Lubberts Estate, 2012 ABQB 506

Court of Queen ’ s Bench of Alberta Citation: Lubberts Estate, 2012 ABQB 506 Date: 20120803 Docket: ES03 131589 Registry: Edmonton Court File Number ES03 131589 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Edmonton Estate Name Johanna Frederika Lubberts also known as Johanna F. Lubberts Applicants Irene Hanson (Executor and beneficiary) and Paul Lubberts (beneficiary) Respondents Marijke Mercredi and Johanna Lubberts Corrected judgment: A corrigendum was issued on August 15, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment.

Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ _______________________________________________________ Memorandum of Decision of the

Honourable Madam Justice J.M. Ross _______________________________________________________ Introduction [ 1 ] The testatrix, Johanna Frederika Lubberts, died in Edmonton, Alberta, on December 20, 2009, at 84 years of age. Her four children survived her: Johanna Lubberts, Marijke Mercredi, Paul Lubberts and Irene Hanson. For simplicity ’ s sake, I will refer to the testatrix as such, and to her children by their first names. [ 2 ] The issue before the Court is the

interpretation of a provision of a holograph will dated April 8, 2008 (the “ Holograph Will ” ). The application for advice and direction was initially heard on September 2, 2011. After this hearing, but before the Court issued a decision, the Court was advised that further evidence had been discovered and that there would be an application to adduce new evidence. At a continued hearing on June 26, 2012, evidence of additional holograph codicils to a previous will was admitted by consent. Facts [ 3 ] The testatrix previously made a will dated August 13, 2002, which was prepared by a lawyer (the “ 2002 Will ” ).

The 2002 Will made Irene Executrix and Trustee. There were several specific bequests, including $4000 to each of the testatrix ’ s grandchildren alive at her death. The residue of her estate was divided evenly between her four children.

The 2002 Will also provided that any of the children who wished to do so could purchase her house, inclusive of contents, at fair market value. [ 4 ] The testatrix prepared holograph codicils to the 2002 Will on June 21, 2004, June 24, 2005, and December 2, 2007 (the 2004, 2005 and 2007 Holograph Codicils). [ 5 ] The 2004 Holograph Codicil provided, in part [emphasis in original]: I, Johanna F.

Lubberts of 9[...] - 68 A St., Edmonton, Alberta, declare hereby that the following changes must be made to my will & testament and I trust that the executrix of my will, my youngest daughter, Irene Lubberts Hanson of Viking AB will act accordingly. 1. . . . 2. My grandson, Anthony Mercredi, of Leduc, Alberta, will not benefit in any way from my will. [ 6 ] The 2005 Holograph Codicil provided, in part: On this day, June 24 - 2005, I, Johanna Frederika Lubberts-Loos, want to make certain changes to my will, a copy of which is attached, while the original is held by my solicitor . . . . . . 4.

C). #4 One of my grandchildren, to wit, Anthony Mercredi, son of my daughter Marijke Mercredi, will not be paid the sum of four thousand dollars at my death. Nor will he inherit any other items from my estate. P. 7, #9 - Special Declaration Re House.

While I had hoped that my son, Paul Johan Lubberts would live in my house after my death and leave it to his son eventually, I see myself forced to change these expectations. Under no condition will I want to allow Paul ’ s “ girlfriend ” , Laurie Semenovich to live in my house or to allow her to obtain any interest in my house, whether she and Paul are or get married or not. In a letter, addressed to my four children, I will explain the reasons for my decision.

The above-mentioned “ Laurie ” has been and still is a disruptive influence in our family relations. [ 7 ] The letter referred to in the 2005 Holograph Codicil has not been located. [ 8 ] The 2007 Holograph Codicil provided: Codicil to my last will & testament . . .

Changes to be made - - no cash amount will go to my grandchildren ($4000.00 per grandchild was left to each of my grandchildren, since I have on the birthdays of my grandchildren given each of them amounts of money) and no cash money to be left to any other persons mentioned in the will, since these gifts have been carried out already in the last number of years) My house at 9[...]-68 A Street will become the property of my son, Paul J. Lubberts and my daughter, Irene Lubberts-Hanson, my son to live in the house and take care of it - he can not rent or sell the house to non-family members.

He may - - with Irene ’ s consent sub-let part of the house (e.g. the basement suite) but only to members of the immediate family My 1/4

section at Whitecourt will have to be sold - - with competent legal advice from a trustworthy advocate and from a real estate person whom I plan to name when I will rewrite my whole will. This codicil will be of force only if I die before I can compose a new complete will & testament. [ 9 ] The text of the Holograph Will of April 8, 2008 is set out below, with the provision in dispute emphasized: I, Johanna Frederika Lubberts, ne é Loos, being of sound mind and presently in good health, revoke all previously made wills and especially so the will made under the advice of Mr.

Chris Head, lawyer, a copy of which will is kept in the office of Mr. Head at 103 st & Jasper Ave in Edmonton [sic]. That Will has outlived its purpose which I hoped would inspire my grandchildren to save at an early age and develop the habit to add to their savings regularly so that they would be independent financially throughout their lives. To assist them I started giving every grandchild as well as my children financial presents on their birthdays. Some of them, knowing that the money came out of a not-so-large pension income, refused accepting it and started saving on their own; others “ demanded ” it.

I started my own savings account in “ Ing ” [sic]. This present will names as my executrix my youngest daughter, Irene Lubberts Hanson. A second account in “ Ing ” was started in joint names: my name and Irene ’ s [sic]. Every month I deposit in that account $500.00. Irene can access that money at my death to pay for her personal expenses, as for instance to replenish her salary if it is necessary for her to take time off from her job to be able to look after my interests, - medical care and disposal of my body etc - described in another letter.

My entire estate - cash, my house at 9[...] - 68A street Edmonton Alberta, and my quarter

section of land at Whitecourt, Alberta, if it is then still in my possession, I leave to my son, Paul Johan Lubberts and to my youngest daughter, Irene Lubberts Hanson, to jointly manage it and use it for their own benefit as salary for instance, or for the benefit of one of their siblings or of one of my grandchildren - as for instance for medical expenses. Irene and Paul will make all those decisions together and without yielding to any pressure applied by possible recipients. [ 10 ] The letter referred to in the Holograph Will has not been found. Issue

[11] The issue before the Court is whether the emphasized provision in the Holograph Will made a gift to Paul and Irene, orattempted to make them trustees, or gave them a power of appointment. Pursuant to the Order of Belzil J. dated May 13, 2010, Irene inher capacity as Executrix of the Estate was directed to apply for an Order seeking advice and direction as to “whether or not there are anyconditions on the distribution of the residue . . . in view of the wording” of the Holograph Will.

Pursuant to the Order of Read J. datedJuly 21, 2010, the application was directed to proceed with briefs and representations from counsel for Marijke and Johanna, and counselfor Irene (as beneficiary) and Paul. Counsel for the Estate took a neutral position, and was not required to file a brief. Read J. furtherdirected that it was not necessary that there be representation of potential beneficiaries under any trust created under the Will. [12] It is agreed that if the testatrix’s intention was to create a trust, the intended trust fails for lack of certainty of objects.

In thiscase the estate will pass by intestacy. Law [13] The parties are agreed that the following principles apply to

interpretation of the Holograph Will: ∙ The primary rule of

interpretation is that the Court should strive to give effect to the testator’s intentions. ∙ The disputed provision in the Holograph Will must be interpreted in light of the Holograph Will as a whole. ∙ The 2002 Will and Holograph Codicils can be used as interpretive aids, as the 2002 Will is expressly referenced in the HolographWill. [14] Extrinsic evidence of surrounding circumstances is admissible to determine the testatrix’s intention.

Paul and Irene submitthat extrinsic evidence may only be considered if the meaning of the will is unclear (Tottrup v Patterson et al, (SCC),[1970] SCR 318, 71 WWR (NS) 388).That pre-condition is easily met here. As will be detailed below, the Holograph Will containsunclear and somewhat contradictory language in relation to the transfer of the estate to Paul and Irene.

In documents filed in relation tothe grant of probate, the residuary gift to Paul and Irene was described in the following terms: “The terms of the will are unclear as towhether or not the beneficiaries are subject to conditions which will necessitate an application to court for advice and direction.” TheOrder of Belzil J. directed Irene as Executrix of the Estate to apply for advice and direction from the Court because of the lack of clarityin the Holograph Will. [15] Marijke and Johanna took the position that the Holograph Will created a trust; Irene and Paul took the position that theHolograph Will either gave them the residue of the estate as an unconditional gift, or gave them a power of appointment.

Gift [16] Irene and Paul took the position that the residue was gifted to them in the Holograph Will. [17] In support of this position, they refer to the language of the Holograph Will: my entire estate . . .

I leave to my son, Paul Johan Lubberts and to my youngest daughter, Irene Lubberts Hanson, to jointly manage it anduse it for their own benefit . . .” However, while these words may be interpreted as intending a gift, other words in the same sentence arepointed to by Marijke and Johanna as consistent with the imposition of a trust: the estate is left to Paul and Irene “to jointly manage it anduse it for their own benefit as salary for instance, or for the benefit of one of their siblings or of one of my grandchildren - as for instancefor medical expenses.

Irene and Paul will make all those decisions together and without yielding to any pressure applied by possiblerecipients [Emphasis added].”

[18] In response, Paul and Irene refer to the Holograph Will’s revocation of the 2002 Will as to support their

interpretation, wherethe testatrix stated: That Will has outlived its purpose which I hoped would inspire my grandchildren to save at an early age and develop the habit to add totheir savings regularly so that they would be independent financially throughout their lives. To assist them I started giving everygrandchild as well as my children financial presents on their birthdays.

Some of them, knowing that the money came out of a not-so-largepension income, refused accepting it and started saving on their own; others “demanded” it. [19] Paul and Irene argue that this form of revocation indicates of a wholesale rejection of the 2002 Will, therefore it isappropriate to examine the 2002 Will and to ensure that the Holograph Will is not interpreted in such a way as to, in effect, re-create the2002 Will. They argue that the imposition of a trust on the estate for the benefit of all of the testatrix’s children and grandchildren wouldhave that effect.

Paul and Irene also argue that the 2002 Will is not extrinsic evidence because it is referred to in the Holograph Will. Asa result the 2002 Will should be resorted to as an initial interpretive aid and extrinsic evidence should be considered only if theHolograph Will, considered in light of the 2002 Will, remains unclear. [20] I do not find that the 2002 Will clarifies the intent of the Holograph Will. In my view the reference by the testatrix to the 2002Will simply explains why she decided to have the Holograph Will replace the 2002 Will.

Her words make it clear that the 2002 Will hasno further testamentary effect. It has “outlived its purpose”, in particular in relation to the provision of cash gifts to grandchildren. [21] Contrary to the submissions of Paul and Irene, I find that there is nothing in the Holograph Will that indicates an intention torepudiate any of the beneficiaries of the 2002 Will. The testatrix did not identify anyone as not entitled to benefit from her estate, as shehad earlier done in the 2004 and 2005 Holograph Codicils in relation to Anthony Mercredi.

To the contrary, she expressly contemplatedthat not only Paul and Irene, but also their siblings and her grandchildren may benefit from her estate. This does not reject certain formerbeneficiaries in favour of others. It provides a new method of benefitting the same beneficiaries. [22] The overall import of the Holograph Will is, in my view, not consistent with a transfer of ownership of the estate to Paul andIrene. Although the estate is left to them, there is no indication that it is to be for their exclusive benefit or their “property” as stated in the2007 Holograph Codicil.

They are directed to jointly manage the estate, not to receive it. While they can benefit from the estate, the onlyform of benefit expressly mentioned is salary. This suggests an entitlement to compensation for performing duties in relation to theestate, rather than ownership. It is noteworthy that there is another reference to salary in the Holograph Will where the testatrix indicatesthat Irene Hanson can access funds contributed by the testatrix to a joint account “to replenish her salary if it is necessary for her to taketime off from her job to be able to look after my interests”.

This reference to salary clearly contemplates compensation for duties. [23] Another indication that Paul and Irene are not given ownership of the estate is that they are required to make all decisions inrelation to the estate together.

The Holograph Will does not assign shares of the estate to each of them; there was, for example, noprovision that they should receive the estate in equal shares, nor in any particular percentages, as one would expect in the case of a gift. [24] Paul and Irene submit that the language in the Holograph Will relating to their use of the estate for the benefit of siblings andgrandchildren is “precatory” language; the expression of a wish or hope that they will use the estate that has been gifted to them to assisttheir siblings and the grandchildren.

Precatory words are insufficient to establish an intention to create a trust: Rufenack v.

HopeMission, 2002 ABQB 1055, 328 AR 148 at para 129, rev’d on other grounds 2006 ABCA 60, 384 AR 64, citing Sutherland Estate v.Nicoll Estate, (SCC), [1944] SCR 253. [25] Precatory language is described in Waters’ Law of Trusts in Canada, 3rd ed (Mark R Gillen and Lionel D Smith ed, Toronto,Ontario: Thompson Canada Limited) at 136: The question which gives rise to most litigation is whether a testator intends to create a trust, or merely impose some kind of moralobligation upon the legatee when he bequeaths personalty or devises land in confidence that the legatee will use the property in certainways.

He may speak, for instance, of his “expectation”, “fervent wish”, “desire”, “firm belief” or “purpose” that this will be done. [26] Waters explains that prior to the mid-1800s, the tendency of the courts was to find that precatory language revealed the

[ 26 ] Waters explains that prior to the mid-1800s, the tendency of the courts was to find that precatory language revealed the intention to create a trust. Since that time however, the courts have looked for imperative language as an indication of such an intention. [ 27 ] There are no precatory words, no “ words of entreaty, request, desire, wish or recommendation ” ( Black ’ s Law Dictionary , 6 th ed), in the Holograph Will.

The devise of the estate to Paul and Irene is accompanied not by an expression of a wish, but by a direction as to what they are to do with the estate: they are “ to jointly manage it and use it for their own benefit as salary for instance, or for the benefit of one of their siblings or of one of my grandchildren - as for instance for medical expenses. ” The use of examples ( “ as salary for instance ” or “ for instance for medical expenses ” ) adds an element of vagueness to the direction, but does not change the language from a direction to a mere wish.

Paul and Irene are directed to jointly manage the estate and use it as described. They are not given the estate with the hope or request that they may assist their siblings and the grandchildren. [ 28 ] I conclude that the testatrix did not intend to gift her estate to Paul and Irene as a gift.

She intended, rather, that Paul and Irene act as a conduit for the distribution of her estate. [ 29 ] As further evidence that the testatrix did not intend a gift to Paul, Marijke and Johanna refer to the 2005 Holograph Codicil in which the testatrix indicated a desire not to allow Paul ’ s partner, Laurie Semenovich “ to live in my house or to allow her to obtain any interest in my house ” . They also refer to extrinsic evidence which, they suggest, indicates that the testatrix ’ s opinion of Laurie did not change in the following years.

Paul and Irene point to the 2007 Holograph Codicil which clearly contemplated that Paul would live in and care for the house, without any negative comment regarding Laurie, and also refer to extrinsic evidence that the testatrix ’ s relationship with Laurie had improved. While I have found that the Holograph Will did not intend a gift to Paul and Laurie, my finding is based on the language of the Holograph Will and, to some extent, the context provided by the 2002 Will and the Holograph Codicils.

The evidence regarding the testatrix ’ s views of Laurie and whether those views changed over time is of no assistance as an interpretive aid. I note that even when the testatrix expressed negative views regarding Laurie in the 2005 Holograph Codicil, she did not purport to disinherit Paul, who remained a residuary beneficiary. The 2005 Holograph Codicil merely placed restrictions on who might live in the testatrix ’ s house. The Holograph Will makes no special provisions in relation to her house; it is referred to only as a part of the overall estate.

Trust versus Power of Appointment [ 30 ] I turn now to the more difficult determination, whether the testatrix intended that Paul and Irene hold the estate as trustees or that they be granted a power of appointment. [ 31 ] A trust is defined in Waters at 3-4 as: A trust is a relationship which arises whenever a person (called the trustee) is compelled in equity to hold property . . . for the benefit of some persons (of whom he may be one, and who are termed beneficiaries) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustees, but to the beneficiaries or other objects of the trust (citing GW Keeton and LA Sheridan, The Law of Trusts, 10 th ed (London: Barry Rose Law Publishers, 1993)). [ 32 ] Trusts may provide the trustee with a power of choice.

For example, the trustee may have the power to choose which beneficiaries are to receive trust property and what their respective interests are to be. If a power of choice is provided the donee of the trust power has a duty to make a choice: [T]he donee of the power is obligated to make a choice among the objects or members of the class.

He may be required to choose among the beneficiaries, and the chosen will then receive such an amount or such property as is set out in the terms of the instrument, but it is more usual that the donee of the power must choose who is to receive and how much he is to receive ( Waters at 95). [ 33 ] A power of appointment is a form of dispositive power: Yet another dispositive power, which is normally given to an adult beneficiary rather than to the trustees, is the power of appointment.

This is an authority, normally conferred by will, by which the donee of the power may determine who are to be the recipients of specified property owned by the donor of the power, normally the testator. Traditionally powers of appointment are said to be of two

kinds, general and special. A general power enables the donee to appoint the property to anyone, including himself, and is thereforetantamount to ownership. On the other hand a power is special when the persons who may be appointed are marked out, for example, thechildren of the donee of the power. . . (Waters at 91-92). [34] The difference between a trust and a power of appointment is: Essentially a trust obligates the holder of title to deal with it in the manner set out by the trust; a power merely enables the holder of titleto act in the enumerated fashion, it does not require him so to act.

The trustee must act: the donee of the power may act (Waters at 92[emphasis in the original]). [35] The determination of whether a trust or a power of appointment has been created must be determined from a properconstruction of the language the testator has employed (Waters at 92). [36] The primary distinction between a trust and a power of appointment is whether the holder of title is obligated, or merelyenabled, to act in the matter set out. The question then becomes whether the donor intended the donee to be obliged, or to merely beenabled to hold the property for the purposes set out.

An example is provided in Waters at 1117: For instance, the testator leaves all his estate, except his one thousand common shares in the XYZ Co., to his widow, and gives her apower of appointment over the one thousand shares in favour of the children of the marriage, exercisable by her during her lifetime or byher will on her death. If the power of appointment is a pure power, the donee of the power has no obligation to exercise it; he merely hasthe opportunity to decide to whom the donor’s property is to go.

If, on the other hand, the donee of the power has an obligation to decideto whom that property is to go, then the donee possesses a trust power or a power in the nature of a trust; in other words, not a power buta trust. It is a question of construction of the donor’s instrument. [37] The consequence of the failure by trustees to comply with their obligation to exercise a discretionary power is that the courtwill step in and exercise it for them (Waters at 93-94).

The consequence of the failure of a donee to exercise a power of appointment isthat the property will pass either to a person or persons designated to take it by default, or will revert to the donor or his estate (Waters at1117). [38] The Alberta Court of Appeal dealt with the distinction between a trust and a power of appointment in Daniels v Daniels Estate (1991), (AB CA), 85 DLR (4th) 116, 120 AR 17 [cited to DLR). The will provided: “All the residue of myestate not hereinbefore disposed of I devise and bequeath unto my executors to distribute as they see fit” (Daniels at 117).

The chambersjudge had concluded that a power of appointment was created; the Court of Appeal held that a trust was intended. One factor indicativeof a trust was that “the testator left the residue to the executors in their capacity as executors and not in their capacity as individuals”(Daniels at 120).

A second relevant factor was that there were two executors, and the “testator made no provision for a division of theresidue between the two executors in the event that they decided to “distribute” it to themselves” (Daniels at 120 ). [39] Paul and Irene point out that the Holograph Will left the estate to them as individuals, and argue that this is an indication thata power of appointment was intended.

On the other hand, Marijke and Johanna argue the fact that the estate was left to Paul and Irene tomake decisions about together, with no indication of how it should be divided between them, is indicative that a trust was intended.

Iconclude that the factors noted in Daniels balance each other out in this case, and it is necessary to look for other indications as towhether the testatrix intended to impose an obligation on Paul and Irene, or merely to enable them to act as they saw fit. [40] In my view, the language employed by the testatrix indicates that she intended to impose an obligation on Paul and Irene.Paul and Irene are required to make all decisions in relation to the estate together: “Irene and Paul will make all those decisions togetherand without yielding to any pressure applied by possible recipients”.

They are directed to jointly “manage” the estate and “use it” tobenefit themselves, their siblings or the grandchildren, with examples of such benefits provided. They are not merely empowered todispose of the estate to any or all of these persons. There is no provision in the Holograph Will regarding disposition of the estate shouldPaul and Irene not exercise their joint power of appointment. While this is not determinative (property not disposed of reverts to theestate: Waters at 1117), it is a further indication that the testatrix considered that Paul and Irene would be obliged to act as she directed.

Conclusion [ 41 ] I conclude that the Holograph Will gave the estate to Paul and Irene to hold as trustees. The parties have agreed that, if a trust were intended, it fails due to uncertainty of its objects, as only non-exclusive examples of the intended benefits (salary and medical expenses) are provided. Giving effect to this agreement, I conclude that the intended trust fails, and the estate will pass by intestacy. [ 42 ] The parties may speak to me regarding costs if they are unable to agree. Heard on the 2 nd day of September, 2011 and the 26 th day of June, 2012.

Dated at the City of Edmonton, Alberta this 2 nd day of August, 2012. J.M. Ross J.C.Q.B.A. Appearances: Mr. Richard B. Hajduk Hajduk Gibbs LLP for Marijke Mercredi and Johanna Lubberts Mr. Dennis G. Groh, Q.C. Heil & Groh for Irene Hanson (as beneficiary) and Paul Lubberts (as beneficiary) Mr. Christopher R. Head for Irene Hanson (as Executor) and for the Estate _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Madam Justice J.M. Ross _______________________________________________________

Two of the Appearances have been changed to read as follows: Mr. Richard B. Hajduk Hajduk Gibbs LLP for Marijke Mercredi and Johanna Lubberts Mr. Dennis G. Groh, Q.C. Heil & Groh for Irene Hanson (as beneficiary) and Paul Lubberts (as beneficiary)