Saturday, April 05, 2008

Maxim v. Cameron

Lani Maxim sued her sister Lori Cameron and her sister’s husband Laurence Cameron. She alleged that they had obtained title to her parent’s house by exercised undue influence over her parents. She asked the court to declare that her sister and brother-in-law held a one-half interest in the house in trust for her.

The title to the house had been registered in the names of her parents, Mr. and Mrs. Barnes, as joint tenants.

Ms. Cameron, her four children, and her husband lived with her parent’s home, in a basement suite. Mr. and Mrs. Barnes had a very close relationship with Mrs. Cameron’s children. The Ms. Cameron had spent money on the house, and she and her husband provided considerable assistance to her parents, especially when Mrs. Barnes was sick with cancer.

In 2002, Mr. and Mrs. Barnes signed a transfer in the presence of a notary public, transferring the title to the house into the names of Mr. and Mrs. Cameron. It was worth about $250,000 and comprised most of their wealth.

After the transfer, Mrs. Barnes died, but Mr. Barnes was still alive, and living in the house, when Ms. Maxim sued Mrs. Cameron.

Lani Maxim and several witnesses testified that Mr. and Mrs. Barnes had said that the house would go to both daughters when Mr. and Mrs. Barnes died. Mr. and Mrs. Cameron said that her parents agreed to give them the house if they paid property taxes owing on the house, some credit card debt, and provided care to the Barnes.

Mr. Barnes testified by video deposition. He was quite sick, and was forgetful. He denied that Mrs. Cameron or her husband unduly influenced him. He was not sure of the reason for the transfer. But he said that they looked after him.

There was evidence that Mrs. Barnes made financial decisions for both Mr. and Mrs. Barnes.

Mr. Justice Scarth, in Maxim v. Cameron, 2008 BCSC 377, considered whether a presumption of undue influence applied in this case because of the nature of the relationship between the Camerons and the Barnes. If so, the next question was whether Mr. and Mrs. Cameron rebutted the presumption.

He found that the presumption did apply. The nature of the relationship had the potential for the Camerons to dominate. Mr. and Mrs. Cameron were providing Mr. and Mrs. Barnes with considerable care. They were considering leaving to move into their own place. Mr. Justice Scarth reasoned that the threat of moving would be a powerful tool in persuading Mr. and Mrs. Barnes to transfer the title.

Mr. and Mrs. Cameron were unable to rebut the presumption of undue influence. Although Mr. and Mrs. Barnes signed the transfer in front of a notary public, there was no evidence that they got any legal advice. Although the notary met alone in his office with Mr. and Mrs. Barnes, the door to his office was open, and Mrs. Cameron was just outside the door.

Mr. Justice Scarth found that there was no basis to make an award in favour of Ms. Maxim. But he did set aside the transfer, and ordered that the title go into Mr. Barnes’ name as the surviving joint tenant.

I find this result interesting. It should be noted that Mr. Barnes was not asking for the title to be transferred back into his own name. The court had not found him to be incapacitated from making his own decisions. Ms. Maxim was suing on her own behalf, and not on her father’s behalf. She was not his attorney under a power of attorney, nor his representative under a representation agreement. The court had not appointed her a committee (in other words an adult guardian) of her father’s affairs. In short, she had no standing to bring a claim on behalf of her father.

If Mr. Barnes were incapable of managing his affairs, the appropriate course for Ms. Maxim would have been to either apply to court to be appointed his committee, or asked the Public Guardian and Trustee of British Columbia to take over his affairs and seek to have the transfer set aside.

If he is capable of managing his affairs, then Ms. Maxim might be able to bring a claim after his death. But I don’t see any basis for one person to sue to get a house transferred back into the name of a competent person who doesn’t want it.

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