Court File and Parties

COURT FILE NO.: 21-672440-00ES DATE: 20220406 SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE MATTER OF THE ESTATE OF LYNDA WEINRIB, deceased; and IN THE MATTER OF THE LYNDA WEINRIB ALTER EGO TRUST

RE: Tal Vilenski, Applicant AND: Adrienne Weinrib-Wolfman, Nicole Weinrib-Prussky, Alexandra Wolfman, Jacob Wolfman, Shane Prussky, Matthew Prussky, Ryan Prussky, The Office of the Children's Lawyer for and on behalf of all minor, unborn, and unascertained beneficiaries and The Jewish Foundation of Greater Toronto, Respondents

BEFORE: Kimmel J.

COUNSEL: Holly Cunliffe/Archie Rabinowitz, for the Applicant Email: hcunliffe@airdberlis.com; arabinowitz@airdberlis.com Chaya Rabins, observing for the Jewish Foundation of Greater Toronto, potentially affected beneficiary Email: crabins@ujafed.org

HEARD: March 29, 2022

Endorsement

[1] The applicant is the estate trustee of the estate of Lynda Weinrib (the “Estate”) and trustee of the Lynda Weinrib Alter Ego Trust (the “Trust”). The respondents are the beneficiaries and potential beneficiaries of the Estate and the Trust.

[2] The Office of the Children’s Lawyer (“OCL”), on behalf of minor unborn and unascertained beneficiaries, does not oppose the relief that is sought by the applicant. All other respondents, comprising the named beneficiaries of the Estate and the Trust, consent to judgment in the form presented by the applicant to deal with the following substantive issues that have arisen in the administration of this Estate and Trust by way of, inter alia, declarations that:

a. A photocopy of the Last Will and Testament of Lynda Weinrib executed January 12, 2017 (the "2017 Will") is valid, and that a Certificate of Appointment may issue to the applicant upon the filing of the necessary supporting application.

b. Clause 4(d) of the 2017 Will (the "Pour Over Clause"), which provides that the residue of the Estate shall be transferred to the trustees of the Trust settled March 30, 2016, is a valid clause.

c. That real property which was held in joint tenancy by the Deceased and her adult daughter immediately prior to the Deceased's death is not an asset of the Estate but was a true gift of the property to her daughter Nicole Weinrib-Prussky (“Nicole”) by way of right of survivorship.

[3] The first and third issues are straightforward and can be resolved on the basis of the consents of the adult beneficiaries and the non-opposition of the OCL. The second issue requires some legal analysis.

[4] I find that the record supports the first and third declarations above. The photocopy of the 2017 Will is a valid will and Lynda’s daughter Nicole has an interest in the condo property as the surviving joint tenant. However, the Pour Over Clause in the 2017 Will is not valid at law and the residue of the Estate will be distributed by way of an intestacy.

The Validity of the 2017 Will

[5] The applicant relies on r. 75.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:

The validity and contents of a will that has been lost or destroyed may be proved on an application, (a) by affidavit evidence without appearance, where all persons who have a financial interest in the estate consent to the proof; or (b) in the manner provided by the court in an order giving directions made under rule 75.06.

[6] All identified persons who have a financial interest in the estate consent to the proof of the photocopy of the 2017 Will. This aspect of the application could have proceeded in writing on consent. The OCL does not oppose this proof. The record establishes that the original will cannot be located, and it supports the declaration sought.

The Right of Survivorship in the Condo

[7] The transfer of the condominium into a joint tenancy between Lynda and her daughter Nicole occurred on November 9, 2020, prior to Lynda’s death, on June 9, 2021 for no consideration. No concerns have been raised and the evidence demonstrates that the transfer was intended to be a gift and/or compensation for Nicole living with and caring for Lynda, rebutting the presumption of a resulting trust.

[8] All beneficiaries with a financial interest in the estate consent to the declaratory relief sought, which arises from the right of survivorship of Nicole.

[9] The declaratory relief sought regarding Nicole’s interest in the condo as the surviving joint tenant is appropriate in the circumstances.

The Validity of the Pour Over Clause in the 2017 Will

[10] This issue, involving the validity of the Pour Over Clause contained in the 2017 Will, is what necessitated the hearing of what would otherwise have been a consent matter. All of the beneficiaries with a financial interest in the estate consent to the declaration of validity that is sought, and the OCL does not oppose it.

[11] However, the applicant and his counsel were prudent to bring to the court’s attention that there is no decided case that they could find in Ontario that deals directly with the validity of a pour over clause. Additionally, there are competing authorities in British Columbia (holding them to be invalid) and in Nova Scotia (holding them to be valid).

[12] The Pour Over Clause in the 2017 Will reads as follows:

4. (d) Residue My Estate trustee shall pay or transfer the residue of my estate to the trustees of The Lynda Weinrib Alter Ego Trust (the said trust having been established by me immediately prior to the signing of this my Will) who are holding such office at the time of my death or, if there is no person holding the said office at the time of my death, the trustees who are first appointed to such office after my death.

[13] This clause directs the residue of the Estate to be paid/transferred into an inter-vivos Trust.

[14] In Quinn Estate, 2019 BCCA 91, the British Columbia Court of Appeal considered the perceived problem with pour over clauses:

[16] Against this backdrop, there are two problems with the pour-over clause in Mr. Quinn's will. They both arise from the fact that the [Trust] is amendable and revocable and the fact that indeed it was amended after the execution of Mr. Quinn's will and without regard to the Wills Act formalities. The first problem is that the sixth clause purports to reserve onto Mr. Quinn the right to make, effectively, a testamentary disposition in the future without complying with the formalities of the Wills Act (or WESA).

[17] The second problem is that because the [Trust] is amendable, one cannot know with certainty the actual disposition purported to be made by Mr. Quinn — it is governed by terms that are not found in the will itself.

[15] The pour over clause in the Quinn case had been amended after the will was executed. Relying on a line of authority from British Columbia and Ontario dealing with a different but related question about whether a codicil could effectively incorporate a trust indenture or make an effective disposition to a future trust that was not in existence at the time the codicil was signed, the lower court in Quinn, 2018 BCSC 365, followed, by analogy, the reasoning (as cited in the case of Kellogg Estate (Re), 2013 BCSC 2292, at paras. 55 – 56) that:

a. non-testamentary documents may only be incorporated into wills if it can be established that the documents were actually in existence at the time of the execution of the wills; and

b. testators cannot reserve unto themselves the right to make future unattested dispositions of trust property.

[16] In a subsequent decision in British Columbia the court was not persuaded to distinguish Quinn simply because the trust had not ever actually been amended after the will was executed. In Waslenchuk Estate, 2020 BCSC 1929, the Court held at para. 118 that the decision in Quinn "turns on whether the pour over clause is to an amendable or revocable trust." It was the possibility of amendment or revocation once the disposition had “poured over” into the trust, taking place outside of the strict formality requirements for testamentary documents, that rendered the clause invalid.

[17] There is one case decided in the Nova Scotia Supreme Court that approached the issue of the validity of a pour over clause differently. It focused on whether there had in fact been an amendment or revocation of the trust after the will was executed. In MacCallum Estate, 2022 NSSC 34, at para. 24, the court distinguished the concerns raised in Quinn on this basis. However, there is no reference to the Waslenchuk case, and it does not appear to have been considered in MacCallum.

[18] The court in MacCallum was grappling with the tension between the strict requirements of formality and the public policy presumption against intestacy (which is how the residue of the estate would be distributed in that case, and how the residue would be distributed in this case, if the Pour Over Clause is found to be invalid). However, this reasoning appears to be influenced by a view that the strict execution requirements do not need to be enforced in situations where policy concerns underlying them (to safeguard against fraud, undue influence, or lack of testamentary capacity) do not actually arise (e.g., because there were in fact no changes after the will was signed).

[19] The situation in this case is similar to MacCallum in that there were no changes after the making of the 2017 Will, nor any indication or suggestion of the type of abuses that the formality requirements are intended to safeguard against.

[20] However, I have some difficulty with the retrospective consideration that was adopted in MacCallum. The formalities are there to prevent these abuses. In my view, a loosening of the restrictions after the fact does not serve the intended objectives of the formalities. The court in MacCallum points to exceptions where there has been a loosening of the procedural safeguards as a justification for a further loosening to validate pour over clauses in wills, but the exceptions noted were statutory exceptions that have been vetted through the legislative process, not ad hoc exceptions applied after the fact.

[21] The applicant takes no position and will follow the court’s ruling and direction on this issue. The issue has not been argued by parties with opposite interests and positions, but the applicant has tried to put the relevant jurisprudence before the court, which is appreciated.

[22] I prefer the reasoning and approach taken by the courts in British Columbia. I adopt the reasoning of both the lower court and the court of appeal in the Quinn case in my determination that the Pour Over Clause in the 2017 Will is not valid. The implication of this finding in this case is described in the applicant’s factum to be as follows:

…the residue of the Estate would be distributable upon an intestacy. In this case, the Deceased's parents and spouse predeceased her, and she was survived by her two adult children (Adrienne Weinrib Wolfman and Nicole Weinrib Prussky). Accordingly, the two adult children would equally share in the residue pursuant to s. 47(1) of the Succession Law Reform Act.

[23] As a result of this determination that the Pour Over Clause is not valid, Lynda’s adult children will receive what I am told is only approximately $18,000 comprising the residue of the Estate. Had the Pour Over Clause been valid, the Trust beneficiaries, including not only the adult children but various other family members and charities (who will receive the benefit of the Trust distributions from Trust assets that were settled prior to Lynda’s death), would have received the residue of the Estate. That said, if the adult-children beneficiaries of the Estate were prepared to consent to a declaration that the Pour Over Clause is valid, as I am told they were, then there is nothing stopping them from themselves distributing the residue of the Estate in a manner consistent with how it would have been distributed if it was paid to the Trust under the Pour Over Clause.

[24] It was suggested that this case could be decided on an in personum basis, rather than in rem, to avoid it creating a precedent. That might have been available to the court if the declaration sought could have been made on the strength of the consent/non-opposition alone. But the issues in this case could not have been decided on that basis alone. The existing legal authorities and precedents needed to be considered. Once a principled analysis has been undertaken it exists for whatever persuasive effect or authority it may have in future cases.

Costs

[25] The applicant seeks his costs of this application, payable from the assets of the estate. This is consented to by the beneficiaries and not objected to by the OCL.

[26] The applicant relies upon the decision of the Court of Appeal in McGrath v. Joy, 2022 ONCA 119, at paras. 91 – 94 that recently reaffirmed that costs may be paid out of the estate where the litigation arose as a result of the actions of the testator, or where the litigation was reasonably necessary to ensure the proper administration of the estate. That is the situation here and I have no difficulty in making this award.

[27] I wish to express the court’s appreciation for the trustee’s and counsel’s efforts to objectively lay out the competing lines of authority in British Columbia and in Nova Scotia so that the court could make a principled decision, despite there being no adversaries propounding one or the other side of the argument. In the absence of any cases directly on point, and given the competing lines of authority in other provinces, this was an appropriate matter to bring before the court. The applicant is entitled to be paid his costs of this application for directions. It is expected that these costs will be addressed in the passing of the trustee’s accounts, and no specific award of costs has been sought from the court at this time.

[28] Judgment to go in the amended form signed by me today, with immediate effect and without the necessity of formal entry. Any party may arrange for an order to be issued and entered if they deem it to be appropriate to do so.

Kimmel J. Date: April 6, 2022