February 26, 2015

Bonnie and Danny had a 12 year common law relationship. In a modern twist on the typical fact scenario, Bonnie was the older, successful business woman and Danny was the younger man who left his job at Bonnie’s car dealership to look after things at home. At trial, Justice Greer found that they were very close – “joined at the hip,” as she put it. When Bonnie died, she left Danny nothing in the most recent iterations of her dual wills. The estate trustees nevertheless paid Danny one million dollars, representing the legacy that was left to him in Bonnie’s previous will but mysteriously got left out when her wills were updated. Was a million dollars and surviving interest in a $485,000 rental property enough?

Not when Bonnie’s estate was worth $17 million, confirmed the Divisional Court in Morassut v Jaczynski. At trial, Justice Greer granted Danny’s dependant support application, and awarded him the home he shared with Bonnie (worth $1.2 million), $100,000 per year for life, and an additional $50,000 every five years to purchase a new vehicle.

The Judgment was unsuccessfully appealed to Divisional Court. Lessons from the Divisional Court’s reasons include:

– Although a court should take into account a dependant’s prospects for future employment and income when awarding dependant support under theSuccession Law Reform Act (it is one of the enumerated factors which the court must consider), there is no obligation on a surviving spouse to become self-sufficient. Unlike section 30 of the Family Law Act, which expressly states that each spouse has an obligation to provide support for him or herself, there is no corresponding provision in the SLRA. This makes sense, as the policy considerations underlying support for separating spouses and surviving spouses are different: the deceased, unlike a separating spouse, no longer needs money to live. Here, the trial judge found that it was not reasonable to believe that Danny, a 55 year old man who had not worked in his field for a number of years, would return to work on the car dealership floor.

– Justice Greer properly considered Danny’s evidence that Bonnie had promised him that he would always be able to live in their home and that she would look after him financially. Such evidence was relevant to whether there was “any agreement between the deceased and the dependant” – another one of the enumerated factors in section 62(1) of the SLRA. The Divisional Court also agreed with the trial judge that Danny’s evidence in this regard met the evidentiary requirement that it be corroborated.

– Dependant support decisions are discretionary and as such, they may only be set aside “where the court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustice.”

Taking a hard line approach when faced with a dependant support application by a common law spouse may have significant cost consequences. Justice Greer found that the estate trustees’ “strong attitude that Danny was entitled to nothing” constituted “reprehensible conduct” meriting an award of substantial indemnity costs. The Divisional Court declined to interfere with that finding.