Nov 18, 2020

Hiring the New Lawyers Creates a Finding of Undue Influence

Slover v. Rellinger, 2019 ONSC 6497 (CanLII)

Will challenges among siblings are not uncommon, especially when a parent leaves a substantial legacy to one child and completely disinherits the other one. The case of Slover v. Rellinger, 2019 ONSC 6497, stands out for the complexity of the issues involved and the large sum of money at stake. Justice Sanfilippo presided over a trial lasting more than 20 days, and wrote an 84-page decision that is a useful illustration of some of the key principles involved in Will challenges.

Will challenges of this type usually involve two main arguments: that the deceased lacked testamentary capacity to make her Will, and/or that she succumbed to undue influence from the child who received the larger inheritance. The decision in the present case once again demonstrates that proving lack of capacity is a difficult challenge in the absence of clear evidence of a disabling mental illness. Mere eccentricity or unreasonable behaviour by the deceased is not sufficient to support an argument of incapacity.

Proving undue influence is also a significant challenge. Merely persuading, nagging or cajoling the testator does not meet the test. It is necessary to prove that the influence overcame the wishes of the testator, and caused her to agree to things that she really did not want. In the present case, the complex series of financial maneuvers organized by the son, through a host of documents and financial rearrangements using lawyers and advisers that he retained on behalf of his mother, was found to meet the test.

Facts of the Case

Gertrude Rellinger of Kitchener died in 2016 aged almost 94. She and her late husband had been remarkably astute investors who amassed a substantial fortune. She had two children, Joan Slover and James Rellinger. She had been generous to both of them during her lifetime, making gifts totalling more than $14 million.

In 2008, Gertrude made a Will that left her wealth to each of her two children in equal shares. In the following years, there was increasing hostility and a degree of estrangement between Gertrude and Joan. Gertrude did not like the retirement home in which she had been placed at first, and blamed Joan for the decision. There was one period in which they did not speak for about six months.

In 2013, Gertrude changed her Will to say that James would receive 75% of her fortune and Joan only 25%. At her death, she still had about $21 million. However, in the years between 2013 and 2016, her assets were all shifted into joint accounts with James, which purported to give him a right of survivorship. These were backed up with documents stating that she intended these to be the property of James after her passing, rather than being held in trust for her estate. If these post-2013 maneuvers were allowed to stand, the 25% share of the estate left to Joan in the 2013 Will would have amounted to nothing.

Joan sued, arguing that not only were the later maneuvers invalid because of undue influence, but that her mother lacked testamentary capacity when she signed the 2013 Will. If she had been successful in that argument, the 2008 Will would come into force again, and she would be entitled to half of the estate.

Testamentary Capacity

The classic 19th century English case of Banks v Goodfellow laid out the principles of what constitutes testamentary capacity, and these principles continue to be applied in Canada. In that case, the testator Mr. Banks had delusions that he was being persecuted by devils. In spite of that, the court ruled that he had testamentary capacity, because his insane delusions did not affect his understanding of his financial assets or obligations. Given that this is the governing case, it should be obvious that a Will challenge based on testamentary capacity faces a difficult evidentiary burden.

There are five elements in the Banks v Goodfellow analysis, and Joan only challenged based on one of them. As noted by the judge, “Joan conceded that, throughout, Gertrude understood the nature of a Will and its effect; that she understood the nature and extent of her property relevant to the disposition; that she was capable of evaluating the claims of those who might expect to benefit from her estate, and; that she was capable of communicating a clear and consistent rationale for the distribution of her property on her death.”

Justice Sanfilippo observed that it would have been futile for Joan to argue that the deceased did not understand her assets: “Not only was Gertrude well-aware of her holdings, but she earned over $800,000 on her investments in 2013, at 91 years of age.”

The fifth criterion for capacity in Banks v Goodfellow is whether the testator suffers from delusions or a mental disease that interferes with her ability to make a “rational disposal of property.” In particular, “if insane suspicion, or aversion, take the place of natural affection; if reason and judgment are lost, and the mind becomes a prey to insane delusions calculated to interfere with and disturb its functions,” then her testamentary disposition will be void.

Joan argued that the antipathy that her mother developed towards her was based on an insane delusion, but the judge rejected this based on the jurisprudence that requires a very high standard of proof:

[311] The question that I must answer is whether Gertrude’s belief that Joan was an uncaring, unkind, inattentive daughter who was untrustworthy were “fixed, false beliefs”, as defined by the expert psychiatrists. Were they, on the evidence that I have accepted, delusions? This is more than Gertrude getting the facts wrong or misinterpreting a situation or exaggerating or posturing. This is more than Gertrude being vindictive, spiteful, mean-spirited, or unforgiving. This is a persistent belief in a state of facts that no rational person could hold to be true but rather exist only in the mind of the deluded testator…

[336] To assess whether Gertrude suffered from insane delusions, I must determine whether there is a factual basis – even very tenuous, illogical, or illusory – for Gertrude’s belief that Joan was an uncaring, unkind, and inattentive daughter, and that she was untrustworthy….

In assessing the facts, the judge came to the conclusion that there was a factual basis for Gertrude’s attitude towards Joan. He declined to decide whether Gertrude was justified or fair in holding these views about Joan, as that is unnecessary, as long as a sane person could hold such views:

[370] To lose testamentary capacity on the basis that the testator lacks a sound and disposing mind, a lack of mental capacity or mental disorder must be established. This is more than being “eccentric, unfair or capricious…. A will-maker can be unfair, capricious and even mean but still have testamentary capacity so long as the testator does not suffer from a mental disorder.

This is a relatively low standard of capacity to meet. The judge found that Gertrude met it, and therefore she had the capacity to reduce Joan’s share to one-quarter in her 2013 Will.

In this case, as in others of this type, each side provided a psychiatrist as an expert witness on capacity. Joan’s expert was the well-known Dr. Kenneth Shulman, who took the position that Gertrude lacked capacity in 2013. He had the disadvantage of never having met Gertrude, and doing a retrospective assessment based on documents:

[333] I accept Dr. Shulman’s eminent qualifications … but I do not accept his conclusion regarding Gertrude’s testamentary capacity…. Dr. Shulman did not cite a single instance of Gertrude having a fixed, false belief that derived from Gertrude’s conduct….

The psychiatrist testifying for James was Dr. Wendy Yiu, who had met Gertrude on numerous occasions and may have been retained with a view to defending against a future challenge. This raised a question about whether Dr. Yiu was an independent expert. In some instances, a lack of independence can lead to complete disqualification of an expert witness, as in Bruff-Murphy v. Gunawardena, 2017 ONCA 502, where a psychiatrist’s evidence was found to be completely inadmissible. A more common approach is to take this factor into account by giving reduced weight given to her testimony, which is what the judge opted for in the present case. Even with the reduced weight, it appears that her evidence was sufficient to overpower that of Dr. Shulman.

Undue Influence

There is also a high standard for demonstrating undue influence on the testator:

[381] A testamentary disposition will only be invalidated on the basis of undue influence when the person challenging the document establishes, on a balance of probabilities, “that the influence imposed by some other person on the deceased was so great and overpowering that the document reflects the will of the former and not of the deceased”: Banton, at para. 89. In such circumstances, the testamentary disposition does not reflect the intentions of the person who made the testamentary disposition but rather the wishes of the person exerting the undue influence.

[382] … testamentary undue influence consists of “outright and overpowering coercion of the testator”.… I found particularly instructive the statement of the Privy Counsel in Craig, at p. 15, that undue influence is established when “the execution of a paper pretending to express a testator’s mind … really does not express his mind, but something else which he really did not mean”. Cullity J. applied this concept in Banton, at paras. 59-60, when he stated that undue influence is present when a Court finds that the testator or gift giver “simply delegated the will-making power to the other person”.

[386] [other factors include] … substantial pre-death transfers of wealth; using a lawyer previously unknown to the testator and chosen by the alleged influencer; the alleged influencer communicating instructions to the lawyer acting for the testator; the alleged influencer receiving a draft of the document prior to the testator.

That is effectively what Justice Sanfilippo concluded with respect to the post-2013 documents and shuffling of assets. He found that James organized the lawyers and others who prepared these documents, and Gertrude did not have the willpower to refuse her consent:

[408] … my assessment that the repetition constitutes the latter and not the former is supported by analysis of the remarkable speed and frequency by which James mobilized the changes to Gertrude’s testamentary dispositions, many at times when Gertrude was about to be admitted to hospital or recently discharged.

[409] I find that the number of changes made by Gertrude the documents executed in the period from August 2013 to September 2014 pertaining to the distribution of her wealth, the speed at which they were done, the repetition of similar concepts through complicated documents totalling 19 in 13 months and the presentation of so many of them to Gertrude while frail are, on the evidence presented in this case, factors that are suggestive of undue influence.

[410] All of the steps taken by Gertrude in the Post-August 2013 Documents were done with a lawyer previously unknown to her. Gertrude’s long-standing lawyer, Mr. McCarter, had been replaced.

[411] As I have explained, all the lawyers and professionals who interacted with Gertrude after August 2013 were chosen and retained by James….

In sum, a situation where one beneficiary takes a heavy-handed role in the process of decision-making constitutes the exercise of undue influence. As a result of his finding that all these changes were made through undue influence, the judge found that the assets that James held in joint accounts with his mother were held by him as a trustee on behalf of the estate. James did not have a right of survivorship, and therefore, the assets revert to the estate. However, based on his ruling that Gertrude had capacity to make her 2013 Will, and that change was made without undue influence, James would still inherit three-quarters and Joan only one-quarter.

Peter Spiro is counsel to Rogerson Law Group for estate litigation and planning. This article is for general information purposes and you should seek specific advice for your particular case.