COURT FILE NO.: CV-20-3475
DATE: 20220526
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Tricia Elizabeth McDonald in her capacity as proposed litigation guardian for Warren Terry, Applicant
AND:
Wendy Styles, Cass & Bishop Professional Corp. & Bank of Montreal, Respondents
BEFORE: Coats J.
COUNSEL: Joseph Figliomeni, for the Applicant Robert A. Watson, for Wendy Styles, Respondent No one appearing for Cass & Bishop Professional Corp., Respondent No one appearing for Bank of Montreal, Respondent
HEARD: March 3, 2022
ENDORSEMENT
Issues:
[1] The issues argued before me on March 3, 2022, are as follows:
i. The Applicant, Tricia Elizabeth McDonald, requests to be appointed as Litigation Guardian for Mr. Warren Terry; and
ii. In the alternative, the Applicant seeks leave to allow them to continue this application as Attorney for Property for Mr. Terry.
[2] The substantive claim for judgment against Wendy Styles was not argued before me. The issues set out above were to be determined first.
History of Appearances:
[3] The first substantive attendance on this matter was on April 12, 2021. Justice Chozik’s endorsement of April 12, 2021, provides as follows:
Submission on adjournment of Applicant’s motion heard today. The motion is adjourned to the hearing of the Application, scheduled for August 17, 2021 for 2 hours. Reasons to follow.
[4] Justice Chozik gave her Reasons by endorsement dated April 19, 2021. These provided as follows:
The Applicant, Tricia McDonald, is the granddaughter of Mr. Warren Terry. Mr. Terry is 89 years old. He lives in a long-term care home.
The undisputed evidence before me on the Applicant’s motion is that Mr. Terry suffers from some form of dementia. The Applicant submits that she has not served Mr. Terry with notice of the Application on his behalf and has not given him notice of her motion because he would not appreciate what these proceedings are about.
By way of background, from May 2019 until July 2020, both Ms. McDonald and the Respondent, Wendy Styles, held and acted on Mr. Terry’s behalf under a Power of Attorney for Property (“POAP”) and a Power of Attorney for Personal Care (“POAPC”). In July, 2020 Ms. Styles renounced her ability to act as Mr. Terry’s attorney for property after she admitted to Ms. McDonald that she had misappropriated money from Mr. Terry’s bank accounts.
Ultimately, the issue on the Application is how much money was taken by Ms. Styles.
On the motion before me, the Applicant sought the following relief:
(a) an Order appointing her as Mr. Terry’s litigation guardian pursuant to Rule 7.02(1)(1.1) of the Rules of Civil Procedure;
(b) an Order to compel the Bank of Montreal to produce copies of Mr. Terry’s bank records to her for the period of May 16, 2019 to July 30, 2020;
(c) an Order to compel Ms. Styles’ real estate lawyers, Cass & Bishop Professional Corporation, to produce their records with respect to the sale of some of Ms. Styles’ real estate properties
(d) an Order setting out a timetable for the Application.
The Respondent agrees to the timetable, but requests an adjournment of the motion. The Respondent submits that the motion must be adjourned because the Applicant failed to file a factum, as required for long motions.
It is true that a factum is required and that the Applicant has not filed one. At the same time, the Respondent has not filed any responding materials to this motion or this Application whatsoever. During the hearing before me, the counsel purported to rely on an affidavit from Ms. Styles, but that affidavit was served last minute, rejected by the filing office and was not property before the court. I declined to consider it.
The Application (or the motion) could be heard on August 17, 2021. Rather than adjourn the motion, and then schedule another date for the hearing of the Application, the parties agreed to adjourn the motion to the hearing of the Application on August 17, 2021.
While the Applicant agrees to the adjournment, she seeks terms that mirror the exact relief she sought on the motion.
The Respondent objects to those terms, especially to the appointment of a litigation guardian under Rule 7.02(1)(1.1).
The Respondent argues that the evidence adduced by the Applicant does not permit a finding of incapacity. The only evidence is an assertion by the Applicant to this effect, and a note from 2018 indicating that he suffers from dementia. The Respondent argues that I should not accept this evidence as evidence of incapacity because in May, 2019 Mr. Terry appointed the parties as his new Attorneys.
Mr. Terry can simply revoke a Power of Attorney. However, once a finding of incapacity is made and a litigation guardian is appointed, he is deprived of his right to control this litigation.
I agree with the Respondent that better evidence is required to make a finding of incapacity. It is also not clear why Ms. McDonald cannot pursue this Application as Mr. Terry’s attorney for property without a finding of incapacity. Legal argument on this point, with factums and legal authorities, may be of assistance to the judge hearing the application.
An Order shall issue as follows:
This Application is to be heard on August 17, 2020 [should say 2021] for two hours. The motion is adjourned to that day as well. The parties must comply with the Practice Direction for Central West Region with respect to long motions dated December 31, 2020.
The parties agree to the following timetable:
(a) the Respondent shall serve and file all of her responding materials by 4:30 pm on April 23, 2021;
(b) cross-examinations shall be completed by the parties by April 30, 2021;
(c) The Applicant shall serve and file her factum not later than May 28, 2021;
(d) The Respondent shall serve and file her factum no later than June 11, 2021.
The Bank of Montreal shall produce to both parties all bank records for Warren Terry’s accounts for the time period from May 16, 2019 to July 30, 2020. These bank records are to be produced by the Bank of Montreal to both parties not later than 4:30 pm on by April 23, 2021.
The Respondent is ordered to produce to the Applicant by April 23, 2021 all of her records with respect to the sale of the properties at issue, including any records held by her solicitors at Cass & Bishop Professional Corporation.
Costs of April 12, 2011 attendance on the motion are adjourned to the hearing of the Application;
The parties are granted leave to seek further directions from the Court.
[5] The matter next came before me on January 31, 2022. My endorsement of this date reads as follows:
This motion came before me today as a long motion. At the commencement of the motion, I raised preliminary issues. These were the same issues raised by Justice Chozik in her endorsement of April 19, 2021-better evidence being required to make a finding of incapacity and legal argument (factums and legal authorities) as to whether the applicant can pursue the application as attorney for property, without a finding of incapacity.
After lengthy discussions with counsel, permission is granted for the Applicant to file additional affidavit material re present capacity and a factum and legal authorities with regard to the applicant’s ability to pursue this application as attorney for property, without a finding of incapacity. This must be served and filed by February 14, 2022.The respondent may serve and file responding material on or before February 28, 2022.
The motion shall continue before me on March 3, 2022 at 10 am for 2 hours, to be confirmed by March 1 at noon.
[6] Supplemental material was filed. The issues identified above in para. 1 were argued before me on March 3, 2022.
Law and Authorities:
[7] Rule 7.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”), requires that, unless a court orders otherwise, a plaintiff/applicant who is under a disability shall be represented by either an individual approved to act as litigation guardian in the proceeding or an attorney under a Power of Attorney with that authority. This rule is further described at para. 13 of Buckhalter v. Kensington Health Centre, 2019 ONSC 3345:
[13] There is a threshold issue arising from the statement of claim as pleaded in relation to Dorothy. On its face, the statement of claim asserts that Dorothy is a person under a disability. Further, it contains allegations regarding dementia and Alzheimer’s. Mr. MacMillan is named as Dorothy’s litigation guardian in the title of proceedings. However, Rule 7.02 of the Rules of Civil Procedure requires that, unless a court orders otherwise, a mentally incapable plaintiff shall be represented by either: (1) their guardian (if they have a guardian who has been appointed to act as litigation guardian in the proceeding); or, (2) an attorney under a power of attorney with that authority.
[8] “Disability” is defined in Rule 1.03 of the Rules as a person who is “mentally incapable within the meaning of section 6 or 45 of the Substitute Decisions Act, 1992, in respect of an issue in the proceeding, whether the person has a guardian or not.” Section 6 of the Substitute Decisions Act, 1992, S.O. 1992, c.30, provides:
6 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.
[9] As required for an appointment of a litigation guardian under the Rules, the court must consider Mr. Terry’s capacity with respect to an issue in the proceeding. As set out at para. 26 of Torok v. Toronto Transit Commission, 2007 CarswellOnt 2834 (S.C.), the question is whether the moving party has presented evidence sufficient to persuade the court, on a balance of probabilities, that Mr. Terry is either unable to understand information that is relevant to the lawsuit, or is unable to appreciate the reasonably foreseeable consequences of a decision or lack of decision in the lawsuit. The two parts of the test are disjunctive. The moving party is required to satisfy only one part of the test.
[10] The substantive issues in this lawsuit (application) are about Mr. Terry’s property. The relief claimed in para. 1 of the Notice of Application is as follows:
The Applicant Tricia Elizabeth McDonald makes application for:
(a) An Order appointing the Applicant as litigation guardian for Warren Terry(“Warren”);
(b) An Order directing the Respondent Wendy Styles (“Wendy”) to commence an Application to pass her accounts in respect of her activity as Attorney for Property of Warren, for the period commencing May 16, 2019 to the date of her resignation (the “Attorney Period”);
(c) A Declaration that Wendy breached her fiduciary duty by withdrawing money from Warren’s bank account for her personal benefit while acting as Warren’s Power of Attorney;
(d) An Order that Wendy is liable for damages resulting from any breach of her duties as Attorney for Property during the Attorney Period;
(e) An Order authorizing the Applicant to compel production of all solicitors’ records, notes and files relating to Warren from any solicitor or law firm in possession of such legal records and in particular from the Respondent Cass & Bishop Professional Corporation (“Cass & Bishop”);
(f) An Order authorizing the Applicant to compel production of all financial records and files relating to the assets of Warren from any financial or banking institution or agency and in particular from the Respondent Bank of Montreal (“BMO”);
(g) An Order granting leave to bring this Applicant, an order abridging the time for service and filing of the Application Record, and an Order validating or dispensing with service of the Application Record, if necessary;
(h) An Order granting leave to the parties to seek further directions from the Court, if necessary;
(i) Costs of the Application; and
(j) Such further and other relief as counsel may advise and this Honourable Court may permit.
[11] With respect to capacity to manage property, the key elements are an ability to understand the information relevant to a property-management based decision and to appreciate its consequences. Paragraphs 71-78 of McDougald Estate v. Gooderham (2003), 2 E.T.R. (3d) 52 (Ont. S.C.), aff’d (2007), 2005 CanLII 21091 (ON CA), 199 O.A.C. 203 (C.A.), describe these elements:
71 There must be sufficient evidence to support an assumption that a person is unable to understand information that is relevant to making a decision in the management of her property or that a person is unable to appreciate the reasonably foreseeable consequences of a decision or lack of a decision. This assessment must stand up to objective scrutiny.
72 There is no case law specifically considering the meaning of "incapable of managing property."
73 I agree with the conclusion of Quinn J. that capacity must relate to the ability to understand information as well as the ability to appreciate reasonably foreseeable consequences of a decision.
74 These dual elements of capacity were recently confirmed by the Supreme Court of Canada in Starson v Swayze, 2003 SCC 32, [2003] S.C.J. No. 33 (S.C.C.) which considered section 4 of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched A. This section contains similar wording to section 36 of the Act defining capacity.
75 The regulation 293/96 and Guideline to the Act which I note came into effect shortly after the Property was sold is helpful in giving meaning to the terms "understand" and "appreciate." These are guidelines provided to assessors who are charged with conducting the important task of assessing an individual's capacity to manage property.
76 Part II of the Guideline clarifies "understand" as follows:
As a construct, to "understand" refers to a person's cognitive abilities to factually grasp and retain information. To the extent that a person must demonstrate understanding through communication, the ability to express oneself (verbally or through symbols or gestures) is also implied. The understand concept is found in many statutes dealing with health care, guardianship and contract law, and has been accepted as a legal test of capacity in matters of criminal competency.
At minimum, a person must have a working knowledge of his or her financial, health or personal care status and be aware of any pressing issues that call for decision-making. He or she must also possess sufficient intellectual and cognitive ability to process and assimilate information about the available options.
77 Understanding includes dual components of "factual knowledge base," and "understanding of options." Part II of the Guidelines defines the components:
(i) — Factual Knowledge Base
When assessing an individual with factual knowledge deficits, the assessor must consider whether the person has been exposed to the necessary training or learning opportunities to acquire the relevant facts. For example, many elderly persons who delegated the responsibility for important financial decisions to their spouse may not be sufficiently informed as to the size and complexity of their estates upon the spouse's death. In such a case, the assessor should ensure that the person has been fully informed about his or her material worth and obligations before reaching an opinion as to capacity.
(ii) — Understanding of Options
Faced with alternatives or choices, a person should be able to comprehend information about options and risks necessary to formulate an informed choice. This requires the ability to attend to relevant stimuli, understand at a conceptual level and retain the essential information long enough to reach a decision. Furthermore, the person must be able to remember the choices he or she has previously made, and to express those choices in a predictable and consistent manner over time.
78 Appreciate involves other nuances. Part II of the Guideline provides:
The "appreciate" standard attempts to capture the evaluative nature of capable decision-making, and reflects the attachment of personal meaning to the facts of a given situation. Individuals not only require the intellectual and cognitive capacity to factually understand information, they must also be able to rationally manipulate this information and appraise it in a reality-grounded fashion. Thus, this standard focuses on the reasoning process behind the individual's decisions, and in addition, explores the particular personal weights that the person attaches to one outcome or another.
Because choice reflects the convergence of cognitive, affective and value considerations, assessors must broaden their inquiry to include them. For the purposes of capacity assessments under the SDA, the appreciation standard can be divided into two distinct dimensions: "Realistic Appraisal of Outcome" and "Justification of Choice". Both dimensions are to be considered separately by assessors, and an individual can fail the appreciate standard in one of two ways. Both dimensions must be present for the person to be found capable.
[12] The factors that the court may consider in determining a party’s ability to manage his or her property are set out at para. 58 of the Court of Appeal’s decision in McDougald Estate (2007):
58 The appellants contend that the application judge erred in considering the testator's age and physical health, and the complexity of her estate when making a determination of incapacity. I see no error in such an approach. On the contrary, in my view, such considerations are necessary to a proper determination of capacity. Ms. McDougald's physical condition was very relevant to her mental condition. She suffered from a neurological disease that impaired her higher cognitive functions. The complexity of her estate was a relevant factor in deciding whether she had the capacity to manage her property, particularly as the evidence shows that she had been aware of the size and nature of her financial affairs during the 1980's. Her inability to focus and lack of interest were directly relevant to her capacity to manage her property. The legal complexity surrounding the sale of the property and its possible ademption were relevant considerations, as well, when determining whether the testator had the requisite capacity.
[13] The factors to consider are also set out at para. 57 of Constantino v. Constantino, 2016 ONSC 7279:
[57] The jurisprudence has identified the following factors that should be considered when applying the test for determining whether a party is under disability and requires a litigation guardian:
a) A person’s ability to know or understand the minimum choices or decisions required and to make them;
b) An appreciation of the consequences and effects of his or her choices or decisions;
c) An appreciation of the nature of the proceedings;
d) A person’s inability to choose and keep counsel;
e) A person’s inability to represent him or herself;
f) A person’s inability to distinguish between relevant and irrelevant issues; and,
g) A person’s mistaken beliefs regarding the law or court procedures.
[14] In terms of the evidence the court should consider, the proposed litigant must file an Affidavit. Rule 7.02 (2) sets out what must be included in the Affidavit:
Affidavit to be Filed
(2) No person except the Children’s Lawyer or the Public Guardian and Trustee shall act as litigation guardian for a plaintiff or applicant who is under disability until the person has filed an affidavit in which the person,
(a) consents to act as litigation guardian in the proceeding;
(b) confirms that he or she has given written authority to a named lawyer to act in the proceeding;
(c) provides evidence concerning the nature and extent of the disability;
(d) in the case of a minor, states the minor’s birth date;
(e) states whether he or she and the person under disability are ordinarily resident in Ontario;
(f) sets out his or her relationship, if any, to the person under disability;
(g) states that he or she has no interest in the proceeding adverse to that of the person under disability; and
(h) acknowledges that he or she has been informed of his or her liability to pay personally any costs awarded against him or her or against the person under disability.
[15] At para. 58 of Constantino, Justice Price describes the type of evidence that is generally considered:
[58] Issues of mental capacity generally are to be decided on medical evidence. Courts have, in some circumstances, considered various types of evidence in determining whether a Litigation Guardian should be appointed:
a) Medical or psychological evidence as to capacity;
b) Evidence from persons who know the litigant well;
c) The appearance and demeanour of the litigant;
d) The testimony of the litigant; and,
e) The opinion of the litigant’s own counsel.
[16] Para. 34 of C. (C.) v. Children’s Aid Society of Toronto, 2007 CarswellOnt 9879 (S.C.) also describes the type of evidence courts have considered:
34 Courts have considered the following types of evidence in determining the appropriateness of the appointment of a representative or litigation guardian:
(a) Medical or psychological evidence as to capacity;
(b) Evidence from persons who know the litigant well;
(c) The appearance and demeanour of the litigant;
(d) The testimony of the litigant.
(e) The opinion of the litigant's own counsel
[citations omitted]
Analysis:
[17] I will first deal with several objections made by the Respondent.
[18] The Respondent submits that when the application was initially served, the supporting Affidavit was insufficient and that the Applicant should not have been given two more chances to file supplemental material. The Court granted the Applicant the opportunity to file further material. This is not a basis to not consider the supplemental evidence.
[19] The Respondent also raises Rule 39.01(5) which provides as follows:
(5) An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit.
[20] It is the Respondent’s position that both of Ms. McDonald’s Affidavits filed contain information and belief and that, since the issue of Mr. Terry’s capacity is contentious, this evidence should not be allowed. A careful examination of the Affidavit material filed reveals that the issue of Mr. Terry’s capacity in December of 2020, when the application was commenced, is not contentious. Nowhere in Ms. Styles’ Affidavit sworn March 3, 2021, does she say Mr. Terry had capacity in December of 2020. Her Affidavit references that legal documents were prepared for Mr. Terry in May of 2019 on the basis that Mr. Terry was capable. This is a year and a half before the application was commenced. Therefore, the Applicant is entitled to rely on information and belief.
[21] The Respondent objects to the second Affidavit of Ms. McDonald, specifically to Ms. McDonald attaching two letters from the attending physician and the mini mental status examination results to her Affidavit. It would have been preferable for the attending physician to have filed an affidavit. However, the Applicant is entitled to rely on information and belief. Further, the Applicant participated in the February 10, 2022, Care Conference and received similar information directly from the care providers. It is not hearsay. In addition, there is no conflicting medical evidence. Where an applicant has presented medical evidence on the issue of mental capacity, and there is no conflicting medical evidence, absent a compelling reason to reject the medical opinion, the court’s decision should be based on the uncontradicted evidence: see Torok, at paras. 47-48. There is no compelling reason to reject the two letters from Dr. Samuel. He is the attending physician. His letters are consistent with the observations of Ms. McDonald, who is Mr. Terry’s granddaughter, and she knows Mr. Terry well.
[22] The Respondent argues that there is no evidence of Mr. Terry’s incapacity when the Application was issued in December of 2020. I disagree. Firstly, in Ms. McDonald’s Affidavit, sworn October 5, 2020, she references that Mr. Terry’s illness is too progressed and that in his current cognitive state, he is unable to appreciate or understand the nature of the issues in dispute. The Court is entitled to rely on the evidence of those who know the party well. Again, this evidence is uncontroverted. Secondly, Dr. Samuel’s first letter was dated September 4, 2020. In this letter Dr. Samuel states:
Please be advised that Mr. Walter Terry is currently a resident of Maple Villa Long-Term Care Centre under my direct medical care.
It is my medical opinion that Mr. Terry is not mentally or physically capable of managing his financial affairs.
[23] This letter was prepared just a few months before the application was commenced.
[24] Based on the following evidence, I find that Mr. Terry is both not able to understand information that is relevant to making a decision in the management of his property and is not able to appreciate the foreseeable consequences of a decision or lack of a decision:
The evidence of Ms. McDonald in her affidavit of October 5, 2020, wherein she references the progression of Mr. Terry’s illness and his current cognitive state.
The evidence in Ms. McDonald’s Affidavit sworn February 12, 2022. Ms. McDonald virtually attended the annual Care Conference held on February 10, 2022, wherein Mr. Terry’s status at Maple Villa was reviewed. Ms. McDonald’s received information from Mr. Terry’s care team related to his capacity. In particular, she received the following information, which she believed to be true:
i) Due to his dementia, Mr Terry will sometimes stop eating during meals and stare at his food. He often times, requires support and encouragement from personal support workers to prompt him and remind him to continue eating;
ii) The social worker indicated that Mr. Terry’s cognitive ability has declined from the previous year;
iii) The care team was of the opinion that Mr. Terry was unable to perform abstract reasoning and has difficulty with numbers. Practical examples were provided by the care team to Ms. McDonald;
iv) The care team advised that Mr. Terry’s short-term memory is very poor and that his memory was very in the moment. While he can recall some events from his past, his short-term memory is lacking. Examples were provided by the care team to Ms. McDonald;
v) Ms. McDonald was advised by the care team that Mr. Terry’s ability to engage in conversations remains superficial and that he would often lose the focus of the conversation. A practical example of this was provided to Ms. McDonald;
vi) Ms. McDonald was advised that, as a result of his dementia, Mr. Terry needs a great deal of prompts and encouragement for his daily living needs and his emotional well-being.
- I have also considered the two letters from Dr. Samuel. This first is referenced in para. 22 above. Dr. Samuel’s second letter is dated February 1, 2022. It provides as follows:
Please be advised that it is my medical opinion that Walter Terry is cognitively impaired and incapable of managing his financial affairs.
[25] Dr. Samuel’s opinions are uncontroverted by any evidence from Ms. Styles. She has provided no evidence, either from her own observations or by providing contrary medical evidence of any kind, as to Mr. Terry’s capacity in December of 2020. Ms. Styles has not requested that a formal capacity assessment be conducted.
[26] I have not considered the mini mental status examination results attached to Ms. McDonald’s second Affidavit. Dr. Samuel did not refer to same in his letters. I have no context or background to understand the results.
Conclusions:
[27] I find that Mr. Terry is incapable within the definition of the Rules. Pursuant to Rule 7.02. I appoint Ms. McDonald as his litigation guardian. There is no need for me to consider the alternative relief claimed. Counsel may arrange a 10-minute virtual attendance before me to schedule a date for the substantive merits of the claims in the application against Ms. Styles to be argued.
Coats J.
Date: May 26, 2022