Undue Influence General Principles

Undue Influence 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.”

BC Will Contested For Interpretation of Its Meaning

Re Brookes estate 2011 BCSC 1606 involves a hand written half page  BC will, in  which the testator   appointed his brother as executor and provided:

” I leave my property  ( address stated) to my brother executor with power of attorney. Also my accounts at Royal Bank of Canada merit, BC”

The will then listed the names and addresses of the five respondents adding:

“I would all the people named above to share equally in my estate”

 

The testator’s estate consisted of his house and bank accounts totaling approximately $275,000.

The petitioners brother claimed that he had been left the house and bank accounts-in effect everything for his own use.

The court found that the assets were instead left to the brother as executor, with him and the five respondents to share equally in the entire estate.

 

Some of the important rules of wills interpretation utilized by the court are as follows:

 

1.  The court’s task in construction of a will is to give effect to the intention of the testator, which is normally accomplished by giving “fair and literal meaning to the actual language of the will.” Re Browne, [1934] SCR 324 at p. 328, Easter v. Bush (1999), 26 E.T.R. (2d) 184 at para. 35. The fundamental principle , as stated in Re Browne at p. 330, is:

Effect must be given to the testator’s intention ascertainable from the expressed language of the instrument. . So far as possible, the will itself must speak. . If, after careful consideration of the language used, in the particular passage immediately under examination and consistently with the context of the document, the intention remains doubtful, then resort may be had to certain rules which have been generally adopted.

 

2.       The court should make every effort to reconcile two apparently conflicting provisions of a will, rather than absolutely ignoring one or the other: Re Estate of Douglas Carson Smith, 2008 BCSC 1189 at para. 34.

Where there is an obvious ambiguity or omission, the court may ignore, add or substitute words, but only to a very limited degree and only when the intention is plain and clear: Milwarde-Yates v. Sipila, 2009 BCSC 277 at para. 48. Further words cannot be read in “[u]nless one can be reasonably certain from the context of the will itself what are the words which have been omitted”: Laws et al v. Rabbitt et al, 2006 BCSC 1519 at para. 56, citing Re Follett Estate, [1955] 1 W.L.R. 429 (Eng. C.A.).

 

3.     Extrinsic evidence may be used to resolve ambiguity. A frequently quoted description of that process comes from Re Burke (1959), 20 D.L.R. (2d) 396 (Ont.C.A.) at 398, which was approved by the British Columbia Court of Appeal in Davis Estate v. Thomas (1990), 40 E.T.R. 107 and Smith v. Smith Estate, 2010 BCCA 106:

“Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed and which might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator. When an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so. ”

Agreements Not to Revoke a Will

Binding agreementBinding Agreement Not to Revoke Will

Kayne v Wright et al  2012 BCSC 119 is an excellent example of “mutual wills” which on occasion arise in estate litigation disputes.

The general principle in law is that a will is always revocable.

Most married couples execute what are commonly known as mirror wills, as the wills are virtually identical but for the change of names between the testators.

In a mutual will situation however there must be evidence of an agreement not to revoke one’s will that must be  clear and unequivocal.

If the court finds that there was a binding agreement between the parties, and one of the parties subsequently revokes that will and executes another, then the beneficiaries of the revoked will have a claim in law for constructive trust against the offending testator’s estate and its beneficiaries.

In this case, the husband agreed to give his wife a life interest in a condominium, make provisions in his will giving her a life interest in another property he might own at his death, and transferring to her his registered retirement income funds.

In exchange, the female party agreed to use the condominium for maintenance and support during her lifetime and to make a will which provided for in your revocable gift of the remainder of her estate to the males estate after gift of $30,000 was paid to each of her children.

The court referred to each of their wills/codicil and noted for example that the male parties’ will contained the following words:

“and it is understood that this paragraph of my will shall be your revocable, this life estate being granted to my wife in consideration of the term in her will providing for the remainder of her estate, after gift of $30,000 paid to each of her children, to fall into my estate.

The wife had similar wording in her will.

The husband subsequently died and the wife shortly thereafter changed her will on two occasions prior to her death, and change the beneficiaries from her late husband’s estate, to her own new beneficiaries.

 

THE LAW AND ANALYSIS

 

[      The doctrine of mutual wills and the obligations flowing from them was discussed by Mr. Justice Cullity in Edell v. Sitzer (2001), 55 O.R. (3d) 198 (Ont. Sup. Ct. J.).  He stated at paras. 57-58:

[57]    ”  The doctrine of mutual wills has traditionally been applied in cases where individuals have made separate wills pursuant to an agreement with respect to their terms.  Most commonly, they have agreed that each will obtain a benefit under the other’s will and that other specified individuals will receive the property of each of them on the death of the survivor.  In some cases of this sort, the benefit obtained by the survivor under the other’s will has been a life interest; in other cases, it has taken the form of an outright gift.  Where the requirements for the application of the doctrine are satisfied, the survivor will not be permitted to defeat the agreement by revoking his or her will after the death of the other.  This result is achieved by the imposition of a constructive trust on the survivor’s estate for the benefit of those who were intended to benefit under the agreement. ( emphasis added)

[58]      The most fundamental prerequisite for an application of the doctrine is that there be an agreement between the individuals who made the wills.  It has been repeatedly insisted in the cases that:  (a) the agreement must satisfy the requirements for a binding contract and not be “just some loose understanding or sense of moral obligation” (Re Goodchild (Deceased), [1996] 1 All E.R. 670 (Ch. D.), at p. 681)[;] … [b] It must be proven by clear and satisfactory evidence; and (c) it must include an agreement not to revoke the wills.”

This doctrine was also discussed extensively by Madam Justice Southin for the Court of Appeal in Brynelsen Estate (Administrator of) v. Verdeck and O’Hara, 2002 BCCA 187 at paras. 14-29.

resumption of Undue Influence in Parent/Adult Children Relationships

Presumption of Undue Influence

There are many court cases that define undue influence, and most state something to the effect that the influence must overbear the will of the person influenced so that in truth what she or he does is not his or her own act.

In the decision Canada Trust Company v Ringrose 20009 B. C. J. 2530 The Court held that the presumption of undue influence is triggered once a relationship with the potential for domination has been established and can apply where a parent transfers property to an adult child.

It is not the case that a gratuitous transfer from a parent to an adult child automatically creates a presumption of undue influence.

The decision Calmusky v Karaloff 1947 S. C.R. 110, the court held that the presumption of undue influence does not automatically arise upon a transfer of valuable property from an elderly parent to a child in circumstances where the parent is in good health and has possession of all his or her faculties.

However the courts have held that the presumption of undue influence does apply if the relationship between elderly parent and child is characterized by dependency.

Thus in the case of an old and sick parent, a child may easily assume relationship of dominance over that parent.

Some case law has identified such relationships as being ones of dependency.

The leading case in this area is the Supreme Court of Canada case of Geffen versus Goodman Estate from 1991.

Wills Variation Claim Won By 91 Year Old Spouse

ForeverWills Variation Claim Won By 91 Year Old Surviving Spouse

Mars v Bain Estate 2011 BCSC 1714 involves a claim brought by a 91-year-old female spouse who had lived in a marriage like relationship with the deceased for the last nine years of his life. She brought a court case contesting the will in BC.

The deceased died at age 84 years leaving an estate valued at approximately $1.5 million, and a 62-year-old son who was vocationally and economically vulnerable. He had no income and no property and had been dependent on the estate for his living expenses for at least eight months.

The plaintiff had almost no assets but did have adequate pension income after the death of the plaintiff.

The deceased’s will left the plaintiff a life estate in the home that they shared plus an additional $50,000.

Other than $50,000 in bequests, the rest of his $1.4 million estate went to the 62-year-old son.

The court varied the will and gave the plaintiff an additional $150,000 and otherwise left the will unchanged.

The court noted that the deceased and the plaintiff did not engage in a sharing of assets or significant economic contributions to the estate other than sharing the home previously owned by the deceased.

The court adopted some of the criteria as stated in the Court of Appeal decision Picketts vs Hall 2009 BCCA  329 with respect to some of the helpful factors in assessing the moral obligations of the testator towards the spouse:

1) the absence of a legal obligation to the testator’s children;

2) the length of the marital relationship;

3) the agreement of the spouse to give up a career depriving him or her of the opportunity to accumulate in the estate of his or her own;

4) the necessity of the spouse to dip into his or her savings to supplement living expenses the testator had agreed to provide;

5) the lengthy period of loving and effective care provided by this post to the testator during his or her decline;

6) the size and liquidity of the estate.

 

While disinherited.com cannot categorically state that the decision is incorrect in any way, it is our opinion that the award is slightly on the lower side, undoubtedly due to the advanced age of the plaintiff and the lack of evidence as to her need.

BC Court in 1984 Varies Will to Equally Share Estate to Homosexual Child

BC Court in 1984 Varies Will to Equally Share Estate to Homosexual Child

Disinherited Homosexual Children and the Wills Variation act

I came across the decision  Patterson v. Lauritsen (1984) 6 WWR 329, and was pleasantly surprised to learn that as” far back” as 1984, the BCSC varied a will to provide an equal share to a disinherited gay son on the basis that homosexuality was not a factor which would justify a judicious parent wisely disinheriting a child.

The plaintiff, aged 43, one of four children, was excluded from the will of the testatrix, his mother, which divided her estate equally among the remaining three children.

Those three children, the defendants, were all well advanced in their adult lives and were in better financial circumstances than the plaintiff.

The plaintiff was a homosexual and an alcoholic and had been unemployed since 1970, living on welfare and the contributions of his male partner.

The plaintiff often fought with the testatrix but they had enjoyed a loving relationship.

The testatrix had informed her solicitor that she was excluding the plaintiff from her will because he was living with a homosexual and was a drug addict.

The plaintiff brought an action for relief under s. 2 of the Wills Variation Act.

The Court granted judgement for the  plaintiff on the basis:

The testatrix failed to provide that provision for the plaintiff’s proper maintenance and support which a judicious parent, seeking to discharge his parental duty, would have made.

The testatrix’s suspicions of drug addiction were unfounded.

The fact of homosexuality in today’s society was not a factor which would justify a judicious parent, acting wisely, disinheriting a child. In all the circumstances, one quarter of the estate was an adequate, just and equitable provision for the plaintiff.

Son Wins Wills Variation For Marrying Spouse Whose Race Mother Disapproved

Son Wins Wills Variation For Marrying Spouse

Lowres v Lowres 17 ETR 281, is another wills variation case from 1984 that is still very much the current and applicable law in British Columbia today.

It relates  to an adult child independent  child contesting a will in BC for reasons believed by the court  to be racially.

The deceased had four children and in her will gave half of her estate to her daughter, and one quarter to each of her two sons.

She gave nothing to the claimant, a third son who decided to fight the will.

The son applied to the court and was awarded the same interests as his two brothers, that is, a one third of one half of the estate.

The provision for the daughter would not be affected by the order.

The plaintiff son was 50 years of age and had lived at home with his parents for 10 years, paying room and board and helping generally about the house.

Things all changed when he married a wife who the deceased did not approve of, it would appear on the basis of her racial prejudice, and her disapproval of working mothers which her daughter-in-law was.

The son became estranged from his mother by reason of her unfriendly attitude towards her daughter-in-law

The court found that the deceased was a strong-minded woman who had fixed ideas on certain subjects. She was not close to her children when they were grown independent, and the court found it was probable that she resented their marrying, being of a possessive nature.

The court declared that the deceased mother departed from her duty as a judicious parent.

Her omission to include her son in her estate was irrational, with  no good reason for doing so being apparent in the evidence.

The court concluded that it believed her action stemmed from her prejudice against his marriage which would not be tolerated under modern Canadian values.

Who Are Your “Nieces & Nephews”?

nieces and nephewsWill Construction re Nieces and Nephews

Re Holmes Estate 2007 BCSC 51,  involved a childless testator who was predeceased by his wife .

His will provided in part that residue of his estate be “paid and transferred over to all my nieces and nephews”

He had eleven nieces and nephews who were chil­dren of his siblings.

The testator’s late wile had eighteen nieces and nephews who were children of her siblings. The executor applied to Court for construction of the impugned pro­vision for determination as to whether phrase “all my nieces and nephews” included

the children of his late wife’s siblings.

On consideration of surrounding circumstances,the Court held that the testator intended lo benefit both children of his siblings, and children of his late wife’s siblings.

The evidence included:

In his four prior wills, testator benefited both families

Finding that testator intended to benefit both sides of family was evident in testator’s ongoing
relationship with various members of late wife’s family.

The alleged ambiguity in the will was brought to testator’s attention in his lifetime; however, the  testator did not change his
will .

The court held it was inconceivable that the testator would not have changed will if he did not intend to benefit late wife’s side of family.

The primary objective of the court when interpreting a will, is to determine the testator’s intention.

The will must be considered in its entirety.

If there is no ambiguity on the face of the will then it should be interpreted according to the ordinary meaning attributed to the words used.

Only if there is an ambiguity should the court resort to evidence of surrounding circumstances.

The court relied on the leading case of Perrin v  Morgan (1943) A.C.399 H. L.

Foreign Will Mistakenly Revoked Canadian Will Creating Intestacy

The August 2011 decision of the Ontario Court of Appeal in Robinson’s Estate v Robinson is a good example of the pitfalls that may inadvertently occur when a testator has wills prepared in different jurisdictions.

It is becoming increasingly common for the general public to own assets in two or more countries.

It is also generally advisable to have a will pertaining to assets owned in each jurisdiction.

Thus this recommended practice may mean that a person may end up with perhaps two, or three wills.

The danger that can occur is that one subsequent will might inadvertently revoke a previous foreign will.

This is exactly what happened in the Robinson case.

The testator executed two separate wills, one to deal with property held in her native Spain, and one to deal with her Canadian property.

The 1st will clearly indicated that another will existed dealing with Canadian property.

The lawyer who drafted the Canadian will and the later revision, did not ask about other wills or location of assets.

The Canadian will accordingly contained the standard revocation clause revoking all previous wills.

The lawyer and estate administrator only found out about the European will after the testator’s death, and after some assets had been distributed.

An application was made to the court to rectify the will.

It was refused on the basis that the intention of the testator was set out in the will, and the testator was only mistaken as to the legal effect.

That decision was appealed and the appeal was dismissed.

Affidavit evidence tendered by beneficiaries and the estate trustee as to the testator’s intention was not admissible.

The court could not find that the testator did not intended to revoke his European will.

The court held that the claims of the estate trustee and beneficiary were based on the premise that the court could make findings of intention on the part of the testator.

Since the will was unequivocal, there could be no exception to show that the intention of the testator should not have been honoured.

Harsh as the decision might seem, disinherited.com is of the opinion that it is correct.

It would appear that the appropriate remedy is to sue the lawyer for negligence, for failing to adequately canvass with his client as to other wills and other foreign assets, and drafting the will accordingly so as to not revoke the other wills.

Adopted Daughter Awarded Equal Share In Wills Variation Claim

Adopted DaughterAdopted Daughter Awarded Equal Share

Laing v Jarvis Estate 2011 BCSC 1082 is yet another Wills Variation claim in British Columbia, where the courts have awarded an equal share to a disinherited child, in this case, an adopted one.

The plaintiff was 55 years of age and was adopted by the deceased who died in 2007 at age 84.

The deceased left everything to her natural son and there was no mention whatsoever of the plaintiff in the will.

The notes taken by the lawyer who prepared the will recorded that the plaintiff had had no contact with the deceased “in years”, and that the plaintiff had disowned the deceased.

The plaintiff was married and had 2 young children in her care, one of which was disabled. Her husband was unemployed and they had together almost no assets.

The court awarded the plaintiff an equal share in the estate.

The evidence did not confirm that the plaintiff had no contact with the deceased and years, or that the plaintiff had disowned the deceased.

The court found that while there might have been long periods where the plaintiff and the deceased did not see each other, they were in contact by telephone. The plaintiff also had medical and family reasons for not traveling a long distance to visit her mother.

Accordingly there were no valid and rational reasons for the deceased at the time of her death, to disinherit her daughter.

The court followed an increasingly strong line of case authorities to the effect that there is a presumption that children should share equally in their parents estates.

The court made the following significant quote:

In McBride v Voth, 2011 BCSC 443, Mdm. Justice Ballance considers the proposition of treating adult independent children equally when considering the act. She states at paragraph 134:

” On the other hand, in Vielbig v Waterland Estate (1995) 1 BCLR (3d) 76, (CA), the Court of Appeal held that equal treatment among independent adult children is prima facie favor from a moral duty standpoint. In Ryan, the court held that in the absence of relevant reasons for a non-equal distribution, there was a reasonable expectation that adult children were shared equally, you don’t know legal obligation requiring equal distribution exists. The emerging rule of thumb to the effect that equal apportionment among children prima facie discharges at testator’s moral duty was applied in Inch. There, the court held that an equal distribution was prima facie fair, despite the fact that one child received significant assets by way of inter vivos transfers.

disinherited.com strongly approves of this increasing trend by the court to treat adult independent children equally on a prima facie basis.