Singh Estate v. Shandil

In a previous post, I wrote about a case in which the Supreme Court of British Columbia found that documents purporting to forgive a loan on the creditor's death were invalid. The reason they were in valid was that the documents were testamentary, but did not comply with the formal requirements for making a valid will in the Wills Act, RSBC 1996, c. 489.

Today, I am going to write about a similar attack on a statutory declaration in which a father forgave a $100,000 loan to his daughter. The case is called Singh Estate v. Shandil, 2007 BCCA 303, and the British Columbia Court of Appeal released its reasons for judgment today.

Mr. Ram Singh lent his daughter $100,000 in 2000 to help her and her husband with their mortgage. Mr. Singh later became ill, and moved in with his daughter and son-in-law. In June 5, 2003, he made a new will leaving his daughter $20,000. He also made a statutory declaration.

In his statutory declaration, Mr. Singh declared: “I have executed my last Will today. This declaration is made as an explanation of the provisions of my Will.” Further in the document, he declared: “As a token of my appreciation, I have forgiven Chandra the $100,000 originally loaned to her, to pay her mortgage. This forgiveness of debt is intended as an immediate gift to Chandra for her use personally and is not to be considered part of my estate.” He gave his daughter a copy of the statutory declaration.

Mr. Singh and his daughter later had a falling out. Mr. Singh made a new will on February 26, 2004, which provided: “I hereby revoke my Will of June 5, 2003 and Statutory Declaration to this Will.”

Mr. Singh died on March 22, 2004.

After Mr. Singh's death, his executor sued Mr. Ram Singh's daughter to recover the $100,000 loan. The executor argued that the statutory declaration was testamentary, and Mr. Singh revoked it in his later will dated February 26, 2004.

Both Mr. Justice Romilly in the Supreme Court of British Columbia, rejected the executor's arguments. Mr. Singh made a gift to his daughter by making the statutory declaration and giving her a copy. Mr. Singh was clear in the statutory declaration that he was making an immediate gift during his lifetime. He was not making a gift that was effective on his death. Accordingly, it was not testamentary.

Because Mr. Singh did not retain a right to revoke the gift when he made the statutory declaration, he could not later revoke the gift.

The Court of Appeal agreed with Mr. Justice Romilly. Mr. Singh's daughter did not have to repay the loan.