Devolution under the law is what governs. If in certain jurisdictions there is statutory provision for varying the provisions of a will in order to provide maintenance for certain people it is felt that that is a matter of local convenience and the dominion succession duty law cannot properly take cognizance-
That is very unfair, because actually the devolution in the province is covered by the Testator's Family Maintenance Act in that case. In British Columbia we nave had an act of that type for perhaps fifteen years; the succession can be changed by
Succession Duty Act
the Testator's Family Maintenance Act, provided that application is made, I believe, within six months after death.
Yes. It gives power to vary the will. It enables the wife or the child to apply to have the will varied and is used in quite a few cases. I do not see what earthly right the dominion government has to refuse to recognize that provincial law. The provinces have the right to pass such laws and the dominion should' recognize them. There is just as much reason why the dominion should recognize the Testator's Family Maintenance Acts as that it should recognize the intestacy laws of a province. They are absolutely on the same footing, and I cannot understand why the dominion refuses to recognize these maintenance acts.
Of course, I find it a little difficult to answer my hon. friend because in my own jurisdiction there is not a statute of that kind, but I understand it is really varying the devolution of the estate as provided by will or as provided by law. It is tantamount to a compromise between the beneficiaries which is confirmed by the court-
I appreciate that. But the various parties appear before the court and the court decides that the will did not provide for an equitable distribution, or that the law has not provided for it, and it can vary that distribution. It can also, I take it, in the terms of the order vary the apportionment of the death duties. Surely it would be competent for the court to do that. I am almost thinking aloud1, but it could make it a condition to the varying of the provision of the will that beneficiary A should receive fifty per cent of what wras provided in the will and that the person to whom the remaining fifty per cent of the legacy W'as transferred should pay a proportionately greater amount of any death duties that were levied, and if party A had been assessed for a greater amount he should be reimbursed that amount by party B to whom the transfer was made. It is indicated to me by the officials that they feel it is not practicable or desirable that any other basis should be taken for the assessment of dominion succession duties than the assets as they devolve on the date of death; and if there is a local statute which provides for varying that, then the local jurisdiction should make provision for the necessary adjustments of death duty liabilities or whatever other charges may attach to the estate.
That is all right, but here is what happens. I know of one case in which the person actually paid the dominion succession duty on the bequest; in other words, the dominion government got the money, and then under the Testator's Family Maintenance Act the terms of the will were varied and the person who had already paid the succession duty has his bequest reduced. In some cases the reduction may be very large; it may even be wiped out by the order under the Testator's Family Maintenance Act of that province. Therefore you have the position of the dominion getting the money and the person not getting the bequest. That is obviously unfair. The provincial succession duty act provides for those orders that are made under the Testator's Family Maintenance Act, and there is no reason why the Dominion Succession Duty Act should not contain a similar provision. The provinces have the sole right to say how property will go. They can change the devolution as they see fit, and they have done it in some provinces. I think Ontario also has a Testator's Family Maintenance Act.
It is a method of distributing the estate just the same as the intestacy laws of the provinces which govern the manner in which an estate shall be distributed where there is no will. The Dominion Succession Duties Act should make provision for those orders made under the Testator's Family Maintenance Act.
This involves a question of conflict of law. I think the parliamentary assistant has correctly stated the fundamental basis of the assessment. At the same time I am impressed by what the hon. member for Vancouver South has said, that it might work great injustice. I would suggest that the succession duty department work out some kind of arrangement with the authorities of British Columbia so as to avoid what would appear to be a manifest injustice. In my province we do not have any such laws as that. We do have a statute, which was passed by the legislature, relating to the devolution of intestate estates. I am not so sure that they were right, but they thought so and it is still the law. In the case of the death of an intestate leaving no issue but leaving a
Succession Duty Act
wife, she now gets a much larger share than she did under the old Devolution of Estates Act; and that might alter the incidence, because in that case I suggest the wife is in a preferred class, and the balance goes to, shall I say, the second or the third class, the collateral relatives. It alters the rate of taxation for succession duty purposes in the province.
I think this should be the subject of a conference with the provinces. In the meantime the law is as it is and it is not proposed to change it now.
I think that is probably a good suggestion. My own view would be that the judges in those provinces which have legislation of the kind referred to by the hon. member for Vancouver South should bear in mind that the succession duty law-the dominion at any rate-provides that duties shall be assessed on the basis of the estate . as it devolves under the will or by the ordinary law, and that in making any orders such as have been indicated here the courts should impose an appropriate condition as to the adjustment of succession duty liability as between the various benefited parties.
If I remember correctly, the provincial succession duty act recognizes an order made under the Testator's Family Maintenance Act and levies accordingly. The suggestion made by the parliamentary assistant would not work in all cases, because it might happen that the rate of succession duty would be changed. For example, if by order the money goes to a wife whereas it was bequeathed to a sister, the rate is changed.
It would not be fair to ask the judges- to take that into account. The Testator's Family Maintenance Act is a beneficial one. It protects the wife and children, and also the husband but no other relatives. These acts prevent a father from unfairly disinheriting his children or his wife and they have been very beneficial. I think the only way the difficulty can be remedied is to have a provision put in the Dominion Succession Duty Act. I know the government does not want to get money to which it is not entitled, yet that is what is happening under the present law.