Re Valin, [1949] CTC 126

TRELEAVEN, J.:—The testator left an estate which was valued for succession duty purposes at the sum of $74,495.75. Of this amount the value of the bequests to the widow total $59,512.55, leaving the remainder (after deducting the $200 for masses, as provided in the will) of $14,783.20 for the said George J. Valin.

It was strongly urged on behalf of the widow, Beatrice Valin, that by clause (a) of para. 5 the testator intended that the income tax on the $200 annuity left to his wife should be paid by the executors out of the residue of the estate, and in support thereof reference was made particularly to Re Wood, [1943] O.R. 278, [1943] 3 D.L.R. 84, [1943] C.T.C. 199, and Re Kemp, [1939] O.R. 245, [1939] 2 D.L.R. 338, varied, [1940-41] C.T.C. 48, [1940] S.C.R. 353, [1940] 2 D.L.R. 209, [1940-41] C.T.C. 53.

With regard to these cases, however, it has been necessary to keep in mind the expression used by Lord Brougham in Baker v. Baker (1858), 6 H.L. Cas. 616 at 626-7:

" " It has been very justly observed, in regard to cases like this, where the sole question that arises is upon the construction of a will, and where the object is to ascertain the meaning of the words used by the testator, that nothing, generally speaking, can be more unfruitful than a reference to other cases where, instead of the question arising upon a principle of law, or a rule of law, the whole question arose upon the meaning of the words employed in the will; and the least difference between the case at the bar and the case cited, will make all the difference in the world, and render the application of the case cited utterly useless.’’

There is not in the present case the clear expression of intention with regard to income tax that there was in the cases cited, and I am unable to conclude from the wording of the will itself that it was the intention of the testator that the estate should pay the income tax on the annuity so given to the widow, Beatrice Valin. The words would seem to me clearly to convey the intention that once the executors had paid to the widow $200 each month free of succession duties, taxes, and all other levies of a similar nature, they had complied with the terms of the bequest and the responsibility for the income tax on the said sum so received by the widow is her responsibility and liability. The answer to the first question will therefore be ‘‘No’’.

As the second question is conditioned on the answer to the first question being "‘Yes,” no answer is necessary. If, however, the correct answer to the first question had been "‘Yes,’’ there would have been no difficulty about the answer to the second question, as the formula is very clearly set out both in Re Kemp and in Re Wood above referred to and is stated as follows by Hope, J., in Re Wood at p. 287: the executors should pay such proportion of all income taxes payable by the said widow as the amount of the annuity and income tax paid in each year in respect thereof bears to the total amount of the widow’s income from all sources.’’

The difficulty raised by question 3 would seem to be peculiar to this case, and in argument counsel agreed that the question does not appear to have been specifically dealt with in any reported cases, and I have been unable to find any.

The testator made it clear that the annuity of $200 a month was to be free of succession duty. The value of that annuity, based on the life expectancy of the widow, was $41,267.40. The value of the other gifts to the widow was $18,245.15. The Dominion Succession Duty Act, however, (1940-1), 4-5 Geo. VI,

3. 14, s. 7, exempts from duty, where the successor is the widow of the deceased, the value of the property up to the amount of $20,000. The question is whether the widow is entitled to the exemption given her by the statute as well as to have the annuity free from succession duty.

It seems to me that the exemption given by the statute is an exemption which is given for the benefit of the widow, and I do not see why the benefit of that exemption should be taken from her because her husband, in making additional provision for her, has made that provision free from succession duties. As the widow only received, under the will, the sum of $18,245.15 over and above the amount given to her as free from succession duty by her husband, it follows that with the exemption of $20,000 given to her by the statute, there is no succession duty payable by her and the answer to the question will be: "‘The executors are bound to pay all of the succession duties under the Dominion Succession Duty Act.’’

Beatrice Valin is entitled to her costs out of the estate; George J. Valin is also entitled to his if demanded.

Order accordingly.