Sometimes it is the most simple questions that are the most difficult. The Estates Act, R.S.O. 1990, c. E.21 provides that a person “having or pretending to have an interest in the property affected by the will” must be served with an Objection but not much more. Rule 75.01 of the Ontario Rules of Civil Procedure provides that an “estate trustee or any person appearing to have a financial interest in an estate may make an application under rule 75.06 to have a testamentary instrument that is being put forward as the last will of the deceased proved in such manner as the court directs.” Is a creditor a person with such an interest?
In Belz v. Mernick Estate (2000), 31 E.T.R. (2d) 27 (Ont. S.C.J.), Hailey J. held that the sort of “financial interest” that Rule 75 contemplates is a “beneficial interest”. There the context was an application for an Order Giving Directions. Belz v. Mernick Estate has been followed in a number of cases, mostly recently in Salzman v. Salzman, 2012 ONSC 1733 (Ont. S.C.J.).
The reason I raise the point is that I recently came across an interesting English judgment on point. Randall v Randall  EWHC 3134 (Ch.) featured a separation agreement whereby the husband was entitled to part of his former wife’s future inheritance from her mother that was over and above £100,000. The cynical amongst us might not be surprised to learn that the mother gave her daughter exactly £100,000 in the Will. A Motion was brought to determine a number of preliminary issues including whether the ex-husband could challenge the Will. The Court held he could not and traced the rule back to an old case, Menzies v Pulbrook and Kerr  2 Curt 846 (Prerogative Court), and through a series of cases up to the present day. The explanation was of course the same as Justice Hailey’s – an “interest in an estate is not the same as being interested in the estate, or having an interest that is connected to the estate” in the words of the judge. A creditor has an interest in getting paid, not establishing proper rights in the assets of the Estate by law and must confine himself accordingly.
Why should we have an interest in “interests”? We practice in a very old and well litigated field. “Pragmatic” solutions have always been sought by judges and the old cases feature a lot of learning. Given that just about everything is available on the Internet now, I suggest we go a step farther than being archivists. It is a salutary exercise to actually read these old cases and not dismiss them as so many people do as “old authority”. Do we really need to re-invent the wheel on a continuing basis?
The Courts in England and Wales are gradually adapting to relatively new substitute decisions legislation (somewhat analogous to, but in many ways different from Ontario’s Substitute Decisions Act).
In particular, the concept of "statutory wills" provides for a mechanism (in certain circumstances) where testamentary dispositions may be directed by a special court for incapable persons. Under the Mental Capacity Act 2005, which came into force in England and Wales in 2007, the Court of Protection must decide what would be in the person’s “best interests”. And some judges have decided that this includes how they would want to be remembered by their family: “For many people it is in their best interests that they be remembered with affection by their family and as having done ‘the right thing’ by their will.”
As recently reported on-line in the Telegraph, this somewhat controversial application of the concept of "best interests" may inadvertently give rise to opportunistic relatives benefiting from an estate in which the now incapable testator would never have wanted such person to share.
David M. Smith – Click here for more information on David Smith.
Listen to The Formal Passing of Accounts.
This week on Hull on Estate and Succession Planning, Ian and Suzana talk about the specifics of what happens when you have to go to court to formally pass accounts.