Sunday, June 17, 2007

Somodi v. Szabados

When Margit Kolvek bought a house on 8th Avenue in Vancouver, B.C., Istvan Somodi lived in the house as a tenant. Margit Kolvek moved into the house after she bought it, and Mr. Somodi continued to live there. The house was divided into suites, and there were other tenants over the years. But, except while the house was being rebuilt after a fire, both Ms. Kolvek and Mr. Somodi lived in the house until Ms. Kolvek's death in November 1999.

Their relationship over the years is not entirely clear. Several tenants considered them to be a couple, but Ms. Kolvek denied to her family that she and Mr. Somodi had a romantic relationship. They each filed income tax returns on the basis that they were not married or living in a conjugal relationship.

Ms. Kolvek made a will in 1978, in which she appointed her son, Zoltan Szabados, as her executor, and left her entire estate to him. Mr. Szabados obtained letters probate of the will on January 25, 2000.

Mr. Somodi brought a claim under the Wills Variation Act to vary Margit Kolvek's will. He alleged that they lived in a marriage-like relationship from 1964, until Ms. Kolvek's death. In the circumstances, he argued, she had not made adequate provision in her will for him.

As I have written before, the Wills Variation Act allows a person who has lived in a marriage-like relationship for at least two years before the other's death, may make an application to vary a will under the Wills Variation Act. But, this was not always so. When Ms. Kolvek died, the legislation did not give a common-law spouse the right to apply. A claimant had to have been legally married to the deceased at the time of death. Ms. Kolvek's son argued that even if Mr. Somodi lived in a marriage-like relationship with Ms. Kolvek, he had no right to apply.

Mr. Justice Cullen, in his reasons for judgment released Thursday in Somodi v. Szabados, 2007 BCSC 857, rejected Ms. Kolvek's son's argument that Mr. Somodi could not apply. Mr. Justice Cullen noted that in a previous decision, Grigg v. Berg Estate, 2000 BCSC 36, the court held that then wording of the Wills Variation Act was unconstitutional in its discriminatory affects on common law spouses. Accordingly, like the common-law spouse in Grigg, Mr. Somodi had the right to make a claim under the Wills Variation Act.

Mr. Justice Cullen found that Mr. Somodi did live in a marriage-like relationship with Ms. Kolvek. Although the relationship started out as a landlord-tenant relationship, over time it developed “into a relationship involving intimacy, shared tasks and expenditures, and ultimately, mutual support.”

Mr. Somodi faced another obstacle. There is a six-month limitation period for filing a claim under the Wills Variation Act, and the clock begins ticking from the date the will is probated. In this case Mr. Somodi did not file his claim until after two years had passed since Court granted probate.

But, when Mr. Szabados applied to probate the will, he did not give notice to Mr. Somodi of his intention to apply. Section 112 of the Estate Administration Act requires an executor applying for probate to first give notice his or her intent to apply together with a copy of the will to a common-law spouse (among others). Mr. Justice Cullen held that Mr. Szabados' failure to give notice of his intent to apply to Mr. Somodi precluded Mr. Szabados from relying on the limitation period.

Mr. Justice Cullen varied the will to provide Mr. Somodi with the income from forty percent of Ms. Kolvek's estate during Mr. Somodi's lifetime. In arriving at this award Mr. Justice Cullen took into account the fact that for a part of the time since Ms Kolvek's death, Mr. Somodi had been living in the house, and receiving the rents from the tenants, while Mr. Szabados had been making the mortgage and insurance payments.

Mr. Justice Cullen also held that the purpose of the Wills Variation Act is not to build up the claimant's estate, but rather to provide the claimant with support and maintenance.

This case lends support to the view that although common-law spouses may apply under the Wills Variation Act, the courts may be less generous in making awards to a common-law spouse than a married spouse in similar circumstances. I suspect that if Mr. Somodi and Ms. Kolvek had been married, Mr. Somodi would have received a larger portion of the estate.

I think it is also relevant that at the time of the decision, Mr. Somodi was no longer capable of managing his own affairs. The Public Guardian and Trustee of British Columbia had been appointed to manage his finances. There would likely have been no significant practical benefit to Mr. Somodi of awarding him a share of the capital of the estate.

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