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Wills and contracts can be challenged in a myriad of circumstances, including if there was fraud, duress or undue influence. Recently, a Saskatchewan case caught my eye.
I was born and raised on a farm in Saskatchewan — and by happenstance, this case involved our farm neighbours. Leave to the Supreme Court of Canada was dismissed, leaving the last word on the dispute to the Saskatchewan Court of Appeal.
In this case, the deceased’s children sued their stepmother. The children alleged that their stepmother had exerted undue influence over the children’s father as he was dying. Because of this, the children said, they did not receive the farmland they believed they would get on their father’s death.
The husband and wife had been married for 15 years at the time of the husband’s death. Each had been married before; each had children from their prior marriage.
One of the most significant assets the husband owned was two quarter sections of farmland which he had inherited from his parents.
Just after the husband’s cancer diagnosis, the husband went to a trust company to have them prepare his will. A financial advisor took instructions for the will; the will was prepared at the head office of the trust company. In the will, the husband gave his wife a life interest in the farmland, so that she would receive the income from the farmland during her lifetime. The farmland would then pass to his two children.
At trial, the financial advisor confirmed he gave no legal advice when he took instructions, nor did he specifically remember the meeting.
The husband’s health continued to deteriorate. A few months later, the husband and wife went to the trust company again at the husband’s request. This time they got the necessary documents to change title to the farmland from the husband’s name alone into joint names. They filled out the documents to change title themselves, and returned to the trust company to have their signatures notarized. Again, no legal advice was given. The title change was registered by the couple themselves at the land titles office.
The husband died about 10 months later.
While much of the trial centred on other issues, the case is interesting in its review of the law of “undue influence.”
The children here alleged that the wife had unduly influenced the husband to change his mind (as reflected in his will) by transferring the farmland into joint names. The transfer superceded the will, and meant that when the husband died, it would be owned solely by the wife. This would allow her to sell the farmland if she wished to do so.
In a farm family, the farmland usually passes to the next generation. By transferring the land into joint tenancy with the children’s stepmother, the husband broke the unwritten rule of the intergenerational family farm.
Undue influence means that the person doing the act (here, the transfer into joint tenancy) is so dominated by another, that it is not actually the ‘act’ of the person who did it.
In some special relationships, like a parent-child relationship, undue influence is assumed. In this case, the trial judge held that spouses do not necessarily fall into that ‘special relationship’ category. If it had been a ‘special relationship’, the wife would be required to prove that the transfer was made by the husband’s “full, free and informed thought.”
But first, Justice Chow, had to decide whether there was a ‘special relationship’.
In deciding this, he considered, among other things, the husband’s personal circumstances, including his education, health, living arrangements, dependence on the wife, the circumstances at the time of the transfer and whether legal advice was given.
Many of the facts suggested that a ‘special relationship’ existed: the husband had a Grade 8 education, terminal cancer, was on pain medication, had to be driven by the wife to and from appointments, and had not received legal advice about transferring the land into joint names.
The son’s evidence was that when his father had re-married, he had “lost his man card.” Both children gave evidence that he and the wife were almost inseparable.
The children argued that undue influence should be assumed, and because the husband did not have legal advice about the transfers, the transfers should be set aside. They said that their father was dependent on the wife, and that he was in a confused and vulnerable state when the land was transferred into joint names.
The trial judge found that there was no evidence to suggest that the husband had become confused, or that he was reliant on his wife, emotionally, physically or financially, except that she drove him to his appointments. He also found that while the presence of independent legal advice is an important consideration, its absence was not necessarily fatal.
As a result, on the issue of undue influence, the judge found that the particular circumstances of this relationship did not assume undue influence. He also found that, if he was wrong and there was a presumption of undue influence even though there had been no legal advice, there was no actual undue influence exercised by the wife over the husband when he transferred the farmland into their joint names.
The Saskatchewan Court of Appeal agreed with the trial judge’s decision.
When legal advice is given, the lawyer generally keeps a record of the advice, and in the ordinary course, the effect of the transfer is explained to the client.
In this case, had legal advice been given, the lawyer’s file would have been produced at trial and the lawyer would have been a witness, whose evidence would doubtless have been that the husband was advised and understood the effect of the transfer into joint names. Very likely, this would have ended the dispute.
Instead, the family went through a lengthy and expensive trial, appeal, and an application for leave to appeal to the Supreme Court of Canada.
This could have all been avoided if they had simply gotten legal advice when title was transferred.
Laurie H. Pawlitza is a senior partner in the family law group at Torkin Manes LLP in Toronto.
Copyright Postmedia Network Inc., 2019