Trotter et al. v. Trotter et al. Trotter et al. v. Trotter et al.

[Indexed as: Trotter v. Trotter]

Ontario Reports

Court of Appeal for Ontario,

van Rensburg, Hourigan and Benotto JJ.A.

November 26, 2014

122 O.R. (3d) 625 | 2014 ONCA 841

Case Summary

Civil procedure — Summary judgment — Applicants bringing two related actions challenging validity of wills and certain inter vivos transfers of land — Applicants alleging undue influence in will and transfer actions and arguing that impugned transfers were procured by fraud — Respondents applying successfully for summary judgment dismissing actions — Applicants' appeal allowed — Motion judge not making use of expanded powers under rule 20.04 of Rules of Civil Procedure — Motion judge making conclusory determinations on important factual and legal issues in dispute without conducting credibility analysis — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 20.04.

The applicants brought two related actions in which they challenged the validity of A's wills and inter vivos transfers of land from A to A and her son J as joint tenants. They alleged undue influence in both the will and the transfers, and also argued that the impugned transfers were procured by fraud. The respondents brought a motion for summary judgment. The evidence filed on the motion included affidavits, cross-examination transcripts and documentary exhibits. The motion judge did not hear any oral evidence. She allowed the motion and dismissed the actions. The applicants appealed.

Held, the appeal should be allowed.

The motion judge did not make use of the expanded powers under rule 20.04 of the Rules of Civil Procedure. She made conclusory determinations on important factual and legal issues in dispute without conducting a credibility analysis. She incorrectly described the applicants' evidence as "bald allegations". There was evidence concerning J's temper, his efforts to keep A isolated, A's fear of him and dependence upon him, and his attempts to manipulate her. There was evidence that he invoiced A for repairs to a barn on the transferred property for an amount that was approximately $200,000 more than the value of the property itself, and that A transferred the property to J and herself jointly because she felt indebted to him for that money. The motion could not be resolved on the basis that there was no genuine issue requiring trial on the face of the written evidence alone. Rather, credibility assessments, a weighing of the evidence and possibly oral evidence were required.

Cases referred to

Baywood Homes Partnership v. Haditaghi (2014), 120 O.R. (3d) 438, [2014] O.J. No. 2745, 2014 ONCA 450; Boyse v. Rossborough (1857), 10 E.R. 1192, [1843-1860] All E.R. Rep. 610 (U.K. H.L.); Gironda v. Gironda, [2013] O.J. No. 2949, 2013 ONSC 4133, 89 E.T.R. (3d) 224, 229 A.C.W.S. (3d) 612 (S.C.J.); Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641; Sagl v. Cosburn, Griffiths & Brandham Insurance Brokers Ltd., [2009] O.J. No. 1879, 2009 ONCA 388, 249 O.A.C. 234, 72 C.C.L.I. (4th) 193, [2009] I.L.R. I-4839; [page626] Scott v. Cousins, [2001] O.J. No. 19, [2001] O.T.C. 9, 37 E.T.R. (2d) 113, 102 A.C.W.S. (3d) 457 (S.C.J.); Vout v. Hay, 1995 105 (SCC), [1995] 2 S.C.R. 876, [1995] S.C.J. No. 58, 125 D.L.R. (4th) 431, 183 N.R. 1, J.E. 95-1367, 82 O.A.C. 161, 7 E.T.R. (2d) 209, 55 A.C.W.S. (3d) 1101; Wingrove v. Wingrove (1885), 11 P.D. 81 (Eng. Prob. Ct.); Zerbinati v. Doherty, [2014] O.J. No. 4135, 2014 ONSC 4565 (S.C.J.)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 20.04, (2)(a), (2.1), (2.2)

Authorities referred to

Williams, Edward Vaughan, et al., Williams, Mortimer and Sunnucks on Executors, Administrators and Probate: (being the 17th Ed. of Williams on Executors and the 5th Ed. of Mortimer on Probate), 17th ed. (London: Stevens & Sons, 1993)

APPEAL from the order of Eberhard J., [2013] O.J. No. 785, 2013 ONSC 1182 (S.C.J.) granting summary judgment and dismissing an action.

Martin Teplitsky, Q.C., for appellants.

Brian A. Schnurr and Jordan D. Oelbaum, for respondent estate trustees.

Michael Adams, for respondent Johnstone Dempsey Trotter.

The judgment of the court was delivered by

[1] BENOTTO J.A.: — The parties to this appeal are family members embroiled in a bitter dispute over their mother's estate. In two related actions, the appellants challenged the validity of her wills and certain inter vivos transfers of land. They alleged undue influence in both the will and transfer actions, and also argued that the two impugned transfers were procured by fraud. Vastly differing factual assertions are put forward by those who attack and those who defend the dispositions.

[2] The appellants' actions were dismissed with costs of $400,000 after the respondents brought a successful motion for summary judgment. This appeal concerns the process by which the motion judge determined that there was no genuine issue requiring a trial.

[3] The appellants assert that the action was not capable of being resolved on the basis of the written record, as evidenced by the motion judge's failure to make the credibility findings necessary to support her conclusion on undue influence. The appellants also allege that the motion judge erred in dismissing the transfer action on the basis that it was subsumed within the wills action. Finally, the appellants submit that the motion [page627] judge's reasons raise a reasonable apprehension of bias and that the costs order was excessive.

[4] The respondents argue that there was evidence from which the motion judge could, in her discretion, conclude that there was no issue requiring a trial. Further, the inter vivos transfer action did become moot once the wills action was dismissed. Even if the transfers were set aside, the respondent Johnstone Dempsey Trotter would still inherit the properties by way of the 2005 will.

[5] I have concluded that the motion judge erred in her approach to the summary judgment determination. She undertook the analysis in a conclusory fashion and failed to make the findings of credibility necessary to support her ultimate decision. This conclusion is dispositive of the appeal and it is not necessary to address the dismissal of the transfer action or the award of costs. I will nonetheless briefly address the allegation of reasonable apprehension of bias.

I. Background

(1) The parties

[6] Audrie and Ty Trotter had five children: William ("Bill"), Catherine ("Kate"), Robert, Phillip and Johnstone ("John"). Ty died in 1996, and Audrie died in 2008. The challenged wills and inter vivos transfers were executed by Audrie.

[7] Kate and Bill, the appellants in this appeal, brought the initial application to challenge Audrie's wills. Robert was added as a plaintiff and was represented by separate counsel. He takes no part in this appeal. The respondents are John in his personal capacity as well as John and James Bell in their capacity as estate trustees. Phillip was not a party to the proceedings but gave evidence as a witness for John.

(2) The assets

[8] Audrie and Ty Trotter lived in Gilford, Ontario. They operated a gas station and garage at Fennell's Corner at the junction of Highway 11 and Highway 89. The garage business was held in the name of Trotter's Garage Inc. The garage was on a lot owned by Trotter's Holdings Inc. Ty owned the shares of both corporations. John worked with his father in the garage business. At some point, John's friend George Pohle also began working at the garage. George was a beneficiary under several of Audrie's wills.

[9] Ty and Audrie owned approximately 100 acres of farm land adjacent to the garage. The farm contained an old barn and [page628] a rental house. Their home of many years was on a separate property across the road from the farm. Next to this residential property was another lot that contained a residence (the "white house") and a small barn. This lot was typically used as a rental property.

(3) The wills and transfers

[10] In 1995, Ty and Audrie signed mirror wills prepared by their local family lawyer, Roy Gordon. The wills left each of their children an equal share of their assets, excluding all the shares in Trotter's Garage Inc. and 50 per cent of the shares in Trotter's Holdings Inc., which were left to John.

[11] Ty died in 1996. The Trotter's Garage Inc. shares vested in John, who continued to operate the garage. The rest of Ty's estate, including 50 per cent of the shares in Trotter's Holdings Inc., went to Audrie. John's entitlement to the shares relating to the garage business has never been at issue.

[12] In October 1999, Audrie made a new will, also prepared by Mr. Gordon. This will left John the farm and surrounding properties on the condition he pay $50,000 to both Kate and Phillip and $5,000 to George Pohle. Audrie named John and Audrie's brother, Douglas Dempsey, as co-executors. The residue of the estate was divided equally among the five children.

[13] The following year, Audrie changed lawyers. She was concerned that Mr. Gordon was not keeping her matters confidential. She arranged to travel to Toronto to meet with a lawyer, Earl Heiber. Audrie gave Mr. Heiber instructions for a new will. It was signed in May 2000. This time, the will entitled both Kate and Phillip to one-acre parcels of the farm and to 25 per cent of the residue of the estate. John received the remaining shares in Trotter's Holdings Inc., the residence property, the rental property containing the white house and the remaining 50 per cent of the residue of the estate. The remainder of the farm and a time share property in Florida were to be sold, with the proceeds accruing to the residue of the estate. George Pohle was to receive $5,000. John was no longer an executor.

[14] Audrie told Mr. Heiber that John was trying to manipulate her and was being selfish, but was taking good care of her. Audrie did not tell John about her visit to Mr. Heiber. She made efforts to ensure that John would not find out about the new will by having Mr. Heiber send all the documents to her brother's residence and by asking her brother to pay the legal bill.

[15] In November 2000, Audrie returned to Mr. Gordon and asked him to transfer her residence to herself and John as joint tenants. She signed the transfer in January 2001. [page629]

[16] In December 2002, Audrie executed a new will, again prepared by Mr. Heiber in Toronto. This will was similar to the previous will, but increased the entitlements of Kate and Phillip. Kate and Phillip were each left ten-acre parcels of the farm. John was to receive an eight-acre parcel of the farm containing the rental house and the barn. If severance of these parcels was impossible, John was to pay Kate and Phillip each 12 per cent of the appraised value of the farm should he desire to keep the property. In the event John did not pay this amount, the farm was to be sold with the proceeds accruing to the residue of the estate. The residue was to be divided as follows: 40 per cent to Kate, 40 per cent to Phillip and 20 per cent to John.

[17] In July 2003, Audrie asked Mr. Gordon to prepare a transfer of the farm to herself and John as joint tenants. She signed the transfer in August 2003.

[18] In July 2005, Audrie executed a final will. This time it was Mr. Gordon, not Mr. Heiber, who prepared the will. In this will Audrie left no real or personal property to Kate or Phillip. Earlier wills had divided the majority of Audrie's personal property between Kate, Phillip and John. In contrast to the previous will, the 2005 will left the entire residue to John. The will confirmed that ownership of the residence and the farm vested in John through survivorship. John was directed to pay Kate and Phillip $50,000 each in consideration for these transfers. Audrie left the rental property containing the white house to George Pohle.

[19] Audrie died on March 6, 2008.

(4) The barn invoices

[20] The old barn on Audrie's farm was apparently in bad shape, having been damaged in a storm. John's evidence was that the barn needed to be demolished and this would have been very expensive. He claimed that he and his mother agreed that he would try to rebuild the barn. In order to protect his interests in the event of a future dispute over his entitlement to the farm property, he asserted that he and his mother arrived at an arrangement. John would record his time and expenses and produce invoices for Audrie to sign.

[21] John started the barn renovation project in the summer of 2001 and worked until the end of 2002. He prepared two invoices: the first on November 13, 2001, signed by Audrie on April 29, 2002; and the second on December 23, 2002, signed by Audrie on December 28, 2002. The invoices totalled approximately $740,000, and included GST and PST. John stated he did [page630] not know the actual cost of the work on the barn, what he paid out of pocket or why he included GST and PST.

[22] John explicitly stated in his affidavit that the transfer of the residence and the farm to him and his mother jointly was in lieu of payment for the invoices. John estimated that the total value of the farm property was $500,000 to $600,000. John agreed that the barn was used almost exclusively for storage.

[23] The appellants allege that John fraudulently issued the invoices to obtain title to the house and farm. The appellants argue that the amount cannot be substantiated and that it would have been illogical to spend more on the barn than the property was worth. Kate testified that it would have bothered her mother a great deal to have a debt outstanding, let alone one of this magnitude.

II. The Summary Judgment Motion

[24] In December 2009, the two related actions challenging the validity of Audrie's wills and the inter vivos transfers were ordered to be tried together. Robert was added as a plaintiff. In April 2012, John's counsel brought a motion for summary judgment in the wills action. The evidence filed on the motion included affidavits, cross-examination transcripts and documentary exhibits. The motion was heard over six days, commencing in October 2012 and ending in January 2013. The motion judge did not hear any oral evidence. Costs submissions followed.

(1) John's position

[25] John's position on the motion was that a trial was not required. The unequal treatment of Audrie's children was not surprising since Bill and Robert were estranged from Audrie and Kate did not provide care or attend upon Audrie with any regularity. Most importantly, it was John who cared for and looked after Audrie, supporting her financially and investing time, resources and energy into improving her properties.

[26] John left university in order to help run the garage and look after his parents. The other siblings moved away. As a result of John's work at the garage, his parents' standard of living improved. They were able to travel and purchase the time share in Florida.

[27] The transfers were reasonable in light of the 18 months John spent working on the barn. Although he presented invoices to his mother for $740,000, he did not make a demand for payment. [page631]

(2) The appellants' response

[28] The appellants' evidence 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.

[29] In May 1999, a few years after Ty died, Kate took Audrie to lunch. Audrie informed Kate she could not stay too long because John would become angry and suspicious. When Kate brought Audrie home, John rushed into the house, slammed the door and asked where Audrie had been. He searched Audrie's purse. A few months later, Audrie executed her 1999 will which named John as a co-executor and gave him the farm. When John learned that he was not the sole executor, he became angry with Audrie.

[30] The following year, Audrie went to Mr. Heiber. Her comments to Mr. Heiber about John's attempts to manipulate her, as well as her steps to keep Mr. Heiber's involvement secret, demonstrate her fear of John.

[31] John had a violent streak. In 2001, he attacked his 15-year-old cousin during a family trip to Florida. While she was joking with him, John grabbed her neck without warning until her face turned red. She was finally released when she was able to kick him in the groin.

[32] On December 31, 2002, Audrie returned to Mr. Heiber, again without John's knowledge. She signed the second will prepared by Mr. Heiber which substantially increased the entitlements of Kate and Phillip, and gave them each significant parcels of the farm. However, seven months later, she removed the farm from her estate when she instructed Mr. Gordon to transfer it into a joint tenancy with John. John stated in his affidavit that the transfer was in lieu of payments for invoices totalling over $740,000, which he charged her for the barn renovation. The appellants allege that he provided insufficient basis for the reasonableness of the repair costs.

[33] In 2004, Audrie's niece and Kate planned a birthday party for Audrie's brother, Douglas Dempsey, in Toronto. Audrie originally planned to attend, but changed her mind out of concern that she would have trouble with John if she went.

[34] When Audrie changed her will again in 2005 with the assistance of Mr. Gordon, she was frail and in a wheelchair. Just a week before the signing, she had been in the hospital.

[35] Roy Gordon was John's lawyer on other matters, and the two were friends. Mr. Gordon acted for both Audrie and John in the property transfers. [page632]

[36] In 2007, Kate went to Florida to visit Audrie. Kate's uncle Doug told her that Audrie did not want John to know that Kate had visited. Later the same year, Kate arranged a doctor's appointment in Toronto to deal with cancerous sores on Audrie's feet and legs. At the last minute, Audrie left the following voicemail for Kate:

Don't bother making the appointment with [the doctor] please because I have upset John so much. I ran it by him and he's not very happy with the whole deal and I can't stand fighting anymore about it. He gets so upset[.]

[37] John's actions rendered Audrie physically dependent and vulnerable. As her health deteriorated, John looked after her personal care even though female caregivers were available. Audrie was a dignified and private person who would have found this embarrassing.

[38] Audrie told Kate that she did not want the improvements done to the barn. She thought it was a waste of money. She told her niece it was easier just to let John do what he wanted.

[39] In March 2008, Audrie was admitted to the hospital and John instructed the hospital staff not to contact any family members. She died a few days later.

(3) Reasons of the motion judge

[40] The motion judge allowed the respondent's motion, thereby dismissing the claim of undue influence. She reviewed nine points regarding undue influence raised by the appellants: (1) relationship of dependency and control between Audrie and John, (2) drastic change to the wills, (3) evidence of testamentary intention, (4) Audrie's character, (5) John's character, (6) John's anxiety to get the benefits under the will, (7) the absence of independent legal advice received by Audrie, (8) evidence of John's dishonesty and his inconsistencies, and (9) the moral claims of the other potential beneficiaries. She summarized the evidence with respect to each heading.

[41] The motion judge determined that the claim of undue influence was based on "bald allegations". She found that Audrie was an independent person who made her own plans for her will. She organized her life to her liking. There was no evidence that John had pressured Audrie or that Audrie had been affected by any influence from John. Audrie openly expressed her opinion on John's changes to the barn and often won arguments with him. She changed executors because she lost respect for one of her trustees. Her one failing was that her children did not get along, and had been distant with each other for some time. [page633] Audrie managed these relationships by not telling her children about her contact with the others, but was tired of the fighting.

[42] The motion judge then turned to the allegedly fraudulent invoices. She found that the invoices were for John's work as well as money he spent. Audrie was present to observe the changes made to the barn, and signed off on the invoices. There was no evidence of any demand for payment being made, and nothing supported the appellants' contention that John compelled the transfers of property. Audrie expressly stated her reason for the farm transfer in a letter to her lawyer: John paid off the mortgage and put work and money into the barn and the house on that property.

[43] The motion judge determined that the challenge to the inter vivos transfers was subsumed within the challenge to the will and therefore failed along with the wills action.

III. Analysis

[44] The issues in this appeal raise one main question: did the motion judge use the proper approach to summary judgment in the face of highly contested facts? I will explain my conclusion on the summary judgment motion and then make brief comments regarding the allegation of a reasonable apprehension of bias.

(1) Summary judgment

[45] This motion was heard and decided before the Supreme Court of Canada released its decision in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, which expanded the availability of summary judgment. This might, at first view, lead to the conclusion that judgment granted under a stricter regime would attract significant deference on appeal. However, 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 dispute without conducting a credibility analysis.

[46] I begin by reviewing the evolution of motion judges' powers in the context of summary judgment. Next, I review the motion judge's approach in the present case. Finally, I address her analysis with the benefit of the Hryniak framework. As will be explained, even pursuant to the more expansive approach to summary judgment, the decision cannot stand. [page634]

i. Expanded powers pursuant to the Rules

[47] The 2010 amendments to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 expanded the availability of summary judgment by altering the wording of the test and vesting motion judges with enhanced powers to assess conflicting evidence. The test under rule 20.04(2)(a) is no longer whether there is a "genuine issue for trial", but rather whether there is a "genuine issue requiring trial". The additional powers granted to motion judges under rule 20.04(2.1) and (2.2) are as follows:

Powers

20.04(2.1) In determining under clause 2(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

Oral Evidence (Mini-Trial)

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[48] These changes were designed and implemented to improve access to justice by providing a mechanism to resolve issues more expeditiously than through a traditional trial. In appropriate cases, the motion for summary judgment provides an alternative model of adjudication that has the benefit of streamlining the process for litigants and making the civil justice system more accessible and affordable.

[49] However, the fact that the new process of adjudication is well intentioned and can be beneficial cannot impose an imperative on the court to use it in every case. There is a risk that, in an effort to dispose of the case, the evidence will not be properly analyzed. The Supreme Court affirmed in Hryniak, at para. 28, that "[t]he principal goal remains the same: a fair process that results in a just adjudication of disputes".

ii. The motion judge's analysis

[50] The motion judge erred in fact and law. She incorrectly labelled the appellants' evidence "bald allegations", failed to make credibility findings, erred in her analysis of undue influence and failed to properly consider the barn invoices. [page635]

(a) The "bald allegations"

[51] 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.

[52] 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, as will be discussed below.

[53] 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.

(b) Conclusory findings

[54] Since the evidence adduced by the appellants was capable of supporting an allegation of undue influence, it was incumbent upon the motion judge to explain why she rejected it. This, of necessity, requires a credibility analysis pursuant to the expanded judicial powers under rule 20.04(2.1) to weigh the evidence, evaluate the credibility of the appellants' deponents and draw reasonable inferences.

[55] It is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required. The motion judge did not engage in a credibility analysis or attempt to provide conclusions on credibility. Where important issues turn on credibility, failure to make credibility findings amounts to reversible error: see Sagl v. Cosburn, Griffiths & Brandham Insurance Brokers Ltd., [2009] O.J. No. 1879, 2009 ONCA 388, at paras. 98-100.

[56] The motion judge did not make proper use of the expanded powers under rule 20.04. She reviewed the appellants' evidence in support of the undue influence allegations, but did not subject it to evaluation or make credibility findings. She did not address [page636] the evidence of John's anger or its effect on Audrie. The motion judge twice states that she is not going to place reliance on John's disputed assertions, but accepts his uncorroborated evidence as to the legitimacy of the barn invoices. She did not fully analyze the reasonableness of these invoices, which I will discuss below.

[57] There was circumstantial evidence from which the court could infer that Audrie did not want to prefer John over her other children. This was not addressed. Either the motion judge failed to assess the evidence, which was improper in light of the substantial evidence capable of supporting a claim of undue influence, or her assessment of the evidence was wholly inadequate and unsubstantiated by her reasons.

(c) Undue influence

[58] Undue influence involves the domination of the will of one person by another. Undue influence exists when a testator is coerced into doing that which she does not desire to do: Wingrove v. Wingrove (1885), 11 P.D. 81 (Eng. Prob. Ct.), at p. 82. As stated by Cullity J. in Scott v. Cousins, [2001] O.J. No. 19, 37 E.T.R. (2d) 113 (S.C.J.), at para. 113, quoting E.V. Williams et al., Williams, Mortimer and Sunnucks on Executors, Administrators and Probate: (being the 17th Ed. of Williams on Executors and the 5th Ed. of Mortimer on Probate), 17th ed. (London: Stevens & Sons, 1993), at p. 184: "There is no undue influence unless the testator if [she] could speak [her] wishes would say 'this is not my wish but I must do it'."

[59] The high burden of establishing undue influence rests with the party asserting it. However, circumstantial evidence can be used by those challenging a will to discharge their burden -- otherwise, "undue influence would cease to have much practical significance in the law of wills": Scott v. Cousins, at para. 48.

[60] 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.

[61] 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 [page637] 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] O.J. No. 2949, 2013 ONSC 4133, 89 E.T.R. (3d) 224 (S.C.J.), at para. 77.

[62] 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 105 (SCC), [1995] 2 S.C.R. 876, [1995] S.C.J. No. 58, per Sopinka J., at para. 29.

[63] In Boyse v. Rossborough (1857), 10 E.R. 1192, [1843-1860] All E.R. Rep. 610 (U.K. H.L.), Lord Cranworth said, at p. 1211 E.R.:

. . . I am prepared to say that influence, in order to be undue within the meaning of any rule of law which would make it sufficient to vitiate a will, must be an influence exercised either by coercion or by fraud. . . . It is, however, extremely difficult to state in the abstract what acts will constitute undue influence in questions of this nature. It is sufficient to say, that allowing a fair latitude of construction, they must range themselves under one or other of these heads -- coercion or fraud.

Recent cases echo the notion that undue influence can be exercised by coercion or fraud: see Vout v. Hay, at para. 21; Scott v. Cousins, at para. 39; Zerbinati v. Doherty, [2014] O.J. No. 4135, 2014 ONSC 4565 (S.C.J.), at para. 15.

[64] The motion judge addressed the effect of the barn invoices in the context of fraud, but there was insufficient discussion of the interplay between fraud and coercion in the undue influence context. In any event, as I discuss below, her analysis of the barn invoices was flawed.

(d) The barn invoices

[65] The motion judge did not adequately address the reasonableness of the invoices, nor their possible effects on Audrie's intentions. They were a significant feature of the allegations of both fraud and undue influence.

[66] The motion judge found that the only way for the appellants to succeed at trial was to show that John was overestimating the value of the work on the barn to obtain a transfer of the farm. She apparently held that the invoices were legitimate, or [page638] at least did not affect Audrie. In my view, this was a palpable and overriding error.

[67] The motion judge found that Audrie did not mention any amount owing to John when explaining to Roy Gordon her reasons for the transfers of the house and farm. However, at para. 176, she referred to Audrie's letter to Mr. Gordon requesting the farm transfer, in which Audrie specifically states that John had put a lot of money into the barn. John explicitly noted in his affidavit that the transfers were in lieu of payment for the invoices. This directly supports the appellants' position that Audrie was influenced by the amount owing to John when she made the transfers.

[68] There was little, if any, evidence supporting the reasonableness of the invoices John presented to Audrie for the renovations. He was unable to substantiate the amounts. This was particularly problematic given the fact that the total cost drastically exceeded his own estimation of the value of the entire farm property. There was no evidence adduced to explain why Audrie would have voluntarily spent more on the renovation of a barn -- used primarily for storage -- than the underlying property was worth.

[69] John's evidence on cross-examination was insufficient to conclusively refute the appellants' allegations that he inflated the cost of the renovations. For example, he did not know why he added GST and PST and he was only "pretty sure" the bill included labour. He had no idea what he paid out of pocket and could not support his assertion that the price he charged per square foot was reasonable.

[70] In sum, the motion judge's finding that the barn invoices were not fraudulent and did not unduly influence Audrie was conclusory in light of the evidence of the appellants and the lack of evidence from John supporting the validity of the invoices. She made palpable and overriding errors in her assessment of Audrie's motivations for transferring the farm property.

[71] I now turn to consider the trial judge's analysis through the lens of the Hryniak framework.

iii. The Hryniak framework

[72] 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 [page639] 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.

[73] 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.

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

[75] 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 rule 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 interest of justice to exercise them only at a trial.

[76] 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.

iv. Conclusion on summary judgment

[77] A motion judge exercising the expanded powers under rule 20.04(2.1) is entitled to deference on appeal. However, when a motion judge misdirects herself, errs in principle or comes to a decision that is so clearly wrong that it results in an injustice, the decision cannot stand: Hryniak, at paras. 83-84. In my view, the motion judge took a conclusory approach to the summary judgment motion. She ignored evidence relevant to the claim of undue influence and failed to make the credibility findings necessary to support her conclusion. Her analysis of the barn invoices was entirely unsatisfactory.

[78] When conflicting evidence is presented on factual matters, a motion judge is required to articulate the specific findings that support a conclusion that a trial is not required. The dangers of not doing so were highlighted by this court in Baywood Homes Partnership v. Haditaghi (2014), 120 O.R. (3d) 438, [2014] O.J. No. 2745, 2014 ONCA 450, where Lauwers J.A. stated, at para. 44:

Evidence by affidavit, prepared by a party's legal counsel, which may include voluminous exhibits, can obscure the affiant's authentic voice. This makes the motion judge's task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit [page640] and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all.

[79] 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 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.

[80] In my view, the conflicts in this case could not be resolved on the basis of the written record before the motion judge. While summary judgment may have been appropriate had the motion judge exercised her powers under rule 20.04(2.2) to hear oral evidence, she did not seek to do so. Her order must be quashed.

IV. Apprehension of Bias

[81] The reasons of the motion judge contain disparaging remarks which appear to be directed at the appellants. There were also direct attacks on the appellants' trial counsel. In light of my conclusion on the summary judgment issue, it is not necessary to determine whether the comments rise to the high level that would warrant overturning the decision. However, one comment in the reasons must be addressed.

[82] The reasons refer to a "homophobic undertone" in the "submissions" as being "especially troubling". The implication is that the appellants' counsel made inappropriate remarks. The references to homosexuality arise from an affidavit filed by the respondent wherein Bill is alleged to have referred to John and his "homosexual friends", and from questions on cross-examination regarding John's relationship with George Pohle. Somehow these comments seem to have been characterized as "homophobic submissions" by the appellants' counsel. Counsel for the respondent agreed that the appellants' counsel made no such submission. It is not homophobic to inquire about the mere existence of a same-sex relationship. Moreover, the allegation first appeared in the motion judge's reasons, thereby affording counsel no opportunity to respond. It was a serious and admittedly baseless comment. It should not have been made.

V. Disposition

[83] I would allow the appeal, set aside the summary judgment and costs order and direct that the matter proceed to trial [page641] before a different judge. I would award costs of the appeal to the appellants fixed at $25,000, inclusive of disbursements and applicable taxes.

Appeal allowed.

End of Document