Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Adam Robert Saunders, Applicant
AND:
Caroline Saunders, Robert William Saunders, and the Office of the Public Guardian and Trustee, Respondents
BEFORE: Dietrich J.
COUNSEL: Brendan Donovan and Jessica Karjanmaa, for the Applicant Pia Hundal, for the Respondent Caroline Saunders
HEARD: November 10, 2020
ENDORSEMENT
1Adam Robert Saunders (the “Applicant”) and Caroline Saunders (the “Respondent”) are siblings. Their late father Robert William Saunders (“Mr. Saunders”) was declared incapable of managing his property on January 13, 2017. He passed away on February 16, 2019. A Certificate of Appointment of Estate Trustee with a Will in Mr. Saunders’ estate (the “Estate”) was issued to Nathaniel Shaw Brettle on December 5, 2019.
2The Applicant is ordinarily resident in Toronto, where Mr. Saunders also lived in his own residence from 1955 until his death. The Respondent was ordinarily resident in Edmonton from 1981 to 2016.
3In 2013, Mr. Saunders prepared a power of attorney for property and a power of attorney for personal care in which he appointed the Applicant and the Respondent as his co-attorneys for property and personal care. Despite the joint appointment, the Respondent unilaterally moved Mr. Saunders into a retirement home that same year. He was then 91 years of age.
4Mr. Saunders protested and the Applicant arranged for Mr. Saunders to move back into his residence, in accordance with Mr. Saunders’ wishes. The Applicant also arranged for caregivers, ramp access to the residence and bathroom renovations to better suit Mr. Saunders’ needs.
5In April of 2016, the Applicant took Mr. Saunders to see a lawyer, and Mr. Saunders executed a new power of attorney for property and a new power of attorney for personal care in which he appointed the Applicant alone as his sole attorney for property and personal care.
6On July 20, 2016, Mr. Saunders executed new powers of attorney for property and personal care in which he appointed the Respondent as his sole attorney for property and personal care.
7Prior to her appointment as attorney for property in July 2016, the Respondent had, in January 2016, begun to pay Mr. Saunders’ bills, other than his VISA card bills. She had set up online banking for him and arranged to have his bills emailed to her for payment. She had also arranged for herself to become a joint owner of Mr. Saunders’ bank account at the Toronto Dominion Bank (the “TD Account”).
8Following the execution of the July 2016 powers of attorney, the Applicant brought the within application seeking, among other things, to set the July 2016 powers of attorney aside, to have Mr. Saunders declared incapable, and to have a guardian of his property and personal care appointed.
9Alana Kaye, a qualified capacity assessor, met with Mr. Saunders on November 7 and December 6, 2016 to assess his capacity to manage property and personal care. In her report dated January 13, 2017, Ms. Kaye stated that Mr. Saunders’ deficits impinged on his ability to recall his income or any of his expenses, he could not identify all of the banks he used, and he replied to questions by stating that he had sufficient funds to meet his needs and did not need to know more. Ms. Kaye concluded that Mr. Saunders was incapable of making financial decisions and was also incapable of managing his health care, nutrition, shelter, hygiene and safety.
10Between the time when Ms. Kaye assessed Mr. Saunders and the date on which she delivered her report, the Respondent arranged for Mr. Saunders to donate $185,000 to charities; to execute a new will (on January 5, 2017) in which the Applicant’s share of the Estate was reduced from one-half of the residue of the Estate, as provided in his previous will, to $50,000; and the Respondent’s share grew from one-half to the whole of the residue of the Estate. At the same time, Mr. Saunders changed the beneficiary of his SunLife insurance death benefit to the Respondent alone.
11Around the same time, the Respondent and her minor son moved from Edmonton to Toronto and eventually moved into Mr. Saunders’ residence. The Respondent took an unpaid leave from her work, as a teaching assistant in Edmonton, to assist in her father’s care, together with his professional caregivers.
12On April 10, 2017, unbeknownst to the Applicant, Mr. Saunders’ home was listed for sale.
13The Applicant and the Respondent agreed to mediate the disputes between them relating to Mr. Saunders’ property and care at that time. Through mediation, they reached a settlement on December 21, 2017. They executed Minutes of Settlement (the “Minutes”) that included, among other things, the parties’ agreement that, on Mr. Saunders’ death, the Estate, including his residence, would be divided equally between the Applicant and the Respondent, in accordance with Mr. Saunders’ previous will and codicil dated January 11, 2013 and October 6, 2014, respectively (the “Will”). The Minutes also required the Respondent to provide an informal accounting for the period from January 13, 2017 to the date of the appointment of a guardian for Mr. Saunders (the “Accounting Period”), and they provided that the Applicant would not object to any charitable donations made by Mr. Saunders in 2016.
14The Respondent agreed to provide the informal accounting. She nonetheless maintained that she did not use the July 2016 power of attorney. She contends that any action taken by her, was not as a fiduciary, but on Mr. Saunders’ instruction.
15Following the settlement, the Respondent accepted a $75,000 gift from Mr. Saunders, which she claimed was a Christmas gift. She was ordered by this court to repay the funds to Mr. Saunders and to pay the Applicant’s costs relating to that proceeding.
16The Respondent also failed to provide the informal accounting that she had agreed to provide. On a motion for contempt, she was ordered to produce the accounting and pay the Respondent’s costs.
17The Applicant brings this motion following his review of the informal accounting, which he finds to be inadequate. He brings a separate motion relating to the division of Mr. Saunders’ chattels.
18The Applicant asserts that deductions should be made from the Respondent’s share of the Estate to compensate him for what he alleges to be the Respondent’s financial enrichment achieved through her abuse of the power of attorney.
19The Applicant also asserts that he should be entitled to receive the chattels remaining in the Estate in respect of which the Applicant and the Respondent cannot agree on a division between them (the “Disputed Chattels”). He asserts that the Respondent has claimed more than her fair share of the chattels, generally, and, as such, three of the four Disputed Chattels should be distributed to him.
20For the reasons that follow, I find that the Respondent’s share of the Estate should be reduced by $10,764.52. The Estate Trustee shall sell the Disputed Chattels and the net proceeds therefrom shall be divided equally between the Applicant and the Respondent.
A. The Applicant’s Motion regarding the Respondent’s Informal Accounting
Positions of the Parties
21Regarding the Respondent’s informal accounting for the Accounting Period, the Applicant seeks an order directing the Estate Trustee to deduct from the Respondent’s share of the Estate the total amount resulting from any direct or indirect benefit she received relating to: a) amounts withdrawn from Mr. Saunders’ “Momentum Savings Account” at The Bank of Nova Scotia; b) an apparent decline in Mr. Saunders’ RRIF; c) any of Mr. Saunders’ life insurance policies at SunLife Financial (“SunLife”) on which the beneficiary designations were changed from the Applicant and the Respondent to the Respondent alone at a time when Mr. Saunders was incapable; and d) any purchases the Applicant made using Mr. Saunders’ TD VISA card from the period from July 21, 2016 to November 16, 2019.
22The Applicant asserts that between July 18, 2016 and September 17, 2019, the Respondent used Mr. Saunders’ VISA card to incur $55,369.45 in questionable expenditures; she reimbursed herself for amounts for which she has not accounted; and there were unaccounted for funds relating to Mr. Saunders’ RRIF. He also asserts that the Respondent should not be entitled to the whole of the SunLife life insurance policy proceeds, and that he only discovered that the beneficiary of the life insurance policy death benefits had been changed once the Respondent provided him with her accounting.
23The Respondent asserts that the withdrawals from the Momentum Savings Account were all withdrawals made so that Mr. Saunders could pay his lawyers, Nadia Harasymowycz and Charles Ticker, who were representing him at the time the withdrawals were made. Regarding the RRIF, the Respondent concedes that there was a typographical error in her accounts, but the evidence shows that there was no reduction in value in the RRIF during the Accounting Period; rather, there was an increase in its value. Regarding the SunLife insurance policy proceeds, the Respondent asserts that the Applicant did not seek any declaratory relief in respect of the validity of the beneficiary designations, and that he cannot seek such relief, in any event, on this motion because the change in the beneficiary designation occurred in the period prior to the Accounting Period, and the motion relates only to his objections to her accounting for the Accounting Period. Further she asserts that Mr. Saunders made the change in the beneficiary designation prior to being found incapable of managing his property.
24The Respondent submits that she only ever acted as Mr. Saunders’ attorney for property in consultation with him and that any step she took was on his direction. Regarding the payments made using Mr. Saunders’ VISA card, the Respondent submits that some of these payments are also outside the Accounting Period and therefore not properly part of the Applicant’s motion. Further, she asserts that the payments were made largely for Mr. Saunders’ benefit, and to the extent that she or her son benefited somewhat, it was not inappropriate given that she took an unpaid leave to move to Ontario to look after Mr. Saunders and she received no compensation for her services. If she had claimed compensation, she submits that she would have been entitled to more than $65,000.
Analysis
The Momentum Savings Account
25At the hearing of the motion, the Applicant did not pursue recovery of any amount for the withdrawals from the Momentum Savings Account. Based on the record, it appears that the Estate Trustee confirmed that the amounts in question were indeed withdrawn to pay Mr. Saunders’ counsel at that time, retained to respond to the litigation commenced by the Applicant against the Respondent and Mr. Saunders. The cheques were made payable to the counsel.
The RRIF
26Regarding the alleged decline in the value of the RRIF, I accept the evidence of the Respondent that she made a typographical error in the accounting. The Applicant alleges that there was a decline in value of approximately $52,540. The record shows that the RRIF increased in value from $96,850.58 on December 31, 2016 to $96,997.76 on March 31, 2017. In the Applicant’s cross-examination, he agreed that the value of the RRIF on March 31, 2017 was $96,850.58. The error appears to have occurred because the Respondent’s accounting shows the value of the account to be $44,456.45 instead of $96,997.76 on March 31, 2017. The difference, of some $52,540 is the cash component of the account that was inadvertently not reflected in the accounting. When the cash amount is added to the value of the investments, the total value of the RRIF is $96,997.76 at March 31, 2017. I am satisfied that there was no loss in the value of this asset during the Accounting Period.
The VISA Card Expenditures
27The Applicant alleges that persons other than Mr. Saunders, including the Respondent and her son, benefited significantly from expenditures made on Mr. Saunders’ VISA card. As ordered by the court, the Respondent provided VISA card statements for the period July 21, 2016 to November 16, 2019. However, the Accounting Period, as agreed between the parties in the Minutes, is from January 13, 2017 to the appointment of a guardian. No guardian was appointed prior to Mr. Saunders’ death. Therefore, the Accounting Period is January 13, 2017 to November 16, 2019, being the date of Mr. Saunders’ death.
28The Applicant argues that the expenditures for the longer period (July 21, 2016 to November 16, 2019) amount to $55,369.45 including: $20,646.77 in restaurant bills; $5,382.34 in hotel bills; $7,500 in tuition for the Respondent’s son’s private school education, $2,808.81 in car rental, parking and gas bills; $10,983.24 in airfare; $2,519.29 to transport items to Edmonton; and $1,023.75 for estates-related legal services from a firm in Edmonton. The Applicant also asserts that the Respondent reimbursed herself for $3,384.48 for which she cannot account.
29The Applicant asserts that more than one-half of the VISA card expenses in dispute were incurred prior to the Accounting Period. Paragraph 15 of the Minutes of Settlement specifically provides that the Respondent is to provide “an informal accounting to [the Applicant] to the date of the Guardian’s appointment” and the Applicant is given the right to raise objections to “the accounting” no later than ten days after receiving it.
30The Respondent’s evidence is that all of the restaurant bills were for meals shared by Mr. Saunders, the Respondent, her son and potentially one other person and/or a caregiver. On the basis that about one-half of the restaurant expenses were incurred in the Accounting Period, Mr. Saunders would have paid about $10,232 for restaurant meals. Of that amount, he would have benefited from at least 25 percent, or $2,558, assuming there were four persons at the meals. Of the remaining approximately $7,674, I find that is reasonable that Mr. Saunders would have paid for the meals of the Respondent, her son, the caregiver or another family member or friend as a guest, at least one-half of the time, which would add to his expenses $3,837 during the Accounting Period. This accounting is consistent with the Applicant’s evidence that when he and Mr. Saunders went out for dinner, Mr. Saunders would pay about fifty percent of the time. The balance remaining is $3,837, which should be deducted from the Respondent’s share of the Estate.
31Based on the record, I am satisfied that most of the balance of the VISA card expenditures are either outside the Accounting Period (e.g., $4,500 of the payments to Blyth Academy from Mr. Saunders to pay for one year of private school for the Respondent’s son while he was in Ontario), or they are covered by the Minutes (e.g., the Respondent is entitled to reimbursement from Mr. Saunders’ property for all of her travel expenses to visit Mr. Saunders, and the costs of Mr. Saunders’ trip to Edmonton), or they are expenses that Mr. Saunders could reasonably be expected to pay. The Respondent brought her car to Ontario so that she could take Mr. Saunders to his medical appointments, to visit friends, or on excursions. It is reasonable that she would be reimbursed for her reasonable car expenses (e.g., gas, parking). If the Respondent were not driving Mr. Saunders to his appointments and on outings, he would be incurring other transportation expenses, such as taxi, bus or train fares. The taxi expenses incurred during the Accounting Period appear to have been incurred so that Mr. Saunders’ caregivers, organized through Comfort Care, could get to work on time and safely. Based on the record, Mr. Saunders was generous to both his children, giving them between $10,000 and $20,000 for birthdays and/or Christmas. An offer to pay $7,500 for this grandson’s private school education for one year is not inconsistent with this pattern of gifting.
32I find that the Respondent has not provided an adequate explanation for the Great Canadian Van Lines expense regarding transporting items to Edmonton or the Devillar Jones legal fees incurred in Edmonton. Accordingly, $3,543.04, being the total of those two expenditures incurred during the Accounting Period, should also be deducted from her share of the Estate.
33The Respondent cannot account for $3,384.48 in withdrawals. It is appropriate that this amount in respect of which she is unable to provide any explanation or vouchers be deducted from her share of the Estate.
34In summary, I find that $10,764.52 should be deducted from the Respondent’s share of the Estate on account of benefits she appears to have derived, directly or indirectly, from Mr. Saunders’ property after he was declared incapable of managing his property.
The SunLife Insurance Policy Death Benefits
35The parties take very different views on whether Mr. Saunders had capacity to manage property when he designated the Respondent as the sole beneficiary of two SunLife policies of insurance, with a combined death benefit value of $15,284.48.
36The Applicant asserts that it is “beyond dispute” that Mr. Saunders made this change when he was incapable of managing property. He relies on Ms. Kaye’s finding that Mr. Saunders was incapable of managing his property as stated in her report released on January 13, 2017, having assessed him on November 7 and December 6, 2016.
37The Respondent asserts that Mr. Saunders was assessed by his gerontologist, Dr. David Tal, on July 19, 2016, who revised his report on August 4, 2016. Dr. Tal’s report is referred to in Ms. Kaye’s report. Ms. Kaye refers specifically to Dr. Tal’s notations that “cognitive testing is remarkably stable”, and that Mr. Saunders was not as cogent as he was one year ago, but still scored within the normal range. Dr. Tal concluded that Mr. Saunders was capable “for the moment” and would pass a Consent and Capacity Review Board hearing. According to Ms. Kaye’s report, Dr. Tal opined that Mr. Saunders “remains competent to make changes today and into the near-term future in terms of Power of attorney or executing, amending or withdrawing any legal documents.” The Respondent further asserts that she is entitled to rely on the presumption of capacity as set out in the Substitute Decisions Act, 1992, S.O. 1994, c. 27. The Applicant argues that the presumption does not apply where a fiduciary accepts a gift, which gives rise to a presumption of undue influence, and the fiduciary then bears the onus to show that the donor had capacity.
38I find that the validity of the beneficiary designation on the SunLife policies is not properly before this court. The Applicant’s motion relates to what is, in essence, a passing of the Respondent’s informal accounting. He seeks an order adjusting the Respondent’s share of the Estate to account for direct or indirect benefits from her involvement in the management of Mr. Saunders’ property. The Applicant does not seek a declaration as to the validity of the beneficiary designations.
39In any event, the evidentiary record before me does not permit me to determine whether Mr. Saunders was capable of changing the beneficiary designations on the SunLife policies and/or whether he was unduly influenced by the Respondent to make those designations at the time they were made. Accordingly, I make no adjustment to the Respondent’s share of the Estate on account of the death benefits paid to her. I make this finding without prejudice to the Applicant to commence a proceeding with respect to the validity of the beneficiary designations if so advised.
B. The Applicant’s Motion regarding Mr. Saunders’ Chattels
40Pursuant to the terms of the Will, each of the Applicant and the Respondent is entitled to an equal share of the chattels. The codicil includes this direction: “In the event of any disagreement in the division of my personal possession [sic], I DIRECT and DECLARE that my daughter [the Respondent] shall have the right to make the final determination.” I issued an order on March 31, 2020 confirming that while the Respondent had the right to make the final determination, she was required to exercise that right as a fiduciary so that the ultimate distribution would result in each of the Applicant and the Respondent receiving an equal share of the personalty, as directed by the testator in the Will.
41The Respondent asserts that she made a number of proposals regarding the chattels, but the Applicant refused to consent to any of them. Ultimately, the parties appear to be agreed on a division of all but four items, being a Mona Lisa print, silverware, a painting known as “851.jpeg” and a painting known as “307.jpg.”
42The Applicant seeks an order that the silverware and the two paintings be delivered to him. He submits that the Respondent has received many more chattels than him and therefore has received a greater share of the value of the chattels. On this basis, he submits that he should receive three of the four remaining items.
43The Respondent asserts that Applicant is attempting to re-litigate the matter of the chattels, which was resolved by my March 31, 2020 order, and that he is barred from doing so based on the common law doctrine of issue estoppel. She further asserts that while the list of items she will receive includes more items, those items are less valuable than the listed items that the Applicant will receive. The Respondent also submits that the Applicant has not disclosed on the list provided to the court all of the items that he will in fact receive. The Respondent contends that the Applicant should receive the Mona Lisa print and the 851.jpeg painting, and that she should receive the silverware and the 307.jpg painting.
Analysis
44Based on the record before the court, it is not possible to determine whether the value of the items on the list for distribution to the Applicant is equal to the value of the items on the list for distribution to the Respondent. Similarly, there is no valuation of the four remaining items. From the record, including the correspondence between counsel for the parties, I infer that these remaining items have some value. This factor may be fueling, or at least contributing to, this dispute. In my March 31, 2020 Order, the parties were strongly encouraged to resolve this dispute between them without further resort to the court. They were unable to do so.
45The Will makes clear that Mr. Saunders intended that each of the Applicant and the Respondent would receive an equal share of the chattels. Neither they nor the Estate Trustee has ascertained the value of the four remaining items. The parties cannot agree on an equal division of these items between them. The Respondent cannot effectively carry out the terms of the codicil without knowing the value of these items. Accordingly, it is appropriate that the Estate Trustee be directed to sell the four remaining items and to divide the net proceeds equally between the Applicant and the Respondent. Each of them will have an opportunity to the purchase from the Estate any of the items he or she wishes to have.
Disposition
46The Respondent’s share of the Estate shall be reduced by $10,764.52 to reflect benefits that she directly or indirectly received while assisting Mr. Saunders in the management of his property. The Estate Trustee shall arrange for a sale of the four remaining chattels, in respect of which the parties cannot agree on a distribution. The net proceeds shall be divided equally between the Applicant and the Respondent.
Costs
47Success has been divided in this case. The Applicant succeeded in, in part, on his motion for a reduction in the Respondent’s share of the Estate, but the reduction is not nearly as significant as the one he sought. The Respondent was successful in defending that motion in large measure.
48Neither party succeeded on the motion regarding the chattels.
49In light of the results, it is appropriate and fair that each of the parties bear their own costs of the motions.
Dietrich J.
Date: December 23, 2020