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Equitable Remedies for Financial Abuse of the Elderly: Servello v. Servello

This blog post examines yet another case, Servello v. Servello,[1] that involves financial abuse of an elderly person. It considers the doctrine of undue influence. It also addresses the failure to provide independent legal advice and sets aside a transfer on the basis of the legal doctrines of non est factum and mistake. Further, it applies the equitable maxim that he who comes into equity must come with clean hands and therefore disallows a claim for contribution to a property.

Rosina and Carmelo Servello immigrated to Canada from Italy in the 1950s. They acquired a property in North Bay as joint tenants, built a house on it and moved into it with their eight children. Carmelo died in 2006, so Rosina inherited it as the survivor. Their youngest son, Antonio, lived in the basement of the family home with his wife and children. He shared a workshop his father had built on adjacent land that Carmelo and Rosina had also bought. Antonio carried on a furniture restoration and casket making business from the workshop, which was expanded to accommodate this business. He continued to use it exclusively after Carmelo’s death.

Some five months after Carmelo’s death, Antonio attended the registry office with his mother and used a conveyancer to have the title transferred into Rosina’s name as sole owner. However, 13 days later, Antonio went back to the registry office and, with the help of the same conveyancer, transferred the property to himself and Rosina as joint tenants. A few weeks later he had Rosina sign a codicil to her will that would transfer the workshop and the land on which it was situate to Antonio after her death, assuming that it could be severed. It also gave Antonio a right of first refusal to purchase the house and the land on which it was situate. Three years after the transfer into joint tenancy Rosina went to the registry office with one of her daughters and discovered that Antonio now held title with her. Then she made a new will revoking the codicil.

Rosina’s understanding of the English language was very limited. She testified that when Antonio took her to the registry office originally, he told her that she was signing a document that would give him power to look after her as she grew older. She did not did not attend at the registry office when the second transfer took place. Rosina and her other children demanded that Antonio restore the full title to her, but he refused, so she brought this action to void the two transfers. Antonio counterclaimed for a declaration that he held a legal or equitable interest in the property or in the alternative that Rosina be ordered to pay him a sum of money to pay him for the contributions he made to the property.

Antonio claimed that he contributed to the purchase of the adjacent property, but Rosina claimed that she and Carmelo bought and paid for it with an eye to the future of all their children. Antonio also claimed that he paid Rosina $18,000 for their contribution to the costs of construction of the addition to the workshop and to the purchase of the adjacent property. He produced a document signed by Rosina that purported to be an acknowledgement of this payment. However, Rosina claimed that most of the money represented repayment of a loan made to Antonio by his parents.

The trial judge held that the transfer should be set aside on the basis of the doctrine of non est factum and mistake. Rosina did not know what she was signing because of her difficulties with the English language and Antonio’s misrepresentation. In addition, both Rosina and Antonio were mistaken about the effect of the document that transferred the home property to Antonio. Moreover, this was a clear case of undue influence by a child over a parent and Rosina should have been provided with independent legal advice.

The trial judge then went on to dismiss Antonio’s counterclaim. Initially there was a mutual understanding between Antonio and his parents that the workshop property would eventually be transferred to him. While the court concluded that Antonio greatly exaggerated his contribution to the construction of the workshops, it determined the value of his contributions to be about $68,000. However, the court held that Antonio’s counterclaim failed because he did not come into court with clean hands, as he sought to derive an advantage from his own wrongs that were directly related to the relief he claimed. His refusal to transfer the property back to Rosina was especially egregious and the trial judge held that a court of equity will not reward bad behaviour.

In brief reasons the Court of Appeal dismissed Antonio’s appeal. It held that the defence of non est factum was made out, and that the finding that Rosina’s signature on the first transfer had been obtained through undue influence was supported by the evidence. Moreover, it held that the trial judge did not err in dismissing Antonio’s counterclaim because he did not come with clean hands.

Servello is therefore another case in which family members engage in a battle over limited resources. The consequence is that much money is wasted in the fight and family relationships are destroyed.

[1]      2015 ONCA 434, 9 E.T.R. (4th) 169, affirming 2014 ONSC 5035.

Please view our paper, “Equitable Remedies for Elder Abuse: A Case Law Review”, that we presented at the STEP Canada, Toronto Branch program Elder Abuse and Ways of Protecting the Elderly on 18 October 2017.

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