The Proposed Legislative Tool to Curb Financial Elder Abuse


The Proposed Legislative Tool to Curb Financial Elder Abuse

When a power of attorney (“POA”) is granted by an elderly person, onerous requirements are imposed by law upon the grantee. These include provincial laws governing the conduct of the power invariably require strict accounting by the power holder of the funds under administration. Not infrequently, the trust involved is violated as to the use of funds by a POA. The story here displays an example of what is not right with the current system and is followed with an example of what might be done to fix it.  

Matthew1 and his wife Elsie were the local caregivers to Matthew’s aged Mother. Mother Hazel had been previously married and had a son by that earlier marriage. During her active life, Mother Hazel had been at pains to treat her two children similarly in all ways. This elder brother, half-brother of Matthew, lived in a city other than the location of Matthew, Elsie, and Mother Hazel. At the beginning of this story, Mother was in her 80s and the logical person to be granted the enduring POA was Matthew as he resided close to Mother Hazel.

Neither Matthew nor Elsie worked outside the home during Hazel’s later life. Elsie had never been gainfully employed while Matthew, a qualified engineer, did have employment in the aircraft industry for a brief period but had not held down sustained employment for a number of years. This lack set the door ajar for the financial abuse which followed.  

During her life into her 80s and 90s Hazel’s mental competency deteriorated as her dementia took hold. During this period Matthew discharged the bookkeeper whom Hazel had retained to keep her financial records. She had managed her money carefully during her active life. Matthew, as noted, had not worked for a number of years. As his mother’s mental competency deteriorated, he had no need to work. He had, at his disposal, the considerable wealth of Hazel. The nefarious conduct should first be described: Matthew simply helped himself to the funds he desired.

What then is the remedy to ameliorate or illuminate this type of abuse? The Criminal Code of Canada (“Code”) has a specific section outlining this conduct as an offence. This is section 331 of the Code. It is captioned, theft by person holding power of attorney. The offence is clear but there is an enforcement difficulty. This enforcement difficulty has been documented2 but at this point in time nothing has been done to correct that situation. 

In each of the provinces across our country, the person challenging the conduct of a power holder is required to prove the abuse. This involves the practical difficulty of proving the nefarious conduct of theft beyond a reasonable doubt. To 

assist with this acknowledged difficulty, federal legislators must spring into action but a crash course on Canada’s constitution is required first. 

One of my law school professors was William R. Lederman. He taught constitution law. He had a knack for laying out this law in a simple understandable manner. In its simplest form, the division of powers within Canada is outlined in the British North America Act, sections 91 [exclusively federal laws] and 92 [exclusively provincial laws]. There is an additional area of law developed over the years by case law or Judge made law and this is referred to as a concurrent area of jurisdiction. This area is one for which both the federal and the provincial governments have over-lapping responsibility. If both governments in this concurrent field wish to occupy the field with a piece of legislation, there are rules. Frequently, this is worked out between the two governments. If not, the federal government’s legislation is most frequently determined to be paramount. Governments seek to jealously protect their areas of jurisdiction where they consider they have a dominant role. When they are unable to agree, the recourse sometimes involves going to court where the rules are laid down by the courts.  

It is conceded the provincial legislature has the dominant jurisdiction to deal with the core aspects of POA legislation. What is wrong with the current system? When the POA holder abuses the power granted there is frequently little or no evidence readily available to deal with the situation. What then is the solution? It is submitted that while the primary jurisdiction to deal with the POA subject matter may lie with the provinces, the onus of proof aspect is a federal matter over which it should take control. This is the area where the law is lacking. This area involving the onus of proof is within the concurrent field of law with paramountcy in favour of the federal government. The federal legislators should step forward into this void recognizing the importance of the subject matter of theft from elderly members of our society.     

How more specifically might this be done? The gap in the law requires the following patch: the proof of guilt by a POA grantee needs to be altered so this difficulty may be more easily overcome by enacting a reversing onus provision at the federal level. When there is a whiff of impropriety (for example, lack of financial records), the reversing onus should come into play. An example of this type of reversing onus insofar as the civil onus is part of Ontario law.

A provision in Ontario law in the Highway Traffic Act is one of those exceptions. When a person is stuck in Ontario by a “motor vehicle” where this occurs on a “highway” the reversing civil onus comes into play. This is an extremely useful and sensible provision. The provision comes to the assistance of a party when the facts otherwise present a difficult situation for the injured pedestrian to establish the required proof. This is the precise type of situation a moving party faces in proving the conduct Matthew carried out in our little story here.  In the Ontario situation, it is up to the driver of the motor vehicle to prove he or she was not negligent in striking the pedestrian and causing injuries. Establishing the proof of the abuse of a power holder requires the same type of legislative assistance a reversing onus would provide.

Back then to the story of Matthew, Elsie, and Hazel. As the years passed in our story, Hazel’s cognitive state continued to decline as her dementia increased. This ensuing situation was just too much for Matthew’s sticky fingers. Hazel’s funds became even more tempting to non-employed Matthew as Hazel’s dementia did not abate. Eventually the funds to which Matthew had unfettered access became his private income source.

The foregoing situation presented here, regrettably, plays out in many families3 where a related impediment to no reversing onus exacerbates the situation; that related impediment is one Crown attorneys have experienced difficulty in determining theft by POA as a civil or criminal matter.  Specifically, the proposed enactment would include a requirement that if the financial records were deficient in any manner, then that would trigger the reversing onus. At that point, the onus of proof would switch from the customary party to rest on the person who has not kept those required records. The suggested amendment would require the power holder to positively prove he or she kept the necessary accounting records, failing which that person would be faced with discharging the onus of proof that they were not guilty of misappropriating funds.

Hence, this is a warning to Matthew and Elsie: “DO NOT REPEAT YOUR DEVIOUS STEPS.” By the time you contemplate a similar act, the submission espoused by this article may be enshrined into appropriate legislation to curb your conduct.

  1. Names have been changed to protect the privacy of the individuals. |
  2. The deficiency of the current law involves the onus of proof. This has been documented in an article of Aron Saltzman, CBC News reporter posted Mar 03, 2020 see here. Here a POA abuser was charged under the Criminal Code section 331. Faced with the difficulty of establishing the proof, the Crown Attorney reluctantly accepted a plea of guilty to theft of a small portion of the funds, which disappeared, namely in the amount of $20,000.00. Those funds were to have been repaid but the information in the article is that funds had not been re-paid as ordered by the court by the time of the publication of the article. |
  3. In an article entitled, Power of Attorney Abuse: Civil or Criminal?, published in The Scrivener, vol. 16, no.1, spring 2007, retired Police Sgt. R. N. Trainor reviews the problem. He concludes the essence of the difficulty is whether the problem is a civil or criminal matter. Sgt. Brian Trainor was a police officer with the Saskatoon Police for 27 years. For five years before his retirement in June 2006, he investigated issues surrounding the financial abuse of seniors. His book published in 2007 is titled Stop Fraud. His article chronicles the difficulty of having the criminal law system take up jurisdictional responsibility for this area of the law as the people in the criminal law system seems to consider this topic primarily within the area of civil law. Hence, Crown Attorneys are reluctant to prosecute. |