Case Comment: Slover v Rellinger 2019 ONSC 6497 on Testamentary Capacity & Undue Influence

In this lengthy (82 page) decision, Justice Sanfilippo addresses an estate dispute involving tense family relationships, complex estate planning documents, questions concerning testamentary capacity, undue influence, and the admissibility of a retrospective capacity assessment.

Background

This case arises from the death of a 94-year old “autocratic and strong-willed, dominate and controlling” woman who was also a “skillful stock investor”^[1] who managed to accumulate over $21 million in wealth before her death.

In 2016, the testator died leaving behind two adult children, a son and a daughter, to whom she had already gifted more than $14 million between 1989 and 2013. The siblings had an acrimonious relationship with each other, and both had a difficult relationship with their mother yet for different reasons and at different times.

Within days of her death, her son sued his sister seeking a declaration that their mother’s entire estate should pass to him, while the daughter responded that the wealth should be divided equally between them.

One of the issues was the validity of a will executed in 2013 (the “2013 Will”) which provided that the son would receive 75% of her estate. Previous wills split her assets 50/50. The daughter alleged that the 2013 Will was not valid on the grounds that their mother lacked testamentary capacity to execute the will (specifically that she suffered from insane delusions that influenced her will-making) and was unduly influenced by her brother.

In 2013, upon learning about the new Will, the son had immediately taken steps in an attempt at a pre-emptive strike, knowing that his sister would likely challenge the Will. Shortly after she signed the 2013 Will, in her 92nd year, the mother also executed nineteen different complex documents, including several testamentary, inter vivos gifts, and transfers (the “Post 2013 Will Documents”). These documents were allegedly executed at the direction of the son in a “flurry of complex legal, banking, and estate planning activity” with a team of three lawyers and an “on-call capacity advisory.”^[2] The net result of which meant that the mother’s wealth had been transferred to the son, “stripping her estate of any value and rendering any of her Wills meaningless.”^[3]

The court had to determine two issues:

1. What was the effect of the Post 2013 Will Documents? If they were valid, they would govern the distribution of the mother’s assets.
2. If the Post 2013 Will Documents were not valid, was the 2013 Will valid?

Legal Analysis

Testamentary Capacity: 2013 Will and Testamentary Dispositions Post 2013 Will

When the mother approached her long-time lawyer in 2013 to change her Will, the lawyer retained a research lawyer to assist him in identifying the appropriate steps to determine testamentary capacity and retained a capacity assessor to conduct a capacity assessment.^[4]

While the capacity assessor concluded that the mother lacked testamentary capacity, the lawyer did his own assessment and found that she did have the requisite capacity.

Justice Sanfilippo accepted the lawyer’s evidence and conclusions over that of the capacity assessor. The capacity assessor based her conclusion on the fact that the mother did not have a “logical thought process in her decision-making.”^[5] The assessor found that the mother’s beliefs that her daughter was uncaring and unkind were unfounded and thereby delusional. The assessor based this finding on unspecified information she received from staff at the mother’s care home and the mother’s physician that the daughter visited regularly and that the complaints about the daughter were unfounded.^[6]

The lawyer, on the other hand, had a history with the mother and had training and familiarity with the principles of testamentary capacity. He was well-positioned to assess the mother’s capacity. The lawyer reviewed the current state of the law, applied the “traditional factors” set out in Banks v Goodfellow,^[7] and asked specific questions to probe the relationship between mother and daughter. He concluded that the mother’s “disaffection” with the daughter was the result of a desire to reduce the inheritance and not based on delusions.

Citing the Ontario Court of Appeal in Stekar v Wilcox,^[8] Justice Sanfilippo found that the “test for determining testamentary capacity has been well-established,” setting out the Banks factors. While there is a presumption of testamentary capacity, it is displaced when suspicious circumstances regarding the preparation and execution of the Will are established. If the suspicious circumstances pertain to mental capacity, the propounder also has the legal burden for establishing that the testator had the requisite decisional capacity to execute the Will.

Suspicious Circumstances

Justice Sanfilippo found that some of the Post 2013 Will documents were testamentary dispositions and found that the circumstances surrounding their execution were “particularly troubling” on the grounds that the mother was presented with them as follows:

. . . without the benefit of preview or counsel. . . The pace and volume of the documents presented to [the mother] throughout the 13-month period from August 2013 to September 2014 also, in my determination, raise suspicious circumstances, as does the factor that, on my findings, [the mother] did not request that many of these documents be prepared on her behalf and most, including those most contentious, were prepared by [the son’s] lawyers.^[9]

While the 2013 Will was directed by the mother and executed by her with the assistance of her long-standing counsel, the evidence by her physician however, called into question the mother’s mental and emotional health at the time of execution. This, along with the conclusion of the first capacity assessment, constituted the suspicious circumstances.

Insane Delusions & Retrospective Capacity Assessments

The daughter only challenged the mother’s testamentary capacity on one of the five criteria set out in Banks. Specifically, the daughter conceded that throughout, the mother: 1) understood the nature of a Will and its effect; 2) understood the nature and extent of her property relevant to the disposition; 3) she was capable of evaluating the claims of those who might expect to benefit from her estate, and 4) she was capable of communicating a clear and consistent rationale for the distribution of her property on her death. Instead, the daughter challenged the mother’s testamentary capacity primarily on a single ground, being that insane delusions influenced the mother’s will-making.

The daughter contended that the mother’s insane delusions caused her to believe that the daughter was an uncaring, unkind, inattentive daughter who was untrustworthy, and thereby alienated the mother’s affection toward the daughter and influenced her testamentary dispositions in circumstances where the basis for the mother’s beliefs had no factual basis in reality.

Two experts testified. Justice Sanfilippo accepted that a “delusion is a fixed false belief that is out of keeping with one’s educational, cultural and religious background, that is incapable of being altered when shown to be unfounded.”^[10] The daughter relied heavily on the cases of Brydon v Malamas,^[11] and Banton v Banton.^[12] The common thread running throughout these cases is the conclusion that for a testator to be found incapable on the basis of insane delusions, the delusion must be false and fixed, one that is incapable of explanation or rationalization, and it must have taken over the person’s will-making. Anger or resentment based on a factual basis that exists is not enough.

The daughter relied on a retrospective capacity assessment conducted by an expert geriatric psychiatrist (in addition to other evidence) that was based on his analysis of voluminous records that were produced.

The son objected to the admissibility of the expert’s opinion evidence mainly on the basis that the retrospective assessment was not reliable, since the expert had not met the mother, rather had only completed a “paper” review. One of the reasons why the expert could not do a contemporary assessment was that the son refused to allow such an assessment to be completed while the mother was alive. A “voir dire” proceeding was conducted before the court, on the issue of whether the retrospective capacity assessment would be admissible. Ultimately, Justice Sanfilippo admitted the assessment and we wrote about the voir dire decision which came out much earlier and is accessible in this the WEL Partners blog post.

The expert’s opinion concluded that the mother suffered from a delusional disorder causing her thinking, behaviour, and disposition to be influenced by her delusions. The expert’s opinion was formed on his interpretation of her conduct. Ultimately, Justice Sanfilippo did not accept this conclusion in respect of the mother’s testamentary capacity since it was a conclusion based on what Justice Sanfilippo stated are: “presumed facts that I do not accept.”^[13]

Evidence from a second expert, one retained by the son, was admitted on the basis that she was a “participant expert” who conducted her ongoing assessment of the mother when there was no litigation pending. She had met with the mother 22 times in a 14-month period. This expert opinion was that the mother did not suffer from a delusional disorder. Justice Sanfilippo accepted her evidence that as a qualified psychiatrist she saw no sign that the mother had a delusional disorder on the 22 occasions that she observed the mother and did not diagnose any cognitive disorder that affected the mother’s will-making.

Based on the evidence and testimony, Justice Sanfilippo found that the mother did have a factual basis – even tenuous, illogical, or illusory – to hold the beliefs that the daughter was “uncaring, inattentive, and unkind.” As an example, the mother complained that there were several issues with the long-term care home where the mother resided that were never fixed. The daughter sided with the long-term care home, stating that there were no problems. This led the mother to believe that the daughter did not care about her living conditions. Ultimately, Justice Sanfilippo did not accept that those beliefs were based on insane delusions.

Justice Sanfilippo accepted and applied Justice Cullity’s statement in Banton at para 47 that: “an unreasonable conclusion drawn from facts is not by itself sufficient to amount to a delusion that will give rise to testamentary incapacity.” The son discharged his burden in establishing that the mother had requisite testamentary capacity at the time she executed the 2013 Will and at the time she executed the Post 2013 Will Documents.^[14]

Undue Influence: 2013 Will & Post 2013 Will Documents

Justice Sanfilippo noted that the principles of undue influence apply differently to testamentary dispositions than to inter vivos gifts. In inter vivos gifts involving a relationship of influence by a donee over the donor of a gift (found here between the son and the mother), there is a presumption of undue influence. The onus shifts to the recipient of the gift to rebut the presumption. In the case of testamentary dispositions, the burden of proof rests on the party challenging the testamentary disposition to demonstrate that it was the product of undue influence.

Justice Sanfilippo found no evidence of undue influence at the time the mother executed the 2013 Will for several reasons, including that the impetus for the new Will came “entirely and directly, and indeed persistently” from the mother. The son did not know about the change in the Will until after it had been executed.

In analysing whether the mother was unduly influenced with respect to the Post 2013 Will Documents, Justice Sanfilippo made several observations:

• the mother had experienced family conflict at the time of execution of the documents;
• she was socially isolated;
• she made new testamentary dispositions that were inconsistent with the principles that informed her life-long estate planning;
• the number of changes made by the mother, the speed at which things were done, the complicated documents and presentation of so many of them to the mother while frail, were all factors that were suggestive of undue influence;^[15]
• the documents and steps taken were done with lawyers previously unknown to her;
• the lawyers were chosen, retained, and instructed by the son and the documents were prepared by the son’s lawyers; and
• the mother made substantial pre-death transfers of wealth to the son while the mother was dependant on the son for her emotional and physical needs.
Further, in evidence was a voicemail from the mother to her lawyers where it was obvious that she was reading from a note. The son’s “loud, forceful” voice could be heard in the background telling her to “Read it.”^[16]

Justice Sanfilippo found that some of the Post 2013 Will Documents were testamentary dispositions and that the daughter had the burden of proving that the mother was subject to undue influence. He found that she had met this burden. The daughter established that the mother was subject to undue influence that was so significant that the documents did not express the mother’s mind and intention and therefore had to be set aside. Other documents were not testamentary in nature but were gratuitous transfers, inter vivos gifts, and the presumption of undue influence was not rebutted by the son.

Outcome

The Post 2013 Will Documents that were testamentary in nature as well as those that were inter vivos in nature were set aside on the grounds that they had been procured through undue influence by the son.

The daughter however did not discharge the burden of establishing that the mother did not have capacity to execute the 2013 Will. She also did not discharge the burden of establishing that the mother was subject to undue influence in executing the will. Therefore the 2013 Will was “good, valid, and enforceable.”^[17]