Company and Finance News:

2018 Federal Budget: Tax Highlights
As anticipated, [the recent] federal budget (Budget 2018) focuses on a few targeted areas, including the taxation of passive investments made by private corporations, and does not contain any measures in response to the enactment of tax reform in the United States or relating to the OECD BEPS initiative. Significantly, Budget 2018 substantially narrows the scope of the Department of Finance's 2017 passive investment proposals. The 2017 proposals were exceedingly complex, and effectively proposed a punitive tax on income generated from investments made using after-tax business earnings of a private corporation. Budget 2018 presents a much simpler set of proposals. The principal tax changes announced in Budget 2018 of interest to the business community are summarized below.

Private Company Passive Investment Income
In 2017 the Department of Finance released a set of controversial and convoluted proposals aimed at addressing its concern that individuals who carry on business through a corporation can obtain a tax deferral advantage by retaining their after-tax business income in the corporation to make passive investments. The 2017 proposals were exceedingly complex, and effectively proposed a punitive tax on income generated from investments made using after-tax business earnings of a Canadian-controlled private corporation (CCPC) in excess of $50,000 per year. Budget 2018 presents a much simpler set of proposals.

Read the full article by R. Ian Crosbie, Brian Bloom, Marie-Emmanuelle Vaillancourt, Elie Roth, Raj Juneja, Michael N. Kandev, Paul Lamarre, Christopher Anderson, John J. Lennard and Andrew Ellis with Davies Ward Phillips & Vineberg LLP.

Sweet Relief: British Columbia Court of Appeal Upholds Mutual Cancellation and
Release Agreement Between Franchisor and Franchisee
Franchisors can be reassured by a recent decision of the British Columbia Court of Appeal (Dairy Queen Canada, Inc. v. M.Y. Sundae Inc.) that affirmed the use of Mutual Cancellation and Release Agreements as a means to resolve franchise disputes while protecting franchisors against future claims. In a May 2017 newsletter, we reported on a decision of the British Columbia Supreme Court that endorsed the use of a Mutual Cancellation and Release agreement as a means of terminating a franchise agreement. In that case, Dairy Queen Canada, Inc. (Dairy Queen), the franchisor, presented the Mutual Cancellation and Release Agreement to a franchisee that was in default of various obligations under its franchise agreement. In lieu of immediate termination, the Mutual Cancellation and Release Agreement gave the franchisee the opportunity to continue to operate for six months, during which it could sell its business, provided that the franchisee complied with the franchise agreement during the six month period. Importantly, and as its title would suggest, the Mutual Cancellation and Release Agreement contained a release of the franchisee's claims against the franchisor. Read the full article by Colin Pendrith with Cassels Brock LLP. 

Competition Act and Investment Canada Act Thresholds for 2018
Certain merger notification thresholds under Canada's Competition Act and the foreign investment review thresholds under the Investment Canada Act are updated on a yearly basis. On February 10, 2018, the Federal Government published the increases for the pre-merger notification "transaction-size" threshold under the Competition Act, and the pre-merger review threshold under the Investment Canada Act for acquisitions involving Canadian businesses by state-owned enterprises controlled in World Trade Organization ("WTO") member states. The pre-merger notification "transaction-size" threshold for 2018 has increased to C$92 million, from the 2017 threshold of C$88 million. A proposed transaction generally requires notification to the Competition Bureau under the Competition Act where both of the following thresholds are exceeded:

1. Party-size threshold: The parties to the transaction, together with their affiliates, collectively have assets in Canada, or gross annual revenues from sales from or into Canada, that exceed C$400 million (this threshold remains unchanged from year to year); and,
2. Transaction-size threshold: The size of the specific transaction will exceed C$92 million. In the case of asset or share transactions, this would mean that either the value of the assets in Canada of the target, or the annual gross revenues from sales in or from Canada generated from those assets, exceed C$92 million.

Read the full article by Devin Persaud, Gregory McLean, and Denes A. Rothschild

U.S. Tax Reform to Bring Double Taxation to Some Canadians
Changes will hit those with American property, dual citizens with Canadian earnings and even needy startups hoping for VC funds from U.S. While much of the commentary on U.S. tax reform has focused on the impact on business, some nasty surprises are in store for individual Canadians, particularly those with dual citizenship or who hold a U.S. green card. "The Americans have fundamentally changed the way that foreign income is taxed for U.S. citizens and residents," says Roy Berg, director, U.S. Tax Law at Moodys Gartner Tax Law LLP. "For example, a doctor who is a dual citizen and practising in Canada and has $2 million of accumulated earnings in a private Canadian corporation, would have a one-time U.S. tax liability of $300,000 this year." The tax is part of the "participation exemption system" that allows income earned abroad to be repatriated to the U.S. without penalty. "What it means it that foreign income is not taxed again when it comes into the U.S.," Berg says. "That's why Google, Apple and a host of other tech companies are bringing cash back in container loads." But there is a price, now known as the "transition tax." It imposes a one-time levy on U.S. citizens and corporations who own at least 10 per cent of the vote or value of a foreign corporation, including direct, indirect or constructive ownership of such stock. "The transition tax is particularly onerous because it applies not only to cash and cash equivalents held outside the U.S., but also to non-cash assets realized from the investment of business earnings," Berg says. Read the full article in the Financial Post by Julius Melnitzer.

FICOM News
The Financial Institutions Commission of BC published the following announcements and bulletins in December:

• Information Bulletin – Timelines for Statutory Approval Applications
• Letter to CEOs/General Managers, BC Authorized Financial Institutions – Information Bulletin FI-18-001: Timelines for Statutory Approval Applications
• Pensions Information Bulletin – Calculating Commuted Values for multijurisdictional formula based pension plans

Visit the FICOM website for more information.

Energy and Mines News:

Proposed Changes to Legislation for Major
Natural Resource Projects
On February 8, 2018, the federal government introduced Bill C-69 which, if passed, will enact the Impact Assessment Act (IAA) and the Canadian Energy Regulator Act (CERA). The Bill also proposes amendments to the Navigation Protection Act, retitling the act, broadening its scope, and increasing the number of waterways deemed navigable in Canada. As a result of recommendations from the expert panel report Building Common Ground: A New Vision for Impact Assessment in Canada, the IAA will shift focus from environmental effects of a federally regulated project to a wider assessment of project impacts on social and health aspects, economic opportunities, and cultural matters. A new Impact Assessment Agency will be established as the authority responsible for conducting impact assessments. Quickscribe has published an early consolidation of the new IAA, which will replace the current Canadian Environmental Assessment Act, 2012. CERA, which will replace the National Energy Board Act, intends to create a new federal Canadian Energy Regulator to replace the National Energy Board, restructure the approval process for major natural resource projects, and enhance consultation with groups affected by development. Proposed amendments to the Fisheries Act were also introduced on February 6, 2018 by Bill C-68. The legislation, among other things, aims to restore protections to all fish and fish habitats, support restoration of degraded habitat, and rebuild depleted fish stocks. In addition, the role of Indigenous peoples will be strengthened during the process of making habitat decisions.

2018 Federal Budget – Tax
Support for Clean Energy
Canada's Finance Minister Bill Morneau delivered the government's 2018 federal budget on February 27, 2018. As part of the budget's tax proposals, the government is extending an existing tax incentive measure to encourage investment in clean energy equipment (known as Class 43.2 property) for an additional five years. The capital cost allowance system provides an accelerated capital cost allowance rate for Class 43.1 and 43.2 properties as an incentive to encourage businesses to invest in specified clean energy generation and conservation equipment. Class 43.1, which provides an accelerated capital cost allowance rate of 30% per year on a declining balance basis, is available for a variety of equipment that generates or conserves energy by:

• using a renewable energy source (e.g., wind, solar, or small hydro),
• using a fuel from waste (e.g., landfill gas, wood waste, or manure), or
• making efficient use of fossil fuels (e.g., high efficiency cogeneration systems, which simultaneously produce electricity and useful heat).

Read the full article by Christopher Ross with DLA Piper. 

Site C: Behind the Decision to Proceed
Site C is a 1100-MW hydro-electric dam on the Peace River in northern British Columbia. It is being developed by BC Hydro, a British Columbia crown corporation, and has been under construction since 2014. It is costly – at the time of BC Hydro's Final Investment Decision, Site C was estimated to cost $8.34B, with a further $400M reserve fund held by the Province to cover unanticipated contingencies. Site C has also been controversial, arousing substantial opposition from affected First Nations, environmental groups and local landowners. With the election, in June 2017, of a new NDP government in British Columbia, Site C was referred to the British Columbia Utilities Commission, or BCUC. The BCUC was tasked to conduct an Inquiry into the costs of completing Site C as well as the costs and benefits of cancelling it. Read the full article by Jonathan S. Drance, Glenn Cameron and Rachel V. Hutton with Stikeman Elliott LLP. 

BC Environment Minister Unveils
Oil Spill Response Paper
Pipeline operators and railways would be required to start assessing and cleaning up an oil spill within two hours if it is near a populated area or four hours anywhere else, under regulations proposed by the BC government Wednesday [February 28th]. Environment Minister George Heyman released his ministry's intention paper on the beefed-up provincial spill response regulations that he and Premier John Horgan promised to "defend BC's interests" amid the prospect of increasing oil shipments across the province. The province is now seeking public input on the measures, which, without mentioning the company, are seen as an additional barrier to Kinder Morgan's $7.4-billion Trans Mountain Pipeline expansion project. "This is not about Kinder Morgan specifically," Heyman said in a scrum with reporters at the legislature. "This is about anyone who transports oil through the province." Read the Vancouver Sun article. 

BC's Bitumen Blockade: Selected Legal Options
Available to Producers and Shippers
Recently, the Government of British Columbia released an announcement to consider a series of proposed measures to restrict the shipment of diluted bitumen from Alberta oil sands operations by rail or pipelines, setting the stage for a constitutional dispute. If the proposals are enacted, such regulations will directly engage federally regulated matters of interprovincial commerce as well as interprovincial trade agreements. Proponents of pipeline projects and shippers may be faced with the prospect of launching constitutional challenges to the proposed new regulations if enacted. However, recent case law suggests that other, more immediate, legal remedies may be available to prevent harm to those parties, including injunctive relief. On January 30, 2018, the British Columbia Environment and Climate Change Strategy Minister George Heyman proposed a series of new regulations that would limit the increase of diluted bitumen transported into the province via rail and pipeline. The Minister claimed that the new regulations would impose restrictions on the increase of diluted bitumen transportation until "there is certainty about our ability to clean up a spill." The move has significant consequences for a large number of Alberta oil producers and shippers, and raises serious legal implications from a constitutional perspective. diluted bitumen, any proposed restrictions will risk conflicting with and breaching the terms and objectives of both the NWPTA and the CFTA. Read the full article by Peter Hogg, Dalton W. McGrath Q.C., and Michael O'Brien on Blakes Business Class. 

Family and Children News:

You May Have to Keep Your Promises
Some people are good for their word. Others are not. Depending on the circumstances, a promise you make may not be legally enforceable. However, in the words of the outgoing Chief Justice of the Supreme Court of Canada in the recent judgment in Cowper-Smith v Morgan, 2017 SCC 61, equity enforces promises that the law does not. That case involved a promise made by a sister to her brother in the context of making arrangements for the care of their elderly mother. The Court was asked to consider whether the doctrine of proprietary estoppel bound the sister to her promise after the mother's death. At a very high level, the mother's will gifted her estate equally to her three children. At some point, the mother became unable to live on her own and care for herself. One son, Max, who lived in England at the time, agreed to move back to British Columbia to live with and care for his mother in her house. Read the full article by Predrag Tomic with Field LLP. 

BC Judge Orders Chinese Millionaire to
Show Money to Non-wife
A BC judge has ordered a Chinese multimillionaire to provide documentation of his finances to a Vancouver woman bent on seeking spousal support in the aftermath of their short-lived Vegas wedding. Peipei Li sued Lu Hua Rao for divorce after learning he was still married to his wife in China. But not before the pair partnered on a $20 million deal to invest in Lower Mainland real estate. One BC Supreme Court justice had already thwarted Rao's plans to have their break-up battle heard by a Chinese arbitration commission, as opposed to a Canadian divorce court. Now, another has ruled that Li both has the right to seek spousal entitlements from their split and that Rao has three weeks to provide a complete picture of his wealth. "This finding only relates to the right of the claimant to make a claim for spousal support and property division," Justice Carla Forth wrote in her decision. Read the full CBC News article by Jason Proctor.

Environmental Appeal Board Decisions
There were three Environmental Appeal Board decisions in the month of February.

Wildlife Act

• Kevin Newberry v. Deputy Regional Manager, Cariboo Regional Operations Division [Final Decision – Appeal Dismissed]

Environmental Management Act

• Steve Hallett and Amanda Hallett v. Regional Director [Final Decision – Appeal Dismissed]

$105-Million Investment to Make Prescription
Medications more Affordable for Families
The British Columbia government is eliminating PharmaCare deductibles for working families with the lowest incomes in the province, helping to make sure they get the prescription medicines they need but currently are struggling to afford, Health Minister Adrian Dix announced [February 9th]. "No parent should have to make the difficult decision between their family's health and putting food on the table," said Dix. "The investment we're announcing today will make life more affordable for British Columbians, while making sure they get the care they need." The $105 million being invested in Fair PharmaCare over three years will eliminate or reduce the deductibles for 240,000 BC families. All families with household net incomes under $45,000 will benefit. Dix said the biggest impact will be felt by families with net annual incomes between $15,000 and $30,000. They will have no deductible, starting January 1, 2019. Read the full official government news release.

Toxic Metals from Plastic Left on the Beach are Leaching into the
Ocean's Ecosystems: BC Study
Simon Fraser University researchers say something as innocuous as a kid's toy left on a beach can play host to toxic metals that end up leaching into the ocean's ecosystems. Professor Leah Bendell and Bertrand Munier said their study shows even tiny plastic particles less than five millimetres in size can ferry traces of metals like zinc, copper and cadmium into the food chain. Munier, an environmental engineering masters student, spent four weeks picking up plastic debris from nine beaches along the Burrard Inlet last summer. He collected more than 150 pieces of plastic, including toys, earbuds, hospital bracelets, and food packaging from intertidal parts of the beach – areas underwater at high tide and dry at low tide. Tests detected traces of the metals in all of them. Read the full CBC News article. 

Local Government News:

BC Officials Clarify Plans for
Rental-only Zoning Law
Some cities in the Vancouver region are getting ready to jump on a new provincial law that will allow them to create rental-only zones. But mayors and planners say the rental-only zones – which were promised in the throne speech – won't take away current developers' rights to build condos where that possibility already exists, such as those in Burnaby's Metrotown or Vancouver's Cambie corridor who have already had their properties zoned for higher-density housing. Instead, they say they're more likely to create new rental-only zones when new area plans are designed for single-family neighbourhoods that are being densified, likely by transit hubs. "We're not doing this to downzone," said Vancouver's chief planner, Gil Kelley. Read the Globe and Mail article. 

Homes for BC
As part of its February 20 budget, the Provincial Government released a comprehensive 30-point plan for housing affordability that substantially addresses numerous recommendations within UBCM's housing report, A Home For Everyone: A Housing Strategy for British Columbians. Overall, the province's plan provides for significant new investments, policy and legislative changes to support affordability in BC. UBCM's report was structured around four policy shifts to increase the supply of affordable rental housing, address foreign and domestic speculation, tackle homelessness, and promote collaboration amongst all levels of government. Below we examine the Province's 30-point plan within this framework: Read the UBCM article. 

OIPC Reviewing Local Government
Video Surveillance
The OIPC issued a release on February 7, 2018, regarding its concerns about video surveillance by local governments:

https://www.oipc.bc.ca/public-comments/2128

The Acting Information and Privacy Commissioner states that while video surveillance is tempting to local governments to address public safety issues, there is little evidence that surveillance works. The OIPC is working with three municipalities to determine whether their recent video surveillance proposals are lawful. This is a reminder to local governments that video surveillance that collects information that can identify individuals must be compliant with the Freedom of Information and Protection of Privacy Act. Before a local government spends resources to implement a video surveillance system, we recommend that local governments review the Public Sector Surveillance Guidelines prepared by the OIPC and prepare a privacy impact assessment: Read the full blog post by Carolyn MacEachern of Young and Anderson.

Local Elections Campaign Financing Guide
The Guide to Local Elections Campaign Financing in BC for Candidates and their Financial Agents is now available on the Elections BC website. The Guide reflects recent legislative amendments regarding campaign contributions; discusses expenses and expense limits and other campaign finance matters related to the upcoming 2018 General Local Elections. Read the news release on the Union of BC Municipalities website.

Miscellaneous News:

Judicial Heavyweights Call for BC to
Introduce Anti-SLAPP Legislation
A judicial who's who including two retired Supreme Court of Canada justices and a pair of former BC attorneys general are calling on British Columbia to introduce laws to deter strategic lawsuits against public participation — also known as SLAPPs. In an open letter to BC Attorney General David Eby, former NDP premier and attorney general Ujjal Dosanjh, former Liberal attorney general Wally Oppal and former Supreme Court justices Frank Iacobucci and Ian Binnie say anti-SLAPP legislation is needed to keep deep-pocketed plaintiffs from discouraging free speech by threatening critics with costly legal action. "Defendants of SLAPPs are exposed to onerous financial and emotional costs incurred in a process that attacks their individual right to speak on matters of public interest and chills citizen engagement more broadly," says the letter, which was obtained by the CBC. "British Columbia needs to safeguard the administration of justice by enacting effective anti-SLAPP legislation." Read the CBC article. 

Elections BC Updates Forms
As a result of recent amendments to the Election Act affecting electoral finance rules, Elections BC updated forms in the following regulations as of February 2, 2018:

• Third Party Sponsor Disclosure Report Regulation
• Election Financing Regulation
• Leadership Contestant Financing Regulation
• Political Party and Constituency Association Financial Reports Regulation

A new regulation, Political Party Interim Financial Report Regulation, was also created, introducing a form for the submisssion of interim financial reports by parties eligible for allowances under the Election Act.

Legal Services Society Publications
Explain Aboriginal Legal Rights
Because of their unique circumstances, in Canada all Aboriginal peoples have legal rights, often called Gladue rights, named from a Supreme Court of Canada decision. These rights come from section 718.2(e) of the Criminal Code and the way the Supreme Court of Canada has interpreted it. The Court said the criminal justice system had failed Aboriginal peoples. It said Parliament intended section 718.2(e) to address the fact Aboriginal people are over-represented in jails and to make sure they're treated fairly when they're being sentenced by a court. The LSS booklet Your Gladue Rights provides a plain language introduction to Aboriginal peoples' Gladue rights, including the history of the Gladue case and what happens in court. Read the full article on the Provincial Court of BC eNews.

Sweeping Changes Coming to BC's
Motor Vehicle Tort System
After months of speculation, BC's Attorney General introduced changes to the province's motor vehicle tort system. The main changes include:

• A $5,500 cap on minor injuries;
• Doubling of mandatory accident benefits (Part 7); and
• The use of the Civil Resolution Tribunal to resolve some disputes.

The cap is a tool that is already available in other jurisdictions. The increase in Part 7 benefits will require out-of-province insurers that are signatories to the PAU (Power of Attorney and Undertaking for Motor Vehicle Liability Insurance) to match benefits. Read the full article by Raman Johal of Clark Wilson LLP.

BC Ride-hailing Report Paves Way for
Service Later this Year
Josée Ménard likes riding the HandyDart and is grateful that Vancouver cab companies have accessible vehicles in their fleets. But after ride-hailing services gained unanimous support from an all-party committee in the BC legislature on Thursday [February 15th], Ménard, who has progressive multiple sclerosis and uses a motorized wheelchair, said she hopes transportation network firms like Uber and Lyft make inroads to the province as soon as possible. The 57-year-old Vancouver resident said she has concerns about safety and accessibility, but would welcome a transportation option for those frequent times when a wheelchair-accessible taxi or HandyDart isn't available. "It fills up a big supply-and-demand (issue), so I think as long as everybody makes it safe, it just becomes another taxi company, basically," she said. Read the Vancouver Sun article. 

Court Dismisses "Low Velocity Impact" Collision
Claims in Part Based on Forseeability
In Greenway-Brown v. Kyung, the Plaintiff was involved in 5 separate collisions and alleged injury. The Court dismissed two of the claims based on liability. Of the remaining 3 the Court found that the Plaintiff did not meet her burden in proving injury. Interestingly, the Court then went even further and noted that as a matter of law it is not foreseeable that someone will suffer injury in a low velocity impact collision in a parking lot. This seems to contradict the reasoning from the BC Court of Appeal and numerous other so-called low velocity impact prosecutions. In any event, Mr. Justice Macintosh provided the following reasons extending the Mustapha reasonsing to low velocity collisions: Read the full article by Erik Magraken with McIsaac and Company.

BC Budget 2018 – Real Estate Highlights
On February 20, 2018, the Hon. Carole James, Minister of Finance and Deputy Premier, introduced the 2018 British Columbia Provincial Budget. Included in the Budget was the NDP's 30-point plan for housing affordability in British Columbia. Included in this 30-point plan are the following measures:

1. New Speculation Tax. In Fall of 2018, the Province will introduce a new speculation tax on residential property. The tax will target foreign and domestic speculators who pay little or no income tax in British Columbia. Primary residences and long term rentals will generally be exempted. The tax will apply to the Metro Vancouver, Fraser Valley, Nanaimo and Capital Regional Districts, and Kelowna and West Kelowna. The tax rate will be 0.5% of taxable assessed value for the 2018 tax year and 2% thereafter.
2. Property Transfer Tax Increase on Residential. Effective February 21, 2018, Property Transfer Tax on residential properties has been increased from 3% to 5% on the portion of the fair market value greater than $3,000,000.
3. Foreign Buyers' Tax Increase. Effective February 21, 2018, the foreign buyers' tax (also known as the additional property transfer tax) has been increased from 15% to 20%. This tax has also been extended outside of the Lower Mainland to include the Capital Regional District, the Fraser Valley, the Central Okanagan and the Nanaimo Regional District (though there will be a short grandfathering period for transactions in these regions).

Read the full article by Peter M. Tolensky, Nicholas R. Shon with Lawson Lundell LLP. 

BC Supreme Court Holds that Strata-property Nuisance Dispute
is within the Civil Resolution Tribunal's Jurisdiction
In a dispute that the court characterized as "extraordinarily heavy weather . . . made out of a common residential noise complaint," the Supreme Court of British Columbia has dismissed an application under section 12.3 of the Civil Resolution Tribunal Act for an order that it wasn't in the interests of justice and fairness that the Civil Resolution Tribunal resolve a strata-property claim.

Background to the Application
The parties in Yas v Pope, 2018 BCSC 282, were involved in interlocking claims before the tribunal, which the court described as follows:

Read the full article byKevin Zakreski with BCLI. 

Changes to Property Transfer Tax and APTT (Foreign
Buyers Tax) Effective February 21st
Changes to the Province's Property Transfer Tax system have been some of the most highly anticipated aspects to the 2018 BC NDP Budget. At first glance based on the Budget and the corresponding Homes for BC – A 30-Point Plan for Housing Affordability in British Columbia, the Province has not taken immediate steps to apply PTT to beneficial transfers of land (i.e. those where a Form A Transfer is not filed with the Land Title Office). However, the Province seems to be setting the stage for potential changes to this landscape in the time ahead.

Tracking Beneficial Ownership
Starting [February 21], the Province will require additional information about beneficial ownership on the Property Transfer Tax Return submitted with every Form A Transfer at the Land Title Office. This is an expansion on the additional information the Province began collecting in 2017 on PTT Returns. A registry setting out beneficial ownership of land in BC will also be established and made publicly available; this registry will be administered by the BC Land Title Survey Authority.

Read the full article by Sarah Jones with Clark Wilson LLP. 

Wills and Estates News:

Finding the Will Maker's (Hidden) Intention
from CLEBC website – Practice Points
In this paper, Andrew S. MacKay of Alexander Holburn Beaudin + Lang LLP discusses the court's discretion to dispense with the statutory requirements of will execution where there has been partial or substantial compliance with the formal requirements. Click here to view a pdf version of the paper.

Canadian Courts Espouse Different
Tests for Recognizing Spouses
Under BC's Wills Estate and Succession Act, SBC 2009, c 13 ("WESA"), a spouse has an interest in a deceased's estate if the deceased dies without a will. Furthermore, a spouse has standing to challenge the distribution of assets which pass through a deceased's estate using a wills variation claim. As such, when individuals plan their estates, it is critical to determine whether they are in a spousal relationship. According to section 2 of WESA, an individual is deemed to be a spouse if the individual and the deceased were either married to each other, or lived with each other in a marriage-like relationship for at least two years. Although the statute appears clear on its face, the recent decision of Re Connor Estate, 2017 BCSC 978 [Re Connor] calls that seeming clarity into question. Read the full article by Mark Weintraub, Q.C., Michael Wilson of Clark Wilson LLP. 

Mental Capacity Is a Legal Test, Not Medical
The test for testamentary mental capacity
is a legal test and not a medical test.
It is very common in testamentary capacity cases to have a conflict not only between the evidence of the medical practitioners, but also between the evidence of the medical experts, lay witnesses, and the lawyer who prepared and witnessed the will. The decision of Laszlo v. Lawton, 2013 BCSC 305, contains and improves the following statements of law relating to testamentary capacity: Testamentary capacity is not a medical concept or diagnosis, it is a legal construct. Accordingly, scientific or medical evidence, while important and relevant, is neither essential nor conclusive in determining its presence or absence. Indeed the evidence of lay witnesses often figures prominently in the analysis. Where both categories of evidence are adduced, it is open to the court to accord greater weight to the lay evidence than to the medical evidence, or reject the medical evidence altogether. O'Neill v. the Brown Estate, 1946 SCR 622. Read the full article by Trevor Todd on his blog disinherited – Estate Disputes and Contested Wills.