Gordon Estate (Re), 2018 BCSC 487 (CanLII), http://canlii.ca/t/hr6tq
This was a petition by the University of British Columbia (UBC), a beneficiary under the subject Will, for leave to commence an action in the name of the executor of the estate, pursuant to section 151 of the Wills, Estates and Succession Act (“WESA“)[1] to recover assets transferred to the respondent (the executor named in the Will) and his wife.
UBC argued that the deceased lacked the requisite capacity to transfer her assets prior to her death and that the respondent and his wife hold those assets on a resulting trust for the estate.
The respondent opposed the application, in his personal capacity, arguing that the proposed action had no chance of success and that the deceased had the requisite capacity when the transfers were made.
The Court granted UBC leave to bring the action and ordered costs against the respondent, in the cause.
Background:
The deceased, born in 1916, met the respondent when he began working for her, as a gardener, in 1998. According to the respondent, they developed a close friendship over the years.
In 2000, the deceased, with the assistance of her lawyer executed a Will, leaving the bulk of her estate to UBC for medical research.
Her Will was changed a number of times throughout the following years, however, her intention to leave the residue of her estate to UBC remained.
In 2008, the deceased had a fall which led to the progressive deterioration of her health. She was confined to a wheelchair and lived the remainder of her life in long-term care facilities. In that same year, she changed her Will naming the respondent as her sole executor, representative and attorney.
Between 2011 and early 2012, in accordance with the deceased’s purported wishes, the respondent arranged for the deceased to meet with her lawyer for the purposes of transferring her property (her home) to him and his wife.
The deceased’s lawyer spoke to her on the phone once and met with her in-person on two separate occasions, over a period of about nine months. Each time, he formed the opinion that she did not have the requisite capacity to change her Will. The deceased also underwent a mini-mental test in 2012, on which she scored 17/27.
The respondent the instructed his own lawyer to prepare a transfer form for the deceased’s completion which indicated that the subject property had a market value of $874,000 but the consideration from the respondent was $1. The assessed value of the Property in 2018 was $1,691,700. The respondent’s lawyer advised the respondent that the deceased needed independent legal advice. The deceased lawyer concluded that the deceased did not have the requisite decisional capacity to execute the transfer. She did not have a “good grasp as to the nature and extent of her assets and she did not know what her wishes were”. She also insisted she owned two homes, when she only owned one.
So, the respondent found another lawyer to represent the deceased and the transfer was ultimately completed in October of 2012. This third lawyer did not provide evidence at the hearing. His handwritten notes from his meeting with the deceased were attached to the respondent’s Affidavit. The notes suggested that the deceased “was oriented in time and space” and that she was able to tell him “about her assets”. She reportedly also insisted that the respondent’s wife be named on the transfer.
Around the same time period, the deceased gifted her vehicle to the respondent; over $90,000 was transferred from her account to the respondent’s; $39,000 was taken out of her account for maintenance to the subject property and the respondent was named as a beneficiary on her TFSA account. Upon her death, he received over $35,000 of her contributions.
According to the respondent, the deceased had “good” and “bad” days. However, generally she “had her full mental capabilities until the time of her death.” He and his wife visited her daily at the long-term care facility.
The Deceased passed away on July 13, 2014. By then, only $153,206.25 was left in her estate, $130,000 of which was to cover specific bequests.
The Legal Framework:
WESA[2] allows a beneficiary to commence court proceedings in the name of the deceased’s personal representative, with leave, in certain circumstances. In brief, the Court may grant leave if the proceeding is found to be necessary or expedient.
The Court here relied heavily on the decision of Justice Gray in Bunn v. Bunn Estate[3]. In that case, it was found that the terms necessary and expedient are disjunctive. Furthermore, in deciding whether to grant leave, the Court does not attempt to try the merits of the case but rather determines whether the proposed action has a reasonable prospect of success or is bound to fail.
A proposed proceeding will be considered necessary if the personal representative is unwilling or unable to commence proceedings and it may be expedient if it is in the best interest of the estate.
Analysis:
UBC argued that the necessity branch of the test had been met given that the respondent was in a conflict and could not bring an action against himself.
With respect to expedience, UBC argued that on the evidence adduced, the claim is not bound to fail and that it stands to bring nearly $2 million in assets back into the estate if it is successful. Furthermore, UBC had the ability to fund the litigation.
Regarding the merits of the proposed action, UBC proposed that the transfer of the property may be reversed on the presumption of resulting trust, capacity and other factors such as undue influence.
The Court was not persuaded that the deceased had capacity at the time of the transfers. As such, leave was granted to UBC to commence the action with costs payable in the cause by the respondent.
Takeaways:
An applicant seeking leave to commence an action in the name of the executor will need only establish that the proposed action is either necessary or expedient under WESA. The potential for relief in the proposed action must be shown to be sufficient to justify the cost and inconvenience of litigation and be in the best interests of the estate.
This will be a case to watch, to see if UBC is successful in its claim. We will provide commentary on any subsequent decisions.
—
[1] Wills, Estates and Succession Act, S.B.C. 2009, c. 13.
[2] Ibid.
[3] Bunn v. Bunn Estate, 2016 BCSC 2146.
Menu
Written by: Kimberly A. Whaley
Posted on: May 20, 2018
Categories: Commentary, WEL Newsletter
Gordon Estate (Re), 2018 BCSC 487 (CanLII), http://canlii.ca/t/hr6tq
This was a petition by the University of British Columbia (UBC), a beneficiary under the subject Will, for leave to commence an action in the name of the executor of the estate, pursuant to section 151 of the Wills, Estates and Succession Act (“WESA“)[1] to recover assets transferred to the respondent (the executor named in the Will) and his wife.
UBC argued that the deceased lacked the requisite capacity to transfer her assets prior to her death and that the respondent and his wife hold those assets on a resulting trust for the estate.
The respondent opposed the application, in his personal capacity, arguing that the proposed action had no chance of success and that the deceased had the requisite capacity when the transfers were made.
The Court granted UBC leave to bring the action and ordered costs against the respondent, in the cause.
Background:
The deceased, born in 1916, met the respondent when he began working for her, as a gardener, in 1998. According to the respondent, they developed a close friendship over the years.
In 2000, the deceased, with the assistance of her lawyer executed a Will, leaving the bulk of her estate to UBC for medical research.
Her Will was changed a number of times throughout the following years, however, her intention to leave the residue of her estate to UBC remained.
In 2008, the deceased had a fall which led to the progressive deterioration of her health. She was confined to a wheelchair and lived the remainder of her life in long-term care facilities. In that same year, she changed her Will naming the respondent as her sole executor, representative and attorney.
Between 2011 and early 2012, in accordance with the deceased’s purported wishes, the respondent arranged for the deceased to meet with her lawyer for the purposes of transferring her property (her home) to him and his wife.
The deceased’s lawyer spoke to her on the phone once and met with her in-person on two separate occasions, over a period of about nine months. Each time, he formed the opinion that she did not have the requisite capacity to change her Will. The deceased also underwent a mini-mental test in 2012, on which she scored 17/27.
The respondent the instructed his own lawyer to prepare a transfer form for the deceased’s completion which indicated that the subject property had a market value of $874,000 but the consideration from the respondent was $1. The assessed value of the Property in 2018 was $1,691,700. The respondent’s lawyer advised the respondent that the deceased needed independent legal advice. The deceased lawyer concluded that the deceased did not have the requisite decisional capacity to execute the transfer. She did not have a “good grasp as to the nature and extent of her assets and she did not know what her wishes were”. She also insisted she owned two homes, when she only owned one.
So, the respondent found another lawyer to represent the deceased and the transfer was ultimately completed in October of 2012. This third lawyer did not provide evidence at the hearing. His handwritten notes from his meeting with the deceased were attached to the respondent’s Affidavit. The notes suggested that the deceased “was oriented in time and space” and that she was able to tell him “about her assets”. She reportedly also insisted that the respondent’s wife be named on the transfer.
Around the same time period, the deceased gifted her vehicle to the respondent; over $90,000 was transferred from her account to the respondent’s; $39,000 was taken out of her account for maintenance to the subject property and the respondent was named as a beneficiary on her TFSA account. Upon her death, he received over $35,000 of her contributions.
According to the respondent, the deceased had “good” and “bad” days. However, generally she “had her full mental capabilities until the time of her death.” He and his wife visited her daily at the long-term care facility.
The Deceased passed away on July 13, 2014. By then, only $153,206.25 was left in her estate, $130,000 of which was to cover specific bequests.
The Legal Framework:
WESA[2] allows a beneficiary to commence court proceedings in the name of the deceased’s personal representative, with leave, in certain circumstances. In brief, the Court may grant leave if the proceeding is found to be necessary or expedient.
The Court here relied heavily on the decision of Justice Gray in Bunn v. Bunn Estate[3]. In that case, it was found that the terms necessary and expedient are disjunctive. Furthermore, in deciding whether to grant leave, the Court does not attempt to try the merits of the case but rather determines whether the proposed action has a reasonable prospect of success or is bound to fail.
A proposed proceeding will be considered necessary if the personal representative is unwilling or unable to commence proceedings and it may be expedient if it is in the best interest of the estate.
Analysis:
UBC argued that the necessity branch of the test had been met given that the respondent was in a conflict and could not bring an action against himself.
With respect to expedience, UBC argued that on the evidence adduced, the claim is not bound to fail and that it stands to bring nearly $2 million in assets back into the estate if it is successful. Furthermore, UBC had the ability to fund the litigation.
Regarding the merits of the proposed action, UBC proposed that the transfer of the property may be reversed on the presumption of resulting trust, capacity and other factors such as undue influence.
The Court was not persuaded that the deceased had capacity at the time of the transfers. As such, leave was granted to UBC to commence the action with costs payable in the cause by the respondent.
Takeaways:
An applicant seeking leave to commence an action in the name of the executor will need only establish that the proposed action is either necessary or expedient under WESA. The potential for relief in the proposed action must be shown to be sufficient to justify the cost and inconvenience of litigation and be in the best interests of the estate.
This will be a case to watch, to see if UBC is successful in its claim. We will provide commentary on any subsequent decisions.
—
[1] Wills, Estates and Succession Act, S.B.C. 2009, c. 13.
[2] Ibid.
[3] Bunn v. Bunn Estate, 2016 BCSC 2146.
Author
View all posts