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Estates - Wills - Rectification

. Ihnatowych Estate v. Ihnatowych

In Ihnatowych Estate v. Ihnatowych (Ont CA, 2024) the Court of Appeal considers the use of extrinsive evidence to correct will errors:
[36] As for the appellants’ argument about the evidence and standard of proof required, there is no question that extrinsic evidence may be admitted to establish an error in a will when the evidence comes from the solicitor who drafted the will, made the error and can testify to the testator’s instructions: Robinson [SS: Re Estate of Blanca Esther Robinson, 2010 ONSC 3484], at para. 26.

[37] The application judge correctly applied this standard and properly assessed the evidence against it. He noted that evidence of the circumstances surrounding the making of a will may be considered even if the words in the will appear to be clear on first reading, that only extrinsic evidence of the testator’s intention in making the will and the testator’s relationship to the names and potential beneficiaries are admissible, and that the court’s task is corrective and rectification must be used with caution.

[38] The evidence here met the test articulated in Fairmont Hotels of showing a “high degree of clarity, persuasiveness and cogency” such that rectification was appropriate. We say so for three reasons.

[39] First, the application judge found that John’s instructions regarding his Will were clear. John’s 2008 handwritten notes about his Will and Mr. Zarowsky’s handwritten notes of the instructions provided to him by John, supported Mr. Zarowsky’s evidence that John instructed him to prepare a will that transferred his assets upon his death to Ulana and Markian and their children only. There was no evidence that those instructions changed.

[40] Second, the application judge accepted Mr. Zarowsky’s admission that he did not carry out John’s instructions in the drafting of John’s Will in that neither the Grandchildren Clause nor the Residue Clause reflected John’s intention that his estate go only to Ulana and Markian and their children.

[41] Third, while the standard form will contemplated an equal distribution of the residue of his estate into as many equal shares as he had children who survived him and their children, there was evidence that John specifically intended to include Ulana and Markian but no evidence that he specifically intended to include Alexander and his children in his estate plan.

[42] Because the application judge’s conclusions are rooted in the evidence adduced on the application, they are entitled to appellate deference: Johnson v. Johnson, 2022 ONCA 682, 81 E.T.R. (4th) 7, at paras. 9, 15 and 20, leave to appeal refused, [2022] S.C.C.A. No. 444. We see no palpable and overriding error in the motion judge’s application of the evidence to the test for rectification of a will. The principle of testamentary freedom means that John was entitled to draft a will that excluded the appellants: Gironda v. Gironda, 2013 ONSC 4133, 89 E.T.R. (3d) 224, at para. 51 and Gefen at para. 38, citing Spence v. BMO Trust Co., 2016 ONCA 196, 129 O.R. (3d) 561, at para. 30, leave to appeal refused, [2016] S.C.C.A. No. 96.
. Ihnatowych Estate v. Ihnatowych

In Ihnatowych Estate v. Ihnatowych (Ont CA, 2024) the Court of Appeal considers the doctrine of 'rectifying' a will:
[6] On the application, the parties agreed on the legal principles applicable to rectification of a will as set out in Re Estate of Blanca Esther Robinson, 2010 ONSC 3484, at para. 24, aff’d 2011 ONCA 493, 106 O.R. (3d) 321, leave to appeal denied, [2011] S.C.C.A. No. 536.

[7] Robinson, at paras. 24-25, provides that rectification is primarily concerned with “preventing the defeat of the testamentary intentions due to errors or omissions by the drafter of the will” and may be employed, “where the testator’s instructions have not been carried out”. The court in that case, at para. 24, listed three circumstances in which a court will rectify a will where there is no ambiguity on the face of the will, and the testator has reviewed and approved the wording:
a. Where there is an accidental slip or omission because of a typographical error or clerical error;

b. Where the testator’s instructions have been misunderstood; or

c. Where the testator’s instructions have not been carried out.
....

ANALYSIS AND CONCLUSION

[22] The appellants claim that the application judge made an unprecedented application of the equitable doctrine of rectification. For the reasons that follow, we disagree.

[23] First, the application judge correctly invoked the third factor in Robinson to enable rectification, that is, where the testator’s instructions have not been carried out. This has been done in other cases.

[24] For example, in The Bank of Nova Scotia Trust Company v. Haugrud, 2016 ONSC 8150, 29 E.T.R. (4th) 195, at paras. 15-20 and 36, aff’d Welton Estate v. Haugrud, 2017 ONCA 831, at para. 2, the court concluded that the drafting lawyer misunderstood or failed to carry out the testator’s instructions when he referred in the will to an incorrect class of shares, despite the testator clearly setting out the proper class in his written instructions. The court therefore granted an order rectifying the will to ensure that it accurately reflected the testator’s intentions and instructions. Similarly, in Daradick v. McKeand Estate, 2012 ONSC 5622, 82 E.T.R. (3d) 324, at paras. 38-39 and 43-45, the court ordered rectification of a will where the lawyer took notes of the testator’s instructions that she wished for her daughter to receive the matrimonial home, but failed to include such gift in the will. Most recently, in Hofman v. Lougheed et al., 2023 ONSC 3437, 87 E.T.R. (4th) 263, at paras. 39-46 and 53-57, the court rectified a will to delete a clause, where the lawyer included a clause that excluded children born out of wedlock in accordance with his usual will-drafting practice which did not conform with the testator’s instructions.

[25] Accordingly, the application judge’s application of the equitable doctrine of rectification is not unprecedented.

[26] Second, the appellant claims the application judge erred by failing to apply the new test for rectification set out in Canada (A.G.) v. Fairmont Hotels Inc, 2016 SCC 56, [2016] 2 S.C.R. 720, at paras. 12-20, 34-38.

[27] The parties had agreed before the application judge that the Robinson case set out the correct test for rectification of a will, but the appellant now claims there is a new and different test in Fairmont that was not applied. That test is set out at paragraph 12 of Fairmont as follows:
If by mistake a legal instrument does not accord with the true agreement it was intended to record … a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties’ true agreement.
[28] The appellants have also taken issue with the quality of evidence that the application judge accepted. They claim that on the standard set out in Fairmont Hotels, there should be a presumption of validity and therefore clear evidence that leaves the court with little to no doubt about a mistake in order to rebut that presumption.

[29] We disagree that Fairmont Hotels sets out a new and different test for rectification of a will.

[30] The Fairmont Hotels case is distinguishable from the facts in this case as Fairmont did not involve a claim for rectification of a will that unilaterally bequeathed property to others. Rather, it involved a claim for rectification of an agreement between parties where the effect of the agreement was to produce an unintended tax consequence.

[31] The court in Fairmont Hotels held that rectification could only be used to correct an error in the recording of the agreement, not to rectify situations where an agreement produced an undesirable or unintended outcome, and invoked the concept of rectification “to restore the parties to their original bargain”.

[32] This holding in Fairmont Hotels is consistent with the principles in Robinson. As Belobaba J. held in Robinson, "Anglo-Canadian courts will not rectify a will to correct the testator's mistaken belief about the legal effect of the words he reviewed and approved."

[33] In this case, the question was not whether the Will had the intended legal effect – that is that John’s biological offspring would not be included as beneficiaries notwithstanding the wording that was used. Rather, rectification was available only on the basis that the Will did not conform to John’s instructions, that it did not accurately set out the specific bequests that John communicated to Mr. Zarowsky. Hence, the different outcome in Robinson. In that case, the drafting lawyer deposed that he believed that the testator did not direct her mind to the revocation clause in an Ontario will and did not intend her Ontario will to revoke her Spanish will. However, he had not received instructions to that effect. The court found that there was no error on the part of the lawyer because the Ontario will was drafted in accordance with the testator’s instructions. Accordingly, there was no drafting error and no basis for rectification of the Ontario will. In this case by contrast, the application judge found that the Will did not reflect John’s instructions and therefore, rectification was necessary.

[34] Given the parties’ agreement that Robinson provided the correct test for rectification of a will and the fact that applying the test in Fairmont Hotels would not require a different analysis or result, we do not give effect to this argument on appeal.

[35] For these reasons, we find the application judge made no unprecedented application of the equitable doctrine of rectification. Rather, he applied the correct test and considered the evidence required to seek rectification of the Will.

....

[43] Moreover, there is no evidence that the application judge confused will rectification with will interpretation. Rather, he held that it was not necessary to order an interpretation of the Will as John’s intentions in the Will were defeated by errors made by his lawyer in the Will and therefore rectification was appropriate.

[44] The application judge also correctly applied Lipson v. Lipson (2009), 52 E.T.R. (3d) 44 (Ont. S.C.), when considering the deletion and addition of words to correct an error in a will, by considering whether the Will reflected John’s intentions, reading the Will as a whole and in light of the surrounding circumstances. Rectification is concerned with errors in the recording of the true substance of the intention of the testator.


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Last modified: 29-02-24
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