JANET M. HENLEY, Q.C. Applicant And: BRIAN A. HENLEY APPLICANT And: JOHN J. HENLEY Second Respondent And: CHRISTOPHER M. HENLEY Third Respondent, 2019 NLSC 54

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Henley Estate (Re) , 2019 NLSC 54 Date : March 1, 2019 Docket : 201301E12144 In The Matter of the Estate of Alec G. Henley, late of the City of St. John's, in the Province of Newfoundland and Labrador, retired businessman Between: JANET M. HENLEY, Q.C. Applicant And: BRIAN A. HENLEY APPLICANT And: JOHN J. HENLEY Second Respondent And: CHRISTOPHER M. HENLEY Third Respondent Before: Justice David B. Orsborn Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: February 5, 2019

Summary: A hearing scheduled to consider certain issues of

interpretation of the will and codicils of the late Alec G. Henley was adjourned because a position advanced by John Henley and Christopher Henley—two of the executors/bene-ficiaries—that the two codicils admitted to probate were invalid and that a third non-probated codicil should be the only “operative” codicil for purposes of

interpretation. They asserted that this approach had been agreed to by all parties or, alternatively, that this position should have been evident from prior proceedings and communications. Janet Henley and Brian Henley, the other two executors/beneficiaries, claimed that they were taken by surprise by this position and sought their wasted costs of preparing for the adjourned application. Held : The position that, in ascertaining Mr.

Henley’s intentions, the probated codicils should be disregarded for all purposes in favour of the non-probated codicil was neither agreed to by the other parties nor understood and accepted by the Court. Further, the position could not reasonably have been anticipated. John Henley and Christopher Henley were ordered to pay Janet Henley’s and Brian Henley’s costs. A lump sum was awarded intended to indemnify them for their wasted costs and to reflect the Court’s disapproval of John Henley’s and Christopher Henley’s conduct of the will

interpretation application. There was no basis for an order that the costs be borne by the estate. Appearances: Nicholas J.G. Avis, Q.C. Appearing on behalf of the Applicant, Janet M. Henley, Q.C. Melissa M. Saunders Appearing on behalf of the Applicant, Brian A. Henley John A. Bruce Appearing on behalf of the Second and Third Respondents, John J. Henley and Christopher M. Henley Authorities Cited: CASES CONSIDERED: Henley Estate , 2018 NLSC 222 ; Sinnott v. Sinnott Estate , 2015 NLCA 41 ; McCarthy Estate, Re , 2016 NLTD(G) 200; British Columbia (Minister of Forests) v.

Okanagan Indian Band , 2003 SCC 71 ; Sawdon Estate v. Watch Tower Bible and Tract Society of Canada , 2014 ONCA 101 ; Aganeh v. Aganeh , 2017 ONSC 7562 ; Landvis Canada Inc. v. Ocean Choice International Limited Partnership , 2016 NLTD(G) 29. STATUTES CONSIDERED: Wills Act , RSNL 1990, c. W-10 . RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D .

REASONS FOR JUDGMENT Orsborn, J. : INTRODUCTION [ 1 ] Janet Henley and Brian Henley seek from John Henley and Christopher Henley—all children of the late Alec Henley—their solicitor and client costs for what they claim are costs incurred and wasted in pursuing a will

interpretation application that I will refer to as the “Brian Henley Application”. They say that these costs were wasted because of a position advanced by John and Christopher at the outset of a November 9, 2018, hearing scheduled to hear the merits of the application. [1] [ 2 ] The children disagree over the

interpretation of certain provisions in Alec Henley’s testamentary documents, in particular, provisions dealing with the allocation of certain holding company shares and the composition of the bequest of what is referred to as the “CP interest”. The position of John and Christopher which Janet and Brian say took them by surprise on November 9, 2018, is that all issues of

interpretation should be resolved by looking only at the probated will and a 2006 unprobated codicil. John and Christopher say that two 2010 codicils—both of which were admitted to probate—are invalid and should not be considered for any purpose, including, if appropriate, as an “armchair rule” aid to

interpretation. [ 3 ] By way of initial explanation, John and Christopher wish to argue that the phrase “at my death” used in the 2006 codicil—as

opposed to the phrase “upon our deaths” used in the 2010 codicils—is the operative phrase for determining whether or not certain “CP” assets of a holding company (“CI”) “vested” in three beneficiaries as of Alec Henley’s death and thus removed those assets from an asset valuation and share allocation exercise prescribed by Alec Henley’s will, more of which later. [ 4 ] Janet and Brian say that this position was completely contrary to their expectation of the basis upon which the

interpretation application would proceed. John and Christopher say, to the contrary, that there was no surprise at all and that the particular position advanced had been in fact agreed by all counsel as the appropriate basis upon which to argue the will

interpretation issues.

Alternatively, they argue that counsel for Janet and Brian should have known of their position since, say John and Christopher, it was or should have been evident from communications between counsel and from material filed with the Court. [ 5 ] The position advanced by John and Christopher led to the adjournment of the November 9, 2018 hearing and to the filing by John and Christopher of an application seeking to vacate the probate of the 2010 codicils and admit to probate the 2006 codicil. [ 6 ] John and Christopher say that this request for an interim award of costs is inappropriate and premature and that, in fact, they should receive their own costs of these applications on a solicitor-and-client basis.

ISSUE [ 7 ] Should the Court order costs of the adjourned application to Janet and Brian and if so, on what basis? What costs order, if any, should the Court make arising out of this present application? [ 8 ] These decisions require a determination of whether or not the parties had agreed—or whether Janet and Brian should have known—that the

interpretation issues would be argued only on the basis of the will and the unprobated 2006 codicil. BACKGROUND [ 9 ] This application is part of a larger and long-running estate dispute between the four children of the late Alec Henley. In order to fairly assess the different positions of the parties, it is necessary to set out considerable background detail. [ 10 ] Alec Henley died on February 21, 2013.

On August 29, 2013, Letters of Probate were granted to his wife, Catherine Henley, of a will dated November 14, 2001, a codicil dated May 6, 2010, and a further codicil dated July 19, 2010. [ 11 ] Catherine Henley died on June 14, 2015. Letters of Probate of her estate were granted to her four children, Brian, Janet, John and Christopher, on August 12, 2015. On February 23, 2016, the children became, by agreement, co-administrators of Alec Henley’s unadministered estate.

For ease of reference, I will refer to them throughout as “Executors” of his estate. [ 12 ] A third “codicil”—apparently handwritten by Alec Henley—and dated September 20, 2006, came to light shortly after Catherine Henley’s death. I will refer to this document throughout as a codicil, simply for ease of reference. No legal significance whatsoever should be read into my use of this descriptor. [ 13 ] This codicil is at the centre of the position advanced by John and Christopher on the

interpretation issues. [ 14 ] At his death, Alec Henley owned all the shares of Carpasia Investments Inc. (“CI”), a holding company. Among the assets of CI were shares of Carpasia Properties Inc. (“CP”) and a receivable from CP.

Clause 6(3)B of his will directed that the “Carpasia Investment Assets”, a term explained in his will, be valued at their fair market value and the shares of CI distributed to the four children on the basis of an allotment formula that provided that Janet, John and Christopher “share equally in the first THREE HUNDRED THOUSAND DOLLARS ($300,000.00) in value of the CARPASIA INVESTMENTS Assets”, with any surplus value being shared among the four children.

The use of such a formula meant that the value assigned to the “Carpasia Investments Assets” would affect the final share allotment percentage, particularly with respect to Brian, depending on what proportion of the total value of CI was represented by the first $300,000. [ 15 ] The CI shares were subject to trust conditions set out in clauses 6(3)C and D of the will. [ 16 ] Clause 6(3)D provided that the CP shares held by CI would, on Catherine Henley’s death (assuming that Alec Henley predeceased her) be given in equal shares to the four children. (Throughout, the children have agreed that assets of CI such as the CP shares could be directly bequeathed by Alec Henley.) Clause 6(3)C stipulated that until Catherine Henley’s death, she was to receive 50% of the net income of CI (including any income derived from the CP shares) and was to have a veto over dealings with the CI assets. [ 17 ] The codicil of May 6, 2010, provided, in part: 2) With respect to my 50% interest in Carpasia Properties, regardless of anything aforesaid as contained in that Will, 50% of Carpasia Properties is to be divided equally upon our deaths – Alec G.

Henley & Catherine M. Henley to John Henley, Christopher Henley and Janet Henley Andrews in equal shares. My purpose for doing this is that I have not taken any commissions from Alec G. Henley Associates Limited since I sold my shares in the company to my son Brian Henley.

This should rectify any injustice. [ 18 ] A portion of the codicil dated July 19, 2010, essentially confirmed the CP provisions of the May codicil. [ 19 ] Both of these codicils were admitted to probate. [ 20 ] It is common ground that the codicils bequeathed the CP “interest” to only Janet, John and Christopher, thus removing Brian from the bequest in clause 6(3)D of the will.

[ 21 ] However, the wording of the codicils has given rise to an issue of

interpretation—whether the use of the phrase “my 50% interest in Carpasia Properties”—rather than “the shares in Carpasia Properties” as used in the will—means that the CP bequest includes not only the shares of CP but also the receivable from CP held by CI. [ 22 ] On November 30, 2015, by letter from his counsel to counsel for the estate, Brian confirmed that he was concerned with the validity of the 2010 probated codicils; in particular, whether or not they were properly executed in accordance with the formalities of

section 2 of the Wills Act , RSNL 1990, c. W-10 . Clearly, if the 2010 codicils were held to be invalid, notwithstanding their probate, then Brian would be entitled to receive the bequest in the will of an equal share of the CP shares. However, shortly after Brian raised the issue, the third codicil came to light. [ 23 ] That codicil is dated September 20, 2006, and is handwritten. It reads, in part: To my Executors.

Please note that it is my intention to change my will as follows: 1) To divide my interest in Carpasia Properties Inc. (50%) to be divided equally between my Three Children Janet, John & Chris equally at my death. BAH already owns 50% of Carpasia Prop and has his. [ 24 ] On February 4, 2016, Brian’s counsel wrote to estate counsel: We have had the opportunity to review the package of documents relating to Mr. Alec G. Henley’s estate and recently found among Mr. Henley’s personal papers.

There is a document of interest, being a hand-written single page document dated September 20, 2006 commencing with: “To my Executors”. Brian A. Henley confirms that the handwriting and initials on the document appear to be those of Alec G. Henley. If the original of this document is in existence, it be [sic] may be a valid holograph codicil. We note, however, that Alec G. Henley had a tendency to apply his signature (not initials) on the last page and to initial the other pages of a multiple page document, or to apply his full signature to a single page document. This has caused Brian A.

Henley to question whether there might be another page to this document in addition to the one provided. If the document in question is valid as a holograph codicil, then Brian A. Henley agrees that it will have essentially the same dispositive effect regarding the shares of Carpasia Investments Inc. in Carpasia Properties Inc. as the invalid 2010 codicils. In the circumstances, we refrain for the time being from making a conclusion as to whether the September 20, 2006 document is valid and effective as a codicil to the last will and testament of Alec G.

Henley and ask that you provide a certified notarial copy of the handwritten document as well as confirmation that there are no other pages. Once we have your reply, we will revert to you as the position of Brian A. Henley. [ 25 ] The notarized copy was forwarded the next day. [ 26 ] The minutes of a February 23, 2016, meeting of the four Executors and estate counsel include a brief reference to the recently found 2006 codicil: 4. Codicil • Accepted as valid • Refile with the court? MC [McInnes Cooper – estate counsel] recommendation to proceed forward.

Agreed. [ 27 ] In addition to the dispute over the extent of the CP “interest” bequest, John and Christopher took the position that the CP shares and the CP loan on the books of CI should not be considered as CI assets for the purpose of the CI share allocation formula and, further, that the resulting fair market value of CI should be reduced by the liabilities of CI. [ 28 ] On September 20, 2016, Janet wrote to her three brothers and estate counsel: Attached are the calculations of share distribution per Dad’s will/codicils both including and excluding the value of CII’s CPI shares.

I note that for Janet, John and Chris, the impact is relatively small but the impact for Brian is much larger.

In addition, I would point out that Dad did specifically exclude the AGH & Associates Ltd Class A shares from the calculation, but did not exclude the CPI shares. I therefore conclude that he did not intend to exclude them. I do appreciate that the codicil respecting the transfer of the CPI shares to three of us was done at a different time and the exclusion may have been overlooked. That does not change anything for me as I can only deal with what the will/codicil does provide. [ 29 ] On September 29, 2016, John wrote to all setting out his position on the CI/CP share issues.

As part of a comprehensive analysis of a number of issues, he said: CI Share Valuation I have reviewed all the information available on this issue including the tax advice from Deloitte’s the various legal discussions and the numerous emails and other correspondence related to how this needs to be done. Based on this review my position is that 24 Winter Ave and the Carpasia Properties shares need to be excluded from the share calculation. My position is based on the following: • The AGH Codicil # 1 modified the AGH 2001 Will re Carpasia Properties.

At the death of AGH the Carpasia Properties shares go to Janet, John and Chris. • The AGH Will

section 6.3 B explains how the share allocation process works. It says

Section C & D are trust conditions. • The AGH Will

section 6.3 D addresses the allocation of the CP Shares and D. For reasons that are not clear the will suggests the Directors of CI to give the shareholders of CI the CP shares directly, 25% of the CP shares to each sibling after CMH’s death. This is not consistent with 6.3 B where the adjustment formula would result in Brian having a lessor [sic] percentage of CI and thus in theory the CP shares. • The February 23, 2007 AGH memo in his estate file also addresses the CP shares.

It requests that the shares be voted as a block and kept in Carpasia Investments and in fact still voted as a block after the shares are handled out. • Codicil #1 modifies D and now leaves the share to three siblings Janet, John and Chris at the time of AGH’s death. • It is my view that AGH recognized, post-will, that splitting up the CP shares would give Brian voting control over CP which he realized was unfair and potentially problematic and that was the basis for the Codicil. • The result of the above is that AGH is treating the CP shares separately from the CI valuation.

The CP shares are separate and distinct from the other CI assets. • It does not make sense to include in the valuation of the CI shares an asset that does not belong to the four shareholders. [ 30 ] While not completely clear, it seems that the reference to “AGH Codicil # 1” is to the 2006 codicil. [ 31 ] It is evident from John’s position paper that he considered that the CP shares should be excluded from the CI assets for purposes of the valuation of CI and the share allocation because of the fact that the CP shares were, by the codicil, now being left to only three of the four shareholders of CI.

There is no mention of any difference in wording between the 2006 and 2010 codicils, nor of any vesting argument, nor of any need to invalidate the 2010 codicils. [ 32 ] On December 4, 2016, the Executors and estate counsel met. The minutes of that meeting, signed by all, indicate that various agreements were reached, including the valuation of the CI assets and an allocation of the CI shares on the basis of a valuation which included the CP loan and shares: 7.

Valuation of CII assets and the distribution of those shares to Brian, John, Chris and Janet • Agreement of the beneficiaries that Winter Ave (assets and liabilities) is removed from assets of CII for the purposes of valuation (except for RDTOH) [Refundable Dividend Tax on hand]. • Assets to include: o RDTOH account to be included as an asset at a discounted rate: $43,857.48. o Shares in CPI ($179,889.34) o Market Portfolio ($469,901.00)

o Cash ($67,361.00) o CPI Shareholder Loan ($182,785.00) o Total $943,793.82 • Spreadsheet attached to minutes titled “Distribution of Common Shares in CII to Beneficiaries” sets out share distribution to each beneficiary. [ 33 ] As noted, the CP shares were included in the valuation for purposes of the share allocation, as was the CP loan, at a value of $182,785. [ 34 ] Whether or not there was a binding agreement reached at this meeting remains in dispute. [ 35 ] Shortly after the meeting, John took the position that the CP loan was properly valued at $165,285. and not $182,785.

That difference remains in dispute. On July 18, 2017, Christopher wrote to estate counsel and his co-executors saying that he had “reflected on the CP issue” and on whether or not the value of the CP shares should be included in the CI share allocation calculation as it had been in December 2016. He wrote: I have reflected on the CP issue. The codicil reads as follows: Item Two of my Codicil of May 6 th , 2010 shall not be changed and thus my 50% interests in Carpasia Properties regardless of anything aforesaid contained in that Will, 50% of Carpasia Properties will be divided equally upon our deaths of Alec G.

Henley and Catherine Henley to John Henley, Christopher Henley and Janet Henley in equal shares. The Codicil specifically states that Dad’s 50% interest in CP is to be divided equally between Janet, John and me. From my perspective that interest includes the shareholder loan to CP; this has become more important as we look to the implementation of this element of the Will and Codicils and the ramifications.

I also don’t see how one could use the values for CP in relation to the share allocations when the Will specifically provides that this interest is only to be divided among three beneficiaries. [ 36 ] I note the following: (

i) The codicil quoted is the July 2010 document; (ii) The use of the word “interest” is suggested to support the view that the CP loan is included in the bequest in the codicil; and (iii) The argument that the CP shares and CP loan should be excluded from the CI share allocation valuation is based on the fact that the CP bequest is now to only three beneficiaries; this reflects John’s position set out the previous September. [ 37 ] In September 2017, issues concerning the codicils remained unresolved.

On September 19, Janet wrote to estate counsel, with copies of all involved: Dear Sheri and Adrienne I have examined the various codicil issues respecting Carpasia Properties Inc., [i]n particular, I have noted differences in the wording in each alleged codicil. September 20, 2006 holograph codicil (not probated): “to divide my interest in Carpasia Properties Inc. (50%) to be divided equally between my three children Janet, John and Chris Equally at my death.

BAH already owns 50% of Carpasia Properties Inc.” May 6, 2010 codicil (probated) “With respect to my 50% interest in Carpasia Properties, regardless of anything aforesaid contained in that Will, 50% of Carpasia Properties is to be divided equally upon our deaths – Alec G. Henley & Catherine M. Henley to John Henley, Christopher Henley and

Janet Henley Andrews in equal shares.” July 19, 2010 codicil (leaving May 6 unchanged) “Item Two of my codicil of May 6, 2010 shall not be changed and thus my 50% interest in Carpasia Properties regardless of anything aforesaid contained in that Will, 50% of Carpasia Properties will be divided equally upon our deaths of Alec G.

Henley and Catherine Henley to John Henley, Christopher Henley and Janet Henley in equal shares” First, based on our earlier “discussions” with Brian, it appears that the May 6, 2010 Codicil is likely invalid pursuant to the provisions of the Wills Act which have traditionally been strictly enforced. As a result, I am assuming that our discussions on Friday, September 22, 2017 relate to the September 20, 2006 holograph codicil. I am not sure if John, Chris and Brian are referring to that codicil.

Second, that codicil refers to Brian already having 50%, which I assume would be part of determining the meaning of the bequest. Third, I assume that if the meaning of “to divide my interest in Carpasia Properties Inc (50%)…..“is ambiguous (not clear) then a court would look at all of the alleged codicils and the Will and other extrinsic evidence to aid in the

interpretation of the words used. Please confirm if those assumptions are correct. I will be relying on the holograph codicil. [Bold in original.] [ 38 ] In cross-examination on this application, Janet said that her reference to relying on the holograph codicil, was simply “for what it says”, given what she felt was a legitimate question about the validity of the May 2010 codicil. Her affidavit of January 23, 2019, says: 3. I have included at times reference to the 2006 hand written memorandum as a codicil because it was what everyone was calling it.

I have referenced the original dispute over the 2006 hand written memorandum for completeness and to demonstrate the similarity over time of the language used by Alec Henley in relation to his bequest for the CPI shares. This is in relation to the

interpretation of the May 2010 codicil and whether it incorporates or was intended to incorporate the shareholder loans from CII to CPI. [ 39 ] Janet wrote again on September 20, 2017, attaching alternative calculations of the CI share allocation. [ 40 ] Estate counsel wrote to all the same day expressing her views on the possibility of the 2006 codicil being probated and its possible use, in any event, as an aid to interpreting the will and the 2010 codicils.

The letter concluded: If any of the executor’s [executors] now intend to challenge the validity of the 2010 codicils, then they should seek alternate counsel for that purpose, and I would ask that if there is such an intention, that it be communicated on Friday so that the estate is aware of a pending challenge to the already probated documents. [ 41 ] No alternate counsel was ever retained. [ 42 ] The four Henleys and counsel met on September 22, 2017. The minutes refer to “a discussion and disagreement regarding the

interpretation of the will and codicils and in particular if the 50% interest in CP included the shareholder loan”. The discussion on the valuation of the CI assets is noted as being “deferred”.

There is no reference to any discussion of the validity of the codicils, nor of obtaining alternate estate counsel. [ 43 ] The record indicates that the Executors did not meet after September 22, 2017. [ 44 ] Because of the ongoing disputes among the Executors, Janet indicated her intention to apply to have the Public Trustee appointed to complete the administration of Alec Henley’s estate. [ 45 ] On April 13, 2018, Janet filed an application seeking the removal of all four Executors and the appointment of the Public Trustee as the administrator of the estates of Alec and Catherine Henley.

She cited the continuing inability of the four Executors to agree

on the resolution of certain outstanding issues. She also sought specific orders vesting in the Public Trustee: (

i) The right to transfer the CP shares (held by CI) to Janet, John and Christopher in equal shares; and (ii) The right to transfer the CI shares to Janet, Brian, John and Christopher in accordance with the allocation set out in the minutes of the December 4, 2016, meeting of the Executors. [ 46 ] The application set out the background: 7. Letters of Probate to the Estate of Alec G. Henley were granted out of this Honourable Court to Catherine M. Henley, the widow of the testator, on August 29, 2013. A copy of the Letters of Probate is attached hereto as Exhibit 1. 8.

The testamentary documents as well as non-testamentary Directions relating to the Estate of Alec G. Henley, Deceased, are as follows: Testamentary Documents: a. Will dated November 14, 2001 b. Codicil # 1 dated May 6, 2010 c. Codicil dated July 19, 2010 d. Handwritten codicil dated September 20, 2006 (attached hereto as Exhibit 2) … 34.

As of August 2016, the Trustees were divided 2/2 on whether the value of the Carpasia Properties Inc shares and the liabilities of Carpasia Investments Inc should be included in the Carpasia Investments Assets for the purpose of determining the distribution of the shares between them.

As a result, the share transfers could not be done. [ 47 ] The issue of whether or not the liabilities of CI should be included in the fair market valuation of the CI assets is a dispute that is not relevant for present purposes. [ 48 ] The reference to “non-testamentary Directions” appears to be a reference to a February 23, 2007, direction from Alec Henley regarding the sale of 24 Winter Avenue, a residential property owned by CI. [ 49 ] After 37 paragraphs dealing with the dispute over the amount of the CP loan—$182,785.00 or $165,285.00 or $161,535.00— the application (paragraphs 81-83) makes brief reference to the dispute concerning the inclusion of the CP shares in the CI assets for the purpose of allocating the CI shares. [ 50 ] There follows a discussion of the wording of the codicils and whether the phrase “interest in Carpasia Properties” includes the CP loan.

In this context, the application refers to both 2010 codicils, the 2015 position of Brian that the May 2010 codicil was invalid, the discovery of the 2006 codicil, Brian’s February 2016 decision to no longer “contest the disposition of the CP shares in the 2010 AGH codicils and the 2006 letter to Trustees”, and the December 2016 meeting as an “agreement” by the Executors. [ 51 ] The application then sets out the position subsequently asserted by John and/or Christopher: (

i) That the “50% interest” in CP included the CP loan; (ii) That the amount of the CP loan was $165,285.00; (iii) That the CI assets did not include the CP shares; and (iv) That the CI asset valuation should be net of CI liabilities. [ 52 ] The application then asks, “Which codicil applies?” and says: 103.

As indicated in paragraphs 91-95 hereof, in late 2015/early 2016, Brian Henley challenged the two 2010 codicils on the basis that their execution by the testator did not strictly comply with the provisions of the Wills Act requiring that the testator sign in the presence of two witnesses both present at the same time. 104. Ultimately, rather than dealing with that validity issue in court, it was resolved because a holograph Codicil to the same effect dated September 20, 2006, which has not been probated, was found and produced. 105.

The language of the bequest changes significantly between the Will and the Codicils and changes somewhat between the Codicils:

Will: Clause 6(3) D: “my Executors shall cause to be surrendered, conveyed and transferred to each of my children … one quarter of each of the shares in CARPASIA PROPERTIES INC. held by CARPASIA INVESTMENTS INC . Codicil 1: September 20, 2006: “ to divide my interest in Carpasia Properties Inc (50%) to be divided equally between my three children Janet, John and Chris Equally at my death .

BAG already owns 50% of Carpasia Properties Inc.” Codicil 2: May 10, 2010: “ With respect to my 50% interest in Carpasia Properties, regardless of anything aforesaid contained in that Will, 50% of Carpasia Properties is to be divided equally upon our deaths – Alec G. Henley & Catherine M. Henley to John Henley, Christopher Henley and Janet Henley Andrews in equal shares .

Codicil 3: July 19, 2010: “Item Two of my codicil of May 6, 2010 shall not be changed and thus my 50% interest in Carpasia Properties regardless of anything aforesaid contained in that Will, 50% of Carpasia Properties will be divided equally upon our deaths of Alec G. Henley and Catherine Henley to John Henley, Christopher Henley and Janet Henley in equal shares ” [Emphasis in original.] [ 53 ] There follows a discussion about the change in wording from “shares” to “interest”: 106.

The Applicant says that the language used in the Will explicitly refers to transfer of an undivided one-quarter interest in each of the shares held by Carpasia Investments Inc in Carpasia Properties Inc. 107. In contrast, each of the codicils the testator, Alec G. Henley, effectively says the same thing when they refer to “my 50% interest in Carpasia Properties Inc” or “my interest in Carpasia Properties Inc (50%)”. 108.

The Applicant says that there is an issue whether the testator’s 50% interest in Carpasia Properties Inc through Carpasia Investments Inc includes only the shares or the shares plus the Carpasia Investments Inc shareholder loans to Carpasia Properties Inc. [ 54 ] There is no reference in the application to any relevance or potential relevance of any difference in the wording between the three codicils themselves, nor is there any suggestion of an acceptance that the 2006 document should be the only post-will document used in any

interpretation exercise. The focus is on the change from “shares” to “interest” and whether or not this change means that the CP loan is now included in the CP bequest. [ 55 ] Forty-nine exhibits accompanied the application. [ 56 ] In argument, counsel for John and Christopher made much of the fact that only the 2006 codicil was included in the exhibits (exhibit 2) and not the 2010 codicils. Although exhibit 1 was the 2013 letters of probate—referring to the will and to the first and second codicils—only the will, and not the codicils, was included in the exhibit. Accordingly said counsel, this shows that Janet recognized that the 2006 codicil was the only operative codicil for purposes of

interpretation. [ 57 ] This argument has no merit. The full text of the application clearly refers both to the 2010 codicils and to the 2006 codicil.

The failure to attach the probated codicils in exhibit 1 is of no consequence, particularly given Janet’s position that, for dispositive purposes, there was no difference between the codicils. [ 58 ] The application was called in Court in May 2018 and the dates of November 1 and 9, 2018, set for the hearing. [ 59 ] John and Christopher retained new counsel in July 2018. [ 60 ] That any relevance of the differences in wording between the codicils was raised only after the retention of new counsel was confirmed in John’s 2019 affidavit: 8.

Attached hereto as Exhibit “C” is a copy of minutes of a meeting of the executors of the Estate of Alec G. Henley held on February 23, 2016. In item number 4 it was acknowledged that the newly discovered holograph codicil was valid. The issue arose as to whether it should be filed with the court. Upon the recommendation of legal counsel to the estate it was agreed to move forward without the matter being referred to the court. 9.

It was understood at this juncture by the executors that it was irrelevant which codicil was or was not valid or invalid as the dispositive effect was the same as averred by Doug Wright in his correspondence attached as Exhibit “B”. The executors were never advised that the holograph codicil should be probated, and that the validity of the probated codicils should be challenged in court. At no time was it brought to the attention of the executors that there was any dispositive significance with respect to the different wording in

the holograph codicil compared to the probated codicils. … 16. Until John Bruce was retained as legal counsel for Christopher Henley and me we were not aware of the legal significance of the wording in the holograph codicil as it relates to the timing of the vesting of our interest in the CPI shares. It was understood by Christopher Henley and me as well as acknowledged by Janet Henley in attached Exhibit “D” that the holograph codicil was valid.

The holograph codicil was also acknowledged by the executors as being valid in their February 23, 2016 meeting, the minutes of which are attached as Exhibit “C”. [ 61 ] The difference in wording now relied on to support the timing of vesting argument advanced by John and Christopher is—as previously noted—the 2006 reference to “at my death” compared to the 2010 references “upon our deaths – Alec G. Henley and Catherine M. Henley …”. [ 62 ] As already mentioned, this vesting argument is intended to support the conclusion that upon Mr.

Henley’s death, the CP shares were no longer an asset of CI and, therefore, should not be included in the CI asset valuation contemplated by the will. Due to the CI share allocation formula, this would mean that the three CP share beneficiaries (Janet, John and Christopher) would receive a greater portion of the CI shares, at the expense of Brian’s proportion. [ 63 ] The ability to even advance this argument depends, of course, on the validity of the 2006 document as a testamentary disposition and also on the invalidity of the later probated 2010 codicils and their inadmissibility as evidence in aid of

interpretation. [ 64 ] On the hearing of these costs applications, counsel for John and Christopher argued that well before November 9, 2018, all counsel had agreed that the

interpretation issues raised by Janet’s application would be argued with reference only to the will and the 2006 codicil without any reference to or reliance on the 2010 codicils—essentially an agreement that the 2010 codicils were invalid and also could not be relied on as evidence to assist in

interpretation of the will or the 2006 codicil. When I asked at what point this agreement was reached, counsel replied that it was “an implicit agreement”. [ 65 ] I note counsel’s written argument that “given that the holograph codicil was the only codicil that provided for the bequest upon the death of Alec G. Henley, counsel for the applicant [Brian] knew or ought to have known that the document in play was the holograph codicil”. A similar argument was advanced in response to Janet’s application for costs. [ 66 ] John and Christopher’s position is thus, as I understand it, that (

i) there was, in fact, an agreement among counsel that the 2006 codicil would be the only codicil used in the

interpretation exercise; or alternatively, (ii) that Janet and Brian’s counsel ought to have known that would be the case and accordingly cannot now claim to have been taken by surprise on November 9, 2018. Counsel’s brief continued, at paragraph 11: 11. The appearance at court on November 9, 2018 was the first time that either Janet Henley or Brian Henley made it known that they reversed their position and were now objecting to the holograph codicil being the operative document to be considered by the court.

This despite the matter having been discussed in previous court appearances without any objection being made to the holograph codicil being the operative document for the purposes of Brian Henley’s application. This last-minute change in their position necessitated the postponement of the Brian Henley’s application in order to have the probate of Alec G.

Henley reviewed. [ 67 ] The objective assessment of the “implicit agreement” and “ought to have known” arguments requires consideration of the communications between counsel following retention of new counsel by John and Christopher, the content of the material filed with the Court, and discussions during the hearings of November 1, 7 and 9, 2018. [ 68 ] On August 14, 2018, counsel for Brian wrote to all counsel concerning a proposed meeting of counsel, Janet’s application to appoint the Public Trustee and the issues on which the Executors were deadlocked.

Counsel enclosed a proposed agenda for a meeting of counsel—in part: 4. Discussion of issues framed in Janet Henley’s Application: … (

c) What is the value of the “CII Assets” for the purposes of the distribution of the common shares of CII in accordance with clause 6(3)(

B) of the Will; and (

d) Whether the Estate’s “50% interest in CPI” for the purposes of the relevant codicils includes shareholder loans payable by CPI to CII.

(The amount of the shareholder loan payable by CPI to CII is relevant to both (

c) and (

d) but is in dispute.) 5. … (

d) Can parties agree on an Agreed Statement of Facts? [ 69 ] Counsel for John and Christopher replied on August 16, 2018, referred to a scheduled meeting of counsel and added: I have attached issues I believe should be put to the court pursuant to Rule 5.02. My reaction overall is that there has not been a recognition of the law that the beneficial interest in the CPI shares vested in the named beneficiaries immediately upon the death of AGH.

The actual transfer that seems to be an issue is merely that of the legal/registered title. [ 70 ] This comment identifies the issue of vesting on Alec Henley’s death but makes no reference to the availability of the vesting argument being dependent on the validity of the 2006 codicil and the invalidity of the 2010 codicils or their inapplicability as an aid to

interpretation. [ 71 ] Counsel’s attached list of issues: 1. For the purposes of valuation of CII “assets” as set out in the formula for share distribution; is the valuation to be “net” assets or “gross” assets? 1.1 Should the shares of CPI, together with related loans, be included in the “assets” calculation? 1.1.1 Is CII a bare trustee of the CPI shares and loans, as of the date of death of AGH? If so; what is the impact on the valuation of the CII shares as a result of the CPI shares and loans being a CII off-balance sheet item? 2.

Should the loan amount receivable from CPI to CII as shown on the records of CII be adjusted to take into account the two advances made directly by AGH to CPI, with a corresponding recognition of the obligation by CII to the estate of AGH for that amount? [ 72 ] Counsel for John and Christopher wrote again on August 28, 2018: We, as counsel, have commenced discussions to finesse the current application before the court with a view to expediting a global resolution. The current prayer for relief in the application is of little value in setting out the germane issues.

As discussed the objective is to present to the court in a concise manner issues/determinations to be dealt with. I have provided what I consider appropriate issues for the court to consider to resolve matters. I await any comments with respect to the rewording of the issues I have set out. Melissa/Doug, What issues do you want raised? I believe you also intend to raise the issue of the prior agreement of the trustees. [ 73 ] Counsel for Brian wrote on August 29, 2018: … I think the questions that will require the intervention of the Court from Brian Henley’s point of view are: 1.

What are the CII Assets for the purposes of the relevant clause of the Will? Within this, I think John can put his specific question of the status of the CPI shares and whether CII is a bare trustee of these shares (and therefore, as I understand what John is saying, they are not a CII Asset) before the Court. On behalf of Brian Henley we will be arguing the CPI shares are a CII Asset. 2. For the purposes of the requirement in the Will to ascertain the value of what are determined to be CII Assets, re [sic] there any disputes about how the respective CII Assets should be valued?

Within this, I am assuming there is no longer an issue from John and Christopher Henley’s point of view about the amount of the shareholder loan receivable from CPI that is payable to CII or about the status of the approx. $3500 payment.

Also within this, I think John can put his specific question about whether the value of any CII Assets should be done on a “gross” or “net” basis. On behalf of Brian Henley we will argue that the Will refers to “fair market value” and in any event the parties agreed on the value of all of these assets previously. 3. The third issue is whether the provision in the Will disposing of Alec G. Henley’s “interest in CPI” to Janet Henley, Christopher Henley and John Henley includes the shareholder loan receivable due from CPI to CII as well as the shares of CPI held by CII. 4.

The fourth issue from our client’s perspective is whether the parties’ collective decisions on all of these issues (in December of 2017 I think) means that these matters have been decided as reflected in the minutes and cannot be re-opened. [ 74 ] Counsel for John and Christopher replied, commenting on the issue of the binding effect of the December 4, 2016, meeting and saying: Frankly I can’t see the court enforcing a supposed decision by executors that is premised upon, in my opinion, an incorrect

interpretation of the testamentary documents. The courts

interpretation of the documentation will ultimately dictate the result at the end of the day. Nick, how do you propose we move forward? I had hoped we could avoid the necessity of cross examination by putting clear issues to the court supported by an agreed statement of facts. However if the issue of the supposed December 4, 2016 decision being binding is put to the court cross examination of Janet will probably be required as well as additional affidavits from both of my clients.

I note the references to “testamentary documents” and to the drafting of an agreed statement of facts. [ 75 ] On September 13, 2018, counsel for Janet wrote to advise that Janet would be withdrawing that portion of her April application dealing with the disputed issues of

interpretation. He wrote: I have been thoroughly reviewing this matter and I have advised Janet to withdraw the portion of the application that pertains to the

interpretation of the Will and to proceed only with the request for the appointment of the public trustee and costs. So, we are withdrawing items 1 b-e in the request for relief. Anyone reading Janet’s affidavit can see that the estate is going nowhere. I see the appointment of the public trustee as a given and that the application will take maybe half a day.

Costs will be awarded to Janet. [ 76 ] He went on to say that the failure of counsel—to that point—to narrow the issues and to develop an agreed statement of facts on the disputed issues meant that the litigation on those issues would be protracted, a circumstance that, in counsel’s view, would be alleviated by the appointment of the Public Trustee. [ 77 ] Counsel for Brian replied—in part: As discussed previously, Brian Henley agrees with Janet Henley’s position on all issues that she set out in her Application other than that of removing and replacing the Co-Executors. I don’t expect that position to change.

If Janet wishes to proceed solely on the issue of removal and replacement, and her Application is not successful (which I think will, with all respect due to Janet, be the outcome), I think Brian hopes she will continue as a Co-Executor. If that is where the parties find themselves after a ruling on the issue of removal and replacement, I think the obvious question is whether all 4 Co-Executors can get together and make a joint application for directions from the Court on the issues that require the assistance of the Court to resolve.

If everyone is reasonable, that is an application that should be able to proceed entirely on an agreed statement of facts, without Affidavits and cross-examinations i.e., all of the trappings that we have been concerned would stretch the hearing of Janet’s current Application beyond the allotted two days. [ 78 ] A response from counsel for John and Christopher followed quickly: I concur with Doug’s position vis a vis the public trustee appointment. I will meet with Doug this afternoon to seek common ground.

I query, given your comments and instructions with respect to the narrowed scope of the application, whether there is any utility in meeting tomorrow. Given that Janet has made application pursuant to

section 25 of the Trustee Act that section, in my opinion, grants sufficient jurisdiction to the court to review the issues that I have previously raised. They will be set out in the response to the application. I do not agree that the any allotted court time should be abandoned. Upon reflection I even wonder whether two days will be sufficient. [ 79 ] I note the intention that John and Christopher’s position on the disputed issues would be as previously framed by their counsel. [ 80 ] Counsel for John and Christopher wrote again on September 16, 2018:

This is to follow up on our meeting Friday which I thought was productive. When might we expect the amended application which will narrow the prayer for relief solely to appointing the public trustee? Also could you provide copies of the emails which are referenced in the supplemental affidavit of Janet’s that you intend to file. I think we are all in agreement that the executors/trustees are at a deadlock. However we do not agree on the mechanism to resolve the deadlock. The appointment of the public trustee will not, without the courts direction, resolve the core issues we discussed.

It is my opinion that construction of the testamentary documentation by the court would resolve the deadlock. Whether the issues are put to the court now or by the public trustee later, it will ultimately have to be determined by the court. That being said hopefully concise issues that we can agree on can be put to the court. I await Doug and Melissa’s draft in that regard.

In the event that we do not reach a consensus on questions to put to the court I will be proffering my proposed solution to the court in response to the application. [ 81 ] On September 17, 2018, counsel for Brian forwarded the expected draft of an agreed statement of facts, essentially outlining the background and the fact of the deadlock between the Executors on certain specific issues. The draft—in part: 1. Alec G. Henley (“ Mr. Henley ”) died on February 21, 2013. 2. Mr. Henley was survived by his wife, Catherine M. Henley (“ Mrs.

Henley ”) and his four children, being the parties to the within application: Janet M. Henley (“ Janet ”); Brian A. Henley (“ Brian ”); John J. Henley (“ John ”); and Christopher M. Henley (“ Christopher ”). 3. Mr. Henley died leaving a Last Will and Testament dated November 14, 2001 (“ Mr. Henley’s Last Will ”) together with the following codicils: (

i) a codicil dated May 6, 2010 (the “ First Codicil ”); (ii) a codicil dated July 19, 2010 (the “ Second Codicil ”); and (iii) a handwritten codicil dated September 20, 2006 (hereinafter referred to as the “ Third Codicil ” and together with the First Codicil and the Second Codicil as the “ Codicils ”). … 5. Letters of Probate were granted to Mrs. Henley on August 29, 2013 with respect to Mr. Henley’s Last Will, the First Codicil and the Second Codicil. The existence of the Third Codicil was not known at the time of the Petition or granting of the aforesaid Letters of Probate. … 14.

As of February 25, 2018, the items left to be completed with respect to Mr. Henley’s Estate include the following: (

a) Transfer of the shares in CII owned by the estate of Mr. Henley to Janet, Brian, John and Christopher in accordance with clause 6(3)(

B) of Mr. Henley’s Last Will; (

b) Transfer of shares of CPI that at the date of death were held by CII to Janet, John and Christopher in accordance with the Codicils;

… 22. As of the date hereof, the Co-Executors have been unable to resolve the issue of how many shares of CII are to be distributed to each beneficiary pursuant to paragraph 6(3)(

B) of Mr. Henley’s Last Will. In the implementation by the Co-Executors of paragraph 6(3)(

B) of the Will, the following questions are in dispute, with the Co-Executors deadlocked 2-2: (

a) Are the shares in CPI (the “ CPI Shares ”) owned by CII at the date of Mr. Henley’s death a “CII Asset” for the purposes of clause 6(3)(

B) of Mr. Henley’s Last Will? • Janet and Brian say that the CPI Shares are a “CII Asset” • John and Christopher say the CPI Shares are not a “CII Asset”. (

b) If the CPI Shares are a CII Asset for the purposes of clause 6(3)(

B) of Mr. Henley’s Last Will, what is their fair market value for the purposes of clause 6(3)(B)? • Janet and Brian say the fair market value of the CPI Shares is $● as per the decision of the Co-Executors at the meeting in December, 2016 • John and Christopher say the fair market value of the CPI Shares is $● (

c) Is the CPI Loan in the amount of $182,785.00 a “CII Asset” for the purposes of clause 6(3)(

B) of Mr. Henley’s Last Will? • Janet and Brian say the CPI Loan is a “CII Asset” • John and Christopher say the CPI Loan is not a CII Asset. (

d) Once the CII Assets are identified, for the purposes of determining the aggregate fair market value of the CII Assets as required by paragraph 6(3)(

b) of the Will, is such fair market value to be stated as net of the liabilities of CII? • Janet and Brian say the aggregate fair market value of the CII Assets is to be determined without taking account of any liabilities of CII • John and Christopher say the aggregate fair market value of the CII Assets is to be determined net of the liabilities of CII. (

B) DO THE PROVISIONS OF THE CODICILS RESPECTING CPI APPLY TO THE SHAREHOLDER LOAN PAYABLE BY CPI TO CII? 23. It is agreed that pursuant to the Codicils, the Co-Executors must distribute an equal number of the CPI Shares to each of Janet, John and Christopher as Brian is not a beneficiary in respect of such shares pursuant to the Codicils. 24. As of the date hereof, the Co-Executors are deadlocked 2-2 on the issue of whether, in addition to governing the disposition of the CPI Shares, the provisions of the Codicils govern the CPI Loan.

• Janet and Brian say the Codicils govern only the CPI Shares and that the CPI Loan remains a receivable of CII and is not to be distributed to the beneficiaries in respect of the CPI Shares; • John and Christopher say the Codicils govern the CPI Shares and the CPI Loan and that the Codicils require that the CPI Loan be assigned by CII to each of Janet, John and Christopher in equal shares. [Emphasis in original.] [ 82 ] A fair reading of this draft suggests that it was the understanding of at least counsel for Brian that resolution of the disputed items would engage an

interpretation of the will and all three codicils. [ 83 ] Counsel for Brian followed up on September 19, 2018—in part: John, can you confirm whether you will be filing an Application on behalf of your clients with a view to trying to litigate the disputed substantive issues during the two scheduled Court days in November? If that is your clients’ intention, I think all of us as counsel agree that it will not be possible top [sic] present the evidence, law and argument on all of the disputed matters in the two court days that have been allotted.

Finally, can you both please let me know whether you have any comments at this time on the draft Agreed Statement of Facts that I sent out on Monday afternoon? [ 84 ] Counsel for John and Christopher wrote on September 20, 2018: I have been instructed to respond to the application as issued. There seems to be a misunderstanding that the issues I have identified would not be raised in response to the application if amended. They will be even if the application is amended to only ask for removal.

I anticipate having the hearing brief of the second and third respondents filed by next week. [ 85 ] I assume that the reference to the “application as issued” is a reference to the April 2018 application. The “issues I have identified” are the

interpretation issues raised by John and Christopher. [ 86 ] Counsel for Brian replied the next day—the September 21, 2018, responses from counsel for John and Christopher are shown in bold immediately following the comment in question: I take it then that John’s clients have no proposals to try to eliminate any issues from this litigation.

That was all that was requested of John’s clients in our discussion last week and that was what John undertook to ask them, if in principle Janet’s removal / replacement request was withdrawn and the question of whether they are bound by their decisions in December 2016 was withdrawn. It appears that they are unwilling to suggest anything constructive. Your last comment was unwarranted and gratuitous. Your first comment is correct. Where that leaves us is we are less than a month from the deadline for filing our materials and frankly we don’t even know at this point what the pleadings in the Application will be.

The Application itself is the pleading. If that is the situation, in light of the state of the pleadings in the context of Nick’s recent e-mail and in light of John’s e-mail of today, and in light of the fact that we are less than a month from the deadline to have all of our materials filed with the Court, I think by the end of tomorrow we all need to know: 1. Neither of you has responded to the draft Agreed Statement of Facts that I submitted to you both on the issue of removal of the Co- Executors.

Will you be responding with comments and if so, when can I have your client’s position on the draft in terms of a suggested revision showing your client’s proposed changes ? It would seem that an agreed statement of facts will not occur. I suggest in any event there are sufficient facts set out in the Application itself for the court to deal with the matter. We all agree there are disagreements. 2.

Will Janet be amending her Application as a result of her withdrawal of the issues other than removal / replacement of Co-Executors (as stated by Nick in his e-email last week) and when that Amended Application will be issued and served ? 3. John, will you now be taking an Application on behalf of your clients with a request that it be consolidated with Janet’s? If so, when will it be filed and served? Is your expectation that there will have to be a first appearance on whether your clients’ Application can be

consolidated with Janet’s ? I will not be issuing a fresh application but, as I noted below, will be responding to the Application as filed. I anticipate filing the hearing brief in opposition to the Application early next week . [Underlining in original.] [ 87 ] I note the following from the response of counsel for John and Christopher: (

i) John and Christopher will be responding to Janet’s April 2018 application “as filed”—that is, to both the removal and

interpretation issues; (ii) Janet’s April 2018 application will provide the factual foundation for the determinations asked of the Court. [ 88 ] Both the April 2018 application and the draft of the agreed statement of facts included clear references to all three codicils.

There is nothing in the response from counsel for John and Christopher to suggest that the 2006 codicil should be the only codicil to be considered and that the 2010 codicils be considered invalid and be disregarded for all purposes. [ 89 ] On September 27, 2018, John and Christopher filed their memorandum in response to Janet’s April 2018 application. No affidavits were filed. The brief addressed both the request for the appointment of the Public Trustee and the disputed

interpretation issues. Counsel pointed to the brief as a clear indication to all concerned—apparently including the Court—that the “operative” codicil to be used and interpreted was the 2006 document, with no role for the 2010 probated documents. Because of this reliance on the brief, it is necessary to set it out at some length: … 2) The executors/trustees disagree as to the

interpretation of certain aspects of the testamentary documentation. This is confirmed by the Applicant in paragraphs 26 and 34 of the within Application. … 4) In essence the Applicant and the First Respondent [Janet and Brian] have an

interpretation of certain aspects of the testamentary documents that differs from the Second and Third Respondents

interpretation of certain aspects of the testamentary documents. [ 90 ] I note the references to “testamentary documentation/documents” and to paragraphs 26 and 34 of Janet’s April 2018 application. Those paragraphs read: 26. As a result, as of March 7, 2018, the Trustees of the Estate of Alec G. Henley have been unable to resolve the following: a. Transfer of Shares in Carpasia Investments Inc to Janet Henley, Brian Henley, John Henley and Christopher Henley in accordance with the Will; b.

Transfer of shares held by Carpasia Investments Inc. in Carpasia Properties Inc to Janet Henley, John Henley and Christopher Henley in accordance with the Will; c. Appointment of Brian Henley as a director of Carpasia Investments Inc. … 34. As of August 2016, the Trustees were divided 2/2 on whether the value of the Carpasia Properties Inc shares and the liabilities of Carpasia Investments Inc should be included in the Carpasia Investments Assets for the purpose of determining the distribution of the shares between them.

As a result, the share transfers could not be done. [ 91 ] I do not discern from the above any suggestion of the use of the 2006 codicil as the exclusive operative document.

[ 92 ] John and Christopher’s brief continues: 6) The Last Will and Testament of Alec G. Henley (Exhibit 1 annexed to the Application) dated November 12, 2001 provided that upon the death of Catherine Healey shares of Carpasia Properties Inc. (“CPI”) held by Carpasia Investments Inc. (“CII”) were to be transferred to the Applicant, First Respondent, Second Respondent and the Third Respondent as to one quarter each. [Clause 6(3)(d)]. [Italics in original.] 7) Alec G.

Henley on September 20, 2006 executed a codicil to his Last Will and Testament (Exhibit 2 annexed to the Application) with the stated intention of changing his will as follows: “To divide my interest in Carpasia Properties Inc. (50%) to be divided equally between my three children Janet, John & Chris equally at my death …”. [Italics in original.] [ 93 ] It is true that the brief throughout makes reference only to the 2006 codicil. There is no reference to the 2010 probated codicils.

However, in the extracts above, the italicized words “shares” and “interest” focus simply on the difference between the will and all three codicils—the word “interest” is used in each codicil. Nothing in the reference to the 2006 codicil would suggest to the reader any import of the 2006 codicil other than the use of the word “interest”.

The phrase “at my death” is not italicized. [ 94 ] This focus continues at page 3, issue 2 of the brief: In addition to the shares of CPI held by CII does the shareholder loan owing by CPI to CII form part of the “interest” of CPI to be transferred to the Applicant, Second Respondent and the Third Respondent? [ 95 ] The later statement of issues 4 and 5 underpins John’s and Christopher’s argument that the parties were or should have been of one mind with respect to the documents to be interpreted: 4) Did the beneficial interest in the CPI shares and related CPI loan due to CII vest in the Applicant, Second Respondent and Third Respondent upon the death of Alec G.

Henley such that CII became a bare trustee (legal owner) only, with respect to CPI shares and related CPI loan due to CII? 5) Do the CPI shares and related CPI loan due to CII form part of the Assets of CII as contemplated by paragraph 6(3)(

B) of the Last Will and Testament of Alec G. Henley? [ 96 ] The argument on issue 4—at page 7: 1) The Codicil of Alec G. Henley provided for an indirect gift through his holding company CII. He noted in his Last Will and Testament that CII “was a convenient medium for acquiring and holding investments … for the purposes of a personal holding company.” [Exhibit 1 paragraph 6(3)]. It is not in dispute that the indirect gift by Alec G.

Henley, through his holding company CII, is valid and is recognized by CII. 2) Clause 6(3) of the Will states that “I direct that all of the CII shares belonging to me at my death to be dealt with upon the following trusts.” This included the CPI shares referenced in 6(3)(

D) of the Will. The Codicil states “To divide my interest in Carpasia Properties Inc. (50%) to be divided equally between my three children Janet, John & Chris equally at my death …”. Both reference a gift upon death. There is a vesting of the beneficial ownership in the “CPI interest” bequeathed by the late Alec G. Henley upon his death. The three certainties for the formation of a trust are satisfied upon the death of Alec G. Henley; with CII becoming merely a bare trustee for the named beneficiaries. Namely the Applicant, Second and Third Respondents.

The three certainties required for the formation of a trust are present. There is certainty of intention, subject matter and objects. The CPI beneficial interest became vested in the named beneficiaries of the trust upon the death of Alec G. Henley. Upon creation of the trust any “interest in CPI” was no longer an asset of CII due to the change in beneficial ownership.

Hence they became off-balance sheet items for CII and therefore are not assets of CII. [ 97 ] Other than the use of the words “at my death” in the extract of the codicil—the phrase relied upon by John and Christopher to differentiate the 2006 and 2010 codicils and to support the “bare trustee” argument—there is nothing to suggest that this position requires the invalidity of the 2010 probated codicils or may negate the intention expressed by clause 6(3)C of the will that 50% of the net income of CI be paid to Catherine Henley during her lifetime. (This latter issue, of course, would only have arisen had the 2006 document been discovered before Catherine Henley’s death.) [ 98 ] The argument on issue 5: 1) The Second and Third Respondent reiterate their position previously noted in that the shares and loan relating to CPI are not assets of CII but form the corpus of a trust which CII is not the beneficiary of. 2) The Last Will and Testament in paragraph 6(3)(

B) sets out a methodology for determining the distribution of CII shares, first to the Applicant and the Second and Third Respondents. Then secondly to the Applicant and the First, Second and Third Respondents. However, it is noted that the share allotment is subject to trust conditions expressed in clause 6(3)(D). Paragraph 6(3)(

D) deals with the transfer of the shares of CPI to the Applicant and the Second and Third Respondents. This clause was subsequently amended in the Codicil to change the beneficiaries. The allotment of CII shares is subject to the express trust created by the death of Alec G. Henley. This removed the CPI shares and loans from being taken into account in the determination of the fair market value of the CII Assets.

[ 99 ] Again, there is nothing in this argument that suggests or necessarily implies the revocation or ignoring of the probated codicils. Further, stating that the share allotment is subject to trust conditions, but then referring only to 6(3)D of the will would not in my view cause the reader to conclude that it is implied that the 2006 codicil revoked the trust conditions in clause 6(3)C of the will. (Recognizing again that the brief was written following the death of Catherine Henley).

In any event, pointing out that the CI share allotment is subject to trust conditions—to an “express trust”—does not carry with it, as urged by counsel, the implication that the 2010 codicils are invalid and must be ignored for all purposes. To the extent that clause 6(3)D creates a trust, it is in the direction, should Catherine Henley survive Alec Henley, to transfer the CP shares to the four (subsequently three) beneficiaries upon her death.

This is similar to the wording in the 2010 codicils; thus, the reference in the brief to clause 6(3)D as reflecting an express trust provides no intimation of the position taken by counsel on November 9, 2018, that the 2010 codicils are inoperative for all purposes. [ 100 ] Reading the brief as a whole, and while it refers only to the 2006 codicil, I cannot conclude that it reflects any hint of an understanding or agreement that the only documents to be considered on the

interpretation application are the will and the 2006 unprobated codicil. [ 101 ] Because of Janet’s decision to pursue only the appointment of the Public Trustee, and because of Brian’s view that the

interpretation issues would still need to be resolved by the Court, Brian filed an application for directions on October 12, 2018. This is the Brian Henley Application referred to in Janet and Brian’s current request for their “wasted” solicitor and client costs. [ 102 ] The application sets out two questions for resolution: (

a) How many shares of Carpasia Investments Inc. (“ CII ”) that currently remain in the Estate of Alec G. Henley are to be distributed to each of the beneficiaries pursuant to paragraph 6(3)(

B) of the Alec G. Henley Will?; and (

b) Does the language in the codicils to the Alec G. Henley Will with respect to Carpasia Properties Inc. (“ CPI ”) apply to the shareholder loan that is repayable by CPI to CII? [Bold in original.] [ 103 ] The application later details the issues surrounding the determination of the CI assets for the purposes of the share allocation. It sets out the background to the dispute: 10. The Alec G. Henley Will consists of an attested Will dated November 14, 2001 together with the following codicils: (

i) a codicil dated May 6, 2010 (the “ First Codicil ”); (ii) a codicil dated July 19, 2010 (the “ Second Codicil ”); and (iii) a handwritten codicil dated September 20, 2006 (hereinafter referred to as the “ Third Codicil ” and together with the First Codicil and the Second Codicil as the “ Codicils ”). … 12. Letters of Probate were granted to Catherine M. Henley on August 29, 2013 in respect of the Will made by Alec G. Henley dated November 14, 2001 together with the First Codicil and the Second Codicil thereto. The Alec G.

Henley Estate was given Estate No. 2013 01 E 12144 in the Probate Registry of this Honourable Court. 13. At the time that Catherine M. Henley applied for Letters of Probate in respect of the Alec G. Henley Estate, it appears that she was not aware of the existence of the Third Codicil, which deals, inter alia , CPI. [Bold in original.] [ 104 ] And further:

25. There are several issues on which the Co-Executors disagree 2-2, all of which ultimately concern: (

i) The proper disposition of the CII Shares owned by Alec G. Henley in accordance with the Alec G. Henley Will; and (ii) whether the provisions of the Codicils relating to CPI also apply to the CPI Loan, so that the CPI Loan must be assigned by CII in equal shares to each of Janet Henley, John Henley and Christopher Henley in the same manner as the CPI Shares. … 28. The Codicils repeal and replace paragraph 6(3)(

D) of the Will executed by Alec G. Henley on November 14, 2001, which purported to direct the disposition by CII of its CPI Shares to each of Brian Henley, Janet Henley, John Henley and Christopher Henley in equal shares.

The subsequent Codicils, however, direct an equal distribution of the CPI Shares to Janet Henley, John Henley and Christopher Henley to the exclusion of Brian Henley. [ 105 ] The application goes on to assert the binding effect of the “agreement” reached at the December 4, 2016 meeting of the Executors. [ 106 ] It is clear from the application that Brian is placing all the codicils on an equal footing and accepting that the codicils exclude him from the bequest of the CP shares and, further, that the

interpretation issue raised by the codicils is whether or not the “interest” in CP extends to the CP loan. Nowhere is there any suggestion or recognition of the view that only the 2006 codicil should be looked at and that issues of

interpretation should be resolved with no reference to the later probated documents. [ 107 ] Brian’s brief of argument supporting his application and responding to Janet’s Public Trustee application was filed on October 15, 2018. On the

interpretation issues, Brian’s brief says, in part: 33. The attested Last Will and Testament executed by Alec G. Henley and the First Codicil and the Second Codicil thereto are annexed to the Letters of Probate in the Estate of Alec G. Henley Will which are reproduced in Exhibit ‘1’ to the Affidavit of Brian Henley. 34. The Third Codicil executed by Alec G. Henley (which predated the First Codicil and the Second Codicil and which are not probated) is reproduced as Exhibit ‘2’ to the Affidavit of Brian Henley. … 38. The Codicils essentially repeal and replace paragraph 6(3)(

D) of the Alec G. Henley Will, which directed that the shares of CPI (the “ CPI Shares ”) that are owned by CII be transferred to each of Brian Henley, Janet Henley, John Henley and Christopher Henley in equal shares. The Codicils remove Brian Henley as a beneficiary in respect of the CPI Shares that are owned by CII. … 48. Both the CPI shares and the CPI Loan were historically noted on the balance sheet of CII as assets of CII. However, John Henley and Christopher Henley now contend that provisions of the Alec G. Henley Will directing the ultimate disposition of the CPI Shares to three children of Alec G.

Henley created a trust such that, as soon as Alec G. Henley died, those children became the beneficial owners of the CPI Shares (and the CPI Loan) and that CII was thus converted into a mere trustee for the beneficiaries in respect of such property. Therefore John Henley and Christopher Henley characterize the CPI Shares and the CPI Loan as “trust assets” and not “CII Assets” for the purposes of paragraph 6(3)(

B) of the Alec G. Henley Will. … 57. The subsequent requirement under the Codicils (which modify paragraph 6(3)(

D) of the Alec G. Henley Will) is that Janet Henley, John Henley and Christopher Henley each receive one third of the CPI Shares. There is no incongruity between giving effect to paragraph 6(3)(

B) regarding the disposition by the Alec G. Henley Estate of the CII Shares and the provisions of the Codicils regarding the disposition by CII of the CPI Shares. Both provisions should therefore be given their full effect.

[References to materials in original omitted.] [ 108 ] It is apparent that Brian understood the trust argument of John and Christopher—as reflected in their brief—to be based on the fact that since the “ultimate disposition” of the CP shares under the will and codicil was to Janet, John and Christopher and not to the four beneficiaries of the CI shares, the CP shares (and loan) should not therefore be considered as CI assets for purposes of allocating the CI shares.

This reflects the earlier position espoused by both John and Christopher. [ 109 ] The brief shows no indication or appreciation that John and Christopher’s “mere trustee” argument is dependent on a distinction between the 2006 and 2010 codicils—the vesting argument based “at my death” compared to “upon our deaths …”. The brief refers to all three codicils without differentiation. (I note also that all three codicils were attached as exhibits to Brian’s affidavit.

To the extent that John and Christopher assert that their “only 2006” position is supported by the absence of the 2010 codicils from Janet’s April 2018 list of exhibits, their inclusion in Brian’s more recent affidavit takes away any such support.) [ 110 ] Read as a whole, Brian’s brief stands contrary to the suggestion that as of October 15, 2018, there was an “implicit agreement” among counsel that the 2006 codicil was the only “operative” codicil. [ 111 ] Brian’s application was called on the return date of October 19, 2018.

Counsel for Brian explained to the Court why the application was filed and discussed how to make best use of the November 1 and 9, 2018, dates then scheduled. [ 112 ] After some initial discussion between the Court and counsel concerning an indirect gift—the bequest by Alec Henley of assets held by CI—there was a brief exchange with counsel for John and Christopher regarding the direct bequest of the CP shares: THE COURT: Q. That’s not an issue. I didn’t think it was, and I wanted to make sure. MR. BRUCE: Q. No, the question may come into play whether or not the timing of the transfer or vested interests.

As you can see, we’ve raised the issue of whether or not – THE COURT: Q. Is that a question of—that’s a question of valuation for the purposes of the distribution of the CII shares? MR. BRUCE: Q. No, no, no, no. This is the—for purposes of when in fact the interest in the CPI shares, in the three children, when did that vest and how is it—so, that becomes an issue as well. THE COURT: Q. Why is that an issue? MR. BRUCE: Q. It goes with respect to the timing of what should be concluded—included in the CII valuations. THE COURT: Q. Right, so a valuation issue? MR. BRUCE: Q.

Okay. [2] [ 113 ] The Court then outlined its understanding of the issues:

THE COURT: Q. The

interpretation issues among you I think are by and large common. By and large, I mean you’ve got an issue about—not only

interpretation. You’ve got an issue as to whether or not the meeting of December 4, ’16 resulted in a—was a binding deal once and for all as between the executors. You’ve got an issue as to whether or not the 50 percent interest in Carpasia Properties, and the codicil refers to the shares and to the receivable from Carpasia Properties. You’ve got an issue as to whether or not the valuation of the CI shares for purposes of distribution includes the CP shares and the receivable.

You’ve got an issue as to whether or not the valuation of the CI shares includes the liabilities of CI, and you’ve got a side issue on the amount of the shareholder’s loan between CI and CP as to whether or not it includes a couple of payments made by Mr. Henley, blah, blah, blah, blah. And that’s really nickel and diming out on the side I would think.

Does the resolution of those issues require any evidence? [3] [ 114 ] After considerable discussion, it was decided that Janet’s application for the appointment of the Public Trustee would be heard on November 1, 2018, a decision given on November 7, 2018, and, depending on the outcome, a determination then made as to what, if anything, should be heard on November 9, 2018. [ 115 ] The application for removal of the Public Trustee was argued on November 1, 2018. In the course of looking for a document, this exchange occurred: MS. SAUNDERS: [Counsel for Brian.] Q.

Yes, I think we just—some pages didn’t make it through the scan. MR. BRUCE: [Counsel for John and Christopher.] Q. All I have is the – THE COURT: Q. The Tab 2 in my one is one of the codicils. MR. BRUCE: Q. Codicil. THE COURT: Q. Is a codicil. It didn’t – MR. BRUCE: Q. Yes. THE COURT: Q. The one that didn’t get probated. MR. BRUCE: Q. That’s right. MS. SAUUNDERS: Q. And we’ll just give Mr. Bruce – MR. BRUCE:

Q. That’s the one that we’re dealing with which is the holograph, right? MS. SAUNDERS: Q. Do you have a full copy there? MR. WRIGHT: [Counsel for Brian.] Q. Sorry, it’s Tab 1. MS. SAUNDERS: Q. Tab 1. THE COURT: Q. Yes. [4] [ 116 ] Later, counsel for Brian said: MS. SAUNDERS: Q. But we still would say that, you know, the fact that they resiled from it, okay, so they have a difference of opinion in terms of what Alec G. Henley meant, what that provision means and what the codicils mean. [5] [ 117 ] And later, this exchange between counsel for Brian (Mr. Wright), counsel for John and Christopher (Mr.

Bruce) and the Court: MR. WRIGHT: Q. I’ve spoken with counsel, Judge Orsborn. So, in his submissions my friend, Mr. Avis, raised this question of or the matter of Brian Henley challenging codicils to Alec G. Henley’s will. I can just clarify that that did happen. There was some question after letters of probate were obtained about whether those codicils were in conformity with the requirements of the Wills Act , that they be properly witnessed.

After some investigation, it looked like there was some doubt, but then, the handwritten holograph codicil materialized, and Brian Henley has not made an issue of the validity of the codicil since that time. And I think everybody agrees about what the codicils say, it’s just how is that language to be applied? THE COURT: Q. What does interest mean? Okay, thank you. MR. BRUCE: Q. Yes, just to follow up on that, I believe we are operating with the understanding, certainly it’s my understanding, that the holograph codicil is the one that’s operative with respect to the directions to the estate.

That’s my understanding. THE COURT: Q. Say that again? MR. BRUCE: Q. The holograph codicil – THE COURT: Q. Yes?

MR. BRUCE: Q. - is the one that is operative here for discussion purposes in terms of the dealing with the—if we get to

interpretation because there’s a distinction between the different—the different codicils say different things. THE COURT: Q. I understand. MR. BRUCE: Q. Okay. THE COURT: Q. Yes. MR. BRUCE: Q. And it’s my understanding that based on the application that was made by Janet Henley, she only included the holograph will or the holograph codicil – THE COURT: Q. Right. MR. BRUCE: Q. - as the one that was operative with respect to the directions to the estate. THE COURT: Q. As opposed to anything to do with the removal application you mean or – MR. BRUCE: Q.

Or as respect to that the other codicils are not applicable to any deliberations by the Court, that the one that’s operational with respect to directions to the estate that may take—that have to be done are with respect to the holograph codicil. THE COURT: Q. Yes, okay. MR. BRUCE: Q. Or derived from that. THE COURT: Q. So, if and when we

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