Saturday, January 17, 2015

It’s Time for the Court of Appeal to Revisit its Formulation of "Rational and Valid Reasons" in Wills Variation Cases

The Wills, Estates and Succession Act allows a will maker’s spouse or child to apply to court to vary a will if adequate provision has not been made for the spouse or child, in which case if the court finds that adequate provision has not been made, the court may make such provision as the court thinks adequate, just and equitable in the circumstances.

The wills variation provisions are in Division 6, Part 4 of the Wills, Estates and Succession Act, but were until recently in the Wills Variation Act, and all of the cases I refer to were decided under the Wills Variation Act. The change in legislation does not affect the analysis.

Applying wills variation legislation is difficult because the courts are required to find a balance between the purposes of the legislation in recognizing that a will maker usually has legal or moral obligations to his or her spouse and children, while respecting the right of a will-maker to make his or her own decisions about who will inherit his or her property.

The legislation allows the court to consider evidence of the will-maker’s reasons for making the provisions he or she did in the will. In striving to find a balance, the British Columbia Court of Appeal has formulated a principle that if the will-maker’s reasons are rational and valid, then unless the spouse or child can show financial need, the will should not be varied.

The Court of Appeal expressed this principle in Bell v. Roy, (1993), 75 B.C.L.R. (2d) 213. Mr. Justice Goldie wrote at paragraph 38:

…that the weight to be given evidence of the testator's reasons is affected by its accuracy and not by morally acceptable or unacceptable content. I do not say the legislature swept away any objectively determined moral duty. I do say, however, that the actual intentions of the testator are to be given an effect which is largely denied by reliance upon the notionally objective reasonable testator.

In a later case, Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (C.A.), the Court expressed the principle as follows:

The law does not require that the reason expressed by the testator in her will, or elsewhere, for disinheriting the appellant be justifiable.  It is sufficient if there were valid and rational reasons at the time of her death - valid in the sense of being based on fact; rational in the sense that there is a logical connection between the reasons and the act of disinheritance.

The idea that the court should take into consideration a will-maker’s reasons, and if rational and valid should give effect to those reasons strikes me as a reasonable way to balance the competing purposes of the wills variation legislation. The difficulty with the way the Court of Appeal has formulated this principle in Bell and Kelly is the notion that that the reasons need not be “justifiable.”

It is difficult to find cases where the courts have found that reasons for disinheriting a spouse or child to be based on fact and logically connected to the disinheritance but not justifiable, but one can imagine such a fact situation. For example, a mother and her only child, a son, have a falling out when the son is in his early twenties. He marries, but does not invite his mother to the wedding. She is heartbroken, changes her will to disinherit him, and expresses her reasons including that he did not invite her to his wedding. They reconcile and for the following 40 years have a close relationship. He takes care of her in her final years, when she is sick and frail. She never changes her will. Her reasons are based on fact and logically connected with disinheriting her son, but the reasons are not justifiable. Would a court really refuse to vary the will in those circumstances?

The formulation of the principle in Bell and in Kelly has been criticized by Supreme Court of British Columbia judges on several occasions.

Mr. Justice Truscott in Rampling v. Nootebos, 2003 BCSC 787 wrote:

[46]        I confess that I have always had difficulty in understanding the distinction that is sought to be made by these comments.  The New Oxford Dictionary of English defines “justifiable” as “able to be shown to be right or reasonable; defensible”.

[47]        On this definition, if the testator does not have to show that his or her reasons for disinheriting are justifiable, then there is to be no consideration of whether they are right or reasonable or defensible.

Madam Justice Ballance in McBride v. Voth, 2010 BCSC 443 (a case I wrote about here), pointed out the inconsistency between giving effect to a will-maker’s reasons when those reasons are not justifiable and the objective approach of determining whether a will-maker has met his or her legal and moral obligations articulated by the Supreme Court of Canada, in Tataryn v.Tataryn, [1994] 2 S.C.R. 807. She concluded her analysis as follows:

[141]     One cannot quarrel with the outcomes in Bell and Kelly in light of their particular facts.  The thorny issue is that the model of inquiry endorsed by Bell and followed in Kelly effectively precludes an assessment of whether the testator’s reasons are objectively justifiable from the standpoint of the contemporary judicious parent of Tataryn.  In Tataryn, McLachlin J. made passing mention of Bell as an example of a case where a testator’s moral duty was seen to be negated.  Notably, she did not say nor delve into whether the proposition espoused by Goldie J.A. to negate that moral duty was sound.  If the decisions of Bell and Kelly mean that the applicable test is whether a testator has valid (i.e. factually true) and rational (i.e. logically connected to the disinheritance) reasons for disinheriting a child, even where the reasons are unworthy of an objectively judicious parent based on contemporary standards, then they are difficult to reconcile with the fundamental precepts of Tataryn and the search for contemporary justice in the circumstances.  

[142]     For the most part, the apparent incompatibility between Bell and Kelly on the one hand, and Tataryn on the other, has not been squarely confronted by this Court (an exception is found in Hammond v. Hammond (1995), 7 B.C.L.R. (3d) 25, 7 E.T.R. (2d) 280 (S.C.)).  I would respectfully observe that there appears to be a growing trend in the authorities decided in the aftermath of Kelly to favour rejection of objectively insufficient reasons on the pretence that they are simply not rational.

Other Supreme Court of British Columbia decisions have adopted Madam Justice Ballance’s analysis. For example, in Schipper v. De Lange, 2010 BCSC 1067, Mr. Justice Verhoeven wrote at paragraph 18 that the “sufficiency of the reasons may be taken as part of the question of whether the reasons of the testator are rational." He formulated this issue at parpargh 20 as follows:

In relation to that issue, are Mrs. Schipper’s reasons for making the disposition set out in her will:
a.       Rational in the sense of being logically connected to the disposition set out in the will;
b.       Rational in the sense that they based upon actual fact; and
c.       Rational in the sense that they are objectively sufficient?

Unfortunately, the Court of Appeal, in a later decision, Hall v. Hall, 2011 BCCA 354, restated the formulation from Bell and Kelly, without any consideration of whether that formulation is consistent with Tataryn. Madam Justice Neilson wrote at paragraph 43:

To succeed in his challenge to her will, Tony must establish these reasons were false or unwarranted: Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213 (C.A.) at para. 36. In considering that proposition, it is not necessary to find the reasons were justifiable. It is enough if they were factually valid, and rational in the sense of having a logical connection to the act of disinheritance: Kelly v. Baker (1996), 82 B.C.A.C.150 at para. 58.

Most recently, in Hancock v. Hancock, 2014 BCSC 2398, Madam Justice Dardi added her voice to concerns about the formulation in Bell and Kelly. She wrote at paragraphs 53 through 56:

[53]         In McBride, Madam Justice Ballance observed that it is difficult to reconcile the analytical framework endorsed in Bell and Kelly with the fundamental principles of Tataryn, that a testator’s moral duty must be assessed objectively from a standpoint of what a judicious parent would do in the circumstances, by reference to contemporary community standards. Notably, McLachlin J., as she then was, cited Bell as an example of a case where a testator’s moral duty was seen to be negated, but she did not clarify whether the propositions formulated by Goldie J.A. were sound.

[54]         The analytical approach and commentary in various authorities from this Court, decided subsequent to McBride, underscore the uncertainty regarding the apparent incompatibility between the analytical framework articulated in Bell and Kelly, on the one hand, and Tataryn on the other. This question has engendered significant judicial commentary: Brown v. Ferguson, 2010 BCSC 1890 at para. 115; LeVierge v. Whieldon, 2010 BCSC 1462; Schipper v. De Lange, 2010 BCSC 1067; Holvenstot v. Holvenstot, 2012 BCSC 923; McEwan v. McEwan, 2014 BCSC 916.

[55]         Notably, however, in Hall v. Hall, 2011 BCCA 354, the Court of Appeal applied the analytical approach endorsed in Kelly, without any critical commentary. As is the case with Kelly and Bell, it is difficult, in light of the particular facts, to challenge the result in Hall. However, based on comments in the more recent jurisprudence from the Court of Appeal in Scott-Polson v. Lupkoski, 2013 BCCA 428, I respectfully observe that it may be an unsettled question in this province as to whether the formulation of the analytical approach applied in Kelly can be reconciled with the core principles of Tataryn. In Scott-Polson, Madam Justice Newbury, in obiter dicta, remarked at para. 43:
[43]      … The legally significant finding in terms of the trial judge’s reasoning, however, was that the explanation given in her will was “valid and rational” (see para. 76), or “genuine and valid” (see para. 83). I agree with the trial judge’s comment at para. 84 that this was a “relevant circumstance”. Given this, and given the fact that the plaintiffs did not pursue their cross appeal, it is not necessary for us to consider whether it is in law determinative of what a fair and judicious parent would have thought appropriate. (See McBride v. Voth, supra, at paras. 135-42.) That issue, if it is seen as one, must await another day.
[56]         In my respectful view, there are sound reasons for raising the question of whether the analytical approach endorsed in Kelly is reconcilable with Tataryn. This is particularly apparent in the absence of circumstances where a claimant was clearly estranged from the will-maker. However, in the final analysis, this Court, in compliance with the principle of stare decisis, must continue to apply the analytical framework articulated in Kelly and Bell.

I hope that, at the next opportunity, the B.C. Court of Appeal consider Madam Justice Ballance’s analysis in McBride, and include reasons squarely confronting the question of whether the court should give effect to a will maker’s reasons if they are not objectively sufficient.

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