Temoin v. Martin

If you believe that a member of your family, or a friend, is no longer capable of managing himself or his affairs, you may apply to the Supreme Court of British Columbia to be appointed as a committee, or in other words a guardian, of the incapacitated person. To succeed, the Patients Property Act provides that you must have affidavits from two medical practitioners providing their opinions that the person you are seeking to have declared incapable is in fact incapable.

But what if the person you believe is incapable refusing to be examined by a physician? Can you apply to court for an order that he be examined?

Madam Justice Fisher considered this question in a decision last week, Temoin v. Martin, 2011 BCSC 1727.

Lynn Temoin was seeking an order declaring that her father, Llewellyn Martin, was incapable of managing his own affairs. There was evidence that he had memory loss, and she was concerned that his wife, Ms. Temoin’s step mother, was taking advantage of his weakened mental functioning to persuade him to change his will and estate plan to benefit his wife and her children. A psychiatrist examined Mr. Martin, and opined that Mr. Martin had mild dementia and that he did not have capacity to make a will. But the psychiatrist did not conduct an examination of his ability to manage his own affairs.

Mr. Martin declined to undergo examinations to determine his capacity to make his own financial decisions, and Ms. Temoin applied for an order that he be examined by two physicians.

The Patients Property Act has a provision in section 5 allowing the court to order someone to attend before a physician for an examination, but the Court of Appeal, in McNeal v Few, (1975) 63 BCLR 281 (CA), held that the court could only make an order under what is now section 5 for an examination if there was already affidavit evidence of incapacity from two physicians.

Ms. Temoin argued that there is a legislative gap in the Patients Property Act, and the Supreme Court of British Columbia had inherent jurisdiction, known as the parens patriae jurisdiction, to order an examination to protect a vulnerable person.

Madam Justice Fisher agreed that the Court has the jurisdiction to make an order that a person in respect of whom an application is made attend an examination with a physician. But it is a power that the Court should employ sparingly. She wrote at paragraph 63:

[63] There is no question that compelling a person to submit to a medical examination is intrusive to personal autonomy and any order doing so would have to respect the values of the Canadian Charter of Rights and Freedoms. It is an order that should be made in rare circumstances, where there is “proof of incompetence” and where there is a compelling need for protection. The need for protection may be based on evidence that the person is personally or financially vulnerable due to things such as dangerous or erratic behaviour or abuse by others. The exercise of parens patriae jurisdiction requires that any order made is in the best interests of the person requiring protection.

On the facts before her, Madam Justice Fisher declined to make an order that Mr. Martin be examined by two physicians. She found there was insufficient evidence of his capacity and vulnerability. She wrote:

[64] Re Eve [[1986] 2 SCR 388,] is not instructive about what “proof of incompetence” means. In my view, there must be evidence which establishes that the person who is the subject of the application is prima facie incompetent. For the purpose of ordering a medical examination, this will be something less than the court being satisfied that the person is incapable of managing himself or his affairs. There must be some medical evidence. There may also be evidence from family, caregivers and close friends, which may provide important insight into the condition of the individual and any need for protection. I agree with the comments of Vickers J. in [British Columbia (Public Trustee of) v Batiuk, (1996), 14 ETR (2d) 5] Batiuk #1 (at para. 35) that “proper assessments are multi-disciplinary in nature and they will include the observations of persons close to the individual concerned.” This is consistent with the commentary in G. B. Robertson, Mental Disability and the Law in Canada, 2nd. Ed. at 27.

[65] In this case, I am not satisfied that the evidence is sufficient to establish that Mr. Martin is prima facie incompetent or that he is in need of protection. There is evidence that Mr. Martin has memory problems and some cognitive deficits. However, there is little evidence that he is incapable of managing his affairs, and there is conflicting evidence on his ability to make financial decisions. There is no evidence that Mrs. Martin has taken advantage of her husband in any way that requires this Court’s protection.

Court of Appeal Reaffirms When Limitation Period Begins to Run for Delayed-demand Notes

The British Columbia Court of Appeal has reaffirmed the rule that the limitation period of six years in British Columbia does not begin to run until the creditor has made a demand for payment under a promissory note that was made payable after a specified period of time from demand (a delayed-demand note). The case is Ewachniuk Estate v. Ewachniuk, 2011 BCCA 510.

In that case, the defendant’s mother had lent him $750,000 in 1980. He signed a promissory note stating that the $750,000 was “payable one (1) year after demand, without interest.”

After the defendant’s mother’s death, the administrator of her estate demanded payment under the note on November 29, 2008. The defendant refused to pay, and the administrator sued on July 23, 2009.

The Supreme Court of British Columbia relying on previous cases, including Zeitler v. The Estate of Alfonse Zeitler, 2008 BCSC 775 (which I wrote about here), held that the limitation period did not begin to run until a year after the administrator demanded payment. The cause of action, or right to sue, only arises after the demand, and the time for payment has expired. The limitation period does not begin to run until the creditor has a cause of action.

A delayed-demand note may be contrasted with a demand note, which is a promissory note payable “on demand.” In the case of a demand note, the limitation period begins to run when it is signed, even if the creditor does not demand payment. (In the case of a demand note, the running of the limitation period may still be postponed if within six years of the date the note is made, the debtor makes payments or acknowledges the debt in writing.)

The defendant appealed the Supreme Court of British Columbia’s decision, challenging the authority of cases and texts going back 200 years relied upon by the trial judge. He also argued that a delayed-demand note function like demand notes and it is anomalous to treat them differently. In both cases, the defendant argued, there should be a “finite and predictable limitation period.” Furthermore, because the creditor does not have to make a demand, there is effectively no limitation period.

The Court of Appeal rejected the defendant’s arguments and held that the limitation period does not begin to run until after the creditor has demanded payment, and the period of time for payment under the note has expired.

With respect to the argument that there is effectively no limitation period if demand is not made, Chief Justice Finch noted that there are other equitable defenses if a creditor unreasonably delays in perusing a claim that may apply to a claim when the Limitation Act does not apply.

The distinction between a demand promissory note and a delayed-demand promissory note is an important one in practice. I often see these in loans within a family. Parents may make a loan to a child to assist her. The parents may not have any real need for repayment, but may wish the loan to be repaid in some circumstances, such as if there is a breakdown of the child’s marriage. If the loan is a demand loan, they may find out that the limitation period has expired when they demand repayment. A delayed-demand note affords greater protection to the parents, by delaying the time from which the limitation period begins to run.

Fat Cats & Lucky Dogs

I have just finished reading Fat Cats & Lucky Dogs: How to leave (some of) your estate to your pet by Barry Seltzer and Gerry Beyer, and published by Prism Publishing Inc., 2010.

Fat Cats & Lucky Dogs offers practical advice on planning for your companion animals in case you die before them or you become incapacitated and are no longer able to care for your pets. The authors identify five situations in which your pets can run into problems. They are:

1. When you are incapacitated.
2. Immediately after you die and your pets are home alone.
3. Between the time you die and the time your will is read.
4. Between death and the admission of your will to probate.
5. The ongoing period after your death.

You can plan for each of these five situations, and the authors offer suggestions for each of them, ranging from informal arrangements such as asking a friend to take care of your pet and then leaving your pet to that person in your will, to formal trusts with funds provided on an ongoing basis to your caregiver, with an independent trustee and protector to monitor the administration of the trust.

This book is written for pet owners, and is easy to read. As the title implies, the book has a nice playful style, with pet trivia or “factoids,” and humourous quotations. One of my favourite quotations has to come from one of my favourite humour writers, Dave Barry:

You can say any fool thing to a dog, and the dog will give you this look that says, ‘My God, you’re RIGHT! I NEVER would’ve thought of that!’

Fat Cats & Lucky Dogs sets out the legal framework for estate planning for pets, in Canada and the United States, and to a lesser extent in Australia, New Zealand and the United Kingdom. As the authors note, the law does vary from place to place. I found it quite interesting to learn that many States in the United States have legislation recognizing and facilitating the creation of trusts for animals.

There is a variety of resources in the appendices, such as a summary of state laws, a list of prohibited versus acceptable animals as pets, and contact information for animal retirement homes, temporary pet care providers and sanctuaries.

Fat Cats & Lucky Dogs was helpful to me as an estate-planning lawyer in raising my awareness of some of the issues those of my clients with pets should consider in their estate and incapacity planning.

Barry Seltzer is a lawyer practicing in Richmond Hill, Ontario. Gerry Beyer is Governor Preston E. Smith Regents Professor of Law, at Texas Tech University School of Law. Professor Beyer is also the author of Wills, Trusts & Estates Prof Blog.

When to Go to Court, and When to Settle.

Anytime you are involved in a will or estate dispute you have recourse to the courts. Sometimes it is difficult to resolve a problem without the involvement of a judge. Certain cases need to be decided by a judge. On the other hand, many disputes are best resolved by negotiations. Two Supreme Court of British Columbia decisions, both released the same day, November 25, 2011, illustrate this point well.

In Re: Brooks Estate, 2011 BCSC 1606, Mr. Justice N. Smith was asked to interpret a homemade will. The will said:

“I leave my property [address and legal description of the real property] to my brother George Brooks [address] Executor with Power of Attorney. Also my accounts at Royal Bank of Canada Merritt B.C.”

This was followed by the names of five of the will-maker’s nieces and nephews, and then the words “I would all the people named above to share equally in my estate.”

George Brooks argued that the will-maker intended for him to receive the house and the bank accounts, with the rest of the will-maker’s estate to be shared among the nieces and nephews.

Mr. Justice Smith noted the remainder of the assets in the estate was only worth about $500. It was unlikely that the will maker meant such a small amount when he wrote that they would “share equally in my estate.” The plain meaning of the word “estate” included all of the estate assets.

Accordingly, Mr. Justice Smith interpreted the will to mean that all of the will-maker’s assets would be divided equally among George Brook and the nieces and nephews.

He also ordered that the costs of all of the parties be paid out of the estate. He noted that it was appropriate for George Brooks as the executor to bring the question to court:

“[19] Given the positions of the parties, the petitioner as executor had a duty to seek guidance from the court and it was in the interest of all parties that he do so. I therefore order that the special costs of all parties be paid from the estate.”

Contrast Mr. Justice Smith’s remarks above, with the Court’s plea to the parties in Hansen v. Hansen, 2011 BCSC 1601, to settle their disputes out of court.

Hansen concerns a dispute among siblings over how one of them, the executor of their father’s will handled the administration of his estate. The executor’s siblings were critical of her handling of their father’s house. It is not clear from the reasons for judgment what precisely their claims were, but in an earlier hearing on a passing of the executor’s accounts, the Registrar found that she had delayed too long in marketing the house, and did not receive an appropriate amount of income from the property for the estate. The Registrar also disallowed some of her expenditures.

As noted above, the executor had passed her accounts before the court, a process that included a two-day hearing before the Registrar. It appears that the executor’s siblings were also suing her for negligent handling of the estate. The executor brought an application to dismiss their claims on the basis that the subject matter of their claims had already been dealt with at the passing of accounts.

Mr. Justice Leask heard the executor’s application. Although he expressed some sympathy for her position, he held that the passing of accounts decided the amount of the executor’s remuneration, but the court had not rendered a decision on the other claims. The executor’s siblings were entitled to proceed with those claims.

In his decision, Mr. Justice Leask quoted Master Tokarek at an earlier hearing:

[17] In the course of the hearing, Master Tokarek said:

... I don't know why you people can't agree on things instead of spending money on the court system.
(Transcript p. 8, lines 35-37)

[18] Later he said:

And I don't understand why people just don't do a reasonable thing. Like any other settlement, sometimes you have to give a little that you don't want to give. And sometimes you have to eat crow a little bit and just back off and do it. Because there's a practical result and there's a principled result. And the principled result, which I – is fine, but it costs money to get to a principled result. The practical result is usually the most efficacious way, least expensive way, to do what needs to be done.

(Transcript p. 13, lines 25-35)

After dismissing the executor’s application, Mr. Justice Leask concluded:

[23] I cannot leave this matter without joining my voice to Master Tokarek's plea. This matter should be settled between the parties. The family is tearing itself apart and wasting money and emotional energy on disputes with little or no economic justification. Please stop.

[24] This is a sad case.

[25] Who would be an executor? The dead cannot thank you; and the living will not.