By: Suzana Popovic-Montag
If a beneficiary named in a will predeceases the testator, typically one of three things will happen to their testamentary gift:
- If the will names an alternate beneficiary, the alternate will inherit the gift so long as they survive the testator;
- If there is no alternate beneficiary, however, the gift will either:
When determining the fate of such gifts historically, it has been uncertain if the court could go beyond reviewing the language used in the testator’s will to determine whether the anti-lapse rule applied, whether the gift lapsed, or whether there was an alternate beneficiary, unless the will was overtly unclear or ambiguous. However, the law has evolved so that circumstances surrounding the making of a will may now be considered from the outset whenever a will is interpreted. Accordingly, the armchair rule is available to assist the court in determining a testator’s intentions whenever it is necessary to determine the fate of a testamentary gift intended for a beneficiary who predeceased the testator. This article focuses specifically on how this updated approach to will interpretation impacts the application of the anti-lapse rule, offering a primer on both the armchair rule and the anti-lapse rule, and then reviewing recent case law on point. Lastly, the fact that a consistent approach should now be taken when determining whether the doctrine of lapse or the anti-lapse rule applies, is discussed.
A Primer on the Armchair Rule
As noted by the Court of Appeal for Ontario: “When interpreting a will, a court’s task can be stated simply: it is to determine the testator’s actual or subjective intention as to how [they] intended to dispose of [their] property.”[3] To make this determination, the court has often utilized the armchair rule to consider surrounding circumstances known to the testator around the time that the will was made.
The presiding judge essentially sits in the “testator’s armchair” and reads the will from the testator’s vantage point to ascertain their testamentary intentions and interpret the will.[4] In assuming the same knowledge as the testator, the court may take into consideration “the nature and extent of [their] assets, the makeup of [their] family, and [their] relationship to its members.”[5] The court may also consider the character and occupation of the testator.[6]
In light of the Court of Appeal’s recent decision in Ross v Canada Trust Company, it is now clear that the armchair rule is “an over-arching framework” that applies whenever a will is interpreted in Ontario.[7] This decision constitutes a marked shift from previous jurisprudence, which indicated that the armchair rule could only be utilized if a will was vague or ambiguous on its face, such that the testator’s intentions could not be ascertained from simply reading the will.[8]
Substitutional Gifts and the Anti-Lapse Rule
The origin of the anti-lapse rule dates back to the Wills Act, 1837.[9]This provision “[alters] the common law to avoid the lapse of gifts to close relatives of the testator,”[10] thereby “[stepping] in to fill a gap in a will.”[11]
In Ontario, if a beneficiary predeceases the testator, their gift may be inherited by a substitute beneficiary pursuant to section 31 of the SLRA. This provision only applies to devises or bequests left to the testator’s child, grandchild, brother or sister, if they predecease the testator and leave behind a spouse or issue who survives the testator. Under those circumstances, the gift will be distributed directly to the persons who would inherit the beneficiary’s estate on intestacy, but only if the anti-lapse rule is not ousted by the expression of “a contrary intention” in the testator’s will.[12]
Jurisprudence Applying the Armchair Rule and the Anti-Lapse Rule
In Devonport v Devonport, the most recent Ontario case dealing with the anti-lapse rule, the Superior Court of Justice affirmed that when a beneficiary predeceases the testator and it is necessary to determine whether section 31 of the SLRA applies, the armchair rule is to be utilized at the outset to ascertain the testator’s intentions.[13]
The will in Devonport divided the residue of the estate equally between the testator’s two children, and also left a piece of real property to each child “absolutely.” Because the testator was predeceased by her son, one of the issues before the court was whether the anti-lapse rule applied to the gift of property to him or whether the gift had lapsed, in which case it would fall into the residue of the estate and be inherited by the daughter. The daughter’s position was that the anti-lapse rule did not apply because the will contained a contrary intention, demonstrated by the fact that the testator intended to treat her children equally throughout the will, testamentary gifts were only left to the testator’s children and deceased spouse, and that the spouses of her children were intentionally excluded.[14] In making these arguments, the daughter also pointed to evidence of surrounding circumstances as per the armchair rule.
Despite these arguments, the court found that the anti-lapse rule applied. Justice Rees held that the testator intended to bequeath the property to her son absolutely, and that the testator had “turned her mind to what would happen if one or the other of her children predeceased her,” deliberately choosing to treat the bequests of property differently than the residue of her estate.[15] The court also noted factors to be considered when determining whether a will demonstrates a contrary intention that would oust the application of the anti-lapse rule, including “the totality of the will, the language used in the will, and the surrounding circumstances surrounding the creation of the will.”[16]
Admittedly, the outcome of this case did not turn on any surrounding circumstances at the time the will was made. Nevertheless, this case is noteworthy with respect to the armchair rule in two ways. First, as previously noted, Justice Rees confirmed that, when determining whether the anti-lapse provision has been ousted, the court is to consider surrounding circumstances.[17] Second, Justice Rees confirmed that, despite this new approach to will interpretation, direct extrinsic evidence of the testator’s intent remains largely inadmissible.[18]
While the Ontario Court of Appeal has not yet specifically affirmed that surrounding circumstances are to be considered when determining whether the anti-lapse rule applies, this approach was recently endorsed by the Alberta Court of Appeal. Last year, in Schneider v Homenick, that Court held that “[i]t is no longer the case that the court must find ambiguity in a will before it may examine extrinsic evidence,” and went on to confirm that armchair evidence is admissible when determining whether the anti-lapse rule applies.[19] This decision is significant, as the application of both the armchair rule and the anti-lapse rule is not often considered on appeal. Moreover, the law has changed since this issue was last addressed by an appellate court in Mitchell Estate v Mitchell Estate. In that case, the Nova Scotia Court of Appeal held that it was unnecessary to consider surrounding circumstances because the testator’s intent was apparent from the will itself,[20] consistent with how the armchair rule was previously utilized in Ontario.
There is a distinction as to the basis on which the courts applied the armchair rule in Devonport and Schneider that may merit consideration, however. Whereas the armchair rule is a “judicially developed rule of construction” in Ontario,[21] it is legislated in Alberta. That province’s wills legislation expressly requires a will to “be interpreted in a manner that gives effect to the intent of the testator” and permits the admission of “evidence as to the meaning of the provisions of the will in the context of the testator’s circumstances at the time of the making of the will.”[22] Ultimately, because Alberta’s legislative provision appears to be consistent with the law in Ontario with respect to the armchair rule and the consideration of surrounding circumstances to determine testamentary intentions, the court’s decision in Schneider may be a useful precedent for Ontario lawyers.[23]
A Unified Approach to the Doctrine of Lapse and the Anti-Lapse Rule
Utilizing the armchair rule at the outset when determining whether the anti-lapse rule applies, as demonstrated by the court’s decision in Devonport,[24] is also a noteworthy development because it unifies the approach to be taken by the court when determining the fate of a gift left to a beneficiary who predeceased the testator. It is now clear that surrounding circumstances are to be considered both when determining whether the anti-lapse rule applies, and whether the doctrine of lapse applies.
The application of the anti-lapse rule and the doctrine of lapse was not always consistent in this way. Before the Court of Appeal decided Ross and confirmed that the armchair rule is to be utilized, even if a will is not ambiguous or unclear on its face,[25]the Superior Court of Justice turned to the armchair rule in a number of cases to determine whether residuary testamentary gifts lapsed.[26] In these cases, residuary beneficiaries named in the testators’ wills had predeceased the testators, and the wills did not expressly name any alternate residuary beneficiaries. Typically, when a gift of residue lapses, it passes on intestacy unless it is either a class gift or the testator’s will expresses a contrary intention.[27] By utilizing the armchair rule to consider surrounding circumstances and ascertain the testators’ actual intentions, the Superior Court of Justice was able to find a contrary intention and held that the residuary gifts in these cases did not lapse and thereby did not pass on intestacy.
In the past, this body of jurisprudence has been criticized on the basis that “[i]t is a relatively easy matter of drafting to expressly provide for a contrary intention.”[28] While the court’s approach to will construction in these cases may still be seen as novel, the court’s overall approach to determining whether the doctrine of lapse applies is now sound in light of the Court of Appeal’s decision in Ross – a contrary intention can be ascertained by considering the surrounding circumstances when the will was made in addition to the language used in the will itself.[29] Practitioners should not need to take a different approach to will interpretation depending on whether they are considering the application of the doctrine of lapse or the anti-lapse rule.
The Takeaway
In keeping with the principle that evidence of surrounding circumstances is to be considered at the outset when interpreting a will to determine the testator’s intentions, the armchair rule ought to be utilized when determining how to distribute a testamentary gift left to a beneficiary who has predeceased the testator, regardless of whether the will is unclear or ambiguous on its face. There is now authority from both the Superior Court of Justice and the Alberta Court of Appeal confirming that the armchair rule can, in fact, be utilized when determining whether the anti-lapse rule applies. Case law also indicates that this approach is to be taken when considering the application of both the common law doctrine of lapse and the anti-lapse rule.
[1] RSO 1990, c S.26, s 31 [SLRA].
[2] Devonport v Devonport, 2024 ONSC 6764 [Devonport] at para 34.
[3] Ross v Canada Trust Company, 2021 ONCA 161 [Ross] at para 36; Trezzi v Trezzi, 2019 ONCA 978 at para 13.
[4] Ross, ibid at para 38, citing Ian M. Hull & Suzana Popovic-Montag, Feeney’s Canadian Law of Wills, 4th ed (Toronto: LexisNexis, 2020) (loose-leaf) [Feeney’s] at §§10.45-10.46.
[5] Ross, ibid at para 39; Devonport, supra note 2at para 18.
[6] Devonport, ibid at para 23.
[7] Ross, supra note 3 at para 41. See also Zindler v The Salvation Army et al, 2015 MBCA 33 at para 14.
[8] Ross, ibid at para 40. See also Dice v Dice Estate, 2012 ONCA 468 at para 37.
[9] (UK), c 26, s 33.
[10] Doucette v Fedoruk Estate, 1992 CanLII 8488 (MB CA) at para 23.
[11] Schneider v Homenick,2024 ABCA 344 [Schneider] at para 38.
[12] SLRA, supra note 1, s 31.
[13] Supra note 2 at paras 16-19. For a brief summary of this case, see Suzana Popovic-Montag, “The Top Wills & Estates Cases of 2024” (18 Dec 2024), online (blog): Hull & Hull <https://hullandhull.com/wp/2024/12/the-top-wills-estates-cases-of-2024/>.
[14] Ibid at para 24.
[15] Ibid at paras 5, 25-31.
[16] Ibid at para 33.
[17] Ibid at para 42.
[18] Ibid at paras 20-23, 35-36. Evidence from the testator’s solicitor submitted by the daughter was deemed inadmissible because it was direct evidence of the testator’s intentions.
[19] Supra note 11 at para 30. The Court of Appeal upheld the chamber judge’s decision, confirming that the anti-lapse rule had not been ousted, as the will did not express a contrary intention.
[20] 2004 NSCA 149at paras 27-29. The court also indicated that surrounding circumstances could be considered to determine the testator’s intent in terms of the language used in the testator’s will, with surrounding circumstances being used to specifically determine whether “the ordinary and grammatical sense of the words” applied: see para 19.
[21] Dors et al v The Public Guardian and Trustee,2023 ONSC 1503 at para 33.
[22] Wills and Succession Act, SA 2010, c W-12.2, s 26.
[23] In Schneider, supra note 11 at paras 24-25,the Alberta Court of Appeal directs that section 26 is to be read “sequentially together” with the anti-lapse provision so that the first step is to determine the testator’s subjective intention, and the second step is to “determine whether or not there is a contrary intention, within or outside the will”. This approach is consistent with the Ontario Court of Appeal’s direction in Ross, supra note 3 at para 41, to treat the armchair rule as an over-arching framework that applies at the outset of will construction, even if a will is not ambiguous.
[24] Supra note 2.
[25] Supra note 3.
[26] See Mladen Estate v McGuire, 2007 CanLII 10904 (Ont SC); Frohlich Estate v Wedekind, 2012 ONSC 3775.
[27] Kapousouzian Estate v Spiak, 2014 ONSC 2355 at para. 10.
[28] Feeney’s, supra note 4 at §13.21. See also Gilchrist v Gilchrist, 2023 SKKB 187; aff’d (8 February 2024) (Sask CA)(unreported). The Court of Appeal’s decision can be found online: see Albert Oosterhoff, “Armchair Principle Not Used to Save Undisposed of Gift” (18 March 2024), online (blog): WEL <https://welpartners.com/blog/2024/03/armchair-principle-not-used-to-save-undisposed-of-gift/>.
[29] See Re: Estate of Constance Evelyn Stevenson, 2022 ONSC 6416 at paras 35-37. For a more in-depth discussion of how the armchair rule has evolved and its application when determining whether a gift has lapsed, see Albert Oosterhoff, “Armchair Principle Not Used to Save Undisposed of Gift” (18 March 2024), online (blog): WEL <https://welpartners.com/blog/2024/03/armchair-principle-not-used-to-save-undisposed-of-gift/>.