Lawrence Estate (Part II): How does a mistake affect a contract between heirs?
Four children made an agreement shortly after their mother’s death to divide any jointly held asset equally. What none of them knew at the time was that one child, Elton, was a joint owner of the family Homestead at the time of his mother’s death.
Part 1 of this two-part piece discussed why the Court found that the family Homestead formed a gift from the mother to her son Elton in Lawrence Estate v. Lawrence, 2025 NSSC 369 (CanLII).
But that was not the end of the case. The Court also needed to consider the impact of the agreement between the four children.
The Court examined the agreement and found it was ambiguous because it did not refer to the Homestead explicitly and discussed “liquidating assets” – but real property is not easy to liquidate. Elton said that he did not understand the agreement to include the Homestead, and would not have signed it if he did. The Court accepted Elton’s position.
Then the Court went on to consider the doctrine of “common mistake”. This is a doctrine in contract law that says when a contract is made but the parties have all made a “common” mistake about something that is fundamental to the effect of the contract, then the contract will be void.
None of the parties knew about the Deed making Elton a joint owner of the property at the time they signed the agreement. The Homestead was the mother’s single most valuable asset and it was the only asset that caused any dispute between the parties. The children’s common mistake was thinking that the Homestead was part of the Estate, when it had actually passed directly to Elton under the right of survivorship.
In the end, the Court decided that even if the Homestead was included in the agreement, the agreement itself was void for common mistake.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the author, Tipper McEwan. Tipper is a partner in Stewart McKelvey’s advocacy group who practices in the areas of estate litigation, insurance, and commercial litigation.