Conditional Gifts

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Compiled by Eric B. Appleby:

Generally

Where the testator has clearly attached conditions or obligations to his gifts, his expressed intention is paramount. But where the will is not clear, it is a settled rule of construction that the words are not construed as importing a condition, if they are fairly capable of another interpretation. See Halsbury’s Laws of England, Snd Ed., vol. 34, para. 412. 9.2 Public policy A condition may be invalid if it is illegal or contrary to public policy or uncertain in its meaning or its operation. See Woods Estate v. Woods, [2005] O.T.C. 49 (S.C.), para. 32.

Conditions precedent

A testatrix devised a property to his daughter absolutely, but provided that, if the property was sold during the daughter’s lifetime, half the proceeds of sale were to go to his son. The property passed to the daughter and was unsold when the son died. The Newfoundland Supreme Court, Trial Division, held that the sale was a condition precedent to the gift to the son and that the gift lapsed when the son died before the sale. See Gosse’s Will, Re (1976), 14 Nfld. & P.E.I.R. 188; 33 A.P.R. 188 (Nfld. T.D.).

Conditions precedent and subsequent

“It may, however, be noticed that when the condition requires something to be done which will take time, the argument is in favour of construing it as a condition subsequent because the law leans in favour of early vesting. On the other hand, a condition which involves anything in the nature of consideration is in general a condition precedent. If the language of the will leaves it in doubt whether the condition is intended to be precedent or subsequent, the court prefers the latter.” See Theobald on Wills (14th Ed., 1982), page 623. A testatrix gave her husband her realty, but stated that he could not dispose of it during the testatrix’s sister’s lifetime, because if the husband predeceased the sister, the property would become the sister’s. The Nova Scotia Supreme Court, Trial Division, held that the husband’s interest was conditional on the sister predeceasing him. See Cook v. Nova Scotia (1982), 53 N.S.R.(2d) 87; 109 A.P.R. 87 (T.D.).

Vested defined

Fixed; accrued; settled; absolute. Having the character or given the rights of absolute ownership; not contingent. . . . See Black’s Law Dictionary, 6th Ed., page 1563.

Vesting, contingent gifts

A testator directed that the income from his estate be paid to his daughter until she reached the age of 45 at which time the capital was to be paid to her; provided that if the daughter died before age 45 the capital was to be paid to a granddaughter. The Saskatchewan Court of Appeal dismissed the daughter’s application for an order for immediate vesting of the gift to the daughter. The court held that the gift to the daughter was contingent and was not absolute. See Little v. Salterio Estate (1981), 14 Sask.R. 18 (C.A.).

Rules against remoteness of vesting

Rule against perpetuities “Perpetuity, unlimited duration. … It is odious in law, destructive to the commonwealth, and an impediment to commerce, by preventing the wholesome circulation of property” The Dictionary of English Law by Earl Jowitt (1959), page 1333. The rule against perpetuities or the doctrine of remoteness is that the vesting of property cannot be postponed … beyond any number of lives in being … and 21 years from the death of the surviving life … Duke of Norfolk’s Case (1681), 3 Ch. Ca. 1.

Rule against accumulations

An accumulation arises when an income from a fund is added to the capital. The headnote in the case of Ball Estate v. Miller (1986), 52 Sask.R. 300 (Sur. Ct.) states: Limits on accumulation of rent, profits or income – Application of legislation – The Accumulations Act 1800 (Imp.), 39 & 40 Geo. 3, c. 98 – limited the period of accumulation of profits and rents to a period of 21 years following the death of the testator – The Saskatchewan Surrogate Court held that the Act was in force in Saskatchewan – See paragraphs 8 to 23.

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This entry was last updated: February 13, 2017