Shortly before committing suicide, a person wrote a suicide note that met a holograph will. However, the day before his death, he had been drinking and using drugs. The issue before the Superior Court of Justice was whether the deceased had testamentary capacity when he wrote the suicide note. The court concluded that he did not.
The Ontario Court of Appeal recently reversed the application judge’s decision and made comments about the principles governing cost awards in estate litigation.
Determining Testamentary Capacity
The requirements for a holograph will are set out in section 6 of the Succession Law Reform Act:
A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness.
A testator must have a “sound disposing of mind.” To have a sound disposing mind, a testator must:
a. understand the nature and effect of a will;
b. recollect the nature and extent of his or her property;
c. understand the extent of what he or she is giving under the will;
d. remember the people that he or she might be expected to benefit under his or her will; and
e. where applicable, understand the nature of the claims that may be made by persons he or she is excluding under the will.
The Court of Appeal found that the application judge largely focused on the deceased’s use of drugs and alcohol the day before he died and failed to apply these legal principles to the facts of the case. In performing its analysis, the Court of Appeal concluded that the deceased had testamentary capacity, based on the following:
The Deceased Understood the Nature and Effect of a Will
The court found “no doubt” that the deceased understood the nature and effect of a will. He had never sought legal assistance in making a will and nonetheless prepared a two Wills and the Suicide Note, which meets the formal requirements for a valid will, being wholly in his own handwriting and bearing his signature. He clearly thought he was writing a will as he made a declaration that prior bequeathments were void and disposed of his assets.
The Deceased Recollected the Nature and Extent of His Property
The Suicide Note demonstrated that the deceased was aware of his few significant assets, including an insurance policy and a beloved cabin.
The Deceased Understood the Extent of What He Was Giving in the Will
The wording of the Suicide Note showed the deceased’s clear intention to bequeath all his property, no matter the nature and extent.
The Deceased Remembered Most People of the People That Might be Expected to Benefit Under His Will
In the Suicide Note, the deceased remembered three of the four people who might be expected to benefit under his will and the court found a reasonable explanation for why the deceased did not refer to the fourth.
The Deceased Understood the Nature of the Claims His Wife Might Make
The deceased was married at the time of his death and his wife might have a claim against the deceased’s estate. However, the court found that the deceased had no reason to be concerned about such a claim.
The Deceased’s Substance Abuse
The Court stated that it is an error to infer a lack of testamentary capacity based on alcohol and drugs. Suppose a testator suffers from a disorder or condition that may impact his or her testamentary capacity. In that case, that matter should be considered when applying the relevant legal principles for determining testamentary capacity.
The Costs Were Wrongfully Decided
The Court of Appeal found that the Cost Order was plainly wrong and needed to be set aside as there was no justification for departing from the general principles of costs awards in estate litigation in this case.
The application judge referred to the governing principles on costs orders in the estate. However, he failed to follow those principles. Traditionally, the parties’ costs were paid from the testator’s estate in estate litigation. The Court noted the public policy considerations that underlay the traditional approach: the need to give effect to valid wills that reflect the intention of competent testators and the need to ensure that estates are properly administered. Accordingly, if there are reasonable grounds on which to question the execution of a will or the testator’s capacity to make the will, it is in the public interest that such questions be resolved without cost to those questioning the will’s validity. And, where the testator causes the difficulties or ambiguities that gave rise to the litigation, it is again appropriate for the testator’s estate to bear the costs of their resolution.
Over time, though, it became apparent that the courts had to guard against allowing their processes to be used to unnecessarily deplete a testator’s estate and a modern approach emerged.
When deciding costs in estate litigation, the court must begin by carefully scrutinizing the litigation to determine whether one or more of the public policy considerations applies. If so, as a general principle, the parties’ reasonable costs are to be paid from the testator’s estate.
This approach, the court explained, is not a balancing of the public policy considerations against the rationale for cost rules that ordinarily apply to civil litigation. Rather, it is a sequential analysis, the first step of which is to determine whether one or more of the public policy considerations apply. If so, generally the parties’ reasonable costs should be payable from the estate. A departure from this general principle requires justification on the part of the court.
In considering the application judge’s approach, the Court found that the application judge failed to take the necessary first step. Instead of determining whether one or more of the public policy considerations underlay the Application, he began from the premise that the civil litigation costs regime operated. Consequently, he ordered the Appellant – as the losing party – to pay the bulk of the other parties’ costs.
Had the Application Judge taken that first step, he would have found that the public policy considerations applied, and the Application was necessary to ensure that the deceased’s estate was properly administered. Given the suspicious circumstances in which the deceased wrote the Suicide Note, there were reasonable grounds to question the deceased’s testamentary capacity when he wrote the Suicide Note. Moreover, it was the deceased’s conduct that led to the litigation – because of the circumstances in which he wrote the Suicide Note, it was unclear whether his Estate should be administered according to the Suicide Note or his previous Will.
Therefore, the court concluded that the general principle governing costs awards in estate litigation applied and the Estate should bear the parties’ reasonable costs of the Application.
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