The Law Relating to Undue Influence in British Columbia

Introduction

This article briefly outlines the law relating to undue influence in British Columbia. Please contact us for more information.

A distinction must be made between undue influence in transfers of property and undue influence in the making of wills. The law surrounding challenging wills in B.C. on the basis of undue influence is of concern to unhappy beneficiaries or next of kin. However, see our article on "Contesting a Will or an Estate" for more information on this issue. This article only considers undue influence as it relates to challenging transfers made by a person when they were (and still may be) alive.

When a person (often a senior) has transferred his or her property to another as the result of undue influence of that other person, the transfer may be set aside by the court but a legal action must first be commenced. Transactions can be set aside if it can be proven that the gift or transfer is the actual result of the express influence of the recipient on the transferor. However, it will be a rare case where this evidence is available.

Presumption of Undue Influence

The Courts have recognized the above noted problem of proving undue influence and therefore a presumption of undue influence is imposed when the parties are in a relationship that has the potential for influence.

There are certain classes of relationships that are "protected": solicitor and client, physician and patient, parent and child, guardian and ward, trustee and beneficiary, priest and penitent. The presumption of undue influence always arises in these situations. The courts also easily find a dominating influence, in relationships involving a care-giver and care recipient.

The presumption of undue influence may be rebutted by evidence that independent, competent legal advice was given to the transferor, and the transferor understood the nature and consequences of the act. If the presumption of undue influence cannot be rebutted, the transaction will be set aside.

Other Grounds for Relief

Depending on the specific circumstances, there are also other grounds that may apply to help recover the asset, such as: mental incapacity of the transferor at the time of the transfer, breach of a trust relationship (which may be imposed by the court), contractual remedies, unjust enrichment (where a person has benefitted without reason at the expense of the transferor) and breach of fiduciary duty (where a person, such as a power of attorney holder, takes advantage of their relationship and duty to the transferor).

What To Do

If a person or service provider suspects undue influence, it is of great assistance to the victim's case (and to help the person recall events later) if there are notes of their observations. In addition, sometimes contacting the police or the Public Trustee will result in the situation being remedied.

If anyone suspects a person has been taken advantage of, they should help the person get legal advice as soon as possible. There are steps that can be taken to preserve and protect the asset if prompt action is taken. Note that there are time limits for starting a court action to recover assets beyond which no action can be commenced. It is all the more important, therefore, to get legal advice in a timely manner.