Repost: B.C. Court upholds $1.4M bequest to SPCA

My colleague, Georgia Barnard, (bio found here) posted on our firm blog about a recent estate litigation case.  The post can be found here.

In Henderson v. Myler 2012 BCSC 1649 (reasons for judgment found here), the B.C. Supreme Court considered whether a handwritten note was effective and changed the distribution of an estate as set out in a prior will.  The prior will provided that the SPCA would receive the residue of the estate (approximately $1.4 million).  The note provided that the SPCA would only receive $100,000.  The Court concluded that the note was not effective, and so the SPCA received the $1.4 million residue pursuant to the prior will.

A CBC news article on this decision can be found here.

As Georgia notes in her post, it is important to immediately prepare a new will or codicil if your wishes for your estate change.

B.C. Case Comment: Court Admits Unsigned Will After Will-Maker Dies Before Signing Document

It is not uncommon for people to make changes to their estate plan in the final stages of their life, whether they are ill or elderly.  Sometimes there is urgency – death may be imminent.  On occasion, someone may start to make these changes, but may die before the changes have been finalized.  What happens when it is known that someone wants to make certain changes to their estate plan, starts the process to make those changes, but does not complete the changes (for example by taking the final step of signing a new will)?

This was the case in the recent B.C. Supreme Court decision of Bishop Estate v. Sheardown 2021 BCSC 1571. In Bishop Estate, the deceased had given instructions to a lawyer to prepare her will, she reviewed the draft will, and she made a few minor clarifications.  All that remained was to have the will signed and witnessed.  Unfortunately, as a result of the COVID-19 pandemic, the deceased cancelled her appointment with her lawyer to execute her new will.  She then died without ever signing her new will.

The deceased had a previous will, which named her now-deceased husband as beneficiary, or in the alternative the Kelowna General Hospital Foundation.  Under the new, unsigned will, the primary beneficiaries were the deceased’s nephew and niece-in-law.

A will must meet certain requirements to be valid, including the requirement that the will be in writing, signed by the will-maker in the presence of at least two witnesses.

However, in B.C. a court may cure deficiencies in an otherwise invalid will, and order it to be effective.  It must be established that the invalid document is (1) authentic, and (2) represents the deceased’s deliberate or fixed and final intentions regarding the disposal of her property upon death.  This is a fact specific inquiry.  I have previously discussed other cases that apply the test here.

In Bishop Estate, the Court considered the background as to why the the deceased was making changes to her estate plan in 2020.  Since the prior will was made in 2014, the deceased’s husband had died, and her nephew and his wife (the new beneficiaries) had moved to Kamloops and had become a regular part of her life.  The deceased gave detailed and specific instructions to her lawyer that she wanted to name her nephew and his wife as beneficiaries and remove the Kelowna General Hospital Foundation.

The Court concluded that the unsigned will represented the deceased’s fixed and final intentions.  The Deceased cancelled her appointment with her lawyer to sign her will because she could not leave her care facility and attend at the lawyer’s office in person as a result of the pandemic.  The Hospital Foundation argued that the deceased could have signed her will remotely, which will-makers were allowed to do as a result of the COVID-19 pandemic.  They argued that the deceased did not proceed with this option because she may have changed her mind about making a new will.  The Court did not accept this argument.  There was no evidence that the deceased was aware of this option, and the failure to execute the will remotely did not undermine her new testamentary intentions.

The Court ordered that the unsigned will was fully effective and determined how the deceased’s estate would be distributed.

B.C. Case Comment: No Claim in Unjust Enrichment Arising from Contribution to Family Business

I am often contacted by the child of a deceased parent who strongly believes that they have not been treated fairly in that parent’s will (or one of their siblings is making this claim against them).  The death of a parent often brings up long-held perceptions of favoritism, unfairness and lack of appreciation. It is not unusual for a child to seek to revisit events going back years or even decades. This commonly results in wills variation claims and other estate litigation.

One “historical” claim that is sometimes brought is a claim relating to unpaid contributions to a family business. Children are often expected to contribute time and efforts to a family business with no remuneration (but they receive room and board). When those children are not treated fairly under their parents’ wills, they seek to go back and revisit the issue of the unpaid services that they provided.

This was the case in the recent B.C. Supreme Court decision of Tang v. Tom 2021 BCSC 1399. In Tang, the plaintiffs sought a variation of their mother’s will, which failed to treat her five children equally.

One of the plaintiffs (Linda) also brought a claim in unjust enrichment with respect to her work at her parents’ grocery store between 1971 and 1981. She described her assistance to her parents as “extraordinary efforts.”

The family came to Vancouver in the 1960s, when the children ranged in age from eight to 17. The family (parents and children) worked extremely hard to improve their standard of life. The Court described their work ethic as “remarkable”. The parents purchased a small grocery store with an attached home and the family moved there in 1971. All of the children except one worked part-time at the store until it was sold in 1981. None of them were paid for their work. The children also worked various other jobs, and contributed their paycheques to the “family pot” of income to pay expenses. The children received pocket money, vehicles to commute to school, and payment of most of their living and school expenses.

Linda argued that she was a pivotal figure in the success of the grocery store business. The Court held that while Linda may have made significant contribution to the store (which at times may have been greater than the contribution of her younger siblings), she tended to exaggerate the scope and scale of her contribution, while minimizing the contributions of her siblings.

The Court had to consider whether Linda’s historic contributions to the family business constituted unjust enrichment. In order to satisfy the requirements for a claim in unjust enrichment, a plaintiff must show: (1) an enrichment of the defendant (in this case her mother/her mother’s estate), (2) a corresponding deprivation of the plaintiff, and (3) an absence of juristic reason for the enrichment.

A claim in unjust enrichment can be difficult to establish in the context of a family business, as there will often be mutual benefits to family members as they function as a common unit. This was the case in Tang. The Court concluded that while the contributions by the children (and in particular Linda) may have been significant (i.e. there was enrichment), the benefits to the children (housing, food, other amenities, etc…) were also significant. As a result, Linda failed to establish a legal claim against her mother’s estate for unjust enrichment.

Linda did have a moral claim to a portion of the estate, as did her siblings, as a result of their contributions to the family business and the common family unit. However, she did not have a legal claim in unjust enrichment distinct from that of her siblings.

The deceased left an estate which included real property assessed at approximately $1.7M, and personal property (bank and investment accounts) worth approximately $775,000. Her will left her real property to two of her children (neither of which was Linda) who provided a greater degree of care in the last three years of her life. The will divided her personal property equally between her five children.

The Court varied the Will to order specific gifts of $300,000 to each of the children who provided care in the three years of the deceased’s life, with the remainder of be divided equally between the five children. This would recognize the contributions of the children when the family was a joint economic unit (which included the acquisition of the real property), but also take into account the “significant sacrifices” made by the of the two children who provided end of life care.