Power of Attorney in Ontario: Lessons from Bellefeuille v. Zinn (2022)

A Power of Attorney (POA) is one of the most commonly used legal documents in Ontario. Many people have either heard of it or signed one themselves. Generally, there are two types:

• Power of Attorney for Property (covering financial and property matters), and
• Power of Attorney for Personal Care (covering health and medical decisions).

By signing a POA, you give another person, called the “attorney”, the authority to make decisions on your behalf. But with this authority comes serious legal responsibility. Failure to respect these responsibilities can lead to personal liability, as illustrated in the Ontario case Bellefeuille v. Zinn, 2022 ONSC 5027.

Case Background: A Family Dispute Over Finances

In this case, two sisters were at the heart of the dispute. Between 2005 and 2018, a period of 13 years, one sister acted as attorney for property under a POA granted by their mother.

The other sister later brought a claim against her, alleging that the attorney had mismanaged and misused their mother’s funds. Specifically, she argued that about $87,000 from their mother’s bank account had been spent on personal items such as furniture, clothing, and several domestic trips, rather than for their mother’s benefit.

The attorney sister defended herself by claiming all expenses were for their mother and that supporting documentation had once existed but was no longer accessible.

The Court’s Analysis: Duties Under the Substitute Decisions Act

The Ontario court examined the matter under the Substitute Decisions Act, which governs powers of attorney in the province. The court emphasized two core duties imposed on every attorney acting under a POA:

1. Duty of Loyalty and Good Faith
   The attorney must act honestly, carefully, and in good faith, always prioritizing the grantor’s best interests.
2. Duty to Keep Records
   The attorney must maintain clear records and supporting documentation of all financial transactions and decisions made on behalf of the grantor.

The court clarified an important principle:

• If an attorney cannot prove how funds were spent, they are personally responsible for reimbursing the amounts in question.
• The burden of proof lies entirely on the attorney, not on the beneficiary, to justify the expenditures.

The Outcome: Accountability for Mismanagement

In Bellefeuille v. Zinn, the court found that the attorney sister had mismanaged her mother’s property and failed to keep proper financial records. As a result, she was held personally liable and ordered to repay $87,000 to account for the funds that were misused for personal benefit.

Key Legal Takeaways

This case provides valuable lessons for anyone acting, or considering acting, as an attorney under a POA:

• Keep Detailed Records: Always document every expenditure, including receipts, invoices, and notes about why the expense was made. Lack of these records can cause significant problems in case of claims against you.
• Act in the Grantor’s Best Interests: Decisions must benefit the grantor, not the attorney or family members.
• Understand the Legal Duties: Attorneys are not only fiduciaries but also subject to legal oversight. Courts will hold them personally accountable for mismanagement.
• Seek Legal Advice When in Doubt: If you are unsure about your responsibilities or whether an expense is appropriate, consult with a lawyer before taking action.

Final Tip

Being named as an attorney under a POA is both an honor and a serious legal duty. If you accept this role, treat it with the same care you would give to managing your own most important affairs, if not more. Otherwise, as this case shows, you may end up facing personal liability.