Suspicion, differences of opinion, and conflict between family members make it very difficult to select an appropriate committee for a loved one. An application to the BC Supreme Court was necessary in Klop (Re), 2021 BCSC 644 to resolve a dispute among siblings. They could not agree on which of them should be appointed representative of their elderly mother who was no longer capable of managing her financial affairs or her person due to dementia. The court’s decision in Klop (Re) is helpful for anyone who wants to understand the factors the court considers when deciding who to appoint as a committee.
Mr. and Mrs. Klop married, raised 10 children, and owned a large dairy farm in BC. When Mr. Klop died in 2013, he and Mrs. Klop owned equal shares in the farm. Two of the Klops’ sons, Gerald and John, worked full-time at the farm for several decades, starting at age 15. Through a series of transactions that took place shortly after Mr. Klop’s death, the farm company was reorganized, and ownership was transferred to Gerald and John (the “2013 Transactions”). Four of the Klops’ daughters were deeply suspicious of the 2013 Transactions, which took place when Mrs. Klop was in her 80s and beginning to exhibit some cognitive decline. The daughters questioned whether Mrs. Klop had capacity to understand the 2013 Transactions, to instruct her solicitor, or to consent to the transfer of her personal wealth. The daughters alleged that Gerald and John had been secretive, duplicitous, and uncooperative when asked about the farm company’s restructuring.
The daughters sought the appointment of one of them—Antonia—as committee of both the person and the estate of their mother under the Patients Property Act, R.S.B.C. 1996 c. 349 (“PPA”). By the time the matter came before the court in 2021, Mrs. Klop was 87 years old, suffering from severe dementia, and living in a BC assisted living facility. The medical evidence supported a declaration that Mrs. Klop was incapable of managing herself and her affairs.
Once the order was made declaring Mrs. Klop a “patient” within the meaning of the PPA, the next step is for the court to appoint a committee. The daughters position was that the potential conflict of interest should disqualify Gerald and John from acting as committees. Gerald and John did not oppose Antonia being appointed as committee for their mother’s person, but they did not agree that Antonia should be appointed committee of their mother’s estate.
Section 6(1) of the PPA empowers the court to appoint any person to be the committee of a patient, but the PPA does not set out criteria for selection of a committee. The factors the court may consider in appointing a committee have been identified in other BC court cases, and they include:
The inquiry is fact specific, and a particular factor may or may not be applicable and may attract different weight depending on the circumstances of a case.
The court appointed Antonia committee of her mother’s person and Gerald and John as committees of their mother’s estate. Of the factors set out above, the following were the most relevant in this case:
In fact, the body of evidence established that, contrary to the daughters’ characterization of events, the transfer of ownership of the farm company did not begin with the 2013 alteration of the company’s share structure; it had been contemplated for some time prior to Mr. Klop’s death. Documents dating from 2012—which, unfortunately, were not disclosed to the daughters in a timely manner—demonstrated that the reorganization was a component of tax-driven estate planning. A memorandum prepared by Mr. and Mrs. Klop’s accountant in 2012 explicitly stated:
It is recognized that Gerald and John have stayed behind and contributed significantly to the existing value of [the Company] and they are being rewarded accordingly.
The reorganization plan documents are not testamentary documents and not admissible themselves as evidence of Mr. and Mrs. Klop’s intentions or capacity. However, taken with affidavit evidence from the accountant and lawyer who assisted Mr. and Mrs. Klop with their estate planning, the court was satisfied that there were no concerns as to any breach of fiduciary duty or conflict of interest that should disqualify Gerald or John from acting as committee of their mother’s estate.
Our estate planning lawyers regularly assist clients with Committeeship Applications. The inquiry on an application for committee is inquiry fact specific, and a particular factor may or may not be applicable and may attract different weight depending on the circumstances of a case. Overall, the question is governed by an assessment of who will serve the patient’s best interest.
If you have concerns that a family member or friend is being taken advantage of due to mental incapacity, or have questions about committeeship applications, claims for lack of capacity or undue influence, contact Onyx Law Group’s team of Vancouver family law and estate litigation lawyers for a 30-minute free consultation.
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