COURT FILE NO.: 03-157/17 DATE: 202003 19
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SANJIV KUMRA in his capacity as attorney for property and personal care of ASHA KUMRA Applicant/Responding Party – and – ASHA KUMRA, RAJIV KUMRA, RASHMI KUMRA AND THE PUBLIC GUARDIAN AND TRUSTEE Respondents/Responding Parties THE BANK OF NOVA SCOTIA TRUST COMPANY Moving Party
Counsel: Susan M. Sack and Jenny Bogod, for the Applicant/Responding Party, Sanjiv Kumra John W. Bruggeman, for the Respondent/Responding Party, Rajiv Kumra Justin W. de Vries and Jacob B. Kaufman, for the Moving Party, The Bank of Nova Scotia Trust Company
HEARD: January 8, 2020
REASONS FOR DECISION
Dietrich J.
Overview
1This matter involves an acrimonious dispute between two brothers, the applicant Sanjiv Kumra (“Sanjiv”) and the respondent Rajiv Kumra (“Rajiv”), about to their mother’s property. Their mother, Asha Kumra, is 81 years of age, a widow, and incapable of managing her property and her personal care. Sanjiv and Rajiv are Mrs. Kumra’s only two children.
2On November 23, 2006, Mrs. Kumra executed a power of attorney for property and a power of attorney for personal care. She appointed both her sons as her attorneys for property, and her attorneys for personal care, jointly. Subsequently, she executed a series of powers of attorney, appointing one or both of Sanjiv and Rajiv.
3There is a high level of distrust between Sanjiv and Rajiv. Each has accused the other of wrongdoing, fraudulent activity and improper dealings with regard to Mrs. Kumra’s property.
4On October 6, 2017, Sanjiv brought this application seeking, among other things: an order terminating all of Mrs. Kumra’s powers of attorney; a declaration that Mrs. Kumra is incapable of managing her property and personal care; an order appointing The Bank of Nova Scotia Trust Company (“Scotiatrust”) as guardian of property for Mrs. Kumra; an order requiring Scotiatrust to compel Sanjiv and Rajiv to pass their accounts as attorneys for Mrs. Kumra’s property; an order appointing Sanjiv as guardian of Mrs. Kumra’s personal care; and the registration of certificates of pending litigation in favour of Mrs. Kumra on title to two properties that she allegedly transferred to Rajiv’s spouse Rashmi Kumra (“Rashmi”) for less than fair market value consideration.
5On May 28, 2018, Sanjiv and Rajiv, personally, entered into Minutes of Settlement (the “Minutes”) in an effort to resolve the dispute between them relating to the guardianship of their mother’s property and past transfers of her property to each of them, directly or indirectly.
6On September 11, 2018, this court issued a judgment appointing Scotiatrust as the guardian of Mrs. Kumra’s property, approving Scotiatrust’s management plan, and ordering Sanjiv and Rajiv to abide by the terms of the Minutes to which Scotiatrust’s management plan was appended as a schedule (the “Judgment”).
7The Minutes include a provision that permits, but does not require, Scotiatrust to bring claims against Sanjiv and Rajiv and others in respect of property belonging to Mrs. Kumra. That provision limits such claims to property transferred to such persons as of the date of the Judgment and/or within the year prior to the Judgment.
8At issue is whether the Minutes are binding on Scotiatrust, and whether Scotiatrust may commence litigation, on behalf of Mrs. Kumra, regarding the two transfers of real property from Mrs. Kumra to Rashmi, which took place outside of the one-year period prior to the Judgment.
9In accordance with the dispute resolution terms of the Minutes, Scotiatrust brings this motion for advice and direction on the effect of the Minutes and the Judgment on Scotiatrust as guardian of Mrs. Kumra’s property.
10For the reasons that follow, I find that Scotiatrust is not bound by the Minutes. In its role as guardian of Mrs. Kumra’s property, Scotiatrust has a duty to act in the best interests of Mrs. Kumra in the management of her property. This overarching duty must be carried out irrespective of any purported limitation period respecting possible claims by Mrs. Kumra against family members and others, to which Sanjiv and Rajiv may have agreed in the Minutes, to which Mrs. Kumra is not a party.
Background
11Sanjiv is 51 years of age. He is a psychiatrist and lives with his wife and two children in Minnesota, in the United States. Rajiv is 54 years of age. He was a physician practicing in Toronto, and recently relocated to California, in the United States, with his wife Rashmi and their daughter.
12Regarding the property transfers to Rashmi (the “2017 property transfers”), the first occurred on April 18, 2017. Mrs. Kumra transferred to Rashmi her interest in an investment property at 2008 The Chase, in Mississauga, Ontario. Sanjiv alleges that Mrs. Kumra made the transfer for no consideration, and later for a purchase price of $675,000, at a time when it was valued at $870,000. Ten months later, the property was sold for $1,055,000 resulting in a profit for Rajiv and Rashmi. On May 10, 2017, Mrs. Kumra transferred to Rashmi the second real property, at 50 Ridgeway Crescent, in Etobicoke, Ontario. Sanjiv alleges that it was transferred for $36,000, at a time when it was worth approximately $3,940,000. Rajiv claims that Mrs. Kumra was holding the latter property on trust for him pursuant to a Trust Declaration, and that Mrs. Kumra never had any beneficial interest in the equity in either property, which always belonged to him.
13Following the 2017 property transfers, Sanjiv arranged for a capacity assessment of Mrs. Kumra. On September 8, 2017, Alanna Kaye, a certified capacity assessor, assessed Mrs. Kumra and found her to be incapable of managing her property. Ms. Kaye did not specify a date on which such incapacity arose. Rajiv disputed Ms. Kaye’s conclusions in her report regarding Mrs. Kumra’s capacity to manage property.
14Following the issuance of Sanjiv’s application, on October 19, 2017, this court ordered the Public Guardian and Trustee to appoint counsel for Mrs. Kumra pursuant to s. 3 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”), and ordered the preservation of Mrs. Kumra’s assets. The Public Guardian and Trustee appointed Lisa Sticht-Maksymec as counsel. Rashmi provided a written undertaking not to transfer or encumber the two properties that were the subject of the 2017 property transfers prior to the next court attendance.
15On February 21, 2018, Justice McEwen of this court ordered that Rashmi be removed as a respondent to Sanjiv’s application, which was, essentially, a guardianship application. Among other orders relating to the two properties, Justice McEwen relieved Rashmi of any obligation not to transfer or encumber the two properties. However, this Order was “without prejudice to the guardian(s) of property for Asha Kumra, if appointed, from pursuing or not pursuing, in their discretion, any of the allegations concerning the assets of Asha Kumra that have been raised in these proceedings.” Justice McEwen also ordered that no reference to the two properties (2008 The Chase and 50 Ridgeway Crescent) be made in any proposed management plan dealing with Mrs. Kumra’s property.
16In March 2018, Rajiv responded to Sanjiv’s application. He denied any wrongdoing and opposed the appointment of Scotiatrust as guardian. He alleged wrongdoing on the part of Sanjiv.
17On May 2, 2018, Sanjiv and Rajiv attended at a mediation with Marshall Swadron as mediator. They did not settle the issues raised in the application. Ms. Sticht-Maksymec, Mrs. Kumra and Mrs. Kumra’s caregiver were also in attendance at the mediation. Ms. Sticht-Maksymec confirmed that she could provide information about Mrs. Kumra’s wishes but did not have “capable instructions” and could not take a position on the settlement. The parties do not agree on whether John Clegg, a representative of Scotiatrust attended at the mediation. Sanjiv deposed that Mr. Clegg did not attend, while Rajiv deposed that he did attend.
18At the end of the mediation, the mediator, Mr. Swadron, circulated draft minutes of settlement he had prepared over the course of the mediation. These minutes did not reflect an agreement between Sanjiv and Rajiv. Following the mediation, the parties continued to negotiate.
19On May 4, 2017, Sanjiv’s counsel sent draft minutes of settlement to Rajiv’s counsel, which included language from Mr. Swadron’s draft. Specifically, paragraph 4 of the draft set out a requirement that the brothers exchange all documents regarding Mrs. Kumra’s property and financial transactions between Mrs. Kumra and one or more of her sons, their spouses and their companies, for the period from July 1, 2016 to the date of the approval of the settlement. This period was referred to as the “Production Period.” Paragraph 7 of this draft included the following language taken from Mr. Swadron’s draft: “the Guardian may commence proceedings against the parties or either of them in respect of any transactions during the Production Period and serve as Asha’s litigation guardian in the proceedings.”
20Counsel to Rajiv responded without proposing any changes regarding the Production Period, but he proposed a different timeline for the commencement of proceedings as set out in paragraph 7. He proposed that: “[t]he Guardian may commence proceedings against the parties or either of them in respect of any property belonging to Asha that is in their possession or any interest in assets held in the name of another party to which Asha is entitled as of the date of the order creating the guardianship and/or within one year before the creation of the guardianship. The Guardian shall serve as Asha’s litigation guardian in any proceeding.”
21Before responding to Rajiv’s offer, on May 11, 2018, Jessica Lamont, of Goddard Gamage LLP, as counsel to Sanjiv, contacted Mr. Clegg to discuss the revised paragraph 7 of the proposed minutes of settlement. She queried whether this paragraph would have any impact on Scotiatrust’s ability to pursue claims relating to Mrs. Kumra’s property, which arose prior to one year before Scotiatrust’s appointment, assuming it would be appointed.
22Mr. Clegg offered no evidence on this motion. However, Ms. Lamont’s notes from her telephone conversation with Mr. Clegg on May 14, 2018 state that in response to her question put to Mr. Clegg about “whether Scotia saw any of the paragraphs [of the draft minutes of settlement] as limiting Scotia’s ability to sue anyone on Asha’s behalf”, “JC said no.”
23On May 14, 2018, Sanjiv’s counsel responded to Rajiv’s proposal by expanding the group of persons against whom proceedings could be commenced to include “non-parties” in addition to Sanjiv and Rajiv. No further changes were made to paragraph 7 after Sanjiv’s counsel sent her May 14, 2018 letter.
24Sanjiv and Rajiv then entered into the Minutes, which were signed by Sanjiv on an unspecified date and signed by Rajiv on May 28, 2018. The Minutes include the following paragraphs, which are relevant to this motion:
- The Parties agree that Asha is presently incapable of managing her property, and has been incapable of doing so since September 8, 2017.
- Scotiatrust shall be appointed guardian of Asha’s property (the “Guardian”) and shall manage Asha’s property in accordance with the management plan attached as Schedule A to these minutes of settlement.
- Sanjiv and Rajiv shall deliver to the Guardian copies of all documentation in their possession respecting Asha’s property and all financial transactions between them or their spouses or companies controlled by them and Asha for the period from July 1, 2016 to the date of the order approving the settlement (the “Production Period”) within two (2) months of the date of the judgment approving this settlement.
- The Guardian may commence proceedings against the Parties or either of them or non-parties in respect of any property belonging to Asha that is in their possession or any interest in assets held in the name of another party to which Asha is entitled as of the date of the order creating the guardianship and/or within one year before the creation of the guardianship. The Guardian shall serve as Asha’s litigation guardian in any proceedings.
- Upon securing the PGT and Guardian’s approval of the minutes of settlement, Sanjiv shall bring a motion for approval of the settlement with the resulting order or judgment to incorporate these minutes of settlement with the balance of the application to be dismissed without costs.
- The Parties hereto acknowledge that each: has read and fully understands these minutes of settlement; is satisfied that the terms accurately reflect his intentions with respect to the matters dealt with herein; has obtained independent legal advice; has not been coerced, pressured, or induced to enter these minutes of settlement by any act of the other or any other person; and is signing these minutes of settlement voluntarily.
- These minutes of settlement are to be construed in accordance with the laws of Ontario and any dispute relating to them is to be determined on a motion or application to a judge on the Estates List of the Superior Court of Justice at Toronto.
- These minutes of settlement shall be binding on the parties and the terms of these minutes are non-severable.
25Scotiatrust provided the management plan that was attached to the Minutes. It did not reference the 2017 property transfers, though the record shows that these transfers had been brought to its attention by Sanjiv’s counsel.
26Some four months following the execution of the Minutes, on September 11, 2018, on consent of the parties, Justice Chiappetta of this court issued the Judgment.
27On February 13, 2019, counsel to Scotiatrust wrote to counsel for Sanjiv and Rajiv advising that there was a potential claim that Scotiatrust could assert regarding the 2017 property transfers, but that these transfers occurred prior to the purported one-year limitation period as set out at paragraph 7 of the Minutes. Scotiatrust sought agreement from Sanjiv and Rajiv on whether it could pursue this claim. Sanjiv and Rajiv are diametrically opposed on this question.
Positions of the Parties
28Sanjiv asserts that the Minutes do not bind Scotiatrust. He further asserts that even if Scotiatrust were bound by the Minutes, Scotiatrust would not be constrained from commencing claims on behalf of Mrs. Kumra that arose prior to the one-year limitation period agreed to by Sanjiv and Rajiv as set out in the Minutes. He argues that paragraph 7 of the Minutes is precatory, not mandatory, and, in any event, the rights of Mrs. Kumra, an incapable person, could not be bargained away by her sons.
29Rajiv asserts that the Minutes do bind Scotiatrust and that it is precluded from commencing any claim on behalf of Mrs. Kumra that arose before the one-year limitation period, including a claim relating to the 2017 property transfers. He asserts that because the Minutes were incorporated into the Judgment, Scotiatrust is bound by them.
Issues
30Scotiatrust seeks the advice and direction of this court on the following questions:
- Is it proper for Scotiatrust to bring this motion for advice and direction?
- Is Scotiatrust bound by the Minutes?
- If Scotiatrust is bound by the Minutes, is it precluded from pursuing a claim respecting 2017 property transfers?
1. Is it proper for Scotiatrust to bring this motion for advice and direction?
31Section 39(1) of the SDA provides that a guardian of property may move for directions from the court on any question arising in connection with the guardianship. Section 60(1) of the Trustee Act, R.S.O. 1990, c. T.23 permits a guardian to seek the opinion, advice or direction of the court.
32Despite the breadth of the power to seek the court’s direction, the guardian is limited in the type of direction it may seek. Generally, a fiduciary is precluded from seeking direction as to how it should exercise its discretion, but a guardian may seek the court’s direction on whether it is entitled to exercise its discretion: Gilchrist v. Deakin Estate, 2011 ONSC 1289, 66 E.T.R. (3d) 255, at para. 3. In this case, Scotiatrust is seeking guidance on whether it could, on Mrs. Kumra’s behalf, pursue a claim regarding the 2017 property transfers, not whether it should pursue such a claim. The latter decision is within the discretion of the guardian.
33Further, at paragraph 35 of the Minutes, Sanjiv and Rajiv agreed that any dispute relating to the Minutes is to be determined on a motion or application to a judge on the Estates List of the Superior Court of Justice in Toronto.
34Scotiatrust attempted to resolve the dispute between Sanjiv and Rajiv relating to the limitation period set out in paragraph 7 of the Minutes as it relates to the 2017 property transfers. Counsel to Scotiatrust wrote to each of them seeking their agreement on whether Scotiatrust could commence litigation on Mrs. Kumra’s behalf outside of the one-year period preceding the Judgment. Rajiv is adamant that Scotiatrust cannot commence any such litigation, while Sanjiv is adamant that Scotiatrust can and should commence such litigation. Because Sanjiv and Rajiv could not resolve this dispute between themselves, it was appropriate for Scotiatrust to seek the court’s opinion, advice or direction. Their authority to do so arises from both the SDA and the Trustee Act. Further, Sanjiv and Rajiv agreed that disputes arising from the Minutes would be determined by this court.
2. Is Scotiatrust bound by the Minutes?
35The Minutes are executed by Sanjiv and Rajiv only. Each had the benefit of independent legal advice. At paragraph 34, each of them confirms that the Minutes accurately reflect his intentions. At paragraph 36, it is specifically stated that the Minutes shall be “binding on the parties.”
36Scotiatrust is not a party to the Minutes. Sanjiv and Rajiv disagree on whether Mr. Clegg of Scotiatrust attended at the mediation at which many of the terms of the Minutes were discussed at length. Some of those terms were included in the draft minutes of settlement prepared by the mediator, which then formed the basis for the settlement ultimately reached following the mediation and led to the Minutes.
37Based on the record, I am inclined to accept that Mr. Clegg did not attend at the mediation. His absence is confirmed by the sworn evidence of Sanjiv’s counsel, Namali Gamage. She deposed that he did not attend, and that she was consulting with Mr. Clegg via telephone during the mediation. Ms. Sticht-Maksymec also deposed that Mr. Clegg was not in attendance at the mediation. It is, therefore, reasonable to infer that Scotiatrust did not participate in the mediation.
38Counsel for Scotiatrust submits that beyond commenting on the compensation it would seek if appointed guardian, it had little input into the Minutes. It submits that Mr. Clegg is not a lawyer and that the parties should not rely on his view of the meaning of the terms of the Minutes. Based on Scotiatrust’s limited involvement in the negotiation of the Minutes, I am satisfied that it, as putative guardian, played no role in protecting Mrs. Kumra’s property rights in the negotiation of the Minutes.
39Ms. Sticht-Maksymec’s evidence is that she attended the mediation as Mrs. Kumra’s s. 3 counsel. However, she confirmed that she was not acting as a litigation guardian or a substitute decision maker for Mrs. Kumra regarding the Minutes. She did not sign the Minutes on behalf of Mrs. Kumra. She confirmed to the persons in attendance at the mediation that she could not take “capable instructions” from Mrs. Kumra at that time. She also deposed that Mrs. Kumra was at the mediation and that, in Ms. Sticht-Maksymec’s view, it was obvious to everyone in the room that Mrs. Kumra would not have been capable. Mrs. Kumra’s caregiver also attended the mediation. The caregiver has not provided any evidence on this motion, and there is no reason to believe that she was protecting Mrs. Kumra’s property rights in the settlement process.
40While each of Sanjiv and Rajiv, at one time or another, was named as an attorney for property for Mrs. Kumra, there is no evidence to suggest that either was acting in that capacity when he signed the Minutes. Further, in the Minutes, each of them agreed that the Minutes were “subject to the approval of the Guardian, the PGT and a judge of the Superior Court of Justice.” By including this provision, I find that the parties acknowledged that Mrs. Kumra was incapable of managing her property, and that she had no legal representation with regard to her property rights affected by the Minutes. As such, any terms of the Minutes that affected her rights, including any arrangement that attempted to circumscribe her property rights, would require the approval of another in a position to protect those rights.
41I am satisfied that Mrs. Kumra had no representation at the mediation for the purposes of contributing to, or agreeing to, any terms of the Minutes. There is no evidence that anyone in attendance was advancing her interests. Similarly, following the mediation, when the final terms were agreed to and the Minutes were executed, no one was acting on Mrs. Kumra’s behalf with respect to her property rights. It is a basic premise of the law of contract that two parties, by an agreement, cannot bind a third.
42Pursuant to the SDA, a court order was required to find Mrs. Kumra incapable of managing her property, to appoint Scotiatrust as her guardian, and to approve Scotiatrust’s management plan, irrespective of any agreement between Sanjiv and Rajiv.
43The Minutes provide that once the PGT and the Guardian approved the Minutes, Sanjiv was to bring a motion for “approval of the settlement.” The Minutes do not state on whose behalf the approval of the settlement was to be sought.
44Practically speaking, the Public Guardian and Trustee has no jurisdiction to approve the Minutes. Scotiatrust submits that it did not approve the settlement and that the settlement was never reviewed by a lawyer on its behalf.
45The record shows that counsel for each of Sanjiv and Rajiv conferred with Mr. Clegg during the settlement process, but there is no evidence of Scotiatrust’s approval of the Minutes. The notes of Ms. Gamage reflect a call with Mr. Clegg on May 3, 2018, in which it is recorded that Mr. Clegg expressed the view that “even if the brothers [Sanjiv and Rajiv] agreed on some ‘date of incapacity’, Scotia will still have to do their due diligence to investigate and ascertain the assets and liabilities in a manner that is in Asha’s best interests.”
46During or following a telephone conversation with Mr. Clegg of Scotiatrust on May 14, 2018, Ms. Lamont on behalf of Sanjiv made a note that Mr. Clegg stated that “para. 7 makes no sense to him – would depend on our order – 12 month period does not tie into anything.” In the same call, Mr. Clegg confirmed that he had not read the Minutes in detail. I am satisfied that Scotiatrust did not approve the Minutes and the record does not show that it was asked to do so.
47The Judgment includes: a) a declaration that Mrs. Kumra is incapable of managing property; b) the appointment of Scotiatrust as the guardian of property for Mrs. Kumra; c) the approval of Scotiatrust’s management plan dated August 29, 2018 and an order that Scotiatrust act in accordance with the management plan; d) an order requiring Scotiatrust to pass its accounts within a specified timeframe; e) an order dispensing with an administration bond for Scotiatrust; f) an order dispensing with service of the application on Mrs. Kumra’s siblings; g) an order that Rajiv and Sanjiv shall abide by the terms of the Minutes of Settlement attached to the order as Schedule “A” to the Judgment and, in particular, without limitation, shall make production of the documents referred to in paragraph 4 of the Minutes; shall not speak ill of each other to Mrs. Kumra or her caregivers; and shall not discuss Mrs. Kumra’s finances with her; h) a number of costs orders; and i) an order that the Judgment concludes all matters at issue under and in relation to Sanjiv’s application.
48In my view, it is significant that Justice Chiappetta did not order Scotiatrust to abide by the terms of the Minutes. The Judgment expressly orders Rajiv and Sanjiv to abide by the Minutes but places no such obligation on Scotiatrust. The obligation placed on Scotiatrust is to act in accordance with the management plan, which is attached to the Minutes.
49Further, in her endorsement made the same day as the Judgment, Justice Chiappetta stated that “Judgment is to issue in accordance with the Minutes.” I take this statement to refer to the fact that the Minutes reflect the agreement between Sanjiv and Rajiv with respect to a declaration of Mrs. Kumra’s incapacity to manage property, the appointment of Scotiatrust as the guardian of her property, and an approval of Scotiatrust’s management plan. A court order was necessary, pursuant to the SDA, to give effect to these terms.
50Justice Chiappetta acknowledged that the settlement reflected in the Minutes was in the “best interests of Mrs. Kumra … Her assets are now secured and there are sound plans in place to ensure her personal and financial wellbeing.” In making these statements, I find that Justice Chiappetta was referring to the fact that the conflict between Sanjiv and Rajiv relating to Mrs. Kumra’s property would come to an end and Scotiatrust would be acting as her guardian with full authority to manage Mrs. Kumra’s property to ensure her financial wellbeing. Sanjiv and Rajiv would no longer be involved in, or have any authority over, Mrs. Kumra’s property. Accordingly, no transfers of Mrs. Kumra’s property could be made without her guardian, Scotiatrust, looking out for her best interests.
51The agreement between Sanjiv and Rajiv, both of whom had capacity to contract, did not need the approval of the court, but for the fact that the Minutes required that such approval be obtained. Ms. Sticht-Maksymec, who attended the hearing before Justice Chiappetta, deposed that none of the parties who were present on the motion sought the court’s approval of any compromise, limitation or release of any claims that Mrs. Kumra may have had against either of her sons or anyone else.
52If the Minutes were intended to be binding on Mrs. Kumra, court approval of the Minutes would have been necessary pursuant to rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, because she was a person under disability. The motion brought before Justice Chiappetta was not framed as a motion pursuant to rule 7.08, and it is not clear from the evidence that such approval was, in fact, sought on behalf of Mrs. Kumra by Sanjiv, as the applicant, or anyone else. It appears from Justice Chiappetta’s endorsement that Ms. Sticht-Maksymec only made submissions on the costs she was seeking.
53According to the Judgment, Scotiatrust, as Mrs. Kumra’s guardian, is ordered to act in accordance with the management plan, not the Minutes. Rajiv argues that the management plan makes no reference to the properties, which are the subject of the 2017 property transfers. He therefore asserts that these properties are outside of the scope of Scotiatrust’s property management plan. I cannot accept this argument. Justice McEwen’s Order, dated February 21, 2018, specifically precluded any reference to the two properties in any proposed management plan. Further, that Order provided that it was made “without prejudice to the guardian of property, if appointed, from pursuing or not pursuing in their discretion, any allegations concerning the assets of Mrs. Kumra that have been raised by the parties in these proceedings.” I accept that Justice McEwen’s Order, being an interim order, is of no effect following the Judgment. However, it explains why the two properties would not have been referenced directly in the management plan, which was prepared prior to the Judgment that disposed of Sanjiv’s application. The Order also alludes to the fact that a guardian appointed to manage Mrs. Kumra’s property should not be bound by any agreement between Sanjiv and Rajiv that affects her property.
54Notwithstanding that the management plan does not, and, based on Justice McEwen’s Order, could not, refer to the two properties, there is scope for some investigation of these assets by the guardian under paragraph G of the management plan entitled “Accounts Receivable.” There, the guardian describes the accounts receivable as “to be determined” and its plan includes the investigation of any accounts receivable to determine whether any proceeding needs to be commenced to recover these amounts.
55For the foregoing reasons, I find that Scotiatrust is not bound by the Minutes. Neither Scotiatrust, nor Mrs. Kumra, nor anyone acting on her behalf is a party to the Minutes. Mrs. Kumra had no legal representative with authority to protect her rights and interests during the mediation or the negotiation of the Minutes that followed. Neither she, nor anyone on her behalf, agreed to the Minutes, and in particular the terms in paragraph 7, which could have the effect of circumscribing her property rights and her ability to pursue claims with respect to her property. The Minutes cannot, therefore, be binding on her or Scotiatrust as her guardian of property. Scotiatrust, as guardian, must carry out its duties as prescribed by the SDA. Subsection 32(1) of that Act provides that “A guardian of property is a fiduciary whose powers and duties shall be exercised and performed diligently, with honesty and integrity and in good faith, for the incapable person’s benefit.”
56The Judgment is clear that it is Sanjiv and Rajiv, being the parties to the Minutes, who must abide by them. Scotiatrust, qua guardian, is ordered to act in compliance with the management plan. Pursuant to s. 25 (2) (c) of the SDA, an order appointing a guardian may impose conditions on the appointment. The Judgment imposes no such conditions on the appointment of Scotiatrust, including any condition that it abide by the Minutes.
57Having concluded that the Minutes are not binding on Scotiatrust, as guardian, I do not need to determine the effect of paragraph 7 of the Minutes on Scotiatrust. It remains within the discretion of Scotiatrust to decide whether it would be in Mrs. Kumra’s best interests to pursue any claim, on her behalf, regarding the 2017 property transfers.
Costs
58I am satisfied that Scotiatrust made reasonable efforts to resolve the dispute between Sanjiv and Rajiv relating to paragraph 7 of the Minutes before bringing this motion. It was unsuccessful in its efforts and this motion became necessary. Generally, fiduciaries are entitled to be fully indemnified for all proper charges incurred in the exercise of their duty, provided the charges are reasonably incurred: Villa v. Villa, 2013 ONSC 2202, 89 E.T.R. (3d) 48, at para. 35; Brown v. Rigsby, 2016 ONCA 521, 350 O.A.C. 236, at para 14.
59I have reviewed the Bill of Costs submitted by Scotiatrust. It seeks costs of this motion, on a full indemnity basis, of $81,397.77, inclusive of disbursements and HST, payable from Mrs. Kumra’s property. I find these costs to have been reasonably incurred and that the guardian has not acted unreasonably or in its own self-interest. Accordingly, an award of costs on a full indemnity basis is appropriate. I fix the costs of Scotiatrust at $81,397.77 payable from Mrs. Kumra’s property.
60Sanjiv and Rajiv have agreed that, as between themselves, the successful party shall be entitled to costs of $25,000. Sanjiv was successful on the motion. I fix his costs at $25,000, inclusive of disbursements and HST. These fees shall be paid out of Mrs. Kumra’s property as agreed by Sanjiv and Rajiv in the Minutes.
Dietrich J.
Released: March 19, 2020