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Appeal Court Dicta

Gifts - Presumption of Undue Influence

. Morreale v. Romanino

In Morreale v. Romanino (Ont CA, 2017) the Court of Appeal briefly canvasses when a presumption of undue influence arises subsequent to a gift being made:
[22] In the case of voluntary gifts, whether the presumption of undue influence arises begins with an examination of the relationship between the parties and the first question to be addressed, in all cases, “is whether the potential for domination inheres in the nature of the relationship itself”: Geffen, at p. 378. This test embraces those relationships that equity has already recognized as giving rise to the presumption, including parent and child: Geffen, at p. 378.

[23] However, while the test embraces relationships that have been recognized as giving rise to the presumption, it is not enough to simply show that such a relationship exists. Even for such relationships, the presumption does not arise unless it has been established that there is the potential for one person to dominate the will of another. The test requires the trial judge to consider the whole of the relationship between the parties to see if there is the potential for domination, rather than looking for a specific act of coercion or domination.


[33] I also reject the appellant’s contention that the trial judge’s analysis fell short because she failed to draw an adverse inference from the respondent’s failure to call the lawyer who acted for the Ruccias and the respondent on the sale of the Beck Drive property and the purchase of the Russell Stover property. In my view, this contention cannot stand in light of the fact that independent legal advice is not required in order to rebut the presumption of undue influence: Bank of Montreal v. Duguid (2000), 2000 CanLII 5710 (ON CA), 47 O.R. (3d) 737 (C.A.), at paras. 26-27.
. Foley (Re)

In this estate case, Foley (Re) (Ont CA, 2015), the Court of Appeal made the following salutory comments on the law of gifting and the presumption of undue influence:
C. The Law Pertaining to Gifts

[25] A valid inter vivos gift is one that is intended to take effect during the lifetime of the donor. It consists of a voluntary transfer of property to another with the full intention that the property will not be returned. To establish a gift, one must show intention to donate, sufficient delivery of the gift, and acceptance of the gift: McNamee v. McNamee, 2011 ONCA 533 (CanLII), 106 O.R. (3d) 401, at para. 24.


(2) Presumption of Undue Influence

[28] Where the potential for domination inheres in the relationship between the transferor and transferee, the presumption of undue influence applies: Goodman Estate v. Geffen, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at p. 378. The transferee must establish on a balance of probabilities that the gift was the result of the transferor’s “full, free and informed thought”: Goodman Estate, at p. 379. Evidence that the transferor received qualified, independent advice can be used to rebut the presumption: Goodman Estate, at p. 379. However, this is not to say that evidence of independent advice is required in every case: Laird v. Mulholland (1998), 21 E.T.R. (2d) 204 (Ont. S.C.), at paras. 36-37; Bank of Montreal v. Duguid (2000), 2000 CanLII 5710 (ON CA), 47 O.R. (3d) 737 (Ont. C.A.), at paras. 26-27, leave to appeal to S.C.C. allowed, [2000] S.C.C.A. No. 298, appeal discontinued August 2, 2001.

(3) Corroborative Evidence

[29] The common law requires corroborating evidence to rebut the presumptions. The corroborating evidence can be direct or circumstantial, and it can consist of a single piece or evidence or several pieces considered cumulatively: Burns Estate v. Mellon (2000), 2000 CanLII 5739 (ON CA), 48 O.R. (3d) 641, at para. 29.

[30] In addition, where the donor is deceased, the Evidence Act, R.S.O. 1990, c. E.23 requires corroborative evidence. Section 13 provides:
In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.


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