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GIFTS - Inter vivos - Validity of transfer - Invalidation of gift - Undue influence exerted on donor

Tuesday, June 06, 2017 @ 8:35 AM  

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Appeal by Morreale from the dismissal of her claim that an inter vivos gift her parents made to her sister Romanino was the result of undue influence. The parties were the only two children of the Ruccias. Morreale left the family home to marry when she was 20 years old. Her husband had a poor relationship with her father. Romanino lived with her parents all her life, even after her marriage in 2003. In 1995, the Ruccias executed mirror wills, providing that, on the death of the survivor, two-thirds of the Ruccias’ interest in a property on Beck Drive would go to Romanino and one-third would go to Morreale, with the residue of the estate to be shared equally between the parties. Mr. Ruccia was cared for by Romanino and her husband through his illness with cancer. He died in March 2009. Mrs. Ruccia died in October 2009. Morreale subsequently learned her parents had made an inter vivos gift of their equity in the Beck Drive property to Romanino, which had been sold. The proceeds of the sale had been used to purchase another property where the Ruccias lived with Romanino and her husband until their deaths. Only Romanino and her husband were on title to the new property. The Ruccias did not receive independent legal advice on these transactions. The judge found that while Romanino’s relationship with her parents had the capacity to create undue influence, there was no act of coercion or domination that would lead to a presumption of undue influence. She determined that even if the presumption had arisen, the presumption had been rebutted.

HELD: Appeal dismissed. While the judge erred in stating that an act of coercion or domination had to be shown to give rise to the presumption of undue influence, she did not err in finding that the presumption did not arise in the present case. The judge was entitled to find that Mr. Ruccia, not Romanino, was the dominant party in the financial transactions between the Ruccias and Romanino, and that he made the decision to give Romanino a greater share of the estate than Morreale. In making her alternative finding that the presumption of undue influence had been rebutted, the judge did not simply rely upon Mr. Ruccia’s strong personality. She was also entitled to consider his meticulousness in handling his financial affairs and the fact that he remained of sound mind throughout his life. Independent legal advice was not necessary to rebut the presumption of undue influence.

Morreale v. Romanino, [2017] O.J. No. 2257, Ontario Court of Appeal, G.R. Strathy C.J.O., E.E. Gillese and G.I. Pardu JJ.A., May 3, 2017. Digest No. TLD-June52017003