There is a presumption at law that every adult is capable of making decisions. As a society, we take this presumption seriously in ensuring our rights are not unnecessarily taken from us and that we have autonomy concerning our own decisions.[1] Unfortunately, each year many people begin to notice that a colleague, friend or relative is struggling to manage on their own. When an adult needs help managing their affairs because of mental incapability due to an illness, accident, disability or diseases associated with aging, and has not planned ahead or authorized someone else to make decisions through an enduring power of attorney or representation agreement, the appointment of a committee may be required.[2] If a committeeship is required, a friend, family member or trust company can apply to the court to become a committee to manage the affairs of a person who needs help.
In British Columbia, the Patients Property Act, R.S.B.C. 1996, c. 349 (the “PPA”) governs how a committee is appointed and sets out the legislative framework and authority for an individual to manage an incapable person’s personal and financial affairs.
Committee of estate vs. committee of person
There are two categories of commiteeships in British Columbia: a committee of estate and a committee of person. A committee of estate is a person who is appointed to make financial and legal decisions for an adult who is incapable and requires assistance. Pursuant to the PPA, the alleged incapable adult is commonly referred to as the “patient”. A committee of estate has many responsibilities, including securing assets, confirming eligibility for benefits, receiving income, paying bills, contracting for services, maintaining, purchasing and selling real property, managing investments, preparing tax returns and appropriately providing for legal dependents. Legal responsibilities include acting as litigation guardian on civil law matters.
In carrying out these roles, a committee is required to foster the independence of the adult and encourage the adult’s involvement in any decision making that affects the adult. A committee of estate does not have the authority to:
- contract marriage for the adult (but may continue divorce proceedings);
- vote in elections for the adult;
- draw up a new will or change an existing will;
- make estate planning decisions (e.g., change the designation of beneficiaries on insurance policies or RRSPs, register assets in joint names unless this was done prior to the committeeship or place funds in trust);
- act for the adult in criminal proceedings in which the adult is an accused (but may retain a lawyer for the adult); or
- make a representation agreement, power of attorney or an advance instructional health care directive on behalf of the adult.
A committee of estate also does not make decisions related to health care, facility placement and living arrangements or other personal decisions. This role is reserved for a committee of person, a representative under a representation agreement or a temporary substitute decision maker for health care.
Committee application and costs
Before an individual is appointed as a committee of estate or a committee of person, a court application must be commenced. The court application is made after requisite materials are filed, including affidavits of the opinions of two doctors regarding the incapacity of the adult and affidavits containing information on the next of kin, assets, income, expenses and liabilities of the incapable person. The documents must be served on the Public Guardian and Trustee (the “PGT”), and unless otherwise directed by the court, the application must also be served on the alleged incapable person with notice provided to next of kin. The PGT then reviews the application and makes recommendations to the court with respect to the medical evidence, bonding requirements and authority restrictions. In some circumstances, the PGT may require the committee to post bond as security for the patient’s assets before allowing them to proceed with management thereof.
Section 27 of the PPA governs the awarding of costs on applications for the appointment of committees, which is in the court’s discretion. Typically, a successful applicant on a committeeship application is awarded their costs and disbursements out of the incapable person’s estate.[3] This is because it is generally understood that committee applications are brought for the benefit of the incapable adult to assist with the management of the person and estate.
Where a committee is formally appointed, it is because the court has concluded that it is in the best interests of the patient. As such, the primary duty of a committee is always to act in the best interests of the patient and conduct their services under the committeeship in a manner that resembles what the patient would have done themselves had they been of sound and disposing mind. Section 18 of the PPA outlines the fiduciary duty a committee owes to a patient and the patient’s family:
18.Exercise of powers
(1) A committee must exercise the committee’s powers for the benefit of the patient and the patient’s family, having regard to the nature and value of the property of the patient and the circumstances and needs of the patient and the patient’s family.
(2) A committee must, to the extent reasonable, foster the independence of the patient and encourage the patient’s involvement in any decision making that affects the patient.
British Columbian courts have noted the following factors will be considered when assessing whether a proposed committee is acting in the best interests of the patient:
- the proposed committee’s previous involvement with the patient and her affairs;
- the proposed committee’s knowledge and understanding of the patient’s situation and needs;
- the proposed committee’s level of expertise and ability to perform the duties of the committee; and,
- whether the proposed committee has or may have a conflict of interest with the interests of the patient.[4]
The PPA and caselaw in British Columbia make it clear that a committee is a fiduciary who will be held to a high standard as they are, in effect, representing someone who has lost their decision-making rights. It is a serious role that comes with important duties and responsibilities.
The application process can be expensive and give rise to challenges and delays if the committeeship is opposed. For example, two siblings may disagree on who is best suited to act in the best interests of a parent who has lost capacity. Therefore, the best estate plans will avoid the need for committeeship application altogether by having in place both a power of attorney and representation agreement to ensure that your affairs are managed by the person you trust most.
If you have any questions about commencing a committee application or putting in place a power of attorney and representation agreement, please contact Miller Thomson’s estate litigation team.
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[1] Kimberly Whaley, “Guardianship – Dealing with Minors and Adults Under Disability” Link: welpartners.com/resources/WEL Getting to Guardianship.pdf
[2] The Continuing Legal Education Society of British Columbia’s Public Guardian & Trustee Handbook (“CLEBC Handbook”)
[3] Vieira, Re (2013), 342 B.C.A.C. 274, 585 W.A.C. 274, 2013 CarswellBC 3020, 2013 BCCA 420, 51 B.C.L.R. (5th) 45 (B.C. C.A.)
[4] Reinsinger, Re (2002), 2002 CarswellBC 2886, [2002] B.C.J. No. 3162, 47 E.T.R. (2d) 127 (B.C. S.C. [In Chambers])
