Benjamin Franklin famously said, “The only two certainties in life are death and taxes.”
A recent decision has caused me to think about the importance of considering what will happen when (not if) one of the parties to a divorce action or domestic contract dies in the event of the parties to a court case or a contract dies.
In the case of Blacklock v. Tkacz , 2021 ONCA 630, 2021 Carswell 13012, the husband and wife separated in 1973 and were divorced in 1978. The divorce order required the husband to pay child support to the wife for the two children of the marriage.
The husband died in 2019. After his death, the wife attempted to vary the 1978 divorce order to retroactively increase the amount of child support payable by the husband. The application was brought against the estate of the husband.
The wife’s application was dismissed.
On the face of it this is not surprising given the delay by the wife and the fact that both children were adults and completely independent by the time the wife brought her application. However, the court also noted that support orders made under the Divorce Act do not automatically bind the estate of the payor in the same manner as similar orders made under the Family Law Act do. For a support order under the Divorce Act to bind the estate of the payor there must be a specific provision in the order to that effect.
The court concluded that since the original order was not binding on the estate of the payor, it ceased to have any effect upon the death of the payor and so could not be varied retroactively.
So, it is important to ensure that support orders under the Divorce Act specifically include a provision that they will bind the estate of the support payor.
Would the situation be any different if the support obligation were created by way of a domestic contract?
It is a principle of contract law that the death of a party terminates a contract requiring personal performance.
As far back as the 1500’s in the case of Hyde v. Dean & Canons of Windsor, (1597), Cro. Eliz. 552, 78 E.R 798 it was held that “a covenant lies against an executor in every case, although he be not named; unless it be such a covenant as is to be performed by the person of the testator, which they cannot perform.”
And in Farrow v. Wilson (1869), (1868-69) L.R. 4 C.P. 744 (Eng. C.P.) [1861-73] All E.R. Rep. 846, Willes J. stated, “The general rule of law is that, in the case of a contract for personal service, the death of either party puts an end to the contract unless there is a stipulation, express or implied, to the contrary.”
So, the general rule in contract law is that the obligation of one party under a contract for personal services ceases to exist upon the death of that party unless the contract provides otherwise.
Section 7(2) of the Family Law Act states that entitlement under the property division part of the Act is personal as between spouses. This suggests that a domestic contract that deals with the division of property will not be enforceable in the event of the death of one of the parties – unless there is a specific provision in the contract to that effect.
Similarly, the courts have generally interpreted an agreement regarding support to be one that requires personal performance. As a result, support obligations pursuant to a separation agreement will cease upon the payor’s death unless the agreement specifically provides that the obligation is binding upon the estate of the payor.
In conclusion it is important to turn one’s mind to the impact of both death and taxes when drafting separation agreements or seeking support in a divorce application.