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Court of Appeal Examines Proper Approach to Summary Judgment Motions in Will Challenges

Facts:

In Trotter Estate,[3] a married couple signed mirror wills in 1995, prepared by their local family lawyer. The wills left each of their children an equal share of their assets, excluding certain shares in their family company which were left to one son, John.

The father died in 1996. After her husband's death the mother (Audrie) executed four more Wills. The first in 1999 was drafted by the same local family lawyer, Mr. Gordon, who was also John's close friend. Two Wills executed in 2000 and 2002 were drafted by a lawyer not known to John. She switched lawyers as she was concerned that Mr. Gordon was not keeping her matters confidential. She told her new lawyer that John was trying to manipulate her and was being selfish, but was taking good care of her. The final Will in 2005 was once again drafted by Mr. Gordon. In this Will she left the entire residue of her estate to John and no real or personal property to her other children. Meanwhile, earlier Wills had divided the majority of the personal property between all of her children.

Also, in 2001, the mother transferred her house to herself and John as joint tenants and the family farm to herself and John as joint tenants in August 2003. Mr. Gordon acted as the lawyer for both inter vivos transfers.

Of further consideration, the fact that John spent 18 months renovating a small barn on the family farm. He billed his mother $740,000.00 for the renovation. The entire farm was worth only between $500-600,000.00. John claimed that the inter vivos transfers of the residence and farm were in lieu of payment of the invoices for the barn renovation.

The mother died on March 6, 2008. The siblings brought a claim challenging the Will and the inter vivos transfers, alleging undue influence by John.

Summary Judgement Motion:

John brought a summary judgment motion to dismiss his siblings' claim. Evidence on the motion included affidavits, cross-examination transcripts and documentary exhibits however, no oral evidence was heard. The motion lasted over six days.

John argued that the Will was valid, there was no undue influence and that the inter vivos transfers were reasonable. He had spent 18 months renovating the barn while his siblings had moved away. He had stayed and looked after their mother.

The siblings' evidence however "portrayed a pattern of isolation, domination and influence that John exerted over Audrie. There were detailed descriptions of John's explosive anger and temper. There was evidence of Audrie's fear of displeasing John." [4]

The Motion judge allowed the summary judgment and dismissed the siblings claim after reviewing nine points of evidence listed as follows:

1. Relationship of dependency and control between mother and John
2. Drastic change to the Wills
3. Evidence of testamentary intention
4. The mother's character
5. The son's character
6. The son's anxiety to get the benefits under the Will
7. The absence of independent legal advice
8. Evidence of John's dishonesty and his inconsistencies; and
9. The moral claims of the other potential beneficiaries.

After this review the Motion judge concluded that the claim of undue influence was based on "bald allegations" and dismissed the Will challenge. She also concluded that the invoices for John's work were valid invoices for money he spent and that the challenge to the inter vivos transfers was subsumed within the challenge to the Will and therefore failed along with the Wills action.

Appeal:

The question examined by the Court on appeal: Did the motion judge use the proper approach to summary judgment in the face of highly contested facts?

The Court of Appeal concluded that the motion judge's approach to her conclusion was fundamentally flawed. She made palpable and overriding errors in relation to her analysis of the evidence, erred in her conclusion regarding the legal requirements for undue influence, and made conclusory determinations on important factual and legal issues in the dispute without conducting a credibility analysis. [5]

If the motion judge rejected the evidence on undue influence, she needed to explain why.  This required a credibility analysis pursuant to expanded judicial powers under rule 20.04(2.1) of the Rules of Civil Procedure to weigh the evidence, evaluate the credibility of the appellants' deponents and draw reasonable inferences.

The Appeal Court examined the allegations of undue influence and did not find them to be "bald allegations":

"There are repeated references in the motion judge's reasons to the appellants' "bald allegations", implying that the evidence before her on its face was sufficient for her to conclude that there was no genuine issue requiring a trial. A review of the record, however, reveals that the allegations were not bald. There was evidence concerning John's anger, his temper, his efforts to keep Audrie isolated from Kate, Audrie's fear of him, her dependency upon him, his attempts to manipulate her and her fear of being sent to a nursing home. There was evidence that Audrie transferred the farm property to John because she felt indebted to him for money he put into the barn. He sent her invoices for an amount that was approximately $200,000 more than the value of the property itself. The invoices alone support the appellants' claims of undue influence and fraud.

There was evidence of control and domination on the one hand and fear and vulnerability on the other. These are key components of an allegation of undue influence. . . The motion judge's conclusion that the evidence raised by the appellants - standing on its own - consisted only of bald allegations and did not give rise to the requirement for a trial reflects a misapprehension of the evidence.[6]"

The motion judge's conclusion that there was no undue influence is summed up in the following statements, at paras. 145 and 180 of her judgment:

"The inescapable finding that does not require a trial to fully appreciate is that Audrie was nobody's fool. I find that the record before me gives a full appreciation of what Audrie wanted for herself and how she went about making it happen.

These conclusions do not address the circumstances that were potentially indicative of undue influence: Audrie's vulnerability and dependency, the allegations that Audrie felt she had to please John despite her own wishes, the allegations of domination and control, questions about the confidentiality and independence of her legal advice and instructions, and Audrie's statements to an independent lawyer that John was trying to manipulate her: Scott v. Cousins, at para. 114; Gironda v. Gironda, 2013 ONSC 4133, 89 E.T.R. (3d) 224, at para. 77. 

Nor do the motion judge's conclusions accurately capture the law of undue influence. Audrie could be "nobody's fool" and want certain things for herself, yet still be subject to undue influence. Audrie could falsely believe that she was heavily indebted to John as a result of his inflated invoices and thereby feel obliged, contrary to her wishes, to do what he wanted. A person may appreciate what she is doing but be doing it as a result of coercion or fraud: see Vout v. Hay, [1995] 2 S.C.R. 876, per Sopinka J., at para 29.[7]"

The analysis of the barn invoices was also found to be flawed as the motion judge did not adequately address the reasonableness of the invoices, nor their possible effects on the mother's intentions. She made palpable and overriding errors in her assessment of Audrie's motivations for transferring the farm property.

The Proper Approach:

The Court of Appeal reviewed the proper approach:

In Hryniak, the Supreme Court established a two-step process that motion judges must follow on a summary judgment motion. First, a motion judge is to determine - based only on the evidence before her - whether there is a genuine requiring a trial. If not, then summary judgment should be granted. There will be no genuine issue requiring a trial when the written record (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak, at para. 49. 

The motion judge's reference to "bald allegations" implies that the written record on its face was sufficient to conclude that there was no genuine issue requiring a trial. This would be the equivalent to dismissing the action at step one of Hryniak.

However, as set out above, the allegations were not bald. The evidence conflicted. The appellants' evidence demonstrated a genuine issue requiring a trial.

At this point, a motion judge may, at her discretion, move to step two of Hryniak, where she must consider whether a trial can be avoided by using the powers granted under rules 20.04(2.1) and (2.2) to weigh the evidence, evaluate credibility, draw reasonable inferences and call oral evidence. These discretionary powers are presumptively available unless it is in the interests of justice to exercise them only at a trial.

In the present case, the motion judge recited the evidence but did not weigh it, evaluate it or make findings of credibility. Thus, even on the lower threshold of Hryniak, the approach was flawed [8]

The evidence in this case was extensive and conflicting. The allegations were not bald and the motion could not be resolved on the basis that there was no genuine issue requiring a trial on the face of the evidence alone. Rather, credibility assessments, a weighing of the evidence and possibly oral evidence were required. The motion judge's conclusory findings do not provide the analysis or reasoning necessary to support her ultimate conclusion that there was no undue influence. [9]

The Court also noted that a summary judgement order may have been appropriate had the motion judge exercised her powers under rule 20.04(2.2) to hear oral evidence, which she did not seek to do.

Conclusion:

Since Hyrniak, summary judgement motions are becoming more common. However, there may still be a struggle with how to apply Hyrniak and address the Court's expanded powers under the Rules. This case provides litigators with further helpful guidance on the proper approach to be taken on a summary judgment motion where there are highly contested facts.