A decision released earlier this week highlights the importance of a complete Management Plan supported by evidence when seeking one’s appointment as guardian of property.
Sometimes, the necessity of filing a Management Plan is viewed as a formality without proper attention to the details of the plan. However, the failure to file an appropriate Management Plan may prevent the appointment of a guardian of property, putting the administration of the incapable’s property in limbo.
In Connolly v Connolly and PGT, 2018 ONSC 5880 (CanLII), Justice Corthorn declined to approve of a Management Plan filed by the applicant and, accordingly, refused to appoint her as guardian of property. The Management Plan was rejected for the following reasons (among others):
- it did not address an anticipated increase in expenses over time (including when the applicant was no longer available to serve as the incapable’s caregiver and he may incur alternate housing costs);
- there was no first-hand evidence from BMO Nesbitt Burns or Henderson Structured Settlement with respect to the net settlement funds in excess of $1.4M and their payout and investment in a portfolio on the incapable’s behalf;
- the Court was concerned that stock market volatility could threaten to deplete the invested assets;
- the Public Guardian and Trustee had strongly recommended that the applicant post security, the expense of which was reflected as a deduction from the incapable’s assets (while not suggested that this was unreasonable, Justice Corthorn took issue with the absence of any case law or statutory provision cited by the applicant in support of the payment of the expense by the incapable rather than the applicant herself); and
- while the applicant had agreed to act as guardian without compensation, the plan did not contemplate how compensation would be funded if claimed by a potential successor guardian.
Notwithstanding that neither the incapable nor the Public Guardian and Trustee had opposed the Management Plan or the appointment of the applicant as guardian of property, Justice Corthorn found that the appointment of a guardian to manage over one million dollars in settlement funds was “contentious” and, accordingly, under Rule 39.01(5) of the Rules of Civil Procedure, direct evidence from a representative of the financial institution was required. In short, although the applicant was accepted as being a suitable candidate for appointment as guardian of property (and it was anticipated by the Court that she would ultimately be appointed), the Court was not satisfied on the evidence available that the management of the incapable’s property in accordance with the contents of the Management Plan was consistent with the man’s best interests.
While Justice Corthorn declared the individual respondent incapable and in need of assistance by a guardian of property, Her Honour adjourned the balance of the matter, suggesting that the applicant’s appointment as guardian of property could be revisited once additional evidence was filed in support of the contents of the Management Plan and/or the plan was further revised.
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I recently came across several articles (one of which can be found here) regarding the elder financial abuse of a senior gentleman in Moncton, New Brunswick. Around 2013, Mr. Goguen had been living in the home that he owned, with tenants residing in part of the property. Upon deciding to sell his home, Mr. Goguen was referred to Ms. Hannah and Mr. Poirier, licensed real estate agents in New Brunswick. After the home had been listed for sale for some time, without success, Ms. Hannah apparently told Mr. Goguen that his home was in such deplorable condition that it would be impossible to sell without making certain repairs (which Ms. Hannah says Mr. Goguen could not afford) and removing the tenants (whom Ms. Hannah has claimed were using drugs and not paying rent).
As a result of the alleged difficulty in selling Mr. Goguen’s house, he, Ms. Hannah, and Mr. Poirier entered into an agreement whereby Ms. Hannah and Mr. Poirier purchased Mr. Goguen’s home. The terms of the arrangement were not favourable to Mr. Goguen, and it appears that Ms. Hannah and Mr. Poirier did not follow through on certain aspects of the agreement.
The Financial and Consumer Services Commission, which regulates real estate agents in New Brunswick, has revoked Ms. Hannah and Mr. Poirier’s real estate licenses. The Commission stated that Ms. Hannah and Mr. Poirier committed financial abuse of a senior and took “outrageous and egregious advantage” of Mr. Goguen. The Public Trustee of New Brunswick has now become involved on Mr. Goguen’s behalf, and has filed a statement of claim against Ms. Hannah and Mr. Poirier, seeking $83,320.00, characterized as the amount owing to Mr. Goguen.
We’ve blogged about elder abuse a number of times. Unfortunately, due to factors such as isolation, physical difficulties, and cognitive impairments, elderly people are often vulnerable to abuse. Given this vulnerability, and the circumstances in which abuse occurs, it can go undetected for a significant amount of time. In such situations, it may be too late to make the elderly person “whole” if the abuse is not discovered until it is too late.
Fortunately in Mr. Goguen’s case, despite the fact that it took a number of years, the Public Trustee discovered the abuse and is now taking steps to protect Mr. Goguen and recoup funds owed to him by his abusers. However, the Public Trustee is seeking the amount of approximately $83,000.00, which may not fully reimburse Mr. Goguen for the value of the house had it been sold to a normal third-party purchaser. Additionally, one of the articles also notes that Mr. Goguen had named Ms. Hannah and Mr. Poirier as his attorneys, and also executed a will naming them as executors and beneficiaries of his estate. It is unclear whether the Public Trustee has sought any relief in this regard. As such, even though the Public Trustee may be pursuing relief on Mr. Goguen’s behalf, it is an unfortunate possibility that he may continue to feel the effects of the abuse.
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You are the Estate Trustee of an estate in which the testator left a substantial portion of the residue to certain specifically named charities. The charities who are named as beneficiaries are well established large charitable organizations whom you have corresponded with directly. Such charities have retained counsel to represent them concerning their interests in the estate, and such counsel have in turn requested that you commence an Application to Pass Accounts regarding your administration of the estate.
In preparing the Application to Pass Accounts you turn your mind to who you should serve with the Application. Rule 74.18(3) of the Rules of Civil Procedure provides that an Application to Pass Accounts shall be served on “each person who has a contingent or vested interest in the estate“.
Although you are aware of the general supervisory role that the Office of the Public Guardian and Trustee (the “PGT”) has over charities in the Province of Ontario, as the charities in this instance are well established and represented by counsel, you question whether you need to serve the PGT in addition to the charities with the Application to Pass Accounts. It is, after all, the charities themselves who have a “contingent or vested interest in the estate“, and as the PGT and the charities would be representing the same financial interest you question whether it is necessary.
The requirement to serve the PGT with any Application to Pass Accounts where a charitable bequest is involved is established by section 49(8) of the Estates Act, which provides:
“Where by the terms of a will or other instrument in writing under which such an executor, administrator or trustee acts, real or personal property or any right or interest therein, or proceeds therefrom have heretofore been given, or are hereafter to be vested in any person, executor, administrator or trustee for any religious, educational, charitable or other purpose, or are to be applied by them to or for any such purpose, notice of taking the accounts shall be served upon the Public Guardian and Trustee.” [emphasis added]
The requirement to serve the PGT with any Application to Pass Accounts when a charitable bequest is involved as established by section 49(8) of the Estates Act exists in addition to the general requirement to serve all individuals with a “contingent or vested interest” as established by rule 74.18(3). To this respect, when a Will leaves a bequest to a specifically named charity, the Application to Pass Accounts must be served upon the specifically named charity as well as the PGT. Although from a practical standpoint the PGT’s active participation in an Application to Pass Accounts where a charity is representing itself is unlikely, with the PGT deferring to the charity to protect their own interest, the service requirements remain nonetheless, and both entities could in theory participate in the Application to Pass Accounts, and both could in theory file separate Notices of Objection to Accounts.
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The applicability of limitation periods to estates, trusts, and capacity matters is crucial for litigators to consider. In a recent decision of the Superior Court of Justice, the Court was asked to consider the application of the limitation period in Part V of the Succession Law Reform Act (“SLRA”) to a claim that was advanced by the Public Guardian and Trustee (the “PGT”) as the litigation guardian of an incapable support claimant.
Shaw v. Barber, 2017 ONSC 2155, is an important precedent for the proposition that limitation periods do not run against the incapable person from the day that the PGT becomes his/her statutory guardian of property. By operation of section 16(5) of the Substitute Decisions Act, 1992, the PGT automatically becomes an incapable person’s statutory guardian of property the moment they receive a certificate of incapacity from the assessor. In Shaw v. Barber, the dependant support claimant, Lois Shaw, was assessed and found to be incapable of managing property on February 16, 2015 and a copy of the certificate was sent to the PGT on or about February 25, 2015.
Prior to the assessment, Ms. Shaw lived with Frank Cyril Barber on the date of his death, although they were not married. Mr. Barber died in August, 2014, leaving a Will which named his son as the sole Estate Trustee and beneficiary of his Estate. A Certificate of Appointment of Estate Trustee with a Will was issued to Mr. Barber’s son on February 5, 2015. Pursuant to section 61(1) of the SLRA, an application for dependant support may not be made six months after the grant of probate, subject to the Court’s discretion in section 61(2) to allow claims against the undistributed portion of an estate. Without considering the Court’s discretion in section 61(2) of the Act, Justice McNamara found that Ms. Shaw’s claim for dependant support was not statute barred despite the fact that it was issued, one year after six months from probate, on August 5, 2016.
In his reasoning, Justice McNamara considered the tolling provision applicable to incapable persons while he/she is not represented by a litigation guardian in section 7 of the Limitations Act, 2002 (which applies to the section 61 of the SLRA). The turning point then becomes whether a guardian of property is automatically a litigation guardian in relation to the claim at issue since a guardian has the power to do anything the incapable person may do except make a will. In this case, there was an affidavit from PGT counsel which explained the time consuming investigations involved when the PGT becomes a statutory guardian of property because of the lack of first-hand information from the incapable individual. Justice McNamara determined that a guardian of property shall act as litigation guardian when he/she has determined that there is a basis for exercising their authority in that role, and that imposing a limitation period from the date in which the PGT becomes statutory guardian is contrary to the Limitations Act and it would create impossible timelines and potential injustice for this vulnerable group. Furthermore, Justice McNamara was also persuaded by the fact that the Estate Trustee in this case will not be prejudiced by the delay, given that he is also the sole beneficiary, and that he was aware all along that the PGT was considering a claim against the Estate.
This case is also an example of the latitude that Courts may accord to large-scale claimants as seen in 407 ETR Concession Company Limited v. Day, 2016 ONCA 709.
Please do not hesitate to contact our firm for a copy of Justice McNamara’s reasons in Shaw v. Barber and click here for comments from Russel Molot, counsel for the PGT in this matter, as reported in the Law Times.
This week on Hull on Estates, David Smith and Lisa Haseley discuss a recent decision of the British Columbia Supreme Court, Rosinski v British Columbia (Public Guardian and Trustee), 2016 BCSC 1204
Click here for more information on Lisa Haseley.