·                    the entitlement should be applied after two years of cohabiting if a couple has a child, providing the child was living with the couple when one parent died;

·                    qualifying cohabitants should have the same entitlement under the intestacy rules as a spouse; and

·                    if the deceased has a husband or wife from a "fossil" marriage – where a couple are living apart but have never divorced – the surviving cohabitant has no entitlement to any of the estate.

The Law Commission apparently notes that cohabiting couples are among the people least likely to have a will. Under the current English intestacy laws, similar to our legislation, property is passed on to family members in order of closeness of the blood relation. However, like our system, unmarried partners are currently not entitled to the deceased partner’s property, but can apply to court for support. That said, this can be a costly and time-intensive process. I have always found it unfortunate in cases where long-time common-law spouses had to bear the expense and emotional drain of fighting for their dependant support award.   

Given the reality here and abroad that cohabiting unmarried couples represent an increasing percentage of families, this type of legislative change may soon be solidified in the United Kingdom and make its way to us. It seems from the comments I read about this article that people are divided on the subject. I, for one, think that it is time for this type of review, especially if it could lead to a reduction in or narrowing of the types of dependant support claims we see in our system.

Thanks for reading,

Natalia R. Angelini - Click here for more information on Natalia Angelini. 

I’m sure you’ve heard it before, or may even be part of the demographic that isn’t concerned about your estate planning because you believe that status as a common-law spouse will suffice to transfer your assets to your partner on death. Although common-law status in Canada is relatively developed, affording many benefits similar to those enjoyed by the legally wed, such benefits do not extend to those received upon death.

Laws differ across the provinces; however, in Ontario a common-law spouse does not have rights to the deceased partner’s estate. Legal avenues to seek redress require commencing legal action against the Estate, a costly and often emotionally difficult process. As is often discussed on our blog, alternative planning options are available, it simply requires time and effort to ensure that your wishes are put into place. Knowing the implications of your marital status on your estate, and giving effect to your intentions can have a simple fix. It’s worth considering.

Until Tomorrow,

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz. 

A property interest by resulting trust arises where 1) there is a gratuitous transfer of property from one partner to the other, or 2) there is joint contribution by two partners to the acquisition of property, title to which is in the name of only one of them.

Added to this has been the “purely Canadian invention” of the “common intention” resulting trust, whereby a resulting trust could arise based solely on both partners having a common intention that one holds property for the beneficial interest of both. However, the Court declared that this concept was doctrinally unsound and should have no continuing role in the resolution of domestic property disputes. 

A far better approach was to apply the law of unjust enrichment and the remedial constructive trust, which provide a much less artificial, more comprehensive and more principled basis to address property claims on the breakdown of domestic relationships. To be successful, a plaintiff had to establish 1) an enrichment of the defendant by the plaintiff 2) a corresponding deprivation of the plaintiff, and 3) the absence of a juristic reason for the enrichment.

The appropriate remedy for unjust enrichment will most often be monetary though there may be some circumstances in which a monetary remedy will be inadequate and a proprietary remedy is required.  

When quantifying a monetary remedy, a quantum meruit approach should be applied and value assessed on a “value survived” basis, which is preferable to imposing a remedial constructive trust. To be entitled to a monetary remedy on a value survived basis, the claimant must show both that there was a joint family venture and that there was a link between his or her contributions and the accumulation of wealth.

This decision provides much guidance to courts in determining the property rights of unmarried partners and will no doubt prove instructive in cases where individuals die without having provided properly with respect to the property accumulated during their lifetime with a common law spouse.

Sharon Davis - Click here for more information on Sharon Davis. 

The trial judge found that there was no unjust enrichment for the first and last periods of the couple’s cohabitation, but held that the husband had been unjustly enriched at the wife’s expense during the period in which the children were born and was entitled to half of the value of the wealth the husband accumulated during the period of unjust enrichment, less her interest in the home and RRSPs in her name. 

The Ontario Court of Appeal set aside this award and directed that the proper approach to valuation was a quantum meruit calculation in which the value each party received from the other was assessed and set off, essentially treating the wife as an unpaid employee.

In the Vanasse appeal, the central problem was how to quantify a monetary award for unjust enrichment. The Supreme Court of Canada found that a monetary award for unjust enrichment need not, as a matter of principle, always be calculated on a fee-for-services basis, allowed the appeal, and restored the order of the trial judge.

Sharon Davis - Click here for more information on Sharon Davis. 

1. The role of the “common intention” resulting trust in claims by domestic partners. 
2. Whether the monetary remedy for a successful unjust enrichment claim must always be assessed on a quantum meruit basis.
3. Mutual benefit conferral in the context of an unjust enrichment claim and when this should be taken into account. 
4. The role the parties’ reasonable expectations play in the unjust enrichment analysis. 

In Kerr v. Baranow, a common law couple in their late 60’s split after 25 years, during which time both partners worked and contributed to their mutual welfare. The common law wife (“wife”) claimed property on the basis of resulting trust and unjust enrichment.   The common law husband (husband”) counterclaimed that the wife had been unjustly enriched by his housekeeping and personal assistance after she suffered a debilitating stroke.

The trial judge awarded the wife $315,000, (1/3 of the value of the home the couple shared, but which was in the husband’s name) by way of resulting trust and unjust enrichment, because the wife had provided $60,000 worth of equity and assets at the beginning of their relationship. 

 The B.C. Court of Appeal allowed the husband’s appeal because it found the wife did not make a financial contribution to the acquisition or improvement of the property, and ordered a new trial for the husband’s counterclaim.

The Supreme Court of Canada allowed the wife’s appeal from the dismissal of her unjust enrichment claim and ordered a new trial.  Her appeal from the order dismissing her claim in resulting trust was dismissed.  The order for a new hearing of the husband’s counterclaim was affirmed.

Tomorrow’s blog will cover the facts in Vanasse v. Seguin and in our last blog of the week we will explore the main issues discussed in relation to property rights of common law spouses in the context of these two cases.

Sharon Davis - Click here for more information on Sharon Davis. 

The first of these is a claim for dependant support found in Part V of the Succession Law Reform Act, whereby a common law spouse (or any other “dependant” of the deceased)  can ask for support where no adequate provision has been made for the dependant by the deceased.  

The Court has broad discretion to grant relief that, according to section 62(3) of the Act, can take a variety of forms, including the transfer, use or occupation of specified property in satisfaction of the dependant’s need for support.  

In many situations involving long-term common law relationships, there may also be an argument for equitable (as opposed to legal) ownership of property by the surviving common law spouse. These rights will be founded on the principles of unjust enrichment and include, for example, resulting or constructive trust, and proprietary estoppel.

The Supreme Court of Canada has recently considered two cases that provide guidance on unjust enrichment in the context of common law relationships. The Court released one decision in the matters of Kerr v. Baranow, and Vanasse v. Seguin, which I will be discussing in the next couple of blogs.    

Sharon Davis - Click here for more information on Sharon Davis. 

The couple lived together for almost 40 years and both contributed to a family fishing business, of which the deceased was the sole shareholder.  The deceased did not properly provide for his wife and although she would have had a claim under the Wills Variation Act, she was out of time and so claimed a constructive trust against the only valuable asset in the estate, a $2.4 Million shareholder’s loan owed to the deceased by the fishing business. 

The trial below proceeded summarily and rather than declaring a constructive trust, the trial judge awarded the wife a monetary remedy of 50% of the value of the loan ($1.2 Million). 

On appeal the estate argued that the value should have been assessed at 50% of the market value of the company at the time of trial, which would reflect the decline in the fishery since death, and that the judge erred in awarding the book value of the loan valued as at the date of death. The estate led no evidence of the actual value of the company at trial and sought to introduce this as fresh evidence on appeal.

The appeal was allowed and a new trial ordered on the question of the value of the loan and the company as at the date of the new trial.  Fresh evidence as to the value of the company was not allowed. The judge intended to award a monetary remedy in lieu of a proprietary remedy, and therefore the valuation date should have been the date of trial.   

If you are interested in a more in depth consideration of the case law on constructive trusts, unjust enrichment and quantum meruit, and whether/when an in personam monetary remedy or proprietary remedy is appropriate, you should refer to the decision for some helpful comment on these issues.  

Sharon Davis - Click here for more information on Sharon Davis. 

While at the time of his death, Larsson’s estate was modest, the success of his books has resulted in a windfall for his estate. A Will made in 1977, leaving his estate to the Communist Workers League, was found to be invalid and Mr. Larsson was found to have died in intestate.  Larsson’s father and brother inherited his full estate.

Gabrielsson inherited nothing from Larsson’s estate and has become a symbol for what many see as unfair inheritance laws. She is currently writing a memoir on her experiences and is working to change Sweden’s inheritance laws to include rights for common-law spouses.

In Ontario, common law spouses are not included in Part II of the Succession Law Reform Act, which governs intestate succession. A common law spouse can bring a dependant’s relief claim to sue the estate for support or bring a claim for unjust enrichment, constructive trust, or quantum meruit claim against the estate.

Thanks for reading,

Diane Vieira 

 Diane Vieira - Click here for more information on Diane Vieira.

A testator, for example, may choose to have one child’s portion of the future estate placed into an annuity that will create a flow of money over time. The child would have access to the cash flow, but not necessarily access to the principal amount. 

In September 2008, Gayle Reid applied to the Superior Court of Justice for an interpretation.  The claimant’s father, Bernard Wiesberg, died and left an annuity to his friend, Avonne Richter (also identified as his common-law spouse). Minimum annual payments of the annuity were directed in the Will to Ms. Richter who received them from 2003 through to 2007. 

The Applicant was to receive the residue of her father’s estate.  A 2005 Order by Dandie  J.  required Ms. Richter to designate Ms. Reid as the beneficiary.  (A provision of the Income Tax Act required the beneficiary to be named, otherwise the retirement income fund would have collapsed, defeating the testator's intent.)

The issue arose when Ms. Richter, who received the previous annual annuity payments in arrears up to 2006, chose to take the $17,015.57 payment in January, in advance for that year. Ms. Richter died on April 17, 2007.

The Applicant sought an interpretation of her father’s Will, specifically regarding the annual payments. As the payments were for the “lifetime” of Ms. Richter, the Estate owed $12,027.44 to the Applicant because the Court reasoned that calculations must be made to the date of Ms. Richter’s death. Therefore a pro-rata calculation was “the only reasonable and fair manner to ensure the two gifts in the Will are honoured.”

If the annuity had been paid in arrears that December, Ms. Richter’s Estate would have been owed a pro-rata amount of the annuity for that year calculated to the date of her death.

Have a good day.

Jonathan

This week on Hull on Estates, David Smith and Jonathan Morse review some of the recent podcasts and hone in on some of the evidentiary requirements of a common-law spousal relationship as it relates to dependant support claims under the Succession Law Reform Act. They look at some recent case law and some of the requirements under the Ontario statute.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.
 

A Review of Dependant Support Claims - Hull on Estates Podcast #130

Posted on September 30^th, 2008 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates. You’re listening to Episode #130 on Tuesday, September 30^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Jonathan Morse: Hi and welcome to another episode on Hull on Estates. I’m Jonathan Morse.

David Smith: And I’m David Smith.

Jonathan Morse: If you want to be heard on Hull on Estates you can participate in our discussion by leaving a comment. Give us a call at 206-350-6636. The number is in the show notes along with our e-mail address, hull.lawyers@gmail.com, or you can visit our blog at estatelaw.hullandhull.com.

David Smith: Good morning, Jonathan.

Jonathan Morse: Good morning, David. As I am a relatively new associate at Hull and Hull, I thought I would review several of the recent podcasts to see if I could identify a topic that has not been covered in depth for some time.

David Smith: Well that was quite an undertaking, Jonathan. How did you make out?

Jonathan Morse: Well, I enjoyed myself, to start.

David Smith: There’s certainly a lot of material, isn’t there?

Jonathan Morse: There sure is. I focused on podcasts so far in 2008, and with the blogs I went back a bit further. I honed in on the topic of dependant support claims, and particularly, the evidence required to make a successful claim by dependants.  And to hone in even more, I realized that Section 57 of the SLRA, that’s the Succession Law Reform Act defines dependant. One of the categories of dependant is spouse, and I thought it would be helpful, certainly for me anyway, and I thought for listeners, to delve into the evidentiary requirements for spouse, particularly some of the elements of common-law spouse required under the SLRA.

David Smith: You know that’s a great topic, Jonathan, and what I’d say about that topic, specifically, is that nine times out of ten, when you go in front of a judge on a support claim when you’re contemplating a claim, either defending the claim or advancing the claim, I find that the biggest growth area right now is where people are trying to push the envelope as to who is a spouse, and whether there’s been cohabitation for a sufficient period of time. So a good topic and a lot of interesting stuff on that.

Jonathan Morse: Thank you. Before we delve too far into that distinction, I guess I’d like to remind listeners of some recent podcasts on this topic, to provide some context for today’s discussion of dependant support claims, and particularly the evidence required to prove a common-law relationship.

David Smith: Okay, thanks, Jonathan. You know the topic of today is fitting, especially when you see by looking at yesterday’s blog by Bianca La Neve. It’s a situation where a widow there applied for support from the deceased’s estate.  And in that case, McDougall and McDougall Estate, a 2008 Ontario Superior Court decision, that was a second marriage and not a common-law situation.  But you know, it does highlight the point that support claims are more and more common as I said at the outset. And here in this case, the widow’s claim was denied because it was not driven by need but rather her wish to live the lifestyle she had enjoyed with the deceased prior to a period long before he became ill. And an important point to remember is that the Court looks at support and dependency immediately before death. While there is some case law that suggests, that can be a bit fuzzy on that point, that was an important point to highlight for sure.

Jonathan Morse: I guess following that, a classic example of a common-law situation is when the children of the first marriage hope to deny that their parent had a common-law relationship with the person claiming that he or she was a common-law spouse. Looking further in my review of our recent material, more than two years ago, Suzana Popovic-Montag wrote in her blog, several entries in a series that asked the question, is there support after death? In Part 3 of that, she answered the question of who is a dependant, and that was on June 28, 2006. More recently, on May 20, 2008, Rick Bickhram and Sean Graham discussed evidence issues in estates, when a main party is deceased. In particular, they focused on Section 13 of the Evidence Act and the requirement for corroborative evidence.

David Smith: And let’s just touch on that a little bit more and just explain that requirement. The key witness in any of these claims, Jonathan, is deceased, right? I mean we’ve got a situation where the person who could best tell whether the claimant was, in fact, being supported by the deceased, obviously is deceased. Section 13 speaks to that, it says you’ve got to have corroboration, you’ve got to have material evidence that touches on the issue. The kind of corroboration you want may be in the manner of, if there’s a challenge to whether the two were living together, you’re going to want perhaps bills that were mailed to the address showing both names of both people who were living there together, you’re going to want some witnesses who can attest to the nature of the relationship, that sort of thing, so a very important point. And as I understand it Jonathan, you also found another podcast that touched on this issue.

Jonathan Morse: That’s right, thank you David. I refer listeners to July 1, 2008, just at the beginning of the summer.  The podcast by Natalia Angelini and Craig Vander Zee, and they discussed dependant relief and again, the Succession Law Reform Act. In particular, they focused on recent case law, including the line of cases culminating in Cummings and Cummings, decided by the Supreme Court. They left off their discussion by citing two other cases, Reid and Reid, that’s R E I D and Reid, a 2005 Ontario Superior Court of Justice case and Parelli and Foley Estate, a 2006 decision by the Ontario Superior Court of Justice.

David Smith: Right, and just one clarification there or comment, Jonathan, is that, of course, Cummings was a Court of Appeal decision.  But I understand that Reid and Parelli, it’s expanded upon some of that and why don’t you tell me a little bit about those.

Jonathan Morse: Sure. In Reid and Reid, it was useful because of Justice Snowie’s analysis of the particular evidence. It’s not necessarily on point with this discussion regarding common-law spouses, but I’ll be brief. Reid and Reid involved the daughter and two grandchildren of the testator, and the three claimants were claiming that they were dependant on the testator. The estate was about $200,000. The son of the testator, so the brother of one of the claimants, did not agree that his sister and niece and nephew were dependants.  The Court found they were dependants and that a testator’s support need not be direct financial support.

David Smith: I think that’s an important point, and you know, that’s an important clarification of the blog that we referenced that Bianca did, where, in that case, the Court was critical of the fact that there was no need. Certainly coming out of Cummings we have a regime which clearly says that you do not have to be in need, in financial need and in dependency in a financial sense to be eligible for support. Cummings has expanded the need and the concept of support beyond simply financial need.

Jonathan Morse: Thanks, David. The next case, Parelli and Foley Estate, that was decided in 2006 and it’s certainly more on point with today’s discussion.  And in this case, James Foley separated from his wife and subsequently moved to Niagara Falls, and that was in 1988, to a home that he purchased. His girlfriend at the time, a woman named Paula Parelli, gave up her apartment in Toronto that same year and moved to live with Foley. Foley relied on his income from investments while Parelli, she continued to work. Their incomes were comparable, according to the findings by the Court, and in the range of about $25,000. They each contributed to the upkeep, maintenance and operation of the household in Niagara Falls. Foley cooked, did the yard work, washed the kitchen floor, while Parelli cleaned up after dinner, did the laundry and cleaned the house generally. So in 1998, Foley developed Alzheimer’s and in 2000 Parelli quit her job to look after Foley. Then Foley, unfortunately died in 2003. 

So in this instance, the estate, including the value of the home, was about $510,000. There were bequests to family members and allowance for Parelli to stay in the home five months after Foley’s death. In this case, Parelli claimed a constructive trust, which the Court allowed, but only for the period during which she had to give up her job to care for Foley, so that was from the period of 2000 to 2003. The Court did not find there was a nexus to the property though, so the dependant’s support claim for the common-law spouse succeeded by increasing the amount of money left to her on top of the money left to her in the Will.

David Smith: You know, that’s a good illustration, Jonathan, of the interplay between a constructive trust claim and a support claim.  And it helps also advise counsel as to creative lateral thinking, because there the Court considered the fact that Section 62 provides that housekeeping and domestic services provided by the spouse can be factored into any calculation of a support claim. So an interesting way, and it shows the power of Part 5 of the Succession Law Reform Act, and the degree to which it allows the support claimant to realize an entitlement that they couldn’t realize from a constructive trust claim. Really good point.

Jonathan Morse: Just to hone in on a definition for a moment, David, the SLRA defines spouse, does it not?

David Smith: That’s right. A spouse is either of two persons who are not married to each other, and who have either cohabited continuously for a period of not less than three years, or in a relationship of some permanence, if they are natural or adoptive parents of a child.  So it’s a looser definition of spouse than under the FLA, for example.

Jonathan Morse: And I guess I’m envisioning that in sort of the world of different relationships that arise, that trying to determine whether a relationship is actually common-law or not, can be quite tricky sometimes.  And I think the definition leaves room for debate because there seem to be so many unique facts, or different fact scenarios. I guess I point to a case, and it was an earlier case in 1999, in Saskatchewan, which provides insight into the evidentiary issues that arise in determining whether or not a common-law spousal relationship exists.  And I think the same factors would apply in Ontario, and maybe you can speak to that, David.

David Smith: Yeah, one thing I would say is generally across Canada, the support regimes are very similar, there’s very little difference among any of them.  And, you know, a lot of the cases from one province can be used and applied in another, subject to any minor discrepancies in wording. But you know, Jonathan, looking at the time, I see that we’re actually getting close to our limit here in terms of having to wrap this up, and I know that there’s an awful lot we can talk about here.  But maybe just in summarizing, can you just give me a sense of what you gleaned in a sort of summary way from your review of the blogs and podcasts?

Jonathan Morse: From the review of the blogs, well we certainly have, we provided a lot of material and I think, certainly for a new lawyer in this area, it can be somewhat overwhelming because there is a large amount of information.  But it’s helpful information as well and provides good direction, a good resource to certainly dig into cases and I think texts, in some respects, to provide good guidance with respect to these different issues including that of common-law relationships and what constitutes the common-law relationship.

David Smith: And tell me, Jonathan, just as a lawyer newly specializing in this are of law, were you surprised by the power and breadth of the Succession Law Reform Act as it relates to the dependency claims?

Jonathan Morse: I think I am, yes, because it’s a powerful tool, and certainly clients are recognizing its power and certainly in this time when there’s a lot of wealth transfer happening, individuals are certainly looking to, when an estate arises, they’re looking to how they might resolve situations that have arisen within their family context and coming to us to look at their options under the Succession Law Reform Act.

David Smith: Right, and you know on a final point, I think it highlights the obligation that there should be upon a drafting solicitor who’s making a Will, to ensure that the testator is aware that dependants or people who might qualify as dependants could make claims against the estate and effectively undermine what the testator might think is his last Will. So it’s always a good point for a drafting solicitor to consider. Well, look, Jonathan, lots of fun. I really enjoyed podcasting with you, and I think that brings us to the end of this week’s discussion. Thanks for listening, and thanks for joining us today.

Jonathan Morse: It was a pleasure, David. I look forward to podcasting with you again soon.

David Smith: And that’s right, and you know, Jonathan, we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com, as we said at the outset, or just pick up the phone and leave us a message on our comment line at 206-350-6636. And be sure to visit our blog at estatelaw.hullandhull.com\ where you’ll find even more information and discussion on today’s practice of estate law. We hope you enjoyed the show. I’m Dave Smith.

Jonathan Morse: And I’m Jonathan Morse. Until next week, so long.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

/mem

In British Columbia, unlike Ontario, intestate laws now provide the same rights to common law spouses as to married spouses, if the couple lived together in a marriage-like relationship for a period of at least two years before the death of one of them.  Recent case law out of British Columbia has grappled with the issue of identifying common law spouses in cases of intestacy. 

In Austin v. Goerz, 2007 BCCA 586, the deceased had been separated, but not divorced, from his wife for six years.  During the last six years of his life, the deceased lived with another woman, Ms. Goerz, as husband and wife.  The deceased died without a Will.  On the death of the deceased, the legally married spouse, Mrs. Austin, brought a claim seeking a declaration that Ms. Goerz was not the deceased’s common law spouse.  The lower court dismissed Mrs. Austin’s claim, and she appealed to the British Columbia Court of Appeal.  On appeal, Mrs. Austin argued that the deceased, while legally married, could not have a common law spouse as he lacked the legal capacity to marry.  Mrs. Austin also argued that Ms. Goerz was not a common law spouse as there was no financial dependence between her and the deceased during their relationship.  Both arguments were dismissed.  The Court of Appeal recognized that common law relationships can exist even though one or both partners lack the capacity to marry.  Furthermore, lack of financial dependence is not determinative in identifying common law relationships. 

Have a great day!

Bianca La Neve