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PGT vs. Cherneyko, Part 2: Breaches of Fiduciary Duty in the Time of Covid

Yesterday, I blogged on Public Guardian and Trustee v. Cherneyko et al, 2021 ONSC 107.  Today’s blog will focus on some of the breaches of fiduciary duty that were found by the Court.  For those who have not read yesterday’s blog, this is a case that involves Jean, a 90 year old woman, and Tina, the attorney for property, who was purportedly given a gift of $250,000.00 just days before Jean was hospitalized for acute delirium and progressive cognitive decline.

While the purported gift of $250,000.00 to Tina was found to be invalid, the Court went on to find that Tina was in breach of her fiduciary duty to Jean by accepting the money.  Tina was in breach because she knew that Jean was exhibiting signs of cognitive decline when they went to the bank.  In the Court’s view,

“a person acting in a fiduciary capacity for a person actively demonstrating moments of irrationality should be very cautious about any big financial moves that person claims they want to make in and around such periods of demonstrated incapacity. Even if Jean was clearly acting in a competent manner during the few hours she attended the CIBC with Tina on August 27, 2019, I agree with the submissions of the PGT it is no answer to an accusation of breach of duty to assert that an attorney was simply acting in accordance with the wishes of the grantor of the attorney. Tina should have proceeded with caution at that time. I find she did not exercise the appropriate degree of caution and good judgment given the circumstances about which she knew.” (para 42)

The Court also reiterated Justice Penny’s comments in Ontario (Public Guardian and Trustee) v. Harkins, [2011] O.J. No. 3313,  that a fiduciary’s first duty is to see to the best interest of the person regardless of what their stated wishes may be.  The Court was very critical of how a $250,000.00 gift to Tina could possibly benefit Jean, and expressed disapproval on how there was no evidence of any effort on Tina’s part in considering whether this money would better serve Jean if it was applied towards Jean’s in-home care instead of admitting Jean to a long term care home.

Of relevance to the unique circumstances that surround the care of others during Covid-19, the Court commented that,

“since March 2020 more than at any time in the past, any genuinely concerned person charged with caring for an elderly person in long term care would have at least considered the issue of taking whatever steps could be taken to remove the person from this situation if it was in any way possible.” (para. 47)

Instead, Tina allowed her adult son to move into Jean’s home, and she was found to be actively misusing Jean’s assets for her own and her family’s benefit which were additional breaches of her duties as fiduciary.  The Court also disapproved of how Tina did not take any steps to sell Jean’s house in order to maximize or preserve its value which, reading between the lines, seem to be a concern for the uncertainty in today’s markets.

Thanks for reading!  Stay safe!

Doreen So