The recent decision Patterson Estate (Re), 2017 NSSC 221 from the Court of Probate for Nova Scotia provides a useful example of when Courts will infer the presence of testamentary fraud to invalidate a will.
Joan Patterson (the “Deceased”) died on June 13, 2016 at the age of 76 from pulmonary fibrosis. She was predeceased by her husband Watson Patterson (“Watson”) who died four months earlier on February 16, 2016. The Deceased and Watson had two daughters and two sons: 1) Marlene; 2) Darlene; 3) Randy; and, 4) Reid.
On September 9, 1998, the Deceased and Frank executed joint wills (the “1998 Wills”) which left their respective estates to the surviving spouse, and if there was no surviving spouse, left their matrimonial home to Darlene and divided the remainder of the estate equally between all four children. On February 4, 2014, the Deceased and Frank signed identical Codicils to the 1998 Wills which specified that if there was no surviving spouse, Randy was to receive a parcel of land approximately 6.45 acres in size. The 1998 Wills remained in place until May 13, 2016 (i.e. one month before the Deceased died), when the Deceased executed a new will (the “2016 Will”) which named Marlene as sole executor and beneficiary of her estate.
Following the Deceased’s death, legal action predictably ensued. Darlene, Randy and Reid commenced an application challenging the validity of the 2016 Will and requiring that it be proven in solemn form. They subsequently commenced a separate application seeking a declaration that funds held jointly by the Deceased and Marlene are held in a constructive trust by Marlene for the benefit of the estate. Both applications were heard together.
Darlene, Randy and Reid initially challenged the 2016 Will on the sole basis that it was the product of undue influence exerted by Marlene over the Deceased. In post-trial written submissions, they expanded the grounds of their challenge to further contest that the Deceased knew and approved of the contents of the 2016 Will and that she lacked testamentary capacity at the time that she signed it. Justice Robert Wright summarily dismissed the latter two grounds and restricted his reasons to the undue influence issue.
Interestingly, in light of the 2016 Will, Marlene was estranged from her parents for approximately 20 years prior to 2012 whereas Darlene, Randy and Reid were never estranged from their parents. In fact, Randy and Reid lived in homes directly beside their parents’ home and Darlene lived with her parents from 2012 onwards. The facts leading up to the execution of the 2016 Will are summarized below:
- Fall of 2015: Watson was diagnosed with cancer and his health declined sharply.
- December 14 – 23, 2015: The Deceased was hospitalized due to the progression of her pulmonary disease. During her hospitalization, she expressed an intention to exclude Randy from her will because of her displeasure with his marital situation.
- January 11, 2016: A contentious family meeting was held between the parents and all four children at which the Deceased stated her intention to remove both Randy and Reid from her will. Watson subsequently told Reid and Darlene that he had spoken to the Deceased and that no changes would be made to their wills. According to Darlene, Marlene approached her about five days after the family meeting and asked her to help convince the Deceased to remove Randy and Reid from her will. Darlene declined to do so.
- February 16, 2016: Watson passed away.
- March 4, 2016: The Deceased moved from her home to Marlene’s home. The Deceased had an open door policy at her home and her children visited her frequently (and Darlene lived with her). Marlene did not have an open door policy and insisted that her siblings phone her ahead of time before visiting the Deceased. Marlene also arranged for all incoming calls to the Deceased’s landline to be forwarded to her. Darlene, Randy and Reid believe Marlene took these steps to isolate the Deceased from them.
- March 9 – 16, 2016: The Deceased was hospitalized again for chronic pulmonary fibrosis complicated by pneumonia.
- May 13, 2016: The Deceased signed the 2016 Will as well as a power of attorney for property document and a personal directive appointing Marlene as her substitute decision maker. Randy had previously been the Deceased’s substitute decision maker.
- June 1, 2016: A bank employee attended Marlene’s home and the Deceased signed documents closing a joint bank account she held with Randy and opening a new joint account in her name and Marlene’s name. Marlene was in the room when Marlene signed the documents. The balance from the old account ($31,856.65) was then transferred to the new account.
- June 13, 2016: The Deceased passed away.
The Deceased’s long-time lawyer, Cyril Randall (“Mr. Randall”), provided his evidence by way of affidavit. He stated that Marlene contacted him in mid-April and requested that he attend her home to meet with the Deceased because the Deceased wished to make changes to her will. Mr. Randall attended Marlene’s home on April 20, 2016, and met privately with the Deceased. During this meeting, the Deceased informed him that she wished to leave all her property to Marlene and that she knew this may cause problems with her other children. Mr. Randall wisely advised the Deceased that if she wished to do this, she should write a letter detailing her reasons why. He then returned to the office and prepared a memorandum summarizing the meeting and stating that he was satisfied that there were no issues of capacity or undue influence at play. He then referred the matter to a colleague, George Clarke (“Mr. Clarke”), to prepare the necessary documents. Mr. Clarke attended Marlene’s home on May 13, 2016 and the Deceased executed the 2016 Will.
The key events from this author’s perspective took place on the evening of May 12 and the morning of May 13 when a letter was written explaining the reasons why the Deceased wished to change her will.
In cross-examination, Marlene acknowledged that on the evening of May 12, in her presence, the Deceased made notes on a piece of paper concerning the changes to be made to her will. Marlene denied having any discussion with the Deceased about what to put in those notes and claimed that she merely sat beside the Deceased on a couch while the Deceased wrote out her thoughts. The following morning, Marlene gave the Deceased a blank pad of paper on which to write the reasons why she wished to change her will. The Deceased still had the notes she had made the previous evening. Marlene then left the home. Shortly thereafter, the Deceased’s caretaker, Lisa Metcalfe, noticed that the Deceased was having trouble writing a letter and asked if she needed help. The Deceased replied that she did not know how to spell or understand these big words (the Deceased only had a Grade 5 education). The Applicants suggest the Deceased said this because in writing the letter she was copying from notes she had made the night before with Marlene’s participation if not authorship. Suspiciously, the notes that were made on the evening of May 12 did not make their way into evidence. The notes made on the morning of May 13 did and read in part:
Here are the reasons I decied (sic) to make a new Will. (1) Ever since my husband was diagnosed with cancer, Marlene was the one who took him to all his doctors appointments, made sure he got all his medicines and looked after him right up until he passed away; (2) She (Marlene) also made all the arrangements for his funeral and memorial service; (3) As I have been in a hospital bed since Christmas last year, my other three children didn’t want anything to (do) with seeing that we were taken care of; (4) She (Marlene) has been looking after me 24 hours a day since then; (5) None of my other three children made any effort to help Marlene with any care or to help her to deal with all my medical problems; (6) In the past, all my other children have received either pieces of land or large amounts of money and I feel that should be enough.
On cross-examination, Marlene acknowledged that reasons (1) to (5), above, are false. Justice Wright found reason (6) to be partially true but noted that the inter vivos gifts made to the four siblings paled in comparison to the value of the estate.
Justice Wright then considered the question of what happened to create these false beliefs in the Deceased’s mind. His analysis begins with a rather entertaining and damning assessment of Marlene’s credibility in light of numerous cringe worthy inconsistencies in her evidence, such as the following:
The most significant of these inconsistencies pertains to the questioning of whether or not Joan had ever said anything to Marlene about her thoughts that her three other children no longer cared about her. At trial, Marlene maintained that her mother ‘never ever’ told her any such thing but rather that her mother was pleased with the amount of phone calls and visits she was getting while at Marlene’s home. She was then faced with her discovery evidence, however, that there was an occasion about a month and a half after the move (which would be about mid April and shortly before she contacted Mr. Randall) when her mother started crying and said that she felt that her other children no longer cared about her. When confronted with this aft trial, Marlene acknowledged that she herself did believe that her siblings care about their mother. However, she chose not to tell her mother that at the time or to disabuse her mother of that notion in any way. She simply testified that she chose not to respond to that comment. When pressed on that, her answer was ‘No particular reason, I just chose not to respond to her comment’.
Justice Wright notes that there is no direct evidence of undue influence by coercion and considers whether an inference of testamentary fraud on the part of Marlene should be drawn within the sphere of undue influence. In answering this question, Justice Wright relies on two key pieces of evidence, namely: (1) that Marlene chose not to respond to the Deceased in mid-April when the Deceased stated that she thought her other children no longer cared about her; and, (2) the Deceased wrote notes in Marlene’s presence on the evening of May 12 outlining her reasons for changing her will. With respect to Marlene’s insistence that she did not help the Deceased make these notes, Justice Wright states: “I simply do not accept Marlene’s evidence in this regard and I am lead to the conclusion that in some manner she had a hand in creating the contents of that letter, preying upon her mother’s face beliefs that her other children no longer cared about her or her well-being.” He then concludes:
It is not only from these suspicious circumstances but rather from the evidence as a whole, including Marlene’s lack of credibility, that the Court is prepared to draw the inference that Joan was induced to form the false beliefs she held about her other children’ lack of caring, through manipulation and deceit on the part of Marlene under whose control she remained after the move. Joan then acted on those false beliefs in changing her Will as she did. I therefore find that the actions of Marlene, on a balance of probabilities, crossed the line into the sphere of undue influence.
Justice Wright therefore declares the Deceased’s 2016 Will to be invalid. He also finds that the same inference of undue influence should be drawn in respect of the transfer of funds into the new joint bank account such that the transfer should be invalidated and the funds in that account at the date of the Deceased’s death are declared to be an asset of Joan’s estate.
BRIEF SUMMARY OF THE LAW OF UNDUE INFLUENCE
The following summary is based on material found in John Poyser’s book Capacity and Undue Influence.
There are two general categories of undue influence: 1) Testamentary undue influence; and, 2) Inter vivos (“between living people”) undue influence.
- Testamentary Undue Influence
Testamentary undue influence has two sub-types: 1) Coercion; and, 2) Fraud. The classic formulation of the first sub-type was articulated by Sir Jame Hannen in the 1885 English decision Wingrove v. Wingrove:
To be undue influence in the eye of the law there must be – to sum it up in a word – coercion. It must not be a case in which a person has been induced by means such as I have suggested to you to come to a conclusion that he or she will make a will in a particular person’s favour, because if the testator has only been persuaded or induced by considerations which you may condemn, really and truly to intend to give his property to another, though you may disapprove of the act, yet it is strictly legitimate in the sense of its being legal. It is only when the will of the person who becomes a testator is coerced into doing that which he or she does not desire to do, that is undue influence.
The second sub-type of testamentary undue influence – testamentary fraud – is often easier to prove. It is this type of testamentary undue influence that was found by Justice Wright to exist in the Patterson decision. In his reasons, Justice Wright quotes from the following description of testamentary fraud contained on page 318 of the book Capacity and Undue Influence authored by John Poyser (who is Firm Counsel at WEL Partners):
Coercion forces a person to do something against his or her will. Fraud operates differently. Testamentary fraud is an effort to fool a person into believing a false state of affairs that is then instrumental in causing that person to make a testamentary gift that otherwise would not have been made. As indicated earlier, persuasion is permitted, but persuasion is not permitted when it is mounted on a foundation of deliberate lies. Testamentary undue influence by coercion is difficult to establish. It is often pled but early proved as the facts rarely support it. Undue influence by fraud will be more easily sustained. Isolation, falsehood, and ingratiation are a common recipe employed by predatory family and peers in a bid to subvert a vulnerable person’s property at death.
With respect to the two sub-types of testamentary undue influence, the burden of proof always rests with the party alleging undue influence (Voux v. Hay,  2 S.C.R. 876). The standard of proof is proof on a balance of probabilities. There can be no presumption of testamentary undue influence, even when suspicious circumstances are present. Testamentary undue influence of either type must always be proven by the party alleging it.
- Inter vivos Undue Influence
Inter vivos undue influence has two sub-types: 1) undue influence by conduct aka ‘actual undue influence’; and, 2) undue influence by relationship.
Cases of actual undue influence are “cases in which there has been some unfair and improper conduct, some coercion from outside, some overreaching, some form of cheating” (Allcard v. Skinner (1887) L.R. 36 Ch. D 145 (Eng. C.A., Ch. Div.). “In… the case of actual undue influence something has to be done to twist the mind of a donor…”: (Drew v. Daniel,  EWCA Civ 507 (Eng. C.A.)).
With respect to actual undue influence, the burden of proof always rests with the party alleging undue influence and the standard of proof is proof on a balance of probabilities.
The second sub-type of inter vivos undue influence is described by John Poyser on p. 498 of Capacity and Undue Influence as follows:
Injecting a special relationship into the context of inter vivos undue influence changes the way in which it is treated by the courts… a relationship of the proper type will change the manner in which the court deals with the gift or other inter vivos wealth transfer in three ways. First, it changes the level of sensitivity the court will employ in assessing the conduct. Inside such a relationship, the mildest of pressure can amount to undue influence. Outside of such a relationship, the conduct must be more direct and flagrant. Second, and related to the first, the relationship may be of a type that creates duties owed by one party to the other. Where that is the case, omissions can amount to a breach of duty. Depending on the relationship, it can create a duty to advise, a duty to disclose with candour, a duty to protect or a duty to put the interest of a ward ahead of one’s own… The reverse of permitting persuasion, those duties can effectively amount to an obligation to resist a gift rather than encourage it. Third, the presence of the relationship, coupled with a gift that cannot be accounted for by normal motives, brings the evidentiary presumption of undue influence into play. The presumption allows the court to conclude, as a factual inference, the gift must have been the product of some unseen and unrecorded conduct on the part of the person receiving it.
The type of relationship that will qualify is any relationship “between persons standing in a relation of confidence to each other.” (Billage v. Southee (1852), 68 E.R. 623 (Eng. V.-C.). As a result, John Poyser observes that “(e)ach relationship, in essence, stands or falls on the facts particular to the situation and the transaction at hand”: Capacity and Undue Influence, p. 500.
With respect to undue influence by relationship, the burden of proof rests with the recipient of the gift to show on a balance of probabilities that it was not procured by undue influence. All that is necessary to trigger this presumption of undue influence is the presence of a special relationship and a gift that calls for explanation, i.e. one that cannot be accounted for by normal motives.
The Patterson decision contains a good summary of the law as it relates to fraud as a subspecies of testamentary undue influence. It is also a useful example of when a court will be prepared to draw an inference of testamentary fraud absent direct evidence on point.
As stated above, Justice Wright invalidated both the 2016 Will and the transfer of funds into the joint bank account held by the Deceased and Marlene. Unfortunately, the decision appears to invalidate the transfer of funds pursuant to the same legal test for testamentary fraud as the 2016 Will even though the transfer of funds occurred while the Deceased was alive. The relevant paragraph of the decision reads:
I am persuaded by the applicants that the same inferences of undue inference should be drawn in respect of both the 2016 Will and the transfer of funds into the new joint bank account (which occurred about two weeks apart). I need not recite the evidentiary basis for the drawing of that inference again here. Suffice it to say that I am satisfied that Joan gave the instructions she did for the transfer of the joint bank account in Marlene’s favour based on the same set of false beliefs she was induced to form in changing her Will, also in Marlene’s favour.
In this author’s respectful view, it would have been preferable if the test for inter vivos undue influence had been explicitly applied to invalidate the transfer of funds. Or alternatively, the Court could have avoided the issue of inter vivos undue influence by finding that Marlene held the funds by way of constructive trust for the Deceased’s estate which is what Darlene, Randy and Reid requested in the second application they commenced.
Testamentary undue influence is notoriously difficult to prove because conduct amounting to it rarely happens in the open and the main witness usually dies before legal action is commenced. Litigants often need a combination of luck and a very thorough lawyer to succeed with such claims. For example, the Applicants in Patterson may not have won if Marlene had been more modest in her ambitions and only caused the Deceased to exclude Randy from her will (since the Deceased herself had expressed an intention to do so in December 2015 before she was living with Marlene). The Applicants were also lucky that Marlene could not stick to her story that the Deceased never said anything to her about her thoughts that her three other children no longer cared about her.