Best Interests of the Estate and Removal of Notice of Dispute under the Wills, Estates and Succession Act (WESA)

Richardson Estate (Re), [2014] B.C.J. No. 2945 - J. Steeves

Wills, Estates and Succession Act

An application was made to provide for a declaration that the applicant, Nancy Chen, was the spouse of the deceased, Philip Richardson, and the sole beneficiary of his estate.  The application also included a declaration for removal of the respondent's dispute.  The respondent, Stephen Richardson, the brother of the deceased, disputed that the applicant was the deceased's common law spouse.  

Nancy and Philip had an intimate relationship for 15 years.  The two had a ceremony which was similar to a traditional Chinese wedding, but never formally married.  Nancy had worked in Surrey and owned a home there while Philip worked on Gambier Island and owned a home there as well.  Nancy cared for Philip's elderly parents and his mother had given Nancy a wedding ring from her marriage.  The couple traveled together, shared duties and provided for each other with Philip contributing to raising Nancy's sons (school costs).  Philip had named Nancy as beneficiary of his investment account and she had done the same for him.  

HELD:  Application allowed.

The court delved into the facts surrounding Philip and Nancy's relationship and found that the overall evidence supported a common law relationship.  

The couple had structured their relationship so that they could work in two locations and look after their respective families.  There was evidence of community recognition of their relationship and there was financial co-mingling.  

The finding that Nancy was a spouse and that his intestate estate must be distributed to her was conclusive of his brother's dispute.  It was not in the best interests of the estate to leave Stephen's dispute lying over the estate.  Taking into consideration economics and the value of the estate, proceeding on a spent dispute would not be in the best interests of the estate.  

In coming to the decision, the court highlighted the new Supreme Court Rules which came into force with the Wills, Estates and Succession Act:

(b)      Best interests of the estate

[54]        New Supreme Court Rules came into force with WESA. The applicant seeks the removal of the disputant’s notice of dispute pursuant to the newRule 25-14(1)(h). Rule 25-10(11) sets out the grounds for removal:

Grounds on which notice of dispute may be removed

(11) On an application under subrule (10), the court may, by order in Form P31, remove a notice of dispute if the court determines that the filing is not in the best interests of the estate.

As with WESA itself, counsel advise that there are as yet no cases interpreting these Rules.

[55]        As a first point it is useful to return to the July 21, 2014 notice of dispute. The basis of the dispute is that the disputant “… disputes that [the applicant], who is applying by Letters of Administration and claiming to be the sole beneficiary, is a spouse of the deceased.” As above, I have found that the applicant was the spouse of Mr. Richardson and that his intestate estate must be distributed to her, pursuant to ss. 2(1) and  20 of WESA, respectively. Those findings are, in my view, conclusive as to the dispute in this case and I can find no basis for proceeding further. Put another way, I conclude that it would not be in the best interests of the estate to leave a spent dispute lying over the estate.

[56]        A related matter is I have decided above that there should not be an adjournment of the applicant’s application so that a full or summary trial can take place. The evidence in this case is by affidavit. While there are clear differences between affidavit evidence and viva voce evidence, the former are entirely adequate for the issues in this case.

[57]        I was directed by the disputant to the approach prior to WESA under the then Rule 19(24). Different language was used and the issue was whether to strike a caveat under the then Rule 19(24). It provided that a caveat could be struck if it “discloses no reasonable claim or defence as the case may be”, among other reasons. Before a caveat was struck out it had to be “plain and obvious” that it did not disclose a reasonable claim (or defence). As well, it was to be assumed that the facts plead were true and any doubt was to be resolved in letting the pleading stand (Chang Estate v. Chang, 2010 BCCA 111 (CanLII) at para 39; citing Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 SCR 959).

[58]        As can be seen above, the new language in Rule 25-10(11) describes removing a notice of dispute and whether that would be in the “best interests of the estate.” In my view this is broad language and with a substantially different objective than the previous Rule. Instead of a focus on the nature of the pleadings under the previous Rule, the focus now is on the estate and what is in its best interest.

[59]        It is submitted on behalf of the disputant that the test to be applied to this new language is a three stage test: does the disputant have standing to challenge the will or appointment of an administrator without a will; is there a reasonable claim or a legitimate issue to be contested; and is the removal of the notice of dispute consistent with protecting the integrity of the probate and administration process? There is considerable overlap between this approach and the approach under the former Rule 19(24) inasmuch as both focus on the merits of the dispute and the process of probate and administration. Those matters may in some circumstances be relevant to determining the best interests of the estate. However, the best interests of the estate is broader language and capable of including other issues.

[60]        Another aspect of the submission of the disputant is to say that it “will always” be in the best interests of the estate to challenge the appointment of an executor or administrator thus making valid any challenge. As a very general proposition I accept that valid disputes should not be discouraged. However, making it a final legal conclusion as a matter of interpreting WESA and the new Rules would, in my view, make Rule 25-10(11) essentially a dead letter because no notice of dispute could be removed.

[61]        There is a previous case which provides some assistance in the interpretation of the phrase “best interests of the estate” (Re: Estate of Fannie Cleverley, 2000 BCSC 1454 (CanLII) at paras. 24-26). In that case a beneficiarysaid that an executor was not protecting the beneficiaries because he was not pursuing litigation on behalf of the estate. The executor, appearing on his own, said that the litigation in question would involve substantial costs for a nominal value to the estate of not more than $20,000. The executor submitted to the court that it would not be in the best interests of the estate to pursue the litigation. Master Joyce (as he then was) concluded that he was in no better position than the executor with whom he agreed.

[62]        Looked at in this light, the best interests of the estate are an economic issue, one requiring the weighing of the value of a decision or issue in dispute with the overall value of the estate. I conclude that this approach has some merit in interpreting Rule 25-10(11) in this case. I hasten to add that non-economic issues can be important to the best interests of the estate such as, for example, situations involving personal items or even real property that has unique value. Those circumstances are not a concern here.

[63]        In this case the potential estate of Mr. Richardson includes about $105,000 in term deposits and cash. I note that this is an imprecise estimate in as much as it is based on what Mr. Richardson told Ms. Weiser in 2010. I presume that the imprecise estimate of the estate arises from the fact that there is no administrator who has authority to itemize or value the estate.

[64]        In reaching the estimate of $105,000, I have excluded an RRSP and investment account, as described by Ms. Weiser, because the applicant is the named beneficiary. With respect to land, as discussed above, there are State of Title Certificates indicating that Mr. Richardson is the owner of the property at 837 West Bay Road and another property.

[65]        The potential estate of Mr. Richardson includes the $105,000 in cash and term deposits as well as the value of his interest in the properties on Gambier Island. I acknowledge the importance of this estate to the applicant and the disputant but it is also appropriate to point out that it is not a large estate as measured by its value. Nor is it a large amount when compared with the cost of litigation, litigation that has essentially been answered by the finding above that the applicant was the spouse of Mr. Richardson.

[66]        On this basis I conclude that it is in the best interests of the estate to remove the notice of dispute in this case.

D.        Summary

[67]        In summary, I have concluded above that the two residences of the applicant and Mr. Richardson are explained in large part by the fact that they had work and family obligations on Gambier Island and in Surrey. As well, there was strong community acceptance of their relationship and there was financial co-mingling between them. For these reasons, I conclude that the applicant was the spouse of Mr. Richardson and, under s. 20 of WESA, his intestate estate must be distributed to her.

[68]        The above conclusion also means that that the notice of dispute has been conclusively answered and it should be removed. It would not be in the best interests of the estate to somehow advance litigation that has been conclusively decided by the decision that the applicant was the spouse of Mr. Richardson. In addition, as an economic matter considered with the value of the estate, proceeding on a spent dispute would not be in the best interests of the estate.

[69]        The applicant is entitled to the three orders sought in her application. She is also entitled to the ordinary costs of her application.