What Is Mitigation? Why Does It Matter?

Posted in: ICBC / INJURY- Apr 23, 2018 Comments Off on What Is Mitigation? Why Does It Matter?

In spring, 2012, Mandy (name changed) was hurt in a car accident through no fault of her own. She suffered some serious injuries, including soft tissue injuries to her neck and spine causing her neck and back pain. Her most serious injuries were psychological though, including depression, anxiety and chronic pain syndrome, still unresolved at the time of the court hearing years later.

The trial court had awarded her compensation for pain and suffering, loss of past earnings and loss of future earning capacity. But then it cut that award in half; the B.C. Court of Appeal agreed with this decision. Here’s why.

You may have heard that there’s a “duty to mitigate” your losses or injuries caused by someone else if you’re hurt in a car (or other) accident. That duty exists even if the accident was the other side’s fault.

In this situation, you may be entitled to compensation from the at-fault vehicle driver, owner or their insurer (typically ICBC). The compensation aims to put you in the same financial position you would have been in if the accident hadn’t happened. But you can’t just sit idly by and look to the defendant to make you whole financially. You have to take reasonable steps to “mitigate” – to reduce – the losses you sustained. That common sense approach is one our courts have long taken.

So if the defence can prove your losses would have been less if you had taken appropriate action, your compensation may be reduced by the court. The reasoning is that the defendant shouldn’t have to pay for your failure to reduce your losses.

In Mandy’s case, Mandy was employed in a junior managerial position at a bank at the time of the accident.

Her bank employer knew it had to accommodate her medical condition and was keen to have her back. But Mandy felt due to her condition she couldn’t go back and needed a career change. Her plan was to become a counsellor. This would mean some four to five years of study, and then likely a lower salary than if she returned to work at the bank and over time progressed to a more senior level. She also argued she would likely never be able to work full-time again.

The court didn’t agree, however.

Mandy had adamantly refused repeated medical recommendations that she should get treatment from a psychiatrist and take anti-depressant medications as advised. Her reluctance stemmed partly from her concern that she’d be stigmatized for having mental problems. The court rejected this as a valid excuse in this modern day and age. There was also medical evidence that she would benefit from the recommended psychiatric treatment and ultimately be able to return to full-time work.

Because Mandy didn’t take reasonable steps to mitigate her losses (e.g., past and future wage losses), the trial court cut her compensation award significantly. The appeal court saw no valid reason to change this.

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer.

Mental Capacity To Make A Will

Posted in: Wills and Estates- Apr 23, 2018 Comments Off on Mental Capacity To Make A Will

Occasionally a person’s mental capacity to make a valid will is questioned. The testator (the person who made the will) may have been very old when they made it. Or perhaps they were losing their memory or had other cognitive difficulties associated with growing old.

So when does a person have testamentary capacity, i.e. sufficient mental capacity to make a valid will? The BC Supreme Court recently dealt with this question.

David (names changed) made his last will in January of 2015, when he was 93. He left his modest estate to Bob and Elaine, two of his three children, but excluded his first child, Peter. A couple of months later he passed away.

Soon after, Peter (and Peter’s daughter Mary) challenged David’s testamentary capacity to make this will in court.

A couple of years passed without much progress in Peter’s lawsuit, so Bob and Elaine asked the court to determine if the will was valid. Peter objected; he wanted more time to investigate hospital records about some cognitive problems (like confusion) that his father had experienced in hospital following hip surgery in 2014.

Whether a person has testamentary capacity is a legal issue, said the court, though medical opinions are often helpful and relevant. In this case, the court already had enough information (including from David’s family doctor and the lawyer who independently saw David and prepared his last will) to decide this question.

The legal test boils down to a few key points, none of which are overly demanding, noted the court. A person has testamentary capacity if they basically understand what making a will is about and they have enough “disposing memory” – meaning they can recall the nature and extent of their assets, who might naturally expect to benefit under the will, and who might potentially object (and challenge the will) if cut out from the will.

So long as the testator is able to meet this test, they can make a valid will – even if, for example, they might not be able to manage their own financial affairs or personal care. Specifically, you can have testamentary capacity despite some memory loss, occasional confusion and even emerging dementia.

The legal and medical evidence in this case showed that by 2015, David had some memory loss, was occasionally confused and had some cognitive deficits that could indicate the beginnings of dementia. But the evidence also showed that he understood what his will covered, what his assets were, which children he was leaving an inheritance to and whom he was leaving out.

The court decided David met the legal test for making a valid will (i.e. he had testamentary capacity) and declared the will valid. (Peter could still go to court to attempt to change the will, though valid, to try and get something from his father’s estate.)

While getting a lawyer to prepare your will is always a good idea, it’s especially important where there may be concerns about diminished mental capacity.

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer.

Family Help With House Purchase Can Backfire

Posted in: FAMILY LAW- Apr 20, 2018 Comments Off on Family Help With House Purchase Can Backfire

Sky-high house prices in parts of B.C. mean young couples sometimes need help from the “bank of mom and dad” to buy a house. The parents may want to assist financially. But to save legal fees, they too often do this by an informal family arrangement that’s not thought out or written down, which different family members see differently. This can backfire badly, with the two generations at loggerheads, ending up in court, and spending way more legal dollars. A recent court case offers an example.

Here, the mom wanted to help out her daughter and son-in-law. The young couple bought a house in 2005, with a basement suite for the aging mom and her husband to move into and live in. The mom contributed $150,000 (about 29%) of the purchase price. The step-dad, who had a long- standing alcohol problem, passed away several years later, and the mom continued to live in the basement suite alone. She also chipped in for house-related expenses over the years.

In March, 2014, her son (who had a criminal record) moved in with mom. Initially this was intended to be for just a short time. But it ended up continuing for many months, to the distress of the young house-owning couple. By year end, they had a major falling-out with the mom over this. When asked once again in November when he would leave, her son felt insulted and moved out. The mom also took offence and decided to move out in early 2015.

Result? A court case in which the two sides made wildly different claims. The daughter and son-in-law said the initial $150,000 from mom was prepayment of rent for the basement suite for 10 years. Mom, who never went on title or documented anything about the arrangement, said she was entitled to 29% of the house, which had gone up in value by 2017 when this went to court.

The trial court had to try and figure out what the arrangement really was to begin with. It then had to see if complex legal concepts like the “presumption of resulting trust” or “unjust enrichment” allowed the mother to get back some of her financial contribution. (Apart from the initial $150,000, she’d also paid some $28,500 toward house insurance, taxes and utilities). The court decided she could only recover the $28,500. She couldn’t get an ownership interest in the house (since she’d gotten the benefit of living in the basement suite for free for nine years, until she moved out).

The mom felt this decision was wrong and appealed. The appeal court agreed that in the particular circumstances, she should get additional compensation based on a complicated formula, though not an ownership interest in the house. The compensation amount was to be determined by the trial court if the parties couldn’t agree on it.

To avoid this kind of unhappy (and expensive) situation, best get legal help up front with any planned family financial arrangement.

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer.

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