THE ESTATE OF DAVID DAUGHARTY as represented by his Executrix CAROL MARIE JOHNSTON v. CAROL MARIE JOHNSTON, 2012 NBQB 308

2012 NBQB 308 Court File: FDF-503-06 IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK FAMILY DIVISON JUDICIAL DISTRICT OF FREDERICTON BETWEEN: THE ESTATE OF DAVID DAUGHARTY as represented by his Executrix CAROL MARIE JOHNSTON and CAROL MARIE JOHNSTON APPLICANTS, - and- SUSAN CHRISTINE DAUGHARTY (WADE) RESPONDENT. Date of Hearing: June 4, 2012 Date of Decision: September 21, 2012 Before: Madam Justice Anne D. Wooder Representation of parties at hearing: Allen Miles, Esq., Solicitor for the Applicants Jennifer Donovan, Esqe., Solicitor for the Respondent I.

INTRODUCTION: (1.) Susan Daugharty, now Susan Wade, and David Daugharty married on May 25, 1973 and separated on April 1, 1996. With the assistance of independent and experienced counsel, a Domestic Contract was negotiated and finalized. It is dated December 20, 1996. It was never amended. (2.) Shortly after Mr. Daugharty and Ms. Wade separated, Mr. Daugharty began living with Carol Johnston. They remained together until Mr. Daugharty’s death on January 3, 2005, a period of almost nine years. (3.) Susan Wade and David Daugharty never divorced. (4.) Mr.

Daugharty was employed as a professor at the University of New Brunswick at the time of his death. He was a

member of two pension plans: the New Brunswick Public Service Superannuation Plan (the “PSSA Plan”), and the University of New Brunswick Academic Employees’ Pension Plan (the “UNB Plan”). The UNB Plan was established in January 1993 to provide defined pension benefits for eligible employees of the University. Prior to that date, those employees were covered by the Public Service Superannuation Act , R.S.N.B. 1983, c.

P-26, and benefits for service prior to January 1, 1993 continued to be provided by that legislation.¹ The University of New Brunswick Plan was thereafter governed by the Pension Benefits Act , S.N.B. 1987, c. P-5.1. ¹Annual Report of the Pension Board of Trustees to The Association of University of New Brunswick Teachers for the two years ended December 31, 2009. (5.) Following Mr. Daugharty’s death, Ms. Wade applied to both pension plans for the surviving spouse’s pension, a benefit provided by each of the governing statutes.

Her applications were granted and she has been receiving monthly payments from both plans since June 2005 (with retroactive payments to the date of Mr. Daugharty’s death). (6.) Applications by Ms. Johnston for those same benefits were denied. (7.) By this application, Ms. Johnston, as executrix of Mr. Daugharty’s estate and in her personal capacity, asks for a variety of relief that would result in her receiving at least a portion of the benefits paid, and being paid, to Ms. Wade. II. RELIEF CLAIMED IN THE PLEADINGS: (8.) The Notice of Application filed on November 20, 2006 claimed the following relief: “1.

The Domestic Contract dated December 20, 1996 be enforced to divide the Province of New Brunswick and University of New Brunswick Pensions of the deceased David Alan Daugharty as stipulated in the Domestic Contract as of the date of the Separation being April 1, 1996 or as this Court deems just. 2. The Applicant, Carol Marie Johnston, be declared spouse of the deceased David Alan Daugharty or such order as required to deem her recipient of the divided pensions of the deceased David Alan Daugharty pursuant to the Public Service Superannuation Act RSNB and the Pension Benefits Act RSNB. 3.

An accounting be performed for funds received by the Respondent and an Order to determine the portions to be received by the Applicant and Respondent. 4. The Respondent reimburse the Applicants for funds received since January 3, 2005 that form the portion of the pensions to be retained by the deceased David Alan Daugharty and/or Carol Marie Johnston. 5. Costs of this Application. 6. Such further relief as this Honourable Court deems just.” (9.) A claim based on “unjust enrichment” was raised in the applicants’ pre-trial brief on law, and during the hearing.

Merits or otherwise of such a claim aside, it was not considered. It had not been pleaded and there was never a request made to amend the Notice of Application. (10.) Ms. Wade’s Responding Document filed on January 26, 2007 replied in detail, opposing the application, and asking for various items of relief that need not be repeated.

A request for an order joining the Province of New Brunswick and the University of New Brunswick as respondents in the proceeding was never pursued, although there were apparently discussions among counsel with respect to whether such a step was necessary. (11.) The Trial Record was filed on September 8, 2011. No explanation for the delay in setting the matter down for trial was offered. In the more than seven years since Mr. Daugharty’s death, in excess of $175,000.00 has been paid out to Ms. Wade. Both pensions are indexed. Ms.

Wade presently receives $1,548.51 (gross) monthly from the PSSA Plan and $1,071.45 (gross) monthly from the UNB Plan. The pension funds are her primary source of income.

III. ISSUES: In my view, the issues can be distilled as follows: 1. Does Ms. Johnston, in her personal capacity, have any claim or cause of action against Ms. Wade? 2. Was/is Ms. Wade barred by the Domestic Contract from receiving the surviving spouse’s pensions? 3. If Ms. Wade’s claim is barred, can this court dictate to whom the surviving spouse’s pensions should be paid? IV. EVIDENCE: (12.) Both Ms. Wade and Ms. Johnston testified. Most, if not all, of the salient facts were not in dispute. The validity of the Domestic Contract was not questioned. There was no exception taken by Ms. Wade to Ms.

Johnston’s position that she and Mr. Daugharty were in a “common law” relationship and that Ms. Johnston was therefore the surviving common law spouse. Ms. Johnston took no issue with the treatment by the pension plan administrators of Ms. Wade’s claim. (13.) Ms. Wade testified that she and Mr. Daugharty each relied on their lawyers to conduct the negotiations leading up to the execution of the Domestic Contract, and to recommend the outcome. Discussions were not protracted and the single change requested to the draft prepared by Ms.

Wade’s lawyer was with respect to the duration of the time limited spousal support. Otherwise, Ms. Wade was of the view that it was not a complicated process. Nor was the relationship between her and Mr. Daugharty one of conflict and upset. They simply set about to finalize their affairs; they signed the contract; and each went on with his/her life. (14.) During her testimony, Ms. Johnston placed on the record her position that she wanted only her one-half share of the pension benefits that were attributable to the number of years that she and Mr. Daugharty had been together.

She was not asking that she receive all of the monthly payments. Ms. Johnston did not identify the amount that she thought satisfied this request on her part. Nor was there expert or other evidence presented that calculated what this amount might or should be. (15.) When the Domestic Contract was signed in December 1996, the governing legislation did not permit a division of pension plan benefits at source, even though courts had recognized that pension plans were marital property and subject to division.

The only manner in which pension plans could be divided was for parties to agree to, or courts to impose, “if and when” orders that saw the pension plan member receive and hold the non-member’s share of benefits “in trust”. Detailed directions were needed in order to impose and maintain these trust provisions. See, for example, the decision of Guerette, J. in Belyea v.

Belyea 1990 CarswellNB 34 (Ct.Q.B.) . (16.) Ultimately, the necessary changes to establish a mechanism by which a non-member’s share of pension funds could be transferred to him/her upon marriage breakdown were made to the various pieces of legislation. (17.) Tab 8 of Exhibit 1 is a copy of correspondence dated August 28, 2001 from Ms. Wade’s lawyer, Sherron Dickson, to Mr. Daugharty (his lawyer by then having left private practice). In that correspondence, Ms. Dickson informs Mr. Daugharty of the changes to the applicable regulations that then permitted a division of pension plans.

She informs him as well that Ms. Wade would like to “proceed on that basis” and revise the relevant portions of the Domestic Contract. (18.) Tab 20 of Exhibit 1 is a copy of correspondence dated March 13, 2002 from Sherron Dickson to Mr. Daugharty. It encloses an “Agreement for your signature” with respect to the pension division. (19.) Although there is no record in the exhibits of Mr. Daugharty’s response, Tab 9 of Exhibit 1 is a copy of correspondence from Eckler Partners Ltd. dated November 17, 2003 in which the total transfer value for Mr. Daugharty’s UNB Pension Plan is identified to be $21,177.96.

Tab 10 of Exhibit 1 is correspondence dated March 19, 2004 from the Province of New Brunswick to Mr. Daugharty confirming that $69,410.77 was the maximum amount available for transfer. Both of these correspondences indicated that they were provided in response to requests made by Mr. Daugharty.

(20.) No amending agreement was ever signed. (21.) Ms. Johnston testified that she and Mr. Daugharty had plans to marry and that he had given her an engagement ring sometime in the Summer of 2004. Ms. Wade testified that she had no knowledge of any such plans and that she and Mr. Daugharty had never discussed divorced. She said that she had never seen the necessity for it. When cross-examined by counsel for Ms. Johnston regarding Ms.

Dickson’s statement in her correspondence of August 28, 2001 that she had “been contacted by your former wife, Susan Wade, with respect to the provisions of the domestic contract”, Ms. Wade testified that she recalled contacting her lawyer after she heard from employees in Mr. Daugharty’s workplace that Ms. Johnston (who was also employed at UNB) had been making inquiries about Mr. Daugharty’s pension. It would have been then that Ms. Wade learned about the changes to the legislation, and she took Ms. Dickson’s advice on what should be done. However, she was not insistent on making any change.

She thought she had financial security because of the Domestic Contract. V. RELEVANT LEGISLATION (22.) As noted above, t he Pension Benefits Act governed the administration of the UNB plan: (23.) In 2005, section 1(1) defined “spouse” as follows: “spouse” means either a man and a woman who (

a) are married to each other, (

b) not relevant, (

c) not relevant, or (

d) not being married to each other, have cohabited (

i) continually for a period of not less than three years in a conjugal relationship in which one person has been substantially dependent upon the other for support, or (ii) not relevant and have cohabitated within the preceding year; Unlike the current version of the Act , the 2005 version did not define “common law partner”. (24.) Section 1(2) of the legislation provided that: The entitlement under a pension plan of any person as a spouse of a member or former member of the pension plan shall not diminish the entitlement of any person who is lawfully married to the member or former member or of a child of that marriage.

The result was that Ms. Wade’s entitlement, as the person “lawfully married” to Mr. Daugharty, took priority over any entitlement that Ms. Johnston might have had. (25.) Section 43(1) provided for a pre-retirement death benefit as follows:

Subject to subsections (7) and (8), 43(1) if a former member of a pension plan dies before the commencement of payment of a deferred pension to which the former member is entitled under

section 35, the spouse of the deceased former member at the date of death is entitled to, (

a) if the former member dies before the commencement of this subsection, a payment equal in amount to not less than sixty per cent of the commuted value of the deferred pension, or (

b) if the former member dies on or after the commencement of this subsection, a payment equal in amount to the commuted value of the deferred pension. (26.) Section 43(4) permitted the designation of a beneficiary, however, section 43(5) precluded its’ operation if the deceased member had a spouse at the date of death. (27.) In a situation where there was no “spouse” and no beneficiary designation, the payment was made to the deceased member’s estate. (See section 43(6)). (28.) The 2005 Public Service Superannuation Act defined “spouse” and “surviving spouse’s pension” as follows: “spouse: means spouse as defined in the Income Tax Act (Canada), but, for the purposes of a void or voidable marriage, does not include a reference to any provision of that Act contained in that definition.” “surviving spouse’s pension” means a pension described in

section 11. The definition of “spouse” in the Income Tax Act recognized relationships between persons of the opposite sex who were married to each other, who were parties to a void or voidable marriage, who had lived in a conjugal relationship for at least twelve months, or who had a child of the relationship. (See section 252(4)). (29.) Section 11(1) of the 2005 Public Service Superannuation Act provided that: Subject to this section, upon the death of a contributor who had to his credit five or more years pensionable service, his surviving spouse is entitled to a surviving spouse’s pension equal to: (

a) n/a (

b) n/a (

c) where the contributor was employed in the Public Service at the time of the contributor’s death one half of the immediate pension that would have been payable if the contributor had been entitled to receive an immediate pension at the time of the contributor’s death; or

(

d) n/a (30.) Section 11(8) provided that: If two persons claim the surviving spouse’s pension under this section, and one of those persons is a spouse because that person was married, other than in a void or voidable marriage, to the contributor at the time of the contributor’s death, that spouse is entitled to the surviving spouse’s pension, if otherwise eligible and subject to subsection 19.1(3), unless there is a valid written agreement between the contributor and that spouse, or a court order or judgment, that bars that spouse’s claim.

Like the Pension Benefits Act , then, the Public Service Superannuation Act gave priority to a legally married surviving spouse. (31.) By virtue of sections 12, 13 and 14 of the Public Service Superannuation Act , where a contributor died leaving no surviving spouse, the pension was paid to any children; if there were no surviving children, the Lieutenant Governor in Council had the authority to grant the pension to any member of the contributor’s family who had been “wholly or partly dependant” upon the contributor’s earnings; if there was no person to whom the pension could be paid, then the contributor’s estate received a return of contributions plus interest. (32.) On application by Ms.

Wade in 2005 for the surviving spouse’s benefits, the plan administrators determined her eligibility and began making the payments. The applications by Ms. Johnston for those same benefits were rejected. Tab 5 of Exhibit 1 is a copy of correspondence dated March 23, 2005 from the Province of New Brunswick to Ms. Johnston informing her that Mr. Daugharty’s surviving spouse is the one entitled to receive the benefits. (33.) Ms. Johnston has never challenged the correctness of the decisions made by the pension plan administrators. VI.

DOMESTIC CONTRACT: (34.) The relevant portions of the Domestic Contract are the following: “2(

b) The Husband and Wife have been living separate and apart from each other since the 1 st day of April, 1996 and desire to settle by this Contract all their rights and obligations which they have with respect to their property, whether it be marital property or otherwise and, as well, all issues relating to maintenance or support from one to the other. 3(

a) It is the intention and desire of the Husband and Wife that this Contract shall represent their rights and obligations concerning each other and that it shall be a complete, final and effective settlement of their respective claims and rights in and to all property as defined in paragraph 1 (

b) now held by them jointly or individually and of any kind and description. 6(

a) The Husband shall, commencing on July 1, 1996, pay to the Wife (or to her bank account as she may from time to time direct) by way of periodic spousal support or maintenance payments (within the meaning of the provisions of the Income Tax Act ) the sum of $275.00 per week, the same to be paid at the end of each two week period by payments of $550.00 each, which payment dates shall correspond with the Husband’s pay periods. Such payments shall continue until the earlier of any one of the following dates or events:

(

i) June 30, 2002, (ii) the death of the Wife, (iii) the Wife remarries or commences cohabitation in a common law relationship, or (iv) the Wife executes a release or discharge, in writing, releasing the Husband from further obligations for payment of periodic spousal support or maintenance. The wife hereby acknowledges receipt of support payments in the above amount from July 1, 1996 up to the date of execution of the within Agreement and further acknowledges that she is solely liable for payment of income taxes in relation to such support payments. (

b) When the Husband retires, the Wife shall, during the Husband’s retirement and so long as the Wife is then living, be entitled to receive, by way of further periodic spousal support or maintenance payments payable monthly, fifty percent of all the Husband’s pension benefits which were accumulated during the cohabitation of the parties, being May 25, 1973 to April 1, 1996. The Husband shall be a Trustee for the Wife’s interest in the said pension and shall pay to the Wife her share of the pension benefits on a monthly basis forthwith upon receipt of the monthly benefit by him.

The Wife’s percentage of the Husband’s gross monthly pension shall be calculated on the following basis: (i) (number of years of cohabitation of the parties ÷ number of years of contribution to the pension) x.5 x (the total gross monthly pension payable to the husband) (

c) The Wife shall also share in the Husband’s retirement allowances and in any lump-sum pension refunds or similar benefits, as may hereafter be payable to the Husband or his estate , on the same percentage basis as the pension benefits noted above, which amounts shall be paid to the Wife forthwith upon receipt thereof by the Husband or his estate. (emphasis added) (

d) The Husband shall, on an annual basis, provide to the Wife a statement of his gross annual pension and a series of post-dated cheques, representing the Wife’s share of the pension as above calculated, for a one year period. The parties agree that they shall on the anniversary date of the pension review the calculation to ensure that the post-dated cheques represent the correct calculation of the pension benefits which the Wife is to receive. (

f) The Husband shall maintain in full force and effect that life insurance policy currently in effect through his employment with coverage on the Husband’s life equivalent to one (1) year’s salary which shall continue to be made payable to the Wife as beneficiary. In the event of the death of the Husband, at a time when such insurance policy is in effect and before full payment of the Husband’s obligations under sub-paragraph (

a) hereof, the Wife shall immediately apply so much of the insurance proceeds as are then necessary in satisfaction of the Husband’s obligations under sub-paragraph (

a) above, and the balance of such life insurance proceeds shall, if the Wife is entitled to spousal benefits under the provision of the Husband’s pension plan, be then paid over to the Husband’s estate for distribution under his Last Will and Testament. If the Wife is not then entitled to spousal benefits, she shall be entitled to retain any excess insurance proceeds which shall then be payable to her so as to thereby compensate the Wife for the loss of the said spousal benefits. The Wife shall be a trustee of the said life insurance proceeds for the purposes expressed herein. (emphasis added) 8(

g) The Husband and Wife acknowledge and agree that with respect to all other property and assets be it marital, family, business or otherwise, they have made a full and complete division of the same and that each is in possession of their share and neither now makes, and will not hereafter make, any demands against such property as is held by the other. This Contract shall be a complete defence to any such claim if so raised and each may dispose of their respective property as if they were unmarried. 10. RELEASE Except as provided for otherwise in this Contract, the Husband and Wife each acknowledge and agree that: (

a) each party is entitled to the property now in his or her possession or ownership and any future acquired property, free from any claim by the other;

(

b) each party may dispose of property he or she possess or owns or will possess or own as if each party were unmarried; (

c) each party releases and discharges all rights to and interest in property owned by the other that he or she has, or may during his or her lifetime acquire, under the laws of any jurisdiction, including, but not limited to, the Marital Property Act , the common law, or any statutory rule of the common law governing relationships, including all rights to and interest in: (

i) ownership of property; (ii) division of property; (iii) compensation by payment of any amount of money or by an award of a share of real and personal property for contribution of any kind, whether direct or indirect, made to properties; (

d) this

section is a complete defence to any action brought by either the Husband or the Wife to assert a claim to any property wherever situate in which the other has or had an interest. 11. RELEASE OF RIGHTS TO ESTATE Except as provided for in this Contract and subject to any rights given to the other in his or her Will, the Husband and the Wife hereby release and discharge all rights that he or she has or may have under the laws of any jurisdiction to the estate of the other and in particular any claim under the Devolution of Estates Act R.S.N.B. 1973,

Chapter D-9, the Provisions for Dependants Act S.N.B. 1991,

Chapter P-22 .3, the Marital Property Act , the Pension Benefits Act , and amendments thereto and/or any successor, amending or repealing legislation containing similar provisions. 13. DOMESTIC CONTRACT TO SURVIVE DIVORCE If either the Husband or the Wife obtains a Decree of Divorce, all the terms of this Contract will survive and continue in force.” VII. LAW AND ANALYSIS: A. Does Ms. Johnston, in her personal capacity, have any claim or cause of action against Ms. Wade?

As set out above at page 2, the Notice of Application essentially claimed the following relief: • enforcement of the Domestic Contract, i.e., a division of the pensions as provided for in the Domestic Contract; • a declaration that Carol Johnston is the spouse of David Daugharty “or such order as required to deem her recipient of the divided pensions” pursuant to the two relevant Acts ; • an accounting “for funds received by the Respondent and an Order to determine the portions to be received” by each of the Applicant and Respondent; • reimbursement by the Respondent for the portion of the pensions to be returned by Mr.

Daugharty and/or Carol Johnston.

(35.) With respect to the first item of relief, Ms. Johnston has no legal standing to enforce the Domestic Contract. She was not a party nor a signatory to it. Any standing she has arises solely as a result of her designation as Mr. Daugharty’s executrix in his Will. (See Tab 3, Exhibit 1). This conclusion begs the obvious question of whether enforcement of the Domestic Contract is a remedy that would achieve a positive result for Ms. Johnston if it, in fact, provided for any pension division other than Mr.

Daugharty’s retirement pension. (36.) With respect to the second item of relief, the governing legislation determined the entitlement of the claimant spouse. In this case, Ms. Johnston did not meet the statutory criteria; Ms. Wade did. It is not the responsibility of the Court, nor within its’ purview, to craft “such order as required to deem [Ms. Johnston] recipient” of the pensions pursuant to the governing legislation. Furthermore, in the absence of either of the pension plan administrators as parties, the Court would have no jurisdiction to bind either plan. (37.) With respect to the accounting sought, Ms.

Johnston has no legal standing in her personal capacity to demand an accounting from Ms. Wade, nor to obtain an order determining the portion of funds to be received by Ms. Johnston. (38.) The same outcome is inevitable with respect to the fourth claim, i.e., for “reimbursement by the Respondent” of the portion of pension funds. Ms. Johnston had no standing in her personal capacity. (39.) Simply put, there is no possible lis between Carol Johnston in her personal capacity and Ms. Wade. (40.) The application by Ms. Johnston in her personal capacity is dismissed in its’ entirety. B. Was/is Ms.

Wade barred by the Domestic Contract from receiving the surviving spouse’s pensions? (41.) In the absence of a plea that the Domestic Contract was either void or voidable, or that it should be set aside, the fact is that it governed the financial arrangements between the parties and the division of their property and debts. However, the surviving spouse’s benefits were provided for by statutes which, in these circumstances, provided nothing for Mr. Daugharty’s estate except the retirement allowance. (42.) It is perhaps curious that the division of Mr. Daugharty’s retirement pension was addressed in the

section of the Contract that dealt with spousal support. In fact, the retirement benefits are referred to as such in paragraph 6(b). This is consistent with Ms. Wade’s testimony that the Contract gave her financial security. However, it does not impact on the outcome. (43.) It is clear that the Domestic Contract provided Ms. Wade with one of two forms of financial security: either her share of Mr. Daugharty’s retirement pension if he was retired, or his life insurance proceeds if she was not receiving the surviving spouse’s pension benefits. (See paragraphs 6(

b) and 6(f)). (44.) In the event that Mr. Daugharty or his estate received any “lump sum pension refunds or similar benefits”, Ms. Wade was also entitled to receive a share of those, with the percentage basis to be calculated as per the formula set out in the Domestic Contract. (See paragraph 6(c)). (45.) Operating under the erroneous assumption that paragraph 6(

f) permitted a change of beneficiary designation once the time limited spousal support obligation in paragraph 6(

a) was met, Mr. Daugharty changed the beneficiary designation on his life insurance. (See Tab 25, Exhibit 1) Ms. Johnston and the Daughartys’ only child were each designated as the beneficiaries of one half of the proceeds. Ms. Johnston received $51,006.08 in life insurance proceeds. As the beneficiary of Mr. Daugharty’s estate, Ms. Johnston also received one-half of Mr. Daugharty’s retirement allowance in the amount of $17,104.50. Ms. Wade received the other half, as contemplated by paragraph 6(c). It appears that the share received by Ms.

Wade may have been different from the amount actually due her pursuant to the formula provided for in the Contract, however, no one mentioned that possibility or took issue with the division. Had the beneficiary designation on the life insurance not been changed, the outcome would have been the same for Ms. Wade. She would have received nothing as she would have been obliged to pay over to Mr. Daugharty’s estate the full amount of the life insurance for

distribution in accordance with his Will. Obviously in that scenario, Ms. Johnston would have received all of the life insurance policyproceeds as Mr. Daugharty’s sole beneficiary rather than only half. (46.) The issue is the impact of the “Release” clauses in paragraphs 8, 10 and 11 of the Domestic Contract. Ms. Johnstonargued that they operated as a release of Ms. Wade’s claims under the Pension Benefits Act. Ms. Wade argued that they were notsufficiently specific to have that effect, alternatively that they did not release Ms. Wade’s rights under the Pension Benefits Act.

Therewas little, if any, discussion with respect to the Public Service Superannuation Act, which is nowhere mentioned in the Contract. (47.) In Eccleston Estate v. Eccleston (NB KB), 1999 CarswellNB 534 (Ct.Q.B.), the estate sought anorder that a bequest in the Will of the deceased ex-husband in favour of his ex-wife should be declared null and void because of theparties’ Domestic Contract and subsequent divorce. The Will, executed prior to the parties’ separation, left the ex-husband’s entire estateto his former wife. There had been no new Will made by the ex-husband.

The estate relied upon a release clause in the DomesticContract which read as follows: The Husband and Wife each releases and discharges all rights that he or she has or may hereafter acquire under the laws ofany jurisdiction in the Estate of the other.

In particular, each releases all rights (1) to share in the Estate of the other upon the other dyingintestate; (2) to act as Executor or Administrator of the Estate of the other; and (3) undertakes to provide by separate Wills for theadministration of the Estates of the Parties hereto. (48.) In considering the impact of the release clause (and concluding that it did not nullify the bequest in the Will), Russell, J.referred to several cases from other jurisdictions, including a decision of the Manitoba Court of Appeal in Pearson v. Pearson 1980,CarswellMan 57.

At paragraphs 10 and 14 of that decision, Huband, J.A. said: 10. … I agree that the wife is not advancing a claim under the will, let alone The Wills Act. She has been named abeneficiary, and without advancing any claim whatever, there is a positive duty upon the person appointed to administer the estate toseek out and pay the proceeds of the estate to the named beneficiary. 14. … The widow’s entitlement is not a claim against the estate of her late husband, but a right to receive what has beendesignated as her legacy under his will. (49.) An analogy to the present case can be made. Ms.

Wade advanced no claim against the estate of Mr. Daugharty. Her’swere claims permitted by statute as a surviving spouse and, furthermore, paragraph 6(

f) of the Domestic Contract specificallycontemplated the possibility that Ms. Wade would receive them. (50.) In Dimma v. Algoma Steel Corporation Ltd. 1979 CarswellOnt 589 (Ont. High Ct. Jus.), the court was called upon todetermine whether a wife had released her rights to spousal benefits under the husband’s pension. At the time of his death, the husbandwas employed as a steelworker by the respondent and he was covered by the terms of a pension agreement between the respondentemployer and his union. The agreement provided for spousal benefits in the event of the death of an employee.

The applicant was thesurviving spouse. The husband and wife had entered into a separation agreement by which the wife had released claims against thehusband and his estate. In finding that the separation agreement did not bar the wife’s rights afforded her as the surviving spouse, thecourt held that the release clauses did not extinguish contractual rights or rights as third party benefittee or as a beneficiary under awill. (See paragraph 10).

At paragraph 8 of the decision, Stortini, J. said “Paragraph 6(a) [the Release Clause] is inapplicable becausethe pension benefits do not form part of the husband’s estate.” (emphasis added) (51.) Ms. Wade’s claim for the surviving spouse’s benefits was not a claim against Mr. Daugharty’s estate. Nor had/did thosebenefits ever become: • property held by Mr. Daugharty as provided for in paragraph 8(

g) of the Domestic Contract; • property in Mr. Daugharty’s possession or ownership as provided for in paragraphs 10(

a) and (b); or

• property in which Mr. Daugharty acquired an interest as provided for in paragraphs 10(

c) and (d); with respect to which Ms. Wade released all claims. (52.) The Domestic Contract governs inter partes and does not affect claims available to Ms. Wade as the “benefittee” under the Pension Benefits Act and the Public Service Superannuation Act absent clear language to the contrary in the Domestic Contract. No such language can be found in the Contract. On the contrary, and as noted above, paragraph 6(

f) expressly contemplates the possibility that Ms. Wade would receive the “spousal benefits” under Mr. Daugharty’s pension plan. (53.) Tower Estate v. Estabrooks and Grant , [2012] N.B.J. No. 74 (C.A.) (leave to appeal to SCC denied on August 30, 2012), involved an appeal from a trial decision that had dismissed the estate administrators’ claim that the estate, and not the surviving spouse, was entitled to the supplementary death benefits and superannuation public service pension benefits acquired by the deceased as an employee of the Correctional Service of Canada.

The deceased had died unmarried and intestate, having entered into a Separation Agreement with his former spouse that contained the standard form of release worded as follows: “In her own right and on behalf of her respective heirs, administrators and assigns release and forever discharge Cedric Tower from any and all actions, causes of actions, claims and demands in any way connected to or related to those matters in [her] Petition of [sic] Divorce” (54.) The surviving spouse claimed her entitlement under the Public Service Superannuation Act and the Supplementary Death Benefits Regulation.

Certain of the legislative provisions allowed for the naming of a beneficiary of the benefits to which the deceased was entitled. Prior to the separation and divorce of Mr. Tower and Ms. Grant, he had named her as the beneficiary. Post divorce, he had never designated a substitute. The original beneficiary designation was not impugned. The Court of Appeal determined that the Separation Agreement and Release did not “trump” the beneficiary designation permitted by the legislation. (55.) Whether Mr. Daugharty ever considered the possibility of amending the Domestic Contract is irrelevant.

The reality is that he did not do so, nor did he ever divorce Ms. Wade in the nine years following their separation, despite his cohabitation with Ms. Johnston. Ms. Wade’s claim was presented under valid legislation that mandated the payments to her absent either an agreement or court order that barred her claim.

Neither of those existed, and this court has no jurisdiction to determine eligibility as a spouse for purposes of a statute-based claim in any manner that is inconsistent with the statue itself. (56.) In my view, the release clauses in the Domestic Contract have no impact on the statutory entitlement of Ms. Wade to receive the surviving spouse’s benefits. As noted above, she advanced no claim against Mr. Daugharty’s estate, and the benefits which she received had never become property in which Mr. Daugharty had or acquired any interest. C. If Ms.

Wade’s claim is barred, can this court dictate to whom the surviving spouse’s pensions should be paid? (57.) In light of the conclusion reached that Ms. Wade’s claims are not barred, it is not necessary to address this issue. VIII. DISPOSITION AND COSTS: (58.) The application is dismissed in its’ entirety. (59.) Rule 59 identifies some of the criteria to be considered by trial judges when costs are determined. The issues in this application were not complicated. By the time of the hearing, more than $175,000.00 had been paid out to Ms. Wade. Although Ms.

Johnston appeared to abandon her claim for an accounting and for payment of any share of those funds, that position was only placed on the record at the hearing. Her claim for future payments was not quantified, nor was the claim for reimbursement. The “amount involved” is impossible to determine.

(60.) The issue was an important one financially, certainly for Ms. Wade. (61.) Neither party’s conduct appeared to be mala fide. There was no explanation for the delay in pursuing the application. (62.) The constraints identified by decisions such as Rademaker v Rademaker 2002 NBCA 47 , 2002 CarswellNB 217(C.A.) do not apply. (63.) The hearing required slightly less than one full day. (64.) There are no apparent compelling reasons to refuse costs to the successful litigant in this application. (65.) Considering the above, the applicants shall forthwith pay costs in the amount of $2,500.00 to the respondent.

DATED at Fredericton, New Brunswick this 21st day of September, 2012. __________________________________ Anne D. Wooder, J.C.Q.B.