Sabey Rule Blog

Sato v. Sato

By August 21, 2017 No Comments

Things would be simpler, but not nearly as interesting, if everyone remained in the same place.

Hiroyuki Rex Sato, often referred to as Rex, immigrated with his family to British Columbia in 1969. He became a Canadian citizen in 1975. Following his graduation from university, Mr. Sato lived and worked in several different cities, first in Toronto, then back in Vancouver, followed by the Cayman Islands, Tokyo, Guernsey, and then Luxembourg. He died on March 7, 2015 in Japan where he was being treated for cancer. For Canadian income tax purposes, the Canada Revenue Agency agreed that he became a non-resident of Canada in 1999.

Mr. Sato made a will in Vancouver on May 19, 2011, while visiting. In his will, Mr. Sato appointed his sister Helen Sato as his executor, and divided most of his estate equally between his two sisters. This will was his last.

Makiko Sato and Rex Sato were married in April 2013. At that time, he was living in Luxembourg. He had moved there in 2009, and remained a resident of Luxembourg until his death.

The issue Mr. Justice Funt was asked to decide in Sato v. Sato, 2017 BCSC 1394, was whether Mr. Sato was domiciled in Luxembourg at the time of his marriage or still in British Columbia. Why is that important?

The law in British Columbia in April 2013 was that a marriage revoked a will unless the will was made in contemplation of marriage. (The law has since changed in British Columbia, and a marriage occurring on or after March 31, 2014, no longer revokes a prior will.) If the court found that Mr. Sato was domiciled in British Columbia, then British Columbia law would apply. The result would then be that Mr. Sato’s will was revoked, and his wife would inherit estate on the basis that he died without a valid will.

But the law in Luxembourg was different. Under Luxembourg law at the time marriage did not revoke a will. If Mr. Sato were domiciled in Luxembourg, then his marriage did not revoke his 2011 Will, and his sisters would inherit the residue of his estate.

Although Mr. Sato was resident in Luxembourg, and had not resided in British Columbia since 1999, domicile means something more than residence. To change domicile, it is necessary to both reside in a new place, and intend to permanently settle their. Mr. Justice Funt quoted from several cases, including the following at paragraph 9 of his decision:

[9]            In Osvath-Latkoczy v. Osvath-Latkoczy, [1959] S.C.R. 751, the Supreme Court of Canada considered whether the appellant’s domicile of choice was Ontario. Justice Judson writing for the Court stated at 753:

The principle to be applied is that stated in Lord v. Colvin, which was adopted in Wadsworth v. McCord, and followed in Gunn v. Gunn:

That place is properly the domicile of a person in which he has voluntarily fixed the habitation of himself and his family, not for a mere special and temporary purpose, but with a present intention of making it his permanent home, unless and until something (which is unexpected or the happening of which is uncertain) shall occur to induce him to adopt [some] other permanent home.

Mr. Justice Funt found that Mr. Sato was not domiciled in Luxembourg. When Mr. Sato applied to Canada Revenue Agency to determine his residency status when he left Canada, Mr. Sato wrote in the form that he intended to return to Canada. He wrote that he had a strong desire to be involved in international business, and planned to retire in Canada.

Helen Sato had the burden of showing that Mr. Sato had changed his intention to eventually retire in Canada. She was unable to provide sufficient evidence to persuade the Court that Mr. Sato intended to make Luxembourg his permanent home. There was some evidence that Mr. Sato wished to retire in Japan, which Mr. Justice Funt noted “further supports the proposition that the deceased did not intend to reside in Luxembourg indefinitely.”

The result is that Mr. Sato’s marriage revoked the 2011 will, and his wife, Makiko Sato, is entitled to his entire estate as the intestate heir.