other order or give any direction that the court considers appropriate in the circumstances.

The maximum amount for remuneration that may be charged by a personal representative is set out in s. 88 of the Trustee Act:

88 (1) A trustee under a deed, settlement or will, an executor or administrator, a guardian appointed by any court, a testamentary guardian, or any other trustee, however the trust is created, is entitled to, and it is lawful for the Supreme Court, or a registrar of that court if so directed by the court, to allow him or her a fair and reasonable allowance, not exceeding 5% on the gross aggregate value, including capital and income, of all the assets of the estate by way of remuneration for his or her care, pains and trouble and his or her time spent in and about the trusteeship, executorship, guardianship or administration of the estate and effects vested in him or her under any will or grant of administration, and in administering, disposing of and arranging and settling the same, and generally in arranging and settling the affairs of the estate as the court, or a registrar of the court if so directed by the court thinks proper.

(2) The court or a registrar of the court if so directed by the court, may make an order under subsection (1) from time to time, and the amount of remuneration must be allowed to an executor, trustee, guardian or administrator, in passing his or her accounts, in addition to any other allowances for expenses actually incurred to which the trustee, executor, guardian or administrator may by law be entitled.

(3) A person entitled to an allowance under subsection (1) may apply annually to the Supreme Court for a care and management fee and the court may allow a fee not exceeding 0.4% of the average market value of the assets.

30 The parties do not disagree on the test for an administrator’s remuneration. The criteria to be considered in determining the amount of remuneration which should be awarded are set out in Toronto General Trusts Corp. v. Central Ontario Railway (1905), 6 O.W.R. 350 (Ont. H.C.) at para. 23, wherein the Court states:

[23] From the American and Canadian precedents, based upon statutory provision for compensation to trustees, the following circumstances appear proper to be taken into consideration in fixing the amount of compensation: (1) the magnitude of the trust; (2) the care and responsibility springing therefrom; (3) the time occupied in performing its duties; (4) the skill and ability displayed; (5) the success which has attended its administration.

31 The compensation claimed must bear “some reasonable relationship to the work and responsibility involved”: Brown v. Martin, 2007 NLTD 115 (N.L. T.D.) at para. 9.

32 Maximum remuneration is not awarded as a matter of routine. Appropriate remuneration is a matter of what is fair and reasonable in all the circumstances: Zadra v. Cortese, 2016 BCSC 390 (B.C. S.C.) at para. 44.

The maximum amount for remuneration that may be charged by a personal representative is set out in s. 88 of the Trustee Act:

88 (1) A trustee under a deed, settlement or will, an executor or administrator, a guardian appointed by any court, a testamentary guardian, or any other trustee, however the trust is created, is entitled to, and it is lawful for the Supreme Court, or a registrar of that court if so directed by the court, to allow him or her a fair and reasonable allowance, not exceeding 5% on the gross aggregate value, including capital and income, of all the assets of the estate by way of remuneration for his or her care, pains and trouble and his or her time spent in and about the trusteeship, executorship, guardianship or administration of the estate and effects vested in him or her under any will or grant of administration, and in administering, disposing of and arranging and settling the same, and generally in arranging and settling the affairs of the estate as the court, or a registrar of the court if so directed by the court thinks proper.

(2) The court or a registrar of the court if so directed by the court, may make an order under subsection (1) from time to time, and the amount of remuneration must be allowed to an executor, trustee, guardian or administrator, in passing his or her accounts, in addition to any other allowances for expenses actually incurred to which the trustee, executor, guardian or administrator may by law be entitled.

(3) A person entitled to an allowance under subsection (1) may apply annually to the Supreme Court for a care and management fee and the court may allow a fee not exceeding 0.4% of the average market value of the assets.

30 The parties do not disagree on the test for an administrator’s remuneration. The criteria to be considered in determining the amount of remuneration which should be awarded are set out in Toronto General Trusts Corp. v. Central Ontario Railway (1905), 6 O.W.R. 350 (Ont. H.C.) at para. 23, wherein the Court states:

[23] From the American and Canadian precedents, based upon statutory provision for compensation to trustees, the following circumstances appear proper to be taken into consideration in fixing the amount of compensation: (1) the magnitude of the trust; (2) the care and responsibility springing therefrom; (3) the time occupied in performing its duties; (4) the skill and ability displayed; (5) the success which has attended its administration.

31 The compensation claimed must bear “some reasonable relationship to the work and responsibility involved”: Brown v. Martin, 2007 NLTD 115 (N.L. T.D.) at para. 9.
32 Maximum remuneration is not awarded as a matter of routine. Appropriate remuneration is a matter of what is fair and reasonable in all the circumstances: Zadra v. Cortese, 2016 BCSC 390 (B.C. S.C.) at para. 44.

I consider a care and management fee for eight years to be appropriate, which is until sometime shortly after the entire estate was held in trust such that no care or management was required. The care and management fee is also based on an average estate value of $2.0 million.

64 To summarize, I have utilized the following amounts in consideration of the administrator’s remuneration:

a) Capital Fee – (4% x $2 million): $80,000.00
b) Care and Management Fee: 64,000.00
c) 5% of rental income and interest income: 3,488.68
d) Total: $147,488.68

Proof In Solemn Form and Attestation Clauses

Proof In Solemn Form and Attestation Clauses

Bhall Estate 2017 BCSC 1867 involved a contested application to prove a will in solemn form where the court inter alia relied upon the presence of the attestation clause to be of some significance.

The will was drafted by a lawyer who kept very few notes and could not recollect who interpreted his instructions as the deceased spoke and understood no English.

Despite these shortcomings, the court found the will to be valid and granted probate.

Attestation Clauses

As noted in Allart Estate v. Allart, 2014 BCSC 2211, at paragraphs 58 and 59, the presence of an attestation clause is of significance. There the court said this:

[58] More significantly, in this case, the Original Will has an attestation clause, from which it can be presumed that the will was duly executed and witnessed by persons who knew the requirements of the Wills Act. The court will not assume that a person has signed his or her name to the attestation knowing it to be untrue: Beaudoin at para. 11; Yen Estate at paras. 14-16.

[59] Given the presence of the attestation clause with the names of the two witnesses below it attesting to the signature of the Decease [sic], as well as the apparent compliance with the statutory requirements for a will, I conclude that the doctrine of omnia presumuntur rite esse acta applies. I must presume that the will was duly executed by the Deceased and witnessed by individuals who knew the requirements of the Act unless evidence to the contrary is proven.

Partial Summary Trial Rebuked

Partial Summary Trial Rebuked

The Ontario Court of Appeal has issued a warning to lawyers that they should only bring partial summary judgment motions in the clearest of cases.

In a recent judgment in Butera v. Chown, Cairns LLP,2017, the court allowed a $5-million negligence action brought against a law firm to proceed to trial in its entirety and rolled back a lower court judge’s decision to dismiss part of the case.

“A motion for partial summary judgment should be considered a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner.”

[23] In Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87, the Supreme Court rewrote the law on summary judgments. Justice Karakatsanis, writing for a unanimous court, commenced her analysis by stating: “Ensuring access to justice is the greatest challenge to the rule of law in Canada today.” She described accessibility as being achievable through justice that is proportionate, timely and affordable. As noted in that decision, rr. 1.04(1) and (1.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, specifically codify the proportionality principle:

1.04(1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[24] The Superior Court of Justice has since considered a multitude of summary judgment motions using the principles established in Hryniak.

[25] Hryniak does not address partial summary judgment per se except in the context of exercising the enhanced fact-finding powers contained in r. 20.04(2.1). In that regard, Karakatsanis J. observed that it may not be in the interests of justice to use the new fact-finding powers to grant summary judgment against a single defendant if the claims against other parties will proceed to trial in any event. Such partial summary judgment runs the risk of duplicative proceedings or inconsistent facts.
On the other hand, Karakatsanis J. noted that the “resolution of an important claim against a key party could significantly advance access to justice and be the most proportionate, timely and cost effective approach.”

[26] The pre-Hryniak appellate jurisprudence on partial summary judgment limited its availability. At para. 3 of Corchis v. KPMG Peat Marwick Thorne, [2002] O.J. No. 1437 (C.A.), this court applied Gold Chance International Ltd. v. Daigle& Hancock, [2001] O.J. No. 1032 (S.C.J.) to state that:

Partial summary judgment ought only to be granted in the clearest of cases where the issue on which judgment is sought is clearly severable from the balance of the case. If this principle is not followed, there is a very real possibility of a trial result that is inconsistent with the result of the summary judgment motion on essentially the same claim.

[23] Since Hryniak, this court has considered partial summary judgment in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (CanLII), 120 O.R. (3d) 438 and in Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922 (CanLII), 133 O.R. (3d) 561. Baywood was decided in the context of a motion for summary judgment on all claims, but where only partial summary judgment was granted. CIBC involved a motion for partial summary judgment.

[24] In both Baywood and CIBC, the court analyzed the issue from the perspective of whether (i) there was a risk of duplicative or inconsistent findings at trial and whether (ii) granting partial summary judgment was advisable in the context of the litigation as a whole. In both cases, the court held that partial summary judgment was inadvisable in the circumstances.

[25] The caution expressed pre-Hryniak in Corchis is equally applicable in the post -Hryniak world. In addition to the danger of duplicative or inconsistent findings considered in Baywood and CIBC, partial summary judgment raises further problems that are anathema to the stated objectives underlying Hryniak.

[26] First, such motions cause the resolution of the main action to be delayed. Typically, an action does not progress in the face of a motion for partial summary judgment. A delay tactic, dressed as a request for partial summary judgment, may be used, albeit improperly, to cause an opposing party to expend time and legal fees on a motion that will not finally determine the action and, at best, will only resolve one element of the action. At worst, the result is only increased fees and delay. There is also always the possibility of an appeal.

[27] Second, a motion for partial summary judgment may by very expensive. The provision for a presumptive cost award for an unsuccessful summary judgment motion that existed under the former summary judgment rule has been repealed, thereby removing a disincentive for bringing partial summary judgment motions.

[28] Third, judges, who already face a significant responsibility addressing the increase in summary judgment motions that have flowed since Hryniak, are required to spend time hearing partial summary judgment motions and writing comprehensive reasons on an issue that does not dispose of the action.

[29] Fourth, the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial therefore increasing the danger of inconsistent findings.

[23] When bringing a motion for partial summary judgment, the moving party should consider these factors in assessing whether the motion is advisable in the context of the litigation as a whole. A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner. Such an approach is consistent with the objectives described by the Supreme Court in Hryniak and with the direction that the Rules be liberally construed to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits.

[24] Lastly, I would observe the obvious, namely, that a motion for partial summary judgment differs from a motion for summary judgment. If the latter is granted, subject to appeals, it results in the disposal of the entire action. In addition, to the extent the motion judge considers it advisable, if the motion for summary judgment is not granted but is successful in part, partial summary judgment may be ordered in that context.

[25] Turning then to the substance of the second ground of appeal, the appellants submit that granting partial summary judgment on the misrepresentation issue provides minimal, if any, efficiency as the action is proceeding to trial on the negligence, breach of contract, and Arthur Wishart Act claims. The misrepresentation claims are largely intertwined with these other claims and partial summary judgment risks inconsistent results.

[26] The respondents reject these submissions, arguing that r. 20.05(1) recognizes the utility of partial summary judgment. The motion judge’s decision is entitled to deference and was appropriate for the litigation as a whole.

As explained in Hryniak, the exercise of powers under the summary judgment rule generally attracts deference. Here the motion judge made an extricable error in principle in failing to consider whether partial summary judgment was appropriate in the context of the litigation as a whole. As the appellants point out, the action is proceeding to trial on the Arthur Wishart Act claims, which include allegations of a breach of the duty of fair dealing and deficient disclosure, the claims in negligence, and for breach of contract. These claims are intertwined with the misrepresentation claims. An award of partial summary judgment in these circumstances may lead to inconsistent results to the extent the misrepresentation claims were not barred due to a limitation period. On the other hand, had the litigation as a whole been considered, partial summary judgment would not have been an appropriate award as it would not serve the objectives of proportionality, efficiency, and cost effectiveness.

Summary Judgement Principles

Summary Judgement Principles

Summary Judgment Principles were discussed in Winter v Sherman 2017 ONSC 5492

[25]           Summary judgment is available where there is no genuine issue for trial: Hyrniak v. Mauldin, 2014 SCC 7 (CanLII), 366 D.L.R. (4th) 641, at para. 34.

[26]           The court will find that there is no genuine issue requiring a trial when it is able to reach a fair and just determination on the merits.  The motions judge should determine if there is a genuine issue requiring a trial based only on the evidenece before her, without using the fact-finding powers in Rule 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:  Hyrniak, at paras. 49 and 66.

[27]           The standard for a “fair and just determination” is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.  The evidence need not be equivalent to that at trial but must be such that the judge is confident that she can fairly resolve the dispute: Hyrniak, at paras. 50 and 57.

[28]           On a summary judgment motion, the court is entitled to assume that the parties have advanced their best case and that the record contains all of the evidence the parties would present at trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (CanLII), [2014] O.J. No. 851, at para. 33.

[29]           While summary judgment can operate as a timely, fair, and cost-effective means of adjudicating a civil dispute, it has its limits.  Not all civil disputes are amenable to a final adjudication on the merits by summary judgment.  In certain cases, adjudication exclusively on a written record poses a risk of substantive unfairness.  Great care must be taken to “ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial”: Baywood Homes Partnerships v. Haditaghi, 2014 ONCA 450 (CanLII), 120 O.R. (3d) 438, at para. 44; see also Cook v. Joyce, 2017 ONCA 49 (CanLII), 275 A.C.W.S. (3d) 399, at para. 91.

6 Factors of a Fiduciary Relationship

6 Factors of a Fiduciary Relationship

Six factors must exist to create an ad hoc fiduciary duty as per the Supreme Court of Canada in Elder Advocates of Alberta Society v. Alberta, [2011] 2 S.C.R. 261, at paras. 27 and 36.

6 Factors for Fiduciary Relationships:

(1) the fiduciary has scope for the exercise of some discretion or power;
(2) the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or substantial practical interests;
(3) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power;
(4) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries;
(5) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and
(6) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control.

S.58 and 59 WESA Application Ordered to Trial

S.58 and 59 WESA Application Ordered to Trial

Estate of Palmer 2017 BCSC 1430 dealt with  an application to cure defects in a will under sections 58 and 59 of WESA, but was ordered to trial rather than having been dealt with summarily by affidavits.

Ms. Palmer executed a short will on August 18, 1988. By that document, she appointed Montreal Trust and her cousin, Emily Takats, as her executors and trustees. She also named Ms. Takats as the sole residual beneficiary of her estate. Ms. Takats died well before Ms. Palmer.

[5] Following her death, a copy of Pauline Palmer’s 1998 will was discovered bearing various handwritten alterations and initials. Some of the changes are in black ink and some in blue ink. The changes include:

• updating Ms. Palmer’s address;
• deleting Montreal Trust and Emily Takats as executors and trustees and substituting in their place “Alan Homeniuk (sic), 10 English Way, St. Albert, Alberta”; and
• deleting the name Emily Takats as a residual beneficiary.

[6] The operative words of the will containing the handwritten changes now read as follows:

• “I nominate, constitute and appoint Alan Homeniuk of 10 English way, St. Albert, Alberta, and my cousin [name deleted], presently of [city deleted] to be the executors and trustees of this my Will”;
• “To deliver the rest and residue of my estate unto my said cousin [name deleted] for his [changed from “her”] own use and benefit absolutely.”

WESA and the Determination of Testamentary Intentions

[27] The recent case of Estate of Young, 2015 BCSC 182, describes the legal framework applicable to s. 58 of WESA and the curing of “deficiencies” related to the making or alteration of a will. The history and intent of the legislation, including the case law in other jurisdictions addressing similar provisions, is set out in paras. 16–33 of that decision and will not be repeated here. The law is summarized in paras. 34–37 of the decision and can be paraphrased as follows:

• the courts’ curative power with respect to non-compliant testamentary documents is inevitably and intensely fact-sensitive;
• the first threshold issue is whether the document in question is authentic;
• the second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions;
• a testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death. Rather, the document must record a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death;
• the burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is the balance of probabilities;
• factors relevant to establishing the existence of a fixed and final testamentary intention may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document; and
• generally speaking, the further a document departs from the formal validity requirements of the legislation, the harder it may be for the court to find that it embodies the deceased’s testamentary intention.

[28] Both s. 58 and 59 of WESA provide for an “application” to court to determine whether a certain document represents the testamentary intentions of a deceased person and/or rectification is warranted because the will fails to implement the deceased’s intent.

[29] Rules 2-1(2)(b) and (2.1) of the Supreme Court Civil Rules provide for the initiation of proceedings in estate matters or in respect of any application authorized by statute to be made to the court. It is possible that the manner in which the present application has been brought does not properly comply with those rules but, in any event, there is no doubt that a chambers hearing is ultimately contemplated thereby triggering the application of Rule 22-1, including the following sub-rules:

Evidence on an application

(4) On a chambers proceeding, evidence must be given by affidavit, but the court may
(a) order the attendance for cross-examination of the person who swore or affirmed the affidavit, either before the court or before another person as the court directs,
(b) order the examination of a party or witness, either before the court or before another person as the court directs,
(c) give directions required for the discovery, inspection or production of a document or copy of that document,
(d) order an inquiry, assessment or accounting under Rule 18-1, and
(e) receive other forms of evidence.
…

Power of the court

(7) Without limiting subrule (4), on the hearing of a chambers proceeding, the court may
(a) grant or refuse the relief claimed in whole or in part, or dispose of any question arising on the chambers proceeding,
(b) adjourn the chambers proceeding from time to time, either to a particular date or generally, and when the chambers proceeding is adjourned generally a party of record may set it down on 3 days’ notice for further hearing,
(c) obtain the assistance of one or more experts, in which case Rule 11-5 applies, and
(d) order a trial of the chambers proceeding, either generally or on an issue, and order pleadings to be filed and, in that event, give directions for the conduct of the trial and of pre-trial proceedings and for the disposition of the chambers proceeding.

[30] I have attempted to explain above why the affidavit evidence tendered on this application respecting certain matters is insufficient to do justice to the testamentary intentions of Ms. Palmer. In my view, oral evidence from the three affiants is desirable including cross-examination of those affiants on certain aspects of their testimony. As well, evidence must be adduced respecting Ms. Palmer’s physical and mental health and, in particular, her testamentary capacity at the time the changes to her will were made.

[31] Furthermore, three of the potential beneficiaries under WESA have not been included in the proceedings to date. It appears that Ms. Perret has no interest in actively participating in the present proceeding, however the court is not satisfied that any meaningful effort has been invested by any of the parties in tracing and notifying each of Bradley Palmer, Grant Palmer and Dolores Palmer. Their legal interests are at stake in this proceeding and they cannot simply be ignored.

[32] Rule 22-1(7)(d) permits the court to order a trial of any chambers proceeding and to give directions respecting the filing of pleadings and the further conduct of the matter. The legal test for converting a chambers proceeding into a trial was recently reviewed by the Court of Appeal in British Columbia (Milk Marketing Board) v. Saputo Products Canada G.P., 2017 BCCA 247. It is akin to the test applicable for summary judgment under Rule 9-6, i.e., whether a bona fide triable issue arises on the evidence before the court which warrants determination at a trial. The threshold is relatively low in that regard.

Decision and Orders Made

[33] In my view, there is a bona fide triable issue between the parties whether the handwritten amendments to Ms. Palmer’s will record a fixed and final expression of intention to make Mr. Homeniuk the sole beneficiary of her estate, an issue which cannot be satisfactorily resolved based solely on the affidavit evidence adduced to date. Accordingly, I make the following orders:
1. the within chambers proceeding will proceed to a trial;

Parental Monies to Children: Loan or Gift?

Parental Monies to Children: Loan or Gift?

Weinhaupt v Paracy 2017 BCSC 1662 deals with an increasing phenomena- the advancement of funds by parents to children in order to assist in the financing of the purchase of a home, and whether the advancement of funds was a gift or a loan when the marriage terminates.

Weinhaupt  reviews  the law and came to the conclusion in that case that the funds were a loan and not a gift.

In T.J.M. v. C.R.M., 2009 BCSC 1122, at para. 81, for example, Joyce J. found that an advance from a spouse’s mother that was used as a down-payment to purchase a family home was in fact a loan, despite the provision of a similar gift letter in that case. Joyce J. relied on the presence of a written promissory note (as apparently exists in this case) as well as the fact that several payments had been made in repayment of the alleged loan (a fact not present in this case) to reach that conclusion.

[55] A similar issue arose in Savost’Yanova v. Chui, 2015 BCSC 516. In that case, Weatherill J. described the issue as follows (at paras. 38-39):

[38] In order for the parties to qualify for mortgage financing for the purchase of the matrimonial home, Mr. and Mrs. Chui signed a letter, drafted by the respondent, indicating that the $60,000 they provided towards the purchase price was not a loan but rather a gift by them to the parties (“Gift Letter”). Mr. Chui testified that, without the Gift Letter, the parties would have had to purchase mortgage insurance, which was expensive. He and the respondent testified that, despite what had been represented in the Gift Letter, the $60,000 advance was always intended and understood to be a loan.

[39] The claimant testified that she knew nothing of any of this. Rather, she testified that the respondent told her that his parents had gifted an additional $25,000 to them for the purchase of the house. As had been the case with the apartment purchase, the claimant had no knowledge of how the balance of the purchase price was financed other than she knew there was mortgage financing. She testified that she had no knowledge of the Gift Letter until it was produced during this litigation.

[56] In concluding, like Joyce J., that the gift letter before him did not negate the intention to grant a loan, Weatherill J. elaborated on the elements of the legal test to be applied in making that determination (at paras. 75-77):

[75] The law regarding whether a transfer made by a parent to an adult child is a loan or a gift was summed up by Madam Justice Brown in Hawley v. Paradis, 2008 BCSC 1255 at para. 30, after a review of the applicable authorities:

[30] Based on the case law presented to me, I conclude:

1. that the presumption of advancement no longer applies between adult children and their parents;
2. that as between adult children and their parents, the presumption is a resulting trust when the parents make gratuitous transfers to children;
3. that the court must consider all of the evidence in determining whether the parent intended the transfer as a gift or a loan;
4. that the factors considered in Wiens and Locke will assist the court in determining whether the advance was a loan or a gift.

[76] A determination of whether funds were advanced as a loan or a gift turns on the unique facts of each case. However, the following factors referred to above have been identified in the case authorities as those that should be considered when the advance occurs in a family context:

a) whether there were any contemporaneous documents evidencing a loan;
b) whether the manner for repayment is specified;
c) whether there is security held for the loan;
d) whether there are advances to one child and not to others, or advances of unequal amounts to various children;
e) whether there has been any demand for payment before the separation of the parties;
f) whether there has been any partial repayment; and
g) whether there was any expectation, or likelihood, of repayment.

See Wiens v. Wiens (1991), 31 R.F.L. (3d) 265; Locke v. Locke, 2000 BCSC 1300 at para. 20; Gill v. Jaspal, 2010 BCSC 698 at para. 9.

[77] In determining the intent of the person who advances money in a family context, the court must weigh all of the evidence to determine whether the presumption of resulting trust has been rebutted; it will depend on the facts of each case: Pecore v. Pecore, 2007 SCC 17 at para. 55.

I therefore find that both Ms. Paracy and Mr. Weinhaupl signed the promissory note on December 16, 2006 intending the debt to be a joint obligation. I am unable to find that Mr. Weinhaupl told Ms. Paracy that the down-payment was a gift from his mother. The only evidence suggesting that the down-payment was a gift is the Gift Letter and I accept Mr. and Ms. Weinhaupl’s explanation for it.

[64] Applying the test set out in Savost’Yanova in light of the facts as I have found them, I note the following:

a. there is contemporaneous documentary evidence of a loan, i.e., the promissory note and the mortgage;
b. the manner of repayment is specified, inasmuch as the promissory note states on its face that “Upon the sale of this condo, $60,000.00 is due and payable to my mother”;
c. there is security held for the loan (i.e., the mortgage);
d. there has been no partial payment because none has been called for until now; and
e. there was a reasonable expectation, or likelihood of repayment once the property was sold.

[65] In light of those considerations, along with all of the other evidence before me, I find that Ms. Weinhaupl’s advance of the down-payment was a loan, not a gift.

Unwitnessed Will Valid: S.58 WESA

Unwitnessed Will Valid: S.58 WESA

Re Riguidel Estate 2017 BCSC 1667 found a signed but unwitnessed will to be valid by invoking the curative provisions of Section 58 WESA.

The Facts:

The people present when the deceased signed the handwritten and typed documents were the deceased, Ms. Leonard and Mr. Kapinus. The deceased was present when Ms. Leonard and Mr. Kapinus signed their names as witnesses to the deceased’s signature.

[28] Mr. Kapinus also states that he was unaware that two witnesses were required. He used the same language as Ms. Leonard did in her Affidavit, where he swore:

16. The Deceased appeared confident about signing the Will. He did not hesitate. I asked him if the Will was exactly what he wanted and he advised me that it was.

17. At no time did I observe anyone pressuring the Deceased to change his Will or to make any specific gift.

18. The Deceased and I discussed the Will and it was clear that it reflected his final wishes. The Will is consistent with my prior discussions with the Deceased.

19. I have no reason to believe that the Will is not an accurate reflection of the Deceased’s final wishes. I observed no evidence that the Deceased was forced or compelled to distribute his estate in the manner set out in the Will. The Deceased appeared to be thinking clearly at the time. He was not confused and he understood what he was doing.

[29] The most compelling evidence is that of Donna Malley, the deceased’s daughter. She states that when she learned of her father’s cancer diagnosis in January 2016. She travelled to Kamloops in order to be with him, arriving on or about February 11, 2016. She swears to the following:

3. I have learned that prior to my arrival on February 11, 2016, my father signed a document to vary his will (the “Codicil”), a true copy of which is attached hereto as Exhibit “A”.
(Exhibit A is the typewritten document prepared by Mr. Kapinus).

[30] Ms. Malley also swears the following:

4. On or about February 13, 2016, I had a conversation with my father, at which time he advised me that it was important to him that my sister, Debi, was to obtain the house that he owned after he died, as she had done so much for him.

5. Debi and her husband, Vince, lived with my parents for many years and contributed to the construction and upkeep of the house.

6. It is my understanding and belief that after my mother died, my father realized that he did not have enough money to pay his mortgage. In or about early November 2015, I was present during a conversation between my sister Debi Riguidel, Vince Kapinus, and my father in which Debi and Vince told my dad not to worry that they would pay his mortgage and bills and ensure that he would always be taken care of financially.

[31] In her Affidavit, Ms. Malley sets out her understanding as to why her sister and Mr. Kapinus were to receive the house, and describing their relationship as a “trusting and loyal friendship”, and that it is “his way of saying that he will always take care of them in the same way that they did for him”. She further swears:

11. I believe that my father intended to provide Debi and Vince with his house in part because both my sister, Kimberly, and I have houses of our own and we did not live with my parents as adults.

12. I am confident that the February 11, 2016, Codicil prepared by my father and attached hereto as Exhibit “A” is a true and accurate reflection of my father’s wishes.

The Law

[34] In Young Estate (Re), 2015 BCSC 182, Madam Justice Dickson, as she then was, described some of the factors that should be present when seeking a non-compliant document to represent the deceased’s person’s intention under the curative provisions of s. 58(3) of WESA. In determining the deceased’s final testamentary intentions, Madam Justice Dickson wrote:

[36] The burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is a balance of probabilities. A wide range of factors may be relevant to establishing their existence in a particular case. Although context specific, these factors may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document: Sawatzky at para. 21; Kuszak at para. 7; Martineau at para. 21.

[37] While imperfect or even non-compliance with formal testamentary requirements may be overcome by application of a sufficiently broad curative provision, the further a document departs from the formal requirements the harder it may be for the court to find it embodies the deceased’s testamentary intention: George at para. 81.

[35] The curative provisions of s. 58(3) of the WESA are fact sensitive.

[36] Extrinsic evidence is permitted in order to determine whether the non-compliant document is the deceased’s final expression, as to his or her testamentary intentions pursuant to s. 58(3) of WESA: Litke Estate (Re), 2017 BCSC 1079 at para. 39.

[37] It comes down to this – whether the document presented was prepared by the deceased and that its contents represent a “deliberate or fixed and final testamentary intention at the material time for the disposition of the estate: Litke Estate (Re) at para. 42.

Discussion

[38] I am satisfied, on the evidence, that the documents dated February 7, 2016, copies of which are in Appendix 1 to these reasons, are the deliberate expressions of the deceased’s wishes as to the disposition of his property upon his death.

[39] I also find that the handwritten document signed by the deceased and the witnesses, Ms. Leonard and Mr. Kapinus, in the deceased’s presence was to record and confirm that the typewritten document set out the terms of the handwritten document, which reflected the deceased’s intentions before the deceased signed the typewritten document.

[40] It is clear from all of the evidence that the deceased recognized a moral, if not a legal obligation, to his daughter and son-in-law for their contributions to his estate.

[41] I determine that the typewritten document dated February 7, 2016 represents and embodies the deceased’s testamentary intentions sufficient to alter his Will as to the disposition of the assets of his estate and is effective as part of the Will

Partition and Sale Refused Due to Serious Hardship

Partition and Sale Refused Due to Serious Hardship

Lou v Vesterinen 2017 BCSC 1566 refused an application for partition and sale by  trustee in bankruptcy due to “serious hardship” of the two young children living in the home, one of whom was severely disabled.

It is a good example of where the court will exercise it’s discretion to refuse partition and sale where hardship exists to the owner of the property.

The court’s discretion under the PPA:

[105] Section 2 of the PPA provides in relevant part:

(1) All joint tenants, tenants in common, . . . and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.

(2) Subsection (1) applies whether the estate is legal or equitable or equitable only. . . .

[106] Under s. 7 of the PPA, the court has the discretion to order sale of property, rather than partition.
[107] Sections 2, 6 and 7 also give the court discretion not to order a sale.

[108] In Harmeling v. Harmeling (1978), 90 D.L.R. (3d) 208 (B.C.C.A.), a case decided under what is now s. 2 of the PPA, the court declined to limit the discretion to cases where the proceedings were brought with a lack of good faith, malice or vexatious intent. Seaton J.A., writing for the majority, stated at p. 212:

. . . In my view we should not limit the discretion of that manner. I think we ought to accept without qualification the general statement that there is a prima facie right of a joint tenant to partition or sale and that the Court will compel such partition or sale unless justice requires that such an order should not be made.

[109] In Bradwell v. Scott, 2000 BCCA 576, the Court explained that there was no real difference between the discretion conferred under ss. 6 and 2 of the PPA:

43 It does not appear from my reading of either the majority or minority reasons for judgment in Harmeling that the section then equivalent to our present s. 6 was under consideration. Rather, the section considered by both judges who wrote in Harmeling, as indicated above, was s. 3 (now s. 2), and in particular the words “may be compelled”. We are bound by the majority opinion that those words confer a discretion to refuse an order where “justice requires that such an order should not be made”.

44 This case, however, turns on the interpretation of s. 6, and the meaning to be given to the words “unless it sees good reason to the contrary”. Having said that, I am unable to see any real difference between the discretion conferred by this language and that described by Mr. Justice Seaton as arising under s. 3 (now s. 2).

45 To the extent that “serious hardship” was said in Dobell to be the test for “good reason to the contrary” I would respectfully disagree. Serious hardship to a respondent may be a proper ground for refusing an order for sale, as might lack of “good faith, vexatiousness or maliciousness” on the part of the petitioner. But these are not the exclusive measure of “good reason”. I agree with Mr. Justice Seaton that we should not limit the discretion by creating a general rule that might serve to justify refusal in any given case. The facts and circumstances of each case must be examined to determine whether a good reason, of whatever sort, exists for refusing the order.
[Emphasis added].

[110] Serious hardship is a circumstance that may constitute a proper ground for refusing an order for sale: Mowat v. Dudas, 2012 BCSC 454 at para. 147.

[111] In Mowat at paras. 162 to 167 and 191, the court concluded that it would be unjust to make the order for sale where a substantial number of residents of a common-law condominium, many of whom were elderly, infirm or of very limited financial means, would be put out of their homes without the means to find suitable replacement housing.

[112] Here, the petitioner had a prima facie right to an order for sale of Glenroy Drive. The question is whether, in all the circumstances, there is good reason for the court to refuse that order.

[113] Glenroy Drive is the family home of the respondent, Mr. Vesterinen, the respondent’s adult daughter and her two young children. Nichola Sobie rents a three-bedroom basement suite at Glenroy Drive, for which she pays rent of $700 a month to her mother. She works as a retail clerk and relies upon the respondent for child care for her two children, ages eleven and four.

[114] The respondent’s daughter has a history of bipolar disorder and schizophrenia for which she receives ongoing treatment. From 1997 through 2004 she was repeatedly hospitalized for psychosis or depression. Since then, her condition has stabilized. She attributes her ability to function in the community and as a mother to the support she receives from the respondent and the stable accommodation she enjoys at Glenroy Drive.

[115] The petitioner submits that while an order for sale may result in some inconvenience, the respondent has not shown that she, or members of her family, would suffer serious hardship. I disagree. The respondent’s daughter earns a limited income, is a vulnerable person, relies upon her proximity to her mother for both childcare and emotional support, and would likely encounter difficulty in finding similar accommodation within her means. I find that an order for sale would result in serious hardship to the respondent’s family.

Conclusion on Petitioner’s Application

[116] In my view, this is a case where there is good reason to refuse an order for sale. In reaching that conclusion, I take into account both by finding of serious hardship and my finding that the respondent’s beneficial interest in Glenroy Drive substantially exceeds Mr. Vesterinen’s beneficial interest.