SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 05-16/13-00ES
DATE: 20140121
RE: Susan Lynn Young
AND:
Sandra Lee Malcolm
BEFORE: Justice J.A. Thorburn
COUNSEL:
D. Larry Todd, for the Applicant, Susan Young
Diane Vieira, for the Respondent, Sandra Malcolm
HEARD: January 16, 2014
ENDORSEMENT
A. The Relief Sought
1The Applicant, Susan Young, seeks an Order
(a) to remove the Respondent, Sandra Malcolm, as one of two named Estate Trustees of the Last Will and Testament of Sydney Gregory dated September 17, 1998,
(b) that Ms. Malcolm repay the Estate of Sydney Gregory the sum of $131,607.87 as Ms. Young claims these sums were misappropriated by Ms. Malcolm from her father, Sydney Gregory, between November 2008 and his death on October 7, 2011, and
(c) in the alternative, that Ms. Malcolm prepare, deliver, file, and pass her accounts as Attorney for Property pursuant to a Continuing Power of Attorney for Property of Sydney Gregory for the period November 1, 2008 to October 7, 2011.
2Ms. Young, Ms. Malcolm, and Mr. Gregory’s solicitor, Mr. Devlin, all testified in this proceeding.
B. The Issues to be Determined
3The issues to be determined on this Application are as follows:
(a) Was Mr. Gregory incapable of dealing with his own financial affairs while he lived with Ms. Malcolm?
(b) If Mr. Gregory was incapable of managing his own financial affairs, did Ms. Malcolm manage Mr. Gregory’s money as an Estate Trustee pursuant to the Power of Attorney and in so doing, did she breach her trust obligations by failing to properly account for the funds taken from Mr. Gregory’s account?
(c) Did Ms. Malcolm misappropriate her father’s funds, regardless of whether or not she was acting as an Estate Trustee?
C. Factual Background
4Sydney Gregory died on October 7, 2011 at the age of 90. The Applicant and Respondent are both Mr. Gregory’s daughters. Sydney Gregory’s Will was prepared by his solicitor, James Devlin.
5Mr. Gregory appointed Ms. Young and Ms. Malcolm as the Executrices and Trustees of his Will. Both are equal beneficiaries under his Will.
6In early 2008, Sydney Gregory was living in a retirement residence. He was unhappy there. In the spring of 2008 it was agreed that he would move in with Ms. Malcolm.
7He resided with Ms. Malcolm from Spring 2008 to April 2011. During that time Ms. Malcolm saw Mr. Gregory every day. She was his primary caregiver. His longtime solicitor, Mr. Devlin, continued to provide him with advice until six months before his death.
8Ms. Young agrees that Mr. Gregory was paying for some of the joint expenses. The rent for the apartment they were living in was $766.00 per month. Ms. Malcolm had been previously paying $186.00 per month of subsidized rent.
9Ms. Young testified that she believed Mr. Gregory suffered from dementia in 2008.
10Ms. Young claims Ms. Malcolm took advantage of Mr. Gregory’s dementia and misappropriated funds belonging to him. She wrote cheques for his signature and used his debit card to take out monies.
11Ms. Malcolm testified that she believed her father was depressed and upset in 2008, but did not suffer from dementia while he lived with her.
D. Analysis and Conclusion
12On the evidence adduced on this Application, I am satisfied on a balance of probabilities that Mr. Gregory was capable of making financial decisions until November 2010. Moreover, I am not satisfied that Ms. Malcolm misappropriated funds belonging to Mr. Gregory. There is therefore no reason to (a) remove Ms. Malcolm as an Estate Trustee of the Last Will and Testament of the late Sydney Gregory; (b) order her to repay monies to the Estate; or (c) order her to pass her accounts as Trustee of the Estate. My reasons for these findings are as follows.
1. Was Mr. Gregory able to make his own Financial Decisions from 2008 to 2011?
13Ms. Young in her affidavit takes the position that Mr. Gregory lost his capacity to make decisions about financial matters in early 2008.
14Ms. Young did not see her father often. When Mr. Gregory first went to stay with Ms. Malcolm, Ms. Young saw him approximately once every two months. Later she saw him only three or four times a year. She says she telephoned him occasionally, but because he was very deaf, those conversations were moderated by Ms. Malcolm. As such, she had limited ability to assess his mental state.
15In November 2009, Ms. Young says she was concerned about her father’s ability to manage his money. She did not tell the Bank she thought he was incapable of making his own financial decisions. She took documentation home, had Mr. Gregory sign it, returned it to the Bank, and opened a joint account with herself as co-signor.
16Moreover, she testified that there were periods from 2008 to 2011, that her father could make his own financial decisions. Between November 2008 and March 2011, Ms. Young received five cheques from Mr. Gregory for a total of $11,000.00. She did not question his ability to send her these monies.
17It was not until April 2011, when Mr. Gregory was admitted to hospital for recurrence of his cancer and Ms. Malcolm was admitted to hospital two days later with heart issues, that Ms. Young decided she had an urgent concern about Mr. Gregory’s ability to manage his money and froze his account the next day.
18Ms. Malcolm testified that while Mr. Gregory lived with her, Mr. Gregory was capable of making property and financial decisions.
19Mr. Devlin, Mr. Gregory’s solicitor, stated that he continued to receive instructions from Mr. Gregory until he was admitted to hospital in April 2011. Mr. Devlin testified that he had no reason to believe Mr. Gregory was incapable of making a decision when he saw him in April 2011.
20Ms. Young filed a letter from Mr. Gregory’s attending general practitioner from the year prior to his death. The physician advised that, “I was the attending physician to Mr. Sydney Gregory … in the year leading up to his passing. My diagnostic impression was that he suffered from advanced senile dementia at that time.”
21Ms. Young provided no medical evidence to suggest Mr. Gregory was incapable before then.
22I prefer the evidence of Ms. Malcolm to that of Ms. Young on the issue of Mr. Gregory’s mental state. I found Ms. Malcolm to be believable and she had much more exposure to Mr. Gregory than did her sister who was an infrequent visitor.
23Ms. Malcolm’s evidence that she believed her father was capable of managing his own decisions was corroborated by his longtime solicitor who knew him well and visited him several times in 2011.
24Although Mr. Gregory’s attending physician had the “impression” that Mr. Gregory had dementia in the last year of his life, there is no evidence he had dementia before then. Moreover, there is no evidence as to what this “impression” was based on, whether a diagnosis was made, or how often he saw Mr. Gregory in the year prior to his death.
25I also rely on Ms. Young’s own statement that she accepted financial decisions made by Mr. Gregory when he sent her gifts of money.
26Thus, while I accept that Ms. Young may have believed Mr. Gregory was spending too much money while he was in the care of Ms. Malcolm, I am not satisfied that Mr. Gregory was incapable of making his own financial decisions while he was in Ms. Malcolm’s care except for the last few months
2. Did Ms. Malcolm Misappropriate Funds Belonging to Mr. Gregory?
27Mr. Gregory’s Bank Statement for the period December 14, 2007 through to February 14, 2008 (just before he moved in with Ms. Malcolm) showed withdrawals of $10,717.97 for that period. This is more than the sum Ms. Young claims Mr. Gregory was spending in a two month period while he lived with Ms. Malcolm.
28Even if Mr. Gregory were incapable of managing his own money from 2008 to 2011 and Ms. Malcolm was acting as his Trustee for financial affairs during that period, I am not satisfied that she misappropriated any funds belonging to Mr. Gregory.
29Moreover, there is no evidence that Ms. Malcolm acquired anything of significance from Mr. Gregory. She did not accumulate any monies during that period or thereafter. She took no vacations or incurred other large expenses from 2008 to present, and she was and continues to live on welfare and has no savings.
30Finally, notwithstanding the passage of time, Ms. Malcolm can account for approximately $70,000.00 of the $131,000.00 Mr. Gregory spent while he lived with her for 30 months. At paragraphs 26 through 30 of her affidavit she sets out the monies he paid to help his granddaughter pay US medical fees for a serious medical issue, rental payments, Christmas gifts, payments to charity, insurance, and other payments. I note that she underestimates the monies paid to her sister Ms. Young (as being only $5,000.00 when there is documentary evidence to support the sum of $11,000.00) and rent (Ms. Malcolm was paying subsidized rent of $186.00 per month before her father moved in whereupon the rent increased to $766.00 per month. Thus, the amount attributable for increased rent resulting from Mr. Gregory’s stay in the apartment for the 30 month period should be $18,000.00 not the $10,500.00 that Ms. Malcolm claims.)
31Given that Mr. Gregory seems to have spent more money in the few months before he resided with Ms. Malcolm than he did while with Ms. Malcolm, Ms. Malcolm can account for some significant funds and in fact underestimated some monies paid out by Mr. Gregory, and there is no evidence she acquired any wealth as a result of her decision to care for her father in his last years, I do not believe that she misappropriated any funds belonging to Mr. Gregory, whether or not she was a Trustee for Mr. Gregory’s property.
32For these reasons, the Application
(a) to remove Ms. Malcolm as one of two named Estate Trustees of the Last Will and Testament of Sydney Gregory dated September 17, 1998,
(b) to have Ms. Malcolm repay the Estate of Sydney Gregory the sum of $131,607.87, and
(c) in the alternative, to have Ms. Malcolm prepare, deliver, file, and pass her accounts as Attorney for Property pursuant to a Continuing Power of Attorney for Property of Sydney Gregory for the period November 1, 2008 to October 7, 2011,
is dismissed.
33If the parties are unable to agree on costs, they may provide me with brief written submissions and an outline of costs within 15 days.
Thorburn J.
DATE: January 21, 2014