Court File and Parties
Oshawa Court File No.: CV-18-2050-00 Date: 2019-08-14 Ontario Superior Court of Justice
Between: Estate of Ronald Alfred Craymer, deceased, John Craymer Plaintiff
– and –
The Estate of Joan Craymer aka Mildred Joan Craymer, deceased, Linda Diane Hayward, The Estate of Michael Smith, deceased, Curtis Smith and Angela Erin Coleman Defendants
Counsel: Tyler McLean, for the Plaintiff Sheri Thompson and Arieh Bloom, for the Defendants
Heard: May 23, 2019
Reasons for Decision
De Sa J.:
Summary of Facts
Background
[1] Joan Craymer (“Joan”) and Ronald Craymer (“Ronald”) were married on December 31, 1984. They were married for thirty-two years until Joan passed away on July 30, 2016, and Ronald passed away a few months later on March 21, 2017.
[2] It was a second marriage for Joan and a fourth marriage for Ronald. At the time of their marriage, Joan had three adult children of her own and Ronald had four adult children. Joan’s children were Linda Hayward (“Linda”, and also, the “Defendant”), Curtis Smith, who has been discharged from this action, and the deceased Michael Smith.
[3] Michael passed away from a stroke unexpectedly and intestate on March 14, 2017 and his only child, Angela Coleman, is his administrator.
[4] Ronald’s four children are John Craymer (the “Plaintiff”), Jane Craymer, Robert Craymer, and Lorrain Craymer.
[5] All of Joan’s children maintained a close relationship with Joan and Ronald over their thirty plus years of marriage. Linda and her family in particular, were very close to Joan and Ronald, spending much time together.
[6] None of Ronald’s children maintained a close relationship with Joan or Ronald in the thirty plus years they were married. Ronald’s children have only re-established contact since being notified by Linda that they are the beneficiaries of their father’s estate.[^1]
The Power of Attorney and Will
[7] In or around September 2006, Joan and Ronald executed Powers of Attorney naming each other as their Attorney’s for Property and Care, and each naming Joan’s daughter, Linda Hayward, as their alternate Attorney.
[8] The terms of the Power of Attorney for Property allowed for Joan to make gifts of Ronald’s property to relatives so long as there remained sufficient funds to properly care for the incapable person.
[9] Joan was clearly the primary loved one in Ronald’s life. Under Ronald’s Will, executed in September 2006, if Joan was to survive him, she was given the entire residue of his estate, subject to any debts. If she were to predecease him, only then would Ronald’s assets go to his own children.
The Stroke
[10] On or about October 8, 2006, Ronald suffered a massive stroke that left him incapable and a permanent resident of Sunnybrook Long Term Care facility. Joan was then called upon to exercise her authorities under Ronald’s Power of Attorney until she died.
[11] Joan acted as Ronald’s Attorney for Property and Personal Care without input or assistance from the Defendant. No request was made during Joan’s tenure as Attorney for Property for an accounting.
[12] Shortly after the stroke, Joan placed Ronald in Sunnybrook Health Sciences Centre (“SHSC”). While his room and board were covered at the SHSC[^2], for almost the entire time, Joan arranged for Ronald to have a personal support worker, Selase Teferi, assist him. As Joan could only get out to Sunnybrook about once-a-week, Ms. Teferi also acted as companion so that Ronald had company and stimulation.
[13] Ms. Teferi would attend to Ronald daily. She would read to him, take him to get his haircut, and take him to the workout area for his physiotherapy. She would also do his shopping (i.e., pajamas). She would take him to any events at Sunnybrook. For her service, Ms. Teferi was paid $800 per week.[^3]
[14] In June 2011, during her term as the Attorney for Property, Joan also transferred the marital home that was held jointly between herself and Ronald solely in her name. The Registry notes the transfer as an inter-spousal transfer for natural love and affection.
Joan and Ronald Pass Away
[15] Joan’s death on July 30, 2016, was sudden and without warning. She was capable in the days before her death. After the death of Joan, Linda acted as Joan’s Estate Trustee and Ronald’s Attorney for Property.
[16] Joan’s assets were distributed to Curtis, Linda and Michael, as contemplated in Joan’s Will. At the time of Joan’s passing, she had assets of $1,063,674, which included the entire marital home.
[17] Ronald passed away a few months later on March 21, 2017.
[18] Following Ronald’s passing, on October 30, 2017, the Defendant, through her counsel, served a Notice of Application for a Certificate of Appointment of Estate Trustee with a Will. This served as notice to the Plaintiff that Linda was applying to be the Estate Trustee for Ronald.
[19] Ronald’s children, the beneficiaries under Ronald’s Will, received a letter from the Defendant’s lawyer with the Initial Estate Accounting and Release of the Estate Trustee. The Initial Estate Accounting reports identified Ronald’s assets to be in the amount of $35,963.21.[^4]
[20] Upon learning of the reported value of his father’s estate, the Plaintiff took immediate action. He sought the removal of Linda as Ronald’s Trustee, and on the same date of his appointment as Estate Trustee, commenced the within action via a Notice of Action.
The Position of the Parties
[21] The Plaintiff has brought a motion to compel the Passing of Accounts in relation to Joan’s spending while she was Attorney for Property in relation to Ronald.[^5] Joan Craymer was required to maintain records of her spending. The Plaintiff takes the position that her failure to do so renders her, and her Estate, liable for any expenses that cannot be explained.
[22] The Plaintiff takes the position that it is entitled to a Passing of Accounts, and one is clearly justified in the circumstances of this case. The Plaintiff points to the following facts to justify the motion:
At the time of the Joan’s passing, Ronald reportedly had assets of $9,965.74, whereas Joan had assets of $1,063,674.00.
After Ronald’s stroke, Joan, as Attorney for Property, took the husband’s name off the title to their matrimonial home.
While Linda acted as Ronald’s Attorney for Property, Ronald’s bank account appreciated at a rate in excess of $3,000 per month. Thus, presumably, during the almost ten years Joan acted as Ronald’s Attorney for Property, his savings would have been in excess of $360,000 if managed in the same way.
Ronald was also believed to have a hobby farm with more than 100 acres of land.
[23] The Defendant opposes the Plaintiff’s motion. The Defendant takes the position that it would be unfair to expect Linda, on behalf of the Estate, to provide an accounting for all Joan’s spending in her capacity as Ronald’s Attorney for Property. There is no indication that detailed records were kept. Given that the Defendant had nothing to do with the spending, there is no way in which she would be in a position to provide an accounting. Moreover, the process would leave her personally liable on behalf of the already administered Estate, for actions that had nothing to do with her.
[24] The Plaintiff has already commenced an action in which Joan’s actions are to be considered, and where relief is available should the Plaintiff establish that there has been a breach of Joan’s fiduciary obligation.
Analysis
The Obligation to Keep Accounts
[25] The conduct of an Attorney for Property is governed by the provisions of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”). An attorney is a fiduciary whose powers and duties must be exercised and performed diligently, with honesty and integrity and in good faith, for the incapable person's benefit: SDA, s. 32(1). In Zimmerman v. McMichael Estate, 2010 ONSC 2947, 103 O.R. (3d) 25, at paras. 32-33, Strathy J. (as he then was) held:
An attorney must, in accordance with the regulations established pursuant to the S.D.A., keep accounts of all transactions involving the grantor's property: s. 32(6). Sub-section 2(1) of Ontario Regulation 100/96 relating to the S.D.A. provides that the accounts maintained by an attorney shall include, among other things:
(a) a list of the incapable person’s assets as of the date of the first transaction by the attorney or guardian on the incapable person's behalf . . .;
(b) an on-going list of assets acquired and disposed of on behalf of the incapable person, including the date of and reason for the acquisition or disposition and from or to whom the asset is acquired or disposed;
(c) an ongoing list of all money received on behalf of the incapable person, including the amount, date, from whom it was received, the reason for the payment and the particulars of the accounts into which it was deposited;
(d) an on-going list of all money paid out on behalf of the incapable person, including the amount, date purpose of the payment and to whom it was paid; [and]
(h) an on-going list of all compensation taken by the attorney or guardian, if any, including the amount, date and method of calculation.
Sub-section 6(1) of that regulation provides that an attorney shall retain the accounts and records required by the regulation until he/she ceases to have authority and the attorney is discharged by the Court on a passing of accounts under s. 42 of the S.D.A.
[26] An attorney who fails to retain receipts supporting substantial cash withdrawals or expenses charged against the incapable person’s property has not adequately carried out his/her duties and will be held personally liable for the unsubstantiated withdrawals: Lanthier v. Dufresne Estate, 2002 2653 (ON SC), [2002] O.T.C. 671 (Ont. S.C.J.), at paras. 52 – 57; Ronson Estate, Re, [2000] O.J. No. 1294 (Ont. S.C.J.), at paras. 15 – 20.
The Passing of Accounts
[27] There is no statutory requirement for an Attorney for Property to pass accounts. The requirement to pass accounts can only be triggered upon Application under s. 42(1) of the SDA, wherein the court may order that “all or a specified part of the accounts of an attorney or guardian of property be passed”.
[28] The SDA enumerates who may compel an Attorney for Property to pass accounts. The subsection 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.
(2) An attorney, the grantor or any of the persons listed in subsection (4) may apply to pass the attorney’s accounts.
(4) The following persons may also apply:
The grantor’s or incapable person’s guardian of the person or attorney for personal care.
A dependant of the grantor or incapable person.
The Public Guardian and Trustee.
The Children’s Lawyer.
A judgment creditor of the grantor or incapable person.
Any other person, with leave of the court. [Emphasis added.]
[29] As the Plaintiff is neither the Attorney for Property nor any of the other persons listed in section 42(4) of the SDA, the Plaintiff requires leave of the court to compel the Defendant to pass accounts.
[30] In addressing this Court’s discretion to pass accounts, Patillo J. explained in the case of McAllister Estate v. Hudgin, 42 E.T.R. (3d) 313 (ONSC), at para. 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.
See also Dzelme v. Dzelme, 2018 ONCA 1018, 46 E.T.R. (4th) 43.
No Limitation Period
[31] In Ontario, there is no statutory limitation period for the passing of accounts: The Salvation Army, 2016 ONCA 971, 23 E.T.R. (4th) 1. As explained in Wall v. Shaw, 2018 ONCA 929, 43 E.T.R. (4th) 1, at paras. 48 – 50:
[I]nterpreting s. 4 of the Limitations Act as capturing r. 74.18(7) notices of objection to accounts would risk insulating an estate trustee’s management of an estate from effective scrutiny. As mentioned, no Ontario law imposes an obligation on an estate trustee to pass accounts at fixed periods of time. Armitage holds that an application to pass accounts does not fall within s. 4 of the Limitations Act. As a result, an estate trustee can apply to pass accounts that pre-date the issuance of the application by more than two years.
If a beneficiary was precluded by s. 4 of the Limitations Act from objecting to those accounts, an estate trustee who wished to avoid scrutiny would have a perverse incentive to simply “wait out” the two-year limitation period knowing that the beneficiary’s objections would be statute-barred. The longer the estate trustee waited to pass accounts, the greater the period of his management of the estate he could remove from a contested hearing. While a court possesses the power to inquire into accounts in the absence of a notice of objection, as a practical matter the court relies on beneficiaries’ objections to direct its inquiry.
Such an uneven application of the Limitations Act would place many beneficiaries in the difficult position of having to rebut the presumption in s. 5(2) of the Limitations Act that they first knew of their “claim” against the estate trustee on the day the act or omission of the estate trustee – a questioned disbursement or taking of compensation – took place. To avoid such a result, beneficiaries would be forced to bring annual applications to compel estate trustees to pass accounts, unnecessarily increasing the amount of estate litigation in this province. [Emphasis added.]
[32] Accordingly, the only bars are the equitable defences of laches and acquiescence: M.(K.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6 (S.C.C.).
[33] The doctrine of laches is not an arbitrary or a technical doctrine, but has its roots in equity. Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, that might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy: Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221, at pp. 239 – 40.
[34] The ingredients of an equitable defence based upon delay were discussed by the Supreme Court of Canada in M.(K.) v. M.(H.), at pp. 77 – 78:
What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches . . . Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine. [Emphasis added.]
[35] A party relying on the equitable defence of laches must show a combination of delay and prejudice. In the circumstances, it must be unfair to allow the plaintiff to proceed with the action. Again, the issue must be resolved as a matter of justice as between the parties: Louie v. Lastman, 2002 45060 (ON CA), 61 O.R. (3d) 449 (Ont. C.A.), leave to appeal to S.C.C. refused [2002] S.C.C.A. No. 465.
Application to the Facts of this Case
[36] The facts of this case are complicated.
[37] The Plaintiff cannot be blamed for bringing the action in the manner that he did. The delay is understandable when considered in context. It was only after receiving the documentation provided by the Defendant (on behalf of Ronald’s Estate) that the Plaintiff realized that there were potential issues with the Estate and with the actions of Joan as the Attorney for Property.
[38] However, ordering the passing of accounts is discretionary. And in my view, to require an accounting at this point would result in a clear injustice as between the parties.
[39] Linda, as Estate Trustee, is hardly in a position to account for Joan’s spending while she was alive. Yet, to require a passing of accounts at this point would subject every line of Joan’s spending (as Attorney for Property) to the court’s scrutiny. Moreover, as the Estate Trustee, the Defendant would be liable to account for any unexplained expenditures.[^6]
[40] Indeed, it is unclear that the spending was spurious given the nature of the relationship between Joan and Ronald. Joan would have been spending the money as his wife as much as his Attorney for Property. The failure to keep detailed accounts is hardly suspicious given the circumstances here.
[41] There is no doubt that the transfer of the matrimonial home by Joan is highly suspicious. Absent an explanation for the transfer, an adverse inference will likely be drawn. In my view, however, the outstanding action is the more appropriate forum in which to adjudicate these issues.
[42] The Estate has already been ordered to produce and disclose any information that may assist the Plaintiff with the litigation. The Plaintiff will have the opportunity to discover any parties with relevant evidence in order to establish its case. While I recognize that the onus will be on the Plaintiff to make out the claim, in my view, fairness would require such.
[43] In the circumstances, I will not order a passing of accounts. While leave is granted to bring the application, the application is dismissed.
[44] I thank the parties for their submissions. I will receive cost submissions from the Defendants within 3 weeks of this decision. The Plaintiff will have one week thereafter to respond.
Justice C.F. de Sa Released: August 14, 2019
[^1]: Linda Hayward had never met John Craymer and only spoke on the phone with him once in all these years. [^2]: His room and board at SHSC were free of charge as he was a Canadian War Veteran. [^3]: This is a service that Ms. Hayward continued to pay for after Joan passed away. [^4]: After Ronald’s deat,h Linda acted as Ronald’s Estate Trustee, having been so named in his Last Will and Testament. Ronald reportedly had assets of $9,965.74. [^5]: Joan acted as Ronald’s Attorney for Property between October 8th, 2006 and July 30, 2016, 2017. Linda acted as Ronald’s Attorney for Property from July 30th, 2016 to March 21, 2017. [^6]: Where a person in such a fiduciary position fails to pass accounts or otherwise account for his actions, he can be required to repay the amount unaccounted for to the estate: Hooper (Estate) v. Hooper, 2011 ONSC 4140.