Saturday, May 07, 2011

Distinctions Between a Court of Probate and Court of Construction

In British Columbia, if you think the wording of a will does not intend reflect what the will-maker intended or if it is not clear what he or she intended, you may apply to the Supreme Court of British Columbia. But at what stage you apply, and what the court may do is not always straightforward. Distinctions are made between the Court sitting as a probate court and a court of construction, and the evidence it may consider and the remedies the court may grant depend on whether it is sitting as a probate court or court of construction.

To someone who is not a lawyer—and perhaps to many lawyers—the rules must seem archaic and common-sense defying. Some of the court cases seem to muddy the distinctions. Yet conceptually, the distinctions do make sense. In a recent decision, Re Ali Estate, 2011 BCSC 537, Madam Justice Dardi explains the distinctions quite clearly.

In Re Ali Estate, Muntaz Ali left his “interest” in a company to certain beneficiaries. He owned shares in the company, and the company also owed him money through shareholder loans and a promissory note.

One of the executors brought an application to Court to rectify the will by adding the words “including my shareholder loans and Promissory Notes owing to me,” in the clauses of the will leaving the interest in the Company to the beneficiaries. The effect would be that those beneficiaries will receive the amounts owing to Mr. Ali as well as the shares.

The executors did not yet have the grant of probate (in other words, they had not yet proved the will).

Madam Justice Dardi held that she could not add words to the will as part of the probate. After probate of the will is granted, she can later interpret the will to determine whether Mr. Ali intended to include the shareholder loans and promissory notes as part of the “interest” in the company he was leaving to certain beneficiaries.

She explained the distinction between a probate and court of construction (a court of construction interprets the will):

[21] The Supreme Court has jurisdiction to sit both as a court of probate and as a court of construction. Notwithstanding that the single court is empowered with dual jurisdictions, historically the court has exercised its probate function and its interpretation or construction function in separate proceedings. In broad terms, when ruling upon the validity of a will, the court sits as a court of probate, and when interpreting a will, it sits as a court of construction. The divided jurisdiction is significant because the powers available to the court depend on which jurisdiction it assumes: Law Reform Commission of British Columbia, Report on Interpretation of Wills, LRC 58 (Victoria, 1982) at 1.

[22] The jurisdiction exercised by a court of probate relates to whether the testamentary instrument submitted for probate represents the true last will and testament of a deceased and whether the named personal representative is entitled to administer the estate. In essence, a court of probate focuses on what constitutes the testamentary instrument of the testator and its validity. The inquiry pertaining to the validity of the testamentary document encompasses the issues of the capacity and the volition of the testator and whether the testator duly executed the testamentary document with knowledge and approval of its contents.

[23] On the other hand, in exercising jurisdiction as a court of construction, the court is concerned with ascertaining the meaning of the testamentary documents that have been approved by the court in the exercise of its probate jurisdiction. It is axiomatic that court must interpret or construe a will in the form in which it has been admitted to probate.

The distinction is important because the court of probate may consider evidence that the court of construction may not. Madam Justice Dardi wrote:

[24] In probate hearings, the court, in determining whether or not the document before it is truly the testator's will, is permitted to consider extrinsic evidence, including direct evidence as to the testator's intentions. That evidence may include copies of earlier wills and codicils, prior drafts of the will, and the notes of the solicitor who prepared the will. In contrast, the scope of admissible evidence is generally more constrained in a construction hearing. In that instance, a court may only consider the words of the will and if, applying the subjective approach, the evidence of the surrounding circumstances known to the testator at the time the will was made. Except in very restricted circumstances (such as equivocation), the court is not permitted to review direct evidence of the testator's intentions on a construction application: British Columbia Law Institute, “Wills, Estates and Succession: A Modern Legal Framework,” in B.C.L.I. Report No. 45 (B.C., 2006) at 37.

The probate court may omit words if the court finds that the will maker did not know and approve of those words when he or she made the will Madam Justice Dardi considered whether the probate court could also add words, and concluded based on previous case law, that it could not. The reason a probate court can’t add words to the will is that to do so would run afoul of the signing and witnessing requirements of the Wills Act for making and changing a will.

Madam Justice Dardi then considered whether she should interpret the will at this stage, and held that the better course is to do so after probate had been granted.

[44] Although the two applications being heard together is attractive for reasons of expediency of the litigation, in my view a distinction should be maintained between the court's probate and construction jurisdiction. The practice and procedure on a probate application is different than on a construction application. Ordinarily an application brought as a probate application should be limited to probate matters and, ordinarily a will should be admitted to probate before it is presented to the court for interpretation.

[45] As referred to above, the evidence which is admissible on a rectification application is different than that which is admissible on an interpretation. Before proceeding with the construction application, the court should have before it the affidavits with only that evidence which is properly admissible on a construction application. Otherwise it falls to the court to parse out that evidence which is properly admissible from that which is not. I cannot endorse such an approach. This two-step procedure also provides the parties with an appropriate opportunity to make submissions on the admissibility of any controversial evidence.

When the new Wills, Estates and Succession Act comes into force (it has been passed by the Legislative Assembly, but as of the date of this post, the Government has not said when it will come into effect), the Supreme Court of British Columbia will have an express power to rectify a will, which it may exercise either at the probate stage or after probate. In exercising this new jursidiction the courts should be able to add words as well as delete them. The new provision is as follows:

Rectification of will
59 (1) On application for rectification of a will, the court, sitting as a court of construction or as a court of probate, may order that the will be rectified if the court determines that the will fails to carry out 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.
(2) Extrinsic evidence, including evidence of the will-maker's intent, is admissible to prove the existence of a circumstance described in subsection (1).
(3) An application for rectification of a will must be made no later than 180 days from the date the representation grant is issued unless the court grants leave to make an application after that date.
(4) If the court grants leave to make an application for rectification of a will after 180 days from the date the representation grant is issued, a personal representative who distributes any part of the estate to which entitlement is subsequently affected by rectification is not liable if, in reasonable reliance on the will, the distribution is made
(a) after 180 days from the date the representation grant is issued, and
(b) before the notice of the application for rectification is delivered to the personal representative.
(5) Subsection (4) does not affect the right of any person to recover from a beneficiary any part of the estate distributed in the circumstances described in that subsection.

1 comment:

Mallow Tree said...

Is there an easy place to look up the laws, where regular people can understand them.

What previous comments, if any are there on people holding wills trying to prevent probate from occuring.