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Agency - Power of Attorney. Wright v. Wright
In Wright v. Wright (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, here brought against the dismissal (as unenforceable) of an application "seeking enforcement of the Agreement or alternative relief", where the '(Property Partnership) agreement' ostensibly provided the appellants' with an "an option to purchase a residential property".
The court considered fiduciary duties, here in a power of attorney context:[95] In my view, the application judge erred in principle in concluding that Tamara was in a conflict of interest as a result of the 2019 POA. He failed to consider the limited scope of the 2019 POA and the duties owed by an attorney when a grantor is of sound mind.
[96] The legal obligation of an attorney varies based on the grantor’s capacity. Where a grantor of a POA is mentally capable, the relationship between the grantor and attorney is similar to one of agency: Richardson (Estate Trustee of) v. Mew, 2009 ONCA 403, 96 O.R. (3d) 65, at para. 48, citing Banton v. Banton (1998), 1998 CanLII 14926 (ON SC), 164 D.L.R. (4th) 176 (Ont. Gen. Div.), at p. 239. In Banton, at p. 239, the court explained that, where a grantor has the mental capacity to deal with their property, the role of the attorney is akin to an agent. In these circumstances, even where the power conferred is general, the attorney’s primary responsibility will be to carry out the grantor’s instructions: Banton, at p. 239. Such an attorney owes fiduciary duties to the grantor, but they “pale in comparison” to the fiduciary duties owed by an attorney holding a continuing power over a grantor who has lost capacity to manage their property: Banton, at p. 239.
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[99] Furthermore, as already noted above, Karin received timely and independent legal advice prior to signing the Agreement. In these circumstances, to the extent that Tamara owed Karin a fiduciary duty based on the 2006 or 2019 POAs, that duty did not preclude an enforceable agreement between them. Even if Tamara was acting under either of the POAs and derived a benefit from doing so, it was with Karin’s full knowledge and consent, as informed by the independent legal advice she received: Richardson (Estate Trustee of), at para. 49.
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