One of the reasons people pursue wealth is to render themselves, and their loved ones, less vulnerable. Wealth can protect against unhappy contingencies and mitigate ill fortune, such as loss of employment, sickness, or the death of a provider. With COVID-19, some of the most adversely-affected Canadians are those without any economic cushion to fall back upon. Wealth, however, can also make people more vulnerable, for it can draw the jealous attention of unscrupulous have-nots, as evidenced by the abundance of greed-fuelled elder abuse and power of attorney predation. Our legal system, therefore, has developed safeguards against the improper use of an incapable person’s funds – and as a recent New Brunswick decision demonstrates, as well as checking bad actors, these safeguards also apply to the more innocent missteps of parties with apparently good intentions.

In Public Trustee v. Morley, [2020] N.B.Q.B. 18, the Public Trustee in charge of an infirm person, Norma Morley, sought the Court’s authorization to transfer Norma’s house to her adult daughter, Patricia Morley, on the pretexts that Patricia “suffer[ed] from mental issues that prevent[ed] her from leaving [Norma’s] home” and that Norma, who resided in a nursing home, “ha[d] assets that [could] provide for her maintenance other than the house”. Ostensibly, the Public Trustee’s request was reasonable, for the statute – subsection 13(1) of the Infirm Persons Act – allows for an infirm person’s representative to provide for the infirm person’s dependants, and at first glance, Patricia qualified as a dependant.

The Court denied the request, however, finding that the proposed gift was not in the best interests of Norma. In coming to this decision, the Court was guided by several considerations: (1) it was uncertain whether there were enough assets to provide for Norma following the gift; (2) the proposed gift was at odds with Norma’s Will; (3) Norma had not made similar gifts in the past, when she was capable; (4) there was no evidence tendered as to Patricia’s needs and means; and (5) Patricia’s needs are secondary to Norma’s. On this last point, other than the house, Norma had approximately $70,000 in assets – a thin and precarious economic cushion.

If this case had been adjudicated in Ontario, we could expect a similar result. Subsections 37(1) and 37(2) of Ontario’s Substitute Decisions Act, 1992 dictate that an incapable person’s property can be used to support dependants, but expenditures on behalf of dependants are conditional upon sufficient property remaining to provide for the incapable person. Subsections 37(3) and 37(4) allow for a guardian of property to make gifts to the incapable person’s relatives if, again, enough property remains and there is reason to believe the incapable person, if capable, would make such gifts. In this case, insufficient property remained to justify a gift and there was no reason to believe Norma would have gifted her house to Patricia, for her prior conduct and Will suggested otherwise.

The Public Trustee’s position was unenviable – trying to stretch limited means to cover two vulnerable people – but the cure proposed ran counter to Norma’s previously expressed wishes as well as leaving her exposed to mischance.

Thank you for reading – Have a great day!

Suzana Popovic-Montag and Devin McMurtry