July 18, 2017

Rita and her late husband Frank built a successful business together in the course of their lengthy marriage. Unfortunately, there is a struggle between Rita’s twin sons (both named Jean) over who should act as their mother’s attorney for property, devastating both the family’s finances and relationship. The Court of Appeal dismissed an appeal of a failed motion by one twin to remove the other on an interim basis.

After Frank died in 2011, Rita appointed her daughter Patricia as her attorney for property. Patricia allegedly diverted several hundred thousand dollars of Rita’s funds to herself. Once discovered, litigation ensued and Rita named her twin sons as joint attorneys for property (to distinguish between the Jeans, the court refers to Jean-Pierre as Pierre and Jean-Raymond as Raymond). The family business’ account was frozen pursuant to the litigation with Patricia.

In February 2015, Raymond became suspicious of Pierre’s handling of Rita’s money. While Pierre provided Raymond with detailed banking receipts, in March 2015 Raymond demanded that all cheques be co-signed by him. While the litigation with Patricia settled in that month, Raymond refused to consent to unfreeze the corporate account. Raymond also unilaterally directed Rita’s lawyer to not release the $300,000 settlement funds provided to Rita by Patricia. This led to Rita not having access to money needed to pay her basic living expenses, including her retirement home rent.

May was a busy month for Rita. Her May 2015 rent cheque bounced. In response, Pierre moved to call a special meeting of the company’s shareholders to remove Raymond as a director. He also urged Rita to make a new power of attorney naming him as sole attorney. On May 12, 2015, Pierre attended at the retirement home to have Rita execute the power of attorney (the “POA”). Raymond was removed as director a few days later. In between, the police were called to the retirement home (they concluded it was a civil matter). Finally, on May 27, 2015, a capacity assessor concluded Rita had capacity to execute and revoke a power of attorney for property. However, the assessor also stated that she believed Rita had been unduly influenced by Pierre to execute the POA .

Raymond applied to the court to remove Pierre and void the POA. He brought a motion to remove Pierre on an interim basis, appoint an interim guardian of property and compel Pierre to pass his accounts. The motion judge dismissed the motion, other than ordering Pierre to pass his accounts.

Raymond argued that the motion judge should have used the test for “inter vivos undue influence” rather than “testamentary undue influence” in determining whether Rita was unduly influenced to grant the power of attorney. If the inter vivos test was used, Raymond argued, the onus would be shifted to Pierre to prove that Rita signed the POA willingly.

The Court of Appeal held that the distinction between inter vivos and testamentary undue influence was not argued before the motion judge and the general rule was new issues should not be considered unless it was in the interest of justice. However, the court noted, it was not necessary to decide this matter. Under the inter vivos test, the burden of proof will be shifted when there is (1) a relationship of trust and confidence and (2) the transaction confers an immoderate and irrational benefit. The Court found that there was nothing immoderate or irrational regarding granting the POA; Rita needed to pay her bills and Pierre received little, if any, benefit from the POA.

Raymond argued that pursuant to the case of Nguyen-Crawford v. Nguyen2010 ONSC 6836, when there were suspicious circumstances of undue influence surrounding the execution of a power of attorney, the presumption of capacity is inoperative and the burden of proof regarding capacity shifts to the attorney. Rita submitted that Nguyen was wrongly decided and the suspicious circumstances doctrine only applied to wills, not powers of attorney.

The Court of Appeal declined to consider whether Nguyen was wrongly decided. It was unnecessary to do so as the motion judge made a finding of fact that there were no suspicious circumstances regarding the signing of the POA. The Court of Appeal declined to interfere with this finding.

Likewise, the Court of Appeal rejected Raymond’s argument that the motion judge failed to consider relevant evidence. Judges do not have to mention every single piece of evidence in their reasons; the record showed the motion judge was aware of the evidence referred to by Raymond.

The Court of Appeal declined to interfere with the motion judge’s cost award as the litigation reflected a profound lack of judgment on Raymond’s part; Raymond failed to submit a bill of costs and the motion judge’s decision was entitled to considerable deference.

Rita argued that the scope of capacity assessors is statutorily restricted to inquiring into and providing opinions on capacity. As such, the assessor neither had the legal understanding nor authority to opine on Rita being unduly influenced. Rita thus asked the court to censure the practice of seeking and providing opinion evidence on undue influence from capacity assessors. The Court of Appeal declined to so, as this issue was not fully canvassed on the record.

While I have used “Rita” as a metonym for Rita’s lawyer in this blog, unusually, nonagenarian Rita also personally addressed the panel in the course of oral argument. Rita professed her love for both of her sons, but powerfully conveyed her frustration over the damage that the family has suffered as a result of these seemingly meritless proceedings. The Court of Appeal asked the sons to honour Rita’s wishes.

The parties put many issues before the Court of Appeal. However, the panel decided the appeal narrowly. While it would be helpful to have the Court of Appeal’s conclusions on some of the interesting issues that the parties raised, ultimately, the Court of Appeal wisely decided not to do more than necessary and wait until a case came before it with a proper record to decide these matters. While the Court of Appeal only decided the appeal of the motion, hopefully the parties will listen to the Court of Appeal and Rita and put this matter to rest.