COURT
FILE NO.: 01-4429104
DATE:
2007/12/03
ONTARIO
SUPERIOR COURT OF JUSTICE
|
B E T W E E N: |
) |
|
|
|
) |
|
|
Plaintiff
- and -
Larrie Michael Rudling
Defendant |
)
)
)
)
)
)
)
)
)
)
)
)
)
)
) |
R. D’Ambrosio, for the
Plaintiff
K. Power, for the Defendant |
|
|
) |
|
|
|
)) |
HEARD: November 20, 21, 22, 23, 26, 27,
28, 30, 2007 |
Moore J.
[1]
Pauline Rudling is survived and fondly remembered by her two
sons, the parties in this action, Ron and Larrie.
[2]
Pauline died on 18 January 2003. Shortly before she passed
on, she made a will and left her two properties, 887 and 940 Shaw Street
to her sons, one property to each. The sons cannot agree upon the
appropriate interpretation of the will. In essence, they disagree on
whether taxes and other estate expenses are to be shared between them.
[3]
There has now been a trial of an issue to determine the
brothers’ dispute.
The Will
[4]
The Last Will and Testament of Pauline Rudling is a standard
form, fill in the blanks will kit document dated 30 November 2002. It is
witnessed and bears Pauline’s mark, an X, on the signature lines on the
final two pages and, it is initialed with her mark and the initials of
the two witnesses on each of its four pages.
[5]
The hand printing was added into the will in Pauline’s
presence by her son, Larrie. Pauline read the will in its entirety
before executing it.
[6]
In paragraph 3 of the will, in the standard form text, this
wording appears:
I DIRECT all my just debts, funeral and
testamentary expenses, all succession duties, inheritance and death
taxes, and all expenses necessarily incidental thereto, to be paid and
satisfied by my Execut (“or” added in hand printing) as soon as
conveniently may be after my death.
[7]
The following paragraph provides that any beneficiary who
dies within 365 days of Pauline’s death will be deemed not to have
survived her and provides for the following distributions of her assets:
a) To Ron Rudling I leave 940 Shaw St.
Toronto Ont. With all loans, leins, mortgages attached.
To Larrie Rudling I leave 887 Shaw
St. Toronto free and clear of all debt.
b) I DISTRIBUTE any residue of my estate
as follows:
To my two sons Ron Rudling & Larrie
Rudling to be divided evenly 50 – 50
The Positions of the Parties
[8]
There is no contest about the validity of the will. There is
no other will competing for consideration in this case. The properties
were worth approximately equal amounts at the time of Pauline’s death.
[9]
Although the true size and shape of the estate at the time
of death and the expenses arising in connection with the estate after
Pauline’s death were not the subject of evidence at this trial, I
understand that there is considerable controversy between the parties on
these matters. For purposes of this trial, it appears that the parties
are content that the only estate assets of relevance are the two Shaw
Street properties.
[10]
The plaintiff’s primary position is that the will is clear in
its language and that a fair reading of the will and particularly of
these quoted excerpts supports the interpretation that all the expenses
of the estate, other than the mortgage registered on the 940 Shaw Street
property, must be paid out of the assets of the estate.
[11]
The parties agree that at the time of her death, Pauline was
debt free, but for any mortgages that were registered on title for 940
Shaw Street. The plaintiff’s position is, therefore, that the funeral
and testamentary expenses incurred following upon Pauline’s death,
inheritance and death taxes, capital gains taxes and all properly
incurred estate administration expenses must be paid by the estate and,
if no other assets exist but for the two properties on Shaw Street, paid
from borrowings made in equal proportions against the equity in those
properties.
[12]
The plaintiff submits that the word “debt” in the bequest of 887
Shaw Street has a specific and narrow meaning; he asserts:
that when the word “debt” as used by the
testatrix is examined along with the will as a whole and read in the
light of the circumstances known to the testatrix at the time the will
was made, the word “debt” should be interpreted by this Court to mean
“Ronnie’s debt”. More so, the Last Will and Testament of Pauline Rudling
should be read as 887 Shaw Street going to Larrie Rudling “free and
clear of all Ronnie’s debt”.
[13]
Arrangements are in place in order that funding of estate
expenses can be accomplished in the manner sought by the plaintiff.
[14]
The defendant is confident that the will can be interpreted upon
its terms without reference to extrinsic circumstances and that the
language of the will can be considered to be clear and compelling; the
defendant asserts that the wording of the will supports the outcome he
seeks, which will visit all costs, expenses and taxes generated as the
result of Pauline’s death solely upon that portion of the estate that
excludes the asset left to him, 887 Shaw Street.
[15]
Put another way, the defendant seeks to take 887 Shaw Street
intact and without having to pay anything toward mortgage or other debts
attaching to 940 Shaw Street at the time of Pauline’s death or
afterwards nor anything toward estate related expenses either.
[16]
To the extent that the language of the will might be considered
ambiguous and in need of amplification or explanation by reference to
the circumstances surrounding the making of the will, the parties hold
opposite views.
[17]
The plaintiff asserts that the whole of the relevant
circumstances support the view that Pauline intended to leave her estate
to her sons in equal shares, net after appropriate estate expenses were
satisfied.
[18]
The defendant asserts that Pauline intended to favour him in her
bequest of 887 Shaw Street such that he would be insulated from any
expense that might diminish its value at the time of Pauline’s death.
[19]
Whether extrinsic circumstances are to be considered or not, the
plaintiff submits that, as the defendant assisted Pauline in the
preparation and execution of the will and that as Larrie, in his
capacity as the original executor of the estate, propounded the will and
still to this day supports its reasonableness and validity, the will
must be interpreted against Larrie’s interests, as a matter of law. The
plaintiff asserts, in particular, that:
if the rules of construction are
inconclusive and if the court is attempting to decide between two
possible meanings, one being as probable as the next, the rule of
contra proferentem should be applied to settle the dispute against
the interests of the draftsman of the document.
[20]
Finally, the plaintiff relies upon the provisions of section 22
of the Succession Law Reform Act
R.S.O. 1990, c. S.26 in support of the proposition that the bequests
made in the will are fixed at the time of death and that they are
subject to reduction by taxes, charges and other expenses arising after
death and payable by the estate. That section reads as follows:
Except when a contrary
intention appears by the will, a will speaks and takes effect as if it
had been made immediately before the death of the testator with respect
to,
|
|
|
(a) the property of
the testator; and |
|
|
|
|
(b) the right,
chose in action, equitable estate or interest, right to insurance
proceeds or compensation, or mortgage, charge or other security
interest of the testator under subsection 20(2). |
|
[21]
On this issue, the plaintiff frames his submission as:
As there is no contrary intention in the
Will, it is to be construed as at the date of death. When this rule is
applied to the case at bar, the term “debt” should be taken to mean
“debt” as at the date of death, and not debt that subsequently arises.
[22]
The plaintiff says that the defendant has failed to establish
his position and has failed to corroborate his own evidence. The
plaintiff asserts:
Broadly stated, the Plaintiff’s evidence
was supported by the documents or the application of common sense and
probability. However, and more importantly, the evidence of the
Plaintiff was corroborated on every material point of evidence, as is
required under section 13 of the Evidence Act.
The Defendant did not provide any
admissible evidence to support his suspicions and beliefs. Furthermore,
most if not all of his evidence was not corroborated by the documents or
any of the other witnesses. In the end, all the Defendant’s case is
based on unsubstantiated evidence and allegations.
Court Orders
[23]
By order dated 8 February 2006, Bellamy J. ordered that a trial
of the issue is the interpretation on the will of Pauline Rudling.
[24]
From the description of the Application before Her Honour, it
appears that Ron had applied, in his capacity as Estate Trustee, for an
interpretation of the phrase “free and clear of all debts” as it appears
in the will.
[25]
Additional relief sought in this application was adjourned
pending the result of the trial of the issue and Bellamy J. added
directions and timelines for proceedings to precede the trial of the
issue.
[26]
By order dated 30 November 2006, Belobaba J. ordered that there
be a trial of an issue on the interpretation of the will.
[27]
Belobaba J. also made directions on procedural matters,
including that the parties exchange pleadings.
[28]
The pleadings define the issues for this trial more broadly than
the wording apparently used in the original Application.
The Central Issue
[29]
Both because of and despite the assertions contained in the
pleadings, the central issue in this case is whether the will can be
fairly construed upon the language contained within its four corners and
without need of extrinsic evidence?
[30]
In my view the answer to that question is yes; the answer is
clear, so clear in fact that I view the trial of this action to have
been wholly unnecessary.
[31]
It would require a tortured interpretation of the word “debt”,
as used in relation to the bequest of 887 Shaw Street to include within
its meaning all of the taxes, expenses and other charges that the Estate
Trustee is directed by the will to satisfy in addition to “debts” of the
estate.
[32]
I have no hesitation in finding that all reasonable charges
against the estate arising from the death of the testatrix are, by the
terms of the will, intended to be paid from the estate before the
specific bequests of the two properties are made at the 365 day mark
after Pauline’s death.
[33]
In light of the Orders earlier made by this court and of the
broader statement of the issue in the pleadings, however, and because I
am aware of the recent tendency of Canadian courts to apply the
“armchair rule” to the interpretation of wills, I will also address the
interpretation of the will in light of the circumstances surrounding the
will.
The Armchair Rule
[34]
In his 2 volume book on and entitled Estate Litigation
(volume 2, Second Edition, Thomson*Carswell, c. 18.6) Brian
Schnurr confirms that:
Courts in Canada have generally taken a
more liberal approach with respect to the issue of the admissibility of
evidence of surrounding circumstances, i.e. the circumstances of
which the testator was aware when he made the will. Under the rule
which has come to be known as the "armchair rule", the evidence of
surrounding circumstances is admissible in construing each and every
will……..
However, while evidence of surrounding
circumstances is admissible, direct evidence of the testator's actual
intention is not admissible.
Extrinsic Circumstances - the
Challenge
[35]
This court heard evidence from 10 witnesses over the course of 7
days, ostensibly on the circumstances surrounding the making of this
will. If that was the object of the exercise, much of the evidence
missed its mark.
[36]
Both parties sought to retrace the family history and
inter-personal relations back through several decades with the
inevitable result that the margins of relevance to the issue of the
circumstances surrounding this will became very blurred.
[37]
The parties hold differing recollections of life within the
Rudling family. They and some of the witnesses, notably Donna Rudling,
were clearly challenged in their attempts to maintain objectivity and to
resist recounting revisionist views of the family history.
[38]
What seemed to be lost on the parties is that the court is not
assisted by evidence of the management of the estate of their father,
who passed away in 1972. Neither brother has ever seen their father’s
will and yet they disagree about the extent to which Ron may have
obtained assets their father left behind. This case, however, is not the
proper vehicle by which to settle issues or resentment lingering from
the father’s passing.
[39]
Nor is this court helped by finger pointing by the parties and
others about who attended more often upon or exhibited more compassion
or provided more care and comfort for Pauline during her last years of
life.
[40]
Both sons cared for their mother when they could. Both knew that
they each played an important role in looking after Pauline’s care and
feeding. It was not a contest, particularly as the evidence clearly
established that Pauline enjoyed around the clock monitoring and care
from nannies and other health care professionals during the many years
that she was burdened with the very severely disabling effects of
rheumatoid arthritis, until her death in January 2003.
[41]
Similarly, much time and attention was focused on Ron’s business
dealings and with an assault upon him that apparently arose from a
business venture ongoing in 1992. Admittedly, Ron was beaten and left
for dead and undoubtedly Pauline was upset, traumatized and even annoyed
by the event and concerned, as a mother, for the well being of her son.
That said, however, there was no evidence that Pauline was ever afraid
to be with Ron or that such a concern could reasonably have been a
circumstance relevant to the making of her will on 30 November 2002.
Indeed, even Larrie confirmed his belief that his mother did not fear
Ron, at least not physically.
[42]
These are but a few examples of the tangents traveled in some of
the evidence. Apparently the disagreements between the parties are many
and ongoing, some in litigation before this court.
[43]
Upon the whole of the evidence it is clear to me that Pauline
loved both of her sons. Rupert Feurtado was a long time friend of the
family and a witness to the will. In his cross-examination, Rupert
agreed that he heard Pauline say that she has two boys and that one
should get one house and the other
should get the other house. He interpreted that to mean that she
intended to treat her sons equally.
[44]
He stated that she loved both of her boys and added, with
refreshing objectivity and emphasis, “very much so”. On leaving the
stand, Rupert volunteered: "if I may say so, Mrs. Rudling would like to
see her two boys share everything in peace, no fussing or fighting". If
only they had listened to him.
[45]
Accordingly, the challenge in this case is to sort through the
evidence and separate out accusations grounded in suspicion and anger
from those that inform a fair view of the meaning of the words appearing
in the will.
Pauline’s Health
[46]
Pauline was described, uniformly by witnesses in this case, as
“strong”. She was physically well and active through much of her life.
She developed rheumatoid arthritis and it became worse over time. She
began to use a wheelchair in about 1983, within about 10 years of the
death of her husband.
[47]
Over the ensuing years, she became more disabled physically but
remained bright and, as Ms. Reeson put it, Pauline was intellectually
quite alert, very strong, caring and very inclusive of new people.
[48]
Another witness, Coral Sym, Pauline’s friend and bookkeeper for
many years, an articulate and credible historian, described Pauline as
very strong willed and old-fashioned. She added that she "says exactly
what's on her mind" and was “plain spoken”. She also used the words
"very sharp… as a tack". “No games, no word play”, she said. She added
that Pauline “knew right down to the last dime where the money went”.
[49]
Although he added precious little to the case, certainly Aaron
Rudling, Pauline’s grandson, was well positioned to describe Pauline’s
mental acuity. He confirmed that Pauline's mind was sharp at all times.
They joked together. She was "definitely on the ball all the time", he
said.
[50]
There is no issue of testamentary capacity before this court but
the evidence about Pauline’s mental acuity is helpful for it
demonstrates that she continued to enjoy a fairly high level of
cognitive functioning over the years until the time she placed her mark
upon the will, her arthritic condition having robbed her of the ability
to write her name.
[51]
Indeed, both sons saw their mother after the will was made; they
visited and spoke with her in hospital in the weeks before her death.
Almost until the end, she knew her own mind and was quite sharp. On this
one thing, both parties agreed.
[52]
Until at least November of 2002, Larrie believed that his mother
remained capable of managing her financial affairs. Larrrie asserts that
Pauline was hindered in that regard by the fact that Ron aggressively
assumed and managed those affairs for their mother. That, even if true,
is a matter very different from Pauline’s ability to understand her
affairs or the meaning of simple words in a document such as this will.
[53]
Ron spoke to a different version of the extent to which Pauline
was active in managing her affairs in the years leading toward the end
of 2002. He asserts that Pauline knew of the mortgages in place over
those years on her rental income property, 940 Shaw Street. According to
Ron, Pauline willingly allowed Ron to use that property as collateral
for his business and personal financial dealings. Clearly, Ron was also
of the view that Pauline was mentally fit and active at all relevant
times.
[54]
Ron was not aware that his mother had made the will but he
raises no concern here that she was unable to understand any language in
the will, quite the contrary.
[55]
When asked whether Ron would ever steal money from Pauline,
Coral Sym laughed and said that she was too smart and too sharp and she
didn't have any money for Ron to steal in any event.
[56]
Without reservation, I accept the evidence clearly and
convincingly given by Ms. Sym that Pauline understood the content of the
tax returns Ms. Sym prepared for her over the years. Whenever Pauline
had any questions arising from her review of the tax returns, she asked
those questions of Ms. Sym and continued to ask questions until her
concerns were satisfied.
[57]
It follows that, even as an octogenarian, Pauline well
understood her assets, liabilities, income and expenses as detailed in
the many tax returns Ms. Sym prepared.
[58]
Ms. Sym also said, and I accept this to be so, that Pauline was
very proud that she had two properties to leave, one to each of her
boys. She added that Pauline was aware that there were mortgages on
number 940 Shaw Street. Pauline allowed Ron to use the house as
collateral for his loans.
[59]
In the result, upon the evidence and in view of the fact that
there is no evidence suggesting, let alone establishing, that Pauline
was unable to understand her financial affairs, the question becomes: Do
the relevant extrinsic circumstances support an interpretation of the
will that turns the will into a vehicle aimed at redressing financial
wrongs perceived by the defendant, wrongs created by Ron’s business
dealings and allegedly adversely affecting either Pauline or Larrie or
both of them? The answer must be: No.
[60]
Clearly, Pauline was not shy about expressing her views nor
unable to intelligently articulate them. Conspicuous by its absence in
this case is any evidence that Pauline wished to treat her sons
otherwise than equally. A fair reading of the language Pauline endorsed
as appropriate at the time she placed her mark upon her will requires
application of the concepts of equality and balance, concepts clearly
established by reference to the extrinsic circumstances.
[61]
To interpret the will as the defendant seeks will result in an
outcome that spares the defendant and visits the estate’s necessary and
proper expenses upon the plaintiff. Relevant extrinsic circumstances in
evidence in this case simply do not support the defendant’s
interpretation of Pauline’s will.
The Key to this Case
[62]
In my view, the key to this case is found within the read-ins
from the transcript of the Examination for Discovery of the defendant,
now a part of the plaintiff’s case. Relevant portions follow and they
clearly contradict the position of the defendant and speak volumes about
the reasonable interpretation of Pauline’s will called for in this
matter:
Relevant Excerpts:
P 102 Q 651…..she was worried about things we didn't know that Ron had
probably, or may have put, or may not have put in her name, or her
married name….. we were very worried more about what we didn't know then
what she knew. And made it clear that Ronnie was to get 940 Shaw,
because he had-- I guess he had a mortgage on it. I wasn't really aware
of what, or how much, or what any details were. That's Ronnie's
business-- and I was to get 887 free and clear of all debts and monies…
P
103 Q 652….Ronnie gets one house, I get the other house, and
that was it
Q
655…whatever bills and mortgages and problems he's created for
himself would be his problem, not mine. It seemed at the
time very simple and perhaps now I think it was too simple
p 109 Q 689… no, my mother said we've got to keep
it simple…
Q
690... then she said Ronnie gets 940 Shaw St with all the money
owed…. so let's make that part clear. "Free and clear of all debt".
Which didn't make me, we thought, responsible for any of Ronnie's
debts. That seemed to be my mother's main concern.
(Emphasis added)
[63]
Larrie stated at trial that his mother was petrified of losing
her houses and yet his description at discovery of her concerns shows no
sign of that. Rather, it seems more likely that she was interested in
sparing Larrie any mortgage debt outstanding on 940 Shaw and leaving
that property to Ron with whatever mortgage indebtedness upon it for Ron
to manage.
[64]
In my view, the language selected and used in the devises of the
two properties accomplishes the spirit and object of Pauline’s intention
as described by Larrie. There is no suggestion in this evidence or
elsewhere that supports going further and sheltering Larrie from proper
estate expenses as well.
The Law
[65]
The plaintiff submits, and I agree, that Re Burke (1950),
20 DLR (2d) 396 (Ont. CA) is an instructive case and adds:
In referring to the proper approach his
Honour states, “Each Judge must endeavour to place himself in the
position of the testator at the time when the last will and testament
was made. He should concentrate his thoughts on the circumstances which
then existed and which might reasonably be expected to influence the
testator in the disposition of his property. He must give due weight to
those circumstances in so far as they bear on the intention of the
testator. He should then study the whole contents of the will and, after
full consideration of all the provisions and language used therein, try
to find what intention was in the mind of the testator. When an opinion
has been formed as to that intention, the court should strive to give
effect to it and should do so unless there is some rule or principle of
law that prohibits it from doing so.”
[66]
The defendant does not specifically dispute this proposition of
law but asserts a different approach:
In Cullen Estate v. Cullen, (1997)
17 E.T.R. (2nd) 197 (Ont. Gen.Div.), the court considered a situation
where there were insufficient assets to pay all the legacies in full.
The court reviewed the abatement of general legacies, and found that in
the absence of a contrary intention by the testator, that the general
legacies in that case abated in equal proportion.
It is
respectfully submitted there is a contrary intention in the will of
Pauline Rudling. The phrase “free and clear of all debt” is a contrary
intention and demonstrative that Pauline Rudling intended for Larrie
Rudling to receive 887 Shaw Street in Toronto free and clear of all
debt.
It is respectfully submitted that when
interpreting the words in their ordinary context that the wording of the
will is not ambiguous. It is respectfully submitted that the Plaintiff
is seeking to rewrite the will from “free and clear of all debt” to
“free and clear of all debts up to the date of death”. It is
respectfully submitted that it is not the task of the court to rewrite
the will.
[67]
The defendant may rest assured that this court has no intention
of re-writing the will in the instant case; I simply do not accept the
interpretation of Pauline’s will urged upon the court by the defendant.
Result
[68]
This court interprets the Last Will and Testament of the late
Pauline Rudling, her will dated 30 November 2003, such that all the
expenses of the estate, other than the mortgage registered at the time
of death on the 940 Shaw Street property must be shared equally between
the plaintiff and the defendant.
[69]
For clarity, I will add that I agree with the interpretation
urged upon this court regarding the application of the provisions of
section 22 of the Succession Law Reform Act. I find no contrary
intention expressed within the will and read paragraph 3 of the will to
conform entirely with section 22 of the act.
[70]
Ordinarily, costs follow the event; however, the parties have
not yet had an opportunity to make submissions on costs and, therefore,
I will therefore I will not dispose of costs issues here.
[71]
At the request of the court, the parties agreed to exchange
bills of costs during the trial and again at the end of the trial; as
such, they are well positioned to understand each other’s position on
costs issues and to agree upon the cost obligations that may arise. If,
however, the parties cannot agree upon an appropriate order for costs, I
may be spoken to.
______________________________
MOORE J.
Released: 3 December 2007
===============================================================================================
========================================================================================
PDF Format