Contract Law – Formation
The applicant applied to the court to determine how an estate asset, the proceeds of the sale of land in 2015 for $500,000, should be distributed. The land in question was owned by S.N., who died intestate in 1970. The deceased had six children. Letters of administration were granted to two of his sons, M.N. and L.N., in 1971, and the bulk of the estate was distributed except for the land. The deceased’s six children agreed in 1978 that each of them would receive one-sixth share of the value of the land, but one daughter assigned her share to M.N. In his will, M.N. left his two-sixths share to L.N. with the residue to be divided between his three sisters. However, L.N. predeceased M.N. in 2008, and the former’s will divided his estate equally between his three sons, one of whom made this application. He took the position that when M.N. died, his two-sixths share passed to L.N.’s estate. This position resulted in S.N.’s remaining children each receiving a one-sixth share and L.N.’s estate would receive a three-sixths share. The respondents, two of S.N.’s daughters and one son, felt that because L.N. predeceased M.N., the latter’s share fell into the residue of his estate, which was to be divided equally amongst the three sisters. In 2014, letters of administration de bonis non were granted to the respondents for the purpose of completing his estate. The applicant offered to purchase the land that year for $180,000. His lawyer advised the respondent’s lawyer that under s. 22 of The Wills Act, M.N.’s sons received his two-sixths share. The respondent’s lawyer replied that the respondents agreed that assessment of the parties’ interests was accurate. When the land was ultimately sold to another purchaser, the applicant and his brothers signed consents to the sale which were sent to the respondent’s counsel on the trust condition that the proceeds of sale would be held until they were distributed in accordance with the shares described in the letter related to the applicant’s offer to purchase. The sale proceeded in 2015 and the proceeds remained in trust until 2019, when the respondent’s lawyer advised the applicant’s lawyer that they had come to disagree with the applicant’s distribution position. The issues were: 1) whether a binding agreement had been reached between the parties relating to the distribution of the proceeds; 2) if not, which of the distribution positions would be correct in law; 3) what compensation should be paid to the respondents as administrators of the estate; and 3) how costs should be awarded?
HELD: The sale proceeds were to be divided and distributed in one-sixth shares to each of the surviving children of the deceased and his three grandsons. The court found with respect to each issued that: 1) there was a binding agreement. Although there was no consensus ad idem between the parties regarding the applicant’s original description accompanying his offer to purchase, his position was later accepted by way of the trust letter under which the consents were provided to the respondents’ lawyer. The trust conditions were accepted and no essential terms were left to be decided; 2) it was unnecessary to decide the question; and 3) compensation was set at $12,500 to be divided amongst the respondents as they chose. They had not provided any evidence to support their claim to a fee of $10,000 each; and 3) costs of $3,500 should be paid by the estate to the applicant.