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The Court of Appeal’s comments on capacity assessments and undue influence

Vanier v. Vanier1

The Court of Appeal for Ontario’s decision in Vanier is a worthwhile read for lawyers who are dealing with the question of undue influence in the context of a power of attorney dispute. Many interesting issues were addressed including the appropriate test for undue influence, the onus of proof, and the applicability of the doctrine of suspicious circumstances.2 This blog will focus on one narrow aspect of the case – the request of the appellants to censure the practice of seeking expert evidence from capacity assessors to provide opinion evidence on undue influence.3

In this case, Rita was 90 years old. In September 2011, Rita designated her daughter Patricia as her attorney for property. There were allegations that Patricia diverted monies from her mother’s account. That led to litigation which was ultimately settled. Patricia agreed to pay her mother $300,000 and Rita signed a new power of attorney in 2013 where she appointed her two sons as attorneys for property jointly and severally. Unfortunately, the two sons did not trust one another and could not work together.

Since the brothers did not trust one another, Raymond wanted to prevent Pierre from having unilateral access to their mother’s money. First, there was the $300,000 owed to Rita from her litigation with her daughter Patricia. Raymond, in his capacity as attorney for property, told Patricia’s lawyer not to pay the money to Rita. The bulk of the balance of Rita’s money was in a company of which Rita and her two sons were directors. Given the family’s acrimonious history the bank required all three directors to sign off to unfreeze the accounts. Raymond’s refusal to sign off and unilateral action with the settlement funds left Rita unable to pay her bills. Rita was desperate so she signed a new power of attorney in 2015 appointing only Pierre in the hopes of Pierre getting Patricia’s lawyer to release the settlement funds. Rita and Pierre held a shareholders meeting and by a 2-1 vote removed Raymond as a director. In response, Raymond arranged for Rita to undergo a capacity assessment. The capacity assessor concluded that Rita had capacity to execute and revoke a power of attorney for property, but that she was unduly influenced to do so. The assessor stated:4

“It is my opinion that undue influence was a factor in [Rita’s] change of Power of Attorney for Property and Personal Care, and that [Rita] would not have done these changes on her own or if properly informed as to what was actually the concern. I am of the opinion that [Rita’s] distress is so acute, secondary to her mental status, that this had made her extremely vulnerable, and has influenced and guided her signature of any legal documents in the past months.”

In paragraph 30 of the Court of Appeal’s decision, the court stated:

“The motion judge also held that the part of the capacity assessment to the effect that Rita had been the subject of undue influence was inadmissible and unreliable – it was beyond the scope of the assessor’s role, and was based, for the most part, on double hearsay.”

On appeal Raymond had argued that the motions judge erred by not admitting the full evidence of the assessor. Rita argued not only was the judge correct in excluding the assessor’s opinion on undue influence, but that the court ought to censure the practice of seeking an assessor’s opinion on undue influence.5

Rita’s counsel made several strong points in support of her positon. I point them out as a guideline to lawyers litigating a case involving the allegation of undue influence and assessors who are asked to comment on undue influence.

Section 78(2) of the Substitute Decisions Act, 1992, S.O. 1992, c. 306

The assessor’s opinion was vulnerable to attack because the law provides that the assessor shall not perform an assessment without the permission of the person being examined. To the end, the assessor must tell the patient the purpose of the assessment, the significance and effect of a finding of incapacity, and that the patient has a right to refuse to be assessed. In this instance Rita was not told she was being assessed with respect to whether she was unduly influenced. This opened the door for Rita to say that even if the evidence would otherwise be admissible, the failure of the assessor to comply with her obligations under the SDA rendered the evidence inadmissible. The Court of Appeal found that the opinion on undue influence was unreliable and inadmissible. It is unclear what impact, if any, the failure to comply with the s. 78(2) of SDA had on the Court of Appeal’s decision.

The take away from this segment of the case seems clear. It behooves an assessor to pre-empt this sort of a challenge to the assessment by strictly adhering to the statutory directives set out in s. 78 of the SDA.

Cobbler – ply thy trade

Rita argued that the assessor did not understand the law on undue influence nor did she have the authority to draw conclusions on that issue. This reminds me of some advice I often received from Dr. Kenneth Shulman.

Dr. Shulman 7 is an authority on retrospective capacity assessments in the context of will challenges. He often offers expert testimony in these cases, publishes articles on the topic and is often asked to speak at Continuing Legal Educational events at the Law Society of Ontario. When discussing the role doctors or assessors play in this process he often repeats the mantra “cobbler – ply thy trade”. Essentially, Dr. Shulman cautions that assessors can provide opinion evidence on the medical evidence – not legal conclusions. In the context of undue influence, at most they can speak to the vulnerability of the patient to undue influence and suggest that if the court finds the facts to be as the claimant suggests then it is likely that undue influence occurred.

Probe and Verify

One of Rita’s complaints about the assessor’s conclusions concerning undue influence is that the assessor just heard one side of the story. The assessor did not speak to Pierre, so without hearing his evidence how could she conclude that undue influence existed? It is unclear whether the failure to probe and verify was a reason why the judge found that the assessor’s conclusion was unreliable and inadmissible. But it seems likely that this apparent flaw in the assessment did not help.

I refer the reader to the seminal case of Re: Koch, 33 O.R. (3d) 485, [1997] O.J. No. 1487. Let’s review what Mr. Justice Quinn stated in regard to the necessity of the assessor to probe and verify.

“In my view, it was not sufficient for Talosi and Higgins merely to record information provided by the appellant and then form an opinion. In some instances the appellant should have been probed to determine the thought process by which she arrived at an answer or statement. Until her thought process is known, it is neither fair nor reasonable to impugn the appellant’s mental capacity. By not exploring the process by which the appellant arrived at her decisions, answers and statements, Talosi and Higgins have assumed, quite unfairly, the absence of logic. In doing so, they greatly impaired their ability to assess and evaluate the appellant’s cognitive abilities. In addition, of course, they adulterated their credibility.”

My takeaway from Justice Quinn’s decision in Koch and this Court of Appeal decision is that when an assessor is relying on certain facts to come to a conclusion about capacity, the weight a court gives to those conclusions is contingent on the assessor probing to verify the facts relied upon. In this case, the assessor’s failure to speak to Pierre to probe into the allegations of undue influence and verify the veracity of same made her assessment unreliable and flawed.

The Court of Appeal declined to censure the practice of assessors commenting on undue influence because the record contained no evidence about how prevalent such a practice is. However, the Court said this:

“Accordingly, other than expressing my agreement that it was inappropriate for the assessor to provide an opinion on undue influence and agreeing, as I have, that her opinion on undue influence was unreliable and inadmissible, I leave more in-depth consideration of this issue to another day, in which it is fully canvassed in the record.

Conclusion

Of equal importance is what the Court did not say. The Court of Appeal did not specifically say why it was inappropriate for the assessor to provide an opinion on undue influence. It did not specifically say why it was unreliable and inadmissible. When the court raised Rita’s complaints about the assessment it only said, “I understand Rita’s counsel’s concerns”.8

In the author’s view, had the assessor spoken to all parties and more carefully set out the basis of her opinion, she may have assuaged the court’s concerns of having sufficiently probed and verified the facts necessary to identify whether there were red flags of undue influence. Had the assessor looked to Rita’s medical situation and the facts surrounding her case she could have assessed Rita’s vulnerability to undue influence. But where there were substantial facts in dispute it is the court – not the capacity assessor- who is to make finding of facts and conclusions at law.  What should the assessor’s conclusions be? An assessor can certainly opine on the patient’s vulnerability to undue influence based on medical evidence. The assessor might go further if the evidence warrants. For example, a report might say, that given the vulnerability of the patient, if the court found that “x, y and z” occurred then it was likely that Rita would have felt coerced or her will to resist subverted – which is the underlying test for undue influence. But, for an assessor to make conclusions in fact based on evidence that a court would not consider will almost certainly limit the admissibility and value of such as assessment.9

 

Footnotes
  1.   Vanier v. Vanier, 2017 ONCA 561 (“Vanier”) which can be found online at http://bit.ly/CanLII_2017_ONCA_561
     
  2.   See paragraph 27 of Vanier which references Nguyen-Crawford v. Nguyen, 2010 ONSC 6836, 71 E.T.R. (3d) 55, which held that where there are suspicious circumstances of undue influence surrounding the execution of a power of attorney, the presumption of capacity under s. 2 of the SDA does not operate, and the burden of proof with respect to capacity shifts to the grantee of the power of attorney.
     
  3.   See paragraph 35 of Vanier.
     
  4.   See paragraph 24 of Vanier.
     
  5.   See paragraph 35 of Vanier.
     
  6.   Section 78 of the SDA provides
    (1) An assessor shall not perform an assessment of a person’s capacity if the person refuses to be assessed.
    (2) Before performing an assessment of capacity, the assessor shall explain to the person to be assessed,
    (a) the purpose of the assessment;
    (b) the significance and effect of a finding of capacity or incapacity; and
    (c) the person’s right to refuse to be assessed. 1996, c. 2, s. 54
     
  7.   Dr. Shulman has also been involved in the development of medico-legal guidelines for the assessment of testamentary capacity; for example, executing a legal will and vulnerability to undue influence. See current publications list at PubMed. Of particular interest to this topic is his article Assessment of Testamentary Capacity and Vulnerability which can be found on line at http://bit.ly/testamentary_capacity_assessment
     
  8.   See paragraph 81 of Vanier.
     
  9.  I refer the reader to s. 14 of the Evidence Act, R.S.O. 1990, c. E.23 which provides,
    14 An opposite or interested party in an action by or against one of the following persons shall not obtain a verdict, judgment or decision on the party’s own evidence, unless the evidence is corroborated by some other material evidence:
    1. A person who has been found,
    i. incapable of managing property under the Substitute Decisions Act, 1992 or under the Mental Health Act,
    ii. incapable of personal care under the Substitute Decisions Act, 1992, or
    iii. incapable by a court in Canada or elsewhere.
    2. A patient in a psychiatric facility.
    3. A person who, because of a mental disorder within the meaning of the Mental Health Act, is incapable of giving evidence. 2009, c. 33, Sched. 2, s. 32 (1).
     

Charles Wagner and Gregory Sidlofsky

The authors of this blog is Charles Wagner and Gregory Sidlofsky. Charles is a Certified Specialist in Estates and Trusts and partner at Wagner Sidlofsky LLP. Gregory is a Certified Specialist in Litigation by The Law Society of Upper Canada and partner at Wagner Sidlofsky LLP.

This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.

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