The Paul Sugar Palliative Support Foundation v. Creighton Estate

2017 BCSC 502 The Paul Sugar Palliative Support Foundation v. Creighton Estate IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: The Paul Sugar Palliative Support Foundation v. Creighton Estate, 2017 BCSC 502 Date: 20170227 Docket: S171000 Registry: Vancouver Between: The Paul Sugar Palliative Support Foundation Petitioner And Valorie Pawson as Executor and Trustee of the Estate of Denis William Harvie Creighton, Vancouver Foundation and Lions Gate Hospital Foundation Respondents Before: The Honourable Madam Justice Gray Oral Reasons for Judgment In Chambers Counsel for the Petitioner: R.M. Morse Counsel for the Respondent Estate: K. Geddes Counsel for the Respondent Vancouver Foundation H.H. Low, Q.C. For the Respondent Lions Gate Hospital Foundation: No appearance Place and Date of Trial/Hearing: Vancouver, B.C. February 27, 2017 Place and Date of Judgment: Vancouver, B.C. February 27, 2017 [1] THE COURT: The matter before me is a petition. It relates to the will of the deceased, Denis Creighton. [2] The gifts in question are about $4 million, as I understand it. There are two gifts. One is to the Lions Gate Hospital Foundation, and there is no issue about that. That gift is going to be used for support of the chemotherapy clinic. But a second gift was to the Vancouver Foundation, and the will says "to be added to the capital of The Paul Sugar Palliative Support Foundation". [3] There are two issues before me. One is how the gift should be handled, and that raises questions of construction and possibly rectification of the will, and the other question is costs relating to this petition. [4] I am going to make these reasons for judgment relatively brief, but I will say this. Mr. Creighton's wife's suffered breast cancer. Mr. Creighton was grateful to some people who assisted her and who were involved with what became The Paul Sugar Palliative Support Foundation. I will refer to it as "PSPSF". [5] In May of 2015, the year he wrote his will and later died, Mr. Creighton gave one million dollars to The Paul Sugar Palliative Support group and it was used immediately. [6] The Vancouver Foundation is a creature of statute, and the Vancouver Foundation Act S.B.C. 2000, c. 32, governs it. [7] The clause in the will which is in question is "3.2 Residue of Estate": I DIRECT my Trustees to divide the residue of my Estate into two equal shares and to pay or transfer one share to the LION'S GATE HOSPITAL FOUNDATION [and it gives a charitable registration number] with directions that the gift be used by the Foundation for the support of the chemotherapy clinic at Lions Gate Hospital; and the other such share will be paid or transferred to the VANCOUVER FOUNDATION [and it gives a charitable registration number] to be added to the capital of the Paul Sugar Palliative Support Foundation. [8] I have always understood that the Vancouver Foundation was an organization that, for the most part, held funds and distributed funds for charitable purposes, and that it handled various endowments. That is just a general understanding. [9] In this particular case, there was a deed of gift entered into with the Vancouver Foundation. It is entitled "Deed of Gift Start-up Donor-Advised Fund", and it begins: We wish to establish a permanent fund (the "Fund") with Vancouver Foundation. $1,000 being the initiating capital of the Fund. And then it says in a footnote: Vancouver Foundation requires that a minimum of $10,000.00 be contributed to a fund before it is fully constituted. Accordingly, until a minimum of $10,000.00 has been contributed by the donor or others to this Fund, it shall be known as a "Start-up Fund" and shall be subject to the terms and conditions attached hereto as Schedule "A". [10] Among the terms of the Fund are that it shall be known as "The Paul Sugar Palliative Support Foundation" but it can be changed, and item 2 says the Vancouver Foundation "shall hold the capital of the fund permanently, and shall invest and administer it in accordance with the provisions of the Vancouver Foundation Act". [11] The real competition in the interpretation of the will is whether the funds for PSPSF are funds that have to be held permanently, with the charitable group only getting income earned on that amount, or whether all the funds would be available to the charitable organization to use whenever the organization chooses. [12] I am not going to take the time to try to fairly set out the arguments I have been given at length, but I will say this. The position of PSPSF, the petitioner, is that this quite clearly was a gift to them to be used however and whenever they wish. Their position is that, although the will said to "add it to the capital" of the PSPSF, that did not mean anything significant. [13] That position is supported by the executor. The Vancouver Foundation takes no position. The Lions Gate Hospital Foundation takes no position except with respect to costs. [14] I am satisfied that the proper interpretation of this clause in the circumstances of this testator is that the money was to be available to be used by the charitable organization to PSPSF. In doing that, I am relying on what is sometimes called the "armchair rule", where the court has to endeavour to place itself in the position of the testator at the time when the last will was made, and give due weight to the circumstances. Among the circumstances here are that the will was prepared by the executor who is a lawyer, and who has given affidavit evidence essentially to the effect that she understood the gift was going to be given to PSPSF with no limitations, and that by using the word "capital", there was not intended to be any limitation on how the funds were to be used. [15] I am satisfied that that is the proper interpretation. If I was wrong in that, I would rectify the will pursuant to WESA, essentially on the basis of the same evidence. That is under s. 59 of the Wills, Estates and Succession Act, S.B.C. 2009, item 1. [16] As an aside, I will say that, if I have to rectify, there is a timing issue. The court can grant leave to make an application more than 180 days from the date of the representation and grant. I grant that leave if it is necessary. [17] The bulk of the submissions before me were really on the issue of how reasonable is it that the Vancouver Foundation did not consent to an order that the gift be construed as I have just determined. [18] Essentially, Ms. Low's submissions on behalf of the Vancouver Foundation are that it has to be careful. This is a potential sum of $2 million. Section 11 of the Vancouver Foundation Act says that the Board must carry out the direction of donors if definite directions in writing are given, and at s. 12(1) says: In the absence of any direction by the donor, all contributions are to be invested and the net income devoted in perpetuity for charitable purposes as provided in this Act, and subject to this section. [19] So the position of the petitioner and the executor has been that it was unreasonable for the Vancouver Foundation to not consent to an order in the terms that I am prepared to make about how the gift will be handled. [20] I do not agree. In my view, the use of the term "capital" did give rise to some concern, and it is only after reading the affidavits that I am prepared to apply the "armchair rule" and construe the will as I have done. [21] In my view, there is a distinction often made between capital being held in an endowment with only what is generated from that money being used for charitable purposes, or alternatively, giving someone a gift that is not made into an endowment and held in perpetuity, but funds that can be used immediately. I do not have dictionary definitions here and it is not necessary for me to look for those. I accept that I have heard very forceful submissions that the word "capital" really did not mean anything except the money was going to go to this charity. I struggle with that and I would have found it ambiguous but for the additional affidavit evidence. [22] Given that, I must make an order about what should be done with costs. First, I will say that the costs should not come out of the share that belongs to the Lions Gate Hospital Foundation. The lack of clarity in the will on this point arises from the words used for the gift to PSPSF, and in my view it is not appropriate for that to be visited upon Lions Gate Hospital. [23] So then the question is, should the costs associated with the construction of this will be something that can be recovered from the estate, that is, from the gift to PSPSF. The position of the Vancouver Foundation is essentially that arose because of the terms of the will, we have to do the right thing, and so we should get our legal costs for ensuring that the right thing is done. [24] The position of the petitioner and of the executor is that it was not a meritorious position that Vancouver Foundation was taking, and that this has given rise to unfortunate costs which, if the Vancouver Foundation gets its costs, will diminish the gift. [25] I am not going to take the time to go through all the case law, but as Ms. Low said, this is not a situation where Vancouver Foundation was competing for some money. It was not seeking to have the money for its own personal benefit. It was simply trying to deal with the gift appropriately as to whether it must be held in perpetuity or could be immediately dispersed. [26] In those circumstances, in my view, it was acceptable for Vancouver Foundation to insist that the matter had to be considered by a judge and an order made on the petition. This is not a case where beneficiaries are fighting each other to get the benefit. It is much more the kind of case referred to in my decision in Woodward v. Grant, 2007 BCSC 1549, requiring construing the terms of the will where the language required clarification by the court. [27] I am going to make the order that the relevant costs should be from the gift to PSPSF. Is that clear? [28] MS. LOW: My Lady, could we get direction on the basis for the awarded costs out of that gift? [29] THE COURT: And what was your position? [30] MS. LOW: That it would be full indemnity on a reasonable basis. [31] THE COURT: Does anybody want to take issue with that? [32] MS. GEDDES: No, I agree with that submission, My Lady. [33] MS. MORSE: Well, I take issue with it, but at full indemnity, there are exceptional costs. I know in estate matters, they often are on the full indemnity basis, but I would still take the position that special costs or full indemnity costs are the exception and not the rule. [34] THE COURT: All right. In this case, in my view, it should be full indemnity on a reasonable basis. [35] In summary, the gift is unfettered, and it is not necessary to hold the funds in perpetuity, and the parties are entitled to their costs on a full indemnity reasonable basis scale amount from the gift to PSPSF. [36] All right. Thank you, counsel. "Gray J."