COURT FILE NO.: CV-21-000000088-0000
DATE: 20210913
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Sherri Ann Alger and Teresa Darlene Smith Applicants
– and –
Robert Crumb and Karen Black, as Estate Trustees for the Estate of Theresa Lorraine Crumb Respondents
COUNSEL: Shawn McNamara, for the Applicants Robert Crumb and Karen Black, both self-represented
HEARD: July 20, 2021
BEFORE: Justice verner
[1] The deceased Theresa Lorraine Crumb had four children, the Applicants Sherri Ann Alger and Teresa Darlene Smith, and the Respondents Robert Crumb and Karen Black. By her Will, the deceased named the two Respondents as her Estate Trustees. The Applicants bring this Application seeking the removal of the Respondent Robert Crumb as Estate Trustee, or alternatively for an order:
(a) directing the Estate Trustees to pay each of the Applicants $20,000 in accordance with the provisions of the Will; and
(b) directing the Estate Trustees to pay each of the Applicants 25% of the sum total of the deceased’s RRIF and TFSA accounts in accordance with the beneficiary designations that are on file with the bank.
[2] At the hearing, the Applicants did not pursue the relief sought to remove Robert Crumb as Estate Trustee nor did the Respondents contest that the Estate must pay each of the Applicants $20,000 in accordance with the provisions of the Will. The only contentious issue is whether the Respondents are required to each Applicant 25% of the sum total of the deceased’s RRIF and TFSA accounts.
[3] The balance in the RRIF account is $34,136.65 and the balance of the TFSA account is $65,674.72. The deceased designated that the funds in both the RRIF and the TFSA accounts were to be paid to her four children in equal shares (“the beneficiary designations”).
[4] On May 9, 2019, after she had made the beneficiary designations, the deceased signed her Last Will and Testament in her hometown of Kawartha Lakes, Ontario. Neither the RRIF or the TFSA are explicitly mentioned in the Will. The only possible reference to them is in the opening clause of the Will, which reads:
I HEREBY REVOKE all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made.
[5] The issue before me is whether this standard clause revoked the beneficiary designations.
[6] As to the deceased’s intentions, Robert Crumb submitted that the deceased told him that she intended for the Applicants to receive $20,000 each and no more. However, Mr. Crumb did not advise whether the deceased had turned her mind to the beneficiary designations or whether the deceased expressly referenced the RRIF or the TFSA during their conversation. Further, Mr. Crumb did not provide the court with any evidence from the deceased’s lawyer who drafted the will, by affidavit or otherwise. As there is no evidence properly before the court to ascertain the deceased’s instructions, I rely on statute and case law to interpret the implications of the revocation clause in the Will.
LEGAL PRINCIPLES
[7] Part III of the Succession Law Reform Act (SLRA) sets out the statutory framework relating to the designation of beneficiaries in respect of benefits payable under a “plan”. Section 50 defines “plan” such that it would include the RRIF and the TFSA accounts in this matter.
[8] Pursuant to s.52 of the SLRA, a beneficiary designation for a plan will only be revoked by a Will, if the Will “relates expressly to the designation”. Although the Act does not define “designation”, the meaning of the term is apparent form the definition of “participant”, which is defined as, “a person who is entitled to designate another person to receive a benefit payable under a plan on the participant’s death” (emphasis added). The provisions relevant to the revocation of a designation include:
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; or
(b) by will,
and may revoke the designation by either of those methods.
(2) A designation in a will is effective only if it relates expressly to a plan, either generally or specifically. R.S.O. 1990, c. S.26, s. 51.
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.
[9] The issue before me is whether the revocation clause in the Will in this case, namely, “I hereby revoke all … Testamentary dispositions of every nature and kind whatsoever made by me heretofore made” is such that it “relates expressly to the [RRIF and TFSA] designation[s], either generally or specifically” as is required by s.52. That question can be broken down into two questions:
(1) Are the designations at issue “testamentary dispositions”? and,
(2) If so, does the revocation clause in the Will “expressly” relate to those designations?
(1) Are the RRIF and TFSA designations “testamentary dispositions”?
[10] The revocation clause in the Will only possibly revokes the RRIF and TFSA designations made if those designations fit into the definition of “testamentary dispositions”. It is clear, especially in Ontario, that the designations in question are in fact “testamentary dispositions” (Amherst Crane Rentals ltd. v. Perring (2004), 2004 CanLII 18104 (ON CA), 187 O.A.C. 336 (Ont.C.A.), MacInnes v. MacInnes, [1935] S.C.R. 20021).
[11] Therefore, if there was no s.52 of the SLRA, the clause in the Will would clearly revoke the beneficiary designations. In fact, in the recent case of Leslie Estate v. Gough, 2021 NSSC 63, the Nova Scotia Supreme Court considered this exact issue - whether the clause “I hereby revoke all testamentary dispositions” revoked an RRSP beneficiary designation - in a jurisdiction that is not subject to the SLRA, and in a thoroughly reasoned decision, the court found that it did.
(2) Does the term “testamentary dispositions of every nature and kind whatsoever” relate “expressly” to the designations in question, “either generally or specifically”?
[12] The issue before me therefore turns on how s. 52(1) of the SLRA impacts the interpretation of the standard revocation clause. More specifically, the issue turns on whether the phrase “testamentary dispositions of every nature and kind whatsoever” relates “expressly” to the beneficiary designations in question, “either generally or specifically”.
[13] On its face, the answer to that question would seem to be no. There is no express reference specifically to either the RRIF designation or the TFSA designation in the revocation clause in the Will in this case, nor is there any reference to any beneficial designations generally. Although beneficial designations fall under the broad category of “testamentary dispositions” – it would be a stretch to find that mentioning that broad category amounted to “expressly” referencing the RRIF designation or the TFSA designation, either generally or specifically. Therefore, s.52(1) seems to dictate that the designations in this case are not revoked by the Will.
(i) Laczova Estate v. Madonna House (2001), [2001 CanLII 27939 (ON CA)](https://www.canlii.org/en/on/onca/doc/2001/2001canlii27939/2001canlii27939.html), 152 O.A.C. 351
[14] This interpretation is arguably supported by the Court of Appeal for Ontario case of Laczova Estate v. Madonna House (2001), 2001 CanLII 27939 (ON CA), 152 O.A.C. 351. The deceased in that case, Olga Laczova designated two retirement saving plans (RSPs) to four family members. She drafted her Will years later and in the Will she listed those two RSPs as amongst her assets, but did not acknowledge in the Will the beneficiary designation that had previously been made, nor did she specify how those plans were to be vested upon her death. The Will had no revocation clause. The appellant, who was one of the named beneficiaries in the Will, submitted to the Court of Appeal that by listing the RSPs in the Will, the Will implicitly revoked the beneficiary designations that had been previously made. Catzman J.A. rejected this argument, finding that the beneficiary designations were not revoked, since the Will only referenced the RSPs and not the designations – as is required by s. 52(1). He said at paragraph 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. [Italics added by Catzman J.A..]
[15] I must keep in mind that there was no revocation clause in Laczava and it is therefore not exactly on point. However, I note that s. 52(1) requires that “the revocation relates expressly to the designation”, and therefore Catzman J.A. could have easily disposed of this issue on the basis there was no revocation clause in the Will. However, he did not do so. He did not reference the lack of revocation at all in his analysis on this issue. Instead, he focused on the fact that the Will must “expressly” relate to “the designation”.
[16] A more significant difference between Laczova and the case at bar, is that it is very clear that the Will in Laczova does not refer to any type of designation, whereas in this case, the Will refers to “all testamentary dispositions”, which includes beneficiary designations. Despite this difference, I find that Catzman J.A.’s decision is instructive, since he finds that the language in s. 52(1) should be interpreted strictly. He found that a beneficiary designation can only be revoked if the Will “expressly”, rather than “implicitly”, revokes a designation; the language in the Will must demonstrate that the testator turned her mind to the beneficiary designations made before those designations will be revoked. The language in the Will before me, does not so demonstrate.
[17] In paragraph 18 of Laczova Catzman J.A. makes it particularly clear that the term “expressly”, as it is used in the SLRA in relation to beneficial designations, must be strictly interpreted. In paragraph 18, Catzman J.A. was responding to the appellant’s argument that Olga Laczova’s Will designated the RSPs in question, and therefore the earlier designations were superceded by the designation in the Will. The appellant’s argument is based on s. 51(2), which is reproduced here for ease of reference:
(2) A designation in a will is effective only if it relates expressly to a plan, either generally or specifically.
[18] In finding that the Will did not meet the requirements for s. 51(2) and therefore did not make any designation, Catzman J.A. said:
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".
[19] Catzman J.A.’s reluctance to find that the reference in the Will to the RSPs in particular was sufficient to “expressly” relate to “a plan” for the purposes of the SLRA, emphasizes that the term should be strictly, and in fact, narrowly construed. Accordingly, Catzman J.A.’s decision supports the position that the designations in the case at bar were not revoked by the Will.
(ii) Ashton Estate v. South Muskoka Memorial Hospital
[20] Following Laczova, in Ashton Estate v. South Muskoka Memorial Hospital, 2008 CanLII 21421 (ON SC), 2008 CarswellOnt 2592, [2008] O.J. No. 1805 (Ont.S.C.J.), McIssac J. was faced with the exact issue that is now before me, namely whether the male deceased, in stating in his Will that he revoked “all wills and testamentary dispositions of every nature of kind whatsoever made by” him, revoked the beneficiary designations he had previously made on his RRIF account. McIsaac J. concluded that the standard clause did revoke the previous designation. His entire analysis on the issue was as follows:
I am satisfied that the designation in 1998 was a "testamentary disposition" for the purposes of this sub-section and this clause in the will effectively cancelled it: see Laczova Estate v. Madonna House, [2001] O.J. No. 4992 (Ont. C.A.) at paragraph 9.
[21] As can be seen, the only support he provided for his conclusions was a reference to Laczova, which is interesting given that, as discussed above, Laczova seems to support the opposite proposition – that the revocation clause must expressly reference the designation to be effective.
[22] In particular, McIssac J. referenced paragraph 9 of Laczova, in which the Court of Appeal noted that there was no revocation clause in Olga Laczova’s Will. In a paper entitled Revocation of Beneficiary Designations Revisited, Step Inside, Vol. 9, No. 2, June 2010, http://www.step.ca/pdf/stepinside/si2010.6.1.June.pdf at p. 11, practitioner Leanne Kaufman explained McIssac J.’s reliance on Laczova as follows: McIsaac J. “appears to seize upon this distinguishing factor as authority for the proposition that any revocation in the will should be sufficient to satisfy section 52(1) of the SLRA”.
[23] Kaufman suggests that when paragraph 9 of Laczova is read in the context of the entire case, and in particular together with paragraph 29 of that decision, it is apparent that Laczova does not provide support for the conclusion McIssac J. made. Kaufman J. was not alone in her criticism of the decision in Ashton Estate (see: Charles Wagner and Brendan Donovan, Implications of the Ashton Case & Beneficiary Designations, The Six-Minute Estates Lawyer, Law Society of Upper Canada—Continuing Professional Development, May 8, 2017; Dale Rosenberg, Will Revocation Clauses – Whether the clause ‘I revoke all former wills & testamentary dispositions’, contained in a will, has the effect of revoking beneficiary designations, 2013 CARS1MEMO-ONM 9796).
How much weight should be given to McIssac J.’s decision?
[24] Although I am not bound by McIssac J.’s decision – being another decision of the same court - it is persuasive. In McNaughton Automotive Ltd. v. Co-operators General Insurance Co. (2005), 2005 CanLII 21093 (ON CA), 199 O.A.C. 266, Laskin J.A. recommends that courts should be cautious about overruling earlier, non-binding decisions, as it sacrifices “consistency, certainty and predictably”. He recommends the following approach, at least for the Ontario Court of Appeal:
It calls on the court to weigh the advantages and disadvantages of correcting the error in a previous decision. This approach focuses on the nature of the error, and the effect and future impact of either correcting it or maintaining it. In doing so, this approach not only takes into account the effect and impact on the parties and future litigants but also on the integrity and administration of our justice system.
[25] Subsequently, in the case of R. v. Scarlett, 2013 ONSC 562, Strathy J. (as he then was) discussed when a persuasive decision should not be followed at the Ontario Superior Court level. He said:
The decisions of judges of coordinate jurisdiction, while not absolutely binding, should be followed in the absence of cogent reasons to depart from them: see Hansard Spruce Mills Ltd., Re, 1954 CanLII 253 (BC SC), [1954] 4 D.L.R. 590 (B.C. S.C.); R. v. Northern Electric Co., 1955 CanLII 392 (ON SC), [1955] O.R. 431, [1955] 3 D.L.R. 449 (Ont. H.C.) at para. 31. Reasons to depart from a decision, referred to in Hansard Spruce Mills Ltd., Re, include (a) that the validity of the judgment has been affected by subsequent decisions; (b) that the judge overlooked some binding case law or a relevant statute; or (c) that the decision was otherwise made without full consideration. These circumstances could be summed up by saying that the judgment should be followed unless the subsequent judge is satisfied that it was plainly wrong.
[26] I therefore should follow McIssac J.’s decision unless it is “plainly wrong”, keeping in mind that if it is inconsistent with binding authority, namely the Laczova case, it is in fact “plainly wrong”.
Is McIssac J.’s decision “plainly wrong”?
[27] There are several reasons to find that McIssac J. properly decided the issue. It makes sense that when a testator revokes all “testamentary dispositions of every nature and kind whatsoever made by me heretofore made”, that that would include all beneficiary designations – especially since it is clear that “testamentary dispositions” includes all beneficiary designations.
[28] I also note that there should be consistency across provinces, as the testator could prepare and sign their Will in Nova Scotia, for example, but reside in Ontario at the time of their death. In those circumstances, the Will would be prepared in accordance with Nova Scotia law, but executed in accordance with Ontario law.
[29] Finally, I note that the values emphasized by Laskin J.A. in McNaughton, supra, namely “consistency, certainty and predictability” are particularly important in these circumstances. Testators need to know how Wills are going to be interpreted in order to determine how they should be prepared in the first place. Having said that, given the criticism of Ashton Estate, and given that no court enforcing a Will would be bound by that case, Will drafters should not have relied on it. Instead, drafters should have taken the cautious approach and expressly referenced any beneficiary designations being revoked in a Will.
[30] Although there may be reasons to follow McIssac J., the question is whether his decision is “plainly wrong”. I consider that his decision has been met with significant criticism and that his analysis is minimal. More importantly, I consider the language of the relevant provisions and the binding authority. As noted above, on its face, s. 52(1) of the SLRA requires that “the designation” be “expressly” referenced. And importantly, the Court of Appeal for Ontario found in the binding decision of Laczova that s. 52(1) should be strictly interpreted, such that at the very least the Will must reference beneficial designations in a general sense. The Will in Ashton Estate referenced “testamentary dispositions”, but did not reference any “designations”. I therefore find that McIssac J. was “plainly wrong”.
[31] I further find that I am bound, in light of Laczova, to find that the standard revocation clause that was used in the case at bar was insufficient to revoke the RRIF and TFSA designations.
Conclusion
[32] I order that:
(1) The Respondents, in their capacities as Estate Trustees for the Estate of Theresa Lorraine Crumb, shall distribute to each of the Applicants the sum of $20,000 in accordance with the provisions of the Will; and
(2) The Respondents, as Estate Trustees for the Estate of Theresa Lorraine Crumb, shall direct Scotiabank in Lindsay to pay out the funds held on deposit in accordance with the beneficiary designations, on file for the RRIFs and TFSA, subject to any applicable withholding tax.
[33] With respect to costs, given that an interpretation of the provision of the Will was required, this appears to be an appropriate case for payment of costs out of the Estate. Subject to any offers to settle that may have been exchanged, the Applicants are entitled to receipt of their costs and disbursements on a partial indemnity basis, and the Respondents, as Estate Trustees, are entitled to full indemnity costs. If the parties cannot agree on an amount to be paid to the Applicants for their costs, the Applicants may serve and file submissions (limited to 3 pages) with their bill of costs attached within 20 days of today’s date. The Respondents shall serve and file their response (limited to 3 pages) and any bill of costs relied upon, within 40 days of today’s date, with any Reply by the Applicant limited to 1 page, to be served and filed within 45 days of today’s date.
Justice Verner
Released: September 13, 2021
COURT FILE NO.: CV-21-000000088-0000
DATE: 20210913
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Sherri Ann Alger and Teresa Darlene Smith Applicants
– and –
Robert Crumb and Karen Black, as Estate Trustees for the Estate of Theresa Lorraine Crumb Respondents
REASONS FOR JUDGMENT
Justice C. J. Verner
Released: September 13, 2021