The recent decision in Adler v Gregor, 2019 ONSC 3037, by Justice Michael A. Penny of the Ontario Superior Court of Justice, shows how the courts deal with disputes over powers of attorney, which are often protracted and emotionally charged. Importantly, the courts are very critical of disputes that arise chiefly from a power struggle between family members, rather than from a genuine concern for the well-being of the person whose capacity is at issue.
Key takeaways
- Parties must not be involved, in any meaningful way, in capacity assessments.
- If obtained in the contemplation of litigation, capacity assessments must comply with Rule 53 of the Rules of Civil Procedure - the requirements for expert reports.
- Where the dispute has nothing to do with the incapable person’s best interests, the court will not award costs to be paid out of that person’s assets.
- The parties may be directed to pay the costs of the lawyer appointed to represent the interests of the person whose capacity is in issue.
Facts
The facts of Adler include many of the classic features of power of attorney disputes: Agnes Adler was 90 years old and had two daughters, Judy and Andrea. For many years, Agnes and her husband had used the services of Miller Thomson LLP for their estate planning needs. Shortly after her husband died, in 2000, Agnes executed powers of attorney for property and personal care, appointing Judy and Andrea as her attorneys, jointly and severally.
In 2015, Agnes executed new powers of attorney for property and personal care, appointing Andrea as her sole attorney, with Judy as Andrea’s substitute in the event of Andrea’s death, resignation, or incapacity. It was not dispute that for many years since her father’s passing, Andrea was more involved in Agnes’ daily support and care. Agnes directed her lawyers not to release the 2015 powers of attorney unless there was a finding of her incapacity by a physician or a licensed capacity assessor.
In 2016, Agnes began to experience increased difficulties in living independently. By mid-2016, she was receiving community care services twice daily, seven days a week. In April 2017, Agnes’ geriatrician prescribed her medication for moderate to severe dementia. A couple of months later, in July 2017, Agnes’ geriatrician opined that Agnes was no longer capable of making decisions for herself and recommended a capacity assessment. A certified capacity assessor, Anna Man, performed capacity assessments of Agnes’ ability to manage property and to grant a power of attorney for property. Ms. Man concluded that Agnes was incapable in both respects.
Meanwhile, tensions between Andrea and Judy were escalating. In early 2017, Judy’s husband brought separate defamation suits against each of Andrea and Andrea’s husband. A week after the Man capacity assessments, Judy took Agnes on a three-week European cruise with her husband. While on vacation, Judy arranged for Agnes to see another lawyer, Behn Conroy, who was recommended by Judy’s husband. Upon their return to Canada, Judy took Agnes to see Mr. Conroy, who apparently obtained Agnes’ instructions to prepare new powers of attorney for property and personal care. These powers of attorney appointed Judy and Andrea jointly. Agnes executed these powers of attorney in September 2017.
The sisters each retained litigation counsel. Judy’s counsel recommended a separate capacity assessment. A certified capacity assessor, Elizabeth Milojevic, performed a capacity assessment in October 2017 and concluded that Agnes was capable of granting a power of attorney for property and personal care. On this basis, Judy brought an application seeking to uphold the September 2017 powers of attorney.
In the application, Agnes was represented by Section 3 counsel, who, under the Ontario Substitute Decisions Act, represented the interests of the person whose capacity is in issue in a proceeding.
Result
The central issue before the court was whether the September 2017 powers of attorney were valid. In making this determination, the court had to consider: 1) whether Agnes had the requisite capacity in September 2017; and, 2) whether the September 2017 powers of attorney were made as a result of undue influence.
In his decision, Justice Penny was very critical of both parties’ conduct leading up to and throughout the litigation. His Honour was especially concerned that it was “clear beyond peradventure that while both daughters, I am sure, want the best for their mother, their mother’s interests have absolutely nothing to do with this dispute. This dispute is a power struggle between two siblings with long and abiding resentments towards one another, pure and simple.”
Justice Penny held that Agnes did not have the requisite capacity to execute the September 2017 powers of attorney. However, His Honour made this finding not on the basis of the capacity assessments, but rather on a clinical note by Agnes’ geriatrician which stated that Agnes had no capacity to make any decisions for herself. His Honour chastised both parties for their respective involvement in the assessments. Specifically, Andrea made disparaging comments against Judy and attempted to direct the conclusions of Ms. Man’s report, including reviewing a Word version of the report before it was finalized. Meanwhile, Judy demanded that Ms. Milosevic provide her with the questions in advance and make numerous revisions to her report to correct answers given by Agnes during the assessment (which Judy claimed not to have attended), which included changes to the answer provided by Agnes regarding her net worth. As a result, His Honour rejected both capacity assessments as unreliable “due to the bias and interference” of both daughters.
Of note, Justice Penny commented that capacity assessments obtained in contemplation of litigation should comply with the expert report requirements in Rule 53 of the Rules of Civil Procedure.
Due to Agnes’ dementia and short-term memory loss, Justice Penny commented that Agnes was vulnerable to manipulation in September 2017. Although it was unnecessary for Justice Penny to consider the issue of undue influence, having already found that Agnes lacked capacity, he noted that he would have also set aside the September 2017 powers of attorney on the basis of undue influence.
On the issue of costs, Justice Penny reiterated a prior ruling wherein he “made it clear that Andrea and Judy should have no expectation that [Agnes] will pay any of their legal expenses of this application and that they may well be asked to absorb the cost to their mother of having independent representation”.
If nothing else, the takeaway from this case is that caution should be exercised in power of attorney disputes to ensure that the interests of the person whose capacity is at issue remain paramount. Concerned family members should seek the advice of a lawyer before taking any steps.
