ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-13-318

DATE: 2014-08-25

BETWEEN:

Sheila Kathleen Gray
Applicant

– and –

Brenda Ann Lyle, Shylo Lyle-Mayes, and Public Guardian and Trustee
Respondents

H. Hall, for the Applicant

J. Kerr, for the Respondent B. Lyle
Self-represented, for the Respondent S. Lyle-Mayes
J. Marques de Souza, for the Respondent, Public Guardian and Trustee

HEARD: August 20, 2014

Justice R. J. Harper

Issues:

[1] Whether the Guardian of Brenda Ann Lyle (Brenda), Shylo Lyle-Mayes (Shylo) should be removed as Brenda’s Guardian pursuant to the Subsitute Decisions Act, S.O. 1992, c.30;

[2] Whether Sheila Kathleen Gray (Sheila) should be appointed Guardian of Brenda for property and personal care.

Background

[3] Brenda is diagnosed with Schizophrenia. She is presently residing in St Joseph’s Health Care in the City of Hamilton (St Joseph’s). She is there on a general unit detention order.

[4] Brenda is not capable to make decisions with respect to her personal care and her property. Her psychiatrist, Dr. Peter Cook, expressed this opinion in his affidavit sworn October 30, 2013.

[5] Brenda has been the subject of numerous hearings before the Ontario Review Board (“ORB”). She has an annual review and has had since being found not criminally responsible in 2004 after being charged with a concealed weapons offence. She has been found to be a risk and danger to the public and is not allowed to live outside of the psychiatric facility.

[6] It is not contested that Brenda is incapable to make decisions with respect to her property or her personal care. When she was first found to be incapable, the Public Guardian and Trustee managed her finances as well as made decision with respect to her care. Her daughter, Shylo, requested to become her Guardian and was appointed her Guardian in 2008.

[7] Sheila submits that Shylo should no longer be Brenda’s Guardian. She submits that Shylo:

a. Has not been available to make decisions relative to her personal care;

b. Has not kept any records or provide an accounting of Brenda’s finances;

c. Has spent Brenda’s money for her own benefit.

Not Available

[8] The evidence from the treatment team, the social worker, Omo Ibhawoh (Omo), and Dr. Cook, describe numerous times when the hospital staff could not contact Shylo in order to get treatment and care directions and decisions in a timely manner.

[9] The social worker Omo also stated that most often Shylo would not provide Brenda’s monthly personal needs allowance on time and on occasion, she did not remit it at all. Brenda becomes anxious and upset when this occurs. This type of conduct on the part of Shylo has subsided in recent months while she has been under the scrutiny of these court proceedings. However, given the lengthy history of such conduct I am not confident that her new found sense of responsibility can and will continue.

[10] The Public Guardian and Trustee conducted an investigation into Shylo’s conduct as Guardian and they spoke to Sheila, Brenda’s sister, who agreed to seek an order appointing her as Brenda’s Guardian.

Record Keeping and Reporting

[11] Shylo has been asked on many occasions to produce records that would indicate what she has been spending Brenda’s money on. She has not provided any such records over a five and half year period. At first, she stated that she had all of the records in her basement and they were damaged in a flood. She then stated that she kept any other records in her father’s basement and they too were damaged in a flood. She never produced any evidence of any floods taking place.

[12] Shylo has not given any explanation that would justify her non-compliance with the Subsitiute Decisions Act s. 31(6). Shylo was ordered by this court to produce copies of the bank account statements from the account she was spending Brenda’s money and she has not complied with the court orders of production. In her examinations she stated that she could not recall in which bank account she placed the funds.

Guardian Spending Money for Her Own Benefit

[13] The Public Guardian and Trustee represented that when Shylo took over as Brenda’s Guardian she was told that she must keep records of all money received and spent on behalf of Brenda. They also represented that Brenda was on a fixed amount of income from disability payments and pensions that totalled approximately $1,700 per month. Given that she was residing in St Joseph’s under the order of the ORB since at least 2008, she had little expenses. When Shylo took over as Guardian, Brenda had approximately $40,000 to her credit as savings.

[14] There has been no accounting of where the $40,000 to the credit of Brenda has gone.

[15] In addition, Brenda admits that she would spend approximately $1,000 per month of Brenda’s money for her own benefit. She admitted to paying the following form Brenda’s money:

a. Her own auto insurance premiums ($307 monthly);

b. Her own cell phone bill (Approximately $87 monthly);

c. Gas for her own vehicle;

d. Her own schooling expenses at Mohawk College and Bruno’s Hair School (tuition and books totalling approximately $675 monthly.

[16] Shylo has stated that she is renting a larger house and wants to have her mother live with her. She intends to have her mother pay rent for the portion of the home that she will occupy. She also admits that she will use some of Brenda’s money to cause renovations in order to accommodate the larger living area.

[17] Although there has been a request at a recent hearing of the ORB to have Brenda spend some weekends or other extended access with Shylo, no decision has been released by the ORB by the date of this hearing.

The Law and Analysis

[18] A decision as to who should be the Guardian of Brenda must consider what is in the best interest of Brenda. A Guardian stands in a fiduciary position to the incapable person.

[19] Lederer J. reviewed extensively the concept of fiduciary duty in Bluefoot Ventures Inc. v. Ticketmaster (Citysearch) 2007, 55363; 288 D L R 191; 41 B L R 256. at para 17 of that decision the definition of a fiduciary is as follows:

WHAT IS A FIDUCIARY DUTY?

[17] The principle of fiduciary duty originates in the mystical beginnings of our law.

The law of fiduciary duty is as old as or older than our common law. It is the key element of the law of equity and is the branch of law from which we get to the more specialized subset of trust law. Historically, the law of trusts has made more significant advances than the general law of fiduciary duty and only recently has fiduciary duty begun to be articulated as a separate head of liability.

(Whose Interests Are We Talking About: A.(C.) v. Critchley and Developments In the Law of Fiduciary Duty (1999), 33 U.B.C.L. Rev. 199-214)

[18] As noted in Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 377 at 407, the concept of fiduciary duty reaches back to the case of Keech v. Sandford (1726), Sel. Cas. T. King 61, 25 All E.R. 223. Keech v. Sandford is still relied on to establish the fundamental characteristics of such a relationship:

At the heart of the fiduciary relationship lie the dual concepts of trust and loyalty. This is first and best illustrated by the fact that the fiduciary duties find their origin in the classic trust where one person, the fiduciary, holds property on behalf of another, the beneficiary. In order to protect the interests of the beneficiary, the express trustee is held to a stringent standard; the trustee is under a duty to act in a completely selfless manner for the sole benefit of the trust and its beneficiaries (Keech v. Sandford (1726), 25 E.R. 223) to whom he owes ‘the utmost duty of loyalty’. (Waters, Law of Trusts in Canada (2nd ed. 1984), at p. 31). And while the fiduciary relationship is no longer confined to the classic trustee-beneficiary relationship, the underlying requirements of complete trust and utmost loyalty have never varied.

(Hodgkinson v. Simms, supra, at p. 461]

[19] It is the presence of trust and loyalty that sets a fiduciary obligation apart:

…the presence of loyalty, trust and confidence distinguishes the fiduciary relationship from a relationship that simply gives rise to tortious liability. Thus, while a fiduciary obligation carries with it a duty of skill and competence, the special elements of trust, loyalty, and confidentiality that obtain in a fiduciary relationship give rise to a corresponding duty of loyalty.

(Hodgkinson v. Simms, supra, at p. 405)

[20] The fiduciary relationship is one in which a party is required to act in the best interests of another. A fiduciary relationship has been defined as:

A relationship in which one person is under a duty to act for the benefit of another on matters within the scope of the relationship.

(Black’s Law Dictionary, Eighth Edition, at 1315)

and as:

The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense.

(Hospital Products Ltd. v. United States Surgical Corp. (1984), 55 A.L.R. 417 at p. 454, quoted in Hodgkinson v. Simms 1989 2869 (BC SC), (1989), 43 B.L.R. 122 (B.C.S.C.), at p. 164)

[21] Where there is a fiduciary duty, one must act in the interests of another even to the detriment of one’s own interest.

Having found that the parties were in a fiduciary relationship, Prowse J. turned to the scope of the fiduciary duties owed by Mr. Simms to Mr. Hodgkinson. She once again cited the Hospital Products case, at pp. 169-70, here for the proposition that a fiduciary ‘is under an obligation not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict... between his personal interests and those of the person whom he is bound to protect’.

(Hodgkinson v. Simms, (S.C.C.), supra, at pp. 400-1)

[22] This is confirmed in the proposition that where a fiduciary relationship exists, the equitable rules with respect to self-dealing apply:

If there is a fiduciary duty, the equitable rules about self-dealing apply: but self-dealing does not impose the duty. Equity bases its rules about self-dealing upon some pre-existing fiduciary duty: it is a disregard of this pre-existing duty that subjects the self dealer to the consequences of the self-dealing rules.

(Tito v. Waddell (No. 2), [1977] 3 All E.R. 129, at p. 232, quoted in Lac Minerals Ltd. v. Corona Resources Ltd. 1989 34 (SCC), [1989] 2 S.C.R. 574 at p. 600)

[23] This is all repeated in a paper referred to in Hodgkinson v. Simms (B.C.S.C.), supra, at p. 169, where the trial judge quotes the British Columbia Court of Appeal in Litwin Construction (1973) Ltd. v. Kiss 1988 174 (BC CA), (1988), 29 B.C.L.R. (2d) 88:

…The degrees of the standard of extra honesty are discussed and illustrated in a paper by Professor T.D. Finn: "The Fiduciary Principle" Symposium on Equity, Trusts and Fiduciary Relationships, University of Victoria, March 1988.

[24] The highest standard is the fiduciary standard. It arises where the obligation that is undertaken or imposed is the obligation of loyalty or selflessness arising from the fiduciary having entered a relationship where the other party is entitled to expect that the fiduciary will act in the other party’s interests, or in the interests of both parties (where those interests coincide), to the exclusion of the fiduciary's own separate interests (where those interests are opposed), and where the fiduciary has the power to affect the other party’s interest in a legal or practical sense, giving rise to a position of vulnerability in the other party.

[25] It must be emphasised that the “highest standard” of faith to another is that of the fiduciary duty. The phrase “uberimae fides” (utmost of faith) captures the essence of the duty owed. In the area of law dealing with substitute decision making these concepts can never be lost. We are dealing with some of the most vulnerable people who must rely on others to act in a manner that is solely in their best interests. As someone’s Guardian a person must not benefit themselves in anyway. All actions and conduct taken by the person who owes the duty to someone who is incapable must be for the benefit of that incapable person even to the detriment of the fiduciary. If that cannot be accomplished then the fiduciary must remove themselves from that position or be removed. I find that Shylo breached her duty as Guardian under the SDA by not keeping records of the receipts and expenditures. Her far-fetched explanations of the records lost in two different floods allow me to draw the adverse inference that those records would not support her position that she has acted with the utmost faith to Brenda.

[21] I find that Shylo has conducted herself in a manner that has been to her own benefit and not to the benefit of Brenda nor in Brenda’s best interests. She is removed as Brenda’s Guardian for property and for personal care.

[22] Sheila is Brenda’s sister. She is one of many siblings. All of the remaining siblings of Brenda support Sheila’s application to become Brenda’s Guardian. One of the brothers asked to make a statement to the court and I allowed it. He represented that all they wanted was to be confident that their sister Brenda was being looked after in her interests and that there was a proper recording of all of the funds taken in on her behalf and spent on her behalf.

[23] Sheila has worked many years as a quality engineering specialist in industry. She has the ability to manage finances. The social workers reports demonstrate that Sheila visits with her sister Brenda at the hospital and that Brenda enjoys the visits and demonstrates that they have a close relationship. This is tempered with some comments where Brenda is noted, as part of her anger and lack of control given her diagnosis, making disparaging remarks about her sister Sheila. I have confidence that Sheila can and will act in Brenda’s best interest. She has voluntarily stated that she would provide an annual accounting of all of the finances and release them to her siblings, Shylo and the PGT.

[24] She has stated that although her management plan did not provide many details that is because of her lack of knowledge of some of the finances of Brenda due to the lack of disclosure made by Shylo. She has offered to prepare and file amended management plans when she is fully aware of the finances.

[25] I find that it is in the best interests of Brenda and I do so appoint her sister Sheila to be the Guardian of Brenda to make decision relative to property and personal care.

[26] If the issue of costs cannot be resolved, I direct the party seeking costs to deliver written submissions to my office in Brantford within 10 days of the release of these Reasons with responding submissions to be delivered within 10 days thereafter. The written submissions are not to exceed three typewritten, double spaced pages, excluding the Bill of Costs and Costs Outline. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

HARPER, J.

Released: August 25, 2014

COURT FILE NO.: CV-13-318
DATE: 2014-August-25

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Sheila Kathleen Gray
Applicant

– and –

Brenda Ann Lyle, Shylo Lyle-Mayes, and Public Guardian and Trustee
Respondents

REASONS FOR JUDGMENT

Harper, J.

Released: August 25, 2014