The Meaning of “All Remaining Cash” In a Will

Jones v BC Public Trustee (1982) 5 WWR 543, dealt with the interpretation of the words ” all remaining cash after expenses” in the deceased’s will.

The deceased left a home made will, where after several specific bequests, he provided that ” all remaining cash after expenses” was to be evenly divided between 3 named beneficiaries.

The administrator applied to the court for an interpretation of the said words “all remaining cash after expenses”

The Court noted that the testator did not have much cash and determined that the clause was a residuary disposition so that all property was to be sold, the debts paid and the balance divided.

The Court stated:

The Meaning of “All Remaining Cash”

5        The answer to the first question turns on the meaning in the context of this will of the phrase “all remaining cash after expenses” — does “cash” in this context mean only actual currency and coinage, does it mean currency, coinage and gold bars, or does it mean all that remains of the testator’s estate after all (valid) specific bequests have been made?

6        Perrin v. Morgan, [1943] A.C. 399, [1943] 1 All E.R. 187 (H.L.), probably the leading modern authority on the construction of wills, was concerned with the meaning of the word “moneys” in the phrase “all moneys of which I die possessed shall be shared by my nieces and nephews now living”. The majority in the House of Lords adopted a meamng for the word suited to its particular context, rejecting earlier authorities favouring universal application of a restricted legal meaning. The phrase was held to pass the whole personal estate.

“Cash” in the present case may bear any meaning which that word is capable of bearing in ordinary usage, the context of the will as a whole being the key to the meaning which should be applied to it in this case. 1 would note, however, that the word has been held to include moneys on deposit in a bank in Re Richardson (1930), 39 O.W.N. 208 (H.C.), and to encompass a bequest to the testator in Re Parker; Hoover v. Hoover, [1950] 2 W.W.R. 1026 (Alta. T.D.).

8        In the context of the present will, I have come to the conclusion that the meaning of the clause in question is that all property not specifically bequeathed is to be sold, that debts and estate costs are to be paid out of the money so derived, and that the balance remaining of that money should be divided among the three named beneficiaries. I say that because it does not appear that the deceased had, or expected to have, a significant amount of ordinary paper and coin currency, and the clause can most logically be explained by assuming that he believed that he would have personal property other than that specifically disposed of, and that he intended that it be converted into a cash fund from which his debts and funeral and other expenses could be paid, leaving thereafter some “cash” balance.

Unsigned Copy of Lost Will Admitted Into Probate

Is an unsigned copy of a lost will admittable?

The law is clear: If the original will is last known to be in the will maker’s possession and cannot be found after death after an extensive search,  then the law presumes that the testator destroyed the will in order to revoke the will. This presumption can be rebutted by written or oral evidence. The Courts have held that it is a heavy burden to rebut and that in this case, the attackers failed to prove she revoked the will due to her dementia, and admitted her unsigned will into probate.

In Polischuk Estate v Perry 2014 BCSC 1089, the petitioner sought a declaration that the deceased’s last will had been lost and that an order granting probate of an unsigned copy of the will should be admitted to probate.

A lawyer testified that ” based on my 30 years of acting as her legal representative, I firmly believe that if Nettie ( the deceased) was of sound mind, she would never revoke her will by destroying it”.

No one was ever told that she had  destroyed it or intended to do so. The deceased suffered from dementia for some years before her death.

An extensive search failed to find the original will that was last in the possession of the deceased, but an unsigned copy of the will was found that reflected the instructions given to the will drafter.

The Court concluded that it had no difficulty determining that the deceased did in fact sign the original will in question, that she was the last person to have possession of it, that it should have ben in her safety deposit box, but for some reason, perhaps her dementia, it was not.

The Court then examined the burden of proof required to rebut the presumption that the deceased revoked the original will, found that those attacking the unsigned copy of the will being admitted into probate did not prove on the balance of probabilities that the will was revoked while the deceased was alive a sound mind.

The law

[60]     The law is clear: if a will is last known to be in the testator’s possession and cannot be found, the law presumes the testator destroyed the will in order to revoke the will. However, the presumption can be rebutted by written or oral evidence.

[61]     In Haider v. Kalugin, 2008 BCSC 930 at paras. 9-13 Wilson J. helpfully summarized the law applicable to this issue:

  1. The applicable law is not in dispute. When an original will has been lost, mislaid or destroyed or is not available, an application may be made for an order admitting the will to probate by a copy, a completed draft, a reconstruction or evidence of its content: British Columbia Probate and Estate Administration Manual, 2nd edition, 2007, s.5.61.
  2. If a Will last known to be in custody of testator is not found at his death, the presumption is that the testator destroyed it with the intention of revoking it (“animo revocandi”). However, that presumption may be rebutted by evidence, written or oral, of the facts. The strength of the presumption will depend upon the character of the custody which the testator had over the Will: Sugden v. Lord St. Leonards (1876), 1 P.D. 154 (Eng. C.A.).

10.       In Sigurdson v. Sigurdson, [1935] 2 D.L.R. 445 (Man. C.A.), at paragraph 49, Davis J.
said:

[49]      It needs very clear and convincing evidence to establish what is alleged to be a lost will… .The person propounding such a will has a burden of proof that persists throughout the whole trial to satisfy the court at its conclusion that the will is in fact lost and was not destroyed by the testator with the intention of putting an end to it. Each case of course turns upon its own facts but the principles respecting the well-settled presumption against the Will must be applied to the facts.

11.       In Welch v. Phillips (1836), 1 Moo. P.C. 299 (England P.C.), at 302 , referred to in
Bohersky, Re, [1954] A.J. No. 12 (Alta. Dist. Ct.), at paragraph 6, the court said:

[6]       If a will traced to the possession of the deceased, and last seen there, is not forthcoming on his death, it is presumed to have been destroyed by the deceased himself; and that presumption must have effect, unless there is good and sufficient reason to repel it. It is a presumption founded on good sense, for it is highly reasonable to suppose that an instrument of so much importance would be carefully preserved, by a person of ordinary caution, in some place of safety and would not be either lost or stolen, and if, on the death of a maker, is not found in his usual repositories or else where he resides, it is in a high degree of probable that the deceased himself has purposely destroyed it. But this presumption, like all others of fact, may be rebutted by others, which raises a higher degree of probability to the contrary.

12.       As stated by MacKeigan, C.J.N.S. in MacBurnie v. Patriquin, [1975] N.S.J. No. 447
(N.S. C.A.), at paragraph 10:

[10] I should emphasize that the burden on the person who is trying to rebut the presumption is a very heavy burden.

13.       Some of the factors considered in determining whether the presumption has been
overcome are:

  • whether the terms of the Will itself were reasonable: Lefebvre v. Major, [1930] S.C.R. 252 (S.C.C.) [hereinafter Pigeon];
  • whether the testator continued to have good relationships with the beneficiaries in the copy of the Will up to the date of death: Pigeon, supra;
  • where personal effects of the deceased were destroyed prior to the search for the Will being carried out: Pigeon, supra;
  • the nature and character of the deceased in taking care of personal effects: Pigeon, supra
  • whether there were any dispositions of property that support or contradict the terms of the copy sought to be probated: MacBurnie v. Patriquin, supra; Andersson v. Khan Estate, [2006] B.CJ. No. 716 (B.C. S.C.);
  • statements made by the testator which confirm or contradict the terms of distribution set out in the will: Bohersky Estate, supra, Andersson, supra, Hoist Estate v. Hoist, [2001] B.CJ. No. 1560 (B.C. S.C.), Green Estate, Re, [2001] A.J. No. 1253 (Alta. Q.B.);
  • whether the testator was of the character to store valuable papers, and whether the testator had a safe place to store the papers: Bohersky Estate, supra, Brimicombe v. Brimicombe Estate, [2000] N.S.J. No. 157 (N.S. C.A.);
  • whether there is evidence that the testator understood the consequences of not having a Will, and the effects of intestacy: Bobersky Estate, supra;
  • whether the testator made statements to the effect that he had a will: Bobersky Estate, supra

[62]     A different situation arises when a testator becomes mentally incapable/unstable after executing the will.

[63]     In this case, the evidence shows that Nettie was mentally stable on August 31,2004, but as of February 9,2010, she was declared to be mentally unable to manage her financial and legal affairs due to Alzheimer’s disease. We do not know at what exact point between these two dates Nettie became unable to manage her affairs due to her cognitive impairment.

[64]     InReBroome, [1961] MJ. No. 51 (C.A.), 29 D.L.R. (2d) 631 atp.633 [ReBroome], Freedman, J.A. said:

It seems to me that fundamentally this case turns on the question of onus of proof. No one saw the testator destroy his will. In fact it may never have been destroyed. It has simply not been found after very extensive searches therefor. In such circumstances – leaving aside for the moment the question of insanity – there is a prima facie presumption that the testator destroyed the will animo revocandi. Such presumption, however, may be rebutted by evidence, which, however, must be clear and satisfactory: 34 Hals. 2   ed., p. 87. The intervention of insanity after execution of the will however, creates a different situation. That an insane person lacks the legal capacity to revoke his will is unquestionable. If Reuben Broome destroyed his will while insane such destruction would not constitute revocation of the will. On that both counsel agree. But since there is no evidence as to when he destroyed his will – assuming he did so -there is a sharp divergence between counsel as to what presumptions apply and to who must bear the burden of proof.

[Emphasis added.]

[65]     And continuing at p. 634, Freedman, J.A said :

The rule places on the party alleging revocation the burden of showing that the destruction occurred while the testator was of sound mind.

[66]    The preceding law establishes that the burden of proof is, in most circumstances, on the party asserting that the will was in fact lost and not destroyed. Re Broome, however, notes that the burden of proof shifts in the circumstance where a person becomes mentally incapable/unstable. When that situation arises, the evidentiary burden shifts to the party alleging that the testator destroyed the will to prove that the destruction occurred while the testator had capacity.

[67]     Since hearing submissions on this application, I have been directed to Yarmie Estate (Re), 2008 SKQB 74 [Yarmie]. In that case, the applicant grandson of the deceased applied to prove that an unsigned copy of the will was his grandmother’s last will and testament. No executed original was ever located, and the executed will was last in the deceased’s possession. The presumption that the deceased destroyed the will applied. As no evidence before the Court rebutted that presumption, the Court refused to admit the will to probate.

[68]     The difference between the facts in Yarmie and the facts in the case before me is that after executing the 2004 will, Nettie became unable to manage her own financial and legal affairs. That fact shifted the burden of proof to the nephews to prove on a balance of probabilities that the will was destroyed and revoked when Nettie was of sound mind.

[69]     In this case, the nephews cannot discharge that burden.

[70]     The nephews cannot prove when Nettie became mentally unstable. All they can say is that she would have crossed the line between being mentally sound and being unable to manage her affairs at some point after August 31, 2004 and before February 8, 2010. Some evidence, albeit somewhat questionable from statements by Nettie to Jessie Kooner before the February 8, 2010 declaration, demonstrates that she suffered from Alzheimer’s disease for approximately two years. Moreover, absolutely no evidence demonstrates that Nettie destroyed the 2004 Will – intentionally or otherwise. Based on her mental state at the time, she simply could have lost the 2004 Will.

[71]     In this case, while the evidentiary burden shifted to the nephews, in any event, the petitioner could still discharge his burden to demonstrate that Nettie did not intend to revoke the 2004 Will.

[72]     Referring to the factors Heider lists at para. 13, the following evidence is relevant to demonstrate that Nettie did not intend to revoke her 2004 Will:

a)          The 2004 Will’s terms were reasonable. In that will, she maintained her wishes to make charitable donations to organizations she considered worthy of bequests and that the bulk of her estate was to go to her sister Mary. Nettie began to reside with Mary in 2009, and Mary had been the major beneficiary in previous wills, and Nettie was always close with her. Nettie also provided for her close friends, Joanne Grunerud and Norah Smith, who she considered to be “like family” and for her long-term lawyer in lieu of charging fees in administering her estate. These bequests are also consistent with her previous will’s bequests, except for eliminating shares in her estate to her nephews and nieces. Regarding the latter, evidence demonstrates that Nettie experienced a “falling out” with her twin brother’s children. In fact, she expressed this sentiment to Steven Wong and Ms. Grunerud, and I find such evidence to be a credible explanation for Nettie excluding her nephews and nieces. In making such a finding I appreciate the nephews have deposed to not being aware of any “falling out”, but the likelihood of such a situation is reasonable.

b)         Nettie did not place the 2004 Will in any of the safety deposit boxes to which she had access. No evidence explains why she did not place the 2004 Will in a safety deposit box as she had.

Ten Reasons Estates End Up In Court

"Mom Always Loved You Best" Bumper Sticker

The Top 10 Reasons Estates End Up In Court

After 42 years of Vancouver estate litigation, I have noted that the top ten most common, but certainly not the only claims, are the following, in no particular order:

Mental Capacity, Undue Influence, Wills Improperly prepared or signed, Wills Variation claims, Intestacy Issues, Gifts vs Resulting trust claims, joint bank and investment accounts, unjust enrichment and constructive trust claims, breach of fiduciary duty and lawyer’s negligence.

1. MENTAL CAPACITY

Legal test for capacity Banks v. Goodfellow 1870

The WIll maker must understand that a will is being made and that it disposes property on death; must know the nature and extent of his property; must understand who has an appropriate claim upon his property; must be free of delusions that affect his decisions, ie, be of sound mind, memory and understanding; Lager v. Poirier SCC

“the mind must be able to comprehend of its own initiative and volition” at the time that instructions to the lawyer are given;

However: a will was recently upheld where the testator thought he was being poisoned by gases into his apartment, as he knew what he owned and what he wanted to do with his estate, and who he had to provide for;

Problems encountered: – no standard method of assessing capacity – variety of testing and types of causes of dementia – problems testing due to language, customs, hearing or sight losses – medical history/records important – Dementia not well recognized even by doctors/health professionals or professionals – people good at covering up, or having things done for them – most people, including health care, underestimate degree of cognitive impairment – well settled that a proper assessment cannot be done from superficial discussions – must be “probing of the mind” – typical indications – short term memory loss, paranoid ideas to family, confusion, difficulty with self care/finances – disorientation to time/person/place, problems recognizing, easily swayed in opinion

2. UNDUE INFLUENCE

This is an influence that is exerted over the mind of another that amounts to coercion of the other’s free will so as to control the other’s mind, ie, an extreme example is a cult leader.

– demented people are very vulnerable to mental pressure – hard to prove, look for “suspicious circumstances” – a recent article listed 64 examples of such “suspicious circumstances” – the propounder of a will has to prove proper execution of the will, knowledge and approval of its contents, and mental capacity where there are circumstances that are suspicious, rather than it being presumed that the testator knew and approved of the contents of the will – individuals are frequently taken advantage of by care-givers, family, acquaintances, salespeople or power of attorney holders – where there is a special relationship such as a doctor/patient, lawyer/client, care-giver, parent, child, etc., the B.C. Court of Appeal did in May 1998 rule that there is then a presumption of undue influence that shifts the burden to the defendant to disprove it.

3. WILLS ISSUES

Requirements of a valid will:

must be in writing must be signed at the end by the testator, and witnessed by 2 or more individuals, all 3 signing in the presence of each of other must purport to deal with the property of the testator

Common mistakes: beneficiaries or spouses of beneficiaries cannot witness the will or the bequest is invalid – marriage after the will is executed will revoke the will – the witnessing procedures are frequently not properly carried out – a failure to dispose of the estate or part of the estate – using incorrect/vague/contradictory language – using precise words such as “issue” or words such as “per stirpes” which have been interpreted by the Courts to have different meanings

4. WILLS VARIATION ACT

Under British Columbia law spouses and children of a deceased have the right to contest an estate on the basis that the deceased parent or spouse failed to “make adequate provision for their proper maintenance and support”.

In the near future a Court challenge will be made to the Wills Variation Act by a common-law spouse, who currently does not have the right to bring such an action.

There has been a hugh increase in the number of these claims, especially by adult children who have been disinherited.

Applies to any assets owned by the deceased that pass under a valid will and form part of the deceased’s estate – it does not apply to property that passes by right of survivorship such as a joint tenancy, insurance, or pensions where there are named beneficiaries and so forth.

The Court has a wide discretion to vary a will in any manner that it thinks just.

The Court may also take into account evidence of the testator’s reasons for not making adequate provision for the spouse or child that is contained in a statement in writing signed by the testator.

The action must be brought within 6 months from the date of the granting of Letters Probate.

The test with respect to a testator and his adult children is that of the “judicious parent”, and a parent has a moral obligation to provide for his or her children. If the children have estranged themselves, then the testator may not have to provide for the children. The test is that of the judicious parent or spouse, not necessarily a kindly one, as to what he or she should have to provide in order to discharge the marital or parental duty, having regard to both economic and moral considerations.

In a Supreme Court of Canada land mark decision Tataryn v. Tataryn 1994, a wife of 43 years was not adequately provided for in the deceased’s will. One son was provided for generously and another son was disinherited.

The Court found that it should search for “contemporary justice”. It held that a testator has a legal obligation to provide for his or her spouse, and only a moral obligation to provide for adult children. Legal obligations take priority over moral obligations. If there are sufficient assets, then both legal and moral obligations should be met.

The Courts acknowledge that a testator should be free to dispose of his or her assets as he or she sees fit, but the Court will interfere to vary a will where it is appropriate.

In Tataryn the Court held that as a minimum, the widow should get what she would have received had the parties separated, as well as some extra monies in the form of maintenance for her twilight years.

5. INTESTACY ISSUES

See my recent blog on WESA and Intestacy as the rules have recently changed,

They are dated March 7.14, March 9 and 10, 2014

Separation of spouses for one year prior to death disqualifies the surviving spouse from taking deceased’s spouse estate on an intestacy.

 

6. GIFTS vs.RESULTING TRUSTS

This area of the law usually deals with a purported gift of an asset by one individual to another.

Resulting trusts arise in 3 instances:

where the individual gratuitously transfers the assets; where the individual supplies all or substantially all of the purchase price; where the individual puts his/her property into another’s name and the other person gave no consideration (ie, paid no monies);

The lack of consideration is the common element – the individual must therefore have intended the recipient to hold the asset in trust and that at some point it will go back to the transferor, as the law of equity assumes bargains not gifts. This presumption can be rebutted on a balance of probabilities but the onus rests on the volunteer to show that it was a gift. If the transferor and the transferee have a close relationship at the time of the transfer, the presumption is weakened and slight evidence will be required to rebut it. The evidence will be confined in time to the date of the transfer and may be written, verbal or circumstantial.

A resulting trust will not be presumed if the transfer was to a wife or child, then the onus will remain on the person who asserts the trust or was from a common-law husband to a common-law wife, or was from a father to a child (and presumably will include mother to child) or was from a step-parent to a step-child.

7. JOINT BANK ACCOUNTS

Generally when an account is opened in the name of 2 or more persons, if the holders are joint tenants, then the survivor has the right to the whole amount. However, in equity the beneficial title is the issue:

who has the right to the income and capital while both joint tenants are alive; is there a right of survivorship;

Typically when both joint tenants have deposited monies into account, then the survivor is entitled to the proportionate deposits. Where only one of the joint tenants deposits money into the account, then a presumption of resulting trusts arise.

There are a number of decisions that have held that the bank document giving right to the purported right of survivorship is merely for a matter of convenience and it is always a question of intention, that must be proved by evidence. The Supreme Court of Canada has held that the bank form giving rise to the purported right of survivorship does not necessarily evidence a depositor’s intention to make a gift of the account.

8. CONSTRUCTIVE TRUST (UNJUST ENRICHMENT)

This also is a very big growth area in estate law. The situation typically applies to common-law spouses, same sex spouses, or any one who has been in a “relationship” with another and there has been:

an enrichment enjoyed by one party; a corresponding deprivation suffered by the other party; an absence of any juristic reason for the deprivation/enrichment;

There have been a number of Supreme Court of Canada decisions such as Peter v. Beblow that have extended the claim for unjust enrichment to include contributions of homemaking and child care services, rather than the traditional test of financial contribution. The Supreme Court of Canada recently in Soulos held that the test for constructive trust is now “good conscience.”

This law has in recent years been applied to same sex relationships.

Constructive trust claims have been and will continue to be more prevalent.

Constructive trusts may also arise in other circumstances than common-law or same sex relationships, such as mutual wills. A constructive trust may be imposed on the survivor of the parties if it can be shown that there was an agreement between the parties not to revoke their wills and to dispose of their property in a particular way if the survivor has broken the agreement and has made another will.

9. BREACH OF FIDUCIARY DUTY

A fiduciary relationship is one in which there is a duty to one person, the fiduciary, to act on behalf of another person with respect to property which is the subject of the relationship. Where there is a fiduciary relationship, then the fiduciary must act honestly, impartially and cannot personally benefit other than for prescribed fees for services. The fiduciary is bound to protect the interests of the beneficiary, and cannot act in a conflict of interest, nor personally benefit. Fiduciaries are typically lawyers, bankers, directors, or any other person in a high position of trust.

A person using a power of attorney cannot use that document to personally benefit him or herself, or this will be a breach of fiduciary duty.

There is an onus on the fiduciary to prove that he or she acted properly when called into question.

10. LAWYER’S NEGLIGENCE

A lawyer is under a duty of care to carefully consider a client’s mental capacity and the thoroughness required is proportionate to the gravity of the transaction:

A lawyer owes a duty to his client to draft a will in accordance with the instructions, and to provide all required advice and attend to the execution of the will expeditiously given the circumstances – the responsibility to carry the client’s wishes extends to an intended beneficiary ( the disappointed beneficiary) who may be foreseeably deprived of a inheritance by the lawyer’s negligence.

A lawyer may breach his duty by failing to enquire, if appropriate, into: obtaining a medical certificate; probing the client’s mind; properly recording notes; looking for suspicious circumstances; allowing interested parties to be present during the interview; failing to take steps to test for capacity; taking instructions from a beneficiary and not confirming same with the testator; a common area of lawyer negligence is missing a limitation date, ie, failing to commence a Wills Variation action within 6 months from the date of probate.

1961 SCC Case Holds an Unregistered Transfer of Land Severs a Joint Tenancy

Sever JT SCC stonehouse.

1961 CarswellBC 159, 37 W.W.R. 62, [1962] S.C.R. 103, 31 D.L.R. (2d) 118

Stonehouse v. British Columbia (Attorney General)

Stonehouse (Plaintiff) Appellant v. Attorney-General of British Columbia (Defendant) Respondent

Supreme Court of Canada

Judgment: December 15, 1961

Family Law — Family property on marriage breakdown — Assets which may be excluded from property to be divided — Division of property in joint tenancy

Real Property — Joint Tenancy — Conveyance by Joint Tenant of Interest Operates as Severance — Unregistered Transfer of land — Result Unaffected by Land Registry Act, B.C., S. 35 — No Duty on Registrar to Inquire Whether Transferor Dead or Alive.

The execution by a joint tenant of a transfer of his interest in land destroys the unity of title without which a joint tenancy cannot exist at common law. This result obtains under the Land Registry Act, RSBC, 1948, ch. 171, even though said transfer is unregistered, by virtue of the opening exception to sec. 35 of said Act, “Except as against the person making the same ….” Davidson v. Davidson, [1946] S.C.R. 115, at 119, which affirmed [1945] 2 W.W.R. 576, 62 B.C.R. 161, 9 Abr Con (2nd) 284, quoted and applied. Wright v. Gibbons (1949) 78 Comm LR 313, distinguished, on the ground that the section of the Tasmania Real Property Act under consideration therein contained no such exception.

An alienation of his interest by a joint tenan as a severance of the joint tenancy. Williams v. Hensman (861) 1 J & H 546, at 557, 30 LJ Ch 878, 70 ER 862, quoted. There is nothing in said Act which changes the effect of the common law in this regard.

In view of this result from the execution by a joint tenant of an unregistered transfer, the registrar is under no obligation, on the presentation of said transfer for registration, to inquire whether the joint tenant who executed said transfer is dead or alive.

Appeal from the judgment of the British Columbia Court of Appeal, (1960-61) 33 W.W.R. 625, 1960 Can Abr 1492, which allowed an appeal from the judgment of Manson. J., (1960-61) 33 W.W.R. 66, dismissed.

The judgment of the court was delivered by Ritchie, J.:

1 This is an appeal from a judgment of the Court of Appeal of British Columbia, (1960-61) 33 W.W.R. 625, reversing and setting aside the judgment of the trial judge, (1960-61) 33 W.W.R. 66, by which the appellant had been awarded damages against the Attorney-General of British Columbia under the provisions of sec. 223 (1) of the Land Registry Act, RSBC, 1948, ch. 171, which read as follows:

223. (1) … any person sustaining loss or damages caused solely as a result of any omission, mistake, or misfeasance of the Registrar, or any of his officers or clerks, in the execution of their respective duties under this Act, may bring and maintain an action in the Supreme Court against the Attorney-General as nominal defendant for the purpose of recovering the amount of the loss or damages and costs from the Assurance Fund.

2 On March 23, 1956, at which time the appellant and his wife were the registered owners of 3384 Southeast Drive in Vancouver as joint tenants, Mrs. Stonehouse, without telling her husband what she was doing, conveyed “all her interest in and to” this property to Mrs. Shirley Munk, her daughter by a former marriage. From the time of its execution until after his wife’s death on March 1, 1959, the appellant was unaware of the existence of this deed which remained unregistered until March 2, 1959, when Mrs. Munk made application for its registration at the office of the registrar of titles at Vancouver.

3 It is contended on behalf of the appellant that by reason of the provisions of sec. 35 of the Land Registry Act the unregistered deed from Mrs. Stonehouse to her daughter had no effect on the appellant’s interest as a joint tenant and that when this three-year-old deed was presented for registration the registrar should have been alerted to the possibility of the grantor having died since its execution and the whole title having thus become vested in the appellant as the surviving joint tenant. It is the failure of the registrar to make inquiry before he registered this deed as to whether the grantor was dead or alive that is now claimed to constitute “an omission or mistake” which was the sole cause of the appellant sustaining damage and which accordingly entitled him to bring and maintain the present action against the attorney-general in accordance with the provisions of sec. 223 (1).

4 When, as in this case, application is made for registration of a transfer of land, the title to which is registered, the registrar is placed under the duty described in sec. 156 of the Land Registry Act as follows:

156. … the Registrar, upon being satisfied that the conveyance or transfer produced has transferred to and vested in the applicant a good safe-holding and marketable title, shall, upon production of the former certificate or duplicate certificate of title, register the title claimed by the applicant in the register.

5 When Mrs. Munk applied for registration there was in force and uncancelled a certificate of indefeasible title which certified that the appellant and his wife were absolutely entitled to the property in question as “joint tenants” subject only to an outstanding judgment which Mrs. Stonehouse had registered against her husband’s one-half interest and by virtue of the provisions of sec. 38 (1) such a certificate is

… conclusive evidence … as against Her Majesty and all persons whomsoever, that the person named in the certificate is seised of an estate in fee-simple in the land therein described ….

6 Sheppard, J.A. has said of this section in the course of his decision in the court of appeal that (p. 632):

As the certificate is conclusive of the owner being seised as against all persons, … it would be conclusive against the Registrar.

7 Counsel for the appellant, however, contends that this section must be read in conjunction with sec. 156, and that once it is accepted that the unregistered deed did not sever the joint tenancy, it follows that the registrar could not be satisfied that a three-year-old deed from one joint tenant had “transferred to and vested in the applicant a good safeholding and marketable title” to an undivided one-half interest in the property until he had also satisfied himself, by inquiry if necessary, that the grantor of that deed was still alive. I do not, however, find it necessary to decide this question because I have formed the opinion that the joint tenancy in question was severed at the time of the execution and delivery of the deed to Mrs. Munk.

8 As has been indicated, the contention advanced on behalf of the appellant in this latter regard is based on the provisions of sec. 35 of the Land Registry Act, the relevant portions of which read as follows:

35. Except as against the person making the same, no instrument … executed and taking effect after the thirtieth day of June, 1905, purported to transfer, charge, deal with, or affect land or any estate or interest therein, shall become operative to pass any estate or interest, either at law or in equity, in the land … until the instrument is registered in compliance with the provisions of this Act …. [The italics are mine.]

9 In finding that the joint tenancy had not been severed by the execution of the unregistered deed and that the jus accrescendi operated in favour of the appellant immediately on his wife’s death so as to vest the whole title in him to the exclusion of Mrs. Munk, the learned trial judge relied, in great measure, as did the appellant’s counsel before this court, on the case of Wright v. Gibbons (1949) 78 Comm LR 313. This is a decision of the High Court of Australia which held that under the Real Property Act of Tasmania the registration of a document evidencing mutual transfers of their interests inter se between two out of three registered joint tenants had the effect of severing the joint tenancy. This case is cited as authority for the proposition that a registered estate as joint tenants can only be severed by some dealing which results in an alteration of the register book, but the decision is of necessity based on the provisions of the Real Property Act of Tasmania of which Riche, J. says at 78 Comm LR 326:

The scheme of transfer and registration is the only method by which any alienation or disposition of a share or interest in land may be made.

10 This observation clearly indicates that the statute under consideration in that case did not include the exception which is made a part of the British Columbia scheme of transfer and registration by the opening words of sec. 35 and in the absence of some evidence that those words were considered by the High Court of Australia, Wright v. Gibbons, supra, cannot be considered as an authority bearing in any way directly on the present case.

11 In Davidson v. Davidson, [1946] S.C.R. 115, which affirmed [1945] 2 W.W.R. 576, 62 B.C.R. 161, Estey, J. had occasion to consider the opening words of sec. 35, and speaking on behalf of this court at p. 119 he said:

These words, ‘except as against the person making the same,’ expressly make operative an unregistered instrument against the party making the same. Therefore, the transfer executed by the respondent was operative to transfer to the Minto Trading and Development Company Limited whatever estate, either at law or in equity, he was in possession of.

12 It is, therefore, apparent that the deed here in question operated as an alienation of the interest of Mrs. Stonehouse, and the very fact of her interest being transferred to a stranger of itself destroyed the unity of title without which a joint tenancy cannot exist at common law.

13 The effect at common law of a conveyance by one joint tenant to a stranger in title is accurately stated in Cheshire’s “Modern Real Property,” 8th ed., at p. 308, in the following terms:

… it has long been the law that one joint tenant can alienate his share to a stranger. The effect of such alienation is to convert the joint tenancy into a tenancy in common, since the alienee and the remaining tenant or tenants hold by virtue of different titles and not under that one common title which is essential to the existence of a joint tenancy.

14 The following passage from the decision of Vice-Chancellor Sir Page Wood in Williams v. Hensman (1861) 1 J & H 546, at 557, 30 LJ Ch 878, 70 ER 862, is to the same effect. He there says:

A joint-tenancy may be severed in three ways: In the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi.

15 There is nothing in the Land Registry Act which changes the effect of the common law in this regard as between the two joint tenants in the present case, and it follows that because the unregistered deed was operative against the share of Mrs. Stonehouse it had the effect of severing the joint tenancy. As Davey, J.A. has said in the course of his decision in the court of appeal (p. 629):

It is the binding effect upon himself of an owner’s dealings with his own property that effects a severance of the joint tenancy.

16 Under the provisions of sec. 35 an unregistered deed could not be operative “to pass any estate or interest either at law or in equity” other than that of the grantor, but the effect of Mrs. Munk’s deed was not “to pass” any such estate or interest of Mr. Stonehouse but rather to change its character from that of a joint tenancy to that of a tenancy in common and thus to extinguish his right to claim title by survivorship which is an incident of the former but not of the latter type of interest. The right of survivorship under a joint tenancy is that, on the death of one joint tenant, his interest in the land passes to the other joint tenant or tenants (Megarry and Wade, The Law of Real Property, 2nd ed., p. 390). But, on the execution and delivery of the transfer by Mrs. Stonehouse, she divested herself of her entire interest in the land in question. At the time of her death, therefore, there was no interest in the land remaining in her which could pass to her husband by right of survivorship.

17 The “omission or mistake” within the meaning of sec. 223 attributed to the registrar by the learned trial judge was that he “omitted to make inquiry as to whether the deed was delivered in the lifetime of the grantor and as to whether she was dead or alive.” The learned trial judge’s finding that there was no delivery of the deed during the lifetime of the grantor was properly set aside by the court of appeal and was not relied on by the appellant’s counsel in this court, and in my opinion, having regard to the state of the register and to the fact that the unregistered deed was operative to sever the joint tenancy at common law the registrar was under no obligation to inquire as to whether Mrs. Stonehouse was dead or alive at the time of the application for the registration of Mrs. Munk’s deed. As there is no suggestion of any other omission, mistake or misfeasance on the part of the registrar, the appellant’s claim must fail.

18 I would accordingly dismiss this appeal with costs.

 

Vancouver Estate Claims – Have You Been Disinherited?

Keep on DisinheritingHave You Been Disinherited?

1. MENTAL CAPACITY

Legal test for capacity:
Banks v. Goodfellow 1870

must understand that a will is being made and that it disposes property on death;
must know the nature and extent of his property;

must understand who has an appropriate claim upon his property;
must be free of delusions that affect his decisions, ie, be of sound mind, memory and understanding;
Lager v. Poirier SCC

“the mind must be able to comprehend of its own initiative and volition” at the time that instructions to the lawyer are given;

However:
a will was recently upheld where the testator thought he was being poisoned by gases into his apartment, as he knew what he owned and what he wanted to do with his estate, and who he had to provide for;

Problems encountered:
– no standard method of assessing capacity
– variety of testing and types of causes of dementia
– problems testing due to language, customs, hearing or sight losses
– medical history/records important
– Dementia not well recognized even by doctors/health professionals or professionals
– people good at covering up, or having things done for them
– most people, including health care, underestimate degree of cognitive impairment
– well settled that a proper assessment cannot be done from superficial discussions – must be “probing of the mind”
– typical indications – short term memory loss, paranoid ideas to family, confusion, difficulty with self care/finances
– disorientation to time/person/place, problems recognizing, easily swayed in opinion

2. UNDUE INFLUENCE

This is an influence that is exerted over the mind of another that amounts to coercion of the other’s free will so as to control the other’s mind, ie, an extreme example is a cult leader.

– demented people are very vulnerable to mental pressure
– hard to prove, look for “suspicious circumstances” – a recent article listed 64 examples of such “suspicious circumstances”
– the propounder of a will has to prove proper execution of the will, knowledge and approval of its contents, and mental capacity where there are circumstances that are suspicious, rather than it being presumed that the testator knew and approved of the contents of the will
– individuals are frequently taken advantage of by care-givers, family, acquaintances, salespeople or power of attorney holders
– where there is a special relationship such as a doctor/patient, lawyer/client, care-giver, parent, child, etc., the B.C. Court of Appeal did in May 1998 rule that there is then a presumption of undue influence that shifts the burden to the defendant to disprove it.

3. WILLS ISSUES

Requirements of a valid will:

must be in writing
must be signed at the end by the testator, and witnessed by 2 or more individuals, all 3 signing in the presence of each of other
must purport to deal with the property of the testator

Common mistakes:
beneficiaries or spouses of beneficiaries cannot witness the will or the bequest is invalid
– marriage after the will is executed will revoke the will
– the witnessing procedures are frequently not properly carried out
– a failure to dispose of the estate or part of the estate
– using incorrect/vague/contradictory language
– using precise words such as “issue” or words such as “per stirpes” which have been interpreted by the Courts to have different meanings

4. WILLS VARIATION ACT

Under British Columbia law spouses and children of a deceased have the right to contest an estate on the basis that the deceased parent or spouse failed to “make adequate provision for their proper maintenance and support”.

In the near future a Court challenge will be made to the Wills Variation Act by a common-law spouse, who currently does not have the right to bring such an action.

There has been a hugh increase in the number of these claims, especially by adult children who have been disinherited.

Applies to any assets owned by the deceased that pass under a valid will and form part of the deceased’s estate – it does not apply to property that passes by right of survivorship such as a joint tenancy, insurance, or pensions where there are named beneficiaries and so forth.

The Court has a wide discretion to vary a will in any manner that it thinks just.

The Court may also take into account evidence of the testator’s reasons for not making adequate provision for the spouse or child that is contained in a statement in writing signed by the testator.

The action must be brought within 6 months from the date of the granting of Letters Probate.

The test with respect to a testator and his adult children is that of the “judicious parent”, and a parent has a moral obligation to provide for his or her children. If the children have estranged themselves, then the testator may not have to provide for the children. The test is that of the judicious parent or spouse, not necessarily a kindly one, as to what he or she should have to provide in order to discharge the marital or parental duty, having regard to both economic and moral considerations.

In a Supreme Court of Canada land mark decision Tataryn v. Tataryn 1994, a wife of 43 years was not adequately provided for in the deceased’s will. One son was provided for generously and another son was disinherited.

The Court found that it should search for “contemporary justice”. It held that a testator has a legal obligation to provide for his or her spouse, and only a moral obligation to provide for adult children. Legal obligations take priority over moral obligations. If there are sufficient assets, then both legal and moral obligations should be met.

The Courts acknowledge that a testator should be free to dispose of his or her assets as he or she sees fit, but the Court will interfere to vary a will where it is appropriate.

In Tataryn the Court held that as a minimum, the widow should get what she would have received had the parties separated, as well as some extra monies in the form of maintenance for her twilight years.

5. INTESTACY ISSUES

Since changed after WESA April 1,2014

See attached Glossary for the formula for the distribution of assets when a person dies without a will.

Separation of spouses for one year prior to death disqualifies the surviving spouse from taking deceased’s spouse estate on an intestacy.

6. GIFTS/RESULTING TRUSTS

This area of the law usually deals with a purported gift of an asset by one individual to another.

Resulting trusts arise in 3 instances:

where the individual gratuitously transfers the assets;
where the individual supplies all or substantially all of the purchase price;
where the individual puts his/her property into another’s name and the other person gave no consideration (ie, paid no monies);

The lack of consideration is the common element – the individual must therefore have intended the recipient to hold the asset in trust and that at some point it will go back to the transferor, as the law of equity assumes bargains not gifts. This presumption can be rebutted on a balance of probabilities but the onus rests on the volunteer to show that it was a gift. If the transferor and the transferee have a close relationship at the time of the transfer, the presumption is weakened and slight evidence will be required to rebut it. The evidence will be confined in time to the date of the transfer and may be written, verbal or circumstantial.

A resulting trust will not be presumed if the transfer was to a wife or child, then the onus will remain on the person who asserts the trust or was from a common-law husband to a common-law wife, or was from a father to a child (and presumably will include mother to child) or was from a step-parent to a step-child.

7. JOINT BANK ACCOUNTS

Generally when an account is opened in the name of 2 or more persons, if the holders are joint tenants, then the survivor has the right to the whole amount. However, in equity the beneficial title is the issue:

who has the right to the income and capital while both joint tenants are alive;
is there a right of survivorship;

Typically when both joint tenants have deposited monies into account, then the survivor is entitled to the proportionate deposits. Where only one of the joint tenants deposits money into the account, then a presumption of resulting trusts arise.

There are a number of decisions that have held that the bank document giving right to the purported right of survivorship is merely for a matter of convenience and it is always a question of intention, that must be proved by evidence. The Supreme Court of Canada has held that the bank form giving rise to the purported right of survivorship does not necessarily evidence a depositor’s intention to make a gift of the account.

8. UNJUST ENRICHMENT

This also is a very big growth area in estate law. The situation typically applies to common-law spouses, same sex spouses, or any one who has been in a “relationship” with another and there has been:

an enrichment enjoyed by one party;
a corresponding deprivation suffered by the other party;
an absence of any juristic reason for the deprivation/enrichment;

There have been a number of Supreme Court of Canada decisions such as Peter v. Beblow that have extended the claim for unjust enrichment to include contributions of homemaking and child care services, rather than the traditional test of financial contribution. The Supreme Court of Canada recently in Soulos held that the test for constructive trust is now “good conscience.”

This law has in recent years been applied to same sex relationships.

Constructive trust claims have been and will continue to be more prevalent.

Constructive trusts may also arise in other circumstances than common-law or same sex relationships, such as mutual wills. A constructive trust may be imposed on the survivor of the parties if it can be shown that there was an agreement between the parties not to revoke their wills and to dispose of their property in a particular way if the survivor has broken the agreement and has made another will.

9. BREACH OF FIDUCIARY DUTY

A fiduciary relationship is one in which there is a duty to one person, the fiduciary, to act on behalf of another person with respect to property which is the subject of the relationship. Where there is a fiduciary relationship, then the fiduciary must act honestly, impartially and cannot personally benefit other than for prescribed fees for services. The fiduciary is bound to protect the interests of the beneficiary, and cannot act in a conflict of interest, nor personally benefit. Fiduciaries are typically lawyers, bankers, directors, or any other person in a high position of trust.

A person using a power of attorney cannot use that document to personally benefit him or herself, or this will be a breach of fiduciary duty.

There is an onus on the fiduciary to prove that he or she acted properly when called into question.

10. LAWYER’S NEGLIGENCE

A lawyer is under a duty of care to carefully consider a client’s mental capacity and the thoroughness required is proportionate to the gravity of the transaction:

A lawyer owes a duty to his client to draft a will in accordance with the instructions, and to provide all required advice and attend to the execution of the will expeditiously given the circumstances – the responsibility to carry the client’s wishes extends to an intended beneficiary ( the disappointed beneficiary) who may be foreseeably deprived of a inheritance by the lawyer’s negligence.

A lawyer may breach his duty by failing to enquire, if appropriate, into:
obtaining a medical certificate;
probing the client’s mind;
properly recording notes;
looking for suspicious circumstances;
allowing interested parties to be present during the interview;
failing to take steps to test for capacity;
taking instructions from a beneficiary and not confirming same with the testator;
a common area of lawyer negligence is missing a limitation date, ie, failing to commence a Wills Variation action within 6 months from the date of probate.

Severance of Joint Tenancies

Severance of Joint Tenancies

The severance of joint tenancies is an increasingly important issue in estate litigation. It can occur without the registered joint owners even when knowing it if their conduct is inconsistent with joint ownership.

We often assume that property, registered in joint tenancy, will automatically pass to the surviving joint tenant(s) upon the death of another joint tenant.

This is, however, not always the case. As demonstrated in the recent Pecore and Madsen cases from the Supreme Court of Canada, one possibility is that the surviving joint tenant actually holds the property in trust for the estate of the estate of the deceased.

A second option, which we will examine in this paper, is the possibility where joint tenancies have been somehow terminated prior to the death of one co-owner.

Legal practitioners should always consider the question of whether property, apparently held in joint tenancy, indeed remained in joint tenancy at the time of death.

Subject always to the principles set out in Pecore, where a joint tenancy has not been terminated prior to a joint tenant’s death, then the property will automatically pass to the surviving joint tenant.

On the other hand, if the joint tenancy has been somehow terminated, then the deceased’s share in the property will be included in his or her estate and distributed accordingly.

Severance of Joint Tenancies

The legal process of converting a joint tenancy arrangement into a tenancy in common, is referred to as “severance”. The distinction is important because of the right of survivorship which attaches to a joint tenancy but not to tenants in common.

It is possible to sever a joint tenancy either intentionally or inadvertently. Where a tenancy in common has been created prior to the death of one owner, the deceased’s property interest will not pass the other owners, but rather will form part of the deceased’s estate.

The severance of the joint tenancy can have a very significant effect on the outcome of both matrimonial and estate litigation. Recently this is especially so because real property increasingly represents the major asset owned by the Deceased.

Requirements of Joint Tenancies

Our law presumes joint owners to hold as tenants in common, rather than as joint tenants unless the title of the property specifically describes the owners as “joint tenants”.

In addition to the form of registration, there are four essential pre-conditions of ownership in joint tenancy. These are known legally as the “four unities” . In the absence of any of these four unities, the law presumes the owners to be tenants in common, and not joint tenants.

Briefly, the four unities are the following;

1) Unity of Interest

The interest of all joint tenants must be identical in duration, extent, and nature. For example , two joint owners would each have 50% , or four joint owners would each have a 25% interest. (Thus a 30/70 per cent ownership can exist only as for tenants in common.)

2) Unity of Possession

Each joint tenant must have an undivided share of the property at the same time as the other joint tenants. No joint tenant can have the exclusive right to possess the whole property. ( Possession in this context refers to the actual ownership of the property, and not actual physical occupancy.) The concept of an undivided share means that there is no actual division of any kind in the property. From a legal perspective, there is only the whole property, there is no such thing as a division of the whole;

3) Unity of Time

The interest of all joint tenants must be created at the same time and for the same period. Each joint tenant must receive his or her interest at the same time and the interest must be of the same duration.

4) Unity of Title

Each joint tenant must have an equal title to the property, created by the same legal document. The document creating the title may be a transfer document, a will, a trust declaration, a deed of gift, or contract. What is crucial, however, is that it be the same legal document which creates each of the respective interests as joint tenants.

Should any of these four unities fail, this may cause the severance of the joint tenancy, and create a tenancy in common.

Acts Severing a Joint Tenancy

The leading English case is Williams v. Hensman ( 1861) 70 E.R. 862. Here the court held that a joint tenancy may be severed in three different ways.

1) By an act of one person acting on his or her own share; ( i.e. Mr. Smith registers a transfer from himself to himself at the land title office).

In other words, one joint tenant, without the consent of or even notice to the other tenants, may deal with his interest in such a way as to destroy one of the unities. In British Columbia our Land Title Act, s 18 permits such a transfer to sever a joint tenancy;

2) By mutual agreement

This typically occurs when all of the joint tenants enter into an agreement which expressly purports to sever the joint tenancy. Most often this occurs during a marriage breakup. It may be set out in a separation agreement or court order. Where, however, an agreement does not specifically address the severance of the joint tenancy, our courts often require that the parties establish severance by mutual course of conduct. McKee v. National Trust (1975) 56 D.L.R. (3d) 190)-;

3) By any course of dealing that intimates that the interests of all were mutually treated as constituting a tenancy in common.

Many acts can cause the severance of the joint tenancy, sometimes unwittingly. For severance by conduct, however, there must be mutuality of intention to treat the ownership as a tenancy in common. Both joint tenants must openly and mutually treat the tenancy as a tenancy in common. For example, a declaration of irreconcilability under the Family Relations Act, RSBC, will sever any joint tenancy ownerships of property held by the couple.

Case Discussion: Joint Tenancies

Most reported cases seem to involve the question of “mutual treatment” as tenants in common i.e. whether or no the parties carried out a course of conduct sufficient to enable the court to find their interests as constituting a tenancy in common.

Commonly the courts seem to focus on negotiations or actual agreements between the parties in respect of the property in question. These have been found to be evidence of an intention to treat the ownership interests as a tenancy in common.

In Schofield V. Graham (1969) 6 D.L.R. (3d) 88, a husband and wife had purchased property initially as joint tenants. Years later, when their marriage was dissolved, a dispute arose regarding the ownership of the property. The wife commenced an action for a declaration that each owned an undivided one half interest as joint tenants. That action settled prior to trial on the basis that the property would be listed for sale, and the proceeds divided equally. Prior to final sale, however, the husband died and the wife claimed full ownership of the property as a surviving joint tenant.

The wife’s claim was denied. The court held there was sufficient evidence to conclude that the parties intended to destroy their unity of possession. Therefore it ruled the joint tenancy had been severed.

Perry v Perry Estate

This decision was followed in Perry v. Perry Estate 39 E.T.R. (2d) 115, an Alberta decision. Here a couple divorced but no court order was made with respect to the family home registered in their names as joint tenants. The home was sold, however the husband died before the sale proceeds were distributed.

Once again, the court ruled that the joint tenancy had been severed. The court found that the finalization of the divorce and the decision to sell the home indicated that the parties intended to terminate the unity of possession. They said the agreement to sever was implicit in the parties’ actions. Accordingly the wife was only entitled to one half of the proceeds of the sale, with the other falling into the husband’s estate.

Feinstein v. Ashford

Feinstein v. Ashford, 2005 BCSC 1379 is an example of the importance of careful analysis of various ownership interests. In this case one joint tenant, unbeknownst to the other joint tenant, signed a land transfer at his lawyer’s office to reregister title to their joint property as a tenancy in common. A few hours later he died.

A legal dispute thus arose as to whether this unregistered transfer was effective to sever the joint tenancy. The court held that, upon execution, the transfer was effective to sever the joint tenancy.

Walker v. Dubard

A leading British Columbia case is Walker v. Dubard 45 E.T.R. 209 (BCCA) This case involved a couple who owned several assets jointly. Shortly before her death due to cancer, the wife was apparently upset with her husband’s lack of sensitivity to her illness and wanted to avoid her estate passing to his relatives. Accordingly she both changed her will and transferred several assets out of joint tenancy. The husband made a claim under the Wills Variation Act and also sought declarations with respect to ownership of some of the joint assets.

One question was the effectiveness of some letters to the Deceased’s bank which had been drafted by the Deceased’s lawyer and signed by the Deceased. These letters spoke of her intention to sever the joint tenancy in respect of some investment certificates and bonds. They did not however specifically direct the bank to transfer these assets.

The appeal court upheld the trial judge’s finding that the joint tenancy had not been severed. The bank investments therefore passed to the husband by way of right of survivorship.

The court ruled that it is insufficient to sever a joint tenancy where there is merely a unilateral declaration of intent to sever, and nothing more, regardless of whether notice of that intent is given to the other joint tenant(s).

Zuk v. Zuk

The case Zuk v. Zuk 2007 BCSC 300 involved the untimely death of a wife in the midst of matrimonial proceedings against her husband. At the time of death, there had not yet been any declaration of irreconcilability made under the Family Relations Act.

The wife’s daughter continued the action as her personal representative and sought reapportionment of the former matrimonial should be made in favour of the estate. The husband argued that the matrimonial home was his alone as surviving joint tenant.

The court found there had been no severance. In doing so they cited Tompkins Estate v. Tompkins (1993) 76 B.C. LR (2d) (BCCA) in which Southin, J.A. stated in Para (9) she is “not wholly in accord with the learned trial judge’s conclusion that severance requires either alienation or agreement. I prefer to say that it requires either alienation or agreement or facts which preclude one of the parties from asserting that there was no agreement.”

Conclusion

It is not entirely clear what the courts may require in order to find where joint tenancies have been severed. Nevertheless it is safe to predict that in future there will likely be court challenges to estate plans using joint tenancies, on the basis that the conduct of the parties has resulted in a severance of the joint tenancy.

For example, we recently reviewed a file where a transfer of property had been made to a father and son as joint tenants. Simultaneously they signed a trust agreement wherein the son acknowledged that he actually held his interest in trust for both himself and his sister. This in fact occurred in Public Trustee v Mee (1972) 2W.W.R. 424.The court held that when the bare trust declaration was signed, the property was transferred to the trustee, and thus the joint tenancy severed. This lack of basic understanding of the 4 unities, defeated the joint ownership arrangement from the outset.

There seems to an unfortunate lack of consideration by some legal professionals of the effects of some legal documents on the nature of ownership of the property.

Further posts on Joint Tenancies include

The Nature of Joint Tenancy

Using Joint Tenancy for Estate Planning

Joint Tenancy & Property

 

Early Vesting v Contingent Gifts

Early vestingIn order to determine the date at which the recipients of the interest are determined, it is necessary to determine whether the gift was vested or contingent

A contingent interest is one that is subject to the happening of an event that may never occur.

A vested interest, on the other hand, is one the enjoyment of which is merely postponed, though it may be subject to subsequent divestment: see James MacKenzie, Feeney’s Canadian Law of Wills, 4th ed, looseleaf (Markham, Ontario: Butterworths, 2000-) at para. 17.2.

In other words, if the gift is subject to a condition precedent, then it is contingent; if it is subject to a condition subsequent (which will cause the interest to be divested if the condition is met), then it is vested subject to divestment. In this case, if the gift was contingent, the recipients would be determined as of the date the contingencies were satisfied. If it was vested, the recipients would be determined as of the date of the testator’s death.

A condition precedent establishing a contingent interest does not necessarily have to be personal to the donee; it can be a condition that some other person do some act or some other donee survive to a certain time: see Feeney’s Canadian Law of Wills at para. 17.6.

Usually, where the gift is contingent, the words of the condition precedent will be introduced by the word “if”: McKeen Estate v. McKeen Estate (1993), 132 N.B.R. (2d) 181, 49 E.T.R. 54 (Q.B.).

Where there is a gift-over in the event of death coupled with a contingency, such as “in the event of A’s dying without issue”, the gift-over will take effect when A dies and the contingency is satisfied:

Fraser v. Fraser (1896), 26 S.C.R. 316; Re Hildreth (1923), 54 O.L.R. 139 (C.A.); see also Re Fairfoull (1973), 41 D.L.R. (3d) 152 (B.C.S.C.), aff’d on reconsideration [1974] 6 W.W.R. 471, 18 R.F.L. 165 (B.C.S.C.).

The presumption of early vesting is that, wherever the words used in a will permit a construction that results in early vesting, the gift will be vested rather than contingent: Hamilton v. Hart (1919), 27 B.C.R. 101, 47 D.L.R. 231 (C.A.); Re Taylor, [1972] 3 O.R. 349, 28 D.L.R. (3d) 257 (H.C.J.).

Consistent with this presumption, where there is doubt as to whether a condition is intended to be a condition precedent or a condition subsequent, the court should prima facie treat it as a condition subsequent: Sifton v. Sifton, [1938] A.C. 656, [1938] 3 D.L.R. 577 (P.C.).

However, the presumption only applies where the court has some doubt as to the testator’s intention: Re Fraser (1986), 55 O.R. (2d) 268, 29 D.L.R. (4th) 88 (H.C.J.); Henderson v. Henderson Estate (1990), 73 O.R. (2d) 616, 38 E.T.R. 120 (Ont. H.C.).

The rule in Browne v. Moody states that a gift of the remainder will be treated as vested if (a) it is postponed in the will solely for the convenience of the testator’s estate or (b) it is postponed by the creation of some prior interest, such as a life estate: see Re Thompson, [1974] 1 W.W.R. 289, 41 D.L.R. (3d) 305 (B.C.S.C.) and Re Ross (1984), 6 D.L.R. (4th) 193 (B.C.S.C.).

Wrongful Death Claims – Loss of Financial Support

Wrongful Death Claims

Yesterday I blogged about the Family Compensation Act of British Columbia which allows a spouse, parent, or child of a person whose death has been caused by the wrongful act negligence or default of another, to sue for compensation.

There are several heads of damages, and probably the largest in terms of pecuniary amount is that of loss of financial support.

The following cases are a brief summary of this head of damage:

In the decision Johnson v. Carter, 2007 BCSC 622, the court referred to some of the principles in the following paragraphs:

Here, the claim is for loss of financial support.

In Keizerv. Hanna, [1978] 2 S.C.R. 342, Dickson J. said the following at 351-52:

… The appellant is entitled to an award of such amount as will assure her the comforts and station in life which she would have enjoyed but for the untimely death of her husband. If one is speaking of contingencies, I think it is not unreasonable to give primary attention to the contingencies, and they are many, the occurrence of which would result in making the award, in the light of events, entirely inadequate. An assessment must be neither punitive nor influenced by sentimentality. It is largely an exercise of business judgment. The question is whether a stated amount of capital will provide, during the period in question, having regard to contingencies tending to increase or decrease the award, a monthly sum at least equal to that which might reasonably have been expected during the continued life of the deceased.

The conventional approach to determining an award for loss of future earnings is as follows:

1. A calculation is made of the income

which has been lost up to the date of the trial.

2. A calculation is made of the loss of

future earnings.

3. A reduction is then made for personal

consumption of the deceased.

4. Contingencies are reviewed to

determine if a further reduction is required.

[Cogar Estate v. Central Mountain Air Services Ltd.

(1992), 72 B.C.L.R. (2d) 292 (C.A.)]

 

Loss of support, like loss of future earning capacity, involves an inquiry into the unknowable:

Because damage awards are made as lump sums, an award for loss of future earning capacity must deal to some extent with the unknowable. The standard of proof to be applied when evaluating hypothetical events that may affect an award is simple probability, not the balance of probabilities: Athey v. Leonati, [1996] 3 S.C.R. 458. Possibilities and probabilities, chances, opportunities, and risks must all be

considered, so long as they are a real and substantial possibility and not mere speculation. These possibilities are to be given weight according to the percentage chance they would have happened or will happen.

[Rosvoldv. Dunlop (2001), 84 B.C.L.R. (3d) 158, 2001 BCCA 1 at [paragraph] 9]

[6] Our Court of Appeal in Brown v. Finch, 42 B.C.L.R. (3d) 116 also said at 1J3:

3. The basis upon which damages must be assessed is that stated by McFarlane J.A. in Cox v. Takahashi (1977), 5 B.C.L.R. 162 (B.C.C.A.) at 164:

It is well established that the measure of damages under the statute as interpreted by the Privy Council in Nance v. B.C. Bee. Ry., [1951] A.C. 601, 2 W.W.R. (N.S.) 665, [1951] 3 D.L.R. 705, is the pecuniary loss suffered by the dependants as a consequence of the death. That pecuniary loss is the actual financial benefit of which they have been deprived and includes financial benefit which might reasonably be expected to accrue in the future if the death had not occurred

Wrongful Death Claims and The Family Compensation Act

Tegemann v. Pasemko 2007 BCSC 1062 is a good case example of the principles for compensation under the Family Compensation act of British Columbia.

In this particular case the deceased was a 50-year-old mother, who is survived by her husband aged 49 at the time of the accident, and two young children aged six and three at the same time.

The plaintiff based his claim under the following sections of the Family Compensation act:

Action for death by wrongful act, neglect or default

2 If the death of a person is caused by wrongful act, neglect or default, and
the act, neglect or default is such as would, if death had not resulted, have
entitled the party injured to maintain an action and recover damages for it, any
person, partnership or corporation which would have been liable if death had
not resulted is liable in an action for damages, despite the death of the person
injured, and although the death has been caused under circumstances that
amount in law to an indictable offence.

Procedures for bringing action

3 (1) The action must be for the benefit of the spouse, parent or child of the
person whose death has been caused, and must be brought by and in the
name of the personal representative of the deceased.

The court or jury may give damages proportioned to the injury resulting from the death to the parties respectively for whose benefit the action has been brought.
The amount recovered, after deducting any costs not recovered from the defendant, must be divided among the parties in shares as the court or jury by their judgment or verdict directs.

In assessing damages any money paid or payable on the death of the deceased under any contract of assurance or insurance must not be taken into account.
In an action brought under this Act, damages may also be awarded for any of the following expenses if the expenses have been incurred by any of the parties for whom and for whose benefit the action is brought:

any medical or hospital expenses which would have been recoverable as damages by the person injured if death had not ensued;
reasonable expenses of the funeral and the disposal of the remains of the deceased person.

It is most noteworthy that the action may only be brought for the benefit of the spouse parent or child of the person whose death has been caused, and that it must be brought in the name of the personal representative of the deceased.

 

There are a number of heads of damages that can be claimed such as:

Loss of care, guidance and affection;
Loss of inheritance;
Loss of dependency;
Loss of household and childcare services;
Special damages.
Loss of financial support (usually the largest monetary claim)
loss of future earnings

Many of the heads of damages such as financial loss, are calculated with the assistance of actuaries and/or economists based on financial analysis of past income tax returns etc.

Needless to say it can be very complex to determine.

 

CONTINGENCIES OF LIFE

 

Once a judge reaches the various numbers of the heads of damages the judge often then takes into account the various contingencies of life such as the husband’s statistical chances for divorce and/or remarriage that should be deducted from such an award.

In this particular case the court deducted 20% of his calculation for loss of dependency, based on the reasonable expectation that the husband will remarry.

Capacity To Make a Will

Capacity To Make a Will

 

A person making a Will must understand:

 

The nature of the act of making a Will:

a. That he will die;

b. That the Will will come into operation on his death, but not before; and

c. That he can change or revoke the Will at any time.

 

2. The effects of the Will:

 

a. Who the executor is, and possibly why he or she is being chosen as
executor;

b. Who gets what under the Will;

c. Whether a beneficiary’s gift is absolute, or whether it is limited or
conditional in some way (for example a life interest, or a legacy
contingent on attaining a particular age);

d. Whether he has already made a Will and, if so, how and why the new one
differs from the old one.

 

The extent of the property being disposed of:

a. The extent of the property being disposed of;

b. The fact that any jointly owned property might automatically pass to the
other joint owner, regardless of anything the will says;

c. Whether there’are benefits payable on his death which would be
unaffected by the terms of the will: for example, the proceeds of an
insurance policy, or pension rights;

d. Whether he has any debts, and how they are to be paid

 

A person making a Will should be able to comprehend and appreciate the claims
to which he ought to give effect. Why are some beneficiaries preferred and others
possibly excluded? For example:

a. Some may be better provided for than others;

b. Some may be more deserving than others because they have been kind to
the testator;

c. Some may have upset, offended or disregarded him;

d. Some may be in greater need than others because of, say, their age or state
of health.

e. It is essential that no delusions should influence the testator and bring
about a disposal of his property which would not have been made if he
was not mentally disordered.

 

5. The testator should not be regarded as lacking testamentary capacity merely because he makes a will which would not be made by a person of ordinary prudence.