Tom v. Tang

In Tom v. Tang, 2023 BCCA 221, released in June, 2023, the British Columbia Court of Appeal clarified that in a wills variation proceeding the Court applies an objective standard when considering a will maker’s reasons for disinheriting a child or treating children unequally. Earlier Court of Appeal decisions have often been interpreted as applying a more subjective approach to a will-maker’s reasons, allowing a court to uphold disinheritances or significantly unequal treatments of adult children if the will-maker provided reasons that were valid (in that they were based on true fact) and rational (in that they were logically connected with the parent’s treatment of their child), even if those reasons were not objectively justifiable.

Before I get to the legal issues, the story in Tom is that of a couple and their five children, working together to build successful lives in Vancouver, after having immigrated to Canada in the 1960s. The will-maker, Bo Kam Tom, and her husband, with the assistance of their children, bought and operated a grocery store. They later bought a family home. All of the children obtained university educations.

Mr. Tom died before Mrs. Tom. Her health declined after she was hurt in a car accident and diagnosed with cancer. All of the children were described as “dutiful and devoted to their mother, visiting or calling regularly, taking her to appointments, dim sum and social activities, staying with her when she needed support and visiting her when she was at the hospital and later the hospice.“ They were “devoted and loving children.”

Two of the children, Rose Tsai and Samsun Tom, provided significantly greater care for their mother in her last few years. In recognition of their care, she changed her will to leave her house to those two children, with the rest of her estate divided among all five children. Her house was worth approximately $1.7 million and the remaining assets about $700,000. The effect of the will was that two of her five children would receive about 85 per cent of her estate, and the other three, Linda Tang, Faye Wong and Jack Tom, would share about 15 per cent.

The three children receiving a lesser share brought a wills variation claim asking the court to provide them with a larger share.

Section 60 of the Wills, Estates and Succession Act provides that the Court may vary a will if the will maker does not make adequate provision for a spouse or child. If adequate provision is not made the court may vary the will to provide such provision as the court considers “adequate, just and equitable in the circumstances.” Section 62 provides that the court may consider evidence of the will-maker’s reasons for making the provision they made. These legislative provisions were formally in the Wills Variation Act, which is referred to in many of the cases.

The trial judge varied the will to increase the provision for the three children who were left less in the will. The will was varied by giving an additional $300,000 to each of Rose Tsai and Samsun Tom, and dividing the rest of the wealth equally among all five children. The decision of the trial judge reduced the discrepancy among the children, while giving some effect to the will-maker’s decision to favour two of her children.

Rose Tsai and Samsun Tom appealed. One of their arguments was that the trial judge should have upheld the will on the basis that their mother had rational and valid reasons for making the provisions she made in view of the additional care they provided to her.

This raises an important issue. The will-maker’s reasons in this case, that two of her children had provided her with greater assistance, were factually accurate. Her decision to provide those two children with greater shares is logically connected to her reasons. Yet the overall distribution in her will is arguably disproportionate. She may have good reasons for favouring two of her children, but leaving them with 85 per cent seems a bit much in the context of her good relationships with all of her children.

Some would argue--including me--that there has been a tension in the cases between an objective standard in assessing whether a will-maker has made adequate provision for a child, and some of the cases in which the courts have upheld distributions on the basis of the will-maker’s reasons.

The Supreme Court of Canada has articulated an objective approach to wills variation cases. In a case decided in 1931, Walker v. McDermott, [1931] S.C.R. 94, the Supreme Court of Canada said that in applying the legislation the court “would naturally proceed from the point of view of the judicious father of a family seeking to discharge both his marital and his parental duty; and would of course (looking at the matter from that point of view), consider the situation of the child, wife or husband, and the standard of living to which, having regard to this and the other circumstances, reference ought to be had.”

In a more modern case, Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807, the Supreme Court of Canada set out a framework focused on the will-maker’s legal and moral obligations to a spouse or children. Legal obligations refer to obligations such s division of property obligations to a spouse under family law, while moral obligations are based on society’s reasonable expectations of what a judicious person would do in the circumstances.

In three cases, Bell v. Roy, (1993) 75 B.C.L.R. (2d) 213, Kelly v. Baker (1996), 15 E.T.R. (2d) 219, and Hall v. Hall, 2011 BCCA 354, the Court of Appeal has used language implying a more subjective standard if the will-maker provides reasons that are valid and rational, even if not objectively sufficient.

In Bell, 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 Kelly, Justice Finch (later Chief Justice) wrote,

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.

As I wrote in 2015 in a blog post entitled “It’s Time forthe Court of Appeal to Revisit its Formulation of ‘Rational and Valid Reasons’in Wills Variation Cases,” these cases have been criticized in other court decisions as being inconsistent with the objective standard in Tataryn.

In the Court of Appeal in Tom, Madam Justice Fenlon considered Bell, Kelly and Hall in the context of the facts and issues in dispute in each of those cases, and found that the Court of Appeal in each of those cases did apply an objective approach and was not advocating a more subjective approach to a will-maker’s reasons. For example, in Kelly, the claimant submitted that at the time the will was made, four years after the claimant left home, the reasons did not provide a sound basis for disinheriting him. Those reasons included that he had abandoned his family and lived a life morally unacceptable to the will-maker. However, the will was made 16 years before the will-maker died. Justice Finch was addressing the timing of the reasons: they did not have to be justifiable at the time the will was made, if they were consistent with the “discharge of a good parent of her duties to her family,” at the time of her death.

After considering all three cases, Justice Fenlon wrote,

[51]         In summary, Bell CA, Kelly and Hall do not stand for the principle that a testator’s unequal treatment of adult children must be deferred to, without regard to the objective standard of the reasonable testator and current social norms, as long as the subjective reasons given for the unequal distribution are valid and rational. These cases recognize instead that a testator’s moral duty to adult children must be assessed from the viewpoint of a reasonable testator, and that the moral duty may be negated where there is just cause.

The Court of Appeal in Tom went some distance in re-interpreting it’s earlier decisions, but the result is to bring the jurisprudence in line with the objective framework of Tataryn.

This ground of appeal was dismissed. The Court of Appeal did vary the trial judge’s decision a little, by awarding each of Rose Tsai and Samsun Tom 30 per cent of the estate with the other three sharing 40 per cent. 

 

Nova Scotia Court of Appeal Allows Appeal in Lawen Estate

Both Nova Scotia and British Columbia allow independent adult children to apply to court to vary their parents’ wills. Although other provinces in Canada have legislation allowing spouses, minor and dependent children to apply for dependant’s relief on the death of a spouse or parent who has provided little or no inheritance, the provisions allowing independent adult children to apply are not common.

British Columbia has had this legislation under various titles for over 100 years now. The Supreme Court of Canada has decided cases and outlined principles that are to applied to claims made under British Columbia’s legislation, including claims by independent adult children. The most recent Supreme Court of Canada decision is Tataryn v. Tataryn Estate, [1994] 2 SCR 807. I was a bit surprised when Justice Bodurtha of the Supreme Court of Nova Scotia held in Lawen Estate v. Nova Scotia (Attorney General), 2019 NSSC 162 (CanLii) that Nova Scotia’s Testator Family Maintenance Act offends section 7 of the Charter of Rights and Freedoms insofar as it permits non-dependant adult children to apply of vary their parents’ wills. Section 7 of the Charter says:

Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.

The court found that to the extent that the legislation interfered with the testamentary autonomy of the will-maker in respect of independent adult children, it violates the constitutional right to liberty. The Court read down the legislation so that it would not apply to non-dependant adult children.

The Nova Scotia Court of Appeal in Nova Scotia (Attorney General) v. Lawen Estate, 2021 NSCA 39 (CanLii) disagreed. On appeal by the Attorney General of Nova Scotia, the Court allowed the appeal. Justice Farrar, writing for the Court, held that there was an insufficient evidentiary basis to find that the legislation violated section 7 of the Charter:

[52]         In this case, there was no evidence put before the application judge to establish an engagement with matters critical to a testator’s dignity and autonomy.  Nor was there any evidence indicating why – from a public interest perspective – testamentary capacity was a pressing issue, that testators’ wishes were being arbitrarily ignored, or that testamentary autonomy to preclude a non-dependent adult child engaged the liberty interests of an individual.  There was no consideration of whether s. 5 of the Act, which outlines the factors to be taken into account when considering a claim of a dependent, safeguarded a testator’s autonomy.

[53]         The application judge did not consider, even if a breach of s. 7 was made out, whether it was in accordance with principles of fundamental justice.  He inferred that the AGNS accepted if a violation of the liberty interest was found it would not be in accordance with principles of fundamental justice (¶62).  The AGNS did not make any such concession.  It was incumbent upon the application judge to undertake this crucial aspect of the constitutional analysis.

[54]         The application judge did refer to Tataryn Estate, supra, where McLachlin, J., explained that the purpose of the Act was to ameliorate circumstances of women and children at the time when men held most of the property, to ensure that women and children would receive an adequate, just and equitable share of the family wealth on the death of the person who held it, even in circumstances where they were not able to demonstrate need (Tataryn Estate, ¶ 16, cited at ¶ 19 herein).  However, he did no analysis nor did he make any finding as to whether the objects of the Act were in compliance with the principles of fundamental justice.

[55]         There was no finding that the impugned provisions caused harm, that they were arbitrary, overbroad or grossly disproportionate to the objectives of the legislation.  All of which would have been necessary to anchor a breach of s. 7.

There are no reported decisions in British Columbia at the time of writing this post that have ruled on the question of whether our legislation is constitutional. Nor has the Supreme Court of Canada considered this issue. Neither the Supreme Court of Nova Scotia decision or the Nova Scotia Court of Appeal decision is technically binding on a British Columbia court, but a judge in B.C. could find the reasoning persuasive and apply it here.

Volovsek v. Donaldson

The provisions of the Wills, Estates and Succession Act (the “WESA”) allowing a spouse or child to apply to vary a will if the will-maker has not made adequate provision for the spouse or child may be avoided by the will maker settling a trust during his lifetime, and holding significant assets in the trust. The relevant sections in Part 4, Division 6 of the WESA do not apply to assets held in trust. Claims that transfers of assets into a trust to avoid a wills variation claim offend the Fraudulent Conveyance Act have not been successful (although I would argue that in some circumstances it may be open to successfully challenge a trust on the basis of the Fraudulent Conveyance Act, but that’s for another post).

In a recent decision, Volovsek v. Donaldson, 2019 BCSC 1820, the plaintiff’s lawyers came up with a creative argument in an unsuccessful attempt to challenge a trust.

Yasmine Volovsek and Fernand Joseph Boisvenu were in a relationship from 1989 until Mr. Boisvenu’s death in March 2015. In 2014 he settled a trust, which held most of his assets, and he also made a will. Under the will and trust, he provided Ms. Volovsek about $1 million. The total value of his assets, including those he held in trust, was about $8 million. The other beneficiaries were relatives and a friend.

Ms. Volovsek alleged that they were in a marriage-like relationship. If so, she would be able to apply to vary his will, and if they had separated during his lifetime, she could have made a claim to a share of the assets pursuant to the Family Law Act.

She alleged that she was financially dependant on him, and he owed her a fiduciary duty, or in other words a high duty of loyalty, which included a duty to tell her of his estate plan so she could take steps to protect her interest including separating from him and making a family law claim. Mr. Justice Myers set out her argument at paragraph 144:

[144]   Ms. Volovsek argues that the fiduciary duties were owed because (quoting from her written argument):

a)         they were spouses; b) he encouraged and asked Ms. Volovsek to be completely financially dependent on him from the beginning of the relationship and she gave up education and job opportunities to be self-sufficient in reliance on these promises; c) he promised to her multiple times that she would be well provided for from his estate ("there's $5 million in the bank and no Japanese, do you want to see my will?"); and (d) based upon these statements and their relationship, Ms. Volovsek stayed and took care of Mr. Boisvenu when he was sick instead of separating from him upon the [Ms. F.] affair to crystallize her family property claim.

The reference to “no Japanese” was a reference to Ms. F. with whom he also had a relationship.

Although Mr. Justice Myers found that Ms. Volovsek and Mr. Boisvenu did not have a marriage-like relationship, he considered the argument that Mr. Boisvenu had a fiduciary duty to Ms. Volovsek on the assumption that they were in a marriage-like relationship.

There are certain relationships which the courts have recognized as fiduciary relationships such as a trustee-beneficiary, lawyer-client, director-corporation. He rejected the argument that a spousal relationship should fall into a similar category when one spouse is financially dependant on the other. Mr. Justice Myers wrote:

[147]   In my view, the proposed category is not appropriate.  First, it is not simply a type of relationship (as, for example, solicitor-client); rather, it adds an additional quality to the relationship, i.e. financial dependence.

[148]   Moreover, but for the qualification of the relationship having to involve financial dependence, it would engage every spousal relationship.  Yet as the courts have recognised, and as discussed in Mother 1, there is no set type of spousal relationship.  Although, Ms. Volovsek's counsel submitted that, "If it looks like a duck, walks like a duck and quacks like a duck, then it is a duck", there is no defined "duck".

In cases that do not fall within a category recognized by the courts as inherently fiduciary, the courts may still find on the particular facts that one person owed the other fiduciary duties. This is referred to as ad hoc fiduciary duties. Mr. Justice Myers summarized the law:

[157]   In Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24 and PIPSC, the court set out the requirements to establish an ad hoc fiduciary duty.  A plaintiff must show that:

a)              the alleged fiduciary has expressly or impliedly undertaken to act in the best interest of the plaintiff;

b)              the alleged fiduciary has scope for the exercise of some discretion or power;

c)               the alleged fiduciary can unilaterally exercise that power or discretion so as to affect the plaintiff's legal or practical interests;

d)              the plaintiff is peculiarly vulnerable to or at the mercy of the alleged fiduciary holding.

He found on that facts that there Mr. Boisvenu did not undertake to act in Ms. Volovsek’s best interest. Statements made by him to her that he would leave assets to her were not ones that she could reasonably rely on. One statement was a vague statement that she was in his will, and the other two indicating that she would get most of his wealth were made when he in a medical emergency. Mr. Justice Myers did not accept her evidence that Mr. Boisvenu asked her to quite work.

Mr. Boisvenu kept his assets separate, and maintained an independent lifestyle. Mr. Justice Myers distinguished the facts from circumstances in which a couple build a business together, or one spouse stays at home to raise the children.

Might the argument that there is a fiduciary duty owed by one spouse to another be successful in a different case? Perhaps, although the types of circumstances in which I think it might be successful could also give rise to other claims such as unjust enrichment or proprietary estoppel.

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….”

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.

Kish v. Sobchak Estate: Application of Family Law to Wills Variation Cases

Wills variation cases in British Columbia and family law are related. The Family Law Act deals with division of property and support on the breakdown of marriages and common law relationships, while Part 4, Division 6 of the Wills, Estates and Succession Act deals with obligations of a deceased spouse to make adequate provision for the surviving spouse. With changes to legislation governing both family law and succession law in recent years, it will be interesting to see how the courts adapt and apply principles from one to the other.

In the leading modern case on wills variation, Tataryn v.Tataryn Estate, [1994] 2 SCR 807, the Supreme Court of Canada  said that when determining whether a will maker has made adequate provision for his or her spouse or children in a will, the courts should consider whether the will-maker met his or her legal and moral obligations. In determining whether the legal obligations to a spouse are met, the courts are to consider what the spouse would have received if the relationship had broken down. Madam Justice McLachlin (now Chief Justice) wrote,

The legal obligations on a testator during his or her lifetime reflect a clear and unequivocal social expectation, expressed through society's elected representatives and the judicial doctrine of its courts.  Where provision for a spouse is in issue, the testator's legal obligations while alive may be found in the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp ), family property legislation and the law of constructive trust: Pettkus v. Becker, [1980] 2 S.C.R. 834; Sorochan v. Sorochan, [1986] 2 S.C.R. 38; Peter v. Beblow, [1993] 1 S.C.R. 980.  

The rationale for looking at family law is to provide symmetry between obligations between spouses during their lifetimes, and on the death of one.

In some wills variation cases, the courts have done a fairly detailed analysis of how property would have been divided on a notional breakdown of the marriage or common law relationship, while in others this appears to be less central to the decisions (which may reflect the evidence and how the lawyers presented each case).

I have written two posts on the recent Court of Appeal decision in Kish v. Sobchak Estate, 2015 BCCA 65, one dealing with the facts and decision, and the other with the amount of deference to be given by the Court of Appeal to a judge’s findings of facts in a wills variation summary trial.

Although not central to the reasons for judgment, a couple of paragraphs in the Kish decision caught my eye.  The court appears to me to be placing less emphasis on family law. Madam Justice Newbury for the Court wrote:

[48]        The Court in Tataryn (which was on appeal from this province) suggested that where provision for a spouse is in issue, guidance concerning the testator’s legal obligations while he or she was alive may be found in the Divorce Act, family property legislation, or the law of constructive trusts. The Court, however, did not carry out a detailed examination, or make specific findings, concerning what property or how much support Mrs. Tataryn would have been entitled to in the event of a separation. The Court awarded her certain real estate and the residue of her husband’s estate after allowing for gifts to the testator’s sons.

[49]        I infer that the analysis of legal obligation need not be a detailed or exact one, given the difficulty of drawing a direct analogy between the consequences of a marriage breakdown – which leaves both spouses with needs and obligations – and the death of a spouse. McLachlin J. stated that “there will be a wide range of options, any of which might be considered appropriate in the circumstances.” (Tataryn at 824.) An action under the WVA should not normally become a proxy for divorce proceedings, complete with the elaborate features and special rules applicable to a family law trial.

Kish v. Sobchak Estate: Standard of Appellate Review of Findings of Fact in Wills Variation Summary Trial

In the recent decision in Kish v. Sobchak Estate, 2016 BCCA 65, a five-judge panel of the British Columbia Court of Appeal considered how much deference the Court of Appeal is required to give a Supreme Court Judge’s finding of facts in a wills variation case decided on the basis of affidavit evidence, as opposed to a conventional trial where witnesses testify in person.  (This is my second post on this case. I reviewed the facts and the judgement in my previous post. )

An appeal is different from a trial. It is not a rehearing. Rather the appellant has to persuade the appellate court that the trial judge made an error, and that the error was of a nature such that the appellate court should interfere by either changing the decision or ordering a retrial.

The amount of deference the appellate court is required to give the trail judge’s decision may vary depending on the nature of the alleged error. It may be one of a question of law, a finding of fact, an inference of fact or it may involve the exercise of discretion. Some findings are said to be a mixed questions of law and fact.

An appellate court is not required to defer to a trial judge’s rulings on pure questions of law. If the appellate court holds that the judge has made an error of law, the appellate court will substitute its decision.

But generally greater deference is required for findings of fact. The leading case in Canada is a decision of the Supreme Court of Canada in Housen v. Nikolaisen, in which the Supreme Court of Canada reaffirmed that an appellate court may only interfere with a finding of fact if the court finds that the trial judge made a “palpable and overriding error.” Another formulation of the test is that the trial judge’s finding of facts will be upheld if there is some evidence to support it.

The reasons for this degree of deference on findings of fact were set out by Justices Iacobucci and Major in the majority judgment as follows:

15                               In our view, the numerous bases for deferring to the findings of fact of the trial judge which are discussed in the above authorities can be grouped into the following three basic principles.
 

(1)   Limiting the Number, Length and Cost of Appeals

16                               Given the scarcity of judicial resources, setting limits on the scope of judicial review is to be encouraged.  Deferring to a trial judge’s findings of fact not only serves this end, but does so on a principled basis.  Substantial resources are allocated to trial courts for the purpose of assessing facts.  To allow for wide-ranging review of the trial judge’s factual findings results in needless duplication of judicial proceedings with little, if any improvement in the result.  In addition, lengthy appeals prejudice litigants with fewer resources, and frustrate the goal of providing an efficient and effective remedy for the parties.

(2)  Promoting the Autonomy and Integrity of Trial Proceedings

17                               The presumption underlying the structure of our court system is that a trial judge is competent to decide the case before him or her, and that a just and fair outcome will result from the trial process.  Frequent and unlimited appeals would undermine this presumption and weaken public confidence in the trial process.  An appeal is the exception rather than the rule. 

 (3)   Recognizing the Expertise of the Trial Judge and His or Her Advantageous Position

18                               The trial judge is better situated to make factual findings owing to his or her extensive exposure to the evidence, the advantage of hearing testimony viva voce, and the judge’s familiarity with the case as a whole.  Because the primary role of the trial judge is to weigh and assess voluminous quantities of evidence, the expertise and insight of the trial judge in this area should be respected.

In Kish, the Court of Appeal considered the application of the requirement in Housen that an appellate court defer to a trial judge’s finding of facts to a wills variation case that was decided on the basis of affidavit evidence rather than oral testimony. Although usually three judges hear an appeal in the Court of Appeal, the Court may sit as a five-judge panel if requested in order to reconsider prior decisions.

One rationale for deferring to a trial judge’s finding of facts is that the trial judge has the advantage of seeing and hearing the witnesses, and an appellate court does not. But it is fairly common for the Supreme Court of British Columbia to hear summary trials in which the evidence is put in by affidavits, and witnesses either do not testify in the presence of the judge at all, or there is more limited oral testimony. In a previous post, I reviewed the number of summary versus conventional trials in reported decisions over a three year period and found that just under half were summary trials. In a summary trial without oral testimony, it could be argued that the trial judge does not have an advantage in making findings of fact over an appellate court which may review all of the written evidence.

The Court of Appeal also considered the case authorities dealing with the standard of review of the exercise of the trial judge’s exercise of discretion when varying a will to make the provision he or she considers “adequate, just and equitable in the circumstances.” In a Supreme Court of Canada case, Swain v. Dennison [1967] S.C.R. 7, the Court held that the British Columbia Court of Appeal may “reach its own conclusion as to the discretion properly to be exercised.” Based on the Swain decision, there appears to be a lower standard of review of an exercise of a trial judge’s discretion when varying a will than when a judge exercises discretion in other areas of law.

Madam Justice Newbury, writing for the Court of Appeal, distinguished between a finding of fact and the exercise of discretion. The judge does not exercise discretion in finding facts. The judge may have discretion in choosing a course of action once he or she has made findings of fact.

She considered whether a lower standard should be applied in making findings of fact if the trial proceeded summarily based on affidavit evidence in a wills variation case than if the trial was a conventional trial based on oral testimony.  The Court of Appeal held that the same standard for findings of fact applies in both cases: palpable and overriding error. She wrote:

[43]        Drawing all of these threads together, there are two possible approaches to the relationship between Housen on the one hand, and Swain/Price on the other in appeals from summary trial judgments under the WVA:

(a)      All “findings” of a trial judge, including those that involve the exercise of judicial discretion, are reviewable by this court without deference, except findings based on oral testimony, which are subject to the Housen standard; or

(b)      A trial judge’s exercise of discretion may be reviewed without deference, but all findings of fact (whether based on oral or affidavit evidence) are subject to theHousen standard.

[44]        In my view, the second alternative is the preferable one. It is simpler than the first and does not require this court to determine in every case whether a trial judge’s findings were based on oral or affidavit evidence or both, whether the witness was cross-examined on the point, etc. More importantly, it reflects the trend to increased deference to trial judges that has characterized civil law in Canada in the last few decades. This is not to suggest that there is no principled reason for distinguishing between oral and affidavit evidence (the reason being that the trial judge sees the witness at trial and a court of appeal does not); but Housen and its predecessors did not make that distinction in formulating the current standards of review. (Indeed the Court observed at para. 25 of Housen that there were other reasons to defer to trial judges.) Further, as we have seen, the distinction was not made in Swain itself.

[45]        I propose to address the grounds of appeal and cross-appeal, then, on the basis that while this court must defer (i.e., apply the “palpable and overriding” or “no supporting evidence” standard) to findings of fact made by the trial judge, we are not bound to defer to her exercise of discretion – i.e., we are not bound to apply the standard described in Oldman River[v.Canada (Minister of Transport) [1992] 1 S.C.R. 3] and Penner, supra.

Kish v. Sobchak Estate

I am always appreciative when a court provides me with fodder for two or three blog posts in one case. I am not suggesting that the five judges  of the British Columbia Court of Appeal in Kish v. Sobchak Estate, 2016 BCCA 65, had my blog in mind when they released their reasons for judgment, but I am thankful for the material nonetheless. The case deals with significant issues in wills variation cases, including the obligations to each other that spouses who marry later in life (each planning on leave his or her wealth to his or her descendants) have to each other, the standard of appellate review of trial decisions in wills variation cases, and the extent to which the court considers family law in determining spouses obligations to provide for each other in wills.

In this post, I will outline the facts and the decision. In the next post I write about this case, I will discuss the standard of review by the Court of Appeal of wills variation judgments made by the Supreme Court of British Columbia. In the third post on this case I will write about the Court’s comments on the relationship between family law and wills variation cases.

Marie Kish and Edward Sobchak had a romantic relationship from no later than 1991 until Mr. Sobchak died in 2013. During at least t he last five years, they lived together in Ms. Kish’s house, and the trial judge found that they were common law spouses. Mr. Sobchak also retained a separate home.

They each kept separate finances, and Ms. Kish’s will left her estate to her son and grandson. In his last will, Mr. Sobchak left most of his estate to his daughter, Kimberly Doyle.

Ms. Kish was 72 years old by the time of trial, and had severe dementia. Her main asset at the time of Mr. Sobchak’s death was her home, with an assessed value of $287,000. The home was mortgaged and about $65,000 was owing on the mortgage. Her income was approximately $19,000 per year, and the costs of her care in the care facility in which she was living were a little under $2000 per month. There was a shortfall of about $5000 per year of income to meet expenses, unless her house were sold or rented out.

The value of Mr. Sobchak’s net estate was $186,000. This amount does not include $62,000 that Mr. Sobchak either lent or gave his daughter, nor $12,000 she withdrew from his accounts. Ms. Doyle also received $250,000 as the beneficiary of her father’s Registered Retirement Income Fund.

The trial judge awarded Ms. Kish $100,000 after a summary trial. Ms. Doyle appealed, and Ms. Kish cross-appealed.

The Court of Appeal reduced the award from $100,000 to $30,000. Two factors were significant in the Court’s decision. One, in view of Ms. Kish’s circumstances, a large award would not provide much practical benefit to her. Secondly, both Mr. Sobchak and Ms. Kish began their relationship later in life, after accumulating their own assets, and both wished to provide for their children.

Madam Justice Newbury, writing for the Court, framed these issues early in the reasons for judgment as follows:

[2]            The case at bar requires us to deal with some other realities being experienced by many in the postwar generation as it passes its wealth to the next. Those realities include the greater frequency of divorces, re-marriages and ‘serial’ relationships. In this case, the testator and the plaintiff were mature adults when they met. Both had been previously married and had acquired adequate property or income to support themselves. They clearly did not wish to be treated as spouses and both hoped to benefit their adult children (by earlier relationships) on their deaths. To this end, they kept their financial affairs separate and kept up separate homes.

[3]            Another reality that confronts us in Canada as life expectancy increases is the incidence of Alzheimer’s Disease and other forms of dementia in seniors. Here, Ms. Kish, who is the surviving spouse and the plaintiff herein, has “severe” dementia and lives in an institution where, one assumes, her care is paid for by government in large part or completely. It seems doubtful that any award from the testator’s estate will be of any real benefit to her.

[4]            Obviously, these circumstances distinguish this case from the majority of WVA cases in which both spouses have contributed not only to mutual support but to the acquisition of ‘family assets’ over the years and expect that the survivor of them will continue to enjoy those assets after the death of the other. The primary question for us is how the “societal norms” of legal and moral obligations discussed in Tataryn [v. Tataryn Estate [1994] 2 S.C.R. 807] are to be applied to the more complex facts before this court.

In considered Ms. Kish’s needs, Madam Justice Newbury noted that although Ms. Kish’s income did not cover all of her expenses, the shortfall could be made up either by renting her house, or selling it and investing the proceeds. Because of Ms. Kish’s dementia, it is unlikely that a large award would be spent on her during her lifetime, and would likely just add to her estate. Madam Justice Newbury wrote:

[53]        Mr. Doyle also submits that the fact Ms. Kish is in a full-time care facility and is mentally incompetent means she is not in a position to spend sale proceeds for her own benefit. Sadly, her needs are now few and are taken care of in the institution. There is little that can be done to increase her enjoyment of life. It is hard to disagree with the suggestion, which we put to counsel during the hearing, that the trial judge’s award under the WVA will only serve the purpose of increasing Ms. Kish’s estate. As noted by Mr. Justice Finch, as he then was, in Frolek v. Frolek [1986] B.C.J. No. 1869 (S.C.):

It is not the purpose of the Wills Variation Act … to enable an applicant to build up an estate of her own, but rather to ensure that she is appropriately maintained and supported during her lifetime.

In balancing the principle of testamentary autonomy, Mr. Sobchak’s legal and moral obligations to his spouse, and his moral obligations to his daughter, the Court gave great weight to testamentary autonomy in this case reflecting what the Court considered to be the expectations of Mr. Sobchak and Ms. Kish. Madam Justice Newbury wrote:

[60]        There is no doubt that claims of adult children do not and should not overshadow a testator’s moral duty to a spouse, especially where (as in Bridger [v. Bridger Estate 2006BCCA 230] and Picketts[v. Hall (Estate) 2009 BCCA 329]) the relationship or marriage was a long-term one. Here, however, the parties met late in life after each had become self-supporting and had had children. They took particular care to keep their finances separate and consistently indicated they did not wish to be married again. From the amendments made to their wills in early 2013, it is clear both wished to benefit their own children on death to the exclusion of the surviving spouse. (Arguably, they had an understanding to this effect.) Mr. Sobchak’s estate was relatively modest (indeed, after payment of the income tax on his RRIF, it was $186,000 – unless one adds in $74,000, representing the $12,000 in cash received by his daughter and the $62,000 amount referred to in the “Lending Agreement” described earlier). Using the larger figure of $260,000, the estate exceeds the equity in Ms. Kish’s house by only $40,000; using the $186,000 figure, his estate (to which she had not contributed) was less than her main asset.

[61]        In Tataryn, the Court stated that testator autonomy is one of the two interests “protected” by the WVA. In the circumstances of this case, it seems to me that “contemporary community standards” would be more respectful of that principle than was found to be appropriate in the ‘traditional’ marriages in Bridger and Picketts. Many today would find it unfair or inappropriate to disregard the wishes of both parties that their modest estates, built up through their own individual efforts, should be their own and that their respective children should benefit exclusively therefrom. And, while it is true that government is presumably supplying Ms. Kish’s needs, most would not regard her as living on some type of subsidy or ‘handout’. Rather, she is receiving benefits from a medical system to which all Canadians contribute and from which all are entitled to receive medical care.

Conclusion

[62]        Like the trial judge, this court can do no better than exercise its discretion based on all of the relevant factors in the particular case before it. In my opinion, the factors that weigh most heavily are the relative sizes of the two estates on the one hand, and on the other, the legal support obligation to which Mr. Sobchak would have been subject if the parties had separated during his lifetime. In all the circumstances, I cannot say the trial judge erred in finding that Mr. Sobchak failed to make “adequate provision” for Ms. Kish, even though she has the equity in her home to meet her basic needs.

[63]        At the same time, I conclude that through the lens of “modern values and expectations”, the parties’ wishes remain an important consideration. The parties’ particular circumstances and their relationship weigh strongly, in my opinion, in favour of respecting testator autonomy. I would, with respect, give more weight to that principle than did the trial judge and would therefore reduce the award to Ms. Kish to $30,000.

Varying a Final Wills Variation Order

Apart from a successful appeal, can the courts vary a final wills variation order in British Columbia? Although I have never seen it done, in limited circumstances, the answer appears to be “yes.”

Part 4, Division 6 of the Wills, Estates and Succession Act allows a spouse or child of a deceased will maker to apply to court to vary a will if the will maker did not make adequate provision for them. If the Court finds that the will-maker did not make adequate provision for his or her spouse or children, as the case may be, the Court may vary the will to make such provision as the Court thinks “adequate, just and equitable in the circumstances.”

Subject to the right of an appeal, once the Supreme Court of British Columbia makes an order varying a will (or refusing to vary the will), then that is usually the end of the matter. The will-maker’s personal representative carries out the will as varied.

But there are limited circumstances where a Court could vary the Court’s variation of the will. Section 71 of the Wills, Estates and Succession Act provides:

Court may cancel or vary order

71  If the court has ordered periodic payments, or that a lump sum be invested for the benefit of a person, the court may

(a) inquire whether, at any subsequent date, changes in the circumstances of the person in whose favour the order was made have resulted, in whole or in part, in the person's entitlement to adequate provision separate from the order, and

(b) cancel, vary or suspend its order, or make another order.

Despite some changes in the wording, this provision is substantially similar to section 14 in the Wills Variation Act, which it replaced when the Wills, Estates and Succession Act came into place.

The section would not apply to a variation in which the person on whose behalf the will is varied is awarded a specific sum of money, or an asset, or a percentage of the estate, which are the more common types of awards made nowadays. It would apply in more limited circumstances, such as an order setting aside a sum of money or percentage of the estate, out of which payments are to be made to the claimant, with giving the claimant an entitlement to the whole of the fund. For example, the court could set aside $200,000 to be invested, with $2000 per month paid out of that fund to the claimant, and with anything left in the fund on the claimant’s death divided among the other beneficiaries.

I have not found any court cases that have applied section 71 (or the earlier similar provisions in the Wills Variation Act, and Testator's Family Maintenance Act).

I have difficulty conceiving when it would be applied under the modern principles applied to wills variation cases. The provision strikes me as a holdover from the days when the legislation was seen more as a vehicle for ensuring that a husband and father (in the 1920s, it was usually a husband and father) did not leave his wife and children destitute. It was more common for the courts to make orders that provided for monthly payments to meet a spouse’s or child’s needs. The current section 71 appears to be intended to cover a situation where those needs are met by a different source, perhaps through employment, recovery from an illness, or another inheritance.

Under the more modern approach, as articulated by the Supreme Court of Canada in Tataryn v. Tataryn [1994] 2 S.C.R. 807, the court considers whether the will maker satisfied his or her legal and moral obligations to the claimant. If not, then the court varies the will to satisfy those legal and moral obligations. The awards will often be greater than that required to satisfy the claimant's basic financial needs, sometimes significantly so including awards in the millions.

The court considers whether adequate provision has been made to the spouse and children at the time of death the will-maker’s death, although the Court may consider a substantial change in circumstances between the date of death and trial when making the variation (Landy v. Landy Estate, (1991) 60 B.C.L.R (2d) 282 (CA)).

The variation satisfies the will-maker’s obligations to the claimant, and logically the successful claimant has established a corresponding entitlement.

If the court finds that the will-maker did not make adequate provision for a spouse or children, and the court varies the will, then I have difficulty conceiving how a change in the claimant’s circumstances after the trial judgment should affect his or her entitlement, irrespective of the structure of the variation ordered by the court (outright share of an estate, or periodic payments). Either the will-maker met his or her legal and moral obligations at the time of death, or he or she did not. If not, why should an improvement in his or her spouse or children’s circumstances after trial change that?

BH v. JH

In a wills variation claim in British Columbia, the Supreme Court of British Columbia is called upon to decide whether a will has made adequate provision for a spouse or child, and if not, what provision is adequate, just and equitable in the circumstances. There are so many circumstances that vary considerably from case to case, such as the size of the estate, financial circumstances of the parties, relationships between the parties and the will-maker, the will-maker’s reasons for making the will he or she did (to name a few), it is difficult to predict the outcome of any particular case.

While there is a virtually limitless variation in the facts, the courts apply certain principles in deciding these cases. For example, when a claim is asserted by or on behalf of the will-maker’s spouse, the courts will look at what the spouse would have received under family law, if instead of the will-maker dying, there had been a breakdown of the spousal relationship. This analysis appears mandated by the Supreme Court of Canada, in Tataryn v. TatarynEstate, [1994] 2 S.C.R. 807, in which the court said that the legal obligations that the will-maker had to a spouse or child are given priority over competing moral claims in determining whether to vary a will, and the extent of any variation. This analysis does not necessarily create certainty—there are plenty of disputes about the entitlement of the parties on a breakdown of a marriage or marriage-like relationship—but does offer some measure.

But when a spouse makes a wills variation claim is the court always required to vary the will to such an extent that the spouse will receive at least as much as he or she would have received in a family law claim? Or may the court award less in some circumstances. I ask this question in light of the decision  in a recent Supreme Court of British Columbia decision, BH v. JH, 2015 BCSC 1551. In that case, the Court awarded the surviving spouse less than what the Court found she might have received on a breakdown of the marriage.

KH and DH married in 1956 (the reported decision uses initials only). They had two sons, BH and NH, and a daughter, JH. KH, the husband, bought a residential property in Langley in 1962 and built the family home on it.

Sadly, DH suffered from paranoid Schizophrenia, was hospitalized on and off from 1964 to 1975, when she moved into a group home due to her illness. Thereafter, she visited with her family, primarily to have contact with her children, but lived apart from her husband. However, neither ever started a family law claim against the other, and the children acknowledged that they never heard their father speak of getting divorced.

KH died on September 13, 2009. In his will, apart from some of his personal effects left to his sons, he left his entire estate to his daughter, JH.

The two sons applied to vary the will, and the Public Guardian and Trustee of British Columbia also asserted a claim on behalf of DH.

The estate consisted primarily of the residence in Langley, which had an assessed value at the time of his death of just under $475,000. The Court found that the net value of the estate at the date of death, taking into account a mortgage on the property, and other debts and expenses was $370,000 (the amount that was realized on the sale of the property a few years later, was higher).

At the time of KH’s death, his wife received pension income of $1200 per month, and her expenses were just under that. She had about $8000 in savings.

KH’s daughter JH had lived with him until his death. She assisted him with household chores, and her assistance increased during the last years of his life, when he was ill. She continued to live in the house, until it was sold in a foreclosure in 2012. She does not have a strong employment history, and was earning minimum wage as a casual working at the time of trial, while living in a woman’s shelter. She had no savings.

Each of the sons had careers and families, although their means are described by the Court as modest.

The Court considered KH’s legal obligations to his wife, followed by his moral obligations. With respect to the legal obligations, the Court considered what she would have received in a breakdown of the relationship as at the date of death under the Family Relations Act, which was the applicable law in 2009 (this law has since been changed and replaced by a different property division under the Family Law Act).

While KH and DH were physically separated since 1975, they remained spouses until KH’s death. The Court found that if DH had brought a Family Relations Act claim for an equal division of assets in 2009, the court would likely have reapportioned KH’s assets in his favour, taking into account the long separation, and the fact that he paid the mortgage and other expenses. The Court found that she would have received “no more than one third of the value of the Property.”

The Court found that it was unlikely that she would have received spousal support. She had made little contribution to raising the children after she was hospitalized, and KH had limited pension income when he died.

In awarding DH $60,000, the Court also considered the following:

[92]         At the time of the testator’s death, DH was 80 years old.  While her basic needs were met at the group home, it was foreseeable that with the contingencies of aging she may require more care than the group home is able to provide, and the funds to pay for that care.  Society’s reasonable expectation would be that a judicious spouse would provide some financial protection against the contingencies of his wife’s old age, to the extent that his means and the other claims upon his estate permitted.  In my view, the deceased’s moral duty was enhanced where his spouse was incapable of managing her own financial or legal affairs.

In contrast to his obligation to DH, KH had no legal obligation to his two sons. The Court found that he did have a moral obligation to make provision for them, and KH did not make adequate provision for them. But their moral claims were not as strong as their sisters in light of her “companionship for her father, her contributions through taking him on trips, sharing housekeeping expenses and caring for her father as he aged and his health declined....”  KH also had the greatest need.

The Court awarded each of the two sons $50,000.

The aspect of this decision that may prove controversial is the award of $60,000 to DH. If DH as a spouse would have been entitled to one third of the value of the family assets (I appreciate that the Court said “no more than” ), and in view of the fact that she had little or none of the family assets in her own name, should she have received at least that portion of the estate? Based on a net value of $370,000, that would have entitled her to just over $123,000. The other question that may be asked about the outcome is whether the amount should have been determined on the basis of the assessed value of the house at the date of death, without reference to the proceeds that were ultimately received on the sale of the house. The difference may reflect both that the assessed value for property tax is not always accurate, and inflation. It may be preferable for the court to award a portion instead of a fixed amount to allow for fluctuations in value of assets between the date of death, the trial and the actual distribution (see Graham v. Chalmers, 2010 BCCA 13 at paragraph 42, which I wrote about here). 

What Does Section 155 of the Wills, Estates and Succession Act Really Mean?

Does section 155 (1)(a) of the Wills, Estates and Succession Act permit an executor or administrator to distribute an estate within 210 days of a grant of probate or letters of administration with will annexed without the consent of a disinherited spouse or child, if all of the beneficiaries named in the will consent?

I have now discussed the meaning of section 155 (1) (a) with several other estate lawyers, and I think the wording of this section is quite ambiguous.

It may be useful to set out the section in its entirety to see the context.

Distribution of estate

155 (1) The personal representative of a deceased person must not distribute the estate of the deceased person in the 210 days following the date of the issue of a representation grant except

(a) with the consent of all beneficiaries and intestate successors entitled to the estate, or

(b) by order of the court.

(2) The personal representative of a deceased person must not distribute the estate of the deceased person after the period referred to in subsection (1) without consent of the court if

(a) a proceeding has been commenced to determine whether a person is or is not a beneficiary or intestate successor in respect of the deceased person's estate,

(b) relief is sought under Division 6 [Variation of Wills] of Part 4 [Wills], or

(c) other proceedings have been commenced which may affect the distribution of the estate.

(3) Nothing in this section

(a) affects any right or remedy against a person to whom an estate has been distributed in whole or in part, or

(b) extends any applicable limitation period.

There are two ways to interpret subparagraph (1) (a). One is that the personal representative (executor or administrator) may make a distribution within the 210 day period if all of the beneficiaries consent provided that the will disposes of the entire estate. This is because (or so those holding this interpretation will argue) if the will disposes of the entire estate there are no “intestate successors entitled to the estate.” There are only intestate successors entitled to the estate if there is no will, or if the will does not dispose of all of the estate. This interpretation seems to correspond with the literal meaning of the words, and my sense is that this may be the most popular interpretation (although my handful of conversation is not exactly a scientific survey of lawyers).

I think the above interpretation is wrong, and it is risky for a personal representative to distribute within the 210 days without the consent of all of those who would be entitled to the estate if there were an intestacy, even though there is a will that disposes of the entire estate.  If I am correct—and we won’t know until there is a court decision on point -- then their consent is required in addition to the consent of the beneficiaries.

My interpretation is based on the underlying purpose of section 155 which is to preserve the estate to allow those who wish to make certain claims, most notably claims to vary the will under Part 4, Division 6 of the Wills, Estates and Succession Act, time to do so. If anyone does make a claim to vary the will, the freeze on distribution is extended until the claim is resolved.

This section replaces section 12 of the now repealed Wills Variation Act, and its function is similar. Section 12 of the Wills Variation Act read:

No distribution until 6 months after probate

12  (1) Until 6 months have passed from the issue of probate of the will in British Columbia or the resealing in British Columbia of probate of the will, the executor or trustee must not distribute any portion of the estate to beneficiaries under the will except

(a) with the consent of all persons who would be entitled to apply, or

(b) if authorized by order of the court.

(2) Until the period referred to in subsection (1) has passed, a title passing by devise to a beneficiary must not be registered in a land title office unless under a similar consent or order, except subject to the liability of being charged by an order made under this Act.

The persons entitled to apply under the Wills Estates and Succession Act are the deceased’s spouse (including a common-law spouse), and the deceased’s children. Those are also the persons who would be entitled to a share of the estate if there is an intestacy.

The significance of the 210 day period is that it is the same time period a person claiming the vary a will has to both file a notice of civil claim in court (180 days) and serve it on the personal representative (a further 30 days).

If section 155 is interpreted to mean that only the consent of the beneficiaries are required if the will disposes of the entire estate, then the protection is significantly emasculated. If the will-maker leaves his entire estate to his nieces and nephews, and nothing to his spouse, then it is the spouse who will not want the estate is not distributed before she files her claim to vary the will. The nieces and nephews may be quite content to consent to an early distribution to them. It is no answer to say that the spouse can later pursue the beneficiaries for her share if she is successful in a claim to vary the will. She may, but it could be quite costly if there are many of them, or some live outside of British Columbia, and she may be without any practical recourse if they spend what they receive and have no other significant assets. Why have the provision at all if not to ensure that the estate is available if someone such as a disinherited spouse successfully applies to vary the will.

Furthermore, subsection 155(1) should be read in conjunction with subsection (2), which says that if proceedings are brought that may affect the distribution, including wills variation claims, then the prohibition on distribution is extended, and the personal representative requires the court’s consent to make a distribution. It would be inconsistent to allow the personal representative to distribute within 210 days without the consent of a disinherited spouse or child, or a court order, but then require a court order after that time period if the spouse or child does file a wills variation claim.

The other problem with the interpretation that the personal representative does not have to get consent for an early distribution of those intestate heirs who are not named in the will, is that the personal representative does not really know who is ultimately “entitled  to the estate” until after the time for bringing a claim has passed. If in our example of the disinherited spouse, the spouse does apply to court to vary the will, and is ultimately successful, she will be entitled to a share of the estate by virtue of the court order varying the will. But that will not be determined until well after the personal representative has distributed the estate if he or she has done so within the 210 days after probate.

Section 155 is broader than section 12 of the Wills Variation Act, and is intended to freeze the estate until other potential issues are resolved. For example, a person may seek a court interpretation of a will to determine if he or she is a beneficiary. Or there may be a disagreement about whether a person is a “spouse” as defined by the Wills, Estates and Succession Act.