B.C. Court of Appeal Overturns Trial Judgement in Sabey v. Rommel

The British Columbia Court of Appeal overturned the trial judge’s decision to award the plaintiff, Jesse Sabey, the horse farm that had been owned by his friends Kim and Dietrich von Hopffgarten, in Sabey v. Rommel, 2014 BCCA 360.

Jesse Sabey used to ride horses and work at the von Hopffgartens’ farm. He and the von Hopffgartens were all involved in dressage riding. The von Hopffgartens had promised Mr. Sabey that they would leave him the farm, and indeed had tried to make codicils to their wills to do just that, but the codicils were invalid because they were not witnessed by two witnesses. The trial judge held that because Mr. Sabey had relied on the promises they made to him by working for them for less than market value and by making career choices to his detriment, he was entitled to the farm on the basis of the doctrine of proprietary estoppel. I wrote a post about the trial judge’s decision in greater detail previously.

Burgi Rommel, who was the beneficiary of Mrs. von Hopffgarten’s will, appealed the decision to the Court of Appeal. Two of the three judges hearing the appeal allowed the appeal, holding that the award to Mr. Sabey of the entire farm was disproportionate to the detriment he suffered.

Madam Justice Bennett, writing for the majority, set out the legal test as follows:

[25]         The foundation of a claim in proprietary estoppel is an equitable right arising out of the conduct of the parties. In Crabb v. Arun District Council, [1976] Ch. 179 at 192-93, [1975] 3 All E.R. 865 (C.A.), Scarman L.J. stated the test in a claim for a proprietary right on the basis of equity:
1.               Is there an equity established?
2.               If so, what is the extent of the equity?
3.               What is the relief appropriate to satisfy the equity?

A person making a claim on the basis of proprietary estoppel needs to prove three elements: an assurance or representation was made to him, that he relied on it, and that he did so to his detriment.

The majority agreed that Mr. Sabey had proven that the von Hopffgartens had made assurances to him that they would leave him the farm. The also accepted that he relied on those assurances to his detriment by working for them for two and a half years with less than market pay, and for working for Mrs. von Hopffgartens without any pay after her husband’s death. But the majority did not agree that he relied on their assurances when he made his career choices, specifically choosing to become an accountant instead of a professional dressage rider, and then choosing a small firm so he could ride at their farm instead of working for a larger firm that would have provided higher pay, but more travel. Nor did the majority accept the argument that in becoming an accountant and working at a small firm Mr. Sabey had acted to his detriment.

Although, Mr. Sabey established an equity, the majority held that the extent of the equity was not sufficiently great to warrant an award of the whole farm to Mr. Sabey. Madam Justice Bennett wrote at paragraph 80:

[80]         In my view, no equity arises as a result of Mr. Sabey deciding not to pursue professional dressage or limiting his employment prospects to firms that were close to the farm. The extent of the equity that arises in this case is Mr. Sabey’s two and a half years of underpaid work after the assurances were made and his continued work on the farm without payment after Dietrich’s death. If Mr. Sabey had not expected to inherit the farm, then he may not have continued to work on the farm. The trial judge erred in concluding that there were other bases on which an equity arose, and in failing to assess proportionality. As a result, the remedy he crafted is not due deference, and is, with respect, clearly wrong.       

Accordingly, the majority ordered that the case be remitted to the trial judge to consider the alternate claims made by Mr. Sabey on the basis of unjust enrichment, and express or implied trust.

Madam Justice MacKenzie dissented. She would have dismissed the appeal on the basis that the trial judge’s findings were supported by the evidence and that the decision was within the trial judge’s broad discretion. 

Termination of Statutory Property Guardianship

I have written two previous posts on British Columbia’s new statutory property guardianship legislation and regulation coming into effect on December 1, 2014, the first dealing with the procedures for issuing a certificate of incapacity pursuant to which the Public Guardian and Trustee becomes the statutory property guardian of a person incapable of managing his or her own finances, and the second dealing with the criteria to be applied in determining whether a person is incapable.

In this post, I will summarize how a statutory property guardianship may be terminated.

Section 34 of the Adult Guardianship Act provides that an adult who has a statutory property guardian must be reassessed if any of the following apply:

1.                  “the adult is receiving psychiatric treatment in a facility designated under the Mental Health Act and the adult is discharged,”

2.                  the statutory property guardian decides that a reassessment should occur,

3.                  “the adult requests a reassessment and has not been reassessed within the preceding 12 months,” or

4.                  the court orders a reassessment.

This section gives a person in respect of whom a certificate of incapability has been issued the right to have a reassessment annually.

Under section 37 (3), if as a result of the reassessment, a qualified health care provider determines that the adult is capable of managing the adult’s financial affairs, and the health authority designate accepts that determination, then the statutory property guardianship ends, and the adult may then manage his or her own finances.

A second way that a person in respect of whom a certificate of incapability has been issued may terminate the statutory property guardianship is by making a successful application to court.

If the Public Guardian and Trustee as the statutory property guardian is satisfied that the statutory property guardianship is no longer necessary, she may also end it on giving the patient notice.

Finally, if the court appoints a committee for the adult under the Patients Property Act, then the statutory property guardianship ends, but the effect is to transfer the management of the adult’s finances to the committee. Under this provision a relative or friend of the adult in respect of whom a certificate of incapability has been issued may take over management from the Public Guardian and Trustee, by making an application to court.

It should be noted that the provisions for terminating a statutory property guardianship will apply to certificates of incapability that were issued under the Mental Health Act, before the new legislation and regulation comes into effect. 

Kimberly Wallis Speaking About Rectification at Okanagan Wills and Trusts CBA Section Meeting

My partner Kim Wallis will be speaking this Wednesday, September 17, 2014, on the topic of rectification including the new provision, section 59, in the Wills, Estates and Succession Act on rectification of wills, to the Okanagan Wills and Trusts section of the Canadian Bar Association. The meeting is open to members of the Canadian Bar Association, B.C. Branch.

Test of Incapability in New Statutory Property Guardianship Regulation

In my post last week, I wrote about the new statutory property guardianship legislation and regulation coming into effect on December 1, 2014, under which the Public Guardian and Trustee may be appointed a statutory property guardian for a person who is not capable of managing his or her own financial affairs. I wrote specifically about the procedures for determining whether a certificate of incapability should be issued and the Public Guardian and Trustee appointed in respect of someone who may not be capable of making financial decisions.

One welcome change is the introduction of a test of incapability in the new Statutory Property Guardianship Regulation. It is set out in section 9:

Test of Incapability 

9 (1) An adult is incapable of managing the adult's financial affairs if, in the opinion of a qualified health care provider, any of the following apply:

(a) the adult cannot understand the nature of the adult's financial affairs including the approximate value of the adult's business and property and the obligations owed to the adult's dependants, if any; 

(b) the adult cannot understand the decisions that must be made or actions that must be taken for the reasonable management of the adult's financial affairs; 

(c) the adult cannot understand the risks and benefits of making or failing to make particular decisions, or taking or failing to take particular actions in respect of the adult's financial affairs; 

(d) the adult cannot understand that the information. referred to in this subsection applies to the adult;

(e) the adult cannot demonstrate that hear she is able to implement, or to direct others to implement, the decisions or actions referred to in paragraph (b). 

(2) For the purposes of section 34 of the Act, a qualified health care provider must consider the changes, if any, in the adult's incapability since the previous assessment and the adult's understanding of those changes. 

Although this provision does not directly apply to applications for the appointment of a committee under the Patients Property Act, the above criteria could be applied to an application for an order declaring a person incapable of managing his or her affairs under that Act. A lawyer asking for a physician's opinion on capacity could ask the physician to address those criteria. This may provide more nuanced and clearer evidence to assist the court in making a determination of capacity under the Patients Property Act.