Re Hill, [1953] CTC 223

GALE, J. (oral) :—At the opening of the hearing of the motion I appointed Mr. Beatty to represent all unborn persons who may hereafter become beneficially entitled to any part of the estate.

After revoking former testamentary dispositions and appointing the National Trust Co. Ltd. as executor and trustee of the will, the late Mr. Hill directed as follows: ‘ ‘ I direct by executor and trustee to pay my just debts and funeral and testamentary expenses and all succession duties and inheritance and death taxes that may be payable in connection with any insurance on my life or any gift or benefit given by me either by survivorship or by this my Will or any Codicil thereto and whether such duties and taxes be payable in respect of estates or interests which fall into possession at my death or at any subsequent time.”

The entire estate was then left to the trustee upon certain trusts to convert the same into money and to invest the proceeds, to pay pecuniary legacies, and, six months after his death, to pay to his wife, if living, the sum of $3,000 out of the capital of the estate, and thereafter to pay her $250 per month, without interest, out of capital during her natural life. After the widow’s death and after payment of the specific and pecuniary legacies, the residue of the estate was to be divided equally among the deceased’s children named in the will.

The estate was a very large one, being valued for succession duty purposes at something in excess of $250,000.

In prior proceedings this Court was asked whether the benefits given by the will to the widow were in addition to or in lieu of her dower interest in the real property and by judgment dated June 28, 1951, the Chief Justice of the High Court decided that i ‘ the benefits given to Isabella Christina Hill are in addition to her dower interest’’.

On this occasion the Court is asked these questions :

“1. Are the succession duties payable in respect of the dower interest of Isabella Christina Hill in the estate of Reginald Mark Hill payable out of the residue of the estate?

“2. If the answer to question 1 is ‘no’, then against whom or on what proportion of the estate of the deceased are the succession duties chargeable?’’

Involved in the answer to the first question is a consideration of the apparent intention of the testator when employing the words to be found in the clause of the will relating to the payment of succession duties. That clause has been quoted above. It is my opinion that on a review of the whole matter the testator did mean to have paid out of his estate all succession duties which might be incurred as a result of his death.

It was argued by Mr. McComiskey that the succession duty payable in respect of the widow’s dower interest expressly came within the words ‘‘benefit given by me . . . by survivorship’’, it being conceded by him that those particular duties would not be controlled by any other words to be found in the clause which I have quoted. On the other hand, Mr. Beatty contended that as the right to dower comes into enjoyment in the first place by operation of law only, and, secondly, not merely upon survivorship, succession duties payable with respect to the widow’s dower interest in this case were not included in the words used by the deceased.

In the first place, it might be well to consider what is involved when we speak of dower or dower interest. For many, many years the late Mr. Cameron’s Treatise on the Law of Dower, 1882, has been the authority on the subject in Ontario, and I turn to it at once. The learned author points out that at common law dower may be defined as ‘‘an estate for life to which a wife is entitled after the decease of her husband in the third part of every estate of inheritance of which her husband was solely seized, either in deed or in law, at any time during the coverture”. Such is the general effect of his statement to be found at page 4. He also mentions, however, on pages 6-7, that: “The wife’s enjoyment of her Dower cannot begin until the death of her husband; and even then, not until the portion of the estate to which she is entitled is allotted to her. During her husband’s lifetime, her right is said to be inchoate; upon his death, the right becomes consummate. After her Dower has been set apart, she becomes a tenant for life of the portion so set apart for her.’?

Bearing those principles in mind, I now turn to the relevant clause of the will. At first glance it will be seen that there is much to be said for Mr. Beatty’s contention that since the phrase “benefit given by me ... by survivorship’’ would be apt where a joint tenancy had been created, the words should be confined to that situation and should not be extended to include succession duties payable by reason of a right to dower. After giving the matter greater thought, however, I do not agree that the testator ought to be understood as intending such a result. In one sense it is true that a joint tenancy is a benefit given by either the donor or the transferor, but it seems to me that in the same broad sense a dower interest may be regarded as a benefit conferred upon the wife by the husband which comes into enjoyment, as does a joint tenancy, only upon the latter’s death. I appreciate that in some respects the phrase is more suitable to a joint tenancy, but that is not entirely so and it is difficult to conclude that the deceased did not intend to have his estate pay the succession duty on the right to dower. On the contrary, I believe that he did, in view of the other terms of the will. I am told that the succession duty in respect of this dower interest exceeds $6,000, and I cannot conceive a man with an estate in excess of $250,000 providing for his widow only to the extent of $500 a month for 6 months and $250 a month thereafter, and then superimposing upon her the obligation to pay or have charged against her dower interest a sum of such considerable size. It is true that the amount could perhaps be realized out of a sale of properties in the course of the administration of the estate, but I prefer to think that, looking at the nature and size of the estate and the provisions of the will, it is impossible to believe that the testator intended that his wife should be required to pay that amount of duty.

As a second branch of his argument Mr. Beatty urged that the right to dower is not within the part of the clause to which I have already made reference because survivorship alone does not produce enjoyment of the right. He argues that a dower interest does not arise immediately upon the death of the husband, but that there must, in addition, be an assignment of it to the widow, and, in support of his theory, he points to Sections 1 and 2 of the Dower Act, R.S.O. 1950, c. 109, and what is set forth at page 290 of Mr. Cameron’s book. Whatever may be the force of that argument in other respects, I do not think that it will bear the effect that Mr. Beatty seeks to give it, particularly where one finds the clause of the will concluding with the words ‘‘ whether such duties and taxes be payable in respect of estates or interests which fall into possession at my death or at any subsequent time’’. (The italics are mine.)

The right to dower is created immediately upon the death of the husband, and the mere fact that its enjoyment may be postponed until assignment, either voluntarily or by due process, does not, in my opinion, reduce the full effect of the clause under consideration. The judgments in Re Crites, [1946], 2 D.L.R. 210, O.W.N. 180; Re Reading, [1940] 1 D.L.R. 387, O.W.N. 9, and Re Schiff, [1949] C.T.C. 97, also suggest that these duties should be paid out of the residue of the estate.

The first question will accordingly be answered in the affirmative. All parties should have their taxed costs out of the estate, those of the executor as between solicitor and client.

Order accordingly.