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Contracts - Undue Influence. Wright v. Wright
In Wright v. Wright (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, here brought against the dismissal (as unenforceable) of an application "seeking enforcement of the Agreement or alternative relief", where the '(Property Partnership) agreement' ostensibly provided the appellants' with an "an option to purchase a residential property".
Here the court considers an issue of 'undue influence':There was no basis to find that Tamara unduly influenced Karin
[70] As summarized in Kavanagh v. Lajoie, 2014 ONCA 187, 317 O.A.C. 274, at para. 19, “undue influence focuses on a person’s dominance over another person’s will by exercising a pervasive influence on him or her, whether through manipulation, coercion, or outright abuse of power.” The onus is on the party claiming undue influence to prove that such influence was exerted by the other party expressly for the purpose of receiving some advantage: Kavanagh, at para. 19.
[71] Undue influence may, however, be presumed in certain circumstances: JGB Collateral v. Rochon, 2020 ONCA 464, 151 O.R. (3d) 601, at para. 9, citing Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at p. 378. If a presumption is found to arise, the benefitting party must adduce evidence to rebut it: JGB Collateral, at para. 12; Geffen, at p. 379.
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A presumption of undue influence does not arise
[75] To determine whether a presumption of undue influence arises, a court must consider “whether the potential for domination inheres in the nature of the relationship itself”: Geffen, at p. 378; Morreale v. Romanino, 2017 ONCA 359, at para. 22. A court must also consider the nature of the parties’ transaction. To trigger a presumption of undue influence, a transaction cannot be readily explicable by the parties’ relationship, but must rather be “immoderate and irrational”: Vanier v. Vanier, 2017 ONCA 561, 28 E.T.R. (4th) 200, at para. 50.
[76] A potential to dominate is not inherent to every relationship between an adult child and their parent, even if the parent is elderly. The specific relationship between the parties must be considered. For example, in Morreale, where a daughter was alleged to have exerted undue influence over her parents whose capacity was not in issue, the presumption was found not to apply.
[77] Here, in finding that the nature of Tamara and Karin’s relationship supported a presumption of undue influence, the application judge relied solely on the fact that they are mother and daughter. He did not consider or make any determinations about the specific nature of Karin and Tamara’s relationship or avert to evidence that could ground a finding that, given their specific relationship, there was a potential for Tamara to dominate Karin’s will. On the contrary, he found that Karin was capable of managing her own affairs at all relevant times and that she negotiated the price for the Bay of Quinte property without Tamara’s involvement.
[78] The application judge furthermore did not find that the bargain struck was immoderate or irrational. He merely found that it advantaged Tamara and Ron more than it did Karin.
[79] Based on the application judge’s findings, no presumption of undue influence could be established.
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[87] A presumption of undue influence arises only in the context of a specific transaction. ....
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[92] .... the record clearly shows that Karin received independent legal advice about the Agreement prior to signing it and that, having received this advice, she agreed to its terms. As a result, even if a presumption of undue influence arose, it was rebutted.
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