Shady Saleh v. Mohammed Salehe et al, 2020 ONSC 5631

Court File and Parties

Court File No.: CV-20-83319 Superior Court of Justice – Ontario

Re: Shady Saleh in his capacity as Power of Attorney for Property of Aiche Saleh, Plaintiff And: Mohammed Salehe, Aiche Saleh and Ottawa Police Credit Union, Defendants

Before: Master Kaufman

Counsel: Raymond Murray / Caitlin Cardill, for the Plaintiff Dave Morin-Pelletier, for the Defendant Mohammed Salehe Rolland Hedges, for the Defendant Ottawa Police Credit Union

Heard: In writing

Reasons for Decision

1The plaintiff Shady Saleh (“Shady”) brings this motion to amend his statement of claim. Whether the proposed amendment should be allowed turns on whether Shady is an appropriate litigation guardian for his mother, Aiche Saleh (“Aiche”). The defendant Mohammed Salehe (“Mohammed”) is the plaintiff’s older brother. He argues that Shady is not an appropriate litigation guardian because he is not indifferent as to the outcome of the litigation and because there is an acrimonious relationship between them.

Background

2Shady commenced this action on April 8, 2020 in his capacity as Power of Attorney for Property for Aiche. The defendants are his brother Mohammed, his mother Aiche and the Ottawa Police Credit Union (“OPCU”).

3Shady alleges that Mohammed misappropriated his mother’s home at 49 Oakridge Avenue (“Oakridge Avenue home”) through a fraudulent Power of Attorney document, and that he encumbered the title to this property with a mortgage in favour of the OPCU. As against his mother, he seeks a declaration that she was incapable of managing property or personal care.

4Shortly after commencing the action, Shady brought a motion for leave to issue a certificate of pending litigation. He served the Public Guardian and Trustee (“PGT”) with the statement of claim and his motion record. The PGT responded that it would not participate in this proceeding and that Aiche appeared to be a party under disability who required a litigation guardian. Finally, the PGT was of the view that Aiche should have been named a plaintiff in this proceeding.

5Shady’s motion to amend the statement of claim aims to give effect to the PGT’s recommendations. The proposed amended statement of claim removes Aiche as a defendant and adds her as plaintiff. The amended style of cause describes Shady as Aiche’s litigation guardian. The proposed claim does not raise any new causes of actions and is based on the same material facts.

6This motion raises the following issues:

1. Is Aiche a party under disability requiring a litigation guardian?
2. If the answer is yes, is Shady an appropriate litigation guardian?

1- Aiche requires a litigation guardian

7A person “under disability” requires a litigation guardian to commence a proceeding.¹ The term “disability” is defined in r. 1.03(1), and it includes a person who is “mentally incapable within the meaning of section 6 … of the Substitute Decisions Act, 1992”.² Pursuant to that section, a person is incapable of managing property if he or she is unable to understand information that is relevant to making a decision in the management of his or her property, or is unable to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

8Aiche is a 75-year-old widow. She married her husband Kassem after immigrating from Lebanon, and the couple had six children. Aiche’s cognitive functions began declining after Kassam passed away in February 2016. Her cognitive functions deteriorated sharply in late 2018 to early 2019. She was diagnosed with dementia in July of 2019. By then, she could not remember her children’s names or her place of birth, she was prone to violent outbursts and she had wondered out of her home unaccompanied twice. In July of 2019, her children made the difficult decision to place her in a long-term care facility, where she presently receives 24-hour care. Mohammed Salehe was the only one of Aiche’s children opposed to placing her in a long-term care facility.

9The parties agree that Aiche is under disability, but the parties’ agreement is not binding on the Court. Rule 7’s safeguards are designed to protect not only the person under a disability, but also the integrity of the judicial process.³

10Here, the evidentiary record satisfies the Court that Aiche is a party under disability. The Court agrees that she is incapable of managing property based on the affidavits of Shady Saleh, Linda Saleh and Mariam Brisson; the Royal Ottawa Geriatric Services’ referral letter of May 16, 2019; the assessment report of April Stapleton, O.T., dated July 5, 2019; and Dr. Laplante’s letter of June 3, 2020, which confirms Aiche’s diagnosis of dementia and that she is not competent to participate in court proceedings.

2 - Shady is an appropriate litigation guardian

11Rule 26.01 provides that the Court shall grant leave to amend a pleading on such terms as are just unless prejudice would result that cannot be compensated for by costs or an adjournment. The plaintiff requires leave of the Court because pleadings have closed and because the proposed amendment necessitates the addition, deletion or substitution of a party to the action.⁴ Rule 26.01 is mandatory: the amendment must be permitted even where prejudice would result, unless the prejudice cannot be compensated for by costs or an adjournment. The right to amend a pleading, however, is not absolute. The Court is entitled to inquire if the proposed amendment complies with the rules of pleading.⁵ Moreover, “[n]o amendment should be allowed which, if originally pleaded, would have been struck”.⁶

12Mohammed argues that the only issue in this motion is the plaintiff’s conformity with r. 7.02(2). Accordingly, the proposed amendments should be allowed if they comply with this rule and if they would survive a motion to remove Shady as a litigation guardian under r. 7.06(2). This issue turns on whether Shady is “indifferent” as to the result of the proceeding and whether there is disqualifying level of acrimony between the parties.

a) Indifference as to the result of the proceeding

13On February 8, 2018, Aiche appointed Shady to be her attorney for property under a Continuing Power of Attorney for Property. It specifically provides that Shady shall have the authority to act as her litigation guardian to commence court proceedings. Mohammed argues that Shady cannot act as a litigation guardian because he has a vested interest in the outcome of the litigation.

14Rule 7.02(2) requires a proposed litigation guardian to state in an affidavit that he or she has no interest in the proceeding adverse to that of the person under disability. Shady has complied with this requirement. Moreover, r. 7.02(1.1) provides a presumptive right – “[u]nless the court orders otherwise” – for an incapable person’s guardian or attorney under a power of attorney to act as the person’s litigation guardian. Shady’s proposed amendment therefore complies with r. 7.02(2).

15Because it would be inefficient to allow the amendment only to have Mohammed bring a motion to remove Shady as a litigation guardian, it becomes necessary to consider r. 7.06(2). This rule provides that the court may remove and substitute a litigation guardian where it appears that the litigation guardian is not acting in the best interests of the party under disability.

16To be acting in the “best interests” of the party under disability, a litigation guardian must be “indifferent” as to the result of the proceeding.⁷ Indifference in this context has been interpreted to mean the absence of a conflict of interest vis-à-vis the party under disability. A litigation guardian must be able to provide “a neutral, unbiased assessment of the legal situation” and to offer “an unclouded opinion as to the appropriate course of action”.⁸ There is no conflict of interest where both the litigation guardian and the dependent adult have the same interests.⁹ Rule 7.03(1)(i)(iii) does not require that “the proposed litigation guardian have no interest in the proceeding”; it only requires that she have “no interest adverse to that of the party under disability”.¹⁰ More than a perception of a “conflict of interest” is required to disqualify or remove a person from being a litigation guardian – actual conduct or misconduct is required.¹¹

17To understand the parties’ arguments, it is necessary to briefly outline their respective allegations. Shady contends that his parents purchased the Oakridge Avenue home in 1996 under Mohammed’s name because they were unable to obtain credit at that time. He alleges that it was implicit that he held title in trust for his parents. His parents made all the mortgage payments and paid all the expenses relating to the home. Shady alleges that Mohammed gave mortgages to several financial institutions between 2001 and 2019, and that on May 16, 2019 he transferred the title to the Oakridge Avenue home to himself as sole owner using a fraudulent power of attorney document dated January 20, 2013.

18Mohammed disputes these facts. He alleges that he purchased the Oakridge Avenue home as an investment which allowed him to provide affordable housing to his parents. He claims that, with his parents’ consent, he mortgaged the Oakridge Avenue home in 2013 to obtain funds for another real estate investment. In 2019, Mohammed separated from his wife and obtained a second mortgage on the Oakridge Avenue home to meet his financial obligations under the divorce. In order to obtain that mortgage, he was required to be the sole owner on title, and he used a Power of Attorney document dated January 20, 2013 to transfer the title to the property in his name.

19Under the terms of Aiche’s will, Mohammed would not share in the residue of her estate if he asserted a beneficial interest in the Oakridge Avenue home. Mohammed disputes the validity of Aiche’s will and of Shady’s Continuing Power of Attorney for Property. He claims that Aiche was incompetent at the time she signed these documents.

20Mohammed argues that Shady is in a conflict of interest because he would benefit more under Aiche’s will if his action was successful. If Mohammed had no interest in the Oakridge Avenue home, Shady’s share of Aiche’s estate would accordingly increase. Mohammed says that this interest disqualifies Shady from acting as a litigation guardian.

21I reject this argument for the following reasons. Firstly, the criterion of “indifference” requires that there be no conflict of interest with the person under disability.¹² The evidence suggests that the Oakville Avenue home is Aiche’s most valuable asset. Her other significant asset is a bank account which holds approximately $40,000, which will not cover the costs of her long-term care home forever. If, as Shady alleges, Mohammed misappropriated Aiche’s home, an action to set that transaction aside would be in Aiche’s interest. If the action is ill-founded, then Shady may be liable to pay costs of the action personally.

22Secondly, the fact that Shady stands to inherit more if the action was successful does not mean that his financial interests are adverse to Aiche’s. There is no prohibition against litigation guardians having an interest in a proceeding; the law simply requires them not to have interests adverse to those of a party under disability.¹³ I am satisfied that there is no adversity of interests here. I should also add that the nature of Shady’s financial interest if this action were successful (one fourth of the residue of Aiche’s modest estate versus one fifth) does not raise any concerns about Shady’s ability to provide a neutral assessment of the litigation and promote Aiche’s interests.

b) Acrimony

23Where there is “a particularly acrimonious and long-standing dispute” among the children concerning their parent’s estate, the indifference required to be a litigation guardian may be lacking.¹⁴ Mohammed argues that the relationship with his brother is acrimonious and conflictual. He points to the allegations being made in this proceeding, and the fact that he is challenging Shady’s Continuing Power of Attorney and Aiche’s will, as evidence of great acrimony and conflict.

24The level of acrimony required to disqualify a litigation guardian must be such that it could hinder a prospective guardian’s ability to provide the party under disability a neutral, unbiased assessment of the legal situation and objective advice. In Fischer (Litigation guardian of) v. Balofsky, for example, the defendant in a personal injury action was the plaintiff’s father, and the plaintiff’s mother was his litigation guardian. At the same time, the mother and father were involved in a highly acrimonious family law action. The Court held that the level of acrimony was such that the mother “might well, consciously or unconsciously, not be as objective as she should be with respect to decisions that arise in the course of the litigation”.¹⁵

25In Shemesh v. Goldlist, this Court set aside an Order removing a litigation guardian which was premised on a high level of conflict, distrust and anger between the parties. The Court found that a high level of distrust between the parties does not mean that the litigation guardian could not act in the best interest of the party under disability.¹⁶

26I am not persuaded that the level of acrimony or conflict in this case affects Shady’s ability to perform his litigation guardian duties in Aiche’s best interests. The evidence before the Court demonstrates that Shady, Mohammed and their siblings have cooperated with each other when making decisions about Aiche’s care and her estate planning. Mohammed was invited to participate in these discussions, although he chose not to attend the meeting regarding Aiche’s placement in a home, and a scheduling conflict prevented him from attending the meeting with Aiche’s estate lawyer. The discussions between the siblings were always respectful and centered on Aiche’s best interests.

27Moreover, I find that there is not “a particularly acrimonious and long-standing dispute” between the parties.¹⁷ Litigation between close family members will naturally generate feelings of resentment, deception and betrayal. A certain level of discord is inherent in the litigation process. Acrimony will only disqualify a litigation guardian when it interferes with the litigation guardian’s ability to act in the person under disability’s best interests. The evidence in this case does not rise to that level. There is no evidence of conflict between Shady and Mohammed before this litigation, and the conflict Mohammed relies upon to disqualify Shady stems from the subject matter of this litigation as opposed to some other unrelated and long-standing matter, as was the case in Fischer for example.

Disposition

28For the foregoing reasons, the plaintiff’s motion is allowed. If the parties are unable to agree on costs, I will entertain submissions in writing. Counsel may obtain further directions on costs submissions from my office within 30 days should that be necessary.

Master Kaufman

Footnotes

1. 1Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 7.01(1).
2. 2Substitute Decisions Act, 1992, S.O. 1992, c. 30.
3. 3626381 Ontario Ltd. v. Kagan, Shastri, 2013 ONSC 4114, 116 O.R. (3d) 202, at para. 17.
4. 4Rules of Civil Procedure, rr. 26.02(a), 26.02(c).
5. 5Brookfield Financial Real Estate Group Limited v. Azorim Canada (Adelaide Street) Inc., 2012 ONSC 3818, 111 O.R. (3d) 580, at para. 23.
6. 6Marks v. Ottawa (City), 2011 ONCA 248, 280 O.A.C. 251, at para. 19.
7. 7Gronnerud (Litigation Guardians of) v. Gronnerud Estate, 2002 SCC 38, [2002] 2 S.C.R. 417, at paras. 18, 20 (“Gronnerud”).
8. 8Gronnerud, at para. 20.
9. 9Chow v. Law (2007), 32 E.T.R. (3d) 142 (Ont. S.C.), at para. 51.
10. 10Zabawskyj v. Zabawskyj (2008), 2008 CanLII 19248 (ON SC), 55 R.F.L. (6th) 36 (Ont. S.C.), at para. 30 (“Zabawskyj”) [emphasis in original].
11. 11See Shemesh v. Goldlist, 2008 CanLII 19228 (Ont. S.C.), at para. 37.
12. 12Gronnerud, at para. 20.
13. 13Zabawskyj, at para. 30.
14. 14Gronnerud, at para. 21.
15. 15Fischer (Litigation guardian of) v. Balofsky, [2005] O.J. No. 2152 (S.C.), at para. 8.
16. 16Shemesh v. Goldlist, at para. 38.
17. 17Gronnerud, at para. 21.