Zeligs v Janes, 2015
Your Attorney’s Duty in a Power of Attorney
In this case, Barbara Zeligs brought an action against her sister, Diana Janes, who breached her fiduciary duty as an Attorney to their mother, Dorothy.1 Barbara claims that Diana severed the joint tenancy with Dorothy when she used proceeds from the sale of her mother’s house for her own use.
In her Will, Dorothy intended for her daughters, Barbara and Diana, to share the residue of the estate equally. In 2001, Dorothy appointed Diana as her attorney after she moved into her mother’s home. The following year, Diana became a joint tenant with her mother. The main benefit of joint ownership is that the surviving owner gets full ownership of the property on the other owner’s death. Whereas, in a tenancy in common, each person’s share of the property remains with her estate.
Diana granted mortgages, between 2006 and 2009, on the home for her benefit. The following year, Diana used an enduring power of attorney to sell the property for $2.7 million after her mother had lost capacity. Diana deposited about $1,790,000 into a bank account held jointly with her mother. She withdrew approximately $708,000.00 that same day to buy a home in Delta, B.C., that she owned as joint tenants with her husband. She also made a withdrawal of $800,000 from the bank for her benefit.
Justice Steeves found that Diana severed the joint tenancy when she withdrew the sale proceeds from the bank. Diana failed to meet her fiduciary obligations as an attorney when she granted the mortgages for her benefit alone and not for Dorothy. He reasoned that when a donor loses capacity, there is a heightened duty to act in that person’s best interest. He found that the equity of exoneration applies, and therefore Diana must indemnify Dorothy’s estate. Finally, Justice Steeves ruled that Diana must return $832,643.56 to Dorothy’s estate, in addition to any amounts decided upon in a previous judgement from 2015.
Notes:
1 The action was brought by the husband of Barbara Zeligs, who was deceased, on her behalf.