COURT FILE NO.: 18-77001

DATE: September 25, 2020

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Sheila Dawson and Rachel Harris

Applicants/Respondents on motion

– and –

Josephine Dawson

Respondent/Moving party on motion

– and –

Anthony Dawson, Michael Dawson, and the Office of the Public Guardian and Trustee

Respondents

Ken Dunham for Sheila Dawson and Rachel Harris

Alyssa Tomkins for Josephine Dawson

Matthew Smith and Gary Boyd for Anthony Dawson

Michelle Marasco for the Public Guardian and Trustee

No one appearing for Michael Dawson

Heard: Oral submissions made on June 4, 2020; further written submissions received on August 3 and August 6, 2020

ENDORSEMENT OF MOTION TO APPOINT JOSEPHINE DAWSON AS MICHAEL DAWSON’S LITIGATION GUARDIAN

[1] In this motion, Josephine Dawson seeks to be appointed as litigation guardian for her husband, Michael Dawson, in a proceeding under the Substitute Decisions Act, 1992, SO 1992, C 30 (the “Act”).[^1] Michael is suffering from dementia and, based on an assessment performed in August 2018, lacks the capacity to manage his property or to instruct legal counsel.

[2] Josephine and Michael’s son Anthony Dawson supports the proposed appointment. The Office of the Public Guardian and Trustee (“PGT”) opposes it. Josephine and Michael’s daughter Sheila Dawson and their grand-daughter Rachel Harris take no position on the motion.

Overview

[3] In the underlying proceeding, Sheila and Rachel challenge the validity of documents executed by Michael and Josephine in 2017 governing who should control their personal care and property if they became incapable, and who should administer their estates on their death.

[4] Prior to 2017, Josephine and Michael executed powers of attorney (POAs) appointing Sheila as their attorney for property and personal care. She was also named as an executor in their wills. In April 2017, Josephine and Michael executed new POAs appointing Anthony as their primary attorney for personal care and property. A few months later, they each changed their wills to exclude Sheila as an executor.

[5] Sheila and Rachel allege that, when Josephine and Michael signed the new POAs and changed their wills, they lacked the capacity to do so, or were unduly influenced by Anthony.

[6] In September 2019, I granted Anthony’s interim motion for an order permitting the investment of the proceeds of sale from Josephine and Michael’s house. My decision took into account Josephine’s consent to the proposed order, and my finding that there is currently no evidence that Josephine lacked capacity in April 2017 or that she lacks capacity now. My order was however subject to the condition that:

until further order of the court, no money may be withdrawn from the funds transferred pursuant to this order unless and until a litigation guardian is appointed for Michael and Josephine and the guardian agrees to such withdrawal.

[7] In light of this order, Josephine contends that a litigation guardian must be appointed for Michael. She argues that she is an appropriate guardian because she is not in a conflict of interest and the appointment will limit the costs that she and Michael will incur in the litigation. She also argues that Michael’s appointment of her as co-attorney in the April 2017 POA shows that he trusted her to act in his best interests.

[8] In the PGT’s view, appointing a litigation guardian for Michael is unnecessary and inappropriate. It argues that no litigation guardian should be appointed for a person when that person’s capacity is at issue in a proceeding, particularly in light of the court’s power to direct that counsel be arranged for the person pursuant to s. 3 of the Act. Alternatively, if Josephine is appointed as Michael’s litigation guardian, the PGT says that she should be precluded from making any decisions about Michael’s capacity or choice of substitute decision maker, because she has an interest in the determination of these issues.

[9] After hearing oral submissions on the motion on June 4, 2020, I sought further submissions in writing from counsel for Josephine and the PGT. Although my endorsement did not direct that Anthony make submissions, I have taken his unsolicited submissions into account, because they provide a somewhat different perspective than the other submissions.

Issues on the motion

[10] On the motion, I must determine whether a litigation guardian should be appointed for Michael and, if so, whether Josephine is an appropriate person to appoint. If Josephine is appointed, I must also decide if the appointment should be subject to any terms.

(1) General considerations relevant to this motion

[11] The parties to this motion have diametrically opposite views: Josephine and Anthony argue that a litigation guardian for Michael is a foregone conclusion, while the PGT maintains that an appointment is completely unnecessary. I will begin by explaining why I reject these categorical views, based on the interplay of r. 7.01 of the Rules of Civil Procedure and s. 3 of the Act.

(i) The appointment of a litigation guardian is not mandatory under r. 7.01

[12] Josephine contends that, unless the Act provides otherwise, the Rules of Civil Procedure make it mandatory for a litigation guardian to be appointed for Michael. This is incorrect. Rule 7.01 gives the court the discretion to determine that an appointment is unnecessary or inappropriate, particularly in cases where a party’s capacity is the subject of a proceeding.

[13] Rule 7.01(1) provides that:

Unless a court orders or a statute provides otherwise, a proceeding shall be commenced, continued or defended on behalf of a party under disability by a litigation guardian.

The opening words of r. 7.01(1) explicitly give the court discretion to deviate from the general rule.

[14] Rule 7.01(2) furthermore carves out an exception to the general rule requiring a litigation guardian applicable to guardianship proceedings under the Act. It provides that:

Despite subrule (1), an application under the Substitute Decisions Act, 1992 to appoint a guardian of property or a guardian of the person may be commenced, continued and defended without the appointment of a litigation guardian for the respondent in respect of whom the application is made, unless the court orders otherwise.

[15] This subrule is again phrased in such a way as to give the court discretion. An application under the Act may be commenced or defended without a litigation guardian being appointed for the person who is the subject of the application. The court may however order that a litigation guardian be appointed.

[16] Josephine argues that r. 7.01(2) does not apply because the question of Michael’s current capacity is settled. In 2018, Michael was assessed by Dr. Francine Sarazin, who concluded that he lacked the capacity to manage property, execute a will or instruct counsel. Josephine contends that the only live issue in the litigation is whether Michael and Josephine lacked capacity in 2017, and that r. 7.01(2) was not meant to address a situation where the primary issue is not whether a guardian is necessary, but rather who that guardian should be.

[17] I do not accept this argument about the ambit of r. 7.01(2), which is framed in broad terms. The application will determine the guardianship of Michael’s property and person. This brings it squarely within the language of r. 7.01(2).

[18] I conclude that, pursuant to both r. 7.01(1) and (2), I have the discretion to appoint a litigation guardian for Michael, or to decline to do so.

(ii) Appointing a litigation guardian may be appropriate in an application for guardianship under the Act

[19] The PGT argues that it is generally inappropriate to appoint a litigation guardian in the context of an application for guardianship. It advances two justifications for this position, neither of which I find persuasive.

[20] First, the PGT contends that the parties to a guardianship proceeding, the PGT and the court must act to protect the interests of the person whose capacity is at issue. It argues that this makes it unnecessary to appoint a litigation guardian.

[21] As already noted, r. 7.01(2) gives the court discretion to appoint a litigation guardian for the person whose capacity is at issue in an application for guardianship under the Act. This discretion is incompatible with the assumption that a vulnerable person’s interests will always be sufficiently protected in the absence of such an appointment.

[22] Guardianship proceedings are often contentious. As observed by Strathy J. in Abrams v. Abrams, 2008 67884 (ON SC), at para. 48:

The interests that [guardianship proceedings under the Act] seek to balance are not the interest of litigants, but the interests of the person alleged to be incapable as against the interest and duty of the state to protect the vulnerable.

[23] Although everyone involved in a guardianship proceeding may have the highest motives, in some cases a litigation guardian must be appointed to ensure that the interests of the vulnerable party are fully protected.

[24] Second, the PGT contends that a litigation guardian is usually unnecessary because s. 3 of the Act permits the court to direct the PGT to provide legal representation for a person whose capacity is at issue. In this case, for example, a lawyer appointed pursuant to s. 3, Paul Dancause, met with Michael and Josephine on August 4, 2018 and provided a brief report to the parties by email.

[25] This argument miscasts the role played by litigation counsel appointed pursuant to s. 3. Both a litigation guardian and s. 3 counsel are responsible for protecting the interests of a vulnerable litigant, but they do so in significantly different ways.

[26] As noted in Abrams, the Act contains various provisions designed to safeguard the dignity, privacy and legal rights of a person whose capacity is in doubt. Notably, section 3 of the Act recognizes that a person whose capacity is at issue is entitled to legal representation:

3 (1) If the capacity of a person who does not have legal representation is in issue in a proceeding under this Act,

(a) the court may direct that the Public Guardian and Trustee arrange for legal representation to be provided for the person; and

(b) the person shall be deemed to have capacity to retain and instruct counsel.

[27] The PGT contends that a s. 3 counsel is appointed where “it is important that the Court understand the person’s wishes and preferences, and where the Court requires an understanding of a person’s state of mind or state of being”. This implies that s. 3 counsel can speak for Michael, such that the appointment of a litigation guardian would be redundant.

[28] This argument is premised on s. 3 counsel having a role that they do not and cannot have. A lawyer appointed to assist a vulnerable person under the Act has the same obligations as any other litigation counsel. Their job is to advise their client of his or her rights and to act on their instructions. If a client has capacity issues, ascertaining their wishes and preferences may be difficult or even impossible. Every lawyer, however, is limited by their understanding of their client’s wishes. If the client’s instructions cannot be ascertained, no lawyer — including a lawyer appointed under s. 3 — can take a position in a proceeding on the assumption that their client would have agreed with it or that it is in their best interest.

[29] Many lawyers appointed pursuant to s. 3 do commendable work in difficult circumstances. They make a tremendous effort to discern their client’s wishes and often provide the court with very helpful insight as a result. If they are unable to understand what a client wants, however, a s. 3 lawyer cannot make decisions on that person’s behalf.

[30] By contrast, a litigation guardian stands in the shoes of someone under disability. As the PGT acknowledges in its submissions, a litigation guardian “does not take instructions from [persons under disability] but makes substitute decisions in their best interests”. The powers and duties of a litigation guardian are spelled out in r. 7.05:

7.05 (1) Where a party is under disability, anything that a party in a proceeding is required or authorized to do may be done by the party’s litigation guardian.

(2) A litigation guardian shall diligently attend to the interests of the person under disability and take all steps necessary for the protection of those interests, including the commencement and conduct of a counterclaim, crossclaim or third party claim.

(3) A litigation guardian other than the Children’s Lawyer or the Public Guardian and Trustee shall be represented by a lawyer and shall instruct the lawyer in the conduct of the proceeding.

[31] A litigation guardian therefore does precisely what s. 3 counsel cannot do, that is, make decisions on behalf of a vulnerable person. As stated succinctly by Justice Goodman in rejecting the appointment of s. 3 counsel in Miziolek v. Miziolek, 2018 ONSC 2841, at para. 13:

The role of a Section 3 Counsel is to obtain instructions from the person whose capacity is in issue and absent instructions, counsel is not to act. Section 3 Counsel is not to take on the role of a Litigation Guardian.

[32] The complementary nature of these two roles is underscored by r. 7.05(3), which requires that a litigation guardian be represented by a lawyer.

[33] Parker v. Fockler, 2012 ONSC 699, provides an example of a situation where a person benefitted from the appointment of both s. 3 counsel and a litigation guardian. The court had directed the PGT to arrange for legal counsel for Mrs. Fockler, a person whose capacity was at issue in the proceeding. After trying repeatedly but unsuccessfully to meet with Mrs. Fockler, s. 3 counsel brought a r. 7.01 motion to have a litigation guardian appointed for her. At para. 16, Justice Kruzick concluded that he was satisfied that the appointment of a litigation guardian pursuant to the purposes of r. 7.01 was necessary “to protect the integrity of the judicial process for all participants in the litigation, and to protect the interests of Mrs. Fockler”.

[34] The decision in Parker illustrates circumstances where the appointment of s. 3 counsel may be inadequate, on its own, to protect the interests of a person whose capacity is at issue in proceedings under the Act. A direction under s. 3 therefore does not preclude the appointment of a litigation guardian for the person whose capacity is at issue.

(iii) A determination has not already been made as to whether a litigation guardian should be appointed for Michael

[35] Beyond the broader arguments of principle advanced by Anthony and Josephine, they contend that a litigation guardian must be appointed for Michael based on an endorsement that I issued in September 2019. This is inaccurate.

[36] When the September 2019 endorsement was issued, the only issue directly before me was whether proceeds from the sale of Michael and Josephine’s house should stagnate in a lawyer’s trust account or be invested so that they would attract some interest. I was not asked to rule on how, in general, future decisions should be made with respect to these funds. I did not, in fact, have evidence that would allow me to determine if Josephine should have the sole authority to use them. Josephine, however, raised a concern about how to implement an earlier court order by Champagne J., which provided that money from the sale proceeds could be withdrawn only on the joint consent of Josephine and Michael’s counsel. This order effectively blocked any use of the funds so long as Michael was not represented.

[37] It is in these circumstances that I indicated, in the September 2019 endorsement, that further transfers from these funds should not be made until a litigation guardian had been appointed for Michael. The endorsement also provided, however, that this condition was subject to further order of the court. The endorsement, therefore, left open the possibility that a litigation guardian would not need to be appointed for Michael.

(2) Factors relevant to the appointment of a litigation guardian in this case

[38] Having concluded that it may be appropriate in a proceeding like this to appoint a litigation guardian for a vulnerable person, and having concluded that I retain the discretion to appoint a litigation guardian for Michael in the specific circumstances of this case, I now turn to the questions of whether I should do so and, if so, whether Josephine is an appropriate litigation guardian.

[39] None of the parties has identified any caselaw where a court has set out criteria for appointing a litigation guardian for an individual whose capacity is at issue in a proceeding under the Act. Having reviewed caselaw dealing with motions under s. 3 of the Act and r. 7.01, I conclude that the following factors are relevant to this decision:

a) The evidence regarding the capacity of the person to understand and make decisions about the proceeding;

b) Whether the litigation involves questions other than the guardianship of this individual;

c) Whether the person proposed as litigation guardian is appropriate, having regard in particular to any potential conflict of interest he or she may have;

d) Any other factor that may be relevant in the circumstances of the case.

[40] These factors must be considered in light of the focus of any proceeding under the Act, which is the protection of Michael’s legal rights, privacy and dignity.

[41] I turn now to the specific circumstances of this case.

(a) What is the evidence regarding Michael’s capacity to make decisions with respect to this proceeding?

[42] Dr. Sarazin’s 2018 assessment indicates that Michael does not have the capacity to understand legal advice or to give meaningful instructions to a lawyer. None of the parties contends otherwise.

[43] Michael’s incapacity favours the appointment of a litigation guardian. The court has the authority to appoint s. 3 counsel even where a capacity assessment or a court order has declared a person to be incapable; Kwok v. Kwok, 2019 ONSC 3549, at para. 32. On the evidence in this case, however, a lawyer acting for Michael may not be able to ascertain or act upon his wishes.

[44] If a litigation guardian is not appointed, there is a significant risk that no one will be able to advise the court of Michael’s wishes and preferences. Since the application has very serious consequences for him personally, being sidelined in this way would seriously undermine Michael’s legal interests and dignity.

(b) Does the litigation involve issues other than the guardianship of Michael?

[45] In this proceeding, the court will have to determine four issues:

(i) Are the POAs for property and personal care executed by Josephine in April 2017 valid?

(ii) Are the POAs for property and personal care executed by Michael in April 2017 valid?

(iii) Are the changes that Josephine made to her will in December 2017 valid?

(iv) Are the changes that Michael made to his will in December 2017 valid?

[46] One of these issues, issue (ii), has direct consequences for Michael’s current situation, because the outcome will determine whether Sheila or Anthony is empowered to make decisions on his behalf with respect to his property and personal care. But Michael also has a direct interest in the outcome of issue (iv), because it involves the enforceability of the last will he executed.

[47] The existence of issues beyond Michael’s current capacity – which, as already noted, does not seem to be in dispute – again argues for the appointment of a litigation guardian, so that his position on these issues can be fully communicated to and considered by the court.

(c) Would Josephine be an appropriate litigation guardian?

[48] Josephine and Michael have been married for many years. Their relationship gives her special insight into his wishes and preferences. This argues for her appointment as litigation guardian.

[49] Josephine says that there are two other reasons why she should be appointed.

[50] First, in the POA for property that Michael executed on April 27, 2017, he authorized Josephine and Anthony jointly “to appear before any court of law, and there to sue, plead, answer and defend in all matters and causes”.

[51] I cannot place weight on the April POA, because Michael’s capacity when he signed it is contested in this proceeding. The court could decide in Sheila and Rachel’s favour on this issue. Relying on the POA as evidence of Michael’s wishes presupposes the opposite.

[52] A second point raised by Josephine is that her appointment as Michael’s litigation guardian would save costs for all parties, as Josephine is knowledgeable about the facts giving rise to the litigation. The PGT argues that Josephine’s knowledge of the facts of this case are not relevant to the issue, because she is in any event obliged to disclose any relevant evidence she might have.

[53] The financial impact of Josephine’s potential appointment is a relevant consideration. As already noted, the focus of this analysis is the protection of Michael’s interests as a vulnerable person. A waste of resources has been identified as a relevant consideration on a motion to appoint legal counsel for a vulnerable person under s. 3; Kwok v. Kwok, at para. 33. The financial impact of a potential appointment is no less relevant in considering a motion under r. 7.01.

[54] Josephine’s appointment could reduce Michael’s costs in this litigation in two ways. First, Josephine rather than s. 3 counsel will have the job of discerning Michael’s wishes, eliminating any legal fees for these efforts. Second, if Josephine is appointed as litigation guardian, it seems likely that she will retain the lawyer who already represents her personally to act for her in this role as well. Michael will accordingly not incur the cost of separate legal counsel. Although there is no evidence of how much costs could be saved through Josephine’s appointment, I accept that Michael’s resources are not unlimited, and that the savings achieved are a legitimate consideration.

[55] The PGT’s main objection to Josephine’s appointment is that this could put her in a conflict of interest. In its written argument, it expresses its concern as follows:

Appointing a litigation guardian for Michael may invite misrepresentations about his wishes regarding his chosen [substitute decision-maker]. A person may have no monetary conflict of interest, and yet may still be partial in their views and perceptions as to what an incapable person’s best interests demand.

[56] Josephine acknowledges that she perceives that her interests and Michael’s interests are aligned but points out that the court will continue to have a supervisory role over the proceeding and will have to approve any settlement.

[57] I do not see how Josephine could use her role as Michael’s litigation guardian to try to influence the court’s determination about Michael’s capacity prior to August 2018. Her appointment will not change the evidence on this issue. Josephine may have an interest in persuading the court that Michael’s current preference would be that Anthony, rather than Sheila, have control of decisions regarding his person and property. But the expression of Michael’s current wishes will not be determinative of, or even particularly relevant to, the validity of his 2017 POA.

[58] Sheila and Rachel do not oppose this motion. This is significant, in my view. I would assume that Sheila and Rachel would be concerned about any risk that Josephine’s role as litigation guardian could skew the litigation unfairly against them. They apparently have no such concerns. Their lack of opposition to Josephine’s proposed role does not relieve the court of its obligation to consider conflict of interest issues. Their perception that there is no disqualifying conflict is however relevant.

[59] Finally, if there is any indication at some future stage of this proceeding that Josephine is placing her own interests ahead of Michael’s interests, or is otherwise not fulfilling her role as litigation guardian, the court could replace her on its own initiative. Rule 7.06(2) provides that:

Where it appears to the court that a litigation guardian is not acting in the best interests of the party under disability, the court may substitute the Children’s Lawyer, the Public Guardian and Trustee or any other person as litigation guardian.

[60] I conclude that Josephine is not disqualified from acting as Michael’s litigation guardian as the result of a conflict of interest.

(d) Is there any other factor relevant to the potential appointment in this case?

[61] The parties have not identified any other relevant factor.

Conclusions

[62] Josephine’s motion to be appointed as Michael’s litigation guardian is granted. Weighing the relevant factors, I conclude that appointing a litigation guardian for Michael will safeguard his legal interests and dignity. I further conclude that Josephine would be the appropriate litigation guardian for him, given their relationship and the lack of any conflict of interest preventing her from taking on this role.

[63] The PGT proposed that, if Josephine is appointed as litigation guardian, I should order that she not be allowed to make decisions about Michael’s capacity or the choice of substitute decision maker for him. I do not find that such an order would serve any practical purpose. Josephine will not be in a position to make any decisions about Michael’s current capacity, given Dr. Sarazin’s assessment report. The choice of substitute decision maker will be a function of the court’s determination of the validity of Michael’s 2017 POA, rather than the result of any decision that Josephine might make on his behalf.

[64] If the parties are unable to agree on costs of the motion, they may serve and file cost submissions with the court by email by no later than October 9, 2020 at 4:00 p.m. Each party’s submissions shall not exceed three pages in length, but a bill of costs and other relevant documents may be attached. The parties shall not file books of authorities with their submissions but may provide hyperlinks to any relevant caselaw.

Justice Sally Gomery

Released: September 25, 2020

[^1]: With no disrespect intended, since most of the parties share the same last name, I will refer to them by their first names in this endorsement.