Court File and Parties
COURT FILE NO.: CV-23-00708532- 00ES DATE: 20240822
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF THE ESTATE OF JAMES LESLIE PENDLEBURY, Deceased RE: MARY FRANCIS FRANCES PENDLEBURY 1 , Applicant
AND:
THE ESTATE OF JAMES LESLIE PENDLEBURY, MARK CHRISTOPHER PENDLEBURY, personally, and in his capacity as one of the named Estate Trustees for the ESTATE OF JAMES LESLIE PENDLEBURY, TRACY ANNE BAKER, JANET THERESA POPE and JOANNE LESLIE SIMPSON, Respondents
BEFORE: Dietrich J.
COUNSEL: Jane E. Sirdevan, as agent for Casey & Moss LLP, for the Applicant Matthew Urback, for the Respondent, Mark Pendlebury, personally, and in his capacity as one of the named Estate Trustees for the Estate of James Leslie Pendlebury
HEARD: July 26, 2024
ENDORSEMENT
1The late James Leslie Pendlebury (the “Deceased”) owned a townhouse property, municipally known as 53 Cundles Road West, in the City of Barrie, Ontario (the “Property”). The Deceased’s daughter, the applicant, Mary Frances Pendlebury (the “Applicant”), is currently residing at the Property and has been living there since March 2013.
2In his last will and testament, executed January 16, 2015 (the “Will”), the Deceased gave the Applicant an option to purchase the Property for $94,000, being less than its fair market value.
1 An Amended Notice of Application was filed, with leave, at the outset of the hearing. The Amended Notice of Application corrected the spelling of the Applicant’s middle name and removed Janet Theresa Pope as a Respondent. In the Amended Notice of Application, the Applicant added a claim for relief from forfeiture. The filing was made on consent of the respondent, Mark Christopher Pendlebury, and was otherwise unopposed.
3To exercise the option, the Applicant had “sixty (60) days from the date of [the Deceased’s] death to enter into an enforceable agreement” to purchase the Property.
4The Applicant contends that she exercised the option that the Deceased granted to her in accordance with the terms of the Will. The respondent, Mark Christopher Pendlebury (the “Respondent”), personally and as an Estate Trustee of the Deceased’s estate (the “Estate”), contends that the Applicant failed to exercise the option because he did not receive a written offer from the Applicant to purchase the Property until 70 days after the Deceased’s death.
5The Applicant brings this application for the court’s advice and direction on whether the actions taken by her and the Respondent constitute an enforceable agreement, made within 60 days of the Deceased’s death, for the transfer of the Property to her.
6For the reasons that follow, I find that the Applicant entered into an enforceable agreement to purchase the Property, and she did so in accordance with the terms of the Will. The Property should be transferred to her in accordance with that agreement.
Background Facts
7The Deceased died on January 1, 2023, leaving the Will.
8The Deceased was predeceased by one child, Janet Theresa Pope, who died without issue. The Deceased was survived by four other children, including the Applicant and the Respondent. Pursuant to the Will, the Deceased’s four surviving children share equally in the residue of the Estate.
9In the Will, the Applicant and the Respondent are named as co-executors and trustees of the Estate.
10Paragraph 6 of the Will creates the option for the Applicant to purchase the Property and provides as follows:
PROVIDED THAT in the event that the townhouse municipally known as 53 Cundles Road West, Barrie, Ontario is owned by me at my death, and my daughter, MARY FRANCES PENDLEBURY (hereinafter referred to as “FRANCIE”), resides in same at the date of my death my Estate Trustee shall allow FRANCIE, if she wishes, to purchase the house from my estate for the PURCHASE PRICE of NINETY-FOUR THOUSAND DOLLARS (CDN $94,000.00).
FRANCIE shall have sixty (60) days from the date of my death to enter into an enforceable agreement to purchase the house on the terms set out above. Failing agreement within sixty (60) days, the rights to purchase same given to FRANCIE shall be null and void. If FRANCIE purchases the house, all expenses related to its transfer to FRANCIE, including all solicitors’ costs and any taxes shall be borne by FRANCIE. If FRANCIE then fails to complete the purchase of the house which she has agreed to purchase in accordance with the terms set out above within a reasonable time, such time to be determined by my Estate Trustee in the exercise of an absolute discretion, the right to purchase given to FRANCIE shall be null and void.
In the event that FRANCIE decides not to purchase the house she shall have the right to reside in the house for a period of six (6) months from the date of my death (hereinafter referred to as “the Occupancy Period”) at the end of which she shall vacate the house. During the Occupancy Period the property taxes, insurance and repairs of any nature for the house shall be borne solely by my estate and the utilities associated with the house shall be borne solely by FRANCIE. At the end of the 3rd month in the Occupancy Period the house shall be listed for sale and the net proceeds shall be added to the residue of my estate to be distributed according to the terms of my Will.
11Twenty-two days after the Deceased’s death, on January 23, 2023, the Applicant sent the Respondent an email in which she confirmed that she intended to purchase the Property in accordance with the terms of the Will.
12On January 24, 2023, the Respondent responded, via email, stating that the Applicant needed to have a contract in writing.
13On February 3, 2023, the Applicant’s lawyer wrote to the Respondent to confirm the Applicant’s intention to purchase the Property in accordance with the terms of the Will.
14On February 17, 2023, the Respondent responded to the Applicant’s lawyer, stating that he had already agreed on January 24, 2023 to the Applicant’s purchase of the Property and that he was waiting for a written contract.
15On March 10, 2023, the Applicant’s lawyer delivered a standard Ontario Real Estate Association Agreement of Purchase and Sale form (the “APS”) in respect of the Applicant’s purchase of the Property.
16Four weeks later, the Respondent took the position that the Applicant was not entitled to exercise the option to purchase the Property because the APS was delivered more than 60 days after the death of the Deceased.
Issues
17The issues to be determined on this application are:
- Did the parties have an “enforceable agreement” for the transfer of the Property to the Applicant within 60 days of the Deceased’s death pursuant to paragraph 6 of the Will?
- In the alternative, if there was no such enforceable agreement, is the Applicant entitled to relief from forfeiture?
Positions of the Parties
18The Applicant submits that following the Deceased’s death, through her email correspondence with the Respondent, in his role as an executor and trustee of the Estate, she exercised her option to purchase the Property within 60 days of the Deceased’s death, as required by the Will. The Applicant further submits that the Respondent agreed, in writing, to the transfer of the Property to the Applicant within the same 60 days. The Applicant contends that this exchange of correspondence proves that an enforceable agreement was reached within the prescribed time. The Applicant also contends that the Will did not include, as a term of the agreement, a formal written agreement within 60 days of the Deceased’s death.
19The Applicant submits that the Respondent cannot resile from the agreement reached between her and the Estate, and that the Respondent’s position with respect to the need for a particular form of written document is not supported by the Will. She further submits that such a requirement places form over substance and was not intended by the Deceased.
20In the alternative, the Applicant submits that this court should grant the Applicant relief from forfeiture for any late delivery of a particular form of written agreement. The Applicant submits that extinguishing the Applicant’s right and the Deceased’s intention would be inequitable.
21The Respondent submits that there was no enforceable agreement between the Applicant and the Estate in accordance with the terms of the Will. He submits that the Applicant failed to properly exercise her option within the prescribed period. He did not receive a written offer from the Applicant’s lawyer until 70 days after the Deceased had died. The Respondent contends that, until he received that written offer, the Applicant had merely expressed an intention to contract and her intention to deliver a written agreement.
22The Respondent asserts that the Applicant has no right to forfeiture and that such relief is inappropriate in the circumstances of this case. The Respondent contends that the Applicant has not met her onus to show that she is entitled to forfeiture on the basis of the factors set out in the case law.
Law
Will Interpretation
23The interpretation of a will requires a court to determine the testator’s intention as at the time of the making of the will: Mladen Estate v. McGuire, at para. 22.
24In applying this most important principle, the court must read the entire will as a whole: Barsoski Estate v. Wesley, 2022 ONCA 399, 469 D.L.R. (4th) 165, at para. 21.
25A court is required to use common sense, and the words of the Will are to be given their plain and ordinary meaning: Mladen Estate, at para. 22; Frohlich Estate v. Wedekind et al., 2012 ONSC 3775, 89 E.T.R. (4th) 286, at para. 11.
26The golden rule in interpreting wills is to give effect to the testator’s intention as ascertained from the language that was used: Dice v. Dice Estate, 2012 ONCA 468, 111 O.R. (3d) 407, at para. 36.
27A court is required to concentrate on the subjective meaning of the words used by the testator, and should consider the words used in the context of the surrounding circumstances that existed at the time the will was made, and which might reasonably be expected to influence the testator in the disposition of the testator’s property (also known as the “armchair rule”): Kaptyn Estate, Re, 2010 ONSC 4293, 102 O.R. (3d) 1, at paras. 34-35.
Contracts
28Under the law of contract, an enforceable contract has five elements: offer; acceptance; consideration; certainty of essential terms; and an intention to create a legal relationship: Quality General Contractor’s Inc. v. Wu, 2024 ONSC 2909, at para. 32.
Analysis
29For the following reasons, I find that the Deceased intended to permit the Applicant to purchase the Property for $94,000, provided that she exercised the option to do so within 60 days of his death. The Applicant’s and the Respondent’s conduct within the 60 days following the Deceased’s death, in my view, resulted in an enforceable agreement in accordance with the terms set out in the Will.
30Applying their ordinary meaning to the words used by the Deceased in the Will, the Deceased offered the Applicant an option to purchase the Property for $94,000, and to enter into an enforceable agreement respecting that option within 60 days of his death. Twenty-two days after the Deceased’s death, on January 23, 2024, the Applicant exercised her option by notifying the Respondent that she would purchase the Property pursuant to paragraph 6 of the Will. On February 17, 2023, the Respondent asked the Applicant’s lawyer to send him a written agreement, and the Respondent confirmed that he had already “agreed” to the Applicant’s purchase of the Property.
31I agree with the Applicant’s submission that the Respondent’s agreement to the Applicant’s email correspondence satisfied the requirement in paragraph 6 of the Will that the Applicant had 60 days from the Deceased’s death to enter into an enforceable agreement to purchase the Property on the terms set out in the Will. The Will does not require the agreement to be “written”, nor does it prescribe the form of the document that the exercise of the Applicant’s option must take. The Applicant did not object to the Respondent’s request for a written agreement and, in fact, instructed her lawyer to prepare the APS. However, the testator himself did not require an agreement in writing as a term of the Applicant’s exercise of her option to purchase the Property.
32The parties agree that an enforceable contract has five essential elements as set out in Quality: offer; acceptance; consideration; certainty of essential terms; and an intention to create a legal relationship.
33The Applicant submits that the essential terms of the agreement, as set out by the Deceased in the Will, were the consideration ($94,000) and a closing “within a reasonable time” to be determined by the Estate Trustee. The Applicant was also required to pay all expenses relating to the transfer, including the legal fees. The Applicant submits that within the prescribed 60 days, she agreed to pay the consideration. The onus was on the Respondent to fix the closing date. The Estate Trustees would require a Certificate of Appointment of Estate Trustee before the transfer could be completed. There is no evidence to suggest that the Applicant in any way opposed the requirement for her to pay the closing expenses, including the legal fees, at the time of the closing.
34I also agree with the Applicant that the other elements to be satisfied to conclude an enforceable contract are the offer, the acceptance, and the intention to create a legal relationship. The Deceased made the offer in the Will when he granted the option. The Applicant accepted the offer when she confirmed to the Estate Trustee that she would purchase the Property for $94,000. Alternatively, the Applicant made an offer to purchase the Property in accordance with the option granted by the Deceased in the Will; and the Respondent accepted when he agreed to her offer. The Respondent’s email on January 24, 2023, in which he asked the Applicant to send a formal written agreement, satisfied these elements. This request, as a matter of contract law, was irrelevant to whether the parties had entered into an enforceable agreement as required by the Will. The legal contract, or enforceable agreement, arose when the Applicant confirmed to the Respondent her intention to exercise the option granted to her in the Will, and the Respondent confirmed that he had agreed to the Applicant’s offer to purchase the Property. At that point, there was a meeting of the minds, and there was an intention to create a legal relationship.
35As held by the Court of Appeal for Ontario in UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., 2009 ONCA 328, 95 O.R. (3d) 93, at para. 47, for a contract to exist, there simply needs to be a meeting of the minds or consensus ad idem.
36Parties will be found to have reached a meeting of the minds where it is clear to the objective bystander, in light of all of the material facts, that the parties intended to contract: Neu Solutions v. eSolutions MN, 2023 ONSC 311, 165 O.R. (3d) 463, at para. 33. A contract can be formed verbally or in writing by an exchange of correspondence: Neu Solutions, at para. 34.
37In my view, the language of the Will evinces the Deceased’s intention that the Applicant enter into an enforceable agreement to purchase the Property. An objective review of the exchange of correspondence in this regard reveals that the enforceable agreement had been reached, at the latest, on February 17, 2023. The language of the Will does not require the Applicant to deliver a formal APS or other form of written document to exercise her option to purchase the Property in accordance with paragraph 6 of the Will.
38The Respondent submits that there was no enforceable agreement because the Applicant merely expressed her intention to contract and her intention to deliver a written agreement, but she did not propose terms until after the 60-day period had elapsed. The Respondent submits that the Applicant failed to exercise the option and, at best, she made an agreement to agree.
39In coming to this conclusion, the Respondent relies, in part, on a letter from the Applicant’s lawyer dated February 3, 2023, in which the Applicant’s lawyer stated: “[W]e will have documents to you shortly to comply with her obligations in paragraph 6 of the Will.” However, those documents did not arrive until March 10, 2023, being 10 days after the 60-day period had ended. In my view, in making the statement about the Applicant’s obligations, the Applicant’s lawyer mischaracterized those obligations with regard to paragraph 6 of the Will. The Applicant’s obligations were to exercise her option to purchase the Property by entering into an enforceable agreement to do so within 60 days of the Deceased’s death. For the reasons set out above, I find that the enforceable agreement had been reached by February 17, 2023, at the latest.
40The Respondent also asserts that there could be no enforceable agreement within the prescribed 60-day period because, at best, the Applicant and the Respondent had made an agreement to agree, and the Respondent’s agreement was conditional on a formal agreement in writing. For the reasons given, I do not accept this argument. The terms of the Will did not require a written agreement within the 60-day period.
41The Respondent further asserts that the agreement between the Applicant and the Respondent was not an enforceable agreement because there was insufficient certainty regarding the terms of the alleged agreement. As examples, the Respondent submits that there was no agreement on the following: i) the closing date; ii) the amount of the down payment; iii) the engagement of a real estate agent; iv) the matter of a real estate agent’s commission, if any; v) whether fixtures or chattels were to be included; vi) whether any inspections were necessary, and if so, when and how they were to take place; and vii) whether there were any financing conditions.
42I disagree that any of these terms were essential to the enforceable agreement. None of these terms are mentioned in paragraph 6 of the Will as being a term relating to the exercise of the option. Regarding the closing date, paragraph 6 of the Will puts the onus on the Respondent to select that date. That decision is out of the Applicant’s hands. The Will states that the date is “to be determined by my Estate Trustee in the exercise of an absolute discretion.” The Deceased does not refer to a down payment, the engagement of a real estate agent, the matter of real estate commission, the inclusion of fixtures or chattels, necessary inspections, or financing conditions.
43It is unsurprising that the Deceased would not mention these things. The Deceased’s terms are clear. The purchase price is $94,000, and that is the price the Applicant agreed to pay. The Will does not contemplate a down payment or financing terms. The Applicant is already residing in the Property and has been for several years. There is no evidence that an inspection is necessary nor is there evidence that there would be any dispute about fixtures and chattels. It is also unlikely that there would be any need for a real estate agent or any need to pay a real estate agent’s commission in what would be a non-arm’s length transaction.
44On the latter point, the Respondent relies on an email from the Applicant to the Respondent in which she refers to retaining a real estate agent; however, that email also refers to a rental property likely owned by the Deceased. On a balance of probabilities, I find that the Applicant’s reference was to a real estate agent to assist in the sale of the rental property, being a different property than the Property, which she would purchase from the Estate. I am satisfied that there was a meeting of the minds on all essential terms identified by the Deceased in paragraph 6 of the Will, and those terms were agreed to in an enforceable agreement within the 60-day period.
45Having found that the Applicant entered into an enforceable agreement, as required by paragraph 6 of the Will, I do not need to consider the matter of relief from forfeiture.
Disposition
46An order shall issue declaring that there was an enforceable agreement between the parties in accordance with paragraph 6 of the Will and directing the Respondent to complete the transfer of the Property to the Applicant in accordance with that agreement and paragraph 6 of the Will.
Costs
47The Applicant is successful on her application and is entitled to costs. The parties are strongly encouraged to agree on the matter of costs. If the parties cannot agree, the Applicant may make written submissions on costs not exceeding three pages (double spaced), excluding a costs outline and offers to settle, if any, within 14 days of this endorsement. The Respondent may make similar written submissions within 14 days thereafter. Reply submissions may only be made with leave. Costs submissions may be delivered to my judicial assistant, Anna Maria Tiberio (at AnnaMaria.Tiberio@ontario.ca), and uploaded to Case Center. If costs submissions are not so made, the matter of costs will be considered to have been resolved by the parties.
Dietrich J.
Date: August 22, 2024