Fiduciaries are held to the highest standard – as noted in the 9th edition of Oosterhoff on Trusts, they must “act honestly and in good faith and use their powers properly and only for the purposes for which they were granted.” They must also abide by the “no conflict rule,” meaning that fiduciaries are required to avoid any situation where their personal interests may clash with the interests of a beneficiary.
The Ontario Superior Court of Justice recently applied this principle in the context of substitute decision-makers in BMO Trust Company v Aubin, 2025 ONSC 2298, confirming that the appointment of a substitute decision-maker ought to be terminated if the donee’s personal interests conflict with the interests of the donor.
The Story of Ms. Roper
This case centres on Ms. Roper, an 82-year-old widow who was vulnerable to financial abuse. In 2018, she was diagnosed with multiple myeloma. Then in July of 2020, Ms. Roper was hospitalized under the Mental Health Act after exhibiting paranoia and delusions, reporting to her oncologist that she had been “attacked in the night by a strange man with a chloroform rag.” During her hospitalization, Ms. Roper was diagnosed with a neurocognitive disorder, and a cognitive assessment confirmed that she had a mild impairment.
Following Ms. Roper’s release from hospital in August of 2020, she began receiving care services from Seniors Total Care Inc. (“STC Inc.”) and Ms. Aubin, a business development manager at STC Inc. whose common-law partner happened to be the sole director and shareholder of the company. Approximately six months later, Ms. Roper entered a service agreement with STC Inc. for companion, driver and overnight services. Ms. Aubin signed the agreement as the company’s representative.
Then, in August of 2021, Ms. Roper executed powers of attorney (“POAs”) which named Ms. Aubin as her attorney, even though Ms. Roper had executed POAs for property and personal care appointing her lawyer less than a year earlier. The 2021 POA documents, however, were not prepared by a lawyer – Ms. Aubin downloaded them from the Internet, and helped Ms. Roper complete them. The documents were witnessed by Ms. Aubin’s parents.
Red Flags and Financial Concerns
Concerns of financial impropriety subsequently arose. In 2022, an employee with STC Inc. accused Ms. Aubin of “robbing Ms. Roper blind.” Ms. Roper’s lawyer also discovered financial irregularities in Ms. Roper’s banking statements, including a $24,000 withdrawal. When he questioned her about it, Ms. Roper brushed him off, stating: “It’s my money, I can do what I want with it.”
The Public Guardian and Trustee (the “PGT”) was also drawn into the matter after being cc’d on an email which warned Ms. Roper’s lawyer that his client was at “imminent risk of financial abuse.” After the PGT got involved, the court appointed the BMO Trust Company as Ms. Roper’s guardian of property; BMO then brought an application challenging the validity of both the 2021 POA for personal care and the STC Inc. service agreement.
The Court’s Findings
Justice Mew found that the 2021 POA for personal care in favour of Ms. Aubin was invalid on the following grounds:
- Conflict of Interest: Subsection 46(3) of the Substitute Decisions Act, 1992 (the “SDA”) disqualifies anyone from acting as an attorney for personal care if they provide health care for compensation to the grantor. Recognizing that Ms. Aubin’s common-law partner benefited financially from the STC Inc. service agreement, the court found that Ms. Aubin also benefited indirectly. In light of this conflict of interest, Justice Mew held that the 2021 POA appointing Ms. Aubin was void.
- Lack of Capacity: The 2021 POA was also void because Ms. Roper lacked the capacity to execute it, given her documented cognitive impairments and delusions.
- Undue Influence & Suspicious Circumstances: In light of suspicious circumstances that surrounded the 2021 POA and suggested that Ms. Aubin had exerted undue influence on Ms. Roper, the presumption of capacity under section 2 of the SDA was inoperable. As a result, the burden of proof shifted to Ms. Aubin to prove the absence of undue influence; however, she failed to discharge the onus.
The court also struck down the STC Inc. service agreement as unconscionable – the contract was signed in circumstances of unequal bargaining power, lacked transparency, and was tainted by Ms. Roper’s incapacity. However, Justice Mew left the door open for STC Inc. to seek compensation on a quantum meruit basis for actual services rendered.
Takeaways
This case makes it clear that conflicts of interest will not be tolerated in the context of substitute decision-making. JusticeMew affirmed that such fiduciary roles demand strict adherence to the no conflict rule, and that statutory disqualifications under the SDA will be enforced. This case also serves as a warning that improper caregiving arrangements and unconscionable agreements which purport to bind vulnerable individuals will not withstand judicial scrutiny.
Thank you for reading, and enjoy the rest of your day,
Suzana.