Court of Appeal for Ontario
Date: 2024-02-28 Docket: COA-23-CV-0495
Judges: Lauwers, van Rensburg and Thorburn JJ.A.
In the matter of the Estate of John Ihnatowych, deceased
BETWEEN
Ulana Olha Gorgi in her capacity as Estate Trustee of the Estate of John Ihnatowych Applicant (Respondent)
and
Markian Alexander Ihnatowych, Alexander Erik de Berner*, Darwin de Berner and Parker de Berner, minors by their Litigation Guardian, Alexander Erik de Berner*, and Adrian Tyler Gorgi, James Conner Gorgi and Michael Jayden Gorgi, minors by their Litigation Guardian, The Children’s Lawyer Respondents (Appellants*)
Counsel: Andrew McKague and Christine Morano, for the appellants, Alexander Erik de Berner, Darwin de Berner and Parker de Berner, minors by their Litigation Guardian, Alexander Erik de Berner Alexandra Mayeski, Karen J. Hagman and Karen Watters for the respondent, Ulana Olha Gorgi in her capacity as Estate Trustee of the Estate of John Ihnatowych
Heard: February 1, 2024
On appeal from the judgment of Justice Andrew A. Sanfilippo of the Superior Court of Justice, dated March 20, 2023, with reasons reported at 2023 ONSC 1803.
Reasons for Decision
Overview
1John Ihnatowych (“John”) died on May 2, 2020. The appellant Alexander Erik de Berner deposed that he is one of John’s children from a relationship prior to John’s marriage.
2Alexander claims a residuary interest in John’s estate as his biological son and therefore John’s “issue” under the “Residue Clause” in John’s will (the “Will”). He also claims that his sons, Parker and Darwin, are John’s biological grandchildren and therefore beneficiaries of his estate under the “Grandchildren Clause” in the Will. These clauses are defined and described in more detail, below.
3Ulana Gorgi (“Ulana”) and Markian Ihnatowych (“Markian”) are the two children of John’s marriage. Ulana is the sole Estate Trustee of his estate.
4Ulana brought an application to rectify the Will to name Ulana and Markian as John’s children under the Residue Clause and the Grandchildren Clause, with the result that Alexander and his children (together “the appellants”) would be excluded as beneficiaries.
5The application judge granted the rectification holding that the wording in the Will did not accurately carry out John’s instructions.
6On the application, the parties agreed on the legal principles applicable to rectification of a will as set out in Re Estate of Blanca Esther Robinson, 2010 ONSC 3484, at para. 24, aff’d 2011 ONCA 493, 106 O.R. (3d) 321, leave to appeal denied, [2011] S.C.C.A. No. 536.
7Robinson, at paras. 24-25, provides that rectification is primarily concerned with “preventing the defeat of the testamentary intentions due to errors or omissions by the drafter of the will” and may be employed, “where the testator’s instructions have not been carried out”. The court in that case, at para. 24, listed three circumstances in which a court will rectify a will where there is no ambiguity on the face of the will, and the testator has reviewed and approved the wording:
a. Where there is an accidental slip or omission because of a typographical error or clerical error;
b. Where the testator’s instructions have been misunderstood; or
c. Where the testator’s instructions have not been carried out.
8The application judge noted that the parties’ only disagreement was how these principles applied.
9The appellants contend that the application judge (i) failed to apply the correct test for rectification, (ii) failed to recognize the nature and quality of evidence required to meet that test, (iii) failed to assess the evidence against the correct test, and (iv) conflated the issue of rectification and interpretation of the Will.
10The appellants further submit that the application judge made a palpable and overriding error of fact in failing to properly consider that Roman Zarowsky, the lawyer who drafted the Will, had received clear instructions to include all grandchildren in John’s Will and there was no evidence to the contrary.
The Evidence
11In order to conduct the analysis, it is important to consider the history of this matter.
12It is uncontested that Alexander is John’s biological son, from a relationship between John and Alexander’s mother. Thereafter, John married and had two more children: Ulana and Markian. Alexander has two children, Darwin and Parker, and Ulana has three children, Adrian, James, and Michael Gorgi.
13In 1995, when Alexander was 30 years old, he discovered that John was his father. His first contact with John was in 2006, when John declined an invitation to his wedding. The first conversation he remembers having with John was in or around January 2008 when Alexander called John after the birth of his first son, Parker. Thereafter, Alexander contacted John on occasion and John sometimes sent him gifts, including to mark the births of his children. Alexander had not met John at the time the Will was made. He first met John in person in 2014, and in the years that followed John visited with Alexander and his family from time to time.
14John executed his final Will in 2009. The Will provides, among other things, in clause VI.1, that ten percent of the residue of his estate was to be distributed among his “grandchildren” alive at the time of his death in equal shares (the “Grandchildren Clause”), and in clause VI.4, that the balance of the residue was to be distributed among his “issue” alive at the time of his death in equal shares (the “Residue Clause”).
15In preparation for the Will, John provided Mr. Zarowsky handwritten notes entitled “My Last Will John Ihnatowych” dated June 17, 2008, which John gave to Mr. Zarowsky in 2009. This document makes numerous specific references to Ulana and Markian but none to Alexander:
a. In paragraph 1: “My estate to be shared eaqualy (sic) between my children Ulana Olha Gorgi & Markian Alexander Ihnatowych”;
b. In paragraph 2: “I designate both Ulana & Markian to be my Trustees”;
c. In paragraph 3: “Upon my death I transfer my Power of Attorneys over Nina Chuma to my daughter Ulana to be shared with my son Markian, both financial and personal care”;
d. In paragraph 4: “Trustees – To be shared equaly (sic) between my children, Ulana & Markian”;
e. In paragraph 5: “Cottage at Hoverla turned to Ulana & lot at Polawa turned to Markian to be assest (sic) & finantionaly (sic) divided equaly (sic)”;
f. In paragraph 6: “It is my wish upon my death 10% of my estate to be invested for my blood grandchildren. Investment to be shared by Ulana & Markian”; and
g. In paragraph 8: “Should Ulana or Markian divorse (sic), their inheritance from me plus interest should be transferred to my blood grandchildren and invested, spend on their education, or transferred to them at age 21. In Markian’s case at present no children, inheritance from me should be tranfered (sic) to him.”
16There were also multiple specific references to his children Markian and Ulana throughout the Will.
17It was Mr. Zarowsky’s evidence that John did not mention Alexander or Alexander’s children at any point in their discussions. Mr. Zarowsky also stated that John told him that he wished to leave his estate only to Ulana and Markian and their children.
The Application Judge’s Decision
18The application judge preferred Mr. Zarowsky’s evidence that John’s intentions and instructions were to leave his estate to Ulana and Markian and their children only, to the appellants’ argument that the wording of the Will demonstrated John’s intention to leave his estate to all his biological children and grandchildren, including Alexander and his children.
19The application judge admitted the paragraphs of Alexander’s affidavit that explained the circumstances of Alexander’s contact with John in the period preceding John’s execution of the Will, but he disregarded evidence of Alexander’s contact with John after the Will was signed and until John’s death. The application judge rejected the appellants’ submission that Mr. Zarowsky “[could] only speculate regarding what John truly intended” as his notes, and John’s handwritten notes were evidence of John’s instructions.
20The application judge found that John’s notes showed that he wanted to leave everything to his children Ulana and Markian and their children. Mr. Zarowsky’s handwritten notes from his meeting with John confirmed those instructions. However, Mr. Zarowsky stated that the Standard Form will he “drafted for the Deceased [did] not specifically limit the beneficiaries to Ulana and Markian, and their children, and therefore [did] not accurately reflect the Deceased’s intentions and instructions.”
21The application judge concluded that the Will contained an unintended error as John’s instructions to Mr. Zarowsky had not been carried out. He therefore ordered rectification of the Will, to include only the intended beneficiaries.
Analysis and Conclusion
22The appellants claim that the application judge made an unprecedented application of the equitable doctrine of rectification. For the reasons that follow, we disagree.
23First, the application judge correctly invoked the third factor in Robinson to enable rectification, that is, where the testator’s instructions have not been carried out. This has been done in other cases.
24For example, in The Bank of Nova Scotia Trust Company v. Haugrud, 2016 ONSC 8150, 29 E.T.R. (4th) 195, at paras. 15-20 and 36, aff’d Welton Estate v. Haugrud, 2017 ONCA 831, at para. 2, the court concluded that the drafting lawyer misunderstood or failed to carry out the testator’s instructions when he referred in the will to an incorrect class of shares, despite the testator clearly setting out the proper class in his written instructions. The court therefore granted an order rectifying the will to ensure that it accurately reflected the testator’s intentions and instructions. Similarly, in Daradick v. McKeand Estate, 2012 ONSC 5622, 82 E.T.R. (3d) 324, at paras. 38-39 and 43-45, the court ordered rectification of a will where the lawyer took notes of the testator’s instructions that she wished for her daughter to receive the matrimonial home, but failed to include such gift in the will. Most recently, in Hofman v. Lougheed et al., 2023 ONSC 3437, 87 E.T.R. (4th) 263, at paras. 39-46 and 53-57, the court rectified a will to delete a clause, where the lawyer included a clause that excluded children born out of wedlock in accordance with his usual will-drafting practice which did not conform with the testator’s instructions.
25Accordingly, the application judge’s application of the equitable doctrine of rectification is not unprecedented.
26Second, the appellant claims the application judge erred by failing to apply the new test for rectification set out in Canada (A.G.) v. Fairmont Hotels Inc, 2016 SCC 56, [2016] 2 S.C.R. 720, at paras. 12-20, 34-38.
27The parties had agreed before the application judge that the Robinson case set out the correct test for rectification of a will, but the appellant now claims there is a new and different test in Fairmont that was not applied. That test is set out at paragraph 12 of Fairmont as follows:
If by mistake a legal instrument does not accord with the true agreement it was intended to record … a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties’ true agreement.
28The appellants have also taken issue with the quality of evidence that the application judge accepted. They claim that on the standard set out in Fairmont Hotels, there should be a presumption of validity and therefore clear evidence that leaves the court with little to no doubt about a mistake in order to rebut that presumption.
29We disagree that Fairmont Hotels sets out a new and different test for rectification of a will.
30The Fairmont Hotels case is distinguishable from the facts in this case as Fairmont did not involve a claim for rectification of a will that unilaterally bequeathed property to others. Rather, it involved a claim for rectification of an agreement between parties where the effect of the agreement was to produce an unintended tax consequence.
31The court in Fairmont Hotels held that rectification could only be used to correct an error in the recording of the agreement, not to rectify situations where an agreement produced an undesirable or unintended outcome, and invoked the concept of rectification “to restore the parties to their original bargain”.
32This holding in Fairmont Hotels is consistent with the principles in Robinson. As Belobaba J. held in Robinson"Anglo-Canadian courts will not rectify a will to correct the testator's mistaken belief about the legal effect of the words he reviewed and approved."
33In this case, the question was not whether the Will had the intended legal effect – that is that John’s biological offspring would not be included as beneficiaries notwithstanding the wording that was used. Rather, rectification was available only on the basis that the Will did not conform to John’s instructions, that it did not accurately set out the specific bequests that John communicated to Mr. Zarowsky. Hence, the different outcome in Robinson. In that case, the drafting lawyer deposed that he believed that the testator did not direct her mind to the revocation clause in an Ontario will and did not intend her Ontario will to revoke her Spanish will. However, he had not received instructions to that effect. The court found that there was no error on the part of the lawyer because the Ontario will was drafted in accordance with the testator’s instructions. Accordingly, there was no drafting error and no basis for rectification of the Ontario will. In this case by contrast, the application judge found that the Will did not reflect John’s instructions and therefore, rectification was necessary.
34Given the parties’ agreement that Robinson provided the correct test for rectification of a will and the fact that applying the test in Fairmont Hotels would not require a different analysis or result, we do not give effect to this argument on appeal.
35For these reasons, we find the application judge made no unprecedented application of the equitable doctrine of rectification. Rather, he applied the correct test and considered the evidence required to seek rectification of the Will.
36As for the appellants’ argument about the evidence and standard of proof required, there is no question that extrinsic evidence may be admitted to establish an error in a will when the evidence comes from the solicitor who drafted the will, made the error and can testify to the testator’s instructions: Robinson, at para. 26.
37The application judge correctly applied this standard and properly assessed the evidence against it. He noted that evidence of the circumstances surrounding the making of a will may be considered even if the words in the will appear to be clear on first reading, that only extrinsic evidence of the testator’s intention in making the will and the testator’s relationship to the names and potential beneficiaries are admissible, and that the court’s task is corrective and rectification must be used with caution.
38The evidence here met the test articulated in Fairmont Hotels of showing a “high degree of clarity, persuasiveness and cogency” such that rectification was appropriate. We say so for three reasons.
39First, the application judge found that John’s instructions regarding his Will were clear. John’s 2008 handwritten notes about his Will and Mr. Zarowsky’s handwritten notes of the instructions provided to him by John, supported Mr. Zarowsky’s evidence that John instructed him to prepare a will that transferred his assets upon his death to Ulana and Markian and their children only. There was no evidence that those instructions changed.
40Second, the application judge accepted Mr. Zarowsky’s admission that he did not carry out John’s instructions in the drafting of John’s Will in that neither the Grandchildren Clause nor the Residue Clause reflected John’s intention that his estate go only to Ulana and Markian and their children.
41Third, while the standard form will contemplated an equal distribution of the residue of his estate into as many equal shares as he had children who survived him and their children, there was evidence that John specifically intended to include Ulana and Markian but no evidence that he specifically intended to include Alexander and his children in his estate plan.
42Because the application judge’s conclusions are rooted in the evidence adduced on the application, they are entitled to appellate deference: Johnson v. Johnson, 2022 ONCA 682, 81 E.T.R. (4th) 7, at paras. 9, 15 and 20, leave to appeal refused, [2022] S.C.C.A. No. 444. We see no palpable and overriding error in the motion judge’s application of the evidence to the test for rectification of a will. The principle of testamentary freedom means that John was entitled to draft a will that excluded the appellants: Gironda v. Gironda, 2013 ONSC 4133, 89 E.T.R. (3d) 224, at para. 51 and Gefen at para. 38, citing Spence v. BMO Trust Co., 2016 ONCA 196, 129 O.R. (3d) 561, at para. 30, leave to appeal refused, [2016] S.C.C.A. No. 96.
43Moreover, there is no evidence that the application judge confused will rectification with will interpretation. Rather, he held that it was not necessary to order an interpretation of the Will as John’s intentions in the Will were defeated by errors made by his lawyer in the Will and therefore rectification was appropriate.
44The application judge also correctly applied Lipson v. Lipson (2009), 52 E.T.R. (3d) 44 (Ont. S.C.), when considering the deletion and addition of words to correct an error in a will, by considering whether the Will reflected John’s intentions, reading the Will as a whole and in light of the surrounding circumstances. Rectification is concerned with errors in the recording of the true substance of the intention of the testator.
Disposition
45For these reasons, the appeal is dismissed. Costs are awarded to the respondent in the amount of $10,000, inclusive of disbursements and HST.
“P. Lauwers J.A.”
“K. van Rensburg J.A.”
“Thorburn J.A.”
