MARLENE MARIENHOFF v. WAYNE STANLEY, 2003 SKQB 157

2003 SKQB 157 Q.B.G. A.D. 20 01 No. 738 J.C. S. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF SASKATOON IN THE MATTER OF AN APPLICATION FOR AN ORDER FOR THE APPOINTMENT OF PERSONAL AND PROPERTY GUARDIANS FOR ANGUS EDMUND BROCHU PURSUANT TO THE ADULT GUARDIANSHIP AND CO-DECISION MAKING ACT BETWEEN: MARLENE MARIENHOFF and WAYNE STANLEY APPLICANTS - and - MERVIN EDWARDS RESPONDENT John B. Benesh for the applicants Irwin B. Carson for the respondent FIAT LAING J. April 2, 2003

[ 1 ] The issue in this matter is whether a party, in this case the applicants, may obtain an order pursuant to The Adult Guardianship and Co-Decision-Making Act , S.S. 2000, c. A-5.3 (hereinafter referred to as the “ Act ”) to have the Public Trustee of Saskatchewan named property guardian for the estate of their stepfather, Angus Edmund Brochu, while there is extant an enduring power of attorney in favour of the respondent which provides the authority contained in the power of attorney shall continue notwithstanding any mental infirmity that develops on the part of Mr.

Brochu. [ 2 ] There is no debate, that at this time Mr. Brochu is not mentally competent to manage his own financial affairs. [ 3 ] The position of the applicants is that Mr. Brochu was also not mentally competent at the time he signed the power of attorney in favour of the respondent on January 16, 2001 and for this reason it should be set aside.

The respondent denies this is the case, and states that unless and until a court sets aside the power of attorney, there is no basis to appoint a property guardian under the Act because it cannot be demonstrated on a balance of probabilities that the adult is in need of a property guardian pursuant to s. 33(2) of the Act . [ 4 ] The position of the parties raises the following questions: 1. In what circumstances is it appropriate to appoint a property guardian under the Act , when the adult has granted an enduring power of attorney to a third party? 2.

May the capacity of the adult to have appointed a power of attorney be challenged collaterally in an application brought only under the Act . Facts [ 5 ] The applicants, Marlene Marienhoff, age 66 and Wayne Stanley, age 63 are the step-children of Mr. Angus Edmund Brochu, the now dependant adult. Ms. Marienhoff resides in the town of Allan and Mr. Stanley resides in the Saskatoon district in Saskatchewan. The only other relatives of Mr. Brochu are brothers and sisters. Mr. Brochu was born on November 30, 1919 and is at the present time 81 years of age. [ 6 ] Mr.

Brochu has lived in the Arborfield district in Saskatchewan through most of his life. In 1998 Mr. Brochu purchased a house in Allan, Saskatchewan where the applicant Marlene Marienhoff and her husband reside with the objective of he and his wife moving to Allan to be close to the applicant. The purchased house was purchased as joint tenants with the applicant Marlene Marienhoff and at the time she signed a declaration of trust indicating she held her joint interest in trust for Mr. Brochu. On July 10, 1998 Mr. Brochu also executed a general enduring power of attorney appointing Ms.

Marienhoff his power of attorney. About this same time Mr. Brochu’s wife became ill and died before they had an opportunity to relocate to Allan, Saskatchewan. Mr. Brochu moved to Allan by himself sometime in 1998. Sometime prior to April of 2000 Mr. Brochu moved back to Arborfield, Saskatchewan where he took up residence in a self-contained senior’s unit wherein he cooked his own breakfast and suppers and was provided with a meal at noon hour by Meals on Wheels. [ 7 ] On May 18, 2000 Mr.

Brochu attended at the Carrot River Credit Union where he maintained an account and revoked the power of attorney in favour of Ms. Marienhoff with respect to account number 1086289. The letter he signed to the Credit Union at the time stated “I feel I can manage my own business affairs”. The person Mr. Brochu dealt with at the Credit Union wrote to Ms. Marienhoff providing her with a copy of the revocation and advising her that the five monthly bills Mr.

Brochu had to pay which included housing rent, home care, power, telephone and water he wished to be in charge of paying himself. [ 8 ] The respondent herein, Mr. Mervin Edwards, is the son of Ernest Edwards who is 76 years old and a long time friend of Mr. Brochu’s. Mr. Edwards states that in April of 2000 Mr. Brochu approached him and asked if he had time to see him on some business. Mr. Edwards states he responded in the affirmative but it was not until December of 2000 that Mr. Brochu approached him about being his power of attorney. On January 16, 2001 Mr.

Brochu signed an enduring power of attorney witnessed by an independent lawyer naming Mr. Mervin Edwards as the donee.

[ 9 ] The day prior to his signing the power of attorney on January 15, 2001 Mr. Brochu wrote a cheque in the amount of $30,000.00 in favour of his friend, Ernie Edwards. This $30,000.00 gift to Ernest Edwards appears to have been a catalyst for this application by Ms. Marienhoff and Mr. Stanley.

With respect to this $30,000.00 gift the person at the Carrot River and District Credit Union Ltd. wrote a note dated April 18, 2001 addressed “To Whom it May Concern” and stated: In the early part of January, 2001, Angus talked to the Credit Union about wanting to give a one time gift of money to Ernie Edwards for his own reasons. In mid January when he gave his gift of money, we confirmed the details to be certain of his decision and again, Angus was determined to do so. In late March, 2001 I spoke with Angus to reconfirm that he was still okay with the transactions he made.

He was clear to relate on his own what he had done in January and that he was still certain that it was what he wanted to do. [ 10 ] Mr. Brochu continued to live independently until he suffered a stroke sometime between November 2001 and May 2002. Since the stroke Mr. Brochu definitely does not have the mental capacity to handle his own personal affairs or property affairs and two doctors have testified to this fact. Mr. Brochu now resides in an Arborfield special care home. [ 11 ] In an affidavit sworn before an independent lawyer on October 2, 2001, Mr.

Brochu acknowledged that he did have some memory problems but went on to state “with help of friends, the Credit Union staff and the home care workers I feel that I can live on my own for some period of time, and when I am unable to do so my friend Ernest Edwards and Mervin Edwards will assist me in moving into a care home”. Mr. Brochu concluded this affidavit by stating in para. 16: I categorically state that I wish Mervin Edwards to be and remain my Power of Attorney from now until the time of my death.

If someone is to be appointed my personal care guardian I wish that person to be either Ernest Edwards or Mervin Edwards. [ 12 ] The estate of Mr. Brochu is valued at approximately one million dollars. Under the only will that has been produced in these proceedings and is dated December 16, 1992, the applicant Ms. Marienhoff is the sole beneficiary of the estate of Mr. Brochu. [ 13 ] Ms. Marienhoff states that the $30,000.00 gift made to Ernest Edwards was totally out of character for their father based on her knowledge of his parsimonious nature throughout his lifetime.

This gift forms part of the evidence the applicants rely on for their position that in January 2001 Mr. Brochu lacked the mental capacity to grant a power of attorney. There is considerably more evidence referred to in the various affidavits filed in this application with respect to Mr. Brochu’s mental capacity in the month of January 2001, which will not be reviewed herein, as I have concluded that if this issue of his mental capacity in January 2001 is to be pursued, the trial of an issue will be necessary. Applicable Legislation The Powers of Attorney Act, 1996 , S.S. 1996, c.

P-20.2 [ 14 ] The first Powers of Attorney Act enacted in Saskatchewan was S.S. 1982-83, c. P-20.1 .

Section 3 of the Act changed the position at common law by providing that a power of attorney would not be terminated by reason only of the subsequent mental infirmity of the donor. This Act was replaced by The Powers of Attorney Act, 1996 , S.S. 1996, c. P-20.2 .

Section 3 of this Act states: 3 The authority of an attorney given by a written power of attorney is not terminated by reason only of subsequent mental infirmity of the donor that would but for this Act terminate the authority if the power of attorney: (

a) provides that the authority is to continue notwithstanding any mental infirmity; and

(

b) is signed by the donor and a witness, other than the attorney or the spouse of the attorney, to the signature of the donor. [ 15 ] The power of attorney granted by Mr. Brochu to the respondent, Mervin Edwards, was executed on January 16, 2001 and was witnessed by an independent lawyer. This power of attorney does qualify under s. 3 of The Powers of Attorney Act, 1996 as an enduring power of attorney.

Clause 8 states: My attorney shall in addition have all the powers as contemplated under The Power of Attorney Act in accordance with the said Act , I declare that the power and authority of my attorney is to continue notwithstanding any subsequent mental infirmity on my part. [Emphasis in original] [ 16 ] With respect to termination of the power of attorney, the only provision in The Powers of Attorney Act, 1996 that addresses the issue is s. 4 which states: Subject to

section 2, the authority of an attorney under a power of attorney mentioned in

section 3 terminates on the appointment of a committee. The term “committee” is a historical term left over from the common law and The Mentally Disordered Persons Act before the

section in that Act which contained the term was repealed by s. 52 of The Dependant Adults Act , S.S. 1989-90, c. D-25.1 . The Adult Guardianship and Co-decision-making Act , S.S. 2000, c. A-5.3 (the “ Act ”) [ 17 ] The Adult Guardianship and Co-decision-making Act , supra , in s. 52 states: Unless the court otherwise orders, an order appointing a property decision-maker prevails over the terms of a power of attorney given by the adult. There are no other provisions in the Act that refer to powers of attorney. [ 18 ]

Section 3 of the Act sets out the principles which shall be used in interpreting and administering the Act .

Section 3 states as follows: 3 This Act shall be interpreted and administered in accordance with the following principles: (

a) adults are entitled to have their best interests given paramount consideration; (

b) adults are entitled to be presumed to have capacity, unless the contrary is demonstrated; (

c) adults are entitled to choose the manner in which they live and to accept or refuse support, assistance or protection, as long as they do not harm themselves or others and have the capacity to make decisions about those matters; (

d) adults are entitled to receive the most effective, but the least restrictive and intrusive, form of support, assistance or protection, when they are unable to care for themselves or their estates;

(

e) adults who have difficulty communicating because of physical or mental disabilities are entitled to communicate by any means that enables them to be understood; (

f) adults are entitled to be informed about and, to the best of their ability, participate in, decisions affecting them. It will be observed that s. 3 (

c) emphasizes the right of adults to choose the manner in which they live and to accept or refuse assistance or protection as long as they have capacity to make decisions, and in s. 3 (

d) adults are entitled to the least restrictive and intrusive forms of support, assistance and protection when they are unable to care for their estates. [ 19 ]

Section 33 of the Act sets out the onus on a party seeking to become a property guardian for an adult where there is opposition to the appointment in the form of a statement of objection. Section 33(2) states: At the hearing mentioned in subsection (1), the onus is on the applicant to prove, on the balance of probabilities, that the adult is in need of a property co-decision-maker or property guardian. Bill 24 of 2002 Entitled “An Act Respecting Powers of Attorney” [ 20 ] Bill 24 of 2002 which was assented to yesterday, April 1, 2003 replaces The Powers of Attorney Act, 1996 , supra .

Section 19 of Bill 24 contains much more detailed provisions on when the authority of an attorney under an enduring power of attorney is terminated.

Section 19(

g) states the authority of the attorney is terminated: (

g) on the appointment of a property decision-maker for the grantor or an attorney under The Adult Guardianship and Co-decision- making Act or The Public Trustee Act ; Section 19(2) also provides: If the court is satisfied on the application of any interested person that an attorney has abused his or her authority under an enduring power of attorney, the court may direct that the attorney’s authority under the enduring power of attorney be terminated.

Analysis In what circumstances is it appropriate to appoint a property guardian under the Act , when the adult has granted an enduring power of attorney to a third party? [ 21 ] In Re Hammond (1999), 1999 CanLII 19754 (NL SC) , 173 Nfld. & P.E.I.R. 240 ; (1999), 25 E.T.R. (2d) 188 (Nfld. S.C.T.D.), Hickman C.J.T.D. after reviewing certain provisions in the text Mental Disability and the Law in Canada , 2nd ed., by Gerald R.

Robertson stated at para. 29-31: [29] It is noted that the Newfoundland Act is silent on the effect of the appointment of a property guardian where an enduring power of attorney exists. [30] It is clear from the Enduring Power of Attorney Act and the

interpretation of similar legislation by courts in other provinces that deference must be given to the clear wishes of a donor who, when mentally competent, appointed a donee under an enduring power of attorney.

[31] There must be strong and compelling evidence of misconduct or neglect on the part of a donee duly appointed under an enduring power of attorney before a court should ignore the clear wishes of the donor and terminate such power of attorney. [ 22 ] Three Ontario cases arrive at the same conclusion as Hickman C.J.T.D., supra , in emphasizing that where a valid general power of attorney exists in favour of one party, it is not appropriate to replace that party with a property guardian. ( Vide : Axler v. Axler (1993), 50 E.T.R. 93 (Ont. Q.B.) ; O’Connor v.

Mulville (1997), 42 O.T.C. 360 ; (1997), 20 E.T.R. (2d) 171 (Ont. Q.B.) ; and McGoey v. Wedd (1999), 28 E.T.R. (2d) 236 (Ont. S.C.) ). It is interesting to note that s. 16(2) (

b) of the Substitute Decisions Act , 1992, S.O. 1992, c. 30 states that any person requesting an assessment be performed of another person who they believe is incapable of managing property, must state he or she “has made reasonable inquiries and has no knowledge of the existence of any attorney under a continuing power of attorney that gives the attorney authority over all of the person’s property”. [ 23 ] I agree with counsel for the respondent power of attorney holder, that if an enduring power of attorney was validly executed by a donor who had the mental capacity to do so at the time the power of attorney was granted, then it would be extremely difficult for any applicant under the Act to satisfy the requirements of s. 33(2) quoted supra which requires the applicant to show proof on the balance of probabilities that the adult is in need of a property co-decision-maker or property guardian unless it can be demonstrated the power of attorney has misbehaved or not acted appropriately in certain respects in exercising the power of attorney as contemplated in s. 19(2) of Bill 24 of 2002 quoted above. [ 24 ] There is no evidence tendered in this matter by the applicants that the respondent has behaved inappropriately or abused the power of attorney he holds in any respect since being appointed.

The applicants ask this court to draw an inference that the $30,000.00 gift made by Mr. Brochu to the respondent’s father one day prior to the respondent being appointed power of attorney implicates the respondent in inappropriate behaviour. There is no direct or indirect evidence supporting the drawing of such an inference. Did Mr. Brochu have the capacity to appoint the respondent his power of attorney? [ 25 ] As noted above, the evidence on the mental capacity of Mr.

Brochu at the time he executed the power of attorney in favour of the respondent herein, is mixed, and it is not possible to decide the matter on the basis of the affidavit evidence filed.

Section 3 (

b) of the Act quoted supra indicates that adults are entitled to be presumed to have capacity, unless the contrary is demonstrated. The applicants did file affidavits by two general practitioners who assessed Mr. Brochu on March 6 and March 14, 2001. Each of these affidavits noted marked cognitive impairment, and his functional activities score was 26 on a scale of 30 indicating poor function. One doctor, Dr. Mimi Weldon, noted in her report in para. 4 the following: . . .I found that:

a) He was cooperative, but admitted to having difficulty coping on his own. He stated that he did well with the help he currently receives from a friend.

b) He appeared frail but not neglected, and his behavior was appropriate.

c) He seemed slightly anxious throughout the consultation.

d) I observed no perceptual disturbances during the visit, and there was no clouding of consciousness.

e) His perception of time was distorted but normal to place and person.

f) His short term memory, concentration, attention, writing and construction were all impaired, but he seemed to have insight to his problems. Both doctors were of the opinion that Mr. Brochu was not competent to adequately care for himself in his own residence, to manage his

financial affairs, and to make decisions as to what should happen with himself in the future. [ 26 ] The foregoing evidence is to be contrasted with that provided by Mr. Edwards in his affidavit some of which was referred to earlier herein, the affidavit of the Credit Union person who questioned Mr. Brochu with respect to his desire to gift $30,000.00 to Mr. Ernest Edwards, and Mr. Brochu’s own affidavit sworn October 2, 2001 in which he stated: 2. That I realize that I have some memory problems but I am caring for myself most of the time.

I have the assistance of my small town Credit Union to help me with my cheques and bills and I have a substantial assistance from my friend Ernest Edwards. In this same affidavit he states: 9. I recognize my memory limits and I seek help either from my records or my friends or the Credit Union staff. 10. I take care of myself mostly including shaving, using the washroom and dressing. This affidavit was witnessed by an independent lawyer who presumably was satisfied on Mr.

Brochu’s mental capacity to swear the affidavit. [ 27 ] Based on the foregoing I consider it appropriate to order the trial of an issue on whether Mr. Brochu had the mental capacity to legally grant a power of attorney to the respondent on January 16, 2001. As s. 3(

b) of the Act referred to supra presumes Mr. Brochu did have capacity until the contrary is established, the burden of proof on the balance of probabilities will rest with the applicants. The parties are entitled to examine each other for discovery and the disclosure rules contained in the Rules of Court apply to the trial of this issue.

May a power of attorney be collaterally attacked in an application brought under the Act ? [ 28 ] In view of the history of this matter which commenced back in the month of March 2001 and was delayed for a number of reasons which need not be described, I do not consider it appropriate in this case to require the applicants to bring a separate application in which they challenge the respondent’s power of attorney. However, for future reference, it does appear that such a separate application is the appropriate practice where the capacity of the person to grant the power of attorney is the issue.

Such an application may be brought coincidentally with an application under the Act . The Act itself does not contain provisions for collaterally attacking a pre- existing power of attorney. Bill 24 of 2002 referred to above in s. 4 states that only an adult who has the capacity to understand the nature and effect of an enduring power of attorney may grant the same, and s. 19 goes on to state when such a power of attorney may be terminated. In the future it would seem appropriate that a separate application be brought under The Powers of Attorney Act to have the validity of the power of attorney determined.

Section 20 of Bill 24 seems to contemplate such a procedure wherein it states: “[t]he Public Trustee or any other interested person may apply to the court for advice or directions with respect to an enduring power of attorney.” Decision [ 29 ] The applicants’ application would have been successful before me, but for the fact the applicants have not met the burden outlined in s. 33(2) of the Act that Mr. Brochu is in need of a property guardian. The enduring power of attorney granted to the respondent empowers him to manage Mr.

Brochu’s property, and there is no evidence that he has abused this power of attorney within the meaning of s. 19(2) of the Act . However, because the trial of an issue has been ordered with respect to the capacity of Mr.

Brochu to have granted the power of attorney on January 16, 2001, this application is adjourned to the trial judge who will hear the trial of the issue ordered, and who may consider matters in a comprehensive manner following his or her decision on the trial of the issue. [ 30 ] In view of the fact there could be some delay before the trial of an issue is heard and determined, and in view of the fact the respondent has been operating under a power of attorney for in excess of two years, it is appropriate to order the respondent within 60 days to provide an accounting to the Public Trustee of his administration of the estate of Mr.

Brochu since January 16, 2001. In fairness to the respondent he has consented to such an accounting. The cost of the accounting shall be a charge against the estate of Mr. Brochu. A copy of the report issued to the Public Trustee is to be made available to the applicants herein.

[ 31 ] I consider it appropriate to order that the solicitor/client costs of the applicants and the respondent herein up to a maximum of $2,500.00 be paid by the estate of Mr. Brochu. The point in issue has not previously been litigated in this province and both parties acted in good faith and in what they believe are the interests of Mr. Brochu in bringing and defending the application. [ 32 ] Order accordingly. J.