COURT FILE NO.: CV-16-5069-00ES
DATE: 20191112
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOAN SLOVER
Plaintiff
– and –
JAMES RELLINGER, in his personal capacity, and as Estate Trustee of the Estate of Gertrude Rellinger, deceased
Defendant
Ross F. Earnshaw and Sean M. Sullivan, for the Plaintiff
Edwin A. Flak, Morris Manning and Paul Murphy, for the Defendant
HEARD: February 4-7, 11-15, 19-22, March 4-7, 25, April 4-5 and May 14-15 2019
REASONS FOR JUDGMENT
SANFILIPPO, J.
Overview
[1] Gertrude Rellinger was born on May 14, 1922 and died almost 94 years later on April 22, 2016. She was autocratic and strong-willed, dominant and controlling, and skillful as a stock investor. She became wealthy and was generous, donating to charity and providing monetary gifts totaling $14,469,870 to her children, Joan Slover and James Rellinger, in the period from 1989 to 2013. At her death, she left more than $21,000,000 in assets.
[2] Within ten days of her passing, James sued Joan for a declaration that would have the effect of entitling him to all of Gertrude’s wealth. Joan responded that Gertrude’s wealth should be distributed between them in equal shares. The detailed evidence that emerged from this ensuing 22-day trial brought sharply into focus Gertrude’s relationship with her children and they with each other, and Gertrude’s testamentary capacity, including whether she suffered from a mental condition at the time of distributing her assets. Although not present, Gertrude was at the centre of this trial throughout.
[3] My determination of the parties’ conflicting positions hinges on my analysis of the estate planning documents that Gertrude put in place leading to her death. To do this, I assessed four stages in Gertrude’s life in which she made testamentary dispositions designed to distribute her wealth. Gertrude executed Wills in February and December 2005 and again in July 2008. Each of these Wills provided that Gertrude would pass her wealth on her death to each of her children in equal shares. Each such Will was supported by an Alter Ego Trust that owned the Investment Account that held Gertrude’s assets. No one challenged the validity of these Wills.
[4] In May 2013, Gertrude changed her Will to favour James, so that on her passing, he would receive 75% of Gertrude’s estate and Joan would receive 25%. Later, in the period of Gertrude’s life after August 20, 2013, when James arranged for her to move from Waterloo to Toronto, Gertrude executed nineteen documents during a thirteen-month period. These documents, which I will refer to as the “Post-August 2013 Documents” would, if valid, have the effect of entitling James to all of Gertrude’s wealth and Joan to nothing.
[5] Joan challenged the validity of the May 2013 Will and all the Post-August 2013 Documents on the basis that Gertrude lacked testamentary capacity because she was affected by delusions that caused her erroneously to believe that Joan was uncaring, unkind, and inattentive toward her which Joan claims was untrue. Joan maintained that James exerted undue influence over Gertrude from May 2013 onward. Joan’s position was that the last Will that Gertrude made free of mental incapacity and free of undue influence was her 2008 Will, and that all documents executed thereafter must be set aside. Joan thereby claimed entitlement to 50% of Gertrude’s estate.
[6] James contended that Gertrude was lucid and capable to her death and denied that she suffered from any delusions that influenced her will-making. He testified that Gertrude’s decision to punish Joan through diminished inheritance had its roots in their often-tense relationship, conjuring long-past incidents and more recent friction to show that Gertrude had a factual basis on which to disinherit her daughter.
[7] James denied that he unduly influenced his mother in her decision to leave him everything. He contended that he arranged for Gertrude’s re-location to Toronto out of concern for her well-being and to provide comfort in the last stage of her life. At this same time, Gertrude lost her long-standing Waterloo-based lawyer and financial advisor while James directed the retainer in Toronto of a team of three lawyers and an on-call capacity advisor, he says at Gertrude’s direction and on her instructions to seek late-life tax planning. It was coincidental, James insisted, that the by-product of this flurry of complex legal, banking, and estate planning activity and the resultant stream of complex documents presented to Gertrude in her 91st year, when she was frail and rebounding from home to hospital, was that Gertrude’s wealth was transferred to a joint account with James, referred to as the “BMO Investment Account”, stripping her estate of any value and rendering any of her Wills meaningless. Joan denied that any of this was for tax planning, stating that James set out to galvanize his hold on an unequal share of Gertrude’s wealth before their mother changed her mind and reverted to equal distribution.
[8] James claimed that the assets that were transferred to him by Gertrude in the BMO Investment Account were his on Gertrude’s death pursuant to a right of survivorship that he says he purchased from his mother, in an arm’s length contract for consideration. Joan submitted that James holds these assets subject to a resulting trust in favour of Gertrude’s estate.
[9] For the reasons that follow, I have determined that Gertrude had testamentary capacity throughout, including when she entered into the May 2013 Will. I find that Gertrude entered into the May 2013 Will without undue influence. I have concluded that the May 2013 Will and its related amendment to the Alter Ego Trust were the last valid testamentary documents executed by Gertrude. I find that the Post-August 2013 Documents that impact Gertrude’s distribution of her wealth were entered while Gertrude was subject to undue influence and are thereby invalid. They shall be set aside. I conclude that James holds the assets transferred to him by Gertrude, including the BMO Investment Account, subject to a trust in favour of Gertrude’s estate, and is required, as estate trustee under the May 2013 Will, to distribute those assets in accordance with the May 2013 Will: 75% to James and 25% to Joan.
[10] I refer to the family members in these Reasons by their first names, respectfully, for clarity and for ease of review of what follows. I will at times refer to Gertrude as the “testator”, following the current practice of using the term “testator” to apply to anyone who dies leaving a Will.
I. PROCEDURAL HISTORY
[11] Before identifying the issues that arose from this trial, I will explain the procedural history that resulted in the parties’ two applications being consolidated for adjudication as a trial.
A. The Applications
[12] James’ Application was brought on May 2, 2016 in this Court’s file number 05-69/16 against Joan, Joan’s daughter, and the Bank that held the Investment Account that contained Gertrude’s wealth at the time of her death: the Bank of Montreal (“BMO”). James sought a declaration that the May 2013 Will and nine of the nineteen Post-August 2013 Documents were effective in transferring to James all the accounts that Gertrude held jointly with James, principally the BMO Investment Account.
[13] Joan brought an Application on June 6, 2016 in this Court’s file number 05-100/16 against James both in his personal capacity and as Estate Trustee of Gertrude’s estate. Joan sought an Order that all Wills, trust indentures, powers of attorney, testamentary dispositions, and other estate planning arrangements entered into by Gertrude after January 1, 2008 are invalid on the basis of lack of capacity, or because they were procured by undue influence, duress, or fraud. The allegation of fraud was withdrawn prior to trial. Joan sought to set aside the nine Post-August 2013 Documents identified by James, and seven other Post-August 2013 Documents.
[14] Both James and Joan characterized the Post-August 2013 Documents in their Applications as “Estate Planning Documents”. The materiality of this will become more evident when I address James’ submission that certain of these documents were not Estate Planning Documents, or “Will Substitutes”, or testamentary instruments, but rather were contracts.
B. The Orders
[15] From May 2016 onward, there were a series of Orders that affected the development of this case to trial. I will address those that had an impact on the trial process.
(a) The Fund Preservation Orders
[16] On May 5, 2016, Gordon J. ordered, on consent, that two-thirds of the BMO Investment Account be released to James but that one-third be preserved pending judgment of the parties’ Applications (the “Preserved Funds”). On June 17, 2016, Mesbur J. continued the preservation of these funds pending trial. On June 21, 2017, Hainey J. issued an Order directing the use of certain of the Preserved Funds to pay the income taxes that had been generated by their growth.
(b) The Orders Consolidating the Applications and Conversion to a Trial
[17] On October 4, 2016, Hainey J. issued ordered that the Applications be consolidated to continue under court file number CV-16-5069-00ES (the “Consolidated Application”), with James constituted as Applicant and Joan as the Respondent. Joan’s daughter and BMO were removed from the Consolidated Application. On June 13, 2017, Hainey J. ordered that the Consolidated Application be converted to a trial.
(c) The Order Regarding Statements of Issues for Trial
[18] On December 7, 2017, McEwen J., implemented a timetable for the development of the Consolidated Application to trial and on April 18, 2018 ordered, on consent, that the pleadings in the Consolidated Application would consist of the parties’ Notices of Application and Statements of Issues that each party would deliver to supplement their pleading. In furtherance of this Order, each party delivered a Statement of Issues which, they acknowledged, supplemented their Notices of Application and together constituted the Trial Record.
[19] The parties agreed, and I ordered on their consent, that Joan would be constituted as the Plaintiff in the trial of this Consolidated Application, and James as the Defendant.
II. ISSUES
[20] Gertrude made testamentary dispositions during four phases of her life: three Wills leading to 2005; July 2008; May 2013, and; on January 4, 2014 as one of the nineteen Post-August 2013 Documents. The 2005 Wills and the 2008 Will are not challenged.
[21] Joan sought to set aside all of Gertrude’s testamentary dispositions after her 2008 Will. James sought to uphold the Post-August 2013 Documents which if valid would, together with the 2014 Will and its Codicil, have the effect of revoking all previous Wills.
[22] This trial raised two foundational issues for determination:
What is the effect of the Post-August 2013 Documents? If the testamentary dispositions, gifts and transfers contained among them are valid, they govern the distribution of Gertrude’s assets.
If those Post-August 2013 Documents that pertain to Gertrude’s distribution of her wealth are not valid, is the May 2013 Will, and its related amendment to the Alter Ego Trust, valid? If so, it will revoke the 2008 Will and govern the distribution of Gertrude’s estate. If not, the 2008 Will, contested by no one, governs.
[23] I will now summarize the approach that I will take to the analysis of these issues.
III. APPROACH TO ANALYSIS
A. Analytical Approach to Determining Whether the May 2013 Will is Valid
[24] The starting point for my analysis is not the Post-August 2013 Documents, even though these are the last estate planning documents executed by Gertrude prior to her death, but rather the events leading to May 28, 2013. It was on that day that Gertrude executed her May 2013 Will and thereby revoked her previous, 2008 Will which provided for equal distribution of her wealth on her death to her children in identical shares; instead leaving 75% to James and 25% to Joan.
[25] To assess whether the May 2013 Will is valid, my analysis will focus on the following:
(i) Was the May 2013 Will executed in suspicious circumstances? If so, the rebuttable presumption of testamentary capacity is displaced and the propounder of the Will has the burden of establishing that the testator had the mental capacity to execute the Will: Vout v. Hay, 1995 CanLII 105 (SCC), [1995] 2 S.C.R. 876, at paras. 25-27.
(ii) Did Gertrude have testamentary capacity in May 2013? The only challenge that Joan made to the long-established test for testamentary capacity originated in Banks v. Goodfellow (1870), [1861-73] All ER Rep 47 (E.W. Q.B.), is that Gertrude suffered from delusions that affected the disposition of her estate. I will assess whether the beliefs that influenced Gertrude to change her testamentary dispositions in her 91st year were the result of delusions.
(iii) Was Gertrude subject to undue influence at the time of execution of the May 2013 Will? I must assess whether Gertrude’s change in her will-making was of her own intention or the expression of James’ mind: Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at p. 377. The party challenging the May 2013 Will, Joan, has the burden of establishing undue influence: Seguin v. Pearson, 2018 ONCA 355, 141 O.R. (3d) 684, at para. 11.
(iv) If Gertrude’s May 2013 Will is valid, was it revoked by the testamentary dispositions that are amongst the Post-August 2013 Documents?
[26] I will assess Joan’s contention that the May 2013 Will and all the Post-August 2013 Documents are invalid, and all must be set aside, on the basis that Gertrude did not have testamentary capacity and was subject to James’ undue influence. Joan submitted that I should uphold and give effect to the 2008 Will that gifts Gertrude’s estate to Joan and to James equally.
[27] I will also assess James’ contention that the Post-August 2013 Documents are all valid and must all be applied as the proper expression of Gertrude’s testamentary disposition.
B. Approach to Determining the Validity of the Post-August 2013 Documents
[28] The unequal wealth distribution provided for by the May 2013 Will set in motion a torrent of activity. In the thirteen-month period from August 15, 2013 to September 12, 2014, James or the professionals chosen and retained by him prepared and presented to Gertrude nineteen documents, which I refer to collectively as the “Post-August 2013 Documents”. To explain my determination of their validity, I will first describe what they are.
(a) Categorizing the Post-August 2013 Documents
[29] The following is a list of the Post-August 2013 Documents with the titles that I will attribute to them in the analysis that follows and with the date of execution by Gertrude:
(i) TD Joint Account Application, August 9, 2013;
(ii) August 2013 Investment Distribution Agreement, August 20, 2013;
(iii) BMO Joint Account Opening Documents, on September 5, 2013, September 25, 2013 and October 21, 2013;
(iv) 2013 Sale of Right of Survivorship, October 5, 2013;
(v) 2013 Fund Disposition Agreement, October 5, 2013;
(vi) 2013 Use of Funds Agreement, October 5, 2013;
(vii) 2013 Joint Account Agreement, October 5, 2013;
(viii) October 2013 Power of Attorney for Personal Care, October 5, 2013;
(ix) October 2013 Personal Care Appointment, October 5, 2013;
(x) 2014 Gift of Indebtedness Agreement, January 3, 2014;
(xi) 2014 Deed of Gift, January 3, 2014;
(xii) 2014 Will, January 3, 2014;
(xiii) 2014 Alter Ego Trust Revocation Deed, January 3, 2014;
(xiv) 2014 Power of Attorney for Property, February 7, 2014;
(xv) 2014 Intention Declaration, August 1, 2014;
(xvi) 2014 Wish Declaration, August 1, 2014;
(xvii) 2014 Conflict of Interest Waiver, August 19, 2014;
(xviii) 2014 Will Codicil, August 22, 2014;
(xix) 2014 Ratification Declaration, September 12, 2014.
[30] This array of documents was presented to Gertrude in her 91st and 92nd year, some upon her discharge from hospital and others just before her admission. At least one was executed while hospitalized. They collectively comprise over 60 pages of dense, often repetitive terms, some documents bearing titles three lines in length. The sheer volume, mass, and weight of these documents stands in stark contrast to the simple, straightforward Wills that Gertrude had previously implemented, once every few years, in 2005, 2008, and 2013, with the assistance of her long-standing and trusted counsel, Mr. Michael McCarter.
[31] I will have much more to say about each of the Post-August 2013 Documents. But now, I will categorize them into groups, for ease of analysis, except for the 2014 Conflict of Interest Waiver which defies categorization, as follows:
(i) The Powers of Attorney: The October 2013 Power of Attorney for Personal Care; the October 2013 Personal Care Appointment; the 2014 Power of Attorney for Property.
(ii) The Bank Account Applications: The TD Joint Account Application; the BMO Joint Account Opening Documents.
(iii) The 2014 Will and Codicil: the 2014 Will; the 2014 Alter Ego Trust Revocation Deed; the 2014 Will Codicil.
(iv) The Lifetime Gift Documents: The 2014 Gift of Indebtedness Agreement; the 2014 Deed of Gift; the 2013 Use of Funds Agreement.
(v) The Estate Planning Documents: The August 2013 Investment Distribution Agreement; the 2013 Sale of Right of Survivorship; the October 2013 Fund Disposition Agreement; the October 2013 Use of Funds Agreement; the October 2013 Joint Account Agreement; the 2014 Intention Declaration; the 2014 Wish Declaration; the 2014 Ratification Declaration.
[32] Joan admitted that Gertrude had capacity to manage her property. As such, there was no challenge to Gertrude’s capacity to enter the Bank Account Applications. Similarly, Joan did not challenge the validity of the Powers of Attorney.
[33] There can be no question that the 2014 Will and Codicil are testamentary dispositions. The Gifts During Lifetime category lists those documents that constitute gratuitous transfers of assets made by Gertrude in the period from August 2013 to her death.
[34] This leaves the group of eight documents that I have grouped together as the “Estate Planning Documents”: termed as such because, as I will explain, they all were created to have a role in Gertrude’s distribution of her wealth on her death.
(b) Characterizing the Estate Planning Documents
[35] The nature and character of the Estate Planning Documents is important to my analysis of their validity. This is because my assessment of Gertrude’s capacity and the issue of undue influence, and the application of the appropriate test, presumption, and burden, will depend on my characterization of the Estate Planning Documents.
[36] Too much trial time was consumed in James’ argument that the Estate Planning Documents were not part of Gertrude’s estate planning, notwithstanding his characterization of them as such in his Notice of Application and in his Statement of Issues, and notwithstanding that they clearly flowed from Gertrude’s distribution of her wealth. James submitted that the Estate Planning Documents were contracts designed to advance Gertrude’s goal of tax planning. This argument fueled James’ contention that Joan could not even be heard to challenge the 2013 Sale of Right of Survivorship because she did not have privity of contract and because she failed to plead that Gertrude lacked capacity to contract. I do not accept these submissions.
[37] James contended, alternatively, that the Estate Planning Documents were gifts by Gertrude to James during her lifetime of the ownership interest in Gertrude’s assets upon her death. I found that certain of the gratuitous transfers contemplated by these documents took effect during Gertrude’s life, but others on her death.
[38] Joan contended that the Estate Planning Documents were testamentary gifts, or testamentary dispositions in the nature of ‘Will substitutes’ because their purpose was to direct the distribution of Gertrude’s wealth on her death.
[39] For reasons that will follow, I determined that the Estate Planning Documents all had at their core the distribution of Gertrude’s wealth on her death. This was seen in reference to whether the Investment Account in which Gertrude’s wealth was preserved would be owned by James, outright, by operation of his ownership of the right of survivorship, or whether James would at that time hold the Investment Account in trust for Gertrude’s estate. But Gertrude also made other dispositions of a testamentary nature through these documents, whereby she would grant or deny entitlements to her children. Accordingly, I find that the Estate Planning Documents are testamentary in nature. I state this determination now to frame the legal principles that I will apply to determine whether the Estate Planning Documents are valid.
(c) Analytical Principles in Assessing the Validity of the Post-August 2013 Documents
[40] I will assess the validity of the challenged Post-August 2013 Documents using the principles applicable to their characterization. The validity of the 2014 Will and Codicil, as testamentary dispositions, will be assessed using the same analysis as I will apply in assessing the validity of the May 2013 Will: Banks; and Hall v. Bennett Estate (2003), 2003 CanLII 7157 (ON CA), 64 O.R. (3d) 191 (C.A.).
[41] The validity of the Lifetime Gift Documents will be assessed by the principles applicable to inter vivos gifts. For reasons that I will explain, I find that in the period from August 2013 to September 2014, James was in a relationship of influence with his mother with the potential for dominance: Morreale v. Romanino, 2017 ONCA 359, at paras. 22-23. Accordingly, as donee, James had the onus of establishing that Gertrude had capacity to donate and he had the burden of rebutting the presumption of undue influence and the presumption of resulting trust: Foley (Re), 2015 ONCA 382, 125 OR (3d) 721, at paras. 25-28.
[42] The validity of the Estate Planning Documents will be assessed using principles applicable to testamentary dispositions for both issues of capacity and undue influence, as these documents pertain to the transfer to James of rights that had effect at the time of Gertrude’s death: Keljanovic Estate v. Sanseverino (2000), 2000 CanLII 5711 (ON CA), 186 D.L.R. (4th) 481 (Ont. C.A.), leave to appeal refused, [2000] S.C.C.A. No. 300. Regarding the issue of testamentary capacity, James has the burden of establishing that Gertrude was capable at the time of the execution of these documents as I have found, for reasons that I will explain, that there were suspicious circumstances present at the time of Gertrude’s will-making: Vout, at paras. 25-27.
[43] If the Estate Planning Documents are invalid, James will have received Gertrude’s assets, including joint ownership in the BMO Investment Account, through gratuitous transfers. Gratuitous transfers between a parent and an adult child are subject to the presumption of resulting trust in favour of the deceased parent’s estate and are subject to the presumption of undue influence, in accordance with the principles stated in Pecore v. Pecore, 2007 SCC 17, 1 S.C.R. 795; Sawdon Estate v. Sawdon, 2014 ONCA 101, 119 OR (3d) 81, at para. 35, 56-57; Foley (Re), at para. 26; Mroz v. Mroz, 2015 ONCA 171, 125 OR (3d) 105, at para. 72.
[44] For inter vivos gifts, my assessment of undue influence will be different than for testamentary dispositions. This is because inter vivos gifts, made in circumstances that have a potential for dominance, give rise to a rebuttable presumption of undue influence while a party attacking a testamentary disposition has the onus of proving undue influence, on a balance of probabilities: Seguin, at paras. 10-11.
C. Factual Framework for Analysis
[45] My assessment of whether Gertrude had testamentary capacity required a determination of whether she suffered from delusions that influenced her will-making. Did Gertrude have delusions that caused her to falsely conclude that Joan was unkind, uncaring, inattentive, and untrustworthy, and thereby treat her unequally in her will-making, as submitted by Joan, or were Gertrude’s beliefs towards Joan in 2013 and onward the product of a lifetime of tense emotions and destructive incidents that reached a breaking point, as submitted by James? To answer this question, I have considered all the parties’ evidence, which dates to childhood.
[46] Similarly, to assess whether James exerted undue influence over Gertrude, I must assess the factual circumstances that lead to Gertrude’s making of her May 2013 Will and her execution of the 19 Post-August 2013 Documents. I must determine whether the facts that I find establish that Gertrude’s disinheriting of Joan was an expression of her own intentions, as submitted by James, or the result of her volition and will being dominated by James’ manipulation, coercion, or outright abuse of power, as contended by Joan.
[47] I will provide an outline of the facts that I have found to apply to my determination of the issues, focusing on the following segments in Gertrude’s life as they pertain to her testamentary dispositions:
I. Events Leading to the 2005 Wills
II. Events Leading to the 2008 Will
III. Events Leading to the May 2013 Will
IV. Steps Taken by James Upon Learning of the May 2013 Will
V. Events Pertaining to the Estate Planning Documents and the 2014 Will
IV. EVENTS LEADING TO THE 2005 WILLS
A. The Family
[48] Gertrude Berges was born on May 14, 1922, into an entrepreneurial family that owned and operated the Grand Hotel in the Kitchener-Waterloo community where Gertrude would reside for 91 years. Gertrude married LeRoy Rellinger, and through marriage became Gertrude Rellinger.
[49] LeRoy was an accountant whose passion was stock investment. And so it was that Gertrude became a keen, committed student of the stock market. Her parish priest, Monsignor Edward David Sheridan, recounted Gertrude’s statement that to have a successful marriage with a passionate stock investor husband, she was intent on learning the ways of the stock market. She did.
[50] When Gertrude was 35 years old, she had her first child, Joan, followed by James 6 years later in 1963. Joan graduated from the University of Toronto in 1980 and had a lengthy career in her area of study. Joan married and resided with her family throughout in the Waterloo community.
[51] James lived at home while attending university and graduated in 1986. He left home in 1989 but did not work in his area of study and did not begin work in his current field as a realtor until 24 years later. Instead, he worked in a hardware store, then as a massage therapist, and in an administrative capacity in a therapy clinic.
[52] In 1992, James angered his mother by marrying in circumstances Gertrude did not approve. He separated in 2005. James would later settle his matrimonial law obligations using money provided to him by Gertrude, including a loan of some $1,500,000, and he divorced in 2007. In 2011 James remarried and has lived in Toronto. He stopped working in 2013, stating that he did so to dedicate himself to his mother’s needs.
[53] James testified that Gertrude always provided money to fund his family’s expenses. He conceded that in his adult life, he could not have maintained his standard of living on his own earnings. He needed and came to rely on his mother’s gifts, whether in times of difficulty, such as his matrimonial litigation, or generally to support his lifestyle. He accepted Gertrude’s generosity unabashedly, stating that Gertrude wanted him to have a nice life and not to worry about money. But along with the security that came with Gertrude’s financial support was the insecurity that derived from the possibility that it might someday no longer be available.
B. The Family Dynamics
[54] Joan and James testified that Gertrude was autocratic and strong-willed. These observations were echoed by all the witnesses who knew her. The parties spoke of Gertrude as an astute, diligent, and passionate stock investor, independent and confident, who was also controlling and dominant in her parenting. All recalled Gertrude’s philosophy, repeated throughout the trial as if a mantra and foisted on Gertrude as if life-defining, that those who treated her well would be rewarded and those who treated her poorly would be punished.
[55] Joan testified that mother-daughter conflict emerged in her teen years and, in one form or another, permeated her life-long relationship with Gertrude. Joan complained that Gertrude treated James better. As children, he had fewer family chores and fewer expectations. Gertrude criticized him less and praised him more easily. His transgressions were more readily forgiven and forgotten. James stated, and Joan agreed, that Joan was more defiant than James in dealing with Gertrude. Joan would choose confrontation when James would choose concession if not outright submission.
[56] James testified to incidents of bad conduct and bad judgment by Joan, to seek to establish that Joan would thereafter be branded as a person of poor character in Gertrude’s estimation. Joan admitted that in about 1982, she took one of her father’s valuable stock certificates, stored meticulously by him. Joan stated that she told her father of it within a week and explained that she had taken it to urge him to carry through with his promise to assist in her purchase of a home. James maintained that Joan hid the stock certificate for some two years, and only conceded to having taken it when cornered, misplacing it in the process, necessitating its replacement at a fee.
[57] James testified that when Joan was a teenager, she took one of Gertrude’s diamond rings and scratched it along the face of a mirror to determine whether it was real, destroying the mirror in the process. James recalled that Joan angered Gertrude when she was late in bringing home a boyfriend for a family dinner, and when confronted, threw a pot that dented the kitchen stove.
[58] Significant trial time was consumed in James’ presentation of anecdotes like these, intended to cast aspersion on Joan’s character and to provide historical foundation for sentiments held by Gertrude some 35 years later, that Joan was distrustful, uncaring, and unkind. James characterized these moments and others like them as pivotal events seared in Gertrude’s memory that forever tarnished her view of Joan, while Joan saw them as islands in a life-long stream of family interaction, taken out of historical context and flaunted opportunistically.
[59] The evidence was clear, and I accept, that throughout these decades, Joan had a different form of relationship with Gertrude than did James. Joan was the contact person for Gertrude’s everyday needs, while James visited periodically. Gertrude expected and came to rely on Joan’s support while being an apologist for James’ absence.
[60] However, I find that regardless of the skirmishes and strains that existed in the children’s relationship with their mother, that when she made gifts to them of her sizable wealth, she did so until 2005 in equal amounts, calculated deliberately with purposeful and meticulous precision.
C. Gertrude Gifted Her Wealth Equally to Her Children Until 2005
[61] In June 1989, LeRoy died. As matriarch of the Rellinger family, Gertrude set out to put her estate in order, and did so with the assistance of Mr. Michael William McCarter, a partner of the Kitchener law firm, McCarter, Grespan, Beynon, Weir LLP.
[62] Mr. McCarter was not available to testify due to illness. His law partner, Mr. John Angus Weir practiced with Mr. McCarter and testified in Mr. McCarter’s place. There are many instances in my analysis where I will comment on Mr. McCarter’s provision of legal services to Gertrude. I have no hesitation in finding that from at least 2003 to August 2013 – for 10 years - Mr. McCarter was Gertrude’s long-standing trusted, reliable, and respected lawyer.
[63] On October 23, 2003, Gertrude executed a Will prepared for her by Mr. McCarter. This Will appointed Joan and James as estate trustees, and on Gertrude’s death gave to them the residue of her estate in equal shares: “To divide all the rest and residue of my estate into as many equal shares as there are those children of mine…”.
[64] The parties stated that by January 2005, Gertrude had become angry with James and his first wife. Joan explained that this resulted in Gertrude consulting with Mr. McCarter about a possible amendment to her Will to limit James’ inheritance to $2,000,000 and leaving the rest of her wealth to Joan. However, Gertrude did not carry through, instead choosing to scold her adult son, in a letter handwritten on January 27, 2005: “Remember, I am the matriarch of the Rellinger family. I am in charge and nobody tells me what to do with my property or money. … I have been very generous with you and at 82 years, I don’t need to be treated so badly. … Grow Up!”
[65] Days later, on February 8, 2005, again assisted by Mr. McCarter, Gertrude executed a Will that modified the 2003 Will by removing James as a Trustee, leaving only Joan in this capacity. However, in section III(d) of this February 2005 Will, Gertrude continued to give one-half of her estate to each of her children. I find that this is an example of Gertrude’s consistent approach of equal division of her wealth to her children, notwithstanding disappointment.
[66] Along with the February 2005 Will, on June 1, 2005 Gertrude created an Alter Ego Trust as part of her estate planning. Gertrude executed that day a Trust Deed (the “2005 Alter Ego Trust Deed”) to establish a trust that would hold her increasingly sizable assets, referred to as “Settled Property”. These assets, mostly stock investments, were at that time held in an Investment Account with Toronto Dominion Bank managed by Gertrude (the “TD Investment Account”).
[67] The Alter Ego Trust held the TD Investment Account for distribution on Gertrude’s death. The beneficiaries designated in the 2005 Alter Ego Trust Deed were Joan and James. The 2005 Alter Ego Trust Deed operated, in its section 2.2, in conjunction with the February 2005 Will in providing that on Gertrude’s death, the Trustee would transfer the amounts in the Trust, principally the TD Investment Account, to Joan and James in equal shares.
[68] On December 16, 2005, Gertrude executed another Will, again with the assistance of Mr. McCarter, that modified the February 2005 Will by reinstating James as an Estate Trustee, along with Joan. In section III(d) of this December 2005 Will, Gertrude continued to give one-half of her estate equally to each of her children, using the same grant as contained in the February 2005 Will. The 2005 Alter Ego Trust Deed was not amended.
[69] Throughout the years 1989 to 2005, Gertrude made gifts to Joan and James and kept careful track of them. I found revealing two separate ledgers, each in the cursive handwriting that all agreed was Gertrude’s, remarkable for its clarity and obvious attention to detail. These ledgers contain one carefully dated entry on each row, with three columns: one explaining the reason for the gift, and two distinct columns dedicated to each of Joan and James. The columns showing the amounts provided to each of Joan and James are mirror images. On 32 different occasions, from October 1989 to December 2005, Gertrude gave Joan and James 32 identical gifts: to the penny.
[70] The occasions were varied: special days such as Christmas, Birthdays, or Valentine’s Day; or days on which Gertrude cashed in a stock and gave the proceeds to her children. On each of the 32 entries made over a 6-year period, Gertrude gave precisely equal amounts to Joan and James. The monetary amounts were often substantial, by any standard. Gertrude’s ledger shows that in the period from October 1989 to December 2005, Joan received from Gertrude monetary gifts totalling $4,261,935, and James received the identical amount on roughly identical dates.
[71] From this I conclude that for the 16-year period from 1989 to 2005, Gertrude had a demonstrated intention to provide for her children equally in life and equally in the distribution of her Estate on her death. This is amply demonstrated both in her conduct in inter vivos gifts and in the unchallenged Wills of 2003 and 2005. I find, as well, that Gertrude consistently held this intention notwithstanding her sometimes-strained relationship with each of her children.
V. EVENTS LEADING TO THE 2008 WILL
A. Gertrude’s Decline from 2005 to 2008 and Declining Relationship with Joan
[72] In May 2005, at 83 years of age, Gertrude sold the family home that she had owned and lived in for 49 years and arranged to move into Waterloo Heights, an adult lifestyle retirement residence. Joan assisted Gertrude in her move, but her stay in this independent setting would be brief. Four days later, Gertrude was admitted to hospital. A bone scan disclosed that Gertrude had fractured her vertebra. She was diagnosed with severe spinal stenosis, necessitating three weeks of hospital care followed by three months of therapy in a functional enhancement unit.
[73] Gertrude was not physically fit to return to independent living at Waterloo Heights, due to increased need for care. Gertrude was, by reason of her new physical limitations, required to move out of Waterloo Heights even before she had settled in.
[74] Joan assisted Gertrude in the search for a long-term care facility. Joan testified that there were limited options available in Waterloo. Neither James nor Joan testified of any broader search in Toronto, where James resided, or indeed that James had any role in Gertrude’s search for a care facility in Waterloo, or even in his mother’s care at that time.
[75] Gertrude’s first choice had a waiting list. With Joan’s input, Gertrude settled on Columbia Forest Long-Term Care Centre in Waterloo (“Columbia Forest”). It was then a newer facility and was close to Joan’s home. Gertrude moved in on November 9, 2005.
[76] Joan testified that she visited Gertrude on average once a week, usually on a Friday, sometimes more and at times less. She recalled that Gertrude was not happy, principally complaining of the food. Joan would bring her treats and would run errands. James lived in Toronto and Joan stated that he visited Gertrude only on special occasions three to four times a year. James denied this, stating that he called his mother frequently, and would visit monthly. The Columbia Forest admissions form showed that Joan was the primary family contact for Gertrude.
[77] Gertrude’s health worsened on June 29, 2007 when she fell during a visit at Joan’s home. She sustained a gash to her forehead and was in pain. Joan took Gertrude back to Columbia Forest, considering the injuries to be minor. However, when assessed at Columbia Forest, Gertrude was transferred to hospital, where she was diagnosed with a fractured hip, resulting in an operation, and a lengthy hospital stay. When Gertrude was discharged, she had greater physical limitations than before and greater dependence on her caregivers, causing her considerable distress.
[78] I find that this unfortunate fall while at Joan’s home, the ramifications of which to Gertrude were initially underestimated by Joan, caused a deterioration in Gertrude’s physical condition and mobility, and also initiated a steady erosion in her relationship with Joan.
[79] Joan testified that Gertrude began to make unfounded allegations of her. In 2007 Gertrude accused Joan of taking money out of one of Gertrude’s bank accounts. Joan explained that the funds had been transferred between accounts to facilitate the payment of expenses. Gertrude accused Joan of taking her furniture. Joan explained that she had arranged for the storage of Gertrude’s furniture from her move out of Waterloo Heights, and then had the furniture delivered to James, as she had requested. Gertrude accused Joan of using Gertrude’s money to pay for Joan’s homeowner’s insurance policy premium. Joan explained that Gertrude’s money was applied to cover the cost of an insurance rider meant to insure Gertrude’s jewelry, and not for home insurance.
[80] Joan spoke of these exchanges to illustrate a deteriorating relationship with her ever-more demanding mother, who increasingly viewed Joan as distrustful: according to Joan, for no reason.
B. Gertrude’s 2008 Will
[81] On July 18, 2008, Gertrude executed another Will (the “2008 Will”), again with the assistance of Mr. McCarter, that modified the December 2005 Will by removing Joan as an Estate Trustee, leaving James as the sole Estate Trustee. In section III(e) of this Will, Gertrude continued to give one-half of her estate equally to each of her children in the same manner – indeed in the same wording - as she had done with the February 2005 and December 2005 Wills.
[82] But there was an important change. Gertrude inserted a new clause that directed her Estate Trustee to: “forgive the outstanding principal and interest balance of any and all loans made by me to my said son or daughter prior to the date of this my Will”. Gertrude had not loaned money to Joan. She loaned money only to James, including the $1,500,000 to fund his matrimonial litigation.
[83] I find that to the extent that the 2008 Will served to forgive amounts that Gertrude had loaned to James without balancing with a gift in an equal amount to Joan, it constituted Gertrude’s first manifestation of an intention in a testamentary disposition to grant an unequal division of wealth to her children.
[84] Along with the 2008 Will, Gertrude executed on July 18, 2008, an amending deed to the 2005 Alter Ego Trust Deed (the “2008 First Amending Deed”), which amended paragraph 9 of the 2005 Alter Ego Trust to remove Joan as a substitute trustee, leaving James alone in this capacity.
C. Findings on Gertrude’s History of Will-Making From 2003 to 2008
[85] In assessment of Gertrude’s conduct from 2003 to 2008 on the issue of wealth distribution on her death, I find that a clear pattern emerged. Gertrude’s changes to her Wills tracked closely the tenor of her relationship with her children. Each of them came in and out of appointment as an estate trustee depending on whether, in James’ words, they were “in Gertrude’s bad books”.
[86] Gertrude’s approach toward equal treatment bent from time-to-time but did not break until 2008. Why then? I accept Joan’s testimony that her relationship with Gertrude steadily deteriorated in the period from 2005 to 2008. Gertrude came to resent her placement at Columbia Forest, and faulted Joan for her advice in the selection of this long-term care centre. Gertrude broke her hip while at Joan’s house on June 29, 2007, and faulted Joan for the resultant decline in her health and mobility. I accept Joan’s testimony that Gertrude accused her in 2007 of taking her money, furniture, and jewellery. While Joan took the brunt of her mother’s transitional turmoil and aging angst, James was the recipient of Gertrude’s financial support to assist with his divorce.
[87] I find that Gertrude’s removal of Joan as an Estate Trustee in her 2008 Will was not a casual step. Rather, I find that by this, as well as Gertrude’s forgiveness of James’ debt contained in the 2008 Will, Gertrude demonstrated through conduct her evolving rift and distrust of Joan.
[88] I pause to make two observations that I will return to later but preview now. Joan does not complain that her mother suffered from a mental condition, including insane delusions, when Gertrude first evidenced her intention to treat her children unequally through the 2008 Will. Indeed, Joan seeks to propound the 2008 Will. Yet, I find that Gertrude’s strained relationship with Joan, fraught with accusations that Joan claimed were untrue, began before the 2008 Will with no complaint by Joan that her mother was at that time delusional and thereby lacked capacity.
[89] Second, there is a constant throughout Gertrude’s will-making from 2003 onwards: Mr. McCarter. He was, throughout, in a position to observe each of Gertrude’s intentions in will-making on multiple occasions through his role in preparing and advising on the 2003 Will, the 2005 Wills, and the 2008 Will. This will have an impact on my consideration of Mr. McCarter’s assessment of Gertrude’s testamentary capacity in executing the May 2013 Will.
VI. EVENTS LEADING TO THE MAY 2013 WILL
A. Gertrude Gifted Her Wealth Unequally from 2005 to 2013
[90] From 2008 to 2010, Gertrude continued to express an intention to treat her children equally in the distribution of her wealth. In a letter to James dated January 4, 2010, Gertrude confirmed that James did not influence her to appoint him the sole trustee of her 2008 Will, and that she intended that her assets be divided equally between her children: “I also want to be sure that my assets are divided equally between the two of you, and what the two are left will eventually belong to my grandchildren. … Half of my assets will be yours. Half of my assets will be Joan Slover’s”.
[91] In a letter to James dated March 22, 2010, Gertrude explained that the manner by which she acquired new shares was designed to facilitate their equal division between James and Joan: “I have always bought my equities in amounts that could easily divide in two, i.e., ½ of the shares of R.B.C. or T.C.P. would automatically be transferred to you and ½ to Joan”. Gertrude did so. I earlier explained my finding that from October 1989 to December 2005, Gertrude provided monetary gifts to her children in equal amounts. As of December 2005, Gertrude’s ledgers show that she had gifted a total of $8,523,870 to her children, in equal amounts of $4,261,935, each.
[92] However, this equal distribution changed. Joan testified, and James conceded, that by the end of June 2013, Gertrude’s total monetary gifts to her children had by then increased to $14,469,870, but in unequal amounts: $8,650,435 to James and $5,819,435 to Joan. This showed that of the $5,946,000 gifted by Gertrude to her children in the almost eight-year period from December 2005 to June 2013, 73.8% went to James while 26.2% was given to Joan.
[93] Joan contended that this unequal distribution, which would be codified in the May 2013 Will, was caused by Gertrude’s delusions, in the form of fixed, false beliefs that Joan was uncaring, unkind, inattentive and untrustworthy. James submitted that the unequal treatment emerged from Joan’s growing disengagement in Gertrude’s care and disconnection with her emotional needs. I will explain my assessment of the evidence presented by the parties to support these positions.
B. Gertrude’s Treatment at Columbia Forest from 2011-2013
[94] From 2011 to 2013, Gertrude became increasingly critical of Joan and of her care at Columbia Forest. A clear picture of this was presented by Columbia Forest’s medical director, Dr. Edgar Ross Kennel.
[95] Dr. Kennel has been a medical doctor since 1982. He has throughout conducted a family practice, where at least 20% of his practice has involved geriatric medicine. When Columbia Forest opened in 2002, Dr. Kennel was appointed its medical director. He has been the attending physician for about one-quarter to one-third of Columbia Forest’s residents, including Gertrude.
[96] Dr. Kennel was examined at length on the Progress Notes that he maintained of his care of Gertrude, mostly for the two-year period from September 2011 to August 2013. I found Dr. Kennel to be a credible and sincere witness whose testimony, supported reliably by the Progress Notes, allowed for an understanding of Gertrude’s conditions and her relationship with her children.
[97] Dr. Kennel stated candidly that he had difficulty managing Gertrude’s care. He said that he would have eagerly transferred her care to another doctor, had he been able to do so. Gertrude was, in his estimation, the most difficult patient that he has ever treated. He viewed her as excessively demanding and incapable of understanding her limitations and the systemic constraints on others to meet her needs, most evident in three ways:
(a) Gertrude had a neurogenic bladder that was addressed by a permanent indwelling catheter. She complained of discomfort and inconvenience. Dr. Kennel conceded that intermittent catheterization would have been ideal for Gertrude but was not practical at Columbia Forest due to scheduling and staffing limitations;
(b) Gertrude experienced falls that she attributed to Columbia Forest’s staff, particularly their use of part-time staff. Gertrude complained that her demand to be treated by only certain, select members of the Columbia Forest staff was not heeded;
(c) Gertrude disliked Columbia Forest’s physical premises, food, and social environment. She made clear that they were not to her standards.
[98] Dr. Kennel testified that he struggled to “create allegiance” in his physician/patient relationship. For example, he observed that Gertrude was constantly watching the business channel and so he feigned interest in stock investment. Gertrude engaged by offering Dr. Kennel stock advice, which he ignored, and then accused Dr. Kennel of profiting from her stock tips without expressing adequate gratitude, demanding that he reward her with a gift.
[99] By December 2012, Gertrude had, with Mr. McCarter’s assistance, filed a complaint with the Ministry of Health and Long-Term Care accusing Columbia Forest of regulatory infractions. Gertrude threatened to similarly file a complaint of Dr. Kennel, accusing him of not providing her with proper care and treatment.
[100] Dr. Kennel was examined on a series of Columbia Forest Progress Notes, which documented his care of Gertrude and his thoughts on her conditions and how best to treat them. Dr. Kennel struggled in his ongoing assessment of whether his most difficult patient had a personality disorder that caused her to be rude, accusatory, and belittling of others, in his words “just plain mean”, or whether Gertrude had cognitive issues. His evidence based on his Progress Notes showed that he vacillated depending on the severity of Gertrude’s abuse of him and the staff.
[101] Dr. Kennel did not deny that Gertrude lived with the discomfort and pain of the indwelling catheter and had sustained falls at Columbia Forest in April 2013. James produced photographs that showed bruising, open scabs, and sores on Gertrude’s right leg and right arm. He agreed that Gertrude had never integrated with the Columbia Forest community. In addition to her complaints of Dr. Kennel and the staff, Gertrude was becoming increasingly angry with Joan. The Progress Notes are replete with references of Gertrude’s complaint that “her daughter does not visit anyway”.
[102] I accept from Dr. Kennel’s testimony that in the period from September 2011 to August 2013, Gertrude’s physical condition was worsening. Gertrude expressed to Dr. Kennel and to most anyone who took time to listen, that Joan was uncaring, inattentive, and unkind. During this period, the physical and emotional rift between Gertrude and Joan was becoming even more pronounced.
C. Gertrude’s Deteriorating Relationship with Her Children
[103] Joan testified that in 2012 she simply could not please her mother. She arranged for and took Gertrude to medical and dental appointments that only caused greater criticism.
[104] On October 26, 2012, Joan met with Dr. Kennel. In a Progress Note of that day, he recorded that Joan was “frustrated, angry and hurt by her mother’s behaviour and accusations”. Dr. Kennel wrote that “there are a lot of family dynamics and family history at play here including sibling rivalry and jealousy”. Dr. Kennel told Joan that she had three choices in dealing with her mother: to decide the inheritance money “is not worth it and refuse to be abused”, or; become submissive, as does her brother, and not be confrontational with Gertrude, or; enter into a “business relationship with her brother in that they act together in the best interests of her mother”.
[105] Joan disengaged. On Joan’s evidence, I find that she did not visit Gertrude in December 2012, not even for the Holidays, and did not resume regular weekly visits with Gertrude until April 19, 2013. I find that Joan and Gertrude had not gotten along well for some time, but from December 2012 to April 2013 they were physically estranged in addition to being emotionally disconnected.
[106] Joan testified that the reason why she did not visit during this time is because she sustained a spinal injury that caused her significant pain and loss of mobility. She stated that she attempted to call her mother periodically and at times made contact by phone. In cross-examination, Joan conceded that she resumed her hobby of curling in January 2013, but still was not physically able to visit her mother, or to have Gertrude to her home.
[107] Whatever the reason for her absence, the evidence established, and I find, that Joan disengaged for a period some five months and when she sought to re-engage with Gertrude the results were unpleasant. Gertrude was increasingly angry with her, rejecting Joan’s advice that she ought to accept her physical limitations and stop being chronically angry, resenting Joan’s lack of support for her campaign of criticism against her caregivers and was angered by Joan’s lack of empathy for the sores attributable to her transfers. Gertrude blamed Joan for the selection of her care facility, for her fall at Joan’s home, but most of all for her increasing sense of vulnerability arising from her aging in what Gertrude viewed to be an uncaring, isolated environment.
[108] My conclusion of the intensifying rift between Gertrude and Joan is best exemplified by Joan’s unhappy visit with her mother on her 91st birthday, May 14, 2013. Gertrude did not come out of her washroom to visit with Joan, causing Joan to shout her birthday greetings through the closed washroom door, deposit a piece of birthday cake on the table, and leave.
[109] The last time that Joan visited with Gertrude in Columbia Forest was in July 2013. Gertrude accused Joan of having stolen her diamond ring. Joan summoned a member of the Columbia Forest nursing staff to assist in the search for the ring, without result. The discussion became heated, and Joan was dispatched to file a police report and an insurance claim, as the ring was listed on Joan’s homeowner’s insurance. Joan testified that this meeting was “very bad” and that Gertrude was very angry with her. Joan allowed for some cooling off time and did not return to visit her mother for the Summer. As matters would develop, Joan would not see Gertrude again for eight months.
[110] James was not spared in feeling insecure in his relationship with Gertrude. Dr. Kennel testified, with his note of February 22, 2013, that James contacted him, panicked that his mother had made serious and offensive allegations of him that he says were not true. Dr. Kennel wrote that James was concerned “about his inheritance and that it might be threatened”. Dr. Kennel testified that James felt that Gertrude was “delusional”, but Dr. Kennel disagreed. He thought that Gertrude’s judgment might be “questionable” but that this “was a different issue than competency”. Dr. Kennel had a follow-up call with James on April 19, 2013, in which James stated that he continued to be “in her bad books”.
[111] In testimony, James denied the accuracy of Dr. Kennel’s note or of any concern in February 2013 regarding his inheritance. I do not accept James’ denial of concern and prefer the evidence of Dr. Kennel. I do so because James sent an email to Joan on February 24, 2013, 2 days after his discussion with Dr. Kennel, conveying his concerns and confirming that he had discussed them with Dr. Kennel. Further, in email messages to Joan of April 19 and 26, 2013 and May 3, 2013, James continued to voice concerns that Gertrude was acting inappropriately, consulting with Mr. McCarter without informing her children, and might be displaying cognitive impairment. This is an instance where I found that James’ testimony lacked credibility. I will later detail others.
[112] I find that Joan and James were both concerned about their relationships with Gertrude during 2013. They both knew that there was the possibility that in her ongoing consultations with Mr. McCarter she might change her Will without their knowledge. She did.
D. Gertrude’s 2013 Will and Amendment to the Alter Ego Trust
[113] In May 2013, Gertrude retained Mr. McCarter to act for her in the preparation and execution of a new Will and the corresponding amendment of the 2005 Alter Ego Trust Deed.
[114] In an internal email of May 6, 2013, Mr. McCarter told his law partner, Mr. Weir, that Gertrude wanted to change the 2008 Will from leaving her estate to her children in equal shares to 75% to James and 25% to Joan. Messrs. McCarter and Weir advanced two steps: they retained a research lawyer, Mr. David Finch, to assist them in identifying the appropriate steps to determine testamentary capacity, and; they retained Ms. Janice Woynarski to conduct a capacity assessment.
(a) Janice Woynarski’s Capacity Assessment
[115] Ms. Janice Woynarski has undergraduate and postgraduate degrees in Social Work. She is a member of the Ontario College of Social Workers and has been a certified Capacity Assessor since 1998. Ms. Woynarski estimated that she has conducted over 350 capacity assessments.
[116] On May 8, 2013, Mr. McCarter retained Ms. Woynarski to assess Gertrude’s capacity to execute a revised Will. Ms. Woynarski met with Gertrude on May 13, 2013 for about an hour, and then spent another 20 minutes speaking with Dr. Kennel and unidentified Columbia Forest staff members. Ms. Woynarski issued her report on May 27, 2013. In her opinion, Gertrude did not have testamentary capacity to make changes to her 2008 Will.
[117] Ms. Woynarski found that Gertrude understood the nature of a Will and unquestionably understood the amount of her stock portfolio, assets, and holdings. Gertrude acknowledged that her children would expect equal shares of her estate upon her passing and confirmed to Ms. Woynarski her appreciation that any deviation from equal sharing would result in a dispute. She concluded, correctly in my view, that all these factors pointed toward testamentary capacity.
[118] The basis for Ms. Woynarski’s conclusion that Gertrude lacked testamentary capacity was that she did not have a logical thought process in her decision-making. Ms. Woynarski testified that Gertrude told her that her rationale for changing the distribution of her estate to a percentage that favoured James was that James is an attentive son while Joan is unkind and inattentive: “she does not like Joan and likes James”. Ms. Woynarski determined, based on her discussions with Dr. Kennel and unidentified staff members of Columbia Forest, that Gertrude’s reasoning was based on a false belief – was delusional – because Joan visited Gertrude and cared for her regularly.
(b) Gertrude’s Execution of the May 2013 Will
[119] Mr. Weir testified that he and Mr. McCarter received and considered Ms. Woynarski’s capacity report prior to meeting with Gertrude. They also received and reviewed Mr. Finch’s research memorandum, that contained his views concerning the test to determine testamentary capacity. From it, Mr. Weir and Mr. McCarter concluded, in my view correctly, that their determination of Gertrude’s testamentary capacity would be based on the principles set out by the Ontario Court of Appeal in Hall, which expanded on the factors set out in Banks.
[120] It is clear from Mr. Finch’s memorandum, that he and Messrs. McCarter and Weir were focused on the issue of whether Gertrude’s desire to change her Will to reduce Joan’s inheritance was based on a mistaken belief. Mr. Finch identified case law that considered circumstances in which a testator may be found to suffer from insane delusions, negating testamentary capacity, again in my view correctly. He cited Skinner v. Farquharson (1902), 1902 CanLII 87 (SCC), 32 S.C.R. 58, and Banton v. Banton (1998), 1998 CanLII 14926 (ON SC), 164 D.L.R. (4th) 176 (Ont. Ct. J. (Gen. Div.)) as authority for the proposition that a delusion is “more than just getting the facts wrong.” Rather, it is “a persistent belief in a supposed state of facts that no rational person would hold to be true, and thus exists as real only in the mind of the believer.”
[121] Mr. Finch’s memorandum provided Messrs. McCarter and Weir with a list of issues to be considered, in addition to the “traditional Banks v. Goodfellow criteria”, and specific questions designed to probe the relationship between Joan and Gertrude to determine whether Gertrude’s disaffection with Joan, and her resultant desire to reduce her inheritance, was based on delusions.
[122] I accept Mr. Weir’s testimony that he and Mr. McCarter reviewed Mr. Finch’s research memorandum and discussed its contents in preparation for their meeting with Gertrude. He recalled that Gertrude was calling their office incessantly asking that they attend with a new Will so that she might change the distribution of her wealth to her children unequally.
[123] On May 28, 2013, Mr. McCarter and Mr. Weir met with Gertrude at Columbia Forest for between 60 and 90 minutes. Mr. Weir testified that Mr. McCarter asked Gertrude why she wanted to change her Will, and that she responded that Joan was an unkind and inattentive daughter. Gertrude told them that Joan had, at one time, called her an offensive and derogatory term. Gertrude told the lawyers that she had assisted the children over the many years, providing generous amounts, but no longer wanted to benefit Joan equally as she was, in Gertrude’s view, not a “good daughter”. Mr. McCarter explained that Joan would challenge any change in the Will. Mr. Weir swore that Gertrude was adamant that she wanted to reduce Joan’s inheritance to 25%.
[124] Mr. Weir and Mr. McCarter concluded, from their discussions with Gertrude, that she had testamentary capacity. Indeed, Mr. Weir testified that there was “no doubt in his mind” that Gertrude had testamentary capacity to change her Will and the 2005 Alter Ego Trust Deed.
[125] As in Gertrude’s 2008 Will, James remained the sole estate trustee of the May 2013 Will. Unlike the 2008 Will, Gertrude directed that her estate, then valued at in excess of $20,000,000, would be divided on her death in unequal shares to her children, 75% to James and 25% to Joan, as follows (the “May 2013 Will”): “To divide the residue of my estate into two unequal shares, one such share, being one-quarter of the residue of my estate, in respect of my daughter, JOAN CATHERINE SLOVER, if then living, and the other such share, being three-quarters of the residue of my estate, in respect of my son, JAMES FRANCIS RELLINGER, if then living;…”
[126] At the same meeting on May 28, 2013, Gertrude executed a second amendment to her Alter Ego Trust (the “2013 Second Amending Deed”) to delete section 2.2 of the 2005 Alter Ego Trust Deed and replace it with a provision that would result in unequal division between her children of the trust funds on her death, in the percentages set out in the 2013 Will: “2.2 Division Among Beneficiaries on Distribution Date. As soon as reasonably possible following the Distribution Date, the Trustees shall pay and transfer the balance, if any, of the Trust Fund then remaining to the children of the Settlor alive on the Distribution Date in two unequal shares: a three-quarters share to her son, JAMES FRANCIS RELLINGER, and a one-quarter share to her daughter, JOAN CATHERINE SLOVER,…”
[127] Mr. McCarter and Mr. Weir witnessed the execution of the May 2013 Will and the 2013 Second Amending Deed by Gertrude on May 28, 2013.
[128] I found Mr. Weir’s evidence to be credible and reliable. His testimony was internally consistent and plausible. I was impressed by his sincerity and the thoughtfulness of his testimony, which was admitted with no cross-examination. I accept Mr. Weir’s evidence on the steps taken by him and Mr. McCarter in assisting Gertrude with her May 2013 Will and the circumstances by which this Will was executed. I will address later the soundness of the determination by Messrs. McCarter and Weir that Gertrude had testamentary capacity and was not under undue influence.
VII. STEPS TAKEN BY JAMES UPON LEARNING OF THE MAY 2013 WILL
A. James’s Retainer of Professionals
[129] On May 30, 2013, Mr. McCarter and Mr. Weir spoke with James, on Gertrude’s direction, to notify him that Gertrude changed her Will to give him 75% of her estate on her death, with Joan receiving 25%. Mr. McCarter told James what, I find, he already knew: that Joan would challenge any change by Gertrude that resulted in an unequal distribution of her estate to her children.
[130] On June 5, 2013, Mr. McCarter delivered to James the May 2013 Will and the 2005 Alter Ego Trust Deed, as amended, together with a copy of Ms. Woynarski’s capacity assessment. James testified that he retained a lawyer, Mr. Edwin Flak, in July 2013 to act for him in relation to his interests in Gertrude’s estate. Mr. Flak did not testify regarding the role that he had in the steps taken by James after August 2013. Rather, he acted as James’ trial counsel.
[131] I accept Mr. Weir’s evidence that in July 2013, James began calling him and Mr. McCarter, incessantly. By July 29, 2013, Mr. Weir concluded that James and Joan were certain to litigate. Mr. Weir adduced into evidence the audio of a voicemail recording that Mr. McCarter received from Gertrude on August 8, 2013. Gertrude, with prompting from James, read from a script that directed Mr. McCarter not take any steps on her behalf without James’ authority. The transcription of this voicemail message, wherein Gertrude’s gentle voice resonates in marked contrast to James’ loud, forceful interjections, displayed by [underlining], is as follows:
Hello? [Just read it.] Hello? [Read what it says there.] Mr. McCarter? [Read it. Read that.] It’s Gertrude Rellinger calling, and he said and I’m going to tell you do not write any more letters for me and do not do anything without first discussing it with my son James Rellinger. OK?
[132] On August 9, 2013, Messrs. McCarter and Weir met with Gertrude to act on her instructions to revoke her existing power of attorney for personal care, substituting Joan for James (the “August 2013 Power of Attorney for Personal Care”). I accept Mr. Weir’s evidence that Gertrude was angry with Joan because she believed that Joan was only interested in Gertrude’s money and not her care.
[133] I accept as well that by August 26, 2013, Mr. Weir and Mr. McCarter were concerned that Gertrude might be under the undue influence of James. They concluded that they were compromised in their ability to continue to act in Gertrude’s interests, as they had received her instructions to filter their work through James’ for his pre-approval. Mr. McCarter wrote to Gertrude that day to ask that she retain new counsel as his firm would no longer act on her behalf.
[134] Mr. McCarter could not have known that James had by that time already taken significant steps to affect Gertrude’s interests. James testified that in August 2013, with the assistance of his lawyer, Mr. Flak, he retained four professionals, he says on his mother’s behalf and at her direction:
(a) Barry Corbin, a lawyer called to the Bar in Ontario in 1982, who practised in the areas of estate planning and administration. Mr. Corbin testified that he was retained by James to provide advice to Gertrude about transferring Gertrude’s assets to joint ownership with James.
(b) Mr. Morris Manning, to act as litigation counsel to Gertrude in any estate proceeding. Mr. Manning did not testify. He acted with Mr. Flak as James’ trial counsel.
(c) Ms. Ella Mary Agnew, a lawyer called to the Bar in Ontario in 1975, who practised as a solicitor in estate planning and administration. She testified that she was contacted by James’ lawyer, Mr. Flak, to act for Gertrude, and began to do so after an introductory meeting with Mr. Flak in August 2013.
(d) Dr. Elaine Yiu, a medical doctor, graduated in 1992 and certified in 1997 as a psychiatrist was retained by James on the advice of Mr. Flak, to conduct her first testamentary capacity assessment. Dr. Yiu signed a retainer agreement on August 22, 2013 with three parties: Mr. Flak, stated as acting in his capacity as Gertrude’s agent; Ms. Agnew in her capacity as Gertrude’s solicitor, and; Mr. Manning, described as acting for Gertrude, “principally as counsel for possible and actual litigation”.
[135] On August 15, 2013, before receiving any advice from Mr. Corbin, James obtained and completed the TD Bank form required to open a new investment account jointly with Gertrude.
B. The Investment Account Transfer Plan
[136] On August 16, 2013, Mr. Corbin produced to James a memorandum (the “Corbin Memorandum”) that began by introducing his mandate. Mr. Corbin recorded that James asked him to advise of the consequences of Gertrude withdrawing her investments from the TD Investment Account and placing them into an account that James would jointly own with Gertrude:
You [James] have asked me to comment on the income tax, legal and practical effects arising if your mother, Gertrude Rellinger (“Gertrude”), withdraws investments from the [Alter Ego Trust] for herself and, immediately thereafter, transfers those investments from herself into the names of Gertrude and you, so that you hold those investments jointly with a right of survivorship. I understand from you that Gertrude wishes these transfers to take place immediately. [Emphasis Added]
[137] Mr. Corbin explained to James that in the 2007 decision of Pecore, the Supreme Court of Canada held that when a parent transfers funds into a joint account with an adult child, with a right of survivorship, there is a presumption of resulting trust. This meant, he explained, that without more, the adult child would hold the assets as bare trustee for the estate of the parent.
[138] Mr. Corbin advised, further, that the Supreme Court stated in Pecore that where a parent conveys a right of survivorship alone, the parent is not making a disposition. Mr. Corbin thereby provided his opinion, with express caution that the Canada Revenue Agency might not concur, that the conveyance by Gertrude to James of the right of survivorship of a joint investment account could result in a tax-free transfer of Gertrude’s investment account, in certain circumstances. Mr. Corbin opined that if the transfer of the right of survivorship is determined to be effective, Gertrude’s investments would belong to James at the time of Gertrude’s death and would not form part of her estate.
[139] Mr. Corbin’s plan for the tax-free transfer of Gertrude’s wealth to James was referred to during trial as the “Pecore Plan”, due to its stated intention to respect the principles set out by the Supreme Court in that decision. But I will refer to it as the “Investment Account Transfer Plan”, because that is what I find it to be. It had the following four steps:
(a) Create a joint bank account held by James and Gertrude wherein James would have a right of survivorship;
(b) Transfer the assets that Gertrude held in the Alter Ego Trust, being the TD Investment Account, to the new joint bank account;
(c) Construct a sale of right of survivorship agreement designed to establish that Gertrude was not making a disposition of the Investment Account prior to her death, but rather was conveying solely the right of survivorship to James;
(d) Upon Gertrude’s death, the TD Investment Account would belong to James.
[140] I find that there is a by-product to the Investment Account Transfer Plan that is inconsistent with the Will that Gertrude implemented some three months earlier with the assistance of Messrs. McCarter and Weir. It stripped any assets from the Alter Ego Trust and thereby stripped any wealth from Gertrude’s estate. This meant that any wealth distribution that Gertrude intended through her just-completed May 2013 Will would be meaningless as her estate would be valueless. On her death, her assets would be owned by James: not by Gertrude’s estate.
VIII. EVENTS PERTAINING TO THE ESTATE PLANNING DOCUMENTS AND THE 2014 WILL
[141] After receipt of the Corbin Memorandum on August 16, 2013, James had Mr. Corbin’s opinion that if the Investment Account Transfer Plan were implemented, including if Gertrude’s investments were transferred to an investment account held jointly with James, if Gertrude transferred to James the right of survivorship of any such account, and if the transfer of the right of survivorship were determined to be valid, Gertrude’s assets would belong to James at the time of Gertrude’s death and would not form part of her estate. In Mr. Corbin’s words: “If the right of survivorship is an effective transfer, it would mean that the investments would belong to you as a consequence of Gertrude’s death by operation of law and would not form part of her estate.”
[142] The first step was for James to open an investment account with Gertrude.
A. August 15, 2013 – The Attempt to Transfer the Investment Account
[143] On Monday, August 15, 2013, the day before James received the Corbin Memorandum, James obtained from TD Bank the form necessary to open a new investment account jointly with Gertrude, with a right of survivorship. James testified that he completed the required fields and executed the new account application form together with Gertrude on August 15, 2013.
[144] James admitted that he did not speak with Mr. Corbin before receiving his Memorandum. I thereby find that James was not aware of Mr. Corbin’s recommended Investment Account Transfer Plan at the time that he set upon opening a joint investment account with Gertrude.
[145] James faced an impediment in the transfer of the Investment Account to a joint account owned by him and Gertrude: Mr. Mark Andrew Ewald, the advisor with TD Wealth, a division of the TD Bank where the TD Investment Account was held. Mr. Ewald, with a degree in business and a professional designation as a Chartered Accountant, had been Gertrude’s investment account advisor since 2007, and assisted Gertrude in the management of the assets held in the Investment Account, then in excess of $20,000,000. Mr. Ewald knew that Gertrude alone conducted all the stock investment research and alone directed all the trading in her investment account.
[146] Mr. Ewald testified that he returned from vacation on August 19, 2013 to find that James had called his office repeatedly from August 15, 2013 to August 19, 2013 to transfer the TD Investment Account from the Alter Ego Trust to a joint account with James. When James was told by staff that Mr. Ewald was absent from the office, James demanded that his request for the account transfer be escalated to management for immediate attention, professing “urgency”.
[147] Mr. Ewald testified, uncontradicted by James, that James told him on August 19, 2013 that Gertrude wanted to proceed immediately with the opening of a new investment account jointly with James and the transfer of all the assets from the TD Investment Account. Mr. Ewald would not do so without first obtaining Gertrude’s clear direction. I accept Mr. Ewald’s evidence that he was concerned about Gertrude’s interests in the transfer of the TD Investment Account and asked for the capacity assessment report that he knew, from discussion with Mr. McCarter, had been prepared. I also accept that James denied Mr. Ewald access to the capacity assessment report.
[148] On August 20, 2013, Mr. Ewald met with Gertrude and James and stated his concern that the transfer of the TD Investment Account could have tax and regulatory considerations that Gertrude might not have the capacity to understand. Mr. Ewald obtained an opinion that day from the TD Bank legal department, which stated that the account transfer from an Alter Ego Trust to a joint account, in the circumstances of the recent Will and Alter Ego Trust amendments, ought not to be completed until “the issue of [Gertrude’s] capacity to make those documents is determined”.
[149] On August 21, 2013, Mr. Ewald met with Gertrude again, this time to read this legal opinion to her. He would not be contacted again by Gertrude or James until October 9, 2013, when they directed the transfer of the TD Investment Account (except for a small holding) to a Bank of Montreal account held jointly by Gertrude and James. Mr. Ewald’s concerns for Gertrude were not addressed, but rather they were by-passed by changing to another bank.
[150] I found Mr. Ewald to be a credible and reliable witness, whose evidence was plausible and consistent with the documentary evidence. The cross-examination of Mr. Ewald suggested that he improperly delayed the transfer of the TD Investment Account and improperly consulted with Gertrude’s lawyer, Mr. McCarter, about their common client’s competence. I found this cross-examination to be unhelpful and unpersuasive. I find that Mr. Ewald set out to diligently attend to the interests of his long-standing, elderly client. I accept Mr. Ewald’s testimony, including in all areas where it conflicts with James’ testimony.
B. August 20, 2013 – The Investment Distribution Agreement
[151] On August 20, 2013, four days after receipt of the Corbin Memorandum, James met with Gertrude at Columbia Forest and presented to her a document that I will refer to as the “August 2013 Investment Distribution Agreement”, although it bears a decidedly more complex title:
Declarations of, and Agreement, between Gertrude Rellinger and James Rellinger, concerning the dispositions of funds and investments on Gertrude Relliner’s (sic) death as a result of the transfer of the right of survivorship to James Rellinger (“this document”)
[152] Mr. Corbin denied that he prepared this document. I accept James’ testimony that it was prepared by his lawyer, Mr. Flak. I also accept that this document was not prepared at Gertrude’s direction because there is no evidence that in August 2013 Gertrude directed anyone to prepare a document of this nature on her behalf. There was also no evidence that Gertrude had any advance opportunity to review this document prior to its presentation to her. She executed it, after discussing its contents only with James, who testified that this document was further to Gertrude’s request for “tax planning”.
[153] The August 2013 Investment Distribution Agreement provided for the following:
(a) Gertrude’s direction that the TD Investment Account be transferred out of the Alter Ego Trust to a new joint investment account to be held with James, with her agreement that on her death, the entirety of the account would belong to James;
(b) Should James receive 100% of the new investment account on Gertrude’s death, Gertrude wished for James “to share twenty-five percent of the after-tax value” with Joan, “at a time which James decides is appropriate”. The Agreement recited that Gertrude knows “that James will act reasonably in determining the correct time, or times, to provide these funds to Joan”;
(c) If Joan did not agree, within five days of James requesting her agreement, that the May 2013 Will and related amendment to the Alter Ego Trust are valid, and unless Joan agreed not to challenge Gertrude’s funding of the new joint investment account with James and his right to ownership of it on her death, Gertrude did “not wish to provide any benefit to Joan, nor for Joan to obtain any benefit from James”.
[154] Gertrude did not receive any legal advice in relation to this document. Her lawyer, Mr. McCarter was not consulted or involved. James’ lawyer drafted the following clause to address the exclusion of Mr. McCarter:
I [Gertrude] have not involved Mr. McCarter with this agreement, the creation of joint accounts, with James and my sale of the survivorship interest in the investment and other accounts because I clearly understand these transactions and I am concerned about whether Mr. McCarter will be able to act promptly, in accordance with my wishes, without disclosure to others, in connection with these transactions, including the related documents.
[155] I find that this clause is flawed. First, the transactions that are said to have been “clearly understood” by Gertrude had not even yet occurred. The joint investment account had not by that date been opened, and the sale of the survivorship interest would not take place for another six weeks. How could she have “clearly understood” the sale of a right of survivorship without explanation from anyone? Second, on August 20, 2013, the only “disclosure to others” that Mr. McCarter had been involved in was a discussion with Mr. Ewald, which occurred the day before.
C. The Retainer of Dr. Wendy Yiu
[156] Dr. Yiu travelled to Waterloo to meet with Gertrude on August 21, 2013, the day after Gertrude signed the August 2013 Investment Fund Transfer Agreement. This meeting was organized by James’ lawyer, and was further to the “Primary Mandate” set out in the retainer agreement that Dr. Yiu would sign the next day: to conduct an “objective, independent, expert assessment of Gertrude Rellinger’s capacity to conduct material financial and legal transactions, her testamentary capacity and her vulnerability to undue influence from anyone, especially from her son, James Rellinger.”
[157] I find revealing that Dr. Yiu’s retainer agreement, signed August 22, 2013, was with Mr. Flak, Ms. Agnew, and Mr. Manning. I will explain later that Mr. Agnew testified that she did not meet Gertrude until a month later, in September 2013, and Mr. Manning did not meet Gertrude, and obtain a retainer to act for her, until two months later, in October 2013. By the terms of Dr. Yiu’s Retainer Agreement, two of Gertrude’s lawyers, Ms. Agnew and Mr. Manning, entered into a contract to retain Dr. Yiu as a capacity assessor months before they met their client.
D. Analysis – Findings Regarding the Events of August 2013
[158] My findings regarding the events of August 2013 impact my assessment of the Estate Planning Documents, the Lifetime Gift Documents and the 2014 Will and Codicil. For the reasons that follow, I find that Mr. Corbin did not act for Gertrude, but rather for James, and I find that the basis for the Investment Account Transfer Plan was not tax planning, as contended by James, but rather the transfer of Gertrude’s wealth to a joint account with James.
(a) Mr. Barry Corbin
[159] James testified that he retained Mr. Corbin as agent for his mother, and at her request. Mr. Corbin testified that even though the Corbin Memorandum is addressed to James and even though its advice is directed to James, that his client was Gertrude. He claimed that James caused him to be retained on Gertrude’s behalf pursuant to a Power of Attorney for Property that Mr. Corbin never saw, did not have in his file, and that was not tendered into evidence at trial.
[160] I do not accept Mr. Corbin’s evidence that he was retained by or on behalf of Gertrude for a number of reasons. First, he had no basis on which to conclude that James was authorized to retain him on behalf of Gertrude. Second, he did not take steps to confirm this retainer with Gertrude, even though she was available throughout. Third, Mr. Corbin did not provide advice to Gertrude, either in person or by telephone. He did not explain the Investment Account Transfer Plan to Gertrude even though it had a profound impact on her, but rather directed all his advice to James. There was no evidence to establish that Gertrude was even aware of Mr. Corbin’s retainer. Fourth, Mr. Corbin billed James $27,260.38 for 54 hours of legal services from August 2013 to July 2014 but did not have any discussion or any contact of any nature with Gertrude until August 1, 2014: and then only to witness her execution of a single-sentence document.
[161] Fifth, James’ own conduct established that Mr. Corbin acted for him. On August 19, 2014, a document entitled “Acknowledgement and Agreement of Gertrude Rellinger: Waiver of Potential Conflicts” (the “2014 Conflict of Interest Waiver”), prepared either by Mr. Corbin or Mr. Flak, was presented to Gertrude for execution. This document contained two elements: an acknowledgement that Mr. Flak and Mr. Corbin acted as counsel for James, directly, and in James’ capacity as agent for Gertrude, and waived any right to complain about any potential or actual conflict arising from this dual retainer; second, that Gertrude was said to have paid for the “great majority” of Mr. Flak’s and Mr. Corbin’s legal fees, and that she wishes “for the same arrangement to continue after my death.”
[162] Sixth, in her 2014 Power of Attorney for Property which was executed by Gertrude on February 7, 2014, Gertrude appointed Mr. Corbin as her substitute attorney for property, describing him as James’ solicitor: “In the unlikely evet that my son, James Rellinger, is unable to act for me, I appoint my son’s solicitor, Barry Corbin, to be my attorney for the management of property…”
[163] On all the evidence, I do not accept that Mr. Corbin’s retainer was with or on behalf of Gertrude. I find that Mr. Corbin was retained by James to provide advice to James in relation to the transfer of the TD Investment Account, precisely as stated by Mr. Corbin in the first paragraph of the Corbin Memorandum.
(b) The Basis for the Investment Account Transfer Plan
[164] I do not accept James’ testimony that the Investment Account Transfer Plan was created for “tax planning” purposes at Gertrude’s direction. There was no evidence that Gertrude was even aware, in August 2013, that Mr. Corbin, or any expert, had been retained to provide tax advice.
[165] On my assessment of all the evidence, I do not accept that Gertrude directed James, in July or August 2013, to retain a tax or estate law expert to re-organize her holdings to achieve a tax advantage and, in the process, transfer her wealth to a joint account with James. The only source of evidence that Gertrude asked, in the period from May 2013 to August 2013, for tax planning advice was James’ testimony, which was not corroborated by any other witness or any other evidence.
[166] There are a number of reasons why I do not find credible and thereby reject James’ evidence that Gertrude requested tax planning advice, and therefore the implementation of the Investment Account Transfer Plan. First, there was no evidence that Gertrude asked Messrs. McCarter or Weir for tax planning advice at the time that they assisted her with the May 2013 Will, or when they met with her again on August 9, 2013. Gertrude called Mr. McCarter freely on issues of concern and consulted with him liberally over the many years. There was no evidence that she was, at any time, concerned about receiving tax planning advice. Second, there was no evidence that Gertrude asked Mr. Ewald about estate tax planning, even though he assisted her with the TD Investment Account, held by the Alter Ego Trust, for six years leading to 2013. Third, in all the Progress Notes admitted through Dr. Kennel’s evidence, there is no evidence of Gertrude expressing a concern to receive tax planning advice, even though Gertrude raised a multitude of other concerns, requests, and demands. Fourth, in Gertrude’s handwritten notes, which are uniformly thoughtful, thorough and comprehensive, there is no mention that she sought tax planning advice at any time from anyone.
[167] Fifth, the evidence established, and I accept, that Gertrude was in frail health in August 2013, expecting a move from Waterloo to Toronto, whereupon she was admitted to St. Joseph’s Hospital on September 9, 2013. Photographs showed that Gertrude had scars, blemishes and unhealed wounds on her arms and legs at this time. I find it implausible that in these circumstances, Gertrude came up with a late-life objective to implement creative estate tax planning and did so only after James learned of the unequal gifting through the May 2013 Will. Sixth, the Corbin Memorandum, in explaining Mr. Corbin’s mandate, did not record a request for estate tax planning but rather an explanation of the ramifications, from an income tax standpoint, of Gertrude’s wealth being transferred to a joint account with James. The Corbin Memorandum recited that James was the only source for Mr. Corbin’s understanding that Gertrude wanted to transfer her Investment Account to a joint account with James.
[168] But perhaps the most significant evidence that Mr. Corbin’s advice did not give rise to the concept of transferring the TD Investment Account from Gertrude to a joint account with James but rather followed it is the timing of James’ application for a joint investment account. James obtained the TD Bank Application to open a joint investment account with Gertrude before he obtained the Corbin Memorandum. This established that the impetus to transfer the TD Investment Account to a joint account did not result from tax advice, but rather the tax advice was sought, further to the objective already stated by James, to transfer the account holdings to a joint account.
[169] On these findings, I conclude that Gertrude did not direct James to obtain estate planning tax advice in August 2013. I find that the Investment Account Transfer Plan was not authorized by Gertrude in August 2013, but rather was presented to her by James through the August 2013 Investment Distribution Agreement.
[170] The effect of the Investment Account Transfer Plan was to transfer Gertrude’s Investment Account from the Alter Ego Trust, where its distribution on Gertrude’s death would be directed by Gertrude through her Will, to James’ control to be distributed on Gertrude’s death at his discretion. The initial instrument for giving effect to this, the August 2013 Investment Distribution Agreement, embodied three estate distribution elements that Gertrude did not implement in her May 2013 Will, mere months earlier, with the benefit of consultation and advice from Mr. McCarter and Mr. Weir, but rather were prepared by James’ lawyer and presented by James to Gertrude, as follows:
(a) The Vanishing Inheritance Concept: The August 2013 Investment Distribution Agreement is the first introduction of the concept that Joan’s inheritance will reduce to zero if she contests either the May 2013 Will or the further testamentary dispositions that have not yet been implemented by Gertrude. I saw no evidence that Gertrude had ever previously considered disinheriting one of her children entirely;
(b) The Asset Transfer Concept: Before the August 2013 Investment Distribution Agreement, there was no evidence that Gertrude had ever considered transferring her TD Investment Account out of the Alter Ego Trust. Gertrude had established the Alter Ego Trust in 2005 and had retained it as a component of her estate planning through three amendments of her Will.
(c) The Loss of Control in Wealth Distribution. Gertrude had retained control of her estate throughout her lifetime, directing through her Will the transfer of her wealth to her children on her death. The Investment Account Transfer Plan changed this by giving James’ control over Gertrude’s assets on her passing and gave James control and discretion over whether to distribute a portion of Gertrude’s assets to Joan, and the timing of doing so. Central to this was James’ ownership of the right of survivorship of the joint Investment Account.
[171] I do not accept that Gertrude requested these concepts. I do not see any evidence, apart from James’ testimony, to support James’ submission that Gertrude sought to make such a significant shift so soon after her May 2013 Will all in the name of estate tax planning. I do not accept that in August 2013 Gertrude understood the meaning of a right of survivorship or the distinction between James holding her funds in trust for her estate as opposed to having an entitlement to own them outright.
[172] I have determined, on all the evidence, that the retainer of Mr. Corbin, the formulation of the Investment Account Transfer Plan, and the August 2013 Investment Distribution Agreement and the three novel concepts embodied in it, were all steps taken by James, directly or through his lawyers, and then presented to Gertrude in August 2013, but not directed by Gertrude.
E. September 3, 2013 – Gertrude’s Move to Toronto
[173] On August 23, 2013, three days after signing the August 2013 Investment Distribution Agreement, Gertrude told Dr. Kennel that James was taking her to live with him. On September 3, 2013, James assisted Gertrude in checking out of Columbia Forest and moving to Toronto.
[174] Neither James nor Gertrude notified Joan that her mother was leaving the Waterloo community in which she had resided for 91 years. On September 3, 2013, James sent an email to Joan that stated simply that Gertrude was “very unhappy about being at Columbia Forest” and that James had “made arrangements” so that she would be staying with him “for the next while”. By that time, Gertrude had moved out of Columbia Forest.
[175] James testified that he re-located Gertrude to his home because he was deeply concerned about her medical condition and wanted to help her heal from the chronic lack of care that she had endured at Columbia Forest. However, within two days of her arrival at James’ home, on September 5, 2013, James, with the assistance of Mr. Corbin, arranged for Ms. Virginia Shanker, an account advisor with the Bank of Montreal, to meet with Gertrude and James, to present application materials for the opening of a joint investment account at the BMO.
[176] That day, James and Gertrude executed a BMO Joint Account Agreement, witnessed by Ms. Shanker (the “September 5 BMO Account Opening Document”). James admitted in cross-examination that he did not provide Ms. Shanker with either Ms. Woynarski’s capacity assessment or the TD Bank legal opinion stating that TD Wealth cautioned against a transfer of the Investment Account until Gertrude’s capacity was first assessed.
[177] Four days later, on September 9, 2013, Gertrude was admitted to St. Joseph’s Hospital for examination by a geriatric service staff member. Gertrude was discharged to home care, with direction to have intermittent catherization to address her neurogenic bladder, and physiotherapy. On Gertrude’s return from St. Joseph’s Hospital, while still in the transition from her move from Waterloo without yet having settled into a retirement home or care facility, James arranged for Gertrude to meet with Ms. Agnew.
F. Ella Mary Agnew
[178] Ms. Ella Mary Agnew was called to the Bar of Ontario in 1975 and has practised in estate planning and administration. She testified that she was contacted by James’ lawyer, Mr. Flak, to act for Gertrude and, in early September 2013, attended a briefing session with Mr. Flak.
[179] Ms. Agnew had little recollection about her initial briefing meeting with James’ lawyer. Ms. Agnew conceded that she had little, if any, memory of any events independent of her strict reliance on her notes, which were handwritten contemporaneously but edited and transcribed subsequently. I found that I could only rely on Ms. Agnew’s evidence to the extent that she read from her notes, as she demonstrated little independent recollection.
[180] Mr. Flak’s office arranged for Ms. Agnew to meet with Gertrude and provided her with documents, but Ms. Agnew could not recall which documents. Ms. Agnew had no memory of having received a copy of the Corbin Memorandum by the time of her first meeting with Gertrude. Ms. Agnew understood that her role was to assist Gertrude in estate planning, at a meeting to be scheduled by James’ lawyer, with documents prepared by James’ lawyers.
[181] James was present at Ms. Agnew’s initial meeting with Gertrude, which took place on September 16, 2013. Ms. Agnew observed that Gertrude was attentive but had “horrible black and red marks on her legs” and was “very deaf”. Ms. Agnew recorded background of Gertrude’s family and completed a family origin worksheet. Ms. Agnew did not discuss with Gertrude the Investment Account Transfer Plan, even though by then Gertrude had executed the August 2013 Investment Distribution Agreement and the September 5 BMO Joint Account Opening Document.
G. Living Life on the Avenue
[182] On September 18, 2013, Gertrude moved into Living Life on the Avenue Seniors Retirement Residence in Toronto (“Living Life”). James had sourced this retirement home and testified that Gertrude agreed with its selection. The admission form contained a direction, emphasized in disproportionately large capital letters, that no information about Gertrude was to be provided to Joan: “Do not give any care information to daughter Joan – Redirect to son Jim”.
[183] A similar direction was inscribed in the Resident/Guest Profile completed that day, specifically stating that no information was to be shared with Joan except as directed by James: “Daughter Joan Slover…Do not share info – she must speak with her brother.”
[184] At trial, James testified that Gertrude provided these instructions directly to the staff at Living Life. James was cross-examined on inconsistency in his testimony, as his sworn evidence at examination for discovery was that he provided these instructions to the staff at Living Life on his mother’s direction. I accept James’ discovery evidence that he provided these directions to the staff at Living Life, but do not accept that he did so at the direction of his mother, for reasons that I will later explain.
[185] On September 19, 2013, the day after moving into her new residence, Gertrude was admitted to St. Joseph’s Hospital, where she would remain for 8 days, with a urinary tract infection. In a series of emails, James notified Joan of Gertrude’s new home address at Living Life, and her hospitalization. James asked Joan to deliver any jewelry or belongings that she had, and to account for any money received from the insurance claim that she filed for Gertrude’s lost ring.
[186] Throughout these email exchanges, James did not advise Joan of any of the steps that had been taken to affect the distribution of Gertrude’s wealth on her death. He did not tell her about the May 2013 Will, or the Investment Account Transfer Plan, or that he had opened a BMO investment account jointly with Gertrude, or that he had arranged, he says on Gertrude’s direction, for the retainer of a new lawyer (Ms. Agnew), new banker (Ms. Shanker), and new estate planner (Mr. Corbin) all of whom had been selected on the recommendation of his lawyer. He did not disclose to Joan the August 2013 Investment Distribution Agreement.
H. Estate Planning Documents Executed by Gertrude in October 2013
[187] On October 2, 2013, five days after Gertrude’s discharge from her 8-day stay in hospital, Ms. Agnew met with Gertrude, along with Dr. Yiu, to explain the following four documents:
(i) An Agreement Pertaining to the Sale of the Right of Survivorship (the “2013 Sale of Right of Survivorship”);
(ii) Declaration of Gertrude Rellinger, and Agreement of James Rellinger, concerning the disposition of money and investments acquired on Gertrude Rellinger’s death by James Rellinger as a result of the transfer of the right of survivorship to him (the “2013 Fund Disposition Agreement”);
(iii) Declaration of, and Agreement between Gertrude Rellinger and James Rellinger (the “2013 Use of Funds Agreement”);
(iv) Declaration of Gertrude Rellinger concerning joint accounts (the “2013 Joint Account Agreement”).
[188] Ms. Agnew was given these documents by Mr. Corbin and assumed that he drafted them but did not know for certain. As a familiar refrain that reverberated throughout her testimony, she stated that she had no role in the drafting of the documents that were given to her by James’ lawyers to review with Gertrude but that they could have been prepared by “Mr Corbin or Mr. Flak”.
[189] Ms. Agnew did not investigate the origin or purpose of the documents. She did not know whether Mr. Corbin was retained by James directly or on behalf of Gertrude, and she did not inquire into this. She had no knowledge of Gertrude having asked for any such documents to be prepared on her behalf. She simply took to Gertrude and presented the documents provided to her by James’ lawyers.
[190] Ms. Agnew testified that she read these documents in advance and discussed them with Mr. Corbin by telephone and understood that these documents were in relation to the Investment Account Transfer Plan authored by Mr. Corbin. She was uncertain whether she had by that time even seen the Corbin Memorandum by which the Investment Account Transfer Plan was conceived. I found that, in her testimony, Ms. Agnew had some difficulty explaining her understanding of the Investment Account Transfer Plan and was particularly uncertain of whether James would hold the joint Investment Account in trust for Gertrude’s estate.
[191] Ms. Agnew met Dr. Yiu in the lobby of the Living Life and only then proceeded to the meeting with Gertrude. This too became a regular pattern in Ms. Agnew’s provision of advice to Gertrude. Ms. Agnew would first coordinate with the capacity assessor before advising her client.
[192] Ms. Agnew recalled that Dr. Yiu had a solid understanding of the Investment Account Transfer Plan, in fact, by Ms. Agnew’s admission, better than hers. It did not occur to Ms. Agnew as noteworthy that the capacity assessor had been briefed about the Investment Account Transfer Plan in advance of a meeting with her client. Ms. Agnew admitted that she let Dr. Yiu take the lead in explaining this plan to Gertrude, stating that Dr. Yiu “understood it well”, seeing no issue in delegating to the capacity assessor the explanation to her elderly client of the complexities of the Investment Account Transfer Plan.
[193] The four documents that Mr. Corbin and/or Mr. Flak had authored, and Mr. Corbin had explained to Ms. Agnew, and Ms. Agnew then explained to Gertrude with the assistance of the capacity assessor, contained the following components:
(i) The 2013 Sale of Right of Survivorship repeating the Asset Transfer Concept contained in the August 2013 Investment Distribution Agreement: namely, Gertrude would transfer the funds from the TD Investment Account held by the Alter Ego Trust to BMO, and then into a joint account with James. In consideration of James’ payment to Gertrude of $5,000, Gertrude would agree to transfer to James the right of survivorship in the BMO Investment Account. Section 2 of this agreement stated that Gertrude “considers this agreement to constitute only a technical sale and considers its overall effect to be to implement a gift of a right of survivorship.”
(ii) The 2013 Fund Disposition Agreement reiterated in paragraph 1, the Asset Transfer Concept and reiterated, in paragraphs 2 and 3, the Vanishing Inheritance Concept, both first contained in the August 2013 Investment Distribution Agreement. This agreement also provided James with control over distribution of Gertrude’s wealth, stating that the decision whether to convey 25% of Gertrude’s wealth to Joan on Gertrude’s death is entirely in James’ “absolute discretion”.
(iii) The 2013 Use of Funds Agreement reiterated the Vanishing Inheritance Concept, and stated that in anticipation of implementing the Asset Transfer Concept, and in anticipation of conveying to James the right of survivorship to any such account, James was authorized to use money in the Investment Account to pay “lawyers, accountants and their or his agents” to ensure implementation of these agreements.
(iv) The 2013 Joint Account Agreement reiterated the Asset Transfer Concept. It stated that Gertrude had gifted to James the sum of $5,000 (sections 4 and 7) that James would use to purchase from her the right of survivorship of a not-yet-established investment account (section 5). This document stated that James would not exercise any rights or entitlements to the investment account until after Gertrude’s death (sections 7 and 8). Gertrude gifted to James 90 shares of Canadian Utilities stock (section 11). In section 9, the document reiterated the concept contained in section 2 of the Sale of Right of Survivorship that the sale was “only technical”: “While James used the same $5,000 which I gifted to him to purchase a right of survivorship, I consider and intend the “purchase and sale” aspect of the transaction to be only technical [emphasis added].”
[194] Ms. Agnew testified that after explaining these four documents to Gertrude, she then left the documents with her for her ongoing review, to continue October 4, 2013.
[195] In the meantime, the Living Life chart of October 3, 2013, directed that Joan’s contact with her mother was to be filtered through James: “If daughter Joan calls, we can say she is doing well, but not comment on the care provided. These questions must be directed to Jim.” James admitted that he provided this direction to the staff at Living Life but emphasized that he did so on his mother’s direction. This became a familiar refrain, that James’ ongoing increasing restriction of Joan’s access to their mother was justified as James carrying out his mother’s intentions.
[196] On October 4, 2013, Ms. Agnew and Dr. Yiu conferred in advance on their approach to the meeting with Gertrude, and then met with her, focusing principally on Gertrude’s reasoning for treating James and Joan unequally through her Will. Ms. Agnew testified that Gertrude vented that Joan was an uncaring, unkind, inattentive daughter, more concerned about Gertrude’s money than Gertrude’s well-being, while James would return to Waterloo “as often has he could”. Ms. Agnew recorded Gertrude’s statement that, when 15 years old, Joan referred to her in a hateful and derogatory manner and continued to berate her during her time at Columbia Forest.
[197] Ms. Agnew concluded that Gertrude was an alert and capable person who fully understood her holdings, had a clear understanding of how she wanted to pass her assets to her children, and understood that there would be a dispute between them resulting from the unequal distribution.
[198] Ms. Agnew and Dr. Yiu re-attended on October 5, 2013, at which time Gertrude executed the four documents initially detailed earlier. In addition, Gertrude executed that day two documents supplementing the authority provided to James on August 9, 2013 to attend to her personal care: a Power of Attorney for Personal Care Made in Accordance with the Substituted Decisions Act, 1992 (the “October 2013 Power of Attorney for Personal Care”), and; an Appointment of Agent for Personal Care (the “October 2013 Personal Care Appointment”).
I. Ms. Agnew’s Role as Gertrude’s Lawyer
[199] Ms. Agnew testified that her procedure in relation to each of the six documents would have been to go through the documents with Gertrude, review the purpose of the documents and how they fit into the Investment Account Transfer Plan. However, I do not accept that Ms. Agnew recalled having done so, but rather spoke of her expected, routine practice. Ms. Agnew’s notes, the lifeline to her testimony, do not contain any detail of her explanation to Gertrude of the meaning or technical operation or effect of the four documents initially provided on October 2, 2013. Dr. Yiu testified that Gertrude was advised by Ms. Agnew that she continued to have control over the distribution of her investment funds on her passing. This was not accurate. James would control the distribution of Gertrude’s wealth to Joan, in his “absolute discretion”.
[200] I accept that Ms. Agnew confirmed with Gertrude her intention that James would receive more of her wealth and Joan would receive less, consistent with the May 2013 Will. However, I find troubling that Ms. Agnew did not obtain instructions from Gertrude concerning her testamentary intentions and then set upon creating a document to implement her purported wishes. Rather, Ms. Agnew acted on the presumption, through briefing by James’ lawyers, that Gertrude had already agreed to the Investment Account Transfer Plan, the Asset Transfer Concept, the Vanishing Inheritance Concept, and the Loss of Control in Estate Distribution prior to her retainer. I am not satisfied that Ms. Agnew explained to Gertrude the impact of the concepts contained in the documents affecting Gertrude’s estate planning, apart from assessing whether Gertrude agreed with what was being proposed by James’ lawyers. I will explain why.
[201] Ms. Agnew was not able to explain at trial the inconsistencies in the four Estate Planning Documents and so I find that she was not able to explain them to Gertrude. She had no explanation of the meaning that the Sale of Right of Survivorship was only a “technical sale”. There was confusion in her evidence on James’ ability to use the funds during Gertrude’s life. Most importantly, she conceded, with some overt expression of surprise, that these documents gave James a discretion of whether to transfer any amount of Gertrude’s wealth to Joan on Gertrude’s death after emphasizing that Gertrude intended, throughout, to remain in control of her investment account and of the distribution of her wealth on her death. Ms. Agnew justified this by stating that Gertrude was certain that James would carry out her wishes even though he was empowered with discretion of whether to do so.
[202] I am bolstered in this finding by how Ms. Agnew handled these Estate Planning Documents after their execution by Gertrude. Ms. Agnew did not retain them for the purpose of attending to Gertrude’s wishes, but rather delivered the executed documents to James’ lawyer, Mr. Flak.
[203] Ms. Agnew next met with Gertrude on October 11, 2013, together with Dr. Yiu and Mr. Manning, who was then first introduced to Gertrude. Ms. Agnew testified that she presented Gertrude with a letter that Ms. Agnew had prepared at the direction of James’ lawyer, Mr. Flak. The letter was directed to Mr. Ewald, for the purpose of notifying him that Gertrude “did not wish to speak with Mr. Ewald further and that any further communications by Mr. Ewald must be to her counsel, Ms. Agnew”. This severed Gertrude’s long-standing relationship with Mr. Ewald.
[204] The next day, on October 12, 2013, Gertrude was admitted to Sunnybrook Hospital, where she would remain hospitalized for six days with a bleeding duodenal ulcer. The admission report stated that Gertrude experienced “a 2-minute unresponsiveness and feeling weak and fatigued while being transferred from the bed”. Gertrude was transfused, examined, and stabilized in Sunnybrook’s Short Stay Unit.
J. Opening the BMO Joint Account
[205] On October 18, 2013, the day that Gertrude was discharged from hospital, Gertrude met with Ms. Virginia Shanker, the account manager with BMO. This meeting was not arranged by Gertrude’s lawyer, Ms. Agnew. According to Mr. Corbin, this meeting was scheduled by James’ lawyers. Specifically, Mr. Corbin testified that Mr. Flak asked him to set up a “privilege umbrella” to protect the confidentiality of documents provided to BMO. Mr. Corbin stated that he agreed to direct Ms. Shanker on Gertrude’s behalf although, again, he had no mandate from her to do so.
[206] On the same day, Mr. Corbin provided Ms. Shanker with documents to provide BMO with the “necessary assurances as to Gertrude’s intentions in creating the joint accounts, as to the manner in which the tax issues have been addressed, and as to the reason for James’ request to create an account to hold 30 common shares of BMO”. Mr. Corbin asked Ms. Shanker whether “this smooths the way to complete the steps that BMO Nesbitt Burns had been instructed to implement”. I find that these instructions to BMO originated from James and his lawyers.
[207] Mr. Corbin stated that Ms. Shanker reported to him on October 18, 2013 that she was satisfied from her discussions with Gertrude that the transfer of the assets in the Investment Account to a joint account with James was “her choice”. Ms. Shanker’s also wrote that she would convey to her principals at BMO the urgency of the transfer of the investment account as “Gertrude is at great risk due to internal bleeding which is unstable”. Amongst the documents supporting the opening of the BMO Investment Account is a Certificate of Foreign Status of Beneficial Owner for U.S. Tax Withholding. This document states that it was executed by Gertrude on September 25, 2013. On that day, Gertrude was a patient at St. Joseph’s Hospital.
[208] I do not accept Mr. Corbin’s characterization of Ms. Shanker’s assessment of Gertrude because it is hearsay and unreliable. James did not call Ms. Shanker to testify, even though she set-up the BMO investment account to which Gertrude’s assets would be transferred.
[209] Joan submitted that I should draw an adverse inference from James’ failure to call Ms. Shanker to testify, since it was clear that she had evidence that was material to Gertrude’s opening of the BMO Investment Account jointly with James, relying on the principles set out in Robb Estate v. Canadian Red Cross Society (2001), 2001 CanLII 24138 (ON CA), 152 O.A.C. 60 (C.A.), at para. 161-162; Kaytor v. Lion’s Driving Range Ltd. (1962), 1962 CanLII 346 (BC SC), 40 W.W.R. 173 (B.C. S.C.), at p. 176. I decline to do so for two reasons. First, an adverse inference ought to be drawn against a party for failure to give material evidence only “when that party alone could bring the witness before the court”: Robb Estate, at para. 161, relying on Lambert v. Quinn (1994), 1994 CanLII 978 (ON CA), 110 D.L.R. (4th) 284 (Ont. C.A.), at pp. 287-288. Joan could have summoned Ms. Shanker. Each party had a burden of proof to which Ms. Shanker’s testimony was material: Joan, to prove undue influence in relation to Gertrude’s testamentary dispositions and, James to rebut the presumption of undue influence in relation to the gratuitous transfers by Gertrude to him. Second, an adverse inference is unnecessary, as there is no dispute in the evidence that the meeting between Ms. Shanker and Gertrude was coordinated and directed entirely by James’ lawyers, Mr. Corbin and Mr. Flak, and took place the day Gertrude was discharged from six days of hospitalization, at a time that Gertrude was frail and vulnerable.
[210] Two weeks later, on November 2, 2013, Gertrude was re-admitted to Sunnybrook Hospital, with pneumonia. She was stabilized, and discharged home on November 4, 2013 for 24-hour care.
K. The Legacy Letter
[211] On November 13, 2013, Ms. Agnew and Dr. Yiu met with Gertrude to present to her the draft of a letter that Ms. Agnew prepared. Ms. Agnew described the document as a “Legacy Letter”, by which Gertrude could communicate her intentions in distribution of her assets. The letter was not needed to convey this to James, who was intimately aware of all that had occurred. Its obvious focus was Joan, who at that time knew nothing.
[212] Gertrude did not request the preparation of this letter: it was Ms. Agnew’s idea. Ms. Agnew spoke with Dr. Yiu, about the letter and recorded Dr. Yiu’s comment that she “doubts that Gertrude will approve but agrees that it is worth a try”.
[213] Ms. Agnew testified that Gertrude did not reject the idea of sending the Legacy Letter, recording in her notes: “Gertrude not opposed to sending it in principle and general approach! Hurrah.” Ms. Agnew did not explain why lawyers were preparing documents for Gertrude to consider and execute without having received any instructions from her to do so. Ms. Agnew left the draft Legacy Letter with Gertrude, for her consideration, and set-out to work on a new Will.
L. 2014 Will and Estate Planning Documents Executed by Gertrude in January 2014
[214] On January 3, 2014, Ms. Agnew and Dr. Yiu met with Gertrude and brought with them five documents for Gertrude to consider, titled as follows:
(i) Declaration of Gertrude Rellinger, and Agreement of James Rellinger, concerning the gift of all indebtedness of James Rellinger and Joan Slover owed to Gertrude Rellinger (the “2014 Gift of Indebtedness Agreement”):
(ii) Deed of Gift from Gertrude Rellinger to James Rellinger (“2014 Deed of Gift”);
(iii) A further version of the Legacy Letter;
(iv) Will (the “2014 Will”);
(v) Deed revoking the Alter Ego Trust (the “2014 Alter Ego Trust Revocation Deed”).
[215] There was no evidence that these documents had been previewed with Gertrude in advance of the meeting of January 3, 2014, whether by telephone or by preparatory meeting, as had occurred with the documents executed by Gertrude on October 5, 2013. There was no evidence that Gertrude had requested that any of these documents be prepared.
[216] Ms. Agnew did not draft the 2014 Gift of Indebtedness Agreement or the 2014 Deed of Gift. She again surmised that they were authored by either Mr. Corbin or Mr. Flak, and provided by one of them for her to review with Gertrude. Ms. Agnew authored the 2014 Will and the 2014 Alter Ego Trust Revocation Deed.
[217] These five documents contained the following components:
(i) The 2014 Gift of Indebtedness Agreement stated that Gertrude gifted to James any indebtedness owed to her by either James or Joan. This agreement reiterated that the decision of whether to share 25% of Gertrude’s estate with Joan is James’ decision to be made at the time of Gertrude’s death (first contained in the August 2013 Investment Distribution Agreement and then in the 2013 Fund Disposition Agreement).
(ii) The 2014 Deed of Gift repeated that Gertrude gifted to James the debt owed to her, identical to the 2014 Gift of Indebtedness Agreement. Also, by this agreement, Gertrude gifted to James all her personal property and assets except for the BMO Investment Account.
(iii) The Legacy Letter contained the changes that Ms. Agnew stated were mandated by Gertrude to explain to her children her wealth distribution objectives.
(iv) The 2014 Will repeated the direction expressed by Gertrude in her May 2013 Will that on her death James was to receive 75% of her estate and Joan is to receive 25%. Unlike the May 2013 Will, the 2014 Will contained the Vanishing Inheritance Concept: should Joan contest the Will, she would receive nothing.
(v) The 2014 Alter Ego Trust Revocation Deed simply revoked the Alter Ego Trust.
[218] Ms. Agnew and Dr. Yiu testified that Gertrude understood the meaning and effect of these documents and had capacity to enter them. Gertrude executed these documents on January 3, 2014.
M. Internal Inconsistencies in the January 2014 Estate Planning Documents
[219] Ms. Agnew was cross-examined on the internal inconsistencies in the Estate Planning Documents that her client had executed between October 2013 and January 2014. There were three major inconsistencies that I find were not effectively explained in Ms. Agnew’s testimony.
[220] First, with the implementation of the Investment Account Transfer Plan through the various Estate Planning Documents, which purported to convey the BMO Investment Account to James on Gertrude’s death, and now with the gift to James of everything else that Gertrude owned, why did Gertrude need a new Will? What purpose would be served by the 2014 Will when nothing would pass through Gertrude’s estate? Ms. Agnew did not know. She recorded in her note of January 3, 2014 that: “We discussed the appointment of Barry Corbin who made the [Investment Account Transfer Plan] so really she won’t need the Will – it is more of a back-up situation”. Ms. Agnew stated that she did not know what this meant.
[221] Second, if a new Will is being implemented in January 2014, why was the Alter Ego Trust being revoked? This Alter Ego Trust was founded in 2005 to support Gertrude’s wealth distribution through her Will. The revocation of the Alter Ego Trust was consistent with the transfer of its only holding, the BMO Investment Account, but inconsistent with the execution of a new Will. Again, Ms. Agnew did not have an adequate explanation.
[222] Third, if Gertrude was prepared to trust James to convey 25% of her wealth to Joan on Gertrude’s passing in his “discretion”, as Ms. Agnew stated and as was now provided by three documents (the August 2013 Investment Distribution Agreement, the 2013 Fund Disposition Agreement, and the 2014 Gift of Indebtedness Agreement) why did she need to provide this direction to James, in his capacity as Estate Trustee, through the 2014 Will? Ms. Agnew did not have a sensible explanation.
[223] I do not accept that Ms. Agnew explained to Gertrude, or that Gertrude understood that the Estate Planning Documents presented to her had the effect of rendering her estate valueless, her Will meaningless, and entrusted to James complete control over whether Joan would receive any of Gertrude’s wealth on her passing. The Estate Planning Documents gave James “absolute discretion” over any inheritance to Joan, and gave James the power to use any of the funds in the BMO Investment Account during Gertrude’s lifetime, as necessary to pay legal and accounting expenses, “including reimbursing himself for expenses which become payable or were already paid, in his absolute discretion”: 2013 Fund Disposition Agreement, section 2; 2013 Use of Funds Agreement, at para. 1. This was a significant transfer of control by Gertrude to James in the use of her wealth during her lifetime and in the distribution of her wealth on her death.
[224] Both parties and all witnesses, including Ms. Agnew and Dr. Yiu, testified that Gertrude was always dominant and controlling in her financial affairs. They stated, as did James, that she jealously and proudly guarded this role. I accept this. I also accept that Gertrude would not have knowingly and of her own volition relinquished to James this control over her wealth and its distribution on her death.
N. The Disclosure to Joan
[225] The Legacy Letter was sent to Joan on January 3, 2014. Joan was at that time estranged from Gertrude, not having seen her since July 2013. Joan learned, for the first time, that her inheritance was reduced to 25%, and that she would receive nothing if she contested Gertrude’s documents: “Your 25% is strictly conditional on your now agreeing never to contest Jim’s future legal ownership of these investments or my Will or any other legal documents signed by me.”
[226] I find that the Legacy Letter contained statements that were inconsistent with the Estate Planning Documents executed by Gertrude to that time, showing that Gertrude could not have fully understood the interaction of the documents. For example, Gertrude stated in the Legacy Letter: “I also do not want any of my carefully accumulated wealth to be wasted on lawyer’s fees”. At that same time, according to James, Gertrude had directed the retainer of a team of lawyers and had authorized James, in the Use of Funds Agreement, to “use any funds which he wishes to access, in the joint accounts which I will open at BMO Nesbitt Burns, for the purpose of paying lawyers.”
[227] Gertrude wrote that she wanted Joan to enter into an agreement that would respect her wishes. The Legacy Letter did not explain that James held a joint ownership interest in the BMO Investment Account, with a purported Right of Survivorship, by which he was said to have an “absolute discretion” regarding whether to pay Joan 25% of the value of the Investment Account, and when. If valid, Joan’s inheritance would be in James’ hands: not Gertrude’s.
[228] In the weeks following the delivery of the Legacy Letter, James took two steps. First, he arranged for Ms. Agnew to meet with Gertrude on February 7, 2014 to execute a Continuing Power of Attorney for Property. Second, James’ lawyer forwarded to Joan a Confidentiality and Non-Disclosure Agreement (the “Confidentiality Agreement”). Ms. Agnew denied that she drafted this Agreement and again stated that it was prepared by one of James’ lawyers: Mr. Corbin or Mr. Flak.
[229] The Confidentiality Agreement represented that 7 documents were pertinent to Gertrude’s distribution of her assets and defined these documents as the “Confidential Information”. However, this was far from the totality of the documents that Gertrude had signed. The Confidentiality Agreement did not identify or disclose several documents that directly affected Gertrude’s distribution of her wealth, including the documents that resulted in inter vivos gifts to James. In paragraph 3 of the Confidentiality Agreement, in order to retain her 25% inheritance, Joan was required to agree not to challenge Gertrude’s distribution of her wealth, but without disclosure, knowledge, or access to all documents affecting Gertrude’s testamentary dispositions.
[230] Joan testified that she was upset that her mother had deviated from her life-long intention of treating her children equally. She was troubled that she was being asked to agree to the unequal distribution without disclosure of what had occurred. Joan intensified her attempts to reach her mother by telephone, without success. She decided to travel to Toronto to see her.
O. Joan’s Visit with Gertrude in March 2014 – The Restriction on Access
[231] On March 2, 2014, after having not seen Gertrude for 8 months, Joan travelled to Toronto together with her family and a friend to visit Gertrude. Joan testified that Gertrude received them happily, that the half hour visit was surprisingly pleasant with no animosity or tension. Joan asked if she could contact her more regularly going forward, and Gertrude accepted without hesitation. Joan recalled that she had follow-up calls with her mother on March 3, 2014 and March 5, 2013, that were also pleasant. When Joan attempted to call Gertrude on March 7, 2014, she could no longer reach her. Joan could not have known the steps that her visit with Gertrude had set in motion.
[232] Ms. Agnew testified that Mr. Flak convened a meeting on March 7, 2014, with Gertrude, James, Mr. Flak and Dr. Yiu. Ms. Agnew’s note of that meeting recorded the purpose: “Meeting at Jim’s house around dining table following ‘invasion’ by Joan”. Ms. Agnew characterized Joan’s one-half hour social visit as “arriving unannounced and stampeding over her [personal support worker] and rocking her routine and schedule.”
[233] Ms. Agnew stated, with no direct recollection but based on her notes, that Gertrude recounted that Joan had visited unannounced, that there was no argument, but rather the social visit was friendly. James testified, as did Ms. Agnew, that Gertrude was pleased with her interaction with Joan, was happy to see her, and delighted to see her granddaughter.
[234] Ms. Agnew recalled that Mr. Flak provided Gertrude with “more context”. He told her that Joan had still not executed the Confidentiality Agreement and “was stalling”. At this point, Ms. Agnew heard Gertrude say that she did not trust Joan. Ms. Agnew recorded that Gertrude then agreed with the suggestion made to her that Joan should not get her “confidential information”.
[235] Following this meeting, steps were taken to restrict Joan’s access to Gertrude. On March 10, 2014, Ms. Agnew wrote to Joan demanding that Joan not visit Gertrude without first arranging with James. James provided the Living Life staff with a memorandum stating that if anyone visited Gertrude without “permission” from him, the staff must “politely tell them they must leave immediately”. James directed that if any visitor, including Joan, would not leave, the staff must call the Toronto Police and report that there is an “unwanted intruder” in Gertrude’s room.
[236] There were several other records generated in the period from March 8 to 10, 2014, that contain James’ direction that Joan and her family be denied access to Gertrude without James’ prior approval. They all have the same common features: the direction to restrict access was credited to James; the restriction on access to Gertrude was specific to Joan and her family; the gateway to Gertrude was exclusively through James, whose permission was required for anyone to see Gertrude or to receive information concerning her care. These restrictions were for in person visits as well as screening of telephone calls. Last, if anyone did not respect these restrictions and entered Gertrude’s room, the Toronto Police were to be summoned.
[237] James testified that he undertook each of these steps at his mother’s specific request. I do not find this evidence to be credible or plausible. There is no corroborative testimony by others to support James’ testimony. In all the copious and detailed notes and records authored by the Living Life staff and produced in this trial, there was not a single recording that Gertrude asked that Joan and her family be excluded. No other witness testified that Gertrude asked that Joan and her family be barred from visiting. Further, each direction restricting access, regardless of whether the direction is from the staff, the security personnel, or the personal support workers, attributed the direction to James and none to Gertrude. Last, I accept Joan’s evidence that her discussions with her mother in March 2014, including a telephone call of March 24, 2014 that Joan recalled lasting almost an hour, were pleasant and non-confrontational, such that there would be no reason to restrict her from access to Gertrude.
[238] On April 18, 2014, James denied Joan’s request for a visit with Gertrude over the Easter weekend, writing that Gertrude “feels that it would be inappropriate to have a visit at this time”. Joan stated that she spoke with her mother on May 14, 2014, on Gertrude’s 92nd birthday. Joan admitted that she inquired why Gertrude had changed her Will, and Gertrude responded that Joan’s refusal to sign the Confidentiality Agreement caused a problem. Joan recalled that Gertrude stated that she missed her granddaughter and wanted to see her.
[239] This would be the last time that Joan would speak with Gertrude.
P. Joan’s 2014 Application
[240] On June 24, 2014, Joan initiated an Application against Gertrude and James, and the Public Guardian and Trustee, for a wide spectrum of relief (the “2014 Application”). Joan sought production of powers of attorney executed by Gertrude for her care, medical records, accounting of James’ handling of Gertrude’s expenses as her attorney, a passing of accounts and, most particularly, Joan sought an Order compelling Gertrude to undergo a capacity assessment by the psychiatrist of Joan’s choosing, Dr. Kenneth Shulman. I will have more to say about this later.
Q. Estate Planning Documents Executed by Gertrude in August 2014
[241] On July 15, 2014, Gertrude was admitted to St. Joseph’s Hospital with acute renal failure. She was found to weigh less than 40 kg. and was diagnosed with a lengthy list of serious conditions. Gertrude refused several recommended treatments. The medical caregivers concluded that the primary goal was comfort, maintaining Gertrude’s life as long as possible. Gertrude was prescribed a fentanyl patch, and discharged on August 1, 2014, to 24-hour home care.
[242] On the same day that Gertrude was discharged from hospital, James arranged for Mr. Corbin and Dr. Yiu to meet with Gertrude. This meeting of August 1, 2014 was Mr. Corbin’s first and only meeting or discussion with Gertrude, notwithstanding his evidence that she was his client. Mr. Corbin brought with him a document that he had prepared entitled, “Declaration of Intention”, which contained a single sentence (the “2014 Intention Declaration”): “Because my daughter, Joan Slover, has commenced a legal proceeding against me and my son, James Rellinger, I do not wish her to receive any of my property after my death, either from me or my son”.
[243] Mr. Corbin did not state who directed him to prepare this Declaration, but there is no evidence that Gertrude did so. James admitted that he arranged the meeting and I find, consistent with this, that James’ lawyer prepared this document. Mr. Corbin testified that he explained this single-sentenced document to Gertrude, and that she understood its content.
[244] James testified that he arranged three more meetings by his mother with Ms. Agnew and Dr. Yiu in the weeks after her discharge from hospital. James swore, without any corroborating evidence, that on each such instance, Gertrude asked to see a lawyer and James obliged by scheduling meetings. I do not accept that in her frail state, just discharged from hospital and on fentanyl, and having executed numerous Estate Planning Documents, Gertrude asked for more.
[245] On August 19, 2014, Ms. Agnew and Dr. Yiu met with Gertrude with a document entitled, “My Wish”. Ms. Agnew stated that she did not prepare this document and did not know who did. I conclude that, consistent with the manner of preparation of the 2014 Intention Declaration, it was drafted by one of James’ lawyers, at James’ direction. The document contains one sentence (the “2014 Wish Declaration”): “I do not want Joan Slover to receive any money from me or from James Rellinger because she refused to support my wishes and financial planning and is suing James Rellinger and me.”
[246] Ms. Agnew did not explain why Gertrude was presented with two documents to express her testamentary wishes when the Estate Planning Documents that she had already executed purported to give James “absolute discretion” over whether to transfer any of her wealth to Joan.
[247] Ms. Agnew presented a second document to Gertrude on August 19, 2014, the 2014 Conflict Waiver. By this document, Gertrude would waive any claim against James’ lawyers, Mr. Flak and Mr. Corbin. Ms. Agnew did not prepare this document and did not have any instructions from Gertrude to do so. She surmised, I find correctly, that it was drafted by James’ lawyers.
[248] Ms. Agnew prepared a Codicil to Gertrude’s 2014 Will and presented it to Gertrude on August 22, 2014. The 2014 Will Codicil stated that it was Gertrude’s “express wish that none of my assets whatsoever are to pass on my death, directly or indirectly, to my daughter, Joan Slover, or to a trust for her daughter”. Ms. Agnew and Dr. Yiu testified that Gertrude wanted the 2014 Will Codicil because Joan had started the Application against her.
[249] The evidence of Ms. Agnew and Dr. Yiu was that Gertrude thought that the 2014 Will and the 2014 Will Codicil had some meaningful effect. But if the Estate Planning Documents were effective, the 2014 Will and its Codicil would not have any effect because there would be nothing in Gertrude’s estate to pass through her Will. This confusion is evident in the third paragraph of the 2014 Will Codicil, which shows Gertrude’s understanding that James was holding her assets in trust for her or her estate:
Because Joan has disregarded my wishes, and, instead, Joan has started proceedings in the courts against me, I am changing my Will and confirming my previous instructions to my son, James Rellinger, about all the assets he holds for me in trust. [Emphasis added]
[250] If the 2013 Sale of Right of Survivorship is effective, if the 2013 Fund Disposition Agreement is valid, then James was not holding the BMO Investment Account in trust for Gertrude’s estate. This was a foundational principle of the Investment Account Transfer Plan. Ms. Agnew did not provide an explanation regarding the inconsistency between the 2014 Will Codicil and the Estate Planning Documents. Gertrude thought, on August 22, 2014, that James held her assets “in trust”, to be distributed on her death through her 2014 Will.
[251] Ms. Agnew and Dr. Yiu met again with Gertrude on September 12, 2014, this time to present a document entitled, “Sworn Declaration of Gertrude Rellinger” (the “2014 Ratification Declaration”). Again, there was no evidence that Gertrude requested this document, and Ms. Agnew had no evidence as to who prepared it. James stated that he arranged this meeting at Gertrude’s request, but did not say the purpose for the meeting. There was no evidence that the document was provided to Gertrude before the meeting for advance review. I find, in all the circumstances, that the 2014 Ratification Document was prepared by either Mr. Flak or Mr. Corbin and provided to Ms. Agnew for presentation to Gertrude.
[252] Ms. Agnew recalled that this document was intended to be a re-affirmation by Gertrude of all of the Post-August 2013 Documents that she had already executed: “I also ratify all other documents signed in 2013 and 2014 which provide benefits to James, and none to my daughter, Joan Slover.” Ms. Agnew did not explain the list of documents to which this omnibus declaration pertained, and without this, I do not see how anyone could have understood its meaning.
[253] Even more importantly, paragraph 5 of the 2014 Ratification Agreement contained a clause that was inconsistent with the just-executed 2014 Will Codicil: “My wish is now for James to unconditionally own all my assets at the time of my death”. This clause was opposite to the 2014 Will Codicil wherein Gertrude stated, and in my view intended, that James would hold her assets in trust for her and her estate.
R. The Settlement of Joan’s 2014 Application
[254] On October 2, 2014, the parties settled the 2014 Application. Joan agreed to abandon the 2014 Application on the agreement that Dr. Yiu complete her capacity assessment with consideration of Joan’s evidence and the evidence of others, and to share the report with Joan upon completion. In furtherance of this settlement, Joan met with Dr. Yiu on two occasions, for more than 12 hours, providing documents that she considered material to Dr. Yiu’s assessment.
[255] On November 3, 2015, Dr. Yiu delivered a 51-page report entitled, “Assessment of Financial and Testamentary Capacities of Gertrude Rellinger”. Dr. Yiu delivered her report to James’ lawyer who, provided a copy to Joan’s lawyer, in accordance with the term of settlement of the 2014 Application. Dr. Yiu’s assessment concluded that Gertrude had testamentary capacity throughout. I will have more to say later about Dr. Yiu’s assessment.
S. Gertrude’s Death
[256] On March 15, 2016, James wrote to Joan that Gertrude, then 94 years old, was unwell and frail. James informed Joan that Gertrude’s wish was that Joan not attend her funeral. Proposals and counter-proposals were sent in negotiation of Gertrude’s funeral arrangements, without agreement.
[257] Gertrude died on April 22, 2016. James notified Joan the next day. Joan’s request for details of their mother’s funeral arrangements went unanswered. Joan and her family were deprived of an opportunity to attend Gertrude’s funeral. James swore that this was his mother’s wish.
[258] After Gertrude’s death, Joan received, for the first time, the myriad estate planning documents that had been generated in the time from August 2013 to September 2014. On May 2, 2016, ten days after Gertrude’s death, James sued Joan. She responded with an Application of her own one month later. Joan contended that on the date of her death, the BMO Investment Account held Gertrude’s assets valued at $21,520,600.
IX. CREDIBILITY DETERMINATIONS
[259] I evaluated the credibility and reliability of all witnesses and have explained already my determination of the credibility of certain witnesses. I will explain my credibility assessment of the evidence provided by Joan and James, which has a significant role in my analysis of Gertrude’s testamentary capacity and of the issue of undue influence.
[260] In assessing credibility, I am guided by the statement of McLachlin J. in R. v. Marquard, 1993 CanLII 37 (SCC), [1993] 4 S.C.R. 223, at p. 248, as applied in R. v. R. (D.), 1996 CanLII 207 (SCC), [1996] 2 S.C.R. 291, at para. 93, that: “Credibility must always be the product of the judge or jury’s view of the diverse ingredients it has perceived at trial, combined with experience, logic and an intuitive sense of the matter”. I have assessed the credibility and reliability of the witnesses by referring to facts proven by others independently, and by considering whether their evidence is contradicted or corroborated by the evidence of other credible witnesses. My evaluation of a witness’ credibility is based on my assessment of how that evidence fits into the entirety of the evidence presented at the trial.
[261] I have also assessed the interests and motives of the parties, whether questions are answered in a forthright and frank manner, whether their testimony was impeached in cross-examination and whether it is consistent with their examination for discovery evidence, whether they prevaricate or vacillate, whether they evade or argue or quibble, or whether they readily and candidly provide a response without focus on its implication to their position. I have considered whether their evidence is plausible, following the statement by O’Halloran J.A. in Faryna v. Chorny (1951), 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354 (B.C.C.A.), at p. 357, that: “In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions”. I am also guided by the criteria applied by Cameron J. in Prodigy Graphics Group Inc. v. Fitz-Andrews, 2000 CarswellOnt 1178 (S.C.) as applicable to my determination of credibility.
[262] Applying all of these elements, I found Joan’s evidence to be credible and reliable. She testified sincerely and in a forthright manner and answered, without debate or hesitation, questions that elicited responses that were contrary to her position. Her evidence was plausible, internally consistent, and largely corroborated.
[263] I had significant concerns about the credibility and plausibility of James’ testimony. I explain some of the grounds for these concerns throughout my analysis but will provide some further reasons. James denied that he told Dr. Kennel about concerns that he had about his inheritance, and his belief that Gertrude might be “delusional”, contrary to his sworn testimony at discovery and also against the weight of Dr. Kennel’s precise evidence memorialized in his notes of February 22, 2013, April 19, 2013, and May 3, 2013 attributing these comments to James, which I accept. James’ failure to disclose to his sister his conduct with their mother in the period from August 2013 onward and his gradual drip-feeding to Joan of the myriad documents and steps that he was taking on their mother’s behalf, never revealing the entirety of the testamentary dispositions until the litigation was underway, showed a lack of candour and a pre-conceived design to obtain unfair advantage. Several of James’ email communications to Joan in 2014 were shown in examination to be disingenuous. I found James’ testimony was at times evasive, and at times calculated.
[264] I also could not accept James’ consistent fall-back response, utilized repeatedly in answering questions on issues material to my assessment of undue influence, that he did what he did because that was what Gertrude wanted. This explanation was provided regarding several key areas: the retainer of Mr. Corbin to provide estate planning tax advice; the various meetings set up with lawyers when Gertrude was ailing, frail, or even recently hospitalized; the restriction on Joan’s access to visit or call her mother; the transfers of wealth to him from Gertrude during her lifetime; and the payment by Gertrude of legal fees incurred by James. None resonated more than when James used this response to justify his refusal to tell his sister of their mother’s funeral arrangements, insensitive to Joan’s stated desire to attend. In each instance, James’ testimony of Gertrude’s stated intention was not supported by any reasoned or sensible explanation, and was against the preponderance of probabilities, resulting in his evidence at times seeming more convenient than genuine.
[265] I may accept none, part, or all of the witness’ evidence, and may attach different weight to different components of a witness’ evidence. Having considered all their evidence, I accept Joan’s evidence over James’ evidence on those issues where they conflict. I accept some elements of James’ testimony where it is corroborated by the evidence of others.
X. CHARACTERIZING THE ESTATE PLANNING DOCUMENTS
[266] My analysis of whether the Estate Planning Documents, the Lifetime Gift Documents and the 2014 Will and Codicil are valid and are thereby applicable to determination of Gertrude’s wealth distribution, begins with an assessment of their nature and character.
A. Characterization of the Estate Planning Documents
[267] If the Estate Planning Documents are valid, James would receive Gertrude’s wealth on her death by reason of a right of survivorship, James would have the “absolute discretion” whether to share any of Gertrude’s wealth with Joan, Gertrude’s estate would be rendered penniless, and Gertrude’s Will would be meaningless. The fulcrum on which these agreements pivots is the 2013 Sale of Right of Survivorship, which traces its origin to the August 2013 Investment Distribution Agreement and is replicated, re-affirmed, or referred to in the other Estate Planning Documents.
(a) The Principles Applicable to Determination of the Validity of the Estate Planning Documents
(i) The Estate Planning Documents are Gratuitous Transfers for Wealth Distribution, not Contracts
[268] The common element that is found in all the Estate Planning Documents is the transfer to James of the right of survivorship in any Investment Account that James held jointly with Gertrude: most notably, the BMO Investment Account in which Gertrude’s wealth was held. The transfer of the right of survivorship by Gertrude to James is either a transfer by contract - through bargain and sale - as alleged by James, or it was a gratuitous transfer – a testamentary gift - as alleged by Joan. This characterization is critical to my determination of the validity of the Estate Planning Documents and, through them, to my assessment of the manner by which James currently possesses the funds in the BMO Investment Account.
[269] I cannot accept James’ submission that the August 2013 Investment Distribution Agreement, and the 2013 Sale of the Right of Survivorship that flows from it, are contracts. These documents contain none of the elements present in contracts. They were not negotiated. There was no offer and acceptance; no bargain or compromise. This applies equally to all Estate Planning Documents.
[270] In the case of the August 2013 Investment Distribution Agreement, Gertrude was not represented by a lawyer, was given no opportunity for legal advice, had no preview of the agreement that was presented to her while in her long-term care facility and, I find, had no understanding of the complex terms contained in the agreement, including the concept of right of survivorship. Most importantly, the August 2013 Investment Distribution Agreement flowed directly from the principles for wealth distribution set out in Gertrude’s May 2013 Will: James was to manage Gertrude’s funds on her death, as Estate Trustee, and was to distribute 25% to Joan. The refinements that James says were implemented by the August 2013 Investment Distribution Agreement were tools for distribution of Gertrude’s wealth on her death: not a contract.
[271] James contended that the Sale of the Right of Survivorship was for monetary consideration, the amount of $5,000. This was, by James’ admission, the return by him to Gertrude of $5,000 that Gertrude had given to him. I cannot accept James’ submission that the consideration for receiving a contractual entitlement to $21,000,000 is to return to the same donor the amount of $5,000 that was gifted earlier.
[272] Even by its very wording, the 2013 Sale of the Right of Survivorship stated that Gertrude did not consider it to be a contract. This document provided that it shall “constitute only a technical sale and considers its overall effect to be to implement a gift of a right of survivorship”: section 2. This concept is replicated in the 2013 Joint Account Agreement which states, at section 9: “While James used the same $5,000 which I gifted to him to purchase a right of survivorship, I consider and intend that the ‘purchase and sale’ aspect of the transaction to be only technical”.
[273] In section 9 of the 2013 Joint Account Agreement, executed at the same time as the Sale of the Right of Survivorship, Gertrude described the Sale of the Right of Survivorship as a gift: “I consider and intend the transactions, and the effects of all transactions, which are described above, to be aspects of my making gifts to James, which have an unknown future value, which can only be established at the time of my death.”
[274] To establish a gift, a party must show “[an] intention to donate, sufficient delivery of the gift, and acceptance of the gift”: Foley (Re), at para. 25, citing McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 24. I conclude that the Estate Planning Documents provide for a gratuitous transfer to James, on Gertrude’s death, of the right of survivorship of the BMO Investment Account, not a contractual sale of this right.
(ii) As the Gratuitous Transfer of the Right of Survivorship Occurs on Gertrude’s Death, it must be Assessed Using Principles Applicable to Testamentary Gifts
[275] In assessing the character of the August 2013 Investment Distribution Agreement and the 2013 Sale of the Right of Survivorship and the manner by which their validity should be determined, I am assisted by the finding of the Court of Appeal in Keljanovic. In that case, the deceased owned a residential property as a tenant in common with her partner. While in palliative care, she executed a transfer of the title of the property from tenancy in common, by which her interest would pass through her will, to joint tenancy, by which the property would transfer to her partner on her death by operation of the right of survivorship. In assessing the validity of the transfer of the title from tenancy in common to joint tenancy, the Court of Appeal upheld the trial judge’s determination that “because the transfer only had a practical effect when one of the joint tenants died and the survivor acquired the deceased’s interest in the property, she should apply the principles applicable to testamentary dispositions for both issues, capacity and undue influence”: Keljanovic, at paras. 36-37.
[276] Like the right of survivorship in Keljanovic, the Estate Planning Documents only had practical effect on Gertrude’s death. For example, the August 2013 Investment Distribution Agreement, the 2013 Sale of the Right of Survivorship and the 2013 Joint Account Agreement stated that James did not have any entitlement to the funds in the Investment Account during Gertrude’s life: 2013 Joint Account Agreement, section 3: “I do not presently intend to transfer any equity in those accounts to James while I am alive…”; 2013 Sale of the Right of Survivorship, section 3.1: “…no present or future value in the joint account accrues, or will accrue, to [James] until the moment of Gertrude’s death…”
[277] On the authority of Keljanovic, I will apply the principles applicable to testamentary dispositions in determining the validity of the Estate Planning Documents. I note that other Courts have found that the test for establishing capacity for monetarily significant gifts is the same as the principles for establishing capacity for a testamentary disposition: Brydon v. Malamas, 2008 BCSC 749, at para. 230; Miller v. Turney, 2010 BCSC 101, at paras. 32-33; Gironda v. Gironda, 2013 ONSC 4133, at para. 99, citing Re Beaney, [1978] 2 All E.R. 595 (Ch. D.) at p. 601: “..if [the gift’s] effect is to dispose of the donor’s only asset of value and thus for practical purposes to preempt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will.”
(iii) The Rebuttable Presumptions
[278] If the Estate Planning Documents are invalid, I must then determine the ownership of the assets that were transferred to James by Gertrude.
[279] The Supreme Court stated in Pecore, at para. 36, that gratuitous transfers between a parent and an adult child are subject to the presumption of resulting trust in favour of the deceased parent’s estate. The presumption of resulting trust places on the recipient of the transfer the onus to demonstrate that a gift was intended. The Supreme Court explained this at paras. 24-25:
The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: see Waters’ Law of Trusts, at p. 375, and E.E. Gillese and M. Milczynkski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.
The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of a resulting trust.
[280] The burden of proof is on the transferee, in this case James, to rebut the presumption of resulting trust by proving a contrary intention on the part of Gertrude, on a balance of probabilities: Foley (Re), at para. 26, relying on Sawdon, at paras. 56-57; Mroz, at para. 72. My task is to weigh all the evidence in order to determine Gertrude’s actual intention at the time that she transferred her assets to be held jointly with James, most notably the BMO Investment Account: Foley (Re), at para. 26, citing Pecore, at para. 44; Sawdon, para. 57; Mroz, at para. 72.
(b) The Validity of All Wills Must Be Determined Using the Principles Applicable to Testamentary Capacity and Undue Influence
[281] The May 2013 Will and the corresponding amendment to the Alter Ego Trust Deed, and the 2014 Will, the 2014 Alter Ego Trust Revocation Deed, and the 2014 Will Codicil are, definitionally, testamentary dispositions. Their validity will be determined using the principles of capacity and undue influence applicable to testamentary dispositions.
(c) The Validity of the Inter Vivos Gifts Will be Determined with Rebuttable Presumption of Undue Influence
[282] “A valid inter vivos gifts is one that is intended to take effect during the lifetime of the donor”: Foley (Re), at para. 25. The 2014 Deed of Gift purported to gift to James all of Gertrude’s possessions except the BMO Investment Account. The 2013 Use of Funds Agreement gifted to James access to the funds contained in the BMO Investment Account during Gertrude’s life, for discrete purposes, principally the payment of legal and accounting fees associated with defending any challenge to the Estate Planning Documents and the 2014 Will and Codicil.
[283] The 2014 Gift of Indebtedness Agreement gifted to James any indebtedness owed to Gertrude by her children. This document is ambiguous regarding whether this gift of indebtedness occurred during Gertrude’s life or upon her death. However, the 2014 Deed of Gift, executed by Gertrude at the same time, stated that Gertrude gifted “all present indebtedness” of her children to James. To read these two agreements consistently, I find that the 2014 Gift of Indebtedness Agreement must be interpreted to mean that the indebtedness gifted to James was intended to be during Gertrude’s lifetime.
[284] The validity of these documents will be assessed using the principles of capacity and undue influence applicable to inter vivos gifts. As these gifts are monetarily significant, the test that I will apply to determine capacity is the same as for testamentary disposition: Brydon, at para. 230; Miller, at paras. 32-33. I will determine whether the relationship between James and Gertrude had a “potential for dominance” so as to give rise to a presumption of undue influence: Morreale, at paras. 22-23. If so, the recipient, James, has the burden of rebutting the presumption of undue influence, on principles that I will apply from Seguin, at paras. 10-11.
XI. DID GERTRUDE HAVE TESTAMENTARY CAPACITY?
[285] To determine the validity of the May 2013 Will, the 2014 Will and its Codicil, the Estate Planning Documents and the Lifetime Gift Documents, I must assess Gertrude’s testamentary capacity.
A. The Test for Testamentary Capacity
[286] The pertinent time for determination of testamentary capacity is at the time of giving instructions and executing the testamentary document: Smith Estate v. Rotstein, 2010 ONSC 2117, at para. 118; Botnick et al. v. The Samuel and Bessie Orfus Family Foundation et al., 2011 ONSC 3043, at para. 103; Gironda, at para. 50.
[287] As the Ontario Court of Appeal stated in Stekar v. Wilcox, 2017 ONCA 1010, at para. 14, the test for determining testamentary capacity has been well-established since the Supreme Court, in Skinner adopted the test set out in Banks, at p. 56:
It is essential to the exercise of such power that a testator shall understand the nature of the acts and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and with a view to the latter object, that no disorder of the mind shall poison his affections, pervert the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made
[288] In Hall, at para. 14, the Ontario Court of Appeal stated that a testator must have a “sound disposing mind” to make a valid will. The elements of a sound and disposing mind require that, on her or his own volition and initiative, the testator appreciate the bequeaths being made in the Will. Testamentary capacity is negated when a testator does not have a sound and disposing mind, through mental disorder, that influences the distribution of the estate: Hall, at paras. 14-15; Banks, at p. 59. In Leger v. Poirier, 1944 CanLII 1 (SCC), [1944] S.C.R. 152, at p. 161, the Supreme Court stated that “[a] ‘disposing mind and memory’ is one able to comprehend, of its own initiative and volition, the essential elements of will making, property, objects, just claims to consideration, revocation of existing dispositions and the like”.
B. The Onus to Establish Testamentary Capacity
(a) Applicable Principles to Determine Onus - Suspicious Circumstances
[289] In Vout, at para. 26, the Supreme Court of Canada held that the propounder of a testamentary disposition has the legal burden of establishing due execution, knowledge, approval and testamentary capacity. However, once due execution of the document having been read by the testator is established, there is a rebuttable presumption that the testator knew and approved of the testamentary disposition: “Upon proof that the will was duly executed with the requisite formalities, after having been read over to or by a testator who appeared to understand it, it will generally be presumed that the testator knew and approved of the contents and had the necessary testamentary capacity.”
[290] The presumption of capacity on the part of the testator places the evidentiary burden on the person challenging the Will. However, this rebuttable presumption does not apply when suspicious circumstances exist. The presumption of testamentary capacity is displaced when suspicious circumstances regarding the preparation and execution of the will are established and, if the suspicious circumstances pertain to mental capacity, the propounder also has the legal burden of establishing that the testator had the mental capacity to execute the Will: Stekar v. Wilcox, 2017 ONCA 1010 (C.A.), at para. 8. Sopinka J. explained this in Vout, at para. 27:
Where suspicious circumstances are present, then the presumption is spent and the propounder of the will reassumes the legal burden of proving knowledge and approval. In addition, if the suspicious circumstances relate to mental capacity, the propounder of the will reassumes the legal burden of establishing testamentary capacity. Both of these issues must be proved in accordance with the civil standard.
[291] The presence of suspicious circumstances does not impose a higher burden of proof on the propounder of the will than the civil standard on a balance of probabilities: Royal Trust Corp. of Canada v. Saunders, 2006 CanLII 19424 (Ont. S.C.) at para. 77, relying on Vout and Scott v. Cousins, [2001] O.J. No. 19 (S.C.).
[292] In Gironda, at para. 55, and in Royal Trust, at para. 78, the Courts held that the presence of suspicious circumstances can be assessed by considering the following factors: the extent of physical and mental impairment of the testator at the time the Will was executed; whether the Will under consideration constituted a significant change from the former Will; whether the Will under consideration makes “testamentary sense”; the factual circumstances surrounding the execution of the Will; whether a beneficiary was instrumental in the preparation of the Will.
[293] In order to rebut the presumption of testamentary capacity, and shift the burden of proof to James, Joan must adduce sufficient evidence to “raise an issue” as to testamentary capacity: Royal Trust, at para. 76. There must be “some evidence that ‘excites the suspicion of a court’”: Royal Trust, at para. 76 relying on Scott, at para. 41. In Vout, at para. 25, the Supreme Court stated that suspicious circumstances may be raised by: “(1) circumstances surrounding the preparation of the will, (2) circumstances tending to call into question the capacity of the testator, or (3) circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud.”
(b) Analysis – The Presence of Suspicious Circumstances
[294] At the time that Gertrude began to execute the Estate Planning Documents in August 2013 and thereafter, including to execution of the 2014 Will and then its Codicil, there are a number of facts that I find to constitute suspicious circumstances. Gertrude’s health was frail in August 2013, and for significant periods thereafter. She was socially isolated and distressed in August 2013. The Estate Planning Documents and then the 2014 Will and its Codicil contain significant changes from her May 2013 Will, in the areas that I have explained, which include her transfer of her wealth to a joint account with James, the delegation to James of control over the distribution of wealth on her death, and the reduction in inheritance to Joan, eventually to zero.
[295] I find that the circumstances surrounding Gertrude’s execution of the August 2013 Investment Distribution Agreement particularly troubling, as Gertrude was presented with this document without the benefit of preview or counsel. The pace and volume of the documents presented to Gertrude throughout the 13-month period from August 2013 to September 2014 also, in my determination, raise suspicious circumstances, as does the factor that, on my findings, Gertrude did not request that many of these documents be prepared on her behalf and most, including those most contentious, were prepared by James’ lawyers.
[296] The May 2013 Will was, on the other hand, directed by Gertrude and executed by her with the assistance of her long-standing counsel. Gertrude had an opportunity to reflect on the basis of the significant change that she made to an unequal distribution to her children of her assets on her death. None of these elements present suspicious circumstances. However, Dr. Kennel’s evidence called into question the capacity of Gertrude’s mental and emotional health at the time of her execution of the May 2013 Will which, if accepted, would constitute suspicious circumstances, as does the capacity assessment by Ms. Woynarski.
(c) Conclusion – James Has the Onus of Establishing that Gertrude had Testamentary Capacity
[297] I have determined that there were suspicious circumstances present throughout Gertrude’s execution of the Post-August 2013 Documents, which includes the Estate Planning Documents, the Lifetime Gift Documents and the 2014 Will and its Codicil. By reason of the presence of suspicious circumstances, the presumption that Gertrude had capacity is displaced, and James, as the propounder of these documents, bears the onus of establishing that Gertrude had testamentary capacity at the times of their execution.
[298] In the event that I should determine that the Estate Planning Documents and the 2014 Will and its Codicil are invalid, either because Gertrude lacked testamentary capacity or was subject to undue influence, James propounds the May 2013 Will as valid. I have determined that there were suspicious circumstances present at the time that Gertrude executed the May 2013 Will. As such, James, as the propounder, in the alternative, of the May 2013 Will, bears the onus of establishing that Gertrude had testamentary capacity at the times of execution of the May 2013 Will.
C. The Challenge to Gertrude’s Testamentary Capacity – Mental Disorder Resulting from Delusions
[299] Joan did not challenge Gertrude’s testamentary capacity on four of the five criteria set out in Banks. Specifically, Joan conceded that, throughout, Gertrude understood the nature of a Will and its effect; that she understood the nature and extent of her property relevant to the disposition; that she was capable of evaluating the claims of those who might expect to benefit from her estate, and; that she was capable of communicating a clear and consistent rationale for the distribution of her property on her death.
[300] I pause to observe that, on the evidence, there could be no viable challenge of Gertrude’s satisfaction of these four criteria. Not only was Gertrude well-aware of her holdings, but she earned over $800,000 on her investments in 2013, at 91 years of age. She lived a lifetime knowing that only her two children had a claim to benefit from her estate, and she was, by all evidence, capable of communicating a clear basis for the handling and distribution of her wealth.
[301] Rather, Joan challenged Gertrude’s testamentary capacity in May 2013 primarily on a single ground, that insane delusions influenced Gertrude’s will-making. This challenge is based on the requirement, first stated in 1870 in Banks, at p. 56, and applied since, that if a person suffers from delusions that interferes with her or his ability to make a “rational disposal of property” then the testamentary disposition cannot stand:
If the human instincts and affections, or the moral sense, become perverted by mental disease; if insane suspicion, or aversion, take the place of natural affection; if reason and judgment are lost, and the mind becomes a prey to insane delusions calculated to interfere with and disturb its functions, and to lead to a testamentary disposition, due only to their baneful influence - in such a case it is obvious that the condition of the testamentary power fails, and that a will made under such circumstances ought not to stand.
[302] Joan contended that Gertrude’s insane delusions caused her to believe that Joan was an uncaring, unkind, inattentive daughter who was untrustworthy, and thereby alienated Gertrude’s affection toward Joan and influenced her testamentary dispositions, in circumstances where the basis for Gertrude’s beliefs had no factual basis in reality.
D. What is a Delusion?
[303] Dr. Shulman and Dr. Yiu both testified, and I accept, that a delusion is a fixed false belief that is out of keeping with one’s educational, cultural and religious background, that is incapable of being altered when shown to be unfounded. In Skinner, at p. 76, the Supreme Court stated that a “[d]elusion is insanity where one persistently believes supposed facts (which have no real existence except in his perverted imagination) against all evidence and probability and conducts himself however illogically upon the assumption of their existence”.
[304] Joan’s position that Gertrude harboured illusions that influenced her testamentary dispositions relied heavily on two cases: the decision of the British Columbia Supreme Court in Brydon, and; the decision of Cullity J. in Banton.
[305] In Brydon, a testator had executed Wills in which her niece was the main beneficiary. The testator had, during her lifetime, transferred to her niece a residential property on the promise that her niece would not sell it, or would not sell it to anyone outside the family. The testator changed her Will to exclude her niece, on her belief that her niece had sold the residential property. The parties seeking to uphold the Will submitted that the testator had removed the niece as a beneficiary because the new beneficiaries had developed a more loving relationship with the testator, because the niece’s relationship with the testator had deteriorated, because the niece had already received gifts from the testator during her lifetime, and because the testator believed that the niece had broken her promise not to sell the residential property.
[306] The Court determined that the testator’s statements that the plaintiff had promised not to sell the residential property, and had broken that promise, were false, such that there was no basis in fact, for the testator’s beliefs. Rather, the Court found that the testator had proceeded on delusions that rendered her incapable of distributing her assets. The Court thereby concluded that the parties seeking to propound the Will failed, on a balance of probabilities, to establish that the testator had testamentary capacity because she suffered from delusions: Brydon, at paras. 220-225.
[307] In Banton, the testator did not leave anything to his children because he believed that he had been abused by them and that his family was not interested in him but only his wealth. Even though Cullity J. accepted that the testator genuinely held these beliefs, the Court also determined that these beliefs were contrary to all the evidence and were in conflict with what the testator must have known if not cognitively impaired. The Court concluded that the testator’s false beliefs were based on insane delusions, with the result that the proponent of the Will failed to discharge her burden of establishing testamentary capacity. Cullity J. stated that the distinction between a perceptively unkind decision to disentitle a beneficiary for seemingly insufficient cause and a delusion will depend on the circumstances of the individual case: Banton at para. 47.
[308] The Court in Banton stated, at para. 33, that insane delusions are “not limited to beliefs that are so bizarre that their content, by itself, evidences mental disorder”. Rather, the “delusions include beliefs whose extreme improbability is apparent only when the surrounding facts are known”. Cullity J. posed the approach to the analysis as follows, at para. 33: “In all cases where delusions of this kind are alleged to exist, there will be a question whether the belief should be characterized merely as quite unreasonable, on the one hand, or as something that, in the particular circumstances, no one ‘in their senses’ could believe.” I am guided by Cullity J.’s formulation of the question that must be answered to find that a testator is without capacity by reason of an insane delusion at para. 33:
The nature of the belief is not necessarily the turning point, or even the apparent lack of a basis for such belief. Rather the question is whether, considering all the facts and circumstances, it is fairly shown that the will proceeded from and on account of a deranged mind. [Citation omitted]
[309] In Royal Trust, at paras. 67-74, Blishen J. conducted a survey of cases that had analysed whether a testator’s capacity was lost by reason of insane delusions: Wilson v. Churchmack, [1998] O.J. No. 3733 (Ct. J. (Gen. Div.)), at para. 197: “For a delusion to affect testamentary capacity it must so take over a testatrix’s mind that it governs the making of her will”; Re Barter, 1938 CanLII 266 (NB CA), [1939] 2 D.L.R. 201 (N.B. S.C. (A.D.)); Re McLeod’s Estate (1989), 1989 CanLII 9848 (NS SC), 94 N.S.R. (2d) 148 (N.S. Prob. Ct.), aff’d 1990 CanLII 2382 (NS CA), 95 N.S.R. (2d) 61 (N.S. C.A.); Re Schwartz, 1970 CanLII 32 (ON CA), [1970] 2 O.R. 61 (C.A.); Burge v. Burge (1989), 1989 CanLII 4913 (NL SC), 77 Nfld. & P.E.I.R. 58 (N.L. S.C.(T.D.)); Abrahamson Estate, Re (1994), 1994 CanLII 17058 (MB QB), 96 Man R. (2d) 150 (Q.B.), aff’d 1995 CanLII 16380 (MB CA), 102 Man R. (2d) 233 (C.A.), Re Ward Estate, [1990] O.J. No. 819 (Ont. Ct. J. (Gen. Div.)); Royal Trust v. Ford, 1971 CanLII 139 (SCC), [1971] S.C.R. 831 (“Royal Trust v. Ford”).
[310] The thread that runs through these cases is that for a testator to be found incapable on the basis of insane delusions, the delusion must be shown to be false and fixed, that is incapable of explanation or rationalization, and it must have taken over the person’s will-making. Anger or resentment based on a factual basis that exists is not enough.
E. Framing the Analysis of Whether Gertrude had a Delusional Disorder
[311] The question that I must answer is whether Gertrude’s belief that Joan was an uncaring, unkind, inattentive daughter who was untrustworthy were “fixed, false beliefs”, as defined by the expert psychiatrists. Were they, on the evidence that I have accepted, delusions? This is more than Gertrude getting the facts wrong or misinterpreting a situation or exaggerating or posturing. This is more than Gertrude being vindictive, spiteful, mean-spirited, or unforgiving. This is a persistent belief in a state of facts that no rational person could hold to be true but rather exist only in the mind of the deluded testator: Skinner, at p. 76. As stated by Cullity J. in Banton, at para. 47, this is a fact specific analysis that calls for a determination of whether the testator had a factual basis for the belief that influenced her will-making, whether the testator’s will-making was made on delusion or whether it had some basis in fact, however tenuous:
The question whether an erroneous belief crosses the line between an unreasonable and capricious conclusion with some very tenuous, illogical or illusory basis in facts and a delusion due to mental weakness or disorder will often be one of degree and will depend upon the particular circumstances.
[312] My task is to determine whether Gertrude’s decision, in May 2013 and in the period from August 2013 to September 2014, to reduce Joan’s inheritance from 50% to 25% and then to zero, was based at least on a “tenuous, illogical or illusory” basis in facts, or rather was the product of delusions. In contending that Gertrude was suffering from a delusional disorder, Joan relied mainly on her testimony, the evidence of Dr. Kennel, the contemporaneous capacity assessment by Janice Woynarski in May 2013, and the retrospective capacity assessment conducted by Dr. Shulman.
[313] James contended that Gertrude’s beliefs towards Joan had a basis in fact: even if only an “unreasonable and capricious conclusion with some very tenuous, illogical or illusory basis”. James relied principally on his testimony, the assessment made by Messrs. McCarter and Weir of Joan’s testamentary capacity in May 2013, the evidence of Mr. Corbin and Ms. Agnew and the testamentary capacity assessment conducted by Dr. Yiu.
F. Analysis – Was Gertrude’s Will-Making Affected by Delusions?
[314] All who testified stated that Gertrude’s decision to treat Joan unequally than James in her testamentary dispositions, and indeed in her gifting, was based on her belief that Joan was an “uncaring, unkind, inattentive” daughter who was “untrustworthy”. I accept that these beliefs influenced Gertrude’s decisions in distribution of her wealth in the May 2013 Will, in the Estate Planning Documents, in the Lifetime Gift Documents and in the 2014 Will and its Codicil. Accordingly, should I determine that Gertrude held these beliefs due to insane delusions, it would follow that she lacked testamentary capacity because I have determined that these beliefs informed her testamentary dispositions and inter vivos gifts.
(a) The Expert Opinion Evidence
[315] The parties called two experts to testify to Gertrude’s capacity at the time of her execution of the May 2013 Will and during the time of her execution of the Post-August 2013 Documents. Joan called Dr. Kenneth Shulman and James called Dr. Wendy Yiu.
(i) Dr. Kenneth Shulman
[316] Dr. Shulman’s qualifications as an expert geriatric psychiatrist were not challenged by James. Since completing fellowships in psychiatry in the United Kingdom and Canada in 1978, he has been a full-time staff member in the Department of Psychiatry at Toronto’s Sunnybrook Health Sciences Centre. He has been a professor in the Department of Psychiatry at the University of Toronto since 1994. He is the accomplished author of a vast collection of articles, studies, treatises, and books in psychiatry, with a focus on geriatric psychiatry. He is the recipient of multiple honours in medical practice and teaching.
[317] In her 2014 Application, Joan sought an Order that Dr. Shulman conduct a testamentary capacity assessment of Gertrude. This was opposed by Gertrude and James, and this Application was settled without determination of this issue. Joan did not have the opportunity for Dr. Shulman to conduct a contemporaneous capacity assessment of Gertrude, leaving Dr. Shulman to conduct a retrospective testamentary capacity assessment that was based on his analysis of the voluminous records that were produced in this Consolidated Application.
[318] James objected to the admissibility of Dr. Shulman’s expert opinion evidence, mainly on the basis that Dr. Shulman’s retrospective capacity assessment was not reliable, emphasizing that Dr. Shulman had not met and assessed Gertrude but rather proposed to offer opinions based on a “paper review” of the records. Having denied Dr. Shulman the opportunity to conduct a contemporaneous capacity assessment of Gertrude when sought by Joan, thereby limiting Dr. Shulman to a retrospective capacity assessment, James then objected to the admissibility of Dr. Shulman’s expert opinion evidence on the basis that it was not contemporaneous and therefore unreliable. I did not accept this submission. I admitted Dr. Shulman as an expert in the area of geriatric psychiatry to give opinion evidence in the area of retroactive testamentary capacity assessment.
[319] Dr. Shulman testified that Gertrude satisfied all the criteria set out in Banks for testamentary capacity except for one: namely, Dr. Shulman opined that Gertrude suffered from a delusional disorder, causing her thinking, behaviour, and disposition of her assets to be influenced by her delusions. Dr. Shulman explained that a delusion is a fixed, false belief that is out of keeping with one’s educational, cultural, and religious background.
[320] Dr. Shulman’s opinion that Gertrude suffered from delusions was formed on his interpretation of Gertrude’s conduct. Dr. Shulman found that Gertrude had a consistent, persistent pattern of accusation and confrontation with Joan, Dr. Kennel, and the staff at Columbia Forest. He set out to investigate whether Gertrude’s beliefs concerning these people had a factual basis or whether they were the product of a fixed, false belief. Dr. Shulman underwent the same analytical quandary as Dr. Kennel: is Gertrude abusive, rude, and purposefully confrontational, or is she delusional? Is she basing her belief that Joan is uncaring, Dr. Kennel unresponsive, and the Columbia Forest staff incompetent on a factual basis or on delusion?
[321] I found that Dr. Shulman’s expert opinion evidence was relevant, reliable, and necessary to frame my assessment of Gertrude’s testamentary capacity, in applying the psychiatric concept of delusional disorder and its constituent elements. However, beyond assisting in framing my analysis, Dr. Shulman’s opinion evidence was of limited value because, as Dr. Shulman freely volunteered in his testimony, the determination of whether Gertrude suffered from a delusional disorder depended on my finding and interpretation of the facts that fueled Gertrude’s beliefs regarding Joan and others. If Gertrude had a factual basis for her beliefs, then she was not delusional. Gertrude could, according to Dr. Shulman, have controlling personality characteristics, be strong-willed and dominant, and even be abusive and unkind toward her children and still be capable. The issue would be determined on whether, on the facts that I find, Gertrude had some basis, however tenuous, for her beliefs.
(ii) Dr. Wendy Yiu
[322] Joan objected to Dr. Yiu’s qualifications to perform a testamentary capacity assessment because, after some 16 years as a practising psychiatrist, this was her first such assignment. I do not accept this submission. Dr. Yiu had the education, training, professional certification, and the experience necessary to be qualified to provide expert opinion evidence of Gertrude’s testamentary capacity.
[323] Joan’s broader objection to the admissibility of Dr. Yiu’s expert opinion evidence was that Dr. Yiu was not independent. Joan contended that Dr. Yiu was part of the “team” assembled by James to guard against any challenge that Joan might make to Gertrude’s unequal distribution of her wealth. I admitted Dr. Yiu’s expert opinion testimony on the basis that she was a participant expert, who was able to provide admissible evidence of her observations and participation in the events in issue and her opinions that derived from the ordinary exercise of her skill, knowledge, training and experience while observing or participating in such events, in accordance with Westerhof v. Gee Estate, 2015 ONCA 206, 124 O.R. (3d) 721, at paras. 59-64. I will explain.
[324] Although Dr. Yiu delivered a Rule 53-compliant report and Acknowledgement of expert duty, apart from her testimony pertaining to Gertrude’s capacity at the time of her execution of the May 2013 Will, Dr. Yiu was substantively a participant expert, as that term is defined in Westerhof. When Dr. Yiu conducted her ongoing assessment of Gertrude, there was no litigation pending. Her capacity assessment was on behalf of Gertrude, who is a non-party to this Consolidated Application. I find that when Dr. Yiu assessed Gertrude she did so as her assessing psychiatrist well-before any litigation was initiated, and Dr. Yiu delivered her capacity assessment report before the inception of litigation.
[325] Dr. Yiu testified that she perceived that her role as a capacity assessor changed in October 2014, when a term of settlement of Joan’s 2014 Application required that she complete her capacity assessment report with consideration of evidence that she was to gather from Joan and others and share the report with Joan. Dr. Yiu did so, conducting interviews, receiving documents, and fact finding. She delivered her capacity assessment report on November 2015 to both James and Joan, months before the initiation of litigation between these parties, further bolstering my conclusion that Dr. Yiu was a participant expert.
[326] As a result, the unusual closeness that Dr. Yiu had with the patient whose capacity she was assessing, the high number of visits to assess capacity, numbering 22 in a 14-month period from August 2013 to October 2014, the proximity that she had with Gertrude’s lawyers, are compelling considerations in assessment of the independence of a litigation expert, but was part of the narrative by which Dr. Yiu assessed and observed Gertrude before the initiation of litigation. These considerations go to the weight that I attribute to Dr. Yiu’s evidence as a participant expert. I will explain some limitations that I have placed on the weight that I will give to Dr. Yiu’s evidence.
[327] Dr. Yiu’s conduct and involvement with Gertrude went well-beyond that expected or required for a capacity assessment. Dr. Yiu’s process of evidence gathering, witness interviews, document collection and analysis, and the weighing and assessment of the information was beyond her role in conducting a capacity assessment and providing opinion evidence of a psychiatric nature. Dr. Yiu testified that she viewed herself as the “eyes and ears of the Court”. She had no such role.
[328] Dr. Yiu stated that she formed her opinion of Gertrude’s testamentary capacity, in part, on the basis of days of interviews that she conducted of Joan and Dr. Kennel and some 18,000 pages of documents that she professed to having reviewed, the vast majority of which was not proven at trial as evidence. I disregard the opinions that Dr. Yiu derived from her self-acclaimed “investigation”, except to the extent that the evidence that she relied upon in coming to her opinion was proven at trial.
[329] I specifically disregard any opinion that Dr. Yiu proffered on whether Gertrude was subject to undue influence by James. I do so for the following reasons. First, this was not an issue that came within the permissible scope of testimony for which Dr. Yiu was qualified, rendering any opinion that she provided on the issue of undue influence inadmissible. Second, she was not in a position even to make this assessment. By the time that Dr. Yiu was retained and her services were activated, Gertrude had already executed the August 2013 Investment Distribution Agreement and the formulation and implementation of the Investment Account Transfer Plan was underway. Any assessment made by Dr. Yiu of undue influence was, like Ms. Agnew, made in a context whereby Gertrude’s willingness to transfer her assets to a joint account, disentitle Joan to any inheritance, and delegate to James the discretion of whether to transfer wealth to Joan was already set in motion.
[330] I accept that Dr. Yiu met with Gertrude on 22 occasions in the 14-month period commencing on August 23, 2013 and ending on October 30, 2014. I accept that she was in a position to observe Gertrude’s conduct and to assess her mental status. She was present and observed as Gertrude considered and signed the Post-August 2013 Documents. To this extent, I found Dr. Yiu’s opinion evidence to be admissible under Westerhof and useful.
[331] Dr. Yiu stated that all people have cognitive biases, and that the challenge in diagnosing delusional disorder is to determine whether the person’s beliefs are based on delusion or perception, interpretation, or personality. Dr. Yiu explained that delusional disorders occur in less than .2% of the population. Dr. Yiu stated that she assessed whether Gertrude had any cognitive disorder, including delusions. To do so, Dr. Yiu assessed Gertrude’s affect, appearance, eye contact, volume of voice, memory and attention span, ability to maintain contact, insight, and judgment. She also focused on whether Gertrude was prepared to consider different outcomes if the facts on which she was proceeding were shown to be unfounded.
[332] Dr. Yiu’s expert opinion was that Gertrude did not suffer from a delusional disorder. She based this opinion on her observation that Gertrude had a factual basis for the views that she held of Joan that influenced her decisions and that when confronted with contrary circumstances, Gertrude was prepared to alter her beliefs. Dr. Yiu stated that, in her view, Gertrude had testamentary capacity at the times that she executed the Post-August 2013 Documents in Dr. Yiu’s presence as Gertrude did not have, at those times, any mental condition or disorder influencing her decisions or affecting her ability to understand and appreciate the documents that she was executing.
(iii) Conclusions Regarding the Expert Testimony
[333] I accept Dr. Shulman’s eminent qualifications and insightful testimony in principles of geriatric psychiatry, but I do not accept his conclusion regarding Gertrude’s testamentary capacity. Dr. Shulman’s conclusion was based on presumed facts that I do not accept. For example, Dr. Shulman’s findings that Gertrude had provided gifts to her children equally until 2013, that Joan had visited Gertrude and cared for her consistently throughout, and that Gertrude had no sensible basis for complaint of her care at Columbia Forest were not proven. Dr. Shulman’s opinion, which relied on these and others similarly unproven, cannot therefore be given weight. I note, as well, that Dr. Shulman did not cite a single instance of Gertrude having a fixed, false belief that derived from Gertrude’s conduct from the time that she left Columbia Forest in September 2013 to her death in April 2016.
[334] I acknowledge as valid Joan’s contention that Dr. Yiu crossed the line from Gertrude’s objective capacity assessor to Gertrude’s physician, having a role in Gertrude’s care and health support. This is seen from Dr. Yiu’s agreement to act, for some time, as Gertrude’s substitute attorney for care and in periodically providing input on Gertrude’s health needs and care. However, this does not diminish Dr. Yiu’s unique position as a participant expert to observe Gertrude’s mental condition, to assess Gertrude’s processing of information and formulation of beliefs, at the numerous times post-August 2013 that are material to my analysis of her testamentary capacity.
[335] I accept Dr. Yiu’s evidence that, as a qualified psychiatrist, she saw no sign that Gertrude had a delusional disorder in the 22 occasions that Dr. Yiu observed Gertrude from August 2013 to October 2014 and did not diagnose any cognitive disorder that affected Gertrude’s will-making. This is useful evidence as Dr. Yiu was uniquely positioned to make these assessments, but only one element in my analysis. I will decide the ultimate issue of Gertrude’s testamentary capacity on all the evidence presented: Dujardin v. Dujardin, 2018 ONCA 597.
(b) Analysis: Was There a Factual Basis for Gertrude’s Beliefs?
[336] To assess whether Gertrude suffered from insane delusions, I must determine whether there is a factual basis – even very tenuous, illogical, or illusory – for Gertrude’s belief that Joan was an uncaring, unkind, and inattentive daughter, and that she was untrustworthy. I am not required to determine whether Joan had these characteristics, and I specifically decline to do so. In the following analysis, I assess solely whether Gertrude had a factual basis for these beliefs.
(i) The Unequal Gifting Started Well-Before the 2013 Will
[337] I do not accept James’ contention that Gertrude’s strained relationship and disappointment with Joan traces back to childhood, and that this family history provides the foundational backdrop to Gertrude’s conclusions in 2013 to 2014 to disinherit Joan. I have found that Gertrude gifted money to her children equally in the 16-year period from 1989 to 2005. I concluded that she did so notwithstanding that Gertrude had a different relationship with Joan than with James. Accordingly, regardless of what had happened historically, up to 2005 Gertrude distributed her wealth equally to both children.
[338] However, the change that I found in Gertrude’s gifting to her children in the period from 2005 to 2008 was a precursor to what would follow. The unequal gifting by Gertrude to her children beginning in 2005 resulted in James receiving 73.8% of Gertrude’s gifts and Joan 26.2%, closely replicating the unequal percentages employed by Gertrude in her May 2013 Will.
[339] The loan forgiveness provided for by the 2008 Will, which favoured James unequally to the extent of some $1,500,000, was the start of unequal treatment by Gertrude of her children in her Will. The formalization of an unequal percentage distribution in the May 2013 Will was the culmination of this direction in Gertrude’s approach to her wealth distribution but was not a change. I conclude that the unequal gifting in the May 2013 Will then was not a directional change from the 2008 Will but rather it was an incremental change.
(ii) Factual Basis for Beliefs of Regarding Care and Kindness
[340] I accept Joan’s testimony that she visited her mother once a week, or so, at Columbia Forest in the period from November 2005 to December 2012. I also accept Joan’s evidence that these visits involved Joan bringing items that Gertrude required and attending to tasks and errands on her behalf. I did not hear evidence of activities that Joan engaged in with Gertrude, common interests that they discussed, or outings that they shared apart from medical appointments and the visit to Joan’s house on June 29, 2007 when Gertrude fell and broke her hip.
[341] I also accept Joan’s evidence that Joan stopped seeing Gertrude in December 2012 and did not resume her regular weekly visits until April 19, 2013.
[342] When Gertrude told the capacity assessor, Ms. Woynarski, on May 13, 2013, that her daughter had not visited her for Christmas, it was not a delusion: it was true. Joan submitted that when Gertrude told Ms. Woynarski that her daughter had not visited her for her birthday, it was a delusion because Gertrude’s birthday was the day following. I cannot accept that this was an insane delusion as opposed to an exaggeration. Indeed, as matters would have it, while Joan did not visit with her mother the next day, on her birthday, the visit was brief and perfunctory.
[343] I do not accept Joan’s submission that Gertrude was delusional in that she forgot that Joan had visited her on a regular basis for a 7-year period. On all the evidence, I find that Gertrude’s statement to Ms. Woynarski, Dr. Kennel, Mr. Weir, and anyone else who would listen, that Joan did not visit with her, had a factual basis in Joan’s physical and emotional absence from Gertrude’s life in the period from December 2012 to April 2013.
[344] Joan complained that she accompanied her mother to dental and ophthalmology appointments and that Gertrude complained that Joan’s physician choices were ill-founded and the practitioners unsuitable. I do not see this as a delusion, or a fixed, false belief, as contended by Joan, but rather an expression of opinion.
[345] And last, Joan stated that Gertrude was delusional because she accused Joan of calling her a derogatory term, and told her that no one likes her, when Joan denied having made such comments. From my assessment of the totality of the evidence, including Joan’s testimony, I readily find that Joan’s relationship with Gertrude had some terse episodes and tense exchanges that gave rise to the probability of regrettable language. I am satisfied that Gertrude’s attribution of derogatory references by Joan of her was not devoid of any basis in fact, even if tenuous or exaggerated.
[346] I accept Joan’s testimony that Gertrude blamed her for her move to Columbia Forest, which Gertrude came to resent, for her declining health, and for her sense of abandonment. Joan had a participation in these events. Joan advised Gertrude in the selection of Columbia Forest and her move there, Gertrude sustained a major injury while in the company of Joan and her family, and Gertrude’s sense of abandonment at Columbia Forest correlates to Joan’s absence.
[347] Without in any manner determining whether Joan was, in fact, an “uncaring, inattentive, unkind daughter who was untrustworthy”, which I am not required to decide for my analysis and decline to do so, I find that Gertrude had a factual basis – even tenuous, illogical, or illusory – to hold these beliefs. Accordingly, I do not accept that these beliefs were based on insane delusions.
(iii) Factual Basis for Belief Regarding Trustworthiness
[348] I have assessed Joan’s submission that Gertrude’s insane delusions are evident from her accusation that Joan was untrustworthy. Joan relies on the following episodes: Gertrude’s accusation that Joan was paying her homeowner’s insurance policy with Gertrude’s money; that Joan took Gertrude’s jewelry without her consent, and; that Joan had ‘cleared out’ Gertrude’s bank account.
[349] I find that in each case Gertrude’s allegation had some connection to an admitted fact, even if then extended, extrapolated, or interpreted in a manner that offended Joan. Joan’s homeowner’s insurance policy did include a rider that covered jewelry belonging to Gertrude, so that she had a basis for inquiry into the payment of the policy premium. Joan did transfer a small balance of funds between two of Gertrude’s accounts, causing one to be closed. And Gertrude did lose jewelry that she thought had been entrusted to Joan.
[350] Joan contended that Gertrude was delusional because she would not exonerate Joan from her perceived untrustworthiness when Joan demonstrated that what she had done had an honest objective and intention. On all the evidence, the stubbornness and singlemindedness shown by Gertrude in these instances, the unwillingness to admit that she was in error, the continued exaggeration to prove her point, was consistent with long-standing, well-established personality traits attributed to Gertrude by several witnesses
[351] I do not accept Joan’s submission that Gertrude had a “fixed, false belief” that Joan was the perpetrator of misdeeds and thereby held the insane delusion that Joan was untrustworthy. Gertrude’s beliefs of Joan’s involvement in her financial matters, although tenuous and perhaps unfair, did not cross the line to insane delusions.
[352] Again, in making these findings, I am not required to determine whether Joan was, in fact, untrustworthy and decline to do so. It is sufficient for my analysis that I assess whether Gertrude had a factual basis for forming this belief, and I find that she did.
(iv) Factual Basis for Criticisms of Care Facility
[353] During the time that Joan was absent in December 2012 and four months following, Gertrude directed Mr. McCarter to prepare a detailed letter to the Ministry complaining of Columbia Forest, received a response, considered Mr. McCarter’s report, and prepared a detailed handwritten reply. Joan submitted that Gertrude’s complaints of Columbia Forest were delusional because the Ministry found that Columbia Forest was compliant. I cannot accept this submission. That the Ministry determined that Columbia Forest had not breached any regulation did not mean that Gertrude did not have cause for complaint of her living conditions.
[354] The parties adduced evidence of Gertrude’s catheter being plugged on occasion, scheduling complications in changing the bag, incidents of the catheter poking her bladder, incidents of the catheter being removed while still inflated and falls during transfers. The Progress Notes showed that Gertrude fell while in the care of Columbia Forest staff. There is a chart entry where Gertrude was “found on floor”. The water leak into Gertrude’s room and on her bed was real. Gertrude’s request that students not be assigned to her was not respected, causing her to feel that she was not receiving the attention and priority to which she felt entitled. She voiced her view throughout that the food was not to her liking
[355] I find, on this evidence, that Gertrude had a factual basis for her complaints. Further, Joan sided with Dr. Kennel and Columbia Forest, encouraging her mother to find common ground and compromise in her demands. This presented a factual basis for Gertrude to consider that Joan did not care about her living conditions.
[356] I do not make any finding of whether Columbia Forest was compliant with its obligations. I find only that Gertrude did have a factual basis for the criticism that she steadily directed at Columbia Forest, without determination of whether these complaints were legitimate.
(c) Assessment of Dr. Kennel’s Evidence on Testamentary Capacity
[357] I found Dr. Kennel to be a sincere, forthright witness, whose helpful evidence concerning his observations of Gertrude provided me with significant insight into her conditions and conduct during the years he treated her, November 2005 to September 2013. Joan contended that Dr. Kennel’s evidence supported her submission that Gertrude suffered from insane delusions. I do not accept this submission. I will explain why.
[358] Dr. Kennel volunteered that treating Gertrude was challenging. In his words: “She is probably in a class of one, just where she wants to be”. Dr. Kennel observed that she often “played one of her children off the other”. He testified, supported by his note of March 9, 2012, that his initial view was that Gertrude likely had a narcissistic personality disorder, characterized by a sense of grandiosity, a lack of empathy for others, and a willingness to exploit relationships to achieve her objectives. Dr. Kennel’s Progress Note of March 9, 2012 recorded these observations: “I find Gertrude to be rude and unkind. I accept this may be related to some cognitive impairment, but I think it is a personality disorder that has been the same all of her life.”
[359] Dr. Kennel vacillated in his views of Gertrude’s conditions. On October 19, 2012 he wrote: “I think she is cognitively compromised and that further complicates her personality disorder”. But two weeks later Dr. Kennel wrote that: “cognition is likely not the issue”.
[360] Dr. Kennel’s treatment of Gertrude became marred, if not entirely permeated with conflict. Gertrude’s complaints of Columbia Forest escalated in 2013 and along with them her criticisms of Dr. Kennel, who was increasingly placed in the unenviable position of defending himself while trying to care for his patient. Dr. Kennel wrote on January 25, 2013: “Her accusations and beliefs are unfounded and fictional and may be delusional. Regardless, we cannot argue or correct a fixed false belief”. Yet, just over a week later, on February 22, 2013, Dr. Kennel rejected James’ suggestion that Gertrude was delusional, writing:
[James] says that she is delusional. I indicated that I believed [Gertrude] fully understood what she was doing and saying and understood the consequences of her actions. I believed that she was capable of directing her own care and affairs. I agreed that her judgment may be skewed, but that was a different problem than incompetency.
[361] Many of Dr. Kennel’s views were expressed causally in the Progress Notes, including a series of observations made largely while he was on the defensive, repelling Gertrude’s accusations while under attack from her relentless complaints and allegations of breach of care. I noted in Dr. Kennel’s Progress Notes of May 17, 2013; May 31, 2013; June 14, 2013; and July 6, 2013, and others, that Gertrude continued to berate him, criticize the staff and reiterate her threat of reporting him and Columbia Forest to regulatory authorities. Dr. Kennel recorded that Gertrude’s negative comments about him, and Columbia Forest are “bordering on libel and simply are not true” but stated candidly in cross-examination that many of Gertrude’s complaints were based in fact, and many that weren’t were intended to provoke, exaggerate, or to make a point.
[362] I find that Dr. Kennel was challenged to care for Gertrude while defending himself, and pondered throughout without conclusion, of whether, in his words, Gertrude purposefully “manufactured” the truth to “serve her immediate purposes as lies”, and through this was “abusive and rude”, or whether she was affected by “fixed, false beliefs”. I did not find in Dr. Kennel’s evidence an examination of Gertrude’s mental status giving rise to a considered and reasoned diagnosis that she suffered from insane delusions, as contended by Joan.
(d) The Competing May 2013 Contemporaneous Assessments
[363] I have considered the conflicting testamentary capacity assessments conducted of Gertrude by Ms. Woynarski and Messrs. McCarter and Weir in May 2013. I accept the conclusion reached by Messrs. McCarter and Weir that Gertrude had testamentary capacity, at that time, over the contrary opinion reached by Ms. Woynarski. I will explain why.
[364] Ms. Woynarski’s conclusion that Gertrude lacked testamentary capacity was based on her finding that Gertrude could not provide a “logical reason for her decision to make changes in the distribution of her estate”. Ms. Woynarski reported that Gertrude told her of her that Joan was an uncaring daughter from whom she was estranged but found that Gertrude’s beliefs that yielded this sentiment were unfounded, and thereby delusional. Ms. Woynarski based this finding on unspecified information that she received from unidentified Columbia Forest staff members and Dr. Kennel, to the effect that Joan visited Gertrude regularly, and that Gertrude’s complaints of them, Joan, and Dr. Kennel were unfounded.
[365] The factual basis on which Ms. Woynarski formed her conclusions was not proven at trial. As the collateral, information on which Ms. Woynarski’s opinion was based was not established, or accurate, I do not give any weight to Mr. Woynarski’s capacity assessment.
[366] Mr. McCarter had known Gertrude for much longer than Ms. Woynarski: to be precise, at least ten years longer. Ms. Woynarski assessed Gertrude once, on May 13, 2013 for about an hour. Mr. McCarter had assessed Gertrude’s testamentary capacity on four previous occasions, on Gertrude’s execution of Wills in 2003, 2005, and 2008. He had a baseline and background to draw upon.
[367] Leading to May 2013, Mr. McCarter had just endured months of dealings with Gertrude in her complaints of Columbia Forest to the Ministry. I draw the inference from this that Mr. McCarter would also have heard Gertrude’s frustrations with her living conditions, her health, and her relationship with her children. Mr. McCarter also knew Joan.
[368] I find that Mr. McCarter was, by reason of his history with Gertrude, his training and his familiarity with principles of testamentary capacity, well-positioned to assess Gertrude’s testamentary capacity in May 2013. Together with Mr. Weir, he did so. Joan submitted that Mr. McCarter did not adequately investigate whether Gertrude had a logical reason to reduce Joan’s inheritance. I do not agree. I find that Mr. McCarter had ample history to draw upon.
[369] Mr. Weir testified that he and Mr. McCarter concluded that Gertrude had testamentary capacity when she considered and executed the May 2013 Will. I accept fully Mr. Weir’s testimony on his and Mr. McCarter’s preparation of the May 2013 Will, their explanation of its contents to Gertrude, their oversight of the formalities of its execution, and their assessment and conclusion that Gertrude had testamentary capacity to enter into the May 2013 Will.
G. Conclusion – Gertrude Did Not Have a Mental Disorder that Affected her Ability to Distribute her Estate: She Had Testamentary Capacity
[370] To lose testamentary capacity on the basis that the testator lacks a sound and disposing mind, a lack of mental capacity or mental disorder must be established. This is more than being “eccentric, unfair or capricious”: Royal Trust, at para. 59; also, Gironda, at para. 51. It is more than entertaining “wrong-headed notions” and doing “eccentric … absurd and foolish acts”: Beal v. Henri, 1950 CanLII 76 (ON CA), [1950] O.R. 780 (C.A.), at p. 786. “Such things as imperfect memory, inability to recollect names and even extreme imbecility, to not necessarily deprive a person of testamentary capacity” provided that the testator’s mind is sufficiently sound to understand the nature of the property being bequeathed: Woodward v. Grant, 2007 BCSC 1192, at para. 125, citing Field v. James, [1999] B.C.J. No. 1398 (S.C.), at para. 52, referring to Banks, at p. 57-58. A will-maker can be unfair, capricious and even mean but still have testamentary capacity so long as the testator does not suffer from a mental disorder: Chambers v. Uzelac, 2004 BCCA 533, 35 B.C.L.R. (4th) 252; Re Millar (1927), 1927 CanLII 402 (ON SC), 60 O.L.R. 434 (C.A.). “A testator has the right to treat hopeful beneficiaries unjustly”, so long as there is testamentary capacity: Tate v. Gueguegirre, 2012 ONSC 6890, at paras. 167-168.
[371] I accept and apply Cullity J.’s statement in Banton, at para. 47, that: “an unreasonable conclusion drawn from facts is not by itself sufficient to amount to a delusion that will give rise to testamentary incapacity”. The expression of this principle is based on the Supreme Court’s statement in Skinner, at p. 60: “It is not the law that anyone who entertains wrong-headed notions, capricious whims, or absurd idiosyncrasies cannot make a will”.
[372] I am satisfied that Gertrude did not suffer from delusions that influenced her decisions in wealth distribution. I conclude that James has discharged his burden of establishing that Gertrude had testamentary capacity at the time that she executed the May 2013 Will and throughout the period from August 2013 to September 2014.
XII. WAS GERTRUDE SUBJECT TO UNDUE INFLUENCE?
[373] The next step in my analysis is to determine whether Gertrude was subject to undue influence exerted by James when she executed her Will in May 2013 and when she executed the Estate Planning Documents, the Lifetime Gift Documents and the 2014 Will and its Codicil in the period from August 2013 to January 2014.
A. The Doctrine of Undue Influence
[374] The doctrine of undue influence was developed “not to save people from the consequences of their own folly but to save them from being victimized by other people”: Geffen, at p. 368, per Wilson J. citing Allcard v. Skinner (1887), 36 Ch. D. 145 (E.W. C.A.), at pp. 182-183. The doctrine of undue influence will intervene and set aside arrangements when the testator or gift giver’s volition is dominated by another person, with the result that the person really did not express his or her mind: Geffen, at p. 377; Craig v. Lamoureux (1919), 1919 CanLII 416 (UK JCPC), 50 D.L.R. 10 (P.C.), at p. 15.
[375] The principles of undue influence apply differently to testamentary dispositions than to inter vivos gifts.
B. The Burden of Proof
[376] In inter vivos gifts involving a relationship of influence by a donee over the donor of a gift, there is a presumption of undue influence. In Geffen, at p. 370, Wilson J. stated that the gift-giving by a parent to a child is one such relationship in which undue influence is presumed. The Supreme Court explained, at p. 379, that once the presumption is established, the onus moves to the recipient of the gift to rebut the presumption.
[377] Testamentary dispositions are different. In the case of a testamentary disposition, the burden of proof is on the party challenging the testamentary disposition to demonstrate that it was the product of undue influence: Craig, at p. 14; Banton, at para. 61. Even the finding of suspicious circumstances surrounding the execution of a testamentary disposition does not shift the burden to the propounder of the document to disprove undue influence: Vout, applied in Keljanovic, at para. 62; Banton, at para. 61.
[378] The reason for the presumption of undue influence in inter vivos gifts is that these gifts risk the impoverishment of the gift-giver while they are living and in need of material possessions for their support and well-being. This was explained by the Privy Council in Craig, at p. 14-15: “…a will, which merely regulates succession after death, is very different from a gift inter vivos, which strips the donor of his property during his lifetime.” I am guided by the statement of Wilson J., in Geffen, at p. 376, that the process leading to gifting must be subject to judicial scrutiny “because there is something so completely repugnant about the judicial enforcement of coerced or fraudulently induced generosity.”
[379] The distinction between the differing application of the principles of undue influence in inter vivos gifts as opposed to testamentary dispositions was recently illustrated by the Court of Appeal in Seguin. There, three children challenged their father’s will which named his common law spouse as principal beneficiary, and also challenged an inter vivos transfer to her of an interest as joint tenant in his house. The Court of Appeal outlined the distinction as follows, at paras. 10-11:
The rebuttable presumption of undue influence arises only in the context of inter vivos transactions that take place during the grantor’s lifetime. It arises from particular relationships when the validity of inter vivos dispositions or transactions is in issue; once the presumption is established, the onus shifts to the transferee to rebut the presumption: [citing Banton, at paras. 59-61].
In the case of wills, it is testamentary undue influence, amounting to outright and overpowering coercion of the testator, which must be considered. The party attacking the will bears the onus of proving undue influence on a balance of probabilities: [citing Vout, at para. 21; see also Neuberger v. York, 2016 ONCA 191, 129 O.R. (3d) 721, at paras. 77-78].
[380] I will summarize the principles pertinent to my analysis.
C. Principles Pertaining to Undue Influence
[381] A testamentary disposition will only be invalidated on the basis of undue influence when the person challenging the document establishes, on a balance of probabilities, “that the influence imposed by some other person on the deceased was so great and overpowering that the document reflects the will of the former and not of the deceased”: Banton, at para. 89. In such circumstances, the testamentary disposition does not reflect the intentions of the person who made the testamentary disposition but rather the wishes of the person exerting the undue influence.
[382] As the Court of Appeal stated in Seguin, at para. 11, testamentary undue influence consists of “outright and overpowering coercion of the testator”. In Sample Estate, Re, 1955 CanLII 233 (SK CA), [1955] 3 D.L.R. 199 (S.C.C.), at p. 210, Chief Justice Martin explained that coercion in testamentary undue influence is a “pressure if exerted so as to overpower the volition without convincing the judgment” of the testator. I found particularly instructive the statement of the Privy Counsel in Craig, at p. 15, that undue influence is established when “the execution of a paper pretending to express a testator’s mind … really does not express his mind, but something else which he really did not mean”. Cullity J. applied this concept in Banton, at paras. 59-60, when he stated that undue influence is present when a Court finds that the testator or gift giver “simply delegated the will-making power to the other person”.
[383] In cases of inter vivos gifts, the donee can rebut the presumption of undue influence by establishing that there was no actual undue influence: Keljanovic, at para. 63. In Geffen, at p. 379, Wilson J. stated that “influence” constitutes the domination of the will of another person, including through manipulation:
It seems to me rather that when one speaks of “influence” one is really referring to the ability of one person to dominate the will of another, whether through manipulation, coercion or outright but subtle abuse of power. … To dominate the will of another simply means to exercise a persuasive influence over him or her. [Emphasis added]
[384] To assess whether actual undue influence has been established, I will look at all of the circumstances surrounding the execution of the May 2013 Will and its related amendment to the Alter Ego Trust, the Estate Planning Documents, the Lifetime Gift Documents and the 2014 Wil and Codicil, to determine whether Gertrude had a “sufficiently independent operating mind” to withstand competing influences and act on her own free volition. The Supreme Court stated that this necessitated judicial scrutiny of “the process leading up to the gifting”: Geffen, at p. 376.
D. Indicators of Undue Influence
[385] An assessment of undue influence does not require that the Court identify specific coercion at the time that the testamentary document was executed or the inter vivos gift provided. Rather, it is sufficient that the surrounding circumstances show undue influence. In conducting this assessment, Courts have identified indicators of undue influence. In Gironda, at para. 77, Penny J. identified six indicators of undue influence:
Indications of the potential for undue influence include where the testator is dependent on the beneficiary for emotional and physical needs, where the testator is socially isolated, where the testator has experienced recent family conflict, where the testator has experienced recent bereavement, where the testator has made a new will not consistent with prior wills, and where the testator has made testamentary changes simultaneously with changes to other legal documents such as powers of attorney.
[386] In Tate v. Gueguegirre, 2015 ONSC 844 (Div. Ct.), at para. 9, Corbett J. applied the same factors as identified by Penny J. in assessing the existence of undue influence, and added others, including: substantial pre-death transfers of wealth; using a lawyer previously unknown to the testator and chosen by the alleged influencer; the alleged influencer communicating instructions to the lawyer acting for the testator; the alleged influencer receiving a draft of the document prior to the testator.
[387] I adopt the indicators of undue influence identified by these Courts and will apply them to my analysis.
E. Analysis – Was Gertrude Subject to Undue Influence?
[388] I will begin my analysis of undue influence by clarifying that it pertains to two different times in Gertrude’s will-making: May 2013, with the execution of the May 2013 Will, and; the period from August 2013 to September 2014, when Gertrude executed the Post-August 2013 Documents.
(a) Was There Undue Influence in the Making of the May 2013 Will?
[389] I will address first whether Gertrude was subject to undue influence at the time of her execution of the May 2013 Will. I find that she was not because there was, simply, no evidence of undue influence at that time. I will explain the reasons for this determination.
[390] In May 2013, James was as uncertain about the status of his prospective inheritance as was Joan. There is no evidence that he or Joan were prompting Gertrude to change the equal distribution provided for by the 2008 Will. I accept Mr. Weir’s testimony, supported by his file and Mr. McCarter’s file, that the Gertrude’s impetus to change her 2008 Will came entirely and directly, and indeed persistently, from Gertrude. Mr. Weir and Mr. McCarter’s files disclosed no evidence that James knew about Gertrude’s contemplated change in her 2008 Will until after the May 2013 Will was executed.
[391] I accept Mr. Weir’s testimony, reliably supported by his careful handwritten note made contemporaneous with the events of May 28, 2013, that he asked Gertrude if it was James’ idea for her to make the change to her Will, and that Gertrude responded that it was not. She stated that while James knew of her intention to change her Will, “it was her decision alone”.
[392] Ms. Woynarski’s evidence corroborates Mr. Weir’s assessment that there was no undue influence in May 2013. Ms. Woynarski’s template for her capacity assessment recorded Gertrude’s response to the question of whether anyone had influenced her decision to change her Will: “My own decision – definitely”. I accept this assessment of undue influence made by Ms. Woynarski.
[393] As the party challenging the May 2013 Will, Joan had the burden of demonstrating that the May 2013 Will was the product of undue influence: Craig, at paras, 10-11. She did not do so. I conclude that Gertrude was not subject to undue influence at the time that she executed the May 2013 Will. I find that the unequal distribution of her wealth to her children that Gertrude provided for in her May 2013 Will, and in the related 2013 Second Amending Deed to the Alter Ego Trust, was a free and independent expression of her will and intention.
(b) Was Gertrude Subject to Undue Influence in the Period from August 2013 to September 2014?
[394] I will analyse whether Gertrude was subject to undue influence at the time of her execution of the Post-August 2013 Documents by using the indicators of undue influence identified in Gironda, at para. 77, and in Tate, at para. 9.
(i) Had the Testator Experienced Recent Family Conflict?
[395] Gertrude was clearly estranged from Joan by August 2013. In 2013, Joan did not visit Gertrude regularly until April 2013, and then saw her on a few occasions until July, throughout in circumstances fraught with misunderstanding, accusation, anger, and resentment. After July 2013, Joan had not engaged with Gertrude, at all.
[396] Although Gertrude’s relationship with Joan had been tense, I find that Gertrude was in conflict with Joan leading to August 2013, and thereafter did not see her again until March 2014. On these findings, I conclude that Gertrude had experienced family conflict at the time of execution of the Post-August 2013 Documents.
(ii) Was the Testator Socially Isolated?
[397] The evidence showed that Gertrude never integrated socially at Columbia Forest. Her conflict with the staff and with Dr. Kennel was well-established. There was no evidence of friends, Joan became estranged, and James was distant. Apart from her children, the only constant contacts that Gertrude had were Monsignor Sheridan who, beginning in 2009, visited Gertrude every other month to provide spiritual guidance and faith-based support, Mr. Ewald who from 2007 addressed Gertrude’s investment and stock- trading requirements, and Mr. McCarter, who supported Gertrude in her legal needs.
[398] I find that Gertrude was socially isolated in August 2013. More importantly, when James retained his own lawyers, Mr. Flak and Mr. Corbin, and then replaced Mr. McCarter with a lawyer of his choosing, Ms. Agnew, and replaced Mr. Ewald with a financial advisor of his choosing, Ms. Shanker, he removed from Gertrude the only consistent and trusted support advisors that she was accustomed to.
[399] James’ explanation for replacing Gertrude’s long-standing advisors was unpersuasive. Mr. McCarter was concerned that Gertrude was coming under James’ undue influence and stated that he could not act for Gertrude under James’ direction. Mr. Ewald was replaced because he would not facilitate, without assessment, the transfer of a 91-year old’s life savings to a joint account with one of her two children in circumstances in which the client’s capacity had been placed in issue. Both were impediments in the path to implementation of the Investment Account Transfer Plan.
[400] I find that Gertrude’s isolation increased after August 2013 as her long-standing support base of advisors had been replaced by substitutes selected and instructed by James or his lawyers. I conclude that Gertrude was socially isolated from anyone except those within James’ family and circle of advisors in the period after August 2013.
(iii) Did the Testator Make New Testamentary Dispositions Inconsistent with Previous Wills?
[401] The August 2013 Investment Distribution Agreement enacted three concepts that Gertrude had not included in her May 2013 Will, executed mere months earlier: the Vanishing Inheritance Concept; the Asset Transfer Concept, and; the Loss of Control in Wealth Distribution. These three concepts had never been raised by Gertrude with Messrs. McCarter and Weir and are not evident in any discussions by Gertrude with others or amongst her handwritten notes. In fact, these concepts were completely opposite to the principles in will-making that Gertrude had valued for a lifetime.
[402] Before the August 2013 Investment Distribution Agreement, Gertrude had never mentioned the possibility that one of her children would be disinherited. I saw no evidence that Gertrude had ever considered the possibility that she would give Joan nothing if she should do what she had already done for a lifetime: challenge Gertrude. James testified that disinheriting Joan was consistent with Gertrude’s life-defining philosophy: that those who treated her well would be rewarded and those who treated her poorly would be punished. But even if I were to accept that Gertrude had the degree of spitefulness urged upon me by this submission, there was no evidence that she had ever previously considered completely disinheriting one of her children.
[403] I find that the Asset Transfer Concept was an aberration to all that Gertrude had stood for. Gertrude was independent in the control of her assets and proudly carried this mantle alone. This was the clear evidence by all, including Mr. Ewald. I do not accept that Gertrude would willingly and knowingly have transferred the TD Investment Account to a joint account with James and conferred to him a right to the account on her death and outside her Will. I accept, instead, that Gertrude proceeded on the understanding, to death, that her investment account, now the BMO Investment Account, would be distributed in accordance with her Will, as is evident from the wording of the 2014 Will and its Codicil.
[404] And last, Gertrude’s delegation to James of the decision of whether to provide an inheritance to Joan after Gertrude’s death (“in his absolute discretion”) was inconsistent with her lifelong control over the distribution of her assets on her death. This was certainly opposite to Gertrude’s clear statement to James in her letter of January 27, 2005: “I am the matriarch of the Rellinger family. I am in charge and nobody tells me what to do with my property or money”.
[405] I conclude that Gertrude made new testamentary dispositions after August 2013 that were inconsistent with the principles that informed her life-long estate planning to that date.
(iv) Did the Testator Make Changes to Testamentary Dispositions Simultaneously with Changes to Other Legal Documents?
[406] Gertrude not only made dramatic changes to her testamentary dispositions through the August 2013 Investment Distribution Agreement, but then was made to repeat them, again and again. The Vanishing Inheritance Concept first contained in this August 2013 Investment Distribution Agreement was repeated in the 2013 Use of Funds Agreement and in the October 2013 Fund Disposition Agreement. The Asset Transfer Concept, first contained in the August 2013 Investment Distribution Agreement was repeated in the 2013 Sale of Right of Survivorship, the 2013 Fund Disposition Agreement, and in the 2013 Joint Account Agreement. The Loss of Control in Wealth Distribution, first provided in the August 2013 Investment Distribution Agreement, was repeated in October 2013 Fund Disposition Agreement, the 2014 Use of Funds Agreement, and the 2014 Gift of Indebtedness Agreement. And last, all these repetitive documents were re-affirmed in the 2014 Ratification Declaration.
[407] These concepts were not the only to be repeated. The 2014 Gift of Indebtedness Agreement and the 2014 Deed of Gift both gifted to James the forgiveness of any loans by Gertrude to her children. The 2014 Intention Declaration and the 2014 Wish Declaration are substantively identical.
[408] There is a thin line between repetition of concepts being affirmation of a testator’s intention and repetitious agreements being evidence of undue influence. Here, my assessment that the repetition constitutes the latter and not the former is supported by analysis of the remarkable speed and frequency by which James mobilized the changes to Gertrude’s testamentary dispositions, many at times when Gertrude was about to be admitted to hospital or recently discharged.
[409] I find that the number of changes made by Gertrude the documents executed in the period from August 2013 to September 2014 pertaining to the distribution of her wealth, the speed at which they were done, the repetition of similar concepts through complicated documents totalling 19 in 13 months and the presentation of so many of them to Gertrude while frail are, on the evidence presented in this case, factors that are suggestive of undue influence.
(v) Were the Changes Made in the Testamentary Dispositions made Using a Lawyer Previously Unknown to the Testator?
[410] All of the steps taken by Gertrude in the Post-August 2013 Documents were done with a lawyer previously unknown to her. Gertrude’s long-standing lawyer, Mr. McCarter, had been replaced.
(vi) Was the New Lawyer Chosen and Retained by the Alleged Influencer?
[411] As I have explained, all the lawyers and professionals who interacted with Gertrude after August 2013 were chosen and retained by James, directly or with his lawyer, Mr. Flak. This includes Mr. Corbin, Mr. Manning, Ms. Shanker, and Dr. Yiu. I specifically find that Ms. Agnew, who was the only lawyer retained to advise Gertrude, was chosen by James or his lawyer and was not identified and selected by Gertrude.
(vii) Did the Alleged Influencer Communicate Instructions to the Lawyer Acting for the Testator?
[412] James’ lawyer briefed Ms. Agnew on the estate planning issues affecting Gertrude. Ms. Agnew testified that she was provided with documents by Mr. Flak prior to her first meeting with Gertrude in September 2013 and was provided with the Corbin Memorandum prior to her meeting with Gertrude on October 2, 2013. James’ lawyer, Mr. Flak, provided direction to Ms. Agnew concerning the Estate Planning Documents that were to be presented to Gertrude further to the Investment Account Transfer Plan that had been constructed by James’ lawyer, Mr. Corbin.
(viii) Did the Alleged Influencer Receive a Draft of the Document Prior to the Testator?
[413] The evidence of James, Mr. Corbin, Ms. Agnew and Dr. Yiu was all consistent, and I accept, that apart from the 2014 Will and its Codicil, all the other Estate Planning Documents and Lifetime Gift Documents were prepared by James’ lawyers: either Mr. Flak or Mr. Corbin. I do not accept that Gertrude requested that the August 2013 Investment Distribution Agreement or the Sale of the Right of Survivorship be prepared on her behalf and find that they were prepared by James’ lawyers on James’ instructions.
[414] The meetings that Ms. Agnew and Dr. Yiu conducted with Gertrude were uniformly organized by James or his lawyers: not by Gertrude. The documents that were presented to Gertrude at these meetings were, apart from the 2014 Will and its Codicil, prepared by James’ lawyers and provided to Ms. Agnew. There is no evidence that any of the documents were modified in a substantive way to reflect changes sought by Gertrude.
(ix) Did the Testator Make Substantial Pre-Death Transfers of Wealth to the Alleged Influencer?
[415] Joan tendered Ms. Lindsay Campbell as an expert in forensic accounting, without objection by James as to her qualifications. Ms. Lindsay Campbell has been a Chartered Accountant since 2004 and a Chartered Business Valuator since 2011. In 2014, she was certified in Financial Forensics by the American Institute of Certified Public Accountants. Further to my gatekeeping role, I am satisfied that Ms. Campbell’s evidence is admissible on issues of forensic accounting.
[416] Ms. Campbell testified that she was retained to review all the monetary transfers that were made from accounts held by Gertrude in the period from September 2013 to Gertrude’s death on April 22, 2016. This review showed that the amount of $2,524,318 was paid to James during this time period, and the sum of $1,800,650 was paid for legal and professional fees. After further adjustments to reflect additional materials and information provided by James, Ms. Campbell concluded the sum of $3,62