Public Guardian and Trustee v. MacFarlane, 2021 ONSC 1070

COURT FILE NO.: CV-20-00083334 DATE: 2021/02/10 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

THE PUBLIC GUARDIAN AND TRUSTEE Applicant – and – DIANE MACFARLANE Respondent

Counsel: Sarah E. Jones, for the Applicant Tina Garbas-Tyrrell, Section 3 Counsel for the Respondent

HEARD: December 15, 2020 by Zoom

REASONS FOR DECISION

corthorn j.

Introduction

1The Public Guardian and Trustee (“PGT”) brings this application for an order appointing it as the guardian of property for the respondent Diane MacFarlane. The application is made pursuant to s. 22 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (“SDA”).

2This matter first came before the court in April 2020. At that time, Ryan Bell J. heard a motion by the PGT and granted interim relief. The relief granted included an order, under s. 27(6) of the SDA, appointing the PGT as the respondent’s temporary guardian of property – for the time-limited period of 90 days from the date of the order. In addition, an order was made appointing counsel for Ms. MacFarlane under s. 3 of the SDA (“Section 3 Counsel”).

3Justice Ryan Bell adjourned the matter to July 13, 2020. Three additional adjournments were required – to August 25, December 2, and December 15, 2020. Procedural and substantive issues had to be addressed before the application could be heard. [1] The application was ultimately heard in the latter half of December 2020.

4The temporary guardianship order made by Ryan Bell J. was extended throughout the balance of 2020. It remains in effect pending the determination of the application. During the period of the adjournment, Ms. MacFarlane agreed to (a) attend a capacity assessment, and (b) be represented by Section 3 Counsel.

5With the results of the capacity assessment now in evidence on the application, and Ms. MacFarlane represented by Section 3 Counsel, the application was heard on December 15, 2020. For the reasons that follow, I declare that Ms. MacFarlane is incapable of managing property within the meaning of the SDA. The PGT is appointed as the guardian of property for Ms. MacFarlane.

Background

6Ms. MacFarlane was born in January 1948. She is 73 years old. After residing at extended-stay hotels for several months in 2020, Ms. MacFarlane moved to a bed and breakfast in the latter part of that year. She continued to reside at that location at the date of the hearing. Pursuant to one of the interim orders made in 2020, the PGT is taking steps to secure accommodation for Ms. MacFarlane in a supported living environment.

7Ms. MacFarlane grew up and attended school in Pennsylvania, U.S.A. The information provided by Ms. MacFarlane’s brother, Terry MacFarlane (“Terry”), is that, until she was 18 years old, Ms. MacFarlane attended a school for children with special needs. Terry believes that Ms. MacFarlane was considered to have a learning disability; he does not know the specific diagnosis in that regard.

8Terry’s description of his sister’s abilities and limitations includes that Ms. MacFarlane has no ability in math, does not understand the consequences of her actions, and does not understand that she has a finite amount of money on which to live for the balance of her life. Terry and his sister have not spoken for three or four years.

9One other family member recently had some involvement with Ms. MacFarlane. In 2007, Ms. MacFarlane appointed her nephew, Bruce MacFarlane (“Bruce”), to be her attorney for property. [2] Bruce acted in that role for several weeks during late 2019. He resigned from that role because Ms. MacFarlane ceased to communicate or co-operate with him. Bruce’s most recent contact with his aunt was in late 2019 or early 2020. Bruce ran into Ms. MacFarlane at a Tim Hortons; she did not appear to know who he was.

10Ms. MacFarlane’s father died approximately 30 years ago, and her mother approximately 13 years ago. There are no family members still alive who are in a position and willing to act as guardian of property for Ms. MacFarlane.

11When her mother died, Ms. MacFarlane inherited an amount between $400,000 and $500,000 and a condominium. In 2019, Ms. MacFarlane sold the condominium and began living in extended-stay hotels.

12The PGT first became involved in Ms. MacFarlane’s financial affairs in July 2019. One of the PGT’s investigators received a telephone call from legal counsel, Louis-Philippe Pelchat, at a mutual fund dealer (“FundEX”). Ms. MacFarlane has invested the majority, if not all, of her inheritance with FundEX. The concerns raised by Mr. Pelchat during that telephone call and in a subsequent email include the following:

• Ms. MacFarlane inherited $500,000 from her late mother, of which only $168,000 remained;
• In June 2019, Ms. MacFarlane met with her financial adviser and asked to withdraw all of her investments. Ms. MacFarlane was initially reluctant to explain why she wished to do so. When pressed, she explained that she had an opportunity of a lifetime to invest in the career of an Elvis impersonator;
• Ms. MacFarlane told Mr. Pelchat that it was urgent that she provide musicians in Tennessee with $10,000 so that they could arrange for a flight for her to travel to the United States to meet the musicians; and
• When denied access to her money, Ms. MacFarlane became aggressive and demanded her money.

13In his communication with the PGT, Mr. Pelchat expressed the opinion that Ms. MacFarlane is not capable of managing her finances. He also expressed concern that Ms. MacFarlane is at serious risk of financial harm.

14As a result of the concerns expressed by Mr. Pelchat, the PGT opened an investigation. That investigation was carried out in late 2019 and early 2020.

15While the PGT’s investigation was being carried out, Ms. MacFarlane continued to contact FundEX and request that she be permitted to withdraw funds of $5,000 or more at a time. For example, in October 2019, Ms. MacFarlane withdrew $5,000 from her investment account – purportedly for health reasons.

16It is important to highlight that Ms. MacFarlane has offered no explanation as to how she spent the $5,000 released to her by FundEX in October 2019. Ms. MacFarlane is reluctant to explain or justify her expenses – maintaining that her finances are her business.

17Immediately following the deposit of the $5,000 into her bank account, Ms. MacFarlane requested an additional $7,000 from FundEX on an “urgent” basis. That money was not released to Ms. MacFarlane. Instead, in early November 2019, FundEX froze Ms. MacFarlane’s account. [3]

18In mid-November 2019, another legal counsel with FundEX, Pierre-Ian Tremblay, received two voicemail messages from an individual identifying herself as Ms. MacFarlane. In those messages, the caller said that she had spent the $7,000 (i.e., the amount of money that was not released) and needed an additional $700 for living expenses.

19In late October 2019, at the request of the PGT, Bruce agreed to act as guardian of property. By the latter half of December 2019, Bruce felt that he had no choice but to resign from that role. Ms. MacFarlane would hang up on him when he called and would not permit him entry to the building in which she was living at the time.

20Based on his involvement in Ms. MacFarlane’s affairs at that time, Bruce believes that his aunt is the victim of a fraudulent scheme involving an Elvis impersonator. There is also evidence from a police officer and a real estate agent that Ms. MacFarlane intends to give her money to a musician or to an Elvis impersonator in the United States.

21The PGT closed its investigation file when Bruce agreed to act as attorney for property. Following Bruce’s resignation, the PGT reopened its investigation. In the end, the PGT commenced this application.

The Issues

22There are two issues to be determined:

1. Is Ms. MacFarlane incapable of managing property as defined by s. 6 of the SDA?
2. If Ms. MacFarlane is incapable of managing property, on what terms is the PGT to be appointed as her guardian of property?

Issue No. 1 – Is Ms. MacFarlane incapable of managing property as defined by s. 6 of the SDA?

23A person who is 18 years of age or more is presumed to be capable of managing their property: SDA, s. 2. The SDA provides that a person is incapable of managing property “if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision”: s. 6.

24On this application the PGT relies in particular on the latter half of that definition, emphasizing Ms. MacFarlane’s inability to appreciate the consequences of her decisions.

25The loss of the right to manage one’s property is very significant. The court will not, without the benefit of clear and compelling evidence, take away a person’s right to manage their property. At para. 7 of her decision in Shalka v. Shalka, [4] Gomery J. stated that a court “can never deprive an individual of the ability to make their own decisions without evidence clearly establishing that this is the only appropriate order to make.”

a) Evidence of Incapacity

i) Report of Capacity Assessment

26In addition to anecdotal evidence of Ms. MacFarlane’s behaviour, I have taken into consideration the evidence from capacity assessor Leonard Burnstein. I am satisfied that Mr. Burnstein is a qualified capacity assessor. He has been designated as such since 1995.

27Mr. Burnstein met with Ms. MacFarlane in October 2020. The record includes Mr. Burnstein’s (a) report of the capacity assessment carried out at that time, and (b) affidavit sworn in December 2020. In his report, Mr. Burnstein states that the results of the Mini-Mental Status Exam suggest that Ms. MacFarlane suffers from cognitive impairment. He highlights that Ms. MacFarlane’s short-term memory is impaired. For example, she is unable to recall three words after a 30-second delay. Mr. Burnstein also notes that Ms. MacFarlane can only calculate the first step in the serial sevens task.

28Mr. Burnstein acknowledges that it is difficult to determine whether Ms. MacFarlane’s limitations are the result of “true cognitive impairment” or “limited intelligence”. Regardless of the cause or causes of Ms. MacFarlane’s limitations, the impact of the limitations is the same. Mr. Burnstein concludes that Ms. MacFarlane’s capacity to understand and manage her finances is impaired.

29In his report, Mr. Burnstein summarizes his opinion and the basis for it:

Diane MacFarlane is impaired in her ability to fully take in and process financial information, especially new information. Her intellectual disabilities impair her ability to use available financial information in a manner which would enable her to make reasonable financial decisions. She is impaired in her ability to appreciate the consequences of her financial decisions, lack of decision, or lack of having another person appointed to manage and protect her estate.

Diane MacFarlane is vulnerable to financial abuse and/or exploitation. Measures have been taken to establish temporary guardianship of her finances.

Diane MacFarlane does not meet the minimum standards necessary to independently manage property. She is not capable to manage property, and she requires the appointment of a guardian to manage her estate for her.

30I turn next to anecdotal evidence in support of my finding that Ms. MacFarlane is incapable of managing her property.

ii) Anecdotal Evidence

31The anecdotal evidence of Ms. MacFarlane’s behaviour with respect to the management of her finances is not limited to the events described in the Background section of these reasons. The record is replete with examples of behaviour indicative of Ms. MacFarlane’s inability to understand financial information and to appreciate the consequences of a decision. Examples of Ms. MacFarlane’s inability to understand the consequences of (a) a decision or (b) the lack of a decision include the following.

32In November 2019, Ms. MacFarlane sold the condominium she inherited from her mother. She sold it quickly, and for $22,000 less than the listed price. Ms. MacFarlane received $196,440 as the proceeds of the sale. She immediately tried to access the proceeds, in cash, at a Scotiabank branch. Scotiabank refused the transaction and notified the Elder Abuse Section of the Ottawa Police Service.

33Undeterred, Ms. MacFarlane obtained a bank draft for $153,000 from CIBC. She took the draft to a Money Mart outlet, where she attempted to transfer the full amount to an individual in the United States. Money Mart contacted the CIBC and returned the draft to that bank.

34As another example, Ms. MacFarlane is always focused on accessing more funds, regardless of the source. She sent two letters to her family physician of eight years, in which she requested money. On several occasions, and in quick succession, Ms. MacFarlane attempted to withdraw four-figure sums from her dwindling investment account. In his report, Mr. Burnstein says, “[i]t was repeatedly necessary for me to state that I could not release any funds to her.”

35Lastly, both before me and when before Ryan Bell J., Ms. MacFarlane asked either for the release of a modest lump sum (in tens of dollars) and/or an increase in the weekly amount released to her by the PGT. In her pursuit of additional funds, Ms. MacFarlane is nothing if not unrelenting.

36There is no evidence, including from Ms. MacFarlane’s responding affidavit, to support a conclusion that Ms. MacFarlane understands that her money is finite and will be depleted if she is permitted to give most or all of it away to an Elvis impersonator. Ms. MacFarlane has not provided the court with any explanation as to why she needs large sums of money on an urgent basis. The submissions made by Section 3 Counsel, at the direction of Ms. MacFarlane, are in keeping with her strong desire for privacy.

b) Summary

37I find that Ms. MacFarlane does not understand (a) that her money will run out, or (b) the consequences of giving away her money to an Elvis impersonator. The evidence before this court clearly establishes that Ms. MacFarlane is incapable of managing her property. The only appropriate order is for the PGT to be appointed as Ms. MacFarlane’s guardian of property.

Issue No. 2 – If Ms. MacFarlane is incapable of managing property, on what terms is the PGT to be appointed as her guardian of property?

38The terms upon which the PGT is appointed as the guardian of property include those upon which the PGT was appointed as Ms. MacFarlane’s temporary guardian of property. Those terms are reflected in the order made in the concluding section of these reasons. The basis for most of those terms is set out in previous endorsements in this matter.

39The only matters not addressed in previous endorsements are (a) the request by the PGT for payment of its costs from Ms. MacFarlane’s Estate, (b) the costs payable to Section 3 Counsel, and (c) waiver of service of the application record on Terry MacFarlane.

a) The PGT’s Costs

40The SDA and the Public Guardian and Trustee Act, R.S.O. 1990, c. P.51 (“PGTA”) both address the entitlement of the PGT to its costs on an application of this kind. The relevant sections of those statutes include the following:

• The PGT was mandated under s. 27(3.1) of the SDA to commence an application for guardianship of property for Ms. MacFarlane upon completion of the investigation of an allegation that Ms. MacFarlane was at risk;
• The PGT is entitled to charge fees for services rendered by its employees and agents: PGTA, ss. 8(1) and (1.1); and
• The PGT is entitled to deduct fees and expenses from the money it holds for a person: PGTA, s. 8(3.1).

41In summary, the PGT has the statutory authority to charge and deduct its legal fees and expenses, in respect of this application, from the funds it holds for Ms. MacFarlane. I find that the PGT is entitled to its costs of the application. The application was pursued on an efficient, cost-effective basis, with regard to Ms. MacFarlane’s rights, and on the basis of materials that were well-prepared and of assistance to the court throughout.

42What amount is reasonable for the PGT’s costs on this application? The Courts of Justice Act, R.S.O. 1990, c. C.43 provides that “[s]ubject to the provisions of an Act or rules of court, the costs […] are in the discretion of the court”: R.S.O. 1990, c. C.43, s. 131(1). The factors considered by the court when fixing costs are set out in r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

43The court’s decision with respect to fees must take into account the PGTA and the PGT’s fee schedule approved by the Attorney General:

• The fees charged by the PGT for its services and the services of its employees and agents must be established by the PGT and approved by the Attorney General: PGTA, s. 8(2).
• The PGT’s statutory fee schedule setting out, inter alia, the hourly rate of in-house counsel was established in 2004 and approved by the Attorney General in the same year. The rates for legal counsel have not been altered since 2004: Ministry of the Attorney General, Fees of the Public Guardian and Trustee (pursuant to s. 8(2) of the Public Guardian and Trustee Act, R.S.O. 1990, c. P.51, as amended), 2004.

44The PGT seeks costs of $9,040 inclusive of fees, disbursements, and HST. The full indemnity costs set out in the bill of costs provided are $12,810 (exclusive of HST). In arriving at $8,000 for fees (with HST of $1,040 over and above that amount), the PGT exercised its statutory discretion to reduce or waive fees: PGTA, s. 8(3.2). The PGT,

• relies on an hourly rate for counsel ($200) that is reasonable and generally below the market rate for lawyers of comparable years of experience (2012 call),
• waives the fees for counsel’s fifth appearance on the matter (i.e., December 15, 2020, when the application was argued), and
• waives the fees for research done by a student (2.5 hours at $100 per hour).

45The net effect of all of the above is a reduction of approximately 33 per cent in the fees requested (from $12,810 to $8,000).

46I find that the costs requested by the PGT are reasonable. The PGT is entitled to its costs of the application in the total amount of $9,040 representing $8,000 for fees and $1,040 for HST.

b) Costs for Section 3 Counsel

47Subsection 3(2) of the SDA provides that where counsel is appointed to represent an individual and no Legal Aid Certificate is issued, the person for whose benefit counsel is appointed is responsible to pay counsel’s fees. No Legal Aid Certificate was issued to Ms. MacFarlane.

48Ms. Garbas-Tyrrell delivered an account in the amount of $5,367.55 for fees and HST. She requests that the account be paid in full, from Ms. MacFarlane’s property. For the reasons that follow, I find the account to be reasonable and order that it be paid from Ms. MacFarlane’s property:

• Ms. Garbas-Tyrrell was called to the bar in 2009. Her actual hourly rate is $275. For this matter, her fees are charged at $150 per hour. The hourly rate charged is reasonable;
• The fees of $4,750 represent slightly in excess of 30 hours of counsel’s time. The time docketed by Ms. Garbas-Tyrrell is slightly less than half of the hours docketed by counsel and a student on behalf of the PGT. Ms. Garbas-Tyrrell’s time is reasonable, both in absolute terms and in proportion to the time spent on behalf of the PGT;
• Ms. Garbas-Tyrrell has not charged for all of her time in representing Ms. MacFarlane; some of that work was carried out on a pro bono basis; and
• The PGT approves the proposed account.

49It is important that lawyers who accept retainers as Section 3 Counsel be reasonably compensated for their time. If lawyers cannot be certain that they will be reasonably compensated then the number of lawyers who are prepared to accept retainers of this kind and carry out this necessary work will dwindle to a small number, if not zero.

c) Waiver of Service on Terry MacFarlane

50Terry MacFarlane was explicit in his statement to the PGT that he is not prepared to become involved in his sister’s financial affairs. He was co-operative in the investigation and is clearly aware of it. Ms. MacFarlane rejects the notion of assistance from her brother and/or her nephew.

51I find that there is no prejudice to any of the parties or Ms. MacFarlane’s brother if the requirement to serve Terry with the application record is waived. In fact, there is a cost-efficiency to avoiding the cost of an extra set of materials and service of those materials on Terry personally as would be required.

52The requirement to serve Terry MacFarlane with the application record is therefore waived.

Relief Granted

53For the reasons set out above, I order as follows:

1. That pursuant to section 22 of the Substitute Decisions Act, 1992, as amended, the Public Guardian and Trustee is hereby appointed as the permanent guardian of property for the Respondent, Diane MacFarlane, with the full powers of a permanent guardian of property.
2. That the Public Guardian and Trustee shall have full authority to do anything in respect of property that the Respondent, Diane MacFarlane, could do if capable, except make a will.
3. That the Public Guardian and Trustee shall be provided with all records, including health records, with respect to the Respondent, Diane MacFarlane, from any source, including but not limited to any person, government agency, income source, financial institution, hospital, community agency, the Ministry of Community and Social Services, any passport funding agency or broker for the passport funding agency, police agency, health professionals or psychiatric hospital. Such records shall be disclosed in their entirety and shall not be subject to any provision of any freedom of information legislation; financial institutions shall disclose records of any assets in which the Respondent, Diane MacFarlane, is the owner and also any assets to which the said Respondent’s interest can be traced, including but not limited to any assets held jointly with any other person.
4. That all persons or institutions or government bodies who hold assets or property belonging to the Respondent, Diane MacFarlane, including copies of any and all testamentary documents, shall deliver said assets and property forthwith to the Public Guardian and Trustee, in trust for Diane MacFarlane.
5. That service on Terry MacFarlane is hereby waived.
6. That the Public Guardian and Trustee is entitled to costs of $9,040.00, inclusive of fees, disbursements, and HST, payable from the property of Diane MacFarlane.
7. That Section 3 counsel is entitled to costs of $5,367.55 payable from the property of Diane MacFarlane.

54I wish to thank both counsel for the PGT and Section 3 Counsel for their work on this application. Counsel for the PGT was diligent and thorough in her preparation and delivery of the PGT’s written materials and oral submissions during all appearances. It was not an easy task for Section 3 Counsel to obtain Ms. MacFarlane’s co-operation. Despite the difficulties encountered, Section 3 Counsel worked with Ms. MacFarlane to ensure that her views were presented to the court. I commend both counsel for their work in the matter.

Madam Justice Sylvia Corthorn Released: February 10, 2021

Footnotes:

1The interim endorsements are dated July 16, 2020 and December 7, 2020. Neither of these endorsements was assigned a publication number.

2Bruce is one of Terry’s children.

3In February 2020, FundEX sent a letter to Ms. MacFarlane informing her that her funds would be frozen pending the outcome of this application.

4(August 25, 2020), Ottawa, CV-20-82745 (S.C.).