Wills are not often thought of as contracts, but they are often viewed as one. While there is no question that having a properly drafted will is one way to lessen the possibility of estate litigation, if contention does arise, courts will interpret the language used in the will to assist in determining the intention of the testator.
The recent decision of VanSickle Estate v. VanSickle from the Ontario Court of Appeal illustrates how the courts apply principles of contract law when determining the intention of a testator. In this case, the Testator’s will was contested based on one small phrase which carried significant meaning.
Siblings contest farming business being given to just one of them
Prior to the decision in Vansickle Estate, the matter of Fletcher and Vansickle v. Vansickle, was brought before the Superior Court of Justice when the estate trustees sought direction on how to interpret a clause which allowed one of the Testator’s children, (referred to as “H.V.”) to purchase the farm from the estate. The Testator and her late husband had operated the farm for years, but it was never their main source of income. However, from approximately 1993 until the time of the trial, H.V. rented the farm parcel from his mother, following the father’s death, and subcontracted the farm related work to third parties, who paid rent to him for their use of the farm and then sold their own crops. H.V.’s siblings argued that the option to purchase the farm had lapsed given this shift.
The Court in Fletcher and Vansickle found that the clause in question was ineffective, one reason being that at the time the Testator’s will was drafted, family members were working on the farm. The Court found that the Testator intended the clause to refer to an active farming business involving the cultivation of crops and/or raising of livestock. Therefore, the Court determined that the Testator did not intend to give H.V. the opportunity to be a landlord of the property, which was valued at approximately $85,000. Commentary from the Court stated that “business” was to be construed as to:
“Mean the bare rental of farmland would be inconsistent with the qualifying phrase ‘carried on by me.’ Renting land, with no accompanying obligations such as for maintenance or repair, and no benefits beyond fixed rent, such as to share in profits, does not, in my view, require ‘carrying on’, and I find that the Testator did not intend the simple rental of land to come within the ambit of the phrase ‘farming business carried on by me.’”
Decision appealed to Court of Appeal
H.V. was not satisfied with the decision and appealed to the Court of Appeal. The Court began its analysis by indicating that the standard of review of a lower court’s will interpretation is performed using the same principles as are in contract law. This means that the will is interpreted in light of all the circumstances when determining the Testator’s subjective intention.
The Court of Appeal stated that the trial judge made an extricable error of law in failing to defer to the Succession Law Reform Act which states:
“Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to…the property of the testator.”
While the application judge had found that the Testator did not intended for H.V. to become a landlord, the Court of Appeal suggested that instead of considering the Testator’s intent at the time the will was drafted, it should instead be determined in a review of the will as if it had been drafted in present day.
Will interpretation guided by contract law principles
The Court of Appeal stated that despite the farm being rented at the time of her death, this still constituted a farming business. After all, the Testator earned rental income which was reported in her income tax returns, where she also indicated that the farm would continue to be used as a farm the next year. Based on these factors, it was held that there was sufficient evidence to establish that the Testator was indeed carrying on a farm business at the time of the death.
The Court then turned its eye to determining whether there was any verbiage contained within the will to indicate that the Testator instead intended for a farm purchase to only take place if it was going to be used as a farm with H.V. performing the farming duties. The application judge had placed heavy emphasis on the phrase “the farming business carried on by me” as written in the will, but the Court of Appeal did not deem this sufficient to lead to a finding which would prevent H.V. from purchasing the farm. Based on a lack of ambiguous language, or any indication that the Testator had meant something different than the plain language, there was nothing to suggest that H.V. should not have the opportunity to purchase the farm.
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