Forbes V. Millard Estate



Citation:        Forbes v. Millard Estate,
2017 BCSC 361

Date: 20170306
Docket: S161343
Registry: Victoria


Cherie Elizabeth Forbes



Maureen Melodie Millard Bryce and Richard James Millard in their capacity as Executors of the Will of the late Helen Jacqueline Millard, deceased, Maureen Melodie Millard Bryce and Richard James Millard in their personal capacity


Before: The Honourable Mr. Justice Blok

Reasons for Judgment

Counsel for the Petitioner:                                                                                                           S. Grant

Counsel for the Respondents:                                                                                                    C. Morris

Place and Date of Hearing:                                                                                                                            Victoria, B.C.
October 5, 2016

Place and Date of Judgment:                                                                                                                         Victoria, B.C.
March 6, 2017

I. Introduction

[1] Helen Millard died on February 9, 2015 in Cumberland, B.C., aged 91 years. She left three children, Maureen Bryce, Richard Millard and Cherie Forbes who are, respectively, 70, 68 and 62 years old.

[2] In her will, which was made on September 5, 2000 (the “Will”), the late Ms. Millard left to her daughter Cherie “any property which I may own and be using as a home at the date of my death”. At the time she made her Will Ms. Millard owned a home on Hornby Island. In December 2002 she sold that home and purchased a home in Courtenay, B.C.

[3] Ms. Millard suffered a decline in her mental functioning from about 2002 onward. By 2004 she was incompetent and could not live independently. She was placed in a care home in July 2004.

[4] In September 2005 Maureen Bryce and Richard Millard, as Ms. Millard’s attorneys appointed under an enduring power of attorney, sold the Courtenay property for $185,000. They say that part of the sale proceeds were used to pay for Ms. Millard’s ongoing care at the seniors’ facility as her pension income was insufficient for that purpose.

[5] The dispute in this case centres on the bequest to Cherie Forbes of “any property which I may own and be using as a home at the date of my death”. The late Ms. Millard did not own a home at the date of her death because her attorneys had sold it. At common law, the gift would have adeemed, or failed, because of a legal presumption that the testator intended to revoke the gift. However, in March 2014 the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 [WESA] came into force. Section 48 of the WESA contains an anti-ademption provision:

48 (1) In this section, “proceeds” means the gross proceeds at the time of disposition, and includes

(a) non-monetary consideration, and

(b) in the case of a gift, the fair market value of the gift.

(2) If property that is the subject of a gift in a will is disposed of by a nominee, the beneficiary of the gift is entitled to receive from the will-maker’s estate an amount equivalent to the proceeds of the gift as if the will had contained a specific gift to the beneficiary of that amount.

(3) Subsection (2) does not apply if

(a) the disposition is made to carry out instructions given by the will-maker at a time when the will-maker was legally capable of giving instructions, or

(b) a contrary intention appears in the will.

[6] The petitioner says that s. 48(2) of the WESA applies to the bequest in question and so she is entitled to receive from the estate the proceeds of sale of the Courtenay property as if the Will had contained a specific gift in that amount.

[7] The respondents say the Will was made and the subject property sold years before the WESA came into force and it would be significantly unfair for it to operate retrospectively. The respondents also maintain that the bequest of “any property which I may own and be using as a home at the date of my death” fails because there was no property that met that description on the date of death.

[8] The specific issue raised in the petition is:

… whether the Petitioner should receive an amount equivalent to the proceeds of sale of [the Courtenay property] as if the will had contained a specific gift to the Petitioner of that amount.

II. Facts

[9] Most of the relevant facts have already been stated, but there are some additional facts that are necessary to understand and decide the issues in this case.

[10] I will refer to Helen Millard as either “Helen” or the “will-maker”, the modern term for “testatrix”. It is also the term used in the WESA. For convenience, I will refer to the petitioner and the respondents by their first names.

[11] In her Will, the will-maker explained her reasons for leaving her home to Cherie:

VII. I wish to record in this my Will that the reason that I have left my home to my daughter, Cherie … is that firstly, my other children have been financially more fortunate in life then [sic] my daughter Cherie, and that Cherie’s son, Kerry David Forbes, is seriously disabled and I am concerned that Cherie have a home in which she will be free to look after her son during his life time. It may not be Cherie’s desires [sic] to actually live in my home currently on Hornby Island, but if she does not then she is to at least have the capital of my home to provide herself with a home in the community of her choice. … I recently discussed this provision with my other two children and both agreed with the gift to Cherie… .

[12] Cherie has two children: Candace, who is 43 years old, and Kerry, who is 41 years old. Kerry is severely disabled. In her affidavit Cherie described her son’s disabilities:

My son Kerry is, and has been since the age of 20 months severely autistic, non-verbal, diabetic, and has a seizure disorder among other serious issues. Kerry will “be two years old forever” and requires full time care. Since 1990 when his father and I separated, I have alone been the full time care provider for Kerry.

[13] Later in her affidavit Cherie provided more details about her son’s situation:

21. Kerry has very specific needs …

a. Due to his autism, Kerry can behave aggressively, violently, and self-abusively. Kerry randomly and without warning has regular violent “tantrums”, and has injured me to the point where I require emergency care. My friends cannot visit in our home as Kerry can become extremely agitated and aggressive with people around. Kerry requires a very specific and customized routine.

b. Kerry is unable to travel by car except for the occasional very short trips, or if someone else, such as Candace is driving and I can tend to him. It is necessary for the car to be equipped with a protective screen between Kerry and the driver.

c. Kerry has multiple serious health issues which require regular and frequent emergency care and lengthy hospitalizations. He must live in close proximity to specialists and hospitals. Kerry requires a lab technician to come to the home to collect blood on a regular basis. His general practitioner makes house calls to our home in Victoria.

[14] Neither Maureen nor Richard dispute the fact that Cherie’s son Kerry is severely disabled or that Cherie is her son’s full-time care provider, but they maintain that Kerry is financially supported through benefits paid by the provincial government.

[15] All three of the will-maker’s children were named as executors in the Will, though only Maureen and Richard applied for, and were granted, probate of the Will. Cherie did not renounce her executorship, however.

[16] The Will is a simple one. It directs that Helen’s personal property and effects be divided according to a separate memorandum, “any property which I may own and be using as a home at the date of my death” is gifted to Cherie, and the remainder − the residue of the estate − is divided equally between Maureen, Richard and Cherie.

[17] The affidavit filed for the probate application shows a net value for the estate of about $230,000 as of the date of death. All assets are currently in the form of monies on deposit.

[18] The affidavits of each of the parties address a number of other matters, but most of these are not relevant to the central issue raised in the petition.

[19] The affidavits of Maureen and Richard are virtually identical. Each deposes that Helen’s (apparent) assumption that they are “well off” is incorrect. Both say that they never discussed their finances with Helen.

[20] Maureen and Richard depose that, over the years, Cherie portrayed to Helen, Richard and Maureen that she was in constant financial difficulty, although she did not provide details of her finances. They also depose that Helen often provided Cherie with financial help. They believe that Cherie’s representations about her financial difficulties were untrue, and in this regard they note that Cherie currently owns a home in Victoria that is free of any financial encumbrances.

[21] As I have said, these facts are largely irrelevant to the legal issues before this Court, though they do explain the sense of unfairness that Maureen and Richard apparently feel about the legal position currently advocated by Cherie.

III. Positions of the Parties

A. Petitioner

[22] The petitioner submits that: (1) s. 48(2) applies here by virtue of s. 186 of the WESA; and (2) s. 48(2) of the WESA is determinative of the issues in this case. The Courtenay home was sold by Richard and Maureen pursuant to an enduring power of attorney granted to them by Helen, and as such it was disposed of by “nominees”, as per s. 48(2) and s. 1, the latter being the definition section of the WESA that defines “nominee” as including persons acting under an enduring power of attorney. The petitioner adds that there is no contrary intention in the Will, so the s. 48(3) exception to the anti-ademption provision does not apply.

[23] The petitioner argues in the alternative that if s. 48(2) of the WESA does not apply, then this Court should nonetheless conclude that the gift to Cherie did not adeem because the sale of the property was carried out by Maureen and Richard, as attorneys, at a time when Helen was incompetent. Given these circumstances, the petitioner submits, there should be no presumption that Helen intended to revoke the gift.

B. Respondents

[24] The respondents submit that the issue is a simple one: the bequest in question was of “any property which I may own and be using as a home at the date of my death”, and since there was no such property as of the date of death the bequest fails. The respondents argue that this also addresses the application of s. 48(2) of the WESA because there was no “property that is the subject of a gift in a will”, as s. 48(2) requires.

[25] The respondents also submit that the sale of Helen’s home in 2005 was done in good faith at a time long before the WESA came into force. To apply s. 48(2) would be to give it retrospective effect over that transaction to the detriment of the respondents, contrary to the ordinary legal presumption against statutes having retrospective effect. For that reason they submit s. 48(2) should not be applied here.

C. The Petitioner’s Reply

[26] The petitioner submits in reply that the case authorities on retrospectivity referred to by the respondents all deal with situations where vested rights would be affected by the retrospective application of a statute. Here, the respondents did not have any vested rights as beneficiaries until Helen’s death, which came after the coming into force of s. 48. Accordingly, the principles relating to retrospectivity do not apply.

[27] As to the respondents’ point that on the date of death there was no property as defined in the relevant clause (Clause VI) of the Will, Helen did not leave her home when she had capacity and so she did not leave of her own volition. In any event, she may well have still considered her property to be her home but because of her diminished mental capacity there was no way to either establish that or to refute it.

IV. Discussion

A. Statutory Provisions

[28] Some additional provisions of the WESA relevant to this case are set out below. Section 4 is a provision dealing with the construction of instruments and s. 186 is a transitional provision that addresses the application of the statute.

4 (1) If this Act provides that a provision of this Act is subject to a contrary intention appearing in an instrument, that contrary intention must appear in the instrument or arise from a necessary implication of the instrument.

(2) Extrinsic evidence of testamentary intent, including a statement made by the will-maker, is not admissible to assist in the construction of a testamentary instrument unless

(a) a provision of the will is meaningless,

(b) a provision of the testamentary instrument is ambiguous

(i) on its face, or

(ii) in light of evidence, other than evidence of the will-maker’s intention, demonstrating that the language used in the testamentary instrument is ambiguous having regard to surrounding circumstances, or

(c) extrinsic evidence is expressly permitted by this Act.

186 (1) Subject to subsections (2) and (3) of this section and section 189, Part 4 [Wills] applies to a will, whenever executed, if the will-maker dies on or after the date on which Part 4 comes into force.

[29] In addition, s. 48, the anti-ademption provision reproduced earlier, is of course relevant here. Section 48 falls within Part 4 of the WESA, which is relevant given the wording of s. 186.

[30] These provisions were in force effective March 31, 2014 by virtue of B.C. Reg. 148/2013.

B. Ademption − Some Background

[31] In McDougald Estate v. Gooderham (2005), 255 D.L.R. (4th) 435, 17 E.T.R. (3d) 36 (Ont. C.A.) [McDougald Estate], the Ontario Court of Appeal explained the concept of ademption:

[1] Wills often contain bequests, which are directions that specific items of property are to be given to named recipients upon the testator’s death. Sometimes the specified item cannot be found among the testator’s assets at the time of death. This can happen because the item is lost, destroyed, sold or given away before the testator dies. At common law, in such a situation, the bequest is held to have adeemed and the gift fails. If there are proceeds from the disposition of the item of property, the proceeds fall into residue and are distributed accordingly. The proceeds are not given to the named beneficiary.

[32] At common law ademption occurs even if the divestiture of the bequeathed property is involuntary. This created the potential for mischief. For example, although s. 21 of the Power of Attorney Act, R.S.B.C. 1996, c. 370, prohibits attorneys acting under an enduring power of attorney from changing a will for the adult for whom they are acting, an attorney could dispose of property that was the subject of a bequest and effectively rewrite the will by indirect means.

[33] This problem was recognized and addressed in Ontario through the Substitute Decisions Act, 1992, S.O. 1992, c. 30, a statute that came into force in April 1995. In British Columbia, the issue was examined by the British Columbia Law Institute (“BCLI”) as part of the general re-examination of succession law that ultimately resulted in the WESA. In its June 2006 report, Wills, Estates and Succession: A Modern Framework (BCLI report no. 45), the BCLI concluded (at 49):

With respect to involuntary ademption, the Subcommittee considered a provision in the Ontario Substitute Decisions Act declaring that a property disposition by an adult guardian or attorney acting under an enduring power of attorney while the testator is mentally incapable does not result in ademption. This result is warranted, because under the circumstances addressed by the provision, an intention to revoke a testamentary disposition cannot be ascribed to the testator.
The Subcommittee concluded that a similar provision should be enacted in British Columbia. …
[Footnote omitted.]

[34] Section 48 of the WESA is the provision that was ultimately enacted to deal with ademption.

C. Analysis

[35] I am satisfied that, leaving aside other arguments for the moment, s. 48 is applicable to the situation arising in this case. Section 186 of the WESA provides that Part 4 of the Act (which includes s. 48) applies to a will, whenever executed, if the will-maker dies on or after March 31, 2014.

[36] In this case the will-maker died on February 9, 2015, after the WESA came into force. The fact that the will was made many years prior is irrelevant because s. 48 applies to a will whenever executed. So on the plain language of s. 186, s. 48 applies here.

[37] The respondents submit that applying s. 48 in this case would mean the statute is being given retrospective effect and for that reason it should not be applied here. I am not convinced that the effect here would be retrospective in nature. In Mackenzie v. British Columbia (Commissioner of Teachers’ Pensions) (1992), 69 B.C.L.R. (2d) 227 (C.A.), the court said (at 231):

I begin by adopting both the language and the analysis of Professor Driedger in Statutes: Retroactive, Retrospective Reflections (1978), 56 Can. Bar Rev. 264, and in particular his conclusions which are summarized at p. 276 of that article:

1. A retroactive statute is one that changes the law as of a time prior to its enactment.

2. (1) A retrospective statute is one that attaches new consequences to an event that occurred prior to its enactment.

(2) A statute is not retrospective by reason only that it adversely affects an antecedently acquired right.

(3) A statute is not retrospective unless the description of the prior event is the fact-situation that brings about the operation of the statute.

3. The presumption does not apply unless the consequences attaching to the prior event are prejudicial ones, namely, a new penalty, disability or duty.

4. The presumption does not apply if the new prejudicial consequences are intended as protection for the public rather than as punishment for a prior event.
[Emphasis added.]

[38] I conclude that the situation in this case is the one described in 2(2) above. This refutes the respondent’s assertion that s. 48 is retrospective in nature because it applies only where a will-maker has died after the WESA came into force (by virtue of s. 186) and thus only affects rights that have vested after that date.

[39] I am reinforced in this conclusion by a passage from Ruth Sullivan, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham, Ont.: Butterworths, 2002) [Sullivan and Driedger]. At 548 the author discusses statutory attempts to change future effects of past or ongoing situations, describing these as prospective rather than retrospective, and notes they are objectionable only if they interfere with vested rights. Here, s. 48 does not interfere with vested rights, again because the respondents’ rights were only vested on Helen’s death. This point is reinforced in the further discussion in Sullivan and Driedger, at 546-547.

[40] For these reasons I conclude s. 48 is not retrospective in its general nature and it does not operate retrospectively in this particular case. Moreover, even if s. 48 is retrospective in nature it does not interfere with vested rights.

[41] The next question is whether this case falls within either of the exceptions to s. 48(2). The respondents did not address this point but I will deal with it anyway out of an abundance of caution.

[42] The first exception set out in s. 48(3) (where a nominee disposes of property in order to carry out the competently-given instructions of the will-maker) does not apply here because those facts are not present in this case. The other exception is where a contrary intention appears in the will.

[43] Section 4 of the WESA describes the requirements for finding a contrary intention; it must either appear in the instrument or arise from a necessary implication of the instrument. I conclude there is no contrary intention in the Will itself or that arises out of a necessary implication of the Will. In fact, Clause VII of the Will, where the will-maker states that even if Cherie does not live in the will-maker’s home, “she is to at least have the capital of my home to provide herself with a home in the community of her choice” bolsters the inference that Helen intended that her property not adeem. Accordingly, I conclude there is nothing in the Will that expressly or impliedly indicates that the anti-ademption provision should not apply.

[44] The final issue is whether, at the time of sale of Helen’s house, the property in question met the description set out in the Will (“any property which I may own and be using as a home at the date of my death”). The respondents say it did not. The petitioner says it did, but if it did not then that was only because Helen had been removed from her home involuntarily due to her diminished mental state.

[45] The petitioner also referred to McDougald Estate, a case which had similar facts to those here. In that case, the will-maker bequeathed to her sister certain real property, identified by address, but with the added words “owned by me”. The property was not owned by the will-maker but was instead owned by her holding company, a company in which she owned all of the shares. It was later sold by representatives of the will-maker who acted under the authority of a continuing power of attorney. At the time of sale the will-maker lacked the capacity to manage her affairs. After the will-maker passed away, two of the residuary beneficiaries maintained that the bequest had adeemed. Among other submissions, they argued that the Ontario anti-ademption provision did not apply because the will-maker did not own the property in question.

[46] In reasons reported at (2003), 2 E.T.R. (3d) 52 (Ont. S.C.J.), Wilson J., the judge at first instance, said:

46 The Act is intended to provide a structure to protect individuals who are incapable of managing their financial affairs. The wishes of the incapable person must, where possible, be respected.

47 Section 10 of the Interpretation Act, R.S.O. 1980, c. 219, provides that every Act “shall be deemed to be remedial” and directs that every Act shall “receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.”

49 The Act and section 36 should be given a large, robust interpretation to ensure the intended purpose of the legislation is respected.

50 Often, individuals, particularly with vacation properties abroad hold these properties in a corporation to avoid potential tax problems and residency issues. An overly technical approach, as suggested by the respondents, would defeat the clear intentions and wishes of Mrs. McDougald. In my view, it matters not whether it was a corporation solely owned by Mrs. McDougald or it was Mrs. McDougald personally who owned and sold the personal use Property. Section 36 of the Act only says that the doctrine of ademption does not apply to “property,” not “personally held property.”

51 Mrs. McDougald in her will providing the bequest to her sister referred to the Property as being “owned by me.” By the terms of the Will, if a property was held by a corporation, it was to be treated as if owned by the Testator personally to give effect to the specific bequests. There is clearly, in this case, an identity of interest between the Testator and the corporation that held her personally used Property.

52 Since Mrs. McDougald owned the corporation and provided for the disposition of its holdings in her Will, the fact that the corporation held Property does not affect the application of section 36 of the Act.
[Emphasis added.]

[47] The Ontario Court of Appeal expressly agreed with those reasons.

[48] I conclude that the words “any property which I may own and be using as a home at the date of my death” are words identifying the property in question and the phrase “using as a home at the date of my death” simply distinguishes this property from other property, including other real property, that she might own or come to own. I come to this conclusion by adopting the “large, robust approach”, endorsed by the Ontario Court of Appeal in McDougald Estate, an approach that is necessary to ensure that the intended purpose of the anti-ademption provision is respected. To conclude otherwise would, in my view, frustrate the very object of s. 48(2). Here, Helen clearly wanted Cherie to have the property that was her home, or the capital it represented, and she gave clear and cogent reasons why. While the actions of the respondents in selling that home may have been based on perfectly sensible considerations (and there is no suggestion that they acted in bad faith), at the time they did so Helen was incapable of modifying her Will. To fail to give effect to the anti-ademption provision in these circumstances would, in my view, inappropriately frustrate Helen’s clear intentions.

[49] For those reasons I conclude that the sale of the Courtenay property is captured by s. 48(2) of the WESA and thus the bequest to Cherie did not adeem.

V. Conclusion

[50] The September 2005 sale of the will-maker’s home, which was bequeathed to Cherie by the terms of the Will, did not result in the ademption of that bequest. Accordingly, Cherie is entitled to receive from the will-maker’s estate an amount equivalent to the proceeds of the gift as if the Will had contained a specific gift to the Cherie of that amount.

[51] If counsel cannot agree on costs then submissions on costs may be made in writing according to a schedule agreed between them. If written submissions are made counsel are encouraged to keep them as brief as possible.

“Blok J.”