Rose v. Bloomfield

In Rose v. Bloomfield, 2010 BCSC 315, Mr. Justice Cohen varied the will of Marika Crayne pursuant to British Columbia’s Wills Variation Act to provide her common-law spouse of 21 years with 70 per cent of her estate. The reasons for judgment do not state the value of the estate, but from the description of the assets it appears to be in the range of $250,000 to $300,000.

In her will, Marika Crayne left her common-law spouse Stanley Rose with $6000. The reside was left one percent to St. Peter’s Lutheran Church, and one-third of the other 99 percent to a nephew, one-third to a niece, and one-sixth to each of her grandnephews.

She signed a new will leaving her estate to Mr. Rose before she died, but it was not witnessed in compliance with the Wills Act.

The residual beneficiaries of the will argued that the will should not be varied. Each of Marika Crayne and Stanley Rose had wills leaving most of their estate to others. Mr. Rose assets were worth about five times as much as Ms. Crayne. They argued that Mr. Rose had not contributed to her assets, most of which were inherited. They further argued that Mr. Rose was provided for by the Canada Pension Plan survivor's benefits.

Mr. Justice Cohen rejected the residual beneficiaries’ arguments. He considered Mr. Rose’s care of Ms. Crayne, his financial sacrifices and needs, and the fact that Ms. Crayne had no legal or moral duty to the beneficiaries. He wrote:

[72] The length of the parties’ common law relationship was 21 years. During their relationship, they shared their joint resources for their mutual benefit and lifestyle; they shared common expenses, contributed money and monies worth, and shared domestic tasks. The fact that they did not keep a strict accounting between them and that they had separate bank accounts is, as the plaintiff submits, hardly unusual.

[73] The plaintiff used his savings during the years that the deceased was unemployed and unable to contribute very much towards the parties’ expenses and, as the plaintiff submits, using his inheritance, earnings and savings for the deceased’s benefit deprived him of an opportunity to create more assets for himself.

[74] The evidence is that the plaintiff devoted himself to the care of the deceased for the period from the year 2005 until her passing and supported her emotionally during her cancer treatments and other medical care.

[75] The deceased had neither a legal or moral obligation to the defendants, nor did she have a close relationship with them. On the other hand, the plaintiff’s son considered the deceased his step-mother, and both he and the plaintiff testified about the close and loving relationship they all had with the deceased’s mother. The plaintiff’s son described the four of them as “a family”.

…

[80] While the plaintiff obtained survivor’s benefits when the deceased passed away, it is not accurate to state that his gross monthly pension was thereby increased because he lost the GAIN supplement for which he, as a senior, had been eligible after he obtained the survivor’s benefits. I agree with the plaintiff’s position that the deceased’s legal and moral obligation was to provide for the plaintiff in the Will, not to rely upon the state to do so.

[81] I also agree with the plaintiff’s position that because the correct approach in the application of the Act is not one of a benefit/detriment analysis, neither the defendants’ submissions regarding the various benefits and detriments received by each party, nor the argument that the plaintiff made no contribution to the plaintiff’s inherited assets is relevant. Moreover, the plaintiff’s net worth in relation to that of the deceased is not a factor.

[82] The plaintiff testified about his expenses including property tax, home insurance, current and future expenses for medical supplies, repairs, improvements and alterations to his house, etc. The plaintiff’s uncontradicted evidence was that he could not afford to meet these expenses on his income alone. I am satisfied that the plaintiff has established, on the balance of probabilities, that his financial resources are inadequate to meet or sustain the quality of life he enjoyed during his relationship with the deceased. Furthermore, the onus is not on the plaintiff to prove that he cannot meet his current and future needs by using up all of his investments and assets prior to his death. He is not obligated to reduce his already modest lifestyle.

British Columbia Court of Appeal 100th Anniversary

The British Columbia Court of Appeal is one hundred years old. There are a number of events scheduled through the year to celebrate the centenary, including special sittings as described in the British Columbia Court of Appeal’s 100th Anniversary Event Website as follows:

Victoria, Friday 8 January 2010
In Victoria, on Friday, 8 January 2010, the Court of Appeal held the first event in celebration of the Court’s centenary. During the day, judges of the Court visited several Victoria area schools to meet with students. The Court then held a special sitting in the Heritage courtroom at the Maritime Museum, followed by a black tie Bench & Bar dinner at Government House, hosted by the Lieutenant Governor. A photograph and news story appeared in the Victoria Times-Colonist on Saturday 9 January. The Court thanks the organizers, including lawyers of the Victoria Bar Association, Law Society of British Columbia, and Canadian Bar Association, and also staff of the Justice Education Society.

Vancouver, Friday 26 March 2010
Friday 26 March 2010 at 4:00 p.m., in the Great Hall of the Law Courts, 800 Smithe St., Vancouver.

Prince George, 13 or 14 September 2010, time and place TBA
Monday or Tuesday, 13 or 14 September 2010. Precise time and location TBA by local organizers closer to the date.

Kamloops, 18 or 19 October 2010, time TBA
Monday or Tuesday 18 or 19 October 2010. Precise time TBA by organizers closer to the date. At the Courthouse, 223 – 455 Columbia St., Kamloops (room TBA).

Kelowna, 1 or 2 November 2010
Monday or Tuesday 1 or 2 November 2010. Precise time TBA by organizers closer to the date. At the Courthouse, 1355 Water St., Kelowna (room TBA).

You can read more about the 100th anniversary and view some photographs at the website here.

United States Court House, San Francisco

I took this photograph of the Phillip Burton Federal Building and U.S. Court House, last summer.

Missing Original Will: Whitehead Estate

After Mary Josephine Whitehead died in 2008, a “trued up” copy of her will, dated December 21, 1979, was found among her papers. This document was a copy of a will, with Ms. Whitehead’s name and those of the witnesses were printed in quotation marks. This was clearly not an originally signed will, and no one has ever found an original.

The lawyer who drew the will has died. He had kept some original wills for his clients, and he had transferred these to another lawyer for safe keeping, but Ms. Whitehead’s will could not be found among them.

No one knew the identity of the witnesses to the will.

Ms. Whitehead had not had a wills notice filed with Vital Statistics indicating that she had made the will.

In Whitehead Estate, 2010 BCSC 348, the Supreme Court of British Columbia was asked to decide whether to the “trued up” copy of the will could be used to prove that Ms. Whitehead had a valid last will. If so, her estate could be distributed according to the terms of the 1979 will. If not it would be distributed to her next of kin, under the Estate Administration Act in B.C.

Mr. Justice Bracken set succinctly summarized British Columbia law on proving a lost will at paragraph 20 as follows:

The test for proving a lost will requires proof of the due execution of the will; particulars tracing possession of the will to the date of death, and afterwards if the will was lost after death; rebuttal of the presumption that the will was destroyed by the testator with the intention of revoking it; and proof of the contents of the lost will: Sorkos v. Cowderoy, [2006] O.J. No. 3652 (C.A.).

The difficulty with proving the copy of the will in this case is that there was no evidence that the will was properly signed. The lawyer involved was deceased, and the witnesses were unknown.

Accordingly, Mr. Justice Bracken held that the will was not proven. He wrote:

[26] In this case, there is no evidence to identify the witnesses to the execution of the will nor is there any evidence to show that the will is a true copy of the original will. While the copy presented has all of the characteristics of a legitimate copy of an original will, on the authorities it cannot be presumed that the original was properly executed or that the copy presented is a true copy. The authorities require proof of both.

[27] It may be that the necessary proof can be presented through means other than a witness to the execution of the will. For example, proof of the usual practice followed by a solicitor or legal assistant that a will was only “trued up” once it had been properly executed and compared to the original may be sufficient to show that it is in fact a true copy. But some evidence is necessary to establish the necessary facts and here there is none. There is no witness available or even identified to say that the will was properly executed nor is there anyone to attest to any other evidence to establish that the copy of the will is a true copy as that term is understood in law. Even if the standard of proof is lower than a balance of probabilities there is an absolute absence of any evidence whatsoever in this case.

Ms. Whitehead’s estate will be distributed to her next of kin in accordance with the Estate Administration Act, on the basis that she died without a will.

New Legislation Will Allow B.C. Courts to Cure Deficiencies in Wills

The new Wills, Estates and Succession Act, will allow the Supreme Court of British Columbia to give effect to a will that does not meet the formal requirements of a valid will in British Columbia. This is a substantial reform.

The Wills, Estates and Succession Act retains the formal requirements of the current Wills Act. Section 37 (1) of the Wills, Estates and Succession Act says:

(1) To be valid, a will must be
(a) in writing,
(b) signed at its end by the will-maker, or the signature at the end must be acknowledged by the will-maker as his or hers, in the presence of 2 or more witnesses present at the same time, and
(c) signed by 2 or more of the witnesses in the presence of the will-maker.

But section 58 will allow applications to court to cure deficiencies. It says:

58 (1) In this section, "record" includes data that
(a) is recorded or stored electronically,
(b) can be read by a person, and
(c) is capable of reproduction in a visible form.
(2) On application, the court may make an order under subsection (3) if the court determines that a record, document or writing or marking on a will or document represents
(a) the testamentary intentions of a deceased person,
(b) the intention of a deceased person to revoke, alter or revive a will or testamentary disposition of the deceased person, or
(c) the intention of a deceased person to revoke, alter or revive a testamentary disposition contained in a document other than a will.
(3) Even though the making, revocation, alteration or revival of a will does not comply with this Act, the court may, as the circumstances require, order that a record or document or writing or marking on a will or document be fully effective as though it had been made
(a) as the will or part of the will of the deceased person,
(b) as a revocation, alteration or revival of a will of the deceased person, or
(c) as the testamentary intention of the deceased person.
(4) If an alteration to a will makes a word or provision illegible and the court is satisfied that the alteration was not made in accordance with this Act, the court may reinstate the original word or provision if there is evidence to establish what the original word or provision was.

How broadly will the courts in British Columbia apply this section when the Wills, Estates and Succession Act is brought into force?

Surely this provision would have saved the codicil in Toomey v. Davis, 2003 BCSC 1211, a case in which the testator signed a codicil amending his will in the presence of two witnesses, but one of the witnesses did not sign the codicil in the presence of the testator. The second witness signed it later. Because the courts have strictly applied the formal requirements of the Wills Act, Mr. Justice Trustcott was unable to give effect to the codicil, despite his being “completely satisfied that the codicil does express the true intentions of the testator as proven by the evidence and that the non-compliance with s. 4(c) was completely inadvertent and does not raise any doubt about the reliability of the codicil being a true record of the testator’s wishes.”

But the wording of section 58 is quite broad. Could the court give effect to notes made by someone to instruct a lawyer to draft a will, if the person who made the notes died before a will is signed? How about an email in which the sender says she intends to leave her estate to the recipient of the email?

There is arguably a distinction between a person making a document or record that he or she intends to be a will, and expressing an intention in writing that he or she intends to make a will.

We will have to wait some time to see how the courts apply section 58, which is not in force as of the date of this post.

Consultations for Reform of the British Columbia Society Act

The Deputy Minister of Finance is seeking comments on reform of the Society Act. In a message issued in December 2009, a couple of structural issues are identified as follows:

Two fundamental structural issues regarding the Act have already been raised. The first concerns the nature of the corporate model most appropriate for societies and whether a more sophisticated business law framework should be adopted.

The lack of up-to-date corporate governance rules has been identified as a barrier to the efficient functioning of societies. For example, societies are currently required to have three directors (one of whom must be resident in the province), and directors can only be indemnified with the approval of the court. While these extra controls may be appropriate for certain types of societies (e.g. charities), societies that are not recipients of public money perhaps need not be so constrained. Other corporate statutes have moved toward greater streamlining and flexibility in these areas. For example, the BCA requires only one director (with no residency requirement) and indemnification of BCA directors no longer requires a court order. As well, the BCA’s modern framework for corporate reorganizations and other fundamental changes is not available to societies.

***


The second fundamental issue concerns the extent to which the Act should contain regulatory provisions or other rules that constrain the operation of societies. Most corporate statutes are non-regulatory in nature -- that is, they merely provide a framework for incorporation, governance and dissolution, and contain few, if any, provisions that purport to regulate or control the composition or activities of the corporations created. The Society Act, however, contains a number of regulatory provisions, including the following:

tighter accountability controls -- for example, a society must have three directors (as opposed to one director for private companies under the BCA) and must make its financial statements available to the public. There is no ability to waive financial statements (as there is for private companies under the BCA);

provisions allowing the registrar to order a particular society (or class of society) to become a "reporting society", which then triggers greater accountability requirements -- for example, a reporting society must provide audited financial statements to its members;

special rules regulating societies that exist for educational, religious, poverty-relief, community or other "charitable purposes" -- a society with such purposes cannot abandon those purposes or convert to a company, and may not, on dissolution, distribute its assets to its members; and

ministerial investigations of societies that do not act in the public interest.

You may provide any comments by April 1, 2010, by email to fcsp@gov.bc.ca or to the following address:

Financial and Corporate Sector Policy Branch
Ministry of Finance
PO Box 9418 Stn Prov Govt
Victoria BC V8W 9V1
(Phone 250-387-1269)

Supreme Court of Canada Denies Leave to Appeal in Picketts v. Hall

The Supreme Court of Canada has denied leave to appeal the British Columbia Court of Appeal decision in Picketts v. Hall, 2009 BCCA 329 (see the SCC News Release here).

Picketts v. Hall is a significant Wills Variation Act case because of the Court of Appeal's analysis of the moral obligations owed to a common-law spouse. The Court of Appeal said that there is no distinction between a testator's moral obligations to a common-law spouse and to a married spouse. The court also considered the distribution in an intestacy as an indicia of a spouse's moral obligations.

I wrote about the Court of Appeal decision here.

Federal Budget Allows Rollovers from RRSPs to RDSPs

Today's Canadian Federal Budget has a proposal to allow for income tax to be deferred on the death of a Registered Retirement Savings Plan annuitant if the funds are paid to Registered Disability Savings Plan for the annuitant's financially dependant child or grandchild. The measure is explained in the Budget here as follows:

When the annuitant under a Registered Retirement Savings Plan (RRSP) dies, the existing income tax rules generally provide that the value of the RRSP is included in computing the deceased's income for the year of death. However, preferential tax treatment is provided on RRSP distributions made after death to the deceased's surviving spouse or common-law partner, or to children or grandchildren who were financially dependent on the deceased RRSP annuitant. There are two aspects to this preferential tax treatment.

•Distributions of the RRSP proceeds to the deceased's surviving spouse or common-law partner, or to a financially dependent child or grandchild, reduce the amount of the deceased's income and are included in the income of the recipient (these distributions are referred to as "refunds of premiums").
•If a spouse or common-law partner, or a child or grandchild who was dependent on the deceased annuitant because of physical or mental infirmity, receives a refund of premiums, an offsetting deduction allows the refund of premiums to be transferred on a tax-deferred (or "rollover") basis to the RRSP of the recipient, or used to purchase an immediate life annuity.
Similar rules also apply in respect of Registered Retirement Income Fund (RRIF) proceeds and certain lump-sum amounts paid from Registered Pension Plans (RPPs). For the purposes of this supplementary information, "RRSP proceeds" also refers to RRIF and lump-sum RPP proceeds and "RRSP annuitant" also refers to a RRIF annuitant and an RPP member.

Registered Disability Savings Plans (RDSPs) were introduced in Budget 2007 to help parents and others save for the long-term financial security of a child with a severe disability. An RDSP is a tax-assisted savings vehicle in which investment income accumulates tax-free. Canada Disability Savings Grants and Canada Disability Savings Bonds may also be paid by the government into the RDSP. Canada Disability Savings Grants, Canada Disability Savings Bonds and investment income are included in the beneficiary's income for tax purposes when paid out of the RDSP.

Budget 2010 proposes to extend the existing RRSP rollover rules to allow a rollover of a deceased individual's RRSP proceeds to the RDSP of a financially dependent infirm child or grandchild.

An individual who qualifies to be an RDSP beneficiary and who meets the age and residency requirements for RDSP contributions will be eligible to roll over RRSP proceeds received as a result of the death of their parent or grandparent to their RDSP if the requirements under the existing RRSP rollover rules are satisfied (that is, if the RDSP beneficiary was financially dependent on the deceased individual by reason of physical or mental infirmity). An infirm child or grandchild is generally considered to be financially dependent if the child's income for the year preceding the year of death did not exceed a specified threshold ($17,621 for 2010). An infirm child with income above this amount may also be considered to be financially dependent, but only if the dependency can be demonstrated based on the particular facts.

The amount of RRSP proceeds rolled over into an RDSP will not be permitted to exceed the beneficiary's available RDSP contribution room. The lifetime contribution limit for RDSPs is $200,000. The rolled-over proceeds will reduce the beneficiary's RDSP contribution room, but will not attract Canada Disability Savings Grants. These proceeds will be considered private contributions for the purpose of determining whether an RDSP is a primarily government-assisted plan (a plan where Canada Disability Savings Grants and Canada Disability Savings Bonds paid to the plan exceed private contributions made to the plan, and which is consequentially subject to a number of additional requirements). Since the amount of RRSP proceeds rolled over to an RDSP will not have been subject to income tax, the amount will form part of the portion of a disability assistance payment that is included in the beneficiary's income when withdrawn from the RDSP.

The RDSP beneficiary or his or her legal representative will be required to make an election in prescribed form to transfer the RRSP proceeds to the RDSP on a rollover basis. The election would be made at the time of the RDSP contribution and filed with both the Canada Revenue Agency and Human Resources and Skills Development Canada by the RDSP issuer.

These measures will be effective for deaths occurring on or after March 4, 2010.