Failure of Gifts

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Compiled by Eric B. Appleby:

Generally

A gift may fail for reasons personal to the donee, such as death of the donee prior to the testator’s death. A gift may fail because the testator did not own the gifted property. A gift may fail because the gift was deemed satisfied by benefits conferred by the testator on the donee subsequent to the date of the will (this is called an ademption). Also the donee may disclaim the gift.

Implied revocation, ademption

The British Columbia Court of Appeal stated that “The doctrine [of ademption] applies as a matter of law, irrespective of the testator’s intentions in the matter, although his or her intentions are clearly relevant to the anterior question of whether the gift in question is a ‘specific’ legacy (and therefore subject to ademption), or a general one (not subject to ademption). The doctrine is also subject to the qualification that even if the gift in question is a specific legacy, it may be saved in some circumstances if the property has changed ‘in name or form only’, and still forms part of the testator’s property at the date of death.”. See Wood Estate, Re (2004), 203 B.C.A.C. 205; 332 W.A.C. 205 (C.A.). A testator left his car to his granddaughter. The car was destroyed in a car accident in which the testator died. The Nova Scotia Supreme Court held that there was an ademption and that the insurance proceeds from the destruction of the car should form part of the residue of the estate. See Phillips Estate, Re (1995), 140 N.S.R.(2d) 213; 399 A.P.R. 213 (S.C.).

Uncertainty

Gibson died testate in December 1994. Gibson in his will dated January 1960 made a specific legacy “to a bus driver of the Gray Coach Lines Limited who has the best service record with his Company and the largest family at the date of my death as certified by the Gray Coach Lines Limited …. “. The executor of the estate applied to determine whether the gift failed for uncertainty. The Ontario Superior Court held that the gift did not fail for lack of certainty, notwithstanding the numerous corporate changes of Gray Coach Lines Limited since 1960. See Gibson Estate v. Ashbury College Inc. (1999), 104 O.T.C. 305 (S.C.).

Impossibility

A testatrix made a residuary bequest for the establishment, construction and maintenance of a home for the aged. At the time of distribution, the executor believed that there were insufficient funds to carry out the testatrix’s intention. The New Brunswick Court of Queen’s Bench, Trial Division, held that the bequest did not fail for impossibility, because there was evidence that the testatrix’s intention could effectively be carried out, either by using mortgage funds for the balance needed to establish a home or building an addition to an established home. See McSweeney Estate, Re (1982), 41 N.B.R.(2d) 419; 107 A.P.R. 419 (T.D.).

Repugnancy

The issue of repugnancy was stated by the Saskatchewan Surrogate Court in Taylor Estate, Re (1982), 19 Sask.R. 361, at para. 42: “[T]he cases in which a testator after apparently conferring a benefit purports to deal with the property upon the death of the person upon whom the first benefit is conferred fall into two classes: first, those in which the later provision shows that the first taker was not intended to take absolutely, but was intended to have a life-estate only; and the second in which it was clear that the first taker was intended to take absolutely, and, therefore, the attempted gift over of all that might remain on the death of the first taker was repugnant and void, and that in each case the problem was to determine within which of the classes the particular will under consideration fell … .” A testator gave land to his children subject to a life interest in the land to his wife. The Saskatchewan Surrogate Court held that there was no repugnancy between the gifts to the children and the wife’s life interest. See Rezansoff, Re (1985), 38 Sask.R. 170 (Sur. Ct.).

Partial failure

In 1989, Ross Woodside made a will bequeathing his farm to his nephew Mark Woodside, provided that Mark pay 50% of the farm’s appraised value to Kent, Blake and Ann Woodside. The will also contained a residuary clause. In 1993, Ross sold his farm to Mark for $115,000 payable on Ross’ 65th birthday in 1995. Ross died in 1994. Mark paid the $115,000 into court pending directions. The Prince Edward Island Supreme Court, Trial Division, held: (1) that Ross’ intention was to bequeath the farm to Mark and also to bequeath 50% of the farm’s appraised value to Kent, Blake and Ann; (2) that the bequest to Mark had been adeemed but not the bequest to Kent, Blake and Ann; (3) that the $115,000 was not part of the residue and was payable to Kent, Blake and Ann. See Woodside Estate, Re (1997), 157 Nfld. & P.E.I.R. 232; 486 A.P.R. 232 (P.E.I.T.D.)

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This entry was last updated: February 13, 2017