r v. DiDonato, 2019 ONSC 2152

Birnie v. The Estate of Birnie et al. [Indexed as: Birnie v. Birnie Estate] Ontario Reports Ontario Superior Court of Justice Varpio J. April 12, 2019 145 O.R. (3d) 681 | 2019 ONSC 2152 Case

Summary Family law — Domestic contracts — Separation agreement — Separation agreement requiring husband to obtain life insurancepolicy in amount of $500,000 designating wife as irrevocable beneficiary and to maintain that designation for so long as he wasrequired to pay spousal support — Husband never obtaining contemplated insurance — Language of separation agreement notestablishing that sole purpose of life insurance clause was to act as security for support obligation — Insurance clause beingstand-alone clause — Husband's estate liable to pay wife $500,000.

The applicant and B entered into a separation agreement in 2004 that required B to obtain a life insurance policy in the amount of$500,000 designating the applicant as the irrevocable beneficiary and to maintain that beneficiary designation for so long as he wasrequired to pay spousal support to the applicant. B did not obtain the contemplated insurance. He died in 2017. The applicant brought anapplication for an order requiring B's estate to pay her $500,000 and a motion for

summary judgment. Held, the motion should be granted. The sole purpose of the life insurance clause in the separation agreement was not to act as security for B's support obligation. Rather, theinsurance clause was a stand-alone clause, whereby the applicant would be entitled to receive $500,000 upon B's death. Any otherinterpretation was inconsistent with the other terms of the separation agreement; the releases, which explicitly stated that the parties maydeal with their estates "free from any claim or action by the other under the Succession Law Reform Act"; the stated desire of the partiesin the

preamble of the separation agreement to bring their matrimonial issues to an end; the lack of any "drawdown" clause whereby Bcould reduce the amount of insurance he was required to obtain over time; and the lack of explicit language expressing a "sole" intent. Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., (SCC), [1980] 1 S.C.R. 888, [1979]S.C.J. No. 133, 112 D.L.R. (3d) 49, 32 N.R. 488, [1980] I.L.R. para. 1-1176, 1 A.C.W.S (2d) 169; Sattva Capital Corp. v. Creston MolyCorp., [2014] 2 S.C.R. 633, [2014] S.C.J.

No. 53, 2014 SCC 53, 373 D.L.R. (4th) 393, 461 N.R. 335, [2014] 9 W.W.R. 427, J.E. 2014-1345, 358 B.C.A.C. 1, 59 B.C.L.R. (5th) 1, 25 B.L.R. (5th) 1, 242 A.C.W.S. (3d) 266, 2014EXP-2369; Turner v. DiDonato (2009), 95O.R. (3d) 147, [2009] O.J. No. 1113, 2009 ONCA 235, 311 D.L.R. (4th) 146, 247 O.A.C. 116, 46 E.T.R. (3d) 1, 176 A.C.W.S. (3d) 389,2009 CFLG para. 26,427, apld Other cases referred to 3091-5177 Québec inc. (Éconolodge Aéroport) v. Lombard General Insurance Co. of Canada, [2018] S.C.J. No. 43, 2018 SCC 43,[2019] I.L.R. para.

I-6104, 429 D.L.R. (4th) 199, 86 C.C.L.I. (5th) 1, 297 A.C.W.S. (3d) 77; BG Checo International Ltd. v. BritishColumbia Hydro and Power Authority, (SCC), [1993] 1 S.C.R. 12, [1993] S.C.J. No. 1, 99 D.L.R. (4th) 577, 147 N.R.81, [1993] 2 W.W.R. 321, J.E. 93-271, 20 B.C.A.C. 241, 75 B.C.L.R. (2d) 145, 14 C.C.L.T. (2d) 233, 5 C.L.R. (2d) 173, 37 A.C.W.S.(3d) 1202; [page682] Dagg v. Cameron Estate (2017), 136 O.R. (3d) 1, [2017] O.J. No. 2259, 2017 ONCA 366, 410 D.L.R. (4th) 219,67 C.C.L.I. (5th) 1, 25 E.T.R. (4th) 173, 89 R.F.L. (7th) 1, 278 A.C.W.S. (3d) 669, 2017 CEAG para. 32,127; Hryniak v.

Mauldin,[2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, [2014 SCC 7, 366 D.L.R. (4th) 641, 453 N.R. 51, J.E. 2014-162, 314 O.A.C. 1, 21 B.L.R. (5th)248, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 46 C.P.C. (7th) 217, 95 E.T.R. (3d) 1, 37 R.P.R. (5th) 1, EYB 2014-231951, 2014EXP-319;Kerr v. Baranow, [2011] 1 S.C.R. 269, [2011] S.C.J. No. 10, 2011 SCC 10, 328 D.L.R. (4th) 577, 411 N.R. 200, [2011] 3 W.W.R. 575,J.E. 2011-333, 300 B.C.A.C. 1, 14 B.C.L.R. (5th) 203, 274 O.A.C. 1, 64 E.T.R. (3d) 1, 93 R.F.L. (6th) 1, 199 A.C.W.S. (3d) 1214, EYB

2011-186472 , 2011 DFQ para. 4 , 2011 CFLG para. 26 ,644, 2011EXP-624; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co ., [2016] 2 S.C.R. 23 , [2016] S.C.J. No. 37 , 2016 SCC 37 ; S. (D.B.) v G. (S.R.) , [2006] 2 S.C.R. 231 , [2006] S.C.J. No. 37 , 2006 SCC 37 , 270 D.L.R. (4th) 297 , 351 N.R. 201 , [2006] 10 W.W.R. 379 , J.E. 2006-1543 , 61 Alta. L.R. (4th) 1 , 391 A.R. 297 , 31 R.F.L. (6th) 1 , 149 A.C.W.S. (3d) 626 , EYB 2006-108061 , 2006 DFQ para. 11 , 2006 CFLG --26 ,140 Statutes referred to Succession Law Reform Act , R.S.O. 1990, c. S.26, s. 72(1) ( f ) [as am.],

(7) Rules and regulations referred to Family Law Rules , O. Reg. 114/99, rule 16(6) , (6.1) , (6.2) ,

(7) MOTION by the applicant for

summary judgment. William Abbott and Stephen Kirby , for applicant. Kim Kieller , for respondents VARPIO J. : — Overview [ 1 ] Mr. Michael Birnie was a North Bay, Ontario lawyer who tragically passed away after a brief illness on August 8, 2017 at 61 years of age. He had had reasonable earning power prior to his passing and had apparently enjoyed a comfortable lifestyle. At the time of his death, Mr. Birnie was married to Ms. Sharon Larmer, another North Bay lawyer. Mr. Birnie and Ms. Larmer began cohabitating in or around December 2002 and were married in December 2009. [ 2 ] Prior to his marriage to Ms.

Larmer, Mr. Birnie had been married to Ms. Janice Birnie. The Birnies began cohabitating on September 15, 1986 and were married on February 6, 1987. They separated on July 29, 2002. The Birnies had no children together but Ms. Birnie has two children from a previous relationship, both of whom are now independent adults. [ 3 ] Pursuant to a separation agreement dated October 19, 2004 (the "Separation Agreement"), Mr. Birnie was to secure a life insurance policy in the amount of $500,000 naming Ms. Birnie as irrevocable beneficiary. Mr. Birnie never obtained such a policy. Thus, Ms.

Birnie brought an application seeking $500,000 from Mr. Birnie's estate. During the course of the litigation, several [page683] orders were made including one that placed $500,000 into court from the proceeds of the estate pending the determination of Ms. Birnie's claim. [ 4 ] Ms. Larmer has been added as a party to the litigation in her personal capacity. She is also acting as the estate trustee of Mr. Birnie's estate. Ms. Larmer's personal position and the position of the Estate are, at this point, identical. Accordingly, any reference to Ms. Larmer's position in these reasons refers to both Ms.

Larmer's personal position and her position as estate trustee. [ 5 ] Ms. Birnie seeks

summary judgment in the amount of $500,000 (minus certain payments she has received from the funds paid into court) as well as $76,268.83 for cost of living adjustments ("COLA") that were never received. Ms. Birnie submits that the contractual clause requiring Mr. Birnie to secure insurance is a "stand alone" clause, fully enforceable as against the estate such that she is entitled to the entire amount claimed. [ 6 ] Ms. Larmer opposes the application in that she claims that the life insurance policy was simply intended to "secure" spousal support.

As such, any of the moneys paid into court are subject to a "clawback" as per the Succession Law Reform Act , R.S.O. 1990, c. S.26 (the " SLRA "). Accordingly, Ms. Larmer submits that there is a genuine issue for trial since several claims will need to be weighed based on viva voce evidence. [ 7 ] As will be seen below, I agree that the clause obligating Mr. Birnie to secure insurance is a "stand-alone" clause such that the estate is liable to pay Ms. Birnie the full $500,000. The COLA adjustment entitlement requires further submissions in light of this finding.

Facts [ 8 ] The Birnies separated on or about July 29, 2002. On October 19, 2004, the Birnies executed the Separation Agreement as between themselves. The Birnies both had independent legal advice. The Separation Agreement appears to have been drafted by Mr. Birnie's legal counsel, a senior family law practitioner. The relevant paragraphs state: AND WHEREAS the Parties wish to provide for the orderly settlement of their affairs and their respective rights and obligations including those respecting ownership in or division of property, support, as more particularly herein set out;

. . . . . 2.

DEFINITIONS, FORM: . . . . . [page684] (

c) Titles. The arrangements of these sections and their title headings are primarily intended for convenience, but may be used to assist in their

interpretation. 5. SPOUSAL SUPPORT (

a) The Husband shall pay to the Wife spousal support for the Wife in the amount of $6,250.00 per month commencing on January 1st, 2004 and on the first day of each and every month thereafter. (

b) The said spousal support required to be paid by the Husband to the Wife in the amount of $6,250.00 per month shall be subject to an automatic increase annually by the indexing factor equivalent to the change in the consumer price index established by Statistics Canada for the month of December of each year; with the first such automatic increase in spousal support to take effect on January 1st, 2005 and on the first day of January of each and every year thereafter. . . . . . (

d) The spousal support payable by the Husband to the Wife shall be subject to variation upon a material change in circumstances affecting either Party. The Parties agree that if a material change in circumstances should occur in the future then the Parties are at liberty to discuss the change in any variation that is required as between them with a view to settling any such issue. Alternatively, the parties acknowledge and agree that either spouse is at liberty at any time in the future to have any required variation determined by any Court having jurisdiction to deal with such an issue upon the appropriate application being brought by either Party. (

e) The spousal support has been assessed on the basis that the Wife presently has no income and is not employed. The Husband is a lawyer practicing law in the City of North Bay with his firm known as Birnie Associates. The Husband's present net income from his law practice has been assessed by the Parties in the amount of $248,000.00 per annum. . . . . . (

g) The Husband undertakes and agrees to obtain a life insurance policy on his life in the face amount of $500,000.00. The Husband will designate the Wife as the irrevocable beneficiary under the terms of the aforementioned life insurance policy; with the beneficiary designation to continue for so long as the Husband is required to pay spousal support to the Wife.

Upon the execution of the Separation Agreement by both Parties, the Husband will forthwith provide documentation to the Wife confirming the details of the life insurance coverage, confirmation of the face amount of the policy, and confirmation that the Wife is designated as beneficiary under the terms of the said policy.

In addition, the Husband shall provide a direction and authorization to the Wife addressed to the life insurer allowing the Wife to obtain any and all information that she may require directly from the life insurance company with regard to the details of the life insurance designation outlined herein. . . . . . [page685] 17. RELEASE OF RIGHTS IN EACH OTHER'S ESTATES (

a) The Husband and the Wife release each other from all claims and rights that he or she may have had, or afterwards may acquire: (

i) in the estate of the other upon the other dying intestate . . .; (ii) in the estate of the other upon the other dying testate under the provisions of Sections 5, 6 and 7 of the Family Law Act; and (iii) to act as executor or administrator of the other's Will or estate. (

b) The Parties wish to specifically state and acknowledge that they release each other from any claim that the other may have against the estate of the surviving spouse upon death and accordingly the Parties specifically release any claim or right that they may have pursuant to Sections 5, 6 and 7 of the Family Law Act . (

c) The spouses acknowledge and agree that each is free to deal with his or her estate as he or she deems fit free from any claim or action by the other under the Succession Law Reform Act or the Family Law Act or any other applicable statutory Law whatsoever. (

d) The provisions of this contract are for the benefit of and are binding upon the Parties, their heirs, administrators and assigns. . . . . . 21. RELEASE

The Husband and the Wife each accept the terms of this Agreement as satisfaction of all claims and causes of action which each now has or may hereafter acquire in any matter including pursuant to the provisions of any present or future legislation, and including but not limited to claims and causes of actions for possession or title to property or for support from the other and any other claims arising out of the marriage of the Husband and the Wife except for: (

a) Claims arising under or to enforce the provisions of this Agreement; or (

b) Dissolution simpliciter of the marriage. [ 9 ] The Separation Agreement did not require the Birnies to exchange T4s or notices of assessment. [ 10 ] Mr. Birnie paid $6,250 in monthly spousal support until his death, although he brought a motion to terminate spousal support shortly before his passing. Ms. Birnie never sought COLA increases, as was her right, until the filing of this application in 2017. [ 11 ] Mr. Birnie did not secure the life insurance contemplated by s. 5(

g) of the Separation Agreement. Ms. Birnie did not bring court proceedings seeking to enforce Mr. Birnie's obligation to secure life insurance prior to filing this application. Ms. Birnie [page686] did, however, write to Mr. Birnie via e-mail on May 14, 2014 (which e-mail was re-sent on September 11, 2014): . . . I don't wish to go through the legal system, Michael . . . I am too weak . . . so I guess I am relying on the integrity I know you have to help me out. If something should happen to you I would have no income . . .

I still need the letter from you referred to in the Separation Agreement stating you have a Life Insurance Policy with me as beneficiary. I still don't have the "Cost of Living" increase referred to in the Separation Agreement. I don't go anywhere or spend frivolously. I have been on a very strict budget for some time. Things have been especially difficult these last four years . . . it's expensive when you get sick. I don't want a thing extra from you Michael . . . only what was agreed to in the Agreement[.] [ 12 ] It was not argued, nor does the evidence support the contention that Ms. Birnie acquiesced to Mr.

Birnie's breach. [ 13 ] Mr. Birnie obtained a reasonable amount of life insurance -- almost $2 million worth. Mr. Birnie had a $500,000 life insurance policy with the Birnie Law Professional Corporation as named beneficiary. The proceeds of this insurance policy were paid into court pending the outcome of this matter. Ms. Birnie received $25,000 from this policy pursuant to a court order dated November 23, 2017. Additionally, Ms. Birnie has been receiving $4,350 from the funds paid into court pursuant to my previous order dated February 1, 2018. Ms.

Birnie concedes that the funds already paid to her will be set-off as against whatever funds the estate ultimately owes her. [ 14 ] In her affidavit, Ms. Birnie indicates that she is 69 years old, that her marriage to Mr. Birnie lasted 15 years and that said marriage was traditional in nature. The couple did not have children together but Ms. Birnie deposed that she quit working, at least in part, to "support" Mr. Birnie's career as a lawyer. Ms. Birnie deposed that she was diagnosed with colorectal cancer in 2010, which has since moved into her lungs. The support she receives from Mr.

Birnie is her primary source of income and, as a result, she states that she has considerable financial need. [ 15 ] Ms. Birnie also deposes that she believes the estate to be worth a considerable amount of money given Mr. Birnie's recent annual income of over $900,000 as described in Mr. Birnie's financial disclosure. [ 16 ] The estate's accountant swore an affidavit in this matter. The accountant indicates that the Estate is worth approximately $1.6 million due to the fact that Mr. Birnie's bookkeeper undertook certain actions a few years ago that caused a large tax debt to be payable by the estate.

I have no reason to doubt the evidence of the accountant and, as such, I accept same. [ 17 ] In her affidavit, Ms. Larmer deposes that she "respect[s] the fact that Michael's intention when entering into the Separation [page687] Agreement (and securing life insurance) was to provide some security so that the Applicant would be paid her periodic spousal support in the event of his death while the Applicant remained alive". Ms. Larmer's statement regarding Mr. Birnie does not describe the source of this knowledge. Therefore, the statement is a conclusion unsupported by admissible evidence.

Equally, as will be seen below, it is not evidence that I can consider in any event insofar as it offends the parol evidence rule. Thus, I place no weight upon Ms. Larmer's statement. [ 18 ] Ms. Larmer deposes that she too suffers from medical problems and that her son Noah requires financial assistance to finish his university degree. Position of the Parties Ms. Birnie [ 19 ] Ms. Birnie seeks

summary judgment in the amount of $500,000 as well as $76,268.83 for retroactive spousal support flowing from unpaid COLA adjustments. Ms. Birnie bases her position on the notion that the estate is required to satisfy the deceased's contractual obligations and, as such, the estate is liable for Mr. Birnie's $500,000 life insurance commitment. She submits that the requirement to secure said insurance in the Separation Agreement is not intended to simply "secure" support payments, but is a "stand-alone" clause. [ 20 ] The $76,268.83 constitutes the COLA increases that were not paid to Ms.

Birnie from the signing of the Separation Agreement up to December 31, 2017. 1 Ms. Birnie also submits that the COLA increases are simple mathematical calculations and are thus amenable to

summary judgment. Ms. Larmer

[ 21 ] Ms. Larmer opposes the

summary judgment indicating that "partial

summary judgment" is not appropriate in the circumstances insofar as there are genuine issues for trial. Counsel submitted that where life insurance proceeds are procured in order to act as "security" for support payments, only that portion of the funds required to "secure" said support payments ought to flow to the support recipient. The remainder of the funds are the property of the estate. Counsel submitted that the SLRA mandates that all of Ms. Larmer, Ms. Birnie and Noah [page688] are all entitled to portions of Mr. Birnie's estate.

Accordingly, their respective needs need to be determined at trial, especially since Ms. Larmer also suffers from health concerns. [ 22 ] Ms. Larmer also submits that Ms. Birnie's request for retroactive COLA going back to 2004 does not meet the test in S. (D.B.) v. G. (S.R.) , [2006] 2 S.C.R. 231 , [2006] S.C.J. No. 37 , 2006 SCC 37 and, as such, retroactive COLA ought to only go back to the summer of 2014, if at all. If any retroactive support is to be awarded, the matter ought to be remitted to trial pursuant to rule 16(7) of the Family Law Rules , O. Reg. 114/99 for a determination of quantum.

Analysis [ 23 ] Prior to embarking on any analysis of

summary judgment and/or the Family Law Rules , it must be stated that, at its heart, this motion has to do with contractual

interpretation. I will deal with the

interpretation of the Separation Agreement further in these reasons. Ultimately, I will need to decide whether or not Mr. Birnie's requirement to secure life insurance (and to name Ms. Birnie as the irrevocable beneficiary) was solely for the purpose of "securing" support payments. If I am satisfied that such was the sole purpose for creating said contractual obligation, then I must consider Ms. Larmer's argument that

summary judgment cannot be imposed in this matter. [ 24 ] On the other hand, if I am satisfied that the parties created a "stand-alone" clause, the law is clear that Ms. Birnie is entitled to the entire proceeds held in court in satisfaction of Mr. Birnie's contractual obligations. [ 25 ] I will deal with the COLA obligations separately. Succession Law Reform Act and Life Insurance "Security" [ 26 ] Sections 72(1) (

f) and (7) of the SLRA state: Value of certain transactions deemed part of estate 72(1) Subject to

section 71, for the purpose of this Part, the capital value of the following transactions effected by a deceased before his or her death, whether benefitting his or her dependant or any other person, shall be included as testamentary dispositions as of the date of the death of the deceased and shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her estate, and being available to be charged for payment by an order under clause 63(2)( f ), . . . . . (

f) any amount payable under a policy of insurance effected on the life of the deceased and owned by him or her[.] . . . . . [page689] <$*indent1>Rights of creditor

(7) This

section does not affect the rights of creditors of the deceased in any transaction with respect to which a creditor has rights. [ 27 ] The Ontario Court of Appeal dealt with the interplay between ss. 72(1) (

f) and (7) of the SLRA in Dagg v. Cameron Estate (2017), 136 O.R. (3d) 1 , [2017] O.J. No. 2259 , 2017 ONCA 366 . Brown J.A., writing for a unanimous court, framed the issue to be decided as follows, at para. 5: The novel issue raised by this appeal can be stated in the following way: Where a support payor owns a life insurance policy and has been required by court order to name the spousal or child support recipient as the irrevocable beneficiary of the policy, upon the payor's death what rights does the support recipient have to the policy's proceeds in the face of a competing claim by another dependant of the deceased brought under

Part V of the SLRA ? [ 28 ] At paras. 75 and 76, Brown J.A. effectively found that where a payor is subject to a court order that requires her/him to name a support recipient as an irrevocable beneficiary, that portion of the insurance proceeds needed to satisfy support payments is not subject to the "clawback" sections of the SLRA : I conclude that where, at the time of his death, a spousal or child support payor owns a policy of insurance that is subject to a court order requiring the designation of the support recipient as the irrevocable beneficiary of the policy, s. 72(7) protects from the claw back of s. 72(1) that part of a policy's proceeds needed to satisfy the deceased's obligations to the spousal and child support recipients , calculated in accordance with the support orders in place at the time of his death.

I reach this conclusion in the following way. Under both the FLA and the Divorce Act , a court can secure the payment of support obligations by formally granting a charge against property. However, the jurisprudence discloses that the more common practice is for a court to order a support payor to designate the support recipient as the irrevocable beneficiary under a life insurance policy. While colloquially such an order is described as one that

"secures" payment of the support obligations in the event of the payor's death, it would be more accurate to say that such an order makesavailable a pool of money -- the proceeds of the life insurance policy -- to satisfy the support payor's obligations calculated inaccordance with the support orders in place at the time of his death. (Emphasis added) [29] The court was clear, however, that not all life insurance requirements described in separation agreements are intended simply as"security" for support payments.

At para. 83, Brown J.A. stated: Second, [the support recipient]'s rights as a creditor of the deceased in respect of the Policy for the purposes of s. 72(7) flow from courtorders. Those rights can be no greater than what the courts could confer under such orders. Under the FLA and Divorce Act, courts onlyhave the jurisdiction to order life insurance beneficiary designations to the extent needed to [page690] satisfy support obligations. Suchorders can provide no greater protection in the face of a competing claim to the policy's proceeds by a claimant under

Part V of theSLRA. Should parties intend a life insurance policy to operate as a kind of "stand alone" benefit upon the payor's death, not linked to hisobligation to pay child or spousal support, it is open to them to strike such a bargain and memorialize it in a separation agreement:Turner v. DiDonato, 2009 ONCA 235, 95 O.R. (3d) 147, at para. 38. (Emphasis added) [30] Thus, I must determine whether or not the life insurance clause in the Birnies' Separation Agreement was intended to act as a pool offunds to "secure" Mr.

Birnie's spousal support obligations or whether it is a "stand-alone" benefit as described in Turner v. DiDonato [(2009), 2009 ONCA 235 , 95 O.R. (3d) 147, [2009] O.J. No. 1113 (C.A.)]. Fundamental principles of contractual

interpretation [31] The Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 , [2014] 2 S.C.R. 633, [2014]S.C.J. No. 53 re-examined the principles regarding contractual

interpretation. The parties did not provide me with Sattva at first instanceand I therefore asked for further submissions regarding same. At paras. 47 and 48 of Sattva, the court stated: Regarding the first development, the

interpretation of contracts has evolved towards a practical, common-sense approach not dominatedby technical rules of construction. The overriding concern is to determine "the intent of the parties and the scope of their understanding"(Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744, at para. 27, per LeBel J.;see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, at paras. 64-65,per Cromwell J.).

To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammaticalmeaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration ofthe surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own,because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . .

In a commercial contract it is certainlyright that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of thetransaction, the background, the context, the market in which the parties are operating. (Reardon Smith Line, at p. 574, per Lord Wilberforce) The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of therelationship created by the agreement (see Moore Realty Inc. v. Manitoba Motor League, 2003 MBCA 71, 173 Man.

R. (2d) 300, at para.15, per Hamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As stated by Lord Hoffmann in [page691] InvestorsCompensation Scheme Ltd. v. West Bromwich Building Society, [1998] 1 All E.R. 98 (H.L.): The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of itswords.

The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using thosewords against the relevant background would reasonably have been understood to mean. [p. 115] (Emphasis added) [32] At paras. 56 to 58 of the same decision, the court also stated: The Role and Nature of the "Surrounding Circumstances" I now turn to the role of the surrounding circumstances in contractual

interpretation and the nature of the evidence that can beconsidered. The discussion here is limited to the common law approach to contractual

interpretation; it does not seek to apply to or alterthe law of contractual

interpretation governed by the Civil Code of Québec. While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelmthe words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen adecision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. Theinterpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp.15 and 30-32).

While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate fromthe text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility Cellular Inc. (1997),

(BC CA), 101 B.C.A.C. 62). The nature of the evidence that can be relied upon under the rubric of "surrounding circumstances" will necessarily vary from case tocase. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution ofthe contract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledge of bothparties at or before the date of contracting.

Subject to these requirements and the parol evidence rule discussed below, this includes, inthe words of Lord Hoffmann, "absolutely anything which would have affected the way in which the language of the document wouldhave been understood by a reasonable man" (Investors Compensation Scheme, at p. 114).

Whether something was or reasonably ought tohave been within the common knowledge of the parties at the time of execution of the contract is a question of fact. (Emphasis added) [33] The court then examined the parol evidence rule at paras. 59 to 61: Considering the Surrounding Circumstances Does Not Offend the Parol Evidence Rule It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule.

The parol evidence ruleprecludes admission of evidence outside the words of the written contract that would [page692] add to, subtract from, vary, or contradicta contract that has been wholly reduced to writing (King, at para. 35; and Hall, at p. 53). To this end, the rule precludes, among otherthings, evidence of the subjective intentions of the parties (Hall, at pp. 64-65; and Eli Lilly & Co. v. Novopharm Ltd., (SCC), [1998] 2 S.C.R. 129, at paras. 54-59, per Iacobucci J.).

The purpose of the parol evidence rule is primarily to achieve finality andcertainty in contractual obligations, and secondarily to hamper a party's ability to use fabricated or unreliable evidence to attack a writtencontract (United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., (SCC),[1993] 2 S.C.R. 316, at pp. 341-42, per Sopinka J.). The parol evidence rule does not apply to preclude evidence of the surrounding circumstances.

Such evidence is consistent with theobjectives of finality and certainty because it is used as an interpretive aid for determining the meaning of the written words chosen bythe parties, not to change or overrule the meaning of those words. The surrounding circumstances are facts known or facts thatreasonably ought to have been known to both parties at or before the date of contracting; therefore, the concern of unreliability does notarise.

Some authorities and commentators suggest that the parol evidence rule is an anachronism, or, at the very least, of limited application inview of the myriad of exceptions to it (see for example Gutierrez v. Tropic International Ltd. (2002), (ON CA), 63O.R. (3d) 63 (C.A.), at paras. 19-20; and Hall, at pp. 53-64). For the purposes of this appeal, it is sufficient to say that the parol evidencerule does not apply to preclude evidence of surrounding circumstances when interpreting the words of a written contract. (Emphasis added) [34] The Supreme Court of Canada in Consolidated-Bathurst Export Ltd. v.

Mutual Boiler and Machinery Insurance Co., (SCC), [1980] 1 S.C.R. 888, [1979] S.C.J. No. 133, at p. 901 S.C.R. explained how to deal with competing

interpretations.2 [T]he normal rules of construction lead a court to search for an

interpretation which, from the whole of the contract, would appear topromote or advance the true intent of the parties at the time of entry into the contract. Consequently, literal meaning should not beapplied where to do so would bring about an unrealistic result or a result which would not be contemplated in the commercialatmosphere in which the insurance was contracted. Where words may bear two constructions, the more reasonable one, that whichproduces a fair result, must certainly be taken as the

interpretation which would promote the intention of the parties. Similarly, aninterpretation which defeats the intentions of the parties and their objective in entering into the commercial transaction in the first placeshould be discarded in favour of an

interpretation of the policy which promotes a sensible commercial result. (Emphasis added) [page693] [35] In BG Checo International Ltd. v. British Columbia Hydro and Power Authority, (SCC), [1993] 1 S.C.R. 12,[1993] S.C.J. No. 1, at para. 9, the Supreme Court discussed how it is that specific provisions within contracts may be read in thecontext of the contract as a whole: It is a cardinal rule of the construction of contracts that the various parts of the contract are to be interpreted in the context of theintentions of the parties as evident from the contract as a whole: K. Lewison, The

Interpretation of Contracts (1989), at p. 124; Chitty onContracts (26th ed. 1989), vol. 1, at p. 520. Where there are apparent inconsistencies between different terms of a contract, the courtshould attempt to find an

interpretation which can reasonably give meaning to each of the terms in question. Only if an

interpretationgiving reasonable consistency to the terms in question cannot be found will the court rule one clause or the other ineffective: Chitty onContracts, supra, at p. 526; Lewison, supra, at p. 206; Git v. Forbes (1921), (SCC), 62 S.C.R. 1, per Duff J. (as he thenwas), dissenting, at p. 10, rev'd (UK JCPC), [1922] 1 A.C. 256; Hassard v. Peace River Co-operative Seed GrowersAssociation Ltd., (SCC), [1954] 2 D.L.R. 50 (S.C.C.), at p. 54. In this process, the terms will, if reasonably possible, bereconciled by construing one term as a qualification of the other term: Forbes v.

Git, [1922] 1 A.C. 256; Cotter v. General PetroleumsLtd., (SCC), [1951] S.C.R. 154. A frequent result of this kind of analysis will be that general terms of a contract will beseen to be qualified by specific terms -- or, to put it another way, where there is apparent conflict between a general term and a specificterm, the terms may be reconciled by taking the parties to have intended the scope of the general term to not extend to the subject-matterof the specific term. Turner v. DiDonato

[36] The Ontario Court of Appeal applied the principles of contractual

interpretation to insurance clauses within separation agreements inTurner v. DiDonato. Epstein J.A., for a unanimous court, described the issue to be determined in that case as follows, at para. 1: This case concerns the

interpretation of a Separation Agreement . . . signed by Albert DiDonato and his first wife, Dilia DiDonato, in1995. Under the Agreement, Mr. DiDonato was obligated to maintain a life insurance policy benefiting Ms. DiDonato in the amount of$100,000. The question is whether this obligation was mere security for Mr. DiDonato's companion obligation to pay spousal and childsupport, or whether it constituted an independent obligation. (Emphasis added) [37] In a situation similar to the one before me, Mr.

DiDonato remarried after signing the separation agreement in question and passedaway before either of his ex-wife or his widow. As described in para. 7 of the decision, the separation agreement stated that Mr.DiDonato was to pay support for his first wife, and that he was to "pay to the wife the aforementioned spousal support [page694] untilthe wife becomes 65 years old". He was also to obtain life insurance as per para. 8 of the decision: 12. HUSBAND'S LIFE INSURANCE

(1) The husband owns or has an interest in a London Life policy of life insurance through his employment at Ontario Hydro in theamount of approximately $220,000.00.

(2) The husband warrants that he has not borrowed against the policy and that the full face value of the policy is available.

(3) The husband shall irrevocably designate under this policy: the wife as the sole beneficiary of $100,000.00, Mark DiDonato as thesole beneficiary of $50,000.00 and the wife in trust for Riccardo DiDonato as the sole beneficiary of $50,000.00. The husband shall filethese designations with the insurer as provided by the Insurance Act. The husband will give the wife a true copy of these designationswithin fourteen (14) days from the execution of this Agreement.

(4) The husband shall maintain the policy and shall maintain each of the aforementioned as beneficiary as set out in paragraph 12(3)hereof as long as the husband is obligated to support such beneficiary as provided in this Agreement following which the husband maythen deal with the applicable portion or portions of the policy as he wishes and the wife will then sign any document necessary tochange or revoke the applicable designation or designations of beneficiary.

(5) At the wife's request, the husband shall annually provide proof that the policy remains in effect and that he has not transferred it,borrowed against it, or pledged it as security.

(6) If the policy of insurance is no longer available to the husband through his employment, he shall immediately obtain replacementinsurance (ensuring that there is no gap in coverage beyond his control) for the amount referred to in paragraph 12(4) hereof, and shallmaintain the replacement policy for the period referred to in paragraph 12(4) hereof, and shall designate the beneficiary in accordancewith the terms of paragraph 12(3) hereof.

(7) If the husband defaults in payment of the premiums, the wife may pay any premiums and may recover them from the husband,together with all her costs and expenses, including her solicitor and client costs with respect to collection of the above.

(8) If the husband dies without his insurance in effect contrary to the Agreement, his obligation to contribute to the support of the wifeand children shall be a first charge on his estate. (Emphasis added) [38] Prior to his death, Mr. DiDonato changed the beneficiary designation of his life insurance policy such that Ms. DiDonato becamebeneficiary of only 43 per cent of the [page695] life insurance proceeds, with the rest going to others including his now-widow. Theparties agreed before the trial judge that 43 per cent of the proceeds was more than enough to satisfy Mr.

DiDonato's support obligations. [39] The trial judge found that the insurance proceeds were intended to be more than mere "security" for support payments. The Court ofAppeal described this finding, at paras. 17 to 22: In her reasons, the trial judge examined the provisions of paragraph 12 of the Agreement to determine whether Ms. DiDonato wasentitled to judgment against Mr. DiDonato's estate for his breach of para. 12(4). She started her analysis with the observation that byfailing to maintain a life insurance policy designating Ms. DiDonato as the beneficiary of $100,000, Mr.

DiDonato was in breach of theAgreement. She went on to observe, at para. 15, that "[h]ad he done so, [Ms. DiDonato] would have received $100,000 of life insuranceupon his death". Ms. Turner does not contest the accuracy of these statements. The trial judge then identified the principle that where a contract has been breached, the aggrieved party is generally entitled to be put inthe position in which he or she would have been had the contract been performed. She further noted that an estate may be liable indamages for a deceased's failure to maintain an insurance policy, citing Adams (Next friend of) v.

Adams Estate, 2001 ABQB 173, [2001] A.J. No. 285, 289 A.R. 345 (Q.B.), at para. 14; MacLean v. MacLean Estate, (NB KB), [1998]N.B.J. No. 26, 195 N.B.R. (2d) 303 (Q.B.), at para. 31; Phillips v. Spooner, (SK CA), [1980] S.J. No. 398, 4 Sask. R.103 (C.A.); and Shannon v. Shannon (1985), (ON SC), 50 O.R. (2d) 456, [1985] O.J. No. 2501 (H.C.J.). The trial judge's conclusion that Ms. DiDonato was entitled to judgment against the estate for the shortfall between what she received andthe $100,000 Mr. DiDonato was obligated to maintain for her benefit, rested on her

interpretation of para. 12(4). However, since Ms.Turner relies heavily on the wording of para. 12(8) in support of her argument before this court, I will first discuss the trial judge'sreasoning in relation to that paragraph.

The trial judge interpreted para. 12(8) as providing Ms. DiDonato with security in the sense that any support obligations Mr. DiDonato had at the time of his death would constitute a first charge against the estate assets. Significantly, the trial judge found that para. 12(8) did not derogate from Ms. DiDonato's right to sue the estate for breach of contract based on her failure to receive $100,000 in life insurance. Pivotal to the trial judge's conclusion that Ms. DiDonato was entitled to receive a total of $100,000 from the estate, was her

interpretation of para. 12(4) as a stand-alone provision whereby Mr. DiDonato agreed to maintain $100,000 of life insurance for the benefit of Ms. DiDonato until she turned 65. [ 40 ] The court then had to rule as to whether the trial judge's findings survived appellate scrutiny. Epstein J.A. found that the trial judge's findings were appropriate. At paras. 30 and 31, the court found that the "likely intention" of the parties was not driven by the simple fact that Mr. DiDonato's obligation to secure insurance ended when support obligations ended: Ms. Turner argues that the trial judge erred in her

interpretation of the Agreement by failing to consider the Agreement as a whole. Specifically, it is [page696] alleged that she failed to interpret para. 12(4) in the light of para. 12(8). Had the trial judge done so, she would have concluded that the "likely intention" of the DiDonatos when they entered into the Agreement was that the obligation to maintain a $100,000 life insurance benefit for Ms. DiDonato did not extend beyond the obligation to make support payments in the amounts specified under the Agreement. In Ms.

Turner's submission, this intention is apparent in para. 12(8) of the Agreement, which sets out the remedy in the event that Mr. DiDonato died "without his insurance in effect contrary to the Agreement". This remedy is restricted to any claim for support being a first charge on the estate. In my view, para. 12(8) has little relevance to the central issue. It is clear on its face that 12(8) is applicable only in the event that Mr. DiDonato did not maintain any insurance at all for Ms. DiDonato's benefit. This was not the case. Mr. DiDonato did maintain insurance for the benefit of Ms.

DiDonato; the insurance simply fell short of the agreed-upon amount. [ 41 ] At para. 32, the court described how the absence of specific language linking the insurance to support obligations affected the court's

interpretation of the agreement: In my view, the wording of the Agreement does not support Ms. Turner's position that para. 12(4) is linked to para. 12(8). The fact that the commitment to maintain the insurance coverage came to an end at the same time as the support obligations, does not, in itself, connect that commitment to the support obligations in the manner Ms. Turner advances. There is a conspicuous absence of express language to this effect. Nowhere in para. 12 is it stated that the insurance was intended solely as security for outstanding support obligations should Mr. DiDonato die before Ms.

DiDonato reached 65 years of age. (Emphasis added) [ 42 ] This paragraph is crucial to the analysis driving the case before me. From para. 32, of Turner v. DiDonato , it is clear that the test to be met is one of whether the SOLE purpose of the insurance clause is to act as "security" for support obligations. Absent such singularity of purpose, the court presumably is to find that the clause was intended to act as a "stand-alone" clause. [ 43 ] The logic supporting such an

interpretation is clear. One can easily envisage scenarios whereby an insurance clause is intended to not only "secure" support, but to also provide other forms of compensation to a recipient spouse. For example, spouses have been known to leave property to their former partners in their wills as a show of either affection, appreciation, guilt or regret. The same logic can apply to insurance clauses in separation agreements. Perhaps the life insurance is intended to simply "secure" future spousal support obligations.

Or perhaps the life insurance is intended to "secure" those obligations as well as show some form of appreciation to a former spouse for the reasons described above. Surely, this analysis must be undertaken on a case-by-case basis. [page697] [ 44 ] At para. 35, the court examined the failure of the parties' failure to include a provision enabling the payor spouse to reduce the amount of life insurance required as overall support obligations diminished: I further note that the language of para. 12 is inconsistent with Ms. Turner's contention that the life insurance policy was merely intended to be security for Mr.

DiDonato's diminishing spousal support obligations at the time of his death. As is apparent from the various components of para. 12, the Agreement specifically precludes Mr. DiDonato from adjusting the amount of insurance designated in favour of Ms. DiDonato to account for diminishing future support obligations or for any other reason. If the parties intended the insurance policy merely as security for the support payments, and nothing more, it would be unreasonable to preclude Mr.

DiDonato from adjusting the face value of the policy as the total value of his outstanding support obligations declined. [Emphasis added] [ 45 ] Finally, at paras. 36 and 37, the court examined the importance of the payor spouse's concession in oral argument and the effect this concession had on the court's analysis: Moreover, the

interpretation advanced by Ms. Turner would lead to a result in conflict with the overall intention of the Agreement. Before this court, counsel for Ms. Turner agreed that, had Mr. DiDonato been in compliance with his insurance obligation under the Agreement at the time of his death, Ms. DiDonato would have been entitled to receive the full $100,000 from the insurance company. This significant concession undercuts Ms. Turner's suggested

interpretation of the Agreement. I say this for two reasons. First, it is counter-intuitive that the parties intended for Ms. DiDonato to receive less under the Agreement as a result of Mr. DiDonato's breach than she would have received but for the breach. Second, counsel for Ms. Turner suggested that, had Mr. DiDonato died in compliance with his insurance obligation, the estate may have considered an action against Ms. DiDonato claiming that she had been unjustly enriched by any life insurance proceeds advanced in excess of the outstanding spousal support obligations. I cannot accept that the

parties intended that litigation would be necessary in order to finally resolve their affairs if Mr. DiDonato happened to die at a time when he had maintained his insurance obligation in compliance with the Agreement and at a time when the value of the insurance proceeds designated for Ms. DiDonato's benefit exceeded the amount of outstanding spousal support. This result would be at odds with the parties'express intention that the Agreement finally settle their respective rights and obligations.

Summary judgment [ 46 ] The rules governing

summary judgment clearly permit the determination of parties' contractual relationship without the need of a trial. Rules 16(6) , (6.1) and (6.2) of the Family Law Rules state: [page698] No Genuine Issue for Trial

(6) If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order accordingly. Powers

(6.1) In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties, and the court may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. Oral Evidence (Mini-trial)

(6.2) The court may, for the purposes of exercising any of the powers set out in subrule (6.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation. [ 47 ] The analysis guiding

summary judgment was clarified in Hryniak v. Mauldin , [2014] 1 S.C.R. 87 , [2014] S.C.J. No. 7 , 2014 SCC 7 . At paras. 49 and 50, the Supreme Court of Canada described the "genuine issue" test as follows: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. These principles are interconnected and all speak to whether

summary judgment will provide a fair and just adjudication. When a

summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute. Application to the case before me [ 48 ] I must first decide whether

summary judgment permits me to determine whether the clause requiring Mr. Birnie to secure life insurance was intended to act solely as "security" for Mr. Birnie's spousal support payments or whether it was a "stand-alone" clause. In the circumstances of this case, it is clear to me that there is no genuine issue for trial. As per Sattva and Hryniak , the court does not necessarily require witnesses to [page699] provide viva voce evidence in order to interpret a separation agreement. [ 49 ] Given Consolidated-Bathurst , I must understand the intention of the parties in entering into the Separation Agreement.

The overriding intention of the parties is clear: they wished to have their affairs settled once and for all, assuming no material change in circumstance. Indeed, the parties represented that they "wish[ed] to provide for the orderly settlement of their affairs and their respective rights and obligations". They acted upon this intention by making certain covenants and by releasing each other -- and their estates -- from further litigation including litigation under the SLRA . I must make my decision while keeping the parties' intention in mind. [ 50 ] For her part, Ms.

Larmer submitted that the following points suggest that the insurance policy was intended solely as a means of "securing" spousal support: (

a) the insurance clause was found under the "Spousal Support" heading of the Separation Agreement, which heading was intended to be used as an interpretive guide; (

b) the obligation to hold insurance only exists during such time as Mr. Birnie was obligated to pay support; and (

c) Ms. Birnie's statement in her e-mail that the insurance was, at least in part, intended to act as "security" for spousal support. [ 51 ] At first blush, points (

a) and (

b) appear to have some purchase, but it must be noted that very similar considerations were in play in Turner v. DiDonato where the Ontario Court of Appeal upheld a ruling that the impugned clause was intended to operate as a "stand- alone" clause. As such, while these points support Ms. Larmer's proposed

interpretation of the Separation Agreement, they are of only moderate weight when compared to those factors pointing in favour of the "stand-alone"

interpretation.

[ 52 ] With respect to point (c), the Court of Appeal appears to state that, in order to be subjected to SLRA clawback, an insurance clause in a Separation Agreement must be intended to act solely as "security". A concession that the insurance is intended to act as "security" does not rise to the level of conceding that insurance is intended to act solely as security. Indeed, "stand-alone" clauses can presumably have a variety of purposes including "security" for spousal support. Ms. Birnie's e-mail does not indicate that the parties intended the insurance to act solely as security.

Accordingly, while it is clear that the insurance clause was intended by all to act in part as "security", Ms. Birnie's e-mail does not assist me in determining whether that [page700] was the "sole" purpose of same. I therefore ascribe this e-mail no weight since it simply does not go far enough so as to be of value. [ 53 ] As per Ms. Birnie, the following points suggest that the insurance policy was intended as a "stand-alone" clause: (

a) the Separation Agreement contains a lack of express language indicating that the sole purpose of securing insurance was to "secure" support; (

b) the release

section of the contract suggests that the Separation Agreement was intended to be a full and final settlement of all issues, including SLRA matters. The

preamble of the contract echoes this intention. The intent to resolve matters precludes a finding that the insurance was intended solely as "security" for support since such an

interpretation would likely lead to further litigation; and (

c) there is no "draw down" clause whereby Mr. Birnie could lower the amount of insurance he was forced to secure as his total lifetime support obligations presumably lessened. 3 [ 54 ] These points have considerable weight. First, had the insurance provision simply been intended to act solely as "security" for support, there would undoubtedly have been a "draw down" clause permitting Mr. Birnie to reduce the quantum of support he was obligated to secure. Equally, there would undoubtedly have been express language describing that intention.

These facts are particularly weighty since both parties were represented by legal counsel when they drafted the Separation Agreement. [ 55 ] B.G. Checo International Ltd. suggests that I may interpret a contract to find that the Birnies "intended the scope of the general term ['orderly settlement'] to not extend to the subject-matter of the specific term ['the need to secure insurance']": at para. 9. I note, however that, as per Consolidated-Bathurst , "an

interpretation which defeats the intentions of the parties and their objective in entering into the commercial transaction in the first place should be discarded in favour of an

interpretation of the policy which promotes a sensible commercial result": at p. 901 S.C.R. In the family law context, the Consolidated-Bathurst analysis would demand that, where two

interpretations of a contractual clause are available, the

interpretation that is [page701] consistent with the intentions of the parties ought to normally be favoured over an

interpretation that is inconsistent with same. [ 56 ] While arguments exist that the parties' sole intention was to have the insurance act as mere "security", a reading of the whole contract makes clear that such an

interpretation would be inconsistent with the parties' stated goals. The parties wanted their matrimonial issues to come to an end. They effectively stated as much in the

preamble of the Separation Agreement. They provided each other with expansive releases. These are clear examples where the parties acted upon their intentions. [ 57 ] The Separation Agreement contains other, more subtle, examples where the Birnies sought to achieve certainty and finality in their affairs. They defined spousal support specifically such that minor fluctuations in Mr. Birnie's income short of a material change of circumstance would not alter the amount of spousal support owing. Indeed, there was no clause requiring the annual exchange of notices of assessment.

Absent a material change of circumstance, the only variation to the quantum of spousal support owing would be for COLA adjustments which is a fairly mechanical calculation. This rigidity in the calculation of spousal support is consistent with the view that the Birnies wished to have an "orderly settlement of their affairs" inclusive of expansive releases and without the necessity of making minor variations to the quantum of support owing.

Absent express language to the contrary, it would be illogical for the Birnies to draft a Separation Agreement that sought finality in several crucial areas but left open the likelihood of further litigation in another important area ( i.e ., the SLRA clawback). Ms. Larmer's position thus fails to give adequate weight to the parties' intentions as described in the Separation Agreement. [ 58 ] Accordingly, it is clear to me that there is no genuine issue for trial insofar as the insurance obligation in the Separation Agreement is not intended to act solely as "security" for spousal support.

Instead, the impugned clause is a "stand-alone" clause whereby Ms. Birnie would be entitled to receive $500,000 upon Mr. Birnie's passing. I accept that the parties structured this clause to both "secure" support as well as accomplish other ends. Any other

interpretation is inconsistent with (1) the other terms of the Separation Agreement; (2) the releases, especially clause 17(

c) of the Separation Agreement which explicitly states that the parties may deal with their estates "free from any claim or action by the other under the Succession Law Reform Act ". Ms. Larmer's position ignores the plain wording of this

section of the Separation Agreement; [page702] (3) the stated intention of the parties in the

preamble of the Separation Agreement; (4) the lack of any "drawdown" clause whereby Mr. Birnie could reduce the amount of insurance he was required to secure over time; and (5) the lack of explicit language, as per Turner v. DiDonato , expressing such a "sole" intent. [ 59 ] Accordingly, I reject Ms. Larmer's argument and find on a balance of probabilities that para. 5(

g) of the Separation Agreement mandating that Mr. Birnie secure insurance naming Ms. Birnie as irrevocable beneficiary is a "stand-alone" term of the contract.

Summary judgment is granted for Ms. Birnie in the sum of $500,000 minus funds received. 4 Retroactive Support

[60] The Supreme Court of Canada outlined four factors to consider when determining retroactive child support obligations in S. (D.B.) v.G. (S.R.), supra, at para. 133: (1) the reasonableness of the excuse for why support was not sought earlier; (2) the conduct of the payor parents; (3) the circumstances of the child; and (4) the hardship occasioned by a retroactive order on the payor parent. [61] The court in S. (D.B.) also noted that it will generally be inappropriate to award retroactive support variations for more than threeyears prior to formal notice save and except in circumstances where the payor had engaged in blameworthy conduct: at paras. 123 and125. [62] In Kerr v.

Baranow, 2011 SCC 10 , [2011] 1 S.C.R. 269, [2011] S.C.J. No. 10, the Supreme Court applied the S. (D.B.)principles to spousal support with appropriate modifications:

(1) S. (D.B.) factors apply as modified to spousal support (circumstances of the spouse are relevant as opposed to circumstances of thechild); [page703] (2) presumptively, the date of the claim being issued is the start date for support, unless there is a reason to order otherwise; (3) the failure to bring a temporary motion should not be penalized as we should be encouraging people to avoid the cost of bringingtemporary motions.

This is particularly the case where the claimant moves the matter quickly to trial after obtaining disclosure; (4) there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legalobligation to look out for the separated spouse's legal interests. Thus, concerns about notice, delay and misconduct generally carry moreweight in relation to claims for spousal support; and

(5) S. (D.B.) emphasized the need for flexibility and a holistic view of each matter on its own merits; the same flexibility is appropriatewhen dealing with "retroactive" spousal support. [63] It is clear from Ms. Birnie's May 2014 e-mail that, but for her illness, Ms. Birnie would have undertaken some remedial action toenforce her rights with respect to the COLA provision of the Separation Agreement. I do not know whether there were any discussionsregarding the COLA prior to the e-mail. As such, I accept that Ms. Birnie was unable, as of May 2014, to bring an application seekingCOLA adjustments due to illness.

I am unwilling to award COLA adjustments retroactively beyond June 1, 2011 (or three years prior toMr. Birnie's e-mail) since I have no evidence to suggest that same is warranted. [64] With that being said, I question whether the COLA adjustments would be subsumed within my findings regarding the insuranceclause. Specifically, it occurs to me that, had Mr. Birnie secured the insurance described in para. 5(

g) of the Separation Agreement, it ispossible that Ms. Birnie would only be entitled to the $500,000 payout without any additional COLA payments. If that is the case, whyshould Ms. Birnie be entitled to $500,000 plus COLA adjustments in the present case? The parties did not make submissions dealingwith this concern. They will

schedule a return date with me forthwith to address this issue, unless they can resolve same amongstthemselves. Costs [65] I will deal with the costs once the COLA issue is resolved. Motion granted. Notes 1 Ms. Birnie submits that the $76,268.83 figure accounts for tax considerations given the parties' annual incomes and the effect of alump sum payment. 2 Sattva did not overrule this proposition of law: see Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., [2016] 2 S.C.R.23, [2016] S.C.J. No. 37, 2016 SCC 37, at para. 78; and 3091-5177 Québec inc. (Éconolodge Aéroport) v.

Lombard General InsuranceCo. of Canada, [2018] S.C.J. No. 43, 2018 SCC 43, 297 A.C.W.S. (3d) 77, at para. 53.

3 I think it is obvious that all support obligations, even indefinite ones, have a diminishing net present value given the ever-shrinking life expectancy of all support recipients. 4 Counsel are to determine the net amount owing from the funds held in court. If they are not able so to do, they will secure a date before me forthwith. End of Document