Understanding Estate Obligations for Committees in B.C. Incapacity Cases

When someone becomes incapable of managing their own affairs, a court in British Columbia may appoint a committee under the Patients Property Act, RSBC 1996, c 349. This fiduciary role is often misunderstood — particularly when it is compared to the duties of executors or trustees who have Power of Attorney.

While a trustee or executor is expected to manage or distribute an estate with a focus on maximizing value for beneficiaries, a committee operates under a very different standard. Their responsibility is to the incapable person alone, and any management of the patient’s estate is generally undertaken only insofar as it benefits the patient. The committee’s relationship to the estate is therefore indirect: it exists only through the lens of the patient’s best interests, not out of any obligation to grow the estate for heirs.

Section 18: A Duty to the Patient First and Foremost

Section 18(1) of the Patients Property Act says:

“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.”

At first glance, this provision might suggest a balancing act between the interests of the patient and their broader family. But British Columbia courts have consistently interpreted the language of section 18 in a way that centres the incapable person, not their heirs. The reference to “the patient’s family” does not impose a duty to future beneficiaries, nor does it require the committee to preserve or enhance the value of the estate for eventual distribution.

Instead, the “family” language has been treated as a recognition that some decisions may have collateral benefits for family members — such as supporting a dependent child or spouse — but only when those benefits align with the patient’s own needs and welfare. Committees are fiduciaries to the patient, not fiduciaries of the estate, and not agents of the family.

This interpretation was affirmed in British Columbia (Public Trustee) v. Bradley Estate, 2000 BCCA 78. In that case, the Court of Appeal rejected a proposal to restructure a patient’s estate for tax purposes in a way that would benefit his children after death. Even though the plan would have saved on U.S. estate taxes and arguably preserved more wealth, it was found to be incompatible with the committee’s duty because it would materially reduce the estate during the patient’s lifetime without delivering any personal benefit to him. The court held that committees may only reduce the estate if doing so genuinely serves the patient’s welfare. There is no authority to take financial risks or restructure the estate solely to favour eventual beneficiaries (paras 15–20).

This principle was reaffirmed — and clarified — in Uhlving Estate v. Public Guardian and Trustee, 2024 BCCA 397. There, the Public Guardian and Trustee declined to pursue a WESA wills variation claim on behalf of an incapable widow, even though a successful claim would have increased the size of her estate for her adult children. The court upheld this decision, emphasizing that the committee’s statutory duty does not authorize litigation that exposes the patient’s assets to risk unless the litigation is directly linked to improving the patient’s own financial position or care. Justice Grauer wrote:

“A statute aimed at the protection of vulnerable persons… cannot authorize a committee to act in a way that would jeopardize the patient’s continued care and maintenance when the only consequence would be to materially benefit a legally unrelated third party.” (Uhlving, at para 54)

While a committee must be mindful of the family’s needs in situations where the patient’s support obligations persist — for example, to a dependent spouse or child — these are exceptions grounded in the patient’s own obligations and well-being. The core principle remains: the estate is a resource for the patient, not an inheritance to be grown for others.

By contrast, an executor or trustee is specifically tasked with managing and preserving an estate for the benefit of named beneficiaries or classes of heirs. Their role includes identifying tax efficiencies, recovering debts owed to the estate, and maximizing value for distribution. A committee, however, cannot simply do what’s best for the estate. They must ask: does this decision benefit the patient, directly and meaningfully, during their lifetime? If the answer is no, the action should likely not be taken — even if the patient’s family might stand to gain.

What If There’s Truly No Impact on the Patient?

The core legal position is this: committees are not neutral stewards of the estate. Their powers are exercised through the prism of the patient’s benefit — not for the estate’s general preservation, and certainly not to increase the share left to others.

So, even where a decision is costless or low-risk (e.g., pursuing a simple claim, amending a will, or changing asset structure), courts have been reluctant to allow committees to act purely to benefit others, unless:

  • The patient gains some tangible or intangible benefit (e.g., peace of mind, maintaining long-standing family expectations, or avoiding conflict);
  • The action aligns with the patient’s known wishes, expressed prior to incapacity;
  • There is no financial, reputational, or practical risk to the patient or their care; and
  • The action is objectively reasonable under the standard of a “prudent person of business.”

But even under those circumstances, caution prevails. If there is a chance the decision could be interpreted as self-dealing or as exceeding the scope of authority, courts will tend to side with inaction. That is, committees should be risk-averse, even inactionist, when the benefit is external and the internal justification is weak.

Conclusion: Duty First, Legacy Second

Committees are not custodians of inheritance. Their duty is not to secure windfalls for beneficiaries, but to make careful, prudent decisions that protect the welfare of the patient during their lifetime. While trustees and executors look to the future — preserving and maximizing assets for others — committees look primarily to the present, with one question in mind: What serves the best interests of the person I am appointed to protect?

If you have been appointed as a committee, or are navigating questions about estate planning and incapacity, our team can help you understand your legal obligations and protect both your loved one’s interests and your own.

Contact Heath Law today. or read more of our blog articles about Trusts and Estate Law.

Many professionals are choosing to structure their services through a corporation, often working as independent contractors rather than direct employees. This approach can offer significant tax benefits that surpass the limited options available to employees. However, before jumping into incorporation, it’s crucial to understand the potential tax consequences, especially if you’re providing services to an entity that would otherwise employ you directly.

Employee vs. Independent Contractor

The key to determining whether you’re an employee or an independent contractor lies in whether you’re running your own business or simply working for an employer.

Here are some factors to consider:

1. Intention: What was the original agreement or understanding between you and the company?

2. Control: How much control does the company have over how and when you work?

3. Equipment: Do you supply your own tools and equipment, or does the company provide them?

4. Financial Risk: Are you taking on financial risk, like investing in equipment or covering expenses?

5. Opportunity to Profit: Do you have a chance to earn extra income based on your performance and efficiency?

Understanding the Tax Implications

Incorporating your business can offer tax advantages, but it also comes with important considerations. The Income Tax Act has rules to prevent tax avoidance through incorporation. A significant provision is the Anti-Avoidance Rule, which applies if you incorporate your business to provide services that would normally be done as an employee. In such cases, your corporation might be categorized as a personal service business.

Personal Service Business: What You Need to Know

If classified as a personal service business, you’ll face several tax disadvantages:

1. Restricted Deductions: You’ll have limited ability to deduct common business expenses like office supplies, travel, meals, and phone bills.

2. Loss of Small Business Deduction: You won’t be eligible for the small business deduction, which usually provides a lower tax rate.

3. Higher Tax Rate: Personal service businesses are subject to a higher tax rate—specifically 5% of the corporation’s taxable income for the year.

Conclusion

If you’re considering incorporating as an independent contractor, please contact Heath Law to book and appointment with one of our lawyers for legal advice and seek out a tax professional to avoid unexpected tax issues.

 

What is Unjust Enrichment?

Unjust enrichment occurs when a party confers a benefit upon another party without receiving the proper restitution required by law. Unjust enrichment is a strict liability and faultless claim, meaning the plaintiff will only get back exactly what was transferred. The principle aims to reverse an unjustified transfer and restore the parties to their pre-enrichment status.

The Elements of a Successful Unjust Enrichment Claim

To successfully claim unjust enrichment, three key elements must be satisfied:

  1. Objective Benefit to the Defendant: The defendant must have received a benefit, which can be anything of value, such as money, services, or property.
  2. Corresponding Deprivation to the Plaintiff: The plaintiff must have suffered a loss or deprivation as a result of the benefit conferred on the defendant.
  3. Absence of a Juristic Reason: There must be no legal justification for the defendant’s retention of the benefit. In other words, the benefit received by the defendant cannot be justified by a contract, a gift, or a legal obligation.

Defences Against Unjust Enrichment Claims

There are several defences that a defendant might use to counter a claim of unjust enrichment:

1. Subjective Devaluation: This defence may defeat the first element of the unjust enrichment claim when the defendant did not have a choice in accepting the benefit. More specifically, when the defendant did not voluntarily choose to assume financial responsibility for the benefit.

Rebutting Subjective Devaluation: The plaintiff can rebut the subjective devaluation if:

  • The defendant requested or accepted the benefit with knowledge of the expectation of payment.
  • The benefit was readily returnable, and the defendant did not return the benefit to the plaintiff.
  • The defendant has received an incontrovertible benefit such as money, realized financial gain, or the saving of a necessary expense.

2. Change of Position: This defence applies if the defendant has spent or used the benefit they received in a way that means they no longer have it. To use this defence successfully, the defendant must prove:

    • Extraordinary Expenditure: The benefit was spent on something unusual or special, not regular expenses—for example, buying concert tickets instead of paying a credit card bill.
    • Relying on the Benefit: The defendant only spent the benefit because they believed they were entitled to it. For instance, they bought the concert tickets because they thought the benefit was theirs to keep.
    • Good Faith: The defendant must show they acted honestly. If they knew they weren’t entitled to the benefit, they couldn’t use this defence.

3. Public Policy and Reasonable Expectations: In some cases, the defendant may argue that retaining the benefit aligns with public policy or reasonable expectations. This defence is evaluated on a case-by-case basis.

Conclusion
Unjust enrichment is a complex area of law aimed at ensuring fairness when one party unfairly benefits at another’s expense. Whether you’re pursuing a claim or defending against one, grasping these principles is crucial to achieving a fair resolution.

If you suspect you’ve been subjected to a case of Unjust Enrichment and would like to book an appointment with one of our lawyers, call 1-866-753-2202 or drop us an email.

Does Litigation Privilege Apply to Communications Amongst the Board of Directors?

Litigation privilege prevents a party to litigation from having to disclose documents that were made in anticipation of or for the purpose of litigation. Litigation privilege ensures the efficacy of Canada’s adversarial process by giving parties a “zone of privacy” to conduct investigations and prepare for litigation.[1]

While solicitor-client privilege is broader in scope, litigation privilege is distinct in that it is not limited to confidential communications between a solicitor and client. Litigation privilege does not require a solicitor to be a party to the communications whatsoever. However, the courts have noted that litigation privilege, in comparison to solicitor-client privilege, is “less absolute, more fact-driven and subject to challenge.”[2]

A pertinent question then arises: does litigation privilege protect communications among directors of a corporation or society?

Litigation Privilege Criteria

The short answer is it depends. For litigation privilege to apply, the party asserting privilege must establish for each document over which privilege is being claimed:

(1) that litigation was ongoing or was reasonably contemplated at the time the document was created; and

(2) that the dominant purpose of creating the document was to prepare for that litigation.[3]

The two-prong test is objectively assessed, meaning very little consideration is given to the party’s subjective thoughts. The first prong of the test is assessed by asking: “Would a reasonable person being aware of the circumstances conclude that the claim will not likely be resolved without litigation?”[4] The analysis of the second prong is fact-driven, focusing on the surrounding circumstances in which the document was created.[5] Considerations in this analysis include “when [the document] was created, who created it, …and what use was or could be made of it.”[6]

How to Protect Directors’ Correspondence

If directors intend to rely on litigation privilege to protect their correspondence, they must ensure that the documents are created in the face of litigation, and that the dominant purpose of the documents is for the impending litigation. It is prudent practice for directors to specify that the dominant purpose of the document is for litigation. Additionally, directors should avoid including disparaging or irrelevant comments in the correspondence to maintain the dominant purpose of litigation.

[1] Blank v Canada (Minister of Justice), 2006 SCC 39 at paras. 27 and 34.
[2] Stone v Ellerman, 2009 BCCA 294 at para. 27.
[3] Gichuru v British Columbia (Information and Privacy Commissioner), 2014 BCCA 259 at para. 32.
[4] Raj v Khosravi, 2015 BCCA 49 at para. 11.
[5] Ibid, at para. 17.
[6] Birring Development Co. Ltd. v Binpal, 2021 BCSC 1298 at para. 31.

 

Contact Heath Law in Nanaimo for any questions.

How the Home Buyer Rescission Period Protects You in BC Real Estate Transactions

Buying a home is a significant financial commitment, and sometimes, decisions made in the heat of the moment can lead to buyer’s remorse. Recognizing this, British Columbia has implemented a Home Buyer Rescission Period (“HBRP”) to offer buyers a safety net. Here’s what you need to know about this essential protection mechanism.

What is the Home Buyer Rescission Period?

The HBRP, often referred to as a “cooling-off period,” is a statutory timeframe during which home buyers can back out of a purchase agreement without incurring severe penalties. This period aims to give buyers the chance to reconsider their decision, seek additional advice, or conduct further due diligence. Further, parties to a real estate transaction cannot waive the right to rescind within the HBRP.

Key Features of the Home Buyer Rescission Period

  1. Duration: The HBRP lasts for three business days. This period begins the day after the buyer’s offer is accepted by the seller.
  2. Scope: The HBRP applies to most residential real estate transactions, including detached homes, townhouses, apartments and condominiums. However, the HBRP does not apply to transactions of real property on leased lands, leasehold interests, property sold at auction, property sold under a court order or the supervision of the court, or property under section 21 of the Real Estate Development and Marketing Act. Further, the HBRP does not provide the right to rescind once title of the property has been transferred from the seller to the buyer.
  3. Notice Requirement: If a buyer decides to rescind their offer, they must notify the seller in writing within the rescission period. The notice must include the identification of the property, the buyer’s name and signature, the seller’s name, and the date that the right of rescission is being exercised.
  4. Costs: Exercising the right to rescind is not entirely free. Buyers who rescind their accepted offer are required to pay the seller 0.25% of the agreed-upon purchase price. If a deposit has been paid, this amount can be paid from the deposit, with the remainder of the deposit to be returned to the buyer. This payment helps compensate the seller for the inconvenience and potential loss of opportunity.

The HBRP is a crucial consumer protection measure. It provides buyers with the time to conduct thorough inspections, secure financing, seek professional advice, and avoid impulsive decisions.

If you are considering purchasing a new residence, visit our FAQ page for definitions, and explore our blogs on real estate law or homeowner liability. Additionally, contact us for assistance in updating your will and trust after your new purchase. For more information, check out our Wills & Estate Law blogs.

Understanding Fraudulent Misrepresentations in Real Estate Contracts

A recent decision out of Ontario (1000425140 Ontario Inc. v 1000176653 Ontario Inc., 2023 ONSC 6688) illustrates how fraudulent misrepresentations in real estate transactions can lead to the rescission of the contract. The case involved Aiden Pleterski, the self-described “Crypto King”, and NBA basketball star, Shai Gilgeous-Alexander. The defendants fraudulently misrepresented to the plaintiff, Gilgeous-Alexander, that the luxury home was private and secure, and omitted to disclose the ongoing safety risk of defrauded investors attending the property and threateningly demanding to know where Mr. Pleterski was. There was ample evidence to support the ongoing safety risk, including Mr. Pleterski being kidnapped, held hostage and physically harmed by people he had defrauded. The Court found that the defendants knew of the safety risk at the property. The Court held that the safety concerns of the plaintiff were legitimate and not simply “sensitivities or superstitions.”

The defendants argued that they were shielded from liability by the “buyer beware” doctrine and argued that they did not make any fraudulent misrepresentations. However, the Court held that rescission of the contract was the appropriate remedy in this case, putting the parties back to their original positions.

What is a Fraudulent Misrepresentation?

A fraudulent misrepresentation occurs where a representation of fact is made without any belief in its truth, with the intent that the person to whom it is made shall act upon it and actually causing that person to act upon it. A fraudulent misrepresentation may be a direct lie or a significant omission, also known as a half-truth. Generally, an executed contract for the sale of land can only be rescinded if fraud is present.

What is the “Buyer Beware” Doctrine?

The “buyer beware”, or caveat emptor doctrine operates to protect sellers of land by holding buyers responsible for defects that would be discoverable upon a reasonable inspection. Simply put, a seller is not responsible for everything that could potentially impact a property, but they may be responsible where they knew of, or ought to have known of the presence of the defect and failed to disclose it to the purchaser. As such, fraudulent misrepresentations are one exception to the doctrine. A seller who makes a fraudulent misrepresentation cannot rely on caveat emptor to shield themselves from liability.

Could this Outcome Occur in British Columbia?

Had this case occurred in British Columbia, it is possible that the outcome would be the same. However, it would require exceptional facts. In a case out of the Court of Appeal for British Columbia (Wang v Shao, 2019 BCCA 130), the seller’s omission about a murder on the property was not found to be a fraudulent misrepresentation, and the buyer was not entitled to rescission. In another case out of BC (Karner v Kuhnke, 2021 BCSC 1942), a couple selling a home failed to disclose a geotechnical report identifying a dangerous rock wall behind the house requiring costly remediation work. The sellers only disclosed that some rocks had fallen onto the deck but did not disclose the full extent of the risk. By intentionally revealing only parts of the truth, the buyers were led to believe that the rock wall was not an issue. The Court found that the half-truths told by the sellers regarding the rock wall amounted to a fraudulent misrepresentation. The sellers were liable for the tort of deceit. The plaintiff buyers in this case did not seek rescission, however, rescission of the contract may have been an alternative remedy had they not wanted to keep the property.

If you think you’ve been a victim of a fraudulent real estate transaction, book a consultation with Nanaimo’s best team of legal experts in real estate law and litigation.

How BC’s Short-Term Rental Accommodations Act Affects Your Property

The government of British Columbia has recently enacted new legislation regarding short-term rentals. The Short-Term Rental Accommodations Act (the “Act”) came into effect in October 2023 and will continue to be rolled out over the course of two years. The primary aim of the Act is to address the housing shortage by transitioning short-term rental units into long-term housing options. However, there are certain exemptions to the new legislation including hotels, motels, student accommodations, as well as ski and resort regions, and farmlands.

A short-term rental is defined as the service of accommodation by a property host, in exchange for a fee, that is provided to members of the public for a period of less than 90 consecutive days. The Act limits short-term rentals to where the host utilizes the property as their principal residence, meaning they reside at the residence for a longer period of time in a calendar year than any other place. Further, the property host may offer for rent a secondary suite or an accessory dwelling unit where the property is the host’s principal residence. The principal residence requirement applies to communities with a population higher than 10,000 people, including smaller neighbouring communities. Communities such as Tofino and Whistler are not included in the principal residence requirement, however, their local governments may choose to opt-in to include this requirement.

The Act also imposes obligations on the host of short-term rentals as well as the platform service providers, such as Airbnb and VRBO, to be registered with the province. The host must include their provincial registration number, and where applicable, a business licence number on the rental listing.

The Act will have impacts on short-term rentals found on Airbnb, VRBO and other platforms, however, rentals will still be available where the property is the principal residence of the host. Where it is the principal residence, the host can rent the property, as well as one secondary suite or one accessory dwelling unit.

Do you have questions about turning your primary residence into a short-term rental, or how the Act affects secondary properties? Contact Heath Law to schedule your consultation.

*This blog is up to date as of June 1, 2024*

Understanding the Legal Framework and Future Changes in Medical Assistance in Dying in Canada

Since 2016, medical assistance in dying (MAiD) has been legal in Canada. This post discusses when MAiD is available to an individual, and how these circumstances may be broadening in the future.

There are currently safeguards in place to ensure the protection of vulnerable people. To qualify for MAiD, a person must:

  • be eligible for health services publicly funded by the government of Canada (i.e. BC’s Medical Services Plan);
  • be 18 years or older and capable of making decisions about their health;
  • have made a voluntary request for MAiD that was not made as a result of external pressure;
  • have given informed consent to receive MAiD after being informed of alternative means available to relieve their suffering; and
  • have a grievous and irremediable medical condition.

A grievous and irremediable medical condition is defined as a serious and incurable illness, disease, or disability, where the person is in an advanced state of decline that cannot be reversed, causing the person to endure physical or psychological suffering that is intolerable to the person and cannot be relieved under conditions they consider appropriate.

The current legislation does not include mental illness in the definition of “illness, disease, or disability”. The government planned to expand eligibility to include mental illness in March 2024 but postponed this to March 2027 through Bill C-62.

The reluctance to include mental illness stems from difficulties in assessing the irremediability of mental illnesses, protecting vulnerable individuals, distinguishing MAiD requests from suicidal intentions, lack of professional consensus, and limited availability of trained practitioners. Evidence has been presented both supporting and opposing these concerns.

Looking ahead, MAiD may eventually be available for those with mental illness as their sole medical condition, provided the medical system is prepared to handle these cases safely and diligently.

If you have applied for MAiD and require legal assistance with ensuring your Will and estate are up-to-date, contact Heath Law.

Key Annual Obligations for Corporations in British Columbia

The British Columbia Business Corporations Act (BCA) requires all corporations to file an annual report with the registrar, pursuant to section 51 of the Act. By filing your annual report, you are informing the B.C. Registry that your company is in active standing. A failure to file an annual report after two consecutive years may result in company dissolution. This post looks at important annual maintenance responsibilities and obligations of a corporation.

Annual Reference Date and Annual General Meeting

Section 1(1) of the BCA describes the annual reference date as the date when the next general meeting is to be held. This date is to be one year from the previous annual general meeting or before as approved by shareholders which needs to be filed in the annual general meeting.

The BCA requires that a corporation hold an annual general meeting every year, within two months after each anniversary of the date on which the company was recognized. At the meeting, the directors are to provide financial statements as well as any auditor’s report on the financial statements. Note that the BCA does allow all shareholders to vote on a resolution to waive an annual general meeting and if it is unanimously passed then the meeting does not have to be held.

Financial Statements

A corporation and its directors are required by law to produce and publicize annual financial statements under s. 198(2) of the BCA, ensuring that the financial statements are prepared properly. Section 199(1) provides that financial statements are to be approved and signed by the directors before they are published and completed with an auditor’s report. Section 200(1)(a) of the BCA allows directors to be relieved of this obligation if all shareholders unanimously resolve to waive the requirement.

Director Elections and Appointing an Auditor

Every annual filing requires that at least one director be appointed to the corporation. This needs to be shown in the documents of the annual general meeting. Section 203(1) of the BCA requires that every corporation have an auditor and the auditor has to report on the financial statements of the corporation, s. 212(1). Hiring an auditor for a small corporation can be an expense that is unnecessary. The act does allow a corporation to waive the need for an auditor, as per s. 203(2). To waive the requirement all shareholders must unanimously resolve to waive the requirement on the resolution.

 

If you need professional consultation to understand your legal responsibilities when choosing to incorporate your business, contact Heath Law, in Nanaimo, BC or read more commercial law articles here.

Advantages of Incorporation for Small Businesses

As a small business grows, there are risks of personal liability. The act of Incorporating a business is one way to mitigate personal liability. Limited liability is not the only advantage that incorporation provides. This post explores the advantages of incorporation, focusing on its legal, financial and operational benefits.

Limited Liability Protection

Incorporation establishes the business as a distinct legal entity, separate from its owners. This pivotal separation shields personal assets from business liabilities and debts. Incorporations offer some protection from potential lawsuits or financial encumbrances, bolstering financial security and risk management.

Transfer of Ownership Interests

The ownership of corporations is generally in the form of shares, rather than holding specific assets. Shares permit increased flexibility in ownership transitions, which may enable smoother succession planning or acquisitions.

Unlimited Life Span

Provided the corporation maintains its registration with the provincial government (as the case may be), it has an everlasting existence. This is in contrast to other forms of business, such as a sole proprietorship where the business may dissolve upon the owner’s demise, and corporations sustain operational continuity.

Enhanced Credibility

Incorporating signifies a commitment to long-term business viability, enhancing credibility among stakeholders. The enduring corporate structure conveys stability and reliability, instilling confidence in investors, lenders, employees, suppliers, and customers alike. This credibility may foster stronger business relationships and growth opportunities.

Improved Access to Financing and Tax Benefits

Corporations attract greater attention from investors and lenders due to their transparent organizational structure. Moreover, corporations may leverage tax advantages such as lower tax rates, deductions, and income splitting among shareholders.

Provincial vs. Federal Incorporation

The choice between provincial and federal incorporation hinges on the business’s expansion plans and operational scope. Local businesses with limited geographical reach may opt for provincial incorporation, while those considering national or international expansion may benefit from federal incorporation.

The above list is just a small sampling of the advantages of incorporation for small businesses. Heath Law’s team of commercial and business law experts can provide the legal advice you need for your small business type.

Contact us to book an appointment with one of our lawyers today or read more commercial law blogs.