ONTARIO
SUPERIOR COURT OF JUSTICE
CITATION: Lacroix v. Kalman, 2015 ONSC 19
COURT FILE NO.: 7851/13
DATE: 2015/01/02
B E T W E E N:
Paul Lacroix
Christopher R. Durdan, for the Applicant/Moving Party
Applicant
(Moving Party)
- and -
Paulette Kalman
Duncan M. Macfarlane, Q.C., for the Respondent/Responding Party
Respondent
(Responding Party)
HEARD at Welland, Ontario:
September 29, 2014
The Honourable Justice T. Maddalena
ORDER ON MOTION
The Issues
[1] The issues for adjudication on this motion are as follows:
Should the court grant an order to compel the respondent, Paulette Kalman, to pass her accounts for the period that she acted as the deceased’s attorney for property, that is, from May 31, 2009 to May 31, 2013?
Should the court grant an order requiring the respondent Paulette Kalman to produce Caisse Populaire and TD Canada Trust statements from May 31, 2009 to May 31, 2013 for the following accounts in which she held an interest:
(i) TD account in her sole name
(ii) U.S. account at Caisse Populaire
(iii) Joint account with daughter Natalie Marko at Caisse Populaire
Background
[2] The applicant and the respondent are siblings.
[3] Their mother, Viola Lacroix, died on May 31, 2013.
[4] The deceased was survived by five children. They applicant and the respondent are co-estate trustees of her estate.
[5] Viola Lacroix’s husband, Jean Paul Lacroix, died in 1992.
[6] The respondent Paulette Kalman resided in the same home with her mother and father from approximately mid-1985 or 1986. The home is situated at 87 Mitchell Street, Port Colborne, Ontario.
[7] On February 10, 1994 the deceased, Viola Lacroix, executed a power of attorney for property in which she appointed the respondent Paulette Kalman as her attorney for property, with the applicant as an alternate.
[8] According to the evidence of the respondent, the deceased began exhibiting, from approximately 2009 onwards, symptoms of progressive and increasing memory loss.
[9] Although her mother was not officially diagnosed with dementia, the respondent states that for the last four to five years of her mother’s life, her mother would not leave the house except for doctors’ appointments or on the rare occasion to have her hair done, except that in the last three years the evidence is that the hairdresser came to the home to cut her hair.
[10] The respondent continued to live with her mother and continued to support her. Towards the end of her life that included helping her with basic daily needs such as bathing and toileting.
Account 064 and Account 2653
[11] Account 064 at Caisse Populaire was a joint account with the deceased and the respondent. It became joint with the respondent and her mother effective approximately the 25th of April 1993. At all relevant times, the deceased’s pension monies were deposited into account 064.
[12] The respondent was a joint account holder with her father on account 064 from approximately 1985 until the time her father died.
[13] After her father’s death in 1992, her mother was added to the joint account in approximately 1993 at the request of the respondent.
[14] Account 2653 is an account at Caisse Populaire originally in the name of the respondent.
[15] In 1987 the respondent added her mother’s name to the account and made it joint. Just before the death of her mother, the respondent added her daughter to the account, Natalie Marko.
[16] The respondent treated account 2653 as her account even though the deceased was on the account as joint.
The Position of the Applicant
[17] The applicant submits that the respondent abused her fiduciary duties as power of attorney for property. More particularly, he states that the respondent dwindled the value of account 064 during the period that she acted as power of attorney from May 31, 2009 to May 31, 2013.
[18] More specifically, the applicant states that the respondent withdrew a lump sum in the amount of $10,118.22 from account 064 and deposited the funds to her account 2653. Further, the applicant alleges the respondent transferred $170 per month from account 064 into her account to pay monthly car payments until the car loan was paid.
[19] The applicant alleges many other cash withdrawals from account 064 and subsequent deposits to account 2653.
The Position of the Respondent
[20] The respondent states that she and her mother have lived together since the mid-1980s and shared income as well as general household living expenses. She submits that she did not treat the transactions after 2009 through to 2013 any differently than prior to 2009 or even the 1990s.
[21] The respondent states any transfers from account 064 to account 2653 were simply “for convenience” and no monies went directly to her. During periods of time when her mother was lucid, her mother was able to direct, for example, in 2012, $2,000 to the respondent’s niece’s schooling.
[22] In addition, her mother directed that the amount of $10,118.22 was to be utilized to pay the respondent’s car loan since interest on the account was far less than the interest on the car loan. The respondent submits that her mother agreed to this since the car was largely also for the benefit of her mother.
[23] The respondent also submits that she deposited large sums of money into bank account 064, for example, as a result of bingo winnings. From her affidavit sworn the 17th of July 2014 the respondent states that she won $25,000 at bingo and placed $12,500 of those funds into account 064. Her evidence is that she later purchased a GIC with those funds.
[24] The respondent also indicates that she paid the funeral expenses for the deceased out of her own assets by cashing GICs.
[25] The respondent clearly states that as a result of her mother’s illness she did not perceive that she was specifically acting pursuant to the power of attorney, but rather more as joint account holder, which she had done in the 1990s as well.
[26] The respondent also states that it is a difficult task for her to prepare the passing of accounts because she simply did not keep track of the spending pursuant to her power of attorney.
Law and Analysis
[27] Section 32(1) of the Substitute Decisions Act, 1992, S.O. 1992, Chapter 30, states as follows:
“32. (1) A guardian of property 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.”
[28] Section 32(6) of the Substitute Decisions Act states as follows:
“A guardian shall, in accordance with regulations, keep accounts of all transactions involving the property.”
[29] Section 42(1) of the Substitute Decisions Act states as follows:
“42. (1) The court may, on application, order that all or a specified part of the accounts of an attorney or guardian of property be passed.”
[30] In addition it is clear that pursuant to s.42(4) of the Substitute Decisions Act, the applicant is a person who may apply to the court for an order compelling the attorney for property to pass formal accounts.
[31] It is undisputed that, while acting pursuant to the power of attorney, the respondent is a fiduciary who was required under the Substitute Decisions Act to “keep accounts of all transactions involving property”.
[32] It is also undisputed that according to s.42(1) of the Substitute Decisions Act, at the request of the applicant, the court has discretion to order the attorney to pass accounts.
[33] Prior to the execution of the power of attorney in 1994, account 064 was joint, first with the respondent and her father from the mid-1980s, and then after her father died, with the respondent and her mother commencing in 1993.
[34] What is also clear and undisputed is that the respondent handled all of the deceased’s finances even prior to 2009.
[35] When the deceased started to become ill, the evidence is that the respondent simply continued to look after her as she had done prior to 2009. In or around May 31, 2009 when she began acting as attorney, she did things essentially the way they had been done before.
[36] The respondent acknowledged she did not start to keep records differently commencing May 31, 2009. She did not recognize that she should start to keep detailed and specific records. It is clear she is a fiduciary with a strict obligation to account and in a perfect world clearly ought to have kept detailed notes and records of all spending as it pertained to her mother’s monies, pursuant to the power of attorney.
[37] However, she did not do so. This was not intentional but merely a continuation of how things had been for her since at least 1993.
[38] The evidence is that both the deceased and the respondent contributed to account 064. It is clear the deceased’s pension income went into 064, but the respondent also deposited monies to that account.
[39] The deceased was also able, during lucid times, to instruct upon the payment of a gift for the respondent’s niece’s schooling, and also directed monies to pay off a car loan for the respondent.
[40] I adopt the reasoning of the court in the case of McAllister Estate v. Hudgin, [2008] O.J. No. 3282. In McAllister Estate, although there was no finding that Mrs. McAllister was incompetent, the attorney for property did have extensive involvement in the grantor’s financial affairs and the applicant had raised significant issues concerning the respondent’s management of the grantor’s affairs, much as in this case. In paras. 13 and 14 of the McAllister the court noted as follows:
“13 Section 42 of the Act is clearly discretionary. In my view, in exercising such discretion in circumstances where a power of attorney is utilized in the absence of a requirement under the Act for the attorney to keep accounts, the court should consider two main questions: first, the extent of the attorney’s involvement in the grantor’s financial affairs and second whether the applicant has raised a significant concern in respect of the management of the grantor’s affairs to warrant an accounting.
14 In the present case, the evidence is that while Mrs. McAllister made her own decisions concerning her finances, from May 2003 until her death, Gail received all the statements and invoices at her home and executed all the financial transactions to give effect to Mrs. McAllister’s decisions. As a result, Gail had complete control over Mrs. McAllister’s finances.”
[41] At para. 16 the court further noted as follows:
“16 In my view, therefore, having regard to Gail’s extensive involvement in her mother’s finances for the period prior to her death and the significant concern raised by Ian relating to the disposition of some of those monies, it is my view that Gail should be required to account. Based on the evidence, though, I do not think that formal accounts are required at this stage. Rather, Gail should produce to Ian copies of the financial records relating to her assistance with her mother’s financial affairs for the period from January 2004 to September 1, 2007. Given that the records involve two bank accounts at the Bank of Nova Scotia and the Altamira account and the records were all sent to Gail at the time, I do not consider the task onerous.”
[42] This modest estate does not warrant the formal passing of accounts. However, it is appropriate to order the necessary disclosure so that as much information as possible is available to address the concerns of the applicant. Accordingly, the disclosure of the bank information requested by the applicant shall be ordered.
Orders
[43] Therefore, the following orders are made:
The motion of the applicant to require the respondent to pass formal accounts pertaining to the period when the respondent acted as power of attorney for her mother is dismissed.
The respondent shall produce to the applicant the following:
(i) Her TD account records from May 31, 2009 to May 31, 2013;
(ii) Her U.S. accounts records at Caisse Populaire from May 31, 2009 to May 31, 2013;
(iii) Her joint account records with her daughter Natalie Marko at Caisse Populaire from May 31, 2009 to May 31, 2013.
- Production shall be made within 90 days.
Costs
[44] Both counsel have agreed in their submissions that costs should be reserved to the justice hearing the application. Therefore, that order is made.
[45] Counsel have asked that I consider myself seized of this matter. I do not consider that I am seized of this matter, however it will be dealt with in the ordinary course of trial scheduling by the trial co-ordinator at Welland.
Maddalena J.
Released: January 2, 2015
CITATION: Lacroix v. Kalman, 2015 ONSC 19
COURT FILE NO.: 7851/13
DATE: 2015/01/02
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Paul Lacroix
Applicant
(Moving Party)
- and –
Paulette Kalman
Respondent
(Responding Party)
ORDER ON MOTION
Maddalena J.
Released: January 2, 2015