COURT FILE NO.: CV-18-5210
DATE: 2019 10 18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ZORKA HALAR and MLADEN HALAR, Applicants
OLGA HALAR BACIC, Respondent
BEFORE: Fragomeni J.
COUNSEL: Gordon Bobesich, for the Applicants
James MacDonald, for the Respondent
HEARD: September 18, 2019
ENDORSEMENT
Nature of the Hearing
[1] In 2017, Zorka Halar appointed Mladen Halar and Olga Halar Bacic to act as Power of Attorney. Mladen is Zorka’s son and Olga is Zorka’s daughter.
[2] In June 2018, Zorka created a new Power of Attorney appointing Mladen only as the sole attorney.
[3] On December 4, 2018 Zorka and her son Mladen commenced an application for a declaration that the Power of Attorney dated June 21, 2018 is valid and in full force and effect. In the alternative, the applicants seek an order that Olga be removed from the first Power of Attorney.
[4] Olga requests that the application be dismissed and that the court finds that the first Power of Attorney continues to be valid. In the alternative, Olga takes the position that on the evidentiary record filed at this hearing the court cannot make the orders requested and as such the application should be converted to an action.
Overview of the Facts and background
‒ In 2017, Zorka Halar, the mother ("Zorka"), appointed Mladen Halar, her son ("Mladen)", and Olga Halar Bacic, her daughter ("Olga"), to act as her Powers of Attorney for Personal Care and Continuing Powers of Attorney for Property ("First POA").
‒ On or around October 13, 2017, Mariel Clarke of the Central West Community Care Access Centre attended Zorka's home and determined that she was incapable of making long term care decisions for herself. Ms. Clarke, Mladen and Olga agreed that Zorka required urgent admission to a Long-Term Care Facility.
‒ On November 29, 2017, Zorka was diagnosed with moderate Alzheimer's Disease and Dementia.
‒ On January 16, 2018, Zorka and her husband (now deceased) moved to Croatia. The couple sold their home and the proceeds were deposited into their bank account held by the Bank of Montreal ("BMO account").
‒ When the couple moved, Zorka left instructions to send money from the BMO account to her Croatian account when she requested it. Mladen advised Olga that he would transfer money from the BMO account to the couple's Croatian account when required.
‒ Zorka's husband (and Mladen and Olga's father) passed way on April 4, 2018. Zorka currently resides in a retirement home in Croatia.
‒ In an effort to assist in the administration of Zorka's husband's estate, Olga states that she checked the BMO account and noticed that Mladen had withdrawn the following amounts:
• $10,000 before the couple moved to Croatia in January 2018
• $20,000 in early April 2018
• $20,000 in late April 2018
‒ After seeing these transactions, Olga transferred $10,000 from the BMO account to her personal account as she was concerned with Mladen's withdrawals.
‒ Mladen states that Olga began to resist him when he wanted to send money to Zorka for her expenses in Croatia. As a result, Zorka was left with no funds and Mladen was forced to pay all of her expenses from his personal funds.
‒ The parties have had conflict over some of the requested funds and required purchases that Mladen deems necessary, such as the purchase of a vehicle to transport Zorka and payments to Mladen's friend Ante. Olga is suspicious of such requests.
‒ Zorka created a new Power of Attorney on June 21, 2018, appointing Mladen Halar as the sole attorney ("Second POA"), in response to Olga Halar Bacic's alleged refusal to cooperate. The Second POA was witnessed by Dr. Beg-Brnardic, Zorka's psychiatrist in Croatia.
‒ There are conflicting medical reports in this case:
• Dr. Beg-Brnardic, Zorka's psychiatrist in Croatia, was of the opinion that Zorka is capable of making decisions;
• Dr. McCallion, Zorka's family physician of approximately 40 years, was initially of the opinion that Zorka is not capable of attending to her financial affairs.
‒ On September 24, 2018, BMO froze Zorka’s account.
Orders of Lemon J., Shaw J. and Ricchetti J.
Lemon J. – February 1, 2019
THIS COURT ORDERS on an interim basis pending the hearing of the Application that payments on account of Zorka Halar’s living expenses shall be made directly to Vila Jelasi in Croatia from monies Zorka Halar’s bank account held at the Bank of Montreal bearing account number 0489 3884-322 on consent of the parties acting reasonably after the Applicants have served an invoice or contract confirming the amount owing to Vila Jelasi in Croatia on account of Zorka Halar’s living expenses.
THIS COURT FURTHER ORDERS on an interim basis pending the hearing of the Application that the Applicant, Mladen Halar, and the Respondent, Olga Halar Bacic, shall cooperate as attorneys and pay all reasonable expenses incurred or relating to the personal care needs of Zorka Halar from monies in Zorka Halar’s bank account held at the Bank of Montreal bearing account number 0489 3884-322. Such expenses shall be supported by invoices and/or receipts and shall be paid directly to the provider or payor of such services once the invoices and/or receipts have been produced and exchanged by the parties.
Shaw J. – May 30, 2019
THE COURT ORDERS that payment in the amount of $20, 793.62 shall be made from Zorka Halar’s bank account at the Bank of Montreal bearing account number 0489 3884 332 and transferred to Zorka Halar’s bank account in Croatia bearing account number HR7624000083243202710 on account of her room, board and care expenses incurred in Vila Jelasi.
THIS COURT FURTHER ORDERS that, on an interim basis, payment in the amount of $1,262.00 shall be made once per month from Zorka Halar’s bank account at the Bank of Montreal bearing account number 0489 3884-322 and transferred to Zorka Halar’s bank account in Croatia bearing account number HR7621000083243202710 on account of Zorka Halar’s ongoing room, board, and care expenses incurred at Vila Jelasi.
THIS COURT FUTHER ORDERS that payment in the amount of $3,020.00 on account of the cemetery monument shall be made from Zorka Halar’s bank account at the Bank of Montreal bearing account number 0489 3884-322 and transferred to Zorka Halar’s bank account in Croatia bearing account number HR7624000083243202710.
THIS COURT FURTHER ORDERS that payment in the amount of $3,200.00 on account of the physiotherapist expenses shall be made from Zorka Halar’s bank account at the Bank of Montreal bearing account number 0489 3844-322 and transferred to Zorka Halar’s bank account in Croatia bearing account number HR7624000083243202710.
THIS COURT FURTHER ORDERS, on an interim basis, that payment of the Physiotherapist shall be made on a regular basis upon receipt of a weekly invoice for service.
THIS COURT FURTHER ORDERS that Mladen Halar shall pay to the Respondent, from his own personal funds and not from Zorka Halar’s funds, costs of the motion in the amount of $3,892.31.
Ricchetti J. – August 7, 2019
THIS COURT ORDERS that on consent, on an interim basis, the order of the Honourable Justice Shaw, dated May 30, 2019 is varied to allow payment in the amount of $500.00 to Zorka Halar on account of her living and personal expenses. Such payment shall be made on or before the 30th day of each and every month from Zorka Halar’s bank account at the Bank of Montreal bearing account number 0489 3884-322 and transferred to Zorka Halar’s bank account in Croatia bearing account number HR7624000083243202710, at Karlovacka Banka.
THIS COURT FURTHER ORDERS THAT such payment shall be retroactive to May 15, 2019.
Medical Reports
Dr. A. McCallion report dated April 11, 2018
[5] Dr. A. McCallion writes:
Based on my last professional encounter with this woman, it is my medical opinion that this woman is not mentally capable of attending to her financial affairs. Power of Attorney for her ongoing financial management should be transferred to her children Olga and Mladen Halar.
Dr. Beg-Brnardic report dated May 10, 2018
[6] Dr. Beg-Brnardic writes:
This report is issued at the request of the family, that is, of the attorney.
Mrs. Halar Zorka has been in the Obiteljski dom (eng. Family home) A. Žugčič, Jelaši 103 d, Karlovac since 24/01/2018. She arrived in the home accompanied with her husband, who died in the meantime. She has accepted the dynamics well, she is active in all segments.
Within interpersonal relationships, she stands out with her need for dominance, often having the need to “help and give advice” to other home users, always with good intent.
She is preoccupied wither physical issues, and often has the need for constant checkups and diagnostic procedures.
Occasional paranoid interpretations with psychomotor disorder, the need to check her belongings and to count them, to label drawers, etc.
She is neatly oriented in all directions, in good contact, collaborative, answers questions adequately.
Occasionally of reduced mood- reactive nature.
Mourning in progress.
She negates anxiety.
She negates psychopathological experiences although paranoid interpretations accompanied with anxiety have been noticed.
In content, she is preoccupied with her physical issues with the need to speak in detail about the illnesses she had in her youth.
During the conversation, she keeps the attention and concentration well.
Occasional milder amnestic disorder/ she forgets where she has put things – then she finds them, going back to old contents relating to illnesses and similar/.
Of good appetite, sleeps well.
Anxiety and tension are treated with smaller doses of quetiapine/ 25 mg/ dizapem as required.
I think she is capable of making decisions that are of her interest, that she is capable of disposing of her property, that she is capable of expressing her last wish.
Dr. A. McCallion report dated September 6, 2018
[7] Dr. McCallion writes:
In April this year, I wrote a short note expressing my concerns regarding the mental state of Zorka Halar. This note was written at the request of Olga Halar, the patient’s daughter. The opinion expressed in this note was based on clinical tests done in November 2017 and on clinical observations in January 2018.
I have read with interest the findings of Dr. Visnja Beg-Brnardic, a psychiatrist who is presently treating Zorka Halar now resident in Croatia. This physician has more recent knowledge of the patient and her updated clinical findings based on more recent contact is now more relevant than my own observations of many months ago.
Furthermore, it is well known that cultural and language issues can distort clinical testing for cognitive impairment. Mrs. Halar was also under major mental, social, and family stress at that time.
It is my opinion that Dr. V. Beg-Brnardic’s statement that quotes, “I think she is capable of making decisions that are in her interest, that she is capable of disposing of her property, that she is capable of expressing her last wishes,” is a more relevant clinical opinion in Mrs. Zorka Halar’s case than the opinion expressed in my note of April 1, 2019.
Position of the Parties
[8] The applicants submit that Zorka is capable of making decisions and is capable of disposing of her property. They rely on the May 10, 2018 report of Dr. Beg-Brnardic, Olga’s psychiatrist in Croatia.
[9] The respondent, on the other hand, argues that there are reasonable grounds to believe that Zorka did not have the capacity to revoke the first Power of Attorney and enter into the second Power of Attorney and the evidentiary record at the hearing is not sufficient to establish that capacity.
[10] Both Mladen and Olga make serious and far reaching allegations against each other asserting misconduct or neglect in their duties as attorneys.
[11] The applicants submit that Olga has removed $10,000.00 from Zorka’s BMO account to pay her personal bills. They also submit that Olga has refused to authorize any payments to Zorka for necessities from April 2018 to May 2019. The applicants take the position that Olga is prioritizing her potential inheritance by withholding funds from Zorka.
[12] Olga submits that she is acting in the best interests of Zorka and is seeking to prevent financial abuse of Zorka by Mladen. Olga takes the position that Mladen is attempting to secure Zorka’s money for his own use.
Analysis and Conclusion
[13] I am not satisfied that I am in a position to make the findings and orders requested at this hearing on the evidentiary record before me.
[14] I am satisfied that this application should be converted to an action. There are serious issues in dispute relating to capacity, especially on the limited medical information provided for this hearing.
[15] The report of Dr. Beg-Brnardic does not address the test set out in Section 8 of the Substitute Decisions Act. The report is also contrary to the first report of Dr. A. McCallion.
[16] I am not satisfied the medical evidence before me supports the position advanced by the applicants.
[17] Further, there are significant and material facts in dispute that require a trial to assess the credibility of the witnesses. Both Olga and Mladen make serious allegations of misconduct and neglect against each other. A trial is required to determine what findings are made with respect to those allegations.
[18] In Collins Barrow Toronto LLP v Selectcore USA, LLC, 2016 ONSC 3826, Pollock J. set out the following at paras. 2, 17, 23 and 24:
[2] The issue to be decided is whether this matter can proceed by way of an Application and be resolved by way of an application, or whether the application should be converted into an action or a trial of certain issues.
[17] To determine whether I should exercise my discretion to convert the application to an action and direct a trial, I must consider: (a) whether there are material facts in dispute; (b) the presence of complex issues; (c) whether there is a need for the exchange of pleadings and discovery, and (d) the importance and the nature of the relief sought by application: Sekhon v. Aerocar Limousine Services Co-Operative Ltd., 2013 ONSC 542, at para. 51, citing McKay Estate, at para. 6.
[23] I disagree. When I consider all of the factors I have referred to above, I do not accept the Applicant’s submissions that this is the “clearest of cases.” There are material facts in dispute with respect to whether there were promises made by the Applicant to apply a discount to its fees. Further, pleadings are required to determine the legal positions of both parties with respect to the amount of the debt owed by the Respondents to the Applicant. I am of the view that I cannot fairly determine the issues with respect to the material facts in dispute. This is not a motion for summary judgment wherein the parties set out their legal positions clearly in pleadings. It is difficult on this Application to determine the legal positions of the parties as they relate to the issues to be decided. In this regard, pleadings are required.
[24] I conclude that this application should be converted to an action and a trial be directed pursuant to Rule 38.10(b). The parties did not make any submissions on the procedure or timetable to be followed. I therefore order that:
(i) This application is converted into an action. The Applicant will be the Plaintiff and the Respondents shall be the defendants;
(ii) The Plaintiff has 15 days from today’s date to deliver a Statement of Claim;
(iii) The Defendants have 10 days after delivery of the Plaintiff’s Statement of Claim to deliver their Statement of Defence, with the Plaintiff having the right to Reply, in the usual manner.
(iv) If the parties cannot agree on a required timetable, this action is referred to a case managing Master to set a timetable.
[19] I conclude that this application should be converted to an action and a trial be directed pursuant to Rule 38.10(6). The following timetable is to be followed:
• This application is converted to an action. The applicants will be the Plaintiffs and the respondent will be the Defendant.
• The Plaintiffs have 20 days from today’s date to deliver a Statement of Claim.
• The Defendant shall have 10 days after delivery of the Statement of Claim to deliver her Statement of Defence.
• The Plaintiffs may deliver a Reply within 7 days.
• If the parties cannot agree on a timetable to move this action to a trial, they can return the matter before any judge to have one set.
[20] The orders of Lemon J., Shaw J., and Ricchetti J. continue pending further order of the court.
[21] If the parties cannot resolve the issue of costs with respect to the hearing before me, they may file written submissions on costs within 20 days.
Fragomeni J.
Date: October 18, 2019
COURT FILE NO.: CV-18-5210
DATE: 2019 10 18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ZORKA HALAR and MLADEN HALAR
Applicants
- and -
OLGA HALAR BACIC
Respondent
BEFORE: FRAGOMENI J.
COUNSEL: Gordon Bobesich, for the Applicants
James MacDonald, for the Respondent
ENDORSEMENT
Fragomeni J.
Date: October 18, 2019