Re Estate of Le Gallais, 2017 BCSC 1699

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Re Estate of Le Gallais, 2017 BCSC 1699 Date: 20170831 Docket: 16-0039 Registry: Victoria In the Matter of the Estate of Lorna Le Gallais, deceased Before: The Honourable Madam Justice Adair Oral Reasons for Judgment In Chambers Counsel for Constance Dora Isherwood, Q.C.: F.K. Walton, Q.C. M. Gauk, Articled Student Counsel for the Victoria Hospice Society, The Salvation Army, and the Alzheimer Society of B.C.: P.B. Newman Place and Date of Hearing: Victoria, B.C. August 31, 2017 Place and Date of Judgment: Victoria, B.C.

August 31, 2017 [ 1 ] THE COURT: This then is my ruling. [ 2 ] This is an estate matter involving the estate of Lorna Le Gallais. Ms. Le Gallais died in September 2015 leaving a substantial estate of about $1.6 million. There is approximately $1.5 million, slightly more than that, left and available for distribution to Ms. Le Gallais’ beneficiaries. [ 3 ] Ms. Le Gallais was unmarried and had no children. She had a very simple will that was prepared for her and was signed in January 1995.

The Will was prepared for her by Constance Dora Isherwood, and the substantive portion of the Will is contained on a single page. After payments of all of Ms. Le Gallais’ debts, funeral and testamentary expenses, the whole of her estate is to be divided equally among six charities: the Alzheimer Society of B.C., the Arthritis Society, Christ Church Cathedral in Victoria, the Heart and Stroke Foundation of B.C. and Yukon, the Salvation Army, and the Victoria Hospice Society. [ 4 ] The Will also appoints Ms. Isherwood as Ms.

Le Gallais’s executor, and contains the following provision which is in issue in the application before me today: If the said Constance Dora Isherwood should act as Executrix of this my will and should also attend to the legal work of my estate, she shall be entitled to the usual and proper charge for such legal work. [ 5 ] I will refer to that as the “Charging Clause.” [ 6 ] Each beneficiary will receive approximately $253,000 from the estate. [ 7 ] As I mentioned, Ms. Isherwood, who drew the Will, is executrix of the estate. [ 8 ] The Charging Clause, whereby Ms.

Isherwood was entitled to the usual and proper charge for legal work, is, based on the authorities, considered to be a gift. Ms. Isherwood was also one of the witnesses to the will. Under the Wills Act , in those circumstances, the gift created by the Charging Clause would be void. [ 9 ] However, under the Wills, Estates and Succession Act , s. 43, an application may be made for a declaration that such a gift is not void. That provision provides specifically:

(1) Unless a court otherwise declares under subsection (4), a gift in a will is void if it is to (

a) a witness to the will-maker's signature or to the spouse of that witness . . . . . .

(4) On application, the court may declare that a gift to a person referred to in subsection (1) is not void and is to take effect, if the court is satisfied that the will-maker intended to make the gift to the person even though the person or his or her spouse was a witness to the will. [ 10 ] On the application before me today, Ms. Isherwood seeks a declaration under s. 43(4) of the WESA that the gift created by the

Charging Clause is not void. [ 11 ] Three of the six beneficiaries of Ms. Le Gallais’ estate have consented to the accounts presented by Ms. Isherwood in her capacity as executrix, which include an amount of a little over $17,000 for legal fees and expenses. However, three of the beneficiaries oppose any order being made under s. 43(4). Those beneficiaries are the Alzheimer Society, the Salvation Army and the Victoria Hospice Society. [ 12 ] The amount that has been claimed by Ms. Isherwood, first of all, in respect of legal fees against the estate, is about $17,550, and the amount that is being claimed by Ms.

Isherwood in her capacity as executrix is about $38,950, for a total of approximately $56,500. [ 13 ] The three beneficiaries who oppose the order being made under s. 43(4) say that Ms. Isherwood is a lawyer with decades of experience practising in the area of wills and estates, and not an unknowing or unwary family member of the testator. Based on the evidence before me, when the Will was prepared and signed in January of 1995, there can be little doubt that, at that time, Ms.

Isherwood indeed had many decades of experience as a practising lawyer. [ 14 ] The opposing beneficiaries point out that solicitors have been found liable in negligence for failing to advise a testator that having an interested party witness a will invalidates a gift under the will, and they point out a case to that effect that was decided a number of years before the Will was signed in 1995. They say that Ms.

Isherwood's evidence is that she “gave no thought to the idea” that witnessing a will would invalidate the charging clause, in spite of having a duty to know the general legal principles for the areas of law in which she practised. They say that it is Ms. Isherwood’s own failure to meet the standard of care in explaining such matters to her client, Ms.

Le Gallais, and the import of the Charging Clause, that has resulted in this matter coming before the court. [ 15 ] The opposing beneficiaries say that the court’s discretion should be exercised only in cases where a substantial inequity may occur if the gift under the will is not effected, and they say that no such inequity occurs on these facts.

They also point out that when a solicitor or other person has prepared a will for a testator and stands to benefit from a gift in the will, this gives rise to a suspicion that the testator did not have sufficient knowledge and approval to render the will valid. [ 16 ] There is only a single case to date that has interpreted this provision of the WESA . It is Re Bach Estate , 2017 BCSC 548 , and the facts in that case are somewhat different than the facts before me today. I will note that in Bach , the gift that was sought to be declared valid was not to a solicitor who had drawn and then witnessed the will.

Rather, it was to a family member who had witnessed the will. [ 17 ] I agree with Ms. Newman, counsel for the opposing beneficiaries, that a determination of whether to exercise the court's discretion with respect to a non-compliant document is inevitably intensely fact-intensive. [ 18 ] The question then is: am I satisfied, on the basis of the evidence before me, that Ms. Le Gallais intended by the Charging Clause to make a gift to Ms. Isherwood? In my opinion, the focus in answering that question needs to be on what the will-maker, Ms. Le Gallais, intended by her Will, rather than on the fact of Ms.

Isherwood's slip or mistake in being one of the witnesses to the Will. [ 19 ] I have concluded that the testator, Ms. Le Gallais, did in fact intend to make a gift to Ms. Isherwood. [ 20 ] Ms. Isherwood and Ms. Le Gallais had known one another for about 40 years. In 1994 – so this is in the year before Ms. Le Gallais’ Will was prepared – Ms. Le Gallais retained Ms. Isherwood to act for Ms. Le Gallais in relation to the legal work associated with Ms. Le Gallais’ mother's estate. Ms.

Le Gallais was the sole beneficiary under her mother’s estate and inherited about $350,000. [ 21 ] In those circumstances, I think it is reasonable for me to conclude that by the time Ms. Le Gallais executed her Will in January of 1995, she would have had some idea – although not necessarily with respect to the details or the precise scope – but she would have had some idea that there would be legal expense associated with the work that Ms. Isherwood was doing in relation to her mother's estate. [ 22 ] In that light, in my view, it is reasonable to conclude that Ms.

Le Gallais, in executing her own Will in January 1995, would have recognized the probability that there would be legal expense associated with legal work in relation to her own estate, and that she intended that Ms. Isherwood should be compensated for the legal work done. [ 23 ] There is evidence before me that at the time the will was signed in 1995 and until she retired, Ms. Le Gallais was a businesswoman.

She worked for almost 40 years for the Bank of Nova Scotia, and I conclude that, given that background, she would have been more than capable of fully appreciating the terms of her own Will which, as I say, was very simply drafted. [ 24 ] Based on Ms. Isherwood’s evidence, at the time the Will was signed, it was read to Ms. Le Gallais and she had no questions in relation to the contents of the Will. [ 25 ] During submissions this morning by Ms. Newman – and I am not sure that this was the intention – but it almost seemed that the submission was to the effect that Ms.

Isherwood was drafting the Will without any input from her client. There is certainly no basis in the evidence for me to conclude that, and, in fact, I would conclude the opposite, that Ms. Isherwood drafted the Will based on the instructions that she received from Ms. Le Gallais. [ 26 ] After the Will was signed, Ms. Le Gallais and Ms. Isherwood continued their relationship and, in the last few years of Ms. Le Gallais’ life, Ms. Isherwood took on more responsibility for dealing with Ms. Le Gallais’ property and affairs and, among other things, was appointed by Ms. Le Gallais to act as her power of attorney.

In my view, that illustrates the trust and confidence that Ms. Le Gallais imposed in Ms. Isherwood and provides further support for my conclusion that, by the Charging Clause, Ms. Le Gallais intended to make a gift. [ 27 ] I therefore declare that the gift created by the Charging Clause in Ms. Le Gallais’ Will is not void and is to take effect. As I say, I am satisfied that Ms. Le Gallais intended to make that gift, even though Ms. Isherwood was a witness to the Will.

[ 28 ] Going back to the orders sought in the notice of application then, the declaration sought in paragraph 1 is granted. The orders sought in paragraphs 2 and 3 are not granted. Rather, the alternative relief in paragraph 4(

a) and (

b) is granted -- sorry, in 4(

c) and (

d) is granted. The relief that was sought in paragraphs 4(

a) and (

b) was not opposed. [ 29 ] MR. WALTON: I'm sorry, My Lady, I just didn't understand that, 4(

a) and (

b) are granted? [ 30 ] THE COURT: Sorry, my notes have confused me a bit. Just let me go back. [ 31 ] MR. WALTON: They were consented to, 4(

a) and (b). [ 32 ] THE COURT: 4(

a) and (

b) were not opposed. [ 33 ] MR. WALTON: Yeah, they were not opposed, My Lady. [ 34 ] THE COURT: 4(

c) and (d), those have been adjourned. [ 35 ] MR. WALTON: Yes, that's correct, as has 5, and 6 is consented to. [ 36 ] THE COURT: And 6 is consented to, yes. So the orders made, this is where I have confused myself, unfortunately. The orders sought in 4(

a) and (

b) follow from the relief that I have granted in respect of paragraph 1. [ 37 ] So Mr. Registrar, just go over that again. I have granted the relief in paragraph 1. The relief sought in paragraphs 2 and 3 is not granted. Paragraphs 4(

a) and (b), that relief is granted. Paragraphs 4(

c) and (d), and paragraph 5, those are all adjourned generally, and the relief sought in paragraph 6 is granted. [ 38 ] MR. WALTON: Okay, thank you, My Lady. [ 39 ] THE COURT: Unless there is anything further, that concludes my ruling. [ 40 ] MR. WALTON: Thank you. [ 41 ] MS. NEWMAN: Thank you. “ADAIR J.”