Ontario Superior Court of Justice
Court File No.: CV-25-00735566-00ES
Date: 2025-05-02
Between
Bob Alan Barker, also known as Bob Barker
Applicant
– and –
Catherine Elizabeth Barker, also known as Catherine Barker-Hoyes, in her personal capacity and in her capacity as Estate Trustee for John Joseph Barker
Defendant
Applicant Counsel: Allan Sternberg and Karen J. Sanchez
Respondent Counsel: Kim Gale and Kiran Sangher
Heard: April 30, 2025
Reasons for Judgement
Papageorgiou J.
Overview
[1] Bob Alan Barker (“Bob”) and Catherine Elizabeth Barker (“Catherine”) are siblings. Their brother John Joseph Barker (the “Deceased”) passed away on June 19, 2024.
[2] John had health issues. He had suffered a serious illness in his youth, which resulted in delayed development. While mentally alert up until his death, and capable, John was never adept at managing his financial affairs, either due to a lack of understanding or disinterest. His late mother provided significant support to him over the years including purchasing a condominium for him where he lived alone until 2021 (the “Condominium”).
[3] In 2021 John moved to a long-term care facility because of his declining health.
[4] In 2023, his mother died.
[5] Catherine was involved in managing his financial affairs. John appointed Catherine as his power of attorney on September 10, 1987 (the “POA”). By profession, Catherine is an accountant.
[6] Under John’s will, Catherine was appointed Estate Trustee for his Estate. The will has not yet been probated. Bob is named as the alternate Trustee in the will.
[7] In this Application, Bob seeks an order removing Catherine as Estate Trustee and also disqualifying her from receiving her share of the Deceased’s Estate due to alleged breaches of fiduciary duty and misappropriation from John and/or the Estate.
[8] Bob brought a motion for production of various documents and records. Initially the motion included documents related to John’s assets including his bank statements, and the details of any brokerage accounts but those have now been produced and/or they do not exist in the case of the brokerage accounts.
[9] The documents that Bob still seeks and which have not been produced relate to Catherine’s own line of credit and any other bank accounts where funds from John’s Estate may have gone including her mother’s account statements.
[10] The specific items that he still seeks are as follows:
- a sworn statement of the nature, value and location of the assets of John Joseph Barker ("John") as at the date of his death and at the present time.
- copies of all bank statements in her power, possession or control relating to the bank accounts of the Respondent, the parties' late mother or anyone else associated with the Respondent into which funds that originated from John both during his lifetime and after his death were deposited or transferred.
[11] Catherine says this is an improper attempt to review her assets and personal financial dealings. She says that this is a fishing expedition and an attempt at execution before judgment.
Decision
[12] For the reasons that follow, I grant some of the orders sought as set out at the conclusion of my decision.
Analysis
Should the court make an order requiring the requested production and requiring Catherine to be examined under oath regarding it?
[13] Bob has provided the following evidence of inconsistency and lack of transparency by Catherine with respect to John’s affairs, supported with documentary evidence.
Sale of John’s Condominium
[14] In 2021, Catherine assisted John with the sale of his Condominium when he moved to a long-term care facility.
[15] A neighbour purchased the Condominium and so there were no real estate commission fees. The notes that John saw of the sale indicated that the proceeds of sale were $500,000. This, together with John’s pension and other benefits should have provided John with financial resources for his maintenance and care. However, Bob’s evidence is that John frequently expressed to him that he did not have enough money for basic expenses.
[16] During a visit with John in the spring of 2023, John advised Bob that he was unaware of the total amount of money he had remaining following the sale of the Condominium, and further advised Bob that Catherine controlled his finances. Bob urged him to seek a financial update from Catherine.
[17] In June 2023, Catherine provided John an Investment Summary.
[18] The Investment Summary showed that the net proceeds of sale from the Condominium was $474,300. It showed that this $473,300 were invested in the stock market and that as of June 5, 2023, these funds had a value of $420,529.74. It also showed that John had received $150,000 from the life insurance proceeds of his late mother, and that these were invested, but no summary as to the value of this investment as of June 5, 2023. It set out a list of securities purchased with the Condominium and life insurance proceeds. It provided John with the book cost, amounts withdrawn, market value as of June 5, 2023 and the gain or loss with respect to the securities purchased with the Condominium proceeds. It showed the overall value of his assets at that time to be approximately $550,000 and that this was comprised of investments with various brokerages and in various funds.
[19] On June 19, 2023, John emailed Bob a copy of the Investment Summary together with Catherine’s email. The email indicated that it was a summary of “your” investments.
[20] However, during Catherine’s cross examination, she denied that any of these funds had ever been invested despite the Investment Summary. According to Catherine, the Investment Summary was a mock representation of her own personal investments, created at John's request to illustrate the potential value of John's funds had he invested in the same assets. Catherine described the Investment Summary as a "shadow" summary. However, this is not reflected in the accompanying email or Investment Summary. There is no documentary evidence supporting this at all and this proposition is completely at odds with the Investment Summary.
Failure to Disclose Where John’s Money Was Invested
[21] After John's death in 2024, Bob began requesting financial disclosure related to the Estate. Catherine, however, responded with evasive, inconsistent, and often delayed answers to these requests, raising Bob's suspicions of possible misappropriation of Estate funds.
[22] Catherine eventually provided a document entitled Source and Use of Funds Summary. It purported to show that the source of John’s funds was approximately $500,000 from the sale of his condominium in April 2021 and $150,000 from his mother’s life insurance policy. This is inconsistent with the Investment Summary that showed $474,300 in proceeds from the sale of the Condominium. Notably, this is also inconsistent with the reporting letter that Catherine eventually provided on February 14, 2025 that showed that the net proceeds of sale were $520,380.
[23] The Source of Use Funds Statement also shows withdrawals and transfers to John totaling $72,588.00 from July 6, 2021, to June 18, 2024, with the total value of John's assets reported as $551,712.00. However, a review of John’s bank statements provided by Catherine to date shows a different figure, with deposits to him amounting to only $47,000.00.
[24] As well, the Source of Use Funds Statement does not indicate where John’s funds were held and whether they were invested.
[25] Bob continued to ask Catherine for updates on the status of the Estate’s assets. He believed its liabilities would be low and asked Catherine for an interim distribution as he and Catherine are the only two beneficiaries.
[26] For months Catherine provided excuses as to why an interim distribution could not be made. She cited complications involving the CRA including disability tax credits and potential reassessments for prior years. She said she could not make any disbursements before receiving a final Notice of Assessment based upon a legal opinion she had received. When Bob asked for a copy of the legal opinion, she said it was too expensive to obtain a written opinion and he should simply accept what she said. She declined Bob’s offer to assist with CRA issues.
[27] Catherine finally provided John’s 2023 Notice of Assessment dated May 24, 2024 that showed that he had an outstanding balance of $4,472 for 2023 and that the CRA had confirmed his eligibility for disability tax credits for 2021 and subsequent years. Bob asserts that this shows she was using CRA issues as an excuse.
Sudden Disclosure of Loan Agreement which is Inconsistent with the Investment Summary
[28] In December 2024, following Bob's persistent follow-ups to Catherine regarding the status of the administration of the Estate, Catherine produced to Bob, for the first time, a document purporting to be a loan agreement between John and Catherine, dated March 2021 (the "Loan Agreement") whereby John loaned Catherine $474,300 (the exact amount that the Investment Summary said had been invested on John’s behalf) at an interest rate of 1.537%. The first point I will make is that this is a very odd interest rate.
[29] Further, even though Catherine is not a real estate agent, it indicated that John paid her a 5% commission of $26,375 in respect of the Condominium sale, which amount would be paid over 3.62 years such that it would constitute the interest owing on the loan. It further provided that the 1.537% interest compensated Catherine for services she provided John related to managing his affairs. Finally, it stated that the remaining balance of the loan plus any interest would be paid to John’s beneficiaries upon the sale of Catherine’s home within one year of John’s death, if Catherine was not the sole beneficiary.
[30] Thus, the loan was effectively interest free for 3.62 years.
[31] The witness to the signing of the Loan Agreement is David Hoyes, Catherine's husband. The agreement was reportedly signed at John's long-term care home on March 21, 2021, during COVID, at which time Catherine, identified as an essential caregiver for John, was allowed into the facility together with the witness David Hoyes. There were strict entry restrictions during COVID and Catherine’s only explanation as to why David Hoyes was allowed into the long-term care home to witness the signature was that John was in a wheelchair.
[32] Catherine admits she did not advise John to seek independent legal advice in respect of the loan.
[33] There is also no satisfactory explanation as to why Catherine provided an Investment Summary and Statement of Uses of Funds that directly contradicts the loan. If the monies were invested as set out in the Investment Summary provided in June 2023, then they could not have been loaned to Catherine two years prior as she says pursuant to the loan agreement dated March 2021.
[34] There is no satisfactory explanation as to why the Source and Use of Funds Statement Catherine provided to Bob after John’s death fails to reference the Loan Agreement.
[35] There is no explanation as to why John would have been asking for a summary of his investments and why Catherine would have provided John with a covering email on June 13, 2023 attaching the Investment Summary stating as follows:
Hi John, I have attached the summary of your investments that you requested. I will receive the investment results for the life insurance proceeds sometimes in July for June 30, 2023. The stock market has improved recently so hopefully the results will show that. I will bring a printed copy of the summary when I come on June 19. Call me whenever you want to discuss the results. Also, it may be a good time to shift some of your money into GICs which are paying over 5% for 1 year. You can't cash out a GIC until its term is over, for example at the end of 1 year. As a result, we should only put an amount of money in a GIC that you won't need to cash until the term is up.
[36] If the monies had actually been loaned to Catherine in March of 2021, it is odd that this email from Catherine would not have referenced the loan.
[37] The existence of this loan is also inconsistent with an email that John sent Bob shortly before he died which stated:
I have no idea where my finances will be today. I asked Catherine again to provide the Hard copy scanned documents. I have Intuit Mint software to help me understand we're [sic] the investments Catherine has split in such a confusing way that I just want to understand these matters better.
[38] Finally, the sale of the Condominium closed on April 15, 2021. It was at that point that the proceeds of sale would be known. The Loan Agreement was purportedly entered into in March 2021 before the proceeds of sale were known. It is odd that the amount of the loan purportedly made in March 2021 is the same amount as the proceeds of sale set out in the Investment Statement, which amount could not have been known until April 15, 2021 when the sale closed.
Lack of Transparency on the Proceeds of Sale of the Condominium
[39] The bank records provided by Catherine thus far also show that only half the proceeds of sale of the Condominium were deposited into John’s account, with $250,000 transferred out the same day. Catherine indicated that the other half was deposited into her mother’s account at the insistence of the real estate lawyer, despite the fact that her mother held only a 3% interest.
[40] Catherine’s position is that all of this money was then transferred to her in respect of the above loan.
[41] In addition, Catherine admitted that she received cheques totaling $520,000 from the sale of the Condominium and yet she maintains that the proceeds of sale were only $500,000. She claims that the difference relates to her own expenses in preparing the Condominium for sale but she failed to produce any receipts. When Bob asked for production of receipts Catherine produced receipts totaling only $4,629.66 not $20,000 that she had claimed. Furthermore, John’s chequing account arguably shows that he paid her back. His bank records show exactly $3,000 being electronically transferred on March 24, 2021 and $1,629.66 being electronically transferred on March 25, 2021. These total exactly $4,629.66 and were paid around the time when Catherine had listed the Condominium for sale and would have incurred expenses. It is not believable that this exact amount and the timing of the electronic transfer does not relate to the expenses that Catherine says she incurred to sell the Condominium.
Failure to Account for John’s Share of Proceeds from Life Insurance
[42] John’s share of their mother’s life insurance proceeds totaling $150,000 were not deposited into John’s chequing or savings account either. Instead, it was deposited into a joint account Catherine opened on February 13, 2023. These funds were transferred out the next day. Catherine says that these funds were transferred to her personal line of credit because she had been paying his bills out of the funds from the Loan Agreement and that the $150,000 was to “top up” the loan. This makes little sense for a number of reasons.
[43] Very few bills were paid from this joint account. Further, John had his own bank account that the $150,000 could be transferred into. He was capable and paid his own expenses on an ongoing basis. There was no need for a joint account to be opened for this purpose and this money placed in this account contrary to Catherine’s assertion.
Concerns Regarding the Distribution of the Life Insurance Proceeds
[44] Bob also says that his understanding is that their mother’s $300,000 life insurance was to be shared evenly among the siblings. He was never provided with a copy of the insurance policy and later discovered, well after the proceeds were paid, that the money was paid to John and Catherine only in the amount of $150,000 each.
[45] Catherine told Bob that she did not know why their mother would have made this change and when Bob asked for a copy of the policy, she told him that the copy was missing the beneficiary page and he never received an accounting of their mother’s estate.
[46] Their mother was 97 years old and Catherine held a power of attorney for her property and was also the Estate Trustee of the mother’s estate.
Inconsistent Statements Made to the Court by Catherine
[47] At a case conference before Dietrich J., Catherine’s lawyer repeatedly told Dietrich J. that Catherine had never used the POA. However, she eventually admitted that she used it to complete the Condominium sale.
The Relevant Statutory Provisions
[48] Rule 74.15(1) of the Rules of Civil Procedure give the court the broad discretion to order particulars or productions in an estate matter where a beneficiary seeks it:
In addition to a motion under section 9 of the Estates Act, any person who appears to have a financial interest in an estate may move,
(d) for an order requiring an estate trustee to file with the court a statement of the nature and value, at the date of death, of each of the assets of the estate to be administered by the estate trustee;
(e) after receiving the statement described in clause (d), for an order for further particulars by supplementary affidavit or otherwise as the court directs;
(i) for an order providing for any other matter that the court directs.
[49] This is broad. Indeed, the exact wording in (d) is the exact wording of the first thing that Bob requests which is “a sworn statement of the nature, value and location of the assets of John.” I am satisfied that the information provided has been inconsistent and raises issues as to whether it is accurate. Therefore, I make this order.
[50] With respect to the records related to Catherine and her mother’s bank accounts, Bob’s argument is that he has pleaded and also supported with evidence the proposition that Catherine misappropriated John’s assets while he was alive in terms of the funds from the Condominium Sale and the proceeds of the life insurance policy.
[51] While I appreciate that Catherine’s argument is that any funds she received were loaned to her, and that she is prepared to repay them, there are many questionable aspects to this loan which I have set out above. These include the fact that it was not mentioned in the Investment Summary or the Source and Use of Funds and that it was in the exact amount set out in the Investment Summary as the proceeds of sale of the Condominium, which no one knew until the sale closed which was after the loan was allegedly made.
[52] Catherine admits and the records show that she was the one who completed the sale by signing as a power of attorney.
[53] Section 32(1) of the Substitute Decisions Act states:
32 (1) A guardian of property is a fiduciary whose powers and duties shall be exercised and performed diligently, with honesty and in good faith, for the incapable person's benefit.
[54] Section 38(1) of the Substitute Decisions Act states:
Section 32, except subsections (10) and (11), and sections 33, 33.1, 33.2, 34, 35.1, 36 and 37 also apply, with necessary modifications, to an attorney acting under a continuing power of attorney if the grantor is incapable of managing property or the attorney has reasonable grounds to believe that the grantor is incapable of managing property.
[55] Bob has pleaded and also raised a reasonable claim with evidence that Catherine sold the Condominium in a fiduciary capacity based upon her use of the POA. Catherine’s counsel argued that since John was capable, the use of the POA was as agent, but even if that was the case, she still would have owed him a fiduciary duty as his agent. As set out in Doherty v. Doherty, 2023 ONSC 1536:
An attorney for a donor who has mental capacity to deal with property is merely an agent and, notwithstanding the fact that the power may be conferred in general terms, the attorney's primary responsibility in such a case is to carry out the instructions of the donor as principal. As an agent such an attorney owes fiduciary duties to the donor but these pale in comparison to those of an attorney holding a continuing power when the donor has lost capacity to manage property. [Emphasis added]
[56] With respect to the request for production of Catherine’s personal records, Catherine points out that the legislation pursuant to which trustees are appointed do not create any right for a beneficiary to access the personal financial records of debtors/borrowers (which she says she is pursuant to the Loan Agreement) or that they are entitled to the personal records of an Estate Trustee. She references s. 48 of the Trustee Act that sets out the duties and powers of a trustee.
[57] That may be, but the relevance of Catherine’s personal bank records as well as her mother’s account records must be assessed based upon the case pleaded. The pleadings in an application are all of the materials including the affidavits. It is trite that he is entitled to obtain relevant productions and answers to relevant questions and that relevance is determined based upon the pleadings: R v. Rothman, 2011 ONSC 3685; Khan v. City of Hamilton, 2021 ONSC 2510.
[58] The Application seeks Catherine’s removal as trustee, and an order requiring Catherine to disgorge any improperly obtained funds and/or proceeds and profits in breach of fiduciary duty. The materials before me allege a right to trace any proceeds. The materials specifically call into question the validity of the loan. The court hearing the Application will have to make findings on the issues in the Application which arguably includes the validity of the loan and which certainly will include findings as to where John’s money went.
[59] I reject Catherine’s argument that this Application is ten steps premature. That is, she argues that Bob must first wait the full year that the loan agreement gives Catherine to repay the loan, then sue her on the loan, and/or bring a proceeding to invalidate the loan, and then only after he has won is there any right to trace proceeds and obtain information as to where the money went.
[60] I also reject Catherine’s argument that any issues can be addressed when she seeks to pass her accounts.
[61] Her suggestions are not the only way these matters can be adjudicated. This Application is the proceeding that Bob brought and where these issues will be adjudicated. He was entitled to pursue his claim in the manner he determined would most effectively resolve the issues he raises.
[62] Catherine has not cited any law that prevents Bob from bringing this Application.
[63] Bob has pleaded and raised a reasonable claim that the loan agreement is not a valid agreement. Bob has pleaded and raised a reasonable claim that Catherine has violated her fiduciary duty in the exercise of her duty as agent through using the POA to complete the sale and then direct the sale proceeds and life insurance proceeds to herself.
[64] I am also satisfied that there is a reasonable claim pleaded that Catherine owed John fiduciary duties on an ad hoc basis as a result of their particular relationship because of her involvement in assisting with the management of his financial affairs: Galambos v. Perez, 2009 SCC 48 at para 48.
[65] I am satisfied that the evidence before me, set out above, raises a sufficient concern over the way that Catherine dealt with John’s assets during his lifetime, that there are concerns as to what his current assets should be and whether she may have diverted John’s funds for her personal benefit.
[66] Catherine’s agreement that she will pay him ½ of John’s assets (including ½ the proceeds of sale of the Condominium and the life insurance proceeds) does not resolve this Application.
[67] Having provided evidence that the funds in question went into her line of credit, Catherine is not then entitled to prevent Bob from confirming this with the actual line of credit statement. It will be relevant in a number of ways. If she has said this in her affidavit and the line of credit does not confirm this, then this is relevant to her continuation as a trustee because she has acted dishonestly vis a vis another beneficiary.
[68] If the money did not go into the line of credit as she says, then it also raises questions as to where the money did go. If the loan is not valid as is argued, and if the money did not go into the line of credit but elsewhere, and Catherine made money from wherever the funds did go, there is an argument that the money earned is owed to John’s estate and that Bob has the right to trace it.
[69] It is also relevant because the line of credit will show the interest rate that she was paying and that she then did not have to pay because the money from John was used to pay that down.
[70] Furthermore, and in any event, because Catherine referenced her line of credit in her affidavit, it is producible pursuant to r. 30.04(2) specifically provides that:
(2) A request to inspect documents may also be used to obtain the inspection of any document in another party's possession, control or power that is referred to in the originating process, pleadings or an affidavit served by the other party. [emphasis added]
[71] Bob delivered a Request to Inspect but Catherine would not produce any portion of her line of credit statement.
[72] I am satisfied that parts of Catherine’s line of credit should be produced because it will assist in resolving a matter in dispute before the Application judge which is whether John’s money from the Condominium Sale and the life insurance proceeds went into the line of credit as Catherine alleges.
[73] However, I do not order production of all the records because there is no proven relevance at this stage. I only order production from the date that Catherine says the money was transferred into the line of credit and only enough to show whether the money was in fact deposited into the line of credit, the amount outstanding when it was deposited, and the interest rate. There is no basis to conclude that if Catherine continued to purchase things using her line of credit, that this would have any relevance to the issues in this matter.
[74] I am also not satisfied that Catherine’s other bank records should be produced at this time. It may be that the line of credit statement shows that the monies went into the line of credit as she says. If that is the case, then it is unclear why any of her other bank records would be relevant to the issues in this Application. And I note that there is no evidence that John had any assets other than the life insurance proceeds, the Condominium and his bank accounts.
[75] If it turns out that the line of credit statement does not show that the money went into it, then the parties may return before me to revisit the issue of further productions. However, I am loathe to order this at present because these other bank records are private and Bob is not entitled to conduct a fishing expedition irrespective of the concerns I have outlined above. He still must establish relevance.
[76] I am also satisfied that the mother’s bank records should be produced for the same reason on the same basis. Again, if the records do not show that the funds were deposited into her account, then the parties may return before me to revisit the issue of production of other bank records that could show where the money went.
[77] While Bob raised the issue of comingling of John’s money with hers, until there is evidence that the funds were not actually placed in her line of credit but in one of her other accounts with her own funds, no issue of comingling arises. There can also be no issue of commingling in her line of credit because a line of credit does not contain a person’s own money. Rather, it reflects borrowing from a bank.
[78] Finally, I am also satisfied that Catherine should have to attend and answer questions on these productions including those that she recently provided as answers to undertakings at her cross examination that related to all of John’s bank records.
Conclusion
[79] Therefore, I order that Catherine produce:
- A sworn statement of the nature, value and location of John’s assets as at the date of his death and at the present time.
- A copy of Catherine’s line of credit statement which shows the date the Condominium proceeds were placed into it, the amount that was outstanding at that time and the interest rate.
- A copy of Catherine’s mother’s bank statement for the account that the life insurance proceeds and Condominium sale proceeds were deposited which shows the date any proceeds were deposited, the amount, and the date that such proceeds were withdrawn.
[80] I also order that she attend to be examined under oath in respect of the above productions as well as any productions she made and undertakings she answered at her cross examination.
Costs
[81] With respect to costs, each side seeks costs but Bob is the successful party and presumptively entitled to costs.
[82] He has provided a Bill of Costs that shows costs in the amount of $17,713.50 on a partial indemnity basis plus an estimated $1,186.50 for the appearance fee and $1,479.74 in disbursements.
[83] Catherine’s Bill of Costs is $24,318 which is comparable and which demonstrates that Bob’s costs are within Catherine’s reasonable contemplation.
[84] The rates and time spent by Bob are reasonable. The matter was quite complex in terms of the materials filed and I award Bob his requested fees in the amount of $18,900 ($17,713.50 + $1,186.50) and HST in the amount of $2,457 plus disbursements in the amount of $1,479.74. I note that there was no mention of HST in respect of the disbursements and I assume that the HST was included in the disbursements cited.
[85] I order that the costs are to be paid personally by Catherine and not out of the Estate’s assets. In opposing this motion and in failing to provide the records that she herself has relied upon, she acted unreasonably and not in the best interests of the Estate. Rather, she has acted for her own benefit. The cause of Bob’s concerns has been Catherine’s own inconsistent and problematic revelation of details related to John and his Estate.
Papageorgiou J.
Released: May 2, 2025