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Misdescription of a RRIF – Application of Falsa Demonstratio Principle

1. Introduction

It happens often enough that a testator misdescribes property or a person in her will. And the court then has to interpret the will. Sometimes, the court can call a principle of interpretation in aid that has been around for a long time but only makes an occasional appearance. This is the principle known as falsa demonstratio non  nocet, cum de corpora (or persona) constat. It allows the court to reject part of a description of an object or a subject if part of the description is true, but another part is false. The court can then disregard the false part provided that the true part describes the subject or object with sufficient certainty.[1] The principle was used effectively in Hayduk v Gudz.[2]

2. Facts

Jean Hayduk died in 2021. She left a will made in 2012. In it she directed the transfer the balance of her ‘Nesbitt Burns Registered Retirement Income Fund (RRIF) Account at the Bank of Montreal, 1st Canadian Place, Level B1, Toronto Ontario M5X 1H3, being Account No.  22509547’ into a separate testamentary trust for the sole benefit of her great granddaughter, Paige Robillard. for life. Jean did have an RRIF with the Bank of Montreal, but it was not a Nesbitt Burns fund, and it had a different account number. Further, in 2008, before she made her will, she gave a direction to the Bank of Montreal in which she designated her daughter, Carol Gudz, as the  beneficiary of her RRIF. The will named her daughter, Barbara Hayduk, her executor. The will did not explicitly revoke or otherwise refer to the 2008 direction. Barbara brought an application for a determination whether the disposition of the RIFF was valid. In support of the application Barbara filed an affidavit in which she stated that Jean rolled over the contents of her BMO Investorline Registered Retirement Savings Plan (account number 226-01680-14) into a new RRIF account (number 227-00272-18) in 2000. Further, the account number mentioned in her gift to Paige was the number of another BMO account that Jean closed in July 2012, a month before she made her will.

3. Application

Justice Gomery described the principles a court must apply in circumstances such as these. She described the falsa demonstratio principle and noted that the court can consider extrinsic evidence about the testator’s assets when she executed her will,[3] for the court can sit in the testator’s armchair to construe the will to determine the testator’s intention. She rightly cited Re Beauchamp[4] as authority for this proposition.

Her Honour concluded that Jean must have confused the bank account numbers when she made her will, since the account mentioned in the will was not associated with a RRIF or RRSP account. Further, there was no evidence that Jean owned any other RRIF apart from account number 227-00272-18 at the Bank of Montreal. And she never had any account with Nesbitt Burns.

Therefore, she concluded that Jean intended to create the testamentary trust in Paige’s favour using the funds in the only RRIF she owned at the Bank of Montreal. She relied on the evidence of Barbara and held that the falsa demonstratio principle applied. The object was described with sufficient certainty that the court, Barbara, and the Bank could identify it. Hence, the reference to Nesbitt Burns and the incorrect account number could be disregarded.

But that was not the end of the story, for Jean had made two beneficiary designation: the 2008 designation in favour of Carol and the new one in her will. Which one should prevail? To answer that question, her Honour considered ss. 51 and 52 of the Succession Law Reform Act.[5] Section 51 deals with beneficiary designations made by instrument or by will. It was not relevant, but section 52 was. Section 52(1) provides that a revocation in a will is apt to revoke a designation made by instrument only if the revocation relates expressly to the designation. Her Honour considered two earlier cases, Laczova Estate v Madonna House[6] and Alger v Crumb,[7] which spoke of the effect of section 52(1).[8] However, she concluded that she did not have to determine whether Jean satisfied the requirements of s. 52(1), since s. 52(2) applied. It provides, ‘a later designation revokes an earlier designation, to the extent of any inconsistency’. The two designations (the first in favour of her daughter Carol, and the second in favour of her great granddaughter Paige) were inconsistent. While both designations satisfied the requirements of making beneficiary designations, the later one in favour of Paige (which Jean described in great detail) revoked the earlier one in favour of Carol by the operation of s. 52(2).

In passing, I note that while the will did contain a revocation clause, it only revoked ‘all former Wills and codicils heretofore made’. Thus it did not expressly revoke other prior testamentary dispositions, such as beneficiary designations. In that respect the will differed from the cases discussed in my earlier blog.

[1]    The principle is discussed in Oosterhoff on Wills, 9th ed by Albert H Oosterhoff, C David Freedman. Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters, 2021), §13.7.4

[2]    2022 ONSC 2249.

[3]    And presumably also extrinsic evidence about the persons known to the testator at the time she made the will if there was a misdescription of persons.

[4]    1975 CarswellOnt 538, 56 DLR 3d 644 (HC).

[5]    RSO 1990, c S.26.

[6]    2001 CarswellOnt 4438, 207 DLR 4th 341 (CA).

[7]    2021 ONSC 6076.

[8]    See my blog, ‘Effect of a Will’s Revocation Clause on Beneficiary Designations’,  https://welpartners.com/blog/2022/01/effect-of-a-wills-revocation-clause-on-beneficiary-designations/, which considered those cases.

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