Sharma v. Sharma

Prem Lata Sharma is suing her sisters Raj Rani Sharma and Simmi Sharma. She is seeking to vary their mother Rama Rani Sharma’s will, pursuant to which she was disinherited, and she is also asking the court to declare that they hold title to their mother’s house in trust for the estate. Raj Rani Sharma is both a beneficiary and also the executor of the will. Their mother had gratuitously transferred the house into a joint tenancy with them, and their position is that they received the house by right-of-survivorship. The house is worth about $1.5 million, and the other assets are worth only about $100,000. The plaintiff’s claim that her sister’s hold the house in trust for their mother’s estate is important, because if they are entitled to it by right-of-survivorship, it will not be subject to the plaintiff’s wills variation claim.

The defendant sisters applied to court to dismiss the claim that they hold the house in trust for their mother’s estate. They argued that the plaintiff was attempting to make a claim on behalf of their mother’s estate, and that she could not do so without first applying under section 151 of the Wills, Estates and Succession Act for leave from the court to make a claim on behalf of the estate. She had not done so in this case.

Section 151 (1 provides that

… a beneficiary or an intestate successor may, with leave of the court, commence proceedings in the name and on behalf of the personal representative of the deceased person

(a)        to recover property or to enforce a right, duty or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or

(b)        to obtain damages for breach of a right, duty or obligation owed to the deceased person.

The plaintiff argued that she did not have to bring an application under section 151 for two reasons. First, she argued that she was not making a claim on behalf of the estate, but in her personal capacity for a declaration. Secondly, because she is not a beneficiary of the will nor an intestate successor (she would be only if there was not a will disposing of all of the estate), she does not have standing to apply under section 151.

In Sharma v. Sharma, 2018 BCSC 1262, Mr. Justice Punnett agreed with the plaintiff that she did not need to apply under section 151, and that she had standing to ask the court to declare that her sisters held the house in trust for their mother’s estate.

Mr. Justice Punnett noted that section 151 was enacted to overcome a gap in the law to allow beneficiaries to bring or defend a claim when the personal representative declined to do so.

Mr. Justice Punnett agreed that in this case the plaintiff could not apply under section 151. She is not a beneficiary of the will. Nor is she an intestate successor. Mr. Justice Punnett noted that the wording of section 151 refers to “intestate successor” in contrast to the notice provisions of the Supreme Court Civil Rules which refer to a person who “would have been an intestate successor if the deceased did not leave a will.” Accordingly, the language in section 151 is not broad enough to allow the plaintiff to apply pursuant to section 151.

Mr. Justice Punnett also held that the plaintiff as a person making a claim to vary the will had a sufficient interest to ask the court to declare that assets are estate assets. He cited several cases decided prior to section 151 coming into effect in which the courts had considered trust claims concurrently with will variation claims. He wrote:

[36]        In Doucette [v. McInnes 2007 BCSC 289] the court found a non-executor had standing to seek a declaration of trust alongside a will variation claim. The court noted that in Mordo v.Nitting, 2006 BCSC 1761, a Wills Variation Act action, the plaintiff was not a beneficiary and was completely excluded by the will and all of the estate passed by jointure to the deceased’s daughter. Justice Wedge permitted the plaintiff’s arguments respecting the jointures to go forward. There was no challenge to the plaintiff’s standing to advance that argument. A person then with an interest in an estate is entitled to inquire about assets that may form part of the estate. See also: Drummond v. Moore, 2012 BCSC 496 at paras. 29 to 35, Kuo v. Kuo, 2014 BCSC 519 at paras. 202-208, and Kurmis v. Zilinski, 2011 BCSC 1433 at paras. 22-24.

[37]        As a result, the plaintiff, who has an interest in the estate and its potential assets is entitled to seek declaratory relief. Were that not the case and given her lack of ability to apply under s. 151 of WESA, the plaintiff and the court would be denied access to a consideration of the assets that may properly form part of the estate.

[38]        As a result, the plaintiff is not required to obtain leave from the court pursuant to s. 151 of WESA before commencing her action.

Would the plaintiff have been required to seek leave of the court under section 151 to ask for a declaration that her sisters held title to the house in a joint tenancy if she were a beneficiary of the will? I would argue that it should not be necessary to apply under section 151 even if she were a beneficiary with standing to apply under that section. The same reasoning should apply that she would have a personal claim for declaratory relief against the personal representative and another beneficiary, in contrast to a claim against a third party. Section 151 should be applied in accordance with its remedial intent to facilitate claims on behalf of estates when the conditions of section 151 are met, and not to prohibit claims that could have been brought before section 151 came into effect. To require a beneficiary to apply under section 151 before making a claim that the personal representative holds assets in trust for the estate would be to needlessly add expense. It also results in the absurdity that the personal representative’s name will appear as both plaintiff and defendant in view of the fact that the beneficiary may “commence proceedings in the name of and on behalf of the personal representative of the deceased person….”