Court File and Parties
COURT FILE NO.: CV-04-10861-ES DATE: 20190930 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARIE LOFTUS ANDERSON, Applicant/Moving Party AND: STEVEN JOHN ANDERSON, Respondent/Responding Party
BEFORE: Dietrich J.
COUNSEL: Wade Morris and Elizabeth De Yoe, for the Applicant Ismail Barmania, for the Respondent
HEARD: September 18, 2019
ENDORSEMENT
[1] The Applicant Marie Loftus Anderson, an 89-year old widow, moved into an assisted-living facility earlier this year. Prior to her move, she had been living in a residence at 853 Coxwell Avenue, in the City of Toronto, owned by her late husband Alexander Robert Anderson.
[2] Mr. and Mrs. Anderson had been married for about 18 years when Mr. Anderson died in 2004. They had no mutual children, and each had children from an earlier marriage.
[3] Mr. Anderson made a will, dated April 28, 1995, in which he named Mrs. Anderson as his Estate Trustee. Mr. Anderson's will provides that as long as Mrs. Anderson is the Estate Trustee, she is entitled to continue to reside in his residence until her death. The will gives her the option, as Estate Trustee, to sell the residence and use the proceeds to purchase another residence in which she may reside until her death or for such shorter period as she desires. The will also provides that Mr. Anderson's son Steven Anderson, who is the residual beneficiary of the estate, shall pay the taxes, insurance, repairs, mortgage and any other charges or amounts necessary for the general upkeep of the residence, or any substituted residence, while Mrs. Anderson resides in such residence.
[4] Prior to his death, Mr. Anderson added his son Steven as a joint owner of a $300,000 GIC, with right of survivorship. On Mr. Anderson's death, this GIC passed to Steven by right of survivorship.
[5] Following Mr. Anderson's death, Mrs. Anderson continued to live in the residence and Mr. Anderson's son Steven paid most of the expenses relating to the residence, as set out in Mr. Anderson's will. Steven deposed that it was his understanding that the GIC funds were intended to "help out" Mrs. Anderson. Steven estimates that between his late father's death in 2004 and 2019, he spent more than $300,000 on expenses relating to maintenance of the residence.
[6] While Mrs. Anderson lived in the residence, she paid her own living expenses, including telephone and cable services.
[7] Mrs. Anderson's failing health, as confirmed by her physician, no longer permitted her to live independently. Therefore, as Estate Trustee, she sold the residence and moved into an assisted living facility that could provide the support she now requires. However, Mrs. Anderson's own resources are insufficient to cover her costs of living in the assisted-living facility. Mr. Anderson's will does not contemplate the situation in which Mrs. Anderson has found herself.
[8] Mr. Anderson's estate now holds approximately $857,000 of net proceeds from the sale of residence. The proceeds are being held in trust subject to the consent of the parties or an order of this court.
[9] Mrs. Anderson's principal source of income is government pension (CPP and OAS). Her savings are modest. As such, she brought the within application under the Succession Law Reform Act, R.S.0. 1980, c. S.26 seeking dependant's support from Mr. Anderson's estate. She brings this motion for interim support.
[10] For the reasons that follow, I find that Mrs. Anderson is entitled to interim support pending the outcome of her application. I fix the interim support to be paid to her from the proceeds of the sale of the house held by Mr. Anderson's estate at $4,635 monthly, payable until her application has been finally determined.
Position of the Parties
[11] Mrs. Anderson submits that her fixed pension income is approximately $1,680 per month and her total monthly income from all sources is $1,966.39. She has a savings account with approximately $30,000. To date, she has paid all the costs of her accommodation at the assisted living facility out of her savings. She does not seek reimbursement of the amounts already paid on this motion.
[12] Mrs. Anderson's submits that her monthly expenses at the assisted-living facility are approximately $5,025 per month. This amount includes: rent ($4,505); locker ($50); television ($40) groceries and food ($50); laundry ($80); taxis ($200); clothing ($50) and hair care ($50). It is her position that Mr. Anderson's estate should cover more than the shortfall between these costs and her income because she should not be required to spend her entire income on these accommodation related expenses. She submits that as her legally married spouse, Mr. Anderson is required to provide for her to the extent that he is able to. Further, she asserts that if required to spend all of her income on these monthly expenses, she would have no resources to deal with other expenses that may arise, and her lifestyle would essentially be subsistence living. She asserts that such a lifestyle is contrary to what Mr. Anderson had in mind when he attempted to create a life interest for her in a residence, the expenses of which would be borne by him or his estate.
[13] Steven, as the residual beneficiary of Mr. Anderson's estate, opposes Mrs. Anderson's application for dependant's support and her motion for interim support. Steven has brought his own application in which he seeks a declaration that the proceeds from the sale of the residence form part of his late father's estate and that they be paid to him forthwith as the residual beneficiary. He further asserts that he was under no legal obligation to pay the expenses he paid relating to the residence following his father's death (from 2004 to 2019) and he is seeking to recover those payments now from the sale proceeds.
[14] Steven argues that Mrs. Anderson is not entitled to support from Mr. Anderson's estate because she signed a marriage contract in 1986 in which she waived any entitlement, on Mr. Anderson's death, to his estate and to support, including dependant's support under the Succession Law Reform Act. Steven also submits that Mrs. Anderson is statute-barred from bringing her application for dependant's support. However, for the purposes of Mrs. Anderson's motion for interim support, Steven is not raising any defence based on a limitation period.
[15] In the alternative, Steven submits that if the court is inclined to award Mrs. Anderson an amount as interim support, it should be ordered on a without prejudice basis and Mrs. Anderson should be required to contribute her entire monthly income ($1,966) to her accommodation expenses. He further asserts that Mrs. Anderson's monthly expenses are not $5,025 per month as she asserts, but rather $4,725, which would include her monthly rent, television, locker, laundry services and hair care. He does not include groceries (because her rent includes her meals), taxis (because she uses wheel-trans), clothing or entertainment expenses. Based on his calculation ($4,725 - $1,966), Mr. Anderson's estate should not be required to pay more than $2,759 per month as interim support.
[16] Steven further submits that Mrs. Anderson has approximately $30,000 in savings. He asserts that these savings could cover the entire cost of her monthly expenses for about 15 months. Accordingly, he submits that there is no immediate need for interim support and the matter should be deferred to the hearing of Mrs. Anderson's application when the issues of the limitation period and the marriage contract will be fully considered. He further submits that if Mrs. Anderson is awarded interim support, he should be reimbursed for all the expenses he paid in relation to the residence from 2004 to 2019.
Law and Analysis
Effect of the marriage contract
[17] Section 63(4) of the Succession Law Reform Act permits the court to make an order for the support of a dependant despite any agreement or waiver to the contrary. See also Dagg v. Cameron (Estate), 2015 ONSC 6134 at para. 48.
[18] The enforceability of the marriage contract has been called into question by Mrs. Anderson and its effect will be fully considered at the hearing of her application. For the purposes of this motion for interim support, I note that the waiver of each of Mr. and Mrs. Anderson to any interest in the other's estate and their release of each other from any claims under the Succession Law Reform Act, as set out in their marriage contract, specifically states: “Notwithstanding the general intent of this paragraph, nothing contained herein shall undermine or defeat in any way a life interest in 853 Coxwell Avenue, Toronto being created on the demise of Alexander in favour of Marie.” The marriage contract was made before the April 28, 1995 will. However, it is reasonable to infer that an earlier, similar iteration of the life interest in the residence was included in a will made by Mr. Anderson contemporaneously with or prior to the marriage contract. It is also reasonable to infer that Mrs. Anderson entered into the marriage contract in reliance on Mr. Anderson's commitment to provide a life interest for her in a residence, the expenses of which would be borne by him or his estate.
[19] Accordingly, given the remedial nature of Part V of the Succession Law Reform Act, I am prepared to rely on section 63(4) of the Succession Law Reform Act for the purposes of awarding interim support.
Entitlement to interim support
[20] Section 61(1) of the Succession Law Reform Act requires an application for dependant's support to be brought within six months of the grant of probate in the deceased' s estate; however, pursuant to section 61(2), the court may allow the application to be heard at any time as to any portion of the estate remaining undistributed at the date of the application. It is common ground that Mrs. Anderson did not bring her application within six months of having obtained the grant of probate in her late husband's estate. As noted, Steven does not raise a limitation period defence in this motion.
[21] Section 58(1) of the Succession Law Reform Act provides that where a deceased has not made adequate provision for the proper support of his dependants, 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 dependant. Section 64 of the Succession Law Reform Act enables an applicant to move for interim support under section 58.
[22] In these cases, the applicant must establish that she needs and is entitled to support. She must show that she meets the definition of a “dependant”, and that the deceased did not make adequate provision for her proper support, in the sense that she needs support: Perkovic v. McClyment, 2008 CanLII 52315 (ON SC), para. 6.
[23] Based on the record, it is clear that Mrs. Anderson was a “dependant” of Mr. Anderson at the time of his death for the purposes of Part V of the Succession Law Reform Act. She was his spouse and he was providing support to her immediately before his death. He was providing her with a residence in which to live and, according to Mrs. Anderson's evidence, which Steven does not contest, Mr. Anderson was paying all the expenses relating to the residence.
[24] At issue is whether Mr. Anderson made adequate provision for Mrs. Anderson's proper support. Mr. Anderson, as Mrs. Anderson's legally married spouse, has a legal obligation to provide for her pursuant to section 30 of the Family Law Act, R.S.O., c. F.3, to the extent that he is capable of doing so.
[25] The courts have defined “proper” support to mean support that is fit, suitable, appropriate, adapted and correct: Blatchford (Litigation guardian of) v. Blatchford Estate, 1999 CanLII 15091 (ONSC), paras. 22-23.
[26] Mr Anderson's will provides Mrs. Anderson with the benefit of a residence for the rest of her life and that the expenses of such residence would be borne by Steven. The will does not address the situation in which Mrs. Anderson's health requires her to seek accommodation at an assisted-living facility, where she is required to pay rent and other expenses. The accommodation costs at an assisted-living facility typically include more than shelter. Other expenses built into the monthly cost of Mrs. Anderson's accommodation at the assisted-living centre include food and assistive support. She argues that the support provided to her under the will is no longer “proper” and must be adapted to meet her current needs.
[27] The basic rent for her suite at the assisted-living centre is $4,505 per month. This amount does not include charges for her television, cable, laundry, locker and hair care. It does include her meals and support services. Based on Mrs. Anderson's income, she is unable to afford the basic rent. She submits that her proper support requires accommodation that allows her to maintain her dignity and ensures her health and safety.
[28] In an attempt to resolve the matter during the motion, Mrs. Anderson adjusted her request for interim support from $5,025 to $4,635 per month, which would include the basic rent, laundry services and a locker, but not television, food (outside of that provided by the facility), taxis, clothing and hair care.
[29] Mrs. Anderson submits that Mr. Anderson intended that his estate should pay for her accommodation and that he has a legal obligation to provide proper support. She asserts that her proper support should also include medical-related expenses including hearing aids ($3,000), dental work ($1,000), eyeglasses ($400) and an eye examination, if required ($200), for a total of approximately $4,600.
[30] Steven asserts that Mrs. Anderson has means and can therefore contribute to her own support. He submits that she has savings of $30,000 and, seemingly, has been able to pay the full cost of her accommodation over the last few months from her savings. In addition, he asserts that, based on Mrs. Anderson's tax returns, she pays no tax on her government pensions and has net monthly income of about $1,966.39. Therefore, he asserts, she has the ability to contribute to her own support and should be required to contribute. Accordingly, Steven submits that Mrs. Anderson should contribute the whole of her pension income to her expenses and the balance could be paid by Mr. Anderson's estate if so ordered.
[31] Using Mrs. Anderson's adjusted needs amount of $4,635 per month, he maintains that that Mrs. Anderson should contribute $1,996 per month to her accommodation costs and that Mr. Anderson's estate be required to pay no more than the difference of $2,639 per month. Based on this calculation, apart from her modest savings of $30,000, Mrs. Anderson would have no means to pay for food (outside of meals provided by the facility), taxis, clothing, hair care and guest meal tickets, and no means to pay for one-time expenses, including the new hearing aids, eyeglasses, eye exam and dental work, which she does or will soon require. Accordingly, I find that interim support of $2,639 from Mr. Anderson's estate is not fit, adapted, appropriate or correct.
[32] It is apparent from the terms of Mr. Anderson's will that he intended to ensure that Mrs. Anderson had a roof over her head for the rest of her life and that his resources would be used to pay for the expenses of her residence, whatever form it may take. Accordingly, it is appropriate that the interim support from Mr. Anderson's estate be adapted to Mrs. Anderson's current living arrangement, in which she involuntarily finds herself.
[33] I find that Mrs. Anderson has been co-operative in reducing her accommodation expense for which she seeks interim support to the bare minimum of rent, a locker and laundry services. While it is true that the rent amount includes meals and some assistive support that Steven was not subsidizing when Mrs. Anderson was living at the residence, Mrs. Anderson cannot readily opt out of those services at the assisted-living facility. There, she has no kitchen facilities in which to prepare her own meals and no laundry facilities for her personal use. Further, the report of Mrs. Anderson's family physician, dated June 30, 2019, states that “Mrs. Anderson does have impairments in her functioning and does require assistance with her instrumental activities of daily living. This includes grocery shopping and meal preparation, medication administration, cleaning and laundry.”
Disposition
[34] The Applicant shall be entitled to interim support payable out of the net proceeds of sale of the residence now held in the Estate of Alexander Robert Anderson in the amount of $4,635 per month. The first payment shall be made on October 1, 2019 and the payments shall continue until the final disposition of her application. This order shall constitute a first charge against the assets of the estate of Alexander Robert Anderson.
[35] I decline to award Mrs. Anderson an additional award of interim support that would permit her to purchase hearing aids, eyeglasses, an eye exam and dental work at this time. This issue, together with the issue of whether Mrs. Anderson is entitled to reimbursement for accommodation related expenses already paid by her to the assisted-living facility, are adjourned to be heard at the hearing of her application.
Costs
[36] The Applicant, Mrs. Anderson, has been largely successful on her motion and is therefore entitled to her costs pursuant to rule 57.01(1) of the Rules of Civil Procedure. She does not seek costs against the Respondent Steven Anderson personally. Having reviewed the Costs Outlines of each of the Applicant and the Respondent, I note that the total costs sought by each are not dissimilar. The Applicant seeks costs of $29,536.96, including HST and disbursements, on a full indemnity basis. The Respondent, if successful, would have sought costs of $22,675.90 including HST and disbursements, on a full indemnity basis.
[37] In reviewing the Costs Outline of the Applicant, it appears that there may have been some duplication of effort between the counsel who prepared the witnesses for cross-examination and attended on the cross-examination of witnesses. Accordingly, I award costs to the Applicant, on a partial indemnity basis, in the amount of $20,000 payable from the Estate of Alexander Robert Anderson. These costs are fair and reasonable, within the reasonable expectation of the Respondent, and accord with the principles set out by the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.).
Dietrich J.
Date: September 30, 2019