Residue And Red Flags

A will that looks proper on paper can still fall apart under real scrutiny. We walk through a striking Court of Appeal decision where a 92‑year‑old’s revised will took 18 nieces and nephews from life‑changing inheritances to token gifts, while siblings stood to gain over a million each. The key isn’t drama; it’s doctrine. When circumstances around a will raise well‑grounded suspicion—undue influence, unclear capacity, or radical shifts without explanation—the usual presumption of validity drops away, and the burden flips to the person pushing the will to prove it’s sound.

We unpack how that burden‑shifting works, why “residue” can hide huge sums, and what evidence is needed to show the testator actually understood the size and consequences of their choices. You’ll hear how earlier documents, contradictory statements, and who drafted instructions can become powerful facts. In the end, the appellate court restored the original 2001 will, returning substantial shares to the nieces and nephews and offering a roadmap for spotting red flags in estate planning.

Then we change gears to civil costs in British Columbia. A neighbour dispute over excavation damage led to a modest award in the Supreme Court, raising hard questions about forum selection, mitigation duties, and how costs can swing based on strategy and behaviour. One twist: the self‑represented plaintiffs relied on AI, which produced fake case citations. Thankfully, counsel caught the hallucinations immediately, but there were still cost consequences—and a clear lesson. Use AI as a starting point, never an authority. Verify every citation on CanLII, read the full text, and note up decisions to see what the law is today, not yesterday.

If you care about clean estate planning, sound litigation strategy, and staying safe with legal tech, this conversation is your checklist. Subscribe, share with someone who needs it, and leave a quick review to help others find the show. What part challenged your assumptions most?

Follow this link for a transcript of the show and links to the cases discussed. 

Chapters

• 0:00 Presumption Of Will Validity Explained
• 3:20 A $5M Estate And Two Wills
• 8:40 Dramatic Shift To Residue For Siblings
• 12:15 Appeal Court Flags Suspicious Circumstances
• 17:30 Burden Shifts To The Will’s Propounder
• 21:00 Original Will Restored, Residue Reallocated

Transcript

Michael Mulligan: 0:27

So this I think is an important thing for listeners to know about. And the way this quote suspicious circumstances is can or can be significant when dealing with a will, is that if there are what's referred to as sort of a well-grounded basis to be suspicious about uh the circumstances in which a will was prepared, uh that is enough to rebut what is called a presumption of validity. And the presumption of validity, the idea there is that if a will is uh created in accordance with all of like the statutory requirements, right? Like having two witnesses and having it signed by the person making the will, that sort of thing. If the formalities are met, there's a presumption uh that the will is going to be valid, right? And that requires a number of things. Like the person has to have an appreciation of what their uh assets are and how they could distribute them, and they have to be competent to do that and so on. But it creates that presumption. Now, this case is an example of how once there is a uh reasonable or well-grounded basis to have a uh suspicion or there be suspicious circumstances surrounding things like whether there was undue influence on the person or whether they had capacity to do what they were doing, you know, did they understand the nature of what the uh their estate was, that sort of thing, uh then the burden of trying to prove that the will was valid shifts, and it shifts to the propounder of the will, the person who's trying to claim that this will is valid, right? And so that's how suspicious circumstances fit into the analysis. Now, that brings us to this particular case. And it's a case of a woman who lived uh sounds like a uh very uh long life. Uh she was born in 1929, she passed away in 2021 at the age of 92. Uh, and uh she had been uh sounds like she had a long and successful marriage to a fellow for a period of 48 years who predeceased her by a few years, uh leaving behind a pretty substantial estate of some five million dollars, which she uh inherited uh uh upon the death of her husband. Now, she created a a will, uh there was she had created a will back in uh 2001, uh and uh the couple didn't have any children, and so the will provided uh that um her personal effects would be divided amongst her uh three sisters. Uh there would be, I think, a thousand dollar gift to her church, and then the residue of the estate uh would be divided equally amongst her at that time, eighteen nieces and nephews. And so the residue of an estate is like what's left over once you would distribute the specific gifts, right? You know, if you say like, hey, my brother gets my car and my you know children get the house or whatever it might be, the residue is like the leftovers, right? But because the estate was large, the leftovers would have amounted to the residue would have amounted to approximately two hundred and seventy-five thousand dollars per niece and nephew. Well, a lot of money. Yeah. Okay. But what happened is she started after her husband passed away, she was getting she was getting on in years, um, and she appointed one of her sisters, uh, and uh, I think a brother could also act, uh, as it gave them the power of attorney so they could help deal with her financial affairs. Um and the uh sister that was appointed, I think she was a financial professional of some sort, um, and shortly after that happened, the sister who was going to be uh was had the power of attorney uh sent a written request to a notary public who had prepared the original will for back in 2021. And it listed a number of requested changes. The list was prepared by the sister. It was signed uh by uh the the testator here, right, by the person who passed away. Um and it suggested it requested a number of significant changes to the will, which the notary pr drafted a will in accordance with the requested changes from the one that had previously been done. And the essence of it was that it provided for the nieces and nephews, it specified they would get five thousand dollars each, uh, and that the residue would be divided uh amongst the siblings uh of the woman making the uh preparing the will, the deceased. And so a very substantial change. It meant meant that the nieces and nephews, rather than getting two hundred and seventy-five thousand dollars, would get five thousand dollars, and the siblings, rather than getting the personal effects, uh would wind up with something like one point two million dollars each. A very substantial change. Uh and so when the person when the woman passed away, uh there was a dispute about what what had happened here. Uh, and there was a request from a couple, I think the one of the two of the nieces and nephews, uh, and they made inquiries, including asking, was there an earlier will? Uh and the uh woman who was the both the executor under the new will, the sister, and one of these beneficiaries, uh denied that there was an earlier will initially. Now, that led to a court case, a challenge about uh whether the the new will that was created was valid. Uh and at the sort of uh chamber stage, like the first the hearing in the BC Supreme Court, the judge concluded that uh it was relying on that sort of presumption of validity and sort of had reasons saying, oh well, you know, it's reasons why the Yoshi might have prepared the the sister might have prepared the list of changes, that sort of thing. But that was appealed to the Court of Appeal, which resulted in the case that decision that just came out. And the Court of Appeal concluded that the original judge that heard it had made an error in terms of how he assessed things. He had done sort of a blended assessment of the various things like capacity and undue influence and so on. Uh, and the court of appeal pointed out that once there is this quote well-grounded basis for suspicion, and the Court of Appeal pointed out there were reasons uh to be suspicious here. They included that there was no explanation for the very substantial change in the effect of the will, uh, that the uh instructions to draft the new will were prepared by one of the people who would benefit very substantially in a financial way from it. Uh the uh fact uh that uh she denied when they asked what it is earlier will denied knowing of any earlier will, when in fact, when she sent the instructions to the notary public to prepare the new one, she included the old one asking that changes be made. Um and so based on that, the judge concluded there was, or the Court of Appeal concluded, there was a well-grounded suspicion uh about whether, for example, there had been undue influence or whether, for example, the woman had had a good appreciation of just how large her estate was, right? Because remembering, when you use that kind of terminology in a will speaking about the residue, right, you're not specifying an amount of money. It's not like saying, okay,$1,000 for the church and$5,000 for the nieces and nephews. You're just saying the residue. Um and there was an earlier case that the Court of Appeal pointed to, back from a Court of Appeal case from back in 1980, is a circumstance where a uh testator was getting a bunch of help from a credit union manager to prepare a will and specifying that various specific gifts be left to various beneficiaries. The manager of the credit union realized that that wouldn't cover nearly all the money the person had, and then said in a uh initially sort of joking fashion, you know, why don't you leave the residue to me? And eventually got the person agreed to that. And it turned out the residue was$130,000. Uh and that was an example of a case where it was found, look, the person just didn't have an understanding of what was there, right? When they sort of agreed to, oh yeah, fine, you can get the residue. It sounds like something you might scrape out of the bottom of a peanut butter jar or something, when in fact it could be a very substantial amount of money, as it was in the case that we're talking about. Uh and so the Court of Appeal found that where there is that sort of basis to be at least, you know, suspicious, that burden of proving that the will is valid and that the person didn't have undue influence and so on shifts. It goes like the presumption that it's valid goes away. And the burden then shifts to the person who's trying to make out that the will is valid. So over to you, executor sister, right? You prove uh that uh there wasn't undue influence and that she did understand just how much this residue was, and you know, what's the explanation for why she would have very substantially changed the amount of money going to all the nieces and nephews, very much to your benefit. What's going on here? Um and the Court of Appeal found that there just wasn't an evidentiary basis to be satisfied of those things. And the Court of Appeal was careful to point out that that doesn't necessarily mean uh that there was some improper and nefarious conduct, simply that once you have these sort of suspicious circumstances, it's over to you to prove it. And in this case, uh based on the things that have talked about, they said, look, this just wasn't uh wasn't uh satisfactorily established that there wasn't undue influence, or that, for example, she understood really the scope of her estate when she was referring to, you know, okay, fine, my siblings can share the residue. Uh and so the result of that is that the Court of Appeal found that that new will prepared um with the list of changes uh requested by the sister, beneficiary executor, and signed eventually by the mother or by the uh execut by the testator was not valid. And so the as a result of that, the original will, the will from back in 20, 2001, stands. Uh, and rather than the hundred one point two million dollars going to the executor and the other siblings, they're gonna get the personal belongings, um, and uh all of the nieces and nephews will wind up with$275,000. So that's the latest from the Court of Appeal, and how suspicious circumstances play into uh whether a will is going to be uh found to be valid or not. So latest from the Court of Appeal.

Adam Stirling: 10:43

Michael Mulligan with Mulligan Defense Lawyers. Legally speaking will continue right after this. We return to Legally Speaking on C Fac 1070, joined as always by Michael Mulligan, Barrister and Switzer with Mulligan Defense Lawyers. Michael, what's next on our agenda?

Michael Mulligan: 10:58

Uh next on the agenda is a decision dealing with the issue of costs being awarded in a civil case in the BC Supreme Court. And there are a couple of things about the decision that may be of interest. First of all, the idea of costs means that uh, you know, the if you sue somebody and you succeed, generally you're gonna get a portion of your legal expenses and other kind of uh incidental costs paid for by the side that uh you successfully sued. On the other hand, if you sue somebody and lose, uh you're gonna pay part of their costs. And sort of it's an incentive to sort cases out and not litigate unnecessarily. So the first thing to be said about this costs decision, which is interesting, is it was a it was a neighbor dispute, basically. It was a uh circumstance where a builder was building a, I think, a house next to an existing house, uh, had asked permission to come over and take some protective measures prior to doing some excavation work. Uh the plaintiffs refused to allow the uh protective measures to be taken, and sure enough, as the I guess the foundation was being dug, uh a bunch of the land slipped away and it damaged a fence. Uh the builders uh asked to come over to be able to fix the fence and fix things, but again was refused the permission to do that. Uh, and so it resulted in this civil claim being brought by the uh neighbors that weren't happy with the construction, I guess. Now, the first thing about it is that they sued in the BC Supreme Court. Uh you don't get costs if you sue if you sue somebody or get sued in small claims court. Uh small claims in BC goes up to$35,000. That's a type of claim to be handled in the provincial court. If you're wanting more than that, you have to go to the BC Supreme Court. That's where these particular plaintiffs went, the unhappy uh people who had their fence fall down due to the construction. Uh but at the end of the day, they only wound up with a judgment for$4,800, well short of the$35,000. And so the first issue was should you be able to get any costs of costs at all? Uh and the starting point there is that you can't just go to the Supreme Court because you want to get costs or something. And the idea there is that if you go to the BC Supreme Court, when you really what you should have done was go to small claims court, you don't get costs at all unless you've got some sufficient reason for having started in the Supreme Court. And so that was the first issue on this cost decision. On that front, the judge ultimately found, okay, there was some reason to go there. You know, they thought maybe an injunction might have been necessary or they the original claim was for more. So they got squeaked past on that one. But they got a lot less money than they were asking for, first of all, on the basis that they had failed to mitigate by not letting the builders come in to shore it up or to fix the problem. And so that's part of what vastly reduced how much they got in terms of damages, right? It's like is your prerogative if you don't want to let people onto your property? Uh, but when, you know, so there's some kind of uh thing like this, like the land sliding away and they want to fix it and stop it, and you don't let them, you it may you may find out that you failed to mitigate, which is also a requirement. The other interesting thing in this case, uh, it caused me to note it, um, is that the unrepresented plaintiffs in this case decided to use uh AI to do their legal work for them. Uh-oh. Uh and in doing so, uh, they wound up generating the AI, whichever one it was, that's not specified, hallucinated, and generated a number of cases that were completely fictitious. Yep. Uh and then they came into court. They were relying on these cases that just didn't exist. They're just made up by the AI, right? If you and so there they are in court, referring to these cases uh that were just made up by the hallucinating AI. Now, there have been other cases like that in BC, including a case where a lawyer used fictitious cases that were generated by AI, and that did not go over well. No. Here, the judge took it to be a little bit different because these people didn't have uh a lawyer, uh, and they didn't realize that the AI had hallucinated, or I guess even know that that's uh not an unlikely uh thing to occur if you're uh asking AI some of these sort of uh legal questions. Um and then the other thing which was a little different here is that as soon as they started, that is to say, the unrepresented plaintiff started relying upon these hallucinated cases in court, the other side which did have a lawyer immediately realized that this these don't seem to be real. Uh and so immediately stood up and said, look, these appear to be made up. Uh and so nobody got misled by them because I guess it was just they were so obvious the hallucinations immediately identified by the other lawyer in court that the court didn't get misled by them, which would be just terrible, of course, if you had one judge say, okay, well, I'm going to rely upon the case of Regina versus Schmuck here that never really existed at all. And that became the law. So there had to be some uh consequence for that in the cost assessment. Uh, but the judge uh found that uh because there was no other lawyer, they didn't know it, and was immediately picked up uh and realized that these were fake, uh it didn't cause any actual harm in this case, and so uh awarded$200 in cost against them for having done that. Now, I would say this as time marches on, and as more of these sort of cases collect, and as more people come in with fake AI hallucinated cases into court, the claim of how should I have known, Your Honor, is going to quickly lose resonance. And so I would really caution you if you're involved in a legal case, do not rely upon ChatGPT to do your legal research for you. And if you do use it as a starting point, be absolutely sure that if you have like each case as a citation, like a way you can look it up. And if you take that citation and you go to a site called Canley, and Canley is a database of all the actual decisions from court case courts all across Canada. It's maintained by the Federation of Law Societies, and it's free. Anyone can use it. My advice would be if you do use AI, take the citation, go to Canley, and you can just Google Canley, um, C-A-N-L-I-I, uh, and paste it in and see what comes up to make sure it's real. So it wouldn't take too long to test. Uh, and so don't rely upon the how could I have known uh defense uh and uh just take the time to do that. The other reason why that's a good idea, just by the by for listeners, is if somebody does present you with a case, one of the things that's prudent to do would be to take the citation for that case, go to Canley, put it in, and then you can do what's called noting up a case. You could you could look at it's listed on the website there's treatment, which I guess a bit of an odd term for, but treatment means like other cases that have considered that case. And the reason why that's an important thing to do is somebody might find some case from, I don't know, let's say the BC Supreme Court that says uh you know you must do this or that, or this is a legal test. If you put it in and check, you might find out when you click on treatment that six months later the court of appeal looked at that and said, hey, that judge was completely wrong, that's not the right test. Um, or uh some uh future court has come along and said something uh like that. And so that's a prudent thing to do anyways. So, anyway, that's my advertisement for Canley. It doesn't cost anything uh and a very good way to make sure you're you're not being misled and uh ChatGPT hasn't just produced something fake for you. So that's latest on costs and uh how that can be impacted by not only suing in the wrong court uh but using ChatGPT to write your submission for you. Yeah.

Adam Stirling: 18:25

I find AI is usefully um regarded as a conveyor belt on an assembly line that will give you some good products and some defective ones. And without the human who knows better doing quality control, it can be very dangerous to rely upon every single output being well correct.

Michael Mulligan: 18:43

That's absolutely right. And the other problem with it is that it can be very convincing and sound very certain, right? You know, if you type into it, it doesn't come up saying, I don't really know, maybe this is right, maybe it's wrong. Right? If you sort of put into it, you know, show me a case about standing for some proposition, it just comes up with something, right? It's very hard if you're not uh an expert in that area to try to figure out whether that's reliable or not, right? And so you don't want to uh, you know, do bridge engineering or legal research or uh medical research by relying just upon that. It might be a starting point, right? It might get you some principles, and it might be correct, right? All of those things are true, right? But even if it might be correct, you know, 90% of the time, even that's great. Uh, but you really need to do some follow-up on it. And the way to follow up on legal research, if it's generated by some artificial intelligence, is go check the actual source, go type it into Candley and look at the case yourself to make sure not only is that a real case, but did what it say about it, the summary it gave you of that, was that an accurate summary of that case? Look for it yourself. And also, has that case been overruled? Because even if AI accurately found an actual real case that actually says what it says it says, that does not mean it's an accurate statement. Statement of the law. That might have been an accurate statement of the law in 1992. And there may have been a whole lot of water under the bridge and legislative changes and court decisions since. And if you don't go look uh to see whether look at the treatment of it, to see whether it's been cited and whether it's been followed or not followed or modified, you could be just completely out to lunch. Even if the case is real, the citation is accurate, and the AI correctly summarized the case. All of that could be true. But if you don't take the time to check not only the accuracy of the citation and case that it actually exists, if you don't go and check to make sure that that case hasn't been overruled or changed or there isn't something newer or the legislation that it relied upon hasn't been completely changed, you could be right out to lunch. And while it's not as bad as coming in with a complete hallucination, it is certainly going to be very unimpressive if you show up in court or refer to a case saying, Here's the law, right, judge? Yeah. Rely upon this. Look at this. Uh and the judge goes back and types that thing into Canley and looks at us, well, yeah, yeah, that was the law for about 10 minutes of 1992. But the Court of Appeal in 1993 said that's completely wrong. That judge got it wrong, right? Everything else you have to say is going to be treated with great skepticism. So check your work, and that's where you can do it at no cost.

Adam Stirling: 21:18

All right. That's all the time we have for today with Michael Mulligan. Thank you so much. Pleasure as always. Really appreciate these segments.

Michael Mulligan: 21:24

Hey, thanks so much. Always great to be here. Have a great day.

Adam Stirling: 21:26

All right. Legally speaking, during the second half of our second hour every Thursday, here on C Fax Ten Seventy. Quick break news is next.