Undue Influence- Some General Principles

When clients approach disinherited.com with respect to suspicions that undue influence was exerted upon the deceased, I am mindful of two conflicting principles:

1. in my in my experience, “where there is smoke there is fire”, so their suspicions are probably well-founded;

 

2. An allegation of undue influence is tantamount to that of fraud, and if unsuccessful in the  litigation, the failed litigant is typically punished with special costs

which are normally the full legal fees of the opposing party.

For more information on undue influence please refer to the website article entitled  “How to Win an Undue Influence Case“.

 

General Principles of Undue Influence

 

In Longmuir v. Holland, 2000 BCCA 538 at para. 71, 192 D.L.R. (4th) 62, Southin J.A. defined undue influence as “influence which overbears the will of the person influenced so that in truth what she does is not…her own act”.

 

In the leading case of Allcard v. Skinner (1887), 36 Ch. D. 145 at 171, 56 L.J. Ch. 1052 [Allcard] (C.A.), Cotton L.J. discussed the two classes of transactions which may be set aside on grounds of undue influence:

“First, where the Court has been satisfied that the gift was the result of influence expressly used by the donee for the purpose;

second, where the relations between the donor and donee have at or shortly before the execution of the gift been such as to raise a presumption that the donee had influence over the donor.”

The second class of undue influence does not depend on proof of reprehensible conduct.  It affects those who may have acted in the sincere belief of their honesty.  Under this class, equity will intervene as a matter of public policy to prevent the influence existing from certain relationships from being abused: Ogilvie v. Ogilvie Estate (1998), 49 B.C.L.R. (3d) 277 at para. 14, 106 B.C.A.C. 55 (C.A.), citing Allcard.

[100]     In Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, [1991] S.C.J. No. 53 at paras. 42-45, Wilson J. discussed the presumption of undue influence in the following passages:

42      ”  What then must a plaintiff establish in order to trigger a presumption of undue influence?  In my view, the inquiry should begin with an examination of the relationship between the parties.  The first question to be addressed in all cases is whether the potential for domination inheres in the nature of the relationship itself.  This 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 dependency which defy easy categorization.

43        Having established the requisite type of relationship to support the presumption, the next phase of the inquiry involves an examination of the nature of the transaction. …

44        … in situations where consideration is not an issue, e.g., gifts and bequests, it seems to me quite inappropriate to put a plaintiff to the proof of undue disadvantage or benefit in the result.  In these situations the concern of the court is that such acts of beneficence not be tainted.  It is enough, therefore, to establish the presence of a dominant relationship.

45        Once the plaintiff has established that the circumstances are such as to trigger the application of the presumption, i.e., that apart from the details of the particular impugned transaction the nature of the relationship between the plaintiff and defendant was such that the potential for influence existed, the onus moves to the defendant to rebut it.  As Lord Evershed M.R. stated in Zamet v. Hyman, supra, at p. 938, the plaintiff must be shown to have entered into the transaction as a result of his own “full, free and informed thought”.  Substantively, this may entail a showing that no actual influence was deployed in the particular transaction, that the plaintiff had independent advice, and so on.  Additionally, I agree with those authors who suggest that the magnitude of the disadvantage or benefit is cogent evidence going to the issue of whether influence was exercised.

Accordingly, once a relationship with the potential for domination has been established, the next phase of the inquiry is to examine the nature of the transaction. 

Where a gratuitous transfer is concerned, the onus moves to the defendant to rebut the presumption on the balance of probabilities: Stone v. Campbell, 2008 BCSC 1518 at para. 44, 44 E.T.R. (3d) 146.”

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