Reasons for Decision
Court File No.: CV-21-87954
Date: 2025/01/24
Ontario Superior Court of Justice
Re: Lyse Scharfe in her capacity as Attorney for Property and Attorney for Personal Care of Yvette Poirier, Applicant/Moving Party
And
The Estate of Paul Poirier, deceased, Lynda Lortie, Jenny Lortie and The Public Guardian and Trustee, Respondents
Counsel:
J.P. Zubec, for the Applicant
Michael R. Switzer, for the Respondents
Heard: September 3, 4 and 5, 2024 in Ottawa
Justice Charles T. Hackland
Overview
[1] This application concerns the entitlement to the former home (“the property”) of the applicant Yvette Poirier (“Mrs. Poirier”) and to certain funds allegedly misappropriated from her bank account by her son, the late Paul Poirier, who died by suicide in 2021. Mrs. Poirier currently resides in a nursing home, is 106 years of age and suffers from advanced dementia. The applicant Lyse Scharfe is her daughter and is currently her Power of Attorney for property and personal care. Paul Poirier’s estate, the respondent in this proceeding, is represented by Paul’s widow Lynda Lortie, who, together with their daughter Jenny, are the current registered owners of the property. Mrs. Poirier also has a daughter Denise Champagne, who supports her sister Lyse Scharfe in this application.
[2] The applicant and her sister (Lyse and Denise) allege that their late brother Paul, at a time in 2016 when he was residing with and caring for their mother (and was her Power of Attorney for property and personal care) had his mother convey her joint interest in the family home to himself alone and also subsequently wrongfully took certain funds from her bank account. These events occurred when Mrs. Poirier was 98 years of age, suffering from significant dementia and allegedly no longer capable of consenting to this conveyance. The applicant seeks an order declaring that the property is held in a constructive or resulting trust for the applicant Mrs. Poirier and an order transferring the property back to her or her representative and an order requiring Paul’s estate to re-pay a sum of cash Paul allegedly removed from her bank account, in the net amount of $32,000.
The Issue
[3] The principal issue in this application is whether the applicant Yvette Poirier had the capacity to transfer her interest in the property in May of 2016 to her son Paul and, if so, was the conveyance the result of undue influence on the part of Paul. This 2016 conveyance transferred title to the property from the joint ownership of Paul and his mother to Paul’s name alone. A prior conveyance in 2009 resulted in the property being transferred from Mrs. Poirier’s name alone to the joint ownership of herself and Paul. The applicant contends both transactions were in furtherance of a scheme on Paul’s part to secure ownership of the property for himself. It is not disputed the property was Mrs. Poirier’s principal asset.
Facts and Analysis
[4] The property in issue was the family home of Mrs. Poirier and her children, Lyse, Denise and Paul. Mrs. Poirier’s husband Julian (whom she married in 1947), was diagnosed with multiple sclerosis at the age of 33. As a result of his deteriorating condition, he was admitted to St. Vincent Hospital in Ottawa in 1972, where he resided until his death in 1993. Mrs. Poirier supported her family for many years (until age 70), as a cleaning lady. Paul lived with his mother in the family home and looked after her and maintained the property until 2019 (three years after the challenged conveyance), when his mother took a serious fall, fracturing her hip, and shortly after moved into a nursing home on a permanent basis.
[5] Paul was appointed his mother’s Power of Attorney for property and personal care on July 21, 2010. It appears to be acknowledged by Lyse and Denise that their brother devoted himself to looking after their mother during the many years she resided in the property, and, as well, he maintained the property. The sisters had each moved away from home, but Paul continued to live there with their mother. Remarkably, Paul married the respondent Linda Lortie in August of 2014 but continued to live with his mother from at least 2001 until Mrs. Poirier moved into the nursing home in 2019. Only then (in 2019) did Paul’s wife move into the property with him. Prior to Paul’s death by suicide in 2021, he transferred the property to his wife Linda.
[6] As noted, in 2016 Mrs. Poirier, then 98 years of age and suffering from significant dementia at least since 2012, resided with her son Paul in the property (the former family home). Paul was her Power of Attorney for property and personal care and he looked after her and she was heavily dependent on him. The evidence suggests Paul was devoted to his mother and she was devoted to him. Moreover, Paul’s two sisters, Lyse and Denise had moved away from home and were content and indeed appreciative of the care Paul was rendering to their mother. However, Lyse and Denise, knowing the property was the only substantial asset of their mother’s estate, were concerned that once their mother had passed and the house was sold, they should share in some way in the proceeds of the sale. Paul believed, in all the circumstances, that the house should go to him.
[7] These concerns led to discussions between the 3 siblings about Paul’s continuing care of their mother in the family home and the ultimate disposition of the family home. The 3 siblings ultimately reached an arrangement or agreement. Mrs. Poirier may or may not have understood or agreed to the arrangement (a key issue in this proceeding).
[8] In furtherance of an agreement reached by the 3 siblings, Mrs. Poirier was brought by her children (Paul, Lyse and Denise) to the office of a solicitor, Mr. Dagenais, on May 6, 2016, at which time she signed a conveyance of the property from herself and Paul as joint tenants, to Paul alone. Importantly, all 3 children and Mrs. Poirier attended together in the lawyer’s office on this occasion. Lyse and Denise admit they agreed to or at least acquiesced in this conveyance. In return, the arrangement between the 3 siblings was that Lyse and Denise were to be permitted to remove $50,000 each from Mrs. Poirier’s bank account and they were to receive $10,000 each from Paul personally. With Paul’s concurrence and co-operation, Lyse and Denise did withdraw $50,000 each from their mother’s bank account shortly after the conveyance was made. This was intended as compensation to Lyse and Denise for waiving any claim they had to the property. Again, a key issue is whether or to what extent their mother understood or agreed to any of this. The solicitor, Mr. Dagenais, who had been retained by Paul to prepare the conveyance, was not aware of the specific agreement between the siblings and he did not discuss or attempt to explain the arrangement to Mrs. Poirier. He simply spoke to Ms. Poirier and satisfied himself that she wished to sign the conveyance her three children had agreed on. He did not recommend to Mrs. Poirier or to her children that their mother receive independent legal advice or that she obtain a capacity assessment.
[9] It can be seen that Paul, Lyse and Denise, through this conveyance and the cash withdrawals from their mother’s bank account, in effect distributed among themselves most of the assets owned by their mother. It was agreed among the siblings that Paul would continue to live in the property with his mother and assist with her needs and all 3 siblings would co-operate in looking out for their mother’s welfare and future requirements.
[10] As matters transpired, three years later (in 2019), Mrs. Poirier had a serious fall in her home and fractured her hip and then moved permanently into a retirement home, where she continues to reside. Paul’s wife Lynda Lortie then moved into the property with Paul (where she continues to reside).
[11] At a later date, Lyse and Denise discovered that Paul had secretly been removing funds from his mother’s bank account and when discovered, Paul acknowledged his actions and began to repay these amounts (with $32,000 still owing at the time of his death.) Paul took his own life in 2021.
[12] It is the evidence of Lyse and Denise that Mrs. Poirier’s present care needs exceed her remaining resources and they are currently each making substantial payments on a monthly basis from their personal resources to fund their mother’s needs. Lyse and Denise say their reason for pursuing this application to restore the property to their mother is so it can be sold and the proceeds made available to fund their mother’s ongoing care needs. It is unclear whether the payments they are making on their mother’s behalf have or will exceed the amount they appropriated from their mother in the May 2016 transaction.
[13] The applicant and her sister (Lyse and Denise) take the position in this application that their mother, Mrs. Poirier, was incapable and could not have consented to conveying the property to Paul in May 2016. Remarkably, this proposition is advanced in the face of their admission that they co-operated with their brother in having their mother attend before a solicitor to sign the conveyance they are now challenging.
[14] The sisters argue, in the alternative, that even if Mrs. Poirier was capable of understanding and agreeing to the May 2016 conveyance, she did so as a result of undue influence exerted by her son Paul who was at the time her caregiver and Power of Attorney for her care and property and while he was acting in breach of his fiduciary obligations to his mother. As noted, this is asserted notwithstanding they (the sisters) co-operated with their brother to encourage their mother to execute this conveyance.
[15] For their part, the respondents deny that Mrs. Poirier was incapable of making the May 2016 conveyance of her interest in the property to her son and contend she agreed to do so in the exercise of her personal judgement, with the concurrence and encouragement of all three of her children. Further, the respondent says that in the circumstances Paul was not in breach of his fiduciary obligations to his mother. They point out that Mrs. Poirier signed the conveyance herself—it was not signed on her behalf by Paul as her Attorney for property. The respondent says Mrs. Poirier had every reason to wish to favour her son with regard to her house she shared with him over the many years he cared for her. It is also argued that the involvement of solicitor Dagenais, who prepared the conveyance, ensured fairness to Ms. Poirier.
Mrs. Poirier’s Capacity in May 2016
[16] The court is required in the circumstances of this case to determine whether in May 2016 Mrs. Poirier had the capacity to convey her property to her son Paul. The court accepts the submission that if Mrs. Poirier had the requisite capacity and was not unduly influenced in doing so, it would have been her prerogative to deal with her property in the manner she chose, even if she was placing herself at risk of having inadequate financial resources to fund her future personal and medical needs.
[17] The applicant obtained an expert opinion in the form of a “retrospective capacity assessment” of Mrs. Poirier from Dr. Joel Sadavoy, a specialist in geriatric psychiatry and Professor of Psychiatry in the Faculty of Medicine at the University of Toronto. This careful and thorough report concluded that by May of 2016, Mrs. Poirier, due to significant dementia, “did not have sufficient mental capacity to make competently reasoned decisions to transfer her home to Paul in that she would have been unable to appreciate the reasonably foreseeable consequences of the decision”. Based on the clinical information available, Dr. Sadavoy was of the opinion Mrs. Poirier “did not have the ability to reflect on her own circumstances, understand her own needs and therefore comprehend and appreciate the potential life consequences and financial impact of making this decision. She would not have been able to understand her own deficits, need for personal support and therefore her requirements for resources to sustain her under the circumstances”. In addition, he noted Mrs. Poirier’s reasoning and judgement were impaired by the presence of paranoid delusional thinking typical of persons suffering from significant dementia.
[18] The respondent obtained a retrospective capacity assessment from a licensed capacity assessor, Dr. Alina Kaminska, a psychologist, who concluded that in 2016 Ms. Poirier was capable of managing her property when she transferred title from joint ownership between herself and Paul, to sole ownership by Paul. She opined Ms. Poirier was capable because she found there to be no compelling evidence of mental or cognitive limitations on the basis of which the presumption of her capacity and her ability to understand and appreciate could be overridden when she transferred the home. She observed that, on her assessment of the medical records and other available evidence, during the years leading to 2016, Ms. Poirier’s cognitive status was likely comparable to her status in 2009 which was when she transferred her property from her sole ownership to joint ownership with her son and was, on the balance of probabilities, mentally capable of choosing to carry out that transaction. Dr. Kaminska concluded, “a presumption of Ms. Poirier’s capacity for the particular decision to transfer the home from joint ownership to her son’s sole ownership cannot be refuted, as compelling evidence to the contrary is unavailable.”
[19] Dr. Kaminska, in the course of explaining why her conclusion as to Ms. Poirier’s capacity to transfer the property differed from that of Dr. Sadavoy, commented: “my impression is that in assessing Ms. Poirier’s decisional capacity in 2016 concerning the property transfer, Dr. Sadavoy used in his analysis the approach in which mental capacity is seen as linked to broad-based cognitive ability, with psychometric test results providing information about the level of abilities incompatible with mental capacity to make decisions. It appears that by the generalization process, rather than decision specific analysis, Dr. Sadavoy found Ms. Poirier incapable in 2016 when she transferred the property. This approach to assessing decisional capacity is not compatible with the guidelines”. She refers to guidelines issued to licensed capacity assessors.
[20] Notably, in 2009, some seven years prior to the property transfer in issue, Paul took Ms. Poirier to a solicitor, Mr. McNeely, in order for the property to be transferred from Ms. Poirier’s name alone, to the joint ownership of Paul and his mother and to make certain changes to Mrs. Poirier’s will to provide Paul with a larger share of her estate. Mr. McNeely, an experienced solicitor and estate lawyer, interviewed Mrs. Poirier but declined to act in the absence of a capacity assessment due, he explained, both to his primary concern that undue influence from Paul may be a factor in the proposed conveyance and will revisions, as well as possible cognitive or mental impairment on Mrs. Poirier’s part. Paul declined the recommendation of independent legal advice and a capacity assessment for his mother and terminated Mr. McNeely’s services. On the other hand, Mr. McNeely explained that Ms. Poirier was able to explain to him why she wanted the changes, which was essentially to avoid “a wrestling match for the property between Paul and his sisters, who already had properties of their own”. Shortly after Paul terminated Mr. McNeely’s services in 2009, he brought his mother to another solicitor, Mr. Dagenais, who went ahead and prepared the conveyance and a new will for Mrs. Poirier, both of which she signed. There was no independent legal advice provided to Ms. Poirier, nor was there a capacity assessment recommended.
[21] The 2009 will prepared by solicitor Dagenais, remains Mrs. Poirier’s last will. It provides that on Mrs. Poirier’s death, Paul may continue to occupy the property as long as he wishes, after which it would be sold with the proceeds being divided 50% to Paul and 25% to each of his sisters. It should be noted that the subsequent 2016 conveyance of the property from the joint ownership of Paul and his mother, to Paul alone, created a situation where the property disposition in her 2009 will can not be implemented as she conveyed away her entire ownership interest in the property.
[22] The respondent’s factum contains this submission, which I accept as an accurate statement of the law:
“For a court to find that a person lacked capacity for the purposes of managing property, the court must find that: (i) the person did not understand the relevant information in respect of the management of the property; and (ii) the person was not able to appreciate the reasonably foreseeable consequences of their decision or lack of decision. The test is an exacting one and, as discussed above, incapacity should only be found on the basis of clear and compelling evidence in respect of a specific domain of decision-making. Findings of incapacity should thus be made sparingly."
[23] As the court understands Dr. Kaminska’s opinion, as relied on by the respondent, it is not that Mrs. Poirier did not have significant dementia in 2016. Rather, it is that in the specific domain of decision making, being her decision to transfer her property (to her son), there was no compelling evidence to rebut the presumption of capacity. That is, no compelling evidence of an incapacity to understand the concept that she was parting irrevocably with her principal asset and that there were risks to her of no longer having adequate funds to care for herself.
[24] A reality however, especially with retrospective capacity assessments, is that inferential conclusions often need to be drawn from the level of incapacity exhibited by the individual at the time of the transaction, as disclosed by the available medical records, testing and other relevant evidence. The analysis and opinion of a medical specialist, particularly an experienced geriatric psychiatrist such as Dr. Sadavoy, is of significant assistance to the court.
[25] Dr. Sadavoy’s report persuasively describes the factors which support his opinion that Mrs. Poirier’s dementia, first diagnosed in 2006, had advanced by 2012, and clearly by 2016 to a level of severe dementia. He observed, “this disease is incurable, irreversible, and inevitably progresses to increasingly severe levels of cognitive impairment”. He pointed to medical records of a geriatric psychiatrist Dr. Carriere in 2011 confirming Mrs. Poirier had been first diagnosed with dementia in 2006. In 2010, Ms. Poirier’s family doctor initiated treatment for dementia with appropriate medications and arranged for further psychiatric assessment. In 2010, clinical reports and formal cognitive testing confirmed she was suffering from significant dementia symptoms at that time. Dr. Sadavoy pointed out that clinical testing of Mrs. Poirier confirmed a declining capacity reaching the moderately severe range in 2012 at which time she had “significantly impaired mental function”. Dr. Sadavoy was of the opinion that the clinical testing supported the observations of her family members and her medical caregivers as to her significant cognitive limitations.
[26] Dr. Sadavoy’s analysis paid close attention to the evidence provided by Lyse and Denise and a number of physicians, as to Mrs. Poirier’s behaviours and evident cognitive limitations. I do not agree with Dr. Kaminska’s suggestion that Dr. Sadavoy was basing his opinion of Mrs. Poirier’s capacity in 2016 simply on general inferences drawn from the fact that she had been diagnosed with dementia. Dr. Kaminska also offered criticism of the clinical test scoring and interpretation carried out by certain of Ms. Poirier’s treating physicians, particularly the declining test scores that suggested continued deterioration in her cognition after 2012. Dr. Kaminska is not a physician nor is she a geriatric specialist recognized as such by her own regulatory body (the College of Psychologists). No evidence was offered to establish her expertise to opine on the interpretations of the clinical testing or of the effect of psychiatric medications prescribed to Mrs. Poirier. The court further has concerns about aspects of Dr. Kaminska’s interviews with Ms. Poirier including that these were carried out in English, through a translator (Mrs. Poirier has hearing issues and normally converses in French). Further, Mrs. Poirier was questioned by Dr. Kaminska on the premise that her son Paul was still alive and was occupying the property, an approach counsel had unfortunately insisted on so as not to risk upsetting Mrs. Poirier. Further no interviews about their mother’s functioning were held with either Lyse or Denise.
[27] The court concludes that in instances where Dr. Sadavoy’s clinical opinions and analysis or those of Dr. Carriere (both geriatric psychiatrists) differ from that of Dr. Kaminska, the court prefers the opinions offered by Drs. Sadavoy and Carriere. In particular, the court accepts Dr. Sadavoy’s opinion that in 2016 Ms. Poirier lacked the capacity to convey her interest in the property.
[28] In the result, the 2016 property conveyance executed by Mrs. Poirier must be set aside and the property re-vested to the joint title of Paul Poirier (now his estate) and Mrs. Poirier as joint tenants. This may have significant implications for Mrs. Poirier’s estate however those are inchoate issues as long as she lives.
[29] Given the court’s conclusion as to Mrs. Poirier’s lack of capacity to execute the May 2016 conveyance it is not strictly necessary to rule on the applicant’s allegation of undue influence on Paul’s part in relation to that transaction. However, even in the absence of the finding of incapacity, it is manifestly clear that the presumption of undue influence applies. In 2016 and from at least 2012, Paul lived with his mother in her home and looked after her and handled her banking. She was in her late nineties with advancing dementia throughout this period. Mrs. Poirier was entirely dependant on Paul. Paul entertained the belief that the house should be his once his mother no longer resided there. To that end he encouraged and organized his mother’s attempts to grant him a larger interest and ultimately a complete ownership of the property, in both 2009 and 2016. There is no evidence to rebut the presumption of undue influence that surrounds the 2016 conveyance of the property.
[30] Contrary to the respondent’s submission, the involvement of a solicitor, Mr. Dagenais, in having Mrs. Poirier execute the 2016 conveyance of the property to Paul, does not answer the undue influence or capacity concerns that arise in this case. Mr. Dagenais confirmed in his evidence that he was acting for Paul at the time of the May 16, 2016 office attendance of Mrs. Poirier (accompanied by Paul, Lyse and Denise). Mr. Dagenais did not insist on Mrs. Poirier obtaining independent legal advice and there was no discussion of obtaining a capacity assessment, even though he was aware Mrs. Poirier was 98 years of age and was conveying away her home to her son who lived with and looked after his mother. He was unaware she had dementia although her children were fully aware. He knew the conveyance was connected with some arrangement between Mrs. Poirier’s three children but declined to inquire into that and therefore did not learn Mrs. Poirier was being stripped of most of her property. He must have remembered his involvement in the 2009 will he drew for Mrs. Poirier and the conveyance at that time of the property from Mrs. Poirier’s name alone to joint title with Paul. In short, this solicitor did not meet his professional obligations to a very compromised elderly former client. It was his obligation to decline to act in this transaction in the absence of independent legal advice for Mrs. Poirier, and preferably a capacity assessment.
[31] In the circumstances described above, the 2016 conveyance must be set aside on the basis of lack of capacity and undue influence and Mrs. Poirier’s pre-2016 interest in her property must be restored to her.
[32] The applicant seeks an order re-conveying the property back to Mrs. Poirier in circumstances where, as noted previously, the property was in the joint ownership of Mrs. Poirier and her son Paul, prior to the 2016 conveyance. The court will require further submissions as to the terms of the required order in view of Paul’s passing and conveyances of the property Paul made prior to his death. Counsel are to schedule a case conference before me to review this issue and to settle the terms of an appropriate order. Costs submissions will await disposition of these issues.
[33] Lastly, after an order of this court authorizing the registration of a Certificate of Pending Litigation (CPL) against the property and shortly before the hearing herein and without notice to the court or to opposite counsel, the respondents’ counsel, Mr. Switzer, registered a mortgage on the property in the amount of $1.0 million, apparently as collateral security for his legal fees. The registration of this mortgage is to be removed from the property forthwith, without prejudice to counsel seeking a charging order if and when appropriate.
Justice Charles T. Hackland
Date: January 24, 2025
Cited Legislation
Cited Case Law
None cited in the text.