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Court Interprets Meaning of a Trust Using Wills Construction Law

Law

Wills and Trusts Construction Law

 

Souch v Johnson 2014 BCSC 1889 is quite frankly a ridiculous court application made necessary by the inclusion of a capital  C in some places in the trust him, and a small C and other places.

Even though the trust document was quite specific that only the five children of the first marriage of the deceased were to be beneficiaries under the terms of the trust, the public Guardian and trustee of the province contested the trust on the basis that the use of the small C somehow entitled the other two children born of the deceased, but not named in the trust, to share in the trust.

The argument was specious and was ultimately rejected by the court, who found that the trust was quite clear in its meaning , that only the first five children of the estate should share in the trust, and that a mere typo had caused all of the confusion and expensive litigation.

The case is not particularly noteworthy other than  the court relied upon a recent decision of Mdm. Justice Dardi, used by her twice, that leads to it being knownsas the ” armchair rule :

[13] Previous decisions have set out the general principles to determine the intention of a settlor of a trust (or the intention of a testator). Madam Justice Dardi provides a helpful summary in Thiemer Estate v Schlappner, 2012 BCSC 629 (repeated except for para. 50 in her judgment in Ali Estate (Re), 2014 BCSC 340, at para. 16):

In construing a will, the objective of the court is to ascertain the intention of the testator as expressed in his or her will when it is read as a whole in light of any properly admissible extrinsic evidence: Rondel v Robinson Estate, 2011 ONCA 493, at paras. 23-24; Theobald on Wills, 15th ed. (London: Sweet and Maxwell, 1993) at 199. It is a cardinal principle of interpretation that the testator’s intention is to be gathered from the will as a whole and not solely from those provisions which have given rise to the controversy: Perrin v. Morgan, [1943] A.C. 399 at 406 (H.L.); Re: Burke (1960), 20 D.L.R. (2d) 396 at 398-399 (Ont. CA) .

Another fundamental tenet affirmed by an established line of authorities is that the court is to ascertain the expressed intention of the testator – the meaning of the written words used in the particular case – as opposed to what the testator may have meant to do when he or she made the will: Perrin at 406.

Earlier lines of authority endorsed an objective approach to will interpretation. However, modern jurisprudence recognizes that a strict literal approach can defeat the intention of the testator, thereby leading to unjust results: Law Reform Commission of British Columbia, Report on Interpretation of Wills, Souch v. Johnson Page 5

LRC 58 (Victoria, MAG, 1982) at 6. The liberal interpretive approach finds its roots in the seminal decision of the House of Lords in Perrin.

In keeping with contemporary judicial thinking, the courts of this province have favoured the subjective approach to interpreting wills, wherein the objective is to ascertain the actual meaning the testator ascribed to the words he or she used in the will. In determining the testator’s intention the courts have endorsed the analytical approach commonly described as the “armchair rule”. The rule requires that the court put itself in the position of the testator at the point in time when he or she made the will, and from that vantage point construe the language in the will in light of the surrounding facts and circumstances known to the testator.

In Re: Burke, the Ontario Court of Appeal articulated the guiding principles which were cited with approval by our Court of Appeal in Davis Estate v Thomas, (1990) 40 E.T.R. 107 (B.C.C.A.) and Smith v. Smith Estate (Trustee of), 2010 BCCA 106, at paras. 18 and 28 respectively:

…Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed and which might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator. When an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so.

Since the meaning of words in wills can differ so much according to the context and circumstances in which they are used, previously decided cases are of limited assistance except in so far as they may express general principles of construction. This notion has repeatedly been embraced by Canadian courts: Kaptyn Estate (Re) at para. 32; Perrin at 406; Re: Burke at 398.

[14] The above quotation from Re Burke is often used to describe what is called the “armchair rule.”

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