Estate Litigation Series: Undue Influence

When mentally picturing undue influence individuals tend to automatically think of the “gun to the head” scenario whereby an individual is holding a gun to another’s head forcing them to act against their wishes.1 However, although the “gun to the head” scenario may be held by the court to constitute undue influence (although the feeling of being threatened with a gun has been held by the court not to constitute undue influence2) there are many definitions of undue influence which broaden its scope. Undue influence has been defined as the unconscionable use by one person of power possessed by him over another in order to induce the other to enter a contract.3 Moreover, undue influence has also been said to occur when there is an improper use of power or trust in a way that deprives a person of free will and substitutes another’s objective.4 A further definition of undue influence is the unfair persuasion of a party who is under the domination of the person exercising the persuasion. The gist of the doctrine is unfair persuasion rather than coercion5. In the context of creating a Will and other related Estate matters, undue influence is such a control over the person in question as prevents him/her from acting intelligently, understanding, and voluntarily, and in effect destroys his/her, and constrains him/her to do what he/she would not have done if such control had not been exercised.6 To put it more simply, in the context of Estate matters undue influence is the act of a third party exerting pressure on a testator which removes, restricts, and/or constrains their ability to exercise their free will and therefore causes him/her to do something which he/she would not have done if that pressure was non-existent.

Undue influence can be utilized by individuals as grounds to seek the setting aside of a testamentary instrument, certain transactions etc. where the testator, transferee etc. was coerced and/or subject to external pressure(s) from a third party thereby causing him/her to act in a way they would not normally have and/or restricting the testator’s, transferee’s, etc. free will.7 Setting these types of gifts aside is necessary to prevent the abuse of influence inherent in relationships between persons of unequal mental capacity and power.8

The doctrine of undue influence is founded upon the equitable doctrine of “saving people from being victimized by others.”9 Vulnerability of the donor is the hallmark of the relationship where the recipient is able to exercise undue influence for their own purposes.10

All lawyers must be cognizant of the potential of undue influence when receiving instructions regarding any transaction, including the preparation of a Last Will & Testament. Estate Lawyers must take steps to ensure that their client(s) are freely providing their instructions and are not the “victim(s)” of any undue influence from a caregiver, family member, friend etc. Estate Lawyers should take note of the following factors which the Court has held can increase the potential of undue influence;

(a) where the testator is dependent on the beneficiary for emotional and physical needs;
(b) where the testator is socially isolated;
(c) where the testator has experienced recent family conflict;
(d) where the testator has experienced recent bereavement;
(e) where the testator has made a new will not consistent with prior wills; and,
(f) where the testator has made testamentary changes simultaneously with changes to other legal documents such as powers of attorney.11

Connection between Testamentary Capacity Concerns & Undue Influence

Proof of undue influence requires proof of coercion, such that the mind of the testatrix was overborne by the influence exerted by another person so that there was no voluntary approval of the contents of the will.12 To constitute undue influence, there must be coercion.13 The attackers of the will must prove that the mind of the testator was overborne by the influence exerted by another person such that there was no voluntary approval of the contents of the will.14

Essentially, the testator must have been put in such a condition of mind that if he could speak he would say, "This is not my wish, but I must do it".15 A testamentary disposition will not be set aside on the ground of undue influence unless it is established on a balance of probabilities that the influence imposed by some other person or persons on the deceased was so great and overpowering that the document reflects the will of the former and not that of the deceased testator.16 Further, it is not sufficient to simply establish that the benefiting party had the power to coerce the testator, it must be shown that the overbearing power was actually exercised and because of its exercise the will was made.17

As a result of the above one can reasonably adduce that the “vulnerability” of a testator to be subject to undue influence will likely be significantly increased if said testator lacks testamentary capacity, for whatever reason. Therefore, it is a common occurrence for will challengers to link the grounds of testamentary capacity and undue influence.18 Those intending to challenge a testamentary instrument solely on the ground of undue influence may wish to note that where undue influence has been the sole basis to challenge the validity of a will, there are very few cases where the challenge has been successful.19

Suspicious Circumstances

If there are suspicious circumstances in the relationship between the two individuals, an evidentiary presumption of undue influence arises and the burden shifts to the recipient of an alleged gift to establish that the donor or testator made the gift without influence and as a result of their own full, free, and informed thought.20

Undue influence is one of three suspicious circumstances which can be raised by an individual seeking to challenge the validity of a testamentary instrument.21 The suspicious circumstances may be raised by (1) circumstances surrounding the preparation of the will, (2) circumstances tending to call into question the capacity of the testator, or (3) circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud.22

The courts have held that to dominate the will of another means to exercise a persuasive influence over that person.23 The burden of proof with respect to undue influence remains with those attacking the will24 and must be proven on a balance of probabilities.25

In the recent decision of the Supreme Court of Canada in C(R) v. McDougall26, the Court held that the single standard of proof required in civil cases is the balance of probabilities and thereby appeared to modify the previous decisions rendered in Re Martin; MacGregor v. Ryan27 and Vout v. Hay28. Therefore, the extent of the proof required is not proportionate to the gravity of the suspicion, as previously held, and must be decided on the balance of probabilities, which applies in all civil cases.29

The principles regarding proof of undue influence were further explained by Greenberg J. in Hoffman v. Heinrichs30, citing Kennedy J. in Kohut Estate v. Kohut31,

“The proof of undue influence does not require evidence to demonstrate that a testator was forced or coerced by another to make a will, under some threat or other inducement. One must look at all of the surrounding circumstances and determine whether or not a testator had a sufficiently independent operating mind to withstand competing influences. Mere influence by itself is insufficient to cause the court to intervene but as has been said, the will must be "the offspring of his own volition and not the record of someone else's". Hall v. Hall. [1868] 1 L.R. 481 (Probate Div.).”32

If it is established that the testator knew and appreciated what he was doing, in many cases there is little room for a finding that the testator was coerced.33 In order to render a will void, the undue influence exercised must have caused the execution of a will which contains provisions the testator did not really wish to include and/or which the testator did not really mean to include.34

Where a Will challenger alleges suspicious circumstances it must be remembered that a well- grounded suspicion will occur when the will challenger demonstrates that circumstances exist where there was apparent coercion, undue influence, or fraud, which are coupled with a demonstration that the testator suffered from physical and/or mental disability(ies).35 When this occurs, the Estate and/or executor/executrix must remove the suspicion by proving that the testator did in truth appreciate the effect of what he/she was doing.36 There is no question that, once it is proven that the testator did appreciate the effect of what he/she was doing, the onus entirely lies upon those impugning the will to affirmatively prove that its execution was procured by the practice of some undue influence or fraud upon the testator.37 In deciding whether or not there was undue influence or coercion, it is important to look at the relationship of the parties, the nature of the gift and whether it is tainted by the relationship.38

Steps in Challenging a Will on the Grounds of Undue Influence: Presumed Undue Influence

The steps in challenging a will on the grounds of undue influence are clearly outlined in the seminal Supreme Court of Canada case of Goodman Estate v. Geffen39 and were affirmed in Bale v. Bale40.

In order to trigger a presumption of undue influence a Plaintiff should begin with an examination of the relationship between the parties.41 The first question to be addressed in all cases is whether the potential for domination existed in the nature of the relationship itself.42 The test embraces those relationships which equity has already recognized as giving rise to the presumption, such as solicitor and client, parent and child, and guardian and ward, as well as other relationships of dependency43 but it may arise from other relationships as well including the relationship of brother and sister.44 However, there is nothing per se reprehensible about persons in a relationship of trust or confidence exerting influence, even undue influence, over their beneficiaries; what matters is their motivation and the objective they seek to achieve in doing so.45

However, it must be remembered that the motive and opportunity to unduly influence a testator are not sufficient on their own to set aside a will based on allegations of undue influence.46 For example, see the case of Orfus Estate47 where the executrix (Elaine) drove her mother, the testator (Bessie), to her doctor, dentist, and specialist appointments, drove the testator to swimming and to do the household errands, often took Bessie shopping for clothing or to her hairdresser when they were in Florida or at the cottage. Elaine was essentially the sole person by Bessie's side and Bessie's primary caregiver as she got older.48 The Court held that although the will challenger and/or objector (Sharon) alleged that the executrix had the motive and opportunity to unduly influence the testator, the law does not discourage the loving care of the elderly by their children.49 When addressing the issue of undue influence in this case the Honourable Justice M.A. Penny of the Ontario Superior Court of Justice stated, in part, the following;

“Where an elderly person has a child who assists them with the incidence of daily living, that assistance is not evidence of undue influence by that child...
Elaine took the responsibility of assisting Bessie with the incidence of daily living. No other member of the family did so. Specifically, Sharon did not assist Bessie with the incidence of daily living in 2003/2004.

…it could be concluded that Bessie relied on Elaine. However, this does not mean that Bessie was submissive to Elaine nor does it demonstrate that Elaine coerced Bessie. It only speaks to Elaine's caring relationship with her mother…

the evidence in this case merely shows Elaine to be a dutiful, loving daughter in her actions in 2003/2004. There is no independent evidence that Elaine socially or otherwise isolated Bessie or in any way coerced her in respect of her testamentary instructions.”50
As mentioned previously, to constitute undue influence, there must be coercion.51 The attackers of the will must prove that the mind of the testator was overborne by the influence exerted by another person such that there was no voluntary approval of the contents of the will.52

Having established the requisite type of relationship to support the presumption of undue influence, the parties must then examine the nature of the transaction.53 When dealing with commercial transactions, such as (for example) the transfer of property, the plaintiff should be obliged to show, in addition to the required relationship between the parties, that the contract resulted in unfairness either in the sense that the plaintiff was unduly disadvantaged by it or that the defendant was unduly benefited by it.54

By way of contrast, in situations where consideration is not an issue (for example gifts and bequests) it is not necessary to put a plaintiff to the proof of undue disadvantage or benefit in the result. In these situations it is enough to establish the presence of a dominant relationship.55

Once the plaintiff has established that the circumstances are such as to trigger the application of the presumption, meaning that the nature of the relationship was such that the potential of undue influence existed, the onus moves from the plaintiff to the defendant to rebut it.56 The testator must be shown to have entered in the transaction as a result of his/her own “full, free and informed thought.”57 Substantively, this may entail a showing that no actual influence was exerted in the particular transaction, that the plaintiff had independent advice, and so on.58

Additionally, the magnitude of the disadvantage or benefit can be used as evidence going to the issue of whether influence was exercised.59

To summarize the above, where a pre-existing relationship of trust or confidence exists between a donor and recipient of property with the ability of the recipient to influence the donor through manipulation, coercion or abuse of power the gift or the bequest can be set aside by the Court.

Evidence of Undue Influence in Estate Litigation

In Tate v. Gueguegirre60 the Divisional Court held the following to constitute “significant evidence suggesting that a Will was a product of undue influence”;

(i) the increasing isolation of the testator;

(ii) the testator’s dependence on the respondent;

(iii) the substantial pre-death transfers of wealth from the testator to the respondent;

(iv) the testator’s expressed yet apparently unfounded concerns that he was running out of money;

(v) the testator’s failure to provide a reason or explanation for leaving his entire estate to the respondent and excluding his daughters from it;

(vi) the material changes in circumstances between the time of the first Will from the time of the final Will that would undermine the testator’s earlier reasons for favouring his son in his Will;

(vii) the move by the testator, increasing his isolation and the control over him by the respondent;

(viii) the circumstances of the making of the Will including:

(a) using a lawyer previously unknown to the testator and chosen by the respondent;

(b) the respondent conveying instructions to the lawyer concerning the contents of the Will;

(c) the respondent apparently receiving a draft of the Will before it was executed by the testator and then the respondent taking the testator to the lawyer to sign the Will;

(ix) the testator’s documented statements that he was afraid of the respondent.61

Conclusion

It is important for Estate Lawyers, when taking instructions to prepare a testamentary instrument, to be satisfied that clients are not being coerced by a third party and are therefore able to freely apply their minds to making decisions when providing those estate planning instructions to counsel. This may be difficult for an Estate Lawyer to determine in a brief initial consultation with a client which is why Estate Lawyers should always keep the possibility of undue influence in the back of their mind especially when (for example) clients request to provide instructions with a third party present, clients are forgetful and/or suffering from mental illness, etc.

1 See for example, Gregory v. Brown, 2005 ONCJ 284 (CanLII) at para 14
2 See for example, Brooks v. Alker (1976), 1975 CanLII 423 (ON SC), 9 O.R. (2d) 409, 60 D.L.R. (3d) 577, 22 R.F.L. 260 (Ont. H.C.).
3 Brooks v. Alker (1976), 1975 CanLII 423 (ON SC), 9 O.R. (2d) 409, 60 D.L.R. (3d) 577, 22 R.F.L. 260 (Ont. H.C.).
4 Black’s Law Dictionary, 8th ed., (St. Paul, Minn.: Thomson-West, 2004), at page 1563
5 Gregory v. Brown, 2005 ONCJ 284 (CanLII), at para 35
6 The Law Dictionary: http://thelawdictionary.org/undue-influence/
7 See the lengthy in depth discussion of undue influence as a ground to set aside a will in Geffen v. Goodman Estate, [1991] 2 SCR 353, 1991 CanLII 69 (SCC), although this appeal was dismissed due to the Court’s determination that there was no presumption of undue influence in this case due, in part, to the findings of fact by the initial trial judge who made it difficult for the Court of Appeal to accept the Appellant’s position that the relationship between Mrs. Goodman and her brothers was one where the potential for a dominating influence existed. The Court of Appeal also decided that Ms. Goodman was not relying upon her brothers for assistance.
8 Ross-Scott v. Potvin, 2014 BCSC 435 (CanLII), at para 58
9 Ross-Scott v. Potvin, 2014 BCSC 435 (CanLII), at para 56
10 Ross-Scott v. Potvin, 2014 BCSC 435 (CanLII), at para 60
11 John Gironda et al. v. Vito Gironda et al., 2013 ONSC 4133 (CanLII), at para 77
12 Re Estate of Ruth Smith; Smith v. Rotstein, 2010 ONSC 2117 (CanLII), at para 176
13 Orfus Estate v. Samuel and Bessie Orfus Family Foundation, [2011] O.J. No. 4301, at para 264
14 Re Estate of Ruth Smith; Smith v. Rotstein, 2010 ONSC 2117 (CanLII), at para 177
15 Ibid
16 Ibid
17 Ibid
18 See for example, Banton v. Banton, 1998 CanLII 14926 (ON SC), John Gironda et al. v. Vito Gironda et al., (2013) ONSC 4133 (CanLII), and Tate v. Gueguegirre, 2015 ONSC 844 (CanLII) in which the testamentary instrument was challenged on the grounds of both lack of testamentary capacity and undue influence.
19 See one example of a testamentary instrument being set aside on the ground of undue influence when the testator was held to have capacity; Re Marsh Estate; Fryer v. Harris (1991), 41 ETR 225 (NSCA)
20 Ross-Scott v. Potvin, 2014 BCSC 435 (CanLII), at para 57
21 Vout v. Hay, [1995] 2 SCR 876, 1995 CanLII 105 (SCC)
22 Ibid. at para 25
23 Bale v. Bale, 2008 CanLII 425 (ON SC), at para 75
24 Vout v. Hay, [1995] 2 SCR 876, 1995 CanLII 105 (SCC), at para 28
25 Ibid.
26 2008 SCC 53 (SCC)
27 1965 CanLII 17 (SCC), [1965] S.C.R. 757
28 [1995] 2 SCR 876, 1995 CanLII 105 (SCC),
29 C(R) v. McDougall 2008 SCC 53 (SCC)
30 2012 MBQB 133 (CanLII)
31 (1993) 90 Man.R. (2d) 245, [1993] M.J. No. 597 (Q.B.)(QL):
32 Hoffman v. Heinrichs 2012 MBQB 133 (CanLII)
33 Vout v. Hay, [1995] 2 SCR 876, 1995 CanLII 105 (SCC), at para 29
34 Craig v. Lamoureux 1919 CanLII 416 (UK PC), [1920] A.C. 349, at para. 357; affirmed in Vout v. Hay, [1995] 2 SCR 876, 1995 CanLII 105 (SCC), at para 29
35 Vout v. Hay, [1995] 2 SCR 876, 1995 CanLII 105 (SCC), at para 29
36 Ibid.
37 Ibid.
38 Bale v. Bale, 2008 CanLII 425 (ON SC), at para 75
39 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353
40 2008 CanLII 425 (ON SC),
41 Goodman Estate v. Geffen 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at para 43; affirmed in Bale v. Bale, 2008 CanLII 425 (ON SC), at para 78
42 Ibid.
43 Ibid.
44 See the reasons delivered by the Honourable Justice La Forest in Goodman Estate v. Geffen 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, where the Honourable Justice agreed with the Honourable Justice Wilson’s decision but found it necessary to express his reasons. The Honourable Justice La Forest stated that the relationship of brother and sister might well support a presumption of undue influence. However, he could not accept that the relationship between Mrs. Goodman and her brothers was one where the potential for a dominating influence existed in this case.
45 Goodman Estate v. Geffen 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at para 377
46 Orfus Estate v. Samuel and Bessie Orfus Family Foundation, [2011] O.J. No. 4301, at para 259
47 Ibid.
48 Ibid. at paras 55-58
49 Ibid. at para 259
50 Ibid. at paras 260, 261 and 263
51 Ibid. at para 264
52 Bale v. Bale, 2008 CanLII 425 (ON SC), at para 177
53 Ibid at para 44; affirmed in Bale v. Bale, 2008 CanLII 425 (ON SC), at para 78
54 Ibid at para 44; affirmed in Bale v. Bale, 2008 CanLII 425 (ON SC), at para 78
55 Ibid at para 45; affirmed in Bale v. Bale, 2008 CanLII 425 (ON SC), at para 78
56 Ibid at para 46; affirmed in Bale v. Bale, 2008 CanLII 425 (ON SC), at para 78
57 Ibid.
58 Ibid.
59 Ibid.
60 2015 ONSC 844

61 Tate v. Gueguegirre 2015 ONSC 844, at para 9

This article should not be used in substitute for legal advice and was in no way intended to be relied upon as legal advice. Furthermore, the contents of these notes are intended as a guide for readers. They can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law.

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