ESTATE LITIGATION BASICS FOR LAWYERS PAPER 2.1 Probate Actions These materials were prepared by Amy D. Francis of Legacy Tax & Trusts Lawyers, Vancouver, BC, for the Continuing Legal Education Society of British Columbia, November 2008. Amy D. Francis
2.1.1 PROBATE ACTIONS I. Overview...1 II. III. IV. Procedural Issues...1 A. Rules 61 and 62 of the Rules of Court... 1 B. Proof in Solemn Form v. Proof in Common Form... 2 C. Parties to the Action... 3 D. Defence Limited to Proof in Solemn Form... 3 E. Settlement... 3 The Law Relating to Validity of Wills...4 A. Burden of Proof... 4 B. The Doctrine of Suspicious Circumstances... 4 C. Formal Validity: Proper Execution... 5 D. Knowledge and Approval... 5 E. Testamentary Capacity... 6 F. Undue Influence... 8 Costs...8 I. Overview This paper discusses the basics of probate actions, which are actions to prove a will in solemn form. I have attempted in this paper to deal with both the procedural and substantive aspects of probate actions and therefore this paper is by necessity broad in its scope. There are some excellent papers from past CLEs that deal with some of the procedural and substantive issues in more depth, all of which I have relied on in preparing this paper. These include Probate Actions by Sandra Balance and Rhys Davies (CLE Estate Litigation 1992), Validity of Wills by Ed Macaulay (CLE Estate Litigation 1997), and Testamentary Capacity Update by Margaret Mason (CLE Wills, Estates and Trusts Conference, 1998). Additional sources for further discussion of this topic include the British Columbia Probate & Estate Administration Practice Manual, which is an essential resource for anyone practicing in this area, and the most recent edition of the following textbooks: Rodney Hull, QC, Macdonell Sheard & Hull on Probate Practice (Toronto: Carswell), Winegarten et al, Tristram and Coote s Probate Practice (London: Butterworths), C.H. Sherrin et al, Williams on Wills (London: Butterworths), and James Mackenzie, Feeney s Canadian Law of Wills (Toronto: Butterworths). II. Procedural Issues A. Rules 61 and 62 of the Rules of Court Rules 61 and 62 are (not entirely accurately) subtitled Administration of Estates (Non-Contentious) and Administration of Estates (Contentious), respectively. While Rule 62 deals exclusively with
2.1.2 probate actions, which are obviously contentious, there are also a number of provisions in Rule 61 that are relevant to contentious estates matters. For example, many probate actions arise from the filing of a caveat in the Probate Registry (Rule 61(34)-(42)). Citations (Rule 61(43)-(47)) can also be a useful tool in contentious estates matters. The scope of this paper does not allow for a fulsome discussion of caveats and citations, but a detailed discussion of these and other Rule 61 provisions can be found elsewhere. 1 Rule 62(1) defines a probate action as follows: In this rule, probate action means an action for the grant of probate of the will of, or letters of administration of the estate of, a deceased person, or for the revocation of a grant or for an order pronouncing for or against the validity of an alleged testamentary paper, but does not include a proceeding governed by Rule 61. B. Proof in Solemn Form v. Proof in Common Form Until a grant of probate issues, the executor does not have any legal right to deal with the assets of the testator. In order to obtain a grant of probate of a will, the will must be proved to the court. The vast majority of wills are proved in common form pursuant to Rule 61. This process does not involve the commencement of an action. The grant of probate issues on the basis of affidavit evidence filed with the court by the executor. Once the grant issues, the executor can proceed to administer the estate. A will proved in common form can later be subject to an action to revoke the grant of probate on the basis that the will was not valid. Proof in solemn form protects a will from later attack, as once a will has been proved in solemn form it is protected under the principle of res judicata. 2 A will proved in solemn form can only be attacked if the will is later found to have been revoked or if it is proven that the grant in solemn form was obtained by fraud. 3 How is a will proved in solemn form? Usually by commencement of an action. Although Rule 61(11-13) provides a procedure for proving a will in solemn form by way of a petition, such applications are quite rare as they must be brought under Rule 10 of the Rules of Court and therefore are not well suited for contentious factual disputes. Since the necessity for proof in solemn form most of the time arises in circumstances of factual controversy, it is extremely rare for solemn form proceedings to proceed as applications. There are two ways in which probate actions generally arise. Either a beneficiary files a caveat or otherwise makes known to the executor that they take issue with the validity of the will and the executor is therefore required to commence a proof in solemn form action, 4 or the executor obtains proof in common form and someone commences an action for revocation of the grant of probate. In the latter circumstance, the executor would be required to counterclaim for proof in solemn form. In either case, the procedure in the probate action is similar, but for the fact that in one case, the executor is the plaintiff and in the other, the executor is the defendant. 1 See, for example, British Columbia Probate & Estate Administration Practice Manual (hereinafter referred to as the Probate Manual ), ch. 18.2 and Probate Actions by Sandra Balance (CLE Estate Litigation 1992). 2 See Estate Administration Act, s. 56. 3 Probate Manual, Ch. 18.19. 4 The Probate Manual notes that in England, an executor cannot be compelled to prove a will in solemn form. If a beneficiary is unhappy with the will the proper procedure is to apply for revocation of the grant of probate in common form (see Probate Manual, Ch. 18.30). Practically speaking, however, if a beneficiary or other interested party demands that the executor prove the will in solemn form, the executor would be wise to do so, as to continue to administer an estate after having received notice that there may be an issue with respect to the validity of the will could expose the executor to liability. The countervailing concern, however, is that the executor could be exposed to costs of an action to prove a will in solemn form if there is no basis for doing so.
2.1.3 C. Parties to the Action Rule 62(2) dictates that all persons having an interest in upholding or disputing the validity of a testamentary paper shall be joined as defendants. Pursuant to Rule 62(3), the writ of summons or statement of claim must contain a statement of the interest of the plaintiff and each defendant in the estate of the deceased. Presumably this means that to be a plaintiff you also have to be a person interested in the estate. The executor must also be named as a party. A person interested in the estate who is not named as a party may enter an appearance and defend the action as if they were a defendant (Rule 62(4)). A person interested in the estate would likely include the executor(s), beneficiaries under the will, beneficiaries under the prior will if there is a prior will and intestate heirs if there is no prior will. There is an issue as to whether intestate heirs should be joined if there is a prior will. It is likely prudent practice to do so, particularly if there are doubts as to the validity of the will prior to the will being propounded. 5 D. Defence Limited to Proof in Solemn Form Under Rule 62(10), a defendant in a probate action may limit their defence and thus protect against exposure to costs. Rule 62(10) states that: In a probate action, a statement of defence may state that the defendant merely requires that the will be proved in solemn form, and that the defendant only intends to cross examine the witnesses produced in support of the will, and in that event the defendant is not liable for costs, unless the court determines that there was no reasonable ground for requiring proof in solemn form. It is not proper to conduct a discovery of someone who has filed a limited defence under Rule 62(9) since that person is not adverse in interest to the propounder of the will as contemplated by the discovery rule. 6 E. Settlement According to Rule 62(10), no probate action shall be compromised without leave of the court. Additionally, Rule 17 (default of appearance) does not apply to probate actions nor do the provisions of Rule 25 dealing with default of pleadings. Since an order is required to discontinue or withdraw a probate action, Rule 36 also does not apply. The court should approve a compromise where it is apparent that there were good grounds upon which counsel reached the decision to make the compromise. 7 Note that Rule 5(16) gives the court jurisdiction to approve a compromise and order that it is binding on absent members of a class of persons if there is another person who has the same interest in the proceeding who assents to the compromise. If the court is satisfied that the compromise will be for the benefit of the absent persons, the court can approve the compromise and it will be binding on the absent persons. Therefore, if a probate action is compromised and certain interested parties are not part of that compromise but are part of a class that is (i.e., intestate heirs), the court can approve the compromise and it will be binding on the absent parties. 5 Although it should be noted that it is not permitted to seek a declaration of invalidity with respect to more than one will in one action. See Powell v. Powell (1987), 21 B.C.L.R. (2d) 109 (S.C.). 6 Cuthbert v. Pace, [1982] B.C.W.L.D. 927 (S.C.). 7 Norman v. Strains (1880), 6 P.D. 219.
2.1.4 III. The Law Relating to Validity of Wills When an action is brought to prove a will in solemn form, a court must determine the validity of that will. The following are possible grounds for invalidating a will: 1. invalid execution; 2. lack of knowledge and approval; 3. testamentary incapacity; 4. undue influence and fraud. A. Burden of Proof The onus of establishing the validity of a will is on the propounder of the will, insofar as they must show that the will was validly executed, that the testator had knowledge and approval of the contents of the will, and that the testator had testamentary capacity. The propounder of the will is aided in this regard by a rebuttable presumption. Upon proof that the will was duly executed with the requisite formalities, after having been read over to or by a testator who appeared to understand it, it will generally be presumed that the testator knew and approved of the contents and had the necessary testamentary capacity. In those circumstances the burden shifts to the attacker of the will to prove lack of knowledge and approval, lack of capacity or undue influence. 8 B. The Doctrine of Suspicious Circumstances If suspicious circumstances are established, the burden of proof shifts again and there is no presumption of validity where the will is executed with the requisite formalities and read to or by the testator. Suspicious circumstances may be: 1. circumstances surrounding the preparation of the will; 2. circumstances tending to call into question the capacity of the testator; or 3. circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud. 9 In Vout v. Hay, the Supreme Court of Canada held that any of the above three categories of suspicious circumstances would affect the burden of proof with respect to knowledge and approval. The burden with respect to testamentary capacity would also be affected if the suspicious circumstances reflected on the mental capacity of the testator to make a will. Where suspicious circumstances exist, the burden of proof shifts to the propounder of the will with regard to knowledge and approval and testamentary capacity. Suspicious circumstances will arise whenever a will is prepared under circumstances which raise a well grounded suspicion that it does not express the mind of the testator. Suspicious circumstances are not circumstances that create a general miasma of suspicion that something unsavoury may have occurred, but rather circumstances which create a specific and focused suspicion that the testator may not have known and approved of the contents of the will. 10 8 The most comprehensive discussion of the shifting onus of proof in probate actions and the application of the doctrine of suspicious circumstances remains the Supreme Court of Canada s decision in Vout v. Hay, [1995] 2 S.C.R. 876. 9 Vout v. Hay, supra, para. 25. 10 Clark v. Nash (1989), 34 E.T.R. 174 at para. 36.
2.1.5 Evidence of suspicious circumstances does not impose a higher standard of proof on the propounder of the will than the civil standard. 11 With respect to allegations of undue influence, suspicious circumstances do not give rise to a shift in the burden of proof. In other words, even where there are suspicious circumstances, the burden remains on the attacker of the will to prove undue influence or fraud. 12 C. Formal Validity: Proper Execution In order for a testamentary document to be a valid will, it must meet the requirements of the Wills Act. These include: it must be in writing; it must be signed by the testator or by some other person in the testator s presence and by the testator s direction; the testator must make or acknowledge the signature in the presence of two or more attesting witnesses present at the same time; and two or more of the attesting witnesses must subscribe the will in the presence of the testator. 13 Where there is a regular attestation clause, the court will presume that the will was duly witnessed by persons who knew the requirements of the Wills Act unless evidence to the contrary is proven. 14 D. Knowledge and Approval In order for a will to be valid, it must be proven that the testator had knowledge and approval of the contents of the will. This does not mean that a testator must understand every word of the will on the same level that the lawyer drafting the will understands it. The issue is whether the words in the will were brought to the attention of the testator and adopted by him as his words. 15 There is a difference between lack of knowledge and approval of the contents of the will and undue influence. A testator may be fully aware of what he or she is doing but have his or her independence of will completely overborne. 16 In Russell v. Fraser (1980), 118 D.L.R. (3d) 733 (B.C.C.A.), the Court of Appeal held that any will that does not express the true intentions of the testator will be set aside, even if the testator had testamentary capacity and was not subject to undue influence. In Russell v. Fraser, the Court of Appeal extensively discussed the doctrine of knowledge and approval. The Court held that where the person seeking to propound the will prepared the instructions for the will and takes a substantial benefit under the will, the burden of proving that the testator knew and approved the contents of the will is made more onerous. 17 In that case, the Court of Appeal found that 11 Vout v. Hay, supra, para. 24. 12 Vout v. Hay, supra, para. 28. 13 Wills Act, R.S.B.C. 1996, Chapter 489, ss. 3, 4 and 6. For judicial consideration of these provisions, see case annotations listed under these sections in the Annotated Estates Practice published by CLE. 14 Beaudoin Estate v. Taylor (1999), 27 E.T.R. (2d) 208 at para. 11. 15 See Rodney Hall, Macdonell Sheard & Hull On Probate Practice, 4th Ed (Toronto; Carswell 1996), at 49, and particularly the citations at footnote 112. 16 See James MacKenzie, Feeney s Canadian Law of Wills, 4th Ed. (Toronto: Butterworths, 2000) at 3.1.2. 17 Russell v. Fraser, supra, at 739.
2.1.6 there was no knowledge and approval because the testator was not aware of the value of the gift made to the party who was instrumental in having the will drawn. Knowledge and approval cannot be established merely by showing that the testatrix was an intelligent, mentally alert person who knew the value of some of her assets. 18 The doctrine of knowledge and approval has been invoked to invalidate a will on the basis that the testator did not read English 19 and on the basis that the Testator was hearing impaired and unable to lip read when the will was read to him. 20 In the recent decision of Lowery v. Falconer, 2008 BCSC 516, Mr. Justice Macaulay considered whether a testatrix knew and approved of the contents of her will. The testatrix in this case had a brother with Downs Syndrome whom she had cared for tirelessly during her lifetime, as well as a number of other relatives, but in the will in question she left her entire estate to her grandniece and her grandniece s husband. The evidence was clear that the testatrix was anxious to ensure that her brother was cared for after her death and in prior wills had made arrangements for his care. Shortly before the will at issue was prepared the testatrix had made a handwritten will in which she indicated that she was leaving her estate to the two beneficiaries in accordance with an arrangement whereby the beneficiaries would care for her disabled brother. On the basis of this apparent arrangement, the testatrix did not provide for her brother in her last will. The Court held that the testatrix never intended to make a will that did not provide for her disabled brother. Since the alleged agreement between the testatrix and the beneficiaries was not in any way enforceable by the disabled brother, the Court held that the will did not reflect the clear intention of the testatrix to provide for her brother. On this basis, the Court held that the testatrix lacked knowledge and approval of the contents of the will despite the fact that she had read and appeared to understand the contents at the time of signing the will. The Court also held in this case that the testatrix lacked testamentary capacity and was subject to undue influence by the two beneficiaries of her will. E. Testamentary Capacity Capacity to make a will relies on the testator having a sound and disposing mind. 21 The test for testamentary capacity can be summarized as follows: 1. the testator must know what a will is that it disposes of his property on his death; 2. the testator must know the assets he disposes of; 3. the testator must have in mind his family and others who would be the natural objects of his bounty; and 4. the testator s mind must be free of delusions which would affect his judgment in the matter. 22 Under the rule in Banks v. Goodfellow one can have limited capacity in some matters and still have testamentary capacity: In deciding upon the capacity of the testator to make his will, it is the soundness of the mind, and not the particular state of the bodily health, that is to be attended to; the latter may be in a state of extreme imbecility, and yet he may possess sufficient 18 Rusell v. Fraser, supra, at 746. 19 Kaczmarczyk v. Kaczmarczyk, 1997 CarswellOnt 3116. 20 Johnson v. Pelkey, 1997 CarswellBC 1450. 21 Banks v. Goodfellow (1970), L.R. 5 Q.B.C. 549. 22 Feeney, supra, chap. 2.6 and cases cited therein.
2.1.7 understanding to direct how his property shall be disposed of; his capacity may be perfect to dispose of his property by will, and yet very inadequate to the management of other business, as, for instance, to make contracts for the purchase or sale of property. For, most men, at different periods of their lives, have meditated upon the subject of the disposition of their property by will, and when called upon to have their intentions committed to writing, they find much less difficulty in declaring their intentions than they could in comprehending business in some measure new. 23 Therefore it is not a given that someone who is lacking in capacity to do many things is necessarily lacking capacity to make a will. For instance, the appointment of a committee prior to the testator making a will does not necessarily result in the testator being held to be incapable. 24 Courts have expressed a reluctance to lightly find incapacity in cases involving aged clients, even where the testator may have reduced mental facilities. In Laramee v. Ferron, 25 the Supreme Court of Canada held: We must be careful not to substitute suspicion for proof. We must not by an extensive doing so render it impossible for old people to make wills of their little worldly goods. The eye may grow dim, the ear may lose its acute sense, and even the tongue may falter at names and objects it attempts to describe, yet the testamentary capacity be ample. While the test for testamentary capacity often involves medical evidence, it is a legal, not a medical test. Indeed, the court will generally prefer lay evidence over the evidence of medical experts in assessing testamentary capacity. 26 There are a number of non medical factors that a court will consider in determining capacity, including whether the will in question contains a marked departure from previous dispositions in a prior will. 27 A delusion affecting the subject matter of a will and operating at the time of its making may be a foundation for a determination that the deceased lacked testamentary capacity even if the deceased is perfectly competent to conduct all other business. 28 On the other hand, a testator can suffer from insane delusions but if they are found to have not influenced the disposition of the testator s property, then incapacity will not be found. 29 An insane delusion is defined in the authorities as a belief in things impossible or so improbable that no man of sound mind would give them credit. 30 There is an interesting recent case dealing with delusions, Brydon v. Malamas, 2008 BCSC 749, wherein Mr. Justice Halfyard found that the testatrix, who was schizophrenic and suffered from numerous delusions, was under a delusion when she executed her will and made certain inter vivos gifts. What was interesting in this case is that the delusion that the Court held to have influenced the testatrix was a false belief that the disinherited plaintiff had made and broken a promise to the testatrix about not selling certain property that the testatrix had during her lifetime gifted to the plaintiff. This false belief in a promise made and broken led to the testatrix s decision to disinherit the plaintiff. The defendants argued that a false belief did not amount to an insane delusion. The Court disagreed and the will was invalidated on the basis that the testatrix lacked testamentary capacity. 23 Ibid., at 567. 24 Canada Permanent Toronto General Trust Co. v. Whitton et al. (1965), 51 W.W.R. 484 (B.C.S.C.); Royal Trust Company v. Rampone, [1974] 4 W.W.R. 735 (B.C.S.C.). 25 Laramee v. Ferron (1909), 41 S.C.R. 391 at 409. 26 James v. Field, 2001 BCCA 267 at paras. 76-77. 27 Wagner v. Nelson (unreported, BCSC 1992). 28 Chalmers v. Uzelac, 2004 BCCA 553 at para. 45. 29 Skinner v. Farquharson (1902), 32 S.C.R. 58. 30 Skinner v. Farquharson, supra, at 198.
F. Undue Influence 2.1.8 The test for undue influence is different for wills and inter vivos gifts. There is no presumption of undue influence with respect to testamentary gifts. The legal requirements for proving undue influence are quite onerous. It is not sufficient for the alleged influencer to have simply persuaded or influenced the testator. The influence must be sufficient that the testator s judgment or wishes were overborne. Undue influence has been described as an influence which can justly be described by a person looking at the matter judicially as having caused the execution of a paper which pretends to express the testator s mind, but which really does not, and expresses something else which he did not really mean. 31 Mere persuasion or advice from an interested person will not suffice. Put another way: The undue influence which will set aside a will must amount to force and coercion, destroying free agency; it must not be the influence of affection or attachment; it must not be the mere desire of gratifying the wishes of another, for that would be a very strong ground in support of a testamentary act; further, there must be proof that the act was obtained by this coercion; by importunity which could not be resisted; that it was done merely for the sake of peace, so that the motive was tantamount to force and fear. 32 IV. Costs The normal rule in civil litigation is that costs follow the event (Rule 57(9)). In probate actions, the rule is sometimes departed from such that all parties may recover their costs from the estate. The court may make this award where the validity of a will or the construction of a will is in issue. The principle behind this departure from the usual costs award is that, where an issue must be litigated to remove all doubts about the intention of the testator or the validity of the will, all interested parties must be joined and are entitled to be heard and should not be out of pocket if the litigation does not conclude in their favour. 33 Put simply, if the testator was the cause of the litigation, the court may be inclined to award costs out of the estate. Despite the historically recognized exception to the rule that costs follow the event in probate actions, it has generally been the case that, where a party makes a baseless allegation of undue influence, the court may award costs against that party and those costs will often be assessed as special costs. 34 Additionally, where a probate action is forced on by the conduct of the party attacking the will and that party is unsuccessful, the court has historically awarded costs against that party on the basis that it has put the estate to needless and unnecessary expense. 35 31 Craig v. Lamoureux, [1920] A.C. 349 (P.C.) and MacGregor v. Martin Estate, [1965] S.C.R. 757, both cited in Bates v. Finlay, 2002 BCSC 159. 32 Dacyshyn v. Dacyshyn Estate, [1996] B.C.W.L.D. 1179 at para. 26, citing Freeman v. Freeman (1988), 19 O.R. 141 at 155. 33 Lee v.lee (1993), 84 B.C.L.R. (2d) 341 at para. 22. Master Horn s decision in Lee v. Lee was cited with approval by the Court of Appeal in Vielbig v. Waterland Estate (1995), 1 B.C.L.R. (3d) 76 (C.A.). See also Morton v. Morton, [1993] B.C.J. No. 1523. 34 Benekritis v. Gilbert Estate, [1998] B.C.J. No. 171 at paras. 52-56. 35 MacDonell v. Cove, [1995] B.C.W.L.D. 2378 (S.C.).
2.1.9 Recent cases suggest that the era of all parties costs coming out of the estate in most probate actions is coming to an end. In Woodward v. Roberts Estate, 2007 BCSC 1549, Madam Justice Gray considered costs in the context of an unsuccessful application for a declaration that a will was invalid on the basis of lack of testamentary capacity. She held that in probate actions, the general rule should be that costs follow the event unless the court orders otherwise, exercising its discretion judicially. At para. 16, she held: The trend towards the general rule that costs should follow the event is likely, in part, a recognition of the significant costs that can be incurred in litigation and that consideration of costs can assist in achieving settlement. Providing that an unsuccessful party can recover its costs from an estate would discourage that party from taking into account the legal costs of proceeding when considering settlement. As a result, awarding costs from the estate could encourage probate litigation and discourage settlement. It would defeat the testator s intentions to the extent that the costs reduced the size of the estate available for distribution. In Stanton v. Stanton Estate, 2008 BCSC 470, Mr. Justice Bernard followed the reasoning of Madam Justice Gray in Woodward and made an award of special costs against an unsuccessful plaintiff in a probate action. 36 These cases signal a trend towards probate actions following the general rule of civil litigation that costs follow the event. 36 Stanton was appealed to the Court of Appeal and the appellant/plaintiff was unsuccessful on appeal. The Court of Appeal did not consider the trial judge s decision on costs. The respondent/defendant asked the Court of Appeal to award her special costs of the appeal against the appellant/plaintiff. The Court of Appeal declined to do so, and awarded the respondent costs of the appeal at the regular scale.