Court File No.: CV-16-565499 Date: 2019-06-18 Superior Court of Justice – Ontario

Re: Andrzej Gal, also known as Andrew Gal and Janina May Gal, also known as Janine Gal in her capacity as attorney for property of Andrzej Gal And: Robert Jagielski, Barbara Jagielski also known as Barbara Gal and Janusz Puzniak

Before: Mr. Justice Chalmers

Counsel: D. Altshuller and L. Di Genova, for the Plaintiffs J. Round for the Defendant, Robert Jagielski A. J. Kania for the Defendant, Barbara Jagielski also known as Barbara Gal S. Sack for the Defendant, Janusz Puzniak

Heard: April 30, 2019

Endorsement

Overview

1The following motions are before the court:

a. The Defendant, Robert Jagielski, (“Robert”) seeks an order pursuant to R. 21.01(1) of the Rules of Civil Procedure, striking the Statement of Claim on the basis that the action is improperly constituted. Janusz Puzniak (“Janusz”) brings a separate motion in which he seeks the same relief.

b. The Plaintiffs seek an order pursuant to R. 7.02, of the Rules of Civil Procedure appointing Janina Mary Gal a.k.a. Janina Gal (“Janina”) as the litigation guardian for the Plaintiff, Andrew Gal (“Andrew”).

2The Plaintiffs motion to appoint Janina as the litigation guardian for Andrew proceeded. The motions brought by Robert and Janusz were adjourned on the basis that the determination of the Plaintiff’s motion may dictate how the action will be constituted going forward.

3For the reasons that follow, I find that Janina is not qualified to act as litigation guardian for Andrew. The Plaintiff’s motion is dismissed.

Background Facts

4Andrew, was born on November 16, 1935. He is currently mentally incapable and is unable to manage his affairs. There is no dispute as between the parties that a litigation guardian is required to continue the action on Andrew’s behalf.

5Andrew has four daughters: Janina, Teresa Gal (“Teresa”), Wanda Gal-Chodynski (“Wanda”), and Barbara Jagielski, a.k.a. Barbara Gal (“Barbara”).

6Andrew and his wife were the owners of three properties:

(a) 2 Fermanagh Avenue, Toronto (the “Fermanagh Property”);

(b) 165 Westminster Avenue, Toronto (the “Westminster Property”); and

(c) Cottage in the Town of Collingwood (the “Cottage Property”) (collectively referred to as the “Properties”).

7On July 4, 2015, Andrew’s wife passed away. Following her passing, Andrew became the sole owner of the Properties.

8Several weeks later, Barbara and her husband, Robert Jagielski (“Robert”) arranged for Andrew and Janina to meet at Robert’s office. The meeting took place on July 23, 2015. In addition to Andrew, Janina, Barbara and Robert, Janusz was also in attendance. Janusz is a lawyer and practices law in the same office as Robert.

9At the time of the meeting, Andrew’s physician, Dr. Bogdan Pietraszek provided a handwritten note dated July 2015, which states; “Above patient is under medical care. At present he is able to make his own legal decisions.”

10Andrew instructed Janusz to transfer the ownership of the Properties as follows:

(a) Fermanagh Property from Andrew, to Andrew and Janina as joint tenants;

(b) Westminster Property from Andrew, to Andrew, Barbara and Janina as joint tenants;

(c) Cottage Property from Andrew, to Barbara.

11Janusz prepared the necessary documentation to complete the transfers in accordance with Andrew’s instructions.

12Before the transfers took place, Andrew sold the Fermanagh Property in November 2015. The sale price was $1,175,000. Robert acted as the solicitor for Andrew with respect to the sale of the Fermanagh Property. The net proceeds from the sale were deposited into a joint chequing account on December 1, 2015. The account was in the names of Janina and Andrew.

13On December 28, 2015, Janina and her husband took Andrew to meet with Earl Heiber. Mr. Heiber is a lawyer and was retained for the purposes of preparing a new Will for Andrew as well as a Power of Attorney. Janina arranged the meeting with Mr. Hieber without advising her sisters, Teresa, Wanda and Barbara.

14Mr. Heiber met with Andrew and Janina. He was provided with a handwritten note prepared by Dr. Pietraszek dated December 8, 2015 which states that Andrew, “is capable mentally to prepare his final will and testament”.

15Mr. Heiber was satisfied that Andrew had testamentary capacity and prepared the Will in accordance with the instructions which were provided by Andrew. Mr. Heiber also prepared a Power of Attorney pursuant to which Andrew appointed Janina as his attorney for property and personal care.

16The Will and Power of Attorney were executed by Andrew on December 21, 2015. The Will appoints Janina as the sole executrix and trustee (para. 2). In terms of the distribution of the estate, the Will provides as follows:

a) Any automobile owned by Andrew at the time of his death is to be transferred to Teresa (para. 3b);

b) The remaining articles of personal, domestic and household use belonging to Andrew at the time of his death are to be divided equally between his four daughters (para. 3c);

c) The residue of the estate is to be transferred to Janina (para. 3d).

17On August 16, 2016, Janina retained Dr. Kenneth Shulman to examine Andrew and to provide an opinion as to Andrew’s capacity to instruct counsel. He was also asked to provide his opinion as to whether Andrew had testamentary capacity at the time he executed the new Will on December 21, 2015. Dr. Shulman examined Andrew on October 6, 2016. Janina accompanied Andrew at the examination.

18Dr. Shulman was advised that there was a dispute with respect to the property transfers that were executed in July 2015. Although Dr. Shulman was provided with some background information before he examined Andrew, he was not provided with the handwritten note prepared by Dr. Pietraszek dated July 2015 which provides that Andrew was able to make his own legal decisions.

19Dr. Shulman reviewed the medical records that were provided to him, and examined Andrew. Dr. Shulman prepared a report dated November 23, 2016, in which he provides the opinion that Andrew suffers from cognitive impairment and early dementia. It was his opinion that his wife’s death was difficult for Andrew to assimilate and as a result he would not have been capable of providing instructions to transfer ownership of the Properties on July 23, 2015. Although it was his opinion that Andrew was not able to provide instructions in July 2015 when the Properties were transferred, Dr. Shulman provided the opinion that Andrew had capacity to provide his instructions to amend his Will and grant the Power of Attorney five months later, in December 2015. Dr. Shulman also provided the opinion that as of November 23, 2016, Andrew had the mental capacity to instruct counsel and to authorize the within action.

20Andrew and Janina, in her capacity as Power of Attorney for Andrew, issued the Statement of Claim on December 7, 2016. In the Claim, Andrew seeks an order setting aside the transactions which were carried out by Janusz; namely the transfer of the Westminster Property from Andrew to Andrew, Barbara and Janina as joint tenants, and the transfer of the Cottage Property from Andrew to Barbara. If successful in the action, the Westminster and Cottage Properties, would be solely owned by Andrew and form part of his estate upon his death.

21The Defendants filed Statements of Defence in which they took the position that the action was improperly constituted on the basis that it should have been commenced in Andrew’s name alone or on Andrew’s behalf by a properly appointed litigation guardian who is free of any conflict. The Defendants also take the position that Janina, in her capacity as Power of Attorney, has no standing and is not a proper Plaintiff in the action.

22At the time the Claim was issued, Andrew was a Plaintiff in his own capacity and was not being represented by a litigation guardian. Although it was the position of the Plaintiffs that Andrew had the mental capacity to instruct counsel, Janina executed an affidavit pursuant to Rule 7, on April 19, 2017. In the affidavit, Janina consents to act as Andrew’s litigation guardian. In the affidavit she also states that she has no interest in the proceeding which is adverse to Andrew.

23Robert and Janusz each brought a motion for an order pursuant to Rule 21, striking the Plaintiffs’ claim. The motions came before Justice Pollack on May 29, 2018. At that time, counsel for the Plaintiffs advised the court that there may now be an issue as to whether Andrew had capacity to instruct counsel. Justice Pollack adjourned the motion to August 14, 2018 to allow for a capacity assessment. Her endorsement also required the Plaintiffs to bring a motion for the appointment of Janina as Andrew’s litigation guardian in the event that Andrew is found to be incapable of instructing counsel.

24Dr. Shulman examined Andrew on June 12, 2018. Andrew was accompanied by Janina. Dr. Shulman interviewed Janina with respect to Andrew’s level of functioning since his previous examination on November 23, 2016. He then interviewed Andrew alone in his office. Andrew was unable to provide a reasonable account of the issues involved in the litigation. Dr. Shulman prepared a report dated June 21, 2018 in which he provided the opinion that Andrew continues to show cognitive impairments and has declined further since the previous assessment. Dr. Shulman concluded that Andrew’s “cognition is simply too impaired at this point to reliably and validly instruct counsel.”

25After receiving Dr. Shulman’s report, Janina brought a motion to be appointed as Andrew’s litigation guardian. The motion was returnable at the same time as the motions brought by Robert and Janusz to strike the action. As stated above, the motion brought by the Plaintiffs to appoint Janina as litigation guardian proceeded before me, and the motions brought by Robert and Janusz were adjourned.

Analysis

26The Plaintiffs take the position that Andrew appointed Janina as his attorney for property pursuant to the Power of Attorney dated December 21, 2015, and as such she is presumptively entitled to act as litigation guardian for Andrew. Rule 7.02(1) (1.1) (b) provides that, unless the court orders otherwise, where a Plaintiff is mentally incapable, and has an attorney under a Power of Attorney, the attorney shall act as litigation guardian.

27Although a person appointed as an attorney pursuant to a Power of Attorney is authorized to act as a litigation guardian, the court continues to have the discretion to, “order otherwise”. The Defendants take the position that Janina has an interest in the proceeding which is adverse to Andrew, and is not “indifferent” to the outcome of the litigation, and therefore is not qualified to act as litigation guardian for Andrew.

Interest in the Proceeding Adverse to the Person Under Disability

28Before a person can act as a litigation guardian, (including a person who is acting pursuant to the authority granted by a Power of Attorney), she must file an affidavit in which she states, among other things, that she has no interest in the proceedings adverse to that of the person under disability; Rule 7.02(2) (g).

29In the action, the Plaintiffs seek an order setting aside the transfer of the Westminster Property. If successful, title on the property would be transferred from Andrew, Janina and Barbara as joint tenants to Andrew. Janina would no longer have an ownership interest in the Westminster Property. The Defendants argue that as a result, Janina’s interest in the Westminster Property will be adversely affected by the relief sought by Andrew in the action and therefore she is in a conflict of interest with Andrew.

30Janina, in her affidavit sworn April 19, 2017, states that she is not adverse in interest to Andrew because she has consented to reversing the transfer of the title in the Westminster Property. On cross examination, Janina conceded that she has not unilaterally consented to reverse the transfer of the Westminster Property. Her consent is contingent and conditional upon Barbara also consenting to do so.

31Janina also states in her affidavit sworn April 19, 2017, that Andrew wishes for all his properties to form part of his Estate and be divided equally between his four daughters.

32In fact, if successful in the litigation, the result will conflict with Andrew’s intention. If the property transfers which took place on July 23, 2015 are set aside, the properties will form the residue of the estate and ownership will be transferred to Janina upon Andrew’s death. As a result, the Westminster and Cottage Properties will not be divided equally between the four daughters.

33There is also a potential conflict between Janina and Andrew with respect to the pursuit of the litigation. Regardless of how the litigation proceeds, Janina stands to benefit. If the property transfers are not set aside, she will be left with her joint interest in the Westminster Property. If the action is successful, then upon Andrew’s death, Janina will be the sole owner of the Westminster and Cottage Properties. The legal fees for the prosecution of the action are being paid out of Andrew’s bank account and therefore Janina has nothing to lose by continuing with the litigation, even if the litigation is not necessarily in the best interests of Andrew.

34I conclude that Janina has an interest in the litigation which is, or may be adverse to Andrew. If the Plaintiffs are successful in the action, ownership in the Westminster Property will be transferred to Andrew and as a result Janina will lose her joint interest in the ownership of the property. Also, if the Plaintiffs are successful, Andrew will be the sole owner of the Westminster and Cottage Properties and upon his death and the properties will form part of the Andrew’s estate and will be transferred solely to Janina. This conflicts with Andrew’s apparent intention to have the entirety of the estate left to his four daughters equally.

Indifference in the Outcome of the Proceedings

35In addition to the requirement in R. 7.02 that the litigation guardian must file an affidavit in which she states that she has no interest in the proceedings adverse to the party under disability, the litigation guardian must also meet the common law test for appointment. One of the criteria of the common law test for the appointment, is that the litigation guardian must be indifferent to the outcome of the proceedings: Gronnerud (Litigation Guardians of) v. Gronnerud Estate, 2002 SCC 38, [2002] 2 SCR 417, at para. 19.

36The Supreme Court of Canada described the “indifference” criteria as follows:

Indifference by a litigation guardian requires that the guardian be capable of providing a neutral, unbiased assessment of the legal situation of the dependent adult and offering an unclouded opinion as to the appropriate course of action. In essence the requirement of indifference on the part of a litigation guardian is a prerequisite for ensuring the protection of the best interests of the dependent adult. A litigation guardian who does not have a personal interest in the outcome of the litigation will be able to keep the best interests of the dependent adult front and centre, while making decisions on his or her behalf. Given the primacy of protecting the best interests of disabled persons, it is appropriate to require such disinterest on the part of a litigation guardian.

It is acceptable in most cases, and perhaps desirable in some cases, to have a trusted family member or a person with close ties to the dependent adult to act as litigation guardian. However, there are exceptions. Once such exception, is the situation currently presented by this appeal, in which there is a particularly acrimonious and long-standing dispute among the children concerning their dead parent’s estate. In such cases, the indifference required to be a Litigation guardian is clearly absent: Gronnerud, at para. 20, 21.

37The question to be answered by the court is whether the proposed litigation guardian is able to put aside her own interests and represent the dependent adult in the litigation in a manner that will promote the dependent adult’s best interests: Zabawskyj v. Zabawskyj at para. 29 and 31.

38On the evidence before me, I am not satisfied that Janina is indifferent to the outcome of this action and as a result I find she is not capable of promoting Andrew’s best interests.

39On December 21, 2015, Andrew changed his Will to make Janina the sole executrix and trustee of this estate. Pursuant to the Will, Janina is to receive the residue of his estate. The action brought by Andrew and for which Janina wishes to be appointed his litigation guardian, seeks to reverse the property transfers which took place on July 23, 2015. If successful in the litigation, Andrew would become the sole owner of the Westminster and Cottage Properties. Upon his death, both properties would form part of Andrew’s estate and be transferred to Janina pursuant to the terms of the Will. As a result, Janina stands to gain financially if the action is successful.

40In addition to the potential personal benefit that Janina may gain through the litigation, there is also the risk that Janina will be unable to act in the best interests of Andrew due to her relationship with Barbara.

41A litigation guardian will not meet the requirement of “indifference” if there is conflict between the proposed litigation guardian and another party to the litigation: Lodge (Guardian of) v. Lodge, 2003 BCSC 1205 at para. 21. I am satisfied on the evidence before me that there is an acrimonious relationship between Janina and Barbara. The personal conflict between Barbara and Janina, may result in an inability on the part of Janina to ensure that all decisions made by her in the action are in the best interests of Andrew.

Appointment of a New Litigation Guardian

42Counsel for the Plaintiff argues that if Janina is not permitted to continue to act as litigation guardian, there will be an unacceptable delay in proceeding with the action. Although concerns about delay are valid, particularly in light of Andrew’s age, I am not satisfied that this is an appropriate reason to allow a person who is not “indifferent” to the outcome of the action, to act as litigation guardian.

43It will be necessary for the Plaintiffs to appoint a new litigation guardian for Andrew; one who is not in conflict and who is indifferent to the outcome in the action. No alternative litigation guardian has been proposed and therefore it may be necessary for the Public Trustee and Guardian (“PGT”) to be appointed. I note that Janina in her cross-examination stated that if she was not appointed as Andrew’s Litigation Guardian, she would consent to the PGT being appointed.

Disposition

44For the reasons set out above, I make the following order:

(1) Janina is not “indifferent” to the outcome of the action and therefore she is not qualified to act as Andrew’s litigation guardian;

(2) The Plaintiffs’ motion to appoint Janina as Andrew’s litigation guardian, is dismissed;

(3) The Plaintiffs are ordered to appoint a new litigation guardian for Andrew, or serve a motion to have the PGT appointed as litigation guardian, within 30 days of the date of this endorsement.

(4) Pursuant to R. 50.13(1) of the Rules of Civil Procedure, I direct that a case conference be held before a judge or case management master at which time a timetable for the proceeding will be established. The case conference is to be arranged within 60 days of the date of this endorsement.

(5) The Defendants were successful with respect to the Plaintiffs’ motion to appoint Janina as litigation guardian, and therefore each is presumptively entitled to his or her costs of the motion. If the parties cannot agree on costs, the Defendants may each make written submissions of no more than three pages in length (excluding bills of costs and case law) within 30 days of the date of this endorsement. The Plaintiffs may provide written submissions in reply, on the same basis, within 14 days of receiving the Defendants’ submissions.

Chalmers, J.