The court can grant leave to compel an attorney for property to pass their accounts under s. 42 of the Substitute Decisions Act, 1992, SO 1992, c. 30 (“SDA”). Whether or not the court will grant leave to compel a passing of accounts will be determined by considering the test set out in Lewis v. Lewis, 2020 ONCA 56 (CanLII) (“Lewis”), and Dzelme v. Dzelme, 2018 ONCA 1018 (CanLII) (“Dzelme”), both decisions of the Court of Appeal for Ontario. The court must be convinced that: (i) the person seeking leave has a genuine interest in the grantor’s welfare; and (ii) a court hearing the application under s. 42(1) may order the attorney or guardian to pass his or her accounts.
The court recently considered an application for leave to compel a passing of accounts in Maki v. Cammaert et al, 2024 ONSC 6711 (CanLII) (“Maki”). In Maki, the daughter of the incapable person (her dad), sought to compel her brother to pass his accounts. The son’s position was that he did not utilize the Power of Attorney for Property until after his dad’s stroke in February 2024. The son maintained that his dad managed his own finances and property until after the stroke. In other words, the son did not manage his dad’s money or property so did not need to account.
However, Justice Dietrich noted that there was medical evidence that the dad’s cognitive issues dated back to January 2016, with a diagnosis of dementia in June 2016. There was additional medical evidence that the dad’s physicians were of the opinion that dad could not manage his property and make property decisions.
Significantly, almost all of dad’s money and property had been transferred to his son. The daughter lead evidence that the son initially said the dad was impecunious and only had $5,000, but that the son later revealed that the dad had an annual income of roughly $32,000. The daughter was concerned that dad was in a residence with a shared room and only $10 allocated to him monthly for additional expenses. The daughter’s position was that her dad could afford to live more comfortably, but that his son mismanaged and misappropriated her dad’s money and property.
Justice Dietrich noted that the court held in McAllister Estate v. Hudgin, 2008 CanLII 42213 (ONSC) (a decision of Justice Patillo), that a finding of incapacity is not a prerequisite to granting leave to compel a passing of accounts. Section 42 of the SDA gives the court inherent jurisdiction to compel a passing of accounts. Justice Dietrich noted two of the factors that a court can consider in the exercise of its discretion: (i) the extent of the attorney’s involvement in the grantor’s financial affairs; and (ii) the existence of any significant concerns with the management of the grantor’s affairs, including a significant erosion of the grantor’s financial position: Lewis, at paras 4-5, and 15; Dzelme, at para 7.
Justice Dietrich found on a balance of probabilities that the son was involved in the management of his dad’s property, as an attorney for property, a trustee de son tort, or otherwise as a fiduciary of his dad, going back as far as 2016. The court also found that the son had not fully accounted for his dealings with his dad’s property. Justice Dietrich granted leave to the daughter to compel a passing of accounts from the son.
An attorney for property may be compelled to pass his or her accounts, but so too may a trustee de son tort (i.e. a person acting in the position of trustee or attorney for property, without being appointed as such or acting under a power of attorney). The court’s decision in Maki also allows for the possibility that the son is acting as a fiduciary in some other capacity. Ultimately, the court does not need to make a finding of incapacity or a determination of the fiduciary relationship, in order to compel a passing of accounts.
