Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.
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goodintentions MortgageBroker mbabc.ca spring 2014 | 41 Undoubtedly, determining whether a person has the necessary capacity is made on a case-by-case basis. e following examples provide some guidance and at least support the wisdom of not assuming that a contributor has the legal mental capacity to form the intention to make a gi. Limited capacity may be sufficient capacity e following example shows that a person of limited capacity may nevertheless have sufficient capacity to form the intention to make a gi. A son expected to inherit from his father (the contributor) a quarter section of farmland. Upon the contributor's death it was discovered the contributor had transferred, as a claimed gi, the land into joint tenancy with his daughter (the recipient). e transfer was challenged on the basis, in part, that the contributor lacked the legal mental capacity to affect any transfer of land at the time of the transfer. e Court found that while the contributor had difficulties in certain areas it was not satisfied the contributor did not have the requisite legal capacity to execute the real estate transfer documents at issue (see Archer v. St. John, 2008 ABQB 9). In determining the capacity of the contributor, the Court considered: • e contributor was a farmer who le all financial and business affairs to his wife. He had, during their marriage, signed papers as she had directed; • e contributor's wife predeceased the signing of the challenged transfer; • At the time of the wife's death, the contributor was diagnosed with a serious medical condition and was almost physically incapacitated, his condition worsened over time; • e transfer was signed at the recipient's house in the presence of her friend (a Commissioner for Oaths) and another friend; • At the time of the transfer being signed and to his death, the contributor had professional caregivers around the clock. He could not walk unassisted and his ability to communicate was dramatically affected; • e contributor had his good days and his bad days and was able to carry on the usual conversations with his son about matters pertaining to the farm; • A daughter of the contributor, who visited her father frequently, did not raise significant issues as to the contributor's capacity. She noted that on one occasion he asked who the children in the house were, not realizing they were his grandchildren; • e contributor's family physician did not raise any concerns as to capacity and had signed a document attesting to capacity sometime before the day the transfer was signed; • A specialist in neuroscience testified that, in the majority of cases in the advanced stages of the disease the contributor had, there is associated dementia. She said that in 80 per cent of the cases dementia affects the way the individual's brain functions including difficulties with memory loss, insight, exercising judgment, expressing one's self, recognizing people, evaluating situations, and handling their affairs, among other tasks. She also said that it takes longer for an afflicted person to process information and that this becomes more pronounced later in the day when fatigue sets in; • Medical records indicated the contributor had some memory loss a few years prior to the gi being made; his memory was still considered at that time to be within the normal range; • One of the contributor's caregivers testified that he was able to understand conversation and seemed to be aware of what was transpiring around him. She was able to understand him even though he had great difficulty speaking. She also was around him frequently. While the Court found the contributor to have sufficient legal capacity, it did invalidate the gi as it found undue influence had been exercised by the recipient on the contributor to bring about the transfer. an example of insufficient capacity e Supreme Court of British Columbia, based on the following facts, found the contributor lacked the limited capacity needed to form the intention to make a gi (see Miller v. Turney 2010 BCSC 101): • e elderly contributor had transferred her house into joint tenancy with her niece • p38-43_Gifting.indd 41 14-05-08 2:27 PM