Presumptions of Resulting Trust and Undue Influence in MB Case

Presumptions of Resulting Trust

The deceased’s mother died intestate.

At date of death, a number of monies were in joint accounts bearing names of deceased,daughter L and granddaughter R

L took more interest in deceased than did daughter M and cared for her during last years of her life

The deceased and M were not estranged , while the relationship between L and M ( the sisters) was distant.

M was happily married and financially secure, while L was not

M as administratrix of estate brought action for monies in joint accounts to accrue to deceased’s estate.

The Court  allowed the action as monies held in joint accounts were held on resulting trust for deceased’s estate, and there was a presumption of undue influence that was not rebutted.

L was unable to establish that the joint accounts were gift from deceased.

A Presumption of undue influence arose because L had opportunity to influence deceased .

The deceased was elderly with physical disabilities and depression, and lived in L’s home .

The presumption of undue influence was not rebutted .

Historically, there was equality of treatment by deceased and her husband towards daughters .

L’s ill will toward M may have influenced deceased’s feelings toward M.

L was involved with all of deceased’s investment transactions.the deceased did not sign many documents relating to joint accounts.

Without evidence that deceased was independently advised of these transactions, it was not assumed that deceased intended that one daughter was to be disinherited by them .

The Courts’ analysis is as follows. Besides the two Supreme Court of Canada cases, they also cited an American decision, which is quite rare in Canadian law.

The law regarding the use of a joint account as a method of devising property upon a donor’s death has recently received the attention of the Supreme Court of Canada in the case of Pecore v. Pecore, 2007 SCC 17 (S.C.C.), and Saylor v. Madsen Estate, 2007 SCC 18 (S.C.C.). Essentially, the basic principles are that where the other joint holder is an adult child of the person who is providing the monies, the opening of the account is to be characterized as a gift made at the time that the monies are placed into the account. Since they are a gift, prima facie, the monies are deemed to be the subject of a resulting trust back to the donor unless the donee can demonstrate on a balance of probabilities that the donor intended the monies to be a gift. It essentially boils down to a question of the donor’s intent and whether the donee has overcome the onus of proof. The proof of intent would need to include the existence of a desire on the part of the donor that the monies are to accrue to the donee upon the donor’s death, rather than simply a desire that the donee only administer the funds during the donor’s life.

” 29     There is another presumption that may enter into the mix in this case. That is the presumption which is applicable to gifts made in circumstances where the donee has the opportunity to unduly influence the mind of the donor. This presumption was set out in the judgment of Wilson J. in the case of Goodman Estate v. Geffen, [1991] 2 S.C.R. 353, [1991] S.C.J. No. 53 (S.C.C.). In that case, Wilson J. outlined the need to examine first the relationship that existed between the donor and the donee. If that relationship allowed for an opportunity on the part of the donee to influence the donor, then a presumption of undue influence arises. As to the degree of influence, Wilson J. said, at para. 40:

It seems to me rather that when one speaks of “influence” one is really referring to the ability of one person to dominate the will of another, whether through manipulation, coercion, or outright but subtle abuse of power.

30     Wilson J., further went on to say:

45 Once the plaintiff has established that the circumstances are such as to trigger the application of the presumption, i.e., that apart from the details of the particular impugned transaction the nature of the relationship between the plaintiff and defendant was such that the potential for influence existed, the onus moves to the defendant to rebut it. As Lord Evershed M.R. stated in Zamet v. Hyman, supra, at p. 938, the plaintiff must be shown to have entered into the transaction as a result of his own “full, free and informed thought”. Substantively, this may entail a showing that no actual influence was deployed in the particular transaction, that the plaintiff had independent advice, and so on. Additionally, I agree with those authors who suggest that the magnitude of the disadvantage or benefit is cogent evidence going to the issue of whether influence was exercised.

31     The reasoning for such a presumption is to ensure that people in dependent circumstances are not taken advantage of by those upon whom they are dependent. Not every case of an elderly person making a gift to an adult child will occur in circumstances of dependency. However, where such circumstances of dependency do occur, placing the onus upon a donee is the law’s way of protecting against unfair transactions.”

Unsigned Draft Will Refused Probate

The only thing surprising about this decision from a British Columbia perspective is that it actually proceeded to court.

The solicitor prepared the draft will and advised the deceased in writing that she was to make an appointment to come in and sign it.

The deceased never did execute the draft will, and despite this, her relatives brought application for admission into probate of the unsigned document, purporting it to be her last will and testament.

The application for probate was dismissed.

The court ruled that a draft will could not be admitted to probate as it would fail the proper requirements of execution.

In Saskatchewan there needs to be at least some attempt at execution of a formal will.

It was not clear to the court that the document express the final wishes of the deceased, as the document was specifically noted as being draft subject to revisions.

There was no evidence that the deceased was confused as to the need to sign the will, as the solicitor’s letter was clear and unequivocal as to the requirement for further action on the part of the deceased.

Words “Born After” Interpreted

Born after“Born After” Interpreted in Two Express Trusts

Turk v Turk 2011 ONSC 6497 dealt with the various rules of construction and interpretation of the words“born after the date of the settlement” that were used in to family trust settled by a grandmother in 1992 and 1996, for the benefit of her two sons families.

One of the sons remarried after a divorce, and adopted two children who were 18 and 17 years of age at the time of their adoption.

Both were clearly born before, and not after,  the date that the trust was settled.

The two sons brought an application to have the terms of the trust interpreted, which resulted in the adopted children not being  beneficiaries of either trust.

After analyzing some of the general rules of interpretation, the court found that there was no ambiguity in the clause “born after the date of this settlement”, and that the words “born after” in particular,  meant exactly what they said, and had no other natural meaning.

Some of the principles used by the court are as follows:

 

  • All parties agree that there is no Canadian case law, which is on all fours with the issues in the interpretation of these Trusts. One firstly looks at the Settlor’s intention as ascertained from the four corners of the Trust Settlements themselves and from the Trusts as a whole and not solely from the words used. See: James MacKenzie, Feeney’s Canadian Law of Wills, 4th ed. Looseleaf (Markham: LexisNexis Canada Inc., 2000) at para. 10.60.

 

  • Feeney’s, also says that if a Trust Deed describes a certain person with sufficient certainty to enable a Court to recognize the person intended by the settler, the Court will overlook the inaccuracy in the rest of the description. In my view, this principle cannot apply to the Trusts in question. Such descriptions relate to a beneficiary’ name, which is incorrectly spelled or misdescribed, such as a charity’s name. It can also apply when a testator or settlor describes someone as “my niece Ann Smith”, but that person is not blood-related to the testator or settler and whose name is actually “Anne Smith”, not the name shown in the document.

 

  • I have also reviewed the wording of Feeney’s in paragraphs 10.61,10.62,10.67,10.69, 10.71,10.80, 10.98,11.14,11.1,11.12,11.29 and 11.33.1 cannot see where any of these propositions apply to the wording of the Trusts. The clause in the Trusts is worded, “…and any other children of Jonah Turk born after the date of this Settlement, and the issue of such children”. There is nothing in this clause that is ambiguous or capable of two constructions. The words “born after” mean exactly what they say.

 

  • Nor can I find that the Settlor’s intention is not clearly expressed in the words used in the Trusts. The words “born after” cannot have any other meaning than their natural meaning.

There is no doubt as to the meaning of the words “born” and “after”. Any natural children Jonah may have in the future, and any infants or other children he may adopt who were born after the dates of the Settlements, would be included in the class described in the Trusts. Nor can I see where the Settlor had a general intent other than what the words themselves say in the Trusts.

There is no indication that she contemplated her son, Jonah, adopting adult persons or children who were almost adults and born “before” the dates of the Settlements, so that they would now be included in the classes of beneficiaries named in the Trusts.

  • The construction of the words of the Trusts is neither unjust nor absurd nor does the rule against disinheritance apply, as outlined in Feeney, in para. 10.80. The words “Jonah’s Family”, while now including his adopted children, is not a conflicting provision to “born after”. A conflicting provision must arise in the original wording of the Trust Deed, so that it is conflicting throughout the time from the Trust’s settlement date to the date of the interpretation. That is not the case here. The problem only arose when Jonah adopted persons born after the dates of the Trusts.

 

  • On the question of what is the Settlor’s intention, I adopt the traditional view on the interpretation of trusts as summarized in Lewin on Trusts 18th ed., John Mowbray et al., (Toronto: Thomson Sweet & Maxwell, 2008) at 200-201:

“Lifetime settlements are no different from other documents in that the subjective intentions of their authors are irrelevant. What counts is that the objective meaning that the words of the document convey to the court when considered as a whole in light of the surrounding circumstances.”

The intention that the court seeks is the intention as expressed; that is, the way in which the document is to be understood, not the purpose, motive, desire or other subjective state of mind of the settlor. The reason for the rule is that, otherwise, no lawyer would be safe advising on the construction of a written instrument, nor any party in taking under it.

 

Resulting and Constructive Trust Claims Dismissed

Resulting and Constructive Trust Claims Dismissed

Both the plaintiff’s claims of resulting trust and constructive trust( unjust enrichment), were dismissed in Chambers v Chambers 2012 BCSC 88

The facts of Chambers were blogged yesterday, as was the younger brother’s claim for an express trust, also dismissed.

Todays blog centres around the plaintiff’s two other two arguments, that of resulting trust and constructive trust , and why each of those claims also failed.

After analysing all of the three trust claims brought by the plaintiff, the court had no difficulty in finding that the defendant intended to gift the younger brother only 1% of the equity in the house and to be irrevocably bound by that gift.

It was clear that the younger brother was only to have a minimal ownership stake in the house right from the outset, despite the older brother having initially having contemplated putting the property in joint tenancy, or letting the plaintiff claim the home owner grant.

The excerpts from the court with respect to the issues of resulting trust and constructive trust are as follows:

 

Resulting Trust

[29]    Fred argues that the equity in the house should be subject to a resulting trust on the basis of a common intention. The common intention resulting trust is somewhat different from the ordinary resulting trust. Normally a resulting trust arises where the objects of a trust fail to be exhausted or there is a gratuitous transfer that is not proven to be a gift. In these circumstances, the resulting trust operates to return the asset in question to its original owner, as equity presumes bargains rather than gifts.

[30]    The presumption of resulting trust is discussed in the recent Supreme Court of Canada case of Pecore. That case makes it clear that the court will begin with the applicable presumption and then on a balance of probabilities attempt to ascertain the transferor’s actual intention. This traditional type of resulting trust has no application here as Fred is not asking the court to return an asset to him that he transferred to Al.

[31]    Fred argues that the much less common type of resulting trust, the common intention resulting trust, applies. The common intention resulting trust arises where two parties share an intention that a property be jointly owned in light of joint contributions even though the property is held in the name of only one of the parties.

[32]    This trust was discussed in one of the cases submitted by Fred, Opperman v. Andersen,

2009 BCSC 992. However, the jurisprudence in this area had become confusing and

contradictory and the Supreme Court of Canada, in the recent case of Kerr v. Baranow, 2011

SCC 10 [Kerr], stated that the common intention resulting trust is “doctrinally unsound”,

elaborating at para. 25:

First, as the abundant scholarly criticism demonstrates, the common intention resulting trust is doctrinally unsound. It is inconsistent with the underlying principles of resulting trust law. Where the issue of intention is relevant to the finding of resulting trust, it is the intention of the grantor or contributor alone that counts. As Professor Waters puts it, “In imposing a resulting trust upon the recipient, Equity is never concerned with [common] intention (Waters’, at p. 431).” The underlying principles of resulting trust law also make it hard to accommodate situations in which the contribution made by the claimant was not in the form of property or closely linked to its acquisition. The point of the resulting trust is that the claimant is asking for his or her own property back, or for the recognition of his or her proportionate interest in the asset which the other has acquired with that property. This thinking extends artificially to claims that are based on contributions that are not clearly associated with the acquisition of an interest in property; in such cases there is not, in any meaningful sense, a “resulting” back of the transferred property: Waters’, at p. 432. It follows that a resulting trust based solely on intention without a transfer of property is, as Oosterhoff puts it, a doctrinal impossibility:”… a resulting trust can arise only when one person has transferred assets to, or purchased assets for, another person and did not intend to make a gift of the property”: p. 642. The final doctrinal problem is that the relevant time for ascertaining intention is the time of acquisition of the property. As a result, it is hard to see how a resulting trust can arise from contributions made over time to the improvement of an existing asset, or contributions in kind over time for its maintenance. As Oosterhoff succinctly puts it at p. 652, a resulting trust is inappropriate in these circumstances because its imposition, in effect, forces one party to give up beneficial ownership which he or she enjoyed before the improvement or maintenance occurred.

[33] While the Supreme Court of Canada in Kerr, which is a case involving a common-law relationship, was clear that the common intention resulting trust has no further role to play in domestic cases, arguably it is still applicable in the present case.

[34]    The burden to demonstrate that a common intention existed to share the property rested with Fred. He has not discharged it. It is not enough that Fred says that at one time Al may have considered registering the house 50% in his name. Al’s actions, in discussing the matter with his lawyer and in registering the house 99% in his own name, clearly evidence an intent to do exactly the opposite. If Al had shared a common intention with Fred that the two should be joint 50/50 owners of the house, then he could have easily accomplished this by registering the house 50% in each party’s name.

[35]    This is not a situation where a property was originally registered in the name of one party with an intention to share the property subsequently arising, as is often the case in domestic relationships. Here, Al made an affirmative decision as to what share he would give to Fred. As the Supreme Court of Canada said in an earlier case dealing with common intention resulting trusts, Pettkus v. Becker, [1980] 2 S.C.R. 834; a common intention cannot be attributed to the parties where such an intention was negated by the evidence (at p. 847). Here, on the evidence, no common intention to equally share ownership of the House existed.

Constructive Trust

[36]    Fred argues in the alternative that he is not found to be the beneficiary of an express trust or a resulting trust, that the court should impose a constructive trust on 50% of the equity in the house as Al has been unjustly enriched. In order to succeed in an unjust enrichment claim, Fred would need to prove that Al has been enriched, that he, Fred, has suffered a corresponding deprivation, and that there is no juristic reason for the enrichment and deprivation.

[37]     The Supreme Court of Canada in Kerr said the following with respect to the first stage of the analysis:

The Court has taken a straightforward economic approach to the first two elements -enrichment and corresponding deprivation. Accordingly, other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reason stage of the analysis: see Peter, at p. 990, referring to Pettkus, Sorochan v. Sorochan, [1986] 2 S.C.R. 38, and Peel, affirmed in Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 31.

For the first requirement – enrichment – the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (Peel, at pp. 788 and 790; Garland, at paras. 31 and 37).

Turning to the second element – a corresponding deprivation – the plaintiffs loss is material only if the defendant has gained a benefit or been enriched (Peel, at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (Pettkus, at p. 852; Rathwell, at p. 455).

[38]    Fred has not demonstrated either of these requirements. Al has been enriched only in the sense that a property that he bought himself has appreciated, but this appreciation has not come about as a result of any action taken by Fred. On the evidence, Fred has not made any monetary contribution to the maintenance of the house, aside from paying the property tax for a number of years. However, during this time, he also did not have to pay rent. Fred’s argument that by paying property taxes, which amounted to significantly less than normal rent would have been, he was somehow deprived and Al enriched is without merit.

[39]    If the payment of property tax amounted to an enrichment and corresponding deprivation, I would find that there to be a juristic reason. One of the established categories of juristic reason is contractual (Kerr at para. 41). It is clear on the evidence that Fred only paid the taxes as consideration for being allowed to live in the house rent-free. There was a contractual intent between the two brothers, with Fred receiving 1% of the house equity as well as sole occupancy privileges in exchange for paying property taxes.

disinherited.com is of the opinion that this case has been correctly decided and it should perhaps be pointed out that the plaintiff acted on his own behalf without counsel. I think it was simply an example of a somewhat ungrateful sibling reaching too far for something that he was never entitled to in the first place.

What Is an Express Trust?

What Is an Express Trust?

Chambers v Chambers 2012 BCSC 81 involves  litigation between a 90-year-old brother and his younger 79-year-old brother regarding the percentage of ownership in a house that the older brother  (A)  purchased so that the younger brother ( B)  could live in.

The house was purchased in 2005 by A with his own money.

The idea was that brother B would have a place to live until he died.

A  had initially told B that he would register the house in joints tenancy, but after meeting with a lawyer, he subsequently told B that he would give him 1% interest on title as a tenant in common, which he did.

In 2010 the house was sold over the objections of B who refused to sign the sale documents because he objected to receiving only 1% of the sale proceeds.

By agreement one half of the sale proceeds were held by a lawyer while B brought an application to court for a finding that 50% of the sale proceeds of the home were held in trust for him.

His application was dismissed and he was only entitled to 1%.

His first argument was that of  Express Trust, and this was dismissed on the basis of no evidence of such a trust:

 

An express trust requires a settlor, a beneficiary, a trust corpus, words of settlement, certainty of object and certainty of obligation.

In order for an express trust to arise there must be certainty of intention, subject matter and object. There must also be a transfer of property to the trustee

In order to create an express trust in circumstances such as these, the three requisite certainties must be present.

In Saugestad v. Saugestad, 2006 BCSC 1839, the Court said the following at para. 82:

The requirements for the creation of an express trust include the three certainties:

1) the language of the settlor must be imperative,

2) the subject matter or trust property must be certain,

3) and the objects of the trust must be certain

Body Snatching Has A Long History

American news this week reported that a woman’s body had been stolen from her grave 16 years after she had been laid to rest in a New Jersey cemetery.

She had been 98 when she had been entombed inside a family mausoleum alongside four other family members.

The extensive mausoleum had been accessed by people who came with the necessary tools and intent to break in.

Whereas family members and the public at large were dumbfounded as to what had occurred, there had been many similar incidents in 2006 when the CEO of a New Jersey human tissue recovery firm, and head of a large body snatching ring was arrested.

He and his employees had netted millions of dollars illegally harvesting human bones, organs, tissue another cadaver parts from more than 1000 individuals awaiting cremation.

In fact there is a long history of body snatching largely throughout the world, including Canada until it was abolished by legislation, which initially was the Anatomy Act of 1832 in England.

Prior to that it was very common for grave robbers/body snatchers to dig up the remains of the deceased, primarily for the sale of the human remains for anatomy studies.

A famous incident occurred in Québec during the Montréal winter of 1875 when a typhoid fever struck at a convent school.

The corpses of the victims were stolen  by body snatchers before relatives arrived causing an international scandal.

The Anatomy Act of Québec was shortly thereafter brought into effect.

Prior to the introduction of this legislation the only legal supply of corpses for anatomical purposes where those condemned to death by the courts. There was always a substantial shortage of corpses for medical purposes.

It must also be remembered that this was prior to the supply of refrigeration and bodies would decay rapidly and become unusable for study.

Historically the body snatchers were not severely punished as it was treated as a misdemeanour.

The robbers would be careful not to steal items of value such as jewelry from the tomb, as that was a far more serious offense that was often punishable by death.

Precatory Words Are Not Binding In Wills and Trusts

 

wish-precatoryIn the law of wills and trusts, precatory words have been defined as words of wish, hope, desire or entreaty accompanying a gift, that the done will dispose of property in some particular way, which may show that a trust was intended.” [At para. 25.] Ladd v. Ladd (2002), 47 E.T.R. (2d) 251, 2002 CarswellOnt 3608 (Ont. S.C.J.).

There are many case examples where such words as “wish, desire, hope, ” are found to be precatory and thus legally non binding.

These words of expression only can be  juxtaposed against legally enforceable words such as “shall or must” and other mandatory words.

 

Rudaczyk Estate v. Ukrainian Evangelical Baptist Assn. of Eastern Canada (1989), 1989 CarswellOnt 534, 69 O.R. (2d) 613, 34 E.T.R. 231, Watt J. (Ont. H.C.) is a good example of this principle.

 

By her will dated September 28, 1981, the testatrix gave the residue of her estate to her trustees on trust to “pay or transfer” it to the Ukrainian Evangelical Baptist Association of Eastern Canada “for its own use absolutely”.

The will also gave to the trustees the various powers set out in a “Schedule Of Trustee’s Powers” which was initialed, attached to and expressly made part of the will.

By a “Memorandum To Trustee” which was signed by the testatrix in the presence of the same two witnesses as the witnesses to the will and which was dated September 28, 1981 the testatrix stated the following:

IT IS MY WISH that you set aside one-quarter of the residue of my estate for the benefit of my niece, [M.K. in the Ukraine] … and use this sum for the purchase and mailing of food, clothing, and other articles as my said niece, may request and you in your absolute discretion shall think fit.

The “Memorandum” was not referred to in the will. ( underlining added for emphasis)

The testatrix died in 1987 and letters probate were issued to the executors of her estate including both the will and the “Memorandum”.

The executors sought the opinion, advice or direction of the Court as to whether the memorandum was legally binding on the trustees or was merely precatory.

The preliminary issue arose as to the admissibility of the affidavit evidence of two persons which evidence related to the making of the will and the “Memorandum”.

Held:

(1) The affidavit evidence relating to the making of the will and memorandum was not admissible since it fell within the general exclusionary rule forbidding the introduction of direct extrinsic evidence of a testator’s actual intention and there was nothing which took the affidavit evidence out of the general rule.

(2) Although the “Memorandum” was executed in accordance with the requirements for making a will, it was to take effect after the testatrix’s death, and contained provisions relating to the disposition of the deceased’s property, its permissive language (particularly when contrasted with the imperative terms used in the will) and its existence as a separate document from the will indicated that it was merely precatory and not legally binding on the trustees

Severance of Joint Tenancy By Power of Attorney Upheld

Severance of Joint Tenancy by aseverance, the movie Power of Attorney Upheld

 

Houston v Houston Estate 2012 BCCA 300 upheld the severance of the joint tenancy through the use of a power of attorney despite the fact that the attorney.

stood to gain financially in a subsequent wills variation action which he only had by reason of the severance of the joint tenancy, thus creating a tenancy in

common of half the house, which formed the only asset in the estate of the deceased.

disinherited.com finds the decision somewhat surprising and opines that this is because of two reasons:

A. The findings of fact by the trial judge which will be set out here after;

B. The fact that the principal of the power of attorney agency agreement was mentally competent and the court found that the attorney was carrying out his estate wishes.

disinherited.com further opines that had the deceased not been competent, that the court would have decided the decision differently and upheld the joint tenancy.

 

A Central Issue Was the Use of the Power of Attorney a Breach of Fiduciary Duty?

 

“The trial judge noted the following passage from Egli v. Egli 2004 BCSC 529, in which Madam Justice Garson (then of that court) had stated:

It is the attorney’s duty to use the power only for the benefit of the donor and not for the attorney’s own profit, benefit or advantage {Chapman). The attorney can only use the power for his or her own benefit when it is done with the full knowledge and consent of the donor (Robertson, Mental Disability and the Law in Canada at 183). I am not aware of any authority that detracts from this principle in circumstances where the benefit is conferred on family members.”

 

[54]  ”  There can be no doubt that a fiduciary who engages in ‘self-dealing’ or who receives a secret benefit or profit from a transaction carried out on the donor’s behalf, is accountable to the donor for such profit: see generally Fridman, supra, at 106-110. An obvious exception exists, however, where the donor consents to or authorizes the attorney’s acting as he or she has. This concept is encapsulated in s. 27 of the Property Law Act, which was quoted by the trial judge at para. 70 of her reasons:

Attorney cannot sell to himself or herself

27       A sale, transfer or charge to or in favour of himself or herself by an attorney

named in a power of attorney, of land owned by the principal and purporting to be made under the power of attorney, is not valid unless the power of attorney expressly authorizes it or the principal ratifies it.[Emphasis added.]

[55]    The trial judge found, correctly, that James Houston did not carry out a transfer “to or in favour of himself within the meaning of these provisions. The plaintiff argues, however, that by severing the tenancy, he “created an estate” for his father, since by the time he died, Dr. Houston Sr.’s only asset was the interest in the condominium. Title having been severed, that interest passed to his estate when he died. As the trial judge noted at para. 71 of her reasons, James Houston and his siblings have commenced an action under the Wills Variation Act- which they could not have done except for the severance. Obviously, they might benefit from James’ exercise of the authority granted to him.

[56]    The question of whether James Houston had his father’s authorization or consent to “create an estate” for him was again one of fact. In this case, the question was a delicate one that depended greatly on the credibility of James Houston and his sister, who also participated in the critical conversation with their father. The brother and sister were extensively examined and cross-examined about that conversation, and the trial judge realized its importance in the context of the law applicable to fiduciaries. She found that although the father had not specifically directed his son to use the power of attorney to sever the joint tenancy, he had “clearly instructed Dr. James Houston to use the power of attorney so that his estate would be preserved and his ultimate wishes fulfilled.” (Para. 89.) The trial judge has not been shown to have been wrong in reaching this conclusion or in finding that James acted so that his father’s wishes would be respected. The trial judge also accepted that before he made the appointment for his father to see Mr. Humphries in the fall of 2008, James had told Dr. Houston Sr. that if he, the father, was happy to “let things go the way they [were] going”, the Houston children were “happy with that. We were all well enough off.” But, he said, “Dad wasn’t. He said he [had] always been a man of fairness. He wanted things to go six ways to the family.” To be blunt, the fear of what Ms. Fowler and Mrs. Houston would do after Dr. Houston Sr.’s death put this plan into serious jeopardy.”

What Is a Power of Attorney and How Do They Work?

 

 

Power of Attorney (POA)

What Is a Power of Attorney?( POA)

The BC Court of Appeal decision in Houston Estate v Houston 2012 BCCA 300 raises a few very good legal issues relating to Powers of Attorneys.

disinherited.com will blog further about this appeal case, but for starters, the case has an excellent review on this particular type of ageny called an Attorney.

A power of attorney is a type of agency.

At common law, where an agency was granted by deed giving specified authority to the agent, it was called a “power of attorney”. In British Columbia, the Power of Attorney Act has modified the common law with respect to powers of attorney. (Like counsel before us, I refer to the Act as it stood in April 2009 when the power of attorney in this case was exercised. The Act has since been amended substantially.) The Act does not define what is a power of attorney but provided in s. 9 that a general power of attorney “may” be in Form 1 or Form 2 of the Schedule to the Act. Neither form required that the document be executed under seal (and neither instrument in this case was). The Land Title Act contains additional requirements that apply to any document tendered for registration that has been executed under a power of attorney, and requires the registrar to maintain an index of powers of attorney: see ss. 51-57.

Being a type of agency, the power of attorney is subject to various rules, some of which are codified in the Act, for the protection of the agent. As Professor G. Fridman notes in Canadian Agency Law (2009), although at common law a power of attorney was strictly construed, the ordinary rules of construction of documents are employed in determining the scope of the agent’s authority where the document is not under seal or where the authority is given orally. Thus Fridman writes:

If the document involved is not a deed, or the contract of agency is parol, the agent’s authority is to be construed having regard to the purposes of the agency, i.e., the surrounding circumstances and the usual course of the business in which the agent is concerned. In particular, where general words are used, they must be construed and understood in light of the usual course of the agent’s business.

Writing which contains the agent’s authority is of prime importance, but if there is any ambiguity about the wording of the agent’s authority then, as long as the agent acts in good faith and in accordance with a reasonable construction of his authority (if there is more than one possible), he will be considered to have acted within his authority, whether or not in fact what he did was what the principal intended he should do. [At 64.]

Sections 3 and 4(1) of the Power of Attorney Act reflect the common law’s concern for the agent whose authority has been terminated without his knowledge:

3           If an agent purports to act on behalf of a principal at a time when the agent’s

authority to do so has been terminated and

  1. the act is within the scope of the agent’s former authority, and
  2. the agent has no knowledge of the termination,

then, for the purpose of determining the liability of the agent for the act, the agent is deemed to have had the authority to so act.
4(1)      If

  1. the authority of an agent has been terminated, and
    1. a person who has no knowledge of the termination purports to deal with the principal through the agent,

then, for the purpose of determining the legal rights and obligations of the principal in relation to that person, the transaction is, in favour of that person, deemed to be as valid as if the authority had existed.

At common law, an agency normally terminates when the undertaking entrusted to the agent has been performed or where the agency was given for a stated period of time. An agency will also terminate if the subject matter of the agency is impossible of performance, or upon the death or insanity of either the principal or the agent while the agency is extant: Fridman, supra, at 123-28. In British Columbia, amendments to the Act in 1979 reversed the common law rule regarding the principal’s mental incompetence by providing the option of the “enduring” power of attorney: see s. 8(1), quoted above at para. 20.

Except where the agency is irrevocable (i.e., where the agent by deed or for valuable consideration has agreed to act on the principal’s behalf in order to protect an interest of the agent)the principal may unilaterally revoke or terminate the agency relationship, subject to its express terms. It seems clear that the agency is revoked by the giving of appropriate notice to the agent, and no prior warning is required at common law. ”

BC Estate Lawyer- Narcissistic Personality Disorders

Narcissitic Personality

Trevor Todd and Jackson Todd have over sixty years combined experience in handling contested estates, which often involve narcissi tic parents..

Repeated With The Permission of Peter Bloch  From His Blog response to our blog entitled “Personality Disorders In Estate Litigation”

“I found this article very interesting and also very much in line with my own experience working with people who involved in serious family disputes (sometimes, but not always related to inheritances).
The first of Accettura’s reasons is, in my experience, quite rightly stated first. It is, in the case of serious disputes, by far the most commonly present and by a long way the most intractable. People with personality disorders, itself a major psychiatric diagnosis, are often unwilling or unable to negotiate on a basis that to other people would seem “reasonable”.

Those with the so-called “cluster B” disorders are usually the least able to alter their positions and those with Narcissistic Personality Disorder are given to words and deeds that can astonish in their cruelty.

This last personality disorder, the narcissistic, is remarkably common, some believe more than 2% of the population would be diagnosed with it (people with the disorder will rarely submit themselves for diagnosis because they appear to suffer much less than their victims) and they are disproportionately, although by no means exclusively, male. It particularly lends itself to disputes about inheritances for several reasons.

Firstly, people with the disorder are frequently addicted to fantasies of unlimited success (in fact, it is one of the major diagnostic criteria) and more money can seem disproportionately important to them, even if they are already wealthy.

Secondly, people with the disorder are “devoid of empathy” (another diagnostic criteria) and so can be ruthless in pursuing their goals, whatever the human cost.

Thirdly, people with the disorder feel much superior to other people (part of the definition of “narcissism”) and have a sense of superior entitlement – why should the “little people” have things that they want?

Fourthly, people with the disorder have a great many stored up grievances against other people, particularly family members who may insist upon seeing them as they are and not as they would like to be seen (a particular narcissistic characteristic), and people with the disorder will not want to pass up an opportunity to get revenge for slights, real or perceived.
If you’ve made it through this little primer, you will understand why a disproportionate number of serious and intractable disputes over inheritances involve personality disorder.
This is a link here to a Wikipedia article on Narcissistic Personality Disorder http://en.wikipedia.org/wiki/Narcissistic_personality_disorder and this is a link to a short article that I’ve posted about the modern trend towards narcissism in society http://blochhealing.co.uk/narcissism-and-society.

I hope you’ll post this comment – I’ve taken some trouble! If you do, I’ll return later to make a few suggestions about how best to deal with these problems as family member or as legal representative.”
Submitted by Peter Bloch (not verified) on Sat, 05/19/2012 – 2:32am.