Month: May 2023

Vancouver Estate Lawyer – Trusts Basics

Trevor Todd and Jackson Todd have over 60 years experience in handling contested estate matters including trusts.

A trust arises where one party (the trustee) holds the title to property for the benefit of another (the beneficiary). An express trust is a trust that has been intentionally created by the settlor.

A bare trustee simply holds legal title to an asset, with all the risks and rewards remaining with the beneficial owner: Scoretz v. Kensam Enterprises Inc., 2017 BCSC 1356 at para. 41 [Scoretz BCSC], rev’d on other grounds 2018 BCCA 66 [Scoretz BCCA].

A bare trustee owes a fiduciary duty to the trust’s beneficiary: 0731431 B.C. Ltd. v. Panorama Parkview Homes Ltd., 2021 BCSC 607 at paras. 243–246. The bare trustee is obligated to deliver the trust property to the beneficiary upon demand and to take whatever steps are required to do so: Scoretz BCCA at para. 23. This obligation was summarized in Donovan W.M. Waters, Mark R. Gillen & Lionel D. Smith, Waters’ Law of Trusts in Canada, 5th ed. (Toronto: Thomson Reuters Canada, 2021) at 2.VIII:

The usually accepted meaning of the term “bare”, “naked” or “simple” trust is a trust where the trustee or trustees hold property without any duty to perform except to convey it to the beneficiary or beneficiaries upon demand. It is true, of course, that so long as a trustee holds property on trust he or she has the duty to account for the property, keeping it secure and unharmed. The trustee cannot divest him- or herself of this duty, and, if that is the trustee’s sole duty, he or she must transfer that property to the beneficiary on demand.

For a bare trust to be valid, the law requires that it comply with three certainties at the time of settlement:

a) certainty of intention,
b) certainty of objects, and
c) certainty of subject matter.
See: Forsyth (Re), 2010 BCSC 1720 at para. 6; Sanchez v. Canada (National Revenue), 2022 BCSC 1963 at paras. 11–13.

The three certainties are explained in Waters’ Law of Trusts in Canada at 5.I:

This means that the alleged settlor, whether giving the property on the terms of a trust or transferring property on trust in exchange for consideration, must employ language which clearly shows his or her intention that the recipient should hold on trust.
No trust exists if the recipient is to take absolutely, but he or she is merely put under a moral obligation as to what is to be done with the property.
If such imperative language exists, it must, second, be shown that the settlor has so clearly described the property which is to be subject to the trust that it can be definitely ascertained. Third, the objects of the trust must be equally and clearly delineated.
There must be no uncertainty as to whether a person is, in fact, a beneficiary.

If any one of these three certainties does not exist, the trust fails to come into existence or, to put it differently, is void.

If the first requirement is not met, i.e., the transfer of property was not intended to have been subject to a trust obligation, the transferee takes the property beneficially.

If the first requirement is met but the intended trust fails due to uncertainty of subject matter or objects, then the property is held on a resulting trust in favour of the settlor: Lewis v. Alliance of Canadian Cinema Television and Radio Artists, 1996 CanLII 661 at para. 21, 18 B.C.L.R. (3d) 382 (C.A.).

Applications for Extension of Time to Appeal

In accordance with R. 6(2) of the Court of Appeal Rules, B.C. Reg. 120/2022, is required to file and serve a notice of appeal not more than 30 days after the order was pronounced.

Section 32 of the Court of Appeal Act, S.B.C., 2021, c. 6, provides that a justice may extend a time limit in the Act or Rules, including for filing and serving a notice of appeal.

The burden is on the applicant to establish that the criteria for granting such an extension are met: Rapton v. British Columbia (Motor Vehicles), 2011 BCCA 71 at para. 19.

In considering an application to extend time to file and serve an appeal, certain factors are described in Davies v. C.I.B.C. (1987), 15 B.C.L.R. (2d) 256 at 259–260 (C.A.):

a. Was there a bona fide intention to appeal?
b. When were the respondents informed of the intention?
c. Would the respondents be unduly prejudiced by an extension of time?
d. Is there merit in the appeal?
e. Is it in the interest of justice that an extension be granted?

The interests of justice is “an overriding question and embraces the first four questions”: Davies at 260–261.

But it is “not all that comprises the fifth factor.” The interests of justice include a myriad of factors, such as the interests of the parties and compliance with the Rules of Court: Clock Holdings Ltd. v. Braich, 2009 BCCA 437 at paras. 23–24.

Notices to Admit

One of the most powerful yet under utilized litigation tool is the Notice to Admit.

Civil Rule 7-7(14) reads in part:

(1) In an action in which a response to civil claim has been filed, a party of record may, by service of a notice to admit in Form 26, request any party of record to admit, for the purposes of the action only, the truth of a fact or the authenticity of a document specified in the notice.

The Civil Rule 7-7(2) speaks to the effect of a notice to admit and provides that:

(2) Unless the court otherwise orders, the truth of a fact or the authenticity of a document specified in a notice to admit is deemed to be admitted, for the purposes of the action only, unless, within 14 days after service of the notice to admit, the party receiving the notice to admit serves on the party serving the notice to admit a written statement that

(a) specifically denies the truth of the fact or the authenticity of the document,

(b) sets out in detail the reasons why the party cannot make the admission, or

(c) states that the refusal to admit the truth of the fact or the authenticity of the document is made on the grounds of privilege or irrelevancy or that the request is otherwise improper, and sets out in detail the reasons for the refusal.

Civil Rule 7-7(4) provides that the court may order a party who unreasonably refuses to admit a fact, pay the costs associated with the proof of those facts which the party unreasonably refused to admit. If a responding party unreasonably denies or refuses to admit the truth of a fact or the authenticity of a document specified in a notice to admit, the court may order the party to pay the costs of proving the truth of the fact or the authenticity of the document and may award as a penalty additional costs, or deprive a party of costs, as the court considers appropriate.

In the present case, at paras. 4-29 of the notice to admit, the defendants have provided a boilerplate refusal which reads; “Refuse to make admission. The circumstances surrounding the dealing of the parties are outlined in the pleadings filed by the defendants. This is a triable issue and cannot be dealt with by way of admissions.”

In Ceperkovic v. MacDonald, 2016 BCSC 939, Madam Justice Dillon discusses the purpose of a notice to admit at para. 30, where she says: I

The purposes of the notice to admit are multiple. The primary purpose is to “save both the Court and litigants the time and expense involved in proving the authenticity of documents or in proving facts” (Clarke v. Minister of National Revenue (2000), 189 F.T.R. 76 at para. 43, [2000] F.C.J. No. 475). The rule is intended to eliminate issues altogether from a case or to facilitate proof of issues that cannot be eliminated (Garry D. Watson & Derek McKay, eds., Holmested and Watson: Ontario Civil Procedure (Toronto: Carswell, 1993) (looseleaf updated 2014, release 1) vol. 5 at 51§7 (Holmested and Watson)). Thus, the notice to admit can isolate important factors from a strategic and cost efficient perspective [citation]. It enables the parties to “prepare for an efficient trial focused on what is disputed” (Orlan Karigan & Associate Ltd. v. Hoffman (2000), 2000 CanLII 22725 (ON SC), 52 O.R. (3d) 235 at para. 21 (Sup. Ct. J.)). The notice to admit obviates the necessity and expense of calling evidence at trial (Canada Southern Petroleum v. Amoco Canada Petroleum (1994), 1994 CanLII 9096 (AB KB), 168 A.R. 126 at para. 16 (Q.B.)). Ultimately, it is a means to foster the timely adjudication of a claim on its merits (Furgiuele v. Don Casselman Global Enterprises, 2013 ONSC 7032 at para. 44 (Furgiuele)).

The decision canvasses the factors enumerated in Civil Rule 7‑7(2) and discusses some of the valid refusals for admitting a fact; namely, that the requested fact is privileged, that the party simply does not have the information necessary to answer it, or that the requested admission is somehow improper, or a veiled attempt to obtain particulars or ensure compliance with discovery obligations. The court also states, at para. 35, that the notice might be overly repetitious, overly broad, in the nature of argument, or vague.

At para. 38, she summarizes that:

[38] …the failure to admit the truth of a fact may be unreasonable within the meaning of [the rule] if:

(a) the truth of the fact is subsequently proved;

(b) the fact was relevant to a material issue …;

(d) the notice to admit was not otherwise improper;

(e) the notice to admit was reasonably capable of evaluation within the time required for response; and

(f) the refusing party had no reasonable grounds for believing that it would prevail on the matter.

Admissibility of Expert Opinion Evidence

The law governing admissibility of expert opinion evidence stems from the Supreme Court of Canada’s decision in R. v. Mohan, [1994] 2 S.C.R. 9, 1994 CanLII 80, subsequently clarified in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23 [White Burgess]. The party seeking to admit the evidence must satisfy each element in a two-stage inquiry:

a)At the threshold stage, the party seeking to admit the evidence must demonstrate that the evidence satisfies the Mohan That is, the evidence must be relevant, necessary, absent of an applicable exclusionary rule, and that the expert providing that evidence is properly qualified: White Burgessat para. 23.
b)At the second stage, the trial judge, exercising the gatekeeping role, must decide whether the benefits of admitting the evidence outweigh its potential risks: White Burgessat para. 24.

The element of a “properly qualified expert” under Mohan requires that the expert has acquired special or peculiar knowledge through study or experience in respect of the matters the expert undertakes to testify: McEwan v. Canadian Hockey League, 2022 BCSC 1104 at para. 186. The court must be satisfied that the person under consideration has expertise with respect to the opinions to be advanced, which is something distinct from just familiarity or involvement: Hughes v. Haberlin, 49 B.C.L.R. (3d) 366, 1997 CanLII 2186 at paras. 14 and 21 (S.C.).

In addition, as noted in R. v. Abbey, 2017 ONCA 640 at para. 48, a properly qualified expert includes the requirement that the expert be willing and able to fulfil the expert’s duty to the court to provide evidence that is:

a)impartial,
b)independent, and
c)

Expert witnesses must be impartial in the sense that their evidence must reflect an objective assessment of the questions presented to them. They must be independent in the sense that their evidence must be the product of their independent judgment, uninfluenced by the party who retained them or the outcome of the litigation. An expert’s lack of impartiality and/or independence is relevant not just to the weight to be given to the evidence under the second stage of the test, but also to its admissibility under the first stage of the test, to be addressed under the “qualified expert” element of the Mohan framework: McEwan at paras. 182–183.

Survey evidence may be admissible, assuming the survey responses are elicited by a relevant question, where the survey is both reliable, “in the sense that if the survey were repeated it would likely produce the same results”, and valid, “in the sense that the right questions have been put to the right pool of survey respondents in the right way, in the right circumstances to provide the information sought”: Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 at para. 94. Like all expert evidence, survey evidence must be prepared by a properly qualified expert: Tokai of Canada Ltd. v. Kingsford Product Company, LLC, 2021 FC 782 at para. 25.

Evidence tendered on an application for certification must meet the usual criteria for admissibility: Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2008 BCSC 1263 at para. 25; McEwan at paras. 29–32. The court exercises an important gatekeeping function in a proposed class proceeding and must not “shirk” its responsibility to consider the admissibility of evidence: McEwan at para. 31, citing Carter v. Ford Motor Company of Canada, 2021 ONSC 4137 at para. 9.

Criteria For a Marriage Like Relationship-2023

The court in Bellerose v Reda 2023 BCSC 748 reviewed the law re marriage like relationships and concluded in this case that one of the parties never intended to be in a marriage like relationship and made that clear to the other party throughout their relationship on many occasions.

The principles and approach to be applied when deciding whether two persons have been in a marriage-like relationship can be summarized as follows:

a) The burden is on the claimant to prove that they meet the definition of “spouse”. The standard is on a balance of probabilities (Voth v. Martin, 2019 BCSC 834 at para. 8, citing F.H. v. McDougall, 2008 SCC 53 at para. 49).

b) Section 3 of the Act imposes both a two-year continuous “cohabitation requirement”, and a marriage-like “relationship requirement”. The cohabitation requirement is approached flexibly and may be satisfied even if the parties may have lived for extended periods at different locations (Hu v. Lee, 2022 BCSC 56 at paras. 41–42; Thompson v. Floyd, 2001 BCCA 78 at paras. 22–36).

c) The determination of whether a relationship was marriage-like requires a holistic approach in which all of the relevant factors are considered and weighed, but none are treated as being determinative of the question (Austin v. Goerz, 2007 BCCA 586 at para. 62).

d) While a “checklist” approach should not be employed, it can be helpful to consider the presence or absence of commonly accepted indicators of the sorts of behaviour that society, at a given point in time, associates with a marital relationship (Weber v. Leclerc, 2015 BCCA 492 at para. 25).

e) Such indicators of a marriage-like relationship may include: (1) shared shelter; (2) sexual and personal behaviour; (3) services; (4) social activities; (5) economic support and children; and (6) societal perception of the couple (M. v. H., 1999 CanLII 686 (S.C.C), [1999] 2 S.C.R. 3 at para. 59; citing Molodowich v. Penttinen (1980), 1980 CanLII 1537 (O.N.S.C.) at para. 16 – these are sometimes referred to as the “Molodowich factors”).

f) Evidence of the subjective intentions of the parties is important to the determination of whether the relationship was marriage-like. However, this evidence must be tested against objective evidence of their lifestyle and interactions, which will provide direct guidance on the nature of the relationship (Dey v. Blackett, 2018 BCSC 244 at para. 195).

g) A person is either a “spouse” or is not. There is no middle ground. People may live together interdependently and yet fail to establish that they developed the kind of psychological and emotional union associated with marriage (C.F.M. v. G.L.M., 2018 BCSC 815 at para. 10).

h) A marriage-like relationship is akin to a marriage without the formality of a marriage. However, it must be borne in mind that people treat their marriages differently and have different conceptions of what marriage entails (Mother 1 v. Solus Trust Company, 2019 BCSC 200 at para. 143).

See also: Coad v. Lariviere, 2022 BCCA 222 at para. 127; and Jones v. Davidson, 2022 BCCA 31 at paras. 21–24.

They effectively confirm that there is no specific definition of whether marriage-like relationships exist. In particular, such relationships are not simply defined by financial dependence, sexual relationships, or the mingling of property and finances. In sum, their existence ought not to be determined through a formulaic “checklist” approach, but rather through a contextual and holistic examination of all of the relevant aspects of the parties’ relationship.

Testimonial Competence

Karrington v Morrisonn 2023 BCSC 570 dealt with the thorny issue of testimonial competence.

The court appointed a litigation guardian for the personal defendant and then ordered that an examination for discovery of the said demented persona take place as the threshold for testimonial competence is not high.

Under Rule 9-2(8) of the SCFR, a mentally incompetent person can only be examined with leave from the court. Rule 7-2(9) of the Civil Rules is identically worded. The court should grant leave only if the party seeking examination can establish that the proposed examinee can give sufficiently reliable evidence: DeMerchant v. Chow, 2010 BCSC 1447 [DeMerchant] at para. 44.

In considering whether the proposed examinee is able to give sufficiently reliable evidence, the elements of testimonial competence may provide useful guidance, namely, the proposed examinee’s capacity to observe, recollect and communicate. If the person satisfies the low threshold of testimonial competence, the court should grant leave for them to be examined, provided the person would not suffer psychological damage in the process.

The onus for showing that a mentally incompetent person should be examined rests on the party seeking examination: Penn v. Secord, [1980] 1 W.W.R. 464, 1979 CanLII 693 (B.C.S.C) at para. 7.

In DeMerchant, the Court frames the inquiry in terms of the reliability of the proposed examinee’s testimony: at paras. 44-47. If the court is satisfied that the person’s evidence would be unreliable, and that examining them would be futile, then leave should not be granted: at para. 44. Ultimately, in that case, the Court declines to grant leave to examine the proposed examinee due to medical evidence indicating that they have a tendency to fill in memory gaps by confabulating.

Courts outside of British Columbia have also considered whether a person under a disability should be examined for discovery. For example, in Abrahamson v. Buckland, [1990] 5 W.W.R. 193, 1990 CanLII 7809 (S.K.C.A.) [Abrahamson], at paras. 32–33, the Saskatchewan Court of Appeal set out a useful framework that has been cited by courts in Saskatchewan, Ontario and Alberta, including the Alberta Court of Appeal in Bilawchuk v. Wawryko, 2002 ABCA 178 at para. 67.

The relevant portions of the framework described in Abrahamson are as follows:

In deciding whether to grant leave, the court should consider whether the person’s evidence would be sufficiently reliable and whether examining them would be futile: DeMerchant at para. 35. In this regard, the court may consider whether the person is “legally fit and qualified to give evidence” (Abrahamson at para. 29) and whether they possess the capacity to observe, recollect and communicate evidence: Marquard at para. 12. If the proposed examinee can give sufficiently reliable evidence, and there is no concern that they would suffer psychological damage in the process, the court should grant leave for them to be examined.

The threshold for testimonial competence is not high. If the person is shown to have basic abilities to observe, recollect and communicate, along with an understanding of the nature of an oath, their evidence should be admitted: Marquard at para. 14.

The authorities indicate that a deficit in a person’s ability to observe, recollect or communicate is not necessarily a disqualifier to testimonial competence. That is because, after it has been determined that their evidence should be admissible, any deficiencies in their ability ought to go to weight: Marquard at para. 14.

Court Analysis of S. 58 WESA Application to Cure Defective “Will”

Henderson v Myler 2021 BCSC 1649 refused to invoke S. 58 WESA to “ cure” an unsigned note found with the deceased’s will that purported to alter the will’s bequests quite substantially, finding that the note did not reflect the deceased’s last true intentions re the disposition of her estate.

The case is of note as the court sets out it’s analysis of the various pros and cons of finding that the note varying the will was the last true intention of the deceased.
Of further note the court adopted the reasoning of the Supreme Court of Australia in a similar fact case.

As set out in Young at paras. 34–37, the further a document departs from the formal requirements of a will, the harder it may be to find that it embodies the deceased’s testamentary intention.

Later BC cases have held that, particularly when key requirements are absent, such as the deceased’s or witnesses’ signatures, compelling and reliable evidence is required to satisfy the court that the document represents the testamentary intention of the ‎deceased.

Accordingly,‎ extrinsic evidence of the testator’s intentions is relevant, even if such evidence concerns events before or after the creation of the document at issue: Hadley at para. 40 and Poulk Estate, 2018 BCSC 1321 at para. 43.

Other factors include whether the language in the document is precatory or connotes a sense of finality: Lane Estate, 2015 BCSC 2162 at para. 44; Mace Estate (Re), 2018 BCSC 1284 at para. 47.

The factors supporting that the Note represents Ms. Murray’s final intentions are:

1. it was left in Ms. Murray’s lockbox with her 2013 Will;
2. at least until Ms. Murray went into VGH, she kept a key to the lockbox around her neck;
3. all ten beneficiaries in the 2013 Will are also listed on the Note and, with one exception, where two of the names were reversed, the Note tracked the order of the names in the 2013 Will;
4. Mr. Basich was added. He was a close friend of Ms. Murrays, and she repeatedly told him that she had left him something in her will. When he asked her not to mention it again, she responded that it was “too late” as he was already in her will;
5. Ms. Myler’s specific intent at the meeting at the Café was to settle the different dollar amounts set out in the 2013 Will and the Note, and Ms. Murray agreed to discuss it with her. Although Ms. Myler and Ms. Crawford did not witness the Note, they gave some evidence which confirmed that some of its contents reflected Ms. Murray’s wishes;
6. for the most part, the changes Ms. Murray made to her will, as reflected in the Note, are rational and consistent. Given Ms. Murray’s friendship with Mr. Basich, her addition of a gift to him is understandable. The increased amounts are also proportionate to the increase in the approximate value of her assets.

The factors in this case that do not support a finding that the Note represents Ms. Murray’s final intentions are:

1. Ms. Murray did not sign the Note, and it was not witnessed. The Note lacks all of the hallmarks of formal validity;
2. the Note is not titled, and it does not contain formal language revoking the 2013 Will or expressing an intent to change it and no language to show that the Note was intended to have testamentary effect;
3. the Note is not written on formal paper, but on a page from a note pad, suggesting an impermanence or informality rather than a fixed and final intention;
4. there is no express revocation of Ms. Murray’s 2013 Will or expression of her intention to change or alter it;
5. Ms. Murray did not tell anyone about the Note and did not provide a copy of it to her executrices;
6. the Note is a mix of Ms. Murray’s handwriting and Ms. Myler’s handwriting ‎and notations. In some cases, the evidence is unclear as to who made what markings on the Note;
7. the Note did not reflect what Ms. Murray said in discussions with family members about the disposition of her estate;
8. some of the names written on the Note, and not crossed out, did not have a monetary gift assigned to them, suggesting they were not discussed at the May 4, 2017, meeting and that the Note was a work in progress;
9. the Note is a list of certain names with amounts, and in some cases with no amounts. Another note, containing similar information, was found in the kitchen by Ms. Crawford and thrown out. The existence of several notes, with similar writing, suggests an ongoing thought process rather than a final testamentary intent;
10. when Ms. Murray sought to change her 2010 Will, she wrote directly on the original of the Will. There was no writing on the 2013 Will; a signed copy of it remained in the lockbox;
11. the Note does not dispose of the entirety of Ms. Murray’s estate or specify what should happen to the residue of the estate.

In addition, the circumstances surrounding the Note do not suggest a fixed and final intention on Ms. Murray’s part. In 2010, Ms. Murray met with a lawyer to prepare the 2010 Will. In 2013, she met with a notary to prepare the 2013 Will. Ms. Murray brought the 2010 Will to Ms. Deprez to discuss it. She clearly knew she had to “go in” to make changes to her will.
Ms. Murray’s pattern of behaviour was to see a legal professional in order to change a will. Ms. Murray understood the formal process of attending at a professional’s office and going through the process of instructing the professional and formally executing a valid will. With respect to the 2013 Will, at their meeting on January 10, 2017, Ms. Murray told Ms. Deprez that she wished to change her will and she brought her 2013 Will to the meeting. She told Brian that she needed to change her will, and Tim made the appointment for Ms. Deprez to come and see her in February 2017.

Ms. Myler and Ms. Crawford did not ask Ms. Murray to sign the Note they discussed at the Café, and there was no evidence that it was impressed on Ms. Murray that the Note would stand as her last will and testament. There is no evidence that at their meeting at the Café, Ms. Murray considered that the Note she discussed with her friends was a formal document that would govern how her estate was disposed of upon her death
Ms. Myler and Ms. Crawford did not discuss with Ms. Murray what was to happen to the residue, or what was left, of Ms. Murray’s estate after payment of the gifts to her extended family and her friend. In fact, Ms. Crawford testified that after the discussions at the Café, the three friends discussed the need to see a lawyer to finish what was left. Such a meeting was not possible in May 2017, but was planned for Ms. Myler and Ms. Crawford’s fall visit
There is no evidence that Ms. Murray turned her mind to how the Note ‎would affect the disposition of the residue of her estate. It would pass on intestacy to ‎three persons who were expressly excluded from the Note. Daniel and Ron were crossed off in the Note, and Brian was not named at all (nor had he been in the 2010 or 2013 Wills). Ms. Murray also made it clear to Ms. Myler that $100,000 was a sufficient gift to Verna

It cannot have been Ms. Murray’s fixed and final testamentary intention to allow 3/4 of the residue of her estate, approximately $982,500, to pass to her three nephews, when she made it clear she did not wish to leave them anything. Nor can it have been Ms. Murray’s fixed and final testamentary intention that over $300,000 would go to Verna, when she had said $100,000 was enough. The failure to deal with the residue in the Note, in addition to the other factors I have outlined, weighs against accepting the Note as a codicil to Ms. Murray’s 2013 Will or as a new testamentary document. Curing the Note under s. 58 would provide each of Dan, Ron, and Brian with the largest gifts out of her estate, which was not Ms. Murray’s testamentary intention
I cannot speculate as to what Ms. Murray would have done with the residue of her estate if she had gone through the formal process of executing a new will in 2017. Perhaps, it would have been shared equally among all of those who benefitted under the 2013 Will which was what Ms. Myler said in her deposition that she thought would happen. Perhaps, based on advice, she would have made a different arrangement entirely

Although the plaintiffs make much of the fact that the size of the gift to the BC SPCA in the 2013 Will was unusual and inconsistent with the average testamentary gift to the charity, it is not determinative in the analysis. Ms. Murray had no immediate family. It is entirely possible that she chose to benefit a charity that reflected her love of animals as opposed to extended family members. The question is what Ms. Murray subjectively intended, not what an average person would choose to do with their estate.

The plaintiffs also suggest that the timing of the Note supports the inference that Ms. Murray intended it to be a final alteration. Their submission is based on the assumption that the Note was prepared when Ms. Murray was 99, suffering from health issues, and understood that she was nearing the end of her life. As I have said, there is no evidence of when Ms. Murray prepared the Note. The evidence suggests that she did not anticipate a rapid decline in her health around the time of her 99th birthday, since Ms. Myler and Ms. Crawford’s evidence is that they intended to carry on the work of revising and completing Ms. Murray’s will when they return in the fall. I cannot draw the inference the plaintiff suggests.

A document like the Note was analysed in Re Lynch, [2016] VSC 758, a decision of the Supreme Court of Victoria in Australia. The legal principles developed under s. 9 of the applicable Wills Act in that case are similar to those under s. 58 of WESA.

At issue in Lynch were two documents prepared eight years before the deceased’s passing: a handwritten page appointing an executor that was signed and witnessed, and a handwritten, undated, unsigned, and unwitnessed list of names with dollar amounts next to them, written in both blue and black ink. Both documents were created in the hospital before Mr. Lynch underwent surgery, and he was worried that he did not have a will. He did not plan to see a lawyer and said he could do his will “right then and there”. The document was created in front of three witnesses in black ink by the deceased with edits later made in blue ink after discussions at the hospital. Following the page with the beneficiaries and dollar amounts, which remained unsigned and unwitnessed, the page naming the executor was created which was signed and witnessed. One of the witnesses took the documents and placed them in his filing cabinet at home: paras. 41, 43, 45, 48, 55, and 63.

The court in Lynch reviewed cases from that jurisdiction and said that, in determining whether the deceased intended the document to be a will, the court must be satisfied that the deceased demonstrated an intention that, without any alteration or reservation, the document should have effect as his will. The person must have “intended the document to be a legally operative act that disposes of the person’s property upon his or her death, rather than a provisional, preliminary, or tentative proposal.” The court relied on a similar principle to that explained in Young and in Hadley, in the context of s. 58 of WESA, that the further away from formal compliance a document is, the more difficult it will be for the court to be satisfied that the deceased intended the document to be his will: at paras. 11, 15–22.

The court concluded that the second document could not have been intended to have the effect of a will. There was no strong nexus between the list of names and the signed executor page.

The list of names had no heading and was not signed, dated, or witnessed. The court said it bore the “hallmarks of a provisional, preliminary or tentative thought process, rather than a legally operative act that disposes of the deceased’s assets upon his death.” It was relevant that the specific gifts did not add up to the deceased’s entire estate, which brought into question whether the deceased intended to dispose of his estate by way of the list: at paras. 76–78, 87.

There was evidence in Lynch of conversations about seeing a lawyer after the list was created. The discussion was to have the documents reviewed, “if not revised” by a solicitor and that Mr. Lynch should take the documents to a lawyer.

In this case, the Note disposes of $540,000 in specific gifts to Ms. Murray’s extended family and friends, leaving $1,310,000 in the residue (based on a distributable amount of $1.85 million).

A failure to deal with an amount of that size weighs against the Note representing Ms. Murray’s fixed and final intentions. Also, as I have said, Ms. Murray, Ms. Myler, and Ms. Crawford discussed how it would be difficult to see a lawyer during Ms. Myler and Ms. Crawford’s May 2017 visit, and they planned to see one in the fall.

Donative Intent and Gifts

Hsu v Hsu 2023 BCSC 683 discussed the law relating to donative intent in determining if a transfer of land for no consideration was a gift or a resulting trust.

The court found that it was an inter vivos gift.

In order for there to be an inter vivos gift, the donor must have intended to make a gift. The intention of the donor at the time of the transfer is the governing consideration: McKendry v. McKendry, 2017 BCCA 48 at para. 31. And see Bakken Estate v. Bakken, 2014 BCSC 1540 at paras. 74-75.

Where a transfer of land is gratuitous, the presumption of resulting trust may displace the presumption of indefeasible title, see Fuller v. Harper, 2010 BCCA 421 at para. 43. The operation of that doctrine is described by Justice Smith, for the Court:

[44] Pecore is the leading decision on the application of the presumption of resulting trust in circumstances of a gratuitous transfer. The presumption is “a legal assumption that a court will make if insufficient evidence is adduced to displace the presumption” (Pecore at para. 22). It arises when “title to property is in one party’s name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner: Waters’ Law of Trusts in Canada (3d ed. 2005), at p. 362” (Pecore at para. 20).

[45] Mr. Justice Rothstein, writing for the Court, explained how the burden of proof is affected by the presumption of resulting trust:

[24] [W]here a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: see Waters’ Law of Trusts, at p. 375, and E.E. Gillese and M. Milczynski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.

Therefore, the onus is on the transferee to lead evidence of “the transferor’s contrary intention on the balance of probabilities” in order to rebut the presumption (Pecore at para. 43).

[46]
Rothstein J. also explained the methodology to be employed when the presumption of resulting trust is engaged:
[44]
… The trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention. …
…
[55] Where a gratuitous transfer is being challenged, the trial judge must begin his or her inquiry by determining the proper presumption to apply and then weigh all the evidence relating to the actual intention of the transferor to determine whether the presumption has been rebutted….

[47] The effect of the presumption only becomes evident after all the evidence, both direct and circumstantial, on the surrounding circumstances in which the transfer was made, has been weighed. Only if the trial judge is unable to reach a conclusion about the transferor’s actual intention at the time of the transfer, will the presumption be applied to tip the scales in favour of the transferor or his estate: Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 3d ed. (Markham, ON: LexisNexis Canada, 2009) at page 159, § 4.60.
In Pecore v. Pecore, 2007 SCC 17 at paras. 45-47, Justice Rothstein noted that the relevant time with respect to the question of the donor’s intent is at the time of the transfer. Evidence of subsequent conduct is admissible provided that it goes to the issue of the donative intent at the time of transfer.

Neither the registration nor the deed of gift is dispositive of the issue as discussed in Kalanj v. Kalanj Estate, 2022 BCSC 427:

[44] The defendants rely on s. 23(2) of the Land Title Act, R.S.B.C. 1996, c.250 [LTA] which provides that an uncancelled indefeasible title is “conclusive evidence at law and in equity, as against the Crown and all other persons, that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple to the land described in the indefeasible title”, absent certain exceptions which have no application here.

[45] Justice Savage (then of this Court) in Fleming v. Kwakseestahla, 2010 BCSC 1006 at para. 22 [Fleming], considered whether s. 23(2) of the LTA negates the presumption of a resulting trust in BC when applied to land. Justice Savage determined that the operation of s. 23(2) of the LTA does not oust the operation of other principles of law and equity, outside circumstances involving the acquisition of title by a bona fide purchaser for value: Fleming at para. 24. Ultimately, Savage J. concluded that, despite the provisions of the LTA, where there is a transfer without consideration, there is a presumption of a resulting trust: Fleming at para. 26.

[46] Similarly, Groves J. noted in Modonese at para. 139, that Fuller (at para. 43) appears to support the view that the presumption of a resulting trust could be applied to a gratuitous transfer of real property. He found that, because the transfer of the deceased’s property into joint tenancy was gratuitous, the presumption of resulting trust discharged the statutory presumption: Modonese at para. 142. These authorities support the conclusion that the statutory presumption in the LTA does not displace the equitable presumption of a resulting trust, as does Suen v. Suen, 2013 BCCA 313 at para. 34.
…

Removal of an Executor 2023

Re De Bonis 2023 BCSC 713 removed a brother and sister who were jointly appointed co-executors of their parent’s estate, by reason of their inability to work together and their toxic relationship and appointed a corporate trustee in their place.

Removal of Executor

There are three sources of authority that the Court can draw on to remove an executor or trustee and appoint a replacement:

-the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 [WESA],
-the Trustee Act, R.S.B.C. 1996, c. 464,
and the Court’s inherent authority: Morelli v. Morelli, 2014 BCSC 106 at para. 29.

Section 158 of WESA, govern an application to remove or pass over a personal representation and replace them. The relevant portions of s. 158 include:

(3) Subject to the terms of a will, if any, and to subsection (3.1), the court, by order, may remove or pass over a person otherwise entitled to be or to become a personal representative if the court considers that the personal representative or person entitled to become the personal representative should not continue in office or be granted probate or administration, including, without limitation, if the personal representative or person entitled to become the personal representative, as the case may be, …

(f) is
(i) unable to make the decisions necessary to discharge the office of personal representative,
(ii) not responsive, or
(iii) otherwise unwilling or unable to or unreasonably refuses to carry out the duties of a personal representative,
to an extent that the conduct of the personal representative hampers the efficient administration of the estate, or …

Section 159 of WESA provides the Court with the statutory authority to appoint an executor in circumstances where the Court has discharged or removed an executor.

Sections 30 and 31 of the Trustee Act, provides the statutory authority for the Court to remove an individual as trustee of an estate and appoint a replacement. In the application of both WESA and the Trustee Act, the same considerations apply, as provided below.

The Court’s discretion to remove an executor should be guided by the principles listed in Parker v. Thompson (Trustee), 2014 BCSC 1916 at para. 37. The will-maker has the right to choose their executor, and as such their decision is entitled to deference and will only be interfered with if there is clear and cogent evidence to do so. The executor’s acts or omissions must be of such a nature as to endanger the administration of the estate.

The Court’s main consideration is the welfare of the beneficiaries: Parker at para. 37; Burke v. Burke, 2019 BCSC 383 at para. 29. It is not the interests of a particular beneficiary that are to be considered, but rather the benefit of the beneficiaries collectively: Conroy v. Stokes, [1952] 4 D.L.R. 124 at p. 128, 1952 CanLII 227 (B.C.C.A.).

The analysis is contextual and each case will turn on its facts: Burke at para. 43.
In Conroy, the Court of Appeal described the four categories of misconduct by an executor that can warrant their removal:
a) Endangerment of trust property;
b) Want of honesty;
c) Want of proper capacity to execute duties; and
d) Want of reasonable fidelity.
The existence of friction between the executor and one or more beneficiaries is generally, in and of itself, not sufficient to warrant the removal of the executor: Letterstedt v. Broers, (1984), 9 App. Cas. 371 at 389 (South Africa P.C.). However, animosity between those parties, or co-executors, can be relevant to whether it hampers the proper administration of the estate: Dunsdon v. Dunsdon, 2012 BCSC 1274 at para. 202; Levi-Bandel v. McKeen, 2011 BCSC 247 at paras. 21–25. In such circumstances, a finding of wrongdoing is not necessary: Dunsdon at para. 202; Weisstock v. Weisstock, 2019 BCSC 517 at para 44.
In Radford v. Radford Estate (2008), 43 E.T.R. (3d) 74, 2008 CanLII 45548 (O.N.S.C.), Justice Quinn comments that removal is not intended to punish past conduct:
Removal not intended to punish past misconduct
[106] “The authorities are, I believe, consistent in placing the emphasis on the future administration of the estate, and the risks to which it will be exposed if the trustee remains in office. The question is whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries. The sanction of removal is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 28.
[107] But, “past misconduct that is likely to continue will often be sufficient to justify removal …”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 29.
[Emphasis added.]

Conflict of Interest

An executor’s conflict of interest may warrant removal. In Hall v. Hall (1983), 45 B.C.L.R. 154, 1983 CanLII 396 (S.C.), Justice Proudfoot held that conflict of interest and a conflict of duty demonstrate want of fidelity: see also Pangalia Estate, 2021 BCSC 1070 at para. 22. Further, in Morelli at para. 30, Justice Harvey held that the “welfare of the beneficiaries of an estate may be endangered if there is a conflict of interest”. However, not all perceived or actual conflicts of interest will give rise to the removal of an executor: Burke at para. 43.
In Ching Estate (Re), 2016 BCSC 1111, an executor was passed over due to perceived unequal treatment and conflict of interest, with Justice Affleck holding that the “perception of a disabling conflict of interest is overwhelming”: at para. 20. The Court held that a “perceived” conflict of interest may lead to removal:

[22] The authorities indicate that even a “perceived” conflict of interest between an executor’s personal interests and her obligation to administer the trusts in the will in the interests of the beneficiaries may cause this court to intervene to appoint a new executor or an administrator to avoid even the appearance of conflict.