BC Case Comment: Court of Appeal Affirms No Binding Agreement to Leave Estate to Niece

I previously wrote about a case in which the B.C Supreme Court found that there was no binding agreement by an aunt to leave her estate to her niece.  The case was Angelis v. Siermy 2022 BCSC 31, and the post can be found here.  The B.C. Court of Appeal has now dismissed an appeal of that decision.

A person may enter into a contract, whereby they agree to leave their estate to another person in exchange for some consideration.  However, the court in Angelis found that no such agreement existed in that case.  The case was unusual because the aunt (the will-maker) was still alive, denied the existence of any agreement, and defended against the claim.

At summary trial in the court below, the niece claimed that in exchange for providing services to her aunt, her aunt agreed to leave the bulk of her estate to the niece.  The agreement was allegedly formalized in 2002 when the aunt executed estate documents to this effect.  The niece said that the aunt also confirmed the agreement in three letters written by the aunt which explained her wills.  The judge had found that the second and third letters were prepared by the niece, and she had either forged her aunt’s signature or obtained the signature surreptitiously.

Then, in 2011, the aunt changed her will to leave most of her estate to the niece’s cousin (unbeknownst to the niece plaintiff/appellant).

The judge dismissed the claim that there was a testamentary contract requiring the aunt to leave the estate to her niece.  The judge also dismissed a claim by the niece in unjust enrichment on the basis that (1) the niece did not come to court with clean hands (because she forged the letters), and (2) there was juristic reason for the services that she provided (she was compensated and received benefit, and also had donative intent).

The plaintiff niece appealed the judgment, which perhaps is not surprising because the claim was that her aunt was bound to leave the bulk of her $30 million estate to her.  The appellant argued that the judge erred in failing to find a binding testamentary agreement.  She also argued that the judge erred in dismissing her unjust enrichment claim.

The appeal was dismissed.  The reasons of the B.C. Court of Appeal can be found at Angelis v. Siermy 2022 BCCA 401.

The Court of Appeal concluded that it was open to the judge in the court below to find that the two letters were not authentic.   The Court of Appeal concluded that there was no error in the judge’s reasoning or his conclusion that the parties had not entered into a testamentary contract.

The Court of Appeal did hold that the judge erred in his application of the “clean hands doctrine.”  A person who seeks an equitable remedy (such as compensation for unjust enrichment) must come to court with clean hands.  However, the clean hands doctrine is limited, and applies only in respect of misconduct “which has immediate and necessary relation to the equity sued for.”  The doctrine does not apply to all aspects of the party’s behavior known to the court.

In Angelis, the niece did not technically need to rely upon her misconduct (the forged letters) to establish a claim in unjust enrichment.  The letters related to a separate issue (whether there was a testamentary contract).  Accordingly, the clean hands doctrine did not apply as a defence to the unjust enrichment claim.

However, the claim in unjust enrichment still failed.

There are three elements to establish unjust enrichment:

  1. An enrichment;
  2. A corresponding deprivation; and
  3. The absence of a juristic reason for the enrichment.

The judge had concluded that there was a juristic reason for the services that the niece provided.  The Court of Appeal had some issues with the analysis of the juristic reason element by the judge in the court below, but ultimately refused to interfere with the judge’s finding that the niece provided services on the basis that “everyone contributes and everyone gains” from the family enterprise.

What I’m Reading: Interesting Estate Litigation Articles for November 2022

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Stan Rule at Sabey Rule (Kelowna) writes about when a promise to leave someone property in your will is enforceable, with reference to an English case.  This can be compared to the recent B.C. Supreme Court case that I discussed in a post on expectations to inherit and equitable remedies found here. Stan’s post can be found here: Rule of Law: The Taciturn and Undemonstrative Men of Somerset (rulelaw.blogspot.com)
  2. Suzana Popovic-Montag at Hull & Hull LLP (Ontario) writes about the dangers of distributing an estate before obtaining a tax clearance certificate: H&H | Beware the Dangers of Distributing an Estate Without a Tax Clearance Certificate (hullandhull.com)
  3. Suzana and Geoffrey Sculthorpe (again at Hull & Hull LLP) post about how to prove a lost will: H&H | Revisiting the Rebuttable Presumption: Proving a Lost Will (hullandhull.com)
  4. Albert Oosterhoff at WEL Partners (Toronto) posts about the effect of delusions on testamentary capacity, with reference to an English case: Delusions and Testamentary Capacity | WEL Partners Blog
  5. While not an estates case, a recent B.C. Supreme Court decision made the news, in which the court cancelled a marriage annulment, after finding that the women who appeared at the original hearing (which was conducted remotely, in this case it appears by telephone) was an imposter.  The true spouse did not find out until sometime later that her marriage had been annulled by the court: https://www.cbc.ca/news/canada/british-columbia/imposter-wife-court-marriage-1.6660517

Happy reading!