B.C. court considers remedy for breach of contract to make specific person beneficiary of estate

B.C. Supreme Court found that requirements for finding of anticipatory breach were present

B.C. court considers remedy for breach of contract to make specific person beneficiary of estate

Violating an agreement to execute a will that makes a particular individual the beneficiary of one’s estate may amount to an anticipatory breach, the Supreme Court of British Columbia has said.

In Munro v James, 2020 BCSC 1348, defendant Jessie Patricia James entered into a contract with plaintiffs Fonda Munro and Bruce Boughey. The plaintiffs agreed to reside in James’ farm, to manage the farm and to care for her ponies during her lifetime, while James agreed that the plaintiffs would inherit her entire estate upon her death.

James subsequently changed her will to exclude the plaintiffs as the beneficiaries of her estate, and to instead make defendant Leslie Anna Brown the executor and the beneficiary of her estate. James then notified the plaintiffs of her intention to terminate the agreement in three months, due to her dissatisfaction with the plaintiffs’ performance as farm managers. James also asked the plaintiffs to leave the farm.

The plaintiffs thus filed an action with the B.C. Supreme Court seeking an interest in the farm pursuant to their entitlement under the agreement.

The court said that the literal meaning of the contract was clear: the parties agreed that the plaintiffs would inherit James’ estate upon her death.

The court found that, when James changed her will to exclude the plaintiffs as beneficiaries and when she notified them of her intention to terminate the agreement, she committed an anticipatory breach. The court said that both of the requisites for an anticipatory breach were present in this case: James totally rejected her obligations under the contract, and lacked justification for doing so.

The court then considered the appropriate remedy for this case and concluded that the plaintiffs were entitled to partial specific performance of the agreement. While they did not expressly seek specific performance, the declaratory relief that they sought is a relief that only applies if the agreement is still in force.

The plaintiffs have substantially performed their side of the contract, said the court, which means that James should in turn perform her obligations under the agreement, including the provision to make them the beneficiaries of her estate.

The court clarified that, while the contract refers to the “entire estate,” this should be interpreted to mean the residue of her estate upon her death, after payment of taxes and reasonable funeral and testamentary expenses. The court also ordered James not to dispose of or encumber the farm without the plaintiffs’ consent.

A blog post by BCEstateLitigation.ca said that the case is a reminder to be cautious before executing an agreement that will compel the making of a will benefiting a specific person. “As long as the other elements of a contract are present (i.e. offer, acceptance, consideration, etc…), this type of agreement is enforceable in B.C., and you may be put in the unpleasant situation of losing any testamentary autonomy to decide what will happen to your estate,” said the blog post.

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