MRS Stanislawa Topolski Executrix of the Estate of Jerry (Jerzy) Topolski v. Her Majesty the Queen, [1978] CTC 723, 78 DTC 6466

Marceau, J [TRANSLATION]:—Plaintiff is executrix and universal legatee of her husband, who died January 21, 1968. Her action in this Court is against the assessment levied by the Minister of National Revenue on the property of the estate under the provisions of the Estate Tax Act. She argues that only half the property taxed, valued at $313,098.84, formed part of the estate of the deceased and came to her as a consequence of the death; the other half already belonged to her owing to the matrimonial regime under which she and her husband were married, and which was a regime of community and not of separation of property as the Minister claims. These few words of introduction clearly define the issue: the only question to be answered is the matrimonial regime under which plaintiff and her husband were married at the time of the latter’s death. The practical. consequences of the reply to this question with regard to both the application of the various provisions of the Act in question and the identification and valuation of the taxable property pose no problems. If the spouses were married under the regime of community, the action must be allowed in accordance with its conclusions; if they were married under the regime of separation, the action must be dismissed.

The question is therefore very specific, but the difficulty in answering it is apparent once the relevant facts are known. A geographical conflict of laws is compounded, as will be seen, by a temporal conflict of laws. We shall, however, proceed one step at a time.

Plaintiff and her late husband were married in Cracow, a city in Poland, in 1936. Both were Polish; they lived in Cracow, intended to remain there and did in fact establish their permanent matrimonial domicile there. The war broke out a few years later, however, and the country was overrun by the German army. Since they. were Jews, plaintiff and her husband were among the first victims of the Nazi occupation. In 1943, after some months of forced residence in a ghetto near the city, they succeeded in escaping, hid for some time in a nearby village and then crossed secretly into Hungary.. In 1945 they took refuge in Czechoslovakia, in 1946 in Belgium and in 1951 in France. It was in 1951 that they finally obtained what they had been seeking since leaving Poland: an opportunity to emigrate from Europe to either the United States, Australia or Canada. They arrived in Canada as landed immigrants in 1951, established themselves in Montreal on a permanent basis and eventually became Canadian citizens.

Plaintiff and her husband made no marriage contract either at the time of their marriage in 1936 or subsequently. They always lived in harmony and no Court order was made, either here or elsewhere, that might have affected their matrimonial regime. It is now possible, therefore, to state more concretely the question posed by the action. What is the matrimonial regime in 1965 of Canadian spouses, domiciled in the province of Quebec, who married without a contract in 1936 in Cracow, Poland, where both had been domiciled until that time and where they had established their first matrimonial domicile on what they intended to be a permanent basis? The question is clearly one of private international law, since in the eyes of Quebec law the matrimonial regime exists from the time of the marriage and Quebec’s marriage laws clearly cannot apply to non-Quebeckers married in a foreign Country. The question is in fact a classic example of its type, and there is no doubt as to the rule of conflict of laws that must, according to Quebec law, be applied to answer it: the law of the matrimonial domicile of the spouses must be referred to and applied, that is, in principle, the domicile chosen by them immediately after their marriage (cf Johnson, W S, Conflict of Laws, 1962, 307 et seq). Articles 6 and 8 of the Civil Code of the Province of Quebec,* [1] from which the conflict of laws rules applicable in Quebec are taken, impose the same solution regardless of whether the interpreter qualifies the legal matrimonial regime as a tacit contract, as is most often said, a statutory arrangement related to status and capacity, or consequences for property from the legal fact of marriage. There is thus no difficulty here. The rule is clear and certain: the answer must be based on the law of the domicile of the parties at the time of the marriage, that is, the Polish law applicable to spouses married in 1936. This appears easy but in fact there is a very special difficulty resulting from the content of the Polish law that must be applied.

Two experts in Polish law, called by each of the parties, testified on the state of Polish marriage law. They agreed on the actual facts of the positive law, which may be outlined as follows.

In Cracow in 1936 the legal matrimonial regime applicable to spouses who married without a marriage contract was the regime of separation of property. This was specified in the Austrian Civil Code, which had been introduced in 1852 and was then still in effect. In 1946 [sic], however, a new marriage law was enacted by the competent legislative authority having jurisdiction over the entire territory of Poland and this replaced in Cracow the rules that had been in effect until that time. This new law imposed a regime of community of acquests as the legal matrimonial regime, and contained a transitional provision stating that it applied to all spouses already married unless, within one year, they showed their intention of remaining under a regime of separation of property by means of a marriage contract, or unless they had been made subject to such a regime by order of a Court. On October 1, 1950, a second reform of the marriage law was introduced and a code of the family, which provided for a regime of community of movables and acquests as the legal matrimonial regime, was adopted, automatically replacing the legal regime of the 1946 law for spouses already married. In January 1965, a third reform was introduced which made no substantial changes in 'the legal regime of community but made it subject to some new rules that once again applied to spouses already married.

The two experts were categorical: the 1946 law was retroactive, as were those of 1950 and 1965, and all three adopted a legal regime of community which applied, in the absence of a contract or a Court order, to spouses already married.

The problem can be seen at once. Does the Quebec conflict of laws rule require us to apply the Polish law that existed in 1936, without reference to the subsequent provisions, or the law that existed at the time of the death of plaintiff’s husband, which clearly includes the transitional provisions of 1945, 1950 and 1962? In the first case the reply to the question raised is separation, whereas in the second it is community.

It is of course this problem that underlies the respective claims of the parties. In my view, however, the problem is more apparent than real as the analysis will easily show. The conflict rule applicable in the case at bar required, as we have seen, that ‘he question be settled according to the law of the matrimonial domicile, that is the law of Poland. Now, according to the expert witnesses, it is beyond question that under Polish law plaintiff and her husband were, in 1962, married under the regime of community owing to the retroactive application of the laws of 1945, 1950 a’nd 1962. In seeking the Polish law applicable to spouses married in 1936, a temporal conflict of laws may be seen to arise, but this conflict is within Polish law, which has been careful to resolve it by means of unambiguous transitional provisions. Our rule governing geographical conflicts of laws does not in itself allow the Court to refuse to apply these transitional provisions.

It is possible that some other reason might lead the Court to refuse to apply these retroactive laws of 1945, 1950 and 1962 in the case at bar, but I can see no such reason. The Minister does not argue that the public policy of Quebec is involved nor, obviously, does he contend that respecting the transitional rules of the Polish law would lead in this case to unacceptable results. The Minister advances three arguments in support of his claim. First, plaintiff and her husband were no longer in Poland in 1945, they had left the country with no intention of returning and were refugees. Secondly, plaintiff and her husband were unaware of the changes made in Polish law in 1945, so much so that in his will the husband still regarded himself as separate as to property. Thirdly, the Polish rules of international law refer to citizenship rather than domicile, and in 1945 plaintiff and her husband were no longer Polish citizens since they had left Poland with no intention of returning and had become stateless refugees. With regard to the first argument, the fact that plaintiff and her husband had left Poland in no sense implies the loss of their nationality or of their domicile, assuming that domicile is a point to be taken into consideration in this case. With regard to the second argument, the reply is that lack of awareness on the part of plaintiff and her husband of the state of the law that applied to them can have no more effect than the lack of awareness of all those who marry without a contract. Even those who regard the legal matrimonial regime as a tacit contract clearly recognize that the intention attributed to the parties is that of complying with the legal system of the country rather than with specific provision of the law. With regard to the third argument, it appears to me that the Polish rules of international law have nothing to do with this case. The dispute is before a Canadian court, which is required to resolve it in accordance with its own rule of conflict of laws: it Cannot be concerned with the conflict of laws rule of Polish law. Furthermore, even if this were not the case, there is nothing to suggest that plaintiff and her husband had lost their Polish citizenship in 1945.

I realize that three of the decisions cited to the Court concerning cases comparable to the one at bar were based on reasoning that did not go as far as my own. These decisions are two from Quebec (Dame Zamkovetz v Korneychuck, [1972] CS 855, and Dame Gwendolyn Jessie Patterson v Edwards, Court of Appeal, November 23, 1977, unreported) and one from British Columbia (Ambrose v Ambrose (1959), 30 WWR 49). On the basis of these decisions it would appear that a retroactive law of a foreign country cannot affect a person who, though previously a resident of that country, is no longer domiciled there, if prior to the passing of the law he had acquired a Canadian domicile. In fact, the principle found in these decisions is not as clear as my statement thereof would tend to indicate and distinctions may be brought out that would make it possible to place the judges’ reaction in a very special context.* [2] I feel it would be pointless to discuss this matter here, however, for the simple reason that in the final analysis my find- ing in the case at bar in no way contradicts the finding of these authorities. Indeed, it is certain that under the terms of the Quebec law here applicable plaintiff and her husband did not lose their Polish domicile and acquire a Canadian domicile until 1951, since between their flight in 1944 and their entry into Canada they did not settle anywhere permanently with the intention of remaining there (cf, inter alia, Dame Delhalle v Matthes, [1963] CS 261; Dame Winnycka v Oryschuk, [1970] CA 1163; Halina Jarucka v Julian Korzeniewski, [1975] CS 73; Ernest Trottier v Dame Lionel Rajotte, [1940] SCR 203). The Polish laws of 1945 and 1950 were thus adopted before they lost their Polish domicile by acquiring a Canadian one. Even if the Polish law of 1962 did not apply to them on the basis of certain of the reasons for judgment of the three decisions cited, they would nevertheless be married under a regime of community.

I am therefore of opinion that plaintiff’s argument is valid: at the time of her husband’s death she and he were married under the regime of community of property and consequently only half the property taxed by the impugned assessment came to her as a consequence of the death.

The action will therefore be allowed in accordance with its conclusions.