Will vesting male friend interest in testator’s house grants life interest, not licence: court

The Court of Appeal of Ontario has partially granted an appeal filed by a male friend after finding that a will vesting him an interest in the testator’s house grants him a life interest rather than a licence.

In Barsoski Estate v. Wesley, 2022 ONCA 399, the testator Diane Barsoski died in June 2017. She and the appellant, Robert Wesley, had been close friends for a long time. In her will, the testator ordered the respondent, Susan Ann Carlyle, to hold her house and its contents in London as a home for the appellant during his lifetime. She also created a $500,000 fund to ensure the house would be maintained while the appellant lived there.

Her will also contained a condition that if the applicant no longer intended to live in the house, the fund should be used for his expenses, and the house and its contents should be sold.

An investigation revealed that the appellant had never lived in the house since he worked in Toronto and Sault Ste. Marie. However, he claimed he used the house as his primary residence for matters like his driver’s licence and income tax and spent his weekends there once or twice a month.

In her application with the Ontario Superior Court, the respondent sought to determine two issues: (1) the nature of the proprietary interest in the house granted to the appellant, and (2) whether the condition on the appellant’s interest in the house was void for uncertainty.

The judge found that the will gives the appellant a licence to occupy the house instead of a vested life interest. She also found that the interest was given to a friend, not a spouse or common-law spouse, distinguishing it from court decisions relied upon by the respondent.

Moreover, the judge was satisfied that the terms of the condition – if the applicant no longer intended to live in the house, the house and its contents should be sold − created uncertainty since “it was impossible to define, on the terms of this will, what it means to live in the house.” Thus, the entire gift failed.

In his appeal, the appellant argued that the judge erred in concluding that the will be intended to grant him a licence in the house instead of a life interest and that the entire gift failed due to the uncertainty of the condition.

In partially granting the appeal, the Court of Appeal ruled that while the judge correctly found that the condition was void for uncertainty, she erred in her finding that the interest bestowed was a licence instead of a life interest.

According to the court, the judge erred in principle by distinguishing the present case from those in which interests were granted to a spouse or common-law spouse rather than a friend.

First, the court determined that the judge failed to consider the evidence that the testator and the appellant were close friends who regarded each other as family.

“This evidence was noted by the judge and was not disputed by the parties,” Justice Alison Harvison Young wrote. “The appellant affirms that the testator advised him that he could live in her house on his retirement to remember her love for the rest of his life.”

Second, in excluding the appellant’s relationship with the testator from the categories of family members, the court ruled that the judge relied on and contributed to the “perpetuation of a now outmoded and exclusionary view of family.”

“Family relationships can exist when there is neither marriage nor a parent-child ancestral relationship,” Harvison Young wrote. “Unmarried couples of the opposite sex or same sex may be regarded as members of the same family for social or legal purposes.”

Third, given the uncontested evidence that the testator regarded the appellant as family, the court held that there appeared no reason not to affect her choice since testamentary freedom continues to operate as an underlying principle in the law.

 “Treating this will differently than it would have been treated had the testator and the appellant been romantic partners violates that principle unnecessarily by failing to give effect to the context as the testator saw it,” Harvison Young wrote.

Fourth, the court found that the judge’s decision “effectively ignored that courts have given effect to life interests to friends.”

“In this modern age, there is no basis for any presumption favouring a license rather than a life interest when the intended beneficiary is a friend,” Harvison Young wrote.

However, the court had not seen any error in the judge’s conclusion that the terms created a condition subsequent and that the condition was void for uncertainty.

The court said that given her knowledge that the applicant would not be living in the house due to his employment outside London, the evidence supported the premise that the testator contemplated that the terms were after the vesting of the gift.

“Accordingly, the condition must be construed as a condition subsequent because she could not have intended that her gift would come to its natural end as soon as it vested,” Harvison Young wrote.

The court concluded that the condition subsequent was not integral to the interest granted to the appellant, and therefore, the gift “survives free and clear of any condition.”