2007 BCSC 300 Zuk Estate v. Zuk

Before: The Honourable Mr. Justice Melnick

Reasons for Judgment

Counsel for the Plaintiff (Respondent)	M. A. Matthews
Counsel for the Defendant (Applicant)	S. H. Haakonson
Date and Place of Hearing:	January 16, 2007
	Cranbrook, B.C.

[1] This is an application by Alex Zuk (Mr. Zuk) pursuant to Rule 18A to have all proceedings in a matrimonial action commenced against him by his now deceased former wife, Sylvia Mary Zuk (Mrs. Zuk), dismissed. The action is being continued by the daughter of Mrs. Zuk, Persa Kovich (Ms. Kovich), who, while conceding that the late Mrs. Zuk's claims for divorce and spousal support must be dismissed, maintains that the estate of Mrs. Zuk is entitled to continue the matrimonial action by asking for a reapportionment of the former matrimonial assets in favour of the estate. Specifically, Ms. Kovich seeks on behalf of the estate of Mrs. Zuk to obtain for the estate the half interest in the matrimonial home which became the property of Mr. Zuk upon the death of Mrs. Zuk due to the property being held in joint tenancy.

[2] Although no formal notice was given of this, counsel for the estate of Mrs. Zuk indicated at the hearing of this application that the estate wished to have leave (or be given the opportunity to apply formally to obtain leave) to further amend the statement of claim in the action to advance claims of resulting trust or constructive trust, or both.

[3] The background of this matter is adequately described in my reasons for judgment in Zuk Estate v. Zuk, 2005 BCSC 341. See also the reasons of the Court of Appeal at 2006 BCCA 132.

[4] It was agreed by counsel that the only matrimonial asset worth pursuing in this action is the late Mrs. Zuk's half interest in the former matrimonial home. That asset became the sole property of Mr. Zuk upon the death of Mrs. Zuk in that, at the time of her death, there had not been a declaration of irreconcilability made in this action pursuant to s. 51 of the Family Relations Act, R.S.B.C. 1996, c. 128 ("FRA").

[5] The first question to be determined, then, is whether there is any basis upon which Ms. Kovich, as the personal representative of Mrs. Zuk, can, in these circumstances, pursue a claim for reapportionment of the assets of the estate in favour of the estate?

[6] Sections 56 and 57 of the FRA provide that a spouse in entitled to a one-half interest in family assets when one of the following “triggering” events occurs with respect to the marriage: a separation agreement is made between the spouses; a declaratory judgment is made that the spouses have no reasonable prospect of reconciliation with each other, an order is made for dissolution of the marriage or a judicial separation, or an order is made declaring the marriage null and void. These sections of the FRA apply to a “spouse,” clearly defined in s. 1(1) as a person who:

(a) is married to another person,

(b) except under Parts 5 and 6, lived with another person in a marriage-like relationship for a period of at least 2 years if the application under this Act is made within one year after they ceased to live together and, for the purposes of this Act, the marriage-like relationship may be between persons of the same gender,

(i) for dissolution of the person's marriage,

(ii) for judicial separation, or

(iii) declaring the person's marriage to be null and void, or

(d) is a former spouse for the purpose of proceedings to enforce or vary an order.

[7] Given that this section does not include representatives of a deceased spouse, that alone precludes Mrs. Zuk’s representative from pursuing a claim for reapportionment of the assets of the marriage in favour of the estate.

[8] Alexa v. Alexa (1995), 14 R.F.L. (4th) 93 (B.C.S.C.) was a case involving parties who married in January 1979 and separated in June 1990. The wife applied for a divorce order by way of summary judgment, which was granted and which was to take effect on the 31st day after the day on which the judgment granting the divorce was rendered. The husband committed suicide 13 days before the divorce order was to take effect. Madam Justice Dorgan held that the marriage could not be dissolved by divorce because the parties’ status as spouses ended on the husband’s death, relying on B.C. (Public Trustee) v. Price (1990), 25 R.F.L. (3d) 113 (B.C.C.A.) to conclude that the “consequence of the death of a party is that the parties are no longer spouses, they are former spouses.” On this logic, given that s. 56 of the FRA only applies to “former spouses” for the purpose of a proceeding to enforce or vary an order, Mrs. Zuk’s representative would not be able to pursue an order for reapportionment on the former Mrs. Zuk’s behalf. Although Alexa dealt with a divorce under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), cases litigated under the FRA have been analogous on this point.

[9] The case of Johal v. Johal (1981), 26 R.F.L. (2d) 453 (B.C.S.C.) involved a plaintiff wife who had commenced an action against her defendant husband for a declaratory order that the parties had no reasonable prospect of reconciliation and for the consequent division of matrimonial property. The wife’s statement of claim, her reply and defence to the husband’s counterclaim, as well as the husband’s statement of defence and counterclaim, alleged that there was no reasonable prospect of reconciliation. The defendant died before the completion of the action. The court there held at pages 455-456 that:

If an interest in the family assets is to be vested in the plaintiff, she must rely on a declaratory judgment by the court under s. 43(1)(b) as the "triggering event". The fact that both the plaintiff and the defendant in their pleadings confirmed that there was no reasonable prospect of reconciliation with each other does not constitute a "triggering event" under s. 43.

In my view, it is implicit in the wording of s. 44 that the spouses in respect of whom an application under that section is made must be "married to each other". The marriage between the plaintiff and the defendant ended with the death of the defendant. The plaintiff, therefore, is no longer a wife (or a spouse), nor is she a "former wife" within the restricted definition of that phrase in s. 1 as she is not making an application to enforce or vary an order.

Under the Family Relations Act, there is no provision allowing the court to make a declaratory judgment after the death of one of the parties. No such declaratory judgment was made during the joint lifetimes of the parties. For the reasons I have set out above, it is my opinion that it is not now open to the court to make such a declaration. Without such a declaration, there is no "triggering event" and thus no entitlement of the plaintiff to an interest in the family assets under s. 43. In the result, the motion made on behalf of the executors of the defendant's estate is allowed.

[10] A similar conclusion was reached in the case of Momot v. Momot (1983), 34 R.F.L. (2d) 245 (B.C.S.C.). This case involved a wife petitioning for divorce and division of property under the Family Relations Act, R.S.B.C. 1979, c. 121 ss. 43 and 44. The respondent husband died and the petitioner sought to amend the petition, claiming a declaration of irreconcilability in the hope that if the declaration was granted a triggering event would have occurred which would preserve her property claim. There, the Court held at paragraphs 4-5 that:

Counsel for the petitioner submits that for public policy reasons the action under Pt. 3 of the Family Relations Act should survive and, further, that as such a claim is in personam it survives. Assuming the facts as stated by counsel for the petitioner are to be found by a trial judge, there would appear to be no triggering event within s. 43 of the Family Relations Act as of this date. In order for the petitioner to obtain a declaratory judgment under s. 44, she has to fall strictly within the language of that section. In my view, she must be at this stage a spouse. McLachlin J. stated in Harrison v. Harrison (1982), 29 R.F.L. (2d) 10, 38 B.C.L.R. 256, 138 D.L.R. (3d) 383 (sub nom Re Harrison): "Clearly, one cannot be a spouse without a co-spouse; the condition is inherently dual". In my view, the reasoning applies to the case at bar. There is no co-spouse in existence. Consequently, there is no evidentiary basis upon which the petitioner can seek a declaration under s. 44 of the Family Relations Act.

The same issue was considered by Murphy Co. Ct. J. in Pogagic v. Pogagic, 4th June 1982 (not yet reported) at Campbell River. Reviewing the authorities, His Honour stated as follows:

“In the present case no declaratory judgment was made under s. 44 prior to the husband's death nor had any of the other events in s. 43 taken place. The tenor of authorities I have referred to leads me to conclude as a matter of law that in these circumstances the petitioner's action is no longer maintainable.”

[11] Given that the wife herself in this case could not obtain a declaration of irreconcilability in the hope that this declared triggering event would preserve her property claim, it is a fortiori impossible for the representative of Mrs. Zuk’s estate to do so.

[12] The case of Fong v. Fong (1981), 25 R.F.L. (2d) 277 (B.C.S.C.) was a case where the administratrix ad litem was permitted to carry on an action for a determination and division of family assets pursuant to a declaration of irreconcilability. However, there the plaintiff had obtained the declaration of irreconcilability herself while alive but had died before the date of trial for the determination and division of family assts. The Court of Appeal in Fong v. Fong (1981), 25 R.F.L. (2d) 123 (B.C.C.A.) confirmed the holding that where a plaintiff who has obtained a declaration of irreconcilability dies before the date of trial of an action, the action may be carried on by an administrator ad litem.

[13] The final matter to address with respect to whether Mrs. Zuk’s representative can bring an action in her place is the Estate Administration Act, R.S.B.C. 1996, c. 122. At first glance, it seems as though s. 59(2) of the Estate Administration Act would be able to help the late Mrs. Zuk’s representative. This section reads:

Subject to subsection (3), the executor or administrator of a deceased person may continue or bring and maintain an action for all loss or damage to the person or property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, be entitled to, including an action in the circumstances referred to in subsection (6).

[Emphasis added]

[14] However, it is important to bear in mind the key words of this section, which are italicized in the excerpt above. In the case at bar, Mrs. Zuk suffered no damage to her person or to her property and therefore s. 59(2) is not applicable.

[15] Given that Mrs. Zuk’s representative cannot pursue the declaration of irreconcilability on the deceased Mrs. Zuk’s behalf in order to sever the joint tenancy, the next question that begs an answer is whether Mrs. Zuk’s actions severed the joint tenancy prior to her death.

[16] Tompkins Estate v. Tompkins (1993), 76 B.C.L.R. (2d) 323 (B.C.C.A.) involved an application to dismiss the plaintiff executrix’s claim to an undivided half interest in the residential property registered in the name of the defendant wife and her deceased husband as joint tenants. The plaintiff contended that the joint tenancy was severed by the conduct of the former spouses prior to the death of the deceased.

[17] The defendant wife married her husband in 1971 and separated from him in 1987. The deceased husband and the defendant wife owned a certain parcel of land in joint tenancy. Following separation, discussions ensued as to the parties’ rights, including the division of matrimonial property. While these negotiations were going on, the husband prepared two wills, leaving his entire estate to the plaintiff executrix. On 2 June 1988, the defendant wife started an action under the Family Relations Act, R.S.B.C. 1979, c. 121 seeking, among other things, a declaration of irreconcilability, a determination of the family assets, a declaration of ownership and division of family assets, and an order restraining the deceased from disposing of the family assets or any other property at issue between the parties. This action was never concluded because of the death of the husband. The executrix then brought an action claiming a half interest in the property on the basis that the joint tenancy was severed by the former spouses’ actions. The wife denied that the joint tenancy had been severed. The issue before the Supreme Court was whether the defendant and her late husband had mutually conducted themselves in such a manner as to sever the joint tenancy. Mr. Justice Callaghan dismissed the plaintiff’s application, a decision that the executrix appealed.

[18] In her decision, Madam Justice Southin first explains at paragraph 12 that:

in considering whether a course of dealing by a husband and wife effects a severance of a joint tenancy, the Court should pay due regard to the plain legislative intention which is to ensure that family assets are dealt with, in the absence of agreement of the parties, in accordance with legislative notions of justice between spouses.

[19] At paragraph 19, Madam Justice Southin concludes that she is:

not wholly in accord with the learned trial judge's conclusion that severance requires either alienation or agreement. I prefer to say that it requires either alienation or agreement or facts which preclude one of the parties from asserting that there was no agreement.

[20] Given that neither alienation nor an agreement to sever the joint tenancy existed in the case at bar, the joint tenancy should not be considered to have been severed.

[21] Therefore, there is no basis upon which Ms. Kovich, as the representative of the late Mrs. Zuk, can pursue any of the presently enumerated claims in this matrimonial action. That raises the question as to whether the statement of claim may be amended so that the estate of Mrs. Zuk can advance a claim in trust. Although this was only informally raised by counsel for the estate at the hearing, I will respond to it in the interests of economy and finality.

[22] E. E. Gillese & M. Milczynski devote an entire chapter of their book, The Law of Trusts, 2nd ed. (Toronto: Irwin Law, 2005) to the resulting trust. Briefly, the resulting trust occurs when a party holds legal title to property where de facto title is shared by others. The authors identify three situations in which a resulting trust can arise, beyond which courts appear unwilling or unable to expand its application. The first of these is where a trustee holds property under the terms of an express trust and the trust fails in whole or in part. The second is where a first person purchases property but title is taken in the name of a second person, or, jointly in the names of both people. The final situation occurs where the first person voluntarily and gratuitously transfers property into the second person’s name or into their joint names. The situation in the case at bar clearly does not fall into any of these situations.

[23] As for the possibility of awarding a constructive trust, it is important to bear in mind that a constructive trust is a remedy for unjust enrichment. As explained by Chief Justice McLachlin in Peter v. Beblow, [1993] 1 S.C. R. 980:

The basic notions are simple enough. An action for unjust enrichment arises when three elements are satisfied: (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment. These proven, the action is established and the right to claim relief made out. …

[24] While there may be an argument to be made that Mr. Zuk was enriched while Mrs. Zuk (or her estate) suffered a corresponding deprivation, there is a juristic reason for this enrichment: the absence of severance of the joint tenancy. As a result, there could be no award of constructive trust in this case even if the statement of claim were to be amended, the timing of which I very much doubt is appropriate.

[25] For these reasons, the action to Mrs. Zuk as continued by her personal representative, Ms. Kovich, is dismissed. Mr. Zuk is entitled to his costs of this application on Scale B.

“T.J. Melnick, J.”
The Honourable Mr. Justice T.J. Melnick