



COURT 
    OF APPEAL FOR BRITISH COLUMBIA




Citation:


Saugestad 
          v. Saugestad,







2008 
          BCCA 38



Date: 20080125

Docket: CA034716

Between:

Joan 
    Saugestad

Appellant

(
Plaintiff
)

And

Carl 
    Nicholas Saugestad and Stephen Saugestad, personally and in their capacity 
    as Executors of the Will of Ragnar Saugestad, Deceased

Respondents

(
Defendants
)




Before:


The 
          Honourable Mr. Justice Hall




The 
          Honourable Mr. Justice Mackenzie




The 
          Honourable Mr. Justice Chiasson








D.F. 
          McEwen, Q.C. and
A.S. MacKay


Counsel for the Appellant




H.H. 
          Low


Counsel for the Respondents




Place 
          and Date of Hearing:


Vancouver, British Columbia




20 November 2007




Place 
          and Date of Judgment:


Vancouver, British Columbia




25 January 2008








Written 
          Reasons by
:




The 
          Honourable Mr. Justice Mackenzie




Concurred 
          in by:




The 
          Honourable Mr. Justice Hall

The 
          Honourable Mr. Justice Chiasson



Reasons 
    for Judgment of the Honourable Mr. Justice Mackenzie:

[1]

This appeal is from a judgment varying 
    the will of the late Ragnar Saugestad (the testator) to provide the appellant 
    widow, Joan Saugestad, with a cash legacy of $29,000 and a life estate in 
    the testators one-half interest in a condominium known as the Electra.  
    The testator left the entirety of his estate disposed of by will to his two 
    sons from his first marriage.  The appellant contends that the variation is 
    inadequate to fulfill the testators legal and moral duties to her under the
Wills Variation Act
, R.S.B.C. 1996, c. 490.  The reasons for 
    judgment of the trial judge are indexed as 2006 BCSC 1839.

Background Facts

[2]

The testator died in 2003 at age 63. 
     He was survived by the appellant, then age 56, and his two sons, the respondents 
    Nicholas Saugestad and Stephen Saugestad, then ages 30 and 29.  The testator 
    was a native of Norway and lived in Japan from 1968 to 1990, employed by a 
    subsidiary of Tokai Shipping Ltd.  He married his first wife, Toshiowati (Joy) 
    Umezu, in 1970.  She died of breast cancer in 1989.  Tokai transferred the 
    testator to Vancouver in 1990.  He was paid a retirement allowance at that 
    time.  The testator continued to work for Tokai in Vancouver as a ship broker 
    at a salary of $10,000 per month until 2001 when Tokai went into receivership 
    and he retired.

[3]

The testator met the appellant in 1990 
    when she was separated from her first husband and was working as a realtor.  
    She has a grade 12 education and was licensed as a real estate salesperson 
    until 2002.  She has no children.  Following her divorce, the appellant and 
    the testator lived together for about a year and then were married on 5 March 
    1992.  After the marriage, the appellant worked as a realtor until 1997 when 
    she retired with the testators encouragement; her retirement permitted them 
    to travel extensively together at his expense, paid partly out of his capital 
    assets.  The testator told her he had enough money to support them in their 
    retirement.  The appellant was in good health except for a heart related problem 
    that resulted in minor surgery in 1993 and 2003.

[4]

Both the respondents are single with 
    no dependents and no significant independent assets.  They were born in Japan 
    and sent to boarding school in Hawaii in their early teens at their fathers 
    expense.  They both have Bachelor of Arts degrees resulting from university 
    studies financed by the testator.  Stephen has his own web design business 
    with anticipated earnings of $35,000 per year.  He was previously employed 
    as a web developer, earning approximately $21,000 per year.  Nicholas is employed 
    as a sales representative for a shipping company, earning $60,000 per year.

[5]

On the testators death, the appellant 
    inherited the matrimonial home, a condominium on Ostler Street in North Vancouver 
    (the Ostler Street Condo), as surviving joint tenant.  She receives the 
    testators Japanese pension of approximately $1,350 per month (declining slightly 
    over time) and a CPP survivors benefit of $270.13 per month.  Together with 
    motor vehicles, furniture and artwork, she is the beneficiary of the testators 
    RRSPs totalling $52,633 and approximately $28,000 in various bank accounts. 
     Specific bequests of cars, antiques, and art pieces were made to the respondents 
    in the will.  The residue of the estate was to be shared equally between the 
    sons.

[6]

A clause in the testators will dated 
    31 March 1998 explained why he had made no provision for the appellant in 
    his will:

I 
    LOVE MY WIFE, JOAN IRENE SAUGESTAD, but I have not made her the beneficiary 
    of my Will, as I have provided for her with other means so she does not require 
    a bequest from me.  I have provided for her as follows:

a.         
    She is a joint tenant of our home located at 401-1500 Ostler Court, North 
    Vancouver, although I provided all of the purchase funds as well as funds 
    for upgrading and furnishing;

b.         
    She is the named recipient of my Japanese pension.

The 
    appellant was aware that the will made no provision for her and she in turn 
    made no provision for him in her will.

[7]

The appellant brought to the marriage 
    a property settlement of $145,000 from her first marriage, a house later sold 
    for $76,000, some furniture, a car, and some savings.  The trial judge calculated 
    her total assets entering the marriage at approximately $225,000 compared 
    to her assets of approximately $950,000 on the testators death.

The Assets in Dispute

[8]

The testators assets involved in the 
    appeal primarily fall within three categories:

1.         
    real property;

2.         
    shares in a private investment holding company, Nistera Ltd. (Nistera),

3.         
    the testators inheritance from his mother, Hjordis Saugestad (the Hjordis 
    Inheritance).

All monetary values that follow are expressed in Canadian 
    dollars.

1.         Real Property

[9]

The testator had interests in four condominiums 
    at the date of his death.  The matrimonial residence, the Ostler Court Condo, 
    was purchased by the testator in 1993.  He transferred title into joint tenancy 
    with the appellant and title passed to the appellant by right of survivorship.  
    This property was valued at $381,000 at the date of death.

[10]

The testator was the sole owner of a 
    condominium in Boca Raton, Florida, (the Boca Raton Condo) purchased during 
    his first marriage in 1981 for $128,000.  Title passed as part of the residue 
    of the estate to the respondents under the will.  It was later sold for net 
    proceeds of $285,204, less expenses.  The trial judge valued it at $255,715 
    at the date of death.

[11]

In 1994, the testator and the appellant 
    purchased a rental condominium in Whistler as tenants in common.  They each 
    contributed approximately one-half of the net purchase price.  This condominium 
    was sold in 1997 and a portion of the proceeds was applied to the purchase 
    of a second Whistler condominium (the Blackcomb Condo) with the testator 
    and the appellant again as tenants in common contributing equally to the cash 
    portion of the purchase price.  This condominium was valued at $750,000 less 
    a mortgage of $92,956 at the date of death.

[12]

In April 1995, the testator and the 
    appellant purchased a rental condominium known as the Electra (the Electra 
    Condo) on Nelson Street in Vancouver as tenants in common with equal contributions 
    to the cash portion of the purchase price.  The trial judge valued the Electra 
    Condo at the date of death at $170,000 subject to a mortgage of $62,385.

[13]

The will gave the testators one-half 
    interest in the Blackcomb Condo and the Electra Condo to the respondents by 
    virtue of their inclusion in the residue of the estate.

2.         Nistera

[14]

In 1990 the testator moved approximately 
    $400,000 of his retirement allowance from his employer in Japan to accounts 
    in Norway from accounts in Singapore and Tokyo.  The testators mother, Hjordis 
    Saugestad, managed the funds in the Norwegian accounts until 1993 when the 
    funds were transferred to accounts in the testators name.  In 1997 the testator 
    incorporated a private investment holding company in Gibraltar, Nistera, which 
    he controlled.  The shares were held by Danish bank nominees for the testator 
    and the respondents as joint tenants.  In 1997 the testator transferred $415,000 
    to Nistera from his accounts in Norwegian banks and in 2000 he likewise transferred 
    another $720,457.  The testator took monies from the Nistera accounts from 
    time to time for family expenses and there may be tax implications related 
    to Nistera that the estate will have to deal with in due course.  At the testators 
    death, Nistera held deposits valued at $1,014,758.12.  There is no evidence 
    that any of the funds held in the Norwegian accounts or in Nistera originated 
    in Canada.  Beneficial ownership in the Nistera shares passed to the respondents 
    by right of survivorship.

3.         The Hjordis Inheritance

[15]

The testators mother, Hjordis Saugestad, 
    died on 6 November 2002 leaving 50 percent of her estate nominally to the 
    testator and 50 percent to two grandsons who were sons of the testators brother.  
    $356,655 was received by the testator from the estate before his death.  One-half 
    of that amount was transferred to Norwegian accounts for the two grandsons 
    in accordance with the terms of Hjordis will and is not in issue.  The remaining 
    half was transferred by the testator to his bank account in North Vancouver.  
    Approximately $53,000 of that amount was withdrawn and the remaining balance 
    of $125,365 was nominally an asset of the estate that passed to the respondents 
    as residue under the will.

[16]

After the testators death, the estate 
    received a further $374,085 from Hjordis estate which passed to the respondents 
    as residue under the will.

The Decision of the Trial Judge

[17]

The trial judge noted that the authority 
    of a court to vary a will to meet the legal and moral obligations of the testator 
    to provide for the proper maintenance and support of the testators spouse, 
    children, or both, is founded in s. 2 of the
Wills Variation Act
. 
     Section 2 provides:

Despite 
    any law or statute to the contrary, if a testator dies leaving a will that 
    does not, in the court's opinion, make adequate provision for the proper maintenance 
    and support of the testator's spouse or children, the court may, in its discretion, 
    in an action by or on behalf of the spouse or children, order that the provision 
    that it thinks adequate, just and equitable in the circumstances be made out 
    of the testator's estate for the spouse or children.

The 
    trial judge followed a two-stage approach endorsed by
Tataryn

v. Tataryn Estate
, [1994] 2 S.C.R. 807, and applied in subsequent 
    cases, to analyse the testators obligations to the appellant and determine 
    whether adequate, just and equitable provision had been made.  The first 
    stage addresses the notional obligations of the testator under a
Family 
    Relations Act
analysis and whether these obligations have been met. 
     The second stage considers the moral obligations of the testator and determines 
    whether these moral claims against the estate have been, or can be, met.

The Family Relations Entitlement Claims

[18]

In the case at hand, the trial judge 
    correctly employed a hypothetical calculation and division of family assets 
    between the testator and the appellant in the first stage of the analysis, 
    assuming that the parties had separated and that the assets were divided between 
    them immediately before the date of the testators death pursuant to the
Family 
    Relations Act
, R.S.B.C. 1996, c. 128 (the 
FRA
).  The 
    appellant contends, however, that the trial judge erred in her treatment of 
    the Boca Raton Condo, Nistera, and the Hjordis Inheritance.

[19]

The trial judge accepted that the Boca 
    Raton Condo and Nistera would be considered family assets for the purpose 
    of division under Part 5 of the
FRA
, but she found that the 
    presumptive equal division of those assets under s. 56(2) would be unfair 
    having regard to the factors listed in s. 65(1).  She concluded that those 
    assets should be notionally divided 80/20 in favour of the testator.  She 
    decided that no part of the Hjordis Inheritance was a family asset, but if 
    she was in error and the portion received by the testators estate after his 
    death was a family asset, it should also be notionally divided 80/20.  The 
    Ostler Street Condo, the Blackcomb Condo and the Electra Condo were family 
    assets that should notionally be divided equally.  On this notional division 
    the trial judge concluded that the appellant was left with approximately $50,000 
    more in assets on the testators death than she would have obtained on a division 
    of family assets under the
FRA
.

[20]

The appellant submits that the trial 
    judges analysis contains several errors.

1.         The Allegations of Bad Faith

[21]

In this Court the appellant contended 
    for the first time that the testator arranged the joint tenancy of the shares 
    in Nistera with his sons as part of a secret scheme to defeat the appellants 
    claims to the Nistera assets under s. 66(3) of the
FRA
and the
Wills Variation Act
.  The appellant argues that the testators 
    declaration of trust in favour of the respondents for the first part of the 
    Hjordis Inheritance also was made with intent to disguise the family asset 
    status of those funds and defeat the appellants claims.

[22]

The facts found by the trial judge implicitly 
    reject any bad faith on the part of the testator or the respondents.  The 
    testator recognized the moral claims of both the appellant and his sons and 
    he arranged his affairs to balance those claims.  The trial judge concluded 
    (at para. 135):


[....] the testator's clear intention was that his children should benefit 
    from his estate.  That is why he arranged his affairs as he did, and why he 
    provided for the plaintiff in other ways to ensure she would be adequately 
    looked after for the remainder of her lifetime.  He paid for the entirety 
    of the Ostler Court Condo, which she receives by the right of survivorship. 
     He was aware that she had significant assets, in the form of RRSPs and the 
    couple's investment properties, which would ensure she was provided for.  He 
    clearly wanted to provide for his sons, who themselves are only just starting 
    out on their career paths and have no assets or real estate, and have not 
    received the benefit of their mother's estate. In these circumstances, the 
    moral claim of the sons is stronger than the moral claim of the plaintiff, 
    and I have taken that into account in reaching my decision.

[23]

The testator recognized the claims of 
    the appellant in the arrangement of his affairs.  He explained in his will 
    that the appellant was excluded because he had provided for her by other means 
    so she does not require a bequest from me.  He left her the matrimonial 
    residence and his pension outside the will.  Together they had arranged to 
    hold their real estate investments, to which they both contributed financially, 
    as tenants in common.  Neither the pleadings nor the facts found by the trial 
    judge can support an inference that the testator dealt with any of his assets 
    in a manner intended to defeat legitimate claims of the appellant. There is 
    no basis for us to question the legitimacy of the testators motivation in 
    arranging his affairs as he did.  I would reject this ground of appeal.

2.         The Status 
    of the Hjordis Inheritance

[24]

The appellant submits that the trial 
    judge erred in finding the first part of the Hjordis Inheritance to be held 
    in trust by the testator for the respondents and therefore not beneficially 
    an asset of the estate.  She also submits that the second part, received after 
    the testators death, was a family asset subject to equal division under the
FRA
.

[25]

The trial judge has concluded that the 
    first part of the Hjordis Inheritance was impressed with a trust in favour 
    of the respondents in accordance with the intent of the testators mother.  
    On that finding, the testator had no beneficial interest in that portion of 
    the inheritance and it could not be attributed to him as a family asset.

[26]

The appellant contends that the evidence 
    did not support the finding of a trust and that an email from the testator 
    to his solicitor referencing the trust is insufficient in law to create a 
    trust.  In my view, this submission misapprehends the nature of the trust.  
    The trust arises from the intention of the testators mother to benefit the 
    respondents and not the testator; no beneficial interest passed to the testator.  
    His email to his solicitor is simply an acknowledgement of the existing trust: 
    it did not create it.  The transfer by the testator of one-half of the first 
    distribution from the Hjordis estate to his two nephews (the grandsons of 
    Hjordis) is circumstantial confirmation of the acknowledgement in the testators 
    email that he was not the intended beneficiary of that distribution.  The 
    trust is properly characterized as a secret trust, in the sense that no reference 
    is made to it explicitly in Hjordis testamentary documents but it is enforceable 
    outside her will.

[27]

The trial judge noted that the testator 
    withdrew approximately $53,000 of the Hjordis Inheritance funds from his bank 
    account and used a portion to pay living, travel, and entertainment expenses 
    of the testator and the appellant.  Approximately $40,000 was used for the 
    respondents benefit to pay certain of their school related loans.  It is 
    agreed by the parties that the trial judge incorrectly found the appellant 
    and testators amount to be $8,000 rather than $13,000 but the discrepancy 
    in the amount does not affect the judges finding that the funds were impressed 
    with a trust.  On her finding, it was neither an asset of the estate nor a 
    notional family asset.

[28]

The appellant contends that the trust 
    of the first part of the Hjordis Inheritance in favour of the respondents 
    is inconsistent with the decision in
MacDonald v. MacDonald
, 
    2002 BCSC 1453, 33 R.F.L. (5th) 119, at paras. 80-81, which rejected the attempted 
    characterization of an employment bonus earned before separation, but partly 
    paid after separation, as two separate assets for family asset purposes.  
    In my view, that decision is not on point.  The bonus in
MacDonald
was a single asset.  Here the trust excluded any beneficial interest of the 
    testator in that portion of the inheritance and it could not be characterized 
    as his family asset. There was no trust involved in the second distribution, 
    received after the testators death in the amount of $374,085, and it became 
    part of his beneficial estate.  The trial judge correctly recognized that 
    difference.  In my view, the trial judge made no reviewable errors in her 
    treatment of the Hjordis Inheritance trust.

[29]

The remaining Hjordis Inheritance issue 
    is whether the portion received after the testators death was a notional 
    family asset.  After an extensive review of family law authorities, the trial 
    judge decided that it was not.  The testator had discussed with the appellant 
    using those funds in the future, including for the purchase of a new car, 
    diamond earrings for the plaintiff, and a six-month world cruise.  The trial 
    judge concluded that those discussions did not amount to reliance on those 
    funds for their future financial security.  Such reliance was required to 
    characterize a future inheritance as a family asset.   Here the couple had 
    sufficient other assets for their financial security in their retirement, 
    and they were contemplating drawing on the Hjordis Inheritance for luxury 
    expenditures.

[30]

The appellant submits that the availability 
    of other assets to support her is not relevant to the determination of the 
    status of the Hjordis Inheritance.  The test to be applied under the
Wills 
    Variation Act
is whether the will has made adequate, just and equitable 
    provision for the appellant.  The family asset determination is a notional 
    one, in atypical circumstances.  Usually a division of family assets under 
    the
FRA
occurs between a separating couple in mid-life where 
    the interests of the parties themselves, plus any dependent children, are 
    the dominant considerations.  In the wills variation context, the determination 
    is made at the end of life of one of the parties.  The trial judge was alert 
    to this distinction, quoting para. 32 of
Tataryn
. Here, the 
    issues involve intergenerational equity between a surviving spouse, at or 
    near retirement with no children of her own, and adult children from the deceased 
    spouses first marriage.  The trial judge found that other assets were sufficient 
    to provide adequately for the appellants financial security.  As to the respondents, 
    the trial judge observed that they are only just starting out on their career 
    paths and have no assets or real estate, and have not received the benefit 
    of their mother's estate.  The trial judge concluded that their financial 
    circumstances were more deserving of moral claims on the estate than the appellants 
    wish to continue a generous lifestyle and purchase luxury items.  In my view, 
    the trial judge framed the issue correctly and I agree with her conclusion.  
    Simply because the appellant and the testator had indulged in an expensive 
    lifestyle that encroached on capital assets does not legally obligate the 
    estate to sustain that indulgence where the appellant is otherwise financially 
    secure.

3.         
    The 80/20 Notional Division of the Boca Raton Condo and Nistera

[31]

The appellant also submits that the 
    trial judge overlooked or underweighed the appellants contributions to the 
    testators assets.  She contends that in particular she made substantial contributions 
    to the Boca Raton, Blackcomb and Electra Condos.  The trial judge noted that 
    the appellant and the testator had made approximately equal contributions 
    to the Electra Condo and to the Blackcomb Condo and its predecessor in Whistler.  
    The return on these investments was largely in the form of capital appreciation 
    and, as the couple held the properties as tenants in common, the appellant 
    received half of those gains.  The Boca Raton Condo was acquired by the testator 
    entirely from funds accumulated during his first marriage. The appellant supervised 
    some renovations to make it suitable for the familys use after it had been 
    previously rented, but the cost of the renovations was paid from the testators 
    funds and the appellant subsequently benefited from its use with the testator.  
    In my view, there are no grounds for concluding that the trial judges 80/20 
    reapportionment  of the Boca Raton Condo overlooked or failed to adequately 
    account for any contribution of the appellant to the value of that asset and 
    I would not give effect to the appellants submission.

[32]

The trial judge also notionally apportioned 
    Nistera 80/20 in favour of the testator.  She summarized her conclusion at 
    para. 107 of her reasons:


In the case at bar, the 
    marriage was of moderate duration, and the funds held by Nistera Ltd. were 
    brought into the marriage by the Deceased. Some unknown portion of these funds 
    may have been inherited by the Deceased on the death of his first wife, and 
    her contributions to raising the Deceased's children no doubt contributed 
    to his income and earning capacity. Although the plaintiff would have a need 
    to remain economically independent, she would have significant other assets 
    that would enable her to provide for herself, as well as half of the Deceased's 
    pension.  As the Deceased was retired, both spouses would have a need for 
    additional income to support their lifestyles, which would have to be produced 
    by their existing assets.  The couple was already encroaching on the Deceased's 
    capital in order to sustain their expensive lifestyle.  Additionally, the 
    plaintiff did not contribute to the acquisition or preservation of the funds 
    held by Nistera Ltd., and in fact contributed to their expenditure by virtue 
    of the lifestyle she shared with the Deceased.  Thus, an equal division would 
    be unfair in these circumstances, and I would have reapportioned the fund 
    80% in the Deceased's favour.

I 
    am satisfied that the facts on which this apportionment is based are supported 
    by the evidence and there are no grounds to disturb the findings that the 
    appellant did not make any contribution to the Nistera assets and had only 
    benefited from encroachment on those assets with the testator to sustain 
    their expensive lifestyle in their retirement.  I would not disturb the trial 
    judges notional apportionment of Nistera.

The Moral Entitlement Claims

[33]

The trial judge summarized the relationship 
    between the testator and the appellant in these terms (at para. 123):

[...]

this is a second marriage of moderate length; the testator 
    has children from a previous marriage and much of his estate was accumulated 
    during that first marriage; each party has their own assets and is largely 
    financially independent; and the testator made clear his intention that he 
    wanted his estate to benefit his children, and not the plaintiff's heirs. 
     Society's reasonable expectations of what a judicious husband and father 
    would do in such circumstances may vary much more widely than they might in 
    the case of a life-long marriage in which neither party entered the relationship 
    with significant assets, as was the case in
Tataryn
.

The 
    trial judge noted that the appellant was leaving an 11 year marriage with 
    over $900,000 compared to her assets of approximately $225,000 when she entered 
    it.  The judge acknowledged that the appellants real estate acumen had contributed 
    to the value of the real estate investments but she concluded that the testators 
    capital contributions and payment of all the couples living expenses had 
    left the appellant with financial gains that she could never have achieved 
    had she continued working as a realtor and paying her own expenses.  The gains 
    offset any disadvantage to the appellant in giving up her career.  Both spouses 
    retired and the trial judge concluded that they enjoyed each others company 
    in an expensive lifestyle paid for by the testator.

[34]

The trial judge concluded that the respondents 
    had a strong competing moral entitlement to the testators estate based in 
    part on the contributions of the testators first wife to his estate.  The 
    trial judge summarized those contributions as childcare and household management 
    as well as benefiting him with her estate.  She presumed that the first wife 
    would have wanted her efforts to benefit her sons rather than the testators 
    new wife.

[35]

The appellant contends that there was 
    no evidence to support the trial judges finding that the testators first 
    wife made a contribution to his assets, and in particular to the funds held 
    in Nistera.  The trial judge found that some unknown portion of the Nistera 
    funds may have been inherited by the testator from his first wife and her 
    contributions in raising the children, as their primary care-giver, no doubt 
    contributed to [the testators] income and earning capacity.  The testator 
    was married to his first wife for 19 years and the respondents were 17 and 
    15 when their mother died.  The evidence clearly established that the testator 
    was the beneficiary of his first wifes estate and its size was unknown.  According 
    to the evidence of Nicholas Saugestad, his mother had her own import-export 
    business in Japan.  She guaranteed the mortgages on the Boca Raton Condo.  
    I am satisfied that there was evidence to support the facts found by the trial 
    judge as to the first wifes contribution and there are no grounds to disturb 
    that finding in this Court.

[36]

The trial judge also concluded that 
    the testators support for his sons during his lifetime created a legitimate 
    expectation that they would receive Nistera and the bulk of the estate.  The 
    testator had paid for the respondents education expenses and a comfortable 
    upbringing in a large home in Japan.  The testator paid for their travel expenses 
    and they had use of the condos in Whistler and Boca Raton.  The testators 
    relationship with his sons, and for that matter with the appellant, was sometimes 
    difficult but he recognized his moral responsibilities to both the respondents 
    and the appellant in the disposition of his assets.  He arranged his affairs 
    to fulfill his intention to leave the Ostler Court Condo directly to the appellant 
    outside the will.

[37]

The testator has provided the appellant 
    with sufficient assets that, together with assets she brought into the marriage, 
    provide her with a comfortable, financially secure lifestyle.  He left her 
    the Ostler Court Condo and his RRSPs and pension.  She retained half-interests 
    in the Blackcomb Condo and the Electra Condo that were both appreciating in 
    value.  She has no immediate family with potential moral claims on her estate 
    and expectations of an inheritance.

[38]

The assets allocated to the respondents 
    are substantial but hardly excessive considering the cost of residential accommodation 
    in Vancouver and their reasonable expectation that their father use his estate 
    to enhance the modest lifestyle available from their employment income and 
    provide them with some financial security.  In part, their moral claims arise 
    out of the unquantified benefits received by the testator from his first wife 
    during their marriage and his receipt of her estate.  I agree with the trial 
    judges presumption that she could reasonably expect those benefits to eventually 
    devolve to her sons.

[39]

The trial judge recognized that the 
    testamentary autonomy of the testator was a factor to be taken into account 
    when assessing the appellants claims.  Madam Justice McLachlin observed in
Tataryn
, at para. 33, that in many cases a testator has available 
    a range of options for dividing assets that is adequate, just and equitable.  
    An option chosen by a testator within the range should not be disturbed.  
    This is not a case where adult children are advancing claims against the provisions 
    of a will on grounds that they have moral claims which the testator has failed 
    to meet.  The respondents are defending the testators division of his assets. 
     The issue is not between the moral claims of the appellant and the respondents, 
    each standing independently of the will.  It is whether the testators arrangement 
    of his affairs is within the range of testamentary autonomy entitled to deference. 
     The moral claims of the respondents reinforce deference to his arrangements.  
    The trial judge rightly recognized that testamentary autonomy and the respondents 
    moral claims coincided to support the terms of the will.

[40]

The testator arranged his affairs in 
    a manner that provided reasonable financial security for the appellant and 
    otherwise chose to benefit his sons.  The appellants case is essentially 
    that she needs a larger share of the assets to be able to continue the generous 
    lifestyle that she enjoyed with the testator in retirement, without encroaching 
    on her capital.  In my view, the trial judge was right not to override the 
    testator and assign that objective a moral priority.  The respondents inheritance 
    will not support an expensive lifestyle but with prudent investment it will 
    supplement their modest employment income and allow them the means to maintain 
    a comfortable standard of living consistent with the support provided by the 
    testator before his death.  Their moral claims rank ahead of the appellants 
    in the circumstances.

The Trial Judges Variation of the Will

[41]

The trial judge concluded that the absence 
    of any provision for the appellant in the will caused the testator to fail 
    in his obligations to her.  She ordered that the will be varied to provide 
    the appellant with a bequest equal to the net amount she had taken from the 
    estate after the testators death and a life interest in the testators one-half 
    interest in the Electra Condo; the estate was ordered to pay out one-half 
    of the Electra mortgage.  The trial judge considered ordering the alternative 
    of an absolute interest in the Electra Condo, rather than a life interest, 
    but after reviewing several cases, including
Tataryn
, she concluded 
    that an absolute interest was not required because the appellants financial 
    independence was assured by her other assets including the matrimonial home, 
    and the value of the life estate was sufficient to meet the testators obligations 
    to her.  There is no cross appeal from the trial judges variation.

[42]

Tataryn
directs (at para. 11) that, apart from oral testimony, 
    an appellate court is in the same position as the trial judge in applying 
    the
Wills Variation Act
and deference to the findings of the 
    trial judge is not required.  The Electra Condo is an investment rather than 
    a property personally used by the appellant or the respondents.  It is managed 
    by the appellant.  It may be sold at any time depending on the inclination 
    of the vendors in the light of market conditions.  Allocating sale proceeds 
    between the life interest and the reversion adds an additional complication 
    to a sale.  A life estate is usually more appropriate for a matrimonial home 
    or other asset personally used by the grantee.  Here the appellant already 
    has a one-half interest in the Electra Condo.  In my view, it is preferable 
    to vary the will to give her the testators one-half interest absolutely instead 
    of a life estate and I would allow the appeal to that extent.  It follows 
    that the appellant will assume the entirety of the mortgage remaining on the 
    Electra Condo and the estate will be relieved of any obligations with respect 
    to that mortgage.

Conclusion

[43]

In the result I agree with the limited 
    variation in the will made by the trial judge, except in respect of the Electra 
    Condo.  I would amend the trial judges order to give the appellant the testators 
    one-half interest outright, subject to her assumption of the entire remaining 
    mortgage.  In all other respects I would affirm the trial judges order.

[44]

As the appellant has had limited success 
    on this appeal, she should have the costs of the appeal on a party and party 
    basis at scale 1.

The Honourable 
    Mr. Justice Mackenzie

I AGREE:

The Honourable Mr. Justice Hall

I AGREE:

The Honourable Mr. Justice Chiasson


