DATE: 20051026
DOCKET: C43101
COURT OF APPEAL FOR ONTARIO
WEILER, MOLDAVER and SHARPE JJ.A.
B E T W E E N :
THE ESTATE OF MOSES LEONARD WOODS
John R. Sproule for the appellant
Applicant
(Appellant)
- and -
DAVID LEONARD WOODS, PATRICIA WOODS, KATHLEEN WILSON, and KIMBERLY BESAW
Barry J. Carmichael for the respondent
Respondents
(Respondents in Appeal)
Heard: September 30, 2005
On appeal from the order of Justice Myrna L. Lack of the Superior Court of Justice dated January 24, 2005.
MOLDAVER J.A.:
[1] In his Last Will and Testament, Moses Leonard Woods (the testator) left the family home to his third son, David, subject to a life interest in David’s mother and provided that David had not been convicted of a criminal offence before reaching the age of 21. In the event that David failed to comply with that condition (i.e. the criminal conviction condition), the home was to be sold and the proceeds were to be divided between the testator’s other two sons (David’s half-brothers), Manson and Ralph.
[2] At age 41, David asked the executor of the estate to convey the home to him in accordance with the terms of the will. The executor refused to do so in the face of undisputed evidence that in 1973, at age 17, David had been convicted as an adult of several offences under the Criminal Code, R.S.C. 1970, c. C-34. According to the executor, David had breached the criminal conviction condition in the will. He was therefore disentitled from claiming any interest in the home. David did not accept the executor’s position. Accordingly, the executor commenced an application in the Superior Court of Ontario for advice and directions.
[3] On the application, Lack J. found that David had not breached the criminal conviction condition, and she ordered the executor to convey the property to him immediately.
[4] On behalf of the estate, the executor appeals from that order. He submits, among other things, that the application judge misapplied the law in her analysis and construction of the criminal conviction condition and that she erred in holding that the condition had not been breached.
[5] For reasons that follow, I agree with the executor’s position. Accordingly, I would allow the appeal.
BACKGROUND FACTS
[6] The pertinent facts are straightforward and largely uncontested.
[7] At the time of his death in 1976, the testator owned several properties, including the family home in which he, Kathleen Wilson and their son, David Leonard Woods, resided.
[8] The testator had two other sons from his first spouse – Manson and Ralph. They were much older than David. In his will, which he executed in 1958, the testator appointed Manson and Ralph to be the executors and trustees of his estate. David was two years old when the will was executed.
[9] Pursuant to the terms of the will, the testator gave certain of his properties to Manson and Ralph. He provided for Kathleen Wilson by giving her a life interest in the family home. Upon her death, he left the home to David provided that David had not been convicted of a criminal offence before reaching the age of 21. In the event that David failed to comply with that condition, he directed that the home was to be sold and the proceeds were to be divided between Manson and Ralph. The pertinent provision of the will is found in clause 2(d). It reads as follows:
I GIVE, DEVISE and BEQUEATH unto my housekeeper, Kathleen Wilson the house on the southerly 93 feet of my real estate being a part of Lot Number 13 in the sixth concession in the Township of Reach, upon which is erected a dwelling house for and during the term of her natural life and after her death I give, devise and bequeath the said last mentioned parcel of real estate unto David Leonard Woods, her son. Provided that the said David Leonard Woods has not been convicted of a criminal offense before he has reached twenty-one years of age.
In the event that the said David Leonard Woods shall have been convicted of a criminal offense before reaching the age of twenty-one years, then I direct that the said last parcel of real estate shall be sold by my Trustees and the proceeds divided between my two sons, Manson Alfred Woods and Ralph Howard Woods.
In the event that David Leonard Woods shall not have been convicted of a criminal offense before reaching the age of twenty-one years, then I direct my Trustees to convey the said last mentioned parcel of real estate unto David Leonard Woods, when he shall have reached the age of twenty-one years, subject to the life use of his mother, Kathleen Wilson.
[10] Following the testator’s death in 1976, Kathleen continued to reside in the family home. In 1995, Kathleen moved out and David and his wife Patricia occupied the home.
[11] In October 1997, Manson (who by then was the sole surviving executor) received a letter from a lawyer representing David. The letter requested that the family home be conveyed to David in accordance with the terms of the will. Nothing much came of the matter at that time. Kathleen was still alive and she refused to relinquish her life interest in the home. She ultimately passed away in 2004.
[12] In the meantime, after receiving the lawyer’s letter from David, Manson did some checking and he learned that in 1973, when David was 17 years old, he was convicted as an adult of several Criminal Code offences, including car theft, attempted car theft and two counts of breach of probation. It is common ground that in 1973 the Young Offenders Act, R.S.C. 1985, c. Y-1, had not come into force and the Juvenile Delinquents Act, R.S.C. 1970, c. J-3, governed. Accordingly, in most provinces, including Ontario, persons over the age of 16 were treated as adults and governed by the Criminal Code of Canada: see Juvenile Delinquents Act, s. 2(1) “child”.
[13] Upon being confronted with Manson’s findings, David admitted to the various criminal convictions. He nonetheless believed that he was entitled to the family home. Manson disagreed and eventually the matter came before the application judge for advice and directions.
DECISION OF THE APPLICATION JUDGE
[14] The application judge provided detailed reasons for judgment. After reviewing the relevant facts, she considered at some length whether the criminal conviction condition should be classified as a condition precedent or condition subsequent. If the former, the family home would vest in David at age 21 provided that he had not been convicted of a criminal offence before reaching that age. If the latter, the family home would vest in David upon the testator’s death, subject to divestment if David were to be convicted of a criminal offence before reaching the age of 21.
[15] Based on her analysis, the application judge concluded that the criminal conviction condition should be classified as a condition subsequent. She then considered whether it was a valid condition in the sense that it was not “illegal or contrary to public policy or uncertain in its meaning or operation,” and she concluded that it was valid. The parties take no issue with that conclusion.
[16] Having determined that the condition was valid, the application judge considered whether “the operation of the condition [should] be postponed until after David … had reached the age of majority [18 years old].” In the end, she ruled in favour of postponement because “based on the authorities, he [David] could not be divested of the gift because of actions on his part while he was under the age of majority.” Her reasons in that regard are central to the disposition of this appeal. They are reproduced in full below:
Question x): If the condition located at paragraph 2(d) of the will of the late Moses Leonard Woods is a valid condition ought the operation of the condition be postponed until after David Leonard Woods had reached the age of majority?
The answer to this question is yes.
The evidence is that David was convicted of criminal offences before or at the age of 17. There is no evidence that he was convicted of any criminal offences after that.
In Theobold on Wills, the authors write: “A minor cannot be said to refuse or neglect” [footnote omitted].
In Anger and Honsberger on Real Property, the authors explain that the effect of a minor’s non-performance depends on whether the condition is precedent or subsequent:
In regard to infancy, the position of the infant differs according to whether a condition is precedent or subsequent. If the condition precedent is attached to a gift to an infant and can be performed by him, he is bound by it and, in case of non-performance by him, the gift does not take effect, because it was not intended to take effect unless the condition were performed. In the case of a condition subsequent requiring an act of volition, however, he does not forfeit the gift by non-performance during infancy, because the gift had taken effect as intended and, being under disability, he cannot be said to refuse or neglect to perform the condition [footnote omitted].
In the present case, David was 20 years old when his father died. At that time, the age of majority was 18. It was possible for him to commit a criminal offence while he was under the age of majority. However, based on the authorities, he could not be divested of the gift because of actions on his part while he was under the age of majority. David was not convicted of a criminal offence after the age of majority. In my view, he performed the condition subsequent during the time it properly applied, that is, after he turned 18.
[17] In view of her conclusion that the operation of the criminal conviction condition should be postponed until David’s eighteenth birthday, the application judge determined that “[t]he property should have been conveyed to [David] at age 21 under the terms of the will” because from ages 18 to 21, David had remained trouble-free and had not been convicted of a criminal offence.
[18] At the conclusion of her substantive analysis, the application judge addressed the issue of relief from forfeiture. She did so on the understanding that relief from forfeiture was only relevant “[i]f [she was] wrong in finding that the condition is subsequent, or in finding that the condition subsequent operated only after David reached the age of majority.” In the end, she concluded that, if necessary, she would have granted relief from forfeiture “on equitable grounds” for the following reasons:
In my view, it would be unfair for the gift to David to either fail or be divested because of mistakes he made at the age of 17. Further, Moses likely knew before he died about David’s convictions because David went to jail. If Moses had thought David could never qualify for the gift because of the convictions, it would have been cruel for him to allow the provision to stand. If Moses had not wanted David to have a chance of taking the gift, it is much more likely that he would have changed his will. He did not do that. In my view, it would be unfair to allow David to forfeit the gift for convictions before the age of majority, which took place while his father was alive. Moses had made other provision for his 2 other sons. In all of the circumstances of the case, I would grant relief from forfeiture.
ANALYSIS
[19] Before commencing my analysis, it might be useful to reproduce again the pertinent clause from the will:
I GIVE, DEVISE and BEQUEATH unto my housekeeper, Kathleen Wilson the house on the southerly 93 feet of my real estate being a part of Lot Number 13 in the sixth concession in the Township of Reach, upon which is erected a dwelling house for and during the term of her natural life and after her death I give, devise and bequeath the said last mentioned parcel of real estate unto David Leonard Woods, her son. Provided that the said David Leonard Woods has not been convicted of a criminal offense before he has reached twenty-one years of age.
In the event that the said David Leonard Woods shall have been convicted of a criminal offense before reaching the age of twenty-one years, then I direct that the said last parcel of real estate shall be sold by my Trustees and the proceeds divided between my two sons, Manson Alfred Woods and Ralph Howard Woods.
In the event that David Leonard Woods shall not have been convicted of a criminal offense before reaching the age of twenty-one years, then I direct my Trustees to convey the said last mentioned parcel of real estate unto David Leonard Woods, when he shall have reached the age of twenty-one years, subject to the life use of his mother, Kathleen Wilson.
[20] As indicated, the application judge classified the criminal conviction condition as a condition subsequent. She then determined that the operation of the condition should be postponed until after David had reached the age of majority (age 18). In so concluding, she relied on passages from Theobald on Wills and Anger and Honsberger: Law of Real Property to the effect that a minor cannot be said to refuse or neglect to perform a condition subsequent where the condition requires an act of volition on the minor’s part: see John G. Ross Martyn, Stuart Bridge & Mika Oldham, Theobald on Wills, 16th ed. (London: Sweet & Maxwell, 2001) at 678; A.H. Oosterhoff & W.B. Rayner, Anger and Honsberger: Law of Real Property, 2d ed. (Aurora, Ont.: Canada Law Book, 1985) at 332. The passage from Anger and Honsberger, quoted above at paragraph 16, explains the legal principle which the application judge found to be dispositive. For convenience, the passage is repeated below:
In regard to infancy, the position of the infant differs according to whether a condition is precedent or subsequent. If the condition precedent is attached to a gift to an infant and can be performed by him, he is bound by it and, in case of non-performance by him, the gift does not take effect, because it was not intended to take effect unless the condition were performed. In the case of a condition subsequent requiring an act of volition, however, he does not forfeit the gift by non-performance during infancy, because the gift had taken effect as intended and, being under disability, he cannot be said to refuse or neglect to perform the condition [footnotes omitted].
[21] The estate submits that the application judge mischaracterized the criminal conviction condition as a condition subsequent. As a result, the estate maintains that she further erred in concluding that the operation of the condition should be postponed until after David had reached the age of majority.
[22] For reasons that follow, I need not finally decide whether the application judge correctly classified the condition. Suffice it to say, as she recognized at paragraph 29 of her reasons, “the matter is not free from doubt.”
[23] Assuming that the criminal conviction condition was properly classified as a condition subsequent, I am respectfully of the view that the application judge misapplied the law in concluding that David was not bound by it until age 18.
[24] The proposition of law upon which the application judge relied – that an infant cannot refuse or neglect – originates in cases where the will required an infant beneficiary to perform a condition subsequent and then stipulated that if the infant refused or neglected to perform it, he or she would forfeit the bequest.
[25] In such cases, to the extent that the condition required the infant to do something which, as a matter of law, he or she was incapable of doing, the court was understandably loath to enforce it. Thus, in Re Edwards; Lloyd v. Boyes, [1910] 1 Ch. 541, the bequest in issue required the beneficiary to “assume the surname and arms of Edwards and apply for and endeavour to obtain a Royal Licence or other proper authority for that purpose.” The will further stipulated that if the beneficiary “refused or neglected” to comply with that condition, he or she would forfeit the bequest. In deciding whether to give effect to that condition when the beneficiary happened to be an infant, Warrington J. framed the issue as follows at p. 547:
The question is whether that clause, which is a clause of forfeiture on breach of a condition subsequent, the breach of which forfeits an estate actually vested, is a condition which applies to an infant.
[26] Warrington J. answered the question in favour of the infant. After observing at p. 550 that “[t]he expression ‘refuse or neglect’ involves the idea of some exercise of discretion, some exercise of will, on his [the infant’s] part,” he continued at p. 551 as follows:
In law an infant has no power to exercise his will, except in certain special cases with which I need not deal, and he has no power to do that which involves discretion or the exercise of his will in reference to legal matters.
[27] In short, Re Edwards stands for the rather unremarkable proposition that an infant will not be held accountable for refusing or neglecting to comply with a condition subsequent that the infant is incapable, as a matter of law, of complying with: see also Partridge v. Partridge, [1894] 1 Ch. 351, in which North J. observed at p. 359 that “an infant cannot ‘refuse or neglect’ to reside in a particular place if the persons to whom his legal custody and care are committed do not choose that he shall do so”; and Re May; Eggar v. May, [1932] 1 Ch. 99 (C.A.), in which Lord Hanworth M.R. stated at p. 112: “In other words, the Court will safeguard the interests of the infant until such time as he has reached an age when upon him must rest the responsibility of choice and definite adherence one way or the other.”
[28] With respect, however, the present case does not come within the category of cases just mentioned. This was not a case of David refusing or neglecting to do something that he was incapable of doing. On the contrary, at age 17, David was capable, as a matter of law, of committing and being convicted of criminal offences under the Criminal Code. The fact that he may have been under the age of majority for other purposes is irrelevant. In the eyes of the criminal law, as it then existed, he was an adult and he was responsible for his criminal misdeeds.
[29] In sum, at age 17, David was capable of breaching the criminal conviction condition and he did just that. With respect, the application judge erred in holding otherwise.
[30] That leaves the question of relief from forfeiture. As noted above, at the conclusion of her reasons, the application judge stated that, if necessary, she would have granted relief from forfeiture on the grounds that it would be unfair to deprive David of his gift because of mistakes made by him at age 17, especially when his father likely knew of them in time to change his will. Although the application judge’s exercise of discretion in granting relief against forfeiture is entitled to deference, I am respectfully of the view that her decision on this point is clearly wrong and cannot stand.
[31] Factually, there is no way of knowing whether the testator knew of David’s convictions before his death. If he was unaware of them, then it does not follow that he would have changed his will. If he was aware of them, I fail to see why, in the words of the application judge, “it would have been cruel for him to allow the provision [the criminal conviction condition] to stand.” One could just as easily conclude that he did not want David to have the family home because of his criminal misconduct.
[32] I also find it unhelpful to characterize David’s several criminal convictions as “mistakes”. In any event, it is common ground that the criminal conviction condition was a valid condition. As the application judge correctly observed, it was not illegal or contrary to public policy or uncertain in its meaning or its operation. Hence, whether it was “fair or unfair” is really beside the point.
[33] At p. 332 of Anger and Honsberger: Law of Real Property, the authors provide examples of situations in which relief from forfeiture has been granted:
A court may grant relief to a donee against forfeiture under a condition precedent or condition subsequent on equitable grounds, such as, if performance of the condition was prevented by the executors, or by persons interested under a gift over, or under a prior gift, and not by the fault of the donee, or if the condition is in the nature of a penalty [footnotes omitted].
[34] None of those situations applies here; nor are there analogous grounds for granting the relief sought. David was not faultless and others did not prevent him from receiving a gift that the testator clearly wanted him to have. On the contrary, the testator made it clear that David was only to receive the family home if he had not been convicted of a criminal offence before reaching the age of 21. David breached that condition and unfortunately for him, he must suffer the consequences. Nor, in my view, can the criminal conviction condition be classified as a penalty clause. Whatever attributes penalty clauses may have in the context of a will, assuming, without deciding, that they include such things as unconscionability, vindictiveness, arbitrariness or punishment for doing or refraining from doing something that the beneficiary is legally obliged to do or refrain from doing, the criminal conviction condition in issue does not contain any of those characteristics.
[35] Accordingly, I am of the view that relief from forfeiture was not available in this case and that the application judge was clearly wrong in concluding that it was.
CONCLUSION
[36] Assuming the criminal conviction condition was a condition subsequent, David breached it in 1973 when, at age 17, he was found guilty and convicted of several criminal offences. Having breached the condition, he forfeited his right to the property. This is not a case for relief from forfeiture.
[37] Accordingly, I would allow the appeal and set aside the order of Lack J. In its place, an order will go in accordance with the gift over clause contained in paragraph 2(d) of the testator’s will.
COSTS
[38] The parties have agreed on costs. Accordingly, the appellant is awarded costs in the amount of $24,300 inclusive of G.S.T. and disbursements; the respondent is awarded costs in the amount of $16,000 inclusive of G.S.T. and disbursements. The costs shall be payable out of the property in issue.
Signed: “M.J. Moldaver J.A.”
“I agree K.M. Weiler J.A.”
“I agree Robert J. Sharpe J.A.”
RELEASED: “KMW” October 26, 2005