Plaintiff's brother breached his fiduciary duties under a power of attorney
The BC Supreme Court has ruled in favour of a plaintiff in her claim against her brother regarding misappropriating their late mother's funds.
In Calvert v Menzies, 2024 BCSC 1302, the plaintiff alleged that her brother used their mother’s money for his benefit, detrimentally impacting the estate and her interests as a beneficiary. The mother and her husband bought a ten-acre property in Maple Ridge in the 1950s. The husband, who passed away in 2010, left the estate, primarily consisting of this property, to his wife. The mother died in July 2018, leading to heightened disputes between the siblings.
The property, significantly increasing in value over the years, was sold for $2.9 million in 2017. Before the mother's death, the brother had taken over her financial matters, following allegations by him that the plaintiff had misappropriated their parents' funds while holding a joint power of attorney (POA). The mother subsequently revoked the POA from the plaintiff and their sister, granting it to the brother. Additionally, the brother was added as a joint account holder on the mother’s bank accounts.
After the mother's death, the brother attempted to remove the plaintiff as a co-executor of the estate, leading to reciprocal legal actions. Ultimately, the court appointed Solus Trust as a joint executor alongside the plaintiff, removing the brother from this role.
The plaintiff sought damages for breach of trust, breach of fiduciary duty, and conversion, along with the return of misappropriated funds to the mother’s estate. She also claimed punitive and aggravated damages. The brother denied all allegations and counterclaimed that the plaintiff had misappropriated funds and exercised undue influence over the mother.
The Supreme Court found significant challenges in resolving the issues due to the poor memories of key witnesses and a lack of reliable records. Additionally, the court pointed out that poorly drafted pleadings complicated the determination of the legal claims being advanced. The court noted discrepancies and inconsistencies in the testimonies of both parties, particularly regarding financial transactions and the alleged misappropriation of funds.
The court concluded that the brother breached his fiduciary duties under the POA by failing to maintain proper records and not managing the mother’s finances in her best interests. The court also found that he exerted undue influence over the mother concerning a $290,000 deposit from the property sale, which he claimed was a gift to him.
Regarding the financial discrepancies, the court highlighted the lack of credible evidence supporting the brother’s claims of depositing his money into the mother’s accounts or repaying personal expenses charged to her accounts. The court emphasized that the burden of proof rested on the brother to show that the expenditures were for the mother’s benefit, which he failed to do.
