1. Introduction
Cases about the interpretation of wills are always interesting. They tend to involve events that were unforeseen by the testator which cause problems down the line. The recent case, Bradley Estate,[1] is one such case. Among other things, it raises a question about a possible unintended partial intestacy and, if it did arise, as of what date the intestate heirs must be determined. It also explores the question about the vesting of an interest, when the vesting takes place, and whether it is absolute or subject to divestment.
2. Facts
The testator, George Bradley died in 1979, having made his professionally drawn Will earlier that year. It was modified by a codicil that did not give rise to interpretive difficulties. George was survived by his second wife, Marion, and his two children from a prior marriage, Carson and Marilyn. Carson had two children and Marilyn had three. Marion also had two children from a prior marriage, Lawrence and Gordon. George’s current executors are Lawrence and Carson’s son, George Jr.
Carson died in 1999; Marilyn died in 2016 and appointed her daughter, Diane, executor; and Marion died in 2022. Marion’s executors are Lawrence and Gordon.
In subclause 3(k) of the Will George established a trust of his residential property (an interest in a cooperative) for Marion for life.
Subclause 3(m) provided: [2]
(m) To divide the residue of my estate into two parts, the one consisting of [55%] of the residue, hereinafter referred to as “my Wife’s Share” and the other consisting of [45%] of the residue, hereinafter referred to as “my Children’s Share” and to deal with such shares as follows:
(i) To stand possessed of my Wife’s Share upon trust to pay to my wife, MARION LOUISE BRADLEY, out of such share the net income derived therefrom during her lifetime, …
(ii) Upon the death of the survivor of me and my wife my Trustees shall divide my Wife’s Share or the remainder thereof among my issue then alive by way of [60%] of such share to my daughter, MARILYN DAWNE BRANDRETH, and [40%] of such share to my son, CARSON GEORGE BRADLEY.
(iii) To divide my Children’s Share among my said daughter and son in the same proportionate amounts.
(iv) If either of my said daughter or son shall have died before such division and appropriation, I direct that his or her share shall be paid and transferred to the survivor of them.
The facts as they eventually developed raised the question whether the will contemplated those developments or whether there was an intestacy of the balance of the Wife’s Share.
As one of the executors of George’s Will, Lawrence brought this petition for the court’s advice and interpretation of the will and rightly took a neutral position. On behalf of Marion’s estate, Gordon argued that there was an intestacy of the balance of the Wife’s Share and consequently that those funds should be distributed among Gordon’s heirs at law as determined at George’s death. This would mean that Marion’s estate would receive a significant portion of the money. In contrast, the children and grandchildren of Carson and Marilyn (the ‘Descendants’) argued that there was no intestacy, or if there was, the intestate beneficiaries must be determined as of the end of Marion’s life estate. In that case the Descendants would receive the entire balance of the Wife’s Share.
Although the petition raised the possibility of an intestacy of the Children’s Share, none of the parties raised that possibility.
3. Analysis and Judgment
The matter was, of course, governed by the law preceding the current Wills, Estates and Succession Act,[3] since George died long before its enactment,
Justice Gomery began his analysis by outlining the principles that must guide the court in interpreting a will, including the principle that the court must read the words in the will in light of the facts and circumstances known to the testator at the time he made his will (the ‘testator’s armchair’ principle).
Justice Gomery also referred to the principle that the court will favour an interpretation that will avoid an intestacy if the language of the will permits it. Then he turned to the kinds of interests a testator may create, namely, a contingent interest or a vested interest, and if the latter, he can make it either absolutely vested, or subject to divestment. He cited the well-known rule in Browne v Moody,[4] that an interest will be regarded as vested if it is postponed solely for the convenience of the testator’s estate or follows upon a prior estate.
The intestacy argument was based on the phrase, ‘among my issue then alive’, in subclause 3(m)(ii), the suggestion being that this phrase refers to the testator’s children, Marilyn and Carson. Although ‘issue’ usually refers to all a testator’s lineal descendants, it can serve as a synonym for ‘children’ and Gordon argued that it did so in this case, since Marilyn and Gordon were specifically named in that subclause and thus nothing was given to anyone else. Further, according to Gordon, since the division under subclause 3(m)(ii) was to happen after the death of the survivor of George and Marion, the words ‘then alive’ must mean that the persons to take are to be determined at that time and not at George’s death (the latter time being the prima facie rule, also known as the rule in Bullock v Downes).[5] Thus, according to Gordon, since neither of Carson or Marilyn were alive when the life estate ended, an intestacy resulted. Even if their interests were vested, Gordon argued, the words ‘then alive’ meant that the interests divested on their deaths.
Justice Gomery agreed that in this case the word ‘issue’ meant ‘children in subclause 3(m)(ii). But he disagreed that the deaths of the children before the end of the life estate led to an intestacy.
In his view, subclause 3(m)(iv) dealt with the possibility of the death of one of George’s children ‘before such division and appropriation’ and those words referred to the division and appropriation mentioned in subclause 3(m)(ii). in fact, one such death happened in 1999 when Carson died and thus under subclause 3(m)(iv) his share had then to be paid to Marilyn. Marilyn was then the sole residuary beneficiary and her interest in the remainder of the Wife’s Share vested absolutely. In Justice Gomery’s view, the direction in subclause (iv) pre-empted and took priority over the division and appropriation in subclause (ii). The words ‘then alive’ served only to determine how and when a division was required. In other words, subclause (ii) and subclause (iv) must be read together. This interpretation is also favoured by the presumption in favour of early vesting and avoids an intestacy.
Thus, the balance of the Wife’s Share should be paid to Diane, Marilyn’s executor for distribution through Marilyn’s estate.
Justice Gomery went on to hold that Marilyn and Carson’s interest in the Children’s Share vested immediately and absolutely. Therefore, they could, under the rule in Saunders v Vautier,[6] have called for those funds to be paid to them right away. Thus, there was no intestacy of the Children’s Share, and it should be distributed to Marilyn’s and Carson’s estates in the proportions indicated in the Will.
Since the issue arose out of the language of the will, all the parties were entitled to be paid their costs out of the estate.
—
[1] 2023 BCSC 618.
[2] The underlining was in the original; the figures in brackets were amendments made by the codicil.
[3] SBC 2009, c 13.
[4] (1936) CarswellOnt 92, [1936] 4 DLR 1 (PC).
[5] (1860), 8 HLC 1. See also National Trust Co v Fleury [1965] SCR 817, 1965 CarswellOnt 74, to the same effect.
[6] (1841), Beav 115, 49 ER 282 (Rolls Ct.), affirmed [1841] EWHC Ch J82, 1 Cr & Ph 240, 41 ER 482.
Menu
Written by: Albert Oosterhoff
Posted on: September 29, 2023
Categories: Commentary, WEL Newsletter
1. Introduction
Cases about the interpretation of wills are always interesting. They tend to involve events that were unforeseen by the testator which cause problems down the line. The recent case, Bradley Estate,[1] is one such case. Among other things, it raises a question about a possible unintended partial intestacy and, if it did arise, as of what date the intestate heirs must be determined. It also explores the question about the vesting of an interest, when the vesting takes place, and whether it is absolute or subject to divestment.
2. Facts
The testator, George Bradley died in 1979, having made his professionally drawn Will earlier that year. It was modified by a codicil that did not give rise to interpretive difficulties. George was survived by his second wife, Marion, and his two children from a prior marriage, Carson and Marilyn. Carson had two children and Marilyn had three. Marion also had two children from a prior marriage, Lawrence and Gordon. George’s current executors are Lawrence and Carson’s son, George Jr.
Carson died in 1999; Marilyn died in 2016 and appointed her daughter, Diane, executor; and Marion died in 2022. Marion’s executors are Lawrence and Gordon.
In subclause 3(k) of the Will George established a trust of his residential property (an interest in a cooperative) for Marion for life.
Subclause 3(m) provided: [2]
(m) To divide the residue of my estate into two parts, the one consisting of [55%] of the residue, hereinafter referred to as “my Wife’s Share” and the other consisting of [45%] of the residue, hereinafter referred to as “my Children’s Share” and to deal with such shares as follows:
(i) To stand possessed of my Wife’s Share upon trust to pay to my wife, MARION LOUISE BRADLEY, out of such share the net income derived therefrom during her lifetime, …
(ii) Upon the death of the survivor of me and my wife my Trustees shall divide my Wife’s Share or the remainder thereof among my issue then alive by way of [60%] of such share to my daughter, MARILYN DAWNE BRANDRETH, and [40%] of such share to my son, CARSON GEORGE BRADLEY.
(iii) To divide my Children’s Share among my said daughter and son in the same proportionate amounts.
(iv) If either of my said daughter or son shall have died before such division and appropriation, I direct that his or her share shall be paid and transferred to the survivor of them.
The facts as they eventually developed raised the question whether the will contemplated those developments or whether there was an intestacy of the balance of the Wife’s Share.
As one of the executors of George’s Will, Lawrence brought this petition for the court’s advice and interpretation of the will and rightly took a neutral position. On behalf of Marion’s estate, Gordon argued that there was an intestacy of the balance of the Wife’s Share and consequently that those funds should be distributed among Gordon’s heirs at law as determined at George’s death. This would mean that Marion’s estate would receive a significant portion of the money. In contrast, the children and grandchildren of Carson and Marilyn (the ‘Descendants’) argued that there was no intestacy, or if there was, the intestate beneficiaries must be determined as of the end of Marion’s life estate. In that case the Descendants would receive the entire balance of the Wife’s Share.
Although the petition raised the possibility of an intestacy of the Children’s Share, none of the parties raised that possibility.
3. Analysis and Judgment
The matter was, of course, governed by the law preceding the current Wills, Estates and Succession Act,[3] since George died long before its enactment,
Justice Gomery began his analysis by outlining the principles that must guide the court in interpreting a will, including the principle that the court must read the words in the will in light of the facts and circumstances known to the testator at the time he made his will (the ‘testator’s armchair’ principle).
Justice Gomery also referred to the principle that the court will favour an interpretation that will avoid an intestacy if the language of the will permits it. Then he turned to the kinds of interests a testator may create, namely, a contingent interest or a vested interest, and if the latter, he can make it either absolutely vested, or subject to divestment. He cited the well-known rule in Browne v Moody,[4] that an interest will be regarded as vested if it is postponed solely for the convenience of the testator’s estate or follows upon a prior estate.
The intestacy argument was based on the phrase, ‘among my issue then alive’, in subclause 3(m)(ii), the suggestion being that this phrase refers to the testator’s children, Marilyn and Carson. Although ‘issue’ usually refers to all a testator’s lineal descendants, it can serve as a synonym for ‘children’ and Gordon argued that it did so in this case, since Marilyn and Gordon were specifically named in that subclause and thus nothing was given to anyone else. Further, according to Gordon, since the division under subclause 3(m)(ii) was to happen after the death of the survivor of George and Marion, the words ‘then alive’ must mean that the persons to take are to be determined at that time and not at George’s death (the latter time being the prima facie rule, also known as the rule in Bullock v Downes).[5] Thus, according to Gordon, since neither of Carson or Marilyn were alive when the life estate ended, an intestacy resulted. Even if their interests were vested, Gordon argued, the words ‘then alive’ meant that the interests divested on their deaths.
Justice Gomery agreed that in this case the word ‘issue’ meant ‘children in subclause 3(m)(ii). But he disagreed that the deaths of the children before the end of the life estate led to an intestacy.
In his view, subclause 3(m)(iv) dealt with the possibility of the death of one of George’s children ‘before such division and appropriation’ and those words referred to the division and appropriation mentioned in subclause 3(m)(ii). in fact, one such death happened in 1999 when Carson died and thus under subclause 3(m)(iv) his share had then to be paid to Marilyn. Marilyn was then the sole residuary beneficiary and her interest in the remainder of the Wife’s Share vested absolutely. In Justice Gomery’s view, the direction in subclause (iv) pre-empted and took priority over the division and appropriation in subclause (ii). The words ‘then alive’ served only to determine how and when a division was required. In other words, subclause (ii) and subclause (iv) must be read together. This interpretation is also favoured by the presumption in favour of early vesting and avoids an intestacy.
Thus, the balance of the Wife’s Share should be paid to Diane, Marilyn’s executor for distribution through Marilyn’s estate.
Justice Gomery went on to hold that Marilyn and Carson’s interest in the Children’s Share vested immediately and absolutely. Therefore, they could, under the rule in Saunders v Vautier,[6] have called for those funds to be paid to them right away. Thus, there was no intestacy of the Children’s Share, and it should be distributed to Marilyn’s and Carson’s estates in the proportions indicated in the Will.
Since the issue arose out of the language of the will, all the parties were entitled to be paid their costs out of the estate.
—
[1] 2023 BCSC 618.
[2] The underlining was in the original; the figures in brackets were amendments made by the codicil.
[3] SBC 2009, c 13.
[4] (1936) CarswellOnt 92, [1936] 4 DLR 1 (PC).
[5] (1860), 8 HLC 1. See also National Trust Co v Fleury [1965] SCR 817, 1965 CarswellOnt 74, to the same effect.
[6] (1841), Beav 115, 49 ER 282 (Rolls Ct.), affirmed [1841] EWHC Ch J82, 1 Cr & Ph 240, 41 ER 482.
Author
View all posts