Saturday, February 10, 2007

Wills Variation Act: Common-Law Spousal Claims

[Since I wrote the post below, the British Columbia Court of Appeal has substantially increased the award to the Plaintiff, Ms. Picketts. The reasons for judgement in the Court of Appeal rejected the trial judge's analysis of the difference between the moral claims of a common spouse and a legally married spouse. See my post on the Court of Appeal decision here.]

Should a common-law spouse have a similar entitlement to a married spouse in British Columbia under the Wills Variation Act, RSBC 1996, c. 490? Traditionally, only married spouses could apply to vary a will under the Wills Variation Act, but several years ago the legislature amended the Act to allow common-law spouses to apply.

The Supreme Court of British Columbia considered this issue in a decision released the end of January in the context of an $18 million estate in Picketts v. Hall, 2007 BCSC 133.

When Coleman Hall died at the age of 96, he left his common-law spouse, Helen Picketts, his residence, $2000 per month indexed for inflation, the use of his condominium in Hawaii for up to three months of the year, and, on the sale of the condominium in Hawaii, 10% of the sale proceeds up to $75,000 USD.

He left most of the rest of his estate to his two sons, one of whom he had previously given shares in the family business worth about $12 million.

Mr. Hall and Ms. Picketts had been together for 21 years when he died. She was 21 years younger than him. She had a couple of hundred thousand dollars of her own assets on his death, and received Canada Pension Plan and Old Age Security benefits. She had continued working outside of the home during the relationship, and nursed him during his long illness. Despite Mr. Hall’s wealth, the couple lived frugally.

Mr. Hall’s sons agreed that their father had not made adequate provision for her. The main issue was what provision would be just, adequate and equitable in the circumstances.

The court considered Mr. Hall’s legal and moral obligations to Ms. Picketts, in accordance with the Supreme Court of Canada decision in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807. (I have written about this case here.)

Because they were not married, Mr. Hall did not have a legal obligation to Ms. Picketts , under the Family Relations Act, RSBC 1996, c. 128, which gives each spouse a presumptive half interest in the family property on the breakdown of a marriage. But under the Family Relations Act, a common-law spouse may be entitled to spousal support. Ms. Picketts argued that she would have been entitled to $180,000 to $220,000 per year in spousal support. According to Mr. Justice Bauman’s reasons, Ms. Picketts’ lawyer “allows that any constructive trust claim is subsumed under moral obligations criteria.” (In Tataryn, the Supreme Court of Canada expressly deals with a constructive trust claim under the rubric of a legal obligation.)

Ms. Picketts argued that Mr. Hall had a moral obligation to leave her an amount equivalent to what she would have received if they were married. She sought an award of $9 million to $10 million at trial.

Mr. Justice Bauman did not agree that Mr. Hall had a moral obligation to leave Ms. Picketts an amount that would be similar to what he would have been required to leave her if they had been married. The court cited the Supreme Court of Canada decision in Nova Scotia (Attorney General) v. Walsh, [2002] 4 SCR 325, for the proposition that to treat all common-law relationships like marriages would defeat the right of couples to choose their mutual legal rights and obligations.

Mr. Justice Bauman awarded Ms. Picketts an additional $405,000 out of Mr. Hall’s estate to make renovations to her residence. The court also increased the monthly payments to the equivalent of $175,000 per year indexed for inflation.

This decision provides authority in support of the view that a common-law spouse does not have identical obligations as a married spouse under the Wills Variation Act. On the other hand, I think one should keep in mind that this case dealt with a very large estate. In a smaller estate, the courts may impose similar obligations on common-law spouses in long-term relationships as they do on married spouses who do not make adequate provision for each other in their wills.

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