When a person dies, the people who are left behind generally look to the deceased’s written “final will and testament” for guidance with respect to how the deceased person’s property and belongings should be divided and to whom various assets have been bequeathed. The executor appointed under the terms of the will then carries out the terms of the will by the wishes of the deceased. Any person directed to receive something under the terms of a will is called a “beneficiary.” Typically, a beneficiary will receive their due following the terms of a will, at which point the beneficiary is free to dispose of the bequest as they wish, meaning they can retain, sell, or otherwise make whatever use of their bequest that they see fit. 

It is well-known that wills may give rise to acrimony among the beneficiaries thereof, in that arguments sometimes arise with respect to how various property and assets have been divided and the true intentions of the deceased testator. In such cases, court involvement often becomes necessary to untangle the various threads of discord and provide a final, legal resolution of will-related disputes. The recent British Columbia Court of Appeal decision in Sojka v Sojka exemplifies one such case. That case involved a will, an oral agreement about the terms of that will, and a court action to resolve whether an oral agreement existed and, if it did, whether it could be enforced.

Deceased Mother’s Will Creates Acrimony Among Children 

The Sojka v Sojka case involved Genoweva Sojka, who had six children, five of whom were alive at the time of Genoweva’s death on May 1, 2008. At the time of her death. Genoweva was the sole owner of a home in Burnaby, British Columbia. Before her death, Genoweva expressed an intention to make her sons, Rick and George, joint tenants together with her on the property. To that end, in 1998, Genoweva attended her lawyer’s office to carry out this transfer. In fact, at that time, Genoweva only transferred an undivided one-half interest in the property to Rick and George as joint tenants. Genoweva herself retained sole ownership of the other undivided half-interest in the property.

In July of 1984, Genoweva executed a will by the terms of which her daughter Christine was to receive $1,000 upon her death, her daughter Helen was to receive $5,000, 35 per cent of her estate was to go to her son George, and the residue of the estate was to be shared equally amongst her remaining children, Rick, Henry and Andy.  Genoweva’s daughter Helen passed away in 2005. On April 8, 2008, shortly before her death, Genoweva executed a will in which she left her entire estate to her son George, who is also named the executor of the will. 

Christine, Andy and Henry were unhappy with the terms of the will and, following fruitless discussions amongst the siblings with respect to how Genoweva’s estate might be equally divided amongst them, Christine and Andy commenced a legal action in the British Columbia Supreme Court in which they sought to have the will declared invalid and a declaration issued that George and Rick held their interest in the property as trustees for and on behalf of the estate. Rick provided unequivocal support for George throughout the legal proceedings, including providing to the court a “will say statement” in which Rick detailed the fact that George had always provided their mother with more support throughout her life than did any of her other children, and that George was deserving of and entitled to a larger share of Genoweva’s estate as a result. Rick stated in his letter that he and the other siblings felt that George was entitled to “much more” than 50% of the estate.

In May of 2017, all parties attended mediation, as a result of which they all entered into Minutes of Settlement, which dictated that Rick and George were jointly and severally responsible for paying Christine, Andry and Henry $575,000 as proceeds of Genoweva’s estate, within 90 days of the execution of the agreement. When Rick and George failed to pay the agreed-upon sums in the agreed-upon timeframe, Christine and Andy returned to court to seek enforcement of the settlement agreement, which resulted in a court order in 2019 for Rick and George to pay Christine, Andy and Henry $577,424.45. 

On June 28, 2012, the Burnaby property suffered extensive damage due to a fire, which rendered the property uninhabitable. George, who had failed to ensure that the property was properly insured at the time, eventually resolved an insurance dispute related to the property and split the proceeds of that settlement with Rick 50-50.  George was eventually ordered by the court in 2019 to sell the property to satisfy the order to pay Christine, Andy and Henry the amounts of money the siblings had agreed they were due. Once those monies were distributed, nearly $900,000 from the property sale proceeds remained. This led to a new dispute between Rick and George regarding how those proceeds should be divided. 

Oral Agreement Between Brothers in Question

Although Genoweva’s will clearly stated that her entire estate was left to George, Rick disputed the intention behind that bequest and claimed that his mother had intended for Rick and George to own the property equally. To that end, Rick asserted that there “was a legally enforceable oral agreement between him and George that they were equal beneficial owners of the Property, notwithstanding its legal ownership.” When their mother awarded each of them one-half of an undivided interest in the title to the property, Rick claimed that he and George had agreed that they were equal property owners and would equally divide any profits therefrom. For his part, George denied the existence of any oral agreement. He declared that he had a minimum 75% interest in the property, pursuant to both the legal title transfer that occurred in 1998 and the terms of the will Genoweva had executed immediately prior to her death.

Legal Principles Applicable to Oral Agreements

The trial judge reiterated the legal framework that applies when a court is tasked with determining whether an oral agreement exists. To that end, the following legal principles are relevant:

• “If a party to an oral agreement acts as though there were a binding contract or the other party relies on the agreement to their detriment, the party is unable to rely of the lack of a written agreement as a defence.”

• “An enforceable agreement is reached where parties have reached a meeting of the minds and the parties express themselves outwardly in a manner that indicates an intention to be bound”

• “Reasonable certainty of the terms of the agreement are required”

• “The existence of an oral agreement is determined by applying the objective reasonable bystander test to consider how the promisor’s conduct would appear to a reasonable person in the position of the promise”

• “The party alleging the oral agreement must be able to prove its existence on the balance of probabilities”

The fact that Rick had provided staunch support for George throughout the legal proceedings brought by their other three siblings coupled with the facts that both George and Rick were jointly and severally liable for paying their siblings under the Minutes of Settlement and George had agreed to split the insurance proceedings from the house fire with Rick equally, led the court to conclude that indeed, an oral agreement did exist between the brothers, and in fact Rick and George were equal beneficial owners of the property. A declaration to that effect was issued.

The Appellate Decision 

George asserted that the lower court had mistakenly found an enforceable oral agreement between Rick and George because Rick had never given George proper consideration for his interest in the property. The Court of Appeal noted that consideration does not always have to be money and found that the consideration given by Rick to George in exchange for his interest in the property was Rick’s unequivocal support for George throughout the legal proceedings and the fact that Rick and George had agreed to be jointly liable for the payments to their siblings under the will. In these circumstances, ample consideration had been provided, and no mistake had been made as to the existence of an oral agreement between the brothers. 

Contact the Estate Lawyers at Meridian Law Group for Advice on Your Will and Estate

The estate lawyers at Meridian Law Group are experienced in all facets of estate litigation, including dealing with problem executors, powers of attorney,  trust disagreements, and disputes over interpretation of a will. Merdian Law Group’s estate lawyers have the knowledge and skill necessary to compassionately and competently handle your estate matter and ensure that your rights are asserted and protected throughout all proceedings. 

Contact an estate lawyer at Meridian Law Group today, either online or by telephone, at (604) 687-2277, to schedule a confidential and comprehensive meeting with one of our capable team members.  With offices located in downtown Vancouver, Meridian Law Group is proud to serve clients throughout the province of British Columbia.