Court of Appeal for Ontario

Date: 2022-12-05 Docket: C70523

Before: van Rensburg, Sossin and Copeland JJ.A.

In the Matter of the Estate of Saul Jonas, deceased

BETWEEN:

Naomi Jonas, Deborah Jonas and Mary Ann West, in their capacity as Estate Trustees of the Estate of Saul Jonas Applicants (Respondents)

and

Abraham Jonas, Miriam Young, Naomi Jonas in her personal capacity, Deborah Jonas in her personal capacity, The Office of the Children’s Lawyer in her capacity as litigation guardian for Jordan Jerome Jonas Deonarine, Julian Harold Deonarine, Jesse Saul Deonarine and the unborn grandchildren of Saul Jonas and Shael Eisen in his capacity as litigation guardian for Aaron Shalom Jonas Respondents (Appellant / Respondent)

Counsel: Erica Baron, for the appellant Miriam Young Debra L. Stephens and Jessica L. Karjanmaa, for the respondent Office of the Children’s Lawyer Suzana Popovic-Montag, for the respondent Estate Trustees of the Estate of Saul Jonas

Heard: November 21, 2022

On appeal from the judgment of Justice Cory A. Gilmore of the Superior Court of Justice dated March 18, 2022, and from the costs order dated April 8, 2022.

Reasons for Decision

[1] The appellant, Miriam Young, appeals the judgment of the application judge interpreting the last will and testament of the late Saul Jonas, dated July 31, 2015 (the “Will”). The appellant also appeals the costs order of the application judge.

[2] The appellant is a daughter of the deceased, Saul Jonas, who was a senior lawyer with experience in wills and estates who died on March 26, 2018 (“the date of death”).

[3] Saul Jonas was survived by his common law spouse, Mary Ann West, and his four children, including the appellant. As of the date of death, the deceased had four grandchildren. The deceased’s common law spouse and his daughters Naomi and Deborah were appointed Estate Trustees.

[4] The Office of the Children’s Lawyer (“OCL”) represents the interests of Saul’s grandchildren and unborn and unascertained beneficiaries to the estate.

[5] At the heart of this appeal is the proper interpretation of the clause in the Will dealing with the residue of the estate. The appellant challenges the interpretation of that clause undertaken by the application judge. We are not persuaded that there is any basis to disturb the application judge’s decision. For the reasons that follow, we dismiss the appeal.

Analysis

[6] The relevant clause in the Will reads as follows:

I DIRECT my trustees to divide the rest, residue and remainder of my estate as follows: forty per cent (40%) to be divided equally among my children who shall survive me and sixty per cent (60%) to be divided equally between my grandchildren and my great grandchildren (if any) who shall survive me or be born within ten years of my decease, in equal shares per stirpes. Provided that the share to my grandchildren shall be kept and invested by my trustee and used for the support of such grandchildren and for their education and then paid to each of them upon such grandchild attaining the age of 40.

[7] With respect to the distribution of the 40 percent of the residue, the children have received a partial distribution from the estate which they each, except for the appellant, agree constitutes their 40 percent share.

[8] The dispute relates to the remaining 60 percent of the residue, and in particular the meaning of the term “in equal shares per stirpes” in the context of the residue clause. The Estate Trustees brought an application seeking the court’s opinion, advice, and direction regarding the appropriate distribution. The application judge was presented with six different possible interpretations.

[9] The appellant’s view before the application judge was that all of the residue (including the 60 percent) should be divided equally among the children. That is, according to the appellant, if a child has no children on the vesting date (10 years after the date of death), the child will receive one-quarter of the total residue, being 10 percent of the 40 percent allocation and 15 percent of the 60 percent allocation. Any grandchildren alive on the vesting date will receive an equal share of their parent’s 15 percent share of the 60 percent.

[10] The application judge disagreed with the appellant’s interpretation of the residue clause and preferred that proposed by the OCL, holding that the whole 60 percent shall be divided equally among the grandchildren alive on the date of death plus any grandchildren or great grandchildren born by the vesting date. She also found that the rule in Saunders v. Vautier (1841), 41 E.R. 482 (Eng. Ch. Div.) applied, such that these funds will be available to each beneficiary as of the vesting date and upon reaching the age of 18.

[11] The only issue on this appeal is whether the application judge erred in interpreting the residue clause in the Will, and if so, how it should have been interpreted.

(1) The standard of review

[12] In Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the Supreme Court of Canada confirmed that the standard of review on a pure question of law is correctness. Therefore, if the application judge failed to apply the correct legal test for interpreting the Will, this court may substitute its own interpretation. For questions of fact or mixed fact and law such as the interpretation of the Will itself, which requires determining the testator’s intention and surrounding circumstances, the standard of review is that of palpable and overriding error (unless there is an extricable point of law which is then subject to a correctness standard): Trezzi v. Trezzi, 2019 ONCA 978, 150 O.R. (3d) 663, at para. 15.

(2) The application judge properly applied the “armchair rule”

[13] The application judge properly relied on the “armchair rule” in instructing herself on the process for interpreting the Will. This rule was set out by this court in Dice v. Dice Estate, 2012 ONCA 468, 111 O.R. (3d) 407, at paras. 36-38. The court must determine the testator’s intention as ascertained from the language that was used and the will as a whole. Where the intention cannot be ascertained from the plain meaning of the language used, the court may consider the surrounding circumstances known to the testator when making the will. The court sits in place of the testator and assumes the same knowledge they had of the extent of their assets, the size and makeup of their family, and their relationship to the family members, based on the evidence presented.

[14] While the application judge considered six different interpretations of the residue clause, only two were argued before her, one by the appellant and one by the OCL. Her preference for the OCL interpretation of per stirpes as a “gift over” was based on the testator’s intention to create two classes of beneficiaries and to ensure an equal distribution within those classes. The appellant’s interpretation of per stirpes would have frustrated this intention. She concluded, at para. 17 of her reasons:

Miriam’s position provides a result which gives a far greater benefit to her and her sister Naomi and creates inequality amongst the Grandchildren and great grandchildren. I find that the testator was careful to ensure that each class of beneficiary (the Children and the Grandchildren/great grandchildren) would benefit equally within their Class. Accepting an interpretation that gives any Grandchild less or any Child more would be inconsistent with the Testator’s intentions to be fair to each member of each Class of beneficiary. [Emphasis in original.]

[15] In her factum, the appellant proposes yet a further possible interpretation, which would involve the children holding the 60 percent in residue in trust for the benefit of any grandchildren or great-grandchildren during the vesting period, with the money then reverting to the children only if they themselves had no children or grandchildren after 10 years.

[16] In the appellant’s view, this interpretation reflects the deceased’s intention that each branch (or stirps) of the deceased’s family should be treated equally, and in this way, no greater share of the 60 percent residue would go to one of the deceased’s children who had three of his grandchildren than to another of the deceased’s children who only had one of his grandchildren (or none at all).

[17] The appellant also argues that her interpretation of the Will preserves tax efficiencies that are consistent with the testator’s general predisposition to minimize his tax burden.

[18] The respondent OCL argues that the appellant’s proposed interpretation, as a new argument, is inappropriate to raise for the first time on appeal. It is not necessary to address this issue as the appellant’s submissions on the proposed interpretation of the Will reveal no error in the application judge’s reasoning.

[19] While the appellant relies on case law for her proposed interpretation of per stirpes, including Re Harrington, [1985] O.J. No. 1046 (H.C.) at para. 21, rev’d, (February 19, 1986), 239/85 (C.A.), she has pointed to no case law involving a similar situation as this Will, which creates two separate classes of beneficiaries from two different generations.

[20] We do not accept that the case law interpreting the term per stirpes admits of only one definition. There is also case law supporting the application judge’s understanding of per stirpes as an intention to divide a portion of the estate into equal shares at the nearest generation with surviving heirs, or as a type of “gift-over” mechanism. The application judge, for example, relied on the analysis of this term in Dice Estate.

[21] The OCL submits that the case law makes clear that where a testator fails to identify which generation forms the stirpes, the court must look at the language of the will for context. The application judge took this approach in determining that per stirpes in the context of the Will in this case reflected an intention to benefit the living grandchildren, and any other grandchildren or great grandchildren born within the vesting period, equally.

[22] In our view, the application judge properly applied the armchair rule. The clause at issue is ambiguous. A number of different interpretations were open to the application judge to consider and she chose the one proposed by the OCL because it most closely conformed to her assessment of the testator’s intention, reading the Will as a whole at the time it was made.

[23] The appellant also seeks leave to appeal the costs order of the application judge, and in particular the order that 60 percent of the costs to the respondents be paid by her personally, with the other 40 percent to be paid by the estate.

[24] In her reasons, the application judge indicated that she considered awarding costs to the respondents entirely from the estate, but decided instead that it was more appropriate that a portion of the costs should be borne by the appellant, given the terms of the offers made to the appellant to settle the dispute, and the delays which the application judge found were caused by the appellant.

[25] The application judge’s costs award was clearly open to her under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and r. 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. We see no basis on which to interfere with the application judge’s exercise of discretion in apportioning the costs as she did between the appellant and the estate.

Disposition

[26] For these reasons, the appeal from the order of the application judge interpreting the Will is dismissed. Leave to appeal the order of costs by the application judge is granted but the appeal is dismissed.

[27] The respondent OCL is entitled to its costs of the appeal in the amount of $17,771.78, payable by the appellant personally or out of her share of the Estate.

K. van Rensburg J.A.

L. Sossin J.A.

Copeland J.A.