Appeal from order denying interest to beneficiaries of estate on their legacies

Administrative law – Judicial review – Compliance with legislation – Appeals – Standard of review – Correctness

Morris v. Rivard, [2018] O.J. No. 1016, 2018 ONCA 181, Ontario Court of Appeal, February 26, 2018, P.S. Rouleau, G.T. Trotter, D. Paciocco JJ.A.

Alexander Rivard had three children, one son and two daughters.

During his lifetime, Mr. Rivard gave his son a tract of farmland.

In a will executed August 1, 2013, Mr. Rivard provided for similar sized tracts of farmland be given to each of his daughters, with the balance of the estate to be divided equally between the three children.

Then, in another will executed August 24, 2013, the last executed before he died, Mr. Rivard did not leave farmland to his daughters. Instead, the daughters were given legacies of money in the amount of $530,000 each.

The daughters challenged the August 24 will. That application was dismissed. That challenge to the will held up the division of the estate from 2013 to 2016.

The daughters then claimed they were entitled to interest on their legacies. On an application for interest, the application judge held no interest should be paid.

On appeal to the Ontario Court of Appeal, the issue was whether interest was payable under the common law “rule of convenience.”

The “rule of convenience” provides, in accordance with one of the maxims of equity, that as beneficiaries should enjoy the earning power of their legacies by at least the anniversary date of the testator’s death, where that enjoyment is postponed and the testator has not provided an alternative date for payment of the legacy, interest is to be paid.

The Court found the “rule of convenience” applied and the application judge erred in exercising discretion not to apply the rule and to deny interest. That discretion could only be exercised to deny interest in the “clearest of cases.” The Court held a case in which the distribution of a legacy is delayed because of an appropriately conducted, non-frivolous challenge to a will, is not one of the clearest of cases, and not the kind of case that warrants recognizing a discretion not supported in the law.

The Court ordered interest be paid at a rate of 5% simple interest that the “rule of convenience” carries at common law, from the first anniversary of date of their father’s death.

This case was digested by Joel A. Morris, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Joel A. Morris at jmorris@harpergrey.com.

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