SUPREME COURT OF Nova Scotia
Citation: Welsh v. McKee-Daly, 2014 NSSC 356
Date: 20140925
Docket: Hfx No. 422446
Registry: Halifax
Between:
Brigid Shannon Welsh and Brenda Patricia MacLeod
Applicants
v.
Rosemary McKee-Daly, for herself, and as Personal Representative
of the Estate of the late Brendan George Daly
Respondent
DECISION
|
Judge: |
The Honourable Justice Gerald R. P. Moir |
|
Heard: |
August 5, 2014 |
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Counsel: |
J. Walter Thompson, Q.C. and Gillian MacNeil, for the Applicants Timothy C. Matthews, Q.C., for the Respondent |
Moir J.:
Introduction
[1] The late Mr. Brendan George Daly left his estate, which consisted primarily of his home in Dartmouth, to his wife, Rosemary McKee-Daly, without provision for his daughters, Brigid Welsh and Brenda MacLeod, stepdaughters of Ms. McKee-Daly. The daughters seek relief under the Testators' Family Maintenance Act.
Witnesses
[2] I have the affidavits of Ms. Welsh and Ms. MacLeod and of their husbands, Mr. Darren Welsh and Mr. Rob MacLeod. I heard cross-examination of Ms. Welsh and Ms. MacLeod.
[3] I have the affidavit of Ms. McKee-Daly, and I heard cross-examination of her. There was also an agreed fact made when she was examined in re-direct.
[4] I see no significant contradiction in the evidence of any of these witnesses. The parties act on understandable motives. Ms. Welsh and Ms. MacLeod are shocked that their father made no provision for them. Ms. McKee-Daly was troubled by the exclusion even before her husband’s death. She wanted to make a gift to her stepdaughters until clear mindedness, some months after losing her husband, told Ms. McKee-Daly that she needed the inheritance for financial security.
[5] My findings are based on my acceptance of the evidence of Ms. Welsh, Ms. MacLeod, and Ms. McKee-Daly.
Findings of Fact
[6] Period to the Death of Mr. Daly’s First Wife. Brendan Daly was born in 1932. He enlisted in the Canadian navy. Eventually, he rose to Chief Petty Officer, First Class. He retired in 1977 and took a civilian job with the Department of National Defence.
[7] Mr. Daly married Philomena (Crampsie) Daly in 1958, and the children were born in 1959 (Ms. Welsh) and 1962 (Ms. MacLeod).
[8] The immediate Daly family had solid relationships. All got along very well. Mr. Daly had only one sibling, a sister who lives in Los Angeles.
[9] Philomena Crampsie lived in Belfast, where Mr. Daly was stationed during the commissioning of the Bonaventure. The Crampsies were a large family, also closely knit. In the early 1970s, the Crampsie parents moved to Nova Scotia to get away from the troubles, and for a time they lived with the Daly family. Solid relationships developed among the members of the extended family.
[10] In 1984, the Dalys bought 39 Peddars Way in Dartmouth. A few years after, Philomena Daly succumbed to cancer. She was only fifty-five. She had been married to Mr. Daly for thirty-two years.
[11] Title to 39 Peddars Way passed exclusively to Mr. Daly. Title went unchanged until Mr. Daly died. It remained his home.
[12] 1990 – 1998. Mr. Daly’s daughters married before Ms. Daly died. A good relationship continued with both his sons-in-law. Four grandchildren came along, two Welshes and two MacLeods. They are now in their teens and twenties.
[13] In 1993, the Welshes moved next door to Mr. Daly. They live there still. During the period in question, the MacLeods lived in Dartmouth and saw Mr. Daly frequently. They moved to New Brunswick in 1998.
[14] Mr. Daly and Ms. McKee-Daly. In 1996, Mr. Daly was a retired gentleman, aged sixty-four. He met Rosemary McKee. Ms. McKee was a widow with three sons. They married in 1998. She was forty-nine. She lived in Belfast. On marriage, she retired.
[15] Ms. McKee-Daly and Mr. Daly maintained their own homes after they were married. For the first six years, they lived in Ms. Daly’s Belfast home. In 2004, she sold her home to purchase a smaller one in Dunmurry. After that, they alternated. Six months in Dartmouth, six months in Dunmurry.
[16] Mr. Daly bore the expenses of the Nova Scotia home, and Ms. McKee-Daly bore the expenses of the Northern Ireland home. However, Mr. Daly insisted on paying for most of the living expenses.
[17] They took out a mortgage to repair and renovate the Dartmouth home. Ms. McKee-Daly signed it. She thought she obtained some kind of title, but it appears she must have just been a guarantor.
[18] Ms. McKee-Daly’s affidavit is less personal than those provided by Ms. Welsh and Ms. MacLeod. However, the spousal relationship of nearly fifteen years, Mr. Daly’s residence in Northern Ireland for three-quarters of that time, his attendance at her youngest son’s wedding as father of the groom, and her emotional state in the months after his death, tell me that theirs was a deep relationship typical of spouses.
[19] Based on the kind of person Mr. Daly was, the development of relationships in his first family, the time he spent in Northern Ireland, his being father of the groom, his stepsons having travelled from Ireland and Scotland when he died, I would not be surprised to find he developed good relationships with his stepsons.
[20] Will and Reactions to It. In May of 2008, Mr. Daly and Ms. McKee-Daly met with Mr. Peter Landry, Q.C., to make wills. Mr. Daly had just completed a successful course of treatment for cancer and they were about the leave Dartmouth for their regular six months in Dunmurry.
[21] Mr. Daly’s will makes Ms. McKee-Daly his executor and leaves his estate to her, unless she dies first or within thirty days of him. On that condition, the estate would go to Ms. Welsh and Ms. MacLeod, unless one of them dies. On that further condition, the share would go to the deceased’s children.
[22] Mr. Daly died five years later. I have been provided with evidence of things said by Mr. Daly about his intentions in the days just before he died, when he knew he was going to die soon. I think this only marginally relevant: if it shows that Mr. Daly himself had misgivings about whether his will made adequate provision for a “dependant”, within the meaning of the Testators' Family Maintenance Act.
[23] I have also been provided with much evidence about discussions between Ms. McKee-Daly, on the one side, and the Welshes and the MacLeods, on the other, in the days and weeks following Mr. Daly’s death. Those discussions have no relevance because I accept the evidence given by Ms. McKee-Daly about her state and attitude in the months following the death of her husband. But, even if I did not have that evidence, it is difficult for me to see that the Welsh/MacLeod version assists with the only issue, which is the adequacy of Mr. Daly’s will.
[24] On the subject of things said by Mr. Daly, Ms. Welsh tells of a conversation in April 2013 when Mr. Daly was in hospital and knew he was dying. “Dad told me the house will be sold and the proceeds split three ways, between Rosemary, Brenda, and me.” In cross-examination, Ms. McKee-Daly testified to a conversation in which Mr. Daly said something opposite to her shortly before his death. As I said, I accept the evidence of these witnesses.
[25] On the subject of things said and done by Ms. McKee-Daly in the days, weeks, and months after her husband’s death, I will not delve into the details. The evidence is meant to show that Ms. McKee-Daly concealed the will at first, then agreed to make it right, and later reneged. It is also suggested that she sold the only significant estate asset, the Dartmouth home, too quickly. The implication is that she was in a rush to get away with something.
[26] Ms. McKee-Daly was not comfortable with her husband’s choice to leave nothing to his daughters. Not long after he died, the MacLeods and the Welshes chose to confront Ms. McKee-Daly about the will. Some took her to promise to “make it right.”
[27] Ms. McKee-Daly does not admit to agreeing to anything. The confrontations were upsetting, she was in grief, and she was in no shape to deal with confrontations over her husband’s will.
[28] July to October 2013. Ms. McKee-Daly went back to Ireland. She got medical help for the grief of one who lived through a spouse’s terminal illness and death. She started taking financial advice, and she returned to Canada to liquidate the only significant asset in her husband’s estate.
[29] The house was listed in late August for $310,000. It sold in early September for $280,000, and $5,000 got knocked off before closing for a supposed asbestos problem. Ms. McKee-Daly netted about $261,000. The evidence does not satisfy me that the sale was improvident.
[30] If the suggestion is that Ms. McKee-Daly agreed to split the proceeds and sold fast and loose to renege on an agreement, that would not say anything about the adequacy of the will. (Also, it is clear from the evidence that there never was an enforceable agreement.)
[31] Ms. McKee-Daly returned permanently to Ireland, from where she advised the Welshes and MacLeods that she needed what her husband left to her. She wrote:
Dear Brenda and Shannon
I dearly loved your father and the past 18 years have been amongst the happiest of my life. The last year has been the extremely hard for me, seeing my husband, your father’s health deteriorate so rapidly. I had hoped that we would have many more happy years together. I miss him every day and cherish the memories I have.
Your father and I did not have a lot of money. I believe your father must have been aware that I would not be entitled to his pensions on his death. He left everything in his will to me to provide for me for the rest of my life, although I am sure he did not believe that our time together would be over so soon. I have sought advice from a financial advisor as to the monies required to provide for me for the rest of my life, which could potentially be another 30 years. I was advised that to provide a basic level of income for my old age I would require the entire proceeds of the house sale.
I hope you can respect your father’s decisions and his need, as my husband, to ensure I was looked after. I know this will be hard for you to hear and I hope that given time you can forgive us both. I hope that you are never in this awful position in your life, where the decision you will have to make may cause such hurt to those that you love.
[32] Relative Financial Positions. It is clear from Ms. McKee-Daly’s affidavit that her husband had an understanding of her income, assets, and needs. He may have had a less detailed understanding of the financial positions of the Welshes and the MacLeods, but they were close to him and he probably had a good appreciation of how they were doing.
[33] Ms. McKee-Daly is a sixty-four-year-old woman. Longevity in her family suggests many more years to come than an actuary might calculate. Her three sons are independent and successful.
[34] Ms. McKee-Daly’s pension income totals $19,581 a year. She was disappointed to learn that she is not eligible for any of Mr. Daly’s pension income.
[35] Her investment income is funded by the net proceeds of the estate, $239,548, the proceeds of the accounts she held jointly with Mr. Daly, $107,433 less taxes, and her own savings of $62,149. Allowing something for taxes on the joint account that was Mr. Daly’s retirement income fund, I would say that Ms. McKee-Daly has capital of about $380,000 upon which to earn investment income. She foresees having to encroach on capital sometimes to meet her needs. I think that is a reasonable expectation.
[36] The home in Dunmurry is assessed at $208,150. So, Ms. McKee-Daly’s net worth is in the order of $590,000.
[37] The Welshes are fifty-two. They have two teenage children, the younger headed for college and the older already there. She is a nurse. He, a provincial employee at the youth detention facility in Waterville. Their combined annual income is about $160,000 and their net worth is about $315,000 including $134,000 equity in 41 Peddars Way.
[38] Ms. and Mr. MacLeod are fifty-five and fifty-three years old. They have two sons in their twenties and have borne the expenses of their college education. One remains in college, and the other will likely take a further degree. She operates a small daycare at home. He is a professional engineer. Their combined annual income is about $175,000 and their net worth is about $520,000.
[39] The affidavits for the applicants show that they face the financial challenges of middle-class families with dependent teenagers or young adults. They have the incomes and money’s worth to be comfortable, but no more than that for now.
Principles of Testator Family Maintenance
[40] The statute gives the court power to override a will if the testator has not made “adequate provision … for the proper maintenance and support of a dependant”: s. 3(1). The judge is given discretion “to order that whatever provision the judge deems adequate be made out of the estate of the testator for the proper maintenance and support of the dependant”: also, s. 3(1).
[41] Despite the statute’s references to maintenance, support, and dependency, it is possible to make an order in favour of an independent son or daughter: Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 and Zwicker Estate v. Garrett (1976), 15 N.S.R. (2d) 118 (C.A.). However, the case for an independent son or daughter is weaker than that for a dependent child or surviving spouse: Tataryn at pp. 822-823 and Zwicker at para. 38.
[42] The British Columbia statute was at issue in Tataryn. In light of Zwicker, no difference in principle turns on British Columbia’s requirement for “adequate, just and equitable” maintenance and support compared with our simple “adequate”.
[43] The discussion in Zwicker makes it clear that the simple reference to adequacy does not mean barely adequate. It captures moral obligations of the same kind as in “just and equitable”.
[44] The broad interpretation of adequacy is evident in other Nova Scotia decisions. See for example, Harvey v. Powell Estate, [1988] N.S.J. 299 (Nathanson J.); Redmond v. Redmond Estate, [1996] N.S.J. 443 (Tidman J.), and; McIntyre v. McNeil Estate, [2010] N.S.J. 218 (Forgeron J.). In my opinion, the holdings in Tataryn apply to the Nova Scotia Testators' Family Maintenance Act.
[45] Justice, as she was then, McLachlin provided the court’s reasons in Tataryn. She distinguished between the testator’s legal obligations and his moral obligations, holding that the former took priority over the later on the question of inadequate maintenance and support: pp. 820-821 and 823.
[46] The legal obligations are explained this way at p. 822:
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.
The laws informing the after-death legal obligations include spousal support under the Divorce Act, family property legislation, and the law of constructive trust (p. 821), as well as child support legislation and unjust enrichment (p. 822).
[47] Less certainty can be had about the moral obligations, but the uncertainty can be exaggerated. Justice McLachlin made that point at p. 822, saying:
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 … .
[48] As I said, priority goes to the legal obligations, if there are any. “As between moral claims, some may be stronger than others”: p. 823. The comment in that connection, “… reasonable expectations following upon death may not be the same as in the event of a separation during lifetime” (also, p. 823), shows that there may be a significant moral obligation to the surviving spouse that exceeds the legal obligations of spousal support, division of matrimonial property, unjust enrichment, and those underlying the award of a constructive trust.
[49] The decision in Tataryn then turns to the will (still at p. 823):
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.
A testator has a “wide range of options, any of which might be considered appropriate in the circumstances”: p. 824. A will that is within the range should not be disturbed. Continuing at p. 824:
Only where the testator has chosen an option which falls below his or her obligations as defined by reference to legal and moral norms, should the court make an order which achieves the justice the testator failed to achieve.
[50] I suppose it is good to be reminded of what I have to do in every case. So, s. 5(1) of the of the Testators' Family Maintenance Act says “the judge shall inquire into and consider all matters that should be fairly taken into account in deciding upon the application”. An inclusive series of factors follows the general requirement:
(a) whether the character or conduct of the dependant is such as should disentitle the dependant to the benefit of an order under this Act;
(b) whether the dependant is likely to become possessed of or entitled to any other provision for his maintenance and support;
(c) the relations of the dependant and the testator at the time of his death;
(d) the financial circumstances of the dependant;
(e) the claims which any other dependant has upon the estate;
(f) any provision which the testator while living has made for the dependant and for any other dependant;
(g) any services rendered by the dependant to the testator;
(h) any sum of money or any property provided by the dependant for the testator for the purpose of providing a home or assisting in any business or occupation or for maintenance or medical or hospital expenses.
[51] For a time, there seemed to be some controversy between the parties about how the jointly held assets should be treated in determining whether and what provision should be made for the applicants. As is pointed out for Ms. McKee-Daly, numerous provisions in the statute make it clear that the court’s power is restricted to the estate admitted to probate.
[52] However, assets that escape probate because of automatic transfer on death cannot be ignored for the question of whether adequate provision was made. Assets automatically transferred on death are relevant to the assessment the court must make even though they are not available for provision by the court if it determines that the will did not make adequate provision.
[53] The parties did not seem to be at odds in the end on the subject of assets automatically transferred on death, and relevancy to the adequacy of the will but exclusion from court-ordered provision seems consistent with the authorities. So, I must consider whether the will was adequate in leaving the entire value of the estate, about $240,000, to Ms. McKee-Daly when $107,000 (before taxes) of Mr. Daly’s money passed automatically to her on his death.
[54] To summarize the principles governing the adequacy of provisions in a will:
• The question is whether the testator has chosen provisions that fall within the range of options that are appropriate in the circumstances.
• One examines whether the provisions are consistent with legal obligations the testator bore during life.
• Legal norms prevail over moral norms, so one examines secondly the testator’s moral obligations.
• The court interferes with testamentary freedom only if the testator chose an option that falls below his or her obligations as defined by legal and moral norms.
• Assets automatically transferred on death are relevant to this inquiry, although they are not available for a remedy under the statute.
If the provisions in the will are inadequate, the court makes an order that “achieves the justice the testator failed to achieve.”
[55] I must add to this summary the observation that the approach mandated by Tataryn is highly circumstantial. There is no principle that a dependent child or spouse always takes priority over an independent child. Or, that the independence or dependence of a spouse is determinative. Remarks in the authorities on these kinds of subjects provide guidance, not principle.
Authoritative Guidance
[56] To reiterate, Tataryn and Zwicker tell us that, in some circumstances, a will that excludes independent children may be inadequate, but the case for independent children is weaker than that of an excluded dependent child or surviving spouse. Tataryn expresses one consideration about independent children, “when the assets of the estate permit”: para. 32.
[57] The applicants emphasize two decisions for my guidance on the question of adequacy: Landy v. Landy Estate: [1991] B.C.J. 3326 (C.A.) and Saugestad v. Saugestad, [2006] B.C.S.C. 1839, varied [2008] B.C.C.A. 38.
[58] Landy involved a modest estate, $156,000 ($280,000 today). William Landy had one child, Larry Landy, who was fifty-five and had three children of his own when his father died. William Landy’s first wife, Larry Landy’s mother, had died many years before. Mr. Landy married Amy Landy, and they were together for fifteen years when he died. She died one year later.
[59] Mr. Landy’s will left $10,000 to Larry, $4,000 to grandchildren, and the rest to his wife. She had about $80,000 of her own.
[60] Mr. Larry Landy had a combined family income of $68,000 in 1992 ($101,000 today), and combined net worth of $67,000 ($100,000 today). He sought a variation. At trial, the $10,000 was increased to $20,000. He appealed, as did Mr. Landy’s heirs. The Court of Appeal increased the provision to $60,000, almost half the estate.
[61] I do not find the decision in Landy to be of much assistance. One reason is legal, the other factual.
[62] At p. 13 of Landy, Justice Hinds rests his reasoning on a principle that lacks even the limited deference to testamentary freedom flushed out much later in Tataryn. Justice Hinds reviewed the will from “the point of view of the judicious father of a family seeking to discharge both his marital and his parental duty”. This does not allow for the range of options within legal and moral obligations.
[63] The facts are different. Mr. Larry Landy contributed “considerable labour” without pay to a business that, on sale, contributed substantially to his father’s wealth: p. 3 and p. 14, point 2. The father had promised the son on “a number of occasions”, “you will be taken care of”: p. 14, point 1. See also, p. 15, point 4. This brings to mind a constructive trust, as mentioned in Tataryn in connection with legal obligations.
[64] We find further at p. 15 and 16, points 5, 6, and 7 a deep concern that the money Ms. Landy accumulated on her own and under her husband’s will would be going, not to maintain herself, but to her heirs. She was in ill-health and, per point 6, “it was reasonably foreseeable that the life expectancy of Amy Landy was limited.” The opposite is true of Ms. McKee-Daly.
[65] Saugestad was not a case for an adult child. It was a case in which a second wife was excluded.
[66] The applicant’s refer me to Justice Russell’s discussion of “The Moral Obligation of the Testator in a Second Marriage” at paras. 121 to 132. One cannot ignore relevant facts of the first marriage, which produced the independent children favoured by the will. I do not take Justice Russell to say more than that.
[67] She refers, for example, at para. 126, to “The more limited moral claim of a second wife where the bulk of the testator’s estate was acquired during a first marriage …”, but she refers to that “as a relevant factor”. As is “the fact that the testator’s estate had been built up by the joint efforts of the testator and his second wife”.
[68] There is no principle that one’s legal and moral obligations to a second spouse are less than those owed to a lifelong spouse.
Mr. Daly’s Range of Options
[69] He owed no legal obligations to his grown, independent children. He owed legal obligations to Ms. McKee-Daly, that is to say obligations that appear from norms underlying laws that governed his relationship with his spouse in life.
[70] As suggested in Tataryn, one does not focus on what, if anything, Ms. McKee-Daly would have been awarded for spousal support in the unhappy event that they had separated during life. The “legal” obligation is more generalized than that. The same goes for the presumed half-interest under the Matrimonial Property Act.
[71] Those “legal” obligations do not dictate that Mr. Daly had to leave all of his $350,000 estate to her, but they help inform the range of his options.
[72] As with most couples in a long-standing marriage, Mr. Daly’s first obligation in death was to support Ms. McKee-Daly. Had they had dependent children who would remain in the other’s care, leaving everything to a surviving parent or stepparent might well have discharged the obligations to the dependent child. The Daly children, and the McKee stepchildren, had all become independent.
[73] The support obligation to a spouse during life takes on a new character in death. In life, the legal obligation is meaningless for most happily married people. Among those people, financial and less tangible dependencies develop without calculation. Their concern is with alleviating those dependencies in death.
[74] So, the moral obligation to a surviving spouse may be consuming, depending on how much and how many intangible and tangible things one can leave behind. This does not change for a second marriage.
[75] Mr. Daly might have left Ms. McKee-Daly with $80,000 plus the joint accounts, as the applicants propose the court now do. With her own savings, she would have had about $220,000 upon which to earn investment income. Add that to her $20,000 in pension income, and Ms. McKee-Daly would have had a very modest lifestyle. The alternative chosen by Mr. Daly enabled a more comfortable, but still modest, lifestyle.
[76] Either of these options may have been open to Mr. Daly. However, there is no way around the proposition that sizeable gifts to the grown, independent children would compromise Ms. McKee-Daly’s financial security. The choice to provide fully for his wife was well within the range of options by which Mr. Daly could meet his obligations.
Conclusion
[77] I will dismiss the application. The applicants have already made written submissions on costs. Ms. McKee-Daly may respond in writing, and the applicants may reply.
[78] I thank counsel for the quality of their submissions on the application and their professional conduct of it.
Moir J.