The Ontario Court of Appeal finds that a testator granted life interest, not a license, to a lifelong friend. It was a serious and extricable legal error, based on a outmoded view of family, for the application judge to distinguish between a gift to a close friend and a gift to a spouse as a reason for finding that a license had been granted instead of a life interest - Barsoski Estate v. Wesley, 2022 ONCA 399
Friends for Life: Court of Appeal finds testator granted life interest to life-long friend
In Barsoski Estate v. Wesley, 2022 ONCA 399, the appellant was a very long-term friend, though never the romantic partner, of a woman who passed away in 2017. In her will, she provided that trustees were to hold her house in London, Ontario, “as a home” for the appellant during his lifetime or until he no longer desired to live there, at which point it would be sold with the proceeds to go to a charity, St. Stephen’s, under the following condition:
Upon the earlier of [the appellant] advising my Trustees that he no longer wishes to live in the House, [the appellant] no longer living in the House, and [the appellant’s] death, or if [the appellant] predeceases me … the House shall be sold.
$500,000 was to be held in trust for maintenance of the home and if the appellant no longer wanted to live there, this money was to be used for his living expenses, with any surplus passing to St. Stephen’s on his death.
However, in 2019 it became apparent that the appellant was not living in the London home as he continued to work full time in Toronto. St. Stephen’s stated that the house should be sold and the proceeds distributed to it since the appellant was not living in the home. The estate trustee brought an application to determine the nature of the appellant’s interest in the home and whether the condition relating to the use of the home was void for uncertainty.
Application decision
The application judge decided that the will bequeathed a license to the appellant and not a life interest, in part due to the fact that the appellant and the testator were only friends and not spouses. She found that the condition above was a condition subsequent. She ruled that the condition was void for uncertainty and, because of the nature of the appellant’s interest, the entire bequest failed. The appellant raised two issues on appeal: the application judge had erred in finding that the bequest was a license and that the condition that he live in the house was void for uncertainty. The respondent argued that the appellant had been given a license and breached it by living outside the home.
Appeal
The Court of Appeal allowed the appeal on the basis that the trial judge erred by concluding that the appellant had been given a license instead of a life interest. However, the Court found that she correctly characterized the condition as a condition subsequent which was void for uncertainty (para 20).
The Court noted that the same words in different wills and contexts, for example a grant of “use and enjoyment”, have been interpreted as granting both licenses and life interest in different cases. The case law is therefore of limited assistance because of the importance of the testator’s unique intentions. Cases may apply the same principles, but produce vastly divergent results (para23).
The application judge had concluded that the appellant had been given a license on a textual and contextual basis. The judge relied on the fact that the will vested the property in the trustee and not the appellant (para 31-34). The judge found that the $500,000 fund for maintenance was consistent with a license instead of a life interest since it provided for the maintenance of the house and the appellant’s living expenses irrespective of where he lived. The Court of Appeal stated this factor did not deserve significant weight since the will contemplated that the appellant would need funds to maintain the house and the fund was more consistent with the testator's intention to give the appellant a home (para 35). The Court of Appeal ruled that the application judge had committed a palpable and overriding error in focusing on those two factors which did not give effect to the intention of the testator (para 36).
In assessing the application judge’s interpretation of the contextual interpretation of the will, the Court explained that judges have increasingly recognized that contextual factors can be important, if not determinative, in deciding between a life interest and a license (para 39). The Court of Appeal stated that in the decision of Moore v. Royal Trust Co., 1956 CanLII 64 (SCC), [1956] SCR 880, the Supreme Court had applied the text of the will “quite strictly and literally” to determine whether a bequest was a life interest or a license, but it then had applied a more contextual interpretation to determine whether the clause required occupation by the beneficiary (para 42).
The application judge had distinguished this case from cases where a life interest was granted since it was a gift between two friends and not two spouses. This distinction was crucial to her finding that the will granted a license and not a life interest. The Court of Appeal ruled that the judge erred in principle (“a serious and extricable legal error”) by making such a distinction since it failed to give effect to the evidence that showed that the testator and the appellant regarded each other as family; the two were even going to be interred in the same plot (para 46). The judge had relied on an outmoded exclusionary view of family. Treating this will differently since the parties were only friends, and not romantic partners, violated the principle of testamentary freedom (para 47-48). The Court of Appeal also pointed out that courts have recognized wills that granted life interests to friends (para 49).
The Court of Appeal ruled that the judge did not err in concluding that the gift created a condition subsequent. The condition reproduced above was external to the gift (para 55). The judge also correctly ruled that the condition was void for uncertainty since it was far too indefinite and uncertain to enable a court to say what the testator meant the triggering event to be. The words “no longer living” created uncertainty since it was impossible to determine what it means to “live” in the house. However, a gift of a life interest remains effective without the limiting condition when a condition subsequent is found to be void (para 58).
The appeal was allowed in part. The Court of Appeal ruled that the appellant had been granted a life interest and that the limiting terms were void for uncertainty. The gift subsisted without the limiting terms (para 59).