Court of Queen ’ s Bench of Alberta Citation: Ponich Estate (Re), 2011 ABQB 33 Date: 20110303 Docket: ES03 120819 Registry: Edmonton Court File Number ES03 120819 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Edmonton Estate Name Estate of Leonard Victor Michael Ponich, also known as Ponich, Leonard Applicant (Plaintiff) Nicholas Matthew Ponich Respondent (Defendant) Michelle Shivon Ponich, Personal Representative of the Estate of Leonard Victor Michael Ponich, also known as Ponich, Leonard, Rosalind Margaret Ponich Mosychuk, as Trustee for the Ponich Family Trust, Rosalind Margaret Ponich Mosychuk as Trustee for the Estate of T.R., Dependent Adult, and T.R. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B.

Veit _______________________________________________________

Summary

[ 1 ] Matthew Ponich, an adult child of the late Leonard Ponich who was excluded from his father’s will, has established that, because of mental illness, he is from time to time unable to maintain employment; he therefore satisfies the definition of “dependant” within the meaning of the Dependants Relief Act . [ 2 ] Should the next step in the proceedings be, as Matthew Ponich proposes, the quantification of his claim against his late father’s estate, or, as the executrix and the beneficiaries under the will propose, a trial of the issue of whether a judge will exercise judicial discretion to overturn Leonard Ponich`s will and order that a payment be made from the estate to Matthew Ponich. [ 3 ] In the circumstances here, the next step must be for a court to decide Matthew Ponich`s claim to entitlement from his father`s estate. [ 4 ] Matthew Ponich wrongly equates his status as a “dependant” within the meaning of the statute with entitlement to a share of his late father’s estate: under Alberta law, dependency is merely a necessary pre-requisite to a judge’s determination to alter a will.

Not every “dependant” who has been left out of a will is automatically entitled to a payment from the deceased`s estate. [ 5 ] Because the existing evidence relating to the issue of entitlement is contradictory and incomplete, a decision about possible alteration of the will cannot be made on the basis of the evidence filed; a trial of that issue must be held. [ 6 ] The real question for the court’s consideration at this time is, therefore, whether the issues of the exercise of discretion to award entitlement, on the one hand, and the quantification of the claim if discretion is exercised in Matthew Ponich’s favour, on the other, should be dealt with in one trial, or whether the two issues should be dealt with serially. [ 7 ] Matthew Ponich`s position on that issue is, as set out above, that the court should now direct a trial of the quantification issue. [ 8 ] The executrix of Leonard Ponich’s estate and the beneficiaries under Leonard Ponich’s will propose severance on two grounds - efficiency and privacy. [ 9 ] In concluding that severance is permissible, possible and preferred to the combination of the two issues, the court has taken the following into account: - New Rule 7.1 is considerably broader in scope than the Rules it replaces and explicitly authorizes the granting of orders designed either to dispose of part of a claim or to save expense; - the new foundational rules in the Rules of Court require a court to consider how trials can be heard as expeditiously as possible; - in the circumstances here, because the size of the estate is known within general limits, the issue of entitlement is completely severable from the quantification of the entitlement; - a determination of entitlement could end the lawsuit if it is determined one way; - a staging of the issues will save time and money; - no injustice will be suffered by any of the parties by reason of the severance of the issues;

- a determination of entitlement is relatively complex and difficult and merits separate attention; - severance will not result in the delay of a trial, since the issue of entitlement - which must be dealt with in a trial will be dealtwith first; - given the need to weigh the principle of testamentary autonomy and the deceased`s clear wish to exclude his son from estatebenefits on the one hand and the claim of the deceased`s adult son which was not advanced during the deceased’s lifetime on the other,the fairest way to protect the privacy of the estate without causing any harm to the son`s claim is to delay disclosure to the son of thefinancial affairs of the estate until the son has obtained a judicial determination that the deceased`s express wishes must be overturned.

Cases and authority cited [10] By the applicant, Nicholas Matthew Ponich: Dependants Relief Act, R.S.A. 2000, c.D-10.5; Re Ponich, (AB KB), [1996] 2 W.W.R. 523 (Alta. Q.B.); Re Ponich, 1996 CarswellAlta 1199 (Alta. Q.B.); Re Ponich (Estate of), 2007ABQB 478 (Alta. Q.B.); Re Ponich (Estate of), 2007 ABQB 545 (Alta. Q.B.); Re Ponich (Estate of), 2007 ABQB 478 (Alta. Q.B.) RePonich (Estate of), 2008 ABQB 613 (Alta. Q.B.); Tataryn v. Tataryn Estate, (SCC), [1994] 7 W.W.R. 609, [1994] 2S.C.R. 807 (S.C.C.); Rizzo & Rizzo Shoes Ltd (Re), (SCC), [1998] 1 S.C.R. 27 (S.C.C.); Petrowski v.

PetrowskiEstate, 2009 ABQB 196 (Alta. Q.B.); Re Joan Iris Lacavera Estate, (January 25, 2005), unreported, Action No, ES03 117175, (Alta, Q.B.); Stayko v. Stayko, [2002] A.J. No. 1404 (Alta. Q.B.); B.A. Garner, ed., Black's Law Dictionary, 7th Edition (St. Paul, MN: WestGroup, 1999); Re Clark (Bankrupt) (1998), 1998 ABQB 459 , 215 A.R. 387 (Alta. Q.B.); Boje v. Boje, [2002] A.J. No. 122(Alta. Q.B.); Boje v. Boje, 2005 ABCA 73 (Alta. C.A.); Carter v. Alberta Conference Corp. of the Seventh Day Adventists Church,[1998] A.J. No. 1479 (Alta. Q.B.); Villani v.

Canada (Attorney General) (2001), 2001 FCA 248 , 2001 CarswellNat 1611, 205 D.L.R. (4th) 58 (Fed. C.A.); Nicholas v. Metropolitan Life Insurance Co. of Canada, [2003] B.C.J. No. 734 (B.C.S.C.); McRae v. Dodge City Auto

(1984) Ltd.,[1994] S.J. No. 342 (Sask. Q.B.); Re McMaster Estate (1957), (AB KB), 21 W.W.R. 603 (Alta. T.D.); Stang v.Stang Estate, 1998 ABQB 113 , [1998] 7 W.W.R. 551 (Alta. Q.B.); Re Protopappas Estate,

(1987) A.J. No. 160 (Alta. Q.B.);Siegal v. Siegal Estate (1995), (AB KB), 177 A.R. 282, [1995] A.J. No. 1158 (Alta. Q.B.); Broen Estate (Re),[2002] A.J. No. 1126 (Alta. Q.B.); Bidlock Estate (Public Trustee of) v. Vos, [2003] A.J. No. 1098 (Alta. Q.B.); E.A.H. (DependentAdult) (Re), [2005] A.J. No. 1165 (Alta. Q.B.); Stone (Public Trustee of) v. Stone Estate, (AB KB), [1994] 8W.W.R. 5 (Alta. Q.B.), varied 1997 ABCA 380 , [1998] 3 W.W.R. 598 (Alta. C.A.); Peterson v. Peterson, [1997] A.J. No.1279 (Alta. Q.B.); P. T. v. R.B., 2001 ABQB 739 , [2001] A.J. No. 1113 (Alta. Q.B.); Welsh v.

Welsh, 1998 CarswellOnt4338 (Ont. C.J. Gen. Div); Pauliuk v. Pauliuk Estate, [1986] A.J. No. 936 (Alta. Q.B.); Dupere (Next Friend of) v. Spinelli Estate(1998), 1998 ABQB 966 , 1998 CarswellAlta 1077, 229 A.R. 137 (Alta. Surr. Ct.); McCaw v. McCaw, [1983] S.J. No. 908(Sask. Surr. Ct.); Harvey, Cameron and Linda Vincent, “The Law of Dependants’ Relief in Canada”, Second Edition, ThomsonCarswell at pp. 119-129,136-141; Pontifical Society for the Propagation of Faith v. Scales (1962), 107 C.L.R. 9 (H.C. Aust.); Parkanski v. Noga, [1966] S.J. No. 57, (1966), (SK KB), 56 D.L.R. (2d) 475 (Sask. Q.B.); Dukta v.

Dukta, [1980]M.J. No. 66 (Man. Q.B.); Price v. Lypchuk Estate, (BC CA), [1987] B.C.J. No. 442, [1987] 4 W.W.R. 128(B.C.C.A); Kinsella Estate, [2004] A.J. No. 1021 (Alta. Q.B.); Plut v. Plut Estate, (BC CA), [1991] B.C.J. No. 942(B.C.C.A.); Patterson v. Lauritsen, [1984] B.C.J. No. 2733 (B.C.S.C); Lacavera v Stevenson, oral reasons for judgment issued onJanuary 25, 2005 in Aon No. ES03 117175.. [11] By the court: On whether the New Rule relating to severance should be interpreted differently than the previous Rule:Envision Edmonton Opportunities Society v.

Edmonton (City), 2011 ABQB 29 [12] On the responsibility of the state for adult children: Krangle (Guardian ad litem of) v Brisco 2002 SCC 9, [2002] 1 S.C.R.205; Lougheed v Lougheed 2007 BCCA 396, [2007] B.C.J. No. 1648; Bovington v Hergott 2008 ONCA 2, [2008] O.J. No. 11; [13] On the discovery of documents: Bitter v Bell 2011 ABCA 16 1. Background

a) Factual [ 14 ] Matthew Ponich is the 42 year old, schizophrenic, son of the deceased who makes a claim under the Dependants Relief Act against his late father’s estate because his father made no provision for him in his will. [ 15 ] Matthew Ponich’s mental health prevents him, from time to time, from obtaining and retaining employment. At this stage of the proceedings, there is a difference in expert opinion about the effect of marijuana consumption on Matthew Ponich’s mental health and capacity for employment. [ 16 ] After Matthew Ponich reached adulthood, his late father did not support him.

While his father was alive and while Matthew Ponich was an adult suffering from dependancy, Matthew Ponich did not sue his father for support based on dependency. [ 17 ] Leonard Ponich has a daughter who was born with Down syndrome. During his lifetime, Leonard Ponich always supported his dependant daughter, and has provided for her in his will. [ 18 ] At the time of probate, Leonard Ponich’s personal representative swore that the estate was worth in the neighbourhood of $600,000.00.

b) Legislative [ 19 ] Matthew Ponich invokes the following provisions of the Dependants Relief Act (formerly Family Relief Act ):

Definitions 1 In this Act, . . . (d) “dependant” means . . . (iv) a child of the deceased who is 18 years of age or over at the time of the deceased’s death and unable by reason of mental or physical disability to earn a livelihood; . . . RSA 2000 cF-5 s2;2002 cA-4.5 s35 Order for maintenance support 3(1) If a person (

a) dies testate without making in the person’s will adequate provision for the proper maintenance and support of the person’s dependants or any of them, or

. . . a judge, on application by or on behalf of the dependants or any of them, may in the judge’s discretion, notwithstanding the provisions of the will or the Intestate Succession Act, order that any provision that the judge considers adequate be made out of the estate of the deceased for the proper maintenance and support of the dependants or any of them.

(2) The judge on the hearing of the application (

a) may inquire into and consider all matters that the judge considers should be fairly taken into account in deciding the application, (

b) may in addition to the evidence adduced by the parties appearing direct any other evidence to be given that the judge considers necessary or proper, and (

c) may accept any evidence that the judge considers proper of the deceased’s reasons, so far as ascertainable, (

i) for making the dispositions made by the deceased’s will, or (ii) for not making adequate provision for a dependant, including any statement in writing signed by the deceased.

(3) In estimating the weight to be given to a statement referred to in subsection (2)(c), the judge shall have regard to all the circumstances from which any inference can reasonably be drawn as to the accuracy or otherwise of the statement.

(4) The judge may make a suspensory order suspending in whole or in part the administration of the deceased’s estate so that an application may be made for an order making specific provision for maintenance and support.

(5) The judge may refuse to make an order in favour of any dependant whose character or conduct is such as in the opinion of the judge disentitles the dependant to the benefit of an order under this Act.

(6) When a testator dies intestate as to part of the testator’s estate, the judge may make an order affecting either the part of the estate as to which the testator died testate or the part as to which the testator died intestate or as to both parts. RSA 1980 cF-2 s3 [ 20 ] The respondents invoke New Rule 7.1, which replaces Rules 220-224, 232, 335-336, as the basis on which the court could, and should, sever the issue of entitlement from the issue of quantification. That Rule reads as follows:

Part 7: Resolving Claims Without Full Trial DIVISION 1 TRIAL OF PARTICULAR QUESTIONS OR ISSUES

Application to resolve particular questions or issues 7.1(1) On application, the Court may (

a) order a question or an issue to be heard or tried before, at or after a trial for the purpose of (

i) disposing of all or part of a claim, (ii) substantially shortening a trial, or (iii) saving expense, (

b) in the order or in a subsequent order (

i) define the question or issue, or (ii) in the case of a question of law, approve or modify the issue agreed by the parties, (

c) stay any other application or proceeding until the question or issue has been decided, or (

d) direct that different questions of fact in an action be tried by different modes.

(2) If the question is a question of law, the parties may agree (

a) on the question of law for the Court to decide, (

b) on the remedy resulting from the Court's opinion on the question of law, or (

c) on the facts or that the facts are not in issue.

(3) If the Court is satisfied that its determination of a question or issue substantially disposes of a claim or makes the trial of the issue unnecessary, it may (

a) strike out a claim or order a commencement document or pleading to be amended, (

b) give judgment on all or part of a claim and make any order it considers necessary, (

c) make a determination on a question of law, or

(

d) make a finding of fact.

(4) Part 5 [Disclosure of Information] Division 2 [Experts and Expert Reports] applies to an application under this rule unless the parties otherwise agree or the Court otherwise orders. 2. Although Matthew Ponich is a “dependant” within the meaning of the Act, he is not automatically entitled to share in his father’s estate [ 21 ] Matthew Ponich erroneously takes the position that he is “entitled to make a claim and at issue only is the quantum of the award”. [ 22 ] Although the Legislature could, of course, have established a law which set up a system as described by Matthew Ponich, it has not done so.

Instead, the Dependants Relief Act sets out a legislative system which allows a court, but does not require a court, to over-ride testamentary autonomy. 3.

What matters can be taken into account in determining whether the needs of a “dependant” over-ride the provisions of a will? [ 23 ] Determining whether a testator’s will should be over-ridden in order to provide for a “dependant” of the testator involves consideration of many factors. [ 24 ] The first group of factors which a court must consider are matters of legal principle, including: - the considerations addressed in Tataryn : weighing testamentary autonomy - which is the long established common law position that, just as the owner of property can freely dispose of it during her lifetime, so she can freely dispose of it in a will - against legislative objectives - which in the case of the Alberta Dependants Relief Act is the objective of providing “adequate provision . . . for the proper maintenance and support of the [deceased’s] dependants . . . . [except where] in the opinion of the judge . . . the dependant [is disentitled] to the benefit of an order under this Act”. (Emphasis added) - the effect of social policy which, in some situations, makes the State, rather than parents, responsible for adult dependants: Brisco, Lougheed , Bovington ; - the legal and moral obligations of the testator; and, - whether there is a difference in the responsibility for adult dependants between parents who are married and parents who are divorced. [ 25 ] The second group of factors are factual determinations relating to the above-noted legal principles, including perhaps such matters as: - the reasons why a testator did not include a dependant in his will;

- the cost of caring for the testator’s other dependants; - the relationship of the dependant to the testator from the time the dependant reached adulthood; - if the status of divorced parents is a factor, perhaps the nature, extent and quality of Matthew Ponich’s mother’s support of her adult child; - the nature of the dependancy, for example, if the dependant contributes to her own dependancy. [ 26 ] Can these factors be weighed without a trial? 4.

A determination of Matthew Ponich’s potential entitlement to set aside his father’s will cannot be made without a trial [ 27 ] In the circumstances here, it is not possible to determine Matthew Ponich’s entitlement to share in his father’s estate without a trial. [ 28 ] In coming to that conclusion, I have taken the following into account: - there is a total absence of absence of evidence on the reasons why the testator excluded his son from his will; - there is contradictory evidence about Matthew Ponich’s contribution to his dependency. [ 29 ] A trial process is required to allow the parties to submit evidence on the issue of the exclusion of Matthew Ponich from his father’s will and to have an opportunity of dealing with the characterization of Matthew Ponich’s dependency.

This is not a situation like Lacavera where the judge stated that “there is adequate evidence that has been entered in this matter to allow me to make this decision”. Also in that case there had been no independent evidence of capacity and “no suggestion that [the respondent] has anything else to offer that we do not actually have before us today”. That is an entirely different situation from the one which applies here. [ 30 ] Should the trial combine the issues of entitlement and quantification, or should those issues be severed? 5.

Can, and should, the issues of entitlement and quantification be severed? [ 31 ] The court concludes that it has jurisdiction under the Rules to sever the issues of entitlement and quantification. [ 32 ] In coming to that conclusion, the court has taken into account that New Rule 7.1 is considerably broader in scope than the Rules it replaces and explicitly authorizes the granting of orders designed either to dispose of part of a claim or to save expense.

Moreover, New Rule 7.1 must be interpreted in light of the foundational rules, which themselves encourage adoption of processes that will allow fair trials to be held more quickly and more cheaply: Envision Edmonton Opportunities Society . Indeed, in Lacavera itself, there is reference to the fact that there is a “public policy interest in having the matters resolved as quickly as possible, and at the lowest legal cost.

That, no doubt, was in the mind of the Legislature when they set out the procedure under the Act”. [ 33 ] In any event, however, severance of the issues of entitlement and quantification would have been permissible under the old

rules because: - the size of the estate is known within general limits, and therefore the issue of entitlement is completely severable from the quantification of the entitlement. One of the factors which a court must take into account in making a determination of the type called for here is whether the estate can support the claim made against it.

Here, the fact that the estate totals approximately $600,000.00, that the legal process in relation to the estate has already been extensive and costly, and that the testator’s intention was to provide for the care of another dependant child for whom he had always taken responsibility, provide a sufficient background to allow a judge to make a determination of Matthew Ponich’s claim without going into detail about the estate ; - a determination of entitlement could end the lawsuit if it is determined one way.

Obviously, if a court concludes that Matthew Ponich is disentitled from sharing in his late father’s estate, that will end the matter; - a staging of the issues will save this relatively small estate and all of the parties time and money. The estate is relatively small, especially given the claims that are made against it. Matthew Ponich asserts that he has no means. The burden of the litigation will therefore fall on the estate; - no injustice will be suffered by any of the parties by reason of the severance of the issues.

As indicated above, sufficient basic information is already known about the estate to allow a court to make a fair decision on the issue of entitlement; - a determination of entitlement is relatively complex and difficult and merits separate attention. Case law on the entitlement issue is sparse; moreover, relatively little is known at this stage about the factual matrix that could be taken into account in determining if the testator’s wish in not including his son in his will should be respected.

Those issues are sufficient for one trial process; - severance will not result in the delay of a trial, since the issue of entitlement - which must be dealt with in a trial will be dealt with first in any event; [ 34 ] Finally, the court observes that privacy concerns arise in the circumstances here. This is not the usual type of family lawsuit: Matthew Ponich did not bring his claim of dependancy while his father was alive even though the dependancy apparently existed while his father was alive; during his adulthood, privacy existed between Matthew Ponich and his father.

Therefore, in my view, the principles recently enunciated by our Court of Appeal in Bitter have no application to the facts of this case. In any event, in that case the court emphasized that the mere filing of a claim would not entitle a person to discovery; here, on the issue of entitlement, Matthew Ponich has merely asserted his claim rather than meeting an evidentiary threshold to establish that he has not become disentitled to claim against his father’s estate.

The facts in Bitter were that even the party who contested the interdependency acknowledged that he had lived with the other party for many years and that he had even gifted the other party with some valuable assets. Where two persons live together for a considerable period of time, it is clearly not unfair that there should be disclosure of financial information after a minimal evidentiary threshold has been met. Here, Matthew Ponich has not yet provided a minimum evidentiary threshold that he has not become disentitled to the benefit of an order under this Act.

Finally, it is to be noted that, in Bitter , there was no consideration by the chambers judge of the severance of the issues of entitlement and quantification; had there been such an order, and had the order been upheld, it seems clear that the Court of Appeal would also have allowed a staged disclosure of information. [ 35 ] In

summary, the court concludes that severance of the two issues that require a trial is permissible, possible and preferred to the combination of those issues. 6. Should the determination be by way of binding JDR or by way of trial? [ 36 ] Matthew Ponich prefers a trial process to binding JDR; he undoubtedly has good reasons for that preference, including the ability to appeal the decision of a trial judge. It would not be appropriate to deprive a litigant of that basic right. I note that, depending on what can be achieved in the pre-trial process, there remains the possibility of a

summary trial which would be the cheapest way of achieving a fair adjudication. 7. Costs of this application

[ 37 ] If the parties are not agreed on costs for this application, I can be spoken to within 30 days of the release of this decision. Heard on the 15 th day of December, 2010, the 26 th and 31 st days of January, and the 1 st day of February, 2011. Dated at the City of Edmonton, Alberta this 2 nd day of March, 2011. J.B. Veit J.C.Q.B.A. Appearances: Joseph Schuck (Brownlee LLP) for Nicholas Matthew Ponich Shelly K.

Chamaschuk (Reynolds Mirth) for Michelle Ponich as Executor of the Estate of Leonard Victor Michael Ponich Sylvia Tensfeldt (Attia Reeves) for Rosalind Mosychuk as Trustee for the Ponich Family Trust and for the Estate of Tanya Rosalind Ponich, Dependant Adult. Michelle Reeves (Attia Reeves) for Michelle Shivon Ponich as Beneficiary of the Estate of Leonard Victor Michael Ponich