A 2020 decision from the British Columbia Supreme Court makes clear that an agreement to leave a gift in one’s will, is a binding agreement. As such, if one breaches that agreement, the person can be held liable even during their life.
In Munro v James, 2020 BCSC 1348, the plaintiffs made an agreement with one Ms. James. Key terms of the agreement included:
- The plaintiffs, Munro and Boughy, would pay Ms. James $100,000;
- The plaintiffs would take care of her farm and ponies for the remainder of Ms. James’ life;
- In exchange for this, the plaintiffs would be allowed to live at the Ms. James’ property, and build a home on the property;
- Moreover, the plaintiffs would be entitled to Ms. James’ estate when she passed (the above terms are the “Contract”)
The plaintiffs did indeed move to the James property and took up the tasks involved in managing the farm.
Eleven years later, James changed her mind about the Contract. She said she was unhappy with the plaintiffs’ management of her farm. She notified them that she was naming someone else as her beneficiary and gave them 3 months notice that she was terminating the Contract. She then changed her will, naming a friend as the beneficiary.
The plaintiffs brought a claim against James, relying on the Contract
The Court’s decision in Munro:
The court held that the literal meaning of the Contract was clear: the parties agreed that the plaintiffs would inherit James’ estate upon her death.
The Court also affirmed that the law would award specific performance for this Contract by James. Specific performance basically refers to a declaration by the court compelling a party to perform its contractual obligations.
The Court said that James had made an anticipatory breach of the Contract. That is, even before her obligation had fallen due, she had repudiated her obligation, without justification. Since the Plaintiffs had substantially performed their side of the Contract, James must do the same. The court made a thorough examination of the plaintiffs’ actions and concluded that they had held up their end of the Contract.
Remedy imposed by the Court in Munro:
As such, the plaintiffs were entitled to specific performance, being an entitlement to receive Ms. James’ estate on her death. The Court also ordered:
- That the subject property could not be further encumbered or disposed of without consent of the plaintiffs or order of the Court; and
- That the judgment and a related mortgage between the parties to be registered on title among other things.
Contracts to make testamentary dispositions:
The decision in Munro offers an opportunity to review prior Canadian decisions on promises to leave testamentary bequests.
The overriding principle which emerges from prior cases is that, if the plaintiff can prove the existence of the agreement, the Court will enforce it. Typically, prior decisions arise from situations of a laborer, who has worked for the testator in reliance on an oral promise that the testator will leave them certain property in their will. Often, the property at issue is some piece of land or a home.
The Statute of Frauds can offer hurdles to the enforcement of a verbal agreement in relation to land, unless there has been part performance. That is, there must have been actions by the plaintiff, which are unequivocally in relation to the specific land in issue. If the Court is satisfied that the agreement has been proven, then the Court will typically order specific performance of that agreement.
In Briese v. Dugard, 1936 CarswellMan 8, [1936] 1 W.W.R. 193 (MB CA), one Mr. Streich offered to leave to the plaintiff his house, property, furniture and one half of his money, left after paying his debts, if the plaintiff should keep house for him and look after him until his death, in a manner satisfactory to him. The letters containing the offer could not be produced.
The plaintiff accepted the offer and kept house for Streich for 14 months. Then, on September 26, 1934, Streich made a will making said provision for her. The will also provided that the devises and bequests to her should be null ad void if she “shall leave me and cease to care for me.”
On February 5, 1935, plaintiff and Streich had a brief quarrel and the plaintiff left his house. On that day he made a new will which made no mention of her. On the second day after she had left him Streich realized he had made a mistake, and asked plaintiff to return. The plaintiff did so and continued her duties as housekeeper and nurse until Streich ‘s death. No wages were ever paid to the plaintiff.
The second will (which left the plaintiff nothing) was the one admitted to probate. The plaintiff sued for specific performance of the contract. The Court of Appeal held that the departure of the plaintiff from Streich’s house was not a breach of the contract which had put an end to it. Rather, it was Streich who considered himself in the wrong.
The Court held that the parties had affirmed the contract as strongly as they could by conduct. If any memorandum was needed to satisfy the Statute of Frauds , it was supplied by the above-referred-to clause in the will, which had said that the gift would be void if the plaintiff would “leave me and cease to care for me.”
The Court made clear its sense that fairness required enforcement of the agreement:
40 The plaintiff Briese was not employed for wages either fixed or on a quantum meruit . Unless she can have the house and half the money in the bank she will get nothing. She performed her part in full, and the deceased carried out his promise to the letter, but at the last repudiated it without any valid reason for doing so.
41 I would direct the entry of judgment for the plaintiff against the executor for specific performance of the contract to convey to the plaintiff the house and furniture.
For example, in Davidson Estate, Re, 1947 CarswellNB 13, 20 M.P.R. 53 (NB CA), an older man had arranged with another woman, to provide housekeeping services for him in his home.
The man did not pay her wages, but only some occasional money for herself. In 1938, the man made a will in which he gave the woman the home in which he lived, and the sum of $1,000. He showed the will to her at that time. She said that $1,000 was too small for all the work she had done, but $3,000 would be agreeable. The man agreed, and therefore wrote out the following and signed it:
This is to certify that Thomas Davidson at his death has willed Isabelle Johnson his present dwelling house on Carleton Street and Three Thousand Dollars in money.
After his death, the woman’s claim to $3,000 was disputed. A beneficiary suggested that the document had been altered, and $3,000 had been improperly inserted for $1,000.
The court agreed with the woman, and found no evidence of alteration. Thus, she was entitled to the full $3,000. What is especially interesting, is that the Court in Davidson explicitly affirmed that a contract to leave property by will, is enforceable if it can be proven:
6 There is no doubt that a contract to leave a sum of money by a will if satisfactorily proved is enforceable: Ridley v. Ridley (1865), 34 Bev. 478; Briese v. Dugard, [1936] 1 D.L.R. 723; Smith v. McGugan, 21 O.A.R. 542.
Finally, in Brownscombe v. Alberta (Public Trustee), 1969 CarswellAlta 31, [1969] S.C.R. 658, the claimant had worked for some 26 years for a disabled farmer. The claimant received little in the way of wages during the whole period but relied on repeated oral promises that the farmer would leave the farm by will to the claimant.
The farmer later died without a will. There was no written contract. The Supreme Court however held that the contract had been partly performed, and thus could be enforced, and property given to the claimant.
In short, for persons who have provided labor in response to a promised testamentary gift, the law will provide a remedy. Depending on the specific facts, such remedy would likely be available under a combination of contractual rights, proprietary estoppel or unjust enrichment.
Lessons offered by Munro:
Munro is unique, in that few (if any) prior decisions involve a court proceeding which was brought while the testator is still alive.
Munro shows that such a contract is enforceable, should the testator attempt to violate the contract. In other words, the person will be held to their promise, and lose any testamentary autonomy to decide what will happen to their estate.
From a practical view, a contract to receive property under the will of another person is not always an ideal way of proceeding. First, it is subject to various uncertainties:
- For example, what if the “testator” falls on hard financial times, and is required to dispose of certain property during their lifetime (after all, a Will operates from the date of death, and only governs what property exists as of death);
- Second, what if they go rogue and make a new secret will without disclosing it (such a will could be challenged, but that takes time and money to do so);
- Third, unless the agreement is carefully documented, providing its terms in court may take time and expense. A common thread throughout most cases of contractually promised bequests, is that the underlying agreements were drawn up without lawyers (or never put in writing at all).
Thus, in a perfect world, a labourer would instead insist on a lawyer-drawn contract, which provided for specific value to be exchanged by the other side, during the lifetime of the other party. However, all lawyers find their client’s situation as they come. Moreover, it may be that the person one is dealing with, will not agree to anything but a promise to leave property by their will.
Thus, for such circumstances, the outcome in Munro proves that a valuable judicial remedy exists for those who have been promised property under the will of another person. While Munro was a decision of a British Columbia court, there appeared to be nothing in it that was specific to British Columbia law or legislation. As such, it would be open to other Canadian courts to follow its lead.