Vancouver Estate Claims – Have You Been Disinherited?

Keep on DisinheritingHave You Been Disinherited?

1. MENTAL CAPACITY

Legal test for capacity:
Banks v. Goodfellow 1870

must understand that a will is being made and that it disposes property on death;
must know the nature and extent of his property;

must understand who has an appropriate claim upon his property;
must be free of delusions that affect his decisions, ie, be of sound mind, memory and understanding;
Lager v. Poirier SCC

“the mind must be able to comprehend of its own initiative and volition” at the time that instructions to the lawyer are given;

However:
a will was recently upheld where the testator thought he was being poisoned by gases into his apartment, as he knew what he owned and what he wanted to do with his estate, and who he had to provide for;

Problems encountered:
– no standard method of assessing capacity
– variety of testing and types of causes of dementia
– problems testing due to language, customs, hearing or sight losses
– medical history/records important
– Dementia not well recognized even by doctors/health professionals or professionals
– people good at covering up, or having things done for them
– most people, including health care, underestimate degree of cognitive impairment
– well settled that a proper assessment cannot be done from superficial discussions – must be “probing of the mind”
– typical indications – short term memory loss, paranoid ideas to family, confusion, difficulty with self care/finances
– disorientation to time/person/place, problems recognizing, easily swayed in opinion

2. UNDUE INFLUENCE

This is an influence that is exerted over the mind of another that amounts to coercion of the other’s free will so as to control the other’s mind, ie, an extreme example is a cult leader.

– demented people are very vulnerable to mental pressure
– hard to prove, look for “suspicious circumstances” – a recent article listed 64 examples of such “suspicious circumstances”
– the propounder of a will has to prove proper execution of the will, knowledge and approval of its contents, and mental capacity where there are circumstances that are suspicious, rather than it being presumed that the testator knew and approved of the contents of the will
– individuals are frequently taken advantage of by care-givers, family, acquaintances, salespeople or power of attorney holders
– where there is a special relationship such as a doctor/patient, lawyer/client, care-giver, parent, child, etc., the B.C. Court of Appeal did in May 1998 rule that there is then a presumption of undue influence that shifts the burden to the defendant to disprove it.

3. WILLS ISSUES

Requirements of a valid will:

must be in writing
must be signed at the end by the testator, and witnessed by 2 or more individuals, all 3 signing in the presence of each of other
must purport to deal with the property of the testator

Common mistakes:
beneficiaries or spouses of beneficiaries cannot witness the will or the bequest is invalid
– marriage after the will is executed will revoke the will
– the witnessing procedures are frequently not properly carried out
– a failure to dispose of the estate or part of the estate
– using incorrect/vague/contradictory language
– using precise words such as “issue” or words such as “per stirpes” which have been interpreted by the Courts to have different meanings

4. WILLS VARIATION ACT

Under British Columbia law spouses and children of a deceased have the right to contest an estate on the basis that the deceased parent or spouse failed to “make adequate provision for their proper maintenance and support”.

In the near future a Court challenge will be made to the Wills Variation Act by a common-law spouse, who currently does not have the right to bring such an action.

There has been a hugh increase in the number of these claims, especially by adult children who have been disinherited.

Applies to any assets owned by the deceased that pass under a valid will and form part of the deceased’s estate – it does not apply to property that passes by right of survivorship such as a joint tenancy, insurance, or pensions where there are named beneficiaries and so forth.

The Court has a wide discretion to vary a will in any manner that it thinks just.

The Court may also take into account evidence of the testator’s reasons for not making adequate provision for the spouse or child that is contained in a statement in writing signed by the testator.

The action must be brought within 6 months from the date of the granting of Letters Probate.

The test with respect to a testator and his adult children is that of the “judicious parent”, and a parent has a moral obligation to provide for his or her children. If the children have estranged themselves, then the testator may not have to provide for the children. The test is that of the judicious parent or spouse, not necessarily a kindly one, as to what he or she should have to provide in order to discharge the marital or parental duty, having regard to both economic and moral considerations.

In a Supreme Court of Canada land mark decision Tataryn v. Tataryn 1994, a wife of 43 years was not adequately provided for in the deceased’s will. One son was provided for generously and another son was disinherited.

The Court found that it should search for “contemporary justice”. It held that a testator has a legal obligation to provide for his or her spouse, and only a moral obligation to provide for adult children. Legal obligations take priority over moral obligations. If there are sufficient assets, then both legal and moral obligations should be met.

The Courts acknowledge that a testator should be free to dispose of his or her assets as he or she sees fit, but the Court will interfere to vary a will where it is appropriate.

In Tataryn the Court held that as a minimum, the widow should get what she would have received had the parties separated, as well as some extra monies in the form of maintenance for her twilight years.

5. INTESTACY ISSUES

Since changed after WESA April 1,2014

See attached Glossary for the formula for the distribution of assets when a person dies without a will.

Separation of spouses for one year prior to death disqualifies the surviving spouse from taking deceased’s spouse estate on an intestacy.

6. GIFTS/RESULTING TRUSTS

This area of the law usually deals with a purported gift of an asset by one individual to another.

Resulting trusts arise in 3 instances:

where the individual gratuitously transfers the assets;
where the individual supplies all or substantially all of the purchase price;
where the individual puts his/her property into another’s name and the other person gave no consideration (ie, paid no monies);

The lack of consideration is the common element – the individual must therefore have intended the recipient to hold the asset in trust and that at some point it will go back to the transferor, as the law of equity assumes bargains not gifts. This presumption can be rebutted on a balance of probabilities but the onus rests on the volunteer to show that it was a gift. If the transferor and the transferee have a close relationship at the time of the transfer, the presumption is weakened and slight evidence will be required to rebut it. The evidence will be confined in time to the date of the transfer and may be written, verbal or circumstantial.

A resulting trust will not be presumed if the transfer was to a wife or child, then the onus will remain on the person who asserts the trust or was from a common-law husband to a common-law wife, or was from a father to a child (and presumably will include mother to child) or was from a step-parent to a step-child.

7. JOINT BANK ACCOUNTS

Generally when an account is opened in the name of 2 or more persons, if the holders are joint tenants, then the survivor has the right to the whole amount. However, in equity the beneficial title is the issue:

who has the right to the income and capital while both joint tenants are alive;
is there a right of survivorship;

Typically when both joint tenants have deposited monies into account, then the survivor is entitled to the proportionate deposits. Where only one of the joint tenants deposits money into the account, then a presumption of resulting trusts arise.

There are a number of decisions that have held that the bank document giving right to the purported right of survivorship is merely for a matter of convenience and it is always a question of intention, that must be proved by evidence. The Supreme Court of Canada has held that the bank form giving rise to the purported right of survivorship does not necessarily evidence a depositor’s intention to make a gift of the account.

8. UNJUST ENRICHMENT

This also is a very big growth area in estate law. The situation typically applies to common-law spouses, same sex spouses, or any one who has been in a “relationship” with another and there has been:

an enrichment enjoyed by one party;
a corresponding deprivation suffered by the other party;
an absence of any juristic reason for the deprivation/enrichment;

There have been a number of Supreme Court of Canada decisions such as Peter v. Beblow that have extended the claim for unjust enrichment to include contributions of homemaking and child care services, rather than the traditional test of financial contribution. The Supreme Court of Canada recently in Soulos held that the test for constructive trust is now “good conscience.”

This law has in recent years been applied to same sex relationships.

Constructive trust claims have been and will continue to be more prevalent.

Constructive trusts may also arise in other circumstances than common-law or same sex relationships, such as mutual wills. A constructive trust may be imposed on the survivor of the parties if it can be shown that there was an agreement between the parties not to revoke their wills and to dispose of their property in a particular way if the survivor has broken the agreement and has made another will.

9. BREACH OF FIDUCIARY DUTY

A fiduciary relationship is one in which there is a duty to one person, the fiduciary, to act on behalf of another person with respect to property which is the subject of the relationship. Where there is a fiduciary relationship, then the fiduciary must act honestly, impartially and cannot personally benefit other than for prescribed fees for services. The fiduciary is bound to protect the interests of the beneficiary, and cannot act in a conflict of interest, nor personally benefit. Fiduciaries are typically lawyers, bankers, directors, or any other person in a high position of trust.

A person using a power of attorney cannot use that document to personally benefit him or herself, or this will be a breach of fiduciary duty.

There is an onus on the fiduciary to prove that he or she acted properly when called into question.

10. LAWYER’S NEGLIGENCE

A lawyer is under a duty of care to carefully consider a client’s mental capacity and the thoroughness required is proportionate to the gravity of the transaction:

A lawyer owes a duty to his client to draft a will in accordance with the instructions, and to provide all required advice and attend to the execution of the will expeditiously given the circumstances – the responsibility to carry the client’s wishes extends to an intended beneficiary ( the disappointed beneficiary) who may be foreseeably deprived of a inheritance by the lawyer’s negligence.

A lawyer may breach his duty by failing to enquire, if appropriate, into:
obtaining a medical certificate;
probing the client’s mind;
properly recording notes;
looking for suspicious circumstances;
allowing interested parties to be present during the interview;
failing to take steps to test for capacity;
taking instructions from a beneficiary and not confirming same with the testator;
a common area of lawyer negligence is missing a limitation date, ie, failing to commence a Wills Variation action within 6 months from the date of probate.

Severance of Joint Tenancies

Severance of Joint Tenancies

The severance of joint tenancies is an increasingly important issue in estate litigation. It can occur without the registered joint owners even when knowing it if their conduct is inconsistent with joint ownership.

We often assume that property, registered in joint tenancy, will automatically pass to the surviving joint tenant(s) upon the death of another joint tenant.

This is, however, not always the case. As demonstrated in the recent Pecore and Madsen cases from the Supreme Court of Canada, one possibility is that the surviving joint tenant actually holds the property in trust for the estate of the estate of the deceased.

A second option, which we will examine in this paper, is the possibility where joint tenancies have been somehow terminated prior to the death of one co-owner.

Legal practitioners should always consider the question of whether property, apparently held in joint tenancy, indeed remained in joint tenancy at the time of death.

Subject always to the principles set out in Pecore, where a joint tenancy has not been terminated prior to a joint tenant’s death, then the property will automatically pass to the surviving joint tenant.

On the other hand, if the joint tenancy has been somehow terminated, then the deceased’s share in the property will be included in his or her estate and distributed accordingly.

Severance of Joint Tenancies

The legal process of converting a joint tenancy arrangement into a tenancy in common, is referred to as “severance”. The distinction is important because of the right of survivorship which attaches to a joint tenancy but not to tenants in common.

It is possible to sever a joint tenancy either intentionally or inadvertently. Where a tenancy in common has been created prior to the death of one owner, the deceased’s property interest will not pass the other owners, but rather will form part of the deceased’s estate.

The severance of the joint tenancy can have a very significant effect on the outcome of both matrimonial and estate litigation. Recently this is especially so because real property increasingly represents the major asset owned by the Deceased.

Requirements of Joint Tenancies

Our law presumes joint owners to hold as tenants in common, rather than as joint tenants unless the title of the property specifically describes the owners as “joint tenants”.

In addition to the form of registration, there are four essential pre-conditions of ownership in joint tenancy. These are known legally as the “four unities” . In the absence of any of these four unities, the law presumes the owners to be tenants in common, and not joint tenants.

Briefly, the four unities are the following;

1) Unity of Interest

The interest of all joint tenants must be identical in duration, extent, and nature. For example , two joint owners would each have 50% , or four joint owners would each have a 25% interest. (Thus a 30/70 per cent ownership can exist only as for tenants in common.)

2) Unity of Possession

Each joint tenant must have an undivided share of the property at the same time as the other joint tenants. No joint tenant can have the exclusive right to possess the whole property. ( Possession in this context refers to the actual ownership of the property, and not actual physical occupancy.) The concept of an undivided share means that there is no actual division of any kind in the property. From a legal perspective, there is only the whole property, there is no such thing as a division of the whole;

3) Unity of Time

The interest of all joint tenants must be created at the same time and for the same period. Each joint tenant must receive his or her interest at the same time and the interest must be of the same duration.

4) Unity of Title

Each joint tenant must have an equal title to the property, created by the same legal document. The document creating the title may be a transfer document, a will, a trust declaration, a deed of gift, or contract. What is crucial, however, is that it be the same legal document which creates each of the respective interests as joint tenants.

Should any of these four unities fail, this may cause the severance of the joint tenancy, and create a tenancy in common.

Acts Severing a Joint Tenancy

The leading English case is Williams v. Hensman ( 1861) 70 E.R. 862. Here the court held that a joint tenancy may be severed in three different ways.

1) By an act of one person acting on his or her own share; ( i.e. Mr. Smith registers a transfer from himself to himself at the land title office).

In other words, one joint tenant, without the consent of or even notice to the other tenants, may deal with his interest in such a way as to destroy one of the unities. In British Columbia our Land Title Act, s 18 permits such a transfer to sever a joint tenancy;

2) By mutual agreement

This typically occurs when all of the joint tenants enter into an agreement which expressly purports to sever the joint tenancy. Most often this occurs during a marriage breakup. It may be set out in a separation agreement or court order. Where, however, an agreement does not specifically address the severance of the joint tenancy, our courts often require that the parties establish severance by mutual course of conduct. McKee v. National Trust (1975) 56 D.L.R. (3d) 190)-;

3) By any course of dealing that intimates that the interests of all were mutually treated as constituting a tenancy in common.

Many acts can cause the severance of the joint tenancy, sometimes unwittingly. For severance by conduct, however, there must be mutuality of intention to treat the ownership as a tenancy in common. Both joint tenants must openly and mutually treat the tenancy as a tenancy in common. For example, a declaration of irreconcilability under the Family Relations Act, RSBC, will sever any joint tenancy ownerships of property held by the couple.

Case Discussion: Joint Tenancies

Most reported cases seem to involve the question of “mutual treatment” as tenants in common i.e. whether or no the parties carried out a course of conduct sufficient to enable the court to find their interests as constituting a tenancy in common.

Commonly the courts seem to focus on negotiations or actual agreements between the parties in respect of the property in question. These have been found to be evidence of an intention to treat the ownership interests as a tenancy in common.

In Schofield V. Graham (1969) 6 D.L.R. (3d) 88, a husband and wife had purchased property initially as joint tenants. Years later, when their marriage was dissolved, a dispute arose regarding the ownership of the property. The wife commenced an action for a declaration that each owned an undivided one half interest as joint tenants. That action settled prior to trial on the basis that the property would be listed for sale, and the proceeds divided equally. Prior to final sale, however, the husband died and the wife claimed full ownership of the property as a surviving joint tenant.

The wife’s claim was denied. The court held there was sufficient evidence to conclude that the parties intended to destroy their unity of possession. Therefore it ruled the joint tenancy had been severed.

Perry v Perry Estate

This decision was followed in Perry v. Perry Estate 39 E.T.R. (2d) 115, an Alberta decision. Here a couple divorced but no court order was made with respect to the family home registered in their names as joint tenants. The home was sold, however the husband died before the sale proceeds were distributed.

Once again, the court ruled that the joint tenancy had been severed. The court found that the finalization of the divorce and the decision to sell the home indicated that the parties intended to terminate the unity of possession. They said the agreement to sever was implicit in the parties’ actions. Accordingly the wife was only entitled to one half of the proceeds of the sale, with the other falling into the husband’s estate.

Feinstein v. Ashford

Feinstein v. Ashford, 2005 BCSC 1379 is an example of the importance of careful analysis of various ownership interests. In this case one joint tenant, unbeknownst to the other joint tenant, signed a land transfer at his lawyer’s office to reregister title to their joint property as a tenancy in common. A few hours later he died.

A legal dispute thus arose as to whether this unregistered transfer was effective to sever the joint tenancy. The court held that, upon execution, the transfer was effective to sever the joint tenancy.

Walker v. Dubard

A leading British Columbia case is Walker v. Dubard 45 E.T.R. 209 (BCCA) This case involved a couple who owned several assets jointly. Shortly before her death due to cancer, the wife was apparently upset with her husband’s lack of sensitivity to her illness and wanted to avoid her estate passing to his relatives. Accordingly she both changed her will and transferred several assets out of joint tenancy. The husband made a claim under the Wills Variation Act and also sought declarations with respect to ownership of some of the joint assets.

One question was the effectiveness of some letters to the Deceased’s bank which had been drafted by the Deceased’s lawyer and signed by the Deceased. These letters spoke of her intention to sever the joint tenancy in respect of some investment certificates and bonds. They did not however specifically direct the bank to transfer these assets.

The appeal court upheld the trial judge’s finding that the joint tenancy had not been severed. The bank investments therefore passed to the husband by way of right of survivorship.

The court ruled that it is insufficient to sever a joint tenancy where there is merely a unilateral declaration of intent to sever, and nothing more, regardless of whether notice of that intent is given to the other joint tenant(s).

Zuk v. Zuk

The case Zuk v. Zuk 2007 BCSC 300 involved the untimely death of a wife in the midst of matrimonial proceedings against her husband. At the time of death, there had not yet been any declaration of irreconcilability made under the Family Relations Act.

The wife’s daughter continued the action as her personal representative and sought reapportionment of the former matrimonial should be made in favour of the estate. The husband argued that the matrimonial home was his alone as surviving joint tenant.

The court found there had been no severance. In doing so they cited Tompkins Estate v. Tompkins (1993) 76 B.C. LR (2d) (BCCA) in which Southin, J.A. stated in Para (9) she is “not wholly in accord with the learned trial judge’s conclusion that severance requires either alienation or agreement. I prefer to say that it requires either alienation or agreement or facts which preclude one of the parties from asserting that there was no agreement.”

Conclusion

It is not entirely clear what the courts may require in order to find where joint tenancies have been severed. Nevertheless it is safe to predict that in future there will likely be court challenges to estate plans using joint tenancies, on the basis that the conduct of the parties has resulted in a severance of the joint tenancy.

For example, we recently reviewed a file where a transfer of property had been made to a father and son as joint tenants. Simultaneously they signed a trust agreement wherein the son acknowledged that he actually held his interest in trust for both himself and his sister. This in fact occurred in Public Trustee v Mee (1972) 2W.W.R. 424.The court held that when the bare trust declaration was signed, the property was transferred to the trustee, and thus the joint tenancy severed. This lack of basic understanding of the 4 unities, defeated the joint ownership arrangement from the outset.

There seems to an unfortunate lack of consideration by some legal professionals of the effects of some legal documents on the nature of ownership of the property.

Further posts on Joint Tenancies include

The Nature of Joint Tenancy

Using Joint Tenancy for Estate Planning

Joint Tenancy & Property

 

Wrongful Death Damages Fail To Provide For Grief

GriefWrongful Death Damages Fail To Provide For Grief and Emotional Injury in BC

One of the glaring inequities in wrongful death claims in British Columbia is the failure of our legislation to provide authorization for the courts to make an award for compensation for individual grief suffering as a result of the loss of a close family member.

Simply put the court does not compensate or have authority to award compensation for injuries that may have been suffered as a result of a nerve a shock or grief or other psychological or emotional injury caused by, the negligence of the defendant. The court does not compensate for the indirect results or reaction to the death or injury of a loved one.

 

This can have disastrous results for parents who lose a child to the neglect or fault of another and are then informed there is no pecuniary award for grief-just financial loss.

In Devji v Burnaby 1999 BCCA 599 followed previous complicated case law as follows;

It must be remembered, however, that the claim must be for actual psychiatric or emotional injury caused by (not just resulting from) the actionable conduct of the defendant. Because of the dichotomy between principle and policy, in many cases there have been several sets of reasons for judgments and many significant dissents. This makes the law exceedingly difficult to rationalize. As will be seen, the divergence of opinion has been settled in the United Kingdom by policy decisions of the House of Lords in Alcock v. Chief Constable of the South Yorkshire Police, [1991] 4 All E.R. 907 and White and Others v. Chief Constable of South Yorkshire and Others, [1999] 1 All E.R. 1 (H.L.). In White, at 41, Lord Hoffman formulated the circumstances in which recovery for psychological injury will be permitted:

(1). The plaintiff must have close ties of love and affection with the victim. Such ties may be presumed in some cases (e.g. spouses, parent and child) but must otherwise be established by evidence. (2) The plaintiff must have been present at the accident or its immediate aftermath. (3) The psychiatric injury must have been caused by direct perception of the accident or its immediate aftermath and not upon hearing about it from someone else. (Emphasis added)

 

[5] The foregoing, however, does not state the law of this Province. The Supreme Court of Canada, in a number of cases, has adopted the approach to liability enunciated in Anns v. Merton London Borough Council, [1977] 2 All E.R. 492 (H.L.)which has since been overruled in the United Kingdom, and there is a previous nervous shock decision of a five-judge panel of this Court which is binding upon us to the extent of that which it actually decides. One of the questions to be decided in the case at bar is whether that case, Rhodes v. C.N.R. (1990), 50 B.C.L.R. (2d) 273, precludes recovery by the plaintiffs.

The Evolution of the Law Relating to Psychiatric or Psychological Injury Cases

 

[15] The first test for liability on the part of a defendant is reasonable foreseeability of particular harm as a consequence of his conduct. Thus, as was stated by Lord Denning in King v. Phillips, [1953] 1 All E.R. 617 (C.A.) at 623, “… there can be no doubt since Hay (or Bourhill) v. Young, [1942] 2 All E.R. 396 (H.L.), that the test of liability for shock is foreseeability of injury by shock.” As the cases show, however, this general proposition is directed not to the world at large, but only to that class of persons which might reasonably be within the contemplation of the alleged wrongdoer. It also seems clear that while foreseeability is one test for liability, it must be reasonable foreseeability, and that every foreseeable injury does not create a duty of care. This is confirmed by numerous judicial pronouncements, including a passage from the opinion of Lord Wilberforce in McLoughlin v. O’Brian, [1982] 2 All E.R. 298 (H.L.) to which I shall return later in these Reasons. At 303, that learned judge said:

That foreseeability does not of itself, and automatically, lead to a duty of care is, I think, clear. I gave some examples in Anns v. Merton London Borough [1977] 2 All E.R. 492 at 498…, Anns itself being one. I may add what Lord Reid said in McKew v. Holland & Hannen & Cubitts (Scotland) Ltd. [1969] 3 All E.R. 1621 at 1623: ‘A defender is not liable for a consequence of a kind which is not foreseeable. But it does not follow that he is liable for every consequence which a reasonable man could foresee.’

[16] One of the difficulties arising from the simple test of foreseeability is to determine how it is to be applied in particular circumstances. As already mentioned, some eminent judges believe nervous shock cases can be decided solely by reference to the principle of foreseeability. Other courts have taken the view that the application of the foreseeability principle is too open-ended and that “control mechanisms” are required. This is illustrated by a comment of Lord Bridge in McLoughlin (supra), at 313, that it is readily foreseeable that a significant number of mothers exposed suddenly to a casualty or the consequences of a casualty that causes the death of their children might break down under the shock of the event and suffer psychiatric illness. I note, however, that this comment includes a “control mechanism” by limiting its operation to the defendant’s foreseeability of harm by nervous shock not to the world at large, but only to mothers. This, of course, was only an example within the context of the case under consideration but it illustrates the two points of view.

[17] As already stated, in the U.K. the contest between pure foreseeability and “control mechanisms” has already been decided in favour of the latter in the opinions in Alcock and White, which I shall discuss below. In Canada, the Supreme Court of Canada in Kamloops v. Nielsen, [1984]2 S.C.R. 2, included a caveat about public policy negating a duty of care not to cause reasonably foreseeable injury. More directly, “control mechanisms” in nervous shock cases were actually imposed in Rhodes. Nevertheless, it may be useful to record briefly how the law has evolved incrementally in the United Kingdom and elsewhere.

Wrongful Death Claims – Loss of Financial Support

Wrongful Death Claims

Yesterday I blogged about the Family Compensation Act of British Columbia which allows a spouse, parent, or child of a person whose death has been caused by the wrongful act negligence or default of another, to sue for compensation.

There are several heads of damages, and probably the largest in terms of pecuniary amount is that of loss of financial support.

The following cases are a brief summary of this head of damage:

In the decision Johnson v. Carter, 2007 BCSC 622, the court referred to some of the principles in the following paragraphs:

Here, the claim is for loss of financial support.

In Keizerv. Hanna, [1978] 2 S.C.R. 342, Dickson J. said the following at 351-52:

… The appellant is entitled to an award of such amount as will assure her the comforts and station in life which she would have enjoyed but for the untimely death of her husband. If one is speaking of contingencies, I think it is not unreasonable to give primary attention to the contingencies, and they are many, the occurrence of which would result in making the award, in the light of events, entirely inadequate. An assessment must be neither punitive nor influenced by sentimentality. It is largely an exercise of business judgment. The question is whether a stated amount of capital will provide, during the period in question, having regard to contingencies tending to increase or decrease the award, a monthly sum at least equal to that which might reasonably have been expected during the continued life of the deceased.

The conventional approach to determining an award for loss of future earnings is as follows:

1. A calculation is made of the income

which has been lost up to the date of the trial.

2. A calculation is made of the loss of

future earnings.

3. A reduction is then made for personal

consumption of the deceased.

4. Contingencies are reviewed to

determine if a further reduction is required.

[Cogar Estate v. Central Mountain Air Services Ltd.

(1992), 72 B.C.L.R. (2d) 292 (C.A.)]

 

Loss of support, like loss of future earning capacity, involves an inquiry into the unknowable:

Because damage awards are made as lump sums, an award for loss of future earning capacity must deal to some extent with the unknowable. The standard of proof to be applied when evaluating hypothetical events that may affect an award is simple probability, not the balance of probabilities: Athey v. Leonati, [1996] 3 S.C.R. 458. Possibilities and probabilities, chances, opportunities, and risks must all be

considered, so long as they are a real and substantial possibility and not mere speculation. These possibilities are to be given weight according to the percentage chance they would have happened or will happen.

[Rosvoldv. Dunlop (2001), 84 B.C.L.R. (3d) 158, 2001 BCCA 1 at [paragraph] 9]

[6] Our Court of Appeal in Brown v. Finch, 42 B.C.L.R. (3d) 116 also said at 1J3:

3. The basis upon which damages must be assessed is that stated by McFarlane J.A. in Cox v. Takahashi (1977), 5 B.C.L.R. 162 (B.C.C.A.) at 164:

It is well established that the measure of damages under the statute as interpreted by the Privy Council in Nance v. B.C. Bee. Ry., [1951] A.C. 601, 2 W.W.R. (N.S.) 665, [1951] 3 D.L.R. 705, is the pecuniary loss suffered by the dependants as a consequence of the death. That pecuniary loss is the actual financial benefit of which they have been deprived and includes financial benefit which might reasonably be expected to accrue in the future if the death had not occurred

Wrongful Death Claims and The Family Compensation Act

Tegemann v. Pasemko 2007 BCSC 1062 is a good case example of the principles for compensation under the Family Compensation act of British Columbia.

In this particular case the deceased was a 50-year-old mother, who is survived by her husband aged 49 at the time of the accident, and two young children aged six and three at the same time.

The plaintiff based his claim under the following sections of the Family Compensation act:

Action for death by wrongful act, neglect or default

2 If the death of a person is caused by wrongful act, neglect or default, and
the act, neglect or default is such as would, if death had not resulted, have
entitled the party injured to maintain an action and recover damages for it, any
person, partnership or corporation which would have been liable if death had
not resulted is liable in an action for damages, despite the death of the person
injured, and although the death has been caused under circumstances that
amount in law to an indictable offence.

Procedures for bringing action

3 (1) The action must be for the benefit of the spouse, parent or child of the
person whose death has been caused, and must be brought by and in the
name of the personal representative of the deceased.

The court or jury may give damages proportioned to the injury resulting from the death to the parties respectively for whose benefit the action has been brought.
The amount recovered, after deducting any costs not recovered from the defendant, must be divided among the parties in shares as the court or jury by their judgment or verdict directs.

In assessing damages any money paid or payable on the death of the deceased under any contract of assurance or insurance must not be taken into account.
In an action brought under this Act, damages may also be awarded for any of the following expenses if the expenses have been incurred by any of the parties for whom and for whose benefit the action is brought:

any medical or hospital expenses which would have been recoverable as damages by the person injured if death had not ensued;
reasonable expenses of the funeral and the disposal of the remains of the deceased person.

It is most noteworthy that the action may only be brought for the benefit of the spouse parent or child of the person whose death has been caused, and that it must be brought in the name of the personal representative of the deceased.

 

There are a number of heads of damages that can be claimed such as:

Loss of care, guidance and affection;
Loss of inheritance;
Loss of dependency;
Loss of household and childcare services;
Special damages.
Loss of financial support (usually the largest monetary claim)
loss of future earnings

Many of the heads of damages such as financial loss, are calculated with the assistance of actuaries and/or economists based on financial analysis of past income tax returns etc.

Needless to say it can be very complex to determine.

 

CONTINGENCIES OF LIFE

 

Once a judge reaches the various numbers of the heads of damages the judge often then takes into account the various contingencies of life such as the husband’s statistical chances for divorce and/or remarriage that should be deducted from such an award.

In this particular case the court deducted 20% of his calculation for loss of dependency, based on the reasonable expectation that the husband will remarry.

Capacity To Make a Will

Capacity To Make a Will

 

A person making a Will must understand:

 

The nature of the act of making a Will:

a. That he will die;

b. That the Will will come into operation on his death, but not before; and

c. That he can change or revoke the Will at any time.

 

2. The effects of the Will:

 

a. Who the executor is, and possibly why he or she is being chosen as
executor;

b. Who gets what under the Will;

c. Whether a beneficiary’s gift is absolute, or whether it is limited or
conditional in some way (for example a life interest, or a legacy
contingent on attaining a particular age);

d. Whether he has already made a Will and, if so, how and why the new one
differs from the old one.

 

The extent of the property being disposed of:

a. The extent of the property being disposed of;

b. The fact that any jointly owned property might automatically pass to the
other joint owner, regardless of anything the will says;

c. Whether there’are benefits payable on his death which would be
unaffected by the terms of the will: for example, the proceeds of an
insurance policy, or pension rights;

d. Whether he has any debts, and how they are to be paid

 

A person making a Will should be able to comprehend and appreciate the claims
to which he ought to give effect. Why are some beneficiaries preferred and others
possibly excluded? For example:

a. Some may be better provided for than others;

b. Some may be more deserving than others because they have been kind to
the testator;

c. Some may have upset, offended or disregarded him;

d. Some may be in greater need than others because of, say, their age or state
of health.

e. It is essential that no delusions should influence the testator and bring
about a disposal of his property which would not have been made if he
was not mentally disordered.

 

5. The testator should not be regarded as lacking testamentary capacity merely because he makes a will which would not be made by a person of ordinary prudence.

Do NOT Put Your Kids On Title Of Your Home

No Children OMonopolyn the Title Of Your Home

After witnessing parents putting their children on title to their home as joint tenants for over 40 years, I have emphatically concluded that in almost every instance is a bad idea.

While it sounds so simple that the parents simply add a child as a joint tenant to their title, this type of simple do-it-yourself estate planning remedy is typically very misunderstood and often abused.

The parent is often under the illusion that doing so is a cost-effective and simple remedy of avoiding probate fees, and given that probate fees are only 1.4% of the value of an estate over $25,000, it is a high price to pay in terms of risk given the minimal reward.

More worrisome to the estate litigator is the tendency of parents to see their children through rose-colored glasses.

They seem to want to believe that if they put the house in joint tenancy with one child, that the child will do the right thing and share the proceeds equally with siblings.

In my experience this rarely happens.

The other siblings will in such circumstances attack the gratuitous transfer of the title between the parent and a sibling, on the basis that it was not a true gift, and that the child owns the house in trust for the estate.(see Pecore v Pecore SCC 17) .

One of the biggest risks in areas such as Vancouver where there has been dramatic increases in property values, is that at the time of the transfer there is a deemed tax disposition and a loss of the principal residence exemption on the portion of the property subsequently held by the child. The child could find themselves owing a significant capital gains tax after the passing of the parent who share will remain his or her principal residence and be tax-free.

Other downside risks is that each owner on title has a right to possession of the property and this can result in stress and possible litigation such as a forced sale of the property under the partition act.

Another major concern these days is that the child spouse could have a strong claim for an interest in the property on separation or divorce if it was used for a family purpose.

Summary the child could be attacked by creditors or bankruptcy or encumber their at half of the property and thus put the parents household at risk.

My advice would be to have any practitioner who upon being requested to put children on title to delve very deeply into the family history and motivations of the client. It is necessary to point out the risk such as the possible loss of control, wrists of potential income tax consequences, please note that the probate fees saving is minimal, and that there are a number of risks that far outweigh any such simplistic estate planning tool.

Partition and Sale Rejected-Hardship

Forced Sale of Jointly Owned Property

Forced Sale of Jointly Owned Property

In Mowat v Dudas 2012 BCSC 454, the court exercised its discretion to refuse an order for a forced-sale of the Cypress Gardens condo development of 177 units owned by 135 different owners.

Each was a co-owner of the entire stratified complex. Some owners wanted the property sold , while others vigorously opposed same.

The court basically examined each of the numerous respondents circumstances and declared that each case must be examined separately to determine whether good reason existed to refuse the sale.

The court found that a sale would force many vulnerable people out of their homes, including young children, single parents, the elderly, the infirm, and people a very limited financial means. Many could simply not afford a comparable property nearby and would be forced to move far away.

Joint ownership of property whether it be in joint tenancy, tenants-in-common, or as a strata owner in a complex, is becoming increasingly common and more complex as time goes on.

It was only just over 40 years ago that we began to see strata lot ownership, which in itself has developed into a very complex area of law.

The following extract is a very good summary of the legal notions of serious hardship and the court’s discretion under the partition of property act of British Columbia

Discretion Under the Partition of Property Act

[141] All the parties to this petition agree that the Court has a discretion not to order a sale under the Partition of Property Act. The use of the word “may” in ss. 2, 7 and 8 has been held to create such a discretion: Evans v. Evans, [1951] 2 D.L.R. 221 (B.C.C.A.).

[142] Section 6 describes circumstances in which the Court “shall” order a sale, but with the limitation “unless it sees good reason to the contrary.” As set out above, s. 6 has no application in the present case, as it has not been shown that the owners of a 1/2 or upwards interest are in support of the petition.

[143] Counsel have referred me to a number of trial decisions in which the nature of the discretion not to order a sale has been considered, including Hayes v. Schimpf, 2004 BCSC 1408; Machin v. Rathbone, 2006 BCSC 252; Zackariuk Estate v. Chepsiuk, 2005 BCSC 919; Dunford v. Sale, 2007 BCSC 1422; Zimmerman v. Vega, 2011 BCSC 757; Richardson v. McGuinness, [1996] B.C.J. No. 2636 (S.C.); Riser v. Rawlings, 2008 BCSC 1050; and Jabs Construction Ltd. v. Callahan (1991), 61 B.C.L.R. (2d) 383 (S.C.). The most useful statements of principle, however, are found in the following decisions of our Court of Appeal.

[144] A useful starting point is Harmeling v. Harmeling (1978), 90 D.L.R. (3d) 208 (B.C.C.A.), a decision of our Court of Appeal sitting in a five-justice division. There the Court rejected any approach that would limit the discretion to cases where there was a want of good faith, or vexatious intent or conduct or malice in taking the proceedings. Rather, as Seaton J.A. wrote for the majority at p. 212:

In my view we should not limit the discretion in that manner. I think that we ought to accept without qualification the general statement that there is a prima facie right of a joint tenant to partition or sale and that the Court will compel such partition or sale unless justice requires that such an order should not be made.

[145] The nature of the discretion was further clarified in Bradwell v. Scott, 2000 BCCA 576. There, the section under consideration was s. 6, but the Court opined that the exercise of discretion under that section would not be significantly different from the discretion under the other sections of the Partition of Property Act. The Court held at paras. 43-45 that the exercise of discretion would depend on the particular facts of each case:

It does not appear from my reading of either the majority or minority reasons for judgment in Harmeling that the section then equivalent to our present s. 6 was under consideration. Rather, the section considered by both judges who wrote in Harmeling, as indicated above, was s. 3 (now s. 2), and in particular the words “may be compelled.” We are bound by the majority opinion that those words confer a discretion to refuse an order where “justice requires that such an order should not be made.”

This case, however, turns on the interpretation of s. 6, and the meaning to be given to the words “unless it sees good reason to the contrary.” Having said that, I am unable to see any real difference between the discretion conferred by this language and that described by Mr. Justice Seaton as arising under s. 3 (now s. 2).

To the extent that “serious hardship” was said in Dobell [Dobell v. Oman, [1998] B.C.J. No. 504, (6 March 1998), Vancouver Registry, A972782 (B.C.S.C.)] to be the test for “good reason to the contrary” I would respectfully disagree. Serious hardship to a respondent may be a proper ground for refusing an order for sale, as might lack of “good faith, vexatiousness or maliciousness” on the part of the petitioner. But these are not the exclusive measure of “good reason.” I agree with Mr. Justice Seaton that we should not limit the discretion by creating a general rule that might serve to justify refusal in any given case. The facts and circumstances of each case must be examined to determine whether a good reason, of whatever sort, exists for refusing the order.

[Emphasis added.]

[146] At paras. 34-35, the Court also addressed the question of onus or burden of proof:

In para. 9 of the chambers judge’s reasons (quoted above at para. 13) he said that it was not possible to determine who was at fault for the various confrontations and altercations which occurred between the parties. The Scotts contend that in leaving this issue unresolved, the chambers judge effectively placed upon them the onus of proving that the Bradwells were not entitled to equitable relief. They say this is an error because as the parties seeking equitable relief, it was for the Bradwells to establish their entitlement to same. As they failed to establish their entitlement, it is the Bradwells who should bear the risk of non-persuasion.

This argument is closely related to the Scotts’ jurisdictional argument, dealt with above, and in my respectful view it must fail for essentially the same reasons. There is no requirement under s. 6, either as a condition precedent to jurisdiction, or otherwise, for the petitioner to prove that he comes to court with “clean hands”, and is otherwise entitled to equitable relief. The section says the court must order sale of the property “…unless it sees good reason to the contrary”. This language is neutral in terms of onus. It is for the court to assess the evidence and to determine whether justice requires that such an order be denied. In practical terms, it would be for those opposing the application to put before the court evidence tending to establish a good reason for refusing it. In any event, I can see nothing in the statute or in the cases decided under it, to support the Scotts’ submission.

[Emphasis added.]

Serious Hardship

[147] As set out in Bradwell, serious hardship is one circumstance that may provide a proper ground for refusing an order for sale, although it is not the exclusive measure of when that discretion may be exercised.

[148] Phillips v. Phillips (1980), 24 B.C.L.R. 194 (C.A.) is an example of the kind of serious hardship that may justify the exercise of discretion to refuse partition or sale. The property in that case was jointly owned by a husband and wife. After separation, the wife continued to live in the property with the children, but the husband applied for partition and sale to raise money to pay off his loans. The trial judge found that the husband’s application was not vexatious, and granted the order. The Court of Appeal allowed the wife’s appeal and set aside the order for partition and sale on the basis that if the order were allowed to stand, the wife and children would be left without a home and would have to relocate. Although Phillips was a case involving a husband and wife, the Court of Appeal applied the general principles relating to partition and sale as set out in Harmeling.

[149] Similarly, in Bergen v. Bergen (1969), 68 W.W.R. 196 (B.C.S.C.), Seaton J. refused partition or sale because he held that the plaintiff husband’s conduct was economically oppressive. The premises were of a relatively low value, and if the property was sold, the wife would not have been able to provide adequate accommodation for herself and her children.

[150] In the present case, there is evidence that many of the respondents would suffer hardship if there were an order for sale of the Land.

Mental Health Withdraws Support For Psychiatrists DSM-5

 Mental healthMental Health and The Controversial DSM5

Psychiatrists like to put labels on mental disorders and use the DSM for such use.The new DSM-5 seems to be causing controversy within the mental health business.Considering that not long ago, the DSM classified such things as homosexuality as a mental disorder, it if not surprising that not all mental health workers agree on the content of various issues discussed in the DSM, now edition 5.The following article is reprinted from Christopher Lane’s blog on the issue, and is of interest to estate litigation due to such issues as mental capacity, personality disorders and the like.

The National Mental Health Withdraws Support for DSM-5

The latest development is a humiliating blow to the APA.

Published on May 4, 2013 by Christopher Lane, Ph.D. in Side Effects

Just two weeks before DSM-5 is due to appear, the National Institute of Mental Health, the world’s largest funding agency for research into mental health, has indicated that it is withdrawing support for the manual.

In a humiliating blow to the American Psychiatric Association, Thomas R. Insel, M.D., Director of the National Mental Health, made clear the agency would no longer fund research projects that rely exclusively on DSM criteria. Henceforth, the National Mental Health, which had thrown its weight and funding behind earlier editions of the manual, would be “re-orienting its research away from DSM categories.” “The weakness” of the manual, he explained in a sharply worded statement, “is its lack of validity.” “Unlike our definitions of ischemic heart disease, lymphoma, or AIDS, the DSM diagnoses are based on a consensus about clusters of clinical symptoms, not any objective laboratory measure.”

That consensus is now clearly missing. Whether it ever really existed remains in doubt. As one consultant for DSM-III conceded to the New Yorker magazine about the amount of horsetrading that drove that supposedly “evidenced-based” edition from 1980: “There was very little systematic research, and much of the research that existed was really a hodgepodge—scattered, inconsistent, ambiguous.”

According to Insel, too much of that problem remains. As he cautioned of a manual whose precision and reliability has been overstated for decades, “While DSM has been described as a ‘Bible’ for the field, it is, at best, a dictionary, creating a set of labels and defining each.” And not even a particularly good dictionary, apparently. Of the decision to steer research in mental health away from the manual and its parameters, Insel states: “Patients with mental disorders deserve better.”

Yet what the NIMH is offering as a solution the DSM’s fumbles and errors is not without major problems of its own, including because of the agency’s single-minded focus on biological psychiatry as the represented solution to all such ambiguities and confusions. Among the consequences of that emphasis, interest in symptoms will be radically curtailed: “symptom-based diagnosis, once common in other areas of medicine, has been largely replaced in the past half century as we have understood that symptoms alone rarely indicate the best choice of treatment.”

The agency’s year-and-a-half old attempt to devise an alternative to theDSM, its Research Domain Criteria (RDoC), stems from an effort, writes Insel, “to transform diagnosis by incorporating genetics, imaging,cognitive science, and other levels of information to lay the foundation for a new classification system. Through a series of workshops over the past 18 months,” he continues, “we have tried to define several major categories for a new nosology. This approach began with several assumptions:

A diagnostic approach based on the biology as well as the symptoms must not be constrained by the current DSM categories;
Mental disorders are biological disorders involving brain circuits that implicate specific domains of cognition, emotion, or behavior;
Each level of analysis needs to be understood across a dimension of function;
Mapping the cognitive, circuit, and genetic aspects of mental disorders will yield new and better targets for treatment.”
These assumptions spring from assertions and tautologies that have driven American psychiatry since at least the 1970s. The insistence that “mental disorders” be viewed and studied entirely as “biological disorders” shunts aside the APA’s supposed agnosticism on that front; but it also echoes Robert Spitzer’s effort (dating here from June 1976) to push through a similar proviso for DSM-III: “A mental (psychiatric) disorder is a medical disorder” (qtd. in Shyness 63). Even today, little in that assertion is self-evident.

True, the NIMH is leaving some room for discussion of environmental and psychological factors. “Self-reports” will also apparently be a “unit of analysis,” though interest in the thoughts and testament of patients seems characteristically small. The agency’s overwhelming focus is to remain on the brain as the alleged seat and cause of psychiatric suffering.

Given the broadly inconclusive research on such formidably complex elements, that prospect is dismaying to many and “potentially game-changing” to others. For others still, the NIMH’s “seismic” decision represents an unmistakable “kill shot to DSM-5,” and not a moment too soon. The manual’s authority won’t end overnight, but, given the implications of the NIMH’s decision, it also can’t and won’t stay as it has.

Nevertheless, the alternatives, at least those that the NIMH is presenting, may turn out to be equally problematic and unworkable. As Gary Greenberg noted recently in the New Yorker, “doctors in most medical specialties have only gotten better at sorting our suffering according to its biochemical causes … [but] psychiatrists still cannot meet this demand. A detailed understanding of the brain, with its hundred billion neurons and trillions of synapses, remains elusive, leaving psychiatry dependent on outward manifestations for its taxonomy of mental illnesses.”

BC Property Law-Joint Property Owners Force Sale With Partition of Property Act

Joint Property Owners Can Force Sale With The Partition of Property Act
Trevor Todd and Jackson Todd have over 60 years experience with court ordered  Partition and Sale of Property.

The Partition of Property Act

Joint owners of property whether as joint tenants or tenants in common can force a sale of the property using the Partition of Property act.

It is common for parties to purchase properties together and register the property jointly, whether it be joint tenancy with a right of survivorship, or tenants in common with no right of survivorship. It is a fact of life that for innumerable reasons one or more parties may wish to sell the property in the future and realize their equity out of the property. This decision is often met with resistance from the remaining owners who may lack the means or the will to buy out the departing owner.

Borg v Morris 2012 BCSC 554 was such a factual scenario. One co owner opposed the property sale and could not afford to buy out the other owner . He opposed the sale on the basis that it was his home, there were remaining outstanding financial issues between them, and a forced sale would involve a large mortgage prepayment penalty. Nevertheless the court ordered a sale and noted their financial issues could be adjudicated later. The court discussed the competing equities of one owner losing his home and the other owner realizing his equity in the same home. The court found that the competing hardships were more or less equal and thus there was no good reason not to order the sale of the home, subject to an accounting. The statutory jurisdiction to order a sale of the property is found in s. 6 of the Partition of Property Act, R.S.B.C. 1996, c. 347 (the “Act”):

6. In a proceeding for partition where, if this partition of property Act had not been passed, an order for partition of property Act might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions Zimmerman v. Vega, 2011 BCSC 757, as to the correct approach under s. 6 of the Act. Mr. Justice Shabbits in that case quotes extensively from Ryser v. Rawlings, 2008 BCSC 1050 at para. 22. I would note in particular, paras. 27-29 in Ryser to the effect that the Court must order a sale of the property if requested to do so by a co-owner and that the Court’s discretion to order otherwise is a narrow one and one which is suggested would involve significant hardship.

[24] Mr. Morris’ counsel has also referred me to Sahlin v. The Nature Trust of British Columbia, Inc., 2011 BCCA 157. Mr. Justice Frankel in that case at para. 24 described the discretion to refuse a sale as broad and unfettered and that it gives the Court the ability, having regard to the particular facts and circumstances, to refuse to order a sale where a sale would not do justice between the parties.

[25] A point of disagreement between the parties concerned the onus of proving any “good reason to the contrary.” In Zimmerman at para. 25, the Court adopted a quote from Dunford v. Sale, 2007 BCSC 1422, to the effect that the onus is on the respondent in that respect. That conclusion is contradicted somewhat by the Court of Appeal in Sahlin at para. 23. It does not appear that the Court in Zimmerman had the benefit of considering this decision, since the reasons of the Court of Appeal were issued between the date of the hearing and the issuance of reasons. In any event, although the Court of Appeal stated that there is no legal onus on the respondent in this respect, the Court did adopt language from the earlier case of Bradwell v. Scott, 2000 BCCA 576, in stating:

This language is neutral in terms of onus. It is for the court to assess the evidence and to determine whether justice requires that such an order be denied. In practical terms, it would be for those opposing the application to put before the court evidence tending to establish a good reason for refusing it.

 

Further reading on partition actions

Courts Must Scrutinize Claims Against Estates

Court Ordered Minority Interest: Partition of Property

Partition and Sale of Property Refused