Monday, August 05, 2019

Palazzo di Giustizia (Palace of Justice), Rome, Italy

Kim and I took these photographs of the Palace of Justice last summer in Rome.

Saturday, July 27, 2019

Order Declaring Person Incapable of Managing Her Person Revokes Power of Attorney

[This guest post is written by Taeya Fitzpatrick of our firm, Sabey Rule LLP. She discusses the impact of an order declaring someone incapable of managing her person in British Columbia on a power of attorney.]

I have recently come across an interesting issue with respect to the Patients Property Act and, perhaps, an unintended consequence in the way section 19 was drafted.

Under the Patients Property Act, a person can be declared a patient by reason of being unable to care for their person, their finances, or both. Another person can then be appointed as the committee of the estate of the patient, committee of the person of the patient, or both.

However, even if the application before the Court only concerns the person, the effect of being declared a patient results in any and all power of attorney agreements being terminated from the date of the order:

Effect on power of attorney or representation agreement of person becoming a patient by court order

19  On a person becoming a patient as defined in paragraph (b) of the definition of "patient" in section 1,
(a) every power of attorney given by the person is terminated, and
(b) unless the court orders otherwise, every representation agreement made by the person is terminated.

Section 1 part b provides the definition of “Patient” relevant to section 19:

(b)          a person who is declared under this Act by a judge to be
(i) incapable of managing his or her affairs,
(ii) incapable of managing himself or herself, or
(iii) incapable of managing himself or herself or his or her affairs;

Therefore, once a person is declared incapable, if no one applies to be committee of the patient’s finances, the Public Guardian and Trustee becomes committee by default. At issue in Re Clay, 2016 BCSC 261, was whether the declaration of incompetence severed the representation agreement. Unlike a power of attorney, a representation agreement can be preserved by the court in appointing someone as a committee of the estate of a person.

In a recent case that I was personally involved in, the daughter of the patient applied for, and was granted, committeeship of the person of her mother. The daughter did so as the previous personal representative of the mother was no longer able to continue the job and no one had been appointed as an alternate. The daughter had only intended to take over her mother’s person and had no intention to disturb the power of attorney which had been granted to a trust company. Regardless of those intentions, the Patients Property Act operated to sever the power of attorney and the Public Guardian and Trustee became the acting committee of the estate of the mother.

I then, on behalf of the trust company applied to the court to resume the trust company’s handling of the mother’s finances. The application was successful, but as a result of the Ac, the mother was put to unnecessary expense. This should operate as a cautionary tale to counsel to make sure that their applications will not have unfortunate, unintended consequences.

Saturday, July 06, 2019

Supreme Court Civil Rules Amendments Change Procedures in Estate Litigation

Admittedly this isn't the most eye-catching title, but there are some significant amendments to the Supreme Court Civil Rules affecting the conduct of estate litigation matters that came into effect on July 1, 2019. I will highlight a couple of changes.

One of the changes is to broaden the scope of those persons who may file a notice of dispute. The purpose of a notice of dispute is to prevent the issuance of an estate grant when there is a dispute about a will or about the appointment of a personal representative. For example, someone may file a dispute if she alleges the will is invalid, or if she believes there are grounds to pass over the executor. 

The rule used to provide that a notice of dispute could be filed by a person to whom notice must be given of the application for an estate grant, which generally limited it to those who are beneficiaries or would be entitled to notice on an intestacy. The problem was that other people, such as beneficiaries of a prior will might have good grounds to file a notice of dispute, but would not be entitled to notice. I wrote about the problem in a previous post.

Now Rule 25-10 (1) also allows a person “who claims an interest under a prior or subsequent will” to file a notice of dispute.

Another welcome change is that Rule 25-14 has been amended to provide that most applications must now be brought either by a notice of application, if a probate file has been opened, or by petition if a probate file has not been opened. Previously, the Rules provided that many applications had to be made by requisition if a probate file had not been opened. In most cases, starting a proceeding, which in some cases could include multi-million dollar litigation, by requisition was nonsensical. A requisition is a request to the court, which is generally not served on other parties, and there are no rules setting out a time for other parties to respond. For example, before these amendments, if no probate file had been open, someone wishing to bring an application under Section 58 of the Wills, Estates and Succession Act asking the court whether a document that does not comply with the formal signing and witnessing requirements of a valid will should be given effect as a will, was required to apply be requisition. There was even a prescribed form of requisition. In practice, lawyers either filed a submission for an estate grant and then brought an application by notice of application, or ignored the rule requiring a requisition and proceeded by petition. There have been several decided cases under section 58 that were brought be petition. The change brings the Rules more in line with the practice. In contrast to requisitions, there are well developed rules relating to service and filing of responses (Rule 16-1).

Rule 25-14 (1.11) provides that applications may be made by requisitions in limited circumstances. You can use a requisition for an order pursuant to Rule 25-2 (14) changing the class of persons to whom notice of the application for an estate grant must be given, or dispensing with the requirement that the notice be sent to certain beneficiaries. You can also use a requisition to apply to shorten the time from 21 days in which notice of an application for an estate grant must be given before filing the materials for an estate grant.

As at today’s date, July 6, 2019, the online version of the Supreme Court Civil Rules in bclaws has not been updated to reflect these changes. I hope it will be updated within the next week.

Thursday, July 04, 2019

Re: Levesque

[This post is a guest post written by Keith Sabey,  of our firm Sabey Rule LLP about a recent case of his in which section 58 of the Wills, Estates and Succession Act was applied to a will in which the will-maker used white out to remove a beneficiary.]

When you complete your estate planning with a lawyer, you will generally receive a reporting letter, which explains the work completed. The letter will also typically contain cautions against doing certain things like writing on or marking the Will or removing the staples from the Will.

Unfortunately, it is not uncommon for will-makers to write on or otherwise make various markings and changes on their originally executed wills. This may be done by accident or it may be done in an attempt by the will-maker to alter or revoke all or portions of their Will. This problem is compounded when the will-maker makes these markings without telling anyone and the issue is only discovered after the time of death. This is not a new problem. The courts have battled with how to deal with this issue for a very long time.

The recent case of Re:Levesque, 2019 BCSC 927 , involved the application of white-out to cover one of seven residual beneficiaries. A disagreement arose between the remaining beneficiaries as to how to deal with the application of the white-out. Unfortunately, the white-out marking was not signed by the will-maker and by two witnesses as required by the Wills, Estates and Succession Act.

In cases where there is a marking on a will, there is a rebuttable presumption that the marking on the Will was made subsequent to the execution of the Will- see the discussion in Gillis v Ardies, 2009 BCSC 215 and in particular para 23. Evidence to the contrary including evidence from the witnesses to the Will is important. For example a witness to the Will may be able to provide evidence as to whether or not the marking on the Will existed at the time of execution of the Will.

Generally speaking, substantive, unsigned and un-witnessed markings on a Will are not effective. However there is a long-standing exception that provides that when a will-maker goes to the trouble of obliterating a word or phrase in a Will, so that it cannot be read upon ordinary inspection, the Will is admitted to probate with the words that are no longer apparent being left blank. In British Columbia, this exception is discussed in s. 54 of WESA. As explained by Mr. Justice Gomery in Re: Levesque, 2019 BCSC 927 at paras 24 – 28:

[24]        Alterations to a will are addressed in s. 54 of the WESA.  Essentially, it requires that an alteration made after the will was executed must be signed by the will’s maker whose signature must be witnessed by two witnesses, in each other’s presence and in the presence of the maker.  These requirements may be avoided:
a)    Under s. 54(4)(a), if the alteration is not substantive;
b)    Under s. 54(3)(a), if the alteration has made a word or provision illegible; or
c)    Under s. 54(3)(b), if the alteration is made effective by an order pursuant to s. 58.

[25]        The Alteration in this case is substantive and s. 54(4)(a) does not apply.
[26]        The exception in s. 54(3)(a) for alterations that make a word or provision illegible dates back to the English Wills Act, 1837 (1 Vict. c. 26, s. 21).  It was determined by the English courts, in reasoning that has been adopted in British Columbia, that the words or provision in question must be impossible to read by ordinary inspection of the document, without chemical or other analysis; Springay Estate (Re), [1991] B.C.J. No. 984 (S.C. Master).
[27]        In this case, an affiant has sworn that the provision in question listing Ms. Nixon as a beneficiary can be read under the white-out by holding the Will up to the light.  I have inspected the Will and come to the same conclusion.  I find that the Alteration has not made the provision illegible within the meaning of s. 54(3)(a).
[28]        The Alteration is therefore ineffective unless it is made effective by an order pursuant to s. 58.
Given that the name under the white-out could still be read by ordinary inspection by holding the Will up to a strong light source, Mr. Justice Gomery then considered the application of s. 58 of the WESA. This section may be used by the Court to find that the marking on a will represents the testamentary intentions of the will-maker to “revoke…[a] testamentary disposition of the deceased person” and for the Court to order that the marking is effective as though it had been properly made “as a revocation, alteration or revival of a will of the deceased person.” At paras 30-37 he explained:

[30]        The leading decision concerning the matters to be considered in deciding whether to make an order under s. 58(3) is Estate of Young, 2015 BCSC 182.  The reasoning in Estate of Young was approved by the Court of Appeal in Hadley Estate (Re), 2017 BCCA 311, aff’g 2016 BCSC 765.  In Estate of Young, Madam Justice Dickson identified two issues.  The first is whether the document – in this case, the Alteration – is authentic.  I have already found that the Alteration was made by the Deceased and the requirement of authenticity is satisfied.
[31]        Dickson J. identified the second issue as the core issue.  She relied on a decision of the Manitoba Court of Appeal addressing equivalent legislation to the WESA in George v. Daily (1997), 143 D.L.R. (4th) 273.  She stated, at paras. 34-36:
[34]      … The second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions, as that concept was explained in George.

[35]      In George the court confirmed that testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death.  The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death.  A deliberate or fixed and final intention is not the equivalent of an irrevocable intention, given that a will, by its nature, is revocable until the death of its maker.  Rather, the intention must be fixed and final at the material time, which will vary depending on the circumstances.

[36]      The burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is a balance of probabilities.  A wide range of factors may be relevant to establishing their existence in a particular case.  …

[32]        Accordingly, the question I must address, on a balance of probabilities, is whether the Alteration was a deliberate or fixed and final expression of the Deceased’s intention to remove Ms. Nixon from her Will.
[33]        Carefully dabbing white-out over the provision in question was undoubtedly a considered and deliberate act on the part of the Deceased.  She was applying the white-out to the original Will.  It was not a casual act.  The only reasonable inference is that her intention was to remove the provision from the Will.
[34]        There is no evidence that the Deceased was not of sound mind and lacked testamentary capacity at any point before she gave up custody of the Will in June 2018 or indeed before she died.
[35]        The likelihood is that the Deceased applied the white-out after she learned of Ms. Nixon’s marriage in January 2018.  This was nine years after she had made the Will and it is probable that she had forgotten Ms. Leung-Levesque’s advice about altering the Will, or she may not have taken it seriously.  The case reports record many cases in which makers of wills attempt to alter them without complying with the formal requirements.  This tendency of will makers to ignore the requirements of the statute is one of the reasons s. 58 was added to the legislation with the enactment of the WESA in 2009, allowing the Court to approve non-complying alterations and amendments where the will-maker’s intentions and continuing capacity to make a will are clear.
[36]        If the Deceased applied the white-out in the immediate aftermath of learning of Ms. Nixon’s marriage, she took no steps to reinstate or unrevoke the gift to Ms. Nixon after that.  She maintained an affectionate relationship with Ms. Nixon, giving her a marriage gift and congratulating her on her marriage to “a good hard-working man”.  It may be that she no longer felt that Ms. Nixon needed special provision as she had felt nine years earlier.  This is speculation.  The facts I am left with are that the Deceased made the Alteration deliberately, in the knowledge that she was altering the original Will, with the intended effect that Ms. Nixon was removed as a Beneficiary.
[37]        I conclude that the Alteration was a deliberate or fixed and final expression of the Deceased’s intention to remove Ms. Nixon from the Will.  Giving effect to the Deceased’s expressed intention, it is therefore appropriate to order that the Alteration be made effective pursuant to s. 58(3) of the WESA.
Mr. Justice Gomery also provided a useful summary of how costs are typically dealt with in applications where the parties are forced into litigation as a result of the conduct of the Deceased i.e. revoking a beneficiary in the Will without complying with the formal technical requirements, which forced the co-executors to apply to the court for directions. Specifically paras 38 – 41 read:

[38]        The co-executors seek an order for special costs, payable from the Estate.  Ms. Leung-Levesque, Wayne Levesque and Ms. Nixon oppose.
[39]        In Lee v. Lee Estate (1993), 84 B.C.L.R. (2d) 341, Master Horn discussed costs orders in probate or administration actions such as this.  At para. 13 he stated:
·        … In such cases where the validity of a will or the capacity of the testator to make a will or the meaning of a will is in issue, it is sometimes the case that the costs of all parties are ordered to be paid out of the estate. This is upon the principle that where such an issue must be litigated to remove all doubts, then all interested parties must be joined and are entitled to be heard and should not be out of pocket if in the result the litigation does not conclude in their favour. The estate must bear the cost of settling disputes as a cost of administration. This is the reasoning which underlies such cases as Re Dingwall (1967) 65 D.L.R. (3d) 43 (Ont. H.C.) and McNamara v. Hyde [1943] 2 W.W.R. 344 (B.C.S.C.) and Re Lotzkar Estate (1965) 51 W.W.R. 99 (B.C.C.A.). The question to be asked in such case is whether the parties were forced into litigation by the conduct of the testator or the conduct of the main beneficiaries.

[40]        The Court of Appeal quoted Master Horn’s reasoning with approval in Vielbig v. Waterland Estate (1995), 1 B.C.L.R. (3d) 76 at paras. 41-45. [41]        In my view, this is a case in which the parties were forced into litigation by the conduct of the Deceased.  Her alteration of the Will gave rise to a dispute among the beneficiaries of the Will.  It was reasonable for the executors to apply to the Court to resolve the dispute.  All parties’ costs should be paid from the Estate and the executors’ costs should be assessed as special costs; Mawdsley v. Meshen, 2011 BCSC 923 at paras. 35-40.
Another useful broader summary of how costs are handled in estate litigation matters can be found in Mr. Justice Silverman’s discussion in Jung v HSBC, 2007 BCSC 1740 at para 106-107:

[106]      The case law in estate proceedings supports the following general approach:
1.         The costs of and incidental to a proceeding will follow the event unless the court otherwise orders.

2.         If the cause of the litigation originated from the conduct or errors of the testator (i.e., unclear wording or validity of the will), then the costs of all parties will generally be paid from the estate on a full indemnity basis.

3.         If there were circumstances which provided reasonable and sufficient grounds to have brought the action relating to questions of capacity or allege undue influence or fraud, the court will not normally make an order for costs against the unsuccessful party.

4.         In an action under dependent relief legislation (i.e., where the proceedings are adversarial in nature and are not brought about by the actions of the testator), costs follow the event.

5.         All costs awards are subject to the court’s discretion and an overriding test of reasonableness.
Vielbig v. Waterland Estate (1995), 1995 CanLII 2544 (BC CA), 1 B.C.L.R. (3d) 76, 6 E.T.R. (2d) 1 (C.A.) Lee v. Lee Estate (1993), 1993 CanLII 2368 (BC SC), 84 B.C.L.R. (2d) 341, 50 E.T.R. 297

[107]      Underlying the above structure is the acknowledgement that probate actions are unlike other actions.  They are meant to discern the true intentions of someone who is deceased, and give effect to them if possible.  Such actions occupy a special status: Atchison v. Inkster (1983), 1983 CanLII 313 (BC CA), 47 B.C.L.R. 222, 15 E.T.R. 1 (C.A.).

Since the coming into force of s. 58 of WESA, we have developed a useful body of cases, which have begun to outline how far the courts will exercise their power to cure documents and Wills, which are not made in compliance with the strict formal requirements of WESA. It will be interesting to see how the case law develops in the future as the courts are presented with challenging fact patterns.

The case is an important reminder to consult with a lawyer anytime that you are considering making a Will or changes to your existing Will. The costs of having to make court applications regarding improperly completed Wills can be significant; both in terms of the legal costs and the accompanying stresses carried by families during the court proceeding.

Sunday, June 02, 2019

Huber Estate

There are very few reported cases in British Columbia in which a will has been rectified under section 59 of the Wills, Estates and Succession Act. This section has been in effect for five years, which is still relatively new. Section 59 allows the court to correct drafting and other errors in wills. The operation of this provision is illustrated in a recent decision of Madam Justice Francis, Huber Estate, 2019 BCSC 866.

Section 59 allows the court to rectify a will if the judge finds that the will does not reflect the will-maker’s intentions because of

(a)an error arising from an accidental slip or omission,
(b)a misunderstanding of the will-maker's instructions, or
(c)a failure to carry out the will-maker's instructions.
The court may consider direct evidence of the will-maker’s intentions, such as the drafting lawyer’s evidence of what the will-maker told the lawyer what she wanted in her will.

When Mary Louise Huber instructed her lawyer to draft her last will, she told her lawyer that she wanted the residue of her estate divided equally among her three sons. The will as drafted provided that her estate was to be payable to her “children.” The will then had the following clause:

"If any of my children are not then living but such child has left children of his who is or are then living, then the portion that such deceased child would have received if he had been living on the 30th day following the date of my death shall instead be divided in equal shares amongst his children who are then living."

The will was dated November 18, 2015, and Ms. Huber passed away March 23, 2018

Ms. Huber had a daughter who passed away in 1986, and her daughter had children. As drafted the will appears to divide the estate into four shares with one share going to Ms. Huber’s daughter’s children.

The lawyer who drafted the will gave evidence that Ms. Huber told her that she wanted to leave her estate to her three sons, and had not advised her that she had a daughter who had passed away.  in an estate-planning questionnaire Ms. Huber completed, she indicated that she only had three children. She told her lawyer that she the only change she wanted to make from her previous will was to change the executor, because her husband, who was her executor, had passed away. Under the previous will, Ms. Huber’s estate would have been divided among her three sons.

Madam Justice Francis granted the order rectifying the will so that the estate would be divided among the three sons. She wrote:

[8]             It is significant, in my view, that paragraph (j) uses the masculine gender in reference to the children of the Will-Maker.  It is also significant that the Will makes specific gifts to named grandchildren but does not include any gifts to the children of the Will-Maker’s predeceased daughter.
She also based her decision on the lawyer’s evidence. She found that based on the questionnaire, the lawyer reasonably understood Ms. Huber’s sons to be her only children. In this case, the error was rectified on the basis that the lawyer had misunderstood the will-maker’s instructions.

Monday, May 20, 2019

Minor Beneficiaries

Yes, I know the title is ambiguous. I don’t mean beneficiaries who receive a small share of an estate, but rather those who are under the age of majority in British Columbia, which is a person under the age of 19. If a minor is entitled to an inheritance and no trustee has been appointed for her, those funds must be paid to the Public Guardian and Trustee of British Columbia. This happens most frequently when a minor’s parent dies without a will. It may also apply in the case where a minor is left an inheritance by will, but the will does not have a clause appointing a trustee to hold the inheritance for the minor.

Section 153 (1) of the Wills, Estates and Succession Act says:

153 (1)Subject to subsections (2) and (3), if
(a)a minor is a beneficiary or an intestate successor, and
(b)there is no trustee or no trust created for the minor's interest in the estate,
the personal representative, on distribution of the estate, must pay or transfer the minor's interest in the estate to the Public Guardian and Trustee in trust for the minor.
In a recent decision, British Columbia (Public Guardian andTrustee) v. Child 3, 2019 BCCA 171, the Court of Appeal held that it was an error for a Supreme Court of British Columbia judge to order an administrator of the estate of a person who died without a will to order interim distributions directly to a minor’s parent to reimburse her for the child’s expenses and for funds she borrowed to pay expenses. Madam Justice Fisher wrote:

[8]             The language of s. 153(1) is unambiguous. It requires the administrators to pay any distribution of Mr. Yuan’s estate to the PGT on behalf of the minor beneficiaries, as there is no trustee in place.
[9]             There is good reason for this requirement. The PGT is the only trustee for these minor beneficiaries. As the PGT submitted before the chambers judge, it would not be truly acting as trustee if the distribution went directly to Mother 3. For example, in respect of past expenses, the PGT submitted that Mother 3 would be entitled to reimbursement for funds she used to pay Child 3’s expenses but not for funds she borrowed from others; in that case, the PGT would ensure that funds legitimately borrowed for Child 3’s expenses would be repaid to the lenders directly. Given the state of the materials in the record, it is difficult to understand the judge’s outright rejection of the PGT’s submissions.
[10]         It is also difficult to understand the judge’s failure to put his mind to s. 153 of WESA. Ordering specific funds to be paid to Mother 3 for specified purposes is insufficient, in my view, as it is the trustee’s duty to act in the best interests of Child 3 to ensure that the distributions are appropriate for his needs. I agree with the PGT’s submission that the judge’s order created a situation in which the interim distribution of Child 3’s interest was made without an assurance that the funds would be used in a manner consistent with the overall value of his interest in the estate (which is currently uncertain) or his projected needs.
Professionally drafted wills usually contain an “infant’s clause,” which provides that the executor or hold funds in trust for any minor beneficiaries. Alternatively, a will-make may appoint other trustees for minor beneficiaries in the will. Section 153(1) does not apply if a trustee is appointed in the will.

The court may also appoint a trustee for a minor beneficiary. Section 153 (3) provides:

(3) Subsection (1) does not apply if, before distribution of the assets of the estate, the court, on application and with notice to the Public Guardian and Trustee, appoints a trustee to hold and administer the minor's interest in the estate until the minor reaches 19 years of age.
The Family Law Act also has provisions for the appointment of a trustee for minors, which are not limited to inheritance, but may apply anytime a minor is entitled to property. This is set out in section 179:

179 (1) Subject to subsection (2), the Supreme Court on application may appoint one or more persons as trustees over
(a)particular property to which the child is entitled, including any property derived from the property or from the disposition of the property, or
(b)all property to which the child is entitled at the time the order is made and to which the child becomes entitled while the order is in effect, except property
(i)identified in the order, or
(ii)over which a trustee already has authority.
(2)The Supreme Court may appoint a trustee only if satisfied that it is in the best interests of the child to do so, on consideration of all of the following:
(a)the apparent ability of the proposed trustee to administer the property;
(b)the merits of the proposed trustee's plan for administering the property;
(c)the views of the child, unless it would be inappropriate to consider them;
(d)the personal relationship between the proposed trustee and the child;
(e)the wishes of the child's guardians;
(f)the written comments of the Public Guardian and Trustee;
(g)the potential benefits and risks of appointing the proposed trustee to administer the property compared to other available options for administering the property;
(h)if the Supreme Court is considering making an order under subsection (1) (b), that the interests of the child are likely better served by an order made under that subsection than by an order made under subsection (1) (a).
(3) An order made under this section to appoint a trustee may do one or more of the following:
(a)require the trustee to deliver the trustee's accounts at specified intervals for the examination and approval of the court;
(b)limit the duration of the trusteeship;
(c)specify or limit the types of investment in which the trustee may invest the property;
(d)provide for compensation of the trustee including, without limitation, setting rates and specifying when the compensation may be taken;
(e)require the trustee to give security in any form the court directs;
(f)make any other order the court considers appropriate.
(4)Except as provided for in an order made under this section, the Trustee Act applies to the trustee and the trust.
I should note also that a small amount, currently up to $10,000, may be paid to a child’s guardian with parental responsibilities without a court order. This is set out in section 178 of the Family Law Act.

Sunday, April 21, 2019

Quinn Estate Appeal

In Quinn Estate v. Rydland, the British Columbia Court of Appeal had held that a pour-over clause in former NHL coach Pat Quinn’s will is invalid. As I wrote in my post about the British Columbia Supreme Court decision in this case,

Mr. Quinn and his wife Sandra Quinn settled a trust in the United States which dealt with assets in the United States. Mr. Quinn was an American citizen, and Mrs. Quinn had U.S. Green Card, but they lived in British Columbia. Their U.S. lawyer also draft a will for Mr. Quinn dealing with his assets in Canada. The will provided that the residue of his Canadian Estate would “pour over” into a U.S. trust, referred to as the Quinn Family Trust. 
The issue in this case was whether the distributive provision of the Canadian will is valid under British Columbia law. The will was signed by Mr. Quinn in the presence of two witness in accordance with the requirements of section 37 of the Wills, Estates and Succession Act. The will itself was formally valid. The difficulty was the “pour over” clause, which I understand is valid in at least some states. The terms of the Quinn Family Trust allowed Mr. and Mrs. Quinn to amend it. Because they could amend the trust, the beneficiaries could be changed without compliance with the requirements of section 37.

The Trust was amended, but the amendment was a relatively small administrative change that did not change the beneficiaries. But the fact that it could be amended was sufficient for Mr. Justice Funt in the Supreme Court to find that the clause is invalid.

On appeal, Chief Justice Bauman considered whether the clause could be saved on any of three grounds: the doctrine of incorporation by reference, the doctrine of facts of independent significance or section 58 of the Wills, Estates and Succession Act (the “WESA”).

In a will, the will-maker may incorporate another document. The Chief Justice set out the criteria as follows:

[19]         Incorporation by reference simply contemplates that the terms of the trust are deemed to be incorporated into the will. There are five prerequisites to applying the test, per Leal, A. “Testamentary Additions to Trusts” in Proceedings of the Forty-Ninth Annual Meeting of the Conference of Commissioners on Uniformity of Legislation in Canada (St. John’s: 1967) 207 at 208:

(1) that the reference in the will must show that the testator intended to incorporate the extrinsic document into the will; (2) the language of the will must be such that it refers to the extrinsic document as one already in existence at the time of the execution of the will; (3) the reference in the will must be sufficiently specific that it identifies the extrinsic document with reasonable certainty; (4) the document offered must be proven satisfactorily to be the one referred to in the will; and (5) there must be satisfactory proof that the document was actually in existence at the time of the execution of the will: see Allen v. Maddock (1858), 11 Moore P.C. 427.

The Chief Justice found that the will did not refer to a document, and Mr. Quinn did not intend to incorporate the trust by reference. Rather Mr. Quinn intended to make a gift “to the trust.” The trust c could not be incorporated by reference “because as of the date of that will, the trust, being amendable and revocable, was not a ‘presently existing document’ and the testator cannot, by his will, create for himself a power to dispose of his property by an instrument not duly executed as a will or codicil.”

The doctrine of facts of independent significance refers to facts that are independent of the will that may affect the disposition of the will-maker’s property. For example, if the will-maker leaves his property to those of his children who survive him, the birth of a child after the will affect how is property is divided upon death. 

Chief Justice Bauman described the doctrine as follows:

That doctrine purports to resolve the issue of potential uncertainty in a will. In the Anglo-Canadian cases it would typically respond to resolve the uncertainty inherent in a bequest: “my car to my partner at the time of my death”. Certainty is achieved by reference to a fact of independent significance (i.e., independent of simply testamentary significance), such as the fact of who the testator’s partner was at the time of his death. So too could the fact of the make and model of the testator’s car have independent significance.

In some jurisdictions in the United States, the doctrine of facts of independent significance has been applied to similar pour-over clauses, but the Court of Appeal rejected the application of the doctrine to pour-over clauses in British Columbia. Chief Justice Bauman wrote:

[31]         In my view, this doctrine should not be seen as a device to validate a pour-over clause like that at bar both as a matter of statutory interpretation and as a matter of principle. When WESA came into force in 2014, it heralded a significant overhaul of the wills, estates and trusts law of the province. Nothing in WESA addresses pour-over clauses. Were the doctrine of facts of independent significance applied to pour-over clauses, it would allow a will-maker to avoid the formalities and the necessity of testamentary intent embodied in WESA so long as the will-maker had sufficient assets in the trust at the time of amending the trust (at least on the American authorities). Had the Legislature intended to allow amendments to a will so long as the amendment presently affected significant assets, the legislature could have provided for it. Extending this doctrine to apply to an amendable, revocable trust would permit a testator to avoid the strictures of WESA and thus defeat the legislature’s intent.
[32]         Applying the doctrine to validate a pour-over clause would also differ in character to the existing applications recognized in the Anglo-Canadian jurisprudence. The traditional applications of the doctrine validate de facto amendments to the will only with regard to limited “facts”. The terms “partner” and “car” are inherently limited. A trust document recognizes no such limit. Extending the doctrine to pour-over clauses would grant testators unlimited power to amend the disposition of their estate without following the strictures of WESA. In my view, this is not an extension the common law should permit

Finally, the Court of Appeal considered whether the curative provision in section 58 of the WESA could save the pour-over clause. Section 58 allows the court to give effect to a document or record that does not comply with the formal signing and witnessing requirements for a valid will if the court finds the document or record reflects the deceased person’s testamentary intentions. (I have co- written a paper on section 58, which you can find here.)

The Court held that section 58 has no application. The will met all of the formal requirements, and Mr. Quinn did not intend for the trust to be a will. Chief Justice Bauman wrote at paragraph 37,

That s. 58 is inapplicable here is made stark when we ask what “record or document or writing or marking on a will…” is to be ordered “fully effective” under WESA per s. 58(3). Ms. Rydland does not seek probate of the QFT; rather, she seeks to validate the sixth clause. That clause is part of a will that complies with the formalities. It seeks to create a vehicle — the QFT — that would allow the will-maker to circumvent the formalities altogether. Section 58 simply has no application to that circumstance. The chambers judge did not err in declining to apply s. 58 here.

What is my own view? From a practical perspective, I think it unfortunate that a pour-over clause to an amendable trust is invalid. In some circumstances, it might be a useful tool. Family trusts appear to be quite popular in some U.S. states, such as California. I don’t see any harm from a policy perspective in, for example, allowing someone with a trust in California with California resident beneficiaries to create a will for his British Columbia assets that pours over to his California trust.

I also think this case illustrates an incoherence in our succession law. Supposing that Mr. Quinn’s will made no reference to the trust, but he simply named his wife as the beneficiary of his estate. Suppose he also told her that she was to distribute his estate in accordance with the trust, and she agreed. Supposing further that he decided to amend the trust after he made the will, and he communicated the changes to her and she agreed to deal with the estate in accordance with those changes. Provided that the will did not itself refer to the fact that she would receive his estate as a trustee, this arrangement would be a valid secret trust under British Columbia law, and he would be able to change the terms right up to his death, without complying with the formal requirements for a valid will. I am not advocating the use of secret trusts in this manner as a good estate-planning tool, but merely highlighting the inconsistency.