In the case of Reinboldt v Cameron, the Applicant, Ms. Reinboldt, was seeking an order that her brother, Mr. Cameron, formally pass his accounts as Attorney for Property of Mrs. Cameron, the parties’ mother. Mr. Cameron acted as Mrs. Cameron’s Attorney for Property from March 16, 2017, until Mrs. Cameron’s death on May 27, 2018.
The parties had undergone previous unrelated litigation. In the settlement of that litigation, certain property owned by Mrs. Cameron was transferred to Mr. Cameron in exchange for a mortgage placed on the property with Mrs. Cameron as the mortgagee. Mr. Cameron was required to pay Mrs. Cameron $1,500 per month until her death.
Ms. Reinboldt was requesting a formal passing of accounts because she claimed Mr. Cameron provided inadequate accounting for his time as attorney for property. Of particular concern to her were alleged missing mortgage payments. She said that a formal passing of accounts was necessary so that all the information would be in an easy, succinct, digestible and potentially challengeable format.
Mr. Cameron claimed that he had produced significant disclosure such that he’d already provided an informal accounting. Further, he stated that he had actually overpaid the mortgage and had provided a chart showing the mortgage payments and a copy of the cheques to Ms. Reinboldt. Lastly, Mr. Cameron claimed that Ms. Reinboldt was not alleging any deficiencies in the informal accounting or specifying which mortgage payments had been missed in her motion for directions.
Section 42(1) of the Substitute Decisions Act deals with the court’s authority to order that an attorney for property pass their accounts. The Court of Appeal addressed this authority in Dzelme v Dzelme where they found that s. 42(1) was permissive, stating that it was at the court’s discretion to decide whether to order an attorney for property to pass their accounts. The court in Dzelme said it ought to consider two factors when exercising that discretion:
- “the extent of the attorney’s involvement in the grantor’s financial affairs; and
- whether the applicant has raised a significant concern in respect of the management of the grantor’s affairs to warrant an accounting”.
The judge in this case stated that if allegations of misfeasance or wrongdoing are ill defined, the court can dismiss the application requiring an attorney to pass their accounts. She cited Lewis v Lewis, a decision from the Ontario Court of Appeal, where the court upheld the application judge’s decision to dismiss the application requiring the attorney to pass their accounts as the applicants had not provided enough evidence to show direct allegations of misfeasance or wrongdoing.
In this case, the judge found that Mr. Cameron only acted as Mrs. Cameron’s attorney for a short period of time and that he only made decisions based on her direct instructions as she did not lose capacity prior to passing away.
Regarding the second factor, the judge found that Ms. Reinboldt did not show concerns she had related to transactions undertaken by Mr. Cameron and did not specify which mortgage payments she was questioning. Conversely, Mr. Cameron provided hundreds of pages of robust financial disclosure including a letter from his accountant saying there was no further financial disclosure he could provide.
The judge found that the record did not contain enough evidence to suggest direct allegations of misfeasance, wrongdoing or inadequate accounting to warrant a formal accounting, and that her desire to have a formal accounting so that everything would be in an easy, succinct, digestible and potentially challengeable format was not a reason for the court to order a formal accounting.
This case is a good example of the benefits of ongoing disclosure, the need to be specific with allegations in application or motion records, and an indication of how much disclosure an individual may be reasonably entitled to.
Thanks for reading!
Darien Murray