Rufenack v. Hope Mission et al., (2006) 384 A.R. 64 (CA)

• Judge: Russell, Picard and Costigan, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: February 07, 2006
• Citations: (2006), 384 A.R. 64 (CA);2006 ABCA 60

Rufenack v. Hope Mission (2006), 384 A.R. 64 (CA);

    367 W.A.C. 64

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. FE.097

Harold Rufenack and Lynne Rufenack (appellants/respondents by cross-appeal/applicants) v. Hope Mission, Slavic Gospel Association Inc., Far East Broadcasting Associates of Canada, Whitefields Missionary Society, RBC Ministries and Walter Gnida (respondents/applicants by cross-appeal/respondents) and The Attorney General of Alberta (respondent/not a party to the cross-appeal) and The Canada Trust Company (respondent/respondent by cross-appeal) and Beulah Alliance Church, Billy Graham Evangelistic Association, Camp Nakamun, Canadian Bible Society, Gideon's International in Canada, Gospel Missionary Union of Canada (also known as Avant Ministries Canada)

(respondents/appellants by cross-appeal/respondents)

(0303-0212-AC; 2006 ABCA 60)

Indexed As: Rufenack v. Hope Mission et al.

Alberta Court of Appeal

Russell, Picard and Costigan, JJ.A.

February 7, 2006.

Summary:

McRae died at the age of 80. In her last will, she left her entire estate to two friends, the Rufenacks. A previous personal representative, Gnida, filed a Notice of Objection challenging the will. Murray, J., struck out Gnida's Notice of Objection and gave Gnida until July 31, 2000 to take steps to probate the earlier will. Murray, J., ordered Gnida to pay costs to the estate. The Rufenacks applied for a determination of whether McRae had testamentary capacity when she made the last will and whether she had revoked the earlier will; if McRae had testamentary capacity when she made the last will should the court impose a trust on the executors in favour of some or all of the charities; and if McRae did not have testamentary capacity when she made the last will, did she have testamentary capacity when she made the earlier will.

The Alberta Surrogate Court, in a decision reported at 328 A.R. 148, held that McRae had testamentary capacity at the time she executed the last will and she had revoked the earlier will. Further, McRae intended to create a secret trust which would benefit various charities, she communicated her intention to the Rufenacks and they accepted to act as trustees in that regard, and she intended that the Rufenacks have discretion as to how to carry out her charitable intent. The court awarded costs on a solicitor-client basis to all parties because the "mess" was caused by McRae, there had been success all around, and the litigation was a legitimate matter for the court. The costs awarded to Gnida effected a reversal of the costs award made by Murray, J. The Rufenacks appealed the finding of a secret trust and certain aspects of the costs award. The respondent charities cross-appealed the finding that the Rufenacks had discretion to choose the charities that would benefit from the estate. Before the appeal on the merits was heard, two interlocutory appeals were brought by charities and potential beneficiaries under the will. The first resulted in charities being added as parties. See [2005] A.R. Uned. 46. The second resulted in the Rufenacks being removed as executors for the purposes of the main appeal. See [2005] A.R. Uned. 48. The charities sought costs on a solicitor client basis. The Rufenacks also sought costs.

The Alberta Court of Appeal, in a decision reported at 367 A.R. 145; 346 W.A.C. 145, awarded solicitor client costs to the charities in the interlocutory proceedings, payable out of the estate. The court denied the Rufenacks' request for costs.

The Alberta Court of Appeal held that the trial judge lacked jurisdiction to award costs to Gnida to the extent that his award varied Murray, J.'s, previous award that he pay costs to the estate. The court dismissed the remainder of the appeal and the cross-appeal. The court restored the Rufenacks as executors in order to give effect to McRae's intention that they distribute the estate to charities.

Practice - Topic 7455

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Estates - McRae died at the age of 80 - In her last will, she left her entire estate to two friends, the Rufenacks - A trial judge held that McRae had testamentary capacity at the time she executed the last will and she had revoked the earlier will - Further, McRae had intended to create a secret trust which would benefit various charities, she communicated her intention to the Rufenacks and they accepted to act as trustees in that regard, and she intended that the Rufenacks have discretion as to how to carry out her charitable intent - The court awarded costs on a solicitor-client basis to all parties because the "mess" was caused by McRae, there had been success all around, and the litigation was a legitimate matter for the court - The Alberta Court of Appeal held that it was not an error in principle to award solicitor-client costs payable from the estate when the litigation was made necessary by the testator's conduct and, on the facts of this case, each charity was entitled to separate representation - See paragraph 24.

Trusts - Topic 1527

Secret trusts - Creation of secret trust - What constitutes a secret trust - McRae died at the age of 80 leaving a substantial estate - Her two friends, the Rufenacks, were the sole beneficiaries under her will - A trial judge held that McRae intended to create a secret trust which would benefit various charities, she communicated her intention to the Rufenacks and they accepted to act as trustees in that regard - McRae also intended that the Rufenacks have discretion as to how to carry out her charitable intent - McRae understood that she was taking a leap of faith in naming the Rufenacks as beneficiaries, since if they changed their minds there would be no way they would be legally required to benefit the charities - This was consistent with McRae's character, which was to trust individuals completely or not at all - The Alberta Court of Appeal upheld the decision.

Wills - Topic 3506

Charitable gifts - General - General or paramount charitable purpose - [See Trusts - Topic 1527 ].

Cases Noticed:

Milsom v. Canas-Prats Estate et al., [2001] B.C.T.C. 868; 40 E.T.R.(2d) 77; 2001 BCSC 868, refd to. [para. 12].

Milsom v. Holien - see Milsom v. Canas-Prats Estate et al.

Housen v. Nickolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577; 2002 SCC 33, refd to. [para. 20].

Deans et al. v. Thachuk, et al. (2005), 376 A.R. 326; 360 W.A.C. 326; 48 C.C.C.B. 65; 2005 ABCA 368, refd to. [para. 20].

Paper Machine Ltd. v. Ross Engineering Corp., [1934] S.C.R. 186, refd to. [para. 23].

Counsel:

B.G. Doherty, for the appellants/respondents by cross-appeal;

J.H. Odishaw and D. Sanchez-Glowicki, for the respondents/appellants by cross-appeal;

D.W. Kinloch, for the respondent/not a party to the cross-appeal;

P.J. Renaud, Q.C. (no appearance), for the respondent/respondent by cross-appeal.

This appeal and cross-appeal were heard Russell, Picard and Costigan, JJ.A., of the Alberta Court of Appeal, on February 7, 2006. On the same date, Costigan, J.A., delivered the following memorandum of judgment from the bench for the court.