When cases of elder abuse arise, it is often a loved one who discovers alleged financial abuse, improprieties, or undue influence. But the loved one does not have standing to bring their own claim to recover assets for the rightful owner. The elderly person (the victim) must bring their own claim. Sometimes this creates difficulties. This person may lack capacity, or they may still be under the influence of the perpetrator of the fraud or otherwise unwilling to bring legal proceedings. What if a person is unable or unwilling to bring a proper and valid claim to recover their own property?
A proceeding can be filed and pursued on the person’s behalf by a litigation guardian, but only if the person is under a legal disability. A proceeding brought by or against a person under a legal disability must be started or defended by a litigation guardian – someone who agrees to conduct the litigation on behalf of the person with the legal disability. The test for a “legal disability” is whether the person is capable to instruct counsel and to exercise judgment in relation to the claims in issue and possible settlement as reasonable person would be expected to do. A person is presumed capable unless proven otherwise. If the person is capable, then they are the appropriate person to bring their own legal proceedings, unless there is a power of attorney or some other authority that would permit a third party to handle proceedings on their behalf.
What if you have knowledge of a case of financial abuse against a person under a legal disability, but the “victim” does not want to bring a claim, and does not agree that they suffer from a legal disability? This was the issue in Stanford v. Murad 2021 BCSC 130, a decision of the B.C. Supreme Court released last week.
Mr. Stanford is 89 years old, and has two adult children who are the primary persons who will inherit their father’s estate upon his death. Mr. Stanford suffered from psychiatric disorders, including depression, for decades. He also suffers from other serious health issues and is unable to care for himself. In 2013, Mr. Stanford appointed his son-in-law as attorney-in-fact and executor of his will, and asked him to manage his affairs.
Mr. Stanford met the defendant in 2015, and they eventually moved in together. It is unclear whether they actually married, but Mr. Stanford was very dependent on the defendant. His daughter and her husband (Mr. Stanford’s son-in-law) allege that the defendant isolates Mr. Stanford and prevents them from seeing and communicating with him, that she is abusive, and that she is taking financial advantage of him. They allege that Mr. Stanford lacked capacity to take various steps, including appointing the defendant as his new power of attorney, adding her as a joint owner of various assets (including real property) and transferring monies to the defendant.
The daughter and son-in-law caused a lawsuit to be filed on behalf of Mr. Stanford, with the son-in-law as litigation guardian, seeking an accounting and tracing of all property transferred to the defendant.
Mr. Stanford sought to set the appointment of his son-in-law as litigation guardian. He does not agree that he is under a legal disability, and he does not want his son-in-law challenging the transfers and other arrangements that he has made with the defendant. In other words, he denies that he is a victim of elder abuse, and he says that he has the capacity to make that decision.
The Court held that the evidence raised significant concerns about whether Mr. Stanford is under a legal disability. The Court ordered that Mr. Stanford attend a medical examination conducted by a doctor chosen by the son-in-law for the purpose of providing an opinion to the Court regarding whether Mr. Stanford is capable of instructing counsel and exercising judgment in relation to the claims and possible settlement.
If upon reviewing the medical opinion the Court determines that Mr. Stanford has the requisite level of capacity, then he can make the decision not to move forward with court proceedings against the defendant. While Mr. Stanford remains capable, his daughter and son-in-law will not have standing to advocate and protect his assets by way of court proceedings brought on his behalf.