Re McColgan
[1969] 2 O.R. 152-162
ONTARIO
[HIGH COURT OF JUSTICE]
KEITH, J.
19th FEBRUARY 1969.
Wills — Construction — Testator leaving house be beneficiary “until her death or until she is not residing therein personally” — Whether life estate subject to a condition subsequent — Whether condition subsequent void for uncertainty.
Where a testator leaves his house to trustees to hold as a home for a certain beneficiary “until her death or until she is not residing therein personally” he has given her a life estate subject to a condition subsequent. The condition being void for uncertainty, the beneficiary takes her life estate free and clear of any condition.
[Perrin v. Morgan, [1943] A.C. 399; (SECTION)Moore et al. v. Royal Trust Co. et al., [1956] S.C.R. 880, 5 D.L.R. (2d) 152;
Re McLean, [1940] 3 D.L.R. 307, 14 M.P.R. 475; revd [1941] 1 D.L.R. 722, 15 M.P.R. 338 sub nom. Re McLean and Royal Trust Co.; Re Tilbury West Public School Board and Hastie, [1966] 2 O.R. 20, 55 D.L.R. (2d) 407; Fillingham v. Bromley (1823), Turn. & R. 530, 37 E.R. 1204; Clavering v. Ellison (1859), 7 H.L.C. 707, 11 E.R. 282; Re Sifton, [1938] O.R. 529, [1938] 3 D.L.R. 577, [1938] A.C. 656, [1938] 3 W.W.R. 465 sub nom. Sifton v. Sifton; Re Down, [1968] 2 O.R. 16, 68 D.L.R. (2d) 30, refd to]
APPLICATION for advice and direction in the construction of a will.
J.W. Morden, for applicant, Guaranty Trust Co. of Canada.
S.M. McBride, Q.C., for the Official Guardian on behalf of the infant, John Allen Leftdahl.
Rodney Hull, for respondent, Mary Kovalchick.
KEITH, J.:– The Guaranty Trust Company of Canada, as the executors of the last will and testament and trustees of the estate of the late Dr. James W. McColgan, seek the advice and direction of the Court on eight questions arising out of the language used by the testator in one paragraph of his will.
The circumstances which gave rise to the present application are related in the affidavits of the respondent Mary Kovalchick and of David Ernest Morrow, a trust officer in the employ of the applicant. The respondent Mary Kovalchick states that she first became acquainted with the late Dr. McColgan as his patient in the year 1928 at which time she was 18 years of age and Dr. McColgan was the only medical practitioner in the Town of Sagamore, Pennsylvania. The respondent and the testator became, in her words, “great and good friends which relationship lasted up to the date of his death”. The respondent says, however, that between the years 1928 and 1958 when Dr. McColgan retired and moved to Toronto permanently, “We were frequently in each other’s company and the question of marriage was discussed between us on many occasions but because of religious differences no ceremony was ever performed.” She continues in her affidavit sworn on November 22, 1968:
4. In 1958, Dr. McColgan retired from the practice of medicine and came to Canada for his retirement alone at which time he occupied his residence at 39 Arjay Crescent, Willowdale, which he had purchased in 1956 or 1957 and in which he resided up to the time of his death.
. . . . .
6. When the doctor retired to Ontario from Sagamore, Pennsylvania, he left me a power of attorney for the purposes of collecting his outstanding accounts and otherwise winding up his medical practice and, after the said medical practice was wound up, I visited with the late Dr. McColgan from 1959 to 1967 approximately three or four times each year at which time I would live with the doctor at 39 Arjay Crescent for several weeks at a time.
7. While I lived with the doctor in Toronto, I devoted myself completely to his comfort, well-being and needs and managed his home by supervising the housekeeper, day workers and repairmen, including the hiring and firing of such workers, attended to marketing and nursed the doctor and cooked his meals for him. 8. In 1965, the late Dr. McColgan insisted that I come to Ontario to stay with him permanently as he was alone and very sick and he had been informed that he had cancer.
9. My state of health at that time would not permit me to leave Sagamore, Pennsylvania for any protracted period in excess of two or three months and I was unable to accede to the doctor’s request to come to Ontario to live with him permanently.
10. Throughout the period that I kept company with the late Dr. McColgan, he was at all times aware of my financial position and my state of health.
11. At the present time, I am suffering from a nervous condition which precludes the doing of heavy or extensive housework and my assets consist of the sum of approximately
$14,000.00 cash, being the balance of insurance monies made payable to me directly upon the doctor’s death and provided by the late doctor, and a pension of $380.00 per month from the U.S. Government.
12. The premises at 39 Arjay Crescent consist of nine rooms and large grounds and I am unable to carry out the normal duties required to maintain housekeeping of the premises without a housekeeper.
Dr. McColgan died at Toronto on June 26, 1967. His will was executed on May 13, 1965, a year that is specially mentioned in para. 8 of the respondent’s affidavit, above-quoted.
All the questions propounded to the Court related to the provisions of para. III(f) of the will which reads as follows:
III I GIVE, DEVISE AND BEQUEATH all property of every kind and description wherever situate of which I may die possessed or over which I may have any power of appointment unto my Trustee upon the following trusts:
. . . . .
(f) To hold my property at 69 Arjay Crescent, Willowdale as a home for Mary Kovalchick, of Sagamore, Pennsylvania until her death or until she is not residing therein personally, whichever shall first occur and thereafter to hold such property as a home for Carrie Leftdahl, of Plumville, Pennsylvania, until her death or until she is no longer residing therein personally, whichever shall first occur, when the said property shall fall into and form part of the residue of my estate; while such property is held for either of the aforesaid, all taxes, insurance, repairs and any other charges necessary for the general upkeep of the property shall be paid from a fund sufficient in the opinion of my Trustee to cover the same, which I direct it shall set aside upon my death and the balance of such fund shall fall into and form part of the residue of my estate as soon as the said property is no longer being held for either of the aforesaid;
Subparagraph (g) of said para. III contains the provisions with respect to the residue by way of remainder upon the termination of whatever the interests are of Mary Kovalchick and Carrie Leftdahl, as contained in subpara. (f). The reference to 69 Arjay Cres. is a typographical error in the will, the correct street address being 39.
I was informed by counsel that the value of Dr. McColgan’s estate was approximately $231,000 of which $52,000 was accounted for by 39 Arjay Cres. There were also substantial insurance payments made out of this jurisdiction and which are not included in the above valuation.
On this application it was ordered that the Official Guardian represent the infant remainderman John Allen Leftdahl and all unborn and unascertained potential interests in the remainder with respect to the residue.
No one appeared for Carrie Leftdahl, a potential beneficiary in the above-quoted subpara. (f) although she had been duly served with notice of this application.
Mary Kovalchick was residing with Dr. McColgan at the time of his death and had been so residing for some time prior thereto, really nursing him in his last illness. She continued to occupy 39 Arjay Cres. until about November 30, 1967, when she returned to Sagamore, Pennsylvania. On the same date she wrote to the solicitors for the applicant advising them that, due to illness, it was necessary to be under the care of a Dr. Wright in Sagamore for an indefinite period. She further said “however, I am not surrendering my rights to make my home at 39 Arjay Crescent”. She returned to the said house on May 18, 1968, and has remained there ever since.
Questions have arisen between the executors and Miss Kovalchick as to the responsibility for various items of expense in connection with upkeep, heating and protection of the property and other incidental matters and as a result this application is now brought to settle these questions and to provide a comprehensive guide to the executors and others interested, for the administration of the property.
The questions propounded to the Court are as follows:
1. What estate or interest, if any, in 39 Arjay Crescent (hereinafter called the premises) passed to the said Mary Kovalchick under the provisions of the Will?
2. Has the estate or interest, in the premises, if any, which passed to the said Mary Kovalchik been terminated by reason of the facts adduced in evidence in support of this application, specifically her absence from the premises referred to in the affidavit of David Ernest Morrow?
3. Should this Honourable Court hold that the said Mary Kovalchik still has an estate or interest in the aforesaid premises, what conduct of the said Mary Kovalchik respecting the said premises would cause her estate or interest, if any, in the said premises, to become forfeited or to terminate? 4. Specifically, should this Honourable Court hold that the said Mary Kovalchik has an estate or interest in the premises, is it an incident of this estate or interest, as the case may be, that it carries with it not only the right of the said Mary Kovalchik to reside in the premises personally but also the right to whatever rents or profits may arise from the said premises during the period of her estate or interest? Specifically does she have the right to lease the said premises for her benefit to another person?
5. During the currency of the estate or interest of the said Mary Kovalchik in the said premises, if any, on whom does the responsibility (as between the estate and the said Mary Kovalchik) rest respecting the surveillance and safety of the premises having regard to the possibility of fire, damage and theft?
6. Specifically, is the duty or responsibility of the said Mary Kovalchik respecting the surveillance and safety of the premises, should she be so held to be responsible, terminated or affected in any way by her absence from the premises?
7. Should the said Mary Kovalchik fail in her duty or responsibility to maintain a surveillance of the premises is the trustee entitled to perform the said duty and charge her for the cost thereof?
8. Is the estate obliged to furnish, at its expense, a permanent, or any, house-keeper for the said premises and is it obliged to maintain and pay for telephone service for the premises during the currency of her estate or interest?
The answer to Q. 1 will, of course, seriously affect the resolution of the remaining questions.
Question 1 itself raises four issues, as follows:
(a) is the interest of Miss Kovalchick and a fortiori the subsequent interest of Carrie Leftdahl upon the termination of the interest of Miss Kovalchick, a mere personal licence to use and occupy and enjoy the premises, 39 Arjay Cres;
(b) if the interest is more than a mere personal licence, does the language of the will create a determinable life estate or a life estate subject to a condition subsequent;
(c) if what is intended to be created is a determinable life estate, is the language determining such life estate clear and unambiguous, or is it the converse rendering the gift void for uncertainty and,
(d) if what is created on the other hand is a life estate subject to a condition subsequent, is the condition void for uncertainty thus leaving the life estate free of any condition.
In Perrin v. Morgan, [1943] A.C. 399, Viscount Simon, L.C., said at p. 406:
My Lords, the fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case — what are the “expressed intentions” of the testator.
And at p. 408:
I now turn to some of the reported cases, premising only that it seems to me a little unfortunate that so many of such cases should find their way into the books, for in most instances, the duty of a judge who is called on to interpret a will containing ordinary English words is not to regard previous decisions as constituting a sort of legal dictionary to be consulted and remorselessly applied whatever the testator may have intended, but to construe the particular document so as to arrive at the testator’s real meaning according to its actual language and circumstances . . . . In Abbott v. Middleton (1858) 7 H.L.C. 68, 119, a decision of this House in which Lord Chelmsford L.C., Lord Cranworth, Lord St. Leonards, and Lord Wensleydale all took occasion to expound the governing rule as to the interpretation of wills, Lord Wensleydale observed: “A great many cases were cited at the bar, as they always are, when the question is on the construction of wills. Generally speaking, these citations are of little use. We are no doubt bound by decided cases, but when the decision is not upon some rule or principle of law, but upon the meaning of words in instruments which differ so much from each other by the context, and the peculiar circumstance of each case, it seldom happens that the words of one instrument are a safe guide in the construction of another.”
By way of illustration of the difficulties involved in construing the language of a testator in matters of this sort, on may well consider the case of Moore et al. v. Royal Trust Co. et al., [1956] S.C.R. 880, 5 D.L.R. (2d) 152.
In that case one of the paragraphs of the will that was before the Court for construction was as follows [at p. 881 S.C.R., p. 156 D.L.R.]:
“6. I DIRECT my Trustees to permit my son George Moore Junior and his wife Frances as long as either of them shall occupy the same to have the use and enjoyment of my property known [words describing it] free of any duty rent or taxes and I DIRECT that my Trustees shall out of my Trust Fund pay the cost of maintaining any building thereon and the insurance of the same against damage by fire.”
In the Court of first instance [[1954] 3 D.L.R. 407, 13 W.W.R. (N.S.) 113] it was held that these words intended to create a determinable life estate but since the language was ambiguous and uncertain as to the event that would terminate the estate, the whole gift failed for uncertainty.
In the Court of Appeal [[1955] 4 D.L.R. 313, 16 W.W.R. 204] (B.C.) it was unanimously held that these words did indeed create a determinable life interest and not a life estate subject to a condition subsequent but that there was no ambiguity or uncertainty in the words and therefore the gift was valid. In the Supreme Court of Canada, however, it was equally unanimously held that all the Judges below were wrong and that what was created was not an estate or interest in the lands but a mere personal licence for the use, enjoyment and occupation of the property.
A similar situation arose in the Courts of New Brunswick in the case of Re McLean, [1940] 3 D.L.R. 307, 14 M.P.R. 475, where Baxter, C.J., held that the words of a gift in a will requiring trustees to hold property to allow the testator’s daughter “to occupy and enjoy for her life, or for such shorter period as she wishes the above-named premises” gave her a mere licence to occupy the property. On appeal ([1941] 1 D.L.R. 722, 15 M.P.R. 338 sub nom. Re McLean and Royal Trust Co.) the majority of the Court held that what was conveyed to the daughter under the terms of the will was a life estate.
I have made reference to this case only to illustrate the difficulties mentioned by Viscount Simon and pointing out how essential it is to recall that the language in each will that requires consideration must be viewed in the context of the particular circumstances of the testator, beneficiaries and the estate itself.
Turning then to the first issue raised by Q. 1, it seems to me that the language of the will goes far beyond what one would deem appropriate to the creation of a mere personal licence. The obligations placed on the trustees “to hold my property at (sic) 39 Arjay Crescent, Willowdale, as a home for MARY KOVALCHICK of Sagamore, Pennsylvania, until her death” and to set aside a fund sufficient to cover the charges referred to in the will are much more consistent in the circumstances peculiar to this will and the persons involved with the intention to create an interest in the property rather than a mere licence. This property is to be held as a “home” not held subject to a mere permission to occupy. The interest created is a life interest.
In view of my opinion on the first issue let us now consider whether or not the interest created is a determinable life estate or a life estate subject to a conditon subsequent.
In Re Tilbury West Public School Board and Hastie, [1966] 2 O.R. 20 at p. 21, 55 D.L.R. (2d) 407 at p. 408, Grant J., was dealing with a deed in which the granting clause was as follows:
“DOTH GRANT unto the said parties of the Third Part and their . . . Successors as Trustees for so long as it shall be used and needed for school purposes and no longer.” The habendum was consistent with the granting clause but contained in addition language to identify the owner of the reversionary interest.
At p. 23 O.R., p. 410 D.L.R., Grant, J., stated:
It must be determined first if the grant in question was a determinable fee simple subject to a right of reverter or a fee simple subject to a condition subsequent . . . It is difficult to define the difference between a determinable fee and a fee simple defeasible by condition subsequent and often each cannot be readily put in its proper classification. The essential distinction appears to be that the determining event in a determinable fee itself sets the limit for the estate first granted. A condition subsequent, on the other hand, is an independent clause added to a complete fee simple absolute which operates so as to defeat it.
Grant, J., held that the words quoted created a determinable fee simple.
The author of Cheshire’s The Modern Law of Real Property, 9th. ed., puts the importance of the distinction for the purposes of this case as follows at p. 284:
A condition subsequent which is void under the rules stated below or which becomes impossible of fulfilment by operation of law, is disregarded, and the gift takes effect as if the condition had not been imposed. On the other hand, a determinable interest fails entirely if the terminating event is void under the rules in question, for to treat it as absolute would be to alter its quantum as fixed by the limitation.
At p. 281, the same learned author defines the distinction in these words:
In short, if the terminating event is an integral and necessary part of the formula from which the size of the interest is to be ascertained, the result is the creation of a determinable interest; but if the terminating event is external to the limitation, if it is a divided clause from the grant, the interest granted is an interest upon condition.
The authors of Megarry and Wade, The Law of Real Property, 3rd ed., pp. 77-8, put it this way:
It will be seen that the difference is really one of words; the determining event may be worked into the limitation in such a way as to create either a determinable fee, or a fee simple defeasible by condition subsequent, whichever the grantor wishes. The question is whether the words limit the utmost time of continuance of the estate, or whether they mark an event which, if it takes place in the course of that time, will defeat an estate already granted; in the first case the words take effect as a limitation, in the second as a condition. A limitation marks the bounds or compass of the estate, a condition defeats the estate before it attains its boundary.
As already stated, I have come to the conclusion that the interest granted to Miss Kovalchick was a life interest since the words “until her death” are merely another way of expressing the intention that the estate created was to endure for the term of her natural life. The subsequent words in the will “or until she is not residing therein personally, whichever shall first occur” are to my mind “external to the limitation” — “a divided clause from the grant” thus creating an interest upon condition, to adapt the words quoted from Cheshire; and “they mark an event which, if it takes place . . . will defeat an estate already granted”, thus taking effect as a condition as the authors of Megarry and Wade put it. It now remains to be considered whether or not the condition attached to the life estate is valid or void itself for uncertainty. In the old case of Fillingham v. Bromley (1823), Turn. & R. 530, 37 E.R. 1204, Lord Eldon, L.C., had to deal with a condition that the beneficiary live and reside on the property. In effect, the held that these words were a condition subsequent void for uncertainty and in so doing, at p. 536 said:
Then comes the question what is living and residing: occupation is not living and residing: there are many purposes, for which the word inhabitant has been taken to include persons, as inhabitants of places in which they never were. The question comes to this, what it was the testator meant, and whether, unless a clear meaning can be put upon the will, the Court is to take upon itself to say that there has been a forfeiture.
In Clavering v. Ellison (1859), 7 H.L.C. 707, 11 E.R. 282, Lord Cranworth said at pp. 725-6:
And I consider that, from the earliest times, one of the cardinal rules on the subject has been this: that where a vested estate is to be defeated by a condition on a contingency that is to happen afterwards, that condition must be such that the Court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine.
In my opinion, if there was no direct authority for it, I should still have arrived at the same conclusion; but I have looked at the authorities, especially that of Lord Eldon in the case of Fillingham v. Bromley (Turner and Russ 530). I think that, looking at the language here used, it is far too indefinite and uncertain to enable the Court to say what it was that the testator meant should be the event on which the estate was to determine. It was to go over in case one or more of such children should be educated abroad. What does that mean? No two minds would agree upon the question when education begins. Suppose the child was born abroad, and he was brought over to England before he could speak, of course you could not say that he had been educated abroad, though it is said that more ideas are taken in during the first two years of life than in all the years afterwards of the very longest life. If that would not have been a breach of the condition, would it be a breach if the child came back at the age of seven, or if he came back at the age of ten? If he remained abroad all his minority, you would certainy say in that case that he was educated abroad. But the question is, not whether in the particular case he was educated abroad, but whether you can predicate on reading the will, what it was that was to defeat the vested estate? I concur in Lord Eldon’s observations about an estate being defeated by a person not living and residing in a particular house, which he thought too remote; and I think that this is far more remote than that.
This language was expressly adopted in Re Sifton, [1938] O.R. 529 at p. 535, [1938] 3 D.L.R. 577 at pp. 583-4, [1938] A.C. 656 sub nom. Sifton v. Sifton, and again in Re Down, [1968] 2 O.R. 16 at p. 22, 68 D.L.R. (2d) 30 at p. 36 (C.A.).
The facts already quoted with reference to Miss Kovalchick going to Sagamore in November, 1967, and returning to Toronto in May, 1968, are sufficient in themselves to demonstrate how uncertain and ambiguous the condition “until she is not residing therein personally” is. There is no problem in
deciding when the condition is being complied with; it is another matter certainly to attempt to determine when it has been breached. It cannot be envisioned, for instance, that the testator meant that this respondent should forfeit her rights if she took an extended holiday or was required to enter hospital for treatment although one could certainly say that in those circumstances she was not residing at the house personally. The condition, therefore, fails completely in meeting the test put by Lord Cranworth, i.e., that the “condition must be such that the Court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine”.
In the result, therefore, Q. 1 must be answered as follows:
a life estate in 39 Arjay Cres. passed to Mary Kovalchick free and clear of any condition, the purported condition subsequent being void for uncertainty.
It follows that Q. 2 must be answered in the negative; that the answer to Q. 3 is simply that her life estate is not subject to disfeasance by any conduct of hers and that Q. 4. must be answered “Yes.”
The answers to Qq. 5 to 8 inclusive, depend on what the testator must be taken to have intended by his use of the words “to hold . . . as a home for” coupled with the words of the last part of the gift made by para. III(f), namely,
. . . while such property is held for either of the aforesaid, all taxes, insurance, repairs and any other charges necessary for the general upkeep of the property shall be paid from a fund sufficient in the opinion of my Trustee to cover the same, which I direct it shall set aside upon my death and the balance of such fund shall fall into and form part of the residue of my estate as soon as the said property is no longer being held for either of the aforesaid;
As has already been noted, the relationship between the testator and Miss Kovalchick was obviously an intimate one. He was familiar with the state of her health and her finances.
The house is a large expensive nine-room house in an exclusive residential district and the income from his estate was ample to permit him in his lifetime to pay all the charges incidental to the enjoyment of the home without supplementing such income by working at his profession. In fact he had done so from retirement in 1958 until his death in 1967.
In the context of this will it is my opinion that he intended the enjoyment of the property as a home to be in no way dependent on the beneficiaries’ own monetary resources.
If a housekeeper was required, or a gardener, or snow removal services, or the services of cleaning women, the fund to be set up was intended to defray the cost.
If circumstances arose as a result of which Miss Kovalchick considered it necessary or desirable that she lease the premises, or any part of them, then she must be entitled to the rents and profits free and clear of any charge against them.
Obviously the estate would not be charged with the cost of a housekeeper for example for a tenant but the expenses of the upkeep of the property so that it would at all times be in a suitable condition for her to occupy as a home, must be met by the estate.
For these reasons I would answer Q. 5 as follows: The responsibility is that of the executors and trustees.
Questions 6 and 7 do not require further answers. Question 8 should be answered “Yes.”
I reserve the disposition of costs of this application until counsel have had the opportunity of addressing me on the subject for which purpose I shall be pleased to arrange an early appointment.
Order accordingly. 9 ESTT