Saturday, December 12, 2015

Can a Former Spouse Bring a Family Law Claim to Divide Family Property Against the Estate of His or Her Deceased Former Spouse?

In a recent decision, Howland Estate v. Sikora, 2015 BCSC 2248, the Supreme Court of British Columbia held that a former spouse may bring a claim for the division of family property under the Family Law Act against the estate his deceased former spouse if the claim is filed within the limitation period set out in section 198 of the Family Law Act. In other words, a surviving spouse’s Family Law Act claim is not defeated by the death of the other spouse.

Martha Antoinette Howland and Kelvin Joseph Sikora lived together in a common law spouse relationship until their separation in August 2012. After separation, Ms. Howland started a lawsuit under the Partition of Property Act, seeking to have property they jointly owned sold. She died on March 2, 2013.  On May 5, 2013, Mr. Sikora filed a counterclaim seeking a division of family property under the Family Law Act.

Ms. Howland’s executor asked the court to dismiss the counterclaim. She argued that neither the deceased person nor the deceased person’s personal representative is a “spouse” or “former spouse” under the Family Law Act, and, therefore, the surviving former spouse, in this case Mr. Sikora, could not bring a Family Law Act claim following the deceased’s death.

Mr. Justice Harvey held that Mr. Sikora could proceed with his counterclaim. Mr. Sikora’s property rights crystallized under the Family Law Act on the date of separation. This stands in contrast the previous legislation in British Columbia, the Family Relations Act, pursuant to which there had to be a triggering event such as a separation agreement, divorce or a court declaration that there was no reasonable prospect of reconciliation before each former spouse acquired a property right to family assets held by the other.

Because Mr. Sikora’s property rights crystallized on the date of separation, he could proceed with a claim to a division of the family property pursuant to the Family Law Act, provided he did so within two years of the date of separation. This is the limitation period for a common law spouse to file a Family Law Act claim for the division of property.
Mr. Justice Harvey wrote at paragraphs 23 and 24:

[23]         Here, the action was commenced within that timeframe. Although the claimant was no longer alive when this occurred, she was alive when the respondent’s entitlement to an undivided half interest in the property arose upon separation. Therefore, this is unlike the situation where an order enforcing a personal obligation, such as spousal or child support, is sought against a deceased person. More importantly, nothing in s-s 198(2) stipulates that the action must be commenced against the other spouse. These features distinguish the present case from [British Columbia (Public Trustee) v]. Price [43 B.C.L.R. (2d) 368 (C.A.)].
[24]         For these reasons, I find that the respondent’s right to bring an action for property division under Part 5 of the FLA crystallized upon the coming into force of the FLA given their separation had occurred less than two years before the filing of the counterclaim.

Mr. Justice Harvey’s decision dovetails well with the provisions of the new (well, after a year and a half, relatively new) Wills, Estates and Succession Act, under which a person who ceases to be a spouse (usually on separation) loses the succession rights of a spouse. For example, a person who has ceased to be a spouse death may not make a claim to vary a will of a deceased former spouse, is not entitled to a share of the estate if the deceased died intestate, and unless there is a contrary intention appearing in the will, a gift by will to a spouse is revoked when he or she ceases to be a spouse.  The rationale for these provisions of the Wills, Estates and Succession Act is that the former spouse may pursue his or her claim under the Family Law Act, and should not be in a position to have both the family law rights of a former spouse, and the succession rights of a spouse.

If Mr. Justice Harvey had decided that a former spouse could not make a Family Law Act claim against the estate of the deceased former spouse, then the surviving former spouse who had not commenced a claim before the death of his or her formal spouse would be in the position of having lost his or her succession rights, but without any recourse to a share of family property under the Family Law Act, a result which in some cases would be most unjust.

There is one concern I have (actually I have several, but am only addressing one here) about the potential effects of the Family Law Act following the death of a former spouse. In the Howland Estate case, Ms. Howland and Mr. Sikora were common law rather than married spouses. The limitation period was two years from the date of separation. Although there can be disputes about when spouses separate, at some point it will usually be clear when the limitation period has expired. A personal representative may then be comfortable distributing the estate if no Family Law Act claim has been brought by the surviving former spouse. But the limitation period for a married spouse is different. The relevant section is 198(2) of the Family Law Act, which says:

(2) A spouse may start a proceeding for an order under Part 5 [Property Division] to divide property or family debt, Part 6 [Pension Division] to divide a pension, or Part 7 [Child and Spousal Support] for spousal support, no later than 2 years after,
(a) in the case of spouses who were married, the date
(i)   a judgment granting a divorce of the spouses is made, or
(ii)   an order is made declaring the marriage of the spouses to be a nullity, or
(b) in the case of spouses who were living in a marriage-like relationship, the date the spouses separated.

As I interpret this, the limitation does not begin to run in the case of married spouses until a divorce or order declaring the marriage to be a nullity. If a spouse dies without a divorce, or order declaring the marriage to be a nullity, and there is no separation agreement, the surviving spouse could conceivably commence a claim many years after separation, and even many years after death. There are various ways the deceased’s personal representative may be able to deal with this issue if he or she is aware of the potential claim, but I suspect there will be cases where a personal representative may distribute the estate without recognizing that a former married spouse may make a Family Law Act claim, especially if spouses had been separated for a long period of time before one of them dies. 

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