Zindler v. The Salvation Army et al., 2015 MBCA 33

Citation: Zindler v. The Salvation Army et al., 2015 MBCA 33 Date: 20150413 Docket: AI14-30-08217 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Mr. Justice William J. Burnett Mr. Justice Christopher J. Mainella BETWEEN : MARVIN SHEPPY ZINDLER ) ) C. R. Huband (Applicant) Appellant ) for the Appellant ) - and - ) A. L. Southall ) for the Respondents THE SALVATION ARMY, ) THE JEWISH FOUNDATION ) Appeal heard: OF MANITOBA, HEART AND STROKE ) December 2, 2014 FOUNDATION OF MANITOBA INC. ) AND CANCER CARE MANITOBA ) Judgment delivered: ) April 13, 2015 (Respondents) Respondents ) BEARD J.A. I. THE ISSUES [ 1 ] This appeal involves the

interpretation of a clause in the last will and testament of Isabelle Alice Bereskin (the testatrix). The issues to be resolved are: (

i) What is the applicable standard of review on an appeal regarding the

interpretation of the words in a testamentary document? (ii) Did the application judge err in finding that the words “monies in the bank account of [Margbell Holdings Ltd.] standing to its credit at the date of my death” included monies invested with Investors Group? This raises two issues: (

i) whether the application judge applied the correct law; and (ii) whether the application judge made any palpable and overriding errors in applying the facts to the law. (iii) Did the application judge err in making an order for costs without first hearing submissions from the parties? II. THE FACTS [ 2 ] Mr. Zindler is the nephew of the testatrix and was named the executor of her estate in her various testamentary documents. The only documents relevant to this appeal are a will executed in 1990 and a codicil to that will executed in 1995 (together referred to as the will).

The relevant provision of the 1990 will is para. 4(d), which states, in part: To transfer to my dear nephew, Marvin Zindler … all my shares in Margbell Holdings Ltd. (which Company owns the property on McPhillips Street) … for his sole use absolutely and forever. [ 3 ] The relevant provision of the 1995 codicil is para. 1, which states: I HEREBY AMEND paragraph 4 of my said Last Will and Testament as aforesaid to provide that although I am transferring all my Shares in Margbell Holdings Ltd. to my dear nephew … that the said transfer shall not include any monies in the bank account of the said Company standing to its credit at the date of my death, and wish to instruct my Executor that those monies shall be paid out at the

date of my death and form part of the cash assets of my estate, to be divided among the various beneficiaries as provided in my said LastWill and Testament. III. THE STANDARD OF REVIEW [4] Mr. Zindler argues that the standard of review for the

interpretation of a will is that of correctness, in that theapplication judge was either right or wrong in his

interpretation. The respondents take the position that the appeal relates to findings ofmixed fact and law and, as such, is to be determined on the standard of palpable and overriding error, consistent with the Supreme Courtof Canada’s decision in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. [5] Historically, many appellate courts dealing with the

interpretation of testamentary documents have cited the decision ofthe Supreme Court of Canada in Alberta Giftwares Ltd. v. The Queen, (SCC), [1974] S.C.R. 584, for the principle thatthe legal effect to be given to the language employed in a will is a question of law. (See, for example, Wernicke Estate, Re, 2011 SKCA95 at para. 10, 385 Sask.R. 7; Prevost Estate v.

Prevost Estate, 2013 NSCA 20 at paras. 8, 16, 327 N.S.R. (2d) 152; and MacDonald v.McCormick, 2009 NSCA 12 at para. 60, 274 N.S.R. (2d) 258.) Alberta Giftwares was a criminal case regarding an allegation of falseadvertising in which the Supreme Court of Canada made a passing comment that the legal effect to be given to the language employed ina will, like that in a contract, is a question of law (at p. 588): … [I]n construing a will, deed, contract, prospectus or other commercial document, the legal effect to be given to the languageemployed, is a question of law …. [6] This same historical approach was applied to the

interpretation of contracts, being that the standard of review incontractual

interpretation was always considered to be a question of law reviewable on appeal on a standard of correctness. (See King v.Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80 at para. 20, 270 Man.R. (2d) 63.) In King, Steel J.A. held thatthat approach had been abandoned in favour of the principles in Housen, so that the

interpretation of the language of a contract in thecontext of the factual matrix is now considered to be a question of mixed fact and law except if a question of law can be separated fromthe factual matrix, in which event, the issue can be treated as a question of law (see para. 25). [7] Steel J.A.’s decision has recently been adopted by the Supreme Court of Canada in Sattva Capital Corp. v. CrestonMoly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633. Rothstein J., for the court, stated (at para. 50): With respect for the contrary view, I am of the opinion that the historical approach should be abandoned. Contractual

interpretationinvolves issues of mixed fact and law as it is an exercise in which the principles of contractual

interpretation are applied to the words ofthe written contract, considered in light of the factual matrix. [8] How does this apply to the

interpretation of a will? As will be seen later in these reasons, the modern approach to theinterpretation of a will is to determine the subjective intention of the maker of the will. This is done by looking at the words used in thecontext of the circumstances known to the maker at the time of signing the document, whether or not the words are ambiguous, to assistin determining the maker’s intention. (See paras. 12-16 herein.) [9] This is very similar to the modern approach to the

interpretation of a contract, which is to give effect to the intention ofthe parties as expressed in their agreement, the goal being to determine the intent of the parties at the time of the execution of thecontract. To do so, the contract must be considered in the context of the surrounding facts or the “factual matrix” (see King at paras. 58-73). [10] Given that both contracts and wills are now to be interpreted in the context of their factual matrix, I am of the opinion thatthe analysis of the application of the Housen principles to the

interpretation of contracts, as set out in King (see paras. 19-29) and Sattva(see paras. 42-55), applies equally to the

interpretation of a will. To the extent that the

interpretation of a will is to be done in the contextof the surrounding circumstances, that involves a question of mixed fact and law, as explained in Housen, unless there is an extricablepoint of law, which is then subject to a correctness standard. (See King at para. 21.) Thus, the applicable standard of review regardingthe

interpretation of a will is now that of palpable and overriding error. IV. DID THE APPLICATION JUDGE ERR IN FINDING THAT THE WORDS “MONIES IN THE BANK ACCOUNT OF[MARGBELL HOLDINGS LTD.] STANDING TO ITS CREDIT AT THE DATE OF MY DEATH” INCLUDED MONIESINVESTED WITH INVESTORS GROUP? (

i) Did the application judge apply the correct law? [11] The application judge found that, in interpreting a will, the object was to determine the testator’s actual or subjectiveintent, as opposed to an objective intention presumed by law. In doing so, he looked not only at the words of the will, but he alsoconsidered the surrounding circumstances as known to the testatrix. [12] While Mr. Zindler does not take issue with the finding that the object was to determine the testatrix’s actual or subjectiveintent, he argues that there was no reason for the application judge to stray from the ordinary meaning of the words to do so. He argues

that there is a presumption that words will be interpreted in their ordinary, literal meaning, which the application judge failed to do. [13] James MacKenzie, Feeney’s Canadian Law of Wills, loose-leaf (consulted on 18 March 2015) 4th ed. (Markham: LexisNexis Canada Inc., 2000) indicates that, historically, there have been three approaches to testamentary

interpretation: “theordinary meaning,” which assumes that the testator intended the ordinary meaning of the words without looking at any surroundingcircumstances; “the armchair rule,” which looks at the words from the perspective of the testator, taking into account the circumstancesknown to the testator at the date of the document; and “the ambiguous meaning,” which states that the armchair rule can only be appliedif the words are ambiguous after the application of the ordinary meaning rule. [14] Feeney’s concludes that “the most recent trend in Canadian cases seems to indicate that evidence of surroundingcircumstances should be taken into account in all cases before a court reaches any final determination of the meaning of words” (at para.10.54).

This is true even if the words, themselves, do not appear to be ambiguous or unclear. (See Feeney’s at para. 10.1; Haidl et al. v.Sacher et al., (1979), (SK CA), 2 Sask.R. 93 (C.A.); Robinson Estate, Re, 2011 ONCA 493 at para. 24, 282 O.A.C.189; Lubberts Estate, Re, 2012 ABQB 506 at para. 14, 548 A.R. 1; Bergey Estate, Re (1995), (MB KB), 103 Man.R.(2d) 202 at para. 12 (Q.B.); and Eliuk Estate, Re, 2010 MBCA 58 at para. 5, 258 Man.R. (2d) 6.) [15] Thus, the application judge made no error of law in regard to the law that he applied or the factors that he considered. (ii) Did the application judge make any palpable and overriding errors in applying the facts to the law? [16] The application judge stated that the Margbell investments were held at National Bank Financial Ltd. at the date of thecodicil, when in fact they were with Investors Group.

While this error is palpable, it is hardly overriding, given that neither institution isa bank within the meaning of the Bank Act, S.C. 1991, c. 46, and the funds at either institution would not be held in a bank account, asthat term is used by Mr. Zindler. Thus, this error did not affect the application judge’s analysis or his decision. [17] When interpreting the words of the will, the application judge considered the correct principles of

interpretation and setout the position of the parties. He then looked at the words that were used in the will and the circumstances as known to the testatrix atthe date of the codicil. In particular, he found that Margbell had no bank account at the date of the codicil and that the testatrix wasusing her personal account to write cheques for the business expenses of Margbell. The only institution at which Margbell had anymoney at that time was at Investors Group.

He also set out the positions of the parties. [18] Based on these facts, it was open to the application judge to interpret the words of the will so as to refer to the investmentsat Investors Group, and to find that the monies invested with Investors Group were excluded from the gift of the Margbell shares to Mr.Zindler. There was ample evidence to support this finding of fact, with the result that he committed no error, and certainly no palpableand overriding error, in so finding. V. COSTS [19] Mr.

Zindler alleges, for the first time in his factum, that the application judge erred in making an award of costs withoutfirst permitting the parties to make submissions in that regard, even though, at the end of the hearing before the application judge, hereserved the right to make submissions on costs following the release of the application judge’s decision.

His position is that he shouldhave received solicitor-client costs, rather than party and party costs. [20] This issue is not set out as a ground of appeal in the notice of appeal, so I am of the view that the matter is not properlybefore the court and I would decline to decide the issue. VI. DECISION [21] For the reasons set out above, I would dismiss the appeal with party and party costs on the appeal to Mr. Zindler and oneset of party and party costs to the respondents, payable from the estate. J.A. I agree: J.A. I agree: J.A.