COURT FILE NO.: CV-19-00000248-0000

DATE: 20200923

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY McQUEEN

Applicant

– and –

DAVID WAYNE McQUEEN, LEONA MARY MARGARET McQUEEN, THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE, and SHERRY KINGSTON, in her personal capacity and in her capacity as Leona Mary Margaret McQueen’s attorney for property

Respondents

Paul G. Andrews, for the Applicant

James McCarthy, for the Respondent, Sherry Kingston

HEARD at Kingston: 22 July 2020, by videoconference

MEW J.

REASONS FOR DECISION

[1] Several motions have been brought within an application commenced by Gary McQueen. He is the son of the first named respondent, David Wayne McQueen.

[2] David McQueen is married to the respondent, Leona Mary Margaret McQueen (“Margaret McQueen”). She is not the mother of the applicant or his siblings. Until last year, Margaret McQueen and David McQueen jointly owned and occupied a residence located on Wycliffe Crescent in Kingston.

[3] In May 2015, David Wayne McQueen executed powers of attorney for personal care and for property, naming Margaret McQueen as his attorney.

[4] David McQueen is currently 74 years old. Commencing in late 2017, the applicant and his siblings became aware that David McQueen’s ability to manage his own personal care and property had declined significantly.

[5] At around that time, the applicant’s sister, Patricia Amorim, began to assist David McQueen with basic financial tasks.

[6] Certain concerns arose with respect to the management by Margaret McQueen of the financial interests of David McQueen.

[7] In March 2018, David McQueen underwent a geriatric psychiatry assessment and was found to be suffering from a dementing illness, thought to be of mixed etiology, with possible Alzheimer’s, dementia, vascular dementia and effects of prior alcohol abuse. The treating physician concluded that David McQueen lacked the capacity to make financial decisions and also personal care decisions.

[8] The family’s concerns about Margaret McQueen’s care of her husband continued. They suspected that she might not be acting in his best interests. Accordingly, they retained a lawyer who, on 13 February 2019, wrote to Margaret McQueen asking whether she was prepared to renounce her role as attorney for property and attorney for personal care, and asking that a needs-assessment be performed to determine David McQueen’s care requirements, and demanding an accounting from Margaret McQueen’s conduct as attorney for property. No response was received.

[9] Soon after that letter was sent, the applicant and his siblings learned that Margaret McQueen was attempting to market the Wycliffe Crescent home. Another lawyer’s letter was sent asking Margaret McQueen to have David McQueen’s capacity to enter into such a transaction assessed.

[10] On 19 April 2019, David McQueen was moved into a retirement residence.

[11] In May 2019, the applicant became aware that $50,000 had been withdrawn from his father’s solely held bank account. A review of David McQueen’s bank statements also disclosed a number of material transactions that confirmed a pattern of purchases or withdrawals which were inconsistent with David McQueen’s needs.

[12] Further letters to Margaret McQueen concerning David McQueen’s living arrangements, requesting an accounting for her activities as attorney for property, and seeking confirmation that the jointly owned home would only be sold with proceedings being allocated between Margaret McQueen and the applicant’s father, went unanswered.

[13] There were, by this time, “For Sale” signs on the lawn on the Wycliffe Crescent home. As of 9 July 2019, a search of the Teraview system revealed that the house had been sold, but the transaction had not yet closed.

[14] On 12 July 2019, the applicant commenced the current proceeding seeking amongst other things, orders terminating any and all powers of attorney for personal care and for property granted by David McQueen, and appointing the applicant as guardian of the person and of the property for David McQueen; requiring Margaret McQueen to provide a detailed accounting of her activities as David McQueen’s attorney for property; and for the proceeds of the sale of the Wycliffe Crescent residence to be held in trust.

[15] It turned out that the Wycliffe Crescent house had already been sold on 4 July 2019 for $235,000 and that at least $50,000 had been withdrawn by Margaret McQueen from David McQueen’s solely held bank account.

[16] The application was heard on 5 September 2019. Margaret McQueen did not file a notice of appearance or attend.

[17] Abrams J. granted the relief sought by the applicant, including giving the applicant leave to bring such motions as might be required, or to obtain further directions from the court in respect of matters relating to David McQueen. A tracing order was also made permitting the applicant to trace any monies fraudulently or otherwise obtained by Margaret McQueen.

[18] On 19 December 2019, Margaret McQueen unsuccessfully attempted to have the judgment of Abrams J. set aside on the basis that she had not been properly served with the application.

[19] By Notice of Motion dated 7 January 2020, the applicant sought directions with respect to the enforcement of the 5 September 2019 judgment. To that point, there had been no compliance by Margaret McQueen and, in particular, no accounting from her for the proceeds of sale of the Wycliffe Crescent home or the monies removed from David McQueen’s bank account.

[20] On 23 January 2020, Tausendfreund J. found Margaret McQueen to be in contempt of the judgment of Abrams J. The matter was put over until 20 February.

[21] The order of Tausendfreund J. dated 23 January 2020 also required Margaret McQueen to immediately disclose to the applicant all of David McQueen’s funds, assets or other property and, in particular, what had become of the $50,000 that had been withdrawn by Margaret McQueen from the account of David McQueen in May 2019 and the proceeds of sale of the Wycliffe Crescent residence. Margaret McQueen was further ordered to return any personal property or money belonging to David McQueen and, specifically, to pay $160,788 to the applicant, to be held in trust.

[22] Margaret McQueen did not appear on 20 February 2020. MacLeod-Beliveau J. made an order entitling the applicant to compel production of any banking or other financial records in Margaret McQueen’s name, whether such accounts were held solely or jointly with any other person as well as to compel production of financial records from any other persons, banks, trust companies or financial institutions relating to the destination of payments, transfer or withdrawals made by from the monies held in any accounts in the name of Margaret McQueen, whether held solely or jointly with other persons. The order also provided that if there were any funds on deposit in the name of Margaret McQueen (whether held solely or jointly), such funds would be forfeited up to a maximum of $166,288, the forfeited funds to be paid into trust.

[23] The applicant already knew by this time that a bank draft in the amount of $50,000, payable to Margaret McQueen, had been drawn on David McQueen’s sole bank account in May 2019. It was also known that a cheque representing the net proceeds of sale of the Wycliffe Crescent home for $221,576.74 payable to “David & Margaret McQueen” had been received and deposited. As a result of the order of MacLeod-Beliveau J. dated 20 February 2020, the applicant ascertained that a joint bank account in the name of Margaret McQueen and her daughter, Sherry Kingston, had been funded by the $50,000 taken from David McQueen’s solely held account and the $221,576.74 from the proceeds of the Wycliffe Crescent home.

[24] Following this revelation, on 27 February 2020, the applicant obtained an ex parte order from MacLeod-Beliveau J. adding Sherry Kingston as a party to the application and providing that the order previously made by Tausendfreund J. requiring Margaret McQueen to pay $160,788 to the applicant as attorney for property for David McQueen, by way of restitution, should be enforceable as against Sherry Kingston. The order further provided that if there were any funds on deposit in an account held in the name of Sherry Kingston, whether solely or jointly with any other person, such funds should be immediately forfeited up to a maximum of $168,788.

[25] As a result of this further order of MacLeod-Beliveau J. dated 27 February 2020, the applicant seized a total of $60,082.21 from Sherry Kingston’s bank accounts.

[26] A total of $52,082.21 is currently being held in trust by the applicant’s solicitors, pending further order of this court.

[27] Sherry Kingston contests any impropriety on her part. She questions how she could be made subject to an existing order against Margaret McQueen by virtue of having been added as a party to the proceeding without notice, and without having had any opportunity to be heard and she asserts that in the days immediately prior to her accounts being frozen, she deposited several cheques totalling $65,554.73 to her personal bank account, representing payments made to her resulting from the settlement of a Workplace Safety and Insurance Board (“WSIB”) claim.

[28] Ms. Kingston has brought motions seeking the setting aside of MacLeod-Beliveau J.’s order of 27 February 2020 and challenging the seizure of funds paid by way of WSIB payments as being prohibited pursuant to the Wages Act, R.S.O. 1990, c. W.1.

Issues

[29] The questions raised on the motions before me are:

(a) Should the monies in Ms. Kingston’s account that represents deposits of WSIB payments be returned to her on the basis that the seizure of such funds was contrary to the Wages Act?

(b) If any ruling made under the Wages Act does not result in the entire amount seized from Ms. Kingston’s account, should the order of MacLeod-Beliveau J. dated 27 February 2020 be varied or set aside?

(c) If it is determined that the order of MacLeod-Beliveau J. should be varied, upon what terms?

The Wages Act Issue

[30] I will deal with this issue first, because if Ms. Kingston is entitled to recover the seized amounts, the motion to vary or set aside the order of MacLeod-Beliveau J. would become academic.

[31] Sherry Kingston argues that the majority of the funds in her account were exempt from seizure by virtue of the Wages Act. Her evidence is that beginning on 21 February 2020, and thereafter over the course of several days, she deposited several cheques totalling $65,554.73 in her personal bank account. These deposits represented the conclusion of an ongoing case file with the WSIB. Her other source of income at this time appears to be a disability pension from the Canada Pension Plan (she was previously receiving Ontario Disability Support Program payments, although I understand from her affidavit that these have now concluded).

[32] Ms. Kingston says that she is the principal carer for her husband, who recently underwent the amputation of a foot, as well as her two grandchildren, age 10 and 12. She asserts that the seizure of funds is causing her significant hardship as she is without other regular sources of income. Section 7 of the Wages Act deals with the garnishment of wages and, by ss. 2, provides that 80% of a person’s wages are exempt from seizure or garnishment. By virtue of ss. 1.1, payments from an insurance or an indemnity scheme that are intended to replace income lost because of disability shall be deemed to be wages, whether such scheme is administered by the employer or other person.

[33] The applicant brings what is, effectively, a cross motion, asking the court to exercise its discretion to order that the exemption set out in ss. 2 should be decreased. The court has such a discretion if a judge “is satisfied that it is just to do so, having regard to the nature of the debt owed to the creditor, the person’s financial circumstances and any other matter the judge considers relevant”.

[34] The applicant points to the significant dissipation of assets by Ms. Kingston and her mother.

[35] The evidentiary record discloses that $21,800 was transferred from an account which was jointly held between Margaret McQueen and Sherry Kingston to Sherry Kingston’s solely held account between May and November 2019. A further $53,200 was transferred into Ms. Kingston’s prepaid credit card account during the same period. In July 2019, Ms. Kingston purchased a vehicle for $48,134.71 and, during this time period, $48,150 was withdrawn from ATM machines and e-transfers totalling $10,100 to persons believed by the applicant to be related to Ms. Kingston, including her husband and daughter. In summary, the applicant argues that there is evidence that, since May 2019, Ms. Kingston and/or her family members have enjoyed the benefit of $133,484.71.

[36] In response to the applicant’s allegations, Ms. Kingston asserts that the cash withdrawals were made on Margaret McQueen’s instructions and stored in a lock box on Margaret McQueen’s behalf. However, Ms. Kingston’s brother, Randolph Whan, who now holds power of attorney for property in respect of Margaret McQueen, has made his own investigations with the bank, and has discovered no such lock box.

[37] Ms. Kingston also claims that Margaret McQueen asked her to open the joint account to facilitate the payment of certain bills. The applicant says that this statement is impossible to reconcile with the fact that, with only one exception, the funds withdrawn were for round numbers, the sole exception being the purchase of the vehicle.

[38] Despite bald denials by Sherry Kingston of any wrongdoing on her part, or having knowledge of wrongdoing on part of Margaret McQueen, there is essentially no explanation for the impugned transactions other than those alleged by the applicant.

[39] Aside and apart from the alleged diminution and misuse of David McQueen’s funds, what the transactional records do show is that significant amounts of money have flowed through Sherry Kingston’s hands. This makes it difficult if not impossible to accept her plea of hardship arising from the seizure of the funds that were in her bank account at the time that MacLeod-Beliveau J.’s order was executed.

[40] The jurisprudence does not provide a great deal of guidance with respect to the exercise of the discretion afforded by s. 7(4) of the Wages Act.

[41] In Dhaliwal v. Ontario (Ministry of Health and Long-Term Care), 2002 7799 (ON SC), at para. 14, Cullity J. explained the role of the court in these terms:

The role of the court, as I see it, is to strike a balance between the interests of the creditors in obtaining an expeditious payment in full of the amounts owed to them and the ability of debtors to continue to earn money that will be used to discharge their debts, and to support themselves and their dependants.

[42] At para. 13 of Dhaliwal, the court indicated that in determining whether the 80% exemption should be reduced, the court is permitted to have regard to the “nature of the debt owed to the creditor”.

[43] Ms. Kingston is evidently in receipt of a monthly CPP pension. But beyond the very generalised statements that Ms. Kingston has made about her responsibilities to support her grandchildren and her husband, she provides very little information about her finances.

[44] There is, to my mind, an important distinction between the monies that were seized from Ms. Kingston’s bank account and income that she continues to receive on an ongoing basis.

[45] There are very strong prima facie grounds to support the applicant’s contention that Ms. Kingston has been associated with serious financial improprieties to the detriment of David McQueen. While, as I will explain later on in these reasons, I am of the view that Ms. Kingston needs to be given a better opportunity to account for her role in these transactions, in the face of the evidence that presently sits in the record, if the Wages Act is, in fact, applicable to the seizure of funds pursuant to the order of MacLeod-Beliveau J., I would exercise my discretion under s. 7(4) to reduce to 0% the exemption of such funds from seizure. That said, of course, the funds have not been placed wholly beyond the reach of Ms. Kingston at this stage, because they remain in trust, pending further order of this court.

[46] I take a different view with respect to “wages” (as that term is defined in the Wages Act, and, consequently, including payments from an insurance or indemnity scheme intended to replace income lost because of disability) which Ms. Kingston has received, or would have been entitled to receive, since her personal bank account was frozen. I would exercise my discretion to direct that 80% of such payments should not be the subject of seizure or interception by the applicant pursuant to MacLeod-Beliveau J.’s order. This is because Ms. Kingston finds herself in the unusual situation of being a judgment-debtor as a result of a decision rendered in this proceeding at a time when Ms. Kingston was not even a party and, hence, had no opportunity to influence the outcome. Releasing any part of the lump sum payments made to Ms. Kingston and subsequently seized pursuant to the 27 February order, might end any hope the applicant has of recovering what is said to have been wrongly taken from David McQueen. Furthermore, those funds were validly seized by virtue of the order of MacLeod-Beliveau J., pending further order of this court. And, as I will explain below, Ms. Kingston bears the burden of satisfying the court that a different order should be made. On the other hand, allowing Ms. Kingston to receive the modest ongoing payments due to her as “wages” pending resolution of her claim to have the other funds returned to her, would mean that she is not entirely deprived of some ongoing income. In my view this strikes an appropriate balance between the interests of the parties.

[47] To summarise, Ms. Kingston’s motion pursuant to the Wages Act for the return of some or all of the funds already seized from her account is denied. However, I also declare that, pending any further order from the court to the contrary, 80% of any further monies due to Ms. Kingston that are properly characterised as “wages” within the meaning of the Wages Act are exempt from seizure pursuant to the order of MacLeod-Beliveau J. dated 27 February 2020.

[48] If there is a dispute about what funds are exempt from seizure, or if further directions arising from these reasons are required, I may be spoken to.

[49] For the avoidance of doubt, any further amounts that are properly seized pursuant to the 27 February 2020 order, as varied by this decision, shall be paid into trust pending further order of the court.

Setting Aside or Varying MacLeod-Beliveau’s J. Order

[50] As I have already indicated, the circumstances are very unusual. There was already a judgment, rendered by Abrams J. ordering the returned by Margaret McQueen to David McQueen’s attorney for property of any personal property or money belonging to David McQueen. Then in January 2020, Tausendfreund J. ordered Margaret McQueen to pay $160,788 in trust to the applicant in his capacity as David McQueen’s guardian of property. The 27 February 2020 order of MacLeod-Beliveau J. brought Sherry Kingston into the litigation as a party and made the order of Tausendfreund J. requiring Margaret McQueen to pay $160,788 to David McQueen enforceable against Sherry Kingston in her personal capacity. The same order provided for the forfeiting of any funds held in a bank account in the name of Sherry Kingston.

[51] The circumstances are analogous to a freezing order (often referred to as a “Mareva” injunction after Mareva Compania Naviera S.A. v. International Bulkcarriers S.A., [1980] 1 All E.R. 213 (C.A.)).

[52] When such orders are obtained, the party applying for the freezing order is required, inter alia, to make full and frank disclosure of all matters known to the applicant which are material to the relief being sought, to demonstrate a strong prima facie case and to satisfy the court that there are assets in the jurisdiction in respect of which, if the order is not granted, there is a serious risk of removal of dissipation.

[53] A key element of the freezing order process, in addition to the requirement for the applicant to make full disclosure, is that such orders are typically made for a limited period of time, following which there is a further hearing, in which the responding party is a participant, to determine whether the freezing order should be maintained, set aside or varied.

[54] The applicant takes the position that the order of MacLeod-Beliveau J. should be presumed to have been correctly made unless the responding party, in this case Ms. Kingston, adduces evidence to show that a different disposition should have been made. Ms. Kingston, on the other hand, says that the freezing order analogy breaks down because this is not a situation where an order has been sought at an early stage of the litigation as, effectively, a form of pre-judgment execution, but rather one where she has been bolted on to an existing judgment which has already been made on its merits without any opportunity on her part to influence that judgment. She argues that she should be entitled to have a full trial on the merits of the claim against her.

[55] I should add that Ms. Kingston also argued that this court should exercise its discretion under Rule 37.14 to set aside the order of MacLeod-Beliveau J. on the basis that the court was functus officio and, thus, not able to reopen a proceeding after judgment had been rendered by Abrams J. and entered. I disagree. MacLeod-Beliveau J. was not functus officio when she made her 27 February 2020 order. The judgment of Abrams J. expressly anticipated and authorised the tracing of funds and the rendering of an accounting by Margaret McQueen and the possible need for further orders of the court to give effect to those remedies.

[56] I do, however, have more sympathy with Ms. Kingston’s position that she should be afforded an opportunity to fully address the allegations made against her by the applicant. The applicant says that the return of this motion was Ms. Kingston’s opportunity. The difficulty I have with that position is that the current proceeding is an application which was initiated for the purposes of protecting the interests of David McQueen. As a result of the tracing order and the discovery of Ms. Kingston’s involvement, the application has evolved into something which is highly contentious, in terms of the improprieties alleged. Ms. Kingston is accused of being complicit in serious acts of dishonesty and elder abuse. She should be given a full opportunity to respond to those allegations.

[57] As noted in my discussion concerning the application of the Wages Act, Ms. Kingston has, to date, put forward very little to adequately explain her role. Furthermore, I would observe that, for some period of time at least, Sherry Kingston was Margaret McQueen’s power of attorney (or at least purported to be). As such, she might well have had an opportunity to affect a response to the order requiring Margaret McQueen to account for the transactions involving David McQueen’s money and property. In short, Sherry Kingston has done very little so far to rebut the strong prima facie case which was been made out by the applicant to the satisfaction of MacLeod-Beliveau J. In such circumstances, I see no basis to interfere with that part of the order of MacLeod-Beliveau J. which requires the funds seized to be held in trust pending further order of the court.

[58] I pause to note that, by agreement of the parties, there has already been an order permitting a payment to be made out of the seized funds of an amount to compensate the lawyers who represented Ms. Kingston in her claim (which included an appeal) against the WSIB.

[59] I am, however, prepared to make further orders which have the effect of varying the order of MacLeod-Beliveau J. to:

(a) permit Ms. Kingston to operate a bank account for the limited purpose of receiving “wages” and any other state benefits payable to her and disbursing funds from that account; and

(b) providing an opportunity for a trial of the issue of whether a judgment should be maintained against Ms. Kingston for the amount of $168,788 as provided for in para. 3 of the order of MacLeod-Beliveau J. dated 27 February 2020 and, depending on the determination of that issue, whether any portion of the funds seized from Sherry Kingston’s account and held in trust for the applicant David McQueen should be released to the applicant or returned to Ms. Kingston.

Further Directions

[60] As just indicated above, Sherry Kingston should be able to open and maintain one bank account to receive income by way of wages and other state benefits and to make withdrawals or payments from that account. Pending any further variation of that arrangement or other order of this court, the order of MacLeod-Beliveau J. freezing the accounts of Sherry Kingston, whether held solely or jointly with other persons, shall remain in force.

[61] On the issue of whether Sherry Kingston should be subject to the order for forfeiture of up to a maximum of $168,788, by virtue of the combined effect of para. 8 of the order of Tausendfreund J. dated 23 January 2020 and para. 3 of the order of MacLeod-Beliveau J. dated 27 February 2020, and pursuant to the authority provided to the court by Rule 38.10(1)(b) of the Rules of Civil Procedure, I order that there should be a trial of that issue and give the following directions with respect to such trial:

(a) Any or all of the affidavits filed in this application may be filed as evidence at the trial of the issue;

(b) The applicant and Ms. Kingston are at liberty to file, by way of affidavit, by no later than 30 October 2020, any additional evidence which they wish to adduce. Such affidavits shall also stand as the evidence in chief of those witnesses at the trial of the issue;

(c) The parties shall be at liberty to file additional affidavits, but confined to responding to matters raised in additional affidavits which have been filed by virtue of subparagraph (b). Such reply affidavits (if any) are to be served and filed by no later than 16 November 2020;

(d) The deponent of any affidavit filed in accordance with these directions may be cross-examined at the trial of the issue;

(e) If a party wishes to call a witness at the trial of an issue, but is unable, despite reasonable efforts, to obtain an affidavit from such witness, the witness may be summoned and examined as a witness in the usual way;

(f) The applicant and Ms. Kingston shall each, by 16 October 2020, file an affidavit of documents conforming with Rule 30 of the Rules of Civil Procedure;

(g) The parties to the trial of the issue will not, without further leave of the court, be entitled to rely on any document at the trial of the issue which has not been disclosed in the affidavit of documents or the affidavit of a witness;

(h) There will be no examinations for discovery without leave of the court;

(i) The trial coordinator will schedule a judicial pretrial conference to be heard no sooner than 30 November 2020;

(j) Each party shall have no more than one day in total at the trial of the issue to cross-examine the deponents of affidavits and one further day will be allocated for opening and closing arguments of both parties, for a total of no more than three hearing days for the trial of the issue in total;

(k) Unless otherwise ordered, the trial of this issue may be conducted in whole or in part by way of video conference; and

(l) Nothing in these directions shall preclude the giving of additional directions, or the variation of these directions, by either the pre-trial judge or the judge conducting the trial of the issue.

[62] The applicant shall bear the onus of establishing, on a balance of probabilities, that he is entitled to maintain the judgment against Ms. Kingston.

[63] Either party shall be at liberty to move for further relief in the event that there is non-compliance with these directions, such relief to include, but not be limited to, confirming the order of MacLeod-Beliveau J. dated 27 February 2020 and declaring that judgment to be final.

Costs

[64] The costs of this motion shall be reserved to the judge hearing the trial of the issue or otherwise finally disposing of this application.

Graeme Mew J.

Released: 23 September 2020

COURT FILE NO.: CV-19-00000248-0000

DATE: 20200923

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY McQUEEN

Applicant

– and –

DAVID WAYNE McQUEEN, LEONA MARY MARGARET McQUEEN, THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE, and SHERRY KINGSTON, in her personal capacity and in her capacity as Leona Mary Margaret McQueen’s attorney for property

Respondents

REASONS FOR DECISION

Mew J.

Released: 23 September 2020