Ontario Court Invalidates Power of Attorney and Caregiver Contract, Protecting Vulnerable Widow from Exploitation

How does the court balance the protection of a vulnerable individual’s autonomy with the prevention of exploitation by caregivers in the context of powers of attorney and contractual agreements?

Ontario Court Invalidates Power of Attorney and Caregiver Contract, Protecting Vulnerable Widow from Exploitation

In BMO Trust Company v. Aubin, 2025 ONSC 2298, decided on April 14, 2025, the Ontario Superior Court of Justice confronted critical issues surrounding the protection of Patricia Roper, an 82-year-old widow with cognitive impairments, from potential exploitation by her caregiver, Lee Aubin. The case, initiated by BMO Trust Company as Roper’s guardian of property, centered on the validity of a 2021 power of attorney for personal care appointing Aubin, executed under suspicious circumstances amid Roper’s documented cognitive decline; Aubin’s eligibility to act as attorney given her role as a compensated caregiver under the Substitute Decisions Act, 1992; and the enforceability of a services agreement with Seniors Total Care Inc., which raised concerns of unconscionability and Roper’s contractual capacity. The court ruled decisively in favor of the applicant, terminating the powers of attorney, voiding the services agreement, and ordering substantial indemnity costs against Aubin for her reprehensible conduct, underscoring the delicate balance between preserving a vulnerable individual’s autonomy and safeguarding them from undue influence and financial harm.

The Parties

• • Applicant: BMO Trust Company, appointed guardian of property for Patricia Roper on February 2, 2023.
  • Respondent: Lee Aubin, Business Development Manager and Primary Care Coordinator at STC, who provided caregiving services to Roper.
• Patricia Roper’s Condition: Diagnosed with multiple myeloma in 2018, Roper exhibited cognitive decline by 2020, including paranoia and delusions. She was involuntarily admitted to Kingston General Hospital in July 2020 under the *Mental Health Act, RSO 1990, c M.7*. A 2022 capacity assessment by Shauna MacEachern confirmed Roper’s incapacity to manage property or grant/revoke powers of attorney, though she retained capacity for personal care decisions.
• Aubin’s Involvement: Aubin began providing caregiving services to Roper in August 2020 through Seniors for Seniors, later transitioning to STC, incorporated by her common-law spouse, Ken Foster, on March 31, 2021. On March 11, 2021, Roper signed a services agreement with STC. On August 12, 2021, Aubin facilitated the execution of powers of attorney for personal care and property, naming herself as attorney, using forms downloaded from the internet.

Disputed Actions:

• • The 2021 powers of attorney were executed under suspicious circumstances, with Aubin’s parents as witnesses, despite Roper’s existing attorney, Christopher Williams.
  • STC claimed $194,440.32 for services by May 2023, but the services agreement lacked a clear fee schedule and was signed when Roper’s capacity was questionable.
  • Concerns arose about undue influence, financial impropriety, and mail tampering, prompting investigations by the Public Guardian and Trustee (PGT) and Roper’s bank, RBC, which froze her accounts.
• Procedural History: The PGT initiated proceedings, leading to its temporary appointment as Roper’s guardian on November 3, 2022, followed by BMO Trust Company’s permanent appointment. The court heard the case on December 23, 2024, and January 3, 2025.

The Law and Analysis

The court’s decision rested on provisions of the *Substitute Decisions Act, 1992, SO 1992, c 30* and common law principles concerning capacity, undue influence, and unconscionability. Below is an analysis of the legal issues:

• Validity of the 2021 Power of Attorney for Personal Care:
  • Statutory Prohibition (Section 46(3)):
    • This section prohibits individuals providing compensated health care or support services from acting as attorneys for personal care unless they are the grantor’s spouse, partner, or relative. Aubin, through STC, provided such services, and STC’s revenue benefited her indirectly via her partner, Foster. The court held that this conflict disqualified Aubin from acting as attorney, rendering the 2021 power of attorney ineffective from its execution.
  • Capacity (Section 7):
    • Section 7 presumes capacity to grant powers of attorney, but this presumption is rebutted by evidence of incapacity. Roper’s 2020 hospitalization, documented paranoia, and 2022 capacity assessment indicated she lacked capacity by August 2021. The court, citing *Hollinger v. Marshall, 2024 ONSC 404*, found that Roper’s delusions and cognitive decline likely prevented her from understanding the implications of appointing Aubin.
  • Undue Influence:
    • The court applied the doctrine of suspicious circumstances from *Vout v. Hay, 1995 CanLII 105 (SCC)*, which shifts the burden to the grantee (Aubin) to prove no undue influence when circumstances suggest coercion, fraud, or incapacity. Aubin’s actions—downloading forms, filling them out, and having them signed at her parents’ home, despite knowing Roper’s existing attorney—raised suspicions. The court found Aubin failed to rebut the presumption of undue influence, further supported by the questionable timing of the document’s production, suggesting possible antedating to circumvent the 2022 capacity assessment.
• Termination of Power of Attorney:
  • Given the findings of statutory disqualification, lack of capacity, and undue influence, the court terminated the 2021 power of attorney under its authority to protect Roper’s interests, as per section 66(10) of the Substitute Decisions Act, 1992.
• Liability Under the STC Services Agreement:
  • Capacity to Contract (Section 2(3)):
    • This section allows contracts to be voided if one party knew or should have known of the other’s incapacity. Aubin, having worked with Roper since August 2020, was likely aware of her cognitive issues by March 2021. The court, referencing *Lougheed v. Ponomareva, 2013 ONSC 4347* and *Grant v. Imperial Trust Co., 1935 CanLII 335 (SCC)*, held that the services agreement was void due to Roper’s incapacity.
  • Unconscionability:
    • The court applied the test from *Uber Technologies Inc. v. Heller, 2020 SCC 16*, requiring an inequality of bargaining power and an improvident bargain. Roper’s dependence on Aubin’s services, the agreement’s lack of a clear fee schedule, and the inclusion of a pre-authorized debit form created an unconscionable contract. The court voided the agreement, noting the significant financial benefit to STC and Aubin’s role in its formation.
  • Quantum Meruit:
    • While the agreement was void, the court noted that STC could pursue a quantum meruit claim for services reasonably provided, subject to limitation defenses under the *Limitations Act, 2002, SO 2002, c 24, Sch B* (e.g., claims for services over two years old may be barred).
• Costs:
  • The court awarded substantial indemnity costs of $45,000 against Aubin, citing her “reprehensible and outrageous” conduct, including breaching section 46(3), exerting undue influence, and contracting with an incapable person. This aligns with principles that substantial indemnity costs are warranted for egregious litigation or pre-litigation conduct, as discussed in cases like *Davies v. Clarington (Municipality), 2009 ONCA 722*.

Lessons Learned

• Safeguarding Vulnerable Individuals:
  • The case highlights the robust protections under the *Substitute Decisions Act, 1992* for incapable individuals. Courts prioritize evidence of incapacity and undue influence, especially when caregivers exploit vulnerabilities, ensuring fiduciary duties are upheld.
• Conflicts of Interest in Caregiving:
  • Section 46(3) strictly prohibits compensated caregivers from acting as attorneys unless closely related to the grantor. This prevents conflicts where financial gain could compromise care, as seen with Aubin’s indirect benefit through STC.
• Importance of Capacity Assessments:
  • Timely and thorough capacity assessments, like those conducted in 2022, are critical in guardianship disputes. They provide objective evidence to rebut the presumption of capacity under section 7, protecting individuals from exploitation.
• Scrutiny of Contracts with Vulnerable Parties:
  • Contracts involving incapable or dependent individuals require clear terms and equitable bargaining power. The unconscionability finding underscores the need for transparency and fairness, as per *Uber Technologies Inc. v. Heller*.
• Consequences of Reprehensible Conduct:
  • Aubin’s actions led to substantial indemnity costs, emphasizing that courts will penalize conduct that undermines fiduciary duties or prolongs litigation unnecessarily. Litigants must act in good faith to avoid such penalties.
• Quantum Meruit as a Remedy:
  • Even when contracts are voided, service providers may seek quantum meruit for reasonable services, but they must provide credible evidence and act within limitation periods, as governed by the *Limitations Act, 2002*.

Conclusion

*BMO Trust Company v. Aubin* reinforces the legal framework protecting incapable individuals from exploitation, emphasizing statutory prohibitions, capacity assessments, and equitable contract principles. The court’s decision to terminate the power of attorney, void the services agreement, and award substantial costs reflects a commitment to safeguarding vulnerable persons and deterring misconduct by caregivers.

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