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In This Issue of the Posner Page

COMMON LAW CHAOS?

PENSION BENEFITS AND COMMON LAW SPOUSES

VENDORS AND PURCHASERS- LIABLILTY FOR REPRESENTATIONS

IT'S A DOGS WORLD

COMMON LAW CHAOS?

There is a potential revolution about to happen with the new legislation that is waiting to be proclaimed by the Manitoba Government. The statute has been drafted and all is in readiness. What I am talking about is the legislation regarding the rights and obligations of common law partners. The changes are varied and profound. They potentially affect many people who likely are blissfully unaware that their situation is about to change unless they do something concrete. I want to address some of the key areas which are affected by this legislation and of course what you are best advised to do is to consult me or some other lawyer to review your particular situation.

Bluntly put, the new legislation creates rights for common law partners, both heterosexual and homosexual that never existed before. If you have lived together for 3 years when the legislation is proclaimed, you are caught. Assume there are no children of this common law union. {if there were, the period of time together is reduced in most instances to one year} As a result of the new law, common law spouses will have the same rights as married spouses in terms of their rights for property division. This is very far-reaching I suggest and is not something that most couples have contemplated. It seems to me that the only way out of the Act is to fall into one of the four categories. Or put another way, if you are living common law and have been in that relationship for at least 3 years and you are concerned you may be vulnerable to this new law, then there are 4 ways out that I can see. They are:

1. Separate now before the Act is proclaimed;
2. Move to another jurisdiction where this kind of law is not in place. Saskatchewan has similar laws in place so forget about that Province.
3. Die before the law is proclaimed. I suppose there will not be a rush to exercise this option.
4. Get a waiver or release from the other partner. This will no doubt be the preferred route although there are certainly cases where this subject is taboo.

The Act provides ways of establishing a common law relationship as for example by way of registration of it with Vital Statistics. For those couples that do not register, then it would be necessary to look at the specific statute to determine the definition of a common law partner. In a general way, common law relationships are defined by way of having lasted a fixed period of time {in most of the relevant Acts, it is 3 years} and the couple must be cohabiting in a conjugal relationship. The courts have interpreted what is conjugal and I suggest you consult me further as to the meaning of this term. I should also point out that just as there is a way of registering the relationship, there is also a way of registering a dissolution of the same relationship with the Department of Vital Statistics.

There are many existing statutes that are affected by this proposed new law. They include the Dependent’s Relief Act, the Insurance Act, the Wills Act, the Intestate Succession Act, the Homesteads Act, and several other Provincial pieces of legislation. This newsletter is too short to address all of the issues and changes that will be wrought as a result of the new law. But, let me address one potential issue that may resonate with some of you or people you know. Take a situation where Glenn, a widower with two adult children, begins to live with Roberta, a single woman. They are together for 4 years and live in Glenn’s house. Glenn has made provision for his adult children in his will without reference to Roberta. Perhaps he intended to do something for her but in this case, he has not. Even though Glenn had made a legitimate will giving all that he had to his two adult children, the common law relationship will cause the will to be subject to challenge by Roberta if she chooses to do so. She has a right to share in the property of Glenn at least in part and she can continue to live in the house just as though she were a married woman. This may not be what Glenn had intended and may contravene his valid will. But, as they say "that’s the way the cookie crumbles".

In short, we are entering into some unchartered territory and I suggest that if you or anyone you know falls into this situation, you or they would be advised to get some professional consultation. And soon.

PENSION BENEFITS AND COMMON LAW SPOUSES

Connected to the article above was a recent case of the Nova Scotia Supreme Court, which addressed the rights of a common law spouse for pension benefits from the CNR. In that case, the common law spouse sued the CNR {in itself a gutsy thing to do} asking for a survivor’s benefit as provided in the CNR benefit plan. She claimed that she was entitled to benefits as a surviving common law spouse. Her spouse had in fact been receiving disability benefits when he died in March 1993. The evidence indicated that the Plaintiff had commenced living with the pensioner only one month prior to his application for disability payments. He actually had applied for these benefits as far back as November 1988 but was not approved to receive them until November 1989. Fortunately when he was approved the decision was made to catch up his payments right back to the date when he applied. In October 1989, the pensioner did provide the CNR with a statutory declaration that stated that the Plaintiff was his common law spouse and had been ever since October 1988. The disability pension benefits were approved for him effective December 1988. At that time, the CNR advised the pensioner that his common law spouse would be entitled to receive survivor benefits. The trouble was that when the pensioner died in 1993 and his common law spouse applied for her survivor benefits, she was refused by the CNR. Why you might ask? The reason was that she had to be living with the applicant at least one year prior to the application for the benefits. Here you had a case where the evidence was clear that she only began living with the pensioner two months before his entitlement. She was not considered an eligible common law spouse plain and simple. But, there was another issue and that was whether or not the CNR was liable based on negligent misrepresentation.

The Plaintiff lost the case with respect to the issue of her time as a common law spouse according to the Pension Benefits Standards Act since she had only been living as a common law spouse for one month prior to the pensioner’s eligibility for the pension. That disqualified her from payment. But, she was successful on the grounds of negligent misrepresentation and was awarded damages according to the decision of Justice McLellan. What the court said was that when the pensioner applied for benefits, he was led to believe that there would be survivor rights for his spouse and he relied on that representation to his and her subsequent detriment. That the Defendant CNR acknowledged in writing that the Plaintiff was in fact the common law spouse of the pensioner and that the monthly benefits were $4,276.37 per month was an important factor. Moreover, the Plaintiff was encouraged to reduce her benefits during the lifetime of the pensioner so that he; {the pensioner} would get higher payments while he was alive. The judge stated that the plaintiff would have made alternate arrangements for her future had she been advised that she was not entitled to receive pension benefits as a survivor. Accordingly, the court gave her damages, which were equivalent to what she would have received as a survivor’s pension.

VENDORS AND PURCHASERS- LIABLILTY FOR REPRESENTATIONS

A recent Ontario case touched on an issue that faces many purchasers and vendors. And that is the question of what is said on the Offer to Purchase and the liability that attaches to the statements made. In this particular case, the Plaintiffs were the purchasers of a home but the offer was conditional as many are on a home inspection that was satisfactory to the purchasers. A VPS or Vendor Property Statement actually formed part of the Agreement of Purchase and Sale. The vendors indicated on the statement that they had not had water problems in their home and in particular in the basement. However, the home inspection report disclosed that the basement did in fact show evidence of some kind of moisture. Yet, according to the home inspector this kind of water damage was not unusual for a home of this type, age and construction. Thus, the deal closed and the purchasers took possession and lo and behold, they encountered water leaking into the basement.

The purchasers planned and completed significant renovations to the house, which cost over $300,000.00. Part of these renovations included the cost for the work needed to demolish, excavate around the exterior basement walls, put in new drains, remove all of the material from the previous basement area and then install wholly new framing, insulation, drywall, painting and carpet, all of that work to the tune of $30,838.77. That was the claim made by the Plaintiff purchaser against the Defendant vendor.

So what did the court in Ontario decide? Well, the Supreme Court of Justice as it is called there, threw the Plaintiff out and the defendant vendor was victorious. The reasons given were that because the alleged defect was what is considered to be LATENT, the plaintiff’s case had no merit to it. What is meant by latent is that the defect was not readily observable during a routine inspection. The evidence in the case disclosed that not only the vendors, but also their daughter and cleaning lady were totally unaware of this defect. In addition, the cleaning lady gave evidence at trial that she had in fact cleaned the house immediately prior to closing and nothing came to her attention relating to a problem when she did her cleaning. But, there was more. The Court also dealt with the legal issue of the implication of the home inspection and the reliance placed by the purchaser on that inspection report. As you will appreciate, that kind of report is done frequently on home sales every day across this country. The court articulated the position that without evidence of a fraudulent representation or concealment, in those instances when a professional home inspector’s report is obtained, then reliance for completion of the deal shifts from the vendor to the home inspector. I suppose what that means is that even though the Plaintiff lost here, it may be that he has a claim against the home inspector for negligence. I say it may be that the purchaser has a claim because the court does not speak to this question. Thus, you have to tread lightly even with home inspection reports absent statements of fraud or acts of omission. Not a very comforting thought I suggest.

IT'S A DOGS WORLD

A court in Saskatchewan ordered a childless couple, in a bitter dispute over custody of their Husky Shikydoe, to have alternate weeks with the dog. This was not the first pet case coming to the courts. The decision is for the life of the dog or until the couple comes to some sort of other arrangement workable for them. Title to the dog was vested in both of them. What was interesting about this case was the fact that the dog was treated as a chattel to be divided between the parties under the provisions of the Matrimonial Property Act in Saskatchewan. The court found that Shikydoe "be distributed equally between the Plaintiff and Defendant. That regime is in accordance with the way that Shikydoe was treated by the Plaintiff and the Defendant during their cohabitation and most of their separation."

As I mentioned, there have been other battles in the courts over animals in the U.S. and Canada. In one case in 1983, it was a dispute over two cats that caused their owners to go to court at least 6 times in their war over their surrogate children. In another 1980 case, the court decided the issue as to whether or not the key element in awarding access to a dog was the welfare of the dog as in a child custody battle or the preservation of the animal as a chattel. In that case the court opted for the latter and commented that "a dog has feelings, is capable of affection and needs to be shown affection and that its affections can be alienated".

Now, as a result of this case I have not immediately gone out and changed my letterhead to show counsel to the dogs. In spite of the ever-increasing litigation over pets, I don’t think that I will be able to make a living out of doo doo over dogs.