The recent Saskatchewan King’s Bench decision in Gibb Estate (Re), is an example of the Court’s ability to render a document effective as a testamentary document, even if said document was executed without all the formal requirements of the Wills Act, 1996.

Factual background:

1. This matter concerned the Estate of William George Gibb (“Deceased”).
2. The Deceased had died on April 28, 2022. He had left a will executed June 29, 2018 (“Will”).
3. The Executrix, Leora Harlingten, from North Battleford, was one of two stepdaughters of the Deceased. The other stepdaughter was Helen Sawatsky of Saskatoon. They are named in the Will as the residual beneficiaries, to each receive an equal share of the Estate.
4. Paragraph 11 of the Will referred to the Deceased’s intention to create an attachment which would speak to his wishes for certain specific gifts. The Will said:
   11. I give specific gifts as are identified on attachment “A”, attached to my Last Will and Testament and such attachment is incorporated and is part of this Last Will and Testament.
5. The Deceased had left two different documents as “attachments” to his Will.
6. The issue before the Court was which of the two documents was the valid attachment to the Deceased’s Will, for the purpose of admitting the documents for probat

1. The original document (“Original Attachment”) attached to the Will did not make any reference to any specific bequest to Jessica Shaw (“Ms. Shaw”);
2. The Subsequent Attachment added a specific bequest of $20,000.00 to be given to “Jessi Shaw … the administrator of RBM the company I work for at the time of this writing.” 

7. In other words, the key practical difference was whether a bequest of $20,000 would go to Ms. Shaw, or not.
8. Shaw provided the below evidence:

1. That she had met the Deceased in early 2019 when she began working at RBM Architecture Inc. in Saskatoon where the Deceased worked. The Deceased became close to Ms. Shaw and her family, spending Christmases and special occasions together;
2. That while he was dying in hospital, the Deceased asked Ms. Shaw to retrieve and keep a binder of important documents from his house, which included his will and the attachment providing the $20,000 bequest to her. As well, the binder included email exchanges between the Deceased and Adsit.

9. After the Deceased’s death, Shaw handed the binder over to the Executrix. About a month later, Ms. Shaw received a letter from the Executrix’s lawyer demanding that monies the Deceased gifted to her be repaid. Ms. Shaw also learned that the Executrix was taking issue with the Deceased’s bequest to her of $20,000.
10. Melissa Widger (“Widger”), the daughter of the Deceased’s step-daughter, Helen Sawatsky, filed an affidavit in support of Ms. Shaw’s position. Widger recounted that the Executrix contacted her on March 27, 2022, to advise that the Deceased was diagnosed with cancer. The Executrix also told Widger that she was concerned that the Deceased had appointed Shaw his power of attorney and that he had changed his will.
11. The Deceased had also sent a November 23, 2020 email to his lawyer, Ms. Adsit, saying the below:

Hi Marilyn

Hope you are keeping safe.

Our entire office is working from home.

A definite different way to live.

I have attached a revised list to be attached to my will.

I have added Jessi to receive cash.

Please indicate receipt of this e‑mail.

If you have any questions call or e‑mail.

Thank‑you

William George Gibb 

Issue:

The issue was whether the Subsequent Attachment complied with s. 37 of the Wills Act, 1996, and should be given effect to as a testamentary instrument. If such document was a valid testamentary instrument, then the gift of $20,000 would go to Ms. Shaw.

Findings by the Court:

1. Was the Subsequent Attachment testamentary under s. 37?

Under s. 37 of the Wills Act, 1996, a court has the power to hold that a document that was not executed with all due formalities, is still valid if it embodies the testamentary intention of the deceased:

37 The court may, notwithstanding that a document or writing was not executed in compliance with all the formal requirements imposed by this Act, order that the document or writing be fully effective as though it had been properly executed as the will of the deceased or as the revocation, alteration or revival of the will of the deceased or of the testamentary intention embodied in that other document, where a court, on application, is satisfied that the document or writing embodies:

1. 1. the testamentary intentions of a deceased; or
   2. the intention of a deceased to revoke, alter or revive a will of the deceased or the testamentary intentions of the deceased embodied in a document other than a will.

For a document to be considered testamentary under s. 27, a Court must apply the following test: Did the document represent the fixed and final expression of intention of the deceased, as to the disposal of their property on death?

The Court in Gibb Estate determined that the Subsequent Attachment of November 23, 2020 was indeed testamentary. It set out a deliberate expression of the Deceased’s intention to dispose of his property by including the specific bequest to Ms. Shaw. The Subsequent Attachment thus met all the criteria required by s. 37.

2. Was the Subsequent Attachment actually created by the Deceased:

There was another raised by the Executrix. The Executrix submitted that Ms. Shaw had failed to prove that the Subsequent Attachment was actually made by the Deceased, and sent to Adsit from his own email account.

The Court ultimately found that the Deceased had clearly made the Subsequent Attachment. The Court noted the below facts:

1. Ms. Shaw stated in her affidavit that she did not have access to the Deceased’s work email. Only the Deceased and the owner of RBM Architecture Inc. would have had access to the Deceased’s email;
2. Widger’s affidavit evidence also supports the fact that it was the Deceased who sent the email to Adsit. The Deceased’s told Widger in April 2022 that he had added Shaw to his Will;
3. Moreover, the Court took notice that the Executrix had the full legal right to ask Ms. Adsit, in her role as counsel for he Deceased, to provide any evidence to suggest that the Subsequent Attachment did not come from the Deceased. The Executrix did not however obtain such evidence. The Court drew an adverse inference from this absence of evidence:

[26]    Adsit could have cleared up the issue as to whether she received the Subsequent Attachment from Gibb and knew it to be the document sent to her from Gibb. With no evidence filed by the Executrix on that matter, I must draw the adverse inference that the evidence on this point is clear. That is, Adsit received her instructions from Gibb. Shaw has proven on the balance of probabilities that the Subsequent Attachment setting out the specific bequest to her did indeed emanate from Gibb’s email.

Conclusion:

The Court held that Ms. Shaw had proven that the will with the Subsequent Attachment constituted the last will and testament of the Deceased to be admitted for probate.

The Court also made an order that Ms. Shaw should receive her solicitor and client costs, to cover her legal fees that she had incurred in this application. Such would be paid from the Estate assets:

[28]       Shaw seeks an order that her costs of this application be paid, on a solicitor‑client basis, out of the Estate…

[29]        I agree that Shaw’s costs should be awarded to her on a solicitor‑client basis. There was no dispute as to Gibb’s intention when he made the Subsequent Attachment. The Executrix’s allegation that it was not a document prepared by Gibb was completely unsupported in the evidence. Therefore, Shaw is awarded costs on a solicitor‑client basis, payable out of the Estate.

In making the above costs order, the Court referred to certain Saskatchewan case law which held that the “general rule of costs in estate litigation involving the interpretation of wills is that the parties’ costs are to be paid out of the estate.”

The practical effect of this costs order is significant. For context, the vast majority of all civil litigation in Saskatchewan, results only in partial costs orders for the winner. In other words, the winner is typically only awarded a very partial amount of costs from the other side. This means that the winner still is out of pocket to a large degree, in paying the legal fees of their own lawyers. This dilutes their final financial outcome, even if they win.

Here, the costs order above meant that Ms. Shaw would not be out of pocket for her legal fees, incurred in obtaining the ruling in her favor. It also meant that the Estate residual beneficiaries would have their residual property reduced by the amount of Ms. Shaw’s legal fees. Such costs order are still relatively common in Saskatchewan estate litigation, and show the unique way in which Courts continue to approach costs orders in estate litigation, as compared to general civil litigation.

The recent Saskatchewan Court of Appeal decision in Klaptchuk v Johnson is a reminder of the principle of devastavit, which forbids an executor from distributing estate assets in disregard of a creditor’s outstanding claim against the estate. 

That said, Klaptchuk also reminds us that an executor who is sued in devastavit, is entitled to obtain a ruling as to whether they should be relieved from liability (under s. 45 of the Trustee Act), if they erred but had nevertheless acted honestly. Moreover, Klaptchuk also reminds us that there must be clear evidence of what value existed in the estate, before a court should summarily determine (on affidavit evidence) that a devastavit has in fact occurred.

Factual background:

Klaptchuk arose out of an appeal brought by Sylvia Klaptchuk (“Ms. Klaptchuk”) and the Estate of Peter Klaptchuk (“Estate”) against the decision of a judge of (what was then) the Court of Queen’s Bench. The Chambers Decision had granted summary judgment in favour of certain judgment creditors (the “Judgment Creditors”), and had held that Ms. Klaptchuk was personally liable to such creditors for an unsatisfied judgment they had previously obtained against the Estate.

Some of the material facts included the below:

1. Peter Klaptchuk was the sole director, officer, and shareholder of two corporations: Ozonator Industries Ltd. (“Ozonator”) and Peter’s Sewer Service Ltd. (“PSS”);
2. On March 9, 2017, the Judgment Creditors obtained judgment in a civil action against Mr. Klaptchuk and Ozonator, in the amount of $160,000 (Johnson v Klaptchuk(9 March 2017) Regina, QBG 1001 of 2014 (Sask QB) (“Judgment”);
3. Eight days later, on March 17, 2017, Mr. Klaptchuk unexpectedly passed away.
4. Shortly after Mr. Klaptchuk’s death, on March 27, 2017, counsel for the Judgment Creditors sent a letter to Mr. Klaptchuk’s solicitor, Merrilee Rasmussen, K.C., notifying her of the Judgment and advising that they would hold off on any enforcement proceedings for a reasonable period of time, to allow Mr. Klaptchuk’s family to grieve his passing;
5. The Judgment Creditors’ counsel also requested that Ms. Rasmussen bring the Judgment to the attention of the representative of the Estate;
6. By April 27, 2017, Ms. Rasmussen had replied to the Judgment Creditors’ counsel, saying that Ms. Klaptchuk was the executrix of the Estate, and that she was in the process of settling the Estate’s assets and debts and developing a plan to retire the Judgment. However, the Judgment was never paid;
7. On August 24, 2017, a notice of change of shareholders for Ozonator was filed with the Director of Corporations. It named Ms. Klaptchuk as the sole shareholder for that corporation. Ms. Klaptchuk would later take the position that this transfer of shares had been made without her knowledge or authorization. Ozonator subsequently became inactive and was ultimately struck from the Corporate Registry;
8. Shortly after the Ozonator share transfer had taken place, Ms. Klaptchuk engaged new counsel, David MacKay, and arranged through him to transfer all of the shares in PSS to herself. The requisite notice, naming Ms. Klaptchuk as the sole shareholder for PSS, was filed with the Director of Corporations on October 3, 2017;
9. Although Mr. Klaptchuk’s will named Ms. Klaptchuk as executrix, Ms. Klaptchuk had never applied for a grant of probate or letters of administration. Nor had she renounced the appointment or given any explicit indication that she has refused to accept it. In addition to the transfers of shares mentioned above, Ms. Klaptchuk had taken other steps to administer the Estate, including paying Mr. Klaptchuk’s funeral expenses and his tax arrears, and by paying certain debts owed by PSS out of her own funds. She had also continued to operate PSS as a business;
10. On July 24, 2019, the Judgment Creditors commenced a civil action against Ms. Klaptchuk by filing a statement of claim. In it, the Judgment Creditors claimed the below, among other things:

1. That, even though Ms. Klaptchuk had not formally assumed the role of executrix, she had intermeddled in the estate property. Namely, she had taken it on herself to possess and administer estate property even though she had not been appointed as executor or administrator, and she had transferred Estate property to herself;
2. That Ms. Klaptchuk was liable for devastavit because she had transferred Estate property, namely, shares of the capital stock in Ozonator and PSS, and shareholder loans owned by Mr. Klaptchuk, to herself without first satisfying the Judgment.
3. That these transfers were fraudulent conveyances, as they had been transferred knowing that such actions would delay, defeat or hinder their enforcement efforts.

11. On August 12, 2021, the Judgment Creditors filed an application in the Court of Queen’s Bench, seeking summary judgment against  Klaptchuk and an order directing her to provide a full accounting for the Estate, and tracing any assets she had removed from it. This application led to the hearing that resulted in the Chambers Decision, which found her personally liable to the Judgment Creditors in the amount of $160,000.

Chambers Decision:

12. The Chambers Judge found that, despite the fact that Klaptchuk said that she never accepted the appointment as executrix, her conduct amounted to an acceptance of the role of executrix. The Chambers Judge found that she had exercised significant authority over the Estate assets and had paid Estate debts.
13. The Chambers Judge then found that even though Ms. Klaptchuk was aware of the unsatisfied judgment against the Estate, she distributed assets — including her late husband’s shares in two businesses — to herself, before paying the Estate’s lawful debts.
14. The Chambers judge concluded that Ms. Klaptchuk’s conduct constituted a devastavit. A devastavit is committed where an executor or administrator wastes the estate’s assets by mismanaging, misapplying, or neglecting them, contrary to the duty imposed on them as a personal representative of the estate. The types of conduct that can give rise to personal liability on the basis of devastavit include, among other things, paying legacies to beneficiaries before paying the estate’s lawful debts, where the result is to leave insufficient funds to satisfy the claims of creditors.
15. The Chambers judge also found that Ms. Klaptchuk had not fully and properly administered the Estate and, for that reason, was not entitled to rely on the common law defence of plene administravit, which is available when there are insufficient assets to satisfy a claim by a creditor against an estate.
16. The Chambers Judge found that Ms. Klaptchuk was aware of the existence of the Judgment and, thus, she had “distributed Estate assets to herself in disregard of the Judgment” and that such conduct “amounts to devastavit which renders her personally liable for the Judgment”.
17. With the above conclusion made, the Chambers judge determined that it was unnecessary to consider the Judgment Creditors’ alternative claim of fraudulent conveyance.
18. Accordingly, the Chambers Judge found that Ms. Klaptchuk was found to be personally liable for the entire amount of the unsatisfied judgment, being $160,000.

Issues on Appeal:

On appeal, Ms. Klaptchuk contended that the Chambers judge erred in several ways, including (without limitation):

1. By granting summary judgment in the face of disputed factual issues; and
2. By failing to consider s. 45 of The Trustee Act, 2009, SS 2009, c T-23.01 (“Trustee Act”), which says that if a trustee is liable for a breach of trust, by reason of their act or omission, a court may still relieve them from liability if the court finds that they acted reasonably and ought to be excused for the breach.

Determinations of the Court of Appeal:

The Court of Appeal reversed the Chambers Decision and determined that the Chambers Judge had erred in a number of ways.

Failure to consider whether it would be fair to relieve Ms. Klaptchuk of personal liability:

The Court of Appeal held that the Chambers Judge should have (but did not) consider whether it would be fair to relieve Ms. Klaptchuk of personal liability under s. 45 of the Trustee Act.

S. 45 reads below:

45 If a trustee is or may be personally liable for a breach of trust as the result of any act or omission of the trustee or of an agent of the trustee, the court may relieve the trustee either wholly or partly from personal liability if the court is satisfied that the trustee:

1. acted honestly and reasonably; and
2. ought fairly to be excused:

1. for the breach; or
2. for omitting to obtain the directions of the court in the matter in which it was committed.

The Court of Appeal held that there was material in the record before the Chambers Judge that should have prompted him to turn his mind to whether s. 45 of the Trustee Act was properly applied in this situation. For example:

1. Ms. Klaptchuk had explicitly raised the applicability of s. 45 of the Trustee Actin the brief of law she filed in opposition to the summary judgment application;
2. In her statement of defence, she had pleaded that she viewed the shares in PSS as having no value because the company was losing money and its only physical assets were “old trucks and a lease on a building”;
3. Ms. Klaptchuk had stated in her affidavit that she had paid various Estate debts and other expenses related to the administration of the Estate out of her own pocket and, because of that, also viewed herself as a creditor of the Estate;
4. Ms. Klaptchuk also deposed that she had taken control of PSS as “[Mr. Klaptchuk]’s wife and as a creditor of the company” (due to the outstanding shareholder loan), and not simply as executor for the Estate;
5. Ms. Klaptchuk argued that she believed, given the state of the business, the provisions in Mr. Klaptchuk’s will, and her status as a beneficiary, that the transfer of shares to her was authorized by the Business Corporations Act.

As the Chambers Judge did not consider s. 45, the Court of Appeal held that this was an error of law, and the decision could not stand.

There was a genuine issue requiring trial:

The Court of Appeal also found that it was an error to grant summary judgment, when there were contested material facts.

For context, the Chambers judge had found that there was no genuine issue requiring a trial, and that the action was suitable for summary judgment. The Court of Appeal disagreed.

The Court of Appeal held that the value of the Estate was a material issue. The reason why it is material is as follows. For example, the Chambers Judge had found Ms. Klaptchuk to be personally liable to the Judgment Creditors in the amount of $160,000. But what if the value of the entire Estate had not even been $160,000? If so, how could it then be equitable to find that Ms. Klaptchuk should pay the amount of any shortfall difference, when the underlying Judgment was not one rendered against her personally.

With “thin and contradictory” evidence on the issue of the value of the Estate, the Court of Appeal held that this matter should be remitted for trial. As a result, this was not an appropriate case for summary judgment.

Conclusion:

The Court of Appeal set aside the Chambers Decision in its entirety, and remitted it to the Court of King’s Bench. Ms. Klaptchuk received her costs of the appeal. The amount of costs awarded to her was reduced due to the fact that Ms. Klaptchuk had brought an unsuccessful application to introduce fresh evidence on appeal.

The recent Saskatchewan King’s Bench decision in Kowalinski v Kowalinski (Estate) is an example of how some estates can devolve into bitter quarrelling between the children of a deceased.

Factual background:

This matter arose out of the Estate of Maria Kowalinski (“Estate”). Maria (“Deceased”) had died on February 3, 2016. Since that time, her children had been engaged in costly and exhausting disputes over various aspects of the Estate. The Estate was still not fully distributed as a result, despite the fact that the deceased had died quite a few years previous.

There were four beneficiaries of the Estate, being

1. Maria’s son Terry;
2. Maria’s daughter Beth;
3. Maria’s daughter Iris; and
4. Maria’s grandson, Delaney.

A summary of some of the background is below:

1. Marie executed her Will on April 23, 2013. She appointed her three children, Terry, Beth and Iris as executors. It is clear that there had been a pattern of Maria loaning money to her children, particularly Terry and Iris. This habit of lending monies had led to suspicion amongst the other children;
2. At one point, Terry was meeting with Maria and, for some reason, discovered that there was a collateral mortgage registered against Maria’s home on Shea Crescent in Saskatoon in the amount of $60,000. Maria confirmed that a mortgage (“Iris Loan”) was granted in order to secure a $60,000 loan from Maria to Iris.
3. Terry took Maria to Maria’s lawyers.  The lawyers recommended that Maria prepare a holographic codicil removing Iris as an executor. This was done, and the codicil, written on October 7, 2015, read as follows:

This is a codicil to my will dated April 23, 2013. I remove Iris Theresa Kowalinski as an executor of my Esetate (sic).

Iris Theresa Kowalinski owes me $86,600.00 for amounts I have lent loand (sic) to her which remain unpaid. Therefor (sic) her chare (sic) shall be reduced by $86.600.00$ (sic) plus any adittional (sic) debt and interest (sic) which may apear (sic).

Any costs of collecting (sic) from Iris shall be charged to her share.

4. Unfortunately, it appeared that no one actually looked to discover that the Iris Loan had already been paid off and Maria was in a position to insist that the mortgage be discharged.
5. Terry thereafter began to take steps to place the Estate in a position where probate would not be necessary. Terry arranged for Maria’s tax-free savings account to be placed in his sole name. He also had title to Maria’s home registered in his and Maria’s names, as joint tenants. He also then confronted Iris about the line of credit and the mortgage on Maria’s home. Iris took that opportunity to explain to him that the line of credit had been paid in full. In due course, that mortgage was discharged.
6. Notwithstanding Maria’s declining health, Iris importuned Maria on January 30, 2016 for an additional $15,000 loan. The loan is recorded in a purple notebook, which was the manner in which Maria kept track of what her children owed her.
7. Maria passed away on February 3, 2016.

Will challenge allegations:

8. After Maria died, there were multiple court applications wherein Iris sought a trial to bring into question Maria’s mental capacity at the time of the codicil and to require that the Will be proved in solemn form. This was not successful.
9. There were also a number of applications engaging Terry and Beth and requiring them to disclose personal property at Maria’s residence on Shea Crescent. 
10. There was an application brought by Iris to permit cross-examination of Terry, Beth and Delany on their affidavits. This engendered significant legal fees, but created evidence which the Court described as of “only moderate probative value.”

Issue:

The Court determined that a number of issues required determination. This case comment focuses on the below issues:

1. Should Terry and Beth receive executors’ fees, and, if so, how much?
2. Who pays the parties’ respective legal expenses?
3. There are a number of personal items whose ownership is contested. How should those chattels be divided?

Findings by the Court:

1. Should Terry and Beth receive executors’ fees and if so, how much?

The Court found that there was no question that Terry and Beth put in a significant amount of time dealing with matters arising from the Estate. However, the Court held that much of their efforts had nothing to do with the administration of the Estate, but such efforts were rather in engaging in battle with Iris.

For context, in Saskatchewan, a court will often award compensation which in an amount which is a global 2-3% of the Estate. In this context, the Court ordered that Beth and Terry were to receive compensation on the lower end of the spectrum:

1. That Beth was to receive 1% of the Estate for her compensation;
2. That Terry was to receive 0.5% of the Estate.

2. Who pays the legal expenses?

Terry and Beth took the position that Iris was the primary cause of the entire litigation and that she should pay the costs of such legal expense.

The Court however found that there was plenty of blame to be spread around all three siblings. Accordingly, the Court ordered that each person shall bear their own costs.

However, the Court ordered that any future legal fees from this date onwards, shall be borne by the Estate, subject to being taxed by the Court.

3. There are a number of personal items whose ownership is contested. How should those chattels be divided?

The siblings were disputing how to divide certain chattels. These ranged from wood carvings, a nutcracker bowl to a black diamond pendent necklace. Unfortunately, in their respective briefs, each side creates a slightly different list of chattels in debate.

The Court held that there was no correct way to divide the chattels, but yet it was “a task that must be accomplished in order to bring the estate bickering to an end.”

The Court ultimately selected a unique and uncommon method of dividing up the chattels. The Court directed that the judge would draw names from a hat to determine ownership:

44         I conclude that “luck” is the best arbiter. I direct counsel to prepare a list of chattels that are in debate. Perhaps the siblings can agree on some so that we do not have a raft of items to deal with. However, I leave that to them.

45        In any event, when the list is prepared, it is to be forwarded to me through the Local Registrar and I will then set a date to draw names from a hat to determine ownership of the chattels in issue. The draw will take place in a courtroom and on the record.

Conclusion:

Any person who has hired a litigation lawyer in Saskatchewan knows that the legal fees to go to court (and prepare written evidence and argument) are significant. For any thoroughly disputed matter, the legal fees will easily get into the five figures for each side.

Despite this, estate disputes can often be extremely controverted, because there is an understandable emotional dynamic, when one family member perceives that there are questions of whether their beloved love one (usually a parent) was taken advantage of, or whether another sibling is trying to get more than their fair share.

Kowalinski reminds us that such disputes, even when the positions are sincerely held, may not result in an outcome that all parties (or, at the very least, the Court) may consider to be proportionate to the time and legal cost of litigation. However, to be candid, this problem shows no sign of resolving itself. So long as there are situations in which siblings distrust each other, and there is some murkiness as to exactly what a deceased parent intended for their money and estate, emotional estate disputes will continue to exist.

One proactive cure for this, is for persons to ensure better communication with their own children or estate beneficiaries, during their life. If the Deceased in this situation had sat all of her children down, and calmly explained exactly who had received what monies from her in the past, and what the Deceased nevertheless wished for her Estate in future, some of this litigation may have been avoided.

The recent Saskatchewan Court of King’s Bench decision in Riben Estate (Re), 2023 SKKB 72 offers a reminder that a will challenger who alleges coercion must offer direct evidence to actually prove that pressure resulted in the creation of the challenged will. If they cannot offer such direct evidence, a court may find that there is no genuine issue for trial, and dismiss the will challenge.

Factual background:

1. Judy Riben (“Judy”) died on September 1, 2021, leaving behind:

1. Son, Paul Riben (“Paul”);
2. Son, Carl Riben (“Carl”);
3. Daughter, Juanita Menard (“Juanita”).

2. Judy had executed a will on April 21, 2021 (the “April Will”), before lawyer Marianne Kramchynsky in Blaine Lake, Saskatchewan;
3. On July 20, 2021, Judy had executed a revised will (the “July Will”), which gave less to Paul than the prior April Will.
4. At the time of Judy’s death, there was an outstanding lawsuit that was initiated by Paul against Judy (while she was alive), and also against Carl and Carl’s wife, Maria Riben.;
5. There were a variety of applications before the Court in Riben Estate. For the purpose of this blog article, the writer focuses on the application by Paul to have co-executors Carl and Juanita prove the July Will in solemn form.

Issues in dispute:

The issue was whether Paul had adduced evidence which presented a genuine issue for trial, on the issue of alleged undue influence. If so, the court would order a trial which would determine if the July Will was valid.

Steps involved in a will challenge:

To challenge a will in Saskatchewan, a challenger must go through two levels of hearings:

1. The first stage is a threshold Chambers hearing to determine if there is sufficient merit in the challenge to warrant a trial;
2. The second stage (if the applicant is successful) is a trial hearing to actually determine the allegations made against the will.

Positions of the Parties:

Paul made various submissions as to why he felt solemn form should be ordered:

1. While Paul did not contend that Judy lacked mental capacity to make the July Will, he contended that Carl unduly influenced Judy in the preparation of the July Will;
2. Paul attempted to offer the below as “suspicious circumstances” relating to the preparation of the July Will:

1. There had been significant revision of Judy’s will in Carl’s favour and to the detriment of Juanita and Paul. This was in contrast to the April Will, which had been made only three months prior;
2. Judy had made a inter vivos transfer of land from Judy to Carl and Judy jointly, which would have the effect of resulting in a direct transfer to Carl once Judy passed away.
3. Paul pointed to the fact that Judy allegedly expressed in August 2021 to Juanita that the joint transfer to Carl by Judy had been a “mistake” and that the property was supposed to be divided equally between Carl, Paul and Juanita;
4. Paul said that, due to her cancer diagnosis and narcotics and anti‑anxiety medications, Judy was more susceptible to coercion and undue influence at the time of the preparation of July Will; and
5. Paul found it suspicious that Carl drove Judy to the appointment to execute and sign the July Will. Paul said that Carl “exerted significant pressure by constantly telling her she needed to sign it and yelling at her to get into the car before the appointment”.

3. Paul also alleged that  Carl would bully and abuse Judy and would yell and threaten her whenever he visited and, eventually, Judy had to start taking anti‑anxiety medication whenever she had to see Carl;
4. Paul and Carl had at all material times been embroiled in litigation. Paul believed that Carl pressured Judy to execute the July Will because Carl was upset that Paul wanted his land back and Carl was envious of Paul’s success with his distillery business.

Paul also offered an affidavit from Juanita, in which she said in part:

1. She observed that Judy began to feel unwell in January or February 2021. An MRI on April 9, 2021, revealed that Judy had metastatic breast cancer which had spread to her lungs and spine. Judy had surgery and returned home on April 21, 2021, but she was hospitalized again at the end of June, recovered for a short while;
2. Around July 25, 2021, Judy had a breakdown and was carried out of the house by Paul; she was hospitalized until August 6, 2021. After her discharge from the hospital, Judy moved into Juanita’s condo in Saskatoon, where she lived until she died on September 1, 2021;
3. Juanita had concerns about whether Carl unduly influenced Judy to sign the July Will. Juanita apparently offered however no specific dates and alleged specifics of such coercion;
4. A few days before the second appointment to sign the July Will, Carl had told Judy not to take narcotics on that day, but Juanita states Judy took them that day anyway;
5. Juanita said that Carl insisted on driving Judy to the appointment and “exerted significant pressure by constantly telling her she needed to sign it and yelling at her to get into the car before the appointment”;
6. Juanita states that she was concerned about Judy signing the July Will but did not interfere because Carl said if she did anything to interfere, he would contact his lawyers because she was “obstructing Mom’s wishes.”
7. Juanita said that there was extensive discussion between Judy, Juanita and Carl, as to how to effect a subdivision that Judy allegedly wanted. However, the matter remained unsettled and in the meantime, Judy passed away before it could be resolved.

Carl, in response to the above evidence, offered his own evidence.

He stated that, in his observation, Judy had capacity until shortly before her passing, including having capacity during the month of July 2021. Carl noted that she was doing her own banking, engaging in the day‑to‑day affairs of the farm and was fully aware of everything and everyone going on around her. Carl denied pressuring Judy to execute the July Will or any other document. In short, Carl denied that he had unduly or inappropriately influenced Judy in any fashion.

Carl also provided an affidavit of lawyer Marianne Kramchynsky, who had met with Judy at various times:

1. The first communication that Ms. Kramchynsky received on the file was on April 6, 2021, when Ms. Kramchynsky received email instructions for a will, power of attorney and health care directive for Judy from Juanita;
2. Kramchynsky met Judy in person on April 9, 2021, when she was brought to her office by Juanita. Judy was not capable of leaving the car on that occasion due to a cancerous tumour on her spine;
3. Kramchynsky witnessed Judy’s signature on the email instructions but did not provide any advice as to form or content that day;
4. On June 24, 2021, Ms. Kramchynsky received email instructions from Juanita to amend the April Will for Judy. The significant contemplated changes for the will in the appended email included a clause that if Judy is unable to drive, then her vehicle would be gifted to Juanita. As well, the home quarter, house and yard were to go to Carl, but he was to let Juanita reside in the home “as long as she needs”, which could be “indefinitely”;
5. Given the volume of material received from people other than Judy, Ms. Kramchynsky was careful to discuss Judy’s wishes with her directly, both in telephone and in person;
6. Interestingly, Ms. Kramchynsky wrote that Judy clearly indicated during their phone call of July 5, 2021, that Judy did not want Juanita’s instructions followed;
7. Kramchynsky then saw Judy on July 20, 2021, in her office to execute the July Will. Judy attended the office alone and that none of her children were present in her office or in the building as the documents were reviewed or executed;
8. Kramchynsky found Judy to be alert, did not complain of pain. Judy was very sure she wanted to transfer her property to joint tenancy with Carl. Judy wanted all three of her children to share in personal belongings, and said that Juanita was already using her car. Judy mentioned working on a settlement with Paul regarding stuff that Paul had taken and any funds from that Judy would decide how to allocate;
9. Kramchynsky wrote in her notes that, given the effort it took for Judy to call Ms. Kramchynsky and arrange for this appointment, and given her lucidity and independence, Ms. Kramchynsky had no doubts about Judy’s capacity.

Determination by the Court:

Ultimately, the Court in Riben held that the evidence filed by Paul was not capable of raising a genuine issue for trial, of undue influence.

The Court gave no real weight to the evidence of Juanita. The Court went on to note:

1. The Court held that Juanita’s evidence of the July 25, 2021, breakdown was not relevant as it did not have a close proximal nexus to the date of execution of the July Will or the events leading up to it;
2. Juanita’s opinions of Judy’s mental capacity are irrelevant and not useful. Juanita was not qualified to give a medical opinion and her statements are of a general undated nature;
3. Juanita’s base concerns with respect to Carl’s “undue influence” are irrelevant as there was no factual underpinning for those concerns;
4. The evidence relating to Judy taking narcotics “a few days before” her appointment to sign the July Will, was not helpful as there is no evidence provided about how this may have compromised her mental capacity that day or in the few days after. Further, the fact that Carl had told her not to take the narcotics would suggest Carl wanted to ensure her mind was clear when she eventually signed the will. As well, the fact that Judy did not listen to Carl would be suggestive of Judy not being under Carl’s control.

The Court also made the below findings:

1. The court placed great significance on the evidence of Ms. Kramchynsky. Her notes depicted Judy as a lucid, independent individual who was capable of making decisions at a difficult stage of her life, given her ill health;
2. The Court did not find place much weight on the allegation that Carl was yelling at Judy to get in the car and telling her she needed to sign the will. The Court wrote that while yelling at your elderly mother to get in the car and telling her she needed to sign the will before driving her to the appointment are evidence of impatience, in this context they did not show undue influence. There is no evidence that Carl told her what to give away in the will at the time of the appointment or shortly before;
3. The Court placed significance on the presence in the wills of a “non‑Contest Clause – Gifts Not Equal” clause. Such showed that Judy knew that she was not distributing her estate equally but yet believed the distribution was fair in light of assets already transferred to her children during her lifetime;
4. The evidence clearly establishes that none of Judy’s children had been controlling her movements to the exclusion of another. In fact, Juanita, as co‑executor of both wills and Judy’s power of attorney, appeared to play an important role in Judy’s life. There was no evidentiary basis to believe that Carl had a level of control over Judy’s thoughts or movements in any manner during the events leading up to the making of the July Will;
5. Moreover, the evidence showed that Paul sued his mother (and Carl and Maria) one day after the execution of the April Will. The Court held that common‑sense showed that such conduct would logically have a major effect on Judy’s distribution of assets in the will. Therefore, the fact that Paul received less in the July Will than the April Will was not suspicious at all when the timing of the lawsuit is taken into consideration.

Conclusion:

Both of the counsel in Riben were excellent lawyers, and the issues were carefully and comprehensively argued.

Ultimately, the Court found no evidence which, if accepted at trial, would prove undue influence. It is no doubt difficult for a challenger to prove an allegation of undue influence, given that undue influence typically does not occur in front of witnesses.

The outcome in Riben shows that it is never easy to predict what level of evidence a court will find to be required, in order to raise a genuine issue of undue influence. Undue influence remains one of the hardest issues to prove, when challenging a will.

Factual background:

1. The application was brought by Ms. Lisa Armstrong (“Lisa”) to seek an order removing the respondent, Ms. Cheryl Lee Grant (“Cheryl”) as a trustee of the trusts created by the Last Will and Testament of her husband, the late Brent Patrick Gibson (“Deceased”).
2. As well, Lisa sought orders:

1. Vesting all of the property held by the Lisa Trust in Lisa absolutely;
2. Collapsing the trust and vesting its’ capital in her absolutely in accordance with the rule in Saunders v Vautier(1841), 41 ER 482;
3. Finally, in the alternative, Lisa asks for relief under TheDependants’ Relief Act, 1996, SS 1996, c D-25.01 (“DRA”), and particularly to have title in the family home given over to her absolutely.

3. The Deceased’s Will had created two trusts:

1. One was for Lisa (“Lisa Trust”);
2. One was for Emma (“Emma Trust”).

4. The Deceased designated in his Will that the trustees would be both Lisa, and his father, Mr. Brian Wayne Gibson (“Brian”). Should either of these individuals be unable or unwilling to act, then the Deceased designated his sister Cheryl to be the alternate trustee.
5. There was tension between Brian and Lisa, in relation to the administration of the Lisa Trust. Thus, in 2019, Brian resigned as trustee, and Cheryl took over as the second trustee. Lisa remained as a trustee.
6. Lisa brought this application with the object of obtaining the capital currently held by the Lisa Trust.
7. Since approximately 2008, Lisa had been unable to work due to her MS. She has been on disability from her employment with the Government of Saskatchewan.

Terms of the Lisa Trust:

8. The material terms of the Lisa Trust included the below:

1. During the lifetime of Lisa, the trustees shall pay to Lisa such portion of the net income derived from the assets held in the Lisa Trust, and may pay amounts of capital. Such payments shall be made in the absolute discretion of the trustees, as considered appropriate for Lisa’s support and benefit;
2. Any income not paid out or distributed by the Trustees shall be accumulated and added to the capital of the Lisa Trust.
3. Upon the death of Lisa, the remaining income and capital, if any, held in the Lisa Trust shall be paid or transferred to the Emma Trust.

9. The Emma trust provided, among other things, that on the twenty-first anniversary of Brent’s death, the trustees would pay and transfer the remainder of the Emma trust, to Emma for her own use.

Issues:

The below issues were before the Court:

1. Should Cheryl be removed as a co-trustee of the Lisa Trust?
2. Can Lisa trigger the application of the rule in Saunders v Vautier, and collapse the Lisa Trust?
3. Can Lisa obtain relief under The Dependants’ Relief Act, 1996, SS 1996, c D-25.01

Decision of the Court of King’s Bench:

1. Issue 1: Should Cheryl be removed as a co-trustee of the Lisa Trust?

The Court held that a trustee should not be removed and replaced unless it is demonstrated that such a drastic step is in the best interests of the trust and its beneficiaries.

The Court ultimately declined to remove Cheryl as trustee. It offered the below reasons:

1. Lisa had argued that Lisa and Cheryl were deadlocked. However, the Court did not conclude that Cheryl was ignoring the terms of the Will or refusing to fulfil her obligations as trustee. The affidavit evidence disclosed that Cheryl had ensured that Lisa receives monthly payments of $2,000 from the Lisa Trust, and $2,000 from the Emma Trust. These are net payments with the trusts paying all taxes owed by Lisa to the Canada Revenue Agency. As well, Cheryl had agreed to Lisa’s reasonable request for a lump sum payment of $150,000 for renovations to the family home.

   The Court concluded that when creating the Lisa Trust and the Emma Trust, Brent deliberately created a balance of power between the two trustees. To remove Cheryl because she disagrees with Lisa respecting transferring legal title to the family home to Lisa would, in my opinion, disrespect Brent’s wishes and disrupt the power balance he wanted. 

2. The Court did not conclude that Cheryl had failed to act in the best interests of Lisa. The Court noted that the language of the trust provided that the trustees had a broad discretion to decide when, if at all, to encroach upon the capital. Here, the evidence discloses that monthly payments from the trust continued to be paid to Lisa – $2,000 from the Lisa Trust, and $2,000 from the Emma Trust. There was no evidence, for example, which suggests that Lisa’s medical bills, equipment and other personal requirements remain unsatisfied.

2. Issue 2: Can Lisa trigger the application of the rule in Saunders v Vautier?

Next, Lisa alternatively invoked the rule in Saunders v Vautierand asserts that as the sole beneficiary of the Lisa Trust the rule permits the Lisa Trust to be collapsed and the property given over to Lisa.

The rule in Saunders provides that if a trust beneficiary has an absolute indefeasible interest in trust property, the trust beneficiary is not bound to wait until the expiration of any future period, but may require payment of the trust property, the moment they become a capacitated adult.

Put simply, the common law rule in Saunders v. Vautier allows beneficiaries of a trust to depart from the settlor’s original intentions provided that they are of full legal capacity and are together entitled to all the rights of beneficial ownership in the trust property.

Here, however, the Court held that Saunders did not apply. The Court held that Lisa was not the sole absolute beneficiary. Brent directed that Lisa would be entitled only to “the net income derived from the assets held in trust” under the Lisa Trust. Moreover, and crucially, the Will provided for a “gift over” to the Emma Trust should Lisa die before the Emma Trust is collapsed. The Emma Trust shall be collapsed on the twenty-first anniversary of Brent’s death so as to avoid the operation of the rule against perpetuities. Consequently, any capital remaining in that trust must be given over to Emma “for her own use absolutely”, and thus Lisa was not the sole absolute beneficiary. In other words, so long as the Emma Trust is existing, Lisa cannot dispose of the Lisa Trust in the manner she wishes.

Additionally, Article VI, the final provision of the Will entitled “Wishes”, explicitly set out Brent’s intention. This intention was that “the income, including capital gains, and the appreciation of capital which arises from any interest in trust for any beneficiary under my Will, and specially any benefit under either the Lisa Trust or the [Emma] Trust…shall not be the property of the beneficiary or beneficiaries unless actually paid out by my Trustee to that person”

In the Court’s view, for all of the above reasons, Lisa did not have an absolute interest in the property of the Lisa Trust. Thus, the rule in Saunders could not be invoked.

3. Issue 3: Can Lisa obtain relief under The Dependants’ Relief Act, 1996, SS 1996, c D-25.01

The final ground Lisa advanced was that she is entitled to relief under the DRA, including but not limited to the transfer to her of title to the family home.

The Court declined to make any award on this basis either. It relied on the below grounds:

1. First, Lisa had waited in excess of 15 years to bring her DRA application. That was too long of a delay;
2. Second, in his Will, Brent had in fact adequately provided for Lisa by creating the Lisa Trust. The capital in the Lisa Trust includes real property such as the family home, and the fourplex rental property. Indeed, Lisa has resided in the family home since Brent’s death and continues to do so to the present. Additionally, she receives a monthly net income of $4,000 which is comprised of $2,000 from the Lisa Trust, and $2,000 from the Emma Trust.

The Court found that Brent had permissibly divided his assets in a manner that was within the realm of what was reasonable. Thus, there was no need to make an order for Lisa’s future maintenance. Given that his existing bequest was reasonable, Brent’s freedom to distribute his property in a manner of his choosing, should not be interfered with.

Conclusion:

For the above reasons, the Court declined to make any of the orders that Lisa had sought. The facts in Armstrong were certainly sympathetic, and one entirely understands why Lisa wished to seek the relief she did. However, Armstrong offers a reminder that the remedy of collapsing a trust will simply not be available, where the applicant does not have an absolute indefeasible interest in the trust property.

One interesting order which was made, was that Cheryl (the trustee) was permitted by the Court to receive a costs award from the Lisa Trust. However, the costs order was only in the amount of $2,000.

This award bears note, as it would mean that Cheryl (in her role of trustee) was likely required to pay her lawyer the remaining legal fees incurred by Cheryl, which likely exceeded the sum of $2,000 (given the large amount of work this application would have put both sides to).

Typically, when a trustee is acting solely as trustee (i.e. here, Cheryl had no personal interest at stake), and they are successful in a legal position, a court will often ensure that the trustee is not left out of pocket for any measure of their legal fees. Such makes sense, as few people would wish to take on the role of trustee, if they had to spend their personal monies on legal fees which were solely required by virtue of their role as trustee.