Written on behalf of Feigenbaum Consulting
A court invalidated the two wills of a man who excluded his daughter from inheritance after a brain cancer diagnosis.
The testator was a successful businessman who was married for 30 years and had one daughter, who is 45 years old. The testator separated from his spouse seven years prior to his death, but they were never legally divorced. After separation, he lived with his common law partner until his death. He owned two profitable companies that manufactured packaging materials and sold packaging materials as well as real estate assets.
Following a seizure in July 2010, he was diagnosed with brain cancer. After the diagnosis, he made two wills. The first in August 2010, in which he left the majority of his estate to his common law partner and excluded his daughter entirely. In a second will, made in September 2010, he repeated the exclusion of his daughter and left legacies to his common law partner, a friend from Québec, his former business associate, the two estate trustees and the residue of his estate to a number of friends, including a share of the residue to the spouse of one of the trustees.
The testator attempted to change his will two further times but no new wills were signed before his death, on December 24, 2010. On his death, his estate was worth approximately $7.5 million.
The Trial Decision
The daughter challenged the two wills, claiming that her father did not have testamentary capacity when he executed the wills. At trial, the judge heard evidence from a number of witnesses regarding the testator’s behaviour following his diagnosis and from an expert psychiatrist regarding the testamentary capacity of the testator. The judge applied the test for testamentary capacity and concluded that the testator was not aware of the nature and extent of his assets at the time he made the wills, did not remember the person he might be expected to benefit under his will and did not understand the nature of the claims that may be made by persons he was excluding. He found that the dispositions were affected by delusions.
The judge therefore declared the wills invalid and the entire estate was to pass as an intestacy to the daughter.
Following this determination, the judge awarded costs of over $311,000 to be paid to the daughter by both estate trustees. The judge found that the daughter was entirely successful in her claim and was therefore entitled to costs. He found that it would be unfair and inequitable for the trustees to be entitled to recover the amount from the estate. He determined that the trustees had acted unreasonably in their offers to settle with the daughter. The trial judge concluded:
“I am far from saying that the non-acceptance of an offer to settle, standing alone, constitutes unreasonable conduct attracting costs consequences for an estate trustee. I simply say that in this circumstance it was unreasonable and does attract costs consequences. […] [T]he trustees chose to soldier on and incur significant costs. I do not think they should be rewarded by having their costs paid by [the daughter].”
The trustees appealed the decision. In its 2017 decision, the Ontario Court of Appeal rejected the appeal, finding that the trial judge had not made any palpable errors of fact or in law with regards to the finding of incapacity of the testator. On the issue of costs, the court found that the trial judge had the discretion to determine costs and it would not interfere with the decision, concluding:
“In the case at bar, the trial judge found that the estate trustees were adversarial and unreasonable in refusing to consider offers of settlement that were less than the result obtained and that they took unreasonable positions such as the hiring of a private investigator and claiming costs double those claimed by the respondent following trial. Both estate trustees were responsible in carrying the litigation forward. There is no reason to interfere with the exercise of discretion of the trial judge.”
The trustees appealed to the Supreme Court of Canada, which dismissed the leave to appeal in 2018.
If you or a loved one are planning on the distribution of an estate in preparation for a future event such as a will, it is important to speak to a trusted legal advisor. It is usually best to plan an estate ahead of time, to foresee issues before they arise and have them handled according to the wishes of the grantor.
For assistance, Contact Mark Feigenbaum, Barrister and Solicitor online or call him at (905) 695-1269 or toll-free at (877) 275-4792