Power of Attorney Abuse

The Superior Court of Justice has reminded us that people caring for their aging parents need to remember that no matter how well meaning they may intend to be, the money manage is strictly for the welfare of their parents and not themselves. 

In the case of Osmulski Estate v. Osmulski, 2014 ONSC 6370 (November 3, 2014), Justice Fitzpatrick, considering the Ontario Substitute Decisions Act, S.O. 1992, c. 30, specifically those parts dealing with Accounts of Records of Attorneys and Guardians, found at O. Reg. 100/96 found during a passing of accounts that a guardian of property had breached trust and his fiduciary duty by claiming excessive compensation. 

The applicant, the court appointed guardian of property and personal care for his mother, applied to the court to pass his accounts.  Things obviously did not go as he expected.  The trial judge held that he failed in his fiduciary duty by failing to maximize the return to his mother on the sale of her most significant asset, her home. He also helped himself to the proceeds of the sale of her home and treated her funds as his own personal funds, and breached the trust required in this role. 

Although his mother was properly cared for during the term of his guardianship, the court found that this did entitle him to some level of compensation for his efforts. However, his mismanagement of her property disentitled him to claim any amount greater than that provided by strictly applying the statutory percentages to the various transactions and capital under management at issue. 

The son’s wife had claimed compensation for personal care services and bookkeeping but the trial judge held that she did nothing of value for the estate and that those payments were taken by the son for his own use and simply characterized as payments to his wife to attempt to lessen the scrutiny to be applied to his accounts. 

As a result, in addition to vitiating her compensation, the court slashed his to about one third of that claimed, from $74,289.47 down to $25, 501.84 and ordered him to repay the difference of $48,787.63.

David van der Woerd is a partner at Ross & McBride LLP, practising in the Estates Law Group and the Charity Law Group.  He is also a Deputy Judge in Superior Court, Small Claims Court.
David van der Woerd
David van der Woerd
P: 905.572.5803