Superior Court of Ontario Applies Cy-près Doctrine to Testamentary Gift
Aug 2024 Charity & NFP Law Update
Published on August 29, 2024
In situations where fulfilling the donative intent of a will becomes difficult, courts can apply the doctrine of cy-près to rectify the situation. The doctrine of cy-près is a legal principle used in the context of charitable trusts. When the original purpose of a charitable trust becomes impossible, impracticable, or illegal to fulfill, the doctrine allows the court to amend the terms of the trust so that the funds can be applied to a purpose as close as possible to the original intent of the donor. This ensures that the charitable intention of the donor is honored even if the original objective cannot be achieved exactly as intended. A recent example of the application of the doctrine of cy-près occurred in the Ontario case Allan et al. v. Thunder Bay Regional et al., decided on June 6, 2024. The Applicants, Sandra Allan and Marilyn Inga Foster, sought the opinion of the court on the validity of a handwritten codicil to the will of Lawrence Richard Iwachewski and the identification of the residuary beneficiary under the will and codicil. The codicil, though not properly executed, was found to be valid and fully effective as a testamentary document. The court applied the doctrine of cy-près to determine the residuary beneficiary, finding that the Thunder Bay Regional Health Sciences Foundation was the intended recipient based on the testator's expressed intentions and the circumstances surrounding the drafting of the will and codicil. The testator, Lawrence Richard Iwachewski, made a properly executed will in 2001 and a handwritten codicil dated December 10, 2019. He passed away on December 19, 2022, unmarried and without children. The testator’s will directed the residue of his estate to be held in trust for his mother’s lifetime if she survived him for 30 days, and then to service organizations caring for his mother. However, the testator’s mother predeceased him in 2004 and was not alive when he drafted the codicil. The codicil in question included provisions for charitable donations to the Thunder Bay Regional Hospital, referencing the care provided by that Hospital to the testator’s mother including during her final days. However, by the time the codicil was created in 2019, the Thunder Bay Regional Health Sciences Centre had replaced the city’s older hospitals, including the Thunder Bay Regional Hospital. During his lifetime, the testator expressed his intent to leave his estate to this Hospital, desiring recognition through a plaque. This intent was supported by the discovery of his mother’s Thunder Bay Regional Hospital bracelets among his belongings. The court considered whether the handwritten codicil of the testator, which was not properly executed, was a valid codicil to his will. The court applied the doctrine of substantial compliance to determine that the handwritten codicil was valid and fully effective. This led to the secondary question regarding the charitable donation to the Thunder Bay Regional Hospital, which no longer existed. On this issue, the court acknowledged that it would be an “onerous task” to determine exactly which organizations had provided care to the testator’s mother in her final years. The court considered if the doctrine of cy-près could be applied to remedy the impossibility of respecting the testator’s original wish, and the impracticability of respecting the terms of the codicil. The court applied the cy-près doctrine because it was impossible to carry out the testator's specific intention to benefit the Thunder Bay Regional Hospital which no longer existed, and impracticable to identify the exact organizations that had provided care to his mother during her lifetime given that she was no longer alive. However, the court found that the testator had a general charitable intent to benefit the Thunder Bay Regional Hospital, as evidenced by his specific reference to it by name in the codicil and his desire to have his gift recognized by a plaque on its wall. The court therefore held that the Thunder Bay Regional Health Sciences Foundation was the residuary beneficiary of the Thunder Bay Regional Hospital in the testator’s will and codicil. Allan serves as a reminder that complications in executing the donative intent of a will does not automatically invalidate gifting made to registered charities. As seen in this case, estate trustees can apply to the court for the application of the cy-près doctrine to have to original intent of the will respected as closely as possible. |