Interpretation of Wills - Hull on Estates # 243
Listen to: Interpretation of Wills
This week on Hull on Estates, Paul Trudelle and Sarah Halsted discuss the Estate of W. J. Halliday, 2011. Specifically, they examine how it pertains to the Interpretation of Wills.
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Interpretation of Wills - Hull on Estates- Episode #243
Posted on March 22, 2011 by Hull & Hull LLP
Sarah Halsted: Hello and welcome to Hull on Estates. You’re listening to episode 243 on Tuesday, March 22nd, 2011.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.
Paul Trudelle: Hi and welcome to another episode of Hull on Estates. I’m Paul Trudelle.
Sarah Halsted: And I’m Sarah Halsted. If you want to be heard on Hull on Estates, you can participate by leaving us a comment. Email us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Paul Trudelle: How are you today, Sarah?
Sarah Halsted: I’m great. And how are you, Paul?
Paul Trudelle: I’m great, thanks. And this is your first podcast I understand.
Sarah Halsted: Yes, it’s my very first podcast.
Paul Trudelle: So we’re gonna make it a good one.
Sarah Halsted: So don’t be too hard on me.
Paul Trudelle: Before we came in today, we were talking about different cases that we’ve come across. And the one case I thought we would talk about a bit today is the Estate of W. J. Halliday, H-A-L-L-I-D-A-Y. It’s a 2011 decision out of Manitoba and I thought it has a number of nuggets that we could touch upon dealing with interpretations of Wills, the doctrines of ademption and arguments that can be made for or against ademption in the particular circumstances that we’ve seen there.
Sarah Halsted: Yes, I agree, this is a very interesting case. It sort of springs out of the actions of a testator that may, according to some, be interpreted as inconsistent. So here we have a testator, Winnifred Joyce Halliday. She passed away October 18, 2007 and left a Will January 13, 2006 which was admitted to probate. The Will contained the following clause, which we’ll just call 3(c) for simplicity: so her house and land, excluding contents, shall be sold and the proceeds from same shall be paid over and conveyed to Sherwood Home in Vernon, Manitoba.
Paul Trudelle: I think there’s about seven charities that she gave the…for the proceeds of her home.
Sarah Halsted: And then she says “all for the general purposes in equal shares”. And then following this, she says “In the event my house and land have been sold prior to my decease, then to transfer and deliver the sum of $10,000 to each of the named beneficiaries”.
Paul Trudelle: So the issue was the interpretation of that clause in light of the particular complicating fact and that fact is, the deceased, after she made the Will and before she died, she transferred her house to her son. The consideration for the transfer was that the son moved from Alberta where he was living and working and moved to stay with the deceased and took care of her, so that’s what the judge found to be the consideration for that transfer. The particular Will interpretation question arose when the executor asked for directions regarding the interpretation of that clause that you just told us about. The executor took the position that because the house and the lands were disposed of prior to death, that the gift of the proceeds of the house had adeemed. And he further argued that the second part of the clause, the clause that said that in the event that my house and land had been sold prior to my decease, then to transfer and deliver the sum of $10,000 to each of the named charities. He took the position that because the house wasn’t sold, that clause wasn’t triggered and therefore that part of the gift, the $10,000 to each of the charities, also failed.
Sarah Halsted: Okay. So now I’ll tell you a little bit about the doctrine of ademption. This was explained by Newbury, J. A. in Wood Estate v. Arlotti- Wood, a 2004 BC case. So essentially the rule of ademption is where a specific bequest adeems or fails, if at the testator’s death the specified property is not found among his or her assets, either because the testator has parted with it or because the property has ceased to conform to the description of it in the Will or because the property has been wholly or partially destroyed. So the doctrine applies as a matter of law, irrespective of the testator’s intentions in the matter, although his or her intentions are clearly relevant to the interior question of whether the gift in question is a specific legacy and therefore subject to ademption, or a general one. And Paul can tell you a little bit about specific and general legacies.
Paul Trudelle: Right. The question was whether the gift of the property was a specific legacy or a general legacy and whether it therefore was subject to the doctrine of ademption. The Court went over what a specific legacy was. A specific legacy is something or some interest in a thing which forms part of the Estate. It must be distinguished from the whole of his personal Estate. It must be identified by a sufficient description and separated and taken apart or set aside for a particular legatee from the general Estate. A general legacy may or may not be part of the testator’s property. It has no reference to the actual Estate of his property. It’s a gift of something which the testator leaves sufficient assets that must be raised by his executors out of his general Estate. So it’s a bequest of money, a certain amount set aside and if that’s the case, then it won’t be subject to the ademption because it’s not something that would otherwise disappear. It won’t be subject to the general doctrine of ademption. It may be that there is not enough of the general Estate to satisfy it but it’s not the same as the specific legacy which may no longer exist. In this case, the Court found that the gift of the property, the first part of the bequest, was a specific legacy. It was the proceeds of the sale of the property. Because the property did not exist, then that bequest failed. It adeemed and the gift failed. The difficulty, though, arose or what the Court then turned to the second part of the bequest which said that in the event the house had been sold, to deliver $10,000 to each of the named beneficiaries. And the Court dealt with the arguments raised by the executor there.
Sarah Halsted: The executor argued that because all of the bequests to charities existed in the same clause, the clause had to be read together to mean that any gift to the charities must come from the proceeds of the sale of the house and the land. As there are no proceeds of sale from the house and land, the gift fails.
Paul Trudelle: Right. And the Court didn’t quite accept that. They looked at the wording of the second portion of the clause and said that it was…its meaning was clear, using the ordinary meaning of the words. Simply put, that clause provided that if the house was sold prior to the testator’s death, then each of the charities would get $10,000. There is no wording that required that the gift to the charity come from any specific source or fund or that it come from the proceeds of the sale. And the Court found that the gift was therefore a general legacy and it would come out of the general Estate, as opposed to that specific asset, the house.
Sarah Halsted: And the executor had a second argument and said that the sale of the house was a condition precedent to the gift. So that because the house and land was never sold, the condition of precedent was not engaged and the gift fails.
Paul Trudelle: Right. And the Court dealt with that one again by disagreeing that it was…firstly they felt that it wasn’t a condition precedent, there was no conditions for the beneficiaries to meet. It just dealt with the actual assets. If the house existed, then it was to be sold and the proceeds were divided. If the house didn’t form part of the Estate, then the charities would get $10,000 each. They didn’t feel that it was an actual condition precedent. In the alternative, the Court countered the argument by saying that this was a condition precedent that couldn’t be satisfied because of the actions of the testator. And in that case, where it’s the actions of the testator that made the condition precedent impossible, then the conditions were…are generally disregarded and the gift is upheld. And the Court referred to some case law on that point.
Sarah Halsted: So essentially the conclusion was the principle confirmed of the testatrix was not the sale of the house and land but rather was the gift to the named charities. And it was held that that clause left a valid gift to the named charities in the amount of $10,000 each which was to be paid out of the general revenues of the Estate in the ordinary course of the administration of the Estate.
Paul Trudelle: Right. And just one point before we leave this case. The Court referred to some evidence that was before the Court of the drafter of the Will and advice that the drafter had given to the testator on the execution of the Will. We don’t know what that evidence was, although the Court does say that they’ve disregarded that evidence. A Court of construction, the Court stated, must not consider the evidence of the drafter of the Will as to the testator’s intention. As well, the Court must disregard any evidence from witnesses as to their understandings of the testator’s intent. Although the Court is to put themselves in the armchair of the testator, in this case because the wording of the Will was sufficiently clear, the extrinsic evidence wasn’t relied upon and not admitted. Well, thank you very much, Sarah, for your comments on that case. I think it’s a helpful case to refer to in these types of circumstances.
Sarah Halsted: And thank you very much for your instruction, Paul.
Paul Trudelle: Okay. We look forward to hearing from you, as always. You can send us an email at hull.lawyers@gmail.com and be sure to visit our blogs that come out every day on estatelaw.hullandhull.com where you’ll find even more information about today’s practice of Estate law. We hope you enjoyed our show. I’m Paul Trudelle.
Sarah Halsted: And I’m Sarah Halsted. Until next week, so long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
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