Adler v. Gregor, 2019 ONSC 3037 (CanLII) http://canlii.ca/t/j0thx
“There is no possibility of mistaking midnight from noon, but at what precise moment twilight becomes darkness is hard to determine.”
When individuals are suffering from dementia, it is a particularly challenging task to assess their medical, legal, and financial decision making capacity. In Adler v Gregor, [1] the court addresses capacity in respect of the validity of powers of attorney and an inter vivos gift.
Background:
In 2015 Mrs. Adler granted sole powers of attorney to one of her two daughters (the “Respondent”), with the assistance from long-term estate counsel. These power of attorney documents were only to be released in the event that Mrs. Adler was found to lack capacity, by a physician or licensed capacity assessor. In response, the other daughter (the “Applicant”) brought an application seeking to uphold new 2017 powers of attorney, on grounds that included that Mrs. Adler had the requisite decisional capacity during the execution.
Mrs. Adler was living independently in 2015. By August 2016, she was receiving support seven days a week, twice a day, and by November 2016 had moved to a senior residence’s home. In February 2017, Mrs. Adler issued her daughter/Respondent’s cheque for $25,000. In August 2017, following the recommendation of both a geriatrician and family physician, Mrs. Adler received a capacity assessment and was found to be incapable of managing property and incapable of granting a power of attorney for property.
The Applicant challenged the reliability of these assessments and arranged for her mother to see new counsel for the purposes of drafting and executing new powers of attorney. This counsel was unaware of the previous capacity assessment. New powers of attorney were drafted in September 2017. In October 2017, the applicant arranged for Mrs. Adler to receive a second capacity assessment, which found Mrs. Adler capable of granting powers of attorney.
Analysis:
The Honourable Justice Penny noted the long history of acrimonious conflict between the sisters and their desire to engage in lengthy proceedings. His Honour ordered the matter to be heard in one day without viva voce evidence.
Capacity to Grant Powers of Attorney
While the nature of the task determines the standard of capacity, there are two foundational elements to be considered:
“1) ability to understand information relevant for making decisions; and
2) ability to appreciate the consequences of a decision”.[2]
His Honour referred to Section 8 of the capacity assessment regime under the Substitute Decisions Act[3] (the “SDA”) which deals with granting powers of attorney for property, and provides that:
A person is capable of giving a continuing power of attorney if he or she,
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependents;
(c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person’s property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or her.
The Honourable Justice Penny made note of the fact that both parties were heavily involved in the respective capacity assessments. In particular, the Respondent was found to have exerted significant influence over the October 2017 assessment. Looking to the guidelines and relevant provisions in the SDA, His Honour reinforced that capacity assessments were never intended to be “used as weapons in high conflict litigation such as this.”[4] In this case, the court found that both assessments were obtained for this purpose, in contemplation of litigation and that “this kind of use of capacity assessments by parties or their lawyers is improper and should be discouraged in the strongest possible terms by counsel and the Court.”[5]
As a result, both capacity assessments were rejected on the grounds of bias, interference, and a variety of deficiencies in the actual assessments. His Honour made a number of other observations to assist in the determination of Mrs. Adler’s capacity to grant powers of attorney in September 2017. Those factors included, but were not limited to an assessment from Mrs. Adler’s family physician, a status review from a community care center, a report from Regional Nursing Services, and anecdotal evidence from friends and family. A finding of incapacity for any task is a “serious incursion into the rights and privacy of the person.”[6] Justice Penny referenced, Abrams v. Abrams to reinforce the gravity of a declaration of incapacity, which should be understood as an attack to the autonomy and freedom of the individual.[7] In viewing the evidence as a whole, Justice Penny found that the grantor lacked capacity to appreciate the consequences of the September 2017 powers of attorney. As a result, the 2015 powers of attorney were found to be the only valid powers granted
The Inter Vivos Gift
The three essential elements of a gift include:
1) the donor’s intention to make a gift;
2) acceptance of the gift by the donee; and
3) delivery of the gift.
The issue in this case was whether the donor had the requisite decisional capacity to make a gift, and if it was made of her own free will. In Teixeira v Estate of Maria Markgraf, the court established that in cases of a gift by cheque, “it is the date the cheque is cashed, not when it is written, that gives effect to the gift.”[8]
In June 2017, the Respondent was a joint owner of the mother’s accounts for almost two years and had been helping manage her property. After the cheque was written, but prior to it being cashed, the donor was diagnosed with dementia and prescribed a drug for treatment. A month later the cheque was cashed. At this time, the family physician noticed a significant deterioration and recommended a capacity assessment. In light of the facts, Justice Penny concluded that the Respondent should be regarded as her mother’s fiduciary and that the acceptance of significant gifts was “highly inappropriate.”[9]
The Respondent failed to establish, on a balance of probabilities, that the donor had the requisite capacity to make the gift, and was ordered to put $25,000.00 back into the donor’s account.
Takeaways
Determinations of decisional capacity are highly complex, particularly where individuals are suffering from dementia. The purpose of the SDA capacity assessment regime is to assist with the necessary exercise of balancing the protection of vulnerable individuals without undermining personal autonomy and free will.
This case demonstrates some judicial reticence towards circumstantial evidence in proceedings on decisional incapacity. Each case however has to be viewed on its individual facts – making capacity proceedings highly complex. Justice Penny reinforced the importance of a contextual approach in instances where capacity assessments are rejected on the basis of unreliability and interference. Lastly, this case can be used to nuance the decision in McCabe.[10] Where the court suggests that a poorly executed capacity assessment is better than nothing. In McCabe, there were issues with the standard of the assessment, however, the witnesses were considered to be honest and credible. The decision in Adler speaks to the importance of the intentions that prompt the capacity assessment. Capacity assessments should not be used as weapons in contentious litigation and capacity assessors should not be influenced by the party who requests the assessment which is a basic factor in obtaining court expert reports.
—
[1] Adler v. Gregor, 2019 ONSC 3037
[2]Ibid at para 25.
[3] R.S.O. 1992, c. 30.
[4] Ibid at para 47.
[5] Ibid at para 52.
[6] Ibid at para 67.
[7] Ibid.
[8] Teixeira v Estate of Maria Markgraf et al., 2017 ONSC 427 at para 46.
[9] Supra note 2 at 89.
[10] McCabe v. McCabe and another [2015] EWHC 1591 (Ch)
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Written by: Prudence Etkin
Posted on: July 29, 2019
Categories: Commentary, WEL Newsletter
Adler v. Gregor, 2019 ONSC 3037 (CanLII) http://canlii.ca/t/j0thx
“There is no possibility of mistaking midnight from noon, but at what precise moment twilight becomes darkness is hard to determine.”
When individuals are suffering from dementia, it is a particularly challenging task to assess their medical, legal, and financial decision making capacity. In Adler v Gregor, [1] the court addresses capacity in respect of the validity of powers of attorney and an inter vivos gift.
Background:
In 2015 Mrs. Adler granted sole powers of attorney to one of her two daughters (the “Respondent”), with the assistance from long-term estate counsel. These power of attorney documents were only to be released in the event that Mrs. Adler was found to lack capacity, by a physician or licensed capacity assessor. In response, the other daughter (the “Applicant”) brought an application seeking to uphold new 2017 powers of attorney, on grounds that included that Mrs. Adler had the requisite decisional capacity during the execution.
Mrs. Adler was living independently in 2015. By August 2016, she was receiving support seven days a week, twice a day, and by November 2016 had moved to a senior residence’s home. In February 2017, Mrs. Adler issued her daughter/Respondent’s cheque for $25,000. In August 2017, following the recommendation of both a geriatrician and family physician, Mrs. Adler received a capacity assessment and was found to be incapable of managing property and incapable of granting a power of attorney for property.
The Applicant challenged the reliability of these assessments and arranged for her mother to see new counsel for the purposes of drafting and executing new powers of attorney. This counsel was unaware of the previous capacity assessment. New powers of attorney were drafted in September 2017. In October 2017, the applicant arranged for Mrs. Adler to receive a second capacity assessment, which found Mrs. Adler capable of granting powers of attorney.
Analysis:
The Honourable Justice Penny noted the long history of acrimonious conflict between the sisters and their desire to engage in lengthy proceedings. His Honour ordered the matter to be heard in one day without viva voce evidence.
Capacity to Grant Powers of Attorney
While the nature of the task determines the standard of capacity, there are two foundational elements to be considered:
“1) ability to understand information relevant for making decisions; and
2) ability to appreciate the consequences of a decision”.[2]
His Honour referred to Section 8 of the capacity assessment regime under the Substitute Decisions Act[3] (the “SDA”) which deals with granting powers of attorney for property, and provides that:
A person is capable of giving a continuing power of attorney if he or she,
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependents;
(c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person’s property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or her.
The Honourable Justice Penny made note of the fact that both parties were heavily involved in the respective capacity assessments. In particular, the Respondent was found to have exerted significant influence over the October 2017 assessment. Looking to the guidelines and relevant provisions in the SDA, His Honour reinforced that capacity assessments were never intended to be “used as weapons in high conflict litigation such as this.”[4] In this case, the court found that both assessments were obtained for this purpose, in contemplation of litigation and that “this kind of use of capacity assessments by parties or their lawyers is improper and should be discouraged in the strongest possible terms by counsel and the Court.”[5]
As a result, both capacity assessments were rejected on the grounds of bias, interference, and a variety of deficiencies in the actual assessments. His Honour made a number of other observations to assist in the determination of Mrs. Adler’s capacity to grant powers of attorney in September 2017. Those factors included, but were not limited to an assessment from Mrs. Adler’s family physician, a status review from a community care center, a report from Regional Nursing Services, and anecdotal evidence from friends and family. A finding of incapacity for any task is a “serious incursion into the rights and privacy of the person.”[6] Justice Penny referenced, Abrams v. Abrams to reinforce the gravity of a declaration of incapacity, which should be understood as an attack to the autonomy and freedom of the individual.[7] In viewing the evidence as a whole, Justice Penny found that the grantor lacked capacity to appreciate the consequences of the September 2017 powers of attorney. As a result, the 2015 powers of attorney were found to be the only valid powers granted
The Inter Vivos Gift
The three essential elements of a gift include:
1) the donor’s intention to make a gift;
2) acceptance of the gift by the donee; and
3) delivery of the gift.
The issue in this case was whether the donor had the requisite decisional capacity to make a gift, and if it was made of her own free will. In Teixeira v Estate of Maria Markgraf, the court established that in cases of a gift by cheque, “it is the date the cheque is cashed, not when it is written, that gives effect to the gift.”[8]
In June 2017, the Respondent was a joint owner of the mother’s accounts for almost two years and had been helping manage her property. After the cheque was written, but prior to it being cashed, the donor was diagnosed with dementia and prescribed a drug for treatment. A month later the cheque was cashed. At this time, the family physician noticed a significant deterioration and recommended a capacity assessment. In light of the facts, Justice Penny concluded that the Respondent should be regarded as her mother’s fiduciary and that the acceptance of significant gifts was “highly inappropriate.”[9]
The Respondent failed to establish, on a balance of probabilities, that the donor had the requisite capacity to make the gift, and was ordered to put $25,000.00 back into the donor’s account.
Takeaways
Determinations of decisional capacity are highly complex, particularly where individuals are suffering from dementia. The purpose of the SDA capacity assessment regime is to assist with the necessary exercise of balancing the protection of vulnerable individuals without undermining personal autonomy and free will.
This case demonstrates some judicial reticence towards circumstantial evidence in proceedings on decisional incapacity. Each case however has to be viewed on its individual facts – making capacity proceedings highly complex. Justice Penny reinforced the importance of a contextual approach in instances where capacity assessments are rejected on the basis of unreliability and interference. Lastly, this case can be used to nuance the decision in McCabe.[10] Where the court suggests that a poorly executed capacity assessment is better than nothing. In McCabe, there were issues with the standard of the assessment, however, the witnesses were considered to be honest and credible. The decision in Adler speaks to the importance of the intentions that prompt the capacity assessment. Capacity assessments should not be used as weapons in contentious litigation and capacity assessors should not be influenced by the party who requests the assessment which is a basic factor in obtaining court expert reports.
—
[1] Adler v. Gregor, 2019 ONSC 3037
[2]Ibid at para 25.
[3] R.S.O. 1992, c. 30.
[4] Ibid at para 47.
[5] Ibid at para 52.
[6] Ibid at para 67.
[7] Ibid.
[8] Teixeira v Estate of Maria Markgraf et al., 2017 ONSC 427 at para 46.
[9] Supra note 2 at 89.
[10] McCabe v. McCabe and another [2015] EWHC 1591 (Ch)
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