Counsel:
R.S.M. Arthurs and Barry Mah Ming, for the petitioner.
M. Hutchison, for the respondent.
H. Henderson, for the Diocese of Saskatchewan of the Anglican Church of Canada.
¶ 1 RUTTAN J.:— The circumstances which give rise to this petition concern the corporate life of one of the residuary beneficiaries of the estate of Hugh Martyn Sibbald, Deceased, i.e. the respondent herein, the Boy Scouts of Canada (Edmonton Region) Foundation, hereinafter referred to as "the Foundation".
¶ 2 The Foundation was incorporated under the Companies Act of Alberta on October 3, 1967. On September 14, 1974 it was struck off the register and dissolved for failure to file an annual return for two or more consecutive years pursuant to s. 188 of the Companies Act of Alberta, R.S.A. 1970, c.6O and amendments thereto. On December 29, 1976 it was restored to the register of Companies pursuant to s. 189(1) of the said Companies Act and is presently in good standing on the records of the Registrar of Companies. Thus at the date of death of the testator, the Foundation had been dissolved, although it was subsequently restored to the Register.
¶ 3 Two questions arise concerning the right of the Foundation to take its share in the estate:
| (1) |
Is the Foundation entitled to one of the five equal shares in the residue of the estate of Hugh Martyn Sibbald, Deceased? |
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| (2) |
If it is not so entitled, who is entitled to such share? |
¶ 4 In simple terms the issue to be decided is whether the right of the Foundation to its share and residue became vested at the time of death of the testator only if the Foundation was a beneficiary in whom the legacy could vest at that time, and failed if the beneficiary was legally dead, or whether the subsequent revival of the beneficiary to corporate life was sufficient to relate back to and validate the vesting of the legacy as if the company was available to take at the date of the testator's death.
¶ 5 Some relevant facts upon which the petition is based are as follows:
| 1. |
Hugh Martyn Sibbald was born on December 8, 1886 near Lake Simcoe, Ontario, and died on April 19, 1976 at Victoria, British Columbia. |
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| 2. |
On November 24, 1967 he executed his Last Will and Testament, and on February 7, 1972 and April 12, 1972 respectively, he executed Codicils to his will. Probate of his Will and Codicils was granted to his executor, Montreal Trust Company, on or about June 15, 1976. |
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| 3. |
On page 7 of his will he named as one of five equal residuary beneficiaries the Diocese of Saskatchewan of the Anglican Church of Canada for the Superannuation Fund for retired clergy. |
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| 4. |
On page 2 of his Codicil dated February 7, 1972 he substituted the Foundation as one of the residuary beneficiaries in place of the aforesaid Diocese of Saskatchewan of the Anglican Church of Canada for the Superannuation Fund for retired clergy. |
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| 5. |
The deceased was resident and domiciled in Victoria British Columbia, at the date of his death and at the dates of making his Will and Codicils. |
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| 6. |
The other four residuary beneficiaries are: |
| (1) |
The Rector and Church Wardens of the Church of St. George the Martyr, |
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| (2) |
The Trustees of the Diocese of Saskatchewan of the Anglican Church of Canada, |
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| (3) |
The Governing Council of the Salvation Army, Canada West, |
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| (4) |
The Canadian Red Cross Society. |
| 7. |
In addition to the Foundation, there are three other institutions relating to scouting and legally recognized in Alberta. They are described below, the first of which is incorporated under the Companies Act of Alberta, and the second and third of which are constituted under the Societies Act of Alberta: |
| (1) |
Calgary Scout Foundation, |
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| (2) |
Property Society for the Edmonton Region Boy Scouts, |
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| (3) |
The Boy Scouts Association Property Society of Alberta. |
| 8. |
The testator, Hugh Martyn Sibbald, had a special connection to the Edmonton area in that for a number of years prior to his retirement to Victoria British Columbia, he lived in Edmonton, Alberta and conducted a business there. |
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| 9. |
Though the Foundation was not struck off the Register until 1974, it was in fact inoperative for several years before that and had in fact filed no annual returns nor any lists of directors nor held any meetings since 1970. |
¶ 6 In paragraph 12 of the statement of Facts contained in the petition, reference is made to promoting the affairs of the Foundation with a view to developing a fund to support scouting in the Edmonton region. In fact the fund that was promoted amounted only to some $530.00 from inter vivos contributions. The real intent of the incorporation was to build up funds from legacies from estates, the capital to be kept intact and separate from the Boy Scouts Council of the Edmonton Region, with the intent of using the interest from that capital fund for scouting purposes.
¶ 7 It is necessary to keep distinct the difference between the "Foundation" which was a corporation established solely to accumulate capital, and the "Council", the operating body for scouting in the Edmonton area. No funds, either inter vivos or by way of estate, were collected by the "Foundation" or its officers after 1971.
¶ 8 Counsel for the Foundation did suggest the company had continued to operate, developing a fund to support scouting activities, and was in fact in receipt of monies from another estate i.e. the Bailey estate. In fact, however, when the Bailey estate did come in, there was no procedure or organization to notify officers of the Foundation, and the whole matter was handled not by or on behalf of the Foundation, but by the Council which appropriated the funds for scouting operations in Edmonton. The explanation for the Bailey estate transactions was given by Mr. Matheson, now the President of the Foundation, who revealed that queries about the Bailey estate led to the discovery that the Foundation itself had been dissolved. He says in his discovery:
| "89. Q. |
Well, when did the Directors become aware that this default had taken place? |
| A. |
In a discussion with the Directors -- the Directors didn't become aware of it until I was advised in the fall of 1976, to take the steps necessary to have the company restored. |
| 90. | Q. |
How did the Directors find this out? |
| A. |
Well, it was -- I think the first notice concerning it was when the Edmonton Regional Director or Mr. Jenkins phoned me and asked me about the bequest of the Bailey Estate and it was relative to the annual audit in the spring of June or July of 1976. And he pointed out to me that the auditors were asking about this; what should be done about this bequest. So I had to point out to him that the bequest was clearly for the Edmonton Regional Council Foundation and had to be in the Foundation's account. That was the first time I had ever heard of it. He then made the necessary investigations and enquiries, and that is when Mr. Jenkins found out that the Foundation was in fact no longer on the register." |
¶ 9 In fact all the negotiations re the Bailey estate legacy and the releases given to the Trustee of that estate, i.e. the Canada Permanent Trust Company, were handled by Mr. Robert Jenkins, Secretary of the Edmonton Regional Council. Mr. Matheson at his discovery again, at question 122 said:
| "122. | Q. |
Who would have been authorized to the release? |
| A. |
I would have to think Bob Jenkins executed as the Secretary of the Edmonton Regional Council, but unfortunately, as I pointed out, the Edmonton Regional Council at that time appeared to feel that everything in this category was strictly Edmonton Regional Council and they were treating it as such." |
¶ 10 So the Foundation did not carry on any activities, not even to the point of accepting an estate legacy, until Mr. Matheson realized they had been struck off the Register and had to take steps to revive the company.
¶ 11 Mr. Hugh Henderson appearing as counsel for the Diocese of Saskatchewan of the Anglican Church of Canada, said that while he agreed the Foundation was revived, and pursuant to the statute, is reconstituted a corporate body, still in fact it was moribund for six years and in fact was truthfully a candidate for total irrevocable dissolution.
¶ 12 But the reason for the lapse is simply through inadvertence. Mr. Matheson explains it again in his discovery at Question 62 in these words:
| "62. Q. |
Yes. Can you tell me, Mr. Matheson, what arrangements the Directors had with the office staff to ensure that matters of this time were properly observed? |
| A. |
The Directors of the Foundation had a relatively, I would say, loose association with the staff principally because the Directors of the Foundation were very busy men in the city and really were not involved in the day to day aspects in scouting in the city. They weren't in the same category as the council itself who meet regularly in the Council building, Edmonton Regional council's own building, so the Foundation itself and its Directors were dependent on the Secretary to set up the annual meetings and provide for returns and take all of the steps necessary to ensure the continuing activities aud existence of the Foundation." |
As I said to Mr. Henderson during the course of his argument, while the Foundation may well have been a candidate for real dissolution had that matter been put to the Court at that time, the fact is that the company was reinstated. The dissolution between the period of 1974 to 1976 was, as defined in some of the cases, "technical" or "qualified".
¶ 13 Mr. Henderson emphasizes that the order reviving the company merely states:
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"It is hereby ordered that the above named company be restored to the Register of Companies upon a copy of this Order being filed with the Registrar of Companies within Two (2) weeks of the date of this Order and the lawful requirements of the said Registrar being fulfilled." |
There is no reference to any specific right or liability being revived and all that the section does really is in a general way to revive the position in which the company found itself at the date of being struck off. Mr. Henderson submits this reinforces his argument that the order for reviving the company does not revive or restore or bestow a right which the company might have had had it stayed on the Register, and which emerged during the dissolution. Thus Mr. Henderson appears to be saying that as between the date of striking off and restoration, the company can be said to have had no existence and thus is unable to have acquired any rights during that hiatus.
¶ 14 But as counsel for the Foundation points out, the plain language of the statute, s. 189, reads as follows:
| "189. (1) |
... the court, on the application of the company ... may, if satisfied that the company gas at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the company to be restored to the register, and upon a copy of the order being filed with the Registrar the company shall be deemed to have continued in existence, ... as if it had not been struck off, and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as possible as if the company had not been struck off, but without prejudice to the rights of parties acquired prior to the date on which the company is restored to the register." |
¶ 15 Two phrases of s. 189 are of particular significance:
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"the company shall be deemed to have continued in existence" |
and
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"... but without prejudice to the rights of parties acquired prior to the date on which the company is restored to the Register." |
¶ 16 Counsel for the petitioner said one possible interpretation of this "deeming provision" is that it merely provides for a presumption that the company has continued in existence, rather than conclusively deeming the company to have continued in existence. Thus if the presumption is rebutted in some particular case the company will not be deemed to have remained in existence, i.e. for that period of time when a right was created such as a vesting right in an estate.
¶ 17 I agree that what is meant by "deemed" depends upon the circumstances in each case. The phrase "shall be deemed" was considered by Mr. Justice Sheppard of our Court of Appeal in Credit Foncier Franco-Canadien v. Bennet et ux, 43 W.W.R. 545 at p.548, where he said in part, quoting from Mr. Justice Schultz of the Manitoba Court of Appeal:
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"I think a consideration of these cases indicates that in deciding whether or not the use of the words `deem' or `deemed' establishes a conclusive or a rebuttable presumption depends largely upon the context in which they are used, always bearing in mind the purpose to be served by the statue and the necessity of ensuring that such service is served." |
¶ 18 Here I find that s. 189 of the Statute and the order made thereunder established a conclusive rather than a rebuttable presumption that the company continued in existence, so that not only rights which previously existed but rights which were acquired during the period of hiatus could retroactively become and belong part of the property of the corporation.
¶ 19 This "conclusive" presumption does not conflict with the protection of third parties as referred to in s. 189 of the Act, i.e.,
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"without prejudice to the rights of parties acquired prior to the date on which the company is restored to the register." |
¶ 20 The rights referred to are those which third parties have acquired in dealing with the company during the period between the dissolution and restoration.
¶ 21 There are three cases from British Columbia in which the rights of third parties have been considered. In British Columbia Thoroughbred Association v. Brighouse et al [1922] 3 W.W.R. 665, a horse racing association incorporated as a company, acquired a lease of land for the carrying on of race meets. After a period of financial depression, and the Great War ensuing, the company's affairs became disorganized and it was eventually struck off the register. Prior to the date on which it was struck off, the lessor's heir had supervened to re-enter and take possession of the leased land. The land was then leased to a third party who developed it and profited. The company was restored to the register by judicial order on September 29, 1920 and endeavoured to set up that the re-entry and repossession of the land occurred during the dissolution and that the restoration had the effect of re-clothing it with its lease.
¶ 22 It was held that the re-entry was legal and occurred prior to the date of dissolution so that the restoration of the company to the register did not revest the lease in the company. Mr. Justice Galliher, while agreeing that the entry was legal, expressed the opinion that even if the re-entry occurred during the period of dissolution, the restoration did not revive the company's rights under the lease, as the Act does not mean that companies may be restored to their original position without regard to the rights of others that may intervene. He said at page 669:
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"It could not be the intention of the Legislature and we should not so regard it, unless expressed in apt words, that rights revived which had become forfeited and which in consequence had been acquired by others." |
¶ 23 There of course His Lordship was referring to the lease which upon re-entry had been acquired by the original lessor or others claiming through them. Mr. Justice McPhillips, while agreeing that the rights of third parties must be protected, held that the effect of the revivor of the company was to re-clothe the company with all its assets subject to intervening rights of third parties, and as between the original parties, the lessor and the lessee, the demise would revive and it would only be subject to the existing equities by way of subleases affecting innocent third parties. He said the dissolution therefore was merely a technical dissolution.
¶ 24 The significance in this case, whether one follows the dicta of Mr. Justice Galliher or that of Mr. Justice McPhillips, is that both judges were discussing a right acquired by the third parties in the dissolution period as against the company itself. In the case at bar the "third parties", i.e. the Diocese and the other residual legatees, would take only if the Foundation was incapable of taking. Third parties did not acquire rights during that period in any dealing with the Foundation. They stood to gain, i.e. to acquire a right only at the expense of the company. If the right is not granted to them but retained for the company they are in exactly the same position as they would have been had the company never been dissolved.
¶ 25 The meaning to be ascribed to "third party rights" is discussed in the second case in British Columbia, which went to the Supreme Court of Canada: Attorney-General of British Columbia v. The Royal Bank of Canada [1937] S.C.R.459. This was a case where the Province of British Columbia claimed as bona vacantia a bank account standing to the credit of a company known as the Island Amusement Company Limited, when its name was stricken from the register under the proviso of the Companies Act of 1924, and was restored later under the provisions of the 1929 Act. It was held that such a company while dissolved, could not be considered to be dead for all purposes when inter alia by the very part of the Act which refers to dissolution provision is also made enabling the company to apply to court for an order of revivor, with the express enactment that upon the order being made "the company shall be deemed to have continued in existence ... as if it had not been struck off".
¶ 26 In discussing the without prejudice clause, reflecting the rights of third parties, Mr. Justice Davis had this to say at page 477:
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"... it becomes apparent that the without prejudice clause in the statute, and which is found in the order restoring the respondent company, is intended to preserve legitimate claims of third parties which have arisen subsequent to the date that the company was stricken off the register because officers and agents of the company may not have heard of the striking of the name of the company from the register and may have gone ahead for some time carrying on the operations of the company in absolute good faith without notice or knowledge that the Registrar had stricken the name of the company off the register. That I believe is a fair interpretation to be put upon the without prejudice clause." |
¶ 27 The third and most recent decision is that of Re Lincoln Mining Syndicate Limited v. Reginam, reported first at the trial level in [1958] 24 W.W.R. 545; appeal being reported at 26 W.W.R. 143, and the further appeal to the Supreme Court of Canada being reported in [1959] S.C.R.736.
¶ 28 That case also involved a claim to assets left by a company when it was struck off the register, but the property involved was not personal property as in the Island Amusement Company case, but land. The claim was not to bona vacantia but by way of escheats under the Escheats Act of British Columbia.
¶ 29 The case came first before me as trial judge, and following the Attorney-General of British Columbia v. The Royal Bank of Canada case (supra) I held that the company, i.e. the Lincoln Mining Syndicate Limited, having been restored to the register within the twenty year limit allowed by the Companies Act, was not "dead for all purposes" so as to forfeit its goods to the Crown as bona vacantia. However, in that particular case the Crown's claim was by escheat, and I held that the Escheats Act applied in favour of the Crown as against any type of dissolution of a company that continued for more than one year.
¶ 30 In reversing my judgment, the majority of the Court of Appeal held the Escheats Act did not apply to companies restored having only been struck off the register and not dissolved after liquidation, i.e. having been struck off only for failure to file returns. The Court of Appeal in its decision said the Companies Act applied and followed the decision of Attorney-General of British Columbia v. The Royal Bank of Canada case.
¶ 31 The Supreme Court of Canada by a majority reversed the Court of Appeal, restoring my judgment, on the ground that the Escheats Act here governed, since its particular enactments superseded the general provisions of s. 209 (as it then was) of the Companies Act. It was held that once the year provided for in that Act, following the dissolution, had expired, the escheat was absolute.
¶ 32 The significance of all these judgments on appeal is that there was agreement following the Attorney-General of British Columbia v. The Royal Bank of Canada case, that there was a distinction between a company that had been dissolved under s. 230 of the Act after liquidation, and a company merely struck off the register under s. 209 of the Act. Even though dissolved by liquidation, a company may still be revived but it does so without any retrospective rights. The distinction was described in these words by Mr. Justice Davey at p.151 of 26 W.W.R.:
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"On that point, the House of Lords has held that an order under the section corresponding to our sec. 23O(1)(k), declaring a dissolution to have been void, has no retrospective operation, but that the statutory consequences of revival take effect only from date of revival: Morris v. Morris (1927) A.C. 257, 96 LJ Ch 253. Consequently it would seem doubtful if such an order would be sufficient to undo a prior escheat. On the other hand, revival under our sec.209 and its English equivalent operates retrospectively to restore a company to all its rights as if it had never been dissolved: Atty.-Gen. of B.C. v. Royal Bank and Island Amusement Co., supra; and Tyman's Ltd. v. Craven, supra." |
¶ 33 So in effect the decision of all courts in the Lincoln Mining Syndicate case following the Supreme Court of Canada's decision in the Island Amusement case, conclude that while revival from a dissolution after liquidation takes effect only from the date of revival, revival under s. 189 of the Alberta Act (or what was then s. 209 of the B.C. Act),
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"operates retrospectively to restore a company to all its rights as if it had never been dissolved." |
¶ 34 My answer to the first question on the petition therefore is in the affirmative.
¶ 35 In view of my decision on Question Number 1, it is unnecessary to consider the alternative possible dispositions to arise from the finding that the legacy to the Foundation has lapsed. However, in courtesy to the excellent and exhaustive submission by counsel, I feel I should comment on the possible answers to Question Number 2.
¶ 36 Mr. Henderson submitted first, that in the event of lapse of the legacy to the Foundation, the one-fifth share in the residue should revert to the Diocese Fund of the Anglican Church of Canada for the Superannuation fund for Retired Clergy, in accordance with the principle of "Dependent Relative Revocation". As Mr. Henderson says, the gift over to the Foundation was made possible only by revoking the gift in the same degree to the Diocese Superannuation Fund as contained in the original will. If therefore the gift by the codicil to the Foundation is ineffective, then the revocation of the original gift to the Diocese Fund is also ineffective, since the words of revocation are solely there to let in the subsequent bequest which has now failed. So if that bequest goes, so does the original word of revocation, and the effect is to restore the wording in the will itself.
¶ 37 Theobald on Wills, 12th Edition, at paragraph 160, stated the doctrine of dependent relative revocation in these words:
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"A revocation made with a view to making or reviving some other disposition will only take effect if such other disposition is effectually made or revived. It is not material that the other disposition is never put into writing. |
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But to bring the case within this doctrine it must appear that the testator considered the substitution of some valid disposition as part of the act of revocation at the time when the act was done. The mere revocation of a will, followed by a subsequent ineffectual disposition, will not set up the original will if the two acts are not so connected that it can be said that the substitution of an effectual disposition was the condition of the revocation of the original will. The point in these cases is not that a revoked will is set up again, if a subsequent disposition is ineffectual, but that the original will is not itself intended to be revoked, unless or until an effectual disposition of the property is made." |
¶ 38 Theobald emphasizes the fact that the testator's intention is all-important and that in cases of revocation the intention of the testator may always be proved by evidence.
¶ 39 This doctrine depends on the valid disposition to the foundation being part of the act of disposition, and if it applies and the gift is not effective, the revocation is not effective, and the will is restored. As counsel for the Foundation, Mr. Hutchison, points out, there is here no evidence of intention to make the first revocation dependent on the validity of the second gift. The codicil in February of 1972 first revokes the specific allocation to the Diocese Fund, then apportions that share to the Foundation.
¶ 40 Counsel for the executor suggested in argument that whether revocation in these circumstances is absolute or conditional is a matter of intention, and it is doubtful in this case if the testator ever considered as a possibility the dissolution of the Foundation. I agree that in the absence of any clear evidence of intention, the doctrine of dependent relative revocation does not apply here so as to re-vest the original gift to the Diocese Fund.
¶ 41 For the same general reason, that is the absence of any clear evidence of intention by the testator, I find that the doctrine of cy-pres does not apply either. Here I agree with the submission of Mr. Henderson that where a testator aims a legacy at a particular institution in a particular locality, there is no room for the cy-pres doctrine. One of the leading cases for this principle is that of In re Ovey. Broadbent v. Barrow (1885) 29 Ch.560. Judgment in that case in turn cites with approval this principle from the leading case of Clark v. Taylor (1853) Ch.642 at 644:
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"Now there is a distinction well settled by the authorities. There is one class of cases, in which there is a gift to charity generally, indicative of a general charitable purpose, and pointing out the mode of carrying it into effect; if that mode fails, the Court says the general purpose of charity shall be carried out. There is another class, in which the testator shews an intention, not of general charity, but to give to some particular institution: and then if it fails, because there is no such institution, the gift does not go to charity generally: that distinction is clearly recognised; and it cannot be said that wherever a gift for any charitable purpose fails, it is nevertheless to go to charity." |
¶ 42 I was referred to a recent decision by my brother Dryer, In the Matter of the Estate of Edward Dilger, Deceased, No. A771707, Vancouver Registry, January 30, 1978, not as yet reported, in which the principle of Re Ovey (supra) was distinguished. However that was a case where his Lordship found there was evidence of a general charitable purpose. Moreover the gift, although to a named institution, was to one that was an unincorporated body, and
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"ordinarily at least, a gift `to an unincorporated charity by name without more must take effect as a gift for a charitable purpose': see Vernon's Will Trusts (1972) 1 Ch.300 at 303." |
¶ 43 His Lordship goes on:
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"As pointed out in the Vernon case at page 303, even in the case of a gift to an unincorporated charity the language of the Will and the circumstances may indicate the testator's intention that the gift should not be paid if the organization named is no longer in existence (see also Finger's Will Trusts at 297); but I can find no reason for so holding here." |
¶ 44 In the present case, the named charity was an incorporated body and was incorporated for the specific purpose that it could take hold and accumulate legacies in the form of capital sums that would not be disbursed in general operations of the scouting fraternity, but maintained so that the earned income only could be devoted to scouting activities in the discretion of the directors of the Foundation. There are other scouting organizations in Canada and in the Province of Alberta, but they are not corporate entities organized as was the Foundation solely to accumulate a monetary fund.
¶ 45 Mr. Sibbald was well aware of the aims and objects of the Foundation. A good friend Mr. Parlee, one of the original directors of the Foundation, had told him of the Foundation and had given him a brochure setting out its plans and objects. There is no doubt that it was with knowledge of this information of the Foundation that Mr. Sibbald made the change in his will by execution of the First Codicil.
¶ 46 All the residuary beneficiaries named, are charities but they are all specifically named, and the Foundation in particular was exactly described as its name appears on the Register of Companies at the Province of Alberta. Mr. Sibbald knew of other scouting activities, no doubt, but he did not express any interest to benefit them generally.
¶ 47 Moreover, as Mr. Hutchison agrees in the course of his submission, a literal application of the cy-pres doctrine for the benefit of one of the other scouting organizations in Alberta, would lead to an absurd result: cy-pres is invoked because of the lapse caused by the legal, if temporary, death of the Foundation. The gift is then made to another scouting organization, although the original legatee is now alive again and in continued healthy existence by reason of the restoration order. Surely this is a bizarre situation for the application of the cy-pres doctrine.
¶ 48 Dispensing with both cy-pres and dependent relative revocation doctrines, leaves us with two alternatives: either the next of kin are entitled to the one-fifth share as in a partial intestacy, or the four remaining residuary beneficiaries described in the same clause as the Foundation, are entitled to the one-fifth share.
¶ 49 Mr. Henderson supports the gift as an equal division among the four remaining residuary legatees, on the principle that they represent a "class" and that it was Mr. Sibbald's intention that they should be so treated, and that there be no chance of an intestacy. For what constitutes a class, Mr. Henderson refers to the decision of Re Woods (1931) Ch. 138. At p.142, Mr. Justice Maugham has this to say about a class gift:
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"Prima facie, the definition of a class gift, which is to be found in Kingsbury v. Walter confines the phrase to persons who are included and comprehended under some general description and bear a certain relation to the testator. In general, but this of course is not more than a generality, a class within the meaning of the phrase as used by Lord Halsbury in that case is capable of diminution or increase, either by events prior to the testator's death or by events prior to the death of the tenant for life, as the case may be. On the other hand, it may well be that a class is not capable of increase, so that it is not necessary, in order that a gift should be one to a class, that there should be a capability of increase. This much, however, may be asserted of a gift to A., B. and C. and D., `or such of them as shall be living at my death,' that the testator is looking at them, if not as a class in the technical sense, at any rate as a group of persons who have got to be living at the death of the testator in order to take any interest under the bequest; and, if the testator is so regarding the persons named and by his codicil uses language which shows that one of the persons named is to have no benefit under the gift contained in the will, it does not, in my opinion, take a very long step to conclude that the other members of the group, using the neutral term, shall take the whole of the interest which he in the first instance was desirous of giving to those of the group who should be living at his death. In the case of a true class gift, where there is a revocation by a codicil of a gift to one of the members of the class, it is now well settled that there is no lapse, but that the whole goes to the other members of the class." |
¶ 50 I emphasize that the disposition to constitute a class gift contemplates a gift to those or such of them as shall be living at the death of the testator, in equal shares.
¶ 51 What are the facts here that could qualify these legatees as members of a class? They are all corporate charities, but otherwise there is no relationship, no similar characteristics between them, and no certain or common relationship to the testator. They are each given a one-fifth share of the residue, but there is no provision that the entire residue is to be divided among such of them as shall be living at his death. I conclude that where there is no reference to the survivors, there can be no consideration of them all as one group. The will did not provide for a class as such, but specifically divided the residuary estate into five equal shares. One-fifth portion of each residuary share was to be delivered to specific residual beneficiaries. Therefore as counsel for the Foundation says:
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"It therefore follows, logically and giving effect to the language of the will, that if the gift fails, the doctrine of cy-pres and of dependent relative revocation not being given effect to, that the one-fifth portion of the estate in question must then form a partial intestacy which would result in a very different distribution than that proposed by counsel for the Diocese." |
¶ 52 I agree and hold that such would be the situation if I held the Foundation were not entitled to take. Accordingly my answer to Question Number 2 would be to distribute to those entitled to share in a partial intestacy.
¶ 53 Counsel for the executor has asked for directions concerning the person who could give a receipt on behalf of the Foundation on payment of the legacy. I hold that in accordance with the directions respecting the other residuary beneficiaries, such a receipt can be taken from the Treasurer or other proper officer for the time being of the Foundation.
¶ 54 Costs of the executor shall be paid on a solicitor-and-client basis out of the estate. Of the other two parties involved, the Diocese was justified in initiating these proceedings but was unsuccessful in regaining the lost share in the estate. The Foundation was the expressly intended beneficiary, but due to the negligence of its officers, caused the uncertainty which justified this application. In the circumstances I do not feel justified in making a solicitor-and-client order, but direct that the costs of these two parties be payable out of the estate on a party and party basis.
RUTTAN J.
QL Update: 20040914
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