An inter vivos gift can be attacked and set aside on a variety of grounds, some common and some rare. One of the rarer grounds is the “doctrine of unconscionable procurement.” The doctrine can be summarized as follows:
A freestanding doctrine appears to have been in use in England and in Ontario in the 1800s, falling gradually from application in the early 1900s. It involves setting aside gifts and other inter vivos wealth transfers as voidable where the maker did not understand what he or she was doing. This equitable doctrine can be referred to as the rule from Cooke v. Lamotte, or the rule against large donations without proper understanding. Here, the doctrine will be framed narrowly and referred to as the“doctrine of unconscionable procurement.” The first few paragraphs in this section provide a brief summary which is then expanded in the material that follows it.
The doctrine is predicated on the idea that it is unconscionable to allow a significant gift or other inter vivos wealth transfer to stand where the recipient was instrumental in causing it to occur and the maker did not truly appreciate what he or she was doing. It is an equitable principle. Where successfully invoked, the doctrine renders a transaction voidable. The legal onus is on the party attacking the transaction to prove that it was unconscionably procured.
Two elements must be present to trigger the doctrine:
(a) A significant benefit obtained by one person from another.
(b) An active involvement on the part of the person obtaining that benefit in procuring or arranging the transfer from the maker.
The presence of those elements has two effects. First, a presumption kicks into operation and the court will infer that the maker did not truly understand what he or she was doing in making the transfer. Second, the presence of those two elements entitles the court to consider the transaction with its moral sense awakened with a view to determining whether, based on the understanding of the maker, it would be unconscionable to let the transaction stand. Provided the transaction is characterized as unconscionable, there is authority for the idea that the conduct of the person procuring the wealth transfer need not be intentionally culpable. The transaction can be set aside without specific mala fides.
The leading case in England is Cooke v. Lamotte. The leading case in Canada is Kinsella v. Pask. The doctrine was narrowed, but not dealt a death blow by Fairchild v. Mitchell. The doctrine is largely dormant. It awaits only a plucky litigant and a fearless court to rouse it.
*John E.S. Poyser BA, LLB, TEP provides estate litigation services for clients, as well as opinion work for other lawyers, and has offices in Manitoba and Alberta (email@example.com).