2008 BCSC 1498 K.D.M.B. v.Taylor

Before: The Honourable Madam Justice Gill

Reasons for Judgment

Counsel for the Plaintiff:	P.A. Mazzone
Counsel for the Defendants:	R.A. Millar
Date and Place of Trial:	March 25-28 and April 4, 2008
	Vancouver, B.C.

[1] This proceeding is brought on behalf of the infant plaintiff pursuant to s. 2 of the Wills Variation Act, R.S.B.C. 1996, c. 490, to vary the will of his late father, Robert John Miller, who died on July 10, 2006, at the age of 42.

[2] The infant plaintiff was born on August 26, 2003. The testator and his mother were initially friends but had a brief intimate relationship in late 2002. Mr. Miller had voluntarily made support payments and had been provided with information about the plaintiff, including photographs, but he never met his son.

[3] The defendant, Ms. Taylor, lived with Mr. Miller from approximately 1997 to the time of his death. She is the sole beneficiary and the executrix of his estate and did not know of the plaintiff’s existence until after Mr. Miller’s death.

[4] The will was made on October 14, 2002, before the plaintiff’s birth. The net value of the estate was estimated at approximately $400,000, but may ultimately be less. Included in the estate were six properties owned by Mr. Miller, five of which have been sold. The sixth has deficiencies in the water and sewer services and remedial work is required. The cost of that work has yet to be determined. There are also further tax liabilities and fees.

[5] It is agreed that the will should be varied and that the order made should distribute the estate on a percentage basis. The issue is what percentage of the estate the plaintiff should receive. Whatever he is awarded will go to the Public Guardian and Trustee to be disbursed for his benefit.

[6] On behalf of the plaintiff, it is argued that Mr. Miller had both a legal and moral obligation to the plaintiff and in all of the circumstances, including the fact that the defendant has a net worth of approximately $1 million derived principally from her relationship with the testator, the plaintiff should receive 90% of the estate. It is argued on behalf of the defendant that she has a compelling legal and moral entitlement to the bulk of the estate and the appropriate resolution of this action is an award to the plaintiff of 25% of the estate.

[7] Tataryn v Tataryn Estate, [1994] 2 S.C.R. 807 is the governing authority. In Tataryn, the Court considered the language of s. 2 of the Wills Variation Act and the words “adequate, just and equitable”. McLachlin J., who delivered the judgment of the Court, stated that the obligations which the law would impose on a person during his or her life must be the first consideration. As to such obligations, she stated at paras. 821-22:

… It follows that maintenance and property allocations which the law would support during the testator's lifetime should be reflected in the court's interpretation of what is "adequate, just and equitable in the circumstances" after the testator's death.

The legal obligations on a testator during his or her lifetime reflect a clear and unequivocal social expectation, expressed through society's elected representatives and the judicial doctrine of its courts. Where provision for a spouse is in issue, the testator's legal obligations while alive may be found in the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp), family property legislation and the law of constructive trust …. The legal obligation of a testator may also extend to dependent children. And in some cases, the principles of unjust enrichment may indicate a legal duty toward a grown, independent child by reason of the child's contribution to the estate. The legal obligations which society imposes on a testator during his lifetime are an important indication of the content of the legal obligation to provide "adequate, just and equitable" maintenance and support which is enforced after death.

[8] Reference was then made to the testator’s moral duties towards a spouse and children. Speaking of the standard by which to judge moral duties, McLachlin J. stated at paras. 822-23:

… Nevertheless, the uncertainty, even in this area, may not be so great as has been sometimes thought. For example, most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after his death, a strong moral obligation to do so exists if the size of the estate permits. Similarly, most people would agree that an adult dependent child is entitled to such consideration as the size of the estate and the testator's other obligations may allow. While the moral claim of independent adult children may be more tenuous, a large body of case law exists suggesting that, if the size of the estate permits and in the absence of circumstances which negate the existence of such an obligation, some provision for such children should be made ….

She continued at para. 823:

How are conflicting claims to be balanced against each other? Where the estate permits, all should be met. Where priorities must be considered, it seems to me that claims which would have been recognized during the testator's life -- i.e., claims based upon not only moral obligation but legal obligations -- should generally take precedence over moral claims. As between moral claims, some may be stronger than others. It falls to the court to weigh the strength of each claim and assign to each its proper priority. In doing this, one should take into account the important changes consequent upon the death of the testator. There is no longer any need to provide for the deceased and reasonable expectations following upon death may not be the same as in the event of a separation during lifetime. A will may provide a framework for the protection of the beneficiaries and future generations and the carrying out of legitimate social purposes. Any moral duty should be assessed in the light of the deceased's legitimate concerns which, where the assets of the estate permit, may go beyond providing for the surviving spouse and children.

[9] Many cases have considered Tataryn but there are relatively few dealing with claims made by infant children. During argument, reference was made to Barnsley v. Barnsley (1996), 142 D.L.R. (4th) 335 (B.C.C.A.); Handlen (Guardian ad Litem of) v. Handlen Estate, 2001 BCSC 1528; L.A.C. v. Koller, 2004 BCSC 30; Lansing v. Richardson, 2002 BCSC 856; and Morphy (Guardian ad Litem of) v. Mohr, [1998] B.C.J. No. 71 (S.C.) (QL). However, it was not argued that these decisions were of particular assistance to the resolution of the case at bar because of the factual differences.

[10] Turning to the issues raised, there are two contentious factual issues. The first is the nature of the relationship between the deceased and Ms. Taylor. The second is the extent to which Ms. Taylor contributed to Mr. Miller’s business which involved buying and renovating homes which were then rented or sold.

[11] The first issue arises because of the assertion in the statement of defence that the defendant and the testator were to be married and intended to sell all of the properties and move to the Okanagan area of British Columbia.

[12] It is argued on behalf of the plaintiff that the court should conclude that the testator and Ms. Taylor would not have married and perhaps would not even have stayed together. The plaintiff relies, in part, on the evidence of Ms. Bursey. She testified that she and the testator began a romantic relationship in late 2003 which continued until 2006. Ms. Bursey was aware that the testator lived with the defendant. She testified that in the spring of 2006, he told her that he was leaving Ms. Taylor and that he wanted to marry her and wanted her to move with him to Nova Scotia. Despite this evidence, I suspect that by May, 2006, she had doubts about the permanence of a relationship with the testator. In my view, it is telling that during his lifetime the testator did not end his relationship with Ms. Taylor. Sadly, he took his own life. One of the things he said to the defendant in the note he left was “Tracy I love you so much”. If the plaintiff suggests that the evidence of Ms. Bursey should lead to the conclusion that the relationship between the defendant and the testator was coming to an end, I cannot agree.

[13] It was also argued that the testator intended to return to his native Nova Scotia and as Ms. Taylor did not wish to make that move, the relationship was coming to an end for that reason.

[14] Several witnesses, including the defendant, testified that the testator had expressed a wish to return to his native Nova Scotia.

[15] Shortly before his death, Mr. Miller had travelled to Nova Scotia to attend a wedding. The defendant testified that when he returned home, he said he was interested in buying a piece of property on the ocean and expressed an interest in moving to Nova Scotia. She agreed that she did not want to leave British Columbia and had told him so. However, she also testified that Mr. Miller never said that he was, in fact, moving and she did not believe that he truly wished to move. He had also said that he would not go without her and in any event, she would have gone if he insisted on moving. The defendant testified that she and Mr. Miller had discussed moving to another city in British Columbia which is why properties were being sold in 2006, but a decision as to where had not yet been made.

[16] Ms. Lively had known the testator for many years. They had moved to British Columbia from Nova Scotia in mid-1991 and although their relationship ended in 1995, they remained friends. It was Ms. Lively’s belief that the testator had wanted to return to Nova Scotia and in a conversation with him approximately a month before he died, he said that he was selling everything and going back with or without Ms. Taylor. The evidence of Mr. Joyce, a friend of the testator who resides in Nova Scotia, was to the same effect.

[17] I do not accept that the testator’s relationship with the defendant was coming to an end because he was moving and she was not prepared to move with him, assuming that is the argument advanced. She testified that the relationship was of more importance to her and I accept her evidence.

[18] The next contentious factual issue relates to the defendant’s involvement in Mr. Miller’s business and the nature of her interest in that business.

[19] The written argument of the defendant includes the following:

Ms. Taylor places justification upon being the sole beneficiary of the Will of Bobbie Miller (none of which need be proved) on the basis of agreement as between them, promissory estoppel based on representations made to her, entitlement as the beneficiary otherwise of a constructive trust and by virtue of partnership. Entitlement under constructive trust law springs from reasonable expectations, contributions, statements made to the person and it is useful to consider the threads of the basis for remedies for common law spouses.

Although there is reference to entitlement under constructive trust law, counsel did not address the requirements of a constructive trust, nor was it suggested that it was necessary for the court to do so. The defendant argues, however, that she made significant contribution to the assets of the testator and they were, in effect, engaged in a joint venture. The plaintiff disputes those assertions. I would add that the original statement of defence included an allegation that property in the testator’s name was held upon a constructive trust for the defendant as to a one half interest. That allegation does not appear in the amended pleading.

[20] The defendant testified that prior to July, 2001, when she commenced full-time employment at a car dealership, she was involved in looking for properties, doing paperwork and keeping files in order and she also did some physical labour including painting and wall papering. Ms. Taylor did not give evidence about her employment between 1997 and July, 2001, but income tax assessment notices for those years show modest earnings and in the years 1997, 2000 and 2001, she was also in receipt of employment insurance benefits. There is no suggestion that the time she spent on the properties precluded her from pursuing other employment opportunities. She testified that after July, 2001, she no longer did physical work but her other involvement continued.

[21] It appears that Mr. Miller began this business venture with two trailers which he owned at the time he met Ms. Taylor. His next purchase was a property on Pearkes Drive. He then purchased a property on Paxton Road for $38,000. The purchaser’s statement of adjustments indicates that funding came from a Royal Bank mortgage on the Pearkes Drive property. In May, 1999, Mr. Miller purchased two other properties. Ms. Taylor testified that Mr. Miller purchased one with a friend and each contributed approximately $20,000. In respect of the second, Mr. Miller paid $10,000 and the vendor took back a security agreement for the balance. Ms. Taylor was not aware of where Mr. Miller had obtained the $30,000. Later properties were purchased with funds from a line of credit secured against the home jointly owned by Ms. Taylor and Mr. Miller. She did not, however, incur any actual liability. Ms. Taylor acknowledged that apart from the use of the line of credit, she did not make a financial contribution to the acquisition or renovation of the properties.

[22] The defendant was specifically questioned about the six properties owned by Mr. Miller at the time of his death. She agreed that she had not been involved in the acquisition or renovation of those properties nor had she been involved in such things as finding tenants or collecting rents. At trial, she stated that Mr. Miller had not worked on a full time basis in this venture but at her examination for discovery, her evidence was that he did. Whether or not it was the equivalent of full time work, it is clear that the testator spent many hours each week on tasks relating to the properties. It is also clear that after the defendant commenced full time employment, she spent relatively little time on the properties. She testified that when employed as comptroller, she worked long days and sometimes on weekends.

[23] It was also argued on her behalf that Ms. Taylor spent all of her money on the family for five years. It is presumably suggested that her greater earnings were expended on the family unit thereby permitting the testator to continue the acquisition and renovation of properties.

[24] When Ms. Taylor began her employment at the car dealership in July, 2001, she was earning $11 per hour. By 2003, her income had increased to approximately $50,000 per year and she had assumed the position of comptroller. It was her evidence that her earnings were used to pay the expenses of the family unit.

[25] However, Mr. Miller’s contributions to the family unit were significant. For example, when they purchased a home together in 2004, the down payment of $30,000 came from Mr. Miller. Ms. Taylor estimated that renovations cost $50,000. The larger monetary contribution to the cost of that work was made by the testator and he did much of the work. That property now belongs to the defendant as it was held in joint tenancy.

[26] I would add that although a comparison of income tax information would lead to a conclusion that Ms. Taylor was earning more than Mr. Miller, a review of Mr. Miller’s bank statements suggests that his reported income was less than his actual income.

[27] In summary, I accept that the defendant contributed to what her counsel describes as the “enterprise”. However, her contributions were, in a relative sense, modest. If it is the defendant’s position that there was an express arrangement between herself and the testator that any economic gain, whether rents or profits earned on resale, would be equally shared, I do not accept that submission. Ms. Taylor testified that there was no discussion about how things would be shared. In fact, rental income was not shared. The testator paid capital gains tax when properties were sold, and the evidence is that he used profits as he wished.

[28] I turn next to the legal and moral obligations of the testator.

[29] Obviously, the testator had a legal obligation to support his son. During argument, counsel for the defendant made submissions as to what amount would have been payable by the testator pursuant to the Child Support Guidelines. He calculated that approximately $45,000 would have been paid over sixteen years, presumably to demonstrate that 25% of the estate would be an appropriate award.

[30] In my view, this is not a helpful exercise. Had child maintenance been an issue during the testator’s lifetime, he would have been obligated to disclose more than the tax assessment notices that are in evidence and the matter would not have been as straightforward as is now suggested. The only calculation that can be made is of the lowest amount that would have been payable.

[31] As to legal obligations to the defendant, I accept that the law of constructive trust would have imposed some obligation on the testator vis-à-vis the defendant. However, she was not a dependent spouse.

[32] Turning to moral obligations, Mr. Miller had moral obligations to both parties. Counsel for the defendant described the testator’s moral obligation to his son as “tenuous”. That submission is seemingly based upon the lack of any relationship between the two. It is suggested that was the testator’s wish.

[33] The reason for the lack of a relationship is obvious and absent the need to keep the plaintiff’s existence secret from the defendant, I expect there would have been a relationship. Witnesses testified that Mr. Miller spoke proudly about his son and he had expressed a wish to meet his son. As stated, he had voluntarily made support payments, albeit on an intermittent basis. He had sent clothes and toys and asked for photographs. For these as well as other reasons, I cannot agree with defence counsel’s argument on this issue.

[34] Tataryn directs trial judges to weigh the strength of each claim and assign to each its proper priority. In my view, the claim of the plaintiff takes priority over that of the defendant.

[35] Turning to what order should be made regarding the distribution of the estate, it is argued on behalf of the plaintiff that the factors that the court may take into account in exercising the discretion given under the Wills Variation Act include the circumstances of the applicant and the defendant. I agree. As already stated, the defendant has a significant net worth, derived principally from her relationship with the testator. The plaintiff lives in modest circumstances. His mother is the sole support of two children. She earns only $10 per hour and has no assets. I would note that in his written submissions, counsel for the defendant described the plaintiff’s position as “admittedly bleak”.

[36] In my view, it is appropriate that the plaintiff receive 65% of the estate, excluding the contents of the home.

[37] Finally, the plaintiff will be entitled to costs. They are to be paid by the defendant, not by the estate.

“Gill J.”

Citation:	*K.D.M.B. v. Taylor,*
	2008 BCSC 1498