COURT FILE NO.: CV-18-00078503

DATE: 2019/06/12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARC ANDREW ARNOLD Applicant

– and –

JOHN JAMES ARNOLD, DAVID PAUL ARNOLD and LOUISE ARNOLD Respondents

COUNSEL:

Marie-Pierre Dupont, for Applicant

Carmen Baru, for the Moving Party/proposed Intervenor, Daniel George Arnold

Gib van Ert, for the Respondents, John James Arnold and David Paul Arnold

Shaela W. Rae and Lauren McMurtry, for the Respondent, Louise Arnold

HEARD: May 30, 2019

RULING ON MOTION

(Decision released on June 3, 2019, with written reasons to follow)

CORTHORN J.

Introduction

[1] Louise Arnold is an 86-year old widow, with assets said to be in the seven-figure range. Louise has four children—all sons. Three of Louise’s sons are embroiled in a dispute with respect to the management of her property. For ease of reference, the sons are referred to by their respective first names.

[2] Marc, John, and David disagree as to which of two Powers of Attorney executed by Louise governs the management of her property. Marc relies on a 2011 Power of Attorney, naming each of him, John, and David as attorneys for property. John and David, together, rely on a Power of Attorney executed by Louise in 2019. In that document, only John and David are named as attorneys for property.

[3] Marc’s application, for declaratory and other relief, is scheduled to be heard on Friday, June 14, 2019. The application is being case-managed and the hearing date was scheduled on an urgent basis. A case management order was made permitting Daniel to bring this motion, for intervenor status, on an urgent basis.

[4] Daniel is not seeking to become in any way responsible for management of his mother’s property. He requests intervenor status on the application. He does so because of the living arrangements he had with both of his parents (prior to his father’s death) and, more recently, with his mother.

[5] Daniel has been living in his parents’ home for a number of years—including, until early 2019, with Louise. In addition, Daniel had limited access to both a bank account and a credit card in his mother’s name. From time-to-time, he received cash from his mother. Daniel says that the money he received, whether from the bank account, from the credit card, or directly from his mother, was put towards the operation of the house and payment of household expenses.

[6] Since the dispute arose between his brothers, Daniel’s access to his mother’s bank account has been terminated and he no longer receives cash payments. Daniel has not tried to use, and is uncertain whether he still has access to, his mother’s credit card.

[7] Daniel asserts that without financial assistance from his mother, he is in a precarious state. Daniel was diagnosed with schizophrenia in 1986. He has not been gainfully employed for a number of years. His income is limited to benefits under the Ontario Disability Support Program (“ODSP”). Daniel says that he is no longer able to manage the home in which he has been residing for a number of years; nor is he able to find suitable, alternate accommodation with ODSP benefits as his sole source of income.

[8] In essence, Daniel seeks leave to intervene on the application to ensure that his needs are met—regardless of whom the court determines is responsible to manage Louise’s property. In addition, Daniel requests an interim order that Louise pay him $1,000 per month retroactive to February 2019.

Disposition

[9] For the reasons that follow (a) Daniel is not entitled to intervenor status on the application, and (b) his request for interim financial assistance is denied. The motion is dismissed in its entirety.

Analysis

a) The Originating Process

[10] Marc’s notice of application was issued in November 2018. The respondents to the application originally included only John and David. Marc did not name Daniel as a respondent.

[11] The notice of application was amended on two occasions—first on March 22 and again on March 31, 2019. Those dates are based on the dates that appear in the copy of the amended amended notice of application at Tab 3, of the motion record. The amendments made include the addition of Louise as a respondent. Daniel was not added as a respondent.

[12] The relief requested in the amended amended notice of application includes:

a) A declaration that Louise is an “incapable person with respect to the management of her financial affairs”.

The relief requested does not address capability (or lack thereof) to manage property using the specific language of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “Act”). The parties understand, however, that the determination to be made on the application is with respect to s. 6 of the Act—Louise’s capacity to manage “property”.

b) An order removing John and David as attorneys for property on the basis of undue influence exerted by them for personal benefit;

c) An order setting aside, striking, or terminating the 2019 Power of Attorney executed by Louise (the three verbs are each used in various paragraphs in the originating process);

d) An order granting leave to Marc to seek direction of the court with respect to the management of Louise’s property;

e) An order appointing RBC Wealth Management as the “sole Attorney for Property” for Louise.

The phrase, “sole Attorney for Property” is found in paragraph 1(f) of the amended amended notice of application. That specific relief is not available to Marc pursuant to the Act. I infer that Marc is seeking the appointment of RBC Wealth Management as the guardian of Louise’s property—assuming that Louise is declared to be incapable of managing property; and

f) An order for directions regarding the proper administration of Louise’s financial affairs. (Again, the parties understand that by “financial affairs”, Marc means “property”.)

[13] The various phrases that appear in the prayer for relief also appear throughout the substantive portion of the amended amended notice of application. For example, reference is made therein to Louise’s “property”, “financial affairs”, and “affairs”.

[14] The originating process makes no mention whatsoever of s. 6 of the Act—in which the definition of “incapable of managing property” is set out. The originating process does, however, make reference to s. 8 of the Act, which defines when a person is capable of giving a continuing power of attorney.

[15] I raise these matters because Daniel’s ability to intervene is, in large part, determined based on the issues raised in the application. The manner in which Marc’s claim is presented, including the deficiencies in the application, are relevant to the outcome of Daniel’s motion.

[16] The allegations made in the originating process include that two assessments of Louise’s capacity were carried out by capacity assessor, Dr. Sarazin. The first assessment was carried out in 2018. At that time, Dr. Sarazin found Louise to be incapable of managing her property (s. 6 of the Act). I infer that it was as a result of that finding that Marc, John, and David began to act as attorneys for property pursuant to the 2011 Power of Attorney.

[17] A second assessment by Dr. Sarazin was conducted in early 2019. Marc alleges that John and David arranged for Dr. Sarazin to assess Louise’s capacity to grant a continuing power of attorney (s. 8 of the Act). Dr. Sarazin concluded that Louise had the requisite capacity.

[18] It appears that Marc does not dispute the conclusion reached by Dr. Sarazin in that regard. Rather, Marc alleges that John and David exerted undue influence over their mother to have her execute the 2019 Power of Attorney (excluding Marc from his existing role as one of three attorneys for property).

[19] For the purpose of Daniel’s motion, I find that the issues to be determined on the application include:

1. Is the 2019 Power of Attorney to be set aside by reason of undue influence exerted on Louise at the time by John and David?

2. If the answer to Issue No. 1 is, “no”, are John and David to be removed as attorneys for property by reason of their respective conduct in the fulfillment of that role?

3. If the answer to either of Issues No. 1 and 2 is, “yes”, is Louise incapable, at this time, of managing property within the meaning of s. 6 of the Act?

4. If John and David are no longer acting as attorneys for property and Louise is incapable of managing her property, how is her property to be managed?

[20] Where does Daniel fit in all of this? Is he entitled to intervenor status on the application?

b) Criteria for Intervenor Status

[21] Sub-rule 13.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the basis upon which leave to intervene may be granted:

(1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

[22] Sub-paragraphs (a), (b), and (c) above, are disjunctive. Daniel needs only establish that he satisfies one of the three criteria as a basis for leave to intervene.

[23] Even if one of those criteria is satisfied, r. 13.01(2) must also be considered. It provides that “the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just”.

[24] I turn to the three criteria listed in r. 13.01(1).

Interest in the subject matter of the proceeding (r. 13.01(1)(a))

[25] At its heart, the subject matter of Marc’s application is the responsibility for management of Louise’s property.

[26] The application highlights that issues related to preservation or dissipation of assets may have to be addressed in due course—once responsibility for management of Louise’s property is determined and/or in the administration of her estate following her death.

[27] In the originating process, two general allegations are made with respect to the potential dissipation of Louise’s assets. At paragraph 2(C)(o), it is alleged that John is “coordinating a transfer of the family cottage owned by [Louise] to …. David .... at less than fair market value”. At paragraph 2(C)(v), Marc alleges that John and David transferred ownership of Louise’s house (i.e. the home in which Daniel continues to reside) to a trust in which they are named as trustees.

[28] I accept that, as one of Louise’s children and a potential beneficiary of Louise’s estate, Daniel has an interest in the preservation of Louise’s assets. The preservation of assets is, however, not a subject matter of the application.

[29] Daniel is not seeking to be one of the individuals responsible for management of his mother’s property. I find that Daniel has no interest in the subject matter of Marc’s application.

The person may be adversely affected by a judgment in the proceeding (r. 13.01(1)(b))

[30] Daniel does not dispute that he is not adversely affected by the management of his mother’s property—as long as whoever is responsible to manage the property fulfills that role properly. Daniel is unhappy about the changes in his personal circumstances, including the limitations that he alleges have been placed on his access to his mother’s funds and credit.

[31] Daniel relies on historical family conflict in support of his submission that he will be adversely affected if John and David are permitted to remain in the role of attorneys for property. Daniel’s evidence in that regard is contradicted by John’s evidence, on this motion, with respect to their parents’ respective wills. John’s evidence is that Louise and her late husband both made provisions, in their respective wills, for a home for Daniel once both parents were deceased.

[32] There is also contradictory evidence from Daniel and John with respect to expenses for the operation of the family home.

[33] I accept that Daniel is unhappy about his changed circumstances. The evidence on the motion does not, however, establish that Daniel will be adversely affected by the outcome of the proceeding. To the contrary, once there is certainty about the responsibility of management of Louise’s property, Daniel will know with whom he is dealing. If Daniel is unhappy about how he has been and/or is treated, he may assert his personal rights at that time.

The existence of questions of fact or law in common (r.13.01(1)(c))

[34] Daniel points to paragraphs 2(C)(x), 2(C)(y) and 2(D)(aa) of Marc’s amended amended notice of application. Marc therein alleges that the breakdown of the relationship between him and his two brothers includes that:

• John and David are exerting undue influence over Louise to further their own agenda. Their conduct is detrimental to Marc, Daniel, and the estate plan Louise had in place before she became “incapable of managing her own affairs”;
• John and David moved Louise out of the family home, leaving Daniel alone in the home without the requisite financial support; and
• John and David are in the process of transferring Louise’s assets in a manner that is detrimental to Daniel (whom, in the originating process, Marc describes as a “dependent”). This matter appears under the heading “Relief Sought” (para. 2(D)(aa)) and in the section of the originating process devoted to evidence of the breakdown of relationship (para. 2(C)(a-z)).

[35] Daniel submits that questions of fact and law raised by those paragraphs of the originating process are in common with the questions of fact or law in one or more proceedings that he may yet pursue. Daniel asserts that he has a claim against his late father’s estate (which has never been probated) and a claim against Louise for child support. The latter claim would, if brought, be pursuant to the Family Law Act, R.S.O. 1990, c. F.3.

[36] Daniel is not committed to pursuing either a claim against his late father’s estate or a claim against his mother for child support. It is possible that some of the evidence upon which he would rely in support of either claim is the same as some of the evidence relevant to the determination of Marc’s application. That similarity of evidence, if it exists, does not necessarily give rise to questions of fact in common.

[37] I am not satisfied that questions of fact with respect to Daniel’s potential claim against either his father’s estate or his potential claim against Louise for child support, have the degree of commonality required to support granting Daniel intervenor status in the latter proceeding.

[38] I am also not satisfied that there are questions of law in common as between Marc’s application and either of Daniel’s potential claims. Daniel’s entitlement to share in his late father’s estate and/or to child support, give rise to issues of law that are entirely distinct from the issues raised on Marc’s application. The latter issues relate to the management of Louise’s property.

Summary

[39] I find that Daniel fails to satisfy each of the three criteria listed in r. 13.01(1).

c) Other Factors – Undue Delay or Prejudice (r. 13.02)

[40] Even if Daniel met one or more of the three criteria discussed above, it would be necessary to consider whether granting him intervenor status would result in undue delay or prejudice. I find that on the basis of undue delay or prejudice alone, Daniel should be denied intervenor status.

[41] Had Daniel brought his motion at the end of March 2019 (when the notice of application was amended for a second time) it might have been possible to grant Daniel intervenor status. It might, at that time, have been possible to address logistical and/or timing issues that would result from the addition of Daniel as a party to the application.

[42] Daniel’s motion was heard two weeks to the day prior to the date on which the application is scheduled to be argued. I find that, at this stage of the proceeding, the addition of Daniel as a party to the application would result in undue delay and prejudice.

[43] The dispute with respect to management of Louise’s property has been ongoing for more than six months. Louise has, in that time, been removed from her home. Allegations have been made that the individuals currently managing Louise’s property are acting inappropriately. Daniel faces uncertainty with respect to his living arrangements. Each member of the Arnold family needs a resolution of the subject matter at the heart of Marc’s application: Who is to be responsible for the management of Louise’s property?

Lack of Intervenor Status does not Delay or Prejudice Daniel’s Claims

[44] There is nothing preventing Daniel from pursuing his claim against his late father’s estate and/or against his mother (for child support). The outcome of either of those claims is not dependant on whom the court determines is responsible for the management of Louise’s property—including Louise personally, if she is found to have the requisite capacity.

[45] I find that Daniel is neither delayed nor prejudiced in advancing either of his claims by reason of being required to do so in one or more separate proceedings.

Intervention Would Unduly Delay or Prejudice Parties

[46] Daniel submits that the parties to the application would not experience undue delay or prejudice if he were added as a party. Daniel is prepared to rely, for the purpose of the application, on the affidavit he filed in support of the motion. Daniel argues that his reliance on that affidavit eliminates undue delay or prejudice to the parties to the application. I disagree.

[47] To the extent that the parties delivered affidavits in response to Daniel’s affidavit, they did so for the purpose of the motion. They did not do so for the purpose of the application. The parties to the application would be required to:

• Consider whether to deliver any further affidavit in response to Daniel’s affidavit;
• Serve any such further affidavits; and
• Once Daniel delivered his reply affidavit, if any, consider whether to conduct a cross-examination of Daniel on his affidavit.

[48] Even if cross-examinations were not conducted, it would be problematic (if not impossible) for the parties to meet the deadlines pursuant to the Rules for the filing of facta on the application. The application would have to be re-scheduled to a date subsequent to June 14, 2019. It is uncertain when the application could be heard on an urgent basis.

[49] In summary, I find that the addition of Daniel as a party to the application would result in undue delay to the parties to the application.

[50] I also find that the addition of Daniel as a party to Marc’s application would prejudice the parties to the application because (1) the scope of the evidence and issues would be expanded, and (2) the parties would incur increased costs in addressing the expanded issues and costs.

Summary

[51] Even if I am wrong, and Daniel satisfies one or more of the criteria pursuant to r. 13.01(1), I find that the addition of Daniel as a party to the application would result in undue delay or prejudice to the parties to the application. His request for intervenor status is denied on that basis alone.

The Request for Interim Financial Assistance

[52] Daniel is not added as a party to the application. He has not satisfied me that there is any basis upon which he is entitled to an order for monthly support as a non-party to this application. As I have already noted, there is nothing precluding Daniel from pursuing a claim against his late father’s estate and/or a claim against his mother for child support. I make no finding with respect to the merits of either claim.

[53] Daniel’s motion with respect to financial assistance is dismissed.

Costs

[54] Marc did not respond to Daniel’s motion. He was represented on the return of the motion. No submissions were made on Marc’s behalf on the return of the motion. Marc’s counsel did not submit a costs outline following the motion. I find that Marc is not entitled to any costs on the motion; nor is he in any way responsible for the costs of the other respondents to the motion (John, David, and Louise).

[55] A costs outline was received on behalf of each of Daniel, John and David, collectively, and Louise. As the successful parties on the motion, the respondents, John, David, and Louise, are presumptively entitled to their respective costs of the motion. I see no reason to deviate from that presumption:

• Based on timing alone, Daniel’s motion stood little, if any, chance of succeeding;
• Daniel has been aware of the changing circumstances for a number of months. He could have pursued his motion at an earlier date;
• Daniel first attempted to bring his motion in writing. That attempt (a) was ill-conceived, as the issues on the motion clearly were not appropriate for that forum; and (b) resulted in delay in the motion being heard; and
• There was and remains nothing precluding Daniel from pursuing his personal claims, if he is genuine in his interest in doing so.

[56] Based on the costs outlines received, I fix John and David’s costs, on a partial indemnity basis, at $4,000 inclusive of fees, disbursements, and applicable H.S.T. I fix Louise’s costs in the same amount. From the costs outlines received, I note the following:

• The actual fees incurred by Daniel are approximately double the actual fees incurred by John and David, collectively, and by Louise;
• Daniel could, therefore, reasonably be expected to pay partial indemnity costs of $4,000 (if not more) to the responding parties; and
• The responding parties emphasized the importance of adhering to the existing timetable for the application and the disruption to the proceeding because of Daniel’s motion.

[57] I recognize, however, that Daniel is a person of limited means. He is caught in a dispute between his brothers. It would cause undue hardship to Daniel to require him to pay costs at this time. The costs order made below therefore defers Daniel’s obligation to pay the costs ordered.

Summary

[58] I order as follows:

1. The motion is dismissed in its entirety.

2. Daniel Arnold shall pay to John Arnold and David Arnold, collectively, their costs of this motion on a partial indemnity basis in the amount of $4,000.

3. Daniel Arnold shall pay to Louise Arnold, her costs of this motion on a partial indemnity basis in the amount of $4,000.

4. The costs addressed in paragraphs 2 and 3 above, shall be credited against Daniel Arnold’s distributive share of Louise Arnold’s estate, if any, under either an intestacy or Louise Arnold’s will.

5. The costs addressed in paragraphs 2 and 3 above, bear interest in accordance with s. 129(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43.

Madam Justice Sylvia Corthorn

Released: June 12, 2019