COURT FILE NO.: CV-22-1075-00ES DATE: 2023/06/13
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Carrie-Lee Hofman Applicant
– and –
Nancy Lougheed, in her capacity as Estate Trustee with a Will of the Estate of Shirley Cunningham, deceased, and as Trustee of the Tenny Clark-Drost Trust, Frances Dittenhoffer, in her capacity as Estate Trustee with a Will of the Estate of Shirley Cunningham, Clark-Drost Trust and Kimberly Cunningham Respondent
COUNSEL: Joshua D.A. Laplante, for the Applicant Alan J. Butcher, for the Respondent, Kimberly Cunningham Matthew Harmes, for the Respondent, Nancy Lougheed in her capacity as Estate Trustee with a Will of the Estate of Shirley Cunningham, deceased, and as Trustee of the Tenny Clark-Drost Trust
HEARD: May 19, 2023
The Honourable Mr. Justice M.J. Valente
JUDGMENT ON APPLICATION
Overview
[1] In this application, the Applicant, Carrie-Lee Hofman (‘Carrie-Lee’), and the Respondent, Kimberly Cunningham (‘Kimberly’), seek the opinion, advice, or direction of this court as to whether the true meaning, intent and effect of the language in the General Will (‘the ‘General Will’) and the Limited Property Will (the ‘Limited Will’) of Shirley Cunningham (‘Shirley’), executed on June 12, 2002, is that Kimberly is to be considered a child of Tenny Clark-Drost (‘Tenny’).
[2] Carrie-Lee’s position is that pursuant to the true meaning, intent and effect of the relevant testamentary provisions, Kimberly is not to be considered a child of Tenny and that she, Carrie-Lee, is the sole beneficiary of the whole of the property constituting the Tenny Clark-Drost Trust (the ‘Trust’). Carrie-Lee seeks a declaration that she is the sole beneficiary of the whole of the property constituting the Trust.
[3] For her part, Kimberly submits that based on the true meaning, intent and effect of the language of the General Will and the Limited Will of Shirley, she is a child of Tenny, and together with Carrie-Lee, they are beneficiaries of the Trust property. Kimberly seeks, together with other relief, rectification of the General Will and the Limited Will to accord with Shirley’s intention that she, Kimberly, be considered a child of Tenny pursuant to the provisions of the two wills, and in particular, the provisions of the Trust.
[4] The Respondent, Nancy Lougheed (‘Nancy’), in her capacity as trustee of the estate of Shirley and of the Trust supports the position of Kimberly. The Respondent, Frances Dittenhoffer, although named as an estate trustee and trustee of the Trust, has stepped aside from active management of Shirley’s estate and takes no position on the application.
Background Facts
[5] Certain background facts have been stipulated by the parties in an Agreed Statement of Facts for which I am grateful. Otherwise, I am of the view that other relevant facts to this application are not disputed. I describe below the facts that I have considered in determining the issues before me.
[6] Shirley had three children, Tenny, Nancy, and Douglas. Tenny, Shirley’s first child, was born when Shirley was 17 years of age and prior to her marriage to Dick Cunningham.
[7] Tenny married John Hofman in 1970. Five years later, Tenny’s first child, Carrie-Lee was born. A few years after Carrie-Lee’s birth, Tenny and John Hofman separated and in August 1980, they divorced.
[8] In February 1980, while separated from John Hofman but prior to her divorce, Tenny had her second child, Kimberly. Kimberly’s father is Steven Trudgeon.
[9] Carrie-Lee lived with her father, John Hofman, and Kimberly lived with her mother, Tenny, and stepfather, George Drost.
[10] Tenny had a drinking problem and was often out on weekends with the result that Kimberley spent some two to three weekends per month as a child with Shirley and Dick Cunningham. All the evidence suggests that while growing up Kimberly had a positive relationship with her grandmother, Shirley.
[11] During their childhood the two half sisters, Carrie-Lee and Kimberly, had little connection. In or about the early 1990s when Carrie-Lee was approximately 18 years of age and Kimberly was around 13 years old, Shirley arranged a trip to Disney World with the two girls to build a connection between them.
[12] In June 1990 Nancy gave birth to Shirley’s granddaughter, Bailey Lougheed (‘Bailey’). Bailey’s parents were not married at the time of her birth but subsequently did marry.
[13] Later, in August 1996, Carrie-Lee gave birth to Shirley’s sole great grandson, Darren Hofman (‘Darren’). Darren was born when Carrie-Lee was unmarried to his father. Carrie-Lee remains unmarried to Darren’s father.
[14] In September 2001 Nancy gave birth to Gillian Bun (‘Gillian’) at a time when Nancy was not married to Gillian’s father. According to the parties’ Agreed Statement of Facts, unlike in the case of Bailey, Nancy did not subsequently marry Gillian’s biological father.
[15] Shirley died on December 7, 2008, followed by Tenny’s death on December 13, 2021.
[16] Shirley died with the General Will and the Limited Will as a part of a dual estate plan.
[17] Prior to signing the General Will and the Limited Will on June 12, 2002, Shirley had signed a will in 1997 (the ‘1997 Will’). The 1997 Will updated Shirley’s prior will to include a Henson Trust for her granddaughter, Bailey, who has a disability.
[18] Shirley’s will was again updated in 2001 when she signed a revised will on March 1, 2001 to create the Trust for Tenny and to include a gift of $5,000 to her great grandson, Darren (the ‘2001 General Will’). In November 2001 Shirley also signed a limited property will to address her interest in the corporation, R.W. Cunningham and Associates Inc. (the ‘2001Limited Will’).
[19] Because Shirley’s long-time lawyer, Charles LeBrun (‘LeBrun’), wanted to have the 2001 General Will and the 2001 Limited Will concurrently dated, the General Will and Limited Will were ultimately signed in 2002. Apart from minor differences necessary for the implementation of a dual will estate plan, the General Will and Limited Will are substantially identical to the 2001 General Will save and except Shirley’s granddaughter, Gillian, born in September 2001 was added to the wills signed in 2002 to provide that should Shirley’s daughter, Nancy, predecease her, Nancy’s share of the estate was to be divided in three equal shares to each of her three children, including Gillian.
[20] There is no dispute as to the validity of the General Will and the Limited Will.
[21] The General Will and the Limited Will divide Shirley’s estate into three equal shares, one for each of Shirley’s three children. The share to which Tenny is entitled is held in the Trust. Pursuant to the terms of the Trust, Tenny is to receive the benefit of the interest income of the Trust with the accumulated capital divided into as many equal shares as there are “children” of Tenny and are payable to “each child” of Tenny alive on her death (the ‘Trust Clause’).
[22] The Trust Clause reads as follows:
Provided my daughter, TENNY CLARK-DROST, (hereinafter referred to as “TENNY”), survives me, one such equal share shall be held in trust and invested by my Trustees in a trust to be known as THE TENNY CLARK-DROST TRUST, for the benefit of my daughter, TENNY, for her lifetime. During the lifetime of my daughter, TENNY, my Trustees shall pay all of the income from THE TENNY-CLARK-DROST TRUST to my daughter, TENNY, to be hers absolutely, at such time or times and in such instalments as my Trustees and TENNY shall agree. My Trustees shall retain the capital of THE TENNY CLARK-DROST TRUST in the trust and there shall be no encroachment upon the capital of the trust during the lifetime of my daughter, TENNY. Upon the death of my daughter, TENNY, (the “Distribution Date”) the capital of THE TENNY CLARK-DROST TRUST, shall be divided into as many equal shares as there shall be children of TENNY alive on the Distribution Date. One such equal share shall be paid or transferred to each child of TENNY who has attained the age of 40 years on the Distribution Date, provided that if any child of TENNY has not attained the age of 40 years on the Distribution Date, then my Trustees shall hold and invest such child’s share in trust until such child has attained the age of 30 years when one half (½) of the child’s share shall be paid or transferred to him or her. Thereafter, my Trustees shall continue to hold the balance of such child’s share in trust until he or she attains the age of 40 years when the balance of such child’s share, including any accumulated income, shall be paid or transferred to such child of TENNY for his or her own use absolutely.
[23] The Trust Clause is identical in each of the General Will and the Limited Will as well as in the 2001 General Will.
[24] The General Will and the Limited Will also include a definition of a blood relation, or a relation traced through marriage. Pursuant to the definition, the term “children” shall not include a person born outside of marriage (the ‘Exclusion Clause’).
[25] The Exclusion Clause provides as follows:
ANY REFERENCE in this Will or any Codicil to a person, other than a person specifically named, in terms of a relationship to another person determined by blood or marriage shall not include a person born outside marriage or a person who comes within the description traced through another person who was born outside marriage. However, any person who has been legally adopted or is in the course of being legally adopted shall be regarded as having been born in lawful wedlock to his or her adopting parent and any person who is born outside marriage and whose natural parents subsequently marry shall be regarded as having been born in lawful wedlock.
[26] The Exclusion Clause, like the Trust Clause, is identical in each of the General Will and the Limited Will as well as in the 2001 General Will. The Exclusion Clause was also included in the 1997 Will.
[27] Shirley initialled each page of the General Will and the Limited Will along with the 2001 General Will. She also initialled directly next to the Exclusion Clause in each of the three wills.
[28] LeBrun prepared Shirley’s estate’s probate application naming Kimberly as a beneficiary along with Darren and Gillian who each received a gift of $5,000.
The Evidence of LeBrun
[29] LeBrun was cross examined as a non-party in support of the two applications.
[30] According to LeBrun’s note of February 13, 1997, Shirley advised him that she had three children and seven grandchildren. The Agreed Statement of Facts stipulates that Shirley’s seven grandchildren at the time were Tenny’s two daughters, Carrie-Lee and Kimberly, Nancy’s two children, Bailey and Alex, and Douglas’ three children, Brian, Beth and Kellie.
[31] LeBrun testified that in late January 200, Shirley contacted him by telephone to provide him with will instructions. LeBrun’s undated notes of that call were produced in evidence. Apart from instructing LeBrun to include her only great-grandchild, Darren, with her grandchildren to receive a $5,000 gift upon her passing, Shirley advised her lawyer that Tenny had two children, aged 24 and 21 years of age. Shirley also advised LeBrun that Tenny had a drinking problem, and she had no contact with her since Christmas. In late January 2001 Shirley also instructed LeBrun to gift Tenny $100,000 should her daughter survive her with no gift over to Tenny’s children.
[32] On February 26, 2001, Shirley again contacted LeBrun with revised will instructions. Like LeBrun’s January telephone conversation notes, the notes of his February 26, 2001 call with Shirley are in evidence. In the February conversation, Shirley advised LeBrun that she did “not want the stress among [Tenny’s] children that would result if Tenny only was to have $100,000” with no gift over. In these circumstances, Shirley instructed LeBrun to set up the Trust, comprised of one-third of the residue of her estate. Shirley’s instructions to her lawyer also provided that Tenny was to receive income only from the Trust during her lifetime with discretion given to the trustees to encroach on the capital.
[33] On Tenny’s death, Shirley’s instructions to LeBrun were that Tenny’s two daughters would receive the capital of the Trust in equal shares. Although LeBrun recommended that half of the capital of each daughter’s share be received at age 25 with the balance at age 35, Shirley’s instructions were that each of Tenny’s daughters were to receive half of the capital due to them at age 30 with the balance at age 40.
[34] LeBrun testified that Shirley did not tell him why she wanted to defer the age at which Tenny’s two daughters received the gift over of the Trust residue. On the other hand, Shirley did specifically advise him that Tenny “will not respect money”, and for that reason, she did not want the Trust residue to go to Tenny’s husband or their restaurant business.
[35] LeBrun confirmed that the Exclusion Clause is a standard clause in the wills he drafts.
[36] LeBrun also testified, however, that he was never informed that there were children in Shirley’s line of descent born outside of marriage, and had he been told, he would not have included the Exclusion Clause in the wills he drafted for Shirley.
[37] LeBrun stated on his cross examination that he explained the significance of the Exclusion Clause to Shirley. Although based on the totality of his evidence, I am of the view that LeBrun has no specific recollection of explaining the Exclusion Clause to Shirley, I am prepared to accept LeBrun’s position given the usual meticulous practice he described in reviewing a will with a client prior to signature.
Applicable Legal Principles
[38] Kimberly’s claim for rectification is based on establishing that Shirley’s instructions were not carried out by LeBrun. In support of her position, Kimberly relies on the terms of the General Will and the Limited Will together with Shirley’s relationship with her immediate family and the testimony of LeBrun respecting the circumstances surrounding the making of both the General and Limited Wills and Shirley’s instructions to him.
[39] Each of the parties rely on Justice Belobaba’s decision in Re Estate of Blanca Esther Robinson, [2010] O.J. No. 2771 (‘Robinson Estate SCJ’), and affirmed in Rondel v. Robinson Estate, 2011 ONCA 493 (“Robinson Estate OCA”), for the applicable legal principles pertaining to rectification of a will. In Robinson Estate SCJ, Justice Belobaba explained that in the context of estates, the court has the equitable jurisdiction of rectification, “aimed mainly at preventing the defeat of the testamentary intentions due to errors or omissions by the drafter of the will” (at para. 25). Justice Belobaba set out three circumstances where courts will rectify a will where it is otherwise unambiguous, and the testator has reviewed and executed it. Specifically,
When there is no ambiguity on the face of the will and the testator has reviewed and approved the wording, the Anglo-Canadian courts will rectify the will and correct unintended errors in three situations:
- Where there is an accidental slip or omission because of a typographical error or clerical error;
- Where the testator’s intentions have been misunderstood; or
- Where the testator’s instructions have not been carried out (at para. 24).
[40] Justice Belobaba refused to grant rectification based on the facts of the case before him because he found that there was no error on the part of the drafting solicitor. On the contrary, the will was drafted pursuant to the testator’s instructions and later reviewed and executed by the testator. According to Justice Belobaba’s findings “[i]f a mistake was made, it was made by the testator” (at para. 29).
[41] In his decision, Justice Belobaba explained that the remedy of rectification is not available to correct a testator’s mistaken belief of the legal effect of words that the testator reviewed and approved.
[42] In determining whether a mistake, if any, has been made by the drafting solicitor, the issue is what type of evidence outside of the will may be considered by the court. Indirect extrinsic evidence of the testator’s intentions is generally admissible. Indirect extrinsic evidence includes the character and occupation of the testator, the amount and condition of the testator’s property, and the number, identify, and general relation of the immediate family and the relatives of the testator (see: Marion v. Marion Estate, [2009] O.J. No. 887 (‘Marion Estate’) at para. 26). On the other hand, direct extrinsic evidence is generally inadmissible (see: Marion Estate, paras. 27-28) Inadmissible direct extrinsic evidence is typically third-party evidence attesting to the testator’s intentions. The policy reasons for the exclusion of direct extrinsic evidence is clear: routine admissions of evidence of third parties about a testator’s intentions would create uncertainty and estate litigation if disappointed beneficiaries could challenge a will based on their own beliefs as to the testator’s intentions (see: Love v. Wheeler, 2019 ONSC 4427 at para. 23).
[43] In Robinson Estate OCA, the Court of Appeal considered the common law position on the admissibility of extrinsic evidence of the testator’s intention in the context of an unambiguous will. The Court of Appeal affirmed Justice Belobaba’s finding that “where there is no ambiguity on the face of the will, and no drafting error of any sort, and the will has been received and approved by the testator before it was executed”, the court will not rectify on the basis of third-party evidence that the testator was mistaken and did not mean what was said (see: Robinson Estate OCA, at para. 17).
[44] Having said that, Justice Belobaba in Robinson Estate SCJ accepted that direct extrinsic evidence in the form of the testator’s instructions to the drafting solicitor can be considered to establish an error “where it comes from the solicitor who drafted the will, made the error and can swear directly about the testator’s instructions” (at para. 26). For its part, the Court of Appeal approved Justice Belobaba’s observation and stated that “extrinsic evidence of the testator’s circumstances and those surrounding the making of the testator’s will may be considered, even if the language of the will appears clear and unambiguous on first reading” (see: Robinson Estate OCA, at para. 24).
[45] Following the Robinson Estate SCJ and Robinson Estate OCA decisions, Justice Matheson in Darradick v. McKeand Estate, 2012 ONSC 5622 and Justice Greer in The Bank of Nova Scotia Trust Company v. Haugrad, 2016 ONSC 8150 admitted in evidence the testator’s will instructions to the drafting solicitor to both determine the testator’s intention and correct an unintended error by the drafter of the will. All the parties rely on the very recent decision of this court in Gorgi v Ihnatowych, 2023 ONSC 1803 (‘Gorgi’) where Justice Sanfilippo admitted the evidence of the drafting solicitor to the “extent that it pertains to the circumstances surrounding his preparation of the Will, the execution of the Will by the testator and the testator’s instructions “to the drafting lawyer (at para. 30). While Carrie-Lee concedes that the evidence of the drafting solicitor was properly admitted by the Court in Gorgi for the limited purposes quoted above, she points out that Justice Sanfilippo did not admit any direct extrinsic evidence as to the testator’s intentions.
[46] Based on the authorities, I accept without reservation that direct extrinsic evidence respecting Shirley’s intentions is not to be considered by me in deciding the issues. On the other hand, in reliance upon these same authorities, I have no reservation in considering the indirect extrinsic evidence of Shirley’s intentions as well as her instructions to LeBrun to determine if the General Will and the Limited Will should be rectified to correct a mistake on the part of the drafting solicitor.
Discussion
[47] Carrie-Lee’s position is that if a mistake was made with respect to the legal effect of the Exclusion Clause, it was a mistake on the part of Shirley and not that of LeBrun. For this reason, Carrie-Lee argues this court has no jurisdiction to rectify the subject wills. Carrie-Lee’s submission is that there is only one interpretation of the General Will and the Limited Will and that is that Shirley intended for her estate to pass to those either specifically named or those who fit within her restrictive definition of “children” as stipulated in the Exclusion Clause. According to Carrie-Lee, this is the only reasonable interpretation when one considers the surrounding circumstances and that the Exclusion Clause was included in a total of four wills signed by Shirley.
[48] In my opinion, however, a consideration of the surrounding circumstances raises doubt about the otherwise clear language of the General Will and the Limited Will. As Justice Chozik comments in Love, “[s]ometimes ambiguity is only apparent in light of surrounding circumstances” (at para. 22).
[49] As I see them, the relevant surrounding circumstances that assist in determining the true intention of Shirley in the disposition of her property, include the following:
a) Firstly, I find that there is no evidence to suggest that that Shirley treated any of her children, grandchildren or great grandchildren born to unmarried parents differently from those born to married children. On the contrary, the evidence is that Shirley had a positive relationship with Kimberly as a child and there is nothing before me to cause me to conclude that the bond between Shirley and her granddaughter deteriorated over time. b) In 1997 Shirley advised her lawyer she had three children and seven grandchildren. It does not escape me that in 1997, three of Shirley’s children and grandchildren (Tenny, Kimberly and Bailey) were born to parents who were not married to each other at the time of their birth. c) Shirley not only specifically provided for Bailey in the 1997 Will with the inclusion of a Henson Trust but in the 2001 General Will, she included a specific bequest in favour of her great grandson Darren. Darren was born to Carrie-Lee in August 1996 when she was not married. d) Finally, the 2001 General Will and the General and Limited Wills are substantially identical subject to one exception: Shirley included her granddaughter Gillian, born in September 2001 to Nancy when Nancy was unmarried. The 2002 wills provide that should Nancy predecease Shirley, Nancy’s share of the estate would pass equally to her three children, Bailey (subject to the Henson Trust), Alex and Gillian.
[50] In his cross examination, LeBrun acknowledged that had he known that Shirley had “illegitimate” children, grandchildren or great grandchildren, he would not have included the Exclusion Clause in the wills. Carrie-Lee submits that the lack of knowledge on the part of LeBrun and the inclusion of the Exclusion Clause is not the solicitor’s a mistake but rather Shirley’s misunderstanding of the legal effect of the clause. For this reason, Carrie-Lee urges this court to follow Justice Belobaba’s decision in Robinson Estate SCJ and dismiss Kimberley’s application.
[51] In my opinion, the facts considered by Justice Belobaba are distinguishable from the facts of this case. In Robinson Estate SCJ, the testator intended to revoke her prior Canadian will but misunderstood the far-reaching effect of the revocation. In the case before me there is no evidence that Shirley instructed LeBrun that children born out of wedlock were to be excluded as estate beneficiaries. Rather the Exclusion Clause was included at the discretion of LeBrun in accordance with his usual will drafting practice. Furthermore, there is no evidence to suggest that Shirley misunderstood the legal consequences of the Exclusion Clause.
[52] To my mind, the real issue is that the drafting of the General Will and the Limited Will did not conform with Shirley’s instructions. Those instructions included a specific direction to establish a trust for Tenny equal to one-third of the estate residue from which Tenny was to receive income only with a gift over to Tenny’s two daughters. Shirley also instructed LeBrun that each of Tenny’s daughters were to receive half of their capital entitlement at age thirty and the balance at forty years of age. In 2001 when Shirley provided these instructions to LeBrun, Tenny’s only two daughters were Carrie-Lee and Kimberly. It is obvious that Shirley intended to benefit Carrie-Lee and Kimberly equally on Tenny’s passing.
[53] With those specific instructions, it was LeBrun’s decision to refer to the beneficiaries of the Trust gift over by beneficiary class as opposed to by name. It was also the drafting lawyer’s decision to include the Exclusion Clause. Specifically, the General Will and the Limited Will provide that upon Tenny’s death, the capital of the trust “shall be divided into as many equal shares as there shall be children of Tenny alive” on the date of her death. LeBrun’s gifting by class instead of naming the specific persons intended, together with his insertion of the Exclusion Clause, fail to carry out Shirley’s instructions. In my opinion, this is a case of the drafting solicitor’s mistake.
[54] I am also of the opinion that the facts of the matter before me are akin to those considered by Justice Sanfilippo in Gorgi where rectification was ordered. In Gorgi, the testator had three children, two with his spouse and a third child with a woman to whom he was not married (the ‘third child’). The existence of the third child was unknown to the drafting lawyer. While the testator instructed his lawyer to prepare a will on the basis of an equal sharing of the estate between two of his named children without any mention of the third child, the lawyer drafted the will by referring to the testator’s “issue” and “grandchildren” without naming the two intended beneficiaries. Justice Sanfilippo found that although the testator was aware of the third child, it was not his mistake as to the legal effect of the will’s provisions. Rather it was the drafting lawyer’s mistake in carrying out the testator’s instructions.
[55] In recognition that the “court’s task in a rectification case is corrective, and not speculation, and is utilized with abundant caution” (see: Binkley Estate v. Lang [2009] O.J. No. 2167), I am satisfied for all the above noted reasons, that the General Will and the Limited Will contain an unintended error by the drafting lawyer to the extent that Shirley’s instructions have not been carried out. Specifically, with the inclusion of the Exclusion Clause, Kimberly is excluded from benefitting from one half of the Trust capital. This result is contrary to Shirley’s instructions. I therefore conclude that the principles of rectification as set out in Robinson Estate SCJ have been satisfied and support the order for rectification requested by Kimberly.
[56] Justice Pattilo in Lipson v. Lipson, at paragraph 42, succinctly enumerates the four requirements for the deletion or insertion of words to correct an error in a will. I am satisfied that a drafting mistake has been made that does not accurately express Shirley’s intentions to benefit Kimberly with one half of the Trust capital upon the passing of Tenny. I am also satisfied that the deletion of the Exclusion Clause, as proposed by Kimberly, will give effect to Shirley’s intention, as determined from a reading of the General Will and the Limited Will as a whole and in light of the surrounding circumstances.
[57] Considering my decision that the General Will and the Limited Will shall be rectified, I find that it is not necessary for me to issue an order interpreting Shirley’s two wills as requested by Carrie-Lee and Kimberly.
Disposition
[58] Based on my reasons, a Judgment will issue deleting:
a) clause VI of the General Will; and b) clause VIII of the Limited Will.
Costs
[59] I would encourage the parties to agree on the issue of costs. In the unfortunate event, however, that they are unable to agree on costs, I am prepared to consider written cost submissions.
[60] The party seeking costs shall deliver cost submissions within fifteen (15) days of this Judgment and the responding party shall deliver responding cost submissions within ten (10) days of receipt of the submissions of the party seeking costs. Reply submissions, if any, are to be delivered within five (5) days of receipt of the submissions on behalf of the responding party. The initial and responding submissions are not to exceed five (5) pages double spaced excluding cost outlines, offers to settle and authorities. Any reply submissions are not to exceed two (2) pages. All submissions are to be sent to my attention via my Judicial Secretary by email to Brontae.Frook@ontario.ca with a copy to the Kitchener.SCJJA@ontario.ca email address.
M.J. Valente, J Released: June 13, 2023
