DATE: 20011219
DOCKET: C35928
COURT OF APPEAL FOR ONTARIO
CATZMAN, ABELLA and MOLDAVER JJ.A.
BETWEEN:
ANNE DAVIS, Executrix of the Estate of OLGA LACZOVA
Adriana Carnevale, for the appellant
Applicant (Appellant)
- and -
MADONNA HOUSE, SLOVENSKE MISIJNE HNUTIE, MÉDECINS SANS FRONTIÈRES (DOCTORS WITHOUT BORDERS CANADA), THE LEPROSY MISSION CANADA, CHRISTIAN CHILDREN’S FUND OF CANADA, HELP THE AGED, AID TO THE MARTYR CHURCH, LITTLE SISTERS OF THE POOR, AVE MARIA CENTRE OF PEACE, FATHER JOZO JAFKO, POSOL DOKE RUSIKA, RELIGIOUS ORDERS IN PERU, UKRAIJNE SEMINAR – JURIJ DRULJA, UKRAJNE SEMINAR – ELENA AREK CEEBHE, SOCIETY OF ST. PETER THE APOSTLE, COVENANT HOUSE, MARIA HRICOVA, PETER LACZA, MILAN LACZA, ROBER LACA and MARTINA LACZOVA
Lubomir Poliacik, for the respondents
Respondents (Respondents in Appeal)
Heard: October 31, 2001
On appeal from the order of Justice John E. Sheppard dated February 5, 2001.
CATZMAN J.A.:
The appeal
[1] In her lifetime, Olga Laczova purchased retirement savings plans with two banks. She designated four members of her family as the beneficiaries of these plans. Shortly before she died, she drew a holograph will. In it, she listed all of her assets, including reference to the two plans, and listed bequests to the four family members and 18 other legatees, principally charitable institutions. When she died, her estate trustee took the position that the will revoked the earlier designations of her four family members as beneficiaries of the plans and that their entitlement was limited to their specific bequests in the will.
[2] The estate trustee applied to the court for directions. Sheppard J. held that the beneficiary designations in the two plans remained in full force and effect and were not affected by the will. His reasons are reported at (2001), 37 E.T.R. (2d) 262.
[3] This is an appeal by the estate trustee from the order of Sheppard J. For the reasons that follow, I would dismiss the appeal.
The retirement savings plans
[4] In 1985, Olga Laczova (“the deceased”) purchased a Retirement Savings Plan with the Royal Bank of Canada. She designated her brother, Milan Lacza, as beneficiary of the plan. At the date of her death, the Royal Bank plan had a value of $42,112.92.
[5] In 1994, the deceased purchased a Retirement Savings Plan with Scotia Bank. She designated her niece, Martina Laczova, and her nephews, Peter Lacza and Robert Laca, as beneficiaries of the plan. At the date of her death, the Scotia Bank plan had a value of $91,876.49.
The holograph will
[6] On December 22, 1999, the deceased executed a holograph will. She died, less than a month later, on January 18, 2000.
[7] In her holograph will, she listed what she described as her “major assets”. Included were the following references to the Royal Bank and Scotia Bank:
Royal Bank, on 307 Brock St. South, Whitby Ont. L1N 4K3 RSP, Matured GIC, Saving book, approximately 255.000
Scotiabank bank, 185 Brock St. N., Whitby Ont L1N 4H3, approx. 146.000 RSP, Saving book, others (146.000)
Having regard to the values shown for the deceased’s holdings at the Royal Bank ($255,000) and Scotia Bank ($146,000), it is clear that each of the RSPs (valued at the time of her death at $42,112.92 and $91,876.49, respectively) was but one of a number of investments held with each bank.
[8] She then listed 22 individual and charitable beneficiaries (and a direction for payment of her funeral expenses) and set out opposite each the amount of her bequest. The total of the bequests ($605,000) and the amount left for funeral expenses ($25,000) exceeded the total value of the assets ($608,000). The will included a proration provision in the event that the bequests exceeded the total value of the estate.
[9] The will contained no revocation clause. It neither revoked any earlier will nor any designation made in the deceased’s lifetime. Nor did it contain the usual granting clause by which a testatrix gives all of her property to her executor and trustee in trust to carry out the instructions contained in the will. It did not vest in anyone the RSPs or, indeed, any of the listed assets.
The order of Sheppard J.
[10] The estate trustee applied to the court for directions concerning the effect of the provisions of the will on the two RSPs. Sheppard J. found that the beneficiary designation and revocation requirements of the Succession Law Reform Act, R.S.O. 1990, c.S.26 (“the SLRA”) had not been met and granted a declaration that the beneficiary designations made by the deceased during her lifetime in respect of the two RSPs remained in full force and effect and were not affected by her will.
Part III of the SLRA
[11] Part III of the SLRA is entitled “DESIGNATION OF BENEFICIARIES OF INTEREST IN FUNDS OR PLANS”. It contains four sections. In broad overview, s. 50 defines the meaning of the terms “participant” and “plan”; s. 51 deals with the designation of beneficiaries of such plans; s. 52 deals with the revocation of such designations; and s. 53 deals with payment of benefits to, and enforcement of payment by, designated beneficiaries.
[12] Part III, in its entirety, reads as follows:
PART III
DESIGNATION OF BENEFICIARIES OF INTEREST IN FUNDS OR PLANS
SECTION 50
Definitions
- In this Part,
“participant” means a person who is entitled to designate another person to receive a benefit payable under a plan on the participant’s death; (“participant”)
“plan” means,
(a) pension, retirement, welfare or profit-sharing fund, trust, scheme, contract or arrangement or a fund, trust, scheme, contract or arrangement for other benefits for employees, former employees, directors, former directors, agents or former agents of an employer or their dependants or beneficiaries,
(b) a fund, trust, scheme, contract or arrangement for the payment of a periodic sum for life or for a fixed or variable term, or
(c) a fund, trust, scheme, contract or arrangement of a class that is prescribed for the purposes of this Part by a regulation made under section 53.1,
and includes a retirement savings plan, a retirement income fund and a home ownership savings plan as defined in the Income Tax Act (Canada) and an Ontario home ownership savings plan under the Ontario Home Ownership Savings Plan Act. (“regime”) R.S.O. 1980, c. 488, s. 50; S.O. 1990, c. 9, s. 10; S.O. 1994, c. 27, s. 63(4), in force December 9, 1994 (R.A.).
SECTION 51
Designation of beneficiaries
51.--(1) A participant may designate a person to receive a benefit payable under a plan on the participant’s death,
(a) by an instrument signed by him or her or signed on his or her behalf by another person in his or her presence and by his or her direction;
(b) or by will,
and may revoke the designation by either of those methods.
Idem
(2) A designation in a will is effective only if it relates expressly to a plan, either generally or specifically. R.S.O. 1980, c. 488, s. 51.
SECTION 52
Revocation of designation
52.--(1) A revocation in a will is effective to revoke a designation made by instrument only if the revocation relates expressly to the designation, either generally or specifically.
Idem
(2) Despite section 15, a later designation revokes an earlier designation, to the extent of any inconsistency.
Idem
(3) Revocation of a will revokes a designation in the will.
Where will invalid
(4) A designation or revocation contained in an instrument purporting to be a will is not invalid by reason only of the fact that the instrument is invalid as a will.
Idem
(5) A designation in an instrument that purports to be but is not a valid will is revoked by an event that would have the effect of revoking the instrument if it had been a valid will.
Earlier designations not revived
(6) Revocation of a designation does not revive an earlier designation.
Effective date
(7) Despite section 22, a designation or revocation in a will is effective from the time when the will is signed. R.S.O. 1980, c. 488, s. 52.
SECTION 53
Payment and enforcement
- Where a participant in a plan has designated a person to receive a benefit under the plan on the death of the participant,
(a) the person administering the plan is discharged on paying the benefit to the person designated under the latest designation made in accordance with the terms of the plan, in the absence of actual notice of a subsequent designation or revocation made under section 51 but not in accordance with the terms of the plan; and
(b) the person designated may enforce payment of the benefit payable to him under the plan but the person administering the plan may set up any defence that he could have set up against the participant or his or her personal representative. R.S.O. 1980, c. 488, s. 53.
[13] Part III differentiates between, on the one hand, designation of a beneficiary and revocation of such designation by instrument and, on the other, designation and revocation by will. A participant may designate a person to receive a benefit payable under a plan on the participant’s death, either by instrument or by will, and he or she may revoke such designation, either by instrument or by will: s. 51(1). But while there is no qualification for a designation by instrument to be effective, a designation in a will is effective only if it relates expressly to the plan, either generally or specifically: s. 51(2). Correspondingly, while there is no qualification for a revocation by instrument to be effective, a revocation in a will of a designation made by instrument is effective only if it relates expressly to the designation, either generally or specifically: s. 52(1).
The appellant’s submissions
[14] In this court, two submissions were made in support of the appellant’s position that the deceased’s will operated to revoke her earlier designations of her family members as beneficiaries of her RSPs. Ms. Carnevale argued that this result could be achieved by the application of the following subsections of the SLRA:
(i) in combination, ss. 51 and 52(2); or, alternatively,
(ii) s. 52(1).
[15] I will deal with these submissions in the order in which they were argued.
The appellant’s primary submission: s.51(2) and s. 52(2)
[16] Ms. Carnevale’s primary submission was founded on ss. 51 and 52(2) of the SLRA. They provide:
51(1) A participant may designate a person to receive a benefit payable under a plan on the participant’s death,
(a) by an instrument signed by him or her or signed on his or her behalf by another person in his or her presence and by his or her direction;
(b) or by will,
and may revoke the designation by either of those methods.
51(2) A designation in a will is effective only if it relates expressly to a plan, either generally or specifically.
52(2) Despite section 15, a later designation revokes an earlier designation, to the extent of any inconsistency.
[17] Ms. Carnevale argued that the references in the will to
Royal Bank, on 307 Brock St. South, Whitby Ont. L1N 4K3 RSP, Matured GIC, Saving book, approximately 255.000
Scotiabank bank, 185 Brock St. N., Whitby Ont L1N 4H3, approx. 146.000 RSP, Saving book, others (146.000)
constituted designations relating expressly to the two RSPs, either generally or specifically, which were effective by virtue of s. 51(2), and which thus revoked the earlier designations in favour of her family members by virtue of s. 52(2).
[18] I query, but am prepared to assume for the sake of argument, that the simple listing of the RSPs in the will meets the requirement in s. 51(2) of relating “expressly to a plan, either generally or specifically”. Even making that assumption, it is my view that the appellant’s primary submission founders on the absence in the will of any designation that engages the provisions of secs. 51(2) and 52(2).
[19] Though the word “designation” is not defined in Part III, its meaning must comport with the definition of “participant” in s. 50: “a person who is entitled to designate another person to receive a benefit payable under a plan on the participant’s death”. The will in this case contains no such designation. By its terms, it does not designate anyone as the beneficiary of the two plans in question.
[20] Ms. Carnevale conceded that there was no such express designation in the will, but she argued that a designation was implicit in the scheme of the will. She submitted that by listing her major assets in the will, including reference to the two RSPs, and by listing her beneficiaries, the deceased impliedly revoked her previous designations and substituted new ones.
[21] The validity of that submission may be tested by reference to s. 53(a) of the SLRA. By that section, the person administering a plan is discharged on paying the benefit to the person designated under the latest designation made in accordance with the terms of the plan. Assume, for the sake of discussion, that the banks were presented with the deceased’s will and a demand for payment of the benefits under the plans founded upon designations “implicit” in the will. Who, or what, is the object of those implied designations? To whom would the banks be obliged to make payment? To the estate? To the estate trustee? To all of the beneficiaries named in the will collectively? To each of them proportionately? Even on Ms. Carnevale’s “implicit designation” theory, the will provides no guidance with respect to the identity of the beneficiaries of the “implicit” designation which she suggests.
[22] However, Ms. Carnavale cautioned us not to take such an “overly formal” approach to the resolution of this appeal. In support, she relied on the recent decision of this court in Burgess v. Burgess Estate (2000), 2000 CanLII 16989 (ON CA), 52 O.R. (3d) 61. In particular, she relied on two passages appearing in paragraphs 18 and 23 of the reasons in Burgess. The italicized words are the portions that she particularly emphasized:
[18] The SLRA does not require that revocation of a prior designation by instrument follow any particular form or formality. In the present case, Art. 19.01 of the separation agreement referred specifically to “the benefits under the Husband’s deferred profit sharing plan”. That plan was the DPSP in respect of which Desmond had given the beneficiary designation in 1987. There is no suggestion that Desmond had more than one deferred profit sharing plan with Canadian Tire or that he had any such plan with anyone other than Canadian Tire.
[23] The material before the court falls far short of indicating that Desmond intended June to have the “voluntary additional benefit” to which para. 21 refers. As noted, no affiant deposed to the intention either of Desmond or of June at or at any time after the separation agreement was executed. The affidavits of June, the only survivor, cast no light on the subject of intention or on the discussions that surrounded the negotiation and execution of that document. The only evidence we have of Desmond’s intention is what we can appropriately glean from the beneficiary designation in 1987, the separation agreement in 1994 and his last will and testament in 1997.
[23] These passages were urged upon us on the theory that, while the subject under discussion in Burgess was revocation, the court’s comments should apply equally to the subject of designation.
[24] It is important to remember the factual situation in Burgess. In that case, there was no designation by will or revocation by will. The competing designations were in two instruments: the original beneficiary designation made when the plan first came into existence and the agreement executed after the parties had separated. While the decision in Burgess hinged on the effect of a second instrument, the separation agreement, the present case hinges on the effect of the deceased’s will.
[25] That distinction is crucial. Its significance lies in the fact that designation by will and revocation by will carry with them certain statutory prerequisites, whereas designation by instrument and revocation by instrument have no corresponding prerequisites. The opening sentence of para. 18 of the reasons in Burgess –
The SLRA does not require that revocation of a prior designation by instrument follow any particular form or formality [emphasis added]
– was deliberately qualified to indicate that the proposition stated was limited to revocation by instrument. The fact that the SLRA does not require that revocation of a prior designation by instrument follow any particular form or formality is irrelevant to the disposition of this appeal. To apply that language from Burgess, by analogy, to revocation by will is to ignore the conditions the Legislature has seen fit to impose in the statute.
[26] There is a second important distinction between Burgess and the present case. Burgess involved a contest between the deceased’s former wife and his widow regarding his intention. There was a serious dispute between the parties whether the deceased intended his former wife to have the entire proceeds of the deferred profit sharing plan or to have only one-half of the benefits under the plan. Neither side filed any affidavit evidence that shed light on the central question of the deceased’s intention. It was in that context that para. 23 of the reasons in Burgess recorded that the only evidence from which the deceased’s intention could be discerned was that which could be gleaned from the original beneficiary designation, the separation agreement and the deceased’s will.
[27] By contrast, there is in the present case no issue about the deceased’s intention. Mr. Poliacik did not dispute Ms. Carnevale’s description of the deceased’s intention. But the issue in the present case, unlike Burgess, does not revolve around the deceased’s intention. The issue in the present case revolves around the question whether the statutory prerequisites necessary to implement that intention were met in her will.
The appellant’s alternative submission: s. 52(1)
[28] Ms. Carnevale’s alternative argument was founded on s. 52(1) of the SLRA. It provides:
52.(1) A revocation in a will is effective to revoke a designation made by instrument only if the revocation relates expressly to the designation, either generally or specifically.
In her submission, the scheme of the will impliedly revoked the original designations of the deceased’s family members to receive the benefits payable under the RSPs.
[29] A careful reading of s. 52(1) is sufficient to dispose of this alternative argument. Whereas s. 51(2) requires that a designation by will must relate “expressly to a plan, either generally or specifically”, s. 52(1) requires that a revocation in a will must relate “expressly to the designation, either generally or specifically”. But, as Ms. Carnevale acknowledged, nowhere in the deceased’s will is there any expression that relates to either of the previous designations in favour of her family members. By its very language, s. 52(1) renders a revocation in a will that fails to relate expressly to the designation made by instrument ineffective to accomplish that purpose. That language is fatal to Ms. Carnevale’s alternative argument.
Conclusion
[30] Distilled to its essence, the appellant’s argument was that the deceased’s intention was clear and should prevail, notwithstanding any statutory strictures.
[31] In my respectful view, such an argument is inappropriate. The laudable objective of discerning and implementing the deceased’s intention cannot be achieved by ignoring the language of the statute. The sections of the SLRA on which the appellant relies set out requirements which must be met in order to render effective a designation in a will (s. 51(2)) or a revocation in a will (s. 52(1)). To accede to the appellant’s argument would be to disregard words found in those sections.
[32] As I have noted, Mr. Poliacik did not dispute that the deceased’s intention was as Ms. Carnevale contended. Where he parted company from her, as do I, was on the question whether the requirements that the statute lays down for the effective implementation of that intention have been met. In my opinion, for the reasons I have given, they have not.
Disposition
[33] I would dismiss the appeal. Counsel were agreed that the estate should bear the costs of this appeal, those of the successful party on a solicitor and client scale and those of the unsuccessful party on a party and party scale. I would therefore order that the respondents’ costs be paid out of the estate on a solicitor-and-client scale and that the appellant’s costs be paid out of the estate on a party-and-party scale.
Released: DEC 19 2001 Signed: “M.A. Catzman J.A.”
MAC “I agree R.S. Abella J.A.”
“I agree M.J. Moldaver J.A.”
APPENDIX
Last Will December 22/1999
I, Olga Laczova, born in August 28/1933 in Bratislava, Slovakia living on 211 Warden Wilson Ave, Whitby, Ontario L1N 5L2.
Divorced in May 1979, no children, no spouse. Working in Kingston Rd. Eastwood Medical Clinic – doing psychotherapy as physician.
Major assets: House on 211 Warden Wilson Ave., Whitby Ont L1N 5L2.
No mortgage on it. House approximately 170.000 with belongings (contents) and car.
Royal Bank, on 307 Brock St. South, Whitby Ont. L1N 4K3
RSP, Matured GIC, Saving book, approximately 255.000
Scotiabank bank, 185 Brock St. N., Whitby Ont L1N 4H3, approximately 146.000
RSP, Saving book, others (146.000)
Barnett Bank, P.O. Box 9027, Stuart, Fl 34995-9097 (U.S.: 4.000 dollar)
Bank~Austria, Anderungsanftrag, Vienna, No 136-102-312/00/204
Bank Austria AG, AM, Hof 2, A1011 PO Box 271, Vienna
$31,860.50 (Canadian)
Beneficiaries
Madonna House, Combermere, Ont. K0J 1L0 (for their Magadan help) 50.000 dollars
Slovenski Misijne Hnutie, Skuteckeho 4, 97401 Banska Bystrica, Slovak Republic $40.000 doll.
Medecins Sans Frontieres, 355 Adelaide Street W, Suite 58, Toronto, Ont M5V 1S2 $40.000 doll.
The Leprosy Mission Canada, 75 The Donway W. Suite 1416, North York, Ont.
M3C 2E9 $40.000 doll.
Christian Children’s Fund of Canada, 1027 McNicoll Ave., Scarb. Ont. M1W 3X2 25.000 doll.
Help Aged, 99 Fifth Ave, Ottawa, Ont. K1S 5K4 $20.000 doll.
Aid to the Martyr Church, 14 ave du Crochet, Laval, QC H7N 3Z2
Director R. Rev. Radu Roscam, priest $35.000
Little Sisters of the Poor, 96 Trinco Road, Balticaloa, Sri Lanka 20.000 doll.
Ave Maria Centre of Peace, P.O. Box 489, Station U, Toronto, Ont. M8Z 5Y8 $50.000
For Father Jozo Jafko, Medjigorye via Centre of Peace as above 20.000
Posal Doke Rusika, Vydavatelstro, Stefanicova 44, 971701, Trnaba, Slovakia $30.000
For Religious Orders in Peru, Sister Mercedes Markova or other nuns,
Rasaje San Vicente 135, Trujillo, Peru $50.000
- For Ukrajne Seminar – Jurij Drulja, Byr. Gazayutt A, 20 Tymak D KUU for H.
(see via Meest, 34 LV1V BLVD Oshawa, Ont. L1H 3CB; they will deliver it 30.000 dollar
For Ukrajne – Elena Arek Ceebhe, also as above address $20.000
Society of St. Peter the Apostle, 3329 Danforth Ave., P.O. Box 60229, Toronto, Ont. M7Y 2H1 $20.000 16. Covenant House, 20 Gerard St. E, Toronto, Ont. M5B 1P3 $10.000
Funeral Expenses – arrangement $25.000
Anne Davis, 46 Daleside Cr., North York, Ont. M7A 2H1
for expenses, others and her own, given $35.000
Maria Hricova, Pod Lipkou, 08507 Bardejov Slovakia 15.000
for Peter Lacza, my nephew, address Potocka 1, 90028, Ivanka Slovakia Pri Dunaju 15.000
Milan Lacza – brother – same address as Peter $ 10.000
for Rober my nephew Rober Laca, Vranovska 67 85102, Bratislava, Slovakia $ 15.000
Martina Laczova, Chorvatska 146, Senkvice Slovakia $ 15.000
December 22/1999
Olga Laczova, testator
Witness: Anne Davis Anne Davis
46 Daleside Cres. Dec 22, 1999
North York, Ont, M4A 2H6
If totals listed above exceed total value of estate, please prorate accordingly.
The Executor of my estate is to be Anne Davis
46 Daleside Cres., North York, Ont. M4A 2H6
If Anne Davis is not available, her sister is to be appointed
Signed: Olga Laczova Witness: Anne Davis
Dec. 22, 1999
A typewritten version of the will appears as an appendix to these reasons.