Graham v. Chalmers Appeal

Last week the British Columbia Court of Appeal ever-so-slightly varied the Supreme Court of British Columbia decision in Graham v. Chalmers.

As I previously wrote, the trial judge in Graham v. Chalmers, varied the will of the late Dolores Jean Graham, who had left a quarter of the residue of her estate to each of her two children and her two grandchildren. Madam Justice Fenlon varied the will to provide gifts of $100,000 to each of the grandchildren, with the residue of the estate (worth about $1 million at the time of trial) divided between the two children.

The Court of Appeal in its decision reported at 2010 BCCA 13 substantially upheld the result, but said it was preferable to divide up the estate by percentages. Madam Justice Kirkpatrick wrote at paragraph 42:

The trial judge varied the Will by providing a lump sum of $100,000 to each of the grandchildren and directing that the remainder of the estate of approximately $800,000 be divided equally between Janet Graham and Sandi Chalmers. The order was obviously premised on the increase in value of the estate between the date of Mrs. Graham’s death to the trial date. The variation of $100,000 to each of the grandchildren would otherwise not be logical in the context of the value of the estate at the testatrix’s death and the court’s finding that adequate provision had not been made for Janet Graham. Although there are practical reasons for expressing the division in this manner in this case (where the estate has been liquidated and is held in trust), there are pitfalls in doing so. There may be cases in which the estate is made up of unliquid assets the value of which may fluctuate between the date of death, the trial date, and distribution of the estate. In those cases, it is preferable to express the order in terms of percentages, except of course, in respect of specific bequests that are not disturbed by the variation. The potential difficulty that might arise is that the specific bequest directed by the variation order could, in extreme circumstances of a precipitous decline in the value of the residue, eliminate the intended gift to residual beneficiaries.

The Court of Appeal then varied the will to provide that each of the grandchildren is entitled to ten percent of the estate, with each of the two children entitled to forty percent of the estate.