In the recent decision in Seguin v Pearson, 2018 ONCA 355, the Ontario Court of Appeal reiterated the different tests for undue influence that apply in the inter vivos and the testamentary context.
The Issue on Appeal
In Seguin, the Deceased made a Last Will and Testament that made specific bequests to his daughters and left the residue of his Estate to his common law spouse. Prior to his death, the Deceased also transferred his house into joint tenancy with his spouse.
The Appellant, one of the Deceased’s daughters, appealed from a lower court decision dismissing her action challenging the validity of the Deceased’s Will and the inter vivos transfer of the home into joint tenancy.
On appeal, the Appellant’s principal argument was that the relationship between the Deceased and his spouse gave rise to a presumption of undue influence, and that the spouse had failed to rebut the presumption.
The Tests for Testamentary Versus Inter Vivos Undue Influence
After canvassing the evidence that had been tendered at trial by the plaintiff and the defendant, the trial judge looked to the Supreme Court of Canada’s decision in Goodman Estate v Geffen and the Privy Council’s decision in Craig v Lamoureux for the factors to be considered when assessing an allegation of undue influence. In Goodman, the Supreme Court discussed what must be established in order to trigger a presumption of undue influence.
However, on appeal, the Court of Appeal held that the Appellant had mischaracterized the test for undue influence in the testamentary context. Further, the Court of Appeal concluded that the trial judge had erred in articulating the test that is applicable to testamentary gifts.
At paragraphs 10 and 11 of its judgment, the Court of Appeal stated as follows:
“…The rebuttable presumption of undue influence arises only in the context of inter vivos transactions that take place during the grantor’s lifetime. It arises from particular relationships when the validity of inter vivos dispositions or transactions is in issue; once the presumption is established, the onus shifts to the transferee to rebut the presumption: Banton v. Banton (1998), 164 D.L.R. (4th) 176 (Ont. Gen. Div.) , at p. 209. … In the case of wills, it is testamentary undue influence, amounting to outright and overpowering coercion of the testator, which must be considered. The party attacking the will bears the onus of proving undue influence on a balance of probabilities: Vout v. Hay, [1995] 2 S.C.R. 876 (S.C.C.) , at p. 887; see also Neuberger Estate v. York, 2016 ONCA 191, 129 O.R. (3d) 721 (Ont. C.A.), at paras. 77-78.”
Although the trial judge had erred in stating the applicable test in relation to the challenge to the validity of the Deceased’s Will, the Court of Appeal held that this did not affect the reasonableness of his conclusion that the Deceased’s spouse had not unduly influenced the Deceased.
Given that the trial judge imposed the more onerous inter vivos standard of requiring the Deceased’s spouse to rebut a presumption of undue influence, the Court of Appeal concluded that the trial judge’s finding “would necessarily be the same had the trial judge applied the correct standard applicable to testamentary dispositions.”
After addressing the Appellant’s additional submissions, including her request for leave to appeal the trial judge’s determination on the issue of costs, the appeal was dismissed.
Thank you for reading,
Umair Abdul Qadir