The recent Ontario Superior Court of Justice decision in Bellefeuille v Bellefeuille, 2018 ONSC 6802, provides useful guidance as to the circumstances in which a court may terminate an individual’s power of attorney and is an important reminder that simply substituting one’s own decision-making analysis over another’s finances is not what the law expects of an attorney for property. It is much more.
Background
Bellefeuille involved competing applications brought by two children of Irene Bellefeuille. At the time of the applications, Irene was 91 and suffered from dementia and Alzheimer’s disease.
Jacqueline Bellefeuille, Irene’s attorney for property since 2005, sought an order to determine her mother’s living arrangements. Jacqueline wished to relocate Irene to Jacqueline’s residence in Kitchener. Jerry Bellefeuille, Jacqueline’s brother, concurrently brought an application for an order to remove Jacqueline as the attorney for property and for an order appointing him as guardian of both property and personal care.
Jerry’s position was that Jacqueline had breached her fiduciary duty as power of attorney for property by continuously mismanaging Irene’s finances. Most notably, Jerry accused Jacqueline of appropriating Irene’s money for her own benefit and failing to provide proper records and financial accounting. As such, it was his position that Jacqueline was putting her own interests above Irene’s and that she sought to relocate Irene to curtail the criticism targeted at her in respect of the management of their mother’s financial affairs.
Court’s analysis
The applications were heard by the Hon. Justice Vallee who began by broadly outlining that a power of attorney “is a fiduciary whose powers and duties shall be exercised and performed diligently, with honesty and integrity and in good faith for the incapable person's benefit.”1
The court also emphasized the high bar to terminate a power of attorney. Jerry would have to provide “strong and compelling evidence of misconduct or neglect” on the part of Jacqueline.2 This high standard is appropriate since the courts should be reluctant to overturn the grantor’s choice as to who will act as the substitute decision-maker upon his or her incapacity.
Jerry’s evidence was sufficient to overcome this high bar. It was clear to the court that Jacqueline had breached her fiduciary duty by failing to put Irene’s interest ahead of her own. The court found that Jacqueline had inappropriately used Irene’s funds to purchase new car tires, a stove and a freezer for her own benefit while also using Irene’s funds to pay for her personal legal fees. Most egregiously, she co-mingled Irene’s money with her personal bank account. Jacqueline argued in her defence that she managed Irene’s money to the best of her abilities and did so in the same manner that she managed her own. The court, however, rejected this argument, explaining that while Jacqueline was entitled to choose a lower standard for managing her own money, as Irene’s attorney, she owed Irene a much higher standard of care.3
Additionally, an attorney for property must be in a position, at all times, to prove the legitimacy of disbursements made on behalf of the estate of the incapable person.4 Jacqueline failed to adhere to this obligation by only providing financial accounting from 2014 rather than from 2005 when she began acting in the role. Moreover, the few records that she did produce were inadequate.
Due to the foregoing, the court found that Jacqueline did not meet her fiduciary obligations. Her powers as Irene’s property attorney were not exercised and performed diligently, with honesty and integrity and in good faith for Irene’s benefit.5 While terminating Jacqueline’s power of attorney, the court found that it was in Irene’s best interest to appoint Jerry as her sole guardian of person and property.
Lessons learned
Bellefeuille stresses the high standard to which the courts will hold substitute decision-makers, irrespective of the incapable person’s age and mental capacity. The case also emphasizes the importance of accounting and record keeping from Day One of assuming the role of an attorney for property. Often, it is only when faced with questions or allegations of something inappropriate that attorneys for property begin scrambling to gather and prepare the accounts. Bank statements do not offer sufficient detail into the source of deposits and withdrawals.
Lawyers are accustomed to advising grantors of power of attorney but there appears to be a lack of advice and guidance being given to the attorneys themselves. In many cases, the decision-makers are only seeking advice after a problem has arisen, not in an effort to prevent one. Drafting solicitors and grantors may consider involving the person to whom the authority is being granted in advance of the effective date of the power of attorney so that the expectations at law of the attorney are made clear. A prudent and advisable practice is to attach or make reference in a power of attorney for property to the guidelines of a guardian of property published by the Public Guardian and Trustee.
While we may never completely circumvent the possibility of wrongdoing, we should continue to educate people about the broad authority and control that is being granted under the guise of what appears to be a simple document. It is reassuring, however, to see that the courts will intervene and protect our incapable persons by terminating a power of attorney where necessary.
Kavina Nagrani, J.D., TEP is counsel and Brad Morton is student at law, with Loopstra Nixon in Toronto
End notes
1. Bellefeuille v Bellefeuille, 2018 ONSC 6802 at para 5, citing the Substitute Decisions Act, 1992, SO 1992 C 30, ss. 32(1) and 38(1).
2. Ibid at para 6.
3. Ibid at para 25.
4. Ibid at para 7.
5. Ibid at para 28.