When capacity is challenged the challenger must rebut the presumption of capacity with evidence. The evidence must support a finding that, on a balance of probabilities, the person was incapable when the decision was made or the task performed. In Perriam v. Pereira, 2026 ONSC 3180 (“Perriam”), the questions before the court were whether the grantor was capable when he executed a power of attorney for property (the “POA”), and if the attorney for property should formally pass his accounts. After considering the available evidence the court determined it was insufficient evidence to support a finding that the grantor was incapable. However, despite that finding, the court ordered the attorney for property to formally pass his accounts from the date the POA was executed to the grantor’s death.
The application was commenced in 2023 by a daughter challenging the validity of the POA executed by her dad in 2012. Dad appointed his son alone, without an alternate. The POA was signed 13 years after dad suffered a stroke which left him disabled, unable to work, and heavily reliant on family members, including his daughter. The POA was executed after the son lost his home and moved in with dad, together with the son’s partner and her children. No rent by the son or his partner was ever paid. The daughter alleged financial abuse, that dad was incapable when he signed the POA, and was vulnerable to undue influence. The daughter alleged that shortly after the son moved in he began to isolate dad from the other family members, including changing the locks to dad’s house. The son had a different version of events: dad wanted his daughter removed from the POA because dad found her controlling. The estrangement between dad and his three daughters was not due to the son’s involvement but was what dad wanted.
In 2022 dad moved into long-term care. The daughter learned that dad barely had enough money to cover his expenses and that the daughter had been removed from dad’s joint accounts. It was discovered that since 2012 dad’s money was spent on significant renovations to his house and on expensive leases for the son’s new trucks. Unexplained cash withdrawals were also identified by the daughter, among other questionable transactions. The renovations included a new driveway, roof, flooring, pool, hot tubs, and a sprinkler system. The son asserted that many expenditures by dad were gifts, the renovations had dad’s consent, and the house is left to the son in any event. The son also asserted that the daughter had no standing to seek a passing of accounts given that dad was capable for many years and the son was not acting pursuant to the POA. The son also alleged that the daughter sought a formal passing of accounts for tactical reasons, given that the estate was modest (other than the house), the costs of a passing were disproportionate to the size of the estate.
The court considered the evidence led by the daughter but also noted where the evidence was lacking. The daughter and other family members swore affidavits about the events leading up to 2023, particularly the alleged isolation of dad. They also gave evidence about the son’s poor character and past dishonest acts. The court found that the evidence against the son’s character to be largely hearsay and irrelevant to the issues before the court. What the applicant required was contemporaneous evidence from 2012 when the POA was signed by dad.
The POA was prepared by a lawyer who also prepared dad’s and mom’s mirror wills in 2004. It was not disputed that the son took dad to the appointment with his lawyer. However, the son said it was at his dad’s request and the daughter alleged it was all designed and orchestrated by the son. Regrettably for the applicant, the lawyer who met with dad and prepared the POA was deceased by the time of the application. In addition, the lawyer’s file was unavailable. The applicant did not have any evidence from the lawyer who met with dad. In addition, dad’s medical records were limited and inconclusive. The court acknowledged a medical notation on a disability tax credit from 2012 of limited “mental function”. However, no explanation of the limited mental function was available and the doctor did not give evidence. The court also noted that dad had applied in other years for the disability tax credit but the reasons given were physical disabilities and not due to limitations on perception, thought, memory, or mental function. The next available medical evidence was an opinion in 2022 that dad was in cognitive decline when he went into the nursing home. However, cognitive decline is not determinative of incapacity and the medical opinion was 10 years after the execution of the POA. The lack of contemporaneous evidence from the lawyer and the limited and inconclusive medical records led the court to determine that there was insufficient evidence to find that dad was incapable of signing the POA in 2012. The relief related to challenging the validity of the POA was dismissed.
Turning to the daughter’s request that the son formally pass his accounts, the court acknowledged that many of the expenditures and transactions were, on its face, questionable and seemingly unlikely to benefit dad. The court considered that the daughter did not have a right to request a passing of accounts pursuant to s. 42(4) of the Substitute Decisions Act, 1992, SO 1992, c 30; she required leave of the court. In granting leave, the court found that the daughter had a genuine concern for her dad’s welfare when she commenced the application. In exercising the court’s discretion to order a passing of accounts, the court held that there was “clear and cogent evidence that raises concerns of mismanagement above mere suspicion.” Even though the court did not find that dad was incapable when the POA was signed, the court ordered the passing of accounts to commence from then until dad’s death. The court found that, on the son’s own evidence, he acted as de facto attorney for property and dad was entirely reliant on the son for his banking. The court found that the passing of accounts did not require the son to account for transactions and decisions of which he had no knowledge or involvement.
