Category: Case Comment

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

April 14, 2022

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

April 8, 2022

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.

B.C. Case Comment: Dilatory Executor Personally Responsible for Portion of Legal Expenses

March 25, 2022

A personal representative of an estate (executor or administrator) has an obligation to account and to provide information about the administration of the estate to the beneficiaries.  The personal representative cannot simply ignore this obligation.  A beneficiary has remedies if the personal representative ignores requests.  The Court may reduce the remuneration payable to the personal representative (i.e. executor’s fees), or reduce the amount of costs that a personal representative is entitled to receive, with the result that the executor may be personally responsible for paying expenses that they expected to have paid by the estate.  The most common example is legal fees – if the personal representative delays or otherwise causes the estate to incur legal fees which could have been reasonably avoided, the executor may be personally liable for that expense.

The B.C. Supreme Court recently considered this issue in Bowling Estate (Re) 2022 BCSC 369.  In Bowling, the deceased died with no spouse and four children.  She left a will naming one of her children as executor, and dividing her estate equally between her four children.  The estate was worth approximately $110,000 and was primarily liquid assets, and so it was a straightforward administration.

The executor did not seek any remuneration.

The court identified “distrust” between the executor and one of her sisters.  The distrust was magnified when the executor ignored requests for information from her sister about the management and administration of the estate.  The executor did not provide any explanation for her failure to respond to requests for information.  The sister retained counsel, and then the executor retained counsel.

The executor eventually delivered formal accounts in relation to the estate.  There were no objections made or concerns raised with respect to the accounts.  The issue was the delay in delivering the accounts, and the fact that the sister had to retain counsel and incur legal expenses in order to compel the executor to produce those accounts.

In the normal course, legal fees which are reasonably incurred in the course of administering an estate ought to be treated as a disbursement of the estate, to be paid by the estate.  However, where an executor has misconducted themselves or is guilty of delay or neglect in administering an estate, there may be a reduction in their remuneration, and also a reduction in the amount of costs they are entitled to receive.

In Bowling, the executor claimed $10,000 in costs.  The sister sought special costs in the amount of $11,500.

The Court reduced the executor’s costs from $10,000 to $6,000.  The Court was not satisfied that the executor’s (mis)conduct was to the degree that she should not recover some of the legal expenses she incurred to have her accounts formally passed.  The executor was personally responsible for any legal expenses that she incurred over $6,000.

The Court awarded the sister $6,000, to be paid to her personally by the executor.  The sister was awarded an amount for costs because she had a legitimate reason to hire counsel in light of the executor’s refusal to respond to requests for information.  However, she did not get the entire amount sought because she ultimately consented to the accounts as presented when she found nothing suspicious (beyond the outstanding dispute about legal costs).

In making these awards, the Court was mindful of the very modest amounts left in the estate.  The Court expressed disappointment that this issue made it before the courts at all.  The entire application (including the legal expenses for both sides and the use of court time) could have been avoided if the executor had responded to the requests from the beneficiary for information about the administration of the estate.

B.C. Case Comment: Court of Appeal Confirms that Estate can Commence Family Law Claim on Behalf of Separated Spouse

March 18, 2022

A spouse who has separated from their partner does not meet the definition of a “spouse” under the Wills, Estates and Succession Act.  This means that they are not entitled to advance claims under that act, most notably wills variation claims or claims to entitlement on in intestacy.  Prior to death, the separated spouse could have brought a claim for property division under the Family Law Act.  What happens if a spouse has separated from their partner, but does not commence a family law claim for division of property prior to death?  Can the deceased’s estate commence a family law claim on their behalf?

The B.C. Court of Appeal recently considered this issue in Weaver Estate v. Weaver 2022 BCCA 79. In Weaver, the deceased married the defendant in 1993.  They separated in 2005.  The deceased passed away 15 years later.  While the deceased had consulted with a family law lawyer, no proceedings were commenced.  There were no divorce orders or other court orders, and there was no family law agreement.

After the deceased’s death, the administrator of her estate filed a notice of family claim against the deceased’s ex-spouse, seeking a division of property.

The surviving spouse applied to have the claim struck due to lack of standing to bring the claim, or lack of jurisdiction.  The application was dismissed, i.e. the family law proceeding brought by the administrator was allowed to continue.  This decision was upheld on appeal.

The interplay between the Family Law Act and the Wills, Estates and Succession Act allows the administrator of a separated and deceased spouse to commence a claim for the division of family property, as long as the time limits have not expired.  The fact that the deceased spouse did not personally commence that proceeding during their lifetime is not a bar to the action.

The Family Law Act provides that on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt.  This applies to married spouses, and “common law spouses” (who lived with each other in a marriage-like relationship – the term “spouse” is defined in the Family Law Act).  The interest crystallizes upon separation, and does not expire upon death.  The triggering event is separation.

The Family Law Act sets out a limitation period for bringing a claim for division of property.  The claim must be started no later than two years after, in the case of spouses who were married, the date a judgment granting a divorce of the spouses was made, or the date an order was made declaring the marriage of the spouses to be a nullity.

There is nothing in the Family Law Act which expressly prohibits an estate from commencing a family law claim for property division on behalf of a deceased spouse.  The Wills, Estates and Succession Act confirms that a cause of action or proceeding is not annulled by reason only of the death of a person who had the cause of action, and the personal representative for the deceased person may commence or continue a proceeding that the deceased person could have commenced or continued.

The Court of Appeal also agreed that a finding to the contrary “would result in a gap that carries the realistic potential for substantial injustice.”  A separated and surviving spouse could seek the division of family property and family debt against the estate of the deceased spouse.  The estate of the deceased spouse must have the same entitlement as against the surviving spouse.  As noted above, a separated spouse does not meet the definition of “spouse” entitled to advance a claim for relief under the Wills, Estates and Succession Act.  If the Court of Appeal did not reach the conclusion that it did, the estate of the deceased spouse would be cut out of both the Family Law Act regime, and the Wills, Estates and Succession Act regime.

The Court of Appeal was not asked to decide the issue of the limitation period for bringing a family law claim for division of property on behalf of a deceased spouse.  However, they “noted” that principles of statutory interpretation may support the position that the administrator of an estate would have two years from the date of death of the separated and deceased spouse to commence such a claim.  An administrator would be well-advised to commence an action on behalf of a deceased and separated spouse within the two years if at all possible to do so.

What are the Consequences When a Beneficiary is a Witness to the Will?

February 25, 2022

Is it appropriate for a beneficiary in a will to witness the execution of that will? The law in B.C. presumes that a gift to the witness of a will or their spouse is void, unless the court declares otherwise.

To be valid in B.C., a maker-maker must sign their will or acknowledge their signature in the presence of two or more witnesses present at the same time, and those witnesses must also sign the will in the presence of the will-maker (but keep in mind the recent changes to allow electronic wills in B.C., discussed here).

Section 40(2) of the Wills, Estates and Succession Act provides that “a person may witness a will even though he or she may receive a gift under it, but the gift may be void under section 43.”   Section 43 provides that “unless the court otherwise declares”, a gift in a will is void if it is to a witness to the will-maker’s signature or the spouse of that witness.  On application, the court may declare that such a gift is not void and is to take effect, “if the court is satisfied that the will-maker intended to make the gift to the person even though the person or his or her spouse was a witness to the will.”

The B.C. Supreme Court recently considered this issue in Wolk v. Wolk 2021 BCSC 1881. In Wolk, the deceased left his estate to his parents. His parents were two of the three witnesses to the will. The will explained the purpose of the gift, which including making that the parents were expected to make provision for the will-maker’s daughters.

The issue for the court was whether the gift to the parents was void since the parents witnessed the signing of the will.  The central concern is testamentary intent: what did the will-maker actually intend? Extrinsic evidence is admissible for establishing the will-maker’s intention.

In Wolk, it was “readily apparent” that the will-maker intended for the two witnesses to receive his estate even though they signed as witnesses. The will-maker “expressly articulated” the basis for the gift in the will. The will-maker also changed his beneficiary designations to make similar provision for his parents. The Court concluded that the gifts to the will-maker’s parents were valid, even though the parents signed as witnesses.

If possible, a will-maker should arrange for witnesses who are not beneficiaries under the will, as the presumption is that any gift to a witness is void. However, this may not be practicable. There may be no one else available, or there may be urgency (i.e. a will made on the will-maker’s deathbed). If it cannot be reasonably avoided and a named beneficiary must witness the will, there is a remedy, but it is an added complication and of course there is no guarantee that an application to declare the gift valid will be successful.

B.C. Case Comment: Person Who Caused Deceased’s Death Cannot Benefit under Will, so Who Does?

February 18, 2022

In the recent decision of Unger Estate (Re) 2022 BCSC 189, the B.C. Supreme Court considered what happens to a beneficiary’s share of an estate when that beneficiary is convicted of murdering the deceased.  Fortunately, these are extremely rare circumstances (rare enough to be reported in the media).  However, the case did give the Court an opportunity to discuss what happens when a gift cannot take effect for any reason, which is not as rare (for example, a beneficiary dies before the will-maker).

In Unger, the deceased had two sons. She made a will leaving her estate to her sons in equal shares. The will further provided that if a child predeceased her but left children their own, then those children (i.e. the deceased’s grandchildren) shall receive their parent’s share. In the alternative, any part of the estate that did not pass to one of the deceased’s children or grandchildren was to be divided equally between two charities.  At the time of her death, the deceased’s estate was worth approximately $860,000.

One of the deceased’s sons entered a guilty plea to the charge of second degree murder of his mother. He admitted to his role in causing her death, and was sentenced to life imprisonment with eligibility for parole after ten years.

In Canada, there is a rule of public policy which excludes the person responsible for another person’s death of taking any benefit. The son presumably was aware of this and agreed to voluntarily disclaim any entitlement to his mother’s estate.  There are case authorities which suggest that this rule extends to those who claim through the criminal’s estate.

The son who could no longer inherit has a daughter, who was born eleven days after his mother’s death.

The issue for the court was who would receive the son’s share of the estate: his daughter, or the two charities who were named as alternate beneficiaries? The trustees sought advice and direction from the court.

There was some evidence that the Deceased’s relationships was both sons had “eroded”, and she was considering changing her will to provide for her grandchildren. However, this was irrelevant to the issue before the Court because she did not actually change her will.  The Court looked at the deceased’s intentions in making the will.

The Court concluded that the son’s portion of the residue passed to his daughter. The clear intent of the deceased in the will was that if one of the deceased’s children predecease her, any children of that child were to receive the deceased child’s share.  In this case, the son’s daughter was an “alternative beneficiary” of the gift to the son as contemplated by s. 46 of the Wills, Estates and Succession Act which provides as follows:

When gifts cannot take effect

46   (1) If a gift in a will cannot take effect for any reason, including because a beneficiary dies before the will-maker, the property that is the subject of the gift must, subject to a contrary intention appearing in the will, be distributed according to the following priorities:

(a) to the alternative beneficiary of the gift, if any, named or described by the will-maker, whether the gift fails for a reason specifically contemplated by the will-maker or for any other reason;

(b) if the beneficiary was the brother, sister or a descendant of the will-maker, to their descendants, determined at the date of the will-maker’s death, in accordance with section 42 (4) [meaning of particular words in a will];

(c) to the surviving residuary beneficiaries, if any, named in the will, in proportion to their interests.

(2) If a gift cannot take effect because a beneficiary dies before the will-maker, subsection (1) applies whether the beneficiary’s death occurs before or after the will is made.

As a result, the granddaughter was first in priority for distribution of her father’s share.  The headline from the Vancouver Sun article summarizes a concern with this: “Court grants half of murdered Chilliwack woman’s estate to her killer son’s daughter.”

There were also accounts with direct beneficiary designations made in favor of the deceased’s two sons (i.e. which would pass outside of the estate and not be dealt with in the will). The benefits which otherwise would have been designated to the son who caused the deceased’s death were instead to be paid to the other son.

B.C. Case Comment: Court Finds No Binding Agreement to Leave Estate to Niece

January 21, 2022

A person may enter into a testamentary contract, whereby they agree to leave their estate to another person in exchange for some consideration, for example services that the other person had provided or would subsequently provide.  This creates a binding agreement, and the party no longer has the ability to change the named beneficiary in their estate plan without breaching the agreement.

These agreements can be difficult to prove.  Testamentary autonomy is “a deeply entrenched common law principle,” and this type of agreement deprives a person of their testamentary autonomy (albeit for consideration).

The B.C. Supreme Court recently considered the existence of a testamentary contract in Angelis v. Siermy 2022 BCSC 31.  In Angelis, the court considered whether a childless aunt was obligated to leave her estate to one of her nieces.  In 2002, the aunt executed estate documents that would leave most of her substantial estate to the niece (the plaintiff).  In 2011, the aunt executed a subsequent will changing her main beneficiary to a different niece.

The plaintiff claimed that she had an oral contract with her aunt, whereby her aunt promised to leave the bulk of her estate to the plaintiff in exchange for the plaintiff providing years of unpaid service to the aunt and her company.  She alleged that the changes to the estate plan in 2011 resulted in a breach of that agreement.

The Court observed that this was an unusual case because the will-maker was still alive and in a position to defend the litigation.  She denied the existence of any agreement to leave her estate to the plaintiff.

The plaintiff was the only person who claimed that the agreement existed.  There were no collateral witnesses to confirm her position.

The plaintiff relied upon three letters, allegedly written by the aunt, which allegedly explained the aunt’s reasons for her estate planning decisions.  The aunt admitted that she wrote the first letter (which does not mention any agreement), but denied drafting or signing the second and third letter.

The court found no evidence that supported the existence of a testamentary contract in this case.  Instead, the evidence suggested that no such agreement existed.

The court considered the three letters in great detail (including expert evidence on ink and handwriting analysis).  The court focused on the content of the letters, and concluded that the plaintiff forged the second and third letters.  The plaintiff’s claim in breach of contract was dismissed.

The plaintiff also brought a claim in unjust enrichment, in the event there was no contract.    However, unjust enrichment is an equitable remedy, and a party who seeks a equitable remedy must come to court with clean hands.  In this case, the plaintiff’s claim in unjust enrichment was barred as a result of her forgery of the two letters.  In the alternative, the plaintiff provided any services with donative intent, and further she was compensated for her services.

B.C. Case Comment: Wording of Remuneration Clause Does Not Entitle Executors to Fixed Fee

January 14, 2022

Under the B.C. Trustee Act, an executor is entitled to remuneration for the administration of an estate, unless the Will states otherwise.

Section 88 of the Trustee Act provides that the court may allow an executor or administrator or trustee a fair and reasonable allowance, not exceeding 5% on the gross aggregate value, of all of the assets of the estate.  Determining the appropriate fee in any given case is a fact specific inquiry.  The criteria for determining an appropriate fee includes: the magnitude of the trust, the care and responsibility involved, the time occupied administering the trust, the skill and ability displayed, and the success achieved in the final result. The Court must exercise its discretion to determine a reasonable fee in any given case.

However, section 90 of the Trustee Act provides that s. 88 does not apply in any case in which the allowance is set by the instrument creating the trust. In other words, a will maker or settlor may purport to take away the discretion of the Court by expressly stating the amount of remuneration payable to the executor or trustee in the Will or Trust Deed.

Will-makers and trustees must take care when drafting remuneration clauses, as ambiguities or drafting errors may result in confusion and ultimately legal proceedings. This was the case in the recent decision of the B.C. Supreme Court in Zaradic Estate (Re) 2021 BCSC 2478.

In Zaradic, the Will contained the following provision:

My trustees may claim remuneration for acting as Trustees in the amount of Ten Percent (10%) of the net value of the residue of my estate to be shared equally between them, in lieu of any Executor or Trustee Fee’s.

This was the appeal of a registrar’s decision. I previously wrote about the registrar’s decision here.  The registrar held that this language meant that the executors were allowed to make a claim for remuneration, but the amount was not fixed. The 10% was a ceiling, not an entitlement as a matter of right.

The registrar went on to hold that the executors’ efforts were a “dismal failure” and their actions “were an egregious breach of their fiduciary duty,” and as a result they were not entitled to any fee. I discuss the particulars of the egregious conduct in my previous post.

On appeal, the executors argued that the remuneration was fixed in the will at 10%. Since the remuneration was fixed, the registrar had no discretion to determine remuneration (and so should not have even considered their conduct as executors).

The beneficiary agreed that fixed fees may not be challenged, but said that the will in this case did not set a fixed fee.   In the alternative, the beneficiary argued that even if the will set a fixed fee, the fee can be reduced.

The Court had to determine the intention of the testator, as expressed in the will, when read in light of any admissible extrinsic evidence.  The Court held that this particular clause was “poorly drafted” and “internally inconsistent”.

The Court concluded that the better interpretation was that the remuneration was discretionary and nature, and to be set in accordance with the factors to be applied under s. 88 of the Trustee Act. The use of the words “may claim” implied the exercise of discretion and not an absolute entitlement. The burden of establishing a fixed fee was on the executors, and they failed to meet their burden of proof.

The court did not have to consider the beneficiary’s alternative argument – that a court has discretion to reduce a fixed fee (although they did observe that only a judge and not a registrar would have that jurisdiction if it existed). This is an interesting issue that may have to be considered in a future case where there is a proper fixed fee.

The appeal was dismissed.   Since the clause did not create a fixed fee, the registrar was entitled to exercise discretion and order that no remuneration was payable as a result of the conduct of the executors.

Finally, the executors (not the estate) were ordered to bear the costs of the appeal, “as it was purely their own interests that they were pursuing.” This is another reminder that the Courts will not simply order that all parties are entitled to their costs payable by the estate.

B.C. Comment: Plaintiff not a “Spouse” of the Deceased Entitled to a Share of his Estate – Appeal Dismissed

December 17, 2021

In estate litigation, spouses have certain rights and available remedies. If there is a will, the spouse of the deceased is entitled to bring a claim to vary the will if it does not make adequate provision for the surviving spouse. If there is no will (i.e. an intestacy), then the spouse is entitled to a preferential share of the estate.

It is increasingly common to see the issue of standing, i.e. whether a person is actually a “spouse,” make its way before the B.C. Courts. I have previously written on this issue here.

The B.C. Court of Appeal considered this issue again in the recent decision of Mother 1 v. Solus Trust Company Limited 2021 BCCA  461.  “Mother 1” asked the Court of Appeal to overturn a decision by the B.C. Supreme Court that she was not a “spouse” of the deceased.

The deceased died in 2015 without a will. His Canadian estate was estimated to be worth up to $21 million. In British Columbia, if someone dies without a will and leaves a spouse and surviving descendants, then the spouse will receive the household furnishings, and a preferential share of the estate. If all of the descendants are descendants of the deceased and the spouse, then the spouse gets the first $300,000. If the descendants are not also the descendants of the spouse, then the spouse gets the first $150,000. The residue of the estate is then divided (1) one half to the spouse, and (2) one half to the deceased’s descendants.

In this case, the deceased had five children with five different women. He did not marry any of the women. He spent time with all of them, and provided them with various levels of financial support and expensive gifts. There was overlap between the relationships. He was described by the court as living a “playboy” lifestyle. As a result of the somewhat sensational facts, this decision did attract some media attention.

Mother 1 did not know about the other four women until after the deceased’s death.  The trial judge observed that there was no evidence of sexual intimacy between Mother 1 and the deceased for years before his death.  While they referred to each other as “husband” and “wife”, the deceased used these terms with two of the other women with whom he had children.  While the deceased supported Mother 1, he did the same with the other women.  The deceased had no intention to live in a marriage-like relationship with Mother 1.

The B.C. Supreme Court concluded that there was no marriage-like relationship between Mother 1 and the deceased. In the alternative, if such a relationship did exist, it was terminated by the deceased.

Mother 1 appealed this decision.

Two persons are spouses of each other for the purpose of the Wills, Estates and Succession Act if they were married to each other, or had lived with each other in a marriage-like relationship for at least two years. Two persons cease to be spouses of each other if, in the case of a marriage-like relationship, one or both persons terminate the relationship.

The Court of Appeal confirmed that the requisite two years of a marriage-like relationship need not immediately precede the intestate’s death.   However, the persons must remain spouses at the time of the death in order to advance a claim. If the parties ceased to be spouses before one party’s death because the marriage-like relationship was “terminated” by one of them, there will be no legal entitlement to advance a claim against the estate as a “spouse”.

This is useful general guidance from the Court of Appeal for persons seeking to bring claims on the basis that they were a “spouse” at the date of death, but it was of no use to Mother 1 because the Court of Appeal was satisfied that Mother 1 and the deceased were never in a marriage-like relationship.

The decision also shows the uphill battle in appealing a finding by a trial judge about spousal status. The trial judge has heard all of the evidence and is in the best position to assess credibility and make the necessary findings to determine whether a spousal relationship exists. The findings are entitled to a considerable degree of deference, and that is what happened in Mother 1.

The trial judge observed that the definition of a “marriage-like relationship” is an “elastic one”, which requires a multi-faceted analysis. There are numerous factors to consider. The Court of Appeal held that it would be inappropriate to re-weigh 14 days of trial evidence and substitute its view of the evidence. Credibility played an important role in the assessment of the evidence, and the trial judgeis in a far better position to make this assessment. The trial judge properly instructed himself on the legal test for a marriage-like relationship, and then considered and applied that test in a “fact-intensive case in which credibility played an important role.”

The decision also includes an interesting discussion about sealing orders and publication bans in estate litigation matters. The Court referred to the recent decision of the Supreme Court of Canada in Sherman Estate v. Donavan 2021 SCC 25, which I have previously discussed here. The Court held that the risks alleged in Mother 1 (as the basis for a sealing order) are risks faced by all individuals who find themselves and their children involved in appeals that proceed in open court and involve claims to substantial sums of money. A mere assertion of harm is not sufficient. The test for a sealing order requires the serious risk to be well grounded in the record or the circumstances of the particular case.   The Court dismissed the application for a permanent sealing order, but the parties were at liberty to replace unredacted materials in the court file with redacted copies, in a manner consistent with a publication ban.

B.C. Case Comment: Resulting Trust – Transfer of Real Property into Joint Ownership not intended to be Irrevocable

December 10, 2021

The transfer of property into joint ownership, whether it be real property, bank accounts, or other assets, is a common estate planning tool.  Property is often transferred into joint ownership so that it passes to the surviving joint owner outside of the original owner’s estate.  In B.C., you are permitted to put your property into joint ownership to avoid probate fees and potential wills variation claims.  However, disputes still arise with respect to what a deceased person intended when they transferred their property into joint ownership.

The B.C. Supreme Court recently considered this issue in Di Giacomo v. Di Giacomo 2021 BCSC 2313.  In Di Giamoco, the will-maker had two sons.  In 2000, he made a will dividing his estate into three equal shares, one for each of his two sons, and one for his brother.  The evidence was that he did so because (1) he appreciated that his brother provided him with assistance, and (2) he was unhappy with certain behavior of his sons.

The deceased met with a lawyer to prepare and sign the will.  At this meeting, the lawyer explained that if the deceased transferred his real property into joint ownership with his sons and his brother, then (1) he would avoid paying probate fees on this asset, and (2) his sons could not challenge his will, insofar as the real property was concerned.  The deceased transferred title to the property to himself, his sons, and his brother in joint tenancy.

In 2003, the deceased changed his will.  Under the terms of the new will, except for a $500 bequest to his wife, his estate was to be divided equally between his two sons.  His brother would no longer receive anything under his will.

The issue was whether the deceased intended to irrevocably gift the real property in 2000 to his sons and brother in equal shares, or whether the property is held in resulting trust for the estate.

The Court identified the three possibilities when property is put into joint tenancy:

  1. The creation of a true joint tenancy, in which each of the joint tenants is an owner of the whole, with each enjoying the full benefit of property ownership, and with the ultimate survivor enjoying the whole title;
  2. The creation of a resulting trust, where only one joint tenant owns the beneficial interest and the other holding the title in trust for the other with no beneficial interest; and
  3. A gift of the right of survivorship, where a joint tenant is gratuitously placed on title with no beneficial interest in the property until the death of the donor.

Where there is a gratuitous transfer of land to an independent adult child, the presumption of resulting trust applies.  The donee (in this case the brother) must establish, on a balance of possibilities, that the deceased intended to make an irrevocable gift at the time of the transfer.  It should be noted that the donor may intend to gift the right of survivorship, but continue to deal freely with the property throughout their lifetime.

In Di Giamoco, the Court held that the brother failed to prove that the deceased intended to irrevocably gift the right of survivorship.  The evidence regarding the deceased’s intention was “at best, indecisive.”  The court was not convinced that the deceased was fully informed of the consequences of transferring the property into joint tenancy.  The Court observed that the deceased’s English was limited, and he was relying upon a translation of the discussions into Italian.  There was no evidence that the lawyer specifically advised the deceased that the transfer would be irrevocable.  The Court also relied upon the fact that the deceased changed his will three years later to provide for his sons and not also his brother, and the evidence indicated that he believed this would include the real property.

This case serves as a reminder that there are pitfalls when using a transfer into joint ownership as an estate planning tool.  The donor/deceased’s intentions must be clear, and they must be fully informed and understand the effect of the transaction.