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Public Trustee v. Skoretz:
The Onward March of Undue Influence
A legal system which permits those who are physically or
economically strong to exploit the weakness and age of others
appeals to nobody. The problem is how the law can best intervene
to ensure a fair balance between unequal parties. The development
of consumer protection is a welcome recent arrival onto the legal
scene. A far older remedy, however, which is the subject matter of
the present case note, is that of undue influence.
The issue arose in the recent decision of Public Trustee v. Skoretz.1
Mr Roberts, aged 71, resided in a lodging house in circumstances of
considerable squalor. His room was kept in a filthy condition, his
personal physical condition was unkempt and unwholesome, and
he was deaf and partially blind. His income from investments in
bonds was in the region of $3,500 to $4,000 per annum. A social
worker who visited him persuaded Roberts that he should be in
a rest home. She got in touch with the defendant, who was the
operator of Kay’s Rest Home, and arranged for Roberts to enter
the home.
On September 21, 1970, the defendant brought Roberts to the
rest-home. Two days later, Roberts asked to be taken to a bank
nearby, where he arranged for transfers of his bank accounts.
He also signed a power of attorney appointing the defendant
his attorney, and told him that “he wanted [him] to have access
to the accounts and to handle the same” 2 The bank employee
explained to Roberts the effect of such an appointment.
The next day, September 24, Roberts asked the defendant to
drive him to another bank to arrange for the transfer of further
accounts. On the way, he told the defendant that he was very happy
at the rest-home and that the care there was the best he had ever
received. He said, “You and your wife are very friendly – very good
to me –
I should have been here long before this”. At the bank,
Roberts stated that he wanted the defendant “to have my money”.
When the bank employee asked what he meant, the defendant
suggested that he meant a power of attorney and Roberts agreed,
stating: “Yes, the same as yesterday”. He then told the defendant
1 [1973] 2 W.W.R. 638, 32 D.L.R. (3d) 749 (B.C.S.C.).
2 Ibid., 640 and 751.
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COMMENTS – COMMENTAIRES
“I want you to have what’s in the box”. A form was signed, enabling
the defendant to gain access to his safety deposit box.3
During the next forty-eight hours, a series of conversations oc-
curred which were not witnessed by anyone other than the plain-
tiff and defendant. During the afternoon of the 24th, the defendant
asked Roberts what was in the box. According to the defendant,
Roberts responded by pulling a deposit box key out of his pocket
and giving it to the defendant, stating: “Take it. It’s all yours … I’m
happy that you are looking after me so well. All the money I have
is yours.”4
Later that day, Roberts instructed the defendant to withdraw
the safety deposit box from the bank. The defendant complied with
this request the next day and returned with the contents of the box,
which comprised bonds having a face value of $25,000. Roberts
endorsed the bonds,5 allegedly stating: “It’s all yours. You’re giving
me good care and I’m glad to be able to give this to you as a gift.”
He also supposedly added, “All the money I have in the bank is
yours. You look after me as long as I live.” The defendant replied
that he would
The next day, September 26, Roberts fell and fractured his
hip. He was taken to hospital and never again returned to Kay’s
Rest Home. For the remaining nine months of his life, he was
“confused and disoriented and it was impossible to get any in-
formation from him”. 7 His mental condition deteriorated in March,
1971, and the plaintiff, the Public Trustee, became the statutory
committee of Roberts. The latter died on June 13, 1971.
Within one week of his client’s fall, the defendant had trans-
ferred all of Roberts’ bank accounts into his own name and had
cashed in all the bonds, realizing in all the sum of $49,160: a
princely figure for less than a week’s attendance. The defendant did
not disclose to anyone that he had received this sum of money.8
3 Ibid., 641 and 752.
4Ibid.
5 The recitation by Anderson,J. of the facts does not specifically refer to
such endorsement, but it is clear that it took place at this time, having regard
to his Lordship’s further comments: ibid., 643 and 754.
6 Ibid., 641 and 752.
7Ibid.
8 “Under these circumstances, a first-year-law student would predict that
a court’s nostrils would be quivering”, Scane, Case Comment, (1973) 1
Estates and Trusts Q. 8, 9. The same defendant would appear to have come
under judicial scrutiny in not grossly dissimilar circumstances (although the
action realted to a donatio mortis causa) in Public Trustee v. Skoretz (No. 2),
[1974] 2 W.W.R. 77 (B.C.S.C.).
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The plaintiff sued for the return of the money and securities
received by the defendant from Roberts, alleging that there had
been no gift or gifts of such assets to the defendant, and that even
if a gift had been intended, it could not prevail in the face of the
doctrine of undue influence.
Not surprisingly, the plaintiff was successful. Andersonj. held
that the allegation of a gift could not be sustained in the absence
of corroboration. The conversations at the banks, in his Lordship’s
view, were “not referable to a gift but to an agency relationship”.’
Moreover, the endorsement of the bonds was equivocal, being
“equally referable to the relationship of principal and agent as it is
to the relationship of donor and donee”. 0 With respect to the
defendant’s evidence, his Lordship stated that while he was not
prepared to say, that he entirely disbelieved the defendant, he was
not sufficiently convinced of the truth of his story as to accept his
evidence without corroboration. 1
Furthermore, having considered numerous facts of the case, 2
his Lordship concluded that:
[t]he surrounding circumstances are such that a clear inference can and
should be drawn from the facts that the relationship between the parties
was such that the defendant did, on the balance of probabilities, exert a
“dominating influence” over the deceased.13
His Lordship was satisfied that such an inference could be drawn
even in the absence of any evidence of express undue influence.
The defendant relied heavily 4 on the decision of Shaw v. Jan-
cowski.’5 This case involved an older man living in a “deplorable
condition””‘ befriended by the defendant, a practical nurse. This
relationship build up over four years, during which the old man
) Supra, f.n.1, 643 and 754.
10 Ibid.
11 Ibid.
‘2 That the deceased was almost blind, very deaf, had no independent
advice, was physically dependent on the defendant and had no logical reason
for making a gift of such a size to the defendant; that the “gifts” had been
made with undue haste, without full discussion between the parties; that the
“gifts” were so large, and that the income from the fund far exceeded the
cost of care (which was $175 per month); that the defendant had already
become the agent of the deceased when the “gifts” were made and that the
radical change of circumstances of the deceased may have caused him to
believe that he owed a debt of gratitude to the defendant: ibid., 6434 and
754-5.
13 Ibid., 644 and 755.
14 Ibid.
15 (1942), 61 B.C.R. 148 (B.C.S.C., Robertson,.).
16 Ibid., 151.
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COMMENTS – COMMENTAIRES
provided the nurse with presents of cash, bonds and a car, and also
financed her acquisition of a boarding-house where the old man
stayed for over a year, until his death. The allegation of undue
influence in Shaw v. Jancowski failed, since no dominating influence
was proved. Robertson;j. considered that “the only relationship
established was one of affection and of the high regard in which
Johnston held the defendant”. 17
Shaw v. Jancowski was distinguished by Anderson,J. in Public
Trustee v. Skoretz on the ground that in the former case there had
been convincing evidence of the donor’s mental capacity, and that
the gifts had been made after ” ‘full, free and informed thought’ .
With all due respect to his Lordship, the distinction is not so clearcut
as to allow Shaw v. Jancowski to be dismissed in a sentence. There
was no evidence in Public Trustee v. Skoretz of mental weakness
prior to Roberts’ fall; indeed, his conversation in the bank on
September 24 confirms his grasp of financial matters. Further,
the donor in Shaw’s case was 94, over twenty years older than
Roberts. Moreover, the continuance of a relationship for over
four years surely provides more of an opportunity to create
and consolidate a “dominating influence” than does four days,
which is all the time that had passed in Public Trustee v. Skoretz
before Roberts had fully displayed his munificence.
The most important aspect of Public Trustee v. Skoretz, however,
lies in the finding by Anderson,J. that the relationship between the
defendant and Roberts fell within the “protected classes” of
relationships which, if proved, give rise without any further evidence
to a presumption of undue influence. 19 Such protected classes re-
present the classic fiduciary relationships of parent and child,
solicitor- and client, doctor and patient, trustee and beneficiary,
17 Ibid., 158. See also Re Estate of Henry Daniel Cleveland; Dixon v. Brand
(1940), 15 M.P.R. 368 (N.B.S.C. Harrison,J.), “[tihe facts [of which] are very
similar to the facts in this case”, per Robertson,J. supra, f.n.15, 159. The court
also rejected the plaintiff’s claim.
18Supra, f.n.1, 644 and 755, adopting this criterion from Lord Evershed,
M.R., in Zamet v. Hyman, [1961] 1 W.L.R. 1442, 1444, [1961] 3 All E.R. 933,
936 (Eng. CA.).
19See G. Keeton and L. Sheridan, Equity (1969), 338 et seq.; L. Sheridan,
Fraud in Equity (1957), 71 et seq.; McCann, The Setting Aside of Deeds and
Gifts Inter Vivos Obtained by the Exercise of Undue Influence, (1967) 2 Ir.
Jur. (n.s:) 205, 209 et seq.; Sealy, Fiduciary Relationships, (1962) Camb.L.J. 69,
78-9; Winder, Undue Influence and Fiduciary Relationship, (1940) 4 Cony. and
Property L. (n.s.) 274; R. Goff and G. Jones, The Law of Restitution (1966),
164-7.
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guardian and ward, fiancd and fiancde and spiritual adviser and
layman. Anderson,J. stated:
The categories of “protected classes” are not closed. The law does not
stand still but moves in accord with social change. I am quite unable to
accept the contention that the relationship between rest-home operators
and elderly patients is different (to any substantial degree) from the
relationship between parent and child, solicitor and client, etc. In fact,
elderly patients in rest-homes probably need more protection than the
above “protected classes”. As a matter of policy, the Courts should
protect these elderly and friendless persons by bringing them within the
“protected classes”. While I do not suggest that the defendant was
guilty of fraud or anything of that nature, it is not difficult to imagine
how an unscrupulous operator could garner unto himself the assets of
many of his patients.2′
It is very difficult to cavil with a judicial policy which is directed
at improving the lot of “the elderly and friendless”. One must,
however, bear in mind that legal justice should be applied on a
distributive basis, and that a potential injustice may be inflicted on
recipients of gifts from the elderly simply out of indulgence to the
general plight of the donor, which may well be irrelevant to the
central issue. True, nobody would want to see an elderly and help-
less person denuded of his property by an avaricious rest-home
proprietor, but the law prior to Public Trustee v. Skoretz did not
encourage such a possibility. For such a transaction to be set aside,
all that was required was that the donor be able establish a
“dominating influence”,
and as Public Trustee v. Skoretz itself
shows, the evidence necessary to establish such an influence may be
entirely inferential. There would seem to be no need to shift the
burden of proof onto the rest-home proprietor: there have not been
scores of decisions permitting such persons to retain their ill-gotten
gains. In those cases in which the defendant has been successful,
20 ut not husband and wife: Bank of Montreal v. Stuart, [1911] A.C. 120
(Privy Council, ex Ont.); Thomson v. Thomson (1926), 59 O.L.R. 661 (App.
Div.). In certain factual situations, of course, the presumption may arise
easily: Mundinger v. Mundinger (1968), 3 D.L.R. (3d) 338, [1969] 1 O.R. 606
(C.A.).
2lSupra, f.n.1, 648 and 758.
22See, for example, Shaw v. Jancowski and cases cited therein, supra, f.n.15.
See also Winder, Undue Influence and Coercion, (1939) 3 M.L.R. 97, 103.
23 E.g. Shaw v. Jancowski, supra, f.n.15; Re Estate of Cleveland; Dixon v.
Brand, supra, Ln.17. See Papesch v. D’Ancey (1969), 67 W.W.R. 274 (Alta.
S.C., Sinclair,J.) where a gift to the husband of an employee of a nursing
home by an elderly patient was set aside not because the plaintiff came
within one of the “protected classes” but because all the circumstances gave
rise to the presumption of undue influence, which the defendant, by declining
to call any evidence on his behalf, failed to rebut. A recent English decision,
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COMMENTS – COMMENTAIRES
it would have been an injustice to have placed the onus on him to
establish no influence, since the circumstances clearly negated any
such dominance on the part of the defendant. The fact that the
defendant would probably have succeeded in any event does not
justify the general imposition upon him of the duty to rebut.
Further, if one follows to its logical conclusion the path of
Anderson,J. when he states that “[t]he categories of ‘protected
classes’ are not closed”, 24 one has opened the floodgates and no
individual relationship can be safe from becoming such a category.
Such has been the progress of negligence law, except that no onus
shift takes place in the latter case.
Further criticism may be levelled against Anderson,.’s findings
with regard to the defendant. He stated: “In the result I find that
the defendant was a trustee of the moneys and the bonds”,?5 What
a plaintiff in an action based on undue influence is seeking is that
the transaction should be set aside, not that the defendant should
be held to be a trustee. However, this finding could have given rise
to an interesting result. Until recently, the distinction between Ame-
rican and Anglo-Canadian law in the context of constructive trusts
was that in the United States the constructive trust was conceived
as a broad remedial device, 26 whereas in England and Canada its
remedial aspects were secondary to the finding of a fiduciary re-
lationship.27 This rather unadventurous process tended to defer to
established fiduciary relationships rather than being disposed to
discover new ones. In the past three years in England, the Court of
Appeal2s and more than one member of the House of Lords29 have
In Re C.M.G., [1970] Ch. 574 (Ct. of Protection, Stamp,J.) establishes that the
“protected classes” include the relationship between mental patients and
those in charge of a mental hospital. Scottish jurisprudence is able to funo.
tion quite adequately without adopting the concept of “protected classes”:
see Walker, 1 Principles of Scottish Private Law (1970), 542.
24 Supra, f.n.21.
25 Supra, f.n.1, 649 and 759.
20See Scott, Constructive Trusts, (1955)
71 L.Q.R. 39; D. Waters, The
Constructive Trust (1964), Ch. 1.
27See Maudsley, Proprietary Remedies for the Recovery of Money, (1959)
75 L.Q.R. 234, 236; Goff and Jones, supra, fan.19, 36.
28Two clear instances of such reorientation are Cooke v. Head, [1972] 2 All
E.R. 38 (Eng. C.A.) and Hussey v. Palmer, [1972] 3 All E.R. 744 (Eng. CA.);
noted in (1973) 89 L.Q.R. 2, by Ridley in (1973) 36 Mod.L.R. 436 and by Fairest
in (1973) Camb. L.J. 41.
29See Lord Diplock in Gissing v. Gissing, [1971] A.C. 886, 905, and Lord
Morris, 898. In this context, see also Lesser, The Acquisition of Inter Vivos
Matrimonial Property Rights in English Law: A Doctrinal Melting Pot, (1973)
23 U. of T. L.i. 148, 189-191, 202-203.
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brought about a reorientation of their conceptual approach so that it
is not unreasonable to contend that the English and American con-
cepts of constructive trust are now cousins rather than strangers. In
Canada, the majority of the Supreme Court displayed no enthusiasm
for this change of orientation in the recent controversial decision of
Murdoch v. Murdoch,30 although Laskin,J. (as he then was) energe-
tically endorsed the American position3 1
While these developments are not directly relevant to Public
Trustee v. Skoretz, one must consider the possibility that, if the
plaintiff’s case had been presented in terms of a constructive trust
instead of, or in addition to, the question of undue influence,
Andersonj. might have listened with sympathy to argument based
on recent English developments. To this extent, it is to be regretted
that rest-home proprietors were singled out for the imposition of
a particularly onerous responsibility in Public Trustee v. Skoretz,
whereas the case might have introduced unequivocally into Canadian
jurisprudence the more general and flexible concept of unjust
enrichment through the mechanism of the constructive trust.
W. Binchy*
30 (1973), 41 D.L.R. (3d) 367.
31 His Lordship quoted with approval the classic “unjust enrichment” con-
cept, enunciated by Scott in The Law of Trusts 8th ed. (1967), 3215 and 3413.
* Assistant Professor of Law, University of Ottawa, Common Law Section.
