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Solicitor’s Negligence in Estates and Trusts Context – No. 13: Undue Influence Cases

The question of whether or not a solicitor may be successfully sued for professional negligence if his or her client was unduly influenced in the drafting, preparation or arrangement for execution of testamentary documents or other estate planning documents such as a power of attorney, is not clear, and is likely dependant on the evidence and findings in the particular surrounding circumstances of each case.

The doctrine of undue influence is an equitable principle used by courts to set aside certain transactions or estate documents where an individual exerts such influence on the testator, grantor or donor that it cannot be said that his or her decisions are wholly independent. Undue influence may be found where one person has the ability to dominate the will of another, whether through manipulation, coercion, or the outright but subtle abuse of power.[1] In making such determinations, courts will look at whether “the potential for domination inheres in the nature of the relationship between the parties”. Specifically the courts will examine whether an imbalance of power existed in the relationship.

The drafting solicitor must be diligent to be live to the indicia and potential for undue influence to be in a position to advise the client on the lawfulness of the transaction, and perhaps assist in avoiding the undue influence or at the very least to document any concerns.

The majority of decisions involving undue influence issues focus on whether or not undue influence exists, and if so, its effects on the rights of the parties directly involved and any transaction conducted, such as the validity of wills and powers of attorney or transfers of property involving older adults. Among these decisions, there are very few reported cases where negligence claims were brought against the drafting solicitor.

In the complex and lengthy decision of Hussey v. Parsons[2], an elderly widow sued her former solicitor for professional negligence alleging that he breached his duty by drafting an agreement transferring the sale proceeds of her house (her major asset) to her nephew and drafted a will under which the nephew was a major beneficiary. The widow alleged that the solicitor knew or ought to have known that she was being unduly influenced by her nephew and that he had failed to ensure her wishes were represented.

The Court concluded that the transaction as it concerned the drafting of a written agreement was not “unconscionable”, nor was there actual undue influence exerted. The Court concluded that with regard to any presumption of undue influence which might arise in the circumstances, the surrounding facts were such as to rebut that presumption.

After reviewing the evidence and the relevant case law, Justice Puddestar found that there was “indicia of undue influence” present which “suggest[ed] that the situation as a whole was one which called for an extra degree of care and inquiry by the defendant in terms of exactly what were the interests, intentions and understandings of the plaintiff.”[3] The Court emphasized the presence of indicia of undue influence, and although the Court concluded that any presumptions could be rebutted, a lawyer in those circumstances would have to exercise extra caution in his/her dealings. The Court specifically stated that the situation was one that “called for an extra degree of care and inquiry by the [solicitor] in terms of exactly what were the intentions and understandings of the plaintiff.”[4] Finally, and importantly, the Court concluded that case law establishes that there is an onus on the solicitor, in properly representing his/her own client, so as to ensure as clearly as can be established that the client “was fully aware of the circumstances and the consequences of his act and that there was no undue influence.”[5]  The duty of the independent advisor is not merely to satisfy him or herself that the donor understands the effect of and wishes to make the gift, but to protect the donor from himself as well as from the influence of the donee. A solicitor who is called upon to advise the donor must satisfy himself that the gift is one that is right and proper in all of the circumstances of the case.[6]

In Tulick Estate v. Ostapowich[7] children of a widower sought damages against their father’s solicitor in negligence alleging that the lawyer drafted a transfer of property from the widower to his nephew and that the nephew had unduly influenced their father to do so. The lawyer had also acted on behalf of the nephew in the past. However, while the Court concluded that the lawyer had not provided independent legal advice to the widower, no undue influence existed. As no undue influence existed, “the claim for damages against [the solicitor] cannot succeed and it must be dismissed”.[8]

Similarly, in Doyle v. Valente,[9] the Court dismissed a negligence claim against a solicitor when it held that a testator had freely changed his mind and no undue influence was found. Justice Spencer concluded that “[i]t follows that [the] action against the solicitors must also be dismissed because [the testator] knew what he was doing.  There is no obligation at law, nor was any suggested, for a solicitor to protect the interest of a former beneficiary from a testator’s properly formed intention to change his mind”[10]

In Brown Estate Re,[11] the deceased’s wife brought a claim in negligence against the solicitor who drafted her husband’s will claiming that he had been unduly influenced by two caregivers to leave 2/3 of his estate to them. She argued that her husband’s true intentions were that she should receive his entire estate. The drafting solicitor brought a summary judgment motion seeking to stay or dismiss the claim which had been brought concurrently with a will challenge claim. The solicitor argued that the negligence claim was “entirely contingent” upon the will challenge and that it should be stayed or dismissed pending the outcome of that case to “avoid undue prejudice to [the solicitor]”[12]

The Court dismissed the motion finding that the negligence claim was “not necessarily predicated upon the outcome of [the Will] challenge based on undue influence”.[13]The Court observed that “even if the plaintiff’s allegation of undue influence was not established she could, presumably, still pursue her claim of negligence against [the solicitor] on the basis of his failure to discern the testator’s true intention”.[14] Unfortunately, there is no known reported decision of the outcome of the negligence claim against the solicitor.

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[1] Dymterko Estate v. Kulikovsky, (1992) CarswellOnt 543 (SC).

[2] 1997 CanLII 16032 (NL SCTD) [Hussey].

[3] Ibid. at para 633.

[4] Ibid.

[5] Supra, note 135

[6] Ibid at para 635

[7] 1988 CarswellAlta 194 (QB)[Tulick].

[8] Ibid at para 41.

[9] 1993 CarswellBC 2971 (SC)[Doyle].

[10] Ibid at para 36

[11] 2001 CarswellOnt 1333 (SCJ)[Brown Estate Re.]

[12] Brown Estate supra note 142 at para 11

[13] Ibid at para 20.

[14] Ibid.

This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

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