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Estates - Wills - Life Estates. Barsoski Estate v. Wesley
In Barsoski Estate v. Wesley (Ont CA, 2022) the Court of Appeal considered whether a will created a life estate or a licence:[27] Moore remains the only Supreme Court of Canada decision with respect to the distinction between a life estate and a licence. The testator granted the “use and enjoyment” of his property to his son and daughter-in-law “as long as either of them shall occupy the same”. Cartwright J., delivering the opinion of the court, held that the will granted a licence and not a life interest, largely because the will vested the property’s legal estate in the estate trustees, rather than the beneficiaries.
[28] However, as Kent J. stated in Lecky Estate v Lecky, 2011 ABQB 802, 52 Alta. L.R. (5th) 295, at para. 152:[S]everal cases considering Moore have found life estates to exist instead of licenses, where the use of a home and contents is granted for life, even where the word “life” was not used. [Citations omitted.] [29] In Lecky, the court held that the interest bestowed was a life estate, not a licence, because the property was to be held in trust for the beneficiary’s lifetime, and she was entitled to the use of its effects until her death. Significantly, as I will come back to below, the contextual factors existing at the time the will was made pointed to an expansive interpretation of the gift consistent with a life interest.
[30] The application judge, having recognized the challenges in reconciling the cases on the basis of the wording in the will, relied on the fact that the Barsoski will, like that in Moore, directed the trustees the “hold” the house for the appellant’s benefit: the will could not grant an estate to the beneficiary because it was already vested in the trustees. However, this is not a factor that has been determinative in many other subsequent cases, including Re McColgan.
[31] There, the testator instructed his trustees to hold his property as a home for the beneficiary “until her death or until she is not residing there personally”. The testator and the beneficiary had “long been great and good friends”,and had frequently discussed the prospect of marriage. They had met when the testator was a doctor in Pennsylvania, and the beneficiary was his patient. The testator moved to Toronto when he retired, and the beneficiary visited him there for months at a time. During those periods, the beneficiary had supervised the household, cooked for the testator and increasingly nursed him as he became ill. However, she had continued to spend significant periods of time in Pennsylvania, particularly, it seems, for her own medical care. Here too, the issue was whether the gift was a licence or a life interest.
[32] Despite the fact that the will granted legal title to the trustees, Keith J. found that the will created a life estate because its language went “far beyond what one would deem appropriate to the creation of a mere personal licence.” He noted that the obligation placed on the trustees, particularly to hold the property as a “home”, was much more consistent with granting the beneficiary an interest in the property than with a mere permission to occupy.
[33] Keith J. referred to Re McLean, to the same effect. In that case, the testator directed that his trustees and executors allow his daughter to “occupy and enjoy” his property and its effects “for her life or for such shorter period as she wishe[d]”. Harrison J., for a majority of the court of appeal, found that “there is ample authority that such words convey a life estate.” Accordingly, the fact that the property subject to the interest is held by the trustees according to the will is not treated as a determinative or even a significant factor: see e.g., McKay v. Henderson Estate, 1991 CanLII 5652 (NB QB), 113 N.B.R. (2d) 308 (Q.B.); Lecky, at para. 152.
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[38] It is easier to reconcile the cases, or at least their ultimate results, when one considers the contextual interpretation of the will in the characterization of certain gifts as either licences or life interests. In recent years, courts have increasingly and expressly recognized the important and often determinative significance of the contextual factors when determining whether such gifts grant licences or life interests.
[39] In Lecky, for example, Kent J. noted, at para. 153, that:In finding a life estate to exist, case law also appears to give weight to the fact that the testator had resided with his wife in the property, just as Mr. and Mrs. Lecky had. When this is the case, it is likely that the testator intended that she have the right to continue to occupy the property after his death, for the duration of her life. In Re McColgan, the Court considered the particular language of the will, “in the context of the particular circumstances of the testator, beneficiaries and the estate itself”: para 22. Accordingly, a determination of whether Mrs. Lecky was granted a life estate or a licence requires both a contextual analysis and an examination of the language used in the Will. [Citation omitted; emphasis added.] [40] The Moore case, as I have noted, has been cited as authority that vesting the property in the trustee creates a licence. In that case, the challenge for the courts (including the courts below which had both reached different conclusions: 1954 CanLII 234 (BC SC), [1954] 3 D.L.R. 407 (B.C. S.C.); 1955 CanLII 273 (BC CA), [1955] 4 D.L.R. 313 (B.C. C.A.)) was that, while the beneficiaries had been living in the house when the will was made, by the time the testator died and the dispute arose, the son and his wife had moved to Westview to pursue employment. They then moved to White Rock because of their daughter’s ill health.
[41] Interestingly, while finding that the grant was of a licence not a life interest, the court went on to find that the gift was not defeated because the son and his wife lived outside the house for a few years before the testator’s death. Writing for the majority of the court, Cartwright J. stated “I do not think that the words ‘so long as’ … necessarily require continuous occupation … as a condition of their being entitled to the permission given by the clause, but rather that the testator has used these words as the equivalent of ‘while’ or ‘during the time that’ or ‘during the time as’”: at p. 884.
[42] For present purposes, the point is that while the Supreme Court applied the text of the gift quite strictly and literally for the purposes of determining whether it was a licence or a life interest, it applied a much more contextual interpretation to the meaning of whether the clause “necessarily” required continuous occupation, and found that the appellants’ absence for several years did not bring about a forfeiture of their rights as licencees.
[43] Indeed, the context surrounding testamentary bequests often weighs heavily on the court’s interpretation. In McColgan, for example, Keith J. found that a life estate was “much more consistent in the circumstances peculiar to this will and the persons involved”: at p. 578. In McKay v. Henderson, Stevenson J. interpreted a testamentary gift according to its terms, “the relationships and the circumstances of the parties”: at p. 316. Thus, the context or circumstances frequently provide the distinctions that the words of the will cannot reconcile.
[44] Here, the application judge reviewed the case law carefully and was clearly conscious of the difficulties in reconciling the authorities by simply interpreting the document. She looked to contextual factors as well, stating as follows at para. 28:Having considered the terms of the will in conjunction with the admissible evidence as to the surrounding circumstances at the time Ms. Barsoski executed her will, I am satisfied that the proper construction of the grant of the home is that the will gives the respondent a licence to occupy the house as opposed to a vested life interest in the house. This was a grant of an interest to a friend, not a spouse or common law spouse, which distinguishes it from many of the decisions relied upon by the respondent. [Emphasis added.] [45] This final point appears to be the determinative factor in her reasons for concluding that the gift was a licence or a life interest. As I have set out, contextual factors are important and, in cases such as this it is critical to consider them. In my view, however, the application judge erred in principle by distinguishing this case from those in which interests were granted to “a spouse or common law spouse” rather than a “friend”.
[46] This constitutes a serious and extricable legal error, for a few related reasons. First, it fails to give effect to the evidence that the testator and the appellant were very close friends who regarded each other as family. This evidence was noted by the trial judge and was not disputed by the parties. In particular, the appellant affirms that Ms. Barsoski advised him that he could live in her house on his retirement “to remember her love for the rest of [his] life”. Indeed, Ms. Barsoski’s will directs that her remains be interred beside a plot reserved for the appellant.
[47] Second, in excluding the appellant’s relationship with Ms Baroski from the categories of family members such as spouses or children as in Moore, the application judge relied on and arguably contributed to the perpetuation of a now outmoded and exclusionary view of family. As L’Heureux-Dubé (dissenting) wrote in Canada (Attorney General) v. Mossop, 1993 CanLII 164 (SCC), [1993] 1 S.C.R. 554, at p. 634, “[t]he traditional family is not the only family form, and non-traditional family forms may equally advance true family values.” Julien D. Payne and Marilyn A. Payne, the authors of Canadian Family Law, 8th ed. (Toronto: Irwin Law, 2020), point out, at p. 40., “[f]amily relationships can exist when there is neither marriage nor a parent-child ancestral relationship. Unmarried couples of the opposite sex or same sex may be regarded as members of the same family for social or legal purposes.”
[48] Third, given the uncontested evidence that the testator regarded the appellant as family, there is no reason not to give effect to her choice in this regard. Indeed, testamentary freedom continues to operate as an underlying principle in our law: Spence v. BMO Trust Co. 2016 ONCA 196, 305 D.L.R. (4th) 297, at para. 30. Treating this will differently than it would have been treated had the testator and appellant been romantic partners, spouses or children violates that principle unnecessarily by failing to give effect to the context as the testator saw it.
[49] Fourth, the application judge’s decision effectively ignores that courts have given effect to life interests to friends: see e.g., Coutts, Re, 1977 CarswellOnt 2186 (S.C.), at para. 9. In this modern age, and given the other considerations I have just reviewed, there is no basis for any presumption favouring a license rather than a life interest when the intended beneficiary is a friend.
[50] For these reasons and considering both the textual and contextual reasons given by the application judge, I would conclude that she erred in law in concluding that this gift was that of a licence rather than a life interest.
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