What I’m Reading: Interesting Estate Litigation Articles for June 2022:

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Albert Oosterhoff at WEL Partneres (Toronto) discusses the presumption of resulting trust in the context of beneficiary designations: https://welpartners.com/blog/2022/06/designation-of-beneficiaries-and-the-presumption-of-resulting-trust/
  2. Mohena Singh at Hull & Hull LLP (Ontario) writes about a recent Ontario case which considers trustee discretion: https://hullandhull.com/Knowledge/2022/06/when-may-a-court-interfere-with-a-trustees-absolute-discretion/
  3. Joanna Lindenberg at de Vries Litigation LLP (Ontario) discusses retrospective capacity assessments – obtaining an expert opinion after death on the issue of whether the deceased had testamentary capacity at the time they made their will: https://devrieslitigation.com/retrospective-capacity-assessments/
  4. Mohena Singh at Hull & Hull also discusses the issue of the appropriate jurisdiction when there is a global estate: https://hullandhull.com/Knowledge/2022/06/france-monaco-ontario-where-to-seek-relief-in-a-dependant-support-claim-involving-a-global-estate/
  5. Stan Rule at Sabey Rule LLP (Kelowna) identifies a great resource for issues relating to elder abuse and neglect: http://rulelaw.blogspot.com/2022/06/practical-guide-to-elder-abuse-and.html for the post, and http://ccelderlaw.ca/ for the resource

Happy reading!

Mareva Injunctions and Freezing Orders in Estate Litigation

Often there is a concern that a defendant will dissipate assets or put them out of reach of the court if they become aware of a claim against them.   A person who intends to bring a claim wants to make sure that (1) the property that is the subject of the claim is protected until a determination of the claim, and/or (2) the defendant will still have sufficient assets to satisfy the claim.

A Mareva injunction is an order which freezes the defendant’s assets, so that they cannot be disposed of or removed to a place beyond the court’s reach while proceedings are ongoing.  Preservation orders are also available to freeze and preserve the property that is the subject of a claim.

A Mareva injunction is an extraordinary remedy, because it provides the plaintiff with enforcement rights and prejudices the defendant before the court has actually determined the merits of the claim.

These orders are usually obtained ex parte, or without notice to the other party.  Otherwise, there is the risk that the defendant will removal or deal with the assets after they are served and made aware of the application but before the order is made.

Once the party against whom the order is made is served with the order, they may apply to set it aside.

There is a two-part test for granting a Mareva injunction:

  1. The existence of a strong prima facie case or a good arguable case.  This does not mean that the applicant must demonstrate that they are “bound to succeed” with their claim.  The test is satisfied if “either side might win”; and
  2. Having regard to all relevant factors in the case, whether granting an injunction would be just and convenient (the balance of convenience).

For a restraining order over property at issue in the proceeding, there is a lower threshold for #1: whether there is a substantial question to be tried.

The B.C. Supreme Court in Shakeri-Salah (discussed further below) set out the relevant factors which may be considered on the balance of convenience analysis (which factors are relevant will depend upon the case, and this is not a closed list):

  1. the residency of the defendant;
  2. enforcement rights of judgment creditors in the jurisdiction where the defendant’s assets are located;
  3. evidence showing the existence of assets within British Columbia or outside;
  4. evidence showing a real risk of the disposal or dissipation of assets to render a judgment nugatory;
  5. evidence of irreparable harm;
  6. the strength of the plaintiff’s case;
  7. the nature of the transaction giving rise to the action;
  8. the risks inherent in the transaction;
  9. the amount of the claim;
  10. the defendant’s assets;
  11. evidence that the injunction would have a material adverse effect on an innocent third party; and
  12. the history of the defendant’s conduct.

The B.C. Supreme Court recently considered Mareva injunctions and preservation orders in in the context of estate and trust litigation in Shakeri-Salah v. Estate of Ahmadi-Niri 2022 BCSC 700.

In Shakeri-Salah, the defendants sought to set aside a Merva injunction and freezing order.  The plaintiff was the widow of the deceased.  She brought an action against her husband’s estate, the trustees of a trust, corporate entities relating to her husband’s business enterprises, her two older sons, and her husband’s personal advisors.  The plaintiff alleged that as the deceased’s spouse she was entitled to a share in the assets accumulated through a joint family venture.  In the five months prior to his death, the deceased took certain steps to purportedly put assets outside the reach of the plaintiff.  He transferred assets into a trust, the beneficiaries of which were his children but not his spouse (the plaintiff).  He severed joint tenancies, commenced a family claim seeking a divorce from the plaintiff, and made a will in which the plaintiff was not a beneficiary.  All of this was done while the deceased’s health was deteriorating and he had a reduced ability to communicate.

The deceased travelled to Dubai and then Iran, where he died several weeks later.  The plaintiff alleged that her sons took their father to these countries to remove him from her and to exercise undue influence over him.  The sons said they were helping their father “escape an unhappy marriage”, and did so at his request.

The plaintiff alleged there was an unwritten trust arrangement and unwritten agreement between her and the deceased.  She claimed a constructive trust over the assets that her husband amassed during the time that they were married.

The plaintiff applied ex parte and obtained a Mareva injunction and freezing order.  The Court ordered that the assets that were the subject of the claim be frozen.  There was also an order requiring the sons and the corporate defendants to set out their respective assets.

The defendants applied to set aside the order.

One of the grounds to set aside a Mareva injunction is material non-disclosure by the applicant.  If there has been material non-disclosure by the applicant, the court may set aide the order without regard to the merits of the application.  The standard is high when a litigant comes to court on an ex parte basis.  The applicant must disclose all important aspects of the evidence because the other side is not their to make their case.  However, not every omission necessarily results in the order being set aside.

The Court in Shakeri-Salah did not agree that there was material non-disclosure.

If there has not been material non-disclosure, the court proceeds with a new hearing (a “hearing de novo”) on the merits of the application.  The applicant must again meet the test for obtaining the injunction.

In Shakeri-Salah, the defendants argued that there was no evidence of dissipation of assets.  The plaintiff argued that while there was no evidence of active dissipation, there was evidence of pre-existing intentions and steps taken by the deceased to deprive her of assets that would have been received by her as spouse and joint tenant.  The court agreed – the deceased, with the defendants’ knowledge and sometimes with their “loyal support” structured his affairs to remove assets from the plaintiff’s reach.  The court relied upon the commencement of family law proceedings, the severance of the joint tenancies, and the will excluding the plaintiff as evidence of the deceased’s intention to put assets out of the reach of the plaintiff.

The Court varied the injunction to remove the sons from the freezing order.  “Considerations of fairness and justice” did not support continuing the interlocutory relief against them personally.  The order remained in place as against the other defendants, i.e. the trustee and the corporations.

The case also includes an interesting discussion of claims for unjust enrichment brought by one spouse against the other.  A spouse who claims unjust enrichment based on a family venture need not have played an active role in a business venture that is alleged to be the product of the family venture.  The deceased’s business efforts built the family’s wealth, but the plaintiff made that possible through her role in the family, entitling her to a remedy for a proportionate share of the wealth built.

B.C. Case Comment: Applications for Standing to Bring Claims on Behalf of Estate Against Executor

What happens if you are a beneficiary and you believe that the estate ought to make a claim against the person who happens to be the executor of the estate?  This is a common scenario.  Often, the person that a will-maker chooses to be their executor is a person who was involved in their affairs during their lifetime, for example under a power of attorney.  This presents opportunity for undue influence, or for the person who later becomes executor to otherwise benefit from their position of control.  In such a case, the beneficiary will want “the estate” to investigate or pursue claims against the executor, but the executor has no incentive to investigate themselves (and is in a conflict of interest).

This is what happened in the recent B.C. Court of Appeal decision of Hoggan v. Silvey 2022 BCCA 176.

In Hoggan, the deceased divided her estate equally among her three daughters.  Two of the sister beneficiaries had concerns about cheques for substantial amounts ($150,000+) that had been made from the deceased during her lifetime to the third sister (“Lorna”) and her husband (“Ray”).  Lorna and Ray had some control over the Deceased’s finances when the cheques were written.  The matter was complicated by the fact that Ray was the executor of the estate (and Lorna was named as alternate executor).

If beneficiaries want a claim to be made on behalf of the estate against the person who is the executor or administrator of the estate, they have two options:

  1. Seek removal and replacement of the executor, with the expectation that the replacement executor will bring the claim on behalf of the estate against the removed executor; or
  2. Apply for standing to bring a claim on behalf of the estate against the executor.  This is because the executor cannot be expected to sue themselves.

I have previously written about the issue of applying for standing to bring an action on behalf of an estate here.

In Hoggan, the two sisters pursued both remedies: they applied to remove Ray as executor, and they sought standing to bring a claim against Ray (and Lorna) on behalf of the estate.

At the B.C. Supreme Court level, the chambers judge dismissed both applications.

The chambers judge refused to remove Ray as executor because the deceased had a close and trusting relationship with him and wanted him to be executor, and the estate funds were held in trust.

With respect to the application for leave to bring proceedings on behalf of an estate, the test is set out at s. 151 of the Wills, Estates and Succession Act.  If the executor will not commence proceedings on behalf of the estate, a “specified person” may apply for leave to commence proceedings on behalf of the estate.  The test is set out at s. 151(3):

(3) The court may grant leave under this section if

(a)   the court determines the specified person seeking leave

(i)    has made reasonable efforts to cause the personal representative to commence or defend the proceeding,

(ii)    has given notice of the application for leave to

(A)   the personal representative,

(B)   any other specified persons, and

(C)  any additional person the court directs that notice is to be given, and

(iii)   is acting in good faith, and

(b)   it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.

The chambers judge held that the requirement at s. 151(3)(b) was not met, which requires that the proceedings be necessary or expedient for the protection of the estate.  To meet this requirement, three elements had to be established (as will be seen below, the Court of Appeal took a different view as to the elements required):

  1. There is an arguable case;
  2. The potential relief outweighs the inconvenience caused to the estate; and
  3. The proceeding is in the best interests of the estate.

The chambers judge held that:

  1. There was no arguable case.  There was no evidence of undue influence, only “mere allegations and suspicion”;
  2. The relief sought was outweighed by the prejudice, in light of the limited value of the estate, the lawyers’ fees to litigation the claim, and the cost and delay if the claim was pursued; and
  3. Given the substantial cost of the litigation and the weak case, it was not in the estate’s best interest to grant leave.

The two sisters appealed the dismissal of both applications.

The Court of Appeal dismissed the appeal of the dismissal of the application to removal Ray as executor.  The chambers judge did not err in the exercise of her discretion to not remove Ray at this junction.  Ray was to remain as executor.

However, the Court of Appeal allowed the appeal from the dismissal of the leave application.  The two sisters were granted leave to commence a proceeding on behalf of the estate against Lorna and Ray.

The Court of Appeal looked at the actual language of s. 151(b)(3):

(b)   it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.

The Court focused on the disjunctive “or”, which means that the section is to be read as follows:

(b)        it appears to the court that it is necessary or expedient for the protection of the estate

or

that it is necessary or expedient for the protection of the interests of a specified person for the proceeding to be brought or defended.

This means that while the best interests of the estate may be considered, they are not necessarily a factor when the interests of a specified person are raised.

With this in mind, the Court of Appeal concluded that:

  • The chambers judge erred when she concluded there was no arguable case.  Whether there is an “arguable case” is a very low threshold, and the two sisters met it in this case;
  • The chambers judge placed too much emphasis on the best interests of the estate, when the application was brought to protect the interests of a specified person, not those of the estate.
  • Ray refused to make inquiries as to the cheques (and would be in a conflict of interest if he did), and so the only way to protect the interests of a specified person (in this case, the two sisters), was to grant them leave to commence proceedings.

This case confirms that beneficiaries ought to be given the opportunity to bring claims that they wish to pursue if the claims are in their interests, even if the claims may not necessarily be in the interests of the estate as a whole.

What I’m Reading: Interesting Estate Litigation Articles for May 2022:

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Ashley Naipaul at Hull & Hull LLP (in Ontario) discusses an Alberta case which considered whether the court ought to look at the reasons behind a person’s decision to revoke their power of attorney as part of the determination of whether that person had capacity to make the revocation: https://hullandhull.com/Knowledge/2022/05/questioning-the-decision-to-revoke-or-grant-a-poa-where-capacity-and-autonomy-intersect/
  2. Albert Oosterhoff at WEL Partners (Toronto) discusses the doctrine of ademption – what happens if a will-maker makes a specific gift in their will, but then the property no longer exists or is no longer owned by the will-maker at the date of death: https://welpartners.com/blog/2022/05/ademption-by-conversion-best-v-hendry/
  3. Kantor LLP (Calgary) posts about a recent Alberta case in which an executor was removed because they were taking too long to administer the estate: https://www.kantorllp.ca/blog/failure-to-act-results-in-personal-representative-removal/
  4. Candace Cho (Onyx Law Group) writes about the issue of whether a plaintiff was a “spouse” who was entitled to claim under an intestacy: https://onyxlaw.ca/bc-inheritance-turns-on-common-law-relationship-status/
  5. Albert Oosterhoff at WEL Partners (Toronto) considers when the duty to keep accounts begins for someone who holds a power of attorney: https://welpartners.com/blog/2022/05/when-does-an-attorneys-duty-to-keep-accounts-begin/
  6. The B.C. Director of Civil Forfeiture has sued to confiscate $120,000 (a package of $50, $20 and $10 bills) from the estate of a man found dead of an overdose, claiming that the deceased was a drug trafficker, and the monies were proceeds of crime:https://www.cbc.ca/news/canada/british-columbia/civil-forfeiture-drug-trafficking-sametz-1.6468682

Happy reading!

B.C. Case Comment: Alleged Promise to Give Property Doesn’t Create Express Trust

In my estate and trust litigation practice, I often see cases where one party seeks to enforce an alleged promise (for example, a promise to transfer or gift property) by a second party, which is now denied by that second party.  One potential remedy is a finding that the property is held in an express trust as a result of the conduct of the parties, in particular the conduct and the words of party who held the property and is alleged to have promised to gift it.

The B.C. Court of Appeal recently considered such a claim in Virk v. Singh 2022 BCCA 153.  In Virk, Mr. Singh was very close to Mr. and Ms. Virk, until Mr. Singh had a falling out with Mr. Virk.  Mr. and Ms. Virk separated.  Mr. Singh owned the property next door to the Virks’ matrimonial home.  Mr. Singh promised to give that property to Ms. Virk in exchange for money she would receive from her family law action against Mr. Virk (which Mr. Singh encouraged her to bring), and for her help with a lawsuit brought against him by Mr. Virk.  Ms. Singh fulfilled her end of the agreement.  She provided Mr. Singh with monies from the settlement of her family law claim, and she helped him defend against the claim brought by Mr. Virk.  She also lived at the property and paid expenses for the property for many years.  However, Mr. Singh failed to give her the property.

Ms. Virk claimed that the promise to provide the property to her created an express trust.

In order to establish an express trust, there must be three certainties:  certainty of intention, subject and object.

In Virk, the issue was whether there was certainty of intention.  Usually, when you are creating an express trust there is a formal (written) trust agreement.  Where there is no formal agreement, then a court can determine whether there is certainty of intention “by looking to the surrounding circumstances, the evidence of what was agreed upon, and how the parties conducted themselves.”  The critical element is the settlor’s intention (in this case, Mr. Singh).  That intention can be express or implied.  The court must undertake an objective inquiry, to determine whether there is an intention to form an express trust.  The court will look at what a reasonable person would conclude from the words and conduct of the parties, as well as the surrounding circumstances.  The court must look at intention at the time of the transaction.  The court will be very careful when looking at post-transaction conduct.

The trial judge held that Mr. Singh’s promise was a false one and that he never actually intended to give Ms. Virk the property, and therefore there was no certainty of intention.  Ms. Virk appealed.

The Court of Appeal held that the trial judge erred when concluding that Mr. Singh’s promise to give the property to Ms. Virk was a false one because he never subjectively intended to transfer her the beneficial interest in the property.  The Court of Appeal held that one cannot claim to lie to the other party about intention to give the property, carry out the actions necessary to do so, and then rely on the fact that the communication was a lie.  The trial judge erred by failing to assess the certainty of intention on the objective standard.  She also erred in not limiting her consideration to surrounding circumstances at the time of the promise.  The trial judge also relied on post-transaction conduct, which was a problem in Virk because the trial judge had found Mr. Singh to not be credible (and if a party is not credible, then evidence of their post transaction conduct should be given little weight).

However, despite the errors, the Court of Appeal upheld the result.  A reasonable person at the time the promise was made would likely conclude that Mr. Singh intended to benefit Ms. Virk if she fulfilled certain future conditions, but not necessarily that she would benefit on trust.  As a result, there was no express trust.

Fortunately, the trial judge held that Mr. Singh had been unjustly enriched by Ms. Virk’s payments to him (i.e. fulfilling her side of the “deal”) and her contributions to the maintenance of the property, and granted Ms. Virk a constructive trust in the amount of 70% of the increase in the value of the property from the time of the false promise.  This award was upheld by the Court of Appeal.

This decision shows that the court can attempt to make an award that is fair and equitable in the circumstances, but the court will not create an express trust where the requirements are not met.

What I’m Reading: Interesting Estate Litigation Articles for April 2022

The following is a roundup of noteworthy articles published this month on estate litigation and related issues:

  1. Last week, I wrote a post about whether unconscionable procurement is part of the law in British Columbia. John Poyser at at WEL Partners (Toronto) wrote about the same issue in Ontario (based on a recent Ontario decision): https://welpartners.com/blog/2022/04/is-unconscionable-procurement-properly-part-of-the-law-in-ontario/
  2. Stuart Clark at Hull & Hull LLP (in Ontario) discusses what happens when an overpayment is made to a beneficiary: https://hullandhull.com/Knowledge/2022/04/overpayment-to-beneficiaries-do-beneficiaries-need-to-return-a-distribution-made-in-error/
  3. Candace Cho at Onyx Law writes about costs in committeeship proceedings: https://onyxlaw.ca/the-legal-costs-of-bc-committeeship-applications/
  4. Albert Oosterhoff, also at WEL Partneres writes about how someone can become a trustee: https://welpartners.com/blog/2022/04/how-do-you-become-a-trustee/
  5. The Vancouver Sun covered a lawsuit recently commenced by two family members to get a share of their deceased mother’s $3-million lottery winnings.  This will be an interesting one: https://vancouversun.com/news/local-news/late-vancouver-island-womans-family-court-bound-over-her-3-million-lottery-jackpot

Happy reading!

B.C. Case Comment: Does the Doctrine of Unconscionable Procurement Apply in B.C.?

The transfer of property into joint ownership with right of survivorship is a common estate planning tool.  But can you take back the transfer after you have made it?  You can make a new will changing the distribution of your estate, but can you undo the transfer of property into joint ownership?

This is what a 91 year old father tried to do (unsuccessfully) in the recent B.C. Supreme Court decision of Sandwell v. Sayers 2022 BCSC 605.  The father tried to argue that the doctrine of unconscionable procurement applied.

The doctrine of unconscionable procurement provides that where there is a transfer of significant benefit that the recipient actively caused to occur, there must be proof of the donor’s full comprehension and understanding of the effects of the transfer for it to be upheld.

The onus is on the party attacking the transaction to prove, on a balance of probabilities, that it was unconscionably procured.  Once the party challenging the transaction has established a significant benefit and the active involvement on the part of the person obtaining the benefit in the procurement or arrangement of the transfer, then there is a presumption that the donor of the gift did not truly understand what she was doing in making the transaction.

Turning to the facts in Sandwell, the plaintiff father had two children, a son and the defendant daughter.  In December 2020, the father transferred an interest in his home in Kelowna to his daughter, making them joint tenants.  He later brought legal proceedings to get the property back into his sole name.

The father lived alone at the property.  The father was in good health.  There was no issue with his capacity at the time of the transfer.

Back in 2008, the father had executed a transfer of his home to his son for $1.00.  The transfer was never registered, and the original documents were retained by the lawyer who drafted them.  The daughter discovered copies of the documents, along with a note that read “this transfer will not be used except with your consent or in the event that your health fails and there is no likelihood of your recovery.”  The daughter brought this to the attention of her father.  The father claimed that his daughter told him that his son could take his property and leave him broke.

The daughter and the father attended the office of a notary.  The daughter claimed that the father made the appointment, because he wanted to sign over half the property to her (and she would get the rest of it when he died).  The father claimed that the daughter told him that she made an appointment with a notary and that he should go with her, and when he arrived, the notary was expecting him and had prepared documents adding the daughter to the title to the property.

The notary was alive to concerns of undue influence, and he recorded these concerns in his notes.  He met with the father alone and reviewed the pros and cons of transferring title into joint tenancy.  He told the father to take some time to think about it (which he did).

After the initial consultation, the father called the notary and said that he did not want to proceed with the transfer.  A few days later he left four voicemail messages for the notary indicating he wanted to proceed with the transfer, and the daughter also emailed the notary to say that her father wanted to proceed with the transfer.  The transfer was registered.

The father now argued that the transfer into joint ownership ought to be set aside under the doctrine of unconscionable procurement – the daughter caused the transaction to occur (to her benefit) and he did not fully understand the effects of the transaction.  The daughter argued that not only were the requirements of the doctrine not met, but the entire doctrine is not good law and should not be applied in B.C.

The Court went through the history of the doctrine of unconscionable procurement, noting that it was popular in the 1800s and early 1900s, but is rarely mentioned in current case law.  It has been referenced in a few recent cases (and I have noticed that lately it is being pled in more claims), but there has been no detailed analysis of whether the doctrine still has any place in British Columbia.  One concern is whether the courts should endorse claims brought beyond such “traditional” grounds of attack on transactions, such as undue influence, incapacity and resulting trust.

In Sandwell, the Court had “real doubt” about the place of the doctrine of unconscionable procurement in British Columbia law.   However, if the doctrine of unconscionable procurement exists and has any place in B.C., it did not assist the father in this case.

First, at best the daughter arranged the appointment with the notary (although that was disputed) and caused him to fear his son might take his home.  This was not enough to satisfy the requirement that there be “active involvement by the person obtaining the benefit in the procurement or arrangement of the transfer.”

Second, the father failed to present any evidence which indicated a misunderstanding of the impact of his actions.  He did not provide evidence that he failed to understand the effect of transferring the property into joint ownership.

The Court also refused to set aside the transfer on the basis of unjust enrichment.

The Court expressly stated that it did not intend to make a decision that applies beyond the scope of the facts that were before it.  As a result, the B.C. Courts have not stated that the doctrine of unconscionable procurement does not apply in British Columbia.  However, Sandwell contains a strong analysis and argument in support of why the doctrine should not apply in British Columbia, or should only apply in very limited circumstances.

B.C. Case Comment: What Happens When Two People Want to be Appointed as the Committee of an Incapable Person?

Often, a family will be in agreement that one of their members is incapable, but they will not agree as to who ought to be appointed as committee to handle that person’s affairs. The Court is often asked to decide between competing committeeship petitions – two (or more) people seeking to be appointed to manage the affairs and decision-making for the incapable family member (the “patient”). A very common scenario is one in which two siblings cannot agree as to who ought to be appointed as committee for an elderly parent. The Court will often observe that all parties love and want the best for the patient. They just disagree on what is “best.”

This was the case in the recent decision of the B.C. Supreme Court in Srikureka v. Srikureja 2022 BCSC 514. The patient was 85 years old and suffered from Alzheimer’s disease. She had seven children. Two of the children sought to be appointed as committee in place of the Public Guardian and Trustee (and they opposed each other’s petitions). One applicant child had the support of one other sibling. The other applicant child had the support of three other siblings.

The choice of committee is highly fact specific.  However, the following considerations are often taken into account in the assessment of the patient’s best interests:

  1. whether the appointment reflects the patient’s wishes, when he or she was capable of forming such a wish;
  2. whether immediate family members are in agreement with the appointment;
  3. whether there is any conflict between family members or between the family and the patient, and whether the proposed committee would be likely to consult with immediate family members about the appropriate care of the patient;
  4. the level of previous involvement of the proposed committee with the patient, usually family members are preferred;
  5. the level of understanding of the proposed committee with the patient’s current situation, and will that person be able to cope with future changes of the patient;
  6. whether the proposed committee will provide love and support to the patient;
  7. whether the proposed committee is the best person to deal with the financial affairs and ensure the income and estate are used for the patient’s benefit;
  8. whether a proposed committee has breached a fiduciary duty owed to the patient, or engaged in activity which diminishes confidence in that person’s abilities to properly handle the patient’s affairs;
  9. who is best to advocate for the patient’s medical needs;
  10. whether the proposed committee has an appropriate plan of care and management for the patient and his or her affairs and is best able to carry it out; and
  11. whether a division of responsibilities such as between the patient’s estate and the patient’s person to different persons would serve the best interests of the patient, or would such a division be less than optimal for the patient.

The Court had to consider who should act as the committee of the patient’s estate (i.e. financial affairs) and the patient’s person (other decision-making).

Interestingly, the Court concluded that the Public Guardian and Trustee should remain as the committee of the patient’s estate. This was because neither of the children seeking to be committee had clearly distinguished between their personal funds and assets belonging to the patient. There was the possibility that upon further investigation, one or both of them owe the patient money, which would result in a conflict of interest if one of them was appointed as committee.

With respect to the committee of the patient’s person, the Court went through each applicable factor, and made a decision as to which child ought to be appointed. Certain factors supported each of the two children. One child had the support of more of the other siblings and was a medical doctor, but he lived out of town.  The other had cared for the patient in her home for over four years and was in town and better available to meet in person with doctors and caregivers. Both would have offered love and support to the patient.

Ultimately, the Court appointed the child who lived in town and had more than four years of recent experience caring for the patient in her home. The Court did impose conditions on the appointment, which included consultation and communication with the committee’s siblings.

B.C. Case Comment: Court Again Refuses to Force Elderly Person to Undergo Capacity Assessment

I have previously written about committeeships.  All adults are presumed to have legal capacity over their personal care and finances, unless the contrary is demonstrated.  On hearing an application under the Patients Property Act, the court may declare a person incapable and appoint a committee to manage a person’s care, finances, or both.  The application must be supported by the affidavits of two medical practitioners setting out their opinion that the person is incapable.

But what if the proposed patient disputes that they are incapable and opposes the application?  What if they refuse to submit to medical examinations and so the person making the application cannot obtain the two affidavits that are required?

This issue is arising with greater frequency.  I have previously written about the issue of attempting to force a person to undergo a medical assessment here.

The B.C. Court of Appeal recently considered this issue again in Cepuran v. Carlton 2022 BCSC 76.

The respondent (Sheri) was the only surviving child of the appellant (Ana).  When Ana’s husband died, Sheri became concerned about her mother’s health.  She observed strange and inconsistent behavior.  Ana became concerned that Sheri was becoming too controlling over the management of her affairs.  Sheri took steps to protect her mother’s interests using a power of attorney, including transferring her mother’s interests in certain properties into a trust.  Ana signed a revocation of the power of attorney.

Sheri applied to be appointed as committee to manage Ana’s affairs.  Ana opposed this.

Sheri relied on two affidavits from medical practitioners.  Neither of the doctors actually met Ana.  Instead, they were instructed to accept as true the descriptions of Ana’s behaviour, as provided by Sheri and other witnesses.

The chambers judge ordered that:

  1. there be a trial of the issue of whether Ana is incapable of managing her affairs; and
  2. Ana be required  to submit to examinations of her capacity by two geriatric psychiatrists.

Ana successfully appealed both of these orders.  As a result, the petition to appoint a committee of her affairs was dismissed.

The Court of Appeal held that it was not enough that the judge was of the view the evidence raised a “serious issue” as to capacity.  Sheri failed to provide the required two medical affidavits (a “threshold” requirement for a committeeship order), and so there was no basis for making the order.

The Court was also asked to consider whether the requirement for two affidavits from medical practitioners carries an implicit requirement that the physicians providing the opinions must in all cases personally meet with and assess the person whose capacity is being questioned.  In the Court’s view, it is best to leave the admissibility and weight of the medical opinions to be determined by judges on a case by case basis.  This leaves open the possibility that an applicant may successfully rely upon an affidavit sworn by a medical practitioner who hasn’t actually met the patient.

This is another recent example of a court recognizing personal autonomy and the intrusive nature of compelling an individual to undergo a medical examination against their will.  The courts fully prepared to enforce the strict requirements for a committeeship order.

What I’m Reading: Interesting Estate Litigation Articles for March 2022

The following is a roundup of noteworthy articles published this month on estate litigation and related issues:

  1. Stan Rule at Sabey Rule discusses a recent B.C. case in which the parties incurred significant legal fees to litigate an estate dispute, which could have been avoided had there been early financial disclosure: http://rulelaw.blogspot.com/2022/03/avoidable-legal-expenses-in-estate.html
  2. Paul Trudelle at Hull & Hull LLP (in Ontario) discusses a recent Alberta case which considered how to interpret a clause in a will allowing a beneficiary to live in a house “for a while”: https://hullandhull.com/Knowledge/2022/03/will-interpretation-how-long-is-for-awhile/
  3. Rebecca Betel at WEL Partners (Toronto) writes about a recent Ontario decision about the obligations of estate trustees to keep proper accounts and records: https://welpartners.com/blog/2022/03/case-review-pinard-et-al-v-gilchrist-et-al/
  4. Suzana Popovic-Montag and Raphael Leitz at Hull & Hull LLP (in Ontario) discuss what is meant when a trustee is given “absolute discretion”: https://hullandhull.com/Knowledge/2022/03/the-exercise-of-discretion-not-so-absolute/
  5. Bob Saget’s family has now obtained a permanent injunction blocking the release of certain records related to the death investigation of the late Bob Saget: https://www.cnn.com/2022/03/14/entertainment/bob-saget-injunction/index.html

Happy reading!