Leischner v Schafer, 2023 ABKB 490

Court of King’s Bench of Alberta Citation: Leischner v Schafer, 2023 ABKB 490 Date: 20230828 Docket: ES10 24774 Registry: Red Deer Court File Number ES10 24774 Court Court of King’s Bench of Alberta (Surrogate Matter) Judicial Centre Red Deer Estate Name Marion Laura May Leischner Applicant/Cross-Respondent Michael Roy Leischner Respondents/Cross-Applicants Howard Schafer Bonnie Joy Nicholson Lori May Ulry _______________________________________________________ Reasons for Decision of the Honourable Justice S.N. Mandziuk _______________________________________________________ I.

Introduction [ 1 ] Subsection 39(3) of the Wills and Succession Act , SA 2010, c W-12.2 (the “ WSA ”) requires applications for rectification of a will to be brought within 6 months after a grant of probate or administration is issued. The issue to be decided here is whether that limitation date should be extended. [ 2 ] This matter came before me in morning chambers.

Given time constraints and the relative complexity of the matter, I adjourned it to give the parties the opportunity to provide written argument, which has been filed by counsel for Lori May Ulry (“ Lori ”), Howard Schafer (“ Howard ”), and Michael Roy Leischner (“ Michael ”). [ 3 ] By way of a cross-application filed on March 20, 2023, Lori seeks (among other relief) leave to make an application for rectification after the 6-month statutory deadline contained in s 39(3) of the WSA . [ 4 ] Howard supports Lori’s position; Michael opposes it. [ 5 ] For the reasons that follow, I order an extension of the statutory deadline and grant leave to Lori to file the application for rectification by September 30, 2023.

A separate hearing will determine if rectification is the appropriate remedy. II. Background

The Will [ 6 ] Frank VanderKley, a now retired solicitor, acted for Marion Laura May Leischner (“ Ms. Leischner ”) and her husband, Victor Roy Leischner (“ Mr. Leischner ”), on (among other things) their estate issues. [ 7 ] In 2010, Mr. VanderKley prepared Mr. Leischner’s will as well as a previous version of Ms. Leischner’s will. [ 8 ] Mr. Leischner died on November 23, 2014. [ 9 ] In 2016 and 2017, Mr. VanderKley met with Ms. Leischner to update her will. His meeting notes indicate that Ms.

Leischner’s children would be beneficiaries under the new will, her life insurance money would go to the estate to equalize any inequalities between the value of the “NE11”, the “SW11,” and the “house in Olds,” and that the “three inheritances are to be as equal as possible.” [ 10 ] The “NE11” represents a parcel of land described in short legal form as NE 11-33-26 W4M (the “ Disputed Quarter ”) and the “SW11” represents a quarter

section of land described in short legal form as SW 11-33-26 W4M (the “ SW Quarter ”). [ 11 ] Ms. Leischner executed her final will on April 12, 2017 (the “ Will ”). The SW Quarter is specifically mentioned in the Will. The Disputed Quarter and the house in Olds are not. [ 12 ] Ms. Leischner died on April 11, 2021. She left three surviving children: Bonnie Joy Nicholson (“ Bonnie ”), Lori, and Michael. Bonnie, Lori, and Michael are beneficiaries of Ms. Leischner’s estate. [ 13 ] Howard, Ms. Leischner ’s brother, is the personal representative of Ms. Leischner ’s estate. Howard is not a beneficiary of the estate.

The Disputed Quarter [ 14 ] A dispute has arisen over whether the Disputed Quarter should be included in the calculation of the residue of the estate. [ 15 ] Prior to 2005, Mr. Leischner and Ms. Leischner were the registered owners of the Disputed Quarter. [ 16 ] In 2005, Michael was added as a joint tenant to the Disputed Quarter’s title for “estate planning purposes,” for nominal consideration. [ 17 ] A 2006 transfer of land indicates that Michael, his wife Natasha Leischner (“ Natasha ”), Mr. Leischner, and Ms. Leischner provided consideration in the sum of $200,000 to Michael, Mr. Leischner, and Ms.

Leischner for the Disputed Quarter. Natasha was added as a joint tenant soon after. [ 18 ] Howard claims that Michael and Natasha were added as joint tenants to help Michael obtain a mortgage. Counsel for Lori submits that no valuable or legal consideration was ever paid to Mr. Leischner or Ms. Leischner in connection with these transfers, and neither Mr. Leischner nor Ms. Leischner reported a disposition of the Disputed Quarter on their 2005 or 2006 federal tax returns.

Counsel for Michael has noted that Michael and Natasha live and work on the land but has not expressly addressed whether there was a transfer of $200,000 as consideration in or around 2006. [ 19 ] After Mr. Leischner died in 2014, Ms. Leischner received his entire estate under his Last Will and Testament. The Disputed Quarter was not specifically mentioned in Mr. Leischner’s will. On May 2, 2016, an affidavit of surviving joint tenant for the Disputed Quarter was registered, with the effect that Ms. Leischner, Michael, and Natasha were the title holders of the Disputed Quarter. [ 20 ] On November 3, 2021 (Ms.

Leischner having died on April 11, 2021), an affidavit of surviving joint tenant with respect to the Disputed Quarter was registered, with the effect that only Michael and Natasha remain listed as legal title holders of the Disputed Quarter. [ 21 ] Paragraph 3(

c) of Ms. Leischner’s Will names Bonnie and Lori as specific beneficiaries of the SW Quarter: I give and bequeath my quarter

section of land, legally described as the SW 11-33-26 W4M, to my two daughters, BONNIE JOY NICHOLSON and LORI MAY ULRY, as Tenants in Common. It is my wish that should either or both of my daughters wish to sell this land, my son MICHAEL ROY LEISCHNER be given the first right of refusal to purchase the land . [Emphasis added.] [ 22 ] Paragraph 3(

d) of the Will provides: …the balance of the residue [of the estate] is to be divided so that there is equalization among the children, to be calculated with the value of the land and the residue in mind. Each of the children is to get an equal amount according to these calculations. [Emphasis added.] [ 23 ] While the house in Olds is not mentioned in the Will, it was included in the probate application along with the SW Quarter. The Disputed Quarter is not mentioned in either the Will or the probate application. Mr.

VanderKley’s affidavit says the failure to list the Disputed Quarter as an estate asset in the application for grant of probate was an error. [ 24 ] A grant of probate of Ms. Leischner’s estate was issued on November 30, 2021.

[25] The parties do not dispute that the SW Quarter, as well as the house in Olds, forms part of the estate and therefore should beincluded in calculating the residue under paragraph 3(

d) of the Will. [26] The parties disagree on whether “the land” referred to in paragraph 3(

d) of the Will also encompasses the Disputed Quarter. [27] Lori and Howard assert that the Disputed Quarter is held on resulting trust for the benefit of the estate and should be includedin calculating the residue. They have advanced evidence from Mr. VanderKley to support this claim. Michael asserts that the DisputedQuarter was transferred to him and his wife and does not form part of the estate. [28] Apart from some specific bequests under the Will there have been no distributions from the estate. III. Issue [29] Should the Court extend the 6-month period in s 39(3) of the WSA to allow a rectification application to be brought? IV. Law

Section 39 [30]

Section 39 of the WSA gives the Court the power to rectify a will. Subsection 39(3) requires applications for rectification to bemade within 6 months after the date that the grant of probate or administration was issued. Subsections 39(3)-(4) of the WSA authorizethe Court to extend the 6-month deadline for making an application.

Section 39 of the WSA reads: Rectification 39(1) The Court may, on application, order that a will be rectified by adding or deleting characters, words or provisions specified by theCourt if the Court is satisfied, on clear and convincing evidence, that the will does not reflect the testator’s intentions because of (

a) an accidental slip, omission or misdescription, or (

b) a misunderstanding of, or a failure to give effect to, the testator’s instructions by a person who prepared the will. (2) Subsection (1) applies to the omission of the testator’s signature only if the Court is satisfied on clear and convincing evidence thatthe testator (

a) intended to sign the document but omitted to do so by pure mistake or inadvertence, and (

b) intended to give effect to the writing in the document as the testator’s will.

(3) An application under this

section may not be made more than 6 months after the date the grant of probate or administration is issued,unless the Court orders an extension of that period.

(4) The Court may order an extension of the period on any terms the Court considers just. [Emphasis added.] [31] Subsections 39(3)-(4) of the WSA do not appear to have been judicially considered in any reported decision in Alberta.Counsel for Howard also submits that there has been no judicial consideration of ss 40(2) and (3), which has identical wording to ss39(3) and (4). [32] Counsel for Howard refers to Lamont Estate, 2020 ABQB 449 at para 25, citing Rizzo & Rizzo Shoes Ltd (Re), (SCC), [1998] 1 SCR 27 and the

Interpretation Act, RSA 2000 c I-8, s 10, to suggest that s 39(4) should be applied “purposively andremedially.” Counsel further relies on Simpson v Simpson Estate, 2021 BCSC 1486 (Simpson), varied sub nom Simpson v Zaste, 2022BCCA 208 (Zaste) to propose that three factors should guide the Court in exercising its discretion to grant an extension under ss 39(3)-(4) of the WSA: (

i) merit, (ii) timing, and (iii) prejudice. [33] Much like the matter before me, Simpson involved the question of whether to allow a rectification application to proceed afterthe statutory deadline in s 59(3) of the Wills, Estates and Succession Act, SBC 2009, c 13 had passed.

To that point, there had been nojudicial consideration of granting leave under that section. [34] In Simpson, which was upheld in Zaste on this aspect, it was held that the factors for extending time for a notice of appeal arewidely applicable in other circumstances and provide a framework for considering the granting of leave under s 59(3) of the BritishColumbia legislation. [35] The Alberta Court of Appeal has also signalled that merit, timing, and prejudice are relevant factors, among others, toconsider when deciding whether to extend appeal deadlines: Big Plans for Little Kids Ltd v Souster, 2021 ABCA 73 at para 5 (BigPlans). [36] Simpson refers to Gerling v Gerling, 2010 EWHC 3661 (Ch), an English case concerning an application for rectification after

a statutory deadline: ...the burden of establishing a case for making a claim to rectify more than six months after the date on which representation was first taken out lies with the applicant for such relief; and it is a substantive burden, and not merely a procedural time limit. Relevant considerations include the strength of the claim, the length of the delay, the reasons for the delay, the prejudice to which it may have given rise, the promptitude with which the claim was first notified, the existence of negotiations, and whether the estate has been distributed.

Ultimately, the court is required to stand back and to ask whether it is just and proper, in all the circumstances of the case, to extend time for making the claim.” [ 37 ] The British Columbia Court of Appeal clarified that this discretion is “fettered in the sense that it must be exercised judicially, in a principled and consistent way” ( Zaste at para 33 ) and further asserted that “the ultimate question is whether, in all the circumstances of the case, it is in the interests of justice that an extension be granted”: Zaste at para 40 .

The Court upheld “the approach the judge followed in considering that question by examining the merits, the timing factors, and the question of prejudice ”: Zaste at para 40 (emphasis added). [ 38 ] The British Columbia Court of Appeal’s approach in Zaste provides persuasive guidance when a court must determine whether an extension should be granted under ss 39(3)-(4) of the WSA . V. Analysis The Parties’ Positions Michael [ 39 ] Michael opposes the extension of the 6-month period in s 39 of the WSA .

His Counsel contends that Lori is using s 39 to circumvent s 109, which concerns applications alleging that a transfer by a deceased during their lifetime was intended to be an advance against, or otherwise repayable from, a prospective beneficiary’s share of the estate. [ 40 ] Counsel for Michael takes the position that rectification of the Will would only be necessary if the disposition of the Disputed Quarter constitutes an advance against Michael’s share of the estate during Ms. Leischner’s lifetime.

He contends therefore that this application can only have been brought under s 109 of the WSA . [ 41 ] An application under s 109 must be commenced within 6 months of the date of the grant of probate or administration. Unlike s 39, s 109 does not contain express language that enables the Court to extend this deadline. It states “[a]n application under this

section may be made only within 6 months after a grant of probate or administration is issued in respect of the deceased’s estate”: WSA , s 109(8). [ 42 ] A s 109 application is now statute barred. [ 43 ] Michael’s counsel also takes the position that if Howard and Lori are correct and the Disputed Quarter is held on resulting trust for the estate, no rectification of the Will is necessary. He argues that any ambiguity can be resolved through the application of

interpretation principles. In other words, he asserts that there is no merit to a s 39 application in any event. [ 44 ] In terms of timing, Counsel for Michael alleges that Lori has not provided an adequate explanation for the delay in bringing an application under s 39. He points out that Howard and Lori only brought their respective formal applications after Michael filed his initial application. [ 45 ] Finally, Counsel for Michael asserts that if the period for bringing a s 39 application is extended, his client will suffer severe prejudice.

He notes that Michael has been receiving income from the Disputed Quarter since Ms. Leischner’s death, and that Michael also lives on, has made improvements to, and conducts an ongoing farming operation on the Disputed Quarter. While Lori has not proposed any specific rectification language, Counsel for Michael submits that the contemplated rectification does not appear to include any modification to bequeath the Disputed Quarter to Michael.

Howard, Bonnie, and Lori [ 46 ] Howard and Lori share the view that the Disputed Quarter is held on resulting trust for the benefit of the estate and should be included when calculating the residue. They both seek to extend the statutory deadline contained in s 39(3) of the WSA to allow the application for rectification to be made. [ 47 ] Lori, the moving party in this cross-application, has not proposed specific language for rectification.

She submits that the Will should be rectified to include provisions specifying that the value of the Disputed Quarter, less any improvements made by Michael and Natasha, be taken into account when interpreting paragraph 3(

d) of the Will. [ 48 ] Howard and Lori have advanced evidence, including from Mr. VanderKley, to support their assertion that Ms. Leischner intended the Disputed Quarter be included in calculating the residue of the estate. [ 49 ] Both Counsel for Howard and Counsel for Lori argue that neither Bonnie nor Lori were represented by legal counsel until they were served with Michael’s initial application, which was filed on February 1, 2023. Counsel for Lori also points out that Howard was initially represented by Mr.

VanderKley but is now represented by a different lawyer. [ 50 ] Counsel for Lori argues that neither Bonnie nor Lori was part of any settlement discussions with Michael and Howard. Counsel for Howard states that Bonnie and Lori did not have counsel during settlement discussions.

[ 51 ] At questioning held on April 6, 2023, Mr. VanderKley testified that he began winding up his practice in September 2022 and formally retired from the legal profession in March 2023. Counsel for Howard asserts that this event contributed to the delay in this matter and submits that Mr. VanderKley is responsible for failing to file an application for rectification within the 6-month period.

Both Counsel for Howard and Counsel for Michael participated in the questioning. [ 52 ] Since Michael is asserting that the Disputed Quarter does not form part of the residue of the estate, Counsel for Lori further contends that Michael has contributed to the delay. [ 53 ] Counsel for Lori argues that Michael has not experienced any prejudice relating to the Disputed Quarter or the delay in the administration of the estate. Michael has maintained complete and unfettered possession and use of the Disputed Quarter since Ms. Leischner’s death.

Counsel for Lori also notes that Michael and Howard, as confirmed by their counsel, have been engaged in negotiations and settlement discussions since shortly after Ms. Leischner’s death until late 2022, with formal proceedings commencing in February 2023. Should the Court order an extension under s 39? Merit [ 54 ] “Just as with applications to extend the time to appeal, or for other extensions of time, the merits bar is not high. The applicant does not have to prove their case”: Zaste at para 41 .

For example, in assessing whether to grant leave to appeal, the Alberta Court of Appeal considers whether the appeal has a “reasonable chance of success”: Big Plans at para 5 . [ 55 ] If an extension is granted, the Court then must be satisfied on clear and convincing evidence that rectification is appropriate in the circumstances. These are two separate considerations. [ 56 ] There is an arguable, prima facie case for rectification. A third party prepared the Will, and it is unclear if it properly gives effect to Ms.

Leischner’s wishes. [ 57 ] There is evidence – including from the drafting lawyer – to suggest there were errors in the probate application and that Ms. Leischner intended the Disputed Quarter to be included in calculating the residue of the estate. Despite this, the Disputed Quarter is not mentioned in the Will. There may be merit to an application for rectification in this respect. [ 58 ] Outside of Natasha being added as a joint legal title holder of the Disputed Quarter, there is an absence of evidence suggesting that Ms.

Leischner intended Natasha to inherit the Disputed Quarter. [ 59 ] It is undisputed that Ms. Leischner intended to benefit her three children as well as her grandchildren under her Will. No other beneficiaries are contemplated under the Will.

The effect of the affidavit of surviving joint tenant registered on November 3, 2021 is that Michael and Natasha are the only listed legal title holders of the Disputed Quarter. [ 60 ] Counsel for Howard and Counsel for Lori rely on Pecore v Pecore , 2007 SCC 17 ( Pecore ) for the proposition that where there is a gratuitous transfer, including between a parent and an adult independent child, there is a rebuttable presumption of a resulting trust.

If such a transfer is challenged, the onus is on the transferee to demonstrate that a gift was intended: Pecore at para 24 . [ 61 ] Given that Michael is an adult independent child, Natasha is his spouse, and it is unclear as to whether they provided Mr. Leischner and/or Ms. Leischner with consideration at the time of the 2005 or 2006 transfer, on its face, this could be a gratuitous transfer.

As such, applying Pecore , there is a rebuttable presumption that the Disputed Quarter is being held on resulting trust for the estate. [ 62 ] It should be emphasized that I am not making any findings of fact nor suggesting any legal conclusions at this time. The parties may advance additional evidence to assist the Court in determining whether the Disputed Quarter constitutes a gift to Michael and/or Natasha, is held on resulting trust for the benefit of the estate, was transferred for valid consideration, or may be dealt with in some other way.

I merely observe that, on a plain reading of the Will, Natasha is not listed as a beneficiary. As such, it is unclear whether Ms. Leischner intended Natasha to inherit a beneficial interest in the Disputed Quarter. There may be merit to an application for rectification in this respect as well.

Timing [ 63 ] The Alberta Law Reform Institute (“ALRI”) report, Wills and the Legal Effects of Changed Circumstances (Edmonton: Alberta Law Reform Institute, Report no 98, August 2010), at 126, states that “a time limit for an application for rectification of a will… is needed to provide reasonable security to executors and beneficiaries and to avoid stale claims” (emphasis added). The ALRI report preceded the WSA and the WSA, as enacted, gave effect to many of the ALRI recommendations. In Ryrie v Ryrie , 2013 ABQB 370 ( Ryrie ), at para 26 , the Court found the ALRI report to have considerable weight in the

interpretation of the WSA . I agree. [ 64 ] The Oxford English Dictionary defines a “stale” claim or demand in law as one that “has been allowed to lie dormant for an unreasonable time.” In my view, the underlying dispute in this matter is not a stale one. While a formal application for rectification was not made within the 6-month statutory period, Howard and Michael, as well as their respective counsel, have been involved in settlement discussions since as early as June 2021. In November 2022, Counsel for Michael acknowledged that the parties had been engaged in over a year of (unsuccessful) negotiations and both sides agreed that this matter would be “proceeding to Court with respect to

interpretation or rectification of the Will.” [ 65 ] Both Counsel for Howard and Counsel for Michael questioned Mr. VanderKley in April 2023. During questioning, Mr. VanderKley testified he had not been actively practicing law since September 2022 and retired in March 2023. This event is said to have contributed to some of the delay in moving this matter forward in Court. In his Affidavit in Support of Application for Advice and

Direction, Michael noted his Counsel attempted to contact Counsel for Howard around September 2022 with some delay. [ 66 ] There is a history of settlement negotiations and other communications. Bonnie and Lori were unrepresented during the relevant period. Some delays may have been attributable to Mr. VanderKley and his change in practicing status. Lori retained counsel and filed a cross-application soon after being served with a formal application by Michael. [ 67 ] In my view, the timing of this cross-application has not been unduly prolonged and does not preclude the Court from extending the s 39 deadline.

Prejudice [ 68 ] Michael and his Counsel were informed of the other parties’ positions regarding the Disputed Quarter soon after Ms. Leischner’s death. From as early as June 2021, Counsel for Michael was advised that other parties took the position that both the SW Quarter and the Disputed Quarter ought to be considered when calculating the residue of the estate. [ 69 ] Howard’s evidence is that in May 2021, Michael posited that the Disputed Quarter constituted a gift and that he was additionally entitled to 1/3 of the residue of Ms.

Leischner’s estate. [ 70 ] Michael and Natasha have lived on the Disputed Quarter since the mid-2000s. They have maintained undisrupted use of the Disputed Quarter since Ms. Leischner’s death. The thought that this use may be disrupted is not a simple notion to grapple with. [ 71 ] Lori has not proposed specific language for rectification. She submits that the Will should be rectified so that the value of the Disputed Quarter, with some adjustments, is considered when interpreting paragraph 3(

d) of the Will. [ 72 ] Counsel for Michael aptly notes that this sort of rectification does not expressly consider any modification to bequeath the Disputed Quarter to Michael. With that said, Mr. Leischner and Ms. Leischner were the undisputed original owners of the Disputed Quarter. The circumstances under which Michael and Natasha were added as joint tenants to the Disputed Quarter has been an ongoing and contested issue in the administration of Ms. Leischner’s estate. [ 73 ] All the parties in this matter seem to have been aware that legal action regarding the residue of the estate was possible.

There have been no distributions of or from the residue. [ 74 ] Further, Michael and his Counsel have sought advice and direction from this Court regarding the

interpretation of the Will. The WSA makes clear that a will “must be interpreted in a manner that gives effect to the intent of the testator”: WSA , s 26; Ryrie at para 22 .

Section 39 authorizes the Court to rectify a will in certain circumstances if it is satisfied on clear and convincing evidence that the will does not reflect the testator’s intention. [ 75 ] Counsel for Michael contends that any ambiguity in the wording of the Will can be resolved through interpretative processes, and that rectification is unnecessary. To agree that the Will shall be interpreted in accordance with Ms. Leischner’s wishes without allowing room for the possibility of rectification does not appear to uphold WSA principles. While this matter very well could be resolved through

interpretation of the Will under s 26, this should not preclude an applicant from being able to pursue a meritorious claim under s 39: see, for example, Hicklin Estate , 2017 ABQB 318 , aff’d 2019 ABCA 136 (the applicant sought an order for rectification of a will and the matter was resolved using

interpretation under s 26).

Interpretation and rectification are not mutually exclusive methodologies to ascertain a testator’s true intent. [ 76 ] Similarly, advancing an application under s 109 does not preclude an applicant from being able to pursue a meritorious claim under s 39. The Court will dismiss applications that do not meet legal, evidentiary, or other burdens. [ 77 ] The prejudice branch of the test does not militate against the granting of the extension. VI.

Conclusion [ 78 ] After considering merit, timing, and prejudice, I conclude that it is just in these circumstances to allow Lori to make an application for rectification outside of the 6-month period.

Again, the rectification application and an assessment of the proposed rectification itself shall be determined at a separate hearing. [ 79 ] In Big Plans , at para 6 , the Alberta Court of Appeal noted that “[e]ven where the factors are not established, the court has an overriding discretion to extend the time to appeal if it is appropriate in the interests of justice and the circumstances of the case.” Extending this reasoning to the matter before me, I am satisfied in any event that the interests of justice and the underlying desire to give effect to the intent of the testator warrant granting an extension under s 39. [ 80 ] Pursuant to ss 39(3)-(4) of the WSA , I order an extension to allow Lori to make an application for rectification of the Will after the s 39(3) deadline. [ 81 ] I am not seized with this matter. [ 82 ] Costs shall be in the cause.

Heard on the 14 th day of April, 2023.

Written Briefs filed May 2, 4, and 5, 2023. Dated at the City of Edmonton, Alberta this 28 th day of August, 2023. S. N. Mandziuk J.C.K.B.A. Appearances: M. Shane Donner for Lori May Ulry and Bonnie Joy Nicholson Lisa Handfield for Howard Schafer Kelly le Vann for Michael Roy Leischner