As an estates and trusts lawyer practicing in Ontario, I review many capacity and fiduciary duty disputes every year. Few cases crystallize the recurring dangers in elder financial matters as sharply as the recent decision of Justice Somji in McGrath v. Effinger et al. This application, brought by a daughter under a continuing power of attorney for property, sought a passing of accounts and restitution of approximately $260,000 from the founders of a small religious retreat where her elderly mother had lived for twelve years. The court dismissed the entire claim on limitation grounds and, alternatively, on the merits. The reasons provide essential guidance for practitioners advising families, religious communities, and informal caregivers.
Overview
Catherine Rozon, aged 65 when she moved to the Canadian Divine Mercy Centre in 2009, lived there voluntarily until 2021. She paid modest monthly boarding fees of $600 rising to $1000, funded renovations to a private cabin, and made additional donations to the non-profit Centre. When her health declined after a cancer recurrence in 2016, the co-founders, Willy and Theresa Effinger, and another resident assisted her with errands, medical transportation, and occasional banking tasks using her debit card, always at her request. In 2021 her daughter retrieved her, and in 2024, acting under a freshly executed continuing power of attorney for property, the daughter launched proceedings alleging misappropriation and seeking a passing of accounts under the Substitute Decisions Act, 1992 and remedies for unjust enrichment.
The court held that Pauline McGrath had standing via the continuing power of attorney, but the claim was statute-barred under the Limitations Act, 2002. Even if timely, no fiduciary duty or trusteeship de son tort arose, and no basis existed for compelling accounts.
The Facts
Catherine arrived at the Centre seeking a contemplative life after surviving breast cancer. She took vows of poverty consistent with the community’s ethos, paid for winterizing and furnishing her own cabin, and contributed voluntarily to communal expenses. Residents, including the Effingers, lived modestly and donated their own pensions to the Centre. When Ms. Rozon’s cancer returned, she asked Theresa Effinger and another sister to hold her debit card and PIN for convenience because noise and travel had become difficult. Cash withdrawals and purchases were made for her medications, many not covered by OHIP, specialty foods, charitable donations, cabin maintenance, and gifts. She reviewed and signed her own tax returns each year. No formal power of attorney or guardianship ever existed in favour of the Effingers. Ms. Rozon executed a continuing power of attorney for property in December 2023 in favour of two daughters only after they sent a demand letter accusing the Effingers of elder abuse.
Crucially, the daughter filed no affidavit from her mother, then 82 and acknowledged to be capable, explaining or challenging any transaction over the twelve-year period. The Effingers and other affiants provided detailed accounts of daily life, confirming all actions were at Ms. Rozon’s direction and for her benefit or the community she chose to support.
The Law
Several statutes and common-law principles intersected in this case. The Substitute Decisions Act, 1992, section 42 permits the court to order a passing of accounts, but only from an attorney or guardian of property, or from someone found to be a trustee de son tort or constructive trustee. The Limitations Act, 2002 imposes a strict two-year limitation period once a claim is discovered. Justice Somji distinguished Armitage v. Salvation Army, 2016 ONCA 971, which held that a pure application by an attorney to pass their own accounts is not a claim attracting limitation. Here, the daughter sought not only a passing but also declarations of trusteeship and monetary restitution for unjust enrichment, and those remedial claims triggered the limitation period.
On trustees de son tort, Ontario courts require clear evidence that a person intermeddled with property in a way that amounts to assuming the role of trustee without authority, as seen in Humphreys-Saude v. Pavao, 2022 ONSC 4982, and Chambers v. Chambers, 2013 ONCA 511. Mere assistance at the request of a capable person does not suffice. The court also has discretion to order accounts even without formal authority, but only where there is genuine interest in welfare and significant concerns about management, per Lewis v. Lewis, 2020 ONCA 56, and Dzelme v. Dzelme, 2018 ONCA 1018.
Analysis
Justice Somji’s decision is unassailable on the evidence presented. The daughter’s case rested almost entirely on bank statements showing withdrawals and expenditures over and above the monthly boarding fee. Yet she offered no direct evidence from the only person who could confirm or deny authorization, her mother. The Effingers and other residents, by contrast, filed detailed, consistent affidavits explaining the purpose of virtually every category of expenditure, all corroborated by the lifestyle Ms. Rozon had chosen. Helping an elderly friend with errands and transactions, even holding a debit card for convenience, did not transform the Effingers into fiduciaries or trustees. The court emphasized that Ms. Rozon remained capable throughout, making her own decisions on residence, treatment, and spending, with no medical evidence to the contrary. Affidavits from long-time friends like Sandra Lalonde reinforced her lucidity and independence.
The limitation point is particularly instructive. Once a family member demands repayment and threatens police involvement, CRA scrutiny, and media exposure, as occurred here in August 2023, discoverability is fixed. Waiting another eleven months to commence proceedings is fatal when restitutionary relief is sought. Even assuming discoverability as late as February 2022 upon reviewing all bank records, the July 2024 filing was out of time. On the merits, the court refused to convert friendly or communal assistance into a fiduciary obligation. The uncontradicted evidence showed actions taken solely at Ms. Rozon’s request, with no personal gain to the Effingers, who themselves lived under vows of poverty. The daughters’ projection of $265,000 in expected savings was unrealistic given Ms. Rozon’s modest pre-2009 balances and lifelong spending habits. No significant erosion or mismanagement was proven, and discretion to order accounts was declined.
Lessons Learned
This case underscores several critical lessons for estates practitioners and families alike. First, when alleging financial impropriety involving a vulnerable elder, secure an affidavit from the elder herself if she remains capable, as her direct evidence is irreplaceable and its absence can doom the claim. Second, distinguish carefully between a pure passing of accounts, which may evade limitations, and broader remedial actions like unjust enrichment claims, which do not. Practitioners must advise clients on discoverability triggers, such as demand letters, to avoid barred proceedings. Third, informal assistance in close-knit communities, whether religious or otherwise, does not automatically create fiduciary duties or trusteeships, provided actions are directed by a capable person and free of fraud. Courts will not impose such obligations retroactively without clear intermeddling. Fourth, document all arrangements, even casual ones, including consents for banking help or donations, to preempt disputes years later. Finally, families concerned about an elder’s living situation should communicate early and directly with caregivers, perhaps seeking capacity assessments if warranted, rather than waiting until after removal to launch aggressive claims. McGrath serves as a reminder that good intentions in caregiving can still lead to costly litigation if not handled with foresight, and it highlights the courts’ reluctance to interfere in voluntary, capable choices. For those advising on powers of attorney or elder care, this decision merits close study to guide proactive planning and avoid similar pitfalls.
