Understanding the Use of No Contest Clauses In Alberta: Anderson Estate, 2017 ABQB 422 And Mawhinney v Scobie, 2019 ABCA 76

Background

No contest clauses, or "in terrorem" clauses (latin for "in terror" or "by way of threat") are often used in wills to attempt to create a consequence or an ability to prevent a gift, if certain conditions are not met or certain actions are taken. Typically, no contest clauses intend to direct that if a beneficiary challenges a will, the bequest is forfeited and forms part of the residue of the estate. The goal of these clauses is to cause a beneficiary to think twice before commencing litigation that may result in their entire bequest being forfeited.

As a matter of public policy in Canada, a no contest clause is not allowed to oust statutory rights and benefits (such as maintenance and support under applicable dependants' relief legislation) or deprive the court of its jurisdiction to deal with requests for assistance in interpreting the will, which do not dispute the will.1

Generally, a valid no contest clause must also provide for an express gift over in the event that the beneficiary in question contests the will.2

Recent case law in Alberta has provided significant insight into how these clauses are to be interpreted:

Anderson Estate, 2017 ABQB 422

After a decline in health over the last months of his life, James Carl Anderson died on September 3, 2015 in Calgary at the age of 84. Mr. Anderson had three adult children. The respondent, Karen Mawhinney, claimed to have been in a relationship with Mr. Anderson for over twenty years and became his fiancée in March 2015. The appellants claimed that she was only a long-term friend.3

Ms. Mawhinney claimed that Mr. Anderson had made four wills prior to the two in question. Under all of the prior four wills, Ms. Mawhinney shared equally with the three adult children in the residue of the estate. The scheme of distribution was altered in an August 1, 2015 codicil and ultimately in a new will signed by Mr. Anderson on August 6, 2015 (the "August Will"), which altered the prior scheme of distributions (collectively, the "Testamentary Documents").4

The Testamentary Documents gave Ms. Mawhinney a parcel of property in Alberta, a house and its contents in Austin, Texas, a Bentley automobile, and $2.6 million dollars. However, the residue of the estate was to be distributed only among the three adult children. 5

The August Will also contained a no contest clause that stated the following:

"21. If any beneficiary of this my Will challenges the validity of this my Will or any Codicil hereto or commences litigation in connection with any provision of my Will or any Codicil hereto, other than for:

(a) Any necessary judicial interpretation or for the assistance of the court in the course of administration of my estate...