In Spence v. BMO Trust Company (PDF), the Ontario Court of Appeal revisited the question of when courts should circumscribe testamentary freedom on public policy grounds. Emanuel Spence died in 2013, leaving two daughters, Verolin Spence and Donna Spence.
Until 2002, the deceased and Verolin maintained a close relationship; this changed, however, when Verolin told the deceased that she was pregnant and that the father of her child was of a different race.
Subsequently, in 2010 the deceased executed a will which disinherited Verolin, in favour of Donna, and her two children. In fact, the deceased unequivocally excluded Verolin from sharing in any part of his estate, as Clause 5(h) of his will read:
I specifically bequeath nothing to my daughter, [Verolin] as she has had no communication with me for several years and has shown no interest in me as her father.
The issue in Spence was whether the will was void because it was contrary to public policy, due to the deceased's decision to leave Verolin nothing in his will because of her relationship with and child by a person of a different race. In support of Verolin's position, she relied upon extrinsic, uncontested affidavit evidence, that provided that her disinheritance was motivated by racial discrimination on her father's part. This argument ran contrary to the plain language of clause 5(h) above, which mentions no such motivation. The Bank of Montreal ("BMO Trust"), the appointed estate trustee, argued that the will was valid as it did not explicitly state an intention contrary to public policy.
The Application Judge's Decision
The application judge found that the provision of the will in question did not offend public policy on its face. However, on the basis of the affidavit evidence, she also found that the testator's reason for disinheriting Verolin was "based on a clearly stated racist principle" (at para. 49). The application judge concluded that the provision offended "not only human sensibilities but also public policy" (at para. 49). As a result, the application judge held that the deceased's will was invalid, and set it aside in its entirety.
The Court of Appeal Decision
The Ontario Court of Appeal overturned the decision of the application judge. In doing so, the Court focused on the following:
- testamentary freedom and the fact that Ontario law does not impose a statutory obligation on a testator to provide in his will for an adult, independent child;
- the fact that this case is not a wills construction case as the terms of the deceased's will are unequivocal and unambiguous; and
- the fact that the deceased's will did not impose conditions or stipulations that offend public policy.
Given the above circumstances, the Court concluded that neither a public policy-based inquiry into the validity of the deceased's will nor interference with the deceased's testamentary freedom was warranted.
The Court noted that Canadian courts will not hesitate to intervene on public policy grounds where implementing the testator's wishes requires a testator's named beneficiary, executors or trustees to act in a way contrary to public policy. In this case, however, the deceased's residual bequest does not require the estate trustee, BMO Trust, or the beneficiaries, Donna and Donna's son, to engage in discriminatory or unlawful conduct; nor are the residual beneficiaries "unworthy heirs" (e.g. a racist organization). As such, the deceased's will did not run contrary to public policy on its face.
The Court went further to determine that, in the event that the deceased's will had expressly disinherited Verolin on discriminatory grounds, the bequest would nonetheless be valid as it reflected the testator's intentional, private disposition of his property. As stated by the Court (at para. 75):
Absent valid legislative provision to the contrary, the common law principle of testamentary freedom thus protects a testator's rights to unconditionally dispose of her property and to choose her beneficiaries as she wishes, even on discriminatory grounds. To conclude otherwise would undermine the vitality of testamentary freedom and run contrary to established judicial restraint in setting aside private testamentary gifts on public policy grounds.
The Court also found the extrinsic, affidavit evidence submitted by Verolin to be inadmissible. This evidence was considered extrinsic because it was not in the will itself, and as a general rule, extrinsic evidence is not admissible save for when: (i) the will is equivocal; or (ii) the will is ambiguous. In this case, the terms of the deceased's will were unequivocal and unambiguous, and, as such, the exceptions to the general rule against the admissibility of extrinsic evidence were not engaged.
In concluding, the Court called for a "robust application of the principle of testamentary freedom" (at para. 85), and found that the application judge had erred in her "public-policy driven review" (at para. 86) of the testator's intention and by admitting the extrinsic evidence (at para. 113).
