Estate of Annie MacKay v. Dawn MacKay: Joint Account Holders as Fiduciaries

May 4, 2016 | Alison Minard

In a recent decision, the Ontario Superior Court of Justice ruled on whether a non-contributing joint bank account holder owed a fiduciary duty to the contributing joint bank account holder, and whether she was in breach of that duty by paying herself compensation out of the joint bank account.

The facts in Estate of Annie MacKay v. Dawn MacKay (Evans), 2015 ONSC 7429 reflect the common family scenario in which an elderly parent transfers a bank account into joint names with a child.  This is often done for convenience or for probate planning purposes rather than as a gift of an undivided one-half interest in the account.  The funds are therefore presumed to be held on resulting trust for the parent’s estate.

In this case, the elderly Annie MacKay moved in with her son, Tom, and her daughter-in-law, Dawn.  Annie subsequently named Tom as her attorney for property and added Dawn as a joint account holder to her bank account.  At trial, Dawn asserted that Annie had asked Dawn to provide her with companionship and assist her with her banking and personal care in exchange for compensation.

In late 1999, Annie relocated to a retirement residence close to Dawn and Tom’s house.  The Court accepted that Dawn visited Annie at the retirement residence five days per week, on average, and took Annie on frequent outings. 

In early 2003, Dawn transferred $1,000 out of the joint account.  Her stated reason for this transfer was that it was in respect of weekly compensation of $250 for her banking assistance and companionship.  From early 2003 to mid-2008, Dawn periodically transferred additional funds out of the joint account for her own benefit, again purportedly as compensation for her banking assistance and companionship. 

Dawn and Tom separated in 2008, at which point Tom commenced an action on Annie’s behalf seeking an accounting with respect to all transactions on the account.

The first issue raised in this case was whether Dawn owed a fiduciary duty to Annie in the management and operation of the joint bank account.  The Court cited the following indicia set out in the decision of the Supreme Court of Canada in Frame v. Smith, [1987] 2 S.C.R. 99 to assist with the determination of whether a fiduciary relationship exists:

  • The fiduciary has scope for the exercise of some discretion or power;
  • the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; and
  • the beneficiary is vulnerable to or at the mercy of the fiduciary holding the discretion or power.

The Court found that Annie relied upon Dawn to exercise her discretion, performing duties generally recognized as being fiduciary in nature.  The Court also found that the evidence established vulnerability on Annie’s part and a recognition of that vulnerability by Dawn.  As a result, the Court concluded that Dawn acted as a trustee de son tort and owed a fiduciary duty to Annie in relation to the operation of the joint bank account.

The Court then considered whether Dawn breached her fiduciary duty by making payments to herself from the joint account.  Justice Woodley acknowledged that, at common law and in equity, the general rule is that fiduciaries are not entitled to benefit from their appointment.  However, the rule of equity states that once the court has established a conflict between personal interest and duty the question then becomes whether there was consent to the activity.  In this case, the question was whether Annie or her attorney consented to Dawn’s compensation for personal services.  The Court examined the evidence and concluded that Annie had consented to the arrangement verbally and that this agreement was a “family agreement” for personal service.  The Court also found that Tom’s actions inferred his consent to the family agreement.

Finally, the Court considered whether Dawn was liable to repay any or all of the withdrawn funds.  Based on her journal records, Dawn provided detailed evidence relating to the personal services she provided to Annie.  Dawn stated that she and Annie had agreed to weekly compensation of $250.  However, the total amount withdrawn by Dawn from the joint account for the weeks’ service Dawn provided was less than half that amount.  The Court also accepted that the sporadic nature of the payments reflected Dawn’s concern that Annie be cared for and her expenses met before Dawn compensated herself.

This case confirms that joint accounts held on resulting trust may give rise to a fiduciary relationship between account holders where the contributing account holder is incapable.  The question still remains as to whether a non-contributing account holder owes a fiduciary duty to a capable contributing account holder.  Accordingly, non-contributing account holders would be well advised to handle account assets with care.

Alison Minard is a Partner at Miller Thomson LLP. She can be reached at 416.595.2957 or


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