Tag: incapable person
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,  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.
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Suzana Popovic-Montag and Devin McMurtry
The Court of Appeal of British Columbia (the “BCCA”) recently dealt with an appeal from an Order of the British Columbia Supreme Court which declined to exercise jurisdiction by staying a petition for guardianship of an incapable person. This Order also included various terms relating to the person’s care and property.
This appeal dealt with the guardianship of Ms. Dingwall, the mother of both the Appellant and the Respondent.
At all material times, Ms. Dingwall and the Appellant lived in Alberta and the Respondent resided in British Columbia. Between 2010 and 2014, Ms. Dingwall resided for various periods in both Alberta and British Columbia. At the time of this appeal, Ms. Dingwall lived in a care home in British Columbia. She suffered from advanced dementia.
The Alberta Proceedings
On February 5, 2015, the Appellant sought an Order from the Alberta Court of Queen’s Bench appointing him as Ms. Dingwall’s guardian and trustee. The Respondent opposed this Order and in September, 2015 filed an Application to move the proceedings to British Columbia. This Application was never heard and the matter continued to be heard in Alberta.
On July 7, 2016, the Court granted the Order sought by the Appellant which appointed him as Ms. Dingwall’s guardian and provided him with the authority to make decisions with respect to Ms. Dingwall’s health care, the carrying on of any legal proceeding not related primarily to Ms. Dingwall’s financial matters and Ms. Dingwall’s personal and real property in Alberta.
The British Columbia Proceedings
A few weeks prior to the Alberta hearing, the Respondent filed a petition with the Supreme Court of British Columbia seeking a declaration that Ms. Dingwall was incapable of managing herself or her affairs due to mental infirmity and an Order appointing her as committee of Ms. Dingwall’s person and Estate. The Appellant opposed the Respondent’s petition by arguing that the Supreme Court of British Columbia lacked jurisdiction.
The Supreme Court of British Columbia asserted jurisdiction because Ms. Dingwall was at the time of the decision, ordinarily resident in British Columbia and because there was a “real and substantial” connection to British Columbia. The Court found that, in this case, both Alberta and British Columbia had jurisdiction.
Despite British Columbia having jurisdiction in this case, the Court found that the Alberta forum was nonetheless more appropriate and cited the following factors in favour of its decision:
- The similarity of the proceedings;
- Alberta having issued a final order; and
- The Respondent having attorned to Alberta’s jurisdiction by opposing the Appellant’s petition.
As a result, the Court stayed the Respondent’s petition but also made several Orders respecting Ms. Dingwall’s care and property. The parties’ costs on a “solicitor client basis” were to be payable by Ms. Dingwall’s Estate.
The Appellant appealed the following Orders made by the Court, other than the stay of the Respondent’s proceedings:
- issuing an Order on the matter after declining to exercise jurisdiction respecting it;
- finding the Court had territorial competence over the matter; and
- awarding solicitor-client costs payable from Ms. Dingwall’s Estate.
The BCCA Decision
The BCCA allowed the appeal and found that the lower Court erred in making Orders concerning the very matter over which it had declined to exercise jurisdiction. The Court noted that a decision to decline jurisdiction over a particular matter renders a judge incapable of deciding issues or making orders as to the substance of that matter.
As a result, the Court set aside the Orders respecting Ms. Dingwall’s care and property. In light of that finding, the Court of Appeal found it unnecessary to deal with the issue of whether British Columbia had territorial competence over this matter, given that the lower Court declined to exercise jurisdiction, in any event.
The Court of Appeal found that the Appellant was entitled to special costs payable by Ms. Dingwall’s Estate and that the Respondent was not entitled to costs.
The full decision can be found here: Pellerin v. Dingwall, 2018 BCCA 110
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It is trite law that an executor administering a deceased persons’ estate has an obligation to account to the beneficiaries. The law is a bit more complex when an attorney for property is applying to the court to account for his/her administration of an incapable person’s affairs.
Rule 74.18(3) of the Rules of Civil Procedure provides that service of the application material is required on persons who have “a contingent or vested interest in the estate”. Because a will speaks as if it was made immediately prior to the death of a testator, a beneficiary has no financial interest until the testator dies, the result being that in an accounting for the administration of the assets of an incapable person, only the incapable person him/herself has a contingent or vested interest in the assets.
Although it may seem inadequate that an attorney would be required to serve the grantor and no other family members, as an incapable person will arguably not have the wherewithal to level objections in respect of the administration, keep in mind that the welfare of the grantor is already being safeguarded by the Public Guardian and Trustee (who must also be served with the court material) and a litigation guardian who may be appointed within the context of the accounting application to protect the interests of the grantor.
Couple the above with the strict duty of confidentiality and privacy owed to an incapable person by the attorney, as set out in the Substitute Decisions Act, 1992 (Regulation 100/96), and we have a protective framework when dealing with disclosure of financial affairs of living persons.
This makes total sense to me. However, it may come as an unwelcome surprise to an adult child who, for instance, learns that she does not have an automatic right to receive disclosure of her incapable parents’ finances. Feeling unfairly shut out, she may consider seeking the court’s assistance.
Although she can apply to the court for leave to compel an accounting, the prevailing view of the court is that a person’s privacy is paramount such that leave should be granted sparingly. In a prior blog on the subject, my colleague Umair Abdul Qadir cited the Groh v Steele decision, where the Court makes an important pronouncement on this point, stressing that leave should not be granted absent the applicant establishing an interest (at least indirectly) in the affairs of the grantor, and some evidence that the attorney is not properly handling the administration.
Thanks for reading and have a great day,
Some other blog posts on this and related subjects that may appeal to you are:
This week on Hull on Estates, Natalia Angelini and Doreen So discuss the issues surrounding a client’s capacity to instruct counsel.
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
Listen to the Health Care Consent Act.
This week on Hull on Estates, Megan Connolly and Sean Graham review the Golubchuk case out of Manitoba and discuss the Health Care Consent Act of Ontario.