COURT FILE NO.: CV-21-00672161-00ES
DATE: 2021-12-13
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE ESTATE OF ROLF KARL WINKLER, deceased
BETWEEN:
ILSE KATHARINA WINKLER
Applicant
– and –
CHRYSTAL THOMPSON, in her capacity as Attorney under Continuing powers of Attorney for Property, the date of which is unknown
Respondent
Warren W. Tobias, for the Applicant
Ismail Barmania, for the Respondent
HEARD: December 1, 2021
PENNY J.
REASONS FOR JUDGMENT
[1] This is an application to pass accounts by Chrystal Thompson. Chrystal is the granddaughter of Rolf Winkler, who died on August 10, 2019 at age 91.
[2] Ilse Winkler, is Rolf’s surviving spouse, although they were separated for a significant period of time before Rolf’s death, from about 2012 onwards. Ilse has raised a number of objections to the form and content of the accounts submitted.
[3] Both parties agree (and I share the substance of their agreement) that this application, and Ilse’s objections, essentially turn on the question of whether Rolf was incapable in the time period covered by the application, i.e., from May 2015 until Rolf’s death in August 2019.
[4] Chrystal was appointed Rolf’s power of attorney on January 12, 2015. Rolf opened a joint bank account with Chrystal in early 2015, around the time he stopped living in his home on Warden Avenue and moved into the Tendercare nursing home.
[5] According to Chrystal, they agreed she would pay Rolf’s bills and reimburse herself from the joint account. This is how things were done and how things are reflected in the joint account until Rolf’s death.
[6] Chrystal’s position is that, although she had Rolf’s power of attorney, she did not exercise those powers, if at all, until the very end. All, or the vast majority, of the transactions were conducted by Chrystal simply as joint account holder with Rolf’s concurrence and consent. Chrystal maintains that Rolf was competent, virtually until the end. If Rolf had a problem with expenditures from the joint account, he was in a position to do something about it throughout the entire period leading up to his death. Chrystal maintains that she simply followed the practice agreed upon, that Rolf never objected to any expenditures or reimbursements she made from the account, and that she never manipulated her joint account holder status to obtain a “personal” benefit, except when, in one instance, Rolf specifically directed her to do so.
[7] As a result of these circumstances, Chrystal did not keep receipts for every expenditure. For example, there are no specific entries in the accounting for toiletries, household items, socks and underwear, clothing and the like because she bought these things for Rolf while she was doing her own family shopping for herself and her three children. In some cases, she simply cannot recall what an expenditure was for. However, she says she has done her best in the accounts submitted to explain all the transactions she can and to reconcile the accounts with the joint bank account statements. In the end, there is an excess of reimbursement over expenditure of about $18,400 over the entire four and a half year period.
[8] Ilse objects to this unexplained excess reimbursement amount and to a number of other expenditures, including:
(a) an unexplained cash withdrawal of $4,000;
(b) a gift to Chrystal of $10,550 (for bathroom renovations in her home);
(c) alleged “personal” expenditures of $4,461.15;
(d) Tim Horton’s card expenses of $7,210; and,
(e) cash for Rolf’s spending money of $7,040.
[9] The reason Rolf’s capacity is a threshold issue is because there are different duties depending on the capacity of the grantor of a POA. The obligation to keep accounts, for example, under s. 32 of the Substitute Decisions Act only applies if the grantor is incapable or if the attorney has reasonable grounds to believe the grantor is incapable. This is because, if Rolf was capable, he was making the decisions, just as much as Chrystal. If Rolf was capable, imposing on Chrystal a duty to account now, long after the fact and after Rolf has died, amounts to a near impossible task. To paraphrase what Langdon J. held in Fair v. Campbell, Milton File # 1601/97, September 28, 2002, at para. 29, what Ilse is now demanding from Chrystal is that she put together a whole jig-saw puzzle although she does not have all of the pieces.
[10] The evidence is that Rolf was physically infirm and that he suffered from depression from time to time. There is very little evidence, and much of that anecdotal, of Rolf’s incapacity. Some evidence was sought to be adduced, for example, from a neighbour who provided an unsworn “witness statement”. Mr. Tobias says the neighbour’s evidence of what Rolf once said about Chrystal falls within the “excited utterance” exception to the hearsay rule. The problem with this submission is that you never get to whether Rolf’s statement is admissible under an exception to the hearsay rule because there is no evidence the statement was ever made. A “witness statement” is not evidence of anything; it is no more than words on a piece of (virtual) paper.
[11] Also, a good deal of the lay evidence comes from Ilse (who saw Rolf infrequently) and Chrystal, who saw Rolf a lot over the entire period of time, but both of them, of course, have an interest as party litigants and cannot be regarded as objective. I tend to view Chrystal’s evidence as more reliable, however, because of her consistent proximity to Rolf over a longer period of time.
[12] In addition, Chrystal’s evidence is corroborated by the independent witness to the signing of Rolf’s POA and by Rolf’s companion, who is also independent and has no stake in these proceedings.
[13] Ms. Chapman witnessed the signing of Rolf’s POA in 2015. She and her partner visited Rolf in the hospital and spent time chatting with and getting to know him. She had absolutely no concerns about Rolf’s capacity at that time.
[14] Barbara Sullivan visited Rolf two or more days a week from 2016 right through to shortly before he died. She found Rolf to be entirely capable, alert and engaged. They went out for walks, to stores and to Tim Horton’s. Ms. Sullivan specifically states in her affidavit that, based on her interactions with and observations of Rolf from 2016 to 2019, Rolf understood the value of money, understood the value of things in stores and controlled his own wallet and Tim Horton’s card. He paid for everything on their outings together.
[15] Ms. Sullivan stopped visiting Rolf around May 2019 because had gone “downhill” rapidly, no longer wanted to go out or do anything and was very tired all the time. By then, she said, he sometimes no longer recognized her.
[16] Mr. Tobias focusses on two assessments done of Rolf, one when he was in hospital in 2015 and one at the Tendercare home in 2017. In the first Personal Health Profile document, dated April 9, 2015 and prepared by the Toronto Community Care Access Centre, Rolf was scored 0/6 for the Cognitive Performance Scale, although it is noted that there was a potential problem related to psychotropic drugs. Shortly thereafter, however, on April 14, 2015 Rolf scored 23 on a MMSE test, which was barely out of the “no cognitive impairment” (a score of 24) category and into the “mild cognitive impairment” category.
[17] In another test in January 2017, Rolf scored 11, which is apparently into the severe category of impairment, although, again, it is noted that Rolf was suffering from a depressive episode at the time.
[18] Just before the end, there is memo of Dr. Barsky from July 2019 which provides the doctor’s “impression” that Rolf was suffering from major depression.
[19] The problem with reliance these tests etc. is that they are sporadic and contain no commentary or analysis about capacity to manage property specifically. It is really left to lay interpretation, which Mr. Tobias effectively provides in the guise of argument, which he says shows that Rolf was not capable of managing his property. I am simply not prepared to make that assumption.
[20] Dr. Barsky was, in fact, asked by Mr. Tobias to opine on Rolf’s capacity to manage property in March 2020, after the fact, based on prior assessments and treatment. Although acknowledging that Rolf did suffer from depression, Dr. Barsky makes the point specifically that “at no time did I conduct a formal financial capacity assessment”. He could do no more than “speculate” that, when Rolf was more depressed and concentrated poorly, his decisions “may” have been impaired. Even at that, Dr. Barsky states that Rolf’s capacity was not something that was declining in a “linear fashion over time”.
[21] Another treating psychiatrist, Dr. Lee, was also asked by Mr. Tobias, in September 2020 after Rolf had died and this litigation was under way, to assess Rolf’s capacity. Dr. Lee, importantly, responded to this enquiry about Rolf’s capacity by asking to what “specific capacity you are referring”, because capacity is a function specific enquiry. Dr. Lee made a point of saying that “capacity for specific decisions can still be preserved despite cognitive defects being present”. Like Dr. Barsky, Dr. Lee stated that she had “never assessed [Rolf] specifically for any of these [various functions] nor did I see any evidence of such [impairment] during his medical or psychiatric admissions to my hospital”. On the question of whether Rolf’s depression might have impaired his capacity to manage property, she said that “this is hard to accurately evaluate” and that she had no evidence to back up a hypothesis that “his mood was ever severe enough to impact his financial decisions”.
[22] Under the SDA, capacity is presumed. In the face of the available evidence, I can come to no other conclusion but that Rolf did not lack capacity to manage his property until perhaps shortly before he died. There is, however, no evidence of material, impugned transactions in June, July and August of 2019. For these reasons, I conclude that Chrystal was not obliged to pass her accounts, even though she did so on consent. Rolf was capable of agreeing to Chrystal’s ongoing use of the joint account and did so, capable of giving her a gift to help with her bathroom renovations (this was entirely consistent with their relationship and his admitted long-standing past practice), and capable of shopping and spending money on his own. Chrystal was not, in reimbursing herself from the joint account, acting in a fiduciary capacity and, in any event, did nothing improper.
[23] Further, I am not satisfied that any of the transactions challenged by Ilse were improper. The efforts to account were bona fide. The objections relate to a narrow few specific transactions. The accounts display no indicia of routine “siphoning off” from the joint account for Chrystal’s person benefit. The objections to the accounts are therefore dismissed.
[24] While there may be no need for judgment approving these account (in light of my conclusion that Rolf was capable at the time), because the application has been made, and because this application takes place in the context of a wider familial dispute involving Ilse and Chrystal, I grant judgment approving these accounts as submitted.
[25] Mr. Tobias sought about $26,000 partial indemnity costs if successful. Mr. Barmania sought about $42,000. Ms. Chrystal’s disbursements and, to some extent, her legal costs were greater because she is the one who was compelled to prepare accounts and bring this application before the Court. In all the circumstances, I award costs of $35,000 to Chrystal payable by Ilse forthwith.
Penny J.
Released: December 13, 2021
COURT FILE NO.: CV-21-00672161-00ES
DATE: 2021-12-13
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE ESTATE OF ROLF KARL WINKLER, deceased
BETWEEN:
ILSE KATHARINA WINKLER
Applicant
– and –
CHRYSTAL THOMPSON, in her capacity as Attorney under Continuing powers of Attorney for Property, the date of which is unknown
Respondent
REASONS FOR JUDGMENT
Penny J.
Released: December 13, 2021