Undue Influence, Joint Tenancy, the Right of Survivorship, & the Family Home
Undue Influence, Joint Tenancy, the Right of Survivorship, & the Family Home.
In the recent case McMaster Estate v McMaster, 2021 BCSC 1100, important issues pertaining to common Wills, Estates, and Trusts Litigation problems were discussed. Namely, this case covered the issues of Undue Influence, Joint Tenancy, and the Right of Survivorship.
Undue Influence is a legal doctrine to prevent elder individuals from being taken advantage of by others; most often, their children or spouses.
The deceased in this case had six children and left no will; she had passed away in 2015. Three years prior to her death, at the age of 81, the deceased purchased a home with her youngest child (“Brad”) naming him as a Joint Tenant; Brad did not contribute any monies to the purchase of the home yet was named as a Joint Tenant. As Madam Justice D. MacDonald described: “Brad and [the Deceased] had an unconventional mother/son relationship. He spent almost every day with [the Deceased] from 2002 until her death in 2015. After they moved to the Sunshine Coast, Brad was [the Deceased’s] only companion. She had little contact with her other children after they moved.
Upon her death, 100% of the property was transferred to Brad under the legal doctrine of right of survivorship. As a result, the five other children brought a claim against the estate suggesting that the Deceased was unduly influenced by Brad.
Ultimately, the Court agreed with the other children and stated that Brad unduly influenced his mother in naming him as a Joint Tenant of the home. As such, the Court determined that Brad was holding the property as a “resulting trust” for the benefit of the entire estate aka all six children.
In this case, Madam Justice D. MacDonald provided an apt summary of the law pertaining to undue influence as follows:
UNDUE INFLUENCE
As noted in paras. 47 to 55, of this case, “undue influence” is a legal doctrine to prevent elder individuals from being taken advantage of by others; most often, their children or spouses. It addresses abuses of trust, confidence, and power spanning a range of transactions, including gifts, bequests, and commercial dealings.
To rebut undue influence, one must establish that the transferor entered into the transaction of her own “full, free and informed thought”
Transactions induced by undue influence may be set aside.
Vulnerability and dependency are the hallmarks of undue influence.
In order to trigger a presumption of undue influence, the first question to address is whether the potential for domination inheres in the nature of the relationship. The second phase of the inquiry involves an examination of the nature of the transaction: Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353 at paras. 40-44.
A relationship of dependency involving a potential for domination may arise among family members: Geffen. A gratuitous transfer from a parent to an adult child does not automatically create a presumption of undue influence. In Wood v. Porter, 2015 BCSC 2354, this Court found a relationship of dependency and domination did not exist between an independent, active, and competent mother and her son. To establish the presumption of undue influence, the plaintiff must establish the existence of a relationship of potential dominance between the parent and the adult child: Modonese at para. 111.
The second phase of the inquiry involves an examination of the nature of the transaction.
To rebut the presumption of undue influence, the defendant must establish that the transferor entered into the transaction of her own “full, free and informed thought”: Geffen at para. 45.
The following factors may be considered when scrutinizing the transaction to determine if Doreen entered into the transaction of her own “full, free and informed thought”:
(i) the lack of actual influence or opportunity to influence her;
(ii) whether she received or had opportunity to obtain independent legal advice;
(iii) her ability to resist any such influence;
(iv) whether she knew and appreciated what she was doing;
(v) whether there was undue delay in confirmation by Doreen; and
(vi) the magnitude of the benefit or disadvantage: Cowper-Smith v. Morgan, 2016 BCCA 200 at para. 50, rev’d on other grounds, 2017 SCC 61; Stewart v. McLean, 2010 BCSC 64 at para. 97.
The Court of Appeal in Cowper-Smith at para. 51 adopted the factors in Coish v. Walsh, 2001 NFCA 41 at para. 23, with respect to the assessment of legal advice provided to the donor:
Whether the party benefiting from the transaction is also present at the time the advice is given and/or at the time the documents are executed;
Whether, though technically acting for the grantor, the lawyer was engaged by and took instructions from the person alleged to be exercising the influence;
In a situation where the proposed transaction involves the transfer of all or substantially all of a person’s assets, whether the lawyer was aware of that fact and discussed the financial implications with the grantor;
Whether the lawyer enquired as to whether the donor discussed the proposed transaction with other family members who might otherwise have benefited if the transaction did not take place; and
Whether the solicitor discussed other options whereby the [grantor] could achieve their objective with less risk to them.
Undue influence does not depend on proof of reprehensible conduct or malicious intent: Modonese at para. 99. The transferee may have acted in the sincere belief of their honesty: Ogilvie v. Ogilvie Estate, (1998) 1998 CanLII 6278 (BC CA), 106 B.C.A.C. 55 (C.A.). It is sufficient to establish that the deceased was reliant on a person and that person exercised dominance over the deceased’s transactions through persuasive influence: Halliday v. Halliday Estate, 2019 BCSC 554 at paras. 215-216.
If you have encountered similar issues or anticipate having to “fight the same fight”, please contact us immediately to help. Time is of the essence and we are here for you. First and foremost, we will file a Certificate of Pending Litigation on the family home. Subsequently, we will commence to fight for YOUR RIGHTS.