Vancouver Setting Aside Power of Attorney lawyers deal with fiduciary duty issues regarding persons appointed as a Vancouver power of attorney. Under what circumstances can a Power of Attorney be set aside? In this blog, Rana Yavari of our team of Vancouver Setting Aside Power of Attorney lawyers sets out the rules for removing a power of attorney who may have gone rogue.
Vancouver Setting Aside Power of Attorney Lawyers
The BC Power of Attorney Act states that an attorney must act:
(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.
If an attorney is found to be in breach of his/her fiduciary duty, the Court may grant an order for the enduring power of attorney to be set aside. MacLean Law Vancouver Setting Aside Power of Attorney lawyers act across BC and in Alberta out of 7 conveniently located offices.
Vancouver Setting Aside Power of Attorney – Mental Incapacity
The BC Power of Attorney Act states that a mentally incompetent person cannot grant a valid enduring power of attorney. The capacity of an adult to understand the nature and consequences of the proposed enduring power of attorney before making an enduring power of attorney is a requirement. If this requirement is not met, an enduring power of attorney may be set aside.
An adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney if the adult cannot understand all of the following:
- the property the adult has and its approximate value;
- the obligations the adult owes to his or her dependants;
- that the adult’s attorney will be able to do on the adult’s behalf anything in respect of the adult’s financial affairs that the adult could do if capable, except make a will, subject to the conditions and restrictions set out in the enduring power of attorney;
- that, unless the attorney manages the adult’s business and property prudently, their value may decline;
- that the attorney might misuse the attorney’s authority;
- that the adult may, if capable, revoke the enduring power of attorney; and
- any other prescribed matter.
In Borges v. Borges 2018 ONSC 3451, the applicant submitted that mother’s diagnosis justifies a cancelation of an enduring power of attorney given that she lacked the mental capacity to grant a valid enduring power of attorney. The Court considered the case of Bishop et al. v. Bishop, (2006) O.J. no. 3540 (S.C.) for the proposition that even in a case involving a mild case of dementia, Courts have not hesitated to set aside a power of attorney.
Vancouver Setting Aside Power of Attorney –Suspicious Circumstances
The general presumption of capacity is well known. That means that, as a rule, the burden will be on a person attempting to set aside a power of attorney document to prove that the grantor was incapable at the time. However, Courts have held that where there are “suspicious circumstances,” the burden will be reversed, and it will be on the person seeking to rely on the validity of the document (usually, the named attorney) to satisfy the Court as to its validity.
The test for suspicious circumstances was established in Nguyen-Crwaford v. Nguyen 2010 ONSC 6836 (“Nguyen”). In Nguyen, there was a struggle among the five children of a 79-year old woman (“Mother”) over which of them will make a decision concerning the Mother’s personal care and property. Mother had signed the Power of Attorney documents, making NC as her attorney for personal care and property. Mother spoke very little English. The Power of Attorney was prepared by the Mother’s English-speaking lawyer and was written entirely in English. NC was the only person that translated the Power of Attorney documents to the Mother. NC’s siblings submitted that before the Power of Attorney was granted, NC and her husband depleted Mother’s assets by approximately $206,000.
The Court in Nguyen declared the Power of Attorney granted to NC to be invalid and of no force and effect. The Court in Nguyen established that the same test that applies to a Will challenge also applies to undue influence in the context of a Power of Attorney dispute:
[89] The respondent siblings assert undue influence by an analogy drawn from cases dealing with suspicious circumstances surrounding the preparation and execution of a Will.[12] The Supreme Court of Canada in Vout v. Hay[13] clarified the law regarding “suspicious circumstances” and their relationship to testamentary capacity and undue influence. The propounder of a Will has the legal burden with respect to the due execution of the Will, and knowledge, approval and testamentary capacity of the testator. Generally, there is a presumption that these are present. However, this presumption can be rebutted by the presence of “suspicious circumstances” so that the propounder of the Will must prove knowledge, approval and testamentary capacity on the civil burden of the balance of probabilities. The more suspicious the circumstances, the greater the scrutiny of the evidence must be.
[90] The suspicious circumstances may be raised by (1) circumstances surrounding the preparation of the will; (2) circumstances tending to call into question the capacity of the testator; or (3) circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud. If the party attacking the Will makes allegations of fraud and undue influence, the burden is on them to prove this on the civil standard of the balance of probabilities.
[93] There is no reason why this reasoning should not apply equally to Powers of Attorney.
[94] In Nadj v. Arvai,[17] Dunn J. upheld Powers of Attorney where the daughter and prospective attorney translated them to her father, who signed them, but Dunn J. notes at para. 23 that the lawyer questioned the father, in the absence of the daughter, to confirm his instructions, so it was clear that the lawyer himself spoke the father’s language and did not need to rely on the translation being provided by the daughter.
…..
[106] In any event, I find the following facts to be inconsistent with any conclusion other than that Mother’s execution of the 1998 Powers of Attorney was obtained by undue influence on her mind:
- a) Mother was dependent on Ms. Nguyen-Crawford;
- b) Nguyen-Crawford provided the only translation of the Powers of Attorney, which had the effect of conferring on her extensive powers to act on Mother’s behalf, and of the legal advice Ms. Lewis gave to Mother concerning them;
- c) Nguyen-Crawford and her husband used Mother’s funds as if they were their own.
[107] In the face of these facts, I cannot find that the Powers of Attorney, though prepared by Mother’s lawyer and witnessed in accordance with the Act, were a clear expression of Mother’s wishes. This is not a case, such as Knox v. Burton,[25] in which there is no reliable evidence of suspicious circumstances of undue influence and in which the presumption of capacity should prevail.
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