Pre-nuptial Agreement Does Not Relieve Court From Assessing Wills Variation Claim

Ward v. Ward Estate, 2006 BCSC 448

The case of Ward further highlights prenuptial agreements, which were featured in a post written earlier this month, and shows the importance of individual facts in each case.  Ward displays that the court is willing to look beyond a prenuptial agreement when deciding a wills variation claim. 

Mr. David Ward married Shirley after a previous marriage brought him two sons, Ross and David.  In the days before the marriage, David and Shirley signed a prenuptial agreement which detailed that they would relinquish any claim to the other’s estate. 

After nearly twenty years of marriage, David died in 2004 and left a will which was dated December 22, 2000.  This will detailed that the entirety of his estate, with the exception of his pension benefits, was to go to his two sons, Ross and David, and that his wife, Shirley, would not inherit. 

Shirley brought a wills variation action in the hope of obtaining a declaration that the will did not make adequate and just provision for her proper support and maintenance.  The two sons opposed the action and sought a declaration that the prenuptial agreement between Shirley and their father prevented her from pursuing a claim and that her action should be dismissed.  

Shirley claimed that she was aware that the prenuptial agreement was unfair when they signed it before the wedding, but chose to do so anyway in order to demonstrate to Ross and David that she was marrying their father for love, and not for money. 

HELD:  Application for summary judgment dismissed.  The court found that the prenuptial agreement did not prevent the plaintiff from bringing an action and that the court could look beyond it in determining whether there was adequate and just provision made for her at the time of the death of the testator.  The court had an independent obligation to review the distribution of the deceased’s estate.  As David’s death did not immediately follow the marriage, the relationship between the parties was relevant to the determination of fairness of the agreement and the will. 

The court left the determination of the moral obligation which was owed to the plaintiff for the subsequent hearing.

 

[25]           Unless death followed marriage within a very short time, it would be impossible, in my view, to consider the moral claim of a spouse solely on the basis of an agreement not to claim entered into before the marriage.  The court must consider the circumstances of the relationship thereafter up to the time of the death of the testator.  This reasoning is well reflected in the appellate decisions of this province dealing with the effect of separation and pre-nuptial agreements on the right to claim under the Wills Variation Act.

[26]           Counsel for the defendants sought to minimize the significance of two leading British Columbia appellate decisions stating that separation agreements, with a provision similar to clause 14 in the case at bar, do not automatically bar a claim under the Wills Variation Act.  In my opinion, those decisions are consistent with the two-step process in Hartshorne as outlined immediately above and remain accurate statements of the current law as it relates to the legal issue raised here. 

[27]           In Boulanger v. Singh, reflex, [1984] B.C.J. No. 3163 (C.A.), the court upheld the decision of the trial judge that the separation agreement was not a bar to recovery under the Wills Variation Act.  Without discounting in any way the evidentiary importance of the separation agreement, the court said this:

Thus, an agreement between parties may be perfectly suitable at the time it is made, and it may be treated as binding upon the parties during the lifetime of the testator.  But, having regard to the scope and policy of the statute and the public interest, the moral duty of the testator may have to be reviewed in a wider context, and in the light of the circumstances existing at the date of the death of the testator. 

Later, the court referred to the "facts of their marriage, separation arrangements and conduct after separation" as affecting the appellant’s moral claim upon the testator (at para. 29).  The court reapplied the Boulanger test in Wagner v. Wagner Estate, reflex, [1991] B.C.J. No. 3404 (C.A.).  There, the court reaffirmed that the moral duty must be assessed as at the date of the death of the testator.

[28]           Counsel contended that Boulanger and Wagner represent a high water mark from which the tide has since receded.  Lobe v. Lobe Estate, reflex, [1996] B.C.J. No. 1210 (S.C.), (upheld on appeal for the reasons given by the trial judge reflex, [1997] B.C.J. No. 1414 (C.A.)), also involved a claim under the Wills Variation Act.  Lowry J. concluded that the marriage agreement in that case "completely addressed any obligation Mr. Lobe may have had to his wife during his lifetime concerning both property and maintenance" but went on to say:

It is not suggested that an action of this kind can be barred by agreement but, depending on its terms, a marriage agreement may serve to reduce or nullify any legal obligation a testator may otherwise have had during his lifetime leaving only his moral obligation at the time of his death to be assessed.  Where an agreement purports to preclude estate claims, it becomes a consideration to be taken into effect in assessing the moral obligations of a testator at the time of his death having regard to the circumstances prevailing at that time.  (para. 25)

It is apparent from the foregoing that the trial judge was alive to the Tataryn distinction between the testator’s legal and moral obligation, both of which must be assessed. 

[29]           Howard v. Howard Estate, reflex, [1997] B.C.J. No. 609 (C.A.), is to similar effect.  There, the court referred to the pre-nuptial agreement as it related to the testator’s obligations at the date of his death according to current legal and moral standards and said this:

Obviously, the agreement is not determinative as a matter of law; but in the particular circumstances of this case, it seems to me that current societal norms do not require or justify our disturbing the parties’ arrangements.  (para.8).

[30]           Finally, counsel referred to the trial and appellate court decisions in Chutter v. Chutter Estate.  I need only refer to the latter, found atreflex, [2000] B.C.J. No. 653 (C.A.), in relation to the issue at hand, namely whether the agreement operates as an automatic bar.  Mackenzie J.A., for the court, stated:

The trial judge correctly, in my respectful view, did not consider the separation agreement to be an automatic bar to the appellant’s claim, but that it was a factor to be considered in weighing the merits of the appellant’s moral claim.  (para. 9)

In my view, neither Chutter nor any of the other cases referred to by counsel support the proposition that the courts have moved significantly from the Boulanger and Wagner principles.

[31]           The movement, to the extent any is discernable, relates to the determination of contemporary standards in assessing the moral obligation of the testator but that issue is not resolved, as a matter of law, solely on the basis that the parties signed a pre-nuptial agreement.  The relatively narrow point at issue here under Rule 18A is whether the marriage agreement operates as an estoppel to prevent the plaintiff claiming under the Wills Variation Act.  In my view, it does not so operate.

[32]           Given the concession that the evidence is contested on material points, it would be manifestly unjust to attempt to determine the moral obligation of the testator without hearing the evidence.  The plaintiff has also made other claims arising out of the relationship.  There would be no judicial economy or savings to the parties in ordering cross-examination under the summary judgment rule.  The most economical approach is to deal with all issues in a single trial. 

[33]           At the conclusion of the trial, the court may conclude that the circumstances, including the existence of the agreement, do not support any finding of moral obligation to support the claim under the Wills Variation Act but it is also possible that the court will conclude otherwise.  It would be inappropriate for me to express any opinion on the matter. 

[34]           In conclusion, I am not persuaded that the defendants' central legal position is sound.  I am persuaded that it would otherwise be unjust to attempt to decide the issues raised by the claim under the Wills Variation Act under Rule 18A.  The application for summary dismissal of that claim fails.  Costs will be in the cause.

“M.D. Macaulay, J.”
The Honourable Mr. Justice M.D. Macaulay