Cummings et al. v. Cummings individually and as Executrix and Trustee of the Estate of Bruce Norman Cummings, deceased [Indexed as: Cummings v. Cummings]
69 O.R. (3d) 398
[2004] O.J. No. 90
Docket No. C40304
Court of Appeal for Ontario
McMurtry C.J.O., Doherty and Blair JJ.A.
January 15, 2004
*Application for leave to appeal filed March 15, 2004, and submitted to court May 3, 2004.
Family law -- Support -- Child support -- Arrears -- Father unilaterally reducing child support payments under separation agreement during final years of his life when his income was considerably reduced -- Mother neither objecting nor waiving her right to arrears of child support -- In dependants' relief application, application judge ordering payment of arrears to date of father's death -- Application judge not erring in limiting arrears to date of death rather than making arrears payable to date of application -- Application judge entitled to exercise his discretion in limiting arrears to date of death and to deal with allocation of assets of estate in post-death era on basis of dependants' relief principles.
Wills and estates -- Dependants' relief -- Application judge on dependants' relief application may take into account not only needs and means of applicant dependants but also testator's moral obligations towards dependants who were not making claim or asserting need -- Succession Law Reform Act, R.S.O. 1990, c. S.26.
The testator and his wife M separated in 1986 and were divorced in 1992. They had two children, P and E. The divorce judgment incorporated the terms of a separation agreement providing for the payment by the testator of child support in the amount of $2,000 per month, recognizing that P, who suffered from Becker's muscular dystrophy, might continue to be a child of the marriage and in possible need of support throughout his life. The agreement specified that it would survive the death of a party and was binding on heirs and executors, and particularly that the testator's obligation to pay support would survive his death and be a first charge on his estate. At the time of the divorce and separation agreement, the testator was making $300,000 a year. In 1994, his employment was terminated. In 1996, his income was about $12,000 and in 1997 it was $1,473.
In 1996, the testator reduced the amount of his monthly payments under the divorce judgment and separation agreement from $2,000 to $378. M did not object but did not indicate that she was waiving her rights to any arrears of support. The testator married R in 1997. At about the same time, he was diagnosed with terminal cancer, and he died nine months later. In his will, he directed that a testamentary trust in the amount of $125,000 be established to provide support payments in the amount of $600 per month, reducing to $400 when either child ceased to be a dependant. After the testator's death, P's condition deteriorated, and it was expected to continue to deteriorate. His prospects for long-term employment were not good. Expensive modifications to his home would be necessary to accommodate his needs, and he would eventually require full- time attention. P and M, for the benefit of E, brought an application for dependants' relief pursuant to Part V of the Succession Law Reform Act.
The application judge found that the net value of the estate was $637,500 (the correct figure was $650,000). The total estate was comprised of the testamentary estate itself, valued at approximately $135,000, and other assets that by virtue of [page398] s. 72 of the Act were deemed to be available for purposes of valuing the estate and supporting a charge to secure payment of a dependants' relief order ("the notional assets"). The application judge found that the testator had not adequately provided for the proper support of his dependant children by establishing the $125,000 testamentary trust. He held that, on a strictly needs-based approach, he might well be justified in ordering that the entirety of the net testamentary estate be transferred for the support of P and that the assets of the notional estate be charged for their full value. However, he held that he had to take into account the testator's moral obligations to all his dependants. He concluded in all the circumstances that the level of support should be set at $250,000 payable by way of lump sum to M in trust to be applied to a maximum of $10,000 for E's expenses of completing her Master's degree and the remaining amount to be held in trust to apply so much of the income, and to the extent it was insufficient, the capital, for the care and welfare of P during his life. He also directed that support arrears in the amount of $53,256.08, calculated to the date of the testator's death, be paid to M. M, P and E appealed.
Held, the appeal should be dismissed.
The application judge was entitled, on the record before him, to exercise his discretion in limiting the arrears of support to the date of death, and to deal with the allocation of the assets of the estate in the post-death era on the basis of dependants' relief principles.
In considering an application for relief on behalf of one or more dependants, the court may take into account not only the needs and means of those dependants but also the moral obligations of the testator to another dependant who is not asserting need at the time. Otherwise, the court might well make an order that would put the other dependant in need and therefore trigger not only an injustice but also another series of court proceedings to determine that issue. When examining all of the circumstances of an application for dependants' relief, the court must consider (a) what legal obligations would have been imposed on the deceased had the question of provision arisen during his lifetime; and (b) what moral obligations arise between the deceased and his or her dependants as a result of society's expectations of what a judicious person would do in the circumstances. Either or both of those types of obligations fit nicely into the lengthy list of factors already articulated in s. 62(1) of the Act. Even though neither M nor R sought relief on the application, they were "dependants", and the application judge appropriately took into account the testator's moral duties towards them in addition to P's needs. As the application judge was exercising a discretion, then in the absence of an error in principle, a failure to consider material evidence or the giving of too much weight to one relevant consideration over others, the appellate court should not interfere with the exercise of that discretion. The application judge reasonably exercised his discretion in applying the foregoing principles and the provisions of ss. 58 and 62 of the Act in arriving at his disposition in the circumstances of this case.
The application judge did not err in failing to award costs to the applicants. The court has the power under s. 75 of the Act to direct that the costs of the application be paid out of the estate or otherwise as it thinks proper. In exercising his discretion to order "otherwise", the application judge considered and weighed a number of relevant factors and concluded that the appropriate order was for the parties to bear their own costs. He made no error in doing so.
APPEAL from a judgment of Cullity J. (2003), 223 D.L.R. (4th) 733 (S.C.J.) in an application by the dependants for relief.
Tataryn v. Tataryn Estate, 1994 51 (SCC), [1994] 2 S.C.R. 807, 93 B.C.L.R. (2d) 145, 116 D.L.R. (4th) 193, 169 N.R. 60, [1994] 7 W.W.R. 609, 3 E.T.R. (2d) 229 (sub nom. Tataryn v. Tataryn), apld [page399] Other cases referred to Allardice, Allardice v. Allardice (Re) (1910), 29 N.Z.L.R. 959; Bosch v. Perpetual Trustee Company, 1938 415 (UK JCPC), [1938] A.C. 463, [1938] All E.R. 14, 107 L.J.P.C. 53, 158 L.T. 395, 54 T.L.R. 467, 82 Sol. Jo. 311 (P.C.); Currie v. Currie (Estate) (1995), 1995 16592 (NB CA), 166 N.B.R. (2d) 144, 425 A.P.R. 144, 9 E.T.R. (2d) 1, [1995] N.B.J. No. 305 (QL) (C.A.), revg (1994), 1994 17501 (NB KB), 154 N.B.R. (2d) 200, 395 A.P.R. 200 (Q.B.); Gavinchuk v. Mickalyk (2003), 2003 ABQB 849, [2003] A.J. No. 1279 (QL), 4 E.T.R. (3d) 215 (Q.B.); Hull Estate (Re), 1943 113 (ON CA), [1943] O.R. 778, [1944] 1 D.L.R. 14 (C.A.); Kipp v. Buck Estate, [1993] O.J. No. 790 (QL) (C.J.); McSween v. McSween Estate, [1985] O.J. No. 1765 (QL), 21 E.T.R. 195 (Surr. Ct.); Ostrander v. Kimble Estate (1996), 1996 6978 (SK QB), 146 Sask. R. 64, [1996] 8 W.W.R. 336, 13 E.T.R. (2d) 231, [1996] S.J. No. 444 (QL) (Q.B.); Richer v. Richer (1984), 1984 4770 (ON SC), 17 E.T.R. 102, 40 R.F.L. (2d) 217 (Ont. Co. Ct.); Shemesh v. Shemesh Estate, [1992] O.J. No. 2724 (QL) (C.J.); Siegel v. Siegel Estate (1995), 1995 9233 (AB KB), 35 Alta. L.R. (3d) 321, [1996] 3 W.W.R. 247, 10 E.T.R. (2d) 178, [1995] A.J. No. 1158 (QL), 177 A.R. 282 (Q.B.); Swire v. Swire Estate (1987), 1987 8344 (ON SCDC), 24 O.A.C. 147, 10 R.F.L. (3d) 399 (Div. Ct.), affg [1986] O.J. No. 2023 (QL), 23 E.T.R. 246 (Surr. Ct.); Thronberg v. Thronberg Estate (2003), 2003 SKQB 114, [2003] S.J. No. 195 (QL), 4 E.T.R. (3d) 143, 231 Sask. R. 39 (Q.B.); Walker v. McDermott, 1930 1 (SCC), [1931] S.C.R. 94, 1 D.L.R. 662 Statutes referred to Dependants' Relief Act, R.S.O. 1970, c. 126 Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) Family Law Act, R.S.O. 1990, c. F.3 Succession Law Reform Act, R.S.O. 1990, c. S.26, ss. 57 "dependant", 58-62, 75 Wills Variation Act, R.S.B.C. 1979, c. 435, s. 2(1) Authorities referred to Macdonnell, I., T. Sheard, I.M. Hull and R. Hull, Macdonnell, Sheard and Hull on Probate Practice, 4th ed. (Toronto: Carswell, 1996)
Daniel J. Dochylo, for appellants. R. Brian Foster, Q.C., for respondent.
The judgment of the court was delivered by
1BLAIR J.A.: -- The task facing a judge who is required to determine whether a deceased person has made adequate provision for the proper support of his or her dependants is a difficult and delicate one when the estate is not large enough to satisfy the competing legal and moral claims of all dependants. This is particularly so where the needs of one dependant far outstrip the capacity of the estate to respond to them fully. The case before us exemplifies this dilemma.
2The appellants argue that the deceased, Bruce Norton Cummings, did not make adequate provision in his will for the proper support of his dependant adult children, Paul and Elizabeth. They [page400] applied to Cullity J. for dependants' relief pursuant to Part V of the Succession Law Reform Act, R.S.O. 1990, c. S.26, as amended (the "Act"). They were successful, but not to the extent they had hoped.
3On this appeal, the appellants seek to have the judgment varied to provide for a greater quantum of dependants' relief and for a larger amount of support arrears. They also seek leave to appeal from the decision of the application judge to award no costs and, if leave be granted, to appeal from that order.
Issues
4There are three issues to be dealt with:
(a) Did the application judge err in limiting arrears of support to the date of Mr. Cummings' death rather than making the arrears payable to the date of the Application?
(b) Did the application judge err in the exercise of his discretion under s. 58 of the Succession Law Reform Act by failing to fix a larger amount for dependants' relief, given particularly the needs of his son, Paul?
(c) Did the application judge err in failing to award costs to the applicants?
5I would answer all three questions in the negative and dismiss the appeal for the reasons that follow.
Background
6Paul and Elizabeth Cummings were 24 and 18 years of age, respectively, at the time of their father's death. It is agreed they both are "dependants" of Mr. Cummings within the meaning of the Act.
7At the time of the Application, Elizabeth had graduated from a course in social work at Sheridan College and was in the process of completing a degree course in social welfare at Nipissing University. She hoped to enroll in a graduate program in social work at Wilfred Laurier University, which would take two years to complete.
8Paul is a university graduate. He has a degree in Business Marketing and Administration and has completed courses in psychology and sociology at Trent University. Sadly, however, he suffers from a progressively debilitating neuromuscular disease known as Becker's muscular dystrophy, for which there is no known cure. No one contests the serious nature of this disease. It [page401] affects every muscle in his body, particularly his heart and lungs. As the application judge described it:
He suffers from weakness in his joints, including his knees. He is liable to fall and unable to run. He has difficulty rising to his feet from a sitting position and in ascending, and descending, stairs. Paul still drives a motor vehicle but has required -- or will soon require -- special attachments to enable him to continue to do this. He lives with his mother and it is anticipated that expensive renovations to the house will be required as his illness progresses. Although his life expectancy is considered to be normal, it is anticipated that he will be confined to a wheelchair before he is 40 years of age.
9It is the poignancy and need of Paul's situation that underlies the Application and this appeal. His condition has deteriorated since his father's death. While he was at one time fully employed, he has not been able to sustain that employment and is now attempting to work part-time from home, but without much success. His prospects for long-term employment are not good. Expensive modifications to the home will be necessary to accommodate his needs. He will eventually require full-time attention. Everyone agrees that the costs of Paul's future care will far exceed the value of Mr. Cummings' estate.
10Paul and Elizabeth are the children of Mr. Cummings and his first wife, the appellant Mary Cummings.
11Bruce and Mary Cummings were married in 1968. They separated in 1986 and were divorced in January 1992. The divorce judgment incorporated the terms of a separation agreement providing, amongst other things, for Mr. Cummings to pay Mary Cummings support for the children in the amount of $2,000 per month, and recognizing that "Paul may continue to be a child of the marriage and in possible need of support throughout the rest of his life, as a result of his disease." The agreement also specified that it would survive the death of a party, was binding on heirs and executors and, particularly, that Mr. Cummings' obligation to pay support would survive his death and be a first charge on his estate.
12Mr. Cummings met the respondent, Ruta Cummings, in 1986. In 1988, they began to live together in a common-law relationship. They were married in October 1997. At about the same time, Mr. Cummings was diagnosed with terminal cancer, and he died about nine months later. The relationship between Mr. Cummings and the respondent was an enduring, intimate and loving one.
13Mr. Cummings was employed in the publishing industry for many years. At the time of the divorce and separation agreement, he was earning approximately $300,000 a year. In 1994, however, his employment was terminated, and although he [page402] received a handsome severance package of approximately $450,000, his money ran out in 1996. He was never successful thereafter in his attempts to establish a viable consulting business. In 1996 his income was about $12,000, and in 1997 it was $1,473.
14Ruta Cummings is, and has been, employed in the computer software industry. There is no evidence as to her level of earnings, but she deposed that she was "presently capable of earning an income capable of providing adequately for [her] support". Neither she nor Mary Cummings advanced any claim for dependants' relief. The respondent's evidence is that she and the deceased "contributed approximately equal amounts to the maintenance of the household, including all general household expenses and mortgage, insurance and property taxes on [their] home and [their] cottage and [their] automobiles" from the commencement of their relationship. There is nothing in the record to contradict this. Indeed, from about mid-1996 until Mr. Cummings' death, it was Ruta Cummings who was the breadwinner in the family. She contributed to the support payments made by Mr. Cummings under the divorce judgment. Following his death, she paid the sum of $600 per month for support of the children, out of her own pocket.
15Mary Cummings is a Vice-Principal at a Junior School. She earns approximately $76,000 per year. Mary Cummings has contributed to her daughter's tuition of about $5,000 for two years at Sheridan College and about $8,200 for two years at Nipissing University.
16Mr. Cummings' last will and testament was executed on December 15, 1997. The respondent was named his executrix and trustee. A codicil to the will was executed on June 2, 1998. In the will and codicil, Mr. Cummings recognized he had obligations to his dependant children after his death. He directed that a testamentary trust in the amount of $125,000 be established to provide support payments in the amount of $600 per month, reducing to $400 when either child ceased to be a dependant. Should the support obligations be terminated, the will provided that any remaining amount was to be split equally between Paul and Elizabeth, or the survivor.
17The application judge found that the net value of the estate, for purposes of the dependants' relief application, was about $637,500. Counsel now agree the correct figure is approximately $650,000. The total estate, for these purposes, is comprised of the testamentary estate itself, valued at approximately $135,000, and other assets that by virtue of s. 72 of the Act are deemed to be available for purposes of valuing the estate and [page403] supporting a charge to secure payment of a dependants' relief order (the "notional assets"). The other assets in question consist of the matrimonial home of Mr. Cummings and the respondent, a cottage property in the Parry Sound area -- both held jointly by Mr. Cummings and the respondent -- and the proceeds of Mr. Cummings' RRSP, of which the respondent is the direct beneficiary.
18In his decision, the application judge found that Mr. Cummings had not adequately provided for the proper support of his dependant children by establishing the $125,000 testamentary trust. He concluded in all the circumstances that the level of support should be set at $250,000 payable by way of lump sum to Mary Cummings in trust "to be applied to a maximum of $10,000 for Elizabeth's expenses of completing her Master's degree at Wilfred Laurier University and the remaining amount to be held in trust to apply so much of the income, and to the extent it is insufficient, the capital, for the care and welfare of Paul Cummings during his life". He also directed, as previously indicated, that support arrears in the amount of $53,256.08, calculated to the date of Mr. Cummings' death, be paid to Mary Cummings.
19It is from these determinations that the applicants appeal.
Analysis
Arrears of support
20In 1996, Mr. Cummings reduced the amount of his monthly payments under the divorce judgment and separation agreement from $2,000 to $378. The reduction corresponded to the dramatic decrease in his income earning capacity following the termination of his employment in 1994. Mary Cummings never objected to the reduced support payments while Mr. Cummings was alive, nor did she ever indicate she was waiving her rights to any arrears of support.
21The application judge considered, and rejected, the argument that there had been an express or implied agreement between Mr. Cummings and Mary Cummings reducing the support obligation from $2,000 per month to $378, notwithstanding the previous pattern to that effect following Mr. Cummings' loss of employment. He concluded that if Mr. Cummings had applied to vary the support payments and rescind arrears in 1997, shortly before his diagnosis, he would likely have obtained such an order. However, Mr. Cummings did not do so. In all the circumstances, the application judge found that there were arrears of support, and that the estate was large enough to pay those arrears, which constituted a judgment debt and a first charge [page404] against the estate. He granted judgment to Mary Cummings in the amount of $53,255.99 for arrears of support and special expenses to the date of Mr. Cummings' death.
22In making this order, the application judge recognized that the Separation Agreement was intended by its own language to survive the death of a party, and to be binding on the deceased's heirs, executors, administrators and assigns; moreover, it expressly provided that Mr. Cummings' obligation to pay support would survive his death and would be a first charge on his estate. He therefore correctly held that the support arrears constituted a first charge against the estate.
23Given the language of the Separation Agreement and the provisions of the divorce judgment, the estate continued to be subject to an ongoing obligation to pay support in the amount of $2,000 per month, unless otherwise varied by court order. The appellants elected not to rely on that obligation, however, but rather to seek dependants' relief under the Act, for the period following Mr. Cummings' death. Having chosen this route, however, the appellants opened it up to the application judge to exercise his discretion in balancing all of the factors relevant to how the assets in the estate were to be allocated, just as he would have been able to do had he been considering an application to vary the support provisions in the Separation Agreement and divorce judgment.
24Leaving aside Mr. Cummings' death, had there been an application to vary and to rescind arrears, a judge would have been entitled to take into consideration all of the changed circumstances in determining the extent to which arrears should be paid. The application judge in effect did the same thing. He was clearly alive to the limited resources of Mr. Cummings' estate in providing for his dependants' needs. He declined to grant prejudgment interest on the arrears he did award, undoubtedly with that in mind. It is noteworthy, as counsel for the appellants candidly conceded, that any increase in the arrears payable might well require a downward adjustment in any dependants' relief order made in favour of the children.
25In my view, the application judge was entitled on the record before him, to exercise his discretion in limiting the arrears of support to the date of death, and to deal with the allocation of the assets of the estate in the post-death era on the basis of dependants' relief principles.
Dependants' relief under the Succession Law Reform Act
26In determining the allocation of the testator's estate for dependants' relief purposes, the application judge took into [page405] account not only the needs of Paul and Elizabeth but also the moral obligations of Mr. Cummings towards his dependants, including his second wife, Ruta Cummings. He did so even though the respondent was admittedly not in need of support at the time and was not claiming relief under the Act. In my view, he was entitled to do so.
27When judging whether a deceased has made adequate provision for the proper support of his or her dependants and, if not, what order should be made under the Act, a court must examine the claims of all dependants, whether based on need or on legal or moral and ethical obligations. This is so by reason of the dictates of the common law and the provisions of ss. 57 through 62 of the Act.
28Sections 58 and 60 of the Succession Law Reform Act state, in part:
58(1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
(2) An application for an order for support of a dependant may be made by the dependant or the dependant's parent.
(4) The adequacy of provision for support under subsection (1) shall be determined as of the date of the hearing of the application.
60(2) Where an application for an order under section 58 is made by or on behalf of any dependant,
(a) it may be dealt with by the court as . . .
an application made on behalf of all persons who might apply.
29Here, the application is made by Paul Cummings on his own behalf and by Mary Cummings on behalf of Elizabeth. It is conceded that Paul and Elizabeth are dependants as that term is defined under s. 57 the Act, which states:
"dependant" means,
(a) the spouse . . . of the deceased,
(b) a parent of the deceased,
(c) a child of the deceased, or
(d) a brother or sister of the deceased,
to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death. [page406]
30Neither Mary Cummings nor Ruta Cummings sought relief on the application. They are "dependants", however, and their interests may properly be taken into account by the judge hearing the application, in accordance with subsection 60(2)(a) above.
31The factors to be considered by the court on an application under s. 58 are set out in s. 62:
62(1) In determining the amount and duration, if any, of support, the court shall consider all the circumstances of the application, including,
(a) the dependant's current assets and means;
(b) the assets and means that the dependant is likely to have in the future;
(c) the dependant's capacity to contribute to his or her own support;
(d) the dependant's age and physical and mental health;
(e) the dependant's needs, in determining which the court shall have regard to the dependant's accustomed standard of living;
(f) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(g) the proximity and duration of the dependant's relationship with the deceased;
(h) the contributions made by the dependant to the deceased's welfare, including indirect and non- financial contributions;
(i) the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased's property or business;
(j) a contribution by the dependant to the realization of the deceased's career potential;
(k) whether the dependant has a legal obligation to provide support for another person;
(l) the circumstances of the deceased at the time of death;
(m) any agreement between the deceased and the dependant;
(n) any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under court order;
(o) the claims that any other person may have as a dependant;
(p) if the dependant is a child,
(i) the child's aptitude for and reasonable prospects of obtaining an education, and
(ii) the child's need for a stable environment;
(q) if the dependant is a child of the age of sixteen years or more, whether the child has withdrawn from parental control; [page407]
(r) if the dependant is a spouse or same-sex partner,
(i) a course of conduct by the spouse or same-sex partner during the deceased's lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship,
(ii) the length of time the spouses or same-sex partners cohabited,
(iii) the effect on the spouse's or same-sex partner's earning capacity of the responsibilities assumed during cohabitation,
(iv) whether the spouse or same-sex partner has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(v) whether the spouse or same-sex partner has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(vi) in the case of a spouse, any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse had devoted the time spent in performing that service in remunerative employment and had contributed the earnings to the family's support,
(vi.1) in the case of a same-sex partner, any housekeeping, child care or other domestic service performed by the same-sex partner for the deceased or the deceased's family, as if the same-sex partner had devoted the time spent in performing that service in remunerative employment and had contributed the earnings to the support of the deceased or the deceased's family,
(vii) the effect on the spouse's or same-sex partner's earnings and career development of the responsibility of caring for a child,
(viii) the desirability of the spouse or same-sex partner remaining at home to care for a child; and
(s) any other legal right of the dependant to support, other than out of public money. R.S.O. 1990, c. S.26, s. 62(1); 1999, c. 6, s. 61(1-3).
32After an analysis of various competing authorities, Cullity J. concluded that an Ontario court is entitled under s. 58(1) of the Act to take into account not only needs but, as well, the moral duties of a testator or testatrix towards spouses and children, in arriving at an appropriate support order. He said (reasons, para. 48):
The issue of the weight to be given to moral considerations is relevant in this case: it is posed quite directly by the Respondent's concession that she is not in need of support. On a strictly needs-based approach, I might well be justified in ordering that the entirety of the net testamentary estate be transferred for the support of Paul and for the assets of the notional estate to be charged for their full value. I do not think this would be a correct disposition of [page408] the case. I believe that, apart from any residual value that is to be attributed to freedom of testamentary disposition, and the direction in section 62(1)(k) to consider the existence of a legal obligation to support another person, moral considerations continue to have a part to play in the analysis although, if due consideration is given to the differences in the wording of the legislation of this province and that of British Columbia, they may not be given the same significance as in the courts of the latter.
33Counsel accepted that the foregoing statement represents an accurate summary of the law in Ontario. I agree, although I do not think the caveat that moral considerations are of less significance in Ontario than in British Columbia is necessary.
34The issue whether, and if so to what extent, moral or ethical considerations may be taken into account on a dependant's relief application in Ontario has not been dealt with at the appellate level since the enactment of subsection 58(1) in its present form in 1978, when the provisions of Part V of the Act replaced the provisions of the former Dependants' Relief Act, R.S.O. 1970, c. 126. In this case, the question is whether, in considering an application for relief on behalf of one or more dependants, the court may take into account not only the needs and means of those dependants but also the moral obligations of the deceased person to another dependant who is not asserting need at the time. The answer to this question must be "yes"; otherwise the court might well make an order that would put the other dependant "in need" and therefore trigger not only an injustice but also another series of court proceedings to determine that issue. It is for this reason that the legislation permits the court to treat the application as one brought on behalf of all dependants (para. 60(2)(a)) and why, in subsection 62(1), the factors listed are a mélange of criteria based not only on needs and means but also on legal and moral or ethical claims.
35Prior to 1978 it was well accepted in Canadian jurisprudence that moral or ethical considerations were important in the application of dependants' relief legislation. In Walker v. McDermott, 1930 1 (SCC), [1931] S.C.R. 94, 1 D.L.R. 662, Duff J. observed [at p. 96 S.C.R.]:
What constitutes "proper maintenance and support" is a question to be determined with reference to a variety of circumstances. It cannot be limited to the bare necessities of existence. For the purpose of arriving at a conclusion, the court on whom devolves the responsibility of giving effect to the statute, would naturally proceed from the point of view of the judicious father of a family seeking to discharge both his marital and his parental duty; and would of course (looking at the matter from that point of view), consider the situation of the child, wife or husband, and the standard of living to which, having regard to this and the other circumstances, reference ought to be had. [page409]
36When analyzing the court's task in determining what is appropriate support, many courts, including this one in Re Hull Estate, 1943 113 (ON CA), [1943] O.R. 778, [1944] 1 D.L.R. 14 (C.A.), have followed Bosch v. Perpetual Trustee Company, 1938 415 (UK JCPC), [1938] A.C. 463, [1938] All E.R. 14 (P.C.), in which Lord Romer adopted [at p. 479 A.C.] the proposition that dependants' relief legislation is
designed to enforce the moral obligation of a testator to use his testamentary powers for the purpose of making proper and adequate provision after his death for the support of his wife and children, having regard to his means, to the means and deserts of the several claimants, and to the relative urgency of the various moral claims upon his bounty.
37Lord Romer relied as well on Re Allardice, Allardice v. Allardice (1910), 29 N.Z.L.R. 959 in support of his view that the court's responsibility is to consider whether there has been a breach of the testator's moral duty to his dependants. In conclusion, he stated (at pp. 478-79) that:
. . . in every case the Court must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father.
38Following the legislative changes in 1978, however, there have been conflicting decisions in Ontario as to the role of moral considerations in dependants' relief applications. Authorities such as Richer v. Richer (1984), 1984 4770 (ON SC), 17 E.T.R. 102, 40 R.F.L. (2d) 217 (Ont. Co. Ct.); Shemesh v. Shemesh Estate, [1992] O.J. No. 2724 (QL) (C.J.); and Kipp v. Buck Estate, [1993] O.J. No. 790 (QL) (C.J.); concluded such considerations remain relevant. Earlier Surrogate Court cases took a different approach, however: see McSween v. McSween Estate, [1985] O.J. No. 1765 (QL), 21 E.T.R. 195 (Sur. Ct.); and Swire v. Swire Estate, [1986] O.J. No. 2023 (QL), 23 E.T.R. 246 (Surr. Ct.). In McSween, Carnwath J. said [at p. 211 E.T.R.]:
I therefore conclude that in seeking the correct meaning to be ascribed to the words "proper support", in Ontario, under the Succession Law Reform Act, primary importance must be attached to the economic situation of the dependant at the time of the hearing as opposed to ethical or moral obligations to be imputed to the deceased at whatever point in time. That is not to say that the opening words of s. 62(1)(a) of the Act should be ignored; there is a requirement to "inquire into and consider all the circumstances of the application". I find, however, that in determining the adequacy of proper support as a prerequisite to the making of an order under s. 58(1) of the Act, that moral or ethical obligations on the part of the deceased are subsidiary to the primary consideration of the economic circumstances of all the parties who would be affected by any order made pursuant to s. 58. [page410]
39Carnwath J. also suggested that a re-examination of the "time-honoured precept" of directing the judge to "put himself in the place of the testator" might be justified as well.
40In my view these questions have been resolved by the decision of the Supreme Court of Canada in Tataryn v. Tataryn Estate, 1994 51 (SCC), [1994] 2 S.C.R. 807, 116 D.L.R. (4th) 193. There, the court held that a deceased's moral duty towards his or her dependants is a relevant consideration on a dependants' relief application, and that judges are not limited to conducting a needs-based economic analysis in determining what disposition to make. In doing so, it rejected the argument that the "judicious father and husband" test should be replaced with a needs-based analysis: see para. 23. I see no reason why the principles of Tataryn should not apply equally in Ontario, even though they were enunciated in the context of the British Columbia Wills Variation Act, R.S.B.C. 1979, c. 435, in which the language is somewhat different from that of the Succession Law Reform Act.
41Writing for a unanimous court in that case, McLachlin J. based her decision on three main underpinnings:
(a) First, she relied upon the broad wording of the British Columbia legislation itself (which gives the court a wide discretion to make provision out of the estate for whatever support it considers to be "adequate, just and equitable in the circumstances" if the testator has not made "adequate provision for the proper maintenance and support of the testator's wife, husband or children").
(b) Secondly, she examined the origins and objects of the statute as dependants' relief legislation (designed to provide for the needs of spouses and children by preventing them from becoming a charge on the state and by ensuring that they receive an "adequate, just and equitable" share of the family wealth on the death of the person who held it).
(c) Thirdly, she applied the principle of testamentary autonomy (i.e., the exercise by a testator or testatrix of his or her freedom to dispose of property, which is to be interfered with not lightly, but only in so far as the statute requires).
42There are three differences of note between the British Columbia and the Ontario legislation. First, subsection 58(1) of the Succession Law Reform Act stipulates that if a deceased "has not made adequate provision for the proper support of his dependants", the court may "order that such provision as it considers [page411] adequate" be made, whereas subsection 2(1) of the British Columbia statute uses the language of not making "adequate provision for the proper maintenance and support" permitting the court to order what it considers "adequate, just and equitable in the circumstances". Secondly, the beneficiaries of the British Columbia statute are not limited to dependant spouses and children, whereas that is the case in Ontario. Finally, the British Columbia legislation does not contain the long list of enumerated factors to be taken into account by the court, as found in subsection 62(1) of the Ontario Act.
43I do not think the difference in phraseology between the two statutes is significant. The language of ss. 58(1) and 62 of the Succession Law Reform Act is broad enough itself. It provides the court with a discretion that is to be exercised upon a consideration of all the circumstances of the application. Nor am I persuaded that the disparity in language between "adequate" and "adequate, just and equitable in the circumstances" is important. As I have already noted, an Ontario court is mandated by the opening wording of subsection 62(1) to "consider all the circumstances of the application". Moreover, as McLachlin J. observed in Tataryn, at para. 13, the making of "adequate" provision and the ordering of what is "adequate, just and equitable" are "two sides of the same coin".
44The fact that the British Columbia legislation does not exclude adult independent children was weighed as a factor militating against a "needs only" test by McLachlin J. in Tataryn. However, it was only one factor of many, and was not dispositive. In any event, the definition of "dependant" in the Succession Law Reform Act is broader than that of its predecessor, the Dependants' Relief Act, and Ontario courts readily applied the "moral duty" analysis to applications under the latter legislation: see, for example, Re Hull Estate, supra.
45Finally, I do not think the enumerated list of factors the court is required to consider under subsection 62(1) militates against the examination of moral duties. To the contrary, many of the factors outlined invoke such considerations and, as Misener J. noted in Kipp v. Buck Estate, supra,3 reinforce the notion that moral obligations of the deceased cannot be ignored. I note, for example, the provisions in paras. 62(1)(g) (the proximity and duration of the dependant's relationship with the deceased); (h) (contributions made by the dependant to the [page412] deceased's welfare), (i) (contributions by the dependant to the acquisition, maintenance and improvement of the deceased's property and business), (j) (contribution to the deceased's career potential), (k) (legal support obligations by the deceased to other persons), (o) (the claims any other person may have as a dependant), and (r)(ii) (the length of time the spouses cohabited). Thus, in spite of other listed factors that relate, directly or indirectly, to needs and means, the provisions of subsection 62(1) of the Act are not limited to economic considerations alone. Moral considerations are relevant to the exercise.
46Moral considerations are not something to be contemplated in addition to, or in isolation from, subsection 62(1), however. The legal obligations and moral obligations referred to in Tataryn are reflected, for the most part, in the language of that lengthy provision. Thus, the principles of Tataryn are to be applied in the context of considering the factors listed and the general direction to consider all the circumstances.
47I conclude, therefore, that the disparities between the British Columbia and Ontario statutes are not sufficiently telling to preclude the application of Tataryn in this province.
48There is another reason why the Tataryn approach fits in Ontario as well. The view of dependants' relief legislation as a vehicle to provide not only for the needs of dependants (thus preventing them from becoming a charge on the state) but also to ensure that spouses and children receive a fair share of family wealth, was also important to the court's analysis in that case. Society's values and expectations change. In earlier times, the prevailing view was that on termination of a marriage the husband was obliged to maintain the wife, and nothing more. At present, however, the provisions of the Divorce Act,4 family property and family support legislation, and the law relating to constructive trusts, all reflect society's expectations that children will be properly supported and that spouses are entitled not only to proper support but also to a share in each other's estate when a marriage is over. These expectations are not confined to British Columbia. They are mirrored in Ontario as well through the provisions of the Divorce Act and the Family Law Act.5 [page413]
49As Justice McLachlin remarked in Tataryn, the Act must be interpreted through the prism of modern values. At paras. 15 and 28 she said:
The language of the Act confers a broad discretion on the court. The generosity of the language suggests that the legislature was attempting to craft a formula which would permit the courts to make orders which are just in the specific circumstances and in light of contemporary standards. This, combined with the rule that a statute is always speaking (Interpretation Act, R.S.B.C. 1979, c. 206, s. 7), means that the Act must be read in light of modern values and expectations. What was thought to be adequate, just and equitable in the 1920s may be quite different from what is considered adequate, just and equitable in the 1990s.
If the phrase "adequate, just and equitable" is viewed in light of current societal norms, much of the uncertainty [about the lack of clear legal standards by which to judge moral duties] disappears. Furthermore, two sorts of norms are available and both must be addressed. The first are the obligations which the law would impose on a person during his or her life were the question of provision for the claimant to arise. These might be described as legal obligations. The second type of norms are found in society's reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards. These might be called moral obligations, following the language traditionally used by the courts. Together, these two norms provide a guide to what is "adequate, just and equitable" in the circumstances.
[Emphasis added]
50In short, when examining all of the circumstances of an application for dependants' relief, the court must consider,
(a) what legal obligations would have been imposed on the deceased had the question of provision arisen during his lifetime; and,
(b) what moral obligations arise between the deceased and his or her dependants as a result of society's expectations of what a judicious person would do in the circumstances.
51Either or both of these types of obligations fit nicely into the lengthy list of factors already articulated in subsection 62(1), as I have mentioned.
52Finally, I note -- as Cullity J. observed -- that Tataryn has been applied in other provinces, such as Alberta, Saskatchewan, and New Brunswick, where the legislation is more similar to Ontario's statute than to the Wills Variation Act in British Columbia. See, for example Siegel v. Siegel Estate, 1995 9233 (AB KB), [1995] A.J. No. 1158 (QL), 10 E.T.R. (2d) 178 (Q.B.); Gavinchuk v. Mickalyk, 2003 ABQB 849, [2003] A.J. No. 1279 (QL), 4 E.T.R. (3d) 215 (Q.B.); Ostrander v. Kimble Estate, 1996 6978 (SK QB), [1996] S.J. No. 444 (QL), 13 E.T.R. (2d) 231 (Q.B.); [page414]Thronberg v. Thronberg Estate, 2003 SKQB 114, [2003] S.J. No. 195 (QL), 4 E.T.R. (3d) 143 (Q.B.); Currie v. Currie (Estate), 1995 16592 (NB CA), [1995] N.B.J. No. 305 (QL), 9 E.T.R. (2d) 1 (C.A.)
53The application judge was correct in concluding that moral considerations continue to be relevant to applications under Part V of the Succession Law Reform Act in Ontario. I do not see the need to qualify this principle by suggesting that those considerations may be of "less significance" here than under the British Columbia legislation. In practical terms I do not know how one would apply such a distinction.
The quantum of dependants' relief support awarded
54The next question to be determined is whether the application judge reasonably exercised his discretion in applying the foregoing principles, and the provisions of ss. 58 and 62, in arriving at his disposition in the circumstances of this case. In my opinion, he did.
55The appellants argue that the application judge failed to give proper weight to the needs of Paul, in particular, in arriving at his decision. Those needs are large, permanent, and will increase with time. The appellants do not submit that all of Mr. Cummings' assets should have gone to support the children, but contend for a two-thirds/one-third distribution.
56The application judge was exercising a discretion, however. In the absence of an error in principle, a failure to consider material evidence, or the giving of too much weight to one relevant consideration over others, this court will not interfere with the exercise of that discretion.
57Here, the application judge considered at length the evidence concerning the needs and means of Paul and Elizabeth, the size of the testamentary and notional estates, the meaning of "proper" support, and the legal and moral claims of the children as well as those of Mary Cummings and Ruta Cummings to support. He recognized that the determination of proper support for Paul was a matter of considerable difficulty and, indeed, that it was not possible to provide adequate support for him, given the limited size of the estate. He properly concluded that Mr. Cummings had recognized his obligations to his children by setting up the $125,000 testamentary trust, but that the trust nonetheless did not provide adequate provision for the proper support of his son. While he did not find the establishment of the trust was necessarily inadequate for the proper support of Elizabeth, he concluded that the provisions made for her should be respected in the order he made.
58In short, the application judge -- as he properly should have done -- gave consideration to the effect of his order on all [page415] dependants. If all, or substantially more of Mr. Cummings' estate had been allocated to or charged with the support of Paul, the respondent Ruta Cummings would arguably be in need. The application judge found that "the moral claims of the Respondent arising from the financial, and other, contributions to their relationship during her period of cohabitation with the deceased should be recognized to the extent that her beneficial ownership of the matrimonial home should not be disturbed, or substantially encumbered, by the order [to be made] for the support of Paul and Elizabeth". He therefore interfered with Mr. Cummings' testamentary autonomy to the extent of replacing the $125,000 testamentary trust with a lump sum payment of $250,000 to Mary Cummings, to be held in trust to be applied to the extent of $10,000 for Elizabeth's expenses of completing her education and the balance to be applied for the care and welfare of Paul Cummings during his life. This order was justified in law and on the record, in my opinion.
59The matrimonial home had a net equity of about $422,500. The RRSP's had a value of $375,000 (subject to unspecified amounts of tax, if distributed). The total net value of the estate, for dependants' relief purposes was approximately $650,000. In effect, what the application judge did was to deduct the equivalent of one-half the value of the matrimonial home ($211,250) and distribute or charge the balance ($438,750) on roughly a 57 per cent/43 per cent basis in favour of the children. This is consistent with the approach in Tataryn, both because of Mr. Cummings' legal obligations respecting the respondent regarding the equalization of net family properties on death and because of the respondent's moral claims arising from financial and other contributions that she had made to the relationship over its 12-year duration. While another judge may have concluded that a higher proportion of the net estate should have been allocated to Paul's care, I can find no error in the exercise by the application judge of his discretion in this regard.
60I would not interfere with the exercise of that discretion in the circumstances of this case.
The costs order
61The appellants also seek leave to appeal, and if leave be granted, to appeal from the order of the application judge that there should be no costs of the application.
62In practice, where the court has concluded that the deceased's distribution should be reviewed in favour of a dependant, costs of all parties are generally ordered to be paid out of the estate on a substantial indemnity basis: [page416] Macdonnell, Sheard and Hull on Probate Practice, 4th ed. (Toronto: Carswell, 1996), at p. 149. However, the court has the power under s. 75 of the Act to "direct that the costs of the application be paid out of the estate or otherwise as it thinks proper". Here, the application judge exercised his discretion to order otherwise.
63In doing so, he considered and weighed a number of relevant factors, including,
(a) the measure of success enjoyed by the applicants;
(b) a more favourable offer to settle that had been made by the respondent;
(c) certain conduct on the part of the respondent that had protracted the proceedings;
(d) the difficulties of the case;
(e) the size of the estate and the impact of a cost award on the respondent; and
(f) the bills of costs provided by the parties.
64The application judge recognized that "the task of weighing these considerations was not an easy one", but in the end concluded that the appropriate exercise of his discretion in the circumstances was for the parties to bear their own costs. I see no error on his part in doing so.
65I would therefore grant leave to appeal from the order as to costs but dismiss the appeal in that regard.
Disposition
66For the foregoing reasons, I would dismiss the appeal.
67Counsel for the respondent did not seek costs if the appeal were dismissed. There will therefore be no costs of the appeal.
Appeal dismissed. [page417]
