Estates & Trusts Reports

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[Indexed as: McKendry v. McKendry] Jean Marie McKendry, Alexis Elaine Kent and Margaret Anne Collin (Respondents / Plaintiffs) And John Alexander McKendry (Appellant / Defendant) British Columbia Court of Appeal Docket: Vancouver CA43408 2017 BCCA 48 Groberman, Garson, Dickson JJ.A. Heard: November 4, 2016 Judgment: January 30, 2017 Estates and trusts –––– Estates — Legacies and devises — Miscellane- ous –––– Mother was predeceased by father, and they had five surviving children — In January 2008, mother transferred property into her name and her son’s name as joint tenants, and son lived with her for rest of her life — Later in 2008, lawyer prepared trust declaration reflecting mother’s intentions, providing that son hold property in trust and divide beneficial interest on mother’s death in accordance with mother’s instruction — In early 2010, mother’s lawyer created trust with son as trustee, providing that beneficial interest in property would be divided into equal shares for each of her five children upon her death, and son refused to sign both 2008 and 2010 trust delcarations — In December 2010, mother executed will appointing son and one daughter as estate executors and trustees and providing that property was registered in joint tenancy with son and that he would receive it subject to mortgages, and that residue of estate was to be divided equally between four remaining children — Daughters sought declaration that son held property in trust for estate, and commenced separate action for variation of will — At trial, son was found to have held real property in trust for mother’s estate — Son appealed — Appeal allowed — Both sections 59(1) and (3) of Law and Equity Act were applicable — Mother’s intentions in 2008 and 2010 were manifest and unambiguous — In 2008, when mother gratuitously transferred legal title to son in joint tenancy, she did so with intent that he hold property in trust, and he would have continued to hold legal title to property 2 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

only and to hold beneficial interest in trust unless circumstances changed — Change occurred in December 2010, when mother unambiguously renounced her beneficial interest in right of survivorship in son’s favour should he survive her — She clearly intended to make immediate inter vivos gift of that incident of joint tenancy to son — Under s. 59(1) of Act, mother’s renunciation of her beneficial interest in right of survivorship did not amount to disposition of land and requirements of s. 59(3) did not apply — Mother had previously transferred legal title to son in joint tenancy and done everything necessary in December 2010 to give her beneficial interest to son bearing in mind nature of that interest — Intention was made manifest in signed document that her lawyer prepared and no further act of delivery was required because of existing joint tenancy — Nothing more would have been gained had mother executed deed of gift under seal given her clear and formally expressed intention. Cases considered by Dickson J.A.: Bergen v. Bergen (2013), 2013 BCCA 492, 2013 CarswellBC 3473, [2013] B.C.J. No. 2552, 52 B.C.L.R. (5th) 258, [2014] 4 W.W.R. 28, 39 R.F.L. (7th) 28, 346 B.C.A.C. 207, 592 W.A.C. 207 (B.C. C.A.) — considered Fuller v. Fuller Estate (2010), 2010 BCCA 421, 2010 CarswellBC 2555, 9 B.C.L.R. (5th) 236, 292 B.C.A.C. 182, 493 W.A.C. 182, 62 E.T.R. (3d) 212, [2010] B.C.J. No. 1901, 92 R.F.L. (6th) 34 (B.C. C.A.) — referred to Kerr v. Baranow (2011), 2011 CarswellBC 240, 2011 CarswellBC 241, 14 B.C.L.R. (5th) 203, 411 N.R. 200, 328 D.L.R. (4th) 577, [2011] S.C.J. No. 10, [2011] A.C.S. No. 10, 93 R.F.L. (6th) 1, 274 O.A.C. 1, [2011] 1 S.C.R. 269, (sub nom. Vanasse v. Seguin) 108 O.R. (3d) 399, 509 W.A.C. 1, 2011 SCC 10, 64 E.T.R. (3d) 1, 300 B.C.A.C. 1, [2011] 3 W.W.R. 575 (S.C.C.) — referred to Kooner v. Kooner (1979), 100 D.L.R. (3d) 76, 1979 CarswellBC 786, [1979] B.C.J. No. 84 (B.C. S.C.) — considered Pecore v. Pecore (2007), 2007 SCC 17, 2007 CarswellOnt 2752, 2007 Carswell- Ont 2753, [2007] S.C.J. No. 17, 361 N.R. 1, 32 E.T.R. (3d) 1, 37 R.F.L. (6th) 237, 279 D.L.R. (4th) 513, 224 O.A.C. 330, [2007] 1 S.C.R. 795 (S.C.C.) — considered Simcoff v. Simcoff (2009), 2009 MBCA 80, 2009 CarswellMan 357, 82 R.P.R. (4th) 22, [2009] 9 W.W.R. 248, 49 E.T.R. (3d) 302, 245 Man. R. (2d) 7, 466 W.A.C. 7, [2009] M.J. No. 265 (Man. C.A.) — considered Singh Estate (Trustee of) v. Shandil (2007), 2007 BCCA 303, 2007 CarswellBC 1322, 32 E.T.R. (3d) 207, 68 B.C.L.R. (4th) 108, [2007] 10 W.W.R. 84, (sub nom. Singh Estate v. Shandil) 243 B.C.A.C. 148, (sub nom. Singh Estate v. Shandil) 401 W.A.C. 148, 32 E.T.R. (3d) 206 (B.C. C.A.) — referred to Zeligs Estate v. Janes (2016), 2016 BCCA 280, 2016 CarswellBC 1766, 402 D.L.R. (4th) 88, (sub nom. Zeligs Estate v. Burnett Estate) 390 B.C.A.C. 173, 70 R.P.R. (5th) 183, (sub nom. Zeligs Estates v. Burnett Estate) 673 McKendry v. McKendry Dickson J.A. 3

W.A.C. 173, 90 B.C.L.R. (5th) 1, [2016] 12 W.W.R. 673 (B.C. C.A.) — referred to Statutes considered: Land Title Act, R.S.B.C. 1996, c. 250 Generally — referred to Pt. 12 — referred to Law and Equity Act, R.S.B.C. 1996, c. 253 Generally — referred to s. 59(1) “disposition” — considered s. 59(1) “disposition” (a) — considered s. 59(3) — considered s. 59(3)(a) — considered

APPEAL by son from judgment reported at McKendry v. McKendry (2015), 2015 BCSC 2433, 2015 CarswellBC 3802, 15 E.T.R. (4th) 205 (B.C. S.C.), declaring that son held real property in trust for late mother’s estate.

K.E. Ducey, for Appellant R.D. Lee, for Respondents

Dickson J.A.: Introduction 1 This is an appeal from a trial judgment declaring that the appellant, John McKendry, holds real property in trust for his late mother’s estate. The respondents, Margaret Collin, Jean McKendry and Alexis Kent, are three of the appellant’s four sisters, all of whom are entitled to a share of the estate. For clarity, I will refer to the parties and their late mother, Mary McKendry, by first name. 2 The real property in question is Mary’s home in Vancouver. In 2008, she transferred legal title to the property into joint tenancy with John, although it is clear that he was to hold the property in trust. In 2010, Mary decided to remove the trust conditions so that John would receive the property absolutely on her death. She informed her lawyer in writing accordingly. The central issue on appeal is whether the trial judge erred in finding that Mary was required to execute a written deed of gift under seal for John to take beneficial ownership when she died. 3 For the reasons that follow, I would allow the appeal and dismiss both of the Respondents’ actions in the court below. 4 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Background 4 Mary and her husband Gordon had six children: Margaret, Jean and Alexis, a fourth daughter, Colleen, and two sons, James and John. James died in early childhood. The remaining five McKendry children survived both their parents. 5 In 1963, Mary and Gordon purchased the property, which is located on West 48th Avenue in Vancouver. Although it was originally held in both names, in 2000 Gordon transferred the property into Mary’s name alone. A few years later, he died. By 2006, John had moved into the property, where he lived with Mary for the rest of her life. 6 On January 28, 2008, Mary transferred legal title to the property into her name and John’s as joint tenants. To do so, she signed a Form A transfer which was registered at the Land Title Office the next day. At the time of the transfer, however, Mary did not intend to give the beneficial interest in the property to John, as a gift or otherwise. Rather, she intended to transfer legal title only, and for John to have some ability to access the equity for investment purposes. She also intended that John would hold the beneficial interest in trust and divide it into three equal shares when she died: one share to go to him, one share to Colleen, and one share to be divided equally among Margaret, Jean and Alexis. 7 Later in 2008, a lawyer prepared a trust declaration reflecting Mary’s intentions. The trust declaration provided that John hold the property in trust and divide the beneficial interest upon Mary’s death in accordance with her instructions. John did not sign the trust declaration. 8 In February 2010, Mary consulted a new lawyer, Ms. Richter. She asked Ms. Richter to dissolve the trust she thought was created when the property was transferred into joint tenancy in 2008. She also asked Ms. Richter to create a new trust, with John as trustee, providing that the beneficial interest in the property would be divided into equal shares for each of her five children upon her death. 9 Ms. Richter prepared a new trust declaration in accordance with Mary’s instructions. Again, John did not sign. 10 In April 2010 Mary contacted Ms. Richter and asked her to put the new trust declaration “on hold”. McKendry v. McKendry Dickson J.A. 5

11 In November 2010 John dropped off a handwritten note from Mary at Ms. Richter’s office. In the note, Mary stated that she did not want a trust agreement with respect to the property. Instead, she wrote: . . . My son, John, is to have sole possession of this house and contents. Margaret, Jean, Alexis and Colleen will receive their portions of my Estate (in my Last Will and Testament). I trust my son, John, to take care of my family if necessary. 12 A few days later, Mary spoke with Ms. Richter on the telephone. She told Ms. Richter that, after much consideration, she had decided it was simpler for her to leave the property in joint tenancy. She also said that she understood the property would go to John absolutely on her death and he did not need to share it with his siblings. 13 On December 16, 2010, Mary met with Ms. Richter in person. At the meeting, she signed a will and a two–page document that Ms. Richter had prepared. The will appointed John and Colleen as executors and trustees of Mary’s estate and divided the residue equally among Mar- garet, Jean, Alexis and Colleen. It also included a paragraph stating that the property was registered in joint tenancy with John and he would receive it subject to the registered mortgages. 14 Mary signed the two–page document on both of its pages. The document provided: I, Mary Alice McKendry, confirm that I wish to cancel any trust agreements or other documents imposing an obligation on my son to share the property I own at [W. 48th] with my other children. I want my home to be my son’s property on my death absolutely – no strings attached. I have made this decision after much consideration and I fully understand that this gives my son the majority of my assets. My house constitutes the majority of my assets. 15 Mary died on February 23, 2012. 16 In May 2012, Margaret, Jean and Alexis commenced the first of two actions against John, seeking a declaration that he holds the property in trust for Mary’s estate. In March 2014, they commenced the second action, seeking variation of Mary’s will.

The Trial Judgment 17 At trial, Margaret, Jean and Alexis contended that the January 2008 transfer of title was gratuitous and that John held his interest in the property in trust for Mary during her lifetime, and thereafter for her estate. 6 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

John responded that Mary’s intention when she transferred title in Janu- ary 2008 was to make an immediate gift of the joint tenancy interest. 18 The trial judge rejected John’s submission and found the evidence demonstrated that Mary did not intend to transfer a beneficial interest in the land to John when she transferred legal title to him. Rather, she intended to make him a legal owner of the property and to allow him to use the equity for purposes of investment, subject to her control. Mary considered that a transfer of a legal interest to John would facilitate such an arrangement. 19 The judge went on to address John’s further submission regarding the events of December 2010 and their legal implications. In summary, according to John, by December 2010 Mary clearly intended to give him a beneficial interest in the property, including an unfettered right of survivorship upon her death. As the property was already held in joint tenancy and he already had the legal right of survivorship, he submitted that no further steps were required to perfect the inter vivos gift. 20 The judge also rejected this submission. She found that the events of December 2010 were not reliable evidence of Mary’s intention in Janu- ary 2008 when she transferred the property into joint tenancy. At best, she held, they reflected a change in Mary’s intention. For purposes of analysis she went on to assume that, as of December 2010, Mary intended to make a gift to John of a right of survivorship in the property. However, she did not accept John’s submission that nothing further was required to perfect the intended gift. 21 The judge noted that, pursuant to s. 59(3) of the Law and Equity Act, R.S.B.C. 1996, c. 253, contracts respecting land must be in writing to be enforceable. Citing Kooner v. Kooner (1979), 100 D.L.R. (3d) 76 (B.C. S.C.), she also noted that, to make a valid gift, a donor must have done everything that, according to the nature of the property, was necessary to be done to transfer the property and make the transfer binding on the donor. She went on to find that Mary’s statements in the December 2010 will and two–page document were insufficient to create any legal obligation with respect to the right of survivorship in the property. Rather, in her view they were mere promises: [140] In my opinion, the Form A transfer, signed by Mary on January 28, 2008, is not sufficient to perfect a gift of the survivorship interest in W. 48th to John, because (as I have found) Mary did not intend at that time to make such a gift to John. Assuming that, as of December 2010, Mary did intend to make such a gift to John, she did not take McKendry v. McKendry Dickson J.A. 7

the necessary steps to perfect the gift. The statements in the Decem- ber 2010 Will and the December 16 Letter are insufficient to create any legal obligation; they are (at best) mere promises to make a gift to John. I agree with Mr. Lee that, in order for Mary to make a valid gift to John of the survivorship interest in W. 48th, Mary would have been required to execute a written deed of gift under seal (obviating the need for consideration), confirming an immediate gift of the survivorship interest in W. 48th. Short of this, there was no legally binding gift, and I so find. [141] In summary, I find that John has failed to discharge the burden on him to show that, on January 28, 2008, Mary intended to make an immediate gift to him of the survivorship interest in W. 48th. If, on December 16, 2010, Mary intended to make such a gift, she failed to take the steps necessary to make a valid, legally binding gift. [142] The result is the plaintiffs are, accordingly, entitled to a declaration that John holds W. 48th in trust for Mary’s estate.

Positions of the Parties 22 The contentious aspect of the judgment is the judge’s finding that an executed deed of gift under seal was required to perfect a gift to John of the right of survivorship in the property. 23 On appeal, John contends that Mary’s actual intention is the governing consideration. In his submission, that intention was clear: to give him survivorship rights when she transferred the property into joint tenancy in January 2008. By late 2010, he submits, Mary also intended that his survivorship rights would be unfettered by any trust obligation and he would receive the entire beneficial interest in the property upon her death. However, contrary to the judge’s finding, John says nothing further was required to perfect the gift because he already held legal title. 24 Margaret, Jean and Alexis respond that the judge’s conclusions are fully justified in law and on the evidence. In their submission, Mary’s intention in January 2008 when she transferred the property into joint tenancy governs the outcome of the case. At the time of the transfer, she clearly did not intend to gift to John a beneficial right of survivorship in the property. Rather, she intended to retain the beneficial interest in the property for herself and continue to deal with it as she saw fit. 25 According to Margaret, Jean and Alexis, if Mary’s intention changed in 2010, she failed to make a legally binding gift to John. This is so, they say, because she did not deliver the gift to him, immediately and irrevo- cably, by binding means such as a deed under seal. In consequence, in 8 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

their submission, although Mary may have wished to do so, she did not perfect the gift to John before she died. In consequence, he continues to hold the beneficial interest in the property in trust for Mary’s estate.

Discussion 26 The legal principles that apply are straightforward. A brief summary of those principles and their application on this appeal follows below.

Joint Tenancy and the Right of Survivorship 27 Joint tenancy is a form of concurrent property ownership. When the “four unities” of title, interest, time and possession are present, co–owners hold an equal interest in property as a unified whole: Zeligs Estate v. Janes, 2016 BCCA 280 (B.C. C.A.) at para. 38. However, parties may hold legal title to property as joint tenants while beneficial ownership is held differently. For example, a mother and son may own real property as joint tenants in law while the mother alone owns the beneficial interest. In such circumstances, as Rothstein J. noted in Pecore v. Pecore, 2007 SCC 17 (S.C.C.) at para. 4: . . . The beneficial owner of property has been described as “the real owner of property even though it is in someone else’s name”: [cita- tion omitted] . . . 28 The principal characteristic of joint tenancy is the right of survivorship. When a joint tenant dies, his or her interest in property is extin- guished. If there is more than one surviving joint tenant, they continue to hold the property as joint tenants. The last surviving joint tenant takes full ownership of the property. 29 So long as the requirements of a binding gift are met, the owner of property may, during his or her lifetime, make an immediate gift of a joint tenancy, including the right of survivorship. This is so regardless of whether the donee of the gift is to hold it for the benefit of the donor while he or she is alive. When gifted inter vivos, the right of survivorship is a form of expectancy regarding the future. It is a right to what is left of the jointly–held interest, if anything, when the donor dies: Simcoff v. Simcoff, 2009 MBCA 80 (Man. C.A.) at para. 64; Bergen v. Bergen, 2013 BCCA 492 (B.C. C.A.) at para. 37; Pecore at paras. 45–53. McKendry v. McKendry Dickson J.A. 9

30 A donor may gift the right of survivorship, but continue to deal freely with property throughout his or her lifetime. In Simcoff, Steel J.A. explained why: 64 Simply, and conceptually, the fact that a “complete gift” may have been given and that this gift included a right of survivorship does not, prima facie, prevent a donor from dealing with the retained joint interest while alive. The right of survivorship is only to what is left. Accordingly, if one joint owner drains a bank account (in the case of personal property) or severs a joint tenancy (in the case of real property), there is nothing in the right of survivorship itself that somehow prevents this. In commenting on the issue of survivorship in Pecore, Rothstein J. wrote (at para. 50): Some judges have found that a gift of survivorship cannot be a complete and perfect inter vivos gift because of the ability of the transferor to drain a joint account prior to his or her death: see e.g. Hodgins J.A.’s dissent in Re Reid [1921, 64 D.L.R. 598 (Ont. C.A.)]. Like the Ontario Court of Appeal in Re Reid, at p. 608, and Edwards v. Bradley, [[1956] O.R. 225] at p. 234, I would reject this view. The nature of a joint account is that the balance will fluctuate over time. The gift in these circumstances is the transferee’s survivorship interest in the account balance – whatever it may be – at the time of the transferor’s death, not to any particular amount. [Emphasis in original.]

Gifts and Resulting Trusts 31 A gift is a gratuitous transfer made without consideration. Two requirements must be met for an inter vivos gift to be legally binding: the donor must have intended to make a gift and must have delivered the subject matter to the donee. The intention of the donor at the time of the transfer is the governing consideration. In addition, the donor must have done everything necessary, according to the nature of the property, to transfer it to the donee and render the settlement legally binding on him or her: Kooner at 79–80; Pecore at para. 5. 32 A gift may be delivered in various manners. For example, a donor may choose to transfer property directly to a donee or a trustee, or may retain possession and make a declaration of trust. Once a gift is given, the donor cannot retract it. If it is incomplete, however, the court will not perfect a gift. Accordingly, where the gift rests merely in a promise or 10 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

unfulfilled intention, the court will not compel an intending donor to follow through with making the gift: Kooner at 79–80; Pecore at para. 56. 33 The standard for proving a gift is the usual civil standard of a balance of probabilities: Singh Estate (Trustee of) v. Shandil, 2007 BCCA 303 (B.C. C.A.) at paras. 24–27. 34 The intention of a person who transfers property gratuitously to another is sometimes difficult to determine. This is particularly true where the transferor is deceased. For this reason, common law rules have developed to guide the court’s inquiry. In Pecore, the Supreme Court of Can- ada explained those rules and how they apply to property held in joint tenancy. 35 In summary, a resulting trust arises when title to property is held in the name of a party who gave no value for it. In such circumstances, that party is obliged to return the property to the original title owner unless he or she can establish it was given as a gift. In the case of a gratuitous transfer, a rebuttable presumption of resulting trust applies when the transfer is challenged. The judge commences the inquiry with the presumption, weighs all of the evidence, and attempts to ascertain the actual intention of the transferor. The governing consideration is the transferor’s actual intention. The presumption of resulting trust determines the result only where there is insufficient evidence to rebut the presumption on a balance of probabilities: Pecore at paras. 20, 22–25, 44; Kerr v. Baranow, 2011 SCC 10 (S.C.C.) at para. 18. 36 When legal title to property is transferred gratuitously and a resulting trust arises, the right of survivorship is held on trust by the transferee unless otherwise established. In Bergen, Newbury J.A. explained why: [42] . . . Consistent with this, the authors of Waters [Donovan W.M. Waters, Mark R. Gillen, & Lionel D. Smith, Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Carswell, 2012)] in the most recent edition (post–Pecore) state: If A supplies the purchase money and conveyance is taken in the joint names of A and B, B during the joint lives will hold his interest for A, B will also hold his right of survivorship — again by way of resulting trust for A’s estate, because that right is merely one aspect of B’s interest. In other words, the starting point is that B holds all of his interest on resulting trust for A, or A’s estate. How- ever, evidence may show that, while A intended B to hold his interest for A during the joint lives, it was also A’s intention that, should he (A) predecease, B should take McKendry v. McKendry Dickson J.A. 11

the benefit of the property. The presumption of resulting trust would then be partially rebutted, in relation to the situation that has arisen, so that B would not hold his interest (now a sole interest and not a joint tenancy) on resulting trust. He would hold it for his own benefit. [At 405; emphasis added.]

Transfers of Land 37 Academics have sometimes questioned whether the presumption of resulting trust applies to gratuitous transfers of land, although there is authority from this Court to support the view that it does: Fuller v. Fuller Estate, 2010 BCCA 421 (B.C. C.A.) at para. 43. In this case, it is unnecessary to decide the issue because there is clear evidence of Mary’s intentions. Regardless, transfers of land are subject to statute. In particular, the Law and Equity Act and the Land Title Act, R.S.B.C. 1996, c. 250, Part 12 both apply to transfers of real property. Pursuant to the Law and Equity Act, contracts respecting land must be in writing to be enforceable. Pursuant to the Land Title Act, transfers of land must be in a prescribed or otherwise acceptable form and registered against title to land. 38 The judge referred to s. 59(3) of the Law and Equity Act, but not s. 59(1), in reaching her conclusion. In my view, both ss. 59(1) and (3) of the Act are relevant. They provide, in part: 59 (1) In this section, “disposition” does not include (a) the creation, assignment or renunciation of an interest under a trust, ...... (3) A contract respecting land or a disposition of land is not enforceable unless (a) there is, in a writing signed by the party to be charged or by that party’s agent, both an indication that it has been made and a reasonable indication of the subject matter, ...

Application of Governing Principles 39 The parties agree, as I do, that Mary’s actual intention is the governing consideration. In the light of the evidence, the presumption of resulting trust is not required to determine the outcome of the case. This is so because Mary’s intentions in 2008 and 2010 are manifest and unambiguous. The only real question is their legal effect. 12 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

40 In January 2008, when Mary gratuitously transferred legal title to the property to John in joint tenancy, she did so with the intent that he hold the property in trust. The judge found that she intended to retain the entire beneficial interest, including the right of survivorship, for herself and her estate: paras. 124–133. Although John did not sign the trust declaration prepared by counsel, Mary’s intentions were clear and unambiguous. In consequence, while John held legal title with Mary jointly from Janu- ary 2008 onward, he held all of the beneficial interest, including survivorship rights, in trust. 41 Unless something changed, upon Mary’s death John would have continued to hold legal title to the property only and to hold the beneficial interest in trust. However, in December 2010 something did change. As evidenced by the November note and the two–page document prepared by her lawyer, Mary unambiguously renounced her beneficial interest in the right of survivorship in John’s favour should he survive her. In doing so, she clearly intended to make an immediate inter vivos gift of that incident of the joint tenancy to John. As explained in Simcoff, the gift was to whatever remained when Mary died. 42 Pursuant to s. 59(1) of the Law and Equity Act, Mary’s renunciation of her beneficial interest in the right to survivorship did not amount to a “disposition” of land. Accordingly, the requirements of s. 59(3) did not apply. In addition, and in any event, the two–page document in which Mary renounced her interest was a signed writing as contemplated by s. 59(3). 43 Given that she had previously transferred legal title to the property to John in joint tenancy, Mary did everything necessary in December 2010 to give her beneficial interest to John, bearing in mind the nature of that interest. Her intention was made manifest in the signed two–page document her lawyer prepared and no further act of delivery was required because of the existing joint tenancy. In particular, nothing more would have been gained had Mary executed a deed of gift under seal, given her clear and formally expressed intention. The immediate inter vivos gift was complete and binding. In my view, Mary’s intention should prevail.

Conclusion 44 It follows that I conclude the judge erred in declaring John holds the property in trust for Mary’s estate. That being so, it was unnecessary to vary Mary’s will. In consequence, I would allow the appeal and dismiss both actions. McKendry v. McKendry Garson J.A. 13

Groberman J.A.:

I agree.

Garson J.A.:

I agree. Appeal allowed. 14 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

[Indexed as: Birtzu v. McCron] Julian Birtzu and Valentin Birtzu (Plaintiffs) and Constance McCron and the Estate of Constantin Birtzu (Defendants) Ontario Superior Court of Justice Docket: CV-11-3278-00 2017 ONSC 1420 Bloom J. Judgment: March 2, 2017 Estates and trusts –––– Estates — Will challenges — Testamentary capacity — Practice and procedure — General principles –––– Statute of limitations — Father died April 29, 2009 and left his entire estate to his daughter C under will executed in 2006 — Plaintiffs JB and VB were deceased’s sons — Plaintiffs brought action for order setting aside will and related orders as to disposition of property — Issue arose as to application of limitation period when defendants claimed limitation period expired before statement of claim was issued — Defendants claimed that limitation period expired before statement of claim was issued on August 18, 2011, either two years after father’s death, two years after letter sent by JB’s solicitors to C on July 11, 2009, or two years after deadline spelled out in that letter for C to turn over estate assets to JB or face legal action — Plaintiffs claimed limitation period ran from July 8, 2010, date of letter from C’s solicitor denying her consent to release father’s medical records for five years preceding his death — Action was statute-barred since statement of claim was not issued until August 18, 2011 which was not within two-year limitation period prescribed by Limitations Act, 2002 — Under s. 5(1)(b) of Act, limitation period expired at latest two years after July 22, 2009 — On July 17, 2009 JB’s solicitor informed C that JB knew his father had suffered from dementia for many years prior to his death and thus did not have capacity to execute will on January 24, 2006, so will could not stand — Same letter from solicitor also stated that unless C turned over assets of estate by July 22, 2009, JB would institute legal proceedings — Under s. 5(1)(b), when limitation period started to run was date of that deadline, predicated as it was on CB’s knowledge of his father’s dementia — Running of limitations clock was not postponed by provision of copy of letter from father’s family doctor, dated July 25, 2006 which stated that father was mentally competent to designate power of attorney for financial and medical purposes, which plaintiffs claimed caused JB, over time, to recall particular events relating to his father’s capacity, causing request for medical records that resulted in denial of medical records which ripened cause of action under s. 5(1)(b) — Once plaintiffs were aware that 2006 will Birtzu v. McCron 15 denied them any gift and that their father suffered from dementia, as reasonable persons they ought to have known of their claim. Cases considered by Bloom J.: Banks v. Goodfellow (1870), L.R. 5 Q.B. 549, [1861-73] All E.R. Rep. 47, [1871] L.R. 11 Eq. 472, 39 L.J.Q.B. 237, 22 L.T. 813 (Eng. Q.B.) — followed Johnson v. Huchkewich (2010), 2010 ONSC 6002, 2010 CarswellOnt 8157, 62 E.T.R. (3d) 144, [2010] O.J. No. 4586 (Ont. S.C.J.) — considered Leibel v. Leibel (2014), 2014 ONSC 4516, 2014 CarswellOnt 11102, 2 E.T.R. (4th) 268, [2014] O.J. No. 3745 (Ont. S.C.J.[Estates List]) — considered Scott v. Cousins (2001), 2001 CarswellOnt 50, 37 E.T.R. (2d) 113, [2001] O.J. No. 19, [2001] O.T.C. 9 (Ont. S.C.J.) — followed Statutes considered: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B Generally — referred to s. 4 — considered s. 5(1) — considered s. 5(1)(b) — considered s. 5(2) — considered Succession Law Reform Act, R.S.O. 1990, c. S.26 s. 47(1) — considered Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 2.01 — considered R. 2.03 — considered R. 5.03(3) — considered R. 5.03(3)(b) — referred to R. 11.02 — referred to R. 26.01 — considered R. 75.03 — considered R. 75.03(1) — considered

ACTION for order setting aside will and related orders as to disposition of deceased’s property.

Peter M. Callahan, for Plaintiffs Ian M. Hull, Doreen Lok Yin So, for Defendants 16 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Bloom J.: I. INTRODUCTION 1 The Plaintiffs seek the following relief in the action before me: (1) an order setting aside the will of Constantin Birtzu signed January 24, 2006 under which he left his entire estate after payment of debts to his daughter Constance McCron, who was also named the sole executor; (2) a declaration that the Estate of Constantin Birtzu (hereinafter “Constantin”) is the beneficial owner of the property known as 51 Samson Crescent, To- ronto, Ontario as to at least a one third share on the basis of a constructive trust, or in the alternative an order that the full amount paid by Con- stantin toward an addition to that premises be repaid by Constance McCron to the estate; (3) an accounting of assets of Constantin disposed of by Constance McCron both before and after his death; (4) an order directing how the estate is to be distributed; and (5) an order that pre- judgement and post-judgement interest be paid from the share of the estate to which Constance McCron is entitled, to the Plaintiffs on amounts found owing to them from the estate.

II. FACTS NOT IN DISPUTE 2 Constantin was born on March 4, 1923. He and his wife, Maria Birtzu, had three children, Julian Birtzu, Valentin Birtzu, and Constance McCron (“Connie”). On June 19, 2005, Maria passed away. On April 29, 2009, Constantin passed away survived by his three children and 7 grandchildren on the date of his death, namely Nicole Swift, Rebecca Birtzu, Michael Birtzu, Gregory Birtzu, Ashley McCron, Andra McCron, and Alysa McCron. 3 On August 18, 2011 the action at bar was commenced. 4 Karl Schwind is Constantin and Maria’s life-long friend as well as the family’s. 5 On February 12, 1976 Constantin executed a will under which he appointed his wife as his estate trustee, failing which Julian would be so appointed. He left his estate to his wife, and if she predeceased him, to his three children equally. 6 On September 4, 1990, Constantin executed a new will. It named Ma- ria as the Estate Trustee and Connie as the alternate Estate Trustee. In the event that Maria predeceased Constantin, Connie is directed to hold Con- stantin’s home, together with all the furniture therein, for her own benefit for ten years; sell the home and divide the proceeds among the grandchil- Birtzu v. McCron Bloom J. 17

dren of Constantin; and divide the residue of the estate among those grandchildren. 7 In or about 1999, Maria’s health began to decline as a result of Alzheimer’s disease. On February 14, 2003 she was admitted to a nursing home known as Extendicare Guildwood. Constantin independently arranged for the sale of the matrimonial home in which they had lived at 65 Kencliff Crescent in Toronto. The sale took place on September 25, 2003. 8 On or about October 5, 2003, Constantin moved to a basement apartment located at 7 Saunders Road in Scarborough in order to live near Maria’s care facility. 9 In or about June of 2005, Constantin moved to Connie’s home located at 51 Samson Crescent in Toronto where he resided with her and her family until his death. Neither Julian nor Valentin objected when they were advised of Constantin’s plans to move into Connie’s Samson home. 10 To accommodate Constantin an addition was built to the Samson home, Neither Julian nor Valentin objected to the construction of the addition which began in February of March of 2005. 11 Julian believed that Constantin was well enough to manage his own financial affairs in 2002. 12 Medical records indicate that Constantin began to show signs of early dementia and short term memory loss in or about June of 2002. Dr. Law- rence Zoberman was Constantin’s family doctor for four years before he noticed that Constantin was exhibiting signs of early dementia and short term memory loss in or about June of 2002. 13 Connie and her family lived approximately 10 kilometres away from Maria and Constantin while they lived at the Kencliff home. 14 Connie accompanied Constantin to various medical appointments as did her daughter, Alysa, Connie assisted Constantin by driving him to various locations, including but not limited to medical appointments and the bank, after he was no longer able to renew his driver’s license in or about 2003. 15 On April 8, 2004, Constantin’s car, a 2000 Subaru, was transferred to Connie for an amount of $10.00. 16 Connie was Constantin’s primary caregiver during the latter years of his life. Alysa also assisted Connie in her care of Constantin during the latter years of his life. 18 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

17 Julian lived with Constantin for one year during the 1970’s. Julian and his family lived in the west end of Toronto while Constantin and Maria resided in the Kencliff home in Scarborough during the later part of the 1990’s. Julian lived a separate life from that of his parents while he resided in the west end of Toronto. Julian and his family lived in Mis- sissauga while Constantin lived with Connie. Constantin did not wish to live with Julian after his move to Connie’s home. Julian did not witness any acts of coercion by Connie in relation to the execution of the 2006 will. 18 In 1998 Valentin lived with Constantin and Maria in the Kencliff home. Valentin visited Constantin no more than two times every couple of months while Constantin lived in the basement apartment. 19 Valentin resided in Oshawa, Ontario while Constantin lived with Connie. 20 Valentin visited Constantin no more than 10 times in 2006, and less frequently thereafter. 21 In or about February of 2004 Constantin gave a gift of $10,000 to Valentin and at that time Valentin believed that Constantin had the requisite capacity to give him money. 22 On April 29, 2009 Constantin died with cash assets held in various bank accounts, and without other personal property of significant value. 23 In 2003 Connie had not been involved with Constantin’s banking transactions other than in driving him to the bank.

III. THE ISSUES 24 The case at bar raises four principal issues and a number of sub-issues. It is useful to understand what they are before embarking on a detailed discussion of the governing principles and of the application of those principles to the evidence. 25 The key issue is the validity of the 2006 will. That matter in turn raises three sub-issues:(a) whether the action was commenced within the applicable limitation period; (b) whether the Plaintiffs had standing to bring that action; and (c) whether the will was valid having regard to the challenge by the Plaintiffs on grounds of lack of testamentary capacity and undue influence. 26 A second issue raised is the claim that the estate was entitled to a declaration of entitlement to a least a one third beneficial share of the Samson property by way of constructive trust, or alternatively an order Birtzu v. McCron Bloom J. 19

that Connie repay to the estate the monetary contribution of Constantin to the addition to the Samson property. The analysis of this question raises two sub-issues: (a) whether the question need not be answered because its answer has no practical effect on the outcome of the action; and (b) the governing principles relating to the finding of a constructive trust and their application to the evidence. 27 A third issue is the determination of the entitlement of the Plaintiffs to the accounting they seek regarding the disposition by Connie of her father’s assets both before and after his death. This issue raises two sub- issues: (a) whether the question need not be answered because its answer has no practical effect on the outcome of the action; and (b) the merits of the claim. 28 The last issue is how the estate is to be distributed.

IV. THE VALIDITY OF THE 2006 WILL A. Governing Principles (i) The Applicable Limitation Period 29 The Limitations Act, 2002, S.O. 2002, c. 24, Sched. B provides: BASIC LIMITATION PERIOD Basic limitation period 4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 2002, c. 24, Sched. B, s, 4. Discovery 5. (1) A claim is discovered on the earlier of, (a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to 20 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

have known of the matters referred to in clause (a). 2002, c. 24, Sched. B, s. 5 (1). Presumption (2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. 2002, c. 24, Sched. B, s. 5 (2). 30 In Leibel v. Leibel, 2014 ONSC 4516 (Ont. S.C.J.[Estates List]) at paras 50 to 53 Justice Greer discussed the application of those provisions to a challenge to the validity of a will: 50 In my view, the date from which the limitation under the Act began running, was the date of Eleanor’s death, June 4, 2011. See: Lawless v. Anderson, 2011 CarswellOnt 626 (C.A.) paras. 22 and 23 respecting the discoverability principle and how it is applied by the Court. As was noted by Mr. Justice D.M. Brown, at first instance in that case, at para. 58, 2010 ONSC 2723, “Limitation periods do not begin to run when one determines that a claim is winnable or viable; they begin to run when one discovers the material facts necessary to plead a reasonable cause of action.” Blake had enough material facts by July 21, 2011 to commence an action. 51 It seems to me that Blake, by early September 2013, decided that he had not received enough benefit under Eleanor’s Wills and he did not want to share the residue with Cody. He therefore launched his Application. 52 In my view, with the passage of the new Act in 2002, the Legisla- ture placed a two-year limitation on the bringing on of actions, subject to the discoverability principle, in order to prevent exactly what Blake is trying to do, that is, circumvent the limitation by claiming, late in time, that the 2011 Wills were invalid. To say that every next- of-kin has an innate right to bring on a will challenge at any time as long as there are assets still undistributed or those that can be traced, would put all Estate Trustees in peril of being sued at any time. There is a reason why the Legislature replaced the six-year limitation in favour of a two-year limitation. 53 Blake’s Application dated September 5, 2013, is more than two years after Eleanor’s death and I find it to be statute-barred.

(ii) Standing 31 The issue of standing has been raised by the Defendants. They contend that the Plaintiffs lack a financial interest in the matter requisite to give them standing. The Plaintiffs respond that the standing issue was not Birtzu v. McCron Bloom J. 21

pleaded, and that they had the requisite standing either under the 1976 will, under an assignment of their children’s rights under the 1990 will, or on an intestacy. In order to address the standing issue as the parties have so framed it, I must set out the governing principles. 32 In a leading textbook on civil procedure, Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 2d ed (Markham, On- tario: LexisNexis Canada Inc., 2014) at para 5.89 the learned authors set out the following principles relative to pleadings: First, pleadings define the issues for the action, both those that are in controversy and also those that are not disputed. The parameters of the action are defined by the issues raised by the pleadings, and a party is bound by his or her pleadings. A party is precluded at trial from leading evidence that is inconsistent or irrelevant when measured against the pleadings, and subject to the court’s power to grant amendments, a party cannot rely on a claim or defence not pleaded. 33 Rule 26.01 addresses the amendment of a pleading: GENERAL POWER OF COURT 26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. R.R.O. 1990, Reg. 194, r. 26.01. 34 Rule 5.03(3) addresses assignments of choses in action: Claim by Assignee of Chose in Action (3) In a proceeding by the assignee of a debt or other chose in action, the assignor shall be joined as a party unless, (a) the assignment is absolute and not by way of charge only; and (b) notice in writing has been given to the person liable in respect of the debt or chose in action that it has been assigned to the assignee. R.R.O. 1990, Reg. 194, r. 5.03(3). 35 Rules 2.01 and 2.03 bear upon the effect of non-compliance with the Rules: EFFECT OF NON-COMPLIANCE 2.01 (1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court, (a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or 22 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part. R.R.O. 1990, Reg. 194, r. 2.01 (1). (2) The court shall not set aside an originating process on the ground that the proceeding should have been commenced by an originating process other than the one employed. R.R.O. 1990, Reg. 194, r. 2.01 (2). COURT MAY DISPENSE WITH COMPLIANCE 2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time. R.R.O. 1990, Reg. 194, r. 2.03. 36 Rule 75.03 provides as follows: OBJECTION TO ISSUING CERTIFICATE OF APPOINTMENT Notice of Objection 75.03 (1) At any time before a certificate of appointment of estate trustee has been issued, any person who appears to have a financial interest in the estate may give notice of an objection by filing with the registrar or the Estate Registrar for Ontario a notice of objection (Form 75.1), signed by the person or the person’s lawyer, stating the nature of the interest and of the objection. O. Reg. 484/94, s. 12; O. Reg. 24/00, s. 16; O. Reg. 575/07, s. 1. 37 S. 47(1) of the Succession Law Reform Act states: Distribution of kin Issue 47. (1) Subject to subsection (2), where a person dies intestate in respect of property and leaves issue surviving him or her, the property shall be distributed, subject to the rights of the spouse, if any, equally among his or her issue who are of the nearest degree in which there are issue surviving him or her.

(iii) The Applicable Procedures and Burdens of Proof 38 in Scott v. Cousins, [2001] O.J. No. 19 (Ont. S.C.J.) at para 39 Justice Cullity set out the allocation of the burdens of proof in cases in which a will is attacked for lack of testamentary capacity and undue influence: The principles that I believe are established by the decision of the Supreme Court, and that are relevant here, can be stated as follows: Birtzu v. McCron Bloom J. 23

1. The person propounding the will has the legal burden of proof with respect to due execution, knowledge and approval and testamentary capacity. 2. A person opposing probate has the legal burden of proving undue influence. 3. The standard of proof on each of the above issues is the civil standard of proof on a balance of probabilities. 4. In attempting to discharge the burden of proof of knowledge and approval and testamentary capacity, the propounder of the will is aided by a rebuttable presumption. “Upon proof that the will was duly executed with the requisite formalities, after having been read over to or by a testator who appeared to understand it, it will generally be presumed that the testator knew and approved of the contents and had the necessary testamentary capacity.” (at page 227) 5. This presumption “simply casts an evidential burden on those attacking the will.” (ibid.) 6. The evidential burden can be satisfied by introducing evidence of suspicious circumstances - namely, “evidence which, if accepted, would tend to negative knowledge and approval or testamentary capacity. In this event, the legal burden reverts to the propounder.” (ibid.) 7. The existence of suspicious circumstances does not impose a higher standard of proof on the propounder of the will than the civil standard of proof on a balance of probabilities. How- ever, the extent of the proof required is proportionate to the gravity of the suspicion. 8. A well-grounded suspicion of undue influence will not, per se, discharge the burden of proving undue influence on those challenging the will: “... It has been authoritatively established that suspicious circumstances, even though they may raise a suspicion concerning the presence of fraud or undue influence, do no more than rebut the presumption to which I have referred. This requires the propounder of the will to prove knowledge and approval and testamentary capacity. The burden of proof with respect [to] and [sic] fraud and undue influence remains with those attacking the will.” (ibid.) 24 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

(iv) The Principles Governing Testamentary Capacity 39 In the leading decision of Banks v. Goodfellow (1870), [1861-73] All E.R. Rep. 47 (Eng. Q.B.), Coburn, C.J. defined testamentary capacity in the following terms at pp 56 and 57: ...It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to com- prehend and appreciate the claims to which he ought to give effect; and with a view to the latter object that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties; that no insane delusion shall influence his will on disposing of his property, and bring about a disposal of it which would not have been made otherwise. 40 Justice Corbett in Johnson v. Huchkewich, [2010] O.J. No. 4586 (Ont. S.C.J.) at paras 34, 35, and 46 elaborated on the effect of mental disorder on testamentary capacity: [34] The applicant notes that testamentary capacity is not the same thing as the capacity to manage one’s property or the capacity to con- fer a power of attorney. [18] I agree. This does not mean the test is “higher” for testamentary capacity; rather, it is different. Should this point need illustration, none better can be found than Justice Stach’s thoughtful discussion in Palahnuk v. Palahnuk Estate. [19] Justice Stach upheld a will made by an 80 year old testator who had been found incapable of caring for her own person or for her own property. The testator was cared for by a niece, under an agreement with the Public Guardian and Trustee. In coming to this conclusion, Jus- tice Stach found: The requirements for a testator to have a “sound disposing mind” in order to make a valid will include the following; • The testator must understand the nature and effect of a will; • The testator must recollect the nature and extent of her property; • The testator must understand the extent of what she is giving under the will; • The testator must remember the persons she might be expected to benefit under her will; • The testator, where applicable, must understand the nature of the claims that may be made by a person she is excluding from the will.[20] Birtzu v. McCron Bloom J. 25

[35] Isolated memory or other cognitive deficits do not establish lack of testamentary capacity: Such things as imperfect memory, inability to recollect names and even extreme imbecility, do not necessarily deprive a person of testamentary capacity. The real question is whether the testator’s mind and memory are suffi- ciently sound to enable him or her to appreciate the nature of the property he was bequeathing, the manner of distrib- uting it and the objects of his or her bounty.[21] [46] Care must be taken in reading the physicians’ clinical notes or in interpreting their diagnoses. Diagnosing someone as having “dementia” does not mean the person is “demented”. Diagnosing someone as having Alzheimer’s does not mean the person lacks capacity (though it may foretell a loss of capacity if the disease progresses as expected). To leap from an initial diagnosis to a conclusion of legal incapacity is unwarranted and very dangerous reasoning. I reject this tine of argument.

(v) The Principles Governing Undue Influence 41 Justice Cullity in Scott v. Cousins, supra at paras 112 to 115 described what in law constitutes undue influence: Undue influence 112 It is settled law that undue influence sufficient to invalidate a will extends a considerable distance beyond an exercise of significant influence - or persuasion - on a testator. It is also clear that the possi- bility of its existence is not excluded by a finding of knowledge and approval. “To be undue influence in the eye of the law there must be - to sum it up in a word - coercion. It must not be a case in which a person has been induced by [strong relationships] to come to a conclusion that he or she will make a will in a particular person’s favour, because if the testator has only been persuaded or induced by considerations which you may condemn, really and truly to intend to give his property to another, though you may disapprove of the act, yet it is strictly legitimate in the sense of its being legal. It is only when the will of the person who becomes a testator is coerced into doing that which he or she does not desire to do, that it is undue influence.” (Wingrove v. Wingrove (1885), 11 P.D. 81 (P.D.), at page 82.) 113 The presumptions in favour of undue influence that arise out of certain family relationships and that are applied to various kinds of 26 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

transactions inter vivos play no part in the law of wills. The persons against whom the presumptions arise in such transactions are typically those that a testator might naturally wish to share in the estate. Such persons are entitled to press what they perceive to be their moral claims. The following comment in Williams and Mortimer, Executors, Administrators and Probate, (17th edition, 1993), at page 184 on the passage quoted above from Wingrove v. Wingrove is, I believe, an accurate statement: Thus undue influence is not bad influence but coercion. Persuasion and advice do not amount to undue influence so long as the free volition of the testator to accept or reject them is not invaded. Appeals to the affections or ties of kindred, to the sentiment of gratitude for past services, or pity for future destitution or the like may fairly be pressed on the testator. The testator may be led but not driven and his will must be the offspring of his own volition, not the record of someone else’s/There is no undue influence unless the testator if he could speak his wishes would say “this is not my wish but I must do it. 114 In determining whether undue influence has been established by circumstantial evidence, courts have traditionally looked to such matters as the willingness or disposition of the person alleged to have exercised it, whether an opportunity to do so existed and the vulnerability of the testator or testatrix. The degree of pressure that would be required to coerce a person of Reta’s age and state of mental confusion is likely to be significantly less than that which would have the same effect on persons in full possession of their faculties. Dr. Shul- man testified to Reta’s vulnerability in this respect. The testatrix does not have to be threatened or terrorized; effective domination of her will by that of another is sufficient: Re Crompton; Crompton v. Wil- liams, [1938] O.R. 543 (H.C), at page 583. This, I believe, is a consideration of no little importance in the present case as well as in the increasing number of those involving wills made by persons of advanced age. Other matters that have been regarded as relevant, within limits, are the absence of moral claims of the beneficiaries under the will or of other reasons why the deceased should have chosen to benefit them. The fact that the will departs radically from the dispositive pattern of previous wills has also been regarded as having some pro- bative force. 115 Most of the matters I have referred to are present to some extent in this case. If the doctrine of suspicious circumstances had any part to play in the analysis of this issue, I would find that the circumstances certainly arouse my suspicion. As I have indicated, the doc- Birtzu v. McCron Bloom J. 27

trine, as such, has no application to undue influence; the question is whether, on the basis of all of the evidence, I am satisfied that the dispositive provisions of the will were procured by undue influence. By itself opportunity to do this is not sufficient. However, certainty or proof beyond reasonable doubt is not required. The standard is the civil standard and it may be satisfied by circumstantial evidence.

B. Application of those Principles (i) The Limitation Period 42 The limitations issue before me is whether the action at bar was commenced within the two year limitation period prescribed by the Limita- tions Act, 2002. 43 Although the Defendants also argued that the Plaintiffs had not even pleaded undue influence in their statement of claim, I reject this argument. In paragraph 26. of the statement of claim the Plaintiffs state that they “dispute the validity of the 2006 Will.” That paragraph goes on to refer to an absence of a “sound mind” at the date of the will, but in my view there is no reason to construe the dispute of the validity of the will as limited to an allegation of lack of testamentary capacity. 44 In The Law of Civil Procedure in Ontario, 2d ed, supra at para 5.109 the learned authors state, “It is not necessary for a pleader to put a legal name to the claim or defence or to plead a formula of legal elements.” The language of the statement of claim captured both lack of testamentary capacity and undue influence. 45 Moreover, the proceeding was conducted in a way which did not prejudice the Defendants in their defense against the claim of undue influence; therefore, I would have granted an amendment under Rule 26.01 (reproduced above) to the statement of claim to include an explicit plea of undue influence, had such an amendment been necessary. 46 I will now address the substance of the limitations argument. The De- fendants have raised the limitations issue, and for that reason I will set out their argument first. They contend that the limitation period expired before the statement of claim was issued on August 18, 2011. Specifi- cally, the Defendants have argued in the alternative that the limitation period expired two years after the death of Constantin on April 29, 2009; that it expired two years after exhibit 15, the letter of July 17, 2009 forwarded on behalf of Julian Birtzu by his solicitors to Mr. Allan Keith, solicitor for Connie McCron; or in the third alternative that it expired two 28 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

years after July 22, 2009, the deadline by which according to that letter Connie was to turn over the estate assets to Julian or face legal action. 47 The Plaintiffs response is that the limitation period in the case at bar is governed by s. 5(1)(b) of the Limitations Act, 2002 and ran from July 8, 2010, the date of exhibit 24, being the letter of Allan Keith denying his client’s consent to release the medical records of Constantin for the 5 years preceding death. The Plaintiffs argue that until the refusal to release the medical records demonstrated Connie’s duplicitousness in pro- curing the will, the Plaintiffs did not have a cause of action triggering the application of s. 5 (1)(b). In the alternative they argue that the limitation period ran from the winter of 2010, when Julian, as a reasonable person within s. 5 (1)(b), would have come to the conclusion that he had a cause of action based on his recollections of incidents showing his father’s dementia. In either case, contend the Plaintiffs, the statement of claim was issued within the mandatory two years. 48 On the basis of evidence which I will now review, I have come to the conclusion that on the application of s. 5(1)(b) the limitation period expired at latest two years after July 22, 2009, and thus the action is statute barred, since the statement of claim was not issued until August 18, 2011. 49 The parties agree that the limitations argument is to be analyzed based on ascribing the knowledge of Julian Birtzu to both Plaintiffs. In exhibit 15 dated July 17, 2009 Julian’s solicitor informs Connie’s that “Our client advises that Constantin Birtzu had suffered from dementia for many years prior to his death on April 29, 2009. Therefore, as Mr. Birtzu did not have capacity to execute a Last Will and Testament on January 24, 2006 the said Will cannot stand,” The letter also stated that unless Connie turned over the assets of the estate by July 22, 2009, Julian “would have no other option but to commence legal proceedings.” 50 It is clear to me that under s. 5(1)(b) at latest the limitation period started to run on the date of that deadline, predicated as it was on the knowledge of Constantin’s dementia. The Plaintiffs argue that the running of the limitations clock was postponed, because on July 21, 2009 in exhibit 16 Mr. Keith provided to Julian’s lawyer a copy of a letter from Constantin’s family doctor, Lawrence Zoberman, dated July 25, 2006 which stated that, in his opinion, Constantin was mentally competent to designate a power of attorney for financial and medical purposes. The Plaintiffs argue that over time Julian recollected events such as loss of consciousness, lapses of memory, and confused speech on the part of Birtzu v. McCron Bloom J. 29

Constantin; and that these recollections finally prompted the inquiry which resulted in the denial of the medical records which ripened the cause of action under s. 5(1)(b). I reject that line of reasoning; once the Plaintiffs were aware that the 2006 will denied them any gift and that the deceased suffered from dementia, as reasonable persons they ought to have known of their claim. 51 It may well be that the limitation period commenced running on the death of Constantin as envisaged in Leibel v. Leibel, supra, but in my analysis I have reviewed the matter in a more favourable light to the Plaintiffs. Based on either view, the action is statute barred. I will, however, go on to examine a number of other important issues, including the validity of the contested will.

(ii) Standing 52 Exhibit 25 is a document which purports to assign to the Plaintiffs the rights of their children under the 1990 will. It purports to be effective as of August 11, 2011. I accept the evidence of Valentin Birtzu that it was signed at the behest of the Plaintiffs by their children. There is agreement by the parties that it was executed in December of 2015 and formal notice of it was given in the same month. 53 The Defendants argue that the Plaintiffs lacked standing to bring the action at a bar, because they had no financial interest under the 1990 will which would be in force if the 2006 will were held invalid. Further, the Defendants argue that the assignment document did not solve this lack of standing, because it was invalid as made after the limitation period had run; was invalid as backdated; was defective because timely notice was not provided as required by Rule 5.03(b); and was not validated by the obtaining of an order under Rule 11.02. 54 I reject the Defendants’ standing arguments. The test for standing as reflected in Rule 75.03 is that a Plaintiff must appear to have a financial interest in the estate; the test requires simply an appearance of a financial interest not proof of one. The Plaintiffs appear to have a financial interest in the estate, since the 1976 will made each of them beneficiaries and they would also be beneficiaries on an intestacy by virtue of s. 47(1) of the Succession Law Reform Act. Under either of those two possible results, the Plaintiffs would have a financial interest; moreover, those two results were at the commencement of the action possible outcomes. Therefore, the Plaintiffs satisfy the standing test. 30 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

(iii) The Issues of Testamentary Capacity and Undue Influence 55 The heart of this proceeding is the challenge to the validity of the 2006 will by the Plaintiffs. Their argument is captured by paragraph 34. of their written argument which reads as follows: The Plaintiffs claim that the 2006 Will is invalid for two reasons. First, Constantin was not able to understand or appreciate the nature and consequences of entering into the 2006 Will. This is evidenced not only by the diagnosis of dementia, and the treatment of that along with additional mental instabilities, including depression, but also by the fact that he completely shut out both of his two sons, as well as his 7 grandchildren, from sharing in his Estate without any reason for doing so, and without any explanation being given. Second, Constan- tin was unduly influenced by Connie, who took advantage of him while he was vulnerable and, shuttling him off to her lawyer, caused him to execute a very brief Will which left her in full control of his Estate, and entitled to the full benefit thereof. 56 The Plaintiffs also argue at paragraph 39. of their written submissions that they presented at trial “more than ample evidence of suspicious circumstances as to rebut the presumption of” testamentary capacity. 57 The Defendants argue in paragraph 301. of their submissions that “subject to the issue of Constantin’s dementia, the remaining suspicious circumstances...are moderate, and consistent with realities of Constan- tin’s life.” In paragraphs 302. to 305. they answer the allegation of lack of testamentary capacity by asserting that the decision to leave the entire estate to Connie was based on a cogent rationale, namely “gratitude for Connie’s care, and for allowing him to live in her home”. 58 Respecting the allegation of undue influence, I have already addressed the pleading issue raised by the Defendants. As to the merits, the Defendants argue that the Plaintiffs have not discharged their evidentiary onus to prove undue influence by Connie on a balance of probabilities. In paragraph 343. of their submissions they state: [T]he degree of pressure that would be required to coerce an elderly person, in a state of mental confusion, is likely to be significantly less than that which would have an effect on a person in full possession of their faculties..., the Plaintiffs have failed to adduce even one illustration of evidence that may suggest any pressure on Connie’s part. 59 I have concluded that, despite the Plaintiffs’ discharge of the evidential burden to prove suspicious circumstances, the Defendants have proven testamentary capacity in accordance with the required burden of proof; and that the Plaintiffs have not proven undue influence in accor- Birtzu v. McCron Bloom J. 31

dance with the applicable burden of proof. I intend now to explain those conclusions. To do so I will make the necessary findings of fact from the evidence, and apply the principles of law examined above to those facts. 60 I have considered all of the evidence on the issues of testamentary capacity and undue influence. However, the key evidence on those issues is the testimony of the following witnesses: (1) Julian Birtzu; (2) Lynne Birtzu: (3) Valentin Birtzu; (4) Dr. Lawrence Zoberman; (5) Allan Keith; (6) Connie McCron; (7) Karl Schwind; (8) Derrick Norman; and (9) Dr. Kenneth Shulman. I intend to address the evidence of each of those witnesses.

Julian Birtzu 61 The witness testified that he believed that, while his father lived in the matrimonial home and the basement apartment, he was capable of han- dling his own finances. He testified that he believed that his father was self-sufficient while living in the apartment. 62 He further testified that he saw his father roughly once per month in 1999. In 2005 the rate may have been less. He saw him 3 times at most in 2006, once in 2007, once in 2008, and not at all in 2009. 63 He was aware that his father had not moved into Connie’s home under pressure from her. 64 His father had arguments with each of his sons, but nothing, in the witness’s view, would cause him to disown either son. 65 He visited his father about 20 times while he lived in the basement apartment. While his father lived there, he told Julian that he had fallen a couple of times. While living there, he broke into speaking German from English more than previously; German was a language he had spoken with his wife. 66 Connie and her daughters took his father to the doctor. They did not update Julian on his father’s medical condition or tell him that his father had been diagnosed with Alzheimer’s disease. 67 While in the basement apartment he lost his train of thought sporadi- cally in speaking in Julian’s presence. 68 I accept this evidence as factually correct. It was logical and internally consistent. 32 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Lynne Birtzu 69 Lynne Birtzu, Julian’s wife, testified that while living at the apartment on one occasion Constantin could not remember who Julian’s and her grandson was. She also testified that while living there he lost his train of thought in speech and sometimes broke into German while speaking English. I accept this evidence. It was logical and uncontradicted.

Valentin Birtzu 70 Valentin testified that after he moved to Lindsay (after 1999 and up to 2003) he saw his parents once or twice per month and sometimes less frequently because of his job. He saw his father more frequently when he was living in the basement apartment. 71 Just before his mother moved into the nursing home, in 2001 or 2002, his father was depressed. 72 Connie and her daughter, Alysa, assisted Constantin while he was still living in the matrimonial home and looking after his wife. 73 Constantin became more withdrawn and depressed when he lived in the apartment. Valentin visited his father in the apartment 10 to 12 times per year and stayed overnight a couple of times. His father became more forgetful while living there and sometimes wetted his bed. He also blacked out once while crossing a gas station premises during the period he lived at the apartment. 74 Connie did not report to him on his father’s medical condition, but did answer his questions on that subject. 75 His father told him that Connie and her husband were paying for the addition to their home. 76 His visits to his father after he moved to Connie’s home declined in frequency after his first year there. 77 His father never told him that he was displeased with him or his 2 children, or that he did not want to see them or Julian and his children. He knew of no reason why he and his children would inherit nothing under his father’s will. 78 His father was mentally competent to a point in 2006. He was mentally competent to give Valentin a gift of $10,000 in 2004 and $300 in 2006. 79 I accept Valentin’s evidence. He was straightforward in his testimony. Moreover, this evidence was logical. Birtzu v. McCron Bloom J. 33

Dr. Lawrence Zoberman 80 Dr. Zoberman was Constantin’s family doctor. He testified with the aid of his notes. Dr. Zoberman testified that Constantin had early dementia by October 31, 2003. By January 8, 2004 he had mild dementia and was depressed because his wife’s health was deteriorating. His note of November 11, 2004 shows that Dr. Barsky, a psychogeriatrician at Scar- borough General Hospital, had noted that Constantin had dementia and depression. I observe parenthetically that Dr. Barsky’s report of Novem- ber 4, 2004 noted dementia of the Alzheimer’s type. 81 Dr. Zoberman’s notes of November 25, 2004 show that the dementia had progressed to the point where Connie was to dole out his medications because of his confusion in taking them. His note of July 7, 2005 shows that Constantin had moved in with Connie, and that, even though he had dementia, he had an appropriate response to his wife’s death, accepting it in view of her ill health. 82 His note of February 9, 2006 shows that the dementia was worsening. 83 He wrote a note on July 25, 2006 to Allan Keith, the lawyer who had drafted the 2006 will, stating that Constantin could grant a power of attorney for financial and medical purposes. He was able to write this note despite the dementia, because as of the date of the note the dementia was largely reflected only in memory loss and had not progressed further. The memory loss was reflected in the need for Connie to dole out the medications. Constantin still had the ability to understand big things; his dementia was not compromising his understanding of his needs regarding finances and medical health. 84 in cross-examination he testified that his note of February 23, 2007 showed that the dementia had deteriorated, and that he had delusions and paranoia which were not present before this appointment. 85 His evidence continued in cross-examination. He testified that Connie was at the appointments after she had started doling out the medications because of the worsening dementia. She would be present in the inter- view room, not at the examination. She would, therefore, have understood her father’s medical condition. 86 Continuing in the cross-examination, he testified that as of the mini- mental status examination of January 8, 2004 Constantin clearly had early dementia. As of the November 2004 appointment where Connie was told to dole out his medications, Constantin had confusion as a result of moderately severe or severe dementia. The November 11, 2004 notes 34 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

record that Connie was present. Dr. Zoberman would have explained to her that her father was suffering from dementia and depression. 87 In continued cross-examination he testified that November 25, 2004 was the date that he felt that the dementia had deteriorated badly. At this appointment he explained to Connie that her father was suffering from dementia and likely he also mentioned depression. She was tasked with henceforth administering his medications. 88 From November 25, 2004 he would have been concerned that Con- stantin was not competent to appoint a power of attorney or make a will. At that date he was not competent to do either. 89 As of February 23, 2007 Connie would have known from him that Constantin was suffering from severe dementia. By November 2004 he would have made clear to her that he was suffering from dementia and depression. 90 Dr. Zoberman reminded the Court that he was a doctor not a lawyer. Further, he was not qualified by any ruling at the trial before me to give opinion evidence on testamentary capacity or capacity to appoint a power of attorney, questions which have an inevitable legal component. There- fore, while I accept that the witness was a truthful and reliable one, I do not rely on his opinions on whether Constantin was competent to appoint a power of attorney or make a will. I do, however, rely upon the medical observations and medical views he provided in support of those opinions.

Allan Keith 91 It is not disputed that Mr. Keith was the lawyer who drew up the 2006 will; and that he was chosen by Connie. Further, it is also agreed that she accompanied her father to his office on both January 16, 2006 when he gave instructions, and on January 24, 2006 when the will was signed. 92 Mr. Keith testified about the events on January 24, 2006. He gave the original will to Constantin to review, and told him to take his time in doing so. Before it was executed, he asked him if he understood the contents of the will and if he had any questions about it. He did understand the will and had no questions. Mr. Keith and his secretary witnessed Constantin’s signature of the will. 93 Constantin demonstrated no bizarre conduct in his dealings with Mr. Keith; if he had, Mr. Keith would not have acted on the matter. Mr. Keith did not suggest the obtaining of a medical opinion regarding Constantin’s competency to make the will before he acted, because he felt that Con- stantin was competent. Birtzu v. McCron Bloom J. 35

94 Mr. Keith did not ask Constantin’s age at the time of the preparation of the will. He did not know that Constantin had Alzheimer’s disease when he acted on the will matter; nor did he ask if there was a prior will. Knowing that Constantin suffered from dementia and depression would have been important considerations in his decision whether to undertake the will matter. 95 Constantin did not need assistance with climbing the stairs when he arrived to sign the will. 96 I accept this evidence of Mr. Keith as truthful and accurate. His evidence was clear and without internal inconsistencies. I do not place any reliance on a memorandum to file from his secretary dated January 16, 2006 and marked as exhibit 41, because it is unclear to what extent the content came from Constantin.

Connie McCron 97 The witness testified in examination-in-chief concerning her father’s mental condition. She stated that Dr. Zoberman never mentioned to her that her father had Alzheimer’s disease. Regarding the November 25, 2004 appointment with Dr. Zoberman, she stated that there was no discussion with Dr. Zoberman that she should dole out drugs for her father, nor was there a discussion of his having dementia. She also testified that in the period June 2005 to June 2007 she did not have discussions with Dr. Zoberman wherein he stated that he father had advanced dementia. She stated that in November of 2004 Dr. Zoberman said to her that her father had short term memory problems and that he would follow this issue. 98 In cross-examination she admitted to using her father’s bank card while he was in hospital after denying that she used it without his being present. She testified that her father never had dementia like her mother. He just had short term memory loss. He did not have cognitive difficulties until the end of 2008. 99 She agreed that when the 2006 will was made, neither Mr. Keith nor his secretary was told that Constantin had been suffering from dementia since 2002 because he was not suffering from dementia. 100 I do not accept the testimony of Connie concerning her father’s mental condition. I find that her credibility was fatally undermined by her denial of knowledge of her father’s dementia after the November 25, 2004 appointment with Dr. Zoberman. I have accepted his evidence of advising her of the dementia on that date, and his evidence that she 36 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

would have understood from him from November 2004 that her father had dementia. I also draw support in my finding against Connie’s credibility from her denial of using her father’s bank card, until she was con- fronted by the inevitable in cross-examination in relation to its use while he was in hospital.

Karl Schwind 101 The witness testified in examination-in-chief that he and his wife, Klara, were friends of Constantin and his wife. They often socialized before Maria’s illness. 102 His friendship continued with Constantin after the death of Maria. He spoke with Constantin at the basement apartment. Constantin told him that Connie was helping him and came to see him every day. 103 Mr. Schwind continued that he and his wife visited Constantin about once per month at the apartment. He observed no mental frailties in Con- stantin while he lived at the apartment. 104 When Constantin moved to Connie’s, Mr. Schwind and his wife visited Constantin about once per month there and maybe twice per month in the summer. That changed when Constantin got sick. 105 While Constantin was living in the basement apartment, he told the witness that he was going to move in with Connie. He told Mr. Schwind that his sons had had enough support from him, and that he was moving in with Connie and giving her everything. He did say at one point that he was going to leave everything to his grandchildren. He went back and forth as to what he would do; then he said that he would leave everything to Connie. 106 Constantin’s mental abilities started to weaken about a year and a half before he died; for example, he would ask a question and then ask the same question 15 minutes later. Before the end of 2007 he did not have mental frailties. His behaviour was not unusual. He was clean and well dressed. 107 He came to visit the witness on his own at the witness’s store when he was living at the apartment, and came with Connie when he was living with her. 108 There were arguments between Constantin and his 2 sons. He com- plained that they wanted his money. Birtzu v. McCron Bloom J. 37

109 As to the last 10 years of Constantin’s relationship with Connie, there were no incidents of conflict, and Constantin said that he felt well looked after when he was living with her. 110 In cross-examination the witness testified that he is not good with dates and never has been. He admitted that his memory was not as good as it once was. 111 He further stated that Constantin told him that he was very happy living with Connie. Constantin told him that he paid for the addition to Connie’s home, and did not loan the money for it to Connie. 112 He testified that Constantin deteriorated one year to one and one half years before his death; this deterioration took place while Constantin was living with Connie. 113 The witness was frank, logical, and calm. I accept his evidence with a caveat on the matter of dates. Respecting dates, I accept that his evidence was accurate within a reasonable margin of error, but on dates I will look for confirmation from other evidence.

Derrick Norman 114 The witness testified that he was a neighbour of Connie’s. He stated that, when Constantin moved in with Connie, he would speak to the witness almost every day. After he moved in with Connie, the witness did not notice anything unusual about his mental abilities. He and the witness spoke English to each other. 115 The witness had fixed the carport at Constantin’s matrimonial home. While Constantin was living there he said that he was going to leave everything to Connie. 116 Mr. Norman’s evidence was straightforward and clear; I accept it.

Dr. Kenneth Shulman 117 In a ruling at trial on January 25, 2016 I held that the witness was qualified to give certain opinion evidence. That evidence was to be a retroactive assessment of the testamentary capacity of Constantin and of his susceptibility to undue influence at the time of the execution of the will signed on January 24, 2006. Further, I ruled that his testimony was to be his evidence, although he was permitted to adopt in that testimony parts of his written report. 118 He testified in examination-in- chief that, if the note to file by Mr. Keith’s secretary and the note by Dr. Zoberman on Constantin’s capacity 38 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

to appoint a power of attorney were accepted by me, then Constantin had testamentary capacity despite his dementia. For reasons already explained I put no reliance on either document. 119 The witness further testified that capacities are time specific. He stated that a person’s having dementia does not itself tell you anything about his capacity to make a will. Simply because a person has dementia does not mean that he or she is incapable of making a will. If, as asserted in the memorandum to file by Mr. Keith’s secretary, the testator’s daughter was caring for him and his sons were not close to him, the testator was not delusional and had testamentary capacity from a clinical point of view. 120 He further testified that a dementia diagnosis is suspicious circumstances from a legal conceptual point of view. 121 As to Dr. Zoberman’s internally contradictory evidence regarding Constantin’s capacity, general practitioners such as Dr. Zoberman are not good at capacity assessments. 122 In cross-examination the witness testified that he had examined the relevant medical records of Constantin which were before the Court, and saw no documentation that indicated that the testator’s dementia was so severe that he could not have had testatmentary capacity. 123 The criteria for assessment of testamentary capacity applied by the witness were: (1) what is the likelihood that the testator knew what the will was; (2) what is the likelihood that he knew generally what his assets were; (3) what is the likelihood that he knew there were persons who had a claim on those assets- his three children; (4) what is the likelihood that he knew about the rift with the boys; (5) what is the likelihood that he knew the rationale for the change of will; and (6) what is the likelihood that there was a delusion that his sons were ignoring him. 124 The witness further testified that Constantin was susceptible to undue influence because he was 84, and suffering from dementia and depression. 125 Connie made the arrangements for the will’s being signed. To find undue influence, the judge would have to conclude that the testator’s wishes were subverted by her wishes. 126 He stated that it is for the judge to be satisfied whether the criteria in law are met regarding testamentary capacity and undue influence. His opinions on those matters are clinical opinions. Birtzu v. McCron Bloom J. 39

127 I find that Dr. Shulman’s testimony was frank, professional, and logical. He exhibited valuable expertise in the area in which he was qualified to testify.

Application of the Law to the Facts 128 The Plaintiffs have demonstrated the existence of suspicious circumstances in relation to the execution of the 2006 will. The dementia of the testator at the time he signed the will as explained in the testimony of Dr. Zoberman, satisfies me in that regard. 129 However, the Defendants have discharged their onus to prove testamentary capacity in accordance with the civil standard of proof. 130 By November 25, 2004 according to Dr. Zoberman Constantin’s memory had deteriorated as result of the dementia to the point where Connie had to dole out his medications. However, also according to Dr. Zoberman as of July 25, 2006 his dementia was largely confined to memory loss. He still understood the big things, including his needs regarding finances and medical health. 131 Dr. Zoberman’s evidence on that point squares with the testimony of Karl Schwind. Mr. Schwind testified that Constantin was not noticeably affected in his mental functioning until at most a year and half before his death on April 29, 2009. Even allowing for reasonable error in date, taking the demonstration of frailties further back in time, Mr. Schwind’s evidence is consistent with Constantin’s having the general ability to deal with big things of which Dr. Zoberman spoke. 132 Mr. Schwind also gave important insight into the rationale for Con- stantin’s leaving his estate entirely to Connie. It was in gratitude for her care and assistance to him in the last years of his life, while his sons were not acting in a similar manner. Derrick Norman’s evidence was also consistent with Mr. Schwind’s testimony on this matter. 133 Mr. Keith’s testimony was consistent with Dr. Zoberman’s assessment of Constantin’s capacity. As of the date of the execution of the will Mr. Keith saw no bizarre behaviour on Constantin’s part. 134 The evidence of Julian Birtzu, Valentin Birtzu, and Lynne Birtzu does not contradict these conclusions from the evidence, but is consistent with them. 135 Further, I find additional support in the evidence of Dr. Shulman who testified both that dementia is not inconsistent with testamentary capacity and that he saw nothing in the medical records of Constantin that indi- 40 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

cated that he could not have had testamentary capacity when the will was executed. Justice Corbett’s reasoning in Johnson v. Huchkewich, supra supports that analysis of dementia not precluding testamentary capacity. 136 In coming to my conclusion on testamentary capacity I have had regard also to the six clinical factors listed by Dr. Shulman and the legal factors listed in the case law I have examined, particularly Banks v. Goodfellow, supra, Constantin knew that he was making a will giving his entire estate to his daughter. He did so to reward her for her care and assistance; he felt that he had done enough for his sons financially as stated by Mr. Schwind. 137 The Plaintiffs have not discharged their onus to prove undue influence. Constantin was susceptible to undue influence by reason of his age, dementia, and depression as noted by Dr. Shulman. Moreover, Connie made the arrangements to have the will drafted and was the sole beneficiary. However, the evidence falls far short of establishing the elements set out by the case law I have previously reviewed. There is no proof of coercion by Connie, nor is there proof that she subverted the testator’s wishes to borrow phraseology from Dr. Shulman. The testator’s gratitude to her and the absence of similar sentiments toward his sons explain why he made the will in question.

V. CONCLUSION AND REMAINING ISSUES 138 I, therefore, uphold the validity of the 2006 will. The remaining issues need not be addressed because the estate passes to Connie entirely under the will. 139 For the reasons I have set out I dismiss the action at bar.

VI. COSTS 140 I will receive written submissions from the parties as to costs if they cannot agree on this issue. They are to be of no more than 5 pages, excluding a bill of costs. The Defendants are to serve and file their submissions within two weeks after release of these reasons. The Plaintiffs are to serve and file their submissions within two weeks of service of the Defendants’ submissions. There shall be no reply. Action dismissed. Warde v. Slatter 41

[Indexed as: Warde v. Slatter] Naomi Elaine Warde also known as Naomi Elaine Slatter also known as Elaine Slatter (Claimant) and Brian Grant Slatter, Fern Slatter and Slatter Holdings Ltd. (Respondents) British Columbia Supreme Court Docket: Fort St. John 21755 2017 BCSC 274 Grauer J. Heard: May 30-31, 2016; June 1-3, 6-10, 13-17, 2016; August 17-18, 2016 Judgment: February 20, 2017 Estates and trusts –––– Trusts — Resulting trust — Creation — Advance of purchase funds –––– Claimant and respondent B were spouses who separated in 2013 — Question to be determined in litigation related to respondent company, S Ltd. — Claimant and B had run S Ltd. and its predecessor, P Ltd. — When claimant and B separated, B’s mother, respondent F, asserted ownership and dismissed them as officers and directors — At all material times shares were registered in F’s name and she continued to hold legal title to them — Claimant alleged that beneficial interest in shares belonged to B, or alternatively to B and claimant — Question was severed for purposes of trial, with sole issue being question of who had beneficial interest — It was determined that F held legal title to shares in S Ltd. in trust for beneficial interest of B, on other grounds — Resulting trust could be quickly eliminated from contention — Essential characteristic was that claimant/would-be-beneficiary must have provided property or equitable interest vested in person bound by trust — Neither claimant nor B provided property in issue, being shares of (or proprietary interest in) S Ltd., to F — If F held property in trust for either or both of claimant and B, it had to be because of express or implied trust (intention), or because in absence of such trust, unjust enrichment and good conscience required that law construct trust in order to enforce obligation. Estates and trusts –––– Trusts — Express trust — Creation — Three certainties — Miscellaneous –––– Claimant and respondent B were spouses who separated in 2013 — Question to be determined in litigation related to respondent company, S Ltd. — Claimant and B had run S Ltd. and its predecessor, P Ltd. — When claimant and B separated, B’s mother, respondent F, asserted ownership and dismissed them as officers and directors — At all material times shares were registered in F’s name and she continued to hold legal title to them — Claimant alleged that beneficial interest in shares belonged to B, or al- 42 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

ternatively to B and claimant — Question was severed for purposes of trial, with sole issue being question of who had beneficial interest — It was determined that F held legal title to shares in S Ltd. in trust for beneficial interest of B — Facts established three certainties necessary to create intentional trust by which F constituted herself trustee of shares in P Ltd. for benefit of B — In 1998, by will of F’s husband, shares passed to F — Once administration of estate was complete, F took steps to pass formal control to B — F intended that B have all benefits of ownership, including executive control of company, ability to run it as he saw fit, and right to all of profits — F clearly intended to constitute herself as trustee of shares for benefit of B — Lack of expression of trust in legal document did not detract from clarity of F’s intention — Certainty of subject was clear; subject matter was proprietary interest in business that constituted P Ltd., in whatever legal form that interest might take; at this time, interest was in form of shares in P Ltd. — Certainty of object was clear; object was B’s succession to proprietorship of P Ltd. contracting business — While claimant may have considered that she was also owner of company, that was never object of trust that F created — It was F’s intention that counted, not claimant’s. Cases considered by Grauer J.: BNSF Railway v. Teck Metals Ltd. (2016), 2016 BCCA 350, 2016 CarswellBC 2250, 20 E.T.R. (4th) 24, 89 B.C.L.R. (5th) 274 (B.C. C.A.) — considered Bank of Nova Scotia v. Atcon Group Inc. (2012), 2012 NBCA 57, 2012 Car- swellNB 378, 2012 CarswellNB 379, (sub nom. Atcon Group Inc. (Receivership), Re) 1006 A.P.R. 72, (sub nom. Atcon Group Inc. (Receivership), Re) 388 N.B.R. (2d) 72 (N.B. C.A.) — referred to Becker v. Pettkus (1980), [1980] 2 S.C.R. 834, 117 D.L.R. (3d) 257, 34 N.R. 384, 8 E.T.R. 143, 19 R.F.L. (2d) 165, 1980 CarswellOnt 299, 1980 Cars- wellOnt 644, [1980] S.C.J. No. 103 (S.C.C.) — referred to Elliott (Litigation Guardian of) v. Elliott Estate (2008), 2008 CarswellOnt 7448, 45 E.T.R. (3d) 84, [2008] O.J. No. 4941 (Ont. S.C.J.) — referred to L. (J.) v. L. (B.) (2015), 2015 BCSC 2052, 2015 CarswellBC 3258 (B.C. S.C.) — referred to

DETERMINATION of beneficial interest in shares of company.

Pamela Boles, Marti Katerberg, for Claimant Nick A. Vlahos, for Respondent, Brian Slatter Robert M. Moffat, for Respondent, Fern Slatter Heidi A. Taylor, for Respondent, Slatter Holdings Ltd. Warde v. Slatter Grauer J. 43

Grauer J.:

1 This bitterly fought family law case has, at its heart, a dispute between the claimant wife, Elaine Slatter, and the respondent husband, Brian Slatter, who separated on May 29, 2013. But the question to be determined at this point relates to the respondent company, Slatter Hold- ings Ltd. 2 Before their separation, Elaine and Brian ran Slatter Holdings Ltd and its predecessor, PeeJay Contracting Ltd. They treated it as though they owned it, and no one challenged that position until they separated. At that point, Brian’s mother, the respondent Fern Slatter, asserted ownership and dismissed them both from their positions as officers and directors of the company. 3 As the company had significant assets, the issue of its ownership became important. At all material times, the shares of the company have been registered in Fern Slatter’s name, and there is no doubt that she continues to hold legal title to them. Elaine maintains, however, that the beneficial interest in the shares of Slatter Holdings belongs to Brian, or alternatively to Brian and her. 4 That question was severed for the purposes of trial, and so the sole issue is this: who holds the beneficial interest in the shares of Slatter Holdings Ltd? Is it Fern? Is it Brian? Is it Brian and Elaine together? 5 The story is not a happy one. The business that became PeeJay Con- tracting Ltd was started by the late Grant Slatter — Brian’s father and Fern’s husband. Over the years, it was built into a business that was ultimately sold for a handsome sum, which proceeds became the principal asset of Slatter Holdings. All of the parties contributed at different times to the building of the business. It was not easy. They built it through the sweat and effort of long, cold, hard hours. Now, years of litigation have significantly reduced the value of the company’s assets.

2.0 DISCUSSION 2.1 Trust Principles 6 As we have seen, the single question at issue in this trial is who holds the beneficial interest in the shares of Slatter Holdings Ltd. In alleging that the answer is “Brian” or “Brian and Elaine”, Elaine relies on “equitable principles including unjust enrichment” and alleges, in a cascade of alternatives in different configurations, an express trust, a resulting trust, a constructive trust, and an implied trust. 44 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

7 It is helpful to refer to the definition of a trust adopted as “one of the best” in Waters, Gillen and Smith: Waters’ Law of Trusts in Canada, 4th ed. 2012 (“Waters”) at p 3: A trust is the relationship which arises whenever a person (called the trustee) is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (of whom he may be one, and who are termed beneficiaries) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustees, but to the beneficiaries or other objects of the trust. 8 Elaine alleges, in short, that although Fern is the registered owner of the shares in Slatter Holdings, Fern holds those shares for the benefit of Brian, or of Brian and Elaine, and not for her own benefit. 9 The following passage from Waters at pp 394–395 is a useful com- parison of the different kinds of trusts alleged. I include it because the parties’ submissions were less than clear in this regard: The courts and the various legislatures of the common law world have sometimes used interchangeably the terms “implied trust”, “resulting trust” and “constructive trust”, and the terminology is therefore somewhat confusing. But essentially, while express trusts are those which come into existence because settlors have expressed their intention to that effect, constructive trusts arise not because of anyone’s expression of trust intent but because B ought to surrender property to A and this is the machinery the court employs in order to get B to do that. In between the express trust, a product of the settlor’s intention, and the constructive trust, a machinery imposed by law, are the implied trust and the resulting trust. The term “implied trust” is commonly used for two situations. The first occurs where the intention to create a trust is not clearly expressed, but has to be discovered from indirect and ambiguous language. This is all that distinguishes such an implied trust from the express trust. A second common use is where one person has gratuitously transferred his property to another, or paid for property and had the property put into another’s name. The intention of the transferor or purchaser is implied to be that the transferee is to hold the property on trust for the transferor or purchaser. The implication arises out of the fact that Equity assumes bargains, not gifts, and requires the donee to prove that a gift was intended. The term “resulting trust”, on the other hand, does not allude in any way to intention; it describes what happens to the property in question. It results or goes back to the person who, for reasons we shall Warde v. Slatter Grauer J. 45

examine, is entitled to call for the property. For example, because Equity does not assume gifts, the transferee holds title for the transferor or the one who provided the purchase money. In other words, in this “implied trust” situation the beneficial interest results, or goes back, to the transferor or purchaser. . . . Distinguishing the resulting trust from the constructive trust is also not easy because the lines have been blurred. Sometimes the same facts allow both a constructive trust theory and a resulting trust theory to be deployed. . . . There is even more overlap between resulting trusts and those constructive trusts which arise to reverse unjust enrichment. The reason is that both kinds of trusts typically perform the same function: they return property to the person from whom it came. In Fulton v. Gunn [2008 BCSC 1159] for example, an interest in land was acquired by a son using purchase money that came from his mother. It was held that this created a resulting trust for the benefit of the mother; and it was also held in the alternative that the son had been unjustly enriched at the expense of the mother, and so held the property on constructive trust for her. To the extent that resulting trusts are seen as arising by operation of law, they are really just a sub– species of constructive trust. The distinction between resulting and constructive trusts is perhaps best put in this way – while constructive trusts have nothing to do with intention, express or implied, resulting trusts can be explained either on the basis of intention or imposition of law. . . . 10 As Waters makes clear (see also pp. 19–21), the terms “express” and “implied” refer to the intention of the alleged settlor. Intention may also be relevant to a resulting trust, but is irrelevant to a constructive trust. A constructive trust is one constructed by the law to enforce an obligation. It arises out of unjust enrichment and “good conscience”: Waters at p 23; Becker v. Pettkus, [1980] 2 S.C.R. 834 (S.C.C.). Thus, there can be only two sources of a trust obligation: the intention of a property owner to create a trust; or the imposition by the law of a trust obligation upon persons: Waters at p 478. 11 In my view, a resulting trust can be quickly eliminated from contention in this case. An essential characteristic is that the claimant, the would–be beneficiary, must have provided the property or equitable interest vested in the person bound by the trust: Waters at p 399. Neither Elaine nor Brian provided the property here in issue, the shares of (or proprietary interest in) Slatter Holdings, to Fern. If Fern holds that property in trust for either or both of Elaine or Brian, it must be because of an express or implied trust (intention), or because in the absence of such 46 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

a trust, unjust enrichment and good conscience require that the law con- structs a trust in order to enforce an obligation. 12 To demonstrate the creation of an intentional trust, the evidence must establish three certainties: certainty of intention to create the trust, certainty of the subject of the trust, and certainty of the trust object: Waters at p 140 and following; Bank of Nova Scotia v. Atcon Group Inc., 2012 NBCA 57 (N.B. C.A.) at paras 10–12. It is not necessary that the trust be set out fully in a document. It may be construed from conduct, or from documents and conduct taken together. See, for instance, Elliott (Litigation Guardian of) v. Elliott Estate, [2008] O.J. No. 4941 (Ont. S.C.J.): [30] This Court must consider all of the circumstances, including the words and conduct of Robert Elliott and Jean Elliott [the alleged settlors] to determine if certainty of intention exists. 13 Technical words are not required. As Waters put it at p 141: There is no need for any technical words or expressions for the creation of the trust. Equity is concerned with discovering the intention to create a trust; provided it can be established that the transferor had such an intention, a trust is set up. 14 This is so whether the intentional trust is created by the settlement of property upon a trustee, or by declaration by the owner of property of an intention to constitute himself or herself a trustee of that property. Again, it is not necessary that the donor use the words, “I declare myself a trustee”. Words of any kind and even conduct are sufficient provided it is satisfactorily shown that the donor did in fact intend to constitute himself or herself a trustee: Waters at p 204. 15 In assessing the applicability of these principles to the facts of this case in the context of the dynamic of a bitter matrimonial dispute, I find it essential to pay much closer attention to what the parties did than to what they now say. 16 I therefore turn to review the facts with these principles in mind. In doing so, I concentrate on those which, in my view, are important to the resolution of the issue at hand. For the reasons that follow, I conclude that those facts establish the three certainties necessary to create an intentional trust by which Fern constituted herself trustee of the shares in PeeJay Contracting Ltd for the benefit of Brian. Warde v. Slatter Grauer J. 47

2.2 Narrative and Findings 2.2.1 The Slatter Family 17 Elaine, Brian and Fern all testified. In referring to them by their first names, I mean no disrespect. Elaine is now 65, and is awaiting knee re- placement surgery. Brian is 55, and is partially disabled by advancing multiple sclerosis. Fern is 81, and suffers from a number of age–related ailments including macular degeneration that has left her functionally blind. 18 Another member of the family who testified was Tammy Savoie, Fern’s daughter and Brian’s sister. In July 2015, Ms. Savoie, who is 56, retired from 25 years’ employment with Safeway. She has been the sole director of Slatter Holdings Ltd since February 27, 2014. Ms. Savoie has been diagnosed with cancer. 19 The Slatters all have better uses for the assets of Slatter Holdings than funding litigation. 20 At one point during the course of this litigation, Fern’s then counsel applied for an order appointing a Litigation Guardian to act on her behalf on the ground that Fern was not competent to manage her affairs. I dismissed that application on the basis of the evidence then before me, although it was clear that Fern had been through a serious illness. Having observed her testify at this trial, I am fully satisfied as to her competence. I had difficulty, however, with her reliability. Her memory tended to be highly selective. It was particularly absent in relation to most of the events that were central to the issue in this lawsuit. She was, however, handicapped in giving evidence by her inability to read documents due to her impaired vision. 21 Brian, too, had a selective memory and a somewhat adversarial approach to giving evidence. For instance, he frequently disputed whether signatures of his name on documents were in fact his, sometimes flatly denying it, sometimes stating that it did not look like his signature, but possibly was. He did not connect any of this evidence to any underlying reason for doubting the signatures’ authenticity apart from looking at them, and I am unable to give any weight to his denials. He also purported to have little or no recollection about events that one would have thought would have remained in his memory, including entering into agreements and discussions about his succession to his father’s business. 22 I take into account that Brian’s education did not progress beyond Grade 7, and that he is functionally illiterate. This undoubtedly hampered 48 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

his ability to deal with documents, both contemporaneously and at trial, and, I am satisfied, contributed to the questionable reliability of some of his evidence. The fact remains that his testimony was frequently unrelia- ble when tested against independent evidence, and, I find, was coloured by the predicament in which he found himself: taking a position in this lawsuit (that the company belonged to his mother) that was at odds with his actions over the course of nearly 20 years. 23 Ms. Savoie was not involved in the interactions among her parents, brother and sister–in–law before the separation. My impression was that she was out of her depth in dealing with company matters that she did not clearly understand, and her evidence seemed rehearsed. While noting that she had not been involved with PeeJay Contracting Ltd until Febru- ary 2014, she said that it was always referred to as “Mom’s business”. I am unable to accept that evidence. It is at odds with virtually all of the evidence, including her mother’s. 24 I found Elaine to be a forthright and honest witness. I am satisfied that she made every effort to be truthful in giving her evidence. Given the passage of time, and the natural tendency of any party to see things through his or her own particular lens (especially in matrimonial litigation), her evidence was not always completely reliable. But where it con- flicts with the evidence of Brian, Fern or Ms. Savoie, I generally prefer the evidence of Elaine except where independent evidence supports a different conclusion. 25 One area where I do not hesitate to accept the evidence of Fern and Brian is this: they both testified that at the material times they had a limited understanding of the concepts of “shares”, “shareholders’ loans”, corporations and shareholdings, notwithstanding that they signed documents concerning these concepts, and notwithstanding that those documents were undoubtedly explained to them. I am satisfied that while they had some awareness of these matters, they neither fully understood nor particularly cared about such “formalities”, preferring to leave the legal niceties to the professionals. This is consistent with their actions over the time in question. The success of the family business was based upon handshakes and hard work, not on sophisticated corporate and legal strat- egies. It is important to remember this in considering the nuances of the legal and equitable principles relevant to the question of who owns the beneficial interest in the shares of Slatter Holdings. Warde v. Slatter Grauer J. 49

2.2.2 From Huntsville to Milligan Creek 26 Grant and Fern Slatter met in Huntsville, Ontario, where Fern, then 16, worked as a cashier and waitress, and Grant, 19, worked in a gravel pit with his uncles. They moved west in 1953, first to Calgary, then to Chetwynd, Taylor, and the North Peace area. 27 About 80 km north of Fort St. John, B.C., lies Milligan Creek, near the Peejay oilfield. Grant moved there to work in construction, running heavy machines for roadbuilding. There was a camp and café in the area that catered to oilfield and construction workers. 28 While Grant was at Milligan Creek developing his heavy equipment business, Fern worked at different retail jobs in Taylor and Fort St. John. In 1991, she left her job at the IGA in Fort St. John to move out to Milli- gan Creek. There, she and Grant bought the camp and café business with a partner, whom they later bought out. Fern operated the camp and café, while Grant operated his heavy equipment and road construction business. 29 Also in 1991, Brian Slatter, then 29, met Elaine Warde, then 39. Both had children from previous relationships. Brian had been through some difficult times. He was working with his father at Milligan Creek, driving heavy equipment, servicing the equipment in his father’s gravel pit, and helping to develop the business. Elaine had a Grade 12 education and was working with Canada Post, where she had been employed for 17 years. 30 In September 1992, Elaine moved out to Milligan Creek to live with Brian, and worked at the café and camp. She began as a waitress, then became a cook, and also undertook other tasks as necessary, such as pumping fuel. 31 In 1994, things started to change. The camp and restaurant were closed, and the camp was sold. Grant and Fern, I find, were ready to move towards retirement and wanted to turn the business over to Brian. Brian was interested only in the construction, gravel and equipment side of the business, not in the camp and café. That is consistent with what occurred.

2.2.3 The 1994 Agreement 32 In August 1994, Grant and Fern attended on their lawyer, Josh Lewis, in Fort St. John, B.C. According to Mr. Lewis, based on his review of the file, Grant was concerned to establish succession to the ownership of his 50 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

business for his son, Brian. Mr. Lewis drafted an agreement between Brian Slatter, Fern Slatter and Grant Slatter intended to accomplish that purpose. I will refer to it as the “1994 Agreement”. It provided: WHEREAS: A. Grant was born April 17, 1931 and accordingly is 63 years of age; B. Grant is the sole proprietor of that certain business known as PeeJay Contracting (the “Business”); C. All necessary and useful assets utilized in the Business are listed in Schedule “A” (the “Assets”); D. Fern is the wife of Grant and is the sole proprietor tour of that certain business known as PeeJay Caf´e and Camp (the “Camp Business”); E. The equipment listed in Schedule “B” (the “Camp Assets”) constitutes a general description of the assets necessary, useful and utilized in the Camp Business; F. Brian is the son of Grant and Fern and has assisted Grant in the operation of the Business; G. The parties wish to plan the succession of Brian as proprietor tour of the Business. NOW THEREFORE THIS AGREEMENT WITNESSETH in consideration of the premises and the covenants and agreements hereinafter contained, the parties hereto agree one with the other as follows: 1. Brian agrees to devote his full time and attention as an employee to the affairs and interest of the Business. 2. Brian acknowledges that Grant is the general manager of the Business and that Brian’s work for the Business is under the direction of Grant. 3. Brian and Grant acknowledge and agree that any decisions regarding sale or purchase of any capital assets of the Busi- ness must be mutually agreed to by Brian and Grant. 4. Grant and Brian agree that: (a) upon Grant attaining the age of 65 or upon Grant’s death, whatever shall first occur (the “Transfer Date”), that the Business and the Assets, with the exception of the crusher, screener loader and scales, shall be transferred to Brian. No consideration shall be paid by Brian to Grant in respect to such transfer same being in consideration of love and affection and Brian’s past contribution to the Business. Warde v. Slatter Grauer J. 51

(b) Forthwith on the Transfer Date: (i) all necessary documents shall be executed and delivered to Brian documenting the transfer of ownership of the Business; (ii) the address and telephone number of the Busi- ness shall be changed to Brian’s address and telephone number or such new address and telephone number as Brian may direct; and (iii) all Business books and records shall be delivered to Brian. (c) Should at any time prior to the transfer date, Brian fail to carry out his duties and responsibilities in the Busi- ness then Grant, providing he is acting reasonably, may discharge Brian as an employee of the Business and at such time as Brian’s employment ceases then his right under this Article shall also cease and terminate. 5. Brian acknowledges that he has no interest whatsoever in the Camp Business or the Camp Assets and that, notwithstanding the transfer detailed in Article 4 hereof, Fern has no obligations whatsoever to Brian in respect to the Camp Business or the Camp Assets. . .. 7.The parties hereto will execute and deliver all such further documents and instruments and do all acts and things as may be reasonably required to carry out the full intent and meaning of this Agree- ment at the reasonable expense of the Purchasers. 8. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their heirs, executors, administrators, succes- sors and assigns, as the case may be. 9. This Agreement may be executed by the respective parties in counterparts, whether original, copy or faxed copy and all such executed documents, provided same are otherwise identical, shall be deemed originals of this Agreement and together shall constitute one Agreement. 33 The agreement as printed is dated “the ___ day of September, 1994”. The blank date is filled in by hand with the number 29, and the last nu- meral of the year is changed by hand from 4 to 5. What happened, I find, is that Grant and Fern Slatter attended on Mr. Lewis in September 1994 and executed the agreement. Brian, however, did not attend to sign the agreement until September 29, 1995. It was at that time that the date was filled in and the year altered from 1994 to 1995. 52 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

34 Schedules “A” and “B” are no longer extant. 35 At trial, Fern Slatter testified that she had no recollection of this agreement, either discussing it or signing it. Yet at her discovery, she had recalled that she and her husband signed it together, and that Brian was to sign it later. Her lack of any recollection seems to me to be remarkably convenient given her present position. 36 Brian Slatter acknowledged his signature on the document, but indicated that he had no recollection of meeting with Mr. Lewis. He acknowledged that the concept was to turn the business over to him, but seemed to view that as a topic of discussion, rather than the subject of an agreement. What is clear is that over the ensuing years, he acted as though he owned the business. 37 I find on the evidence as a whole that the three parties who signed the 1994 Agreement all did so with the intention of effecting Brian’s succession to the ownership of the business of PeeJay Contracting. I also find that the three parties acknowledged that going forward, Grant could no longer operate the PeeJay Contracting business independently, requiring Brian’s consent to the purchase or sale of business assets. The clear intention was to turn the business over to Brian when Grant turned 65, unless he died before that birthday. Fern, I am satisfied, fully shared this intention. 38 What the parties then did, I find, is this. By late 1994, Elaine had taken over the bookkeeping duties formerly performed by Fern. With the sale of the caf´e business, Elaine’s employment with PeeJay Caf´e was terminated, effective September 30, 1994. She continued to work with Brian at Milligan Creek, helping with the books and with other jobs as required. Grant helped her learn how to take care of the bookkeeping. 39 In late 1995, Grant and Fern moved to Vernon. They subsequently moved to Taylor before settling into retirement at Hudson’s Hope. Brian, with Elaine’s help, operated the PeeJay Contracting business at Milligan Creek. Fern testified that Brian and Elaine stayed in Milligan Creek to look after the business. She described how her husband was not very happy in retirement, and would go back up to Milligan Creek from time to time to help his son. On this aspect, her evidence is consistent with that of Elaine. I find that Grant and Fern withdrew and, apart from peri- odic visits by Grant, Brian and Elaine were left in charge. Warde v. Slatter Grauer J. 53

2.2.4 The Incorporation of PeeJay and the Death of Grant 40 In December 27, 1995, not long after the final execution of the 1994 Agreement, PeeJay Contracting Ltd was incorporated to carry on the business of PeeJay Contracting. This was done for tax purposes, and the shares of the new company were issued to Grant Slatter and Fern Slatter equally. 41 Nothing about the formal documentation effecting this incorporation says anything about Brian Slatter or any interest he might have. The notes of Mr. Lewis, however, indicate that in the context of his discussions with Grant (and probably Fern) leading up to the incorporation, they contemplated an “estate freeze” that would ultimately effect the transfer of ownership, via the shares in the company, to Brian for a nomi- nal sum. 42 By the time the company was incorporated, Grant was no longer involved in the PeeJay Contracting operation. He had moved from Milli- gan Creek, and Brian was running the business. 43 Mr. Lewis next reviewed the question of Brian’s succession on April 1, 1996, shortly before Grant’s 65th birthday on April 17 of that year. Grant’s 65th birthday was a triggering event for the transfer of ownership under the 1994 Agreement. 44 Mr. Lewis testified that although he has no direct memory of the event, his notes indicate that he met with at least Grant Slatter, and likely Grant and Fern Slatter, on April 1, 1996. He prepared a memorandum on that day which he testified, and I accept, he would have prepared in order to provide a copy to his clients. He obviously did so because it found its way into the records of PeeJay Contracting Ltd. 45 The concept was to bonus all net income of the company to Brian between April and August 1996, with Grant and Fern transferring their common shares to Brian in August. Grant and Fern would then take a General Security Agreement (“GSA”) to secure their shareholders’ loans. On their death or earlier, the shareholders’ loans would be forgiven. The result was that the assets would be insulated from both a possible eco- nomic downturn and creditors by the GSA, while all growth and income would belong to Brian. The debt represented by the shareholders’ loans would be forgiven, leaving Brian in full control. 46 Given these discussions in the context of both the incorporation of the company, and Grant’s 65th birthday, I find that both Grant and Fern continued to pursue their intention to effect Brian’s succession to the busi- 54 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

ness, and that Brian was by this time operating the business on his own with the full concurrence of Fern and Grant. 47 No steps were taken to complete this plan to transfer their shares to Brian, although the net income was indeed bonused out to him, and Mr. Lewis did register a General Security Agreement between the Company and Grant and Fern to secure their shareholders’ loans. But matters came to a halt when Grant was diagnosed with lung cancer. When his cancer briefly went into remission, Grant had an idea to start a new business in Hudson’s Hope and suggested that his son move there to join him in developing it. Brian was not interested, and Grant’s health took a turn for the worse. He passed away on December 5, 1997. 48 Brian testified that he was unaware of the plan outlined by Mr. Lewis. There seemed to have been little discussion about any aspect of the business between his parents and him. He said that in and around the time of the 1994 Agreement, he would just work with his father, not talk. He was, however, aware that his father was hoping that he would take over the business. He was aware of the incorporation, understanding it to be for tax reasons, but otherwise they did not discuss it. There was no mention of shares or shareholdings. 49 Under Grant’s will, his shares in PeeJay Contracting Ltd passed to Fern as part of the residue of his estate. They have remained in her name ever since. Fern was the sole officer and director until April 1998, at which time she resigned as an officer and Brian and Elaine became officers and directors. 50 Grant’s will is dated May 22, 1996, after the incorporation of PeeJay Contracting Ltd and after his 65th birthday. It was witnessed by Mr. Lewis. It provides that if Fern should predecease Grant or die within 30 days of his death, all of his interest in “the businesses known as ‘The PeeJay Caf´e’, ‘PeeJay Contracting’ and ‘PeeJay Contracting Ltd’” were to be transferred to Brian (the Slatters had two other children). According to Fern, and on this I accept her evidence, she and her husband signed wills at the same time, leaving everything to each other, and did so in the context of the steps taken to incorporate the business. 51 By the time of Grant’s death, Josh Lewis had left Fort St. John to practice in Vancouver. He sold his partnership in the Fort St. John practice to Augustine Earmme (now QC) in July 1997. Warde v. Slatter Grauer J. 55

2.2.5 1998: an Intentional Trust 52 From the files of Mr. Earmme’s firm, it is clear that a number of significant events took place in 1998, in the context of completing the administration of Grant’s estate. 53 On January 26, 1998, a form letter went out from Mr. Earmme’s office to Fern, Brian and Brian’s siblings concerning the question of whether Grant’s will should be probated. As the only assets were the shares and shareholders’ loans in PeeJay Contracting Ltd, the necessary transfers could take place without probate so long as there was no interest in challenging the will. Brian does not recall this, but must be taken to have consented. I take nothing from that, since, from his perspective, the company (which in his perception meant the business) was already in his hands. 54 Grant’s shares were duly transferred to Fern, and in April 1998 Fern signed the necessary forms appointing Brian and Elaine to be directors of the company and its president and secretary, respectively. Fern resigned her position as an officer, but remained as a director. From the perspective of Brian and Elaine, their appointment as directors, president and secretary was consistent with their understanding that the business was now theirs. 55 From the perspective of Fern, I find, her ownership of the shares did not interfere with Brian’s interest. She testified that when she signed the documents in April 1998, she understood that she was giving Brian permission to run the company as he saw fit, including taking all of the profits. She had no interest in being involved. At the same time, she stated that she was not signing the company over to him. I accept this testimony as an accurate picture of her understanding and intention at the time. It is consistent with what occurred, and with Brian’s belief that the business was his. 56 What happened in April 1998 is, in my view, crucial. Grant and Fern had intended since 1994 to effect Brian’s succession to the business of PeeJay Contracting. The incorporation of the business into PeeJay Con- tracting Ltd was unconnected to this concept. That the shares were issued to Grant and Fern clearly did not change their intention, I find, as indicated by the work Josh Lewis did for the Slatters days before Grant’s 65th birthday. 57 Grant then became terminally ill. By his will, his shares passed to Fern. Once the administration of the estate was complete, Fern took steps to pass formal control to Brian. She could have continued as an officer, 56 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

but did not. Brian became president. He and Elaine became directors. Fern knew that she continued to hold the shares. Even if she did not fully understand the significance, she understood the practicality of the situation. She was in a position to, and intended to, “give permission to Brian to run the company as he saw fit” including keeping all of the profits. Profit, of course, normally accrues to the benefit of the shareholder; the beneficial use and enjoyment of profits is a strong indication of where the beneficial interest lies: L. (J.) v. L. (B.), 2015 BCSC 2052 (B.C. S.C.) at paras 123–124. On the evidence, over the ensuing years as Brian and Elaine operated the business, Fern never sought or expected payment of any kind; nor did she receive any other than on one occasion shortly before the separation. 58 I find that an intentional trust arose at this point. Fern understood, even if imperfectly, that she continued to own the shares, and had not “signed the company over to Brian”. She certainly intended, however, that Brian have all the benefits of ownership, including the executive control of the company, the ability to run it as he saw fit, and the right to all of the profits. She did not intend to have any role in the business herself. This was consistent with the intention Fern and her husband had had since they contemplated retirement, and with her subsequent actions. 59 On all of the evidence, I have no difficulty in concluding that at this point in April 1998, Fern clearly intended to constitute herself trustee of the shares for the benefit of Brian. That this trust was not expressed in the legal documentation does not detract from the clarity of her intention. Whatever the documents might have said, she knew what she intended: though the shares remained in her name, the benefit of ownership was Brian’s. 60 The certainty of subject is also clear from these events. The subject was the proprietary interest in the business that constituted PeeJay Con- tracting, in whatever legal form that interest might take. At this time, that interest was in the form of shares in PeeJay Contracting Ltd. 61 The certainty of object is no less clear. The object was Brian’s succession to the proprietorship of the PeeJay Contracting business. Not Brian and Elaine or Brian and his siblings. Just Brian. While Elaine may have considered that she was also an owner of the company, that was never an object of the trust that Fern created. Elaine’s position that she and her husband both acted as though Elaine were an owner may be relevant to the division of family assets, but it is not relevant to the existence of an intentional trust. It is Fern’s intention that counts, not Elaine’s. Warde v. Slatter Grauer J. 57

62 On July 13, 1998, Mr. Earmme sent a fax to the company’s accountant, Iain Still: RE: PeeJay Contracting Ltd and Fern Slatter Further to the above matter, we have completed the estate work with respect to Grant Slatter. This has resulted in Fern Slatter being the sole shareholder of the Company. It is Fern’s wish that all of the issued voting shares in the Company be transferred to her son, Brian. We suggested to her, without knowing the financial status of the Company, that an estate freeze may be the best way to accomplish this. Please contact the writer at your earliest convenience to discuss a fair market value for the company. As well, if you can think of alternate methods to transfer the shares from Fern to Brian, please advise us. 63 Fern had no recollection of any such discussions with Mr. Earmme, or, for that matter, of Mr. Earmme at all. Unfortunately, Mr. Earmme was unaware of the earlier work Josh Lewis had done in considering an estate freeze as a means of transferring the shares, and was also unaware of the 1994 Agreement. The file indicates some difficulty in getting further instructions from Fern, and ultimately nothing was done to transfer the shares. Once again, this is consistent with the ongoing intention that Brian succeed to the company. That Fern did not pursue the transfer is consistent with an understanding that it did not matter very much. Brian was running the business and had all the benefits of ownership. 64 At about the same time, in July 1998, Elaine and Brian moved from Milligan Creek to a 55.7 acre property much closer to Fort St. John, at 1 mile 42 /2 on the Alaska Highway. The Milligan Creek site was no longer essential given the sale of the camp and caf´e business. To complete this purchase, they needed to finance $150,000. According to both Brian and Elaine, the accountant, Iain Still, told them that Brian could take it out of the shareholders’ loans account in the company tax free, and he did so. He stated, and I do not doubt, that at that time he had no idea what shareholders’ loans were. Those shareholders’ loans, of course, had initially come from injections of capital by Grant and Fern. Neither Brian nor Elaine had contributed anything like that to the company. 65 Iain Still passed away in 2010, and without his evidence I am unable to assess to what extent Brian and Elaine may have misunderstood the advice he gave. I am, however, satisfied that Brian acted upon what both he and Elaine understood to be Mr. Still’s advice, all of which remained consistent with the general concept that the company/business was now 58 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

his. Even if he were not the shareholder, he was entitled to the benefit of the shareholders’ loans account. 66 Counsel for Elaine made a great deal of the actions of Brian throughout the years following the 1994 Agreement, including the use of the shareholders’ loans that I have just reviewed, and other actions I review below. In considering Brian’s conduct, it is important to remember that what he did or thought is not determinative of whether a trust arose. Again, it is only Fern’s intention that is relevant. The fact remains that Brian’s actions are of assistance in assessing the evidence as a whole, and in understanding the context and surrounding circumstances,

2.2.6 The Sale of the Business 67 Thereafter, Brian and Elaine continued to run the business from their 1 42 /2 Mile property. They converted part of the house into an office, and built a shop on the property for business use. They also used a portion of the property for parking and storing equipment and parts. Brian operated the equipment and took care of the customers, while Elaine looked after employees as required and oversaw the administration. 68 Over the years, the business grew. As noted above, the share transfer proposed by Fern in 1998 did not take place. Elaine inquired of Mr. Still in about 2003 what it would take to complete the transfer, and was told that it would cost about $60,000 because of taxes. She and Brian did not pursue it. They did not perceive it to be a matter of consequence, and carried on as though they were the owners of the business. 69 Elaine was cross–examined about this, the suggestion being that she and Brian knew that Fern really owned the company as shareholder, and yet they did nothing about it, then or later. As I see it, this is entirely consistent with an understanding that what Fern owned did not interfere with Brian’s proprietary interest in the company, otherwise known as the beneficial interest. As I stated above, Elaine’s understanding is not determinative. Nevertheless, as with Brian, her conduct is helpful to the assessment of the evidence as a whole, and is consistent what I have found to be Fern’s intention. 70 Brian signed a number of documents for bank borrowing and credit as “owner” of PeeJay Contracting Ltd, and sometimes both Brian and Elaine were listed as “owners”. I am satisfied that when Brian described himself as the owner, he believed the statement to be accurate. In his mind, he did not distinguish between legal and beneficial ownership. Warde v. Slatter Grauer J. 59

What was important to him was that, conceptually, the business was his to run and the profits were his to enjoy. 71 This attitude persisted after the sale of the business, which I will review shortly. On a CIBC Business Account Application and Agreement for Corporations completed for Slatter Holdings Ltd on June 6, 2012, Brian described himself as President, and indicated that he had owned the business since December 27, 1995. In answer to the question of “Per- centage of Equity Ownership”, he answered 100%. Notwithstanding Brian’s suggestion that he seldom understood what he was signing, I am satisfied that he approved the information filled into this form, and that it was consistent with his understanding at the time. 72 By 2011, Brian’s multiple sclerosis, which had been diagnosed five or six years earlier, had advanced to the point where it interfered with his ability to work the kind of hours required in his business. He had undertaken a number of treatments in California, Costa Rica, Mexico and Israel, on which he spent something in the region of $200,000 from his income or from the company as an expense. But in 2011, he was very busy with work, and finding it very difficult. 73 Ultimately, Brian negotiated the sale of the assets of his business to a business acquaintance, Steve Clayton. The terms included the payment of $500,000 down followed by annual payments of $250,000 for four years, for a total of $1,500,000. In addition, Mr. Clayton took over debt in the amount of $800,000 incurred by PeeJay Contracting in the purchase of new equipment, and also took over the name. That is why PeeJay Contracting Ltd had to change its name to Slatter Holdings Ltd. 1 The new company leased a portion of the 42 /2 Mile property from Brian and Elaine for four years at $1,500 per month, and granted a lien against the assets that were purchased to secure future payments. 74 The transaction was structured as an asset sale, rather than a sale of shares, because the shares were in the name of Fern, not Brian. Mr. Earmme, who acted for Brian on the sale, described this as a “revela- tion”, presumably having forgotten about his earlier dealings with Fern. He learned about it from the accountant, Marco Schwab, as he considered how to structure the transaction. He first raised these problems with the Brian and Elaine when they met on November 17, 2011. 75 Mr. Earmme and Mr. Schwab then discussed the means by which the shares could be transferred to Brian and Elaine, because a sale of shares was a more advantageous structure due to capital gains exemptions. But there was a real concern about the tax consequences of transferring the 60 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

shares at that time. They came to the conclusion that a straight asset sale would be the safest way to proceed, and that is how the transaction was structured. 76 Even then there was some confusion. The closing documentation in- 1 cluded a lease agreement concerning part of the 42 /2 Mile property. That lease was between Brian and Elaine as “Landlord”, and Mr. Clayton’s company as “Tenant”. Article 14 dealt with termination and extension of the lease, and began with the following recital: The parties having entered into this Lease as a condition of the Land- lord’s company PeeJay Contracting Ltd. (the “Company”) providing financing to the Tenant for the Tenant’s purchase of assets from the Company pursuant to a written Agreement between the Tenant and the Company dated as at June 01, 2012. . . [Emphasis added.] 77 The transaction substantially completed on June 1, 2012, and Mr. Earmme forwarded to Slatter Holdings Ltd, formerly PeeJay Contracting Ltd, a cheque in the amount of $486,196, representing the balance of the down payment for the purchase of $500,000 after deduction of fees and expenses. The reporting letter was addressed to Slatter Holdings Ltd at Brian and Elaine’s post office box. 78 Apparently in connection with the sale of the business, Fern Slatter signed a document purporting to be dated February 24, 2011. I reproduce it as written. It reads: I, Fern Slatter, who currently holds 100% of the shares in PeeJay Contracting Ltd. Did, in 1995, make an agreement between myself, my late husband Grant Slatter, and my son, Brian Slatter, that we intended to transfer our shares to our son Brian. We incorporated this company in 1996 and intended to transfer the shares to our son Brian soon thereafter. After incorporation, Grant, my husband, became very ill and in time passed away. We filed a Memorandum to this effect on April 1, 1996. We always have intended to transfer the shares to our son, Brian Slatter. At this time I am retired and living in Vernon and would like the shares to be transferred into Brian’s name as soon as possible. Sincerely Fern Slatter Date: Feb. 24/2011 [date is handwritten] [signed] 79 Elaine Slatter testified that she prepared this document in accordance with information dictated to her by Fern Slatter at Elaine’s kitchen table. The context was that Brian wanted to sell the company, but could not do so because the shares were still in Fern’s name. According to Elaine, Warde v. Slatter Grauer J. 61

Fern expressed only one concern: she did not want her pensions or healthcare premiums to be affected. I take this to indicate a concern about having her old age pension clawed back, or her healthcare pre- mium increased, due to an attribution of income to her as a result of transferring the shares. 80 In cross–examination, it was suggested to Elaine that she prepared the document on her own, and put it before Fern to sign. Elaine denied this. It was further suggested to her that, at the time, Fern could not even read such a document due to macular degeneration. Elaine responded that if Fern was unable to read it, she was not aware of that. Elaine acknowledged that the document could have been prepared in February 2012, rather than 2011. 81 Fern purported to remember signing the document, but denied dictat- ing the words. She maintained that she had no idea what it was to be used for and signed it without reading it. She never saw it again until it was produced in the litigation. She acknowledged that she should have read it, but was unable to say whether she could have read it. 82 Given the surrounding evidence, I find that the document was signed in February 2012, not 2011, and that the date was an error. Contextually, there was no reason for such a document to be produced or signed in February 2011. In February 2012, however, the structuring of the sale of the contracting business was in contemplation and the matter of who owned the shares was of some importance. 83 I am satisfied that Fern was aware of the gist of what she was signing, and that they had discussed it beforehand. Most of the content, however, must have come from Elaine who, as office administrator, was the only person who had access to the “Memorandum” of April 1, 1996. The object, I am satisfied, was to facilitate a transfer of the shares at this time in order to permit the sale to proceed in the most tax–advantageous manner. Fern, I find, was prepared to do whatever she was asked in that regard. 84 There was a good deal of evidence about Fern’s ability to read at the time in question. This included evidence from her treating ophthalmolo- gist, Dr. Peter Hopp. From that evidence, it is clear that Fern indeed suffers from a disease of the retina. Dr. Hopp expressed the opinion that she would have been able to read a document in February 2011 only with corrective lenses, and would have had great difficulty reading a document in February 2012. 85 Dr. Hopp further indicated that she would not have been able to read the documents dated June 1, 2012, relating to the closing. I note that any 62 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

difficulty she had in this regard was not disclosed to Mr. Earmme at the time that Fern signed the closing documents. Fern acknowledged that she signed those documents, and that they were explained to her. She maintained, however, that, “it was all Greek to me”. I am quite sure, however, that she did not communicate this to Mr. Earmme. 86 Cross examination of Dr. Hopp on his clinical records left me with the impression that the most he could really say about Fern’s vision in February 2012 was that it was borderline. I am unable to conclude that she was physically incapable of reading, but I accept that she would have had difficulty doing so. But I find that it did not much matter as she was quite prepared to do whatever was necessary at that time, including transferring the shares to her son, in order to facilitate his sale of the company. This again is consistent with her understanding that although she owned the shares, she held them for Brian’s benefit.

2.2.7 Countdown to Separation 87 After the sale of the business, Brian and Elaine continued to manage Slatter Holdings Ltd. Fern played no role. 88 In December 2012, the question of a capital dividend came up. Elaine testified, and I accept, that they obtained advice from Marco Schwab that, as a result of the asset sale, the company could issue a capital dividend, which would be tax free. But of course, the person formally entitled to receive the dividend was the shareholder, Fern. A Canada Reve- nue Agency Election For Capital Dividend form was filled out, noting Mr. Schwab as the person to contact for more information. It was dated December 13, 2012, and bears the signature of Brian Slatter as Director. 89 Mr. Slatter disputed that the signatures on that form and on the cheque that was subsequently issued were actually his, but I am unable to accept his evidence in that regard. Given his difficulties with reading and writing, I do accept that he tended to rely on others, primarily Elaine, to fill out forms and cheques, and would then sign them. I also accept that he might well have no recollection of having done so. But I cannot agree that the signatures are forgeries, and I accept Elaine’s evidence to the contrary. 90 Elaine then prepared a cheque from Slatter Holdings Ltd to Fern Slat- ter in the amount of $150,000, with the notation “capital dividend”. Both she and Brian signed the cheque. It was dated December 27, 2012. They then took it to Vernon, where Fern endorsed it. The idea was always that Warde v. Slatter Grauer J. 63

the money would in fact be theirs, but had to go through Fern because she still had title to the shares. 91 Fern testified that she understood this was for the business, and that it had something to do with “selling the company”. That was essentially correct given that the capital dividend arose from the asset sale. 92 Brian and Elaine were unable to deposit the cheque thus endorsed to their account in Fort St. John because of the amount. They returned to Vernon in February 2013, and helped Fern deposit the cheque in her own account. According to Brian, there were no real discussions about it beforehand; they were “just trying to get it cashed”. Fern then wrote a cheque back to them for $125,000, keeping $25,000 for herself. 93 It was Brian’s idea to let his mother keep $25,000. He testified that he told Elaine that it actually all belonged to Fern, but I reject that evidence. This proposition was never put to Elaine, and I give it no weight. It is also inconsistent with the view that he clearly held, on all the evidence, that the company was his. In his mind, his mother’s ownership of the shares was not inconsistent with his ownership of the company. I am satisfied that both he and Elaine thought that the money belonged to them as the “true” (or beneficial) owners of the company, but had to go through Fern because she still held something called “shares”. 94 Much of what both Brian and Fern had to say about Fern’s continuing ownership was, I am convinced, the product of their desire to shield the company from Elaine after Brian and Elaine separated. The reality is that at no time before that separation did Fern ever ask for or expect to receive money from the company, including during the process of the sale of the assets. 95 I am also satisfied that from Elaine’s point of view, rightly or wrongly, this capital dividend transaction would not impair the status of Fern’s old age pension and medical plan in accordance with her understanding of Fern’s concerns as expressed in February 2012. 96 In January 2013, Brian and Elaine met with their financial advisor, Dean Falkenberg. According to Mr. Falkenberg, whose evidence I accept, he had known them for several years and had always understood that PeeJay Contracting Ltd was “their company”. At this point, they wanted to make an investment much larger than any they had made in the past. The reason they gave was that they had sold “their company” the year before. They expected to have a large amount to invest. They indicated that they were being paid over time, and wanted to invest money as they received payments, and slowly retire. 64 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

97 When Mr. Falkenberg quizzed them about the structure of the sale in order to explore tax consequences, he was told that it was done by way of an asset sale because the company was in Fern’s name. Brian said that the company was supposed to roll to him, but the shares had remained in his mother’s name. 98 Mr. Falkenberg was shocked. He was concerned that they understand the problems they could face if something went wrong. He asked if they had talked to an accountant about how to correct it. He was told that they had, but it was too expensive to correct now. He asked what would happen if Fern died? What about siblings? Brian’s response was that every- one understood it was his company and would honour that. Mr. Falkenberg asked if they had anything in writing. They said they did not. Potential problems he raised for them included the potential of separation. He urged them to get professional advice. 99 Mr. Falkenberg talked to the accountant, Mr. Schwab, and then, finally, called Brian and Elaine on the afternoon of March 21, 2013, to see if they had done anything about making their money in the company safer. He noted that “at this point Brian has not done anything other than talked to his mother about it.” That was his last contact with the Slatters. Brian separated from Elaine nine weeks later. 100 The separation came as a surprise to Elaine. In the name of the company, Brian had purchased two RV lots in Vernon in April 2013. They had discussed retiring, and travelling. Vernon was warmer than Fort St. John, and the idea was to keep an RV on the lots in Vernon and then travel from there. 101 According to Elaine, he was anxious to get to Vernon in the latter part of May 2013 in order to put sheds on the lots. Elaine was unable to ac- company him at that time. Brian left for Vernon on May 25 but returned on May 28. He said he wanted his grandfather’s watch, and announced that he was not happy. He left again on May 29. 102 Shortly after that, likely on May 30, Brian telephoned to say that his mother had frozen the company, and that Elaine was not to pay any bills or write any cheques. Elaine testified that she was shocked and called Fern. Fern was crying and acknowledged that she had frozen the company. Ms. Savoie then took the phone to tell her to ‘leave mom out of this’. 103 Elaine was still not clear on what had happened. In early June she went to the bank to pay the property tax, and discovered then that half of the money in the account had been removed. Warde v. Slatter Grauer J. 65

104 Fern testified that, in essence, she was minding her own business living quietly in Vernon in May 2013 when Brian told her that she better do something because money was going out of the company fast, and she would be in a big tax problem because the business was in her name. 105 This is consistent with Brian’s evidence. He testified that he had fights with Elaine about the money she was spending and he just walked out. He went to Vernon and told his mother that Elaine was spending money stupidly, and Fern could be left with a tax problem. He also said that he had left Elaine. His mother, he testified, was hurt about the breakup, but told him to close the bank accounts. 106 Whatever perception Brian may have then had, the evidence does not disclose any “stupid spending” of company money by Elaine at that time. Brian was a gambler, and underwent a number of expensive medical treatments. Both he and Elaine spent money freely, but there is nothing to support the existence of the kind of “stupid spending” Brian apparently reported to Fern, and that proposition was not touched in Elaine’s cross–examination. It is interesting, and remarkably consistent with what I have found, that the concern Brian communicated, according to both Brian and Fern, was one of tax problems for Fern, not loss of the value of the company. 107 Thereafter, the wagons circled. Fern froze the company accounts so that Elaine no longer had access of any kind. Fern effected the removal of Brian and Elaine as officers and directors of Slatter Holdings effective July 2, 2013. The company retained new lawyers and accountants, and, among other things, commenced action against both Brian and Elaine and vigorously defended this lawsuit. The assets of the company consist principally of cash flowing from the sale of the PeeJay Contracting business. The balance now remaining is considerably less than half of the value at the time of separation. 108 Currently, both Elaine and Brian are unemployed. Elaine continues to occupy the matrimonial home in Fort St. John. Brian resides with Fern in her half of a duplex she owns in Vernon. He has paid no spousal support.

2.2.8 2017: a Constructive Trust? 109 Elaine argued, in the alternative, that I should impose a constructive trust on Fern, in favour of Brian and Elaine, based upon the proposition that they had contributed a great deal of time and effort to the building of the business, including the personal security that she and Brian put up to secure company borrowings, and that it would be inequitable to allow 66 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Fern to reap all the benefit of that. To do so would amount to unjust enrichment. 110 Having found an intentional trust, there is no room in the circumstances of this case for imposing on Fern a constructive trust for the benefit of Elaine and Brian, or of Elaine. If anyone benefited from Elaine’s contribution, it was her husband as beneficial owner of the shares, not Fern as registered owner. Elaine’s rights vis–`a–vis Brian remain to be determined. 111 It follows that it is unnecessary for me to consider whether the recent decision of BNSF Railway v. Teck Metals Ltd., 2016 BCCA 350 (B.C. C.A.), has any application to this case, an issue that was addressed by the parties by way of supplementary written argument. 112 Nevertheless, in view of all the evidence I have heard, some further comments are in order. In resisting Elaine’s claim in this regard, Fern and the company sought to demonstrate that there was no unjust enrichment, because both Brian and Elaine were amply remunerated for their efforts by way of salary, the use of company money to pay some personal expenses, and their withdrawal of money from the shareholders’ loans account. 113 In support of this position, Fern led expert evidence from Niall Trai- nor, a vocational rehabilitation consultant, to the effect the median income for female high school graduates employed in Elaine’s “occupational group” (bookkeeper) over the period 1996–2011 ranged from $33,100 to $38,100, while the median income for male high school graduates in Brian’s “occupational group” (contractors and supervisors/heavy equipment operators) ranged from $33,500 to $40,000 over the same period. There is no doubt that Brian and Elaine had been remunerated at a level significantly higher than that. 114 While it is not necessary for me to consider whether Fern was unjustly enriched by the efforts of Brian and Elaine given my finding that the beneficial interest in Fern’s shares belongs to Brian, I should note that I found Mr. Trainor’s opinion to be of no assistance. His findings were simply irrelevant to measuring the objective value of the contributions of Brian and Elaine. His “occupational groups” were inapt. Brian and Elaine were not merely employees, but occupied the position of managers, operators and administrators of a substantial business. Warde v. Slatter Grauer J. 67

3.0 CONCLUSION 115 Fern Slatter holds legal title to the shares in Slatter Holdings Ltd in trust for Brian Slatter. The beneficial interest is his. 116 The litigation must now proceed to consider what remedies flow from this, and the remaining relief claimed by Elaine from Brian. The parties should schedule a case management conference for the purpose of planning the further conduct of the litigation, including the continued participation of Fern and the company and steps to facilitate a resolution of this matter outside of the courtroom. Order accordingly. 68 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

[Indexed as: Killam v. Killam] Humphrey Hubbard Killam (Petitioner) and Eugene Humphrey Killam (Respondent) British Columbia Supreme Court Docket: Victoria S161157 2017 BCSC 175 Blok J. Heard: October 3, 2016 Judgment: February 2, 2017* Estates and trusts –––– Trusts — Express trust — Creation — Three certainties — Intention — Lack of intent –––– Testator was wealthy man who prepared will and codicil dividing residue of his estate into 27 shares and giving those shares to nieces and nephews and some grand-nieces and grand-nephews — Nephew EK received one share outright, along with another share that was subject of comment by testator — In clause concerning latter share, testator stated it was his desire, but he did not direct, that latter share be used for benefit of nephew HK for as long as HK should live or as long as funds were available — HK brought petition for declaration that clause relating to latter share created trust for benefit of HK — Petition dismissed — Phrase “It is my desire, however, I do not direct . . . ” was precatory and not mandatory in nature — This conclusion was reinforced by looking at other parts of will where, in three instances, words “I direct” were used, and instruction was clearly mandatory — By parity of reasoning, “I do not direct” demonstrated testator’s intention that provision not be mandatory in nature — Use of word “shall” did not always mean that something must be done, so subsequent phrase “that said share shall be used for” was not inconsistent with earlier phrase “It is my desire, however, I do not direct” — Testator’s use of phrase “as long as the said funds are available” would have been unnecessary if clause had been intended to create trust — This phrase suggested EK was to benefit beyond his own share — Distinct language of clause as compared to other clauses that unquestionably created trusts also indicated intention not to create trust. Cases considered by Blok J.: Ali Estate, Re (2014), 2014 BCSC 340, 2014 CarswellBC 532, 96 E.T.R. (3d) 146 (B.C. S.C.) — referred to

* A corrigendum released by the court on February 6, 2017 has been incorporated herein. Killam v. Killam 69

Barnes Estate v. Barnes (2013), 2013 BCSC 1848, 2013 CarswellBC 3042, 92 E.T.R. (3d) 148 (B.C. S.C.) — referred to Brooks Estate, Re (2011), 2011 BCSC 1606, 2011 CarswellBC 3138, 75 E.T.R. (3d) 99 (B.C. S.C. [In Chambers]) — referred to Burke, Re (1959), 20 D.L.R. (2d) 396, [1960] O.R. 26, 1959 CarswellOnt 98, [1959] O.J. No. 706 (Ont. C.A.) — followed Calori Estate v. Ruocco (2016), 2016 BCSC 2154, 2016 CarswellBC 3265 (B.C. S.C.) — referred to Davis Estate v. Thomas (1990), 40 E.T.R. 107, [1990] B.C.J. No. 2687, 1990 CarswellBC 559 (B.C. C.A.) — considered Dunn Estate v. TD Canada Trust (2016), 2016 BCSC 270, 2016 CarswellBC 416, 17 E.T.R. (4th) 46 (B.C. S.C.) — referred to Eberwein Estate v. Saleem (2012), 2012 BCSC 250, 2012 CarswellBC 502, 76 E.T.R. (3d) 218 (B.C. S.C.) — referred to Haidl v. Sacher (1979), [1980] 1 W.W.R. 293, 7 E.T.R. 1, 2 Sask. R. 93, 106 D.L.R. (3d) 360, 1979 CarswellSask 131, [1979] S.J. No. 428 (Sask. C.A.) — considered Lecky Estate v. Lecky (2011), 2011 ABQB 802, 2011 CarswellAlta 2230, 72 E.T.R. (3d) 263, 52 Alta. L.R. (5th) 295, [2012] 3 W.W.R. 512, (sub nom. Lecky Estate, Re) 530 A.R. 286 (Alta. Q.B.) — referred to Pearson Estate v. Pearson (2012), 2012 BCSC 1262, 2012 CarswellBC 2544, 80 E.T.R. (3d) 101 (B.C. S.C.) — referred to R. v. H. (J.) (2002), 2002 CarswellOnt 156, [2002] O.J. No. 268, 161 C.C.C. (3d) 392, 155 O.A.C. 146 (Ont. C.A.) — considered R.P. Johnson Family Trust (Trustees of) v. Johnson (2014), 2014 BCSC 1889, 2014 CarswellBC 2969, 1 E.T.R. (4th) 332 (B.C. S.C.) — referred to Racz Estate v. Gidney Estate (2012), 2012 BCSC 1810, 2012 CarswellBC 3754, 83 E.T.R. (3d) 312 (B.C. S.C.) — referred to Robinson Estate v. Robinson (2011), 2011 ONCA 493, 2011 CarswellOnt 5819, 67 E.T.R. (3d) 175, 106 O.R. (3d) 321, 7 C.P.C. (7th) 231, 337 D.L.R. (4th) 193, [2011] O.J. No. 3084, (sub nom. Robinson Estate, Re) 282 O.A.C. 189 (Ont. C.A.) — considered Smith Estate, Re (2008), 2008 BCSC 1189, 2008 CarswellBC 1842, 42 E.T.R. (3d) 103 (B.C. S.C.) — referred to Smith Estate, Re (2010), 2010 BCCA 106, 2010 CarswellBC 500, 3 B.C.L.R. (5th) 93, 55 E.T.R. (3d) 1, 284 B.C.A.C. 182, [2010] B.C.J. No. 370 (B.C. C.A.) — followed TLC The Land Conservancy of British Columbia, Inc. No. S36826, Re (2014), 2014 BCSC 97, 2014 CarswellBC 160, 96 E.T.R. (3d) 17, [2014] 7 W.W.R. 122, 58 B.C.L.R. (5th) 321 (B.C. S.C.) — referred to Thiemer Estate v. Schlappner (2012), 2012 BCSC 629, 2012 CarswellBC 1210, 77 E.T.R. (3d) 58 (B.C. S.C.) — followed 70 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Statutes considered: Florida Uniform Transfers to Minors Act, Florida Statutes, Title XL Ch. 710 Generally — referred to International Trusts Act, R.S.B.C. 1996, c. 237 Sched., Article 7 — considered Sched., Article 8 — considered Young Offenders Act, R.S.C. 1985, c. Y-1 Generally — referred to Words and phrases considered: “armchair” approach The “armchair” approach [to the interpretation of wills (or other instruments)] requires the court, at the outset, to place itself in the position of the testator at the time he or she wrote the will (that is, to sit in his or her “armchair”), and to consider the (then) surrounding circumstances and context in order to ascertain the subjective intentions of the testator. ... In brief, the “armchair” approach is to be used only if the intention of the testator cannot be ascertained from the will itself. “four corners” approach The “four corners” approach to the interpretation of wills (or other instruments) means that the intention of the testator is to be taken from within the “four corners” of the document itself, at least in the first instance, and surrounding circumstances are not to be considered unless the intention of the testator cannot be ascertained from the language of the will alone. It is my desire, however, I do not direct [T]he phrase “It is my desire, however, I do not direct ...” is precatory and not mandatory in nature. shall The word “shall” ... is capable of several meanings. ... [U]se of the word “shall” does not always mean that something must be done.

PETITION by nephew of testator for declaration that clause in will and codicil created trust for benefit of nephew.

F. Hunter for Petitioner D.E. Turner, S. Currie-Roberts for Respondent Killam v. Killam Blok J. 71

Blok J.: I. INTRODUCTION 1 This proceeding arises out of a bequest made by the late Malcolm Hayden Hebb, a remarkable man who had a remarkable career. He was the son of Thomas Carlyle Hebb, a highly–accomplished man in his own right, who in 1916 became the first head of the physics department at the University of British Columbia. The Hebb Building and Hebb Theatre at UBC are named after Thomas Hebb. 2 In 1931 Malcolm Hebb obtained a B.A. in physics and mathematics from UBC, winning the Governor General’s Gold Medal as head of the UBC graduating class in arts and science. He obtained a Ph.D. in physics summa cum laude from Harvard University in 1936. Thereafter, he taught at Duke University, carried out submarine detection research at Harvard during the Second World War, became the head of General Electric’s physics research department and, in 1960, was named to a six–person committee tasked with advising the United States president on NASA’s proposed manned space project. 3 Malcolm Hebb died in Florida in August 2009 at the age of 99. He and his wife had no children, so in his will he left his estate to a variety of nieces and nephews and some grand–nieces and grand–nephews. His estate was worth approximately US$13 million, a very substantial sum considering that the late Mr. Hebb had given away large sums during his lifetime. 4 Two of his nephews are the parties named in this proceeding. They are brothers. Both were named in Malcolm Hebb’s will and in a later codicil to the will, but the meaning of the clause concerning Humphrey Killam is the subject of dispute. 5 Because the parties share the same surname, for convenience I will refer to them by their first names. 6 Essentially, by the terms of a codicil the testator divided the residue of his estate into 27 shares and gave those shares to nieces and nephews and some grand–nieces and grand–nephews, sometimes together with that relative’s spouse. He gave one share to Eugene, though he also be- queathed another share that involved both Eugene and Humphrey and which is the share at issue in these proceedings. Each share was worth about US$308,000. 72 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

7 The provision in dispute is worded differently than those concerning the other relatives. It reads: Provided HUMPHREY HUBBARD KILLAM should survive me, then in such event I give and bequeath ONE (1) SHARE to EUGENE HUMPHREY KILLAM, provided, should he predecease me, then to LAWRENCE HEBB KILLAM. It is my desire, however, I do not direct, that said share shall be used for the health, support and maintenance of HUMPHREY HUBBARD KILLAM, for as long as he should live or as long as said funds are available for such purpose. 8 Humphrey says the provision (which I will refer to as either the “Clause” or “Clause 12”) creates a trust in his favour, with Eugene as the trustee. Eugene says the provision is a bequest to him with a moral duty — but not a legal duty — to use the funds for Humphrey’s benefit. 9 In formal terms, the petitioner seeks a declaration answering the following question: Does Article 8, Clause 12 of the Will create a trust for the benefit of the Petitioner? 10 There are other issues in this case but these do not have to be dealt with at this time because part of the relief sought has been adjourned. I will explain these issues later.

II. ADDITIONAL FACTS 11 After his wife died in 1986 Malcolm Hebb began making gifts on a regular basis to his various nieces and nephews, including Eugene and Humphrey. These gifts were substantial and ranged in amount from a few thousand dollars to $10,000 or more. 12 Eugene said he had a strong relationship with his uncle Malcolm in the latter’s later years. They communicated often through visits and telephone calls. Eugene said he visited the testator in Florida occasionally and the testator made annual visits to Vancouver, where he would stay with mutual relatives. 13 According to Eugene, in the late 1990s the testator told him that he was not going to give any further gifts to Humphrey because he was concerned and upset about Humphrey’s character and how Humphrey had used funds the testator had given him in the past. Without going into undue detail about these concerns, they related to Humphrey’s persistent unemployment, his poor choice of friends, his frequent and offensive dis- criminatory remarks and his excessive use of alcohol and drugs. The testator repeated these concerns to Eugene on later occasions. Killam v. Killam Blok J. 73

14 Humphrey confirmed this evidence to the extent that he said that the testator stopped giving cash gifts to him in approximately 1997. 15 At some point after the testator expressed his concerns about Humphrey to Eugene, the testator told Eugene he would be willing to provide further funds for Humphrey but only if Eugene would ensure they were put to good use. Humphrey confirmed this evidence insofar as he deposed that the testator told him future funds would be made available to him using Eugene as an intermediary. 16 I have used the neutral term “intermediary” because these inter vivos gifts from the testator to Humphrey are the subject of additional claims by Humphrey. He maintains that Eugene became a trustee because Eu- gene received funds from the testator and was supposed to have utilized them for Humphrey’s benefit, but failed to account for the funds received. He believes that Eugene received more money than he passed on to Humphrey. For his part, Eugene deposed that the testator told him he did not want Eugene to act as a trustee for any of these funds, or be burdened with any obligation to keep records, invest the funds or report on the use of the funds, because he knew Eugene was very busy at the time “and did not want to place any additional burden on me [Eugene]”. Accordingly, Eugene said he simply received cheques payable to Humphrey, although he agreed he may also have been a signatory on the bank account (in Humphrey’s name) into which those cheques were deposited. He said all monies received in this way were spent for Humphrey’s benefit and no funds were left over. 17 During the course of submissions I raised with counsel a concern that the facts surrounding the inter vivos gifts were in such dispute that the issue was not appropriately dealt with in a proceeding brought by petition. After reflecting on the matter, counsel for Humphrey asked that this aspect of the petition be adjourned generally. I ordered it adjourned as requested. 18 For those reasons it is unnecessary for me to summarize the additional evidence on that particular subject. Suffice it to say that from about 1998 or 1999 onward, the testator made monies available to Humphrey from time to time by means that are presently not clear but which involved Eugene in some fashion. 19 Humphrey estimated that the total amount of the gifts he received in this way was about $75,000. He said the last payment he received from the testator was in December 2008, when Eugene forwarded a cheque from the testator, payable to Humphrey, for US$12,000. 74 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

20 As noted earlier, the testator died in August 2009. A grant of probate was issued that same month to Ian Miller, a nephew of the testator who is also an attorney in Atlanta, Georgia. 21 Mr. Miller deposed that the distributions to the residual beneficiaries were done in instalments. According to the final estate accounting records, the principal distributions were made in February 2010, Febru- ary 2011 and September 2011. These included distributions recorded in the estate accounts as being made to “Humphrey Hubbard Killam”. 22 In October 2010 Humphrey sent a letter to Eugene demanding payment of the inheritance he said was due to him from the testator’s estate. Although Eugene attached a copy of that letter to his affidavit, he re- dacted three of its pages due to “matters which are defamatory to myself and other family members and are irrelevant to this proceeding”. Those portions of Humphrey’s letter that remain have a most unfortunate tone, including a threat by Humphrey to distribute the letter to all members of the family and to “those relevant to your life” in the event Eugene failed to comply with his demand. 23 Aside from one telephone call in 2010, Eugene and Humphrey have not spoken to one another since the testator’s death. On several occasions between 2011 and 2015 Humphrey attempted to communicate with Eu- gene by email and voice mail messages, sometimes asking about the money his uncle left for him and other times asking that some specific expense be paid (for example, boat insurance), but Eugene did not respond. 24 Humphrey deposed that he sent an apologetic letter via email to Eu- gene in June 2014, but Eugene did not remember receiving such a letter or email and disputed that it was in fact sent, noting that the document in question does not have any of the usual features associated with emails, such as a header with the time, date, sender and recipient. 25 In 2015 the executor, Mr. Miller, learned that Eugene had not made any payments to Humphrey out of the estate funds that had been distributed to him. At Humphrey’s request Mr. Miller wrote to Eugene on July 10, 2015, stating that under Florida law Eugene would be considered a trustee of the funds that had been provided to him for the “health, support and maintenance” of Humphrey. Mr. Miller urged Eugene to carry out what Mr. Miller considered to be Eugene’s fiduciary responsibility. Eu- gene did not reply to that letter. Killam v. Killam Blok J. 75

26 Both Eugene and Humphrey are residents of British Columbia. Eu- gene is 75 years old and is retired. Humphrey is 68 years old and is also retired. 27 The will was made by the testator with the assistance of a Florida attorney. The will did not contain any governing law clause. The parties agree that by virtue of articles 7 and 8 of the Schedule to the Interna- tional Trusts Act, R.S.B.C. 1996, c. 237, the governing law is that of British Columbia.

III. POSITIONS OF THE PARTIES A. The Petitioner 28 The petitioner submits that by making gifts during his lifetime the testator demonstrated his intention to share his wealth amongst his various nieces and nephews, including the petitioner. On the interpretation of the Clause advanced by the respondent he would get nothing. 29 The petitioner argues that the Clause contains an ambiguity insofar as it states that the share “shall be used” (my emphasis) for the “health, support and maintenance” of the petitioner, yet at the same time says that it is the testator’s “desire, however, I do not direct” that Eugene do so. 30 Despite this ambiguity, the petitioner maintains that the wording of the will makes it clear the testator intended that the petitioner be provided for on an equal footing with the other nieces and nephews who were named as beneficiaries. The benefit provided to the petitioner was subject to the discretion of the respondent, but the testator nonetheless trusted the respondent to use the funds paid to him for the benefit of the petitioner. 31 The petitioner submits that the words “It is my desire, however, I do not direct” are not sufficient to absolve the respondent of the duties of a trustee in the circumstances of this case. In the context of the testator’s prior reliance on the respondent to see to the proper use of funds for the petitioner’s benefit, those words are entirely consistent with the funds in question being held by the respondent as a trustee. 32 The petitioner also submits it is a pivotal fact that the respondent received the bequest knowing he was to use the funds for the benefit of the petitioner. His failure to use the funds in this way renders him liable as a trustee de son tort. 76 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

B. The Respondent 33 The respondent submits that the natural and ordinary meaning of the Clause, in the context of the will as a whole, along with the circumstances surrounding the making of the will, demonstrate that the testator did not intend to create a trust for the benefit of the petitioner. Instead, the Clause qualifies the gift of the share only to the extent that it ex- presses the testator’s desire that the respondent be subject to a moral obligation, but not a legal obligation, to use some of the share to benefit the petitioner. 34 The respondent says that while the precatory words “It is my desire”, standing alone, could suggest an intention to create a trust, the words that follow (“however, I do not direct”), comprise an immediate and imperative instruction that refutes the possible inference of a trust. Accordingly, the Clause cannot be interpreted as indicating an intention to create a trust. 35 Resort to other aspects of the will shows frequent use by the testator of the words “I direct” in other clauses. In each case the clauses are unambiguously imperative, thus demonstrating that the testator fully appreciated the use of the contrary phrase (“I do not direct”) and would not have used it without purpose or an understanding of its meaning. 36 The respondent notes there are other clauses in the will that create trusts for the children of beneficiaries in the event the beneficiary did not survive the testator, and in each case the shares are to “be used for” or are “for the benefit of” the child. In none of those instances does the testator speak of a “desire” or use the words “however, I do not direct”. Those trust clauses also do not use the phrase “as long as said funds are available for such purpose”, which is redundant in the context of a trust because trust funds must be used for their purpose until gone. Instead, that additional statement must have been made in the Clause because the testator contemplated the respondent would have unfettered access to the funds. 37 Although the effect of that interpretation is that the respondent receives two shares of the residue, there is no evidence to suggest that this is not what the testator intended. The respondent had a close relationship with the testator and trusted his judgment, so it is entirely reasonable to conclude the testator’s intention was to provide the respondent with two shares of the residue, one of which he could optionally use for the benefit of the petitioner. Killam v. Killam Blok J. 77

38 The respondent submits that if the surrounding circumstances are to be taken into account, those circumstances also demonstrate the testator did not intend to create a trust. These circumstances include: (1) the testator was a highly–educated and exceptionally intelligent man who would have chosen the phrase “I do not direct” carefully; (2) the testator had professional legal assistance from an attorney, who also would not have used these words to create a trust; and (3) Eugene specifically told the testator he did not want to act as a trustee for the inter vivos gifts because of the associated record–keeping, reporting and investment responsibilities. 39 Additionally, the respondent notes that the subject–matter of the trust is uncertain in that the words “so long as funds are available” allow Eu- gene to use the funds for his own purposes. 40 The respondent submits, in the alternative, that the Clause establishes a bare power of appointment with respect to the share at issue because of the use of permissive language indicating that Eugene, as holder of the power, may exercise it. 41 In the further alternative, Eugene submits that Humphrey’s claims are barred by the doctrine of laches. Humphrey asserted a trust in 2010 yet failed to take any steps to enforce his claim until the petition was filed in March 2016.

C. Petitioner’s Reply 42 The petitioner submits the Clause does not create a power of appointment. Even if it did, such a power requires the holder to make appropriate inquiries for the purpose of deciding if, when and how the power ought to be exercised, and the respondent failed utterly in that duty. 43 The petitioner submits that laches do not bar his claim because laches is an equitable doctrine that is unavailable to a party who comes without “clean hands”. Here, Eugene has “unclean hands” because he never inquired about Humphrey’s needs, ignored all requests for funds, and never informed Humphrey that he did not consider himself under any legal obligation to use the funds for Humphrey’s benefit. In any event, the petitioner submits he did not at any time acquiesce in Eugene’s failure to make payments to him or waive his beneficial interest in the funds. 78 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

IV. DISCUSSION A. General Principles of Construction 44 In their submissions both parties referred to two different approaches to the interpretation of wills, the “four corners” approach and the “armchair” approach, also called the “armchair rule”. The “four corners” approach to the interpretation of wills (or other instruments) means that the intention of the testator is to be taken from within the “four corners” of the document itself, at least in the first instance, and surrounding circumstances are not to be considered unless the intention of the testator cannot be ascertained from the language of the will alone. The “armchair” approach requires the court, at the outset, to place itself in the position of the testator at the time he or she wrote the will (that is, to sit in his or her “armchair”), and to consider the (then) surrounding circumstances and context in order to ascertain the subjective intentions of the testator. 45 The armchair rule derives primarily from Burke, Re (1959), 20 D.L.R. (2d) 396 (Ont. C.A.) at 398: The Court is now called upon to construe a particular document and, at the outset, I emphasize what has been said before so frequently. The construction by the Court of other documents and decisions in other cases respecting the intention of other testators affords no assistance whatsoever to the Court in forming an opinion as to the intention of the testator in the particular case now under consideration. Other cases are helpful only in so far as they set forth or explain any applicable rule of construction or principle of law. Each Judge must endeavour to place himself in the position of the testator at the time when the will 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. 46 That passage was quoted with approval by our Court of Appeal in Davis Estate v. Thomas (1990), 40 E.T.R. 107 (B.C. C.A.) [Davis Estate]. Killam v. Killam Blok J. 79

47 The case authorities are not consistent in articulating the proper approach to be used. Some indicate that surrounding circumstances are not to be considered unless the testator’s intentions cannot be discerned from the will itself. Others indicate that surrounding circumstances are to be considered at the outset. I discuss these differing approaches under the headings that follow.

B. Authorities Confining the “Armchair” Approach 48 In Smith Estate, Re, 2010 BCCA 106 (B.C. C.A.) [Smith Estate] our Court of Appeal endorsed (at para. 28) the legal principles summarized as follows by the court at first instance (at 2008 BCSC 1189 (B.C. S.C.)): [30] The guiding principle is that to interpret a will the court must first look to its language. Only if the court cannot ascertain the intention of the testator should it look beyond the will itself, in which case the “armchair rule” applies. This principle is clearly articulated in Thomas G. Feeney, The Canadian Law of Wills, 3rd ed., vol. 2 (To- ronto: Butterworths, 1987) at 13, as follows: If, in the first instance, the testator’s intention cannot be discerned from the will itself, then, since the testator must be taken to have used the language of the will in view of the surrounding circumstances known to him at the time when [the testator] made his will, evidence of such circumstances is necessarily admissible, at least insofar as it corresponds to the facts and circumstances referred to in the will. [31] The “armchair rule” of construction to determine the true intentions of the testator was applied and approved by the Saskatchewan Court of Appeal in Haidl v. Sacher (1979), 7 E.T.R. 1 (Sask. C.A.). In that decision, at pp. 8–9, Bayda J.A. applied Re Burke (1959), 20 D.L.R. (2d) 396 (Ont. C.A.) and quoted Laidlaw J.A. at p. 398: . . .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 80 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

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. [Emphasis added.] 49 In brief, the “armchair” approach is to be used only if the intention of the testator cannot be ascertained from the will itself. 50 Smith Estate has been followed in a number of decisions of this Court: Brooks Estate, Re, 2011 BCSC 1606 (B.C. S.C. [In Chambers]); Pearson Estate v. Pearson, 2012 BCSC 1262 (B.C. S.C.); Racz Estate v. Gidney Estate, 2012 BCSC 1810 (B.C. S.C.); TLC The Land Conservancy of British Columbia, Inc. No. S36826, Re, 2014 BCSC 97 (B.C. S.C.); Dunn Estate v. TD Canada Trust, 2016 BCSC 270 (B.C. S.C.); and Calori Estate v. Ruocco, 2016 BCSC 2154 (B.C. S.C.).

C. Authorities Favouring an Expansive “Armchair” Approach 51 As noted earlier, our Court of Appeal endorsed the more expansive “armchair” approach in Davis Estate. 52 The two differing approaches were considered in Haidl v. Sacher (1979), 106 D.L.R. (3d) 360 (Sask. C.A.) [Haidl]. Following a careful analysis, the court concluded that the proper approach is to consider the surrounding circumstances at the start (an approach it described as “procedure B” in the quote below) and not only after a finding of ambiguity from the language used in the will (“procedure A”). The court said: [21] In the end, it must be said that the Canadian authorities tend to put forward procedure “B” as the proper approach. In my respectful view, it is the approach most likely to elicit the testator’s intention and for that reason the more desirable approach. After all, ascertain- ing the testator’s true intention is the real and only purpose of the whole exercise. Hence, the learned Chambers Judge, in the matter before us, did not err in admitting evidence of the testator’s relationship to the beneficiaries named in his will, and particularly those mentioned in sub–paragraph (h) as part of the surrounding circumstances, in the light of which he then sought to interpret the testator’s language by applying the “ordinary meaning” rule. 53 Haidl was endorsed by the Ontario Court of Appeal in Robinson Estate v. Robinson, 2011 ONCA 493 (Ont. C.A.) [Rondel]: [24] Of course, it is always possible that the testator’s expression of her testamentary intentions may be imperfect. When a will takes effect and is being interpreted, the testator is no longer available to clarify her intentions. Extrinsic evidence is admissible to aid the con- Killam v. Killam Blok J. 81

struction of the will. The trend in Canadian jurisprudence is that extrinsic evidence of the testator’s circumstances and those surrounding the making of the will may be considered, even if the language of the will appears clear and unambiguous on first reading. Indeed, it may be that the existence of an ambiguity is only apparent in the light of the surrounding circumstances. This approach was noted and explic- itly adopted by Bayda J.A. in Haidl v. Sacher, [1979] S.J. No. 428, 106 D.L.R. (3d) 360 (C.A.). . . . [Emphasis added.] 54 Rondel was followed in Thiemer Estate v. Schlappner, 2012 BCSC 629 (B.C. S.C.) [Thiemer Estate]. There, Dardi J. said: [45] 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; Theo- bald 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. Mor- gan, [1943] A.C. 399 at 406 (H.L.); Re: Burke (1960), 20 D.L.R. (2d) 396 at 398–399 (Ont. C.A.). 55 The Rondel or expansive “armchair” approach has been followed in several other decisions of this Court: Eberwein Estate v. Saleem, 2012 BCSC 250 (B.C. S.C.); Barnes Estate v. Barnes, 2013 BCSC 1848 (B.C. S.C.); Ali Estate, Re, 2014 BCSC 340 (B.C. S.C.); and R.P. Johnson Family Trust (Trustees of) v. Johnson, 2014 BCSC 1889 (B.C. S.C.).

D. The Two Approaches – Discussion 56 The fact that our Court of Appeal has endorsed both approaches in different cases leaves the issue in an unsatisfactory state of uncertainty. Resort to other sources does not assist in resolving that uncertainty. 57 In James MacKenzie, Feeney’s Canadian Law of Wills, loose–leaf, 4th ed. (Markham, Ont.: LexisNexis, 2000) [Feeney’s], the author men- tions both approaches. In describing the court’s objective in these matters the author says: A§10.1ˆ In interpreting a will, the objective of the court of construction should be to determine the precise disposition of the property intended by the testator. The court should attempt to ascertain, if possible, the testator’s actual or subjective intent as opposed to an objective intent presumed by law. . . . This approach requires the court to 82 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

consider the testator’s peculiar and unique use of language, all the circumstances surrounding his or her life and all the things known to him or her at the time he or she made his or her will which might bear on the type of dispositions he or she actually intended to make by the will. [Emphasis added.] 58 Although that passage might be taken to suggest that the court is to begin with the “armchair” approach, the author of Feeney’s later describes the process of interpretation as follows: A§10.42ˆ It is trite that the primary source of the testamentary intentions is the probated will of the deceased. The court should hardly begin the process of interpretation without first referring to the will itself. ... A§10.45ˆ In the first instance, the court may not be convinced that the testator’s intention can be discerned from the will itself. In such a situation, since the testator must be taken to have used the language of the will in view of the surrounding circumstances known to him or her when he or she made his or her will, evidence of such circumstances is necessarily admissible, at least insofar as it corresponds to the facts and circumstances referred to in the will. 59 Those passages suggest the “armchair” approach does not come into play unless the testator’s intention cannot be ascertained from the language of the will alone. As noted earlier, a previous version of that ex- tract from Feeney’s was quoted with approval by the Court of Appeal in Smith Estate. 60 In light of this legal uncertainty I conclude that some combination of the two approaches is called for here. No matter which approach is favoured, the starting point for any analysis is the language of the will and, in this case, the first codicil as well. I therefore begin with an analysis of the language used in the will and I will then look to the surrounding circumstances existing at the time the testator made the will.

E. Other Principles of Construction 61 In Thiemer Estate Dardi J. summarized some other useful principles of construction. She said: [46] 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 particu- Killam v. Killam Blok J. 83

lar case — as opposed to what the testator may have meant to do when he or she made the will: Perrin at 406. [47] 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 Colum- bia, Report on Interpretation of Wills, 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. [48] 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. [49] In Re: Burke, the Ontario Court of Appeal articulated the guiding principles which were cited with approval by our Court of Ap- peal in Davis Estate v. Thomas (1990) 40 E.T.R. 107 (B.C.C.A.) and Smith v. Smith Estate, 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. [50] Although the primary source of evidence is the “four corners” of the will, the armchair rule entitles the court to look to extrinsic evidence to identify the surrounding circumstances known to the testator at the time the will was made which might reasonably be expected to 84 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

influence the testator in the disposition of his or her property. The facts and circumstances that a court may consider include the occu- pation of the testator, the state of his or her property, and the general relationships of the testator to his or her immediate family and other relatives: Kaptyn Estate (Re), 2010 ONSC 4293 at para. 38. The weight of the authorities demonstrates that the modern judicial approach to interpreting a will is to admit all the evidence regarding the surrounding circumstances at the start of the hearing and then to construe the will in the light of those surrounding circumstances. Ambi- guities in the will may only become apparent in the light of the surrounding circumstances: Rondel at paras. 23–24. [51] 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 re- peatedly been embraced by Canadian courts: Kaptyn Estate (Re) at para. 32; Perrin at 406; Re: Burke at 398. 62 There is one further principle of construction that is relevant here. As noted in Smith Estate at paras. 19 and 28, every effort should be made to reconcile apparently conflicting provisions in a will. If that is not possible then the last provision should prevail, but only as a last resort.

F. Precatory Language 63 Professor Waters, in his authoritative work, Waters’ Law of Trusts in Canada, 4th ed. (Toronto, Ont.: Carswell, 2012), provides an interesting historical context to what some have referred to as “precatory trusts”. He notes, first of all, that the prime question of whether a trust has been created is still one of construction (at 145): The question which gives rise to most litigation is whether a testator intends to create a trust, or merely impose some kind of moral obligation upon the legatee when he bequeaths personalty or devises land in confidence that the legatee will use the property in certain ways. He may speak, for instance, of his “expectation”, “fervent wish”, “desire”, “firm belief” or “purpose” that this will be done. Such words may give rise to what has been called “a precatory trust”, though, as Rigby L.J. pointed out in the English Court of Appeal, and his words have been echoed in Canada, this title is awkward and incorrect; “a misleading nickname”. If language, once construed, is held to intend a trust, then whether the language is precatory or otherwise, the trust which is thereby set up is the same as any other express trust, and no different rules apply. Killam v. Killam Blok J. 85

64 There was a profound shift in the judicial approach to these sorts of cases starting in the nineteenth century, caused by an English statutory change (at 145 – 147): Prior to the latter half of the nineteenth century the courts bent over backwards to find that testamentary language of a precatory kind re- vealed the intention to transfer on trust. By imposing a binding obligation upon the recipient of the property, the wishes of the testator were held to be safeguarded, concerning those who were to benefit from his property. Moreover, before 1830, the executor in English law took the residue of the estate beneficially, if it were not otherwise disposed of; and where it was incumbent upon the executor to respect only the wishes, hopes, desires, and belief of the testator that others would be benefited, the temptation of the executor to ignore those moral obligations was considerable. Then, in 1830, that right of the executor was statutorily taken away, and thereafter, the pace picking up after 1870, the courts became gradually less inclined to discover trust intention in mere precatory words. It is generally agreed that the climate of judicial attitude changed noticeably with the case of Lambe v. Eames and Canadian courts have joined in this new attitude. In 1889, in Bank of Montreal v. Bower, Chancellor Boyd of the Ontario High Court Chancery Division stated: It would be an otiose undertaking to go through all the cases, for they are numerous, and cannot be reconciled. But since Lambe v. Eames . . . . there has been a new de- parture in favour of confining language supposed to create a trust for the children [of the testator and the widow] within much narrower limits, than in some of the earlier cases. If the entire interest in the subject of the gift is given with superadded words expressing the nature of the gift, or the confident expectation that the subject will be applied for the benefit of particular persons, but without . . . terms cutting down the interest before given, it will not now be held . . . that a trust has been thereby created. And in Johnson v. Farney, Meredith C.J.O. adopted the view of Coz- ens–Hardy M.R. in the leading English case of Re Atkinson that every care has to be taken not to make mandatory words from those which are the mere indication of a wish or request, and that to construe the true intention of the testator, the courts must examine the trust instrument as a whole and not be mesmerised by particular words. Earlier, in Renehan v. Malone, this same view had been expressed by Barker J. On many occasions, Trench v. Hamilton has been approved in Canadian courts. In that case, Lindley L.J. pointed 86 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

out that the meaning which a court derives must prevail even if judges in the past have drawn different conclusions from more or less similar language. 65 Professor Waters concludes as follows (at 147): Whether a trust has been created is simply a matter of construction; this principle has not changed. What has changed is the tendency found in the earlier cases to discover imperative meaning in various word formulae, like “wish and direction” or “trusting that” and expressions of that nature. [Footnotes omitted throughout.]

G. The Will 66 The will was executed on June 8, 1999. Subsequently, the testator executed three codicils. The first codicil was executed on November 20, 2001. Aside from one minor change that is not relevant here, the primary change was a modification of the distribution of the shares of the residue. The will and the first codicil contained identical versions of the Clause. 67 Two further codicils were executed, one in 2002 and the other in 2003. The changes effected by these codicils were minor and are not relevant here. 68 The will contains typical clauses dealing with the disposal of remains, the appointment of a personal representative for the estate, the powers of the personal representative, a reference to a “separate writing” that deals with items of personal property, and a specific bequest of the testator’s residence, together with the personal property located there as well as any automobiles owned by the testator. 69 The clause dealing with the powers of the personal representative makes a specific provision for bequests to minor beneficiaries, requiring that the personal representative make any distribution to a minor by payment to a “custodian” under the Florida Uniform Transfers to Minors Act. In giving this instruction the testator used the words “I hereby direct”, as shown as follows: I hereby direct that any distribution to a minor or beneficiary who is under the age of twenty–one (21) years shall be made to a Custodian . . . for such beneficiary . . . . The custodian shall be authorized to expend such amounts of said minor’s share of my estate as the custodian may deem reasonable [sic] necessary for the health, education, maintenance and support of the minor, even to the point of expending all of said inheritance for the benefit of said minor. Upon said minor Killam v. Killam Blok J. 87

reaching the age of twenty–one (21), the custodian shall be required to distribute the remaining share to the said minor . . . . 70 Article 8 of the will distributes the residue of the estate. The original will contained 29 clauses within Article 8 by which shares or half–shares of the residue were distributed to various relatives. The codicil modified that to 27 clauses. 71 Article 8 begins as follows: I give, bequeath and devise all the rest, residue and remainder of my estate, of whatever nature and wherever situate, to the following individuals in the SHARES or HALF–SHARES as follows: 72 What then follows are 27 clauses, all beginning with “ONE (1) SHARE to . . . [etc.]” and then naming a person or persons and in some cases providing for an alternate distribution of that share should the person or persons predecease the testator, and also providing for distribution to a custodian in the case of minor contingent beneficiaries. 73 The provision for Humphrey is worded differently from the other residue clauses. Unlike the others it does not begin with the phrase “ONE (1) SHARE to . . .”. For convenience, I again reproduce the provision in question: Provided HUMPHREY HUBBARD KILLAM should survive me, then in such event I give and bequeath ONE (1) SHARE to EUGENE HUMPHREY KILLAM, provided, should he predecease me, then to LAWRENCE HEBB KILLAM. It is my desire, however, I do not direct, that said share shall be used for the health, support and maintenance of HUMPHREY HUBBARD KILLAM, for as long as he should live or as long as said funds are available for such purpose.

H. Application of Principles The Words of the Will 74 I begin by examining the words used in the will. In referring to the “will” I mean the words of the will (to the extent they were not modified or replaced by later codicils) and the codicils, including of course the codicil in question. 75 I agree with the respondent’s submission that the phrase “It is my desire, however, I do not direct. . .” is precatory and not mandatory in nature. This conclusion is reinforced by looking at other parts of the will where, in three instances, the words “I direct” are used and the instruction is clearly mandatory. By parity of reasoning, “I do not direct” dem- 88 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

onstrates the testator’s intention that the provision not be mandatory in nature. 76 I agree that the use of the word “shall”, when used for its mandatory meaning, can be read as being inconsistent with the earlier phrase “It is my desire, however, I do not direct . . .”. The word “shall”, however, is capable of several meanings. In Stroud’s Judicial Dictionary of Words and Phrases, 4th ed., (London, U.K.: Sweet & Maxwell, 1974) at 2514, the author notes that “shall” may imply futurity (as with events yet to happen), a mandate or mere permission or direction. In other words, use of the word “shall” does not always mean that something must be done. 77 This observation is consistent with the conclusion in R. v. H. (J.) (2002), 161 C.C.C. (3d) 392 (Ont. C.A.), where the word “shall” was considered in the context of a provision of the Young Offenders Act, R.S.C. 1985, c. Y–1. The court said: [22] First, the ordinary signification of the word “shall”, when it is used in a statute or legal instrument, connotes an imperative meaning. Thus, s. 11 of the Interpretation Act, R.S.C. 1985, c. I–21 provides that “the expression ‘shall’ is to be construed as imperative and the expression ‘may’ as permissive.” This is consistent with the ordinary dictionary definition of the word “shall” (Black’s Law Diction- ary, 6th ed. (West Group: 1990)). [23] However, the word “shall” may also be construed as merely permissive or directory, that is, as equivalent to “may”, where the context so requires to carry out the intention of Parliament (Black’s Law Dictionary). Accordingly, use of the word “shall” alone, is not determinative of whether an imperative obligation is imposed by s. 20(6)(a). It is, however, some evidence of legislative meaning. 78 The same observation about the differing meanings of “shall” has been made in the context of construing a will: see Lecky Estate v. Lecky, 2011 ABQB 802 (Alta. Q.B.) at paras. 87–88. 79 Eugene argues that the testator’s inclusion of the words “as long as said funds are available” suggests there is no trust as it implies that he may use the funds for his own purposes. Humphrey responds that this phrase is merely a way of saying that Eugene, as a trustee, may encroach on the capital of the bequest for Humphrey’s benefit. 80 I am not persuaded by Humphrey’s argument on this point. If there were a trust, the funds could only be used for trust purposes and the phrase “as long as said funds are available” would be unnecessary. In- struments such as wills are to be construed so as to give effect to all of Killam v. Killam Blok J. 89

the words used, if possible. If the Clause is interpreted as creating a trust then those words are redundant. As to the argument that the phrase merely provides authority to encroach on capital, I observe that this seems a very circuitous and possibly ineffective way of expressing that intent. 81 I note as well that Humphrey’s argument in favour of a trust leaves open the question of the distribution of any unspent funds remaining on Humphrey’s death because there is no provision within the Clause that addresses that situation and there is no catch–all or omnibus residuary provision in the will to fill that gap. 82 There are other clauses within the codicil that unquestionably create trusts (clauses 13, 18, 23, 24, 26 and 27 of Article 8). Each of these clauses includes contingent bequests to minor children by way of bequests to a “custodian” “for the benefit of” the named minors. These clauses do not contain the language of the Clause in question. Specifi- cally, they do not use the words: (1) “it is my desire, however I do not direct”; (2) “shall”; or (3) “as long as the said funds are available”. Eu- gene relies on this distinct language as evincing an intention not to create a trust in Clause 12. Humphrey argues that the distinct language of Clause 12 is explained by the fact that he is the only adult for whom a trust is created. 83 I do not find Humphrey’s argument persuasive, as there seems no obvious reason why the language creating the trusts would differ so much (aside from the statutory requirement for a custodian) depending on whether the trust was for the benefit of a child or an adult, where the objects of the trusts are generally the same. 84 The final point on the language of will itself is Humphrey’s contention that on the construction urged by Eugene the latter would get two shares of the residue, and Humphrey none, or at least only such monies as Eugene saw fit to give him. Humphrey argues that the distribution scheme of the will as a whole demonstrates that the testator intended to treat all of his nieces and nephews equally and the interpretation advanced by Eugene is inconsistent with this scheme. 85 I conclude there is nothing in the language of the will or codicil that indicates the testator intended the distribution of the residue to be strictly equal, as submitted. Although the overall residue distribution is indeed equal aside from Clause 12, there is nothing in the language used that suggests all nieces and nephews benefitted equally, and it is in fact not an equal division of the residue between just nieces and nephews because 90 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

one share went to one nephew’s children (in addition to a share going to that particular nephew and his wife). Also, looking beyond the distribution of the residue, two nephews received the testator’s house and tangi- ble property (including vehicles) by specific bequest, and so they benefitted beyond the one share of the residue given to each of them in Article 8. 86 In submissions, counsel for the respondent informed the Court that the testator had another nephew but he was not given a share of the residue. No objection was taken to the statement at the time although in reply counsel for the petitioner noted that this statement was not supported by any affidavit evidence. Because that matter was not in evidence, I have disregarded it. There is, however, other evidence, as described above, demonstrating that the testator did not treat his nieces and nephews in strictly equal fashion. 87 I note, as well, that the words “as long as the said funds are available” suggest that Eugene was to benefit beyond his own share that was gifted to him under a separate clause. 88 Finally on this point, Humphrey’s argument that the testator intended to put him on an equal footing with the other relatives is belied by the fact that even on his own argument he was to be treated very differently than the other adult beneficiaries in terms of how funds were to be distributed to him. 89 Although there may be a sufficient basis to decide the construction question solely on the language of the will and codicil, nonetheless there is at least arguable ambiguity and for that reason I conclude I should also examine the surrounding circumstances existing at the time the testator made the will and codicil.

Surrounding Circumstances 90 The following are the most relevant of the surrounding circumstances: a) the testator was an exceptionally intelligent, well–educated and well–resourced man; b) the will was drafted with the assistance of a Florida attorney; c) the testator had concerns about Humphrey’s character and how Humphrey had used funds the testator had given him in the past; d) Eugene had a strong relationship with the testator in the latter’s later years and they communicated often; and Killam v. Killam Blok J. 91

e) although the testator gave gifts to his various nieces and nephews during his lifetime, there is no evidence that those gifts were made on an equal basis. In fact, the evidence that the testator ceased giving inter vivos gifts to Humphrey for a time suggests Humphrey did not benefit from the testator’s gifts to the same extent as other relatives because he was omitted from distributions for a year or two. 91 Eugene says the surrounding circumstances listed in (a) and (b) above are relevant because as a highly–educated and accomplished man the testator would have chosen the words “however I do not direct” with care, and the attorney drafting the will would similarly have known from U.S. court decisions that those words were considered precatory, not mandatory, in their effect. Humphrey, for his part, submits that Eugene’s assertion about what the attorney would have known is entirely specula- tive and not based on any evidence. 92 I am satisfied that I may bear in mind that the testator was a highly–educated and accomplished man who had the assistance of an attorney in the drafting of his will and codicils. From these surrounding circumstances I consider it appropriate to conclude that the testator chose the words “it is my desire, however, I do not direct” with care and would have been aware of their import. I do not consider that I can properly draw any conclusions about the attorney’s knowledge of U.S. court decisions (cited by Eugene in argument) that indicate this type of phrase is precatory and not mandatory in effect. I agree with Humphrey’s argument that this is mere speculation. 93 As for the surrounding circumstances listed in (c) above, I conclude these are effectively neutral as between the two interpretations. 94 Surrounding circumstances (d) and (e) above tend to refute Humphrey’s argument that the testator intended to treat all his nieces and nephews equally, although this is already established within the wording of the will itself insofar as two nephews who received shares under Arti- cle 8 were also named as contingent beneficiaries for the specific bequest of the testator’s home and personal property. 95 Eugene relies on an additional circumstance: the evidence that the testator told Eugene that he did not want Eugene to act as a trustee for any inter vivos gifts or to have any record–keeping, reporting or invest- ing responsibilities with respect to those gifts because he did not want to impose any additional burdens on Eugene. Although this evidence is not controverted by Humphrey (and it would be difficult for him to do so 92 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

given that only Eugene and the testator were reportedly involved in the relevant discussion), it nonetheless relates to a matter in direct dispute between the parties, which matter has been adjourned for adjudication at a later time. It would be both inconsistent and unfair to adjourn the claim to which this evidence most closely relates but then rely on the same evidence as an aid to construction. In any event, I find that I am able to come to a conclusion on the interpretation or construction issue without having to consider that evidence.

Conclusion on Construction of the Clause 96 I conclude from an examination of the words of the will, as well as the surrounding circumstances, that the Clause creates a moral, not a legal, duty on Eugene to use the funds for Humphrey’s health, support and maintenance. I come to this conclusion because: a) the words “It is my desire, however, I do not direct” are clearly precatory in nature, not mandatory; b) the word “shall” (from the phrase “shall be used for the health, support and maintenance [of Humphrey]”), is best interpreted as either implying futurity or as being directory, not mandatory, so as to avoid a conflict with the words “It is my desire, however, I do not direct”; c) interpreting the Clause as creating a trust would render redundant the words “as long as said funds are available”, and redundancies in wills are to be avoided; d) interpreting the Clause as creating a trust would also leave open the question of the distribution of any unspent funds remaining on Humphrey’s death. Given all the circumstances it seems unlikely the testator would have left this loose end; and e) there is nothing to suggest that the testator intended a strictly equal distribution of the residue; to the contrary, it is clear that Humphrey was treated differently in certain important respects.

I. Trustee de son tort 97 Although Humphrey’s submission that Eugene became a trustee de son tort was directed primarily to the inter vivos gifts, he also maintained that it applied to the share received by Eugene under the Clause. 98 Counsel for Eugene objected to this submission on the basis that the Humphrey made no mention in his petition of any claim being made Killam v. Killam Blok J. 93

against Eugene as a trustee de son tort. While maintaining his objection, and noting that the failure to plead that claim or give other express notice had hampered his ability to respond on the point, counsel for Eugene nonetheless made some responsive submissions. 99 Counsel for Humphrey replied that a trustee de son tort is merely a subset or type of trustee and so the trustee de son tort claim was adequately captured in the general allegation that Eugene was a trustee of all funds he received in respect of Humphrey. 100 I agree with the respondent that it is unsatisfactory for the petitioner to advance this claim in the absence of an express pleading to this effect in the petition. A respondent should not have to anticipate all potential legal bases that might flow from a generalized claim. However, I am satisfied that the claim fails in its substance and so I do not have to decide the pleadings point. 101 Professor Waters in Waters’ Law of Trusts in Canada describes a trustee de son tort as follows (at 514): A person who was not appointed a trustee, but who takes it upon himself “to possess and administer trust property for the beneficiaries,” will be treated as if he were a trustee. He is known as a trustee de son tort. [Footnote omitted.] 102 Importantly, however, Professor Waters also states that at the time the person starts to possess and administer the property he or she must know, actually or constructively, that it is, in fact, trust property. 103 Leaving aside the obvious point that I have now determined that the Clause 12 share was not trust property at all, there is no evidence (aside from assertions by Humphrey and, in 2015, from Mr. Miller) that Eugene knew or should have known the property in question was trust property. The characterization of the share was disputed. The trustee de son tort claim fails for those reasons.

J. Other Issues 104 In light of my conclusion on the proper construction of the Clause it is unnecessary to consider the respondent’s alternative arguments that: (1) the Clause establishes a bare power of appointment with respect to the share in question; or (2) the petitioner’s trust claims are barred by the doctrine of laches. 94 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

V. CONCLUSION 105 The question posed by the petitioner is as follows: Does Article 8, Clause 12 of the Will create a trust for the benefit of the Petitioner? 106 The answer to the question is “no”. 107 Normally, costs would go to the successful party. Because Humphrey has raised concerns about the degree to which Eugene has discharged the moral duty I have now determined he was bound by, I conclude that the parties should have an opportunity to make submissions on costs. 108 Accordingly, counsel should submit written argument on costs (by forwarding the same to the Manager, Supreme Court Scheduling in Vic- toria) according to a schedule they work out between them, but with all submissions to be received no later than 30 days from the date of these reasons. Petition dismissed. R. (J.) v. M. (J.D.) 95

[Indexed as: R. (J.) v. M. (J.D.)] J.R. (Plaintiff) and J.D.M., J.N.M. and Solus Trust Company Limited, Administrator with Will annexed of the Estate of W.F.M., deceased (Defendants) British Columbia Supreme Court Docket: Vancouver S133257 2016 BCSC 2265 Dardi J. Heard: April 11-15, 2016 Judgment: December 2, 2016 Estates and trusts –––– Estates — Dependants’ relief legislation — Factors for consideration — Moral obligation –––– Plaintiff daughter cut ties with deceased father when she was 13 years old after she was subjected to emotionally abusive treatment and inappropriate sexual conduct — Daughter was forced to drop out of high school and make her way on her own so she would not have to return to live with father after he refused to pay for foster care — Deceased was married to second wife for eight years and she was named executrix and sole beneficiary of his will — Daughter brought action seeking variation of deceased’s will pursuant to Wills Variation Act — Action allowed — After daughter left home at age 13 deceased never provided any financial support for her, and he provided no written reasons for disinheriting her even though he was advised to do so — Size of estate was such that provision should be made for daughter unless there were circumstances that would negate such obligation, and moral claim owed to daughter must be balanced against competing moral and legal claims of wife — Deceased’s sexual conduct, his emotional abuse, his failure to provide support for daughter when she was in foster care, his lack of financial or emotional support during her formative years and absence of any genuine effort to repair fractured relationship gave daughter strong moral claim — Deceased’s mistreatment of daughter from young age had profound negative emotional impact on her, and his abdication of parental responsibilities and his stubborn refusal to assist and protect her when she was vulnerable and troubled teen in foster care dramatically impacted course of her life — Daugh- ter’s loss of safe and stable home and termination of her high school education had lasting and adverse consequences — Inherent power imbalance existed between deceased and daughter, he occupied highest position of trust, and she provided compelling explanation for not initiating some form of contact or reconciliation with him such that deceased’s moral duty to daughter was not negated — Viewing facts objectively, judicious parent in deceased’s circumstances would 96 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

have recognized moral obligation to daughter, and he did not discharge his moral obligation — Estate was valued at $1,640,000, at deceased’s death wife held property valued at $1,000,000, she received in excess of her notional legal entitlement to family assets, and deceased discharged his legal duty to wife — Given deceased failed to discharge moral obligation to daughter and failed to make adequate provision for her in his will, variation of will that provided bequest of $250,000 to daughter was adequate, just and equitable. Cases considered by Dardi J.: Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213, 23 B.C.A.C. 146, 39 W.A.C. 146, 48 E.T.R. 209, [1993] 4 W.W.R. 40, 1993 CarswellBC 11, [1993] B.C.J. No. 182 (B.C. C.A.) — followed Brown v. Wisted Estate (2010), 2010 BCSC 1890, 2010 CarswellBC 3622, 64 E.T.R. (3d) 231 (B.C. S.C.) — referred to Chan v. Lee (2004), 2004 BCCA 644, 2004 CarswellBC 2983, 12 E.T.R. (3d) 163, (sub nom. Chan v. Lee Estate) 205 B.C.A.C. 188, (sub nom. Chan v. Lee Estate) 337 W.A.C. 188, 36 B.C.L.R. (4th) 37, (sub nom. Chan v. Lee Estate) 249 D.L.R. (4th) 38, [2005] 4 W.W.R. 223, [2004] B.C.J. No. 2625 (B.C. C.A.) — considered Ciarniello v. James (2016), 2016 BCSC 1699, 2016 CarswellBC 2588, 21 E.T.R. (4th) 148 (B.C. S.C.) — referred to Clucas v. Clucas Estate (1999), 1999 CarswellBC 410, 25 E.T.R. (2d) 175, [1999] B.C.J. No. 436, 7 B.C.T.C. 154 (B.C. S.C.) — referred to Doucette v. Doucette Estate (2009), 2009 BCCA 393, 2009 CarswellBC 2402, 50 E.T.R. (3d) 163, 275 B.C.A.C. 226, 465 W.A.C. 226, 311 D.L.R. (4th) 410 (B.C. C.A.) — considered Dunsdon v. Dunsdon (2012), 2012 BCSC 1274, 2012 CarswellBC 2595, 80 E.T.R. (3d) 235 (B.C. S.C.) — considered Dunsdon v. Dunsdon (2012), 2012 BCSC 1274, 2012 CarswellBC 2595, 80 E.T.R. (3d) 235 (B.C. S.C.) — referred to Eckford v. Van Der Woude Estate (2014), 2014 BCCA 261, 2014 CarswellBC 1879, 98 E.T.R. (3d) 41, 374 D.L.R. (4th) 673, (sub nom. Eckford v. Vanderwood) 357 B.C.A.C. 277, (sub nom. Eckford v. Vanderwood) 611 W.A.C. 277, 62 B.C.L.R. (5th) 213 (B.C. C.A.) — referred to Graham v. Chalmers (2010), 2010 BCCA 13, 2010 CarswellBC 48, 53 E.T.R. (3d) 1, 1 B.C.L.R. (5th) 218, 279 B.C.A.C. 277, 473 W.A.C. 277 (B.C. C.A.) — referred to Gray v. Gray Estate (2002), 2002 BCCA 94, 2002 CarswellBC 164, 98 B.C.L.R. (3d) 389, 210 D.L.R. (4th) 514, 163 B.C.A.C. 282, 267 W.A.C. 282, [2002] B.C.J. No. 270 (B.C. C.A.) — referred to Hall v. Hall Estate (2011), 2011 BCCA 354, 2011 CarswellBC 2180, 22 B.C.L.R. (5th) 136, 70 E.T.R. (3d) 175, 309 B.C.A.C. 224, 523 W.A.C. 224 (B.C. C.A.) — considered R. (J.) v. M. (J.D.) 97

Hall v. Hall Estate (2011), 2011 BCCA 355, 2011 CarswellBC 2212, 22 B.C.L.R. (5th) 120, 70 E.T.R. (3d) 187, 309 B.C.A.C. 233, 523 W.A.C. 233 (B.C. C.A.) — referred to Hancock v. Hancock Estate (2014), 2014 BCSC 2398, 2014 CarswellBC 3880, 7 E.T.R. (4th) 67 (B.C. S.C.) — considered Holvenstot v. Holvenstot Estate (2012), 2012 BCSC 923, 2012 CarswellBC 1848, 79 E.T.R. (3d) 50 (B.C. S.C.) — referred to Kelly v. Baker (1996), 82 B.C.A.C. 150, 133 W.A.C. 150, 15 E.T.R. (2d) 219, 1996 CarswellBC 2156, [1996] B.C.J. No. 3050 (B.C. C.A.) — followed Kish (Litigation guardian of) v. Sobchak Estate (2016), 2016 BCCA 65, 2016 CarswellBC 307, 14 E.T.R. (4th) 171, 394 D.L.R. (4th) 385, 72 R.F.L. (7th) 284, [2016] 6 W.W.R. 532, (sub nom. Kish v. Sobchak Estate) 382 B.C.A.C. 249, (sub nom. Kish v. Sobchak Estate) 660 W.A.C. 249, 83 B.C.L.R. (5th) 365 (B.C. C.A.) — referred to Kong v. Kong (2015), 2015 BCSC 1669, 2015 CarswellBC 2646 (B.C. S.C.) — referred to LeVierge v. Whieldon Estate (2010), 2010 BCSC 1462, 2010 CarswellBC 2812, 61 E.T.R. (3d) 77 (B.C. S.C.) — referred to Lukie v. Helgason (1976), [1976] 6 W.W.R. 395, 1 B.C.L.R. 1, 26 R.F.L. 164, 72 D.L.R. (3d) 395, 1976 CarswellBC 2, [1976] B.C.J. No. 1393 (B.C. C.A.) — considered Martin v. McIlwain Estate (1992), 66 B.C.L.R. (2d) 195, 45 E.T.R. 142, 1992 CarswellBC 105, [1992] B.C.J. No. 410 (B.C. S.C.) — referred to Mawdsley v. Meshen (2010), 2010 BCSC 1099, 2010 CarswellBC 2078, 59 E.T.R. (3d) 51, 9 B.C.L.R. (5th) 106 (B.C. S.C.) — referred to Mawdsley v. Meshen (2012), 2012 BCCA 91, 2012 CarswellBC 442, 74 E.T.R. (3d) 198, 28 B.C.L.R. (5th) 12, [2012] 5 W.W.R. 1, 317 B.C.A.C. 247, 540 W.A.C. 247, 14 R.F.L. (7th) 251, 348 D.L.R. (4th) 307 (B.C. C.A.) — referred to McBride v. McBride Estate (2010), 2010 BCSC 443, 2010 CarswellBC 810, [2010] B.C.J. No. 592, 56 E.T.R. (3d) 124, 6 B.C.L.R. (5th) 328 (B.C. S.C.) — referred to McEwan v. McEwan (2014), 2014 BCSC 916, 2014 CarswellBC 1435, 99 E.T.R. (3d) 106 (B.C. S.C.) — referred to Pattie v. Standal Estate (1997), 1997 CarswellBC 2127, 42 B.C.L.R. (3d) 211, 20 E.T.R. (2d) 192, [1997] B.C.J. No. 2145 (B.C. S.C.) — considered Saugestad v. Saugestad (2006), 2006 BCSC 1839, 2006 CarswellBC 3170, 28 E.T.R. (3d) 210, [2006] B.C.J. No. 3206 (B.C. S.C.) — referred to Saugestad v. Saugestad (2008), 2008 BCCA 38, 2008 CarswellBC 123, 37 E.T.R. (3d) 19, 77 B.C.L.R. (4th) 170, 49 R.F.L. (6th) 1, 251 B.C.A.C. 111, 420 W.A.C. 111 (B.C. C.A.) — referred to Sawchuk v. MacKenzie Estate (2000), 2000 BCCA 10, 2000 CarswellBC 29, 72 B.C.L.R. (3d) 333, 184 D.L.R. (4th) 156, [2000] 4 W.W.R. 482, 31 E.T.R. 98 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

(2d) 119, 132 B.C.A.C. 171, 215 W.A.C. 171, [2000] B.C.J. No. 29, 21 B.C.T.C. 236 (B.C. C.A.) — considered Schipper v. Schipper Estate (2010), 2010 BCSC 1067, 2010 CarswellBC 2022, 59 E.T.R. (3d) 256 (B.C. S.C.) — referred to Scott-Polson v. Lupkoski Estate (2013), 2013 BCCA 428, 2013 CarswellBC 3012, 48 B.C.L.R. (5th) 271, 91 E.T.R. (3d) 1, [2014] 2 W.W.R. 654, (sub nom. Scott-Polson v. Henley) 344 B.C.A.C. 119, (sub nom. Scott-Polson v. Henley) 587 W.A.C. 119, 367 D.L.R. (4th) 663 (B.C. C.A.) — considered Tataryn v. Tataryn Estate (1994), [1994] 7 W.W.R. 609, 46 B.C.A.C. 255, 75 W.A.C. 255, 116 D.L.R. (4th) 193, [1994] 2 S.C.R. 807, 3 E.T.R. (2d) 229, 169 N.R. 60, 93 B.C.L.R. (2d) 145, 1994 CarswellBC 283, 1994 Car- swellBC 1243, [1994] S.C.J. No. 65, EYB 1994-67087 (S.C.C.) — considered Thatcher v. Bowling (1990), 40 E.T.R. 207, 1990 CarswellBC 560, [1990] B.C.J. No. 2779 (B.C. S.C.) — referred to Wilson v. Lougheed Estate (2010), 2010 BCSC 1868, 2010 CarswellBC 3560, 63 E.T.R. (3d) 207 (B.C. S.C.) — referred to Wong v. Cheung Estate (2015), 2015 BCSC 1741, 2015 CarswellBC 2750 (B.C. S.C.) — referred to Yee v. Yu (2010), 2010 BCSC 1464, 2010 CarswellBC 2813 (B.C. S.C.) — referred to Statutes considered: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) Generally — referred to Family Relations Act, R.S.B.C. 1996, c. 128 Generally — referred to s. 56(1) — considered s. 56(2) — considered s. 58 — considered s. 59 — considered s. 65 — considered s. 65(1) — considered Wills Variation Act, R.S.B.C. 1996, c. 490 Generally — referred to s. 2 — considered Wills, Estates and Succession Act, S.B.C. 2009, c. 13 Generally — referred to

ACTION by daughter seeking variation of father’s will.

P. Roberts, for J.R. M. Lott, L. Uppal, for J.D.M. A.D. Francis, for Solus Trust R. (J.) v. M. (J.D.) Dardi J. 99

Dardi J.: INTRODUCTION 1 The late W.F.M. died after a brief illness on August 21, 2012. He was 65 years old. 2 In order to protect the privacy interests that arise in this case I have used initials for the names of all involved and to the extent possible omitted references to non-essential details. I also order that the parties’ initials be used in the style of cause. 3 The deceased was survived by his second wife, the defendant J.D.M., whom he married on May 8, 2004. He and J.D.M. had no children together. The deceased also left two surviving children from his first marriage: the plaintiff, J.R. who was born in 1975 and the defendant, J.N.M., who was born in 1973. 4 J.D.M. was appointed as the sole executrix and named as the sole beneficiary of W.F.M.’s last will executed on August 17, 2011 (“the Will”). On February 4, 2013 a grant of probate of the Will was issued to J.D.M. Pursuant to a court order pronounced on October 3, 2014, J.D.M. was removed as executrix, the alternate named executors were passed over and the defendant, Solus Trust Company Ltd. was appointed as the Administrator with Will Annexed of W.F.M.’s estate. 5 J.R. seeks a variation of her father’s will pursuant to the Wills Varia- tion Act, R.S.B.C. 1996, c. 490 (the “WVA”). 6 It is common ground that the WVA governs the disposition of this case. W.F.M. passed away before the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (the “WESA”) came into force on March 31, 2014. Based on the pertinent transitional provisions the WESA has no application to the issues in this case.

HISTORY OF THE PROCEEDING 7 This action was commenced on May 3, 2013, by J.N.M. as plaintiff. At that time, J.R. was joined as a defendant. J.N.M. advanced two claims: a claim under the WVA and a constructive trust claim with respect to his father’s home. 8 In late March 2015, J.N.M. settled his constructive trust claim with J.D.M. and advised that he would not be proceeding with his claim under the WVA. 9 At a trial management conference on April 5, 2016 and, by consent, J.R. was substituted as the plaintiff and J.N.M. as the defendant. The re- 100 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

sponse to civil claim filed by J.R. on June 6, 2013, was ordered to be treated for all purposes as the notice of civil claim and the notice of civil claim filed by J.N.M. was to be treated for all purposes as a response to civil claim. J.N.M. did not participate in the trial. 10 Solus Trust appropriately adopted a neutral position in the WVA litigation. 11 I will next summarize the pertinent facts.

FACTS AND CHRONOLOGY 12 In these Reasons, the summary of facts reflects evidence that was either not in dispute, or, where disputed, the factual findings I have made based on consideration of the evidence as a whole. I have explained the reasoning underlying my findings where the evidence conflicted in a significant way on material points, or a party has urged that a particular inference be drawn from the evidence. 13 W.F.M. married J.R.’s mother, E.S., in 1968. They divorced in or around 1986. After her separation from W.F.M., E.S., who had been a full-time homemaker, worked as a waitress and struggled financially. She eventually attended community college and became qualified as a denturist. She worked in her own practice for 20 years prior to her retirement. 14 I found E.S. to be credible and consider her evidence reliable. She endeavoured to provide a forthright account of pertinent events, even though she was asked to recall difficult and painful matters. She readily acknowledged what she did not know or could not recall. 15 Overall, I found J.R. to be a thoroughly credible witness who in an understated manner, provided clear and convincing testimony. She responded to questions in a direct and straightforward way, without any embellishment or exaggeration. Her evidence was not weakened in cross- examination on any material point.

The Early Years 16 W.F.M. and his family moved from Vancouver Island to the Lower Mainland when J.R. was two years old. Thereafter, and until his death, W.F.M. was employed as a control room operator in a cement plant. 17 When J.R. was approximately six years old the family moved to a property in Tsawwassen (the “Property”). W.F.M. assumed the primary role for the construction of the family home, seldom retaining tradesmen R. (J.) v. M. (J.D.) Dardi J. 101

to assist him. The evidence establishes that the home remained under construction for some 20 years. The home was still under construction when the family moved in. This caused them considerable inconvenience and stress. By way of illustration, until J.R. turned 13, there were no doors hung on any of the upstairs bedrooms or bathroom. There was no carpeting on the plywood floors. At W.F.M.’s insistence E.S. and the children assisted in the construction as much as was possible in the circumstances. E.S. found the permanent state of construction a difficult en- vironment in which to raise her children. 18 W.F.M. was very controlling, domineering and short-tempered. E.S. persuasively recounted that he yelled at his children daily. J.R. was a shy, introverted child and as a young girl she was frightened of her authoritarian father. She credibly described frequently being driven to tears by her father’s taunting. She found him impossible to please. 19 Although the children were provided with the necessities, the family lived extremely frugally. They wore second-hand clothing or home-made clothing and the children had few toys. 20 In or about 1983, E.S. could no longer tolerate W.F.M.’s escalating mental and emotional abuse. She moved out of the Property with J.R. and her brother J.N.M. in tow. J.R. who was eight years old at the time, describes being sad and confused when she learned that her parents were divorcing. Her father never spoke to her about the divorce or provided her with any reassurances or comfort. 21 W.F.M. and E.S. engaged in a bitter and high-conflict matrimonial dispute. J.R. lived with her mother and brother for about a year and a half. W.F.M. made threats to E.S. about rendering her “penniless” and denigrated her involvement with her new companion, D.S. W.F.M. told the children that their mother was a terrible person who had “sinned”. W.F.M. berated J.R. if he became aware that she had even spoken to D.S. When E.S. eventually married D.S., W.F.M. would not permit J.R. to attend the wedding. According to E.S., W.F.M.’s conduct resulted in the children being very torn and conflicted about the separation. During this period, if E.S. was not home W.F.M. would sometimes show up at her home unannounced and collect J.R. and her brother. His conduct frus- trated E.S. and was a constant source of acrimony between them. 22 Given the relentless conflict, after a discussion with her children, E.S. determined that it would be in their best interests to return to live with their father in the family home. When J.R. was about nine years old, E.S. dropped off her two children at the Property one evening when W.F.M. 102 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

was not home. It was evident from her testimony and J.R.’s evidence that this episode was a distressing and traumatic event for the family. There- after, until she was 13 years old, J.R. lived with her father and her brother at the Property. W.F.M. eventually obtained a court order granting him legal custody of J.R. and J.N.M. The children saw their mother in accordance with the terms of a court-imposed visitation schedule. 23 At W.F.M.’s insistence the two children spent a considerable amount of time assisting him at the Property. He frequently left them un- supervised when he went to work. He worked shifts and so his work hours varied. In this period J.N.M. and J.R.’s chores increased significantly because, in addition to performing small construction tasks, they assumed the cooking and cleaning responsibilities their mother formerly carried out. They chopped, stacked and unloaded wood and tended to the large garden. Adhering to their father’s demands, they also hauled lum- ber and brick, hammered nails into the plywood floors and shoveled and hauled manure. 24 J.R. was frequently unwell as a child. She was diagnosed with a heart murmur, suffered from asthma and was hospitalized with pneumonia. When she was 12 years old her father took her and her brother on a three week road trip in his camper. J.R. persuasively recounted the lack of proper hygiene and nutrition. She took ill during the trip but W.F.M. refused to take her to a doctor. It was only when she returned home that her mother arranged for her appropriate medical care. 25 J.R. described certain of her father’s behaviours during this time frame. It is not necessary to set out the evidence in detail but suffice it to say W.F.M. engaged in ongoing sexual conduct with her and emotionally abused her. When J.R. was 13 years old a female adult friend of the family approached her privately with respect to concerns about how W.F.M. touched and conducted himself towards her. J.R. was acutely embar- rassed and disclosed nothing in their discussion. However, it validated J.R.’s feelings that her father’s conduct was entirely inappropriate. 26 Based on her observations of J.R., E.S. believed that she was terrified of her father. E.S. describes having developed disquieting suspicions regarding J.R.’s fear of her father but, when she broached the subject, J.R. would not divulge anything. She was too frightened to discuss the matter with anyone. 27 Shortly after the discussion with the family friend, J.R. had a distressing altercation with her father, which left her very anxious and in tears. After her father had left the house she packed up some of her belongings R. (J.) v. M. (J.D.) Dardi J. 103

and telephoned her mother. E.S. picked her up and for the following year or so, J.R. lived at her mother’s home. By this time her mother had married D.S. Her brother, however, remained living with his father at the Property.

Teen Age Years and Adulthood 28 E.S. explained that when J.R. resided with her, she adamantly refused to see her father. W.F.M. telephoned J.R. three days after the incident to ask whether she would be home for dinner. She answered no and told him she would never go back to live with him. During that telephone call W.F.M. offered no apology or an overture of reconciliation. With the exception of this single telephone call and arranging to send J.R. two cards, there was no contact between W.F.M. and his daughter during this period. In all likelihood W.F.M. delivered the cards to E.S. at her work- place. I will return to the cards later in my Reasons. 29 In the summer of 1990, when she was 14 years old J.R. left her mother’s home following an argument about curfews. After she left, J.R. slept on a friend’s sofa for approximately six weeks. E.S., who was very concerned about her daughter’s safety tried unsuccessfully to enlist the assistance of the police in locating J.R. There was no evidence that W.F.M. took any steps to locate J.R. 30 J.R. eventually obtained a job working in a restaurant on weekends. During this period of time she had no contact with her father and only saw her mother a few times for lunch. Neither parent provided J.R. with any financial support. 31 In September J.R. returned to school to attend grade 10. Upon been apprised that J.R. was living on her own social services became involved. J.R. was eventually introduced to a foster mother, R.L. J.R., who was now 15, was happy and felt safe at her new foster home. She described her foster mother as a wonderful person. J.R. lived in foster care for nearly three months from October through December of 1990. 32 While she resided in foster care a social worker arranged for occasional telephone calls and meetings between J.R. and her father. I accept J.R.’s evidence that on these occasions her father relentlessly engaged in belittling and berating her which upset her deeply. W.F.M. persisted in chastising her in a very angry manner, accusing her of destroying her life and shaming her family. On one of these visits, J.D.M., who was now in a relationship with W.F.M., offered to drive J.R. back to her foster home because J.R. was so visibly and emotionally distressed by her interaction 104 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

with her father. This was the last occasion on which J.R. saw either J.D.M. or her father. 33 J.R. had no prior knowledge of the financial details of foster care arrangements until the social worker informed her after the expiry of three months of foster care that “the term was up”. I accept E.S.’s evidence that although she was under considerable financial pressure she paid for the foster care for a three month term in the hopes that it would provide some stability for J.R. However, E.S. could not afford to pay for more than the initial three months. Both her foster mother and the social worker informed J.R. of this. Even though W.F.M. could afford to purchase a time share in Mexico at the time, he flatly refused to pay for any part of J.R.’s foster care. 34 J.R., who was clearly a troubled teen, was very sad because she did not want to leave her foster home. She understood that social services would take her back to her father’s house as he had legal custody. She desperately did not want to return and be subjected to her father’s abuse. She decided to leave foster care before the term ended so that she would not be found and returned to her father. She left her foster home immediately after Christmas. E.S. did not know where J.R. was and her efforts to find her daughter proved futile. As far as E.S. was aware W.F.M. made no efforts to locate J.R. At this point J.R., at the age of 15, did not consider returning to live with E.S. because there had been little contact with her while she had been in foster care. J.R. believed she and her mother were estranged. 35 After she left her foster home, J.R. dropped out of school in fear that if she attended school, social services would find her and return her to her father. 36 J.R. then spent the next few weeks, in the heart of winter, searching for places to sleep and scrounging food. She described sleeping in a car, a bank vestibule, and a garage and being cold and hungry. She then moved into a room in a house in Richmond for a short period of time. The living arrangement she described was unsafe and inappropriate for a teenage girl. This was a very difficult time for her as she was not working and she had no money. 37 Eventually J.R. obtained a minimum wage job and she found more suitable accommodation. From the ages of 16 to 18 she worked as a waitress, living paycheque to paycheque. From the ages of 17 to 20 J.R. lived with her boyfriend T.T. R. (J.) v. M. (J.D.) Dardi J. 105

38 At the age of 17 J.R., with some encouragement from T.T., initiated a rapprochement with E.S. E.S. and J.R. eventually reconciled and they have maintained a positive and healthy mother-daughter relationship. They talk on the phone frequently, meet for lunch and celebrate holiday dinners together. 39 W.F.M. had set up a trust account for J.R. when she was a young child. Gift monies and family allowance payments had been deposited into this account. When she was 17, W.F.M. arranged to have the interest statements delivered to J.R. so she would be responsible for paying the income tax. At age 20 or 21 J.R. telephoned her father and asked him to transfer the funds in the trust account to her name. J.R. asked her father to meet with her at the bank, but he refused to do so and told her that there was no reason for him to meet with her. However, W.F.M. ultimately arranged for her to receive the $3,500 in the account. Other than arranging for the transfer of these funds and perhaps making some contribution to the cost of her piano lessons and orthodontics while she lived with E.S., W.F.M. never provided any financial support to or for J.R. after she left his home at the age of 13. 40 The only other contact J.R. had with her father after she left foster care was the occasional telephone call from him in or around her birthday. In the telephone calls or messages he left W.F.M. typically berated his daughter by calling her a failure and accusing her of having thrown her life away. He never expressed affection nor made any offers of financial assistance. J.R. received a telephone message from W.F.M. around the time of her 19th birthday. She was very upset at the negative sentiments he voiced in his message. While J.R. may have expressed concern to E.S. about E.S. having passed along her telephone number, the evidence I prefer does not establish that J.R. never asked E.S. to convey to W.F.M. that J.R. did not want a relationship with him. 41 I accept J.R.’s evidence, which was corroborated by T.T., that she found W.F.M.’s telephone calls profoundly distressing and demeaning. I find J.R.’s version of the telephone calls reliable; her evidence accords with the preponderance of probabilities a reasonable person would recognise in the circumstances of the case. 42 The last time her father telephoned J.R. was around the time of her 23rd birthday. The last time she actually spoke to him was sometime before that. 43 J.R. was not invited to her father and J.D.M’s wedding. 106 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

44 J.R. attended her father’s funeral. She altered her vacation plans to do so. 45 It is uncontroversial that in the period that she did attend school, J.R. excelled academically. J.R. who took piano lessons until she ran away as a young teen, progressed to a Grade 8 level in the Royal Conservatory of Music. Sadly, because of the path her life took when she was a young teen, J.R. never graduated from high school nor did she ever complete a high school equivalency program. 46 In 1994 J.R. took two night school courses and later that year she enrolled in Trend College. She attended college full-time for nine months and obtained her qualifications as a legal secretary. She financed her education through some savings and student loans. 47 I accept J.R.’s evidence, as corroborated by E.S., that W.F.M. often promised J.R. that he would pay for her and her brother’s post-secondary education. As events transpired, he made no contribution whatsoever to J.R.’s education. 48 J.N.M. attended university and obtained an engineering degree. Ac- cording to J.D.M., W.F.M. paid at least some portion of J.N.M.’s tuition and also assisted him with the purchase of a car and motorbike. While J.R. has remained on friendly terms with her brother, who now lives in California, they are not close. 49 I turn to consider the personal circumstances of each of J.R. and J.D.M.

J.R. 50 J.R. is currently 41 years old. She married R.R. in November 1999 and they have one son, who was born on April 20, 2000. 51 As an adult, J.R. suffers from chronic musculoskeletal pain. Although there was some suggestion that it is attributable to the heavy work she performed as a child, the evidence on this point was not well-developed. In the absence of any medical evidence I am unable to make any findings on her current condition or whether it is linked to the physical labour she was required to carry out while growing up. 52 J.R. worked for five years as a legal secretary. She then assisted her husband with his hot tub business for awhile. In 2004, she purchased a fish and chips restaurant and operated it for three years. In 2007, she sold that restaurant and resumed working in her husband’s business until 2010. Since 2010, she has been a full-time homemaker. R. (J.) v. M. (J.D.) Dardi J. 107

53 J.R. and her husband have a comfortable lifestyle. She is not in financial need. 54 The evidence establishes that J.R.’s total income was $10,450 in 2012, $7,436.96 in 2013, and $10,452.71 in 2014. Her husband continues to operate his hot tub business. His total income was $288,224 in 2012, $8,485 in 2013, and $6,472 in 2014. His average income from 2009 to 2014 was $85,551. 55 There was no evidence of the date of death values of J.R.’s assets. 56 The 2015 assessed value of the residence owned by J.R. and her husband was $1.7 million. The property is encumbered with a $330,000 mortgage and a $70,000 secured line of credit. 57 As of 2014, the value of the investments that J.R. held in her own name was comprised of: Questrade Margin Account $82,087.56 $59,364.61 TFSA Invest- ments $5,536.80 RRSP $17,186.15 CIBC Wood Gun- RRSP $162,481.89 In- $328,920.84 dy vestments $161,188.95 TFSA - $5,250.00 RBC Investments $140,523.97 Total $551,532.37 58 As of the date of trial, the total value of J.R.’s investments had de- creased by approximately $60,000.

J.D.M. 59 J.D.M., who was 61 years old as of trial, was married to W.F.M. for eight years. Her prior two marriages ended in divorce. She has two adult children, a son and a daughter, from her first marriage. 60 J.D.M. trained as a registered nurse and she obtained a health care management degree from BCIT in the 1980’s. W.F.M. paid for J.D.M.’s tuition for a Master of Arts in leadership in healthcare program which she enrolled in shortly before W.F.M. passed away. She completed the program, and since December 2015, has been working full-time as a clinic’s operation manager at a local hospital. She currently earns an annual salary of $91,000. Her annual income in 2012 was $59,266. 108 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

61 J.D.M. and W.F.M. were companions from 1989 until 2001, when he decided to pursue a relationship with another woman. They resumed their relationship in 2003. As I mentioned, they were married on May 8, 2004. They did not cohabit prior to their marriage. 62 J.D.M,’s uncontroverted evidence is that she and W.F.M. had a happy marriage. They travelled two to three times per year including taking Mexican and Caribbean cruises and trips to England. After they married, J.D.M. who was working full-time as a registered nurse, agreed to change her employment status to that of a casual employee in order to permit her the flexibility to travel with W.F.M. 63 According to J.D.M., during their marriage, W.F.M. had a close relationship with her adult children and grandchildren. He assisted her daughter financially. Notably, when he was seeing J.D.M. in the 1990’s W.F.M. told his friend and accountant Herman Godefroy, that he wanted no involvement in raising her children. J.D.M. never permitted W.F.M. any opportunity to discipline her children. She described W.F.M. as dog- matic and admitted in cross-examination that he was “extremely authoritarian”. 64 J.D.M. and W.F.M. kept separate finances during the marriage. J.D.M. contributed $600 per month towards living expenses and W.F.M. paid the bills. W.F.M. was very private about his financial affairs. J.D.M. did not know what his income was and she had no knowledge about his investments. They never discussed their respective wills or testamentary intentions. 65 J.D.M.’s last will that she executed in 2005 bequeaths some personal effects to W.F.M. However her will leaves the entirety of the residue of her estate to her children if they survive her. 66 J.D.M. brought no assets into the marriage and she did not contribute to the purchase or maintenance of the Property where she has resided since 2004. In 2011, W.F.M. transferred the title of the Property into joint tenancy with J.D.M. Title passed to her by right of survivorship upon W.F.M.’s death. The only evidence on the valuation of the Property is the B.C. Assessment value of $732,000 in 2012. As of W.F.M.’s death, the Property was not subject to any financial encumbrances. On W.F.M.’s death J.D.M. also became the sole owner of the vehicle that they had purchased for $28,000 in 2012. She received life insurance proceeds of $102,000 and was the sole designated beneficiary of W.F.M.’s RRSP that had a market value of $141,756. R. (J.) v. M. (J.D.) Dardi J. 109

67 J.D.M. owned no other significant assets as of the date of W.F.M’s death. 68 As a result of W.F.M.’s death, J.D.M. receives a widow’s pension of $530 per month and a spousal pension of $2,500 per month from W.F.M.’s former employer. Therefore, she has entitlement to pension benefits of $36,360 annually for her lifetime. Upon her retirement she will also be eligible for her own modest pension from the Fraser Health Authority.

THE WILL 69 As mentioned, the Will leaves W.F.M.’s entire estate to J.D.M. if she survived him for 30 days. In the event that she failed to survive him for the stipulated 30 days, which did not occur, the Will directs that the estate be divided equally between J.N.M. and each of J.D.M.’s two children. 70 W.F.M. did not provide any written statement as to his reasons for disinheriting J.R., either in the Will or at all. 71 Mr. Boisvert, the notary public who prepared and witnessed W.F.M.’s Will, testified at trial. I will return to his evidence later in these Reasons.

THE ESTATE 72 The date of W.F.M.’s death is the appropriate date at which to assess the value of the estate: Graham v. Chalmers, 2010 BCCA 13 (B.C. C.A.) at para. 35; and Eckford v. Van Der Woude Estate, 2014 BCCA 261 (B.C. C.A.). 73 The gross value of the estate declared for probate purposes was $625,556.75, with debts declared at $40,423.28. However, it is common ground that there was incomplete disclosure by J.D.M. when she was acting as executrix. 74 According to the testimony of Jackie Sewell, a representative of Solus Trust, the value of the estate as of August 22, 2012 is estimated at approximately $775,000. This valuation, which I accept, was not disputed by J.D.M. 75 The current value of the estate is estimated at $760,000. Solus Trust calculates that J.D.M. owes an additional $30,000 to the estate. 110 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

76 The date of death valuation of the estate and the current value of the estate cannot be determined with exactitude because J.D.M. has not yet provided a full accounting. 77 There are expenses properly payable by the estate in the form of probate fees, remuneration of Solus Trust, and legal fees relating to the administration of the estate, and the like. While I have not been provided with the precise calculations, based upon my review of the accounting provided, it is reasonable to estimate that the net value of the estate will be in the range of $725,000-$735,000. 78 I am mindful of the caution expressed by the Court of Appeal in Gra- ham, with respect to awarding a variation in the form of a specific bequest. However, in light of the disputed accounting issues, counsel agreed that in this case if the Court varied the Will, a variation in the form of a specific bequest would be appropriate. I share that view.

POSITION OF THE PARTIES 79 The plaintiff submits that W.F.M. did not act as a judicious parent in disinheriting her. Accordingly, she seeks a variation such that she receives a specific bequest of $500,000. 80 J.D.M. counters with the submission that she is the deserving recipient of the entirety of her late husband’s estate and that there is no princi- pled basis to support a variation in J.R.’s favour. Her overarching submission is that any moral duty W.F.M. may have owed J.R. was negated by her twenty year estrangement from her father which she alleges was created and perpetuated by J.R.

LEGAL FRAMEWORK 81 The key provision of the WVA is s. 2. That section provides that if, in the Court’s opinion, a will fails to make adequate provision for the proper maintenance and support of the testator’s spouse or children, the Court is empowered, in its discretion, to vary the will to make provision that it considers adequate, just and equitable in the circumstances. 82 Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (S.C.C.), is the governing authority in British Columbia on the WVA. McLachlin J., as she then was, writing for the Court, articulated the relevant considerations and principles that animate the application of the WVA. The fundamental approach is anchored in her observation that “[t]he search is for contemporary justice”: Tataryn, at 815. The courts must read the WVA “in light R. (J.) v. M. (J.D.) Dardi J. 111

of modern values and expectations” and “are not necessarily bound by the views and awards made in earlier times”: Tataryn, at 814-815. 83 The Court in Tataryn stated that the determination of whether a will makes adequate provision and, if not, what provision would be adequate, just and equitable, are “two sides of the same coin”: Tataryn, at 814. 84 The primary statutory objective of the WVA is the adequate, just, and equitable provision for a testator’s spouse and children. As identified in Tataryn, the other protected interest is testamentary autonomy. However, testamentary freedom must yield to the extent required to achieve adequate, just, and equitable provision for the applicant spouse and/or children. In that sense and to that degree only, testamentary autonomy will be curtailed by the application of the WVA: McBride v. McBride Estate, 2010 BCSC 443 (B.C. S.C.) at para. 125. The Court of Appeal in Chan v. Lee, 2004 BCCA 644 (B.C. C.A.) at para. 43 affirmed that courts should not approach the WVA as a means “to right all the perceived wrongs of the past” or “to improve upon the degree of fairness of a will” if the testator has met his obligations under the WVA. 85 In addressing the adequacy of the testamentary provision, Madam Justice McLachlin clarified that the question of whether a testator has acted as a judicious parent or spouse is measured by an objective standard, assessed in light of current societal legal norms and moral norms. As outlined in Tataryn, legal norms are the obligations that the law would impose upon the testator during his or her life if the question of provision for a claimant’s spouse or child were to arise. A testator’s moral duties are grounded in “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards”: Tataryn, at 820-821. 86 The concept of adequate provision is a flexible notion which turns on the particular circumstances of the case: Dunsdon v. Dunsdon, 2012 BCSC 1274 (B.C. S.C.), at para. 131. Tataryn expressly acknowledged that moral duties are more susceptible to being viewed differently by different people because there is no clear legal standard by which to judge such duties: Tataryn, at 822. However, the analysis in Tataryn under- scores that the court must apply an approach that accords with a contemporary view of marital and parental obligations. 87 The Court in Tataryn recognized that the foregoing assessment necessarily involved the balancing of competing claims, and held that where the size of the estate permits, all moral and legal claims should be satisfied. Where prioritization is necessary, generally, claims that would have 112 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

been recognized as legal obligations during a testator’s lifetime take precedence over moral claims. The court must also weigh the competing moral claims and assign each its priority according to their relative strength: Tataryn, at 823. The Court recognized that such an analysis would produce a range of options for the distribution of assets which might be considered appropriate in the circumstances. The court should only make an order to vary a will where the testator’s chosen distribution falls outside of this range. 88 The jurisprudence also establishes that in determining whether the will-maker has fulfilled his or her obligations, the court may consider gifts made outside the will. If a will-maker has made inter vivos gifts to individuals other than the claimant or has arranged his affairs to facilitate a passing of assets to such individuals outside the framework of the will, the moral duty to a claimant may be intensified: Wong v. Cheung Estate, 2015 BCSC 1741 (B.C. S.C.). Conversely and depending on the circumstances, a will-maker’s moral duty may be diminished or negated entirely where he or she has made gifts to a claimant either before death or in consequence of it: Dunsdon v. Dunsdon [2012 CarswellBC 2595 (B.C. S.C.)] at para. 185; Doucette at para. 84. 89 The legislated scheme of intestate succession does not serve as a guidepost in determining whether adequate provision has been made under the WVA: Wilson at para. 379; Hall v. Hall Estate, 2011 BCCA 355 (B.C. C.A.) at para. 46. 90 In reference to the moral claim of independent adult children, the Court in Tataryn observed that while they “may be more tenuous” than that of a spouse or dependent child, some provision for adult independent children should be made if the size of the estate permits and in the absence of circumstances that would negate the existence of such an obligation: Tataryn, at 822-823. 91 In Dunsdon Madam Justice Ballance conveniently summarized the considerations that inform the existence and strength of a testator’s moral duty to independent children: [134] In the post-Tataryn era, the following considerations have been accepted as informing the existence and strength of a testator’s moral duty to independent children: • relationship between the testator and claimant, including abandonment, neglect and estrangement by one or the other; • size of the estate; • contributions by the claimant; R. (J.) v. M. (J.D.) Dardi J. 113

• reasonably held expectations of the claimant; • standard of living of the testator and claimant; • gifts and benefits made by the testator outside the will; • testator’s reasons for disinheriting; • financial need and other personal circumstances, including disability, of the claimant; • misconduct or poor character of the claimant; • competing claimants and other beneficiaries: (See Clucas v. Clucas Estate, [1999] B.C.J. No. 436 (B.C. S.C.); McBride v. McBride Estate, 2010 BCSC 443 (B.C. S.C.); Yee v. Yu, 2010 BCSC 1464 (B.C. S.C.); Wilson v. Lougheed Estate, 2010 BCSC 1868 (B.C. S.C.)) 92 In assessing the strength of the legal and moral obligations owed by a testator to a second spouse, the court will consider factors such as: (a) The length of the marriage; (b) When and how the testator’s assets were acquired; (c) The contribution of the second spouse; (d) How family assets would be divided under the applicable family legislation upon marriage breakdown; (e) Competing obligations with the children from the first marriage; (f) Financial circumstances of the spouse; (g) The size of the estate; and (h) The magnitude of assets passing to the spouse outside of the estate in consequence of other pre-death transactions undertaken by the testator. [See Wong v. Cheung Estate, 2015 BCSC 1741 (B.C. S.C.) at paras. 73- 82; Saugestad v. Saugestad, 2006 BCSC 1839 (B.C. S.C.), varied on different grounds 2008 BCCA 38 (B.C. C.A.); Mawdsley v. Meshen, 2010 BCSC 1099 (B.C. S.C.), affirmed 2012 BCCA 91 (B.C. C.A.); Ciarniello v. James, 2016 BCSC 1699 (B.C. S.C.)]

ANALYSIS 93 The question that lies at the heart of this dispute is whether, having regard to all the circumstances, W.F.M.’s testamentary disposition for J.R. falls within the range of adequate provision that would have been made by a judicious parent. The adequacy of provision is to be assessed objectively by reference to contemporary community standards and in 114 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

accordance with society’s reasonable expectations. The circumstances existing at W.F.M.’s death, as well as those that were reasonably foresee- able to him at that time, are to be taken into consideration in determining whether W.F.M. made adequate provision for J.R.: Eckford at para. 53. It is agreed that J.R. does not have any legal claim against the estate. This case turns on a determination of the nature and extent of the moral obligation W.F.M. may have owed J.R. and whether it has been negated. 94 Applying the Tataryn principles, the size of the estate in this case is such that some provision should be made for J.R. unless there are circumstances that would negate such an obligation. In its assessment, the Court must balance any moral claim owed to J.R. with J.D.M.’s competing moral and legal claims. 95 It is common ground that the WVA is not intended as a tool to award compensation to an aggrieved claimant for past mistreatment. However, the Court of Appeal in Sawchuk v. MacKenzie Estate, 2000 BCCA 10 (B.C. C.A.), and in Doucette v. Doucette Estate, 2009 BCCA 393 (B.C. C.A.) endorsed the notion that, where a parent has treated a child un- fairly, a judicious parent, would recognize an enhanced moral duty to provide for that child. 96 In this case I find that W.F.M.’s sexual conduct, his emotional abuse, his failure to provide for J.R. when she was in foster care, the lack of any material financial or emotional support during her formative years after she left his home and the absence of any genuine effort to repair their fractured relationship informs the assessment of the strength of his moral duty to J. R. W.F.M.’s mistreatment of his daughter from a young age, had a profoundly negative emotional impact upon her. His abdication of his parental responsibilities and his stubborn refusal to assist and protect J.R. when she was a vulnerable and troubled teen in foster care dramatically impacted the course of her life. The loss of a safe and stable home and the termination of her high school education had lasting and adverse consequences for J.R. Even though J.R. had excelled academically and W.F.M. had made promises to her regarding a university education, the opportunity to attend university was foreclosed to J.R, largely if not exclusively, in consequence of his abusive and deficient parental conduct. 97 As I referred to earlier, W.F.M. made no material financial contribution to J.R.’s support after the age of 13. In Lukie v. Helgason (1976), 1 B.C.L.R. 1 (B.C. C.A.), Taggart J.A. expressed the view that the failure to provide support to a child during his or her minority is alone an insufficient basis for granting relief under the WVA. However, he affirmed R. (J.) v. M. (J.D.) Dardi J. 115

that the history of the relations between the testator and the claimant is evidence the court may consider along with all the other circumstances in deciding whether relief should be granted. The more recent jurisprudence supports the view that the failure of a parent to financially contribute to a child’s support during his or her minority is a factor in assessing his or her claim (See: Martin v. McIlwain Estate (1992), 66 B.C.L.R. (2d) 195 (B.C. S.C.); Thatcher v. Bowling [1990 CarswellBC 560 (B.C. S.C.)], 1992 CarswellBC 105 (B.C. S.C.)). The court in Pattie v. Standal Estate (1997), 42 B.C.L.R. (3d) 211 (B.C. S.C.) at para. 26, found that, in the absence of special circumstances, such a failure creates a basis upon which an adult child may advance a moral claim to a share of his or her parent’s estate. 98 I turn next to consider whether W.F.M.’s moral duty to J.R. has been negated. 99 When faced with a long period of estrangement as in this case, the court will inquire into the role played by the testator. If the estrangement is largely the fault of the testator, it will likely not negate a testator’s moral duty to an adult child. McBride, at para.132; Gray v. Gray Estate, 2002 BCCA 94 (B.C. C.A.) at paras. 17-21. The Court’s summary at para.132 of McBride is of particular relevance to this case: [132] In the early development of the caselaw, a long period of separation, abandonment or estrangement between a child and testator was frequently, though not invariably, taken to militate against finding a moral duty to an adult child. The modern judicial trend indicates that the court will enquire into the role played by the testator in the estrangement or relationship breakdown, and where it is seen to be largely the fault of or at the insistence of a testator, it will likely not negate a testator’s moral duty, and may even enhance it. The weight of the authorities also indicates that the court may discern a moral duty as a means of rectifying the testator’s childhood neglect of the children: Gray v. Gray Estate, 2002 BCCA 94, 98 B.C.L.R. (3d) 389, Doucette v. Clarke, 2007 BCSC 1021, 35 E.T.R. (3d) 98 [Doucette]; Tomlyn v. Kennedy, 2008 BCSC 331, 38 E.T.R. (3d) 289; Wilson v. Watson, 2006 BCSC 53, 21 E.T.R. (3d) 285; P.S.G. v G.G. Estate, 2005 BCSC 1855; Ryan. 100 J.D.M. contends that J.R. “created and perpetuated” the estrangement with her father. For the reasons that follow, I reject this submission. 101 As I referred to earlier after her parents separated, J.R. lived with her father from the ages of 9 to 13. J.D.M. points out that during this period W.F.M. worked shift work and that he was embroiled in an acrimonious 116 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

matrimonial dispute. While acknowledging that W.F.M. “made some mistakes” during this time and should have modified his behaviour, J.D.M. says that it is regrettable that J.R. “made no effort to assist him with modifying his behaviour” and that J.R. “denied him the opportunity to learn and change”. I reject this ill-considered submission. An inherent power imbalance existed between this young girl and her father. W.F.M. occupied a position of trust of the highest order. J.R. at a young age had been subjected to a very difficult home life and she should have been able to turn to her father for comfort and protection. Instead, he profoundly betrayed that trust for his own selfish ends. 102 I have carefully reviewed the three cards that W.F.M. sent to J.R., dated July 1, 1989, February 14, 1990 and December 25, 1990. J.R., a young teen at the time, was unable to recall how or when she received them. 103 Although W.F.M. professes some expressions of love in the cards, J.R. as a young teen, did not perceive his expressions as genuine. She reasonably interpreted her father’s messages as implying that she was at fault for the circumstances in which she found herself. While he purported to offer assistance he refused to pay for her foster care. The cards reveal no insight into his role in the unfolding of her sad story. In all the circumstances, I find that the cards are insufficient to support a notion that J.R., who had been terrified of her father, reasonably should have initiated some form of contact or reconciliation with her father. In response to a question in cross-examination as to why as a young teen-ager she never called her father for help, J.R. answered: I was - I would not call my father. I was too scared to call my father. He was extraordinarily cheap. He never paid for anything after the age of 13, so he wouldn’t pay my mother for child support while I lived there, so I really had no reason to believe and, you know, he fought her on everything. I had no reason to believe that he was going to help me. 104 The evidence establishes that for a period of time after she left foster care W.F.M. called J.R. on her birthday; sometimes he spoke to her and sometimes he left messages. However, as I mentioned, the evidence supports a finding that these were vindictive and demeaning calls in which W.F.M. berated her. The calls ceased when J.R. was about 23 years old. When she was in her early 20’s, W.F.M. flatly refused to meet with J.R. at the bank when she offered him the opportunity to do so. After her son was born in 2000, E.S. suggested that W.F.M. telephone J.R. at E.S.’s R. (J.) v. M. (J.D.) Dardi J. 117

home during their Christmas celebration. He declined to do so and told E.S. that he preferred to “not open that can of worms”. 105 J.R. provided a compelling explanation for not contacting her father as an adult. As I outlined above, he had failed to provide her with any material or emotional support in her formative teen years. J.R. persuasively explained that, she never reached out to her father as an adult because she never, at any time, received any indication that her father had changed. There had been nothing positive or healthy in their telephone interactions and J.R. reasonably believed that her father had no genuine interest in making amends or pursuing any reconciliation. Nothing in his conduct would have led her to believe otherwise. 106 In all the circumstances, I conclude that W.F.M.’s moral duty to J.R. has not been negated. It was W.F.M. that bore the responsibility for the estrangement with his daughter that ensued after she left foster care. It was his mistreatment of J.R. and the voluntary abdication of his parental obligations that caused the fracture of the father-daughter relationship. The onus for repairing the relationship and seeking any form of reconciliation with his daughter rested squarely with W.F.M. His blameworthy conduct enhanced his moral duty to her. 107 J.D.M. opposes any variation in reliance on the principles enunciated in Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213 (B.C. C.A.), and Kelly v. Baker (1996), 82 B.C.A.C. 150 (B.C. C.A.). For the reasons that follow, I am of the view that those principles do not assist her. 108 In Bell the Court of Appeal held that where financial need is not a factor, if the court finds that a testator’s reasons purporting to explain a disinheritance are valid and rational, the testator’s moral duty in respect to that child is negated; the burden then shifts to the plaintiff to show that the will-maker’s reasons were false or unwarranted: McBride at para. 138. In a subsequent decision, Kelly the Court of Appeal reaffirmed the requirement that the testator’s reasons must be valid, meaning factually true, and rational, in the sense there is a logical connection between the reasons and the act of disinheritance. The Court went on to conclude that the contents of the testator’s reasons for disinheriting a child need not be justifiable. 109 In McBride, Madam Justice Ballance observed that it is difficult to reconcile the analytical framework endorsed in Bell and Kelly with the fundamental principles of Tataryn, that a testator’s moral duty must be assessed objectively from a standpoint of what a judicious parent would do in the circumstances, by reference to contemporary community stan- 118 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

dards. Notably, McLachlin J., as she then was, cited Bell as an example of a case where a testator’s moral duty was seen to be negated, but she did not clarify whether the propositions formulated by Goldie J.A. were sound. 110 As I noted in Hancock v. Hancock Estate, 2014 BCSC 2398 (B.C. S.C.), the analytical approach and commentary in various authorities from this Court, decided subsequent to McBride, underscore the uncertainty regarding the apparent incompatibility between the analytical framework articulated in Bell and Kelly, on the one hand, and Tataryn on the other. This question has engendered significant judicial commentary: Brown v. Wisted Estate, 2010 BCSC 1890 (B.C. S.C.) at para. 115; LeVierge v. Whieldon Estate, 2010 BCSC 1462 (B.C. S.C.); Schipper v. Schipper Estate, 2010 BCSC 1067 (B.C. S.C.); Holvenstot v. Holvenstot Estate, 2012 BCSC 923 (B.C. S.C.); McEwan v. McEwan, 2014 BCSC 916 (B.C. S.C.); Kong v. Kong, 2015 BCSC 1669 (B.C. S.C.). 111 Notably, however, in Hall v. Hall Estate, 2011 BCCA 354 (B.C. C.A.), the Court of Appeal applied the analytical approach endorsed in Kelly, without any critical commentary. As is the case with Kelly and Bell, it is difficult, in light of the particular facts, to challenge the result in Hall. However, based on comments in the more recent jurisprudence from the Court of Appeal in Scott-Polson v. Lupkoski Estate, 2013 BCCA 428 (B.C. C.A.), I respectfully observe that it may be an unsettled question in this province as to whether the formulation of the analytical approach applied in Kelly can be reconciled with the core principles of Tataryn that mandate an objective assessment of a testator’s moral duty. In Scott-Polson, Madam Justice Newbury, in obiter dicta, instructively remarked at para. 43: [43] ... The legally significant finding in terms of the trial judge’s reasoning, however, was that the explanation given in her will was “valid and rational” (see para. 76), or “genuine and valid” (see para. 83). I agree with the trial judge’s comment at para. 84 that this was a “relevant circumstance”. Given this, and given the fact that the plaintiffs did not pursue their cross appeal, it is not necessary for us to consider whether it is in law determinative of what a fair and judicious parent would have thought appropriate. (See McBride v. Voth, supra, at paras. 135-42.) That issue, if it is seen as one, must await another day. [Emphasis in original.] 112 In my respectful view, there are sound reasons for raising the question of whether the analytical approach endorsed in Kelly is reconcilable R. (J.) v. M. (J.D.) Dardi J. 119

with Tataryn. This is particularly apparent in the absence of the clear culpability of a claimant for his or her estrangement from a testator. However, in the final analysis, this Court, in accordance with the principle of stare decisis, must continue to apply the analytical framework articulated in Kelly and Bell. 113 The Bell/Kelly model of inquiry and the subsequent appellate authorities that have applied that analysis are predicated on an express statement having been made by a testator explaining the reasons for disinheriting a claimant and/or for the distributions made in a will. The subsequent authorities have held that the court is not limited to considering only those reasons expressed by the testator in the will itself. The court may examine all properly admissible evidence to determine the reliably ascertainable reasons for a will-maker’s testamentary dispositions. However, the pertinent authorities do not endorse the court “conducting an open- ended roving inquiry of the circumstantial evidence to ascertain whether a testator’s plan has a valid and rational basis”: Wilson v. Lougheed Es- tate, 2010 BCSC 1868 (B.C. S.C.) at para. 397; Hancock at para. 63. 114 As I noted earlier, there is neither a statement in the Will of W.F.M.’s reasons for disinheriting J.R. nor any evidence of any written statement regarding those intentions. I will next consider whether his reasons are reliably ascertainable on the evidence. 115 On July 14, 2011, W.F.M. met with a notary public, Mr. Boisvert, to prepare the Will. Mr. Boisvert testified at trial and his file was tendered in evidence. His file includes a standard wills information form that includes his contemporaneous notes. 116 In the section entitled “CHILDREN”, Mr. Boisvert made the following notation beneath J.R.’s name: No contact in last 10 or more years. 117 In the section that references the exclusion of a spouse or child Mr. Boisvert has written “J.”. However the section entitled “Reason” is left blank. Under the heading “WVA NOTES” Mr. Boisvert made the following notation: To write a letter. Had not written it prior to signing will but said he would do it. 118 In response to his question about J.R., W.F.M. told Mr. Boisvert that it had been ten or more years since he had either spoken to her or seen her. 120 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

119 Mr. Boisvert urged W.F.M. to set out his reasons for disinheriting J.R. in a letter or memorandum. He asked W.F.M. to provide it to him at their next meeting so it would be included as part of his will. As I have indicated, W.F.M. never did so. 120 Mr. Godefroy, his accountant, raised the subject of estate planning with W.F.M. on an annual basis every income tax season. Sometime in mid-1990 W.F.M. told Mr. Godefroy that he wanted “to take J.R. out of his will”. He did not provide any reasons to Mr. Godefroy for his decision. Mr. Godefroy emphasized to W.F.M. that it was important that he include his reasons in his will. W.F.M.’s response was to the effect that “the courts will decide”. 121 Sometime after its execution, W.F.M. told Mr. Godefroy that he had made the Will and had left everything to J.D.M. Mr. Godefroy asked him if he had explained in writing why his children were excluded. In their discussions the only statement made by W.F.M. about J.R. was that he had not seen her for some time. However, W.F.M. never once mentioned why he had not seen her. Nor did he ascribe any fault to her for the lack of contact. Mr. Godefroy advised W.F.M. to seriously consider preparing a memorandum explaining the provisions in his will. W.F.M. did not follow his advice. 122 W.F.M.’s lack of contact with his daughter, in itself, constitutes the sole reason for the disinheritance. Despite being urged by two professional advisors to do so W.F.M. failed to make any statement in writing regarding his reasons for disinheriting his daughter. Within the Bell/Kelly analytical framework, I conclude that, although it was true that there had been an estrangement, W.F.M.’s reason for the disinheritance was not rational in the sense of having a logical connection to the act of disinheritance. It was W.F.M.’s conduct, not that of J.R., that lie at the root of their estrangement. It cannot fairly be said that J.R. was morally blameworthy, such as would be the case where a child neglects or ig- nores a parent. The estrangement in this case was not the fault or at the insistence of J.R. Rather J.R.’s lack of effort to re-establish contact with her father was a reasonable reaction to his mistreatment of her. In these circumstances it would be most unjust if the court were to conclude that their estrangement attenuated W.F.M.’s moral duty to J.R. 123 Viewing the facts of this case objectively, as of the date of his death, a judicious parent in W.F.M’s circumstances would have recognized a moral obligation to J.R. In weighing the totality of the evidence and, having regard to the relevant legal principles, I conclude that W.F.M. did not R. (J.) v. M. (J.D.) Dardi J. 121

discharge the moral obligation of a contemporary judicious parent. J.R. has established that her disinheritance was not warranted. 124 At some point after their divorce and after he had married J.D.M., W.F.M. told E.S. that he intended to leave his estate to his children. This evidence may be interpreted as demonstrating that W.F.M., at least to some degree, recognized he owed a moral duty to J.R. Although relevant in the overall analysis, this is by no means determinative of whether this Court should exercise its discretion to vary W.F.M.’s testamentary disposition. Indeed, as the Court observed in Dunsdon, in the vast majority of cases when a court finds a testamentary disposition to be inadequate and varies a will, it does so in the face of a will-maker’s contrary intention: Dunsdon, at para. 190. 125 The comments of Donald J.A. in Gray in addressing the moral claim of an adult child in a WVA claim are apposite in this case: [17] I cannot accept that a child so neglected for his first 18 years and then treated shabbily during a brief reconciliation can be said to for- feit the moral claims to a share in his father’s estate by abandoning any further effort to establish a relationship. The fault in this sad story lies with the father and, in my opinion, the onus to seek further reconciliation was on his shoulders. The testator gave the appellant virtually nothing in an emotional or material way; the will was his last opportunity to do right by his son. 126 Like the will-maker in Gray, this was W.F.M.’s last opportunity to do right by his daughter. He failed to do so. 127 I turn to consider W.F.M.’s legal and moral duty to J.D.M. under the Tataryn framework. 128 The Court in Tataryn suggested that guidance considering a testator’s legal obligations while he or she was alive may be found in the Divorce Act, R.S.C. 1985, c. 3 (2 Supp.), family property legislation or the law of constructive trust. In Tataryn however, the court did not conduct a detailed examination or make specific findings concerning property or how much support Mrs. Tataryn would have been entitled to in the event of a separation: Kish (Litigation guardian of) v. Sobchak Estate, 2016 BCCA 65 (B.C. C.A.). 129 The judicial approach in British Columbia following Tataryn has been to determine the legal obligations to a spouse by considering the spouses’ entitlement on a notional separation immediately prior to death: Ciarniello at para. 70. However, Madam Justice Newbury affirmed in Kish that the analysis of a deceased spouse’s legal obligation need not be 122 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

detailed or exact given the difficulty of drawing a direct analogy between the consequences of a marriage breakdown - which leaves both spouses with needs and obligations - and the death of a spouse. She underscored at para. 49 that an action under the WVA “should not normally become a proxy for divorce proceedings, complete with elaborate features and special rules applicable to a family law trial”. 130 In this case it is common ground that the Family Relations Act, R.S.B.C. 1996, c. 128 [FRA] should govern the analysis because that was the legislative scheme in force at W.F.M.’s death. 131 The FRA provides in s. 56(2) that each spouse is entitled to an undi- vided half interest in family assets (absent a marriage agreement to the contrary) upon the happening of one of the events enumerated in s. 56(1), commonly known as a “triggering event”. Sections 58 and 59 define family assets. Pursuant to s. 65, if the division of property between spouses under the prescribed equal division would be unfair, having regard to the factors enumerated in s. 65(1), the court may order the property be divided into shares fixed by the court. 132 The first step in the analysis is to assume a notional separation of the parties immediately before death. I note that the evidence on what constituted a family asset was not well-developed. For purposes of the analysis, I have assumed that the Property with an assessed value of $732,00, W.F.M.’s RRSP valued at approximately $140,000 and the car valued at $28,000 were family assets. Given the imperfect evidence I have also included W.F.M.’s investments, bank accounts and interest in his num- bered company with a total value of approximately $775,000 as family assets. W.F.M. had liabilities of approximately $35,000 as of the date of his death. The total value of the family assets less liabilities equals $1,640,000. A notional equal division of those assets is assessed at $820,000. 133 In a case such as this involving an eight year marriage and where there was no contribution by J.D.M. toward the acquisition of the family assets in all likelihood that there would have been a substantial reappor- tionment in W.F.M’s favour on marital breakdown. She brought no assets into the marriage. As I mentioned, in 2011 W.F.M. transferred the title of the Property into joint tenancy with J.D.M. If one includes the benefits and assets J.D.M. received outside the provisions of the Will, at W.F.M.’s death she held property with a gross value of approximately $1,000,000. In all the circumstances, she received in excess of her notional legal entitlement to family assets. Given the income J.D.M. was R. (J.) v. M. (J.D.) Dardi J. 123

earning in 2012 it is doubtful that, on a family law analysis, an order for spousal support in her favour would have been made. In any case, on W.F.M.’s death J.D.M. became entitled to annual pension payments of $36,360 for her lifetime. 134 I conclude that W.F.M.’s legal duty to J.D.M. under the Ta- taryn framework was amply discharged through the provision W.F.M. made for her outside of the framework of his Will. 135 In its search for contemporary justice, this Court must balance W.F.M.’s legal and moral obligations to J.D.M. with W.F.M.’s moral obligations to J.R. Turning to the moral obligation owing to J.D.M. by the “judicious person” in W.F.M.’s position, more factors come into play. A critical one is J.R.’s competing moral claim. In Tataryn the Court stated in many cases, that the moral claims of a spouse will take precedence over those of an adult child. In this case however, the marriage was neither long nor traditional and J.D.M. and W.F.M. kept separate finances. Given how they chose to conduct their affairs J.D.M. could not have reasonably expected to receive the entirety of W.F.M.’s estate. On the other hand, I conclude that viewed through the lens of “modern values and expectations” W.F.M.’s wish that J.D.M. inherit his estate is an important consideration in weighing the competing moral claims: Kish at para. 63.

DISPOSITION 136 In weighing the totality of the evidence in light of the animating legal principles, I conclude that W.F.M. failed to discharge his moral obligations to J.R. and failed to make adequate provision for her in his will. His disinheritance of her falls outside the range of options a contemporary judicious parent would have considered appropriate in the circumstances. 137 Although I have considered the relative financial circumstances of J.R. and J.D.M. as of the date of W.F.M.’s death, the assessment of his residual moral duty owed to J.R. is not amenable to an arithmetical calculation. 138 It is not the function of this Court to re-write W.F.M.’s Will. Rather, having due regard to testamentary autonomy, it is incumbent on the court to vary the Will, only to the extent required to provide the justice to J.R. that the Will failed to achieve, commensurate with W.F.M.’s moral obligation to her. 139 Based on the foregoing, I calculate that a variation that provides the bequest of $250,000 to J.R. is an adequate, just, and equitable provision. 124 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

140 There will be an order to vary the Will accordingly.

COSTS 141 If the parties are unable to agree on the appropriate costs order, they are at liberty to reserve a date through Supreme Court Scheduling to arrange a hearing date. Action allowed. Gray v. McNeill 125

[Indexed as: Gray v. McNeill] Mary-Jane Gray (Applicant) and Glen Norman McNeill (Respondent) Alberta Court of Queen’s Bench Docket: Calgary ES01-114782 2016 ABQB 645 J.T. McCarthy J. Heard: April 25-27, 2016 Judgment: November 21, 2016 Evidence –––– Corroboration — When required — Actions involving deceased — Miscellaneous –––– Deceased died when she fell from mountain while hiking — Deceased made will in 2006 when she was married that named husband as executor and beneficiary of her estate, but deceased and husband later divorced — Deceased then made will in 2011 that named her mother as executor and sole beneficiary of her estate — 2011 will was made on laptop computer at mother’s kitchen table, with friend acting as witness, but only photocopy of will had been found — Mother applied for validation and rectification of 2011 will; husband applied for order declaring 2011 will invalid on basis that it was forgery — Mother’s application granted; husband’s application dismissed — Mother had contents of deceased’s laptop computer erased days before examination for discovery, and her actions in erasing laptop computer amounted to spoliation — Counsel for both parties agreed that laptop would be examined, and mother engaged in deliberate act to destroy evidence so it was not available for ongoing legal proceedings — Mother did not merely wipe out evidence of deceased’s private life, but also evidence that could prove or disprove whether and when 2011 will was created on laptop — Spoliation created presumption that evidence on computer would have been unfavourable to mother, but presumption was rebutted by other evidence that corroborated mother’s evidence. Estates and trusts –––– Estates — Requirements for due execution of will — General principles –––– Deceased died when she fell from mountain while hiking — Deceased made will in 2006 when she was married that named husband as executor and beneficiary of her estate, but deceased and husband later divorced — Deceased then made will in 2011 that named her mother as executor and sole beneficiary of her estate — 2011 will was made on laptop computer at mother’s kitchen table, with friend acting as witness, but only photocopy of will had been found — Mother applied for validation and rectification of 2011 will; husband applied for order declaring 2011 will invalid on basis that it was for- 126 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

gery — Mother’s application granted; husband’s application dismissed — 2011 will did not comply with formal requirements of Wills and Succession Act, as there was only photocopy, only one witness signed will and there were typographical errors — Mother’s actions in erasing laptop computer before examination for discovery amounted to spoliation, which created presumption that evidence on computer would have been unfavourable to mother, but presumption was rebutted — Weighing evidence as whole, mother’s evidence respecting creation of 2011 will was accepted, as it was corroborated by evidence of independent witnesses — Allegation that will was forgery was implausible in circumstances, as mother was inconsolable after deceased died and she was in no shape to conceive plan to forge will and convince others to participate in plan — 2011 will was validated as setting out final testamentary intentions of deceased. Estates and trusts –––– Estates — Grant of probate or letters of administration — Application for probate — Lost will — Presumption of revocation –––– Deceased died when she fell from mountain while hiking — Deceased made will in 2006 when she was married that named husband as executor and beneficiary of her estate, but deceased and husband later divorced — Deceased then made will in 2011 that named her mother as executor and sole beneficiary of her estate — 2011 will was made on laptop computer at mother’s kitchen table, with friend acting as witness, but only photocopy of will had been found — Mother applied for validation and rectification of 2011 will; husband applied for order declaring 2011 will invalid on basis that it was forgery — Mother’s application granted; husband’s application dismissed — 2011 will was validated as setting out final testamentary intentions of deceased — Due to absence of original 2011 will, which was believed to be in possession of deceased, presumption arose that she destroyed will with intention of revoking it, but considering all evidence presumption was rebutted — Weight of evidence showed that deceased intended to change beneficiary of estate to mother after her divorce, and she did so by creating 2011 will — Independent witnesses provided corroborative evidence that 2011 will was created and evidenced deceased’s testamentary intentions, and there was no evidence to suggest that her intentions changed after she created will — Even if deceased represented to husband that he remained beneficiary of will, statement was likely false as deceased was not always direct with husband, and conversation did not outweigh other evidence that rebutted presumption that 2011 will was destroyed or revoked by deceased prior to her death — On balance of probabilities, 2011 will was lost and photocopy of 2011 will could be admitted to probate. Cases considered by J.T. McCarthy J.: Brimicombe v. Brimicombe Estate (2000), 2000 NSCA 67, 2000 CarswellNS 146, 184 N.S.R. (2d) 315, 573 A.P.R. 315, 34 E.T.R. (2d) 14, [2000] N.S.J. No. 157 (N.S. C.A.) — referred to Gray v. McNeill 127

Bunce Estate, Re (1998), 1998 CarswellAlta 932, 231 A.R. 240, [1998] A.J. No. 1133 (Alta. Surr. Ct.) — followed Curtis, Re (2014), 2014 ABQB 745, 2014 CarswellAlta 2219, (sub nom. Curtis Estate, Re) 603 A.R. 46 (Alta. Q.B.) — considered Doust v. Schatz (2002), 2002 SKCA 129, 2002 CarswellSask 770, [2002] S.J. No. 674, 32 R.F.L. (5th) 317, (sub nom. Schatz v. Doust) 227 Sask. R. 1, (sub nom. Schatz v. Doust) 287 W.A.C. 1 (Sask. C.A.) — considered George v. Daily (1997), 15 E.T.R. (2d) 1, 143 D.L.R. (4th) 273, [1997] 3 W.W.R. 379, 115 Man. R. (2d) 27, 139 W.A.C. 27, 1997 CarswellMan 57, [1997] M.J. No. 51 (Man. C.A.) — considered Goold Estate v. Ashton (2016), 2016 ABQB 303, 2016 CarswellAlta 995, 19 E.T.R. (4th) 314, 39 Alta. L.R. (6th) 147, [2006] A.J. No. 553 (Alta. Q.B.) — followed Harvie v. Gibbons (1980), 12 Alta. L.R. (2d) 72, 16 R.P.R. 174, 109 D.L.R. (3d) 559, 1980 CarswellAlta 20, [1980] A.J. No. 951 (Alta. C.A.) — referred to Kendrick v. Dominion Bank (1920), 48 O.L.R. 539, 58 D.L.R. 309, 1920 Cars- wellOnt 156 (Ont. C.A.) — referred to McDougall v. Black & Decker Canada Inc. (2008), 2008 ABCA 353, 2008 CarswellAlta 1686, 97 Alta. L.R. (4th) 199, [2009] 1 W.W.R. 257, 61 C.C.L.T. (3d) 96, 62 C.P.C. (6th) 293, [2008] A.J. No. 1182, 440 A.R. 253, 438 W.A.C. 235, 302 D.L.R. (4th) 661 (Alta. C.A.) — considered Meisner v. Bourgaux Estate (1994), 131 N.S.R. (2d) 244, 4 E.T.R. (2d) 295, 371 A.P.R. 244, 1994 CarswellNS 112, [1994] N.S.J. No. 255 (N.S. S.C.) — referred to Stochinsky v. Chetner Estate (2003), 2003 ABCA 226, 2003 CarswellAlta 1114, (sub nom. Stochinsky v. Chetner) 330 A.R. 309, (sub nom. Stochinsky v. Chetner) 299 W.A.C. 309, 18 Alta. L.R. (4th) 203, [2004] 3 W.W.R. 54, [2003] A.J. No. 984 (Alta. C.A.) — referred to Statutes considered: Alberta Evidence Act, R.S.A. 2000, c. A-18 s. 11 — considered Matrimonial Property Act, R.S.A. 2000, c. M-8 Generally — referred to Wills Act, R.S.A. 2000, c. W-12 s. 5 — considered Wills and Succession Act, S.A. 2010, c. W-12.2 Generally — referred to s. 8 — considered s. 8(2) — considered s. 15 — considered s. 23(1)(a) — considered s. 26 — referred to s. 37 — considered 128 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

ss. 37-40 — referred to s. 39 — considered s. 40 — considered Rules considered: Surrogate Rules, Alta. Reg. 130/95 Generally — referred to Pt. 2, Div. 3 — referred to R. 24 — considered

APPLICATION by deceased’s mother for validation and rectification of will; APPLICATION by deceased’s husband for order declaring will invalid.

Blair C. Yorke-Slader, Q.C., for Applicant Ivan J. Derer, Q.C., for Respondent

J.T. McCarthy J.: Introduction 1 Michelle Molly McNeill was an avid hiker who died on July 2, 2013. She died when she fell from a mountain while hiking near Canmore, Al- berta. She was 45 years old at the time. After her passing, an issue arose as to which of two wills governs the disposition of her estate. 2 The Applicant Mary-Jane Gray is the mother of the deceased Michelle Molly McNeill. She applies to this Court for validation and rectification of a will allegedly signed by the deceased dated August 22, 2011, which named her as the executor, and sole beneficiary of the estate (the “2011 Will”). The Applicant states that she and a friend were present when the 2011 Will was made by the deceased on a laptop computer at the Applicant’s kitchen table, with the friend acting as witness. The 2011 Will is problematic as only a photocopy has been found, and the will was witnessed by one person instead of two. 3 The Respondent Glen Norman McNeill is the ex-husband of the deceased. He applies for an order declaring the 2011 Will invalid, alleging it is a forgery. He seeks an order directing grant of probate of a will executed by the deceased on August 30, 2006, which names him as executor and beneficiary (the “2006 Will”). The 2006 Will was made when the deceased and Glen McNeill were still married, with the assistance of a lawyer. Glen McNeill states that the deceased told him the 2006 Will was still valid in January 2013, which was two years after their divorce and a few months before she died. He states that he and the deceased Gray v. McNeill J.T. McCarthy J. 129

were still on friendly terms and the deceased was still in possession of the proceeds of a sale of their home. 4 An Order was granted by the Court on March 24, 2015 directing that a hearing be held with oral evidence to determine the following specific issues: 1. Whether a will signed by the deceased dated August 22, 2011 (the “2011 Will”) revoked a will previously signed by the deceased on August 30, 2006 (the “2006 Will”), pursuant to section 23(1)(a) of the Wills and Succession Act (the “WSA”); 2. Whether the deceased revoked the 2006 Will; 3. Whether the 2011 Will can be determined to be valid as the deceased’s last will, despite that the 2011 Will was not made in accordance with section 15 of the WSA, pursuant to section 37 of the WSA; 4. If the 2011 Will is determined to be valid pursuant to section 37 of the WSA, whether the Court will accept the copy of the 2011 Will that was found on the deceased’s death to be submitted for probate as the original copy of the 2011 Will; 5. If the 2011 Will is determined to not be valid as the deceased’s last will pursuant to section 37 of the WSA, whether the Court can rectify the 2011 Will by adding such words as are necessary to show that the 2011 Will was made in accordance with the WSA, pursuant to section 39 of the WSA; 6. If the 2011 Will is determined to not be valid as the deceased’s last will pursuant to section 37 of the WSA, and the Court rectifies the 2011 Will by adding such words as are necessary to show that the 2011 Will was made in accordance with the WSA pursuant to section 39 of the WSA, whether the Court can validate the disposition made in the 2011 Will by the deceased to the individual who acted as a witness to the signature of the deceased, pursuant to section 40 of the WSA; 7. If the 2011 Will is determined to not be valid as the deceased’s last will pursuant to section 37 of the WSA, and the 2011 Will is rectified pursuant to section 39 of the WSA, and the disposition to the witness is validated pursuant to section 40 of the WSA, whether the Court will accept the copy of the 2011 Will that was found on the deceased’s death to be submitted for probate as the original copy of the 2011 Will; 130 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

8. If the 2011 Will is determined not to be valid pursuant to section 37 of the WSA, and if the 2011 Will is rectified pursuant to section 39 of the WSA and the disposition to the witness is validated pursuant to section 40 of the WSA, and the Court will not accept the copy of the 2011 Will that was found on the deceased’s death to be submitted for probate as the original copy of the 2011 Will, then the applicant will apply to formally prove the 2011 Will pursuant to Part 2, Division 3 of the Surrogate Rules (the “Surrogate Rules”); 5 The Order provides that after hearing the oral evidence pertaining to these issues, this court has the discretion to make a final order of judgment on the specified issues: 3. The judicial determination of the issue(s) for which oral evidence is permitted by this Order may, in the discretion of the Justice presiding at the hearing, result in a final order of judgment on that/those issues.

Statement of Agreed Facts, Exhibits and Issues 6 The parties presented the Court with an Agreed Statement of Facts, Exhibits and Issues.

Facts The Parties 7 Michelle Molly McNeill died when she fell while hiking in Canmore on July 2, 2013. She was 45 years old. 8 For the 5 years preceding her death, Michelle had been living with her mother, Mary-Jane Gray, at Mary-Jane’s home in Calgary. 9 Glen McNeill is Michelle’s ex-husband. They were married in July 1992 and were divorced in February 2011. 10 The Wills 11 Michelle’s will that is sought to be validated and probated is dated August 22, 2011. Mary-Jane is named therein as the executor and sole beneficiary. The original will is missing; this application seeks to validate and probate a copy. 12 Michelle had an older will dated August 30, 2006, by which she left the residue of her estate to her then spouse, Glen, failing which to their children, if any (they had none), failing which to Mary-Jane. Gray v. McNeill J.T. McCarthy J. 131

13 There is an essentially identical will of the same date by which Glen left the residue of his estate to his then spouse, Michelle, failing which to any children, failing which to Mary-Jane. Mary-Jane was named as an alternative executor in both of the August 30, 2006 wills, which were prepared by a lawyer. 14 There is also another will dated August 22, 2011, prepared by Mary- Jane, by which she named Michelle as executor, and left the residue of her estate equally to Michelle and to her brother Cory. No lawyer was involved in the preparation of either August 22, 2011 will. 15 The evidence of Mary-Jane and of the witness to the August 22, 2011 wills, Benjamin Cook, is that they were made on August 23, 2011, as reflected in his diary.

Events After Michelle’s Death 16 Michelle’s memorial service was held on July 12, 2013. 17 On July 19, 2013, Glen’s lawyer wrote to Mary-Jane. 18 On August 2, 2013, Glen’s lawyer and Mary-Jane’s lawyer ex- changed emails. 19 Glen alleges that Michelle’s 2011 will is a forgery, so in August 2014 the parties jointly engaged Iain Kenny of MNP LLP to examine and ana- lyze Michelle’s laptop computer. His report is submitted by consent. 20 Michelle’s estate is worth approximately $735,000.

Exhibits 21 The parties submitted the following Exhibits: Wills Last Will and Testament of Michelle Molly McNeill dated August 22, 2011 Last Will of Molly Michelle McNeill dated August 30, 2006 Last Will of Glen Normal McNeill dated August 30, 2006 Last Will and Testament of Mary-Jane Gray dated August 22, 2011 Excerpt of Benjamin Cook’s diary dated August 22 and 23, 2011 Divorce Statement of Claim for Divorce filed July 21, 2010 Divorce Judgment granted January 21, 2011 Certificate of Divorce dated February 23, 2011 Other Documents 132 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Funeral Director Statement of Death dated July 5, 2013 Memorial Service tribute dated July 12, 2013 Letter from Derer Law to Mary-Jane Gray dated July 19, 2013 Email chain between Armstrong Law and Vogel LLP dated August 2, 2013 Report of Iain Kenny of MNP LLP dated August 21, 2014

Agreed Issues 22 Michelle’s 2011 will does not comply with the formal requirements of the Wills and Succession Act, SA 2010, c W-12.2. Only a photocopy of it survives, and only one witness signed. Mary-Jane applies to validate the non-complaint will pursuant to section 37 of the Act, and to have it admitted to probate pursuant to the Surrogate Court Rules. Glen opposes, and applies for a grant of probate of Michelle’s 2006 will. 23 The parties have presented the following issues to the Court: (a) Should the Court validate Michelle’s 2011 will? (b) Should the Court admit to probate a copy of Michelle’s 2011 will? (c) If the answer to either or both of questions (a) and (b) is “no”, a further issue arises — did Michelle revoke her 2006 will? (d) If the answers to questions (a) and (b) is “yes”, or if the answer to question (c) is “yes”, a final issue arises — is Glen a valid creditor of Michelle’s estate, either by a Matrimonial Property Act claim for division of property or by a claim of loan?

Evidence 24 I heard oral evidence from six witnesses at the hearing: Mary-Jane Gray, mother to the deceased; Benjamin Cook, a friend to Mary-Jane Gray and the deceased; Ron Bell, a close friend of the deceased; Glen McNeill, the ex-husband of the deceased; Bob Gray, father to the deceased; and Cory Gray, brother to the deceased. 25 A summary of each person’s evidence follows. Gray v. McNeill J.T. McCarthy J. 133

Mary-Jane Gray 26 Mary-Jane Gray is the mother of Michelle Molly McNeill. She and her ex-husband Robert Gray also have a son, Cory Gray. She provided the court with an overview of Michelle’s life, and in particular discussed the last five years of Michelle’s life, which were spent living in Mary- Jane’s home. 27 Michelle was born and raised in Calgary. She graduated from high school and went on to complete nursing school in Calgary. She married Glen McNeill in 1992, at the age of 24. Shortly after the wedding, Michelle and Glen moved to Virginia for Glen’s work. They lived in Virginia for several years and then moved to Burlington, Ontario. Michelle did not work while they lived in Virginia or Ontario. Michelle had stomach and health problems from her late teens on. She had bulimia and chemical sensitivities. She took various steps to improve her health and ate a very healthy diet, but always struggled. 28 Michelle and Glen remained in Ontario until 2006, when they moved to China where Glen had been travelling frequently for his work design- ing car parts. When they moved to China they left various items in Mary- Jane’s home, including a chesterfield and numerous boxes. Michelle assisted Glen with his business while they lived in China. 29 Michelle came to live with Mary-Jane on July 1, 2008, while Glen remained in China. At the time she was content to remain married while the two led mostly separate lives. Glen and Michelle purchased a home together in Calgary in the summer of 2010. Michelle planned to move in with Glen’s assistance in the summer of 2010, after which Glen would return to China. 30 During her time in Calgary, Michelle pursued hiking as a hobby and became friends with another hiker named Ron Bell. Eventually their relationship turned romantic, even though they were both married to other people. When Glen arrived in Calgary to assist with the move to the new house, Michelle informed him that she wanted a divorce. They were divorced in January 2011. 31 Mary-Jane testified that Michelle and Glen continued to be in contact with each other, and on friendly terms, after the divorce. They communicated through emails and Skype. 32 While Michelle was living in Calgary with Mary-Jane, she developed persistent dizziness and went through various medical tests. By Septem- ber of 2012 the dizziness was severe. Michelle woke up one morning 134 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

partly paralyzed on one side and was rushed to hospital. She was diagnosed with Ramsay Hunt disease and suffered for a number of months at home, with Mary-Jane acting as her caregiver while she recovered. 33 Mary-Jane testified that during the five year period that Michelle lived in Calgary, Michelle worked for two employers. However, due to her poor health she worked less than half of the five year period. One of her employers was the Cooperators, where Mary-Jane is also employed. Michelle began contributing to a pension during her employment there and named Mary-Jane as her beneficiary. 34 Mary-Jane described her relationship with Michelle as close. Michelle was her companion and best-friend. Mary-Jane admitted she and Michelle had some difficulties living together as adults and that she encouraged Michelle to move out on her own. Michelle did buy two homes after her divorce so she could move out and be more independent; however in both cases Michelle did not move in to the homes and sold them. 35 Mary-Jane explained that she called Michelle “Miss Molly” when she was younger. Michelle adopted this nickname when she moved to On- tario and went by the name Molly. Michelle decided to legally change her name to Molly Michelle McNeill at that time. Later, when she moved back to Calgary, her extended family and friends were used to calling her Michelle, so she officially changed her name again, to Michelle Molly McNeill. 36 In this judgment I have chosen to refer to Michelle/Molly by the name she was called by the witness testifying, and as Michelle Molly during my findings on the case.

The Wills 37 Mary-Jane stated that while they lived together, Michelle would discuss from time to time the fact that they should both get wills. Mary-Jane knew that Michelle and Glen had prepared wills in 2006. Mary-Jane had never written a will, nor had one prepared by a lawyer. 38 On August 22, 2011, Mary-Jane was off work and Michelle was hiking on a multi-day “hut trip” to Lake O’Hara. Mary-Jane decided to take the opportunity to write her will. She started handwriting her will on a piece of paper, writing down the date and “Last will and testament of Mary-Jane Gray”. She then put it aside on the kitchen table as she was uncertain what else to write. Gray v. McNeill J.T. McCarthy J. 135

39 Michelle returned home from her trip the next evening, on August 23, 2011. That same evening, Mary-Jane’s friend Ben Cook came over for tea. It was his first time to Mary-Jane’s home and she recalled give him directions. Mary-Jane, Michelle and Ben Cook sat around the kitchen table and discussed the hiking trip. Talk turned to the will that Mary-Jane had commenced writing. Michelle decided this was a good opportunity for her to prepare her will, as they could both have Ben Cook act as a witness. 40 Mary-Jane recalled receiving some advice from Ben Cook on the wording of her will, which she completed in her own handwriting. She signed her will and gave it to Ben Cook to witness. Mary-Jane testified that Michelle then used Mary-Jane’s will as a template and typed her will into her laptop computer. Following this, Michelle printed a copy of her will upstairs where her printer was located, then brought it down to the kitchen table where she signed it and Ben Cook witnessed it. Michelle then returned upstairs and made copies of her will and Mary-Jane’s will. Mary-Jane stated that Michelle kept her original of the will and gave Mary-Jane a copy. 41 Mary-Jane testified that she asked Michelle about her 2006 will that evening. Michelle responded that she would give Glen a copy of the new will. Michelle then went downstairs to retrieve a copy of her 2006 will. She returned upstairs with the will and ripped it up in front of Mary-Jane and Ben Cook, commenting that it was now “null and void”. 42 Mary-Jane confirmed that the signing of the wills took place on Au- gust 23, 2011, even though both wills are dated August 22, 2011. 43 A copy of Michelle’s 2011 Will was entered as an exhibit. The text of the will is as follows: August 22, 2011 To Whom it May Concern: Last Will and Testament of Michelle Molly McNeill. I being of sound mind and body appoint my mother Mary- Jane Gray as my executor of my Estate. I bequeath 100% on my possessions which include my home, car, furniture, bank accounts and all my personal possessions to my mother Mary-Jane Gray. Signed this 22 day of August, 2011. Signature: (signed Michelle Molly McNeill) 136 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Witness: (signed Benjamin Cook) 44 Mary-Jane’s will was also entered as an exhibit. It contains almost identical language, though it appoints Michelle as executor and bequeaths her possessions 50% to Michelle and 50% to her son Cory. 45 Mary-Jane stated that after she and Michelle created these wills, they discussed from time to time the fact that they should also get “proper wills” drawn up. 46 Mary-Jane stated that Ben Cook has continued to be a good friend to her; they grew closer after Michelle’s death as he was part of her support system. She denied any romantic involvement between them.

Events after Michelle’s Death 47 Michelle went hiking on July 2, 2013 in the Canmore area. Mary-Jane recalled that Michelle left early in the morning and was to return for an appointment later in the day. Ben Cook was at Mary-Jane’s home that day to stain her deck. Mary-Jane sensed that something was wrong in the afternoon and called the RCMP around 5pm. She also called the police and Parks Canada. In the evening, Parks Canada told Mary-Jane they had found Michelle’s vehicle in the Yamnuska parking lot, but it was already dark and they could not commence a search until it was light. The next morning the police came in person to Mary-Jane’s home to inform her they had found Michelle’s body. 48 Mary-Jane testified that she was not able to function after Michelle’s death and characterized herself as a “mess”. Her sister and Ron Bell helped to arrange the memorial service. Mary-Jane recalled showing her copy of the 2011 Will to Michelle’s bank, but did not recall providing it to the funeral home or being told by the funeral home that it was problematic. Mary-Jane took a few weeks off of work and attended grief counselling. 49 A week after the service, Mary-Jane received a letter from a lawyer acting for Glen McNeill. The letter suggested that the 2011 Will was incomplete, irregular and invalid. After Mary-Jane received this letter, she made a thorough search for the original of the will, looking in Michelle’s filing cabinet, her drawers, and under her mattress. She also looked through Michelle’s boxes, but could not locate the will. Mary- Jane was surprised that she could not find the will as Michelle was generally well-organized. Gray v. McNeill J.T. McCarthy J. 137

50 A legal dispute over the validity of the 2011 Will thus ensued. 51 Mary-Jane was asked about the MNP Report dated August 21, 2014. MNP analyzed Michelle’s laptop computer and attempted to identify the existence of a document dated August 22, 2011 (the 2011 Will). MNP found no evidence that the will document “exists, previously existed or was created on [the] computer.” Their analysis determined the computer’s operating system was reinstalled on January 26, 2014. The rein- stallation resulted in log files and installed software being dissociated from the new installation, and numerous files being overwritten. 52 Mary-Jane admitted that she had Michelle’s laptop erased on January 26, 2014, which was three days before her scheduled Cross-Examination on Affidavit in these proceedings. She recalled going to a number of computer stores and asking them to delete the contents of the computer. Eventually she found a place that was willing to do so. 53 Mary-Jane denied she erased the computer’s contents to remove evidence relating to the will. Her evidence was that her concern was protect- ing Michelle’s privacy, especially in relation to her affair with Ron Bell and the fact that she was on dating websites. Mary-Jane could not recall if she had the computer erased before or after receiving a call from her lawyer asking her to bring the computer to her Examination. She admitted that she did not ask her lawyer first about the computer, even though these proceedings had commenced. She did recall her lawyer telling her, after the computer wipe, that MNP would be able to find anything. 54 It was suggested to Mary-Jane that the 2011 Will was not created by Michelle, an allegation she denied.

Benjamin Cook 55 Benjamin Cook testified that he met Mary-Jane Gray when they were both hiking on Sulpher Mountain in early 2011. They became friends and went on various hikes together. He also met Michelle and she stayed at his townhouse in Canmore twice while taking alpine training courses. The three of them also hiked together on one occasion, and often visited together. 56 Ben Cook stated that by August of 2011, he considered Mary-Jane and Michelle to be new friends. On August 23, 2011 he came to Calgary to do some shopping and errands. He called Mary-Jane after supper and she invited him over for tea. It was his first time at her house. 138 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

57 Ben Cook recalled that he, Mary-Jane, and Michelle sat around the kitchen table and that Michelle had her laptop. They talked about Michelle’s recent hiking trip to Lake O’Hara. Eventually, Mary-Jane mentioned that she was working on her will. Ben recalled that Michelle decided to also make up a will that evening. He advised Mary-Jane and Michelle to keep the wills simple. Ben recalled that Mary-Jane finished writing her will first and he signed it as a witness. Mary-Jane then passed her will to Michelle and Michelle started typing on her laptop. When she was done writing her will, Michelle had to go upstairs to print it off. Following this, Michelle signed the will and Ben signed as a witness. Ben recalled Michelle making copies of both wills after they were signed, but could not recall what happened to the copies. 58 Soon after the wills were written, Ben Cook recalled Michelle discussing the fact that she had a prior will with her ex-husband. He remembered Michelle bringing a document up from downstairs, tearing it into pieces, and stating that it was null and void as she was divorced. She threw the pieces of paper in the garbage under the sink. Michelle mentioned that she would send a copy of the new will to Glen, but Ben was unaware if she ever did so. 59 Ben Cook testified that he did not witness anything to suggest that Michelle or Mary-Jane exerted influence on each other that evening. He believes they were planning on getting other wills later. 60 At the hearing, Ben Cook was referred to a copy of a 2011 Diary, which was entered as an exhibit. He explained that the diary belonged to his former wife, who left him on February 15, 2011 after many years of marriage. He explained that the event was traumatic and he started to write in the diary which she left behind. He put the diary away at the end of 2011, then found it again in early 2016 in a filing cabinet he rarely uses. 61 There is an entry in the diary for August 23, 2011. It states: Calgary MJ sign Wills MJ and Michele at MJ’s House Costco First Time Bow Bottom Trial [sic] Gray v. McNeill J.T. McCarthy J. 139

Home 1:00 am Late Tired 62 When referred to this document, Ben Cook did not have a specific memory of writing the words, though he believes he wrote in the diary the morning after August 23, 2011. 63 When asked about the relationship between Mary-Jane and Michelle, Ben stated that they were very close and that Mary-Jane did a lot for Michelle when she was not well. They did argue at times, but they always quickly reconciled. 64 Ben Cook testified that he continued to be friends with both Mary- Jane and Michelle after this date. He recalled being with Mary-Jane the day Michelle died. He confirmed the details of that day. He stayed at Mary-Jane’s home praying with her and was there when the police arrived with the news that Michelle’s body had been found. He stayed with Mary-Jane for few days and tried to help her with her immense grief. She was inconsolable and could not eat. 65 It was suggested to Mr. Cook that the events of August 23, 2011re- garding the wills did not occur, an allegation he denied.

Ron Bell 66 Ron Bell testified that he met Michelle, who introduced herself as Molly, hiking in the summer of 2008. They encountered each other on other hikes that summer and eventually made plans to hike together. They hiked both on their own and as a part of groups, including with Molly’s mother Mary-Jane and her sister. Ron described Molly as a beautiful spirit who people liked to be around. 67 In the winter of 2008 and spring of 2009, Ron and Molly spent time together alpine skiing and snowshoeing. Ron also introduced Molly to mountaineering which she took on with a passion. They took courses together and their relationship turned romantic by the spring of 2009. Ron Bell was candid in admitting that he was married at the time and was having an affair with Molly. 68 Ron testified that he and Molly maintained a close and romantic relationship until late 2010 to early 2011. Around that time Ron decided to stay in his marriage and they ended their relationship. However they continued to communicate and be in contact on and off until Molly died. 69 Ron was aware that Molly and Glen remained in touch and were friendly after their divorce. He understood that they had divided their 140 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

matrimonial property and that in doing so Molly retained the proceeds from their home. He recalled one time where Molly discussed the fact that Glen was asking for some of the money and she felt torn about what to do. He also recalled an incident where Molly was upset because Glen asked her for her engagement ring back as he was going to give it to someone in China. The ring had sentimental meaning for her even though they had divorced. 70 During the time that Ron knew Molly, she was living at home with her mother Mary-Jane. Ron believed that they shared a deep friendship as mother and daughter and enjoyed spending time together. They did have some “scraps” around issues like the maintenance of the home. There were times when Mary-Jane encouraged Molly to be more independent and move out on her own. Molly was working towards that, when she bought two houses to move into after her divorce, however neither home worked out. Overall, Ron believed Mary-Jane and Molly needed each other and maintained a close relationship. 71 Ron testified that the last time he spoke to Molly was a week or two before her death. She was bothered by a dental issue and discussed her summer plans with him. Ron heard about Molly’s death from her brother Cory. Ron was involved with preparations for the funeral service and spent a lot of time at Mary-Jane’s sisters’ home with the family. Mary- Jane was very distraught and incapable of doing much after the death. He visited Mary-Jane at her home a few months after Molly’s passing and noted that the home was not as clean as usual and Mary-Jane appeared to be depressed.

The 2011 Will 72 Regarding the 2011 Will, Ron Bell testified to a few relevant recollections. He remembered there was a period of time when Molly mentioned she knew she needed a new will and appeared to be researching the issue. She seemed to be aware of some of the law in Ontario and Alberta relating to wills and that there had been a recent change in the law. She informed Ron that she would like her mother Mary-Jane to be the sole beneficiary of her will. 73 Ron also recalled an incident where he went to pick up Molly for a mountaineering trip from her home and she told him she had prepared her will. She picked up a one-page document, which he could see was typed, and asked to talk about it. Ron, who was familiar with the preparation of wills, looked at the document and saw that it was only one page. Gray v. McNeill J.T. McCarthy J. 141

He told Molly she should ask a lawyer for advice, not him. When shown a copy of the 2011 Will at the hearing, Ron indicated it could have been the document he was shown. He confirmed that Molly was not a person who would do things sloppily.

Glen McNeill 74 Glen McNeill is Michelle Molly McNeill’s former husband. They met through friends in Calgary in December 1990 and dated for eighteen months before marrying in July 1992. He too provided evidence about the legal name changes she went through, and indicated that he typically called her Molly. Glen described Molly as a gifted student who achieved high grades in nursing school and graduated on the Dean’s List. She was very literate and aspired to write a book one day. She was a perfectionist who was well organized and detail-oriented in her personal life, including maintaining personal files and a personal calendar. 75 Glen McNeill is a mechanical engineer, working in the automotive industry. He confirmed the various moves that occurred during their marriage, including moving to Virginia in 1992, then back to Calgary in 1995 for a short period of time. The couple moved to Burlington, Ontario where they bought a home in 1996 and resided there until 2006. They sold their home and moved to China in 2006 to allow Glen to pursue his developing business interests in that country. He described their relationship as loving and close. 76 Glen testified that during their marriage it was apparent that Molly struggled significantly with her health and bulimia. There were times when her weight was extremely low and she sought help over the years for the issue. Molly did not work in Virginia or Ontario, mostly due to her health issues. The fact that she did not work was not an issue for them in their marriage. Molly did help Glen with his business in China because he started a factory and needed assistance. Molly helped with many facets of the business, including accounting and human resources. 77 Molly did not enjoy the industrial city in China that they were living in so decided to move back to Calgary in July 2008. Glen helped Molly to move to Calgary and into Mary-Jane’s home. She was still not in great health. Glen then returned to China for work. 78 Glen provided the court with evidence of Molly’s written communications to him during the years of 2009 and 2010. The communications show that Molly’s relationship with her mother went through periods of 142 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

tension and that Mary-Jane could be controlling, inconsiderate, and was not always forthright with others. 79 In one example, Molly described being out for a walk near the house when Mary-Jane pulled up in the car with a friend in the passenger seat. Mary-Jane advised Molly she had been grocery shopping and told her to come home to put the groceries away. Molly got in the backseat of the car and took the groceries into the house. She put the groceries away while Mary-Jane and her friend drove off for an ice cream; then Molly resumed her walk. This was clearly a frustrating incident for Molly. 80 In an email in November 2009 Molly wrote the following: 81 I will go to MEC this morning. Just waiting for Mom to get out of the bath. She is crying this morning asking me how to account for the money going into her ING account and advising that she will say that they owed me money. I told it she cannot fabricate stories. Not interested in fighting with her today. She wants me to go to her lawyers office with her to- morrow morning. 82 In an example from 2010, Molly wrote that Mary-Jane “has no control. . .she loves to fight... she is very critical...I am told I am bad every day”. 83 Glen testified that due to this tension, he and Molly decided to buy a home in Calgary in 2010 so that Molly could be independent and to give them a home base in Calgary. They used the money from the sale of their Burlington home for the purchase and Glen sent additional funds from his account in China. The house was purchased outright without the need for a mortgage. 84 Glen recalled that he arrived in Calgary on June 19, 2010 and was anxious to see the home they purchased. The following day Molly informed Glen that she was having an affair with Ron Bell and wanted a divorce. Glen was reluctant to divorce but agreed to do so. They put the house up for sale and agreed to use an internet service called Untie the Knot for their divorce as there were no contentious issues between them. They agreed to split their assets equally and Molly indicated she did not want any support. Glen was under the impression that Molly hoped to marry Ron Bell. She was in a hurry for the divorce and had Glen begin on the paperwork before he returned to China. 85 The house was sold by August of 2010 and the proceeds were deposited into Molly’s account in Canada with Glen’s agreement. Glen testified that Molly asked to continue to manage their funds and he agreed to Gray v. McNeill J.T. McCarthy J. 143

the arrangement. Molly indicated she wanted to buy a home for herself and was aware that without work or much work experience she may have trouble getting approval for a loan. Glen testified that he was willing to lend Molly the funds towards a home as they were still on friendly terms. He signed a release so that the funds from the house, which was held in joint tenancy, could be released into Molly’s account. The real estate lawyer’s ledger shows funds of $742,582.82 were deposited into Molly’s account. 86 The divorce was granted in January 2011. Glen indicated that he and Molly remained friendly and leaned on each other for emotional support after the divorce. He provided evidence of their written communications in the fall of 2010 and into 2011 that showed this to be true. He continued to visit her when he came to Calgary. 87 Glen recalled a visit to Calgary where he saw Molly and gathered his belongings from Mary-Jane’s home in late August 2011. He planned this visit for after Molly’s hiking trip to Lake O’Hara, which he knew was from August 19 to August 23. They met up on August 26 and ran errands together. He gathered some of his boxes a couple of days later with the help of a friend. Glen admitted that he asked Molly about her engagement ring on this visit. Glen testified that Molly gave him the ring very happily and said it did not mean anything to her. He felt there was no tension between them. However he admitted that their Skype conversa- tions ended soon after this visit. 88 Glen entered into a relationship with a woman from China sometime after the divorce and was living with her by January of 2012. 89 Glen testified that he visited Molly in January 2013 at Mary-Jane’s home and returned a necklace to her that was in his belongings. They discussed Molly’s diagnosis of Ramsay-Hunt and he told Molly about his new relationship. 90 When Molly died in July 2013, Mary-Jane called Glen to give him the news. He contributed photos and gave a eulogy at the funeral service. Glen admitted that he was in rough shape at the funeral. 91 Glen recalled being introduced to Benjamin Cook at the funeral and understood that he was Mary-Jane’s boyfriend. Glen also spoke to Ron Bell and to Molly’s father, Bob Gray, at the service. It was here that the controversy over the wills first emerged. 144 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

2006 and 2011 Wills 92 Glen testified that in 2006, when he and Molly sold their Burlington, Ontario home their lawyer suggested they should have wills drawn up. They were given forms with information to consider regarding bequests of their property and alternates to their named beneficiaries and executors. They provided this information to their lawyer who drafted mutual wills for them. Both wills named the other person as executor and beneficiary and provided that if both spouses died without surviving the other, and they had no children, Mary-Jane Gray would be the beneficiary of their estates. 93 Glen and Molly executed the wills with their lawyer and his assistant present. The lawyer kept the original wills at his office and gave Molly and Glen each an unexecuted copy. 94 Glen testified that he was not aware that Molly had any will other than the 2006 Will prior to her death. He denied receiving a copy of the 2011 Will from Molly. Glen did not change his will after the divorce and believed the same was true for Molly. 95 In particular, Glen recalled a conversation with Molly on his visit to Calgary in January 2013, in which the issue of the will was raised. Glen asked Molly to return his half of their matrimonial property, referring to half of the proceeds of the home which they had sold when divorcing in 2010. Glen testified that Molly indicated she had changed her mind and wanted to keep the funds. She told Glen her recent health scare with Ramsay-Hunt disease left her feeling vulnerable about her future. She remarked that Glen was healthy and would outlive her. Molly stated that the Ontario will was still in effect. Glen did not want to pressure Molly due to her health so did not pursue the issue further. Molly died approximately five months later. 96 At the funeral service, Glen heard from Molly’s father, Bob Gray, that the funeral home was presented with a non-compliant will that was a brief document with only one witness. Glen was surprised as he believed the 2006 Will was still valid. He was uncertain what to do as he was the Executor under the 2006 Will and had no knowledge of the other will. He consulted with a lawyer who wrote a letter to Mary-Jane approximately one week after the service, expressing concern over the fact that their matrimonial property had not been divided and his understanding that the 2006 Will reflected her testamentary intentions. 97 Glen testified that he first received a copy of the 2011 Will through his lawyer. He described his reaction to the document as one “bordering Gray v. McNeill J.T. McCarthy J. 145

on laughing”. He does not believe that Molly would create a document such as the 2011 Will as she was educated, detail-oriented and her writing is clear and concise. The document contains typographical errors and has only one witness. He believes Molly would have used the word “Ex- ecutrix” to refer to Mary-Jane rather than “Executor”. He also believes Molly would have researched the law before writing the will and known two witnesses are required. 98 Glen was also suspicious about the will because he knew Molly was away hiking on August 22, 2011, the date on the will. Further, as Molly was well-organized with her record keeping it was odd that only a copy of the will was found. Glen testified that Molly was the type of person who kept any potentially important documentation, recalling an incident where she kept a receipt for a lightbulb that came with a guarantee. Fi- nally, Glen clearly recalled the conversation in January 2013 where Molly advised that the Ontario will was still valid. He believes that Molly was always fair and direct with him; she would have told him if she changed her will. 99 All of these oddities and irregularities led Glen to believe that the 2011 Will was forged by Mary-Jane. He agreed that this accusation means he believes Mary-Jane and Ben Cook devised a plan to forge the will in the days after Michelle’s death, forged Ben Cook’s diary entry and lied to this court.

Robert Gray 100 Bob Gray is the father of Michelle Molly McNeill. He provided the court with information about Michelle’s early years and to some degree the troubled relationship between he and Michelle’s mother, Mary-Jane. The family spent time in both Calgary and Lethbridge. Bob Gray described his daughter as being very smart and having a strong personality. His relationship with Michelle in her adulthood was cool and distant at times. They had periods were they were not in contact very often. How- ever, they had a few good visits in 2012 and Bob Gray recalled discussing Michelle’s amicable split from Glen. 101 In terms of the wills, Bob Gray was aware that Michelle and Glen had a will and described them as meticulous people. He recalled hearing that a second will surfaced after her death and that there was an issue with the will at the funeral home. Bob Gray eventually saw the 2011 Will a month or two later when Glen sent it to him. His opinion is that his daughter did not write the 2011 Will. She was much too precise and articulate to pro- 146 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

duce a document like the 2011 Will. She was also aware of how wills worked due to her previous will with Glen.

Cory Gray 102 Cory Gray is Michelle Molly McNeill’s younger brother. He too provided the court with some background on his and Michelle’s early years. Michelle was protective of Cory and was often left in charge of him. Cory stated that after Michelle moved back to Calgary in 2008, he saw her from time to time. She confided in Cory about her affair with Ron Bell and discussed the difficulties she had living with their mother. 103 In terms of the wills, Cory recalled hearing about the 2006 Will around the time it was prepared. Michelle was contemplating leaving something to his son if she and Glen passed away at the same time. They did not have any other discussions about wills. 104 Cory saw a copy of the 2011 Will for the first time a while after Michelle’s death through his father. After reviewing the 2011 Will at the hearing, Cory testified that his gut feeling is that the 2011 Will is not the work of his sister.

Legal Framework 105 The Order directing this hearing provides me with the discretion to make a judicial determination on the issues after hearing the evidence. In order to consider the evidence in its proper framework, it is helpful to review the applicable law. 106 Alberta’s new Wills and Succession Act, SA 2010, c W-12.2 applies to wills made on or after the day the Act came into force, which was February 1, 2012. Section 8 provides that the old Wills Act continues to apply in respect of wills made during the currency of the old Act, subject to certain exceptions set out in s. 8(2). Those exceptions include the use of extrinsic evidence when interpreting a will (s. 26), and the dispensing of formalities (s. 37-40) for wills where the testator’s death occurs after February 1, 2012. 107 In this case, as Michelle Molly McNeill died in July 2013, sections 26 and 37 to 40 apply when considering the 2006 Will and the 2011 Will. These sections are particularly relevant in light of the 2011 Will, as it does not conform to the formal requirements for a valid will in Alberta. 108 Traditionally, the law required strict compliance with formal requirements such as having the will signed by the testator and acknowledged by two witnesses who were present at the same time. If these formalities Gray v. McNeill J.T. McCarthy J. 147

were not met, the will was declared invalid. Under the new Act, there is a move away from strict compliance with the formalities. Courts are now allowed to validate wills that would have failed under the former legislation, so long as there is substantial compliance with the formalities and the document sets out the testamentary intentions of the testator. Section 37 of the Act states the following: Court may validate non-compliant will 37 The Court may, on application, order that a writing is valid as a will or a revocation of a will, despite that the writing was not made in accordance with section 15, 16 or 17, if the Court is satisfied on clear and convincing evidence that the writing sets out the testamentary intentions of the testator and was intended by the testator to be his or her will or a revocation of his or her will. The relevant formality in this case is s. 15 of the Act, which requires a will to be signed by the testator in the presence of two witnesses who are both present at the same time and who each sign the will in the presence of the testator. Essentially the same requirement existed in the Wills Act, RSA 2000, c W-12, in section 5. Both are replicated below: Formal will

15 A will may be made by a writing signed by the testator if (a) the testator makes or acknowledges his or her signature in the presence of 2 witnesses who are both present at the same time, and (b) each of the witnesses signs the will in the presence of the testator Validity of will 5 Subject to sections 6 and 7, a will is not valid unless (a) it is signed at the end or foot of it by the testator or by some other person in the testator’s presence and by the testator’s direction, (b) the testator makes or acknowledges the signature in the presence of 2 or more attesting witnesses present at the same time, and (c) 2 or more of the attesting witnesses subscribe the will in the presence of the testator. 109 Another section from the new Act that applies is s. 26, which sets out the duties of the court and the evidence which may be considered in interpreting a will. A court must consider the testator’s intentions and is 148 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

allowed to hear evidence regarding the testator’s intent, evidence which was formerly more restricted under the common law: 26 A will must be interpreted in a manner that gives effect to the intent of the testator, and in determining the testator’s intent the Court may admit the following evidence: (a) evidence as to the meaning, in either an ordinary or a special- ized sense, of the words or phrases used in the will, (b) evidence as to the meaning of the provisions of the will in the context of the testator’s circumstances at the time of the making of the will, and (c) evidence of the testator’s intent with regard to the matters referred to in the will. 110 Finally, in this case where there is only a photocopy of the 2011 Will, and the original executed copy is missing, rule 24 of the Surrogate Rules, AR 130/1995 applies: 24 If an original will is lost or destroyed but a copy or other evidence of it exists, the court may admit the copy or other evidence to probate if (a) the will is proved formally under Division 3 of Part 2, or (b) in the opinion of the court, the will can be adequately identified under this Part.

Should the Court validate Michelle’s 2011 Will? 111 As noted, normally in order for a will to be valid in Alberta it must be signed by the writer in the presence of two witnesses, both present at the same time, and each signing in the presence of the testator and each other. Section 37 of the new Act allows a will that does not comply with that requirement to be validated if it is satisfied on “clear and convincing evidence” that the document “sets out the testamentary intentions of the testator” and was intended to be his or her will. 112 The standard required for “clear and convincing evidence” has been discussed in the case law. It remains the civil standard of proof on a balance of probabilities: Curtis, Re, 2014 ABQB 745, 603 A.R. 46 (Alta. Q.B.), at para. 25: The term “clear and convincing evidence” does not imply a higher standard of proof than the normal civil standard. The Supreme Court of Canada confirmed that there is only one civil standard of proof, which is proof on a balance of probabilities: C.(R.) v. McDougall, 2008 SCC 53 at 49. Gray v. McNeill J.T. McCarthy J. 149

113 Curtis, Re also discussed the meaning of the term “testamentary intentions”, noting that there must be a deliberate and final intention expressed of how the person wishes their property to be disposed of after death, referencing to the Manitoba decision of George v. Daily (1997), 143 D.L.R. (4th) 273, 115 Man. R. (2d) 27 (Man. C.A.) at para. 23: The Manitoba Court held that “the term ’testamentary intention’ means much more than a person’s expression of how he would like his/her property to be disposed of after death. The essential quality of the term is that there must be a deliberate or fixed and final expression of intention as to the disposal of his/her property on death”: para 65 114 The Applicant Mary-Jane Gray argues that the 2011 Will should be validated as the intention expressed in the will is sensible when one considers the circumstances. By the summer of 2011, Michelle Molly Mc- Neill was divorced and had been living with her mother Mary-Jane for three years. She had named Mary-Jane as the beneficiary in the pension provided by her Calgary employer. The evidence from Mary-Jane and Ben Cook is consistent regarding the writing of the will and explains the discrepancy in dates. Mary-Jane points out that the only missing formality in this case is that there was only one witness to the will, rather than two. That one witness, Ben Cook, took the stand to validate the will for the court and testified that both he and Mary-Jane were present for the signing of the will. The Respondent argues this means there in fact there were two witnesses to the will, with one simply not signing as a witness. As such, the non-compliant aspect of the 2011 Will is quite minor. 115 The Applicant also submits there is corroboration for the existence of the 2011 Will in the testimony of Ron Bell, an independent witness with nothing to gain in these proceedings. Ron Bell confirmed that Michelle Molly showed him a one-page typewritten document that was her will. Ron Bell also testified that Michelle Molly advised him she wished Mary-Jane to be the beneficiary of her will. 116 In terms of the computer erasure, Mary-Jane Gray submits that she did not intend to destroy relevant evidence relating to the will. Her intention was to protect her daughter’s privacy. She allowed the laptop to be examined even though she was told the expert would be able to find anything, which suggests she believed the evidence on the will would be in her favour. 117 Finally, the Applicant points out that Glen McNeill’s allegation that the 2011 Will is forged is implausible in the circumstances. His theory 150 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

would require this court to find that a) Mary-Jane was capable of con- cocting a scheme to forge a will in the days after the death, b) Mary-Jane was able to convince Ben Cook to participate in the scheme shortly after the death, c) Ben Cook falsified his diary entry and submitted falsified evidence to this court, d) both Mary-Jane Gray and Ben Cook lied to the court in their testimony, and e) Ron Bell either lied or was incorrect about seeing a one page typewritten will. 118 The Respondent Glen McNeill agrees that the main issue in this case is whether the 2011 Will should be validated. He submits that on a balanced view of the evidence, this court should find the multiple issues of non-compliance to be troublesome and compelling. The 2011 Will is problematic for a number of reasons, including the inclusion of an incorrect date, the typographical errors, the lack of two witnesses and the fact that the original executed copy is missing. The Respondent points out that he, and the father and brother to Michelle Molly McNeill, all believe the person they knew would not participate in making a temporary will at the kitchen table. Michelle Molly McNeill was detail-oriented and well- educated, including on the topic of wills. Producing a will with multiple mistakes like the 2011 Will would be out of character for her. 119 The Respondent also submits that Mary-Jane’s evidence must be questioned as she is a beneficiary under the 2011 Will. He questions whether Ben Cook is truly an independent witness as he is a very close friend to Mary-Jane. He submits that Mary-Jane and Ben’s recollection of events is generally poor except for the events surrounding the making of the wills at the kitchen table, which is self-serving. He suggests it was odd that on Ben Cook’s first visit to Mary-Jane’s home, he would assist with the writing of a will. 120 The Respondent submits Mary-Jane’s evidence must also be questioned because of the deliberate action she took to erase the contents on Michelle Molly’s laptop a few days before the laptop was to be reviewed as evidence in these proceedings. The laptop clearly would have had relevant evidence relating to the creation of the 2011 Will, or the absence of same. The Respondent argues Mary-Jane’s actions amount to spoliation and a presumption should follow that the destroyed evidence would not have assisted Mary-Jane. 121 Finally, the Respondent reminds the court that he and Michelle Molly remained close after their divorce. Despite the fact she made a number of legal name changes in her adult life, it was telling that she kept the last name McNeill after her divorce. She and Glen continued to have a Gray v. McNeill J.T. McCarthy J. 151

friendship and trusted one another. This was evident from the fact that Michelle Molly remained in possession of the funds from their home and Glen allowed her to keep those funds to purchase a home during her period of illness. In January 2013, Michelle Molly specifically advised Glen with regards to the funds that he was still the beneficiary under her will, referring to the 2006 Will. Therefore, he submits the 2006 Will still represented Michelle Molly’s testamentary intentions.

Findings 122 After hearing the evidence, I agree that there are legitimate concerns regarding the 2011 Will in this case. Aside from the important fact that the original is missing, which I will address in the next section, there are typographical errors, the date is incorrect, there was only one witness, and the other “witness” to the will was not independent (Mary-Jane). 123 Another troubling aspect in this case is the erasing of Michelle Molly’s laptop computer by Mary-Jane Gray. The Respondent alleges that Mary-Jane’s actions amounted to spoliation, which is the intentional destruction of relevant evidence when litigation exists or is pending: McDougall v. Black & Decker Canada Inc., 2008 ABCA 353, 440 A.R. 253 (Alta. C.A.), at para 29. The spoliation of relevant evidence is a serious matter. As was noted in Doust v. Schatz, 2002 SKCA 129, 227 Sask. R. 1 (Sask. C.A.), at para 27 “[t]he integrity of the administration of justice in both civil and criminal matters depends in a large part on the hon- esty of parties and witnesses. . . . A party is under a duty to preserve what he knows, or reasonably should know, is relevant in an action....” 124 The principle remedy for spoliation is the imposition of a rebuttable presumption that the evidence which was destroyed would not have assisted the spoliator. The presumption can be rebutted by evidence showing the spoliator did not intend, by destroying the evidence, to affect the litigation, or by other evidence that proves her case, McDougall at para 18: . . . Spoliation in law does not occur merely because evidence has been destroyed. Rather, it occurs where a party has intentionally destroyed evidence relevant to ongoing or contemplated litigation in circumstances where a reasonable inference can be drawn that the evidence was destroyed to affect the litigation. Once this is demonstrated, a presumption arises that the evidence would have been unfavourable to the party destroying it. This presumption is rebuttable by other evidence through which the alleged spoliator proves that his actions, although intentional, were not aimed at affecting the litiga- 152 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

tion, or through which the party either proves his case or repels the case against him. 125 I find that Mary-Jane Gray’s actions in erasing the laptop computer a few days before her examination amounted to spoliation. I heard from counsel that prior to the examination, counsel for both parties had come to an agreement that the laptop would be examined. Based on this, I find Mary-Jane engaged in a deliberate act to destroy evidence so that it was not available in the ongoing legal proceedings. She was not merely wip- ing evidence of Michelle Molly’s private life but also evidence which could prove or disprove whether and when the 2011 Will was created on the laptop computer, the central issue in this case. It also potentially could have prevented the parties from the need to proceed to trial. The spoliation creates a presumption that the evidence on the computer would have been unfavourable to Mary-Jane. 126 However, as noted, this presumption is rebuttable by other evidence. 127 Weighing the evidence as a whole, I have decided to accept Mary- Jane’s evidence relating to the creation of the 2011 Will. The main reason for this finding is that her evidence is corroborated by Ron Bell and Benjamin Cook, both of whom I accept as truthful witnesses. 128 I am satisfied that the 2011 Will was created under the circumstances described by Mary-Jane Gray and Benjamin Cook at the kitchen table on the evening of August 23, 2011. Their testimony provides an explanation as to the incorrect date on the document and the mirror wording of Mary- Jane and Michelle Molly’s wills. It makes sense that Michelle Molly would have created a new will after her divorce and recognized her mother, the person she was closest to, as her beneficiary. 129 I accept Benjamin Cook’s diary entry as an authentic piece of evidence that references the events of that night. I also accept the evidence from Ron Bell to the effect that Michelle Molly wished to create a new will after her divorce and to name Mary-Jane as her beneficiary. Ron Bell had a specific recollection of seeing a one page typewritten document which Molly presented as her new will. He is a completely independent witness with nothing to gain in these proceedings. 130 This corroborative evidence relating to the 2011 Will rebuts the presumption that the evidence on the laptop computer would not have assisted Mary-Jane Gray. It also alleviates some concerns I have over Mary-Jane Gray’s credibility due to her actions in relation to the computer. Although it is clear that Mary-Jane loved her daughter and they Gray v. McNeill J.T. McCarthy J. 153

maintained a close relationship, the evidence also showed that at times she was foul-mouthed, abusive and inconsiderate towards her daughter. 131 Although the preparation of this will may seem uncharacteristic of Michelle Molly McNeill, both in its process and in the language used, I find that she was not always as well-organized and meticulous in her approach to matters as Glen McNeill believed. For example, in the five years she lived in Calgary she purchased and sold three homes without ever moving into one of them. This suggests she sometimes made hasty decisions. She also approached her divorce in a hurried manner and used an online service rather than using the services of a lawyer. 132 I have also considered the evidence of Glen McNeill regarding their conversation in January 2013, a few months before her death, where she stated he was still the beneficiary under the 2006 Will. It is somewhat difficult to reconcile this with the other evidence in favour of accepting the 2011 Will. It may be that Michelle Molly was not as direct with Glen McNeill after their divorce as he believed. It appears she was not always open with him about matters between them, such as her true feelings over his request for her to return her engagement ring. Thus, even if I were to find the conversation occurred, an issue I am not deciding, it would not change my finding on a balance of probabilities that the 2011 Will was written by Michelle Molly McNeill and evidenced her final testamentary intentions. 133 Finally, I find the allegation of a forgery implausible under the circumstances. Mary-Jane Gray was devastated when she found out about the death of her daughter. In the days after her death, while inconsolable and surrounded by family, she was in no shape to conceive of a plan to forge a will, cobble it together, and convince Ben Cook to participate in such a plan. 134 Based on these findings, I find the 2011 Will should be validated as setting out the final testamentary intentions of Michelle Molly McNeill.

Should the Court admit to probate a copy of Michelle’s 2011 Will? 135 The next issue is whether the 2011 Will should be submitted to probate as there is only a photocopy of the will. When a testator has possession of their will and it is missing at the time of their death, there is a presumption that the testator destroyed the will with the intention of revoking it. The presumption can be rebutted if there is evidence that establishes on a balance of probabilities that the testator did not intend to revoke the will, it was merely lost. The burden rests with the person try- 154 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

ing to rebut the presumption: Brimicombe v. Brimicombe Estate, 2000 NSCA 67, 184 N.S.R. (2d) 315 (N.S. C.A.), at paras 4-7. 136 The case of Bunce Estate, Re (1998), 231 A.R. 240, [1998] A.J. No. 1133 (Alta. Surr. Ct.), considered a case of this type when a fianc´e of a deceased claimed he could only find a copy of the deceased’s will. The will left the deceased’s entire estate to the fianc´e, and named him as executor. The court noted the absence of an original will created a rebuttable presumption that the original will had been voluntarily destroyed and revoked. In order to rebut the presumption, the court stated it must be satisfied of a few matters, namely that: (a) A thorough search was made for the original will and any evidence of the testator’s intentions, to satisfy the court that the will was actually lost; (b) Evidence exists to show that the copy of the will was viewed by the testator as a valid and subsisting will; (c) There is no evidence that the testator desired a change in the will due to changes in familiar circumstances or stated desires to pass on his or her possessions to others. 137 A more recent case from Alberta, Goold Estate v. Ashton, 2016 ABQB 303, [2006] A.J. No. 553 (Alta. Q.B.), at para 71, also considers the presumption in a case where there was only a photocopy of a will. Goold refers to other relevant factors for consideration, including: (a) Whether the terms of the will were reasonable; (b) Whether the testator continued to have good relationships with the beneficiaries of the will up to the date of death; (c) The nature and character of the deceased in taking care of personal effects; (d) Whether there were any dispositions of property that support or contradict the terms of the copy sought to be probated; (e) Statements made by the testator which confirm or contradict the terms of distribution set out in the will; and (f) Whether the testator made statements to the effect that he or they had a will. 138 Due to the absence of the original 2011 Will, which was believed to be in the possession of Michelle Molly McNeill, a presumption arises that she destroyed the will with the intention of revoking it. Gray v. McNeill J.T. McCarthy J. 155

139 The Applicant submits that the presumption is rebutted. Mary-Jane Gray performed a thorough search through Michelle Molly’s filing cabinet and belongings, including in spots such as under her mattress, to no avail. There is no suggestion that Michelle Molly had a change of heart regarding her intentions. She had been divorced from Glen for over two years and their relationship was growing more distant. She chose to continue living with her mother and companion Mary-Jane. Therefore the terms of the will are reasonable. Although Michelle Molly indicated a desire to get “proper” wills done up after the 2011 Will, she did not express a desire to change the beneficiary of her will. 140 The Respondent submits that the court should be very concerned that the original of the will is missing. Michelle Molly maintained organized personal files and would have been careful with a document such as a will. Further, she represented to Glen in January 2013 that he was still the beneficiary of her will. Michelle Molly was aware that she continued to hold one half of the matrimonial property in her account and would not be unfair or lie to Glen. 141 After considering these submissions and the evidence, I find that the presumption is rebutted in this case. A thorough search was done for the original will. Mary-Jane gave evidence that Michelle Molly’s filing cabinet was fairly bare, which may suggest she was no longer as well-organized with her record keeping. I find the weight of the evidence shows that Michelle Molly McNeill intended to change the beneficiary of her estate to her mother Mary-Jane after her divorce, and she did so by creating the 2011 Will. Ben Cook and Ron Bell both provided corroborative evidence that the 2011 Will was created and evidenced Michelle Molly’s testamentary intentions. There was no evidence to suggest that her intentions changed after she created the 2011 Will. She had not moved on to another significant relationship. She continued to live with her mother, who acted in a caregiving role during her illness in late 2012. Their relationship, while not always ideal, was a close one. 142 The one troubling piece of evidence is Michelle Molly’s alleged rep- resentation to Glen in January 2013 that he remained the beneficiary under her will. I have found that if this statement was made, it may have been false as Michelle Molly was not always direct or frank with Glen McNeill, as was evidenced by her hiding her affair for many months and hiding her true emotions regarding the engagement ring. Therefore, even if the conversation occurred, I do not find it outweighs the other evidence 156 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

that rebuts the presumption that the 2011 Will was destroyed or revoked by Michelle Molly prior to her death. 143 I find that on a balance of probabilities the original 2011 Will was lost and the presumption is rebutted. A photocopy of the 2011 Will may be admitted to probate.

Remaining Issues 144 In response to the first two questions posed by the parties, I have found that Michelle Molly McNeill’s 2011 Will is validated and should be admitted to probate. As such, I do not need to consider the issue of whether Michelle Molly revoked her 2006 Will. The last issue presented by the parties to this court is whether Glen McNeill is a valid creditor of Michelle’s estate, either by a Matrimonial Property Act claim for division of property of by a claim of loan. 145 Glen McNeill gave evidence to the court that he and Michelle Molly McNeill agreed to split their assets equally when they divorced. Shortly prior to the divorce, the couple had used the proceeds from the sale of their Burlington, Ontario home and additional funds sent by Glen Mc- Neill from China towards the purchase of a house in Calgary. Title to the house was in joint tenancy. When the house was sold, Glen agreed to allow Michelle Molly to keep the full proceeds of the sale in her account, and signed a legal release of the funds to this effect. This was done to allow Michelle Molly to purchase another home as she could not qualify for a mortgage on her own. Glen characterized the arrangement as him providing a loan to Michelle Molly of his share of the matrimonial party. He emphasized that they remained on amicable terms and had a relationship of trust. Glen asked Michelle Molly for the funds in January 2013 but was told she had changed her mind due to her recent health scare. She reassured Glen that he was still the beneficiary under her will. Glen decided not to pursue the matter further at the time. Thus, Glen was concerned when the 2011 Will surfaced and he was no longer the beneficiary under the will, cutting off his access to the funds from the home. 146 Unfortunately, there are two barriers that prevent me from deciding the matrimonial property or loan issue at this time. The main barrier is that the Order directing this hearing specified eight issues for possible consideration. All of the issues relate to the validity, revocation, rectification and probate of the 2006 Will and the 2011 Will. The issue relating to the matrimonial property claim or a creditor’s claim on the estate was not included in the Order. Although a few submissions were made on Gray v. McNeill J.T. McCarthy J. 157

this issue in closing, it appeared that the focus of the parties in their evidence and submissions was indeed related to which will governed Michelle Molly McNeill’s estate. 147 The other barrier is related, as Glen McNeill will need to present evidence to the court to corroborate his claim that the parties came to an agreement to share their matrimonial property such that he is a creditor of the estate. Section 11 of Alberta’s Evidence Act, RSA 2000, c A-18 requires corroboration of an interested party’s claim against a deceased’s estate: 148 In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposed or interested party shall not obtain a verdict, judgment or decision on that party’s own evidence in respect of any matter occurring before the death of the deceased person, unless the evidence is corroborated by other material evidence. 149 The requirement of corroboration does not mean there must be independent proof of the claimant’s evidence. The corroborative evidence must only make the claimant’s statements more probable or strengthened in the judicial mind: Harvie v. Gibbons (1980), 109 D.L.R. (3d) 559, 12 Alta. L.R. (2d) 72 (Alta. C.A.), at para 39; Stochinsky v. Chetner Estate, 2003 ABCA 226, 330 A.R. 309 (Alta. C.A.), at para 29. The evidence may include documentary evidence, evidence from other witnesses, or circumstantial evidence: Harvie at para 39; Meisner v. Bourgaux Estate (1994), 131 N.S.R. (2d) 244, 4 E.T.R. (2d) 295 (N.S. S.C.), Kendrick v. Dominion Bank (1920), 58 D.L.R. 309, 48 O.L.R. 539 (Ont. C.A.). 150 There was reference in the examination of Glen McNeill prior to this hearing that there are emails where he requested the money from Molly, but they were not presented to the court. There may also be other evidence to corroborate Glen McNeil’s claim. At this juncture it would be premature to decide this claim, both due to the state of the evidence and submissions, and due to the explicit directions in the Order. 151 In summary, I have found the 2011 Will should be validated as setting out the final testamentary intentions of Michelle Molly McNeill and may be admitted to probate. If the parties are unable to agree on costs, they may make an appointment to do so. Mother’s application granted; husband’s application dismissed. 158 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

[Indexed as: Poitras v. Khan] JASON POITRAS (APPLICANT) and AMAN KHAN (RESPONDENT) Saskatchewan Court of Queen’s Bench Docket: Regina QBG 1989/16 2016 SKQB 346 R.S. Smith J. Judgment: October 21, 2016 Aboriginal law –––– Miscellaneous –––– Wills — Testator was Aboriginal woman who had three children and who lived on reserve — Testator executed will in 2004 in which she appointed one son as trustee and executor and named all three children as beneficiaries in nearly equal shares — Testator met and married husband in 2006, and they started living in testator’s home on reserve in 2010 — Testator passed away in 2014 — Son brought application for letters probate appointing him executor of testator’s estate — Application granted on terms — Letters probate were not to issue until executor paid appropriate Surro- gate Court fee and not until passage of 30 days from date hereof — Validity of testator’s 2004 will was confirmed — Indian Act created special legislative regime dealing with testimonial dispositions by members of First Nations — Un- like Wills Act, 1996, there was no provision in Indian Act revoking will upon marriage — Will was not declared void pursuant to ss. 46(1)(c) or (f) of Indian Act since husband’s right to reasonable share in estate was not prejudiced by will’s validity — Husband was not without remedy since he could make application pursuant to s. 30 of Family Property Act and might well have claim against estate under Dependants’ Relief Act, 1996. Statutes considered: Dependants’ Relief Act, 1996, S.S. 1996, c. D-25.01 Generally — referred to Family Homes on Reserves and Matrimonial Interests or Rights Act, S.C. 2013, c. 20 Generally — referred to s. 34(1) — considered s. 34(3) — considered Family Property Act, S.S. 1997, c. F-6.3 Generally — referred to s. 30 — considered s. 30(2) — considered Poitras v. Khan R.S. Smith J. 159

Indian Act, R.S.C. 1985, c. I-5 Generally — referred to s. 42(1) — considered s. 43 — considered s. 44 — considered s. 45 — considered s. 46 — considered s. 46(1)(c) — considered s. 46(1)(f) — considered s. 48(1) — considered s. 48(2) — considered s. 88 — considered Wills Act, 1996, S.S. 1996, c. W-14.1 Generally — referred to s. 17 — considered s. 17(1) — considered Rules considered: Queen’s Bench Rules, Sask. Q.B. Rules 2013 R. 16-16 — considered Regulations considered: Indian Act, R.S.C. 1985, c. I-5 Indian Estates Regulations, C.R.C. 1978, c. 954 s. 15 — considered

APPLICATION by son of Aboriginal testator for letters probate appointing him executor of testator’s estate.

Riley O. Potter, for Applicant J. Niel Halford, for Respondent

R.S. Smith J.: Introduction 1 This application concerns the validity of the last will and testament of Sharon Poitras executed on August 12, 2004 [Will]. 2 The applicant, Jason Poitras, is Ms. Poitras’ son and was appointed executor under the Will. He applies for letters probate pursuant to Rule 16-16 of The Queen’s Bench Rules appointing him executor of Ms. Poi- tras’ estate. 3 The respondent, Aman Khan, maintains that the Will is not valid and should be declared void, thus creating an intestacy. No doubt, in the face 160 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

of such a declaration, Mr. Khan would apply for letters of administration in relation to Ms. Poitras’ estate. 4 This application involves the intersection of provisions under The Wills Act, 1996, SS 1996, c W-14.1 [Wills Act], and sections dealing with testamentary dispositions by First Nations under the Indian Act, RSC 1985, c I-5 [Indian Act].

Background 5 Sharon Poitras died on April 4, 2014, at the age of 55 years. She was survived by her three adult children: Jason Poitras, Melissa Duley and Joel Poitras. She was also survived by her husband, Aman Khan. 6 As mentioned, the Will appoints the applicant as trustee and executor of Ms. Poitras’ estate. Jason Poitras and his two siblings, Melissa and Joel, are beneficiaries of the estate in nearly equal shares. 7 Subsequent to executing the Will, Ms. Poitras entered into a spousal relationship with the respondent, Mr. Khan. According to Mr. Khan’s affidavit, the two met online in March of 2006 and began a relationship thereafter. Ms. Poitras traveled to Pakistan in 2006 where they were married on November 18, 2006. Proof of the marriage was evidenced by way of a Muslim marriage certificate. 8 Mr. Khan began residing with Ms. Poitras at her home on Peepeekisis First Nation in September 2010. The two resided in this home together until Ms. Poitras’ passing in 2014. 9 Since Ms. Poitras and Mr. Khan did not meet until 2006, the Will, executed in 2004, made no provision in relation to Mr. Khan. 10 Following Ms. Poitras’ death, the applicant attempted to manage the estate by way of Aboriginal Affairs and Northern Development Canada [AANDC], as is the ordinary practice for estates of Status Indians on reserve. 11 The applicant’s affidavit states that he provided an original copy of the Will to AANDC on April 14, 2014. In November of 2014, AANDC advised that Mr. Khan was contesting the validity of the Will and invited Mr. Poitras’ response. A response was given. AANDC reflected upon the matter and determined that they would decline jurisdiction, transferring jurisdiction for the dispute to the Queen’s Bench Court in Saskatchewan. 12 Various concerns exist in relation to the administration of the estate, including unresolved funeral expenses and outstanding debts owing to Poitras v. Khan R.S. Smith J. 161

the Peepeekisis First Nation. It is necessary for all the parties to know whether the Will is valid or if Ms. Poitras’ estate is an intestacy.

Applicable Legislation 13 If Ms. Poitras was not a First Nation’s person residing on the reserve, the debate over her Will would be brief. Section 17(1) of the Wills Act provides: 17(1) A will is revoked when: (a) the testator marries; or (b) the testator has cohabited in a spousal relationship continuously for two years. 14 Section 17(1) of the Wills Act reflects a societal reality. Entering into a spousal relationship, either by cohabiting or formal act of marriage, is a significant step that changes the legal and familial landscape of the person involved. As a result, the legislature has concluded that any prior testamentary disposition will not be considered valid in the face of the new spousal reality. 15 By contrast, there is no such provision under the Indian Act. The In- dian Act creates a special legislative regime dealing with testimonial dispositions by First Nations. It is only to the Indian Act this court must look to determine whether Ms. Poitras’ Will is valid. Section 88 of the Indian Act provides: 88 Subject to the terms of any treaty and any other Act of Parliament, all laws of general application from time to time in force in any province are applicable to and in respect of Indians in the province, except to the extent that those laws are inconsistent with this Act or the First Nations Fiscal Management Act, or with any order, rule, regu- lation or law of a band made under those Acts, and except to the extent that those provincial laws make provision for any matter for which provision is made by or under those Acts. 16 The inefficacy or inapplicability of s. 17 of the Wills Act is further confirmed by s. 15 of the Indian Estates Regulations, CRC, c 954 which provides: 15 Any written instrument signed by an Indian may be accepted as a will by the Minister whether or not it conforms with the requirements of the laws of general application in force in any province at the time of the death of the Indian. 162 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

17 The relevant provisions of the Indian Act are as follows: Powers of Minister with respect to property of deceased Indians 42 (1) Subject to this Act, all jurisdiction and authority in relation to matters and causes testamentary, with respect to deceased Indians, is vested exclusively in the Minister and shall be exercised subject to and in accordance with regulations of the Governor in Council. ... Particular powers 43 Without restricting the generality of section 42, the Minister may (a) appoint executors of wills and administrators of estates of deceased Indians, remove them and appoint others in their stead; (b) authorize executors to carry out the terms of the wills of deceased Indians; (c) authorize administrators to administer the property of Indians who die intestate; (d) carry out the terms of wills of deceased Indians and administer the property of Indians who die intestate; and (e) make or give any order, direction or finding that in his opinion it is necessary or desirable to make or give with respect to any matter referred to in section 42. Courts may exercise jurisdiction with consent of Minister 44 (1) The court that would have jurisdiction if a deceased were not an Indian may, with the consent of the Minister, exercise, in accordance with this Act, the jurisdiction and authority conferred on the Minister by this Act in relation to testamentary matters and causes and any other powers, jurisdiction and authority ordinarily vested in that court. Minister may refer a matter to the court (2) The Minister may direct in any particular case that an application for the grant of probate of the will or letters of administration of a deceased shall be made to the court that would have jurisdiction if the deceased were not an Indian, and the Minister may refer to that court any question arising out of any will or the administration of any estate. Poitras v. Khan R.S. Smith J. 163

Orders relating to lands (3) A court that is exercising any jurisdiction or authority under this section shall not without the consent in writing of the Minister enforce any order relating to real property on a reserve. 18 As noted, s. 44 has been invoked by the Minister and thus the Queen’s Bench Court is cloaked with jurisdiction in this matter. 19 Sections 45 and 46 of the Indian Act provide: Indians may make wills 45 (1) Nothing in this Act shall be construed to prevent or prohibit an Indian from devising or bequeathing his property by will. Form of will (2) The Minister may accept as a will any written instrument signed by an Indian in which he indicates his wishes or intention with respect to the disposition of his property on his death. Probate (3) No will executed by an Indian is of any legal force or effect as a disposition of property until the Minister has approved the will or a court has granted probate thereof pursuant to this Act. Minister may declare will void 46 (1) The Minister may declare the will of an Indian to be void in whole or in part if he is satisfied that (a) the will was executed under duress or undue influence; (b) the testator at the time of execution of the will lacked testamentary capacity; (c) the terms of the will would impose hardship on persons for whom the testator had a responsibility to provide; (d) the will purports to dispose of land in a reserve in a manner contrary to the interest of the band or contrary to this Act; (e) the terms of the will are so vague, uncertain or capri- cious that proper administration and equitable distribution of the estate of the deceased would be difficult or impossible to carry out in accordance with this Act; or (f) the terms of the will are against the public interest. 164 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

Where will declared void (2) Where a will of an Indian is declared by the Minister or by a court to be wholly void, the person executing the will shall be deemed to have died intestate, and where the will is so declared to be void in part only, any bequest or devise affected thereby, unless a contrary intention appears in the will, shall be deemed to have lapsed. 20 As can be seen, the Indian Act provides the Minister (and now the Queen’s Bench Court) with considerable authority over a First Nation’s will. The significant provisions are that the will can be declared void if it imposes hardship on persons to whom the testator had responsibility, or if the will is contrary to the interests of the Band or as otherwise seen as against the public interest.

Respective Positions 21 Mr. Khan argues that as he was Ms. Poitras’ husband, consideration by the court of s. 46(1)(c) of the Indian Act is triggered. He asserts the fact that he is not provided for in the Will should prompt the court to declare it void on that basis. 22 Mr. Khan would also argue that the court should recognize the patent common sense of s. 17 of the Wills Act, namely marriage is a significant act which should, ipso facto, place into question the testamentary wishes reflected in a previous will. He arguably engages s. 46(1)(f) of the Indian Act. 23 Mr. Khan submits that a rational review by the court should lead to the conclusion that the Will should be declared void, thus creating an intestacy. The Indian Act addresses an intestacy of a First Nation. Sec- tion 48 provides, in part: Surviving spouse’s share 48 (1) Where the net value of the estate of an intestate does not, in the opinion of the Minister, exceed seventy-five thousand dollars or such other amount as may be fixed by order of the Governor in Council, the estate shall go to the survivor. [spouse] Idem (2) Where the net value of the estate of an intestate, in the opinion of the Minister, exceeds seventy-five thousand dollars, or such other amount as may be fixed by order of the Governor in Council, sev- Poitras v. Khan R.S. Smith J. 165

enty-five thousand dollars, or such other amount as may be fixed by order of the Governor in Council, shall go to the survivor, and (a) if the intestate left no issue, the remainder shall go to the survivor, (b) if the intestate left one child, one-half of the remainder shall go to the survivor, and (c) if the intestate left more than one child, one-third of the remainder shall go to the survivor, and where a child has died leaving issue and that issue is alive at the date of the intestate’s death, the survivor shall take the same share of the estate as if the child had been living at that date. 24 It is worthwhile to note that Ms. Poitras’ estate is not less than $535,000. 25 The applicant, Mr. Poitras entreats the court to grant letters probate and has filed an application for grant of probate respecting the Will. Mr. Poitras argues that the testamentary intentions of Sharon Poitras are clear in the 2004 Will. More to the point, they are also logical, namely the equal division of her estate among her three children. 26 He acknowledges that Ms. Poitras’ marriage to Mr. Khan in 2006 was a significant step. Mr. Khan’s family property rights to Ms. Poitras’ estate will allow his interest to be protected and the balance of the estate will be divided among the three siblings and thus fairness is preserved for all.

Analysis 27 I accept the fact that the Will reflects a logical and loving mother’s testamentary wishes to her children. At the same time, the interest of Mr. Khan cannot be lightly discarded. However, I am comforted by the fact that Mr. Khan is not without remedy. 28 Under provincial legislation, Mr. Khan can make an application as a spouse of the deceased pursuant The Family Property Act, SS 1997, c F- 6.3. Section 30 provides: 30(1) An application for a family property order may be made or continued by a surviving spouse after the death of the other spouse or may be continued by the personal representative of the deceased spouse. (2) No application by a surviving spouse for a family property order may be commenced more than six months after the date of the issue 166 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

of a grant of probate or administration for the estate of the deceased spouse. (3) Where the deceased spouse died intestate, no court, in making a distribution of family property pursuant to an application made or continued by a surviving spouse or continued by the personal representative of a deceased spouse, shall consider the amount payable to a spouse pursuant to The Intestate Succession Act, 1996, and no order made pursuant to this Act affects the rights of the surviving spouse on intestacy. 29 Although I cannot opine, in any conclusive way, it may well be that Mr. Khan has a claim against the estate under The Dependants’ Relief Act, 1996, SS 1996, c D-25.01. 30 It is interesting to note that legislation is evolving with respect to family homes on First Nations. The federal Family Homes on Reserves and Matrimonial Interests or Rights Act, SC 2013, c 20, will impact on people in Mr. Kahn’s position. 31 Section 34(1) and (3) provides: Entitlement of survivor 34(1) On the death of a spouse or common-law partner, the survivor is entitled, on application made under section 36, to an amount equal to one half of the value, on the valuation date, of the interest or right that was held by the deceased individual in or to the family home and to the amounts referred to in subsections (2) and (3). ... (3) A survivor who is not a member of the First Nation on whose reserve are situated any structures and lands that are the object of interests or rights that were held by the deceased individual is also entitled to an amount equal to the total of (a) one half of the value, on the valuation date, of matrimonial interests or rights referred to in paragraphs (a) and (b) of the definition matrimonial interests or rights in subsection 2(1) that were held by the deceased individual in or to structures situated on a reserve of that First Nation, (b) the greater of (i) one half of the appreciation in value, between the day on which the conjugal relationship began and the valuation date inclusive, of matrimonial interests or rights referred to in paragraph (c) of that definition that were held by Poitras v. Khan R.S. Smith J. 167

the deceased individual in or to structures situated on a reserve of that First Nation, and (ii) the difference between the payments that the survivor made towards improvements made, between the day on which the conjugal relationship began and the valuation date inclusive, to structures situated on a reserve of that First Nation that are the object of matrimonial interests or rights referred to in that paragraph (c) that were held by the deceased individual, and the amount of debts or other liabilities outstanding on the valuation date that were assumed to make the payments, and (c) the difference between the payments that the survivor made towards improvements made, between the day on which the conjugal relationship began and the valuation date inclusive, to the following lands and structures situated on a reserve of that First Nation, and the amount of debts or other liabilities outstanding on the valuation date that were assumed to make the payments: (i) lands that are the object of matrimonial interests or rights that were held by the deceased individual, and (ii) structures that are the object of interests or rights that were held by the deceased individual that would have been matrimonial interests or rights referred to in that paragraph (c) if they had appreciated during the conjugal relationship. 32 The above legislation however is of no assistance to Mr. Kahn. It became effective December 16, 2014, months after the untimely death of Ms. Poitras. 33 Notwithstanding that the new federal legislation is unavailable, Mr. Kahn is still possessed of the rights provided to him under the Family Property Act of Saskatchewan where he has a prima facie claim for one half of the value of family property accrued from the date of marriage until Ms. Poitras’ passing. In addition, as noted, he may have a claim under The Dependants’ Relief Act, 1996. 168 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

34 Ultimately, I conclude the respondent’s right to a reasonable share in the estate is not prejudiced by the Will’s validity nor the applicant’s appointment as executor thereunder.

Decision 35 Accordingly, I confirm the validity of Ms. Poitras’ Will dated August 12, 2004. I further grant to Jason Poitras, pursuant to his application filed with the court on August 26, 2016, letters probate in relation to said Will and estate. However, letters probate are not to issue until Jason Poitras has paid the appropriate Surrogate Court fee and not until the passage of 30 days from the date hereof. 36 Mr. Khan is reminded that the six-month time limit contained in s. 30(2) of The Family Property Act will run from the date of the issue of those letters probate. 37 This has been an unfortunate family issue arising from the unex- pected death of Sharon Poitras. In my view, no larger good is served by an award of costs. Application granted on terms. Sweetnam v. Williamson Estate 169

[Indexed as: Sweetnam v. Williamson Estate] STAR SWEETNAM (Plaintiff) and DIANNE LESAGE and TERRY DOOLEY, in their capacities as estate trustees of the Estate of Martin Arthur Williamson (Defendants) Ontario Superior Court of Justice Docket: 2192/11 2016 ONSC 5110 Gray J. Judgment: August 15, 2016* Estates and trusts –––– Estates — Actions involving personal representa- tives — Practice and procedure — Costs — Miscellaneous –––– Pursuant to action brought by testator’s daughter S, testator’s wills of August and September 2010 were declared invalid — Since wills were held to be invalid, testator’s estate passed as intestacy and entire estate was to go to S — S made two offers to settle that were considerably less favourable to her than result of trial — Sub- missions were made regarding costs — S was entirely successful and was entitled to costs in amount of $311,679.56 all-inclusive payable by trustees L and D jointly and severally — L and D were not to recover those costs from estate — Dismissal of S’s claims based on undue influence, proprietary estoppel and de- pendant’s relief did not affect matter much as it was unnecessary to deal with those issues once wills were held to be invalid — Overwhelming portion of trial was taken up with testamentary capacity issue, however, S’s claim was dis- counted by 20 per cent based on rough estimate of amount other issues took at trial — It was not fair or equitable for trustees who propounded will to recover that amount from estate, as this would mean that S would be paying unsuccessful parties’ costs, even though she was successful — Trustees both applied for certificate of appointment as estate trustee and trustees stood on same footing in terms of costs of proceeding — Trustees acted unreasonably by failing to accept either of offers to settle made by S — In particular, first offer, representing fraction of value of estate, was made before any significant costs of litigation were incurred — No explanation was offered for refusal to accept that offer — Re- fusal to accept second offer could not be said to be reasonable in circumstances — While outcome of litigation was unpredictable, it should have been apparent to trustees that litigation carried significant risks for estate — Those risks could have been eliminated, and still left fairly large amounts to be paid to

* A corrigendum issued by the court on August 22, 2016 has been incorporated herein. 170 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

named beneficiaries, if either of modest offers had been accepted — Instead, trustees chose to proceed with litigation and incur significant costs — Trustees should not be rewarded by having their costs paid by S — Litigation was hard- fought from beginning and trustee L in particular conducted proceedings in extremely adversarial manner, including retaining private investigators to look into S’s activities — Amount claimed by L, in amount of $641,642.47, was grossly excessive. Cases considered by Gray J.: Brown v. Rigsby (2016), 2016 ONCA 521, 2016 CarswellOnt 10410 (Ont. C.A.) — referred to Dueck v. Chaplin (2015), 2015 ONSC 4604, 2015 CarswellOnt 10888, [2015] O.J. No. 3795 (Ont. S.C.J.) — referred to Goodman Estate v. Geffen (1991), [1991] 5 W.W.R. 389, 42 E.T.R. 97, (sub nom. Geffen v. Goodman Estate) [1991] 2 S.C.R. 353, 125 A.R. 81, 14 W.A.C. 81, 80 Alta. L.R. (2d) 293, (sub nom. Geffen v. Goodman Estate) 81 D.L.R. (4th) 211, 127 N.R. 241, [1991] S.C.J. No. 53, 1991 CarswellAlta 91, 1991 CarswellAlta 557, EYB 1991-85679 (S.C.C.) — referred to McDougald Estate v. Gooderham (2005), 2005 CarswellOnt 2407, 17 E.T.R. (3d) 36, (sub nom. McDougald Estate, Re) 199 O.A.C. 203, 255 D.L.R. (4th) 435, [2005] O.J. No. 2432 (Ont. C.A.) — referred to Neuberger Estate v. York (2016), 2016 ONCA 303, 2016 CarswellOnt 6303, 16 E.T.R. (4th) 35, [2016] O.J. No. 2151 (Ont. C.A.) — referred to Sawdon Estate v. Watch Tower Bible and Tract Society of Canada (2014), 2014 ONCA 101, 2014 CarswellOnt 1274, 93 E.T.R. (3d) 247, 39 R.F.L. (7th) 6, 119 O.R. (3d) 81, 315 O.A.C. 129, 370 D.L.R. (4th) 686 (Ont. C.A.) — referred to

ADDITIONAL REASONS to judgment reported at Sweetnam v. Williamson Es- tate (2016), 2016 ONSC 4058, 2016 CarswellOnt 9878 (Ont. S.C.J.), regarding costs.

Gregory M. Sidlofsky, Brendan Donovan for Plaintiff, Star Sweetnam Ian M. Hull, Doreen Lok Yin So for Defendant, Dianne Lesage Mark Penfold for Defendant, Terry Dooley

Gray J.:

1 In my reasons for judgment, I invited the parties to file written submissions with respect to costs. Those submissions have now been filed. 2 Counsel for Star Sweetnam submits that his client was entirely successful in having the two relevant wills declared invalid, and should be Sweetnam v. Williamson Estate Gray J. 171

entitled to costs on a substantial indemnity scale in the amount of $389,599.45. 3 Among other things, counsel refers to two Offers to Settle made by Star Sweetnam. The first offer was made on April 26, 2012. Under that offer, Ms. Sweetnam would receive the cottage; her father’s ashes; and her father’s wedding ring. 4 The second Offer was served on March 7, 2016. Under that offer, Ms. Sweetnam would receive $2.5 million from the estate. 5 Counsel submits that pursuant to my judgment Star will receive the benefit of the entirety of the estate, which is worth approximately $7.5 million, less whatever is owing to the Estate Trustee During Litigation. Accordingly, it would be unjust to permit the defendants to recover their costs, and any costs owing to Ms. Sweetnam, from the estate. If they are so entitled, it will mean that Ms. Sweetnam will be paying those costs even though she was successful in the litigation. 6 Counsel submits that under the modern rules relating to estate litigation, the normal costs rules apply, with some modification. Generally speaking, the successful party is entitled to costs. Estate trustees are entitled to be indemnified out of the estate for their costs, including costs they must pay to another party, provided they have acted reasonably. 7 In this case, counsel submits that the estate trustees have acted unreasonably, by refusing to accept reasonable offers to settle. 8 Counsel submits that if Terry Dooley is entitled to any costs from Ms. Sweetnam, they should be paid by Dianne Lesage. 9 Counsel for Dianne Lesage submits that Ms. Lesage was obliged to propound the will. He submits that his client acted reasonably throughout, and is entitled to costs of her own, which she claims in the amount of $641,642.47 on a substantial indemnity basis, payable out of the estate. Furthermore, counsel submits that Ms. Lesage should not have to personally bear any costs awarded to Ms. Sweetnam, and should be entitled to defray any such costs out of the estate. 10 Counsel submits that a case where a will is propounded is in the nature of an inquisitorial process, as opposed to being strictly adversarial. Counsel submits that the court has a duty to determine the issues raised in such a proceeding, and it is the duty of the proponents of the will to place before the court all relevant evidence for the court’s consideration. 172 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

11 Counsel submits that Ms. Lesage had no choice but to take a position consistent with the testator’s expressed intentions, and she should not be penalized for so doing. 12 Counsel submits that Ms. Sweetnam’s Offer to Settle in the amount of $2.5 million should not affect the matter, since it would not have left sufficient assets in the estate to satisfy potential claims for dependants’ relief for Grace Pater and Lise Boudreau. Furthermore, counsel submits that the court is not required to consider the costs consequences of offers to settle in estate matters to the same degree as would be the case in ordinary litigation. 13 Counsel submits that Ms. Sweetnam was unsuccessful in a number of claims she made based on undue influence, proprietary estoppel and dependants’ relief. Furthermore, she abandoned some additional claims at trial. 14 For these reasons, counsel submits that Ms. Lesage should be awarded her own costs out of the estate in the amount of $641,642.47, and if any costs are awarded against her she should be allowed to recover those costs from the estate. 15 Counsel for Terry Dooley claims costs in the amount of $104,995.60 on a substantial indemnity basis. 16 Counsel submits that Mr. Dooley was not propounding the will and did not voluntarily enter into the litigation. Counsel submits that Mr. Dooley was brought into the litigation personally as a result of an allegation that he had exercised undue influence in the making of one of the testator’s wills. Counsel points out that that allegation was dismissed by me, and no evidence whatsoever was tendered to support it. 17 For these reasons, counsel submits that Mr. Dooley should not be required to pay any costs, and he should be awarded his own costs in the amount of $104,995.60.

Analysis 18 There are some unique features here that complicate the issue of costs. First, since the wills were held to be invalid, Mr. Williamson’s estate passes as an intestacy, and Star Sweetnam will receive the entire estate. Thus, if any costs are awarded against or are recoverable from the estate, in reality they will be paid by Star Sweetnam. 19 Second, Star Sweetnam made two Offers to Settle that were considerably less favourable to her than the result of the trial. Under the first Sweetnam v. Williamson Estate Gray J. 173

Offer to Settle, made in 2012, Star would have received the cottage, her father’s ashes, and a wedding ring. While I have no evidence as to the value of the cottage, I can assume that the totality of the settlement pro- posal was a fraction of the overall value of the estate. 20 The second Offer to Settle made shortly before trial, was for $2.5 million. 21 While counsel for Ms. Lesage explains the refusal to accept the second offer on the basis that it may have left insufficient assets to pay potential claims by Grace Pater and Lise Boudreau, counsel offers no explanation for refusing to accept the first offer. 22 Under the modern principles relating to estate litigation, the historical practice of ordering an estate to bear costs of all parties has been replaced by the ordinary costs principle that the loser pays: see McDougald Estate v. Gooderham (2005), 255 D.L.R. (4th) 435 (Ont. C.A.). How- ever, generally speaking, estate trustees are entitled to be indemnified for all reasonably incurred costs, including legal costs of an action, to the extent that they are not recovered from another party: see Goodman Estate v. Geffen, [1991] 2 S.C.R. 353 (S.C.C.); Sawdon Estate v. Watch Tower Bible and Tract Society of Canada (2014), 119 O.R. (3d) 81 (Ont. C.A.); Neuberger Estate v. York, [2016] O.J. No. 2151 (Ont. C.A.); and Brown v. Rigsby, 2016 ONCA 521 (Ont. C.A.). That general principle is subject to the overriding proviso that the estate trustees have acted reasonably. Where they have acted unreasonably, the trustees may not recover their costs from the estate: Brown v. Rigsby, supra, at para. 14. 23 Before dealing with the costs issue itself, I will dispose of two subsid- iary points. 24 I do not think the dismissal of Ms. Sweetnam’s claims based on undue influence, proprietary estoppel and dependants’ relief affect the matter very much. As I noted in my reasons for judgment, it was, strictly speaking, unnecessary for me to deal with those issues once I declared the wills invalid. Essentially, they became moot. Thus, the only remaining relevance they have is whether they should result in some reduction of Ms. Sweetnam’s claim based on the amount of time they took at trial. In my view, the overwhelming portion of the trial was taken up with the testamentary capacity issue. That said, I will discount Ms. Sweetnam’s claim by 20 per cent based on a rough estimate of the amount of time the other issues took at trial. 25 I do not accept Mr. Dooley’s submission that he was not a propounder of the will. He, together with Ms. Lesage, applied for a Certifi- 174 ESTATES AND TRUSTS REPORTS 24 E.T.R. (4th)

cate of Appointment as Estate Trustee. He has never renounced his appointment as an estate trustee, and it is likely, at this stage, that he could not renounce: see Dueck v. Chaplin, [2015] O.J. No. 3795 (Ont. S.C.J.), at paras. 42 and 43. In my view, he stands on the same footing as Ms. Lesage in terms of costs of this proceeding. Of course, this does not affect his entitlement to costs, including legal costs, that he has incurred as the Estate Trustee During Litigation, and which will be dealt with on the passing of his accounts.. 26 In my view, Ms. Sweetnam was entirely successful and is entitled to costs. I have reduced her claim of $389,599.45 by 20 per cent, and thus fix her entitlement at $311,679.56, all-inclusive. 27 The question is whether the trustees should be entitled to recover that amount from the estate. If they do, it means Star Sweetnam will be paying the unsuccessful parties’ costs, even though she was successful. I do not think that is fair or equitable. 28 Furthermore, I think the trustees acted unreasonably by failing to accept either of the Offers to Settle made by Ms. Sweetnam. In particular, the first offer, representing a fraction of the value of the estate, was made before any significant costs of the litigation were incurred. No explanation has been offered for refusing to accept that offer. 29 As far as the second offer is concerned, I am not convinced that the refusal to accept that offer was reasonable either. The reasons offered by Mr. Hull are less than compelling. 30 I am far from saying that the non-acceptance of an offer to settle, standing alone, constitutes unreasonable conduct attracting costs consequences for an estate trustee. I simply say that in this circumstance it was unreasonable and does attract costs consequences. While the outcome of litigation is, of course, unpredictable, it should have been apparent to the trustees that this litigation carried significant risks for the estate. Those risks could have been eliminated, and still have left fairly large amounts to be paid to the named beneficiaries, if either of the rather modest offers had been accepted. Instead, the trustees chose to soldier on and incur significant costs. I do not think they should be rewarded by having their costs paid by Ms. Sweetnam. 31 I also note that this litigation was not conducted as a proceeding that simply consisted of the trustees putting forward the evidence in a non- contentious way for the consideration of the Court. This was hard-fought litigation from day one. Ms. Lesage, in particular, conducted the proceedings in a very adversarial manner. Among other things, she retained Sweetnam v. Williamson Estate Gray J. 175

private investigators to look into Ms. Sweetnam’s activities. Her claimed costs of $641,642.47 are almost double the claimed costs of $389,599.45 of Ms. Sweetnam, and more than six times the claimed costs of $104,995.60 of Mr. Dooley. Ms. Lesage was perfectly entitled to conduct the litigation in such a fashion, but where she does so and loses, she should not be surprised to be treated like an ordinary litigant who loses. 32 I am also constrained to say that the amount claimed by Ms. Lesage, $641,642.47, is grossly excessive. Had I ordered costs paid to her, I would have awarded no more than half of that. 33 Accordingly, I order that the costs of Ms. Sweetnam, fixed in the amount of $311,679.56, all-inclusive, be paid by Ms. Lesage and Mr. Dooley, jointly and severally. They shall not recover those costs from the estate. 34 For the same reason, I order that the claims for costs of Ms. Lesage and Mr. Dooley be rejected, and that they not be entitled to recover their costs from the estate. Order accordingly.