COURT FILE NO.: CV-21-00668552-00ES
DATE: 20231124
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE GUARDIANSHIP OF PERSON AND OR PROPERTY OF BHUPINDER KUMAR RAI AND NEERA RAI
Re:
LALIT RAI,
Applicant
-and-
ANU BHALLA, BHUPINDER KUMAR RAI, NEERA RAI, and THE PUBLIC GUARDIAN AND TRUSTEE,
Respondents
BEFORE: FL Myers J
COUNSEL: Robert McGlashan and Andrew Rance, for the applicant
Sajid Hossain, for Neera Rai
Tracey Rynard, for Anu Bhalla
HEARD: November 23, 2023
ENDORSEMENT
[1] By amended notice of application dated July 28, 2023, the applicant Lalit Rai seeks 23 heads of relief that can be broadly summarized as:
a. An order removing his sister Anu Bhalla as attorney for their mother Neera Rai under 2021 and 2023 powers of attorney signed by the mother;
b. An order removing the mother as attorney for her husband - the applicant’s father - Bhupinder Kumar Rai;
c. An order appointing the applicant and a brother Ravi Rai (who is not a party to this proceeding) as guardians for their father;
d. An order requiring the sister, Anu Bhalla, to account for and to repay their parents any funds taken by her or given to her by either parent on the grounds of undue influence;
e. An order for production of various lawyers’ files concerning the parents’ activities and medical records relating to the father’s health;
f. An order prohibiting the sister and mother from taking any actions in connection with property of the mother and father and requiring them to account for all funds spent by the sister relating to the care or property of her parents from 2020 forward;
g. Orders preserving 3050 Ellesmere and recognizing that the applicant has a constructive or resulting trust in the property;
h. An order declaring that the mother’s will signed in 2021 is invalid;
Very General Background to Provide Context
[2] The resolution of this application does not turn on an assessment of the merits of the parties’ allegations. I need to provide some background to give context to the procedural issues. But what follows is not intended to be a complete recitation of all or nearly all of the evidence filed. As I will discuss below, both sides asserted a need to adduce further evidence to get to the bottom of the financial issues between them.
[3] Prior to the application coming before me for hearing on November 23, 2023, my colleague Gilmore J. case managed the proceeding.
[4] In May of this year, Gilmore J. required that the mother, Neera Rai, be assessed by a recognized and neutral capacity assessor.
[5] The capacity assessor determined that Mrs. Rai had capacity. This was actually the third capacity assessment obtained for Mrs. Rai. The two prior assessors also found that she had capacity. Shortly after the most recent capacity assessment confirmed her capacity, Mrs. Rai signed the 2023 powers of attorney in favour of her daughter Anu Bhalla.
[6] The applicant claims that his mother was actively coached by a grandchild prior to the most recent capacity assessment.
[7] The parties agree that the father lacks capacity and has for some time. He is cared for by Mrs. Rai under a power of attorney.
[8] For many years, the parents relied on the applicant son to help manage their care and their finances. Mrs. Rai has given evidence to the effect that while she loves the applicant and she used to trust him, his angry, bullying behaviour upon being asked to account for financial issues led her to change the way she managed her affairs. That is why she appointed her daughter Anu Bhalla under the 2021 powers of attorney and why she reinforced the powers of attorney this year after a renewed capacity assessment.
[9] Mr. Rai’s anger issues play prominently in the facts. The father’s doctor complains about dealings with Lalit Rai. Gilmore J. had to bar him from attending case conferences due to his apparent inability to self-regulate. I do not ignore that there is evidence from friends of the family, the father’s PSWs, and other caregivers that strongly support the applicant in his care for his family. But having a loving motive and angry behavioural outbursts are not inconsistent.
[10] The applicant claims that he has been maligned by lies fed to his mother by his sister Anu Bhalla. Of greatest concern, the applicant points to allegations made by the sister that he took or at least has failed to account for irregularities with a value as much as $640,000.
[11] As a result of these allegations, the applicant has sued his sister and his mother for defamation in separate proceedings. The applicant is seeking damages of $10,500,000 from his mother and sister in the defamation action.
[12] I note parenthetically that even if the applicant was still challenging the parents’ powers of attorney, the defamation lawsuit alone would likely preclude him from being appointed as the parents’ guardian. The conflict of interest in being plaintiff while being responsible as a fiduciary to guard the property of a defendant is patent.
[13] The applicant has adduced expert evidence to show that he has accounted for all the parents’ funds that were under his stewardship. He has also sought particulars of the allegations relating to the $640,000 and says that his sister has not produced any support her allegations despite being ordered to do so by Gilmore J.
[14] The applicant also asserts that since his sister arrived on the scene, his father’s health has deteriorated. The father is 92 years old and is bed ridden. He has round-the-clock care. The applicant says that his father’s decline in health over the past few years is due to his sister’s and mother’s failure to care for the father as well as the applicant could and used to do.
[15] The applicant asserted that the sister exercised undue influence over their mother by lying to her about the applicant’s handling of the family’s finances. But Mrs. Rai has her own issues with the applicant. She says that when she asked her son why interest on mortgage investments had stopped for three months, he did not tell her that he had renewed the mortgages and was keeping the interest from her. Instead, he became angry with her and this then led to the ultimate breakdown of their relationship. Now he has sued her. Even if the prior events were sorted out, the applicant’s ongoing behaviour precludes Mrs. Rai from wanting him involved with her affairs.
[16] Finally, I note that the respondent sister and mother have recently disclosed details of some $900,000 of the parents’ money that they say is not properly accounted for by the applicant. The applicant says that these are new and separate allegations from the false $640,000 allegation that was the basis of the undue influence that led the mother to change her powers of attorney and exclude him from caring for his parents.
The Initial Directions for the Hearing of the Application
[17] By endorsement dated July 28, 2023, Gilmore J. scheduled the hearing of the application over two days. She explained how the application was to proceed as follows:
The purpose of today's conference was to set a litigation timetable and deal with all outstanding issues to ensure this matter is ready for the two-day hearing which is scheduled to take place on October 30 and 31st, 2023.
This is high conflict litigation which I have been case managing for several months. Case conferences have been held in September and December 2022 and in March, April and June 2023. In my June 30, 2023 endorsement I determined that the parties were so polarized that further conferences were futile. The hearing dates were set. I requested that the parties return on today's date with a litigation timetable.
The discussion at the June 30, 2023 conference regarding procedure was that, given the results of the capacity assessment dated May 16, 2023 in which Neera Rai was found capable, Ms. Rynard would bring a motion to dismiss the within Application and the Applicant would bring a cross-motion for various declaratory relief with respect to the capacity assessment and his parents' POAs.
At today's conference, Mr. McGlashan has taken a different approach. He has amended his Application and now seeks to proceed with the relief therein. Ms. Rynard does not object so long as her motion to dismiss is heard first. If she is successful, the hearing of the Application will not be required.
There were further discussions and disputes regarding disclosure. It important that this matter be ready to proceed in October 2023. As such I make the following rulings to ensure the matter is kept on track.
The Applicant will serve his Amended Application and a further supplementary affidavit by August 4, 2023. Leave is given to amend.
Ms. Rynard's motion and supporting material to be served by August 4, 2023.
Responding material to the Application and the motion to be served by August 25, 2023.
Any reply material to be served by September 1, 2023.
Cross-examinations to take place on September 20 and 21, 2023. Cross examination of any party not to exceed four hours. Mrs. Neera Rai to be given appropriate breaks including a full 30-minute break after two hours of examination.
Mr. McGlashan to deliver his factum on the Application and Ms. Rynard on her motion by October 13, 2023. Responding factums to be delivered by October 20, 2023. Any reply factums to be delivered by October 25, 2023.
The Applicant may summons Mr. O. Hoque to the hearing. Mr. Hoque to bring his file. The judge hearing the Application to determine whether the contents of Mr. Hoque's file should be produced and/or oral evidence should be given by Mr. Hoque.
Dr. Ilacqua's file to be produced in its entirety to all parties forthwith.
Ms. Shah's file to be produced in its entirety to all parties forthwith.
In the event that Mr. McGlashan intends to file any expert evidence in response to either Dr. Ilacqua or Ms. Shah's findings he must do so as soon as possible.
Mr. McGlashan insists that I order Mrs. Rai to produce evidence to support her contention that Lalit Rai misappropriated $640,000 from her and husband's joint assets which prompted them to change their Wills and POAs in 2021. Mrs. Rai submits that the request is irrelevant as she has changed her Will and POA and cannot be compelled to produce them. Capacity and undue influence are two separate issues. Mrs. Rai may have had capacity to change her Wills and POAs in 2021 and in 2023 but that does not mean she could not have been subject to undue influence. As such, Mrs. Rai to provide evidence of any alleged misappropriation of funds by Lalit Rai.
Ms. Rynard's motion to dismiss to be heard prior to the hearing of the Application. The presiding judge may determine in his or her discretion whether the hearing of the Application should immediately follow or whether time is needed to render a decision on the motion.
Costs of today's conference are reserved.
[Emphasis added.]
[18] The amended notice of application that I summarized at the outset of this endorsement is the one discussed by Gilmore J. above.
[19] On the eve of cross-examinations, the applicant disclosed numerous audio recordings that he had made surreptitiously. He included translations to English that he had made. The recordings included a conversation among the mother, the sister, and Mr. Hoque the mother’s lawyer. The applicant says it shows that the sister was instructing counsel for the mother. But he does not seem to see any concern with his recording and releasing privileged information or the possible applicability of the Criminal Code to some of the recordings.
[20] As a result of the release of the recordings, the cross-examinations did not proceed as scheduled. The parties attended before Sanfilippo J. who revised the schedule so that the hearing of the mother’s motion for judgment and the main application would proceed before me on November 23 and 24, 2023.
The Respondent Abandons his Attacks on the Parents’ Powers of Attorney and his Request for Guardianship
[21] In his first reply factum, delivered one week before the hearing date, the applicant made two major changes in his approach. First, he dropped his attacks on the parents’ powers of attorney. He expressed his narrowed claim for relief as follows:
- The Applicant seeks the following relief:
a. To withdraw his application concerning the power of attorney of his mother without prejudice to the ability to challenge the will or any actions taken under the power of attorney when it is activated.
b. An order that there be an accounting of what has happened to his father's assets since the respondent Neera activated the Power of Attorney and has been under the influence of Anu.
c. A declaration that he does not owe his mother $640,000.
d. A declaration that there was no financial impropriety.
e. A declaration that the capacity test of Neera is not valid as the circumstances of it being conducted were in breach of a court order.
f. An order for a section 3 lawyer be appointed for Neera.
g. An order for a section 3 lawyer be appointed for Bhupinder.
h. A declaration that the property 607-11 Wincott is the property of Lalit Rai.
i. An order for direction concerning disclosure and information for Lalit about his father's health and financial status. Specifically, what happened to Neera Rai's TFSA account.
[22] Second, in response to the mother’s motion for summary judgment, the applicant submitted that a trial was required on the financial issues. Counsel wrote:
During this Application, the Respondents have made numerous accusations of financial impropriety by the Applicant. They have not provided an accounting or full disclosure regarding the numbers they provided. As such they have not met the burden of proof.
This issue requires a trial.
and,
The volume of evidence provided in this case requires a full hearing.
There is further oral evidence to be provided, as well as additional evidence to be provided by witnesses that have been summonsed.
It is necessary that the court complete a full hearing in order to experience the full value of the witnesses knowledge.
[23] So last week, the applicant decided to drop his claims against the parents powers of attorney and to push for a trial with numerous procedural directions for extensive disclosure. That was not what had been contemplated by Justice Gilmore’s endorsement. As set out in bolded text above, The application was supposed to be about the validity of the parents’ capacity and powers of attorney
The Hearing
[24] When the hearing began on November 23, 2023, counsel for Mrs. Rai advised that he had served summonses to call four witnesses to attend court to give live testimony. Counsel for the applicant also had three witnesses plus he had served summonses on Mrs. Rai and on Mr. Hoque (as anticipated by Gilmore J.).
[25] Counsel for the applicant advised that Mr. Hoque was before the Court of Appeal so he was unable to comply with the summons. Apparently, when counsel changed the date of the hearing before Sanfilippo J., no one checked Mr. Hoque’s availability.
[26] Counsel for the mother Mrs. Rai also advised that Mrs. Rai found the litigation too stressful so that “she could not be bothered” to attend despite the service of a summons upon her.
[27] I was surprised, to say the least, at the cavalier approach to summons to witness. I do not understand how no one thought to address these issues with the court in advance before ignoring lawful summonses and risking being held in contempt of court.
[28] Be that as it may, the applicant proposed to call his financial expert witness who had prepared the report showing that had accounted for the $640,000. This was in response to the request of counsel to the mother to cross-examine the expert in open court. The mother’s counsel also wished to call two lawyers as witnesses to show what happened to the mortgage funds that the mother believed had gone astray. He also proposed to call one of the father’s caretakers as a witness. She had provided an affidavit and the respondent mother’s counsel wished to cross-examine her.
[29] For his part, the applicant also asked to call two live witnesses being a lawyer who had been retained for the father at some point and a financial adviser from Edward Jones who would testify that the sister had funds moved to her own advisors in Ottawa.
[30] The parties seemed to be launching into a trial, with eight or nine live witnesses, to be heard in two days, on top of the motion for summary judgment by the mother. The one witness who was anticipated to possibly give evidence, if necessary and appropriate, Mr. Hoque, was not among them.
[31] I had little doubt that once witnesses got on the witness stand and were cross-examined, each side would want to adduce reply evidence.
[32] I asked Mr. Hussain the basis on which he proposed to examine witnesses at a hearing of an application. He said that Rule 39.04 (2) provided for a witness to be required to attend at a hearing by summons. He omitted the opening words of that rule “[w]ith leave of the judge”.
[33] No one seemed to give any thought to the fact that Justice Gilmore had managed the proceeding to a hearing on the record. A schedule for delivery of affidavits had been ordered. Justice Sanfilippo deferred the hearing date for a month to accommodate cross-examination dates that had been delayed due to the applicant’s late disclosure of audio recordings. I was not given any explanation of why late evidence ought to be permitted under the schedule or why the mother had not cross-examined the applicant’s expert and the caregiver on their affidavits before the hearing as required.
[34] Of greatest significance to me, on hearing both counsel launch into a trial, was that there was a lack of clarity as to the issues that they sought to have resolved. Each side wanted to call witnesses to tell a piece of story, but no one sought to relate the proposed testimony to the issues before the court. How, for example, could the sister bring a motion for summary judgment, with her mother saying that she needed four witnesses to clarify the financial issues?
The Revised Issues
[35] I spent some time with counsel trying to understand the issues that remained for the hearing or trial.
[36] Counsel for the applicant confirmed that he no longer challenged the mother’s capacity or the parents’ wills or powers of attorney. He was no longer seeking to appoint a guardian for either parent.
[37] Counsel for the applicant advised that the applicant was seeking the following relief:
a. A declaration that the applicant did not take $640,000 and that the sister had not provided disclosure of the $640,000 as required by Gilmore J.’s July 28, 2023 endorsement;
b. Appointment of s. 3 counsel for the father. Financial disclosure concerning the father from the time the sister took over caring for him;
c. Directions to protect the father’s health; and
d. An order that the 2023 capacity assessment of the mother was not valid.
[38] I spent several minutes reviewing the parties’ submissions, reviewing the current amended notice of application, and reviewing the endorsements of Justices Gilmore and Sanfilippo. It seemed to me that the parties were launching into a trial with no trial management and with no pleadings.
[39] As I discuss below, the remaining relief sought by the applicant no longer is available to him in this proceeding.
[40] A trial needs defined issues that flow from defined causes of action. Evidence is adduced to prove the facts that entitle a party to relief or to resist relief. Trials do not just happen. Trials are not free-flowing judicial inquiries into a person’s affairs. Trials are expensive, time consuming, resource-consuming processes with defined purposes and goals.
[41] Both sides complain about lack of disclosure or improper disclosure by the other. That is all supposed to be worked out, with judicial assistance if necessary, in discovery.
[42] There have been no affidavits of documents exchanged in this application.
[43] There have been no examinations for discovery in this application.
[44] There has been no pretrial conference in this application.
[45] There has been no trial management conference in this application.
[46] No judge has approved a trial being held or any live evidence being properly called in this application.
[47] There are no defined causes of action or issues entitling one or the other party to relief identified for a trial.
Analysis of the Remaining Issues
[48] The applicant’s counsel confirmed to me that the mother’s capacity is not in issue at this time. That means:
a. The applicant has no basis to seek the appointment of a guardian for his father. With valid powers of attorney and with his attorney, the mother, having capacity, there is no guardianship sought or available.
b. That means that there is no need for s. 3 counsel for the father. He is represented by his litigation guardian/attorney. Moreover, s. 3 counsel was previously appointed for the father and has since been removed by Gilmore J.
c. The issue concerning the applicant’s alleged mistreatment of $640,000 was the basis of his claim that the mother’s power of attorney was procured by undue influence. Justice Gilmore made that point expressly in para. 11 of the July 28, 2023 endorsement. With the power of attorney no longer in issue, the $640,000 allegation is no longer relevant to any issue before the court. Perhaps it was defamatory if said outside this litigation and if untrue. That will be decided elsewhere. But there is no legal basis for the applicant to claim a declaration in the abstract that he did not take funds from his parents or fail to account properly for those funds. There is no allegation against him in a proceeding properly brought on the Estates List that claims this. If the mother or father ever sue the applicant for damages it could be in issue. There is no such lawsuit now. Nor does the applicant seek to pass his accounts from his time as attorney for his parents. Neither does the mother seek to compel the applicant to pass his accounts.
That is another way to say that there is no cause of action pleaded or in issue before the court that makes the proposed issue of fact relevant to any decision. It is just an allegation of fact hanging in the air.
d. Similarly, there is no cause of action or legal basis on which the applicant can ask the court to make directions concerning his father’s care. The father has an attorney for care under a valid power of attorney.
e. Finally, with no challenge the mother’s power of attorneys (2021 or 2023) there is no relevancy to the question of whether the third and most recent capacity assessment was tainted by coaching. It too is an allegation of fact hanging in air divorced from any fact in issue.
[49] What seems to have happened is that the applicant recognized that he needs more evidence. He wants a trial and discovery. But there is no statement of claim. There is no live cause of action on which to build a case. One cannot just come to court to have a trial with no issues as a form of discovery to support later claims.
[50] Faced with these concerns, Mr. McGlashan pleads with the court to come to the father’s aid. The applicant submits that his father’s health is declining. His assets are declining. The attorney, the mother, delegates her responsibilities to professionals who are realistically being directed and instructed by the daughter. The father’s prior s. 3 counsel wanted to obtain disclosure of the father’s finances and was stymied before he was removed.
[51] Mr. McGlashan repeated several times that with the father’s health at risk, there must be an accounting for his finances. But one does not follow from the other.
[52] In all, I heard a plaintive plea for the court to help Lalit Rai protect his father from his avaricious sister who has their mother under her control.
[53] The law protects vulnerable people. There is a substantial statutory regime in place to do so. But, consistent with the Charter of Rights, this branch of the law starts with the recognition and protection of people’s dignity by respecting their choices as to their care and property. People with capacity are accorded the agency and respect to make their own choices for their own care and property even when it appears to others to be the wrong choice.
[54] There is no challenge to the father’s capacity when he appointed his spouse as his attorney for care and property. Similarly, the mother’s capacity is not currently challenged.
[55] In the circumstances, it is not open to Lalit Rai to undermine his parents’ wishes. He does not seek guardianship – nor could he as discussed above. He does not have the right to compel his sister to account to the parents either. He is not a person listed in s. 42 (4)(1) – (5) of the Substitute Decisions Act, 1992, SO 1992, c 30. Therefore, he needs leave of the court to seek an accounting by his sister as his parents’ attorney under s. 42 (4)(6) of the statute.,
[56] Mr. McGlashan asks me to grant leave to require Anu Bhalla to account under her power of attorney for her mother. There is no process before me seeking that relief. In any event, Mrs. Rai has capacity. She knows that Lalit Rai says she has been and is being mistreated by her daughter. Yet she chooses not to remove Anu Bhalla and not to exercise her undoubted right to compel Anu Bhalla to account.
[57] If Lalit Rai had wanted to bring an application for leave to require an accounting this proceeding would have evolved very differently. Very little of the mass of stuff thrown into the record now would have been required or allowed. This is not an issue that is resolved on the sudden in court in a proceeding that until a week ago was predicated on the incapacity of the mother and allegations of undue influence.
[58] In my view, once the applicant abandoned the relief relating to the powers of attorney and guardianship, any remaining financial issues among the parties are for the civil court. Each is free to sue the other if that is what they want to do.
[59] Mr. McGlashan says that the applicant’s concerns is not to sue for himself, but to protect his father. That does not completely accord with his defamation action. But regardless of that, to the extent that he purports to bring this proceeding altruistically to help his father, then he must respect his father’s and his mother’s autonomy.
[60] In my view, with no pleading setting out cognizable causes of action, there is nothing left to hear in this application. None of the relief sought by the applicant remains available to him as matters of law. The application is therefore dismissed.
[61] The parties all talked to some degree about healing. If that is possible, then perhaps costs, the existing lawsuit, threatened lawsuits, and a modus vivendi (a plan to live or to get along) can all be on the table. If the parties start civil claims, they will be consigning themselves to years of distress and very significant costs. The eight or nine witnesses proposed just for this hearing will be the tip of the iceberg for a massive financial trial.
[62] The parents are both elderly. I can only express my wish for them that the adult children find a way to end the disputes so the family can be at peace for the parents’ remaining years.
[63] If necessary, the respondents may deliver costs submissions by December 4, 2023. The applicant may then deliver costs submissions by December 18, 2023. Costs submissions shall be no longer than three pages, double-spaced, with normal margins, and with a minimum 12-point font. Every party who delivers costs submissions shall also deliver a Costs Outline. Parties pay also deliver copies of any offers to settle on which they rely. Submissions and related material should be sent to me through my Judicial Assistant at therese.navrotski@ontario.ca and uploaded to Caselines.
FL Myers J
Date: November 24, 2023