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Estates - Wills - 'Per Stirpes'

. Jonas v. Jonas

In Jonas v. Jonas (Ont CA, 2022) the Court of Appeal considered the will term 'per stirpes', and found that it's meaning can differ in different wills:

[13] The application judge properly relied on the “armchair rule” in instructing herself on the process for interpreting the Will. This rule was set out by this court in Dice v. Dice Estate, 2012 ONCA 468, 111 O.R. (3d) 407, at paras. 36-38. The court must determine the testator’s intention as ascertained from the language that was used and the will as a whole. Where the intention cannot be ascertained from the plain meaning of the language used, the court may consider the surrounding circumstances known to the testator when making the will. The court sits in place of the testator and assumes the same knowledge they had of the extent of their assets, the size and makeup of their family, and their relationship to the family members, based on the evidence presented. [14] While the application judge considered six different interpretations of the residue clause, only two were argued before her, one by the appellant and one by the OCL. Her preference for the OCL interpretation of per stirpes as a “gift over” was based on the testator’s intention to create two classes of beneficiaries and to ensure an equal distribution within those classes. The appellant’s interpretation of per stirpes would have frustrated this intention. She concluded, at para. 17 of her reasons:

Miriam’s position provides a result which gives a far greater benefit to her and her sister Naomi and creates inequality amongst the Grandchildren and great grandchildren. I find that the testator was careful to ensure that each class of beneficiary (the Children and the Grandchildren/great grandchildren) would benefit equally within their Class. Accepting an interpretation that gives any Grandchild less or any Child more would be inconsistent with the Testator’s intentions to be fair to each member of each Class of beneficiary. [Emphasis in original.]

[15] In her factum, the appellant proposes yet a further possible interpretation, which would involve the children holding the 60 percent in residue in trust for the benefit of any grandchildren or great-grandchildren during the vesting period, with the money then reverting to the children only if they themselves had no children or grandchildren after 10 years.

[16] In the appellant’s view, this interpretation reflects the deceased’s intention that each branch (or stirps) of the deceased’s family should be treated equally, and in this way, no greater share of the 60 percent residue would go to one of the deceased’s children who had three of his grandchildren than to another of the deceased’s children who only had one of his grandchildren (or none at all).

[17] The appellant also argues that her interpretation of the Will preserves tax efficiencies that are consistent with the testator’s general predisposition to minimize his tax burden.

[18] The respondent OCL argues that the appellant’s proposed interpretation, as a new argument, is inappropriate to raise for the first time on appeal. It is not necessary to address this issue as the appellant’s submissions on the proposed interpretation of the Will reveal no error in the application judge’s reasoning.

[19] While the appellant relies on case law for her proposed interpretation of per stirpes, including Re Harrington, [1985] O.J. No. 1046 (H.C.) at para. 21, rev’d, (February 19, 1986), 239/85 (C.A.), she has pointed to no case law involving a similar situation as this Will, which creates two separate classes of beneficiaries from two different generations.

[20] We do not accept that the case law interpreting the term per stirpes admits of only one definition. There is also case law supporting the application judge’s understanding of per stirpes as an intention to divide a portion of the estate into equal shares at the nearest generation with surviving heirs, or as a type of “gift-over” mechanism. The application judge, for example, relied on the analysis of this term in Dice Estate.

[21] The OCL submits that the case law makes clear that where a testator fails to identify which generation forms the stirpes, the court must look at the language of the will for context. The application judge took this approach in determining that per stirpes in the context of the Will in this case reflected an intention to benefit the living grandchildren, and any other grandchildren or great grandchildren born within the vesting period, equally.

[22] In our view, the application judge properly applied the armchair rule. The clause at issue is ambiguous. A number of different interpretations were open to the application judge to consider and she chose the one proposed by the OCL because it most closely conformed to her assessment of the testator’s intention, reading the Will as a whole at the time it was made.