Racz Estate (Re), 2013 ABQB 668

Court of Queen ’ s Bench of Alberta Citation: Racz Estate (Re), 2013 ABQB 668 Date: 20131115 Docket: ES06 13681 Registry: Lethbridge In the Matter of the Estate of Coleman Jack Racz (aka Racz, C. Jack) Between: Holly Tait Applicant - and - Kimberlee Westphal & Kara Lee Racz Defendants Corrected judgment: A corrigendum was issued on November 18, 2013; the corrections have been made to the text and the corrigendum is appended to this judgment. _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice M.

David Gates _________________________________________ ______________ Introduction [ 1 ] The Applicant, Holly Tait (“Ms. Tait”) seeks an order for the residue of Coleman Jack Racz’ (“Mr. Racz”) estate pursuant to the Dependent Relief Act, RSA 2000, c D-10.5 s 3 [the “ DRA” ] . She claims to have been Mr. Racz’ adult interdependent partner and that he did not make adequate provision for her maintenance and support under his will. [ 2 ] The residual beneficiaries under the will, Mr. Racz’ two daughters, were duly served with notice of the application. Ms.

Kimberlee Westphal attended and briefly made submissions to the court in favour of Ms. Tait’s application, but Ms. Kara Lee Racz did not attend or otherwise participate in the applications. Facts

[ 3 ] Ms. Tait and Mr. Racz began cohabiting in Ms. Tait’s home in Taber, Alberta in January of 2000. They remained together in that home for two years before purchasing a house jointly in Wrentham, Alberta in 2004. From May of 2004 until January of 2005 they separated. Beginning in January of 2005, Ms. Tait and Mr. Racz resumed their relationship, which lasted until Mr. Racz died on March 9, 2009 following a five year struggle with cancer. Ms. Tait maintained a residence in Lethbridge that she had purchased during the eight month period of separation, and Mr.

Racz kept the Wrentham property. [ 4 ] From January of 2005 onward, Ms. Tait spent a significant amount of her time caring for Mr. Racz. She drove him to his medical appointments in Lethbridge and in Calgary. Mr. Racz lived in Ms. Tait’s Lethbridge home in order for her to take care of him during her work day. When Mr. Racz was feeling well, he enjoyed relaxing in the Wrentham property. The Applicant reduced her time working as a Health Care Aide to four hours per day as Mr. Racz’ health further deteriorated. In the last five months of Mr. Racz’ life, he required constant care, which was mostly provided by Ms.

Tait. [ 5 ] Mr. Racz and Ms. Tait attended their respective family engagements together, holding themselves out to be spouses. The affidavit evidence of Kimberlee Westphal, one of Mr. Racz’s daughters, shows that she accepted Ms. Tait as her father’s “common law spouse”. Kimberlee Westphal further deposed that Ms. Tait cared for Mr. Racz on a daily basis and resided together with him. Mr. Racz’s older brother, Arthur Racz, indicated in his affidavit that to his knowledge Ms. Tait and his brother were “in a common law relationship” from 2002 until the time of death in 2009. [ 6 ] Ms.

Tait’s health declined as a result of Mr. Racz’ illness and eventual death. She developed carpel tunnel syndrome which was worsened by the heavy lifting that was required to care for Mr. Racz’ physical needs. Ms. Tait began to suffer from depression. She was contending with pre-existing medical conditions including hypertension, diabetes, neuropathy, chronic obstructive pulmonary disease, metabolic syndrome, and post-traumatic stress disorder. After Mr. Racz’ death, her health deteriorated further, resulting in her resignation from employment as a health care aide.

Severe depression ultimately required her to be hospitalized from April 29, 2011 to May 13, 2011. Ms. Tait continues to suffer from depression and is unable to work. [ 7 ] The Applicant receives $1,400 per month from AISH benefits and CPP pension benefits as the surviving interdependent partner of Mr. Racz. Her monthly expenses amount to $2,665.81, exceeding her income by about $1265. She has a $50,000 debt incurred while residing with Mr. Racz. Ms. Tait continues to own a house in Lethbridge which is subject to a $65,000 mortgage. She also has $20,000 in RRSPs. [ 8 ] Under the terms of Mr. Racz’s will, Ms.

Tait was given the greater of $5,000 or 3% of the estate. Based on the value of the estate, this gift amounted to $12,940.60. [ 9 ] $78,480.20 of the Deceased’s estate remains undistributed. Issues [ 10 ] Were Ms. Tait and Mr. Racz adult interdependent partners as defined in the Adult Interdependent Relationships Act , SA 2002, c A-4.5 at the time of Mr. Racz’s death? [ 11 ] If so, did Mr. Racz fail to make adequate provision for the proper maintenance and support of Ms.

Tait under his will, as required under the DRA ? [ 12 ] Probate was granted on May 12, 2009 giving rise to the six-month limitations period commencing under s 15(1) of the DRA . Would it be just for the court to order that the remaining undistributed portion of the estate be awarded to Ms. Tait, as permitted by s 15(2) of the DRA , notwithstanding the lapsed limitations period as of November 12, 2009? Disposition [ 13 ] I am satisfied that Ms. Tait and Mr. Racz were adult interdependent partners. I also find that Mr.

Racz did not make adequate provision for the proper maintenance and support of Holly Tait under his will. Pursuant to s 15(2) of the DRA , it would be just to allow Ms. Tait’s application made outside of the six-month limitations period and to award her the full amount of the remaining undistributed portion of the estate. The Law [ 14 ] The Adult Interdependent Relationships Act (the “ AIRA” ) provides:

Interpretation 1(1) In this Act, (f) “relationship of interdependence” means a relationship outside marriage in which any 2 persons (

i) share one another’s lives, (ii) are emotionally committed to one another, and (iii) function as an economic and domestic unit;

(2) In determining whether 2 persons function as an economic and domestic unit for the purposes of subsection (1)(f)(iii), all the circumstances of the relationship must be taken into account, including such of the following matters as may be relevant: (

a) whether or not the persons have a conjugal relationship; (

b) the degree of exclusivity of the relationship; (

c) the conduct and habits of the persons in respect of household activities and living arrangements; (

d) the degree to which the persons hold themselves out to others as an economic and domestic unit; (

e) the degree to which the persons formalize their legal obligations, intentions and responsibilities toward one another; (

f) the extent to which direct and indirect contributions have been made by either person to the other or to their mutual well- being; (

g) the degree of financial dependence or interdependence and any arrangements for financial support between the persons; (

h) the care and support of children; (

i) the ownership, use and acquisition of property. Adult interdependent partner 3(1) Subject to subsection (2), a person is the adult interdependent partner of another person if (

a) the person has lived with the other person in a relationship of interdependence (

i) for a continuous period of not less than 3 years, or Former adult interdependent partner 10(1) Unless another enactment provides otherwise, an adult interdependent partner becomes the former adult interdependent partner of another person when the earliest of the following occurs: (

b) the adult interdependent partners live separate and apart for more than one year and one or both of the adult interdependent partners intend that the adult interdependent relationship not continue; Onus of proof 11 A person who alleges in a court proceeding that the person is in or was in an adult interdependent relationship has the onus of proving the existence of the relationship. [ 15 ] The Alberta Evidence Act, RSA 2000, c A-18 s 11 [the “ AEA ”], requires materially corroborative evidence in the circumstances of this case: Evidence in action by heir, etc. 11 In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposed or interested party shall not obtain a verdict, judgment or decision on that party’s own evidence in respect of any matter occurring before the death of the deceased person, unless the evidence is corroborated by other material evidence. [ 16 ] The Dependants Relief Act states:

Definitions 1 In this Act, (d) “dependant” means (ii) the adult interdependent partner of the deceased, 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, [...] 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 indeciding the application, (

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

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

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 bythe deceased. Time for making application 15(1) Subject to subsection (2), no application may be made except within 6 months from the grant of probate of the will or ofadministration.

(2) A judge may, if the judge considers it just, allow an application to be made at any time as to anyportion of the estate remaining undistributed at the date of the application. Analysis Adult Interdependent Relationship [17] I find that Ms. Tait and Mr. Racz lived together in a relationship of interdependence for a continuous period in excess of 3years beginning in January of 2000. The required conditions of a “relationship of interdependence”, as set out in s 1(1)(

f) of the AIRA,are satisfied on the facts. Further, the 8-month period of separation in 2004 did not terminate the relationship of interdependence under s10 of the AIRA because it did not last for an entire year. Even if it had, a new adult interdependent relationship would have been createdafter the Applicant and the Deceased resumed their cohabitation in January of 2005. [18] Ms. Tait has the onus of proving the existence of the adult interdependent relationship on a balance of probabilities.

Further,her evidence must be corroborated by other evidence to satisfy s 11 of the AEA: Rogers v Bogi Estate, 2012 ABQB 253 at para 50,[2012] AJ No 416 [Bogi Estate]; Kiernan v Stach Estate, 2009 ABQB 150 at para 41, [2009] AJ No 243 [Stach Estate]. [19] In Stach Estate, at para 42, Justice Yamauchi describes the holistic approach a court should take when discerning arelationship of interdependence: Although this Court will review the factors outlined in the AIRA, the better approach for a case such as this is to look at the facts aswhole; no one factor will carry more weight than another.

AIRA tells us this when it says "all the circumstances of the relationship mustbe taken into account." [20] In this case, it is clear that both individuals shared in one another’s lives. This is evidenced by the daily contact betweenthem. They were emotionally committed to one another. Ms. Tait demonstrated this by stoically caring for Mr. Racz throughout hisillness, up until the time of his death. When it became necessary, she substantially reduced her time spent working in order to care forhim. Although they maintained two houses, they functioned as an economic and domestic unit.

Financial obligations were shared, asshown by a joint bank account that was used to pay expenses. Both individuals named the other as dependants on their employmentbenefits plans, and they purchased insurance jointly. Ms. Tait and Mr. Racz held themselves out to others as a unit. Ms. Westphal’s andArthur Racz’ affidavits make it clear that this was the case. These affidavits show that Ms. Tait and Mr. Racz had a relationship that wasvisible to the public and that others perceived them to be “common law spouses”. [21] The evidence in Ms. Westphal’s affidavit corroborates Ms. Tait’s claim that she cared for Mr.

Racz on a daily basis, and thatthey lived together throughout the duration of his illness. Arthur Racz’ affidavit corroborates the claim that Ms. Tait was in a “commonlaw relationship” with Mr. Racz from at least 2002. Together these affidavits constitute material corroborative evidence as required bythe AEA. Adequate Provision under Will [22] Section 3(1)(

a) of the DRA gives this court wide discretion to grant provision to a dependant of a deceased, where adequateprovision for proper maintenance was not made under the deceased’s will. As the adult interdependent partner of Mr. Racz, Ms. Tait is a‘dependant’, as defined in s 1(d)(ii) of the DRA. [23] The phrase ‘adequate provision’ has been considered by the Supreme Court of Canada in Tataryn v Tataryn, (SCC), [1994] 2 SCR 807, [1994] SCJ No 65.

In this case, the court determined that where the enabling legislation confers a broaddiscretion on the court, the legislature desired to “craft a formula which would permit the courts to make orders which are just in thespecific circumstances and in light of contemporary standards” (at para 15). “Courts are not bound by the views and awards made inearlier times.” The Court further held: 28. If the phrase "adequate, just and equitable" is viewed in light of current societal norms, much of the uncertainty disappears.Furthermore, two sorts of norms are available and both must be addressed.

The first are the obligations which the law would impose on a

person during his or her life were the question of provision for the claimant to arise. These might be described as legal obligations. Thesecond type of norms are found in society's reasonable expectations of what a judicious person would do in the circumstances, byreference to contemporary community standards. These might be called moral obligations, following the language traditionally used bythe courts.

Together, these two norms provide a guide to what is "adequate, just and equitable" in the circumstances of the case. [24] This legal test set out in Tataryn requires the court to consider the legal and moral obligations of Mr. Racz towards his adultinterdependent partner. A review of the Deceased’s moral obligations is sufficient to dispose of the case at bar. It was not argued beforeme, and is not necessary to determine what legal obligations he would have owed to Ms. Tait while he was alive.

I note in passinghowever, that a claim for constructive trust flowing from unjust enrichment might have been brought while Mr. Racz was alive. [25] Significant moral obligations do arise. Society would reasonably expect that after spending close to 9 years with Mr. Racz,including 5 years of intensive personal care, Ms. Tait would be entitled to a substantial share of the estate.

Contemporary communitystandards would not tolerate the prospect of an adult interdependent partner being left in severe financial distress after devoting anabundance of time and energy towards her partner during his final illness in circumstances when the estate can provide some relief. McLachlin J, as she then was, writing for a unanimous court in Tataryn addresses this point. She recognizes that moral obligations “areadmittedly more susceptible of being viewed differently by different people” (at para 31).

However, she also states that “most peoplewould agree that although the law may not require a supporting spouse to make provision for a dependent spouse after his death, a strongmoral obligation to do so exists if the size of the estate permits”. [26] Ms. Tait received 3%, or $12,940.60 of the estate under the terms of Mr. Racz’s will. In my view, this does not satisfy themoral obligation to make adequate provision for his adult interdependent partner. It would be appropriate to direct that the remainingundistributed proceeds of the estate, totalling $78,480.20, be paid to Ms. Tait.

Time for Making Application under Dependent Relief Act [27] The limitations period set out in s 15(1) of the DRA is a threshold issue that must be dealt with to allow Ms. Tait’sapplication. To award an amount of the remaining estate to Ms. Tait, I must consider such an order to be “just”, in accordance with s15(2) of the DRA. [28] Dickson J in Gilles v Gilles Estate, (SCC), [1976] 1 SCR 353, makes it clear that s 15(2) of the DRA allowsfor a claim to be made only against the portion of the estate remaining undistributed after the six month period following probate haselapsed. Ms.

Tait adheres to this rule, claiming only against the remaining undistributed funds of the estate. [29] One way of applying s 15(2) of the DRA would be to first determine whether any portion of the estate remains undistributed,and then to simply consider the strength of the adult interdependent partner’s claim for relief. This court has taken that approach in ReGES, 2003 ABQB 674 at para 15. In Re GES, the spouse made an application almost a year after probate was granted, but before theestate was distributed.

Lee J concluded that although the application was “not a timely one, on the merits…the surviving widowneed[ed] a greater share of the estate” (ibid). In the case at bar, this approach would not be appropriate. It would be contrary to thelegislative scheme to collapse the analysis for determining whether adequate provision had been made under the will, with the inquiry asto whether an award of remaining estate funds is just. [30] That being said, elements of the two inquiries may be similar.

Belzil J noted that the “wording of s 15(2) is expansive” anddetermined that it would be “just” to allow an application with regard to all the circumstances: Re Tomich Estate, 2010 ABQB 63 atpara 14, [2010] AJ No 89. [31] In her supplemental brief, Ms. Tait points out in para 1(

E) that she did not receive formal DRA notice when the Deceased’swill was being probated. I note that this notice would have been given in a circular fashion, from Ms. Tait who made the application forprobate, to herself as an adult interdependent partner under the Surrogate Rules, Alta Reg 130/1995. This does not however, serve toundermine the thrust of her argument, namely that she was not aware of her claim as an adult interdependent partner at the time of theapplication for probate.

I accept that her severe and debilitating depression at that time prevented her from recognizing or understandingher claim for a greater share of the estate. This is one very important factor that leads me to find it is just to allow Ms. Tait to make a lateapplication. [32] Ms. Tait was left with a debt of $50,000 which she incurred while taking care of the Deceased during his illness and in theaftermath during her own illness. Juxtaposing this debt with the small amount of about $13,000 that Mr. Racz bequeathed to her underhis will, demonstrates the strength of Ms. Tait’s claim for relief.

Lenience with the time limitation is fitting, having regard to theinadequate nature of Mr. Racz’s provision for his adult interdependent partner. [33] In light of all the circumstances, I find that it would be “just” to allow this late application. Conclusion [34] Having found that Ms. Tait was in a relationship of interdependence with Mr. Racz, that Mr. Racz failed to leave adequateprovision under his will for Ms. Tait, and that it would be just to allow a late application, I order that the estate transfer the remainingundistributed amount of $78,480.20 to Ms. Tait. Heard on the 20th day of August, 2013.

Dated at the City of Edmonton, Alberta this 12 th day of November, 2013. M. David Gates J.C.Q.B.A. Appearances: Beverly A. Thomson Pollock & Company for the Applicant Kimberlee Westphal Appeared on her own behalf for the Defendants James R. Farrington Krushel Farrington for the Estate _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice M. David Gates _______________________________________________________ Citation name has been corrected.