McKay v. Richards, 2019 BCPC 270

Citation: McKay v. Richards 2019 BCPC 270 Date: 20191115 File Nos: 23761, 23788 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (SMALL CLAIMS COURT) BETWEEN: LAURIE DAWN McKAY AND KATHERINE DONNA LILLY MONKMAN (REPRESENTED BY HER COMMITTEE LAURIE DAWN McKAY) CLAIMANTS AND: LINDA DIANE RICHARDS DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE K. D. SKILNICK Counsel for the Claimants: T. J. Mueller (Articled Student) Appearing in person: L. D. Richards Place of Hearing: Abbotsford , B.C. Dates of Hearing: November 7-8, 2019 Date of Judgment: November 15, 2019

Introduction [ 1 ] The Claimant Laurie Dawn McKay and the Defendant Linda Diane Richards are sisters. The Claimant Katherine Donna Lilly Monkman is their mother. Mrs. Monkman has not played an active role in this litigation for health reasons. On December 17, 2018, an order was made in the Supreme Court of British Columbia declaring that Mrs. Monkman is incapable of managing her affairs because of her advanced state of dementia. That order gave the Claimant Laurie Dawn McKay the right to represent Mrs.

Monkman’s interests as Committee of her “estate and person”, pursuant to the Patients Property Act of British Columbia . [ 2 ] It is unclear what Mrs. Monkman would think of all this if her health permitted her to have an appreciation of what was taking place in this action, and how she would view the conflict between her two daughters. When the application was made to have a Committee appointed for Mrs. Monkman, the Defendant chose not to contest it. [ 3 ] In 2010, the Defendant left her home in Toronto to move to Abbotsford to care for her aging parents.

She did so despite the fact that her two siblings lived much closer to them. Her father died in July of 2010 and the Defendant took on the bulk of the responsibility of caring for her aging and recently widowed mother. The Claimant Laurie McKay admits that she has had very little involvement in her mother’s life.

She acknowledges, somewhat grudgingly, that the Defendant was a capable caregiver, or as she puts it, “on the surface she is good to my mom”, but she suspects that the Defendant is taking advantage of their mother financially. [ 4 ] During the time that the Defendant was looking after her mother, she used her mother’s credit card for a number of personal transactions. The Claimant McKay says that this was an abuse of the Defendant’s role as her mother’s caregiver and a breach of the Defendant’s fiduciary duty under an Enduring Power of Attorney granted by Mrs. Monkman.

This Claimant doesn’t know for certain what all of these charges are for, but she says that they are suspicious, and the Defendant should have to pay them back. [ 5 ] The Defendant says that some of these charges were not incurred by her, some related to shared household expenses (such as veterinary bills for the family pet), and some were gifts from a grateful mother to a daughter who had moved across the country to provide elder care for her aging parents. [ 6 ] It seems somewhat ironic that, while Ms.

McKay complains that the Defendant used her mother’s credit card for some expenses, she herself has obtained an order allowing her to pay her costs of litigation on a “special costs basis” from her mother’s estate. [ 7 ] Counsel for the Claimants alleges that the law places the burden of proof on the Defendant and not on his clients to show that she has not misappropriated any of her mother’s funds because the Defendant was her mother’s Power of Attorney when these transactions were incurred under circumstances giving rise to a presumption of undue influence.

He also states that she cannot meet this burden on her word alone. He argues that her evidence requires corroboration. His argument is based in part on a

section of the British Columbia Evidence Act . It is also premised on his contention, as set out in his closing submissions, that the mother’s “decline into mental incapability began in 2012”, a premise that the Defendant strongly disagrees with. [ 8 ] The Claimants brought a second action against the Defendant, file 23788, in which a claim was made for reimbursement of funds charged to Mrs. Monkman’s line of credit. (The Claim in file 23761 concerns amounts charged to Mrs. Monkman’s Visa credit card).

At the start of the trial, counsel for the Claimants advised that this claim would not be proceeding and would be pursued in the Supreme Court instead. No findings of fact are being made in respect of this file, and it is included in these reasons only for the issue of costs. The Claimants have not applied to transfer the file to Supreme Court, and no order is being made doing so. The Claimants are abandoning the claim in its entirety, without prejudice to their right to pursue a new claim in the Supreme Court. [ 9 ] Following is a

summary of the evidence presented at trial, a review of the applicable law, and the reasons for making the order determining the outcome of these Claims.

Summary of Evidence [ 10 ] The Claimant Laurie Dawn McKay is 59 years of age and her sister, the Defendant, is 55 years old. Their brother Glen Berry Monkman is between them in age. He has some significant health issues that prevent him from taking a more active role in his parents’ affairs, and he did not testify at the trial of this matter. [ 11 ] In 2010, the Defendant was living in Toronto where she had been working for some time for Rogers Communications. Her position with the company was being phased out but her work experience presented her with other options in the corporate world.

She met with her parents in Calgary sometime in early 2010. Her parents each had some significant health issues. Her mother had become exhausted from having to care for Mr. Monkman. Her parents convinced her to move to Abbotsford to help with their care. Her siblings were either unable or unwilling to take on that role. [ 12 ] The Defendant decided to put family ahead of career and moved to Abbotsford that spring. In July, her father died and her mother was grieving the loss of her spouse.

In order to support herself, the Defendant relied on money from a severance package and from the sale of her condominium in Toronto. She testified that it was from those funds that she purchased a business in the field of nutritional supplements and consulting. Having her own business afforded her the flexibility to be with her mother when required to do so. She lived with her mother for a year after her father’s death, before moving into her own home nearby. [ 13 ] In 2013, Mrs. Monkman broke her collarbone and hip in a fall, and was unable to look after herself.

The Defendant elected to move in to her mother’s home to attend to her mother’s needs. She continued to reside with her mother while her mother slowly recovered from these injuries. [ 14 ] Much of the Claimants’ case is predicated on the notion that Mrs. Monkman’s dementia was at an advanced state as early as 2012. This contention is unsupported by any medical or other independent evidence, although it must be acknowledged that the evidence on this point is sparse and is limited to what the two main parties recollect. Neither party presented any medical reports or other medical

evidence confirming when Mrs. Monkman’s mental state deteriorated to the point where she was unable to manage her affairs. All that can safely be concluded is that her condition had reached this point by December 17, 2018. [ 15 ] By her own admission, the Claimant Laurie McKay spent little time with her mother. She became suspicious when she saw one of her mother’s Visa bills with a charge on it that related to the Defendant’s business. In her evidence, she comes to her conclusion about the early onset of her mother’s dementia from the fact that after her mother had her fall in 2012, Mrs.

Monkman had less interest in going out. The Defendant disputes this. She testified that her mother continued to lunch with friends and extended family, and enjoyed a number of other social pursuits. She continued to drive a vehicle after her husband’s death. [ 16 ] Neither of these parties are disinterested in the outcome of the proceedings and therefore neither can be properly said to be independent. Both agree however that it was the Defendant who spent much more time with her mother. Much of the Defendant’s evidence is uncontradicted. [ 17 ] The question of when Mrs.

Monkman’s dementia advanced to a state where she was unable to manage affairs is significant in this case. If she had not advanced to that state at the time of many of the transactions that are in dispute in this case, it would be well within her prerogative to distribute her property among her children unequally, preferring one child over the others.

It would be understandable if she chose to benefit the Defendant, being the one child who made the sacrifice of leaving her life in Toronto, and moving across the country to provide elder care for her, in preference to her other children who spent less time with her. There would be nothing illegal or even improper about such a choice. On the other hand, if Mrs. Monkman’s mental faculties had deteriorated to the point where she could not properly look after her financial affairs, it would be wrong for the Defendant to take advantage of this. [ 18 ] On December 15, 2016, Mrs.

Monkman executed an Enduring Power of Attorney, pursuant to the Power of Attorney Act , in which she appointed the Defendant as well as her son Berry as her attorneys, in accordance with the Act. The document provided that “the attorney shall not be compensated for acting on my behalf but may be reimbursed for reasonable out of pocket expenses.” The document was prepared and executed before a Notary Public. [ 19 ] The Claimants take objection to a number of charges incurred on Mrs. Monkman’s credit card that fall under four categories: (

a) The Defendant’s business expenses ($18,799.36) (

b) Veterinarian expenses for the Defendant’s cat ($1,398.70) (

c) Improvements to Mrs. Monkman’s property at Harrison Holiday Park in Harrison Hot Springs, BC ($7,981.27) (

d) Repairs to a 2008 Honda Fit automobile that was transferred from Mrs. Monkman to the Defendant in 2016 ($3,388.72)

A) The Business Expenses [ 20 ] Concerning the business expenses, the Defendant acknowledges that $11,892.36 worth of product and other expenses relating to her business were charged on her mother’s credit card. It is her evidence that this was done with her mother’s knowledge and consent. She says that this was a gift from her mother intended to show her gratitude for all of the time and effort that she had spent in looking after her mother as well as her for overseeing necessary renovations to the family property at Harrison Hot Springs.

In the Defendant’s words, “Mom agreed to pay for my product to compensate me for all my work at Harrison”. [ 21 ] Over $4,100 of these charges were incurred before the Enduring Power of Attorney was signed, and the rest were incurred after. There does not appear to be any independent evidence which corroborates or conflicts with the assertion that Mrs. Monkman allowed the Defendant to charge these things on her credit card. The Defendant is clear in her evidence that her mother let her charge these things as a gift, and that she was of sound mind when she did so.

It would not be unusual for a parent being willing to make such a gift to an adult child in consideration for such considerable time and effort. [ 22 ] On the other hand, the Claimant Laurie McKay recounts a conversation with her mother that took place in 2015 about a charge on her mother’s credit card for a trade show that the Defendant attended in connection with her business. When she asked her mother, she says that Mrs. Monkman had no idea what the charge was for.

She says that she asked the Defendant about the charge, and the Defendant said that “mom had allowed” her to use the Visa for trade shows. [ 23 ] The Claimants have not established that any of the remaining amounts above the $11,892.36 claimed under this heading of damages are improper.

Laurie McKay acknowledges that she spent very little time with her mother, and her decision to include such things as restaurant meals, parking charges and hair appointments as part of her claim against her sister is based on assumption rather than any direct knowledge that these charges were either incurred by the Defendant or that they were incurred solely for the Defendant’s benefit.

B) Veterinary Bills [ 24 ] The Defendant brought her cat with her from Toronto when she moved to Abbotsford to be closer to her parents. It is the Defendant’s evidence that the cat soon became a family pet that brought comfort to her mother, as pets often do. As such, she objects to her sister’s characterization of this as her expense alone, and sees this claim as pettiness on her sister’s part. She testified that she shared the expenses for the cat with her mother. She says that at some point, the cat was jointly owned and therefore these expenses should be considered as her mother’s as much as her own.

C) Harrison Hot Springs Property [ 25 ] The Monkmans held property at Harrison Hot Springs at which they had spent a considerable amount of time. The property had fallen into disrepair and suffered further damage when a wooden overhanging roof collapsed due to excessive snowfall. Some of this damage was covered by insurance, but not all of it.

[ 26 ] The Monkmans had been members in the Harrison Holiday Park Association since 1993. In 2011 (before the time that the Claimants allege Mrs. Monkman’s dementia became advanced), Mrs. Monkman transferred her husband’s interest in the association into the name of the Defendant. This was something that she was well within her rights to do, and it made sense, considering that the Defendant was the only one of the children who spent time on the property. [ 27 ] In the summer of 2016 the Defendant sold a 33 foot Jayco 5 th Wheel trailer for $5000 because her mother was unable to make use of it. It had been Mrs.

Monkman’s intention to give the trailer to the Defendant and this appears clear from a will that she had signed in September of 2012 which expressed this intention. Although the trailer had been referred to in the will, there was nothing to prevent Mrs. Monkman from giving the property to the Defendant during her lifetime, especially at a time when Mrs. Monkman’s health was such as to prevent her from being able to fully enjoy this property. [ 28 ] In September of 2018, Mrs. Monkman’s name was removed from the property because she was going into a seniors’ residence.

Up to that time however, the interest in the Harrison property had been a joint one. The Defendant asserts that, as joint property, it is unclear why the costs of maintaining and repairing this property should be attributable to her alone.

D) The Honda Fit [ 29 ] In May of 2016, Mrs. Monkman transferred her 2008 Honda Fit automobile into the Defendant’s name. The Defendant had brought her 2002 vehicle from Toronto, and as that vehicle became older, it was no longer a safe or reliable vehicle. Mrs. Monkman had been very active prior to her accident and had kept her driver’s license until her health prevented her from driving. The Defendant testified that her mother decided to transfer her more reliable vehicle into the Defendant’s name.

This was done in recognition of the reality that it was the Defendant who was doing all the driving and that this was essentially a family vehicle. The Defendant says that since her mother was expecting her to do all of the driving, she felt a corresponding obligation to contribute a safe and reliable vehicle to this arrangement. [ 30 ] The intention on the part of Mrs. Monkman that the transfer of the vehicle as a gift is corroborated by the documentation signed at the time.

The purchaser’s information and tax declaration states that vehicle was received as a gift, and adds “gift, mother to daughter.” There appears to be a quid pro quo for this gift as it was the Defendant who drove Mrs. Monkman to all of her appointments and social engagements when her health permitted her to go on such outings.

On the other hand, this may simply be an acknowledgement of the fact that no cash changed hands when the vehicle was transferred and therefore no tax consequences should flow from the transaction. [ 31 ] The Claimant Laurie McKay and the Defendant differ in their characterization of these benefits that flowed from Mrs. Monkman to the Defendant. The sibling Claimant characterizes these as the Defendant taking advantage of her mother at a time when the mother was suffering from dementia. The Defendant sees things differently.

She sees these benefits as gifts from a grateful parent in recognition of the fact that she took on the work of caring for an aging parent, while her sister chose not to do so. She sees the actions of her sibling as petty and rooted in a greed. The Defendant sees it as very unfair for her older sister to demand an equal share of her parents’ property, while being content with a grossly unequal division of the responsibilities of caring for their mother. [ 32 ] In January of 2018, Mrs. Monkman suffered another fall and her health continued to decline.

The Defendant visited her mother twice daily while she was in hospital. It was in September of 2018 that the Defendant says that her mother accepted the fact that she would no longer be able to utilize the property at Harrison Hot Springs. This added to Ms. McKay’s suspicions that the Defendant was taking advantage of her mother. She could not understand why money was being spent on the Harrison property when he mother would no longer be able to enjoy the use of it. Ms.

McKay’s suspicions increased further on September 17, 2018 when her mother signed a document revoking “all Powers of Attorney that appointed Laurie Dawn McKay as my attorney.” [ 33 ] On October 17, 2018 it was decided that Mrs. Monkman’s health had deteriorated to the point that she was not able to live independently. She was moved into the care home where she now resides. In November that year, the Defendant went on a vacation to Texas. While she was away, she was served with notice that her sister was bringing an application in the Supreme Court of British Columbia for an order under the Patients Property Act .

She is suspicious about the timing of this and sees this as a manipulative act on the part of her sister. The Defendant testified that she spoke to her brother about the matter and the two of them decided not to contest the application, because they did not feel that they could afford the cost of a lawyer to represent them, and they chose not to represent themselves. [ 34 ] On December 17, 2008, an order was made in the Supreme Court of British Columbia declaring that Mrs. Monkman was “incapable of managing herself or her affairs” because of mental infirmity.

The order appointed the Petitioner, Laurie Dawn McKay, to be the Committee of the “Estate and person” of Mrs. Monkman. The Petitioner was the only person appearing before the court when the order was granted. [ 35 ] The Defendant testified that after the Supreme Court order was made, the Claimant McKay ordered her to vacate her mother’s condominium overnight. Previously, on November 14, 2018, an accepted offer to purchase was signed for the sale of Mrs. Monkman’s condominium for the sum of $373,000. The prospective purchaser was unable to obtain financing to complete the transaction and that deal did not proceed.

According to the Defendant, the property was subsequently sold for $300,000. While this is not the subject matter of this action, the Defendant cites these allegations to support her contention that this claim is based on motives of pettiness and control issues on the part of her sister, and not out of any concern for the best interests of Mrs. Monkman. Applicable Law 1. Burden of Proof and Undue Influence [ 36 ] As a general rule, in a civil case, the standard of proof requires the claimant or plaintiff to prove his or her case on a balance of probabilities.

In this case however, counsel for the Claimants argues that the burden of proof shifts from the Claimants to the Defendant because there is a presumption at law that undue influence exists on the part of the Defendant. Counsel argues that where undue

influence is presumed to exist, the burden of proof shifts to the Defendant to show that the property and money transferred to her weregifts. [37] The doctrine of undue influence is designed “to protect people from being forced, tricked or misled in any way by others intoparting with their property”. That language comes from an old English case, Allard v. Skinner (1887), 36 Ch. D. 145 at 171, and has beenfollowed by the courts of this province in a number of decisions including Longmuir v. Holland, 2000 BCCA 538. [38] The courts of this province have held that a transaction characterized as a gift can be set aside on the grounds of undue influencein two cases:

(1) Where the Court is satisfied that the gift was the result of influence expressly used by the donee for the purpose; or

(2) Where the relations between the donor and donee have at or shortly before the time of the gift been such as to raise apresumption that the donee had influence over the donor. [39] Authority for this proposition can be found in the BC Supreme Court decisions of Gollan v. Burnett, 2014 BCSC 2424;Modonese v. Delac Estate 2011 BCSC, affirmed at 2011 BCCA 501, and in the BC Court of Appeal’s decisions in Longmuir v. Holland,supra and Ogilvie v.

Ogilvie Estate, (BC CA), 1998 106 BCAC 55. [40] In this case, there is no evidence suggesting that the Defendant expressly used undue influence to pressure her mother intomaking the gifts that are the subject of this Claim. Counsel for the Claimants says that what has occurred here falls into the secondcategory of undue influence. Counsel relies on the Supreme Court of Canada’s decision in Geffen v. Goodman Estate, (SCC), [1991] 2 S.C.R. 353 as support for the principle that undue influence is presumed to be present when the transaction occursbetween parent and child.

In that case, Justice Wilson wrote: Equity has recognized that transactions between persons standing in certain relationships with one another will be presumed to berelationships of influence until the contrary is shown. These include the relationship between…parent and child (Lancashire Loans, Ltd.v.

Black, [1934] 1 K.B. 380)… [41] Justice Wilson defined what influence is in the following language: It seems to me rather that when one speaks of "influence" one is really referring to the ability of one person to dominate the will ofanother, whether through manipulation, coercion, or outright but subtle abuse of power. … To dominate the will of another simplymeans to exercise a persuasive influence over him or her. The ability to exercise such influence may arise from a relationship of trust orconfidence but it may arise from other relationships as well.

The point is that there is nothing per se reprehensible about persons in arelationship of trust or confidence exerting influence, even undue influence, over their beneficiaries. It depends on their motivation andthe objective they seek to achieve thereby. [42] The court went on to hold that in order to establish a presumption of undue influence, this procedure should be followed: 1.

Determine whether the potential for control or domination arises out of the nature of the relationship itself. (The court describesthe relationship between “parent and child” as being one of those relationships which gives rise to this presumption.) 2. Once it is established that the presumption is one in which the relationship is of a type which supports the presumption ofundue influence, the court next looks at the transaction itself. There is a difference in the case of a transaction of give-and-take and onewhere there is a gift. 3.

If the transaction is a “commercial transaction”, Justice Wilson stated that “the plaintiff should be obliged to show, in additionto the required relationship between the parties, that the contract worked unfairness either in the sense that he or she was undulydisadvantaged by it or that the defendant was unduly benefited by it.” She explained that this is required because the court “must accordsome degree of deference to the principle of freedom of contract and the inviolability of bargains.” The mere fact, therefore, that theplaintiff seems to be giving more than he is getting is insufficient to trigger the presumption. 4.

But if the transaction is purported to be a gift, the onus is on the receiver of the gift to show that the gift did not result fromundue influence. [43] In Stewart v. McLean, 2010 BCSC 64, Justice Punnett of the British Columbia Supreme Court discussed how this presumptionof undue influence can be rebutted. The following principles are set out: 1. The evidence required to rebut the presumptions is evidence of the transferor's contrary intention on a balance of probabilities. 2.

The trial judge must weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, what the transferor'sactual intention was. 3. The presumption will only determine the result only if there is insufficient evidence to rebut it on a balance of probabilities. 4. To rebut the presumption of undue influence, the defendant must show that the donor gave the gift as a result of her own “full,free and informed thought”: 5. A defendant could establish this by showing: a. no actual influence was used in the particular transaction b. there was a lack of opportunity to influence the donor

c. the donor had independent advice or the opportunity to obtain independent advice d. the donor had the ability to resist any such influence e. the donor knew and appreciated what she was doing f. there has been undue delay in prosecuting the claim, acquiescence or confirmation by the donor g. the benefit has been of insignificant magnitude or disadvantage. [ 44 ] If it is found in the present case that the Defendant obtained a benefit from her mother as the result of undue influence, her mother (as represented by her Committee) is entitled to effectively reverse those transactions and the Defendant must repay her mother for them. [ 45 ] Counsel for the Claimants argues that the parent-child relationship is one in which the law presumes undue influence to exist.

While the principle may not necessarily be this broad, I do agree that in this case, the relationship between Mrs. Monkman and the Defendant was one in which the former had considerable dependence on the latter. Therefore the presumption of undue influence applies to those transactions occurring between Mrs. Monkman and the Defendant that are claimed to be gifts. In those cases, the burden of proof lies with the Defendant to rebut the presumption that undue influence was at work in the creation of these transactions.

Section 9 of the BC Evidence Act [ 46 ] One of the difficulties in this case is the lack of clear objective evidence about the true motivation for many of the suspect transactions. The Claimant Laurie McKay candidly admits that she had little contact with her mother when these transactions were taking place and has little or nothing to offer in the way of direct evidence on the subject. She is relying mainly on her suspicions. The person best able to provide the evidence required to properly decide the issues before the court, Mrs.

Monkman, is unable to do so because of the state of her mental health. [ 47 ] The only witness to testify who had direct knowledge on the question of whether or not undue influence may have been a factor in the transactions before the court is the Defendant. However counsel for the Claimants say that her evidence cannot be used to support a judgement in her favour because it is not corroborated, something he says is required by

section 9 of the British Columbia Evidence Act. That

section reads as follows: 9 In an action or proceeding by or against a person (

a) who is found to be of unsound mind, or (

b) who is a patient in a Provincial or other mental health facility, an opposite or interested party is not entitled to obtain a verdict, judgment or decision, on his or her own evidence, unless that evidence is corroborated by other material evidence. [ 48 ] The evidence clearly shows that on December 17, 2018, Mrs. Monkman was found to be incapable of managing her own affairs by reason of mental infirmity. Neither party tendered any medical evidence of when such incapacity arose.

Each of the siblings offered their own lay opinion of when this may have arose, but no weight can be placed on the speculation of lay witnesses on what is a medical matter. [ 49 ] In submissions, counsel was asked whether or not this

section applied only in respect of subject matter arising after the finding of an unsound mind, or the admission to a mental health facility took place. No authority was provided to support this position, but counsel asserts that once a finding is made that one party to a transaction is of unsound mind, it requires the opposing party to provide corroboration in order to succeed. [ 50 ] Judicial consideration of

section 9 has held that this

section does not require corroboration on every material fact that must be proven. The requirements of

section 9 are satisfied if sufficient facts are corroborated such as to lead to the conclusion that the evidence put forward by the non-incompetent party is true. Authority for this proposition is found in the British Columbia Supreme Court decisions in Sommerville v. Sommerville , 2014 BCSC 1848 ; Egli v. Egli, 2004 BCSC 529 ; Schmidt v. Schmidt , [1989] B.C.J. No. 472 ; Lasky v. Prowal , [1994] B.C.J. No. 1938 . [ 51 ] In Egli v. Egli , supra, the father of the donor was the subject of a certificate of incompetency obtained on April 12, 2001.

The Public Guardian and Trustee of British Columbia, acting as the father’s Committee, sought to set aside a transaction that had occurred in 1998, before the certificate of incompetency was obtained. Justice Garson of the BC Supreme Court held that the father was competent to execute a Power of Attorney signed in 1998, but nevertheless held that on the facts of the case, corroboration under

section 9 was required to support the son’s assertion that his father was aware of and consented to a transfer of real property from father to son. [ 52 ] On a review of these authorities, it appears that

section 9 does operate retroactively in that it requires corroboration of evidence used to base a decision against a person covered by the section, even when the subject matter of that decision concerns events that occurred before the person was found to be of unsound mind or admitted to a mental health facility.

The degree of corroboration required only has to be sufficient to satisfy the trier of fact on a balance of probabilities that the version of events put forward by the party that is not under a disability is true. [ 53 ] From the Defendant’s perspective, this may be seen as what laymen refer to as a “technicality”, a legal sleight of hand used by clever lawyers to deny her a voice in this litigation. This is clearly not the intended purpose of this

section and such an

interpretation would be contrary to both the reason for the requirement being there, as well as contrary to this court’s mandate (as set out in

section 2 of the Small Claims Act ) to adjudicate claims in a just, speedy, inexpensive and simple manner. [ 54 ]

Section 4 of the Small Claims Act adopts the procedure set out in the Small Claims Rules. Rule 10 of those Rules provides that a

judge “may conduct a trial without complying with the formal rules of procedure and evidence” and may also “receive evidence in any other way the judge thinks is appropriate”. This allows a judge to relax the formal rules of evidence. It is a recognition of the reality that in Small Claims Court, many litigants lack the resources to hire counsel, to pay the expenses of expert witnesses or fully understand the intricacies of what exactly corroboration is and when it is and isn’t required.

The Rules therefore allow a relaxation of the laws of evidence and procedure where doing so aids in a claim’s “just, speedy, inexpensive and simple” determination. [ 55 ] This does not mean that a trial judge in Small Claims court should adopt a policy of arbitrariness or inconsistency when it comes to following the law. Rather it calls for flexibility. In choosing whether or not to admit the Defendant’s evidence without the corroboration required by

section 9 of the BC Evidence Act, adopting the strict position advocated by counsel for the Claimant (i.e. that the Defendant must lose because she has not called any corroborating witnesses) goes too far. It removes the requirement under

section 2 of the Small Claims Act that the resolution of this matter be “just”. A hearing which denies one party any chance of success because of the failure to call other witnesses is difficult to reconcile with a just hearing. [ 56 ] The preferable approach is to keep in mind the purpose of

section 9, which is to ensure that those who are unable to speak for themselves because of mental infirmity do not get taken advantage of. The approach suggested in the case law to relax the corroboration rule, focusing on whether the assertion of gift is true or not, without insisting on strict corroboration of every detail, is a sensible one and is consistent with the provisions of the Small Claims Act and Rules. To conclude that the Defendant must fail because of a lack of corroboration goes too far and violates the intent of

section 2 of the Small Claims Act as well as Rule 10. 3. The Power of Attorney Act [ 57 ] On December 15, 2016, Mrs. Monkman executed an Enduring Power of Attorney which gave the Defendant and her brother authority to make decisions on her behalf and do anything that she herself could “lawfully do by an agent.” The document was intended to continue if Mrs. Monkman became incapable of making decisions about her financial and legal affairs. It also provided that her attorney “shall not be compensated for acting on my behalf but may be reimbursed for reasonable out of pocket expenses.” [ 58 ] Counsel for the Claimant argues that the Defendant has breached her fiduciary duty as spelled out in

section 19 of the Power of Attorney Act by using her mother’s credit cards for personal and business related expenses. [ 59 ]

Section 19 of the Power of Attorney Act provides as follows 19

(1) An attorney must (

a) act honestly and in good faith, (

b) exercise the care, diligence and skill of a reasonably prudent person, (

c) act within the authority given in the enduring power of attorney and under any enactment, and (

d) keep prescribed records and produce the prescribed records for inspection and copying at the request of the adult.

(2) When managing and making decisions about the adult's financial affairs, an attorney must act in the adult's best interests, taking into account the adult's current wishes, known beliefs and values, and any directions to the attorney set out in the enduring power of attorney. [ 60 ] Counsel for the Claimant submits that the Defendant owed Mrs. Monkman a fiduciary duty as her attorney. This means that in such capacity the Defendant could use her mother’s credit cards for personal benefit only if her mother had full knowledge of this and if she consented to it.

If such knowledge and informed consent was absent, then the Defendant must reimburse her mother’s estate for all such personal charges made on her mother’s credit card. [ 61 ] In Sull v. Pengally , 2019 BCSC 575 , Justice Voith of the BC Supreme Court held that an attorney acting under

section 19 of the Power of Attorney Act “has a fiduciary duty to act in accordance with the authority granted to the attorney by the donor and to use that power only for the benefit of the donor”. The court also stated that the attorney “must not reap a personal benefit or use the property that she has discretion or power over.” Analysis [ 62 ] In her role as her mother’s caretaker, the Defendant was placed in a position in which she is presumed to at law to have considerable influence over her mother.

She acknowledges that on multiple occasions, her mother’s credit card was utilized for transactions for which she personally benefitted. These are presumed at law to have been obtained through undue influence, and the burden of proof transfers to the Defendant to prove, on a balance of probabilities, that these transactions were not ones in which she took advantage of her mother’s deteriorating mental condition, but rather ones in which her mother, being of sound mind, properly consented to. [ 63 ] The Defendant has made considerable personal sacrifice to contribute to her mother’s comfort in her senior years.

She ought to have earned considerable gratitude for this, both from her mother and from her siblings. It would not be unusual for her mother to express her gratitude for all the Defendant has done for her in the way of gifts, which might include those that the Defendant says have been made in this case. However this should not be confused with a sense of entitlement on the part of the Defendant in which she feels justified to use her mother’s money for personal expenses. Caring for a parent with the expectation that this comes with a right to spend the parent’s money is no longer

an act of love. [ 64 ] The Defendant says that she has taken only what has been freely given to her by her mother, and this is what is at the heart of this dispute. To give something freely implies that the decision to make the gift was the product of an operating mind. We know that at some point Mrs. Monkman lost the capacity to give such consent. The lack of any medical evidence makes it difficult to precisely determine at what point the Defendant ought to have realized that her mother was no longer capable of making rational decisions about

giving away her property. [ 65 ] On a balance of probabilities, it is more probable than not that some of the early charges on the credit card were intended as gifts from a grateful mother to a daughter who had made sacrifices that her other siblings had not. It is not improper for that sibling to be treated differently and to receive benefits and gifts that her other siblings did not receive. [ 66 ] It is also more probable than not, on a balance of probabilities, that many of the charges on the credit card were made at points closer in time to when Mrs.

Monkman’s dementia had advanced to a state where she was not capable of appreciating that she was giving a gift to one child, to the exclusion of the others. At some point, the Defendant ought to have appreciated that this line had been crossed, and that for her to ask for or accept her mother’s generosity was really taking improper advantage of the situation of her mother’s illness. [ 67 ] The path to dementia is a gradual one.

It does not present clear points on the continuum when it can be said that before point X, the sufferer had the capability to make sound decisions and after point X that ability was lacking. In this case, it is likely, on a balance of probabilities, that some of the charges on Mrs. Monkman’s credit card incurred by the Defendant were gifts made from a grateful parent who was capable of making that decision. Others represent transactions made after that capacity had been lost, and after the Defendant ought to have known better than to take advantage of the situation.

The question is when that line was crossed. [ 68 ] On the evidence, selecting a date will involve a measure of conjecture, but attempting to estimate when this occurred is fairer than an all or nothing approach (i.e. concluding that either these transactions were all gifts or they were all the product of advantage being taken of Mrs. Monkman.) Two reasonable options present themselves. The first is in 2015, when Laurie McKay recollects talking to her mother about the charge on her credit card for the trade show.

This date is likely an error because the first such charge for a business expense does not appear on the credit card until August of 2016. [ 69 ] The second possible date to fix this point of division is in December of 2016 when the Enduring Power of Attorney was signed. It is reasonable to conclude that by December of 2016, it ought to have been apparent to the Defendant that her mother’s decision making ability was suspect. Her mother had given the right to the Defendant and her brother to “make decisions” for her. The document also contemplated that Mrs.

Monkman might be incapable of making decisions about her financial and legal affairs (in paragraph 5) and it also set out the understanding that the Defendant was not to be compensated for taking on this role. It also meant that from that point on, she could not reap any personal benefit from her mother’s property. [ 70 ] The Claimants says that the Defendant charged $18,799.36 of business expenses to her mother’s credit card. Laurie McKay acknowledges that some of these are charges that she is not sure of.

The Defendant admits that $11,892.36 of expenses relating to her business were paid by her mother’s credit card. Of this amount, $4,143.33 was charged against the credit card before the Enduring Power of Attorney was signed. It is more likely, on a balance of probabilities, that these were intended as a gift to the Defendant and I find that she should not be accountable for these charges. [ 71 ] After the Defendant took on responsibility under the Enduring Power of Attorney on December 15, 2016, she used her mother’s credit card to charge $7,749.03 of personal business expenses.

This is something she was prohibited from doing at law, and this should be repaid to her mother’s estate. [ 72 ] The Defendant will not be ordered to reimburse her mother’s estate for the veterinary bills or the repairs to the Harrison Hot Springs Property. These expenses related to jointly held property. Under section 19(5) of the Power of Attorney Act , the prohibition against the Defendant personally benefitting from her mother’s funds does not apply to jointly owned property. I accept the Defendant’s evidence that at some point before Mrs.

Monkman lost the ability to manage her affairs, both the family pet and the interest in the Harrison Hot Springs property had become jointly held property. [ 73 ] Finally, with respect to the claim for reimbursement of vehicle expenses, the evidence supports the finding, on a balance of probabilities, that while the Defendant was caring for her mother, this involved a considerable amount of driving necessary for Mrs. Monkman to conduct her affairs and attend her activities. When Mrs.

Monkman was no longer able to drive, it was reasonable and understandable for her to want to compensate the Defendant for this expense, and for her to pay for some of the costs of operation of the vehicle as an expression of gratitude for the Defendant taking on the responsibility of driving her. [ 74 ] At some point however, it becomes clear that the vehicle was used primarily for purposes concerning the Defendant and that charges for the vehicle were unrelated to her mother. At some point Mrs. Monkman’s mobility issues restricted her need for a lot of transportation. It also ought to have become clear that Mrs.

Monkman’s mental health was such that it was unfair for the Defendant to expect her to be in a position to approve personal charges for car repairs to be made on her credit card. [ 75 ] On December 15, 2016, the Defendant had taken on a fiduciary responsibility under the Enduring Power of Attorney. Once again, at this point the Defendant was in a different position and should not have charged repairs to the vehicle that had been gifted to her to her mother’s credit card. The Defendant admits that after December 15, 2016, charges for car repairs were made to her mother’s credit card in the amount of $2,309.52.

She should reimburse her mother’s estate for these charges. [ 76 ] Finally, the Claimants claim against the Defendant for interest charges on Mrs. Monkman’s credit card. They calculate this to be $3,949. The problem is that much of this is interest on amounts that they have been unsuccessful in proving to be illegal charges. Of a claim of $31,568.05, the Claimants have been successful in obtaining a judgement for less than a third of this.

The Claimants will be entitled to interest on the amount of their judgement, but because of the difficulty in calculating interest with precision, interest will be awarded in accordance with the Court Order Interest Act and it will run from the date of the Supreme Court Order. [ 77 ] This has been a difficult claim to assess because there is some merit to the position taken by both sides. The Defendant is correct when she says that her mother had the right to distribute her property among her children unequally and that she did not require her oldest daughter’s permission to do so.

Her position that her mother wished to gift money to her out of gratitude for the fact that she was the one child who made the greatest personal sacrifice to provide elder care is very credible. But the Claimant Laurie McKay is also correct that at some point, the Defendant ought to have realized that her mother’s mental health had worsened to the point where Mrs. Monkman was no longer capable of making those choices. Once that point was reached, it was wrong for the Defendant to continue to

use her mother’s credit card based on the supposed permission of someone who was in an advanced state of dementia. [ 78 ] The matter has been made worse as a result of bad feelings and resentment among siblings. Resentment can be a powerful and destructive motivator. It is reasonable to assume that during their working lives, Mr. and Mrs. Monkman worked hard with a goal of leaving a reasonable estate for the benefit of their children.

It is disconcerting to think that bad feelings among the siblings will result in much of that estate ending up being paid in legal fees and court costs and not for the purpose that the Monkman’s had worked for. [ 79 ] These reasons for judgement have sought to arrive at a reasonable resolution to determine what portion of the funds paid by Mrs. Monkman to the Defendant were a legitimate exercise of her discretion to dispose of her property as she saw fit, and what portion was not. It is likely that each side will see this result as unfair to her point of view.

Nevertheless, the parties should be encouraged to adopt a similar approach to resolving the remaining claim concerning Mrs. Monkman’s line of credit. It would be preferable if a neutral mediator could be found to determine what portion of that claim could be legitimately considered as a gift and what portion is not, rather than to have the estate eroded further by legal fees.

Then, when the time comes for the final distribution of the estate property, the Defendant’s share can be reduced accordingly, with the amount available for distribution to include money that might otherwise be spent on legal fees and court costs. [ 80 ] Sometimes resentment can take parties into a place of bitterness that causes them to say “I’d rather see the lawyers get the money than for you to get a cent of it.” Although I’ve never met Mr. or Mrs. Monkman, I can only imagine that this would make them both very unhappy.

Order [ 81 ] For the foregoing reasons, the Claimants will have judgement against the Defendant for the sum of $10,058.55. This amount represents reimbursement of the sum of $7,749.03 that the Defendant charged against her mother’s credit card after the Enduring Power of Attorney was signed, and the sum of $2,309.52 charged against her mother’s credit card for repairs to her personal motor vehicle after the same date. [ 82 ] The Claimants are entitled to interest on that amount from and after December 17, 2018 at the statutory rate calculated in accordance with

Part I of the Court Order Interest Act . [ 83 ] There has been divided success in this matter and accordingly, each side will bear their own costs of these actions. No costs are awarded to any of the parties. Dated at the City of Abbotsford, in the Province of British Columbia, this 15 th day of November, 2019. _________________________________________ The Honourable Judge K. D. Skilnick Provincial Court of British Columbia