Friday, March 09, 2007

Do Family Relations Act Claims Die With a Spouse?

Can a separated spouse’s executor or administrator continue a matrimonial lawsuit in British Columbia after the separated spouse dies?

This issue was considered in the recent case of Zuk Estate v. Zuk, 2007 BCSC 300.

Mrs. Sylvia Zuk and her husband Alex Zuk had separated. Mrs. Zuk started a court proceeding in which she claimed a divorce, spousal support and a division of the matrimonial property.

Mrs. Zuk died before the lawsuit was resolved. Mr. and Mrs., Zuk’s matrimonial home was in a joint tenancy at Mrs. Zuk’s death. Accordingly, on Mrs. Zuk’s death, Mr. Zuk acquired sole title to the matrimonial home by right of survivorship.

One of Mrs. Zuk’s children from a previous marriage wished to continue the matrimonial proceeding as the personal representative of Mrs. Zuk’s estate. She acknowledged that the court could not grant a divorce or spousal support. But she argued that she should be allowed to continue the claim for a division of the family assets. She also argued that Mr. and Mrs. Zuk severed the joint tenancy by their conduct.

Mrs. Zuk’s daughter’s lawyer also advised the court that she wished to add trust claims to the lawsuit. But Mrs. Zuk’s daughter had not yet made an application to amend the claim.

Mrs. Zuk’s daughter’s objective was to get a half-interest in the matrimonial home into Mrs. Zuk’s estate.

Mr. Justice Melnick dismissed Mrs. Zuk’s daughter’s claims. Under sections 56 and 57 of the Family Relations Act, RSBC 1996, c. 128, each spouse is entitled to an interest in the other spouse’s family assets on a “triggering event.” The triggering events are a separation agreement, a court declaration that there is no reasonable prospect of reconciliation, an order dissolving the marriage or a judicial separation or an order declaring the marriage void. In this case, there was no triggering event during Mrs. Zuk’s life.

After Mrs. Zuk’s death, her personal representative could not bring an application for a declaration that there was not reasonable prospect of reconciliation. The court could only make such a declaration if the spouses were living.

If there had been a triggering event during Mrs. Zuk’s lifetime, then her personal representative would have been able to proceed with the division of property claim (Fong v. Fong (1981), 25 RFL (2d) 277 (BCSC)). Interestingly, Mrs. Zuk had obtained a declaration that there was no reasonable prospect of reconciliation from a Master, but the declaration was set aside on the grounds that the Master did not have jurisdiction to make the declaration in the circumstances (Zuk v. Zuk, 2006 BCCA 1).

Mr. Justice Melnick also found that the jointure had not been severed. Neither Mr. nor Mrs. Zuk alienated an interest in the joint tenancy. Nor did they agree to sever the joint tenancy. Accordingly, the matrimonial property went to Mr. Zuk by right of survivorship.

Mr. Justice Melnick considered whether Mrs. Zuk’s personal representative could succeed in a resulting or constructive trust claim. He held that she could not succeed. He noted that a constructive trust was a remedy for unjust enrichment. Although Mr. Zuk might have been enriched, and Mrs. Zuk’s estate might have suffered a deprivation, Mr. Justice Melnick held that the joint tenancy was a juristic reason for the enrichment.

I have some concerns about this last part of the decision. The joint tenancy may well be a juristic reason for the enrichment, but I think it would have been preferable if the court declined to consider this claim until it was properly brought, evidence adduced and fully argued.

The law of unjust enrichment developed in Canada to a large extent in the context of claims by common-law spouses who contributed to property held in their common-law spouses name. The courts developed this area of law to fill in a void in provincial property and family law. Were it not for unjust enrichment, common-law spouses who had worked and contributed to, for example, the family farm would have been left with nothing on the breakdown of the relationship.

I think an analagous argument could be made here. Mrs. Zuk’s children may be deprived of an inheritance because of the very technical division of property scheme in the Family Relations Act. There seems to be a void in the law. This might have been an appropriate case to more fully explore an unjust enrichment claim.

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