Royal Bank of Canada v Sutherland, 2014 ABQB 724

Court of Queen ’ s Bench of Alberta Citation: Royal Bank of Canada v Sutherland, 2014 ABQB 724 Date: 20141125 Docket: 1201 12101 Registry: Calgary Between: Royal Bank of Canada Plaintiff - and - John A. Sutherland and Bank of Montreal Defendants _______________________________________________________ Memorandum of Decision of J.B. Hanebury , Master in Chambers _______________________________________________________ [ 1 ] This is an application by the Royal Bank for judgment against Mr. Sutherland for writing a cheque to himself as power of attorney for his mother.

The Bank cashed the cheque and ultimately determined that, in its view, it shouldn’t have. It reimbursed Mr. Sutherland’s mother and sued him and the Bank of Montreal where he deposited the funds. The Bank of Montreal froze Mr. Sutherland’s accounts. Mr. Sutherland has defended and counterclaimed against both Banks. Facts [ 2 ] Mr. Sutherland is relying on two powers of attorney granted to him by his mother. The first is titled a Power of Attorney and is dated April, 1995. It was signed by Mr. Sutherland as the witness/notary to his mother's signature.

It provides that it comes into force "upon my incapacity or upon my being unable to manage my personal affairs". The legislation in place in British Columbia at that time did not forbid the recipient of the power granted under the document also being the witness to its granting.

[ 3 ] A second power of attorney was granted in January 2001. It is titled an "Enduring Power of Attorney" and first gave the power to act to Mr. Sutherland's father and, should he cease to act, to Mr. Sutherland. It was executed in Calgary but says in its body that: In accordance with the laws of the Province of British Columbia, I declare that this enduring Power of Attorney is to continue notwithstanding any mental incapacity or infirmity of me that occurs after the execution of the Enduring Power of Attorney.

This Enduring Power of Attorney shall come into effect at the time that a certificate of a medical practitioner certifying my incapacity is signed. [ 4 ] The Certificate of Independent Legal Advice attached is also signed by Mr. Sutherland, was executed in Calgary and the explanatory notes attached do not contain a reference to British Columbia or Alberta. [ 5 ] The evidence indicates that in November, 2011, Mr. Sutherland and his mother attended at the Royal Bank in Calgary and either brought or referenced a power of attorney and a copy of a page from Mrs.

Sutherland's income tax return, a Statement of Disability as to the effects of impairment. This latter document is part of the application process necessary to obtain a disability tax credit. It is unclear when and if one or both of the powers of attorney were provided. Neither party provided specific evidence on point. However, it appears that at some point a copy of the Statement of Disability was provided. [ 6 ] The Statement requires a doctor to describe the effects of the applicant's impairment on the "basic activities of daily living".

The document that the doctor signed states that [the] basic activities of daily living are limited to walking, speaking, hearing, dressing, feeding, elimination, and mental functions necessary for everyday life. Working, housekeeping, managing a bank account, and social or recreational activities are not considered basic activities of daily living. [ 7 ] The doctor completing the Statement gave as a diagnosis "blindness & significantly hearing impaired." As to the effects of impairment, he said that: pt [patient] cannot cook & has difficulty preparing food, cannot walk stairs on own.

Difficulty w/ communicating due to hearing impairment. [ 8 ] The next day after the meeting at the Royal Bank Mr. Sutherland sent a letter to the Bank complaining of its actions. He attached a copy of that letter to his affidavit. It indicates that the meeting with two Bank staff was “most unsatisfactory.” It says that he has a power of attorney and the purpose of the meeting was to change the names on the account so it read both he and his mother. It states that “[m]y mother is unable to do her banking and I attach the Certificate of disability certified by her doctor”.

It also says that “[m]y mother did not require any legal advice from your staff member and was totally confused by her suggestions”. [ 9 ] In its evidence the Bank says it refused to "accept flawed documents provided by Sutherland". It states that the "Royal Bank has never accepted Sutherland as an attorney over Ruth Sutherland's...accounts." [ 10 ] In August, 2012 Mr. Sutherland wrote a cheque on his mother’s account in Penticton, British Columbia to himself in the sum of $70,000.00. He signed it “Ruth D. Sutherland, by her power of attorney John A. Sutherland”.

He deposited it in his account at the Bank of Montreal. The Royal Bank cleared the cheque, but eventually, determining that it should not have done so, it reimbursed Ruth Sutherland’s account. It commenced this action against Mr. Sutherland and the Bank of Montreal seeking the return of its money. The Bank of Montreal froze the funds in Mr. Sutherland’s accounts. [ 11 ] Mr. Sutherland defended the action and counter-claimed against both banks.

Arguments [ 12 ] Counsel for the Royal Bank argues that the powers of attorney were never triggered as the Statement of Disability is insufficient to bring them into effect. He also argues that the powers of attorney are ineffective as they violate the legislative requirements in place in Alberta and British Columbia in 2012. [ 13 ] Mr. Sutherland points to the Statement of Disability as the trigger to the implementation of the powers of attorney.

He also argues that his removal of the funds was only to safeguard them from other relatives who, he feared, were improperly influencing and controlling his mother. [ 14 ] There was no evidence by either party as to which power of attorney was provided to the Royal Bank, nor was there any argument on the legal questions raised by the two powers of attorney.

They were signed in two different jurisdictions, subject to two legislative regimes, one of which changed its legislative requirements subsequent to the signing of the power of attorney but before its alleged effective date. [ 15 ] This Court does not normally entertain hypothetical questions, so declined to consider the Royal Bank’s second argument in the absence of sufficient facts. Therefore, the only question that will be considered is whether the Statement of Disability was sufficient to permit Mr. Sutherland to rely on either of the powers of attorney.

Decision [ 16 ] The Statement of Disability makes it clear that the doctor completing the statement is not to consider the effect of the taxpayer’s disability on his or her ability to undertake various activities, including working, managing a bank account, and recreational or social activities. The Statement in issue does not mention a problem of incapacity such as dementia or other mental illness. It does not comment on her ability to manage her personal affairs. It deals with Mrs. Sutherland’s inability to complete the physical tasks of day-to- day living and the impairment described is physical.

[ 17 ] Therefore, I have come to the conclusion that the test found in either power of attorney has not been met. That Statement was insufficient to permit Mr. Sutherland to rely on the power granted to him under those documents. [ 18 ] It follows that the Royal Bank was correct in replacing the funds taken from Mrs. Sutherland’s account and it is entitled to the return of its funds which were wrongfully taken by Mr. Sutherland. I wish to make it clear that I make no finding of fraud against Mr. Sutherland as the evidence before the Court is insufficient to meet the test for such a finding.

While it is unusual for a person being granted a power under a power of attorney to also witness the document and provide independent legal advice, without knowing which power of attorney was relied upon and the laws of which province governed, it cannot be definitively stated that what occurred was illegal or fraudulent. [ 19 ] As it is not the Royal Bank who has frozen Mr. Sutherland’s accounts at the Bank of Montreal, the counterclaim against the Royal Bank is summarily dismissed. The claim remains against the Bank of Montreal, who brought no application before the Court.

Conclusion [ 20 ] The Royal Bank is entitled to judgment for $70,000.00 plus interest as allowed under the Judgment Interest Act. That sum is to be returned to it from Mr. Sutherland’s funds held by the Bank of Montreal. The counterclaim against the Royal Bank is summarily dismissed. [ 21 ] The Royal Bank is entitled to its costs. Heard on the 20 th day of November, 2014. Dated at the City of Calgary, Alberta this 25 th day of November, 2014. J.B. Hanebury M.C.C.Q.B.A. Appearances: Lorne J. Graburn Dentons Canada LLP and Emily Denstedt Student at Law - Dentons Canada LLP for the Plaintiff John A.

Sutherland for the Defendant for John A. Sutherland