COURT FILE NO.: CV-23-94721-ES DATE: 2024/12/04 ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF ELEANOR MARTHA DEVONPORT, DECEASED
BETWEEN:
CATHERINE DEVONPORT, in her personal capacity and in her capacity as the Estate Trustee of the Estate of Peter Devonport Applicant – and – NANCY DEVONPORT, in her personal capacity and in her capacity as the Estate Trustee of the Estate of Eleanor Martha Devonport Respondent
Counsel: Leanne Storms and Yasmin Vinograd, for the Applicant Gordon Campbell and Micah Elson for the Respondent
HEARD: June 6, 2024
REASONS FOR Judgment
Rees J.
I. Overview
[1] This is an application to interpret the last will and testament of Eleanor Martha Devonport, dated October 15, 1997. Eleanor died on July 17, 2022.
[2] In her will, Eleanor gifted a residential property to her son, Peter Devonport. Peter was Catherine Devonport’s spouse. He predeceased his mother, Eleanor.
[3] Catherine argues that the property passed to her by operation of the anti-lapse provision in s. 31 of the Succession Law Reform Act, R.S.O. 1990, c. S.26.
[4] Nancy Devonport – Eleanor’s only surviving child – disagrees. Nancy argues that Eleanor expressed the contrary intention in her will, and so the anti-lapse provision does not apply. She argues that the gift lapsed and the property became part of the residue of Eleanor’s estate, to which Nancy is entitled.
[5] This is a paradigm case of the operation of the anti-lapse provision. I conclude that Eleanor’s will is clear and unambiguous. Interpreted from the time the will was made, Eleanor intended to bequeath Peter the property “absolutely”. No contrary intention appears in the will that ousts s. 31 of the Act. Thus, by virtue of its operation, the property passed to Catherine and did not lapse into the residue of Eleanor’s estate.
II. Background facts
[6] Eleanor’s will was probated and a certificate of appointment as estate trustee with a will was issued to Nancy on March 17, 2023. Nancy is the estate trustee and sole remaining beneficiary of Eleanor’s estate.
[7] Catherine is the estate trustee and sole beneficiary of Peter’s estate. Catherine and Peter did not have any children.
[8] The property in dispute is a residential triplex on Hopewell Avenue in Ottawa. The Hopewell property was originally owned by Peter and Nancy’s grandfather. Following his death, title was transferred to Peter and Nancy’s father, Lorne Devonport. Lorne died on July 1, 2005 and title was transferred to Eleanor.
[9] Peter and Catherine moved into the second-floor apartment of the Hopewell property in 1976, a few years after they married. They paid rent to Lorne, and then to Eleanor. Catherine remained in the apartment following Peter’s death and continued to pay rent.
[10] Eleanor also owned another property on Apeldoorn Avenue in Ottawa, which she left to Nancy in her will. In April 2018, while Eleanor was alive, Nancy, in her capacity as Eleanor’s attorney for property, sold the Apeldoorn Property to a third party for $770,000.00. The proceeds of sale were used in part to assist in Eleanor’s care. I infer from Nancy’s application for a certificate of appointment of estate trustee with a will that the remaining value of the estate, excluding the Hopewell property, is around $301,130 at the time of the application.
[11] Nancy moved into the main floor apartment of the Hopewell property in 2019.
III. Issues
[12] The following issues arise on this application:
a. Does s. 31 of the Succession Law Reform Act apply to the gift of the Hopewell property to Peter, preventing it from lapsing into the residue of Eleanor’s estate? b. Was Catherine unjustly enriched to Nancy’s detriment? c. Is Nancy required to account to Catherine for her dealings in respect of the Hopewell property from July 17, 2022 to the date of conveyance of the property to Catherine? d. Should Nancy pay Catherine rent for Nancy’s occupation of the Hopewell property since Eleanor’s death?
IV. Analysis
[13] In the analysis below, I consider the anti-lapse provision in s. 31 of the Act, the general principles applicable to interpreting a will, and then I apply them to Eleanor’s will. Having concluded that the Hopewell property passes to Catherine, I consider the ancillary issues raised on the application.
A. Section 31 of the Act applies to the gift of the Hopewell property to Peter, preventing it from lapsing into the residue of Eleanor’s estate
[14] The main issue on this application is whether the anti-lapse provision in s. 31 of the Act applies to the gift of the Hopewell property to Peter, preventing it from lapsing into the residue of Eleanor’s estate.
The anti-lapse provision
[15] At common law, when a gift is made through a will to a beneficiary who dies before the testator, the gift fails and “lapses” into the residue of the estate. In Ontario, the Legislature enacted an anti-lapse provision to prevent the gift from lapsing. Section 31, the anti-lapse provision, provides:
Substitutional gifts
31 Except when a contrary intention appears by the will, where a devise or bequest is made to a child, grandchild, brother or sister of the testator who dies before the testator, either before or after the testator makes his or her will, and leaves a spouse or issue surviving the testator, the devise or bequest does not lapse but takes effect as if it had been made directly to the persons among whom and in the shares in which the estate of that person would have been divisible,
(a) if that person had died immediately after the death of the testator; (b) if that person had died intestate; (c) if that person had died without debts; and (d) if section 45 had not been passed. [Citations omitted].
[16] The opening words of s. 31 allow the testator to oust the operation of the anti-lapse provision by expressing a contrary intention in their will.
General principles in the interpretation of a will
[17] The court’s task in interpreting a will is to determine the testator’s actual or subjective intention as to how she intended to dispose of her property: Ross v. Canada Trust Company, 2021 ONCA 161, 458 D.L.R. (4th) 39, at para. 36; Trezzi v. Trezzi, 2019 ONCA 978, 150 O.R. (3d) 663, at para. 13.
[18] To ascertain the testator’s intentions at the time that the will was made, the court must interpret the entire will – not just the disputed provisions. In doing so, the court considers the surrounding facts and circumstances – this is known as the “armchair rule”: Ross, at para. 38; Trezzi, at para. 13; Re Burke, [1960] O.R. 26 (C.A.), at p. 30. The court “assumes the same knowledge the testator had, at the time of making the will, in regard to the nature and extent of her assets, the makeup of her family, and her relationship to its members”: Ross, at para. 39.
[19] At one time, courts only considered the surrounding circumstances when the testator’s intention could not be ascertained from the plain meaning of the will’s language. But now, the Court of Appeal has recognized the armchair rule as the over-arching framework within which the court applies the various tools for will construction: Ross, at paras. 40-41.
[20] How does one ascertain the testator’s intentions? The starting point is that that the primary evidence of a testator’s intention is the will itself. In considering evidence external to the will, a distinction is drawn between direct extrinsic evidence about the testator’s intentions and indirect extrinsic evidence of surrounding circumstances. The two should not be conflated. See generally Kurt v. Kurt and Sullivan, 2023 ONSC 6599, at paras. 30-34.
[21] Direct extrinsic evidence from third parties about the testator’s intentions is generally inadmissible: Rudaczyk Estate v. Ukrainian Evangelical Baptist Assn. of Eastern Canada (1989), 69 O.R. (2d) 613 (H.C.), per Watt J. (as he then was); Stafford Estate v. Thissen, [1996] O.J. No. 1957 (Gen. Div.), per LaForme J. (as he then was). In Rudaczyk, Justice Watt approved of the following statement of principle, at p. 618, from p. 55 of Thomas G. Feeney, The Canadian Law of Wills, 2nd ed, vol. 2 (Toronto: Butterworths, 1982):
Apart from the will itself, evidence of the testator's actual intention, that is, direct extrinsic evidence of intent, for instance, the instructions which he gave his solicitor for the preparation of his will, or his declarations as to the persons or property which he meant to include under a particular expression, are inadmissible except where an equivocation occurs. [Footnotes omitted].
[22] There are exceptions to the general principle: Kurt, at para. 34. One exception is that evidence of intent in the form of the testator’s instructions to the solicitor who drafted her will may be admissible to establish a drafting error, but only when the solicitor admits to the drafting error: Kurt, at paras. 35, 46-48.
[23] By contrast to direct extrinsic evidence of the testator’s intentions, indirect extrinsic evidence of surrounding circumstances is admissible: Ross, at para. 38. The latter evidence includes “the character and occupation of the testator, the amount, extent and condition of his property and the number, identity and general relationship of immediate family and relatives to the testator”: Marion v. Marion Estate (2009), 49 E.T.R. (3d) 128 (Ont. S.C.), at para. 26; see also Kurt, at para. 31.
Nancy’s position
[24] Nancy argues that the anti-lapse provision does not apply because Eleanor’s will manifested a contrary intention, which she says is expressed through the following:
a. Eleanor intended to treat her children, Peter and Nancy, equally throughout the will; b. Eleanor specifically limited her gifts to her children, in the event her husband, Lorne, predeceased her; and c. Eleanor intentionally excluded the spouses of her children from inheriting under the will.
Eleanor’s will does not express a contrary intention
[25] Eleanor’s intentions are clear and unambiguous.
[26] Had Lorne not predeceased Eleanor, he would have inherited the whole of Eleanor’s estate, absolutely, under clause 3(d) of the will, “Residuary Estate to Spouse”. But Eleanor also contemplated the eventuality that Lorne would predecease her. Eleanor’s will addresses this eventuality through the following two clauses: the “Alternative Transfer of Property” clause (3(e)) and the “Alternate Residuary Estate for Issue” clause (3(f)). The former gifts two specific real properties; the latter addresses the disposition of the residue of her estate.
[27] The Alternative Transfer of Property clause provides:
(e) If my spouse s hall hav e predeceased me or s hall die within th i rty (30) clear days following my death, my trustee s shall, unless my spouse ha s done so during his lifetime, transfer to my son, PETER JOHN DEVONPORT, all my intere s t in th e real property municipally known a s 14 Hop e well Av e nue, in th e City of Ottawa, Regional Municipality of Ottawa - Carleton, ab s olutely, and transfer to my daughter, NANCY DEVONPORT, all my interest in the real property municipally known as 1518 Apeldoorn Avenue, in the City of Ottawa, Regional Municipality of Ottawa-Carleton, absolutely.
[28] The Alternate Residuary Estate for Issue clause provides:
(f) If my spouse shall have predeceased me or shall die within thirty (30) clear days following my death, my trustees shall, subject to the provisions of sub-paragraph 3(e) above, divide my residuary estate into two (2) equal shares and distribute one such share for the benefit of each of my children, PETER JOHN DEVONPORT and NANCY DEVONPORT, share and share alike, PROVIDED THAT if either child of mine shall have predeceased me leaving issue living at my death, such deceased child of mine shall be considered alive for the purpose of such division and distribution and the share of the child of mine who shall have predeceased me shall be distributed in equal parts per stirpes among the issue of such child of mine. PROVIDED THAT if any such deceased child shall not leave any child or children him or her surviving, her or her share shall be paid or transferred to my child who shall be living at the death of such deceased child.
[29] Peter was to receive the Hopewell property “absolutely” and Nancy was to receive the Apeldoorn property “absolutely”.
[30] Peter and Nancy were also to receive an equal share of the residue of Eleanor’s estate, from which Eleanor excluded the Hopewell and Apeldoorn properties. She did so through the language “my trustees shall, subject to the provisions of sub-paragraph 3(e) above, divide my residuary estate into two (2) equal shares…” (emphasis added).
[31] Eleanor turned her mind to what would happen if one or the other of her children predeceased her. In doing so, Eleanor treated the specific bequests of the Hopewell and Apeldoorn properties differently than the residue of her estate. If either Peter or Nancy predeceased Eleanor and did not leave any issue surviving Eleanor, then his or her share of the residue of the estate was to be paid to Eleanor’s remaining surviving child. But Eleanor did not make the same disposition in relation to the Hopewell and Apeldoorn properties. This supports the interpretation that Eleanor did not intend the Hopewell property to go to Nancy if Peter predeceased Eleanor.
[32] Nancy argues that there are two provisions that manifest a contrary intention. First, she argues that the transfer of the Hopewell property “absolutely” in the Alternative Transfer of Property clause manifests a contrary intention. I disagree.
[33] The words “for their own use absolutely” – or, as here, the word “absolutely” – are not in themselves sufficient to demonstrate a contrary intention; it depends upon the totality of the will, the language used in the will, and the circumstances surrounding the creation of the will to determine the necessary intention of the testator: Dodge v. Girard (1993), 15 O.R. (3d) 422 (Gen. Div.); Tonon v. Vendruscolo (1986), 25 E.T.R. 201 (Ont. H.C.); but see Re Coughlin (1982), 36 O.R. (2d) 446 (H.C.).
[34] I conclude that Eleanor’s intention in transferring the Hopewell property to Peter “absolutely” has its ordinary meaning, which is a gift of a full estate in fee simple. The word “absolutely” in the context of Eleanor’s will did not express an intention to oust the anti-lapse rule. Nor did Eleanor express any intention to gift over the Hopewell estate to Nancy should Peter predecease Eleanor.
[35] Under the guise of evidence of surrounding circumstances, Nancy tendered evidence from the solicitor who drafted Eleanor’s will. Catherine objected to the admissibility of this evidence.
[36] The solicitor’s evidence is inadmissible because it was direct evidence of Eleanor’s intentions, including her drafting instructions. There was no suggestion of a drafting error, nor did the solicitor admit to one. Even if I were wrong, I find that, on balance, the solicitor’s evidence does not support the view that Eleanor’s will expressed a contrary intention so as to render the anti-lapse provision inapplicable.
[37] The second provision that Nancy argues manifests a contrary intention is a clause in Eleanor’s will excluding any gifts from falling into a beneficiary’s marital property (clause 6). Again, I disagree.
[38] Clause 6, “Other”, is a common clause that is intended to exclude the testamentary gift from, for example, the beneficiary’s net family property under s. 4(2) of the Family Law Act, R.S.O. 1990, c. F.3. The clause would only become operative if one of the beneficiaries separated or divorced.
[39] Eleanor’s intention in including this clause was to protect Peter if he had separated or divorced from Catherine during his lifetime. It does not demonstrate Eleanor’s intention to prevent the Hopewell property from passing to Catherine following Peter’s death.
[40] The final argument that Nancy advances is that Eleanor intended to treat Peter and Nancy equally and that the Alternative Transfer of Property clause is best understood as a class or joint gift of all her real property to her children.
[41] I agree that Eleanor generally sought to treat Peter and Nancy equally. They were each to receive specific real property at the time the will was made, and the residue of the estate was to be split equally between them. But Eleanor’s general objective of treating Peter and Nancy equally does not manifest an intention that would oust the anti-lapse provision in respect of the Hopewell property. The court cannot re-write Eleanor’s will.
[42] And no language in the Alternative Transfer of Property clause or elsewhere in the will, even considering the surrounding circumstances, leads to the conclusion that the properties were intended as class or joint gifts. To the contrary, Eleanor made specific gifts to each of her children: the Hopewell property to Peter and the Apeldoorn property to Nancy. The specific gifts are supported by the circumstances at the time the will was made: Peter and Catherine lived at Hopewell.
[43] I agree with Ian Hull & Suzana Popovic-Montag, Feeney’s Canadian Law of Wills, 4th ed (LexisNexis, 2024), ch. 13, at para. 13.21 that “[i]t is a relatively easy matter of drafting to expressly provide for a contrary intent” and that courts should not “find a contrary intent by conjecture or stretched inference”, especially where the will is prepared by a solicitor. Nancy’s interpretation of the will would produce a strained interpretation of Eleanor’s will and is contrary to its pellucid terms.
[44] Having considered Eleanor’s will in its entirety and the surrounding circumstances, I conclude that Eleanor’s will did not manifest a contrary intention that ousts the anti-lapse provision. The anti-lapse provision thus applies to Eleanor’s gift of the Hopewell property to Peter.
[45] There is no dispute that the other conditions of s. 31 of the Act have been satisfied.
[46] Thus, the gift of the Hopewell property does not lapse, and it goes to Catherine, as the sole beneficiary of Peter’s estate.
B. Catherine was not unjustly enriched
[47] Nancy argues that awarding the Hopewell property to Catherine would unjustly enrich Catherine. Nancy did not bring a cross-application to advance an unjust enrichment claim. In any event, there is no merit to this argument.
[48] To determine whether there has been an unjust enrichment, the court must consider: (a) whether Catherine has been enriched; (b) whether Nancy has suffered a corresponding deprivation; and if so, (c) whether there is a juristic reason for Catherine being enriched at Nancy’s expense: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 3.
[49] An absence of juristic reason is one where “there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case”: Kerr, at para. 40.
[50] There is plainly a juristic reason for Catherine’s enrichment – the combined juristic effect of Eleanor’s will, Peter’s will, and s. 31 of the Act. In these circumstances, Catherine’s retention of the Hopewell property is not unjust.
C. Nancy is required to account to Catherine for her dealings in respect of the Hopewell property
[51] Given that Catherine has been the rightful owner of the Hopewell property since Eleanor’s passing, I direct that Nancy account to Catherine for her dealings in respect of the property from July 17, 2022 until the property is conveyed to Catherine.
[52] For this period, Catherine is entitled to any income, less expenses, generated by the Hopewell property. Further, Catherine is entitled to be reimbursed for the rent that she has been paying to Eleanor’s estate.
[53] The costs of the accounting are not to be borne by Catherine.
D. Nancy should pay Catherine rent for her occupation of the Hopewell property since Eleanor’s death
[54] There is no provision in Eleanor’s will for Nancy to live in the Hopewell property rent-free. As the rightful owner of the Hopewell property since Eleanor’s passing, Catherine is entitled to occupation rent from Nancy.
[55] Catherine has been paying Eleanor’s estate approximately $1,698 per month since Eleanor died. Catherine and Nancy’s apartments are nearly the same in size and layout. Although Catherine’s apartment has a dishwasher and Nancy’s does not, I am not persuaded that this should result in a lesser rent.
[56] Catherine is therefore entitled to $1,698 per month from Nancy from July 17, 2022 until the property is conveyed to Catherine.
V. Disposition
[57] The application is allowed.
[58] Catherine is presumptively entitled to costs on the application. If the parties cannot agree on costs, they can each make written submissions to me of no more than 1,000 words within two weeks of the release of these reasons for judgment. These are to be sent to scj.assistants@ontario.ca to my attention.
Justice Owen Rees