The decision in Sanchez v. Sanchez-Guevara, 2025 ONSC 7077, provides a clear illustration of the risks faced by an attorney for property who fails to adequately account for their dealings.
The Facts
An elderly father, following a motor vehicle accident, suffered cognitive and physical injuries and received significant funds from two sources: a statutory accident benefits settlement of approximately $309,534 and a personal injury settlement of $200,000.
His son was appointed as Attorney for Property under a continuing Power of Attorney for Property which was executed in April of 2021.
Within a short period:
- One account decreased from approximately $273,000 in July of 2021 to $0.84 by October of 2021;
- A second account was depleted following a $10,000 withdrawal; and
- The available bank records reflected a pattern of cash withdrawals, transfers, and personal expenditures, with no explanation provided.
The father attempted to revoke the Power of Attorney, and the Public Guardian and Trustee was later appointed as Guardian of Property.
The son did not provide any accounting for the transactions and failed to meaningfully participate in the proceeding. The Public Guardian and Trustee, acting as litigation guardian, commenced an application to recover the funds.
Fiduciary Duties
The Court reaffirmed the statutory duties under the Substitute Decisions Act, 1992.
In particular:
- Duty of honesty and good faith – section 32(1);
- Duty to account – section 32(6); and
- Duty to act in the incapable person’s best interests – Ontario (Public Guardian & Trustee) v. Harkins, 2011 CarswellOnt 7097, at paragraph 19.
These duties are applied strictly. A failure to maintain proper accounts engages both statutory and equitable remedies and consequences, such as liability for unjust enrichment.
Breach and Evidentiary Consequences
The Court found that the Attorney was liable to the grantor for:
- Misappropriation of funds;
- Breach of fiduciary duty; and
- Unjust enrichment.
A central feature of the decision is the Court’s reliance on an adverse inference. The Attorney’s failure to respond left the evidence uncontested, supporting an inference that the withdrawals were made for his own benefit.
Remedies
The Court ordered that the Attorney:
- Repay $281,431.45;
- Pass Accounts for his time as Attorney for Property; and
- Pay the grantor’s legal costs on a substantial indemnity basis.
Conclusion
Sanchez v. Sanchez-Guevara reinforces that the role of an attorney for property involves strictly enforced duties. Where an attorney will not account for their dealings, the court will not hesitate to impose personal liability for the resulting loss.
The decision also underscores a broader point: the duty to account is not merely procedural, but central to the fiduciary relationship. A failure to maintain records, respond to concerns, or participate in proceedings may itself result in personal liability.
Key Takeaways
- Accounting is fundamental.
- Fiduciaries must be able to explain all transactions as being for the incapable person’s benefit.
- A failure to respond to allegations may result in adverse inferences and liability on an uncontested record.
- Restitution is an available remedy.
- Family relationships do not result in a reduced standard for fiduciaries.
For practitioners, the case serves as a reminder that an attorney for property must understand their obligations and the consequences for failing to meet them.