Tag: Family Law

Vancouver Estate Lawyer – Cutting Family Ties and Wills Variation

Cutting Ties with the Family and Estrangement - Disinherited

Vancouver lawyers Trevor Todd and Jackson Todd have over 60 years combined experience in understanding and getting justice through wills variation proceedings for parties disinherited from the result of dysfunctional and often toxic families to the extent that they had to cut ties..

I have frequently interviewed clients who told me innumerable variations of the theme that caused them to cut ties with their parents, only to be met with a memorandum in the parents last wills and testament, explaining that they are disinheriting that child as a result of his or her deliberate estrangement.

A wills variation claim on behalf of that child will invariably be met with the legal defence of estrangement, and thus no moral obligation on the part of the deceased parent to provide for the disinherited child.

I have frequently stated to clients that it is extremely easy to become a parent, but very difficult to be a wonderful and nurturing parent at all times.

Whenever I have spoken in public on the topic and asked the crowd if there were more functional families than dysfunctional families, it invariably invites a ripple of nervous laughter.

There are many dysfunctional families, often with toxic parents that cause children to leave home, often at an early age, and have little or no contact again with the parents for many years if at all.

Reasons for Estrangement

A short list of reasons that I have heard as to why the child has deliberately cut off ties with his or her parents is as follows:

1) Allegations of extremely self-centered narcissistic personalities that are typically belittling, critical and non supportive;
2) emotional abuse, including constant criticism and manipulation;
3) physical abuse, including sexual
4) competition
5) being told you are hated because you remind your mother of your father;
6) emotional blackmail such as guilt;
7) unreasonable demands;
8) histrionic behavior “I am going to kill myself if you don’t—“;
9) a total disregard for your feelings and needs;
10) controlling
11) overly critical resulting in low to extremely low self-esteem;
12) for no reason at all-the child was a scapegoat and never knew why
13) mental illness, drug and alcohol abuse;

Generally speaking, by the time a client comes to me, having been disinherited, the child has usually gone through some form of counselling, which often will lend support to a defence to the allegations of estrangement, namely that it was essential to your emotional and physical health to separate yourself from your parents.

Probably way more often that not they have experienced “difficult lives”.

J.R v J.D.M 2016 BCSC 2265 is an example of a decision where an estranged child was disinherited, but no explanation was left by the deceased other than the notary’s notes that he had not seen his daughter for over 10 years, but was awarded %60 of the estate.

The daughters evidence was that her late father had sexually intimate emotionally abused her and never financially contributed to her education and general welfare.

The daughter was believed, and the court found that as a fact it was the father’s mistreatment of his daughter and his voluntary abdication of his parental obligations that cause the fracture of their father-daughter relationship.

The court held that the onus for repairing the relationship and seeking any form of reconciliation with his daughter rested squarely with the deceased father and his moral duty to her was enhanced as a result of his blameworthy conduct.

The court can stated that when faced with a long period of estrangement, the court will inquire into the role played by the testator. If the estrangement is largely the fault of the testator, it will likely not negated testator’s moral duty to an adult child. Gray v Nantel 2002 BCCA 94.

Family Law

Marital Separation and Intention

H.S.S. v S.H.D. 20216 BCSC 1300 discussed the legal concept of living separate and apart from a marriage like relationship or marriage as it is sometimes difficult to determine when or if a separation has occurred, depending on the intention at least one of of the parties.

This decision was subsequently followed in HCF v DTF 2017 BC SC 1226.

In short, the two cases state that parties will be found to have separated when both of the following conditions are met:

1. A settled intention by one spouse to live separate and apart; and

2. Action taken by that spouse consistent with his or her intention to live separate and apart. The court started by referring to section 8 of the Divorce act, which prescribes when a married couple is deemed to be living separate and apart for the purposes of obtaining a divorce:

3(a) – spouses shall be deemed to have lived separate and apart for any period during which they lived apart and either of them had the intention to live separate and apart from the other.

A physical separation of the spouses, coupled with one party’s intention to live separate and apart, is sufficient –Nearing v Sauer 2015 BCSC 58
it is often more difficult to determine when a common-law couple has terminated their relationship as there is no statutory guideline and there is often conflicting evidence about intention.

The court’s task is to assess objectively, on the totality of the evidence, whether one spouse held a settled intention to separate and communicated that intention through his or her conduct to the other spouse. An express statement is only one of the factors for consideration in what is necessarily a contextual analysis.

The Ontario Court of Appeal in Sanderson v . Russell (1979) 24 OR (2d) 429 held in the context of a common-law relationship, that a relationship is come to an end “ when either party regards it as being at an end, and by his or her conduct, has demonstrated in a convincing manner that this particular state of mind is a settled one.”

The Supreme Court of Canada confirmed that passage of law in Hodge v . The Canada ( Minister of Human Resources Development) 2004 SCC 65 at paragraph 42

In Weber v Leclerc 2015 BCCA 492 , the court considered the definition of spouse under the Family Law act.

The court reviewed the appellate authorities that have evaluated the characteristics of a marriage like relationship and observed that the jurisprudence has evolved in accordance with the changing societal norms surrounding marriage. The court must apply a holistic approach, having regard to all aspects of the relationship. While the court must consider the evidence expressly describing the pre-parties intentions, the court must test that evidence by considering whether the objective evidence of the parties lifestyle and interactions is consonant with those intentions.

The authorities also state that living arrangements of the parties are not determinative, but this factor is frequently accorded significant weight. Routley v Paget 2006 BC SC 419

The following factors of been accepted as informing the analysis of whether the parties are living as spouses:

whether the parties vacationed together
the presence or absence of marital relations
how the parties conducted their financial affairs, including any financial planning. They undertook as a couple and how they file their tax returns.
estate planning
making shared plans for the future
participation in joint social activities and the manner in which the spouses presented themselves to others

The authorities mandate a contextual and holistic inquiry, having regard to all aspects of the relationship. There is no checklist of characteristics that will invariably be found in all marriages. The presence or absence of any particular factor is not determinative of whether the parties carried on the spousal relationship. Weber at para. 21

Family Law separation

Division of Family Assets and Debt

LW v FW 2018 BCSC 1924 discusses the legal framework for the division of family assets/property and debt.

In this particular case it was an application for reapportionment of debt in favour of the female spouse.

Section 81 of the FAMILY LAW ACT provides that on separation, each spouses presumptively entitled to an undivided half interest in all family property and is responsible for half of all family debt, unless the reapportionment provisions are engaged.

Family property is defined in section 84 and includes property acquired by a spouse post separation if it is derived from a family asset or assets owned by a spouse at separation.

Family debt is defined in section 86 as all financial obligations incurred by a spouse during the relationship as well as debt incurred after the date of separation if it is incurred to maintain family property. Family property and debt are valid at the time of the hearing or trial, absent a court order to a different effect.

The reapportionment provisions are found in section 95 of the Family Law act which provides the court with the power to reapportion family property or family debt, or both, if it finds an equal division is significantly unfair after having considered the various factors set out in sections 95(2) and (3)

Those factors are:

1) the duration of the relationship between the spouses

2) the terms of any agreement between the spouses, other than agreement described in

3) A spouse’s contribution to the career or career potential of the other spouse

4) –whether family debt was incurred in the normal course of the relationship between the spouses -if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt

5) -whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;

6) the fact that a spouse, other than a spouse acting in good faith,

A) substantially reduce the value of family property, or

B) disposed of, transferred or converted property that is or would have been a family property, or exchanged property that is or would have been family property into another form, causing the other spouses interest in the property or family property to be defeated or adversely affected;

7) a tax liability that may be incurred by a spouses result of the transfer or sale of property or as a result of an order

8) any other factor, other than the consideration referred to in subsection 3, that may lead to significant unfairness.;

The court may also consider the extent to which the financial means and earning capacity of the spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses of, on making a determination respecting spousal support, the objectives of spousal support are under section 161 have not been met.

debt family assets Family Law

Spousal or Child Support After Death

Bouchard v Bouchard 2018 BCSC 1728 dismissed an application for lump sum child maintenance for monies held in the estate of the deceased to died intestate, but reviewed the law relating to continuing obligations to pay spousal or child maintenance after death and the impact of the recently newish Family Law act allowing for same.

The deceased had been awarded approximately $1.9 million in a serious motor vehicle accident but became drug addicted and spent much of the estate.

Arrears of child maintenance in the amount of $300 per month had accumulated, and the mother on behalf of the infant children of the deceased, brought a court application that monies held in trust by the personal injury lawyers be paid to her as a lump sum child maintenance.

The court declined for largely procedural reasons including the children likely or the soul intestate heirs and their rights needed to be protected.

The court noted that any award for child support would only be a debt as against the deceased’s estate, and establishing a debt against the estate of the deceased person does not entitle a litigant to a court order for the amount of the debt. Debts against an estate must still be considered in terms of priority by the executor or estate administrator, as the case may be. This is one of the reasons why administration of the deceased’s estate is critical.

In the past, under the common law, of payor’s child support obligation ended upon death, Milne v MacDonald Estate 1986 CanLii 931 (BCCA) that unless the parties reached an agreement or there was a court order specifying that the payors support obligations would continue beyond his or her death. If there is such an agreement or court order in existence at the time of death, his obligations could continue as a liability of the estate Crain v Crain 1996 Carswell BC 1174 (BCSC) at paragraphs 11 – 15

The common law has now been changed by the Family Law act that where a payor has a duty to pay support under an agreement or order dies and the agreement or order is silent about whether that duty continues after the payor’s death and is a debt of his or her estate, Section 171 (3) of the FLA now allows the recipient of that support to apply for an order that the duty to pay support continues despite the death of the payor and is a debt of the estate, based on the factors in sections 171 (1)

This recent change in the FLA was allowed in Kumagai v Campbell Estate 2016BC SC 1161 where the act for a court stated that section 171 (3) FLA must be interpreted in a manner consistent with the legislature’s intention to provide a mechanism for the ongoing payment of support upon the death of the payee or spouse.
As a result, the claimant was not precluded by the wording of section 1713) from applying for an order that the deceased spousal support obligation continues despite his death and becomes a debt of his estate.

The court specifically found that the legislative intent of these provisions was to provide a mechanism for the ongoing payment of spousal and child support upon the death of the payee or spouse based on the factors listed in section 171 (1) . The legislature has clearly and expressly change the common-law principles with respect to support under the FLA

The factors set out in section 171 ( 1) entitle support obligations after death in FLA are:

171 (1) before making an order under section 170 (g) for an order after death that a duty to pay child support or spousal support continues after death, the court must consider it all of the following factors:

a) That the person receiving child support or spousal support has a significant need for support that is likely to continue past the death of the person paying child support or spousal support;
b) that the estate of the person paying child support or spousal support is sufficient to meet the needs referred to in paragraph a after taking into account all claims on the estate, including those of creditors and beneficiary;
c) that no other practical means exist to meet the need referred to in paragraph a

2. If an agreement, or an order under section 170g) is made in the person having a duty to pay child support or spousal support dies, the person’s personal representative may make an application, and the court may make an order, to:

a) Set aside or replace with an order made under this part all or part of the agreement, or
b) change, suspend or terminate the order.

3. If a person having a duty to pay child support or spousal support under an agreement or order dies and the agreement or order is silent respecting whether the duty continues after the death of the person and is a debt of his or her estate,

a) The person receiving support may make an application under section 149 relating to children or 165 relating to spouses and
b) if, on consideration of the factors set out in subsection 1 of this section, an order is made, the duty to pay child support or spousal support continues despite the death of the person and as a debt of his or her estate for the period fixed by the court.

Family Law intestacy probate

Same Sex Partnership

Hinks v Gallardo 20114 ONCA 494 held that a British same sex partnership was a valid spousal marriage in Ontario and presumably also in British Columbia.

A Canadian and a British citizen entered into a civil partnership under the Civil Partnership Act (UK) which created a parallel regime to marriage that provided same sex couples with the same legal financial and practical benefits and burdens as married spouses in England.

When the parties moved back to Ontario and sought a divorce the court was asked to determine if the civil partnership created spouses as defined by the Divorce act of Canada and both the trial and appeal court held that it did.

The court held that the terms spouses and marriage was consistent with modern approach to statutory interpretation and that one of the fundamental purposes of the Divorce act was to provide parties with equitable and certain process for resolving economic issues arising our of breakdown of the relationship.

This interpretation was consistent with the values set out in the Canadian Charter of Rights and Freedoms.

The motion judge first considered the very different constitutional and legislative frameworks in Canada and the U.K. regarding marriage. She stated, at paras. 27-30 and 36:

The issue of whether the former common law definition of marriage as “the voluntary union for life of one man and one woman, to the exclusion of all others” was discriminatory against same-sex couples came before the Ontario Court of Appeal in Halpern v. Canada (Attorney General) (2003), 65 O.R. (3d) 161. There, the court expressly held that “separate but equal” partnership legislation that fell short of marriage was contrary to Canada’s public policy, was discriminatory and violated the equality guarantees of our Charter.

The court in Halpern specifically found that same-sex couples were excluded from the fundamental societal institution called marriage, saying:

Based on the foregoing analysis, it is our view that the dignity of persons, in same-sex relationships is violated by the exclusion of same-sex couples from the institution of marriage. Accordingly, we conclude that the common-law definition of marriage as “the voluntary union for life of one man and one woman to the exclusion of all others” violates s. 15(1) of the Charter.

As a result, the court struck down the former definition of marriage and reformulated it as “the voluntary union for life of two persons to the exclusion of all others”. This new definition of marriage has effectively been codified in the Civil Marriage Act, which also codifies in the Preamble the policy statements the courts have enunciated in Halpern and elsewhere.

To the contrary, the United Kingdom has followed a different policy path. There, a civil partnership is the only method by which gay people can change their legal status from single to something different. They are not permitted to marry; instead, the U.K. has developed a parallel but equal system exclusively for the gay community. In the U.K., a civil partnership and a marriage are legally equal. They are considered substantively equal. This was confirmed by the High Court of Justice, Family Division in the U.K. in Wilkinson v. Kitzinger

Civil Marriage Act Family Law Legal Procedures marriage Same Sex Relationship

Sworn Financial Disclosure

Shinder v Shinder 2017 ONSC 4177 sets out the importance of how sworn financial disclosure in family (and estate) court actions must be honest and complete as it is a “bedrock principle” that the parties are entitled to rely upon.

The Supreme Court of Canada has confirmed that honest, complete financial disclosure is a bedrock principle in family law disputes. In Rick v. Brandsema, 2009 SCC 10, 303 D.L.R. (4th) 193, Abella J. states, at para. 47:

a duty to make full and honest disclosure of all relevant financial information is required to protect the integrity of the result of negotiations undertaken in these uniquely vulnerable circumstances.

The deliberate failure to make such disclosure may render the agreement vulnerable to judicial intervention where the result is a negotiated settlement that is substantially at variance from the objectives of the governing legislation.

30 I adopt the comments of Aitken J. in Buttrum v. Buttrum (2001), 15 R.F.L. (5th) 250, at para. 68 (Ont. S.C.) that the obligation to disclose requires completeness, clarity, and simplicity in disclosure made in sworn Financial Statements:

Complete, honest and on-going financial disclosure is required during the course of a family law case. That is the very purpose of r. 13. [ . . . ] The purpose of financial statements is to ensure disclosure is made quickly and repeatedly as circumstances change, and in a manner that is consistent and easy to follow. [Emphasis added.]

31 Disclosure cannot be selective or misleading. Understanding the assets and debts at marriage and separation is not meant to be a costly game, requiring parties to read the fine print seeking clarification and ferreting out information.

32 Parties are entitled to, and do rely on sworn Financial Statements to accurately set out the assets and interests and values the property of a party as a basis for settling their cases. Accurate and complete Financial Statements are crucially important

Family Law Financial Disclosure Legal Procedures

Common Law Spouse Expanded

Connor estate 2017 BCSC 978 could be a bit of a game changer for common law WESA spouses in the sense that the court finding that the parties were spouses could be an “expansion” of the concept of common law spouse.

Kent J found a long time couple to be common law spouses despite:

the parties maintained two entirely separate residences and did not live under the same roof;
each undertook their own separate domestic tasks such as meal preparation, shopping, tending to clothing and household maintenance;
no mingling of finances occurred;
sexual relations between them in their respective households were significantly reduced in the last two years;
Ms. Connor’s hospital records identified her marital status as single and indicated Mr. Chambers as an alternative contact identifying him as a “friend”;
Ms. Connor identified herself as “single” on her tax returns and Mr. Chambers identified himself as “separated” after 2012;
Mr. Chambers identified his wife as his “current spouse” in the spousal declaration for his municipal pension plan application in September 2011, a designation that was never changed;
in August 2013 Mr. Chambers declared for the purposes of his group benefits with Manulife Financial that he had no common-law spouse and he did not declare Ms. Connor as a beneficiary;
Mr. Chambers’ children had no involvement in the life of Ms. Connor and indeed the son was never even introduced to her; and
neither Mr. Chambers nor Ms. Connor displayed photographs of each other in their respective residences.

The application to determine if Chambers was a common law spouse was opposed by her five half siblings whom she did not know.

For much of the long time relationship the male partner Chambers lived with his wife and family and saw the female Connor when he could.

The Judge found that they never lived together under the same roof as a result of Connor being a hoarder and there was no room for her partner Chambers to reside in her residence.

She had left him her $410,000 RRSP and the Judge found it likely that while she died intestate, that she had prepared a will that had left him a substantial bequest, but the will could not be found.

Molodov/lch v. Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), which was also relied on in the case referred to above, was invoked in a recent WESA decision to identify generally accepted characteristics of a “marriage-like relationship”, Richardson Estate (Re), 2014 BCSC 2162:

[22] A leading authority with respect to the meaning of “marriage-like relationship” (sometimes also referred to as “cohabitation”, Campbell v. Campbell. 2011 BCSC 1491 at para. 80) is Molodowich v. Penttinen (1980), 17 RFL (2d) 376 (ONDC):

[16] I propose to consolidate the statements just quoted by considering the facts and circumstances of this case with the guidance of a series of questions listed under the seven descriptive components involved, to varying degrees and combinations, in the complex group of human interrelationships broadly described by the words “cohabitation” and “consortium”

7 Guidelines to Common Law Relationships

(1) SHELTER:

(a) Did the parties live under the same roof?

(b) What vie re the sleeping arrangements?

(2) SEXUAL AND PERSONAL BEHAVIOUR:

(a) Did the parties have sexual relations? If not, why not?

(b) Did they maintain an attitude of fidelity to each other?

(d) Did they communicate on a personal level?

(e) Did they eat their meals together?

(f) What, if anything, did they do to assist each other with problems or during illness?

(g) Did they buy gifts for each other on special occasions?

(3) SERVICES:

What was the conduct and habit of the parties in relation to:

(a) Preparation of meals,

(b) Washing and mending clothes,

(d) Household maintenance,

(e) Any other domestic services?

(4) SOCIAL:

(a) Did they participate together or separately in neighbourhood and community activities?

(b) What was the relationship and conduct of each of them towards members of their

respective families and how did such families behave towards the parties?

(5) SOCIETAL:

What was the attitude and conduct of the community towards each of them and as a couple?

(6) SUPPORT (ECONOMIC):

a) What were the financial arrangements between the parties regarding the provision of or contribution towards the necessaries of life (food, clothing, shelter, recreation, etc.)?

(b) What were the arrangements concerning the acquisition and ownership of property?

(c) Was there any special financial arrangement between them which both agreed would be determinant of their overall relationship?

(7) CHILDREN:

What was the attitude and conduct of the parties concerning children?

[23] Other authorities have emphasized that this is not a checklist and “these elements may be present in varying degrees and not are all necessary for the relationship to be found conjugal” (M. v. H. [1999] 2 S C R. Sat para. 59; cited in Austin v. Goerz 2007 BCCA 586at para. 57: the Court of Appeal equated “conjugal” with “marriage-like” in the same paragraph).

8 In Weber v. Leclerc 2015 BCCA 492, leave to appeal to SCC refused, [2016] S.C.C A No 19, the Court again reviewed the case law respecting “marriage-like relationships”, noting:

[23] The parties’ intentions — particularly the expectation that the relationship will be of lengthy, indeterminate duration — may be of importance in determining whether a relationship is “marriage-like”. While the court will consider the evidence expressly describing the parties’ intentions during the relationship, it will also test that evidence by considering whether the objective evidence is consonant with those intentions.

[24] The question of whether a relationship is “marriage-like” will also typically depend on more than just their intentions. Objective evidence of the parties’ lifestyle and interactions will also provide direct guidance on the question of whether the relationship was “marriage-like”.

Common law common law spouse Family Law Living Arrangements marriage

Trustee For Child Under Will Has Priority

Leniuk Estate 2016 BCSC 159 held that a trustee for a child appointed under a will has priority over a guardian appointed under the Family Law act to hold funds in trust for a child’s behalf.

An application to have a guardian appointed trustee who was different from the will appointed trustee Part 8 of the Family Lawact was dismissed.

The Public Guardians position that the will appointed trustee is paramount and that Part 8 of the Family Law act was upheld by the court.

The will authorized the appointed trustee to make any payments for the beneficiary under 19 to the guardian of such person.

The Court stated inter alia:

Directions of the Court are sought because it is submitted that the executors and trustees are persons “having a duty to deliver property to a child” as defined in s. 175 Infants Act either because there is an existing duty to deliver the property to a child or because they would be under a duty to deliver property to a child if the child were an adult. (ss. 175 (a)(b)).

[12] That however is not determinative given Part 8 of the FLA does not, in my view, apply in this situation. I say this for a number of reasons.

[13] Section 176 provides that a guardian, simply because they are a guardian, is not a trustee of a child’s property. As a result someone else can be trustee of the child’s property. Hence, a trust instrument, such as a will, that states a guardian is to receive a child’s property and is empowered to grant a discharge is not contrary to the section. Indeed s. 176 by its very wording recognizes this as it provides “by reason only of being a guardian”. (Emphasis added)

[14] In my opinion the FLA provisions were not intended to, nor do they, override trust instruments. For public policy reasons, the Legislature saw fit to provide that the FLA address the situation where there is property to which a child is entitled but the child only has a guardian and there is no existing trustee. In circumstances where the property exceeds the prescribed amount in the small property exception the child’s guardian is not deemed to be the child’s trustee simply because they are a guardian. An application to the Court is required in order to determine who the appropriate trustee should be. Section 179 provides the factors the Court should consider when appointing a child’s trustee. Similar to other provisions in the FLA, the best interests of the child are paramount. An example of a situation when this might occur would be if a child received property from a relative who died intestate.

[15] Given the significant repercussions if the FLA provisions were intended to override existing trusts, in my opinion the legislature would have addressed that explicitly. Since the FLA provisions when dealing with “small property” were clearly addressing issues of proportionality I cannot accept that it was intended that existing trusts would have to apply to appoint a guardian a trustee in order to deliver property to a child. The potential number of applications would undoubtedly be significant and the cost substantial. In addition it would result in an inappropriate layering of trustee on top of trustee. Finally, it would be contrary to the express terms of the trust representing the wishes, in this case, of the testator.

[17] Part 8 also recognizes in s. 175 that a trust instrument includes a will and that trustees are authorized under such an instrument to receive or hold property in trust for a child. In other words, such a trustee is included in the definition of trustee just as is a trustee appointed under the FLA.

[18] In addition Part 8 acknowledges a trust instrument’s priority over the provisions of the FLA. For example, s. 178(6) of the FLAdealing with the delivery of small property provides:
178 …

(6) Nothing in this section
(a) affects the duty of a trustee to deal with trust property in accordance with the terms of the trust, …
…

[19] Section 179, the appointment of a trustee by the Supreme Court provision, also contains an exception in s. 179(1)(b) which provides:

179 (1) Subject to subsection (2), the Supreme Court on application may appoint one or more persons as trustees over
…
(b) all property to which the child is entitled at the time the order is made and to which the child becomes entitled while the order is in effect, except property

(i) identified in the order, or

(ii) over which a trustee already has authority. (Emphasis added)

[20] Finally, s. 179(4) states:
179 …

(4) Except as provided for in an order made under this section, The Trustee Act applies to the trustee and the trust.

[21] To assert that children’s property advanced to a guardian by anyone is caught by these sections extends the FLA provisions beyond their purpose and the problem they were intended to address. The purpose of these sections is to ensure that there is a trustee to protect the interests of the child, whether that is the guardian as trustee or another person does not matter. The point is to have someone responsible for the infant’s funds and to address the fact, that often for various practical reasons, it is desirable for the guardians to have the funds. Where there is no trustee and where the property exceeds a certain value, the guardian can be appointed as trustee.

[22] This is not a situation where there is uncertainty over who is the infant’s trustee. It is the trust instrument (the Will) that establishes the trust and names the trustees. It is the terms of that instrument that govern the trust. As long as the trustees comply with the terms of the trust they are protected. In accepting a receipt from the guardian they would be acting in accordance with the terms of the will and the trust and as a result that would be a valid discharge.

[23] The trustees are in this instance attempting to delegate their duties as trustees to a third party. In effect they are seeking an order that amounts to a variation of the Will.

[24] As a result, where the trust instrument addresses the issue of advancing funds, whether income or capital, to a guardian and addresses the obtaining of a valid receipt there is no need for a court application.

Disinherited Child Family Law trustee

Unjust Enrichment in Common Law Relationships

The Ontario Court of Appeal in Reiter v Hollub 2017 ONCA 186 reviewed the law of unjust enrichment and dismissed a 6 year common law spouse’s claim that she should share in the increase in the property value of the matrimonial home owned by her male spouse .

The appeal Court reviewed the law of unjust enrichment and in particular the Supreme Court of Canada’s decision in Kerr v Barranow 2011 SCC 10.

The appellant, Jessica Reiter, appeals from the dismissal of her application for an interest in the increase in equity of a home owned by the respondent, Tiar Hollub, which she shared during their six year common law relationship.
Ms. Reiter advanced her claim on the basis of unjust enrichment. She argued that she had contributed to the $410,000 increase in the net value of the home over the course of the relationship. She relied on contributions she made to common living expenses and to the maintenance and repair of the residence. She also relied on the fact that she had given Mr. Hollub a one-time payment of $5,000 toward the mortgage.
Ms. Reiter also took the position that her relationship with Mr. Hollub amounted to a joint family venture as defined in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.
The application judge held that Ms. Reiter was unable to establish a joint family venture to support the requested remedy. She found no evidence that would support a conclusion that Ms. Reiter’s contributions had led to an increase in the value of the property. The application judge also found that the evidence did not support a joint family venture as defined in Kerr v. Baranow. As to Ms. Reiter’s $5,000 payment toward the mortgage, the application judge held that although Mr. Hollub had been enriched to Ms. Reiter’s detriment as a result of this contribution, his retention of the payment was justified by the parties’ agreement to share living expenses.
I see no reason to interfere with the application judge’s rejection of Ms. Reiter’s claim for a proprietary interest in the house. The application judge’s conclusions about the circumstances of Ms. Reiter’s contribution to expenses and about the nature of the relationship are entitled to deference. I would therefore dismiss that aspect of Ms. Reiter’s appeal. However, I would allow the appeal on the treatment of the $5,000 lump sum payment to Mr. Hollub.

In Kerr v. Baranow, at para. 31, Cromwell J. recognized that “[a]t the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain”. Since the Supreme Court’s 1980 decision in Pettkus v. Becker, [1980] 2 S.C.R. 834, unjust enrichment principles have been available to support claims made by domestic partners upon the breakdown of their relationship.

17 The test for unjust enrichment is well-settled. To establish unjust enrichment, the person advancing the claim must prove three things:

An enrichment of or benefit to the defendant;
A corresponding deprivation of the plaintiff; and
The absence of a juristic reason for the enrichment.

18 There are two steps to identifying whether there is a juristic reason for the responding party to retain the benefit incurred. First, the court must consider whether the case falls within a pre-existing category of juristic reason, including a contract, a disposition of law, donative intent, and other valid common law, equitable or statutory obligations: Kerr, at para. 43. If a case falls outside one of these established categories, the reasonable expectations of the parties and public policy considerations become relevant in assessing whether recovery should be denied: Kerr, at para. 44.

19 In Kerr v. Baranow, at para. 46, the Supreme Court outlined two possible remedies where unjust enrichment is established — a monetary award or a proprietary award. The court counselled, at para. 47, that the first remedy to consider is always the monetary award and that, in most cases, a monetary award is sufficient to remedy the unjust enrichment.

20 To obtain a proprietary award, the person advancing the claim based on unjust enrichment must demonstrate that monetary damages are insufficient and that there is a sufficiently substantial and direct causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property: Kerr, at paras. 50-51. A minor or indirect contribution will not suffice.

21 The court held that there are two different approaches to valuation for a monetary award: Kerr, at para. 55. First, a monetary award may be based on a quantum meruit, value received or fee-for-services basis. Second, a monetary award may be based on a value survived basis. This is where the joint family venture analysis becomes relevant.

22 To receive a monetary award on a value survived basis, the claimant must show that there was a joint family venture and that there was a link between his or her contributions to the joint family venture and the accumulation of assets and/or wealth: Kerr, at para. 100. Whether there is a joint family venture is a question of fact to be assessed in light of all of the relevant circumstances, including the four factors noted above — mutual effort, economic integration, actual intent and priority of the family: Kerr, at para. 100.

23 Justice Cromwell was careful to note that cohabiting couples are not a homogenous group: Kerr, at para. 88. The analysis must therefore take into account the particular circumstances of each relationship. The emphasis should be on how the parties actually lived their lives, not on their ex post facto assertions or the court’s view of how they ought to have done so: Kerr, at para. 88.

24 While the four factors identified above are helpful to determine whether the parties were engaged in a joint family venture, there is no closed list of relevant factors: Kerr, at para. 89. The factors Cromwell J. suggested were not a checklist of conditions, but a useful approach to a global analysis of the evidence and examples of relevant factors that a court may take into account: Kerr, at para. 89.

equity Family Law unjust enrichment

Parent Money to Children: Gift or Loan?

Wills Variation Refused-Assets Passing Outside of Estate Sufficient

Dheenshaw v Gill 2017 BCSC 319 deals with an increasingly commonly litigation problem- the advancement of large sums of parents money to their children and the subsequent determination whether the monies were a gift or a loan when matters go ” sideways”.

The court will look start at attempting to determine the intention of the parties when making the advancement of the monies which are usually made gratuitously.

There is usually a presumption that the advancement of funds was not a gift and that the onus of proving a gift is on the recipient children, who must rebut the presumption that they hold the funds as a resulting trustees. The court will examine a number of criteria in analysing such a scenario.

THE LAW

In Beaverstock v. Beaverstock, 2011 BCCA 413, the Court addressed the correct approach to the resolution of a dispute about whether a gratuitous advance from a parent to an adult child is a loan or a gift. As the Court held at para. 9:

The correct approach to the resolution of this dispute is not in dispute. It is set out in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795. Whether the transfer was a loan or a gift depends on the actual intention of the appellant when she made the advance, which is a question of fact. As the advance was gratuitous, the onus was on the respondent to demonstrate that the appellant intended a gift, since equity presumes bargains, not gifts (para. 24). This equitable principle gives rise to a presumption the son received the money on a resulting trust, which is a rebuttable presumption of law. The trial judge was therefore required to presume the advance was not a gift and to determine whether the respondent had satisfied the burden of rebutting the presumption of resulting trust on a balance of probabilities (para. 44).

73 In Byrne v. Byrne, 2015 BCSC 318, the issue was whether bi-weekly payments of $1,000 made by the claimant’s father to a joint account held by the claimant and the respondent and used to pay for household expenses constituted a gift or loan. Mr. Justice Armstrong began his analysis at paras. 41 and 42:

[41] Payments from a parent to an adult child are generally not presumed to be gifts; they are presumed to form a resulting trust in which the parent keeps an interest in the property. However it is open to a party claiming the transfer is a gift to rebut the presumption of a resulting trust by providing evidence to that effect: Pecore v. Pecore . . .

[42] In Pecore, the Supreme Court of Canada addressed how the presumptions operate in the context of transfers from a parent to an adult child:

(a) the focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer . . .

(b) When the transferor’s intent is unavailable or unpersuasive, the presumptions of advancement (a gift) and resulting trust are useful guides and will apply . . .

(c) gifts from parents to independent adult children are not presumed to be gifts; rather the presumption of a resulting trust applies . . .

(d) there may be circumstances where a transfer between a parent and an adult child was intended to be a gift and it is open to the party claiming that the transfer is a gift to rebut the presumption of resulting trust by bringing evidence to support that claim . . .

(e) the burden on the party claiming a gift was made is proof on a balance of probabilities . . .

74 At para. 43, the court noted that in Kuo v. Chu, 2009 BCCA 405at para. 9, the Court of Appeal adopted the following factors from Locke v. Locke, 2000 BCSC 1300, as applicable to the question of whether a loan or a gift was intended:

(a) Whether there were any contemporaneous documents evidencing a loan;

(b) Whether the manner for repayment is specified;

(d) Whether there are advances to one child and not others, or advances of unequal amounts to various children;

(e) Whether there has been any demand for payment before the separation of the parties;

(f) Whether there has been any partial repayment; and,

(g) Whether there was any expectation, or likelihood, of repayment.

75 The Locke factors are items of circumstantial evidence relevant to the transferor’s actual intention. They are not exhaustive and are to be weighed by the trial judge, along with all of the other evidence, in order to determine the transferor’s actual intention as a matter of fact: Beaverstock at para. 11.

76 Whether the opposing spouse was aware of the transaction is not determinative of the question of whether a loan was made: Byrne at para. 47.

77 In Beaverstock, the Court held that the trial judge had erred in law by failing to begin his analysis with the presumption of resulting trust and in failing to make a finding concerning the appellant’s actual intention when she advanced the funds to her son.

78 In Savost’Yanova v. Chui, 2015 BCSC 516, where the husband’s father had advanced $60,000 to assist with the purchase of the matrimonial home, Mr. Justice Weatherill held that in determining the intent of the person of who advances money in a family context, the court must weigh all of the evidence to determine whether the presumption of resulting trust has been rebutted: Chui at para. 77.

79 At para. 75, the court adopted the following summary of the applicable legal principles:

[75] The law regarding whether a transfer made by a parent to an adult child is a loan or a gift was summed up by Madam Justice Brown in Hawley v. Paradis, 2008 BCSC 1255at para. 30, after a review of the applicable authorities:

[30] Based on the case law presented to me, I conclude:

1. that the presumption of advancement no longer applies between adult children and their parents;

2. that as between adult children and their parents, the presumption is a resulting trust when the parents make gratuitous transfers to children;

3. that the court must consider all of the evidence in determining whether the parent intended the transfer as a gift or a loan;

4. that the factors considered in Wiens and Locke will assist the court in determining whether the advance was a loan or a gift.

80 Here, I must determine whether the actual intention of the claimant’s mother was to make a gift or a loan. Because the advance was gratuitous, the claimant bears the onus of demonstrating that her mother intended a gift, “since equity presumes bargains, not gifts”. In determining the transferor’s intention, the court must take into account the Locke factors, along with all of the other evidence.

equity Family Law gifts resulting trust