Estates & Wills & Trusts

Facts required to support claim of undue influence

By Staff

While the doctrine of undue influence is an important tool for challenging suspect wills or transactions, a recent Ontario Court of Appeal case shows that it is also necessary to point to specific facts that support this type of claim, Toronto wills and estates lawyer Matthias Duensing writes in The Lawyer’s Daily.

As Duensing, principal of Duensing Law, explains, the case centred around the wills of a couple with two daughters. The first daughter moved out of the family home when she was 20, while the second continued living with her parents until their deaths — even after she married in 2003.

Although the first child always had a good relationship with her parents, her husband had a falling out with the father. The second daughter spent a great amount of time caring for her parents, especially as they aged, he writes.

In 1995, the couple executed identical wills, stipulating that upon the death of the surviving spouse, two-thirds of the interest in the family home (the Beck Drive property) would go to the second daughter, and one-third would go to the first. The remainder of their estate would be divided equally between the two daughters, says the article.

The parents both died in 2009. Following their deaths, the first daughter learned that her parents’ only significant asset had been the Beck Drive property — and that her parents had effectively gifted this asset to her sibling while they were living, as they had sold the Beck Drive property in 2006, and put the money towards a new home which they lived in with the second daughter and her husband until their deaths, writes Duensing.

The second daughter and her husband were named as the sole titleholders of this property, he adds.

As a result, the first daughter inherited almost nothing, and she subsequently brought an action against her sibling, arguing that the parents’ contribution to the second property occurred as the result of undue influence.

The trial judge dismissed the first daughter’s claim.

“The doctrine of undue influence protects individuals from ‘abuse of trust, confidence or power,’ the court explained, but it does not save individuals from ‘bad bargains’ or the consequences of their own folly,” he writes.

“The judge acknowledged that some measure of influence usually exists in trusting relationships: this, in itself, is not sufficient to establish undue influence. Rather, the courts will consider the factual circumstances that led up to a gift being bestowed,” adds Duensing.

In this case, he says, the judge could not identify any act of coercion or domination that would support a presumption of undue influence.

On appeal, the first daughter argued that the trial judge had erred in concluding that a “specific act of coercion or domination” was necessary to make a finding of presumed undue influence, but was unsuccessful.

The appeal court was satisfied that the trial judge had properly considered the totality of the relationship between the second daughter and the parents in concluding that undue influence did not exist, emphasizing that there must be facts showing that one person dominated the will of the other in respect of a specific transaction, says Duensing.

Although the doctrine of undue influence can be an important tool for unwinding transactions that were made as the result of domineering or abusive relationships, this case highlights the fact that “it is not an effective tool for nullifying transactions that simply strike an aggrieved party as unfair,” writes Duensing.

“The person challenging such a transaction must be able to point to specific actions within the relationship that would support a finding of undue influence,” he adds.

To Read More Matthias Duensing Posts Click Here