Tag: Substitute Decisions Act
Being a Power of Attorney for Property can often be a difficult and thankless job. It is not unforeseeable that, after originally accepting the job, circumstances may arise which leads the Attorney for Property to want to resign. But how do you go about actually resigning as Attorney for Property? Is it enough to simply stop acting as Attorney for Property, or to loudly scream “I quit!” to those that have caused you the frustration, or are additional steps required for the resignation to become effective?
The resignation process for an Attorney for Property is governed by section 11(1) of the Substitute Decisions Act, which provides:
“An attorney under a continuing power of attorney may resign but, if the attorney has acted under the power of attorney, the resignation is not effective until the attorney delivers a copy of the resignation to,
(a) the grantor;
(b) any other attorneys under the power of attorney;
(c) the person named by the power of attorney as a substitute for the attorney who is resigning, if the power of attorney provides for the substitution of another person; and
(d) unless the power of attorney provides otherwise, the grantor’s spouse or partner and the relatives of the grantor who are known to the attorney and reside in Ontario, if,
(i) the attorney is of the opinion that the grantor is incapable of managing property, and
(ii) the power of attorney does not provide for the substitution of another person or the substitute is not able and willing to act.”
As a result of section 11(1) of the Substitute Decisions Act, if an Attorney for Property wishes to resign from their position they must put such resignation in writing, which must then be delivered to the certain individuals, including the grantor, any other Attorneys for Property named in the document, as well as the grantor’s spouse and next-of-kin if the grantor is incapable and the Power of Attorney does not provide for a substitute Attorney for Property or the substitute is not willing or able to act. Once the resignation has been received by all of such individuals, the resignation is effective, and the individual is no longer the grantor’s Attorney for Property.
It should of course be noted that resigning as Attorney for Property would not release the individual of any liability for their historic administration of the grantor’s property. To do so, the resigning Attorney for Property would likely have to commence an Application to Pass Accounts regarding their management of the grantor’s property, or seek a release from the grantor if the grantor was still capable. This, however, is a topic for a further blog on a different day.
Thank you for reading.
When concerns are raised about the conduct of an Attorney for Property, those raising the concerns often seek an Order compelling the Attorney for Property to commence an Application to Pass Accounts pursuant to section 42 of the Substitute Decisions Act. Should such an Application to Pass Accounts be commenced, the objecting party will often make allegations against the Attorney for Property that the incapable person and/or estate has suffered damages as a result of the Attorney for Property’s conduct, often seeking monetary damages against the Attorney for Property in relation to such objections.
An interesting question was recently posed to me in the context of such an Application to Pass Accounts for an Attorney for Property. Can the objecting party pursue damages against the Attorney for Property within the actual Application to Pass Accounts itself, or do they need to commence a separate claim against the Attorney for Property for the recovery of such damages?
The ability to pursue damages against an Estate Trustee within the Application to Pass Accounts process is well established by statute, with section 49(3) of the Estates Act providing:
“The judge, on passing any accounts under this section, has power to inquire into any complaint or claim by any person interested in the taking of the accounts of misconduct, neglect, or default on the part of the executor, administrator or trustee occasioning financial loss to the estate or trust fund, and the judge, on proof of such claim, may order the executor, administrator or trustee, to pay such sum by way of damages or otherwise as the judge considers proper and just to the estate or trust fund, but any order made under this subsection is subject to appeal.” [emphasis added]
Section 49(3) of the Estates Act makes it clear that a separate claim against an Estate Trustee is not necessary to pursue damages for breach of trust when an Application to Pass Accounts has been commenced, and that the Judge may order damages against the Estate Trustee within the actual Application to Pass Accounts itself. Perhaps importantly however, the Estates Act appears to suggest that section 49 only applies to a passing of accounts for an “executor, administrator or trustee under a will“, making no reference to an Attorney for Property. Sections 42(7) and 42(8) of the Substitute Decisions Act also set out the “powers of the court” in an Application to Pass Accounts for an Attorney for Property, with such provisions notably containing no reference to the ability to order damages against the Attorney for Property for any wrongdoing.
As there appears to be no statutory equivalent to section 49(3) of the Estates Act which specifically contemplates that it applies to Attorneys for Property, and the ability to pursue damages within the Application to Pass Accounts itself in other circumstances appears to be derived from statute, the question of whether there is a “legislative gap” as it relates to the ability to pursue damages against an Attorney for Property within an Application to Pass Accounts can at least appear to be raised. If such a “legislative gap” does exist, would this mean that a separate claim would have to be commenced by the objector to pursue such damages even when an Application to Pass Accounts was currently before the court?
When I have raised the question to other estate practitioners, some have suggested that while there may be no statutory authority to order such damages against the Attorney for Property within the Application to Pass Accounts, the court may have inherent jurisdiction to order such damages by way of a “surcharge order” in the Application to Pass Accounts. Some have also suggested that as section 42(6) of the Substitute Decisions Act contemplates that the procedure to be utilized on passing an Attorney’s accounts is to be the same as that as an executor’s accounts, that this should be read as evidence to show that section 49(3) of the Estates Act would apply to the passing of an Attorney for Property’s accounts. In response to this, I would suggest that it is at least questionable if section 49(3) of the Estates Act is “procedural” in nature, and, even if it is found to be procedural, whether the “powers of the court” provisions of sections 42(7) and 42(8) of the Substitute Decisions Act, which notably does not include the power to award damages against the Attorney for Property for wrongdoing, would trump section 49(3) of the Estates Act in any event.
I am aware of no decision which specifically addresses the issue of whether there is a “legislative gap” when it comes to whether damages can be sought against an Attorney for Property within the Application to Pass Accounts itself. While the issue may simply be academic at this time, it is not unforeseeable that someone could attempt to argue that an objector cannot seek damages against the Attorney for Property within the Application to Pass Accounts itself, and that a separate claim is required. If such an argument is successfully raised, and the length of time between the alleged wrong and the separate claim being commenced was such that the limitation period may have expired, it is not unforeseeable that the Attorney for Property may attempt to argue that the separate claim must now be dismissed as a result of the expiry of the limitation period.
Thank you for reading.
On Monday’s blog, I discussed the mechanisms available to Ontario courts under the Declarations of Death Act to deal with the estate of a deceased person who “returns from the dead.” In today’s blog, I thought it might be useful to look at similar provisions under Ontario’s Absentees Act and to distinguish between the purpose of each Act as well as the authorities of the court thereunder.
The most obvious distinction is evident in the titles of each Act. The Declarations of Death Act, unsurprisingly, concerns individuals that have been declared deceased by the courts. In contrast, and perhaps even more unsurprisingly, the Absentees Act deals with “absentees.”
An absentee is defined under section 1 of the Absentees Act as a person, ordinarily resident in Ontario, who “has disappeared, whose whereabouts is unknown, and as to whom there is no knowledge as to whether he or she is alive or dead.” Similar to the analogous provision in the Declarations of Death Act, section 2 of the Absentees Act allows the Superior Court of Justice to declare a person to be an absentee if a “due and satisfactory inquiry has been made.”
The difference in finality of an order declaring an individual to be deceased rather than merely an absentee is also reflected in the authority given to the courts in dealing with an individual’s property under each Act. Once an individual is declared deceased, that individual’s property is subject to distribution in accordance with any testamentary documents that he or she may have left, such as a will. Without going into significant detail, the property rights of the testator as well as those of any beneficiaries will be substantially impacted as a result of a declaration of death. The courts will be reluctant to trigger these rights absent a conclusive determination of death.
As a result of the foregoing, the Absentees Act gives no authority to the courts to order distributions of property pursuant to a testamentary document. In effect, the authority of the courts over the property of an absentee is severely limited, at least until he or she is declared as such in accordance with the Declarations of Death Act, or unless evidence of his or her death is produced.
Rather than create circumstances that may trigger distributions of an absentee’s property, the Absentees Act may require an individual to instead ensure its upkeep while the absentee is, well, absent. Section 4 of the Absentees Act allows a court to make an order to ensure the “custody, due care and management” of an absentee’s property by a committee, if needed.
This appointee would essentially function as a caretaker of the absentee’s property. The committee has all of the powers and duties of a guardian of property under the Substitute Decisions Act, including the authority to expend the absentee’s own funds for the purposes of determining whether he or she is alive or dead.
Thanks for reading.
As is often the case, a person who is concerned about a fiduciary’s management of property may wish to compel an accounting. However, it is important to remember that a person’s ability to compel such an accounting may vary depending on whether an accounting is being sought from an estate trustee of a deceased’s estate or, in the alternative, from an attorney for property during the lifetime of an incapable grantor.
The legal framework in Ontario
In Ontario, pursuant to section 50 of the Estates Act, an executor or administrator shall not be required to account by the Court “…unless at the instance or on behalf of some person interested in such property or of a creditor of the deceased….” Further, Rule 74.15(1)(h) of the Rules of Civil Procedure provides for any person who appears to have a financial interest in an estate to move for an order for assistance requiring an estate trustee to pass his or her accounts.
Conversely, the right to compel an accounting from an attorney for property or guardian of property is set out under section 42 of the Substitute Decisions Act. Pursuant to section 42, in addition to the attorney, the guardian and the incapable person, the following persons may apply for the fiduciary’s accounts to be passed:
- The grantor’s or incapable persons’ guardian of the person or attorney for personal care;
- A dependant of the grantor or incapable person;
- The Public Guardian and Trustee;
- The Children’s Lawyer;
- A judgment creditor of the grantor or incapable person; and
- Any other person, with leave of the Court.
This is an important distinction to keep in mind: although a person with a financial interest in the estate may be able to compel an accounting from an estate trustee, such a financial interest on the death of an incapable grantor may not in and of itself be sufficient to compel an accounting from an attorney for property during the lifetime of the incapable.
What is the criteria for obtaining the leave of the Court?
The recent decision of the Honourable Justice LeMay in Groh v Steele, 2017 ONSC 3625, is an important reminder of the high threshold for obtaining the leave of the Court to compel an accounting from an attorney for property under section 42.
In Groh, the Applicant, Ernest, sought a capacity assessment of his mother Gabriella under the Substitute Decisions Act. Ernest also sought an order for the suspension of Gabriella’s attorneys for property ability to act and an order for the attorneys for property to pass their accounts. Ernest’s Application was opposed by Gabriella and her attorneys for property.
On the issue of Ernest’s request that the attorneys pass their accounts, Justice LeMay reviewed section 42 of the SDA and concluded that “it is clear that the only circumstances in which Ernest could ask for a passing of accounts is if he can obtain leave of the Court.”
Justice LeMay went on to make the following statement regarding the circumstances in which leave should be granted by the Court:
In my view, such leave should be granted sparingly. The passing of accounts is a detailed review of the financial affairs of the grantor. As such, it is something that is intrusive, and will reveal private financial information about the grantor. In order to obtain leave, the party applying would have to establish both that he or she had some interest (at least indirectly) in the affairs of the grantor, and that there was at least some evidence that the Attorneys were not properly conducting the affairs of the donor. The Court should also consider the role that the Attorneys are playing in the Grantor’s affairs.
After reviewing the facts before the Court, Justice LeMay concluded that a formal passing of accounts should not be ordered, and Ernest’s Application was dismissed.
Thank you for reading,
Umair Abdul Qadir
Last week, the Law Commission of Ontario (LCO) released its Final Report on Legal Capacity, Decision-making and Guardianship. The Final Report is the result of work conducted by a LCO Advisory Group since early 2013.
In the Final Report, the LCO outlines the strengths and attributes of Ontario’s capacity and guardianship regime, as well as areas of concern. Some key areas of concern the LCO identifies include:
- The system is confusing and lacks coordination;
- There is a lack of clarity and consistency in the law for capacity assessments;
- Legal tools are not responsive enough for the range of needs of those directly affected;
- Individuals, families, and service providers are not receiving enough support;
- The current oversight and monitoring mechanisms for substitute decision makers are insufficient;
- The dispute resolution mechanisms under the Substitute Decisions Act, 1992 (SDA) are inaccessible to many.
The Final Report includes recommendations for reforms to law, policy and practice. These recommendations relate to (1) improving access to the law, (2) promoting understanding of the law by those directly affected, (3) strengthening protection of rights under the Health Care Consent Act, (4) reducing inappropriate intervention, (5) increasing accountability and transparency, and (6) enabling greater choice of substitute decision makers.
The Final Report makes 58 recommendations on the statutory regime for legal capacity, decision-making, and guardianship, including proposed reforms to the SDA, the Health Care Consent Act, 1996, and the Mental Health Act. Some of the Final Report’s key recommendations on the law of substitute decision-making include:
- Improved access to capacity assessments under the SDA;
- A standard-form “Statement of Commitment” required to be signed by persons accepting an appointment as an attorney;
- The delivery of “Notices of Attorney Acting” at the first time the attorney acts, delivered to the grantor, the spouse, any previous attorney and any monitor appointed, as well as for any other persons identified in the Power of Attorney;
- The option to name a “monitor”, who would have statutory powers to visit and communicate with the grantor and powers to review accounts and records kept by the attorney;
- Development of time-limited or reviewable guardianship orders;
- Development of limited property guardianships, in parallel with existing limited personal care guardianships;
- Further research and consultation be conducted towards establishing a dedicated licensing and regulatory system for professional substitute decision-makers;
- Further research and consultation be conducted towards allowing community agencies to provide substitute decision-making for day-to-day decisions;
- Clarification of the duty of health practitioners to provide information to substitute decision-makers upon a finding of incapacity; and
- Empowering adjudicators under the SDA to order substitute decision-makers to obtain education on specific aspects of his or her duties.
The Final Report suggests short, medium, and long-term plans for implementing the LCO’s recommendations. You can find a copy of the full report at the LCO website.
Thank you for reading.