All About Estates

Buying the (Family) Farm?

This blog was co-authored with Ronald Neal, student-at-law.

John the Farmer wanted to buy the family farm after his mother died. His siblings wanted to sell it on the open market. In Janicek v. Janicek, 2018 ONSC 681, the court had to decide which outcome the will dictated.

Background

The Deceased passed away on October 11, 2012 and left the fate of the family farm in the hands of her estate trustees (some, but not all, of her children).

The Deceased wanted the property to remain in the family and expressly gave preference to purchase the property at a discounted rate within a one year time frame following her passing to any “combination” of her children. Once that one year deadline passed, however, and in the very same clause, she directed that the property was to be sold on the open market with the sale proceeds being unequally distributed amongst her children.

One of the Deceased’s children and a beneficiary under the will, John, submitted that the farm should be sold to him at the discounted rate provided for in the will, despite the fact that the one year deadline had passed him by. John continued to occupy and farm the property since the passing of his mother. If the farm was sold on the open market, John received less of the net sale proceeds under the will.

Meanwhile, the estate trustees (other children of the Deceased), had made several attempts to dispose of the property following the one year deadline but to no avail. The estate trustee’s view was that John was in no small part responsible for this lack of disposition.

Given the above, the estate trustees sought direction and advice from the Ontario Superior Court of Justice.

Interpretation of the Will

The task before Justice J.C. George was to discern the intention of the Deceased in respect of how the farm should be sold.

First, he concluded that the provision in the clause that stipulated that the farm was to be kept in the family and sold to a child or combination of children at a discount of an appraised value was void for uncertainty. This conclusion turned on the finding that the will was unclear with regard to what was to happen when there were competing offers made within a year of death (which was the case here).

Given his conclusion that the first part of the clause regarding the sale of the farm was void for uncertainty, Justice George then turned his mind to whether the remainder of the clause (i.e. that the farm was to be sold on the open market with the proceeds being distributed unequally between the Deceased’s children) could be saved, or whether the net sale proceeds of the farm would fall into the residue of the estate pursuant to the Succession Law Reform Act: a failed bequest falls into the residue unless a contrary intention is demonstrated in the will.

Justice George found that a contrary intention appeared in the clause so that allowing the farm to fall into the residue would run contrary to the Deceased’s clearly articulated intention. Justice George held that “while there is uncertainty about what the Applicants are to do within that first year option period, there is no ambiguity whatsoever in respect of how the property was to be disposed of if a sale could not be accomplished in that time.”

Justice George concluded that the Deceased intended the family farm to be sold at the estate trustee’s absolute discretion if the time deadlines were not met, for any reason, and that there was to be an unequal distribution following the sale. “The unequal distribution she directs”, his Honour emphasised, “[was] in no way dependent on the form of the sale, or price.”

As a result, John was denied his discounted purchase and was ultimately ordered to vacate the property. His farming career, at least for the time being, was thus put out to pasture.

About Jacob Kaufman
Jacob Kaufman is a lawyer with de VRIES LITIGATION LLP. Jacob assists clients with will challenges, dependant support claims, guardianship applications, power of attorney disputes and other estate and trust litigation matters. He has appeared before various levels of court, including the Superior Court of Justice and the Court of Appeal for Ontario. Jacob obtained his law degree from the University of Western Ontario (with distinction) after completing an Honours Bachelor of Arts degree from Queen’s University in history (with distinction). He has written articles for the International Law Office, Legal Alert and the OBA’s Deadbeat. Email: jkaufman@devrieslitigation.com

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