What is undue influence?
Undue influence aims to protect individuals from being taken advantage of in a transaction by someone who exerts control over them. The finding allows a court to invalidate documents where the influence of a powerful figure undermines an individual’s ability to make their own decisions. It applies to a wide variety of transactions, including contracts, wills, bequests, gifts and property transfers.
Influence or persuasion is not sufficient to establish undue influence unless it amounts to coercion.
What are the elements?
The legal test was established in Geffen v. Goodman Estate.[1] It can be shown in one of two ways:
- 1) Proving actual undue influence or
- 2) Proving there is a coercive or unequal relationship (or presumed undue influence)
For the second category, to see whether the presumption applies, courts must examine:
- The relationship between the parties and;
- The nature of the transaction itself.
In analyzing the relationship between the parties, a court must determine 1) if one party has significantly more power or 2) whether there is potential for domination in the relationship itself.[2] In any case, there must be an element of dominance, coercion or abuse of power. Relationships recognized as having this kind of power imbalance include:
- Solicitor and client;
- Parent and child;
- Guardian and ward.[3]
There is no set list – each relationship must be analyzed on its own facts and context.
In analyzing the nature of the transaction, a court must assess whether the transaction was unfair either because 1) one party received an unfair disadvantage or 2) one party received an unfair benefit.[4]
Unlike presumed undue influence, actual undue influence is not reliant on any specific category of relationship. Instead, it involves proving that actual misconduct or coercion took place.[5]
Testamentary Undue Influence
In Wills and Estates Disputes, undue influence can be one means of disputing a will. The circumstances surrounding the creation of wills and other testamentary documents can often make coercion more likely. For example, elderly individuals preparing a will can be vulnerable to the influence of caregivers due to psychological or physical dependence. This is especially true where their capacity is in question.
In Gironda v Gironda, the Court provided a non-exhaustive list of indicators:
- Dependence on a beneficiary for emotional and physical needs;
- Social isolation;
- Recent family conflict;
- Recent bereavement;
- Where they made a new will that is inconsistent with past versions and;
- Where there are also changes to other legal documents, such as powers of attorney.[6]
When analyzing a testamentary document, courts give great importance to what the testator intended. In Banton v Banton, Justice Cullity applied the doctrine to testamentary documents, stating that:
“A testamentary disposition will not be set aside on the ground of undue influence unless it is established on the 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 that of the deceased.”[7]
What is the consequence of a finding of undue influence?
If a plaintiff establishes both elements, it creates a presumption of undue influence. The onus shifts to defendant to rebut this presumption.
This can be done by showing that the individual entered into the transaction as a result of their own “full, free and informed thought”.[8] This can involve proving that no actual influence was used or that the plaintiff received independent advice. If a court makes a finding of undue influence, a plaintiff gets to determine if they want to nullify the document.
What can practitioners do to address undue influence during will drafting?
The British Columbia Law Institute has published a guide on recommended practices for will practitioners who suspect undue influence, available online at: https://www.bcli.org/sites/default/files/undue%20influence_guide_final_cip.pdf
These practices include:
- Keeping an eye out for ‘red flags’, including:
- Characteristics of the testator, such as isolation, language barriers, abuse, dependency, impaired cognitive function, and self-neglect and;
- The circumstances, such as the presence of an overly involved caregiver, a recent death of a close friend or family member, and frequent, sudden and/or significant changes to the will.
- Taking instructions from the testator alone;
- If needed, hiring an independent interpreter, rather than relying on a caregiver or family member;
- If there are red flags, asking the testator about their decision-making, using open-ended questions;
- Asking the testator about their relationships to explore whether there is an element of dependence or subordination;
- Assessing whether the testator is experiencing financial, psychological or physical abuse;
- Arranging a medical assessment if there is a concern about capacity;
- Gathering information from third-parties, such as the testator’s physician, accountant and acquaintances (with consent);
- Documenting factors and events that give rise to a suspicion of undue influence.
Thank you for reading. Please contact us if you require legal advice respecting undue influence and the validity of legal transactions or documents.
[1] Geffen v. Goodman Estate, [1991] 2 SCR 353. [“Geffen”].
[2] Geffen at para 43.
[3] Geffen at para 43.
[4] Geffen at para 44.
[5] Geffen at para
[6] Gironda v Gironda, 2013 ONSC 4133 at para 77.
[7] Banton v Banton, (1998) O.J. No. 3528 (Gen. Div.) at para 89.
[8] Geffen at para 46.