In Haddock v. Haddock (2025 ONSC 6287), the court was asked to interpret a clause in the deceased’s 2012 will dealing with a bequest of her cottage to one of her three surviving children. The deceased died in 2022, leaving her children as co-estate trustees. Her estate consisted primarily of the cottage and TD Bank investment accounts. The will provided a specific gift to the grandchildren, divided the residue equally among the three children, and granted the cottage to the respondent (her son) on the condition that its appraised value be deducted from his share of the estate.

At the time of death, the cottage was appraised at $1,375,000 – an amount far exceeding the respondents one-third share of the remaining estate residue ($265,562.88).

The respondent argued that he was entitled to receive the cottage with only a deduction up to the value of his share, and that any shortfall beyond that amount should not be payable by him. The applicants (his siblings) argued that the will required Thomas to pay the entire appraised value, and if he could not do so, the bequest failed and the cottage should be sold with the proceeds divided equally.

The legal principles of will interpretation were set out most recently in the Court of Appeal decision in Ross v. Canada Trust Company (2021 ONCA 161). In Ross, Brown J.A. stated that the court’s central task is to determine the testator’s actual, subjective intention as to how they intended to distribute their property.

This analysis begins with looking at the language and the wording of the will, read as a whole. Where the testator’s intention cannot be determined by looking at the will itself, the court may apply the “armchair rule”. This approach requires the court to place itself in the testator’s position at the time the will was made, and consider the testator’s assets, family relationships, and the surrounding circumstances that could have reasonably influenced their decisions. Although this step was traditionally applied only when the language was ambiguous, courts have begun to treat the armchair rule as an overarching framework, even where the language of the will itself does not appear to be ambiguous or unclear.

The court emphasized that direct extrinsic evidence, such as third-party evidence about the testator’s intention, is generally inadmissible.

Finally, while the court may interpret unclear or ambiguous provisions, it will not re-write the will or create a new one under the guise of interpretation.

Analysis

Applying the modern interpretive approach, the court found that the will created a conditional gift: the respondent could receive the cottage only if its full appraised value was deducted from his share of the estate. The will did not cap the deduction at the value of his one-third residual share. The court therefore rejected the respondent’s argument that he was entitled to the cottage without paying the shortfall, concluding that the testator intended equal treatment among her children—not preferential treatment for one.

The surrounding circumstances supported this conclusion. The deceased purchased the cottage in 1970 and could not have anticipated its dramatic increase in value by the time of her death. Her estate plan assumed that the cottage value would align more closely with each child’s share and reflected an intention that all children benefit equally while keeping the cottage within the family. Because the cottage’s value had risen far beyond what she likely contemplated, the respondent’s one-third share was insufficient to offset the appraised value, creating a substantial shortfall.

Settlement Offers

Both sides exchanged settlement offers, but neither was accepted. Notably, the applicants’ offer would have allowed the respondent to acquire the cottage for significantly less than the amount ultimately ordered by the court. The court accepted that the applicants beat their settlement offer.

Holding

The court held that the respondent must pay the outstanding balance, approximately $641,937.12. If he fails to do so within 60 days, the gift lapses, the cottage must be sold, and the net proceeds are to be divided equally among the three children.

On costs, the court found that the ambiguity in the will stemmed from the testator’s failure to foresee the dramatic increase in cottage value and this justified awarding the applicants their substantial indemnity costs to be payable from the estate. The respondent was ordered to bear his own costs.