Wednesday, November 30, 2016

Counting the Days: How to Calculate the Five-Day Survival Period in Section 10 of the Wills, Estates and Succession Act

Section 10 of the Wills, Estates and Succession Act provides for a 5-day survival before a person may inherit from another. For example, if in your will you leave your estate to your spouse, then she must survive you for a period of at least five days (although you may specify a longer survival period in your will).  Similarly, if you and your spouse hold your residence as joint tenants, then for either of you to acquire the whole of the property by right-of-survivorship, the survivor must outlive the other by at least five days. Otherwise, in the case of a joint tenancy, if both joint tenants die within five days of each other, then one-half interest passes through the estate of each co-owner.

Section 10 (1) and (2) read as follows:

10  (1) A person who does not survive a deceased person by 5 days, or a longer period provided in an instrument, is conclusively deemed to have died before the deceased person for all purposes affecting the estate of the deceased person or property of which the deceased person was competent to give by will to another.
(2) If 2 or more persons hold property as joint tenants, or hold a joint account, and
(a) in the case of 2 persons, it cannot be established that one of them survived the other by 5 days,
(i) one half of the property passes as if one person survived the other person by 5 days, and
(ii) one half of the property passes as if the other person referred to in subparagraph (i) had survived the first person referred to in subparagraph (i) by 5 days, and
(b) in the case of more than 2 persons, it cannot be established that at least one of them survived the others by 5 days, the property must be divided into as many equal shares as there are joint tenants or persons holding the joint account, and the shares must be distributed respectively to those persons who would have been entitled to a share in the event that each of the persons had survived.
How are the five days calculated?

The calculation of the five days was considered in reasons for judgment on November 1, 2016, in Todoruk v. British Columbia (Land Titleand Survey Authority), 2016 BCSC 2241. Mrs. Grant died without a will on January 12, 2016 at 4:12 am. She did not have a will. Her husband, Mr. Grant died on January 17 at 1:40 p.m. If he survived her for 5 days, then Mrs. Grant’s estate forms part of Mr. Grant’s estate, and will be distributed in accordance with his will. If not, then Mr. Grant would be considered to have died before her for the purpose of succession of her wealth, and would go to some of her relatives in accordance with the provisions for person’s dying without a will.

Mr. Justice Dley considered three different methods of calculating the time between their deaths as follows:

[7]            Mr. Lund [counsel for the executor of Mr. Grant’s will] submits that there are three ways to calculate the time between the respective deaths:
i) First is by counting the hours. That would result in five days nine hours 28 minutes;
 ii) Second, if clear days are counted, as expressed in s. 25(4) of the [Interpretation] Act, then January 13 becomes the first day and only four days had passed when Mr. Grant died; or
 iii) Third, if the calculation is not to be expressed in clear days, then s. 25(5) applies, with the exclusion of the first day but inclusion of the last day, resulting in an interval of five days.
Mr. Justice Dley rejected both the first method, involving counting hours, and the third method, requiring five clear days between the two deaths, and held that the second method applied. Accordingly, the date of Mrs. Smith’s death (January 12) is excluded in the calculation of the five days, but the date of death of Mr. Smith (January 17) is included on the basis that he was still alive on the fifth day.

In the result, Mr. Smith survived Mrs. Smith by necessary five days, and her estate will form part of her husband’s estate to be distributed in accordance with his will. 

Monday, November 28, 2016

British Columbia's New Societies Act Came into Effect Today

The Societies Act came into effect today, November 28, 2016. The new legislation has made significant changes to the governance of non-profit societies incorporated in British Columbia It replaces the Society Act (the "Old Act"), which is now repealed.

Over the next two years, societies are required to transition to the new Act. This will involve filing a non-profit society's constitution and consolidated bylaws. The constitution will now only include the society's name and purposes. Other provisions that used to be common in constitutions under the Old Act, such as provisions requiring that a society's assets be distributed to a charitable organization if the society is wound up, will be moved to the bylaws.

The Province of British Columbia has published a helpful guide to the transitions available here.

Tuesday, November 22, 2016

B.C. Supreme Court Considers Criteria for Section 151 Application in Bunn v. Bunn Estate

In a reasons for judgment issued on November 18, 2016, Madam Justice Gray considered the tests set out in section 151 of the Wills, Estates and Succession Act for allowing a beneficiary of an estate to bring a claim on behalf of the estate, and in the name of the deceased’s personal representative. The case is Bunn v. Bunn Estate, 2016 BCSC 2146, and the decision provides an indication that a successful application under this section may require the applicant to provide a significant amount of information concerning the merits of a claim, and sufficient evidence for the court to weigh the costs of proceeding with the potential benefits to the estate of doing so.  Although this is not the first reported decision on section 151, in the other case of which I am aware, Werner v. McLean, 2016 BCSC 1510, the application for an order under section 151 was not opposed, and, accordingly, the court did not need to consider the tests in depth.

Section 151 is a new provision that came into effect with the Wills, Estates and Succession Act, and I am not aware of any similar provisions in other Canadian provinces. Accordingly, this case may very well lay the foundations for future decisions in British Columbia.
This section provides as follows:

151  (1) Despite section 136 [effect of representation grant], a beneficiary or an intestate successor may, with leave of the court, commence proceedings in the name and on behalf of the personal representative of the deceased person
(a) to recover property or to enforce a right, duty or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or
(b) to obtain damages for breach of a right, duty or obligation owed to the deceased person.
(2) A beneficiary or an intestate successor may, with leave of the court, defend in the name and on behalf of the personal representative of a deceased person, a proceeding brought against the deceased person or the personal representative.
(3) The court may grant leave under this section if 
(a) the court determines the beneficiary or intestate successor seeking leave
(i) has made reasonable efforts to cause the personal representative to commence or defend the proceeding,
(ii) has given notice of the application for leave to
(A) the personal representative,
(B) any other beneficiaries or intestate successors, and
(C) any additional person the court directs that notice is to be given, and
(iii) is acting in good faith, and
(b) it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a beneficiary or an intestate successor for the proceeding to be brought or defended.
(4) On application by a beneficiary, an intestate successor or a personal representative, the court may authorize a person to control the conduct of a proceeding under this section or may give other directions for the conduct of the proceeding.
In Bunn, Jennifer Bunn, one of the beneficiaries of her mother’s estate, wished to bring a claim against her brother challenging a number of gifts and transactions made by their mother during the mother’s lifetime. The beneficiary alleged, among other things, that her brother obtained benefits by exercising undue influence over their mother.

She requested that her cousin, who was her mother’s executor, bring the claim on behalf of the estate, but he refused to do so. The executor reviewed the transactions and in his view, the transactions were done with the mother’s knowledge, and were not induced by the exercise of undue influence.

In this case,  Madam Justice Gray found that the applicant had made reasonable efforts to cause the executor to bring the claim, that she had given proper notice of the application to the executor and the beneficiaries, and that she was acting in good faith.

Madam Justice Gray considered the further requirements of the section, and looked at by analogy the jurisprudence in respect of derivative actions by shareholders on behalf of a company under the Business Corporations Act. She addressed the criteria for exercising her discretion as follows:

[48]         Both s. 151 of WESA and s. 233 of BCA give the court discretion as to whether to make the order sought by using the words that the court “may” grant leave.
[49]         As set out in Primex [Investments Ltd. v. Northwest Sports Enterprises Ltd. (1995), 13 B.C.L.R. (3d) 300 (S.C.), aff’d (1997), 26 B.C.L.R. (3d) 357 (C.A.)], an applicant for derivative leave must establish not only an arguable case, but also that the potential relief in the proposed action is sufficient to justify the inconvenience to the company of being involved in the action.
[50]         In my view, a proceeding may be “necessary” under s. 151 of WESA if the personal representative is unwilling or unable to proceed. It may be “expedient” if it is in the best interests of the estate.
[51]         In this case, the applicant is a beneficiary of the Estate and seeks the order under s. 151 of WESA on the basis that the claim, if successful, will increase the value of the Estate. In such a case, in my view, to satisfy the court that it should exercise its discretion to grant leave to commence litigation on behalf of the estate, the applicant must show not only that there is an arguable case, but also that the potential relief in the action is sufficient to justify the inconvenience to the estate of being involved in the action, and that proceeding is overall in the best interests of the estate. In my view, that must involve a consideration of the costs of proceeding, including the potential of a costs award against the estate if it fails. Further, in my view, in determining whether the proposed lawsuit appears to be in the best interests of the estate, the court can consider the strength of the proposed claim based on a limited weighing of the evidence.
[52]         I reject the argument made by the Proposed Defendants to the effect that the court should show deference to the views of the executor, and grant leave only if the executor is in a conflict of interest. The views of the executor and the basis of those views are simply a factor for consideration.
Madam Justice Gray then analyzed the evidence before her and the law in some depth (the analysis of undue influence provides a very clear treatment of the subject, but for the purpose of this post, I am focused on section 151).  She concluded that the applicant did not have an arguable case in respect of any of her claims.

But even if the applicant had persuaded the Court that she had an arguable case, Madam Justice Gray wrote that she would have required more information concerning the economic s of the litigation, including costs and potential benefit to the estate, before exercising her discretion to allow the applicant to bring the claim on behalf of the estate. She wrote,

[232]     Jennifer’s evidence does not set out a plan for the litigation. She has not provided an estimate of how much the litigation would cost to prosecute, or explained who she proposes would pay the prosecution costs initially and ultimately, or detailed what funds would be available from her or in the Estate to satisfy an award of costs in favour of Chris or Charters or both of them. In my view, the court should be provided with such evidence by an applicant for leave to commence an action on behalf of an estate.
[233]     If Jennifer had established an arguable case to challenge any of the transactions, and the Court were to consider whether the proposed litigation was in the best interests of Joyce’s Estate, the Court would require further information to determine whether the potential relief in the action would be sufficient to justify the inconvenience to the Estate of being involved in the action.
Madam Justice Gray dismissed the application.

This case indicates that to successfully make an application under section 151 a beneficiary will need to provide the court with ample materials to show that there is an arguable case, and to allow the court to weigh the costs and the benefits of allowing the beneficiary to bring a claim on behalf of the estate. 

Sunday, November 20, 2016

Finance Minster Morneau's Changes to Principal Residence Exemptions Create More Impediments to Good Estate Planning

On October 3, 2016, Finance Minster Morneau announced changes to the principal residence exemption which will in some circumstances create hardship for beneficiaries of trusts. The principal residence exemption allows you to shelter your principal residence from capital gains on the sale, provided you and the residence meet the necessary criteria under the Income Tax Act, Canada.

The change to the principal residence exemption that has garnered the most publicity, and which does not particularly concern me, is the requirement that the sale of a principal residence be reported on the seller’s tax return.

The changes that do concern me from an estate-planning perspective are the new restrictions on the ability to claim the principal residence exemption in a trust where a beneficiary is using the residence as a principal residence. It will only be available in certain circumstances for certain kinds of trusts, such as  an alter ego or joint partner trust, a testamentary trust that qualifies as a disability trust for a disabled beneficiary, and a trust created for a minor child if both of the minor child’s parents have died.

Here is part of the explanatory notes from the Department of Finance:

In the case where the taxpayer is a personal trust, a property does not qualify as the trust's principal residence for a taxation year unless the requirements in paragraph (c.1) of the definition are met. That paragraph includes the requirements that the trust designate, in prescribed form, the property as the trust's principal residence for the taxation year and that the designation identify each individual who in the taxation year is a specified beneficiary of the trust for the year. For this purpose, a specified beneficiary of a trust for a taxation year is an individual who in the taxation year is beneficially interested in the trust and who (or whose spouse or common-law partner, former spouse or common-law partner or child) ordinarily inhabits the housing unit in the taxation year.
Paragraph (c.1) is amended to introduce additional requirements in order for a property to qualify as a trust's principal residence for a taxation year that begins after 2016.  In general terms, these requirements are that the trust be an eligible trust one of whose beneficiaries (the "eligible beneficiary") is resident in Canada in the year and a specified beneficiary of the trust for the year. In addition, where the trust acquires the property on or after Announcement Date, the trust's terms must provide the eligible beneficiary with a right to use and enjoy the housing unit as a residence throughout the period in the year that the trust owns the property. Eligible trusts fall into three categories, although a trust may qualify as an eligible trust under more than one of the categories:

In the first case, an eligible trust is an alter ego trust, spousal or common-law partner trust, joint spousal or common-law partner trust, or certain trusts for the exclusive benefit of the settlor during the settlor's lifetime. In this case, the eligible beneficiary is the individual whose death (at any time after the start of the year) determines a day for the trust under subsection 104(4).  In effect, the eligible beneficiary must be, depending upon the type of trust, the trust's settlor, or the spouse or common-law partner or former spouse or common-law partner of the settlor. A joint spousal or common-law partner trust may have more than one eligible beneficiary for a taxation year.
In the second case, an eligible trust is a testamentary trust that is a qualified disability trust for the taxation year. In this case, the trust's eligible beneficiary must be an electing beneficiary under the trust for the year who is a spouse or common-law partner, former spouse or common-law partner or a child of the trust's settlor. The trust may have more than one eligible beneficiary for a taxation year.
In the final case, an eligible trust is a trust (inter vivos or testamentary) the settlor of which died before the start of the year. In this case, the eligible beneficiary must be a minor child of the settlor whose parents (i.e., the settlor and the other parent) are deceased before the start of the year. The trust may have more than one eligible beneficiary for a taxation year.
Here are a few examples of situations where the trust will not be able to claim a principal residence exemption.
  1. A parent creates a trust during the parent’s lifetime for a child with a disability, and the trust holds the child’s residence. Because the trust is not testamentary (not created by a will, or otherwise arising as a consequence of the parent’s death), the residence will not be eligible for the principal residence exemption. Worst, because of the deemed disposition of assets in a trust every 21 years, the child could lose her residence if there are no other funds available to pay the tax.
  2. Even if a trust described above were created by a will, it might not qualify if there is another trust in respect of the child that has already been designated as a qualified disability trust.
  3. A parent creates a trust in his or her will for a child who has had drug addiction problems in order to provide for the child, but also protect the child in case of a relapse. The trustee purchases a residence for the child but holds it in the trust in order to retain control. The residence will not qualify for the principal residence exemption.
  4. A parent, who was divorce from the other parent, leaves her residence to her minor child. The other parent lives with the minor child in the residence, thereby allowing the child who has lost a parent to remain in the same home. The residence will not qualify.

As far as I am aware the Minister of Finance did not consult with estate-planning professional organizations.  In previous posts, I criticized the Harper Government for some of its tax changes relating to estates and trusts, but it seems the assault on trusts, and good estate planning continue under the Liberal Government. 

Wednesday, November 02, 2016

May a Lawyer's Notes or Draft Will be Given Effect as a Will in British Columbia if the Client Dies Before Completing her Will?

Uppermost in the mind of an estate-planning lawyer is the risk that a client will give instructions for a will, but die before the will is signed. This is naturally more of a concern if the client has been diagnosed with a terminal illness, but can happen any time. Can the client’s instructions to the lawyer be given effect? Up until the Wills, Estates and Succession Act (“WESA”) came into effect about two –and-a-half years ago, my answer in British Columbia would have been “no,” unless the lawyers notes were signed and witnessed in accordance with the formal requirements for a valid will, which is unusual.

Now, the court may give effect to a document, or other record, that does not comply with the formal signing and witnessing requirements for a valid will. The Supreme Court of British Columbia could give effect to a lawyer’s notes or perhaps an unsigned will. The relevant section of WESA is section 58.

Still, my view is that in most circumstances, the lawyer’s notes or a draft will is not likely to be given effect without some further evidence that the lawyer’s client intended those notes or document to operate as her will. I caution that the case law is in the early stages of development in British Columbia, and each case is decided on its own peculiar facts.

I will refer to two cases, one in British Columbia, Re Bailey Estate, 2016 BCSC 1226, and the other in Manitoba, Timm v. Rudolph, 2016 MBQB 123 (CanLII). Manitoba has a provision similar to section 58 of WESA, and British Columbia courts have followed the leading Manitoba cases on giving effect to non-compliant documents.

In Re Bailey Estate, Jann Bailey met with her lawyer on May 24, 2013, and gave her instructions for a new will, which included naming her husband, Alan Quinn as executor, and leaving property in Northern Ireland to him. The lawyer drafted a will and sent it to Ms. Bailey. They met again in July, 2014, Ms. Bailey having missed a number of scheduled meetings. The lawyer made further changes, and sent another draft to Ms. Bailey. They had a further meeting on October 20, 2014, in which Ms. Bailey provided some instructions for her personal possession, and sent instructions in respect of her remains by email on October 30. The lawyer sent a further draft will on December 14, 2014, and sent emails to Ms. Bailey following up on the draft will in March and May, 2015. Ms. Bailey told her investment advisor in June that she needed to make another appointment to complete her will. She died on October 9, 2015, without signing the will.

Madam Justice Hyslop found that the evidence was insufficient to satisfy the criteria required to give effect to the December, 2014, draft will, that it represented Ms. Bailey’s deliberate and final testamentary intentions. She wrote,

[50]         I conclude that the preparation and the anticipated execution of the December 2014 draft will was not of paramount importance to Ms. Bailey. She gave instructions at different times, she missed meetings with Ms. Cates [the lawyer], there was a fee dispute, she put off reading a previous draft, and she postponed making an appointment to see Ms. Cates to review the will despite reminders by Ms. Cates by email on March 16 and May 7 of 2015. Ms. Bailey did not tell Ms. Cates whether she wanted changes to the December 2014 draft will or whether she wanted to execute it.
[51]         On July 31, 2015, Ms. Cates’ spouse, Mr. Erlank [her investment advisor], met Ms. Bailey relating to investment matters. She told Mr. Erlank that she needed to set up an appointment “to complete” the December 2014 draft will. This statement, taken at its best, indicates that she wanted to replace her 2008 will with a new will. This also could mean that she had changes to make. She did not say to Mr. Erlank that she intended on signing the December 2014 draft will.
[52]         Between May of 2013 and December 8, 2014, Ms. Bailey did not indicate to anyone whether the December 2014 draft will set out her intentions. Despite Ms. Cates’ opinion that the will represented a deliberate and final expression of Ms. Bailey’s intentions, there is nothing that comes from Ms. Bailey either in word, deed or in writing as to whether the December 2014 draft will represented her final testamentary intentions.
[53]         For over two years, Ms. Bailey did not revoke her 2008 will by word or deed. Unlike Ms. Young [in Re Young Estate] , Ms. Beck [in Re Beck Estate] and Ms. Yaremkewich [in Re Yaremkewich Estate], Ms. Bailey left nothing, either electronic or on paper that the December 2014 draft will represented her final intentions. There simply was no expression by Ms. Bailey whether the December 2014 draft will was a final expression of her testamentary intentions.
The Manitoba case, Timm v. Rudolph, 2016 MBQB 123, appears to provide more compelling circumstances for giving effect to a non-compliant document as a will, but here again, the court did not find sufficient evidence to do so.

Following her diagnosis of terminal cancer, and while she was in palliative care, Shirley Timm-Rudolph, asked her daughter to arrange for a lawyer to take will instructions . Ms. Timm-Rudolph was married to Edwin Henry Rudolph, and she had a daughter from a previous relationship. Mr. Rudolph also had a daughter from a previous relationship.

On May 7, 2014, an articling student met with Ms. Timm-Rudolph and took instructions for a new will. The articling student made notes indicating that Ms. Timm-Rudolph wished to appoint her daughter as executor, and leave the residue of her estate to her on the condition that Mr. Rudolph would have the use of her half-interest in their cottage during his lifetime.

The articling student asked Ms. Timm-Rudolph to endorse the notes, and she signed the first page, and initialed the second. He then drafted a will and other estate-planning documents for her to sign, and arranged to return the following Monday. The articling student’s evidence was that he asked her to sign the notes in order to confirm her instructions, and avoid a potential fee dispute if she later said that the will he was going to draft did not reflect her instructions.

Ms. Timm-Rudolph passed away before the articling student’s attendance at the hospital for her to complete the will. Less than three months later, her husband died without a will. If the notes or the draft will could not be given effect, the result would be that Mr. Rudolph’s daughter would receive Ms. Timm-Rudolph’s estate which would pass to Mr. Rudolph, and then to his daughter.

Mr. Justice Dewar found that Ms. Timm-Rudolph did not intend the notes to operate as a will, and accordingly could not be admitted into probate as a will. His reasons are as follows:

[35]        Even a liberal reading of the evidence in this case does not permit the conclusion that Shirley intended that Mr. Haddad’s [the articling student’s] notes were to operate provisionally until the more formal will was prepared.  It is clear from the above excerpts that there certainly was no intention on the part of Mr. Haddad that his notes would ever be submitted to probate even after Shirley affixed her signature.  His purpose in obtaining the signature was to avoid a fee dispute.
[36]        Teena  [Ms. Timm-Rudolph’s daughter] argues that notwithstanding Mr. Haddad’s purpose, Shirley signed the document and therefore, it must be acknowledged that its contents contained her testamentary intention.  However, the George v. Daily decision requires more than the expression of how a person wishes her estate to be distributed.  That decision requires an intention on the part of the deceased person that the document could be usedas a testamentary document.  That intention simply cannot be inferred on a balance of probabilities in this case.
[37]        There is no doubt that Mr. Haddad’s notes were simply a record of instructions given preliminary to the preparation of a formal will.  The evidence before me indicated that Shirley did not consider her death to be imminent, and that she expected that Mr. Haddad would be returning with a formal will well within her expected lifetime.  But perhaps what is most compelling is that Mr. Haddad offered to assist her in making a holograph will (which would serve at least an interim purpose), and she declined that invitation.  Her signature and initial on the notes may well evidence the framework as to how she wished to leave her estate, but they do not signify that she intended that very document to be regarded as her will, even on an interim basis.  She felt that there was time for the formal will to be prepared and properly executed.  She declined the preparation of a holograph will which could have been prepared right there and then.  These facts, assessed objectively, do not permit the use of s. 23 of the [Manitoba Wills] Act to render Mr. Haddad’s notes a testamentary document admissible for probate.
[38]        It should also be remembered that the proposed will which Mr. Haddad intended to present to Shirley on the Monday contained provisions, albeit common provisions, that do not appear to have been discussed with her when the will instructions were taken.  The gifting of personalties, however reasonable a suggestion it may be, on the evidence before me was still only a suggestion, having not been reflected in Mr. Haddad’s notes.  Similarly, the power which was given to the trustees to encroach upon both capital and income for the children’s contingent bequest does not appear to have been discussed with Shirley.  Invariably, when lawyers actually sit down to draft a will, they realize that they have not discussed some of the details with the client.  Nonetheless, they prepare a draft which includes the details which they consider most reasonable, and present it to the client for the client’s consideration at the time of execution.  It would be presumptuous for a legal regime to encourage the probate of a will when the details of some gifts have never been discussed with the client.  Unless it is clear that a client intended that the lawyer’s notes would act as his/her will in the interim, as a general rule, it is most reasonable to conclude that even in the mind of the deceased, the notes of an attending lawyer reflect only a work in process, not the final product.

In both these two cases, the courts declined to give effect to the documents. I don’t suggest that a lawyer’s notes or an unsigned draft will may never be given effect, but something more than evidence that the documents reflected the client’s instructions may be required, such as evidence that the client thought that the notes or draft would operate as a will if he or she died before signing a new will. 

Sunday, October 16, 2016

British Columbia Law Institute

I have recently completed my second and final three-year term as a member and director of the British Columbia Law Institute. I was a big fan to begin with, but having seen closer up how the organization works, I am a bigger fan coming out.

The purposes of the BCLI, as both described in its constitution, and in practice, are to:

·         promote the clarification and simplification of the law and its adaptation to modern social needs, 
·         promote improvement of the administration of justice and respect for the rule of law, and
·         promote and carry out scholarly legal research.

The BCLI is in its functions the successor to the British Columbia Law Reform Commission. When I first started practicing law, I had a very broad practice, and often had to learn different areas of law quickly. I discovered in my office various reports by the Law Reform Commission. The reports provided excellent, very readable summaries of the law, and found them a good starting point. Now that I have a much more focused practice, I find myself still looking at reports in my practice area of wills, estates, trusts and related litigation. For example, many of the provisions of the new, well relatively new, Wills, Estates and Succession Act were based on recommendations of the BCLI Report Wills, Estates and Succession: a Modern Framework. When I am trying to grapple with understanding the changes to B.C.’s succession law, I often turn to this Report to find out the underlying reasons for the changes, which in turn helps me better understand the legislation. Courts may also look at the Report as an aid in interpretation.

The membership of the organization is comprised of a broad cross section of our profession, including lawyers in private practice, from big firms and small, law professors, and notaries. The key to its success, though, is the quality of the staff lawyers, who provide a very high level of scholarship, and who write with tremendous clarity.

The BCLI is independent from government. It gets some of its funding from government, but also from private sector and from non-profit organizations such as the British Columbia Law Foundation.
When the BCLI takes on a project, there is usually a project committee set up. Each project committee includes one or more of the BCLI directors and staff, but also lawyers and other professionals with experience in the relevant area of law. The highlight of my involvement with the BCLI was serving on the project committee on the Project on Potential Undue Influence:Recommended Practices for Wills Practitioners, which was chaired by Peter Ramsay Q.C., with Greg Blue Q.C. as the project manager.

I am not going to try to mention all of the people involved with BCLI during my six years as a member. The chairs during that time were Peter Ramsay Q.C., Tino Di Bella, and Professor Joost Blom Q.C. Jim Emmerton was the executive director when I first came on, and, following Jim’s retirement, Kathleen Cunningham is now the executive director.

The BCLI is also responsible for the Canadian Centre forElder Law, which focuses on law reform and proving information of interest to older adults. Krista James is its national director.

Sunday, September 18, 2016

Ministry of Justice Seeking Comments on the Presumption of Advancement and Property Division Under the Family Law Act

The British Columbia Ministry of Justice has published a Discussion Paper: The Presumption of Advancement and Property division under the Family Law Act, and is seeking comments until September 30, 2016.

The issues relate to the question of whether the presumption that when a married spouse transfers property to the other spouse the spouse making the transfer intends to make a gift should apply to make property that would otherwise have been excluded from the property that is divided on a marriage breakdown included property. I wrote about the decision in V.J.F. v S.K.W., 2016 BCCA 186 in my post “What Happens to Funds Inherited by a Spouse on the Breakdown of the Marriage.” In the V.J.F. case, the husband had inherited $2 million which he used to purchase real estate in his wife’s name. The trial judge had found that the husband had failed to rebut the presumption of advancement and that the real property was a gift to the wife. The court divided the land equally between the spouses. Had the husband bought the land using the inherited funds in his own name, the land would have been excluded from the division of property because it was an inheritance.

The Ministry of Justice poses the following questions in the Discussion Paper:
1. Is it more consistent with fairness between spouses for the FLA to provide that gifts of excluded property between spouses transfer beneficial ownership or to allow excluded property to always retain its excluded status? Consider the example of RRSP’s or other investments purchased with the excluded property of one spouse and registered in the name of the other spouse? Should the value of the excluded property be returned to the transferor spouse or treated as family property under Part 5 of the FLA? 
2. The BCCA decision in VJF suggests that a spouse who wants to rebut the presumption of advancement can enter into an agreement that sets out that property exchanged between them is not a gift. Is this a practical way for spouses to address the issue? 
3. Should consideration be given to amending the legislation to explicitly abolish the presumption of advancement for the purposes of Part 5 of the FLA entirely? Or, should consideration be given to adopting the approach used in other provinces? 
4. If the presumption is not abolished for purposes of Part 5 of the FLA, should the FLA be clarified to ensure that the presumption also applies to those non-married spouses to whom Part 5 of the FLA applies?
5. The BCCA decision in VJF alludes to the usefulness of the presumption of advancement to ensure fairness between spouses. If the presumption of advancement continues to apply to matters under Part 5 of the FLA, does section 95 of the FLA provide sufficient flexibility to allow a Court to address any alleged unfairness caused by excluded property being converted to family property?
6. The BCCA decision in VJF alludes to the usefulness of the presumption of advancement to ensure fairness between spouses. If the presumption of advancement continues to apply to matters under Part 5 of the FLA, does section 95 of the FLA provide sufficient flexibility to allow a Court to address any alleged unfairness caused by excluded property being converted to family property? 
7. If the presumption of advancement is specifically abolished regarding matters under Part 5 of the FLA, does section 96 of the FLA provide sufficient flexibility to allow a Court to address any alleged unfairness that results from the tracing of excluded property? 
8. Are there other “rights under equity or any other law” that may interact with Part 5 of the FLA which require examination?

You may respond by mail or email as follows:

By regular mail: Civil Policy and Legislation Office
Justice Services Branch
Ministry of Justice
PO Box 9222, Stn Prov Govt
Victoria, BC V8W 9J1

By email: