In Seguin v. Pearson, 2018 ONCA 355, the Court of Appeal for Ontario dismissed the appeal of Carol-Anne Seguin from the lower court’s dismissal of her action to invalidate the two most recent wills of her late father, Robert Geddes Paterson (the “deceased”), despite the trial judge’s error in applying the test for undue influence.
Ms. Seguin and her sisters were the children of the deceased, who died in December 2011. The deceased had left his wife and daughters in 1981. The daughters were estranged from the deceased until 2002.
Lori Dianne Pearson lived in a common law relationship with the deceased between 1995 and 2002, and from 2006 until his death. Ms. Pearson cared for the respondent until his death, and he recognized her as his common law spouse.
In his most recent will dated March 11, 2011 (the “2011 Will”), the deceased named Ms. Pearson as the residual beneficiary of his estate, after making specific bequests to his daughters. The deceased had also named Ms. Pearson the primary beneficiary of his earlier will. While he was alive, the deceased transferred his home into a joint tenancy with Ms. Pearson.
On appeal, Ms. Seguin argued that the trial judge erred in finding that Ms. Pearson had not exercised undue influence over the deceased. She claimed that the relationship between the deceased and Ms. Pearson gave rise to a presumption of undue influence, which Ms. Pearson failed to rebut.
The Court of Appeal rejected this argument, as Ms. Seguin mischaracterized the test for undue influence in the context of testamentary gifts. The rebuttable presumption of undue influence arises only in transactions that occur during the grantor’s lifetime, in the context of specific relationships between the grantor and the grantee, where the validity of the transaction is being challenged. Once the presumption is established, the onus shifts to the grantee to rebut the presumption. With respect to wills, however, the test is whether there has been testamentary undue influence which amounts to outright and overpowering coercion of the testator. The party challenging the will bears the onus of proving undue influence on a balance of probabilities.
The Court of Appeal agreed that the trial judge confused the two tests. However, the error did not affect the reasonableness of his conclusion that Ms. Pearson did not unduly influence the deceased, and that he independently decided to make the 2011 Will and transfer the house, both in favour of Ms. Pearson. Under either test, the trial judge examined all of the relevant circumstances, and made findings of fact supported by the evidence. His examination would have included the medical and lay evidence as to the deceased’s state of mind and health; the nature and length of his relationship with his children; and the instructions to his lawyers, which indicated that he carefully considered and deliberated the disposition of his property.
The Court of Appeal also declined to grant leave to Ms. Seguin to appeal the trial judge’s costs award, on the basis that he erred in ordering that only some, not all, of her trial costs should be paid out of the estate. While the trial judge had the discretion to order that all of Ms. Seguin’s costs be payable out of the estate, it was also within the trial judge’s discretion to determine that it would be unfair to do so. Ms. Seguin was entirely unsuccessful at trial, and payment of all her costs out of the estate would leave Ms. Pearson with nothing.
Seguin v. Pearson indicates that even if a trial judge applies the wrong legal test, the appellant court will nevertheless look behind the judge’s reasons and consider the findings of fact made, which if supported by the evidence, will be given deference, particularly if the findings would have supported the outcome had the correct legal test been applied. This case also serves as a cautionary tale to would-be will challengers, who should not expect that their costs will automatically be paid out of the estate, particularly if their claim fails, and payment of their costs would effectively deprive other beneficiaries of their inheritance.