This week on Hull on Estates, David Smith and Jonathan Morse review some of the recent podcasts and hone in on some of the evidentiary requirements of a common-law spousal relationship as it relates to dependant support claims under the Succession Law Reform Act. They look at some recent case law and some of the requirements under the Ontario statute.

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.
 

A Review of Dependant Support Claims - Hull on Estates Podcast #130

Posted on September 30^th, 2008 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates. You’re listening to Episode #130 on Tuesday, September 30^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.

Jonathan Morse: Hi and welcome to another episode on Hull on Estates. I’m Jonathan Morse.

David Smith: And I’m David Smith.

Jonathan Morse: 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 at estatelaw.hullandhull.com.

David Smith: Good morning, Jonathan.

Jonathan Morse: Good morning, David. As I am a relatively new associate at Hull and Hull, I thought I would review several of the recent podcasts to see if I could identify a topic that has not been covered in depth for some time.

David Smith: Well that was quite an undertaking, Jonathan. How did you make out?

Jonathan Morse: Well, I enjoyed myself, to start.

David Smith: There’s certainly a lot of material, isn’t there?

Jonathan Morse: There sure is. I focused on podcasts so far in 2008, and with the blogs I went back a bit further. I honed in on the topic of dependant support claims, and particularly, the evidence required to make a successful claim by dependants.  And to hone in even more, I realized that Section 57 of the SLRA, that’s the Succession Law Reform Act defines dependant. One of the categories of dependant is spouse, and I thought it would be helpful, certainly for me anyway, and I thought for listeners, to delve into the evidentiary requirements for spouse, particularly some of the elements of common-law spouse required under the SLRA.

David Smith: You know that’s a great topic, Jonathan, and what I’d say about that topic, specifically, is that nine times out of ten, when you go in front of a judge on a support claim when you’re contemplating a claim, either defending the claim or advancing the claim, I find that the biggest growth area right now is where people are trying to push the envelope as to who is a spouse, and whether there’s been cohabitation for a sufficient period of time. So a good topic and a lot of interesting stuff on that.

Jonathan Morse: Thank you. Before we delve too far into that distinction, I guess I’d like to remind listeners of some recent podcasts on this topic, to provide some context for today’s discussion of dependant support claims, and particularly the evidence required to prove a common-law relationship.

David Smith: Okay, thanks, Jonathan. You know the topic of today is fitting, especially when you see by looking at yesterday’s blog by Bianca La Neve. It’s a situation where a widow there applied for support from the deceased’s estate.  And in that case, McDougall and McDougall Estate, a 2008 Ontario Superior Court decision, that was a second marriage and not a common-law situation.  But you know, it does highlight the point that support claims are more and more common as I said at the outset. And here in this case, the widow’s claim was denied because it was not driven by need but rather her wish to live the lifestyle she had enjoyed with the deceased prior to a period long before he became ill. And an important point to remember is that the Court looks at support and dependency immediately before death. While there is some case law that suggests, that can be a bit fuzzy on that point, that was an important point to highlight for sure.

Jonathan Morse: I guess following that, a classic example of a common-law situation is when the children of the first marriage hope to deny that their parent had a common-law relationship with the person claiming that he or she was a common-law spouse. Looking further in my review of our recent material, more than two years ago, Suzana Popovic-Montag wrote in her blog, several entries in a series that asked the question, is there support after death? In Part 3 of that, she answered the question of who is a dependant, and that was on June 28, 2006. More recently, on May 20, 2008, Rick Bickhram and Sean Graham discussed evidence issues in estates, when a main party is deceased. In particular, they focused on Section 13 of the Evidence Act and the requirement for corroborative evidence.

David Smith: And let’s just touch on that a little bit more and just explain that requirement. The key witness in any of these claims, Jonathan, is deceased, right? I mean we’ve got a situation where the person who could best tell whether the claimant was, in fact, being supported by the deceased, obviously is deceased. Section 13 speaks to that, it says you’ve got to have corroboration, you’ve got to have material evidence that touches on the issue. The kind of corroboration you want may be in the manner of, if there’s a challenge to whether the two were living together, you’re going to want perhaps bills that were mailed to the address showing both names of both people who were living there together, you’re going to want some witnesses who can attest to the nature of the relationship, that sort of thing, so a very important point. And as I understand it Jonathan, you also found another podcast that touched on this issue.

Jonathan Morse: That’s right, thank you David. I refer listeners to July 1, 2008, just at the beginning of the summer.  The podcast by Natalia Angelini and Craig Vander Zee, and they discussed dependant relief and again, the Succession Law Reform Act. In particular, they focused on recent case law, including the line of cases culminating in Cummings and Cummings, decided by the Supreme Court. They left off their discussion by citing two other cases, Reid and Reid, that’s R E I D and Reid, a 2005 Ontario Superior Court of Justice case and Parelli and Foley Estate, a 2006 decision by the Ontario Superior Court of Justice.

David Smith: Right, and just one clarification there or comment, Jonathan, is that, of course, Cummings was a Court of Appeal decision.  But I understand that Reid and Parelli, it’s expanded upon some of that and why don’t you tell me a little bit about those.

Jonathan Morse: Sure. In Reid and Reid, it was useful because of Justice Snowie’s analysis of the particular evidence. It’s not necessarily on point with this discussion regarding common-law spouses, but I’ll be brief. Reid and Reid involved the daughter and two grandchildren of the testator, and the three claimants were claiming that they were dependant on the testator. The estate was about $200,000. The son of the testator, so the brother of one of the claimants, did not agree that his sister and niece and nephew were dependants.  The Court found they were dependants and that a testator’s support need not be direct financial support.

David Smith: I think that’s an important point, and you know, that’s an important clarification of the blog that we referenced that Bianca did, where, in that case, the Court was critical of the fact that there was no need. Certainly coming out of Cummings we have a regime which clearly says that you do not have to be in need, in financial need and in dependency in a financial sense to be eligible for support. Cummings has expanded the need and the concept of support beyond simply financial need.

Jonathan Morse: Thanks, David. The next case, Parelli and Foley Estate, that was decided in 2006 and it’s certainly more on point with today’s discussion.  And in this case, James Foley separated from his wife and subsequently moved to Niagara Falls, and that was in 1988, to a home that he purchased. His girlfriend at the time, a woman named Paula Parelli, gave up her apartment in Toronto that same year and moved to live with Foley. Foley relied on his income from investments while Parelli, she continued to work. Their incomes were comparable, according to the findings by the Court, and in the range of about $25,000. They each contributed to the upkeep, maintenance and operation of the household in Niagara Falls. Foley cooked, did the yard work, washed the kitchen floor, while Parelli cleaned up after dinner, did the laundry and cleaned the house generally. So in 1998, Foley developed Alzheimer’s and in 2000 Parelli quit her job to look after Foley. Then Foley, unfortunately died in 2003. 

So in this instance, the estate, including the value of the home, was about $510,000. There were bequests to family members and allowance for Parelli to stay in the home five months after Foley’s death. In this case, Parelli claimed a constructive trust, which the Court allowed, but only for the period during which she had to give up her job to care for Foley, so that was from the period of 2000 to 2003. The Court did not find there was a nexus to the property though, so the dependant’s support claim for the common-law spouse succeeded by increasing the amount of money left to her on top of the money left to her in the Will.

David Smith: You know, that’s a good illustration, Jonathan, of the interplay between a constructive trust claim and a support claim.  And it helps also advise counsel as to creative lateral thinking, because there the Court considered the fact that Section 62 provides that housekeeping and domestic services provided by the spouse can be factored into any calculation of a support claim. So an interesting way, and it shows the power of Part 5 of the Succession Law Reform Act, and the degree to which it allows the support claimant to realize an entitlement that they couldn’t realize from a constructive trust claim. Really good point.

Jonathan Morse: Just to hone in on a definition for a moment, David, the SLRA defines spouse, does it not?

David Smith: That’s right. A spouse is either of two persons who are not married to each other, and who have either cohabited continuously for a period of not less than three years, or in a relationship of some permanence, if they are natural or adoptive parents of a child.  So it’s a looser definition of spouse than under the FLA, for example.

Jonathan Morse: And I guess I’m envisioning that in sort of the world of different relationships that arise, that trying to determine whether a relationship is actually common-law or not, can be quite tricky sometimes.  And I think the definition leaves room for debate because there seem to be so many unique facts, or different fact scenarios. I guess I point to a case, and it was an earlier case in 1999, in Saskatchewan, which provides insight into the evidentiary issues that arise in determining whether or not a common-law spousal relationship exists.  And I think the same factors would apply in Ontario, and maybe you can speak to that, David.

David Smith: Yeah, one thing I would say is generally across Canada, the support regimes are very similar, there’s very little difference among any of them.  And, you know, a lot of the cases from one province can be used and applied in another, subject to any minor discrepancies in wording. But you know, Jonathan, looking at the time, I see that we’re actually getting close to our limit here in terms of having to wrap this up, and I know that there’s an awful lot we can talk about here.  But maybe just in summarizing, can you just give me a sense of what you gleaned in a sort of summary way from your review of the blogs and podcasts?

Jonathan Morse: From the review of the blogs, well we certainly have, we provided a lot of material and I think, certainly for a new lawyer in this area, it can be somewhat overwhelming because there is a large amount of information.  But it’s helpful information as well and provides good direction, a good resource to certainly dig into cases and I think texts, in some respects, to provide good guidance with respect to these different issues including that of common-law relationships and what constitutes the common-law relationship.

David Smith: And tell me, Jonathan, just as a lawyer newly specializing in this are of law, were you surprised by the power and breadth of the Succession Law Reform Act as it relates to the dependency claims?

Jonathan Morse: I think I am, yes, because it’s a powerful tool, and certainly clients are recognizing its power and certainly in this time when there’s a lot of wealth transfer happening, individuals are certainly looking to, when an estate arises, they’re looking to how they might resolve situations that have arisen within their family context and coming to us to look at their options under the Succession Law Reform Act.

David Smith: Right, and you know on a final point, I think it highlights the obligation that there should be upon a drafting solicitor who’s making a Will, to ensure that the testator is aware that dependants or people who might qualify as dependants could make claims against the estate and effectively undermine what the testator might think is his last Will. So it’s always a good point for a drafting solicitor to consider. Well, look, Jonathan, lots of fun. I really enjoyed podcasting with you, and I think that brings us to the end of this week’s discussion. Thanks for listening, and thanks for joining us today.

Jonathan Morse: It was a pleasure, David. I look forward to podcasting with you again soon.

David Smith: And that’s right, and you know, Jonathan, we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com, as we said at the outset, or just pick up the phone and leave us a message on our comment line at 206-350-6636. And 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 Dave Smith.

Jonathan Morse: And I’m Jonathan Morse. Until next week, 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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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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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.

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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In this week's episode of Hull on Estates, David Smith and Diane A. Vieira discuss the issues surrounding spousal exclusion from the will of the deceased and how to challenge this exclusion.

Click "Continue Reading" to read the transcribed version of this podcast.

Posted on August 28^th, 2007 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates. You’re listening to Episode #74 in our continuing podcast series.

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 Diane.

Diane Vieira: Good afternoon Dave.

David Smith: Diane, today we decided that we’re going to talk about the issues that generally arise when the surviving spouse of the deceased walks into your office and shows you a Will where she’s not a beneficiary or he’s not a beneficiary. And asks you what you can do for him or her. And I understand that there’s a fact situation that we can relate to our listeners that might help illustrate this example, and I wonder if you could lead us into that.

Diane Vieira: The fact situation is we have someone who’s in a short marriage, less than two years, and they’re away for a short period of time on a small vacation. And during that time, her spouse makes a Will that completely cuts her off or leaves her a very small part of his estate. She doesn’t find out about this until after the Will has been probated and now she’s left in a situation of not knowing what her rights are or what’s she’s entitled to.

David Smith: I guess the first thing that jumps to mind, Diane, when you present the fact situation is a Will challenge. And I think if we look at the Will challenge first of all, does this fact situation, just as you’ve described it, give rise to any basis upon which to challenge the validity of that Will?

Diane Vieira: There are a few red flags that come up immediately. The Will was drafted when she was out of the country for a short period of time.  Other things to consider was the lawyer who drafted the Will was introduced to her spouse by a third party. There’s also some issues regarding the capacity of her spouse to make the Will or to transfer his assets at the time.

David Smith: In this situation where she’s out of the jurisdiction and the Will is made in her absence, what does that suggest in terms of creating a legal argument to challenge this Will?

Diane Vieira: The first thing that immediately comes to mind is undue influence by third parties and in this situation, it was other family members. They waited specifically for a period of time where her spouse would be isolated and she would not know about this Will until after.

David Smith: And earlier, Diane, you mentioned that she was, or that the deceased was taken to a new lawyer by a third party. Do we know in our fact situation as presented whether the third party who took the deceased to a lawyer was in fact one of the family members who benefits under this new Will?

Diane Vieira: In this case it was.  It was a family lawyer known to the other family members and who had done work for the other family members. And the lawyer who drafted the Will actually spoke to the other family members prior to ever speaking to her spouse.

David Smith: You know that just strikes me as just a fantastic set of circumstances. If I’m the lawyer wanting to challenge the Will, you’re telling me I’ve got a situation where the wife is out of the jurisdiction.  The theory will be that the family members swoop in, take the Dad or uncle or whoever the person is in terms of their relationship, to a lawyer of their choosing with whom they have a relationship. It’s kinda surprising, isn’t it, that that lawyer would even agree to make the Will in those circumstances?

Diane Vieira: It is, and it appears that it could be even the third parties in this circumstance who paid to have the Will drafted and the costs associated with that.

David Smith: Wow, I mean that’s just, that’s just something that, for a practicing lawyer, you got to think that the advice, common sense and any good advice would dictate that you just simply would not make a Will in those circumstances.  Or refer the deceased to someone else. So it sure sounds to me like there’s a good basis for a Will challenge there. Of course, if we’re alleging undue influence, the burden of proof is on the surviving spouse challenging the Will to prove undue influence, isn’t it?

Diane Vieira: Yes it is and another thing to consider is testamentary capacity. 

David Smith: And what are we looking for in terms of testamentary capacity?

Diane Vieira: Whether or not the testator was capable of drafting that Will or making his wishes known. 

David Smith: And, of course, we know from the case law, Banks and Goodfellow being the leading case, that what you need to demonstrate is that the deceased knew who he had obligations to, knew the value of his assets, and had a clear plan and a clear understanding of what it was he wanted to do. Now it’s quite possible he may have wanted to cut his wife out of his Will.  It doesn’t necessarily mean that he was capable if he didn’t know the value of his assets, didn’t understand that he had obligations.  It’s not enough simply to have the intention to want to deprive someone of their entitlements. I think now though what I’d like to do, Diane, is why don’t we segway into a different fact situation or same fact situation but different argument which is, let’s assume that we’ve got no basis for a Will challenge. What can we do to help such a person if she were to walk into our office in terms of advancing her entitlements when we don’t have a good case to make a Will challenge?

Diane Vieira: One thing she can, she or he can decide is to not take under the Will and make an equalization claim under the Family Law Act.

David Smith: Alright and in this case, if there’s no entitlement under the Will whatsoever, clearly electing under the Family Law Act would probably be the prudent thing to do.

Diane Vieira: It appears so.

David Smith: Right.  Certainly and, you know, we’ve talked a little bit about Family Law Act elections. The difficulty with Family Law Act elections is that they can be very complicated in terms of preparing the net family property statements and given a choice, what else or is there anything else, Diane, that can be pursued apart from a Family Law Act claim?

Diane Vieira: You might also consider a dependency claim under the Succession Law Reform Act under Part 5.

David Smith: If we want to make a claim for support under the Succession Law Reform Act on behalf of a spouse, can you give me a little bit of an explanation as to what that entails?

Diane Vieira: The spouse will have to look under the definition of dependent in the Act; if they do fall under that definition, they can make a claim.

David Smith: Let’s talk about that just briefly. How is a spouse defined under the Act?   I mean, do you have to be married or can you be a common-law spouse?

Diane Vieira: You can be a common-law spouse as long as you’ve lived together continuously for three years or if you have a dependent child together.

David Smith: Alright and so, I mean, in our fact situation, we’ve said that this was a situation where the deceased was married and I take it, it’s probably obvious that someone who’s married, that meets the definition of spouse as well.

Diane Vieira: Yes.

David Smith: And in terms of dependency, what does it mean to be a dependent?

Diane Vieira: First and foremost, you consider if the dependent is in need of support. There’s also, under Cummings and Cummings, a moral obligation, if that first part can’t be met.

David Smith: Yeah and I think, Diane, what we want to look at there, what we consider is, did the deceased have moral obligations to the spouse which give rise to a support claim? And can that exist independently of need? And, you know, that’s a whole topic for a separate podcast. But I think certainly we want to consider the relevant section of the statute.  And the relevant section of the statute for this purpose is Section 62 of the Succession Law Reform Act. And Diane, I wonder if you can just sort of touch on some of the issues that the court considers under that Section in determining the amount of support.

Diane Vieira: Some things the court will consider are the current assets of the person making the claim. The assets they’re likely to have in the future, the capacity to contribute to their own support, the person making the claims age, physical and mental health.  They will also look at the standard of living, what they were accustomed to when they lived with their spouse and the lifestyle they were accustomed to.

David Smith: And let me interrupt there, Diane.  I think that’s a really important point because if someone comes to your office as a spouse and says my spouse has died, I’m cut off, I’m now in a new relationship.  But my new spouse is not making anything close to the relationship I had with my previous spouse.  And yes, I’m able to get by, but no, I’m not going on vacations and out to dinner and what have you. Isn’t it fair to say that that person could still advance a support claim even though it’s as if they’re missing wants rather than needs.

Diane Vieira: I think that’s fair.  In their Affidavit evidence, they should demonstrate how the lifestyle has changed from what they were previously accustomed to, to what they’re accustomed to now.

David Smith: And then you touched briefly on the Cummings case, Diane, and you know, that’s, of course, engendered a whole lot of debate within the Estates Bar. A decision of the Court of Appeal saying that the court must consider if there’s any moral obligation owing by a spouse, a deceased spouse, to a surviving spouse which gives rise to a determination of support.  And really, the interesting language in that case is when the court says that a surviving spouse is entitled to a fair share of the estate.  And it’s going to take a lot of case law to determine exactly what that means. So I think, Diane, we’ll wrap things up here at this juncture but perhaps, you know, in terms of summarizing, perhaps you can just, for the listeners, summarize what we’ve talked about in very general terms, in terms of claims and entitlements that a surviving spouse can make.

Diane Vieira: Sure, if someone approaches you, a spouse that has been cut off from a Will or did not receive their fair entitlement, some things to consider would be a Will challenge if those circumstances exist. If that is not the case, they can try to make an equalization claim under the Family Law Act and not take under the Will. Or a third option is to make a dependency claim under the SLR Act.

David Smith: And in terms of preparing material and going to court with respect to this, what kind of information gathering should you do if you’re going to make a support claim?

Diane Vieira: I would gather evidence of the lifestyle that you were accustomed to before, the assets of the estate currently and I would refer to Section 62, subsection 1 of the SLR Act under the different subheadings there and see if you have evidence to support your claim.

David Smith: Right and then it’s that evidence which the court will consider, won’t it, in evaluating the claim? So thanks very much.  I enjoyed podcasting with you, Diane, and we’ll look forward to doing this again soon.

Diane Vieira: Thank you.  Bye.

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.

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.

"I must pay heed to the requirement (under section 64) that the applicant be in need of and entitled to support"…

"Such an interpretation would effectively deprive dependants of any interim relief if any question were raised as to entitlement except as to quantum."

 "where the applicant has put forward substantial evidence to support her claim as a dependant, and that the testator was domiciled in Ontario, application for interim relief should be heard even if [status as a dependant] are in issue on the final hearing of the substantive application."

This was the fact situation which presented itself in the recent Ontario case: Re Atherton Estate. The Court concluded that, while there was no question that the document met the formal validity requirements of a holograph will*, the surrounding circumstances suggested that the deceased intended the document to be a draft that would not take effect until it had been typed out and re-executed by the deceased in the presence of two witnesses.

The wrinkle was that, when the relative to whom the deceased had given the handwritten documents returned to visit him in hospital the next day with the typewritten copies, the deceased exhibited no intention to execute the will in its typewritten form.

Until tomorrow,

David M. Smith

*Succession Law Reform Act, R.S.O. 1990, C. S. 6

READ THE TRANSCRIBED PODCAST

During Hull on Estate and Succession Planning Episode #47, Ian and Suzana review four possible flash points to keep in mind when dealing with family law issues. These topics include the family business, the matrimonial home, the treatment of debt and the domestic and family contract.

Ian and Suzana specifically discuss the legal effects of the domestic and family contract upon death and support considerations reviewing the Succession Law Reform Act, Section 62 and 63.

Section 4(1) of the Succession Law Reform Act *("SLRA") provides that, except in the case of the will of a member of forces on active service, or in the case of a holograph will, a will is not valid unless,

(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;

(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and

(c) two or more of the attesting witnesses subscribe the will in the presence of the testator. The requirement that the will be "signed" has been loosely interpreted, with the intention of the deceased being determinative. Courts have accepted wills where:

• the will bears the signature of the testator;
• the will bears part of the signature of the testator;
• the will bears the initials of the testator;
• the will bears a mark made by the testator intended to represent the testator's name (even in situations where the testator is able to write his name, or in situations where the mark of a physically handicapped testator is guided by someone else;
• the will is impressed with the stamp of the testator;
• the testator signs the will using an assumed name;
• the testator signs the will using her title (eg. "Mother");
• the testator signs the will using her name from a previous marriage;
• the will is signed by another person at the instance of the testator (signature by an amanuensis)

The onus of proving due execution is on those propounding the will. The burden is on the propounder on the balance of probabilities. The position of the signature is important. In addition to the reference in s. 4(1) that the will be signed "at its end", s. 7 of the SLRA also impacts on the validity of the will and the position of the signature.

Case law applying this section (or the equivalent section in other provinces) is hard to reconcile. What emerges is that the court will strive to uphold the validity of the will that has a signature at a point other than at its end if at all possible. Courts will attempt to read the pages of a will in another order, or apply the doctrine of incorporation by reference in order to validate the will. In some cases, however, this is simply not possible.

A signature on the envelope of the will has been accepted as a valid signature where the court found that the circumstances precluded fraud, the envelope had a close connection with the sheet of paper, both documents were written on the same occasion and in the presence of the attesting witnesses, and the safekeeping of the documents showed that they were genuine. Section 7 of the SLRA specifically applies to all wills, whether holograph or not.

Tornorrow, I will address the requirements surrounding the witnessing of the will.

Have a great day. Paul Trudelle --------