The Ontario Bar Association Elder Law Section held its 2023 Elder Law Day on Tuesday, March 28, 2023. Concerns on issues of how the elderly are impacted by capacity issues, when and in what instances should litigation guardians be used, and how lawyers should assist clients with their care needs were the fulcrum of the three panels that had key experts in the industry. The Honourable Justice Gillese who was the keynote speaker who discussed costs.
Case Comment: Doherty v Doherty
Ms. Gale presented opening remarks and a case comment regarding the recent decision that her and her firm argued - Doherty v. Doherty, 2023 ONSC 1536. The Honourable Justice Dietrich presided and rendered a decision over this case regarding misappropriation of funds by an Attorney for Property.
Use of Power of Attorney – Capable Donor?
As for the issue of the power of attorney when the donor is capable vs. incapable, the importance of capacity was discussed in different contexts. The court cited the decision in Banton v. Banton (1998), 164 D.L.R. (4th) 176 (Ont. Ct. J. (Gen. Div.) where Cullity J. highlighted the important difference between an attorney acting for a donor who has mental capacity versus a donor who does not (and is a mere agent). Banton emphasized that those acting as an agent owes a fiduciary duty but these “pale in comparison to those of an attorney holding a continuing power when the donor has lost capacity to manage property.” Paragraph 69 of the Doherty decision further states: “Irrespective of the capacity in which an attorney is acting, the attorney cannot exceed the scope of authority granted to him, and if he does, he will be liable for any breach of fiduciary duty.”
Joint and Several Liability
The question of joint and several liability for knowingly assisting in the breach of a fiduciary duty was also determined by the court. In paragraph 73 of Doherty, it was held that: “A stranger to a fiduciary relationship may be liable under the doctrine of ‘knowing receipt’ if the stranger receives trust property in his or her own personal capacity with constructive knowledge of the breach of trust or fiduciary duty.”
Liam and Sylvia were found to have been in knowing receipt of trust property belonging to Mrs. Doherty in their personal capacity with constructive knowledge of the breach of fiduciary duty by Terrence. It was found that Liam did not knowingly assist in the breach for him to be held jointly and severally liable for Terrence’s breaches of fiduciary duty. On the other hand, Sylvia was found to have been complicit in Terrence’s breaches of fiduciary duty, and was held jointly and severally liable.
Costs
On the matter of costs, the court found that Kathleen had successfully shown why she should be awarded costs on a full indemnity basis. Terrence’s breaches of his fiduciary duties as his mother’s attorney for property was conduct that rose to reprehensible, scandalous and egregious levels which was worthy of the serious sanction of full indemnity costs.
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