Court File and Parties
COURT FILE NO.: CV-21-85975 DATE: 2022-04-11
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF JEAN MARIE HAYDUK
BETWEEN:
BARBARA HAYDUK, in her capacity as Estate Trustee in the Estate of Jean Marie Hayduk, deceased Applicant – and – CAROL GUDZ, MELANIE BOILEAU, TROY BOILEAU, and GABRIELLE HAYDUK-COSTA Respondents
Counsel: Peter Liston for the Applicant No one appearing for the Respondents
HEARD: February 22, 2022
Reasons for Judgment
Justice Sally Gomery
[1] Jean Marie Hayduk passed away on January 12, 2021 at the age of 90. [1] In her will dated August 16, 2012, she directed the transfer of the balance of her “Nesbitt Burns Registered Retirement Income Fund (RRIF) Account at the Bank of Montreal, 1st Canada Place, Level B1, Toronto Ontario M5X 1H3, being Account No. 22509547” into a separate testamentary trust, for the sole benefit of her great-grand-daughter, Paige Robillard, “for as long as she shall live”.
[2] The Estate Trustee for Jean’s estate is her daughter, Barbara Hayduk. She seeks the court’s determination as to whether this disposition is valid. There are two issues:
(a) Jean had a RRIF with the Bank of Montreal, but it was not a Nesbitt Burns fund, and it had a different account number than the account number set out in the disposition; and
(b) In Jean’s will, she did not explicitly revoke or otherwise refer to a direction she gave to the Bank of Montreal four years before executing her will, in which she designated her daughter, Carol Anne Gudz, as the beneficiary of her RRIF.
[3] For the reasons that follow, I conclude that the disposition should be corrected to refer to Jean’s RRIF held at the Bank of Montreal, and that this disposition replaces the 2008 designation.
Should the disposition be corrected to refer to Jean’s RRIF at Bank of Montreal?
Applicable legal principles
[4] A court interpreting a will should try to give effect to any bequests, where reasonably possible on the language of the will, even if this means correcting an inaccurate description of a gift. A testator “is presumed at law to have meant something by inserting words in his will which would indicate a gift, and, conversely, is not presumed to have inserted words there for no real purpose”: Re Butchers, [1970] 2 O.R. 589, at p. 591. As a result, courts of construction “have leaned against allowing any expression denoting a gift to be totally ineffective or to fail because of misdescription, error in wording, lack of clarity or for any similar reason”: Re Beauchamp (1975), 8 O.R. (2d) 2, a p. 4.
[5] In correcting a misdescription in a will, courts sometimes invoke the maxim “falsa demonstratio non nocet, cum de corpore (or persona) constat”. In Oosterhoof on Wills, 8ed (Toronto: Thomas Reuters, 2016) at p. 506, the authors state that the falsa demonstratio principle “permits the rejection of part of a description of an object or subject if part of the description is true and the other is false. The false part will be disregarded if the true part describes the subject or object with sufficient certainty.” Feeney’s Canadian Law of Wills, 4th ed. (Looseleaf), at § 12.2, states more directly that “if a will describes a certain person or thing with sufficient certainty to enable a court to recognize the person or thing intended by the testator, then the court will overlook any inaccuracy in the rest of the description.”
[6] In applying the falsa demonstratio principle, the court is entitled to consider extrinsic evidence with respect to the assets that the testator owned when they executed their will, as well as assets owned before and after this date, in an effort to determine their intent. As Cory J. stated in Beauchamp at p. 5:
There are certain limited occasions when for specific purposes only, extrinsic evidence must be considered in attempting to interpret the testator's intentions as expressed in the will. One of these exceptions is based on the principle that it is the duty of the Court of construction in interpreting a will to put itself as much as possible in the testator’s chair. The words of the will must be interpreted not only by a literal reading of it, but the Court must, when reading the will, have a knowledge of the circumstances surrounding the testator at the time of the making of the will and up to and until his decease.
[7] See, to the same effect, Butchers, at pp. 593-594.
Application
[8] According to Barbara’s affidavit in support of the application, Jean rolled over the contents of her BMO Investorline Registered Retirement Savings Plan (account number 226-01680-14) into a new RRIF account (account number 227-00272-18) in 2000. The account number mentioned the bequest to Paige (22509547) was the account number of another BMO account that Jean closed in July 2012, about a month before she executed her will. It appears that Jean confused the bank account numbers when her will was prepared, since the account mentioned in her bequest was not associated with a RRIF or RRSP account.
[9] There is no evidence that Jean owned any other RRIF aside from her RRIF in account number 227-00272-18 at the Bank of Montreal. She never had any account with Nesbitt Burns, a wealth management firm associated with the Bank of Montreal.
[10] I find that Jean intended to create a trust in Paige’s favour in her will, using the funds in the only RRIF she owned, her RRIF at the Bank of Montreal. The falsa demonstratio principle applies. Given Barbara’s evidence, the object referred to in the bequest is described with sufficient certainty to permit its identification by the court, the estate trustee and the Bank. The reference to Nesbitt Burns and the incorrect account number can therefore be disregarded.
[11] I conclude that, if the designation in Jean’s will is valid, it directs her Estate Trustee to transfer the balance of her Registered Retirement Fund at the Bank of Montreal with the account number 227-00272-18 into a trust for Paige Robillard’s benefit.
Which designation prevails: the bequest in Jean’s will, or her earlier designation?
[12] Section 51 of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (the “Act”) sets out how a participant in a pension plan may designate a beneficiary:
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
(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.
[13] On January 5, 2008, Jean wrote the following note to her account manager at the Bank of Montreal:
Re – Change of beneficiary of my RIF 227-00-272-18 from “My Estate to my daughter Carol Anne Gudz whose Social insurance # is [redacted].
This note is written following a telephone conversation several weeks ago at which time you asked for the above information.
Yours truly, Jean M. Hayduk. [2]
[14] The applicant is of the view that, pursuant to s. 51(1), this note validly designated Carol as the person to whom benefits from the RRIF would be payable at Jean’s death. She seeks the court’s direction, however, as whether this designation has been revoked by the designation of Paige as the beneficiary of the funds in the RRIF in Jean’s will, given the language in s. 52(1) of the Act and two cases that have considered its impact, Laczova v. House, 2001 CarswellOnt 4438, and Alger v. Crumb, 2021 ONSC 6076.
[15] Section 52(1) states that: “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”.
[16] In Laczova, a testator wrote a holographic will in which she listed types of accounts she held at two banks and bequests to numerous beneficiaries. The accounts listed included two retirement savings plans, but the will did not designate any particular person or entity as a beneficiary of those plans. The Court of Appeal held that the will did not contain a revocation that related expressly to the designation, either generally or specifically, as required under s. 52(1). As Justice Catzman pointed out, it would be impossible for a bank representative, reading Ms. Laczova’s will, to determine to whom they should pay the funds in the RSPs; Laczova, at para. 21.
[17] In Alger, the will at issue contained a revocation clause whereby the testator revoked “all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made”. This distinguished it from Laczova, because the will in that case included no general revocation clause. The will in Alger, however, did not mention the testator’s registered retirement savings plan or tax-free savings account. Vernon J. held that, since the general revocation clause did not relate expressly to the designation of beneficiaries payable under these plans, it did not constitute a revocation under s. 52(1). He held that, for there to be an effective revocation under s. 52(1), “the will must demonstrate that the testator turned her mind to the beneficiary designations made before those designations will be revoked”: Alger, at para. 16.
[18] Jean’s will contains detailed provisions about the trust she intended to establish for her great-grand-daughter Paige’s benefit. She named a trustee and an alternative trustee; stated that the trustee should have discretion to pay income and any capital that she might deem advisable; and directed the disposition of any remaining capital for the benefit of her residuary beneficiaries. She did not, however, revoke all previous testamentary dispositions. Her will contained a general revocation clause, but it provided only that she revoked “all former Wills and codicils heretofore made”. It did not mention prior testamentary dispositions.
[19] Having considered both s. 52 in its entirety and this caselaw carefully, I conclude that there is no need to determine whether the language in Jean’s will meets the requirements for revocation under s. 52(1), because s. 52(2) applies.
[20] Section 52(2) provides that, “a later designation revokes an earlier designation, to the extent of any inconsistency”. [3] This necessarily means that a holder of a retirement fund may make a second designation without explicitly revoking the first one.
[21] Both Jean’s 2008 note designating Carol as the beneficiary of the RRIF and Jean’s 2012 will designating Paige as the beneficiary of the same RRIF constitute valid designations under s. 51(1). By the operation of s. 52(2), however, the later designation implicitly revokes the earlier one.
[22] This situation in this case is similar to that in Rehel Estate v. Methot, 2017 ONSC 7529. In that case, a testator had designated the respondent, Ms. Methot, as his beneficiary when he opened a retirement account. At paragraph 5(d) of the will he wrote a day before he committed suicide, however, Mr. Rehel directed his estate trustees to cash in that specific account and to use the proceeds to pay off his estate’s debts. I concluded that the disposition in the will did not have to meet the requirements in section 52(1), so long as it complied with section 51(2) and 52(2). I found that there was nothing in the reasoning in Laczova that precluded this. On the contrary, the Court of Appeal’s concern about the ambiguity of a potential revocation did not arise, because Mr. Rehel’s intentions, as expressed in his will, were not in any doubt.
[23] In my view, one purpose of s. 52(1) is to prevent a situation where a testator, through a general revocation clause, might inadvertently revoke a beneficiary designation without replacing it with another designation. That is why the general revocation clause in Jean’s will would not by itself have been sufficient to revoke her earlier designation of Carol as the beneficiary. In the absence of an indication that she specifically turned her mind to what would happen to her RRIF, we would be in a situation, like Laczova or Alger, where it was impossible to be certain whether she wanted to revoke her earlier designation. But, as already found, Jean clearly did turn her mind to this issue, by setting out detailed directions for a testamentary trust in Paige’s favour using the funds in the RRIF.
Disposition
[24] I declare that, further to Jean Marie Hayduk’s August 16, 2012 will, the funds in her RRIF account number 227-00272-18 at the Bank of Montreal shall be transferred into a separate testamentary trust for the sole benefit during her great-grand-daughter Paige Robillard so long as she lives, further to the terms set out in the will. I further declare that the earlier designation of Carol Anne Gudz as the beneficiary of the RRIF funds in this account was revoked when Jean executed her will.
[25] The applicant may recover the costs of this application from the Estate.
Justice Sally Gomery Released: April 11, 2022
COURT FILE NO. : CV-21-85975 DATE : 2022-04-11
ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: BARBARA HAYDUK et al. Applicant - and - CAROL GUDZ et al. Respondents REASONS FOR JUDGMENT Justice Sally Gomery
Released: April 11, 2022
Footnotes
[1] Since the deceased and the applicant share the same surname, I will refer to them as “Jean” and “Barbara”. I will similarly refer to Jean’s daughter Carol Anne Gudz as “Carol” and her great-grand-daughter Paige Robillard as “Paige”. No disrespect is intended by this.
[2] This note is reproduced exactly as written. I infer that Jean meant to refer to “My Estate” but forgot the second set of quotation marks.
[3] S. 52(2) is subject to s. 15 of the Act. Section 15 deals with the revocation of wills and is irrelevant to the analysis in this case.