In the recent Ontario Superior Court’s decision of James v James, 2024 ONSC 3916 (“James v James”), the Court highlighted that a foolish decision by an elder person is insufficient evidence that the elder person is incapacitated and unable to make financial and personal decisions for themselves.
In James v James, the Applicant, Jennifer James (“Jennifer”), was the daughter of Carol James (“Carol”), who was 79 years of age and had a net worth of $11 million. Jennifer was named as the executor of Carol’s estate pursuant to a Primary and Secondary Will and was also the named Carol’s Attorney under a Power of Attorney.
Jennifer had concerns regarding Carol’s capacity given certain decisions that she was making, so Jennifer applied for an interim injunction to preserve Carol’s assets pending the determination of a guardianship application. Jennifer’s concerns regarding Carol’s capacity started when Carol developed a relationship with Gideon Amofa (“Gideon”), who was 31 years of age at the time. This was because, as their relationship developed, the close relationship that Carol had with her children began to dwindle.
Further, and in April of 2024, Carol told her other daughter, Lesley, that she was thinking about purchasing a second home in Florida for $899,000.00 USD. Following this, Carol asked her financial advisor for $1 million USD after making an offer on a home and, in April 2024, Carol asked her financial advisor for $280,000.00 USD for a pool. At that point, Carols family did not trust this decision given that the house she was trying to buy was in an isolated area, it was not in a gated community, and they knew that Carol did not like pools. Further, the financial advisor indicated that Carol was unable to provide adequate explanation for why she needed all the money immediately and refused to speak to the advisor without Gideon present. In addition to this, the Applicant was advised by Carol’s neighbour that Carol was desperate for a man and would offer wine to almost any man that came to her door. Last, at the end of April 2024, Gideon and Carol got married, but in May 2024, it was determined that Gideon had a girlfriend.
Jennifer commenced legal proceedings in Florida and in Ontario, and the focus of this article will be on the legal proceedings in Ontario. On April 29, 2024, Jennifer filed a Notice of Application in Ontario seeking an Order declaring Carol incapable of managing her property, incapable of making personal decisions, and appointing Jennifer as her guardian. Further, Jennifer sought an Order restraining Carol from transferring, assigning, or encumbering any of her homes.
The Application was heard on an ex parte basis and the judge granted an Interim Order freezing Carols assets in Ontario. However, the Court refused to grant an extension of the interim Order, so the Order was not extended past the time allotted in the Interim Order.
As a result, on May 31, 2024, Jennifer brought an urgent motion that was heard on June 3, 2024, and is the subject of James v James. As in previous applications, Jennifer was seeking guardianship of Carol. The issues on the Application were whether Carol lacked capacity and whether there was evidence of undue influence. Justice Faieta relied on Abrams v Abrams, 2008 CanLII 67884, which highlights that there is a presumption of capacity, that the alleged incapable person is entitled to notice, that the court should take the least restrictive route on the persons decision-making, and that the court should consider the wishes of the incapable person. The test for capacity was summarized in F.L. v Oliver, 2024 ONSC 478, which reiterated the Supreme Court of Canadas decision in Starson v Swayze, 2003 SCC 32. Both decisions confirm the two elements for capacity which are that:
At Paragraph 87 of F.L. v Oliver, 2024 ONSC 478, the Court addresses how a foolish decision is interpreted with regards to capacity:
An incapacity assessment is based solely on the person's capacity, and a consideration of what might be in the best interests of the person alleged to be incapable of managing his or her property is not a relevant consideration. A competent person is not incompetent because he or she makes decisions that a reasonable person would consider foolish or not in the person's best interests.
As such, if someone has capacity, they can freely make foolish decisions without intervention. In terms of assessing capacity, Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73, confirmed that the onus is on the party that is alleging the lack of capacity and is decided based on medical evidence by someone who is duly qualified. Royal Trust Corporation of Canada v. Haddad, 2023 ONSC 5637, reiterated that while the court can determine if someone is incapable, the biggest weight in its consideration is the medical evidence.
As of the most recent decision, Palichuk v Palichuk, 2023 ONCA 116, where a 90-year-old mother disinherited her daughter and signed a new Power of Attorney appointing her other daughter, the court said that the question of undue influence has not been dealt with while the grantor was alive and capable and that there was nothing that would suggest expanding the law at the time.
Jennifer did not provide a capacity assessment or any medical evidence pursuant to Section 6 and 45 of the Substitute Decisions Act, 1992, SO 1992, c 30. Jennifer’s concerns were all centered around the reasonableness of Carol’s decisions and not on her ability to understand the relevant information to make decisions about her property and her personal care. In addition to this, none of the concerns listed by Jennifer demonstrated that Carol was not able to appreciate the foreseeable consequences of her decision or lack of.
In terms of undue influence, Carol had capacity and as such, she was the only person who could assert if she was being unduly influenced in relation to transactions she made. As a result, Jennifer’s motion was dismissed.
In conclusion, James v James highlights how in Canadian common law, although someone’s behaviour may be foolish, it does not mean that they lack capacity to make decisions for themselves, and a foolish decision is not basis enough to assert that someone lacks capacity.
Author:
Zoe M. Rossier - Student at Law