Woodsworth v. Bliedung Estate, 2017 ONSC 6082

DIVISIONAL COURT FILE NO.: 17-806 DATE: 20171019

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

N. Spies, M.G.J. Quigley, and M.G. Ellies JJ.

BETWEEN:

JEFFERY BRIAN WOODSWORTH and MADELINE LIEBLING BLIEDUNG, an infant by Her Litigation Guardian JEFFERY BRIAN WOODSWORTH

Appellants

– and –

THE ESTATE OF MELANIE KAREN DARLENE BLIEDUNG, DAVID BLIEDUNG and KRISTA SIOBHAN BLIEDUNG, Estate Trustees for the Estate of Melanie Karen Darlene Bliedung

Respondents

COUNSEL: C. Vandeputte, for the Appellants K. Watters, for the Respondents

HEARD at Hamilton: October 4, 2017

REASONS FOR DECISION

M.G.J. Quigley J.:

[1] Madeline Liebling Bliedung, known as Maddie, and her father Jeffrey Brian Woodsworth together appeal from the Order of Justice Glithero dated January 26, 2017. As an infant, Maddie is represented by her father, Jeff. He is her Litigation Guardian and he also appeals in his own capacity (collectively the “Appellant”.)

[2] Jeff is a widower surviving his wife, Melanie Bliedung who died unexpectedly on September 10, 2014. Maddie was the only child of their relationship. She was born on October 4, 2011 and celebrated her sixth birthday on the day of this hearing.

[3] Under Glithero J.’s Order, the Court declined to order periodic or lump sum support for Maddie under s. 4 of the Succession Law Reform Act, R.S.O. 1990, c. S.26, Part 5, (the “SLRA”). Instead, certain funds of the Melanie Bliedung Estate and life insurance proceeds held in trust for Maddie were ordered paid into court to be administered for Maddie’s benefit by the Office of the Children’s Lawyer (“OCL”) through the Minors’ Fund Program.

[4] Jeff and Melanie were separated for a period of time. During their separation, Melanie executed a will that excluded Jeff from receiving any of her property. She also attempted to provide that her brother David Bliedung and his wife, Krista, would have custody of Maddie and she named them as Trustees to hold the assets of her Estate exclusively for Maddie. When Melanie died she had assets of about $15,000, but more importantly, she held two life insurance policies. Maddie was named as the sole beneficiary of those policies. After Melanie’s death, the life insurance proceeds were paid out to David and Karen as Trustees, in trust for Maddie, but without any stipulated terms. The total amount held by the Trustees for Maddie’s benefit is approximately $371,000 (the “Trust”).

[5] Initially, Jeff included a claim for property equalization against Melanie’s estate but such a claim could not be made. As a result, he brought this application for payment of child support and child support arrears for Maddie from the Estate. However, he did not amend his supporting evidence. He proposed that the retroactive support amount that he claimed should be held by him in a separate fund in trust for Maddie’s “extraordinary expenses.”

[6] This background is what appears to have caused Glithero J. to observe that Jeff’s claim for ongoing monthly support amounts and a retroactive support amount was “a pretty transparent effort on his behalf to look after his financial problems.” Glithero J. did not consider that to be an appropriate approach when the focus of the application was intended to “look after the most important person in this process which is the child Maddy [sic].”

[7] Glithero J. gave his reasons orally on January 26, 2017. He held that recognizing Jeff’s claim would be in contravention of Melanie’s intentions. Further, he held that Jeff’s claims were not viable because the basis of his claim, a sworn accounting of income and expense items in a monthly budget, included expense items that were neither attributable to, nor beneficial to Maddie.

[8] Glithero J. found that there had been a lack of trust between the Respondent Trustees and the Appellant, and that circumstance necessitated some kind of accounting. He ordered that $100,000 be paid into court for the benefit of Maddie, and ordered that the Respondent Trustees pay additional funds, if requested by the Appellant and agreed to on the recommendation of the OCL through the Minor’s Fund Program.

ISSUES

[9] The Appellant’s notice of appeal raises numerous issues with Glithero J.’s order. The Appellant contends that:

(i) The application judge erred by failing to consider both legal and moral obligations that the deceased would have had towards supporting her daughter when he held that no order for support should issue under s. 58 of the SLRA;

(ii) The application judge erred in law by considering irrelevant factors while failing to consider relevant factors in concluding that Maddie was not in need of support under s. 58 of the SLRA;

(iii) The application judge fettered his broad discretion in delegating the decision of the amount of support to the OCL;

(iv) The application judge erred by demonstrating bias or misapprehension of evidence, and by considering inadmissible hearsay and opinion evidence;

(v) The application judge erred in failing to exercise his discretion to order a trial of an issue when he made credibility findings without foundation; and

(vi) The application judge erred in allowing the Respondent Trustees to pay their own costs out of the funds held in trust.

JURISDICTION and STANDARD OF REVIEW

[10] This court has jurisdiction over appeals from determinations of applications for support made under s. 58 of the SLRA by way of s. 76 of that Act. It stipulates that “[a]n appeal lies to the Divisional Court from any order of the court made under this Part”, and both s. 58 and s. 76 are found in “Part V – Support of Dependants” within the SLRA.

[11] The Appellant took no position on the standard of review, but the Respondents submitted, correctly in my view, that the standard of review is that set out in Housen v. Nikolaisen, 2002 SCC 33. On questions of law, the standard of review is correctness. Questions of fact will not be overturned without a palpable and overriding error. Questions of mixed fact and law lie on a spectrum. If the factual and legal aspects cannot be separated, the “palpable and overriding error” standard applies. If a question of law can be extricated, correctness is applied.

Analysis

ISSUE 1: Did the application judge err by failing in his analysis of s. 58 of the SLRA to consider legal and moral obligations that the deceased mother would have had towards supporting her daughter?

[12] Section 58(1) of the SLRA deals with orders for support. It provides that where a deceased person has not made adequate provision for the proper support of his or her dependants, the court may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of those dependants.

[13] The Appellant argues that an applications judge hearing a motion for dependant’s support under s. 58 must consider the “legal and moral obligations that the mother would have had towards her daughter”, Maddie, but that Glithero J. failed to consider any moral obligations that the mother would have had: Cummings v. Cummings, [2004] O.J. No. 90 (CA). Instead, the Appellant argues that Glithero J. focused on preserving Maddie’s fund for her education, even though, in his counsel’s view, s. 58 of the SLRA places her dependent relief claim ahead of the funding of her trust.

[14] I reject this argument. Glithero J. did not specifically address the issue of Maddie as a dependant and he did not specifically speak to the legal and moral obligation of her mother to support her. However, it is plain from his reasons that neither was at issue before him, nor were they disputed.

[15] The issue on the application was whether the mother had adequately provided for Maddie through the bare Trust that she created to hold the insurance proceeds. If not, then s. 62(1) of the SLRA would direct the Court to consider “all of the circumstances of the application”, including that it was the Jeff, and not Maddie, who appeared to have personal financial difficulty. Moreover, Melanie’s designation of Maddie as the sole beneficiary of her life insurance policies plainly shows that Maddie’s mother did feel legal and moral obligations towards her.

[16] Importantly, Glithero J. did not have to consider Maddie’s claims in relation to any other competing claims as she was the sole beneficiary of the Estate and the Trust. Any provision for support for Maddie would be taken from her monies in the Trust. The creation of the Trust demonstrates that the mother did consider her moral and legal obligations to support Maddie.

[17] Glithero J.’s reasons suggest that the main reason for the denial of the claim was not that he was prioritizing the funding of the Trust for educational purposes (though he does discuss it as one of the concerns), but rather that the Appellant’s statement of income and expenses did not support a dependant relief claim.

[18] There was no error by Glithero J. in considering Maddie’s future education needs as part of his analysis. In the case of Cummings v. Cummings, above, the Court held that the inquiry to determine the amount and duration of support was not just a “needs-based analysis”. The SLRA specifically provides that if the dependant is a child, the child’s “aptitude for and reasonable prospective of obtaining an education”, as well as the size of the Trust, is to be considered. It is plain to me that the application judge did consider this in reaching his disposition of the matter.

ISSUE 2: Did the application judge err in law by considering irrelevant factors while failing to consider other relevant factors in his analysis of need of support under s. 58 of the SLRA?

[19] Section 62(1) of the SLRA provides as follows:

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 capacity to contribute to his or her own support;

(e) the dependant’s age and physical and mental health;

(f) the dependant’s needs, in determining which the court shall have regard to the dependant’s accustomed standard of living;

(g) the proximity and duration of the dependant's relationship with the deceased;

(h) – (k) [omitted];

(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) [omitted]

(r) [omitted]

(s) any other legal right of the dependant to support, other than out of public money.

[20] The Appellant argues that Glithero J. should have considered factors such as Maddie’s current assets and means, her standard of living, previous living/care arrangements prior to Melanie’s death, and the need to create a stable home environment as outlined in s. 62(1) of the SLRA, and that he should have made findings or requested submissions as to the income of the deceased prior to her death.

[21] Further, the Appellant claims that under the guidelines in s. 62(1), income should have been taken into account when determining the amount of support payable to Maddie or for her benefit. As well, they claim Glithero J.’s consideration of the amount of government benefits being received by the Appellant as a result of Melanie’s passing was contrary to s. 3(b) of the Federal Child Support Guidelines which stipulate that Child Benefit payments are irrelevant to determining the obligation on the Estate to provide support. Section 62(1)(s) of the SLRA also clearly excludes consideration of any government support. Finally, they contend that the application judge should have received and considered the Appellant’s full financial budget that they insist demonstrated a need for child support payments, rather than criticizing it.

[22] Starting with the last contention first, Glithero J. determined that the budget shortfall was not evidence of Maddie’s needs, but rather evidence of a spendthrift father. The Appellant attacks this as a credibility finding against Jeff without evidential foundation, but that is a mischaracterization. The application judge made no credibility findings, but simply decided the matter on the evidence of the Appellant that was before him.

[23] Maddie did not have a “demonstrable immediate need” before the application judge because the Appellant provided no supporting documentation with respect to her expenses. Indeed, it was plain to the application judge, that out of the $8,358.00 of proposed monthly living expenses as reflected in the Appellant’s budget, the “demonstrated child care expenses”, amounted to only approximately $1,100 monthly, about 15% of his claimed proposed monthly living expenses.

[24] The evidence of the Trustees did include the concern that the Appellant was conflating his own financial needs with those of Maddie, but I note that Glithero J. did not rely on the evidence of the Trustees in reaching his decision. He relied upon the evidence provided by the Appellant, which he found not only included expenses that were not properly attributable to Maddie, but also that there was a lack of supporting documentation for the “budgeted” amount claimed.

[25] Returning to the SLRA, it is evident from his reasons that Glithero J. considered the applicable provisions, including the factors for determining type and amount of support and he did not err in considering the government benefits received by the Appellant.

[26] The Appellants relied on Williams v. Williams, [1995] O.J. No. 4336 (Div. Ct.), for the proposition that the child benefit does not flow through the hands of the payor and is therefore irrelevant to determining support obligations, but correctly viewed, Williams stands for the proposition that a child’s benefit from the Canada Pension Plan should not be treated as a direct contribution by the parent to the support of his/her child. Thus it was an error in law to decide that the father in Williams was entitled to deduct the lump sum child’s benefit payment from his arrears of child support. However, the benefit must be taken into account when assessing the children’s needs, and will reduce them accordingly: Williams, above, at para. 6.

[27] In this case, however, it appears to me that Glithero J. took the benefit into account when assessing the child’s needs, and not necessarily deducting the child’s benefit from child support as the Appellant argues. Glithero J.’s noting of the benefit in his reasons does not indicate that the amount of the benefit should be deducted in the way Williams does.

[28] However, in McElligott Estate v. Damecour, (2005), 16 R.F.L. (6th) 257, the Court determined that the CPP survivorship benefit is to be considered and deducted from any amount of support under s. 62 of the SLRA. CPP Children’s Benefits are not received “out of public money” and should be considered in determining the appropriate amount of dependant relief. The Appellant’s assertion that he receives the CPP Child Benefit and that Maddie has no assets and income of her own is simply incorrect. The CPP Child Benefit in fact belongs to Maddie and is only held in trust by the Appellant as her custodial parent.

[29] In summary, the application judge did not err in law by considering irrelevant factors while failing to consider other relevant factors in his analysis of Maddie’s need of support under s. 58 of the SLRA.

ISSUE 3: Did the application judge fetter the broad discretion that is to be exercised by the Court by delegating the decision of the amount of support to the OCL?

[30] The Appellants argue that Glithero J. delegated decisions on the support that Maddie should receive to the OCL without statutory authority. They claim that only the Court has discretion to determine amounts of support under s. 58, and that there was no evidence before the Court that the OCL would consider the relevant factors of the SLRA or that it will conduct the kind of analysis described in Cummings in determining its recommendation. They argue the SLRA provides no authority to the OCL to make such a determination.

[31] I reject this argument because it is founded on a mistaken understanding of Glithero J.’s order. There has been no improper delegation of the Court’s discretion to the OCL. The Trustees have simply asked to make a payment into Court under s. 36 of the Trustee Act. That provision specifically permits Trustees to make a payment into Court at any time. One important reason that is an appropriate solution in this case is the strained and dysfunctional relationship of the parties, an aspect that Glithero J. considered, quite appropriately. Because of the difficulty of that relationship, the Trustees simply wish to be done with the Appellant, and not have to be involved in his future requests for support funds to be paid.

[32] It was the OCL that suggested to the Trustees that a payment into court might achieve a resolution of this issue since the Appellant could then apply for payment out of Court when required. It was quite proper for that suggestion to be made since s. 63(2)(h) of the SLRA provides that if a Court determines that an Order for support should be made, it can do so with “such conditions and restrictions as it considered appropriate” and that “all or any of the money payable under the order be paid to an appropriate person or agency for the benefit of the dependant” (My emphasis).

[33] As Glithero J. correctly noted, the monies paid into Court from the Trust would be managed in the Minor’s Fund Program, which would then permit the Appellant to apply for payments out of Court, monitored by the OCL in terms of frequency, amount, reasonableness, and adequacy of documentation. By doing so, the Court plainly struck a fair and nuanced balance between the Appellant’s deficient evidence, which would lead to an Order of no support, and the ability of the Appellant to seek payment out of Court with a review by the OCL. All the court did was substitute the holding of the funds in Court within the OCL Minor’s Fund for the Trustees continuing to hold the funds. There was no delegation and the result still contemplates recourse to the courts if there is no agreement or approval for an amount of support claimed by the father on Maddie’s behalf. The application judge committed no error in creating this structure to enable access to monies to be obtained on a supervised basis, and to avoid the need for repeat applications before the court. Glithero J. specifically recognized this in his handwritten addition to the typed order:

“This Court orders that Jeffery Brian Woodsworth is at liberty to make application to the Court, through the OCL Minor’s Fund Program, for support for the minor, Madeleine Liebling Bliedung.”

ISSUE 4: Did the application judge err by demonstrating bias or misapprehension of evidence by considering inadmissible hearsay and opinion evidence?

[34] The Appellant accuses Glithero J. of failing to review the Respondent’s evidence and excluding the evidence that was of minimal or low probative value but where the likelihood of bias was high. They argue the affidavits of the Trustees contained significant amounts of hearsay and opinion evidence and should not have been admissible in the absence of a voir dire. Moreover, they claim it is unclear to what extent he relied on inadmissible evidence for his decision since he provided “minimal oral reasons.”

[35] It is plain and accepted that an applications judge is under no obligation in his or her reasons to mention each and every piece of evidence and describe exactly what impact that evidence had in the conclusion he or she reached. Moreover, it is inaccurate to suggest that the applications judge provided only “minimal oral reasons.”

[36] What Glithero J. did do is consider and reject the arguments of the Appellant, as was within his discretion. Rejecting the arguments of a party, particularly when they are unsubstantiated, does not suggest, let alone establish, bias by the application judge. The affidavits of the Trustees contained their information and belief, as provided in the Rules. It is clear to me that Glithero J. did not rely on any “hearsay or opinion evidence” as there is no reference to any such evidence in his reasons. If he considered any of the statements in the Trustees’ affidavits, it was within his discretion to do so and to prefer the evidence of one party over another. The Appellant could have challenged the statements in the affidavits by cross-examining the Trustees if he chose to do so before or at the hearing. Further, the Appellant himself made numerous statements in his affidavits which were uncorroborated and contradicted by the Trustees.

[37] The Appellant’s allegation that the application judge misapprehended the evidence does not meet the legal test in Habib v. Mucaj, 2012 ONCA 880. To amount to a misapprehension of evidence, the alleged factual error must go “to the substance, rather than the detail, of the evidence” and critically important, must play “an essential part in the reasoning process” of the judge. There is no evidence on the face of this record that the application judge misapprehended the evidence; to the contrary, it is plain that he understood exactly what the situation was that confronted him. He reached a decision that provided for support for Maddie to be obtained out of the monies left by her late mother for her support, with a mechanism to permit access to be obtained to those monies on a supervised basis. He did this to ensure those funds would go to the support of her daughter, rather than to the lifestyle of the appellant father. There is no substance to these allegations about the applications judge, a very senior and well-respected jurist.

ISSUE 5: Did the application judge err in failing to exercise his discretion to order a trial of an issue when he made credibility findings without basis?

[38] The Appellant claims that the application judge erred in principle by failing to direct a trial of the issues when they had a bearing on the relief sought under the motion and application. The Appellant contends that Glithero J. did not canvas the conflicting stories of the parties or attempt to reconcile the facts outlined in the affidavits, but they also claim he preferred the Trustees’ affidavit evidence over that of the Appellant, and in doing so implicitly made credibility findings against the Appellant absent cross-examination and other methods to test credibility.

[39] Respectfully, this is simply not borne out on an examination of the record and in my view, the application judge was not in error when he did not order a trial of an issue. First of all, the Appellant did not at any time seek an Order for Directions for the trial of the issue or a hearing with viva voce evidence. Glithero J. did not make any finding of credibility against the Appellant, or in favour of the Trustees. Rather, he considered the evidence and made findings based on the evidence that was before him. However, even if he had, it was entirely within his discretion to make a finding of credibility when asked to determine issues based on the written record: see Zettle v. Henderson, 2008 ONCJ 203.

[40] For this ground of appeal to succeed, it would mean that every application or motion judge who is asked to determine an issue based on a written record with facts in dispute is prima facie unable to do so. It would mean that every application or motion judge must then redirect the matter to a hearing or motion with viva voce evidence, even where the parties are not requesting that relief. This is an unsustainable position and I reject it.

ISSUE 6: Did the application judge err in allowing the Respondent Trustees to pay their costs out of the funds held in trust?

[41] Finally, the Appellant argues that Glithero J.’s invitation to the Respondent Trustees to reimburse themselves of their costs is reviewable in light of his Order that no costs should be payable. This, as well, is a submission without foundation.

[42] Since there was no Order made as to costs, the Appellant cannot appeal it and has not sought leave to appeal. There is no basis upon which to now attempt to appeal the “no costs award” and assert that the Trustees ought to personally pay the costs of the application.

[43] Further, the decision was completely within the bounds of the application judge’s discretion. It has long been established at common law and through s. 23.1 of the Trustee Act that trustees and estate trustees have a right of indemnification for legal costs reasonably incurred in the course of their duties. The costs principles applicable in any civil matter (the “loser pays” principle) would direct that the Trustees, who were successful in opposing the Appellant’s application, could choose to seek costs against him, but the Appellant has no basis to seek costs against the Trustees, or to seek that their pay their own costs personally.

Conclusion AND COSTS

[44] For the preceding reasons, the appeal is dismissed.

[45] We received submissions from both parties on costs. The parties agreed that the Appellant would claim $6,000 if he is successful, and the Respondent Trustees would claim $8,000 if they are successful. What they do not agree on is who should pay those costs.

[46] The Appellant contended the costs should be payable out of the Estate/Trust regardless of which party succeeds on the appeal. He claims that Maddie’s late mother failed to make provision for her support as a minor, and that is what precipitated these proceedings, both before the application judge and before us. In his submission the mother’s provision of support through a bare trust precipitated these proceedings, because she effectively put a plan in place that did not work.

[47] The Respondent Trustees have a different perspective. On this appeal, they seek their costs personally against the Appellant, Jeffery Woodsworth. They reject that these hearings were the fault of the mother. No claim of support was made while she was alive, but the Appellant’s claim for costs presupposes that support payments should actually have been made periodically, regardless of the lump sum amounts bequeathed to the daughter by the creation of the bare trusts that held the insurance proceeds.

[48] First, I note that the Trustees did not seek costs compensation against the Appellant after the application before Glithero J. notwithstanding that it was their right to claim their costs as the successful party. They probably hoped this appeal would not result. They were resistant to this appeal being brought, and they argue forcefully that Maddie’s corpus of funds should not be reduced by now having to bear the costs of this appeal.

[49] I agree. The costs of this proceeding were entirely motivated by the father’s insistence to receive compensation for his costs and claimed expenses, whether they arose relative to Maddie or not. In those circumstances, I agree with the Respondent Trustees that the Estate/Trust ought to be preserved to pay for Maddie’s support as it is needed and, having heard the submissions of counsel, that the Appellant shall personally pay the Respondents costs of $8,000, payable within thirty days.

M. G. Quigley J.

I agree _______________________________

N. Spies J.

I agree _______________________________

M. G. Ellies J.

Date of Release: October 19, 2017