Tag: Common Law Spouses

09 Aug

Until Death Do You Part?

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Discussing death and planning for such eventuality is a topic that is often uncomfortable and thus avoided, resulting in a transfer of assets which may not reflect the wishes of the deceased.   This can be especially true if you aren’t certain about how your lifestyle impacts your Estate. A recent article in the Financial Post spoke about the impact that misconceptions about marital status can have on estate planning. 

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

08 Jul

Supreme Court of Canada decisions in Kerr v. Baranow & Vanasse v. Seguin – Part 3 of 3

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As has been my mantra all week, Justice Cromwell, who delivered the reasons for the Court in Kerr v. Baranow & Vanasse v. Seguin, commented that for unmarried persons in domestic relationships in most common law provinces, judge made law is the only option for addressing the property consequences of the breakdown of those relationships. 

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

07 Jul

Supreme Court of Canada decisions in Kerr v. Baranow & Vanasse v. Seguin – Part 2 of 3

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In of Vanasse v. Seguin (the companion case to Kerr v. Baranow, heard at the same time) the common law couple was together for 12 years, from 1993 to 2005. For the first four years both parties pursued their careers. The common law wife (“wife”) then left her job to move to Halifax so the common law husband (“husband”) could pursue a business opportunity. Over the next three and a half years, their two children were born and the wife stayed at home to care for the family. The husband stepped down as CEO of the business he started and they returned to Ottawa in 1998, where they bought a home in both their names as joint tenants. In 2000, the husband received approximately $11 million for his shares in the business and from that time, until their separation in 2005, he participated more with the domestic chores.  

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

06 Jul

Supreme Court of Canada decisions in Kerr v. Baranow & Vanasse v. Seguin – Part 1 of 3

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The Supreme Court of Canada recently considered the property rights of common law spouses in the companion cases of Kerr v. Baranow & Vanasse v. SeguinThese cases required consideration of the following legal issues:

  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

05 Jul

Common Law Partners’ Rights to Property

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Yesterday’s blog considered the fact that a common law spouse has no beneficial entitlement to his or her deceased spouse’s estate on an intestacy.  There are, however, remedies available to the disappointed spouse. 

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

03 Jun

McMillan v. Johnson (Estate)

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The recent B.C. Court of Appeal decision of McMillan v. Johnson (Estate) 2011 BCCA 48, deals with the valuation of an unjust enrichment claim of a long-time common law wife against the estate of her deceased common law husband. 

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

02 Sep

Common Law Spouse of Popular Author questions Sweden’s inheritance laws

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 I recently finished reading The Girl with the Dragon Tattoo by Swedish author, Stieg Larsson. Larsson is one the world’s best selling authors, having sold 20 million books worldwide. He is currently on both the hardcover and paperback fiction bestsellers lists for the Globe and Mail and the New York Times.

In 2004, shortly after entering into a publishing agreement, Larsson unexpectedly died at the age of 50.  His three bestselling novels were published posthumously and have been immensely popular both in Sweden and internationally.

The drama behind his estate has also captured Sweden’s attention pitting Larsson’s common law spouse of thirty years, Eva Gabrielsson, against Larsson’s other surviving relatives.

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.

  

27 Jan

An Annuity by Will

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Annuities are often employed when an individual plans his or her estate. We have covered different aspects of annuities on past blogs on Hull on Estates.

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

30 Sep

A Review of Dependant Support Claims – Hull on Estates #130

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Listen to A Review of Dependant Support Claims

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.
 

READ MORE

30 Sep

Identifying a Common Law Spouse

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Common law spouses are not included in Part II of Ontario’s Succession Law Reform Act, which governs intestate succession (dying without a valid Will).

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 

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