IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Fuller v. Fuller Estate, |
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2008 BCSC 702 |
Date: 20080402
Docket: S62657
Registry: Kelowna
Between:
Steven Lee Fuller
Plaintiff
And:
Geramy Hugh Harper, Executor of the Estate of Frederick Arnold Fuller
also known as Frederick A. Fuller and Frederick Fuller and Fred Fuller
and The Estate of Frederick Arnold Fuller also known as Frederick A. Fuller
and Frederick Fuller and Fred Fuller and Lynn Delle Robertson
Defendants
Before: The Honourable Madam Justice Beames
Oral Reasons for Judgment
In Chambers
April 2, 2008
| Counsel for the Plaintiff:
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T. Moore |
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| Counsel for the Defendant, G.H. Harper:
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R.E. Ross |
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| No other appearances |
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Date and Place of Hearing: |
April 1, 2008 |
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[1] THE COURT: Frederick Fuller died on April 19, 2003. The plaintiff is the only child of the deceased. The defendant, Geramy Harper, is the executor named in the deceased's Last Will and Testament dated March 5, 1996. The defendant, Lynn Robertson, is Mr. Harper's wife and the sole beneficiary named in the Will.
[2] The assets owned by the deceased at the time of his death were relatively modest: cash and other assets valued at approximately $90,000 and real property near Kelowna which is referred to in this action as “Lot 17”. Lot 17 was registered at the time of Frederick Fuller's death in the names of Frederick Fuller and Geramy Harper as tenants in common.
[3] The plaintiff commenced this action and applies now pursuant to Rule 18A for a declaration that Lot 17 is held in trust for the estate of the deceased, and for an order under the Wills Variation Act, making provision for the plaintiff from the estate.
[4] The defendant executor applies for a declaration that Lot 17 was erroneously registered in the Land Title Office in common tenancy, and rectifying the registration to one of joint tenancy between the deceased and himself in his personal capacity. He seeks a declaration that the plaintiff has no interest in Lot 17. He also opposes the Wills variation application and says that no provision should be made for the plaintiff from the estate. In the course of submissions yesterday, the plaintiff's counsel withdrew her opposition to the rectification of the registration of Lot 17, and consequently that relief sought by the executor is granted.
[5] By way of background, the plaintiff is presently 56 years of age. The deceased and the plaintiff's mother separated when the plaintiff was 12. Both before and after the separation, the deceased and the plaintiff had a very limited relationship; prior to separation because the deceased worked out of town and was rarely home, and after separation because there was little or no access exercised by the deceased to the plaintiff, who resided after separation for the most part with his maternal grandparents. When the plaintiff was 19, the deceased contacted him and the two met on a couple of occasions over the next couple of years. The plaintiff invited the deceased to his wedding, which took place in February 1973, but the deceased did not attend. The deceased did not contact the plaintiff again until late 1974 when he arrived unannounced and asked to meet his grandson, the plaintiff's son, who was born in March 1974. For approximately two weeks there was contact between the plaintiff and the deceased, and then contact ceased again. In 1977, the plaintiff's daughter was born.
[6] In 1992, the plaintiff was contacted by his mother, who advised him that the deceased wished to visit and to reconnect with the family. The plaintiff, who was sceptical about welcoming the deceased back into his life, as a result of the deceased's past conduct, hesitantly agreed. The deceased did visit, explained to the plaintiff that he had had a heart attack which had put his life into perspective, and said that he wanted to make it right with the plaintiff's family in case he did not have much longer to live. The visit lasted approximately one week. Following that visit, the plaintiff and the deceased had regular telephone calls and rekindled their relationship.
[7] In 1994, the deceased proposed to the plaintiff and his wife that they purchase property to be registered in their names, with a suite in it for the deceased. He proposed paying room and board so that the mortgage would be affordable for the plaintiff and his wife, who were then renters and not landowners. After much discussion between the plaintiff and his wife, a home was purchased in the Bayview area of Westbank, British Columbia. It had an unfinished basement. The deceased made a down payment of $7,000 or $8,000, and the plaintiff and his wife assumed the mortgage of the vendor. The deceased paid for renovations to the basement, which renovations I accept were modest.
[8] In the summer of 1994, the deceased moved into the basement and started paying room and board in the amount of $500 per month. For a period of time, things went well. The deceased developed a close relationship with the family and particularly with his grandson, took all of his meals with the family, was included in family activities, and was driven to all of his appointments by the plaintiff or the plaintiff's wife.
[9] In early 1995, the deceased had a Will prepared, naming the plaintiff as his sole beneficiary. The deceased also suggested, at approximately that time, that he purchase a lot on which a new home could be constructed for the family and him. The plaintiff, his wife and the deceased discussed the proposal, looked at property together and found Lot 17. The deceased paid for the lot, which had been listed for $42,000, and at the deceased's direction the lot was registered in the name of the plaintiff, his wife, and the deceased. The deceased, who was an architect, started preparing plans and contacting subcontractors and trades people for quotes.
[10] In early 1995, the assumed mortgage on the Bayview property came up for renewal, and the new interest rate was higher, with the result that the monthly payments increased. The plaintiff says that he and the deceased agreed that the room and board paid by the deceased would increase to $700, which new rate was actually paid starting in the spring of 1995 or the very early summer of 1995. According to the plaintiff, his wife, and their son, in approximately June of 1995 the deceased started to withdraw from the family. He became moody, ornery, and obsessive about building quotes he was receiving.
[11] In the summer of 1995, the deceased announced that he wanted to move back to the Lower Mainland, that building costs were too high, and that he wanted to live on his own. The plaintiff told the deceased that would have a very adverse effect on his family, and that they would be unable to rent the basement out to assist with mortgage payments. He asked if there was anything he could do to change the mind of the deceased, but the deceased said he had made up his mind and would be moving. The plaintiff and his son helped the deceased pack, and the plaintiff drove the deceased to Hope, at the deceased's request. After the move, the plaintiff and the deceased had a few phone calls, during each of which the plaintiff says the deceased mentioned the possibility of selling Lot 17.
[12] In October 1995, the plaintiff and his wife received correspondence from a lawyer acting on behalf of the deceased, demanding a transfer of their interest in Lot 17 to the deceased and saying that they held their interest as bare trustees for the deceased. This came as some surprise to the plaintiff and his wife, who had understood from the deceased that their interest, as registered, in Lot 17 was a gift. Following the demand, which the plaintiff and his wife refused to comply with, the deceased commenced an action against the plaintiff and his wife. In October 1996, the plaintiff and his wife agreed to settle the litigation by transferring their interest to the deceased in exchange for the payment of $5,000. There was no further contact between the plaintiff and the deceased after the settlement of the litigation and before the deceased's death.
[13] After the deceased returned to the Lower Mainland he re-established contact or continued contact with the defendants, with whom he had been friends since 1978 and 1980 respectively. He told the defendants that ill feelings had arisen between himself and the plaintiff because of the increase in the rent or room and board from $500 to $700, and that he felt he was being taken advantage of by the plaintiff, which is why he had decided to move. He also told the defendants that he had understood that Lot 17 was to be registered in his name only, and not in joint names. From 1995 until his death, the defendants had regular contact with the deceased, weekly or more often, by telephone or in person.
[14] On March 6, 1996, the plaintiff signed his last Will, naming, as I have said, Mr. Harper as executor and Ms. Robertson as sole beneficiary. The Will contained the following proviso:
I DECLARE that after careful and anxious thought I have decided not to make any provision in this my last will and testament for my only son Stephen Lee Fuller. I do so because, after having made gifts of considerable value to Stephen and his family, he has become estranged from me, and has, I believe, taken advantage of my generosity. I further declare that I am aware of the provisions of the Wills Variation Act, R.S.B.C. and of my obligations in law towards my son. I believe that I have provided adequately for my son through gifts made to him during my lifetime, and feel that I have no further obligation towards him. I accordingly instruct my executor to defend with vigour any application to vary the terms of this my last will and testament.
[15] In November 2002, the deceased attended before a notary public and signed a transfer of Lot 17 from himself as sole owner to himself and Mr. Harper as joint tenants. That transfer was filed in the Kamloops Land Titles Office on November 25th, 2002, but through error of the Land Titles Office the title shows the ownership as tenants in common. The defendant executor says, with regard to the transfer of Lot 17 into joint tenancy, that the deceased did not want his son and daughter-in-law to have any claim to Lot 17 after his death, and that he took steps to prevent a claim by having his Last Will and Testament prepared and by having Lot 17 transferred. Ms. Robertson says that the deceased told her that he did not want the plaintiff to share in his estate directly or indirectly, and that:
As Geramy and I were his closest friends and were really like his family, he wanted us to have whatever remained of his assets when he died. This included not only Lot 17, but his investments and other assets.
(Lynn Robertson Affidavit # 2, paragraph 12(a)).
[16] After Frederick Fuller died, Mr. Harper applied for Letters Probate. In his disclosure document filed in September 2003, he showed as an asset of the estate a half-interest in Lot 17 (which was misdescribed as to address) “registered as tenants in common with Executor”. On October 17, 2003, as executor, he transferred that half-interest said to belong to the estate to the defendant, Ms. Robertson, on the basis that she was the sole beneficiary.
[17] On November 24, 2003, the plaintiff registered a certificate of pending litigation against the land. Those are the background facts.
[18] I will deal first with the plaintiff's claim that Lot 17 should form part of the estate. I will say in passing that it was conceded yesterday that there is no issue about the standing of the plaintiff to advance this claim. This claim is based on the premise that the defendant holds his interest in the property for the estate. The central question here is what was the intention of Frederick Fuller when he transferred a half-interest in the property to Mr. Harper and directed the registration be as joint tenants?
[19] It is clear on the evidence that the transfer was a gratuitous one. Mr. Harper gave no consideration in exchange for receiving the half-interest. A resulting trust arises when title to property is in one party's name, but that party, because he or she is a fiduciary or gave no consideration for the property, is under an obligation to return it to the original title owner: Pecore v. Pecore, 2007 SCC 17 at para. 20. The presumption of resulting trust is a rebuttable presumption and general rule that applies to gratuitous transfers. It operates to shift to the defendant the onus of proving the transfer was intended by the transferor to be a gift: Pecore v. Pecore, supra, at paras. 24-25.
[20] I do not accept, as submitted by the defendant's counsel, that the presumption of resulting trust does not apply to real property. The decision which is said to support that submission is Bajwa v. Pannu, 2006 BCSC 921decided by this court in June of 2006. In that case, the trial relied on the statutory presumption set out in s. 23(2) of the Land Title Act, in finding that the defendant, who was the registered owner of a one-third interest in the land, was entitled to a one-third legal and equitable interest in the land. However, in the Court of Appeal majority decision, (2007 BCCA 260) it is noted:
[15] The trial judge did not discuss the issue of resulting trust at any length. I expect that is because she found that Mr. Pannu's contribution to the purchase of the property was significant and, therefore, he was a co-purchaser, not a trustee.
[16} The Virks rely on Professor Waters' text, Law of Trusts in Canada...The passage on that page of the text says that for a resulting trust to be inferred the person said to be a trustee must have given no value for his legal interest. It follows that if it is found as a fact that the person whose equitable interest is challenged did give value, there can be no resulting trust. Whether value was given is a question of fact to be determined on the evidence in each case. The trial judge here found that Mr. Pannu gave value and there was evidence to support that conclusion. This is not a case like so many others in which one party has transferred an asset to another for no consideration. The evidence here supported the conclusion that Mr. Pannu was a co-purchaser which, in effect, is what the trial judge found to be the case.
[21] In this case, the defendant was clearly a gratuitous transferee, and I find that the presumption of resulting trust applies. Even if the onus was not on the defendant, the result would be the same. It is clear on the defendant's own evidence that the deceased did not intend, at the time of the transfer, to gift to Mr. Harper a one-half interest in the property. He effected the transfer for estate planning purposes and to attempt to get the property out of the reach of his son. Had the parties had a falling out or had the deceased, who was clearly a man worried about his financial security, fallen on hard times, I have no doubt that he would have demanded, and considered that he was entitled to demand, a transfer back of the half-interest, just as he had done with regard to the plaintiff and the plaintiff's wife with respect to the same property.
[22] In addition, the defendant's own conduct in treating the property, or at least half of the property, as an estate asset, including by using estate funds to pay taxes and utilities for the property, is further evidence that the property was not and was never intended to be an outright gift to the defendant.
[23] Consequently, I find that Lot 17 is beneficially owned by the estate, and I order the defendants to transfer Lot 17 to the estate.
[24] I turn now to the Wills variation application. The Wills Variation Act gives a testator a duty to make adequate provision for the proper maintenance and support of children. If the testator fails to discharge this duty, the court may order for the claimant the provision from the estate that it considers adequate, just and equitable in the circumstances. As the Supreme Court of Canada said in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 at para. 28:
If the phrase "adequate, just and equitable" is viewed in light of current societal norms, much of the uncertainty disappears. Furthermore, two sorts of norms are available and both must be addressed. The first are the obligations which the law would impose on a person during his or her life were the question of provision for the claimant to arise. These might be described as legal obligations. The second type of norms are found in society's reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards. These might be called moral obligations, following the language traditionally used by the courts. Together, these two norms provide a guide to what is "adequate, just and equitable" in the circumstances of the case.
And further (at para. 31):
For further guidance in determining what is "adequate, just and equitable", the court should next turn to the testator's moral duties toward spouse and children. It is to the determination of these moral duties that the concerns about uncertainty are usually addressed. There being no clear legal standard by which to judge moral duties, these obligations are admittedly more susceptible of being viewed differently by different people. Nevertheless, the uncertainty, even in this area, may not be so great as has been sometimes thought. For example, most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after his death, a strong moral obligation to do so exists if the size of the estate permits. Similarly, most people would agree that an adult dependent child is entitled to such consideration as the size of the estate and the testator's other obligations may allow. While the moral claim of independent adult children may be more tenuous, a large body of case law exists suggesting that, if the size of the estate permits and in the absence of circumstances which negate the existence of such an obligation, some provision for such children should be made...
[25] Guidance with regard to when a moral duty is negated is provided by the neat summary in Clucas v. Clucas Estate (1999), 25 E.T.R. (2d) 175 (B.C.S.C.) at para. 12:
Circumstances that will negate the moral obligation of a testatrix are "valid and rational" reasons for disinheritance. To constitute "valid and rational" reasons justifying disinheritance, the reason must be based on true facts and the reason must be logically connected to the act of disinheritance...
Although a needs/maintenance test is no longer the sole factor governing such claims, a consideration of needs is still relevant...
[26] In this case, it is clear that absent valid and rational reasons for disinheritance, the deceased owed a moral duty to make provision for the plaintiff from his estate. There are no other persons to whom the testator owed a legal duty. The size of the estate is of sufficient size to permit provision for the plaintiff. With regard to the reasons for disinheritance, the starting point is the will itself, which expresses the reasons for disinheritance, as I quoted earlier, namely:
...after having made gifts of considerable value to Stephen and his family, he has become estranged from me, and has, I believe, taken advantage of my generosity.
And further:
I believe that I have provided adequately for my son through gifts made to him during my lifetime, and feel that I have no further obligation towards him.
[27] In Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (B.C.C.A.), the Court of Appeal, at para. 58, said:
In deciding a claim under s.2(1) of the Act, the task of the court is to decide whether, at the date of the testator's death, her will was consistent with the discharge by a good parent of her duties to her family...The law does not require that the reason expressed by the testator in her will, or elsewhere, for disinheriting the appellant be justifiable. It is sufficient if there were valid and rational reasons at the time of her death - valid in the sense of being based on fact; rational in the sense that there is a logical connection between the reasons and the act of disinheritance.
[28] On the evidence before me, I do not accept that the deceased had valid and rational reasons for disinheriting the plaintiff. He, I find, had made, at the very best, modest gifts to the plaintiff, limited to the $7,000 or $8,000 down payment on the Bayview house and some modest renovation costs, and one-third interests in Lot 17 to the plaintiff and the plaintiff's wife. With regard to the Bayview property, all was lost when the house was foreclosed on, and the plaintiff and his wife were left with a debt rather than an asset, at least part of which I find can be attributed to the deceased's unilateral decision to leave the residence and stop his contributions towards household expenses. The gift of an interest in Lot 17 was reneged upon by the deceased, and indeed he retained counsel and commenced litigation against his only son to obtain return of that gift. Any estrangement, I am satisfied, was initiated by the deceased and not by the plaintiff. There is no evidence to support the assertion of the deceased in his Will that the plaintiff took advantage of his generosity.
[29] I conclude that the deceased owed a moral duty to make provision for the plaintiff, that the circumstances do not negate the existence of the duty, and that in disinheriting the plaintiff, the deceased failed to act as a judicious parent in the circumstances. The plaintiff is not a person of means. He clearly has adequate income at the present time, from work as a foster parent, a driver, and a security guard, but he has no real estate, he has only very modest investments, and he has a debt secured against his only vehicle, which debt exceeds the value of the vehicle. He rents accommodation, and he has health problems.
[30] Taking into account the aim of the Wills Variation Act, as well as the principle that testamentary autonomy should be interfered with only so far as the statute requires, what variation is appropriate in the circumstances? Under all of the circumstances of this case, I have concluded and I order that the plaintiff is entitled to two-thirds of the net estate of Frederick Fuller.
[31] Unless counsel make arrangements within 30 days of today's date, to make submissions as to costs, the costs of all parties will be borne by the estate.
Beames J.