In VanSickle Estate v. VanSickle, 2022 ONCA 643, https://canlii.ca/t/jrxz2 the Court of Appeal reviewed an application for directions in the interpretation of a will and granted the appeal due to an extricable error of law in applying the presumption that a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to the property of the testator, as set out in s. 22 of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (“SLRA”).[1]
Background
The testator and her late husband owned and operated a 66.54 acre hobby farm as a secondary source of income.[2] The testator passed away at the age of 95 and she was survived by 6 children.[3] The testator had prepared a will in 1985 which provided the eldest son with an option to purchase “the farming business carried on by me” for $85,300.[4] Four of the other children argued that the testator had ceased carrying on the farming business therefore the option to purchase the farm had lapsed, and the farm should fall into the residue of the estate.[5]
The relevant clause of the will provided:
If my [eldest son], shall be living at the time of my death, my Trustees shall sell the farming business carried on by me at [Brantford, Ontario], to my [eldest son], as soon as convenient for the price of $85,300.00 or such lower price to be agreed upon by my Trustees and my son, having regard to the assessed value of the lands included hereby at the time of my death and the assistance given me by my son in the conduct of the farming business … And I desire that for the purpose of this clause the expression of my farming business shall include all assets, stock, plant, liabilities, in connection therewith on the other and it shall include the estate in fee simple of the farm…[6]
Although all the children had helped with the farm growing up, the four youngest had moved away and were not involved with the farm.[7] The testator intended to benefit the eldest son differently because of his lifelong commitment to the operation of the farm.[8] However, it was not known whether the testator had considered the increased value of the farm since 1985, which resulted in a much bigger gap between her provision for the eldest son and “the rest of the children than would have been the case in 1985”.[9] In other words, the farm was now more valuable.
Application Judge’s Decision
At first instance, the application judge agreed with the four children that the “farming business” had ceased.[10] The application judge concluded that the “business” referred to an active farming business carried on before the making of the will, and to construe “business” to mean the bare rental of farmland would be inconsistent with the qualifying phrase “carried on by me”.[11]
Standard of Review
The standard of review of an application judge’s interpretation of a will is the same as that of a contract.[12] The “findings of an application judge in interpreting the will in light of all the surrounding circumstances to determine the subjective intentions of the testator that it conveys, are findings of mixed fact and law entitled to appellate deference, absent an extricable error of law or palpable and overriding error”.[13]
Extricable Error of Law
The Court of Appeal held that the application judge made an extricable error of law in failing to apply the presumption set out in s. 22 of the SLRA which states:
Will to speak from death
22 Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to,
(a) the property of the testator; and
(b) the right, chose in action, equitable estate or interest, right to insurance proceeds or compensation, or mortgage, charge or other security interest of the testator under subsection 20 (2). R.S.O. 1990, c. S.26, s. 22.[14]
Pursuant to s. 22 of the SLRA, the starting point for the interpretation of the will was to ask whether the testator was carrying on a farm business at the time of her death.[15] The Court of Appeal considered the evidence that the testator owned the farmland, did not leave it unproductive, leased it out to be farmed on a commercial basis, received income, and declared that income on her taxes as farm income.[16] On a reading of these facts, the testator was found to be carrying on a farm business at the time of her death.[17]
The next question was whether anything in the will displaced the presumption that the will speaks at the time of death, and instead supported the proposition that the testator only intended for the option to purchase be exercisable if she had a direct role in the farm business – “either tending the fields herself or directly managing the labour of others”.[18]
The Court of Appeal held that there was nothing in the phrase “the farming business carried on by me” that pointed unambiguously to the business carried on in 1985 over the business carried on in 2019.[19] There was also no evidence in the surrounding circumstances to suggest that the testator’s intention was to provide the eldest son with an option to purchase the farm “so that he could continue farming it, but only if she was still involved in the day-to-day operations”.[20] The Court of Appeal further noted that the will contained a clause that defined the term “farming business” as including “all assets, stock, plant, liabilities, in connection there with on the other (sic) and it shall include the estate in fee simple of the farm.”[21]
Although it could be wondered whether the testator intended to benefit the eldest son quite as much as she did, the testator did intend to benefit the eldest son differently.[22] The Court of Appeal held:
“…despite the passage of 34 years, the testator never chose to amend her will. The task of this court is simply to determine whether the option to purchase is valid and was validly exercised. It is and it was.”[23]
—
[1] VanSickle Estate v. VanSickle, 2022 ONCA 643 at paras 1, 2, and 9 (“VanSickle Estate”).
[2] VanSickle Estate at para 3.
[3] VanSickle Estate at para 3.
[4] VanSickle Estate at paras 1, 4, and 6.
[5] VanSickle Estate at para 1.
[6] VanSickle Estate at para 6.
[7] VanSickle Estate at para 4.
[8] VanSickle Estate at para 13.
[9] VanSickle Estate at para 13.
[10] VanSickle Estate at para 2.
[11] VanSickle Estate at para 7.
[12] VanSickle Estate at para 8; citing Trezzi v. Trezzi, 2019 ONCA 978, 150 O.R. (3d) 663, at para 15.
[13] VanSickle Estate at para 8.
[14] VanSickle Estate at para 9; Succession Law Reform Act, R.S.O. 1990, c. S.26, section 22: https://canlii.ca/t/2ql#sec22.
[15] VanSickle Estate at para 10.
[16] VanSickle Estate at para 10.
[17] VanSickle Estate at para 11.
[18] VanSickle Estate at para 11.
[19] VanSickle Estate at para 12.
[20] VanSickle Estate at para 12.
[21] VanSickle Estate at para 12.
[22] VanSickle Estate at para 13.
[23] VanSickle Estate at para 13.
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Written by: Nima Hojjati
Posted on: October 3, 2022
Categories: Commentary, WEL Newsletter
In VanSickle Estate v. VanSickle, 2022 ONCA 643, https://canlii.ca/t/jrxz2 the Court of Appeal reviewed an application for directions in the interpretation of a will and granted the appeal due to an extricable error of law in applying the presumption that a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to the property of the testator, as set out in s. 22 of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (“SLRA”).[1]
Background
The testator and her late husband owned and operated a 66.54 acre hobby farm as a secondary source of income.[2] The testator passed away at the age of 95 and she was survived by 6 children.[3] The testator had prepared a will in 1985 which provided the eldest son with an option to purchase “the farming business carried on by me” for $85,300.[4] Four of the other children argued that the testator had ceased carrying on the farming business therefore the option to purchase the farm had lapsed, and the farm should fall into the residue of the estate.[5]
The relevant clause of the will provided:
If my [eldest son], shall be living at the time of my death, my Trustees shall sell the farming business carried on by me at [Brantford, Ontario], to my [eldest son], as soon as convenient for the price of $85,300.00 or such lower price to be agreed upon by my Trustees and my son, having regard to the assessed value of the lands included hereby at the time of my death and the assistance given me by my son in the conduct of the farming business … And I desire that for the purpose of this clause the expression of my farming business shall include all assets, stock, plant, liabilities, in connection therewith on the other and it shall include the estate in fee simple of the farm…[6]
Although all the children had helped with the farm growing up, the four youngest had moved away and were not involved with the farm.[7] The testator intended to benefit the eldest son differently because of his lifelong commitment to the operation of the farm.[8] However, it was not known whether the testator had considered the increased value of the farm since 1985, which resulted in a much bigger gap between her provision for the eldest son and “the rest of the children than would have been the case in 1985”.[9] In other words, the farm was now more valuable.
Application Judge’s Decision
At first instance, the application judge agreed with the four children that the “farming business” had ceased.[10] The application judge concluded that the “business” referred to an active farming business carried on before the making of the will, and to construe “business” to mean the bare rental of farmland would be inconsistent with the qualifying phrase “carried on by me”.[11]
Standard of Review
The standard of review of an application judge’s interpretation of a will is the same as that of a contract.[12] The “findings of an application judge in interpreting the will in light of all the surrounding circumstances to determine the subjective intentions of the testator that it conveys, are findings of mixed fact and law entitled to appellate deference, absent an extricable error of law or palpable and overriding error”.[13]
Extricable Error of Law
The Court of Appeal held that the application judge made an extricable error of law in failing to apply the presumption set out in s. 22 of the SLRA which states:
Will to speak from death
22 Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to,
(a) the property of the testator; and
(b) the right, chose in action, equitable estate or interest, right to insurance proceeds or compensation, or mortgage, charge or other security interest of the testator under subsection 20 (2). R.S.O. 1990, c. S.26, s. 22.[14]
Pursuant to s. 22 of the SLRA, the starting point for the interpretation of the will was to ask whether the testator was carrying on a farm business at the time of her death.[15] The Court of Appeal considered the evidence that the testator owned the farmland, did not leave it unproductive, leased it out to be farmed on a commercial basis, received income, and declared that income on her taxes as farm income.[16] On a reading of these facts, the testator was found to be carrying on a farm business at the time of her death.[17]
The next question was whether anything in the will displaced the presumption that the will speaks at the time of death, and instead supported the proposition that the testator only intended for the option to purchase be exercisable if she had a direct role in the farm business – “either tending the fields herself or directly managing the labour of others”.[18]
The Court of Appeal held that there was nothing in the phrase “the farming business carried on by me” that pointed unambiguously to the business carried on in 1985 over the business carried on in 2019.[19] There was also no evidence in the surrounding circumstances to suggest that the testator’s intention was to provide the eldest son with an option to purchase the farm “so that he could continue farming it, but only if she was still involved in the day-to-day operations”.[20] The Court of Appeal further noted that the will contained a clause that defined the term “farming business” as including “all assets, stock, plant, liabilities, in connection there with on the other (sic) and it shall include the estate in fee simple of the farm.”[21]
Although it could be wondered whether the testator intended to benefit the eldest son quite as much as she did, the testator did intend to benefit the eldest son differently.[22] The Court of Appeal held:
“…despite the passage of 34 years, the testator never chose to amend her will. The task of this court is simply to determine whether the option to purchase is valid and was validly exercised. It is and it was.”[23]
—
[1] VanSickle Estate v. VanSickle, 2022 ONCA 643 at paras 1, 2, and 9 (“VanSickle Estate”).
[2] VanSickle Estate at para 3.
[3] VanSickle Estate at para 3.
[4] VanSickle Estate at paras 1, 4, and 6.
[5] VanSickle Estate at para 1.
[6] VanSickle Estate at para 6.
[7] VanSickle Estate at para 4.
[8] VanSickle Estate at para 13.
[9] VanSickle Estate at para 13.
[10] VanSickle Estate at para 2.
[11] VanSickle Estate at para 7.
[12] VanSickle Estate at para 8; citing Trezzi v. Trezzi, 2019 ONCA 978, 150 O.R. (3d) 663, at para 15.
[13] VanSickle Estate at para 8.
[14] VanSickle Estate at para 9; Succession Law Reform Act, R.S.O. 1990, c. S.26, section 22: https://canlii.ca/t/2ql#sec22.
[15] VanSickle Estate at para 10.
[16] VanSickle Estate at para 10.
[17] VanSickle Estate at para 11.
[18] VanSickle Estate at para 11.
[19] VanSickle Estate at para 12.
[20] VanSickle Estate at para 12.
[21] VanSickle Estate at para 12.
[22] VanSickle Estate at para 13.
[23] VanSickle Estate at para 13.
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