Spence Estate, Re

• Jurisdiction: Ontario
• Judge: Cronk, Lauwers and van Rensburg, JJ.A.
• Court: Court of Appeal (Ontario)
• Citation: 2016 ONCA 196,(2016), 346 O.A.C. 108 (CA)
• Date: 04 September 2015

Spence Estate, Re (2016), 346 O.A.C. 108 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. MR.016

In the Estate of Rector Emanuel Spence, also known as Eric Spence, deceased

Verolin Spence and A.S. (applicants/respondents) v. BMO Trust Company, Donna Spence, K. S.-P. and K. S.-P. (respondents/appellant)

(C60021; 2016 ONCA 196)

Indexed As: Spence Estate, Re

Ontario Court of Appeal

Cronk, Lauwers and van Rensburg, JJ.A.

March 8, 2016.

Summary:

VS asked the court to set aside her father's will. The deceased's will disinherited her and benefited her sister, DS, and DS' two children. VS claimed that the disinheritance was racially motivated; therefore, the will was void for public policy reasons and should be set aside resulting in an intestacy. An intestacy under the Succession Law Reform Act in Ontario would result in the two sisters sharing the estate equally. The BMO Trust Co., in its capacity as Estate Trustee, opposed VS's request for relief.

The Ontario Superior Court (applications judge), in a decision with neutral citation 2015 ONSC 615, set aside the will on public policy grounds. BMO appealed. At issue was whether it was open to the courts to scrutinize an unambiguous and unequivocal residual bequest in a will, with no discriminatory conditions or stipulations, if a disappointed beneficiary or other third party claimed that the bequest offended public policy. Further at issue was whether third-party extrinsic evidence of the testator's alleged discriminatory motive for making the bequest was admissible on an application to set aside the will on public policy grounds.

The Ontario Court of Appeal allowed the appeal. On the facts of this case, there was no foundation for the public policy-driven review undertaken by the applications judge. The court held that the applications judge erred by going behind the testator's expression of his clear intentions regarding the disposition of his property. The court opined further that the applications judge erred in admitting the extrinsic evidence.

Editor's Note: Certain names in the following case have been initialized or the case otherwise edited to prevent the disclosure of identities where required by law, publication ban, Maritime Law Book's editorial policy or otherwise.

Civil Rights - Topic 8350

Canadian Charter of Rights and Freedoms - Application - Exceptions - Matters of a purely private nature - A beneficiary (VS), who was disinherited under her father's will, sought to have the will declared void on public policy grounds, arguing that the disinheritance was racially motivated - An applications judge agreed - The estate trustee appealed - VS argued that public policy supported the decision under appeal on the basis that equality of the races formed part of the public policy of Canada and cited in support particularly s. 15 of the Charter and s. 1 of the Human Rights Code - The Ontario Court of Appeal opined that the Charter pertained to state action - Neither the Charter or Code reached testamentary dispositions of a private nature - Lauwers, J.A., rejected the argument that because the will was being probated under the Estates Act, the court was a state actor and, therefore, obliged to expand the public policy exception to testamentary freedom in accordance with Charter values - See paragraphs 74 and 124 to 130.

Family Law - Topic 6701

Dependent's relief legislation - Awards - Revision of will re disposition of property - The Ontario Court of Appeal, in discussing testamentary freedom, explained that "... in Ontario there is no statutory duty on a competent testator to provide in her will for an adult, independent child, whether based on an overriding concept of a parent's alleged moral obligation to provide on death for her children or otherwise ... Adult independent children are not entitled to dependant's relief protection under the SLRA [Succession Law Reform Act] because they do not meet the definition of 'dependant' under that statute. Ontario law accords testators the freedom to exclude children who are not dependants from their estate distribution" - See paragraph 37.

Wills - Topic 3

Testamentary instruments - General principles - Testamentary freedom - The Ontario Court of Appeal discussed the principle of testamentary freedom, noting that a testator's freedom to distribute her property as she chose was a deeply entrenched common law principle - See paragraphs 29 to 50.

Wills - Topic 3

Testamentary instruments - General principles - Testamentary freedom - The Ontario Court of Appeal stated that "Notwithstanding the robust nature of the principle of testamentary freedom and its salutary social interest dimensions, the courts have recognized that it is not an absolute right. Apart from limits imposed by legislation, it may also be constrained by public policy considerations in some circumstances" - See paragraphs 38 and 55.

Wills - Topic 3

Testamentary instruments - General principles - Testamentary freedom - [See Civil Rights - Topic 8350 and first and third Wills - Topic 4007 ].

Wills - Topic 4007

Failure of gifts - General - Public policy - The deceased's will provided that "I specifically bequeath nothing to my daughter, [VS] as she has had no communication with me for several years and has shown no interest in me as her father" - VS claimed that the disinheritance was actually racially motivated and, therefore, the will should be declared void on public policy grounds - An applications judge agreed - The estate trustee appealed - The Ontario Court of Appeal allowed the appeal - VS and her son had no legal entitlement to share in the deceased's estate - This was not a wills construction case - The terms of the will were unequivocal and unambiguous - The language of the will imposed no conditions that offended public policy - Neither the residual beneficiaries nor the trustee were required to act in a manner contrary to law or public policy - The court held that in these circumstances a public policy based inquiry regarding the validity of the deceased's will was not available - Judicial interference with the deceased's testamentary freedom was not warranted - The court opined further that even if the will had been facially repugnant in the sense that it disinherited VS for expressly stated discriminatory reasons, the bequest would nonetheless be valid as reflecting a testator's intentional, private disposition of his property (the core aspect of testamentary freedom) - See paragraphs 51 to 87.

Wills - Topic 4007

Failure of gifts - General - Public policy - The applicants sought to set aside a will on public policy grounds - The applicants relied heavily on McCorkill v. McCorkill Estate (NBCA 2015) to argue, in effect, that the courts had overarching authority to examine the validity of a testamentary residual bequest on public policy grounds - On their argument, that authority extended to cases where the terms of the bequest did not include discriminatory conditions but evidence was tendered that a testator's alleged motive in making the bequest offended public policy - The Ontario Court of Appeal stated that it saw no support in the established jurisprudence for the acceptance of such an open-ended invitation to enlarge the scope of the public policy doctrine in estate cases - The court discussed the McCorkill case, stating that it had to be understood in the context of its unique factual circumstances - See paragraph 58.

Wills - Topic 4007

Failure of gifts - General - Public policy - The Ontario Court of Appeal stated that "... to apply the public policy doctrine to void an unconditional and unequivocal testamentary bequest in cases where, as here, a disappointed potential heir has been disinherited absolutely in favour of a different, worthy heir, would effect a material and unwarranted expansion of the public policy doctrine in estates law. Absent valid legislative provision to the contrary, or legally offensive conditional terms in the will itself, the desire to guard against a testator's unsavoury or distasteful testamentary dispositions cannot be allowed to overtake testamentary freedom. The need for a robust application of the principle of testamentary freedom is especially important, in my opinion, in the context of a testator's central right to choose his or her residual beneficiaries" - See paragraph 85.

Wills - Topic 4007

Failure of gifts - General - Public policy - [See Civil Rights - Topic 8350 ].

Wills - Topic 8546

Evidence and proof - Extrinsic evidence - Of intention of testator - The deceased's will provided that "I specifically bequeath nothing to my daughter, [V] as she has had no communication with me for several years and has shown no interest in me as her father" - V sought to have the will declared void for public policy reasons, arguing that the disinheritance was racially motivated - Based on extrinsic evidence and contrary to the plain language of the will, the applications judge set aside the will on public policy grounds - The estate trustee appealed - The Ontario Court of Appeal allowed the appeal, holding that the applications judge erred in embarking on the public policy inquiry in the circumstances of this case - The court opined further that the applications judge erred in admitting the extrinsic evidence - See paragraphs 88 to 112.

Wills - Topic 8546

Evidence and proof - Extrinsic evidence - Of intention of testator - The Ontario Court of Appeal stated that, as a general rule, extrinsic evidence of a testator's intentions was not admissible when the testator's will was clear and unambiguous on its face - The court noted, however, that there were exceptions to the general rule relating to construction of a will: (1) direct extrinsic evidence of intention might be admissible where a will was equivocal, i.e., where the words used in the will might be read as applying equally to two or more persons or things; and (2) evidence of the testator's circumstances or the circumstances surrounding the formation of a will might also be admissible in cases where the will was or might be ambiguous - See paragraphs 90 to 93.

Wills - Topic 8546

Evidence and proof - Extrinsic evidence - Of intention of testator - A beneficiary (VS), who was disinherited under her father's will, sought to have the will declared void on public policy grounds, arguing that the disinheritance was racially motivated - VS argued that extrinsic evidence was admissible in this case because the extrinsic evidence concerned her relationship with her father and his reasons for making his testamentary dispositions of his property, rather than what testamentary dispositions he intended to make - Precisely because it was not evidence of the testator's intentions, but rather the testator's motives, VS argued that the other jurisprudence respecting "intention" was irrelevant - VS contended that there was no bar to the admission of extrinsic evidence of motive seeking to establish that a testator's reason for a testamentary bequest offended public policy, e.g., where the proffered extrinsic evidence indicated that the testator's motive was racially-motivated - The Ontario Court of Appeal opined that that proposition had to be soundly rejected - See paragraphs 95 to 112.

Cases Noticed:

Robinson Estate, Re (2011), 282 O.A.C. 189; 2011 ONCA 493, leave to appeal refused (2012), 433 N.R. 393 (S.C.C.), refd to. [para. 27].

Rondel v. Robinson Estate - see Robinson Estate, Re.

Leonard Foundation Trust, Re (1990), 37 O.A.C. 191; 74 O.R.(2d) 481; 1990 CarswellOnt 486 (C.A.), refd to. [para. 30].

Canada Trust Co. v. Ontario - see Leonard Foundation Trust, Re.

Blathwayt v. Lord Crawley, [1976] A.C. 397; [1975] 3 All E.R. 625; [1975] 3 W.L.R. 684; 119 Sol J. 795 (H.L.), refd to. [para. 30].

Tataryn et al. v. Tataryn Estate, [1994] 2 S.C.R. 807; 169 N.R. 60; 46 B.C.A.C. 255; 75 W.A.C. 255, refd to. [para. 31].

Verch et al. v. Weckwerth et al., 2013 ONSC 3018 (Sup. Ct.), affd. [2014] O.A.C. Uned. 298; 2014 ONCA 338, refd to. [para. 37].

Millar Estate, Re, [1938] S.C.R. 1, refd to. [para. 41].

Thorne, Re (1922), 22 O.W.N. 28 (H.C.), refd to. [para. 55, footnote 4].

Murley Estate, Re (1995), 130 Nfld. & P.E.I.R. 271; 405 A.P.R. 271 (Nfld. T.D.), refd to. [para. 55, footnote 5].

University of Victoria v. British Columbia (Attorney General) et al., [2000] B.C.T.C. 155; 185 D.L.R.(4th) 182; 2000 CarswellBC 529; 2000 BCSC 445, refd to. [para. 55, footnote 5].

Ramsden Estate, Re (1996), 145 Nfld. & P.E.I.R. 156; 453 A.P.R. 156; 139 D.L.R.(4th) 746 (P.E.I.T.D.), refd to. [para. 55, footnote 5].

Elliot, Re, [1952] Ch. 217, refd to. [para. 55, footnote 6].

McCorkill v. McCorkill Estate (2014), 424 N.B.R.(2d) 21; 1104 A.P.R. 21; 2014 NBQB 148, affd. (2015), 438 N.B.R.(2d) 395; 1141 A.P.R. 395; 2015 NBCA 50, dist. [para. 58].

Peach Estate, Re (2009), 287 N.S.R.(2d) 186; 912 A.P.R. 186; 2009 NSSC 383, refd to. [para. 69].

Fox v. Fox (1996), 88 O.A.C. 201; 28 O.R.(3d) 496 (C.A.), dist. [para. 76].

Robinson Estate, Re, [2010] O.T.C. Uned. 3484; 2010 ONSC 3584 (Sup. Ct.), refd to. [para. 90].

Thorsnes v. Ortigoza (2003), 174 Man.R.(2d) 274; 2003 MBQB 127, refd to. [para. 111].

McDougald Estate, Re (2005), 199 O.A.C. 203; 255 D.L.R.(4th) 435 (C.A.), refd to. [para. 116].

Dolphin Delivery Ltd. v. Retail, Wholesale and Department Store Union, Local 580, Peterson and Alexander, [1986] 2 S.C.R. 573; 71 N.R. 83, refd to. [para. 125].

Otis v. Otis, [2004] O.J. No. 1732 (Sup. Ct.), refd to. [para. 129].

Counsel:

Justin W. de Vries and Angela Casey, for the appellant;

Earl A. Cherniak, Q.C., Jasmine T. Akbarali and Michael S. Deverett, for the respondents.

This appeal was heard on September 4, 2015, before Cronk, Lauwers and van Rensburg, JJ.A., of the Ontario Court of Appeal. The decision of the court was delivered on March 8, 2016, including the following opinions:

Cronk, J.A. (van Rensburg, J.A., concurring) - see paragraphs 1 to 116;

Lauwers, J.A., concurring reasons - See paragraphs 117 to 130.