Court File and Parties
COURT FILE NO.: 05-263/19
DATE: 20210623
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: IVAN ZAGORAC, Applicant/Moving Party
AND:
NINA ZAGORAC, LEPOSAVA ZAGORAC and THE PUBLIC GUARDIAN AND TRUSTEE, Respondents/Responding Parties
BEFORE: Dietrich J.
COUNSEL: Areta N. Lloyd, for the Applicant/Moving Party
Robert Di Vincenzo, for the Respondent Nina Zagorac/Responding Party
Steven Safieh, for the Respondent Leposava Zagorac/Responding Party
HEARD: May 28, 2021
ENDORSEMENT
[1] Leposava Zagorac (“Mrs. Zagorac”) is 68 years of age and lives in the City of Toronto. She has a degree in mathematics and was formerly employed as an actuarial analyst at an insurance company. Her first language is Serbian.
[2] Mrs. Zagorac has two adult children: her son, the applicant, Ivan Zagorac (“Ivan”) and her daughter, a respondent, Nina Zagorac (“Nina”); as well as a stepson, Samuel Domski (“Samuel”). Samuel is the son of her late husband Drasko Zagorac.
[3] The within application is focused largely on a dispute between Ivan and Nina regarding their mother’s capacity to manage her property and personal care.
[4] Mrs. Zagorac was diagnosed with dementia in 2015, and later with Alzheimer’s disease. She also has some mobility issues.
[5] In 2019, Ivan discovered that bathroom renovations at Mrs. Zagorac’s residence were significantly over budget and that there were unusual balances on her credit card, unexplained withdrawals from her bank account, and unusually high monthly expenses. He then brought the within application to compel Nina, who has been assisting Mrs. Zagorac with her finances, to pass her accounts regarding the management of Mrs. Zagorac’s property.
[6] In this motion, Ivan seeks an order permitting him to amend his application to seek additional relief. He also seeks: an order that Mrs. Zagorac be assessed for her capacity to manage her property, including retrospectively, and her personal care; an order that Mrs. Zagorac undergo a functional assessment; an order requiring Nina to pass her accounts with respect to her management of Mrs. Zagorac’s property; and, if required, an order adding Nina’s common-law partner Sean Michael Scanlon (“Sean”) as a party, and certain orders against him, among other relief relating to the suspension of powers of attorney and the appointment of a guardian.
[7] For the reasons that follow, it is appropriate that Mrs. Zagorac undergo a capacity assessment and a functional assessment. It is also appropriate that Nina be required to pass her accounts if she fails to provide satisfactory responses to Ivan’s Notice of Objection to her accounts on a timely basis.
Factual Background
Members of Mrs. Zagorac’s Family
[8] Ivan, a salesman, lived with Mrs. Zagorac until March 2016 when he moved to his current home with his wife. While living with Mrs. Zagorac, Ivan assisted Mrs. Zagorac with her finances such as paying her bills and filing her tax returns.
[9] Nina, a security guard, has always lived with her mother. Nina is currently assisting Mrs. Zagorac with her finances and personal care. Nina takes Mrs. Zagorac to all of her doctor’s appointments. Nina did not accept Mrs. Zagorac’s diagnosis of Alzheimer’s disease and did her own research with a view to diagnosing Mrs. Zagorac’s condition.
[10] In 2019, Nina changed the locks to Mrs. Zagorac’s residence so that Ivan could no longer enter freely. Nina says the locks were changed at Mrs. Zagorac’s request.
[11] For the past ten years, Sean, also a security guard, has lived at Mrs. Zagorac’s residence as well. As a tenant there, his rent is $500 per month. Latterly, Sean has not been paying his rent, but, instead, using it to pay Nina’s legal fees. He has also recently been added as a joint holder of one of Mrs. Zagorac’s bank accounts.
[12] Samuel has never lived with Mrs. Zagorac but visits her from time to time and is concerned about her welfare. He speaks with Ms. Zagorac once or twice a month.
Financial Matters
[13] Mrs. Zagorac’s principal assets are comprised of her residence, which is unencumbered and was recently appraised at $1.3 million, and an RRSP, with a value of approximately $200,000.
[14] Mrs. Zagorac’s monthly income is approximately $4,032 per month, including rental income from tenants in her residence of $2,200, and pension income of $1,832.
[15] Mrs. Zagorac agreed to a bathroom renovation at her residence to better accommodate her needs. The renovation was expected to cost approximately $12,000, but the costs exceeded $40,000. Nina is contemplating additional renovations to the residence to be funded by Mrs. Zagorac.
[16] According to Ivan’s review of Mrs. Zagorac’s bank records, since January 2018, over a period of 20 months, approximately $164,922 passed through Mrs. Zagorac’s bank account that is held jointly with Nina. This expenditure is more than $84,000 greater than Mrs. Zagorac’s annual income. Ivan suspects that the excess was taken from Mrs. Zagorac’s RRSP. In his review, Ivan identified charges for food for a one-month period in 2019 of more than $1,600.
[17] On September 20, 2019, when Ivan brought the within application, he raised concerns about Mrs. Zagorac’s finances, including the large credit card balances and unexplained withdrawals. Nina then made various deposits into Mrs. Zagorac’s account that corresponded to past charges on Mrs. Zagorac’s credit card. She also changed the password for Mrs. Zagorac’s online banking so Ivan could no longer independently verify Mrs. Zagorac’s banking transactions.
[18] Nina declined to answer questions from either Ivan or Samuel regarding the charges incurred by Mrs. Zagorac, stating that she would only do so if Mrs. Zagorac asked her to share such information with them.
[19] On October 1, 2019 and October 11, 2019, this court granted and upheld, respectively, an injunction prohibiting Nina from dealing with Mrs. Zagorac’s property (the “Injunction”) other than for Mrs. Zagorac’s daily living expenses, the cost of which is capped.
Nina’s Accounting
[20] Initially, Nina refused to account for more than one joint account held by Mrs. Zagorac and her. Eventually she produced a more comprehensive accounting. Ivan responded with a Notice of Objection, setting out his concerns relating to her accounting, to which Nina has not responded.
[21] A mediation among the parties has not resolved the accounting issues. The parties have also not been able to agree to a plan for the management of Mrs. Zagorac’s property and personal care in the interim.
[22] On November 9, 2020, Nina wrote to the case management judge in this matter stating that if she were denied responsibility for the management of Mrs. Zagorac’s property, she would cease to provide care to Mrs. Zagorac, and she and Sean would move away from Mrs. Zagorac’s residence.
Powers of Attorney
[23] On February 13, 2015, Mrs. Zagorac, with the assistance of Andrea Tratnik of Beard Winter LLP, executed estate planning documents, including a will and powers of attorney. Mrs. Zagorac appointed Ivan as her attorney for property, and Nina as the alternative (the “2015 Power of Attorney for Property”). She appointed Ivan, Nina and Samuel as her attorneys for personal care (the “2015 Power of Attorney for Personal Care”, and together with the 2015 Power of Attorney for Property, the “2015 Powers of Attorney”).
[24] In January 2016, Nina sent an email to Ms. Tratnik to advise her that Nina had hired a different lawyer for Mrs. Zagorac and cancelling an appointment that had been scheduled with her that week. In that email, Nina advised that when Mrs. Zagorac had signed the 2015 Powers of Attorney and will, Mrs. Zagorac had been pressured and did not understand her estate planning. Accordingly, Mrs. Zagorac would be changing her will and powers of attorney.
[25] Ms. Tratnik responded by email to Nina to acknowledge the cancellation of the meeting with her and made this observation about Mrs. Zagorac’s estate planning: “It is my impression that changes are being proposed in light of such [family] friction and I do have some concerns that your mother is being pressured – when I spoke with your mother on the phone, I could hear you coaching her on what to say in the background. To me this is a red flag.”
[26] On November 13, 2017, Mrs. Zagorac sought advice from the Advocacy Centre for the Elderly regarding her capacity to revoke the 2015 Powers of Attorney. She then revoked them.
[27] On September 18, 2018, Ingrid Boiago, a designated capacity assessor, fluent in Serbian, assessed Mrs. Zagorac. She prepared a report dated October 3, 2018 (the “2018 Assessment Report”), in which she found Mrs. Zagorac “capable of revoking, changing or assigning her Power of Attorney for Property and Personal Care as she chooses.”
[28] A year later, Ms. Boiago assessed Mrs. Zagorac again and prepared a report dated October 1, 2019 (the “2019 Assessment Report”). Again, she found Mrs. Zagorac “capable of revoking, changing or assigning her Power of Attorney for Property and Personal Care as she chooses.”
[29] On October 25, 2019, Nina took her mother to have new powers of attorney prepared by a lawyer, Reginald Murray McLean. An interpreter fluent in Serbian was present at the meeting. Mrs. Zagorac executed a power of attorney for property in which she appointed Nina as her Attorney for Property, and in the alternative, Sean (the “2019 Power of Attorney for Property”). Mrs. Zagorac made the same appointments on a new power of attorney for personal care (the “2019 Power of Attorney for Personal Care”, and together with the 2019 Power of Attorney for Property, the “2019 Powers of Attorney”).
Positions of the Parties
[30] Ivan submits that Mrs. Zagorac is not capable of managing her property or personal care and that she is vulnerable to undue influence from Nina. He asserts that Nina manipulated Mrs. Zagorac into making the 2019 Powers of Attorney by controlling the information provided to Ms. Boiago and Mr. McLean. Accordingly, Ivan asserts that the 2019 Powers of Attorney are not valid on the basis of lack of capacity or undue influence, or both. Therefore, he asserts that it is imperative that Mrs. Zagorac’s capacity be re-assessed and that a fresh functional assessment be undertaken in order that Mrs. Zagorac’s family can formulate an appropriate plan for her care.
[31] Ivan submits that Nina is isolating him and his family from Mrs. Zagorac, by changing the locks on Ms. Zagorac’s residence and denying him and his children an opportunity to visit with Mrs. Zagorac. Since the commencement of this litigation, Ivan has had only one visit with Mrs. Zagorac while she was in hospital.
[32] Ivan further submits that Mrs. Zagorac’s RRSPs diminished in value by one third over the course of approximately two years since he moved out of Mrs. Zagorac’s residence. He believes that Nina is diverting Mrs. Zagorac’s funds to herself in breach of Nina’s fiduciary duties and that she is evading scrutiny of her activities relating to Mrs. Zagorac’s property. If Nina, who self-describes as someone with a shopping addiction, continues to deal with Mrs. Zagorac’s property in this way, Ivan asserts that Mrs. Zagorac will not have the funds to continue living in her own home, as opposed to a long-term care facility, which is contrary to Mrs. Zagorac’s wishes.
[33] Nina asserts that Mrs. Zagorac is capable of managing her property and that there is no evidence that Nina has relied on the 2019 Power of Attorney for Property. She submits that Mrs. Zagorac makes her own property decisions, and Nina merely assists in executing on those decisions as a devoted daughter.
[34] Nina denies ever having used her mother’s funds, other than approximately $5,000, which she submits her mother agreed to as part gift and part loan, and Nina submits that she has repaid most of the loan. Nina asserts that Mrs. Zagorac consented to all the renovations to the house, including the bathroom, as well as the various purchases made for her benefit.
[35] Further, Nina asserts that no additional capacity assessment is required because Mrs. Zagorac was assessed by Ms. Boiago, a qualified capacity assessor, in both 2018 and 2019, and found to be capable of revoking, changing or assigning her Power of Attorney for Property and her Power of Attorney for Personal Care. Nina also submits that Mr. McLean, who drafted the 2019 Powers of Attorney, was satisfied that Mrs. Zagorac had the capacity to make the 2019 Powers of Attorney.
[36] Mrs. Zagorac submits that Ivan has not met his onus to show reasonable grounds to believe that she does not have capacity to manage her property and her personal care.
[37] Mrs. Zagorac further submits that she wants to live in her own house for the rest of her life. She trusts Nina and Sean and wants them to look after her and her property.
Issues
[38] The issues in this matter are as follows:
Should Ivan be given leave to amend his notice of application?
Should Mrs. Zagorac be ordered to undergo an assessment with respect to her capacity to manage property, and her capacity to manage personal care, as well as a functional assessment?
Should Nina be ordered to file an application to pass her accounts?
Should rents payable by Sean be ordered to be paid to Mrs. Zagorac and should Sean be removed as a joint bank account holder on Mrs. Zagorac’s bank account?
Should the 2019 Power of Attorney for Property be suspended, and a temporary guardian of property appointed until further court order?
Should the 2019 Power of Attorney for Personal Care be suspended, and decisions be made pursuant to the Health Care Consent Act, 1996 S.O. 1990, c. 2, or jointly by Ivan, Nina and Samuel until further court order?
Evidence of Mrs. Zagorac’s Capacity
Ivan
[39] Ivan deposed that Mrs. Zagorac was diagnosed with dementia in 2015. In 2016, it was confirmed that Mrs. Zagorac had Alzheimer’s disease, and that diagnosis was refined in 2020 as dementia with possible corticobasal syndrome likely of the Alzheimer’s type.
[40] Since December 2015, Mrs. Zagorac’s cognition has been tested using Mini-Mental Status Exams (“MMSE”) and the Montreal Cognitive Assessment (“MoCA”). Her scores declined each year. In August 2019, she scored 14/30 on the MMSE and could not complete the MoCA.
[41] Ivan deposed that Mrs. Zagorac has lost her fine motor skills and can no longer use a computer. When he last saw her in March 2020, she asked him the same basic questions within a span of ten minutes.
[42] Attached to Ivan’s affidavit in support of his application is a Functional Activities Questionnaire completed by the Local Health Integration Network (the “LHIN”) on August 14, 2019, on which Mrs. Zagorac scores 22. The form indicates that a score of 9 or more (dependent in 3 or more activities) indicates a loss of patient function. The form indicates that Mrs. Zagorac is dependent in the areas of writing cheques, paying bills, and balancing a cheque book; assembling tax records or papers; preparing a balanced meal; as well as travelling out of the neighbourhood, and arranging to take buses. The LHIN evaluator noted that Mrs. Zagorac was not able to complete sequential tasks, such as making a cup of coffee.
Samuel
[43] Samuel swore an affidavit on November 1, 2019, in which he deposed that though Mrs. Zagorac has a degree in mathematics and worked as an actuarial analyst, using English fluently, she has since forgotten most of her English language skills. Samuel deposed that Mrs. Zagorac now speaks Serbian but is starting to forget some Serbian words as well.
[44] Samuel also deposed that Mrs. Zagorac had to stop working as an actuarial analyst in 2013 and take early retirement due to her declining mental abilities.
[45] Samuel’s evidence is that over the course of five minutes, Mrs. Zagorac will ask the same question again and again, and has great trouble explaining simple things. In a telephone conversation with her, Mrs. Zagorac could not tell him her credit card balance or clearly articulate what expenses relating to the bathroom renovations would be paid by Nina and which would be paid by Mrs. Zagorac.
Fahrija Avdakovic
[46] In Fahrija Avdakovic’s affidavit dated December 9, 2019, she deposed that she is a good friend of Mrs. Zagorac whom she met in 1998. She and her son were then invited to stay in the Zagorac home for seven days when they moved to Canada from Sarajevo. Ms. Avdakovic moved into the Zagorac residence again in 2015 while her apartment was being renovated. She stayed there for six to eight months and continued to be a regular visitor once she returned to her own apartment.
[47] Ms. Avdakovic deposed that she observed that, since 2015, Mrs. Zagorac has been suffering memory loss and that Ms. Avdakovic had suggested to Nina that Mrs. Zagorac seek medical treatment and that Nina contact someone from the LHIN.
[48] Ms. Avdakovic deposed that Mrs. Zagorac got lost on the subway trying to make her way to Ms. Avdakovic’s home. Subsequently, when Mrs. Zagorac took a taxi to visit Ms. Avdakovic, Mrs. Zagorac could not negotiate the proper taxi fare, but simply turned all of her money over to the taxi driver on the trip to Ms. Avdakovic’s home and then had no taxi fare to get home. Ms. Avdakovic deposed that Mrs. Zagorac had lost her debit card many times and could not recall her PIN.
[49] Ms. Avdakovic also deposed that she reported to Ivan that Mrs. Zagorac was losing her memory of the streets in her own neighbourhood. Ms. Avdakovic further deposed that when she and Mrs. Zagorac had lunch in a restaurant recently, unlike other times, Mrs. Zagorac could not use the debit card device to pay for lunch. She cited another example of Mrs. Zagorac’s inability to use a debit machine when she wished to purchase a pair of boots. Ms. Avdakovic also deposed that Mrs. Zagorac had lost her ability to hold a conversation on current events.
[50] Ms. Avdakovic also observed that Mrs. Zagorac could not recall Nina’s telephone number, became easily confused and eventually stopped answering the phone. When Ms. Avdakovic mentioned this to Nina, Nina explained that there was something wrong with the phone.
[51] Ms. Avdakovic deposed that she had noticed that latterly Mrs. Zagorac could no longer use Skype to contact friends in Belgrade; that she was repeating the same questions constantly; spoke of events from years ago as though they were current; and easily lost her train of thought.
Fern La Haye
[52] Fern La Haye is a neighbour of Mrs. Zagorac. Ms. La Haye swore an affidavit on March 10, 2021, in which she deposed that by August 2020, she was attending at the Zagorac residence approximately once a week. Initially, she was invited there by Nina to assist Nina with her receipts and accounting for Mrs. Zagorac’s property, but eventually Nina asked Ms. La Haye to assist with Mrs. Zagorac’s care as well. Ms. La Haye observed that the LHIN was providing a few hours of personal support work on Saturdays. Ms. La Haye declined to provide physical assistance to Mrs. Zagorac on the basis that she was not a personal support worker (“PSW”). Instead, she researched leads on Serbian-speaking PSWs workers and suggested to Nina that she place an advertisement for such assistance.
[53] While at the residence, Ms. La Haye observed that Mrs. Zagorac no longer spoke English, only Serbian, and it was necessary for Nina to translate so Ms. La Haye could understand Mrs. Zagorac. Ms. La Haye deposed that during these conversations, Nina would admit to Ms. La Haye that Mrs. Zagorac did not always understand the conversation. During her visits, Ms. La Haye witnessed Mrs. Zagorac’s confusion, including not knowing where in the house the bathroom was, not knowing why she was where she was, and an inability to use appliances, or follow the sequence of 1 through 6 steps to operate the stove. Ms. La Haye observed that even with considerable prompting by Nina, Mrs. Zagorac could only remember the month of her birth, and not the day or year. Ms. La Haye deposed that she noticed significant cognitive decline in Mrs. Zagorac over the last six to nine months before swearing her affidavit.
[54] Ms. LaHaye also testified that she had witnessed Nina coaching Mrs. Zagorac and repeating certain narratives about the litigation and the renovations. She also deposed that in 2020 Nina admitted to her that Nina received emails from Mrs. Zagorac’s lawyer on Mrs. Zagorac’s behalf because Mrs. Zagorac could not use a computer. Ms. La Haye further deposed that she observed Nina sitting in on a meeting between Mrs. Zagorac and her counsel, and that Nina confided in her that sometimes Mrs. Zagorac did not understand Nina even if she was speaking Serbian.
[55] Ms. La Haye deposed that, in her observation, Mrs. Zagorac will generally do what Nina tells her to do.
Nina
[56] Nina relies on the 2019 Assessment Report and the 2018 Assessment Report in her assertion that Mrs. Zagorac was capable of making the 2019 Powers of Attorney. She also submits that Mrs. Zagorac requires help managing her financial affairs, due partially to motor issues, special visual processing and other less diagnosable causes.
[57] Nina acknowledges that without herself or a 24-hour live-in caregiver, Mrs. Zagorac would not be able to look after herself. She accepts that Mrs. Zagorac cannot go out on her own, cook meals, or toilet herself consistently.
Mrs. Zagorac
[58] Mrs. Zagorac swore an affidavit dated April 2, 2021. Her affidavit is primarily focused on her wish to “live in my house until I die”, and to have Nina and Sean look after her and her property, and not the “government.” She also deposed that she did not trust Ivan. On her capacity, she states: “I may be old and slow, but I am not stupid.” She makes no mention of the capacity assessments or any cognitive testing she has undergone. She states that she does not believe that her “mind is so bad as Ivan alleges.”
[59] Under cross-examination, Mrs. Zagorac was not able to say for how long she had lived in her house or what type of expenses were involved in its upkeep. When asked what would happen if she did not have enough money to stay in her house, her comment was not responsive to the question.
Jasminka Batagelji
[60] Jasminka Batagelji lives in Croatia and has been Mrs. Zagorac’s friend for 57 years. In her affidavit dated April 12, 2021, she deposed that she has maintained regular contact with Mrs. Zagorac even after Mrs. Zagorac moved to Canada in 1987. Ms. Batagelji states her belief that Mrs. Zagorac is “completely capable of understanding” what she is told, which Ms. Batagelji measures by Mrs. Zagorac’s reactions, over Skype, including laughter, or looks expressing worry, happiness, approval or disapproval.
[61] Ms. Batagelji attests that her visits with Mrs. Zagorac are facilitated by Nina or Sean using Skype and that Nina is there to help Mrs. Zagorac overcome her speech problems.
Thuy Van Phung
[62] Thuy Van Phung is a PSW and has worked with Mrs. Zagorac for the past year, four days a week, for one hour each day. In her affidavit forming part of Mrs. Zagorac’s record, she deposed that Mrs. Zagorac was capable of understanding what Ms. Phung is trying to tell her, and while Mrs. Zagorac’s English is not perfect, Ms. Phung deposed that she believed Mrs. Zagorac understood Ms. Phung’s hand gestures.
Tazim Lakhani
[63] Tazim Lakhani is a social worker with WoodGreen Community Services and worked with Mrs. Zagorac from November 2019 to December 2020. In her affidavit forming part of Mrs. Zagorac’s record, she deposed that Mrs. Zagorac understands that she has savings, a good pension, and rental income from the house she owns.
Ingrid M. Boiago
[64] In 2018, Nina asked Ms. Boiago to assess Mrs. Zagorac’s capacity to “assign POA for both property and care and also to assess her ability to make a new will.” In 2019, Ms. Boiago was asked to make the same assessment, in addition to an assessment with respect to Mrs. Zagorac’s ability to “ask for and retrieve previous forms of her POA and will including her last wishes.” In both the 2018 Assessment Report and the 2019 Assessment Report, Ms. Boiago refers to the test set out in s. 8 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”) relating to capacity to appoint an attorney for property. There is no notation in either Report that Ms. Boiago was asked to assess Mrs. Zagorac’s capacity to manage property.
[65] Yet, in each of the assessments, Ms. Boiago makes very similar observations regarding Mrs. Zagorac’s ability to manage her finances. In the 2018 Assessment Report, she stated:
… she remains quite able and capable of managing her own finances. She has a slight hesitation when speaking due to word finding problems and she herself endorses a slight memory loss. There is no evidence of cognitive decline and her executive functioning is intact. Her mathematical skills are intact. She is able to converse well in both English and Serbo-Croatian, although she feels that her English speaking is diminished. She can accurately account for all of her expenditures and income as well as her income sources. She is aware of her net worth.
[66] Ms. Boiago makes a nearly identical observation in the 2019 Assessment Report but notes that: “Her mathematical skills are not as sharp as they were a year ago and she relies on her daughter to explain things to her.” She also qualifies Mrs. Zagorac’s awareness of her net worth by adding that “her high-level skill with numbers is somewhat diminished at this date from a year ago, which is why she relies on her daughter.”
[67] In the 2018 Assessment Report, Ms. Boiago stated: “Mrs. Zagorac acknowledges that she can manage her financial affairs on her own with the assistance of her daughter Nina.” In the 2019 Assessment Report, Ms. Boiago stated: “[Mrs. Zagorac] is well aware and able to still guide her financial matters and nothing gets spent until she gives approval and consent.” She further stated: “In my opinion, Mrs. Zagorac has the capacity to understand and appreciate her financial management. She has full understanding in regards to the extent of her property and net worth.”
[68] In the 2019 Assessment Report, Ms. Boiago observed that Mrs. Zagorac was exhibiting more medical issues and that some of her symptoms could lead someone to perceive her to be less cognitively aware. Ms. Boiago observed that Mrs. Zagorac had word finding difficulties but no “perceptive or processing of information difficulties.” Ms. Boiago concluded that Mrs. Zagorac “retains the ability to direct her daughter and make purchases on her behalf”, and that “she remains quite able and capable of managing her own finances.”
[69] The conclusion that Ms. Boiago reaches in both the 2018 Assessment Report and the 2019 Assessment Report is as follows:
In my opinion, Mrs. Zagorac is presently capable of revoking or assigning her Power of Attorney for Property and Personal Care as she chooses. I found her to be cognizant of her income and expenses, and to be knowledgeable of an approximation of her net worth. She understood the types of decisions her attorney would be called upon to make on her behalf. She understood the risks of dissipation of estate if her attorney mismanages whether in an abusive or neglectful way. She understood that she can revoke the Power of Attorney at any time provided she continues to meet the test set out in S.8.”
[70] In the 2018 Assessment Report, Ms. Boiago observes that “[A]lthough Mrs. Zagorac is quite clear as to what she wants, she remains easily influenced by others, namely her children due to her constant efforts to be ‘fair’ to all of them.’”
Reginald McLean
[71] On his examination, Mr. McLean deposed that he satisfied himself that the criteria for capacity for making a power of attorney for property under s. 8 of the SDA and the criteria for capacity for making a power of attorney for personal care under s. 47 of the SDA were met through discussion with Mrs. Zagorac and Nina, and through his review of information in the 2019 Assessment Report and the 2018 Assessment Report.
Issue 1: Should Ivan be permitted to amend his application?
[72] Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that on motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[73] Ivan moves to further amend his application to seek: i) a declaration that Mrs. Zagorac is incapable of managing property; ii) an order and declaration that Mrs. Zagorac is incapable of managing her personal care; iii) the opinion, advice and direction of the court regarding the validity of any new continuing powers of attorney for property and powers of attorney for personal care granted by Mrs. Zagorac and in particular the 2019 Powers of Attorney; iv) an order for directions respecting the appointment of a guardian of property and guardian of personal care of Mrs. Zagorac if the revocation of the 2015 Powers of Attorney is valid, and v) an order adding Sean as a party, if required, and certain orders against Sean.
[74] Ivan submits that at the time he filed his application, he did not have information that later came to his attention, including Mrs. Zagorac’s medical records, which he just received in March 2021. He submits that it was not until early 2021 that information he received caused him to have serious doubts about his mother’s ability to manage her personal care. At that time, he advised the other parties that he would be seeking this relief. The other parties have had the medical records for some time.
[75] Ivan’s concerns about Mrs. Zagorac’s personal care include Nina’s proposed renovations to Mrs. Zagorac’s residence that could limit Mrs. Zagorac’s current access to the outdoors, especially in the event of an emergency, and Nina’s refusal to increase support from PSW services offered by the LHIN, notwithstanding her complaints about caregiver burnout.
[76] It has also come to Ivan’s attention that the LHIN assisted Nina to apply for a grant from the Alzheimer’s Society of Toronto to hire private PSWs. Ivan submits that the $750 grant does not appear in Nina’s accounting and Nina told him that she used it for clothing for her mother. Ivan also learned that Nina continues to provide take-out food to Mrs. Zagorac despite the recommendation to provide pureed food to reduce the risk of choking. These latter matters about Mrs. Zagorac’s nutrition were brought to Ivan’s attention by Ms. La Haye, who reached out to him.
[77] Neither Mrs. Zagorac nor Nina strongly opposes Ivan’s request to amend his application. Neither has shown any prejudice that would result. Accordingly, I grant Ivan leave to amend his application to include the additional relief sought.
Issue 2: Should Mrs. Zagorac undergo another capacity assessment or a functional assessment, or both?
[78] For the reasons that follow, I find that Ivan has shown reasonable grounds to believe that Mrs. Zagorac is incapable of managing her property and her personal care. Accordingly, a further capacity assessment of Mrs. Zagorac’s capacity to manage property and personal care is appropriate, as is a fresh functional assessment. I do not make this decision lightly, but, rather, after a close review of all of the evidence and with a mind to striking an appropriate balance between Mrs. Zagorac’s right to autonomy and privacy and the duty of the state to protect vulnerable persons.
Law
[79] Section 2 of the SDA provides that a person who is eighteen years of age or more is presumed to be capable of entering into a contract.
[80] Section 6 of 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 a decision.
[81] Section 45 of the SDA provides that a person is incapable of personal care if the person is not able to understand information that is relevant to making a decision concerning his or her own health care, nutrition, shelter, clothing, hygiene or safety, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.
[82] Section 79(1) of the SDA provides that if a person’s capacity is in issue, and the court is satisfied that there are reasonable grounds to believe that the person is incapable, the court may, on motion on or its own initiative, order that the person be assessed by one or more assessors named in the order, for the purpose of giving an opinion as to the person’s capacity.
[83] In Abrams v. Abrams, 2008 O.J. No. 5207 (Ont. S.C.J.), at para. 50, Strathy J., as he then was, stated that, in exercising its discretion, the court must “balance the affected party’s fundamental rights against the court’s duty to protect the vulnerable.”
[84] In deciding whether to order an assessment in Abrams, a case in which there were existing assessments, Strathy J. acknowledged the importance of the purpose of the SDA generally, which is to promote personal autonomy, as well as to enhance the protection of persons of limited or marginal capacity, and set out the following factors to be considered and balanced in determining whether, in all of the circumstances, an assessment should take place:
(a) the terms of s. 79 of the SDA, namely:
(i) the person’s capacity must be in issue; and
(ii) there are reasonable grounds to believe that the person is incapable;
(b) the nature and circumstances of the proceedings in which the issue is raised;
(c) the nature and quality of the evidence before the court as to the person’s capacity and vulnerability to exploitation;
(d) if there has been a previous assessment, the qualifications of the assessor, the comprehensiveness of the report and the conclusions reached;
(e) whether there are flaws in the previous report, evidence of bias or lack of objectivity, a failure to consider relevant evidence, the consideration of irrelevant evidence and the application of the proper criteria;
(f) whether the assessment will be necessary in order to decide the issue before the court;
(g) whether any harm will be done if an assessment does not take place;
(h) whether there is any urgency to the assessment; and
(i) the wishes of the person sought to be examined, taking into account his or her capacity.
Analysis
Is Mrs. Zagorac’s capacity in issue, and are there reasonable grounds to believe that she is incapable?
[85] In my view, there is little doubt that Mrs. Zagorac’s capacity is in issue. A diagnosis of Alzheimer’s disease was confirmed in 2016, and the diagnosis was refined in 2020 as dementia with possible corticobasal syndrome likely of the Alzheimer’s type. Her cognitive function has been tested using MMSE and MoCA tests over the course of five years and her scores have declined with each testing. A number of witnesses have attested to Mrs. Zagorac’s forgetfulness, confusion, and inability to manage her property and aspects of her personal care.
[86] Notwithstanding these diagnoses, Nina has rejected the Alzheimer’s disease diagnosis. She has spent time researching her mother’s symptoms and suggested to Ms. Boiago that her mother’s condition was “normal pressure hydrocephalus” (“NPH”). Nina told Ms Boiago, lawyers, and evaluators from the LHIN that this was her mother’s diagnosis and it was likely reversible, when her mother had never received such a diagnosis from any specialist.
[87] In October 2019, Nina knew that a recent MRI showed cognitive decline apparently consistent with early onset dementia “versus changes related to NPH”. NPH was ruled out by Dr. Tagn-Wai in 2020.
[88] In February 2020, Nina sent a text to Ms. La Haye in which she stated that she took her mother to one of the best neurologists at Toronto Western Hospital who diagnosed Mrs. Zagorac with “a terrible disease, which was not Alzheimer’s disease, but was not curable and would only get worse, and it could result in the need for her to be admitted into a long-term care facility against her will.” In March 2020, Nina told Ivan that a possible diagnosis was progressive supranuclear palsy.
[89] In Mrs. Zagorac’s affidavit, sworn on April 2, 2021, she did not adduce evidence in support of her capacity to manage her property. However, under the SDA, she is presumed to have such capacity.
[90] Mrs. Zagorac struggled on her cross-examination. The interpreter repeatedly stated that that he could not understand what she was saying. Mrs. Zagorac could not articulate how long she had been living in her house, or what kinds of expenses she had for upkeep of the house. On other questions relating to her property, she deferred to Nina. Mrs. Zagorac seemed clear on the concept that there were “people” in the house, presumably the tenants, who paid to help with the costs of upkeep. She was also clear that she wanted to stay living in her house. Beyond referring to the tenants, she could not explain, in any way, how her finances would need to be managed, or by whom, in order to allow her to continue to live in the house. Mrs. Zagorac had no insight into the effect of costly renovations on her ability to continue to live in her residence. She could only say that the renovations took a long time. I acknowledge that some of Mrs. Zagorac’s struggle to respond to the questioning may have related to her impoverished word retrieval that both Mrs. Zagorac herself and Ms. Boiago acknowledged; however, on balance, her desultory testimony on cross-examination, in my view, adds to the reasonable grounds to believe that she lacks capacity.
[91] On an intake form for the LHIN completed in 2019, Nina indicated that Mrs. Zagorac required 40 active hours of monitoring in the previous three days. This evidence strongly suggests that Mrs. Zagorac does not have the capacity to manage her personal care.
The nature and circumstances in which the issue of capacity is raised
[92] Based on the evidentiary record, there is considerable anecdotal evidence that Mrs. Zagorac has not been able to manage her finances since 2017. The record shows that in that year, she got lost in her own neighbourhood, could not remember things from moment to moment, could not perform independent activities of daily living, or follow sequential instructions. This evidence is further supported by Mrs. Zagorac’s declining scores on the MMSE and MoCA tests, and her inability to use a debit card device or remember her PIN. Her Alzheimer’s disease diagnosis in 2015 is challenged by Nina, but unlike Nina’s diagnosis of NPH”, no medical professional has rejected the Alzheimer’s disease diagnosis.
The nature and quality of the evidence before the court as to the person’s capacity and vulnerability to exploitation
[93] The evidence before the court from the applicant is largely unbiased and impartial. It includes health records for Mrs. Zagorac, including test scores on cognitive testing; sworn statements from Ms. Avdakovic, a close friend of Mrs. Zagorac, who spent time with her outside of Mrs. Zagorac’s residence; and sworn statements from Ms. La Haye, a neighbour who spent a considerable amount of time in Mrs. Zagorac’s residence in the months leading up to the application. It also includes evidence from Mrs. Zagorac’s cross-examination.
[94] Another of Mrs. Zagorac’s friends, Ms. Batagelji, also provided evidence with respect to Mrs. Zagorac’s capacity, as did one of her PSWs, Ms. Van Phung. I do not find the evidence of either of these deponents compelling on the issue of capacity. Their evidence supports their respective perceptions that Mrs. Zagorac appeared to them to understand what each was saying to her when they spoke to her. Neither gives examples of any discussion with Mrs. Zagorac that would have tested her ability to manage her property or personal care.
[95] Importantly, no assessments of Mrs. Zagorac’s capacity to manage her property or personal care have been done. While Ms. Boiago drew a conclusion with respect to Mrs. Zagorac’s ability to manage her finances in the 2018 Assessment Report and in the 2019 Assessment Report, she conceded in her cross-examination that she was not asked to make this assessment. There is no reference in either of her Assessment Reports to the test set out in the SDA for assessing capacity to manage property.
[96] Ms. La Haye spent a considerable period of time in Mrs. Zagorac’s residence and was in a good position to assess the dynamics between Mrs. Zagorac and Nina. She deposed that in her observation, Mrs. Zagorac did what she was told by Nina, and Nina participated in meetings between Mrs. Zagorac and her lawyer and also received emails from Mrs. Zagorac’s lawyer on behalf of Mrs. Zagorac. Ivan deposed that in a telephone conversation he had with his mother, he could hear the turning of pages and he believed that his mother was reading from a script that had been prepared by Nina.
[97] Ms. Boiago includes a statement in the 2018 Assessment Report that Mrs. Zagorac is clear as to what she wants, but remains easily influenced by others, namely, her children.
The qualifications of Ms. Boiago and the comprehensiveness of her reports, the conclusions she reached, and whether there are weaknesses in the reports; and the subsequent assessment by Mr. McLean
[98] Ms. Boiago is a registered nurse, a former police officer, and a qualified capacity assessor. She is also fluent in Serbian. Her qualifications were not challenged.
[99] In her cross-examination, Ms. Boiago confirmed that she was not asked to make assessments of Mrs. Zagorac’s capacity to manage her property and her personal care, but rather Mrs. Zagorac’s capacity to make powers of attorney and a will.
[100] The respondents nonetheless rely on Ms. Boiago’s Assessment Reports for her conclusion that Mrs. Zagorac has capacity to manage property. Ms. Boiago concludes in the 2019 assessment: “In my opinion, Mrs. Zagorac has the capacity to understand and appreciate her financial management. She has full understanding in regards to the extent of her property and net worth.” However, Ms. Boiago was not asked to make this determination, her reports do not set out the proper test for making this determination (as set out in s. 6 of the SDA), and her notes, which were reviewed in her cross-examination, confirm that she did not apply the criteria of that test or perform an assessment of Mrs. Zagorac’s capacity to manage property.
[101] I find that Ms. Boiago’s assessment of Mrs. Zagorac’s capacity to give powers of attorney is flawed. Ms. Boiago did not consider relevant or independent evidence, including financial statements, medical records, or the results of cognitive testing. She did not apply all the proper criteria, as set out in the SDA, and she did not specifically address that part of the test that considers whether Mrs. Zagorac appreciated that unless her attorney manages the property prudently, its value may decline. These criteria were particularly important in the case of Nina, should she be required to assume the role of an attorney for property. Nina admitted to having an addiction to shopping, she was, at the time of the assessment, being challenged on her significant over-spending on renovations, and she admitted to Ms. La Haye, that as long as something made her mother happy, it was alright for Nina to buy it for her. Ms. Boiago stated that Mrs. Zagorac “understood the risks of dissipation of estate if her attorney mismanages whether in an abusive or neglectful way” but offers no support for this conclusion. There is no evidence of a discussion of the risk that Mrs. Zagorac’s desire to continue living in her own home could be defeated if Nina, as an attorney for property, continuously spent more money than Mrs. Zagorac earned, or if Mrs. Zagorac’s annual income were reduced because Nina stopped collecting rent from Sean or other tenants for Mrs. Zagorac’s benefit. Ms. Boiago concluded that Mrs. Zagorac understood the types of decisions her attorney would be called upon to make on her behalf but does not cite any examples of the types of decisions discussed between them during the assessment.
[102] While Ms. Boiago refers to s. 8 of the SDA, she makes no reference to s. 47 and does not state the test for the capacity to make a power of attorney for personal care. Ms. Boiago was not provided with Mrs. Zagorac’s relevant health history and she did not review any health records. By 2019, Mrs. Zagorac’s health records showed that Mrs. Zagorac was unable to perform instrumental activities of daily living, such as self-care tasks like eating, bathing, dressing, mobility, and grooming.
[103] Under cross-examination, Ms. Boiago admitted that almost three of her four pages of notes were notes taken from Nina and not directly from Mrs. Zagorac. The information that Mrs. Zagorac provided about her income was inaccurate and Ms. Boiago did not verify it.
[104] Ms. Boiago admitted that she was not told of the Alzheimer’s disease diagnosis in 2015 or that it was worse in 2019. She also confirmed that she did not conduct any MMSE or MoCA testing because she did not think it necessary in Mrs. Zagorac’s case. Nor did she review the results of these tests taken by Mrs. Zagorac historically. Though Ms. Boiago admitted that she had some doubt about Nina’s diagnosis of NPH, she did not ask whether there had been any other diagnosis or ask to see any medical records. Mrs. Zagorac herself did not volunteer any medical problems other than “old age” and Ms. Boiago did not make any further inquiries about medical conditions.
[105] Ms. Boiago admitted that she only got information from Mrs. Zagorac and Nina and she did not interview any other family member, like Ivan or Samuel.
[106] Regrettably, Ms. Boiago’s Assessment Reports do not provide any analysis of Mrs. Zagorac’s answers to questions posed or give any examples of the questions Ms. Boiago asked Mrs. Zagorac to satisfy herself that Mrs. Zagorac was able to “manage her affairs.” Ms. Boiago concluded that Mrs. Zagorac was “fully aware of all of her expenditures and expenses” but made no notes about reviewing those expenditures with Mrs. Zagorac. Under cross-examination, Ms. Boiago confirmed that if something was not in her notes, it was either not important or not discussed.
[107] Ms. Boiago’s Assessment Reports would also have benefited from the results of probing into possible undue influence by Nina. It was Nina who arranged the appointment, Nina who attended at the appointment (albeit not in the immediate vicinity of Mrs. Zagorac), and Nina who would be chosen as the attorney for property over Ivan, who was named the attorney for property under the 2015 Power of Attorney. Ms. Boiago was aware that Ivan had made a complaint to the police regarding Nina, but Ms. Boiago did not ask for any details about this event.
[108] Because Mr. McLean, by his own testimony, relied significantly on Ms. Boiago’s Assessment Reports, he too failed to conduct his own comprehensive assessment of Ms. Boiago’s ability to give a power of attorney for property. He did not appreciate that Ms. Boiago failed to consider all of the relevant factors set out in the SDA. He did not make any inquiries about possible litigation relating to the appointment of an attorney for property.
[109] Mr. McLean had no history with Mrs. Zagorac. The very day he met her, she executed the 2019 Powers of Attorney that he prepared for her that day. On that day, he was unaware that Ivan’s application had been commenced and that the Injunction had been granted. Had Mr. McLean known about the Injunction, it is likely that he would have better appreciated why Nina was being asked to account to Ivan respecting Mrs. Zagorac’s property.
[110] Mr. McLean did not review any financial information or sources of income with Mrs. Zagorac. Nina had told Mr. McLean that she had taken Mrs. Zagorac to the Advocacy Centre for the Elderly to revoke her existing powers of attorney, but Mr. McLean did not discuss this matter with Mrs. Zagorac. Mr. McLean also knew that Ms. Tratnick had prepared powers of attorney in 2015 but did not inquire as to why Ms. Tratnick was not being asked to prepare the later powers of attorney. In fact, Ms. Tratnick had told Nina that she was concerned about Nina coaching Mrs. Zagorac, which she saw as a “red flag.” Nina took Mrs. Zagorac to a previously unknown lawyer to make new powers of attorney and Nina controlled the information that Mr. McLean received. This conduct raises the specter of undue influence.
[111] Mr. McLean testified that he did not spend any time discussing the power of attorney for personal care with Mrs. Zagorac but noted that Mrs. Zagorac was favourably inclined toward Nina. He recalled that Mrs. Zagorac denied any medical issues, but he was aware that she had memory issues and she could not, for example, remember her address. Like Ms. Boiago, Mr. McLean did not probe into the relationship between Ivan and Nina but relied on Nina’s narrative.
Is the assessment required to decide the issues before the court?
[112] An assessment is required to determine the issues before this court. Nina relies on Mrs. Zagorac’s capacity to excuse her expenditures, allegedly made on Mrs. Zagorac’s behalf. Nina asserts that Mrs. Zagorac had approved every transaction. Nina also relies on Mrs. Zagorac’s ability to appreciate the consequences of an alleged decision by Mrs. Zagorac to permit Nina to divert Sean’s rent to herself as opposed to Mrs. Zagorac, and to not account for that rent. Mrs. Zagorac deposed that Sean helps to pay for Nina’s lawyer, but she did not indicate any awareness that he was doing so with funds that would otherwise be paid to Mrs. Zagorac as rent.
[113] Mrs. Zagorac also deposed that she would like to help to pay for Nina’s lawyer herself, and that Nina and Sean should not have to pay rent. However, there is no evidence to suggest that Mrs. Zagorac appreciates that if she helps to pay Nina’s legal fees and waives Sean’s rent, she may not have enough money to achieve her stated objective: “to live in my house until I die.”
Would any harm be caused by not ordering the assessment?
[114] There is potential for harm if the assessment is not ordered. There is no agreement among Mrs. Zagorac’s children with respect to her capacity to manage property, the validity of the 2019 Powers of Attorney, the effectiveness of the revocation of the 2015 Powers of Attorney, or the adequacy of Nina’s accounting of Mrs. Zagorac’s property. Mediation among the parties has been unsuccessful. A more comprehensive assessment should advance a number of the issues and assist in bringing the application to a resolution. Mrs. Zagorac’s estate is relatively modest. She is only 68 years of age and could live for many more years. If her goal to live out the remainder of her life in her own home is to be met, an appropriate plan for the management of her property needs to be put in place sooner rather than later. Such a plan should reduce the need for costly legal proceedings.
Is there any urgency to the assessment?
[115] Ivan submits that there is no real urgency except that the application has been delayed by a year and a half and the results of the assessment will affect the passing of accounts.
[116] I do see some urgency with respect to the issues arising the in the application. Nina either does not accept, or has reluctantly, over many months, only recently come to accept, Mrs. Zagorac’s Alzheimer’s disease diagnosis. Even with some acceptance of Mrs. Zagorac’s limitations, Nina does not accept that Mrs. Zagorac may be unable to understand information that is relevant to making a decision in the management of her property, or may be unable to appreciate the reasonably foreseeable consequences of a decision or lack of a decision. This issue must be determined, and an assessment should provide useful evidence.
[117] If Mrs. Zagorac is found to be incapable of managing her property and also incapable of making a power of attorney, further steps will need to be taken to determine the validity of the 2019 Powers of Attorney and, possibly, the effect of the purported revocation of the 2015 Powers of Attorney by Mrs. Zagorac in 2017. Depending on the results, a temporary or permanent guardian may need to be appointed. In my view, these are matters that must be addressed as soon as practically possible to ensure that Mrs. Zagorac’s property is protected, if required.
[118] A functional assessment will influence short-term and long-term planning relating to Mrs. Zagorac’s property management so that her needs can be met both in the short-term and in the long-term. This assessment should also be undertaken without delay.
Wishes of Mrs. Zagorac, taking into account her capacity
[119] Mrs. Zagorac has been consistent in her wish that she would like Nina and Sean to look after her and her property. She has also expressed her distrust of Ivan and her concern that he is after her money. She also deposed that she does not trust Samuel. The issue of whether Mrs. Zagorac is expressing these views of her own free will or whether Nina has unduly influenced her to take these views of her sons is undetermined at this point.
[120] Mrs. Zagorac acknowledges that she has some memory loss, but she does not admit that she has Alzheimer’s disease. Again, it is difficult to know whether Mrs. Zagorac has come to this conclusion independently or whether Nina has unduly influenced her to believe that she is more capable than she, in fact, is. The assessments conducted by Ms. Boiago did not include an exploration of Mrs. Zagorac’s insight into her situation to determine whether she recognized her own limitations that could prevent her from meeting her own needs or meeting situational demands.
[121] While I am very much alive to Mrs. Zagorac’s privacy and autonomy concerns, and I appreciate that an assessment can be a substantial intervention or intrusion into the privacy and security of an individual, my greater concern relates to her vulnerability. Based on the evidentiary record, Nina’s spending of Mrs. Zagorac’s money could put Mrs. Zagorac in a position in which her savings are depleted and she is unable to afford private care in her own residence as opposed to a care facility. Nina’s refusal to accept additional PSW assistance when offered and her decision to spend the grant money given to her for additional PSW services on clothing raise cause for concern and suggest that Mrs. Zagorac may be being deprived of appropriate management of her finances and personal care services that she needs.
Conclusion on an assessment
[122] Based on the evidentiary record, I am satisfied that there are reasonable grounds to believe that Mrs. Zagorac is incapable. There is compelling evidence from a number of credible witnesses of a direct connection between Mrs. Zagorac’s behavior and the issue of her capacity. This evidence, considered cumulatively, provides “reasonable grounds” in the sense contemplated by s. 79 of the SDA, as discussed by the Ontario Divisional Court in Foisey v. Green, 2019 ONSC 4989 at paras. 37 to 42.
[123] Taking into account each of the factors identified in Abrams, I find that a further and more comprehensive assessment of Mrs. Zagorac’s capacity is necessary. As noted by Strathy J., as he then was, an assessment allows the court to obtain objective, independent and expert assessments of an individual’s capacity; its utility cannot be understated: Kischer v. Kischer, [2009] O.J. No. 96 (ONSC), at para. 10.
[124] There are a number of questions relating to Mrs. Zagorac’s capacity in several domains, and the court would be greatly assisted in resolving the issues in this application by a comprehensive assessment that evaluated: i) Mrs. Zagorac’s capacity to manage property; ii) Mrs. Zagorac’s capacity to manage her personal care; iii) Mrs. Zagorac’s capacity to make a power of attorney for property and a power of attorney for personal care; iii) a retrospective assessment of Mrs. Zagorac’s capacity to make the 2019 Powers of Attorney (if she is found to be incapable of making a power of attorney for property and/or personal care); and iv) a retrospective assessment of Mrs. Zagorac’s ability to revoke, in November 2017, the 2015 Powers of Attorney (if she is found to have been incapable of making the 2019 Powers of Attorney).
[125] Ivan has proposed that Dr. Sara Mitchell, of Sunnybrook Health Sciences Centre, undertake the assessment of Mrs. Zagorac. No alternative capacity assessor has been suggested. Dr. Mitchell shall, therefore, conduct the assessment and shall be provided with all relevant medical and LHIN records relating to Mrs. Zagorac, a copy of each of the 2018 Assessment Report, the 2019 Assessment Report, a copy of Ivan’s application record, a copy of the responding records of each of Mrs. Zagorac and Nina, and such other materials she considers relevant.
[126] It is evident that a personal care plan needs to be devised for Mrs. Zagorac. Nina has indicated that she is experiencing feelings of caregiver burnout from looking after Mrs. Zagorac. Nina would also like to return to work after having taken a year off to prepare her accounts. The last functional assessment was done by the LHIN in 2019.
[127] A functional needs assessment will provide the guidance that Mrs. Zagorac’s family and her PSWs will need to ensure that she can be provided with the health care support that she needs to permit her to remain in her residence for as long as reasonably possible and financially feasible.
[128] Accordingly, it is appropriate that Mrs. Zagorac be assessed by a social worker or geriatrician who shall be provided with all medical, LHIN, PSW, occupational and social work reports, and who shall seek input of each of Nina, Ivan and Samuel with a view to designing a comprehensive care plan for Mrs. Zagorac.
[129] Pending the results of the assessment and the resolution of who will have ongoing responsibility for Mrs. Zagorac’s personal care, the care plan resulting from the functional assessment shall be implemented by Nina. Mrs. Zagorac has consistently stated her wish that she prefers Nina, who has a long history of caring for her mother and taking her to her doctors’ appointments, to look after her. However, Nina shall be obligated to keep Ivan and Samuel, as family members who have a genuine interest in Mrs. Zagorac’s health, welfare and safety, apprised of Mrs. Zagorac’s wellbeing on a regular basis.
Issue 3: Should Nina be required to file a notice of application to pass her accounts?
[130] Nina has been remiss in the preparation and delivery of her accounts. Initially, in November 2019, her counsel advised that the accounts would be completed by January 2020, which then became the end of February, which then became March 31, 2021, when the accounts had still not been delivered.
[131] Ultimately, Nina attached her accounts as an exhibit to her affidavit, sworn May 9, 2021, in response to this motion.
[132] Ivan responded to the accounts by sending Nina a Notice of Objection. Nina has not responded to the Notice of Objection.
[133] Ideally, the costs of a contested passing of accounts would be avoided in this case in which available funds can be put to better uses. To avoid having to bring an application to pass her accounts, Nina will need to respond to Ivan’s Notice of Objection on a timely basis. Accordingly, Nina shall provide a comprehensive and satisfactory response to Ivan’s Notice of Objection within fourteen days of this endorsement. If, after having received the response, Ivan has additional questions, those questions shall be sent to Nina for her response within fourteen days. If Nina has not delivered a satisfactory response to Ivan within fourteen days of his request, he shall so advise Nina, and within fourteen days of having been so advised, Nina shall file a notice of application to pass her accounts.
[134] The 2019 Power of Attorney for Property was granted to Nina alone. If Mrs. Zagorac is found not to have had capacity to manage her property in November of 2019, then Nina must have been acting as Mrs. Zagorac’s attorney since 2019 pursuant to the 2019 Power of Attorney.
[135] The court may order an attorney’s accounts to be passed, in whole or in part, pursuant to s. 42 of the SDA, and may do so at the request of “anybody else” under that section if the person making the request has a genuine interest in the grantor’s welfare and if it would be reasonable to believe that a court hearing the matter may order the attorney to pass her accounts: Ali v. Fruci, [2006] O.J. No. 1093 (ONSC), at para. 3.
[136] In my view, Ivan satisfies the criteria of “anybody else.” While living with Mrs. Zagorac, he assisted her with her finances and ensured her tax returns were prepared and filed. He challenged Nina’s spending relating to Mrs. Zagorac’s property when it became apparent that Mrs. Zagorac’s spending was outpacing her income by a considerable margin and that she would have to be drawing down on her only liquid investments, her RRSPs, in order to pay her bills, including her credit card. Historically, it was Ivan who had been appointed as Mrs. Zagorac’s attorney for property. When Ivan’s concern was brought to Nina’s attention, she attempted to shield her conduct from scrutiny by changing the password to Mrs. Zagorac’s online banking.
[137] Nina’s use of Mrs. Zagorac’s credit card to buy Nina’s own groceries, her failure to continue to collect rent from Sean and her decision to allow his rent to be used to pay her legal bills, her failure to collect or deposit other rent owing to Mrs. Zagorac, and the opening of a joint bank account between Mr. Zagorac and Sean are all activities that would normally warrant the transparency that comes with a court-ordered passing of accounts.
[138] Nina submits that she should not be required to account for her mother’s property prior to 2019 when a power of attorney was granted to her. I disagree. For the entire time that Nina was managing Mrs. Zagorac’s finances, Nina was acting as a fiduciary. A fiduciary relationship exists where the fiduciary has scope for the exercise of some discretion or power; the fiduciary can unilaterally exercise that discretion or power in a manner that affects the beneficiary’s legal or practical interests; and the beneficiary is peculiarly vulnerable to the fiduciary: Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99. Each of these features can be found in the relationship between Nina and Mrs. Zagorac. Nina controls Mrs. Zagorac’s online banking and password. Nina created a joint account between Mrs. Zagorac and Sean, and Nina has a joint account with Mrs. Zagorac and controls Mrs. Zagorac’s credit and bank cards. Mrs. Zagorac is vulnerable owing to her Alzheimer’s disease and her dependence on Nina for assistance. This dependence is acknowledged by Mrs. Zagorac in her affidavit where she states: “I want Nina and Sean to have access to my money, because I know that they are two people who do not steal from me, but who use my money to help me.”
[139] If Nina does not voluntarily respond to the issues raised in Ivan’s Notice of Objection, court intervention will be necessary to guard against further dissipation of Mrs. Zagorac’s assets and to restore to Mrs. Zagorac funds that may be owing to her by Nina and Sean.
Issue 4: Should Sean be ordered to pay his rent arrears and future rent respecting his tenancy at Mrs. Zagorac’s residence to Mrs. Zagorac; and should Sean be removed as a joint account holder on Mrs. Zagorac’s account?
[140] Sean is not a party to these proceedings. I grant Ivan’s request to add him as party to the proceedings, but I decline to make any order against him at this juncture, and without giving him an opportunity to make submissions in respect of any relief sought against him.
[141] It is apparent from the record that Mrs. Zagorac is a vulnerable person and depends on Nina to assist her with her financial matters. There is no evidence to show that Nina is using the 2019 Power of Attorney granted to her by her mother. Nina does acknowledge that she is and has been assisting her mother with her finances, but that her mother approves the expenditures. In that capacity, as noted, Nina is a fiduciary and has a responsibility to act in her mother’s best interests. This duty does not allow her to self-deal by diverting rental income otherwise payable to Mrs. Zagorac to herself or by allowing it to be used for her benefit. Nina has acknowledged that Mrs. Zagorac desires to remain in her residence and does not want to live in a long-term care facility. As a fiduciary, Nina is required to manage Mrs. Zagorac’s property in the best interests of Mrs. Zagorac, which would include collecting and depositing the rent payable by all tenants so that it is available for Mrs. Zagorac’s care. If Mrs. Zagorac is found to have capacity to manage her property, then she can waive Sean’s rent and reimburse him for rental payments should she choose to. If, however, Mrs. Zagorac is found to be lacking in capacity to manage property, then Nina, who was managing Mrs. Zagorac’s property at the time Sean’s rent was being used to pay Nina’s legal bills, would be accountable for all rent improperly diverted from Mrs. Zagorac. Nina has not adduced any evidence to show that Mrs. Zagorac made a gift of this rental income to Nina, and she is, therefore, accountable for it.
[142] As a joint account holder on Mrs. Zagorac’s bank account, as a matter of convenience, Sean would have no beneficial interest in the joint bank account and holds the funds on resulting trust for Mrs. Zagorac. In that capacity, he would be accountable to Mrs. Zagorac for all transactions undertaken by him.
Issue 5: Should the 2019 Power of Attorney for Property be suspended, and a temporary guardian of property be appointed until further court order?
[143] I decline to suspend the 2019 Power of Attorney for Property and to appoint a guardian at this point in the proceedings. There is no evidence that Nina is using the 2019 Power of Attorney for Property. Mrs. Zagorac, at this time, has not been found by this court to be incapable of granting or revoking a power of attorney for property, and this suspension relief sought by Ivan is not sought in the context of an application to pass accounts. As such, the legislative authority under the SDA to suspend a power of attorney for property does not apply.
[144] Absent any legislative authority to suspend the 2019 Power of Attorney, the court may rely on its common law parens patriae jurisdiction to suspend a power of attorney. I decline to exercise my parens patriae jurisdiction at this point in the proceedings. The Injunction remains in place to protect Mrs. Zagorac’s property, and Nina will continue to be accountable for daily expenditures made on Mrs. Zagorac’s behalf. Once the capacity assessment has been completed, the need, if any, to suspend the 2019 Power of Attorney for Property and to appoint a guardian or temporary guardian of Mrs. Zagorac’s property, if any, may be reconsidered.
Issue 6: Should the 2019 Power of Attorney for Personal Care be suspended, and decisions made pursuant to the Health Care Consent Act, 1996 S.O. 1990, c. 2, or jointly by the applicant, Nina and Samuel until further court order?
[145] I also decline to suspend the 2019 Power of Attorney for Personal Care pending the outcome of the capacity assessment. Mrs. Zagorac has not been found by this court to be incapable of making a power of attorney for personal care or revoking a power of attorney for personal care. In the meantime, the functional assessment should assist Mrs. Zagorac and her family in determining the level of care that is recommended for Mrs. Zagorac and what additional services she requires beyond those that Nina and Sean are already providing. The need for the suspension of the 2019 Power of Attorney for Personal Care and an order for alternative substitute decision making respecting personal care, if any, may be reconsidered once the results of the capacity assessment are known.
Disposition
[146] An order shall issue:
Permitting the applicant to further amend the amended notice of application as sought by the applicant;
Requiring Leposava Zagorac to undergo a capacity assessment by Dr. Sara Mitchell of Sunnybrook Health Sciences Centre, which assessment (described more fully in para. 124 of this endorsement) shall include a retrospective assessment to the extent possible as determined by Dr. Mitchell;
Requiring Leposava Zagorac to undergo a functional assessment by the interprofessional team members of the Sunnybrook Geriatric Day Hospital or Geriatric Outpatient Clinic, and Nina shall implement the recommendations set out in the functional assessment with regular consultation, in person or by email, with Ivan and Samuel; and
Requiring Nina to file an application to pass her accounts if she has not provided a satisfactory response to Ivan’s Notice of Objection in accordance with the timelines set out in para. 133 of this endorsement.
Costs
[147] Any party seeking costs in this motion shall serve and file written cost submissions not exceeding three pages in length (not including a costs outline or bill of costs and offers to settle, if any) within fourteen days of the date of this endorsement. Any party wishing to respond shall serve and file similar written cost submissions within fourteen days thereafter. Reply submissions may only be made with leave.
Dietrich J.
Date: June 23, 2021