Disputes over a will’s provisions can arise when family members have concerns as to the testator’s capacity at the time of drafting, or where they have concerns regarding undue influence or coercion. Disputes over an estate can also arise where there are issues with interpreting the meaning or intention behind a provision in the will. When these types of cases are presented before a court, the judge must determine the testator’s actual or subjective intention behind the provision in question.
A recent Ontario Court of Appeal case, Ross v. Canada Trust Company, explored will interpretation, and more specifically, a key principle in will interpretation: the “armchair rule.” The issue on this appeal was the interpretation of the provisions in a will written in 1968 regarding the disposition of a testator’s cottage property. The property had been sold by the estate trustee, The Canada Trust Company. The testator’s four surviving grandchildren, the beneficiaries of the proceeds of the property, disagreed as to how the will directed the profits of the sale to be distributed.
$1.138 Million in Trust Money at the Heart of a Will Dispute
The cottage property in question is located on Lake Rosseau and was the family’s principal gathering place. After the testator’s death in 1971, the will indicated that her two daughters would be given life interests in property. However, in 2002 one daughter died unmarried and without children. The other sister was subsequently unable to meet the financial burden of maintaining the cottage property on her own. As such, Canada Trust, the appointed estate trustee, obtained an order permitting the sale of the property, following which it was sold. The net proceeds of approximately $1.66 million, were held in trust for the beneficiaries.
After the second sister’s death in 2015, her life interest in the property ended, leaving some $1.138 million in the trust for distribution. Following an apparent logic, Canada Trust anticipated distributing the sale proceeds in equal shares to the four surviving grandchildren. One of the grandchildren had died unexpectedly in 1992.
One grandchild, G, objected to the equal distribution. When G’s sister died intestate, his parents had been made the beneficiaries of her estate. Upon his mother’s death, she left her entire estate to G alone. As a result, he felt he was entitled to his own share of the proceeds, as well as the share that would have gone to his late sister. This would mean that he would receive 40 percent of the proceeds, almost double that of his other siblings. Canada Trust moved before the court to interpret the relevant provisions of the grandmother’s will.
The case was heard before a motion judge who resorted to the “armchair rule” in interpreting the will due to a patent inconsistency in the interpretation of a number of clauses. The grandchild appealed, submitting that the motion judge erred in finding the clauses inconsistent in addition to using the “armchair rule” in interpreting the will. However, the Court of Appeal rejected the appeal, agreeing with the motion judge’s findings.
Governing Principles in Will Interpretation and the “Armchair Rule”
When there is ambiguity in the terms of a will, courts must interpret the terms in question in an attempt to reveal the subjective intent of the testator. The modern Canadian approach, notes Brown J.A. writing for the court, was described in the 1959 decision Burke (Re).
“Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed […] He must give due weight to those circumstances […]. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator.”
This description refers to the “armchair rule,” which requires the court to place itself in the position of the testator at the point when the will was made, taking into consideration surrounding facts and circumstances. The court will examine the language of the will with the knowledge the testator would have had at the time with respect to “the nature and extent of her assets, the makeup of her family, and her relationship to its members”. Brown J.A. noted that in the past, courts have often resorted to the “armchair rule” only where the testator’s intention was unable to be established from the “plain meaning of the will’s language.”
The Use of the Armchair Rule is Becoming More Common in Will Interpretation Cases
The reluctance of courts to use this governing principle when interpreting a will has more recently been relaxed. Courts have started treating the “armchair rule” as a larger governing framework in will interpretation. As such, courts are more willing to use the “armchair rule” in a wider number of will interpretation cases, even where the words, themselves, are not particularly ambiguous or unclear. With this in mind, the Ontario Court of Appeal upheld the motion judge’s ruling, clarifying that, indeed, a rule that was once only used in specific circumstances has found acceptance as an over-arching principle in will interpretation.
In the case at hand, the motion judge found, using the armchair rule, that the grandmother had intended that “the beneficiaries of the trust of the Cottage Property’s sale proceeds to be her grandchildren alive at the end of her daughters’ life interests”. As such, the estate trustee was ordered to distribute the funds in equal shares to the four surviving grandchildren. The Court of Appeal found no errors in the motion judge’s reasoning and dismissed the appeal.
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This case highlights the importance of clear and concise language when drafting a will, to avoid costly litigation among the eventual beneficiaries. Tierney Stauffer LLP uses a client-focused approach and provides innovative guidance through the estate planning and administration processes. Our lawyers provide practical and honest advice to clients and represent their interests in all levels of court in addition to other forums. We have extensive experience working with clients in estate planning matters and representing them in litigation should it become necessary. Call us at 1-888-799-8057 or contact us online to set up a consultation with a member of our team.