Court Investigation into elderly couple's relationship finds loving bond entitling her to $200,000

Berg v. Murphy Estate, 2014 BCSC 624

This recent case is an example of the court investigating into a couple's relationship before a death to determine whether  the legal requirements existed for them to be found in a common-law relationship and one of cohabitation.  

Joe and Lillian lived in a loving, common-law relationship for approximately 15 years.  They purchased a home together and formed a Cohabitation Agreement which provided the following:

WHEREAS the parties live together in a common law relationship and may or may not marry in the future and are entering into this Agreement to resolve ownership and management of all property, real or personal, communal or otherwise, owned or which may in future be owned by them either jointly or solely:

AND WHEREAS both parties have children of prior marriages and the parties intend that their estates shall remain separate and devolve on their respective heirs and not on each other, except as provided otherwise in this Agreement;…

4.            If the cohabitation of the parties is then continuing then on the death of the first of the Husband and Wife the survivor shall be entitled to remain in the home for his or her lifetime, subject to payment by the survivor of taxes, insurance and general maintenance on the home.  The survivor shall advise the personal representative of the deceased party is he or she intends to terminate the tenancy prior to his or her death.

5.            If the cohabitation of the parties is then continuing then on the death of first of the Husband and Wife the survivor, on the condition that he or she agrees to the sale of the home, shall be entitled to such part of the deceased half-interest in the home as may be necessary on the sale to increase the survivor’s share of the net sale proceeds to $200,000. 

 8.            Neither party shall have any obligation to make the other his or her beneficiary except as to the provisions relating to the home set out in paragraphs 4 and 5 of this agreement.  Each may at any time and without consultation with the other prepare a Will naming such person or persons as each may desire as beneficiaries of their separate estates PROVIDED ONLY that such Will shall contain provisions similar to those set out in paragraph 4 and 5 of this agreement.

In early 2010 Joe was diagnosed with terminal lung cancer and he would later pass away that year.  Before his death, circumstances arose that brought into question whether he breached the Cohabitation Agreement with Lillian.  The defendants claimed that Joe had ended his relationship with Lillian, ended their cohabitation, and altered his will so that his children were to inherit.  If this were the case, and he had the capacity to alter his will, the parties would share in the net sale proceeds of the property equally.  If their relationship and cohabitation had not changed and the Agreement was still in force, as Lillian asserted, Lillian would be entitled to $200,000 of the sale proceeds of their home, as per the agreement and the defendants would receive the balance.

HELD:

The deciding factor in this case was whether or not Joe and Lillian were in a relationship of cohabitation at the time of Joe’s death in 2010.  

The court found the evidence in favour of Joe and Lillian continuing their relationship and cohabitation outweighed that against – Joe and Lillian were not separated and continued to cohabit at the time of his death.  The two had a loving relationship and the purpose of para.5 of their Agreement was to ensure protection for the surviving member so that they would have sufficient funds to purchase accommodation. 

Another important point was that paragraph 8, which detailed neither would make a will without  containing similar provisions to paragraph 4 and 5, was not dependent upon cohabitation continuing.  Thus, Joe breached the covenant not to make a will contrary to paragraphs 4 and 5. 

The court looked into their relationship leading up to his death which included the couple’s move to Abbotsford (to be closer to Joe’s children before he died), her attendance at the hospital while he received treatment, and the statements and evidence of others (including nurse’s notes) showing how they treated and designated each other.  The impartial sources provided important evidence regarding their relationship.

Lillian was successful and was to receive $200,000 of the sale proceeds of their home which was presently held in trust with the balance to be paid to Joe’s estate.  

125     No evidence demonstrated that this relationship between them changed until early 2010 when Joe was diagnosed with lung cancer and Lillian was diagnosed with early stages of dementia-Alzheimer. It became evident that Joe's demise was imminent.

126     There was controversy about whether Lillian was in favour of moving to Abbotsford, but nonetheless, she agreed. A yard sale was held before the move. Joe and Lillian's possessions were boxed up and moved to Abbotsford where Joe's family arranged a rental apartment. That Lillian agreed to the move is strong evidence that they continued to be committed to each other and that their cohabitation continued.

127     The defendants' suggestion that Joe moving to Abbotsford to be closer to the kids amounted to an intention to separate from Lillian does not stand up to scrutiny.

128     The move to Abbotsford did not appeal to Lillian, but she ultimately decided to make the move because it was Joe's wish to do so. It is not in dispute that shortly after the move to Abbotsford Joe entered the hospital. Everyone recognized that he would need palliative care: he was not going to get better.

129     Even when Lillian was sent to Kelowna to stay with her sisters while the Abbotsford apartment was readied for her move, she continued to stay in phone contact with Joe until her return to Abbotsford. From that point on she continued to see Joe at the hospital on a regular basis, and Joe continued to enjoy her being there.

130     This behaviour is not consistent with a separation and cessation of a15 year cohabitation.

131     In my judgment, Joe and Lillian's cohabitation continued despite the fact that Joe was in hospital and despite the move to Abbotsford. The only evidence before the court that indicates Joe had terminated the cohabitation with Lillian after 15 years together is contained in unsupported hearsay statements attributed to Joe in the affidavits of his two sons, Kevin and Michael.

132     Mr. Welwood obtained instructions from Joe when Joe was heavily medicated and on his deathbed. It is unclear on the evidence whether Joe had the capacity to execute the November 5th documents.

133     Further, Mr. Welwood's notes taken on November 2 at the hospital Joe confirmed that he is in a common-law relationship. Under the heading spouse's name he wrote: "widowed but has C.L."

134     This assertion is clear: on November 2, 2013, Joe was in a common-law relationship.

135     The hospital records and nurses' notes taken at Joes' bedside during his stay in the hospital during this timeframe also confirm this assertion. The nurse's notes are in evidence.

...

137     These notes demonstrate that while Joe was in hospital, he worried about Lillian, and Lillian also worried about him. This behaviour is inconsistent with a man who allegedly decided to terminate a 15 year common law relationship. These notes also demonstrate Joe was anxious, worried and paranoid.

138     Further, the Abbotsford apartment rental contract entered into October 5, 2010 named both Joe and Lillian named as tenants. The tenancy was to be for six months.

139     The plaintiff argues that if a binding contract exists between two parties, the reasons why the parties entered into the contract ought to be irrelevant.

140     I agree.

141     The issue, however, is not whether the contract was binding on the parties - it was. The issue is whether the parties continued to cohabit with each other within the meaning of the contract at the time of Joe's death.

142     Although one party can choose to end a relationship, I find that in this case, Joe did not end his cohabitation with Lillian.

143     No "separate and apart test" exists for common law couples. It is a question of fact in each case.

144     In this case, the evidence in favor of Joe and Lillian continuing their relationship and continuing to cohabit outweighs the evidence against their cohabitation. That evidence is equivocal and mostly hearsay. Moreover, the evidence favouring their cohabitation comes from impartial sources with no monetary interests - e.g. the healthcare staff.