When executing a power of attorney for property, a person is free to choose whoever they want to act as their attorney for property when the time comes. However, it can sometimes be the case where a person’s named attorney for property, even their own family, take advantage of their position of power, and begin to act in their own self-interests instead of the incapable person’s best interests. In these situations, it may become necessary for the court to remove an attorney for property and replace them with a court-appointed guardian of property to protect the incapable person’s interests. This was the case in Public Guardian and Trustee v. Hara, 2025 ONSC 145.
Facts
Fumio Hara (“Fumio”) executed a continuing power of attorney which named his two brothers, Gerald and Katsushi, as his attorneys for property. When Fumio became incapable, Gerald began to act as his attorney for property. In 2024, it had become apparent to the Public Guardian and Trustee (the “PGT”) that Gerald had been grossly misappropriating Fumio’s money for years. As a result, the PGT brought an application to be appointed as Fumio’s permanent guardian and to terminate Fumio’s existing continuing power of attorney for property.
There was no dispute between the parties that Fumio was incapable and had been for years. There was also no dispute that Fumio was capable when he executed his continuing power of attorney for property. Therefore, the application turned on whether the PGT could show that Gerald had been misappropriating and mismanaging Fumio’s property. The court ultimately agreed with the PGT for the following reasons, among others:
— The PGT was able to show that Gerald had taken over $280,000 of Fumio’s money for himself. Gerald admitted that he took the money, and cited the fact that, in his mind, he was entitled to the money because he would eventually receive it under Fumio’s Will when Fumio died. Gerald felt that the money should stay in the family rather than go to any of the PGT’s fees;
— Gerald had incurred expenses on Fumio’s credit card totalling over $5,000 that were clearly not incurred by or on behalf of Fumio;
— Gerald was negligent in paying Fumio’s long term care home bills, and by September 2023, the arrears of Fumio’s long term care home fees totalled $9,317.64;
— Fumio owned a condo, and for reasons that were not explained, Gerald took out a $106,000 mortgage on the condo; and
— Gerald never filed Fumio’s taxes for 2022 and 2023, and Fumio may have be entitled to rebates and benefits if Gerald were to have filed those returns.
Applicable Legal Principles
As Fumio’s attorney for property, Gerald had fiduciary duties which required him to act in Fumio’s best interests alone, setting aside his own interests. Gerald was not entitled to obtain any benefits or advantages from his position without Fumio’s full knowledge and express consent, which Fumio was unable to give, given that he was incapable.
The court noted that there is a general reluctance to impose a court appointed guardian of property in the face of an attorney chosen by the incapable person in order to respect the wishes of the incapable person.
Nevertheless, section 22 of the Substitute Decisions Act, 1992, SO 1992, c 30 (“SDA”) allows a guardian of property to be appointed by the court:
22 (1) The court may, on any person’s application, appoint a guardian of property for a person who is incapable of managing property if, as a result, it is necessary for decisions to be made on his or her behalf by a person who is authorized to do so.
(2) An application may be made under subsection (1) even though there is a statutory guardian.
(3) The court shall not appoint a guardian if it is satisfied that the need for decisions to be made will be met by an alternative course of action that,
(a) does not require the court to find the person to be incapable of managing property; and
(b) is less restrictive of the person’s decision-making rights than the appointment of a guardian.
Before appointing a guardian of property where an attorney for property already exists, the court must also find that it is appropriate to remove the existing attorney for property. In doing so, the court (1) must be satisfied that there is strong and compelling evidence of misconduct or neglect on the part of the attorney, and (2) must consider whether the court is of the opinion that the best interests of the incapable person are being served by the attorney.
Conclusion
Unsurprisingly, the court found that there was compelling evidence of both misconduct and neglect on the part of Gerald, that the best interests of Fumio required that Gerald be removed as his attorney for property on a permanent basis, and that it was in Fumio’s best interests that the PGT be appointed as permanent guardian of property, given the fact that no alternative family member came forward to act as Fumio’s guardian of property.
It is safe to say that the court was not the biggest fan of Gerald or his actions. In one paragraph, the court stated that:
“Based on the uncontested evidence before the court and Gerald’s own admissions, he has more than breached his fiduciary duties to his brother, Fumio. He has shredded them. He has treated Fumio’s property and money as if they were his own. He misappropriated hundreds of thousands of dollars of his brother’s money on what appears to be the brazen assumption that he was entitled to the money. He was not.” [Emphasis added]
Perhaps as a culmination of the court’s view of Gerald and what he had done while acting as Fumio’s attorney for property, Justice Kurz noted that he could think of no more clear case to remove an attorney for property than the one before him.
