Friday, March 24, 2017

Court Orders Interim Distribution Under Section 155 of the Wills, Estates and Succession Act

In a recent decision, Davis v. Burns Estate, 2016 BCSC 1982, the Supreme Court of British Columbia allowed an interim distribution to be made to a beneficiary of a will under section 155 of the Wills, Estates and Succession Act pending the resolution of a wills variation claim. Section 155 prohibits the personal representative from making a distribution after someone has started a wills variation claim without the consent of the Court. As far as I know,  this is the first reported decision dealing with an interim distribution pursuant to section 155, although there were cases under the now repealed Wills Variation Act considering whether to allow an interim distribution under that Act (which contained a prohibition on distribution during the first six months following probate, but did not expressly prohibit a distribution after the six-month period if a claim had been commenced).

Patricia Burns died on March 17, 2015. In her will dated October 23, 2010,  she left 20% of the residue of her estate to Brent Dale, with whom she lived, and 80% to her friend George Quan, disinheriting her daughter, Leslie Davis. Mr. Dale provided evidence that he and Ms.Burns were in a marriage-like relationship.  The gross value of the estate was over $2.5 million.

Ms.Davis filed a claim under Division 6,  Part 4 of the Wills, Estates and Succession Act, in August 2015, seeking to vary her mother's will on the basis that her mother had not made adequate provision for her.

Mr. Dale asked the court to order an interim distribution of $250,000 to him. Ms. Davis opposed the application unless she too received an interim distribution of $250,000. Similarly, Mr. Quan opposed the application unless an interim distribution were made to him as well.

In granting Mr. Dale's application, Mr. Justice Greyall applied the following criteria from a decision of the British Columbia Court of Appeal in Hecht v. Hecht Estate (1991), 62 B.C.L.R. (2d) 145, decided under the Wills Variation Act:                                                                                                                                                                                                                                                                                                                                                                                                                            

a. the amount of the benefits sought to be distributed as compared to the value of the estate;
b. the claim of the beneficiaries on the testator;
c. the need of beneficiaries for money; and
d. the consent of the residuary beneficiary to the proposed transfer.

In finding that it was appropriate to order the interim distribution to Mr. Dale, Mr. Justice Greyall noted that the net value of the estate available for distribution would likely be at least $2.3 million after expenses and Mr. Dale's share would be $460,000 if Ms. Davis is not successful. If she is successful, it is unlikely that she would receive more than one half of the estate.

Mr. Dale, who was 76, had financial need, with his expenses exceeding his income of $1500 per month. Ms. Burns expressed wishes that Mr. Dale have funds available for travel were unfullfilled becuase of the dealy in distributing the estate as a result of the lawsuit.

Mr. Quan had not brought his own application for an interim distribution, and, accordingly, Mr. Justice Greyall declined to make an order in his favour, but left it open for Mr. Quan to make his own application.

As Ms Davis is not a beneficiary, she is not entitled to an interim distribution. Mr. Justice Greyall found no prejudice to her in making the interim application. She may pursue her claim to a share of the residue expeditiously.

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