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Review of Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII) & Spence v. BMO Trust Company, 2016 ONCA 196 (CanLII)
By: Jonathan M. Friedman, B.A., LL.B.
The case of Spence v. BMO Trust Company1is particularly unique and brings to light the apparent conflict between testamentary freedom, which allows an individual to distribute his/her property as he/she chooses2, and whether or not a Last Will & Testament can be prepared in such a way as to offend public policy.
The facts of Spence v. BMO Trust Company3can be summarized as follows;
Rector Emanuel Spence, the testator, passed away on January 25, 2013 at the age of 71 and was predeceased by his wife. Mr. Spence prepared and executed a Will leaving the majority of his estate to his estranged daughter, Donna and her two minor children Kairo and Kailen who at the time of the commencement of this Application resided in the United Kingdom. When Mr. Spence separated from Verolin and Donna’s mother, Verolin began to reside exclusively with the deceased and Donna resided exclusively with her mother. After separation, Donna and Verolin never lived together with the same parent, nor did they communicate with each other.
In 1979, the deceased immigrated to Canada. Verolin remained in London, England to complete her secondary school education and immigrated to Canada to reside with her father in 1984. Donna remained in the United Kingdom and never immigrated to Canada. At no time when Verolin was living with her father, or in communication with him, did he ever express an interest in visiting Donna, nor did Donna ever visit him during the time he lived in England and Canada. Kairo and Kailen have never met the deceased, nor did they have any contact with him.
Verolin’s father supported her financially throughout her studies at York University and University of London between 1987 and 1991. Verolin returned to reside with her father in between 1992 and 1994 upon completion of her studies abroad. Around that time, Mr. Spence advised Verolin that he had made a will which provided that she would inherit their home. The deceased also gave Verolin a set of keys allowing her unlimited and continued use of that property.
From 1994 to 1997, the deceased supported Verolin while she attended full-time studies at the New York School of Law at Queen’s College.
In September 2002, Verolin’s relationship with her father came to a dramatic end. She told her father that she was pregnant and that the father of her child was Caucasian. Her father exclaimed that he was ashamed of Verolin and from that point onwards, the deceased restricted his communication with her. He made it clear to Verolin, according to her affidavit, that he would not allow a white man’s child in his house.
From 2002 until his death in 2013, the deceased would not return Verolin’s calls and refused to have anything to do with his grandson, Alexander.
The deceased’s last will and testament, dated May 12, 2010, includes a clause specifically pertaining to the disinheritance of Verolin at page 4, paragraph 5(h), which is reproduced below:
I specifically bequeath nothing to my daughter, Verolin Spence, as she has had no communication with me for several years and has shown no interest in me as a father.
The will appoints BMO as estate trustee and distributes the estate to Donna and her two children.
Verolin applied to the court to set aside the last will and testament of her father. Verolin asserts that the will is void for public policy reasons and should be set aside resulting in an intestacy. An intestacy under the Succession Law Reform Act in Ontario would result in the two sisters sharing the estate equally. BMO’s position is that public policy does not apply absent a testamentary document that is manifestly contrary to the public interest. Donna, did not file a Notice of Appearance, nor did she attend at the hearing of the application, although properly served. There is therefore no evidence to contradict that of Verolin and Ms. Parchment that the deceased had no relationship with his daughter, Donna, nor had he ever seen his grandchildren, Kairo and Kailen4.
Ms. Imogene Parchment, the closest friend to the deceased before he died and one of the few attendees at the deceased’s funeral, deposed that when he found out that the father of Verolin’s son was not black, he told Ms. Parchment that he had no further use for Verolin and her “bastard white son”. He told her on several occasions that the reason he disinherited Verolin and her son was because the father of her son was white. He told her that he changed his will on May 12, 2010, because he wanted to exclude Verolin and include Donna and her two sons, since the father of Donna’s sons was black.
Ms. Parchment’s evidence in her affidavit was that it was clear to her that the reason the deceased excluded Verolin from his will and included Donna and her sons, was because Verolin had a child with a man who was not black and he wanted to discriminate against her.5
The leading authority on the doctrine of public policy is Canada Trustco v. Ontario (Human Rights Commission) also known as Re: Leonard6. In that case, the court considered whether the terms of a trust established by Ruben Wells Leonard was void by (a) reason of public policy as declared in the Human Rights Code 1981; (b) other public policy; (c) discrimination because of race, creed citizenship, ancestry, place of origin, colour, ethnic origin, sex, handicap or otherwise; or (d) certainty.7 However, it is interesting to note that Re: Leonard does not involved the doctrine of public policy relating to a Will.
BMO argued that the public policy doctrine does not apply in a case such as this in which the Will did not explicitly state anything that would contravene public policy or create harm to the public. BMO has a point here as, in fact, there is no mention in the Will that Verolin was being disinherited because the father of her child was Caucasian and states that she was to be disinherited because of her lack of communication with her father. Regardless of the fact that the deceased, to Verolin’s knowledge and based off of Ms. Parchment’s Affidavit evidence, rarely spoke of and/or communicated with Donna and her two sons, Verolin’s lack of communication with her father in the later years of his life does provide an explanation for the disinheritance of Verolin. Verolin even gives evidence that she had not communicated with her father since she informed him that she was pregnant and the father of his future grandchild was Caucasian8.
The applicants relied on the case of McCorkill v McCorkill Estate9. In that case, the court determined that the payment or transfer of the residue of the McCorkill Estate to National Alliance was against public policy, as National Alliance had a long history of inspiring and carrying out hate motivated violence and terror. The court held that the information disseminated by National Alliance was hate propaganda, which it described as “malodorous, malicious and evil” and was of the kind targeted by the Criminal Code. Despite the fact that the Will of the deceased in this case (like in Spence10) did not contain any impugned terms11, the court held that the dissemination of hate propaganda by the National Alliance violated public policy of Canada. The residual request to National Alliance in the will of Harry Robert McCorkill was found to be void.12
The Applicants’ reliance and application of McCorkill13 to the facts herein is interesting to say the least and could raise a number of questions for the Court including, but not limited to, the following;
Do the contents of Mr. Spence’s Will on their face violate public policy?
Does an individual’s disinheritance contravene public policy, for whatever reason?
Shouldn’t Mr. Spence have the testamentary freedom to do as he wishes?
Does Mr. Spence leaving his estate to his daughter residing in the United Kingdom, whether estranged or not, contravene public policy in any way?
Is there any evidence that Donna would use any of her inheritance to do anything which would violate public policy such as fund hate speech (as in McCorkill14)?
Can the Court search behind the text of a Will and declare a Will invalid based on the testator’s presumed intention(s) despite the fact that the Will specifically provides the reasoning behind a testator’s intention(s)?
Should McCorkill15 be applied in more common situations thereby causing Courts to permit the restriction of a testator’s testamentary freedom more frequently?
In summary the Court held that despite Ms. Parchment’s evidence not being admissible16, there was no explanation for such a sudden and complete cessation of communication between the deceased and Verolin other than the information received by the deceased about the father of his grandson17 as there was no evidence put before the Court to the contrary18. As a result, the Court held that Verolin’s disinheritance solely because the father of her child was Caucasian offended not only human sensibilities but also public policy and set aside the deceased’s will19.
As a result of the above, BMO appealed the Ontario Superior Court’s decision to the Court of Appeal based on four arguments;
The extrinsic evidence, as evidence of the deceased’s intention behind disinheriting Verolin and benefiting Donna and her children, 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;
The application judge unjustifiably interfered with Eric’s testamentary freedom, which allows him to distribute his property as he chooses;
For various reasons, the application judge did not have jurisdiction to set aside the entire Will.
Allowing the application judge’s decision to stand would increase uncertainty in estates law and open the floodgates to litigation in estates matters.20
The Court of Appeal, in overturning the decision rendered by the Ontario Superior Court and declaring the deceased’s Will as valid, held that the application judge erred by admitting the Extrinsic Evidence as Extrinsic Evidence because, as a general principle, is not admissible when the testator’s will is clear and unambiguous on its face.21
Also, the Court of Appeal held that the application judge applied the facts of McCorkill22 incorrectly, as McCorkill23 must be understood in the context of its unique factual circumstances.24
Lastly, the Court of Appeal held that assuming that the testator’s testamentary bequest disinherited Verolin for expressly stated discriminatory reasons, the bequest would nonetheless be valid as reflecting a testator’s intentional, private disposition of his property25 as, absent valid legislative provision to the contrary, the common law principle of testamentary freedom protects a testator’s right to unconditionally dispose of his/her property and to choose his/her beneficiaries as he/she wishes, even on discriminatory grounds.26
In my opinion, the Court of Appeal rightly determined that McCorkill27 should be applied narrowly in cases where the factual circumstances align and that a testator’s testamentary freedom allows for situations where a testator’s Last Will & Testament can be prepared in such a manner as to offend public policy.
1 Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII)
2 Spence v. BMO Trust Company, 2016 ONCA 196 (CanLII), at para 25. However, testamentary freedom is limited by certain exceptions in the statue(s).
3 Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII)
4 Ibid at paragraph 47
5 Ibid at paragraphs 1-32
6 1990 CanLII 6849 (ON CA), 1990 CarswellOnt 486
7 Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII) at para 35
8 Ibid. at para 38.
9 2014 NBQB 148 (CanLII), 2014 NBBR 148 (NB QB)
10 Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII)
11 Ibid. at para 48
12 Ibid. at para 39
13 2014 NBQB 148 (CanLII), 2014 NBBR 148 (NB QB)
15 2014 NBQB 148 (CanLII), 2014 NBBR 148 (NB QB)
16 Spence v. BMO Trust Company, 2015 ONSC 615 (CanLII) at para 45
17 Ibid. at para 46
18 Ibid. at para 49
19 Ibid. at para 49 & 50
20 Spence v. BMO Trust Company, 2016 ONCA 196 (CanLII), at paras 24-26.
21 Ibid. at paras 89 & 90
22 2014 NBQB 148 (CanLII), 2014 NBBR 148 (NB QB)
24 Spence v. BMO Trust Company, 2016 ONCA 196 (CanLII), at paras 66-68
25 Ibid at para 73
26 Ibid. at para 75.
27 2014 NBQB 148 (CanLII), 2014 NBBR 148 (NB QB)
Jonathan M. Friedman
This article should not be used in substitute for legal advice and was in no way intended to be relied upon as legal advice. Furthermore, the contents of these notes are intended as a guide for readers. They can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law.