Sunday, March 01, 2015

Restrictions on Who May File a Notice of Dispute



One of the changes made to British Columbia’s rules governing probate procedures that came into effect on March 31, 2014, was the replacement of caveats with notices of dispute. One of the main purposes of both caveats under the former rules and notices of dispute under the new rules is to prevent the court from issuing a grant of probate of a will for a period of time to allow someone who wishes to challenge the validity of the will to do so.

I have already written about the new notice of dispute in Rule 25-10 of the Supreme Court Civil Rules, but I confess I had over looked a significant change. The new rule appears to contemplate that only those who are entitled to notice of an application for an estate grant may file a notice of dispute.
Subrule 25-10 (1) says:

Notice of dispute

(1)To oppose the issuance of an estate grant, an authorization to obtain estate information or an authorization to obtain resealing information or to oppose the resealing of a foreign grant, a person to whom documents have been or are to be delivered under Rule 25-2 (2) must file a notice of dispute that accords with subrule (3) of this rule before the earlier of

(a) the issuance of an authorization to obtain estate information or an authorization to obtain resealing information, and

(b) the issuance of an estate grant or the resealing of a foreign grant.

Although subrule (1) does not expressly say that only those who are entitled to notice under Rule 25-2(2) may file a notice of dispute, subrule (3) states that the notice of dispute must state that he or she is entitled to notice:

Contents of notice of dispute

(3)A notice of dispute referred to in subrule (1) must be in Form P29, must provide an address for service of the disputant, which address for service must be an accessible address that complies with Rule 4-1 (1), and must disclose

(a) that the disputant is a person to whom documents have been or are to be delivered under Rule 25-2 (2), and

(b) the grounds on which the notice of dispute is filed.

Who is entitled to notice under Rule 25-2 (2)? To apply for an estate for a will, the applicant must provide the notice to any other executor with an equal or prior right to apply, all of the beneficiaries of the will, and anyone who would receive a share of the estate of the will-maker had died without a valid will. Anyone who falls into one of those categories may file a notice of dispute if he or she does not think the will is valid.

But what if you are a beneficiary of a prior will, you believe that the will-maker did not have capacity to make a later will (or perhaps I should say alleged will), but you do not fall within one of the categories of people entitled to notice? It would appear that because of this restriction, you cannot simply file a notice of dispute, despite the fact that you have an interest in challenging the later will. This restriction was pointed out to me by my friend and colleague Michelle Rosser, who is also one of the lawyers in the case I will refer to shortly.

If you are not within a category of people entitled to notice, you may apply to court add you as a person entitled to notice under Rule 25-2 (14)(a), which says:

Court may alter or dispense with notice

On application, the court may do one or both of the following to avoid any prejudice that would otherwise result to the intended applicant, to another person or to the estate:
(a) vary the classes of persons to whom documents referred to in subrule (1) are to be delivered;
….


If the court makes the order, then as a person entitled to notice, you may then file a notice of dispute.

This is what Ms. Rosser and her client did in the first reported case dealing with this issue: Re Dow Estate, 2015 BCSC 292.

Dalton George Dow named Joanne Golos as a beneficiary in a will he made in February 2013, but not in a later will made in April 2014, which I will refer to as the 2014 Will. Ms. Golos questioned whether Mr. Dow had the necessary capacity to make the 2014 Will and whether he was unduly influenced by others to cut her out. She wished to file a notice of dispute so that she would have an opportunity to investigate the merits of her claim before the named executor of the 2014 Will received probate, and potentially distributed the estate, thereby defeating her claim.

But Ms. Golos was not an executor or beneficiary of the 2014 Will, nor would she receive a share of Mr. Dow’s estate if he had left no will.

Ms. Golos applied under Rule 25-2 (14)(a)to be added as a person to whom Mr. Cosar had to give notice so that she would have the right to file a notice of dispute. Mr. Cosar argued that there was no merit to her claim, and that the effect of allowing her to file a notice of dispute was to tie up the estate for up to a year or longer.

Master Harper heard the application, and granted the order adding Ms. Golos as a person to whom Mr. Cosar had to give notice of his application to probate the 2014 Will, thereby allowing her to file a notice of dispute. Master Harper held that it was not appropriate to consider the merits of Ms. Golos’ claim. The issue was whether there was prejudice to Ms. Galos if she were not added as a person to whom notice had to be given. The Master found that there would be prejudice to Ms. Golos if she did not make the order. Master Harper wrote at paragraph 15:


[15]         The applicant has met the threshold required by Rule 25-2(14). There is a risk that if she is not included in the class of persons entitled to receive information about the estate and to file a notice of dispute, she will be prejudiced. The prejudice is the risk that Mr. Cosar will be granted probate and the estate will be distributed before the applicant’s claim can be assessed. That prejudice outweighs the possible delay in the distribution of the estate.


This decision is surely correct, but begs the question, why was this restriction on notice of disputes made in the first place? Before the rule changed, any person with an interest in the question of whether a will was valid could file a caveat. Now someone in Ms. Golos position must first make an application to court, significantly adding to the expense of disputing the will.

What if Ms. Golos had not been successful, and probate issued? She could still have applied to court to revoke the grant of probate on the grounds that Mr. Dow did not have capacity or that he was unduly influenced. Once the application is filed, the executor would be required to return the original grant to the court registry pursuant to Rule 25-5 (5)(b). The executor would have been put through the cost of applying for the grant, only to have to return it, pending resolution of the litigation. The result would be further costs, and delay.

I note that restricting the right to file a notice of dispute to those entitled to notice of the probate application was not one of the recommendations made in the British Columbia Law Institute Report on New Probate Rules, on which many of the new rules were modeled. I assume someone in government thought this restriction a good idea, but I cannot see any benefit to this restriction, and the Rule should be amended to allow anyone with an interest under a previous will to file a notice of dispute, whether or not he or she would be entitled to notice of the application for an estate grant.

1 comment:

Dwayne Pommer said...

If Joanne Golos truly believes that Dalton Dow’s 2013 Will was his last valid Will, she should be able to file a Notice of Dispute on the basis she is entitled to notice as a beneficiary of the 2013 Will pursuant to Rule 25-2(a)(ii). I think it would be wrong for the court registry refuse to accept her Notice of Dispute.