Rogue Attorneys Must Account for Their Discretions

It is often the case that a loved one will become incapable of managing their finances and will require someone to step in and act on their behalf. This is where a continuing power of attorney for property can come into play. A continuing power of attorney for property is a document which grants authority to the chosen attorney to manage the assets of the person, referred to as the grantor. It is made while the person is mentally competent and remains effective through incompetency. The Substitute Decisions Act, 1992, S.O. 1992, c. 30 sets out legal framework for this document. 

Section 8 of the SDA states that a grantor must be able to appreciate the possibility that the attorney could misuse the authority given to him or her when giving the continuing power of attorney. This is because revoking the continuing power of attorney requires the grantor to have capacity. Revoking can range from quite easy, to difficult or even impossible depending on the grantor’s condition. 

The attorney has a fiduciary relationship with the grantor which requires them to act in the grantor’s best interest. But what happens when an attorney breaches this duty? And what can someone who suspects their loved one’s assets are being misused do? 

If you are not your loved one’s chosen attorney for property, you may not be privy to their financial information. This does not mean you cannot advocate for them. One method of accountability which an interested party can use to their advantage is to apply for a passing of accounts. 

The attorney is required by section 42 of the SDA to account for all transactions. All actions the attorney takes involving the grantors assets must be recorded. Any person, with leave of the court, may bring an application for a passing of accounts. If the attorney fails to pass the accounts or assets have been misappropriated, the attorney can face liability, even personal liability. The Court can order the asset to be returned or compensated for by the attorney. 

Section 7(4) of the SDA requires joint attorneys to act, as the name suggests, jointly. This means they must make decisions together, just  as they face liability together. If you are a joint attorney who suspects the other attorney is acting without your knowledge or consent, you should contact a lawyer immediately. You could face legal consequences for the actions taken by a joint attorney regardless of your awareness. 

If you find yourself in similar circumstances, contact us to discuss how we can help you.