Bank of Nova Scotia Trust Co. v. Forbes et al., 2007 MBQB 101

• Judge: Duval, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: May 02, 2007
• Jurisdiction: Manitoba
• Citations: 2007 MBQB 101;(2007), 216 Man.R.(2d) 156 (QB)

BNS Trust v. Forbes (2007), 216 Man.R.(2d) 156 (QB)

MLB headnote and full text

Temp. Cite: [2007] Man.R.(2d) TBEd. MY.045

In The Matter Of: The Last Will and Testament of Agnes Johnson;

And In The Matter Of: The Trustee Act, R.S.M. 1987, c. T-160

The Bank of Nova Scotia Trust Company, as Administrator of the Estate of Agnes Johnson, deceased (applicant) v. Lewis John Forbes, Isabel May Habing, Margaret Louise Huzel, The Estate of Earle Johnson, Vance Sidney Johnson and Gail Elaine Rykman (respondents)

(PR 04-01-66298; 2007 MBQB 101)

Indexed As: Bank of Nova Scotia Trust Co. v. Forbes et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Duval, J.

May 2, 2007.

Summary:

Co-executors were unable to agree as to the administration of their mother's estate. The estate administrator applied for advice and direction from the court, including whether substantial assets (mutual funds and Manitoba Telecom Services Inc. shares) were a specific bequest to the testator's children or part of the estate's residue and the distribution of items of personalty. Asserting that the application was unnecessary, the testator's daughter submitted that the estate should not be responsible for the administrator's costs.

The Manitoba Court of Queen's Bench determined the issues accordingly. The administrator was entitled to its costs payable by the estate.

Executors and Administrators - Topic 5548

Actions by and against representatives - Costs - Where payable out of estate - Co-executors were unable to agree as to the administration of their mother's estate - The estate administrator applied for direction from the court - Asserting that the application was unnecessary, the testator's daughter submitted that the estate should not be responsible for the administrator's costs - The daughter argued that the administrator should have interpreted the will and, thereafter, advised any parties opposed to the interpretation of their option to initiate a court application - This might have resulted in no application being taken and no costs being incurred - The Manitoba Court of Queen's Bench held that the administrator was entitled to its costs payable by the estate - The question of whether substantial assets (mutual funds and Manitoba Telecom Services Inc. shares) were a specific bequest to the testator's children or part of the estate's residue was a matter for which the administrator reasonably sought the court's advice - The additional issues relating to personalty could have been decided without the court's assistance, but the proceedings, which led to the parties' consensus, had achieved a better result for all - See paragraphs 54 to 71.

Practice - Topic 7032.1

Costs - Party and party costs - Entitlement to - Estate matters - [See Executors and Administrators - Topic 5548 ].

Wills - Topic 5000

Construction - General - General principles - Ascertainment of intention of testator - [See both Wills - Topic 5183 ].

Wills - Topic 5183

Construction - General - Evidence and proof - Intention of testator - Earle and Agnes Johnson married in 1985 - Both had children from first marriages - In 1998, both signed wills - Earle's will bequeathed "bank accounts, term deposits, bonds and other monies" in equal shares to Agnes and his children - Agnes' will bequeathed the same type of assets to her children solely - The residue was to be divided equally between her children and Earle's children - Agnes suffered a stroke in August 1998 - Earle died in June 2003 - In August 2003, Agnes, with her daughter's assistance, purchased mutual funds - Agnes died in 2004 - At issue was whether the mutual funds were to be distributed solely to Agnes' children or as part of the residue - The Manitoba Court of Queen's Bench concluded that the mutual funds constituted a bequest to Agnes' children - After the stroke, Agnes was unable to make financial management decisions - Her intention when she made her will was the relevant consideration - The difference between the two wills was evidence of Agnes' intention that the majority of her estate would pass to her children - The term "other monies" was intended to include any and all of her investments or monies - Applying a liberal interpretation, the mutual funds were included in the words "other monies" - See paragraphs 29 to 44.

Wills - Topic 5183

Construction - General - Evidence and proof - Intention of testator - Earle and Agnes Johnson married in 1985 - Both had children from first marriages - In 1996, both purchased shares of Manitoba Telecom Services Inc. (MTS) - In 1998, both signed wills - Earle's will bequeathed "bank accounts, term deposits, bonds and other monies" in equal shares to Agnes and his children - Agnes' will bequeathed the same type of assets to her children solely - The residue was to be divided equally between her children and Earle's children - Agnes suffered a stroke in August 1998, after which she was not mentally competent to manage her financial affairs - Earle died in June 2003 - As part of the probate of Earle's estate, Earle's MTS shares were transferred to Agnes - Agnes died in 2004 - At issue was whether the MTS shares were "other monies" or formed part of the residue of Agnes' estate - The Manitoba Court of Queen's Bench held that the MTS shares formed part of the residue of Agnes' estate - Agnes' will did not refer specifically to the shares despite her knowledge of their existence when she made her will - The transfer of Earle's shares to Agnes led to the reasonable inference that Earle's executor concluded that the shares were not "other monies" - It was fair and just that the same interpretation applied to Agnes' will - See paragraphs 45 to 50.

Wills - Topic 7683

Construction - Quantity of interest taken - Residue - What constitutes residue - [See both Wills - Topic 5183 ].

Wills - Topic 8546

Evidence and proof - Extrinsic evidence - Of intention of testator - Co-executors were unable to agree as to the administration of their mother's estate - On the estate administrator's application for advice and direction from the court, the children of the testator's husband suggested that the court should draw a negative inference from the failure of the solicitor who prepared the testator's will, the testator's son-in-law, to provide an affidavit as to her instructions for its preparation - The testator's children submitted that such instructions were not admissible to provide direct extrinsic evidence of a testator's intention as per Tucker Estate, Re (Man. C.A.) - The Manitoba Court of Queen's Bench refused to draw a negative inference from the solicitor's failure to provide an affidavit as to his instructions - Though the strict rule of inadmissibility had been the subject of considerable judicial comment, the court was bound by Tucker Estate, Re - See paragraphs 20 to 28.

Words and Phrases

Other monies - In the context of an estate administrator's application for advice and direction regarding the construction of a will, the Manitoba Court of Queen's Bench held that the testator intended the term "other monies" to include any and all of her investments or monies, including mutual funds - See paragraphs 32 to 50.

Cases Noticed:

Christensen and Nadon v. Martini, [1999] 10 W.W.R. 417; 232 A.R. 339; 195 W.A.C. 339; 48 R.F.L.(4th) 406; 27 E.T.R.(2d) 234; 172 D.L.R.(4th) 367; 70 Alta. L.R.(3d) 78; 1999 ABCA 111, refd to. [para. 21].

Public Trustee (Alta.) v. Christensen - see Christensen and Nadon v. Martini.

Marks v. Marks (1908), 40 S.C.R. 210, refd to. [para. 22].

Diver Estate, Re (1962), 39 W.W.R.(N.S.) 612 (Alta. C.A.), refd to. [para. 24].

Burke, Re, [1960] O.R. 26; 20 D.L.R.(2d) 396 (C.A.), refd to. [para. 24].

Smith Estate, Re (1953), 9 W.W.R.(N.S.) 173 (B.C.C.A.), refd to. [para. 24].

Raiter, Re (1979), 99 D.L.R.(3d) 183; 24 O.R.(2d) 603 (H.C.), refd to. [para. 24].

Tucker Estate, Re, [1994] 2 W.W.R. 1; 92 Man.R.(2d) 41; 61 W.A.C. 41 (C.A.), folld. [para. 27].

Faucher v. Tucker Estate - see Tucker Estate, Re.

Daniels v. Daniels Estate et al. (1991), 120 A.R. 17; 8 W.A.C. 17 (C.A.), refd to. [para. 27].

Perrin v. Morgan, [1943] A.C. 399, refd to. [para. 32].

Townley, Re (1884), 53 L.J. Ch. 516, refd to. [para. 33].

Bangs Estate, Re; Royal Trust Co. and Bangs v. Bangs et al. (1962), 39 W.W.R.(N.S.) 623, refd to. [para. 34].

Barnes's Will Trusts, Re; Prior v. Barnes, [1972] 2 All E.R. 639, refd to. [para. 38].

Brooks, Re (1969), 4 D.L.R.(3d) 694 (Sask. Q.B.), refd to. [para. 38].

Chapman, Re; Freeman v. Parker (1895), 72 L.T. 66 (C.A.), refd to. [para. 61].

Fulford, Re (1913), 29 O.L.R. 375 (H.C.), refd to. [para. 62].

Wright, Re (1977), 74 D.L.R.(3d) 504 (Ont. H.C.), refd to. [para. 62].

Collins, Re (1927), 61 O.L.R. 225 (H.C.), refd to. [para. 63].

King, Re (1970), 15 D.L.R.(3d) 285 (Ont. C.A.), refd to. [para. 64].

Wood Estate, Re, [1977] 2 W.W.R. 538 (Sask. Surr. Ct.), refd to. [para. 64].

Public Trustee (Ont.) v. Mortimer et al. (1985), 18 E.T.R. 219 (Ont. H.C.), refd to. [para. 65].

Gould v. Burritt, [1865] 11 Gr. 523 (U.C. Ch.), refd to. [para. 65].

McClenaghan v. Perkins (1903), 5 O.L.R. 129 (C.A.), refd to. [para. 65].

Fales et al. v. Canada Permanent Trust Co., [1977] 2 S.C.R. 302; 11 N.R. 487; 70 D.L.R.(3d) 257, refd to. [para. 67].

Fales v. Wohlleben Estate - see Fales et al. v. Canada Permanent Trust Co.

Authors and Works Noticed:

Feeney, Thomas G., The Canadian Law of Wills (4th Ed. 2000) (Looseleaf Update), pp. 11.22, § 11.54 [para. 23]; 11.25, § 11.63 [para. 22]; 11.33, § 11.84 [para. 27]; §§ 10.1 [para. 20]; 11.165 [para. 35].

Halsbury's Laws of England (1998) (4th Ed. - Reissue), vol. 50, p. 332, para. 462 [para. 20].

Sherrin, C.H., Barlow, R.F.D., and Wallington, R.A., Williams' Law Relating to Wills (7th Ed. 1995), c. 59, pp. 595, 596 [para. 36]; 631, 632 [para. 37]; 640 [para. 39].

Widdifield on Executors and Trustees (6th Ed. 2002) (2006 Looseleaf Update), generally [para. 65]; pp. 4-8.1, 4-8.2, 4-9 [para. 68]; 11-5 [para. 64]; 12-2 [para. 66]; 12-4, para. 12.3.3 [para. 67].

Counsel:

Gwen B. Hatch, for the applicant;

Ralph D. Neuman, for the respondents, Vance Sidney Johnson and Gail Elaine Rykman;

Michael J. Clark, for the respondent, Margaret Louise Huzel;

Gene Zazelenchuk, for the respondent, Isabel May Habing.

This application was heard by Duval, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on May 2, 2007.