Wednesday, 16 March 2016

Creepy Wills (Part 1)

Every once in a while, we learn about someone who writes a Will in which the conditions in the Will are  so outrageous, it becomes obvious to anyone who is aware of the contents of the Will that such a person who wrote the Will is a creep. It is a court’s prerogative for a court to scrutinize an unambiguous and unequivocal residual bequest in a Will, especially if it has discriminatory conditions or stipulations in it that are highly improper and conflicts with public policy.

The person I am writing about died on January 25, 2013. They say that we shouldn’t speak ill of the dead. What fool came up with that adage? The name of the creep I am writing about in this article is Emanuel Eric Spence.

 Before Spence dies, this lonely man was prone to fits of anger and abusive behaviour that were so intense that aid agencies stopped sending people to help him with his needs. He died of a stroke in 2013. Neither of his two daughters, Verolin and Donna attended his funeral.

The relationship between this deceased Jamaican-born creep prior to his death and his daughter Verolin was excellent until 2002. The relationship ended abruptly when Verolin informed her father that she was pregnant and that her child’s father was Caucasian. (White)                                                                      
Spence exclaimed that he was ashamed of Verolin and from that point onwards, he restricted his communication with her.  He said that he would not allow a white man’s child in his house.  This creep refused all contact with his grandson, Alexander, who is now 11 years old. In fact, he referred to the child to a family friend as his daughter’s “bastard white son.”

This racist black man was in fact, disowning his daughter and his grandson out of anger and spite. For this reason, he left $400,000 to another daughter, Donna whom he barely knew in the U.K and who lives with her two sons and her mother. The two sisters did not communicate with each other after the separation of their parents.

In January 2015, a judge in the City of Newmarket in the Province of Ontario in Canada, made legal history by overturning Spence’s last Will and Testament because the man’s deathbed conditions in his Will because the judge ruled that the purpose of disinheriting his daughter was overtly racist. It is the first known example in Canada of a judge nullifying an entire Will on the grounds that the motivations of the dead offended “public policy.”

What makes the original ruling even more extraordinary is that Spence didn’t explicitly disinherit his daughter on racial grounds in his Will. He merely said he chose not to leave her his entire estate to her because the two had stopped communicating, which was obviously true. I don’t know if he stopped communicating with his daughter or she stopped communicating with her father. But then, he wasn’t communicating with his other daughter in the UK either.

‘Does it offend public policy that the Spence’s other daughter, Donna, should receive the entire estate simply because her children were fathered by a black man? That, in my view, offends not only human sensibilities but also public policy.

The judge wrote: “It is clear and uncontradicted, in my view, that the reason for disinheriting Verolin, as articulated by the deceased, was one based on a clearly stated racist principle. Does it offend public policy that the deceased’s other daughter, Donna, should receive the entire estate simply because her children were fathered by a black man? That, in my view, offends not only human sensibilities but also public policy.”

Judge Gilmore then ordered that the estate should be divided between the two daughters. I should point out that the judge’s ruling notably had the effect of her declarations to wholly disinherit Donna’s sons who were also named as beneficiaries under Spence’s Will.  The matter didn’t end just there.

Verolin and her eleven-year-old son appealed the judge’s ruling to the Ontario Court of Appeal. Donna and her sons took no part in the proceedings before the application judge or the court of appeal. The three judges in that court hearing the appeal had to decide if the judge who heard the original case gave a proper ruling.

The Bank of Montreal Trust Department (BMO Trust) was the trustee of the Will so they had a part in the proceeding s in both courts.

The trustee presented four main arguments.  First, it submitted that the Extrinsic Evidence, as evidence of Eric’s reason behind disinheriting Verolin and benefiting Donna and her two sons, was inadmissible.  Further, and in any event, it submitted that the application judge erred by placing any weight on the Extrinsic Evidence because it is contradictory and internally inconsistent.

Second, the trustee argued that the application judge unjustifiably interfered with Spence’s testamentary freedom, which allowed him to distribute his property as he chose, subject only to certain statutory requirements that are inapplicable in this particular case.

Third, the trustee said that, for various reasons, the application judge did not have jurisdiction to set aside the entire Will.  And, fourth, allowing the application judge’s decision to stand would increase uncertainty in estates law and open the floodgates to litigation in estates matters.

In response to the first argument, Verolin and her son as prepared by their lawyer, submitted in their factum that the Extrinsic Evidence was properly admissible “to evaluate whether Eric’s intention to disinherit Verolin and benefit Donna and her children offends public policy”.  During oral argument, this position shifted.  At the appeal hearing, their counsel acknowledged that evidence of Eric’s intentions in disposing of his property under his Will was inadmissible. Nonetheless, they maintained that the Extrinsic Evidence was properly admissible because it relates, not to Spence’s intention, but rather, to his specific discriminatory motive for disinheriting Verolin.   As a result, their position was that the judge who first heard the matter did not err in concluding that the Will must be set aside as it is contrary to public policy against discrimination.   

A testator’s (one who writes his or her Will) freedom to distribute his or her property as he or she chooses is a deeply entrenched common law principle. (common law is previous court rulings from higher courts)

The freedom of an owner of property to dispose of his or her property as he or she chooses is an important social interest that has long been recognized in our society and is firmly rooted in our laws. The freedom to dispose of one’s property as a testator wishes has a simple but significant effect on the law of Wills and Estates so it follows that no one, including the spouse or children of a testator, is entitled to receive anything under a testator’s Will, subject to legislation that imposes obligations on the testator.

The law does say however that if a testator fails to make adequate provision for the proper maintenance and support of a surviving spouse and children, including independent adult children, the court has authority to order provision from the estate that it considers “adequate, just and equitable in the circumstances” for the claimant.  The absolute testamentary autonomy of the 19th century was required to yield to the interests of spouses and children to the extent, and only to the extent, that this was necessary to provide the latter with what was “adequate, just and equitable in the circumstances. That applies even in this century.

A testator’s broad right of testamentary freedom is constrained by, but only to the extent of, the specific obligation imposed by legislation on testators to provide what is “adequate, just and equitable in the circumstances” for the testator’s wife, husband or children after the testator’s death

Even when required to enforce a statutory requirement of this kind,  the courts should be cautious in interfering with a testator’s testamentary freedom.

In many cases, there will be a number of ways of dividing the assets which are adequate, just and equitable.  In other words, there will be a wide range of options, any of which might be considered appropriate in the circumstances.  Provided that the testator has chosen an option within this appropriate range, the Will should not be disturbed.  Only where the testator has chosen an option which falls below his or her obligations as defined by reference to legal and moral norms, should the court make an order which achieves the justice the testator failed to achieve In the absence of other evidence a Will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his estate in the best interests of the persons and institutions closest to him.  It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only in so far as the legislation requires. 

In the province of Ontario, (in which this case was being heard) there is no statutory duty on a competent (in good mental health) testator to provide in his or her will for his or her children, be they an adult or independent child, whether based on an overriding concept of a parent’s moral obligation to provide for them on the testator’s death if there is no legal obligation to support them.

Adult independent children are not entitled to dependent’s relief protection under the law because they do not meet the definition of “a dependent” under that statute.  Ontario law accords testators the freedom to exclude children who are not dependents from their estate distribution which is what Spence did when he excluded Verolin from receiving any of his estate even though his reason was outrageous.

Notwithstanding the strong nature of the principle of testamentary freedom and its salutary social interest dimensions, the courts have recognized that it is not an absolute right.  Apart from limits imposed by legislation, it may also be constrained by public policy considerations in some circumstances.

Verolin and her son, via their lawyer argued that the courts have jurisdiction to assess whether testamentary bequests should be set aside as offending public policy.  They contend that there was admissible evidence before the application judge establishing that Eric’s motive for disinheriting Verolin and benefiting Donna and her sons was racist.  Since racial equality is firmly embedded in the public policy of Canada and the destructive force of racism is contrary to Canadian public policy, the application judge did not err in setting aside the Will on grounds of public policy.

The terms of the Will gifting the residue of Eric’s estate to Donna and her sons and disinheriting Verolin are unequivocal and unambiguous. Thusly, that by itself isn’t justification for overturning that condition of Spence’s Will.

The Will imposed no conditions that would offend public policy.  It provided unconditionally for the distribution of the residue of Eric’s estate to Donna and her sons and states, that no provision was made for Verolin because (as stated in the Will) “she has had no communication with me for several years and has shown no interest in me as a father”.  

If Spence had stated in his Will that he wasn’t leaving any of his estate to Verolin because her son was a Caucasian, then that statement would nullify that part of the Will because it would be flagrantly against public policy.

Although  such a statement in his Will re the non-communication between the two of them will reflect the sentiments of a disgruntled or bitter father, it is not the language of racial discrimination even though racism was no doubt  in his mind.  Courts obviously do not hold up Wills that grant assets on the condition that heirs do something illegal to obtain them but being a racist isn’t illegal.

The fact that Spence’s residual bequest imposes no conditions or stipulations is significant.  The courts have recognized various categories of cases where public policy may be invoked to void a conditional testamentary gift.  These include cases involving: i) conditions in restraint of marriage and those that interfere with marital relationships, e.g., conditional bequests that seek to induce celibacy or the separation of married couples; ii) conditions that interfere with the discharge of parental duties and undermine the parent-child relationship by disinheriting children if they live with a named parent; iii) conditions that disinherit a beneficiary if she takes steps to change her membership in a designated church or her other religious faith or affiliation; and iv) conditions that incite a beneficiary to commit a crime or to do any act prohibited by law.

Canadian courts will not hesitate to intervene on the grounds of public policy where implementation of a testator’s wishes requires a testator’s executors or trustees or a named beneficiary to act in a way that collides with public policy. 

Canadian law recognizes two kinds of “unworthy heirs. i) beneficiaries who claimed entitlement to a testator’s property after having killed the testator; and ii) terrorist groups who, contrary to  the Criminal Code, sought to benefit from a testator’s financial support.  There is a third kind of unworthy heir: a beneficiary whose self-declared reasons for existence involve activities that constitute offences under Canadian criminal law and run contrary to Canadian public policy against discrimination.

As I said earlier, Spence’s Will did not “facially offend public policy.”  But what if it did?  Was it open to Spence to disinherit Verolin in his Will on discriminatory grounds, that is, on the express basis that the father of her son was a white man, without triggering review by the courts on the grounds of public policy?

This rhetorical question lies at the very heart of Spence’s exercise of his testamentary freedom.  It must be remembered that the bequest at issue is of a private, rather than a public or quasi-public, nature. Assuming that his testamentary bequest had been facially repugnant in the sense that it disinherited Verolin for expressly stated discriminatory reasons, the bequest would nonetheless be valid as reflecting a testator’s intentional, private disposition of his property which is the core aspect of testamentary freedom.

For example, a husband could disinherit his lesbian daughter because she is a lesbian but he could not disinherit her if he stated in  his Will that she would get nothing if she didn’t break up the relationship between her and her partner.

In these hypothetical circumstances, neither the Ontario’s Human Rights Code,   nor the Charter of Rights and Freedoms would apply to justify court interference with the testator’s intentions.  The Human Rights Code, of course, ensures that every person has a right to equal treatment with respect to services, goods and facilities without discrimination based on race and other enumerated grounds.  The Charter pertains to states action.  Neither refers to testamentary dispositions of a private nature such as the drawing up and enforcement of Wills etc.

Absent valid legislative provision to the contrary, the common law principle of testamentary freedom thus protects a testator’s right to unconditionally dispose of his or her property and to choose his or her beneficiaries as they wish, even on discriminatory grounds.  To conclude otherwise would undermine the vitality of testamentary freedom and run contrary to established judicial restraint in setting aside private testamentary gifts on public policy grounds.

Mr. Justice Cronk who wrote for the other two judges in the Court of Appeal said in his ruling, “The offensive conditional terms in the will itself, the desire to guard against a testator’s unsavoury or distasteful testamentary dispositions cannot be allowed to overtake testamentary freedom. The need for a robust application of the principle of testamentary freedom is especially important, in my opinion, in the context of a testator’s central right to choose his or her residual beneficiaries.

Mr. Justice Conk speaking also for the other two appeal judges, said in his ruling; “For the reasons given, I would allow the appeal. (of Donna, the daughter in the UK) ) She received the $400,000 lest the enormous costs paid to the lawyers which totaled over $100,000 thereby reducing the estate by at least 25%.

Please keep in mind that the ruling may have been different if the case was heard in other countries or even in other provinces and territories in Canada. However, I believe that much of this decision also applies everywhere. 

UPDATE: The Court of appeal awarded costs in the following manner with the costs coming from the proceeds of the estate. 

 $46,000 to the successful appellant, BMO Trust, allocated to: i) Whaley Estate Litigation, in the sum of $21,000; and ii) de Vries Litigation LLP, in the sum of $25,000; and

 $25,000 to the respondents, Verolin Spence and A.S., payable to Deverett Law Offices.

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