Rada v Smith

Facts - the estate

1. For the purposes of these proceedings the parties agreed (all figures being rounded): 1. The estate comprises cash of $285,000 and Igor's house 2. After payment of sale expenses, Igor's house could be expected to be converted to $625,000 in cash 3. The value of the estate was therefore $910,000 4. To arrive at the value of the expected residue there should be deducted: 1. Estate expenses of $16,000 2. The specific legacies of $240,000 3. The plaintiff's costs on the ordinary basis of $72,000, and 4. The defendants' costs on the indemnity basis of $87,000 1. This left an expected residue of $495,000
2. I will next turn to the other salient facts. By the end of the evidence there was no substantial dispute about those facts and what follows are the findings of the Court.

Facts - Rebecca's current circumstances

1. Both Rebecca and her mother Carole gave evidence. Without disrespect, given how the case was presented at the hearing, nothing turns on Carole's evidence. As might be expected, Rebecca was cross-examined at length. There was no basis to, and Mrs Pringle certainly did not ultimately submit, that Rebecca was anything other than an honest witness. She gave her evidence in an intelligent and straightforward way, making all appropriate concessions without demur, and I have no hesitation in finding that she was a witness of truth.
2. Rebecca is 45 years old and married. She has 26 years' experience as a cook. She and her husband, who is also a cook, have no children.
3. As I have already recorded, she went to Canada with her mother in 1982 when she was not quite four years old. Her mother is Canadian. They never returned to Australia and her parents divorced. There was a property settlement.
4. There can be no doubt that Rebecca and her husband live modestly. They have no significant assets and approximately CAD$5,000 in debts.
5. For more than twenty years Rebecca has lived (and later with her husband) in the same rented one bedroom apartment that she began occupying as a student. It is small and, understandably, Rebecca told the Court that she would like to live somewhere larger and nicer.
6. However, it is important for present purposes to note that the apartment is in a building run by a co-operative and, for its location in Toronto, the annual rent of CAD$11,520 is well below market rent. Rebecca described it as subsidised rent and told me that she and her husband could not afford market rent in that area. Furthermore, Rebecca accepted that she had secure accommodation in effect as a permanent tenant, given her evidence to the effect that the co-operative management of the building did not evict you once you ceased being a student if you continued to pay the rent.
7. Rebecca has worked at a sports stadium for sixteen years. The work is for around seven months of the year (reflecting the sports season). For the other months she receives unemployment benefits which she informed me gave her an income as good as, if not better than, if she sought other casual employment in the off-season.
8. Rebecca has no health issues that impact on her ability to work or her likely working life. Her husband does have heart problems that have reduced his employment capacity and he is currently looking for work.
9. Even with her husband's difficulties, Rebecca accepted that their income exceeds their outgoings. They have been able to reduce some student debts of her husband. They were able to afford a post-Covid holiday to Mexico to celebrate her husband's birthday.
10. For present purposes, the most important point to emerge from cross-examination was that on their current income Rebecca was able to engage in a reasonable amount of discretionary spending. This included expenses such as alcohol, cannabis (which is legal in Ontario), dining out and tatoos. For example, in the month commencing 8 December 2023, Mrs Pringle was able to demonstrate discretionary spending of CAD$2,380.
11. I draw the discretionary spending to attention as a matter of fact, not criticism. People can choose to spend their hard-earned income as they please, subject to the law. In this case, it is the ability to spend that money rather than what it is spent on that is of importance.

Facts - Rebecca and Igor, including "estrangement"

1. The evidence makes clear that Igor could be difficult and abusive. He had a problem with alcohol. At other times he appears to have been a solicitous parent in his relationship with Rebecca. It will be recalled that Rebecca went to Canada with her mother in 1982 at the age of nearly four. It appears there was correspondence between Rebecca and her father as she grew up. Significantly, Igor visited Canada for six weeks in 1990. Rebecca visited Igor in Australia in 1997 and 1999. Igor and Rebecca then maintained intermittent contact by telephone and mail, despite what I accept was sometimes derogatory and upsetting communications by Igor. Rebecca ceased all communication with Igor in 2016.
2. With his final will, Igor also left a letter. This sought to give his explanation for why he was leaving nothing to Rebecca. I do not propose to reproduce its contents in these reasons. He refers to Rebecca as his "long-estranged" daughter. The letter contains statements which the Court is satisfied are not factually correct. The defendants did not press the letter as relevant to the exercise of the Court's discretion and I have not taken it into account.
3. However, I do not wish to leave this topic without making a more general observation. In my view, "estrangement" should be banished from the family provision lexicon as some kind of freestanding, established consideration. It has come to be treated as though it appears as one of the matters specified in s 60(2) of the Act.
4. I respectfully add my voice to other judicial expressions of caution about the utility of the term. It assumes what it seeks to prove. It is a word already loaded with moral obloquy which risks diverting the Court and the parties into an ultimately fruitless attempt to assign blame for conduct which took place long ago, often in emotional circumstances, and in a context which is impossible to recreate years later in a way that is both fair and proportionate to its ultimate importance to the outcome of a given case. Obviously one of the fundamental difficulties with that task is the necessary unavailability of one of the protagonists to give evidence.
5. "Estrangement" should be replaced with the neutral expression "lack of contact". As such, it falls within at least sub-sections 60(2)(m) and (p) of the Act. So understood, it invites a factually more objective inquiry in the sense of ascertaining what contact there was or was not. To the extent that the reasons for the lack of contact need to be explored, the experience of the Court is that, generally, only the most egregious conduct on the part of either the deceased or the applicant will have any impact on the multifactorial discretionary exercise in which the Court is engaged. And only in the most extreme cases will it be decisive of the outcome. In the vast majority of cases it will have no impact because the Court understands that disagreements, moments of irritation, and words said in haste and repented at leisure are an ordinary incident of family life.
6. For these reasons I do not propose to give any particular weight one way or the other to the lack of contact between Rebecca and Igor. In my respectful opinion, of far more importance to the present case is the bare fact (I say "bare" to strip it of any suggestion of allocating fault or blame) that the course of Rebecca's life since she was nearly four has been that she has made her life in Canada, far from Igor.

Facts - other interested parties

1. While the other beneficiaries did not put their circumstances in issue, their place in Igor's testamentary scheme should be taken into account. Two friends of Igor received $20,000 each. More significantly, the defendants receive $200,000, Igor's motor vehicle and his personal effects.
2. The defendants were Igor's neighbours and friends. There was no challenge to the defendants' evidence about the considerable assistance they gave Igor, especially in his final years. They became his de facto family and carers, extending to him exactly the kind of care and assistance that might be expected from loving family members.
3. The case was conducted before me on the basis that the specific legacies would not be disturbed. I should record that were it otherwise, the Court would not have caused those gifts to bear any of the burden of provision for Rebecca. Rebecca's claim would have had to have been quite different in strength and specificity to have risen to an amount that would have been greater than the agreed residue so as to justify recourse to the specific legacies.
4. Turning to consider the residuary gift to Guide Dogs, it was common ground that Igor had no contact during his lifetime with that organisation. However, the evidence disclosed that he had made wills in 2009 and 2013 in each of which he had left Guide Dogs half of the residue of his estate (with the other half in both wills also going to charity). In the overall exercise of its discretion, the Court is entitled to take into account that Igor had a clear and relatively longstanding testamentary intention to benefit Guide Dogs.

Rebecca's submissions

1. Given the approach taken by the defendants (and Guide Dogs), the issue for determination resolved into whether or not provision in excess of $300,000 should be ordered for Rebecca.
2. In summary, Mr Tang submitted that $420,000 to $450,000 was proper provision given that Rebecca had not enjoyed the support in life from Igor that she might have expected, and that she now had a need for secure accommodation, funds to start a business and for vicissitudes. She and her husband lived modestly within their means, and the larger amount of provision would commensurately advance her in life more than the $300,000 propounded by the defendants. She was a cook and her station in life would be significantly improved, in particular, if she and her husband could start their business.

Defendants' submissions

1. Mrs Pringle submitted that while Rebecca had no significant assets, she had been able to save some money and pay off some debts, she had secure accommodation and was in stable employment. She had worked for the same employer on a seasonal basis for sixteen years and in the off-season received unemployment benefits, creating an annual income which was adequate for her needs. She had current debts of CAD$5,000 and even with her husband's recent unemployment the couple's income exceeded their expenses. While it was clear their lifestyle was modest, she was still able to enjoy significant discretionary expenditure.
2. Mrs Pringle submitted that $300,000 was proper provision and still allowed for recognition of Igor's intention to benefit Guide Dogs. That provision represented an allowance for 10 years' rent (CAD$115,200) rounded up to CAD$150,000 and CAD$100,000 for investment in a future business, vicissitudes and howsoever Rebecca chose to deploy the funds. This CAD$250,000 is equivalent to $280,000, which Mrs Pringle submitted supported the conclusion that $300,000 was proper provision.

Consideration

1. These proceedings require consideration of the interaction of a number of well-understood and uncontroversial propositions as to the operation of the Act, which I summarise without the burden of citations as: 1. The onus is on the plaintiff to prove her or his entitlement to any particular family provision order. 2. Generally, a testator's moral obligation does not extend to providing an unencumbered home to an adult child where that child is not otherwise under some disadvantage. 3. Testamentary autonomy is an important consideration, as is recognising that autonomy is qualified by the Act. Nevertheless, the Act does not license the Court to rewrite a will to amend dispositions of which right thinking people might disapprove. 4. Explanations by the testator for their testamentary choices and any other indications of testamentary intention are relevant but not decisive. 5. The Court will be less protective of gifts to charities with which the testator had no connection in life. 6. "Estrangement" can be a relevant factor, but care must be taken because of the complexity that often attends any attempt to unravel its causes, including that one of the key protagonists is necessarily not available to give evidence.
2. In considering these matters (noting what I have said in [26] to [28] above about estrangement), it is convenient to begin with the final paragraph of Mr Tang's written submissions: "Whilst the Plaintiff has a career, she is in parlous financial circumstances. Any provision out of the Deceased's estate would materially change the Plaintiff's maintenance and advancement in life". As to the first sentence, what the evidence demonstrates is that Rebecca's financial circumstances are modest but not parlous. As to the second sentence, it is undoubtedly true, but there is little evidence that enables a principled decision as to what "any provision" should be.
3. The evidence does not support a finding of particular 'needs', in the sense that word is used in family provision discourse, including as it relates to maintenance or advancement in life. The Court finds that: 1. Rebecca has secure, but modest, accommodation. 2. Rebecca is in steady employment with no evidence to suggest that will not be the case into the foreseeable future. 3. Rebecca and her husband (even as he currently looks for new work and has some health issues) are able to pay their bills, including spending on discretionary pleasures, with some money left over to pay off debts and possibly otherwise to be saved.
4. Insofar as Rebecca, understandably, would like to move to a nicer and larger apartment, the only evidence is that the average monthly rent of a "normal sized" apartment is CAD$2,400 per month, which she and her husband cannot afford. No evidence was adduced or submission made as to how any particular provision would enable them to afford something better and for how long.
5. Mr Tang expressly disavowed any ambition on Rebecca's part to purchase an apartment, so there was no evidence of the cost of purchasing apartments in Toronto. In circumstances where she has lived in her current apartment for twenty years and it has proved adequate for her and her husband's needs, the Court would not exercise its discretion to make an allowance for other unspecified accommodation, especially where it was not suggested sufficient provision could be made to ensure secure occupation into old age.
6. The only other specific, aspirational item raised by Rebecca in her evidence is: "My husband and I would like to start a business in the next year. We have written out plans and designs for a small café serving vegetarian dishes and a special non-alcoholic drink menu. We have dreamt about this for years, however, we do not have any money to start up and without assets or equity a loan is not possible."
7. To enable such an endeavour would be to advance Rebecca in life. The difficulty for the Court is that the "plans and designs" were not in evidence and, more pertinently, there was no evidence as to how much money Rebecca needs to make her dream a reality.
8. I have already dealt with the effect on the exercise of the Court's discretion of the so-called estrangement. It is not a factor which influences the Court's approach one way or the other.
9. Similarly, I take no account of Igor's letter, which in any event was not pressed by Mrs Pringle. While it may express how Igor felt at the time he wrote it, I am not satisfied that it is a fair description of Rebecca's conduct or attitude towards Igor.
10. Guide Dogs has, with respect quite properly, recognised that the burden of any provision for Rebecca should fall on the residue to which it is otherwise entitled. The amount of that provision, ultimately, involves the weight to be given to Igor's testamentary desire to benefit Guide Dogs against his undoubted moral obligation to provide for his only daughter in the context of the amount available and what need Rebecca has proven. Guide Dogs' claim on Igor's testamentary bounty is reduced by the fact that, despite being a testamentary object since 2009 in three wills, it is a charity with which he had no contact during his life.
11. On the other hand, the weight of Igor's moral obligation to Rebecca is also reduced, but not eliminated, by the fact (and it is just the fact, not a basis for some kind of adverse judgment against Rebecca) that Rebecca was taken to Canada at just under four years of age and has made her life there, with minimal contact with Igor. The Court does nevertheless accept that, due to Igor's difficult behaviour, the nature of their contact was less than Rebecca would have wanted. It is also the case that Rebecca and her husband are self-sufficient adults, albeit living in modest circumstances.
12. The value of the residue is $495,000. Taking the matters I have referred to in [39] to [48] above into account in an overall assessment, I accept Mrs Pringle's submission that $300,000 is proper provision for Rebecca. This is effectively 60% of the residue. How it is attributed is open to various analyses, but I accept Mrs Pringle's explanation set out in [37] above, being an allowance for 10 years rent rounded up to CAD$150,000 and CAD$100,000 for investment in a future business, vicissitudes and howsoever Rebecca chooses to deploy the funds. This CAD$250,000 is equivalent to $280,000, which supports $300,000 being proper provision. Although there is no evidence on this point, common sense and the Court's commercial experience suggest that if Rebecca chose to apply it all to her proposed business, such a sum would go a long way towards making that a reality, including enabling her to obtain further loan funds based on her capital commitment to the project.
13. There are two reasons why I reject Mr Tang's submission in support of $420,000 to $450,000 being the proper amount of provision. First, and with respect, it amounted to no more than contending that more provision would be better for Rebecca. That is self-evidently true. However, more does not make it the provision that "ought to be made" (s 59(2) of the Act), which involves an assessment of all relevant circumstances. That observation invites the second reason, which is that the provision for which Mr Tang contends is for nearly all of the residue, which is an outcome that gives insufficient weight to Igor's evident intention (expressed over more than one will) to benefit Guide Dogs.
14. The final matter relevant to the exercise of the Court's discretion arises from the fact that the amount of residue will depend upon the price for which Igor's house is sold. I consider that a wise and just testator would have wanted to preserve as far as possible the proportionality between Rebecca and Guide Dogs if the house sells for more than expected, but to protect her against the possibility of a lower than expected sale price. I do not accept Mrs Pringle's submission that this approach should be avoided because it did not give Guide Dogs certainty. In the Court's experience, gifts of a percentage of residue are common, especially in gifts to charities. No evidence or submission was advanced of any prejudice to Guide Dogs if the determination of its precise entitlement must await the sale of the house and the administration of the estate.

Conclusion

1. The Court will order that provision be made for Rebecca from the residue of the estate in that amount which is the greater of $300,000 or 60% of the residue.
2. I will hear the parties as to the form of orders and costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 March 2024