SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Richard Beamish, Applicant
AND:
Catherine Beamish et. al., Respondents
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: Ryan Flewelling, for the Applicant
Calina Ritchie, for the Respondent, Catherine Beamish
HEARD: December 9th, 2016
ENDORSEMENT
1Richard and Catherine Beamish are brother and sister. They are the children of the Respondent Jean Beamish and the late John Beamish. They are both appointed to act for Jean under a power of attorney granted by Jean many years ago. Jean now suffers from dementia. She is incapable of managing her affairs or revoking or making new powers of attorney. She is currently unrepresented.
2The application was brought by Richard because his sister sold his mother’s house and while she has advised that the net proceeds of sale are held in a lawyer’s trust account she has refused to provide access to the funds or advise of their exact whereabouts. $20,000.00 has been paid into Jean’s chequing account and apparently $672,052.15 remains held in trust. The sale of the house is not in issue but only control of the funds.
3Not surprisingly there is background to this dispute. Besides the proceeds from the sale of the home, there are two investment companies which hold substantial assets. Those corporations are structured such that the ownership and voting control is divided equally between the mother (Jean) and the two siblings. It is alleged by Catherine that Richard helped himself to funds from the corporation authorized by a sham meeting of the board (to which she was not invited) between Richard and his mother (after Jean had become incapable) and that he improperly paid himself compensation by way of shareholder loans.
4This is the subject of other litigation (court file 15-66042) and was the subject of injunctive relief granted by Justice Kane. This issue is not before me at the moment and the injunction was dissolved when the parties entered into an agreement requiring joint approval by the siblings of any corporate acts. It is simply summarized here to explain in part what led up to the dispute over the proceeds of sale. Catherine claims she could not deposit the funds into Jean’s bank account without risk that Richard would withdraw them. She requires that controls be put in place and until this hearing, she and Richard had been unable to agree on what that should look like.
5Although the dispute between Richard and Catherine had been largely resolved by the time of the hearing this morning, the court has equitable jurisdiction and responsibility to ensure that under these circumstances the attorneys are acting in the best interests of their mother who is under a disability and who has ongoing needs. It is not enough that the parties themselves reach agreement when currently there is no one to independently represent the interests of their mother.
6I was told that the Public Guardian and Trustee was put on notice of this motion and has chosen not to participate. It does not appear that the PGT was served with all of the motion materials. Certainly no one has brought a motion to have a litigation guardian appointed either in this proceeding or in the companion action.
7By the time of the hearing the parties had generally agreed on passing of accounts, on the creation of an investment account that would require joint authorization and that certain operating funds be available in the chequing account. They had not agreed on the precise details.
8Both parties were present in court and before determining how to proceed, I made certain inquiries. As a result of the affidavit evidence before the court and the representations made by the parties in response to questions posed by the court, the following facts may be presumed:
a. There is no doubt that at this point in time Jean is incompetent. That is not a situation that is likely to change.
b. Jean signed the existing continuing power of attorney for property in 1999. She also signed a power of attorney for personal care in 2007 and she has a will. All of these documents were signed at a time when she was competent.
c. The powers of attorney appoint “my son, RICHARD ALAN BEAMISH and/or my daughter CATHERINE ISOBEL BEAMISH” as her attorney-in-fact and do not name any substitute attorney or attorneys.
d. The original of the will is believed to be in Jean’s safety deposit box to which these parties have access. The contents of the will are not known but it is believed it would name the parties as co-executors and they are the sole residual beneficiaries.
e. Jean is 83 years of age. She is currently living in a senior’s residence and receiving some amount of personal care. The monthly fee is just over $5,000.00 per month and is paid from her chequing account by pre-authorized deposit.
f. Jean’s regular income from all sources (pension, CPP and OAS) is approximately $3,300 which is deposited to her chequing account by direct deposit.
g. The chequing account is a joint account between Jean and her two children. It only requires a single signature. In addition Jean had credit cards which are in the possession of Richard. The parties are content that this arrangement continue for practical reasons. I note that cheques or other payments drawn on this account are pursuant to signing authority and do not require use of the power of attorney.
h. Because Richard lives in Ottawa and Catherine lives in Guelph, it is Richard that has most day to day contact with Jean and Richard requires certain flexibility in dealing with the retirement home or the payment of minor expenses.
i. Jean is on the waiting list for a nursing home. She has other health care needs and will require nursing care. Both Richard and Catherine agree that she should be transferred to a nursing home when space is available. They have also agreed on the nursing home.
j. It is anticipated that the investment corporations will have to be dissolved because of the inability of Richard and Catherine to work co-operatively. The assets under management are substantial and of course Jean has a 1/3 interest in those corporate assets. That is the subject matter inter alia of the litigation in 15-66042. Jean is not currently a party to that litigation. The parties are Catherine (as plaintiff) and Richard and the two corporations (as defendants).
k. Both Richard and Catherine ultimately agreed that their mother’s house be sold and Richard agreed that Catherine should handle the sale. He did not agree that she could unilaterally control the proceeds of sale.
l. The parties now agree on the need to have a jointly controlled investment fund to protect the proceeds of sale of the house and to ensure there are adequate funds for Jean’s needs. They also agree there should be regular transfers to the chequing account but they disagree on how much liquidity is required in that account.
m. As there may be divergence between the interests of Richard, Catherine and Jean, the Public Guardian and Trustee should be involved in some capacity. It is not apparent that there is any mismanagement of Jean’s assets such that the PGT should be managing her property but it seems appropriate that she have a litigation guardian.
n. Both parties have agreed to pass their accounts for the period September 2015 until the present. At this stage they propose this be informal unless one of the parties objects to the accounts. They would also agree that the PGT be allowed an opportunity to comment.
9With respect to either of the parties operating unilaterally under the power of attorney for property, I note that s. 7 (4) of the Substitute Decisions Act states that when two or more persons are named as attorneys, “the attorneys shall act jointly unless the power of attorney states otherwise.” The power of attorney in question does not contain any words stating that the attorneys may act severally or individually. The only wording that could possibly be construed in that manner is the fact that the POA uses the phrase “and /or” but in my view that is not the kind of clear wording contemplated by the Act. S. 7 (5) of the Act provides that if one attorney in a joint power of attorney “dies, becomes incompetent to manage property or resigns”, the remaining attorney is empowered to act alone unless the POA states otherwise. The power of attorney in question does not state otherwise and the use of “and / or” may be construed simply as accommodating this possibility.
10When the grant of power to Richard and Catherine is read along with the “N/A” inserted into the paragraph designating an alternative attorney, the most obvious interpretation of the Power of Attorney is consistent with the Act. In my view Jean intended that her attorneys act jointly unless one of them was unable or unwilling to do so in which case the other could act alone. In any event the court may give direction to the attorneys pursuant to s. 39 of the Act. Accordingly it is appropriate to direct that in future, the attorneys act jointly when acting under the POA. As there will be some capacity for either Richard or Catherine to access the chequing account for immediate needs of Jean, this provides the necessary controls and safeguards while remaining practical.
11With regard to the amount to be kept in the chequing account, I am of the view that two months’ rent (roughly $10,000) should be adequate. In light of Jean’s own income going into the account, this may require a monthly infusion of approximately $2,000 - $3,000 from the investment account.
12In consideration of the above and in the exercise of my discretion the parties are directed as follows:
a. Both Richard and Catherine are to prepare accounts for all income received and expenditures made and any assets of their mother disposed of between September of 2015 and December 31, 2016 in accordance with Rule 74.17. A copy of each set of accounts is to be served on the other party and on the Office of the Public Guardian and Trustee. At the request of either party or the PGT, the person preparing the accounts will pass those accounts under Rule 74.18.
b. The Public Guardian and Trustee is to be served with a copy of this order and my endorsement and is authorized to act as litigation guardian for the incapable respondent.
c. The parties may continue to operate a joint chequing account on behalf of Jean Marion Beamish for the purpose of making funds available for her immediate needs. That may either be the existing chequing account or if both attorneys agree it may be moved to another financial institution. Both attorneys are to have access to the bank records at all times and they are to account for all withdrawals made from the account. The balance in the chequing account shall be maintained at $11,000.00 or such higher amount as Richard and Catherine may agree upon in writing.
d. The attorneys are to open an investment account in the name of Jean Marion Beamish and the net proceeds of sale of the home shall be immediately deposited into that account. The investment account is to require joint approval for all investment decisions and withdrawals. If Richard and Catherine jointly agree, they may transfer funds or assets from the investment corporations to the investment account to top up the amount invested.
e. Richard and Catherine shall arrange to transfer sufficient funds from the investment account to the chequing account to maintain the necessary balance in that account and they shall at all times maintain sufficient liquid assets to meet this obligation. They may arrange for automatic monthly transfers if that is appropriate.
f. The parties are to file the last will and testament of Jean Marion Beamish with the local registrar of this court for safekeeping under s. 2 of the Estates Act and a true copy of the will is to be filed in this proceeding.
g. Further directions may be obtained on motion by either of the attorneys or by the Public Guardian and Trustee should that be necessary.
13Both parties seek costs of the application. Each of them has incurred legal fees, disbursements and HST of between $8,000 and $9,500. Each claims they were required to incur those costs by the unilateral actions or intransigence of the other. The parties each have fiduciary duties to their mother as her attorneys to act in her best interests and not in their own.
14I accept that each of them believe they are trying to do just that and live up to the obligations thrust upon them by the power of attorney. Were that the case and if the application was required to obtain directions over a legitimate divergence of opinion it would be reasonable to order the costs paid out of the estate of the donor of the power of attorney. In my view however the duty of a jointly appointed attorney includes a duty to attempt to co-operate with the other attorney and to act jointly if at all possible. There is little evidence the parties made any realistic attempt to do so before resorting to unilateral action on the one hand and litigation on the other.
15A fair result is for the parties to each bear a portion of their own costs. Accordingly the applicant shall have costs of $5,000 which may be paid out of the proceeds of sale. The respondent shall have costs of $6,000 which may be paid out of the proceeds of sale. The parties shall otherwise be responsible for their own costs.
Mr. Justice C. MacLeod
Date: December 9, 2016
CITATION: Beamish v. Beamish, 2016 ONSC 7761
COURT FILE NO.: 16-69426
DATE: 20161209
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Richard Beamish
Applicant
AND
Catherine Beamish et. al.
Respondents
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: Ryan Flewelling, for the
Applicant
Calina Ritchie, for the Respondent, Catherine Beamish
ENDORSEMENT
Mr. Justice Calum MacLeod
Released: December 12, 2016.