Guardianship of Property
Under the Substitute Decision Act (“SDA”)[1] an adult who is deemed mentally incapable of making property decisions may have a guardian appointed as a substitute decision maker. More specifically, s. 6 indicates that a person is incapable of managing property if “the person is not able to understand information that is relevant to making a decision in the management of his or her property or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision”.[2]
Guardianship of Property may be reached by two separate avenues as provided by the Substitute Decision Act (“SDA”). One avenue is statutory guardianship under s.15 & s.16 of the SDA,[3] while the second avenue is a court-appointed guardianship under s.22 of the SDA.[4]
Statutory Guardianship:
Statutory guardianship is not a court appointment; rather, the Public Guardian and Trustee (“PGT”) automatically becomes the individual’s guardian. The Office of the Public Guardian and Trustee (“OGPT”) is a corporation sole, focused primarily on protecting the rights of mentally incapable individuals in Ontario. A corporation sole consists of only one incorporated office, where there is “no distinction between the office holder and the office itself”.[5] The PGT de facto becomes a statutory guardian of property in one of two ways:
- Under s.15 of the SDA, if the individual has received a certificate under the Mental Health Act[6] as a patient in a psychiatric facility, indicating the individual is incapable of managing property.
- Under s.16 of the SDA, an individual may request an authorized capacity assessor to assess an individual found incapable of managing their property.
In both instances there is no known valid power of attorney.
Court Appointed Guardianship:
The second avenue to guardianship is court-appointed guardianship for property pursuant to section 22 of the SDA. Section 22(1) of the SDA states that an individual may “appoint a guardian of property for a person who is incapable of managing property if, as a result, it is necessary for decisions to be made on his or her behalf by a person who is authorized to do so.”[7] The court must make a finding that the individual is incapable in order to appoint a guardian. Applicants must provide evidence of the individual’s incapacity, which will usually include an assessment from an authorized capacity assessor. Additionally, s.22(3) importantly notes that the courts will only appoint a guardian as a last resort basis.[8] Meaning, the court will not appoint a guardian if there is a less restrictive course of action available to the incapable individual. Lastly, the court may appoint a guardian, even if there is already a statutory guardian for the incapable individual.[9]
A guardian for property can do anything relating to property that an incapable person could do if capable, other than make a will.[10] Listed are a few examples of tasks that a guardian for property may carry on behalf of an incapable individual:
- Pay bills
- Purchase goods and services
- Open and close bank accounts
- Manage investments
- Lend, sell, store or dispose of personal belongings
- Litigate
- Apply for benefits
Public Guardian v. Deforest et al, 2023 ONSC 6607[11]
Russell DeForest (“Russell”) is a 20-year-old who was deemed incapable of managing his own property. None of the parties contested this fact. The PGT (the “Applicant”) brought forward an application to appoint a guardian of property, deeming it “necessary” under section 22(1) of the SDA. Russel’s mother (the “Respondent”) and guardian, opposed this application.[12]
Russell currently lives in a group home that is paid out of his Ontario Disability Support Program (“OSDP”). Russell had been living in the home for the past two years. The remainder of his ODSP funds were deposited into a bank account that the Respondent manages. Russell had approximately $20,000 accumulated in his account prior to moving into the group home. [13]
The PGT commenced an application for guardianship on the basis that the Respondent had failed to use the Russell’s ODSP funds for his benefit, and “because there is no other suitable person who is available and willing to be appointed”.[14] The court stated:
[4] While Russell was living with her, Ms. Kindred-Deforest refused to access the funds to buy the undergarments and dietary supplements that were recommended by his treating professionals. The only time Ms. Kindred-Deforest withdrew funds was to buy a washer and dryer, and this was after Russell had already moved to the group home.[15]
Russel’s counsel and the PGT asserted that the ODSP funds should be going towards improving his quality of life. This includes using the funds towards his group home activities, personal items such as clothes or outings.[16]
The court addressed other instances of the Respondent’s improper use of Russell’s funds. This included CCP survivor benefits that were given to Russell from his grandmother. The Respondent failed to facilitate the transfer of such funds to Russell.[17]
The Respondent asserted that she had allowed the Russell’s funds to accumulate in her own account so Russell could “have a nest egg one day”.[18] In other words, the Respondent had failed to pay for programs or goods that may improve the Russel’s quality of life, to ensure that Russell has a secure financial future. This did not sway the court, given the Respondent was aware that Russell has a short life expectancy. Additionally, the Respondent stated she “would be agreeable to a court order that requires her to pay for incidentals (for Russell) such as outings and the like.”[19] However, the Respondent failed to do so in the past, despite given the numerous opportunities.
Given the OSDP funds had not been used to Russell’s benefit, the court approved the order sought by the PGT.
As for costs, the PGT is given authority under section 8 of the Public Guardian and Trustee Act[20] to seek costs from the Russell’s estate. Counsel on behalf of Russell sought $20,116.50 on a full indemnity basis. The court rejected this grand sum, stating an interesting analysis on costs:
[9] I also note with some concern that the PGT’s claimed fees would effectively dissipate all the funds that are currently being held in Russell’s account. This is entirely inconsistent with the PGT’s argument that Russell needs these funds for his day to day living expenses.[21]
The court additionally stated that Russell’s cooperation with the application should be reflected in the costs. Russell demonstrated this by being agreeable to submit a capacity assessment to manage property and instructing “counsel who attended the application not to take a position on it.”[22] On this basis, the court awarded costs against Russell for $5,000.
—
[1] Substitute Decisions Act, 1992, SO 1992, c30 (“SDA”)
[2] Ibid, s. 6
[3] Ibid, s. 15 & s.16
[4] Ibid, s. 22
[5] Philippe Lagassé and James WJ Bowden, Royal Succession and the Canadian Crown as a Corporation Sole: A Critique of Canada’s Succession to the Throne Act, 2013, 2014 23-1 Constitutional Forum 17, 2014
[6] Mental Health Act, R.S.O. 1990, c. M.7.
[7] Ibid, s. 22
[8] Ibid at s.22(3)
[9] Ibid at s.22(2)
[10] Ibid at s.31(1)
[11] Public Guardian v. Deforest et al, 2023 ONSC 6607
[12] Ibid at para 4
[13] Ibid at para 3
[14] Ibid at para 4
[15] Ibid at para 4
[16] Ibid at para 6
[17] Ibid at para 5
[18] Ibid at para 6
[19] Ibid at Para 5
[20] Public Guardian and Trustee Act at s. 8
[21] Ibid at Para 9.
[22] Ibid at Para 11.
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Written by: Gabriella Banhara
Posted on: December 23, 2023
Categories: Commentary, WEL Newsletter
Guardianship of Property
Under the Substitute Decision Act (“SDA”)[1] an adult who is deemed mentally incapable of making property decisions may have a guardian appointed as a substitute decision maker. More specifically, s. 6 indicates that a person is incapable of managing property if “the person is not able to understand information that is relevant to making a decision in the management of his or her property or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision”.[2]
Guardianship of Property may be reached by two separate avenues as provided by the Substitute Decision Act (“SDA”). One avenue is statutory guardianship under s.15 & s.16 of the SDA,[3] while the second avenue is a court-appointed guardianship under s.22 of the SDA.[4]
Statutory Guardianship:
Statutory guardianship is not a court appointment; rather, the Public Guardian and Trustee (“PGT”) automatically becomes the individual’s guardian. The Office of the Public Guardian and Trustee (“OGPT”) is a corporation sole, focused primarily on protecting the rights of mentally incapable individuals in Ontario. A corporation sole consists of only one incorporated office, where there is “no distinction between the office holder and the office itself”.[5] The PGT de facto becomes a statutory guardian of property in one of two ways:
In both instances there is no known valid power of attorney.
Court Appointed Guardianship:
The second avenue to guardianship is court-appointed guardianship for property pursuant to section 22 of the SDA. Section 22(1) of the SDA states that an individual may “appoint a guardian of property for a person who is incapable of managing property if, as a result, it is necessary for decisions to be made on his or her behalf by a person who is authorized to do so.”[7] The court must make a finding that the individual is incapable in order to appoint a guardian. Applicants must provide evidence of the individual’s incapacity, which will usually include an assessment from an authorized capacity assessor. Additionally, s.22(3) importantly notes that the courts will only appoint a guardian as a last resort basis.[8] Meaning, the court will not appoint a guardian if there is a less restrictive course of action available to the incapable individual. Lastly, the court may appoint a guardian, even if there is already a statutory guardian for the incapable individual.[9]
A guardian for property can do anything relating to property that an incapable person could do if capable, other than make a will.[10] Listed are a few examples of tasks that a guardian for property may carry on behalf of an incapable individual:
Public Guardian v. Deforest et al, 2023 ONSC 6607[11]
Russell DeForest (“Russell”) is a 20-year-old who was deemed incapable of managing his own property. None of the parties contested this fact. The PGT (the “Applicant”) brought forward an application to appoint a guardian of property, deeming it “necessary” under section 22(1) of the SDA. Russel’s mother (the “Respondent”) and guardian, opposed this application.[12]
Russell currently lives in a group home that is paid out of his Ontario Disability Support Program (“OSDP”). Russell had been living in the home for the past two years. The remainder of his ODSP funds were deposited into a bank account that the Respondent manages. Russell had approximately $20,000 accumulated in his account prior to moving into the group home. [13]
The PGT commenced an application for guardianship on the basis that the Respondent had failed to use the Russell’s ODSP funds for his benefit, and “because there is no other suitable person who is available and willing to be appointed”.[14] The court stated:
[4] While Russell was living with her, Ms. Kindred-Deforest refused to access the funds to buy the undergarments and dietary supplements that were recommended by his treating professionals. The only time Ms. Kindred-Deforest withdrew funds was to buy a washer and dryer, and this was after Russell had already moved to the group home.[15]
Russel’s counsel and the PGT asserted that the ODSP funds should be going towards improving his quality of life. This includes using the funds towards his group home activities, personal items such as clothes or outings.[16]
The court addressed other instances of the Respondent’s improper use of Russell’s funds. This included CCP survivor benefits that were given to Russell from his grandmother. The Respondent failed to facilitate the transfer of such funds to Russell.[17]
The Respondent asserted that she had allowed the Russell’s funds to accumulate in her own account so Russell could “have a nest egg one day”.[18] In other words, the Respondent had failed to pay for programs or goods that may improve the Russel’s quality of life, to ensure that Russell has a secure financial future. This did not sway the court, given the Respondent was aware that Russell has a short life expectancy. Additionally, the Respondent stated she “would be agreeable to a court order that requires her to pay for incidentals (for Russell) such as outings and the like.”[19] However, the Respondent failed to do so in the past, despite given the numerous opportunities.
Given the OSDP funds had not been used to Russell’s benefit, the court approved the order sought by the PGT.
As for costs, the PGT is given authority under section 8 of the Public Guardian and Trustee Act[20] to seek costs from the Russell’s estate. Counsel on behalf of Russell sought $20,116.50 on a full indemnity basis. The court rejected this grand sum, stating an interesting analysis on costs:
[9] I also note with some concern that the PGT’s claimed fees would effectively dissipate all the funds that are currently being held in Russell’s account. This is entirely inconsistent with the PGT’s argument that Russell needs these funds for his day to day living expenses.[21]
The court additionally stated that Russell’s cooperation with the application should be reflected in the costs. Russell demonstrated this by being agreeable to submit a capacity assessment to manage property and instructing “counsel who attended the application not to take a position on it.”[22] On this basis, the court awarded costs against Russell for $5,000.
—
[1] Substitute Decisions Act, 1992, SO 1992, c30 (“SDA”)
[2] Ibid, s. 6
[3] Ibid, s. 15 & s.16
[4] Ibid, s. 22
[5] Philippe Lagassé and James WJ Bowden, Royal Succession and the Canadian Crown as a Corporation Sole: A Critique of Canada’s Succession to the Throne Act, 2013, 2014 23-1 Constitutional Forum 17, 2014
[6] Mental Health Act, R.S.O. 1990, c. M.7.
[7] Ibid, s. 22
[8] Ibid at s.22(3)
[9] Ibid at s.22(2)
[10] Ibid at s.31(1)
[11] Public Guardian v. Deforest et al, 2023 ONSC 6607
[12] Ibid at para 4
[13] Ibid at para 3
[14] Ibid at para 4
[15] Ibid at para 4
[16] Ibid at para 6
[17] Ibid at para 5
[18] Ibid at para 6
[19] Ibid at Para 5
[20] Public Guardian and Trustee Act at s. 8
[21] Ibid at Para 9.
[22] Ibid at Para 11.
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