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Listen to Dependent Relief.

This week on Hull on Estates, Natalia Angelini and Craig Vander Zee discuss dependent relief and reference a variety of cases that utilized the Succession Law Reform Act.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Dependent Relief and The Succession Law Reform Act - Hull on Estates Podcast #117

Posted on July 1^st, 2008 by Hull & Hull LLP

Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to Episode 117 on Tuesday, July 1^st, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Natalia Angelini: Hi and welcome to another episode of Hull on Estates. I’m Natalia Angelini.

Craig Vander Zee: And I’m Craig Vander Zee.

Natalia Angelini: If you want to be heard on Hull on Estates you can participate in our discussion by leaving a comment, give us a call at 206-350-6636. The number is in the show notes along with our e-mail address, hull.lawyers@gmail.com or you can visit our blog page at estatelaw.hullandhull.com. So welcome everyone, it’s Canada Day.

Craig Vander Zee: Happy Canada Day to you, Natalia.

Natalia Angelini: Thank you. I’m thrilled to be at work on Canada Day and podcasting with you, Craig.

Craig Vander Zee: It’s certainly my pleasure as well. 

Natalia Angelini: Great. So why don’t we get started. Today we’re talking about dependents relief and in particular, we’re going to be discussing the case of Cummings and Cummings and some of the subsequent cases that have applied it.

Craig Vander Zee: Well starting off, Natalia, as we know, the Succession Law Reform Act governs the rights of beneficiaries to receive support and other benefits upon the death of an individual. And more specifically, without getting into the wording of Section 58, it’s Section 58 which enables one to make this application to the Court for dependent support.

Natalia Angelini: That’s right and that’s what happened in Cummings and Cummings and perhaps, Craig, you can tell our listeners what the decision was in that case.

Craig Vander Zee: Well I think before heading into the decisions on Cummings and Cummings, it’s really important to really understand what we’re talking about today, that whether moral and ethical considerations find their way into the consideration of a judge in the Court when a dependent support claim is being considered. And what is certainly, Cummings is well recent in jurisprudence, it’s certainly not recent in the sense of it just coming out. But what was interesting in Cummings is that the Court of Appeal said that prior to 1978, while moral and ethical considerations were important in dependent support claims, or at least that they were thought of as considerations, the Ontario Court of Appeal had not considered to what extent they’re taking into consideration given the new legislation. Because prior to 1978, and prior to the Succession Law Reform Act, Ontario had a prior Act which was called the Dependent’s Relief Act.  And in 1978, when the Succession Law Reform Act came into being, Section 58 was then the enabling Section in the legislation and what the Court of Appeal was saying is, that this particular aspect, moral and ethical consideration, had not been specifically considered by that Court and how it would affect the actual Section. And that’s why Cummings is important, because it’s really the first time in excess of 20 years that the Court took a look and actually focused on how and in what manner moral and ethical considerations are to be regarded when a dependent’s support claim is brought. 

Natalia Angelini: Exactly, great point, Craig. And what the Court of Appeal did find in Cummings was that when examining all of the circumstances of a dependent support application, the Court has to consider two things. Firstly, what legal obligations would have been imposed on the deceased had the question of provision arisen during his or her lifetime. And secondly, what moral obligations arise between the deceased and his or her dependents as a result of society’s expectations of what a judicious person would do in the circumstances. 

Craig Vander Zee: And the Court found its way to that reasoning, in part, based on the Supreme Court of Canada’s decision in Tatteron and Tatteron which was a 1994 decision by the Supreme Court of Canada.  And what distinguishes Tatteron is it was a decision that arose out of B.C. and was a decision that was considered in the context of British Columbia’s Wills Variations Act.  And the Court, at that point in time the Court being the Supreme Court of Canada, found that a deceased’s moral duty towards his or her dependents is a relevant consideration in a dependent’s relief application and that judges are not limited by simply conducting a needs based economic analysis in determining what disposition to make. 

So, while the thought might have been prior to Cummings, at least in Ontario, that it’s a needs based decision, the Court said in Cummings, no, we’re going to rely on what the Supreme Court of Canada said in Tatteron that takes it one step beyond a needs based analysis. And while there were differences perhaps, obviously between the British Columbia Wills Variation Act and the Succession Law Reform Act, the Ontario Court of Appeal just essentially came to the conclusion that those disparities weren’t important and certainly not important enough to have this not being a consideration.  And so clearly then, the Court of Appeal enunciated that a needs based analysis is not the end test. The end test is to consider moral and ethical considerations. And with that, I think we then turn to the Cummings decision and the facts to see why the Court might have come to that decision.

Natalia Angelini: Okay, great. Why don’t I turn to the facts of the case? So, I’ll just succinctly set them out. Essentially Mr. Cummings died leaving a widow, a former spouse and two children, Paul and Elizabeth.  And they were children from his marriage to his former spouse. So, his children were dependents under the SLRA, there was no dispute about that.  And one of the children, Paul, even though he was an adult, he suffered from Muscular Dystrophy, so it was also not in dispute that his future care would far exceed the value of the deceased’s estate.

Craig Vander Zee: I think what’s important in Cummings to point out is that the two children, the daughter was 18, she was attending university, and the son, who you’ve just mentioned who was unfortunately suffering from Muscular Dystrophy, was 24 years old. And it wasn’t argued as between the parties that the son’s future care wouldn’t exceed the assets in the estate. And what happened was that the widow and the first wife both did not make dependent support claims. It was essentially clear, my understanding that they didn’t need support and had agreed, or at least weren’t making dependent support claims. So that it was really the claims being advanced on behalf of the children.  And the actual claims themselves were for payment of arrears of child support ordered in the judgment for divorce. I guess the deceased had arrears outstanding.  And then also to provide for a trust as set out in the Will for both of the children, and then also seeking additional payments for support. Now the twist on this is that there was only $135,000 in the estate, unless you clawed back assets under Section 72 of the Succession Law Reform Act that would allow for the estate to be of an increased value. And when the assets, being a cottage property and the matrimonial home and the deceased’s RRSPs, all of which the widow had interest in or was a designated beneficiary of, were clawed back in, at least his portion, the estate had a value of $637,000.  And so that’s what the Court was left with in deciding how to deal with that amount.

Natalia Angelini: Right, and the Court concluded that in all of the circumstances, that the support should be set at $250,000 and that was to be payable by way of a lump sum with a maximum of $10,000 for the daughter to complete her Master’s degree and the balance of it to go to care for the adult son. In addition, the Court also ordered that support arrears, in just over $50,000 should be paid to the former spouse.

Craig Vander Zee: And really, one of the important things, what the Court tried to do, was to balance the varied interests of the parties before the Court. And the Court of Appeal held that moral considerations are not something to be contemplated in addition to or in isolation from the factors that are listed in the Succession Law Reform Act when considering an application. And so it is something that, in the context of a dependent support claim, that needs to be at the forefront of the parties. And while there have been a number of decisions about Cummings since Cummings came out and again, it’s a 2004 decision, really the aftermath of Cummings is yet to completely unfold. There have been a number of cases, but in many of these cases as might be anticipated, you have situations where you would think that dependent support would be given in the context.  And so it’s difficult to actually, perhaps, isolate the exact amount that’s factored or that’s being included because of a moral based decision versus an economic needs based analysis. But a couple of those decisions we can talk about briefly right now, Natalia.

Natalia Angelini: Great, so why don’t we start with an interesting case by the name of Simpson and Leardi. It’s a 2005 decision of the Ontario Superior Court of Justice.  And in that case, the deceased had left a substantial estate of about $10 million and the plaintiff, herself, had about $3 million.  But she was seeking support under the SLRA and she had already been awarded interim support of about $2700 a month.

Craig Vander Zee: Yeah, I think the important thing there is that the Will left her $1,000 per month and that she had already brought an interim support proceeding where the Court granted her $2750 per month. And at this point, that is, the point in time where it was before the Court, the estate trustees were bringing on a motion to cease, terminate that increased support on the basis that she no longer had a need for it.

Natalia Angelini: Right and the plaintiff was defending that motion and cited Cummings to support her argument that when the moral duty of the deceased is to take her into account, that she should get her fair share of the wealth. And she did concede, however, that on a needs based analysis, she would not likely obtain a support order. However, she still maintained that the interim order should continue.

Craig Vander Zee: And the judge here took a look at the situation and said, well no, what you’re really trying to do is to expand upon Cummings here. The plaintiff was making the argument that really what should be done is you’re taking into account the respective wealth of the parties and reapportion that wealth in a fair manner because the estates were $10 and $3 million respectively. And the Court said, no, no, no, we’re not going that far on this. We’re going to terminate the interim support. The application for support is still ongoing so it’s important to remember here that the judge wasn’t making a decision in a final way as to the support.  But the judge just said on an interim basis, no, you’re not going to make an argument here based on equalization of wealth. That’s not what Cummings stood for.  And as a result, the interim support was cancelled but the application for support continued and that might be pursued by the plaintiff.

Natalia Angelini: Right and one of the things that the Court might have taken into account when making that decision was that the plaintiff’s personal financial circumstances had improved since the interim order. So that might have just been one nuance that assisted in that determination being made.

Craig Vander Zee: One other case to consider, Natalia, is the case of Broderick I’m going to have problems here pronouncing this one, so thank you for letting me be the one to pronounce the name, Papathousiou. Anyways…

Natalia Angelini: No, no, no, Papathanasiou.

Craig Vander Zee: Okay, well…

Natalia Angelini: for all the Greek people out there, I hope haven’t offended.

Craig Vander Zee: What I can say is it’s a 2006 case, the Ontario Superior Court of Justice. And in this case, Miss Broderick contended that she had lived with the deceased in a common-law relationship for eight years prior to his death, and the deceased had not provided for her in his Will, or even during her lifetime. Miss Broderick had earned even in some years more money than the deceased, but they lived in residences owned by the deceased. I guess they had moved a couple of times but on each occasion, the funds for the residence and the ownership of the residence was in and had been provided by the deceased. And she brought a dependent support claim asking the Court for an order that support be provided to her under the Succession Law Reform Act.

Natalia Angelini: So the Court essentially found in favour of Miss Broderick in this matter and it found that contributions by her to the deceased, both to his personal and financial well-being to the detriment of her own finances, should be recognized by an award from the estate. And the Court, in making this decision, cited Cummings.  However, making that determination, the Court also found that there weren’t enough assets in the estate to provide for Miss Broderick so it ordered that the deceased’s condominium be sold and that she get one-half of the net proceeds in recognition of her contributions.

Craig Vander Zee: And it’s, you know, in these kinds of cases, sometimes it’s difficult to know if Cummings had not been a case that had come around in recent years what she would have received.  But, you know, clearly the Court found that she had contributed to both the personal and financial well-being of the individual.  And also, what is intriguing about these types of cases is that they appear to be situations where there would have been a possibility of dependent support.  In this particular one, they had found that she had contributed to the finances and to his personal well-being and had not been compensated, although that was clearly to her detriment. So the Court, in making that finding, as you said, Natalia, relied on Cummings and the deceased’s moral duty towards her as a dependent and that being a relevant decision. 

Given our time today, I don’t think we’re going to get into the other cases.  But there are some others to consider which are: Reid v Reid, it’s a 2005 Ontario Superior Court of Justice case.  And then also the case of Pirelli and Foley Estate, which is a 2006 decision of the Ontario Superior Court of Justice.  And what’s interesting, just quickly about Pirelli is that it appears to expand on the reasoning in Cummings where the judge, in this particular case, said after you look and identify all the dependents who make a claim on an estate, then the Court must tentatively value those claims of those dependents by considering the factors set out in the legislation and the legal and moral obligations of the estate to the dependents. But, and here is what seems to be the addition to it, is that the Court must identify those non-dependent persons who may have a legal or moral claim to a share of the estate.  And then the Court must attempt to balance the competing claims to the estate by taking into account the size of the estate, the strength of the claims and the intentions of the deceased amongst other things.  And so while it is unclear, for sure, where Pirelli leaves us, and whether that would be followed in another case, it does give us some view into a crystal ball as to where these types of claims may be going in the future. And so, again, the aftermath of Cummings is not yet known, but certainly and without a doubt, it’s being applied by Courts in Ontario.

Natalia Angelini: Absolutely. Thanks, Craig.

Craig Vander Zee: And with that, I bid you a good Canada Day and I hope you enjoy the fireworks tonight. 

Natalia Angelini: It was a pleasure podcasting with you and we look forward to hearing from our listeners.  So you can send us an e-mail at hull.lawyers@gmail.com or just pick up the phone and leave us a message on our comment line at 206-350-6636. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope you enjoyed the show. I’m Natalia Angelini.

Craig Vander Zee: And I’m Craig Vander Zee. Until next week, so long.

Natalia Angelini: So long.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Listen to Same-Sex Marriages and their Impact on Estate Law and Administration.

This week on Hull and Estates, Rick Bickhram and David Smith discuss how changes in the definition of marriage have impacted Estate Law and Estate Administration.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Same-Sex Marriages and their Impact on Estate Law and Administration - Hull on Estates Podcast #114

Posted on June 12^th, 2008 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates. You’re listening to Episode No. 114, on Thursday, June 12^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.   Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

David Smith: Good afternoon, Rick.

Rick Bickhram: Good afternoon, Dave, how are you doing today?

David Smith: I’m doing well, Rick. Rick, today we thought we’d talk about same-sex relationships and in particular, we would talk about how the changing definition of marriage and the changing view of the Courts regarding same-sex relationships have impacted upon the practice of estate administration and estate litigation.

Rick Bickhram: And this is an interesting topic as it was not too long ago, as I understand, that the Courts, the provincial and federal legislatures both addressed the question.

David Smith: Well that’s right, and what’s happened is, we all know in Ontario that the Court of Appeal in Halpern established the validity of same- sex marriage and, of course, there was then the marriage reference to the Supreme Court of Canada by the Federal Government which has validated the view and the legislation to the effect that marriage is the lawful union of two persons, not a man and woman, but two persons, to the exclusion of all others. And from an estate perspective, this has an impact because as we know, Rick, marriage has a legal significance in the context of estates, doesn’t it?

Rick Bickhram: Absolutely. And the impact that it has on it, is pretty much relevant towards the different remedies that an individual, a spouse, may be entitled to. For instance, and we will go into more greater detail as this podcast goes along, but I will just touch on some topics that are relevant to the definition of a spouse, i.e., intestacy, dependent support claims, whether or not a Will is revocable by a marriage that has occurred between same sexes.

David Smith: That’s right, Rick, and you know marriage really means something when it comes to estates. There’s sort of a common notion out there, I think, to the man or woman on the street, that if they live together for a lengthy period of time that for all legal intents and purposes their relationship enjoys all of the benefits that a married relationship has the benefit of. And we know that that’s simply not the case. The big one is intestacy and let’s talk about that for a second. What happens on an intestacy, Rick, if a man and a woman are not married as opposed to being married?

Rick Bickhram: And that’s a good question, Dave. What it sounds like what you’re referring to here is a common-law relationship.  And the question is, what happens if two parties are common-law and unfortunately one of them dies? Is the other party entitled to something? Under the laws of intestacy, no, they are not! That’s the sweet and simple answer.

David Smith: And it’s pretty dramatic, isn’t it? And, you know, the Courts and some commentators have suggested that the fact that a common-law spouse is entitled to nothing on an intestacy gives rise to a Charter challenge on the basis that in some way, it offends the equality provisions of the Charter for an unmarried spouse to get nothing on an intestacy, but for a married spouse to get something on an intestacy. 

And you know, the Courts and the commentators, there was a case in the Supreme Court of Canada, Walsh, where the Court considered this. And basically the Courts say, “well you know, marriage does have to mean something. And if you have a benefit of being married which is that you take the other’s estate on an intestacy, which is a benefit you don’t get as a common-law relationship, well that’s something that it’s reasonable to expect the parties to understand and there’s nothing wrong with having a legal benefit associated with marriage”. The other point that’s interesting, is the Court said “you know, there’s an easy way for a common-law couple to provide for each other in the event that one of them dies, and that’s, of course, for one of them to make a will benefitting the other”. But in the absence of either of those options, Rick, they have a remedy in any event, don’t they?

Rick Bickhram: Absolutely.  And another remedy that they may consider is a dependant support claim against the estate and I’ll let you go into some detail there.

David Smith: Well you know, the dependant support claim, Rick, is a powerful tool under Part V of the Succession Law Reform Act and as a common-law spouse, that entitlement is available. But you know, coming back to the point that we’ve made and the subject matter of this podcast, that is now a remedy that’s available to same-sex couples who are not in a marriage scenario. And that actually has been the law for quite some time in Ontario, which is, if you’re a homosexual couple or a heterosexual couple who are not married, the reality is that either one of you has a right to make a support claim against the estate of the other, in the event that you’re not married.

Rick Bickhram: Now Dave, under the provisions of Part V of the SLRA, the magic words are ‘dependant’. Do they…under Part V of the SLRA, define what a spouse is?

David Smith: Well, absolutely, Rick. A spouse defined under Part V of the SLRA is anyone who has lived with someone in a cohabitation arrangement for three years or more, or for a period of less than three years if they have a child together. Now the Courts have liberally construed the three year period and cohabitation has also been fairly liberally construed. What essentially happens, Rick, is the Courts want to look for a situation in which there is a basis upon which these people meet the definition of dependency and it’s going to have to look like an arrangement that had some spousal indicators.  And, you know, three years is usually the bottom line minimum number.  But again, that three years doesn’t require that they necessarily live both under the same roof.  But, of course, it’s something that they can pursue. 

You know, Rick, I think too, with the amount of time we’ve got left we probably need to just move along and consider a few of the other situations in the estate context where marriage has some significance and where the same-sex revolution in the law really makes a difference. One of these, I guess as well, Rick, is the whole idea of electing to take under the Family Law Act.  Let’s just talk briefly about that. Is that a right that’s enjoyed by common-law spouses or is it only enjoyed by married spouses?

Rick Bickhram: Good question, Dave. And under the rules of the FLA, that remedy is only available to married spouses, not common-law spouses. However, there is the option for a same-sex couple who have been married to make that FLA election as well.

David Smith: Presumably, Rick, we’re going to see some of these coming down the pipe. I mean, the reality is that legal same-sex marriage is a relatively new phenomenon.  And, you know, in our practice, we just typically haven’t seen a lot of people exercising these entitlements, but that’s only because it’s a new phenomenon. And what’s going to happen is, over the passage of time, we are going to be seeing situations in which same-sex married couples have the opportunity to exercise these benefits available to everyone. And the bottom line is that marriage, as a legal relationship between a man and a woman, a man and a man, or a woman and a woman, is going to give rise to these entitlements under the FLA as long as there is a marriage. Again, it’s fairly critical.

Yes, there are some other sort of  more mundane issues relating to estate administration. One of them is the right to be appointed as the estate trustee. That’s a right that’s available to, you know, people in a more liberal definition of spouse. So you don’t have to be married to have the right to be appointed as estate trustee in priority to anybody else. Under the FLA there’s also a right to claim damages.  That’s now available to spouses as well.  And again, the whole framework has changed such that same-sex entitlement gives rise to this option.

One thing I wanted to talk about briefly, Rick, was the precursor to the marriage definition which was the decision of the case in M&H, and that’s where the Court said “you can’t give rights to opposite sex common-law spouses that you don’t also give to same-sex common-law spouses”.

Rick Bickhram: You’re absolutely right here, Dave. You cannot discriminate on the basis of sexual orientation.  And I think that was (a) the decision in M&H, and (b) following that decision, the pith and substance behind much of our legislation that has revolved around that decision.

David Smith: Right, Rick. So you know, it’s going to be really interesting in our practice to see this new development take shape and to see these kind of cases come into our offices as lawyers.  And, of course, it’s going to, the bottom line here is it’s making available entitlements and remedies to a greater percentage of the population and that can only be a good thing.

Rick Bickhram: Absolutely. As society evolves, so will our laws to adapt with it.

David Smith: Thanks, Rick.

Rick Bickhram: Thank you Dave, and for all those listening out there, have a great day.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Once in a blue moon I find myself considering and marveling at the genius and breadth of the Common Law.  I am amazed by the Common Law’s ability to function effectively in what otherwise appear to be remarkably different parts of the world, particularly in the area of Estates and Trusts.

Of course, this phenomenon is a historical after-effect of the size and reach, particularly in the 17th to and 19th Centuries, of the British Empire.  Military history buffs will know this was largely attributable to the Royal Navy’s increasing dominance over the oceans of the world.  During that time (and before), the Common Law spread from the relatively tiny islands of the UK to vast and diverse areas: from India, Hong Kong, parts of Africa and Singapore to tiny island states in the Caribbean such as Barbados, the list goes on and on.

No doubt Estate Law has its local variants in each location, but I am more often than not struck by the similarities.  The attached article about Wills and Probate in Hong Kong would not be much different in Ontario, and I expect most non-lawyers would be hard-pressed to spot the differences.  Here’s a website encouraging people to outsource legal services to India, including trust deeds, although to my mind that may exaggerate the cross-jurisdictional similarities of Estates law. It seems to me it would still be best to retain a local lawyer in whatever jurisdiction you’re dealing. For the truly exotic, review this website talking about how the governing Estate law in Singapore shifted from the Common Law to Islamic law.

With Canada’s direct reliance on British jurisprudence lasting until 1949 when final appeals to the Judicial Committee of the Privy Council were ended, we certainly have played our role in this pattern and continue to do so.

Thanks for reading.

Sean Graham

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Listen to Trust Claims and Non-Married Spouses

This week on Hull on Estates, David Smith and Megan Connolly reference the case Belvedere v. Brittain Estate to discuss constructive trust claims made against an estate by a non-married spouse.

Trust Claims and Non-Married Spouses - Hull on Estates Podcast #84

Posted on November 6^th, 2007 by Hull & Hull LLP

 

David Smith:  Hi.  Welcome to Hull on Estates.  You’re listening to Episode #84 on November 6^th, 2007.

 

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.   Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills.  Now, here are today’s hosts.

 

David Smith: Hi, my name is David Smith.  I’m one of the partners at Hull & Hull LLP.  And with me is Megan Connolly, one of our associates.  Hi Megan.

 

Megan Connolly:  Hi David.

 

David Smith:  Megan, I thought today we would talk about constructive trust claims made against an estate by a non-married spouse.  And this was an issue that I recently wrote a blog on and noted that there is a fairly interesting case called Belvedere and Brittain Estate of the Ontario Superior Court of Justice.  Now before we get talking about the case, I just wanted to point out at the beginning the case is under appeal apparently, more as to the quantum of damages than anything else.  But it does provide a very interesting fact situation to discuss.

 

Megan Connolly:  The case involves an unmarried couple who had met in 2000 and had apparently moved in together in June, 2000 although that was under dispute in the case.  Now, on the deceased’s death, he didn’t provide for Laura, his common-law spouse, at all in his Will and made no other provision for her on his death.

 

David Smith:  That’s right, Megan.  And the claim made against the estate by Laura was based on several arguments.  She argued proprietary estoppel, basically saying that she entered into the relationship in reliance upon receiving certain gifts from the deceased’s estate.  But the primary basis upon which the Court ordered a constructive…awarded damages, was on the basis that there was found to exist a constructive trust in the estate for her benefit.

 

Megan Connolly:  Right.  Now she said that it was always her partner’s intention that on his death, she receive his RRSPs, the use of his house or alternatively, funds to purchase a new house, as well as a new car.  And in support of that, I guess she pointed out that in moving in with him, she had sold her home for I think less than its market value.  She had given up her car.  She hadn’t kept any of her possessions and she’d also I guess reduced her…she reduced the amount of time she spent working.

 

David Smith:  That’s right.  And so what the Court did, in terms of analyzing her claim, was looked at the various components of constructive trust and there is a three-fold test, which is an enrichment of the estate to the detriment of the claimant in the absence of any juristic reason.  Megan, what was it about the fact situation that made the Court think that she was enriched?  Or sorry, rather that the deceased was enriched?

 

Megan Connolly:  Well, as I said, when she moved in with him, she first of all had given everything up.  But she’d also spent a lot of time looking after his home.  He had a young child which she cared for.  She provided clerical support in his office.  She’d worked for Air Canada and she, I think, received heavily discounted flights for her friends and family as well as herself.  And both the deceased and his son, I guess, benefited from this.  Her family also had a condo in Florida that they would visit frequently and that they’d stay at.

 

David Smith:  When we talked about such an enrichment of the deceased, Megan, is it an enrichment of the estate, or is it, what do we mean exactly by enrichment?

 

Megan Connolly:  Well I guess basically it’s sort of the idea of getting something for nothing.  Here, the Court was saying that she’d provided, I guess, different services for him, whether it was through childcare, through maintenance to his property, to assistance with his business, etc., that she’d also been deprived as a result in that she’d given up income from her job, she’d sold her home and her car and I guess a Court’s interest is making sure that he didn’t receive anything without her also receiving a corresponding benefit.

 

David Smith:  It strikes me that the Court’s always interested to look at the relationship between her deprivation and his enrichment in the sense that there’s a trade-off there, isn’t there, between her loss and his gain.  And I guess that’s really what they’re talking about when they say that it’s got to be corresponding.  One thing I didn’t understand about the decision, quite frankly, was the fact that the Court considered the fact that apparently his death was unexpected and that she reacted very badly to this and caused her great emotional upset.  And the Court considered that as a factor to consider when looking at the phrase corresponding deprivation.  I mean, what do you think of that?  Because, to my mind, it’s not corresponding to any of the enrichment he gained…what do you think about that?

 

Megan Connolly:  No, it seemed like the Court was saying that, well he died, and it was really, really upsetting to her.  She’d apparently also been bipolar for a long time and I think this just worsened it.  She wasn’t working after his death.  And I think it seemed if not doubtful, at least questionable, whether she’d ever be able to work again.  And part of may be just, I guess, equity in a way, that the Court saw that, because of the situation, she was going to be severely I guess harmed in a sense, and wanted to correct that.  I’m not sure how solidly that’s grounded in legal principles.  I think it’s also worth mentioning that his estate was worth about $6,000,000.  So there seemed to be a lot of money to be spread around here.  And I think that was probably also a consideration.

 

David Smith:  And of course the third branch of the test is absence of juristic reason.  And again, this is a concept I wrestle with in the sense that I don’t think it’s always clear what a juristic reason could possibly be and what is an example of a juristic reason.  Do you have any thoughts on that?

 

Megan Connolly:  Well here, the defendants, the trust company, argued that her lifestyle had improved as a result of being with him.  So even if she was deprived and he was enriched, she too was also enriched by the fact that she went from, if not a low-paying job, a financial situation that wasn’t as comfortable as what she had when she was with the deceased.  And they sort of argued that that was a reason for his enrichment and her deprivation.  Now the Court didn’t accept that.  They said that, first of all, the improvement in her lifestyle was arguable, although I’m not sure if it is or not.  And that in any event, it didn’t constitute a juristic reason.  The Court also found that a lot of what she was doing was stuff she would have done even without him.  For example, the travel that they did a lot, was a result of her job at Air Canada.  And the Court found that well, she would have done that anyway.

 

David Smith:  That’s an interesting point, isn’t it?  So I guess really the Court’s got to look at all the circumstances.  And what struck me about this case to a large extent was, and maybe I’m being a bit cynical, but it seemed to me that the Court saw that she could not fit within the parameters of a support claim and under the SLRA, and looked for…well maybe looked for a way or looking at the facts, decided that there must be a way to benefit this woman, who had clearly given a great deal of herself to the benefit of this gentleman before he died.  And I guess, really, that’s what Courts of equity are there to do.

 

Megan Connolly:  And I think it’s also interesting that there was a lot of discussion in the decision about his intent.  The fact that even though he never made a Will, there was a lot of evidence that he’d intended to make one and that he’d intended to name her as the beneficiary of his RRSPs, which I think were worth about $2,500,000 at his death.  And there was also surrounding evidence from his friends and financial advisors that he’d always intended to do this.  And I think, just going back to the idea that he died in an accidental way, I think the Court was convinced that, well had he not died all of a sudden, he would have gone ahead and made these changes and that she would have become a beneficiary of the RRSPs and probably received some other money on his death.  So I think that was another, I guess, motivating reason for the Court to make the decision that it did.

 

David Smith:  Well that’s right.  I mean, as I understood the facts, the Court found that or considered evidence that he intended to marry her.  I think they’d even fixed a date.  And, of course, had he married her, that marriage would have revoked the Will, in which case she would have had all of the entitlements of a wife on an intestacy or under any Will that he would have made after that marriage, because of course the marriage would have revoked the pre-existing Will.

 

I guess to wrap it up, Megan, what I’d like to just touch on, or discuss, is the whole issue of damages here.  As I understand the nature of the appeal of this case, is primarily concerned with the quantum of damages.  The argument being that the value of the RRSP on a rollover was what she was entitled to receive. And I should point out the RRSP, as I understand it, no longer was in existence at the time of the judgment.  And so we’ve got a cash judgment payable by the estate in an amount equal to the RRSP on a rollover, even though the RRSP no longer exists.

 

Megan Connolly:  And I think that in this decision, the Court had also said that she wasn’t going to have to pay taxes on any of this, that to the extent taxes were payable, they’d be paid by the estate.

 

David Smith:  Which again is certainly a better result than would be the case had she made a support claim, in which case her support and entitlement, were it to be an income stream, would be taxable in her hands.

 

Megan Connolly:  And so I think this is another situation where, I mean, in the discussion of the case about constructive trusts, it was very interesting.  But I think it’s a situation where the Court sort of looked at a situation that seemed patently unfair and wanted to, I guess, manoeuvre the law in such a way as that she would get what she otherwise would have received from him.

 

David Smith:  Well that’s right and I mean, equitable principles are such that the law is always a flexible enough instrument and especially equity, which is again, we have to remember that estate courts historically were surrogate courts and courts of equity, rather than courts of law.  And so in that sense, the Court would be looking to make a fair decision all around.  And so in that sense, I think, you know, subject to any reversal on appeal, this is another interesting decision to consider any time as counsel we may be retained by a common-law spouse to consider a claim against an estate.

 

Megan Connolly:  Um, hmm, it is, so we’ll have to see what the Court of Appeal says.

 

David Smith:  Right.  Okay, well thanks Megan.

 

Megan Connolly:  Thank you, David.

 

David Smith:  Bye-bye.

 

This has been Hull on Estates with the lawyers of Hull & Hull.  The podcast you have been listening to has been provided as an information service.  It is a summary of current legal issues in estates and estate planning.  It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

 

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