It involved a family estate dispute after a tragic death where all the parties had a one third interest in a family business. After the deceased’s death, his surviving widow, on the advice of her brothers-in-law, signed transfers of all her interest in the deceased estate, including the interest in the family business and real property, to one of the defendants in trust, in exchange for receiving a condominium. Eventually the widow brought court action to set aside the transfer agreement, and the action was allowed on the grounds of undue influence, and other reasons including MISREPRESENTATION. In a nutshell, the court found that there was an inequality of positions of the parties, and the widow relied upon her brother-in-law’s for advice and was misrepresentented to neter into the contract.. The transfer agreement was an improvident bargain whereby the widow gave up her interest in the deceased’s estate, which was worth a very substantial amount, in exchange for a condominium worth only $610,000.Patricia also asks that the Transfer Agreement be set aside on the basis that it was induced by a misrepresentation. An agreement induced by a misrepresentation can be set aside if the representation was as to a material fact and reasonably relied on. This applies to a representation whether innocent, negligent or fraudulent. See Waddams at paras. 419-421.
It is necessary for a plaintiff to establish that the misrepresentation was a material inducement upon which the plaintiff relied. It is not necessary for a plaintiff to establish that the misrepresentation was the sole inducement for acting and it matters not if the misrepresentation was only one of several factors contributing to the plaintiffs decision. See Sidhu Estate v. Bains (1996).25B.C.L.R.(3d)41 (B.C. C.A.) at paras 35-36; Kripps v. Touche Ross & Co. (1997). 89 B.C.A.C. 288 (B.C. C.A.) at paras. 102-103; NBD Bank, Canada v. Dofasco Inc. (1999). 46 O.R. (3d) 514 (Ont. C.A.) at para 81.
175 In Sidhu Estate, supra, Finch J. A. (as he then was) quoted with approval from Fleming, The Law of Torts, 7th ed.
(Sydney: Law Book, 1987), which stated at 604
At the same time, a defendant cannot excuse himself by proving that his misrepresentation was not the sole inducing cause, because it might have been precisely what tipped the scales…
2012 CarswellOnt 15064, 2012 ONSC 6624, 84 E.T.R. (3d) 208,225 A.C.W.S. (3d) 115
and from Barton v. Armstrong (1973). T19761 A.C. 104 (New South Wales P.C.) in which Lord Cross, who wrote for the majority, in part stated at 118
If on the other hand Barton relied on the misrepresentation Armstrong could not have defeated his claim to relief by showing that there were other more weighty causes which contributed to his decision to execute the deed, for in this field the court does not allow an examination into the relative importance of contributory causes.
[Emphasis Finch J.A.’s]
In this case, I have found that before Patricia signed the Transfer Agreement, Christina told Patricia that she would hold the shares of CDC and Birchland in trust for Patricia. This was a representation of a present fact, i.e. she intended to hold the shares in trust for Patricia. However, Christina was quite clear in her evidence that from the time of the Transfer Agreement, she intended to transfer Patricia’s shares in CDC and Birchland to Ron Venture and Pat Pillitteri. This was a misrepresentation of fact.
Reliance can be inferred from all of the circumstances and it is not necessary for Patricia to have testified that she relied on the representation of Christina. See NBD Bank, Canada v. Dofasco Inc. (1999). 46 O.R. (3d) 514 (Ont. C.A.) at para 81. However, Patricia did testify that she relied on the representation of Christina, and I accept that. In any event, in my view it is an obvious inference from the evidence of Patricia that it was a material inducement to her signing the Transfer Agreement that Christina told her that she would hold the shares of CDC and Birchland in trust for her. Patricia testified that she did not think that she would have signed the Transfer Agreement had she known that Christina intended on transferring the shares to Ron Venture and Pat Pillitteri, and while that is not the issue, the issue being if she relied on what she was told rather than if she would have relied on the statement if told something else, I accept her evidence. It would have been completely different from what she had been told and what she relied on.