Common-Law Wife of 21 Years Challenges Inheritance And Receives $5 Million Award

Picketts v. Hall 2009 BCCA 329

The trial level of this action may be found here - Picketts v. Hall 2007 BCSC 133

Hall, a well-established and wealthy businessman, passed away at the age of 96 and left behind two adult sons and his common-law wife, Picketts.  He and Picketts had cohabited in a marriage-like relationship for 21 years prior to his death and although they never married, he promised to provide for her as if she were his lawful wife.  Hall’s will, which had been executed in 1992, referred to Pickett’s as his “friend” and only left her with a small portion of his substantial estate valued at $18 million.  Pickett’s brought an action to challenge her inheritance under the Wills Variation Act to vary the will.

Ms. Picketts had been left the “family home”, which was a condo in Vancouver valued at ~$297,300, all personal household effects (valued at ~$106,000), $2000/month for life (to be increased annually on the date of death by the amount of the Canadian Consumer Price Index for the preceding year), use of the condo in Hawaii up to 3 months/year with the proviso that if it were to be sold, she would receive the greater of 10% of the net proceeds and $75,000.  The residue and vast majority of the estate was given to Hall’s two sons, Maxwell (40%) and Brenton (60%). 

The sons did agree that the will did not make adequate provision for Ms. Picketts so did offer and provide the following:

-          She was to be paid $1200/month for maintenance of the condo.  3 years later this amount was increased to $6000, but they would cease paying the condo expenses. 

-          They made the adjustment retroactive and paid her $96,000.

-          She received $100,000 to pay for renovations and to buy a new vehicle.

-          She received $100,000 for the condo in Honolulu

-          They created a wasting fund to secure the cost of assisted living and extraordinary health care she may require in the future. 

After bringing her action, Ms. Picketts succeeded at trial and was awarded the following from the trial judge:

-          She would be provided a monthly sum which amounted to $175,000/year to be adjusted annually by the CCPI.  The payments were to be on an after-tax basis and would commence the month following the date of death with the estate to pay the resulting arrears with interest at 5% per annum. 

-          She would receive $405,000 for renovations to the condo, payable without interest. 

-          Payment for needed future nursing care costs “to the standard received by Mr. Hall before his death” to the extent such costs exceed Ms. Picketts’ “then annual income less expenses”, to be secured by a wasting fund, with liberty to apply. 

-          The right to retain the $100,000 paid by the estate for the condo in Hawaii. 

Unhappy with the result, Ms. Picketts appealed the award as she felt the order that had been made by the trial judge was not adequate just and equitable in the circumstances.  She sought an order to allow her appeal and provide her with a lump sum payment from the estate of $9 million (half of the estate). 

The two sons also brought a separate appeal which sought to adjust the periodic payments from the trial award, totalling $175,000 /year, so that they would be taxable in the hands of Ms. Picketts. 

RESULT

The judge dismissed the appeal of the two sons and allowed the appeal of Ms. Picketts.  The court ordered that the will be varied to provide a lump-sum to Ms. Picketts in the amount of $5 million in addition to the condo ($297,300), the personal household effects ($106,740), and the interest in the condo in Hawaii as varied by the order made at trial to reflect the pre-trial settlement. 

The court did not see it as a viable option to approve a disposition that substantially preferred the moral claims of adult independent children to those of a long-term, caring and dedicated spouse.  Hall owed no legal obligation to his independent sons whereas he owed a considerable obligation to his wife. 

The court found it relevant that if Mr. Hall had died intestate, Ms. Picketts would have received 1/3 of the entire estate.  Mr. Hall had breached his moral and legal obligations to provide for his common-law wife. 

[51]           This is a convenient point to discuss the legal obligations to be considered in this case.  There is no basis for finding any legal obligation under the equitable doctrines of constructive trust and unjust enrichment.  There might be some argument under these doctrines with respect to the matrimonial home but that asset is such a small part of the estate that it does not bear separate consideration.  In any event, that asset has become and will remain the property of Ms. Picketts.

[52]           The respondents emphasize that because there was no marriage in the traditional sense, if the parties had separated Ms. Picketts would have had no claim to any of Mr. Hall’s assets under the family asset provisions of the Family Relations Act, R.S.B.C. 1996, c. 28.  She does not fit the definition of “spouse” under that part of the statute.  Her only claim would have been for spousal support because the applicable definition of “spouse” for a maintenance claim is “a man or woman not married to each other, who lived together as husband and wife for a period of not less than 2 years ...”  

[53]           Some weight must be given to this argument but, in my opinion, it is substantially overtaken by other factors in this case.  As I will develop further, the particular circumstances of this case dictate that the moral obligation is more important than the legal obligation.

[54]           Although McLachlin J. in Tataryn did not discuss the Estate Administration Act, R.S.B.C. 1996, c. 122, or its applicable predecessor, under the topic of legal obligations, I think that statute bears mentioning at this point.  The provisions in the statute as to intestacy succession create a default succession in law if a person should die without a will.  Section 85 states that, on an intestacy in which there is a surviving spouse and a surviving child or surviving children, the spouse is entitled to the first $65,000 of the estate and half of the residue if there is one child surviving, and one-third of the estate if there is more than one child surviving. 

[55]           In the unlikely event that Mr. Hall had died intestate, Ms. Picketts would have received one-third of the entire estate.  This is because the definition of “common law spouse” in the Estate Administration Act was amended by the Definition of Spouse Amendment Act, S.B.C. 1999, c. 29, to mean, inter alia, “a person who has lived and cohabited with another person in a marriage-like relationship, including a marriage-like relationship between two persons of the same gender, for a period of at least 2 years immediately before the other person’s death”.  This is essentially the same definition as the definition of “spouse” in the Wills Variation Act.  The two definitions became law on the same date.

[56]           Although the intestacy provisions of the Estate Administration Act do not directly affect the legal considerations under Tataryn, it is significant that the Legislature chose to amend both statutes at the same time.  This can be seen as a dovetailing of the two statutes to reflect the social norms of the day and, to repeat the quote from Tataryn at p. 822, to “reflect a clear and unequivocal social expectation, expressed through society’s elected representatives ...”

[57]           In Tataryn, the court provided the following instruction as to the testator’s moral obligation, at 822-23: 

For further guidance in determining what is “adequate, just and equitable”, the court should next turn to the testator's moral duties toward spouse and children.  It is to the determination of these moral duties that the concerns about uncertainty are usually addressed.  There being no clear legal standard by which to judge moral duties, these obligations are admittedly more susceptible of being viewed differently by different people.  Nevertheless, the uncertainty, even in this area, may not be so great as has been sometimes thought.  For example, most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after his death, a strong moral obligation to do so exists if the size of the estate permits.  Similarly, most people would agree that an adult dependent child is entitled to such consideration as the size of the estate and the testator's other obligations may allow.  While the moral claim of independent adult children may be more tenuous, a large body of case law exists suggesting that, if the size of the estate permits and in the absence of circumstances which negate the existence of such an obligation, some provision for such children should be made:  Brauer v. Hilton (1979),1979 CanLII 746 (BC CA), 15 B.C.L.R. 116 (C.A.); Cowan v. Cowan Estate (1988), 30 E.T.R. 216 (B.C.S.C.), aff'd (1990), 37 E.T.R. 308 (B.C.C.A.); Nulty v. Nulty Estate (1989), 1989 CanLII 244 (BC CA), 41 B.C.L.R. (2d) 343 (C.A.).  See also Price v. Lypchuk Estate, supra, and Bell v. Roy Estate (1993), 1993 CanLII 1262 (BC CA), 75 B.C.L.R. (2d) 213 (C.A.) for cases where the moral duty was seen to be negated.

[Emphasis in original]

[58]           I do not accept the argument made on behalf of Ms. Picketts that analysis of the moral obligation must begin with a consideration of the family asset claim she would have had in law had she and Mr. Hall been married and had they been separated other than by his death.  The legal aspect of her claim under the Act is limited to the claim she would have had for spousal support.  That limitation, however, does not restrict her claim to being satisfied by “periodic ... payment” under s. 7 of the Act.  Spousal maintenance can be provided on a lump-sum basis.  The moral aspect of the claim is not restricted to a reasonable or even a generous level of maintenance.

[59]           In the present case, the size of the estate makes it possible to fully address the moral obligations of Mr. Hall toward all beneficiaries.  A proper adjustment in favour of Ms. Picketts can be arrived at without risking any harm to the lesser moral obligation Mr. Hall owed to his two sons.  On the other hand, testamentary autonomy always has to be considered and I do not see that the Act, as interpreted in Tataryn, requires the moral claims of the beneficiaries to be placed in a hierarchy with the beneficiaries ultimately receiving portions of the estate in correspondingly decreasing percentages.  This is particularly so where the estate is substantial as is the case here.

[60]           Cases decided by this court since Tataryn are of limited assistance because the present case is unusual on its facts.  I will, however, refer to one case.

[61]           In Bridger v. Bridger Estate, 2006 BCCA 230 (CanLII), the testator’s estate was valued at about $311,000 and the trial judge varied the will that favoured three daughters from a first marriage over the testator’s second wife of 38 years.  In writing for the majority to dismiss the appeal, Mackenzie J. A. said this:

[20]      ... Tataryn recognizes that there is no clear legal standard to judge moral claims and the test is more nebulous where the surviving spouse is not strictly speaking a dependent spouse and the children are all financially independent adults.  While, as McLachlin J. observes inTataryn, there may be a number of options for dividing assets by a testator which are adequate, just and equitable, I do not think they include a disposition that entirely prefers the moral claims of adult independent children to those of a loyal spouse who provided care for the testator over years of debilitating decline...

[Emphasis added]

[62]           It seems to me that it is also not a viable option for the court to approve a disposition that substantially prefers the moral claims of adult independent children to those of a long-term, caring and dedicated spouse.

[63]           In assessing the substantial moral obligation of the testator toward his spouse in this case (in addition to the substantial legal obligation), I take into account the following:

(1)               the absence of a legal obligation of Mr. Hall to either of his sons;

(2)               the length of the marital relationship between Mr. Hall and Ms. Picketts – 21 years;

(3)               the agreement of Ms. Picketts to give up her career thereby depriving her of the opportunity to accumulate an estate of her own other than through modest inheritances from her father and her brother;

(4)               the necessity for Ms. Picketts to dip into her limited savings to supplement the living expenses Mr. Hall had agreed to provide;

(5)               the lengthy period of loving and effective care Ms. Picketts provided to her spouse during his decline;

(6)               the promise Mr. Hall made that he would take care of Ms. Picketts as though she were his wife;

(7)               the size and liquidity of the estate.

[64]           I do not see Mr. Hall’s promise mentioned in item (6) as being limited to the provision of maintenance.  The promise has to be considered in the context in which it was made.  It was given upon Mr. Hall reneging on an accepted marriage proposal that he had announced socially and which he had confirmed with a ring.  I have no doubt that the friends who were witness to both promises would have expected the latter to have been kept by a bequest of capital from his estate.  Although the residual promise is not actionable per se, I see it as a significant factor in consideration of the moral obligation toward Ms. Picketts that arose in this case.

[65]           Ms. Picketts is entitled to administer her own financial affairs without being dependant on the estate.  She is also entitled to a measure of testamentary autonomy of her own so that she can pass her own estate to whomever she wishes.

[66]           In all the circumstances of this case, it is my opinion that it is adequate, just and equitable for Ms. Picketts to receive from the estate a lump sum payment of $5M plus the family home, the personal and household effects, and the settled amount for the Hawaii condominium.  This variation of the will would properly address Mr. Hall’s legal obligation to Ms. Picketts, and his moral obligations to her and to his two sons, without interfering with his testamentary autonomy more than the Act requires.

Trial costs

[67]           After providing his reasons for judgment, the trial judge heard submissions on a number of issues, including costs.  He provided additional reasons that are indexed at 2007 BCSC 1278 (CanLII).  He declined the application of Ms. Picketts for special costs.  After reviewing the authorities, I am not persuaded the he erred in the circumstances of this case in limiting the costs recovery to party and party costs on Scale C.  That scale is for “matters of more than ordinary difficulty”.    

Conclusion

[68]           I would dismiss the appeal brought by Maxwell Hall and Brenton Hall.

[69]           I would allow Ms. Picketts’ appeal. 

[70]           I would set aside all provisions in the order made at trial except the provision in para. 8 as to the sum of $100,000 paid by the estate with respect to the Hawaii property, and the provision in para. 9 as to costs.  

[71]           I would order that the will be varied to provide a lump-sum bequest to Ms. Picketts in the amount of $5M in addition to the Cartier Street condominium (valued at $297,300), the personal and household effects (valued at $106,740), and the interest in the Hawaii property as varied by para. 8 of the order made at trial to reflect the pre-trial settlement of that item. 

[72]           The estate has made payments to Ms. Picketts both before and as a consequence of the trial judgment.  Ms. Picketts shall receive the actual interest earned by the estate on her $5M portion of the estate since the date of death of Coleman Hall to the dates of various payments that have been made or will be made, less the money amounts Ms. Picketts has actually received from the estate.  The money amounts received shall include all monthly payments made (1) under the will, (2) as a result of voluntary increases by the estate pre-trial (including back payments), and (3) pursuant to the order made at trial.  The money amounts received shall also include the $405,000 ordered at trial and paid for renovation of the Cartier Street property.  The money amounts shall not include the $100,000 payment for the interest in the Hawaii condominium.

[73]           It is almost seven years since Coleman Hall died.  There is no reason that determination of the net amount owing to Ms. Picketts by the estate as a result of our order should be time consuming.  I would order that the estate pay $4M to Ms. Picketts forthwith and the balance immediately upon determination of the net amount owing to her.