Saturday, July 05, 2014

Eckford v. Vanderwood

A lot can happen between the time of the death of a spouse or parent and a trial of a wills variation claim. What happens if the court finds that the deceased’s made an adequate provision for his spouse at the time of death, but there is a change in the circumstances of the surviving spouse making a claim in British Columbia to vary the will before the trial is heard?

This issue has been considered a few times by British Columbia courts under the Wills Variation Act, and the same principles will likely apply to the new legislation, Division 6, of Part 4, of the Wills, Estates and Succession Act). The most recent decision considering this issue is the Court of Appeal decision in Eckford v. Vanderwood, 2014 BCCA 261.

Johan Gerard Van Der Woude was Kathryn Eckford’s common-law spouse. They had lived together for about four years when he died on September 4, 2010. In his will, which he had made in September 2005, he left 40 percent of his estate to each of his two children, and 20 percent to his mother.

Mr. Van Der Woude and Ms. Eckford had owned a house together as joint tenants. The house had been owned by Mr. Van Der Woude, and Ms. Eckford bought a half interest in it for $150,000. Because they held it in a joint tenancy, on his death Ms. Eckford became the sole owner by right of survivorship. The house was then assessed at $360,000 but sold for $328,000 with Ms. Eckford ultimate receiving just under $310,000 after commissions and other expenses.

The gross value of Mr. Van Der Woude’s other assets, which formed his estate to be distributed under his will, was about $400,000.

Ms. Eckford made a claim under the Wills Variation Act to vary her late common-law husband’s will. Pursuant to section 2 of the Wills Variation Act (now section 60 of the Wills, Estates and Succession Act), if the court finds that the will did not make “adequate provision” for her then the court may vary the will to make such provision for her as the court thinks “adequate, just and equitable in the circumstances.”

Before Mr. Van Der Woude’s death, Ms. Eckford had been employed as a secretary with the Kamloops School District. Although she had some health problems, they had not affected her ability to work.

Following Mr. Van Der Woude’s death, Ms. Eckford left work in June 2011 because of a lung infection and because of various medical problems is unable to work. Her income has been reduced to about $980 per month.

When this case when to trial, her assets were worth a little over $500,000. Mr. Van Der Woude’s daughter was 28 and a student, while his son was 37 and a self employed furniture mover with a modest income. Neither of the children had significant assets. The other beneficiary of the will, Mr. Van Der Woude’s mother, did not have sufficient income to meet her needs, and the deceased had been giving her $200 per month.

Mr. Justice Butler, in the Supreme Court of British Columbia, dismissed Ms. Eckford’s claim, finding that when taking into account the fact that she received the house by right of survivorship, Mr. Van Der Woude had made adequate provision for her. The Supreme Court decision is reported here.

She appealed.

One of the grounds of appeal was that the trial judge had not taken into account her decline in health, and her resulting change in financial circumstances.

In a previous decision, Landy v. Landy Estate, 1991 Canlii 564, the British Columbia Court of Appeal held that the court should look at the circumstances of the person making a claim as they were at the time of death when considering whether the deceased made adequate provision for the claimant. When determining if adequate provision has been made, the court may only consider changes in circumstances after the date of death if they were reasonably foreseeable when the deceased died. On the other hand, if the court finds that adequate provision has not been made, then the court may consider the claimant’s circumstances, as well as those of the other beneficiaries, at the date of trial, taking into account changes since death, when deciding what provision is “adequate, just and equitable.”

In this case, the Court of Appeal agreed with the trial judge that Ms. Eckford’s change in her health and financial circumstances were not reasonably foreseeable with her common-law spouse died. Mr. Justice Goepel wrote at paragraph 61,

[61]         I agree with the trial judge’s finding. While the Testator was aware that Ms. Eckford suffered from hypertension, asthma and diabetes, those conditions were not impairing her ability to work and function. In their years together they travelled widely without incident. At the time of the Testator’s death Ms. Eckford was working full-time. There was nothing in the evidence which suggested that the Testator should have reasonably foreseen the rapid decline in Ms. Eckford’s health within a short time of his death. I find that it was not reasonably foreseeable at the date of the Testator’s death that Ms. Eckford’s health would decline. The trial judge was correct in the first stage of the analysis, in not taking into account Ms. Eckford’s medical disabilities in determining whether the Testator had made adequate provision for Ms. Eckford. I would not accede to the first ground of appeal.

The Court of Appeal also agreed with the trial judge’s assessment that Mr. Van Der Woude had made adequate provision for Ms. Eckford through the operation of the joint tenancy of their home. In effect, she received more than either of his children, the added value to her interest in the home on his death, exceeding the share of his estate each would receive under his will. Their common law relationship was relatively short, and her claim was weighed against the competing moral claims of his children, and those of his mother.

In the result, Ms. Eckford was unsuccessful in persuading either the Supreme Court of British Columbia or the Court of Appeal to vary Mr. Van Der Woude’s will.

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