Canada: Spence vs BMO

The recent decision in  Spence v. BMO Trust Company raises very interesting questions about testamentary freedom and the power of the courts to remedy wills which contravene public policy.

In this case, the testator, Rector Emmanuel Spence, executed a will which disinherited his daughter Verolin in favour of his estranged daughter, Donna and her two kids.  Verolin challenged the will on the grounds that it was void for public policy reasons and argued that it should be set aside.  Verolin asserted that the only reason she was written out of the will was because her father had been opposed to her having a child with a man of a different race.

When Donna and Verolin were children, their parents separated and each of the girls went to live with one of the parents. Verolin lived with her father, and Donna lived with her mother.  Neither the deceased nor Verolin had any contact with Donna from that time on.  Verolin continued to have a very close relationship with her father for years.  However, he cut off all contact with her the moment he found out that she was pregnant with a child whose father was Caucasian.

Uncontested affidavit evidence showed that the only reason the deceased stopped speaking to Verolin and disinherited her from his will was because of the race of her child.  Verolin argued that this underlying reason for her being written out of the will was racist and therefore against public policy.

If you ask 100 people on the street whether you can do what you want in your will, 99 of them would say "yes".  In reality, wills are subject to court intervention for a variety of reasons, including not providing for dependants or because the conditions of the will are void for vagueness.  Occasionally,clauses in wills are found to be void because they are against public policy; for example, leaving a gift to a grandson but only if he remains Catholic and does not marry a woman who has been divorced.  It is easy to see how society would not want to enforce that kind of clause – it is blatant discrimination based on religion and gender.

In the Spence case, Verolin argued that the racist underpinnings of her father's will result in the will being offensive to society's sensibilities.  The court agreed and set aside the entire will aside.

It is easy to see how setting aside the will is an attractive position to take.  There is no question that Mr. Spence was a racist and repugnant man, and his treatment of his daughter is wildly offensive to our moral sensibilities. And it is in the public's interest to squash out such racist views in our society and to not compel an estate trustee to give effect to the distasteful whims of a racist man.

However, this decision departs from the jurisprudence on public policy cases. In particular, there are two very striking aspects about this decision:

In past jurisprudence, the courts struck out specific conditions or phrases of wills or trust documents because the condition placed on a gift was offensive.  The courts found that they could not compel an estate trustee to do something that was against the public interest.  The subject of these cases has always been the wording on the face of the will or trust document.

The court in Spence stretched the analysis of previous case law to look at the intention of the testator and the will as a whole beyond what was apparent on the face of the will.  There does not appear to be anything in the case law cited by the court that would allow for such an undertaking.

There are compelling reasons for why such an undertaking should not be done by the courts.  It is a significant departure from established principles of testamentary freedom and would open the floodgates of litigation.

If public policy considerations are imposed on private familial testamentary gifts that are set out without conditions, there may be no limit on the cases alleging discrimination that will appear before the courts. Parents will be left with no alternative other than to divide their estate equally between their children.

For example, what if a parent did not leave a gift, or a sufficient enough gift, for an independent adult child because the child struggled with a drug addiction and was liable to squander his inheritance? Addiction is a mental illness and therefore the will may be found to be discriminatory on the basis on disability.

Or, in many cultures, it is customary to give the eldest son a larger inheritance to the detriment of any daughters – this could be found to be discrimination based on sex.

Undertaking to make sure the public's interest and society's morals are upheld is always a valiant endeavour, but we must not lose sight of the testamentary freedom afforded to individuals to deal with their affairs as they see fit, even if we may disagree.  It appears that the respondent, BMO Trust Company, is appealing the decision, so it will be interesting to see how the Court of Appeal deals with these competing principles.

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