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!