Drafting a last will and testament can be a difficult and emotional task. However, extreme care must be taken to ensure that what is written reflects the wishes and intentions of the testator. As a November 2021 decision of the Ontario Superior Court of Justice demonstrates, even punctuation can result in a lack of clarity of intention and complicate the administration of an estate. This can lead to unexpected monetary and emotional costs for the beneficiaries and family of a deceased person.
In Moola v. Rundle et al., Mr. Dawood Moola, aged seventy-six at the time of his passing in 2013, had last reviewed his will in 2004. Mr. Moola had emigrated from South Africa in the 1960s and had no spouse or children in Canada. However, he had a large extended family in South Africa, which included nine siblings. Five of the siblings had passed before Mr. Moola, and the other four had survived him. He also had thirty-six nieces and nephews.
According to this extended family, Mr. Moola was a very generous man in his life and had made many monetary gifts over the years. In his last will and testament, Mr. Moola also wanted to provide for his extended family.
In the will, Mr. Moola had a dispositive paragraph in which he gave the residue of his estate to his family. However, the section that specified which members of his family were to benefit from the residue lacked punctuation and made it nearly impossible to know how Mr. Moola intended for the residue of his estate to be divided.
The section dealing with the estate residue consisted of two sections, a typewritten heading and a handwritten description. The typed heading read:
“I Give Devise and Bequeath all my Real and Personal Estate of which I may die possessed in the manner following, that is to say:”
Below the typed heading, Mr. Moola had written the following by hand:
“my brothers sisters late brothers sisters nephews and nieces”
The handwritten section omitted any punctuation or apostrophes, which caused confusion about how the estate was to be distributed. There are two methods of allocating estate assets under a will: per stripes and per capita distribution.
Per stirpes comes from the Latin term for “representation” and has come to mean distribution by branch. Therefore, if a beneficiary passes away before the estate is administered, the family or “branch” of that beneficiary will be entitled to receive the share that the deceased beneficiary was entitled to.
Per capita comes from the Latin term for “by the heads” and has come to mean distribution by the number of persons without regard to their “representation”, which is the key concern in a per stripes distribution. Therefore, if a beneficiary is deceased, their share goes back in the general pool and is distributed among the living beneficiaries, and the deceased beneficiary’s family/branch does not get to participate in the estate.
For example, a mother intends for her estate to be split evenly between her three children after she dies. However, one of her children predeceases her.
- If the will states that the distribution of the estate is per stirpes, the deceased child’s share is split between that child’s family line (e.g. to the deceased child’s own children) instead of going back into the estate.
- If the will states that the distribution of the estate is per capita, the deceased child’s share goes back into the estate pool and is divided equally between the other two children.
Turning back to the Moola case, the Estate Trustee recognized that the clause did not lend itself to a straightforward interpretation and filed a motion with the court seeking assistance.
Under Canadian common law, judges are able to rely on something called the “armchair rule” to assist them in interpreting ambiguous clauses in wills. As explained by Justice Penny, by applying the armchair rule, the court essentially “puts itself in the position of the testator at the point when he or she made his or her will, and, from that vantage point, reads the will, and construes it, in the light of the surrounding facts and circumstances”.
This rule allows the court significant leeway and, as confirmed by the Ontario Court of Appeal in its 2021 decision in Ross v. Canada Trust Co., the armchair rule is “now treated as an over-arching framework within which a judge applies the various tools for will construction at his or her disposal”. In applying the rule, the court assumes the same knowledge the testator had at the time of making the will, in regard to the nature and extent of his assets, the makeup of his family, and his relationship to his family members.
In the written reasons for the decision, Justice Penny noted:
“While there is a general rule of interpretation that a testator intends equality of distribution such that the distribution will be made per capita rather than per stirpes, the general rule must yield depending on the circumstances”.
Justice Penny found that Mr. Moola wrote the will after some of his siblings had already passed. Under the armchair rule, it could be assumed that Mr. Moola took his siblings’ passing into account when he wrote the will and had intended for a per stripes distribution. As this method of distribution led to the fairest result, Justice Penny ordered that the estate be split into nine parts. Five parts were to be provided to the families of Mr. Moola’s deceased siblings, while the other nine parts would go to the living siblings.
Mr. Moola’s case is an example of the wishes of a deceased being honoured in a fairly amicable manner. Unfortunately, not all estate disputes can be resolved so fairly or so easily.
At Derfel Estate Law, our experienced estate lawyers assist clients with a number of estate disputes, including cases where a party contests a will as well as trustee and executor disputes. Contact us by phone at 416-847-3580 or reach out online to find out how we can help with your estate litigation matter.