Madore-Ogilvie (Litigation Guardian of) v. Ogilvie Estate

Malachi Madore-Ogilvie, by his Litigation Guardian, Stephanie Madore, et al. v. Mary Kulwartian (also known as Mary Ogilvie) in her capacity as Estate Trustee for the Estate of Lloyd Ogilvie, deceased [Indexed as: Madore-Ogilvie (Litigation Guardian of) v. Ogilvie Estate]

88 O.R. (3d) 481

Court of Appeal for Ontario,

Cronk, Gillese and Armstrong JJ.A.

January 21, 2008

Wills and estates -- Dependants' relief -- Deceased and his wife jointly owning life insurance policy -- Jointly-owned policy not falling within s. 72(1)(f) of Succession Law Reform Act and not forming part of deceased's estate for purpose of dependants' relief under that Act -- Succession Law Reform Act, R.S.O. 1990, c. S.26, s. 72(1)(f).

The deceased was the sole owner of one life insurance policy ("Policy A") and the joint owner, with his wife M, of a second policy ("Policy B"). Policy B provided that on the death of one, the other was entitled to a lump sum payment. The deceased made inadequate provision for his dependants. Two of his sons made claims against his estate. M brought a cross- application for an order directing the insurance company to pay the proceeds of both policies to her. The parties agreed that Policy A could be charged for dependants' relief under the Succession Law Reform Act ("SLRA"), but M maintained that the circumstances did not warrant such relief. The application judge found that Policy B was caught by s. 72(1)(f) of the SLRA and could be deemed to be part of the deceased's estate for the purpose of dependants' relief. He ordered that the net proceeds of the two policies be divided into equal shares for the support of the deceased's minor children. The Divisional Court allowed M's appeal in part and excluded Policy B from the deceased's estate. The sons appealed, and M cross-appealed.

Held, the appeal and cross-appeal should be dismissed.

Policy B was not caught by s. 72(1)(f) of the SLRA. That policy was not "owned" by the deceased; it was jointly owned by him and M. Further, s. 72(1)(f) refers to a policy "effected on the life of the deceased", whereas Policy B was effected on the lives of both co-owners. M did not become entitled to the proceeds of Policy B because she was named as beneficiary of that policy. Her entitlement flowed from her status as an owner of Policy B. At the instant of the deceased's death, her joint ownership interest swelled to become an absolute entitlement to the proceeds of Policy B. To interpret s. 72(1)(f) so as to capture the proceeds of Policy B would be to give the court the authority to take property belonging to M, a third party who had no obligation to provide support for the deceased's dependants. It is presumed that the legislature does not intend to interfere with the property rights of citizens unless the statute clearly so provides. The wording of s. 72(1)(f) does not meet the requisite level of clarity.

The application judge did not err in charging the proceeds of Policy A for support of the dependant children. It was not established that the children were entitled to Canada Pension Plan benefits until age 18. Even if they were so entitled, the fact that the pension would exceed the child support that the deceased would have been obliged to pay was not, in itself, a basis on which to interfere with the exercise of the application judge's discretion. The application judge was not limited to ordering relief at a level consistent with the deceased's legal obligations. [page482]

APPEAL AND CROSS-APPEAL from the order of the Divisional Court (Cunningham A.C.J.S.C., McCartney and Whitten JJ. (Cunningham A.C.J.S.C. dissenting)), [2006] O.J. No. 4654, 30 E.T.R. (3d) 84, allowing in part an appeal from a decision allowing dependants' relief application.

Cases referred to MacNab (Re), 1995 19506 (ON CJ), [1995] O.J. No. 2581, 30 C.C.L.I. (2d) 252 (C.J.); Tataryn v. Tataryn Estate, 1994 51 (SCC), [1994] 2 S.C.R. 807, [1994] S.C.J. No. 65, 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), consd Moores v. Hughes (1981), 1981 1870 (ON SC), 37 O.R. (2d) 785, [1981] O.J. No. 3232, 136 D.L.R. (3d) 516 (H.C.J.), distd Other cases referred to Caughell (Litigation guardian of) v. Caughell Estate (Trustee of), [2000] O.J. No. 3118, [2000] O.T.C. 636, 35 E.T.R. (2d) 1 (S.C.J.); Cummings v. Cummings (2004), 2004 9339 (ON CA), 69 O.R. (3d) 398, [2004] O.J. No. 90 (C.A.); Goodis (Litigation guardian of) v. Goodis Estate, 2003 35281 (ON SCDC), [2003] O.J. No. 3564, 175 O.A.C. 271, 125 A.C.W.S. (3d) 365 (Div. Ct.), revg [2002] O.J. No. 4841, [2002] O.T.C. 971 (S.C.J.); Modopoulos v. Breen Estate, [1996] O.J. No. 2738, 15 E.T.R. (2d) 128 (Gen. Div.); Wynne v. Dalby, 1913 578 (ON CA), [1913] O.J. No. 9, 30 O.L.R. 67 (S.C. (A.D.)) Statutes referred to Insurance Act, R.S.O. 1990, c. I.8, ss. 196 [as am.], 199 Succession Law Reform Act, R.S.O. 1990, c. S.26, ss. 58, 62 [as am.], 72(1) [as am.], (2), 79(1) Authorities referred to Sullivan, Ruth, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham, Ont.: Butterworths, 2002)

Todd K. Plant, for the appellant, respondent by way of cross- appeal, Malachi Madore-Ogilvie, by his litigation guardian, Stephanie Madore. Sandra di Ciano and Andrew Sader, for the appellant, respondent by way of cross-appeal, Ackil Ogilvie, by his litigation guardian, the Children's Lawyer. Bruce F. Simpson, for the respondent, appellant by way of cross-appeal, Mary Kulwartian (also known as Mary Ogilvie) in her capacity as estate trustee.

The judgment of the court was delivered by

[1] GILLESE J.A.: -- A deceased and his spouse jointly owned a life insurance policy. The policy provides that on the death of one, the other is entitled to a lump sum payment of $109,000. The deceased made inadequate provision for his dependants. Can the lump sum be used to provide support for his dependants [page483] pursuant to the provisions of the Succession Law Reform Act? This appeal addresses that question.

Background

[2] Lloyd Ogilvie died on March 24, 2005. He was survived by six children, three of whom are minors: Malachi Madore-Ogilvie, Ackil Ogilvie and Novlette Ogilvie. The three minors and the deceased's widow, Mary Kulwartian, (also known as Mary Ogilvie and so referred to as), qualify as the deceased's dependants under the Succession Law Reform Act, R.S.O. 1990, c. S.26 ("SLRA").

[3] Malachi was just over two years of age at the time this matter was initially heard. He lives in Ottawa with his mother, Stephanie Madore, and his mother's two other dependant children. Ms. Madore's evidence is that she has been unemployed since August 2003, and has no means of ensuring support for Malachi. Her income is limited to social assistance and baby bonus. Her monthly expenses are $3,500, of which she attributes $1,480 to Malachi.

[4] Ackil was 12 years of age at the time of the initial applications. He was born in Jamaica and lives there with his single mother, Denise Chambers, whose annual income of approximately $2,000 comes from braiding people's hair, work which she performs from her home. Ms. Chambers estimates that her monthly expenses, including those attributable to Ackil, are $600 Canadian. She would like to be able to send Ackil to a private school but is unable to pay the annual fees of $1,020 Canadian.

[5] Novlette was 13 at the time of the applications. She lives with her mother, Mary Ogilvie, in the matrimonial home. By virtue of the right of survivorship, Mary Ogilvie owns the matrimonial home; however, the mortgages on the home are approximately equal to its value.

[6] At the time the applications were heard, Mary Ogilvie was employed as a legal secretary, earning approximately $33,000 per year. As well, she receives Canada Pension Plan benefits of $195 per month for Novlette. These benefits arise because Novlette is the deceased's daughter. Mary Ogilvie hopes to take in foreign students as boarders to generate additional income.

[7] Before becoming too ill to work, the deceased had been employed as a cleaner at the Ottawa airport. He earned $18,232.50 per year. After leaving his employment due to illness, his only income was a disability payment from the Canada Pension Plan which included the $195 monthly payment for Novlette.

[8] In his will, Lloyd Ogilvie left his estate to his wife, Mary Ogilvie, but if she predeceased him or survived him for 30 days or [page484] less, his estate was to go to Novlette. He made little provision for Malachi or Ackil while he was alive. He made no provision for them on his death.

[9] When Lloyd Ogilvie died, Malachi brought an application under the SLRA, claiming dependant's relief from the deceased's estate. Ackil brought a cross-application against the estate in which he, too, claimed relief as a dependant. Mary Ogilvie also brought a cross-application, on which more is said later. (The application and two cross-applications are collectively referred to as the "applications".)

[10] The deceased left no estate. [See Note 1 below] However, proceeds from two life insurance policies were potentially available to provide support for his dependants. The first policy, of which the deceased was the sole owner, had a value of $60,711. Mary Ogilvie was the named beneficiary of the first policy. The parties agreed that the first policy could be deemed part of the deceased's estate for the purpose of dependants' relief under the SLRA. However, as discussed more fully below, Mary Ogilvie disputed the claim that Malachi and Ackil had not been adequately provided for.

[11] The second policy, valued at $109,000, was jointly owned by the deceased and Mary Ogilvie (the "second policy" or the "jointly-owned policy"). It was a "joint flex term" policy, payable to the survivor on the death of the joint owner. It had been taken out to secure payment of the first mortgage on the jointly owned matrimonial home. The unrefuted evidence was that Mary Ogilvie made the majority, if not all, of the payments on the second policy.

[12] By means of her cross-application, Mary Ogilvie sought an order directing the insurance company to pay to her the proceeds of both policies. She acknowledged that the first policy could be charged for dependant's relief but maintained that the circumstances did not warrant such relief. She asserted that each of the minor children was entitled to receive a pension from the Canada Pension Plan of $195 per month until age 18. [See Note 2 below] This, she argued, amounted to adequate support, in the circumstances. As well, she claimed entitlement to the proceeds of the second policy, arguing [page485] that it could not be deemed to be part of the deceased's estate for the purpose of dependant's relief.

[13] The parties agreed that the minor children and Mary Ogilvie were all dependants of the deceased.

[14] The applications judge held that the second policy was caught by s. 72(1)(f) of the SLRA. He reasoned as follows. The SLRA is remedial legislation enacted to enable the court to provide support for a person's dependants for whom inadequate provision has been made. The deceased was a joint owner of the second policy and had all the incidents of ownership. The only basis for finding that the second policy did not come within s. 72(1)(f) would be to read in the requirement that the policy be "solely" owned by the deceased. Given the purpose of the SLRA, in his view, such an interpretation would not be correct.

[15] Accordingly, the applications judge deemed the second policy to be part of the estate for the purpose of funding a dependants' support order. He ordered that the net proceeds [See Note 3 below] of the two policies be divided into three equal shares for the support of the three minor children only. Each share was to be used to purchase an annuity which would provide monthly income to each minor dependant until he or she reached the age of 18.

[16] Mary Ogilvie appealed to the Divisional Court.

[17] By order dated November 21, 2006, a majority of the Divisional Court (McCartney and Whitten JJ.) allowed the appeal in part (the "Order") and excluded the second policy from the deceased's estate. Based largely on s. 199(1) of the Insurance Act, R.S.O. 1990, c. I.8, the majority reasoned that jointly held insurance policies do not form part of the estate of a deceased for the purpose of dependant support under the SLRA. Associate Chief Justice Cunningham dissented. He held that the applications judge was correct in concluding that, pursuant to s. 72(1)(f) of the SLRA, the deceased owned the second policy and that the SLRA provisions prevailed over s. 199(1) of the Insurance Act.

[18] The Divisional Court refused to disturb the balance of the judgment of the applications judge. In para. 15 of the majority reasons, it was said to have been agreed that exclusion of the second policy from the deceased's estate would "eclipse" any further claim by Mary Ogilvie to the estate. And, in para. 1 of the majority reasons, it was stated that exclusion of the second policy meant any failure by the applications judge to address Mary Ogilvie's dependancy, for the purpose of the support order, [page486] became academic. By these statements, I understand the Divisional Court to mean that if the second policy is not part of the deceased's estate, then Mary Ogilvie's claim would fail because her resulting financial means (her income and the proceeds of the second policy of $109,000), would be much greater than those of the other dependants.

[19] Malachi and Ackil (the "appellants") appeal. They ask that the judgment of the applications judge in relation to the second policy be restored with the result that it would be deemed part of the deceased's estate and available for a support order.

[20] Mary Ogilvie cross-appeals. In the cross-appeal, she argues that the circumstances do not warrant the making of a dependants' support order.

[21] For the reasons that follow, I would dismiss both the appeal and the cross-appeal. Reference is made throughout these reasons to ss. 58, 62 and 72(1) and (2) of the SLRA. For ease of reference, those sections are set out in full in the Schedule to these reasons.

The Issues

[22] The appeal raises the following issue: can the jointly- owned policy be deemed to be part of the estate of Lloyd Ogilvie for the purpose of a dependant support order under the SLRA?

[23] The issue raised on the cross-appeal is whether the applications judge's support order, as affirmed by the Divisional Court, ought to be disturbed.

Analysis

[24] It will be recalled that the applications judge held that the second policy was owned by the deceased for the purpose of s. 72(1)(f) of the SLRA but that a majority of the Divisional Court took a contrary view. The Divisional Court reversed the applications judge on that matter, largely on the basis of s. 199 of the Insurance Act. Like the Divisional Court, I am of the view that the applications judge erred in concluding that the second policy could be deemed to be part of the deceased's estate. However, as I explain below, my conclusion is based on s. 72(1)(f) of the SLRA alone; I do not see s. 199 of the Insurance Act as having any application to the jointly-owned policy.

[Section 72(1)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-s26/latest/rso-1990-c-s26.html)(f) of the [SLRA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-s26/latest/rso-1990-c-s26.html)

[25] Section 72(1)(f) of the SLRA reads as follows:

72(1) Subject to section 71, for the purpose of this Part, the capital value of the following transactions effected by a deceased before his or her death, [page487] whether benefitting his or her dependant or any other person, shall be included as testamentary dispositions as of the date of the death of the deceased and shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her estate, and being available to be charged for payment by an order under clause 63(2)(f), . . .

(f) any amount payable under a policy of insurance effected on the life of the deceased and owned by him or her;

(Emphasis added)

[26] The heart of this appeal lies in the wording of s. 72(1) (f) and, most particularly, the meaning to be given to the word "owned" therein.

[27] The word "owned" is not defined in the SLRA. I accept that it is an elastic term and that the meaning to be given to it depends on the purposes to be served by s. 72(1). (See Goodis (Litigation guardian of) v. Goodis Estate, [2002] O.J. No. 4841, [2002] O.T.C. 971 (S.C.J.), at paras. 25-28, relying on Wynne v. Dalby, 1913 578 (ON CA), [1913] O.J. No. 9, 30 O.L.R. 67 (S.C. (A.D.)); revd on appeal but not on the meaning of "owned", 2003 35281 (ON SCDC), [2003] O.J. No. 3564, 175 O.A.C. 271 (Div. Ct.).) However, in my view, on a proper interpretation of s. 72(1)(f), the jointly-owned policy is not caught.

[28] In reaching this conclusion, I begin by noting that, on a plain reading of s. 72(1)(f), it does not apply to the second policy. That policy was not owned by the deceased; it was jointly owned by him and Mary Ogilvie. Further, s. 72(1)(f) refers to a policy "effected on the life of the deceased" whereas the jointly-owned policy was effected on the lives of both co-owners.

[29] Next, it is important to keep in mind that Mary Ogilvie did not become entitled to the proceeds of the second policy because she was named as beneficiary of that policy. Her entitlement flows from her status as an owner of the second policy. At the instant of Lloyd Ogilvie's death, her joint ownership interest swelled to become an absolute entitlement to the proceeds of the second policy. To interpret s. 72(1)(f) so as to capture the proceeds of the second policy would be to give the court the authority to take property belonging to Mary Ogilvie, a third party who has no obligation to provide support for the deceased's dependants. As was said in Modopoulos v. Breen Estate, [1996] O.J. No. 2738, 15 E.T.R. (2d) 128 (Gen. Div.), at para. 25, the court cannot "reach into the hands of a third party" in order to make provision for someone else's dependants.

[30] To make the proceeds of the second policy available for the support of dependants to whom Mary Ogilvie owed no duty is tantamount to expropriation. It is presumed that the legislature does not intend to interfere with the property rights of citizens [page488] unless the statute clearly so provides. (See Ruth Sullivan, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham, Ont.: Butterworths, 2002) at 399-403.) The wording of s. 72(1)(f) does not meet the requisite level of clarity. This is particularly evident when s. 72(1)(f) is contrasted with ss. 72(1)(c) and (d).

[31] Sections 72(1)(c) and (d) read as follows:

(c) money deposited, together with interest thereon, in an account in the name of the deceased and another person or persons and payable on death under the terms of the deposit or by operation of law to the survivor or survivors of those persons with any bank, savings office, credit union or trust corporation, and remaining on deposit at the date of the death of the deceased;

(d) any disposition of property made by a deceased whereby property is held at the date of his or her death by the deceased and another as joint tenants;

[32] A consideration of ss. 72(1)(c) and (d) assists in two ways. First, those provisions demonstrate that when the legislature wished to capture jointly owned property -- whether a bank account (s. 79(1)(c)) or real property (s. 79(1)(d)) [See Note 4 below] -- it used express language to accomplish that goal. In s. 72(1) (f), there is no reference to an insurance policy "in the name of the deceased and another", as in s. 79(1)(c), nor to an insurance policy that is "held by the deceased and another", as in s. 79(1)(d). Instead, s. 79(1)(f) speaks only of a policy of insurance "owned" by the deceased.

[33] Second, their location in the same subsection of the SLRA is significant. Had the legislature intended to capture jointly owned insurance policies, it would have been a simple matter to have included language in s. 72(1)(f) similar to that in ss. 72(1)(c) or (d).

[34] Moreover, an interpretation of s. 72(1)(f) that would encompass the jointly-owned policy is not consistent with the overall scheme of s. 72, which is to capture property owned by the deceased. When the legislature intended to "trap" jointly owned property for the purpose of dependant relief, it did so expressly [page489] (as explained above) and, by means of s. 72(2), with due regard for the interest of the co-owner.

[35] Section 72(2) reads as follows:

72(2) The capital value of the transactions referred to in clauses (1)(b), (c) and (d) shall be deemed to be included in the net estate of the deceased to the extent that the funds on deposit were the property of the deceased immediately before the deposit or the consideration for the property held as joint tenants was furnished by the deceased.

[36] It can be seen that s. 72(2) is the statutorily prescribed mechanism for protecting the interest of the co- owner of property. It ensures that only the deceased's funds, or the consideration furnished by the deceased for the property held in joint tenancy, is deemed to be part of the deceased's estate for the purpose of dependant relief orders.

[37] By its terms, s. 72(2) does not apply to s. 72(1)(f). It would be strange indeed if the legislation took pains to protect the rights of a joint owner in bank accounts (s. 72(1) (c)) and in real property (s. 72(1)(d)), but did nothing to protect the rights of a joint owner of an insurance policy, had it intended to catch the latter. It would have been a simple matter to have expanded the list in s. 72(2) to refer to clause (f), as well as clauses (1)(b), (c) and (d).

[38] My view that s. 72(1)(f) does not extend to capture jointly owned insurance policies is reinforced by reference to the overall intent of s. 72 of the SLRA. In Moores v. Hughes (1981), 1981 1870 (ON SC), 37 O.R. (2d) 785, [1981] O.J. No. 3232 (H.C.J.), at p. 789 O.R., Robins J. (as he then was) described that intent in these terms at para. 16:

Manifestly, [s. 72] was intended to ensure that the maintenance of a dependant is not jeopardised by arrangements made, intentionally or otherwise, by a person obligated to provide support in the eventuality of his death. It is designed to alleviate the hardship that can be visited on a dependant by causing money or property to pass directly to a beneficiary (donee or joint tenant) and not as part of the estate.

[39] The second policy was not an arrangement that was made to jeopardise the maintenance of the deceased's dependants. Given the financial circumstances of the deceased and Mary Ogilvie, the second policy was a reasonable and sensible measure to ensure that the survivor of the two had the capacity to pay the first mortgage on the matrimonial home.

[40] Nor did the second policy have the effect of jeopardising the deceased's dependants. It did not make monies unavailable to the dependants that would otherwise have been available to them -- recall that Mary Ogilvie paid most, if not all, of the costs of the second policy. Had the second policy not existed, there would have been no additional assets available for his [page490] dependants. In fact, it can be argued that the second policy was beneficial from the perspective of the dependants as, had Mary Ogilvie died first, the proceeds of the second policy would have given the deceased greater means with which to provide for his dependants.

[41] Further, the concern expressed in the above-quoted passage from Moores relates to hardship visited on a deceased's dependants "by causing money or property to pass directly to a beneficiary". As has been noted, the insurance proceeds go to Mary Ogilvie by virtue of her ownership rights in the policy, not as a beneficiary.

[42] Finally, the facts of the present case are meaningfully different from those in Moores. In Moores, the question was whether the deceased "owned" a group insurance policy within the meaning of s. 72(1)(f). Although the policy was not strictly owned by the deceased, in the sense that it was issued to or held by him, the court concluded that s. 72(1)(f) applied because the policy covered the deceased, it was on his life, payment for the policy had been made on his behalf by the company, and the deceased could name the beneficiary. Contrast that with the present case where the policy was on the lives of both the deceased and Mary Ogilvie, payment for the policy had been made primarily, if not completely by Mary Ogilvie, and the policy was structured so that the beneficiary was the survivor of the two insureds.

[43] For these reasons, in my view, the second policy is not caught by s. 72(1)(f) of the SLRA.

[Section 199](https://www.canlii.org/en/on/laws/stat/rso-1990-c-i8/latest/rso-1990-c-i8.html) of the [Insurance Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-i8/latest/rso-1990-c-i8.html)

[44] As I have concluded that the jointly-owned policy is not caught by s. 72(1)(f) of the SLRA, there is no need to go further and determine whether s. 199 of the Insurance Act operates to exclude the second policy from being deemed to be part of the deceased's estate for the purpose of dependants' relief. Nonetheless, I will briefly explain why, in my view, s. 199(1) of the Insurance Act does not apply to the jointly-owned policy.

[45] Section 199(1) is set out in full in the Schedule to these reasons. The relevant part of s. 199(1) reads as follows:

Transfer of ownership

199(1) Despite the Succession Law Reform Act, where in a contract or in an agreement in writing between an insurer and an insured it is provided that a person named in the contract or in the agreement has, upon the death of the insured, the rights and interests of the insured in the contract,

(a) the rights and interests of the insured in the contract do not, upon the death of the insured, form part of his or her estate; and [page491]

(b) upon the death of the insured, the person named in the contract or in the agreement has the rights and interests given to the insured by the contract and by this Part and shall be deemed to be the insured.

[46] On a plain reading of s. 199, it is directed at the "rights and interests of the insured in the contract" and operates in the following fashion. One person owns a policy (the "insured") which provides that, on the death of the insured, a named person is to have the insured's rights and interests in the policy. When the insured dies, the named person (not the insured's estate) has the rights and interests of the insured. One right of an insured in an insurance policy is the right to name the beneficiary of the policy.

[47] The case of Re MacNab, 1995 19506 (ON CJ), [1995] O.J. No. 2581, 30 C.C.L.I. (2d) 252 (C.J.) provides an example of how s. 199 operates. In MacNab, a motion was brought to determine entitlement to the proceeds of a life insurance policy. Mr. MacNab bought an annuity and named his wife as beneficiary. The policy guaranteed payments for 16 years to him and, on his death, to his wife, Ms. MacNab. After he died, Ms. MacNab executed an appointment of beneficiary which directed, on her death, that the proceeds under the policy were to go to her niece and sister-in-law. Under the terms of Ms. MacNab's will, bequests were made to certain charities. When Ms. MacNab died, her niece and sister-in-law claimed the proceeds of the annuity. The Public Trustee argued that the appointment was invalid and that the proceeds of the annuity ought to go to the named charities.

[48] Based on s. 199(1)(b), the court held that Ms. MacNab had the rights and interests that Mr. MacNab had in the insurance policy, including the right to name new beneficiaries. Thus, her inter vivos designation of beneficiaries was operative, with the result that the insurance proceeds did not form part of her estate. Instead, they were paid to Ms. MacNab's niece and sister-in-law.

[49] It is important to note that s. 199 does not purport to deal with the proceeds of an insurance policy. The Insurance Act treats rights in an insurance policy differently from the right to receive the proceeds of an insurance policy. A review of s. 196 of the Insurance Act, by way of contrast to s. 199, illustrates this difference in treatment. Section 196 reads as follows:

196(1) Where a beneficiary is designated, the insurance money, from the time of the happening of the event upon which the insurance money becomes payable, is not part of the estate of the insured and is not subject to the claims of the creditors of the insured.

(2) While a designation in favour of a spouse, child, grandchild or parent of a person whose life is insured, or any of them, is in effect, the rights and [page492] interests of the insured in the insurance money and in the contract are exempt from execution or seizure.

[50] It can be seen that whereas s. 199 addresses the rights of the insured in the insurance contract, s. 196 is directed primarily at the money payable under an insurance policy. And, in s. 196(2), the rights and interests of the insured in the contract are mentioned separately from the rights and interests of the insured to the insurance money.

[51] On the foregoing interpretation of s. 199, it is apparent that it does not apply to the jointly-owned policy. It goes without saying that it is the right to the money payable under the jointly-owned policy that is in issue in these proceedings, rather than any other rights in that policy. Mary Ogilvie was not a person "named in the contract" -- she and the deceased were the insureds and owners. Mary Ogilvie's right to the proceeds of the second policy flow from her ownership of the policy, albeit joint ownership. On the death of Lloyd Ogilvie, by the terms of the contract, Mary Ogilvie is solely entitled to the proceeds of the policy -- not to rights in the contract.

[52] Much of the argument on s. 199(1) was focused on the meaning to be attributed to the introductory words in that section -- "Despite the Succession Law Reform Act". In my view, that question is more properly addressed in the context of a situation where s. 199 has been found to apply to a policy of insurance.

The Cross-Appeal

[53] Mary Ogilvie concedes that the first policy, which was owned solely by the deceased, was properly deemed to form part of the deceased's estate pursuant to s. 72(1)(f) of the SLRA. However, in the cross-appeal, she argues that the applications judge erred in charging the proceeds of the first policy for support for the dependant children and that the Divisional Court failed to correct that error. The essence of her argument is that it was unreasonable to make the support order because, had the deceased remained healthy and working, he would have been legally obliged to pay child support of $159 per month for each of the two appellants, a lesser sum than $195 per month, which is the amount that Mary Ogilvie maintains the appellants are entitled to receive from the Canada Pension Plan.

[54] I see no basis on which to interfere with the applications judge's exercise of discretion in ordering support for the three dependant children. The first policy falls squarely within s. 72(1)(f) of the SLRA and is, therefore, available for the purpose of an order for dependant support. As the applications judge noted, the [page493] parties agreed that Mary Ogilvie and each of the three minor children are dependants of the deceased and that the deceased had failed to make adequate provision for the proper support of the three minor dependants. The applications judge also considered the circumstances of each of the dependants as required by s. 62(1) of the SLRA. [See Note 5 below] Thus, it can be seen that the applications judge properly followed the scheme of the SLRA. He made the necessary determinations and, pursuant to the power conveyed on him by s. 58(1), [See Note 6 below] after due consideration of the deceased's estate and the circumstances of each dependant, exercised his discretion and made provision for the minor dependants by dividing the estate assets among them.

[55] While it would have been preferable had the applications judge expressly addressed the cross-appellant's submission that the appellants would be adequately provided for by means of the Canada Pension Plan benefits, that oversight does not amount to an error warranting this court's intervention for two reasons. First, it is far from clear that the appellants are entitled to receive benefits under the Canada Pension Plan in the same way that Novlette does. The sole support for this proposition is the statement in Mary Ogilvie's affidavit that she believes that Malachi could make such a claim to the Canada Pension Plan. There was no evidence -- or even suggestion -- that Ackil, a citizen and resident of Jamaica, is entitled to claim or receive such benefits.

[56] Second, even if the appellants were entitled to receive Canada Pension Plan benefits in the amount of $195 per month, the fact that this amount exceeds the child support that the deceased would have been obliged to pay is not, in itself, a basis on which to interfere with the exercise of the applications judge's discretion in the quantum of support ordered for the minor dependants. The jurisprudence makes it clear that the applications judge was not limited to providing relief at a level consistent with the deceased's legal obligations. In Tataryn v. Tataryn Estate, 1994 51 (SCC), [1994] 2 S.C.R. 807, [1994] S.C.J. No. 65, the Supreme Court of Canada held that the court has a broad discretion in making such orders and that the quantum of dependant support is not limited to an amount which meets a deceased's legal responsibilities during his lifetime; in determining what is adequate and just, the testator's moral duties are to be considered as well.

[57] This court recently considered the operation of s. 62(1) of the SLRA and reviewed the Tataryn decision. Although the [page494] Tataryn case is based on British Columbia legislation, this court affirmed that moral considerations, as well as the needs and means of the dependants, continue to be relevant in the exercise of discretion under s. 62(1). See Cummings v. Cummings (2004), 2004 9339 (ON CA), 69 O.R. (3d) 398, [2004] O.J. No. 90 (C.A.). Thus, the applications judge was not obliged to set dependant support based on the amount that the deceased would have been obliged to pay by way of child support. In fact, limiting his discretion by considering only the deceased's child support obligations would have been a breach of his obligation under s. 62(1) of the SLRA to consider the broad range of enumerated factors when determining the amount and duration of support. Given the applications judge's findings on the dependants' respective financial circumstances, he was amply justified in making the order that he did.

[58] It seems to me that the cross-appeal is brought, at least in part, because the applications judge did not expressly say why he chose to allocate all of the estate assets for the support of the minor dependant children and none for the support of Mary Ogilvie. While not stated explicitly, a full reading of the reasons shows that the applications judge made no order of support in favour of Mary Ogilvie -- despite the fact that she, too, was a dependant -- because she had other sources of income available for her support which were far in excess of those available to the other dependants. [See Note 7 below] Even the most cursory reading of s. 62(1) makes it clear that such a determination justifies a support order that excludes her. While it is unfortunate that there are insufficient assets to adequately provide for any of the dependants, in the circumstances of this case, it does not amount to an error in the exercise of the applications judge's discretion to use the limited assets for the benefit only of the minor dependants.

[59] Finally, and in any event, as I would exclude the second policy from the deceased's estate with the result that the proceeds of the second policy go to Mary Ogilvie, like the Divisional Court, it appears to me that the issue raised on the cross-appeal becomes academic.

Disposition

[60] Accordingly, I would dismiss the appeal and cross- appeal. The Children's Lawyer did not seek costs and I would make no order of costs against it. In respect of the other parties, in the circumstances, I am of the view that each party should bear its own [page495] costs. My view is based on the results of the appeal and cross-appeal, the public interest in having this novel point of law resolved and the financial circumstances of the parties. Accordingly, I would make no order as to costs.

Appeal and cross-appeal dismissed.

SCHEDULE OF STATUTES

Succession Law Reform Act, R.S.O. 1990, c. S.26, as amended, ss. 58, 62, 72(1) and (2).

Order for support

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.

Applicants

(2) An application for an order for the support of a dependant may be made by the dependant or the dependant's parent.

Same

(3) An application for an order for the support of a dependant may also be made by one of the following agencies,

(a) the Ministry of Community and Social Services in the name of the Minister;

(b) a municipality, excluding a lower-tier municipality in a regional municipality;

(c) a district social services administration board under the District Social Services Administration Boards Act;

(d) a band approved under section 15 of the General Welfare Assistance Act; or,

(e) a delivery agent under the Ontario Works Act, 1997,

if the agency is providing or has provided a benefit under the Family Benefits Act, assistance under the General Welfare Assistance Act or the Ontario Works Act, 1997 or income support under the Ontario Disability Support Program Act, 1997 in respect of the dependant's support, or if an application for such a benefit, assistance or income support has been made to the agency by or on behalf of the dependant.

Idem

(4) The adequacy of provision for support under subsection (1) shall be determined as of the date of the hearing of the application.

. . . . . [page496]

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;

(r) if the dependant is a spouse,

(i) a course of conduct by the spouse 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 cohabited, [page497]

(iii) the effect on the spouse's earning capacity of the responsibilities assumed during cohabitation,

(iv) whether the spouse 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 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) 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) Repealed:

(vii) the effect on the spouse's earnings and career development of the responsibility of caring for a child,

(viii) the desirability of the spouse 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.

Evidence

(2) In addition to the evidence presented by the parties, the court may direct other evidence to be given as the court considers necessary or proper.

Idem

(3) The court may accept such evidence as it considers proper of the deceased's reasons, so far as ascertainable, for making the dispositions in his or her will, or for not making adequate provision for a dependant, as the case may be, including any statement in writing signed by the deceased.

Idem

(4) In estimating the weight to be given to a statement referred to in subsection (3), the court shall have regard to all the circumstances from which an inference can reasonably be drawn as to the accuracy of the statement.

72(1) Subject to section 71, for the purpose of this Part, the capital value of the following transactions effected by a deceased before his or her death, whether benefitting his or her dependant or any other person, shall be included as testamentary dispositions as of the date of the death of the deceased and shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her estate, and being available to be charged for payment by an order under clause 63(2)(f),

(a) gifts mortis causa; [page498]

(b) money deposited, together with interest thereon, in an account in the name of the deceased in trust for another or others with any bank, savings office, credit union or trust corporation, and remaining on deposit at the date of the death of the deceased;

(c) money deposited, together with interest thereon, in an account in the name of the deceased and another person or persons and payable on death under the terms of the deposit or by operation of law to the survivor or survivors of those persons with any bank, savings office, credit union or trust corporation, and remaining on deposit at the date of the death of the deceased;

(d) any disposition of property made by a deceased whereby property is held at the date of his or her death by the deceased and another as joint tenants;

(e) any disposition of property made by the deceased in trust or otherwise, to the extent that the deceased at the date of his or her death retained, either alone or in conjunction with another person or persons by the express provisions of the disposing instrument, a power to revoke such disposition, or a power to consume, invoke or dispose of the principal thereof, but the provisions of this clause do not affect the right of any income beneficiary to the income accrued and undistributed at the date of the death of the deceased;

(f) any amount payable under a policy of insurance effected on the life of the deceased and owned by him or her;

(f.1) any amount payable on the death of the deceased under a policy of group insurance; and

(g) any amount payable under a designation of beneficiary under Part III.

(2) The capital value of the transactions referred to in clauses (1)(b), (c) and (d) shall be deemed to be included in the net estate of the deceased to the extent that the funds on deposit were the property of the deceased immediately before the deposit or the consideration for the property held as joint tenants was furnished by the deceased.

Insurance Act, R.S.O. 1990, c. I.8, as amended, ss. 196 and 199

Claims by creditors

196(1) Where a beneficiary is designated, the insurance money, from the time of the happening of the event upon which the insurance money becomes payable, is not part of the estate of the insured and is not subject to the claims of the creditors of the insured.

Contract exempt from seizure

(2) While a designation in favour of a spouse, child, grandchild or parent of a person whose life is insured, or any of them, is in effect, the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure.

. . . . . [page499]

Transfer of ownership

199(1) Despite the Succession Law Reform Act, where in a contract or in an agreement in writing between an insurer and an insured it is provided that a person named in the contract or in the agreement has, upon the death of the insured, the rights and interests of the insured in the contract,

(a) the rights and interests of the insured in the contract do not, upon the death of the insured, form part of his or her estate; and

(b) upon the death of the insured, the person named in the contract or in the agreement has the rights and interests given to the insured by the contract and by this Part and shall be deemed to be the insured.

Successive owners

(2) Where the contract or agreement provides that two or more persons named in the contract or in the agreement shall, upon the death of the insured, have successively, on the death of each of them, the rights and interests of the insured in the contract, this section applies successively, with necessary modifications, to each of such persons and to his or her rights and interests in the contract.

Saving

(3) Despite any nomination made pursuant to this section, the insured may, prior to his or her death, assign, exercise rights under or in respect of, surrender or otherwise deal with the contract as if the nomination had not been made, and may alter or revoke the nomination by agreement in writing with the insurer.

Notes ----------------

Note 1: The few assets in the estate apart from the insurance policies were consumed by the debts of the estate. Thus, with the agreement of the parties, the applications proceeded on the basis that there were no assets in the estate apart, possibly, from the two insurance policies.

Note 2: Further, it was said that the pension would continue until age 25 if the child remained a full-time student and that the pension was indexed for inflation.

Note 3: The parties' costs and the funeral expenses of the deceased were to be paid first from the proceeds of the two policies.

Note 4: All parties operated on the premise that s. 72(1)(d) is directed at real property. However, these reasons are not to be taken as having decided the point. There is no need to decide the matter as, even if s. 72(1)(d) encompasses property other than real property, it could not apply to the present case because there was no "disposition of property", as that phrase has been interpreted by the jurisprudence. See Modopoulos, supra, and Caughell (Litigation Guardian of) v. Caughell Estate (Trustee of), [2000] O.J. No. 3118, 35 E.T.R. (2d) 1 (S.C.J.).

Note 5: Section 62(1) is set out in full in the Schedule to these reasons.

Note 6: Section 58(1) can be found in the Schedule to these reasons.

Note 7: Details of Mary Ogilvie's financial circumstances can be found in the background section of the reasons.