COURT OF APPEAL FOR ONTARIO

CITATION:
Demers v. Monty, 2012
    ONCA 384

DATE: 20120607

DOCKET: C53780

Laskin, Cronk and Blair JJ.A.

BETWEEN

Lynda Demers, Keith Verdenik, Jonelle Demers, a
    minor under the age of eighteen, Kevin Verdenik, a minor under the age of
    eighteen years and Kate-Lyn Verdenik, a minor under the age of eighteen years,
    by their Litigation Guardian Keith Verdenik

Plaintiffs (Respondents)

and

Dan Monty and B.R. Davidson Mining &
    Development Ltd.

Defendants (Appellants)

Nestor E. Kostyniuk, for the appellants

Robert E. Somerleigh and Ruby E. Van Bendegem, for the
    respondents

Heard: November 2, 2011

On appeal from the judgment of Justice D.C. Shaw of the Superior
    Court of Justice, dated May 2, 2011, with reasons reported at 2011 ONSC 2046,
    106 O.R. (3d) 513.

Laskin J.A.:

A.

introduction

[1]

In April 1999, the respondent, Lynda Demers, was injured in a car
    accident.  She has sued the defendants for damages for her personal injuries.
    At the time of the accident, Ms. Demers worked for St. Josephs Care Group.  She
    continued to work there after the accident until February 2003 when she stopped
    due to disability.  She then applied for and received two pension disability
    benefits: Canada Pension Plan (CPP) disability benefits and Hospitals of
    Ontario Pension Plan (HOOP) disability benefits.

[2]

The parties brought a motion on an agreed statement of facts and on consent
    under rule 21.01(1)(a) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, to determine whether as a matter of law the CPP and HOOP disability benefits
    would be deductible under s. 267.8(1)2 of the
Insurance Act
, R.S.O.
    1990, c. I-8, from  any award for loss of income or loss of earning capacity,
    and if so, whether the deduction should be gross or net of income tax.  Section
    267.8(1)2 provides:

267.8(1) In an action for
    loss or damage from bodily injury or death arising directly or indirectly from
    the use or operation of an automobile, the damages to which a plaintiff is
    entitled for income loss and loss of earning capacity shall be reduced by the
    following amounts:

2. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for income loss or loss of earning capacity
    under the laws of any jurisdiction or under an income continuation benefit
    plan.

[3]

The motion judge, Shaw J., thoroughly analysed the legislative history
    of s. 267 and the relevant case law, and determined that neither benefits were
    deductible.  He concluded that these benefits were paid because of Ms. Demers
    disability; they were not received for loss of income or loss of earning
    capacity.  He also determined, that if he were wrong, and either or both
    benefits were deductible, the deduction should be net of the income tax Ms.
    Demers pays on these benefits.
[1]

[4]

The defendants appeal and ask to vary the motion judges decision.  They
    accept that neither the CPP nor HOOP disability benefits compensate Ms. Demers
    for loss of income.  However, they submit that both benefits compensate her for
    loss of earning capacity and are therefore deductible under the statute.  The
    defendants also submit that the deduction should be gross rather than  net of
    income tax.

[5]

Ms. Demers asks that we uphold the decision of the motion judge for
    either of two reasons.  First, she submits that she receives CPP and HOOP
    benefits simply because of her disability and not for any loss of earning
    capacity.  Second, she submits that she does not receive these benefits in
    respect of the incident, that is in respect of the car accident in which she
    was injured.  Ms. Demers also submits that the motion judge correctly decided
    that any deduction should be net of income tax.

[6]

I would dismiss the appeal.  I agree with the conclusion of the motion
    judge.  My reasons will focus on the specific arguments raised in this court.

B.

the cpp and hoop disability benefits

[7]

Ms. Demers had to apply for and meet certain specified criteria to be
    entitled to receive these benefits.  However, and this is the important point,
    her entitlement did not depend on her being employed at the time of her
    application, on proving an income loss, or, indeed, on suffering an income loss:
    see
Cugliari v. White
(1998), 38 O.R. (3d) 641 (C.A.), at pp. 647-48;
    and
Scott v.

State Farm Mutual Automobile Insurance Co.
(2006),
    39 C.C.L.I. (4th) 318 (Ont. Div. Ct.), at para. 11.

(a)

CPP Disability
    Benefits

[8]

Ms. Demers was entitled to CPP disability benefits because:

·

She met a minimum qualifying period of work  valid earnings and
    contributions for four of the last six calendar years, and;

·

She suffered a severe and prolonged mental or physical
    disability under s. 42(2)(a) of the
Canada Pension Plan
, R.S.C.,
    1985, c. C-8.

(b)

HOOP Disability
    Benefits

[9]

To receive HOOP benefits Ms. Demers was required to:

·

Be a member of the plan for two years and make the required contributions
    before the date of her disability;

·

Resign from her employment and apply for the benefits; and

·

Be totally and permanently disabled.

Ms. Demers met these requirements.

C.

background

(a)

Common Law Principles

[10]

Section
    267.8 of the
Insurance Act
modified the common law on the
    deductibility of benefits from tort awards.  I begin with a brief review of the
    common law principles.  I do so to show that the CPP and HOOP benefits Ms.
    Demers receives would not be deductible at common law.  Their non-deductibility
    at common law provides the context for assessing the impact of s. 267.8 of the
Insurance
    Act
.

[11]

The
    common law principles on the deductibility of benefits are well established and
    are discussed at length by Justices McLachlin and Cory in their reasons in
Ratych
    v. Bloomer
, [1990] 1 S.C.R. 940, and
Cunningham v. Wheeler
, [1994]
    1 S.C.R. 359.  The main goal of tort law is to compensate injured plaintiffs
    for the full extent of their losses but not to over compensate them.  This
    prohibition on over compensation, known as the rule against double recovery,
    has allowed for limited exceptions.  The exception applicable to this appeal is
    the private insurance exception, also known as a collateral benefits rule.

[12]

Under
    this exception, payments received under an insurance policy are not deducted
    from an injured plaintiffs tort award even though the effect of this exception
    may be to over compensate the plaintiff. The exception originated in the
    English case of
Bradburn v. Great Western Railway Co.
, [1874-80] All
    E.R. Rep. 195, and has been consistently applied by Canadian courts.  For
    example, in
Boarelli v. Flannigan
(1973), 3 O.R. 69, this court
    affirmed that in personal injuries cases collateral benefits should not be
    taken into account in assessing damages for loss of earnings or loss of earning
    capacity.

[13]

Then,
    in
Canadian Pacific Ltd. v. Gill
, [1973] S.C.R. 654, at p. 670, the
    Supreme Court of Canada extended the private insurance exception to CPP payments
    because they are so much of the same nature as contracts of insurance.  In
    other words, they are akin to payments under a private insurance policy.  In
    the later case of
Guy v. Trizec Equities Ltd.
, [1979] 2 S.C.R. 756,
    the Supreme Court relied on
Canadian Pacific Ltd. v. Gill
in holding
    that payments under a company pension plan were not deductible from a tort
    award.

[14]

In
Ratych v. Bloomer
and then in
Cunningham v. Wheeler
, the
    Supreme Court revisited the collateral benefits rule and discussed the
    rationale for maintaining it and for limiting its reach.  McLachlin J., who
    wrote for the majority in
Ratych
and for the minority in
Cunningham
,
    would have limited the scope of the exception to non-indemnity payments  that
    is payments of a previously determined amount on proof of a specified event,
    whether or not the plaintiff has incurred a pecuniary loss.  Indemnity payments
     that is payments intended to compensate an injured plaintiff for a pecuniary
    loss  would be deductible from a tort award.  Cory J., who wrote for the minority
    in
Ratych
and for the majority in
Cunningham
, maintained the
    private insurance exception that began with
Bradburn
.

[15]

For
    the purpose of this appeal, whether one adopts Cory J.s approach or McLachlin
    J.s approach, both the CPP and the HOOP disability benefits Ms. Demers
    receives would not be deductible at common law.  They come within the private
    insurance exception, which the Supreme Court of Canada expressly extended to
    CPP benefits. And under McLachlin J.s approach, they are non-indemnity
    payments.  They are paid to Ms. Demers on account of her disability and do not
    depend on her having incurred an income loss.

[16]

Thus,
    the principle question on this appeal is whether s. 267.8(1)2 overrides the non-deductibility
    of these benefits at common law.  To put this question in context, it is
    necessary to consider the legislative history of s. 267.8 together with this
    courts decision in
Cugliari v. White
.

(b)

Compensation Under
    the
Insurance Act

[17]

In
    his
Report of Inquiry into Motor Vehicle Accident Compensation in Ontario
,
    vol. 1 (Ministry of the Attorney General and Ministry of Financial
    Institutions, 1988) at pp. 428-44, Justice Coulter Osborne recommended that the
    collateral benefits rule be abolished. He proposed that collateral benefits in
    the nature of indemnity payments from either public or private sources... be
    deducted from the relevant component of a tort award made to the injured person
    so that there will be no overcompensation (pp. 442-43).

[18]

After
    the Osborne report, the Ontario government brought in a succession of statutory
    regimes for compensating persons injured in car accidents.  Three of these
    regimes that have dealt with the deductibility of collateral benefits are
    relevant to the issues on this appeal: Bill 68, the Ontario Motorist Protection
    Plan (OMPP), which applied to car accidents between October 23, 1989 and
    December 31, 1993; Bill 59, which governs this appeal, and applied to car
    accidents after November 1, 1996 and before October 1, 2003;
[2]
and Bill 168, which was passed in 2002.

(i)

Bill 68, OMPP

[19]

Section
    267(1)(c), enacted under Bill 68, modified the collateral benefits rule.  It
    provided that damage awards be reduced by payments for loss of income:

267(1) The damages
    awarded to a person in a proceeding for loss or damage arising directly or
    indirectly from the use or operation of  motor vehicle shall be reduced by,

...

(c) all payments that
    the person has received or that were or are available for loss of income under
    the laws of any jurisdiction or under an income continuation benefit plan and
    by the present value of any such payments to which the person is entitled; ...

(ii)

Bill
    59

[20]

The
    car accident in which Ms. Demers was injured occurred in 1999, and thus falls
    under the Bill 59 regime.  Section 267.8(1)2, the provision in issue on this
    appeal, was enacted as part of Bill 59 and further modified the collateral
    benefits rule.  For convenience I again set it out:

267.8(1) In an action for
    loss or damage from bodily injury or death arising directly or indirectly from
    the use or operation of an automobile, the damages to which a plaintiff is entitled
    for income loss and loss of earning capacity shall be reduced by the following
    amounts:

2. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for income loss or loss of earning capacity
    under the laws of any jurisdiction or under an income continuation benefit
    plan.

[21]

As
    is evident from comparing the two provisions, s. 267.8(1)2 amended s. 267(1)(c)
    of the OMPP in three ways:

·

Loss of earning capacity is added to subparagraph 2 so that
    damages are to be reduced by payments for loss of income or loss of earning
    capacity;

·

Subsection (1) now identifies the type of damages to which the
    reduction applies - damages for income loss and loss of earning capacity;

·

The phrase in respect of is added to subparagraph 2 so that
    only payments the plaintiff receives in respect of the incident are to be
    deducted.

(iii)

Bill 168

[22]

Under
    Bill 168, O. Reg. 461/96 was amended by O. Reg. 312/03 in 2002.  Section 5.2 of
    the amendment expressly eliminated the collateral benefits rule (or insurance
    exception) for CPP disability benefits.  Section 5.2 states:

5.2  For the
    purposes of paragraph 2 of subsection 267.8(1), paragraph 2 of subsection
    267.8(9) and subclause 267.8(12)(a)(ii) of the Act, payments in respect of an
    incident for income loss or loss of earning capacity under an income
    continuation benefit plan shall be deemed to include the following payments, if
    the incident occurs on or after October 1, 2003:

1. Payments of
    disability pension benefits under the
Canada Pension Plan
. ...

[23]

Thus,
    if the accident in which Ms. Demers was injured had occurred after the
    beginning of October 2003, her CPP disability benefits would have been
    deductible.  The effect, if any, of this amendment was an important issue
    before the motion judge and on this appeal.

(iv)

Cugliari v. White

[24]

In
Cugliari v. White
, this court addressed the question whether CPP
    disability benefits should be deducted from an injured plaintiffs damages award.
    The accident giving rise to the litigation occurred in 1990 and, therefore, was
    governed by the OMPP (Bill 68).  However, this courts decision was rendered in
    1998, during the currency of the Bill 59 regime.

[25]

Charron
    J.A., writing for the panel, held that the CPP disability benefits were not
    deductible either at common law or under s. 267(1)(c) of the Act.  She
    recognized that the purpose of s. 267(1)(c) was to narrow the scope of the
    collateral benefits rule.  She grounded her decision in the distinction drawn
    by McLachlin J. in
Cunningham v. Wheeler
between indemnity and
    non-indemnity payments.  As she rightly said, at p. 647 of her reasons, the
    words payments  for loss of income [in s. 267(1)(c)] do import a notion of
    indemnification.  However, she held that CPP disability benefit payments are
    non-indemnity payments: the conditions for eligibility do not require that the
    recipient be employed at the time of the disability or that the recipient
    demonstrate a pecuniary loss.  Therefore, deducting these benefits would not
    advance the legislative purpose of eliminating double recovery (at p. 647).

[26]

Having
    concluded that the CPP disability benefits were not deductible under s.
    267(1)(c), Charron J.A. then added at p. 648: CPP disability benefits can
    arguably be seen to compensate for the loss of earning capacity but they cannot
    reasonably be construed as intending to indemnify a disabled person for loss of
    income.  This additional comment, perhaps made with an eye to the wording of
    s. 267.8(1)2, became a focal point of the present appeal.

D.

the  issues

(a)

Are the CPP Disability Benefits Ms. Demers Receives Deductible From
    Payments for Loss of Earning Capacity?

[27]

I
    do not accept the appellants argument that Charron J.A.s comment in
Cugliari
controls the answer to this question.  Her comment was obiter as the case
    before her was decided under the previous statutory regime, the OMPP.  That
    regime did not provide for the deductibility of payments for loss of earning
    capacity.  Because the panel did not have to decide this question, Charron J.A.
    did not analyse whether CPP disability benefits should be deducted from awards
    for loss of earning capacity.

[28]

Equally,
    however, I do not consider that my own reasons in
Kosanovic v. Wawanesa
    Mutual Insurance Co.
(2004), 70 O.R. (3d) 161 (C.A.), control the answer
    to this question.
Kosanovic
was decided under the Bill 59 regime.
    However, the main issue in that case was whether the plaintiff was required to
    deduct disability benefits received under a private insurance policy from the
    amount he received under the unidentified driver coverage in the standard
    automobile policy  we said no.  Although I did refer to s. 267.8(1)2 of the
    Act, and
Cugliari
, I did not consider the deductibility of payments
    for loss of earning capacity.

[29]

Nonetheless,
    I would answer no to the question whether CPP disability benefits should be
    deducted from payments for loss of earning capacity for either of two reasons.
    The first reason rests on the principle that clear and unambiguous legislative
    language is required to change common law rights.  The addition of the term
    loss of earning capacity in the Bill 59 regime does not clearly and
    unambiguously change the non-deductibility of CPP benefits at common law.

[30]

The
    second reason I would answer no is that CPP disability benefits are not paid
    in respect of the incident; they are paid in respect of Ms. Demers
    disability.  Thus, on the wording of s. 267.8(1)2 no deduction is required.

(i)

The Addition of Loss of Earning Capacity in s. 267.8(1)2 Does Not
    Clearly and Unambiguously Change the Common Law

[31]

As
    I have discussed, at common law CPP disability benefits are not deductible from
    a tort award.  They fall within the private insurance exception.  The
    legislature can, of course, change the common law.  However, as Charron J.A.
    noted in
Cugliari
at para. 20: The common law rights which existed
    prior to the enactment of s. 267 should only be displaced by clear and
    unambiguous language.

[32]

This
    statement reflects one of the presumptions of legislative intent: in
    interpreting a statute, we start from the presumption that the legislature does
    not intend to change the common law:  see Ruth Sullivan,
Statutory
    Interpretation
, 2d ed. (Toronto:  Irwin Law, 2007) at 244-45.  McLachlin
    J. gave effect to this presumption in her dissenting reasons in
R. v.
    McIntosh
, [1995] 1 S.C.R. 686, at para. 73, dealing with the self-defence
    provisions of the
Criminal Code
.  She wrote: To effect such a
    significant change, Parliament would have made its intention clear.  This it
    did not do.

[33]

I
    take a similar view of s. 267.8(1)2.  If the legislature intended to change the
    non-deductibility of certain benefits, such as CPP disability benefits, it did
    not make that intention clear.  The addition of loss of earning capacity does
    not demonstrate a clear intention to change to the common law because the jurisprudence
    has not treated the phrase in a consistent way.  Some cases have differentiated
    loss of earning capacity from loss of income; but others have treated the terms
    interchangeably.

[34]

An
    example of a case where the two phrases have been distinguished is the decision
    of the Nova Scotia Court of Appeal in
M.(L.M.) v. Nova Scotia (A.G.)
, 2011
    NSCA 48, 303 N.S.R. (2d) 243, at para. 63.  There, the court endorsed the
    following excerpt from the trial judges reasons:

There is, it should be noted, a
    distinction between loss of earning capacity and lost future income.  This
    point was discussed in
Exide Electronics Ltd. v. Webb
(1999), 177
    N.S.R. (2d) 147., where Freeman J.A., for the court, wrote, at para. 44, that
    Loss of earning capacity is loss of a capital asset; it can be compensated for
    even when it is not accompanied by a reduction in income, as in a situation
    where a plaintiff can return to work, but with a disability that restricts the
    scope of other employment that might become available in the future.  By
    contrast, The simplest illustration for an award to replace future income is
    total permanent disability, which requires an assessment based on earning
    expectations over the plaintiffs working lifetime.  Similarly, in
Abbot
    v. Sharpe
, 2007 NSCA 6, Saunders J.A. said, at para. 156:  this award
    was intended to compensate for diminished earning capacity which is seen as a
    loss to a capital asset, as opposed to a mathematical calculation of projected
    future lost income.  In my view loss of earning capacity is the relevant
    approach in the present case.

[35]

On
    this view, damages for loss of earning capacity compensate for the loss of a
    capital asset.  They do not depend on proving a pecuniary loss.  Instead, they
    are triggered by a particular disability, which impairs the ability to work.
    In this sense, CPP disability benefits tend to duplicate damages for loss of
    earning capacity.  Neither requires proving a pecuniary loss; both depend on
    proving a disability.  As the one tends to duplicate the other, the one should
    be deductible from the other.

[36]

However,
    this view is not uniformly held.  This court treated loss of income and loss of
    earning capacity interchangeably in
Walker v. Ritchie
(2005), 25
    C.C.L.I. (4th) 60.  So too did the British Columbia Supreme Court in
MacKenzie
    v. Rogalasky
, 2011 BCSC 54.

[37]

In
    his text,
Personal Injury Damages in Canada
, 2nd ed. (Toronto: Thomson
    Canada Ltd., 1996), Ken Cooper-Stephenson summarized much of the case law when
    he wrote at p. 138:

As far as concerns lost income, the
    courts fluctuate between the notion of loss of earnings and loss of earning
    capacity, not for the most part intending any aspect of the substance of an
    assessment to depend on the particular wording, since damages are universally
    quantified on the basis of what the plaintiff
would have
, not what he
    or she
could have
earned absent the injury.

As the motion judge noted, McLachlin J. cited this
    exact excerpt with approval in her reasons in
M.B. v. British Columbia
,
    2003 SCC 53, [2003] 2 S.C.R. 477, at para. 49.

[38]

Cooper-Stephenson
    elaborated on the failure of the courts to distinguish between loss of income
    and loss of earning capacity at 138-9:

And if there were real substance to
    the terminological debate, something significant could have been made of it in
Ratych
    v. Bloomer
on the issue of the deductibility of collateral benefits, but
    nothing was: the basic principle is that damages for lost working capacity are
    reduced by actual benefits received  indicating that the notion of a capacity
    and actual moneys are considered
in parmi materia
.  If anything, the
    judgments of both McLachlin and Cory JJ. in
Ratych
suggest that loss
    of earnings or loss of income is the preferable terminology.  They support
    the notion that the award is being made for the loss of a stream of income
    rather than an abstract capacity. [Footnotes omitted.]

[39]

He
    eventually concluded at 214:

All this, however, is terminology.
    And the terminology, as between loss of earnings and loss of earning
    capacity is used quite indiscriminately, as if nothing would depend on their
    choice.

[40]

On
    this view, an award for loss of earning capacity, like an award for loss of
    income, compensates for an actual pecuniary loss.  It is an indemnity payment.
    As the CPP disability benefits are non-indemnity payments they should not be
    deducted.

[41]

My
    point here is not to come down on one side or the other of this debate.  What
    the debate shows is that the addition of the term loss of earning capacity in
    s. 267.8(1)2 did not clearly and unambiguously change the common law.
    Non-indemnity payments such as CPP disability benefits, therefore remain
    non-deductible under Bill 59.

[42]

That
    is where the amendment to the regulation in 2002 becomes important.  That
    amendment removes any doubt about the deductibility of CPP benefits. They are
    now expressly deductible.

[43]

I
    agree with the appellants that a mere amendment of a regulation does not imply
    anything about the previous state of the law, and especially does not imply
    that the previous state of the law was different:  see
Legislation Act,
    2006
, S.O. 2006, C. 21, Sched. F, s. 56.  Equally, however, the court
    should not presume the law is the same despite the amendment:  see
Vijeyekumar
    v. State Farm Mutual Automobile Insurance Co.
(1998), 38 O.R. (3d) 590 (C.J.
    (Gen. Div.)) at p. 610; affd (1999), 44 O.R. (3d) 545 (C.A.).  The amendment
    standing alone is a neutral consideration.  In this case, however, it turns an
    unclear and ambiguous legislative intent into a clear and unambiguous
    legislative intent.  As Bill 59 did not clearly and unambiguously change the
    non-deductibility of CPP disability benefits at common law, I would, on this
    ground alone, dismiss the appeal.

(ii)

CPP Disability Benefits are Not Paid to Ms. Demers In Respect of the
    Incident

[44]

To
    be deductible under s. 267.8(1)2 payments must be in respect of the
    incident.  I agree with Ms. Demers submission that the CPP disability
    benefits she receives are payments in respect of her disability, not payments
    in respect of the incident  that is the accident for which she claims damages
    for her personal injuries.  On this ground too, I would dismiss the appeal.

[45]

This
    ground relies on the reasons of Iacobucci J. in
Sarvanis v. Canada
,
    2002 SCC 28, [2002] 1 S.C.R. 921.  In that case, an inmate while working at a
    federal penitentiary, sustained serious personal injuries for which he sued the
    Crown in tort.  He also qualified for and received CPP disability benefits,
    which were paid to him out of the Consolidated Revenue Fund.  In the light of
    the inmates receipt of CPP benefits, the court had to decide whether his tort
    claim was barred by s. 9 of the
Crown Liability and Proceedings Act
,
    R.S.C. 1985 c. C-50.  That section provided:

9 No proceedings lie against the
    Crown or a servant of the Crown in respect of a claim if a pension or
    compensation has been paid or is payable out of the Consolidated Revenue Fund
    or out of any funds administered by an agency of the Crown in respect of the
    death, injury, damage or loss in respect of which the claim is made.

[46]

The
    Supreme Court decided that s. 9 did not bar the inmates claim.  The decision
    turned on the meaning of the words in respect of:  in other words, were the
    CPP disability benefits paid in respect of the  injury, damage or loss
    suffered by the inmate?  Iacobucci J. acknowledged at para. 20 that in respect
    of is a broad phrase.  It signals an intent to convey a broad set of connections.
    Yet, it is not a phrase of infinite reach (para. 22).  It has to be
    interpreted in its context.

[47]

In
    s. 9 of the federal statute, the phrase in respect of is tied to a list of
    specific events: death, injury, damage or loss.  Iacobucci J. concluded that
    the tort claim would be barred only if the pension was given for the same event
    for which the tort claim was made.  He held at para. 31 that CPP benefits were
    not contingent on the events specified in s. 9, but depended solely on the
    disabled condition of a qualified contributor:

Keeping in mind that s. 9 refers to
    pensions and compensations in respect of particular kinds of
events
, I am of the opinion that disability benefits
    under the CPP do not fall within its scope on the ordinary meaning of the
    words.  I concede that the words in respect of may encompass more than
    direct compensation for loss.  However, I do not believe that the CPP
    makes its payments on the same
basis
as s. 9 seems
    to require.  That is, s. 9 contemplates payment in some manner contingent
    on the occurrence of an event of death, injury, damage or loss.  A CPP
    disability benefit, by contrast, is not contingent on events at all, but on the
    present disabled condition of a qualified contributor under 65 years of age who
    makes an application for payment.  Whether or not the present serious and
    long-term disability that entitles an otherwise qualified contributor to
    receive CPP disability benefits happens to be the
result
of death, injury, damage or loss is not relevant to the determination of
    eligibility.  The only relevant question, assuming a person has met the
    conditions of eligibility with respect to age and contribution status, is the
    status of the applicant as disabled at the time the application is made.

[48]

The
    context in which the phrase in respect of is found in s. 267.8(1)2 of the
Insurance
    Act
is similar to its context in s. 9 of the
Crown Liability and
    Proceedings Act
.  The phrase is tied to the incident, in this case the car
    accident in which Ms. Demers was injured.  Her CPP benefits, as in
Sarvanis
,
    are not tied to the incident.  Instead, they depend on her disability and on
    meeting the qualifications for receiving these benefits.  Accordingly, I
    conclude that CPP disability benefits are not paid to Ms. Demers in respect of
    the incident and therefore are not captured by s. 267.8(1)2.

(b)

Are the HOOP Disability Benefits Ms. Demers Receives Deductible From
    Payments for Loss of Earning Capacity?

[49]

The
    analysis of the question whether HOOP disability benefits are deductible does
    not differ from the analysis for CPP disability benefits.  Thus, Ms. Demerss
    HOOP benefits, too, are not deductible from payments for loss of earning
    capacity.

[50]

There
    is one distinction between the two benefits.  Unlike the case with CPP
    disability benefits, there is no amending regulation to now make HOOP benefits
    deductible.  However, the absence of an amendment does not change the analysis.

E.

conclusion

[51]

I
    agree with the motion judge that neither the CPP disability benefits nor HOOP
    disability benefits that Ms. Demers receives are deductible under s. 267.8(1)2
    of the
Insurance Act
from any tort award for loss of income or loss of
    earning capacity.  It is, therefore, unnecessary to determine whether if these
    benefits were deductible, the deduction would be net or gross of income tax.

[52]

I
    would dismiss the appeal, with costs in the agreed amount of $8,500 plus
    applicable taxes.

Released: June 7, 2012

JL                                                                     John
    Laskin J.A.

I
    agree E.A. Cronk J.A.

I
    agree R.A. Blair

[1]
The motion judge also determined that the interest paid to Ms. Demers on
    overdue statutory income replacement benefits is not deductible from an award
    of damages for income loss and loss of earning capacity.  This determination
    has not been appealed.

[2]
Bill 164, which applied to car accidents between January 1, 1994 and October
    31, 1996, precluded injured persons from suing the owner or occupant of a car
    for economic loss.  As the motion judge pointed out at para. 7 of his reasons,
    the issue of collateral benefits therefore did not arise under Bill 164
    accidents.


COURT OF APPEAL
    FOR ONTARIO

CITATION:

DeMichino v. Musialkiewicz, 2012
    ONCA 458

DATE: 20120628

DOCKET: C53250

Juriansz, LaForme and Epstein JJ.A.

BETWEEN

Michele DeMichino represented by his Guardian of Property,
The Bank of Nova Scotia Trust Company

Respondent (Plaintiff)

and

Bogdon
    Musialkiewicz, 1315437 Ontario Inc., Bill
    Thompson Transport Inc., 2810026
    Canada Limited c.o.b. as Frederick Transport Inc.

(Defendants)

and

Gary Neinstein and Neinstein and Associates LLP

Appellants

Paul J. Pape and David S. Steinberg, for the appellants

Archie Rabinowitz and Eric N. Hoffstein, for the
    respondent

Heard: April 17, 2012

On appeal from the order of Justice Lois B. Roberts of
    the Superior Court of Justice, dated January 7, 2011, with reasons reported at
    2011 ONSC 142.

Epstein
    J.A.:

[1]

The issue the parties initially brought
    before the court in this appeal was whether the motion judge committed a
    reviewable error in exercising her discretion to deny a law firm a premium on
    its account to its client.  During argument, the parties reached an agreement
    with respect to the legal costs in issue and proposed a settlement on the basis
    of this agreement.  As a result, the issue before the court became a matter of
    approving the settlement.

BACKGROUND

[2]

In the underlying action, Mr. DeMichino
    sought damages for catastrophic injuries he sustained in a car accident that
    took place in April 2003. His injuries were so severe that he was declared
    incapable of managing property. The respondent,
the Bank of Nova Scotia Trust Company, has acted
    as Mr. DeMichinos guardian of property since its appointment in September
    2008.

[3]

In November 2006, the appellants,
    Neinstein and Associates, the law firm that formerly acted for Mr. DeMichino,
    and Mr. Neinstein, the lawyer at the firm who had principle carriage of the
    file, negotiated a settlement of his tort claim whereby Mr. DeMichino would
    receive $4,000,000.  This amount was in addition to the approximately $2,000,000
    in Statutory Accident Benefits that the appellants also secured on Mr. DeMichinos
    behalf.

[4]

Because Mr. DeMichino is a person
    under a disability, court approval of the tort settlement, including the
    appellants fees and disbursements, was required under Rule 7.08 of the
Rules
    of Civil Procedure
, R.R.O., Reg. 194
.
The appellants claimed fees on
    a partial indemnity basis.  Pursuant to a court order, the Public Guardian and
    Trustee (PGT) reviewed the proposed settlement and concluded that the
    appellants had achieved a good result for the client, providing for his future
    care, based on projected needs, and recommended that the settlement be
    approved by the court, including the partial indemnity fees claimed by the
    appellants.

[5]

The appellants also sought a premium
    above the partial indemnity fees totalling $561,320.75 plus GST, and a further
    $29,512.81 in disbursements. This brought the total fees sought to $913,000
    plus disbursements of $79,512.81. The appellants claimed to be entitled to a
    premium on the basis of a number of factors including their assuming the risk
    associated with the outcome and their financing the tort action for three
    years. The PGT considered the claim for legal fees and disbursements and decided
    that the appellants were entitled to a premium but that more information was
    needed to determine the amount.

[6]

Court approval of the initial amount
    the PGT recommended was obtained and was paid to the appellants.  The court
    also ordered that $624,512.81, being the amount of the sought after fee premium
    plus the remainder of the disbursements the appellants incurred, be paid to
    Neinstein and Associates LLP, in trust, pending the PGTs further review and
    court approval.

[7]

Upon completion of its review, the
    PGT recommended approval of $432,000 in additional legal fees plus $25,920 for GST
    and $29,512.81 in disbursements yielding a total further payment to the
    appellants of $487,432.81, beyond the $368,000 already approved and paid.

[8]

After receiving this
    recommendation, but prior to obtaining court approval, the appellants
    transferred $562,426.41 from their trust account to their general account. This
    amount included the $487,432.81 the PGT recommended plus an additional amount
    for fees and disbursements the appellants claimed for work performed for Mr.
    DeMichino in related proceedings.   The appellants notified the PGT and Mr.
    DeMichinos guardians of property of this transfer and then later, when the
    necessity of court approval before transferring the funds out of trust became
    apparent, the appellants returned the entire amount to trust.

[9]

The appellants then sought court
    approval of the additional amount of $487,432.81 on a
nunc pro tunc
basis.

[10]

Notwithstanding that all parties
    consented to the order sought, the motion judge denied the appellants claim
    for any additional fees and reimbursement of the remainder of the disbursements
    incurred on behalf of their client.  This appeal is from that decision.

THE
MOTION JUDGES REASONS

[11]

The motion judge assessed the
    appellants claim on a
quantum meruit
basis. Given her view that such an
    assessment engages equitable principles and her finding that the appellants
    breached their fiduciary duty to Mr. DeMichino by transferring the amounts in
    issue into their general account prior to receiving court approval, the motion
    judge concluded that the appellants did not come to court with clean hands.  As
    a result, the motion judge held that they were not entitled to any additional fees
    or repayment of the rest of their disbursements.

[12]

The motion judge went further.
    She also concluded that even without the breach of fiduciary duty, the
    appellants were not entitled to any further compensation for the work they did
    for Mr. DeMichino because excessive time was spent on the file, much work could
    have been done at lower rates, the action was not complicated and there was little
    risk that the appellants would not be compensated for their services.

THE APPEAL

[13]

Only the appellants and the
    respondent, guardian of Mr. DeMichinos property, participated in the appeal. Mr.
    Pape advanced a compelling argument that included the submission that the
    appellants conduct, if warranting sanction at all, did not warrant forfeiture
    of the total amount claimed.  At the conclusion of his submissions Mr. Pape
    proposed that the appeal be allowed and the additional legal costs be resolved
    on a solomonesque basis giving his client a further $216,000 in fees, and
    disbursements in the amount of $29,512.

[14]

At the outset of his argument, Mr.
    Rabinowitz, counsel for the respondent, candidly advised the court that he was
    in a difficult position.  Before the motion judge, his client had consented
    to the amounts claimed by the appellants and recommended by the PGT for
    additional fees and disbursements.  At this juncture, Mr. Rabinowitz conceded
    that the appellants were entitled to repayment of their disbursements.  In
    relation to the fee premium, he advised the court as follows: Im sticking to
    the exact same position that we took to the motions judge.  Counsel went on to
    explain that he was still consenting, but for the purposes of the appeal his
    clients position was that the order of the motion judge was reasonable and
    there was no palpable and overriding error.

[15]

It was in the context of these
    comments that the possibility of a settlement was raised.  After a brief recess,
    counsel for both parties advised the court that their clients had reached a
    settlement in accordance with Mr. Papes closing submissions as to the
    appropriate disposition of the appeal.

[16]

After some discussion with the
    court, it was agreed that court approval of the proposed settlement was necessary.
    It was agreed that this court was in the position to determine whether it ought
    to be granted.

THE REQUEST FOR COURT APPROVAL

[17]

It is important to bear in mind
    that the aspect of the settlement for which approval is being sought is limited
    to a premium in legal fees above what has already been approved as appropriate
    on a partial indemnity basis. No issue is taken, nor is one available, as to
    the appellants clear entitlement to be reimbursed for the disbursements they
    incurred on behalf of their client.

[18]

With respect to a claim for a fee
    premium, this court laid down the following principles in
Christian Brothers
    of Ireland in Canada (Re)
(2003), 68 O.R. (3d) 1 (C.A.):

Many factors may bear on whether lawyers are entitled to a
    premium over their hourly rates. These factors include the difficulty and
    complexity of the case, the responsibility assumed by the lawyer, the amount in
    issue, the importance of the case to the client, the skill shown by the lawyer,
    the result achieved, the client's ability to pay and the lawyer's corresponding
    financial risk The judge or officer assessing or approving a lawyer's account
    must, in exercising discretion, take into account and weigh these factors in
    deciding whether to award a premium (at para. 17).

See also:
Ontario (Ministry of Transportation) v. Tripp

(1999), 123 O.A.C. 278.

[19]

As reconfirmed by the Court of
    Appeal in
Wu Estate v. Zurich Insurance Co.,
(2006), 268 D.L.R. (4th)
    670 (Ont. C.A.), leave to appeal to the Supreme Court of Canada dismissed,
    [2006] S.C.C.A. No. 289, the duty of the court in considering whether or not to
    approve a settlement reached on behalf of a party under a disability is to
    protect the party and to ensure that the settlement is in his or her best interests
    (at para. 10).

[20]

It goes without saying that any
    premium paid to counsel who helped a plaintiff in a tort action achieve a
    resolution of his or her claim will reduce the funds available to meet the
    plaintiffs needs and otherwise compensate him or her for damages sustained.  However,
    as important as those interests are, they must be balanced against the need to
    provide fair compensation for lawyers who assist in achieving the result.

[21]

Ensuring, to the extent possible,
    that the lawyers contribution to the result is appropriately recognized is
    important for several reasons.  First, lawyers are entitled to fair
    compensation for services rendered and to reimbursement of their cost outlays.
    Second, lawyers who are willing to assume carriage of files in circumstances
    where the result is not certain and where unpaid fees and paid disbursements
    may have to be financed over a long period of time contribute to access to
    justice:
Christian Brothers
, at para. 21.

[22]

Against the background of these
    observations, I have concluded that approval of the proposed settlement is justified.

[23]

First, the proposed settlement totals
    just over half of what was recommended by an experienced representative in the
    PGT after obtaining additional information and carefully reviewing the premium
    claimed.  Of equal, if not greater, significance is the respondents support of
    the appellants position.  While the court must not simply rubber-stamp such
    endorsements, it should, in the absence of evidence that would suggest
    impropriety or lack of skill, demonstrate confidence in such representatives
    and give the recommendations considerable weight.  See:
Royal Bank of
    Canada v. Soundair Corp.
(1991), 4 O.R. (3d) 1 (C.A.),
Christian
    Brothers
, at para. 25.

[24]

Finally, in the light of the
    strength of Mr. Papes argument on behalf of the appellants, the outcome of the
    appeal was far from certain.

[25]

Focusing on Mr. DeMichinos best
    interests and taking into account the role the appellants played in protecting
    those interests as well as the other factors I have noted, I am of the view
    that the proposed settlement should be approved particularly given the
    acknowledgment of counsel for the respondent that Mr. MeMichinos needs will be
    met notwithstanding the additional payment to the appellants of the amount
    contemplated by the proposed settlement.

COMMENT AND DISPOSITION

[26]

I close these reasons with a brief
    comment about the services Mr. Neinstein provided to his client.  The motion
    judge commented that Mr. Neinstein brought his expertise to bear in securing
    the result that he did for his client and she endorsed the view expressed by
    the PGT that the result achieved was good. While Mr. Neinstein erred in his
    handling of a portion of the money that went into his trust account, there is
    no evidence that he tried to conceal the transfer; in fact, he issued invoices
    to Mr. DeMichinos guardians of property showing the money paid out from trust.
    Finally, I note that there is no evidence that Mr. Neinsteins client was adversely
    affected by the error: when the error was recognized the funds improperly
    transferred were immediately returned to trust.

[27]

I would allow the appeal and set
    aside para. 2 of the motion judges order.  I would approve the proposed
    settlement that provides that the appellants are entitled to further legal fees
    in the amount of $216,000 plus $29,512 (inclusive of tax) for disbursements.

[28]

Subject to the costs of this
    appeal set out below, I would order that the solicitors for the respondent pay
    to the appellants, from the funds it is holding in escrow:

(a)

the sum of $216,000 plus GST of $15,120 for fees, plus $29,512 for
    disbursements, inclusive of tax;

(b)

interest in the amount of $12,686.37; and

(c)

interest earned on the sum of $273,318.37 from May 20, 2011 to the date
    the aggregate amount is paid to the appellants.

[29]

I would also order that the
    balance of the funds held in the escrow account together with all interest
    earned be paid to the respondent as guardian of Mr. DeMichino.

[30]

On consent, the respondent is
    entitled to its costs of this appeal fixed in the amount of $20,000 including
    disbursements and applicable taxes.  This amount will be deducted from the
    amount payable to the appellants.

Gloria Epstein J.A.

J
uriansz J.A.: (Concurring in the result)

[31]

I
    have read the reasons of Epstein J. A. and while l agree that the proposed
    settlement should be approved, l am unable to concur with the reasons that she
    proposes.

[32]

I
    do not agree with my colleagues description of the appellants arguments on
    appeal as compelling.
Nor do I regard the Guardians
    position on appeal as difficult given that below it had consented to the
    appellants motion. The Guardians duty is at all times to defend the fund and
    its opposition to the appeal was in fulfillment of that duty.

[33]

I
    would approve the settlement simply on the basis that the Guardian of the
    respondents property, recognizing the uncertainty of any litigation, entered
    into an agreement to settle the appeal. In doing so, the Guardian exercised its
    judgment to protect the fund against the prospect that the appeal might be
    allowed. The Guardian indicates that the respondents needs will be met
    notwithstanding the additional payment to the appellants pursuant to the
    proposed settlement. l see no reason to regard the Guardians settlement of the
    appeal as unreasonable or reflecting any lack of skill in attending to the best
    interests of the respondent.

[34]

While
    as a technical matter, the appeal must be allowed in order to implement the
    settlement, both parties explicitly acknowledged the appeal was to be allowed
    on consent and not on the merits. I would allow the parties to take out an
    order of this court to implement the settlement with costs to the respondent in
    the amount of $20,000 all inclusive as agreed by counsel.

Released:

GE                                                  Russell
    Juriansz J.A.

JUN 27 2012                                    I agree
    H.S. LaForme J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Dice v. Dice
    Estate, 2012 ONCA 468

DATE: 20120629

DOCKET: C54003 & C54197

Rosenberg, Simmons and Armstrong JJ.A.

BETWEEN

Rachel Lindsey Dice, Wesley James Dice and Serra
    Jean Butts

Applicants (Respondents)

and

Suzanne Dice, Estate
    Trustee of the Estate of James Edgar Dice, deceased
, Marlene Marguerite
    Buck, Estate Trustee of the Estate of Joseph Wesley Dice, deceased, Eileen Mary
    Dice,
Marlene Marguerite Buck
,
Suzanne Dice
and Stacey Dice

Respondents (
Appellants
)

Mark Abradjian and Brad
    Wiseman, for the appellant Marlene Marguerite Buck

Richard Skibinski and Sean
    Heeley, for the appellants Suzanne Dice, Estate Trustee of the Estate of James
    Edgar Dice, deceased, and Suzanne Dice

Matt Moloci and Mike
    Stanton, for the respondents

Heard: January 4, 2012

On appeal from the order of Justice James R.H. Turnbull
    of the Superior Court of Justice, dated June 14, 2011, with reasons reported at
    2011 ONSC 3641, 337 D.L.R. (4th) 499.

Simmons
    J.A.:

(1)

Introduction

[1]

The main issue on this appeal is what meaning, if any, should be
    given to the phrase
per stirpes
 as it appears in the will of the
    late Joseph Wesley Dice (Mr. Dice).

[2]

In his will, Mr. Dice left a life interest in the residue of his
    estate to his wife (Mrs. Dice). Further, he directed that, following his
    wifes death, his Trustees should attend to her burial, pay her funeral
    expenses, and then divide what was left of the residue of his estate equally,
    between [his] son, James Edgar Dice, and [his] daughter, Marlene Marguerite
    Buck, per stirpes.

[3]

James Edgar Dice (Eddie) survived his father but predeceased
    his mother, the life tenant of his fathers estate. After Eddies death, a question
    arose as to who would be entitled to Eddies share of the residue of Mr. Dices
    estate upon Mrs. Dices death. The answer to this question turns largely on
    what, if any, meaning should be given to the phrase
per stirpes
 in
    the residue clause.

[4]

Although Eddie had two children with his first wife and one child
    from another relationship, he named his second wife as the sole executrix and
    beneficiary of his estate. Accordingly, the people potentially entitled to Eddies
    share of the residue of his fathers estate were:

(i)      Eddies sister,
    Marlene  the surviving residuary beneficiary under      Mr. Dices will;

(ii)      Eddies second
    wife, Suzanne  the executrix and sole beneficiary of   Eddies estate; and

(iii) Eddies three children
     his lineal descendants.

[5]

On an application to interpret Mr. Dices will, Turnbull J. held
    that the residue of Mr. Dices estate did not vest in the residuary
    beneficiaries until the life tenants death, which occurred in 2010.

[6]

The application judge acknowledged that in
Lau v. Mak Estate
(2004), 10 E.T.R. (3d) 152 (Ont. S.C.), a case that involved a will with a similarly
    worded residue clause, Cullity J. determined that no meaning should be given to
    the phrase
per stirpes
. Cullity J. reached this conclusion because,
    construed in accordance with its ordinary meaning, a gift to named children is
    a gift to a class of a single generation  whereas the phrase
per stirpes

    implies at least the possibility of an intergenerational gift. Accordingly, Cullity
    J. concluded that, when used in conjunction with a gift to named children, the
    phrase
per stirpes
 creates a contradiction in terms.

[7]

Nonetheless, in this case, the application judge found that
    various aspects of the will, including Mr. Dices use of the words
per
    stirpes
, indicated an intention to benefit the families of each of his
    children equally if either of his children predeceased his wife. Relying on
    these factors to interpret the will, the application judge declared that
    Eddies children are entitled to Eddies share of the residue of Mr. Dices
    estate.

[8]

Mr. Dices daughter, Marlene, and Eddies second wife, Suzanne,
    each appeal from the application judges decision. Suzanne appeals both in her
    personal capacity and also in her capacity as Trustee of Eddies estate.

[9]

Marlene and Suzanne both argue that none of the factors relied on
    by the application judge demonstrate an intention to benefit subsequent
    generations if one of Mr. Dices children predeceased his wife. Moreover, although
    they disagree about whether
any
meaning can be given to the phrase
per
    stirpes
, they both argue that the interpretation of the phrase adopted by
    the trial judge is contrary to the weight of authority.

[10]

Relying on
Lau
, Marlene submits that the phrase
per
    stirpes
is a technical term with a precise meaning and that no meaning can
    be attributed to it if it is used incorrectly.

[11]

According to Marlene, properly understood
per stirpes
refers
    to a method of distributing testamentary gifts by branch or stock of the family
    (or
stirps
), and the term is used primarily in relation to gifts
    that may encompass more than one generation (such as a gift to the testators
    issue alive on the testators death).

[12]

A
per stirpes
distribution means that each branch of the
    family is entitled to only one share of the gift to be distributed among the
    members of the branch. Under a gift to issue alive at the testators death
per
    stirpes
, this would mean the children of a deceased child of the testator
    would share the deceased childs share of the gift. This is in contrast to a
per
    capita
distribution under which each lineal descendant of the testator
    alive at the testators death would receive one share of the gift.

[13]

Moreover, because the term
per stirpes
implies at least
    the possibility of a intergenerational gift, when it is used in conjunction with
    a gift that
prima facie
designates first generation descendants only
    (such as a gift to the testators children, or, as here, a gift to the
    testators son and daughter, by name), a contradiction in terms arises.

[14]

Marlene contends that, in these circumstances, the term
per
    stirpes
must be ignored because it would be speculative to attribute any
    meaning to it. She claims that Eddie was entitled to a contingent vested interest
    in the residue of the estate and his interest divested because he failed to
    survive the life tenant. As she is the sole surviving contingent beneficiary
    and as she survived the life tenant, she is entitled to the whole of the
    residue of Mr. Dices estate.

[15]

Suzanne relies on the presumption of early vesting and submits
    that Eddies share of the residue vested upon Mr. Dices death. Considered in
    this context, she argues that a gift to named children of the testator
per
    stirpes
implies a gift to succeeding generations, but only if one of the
    residuary beneficiaries predeceases the testator. As Eddie survived Mr. Dice,
    the residue vested in Eddie, and not succeeding generations. As Suzanne is the
    sole beneficiary under Eddies will, she is entitled to Eddies share of the
    residue of Mr. Dices estate.

[16]

For the reasons that follow, I would dismiss the appeals.

(2)

Background

[17]

Joseph Wesley Dice died on July 20, 1975, leaving a will dated
    July 14, 1975. Mr. Dice was survived by: his wife, Eileen Mary; by his
    daughter, Marlene, her husband, Ronald, and their three children; and by his
    son, Eddie

[18]

In his will, Mr. Dice named his son, Eddie, and his daughter,
    Marlene, as his executors and trustees. In addition to the clause providing for
    the gift of the residue discussed above, the will includes the following
    provisions that are significant for this appeal:

·

a direction to transfer his cottage to his daughter, Marlene,
    for her sole use absolutely;

·

a direction to deliver to each of [his] grandchildren alive, at
    the time of [his] death, the sum of $1,000.00 provided that the sum would be
    invested by each childs parent until the child reached age 21;

·

a direction to hold his house in trust for his wife until she
    could no longer reside there and then to transfer it to his son, Eddie; and

·

a direction to hold the residue in trust for his wife, Eileen
    Mary, during her lifetime, and to use for her benefit the income and as much of
    capital as his executors and trustees consider advisable.

[19]

The residue clause, discussed earlier, reads as follows:

Upon the death of my said wife,
Eileen
    Mary Dice
, I direct my said Trustees to arrange for the burial of my
    said wife and to deduct the amount thereof from the residue of my estate. I
    then direct that my said Executors and Trustees divide the rest, residue and
    remainder of my estate, if any, after the death of my said wife,
Eileen Mary Dice
, equally, between my son,
James
    Edgar Dice
, and my daughter,
Marlene Marguerite Buck
,
    per stirpes. [Underlining in the original.]

[20]

Eileen Mary Dice executed a will on December 12, 1975. Her will
    stipulates that the residue of her estate should be divided equally between her
    son, Eddie, and her daughter, Marlene. The will also provides that if Eddie
    should predecease her, his share shall not lapse but shall be divided equally
    among his issue, if any, then living at the time of my decease. Further, her
    will states that if Marlene should predecease her, Marlenes share shall not
    lapse but shall be transferred and conveyed to [Marlenes] husband, Ronald
    Edwin Buck (underlining omitted). Finally, her will provides that if both
    Marlene and Marlenes husband should predecease her, Marlenes share shall not
    lapse but shall be divided equally among their issue, if any, then living at
    the time of [Mrs. Dices] decease.

[21]

Eddie married his first wife in 1979. The couple had two
    children, Wesley James Dice and Rachel Lindsey Dice. Eddie and his first wife
    divorced in 1990.

[22]

For the purposes of the application, it was alleged, but not
    admitted, that Eddie had a third child, Serra Jean Butts, from another
    relationship in 1982.

[23]

Eddie married his second wife, Suzanne Dice, in February 1991. He
    died on July 3, 2000 and in his will named Suzanne as the sole heir of his
    estate.

[24]

The life tenant of Mr. Dices will, his wife, Eileen Mary Dice,
    died on March 11, 2010.

(3)

The Application
    Judges Reasons

[25]

The application judge began his analysis by referring to the
    principle that it is necessary to consider the will in its entirety in order to
    ascertain the testators intention. On this point, he found that the overriding
    intention of the Mr. Dice, the testator, was to look after his wife during her
    lifetime and then treat his two children relatively equally.

[26]

In reaching this conclusion, the application judge relied on the
    following three factors:

(i)      Mr.
    Dice left his house to his son once his wife could no longer live in it and he
    left his cottage to his daughter;

(ii)     Mr.
    Dice named both of his children as his executors and trustees; and

(iii)     Mr.
    Dice left the residue of his estate to both his children
per stirpes
.

[27]

In addition, although he said it was not determinative, the
    application judge reviewed a will made by Mrs. Dice shortly after Mr. Dices
    death. He observed that Mrs. Dice also created a scheme of equal treatment for the
    couples two children, but that she used clearer language to do so. Rather than
    using the phrase
per stirpes
, Mrs. Dice stipulated that if Eddie
    predeceased her, his share of the residue of her estate should go to his issue.

[28]

Although the application judge acknowledged the presumption of
    early vesting, he found that the language of the residue clause rebutted this
    presumption. Specifically, the clause indicated Mr. Dices intention that the
    gift of the residue should not vest until his wifes death and until her
    burial had been fully effected and paid for.

[29]

To this effect, the application judge relied on two sets of words
    in the residue clause. First, he emphasized the use of the words:
[u]pon the death of my wife

I direct my said Trustees to
    arrange for the burial  and to deduct the amount thereof from the residue
    (emphasis added by the application judge). Second, he noted the words:
I then direct that my said Executors and Trustees divide the
    rest, residue and remainder of my estate
 (emphasis added by the
    application judge).

[30]

In effect, the application judge found that the specific language
    used by Mr. Dice indicated that, after his wifes death, Mr. Dice wished his
    trustees to proceed in certain steps (burying his wife, deducting the costs
    from the residue and
then
dividing the residue between the residuary
    beneficiaries). The application judge concluded that these specific expressions
    of Mr. Dices intention rebutted the presumption of early vesting.

[31]

Finally, the application judge determined that the words
per
    stirpes
were included in the will because Mr. Dice realized that one or
    both of his children could predecease his wife. In light of this possibility,
    the phrase was included as part of Mr. Dices effort to treat his children
    equally.

[32]

In particular, the application judge found that Mr. Dice wanted
    each branch of his family, Eddies and/or Marlenes, to be treated equally. He
    observed that:

If [Mr. Dice] had intended that Eddies share should pass to
    Marlene or vice versa in the event that one of them predeceased his/her mother,
    the will could easily have been drafted to say that by use of the words
per
    capita
.

[33]

In the result, the application judge declared that Eddies
    children are entitled to Eddies share of the residue of Mr. Dices estate.

(4)

Issues

[34]

Marlene and Suzanne raise the following issues on appeal:

(i)      the application judge erred in his
    findings concerning Mr. Dices                              testamentary
    intentions;

(ii)      the application judge erred in
    relying on Mrs. Dices will to construe                        Mr. Dices
    intentions; and

(iii)     the application judge erred in
    failing to find that the phrase
per                     stirpes
 in
    the residue clause should be ignored or given a restricted                             meaning.

[35]

Suzanne raises the following additional issue:

(i)      the application judge erred in
    failing to find that Eddies share of the                        residue vested
    in Eddie indefeasibly on the testators death.

(5)

Analysis

A.

Principles to be applied in interpreting the will

[36]

The parties agree on the proper approach to the interpretation of
    a will. First, and foremost, the court must determine the intention of the
    testator when he made his will. The golden rule in interpreting wills is to
    give effect to the testators intention as ascertained from the language that
    was used:
National Trust Co. Ltd. v. Fleury
, [1965] S.C.R. 817 at p.
    829
;
Brown Estate (Re)
,
    [1934] S.C.R. 324, at p. 330;
Singer v. Singer
, [1932] S.C.R. 44, at
    p. 49. Underlying this approach is an attempt to ascertain the testators
    intention, having regard to the will as a whole.

[37]

Where the testators intention cannot be ascertained from the
    plain meaning of the language that was used, the court may consider the
    surrounding circumstances known to the testator when he made his will  the
    so-called armchair rule:
Re Burke
, [1960] O.R. 26 (C.A.), at p. 30;
Re
    Shamas
, [1967] 2 O.R. 275 (C.A.), at p.279, citing
Perrin v. Morgan
,
    [1943] A.C. 399 (U.K. H.L.), at pp. 420-21.

[38]

Under this rule, the court sits in the place of the testator,
    assumes the same knowledge the testator had of the extent of his assets, the
    size and makeup of his family, and his relationship to its members, so far as
    these things can be ascertained from the evidence presented. The purpose of
    this exercise is to put the court in, as close as possible to, the same
    position of the testator when make his last will and testament.

B.

Discussion

[39]

The central question on this appeal is whether the application judge
    erred in holding that use of the phrase
per stirpes
 in the residue
    clause demonstrated an intention by Mr. Dice to treat his childrens stocks,
    or branches of the family, equally in the event that either of them predeceased
    their mother.

(a)

Other evidence relied
    on by the application judge

[40]

As I have noted, Marlene and Suzanne also argue that the
    application judge erred in relying on other factors to support his conclusion
    that Mr. Dice intended to treat Eddie and Marlenes branches of the family
    equally.

[41]

In particular, they say that the trial judge erred in taking Mrs.
    Dices will into consideration in interpreting Mr. Dices will. Further, they
    point out that the gifts of real property to Marlene and Eddie were not gifted
    over to their respective children if either of them pre-deceased Mr. Dice; nor
    did the trusteeship granted to Marlene and Eddie under the will pass to their
    children.

[42]

I am inclined to agree that the overall scheme of Mr. Dices will
    does not provide much, if any, support for the conclusion that Mr. Dice
    intended Eddie and Marlenes share of the residue to go to their respective
    children if either of them predeceased their mother, the life tenant.

[43]

Although Mr. Dices will treats his two children more or less
    equally, that tells us very little about his intentions in the event that one
    of his children should predecease his wife. For example, did he want the
    deceaseds childs share to go to the deceased childs estate, which might
    imply a gift to the deceased child's spouse, or did he want the deceased
    child's share to go to the deceaseds childs children? The fact that Mr. Dice
    treated his two children relatively equally does not address this question. Moreover,
    while treating his two children relatively equally might suggest that Mr. Dice
    would not want a deceaseds childs share to go to Mr. Dices surviving child
    if the deceased child had a spouse or children, it is hardly conclusive of the
    issue.

[44]

I also agree that because Mrs. Dice made her will after Mr. Dice
    died, her will is of little, if any relevance, in interpreting Mr. Dices will.

[45]

More importantly, however, I note that while Mrs. Dice directed
    that Eddie's share of her estate should go to his issue in the event he
    predeceased her, she also directed that Marlene's share should go to Marlene's
    husband in the event Marlene predeceased her. When considered in this light, I
    conclude that Mrs. Dices will is of no assistance at all.

(b)

The interpretation of the phrase
per
    stirpes
in the residue clause of Mr. Dices will is not determined by
    existing case law

[46]

However, assuming the application judge erred in taking these
    additional factors into account, the central question still remains: Did the
    application judge err in holding that use of the phrase
per stirpes

    in the residue clause demonstrated an intention on Mr. Dices part to treat his
    childrens branches of the family equally in the event that either of them
    predeceased their mother?

[47]

In my view, apart from the words
per stirpes
, the
    overall scheme of Mr. Dices will and Mrs. Dices will, tell us very little
    about Mr. Dices intentions in the event one of his children predeceased his
    wife.

[48]

If the trial judge was correct, and
per stirpes
demonstrates an intention to treat he childrens branches of the family equally,
    none of the other errors relied on by Marlene and Suzanne ultimately affect the
    outcome of this appeal.

(i)

Marelenes argument

[49]

In
    support of her position that the use of the phrase
per stirpes
 does
    not make sense in the context in which it was used and should therefore be
    ignored, Marlene relies heavily on
Lau
.

[50]

As I have said, in
Lau
, Cullity J. was required to
    construe the words
per stirpes
 in a will that contained a residue
    clause worded similarly to that at issue in this appeal.

[51]

In
Lau
, the testatrix left a life interest in a share of
    her estate to one of her children, Cecilia. On Cecilias death, the testator
    directed that Cecilias share be divided between the testators son, Jackie,
    and her other daughter, Shirley, as his or her own property absolutely, in
    equal shares
per stirpes
.

[52]

The questions for the court were: (1) whether the interests of
    Jackie and Shirley were vested indefeasibly upon the death of the testatrix; or,
    (2) whether the words in equal shares
per stirpes
 qualified the gift
    such that their interests in the remainder would be subject to divestment in
    favour of their children and unborn descendants if either of them predeceased
    Cecilia, the life tenant.

[53]

Cullity J. noted that since the gifts to Jackie and Shirley were
    not conditional on them surviving Cecilia, there is a presumption of early
    vesting:
Browne v. Moody
, [1936] A.C. 635 (U.K. P.C.). However, he
    also observed that the principal difficulty in giving effect to the
    presumption lies in finding a meaning to be given to the words
per stirpes
.
    He concluded, at para. 7, that unless those words were intended to make the
    gifts [to Jackie and Shirley] equivalent to
stirpital
gifts to them
    and their issue living at the death of either the [testatrix] or [the life
    tenant,] Cecilia  no effective meaning [could] be attributed to them.

[54]

Cullity J. explained, at para. 8, that the words
per stirpes

    have a long established and precise legal meaning. They do not describe or
    identify beneficiaries. Rather they describe a method of distribution in a will
    under which each stock or branch of the family receives one share of the gift. This
    contrasts with, for example, a
per capita
distribution under which each
    beneficiary receives one share of the gift.

[55]

According to Cullity J., the most familiar use of the term
per
    stirpes
is found in gifts to a class that could comprise more than one
    generation  such as gifts to the testators issue. However, he noted that this
    is not always the case.

[56]

For example, Cullity J. observed that a gift to the testator's grandchildren
    in equal shares
per stirpes
,

would,
prima facie
, not
    include [the testator's] great-grandchildren, citing
Re Karkalatos Estate
,
    [1962] S.C.R. 390. Rather, in
Karkalatos Estate
, the stocks or
    branches of the family were found in the grandchildrens ancestors.
    Accordingly, each of the testators children constituted one stock  the single
    child of one of the testators two children was to receive one half of the gift,
    and the three children of the testators other child were to share the other
    half. Moreover, there would be no representation by, or implied gifts over to,
    great-grandchildren in the event that any of the grandchildren predeceased the
    life tenant.

[57]

Accordingly, taking account of the traditional meaning of the
    words
per stirpes
, Cullity J. determined, at para. 10, that a gift
    to the children of the testator, particularly where they are named, is a
    contradiction in terms. In his view,  that is the case because it is essential
    to have more than one
stirps
or branch of the family represented in
    the description of the beneficiaries of the will.

[58]

In the result, Cullity J. declined to give any meaning to the
    words
per stirpes
. Further, he noted that his conclusion is
    consistent with the decisions in
Simpson Estate (Re)
, [1928] S.C.R.
    329,
Karklatos Estate
, and
Clark Estate
(1993), 83 B.C.L.R.
    (2d) 284 (S.C.). Accordingly, he found that the gifts of the remainder to
    Jackie and Shirley vested indefeasibly upon the death of the testatrix.

[59]

In my opinion, the danger in relying on
Lau
is that it appears
    to lay down a rigid rule concerning the meaning of the words
per stirpes

    in a similarly worded will. However, the rules of construction require that the
    court strive to ascertain the intention of the testator in each particular case.
    As this court stated in
Re Burke
, at p. 30:

The construction by the Court of other documents and decisions
    in other cases respecting the intention of other testators affords no assistance
    whatsoever to the Court in forming an opinion as to the intention of the
    testator in the particular case now under consideration. Other cases are
    helpful only in so far as they set forth or explain any applicable rule of
    construction or principle of law. Each Judge must endeavour to place himself in
    the position of the testator at the time when the will was made. He should
    then study the whole of the contents of the will and, after full consideration
    of all of the provisions and language used therein, try to find what intention
    was in the mind of the testator. When an opinion has been formed as to that
    intention, the Court should strive to give effect to it and should do so unless
    there is some rule or principle of law that prohibits it from doing so.

[60]

On my reading of the decisions relied on by Cullity J., none of
    those courts attempted to lay down a rigid rule of construction.

[61]

In
Simpson Estate
, the testator left life estates in
    several properties to various nieces and nephews, with the remainder interest in
    each property to go to the particular beneficiarys children in equal shares
per
    stirpes
 following the beneficiarys death. The testator also directed that
    if any of the persons to whom he had left a life interest in land died without
    issue, his trustees should sell the land and divide the proceeds among the
    sons and daughters of [the testators] brother Frank Simpson in equal shares
per
    stirpes
.

[62]

The question for the court was whether the rule in
Shelleys
    Case
(1581), 76 E.R. 206 (U.K. K.B.), applied to convert the life
    interests to an estate tail. The rule in

Shelleys Case
converts a gift of what appears to be a life interest to an estate in fee or in
    tail where the terms designating the gift of the remainder includes the whole
    line of succession capable of inheriting, rather than designating a particular
    individual or class: see
Foxwell v. Van Grutten
, [1897] A.C. 658, at
    p. 677 (U.K. H.L.).

[63]

In
Simpson Estate
, the Supreme Court of Canada approached
    the issue as a question of construction of the language of the particular will.
    Focussing on the wording of the gift over in the event that a life tenant died
    without issue, the court held that a gift of money to sons and daughters should
    be read according to the primary import of the words and not as embracing
    the whole line of descendants capable of inheriting (at p. 332).

[64]

It therefore followed that the gift over was to take effect not
    on an indefinite failure of issue, but on the death of the life tenant, without
    having had a child in whom an interest could vest under the terms of the devise
    to the children (at p. 332-33). Taking into account the intentions of the
    testator, as read from the will as a whole, the court concluded, at p. 333, that
    the phrase children
per stirpes
 should not be read as the equivalent
    of issue
per stirpes
.

[65]

Similarly, in
Karkalatos Estate
, the Supreme Court of
    Canada approached the task of interpreting a gift to grandchildren,
per
    stirpes
, in equal shares as an exercise in determining the intention of
    the testator from the language of the will as a whole.

[66]

In

Karkalatos Estate
, the testator left
    succeeding life interests in the income from his estate to his wife and then to
    his two daughters. Upon the death of one of his daughters, the testator
    directed his trustees to distribute one-half of his estate to among and
    between [his] grandchildren,
per stirpes
, in equal shares. Th
e
testator died in 1953. He was survived by his wife, who died later in 1953, and
    by two daughters: (i) Evaggelia Gettas, who died in 1959 leaving one child; and
    (ii) Maria Karavos, who was still living at the time of the application, and who
    had three children.

[67]

The issue on appeal was  for the purpose of the
stirpital
division

 who constituted the stocks or
stirps
.
    Specifically, the question was whether the grandchildren were the stocks, such
    that each grandchild would receive a share of the amount distributed, or
    whether the daughters were the stocks, such that Evaggelias child would
    receive one share and Marias three children would receive the other share.

[68]

The Supreme Court found, at p. 396, that the
stirps
were
    the parents of the grandchildren. In reaching this conclusion, the court relied
    on the primary meaning of the word grandchildren (meaning children of my
    daughters) together with the scheme of equality as between the two daughters
    created by the will, as well as the use of the words to among and between my
    grandchildren,
per stirpes
, in equal shares. Accordingly, Evaggelias
    child received one share of the amount distributed and Marias three children
    received the other share.

[69]

Finally, in
Clark Estate
, the application judge made it
    clear that every will is distinct. To this effect, he observed that it was
    necessary that he attempt to determine the intention of the testatrix from the
    language of the will and from the evidence of surrounding circumstances
    admissible under the armchair rule.

[70]

The issue in the case related to the proper interpretation of a
    direction in the will for the trustee to hold a one-half share of the
    testatrixs residuary estate in trust for her grandson, Robert Clark, and upon
    the death of Robert Clark, to divide the remainder of the one-half (1/2) of
    [her] residuary estate  into to [sic] equal parts or shares and transfer one
    such part or share to each of the children of my son, George Edward Clark,
per
    stirpes
.

[71]

The application judge was reluctant to attribute no meaning to
    the phrase
per stirpes
. Ultimately, however, he did so because he
    found that the will read as a whole indicated that the testatrix did not intend
    to benefit any of the children of her grandchildren.

(ii)

Suzannes argument

[72]

In
    support of her position that the phrase
per stirpes
 should be given
    a very restricted interpretation, Suzanne relies on
Strittmatter v.
    Stephens
(1983), 40 O.R. (2d) 463 (H.C.). In that case, the testatrix left
    a life interest in her estate to her husband and directed that upon the death
    of her husband, whatever then remained should be divided equally amongst [her]
    children
per stirpes
.

[73]

Relying on
Browne v. Moody
, the court concluded, at pp. 465-66,
    that, upon the death of the testatrix, the residue vested immediately in the testatrixs
    nine children who were alive at her death, subject to postponement of
    enjoyment until the death of the life tenant. On behalf of the infant
    grandchildren and potential unborn grandchildren, the Official Guardian argued
    that the phrase
per stirpes
 indicated an intention that the vested
    interests of the nine children would be subject to divestment in favour of
    their issue if any of them predeceased the life tenant.

[74]

Particularly, in the light of prior decisions suggesting that
    divestment should be avoided unless there was clear language indicating that it
    was the testators intention that there be divestment, the court rejected the
    Official Guardians argument. Instead, the court concluded, at pp. 467-68, that
    the purpose of the phrase
per stirpes
was to prevent the operation of
    the anti-lapse provision in
The

Wills Act
, R.S.O. 1950, c.
    426,
[1]
in the event that one of the children pre-deceased the testatrix. The phrase
    did not indicate that the vested interests of the nine children were subject to
    divestment.

[75]

Respectfully, in my view, this reasoning does not assist in
    interpreting the phrase
per stirpes
 as it appears in Mr. Dices
    will. In particular, there is nothing in Mr. Dices will to suggest that he
    intended to address what would happen if any of his children predeceased him. Nor,
    if he did, is there anything to suggest that he intended to benefit his grandchildren
    if one or more of his children died the day before he died, but that he did not
    intend to do so if one or more of his children died the day after he died.

(iii)

Other decisions

[76]

In
    addition to the authorities referred to above, the parties cited or referred us
    to several other decisions in which the phrase
per stirpes
 was used
    in a context that did not necessarily reflect its traditional meaning or use:
Re
    MacInnes
, [1958] O.R. 592 (H.C.);
Jackson Estate (Re)
, [1975]
    B.C.J. No. 723 (S.C.);
Re Sitter Estate
, [1977] 2 W.W.R. 356 (Sask.
    Surr. Ct.);
Heslop v. The Canadian Trust Co
.
(1994), 6 E.T.R.
    (2d) 315;
Hegedus Estate v. Paul (Public Trustee of)
(1998), 225 A.R.
    154 (Surr. Ct.);
Martyn v. Taylor
(2003), 50 E.T.R. (2d) 220 (Ont.
    S.C.).

[77]

I am not persuaded that any of these cases is of assistance in
    determining the meaning of the phrase
per stirpes
 as it appears in
    Mr. Dices will. More specifically, none of these cases constitutes binding
    authority for the proposition that a particular interpretation must be attached
    to the phrase as it appears in the will.

(c)

The interpretation of
    the phrase
per stirpes
in the present case

[78]

For reasons that I will explain, I conclude that, in this case,
    the mostly likely meaning of the phrase
per stirpes
 is that it
    conveys the testators intention to benefit, at least, his childrens children
    in the event either or both of his children predeceased his wife.

[79]

The application judge relied on two factors to distinguish this
    case from
Lau
. First, he relied on the fact that, in this case, the
    testator did not use the words as his or her own property absolutely in
    directing that the residue of his estate be divided equally between [his] son,
    James Edgar Dice, and [his] daughter, Marlene Marguerite Buck,
per stirpes
.

[80]

Second, he rejected Cullity J.s view that the following
    statement found at p. 260 of Thomas G. Feeney,
The

Canadian Law of
    Wills
, 3
rd
ed., (Toronto: Butterworths, 1987) vol. 2, is
    incorrect:

Normally, a gift in remainder to my children
per stirpes

    will be construed as a gift to all the testators children and to the issue
per
    stirpes
of children who died between the testators death and the death of
    the life tenant.

[81]

I do not find either of these factors particularly compelling.  Concerning
    the first factor, while it is clear from his reasons that Cullity J. took the
    words as his or her own property absolutely into account in his reasons, in
    my view, it is equally clear that he would have reached the same conclusion had
    those words not been present.

[82]

Concerning the second factor, as Cullity J. notes, no authority
    is cited for this proposition where it appears in para. 11.148 of the fourth
    edition of Prof. Feeney's book: Thomas G. Feeney and James MacKenzie,
Feeneys
    Canadian Law of Wills
, 4
th
ed., (Toronto: Butterworths, 2000)

[83]

I acknowledge that no persuasive authority exists to specifically
    support the conclusion that the direction to divide the residue of his estate
    equally, between [his] son, James Edgar Dice, and [his] daughter, Marlene
    Marguerite Buck,
per stirpes
 means that Eddie's share of the estate
    should go to his children.

[84]

In my view, however, none is required. Rather, the governing
    principle is that the court must strive to ascertain the intention of the
    testator.

[85]

In this case, neither the other provisions of his will nor the
    evidence of surrounding circumstances that was adduced provide much help in
    assessing the intention of the testator concerning the meaning of the residue
    clause. At most, what is evident is a general intention to benefit his children
    more or less equally.

[86]

What does seem clear, however, is that the testator intended that
    the words
per stirpes
 should have some meaning. If that were not the
    case, he could have omitted them. Had he done so, Eddie's share would have gone
    to his estate if the presumption of early vesting applied. Or if, as the
    application judge found, the presumption of early vesting was rebutted by the other
    language of the residue clause (apart from the phrase
per stirpes
) and
    the residue did not vest until after the life tenants death
[2]
,
     Marlene contends that the gift to Eddie would have lapsed and the entire
    residue would have passed to her.

[87]

The question thus remains: What did the testator, intend by the
    words
per stirpes
?

[88]

Absent any other indicators of intent, it seems to me that, at a
    minimum, these words reflect an intention that the gift neither passes to
    Eddies estate nor to Marlene. Even if used improperly, it seems to me that,
    having regard to the traditional meaning of the phrase
per stirpes

    when used in conjunction with the term issue, the most logical meaning is
    that the use of the phrase conveys an intention, to benefit, at least, the
    testators childrens children.

[89]

Viewed in this way, I do not agree that a gift to named children,
per stirpes
, necessarily creates a contradiction in terms.  Rather, in
    the context of Mr. Dices will, which provides no other indication of the
    testators intention, both aspects of this disposition can be viewed as an
    elaboration of his intention. That is, the disposition reflects both an
    intention to benefit each of the testators children, as well as intention to
    benefit, at least, each childs children in the event that either or both of
    the named children fail to survive the life tenant.

[90]

Unlike the decisions relied upon by Cullity J., in this will,
    there is not a contrary intention evident, which would suggest a need to
    disregard the phrase
per stirpes
.

[91]

Whether the residue vested contingently in Marlene and Eddie upon
    Mr. Dices death or, as the application judge held, vesting was postponed
    until the life tenants death, the result is the same. Eddies share of the
    residue passes to his children.

[92]

Despite my conclusion, I agree with Cullity J. that terms such as

per stirpes
, if used at all, are best used in their traditional
    sense  otherwise, the testator runs the risk of having his or her words
    ignored.

(6)

Disposition

[93]

Based on the foregoing reasons, I would dismiss the appeal.

[94]

As the issues on appeal arose from the wording of the will, I
    would order that the costs of all parties in relation to the appeal be paid by
    the Estate.

[95]

The issue of costs on the application below has yet to be
    resolved. If the parties are unable to resolve this issue, I would remit the
    matter to the application judge to consider in the light of the outcome of the
    appeal.

Signed:        Janet Simmons J.A.

I agree M. Rosenberg J.A.

I agree Robert P. Armstrong
    J.A.

Released:
MR June 29, 2012

[1]

Section 36 of the
The

Wills Act
, R.S.O.
    1950, c. 426, provided, in part, as follows:

(1)

Where any person, being
    a child or other issue or the brother or sister of the testator to whom any
    real estate or personal estate is devised or bequeathed  dies in the life-time
    of the testator  leaving issue, and any of the issue of such person are living
    at the time of the death of the testator, such devise or bequest shall not
    lapse but shall take effect as if the death of such person had happened
    immediately after the death of the testator, unless a contrary intention
    appears by the will.

[2]

Based on
Browne v. Moody
, I am sceptical that the application judges finding
    in this respect is correct. However, in the light of my conclusion concerning
    the meaning of the term
per stirpes
 it is unnecessary that I finally determine this
    issue.


COURT OF APPEAL FOR ONTARIO

CITATION: Emmerson Group Limited v. Bally
    Mechanical Contractors Inc.,

2012 ONCA 466

DATE: 20120628

DOCKET: C54424

Rouleau, Watt and Pepall JJ.A.

BETWEEN

Emmerson Group Limited

Plaintiff (Appellant)

and

Bally Mechanical Contractors Inc. and The
    Corporation of The City of Norfolk County and The Atlas Corporation

Defendants (Respondents)

Duncan W. Glaholt for the appellant

J. Maggisano for the respondent The Atlas Corporation

Heard: June 27, 2012

On appeal from the order of the Divisional Court dated February
    11, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The appeal is withdrawn with prejudice and without costs.