The Tests For Undue Influence For Testamentary Gifts And Inter Vivos Transfers

Background

In Seguin v. Pearson, 2018 ONCA 355, the appellant appealed an Ontario Superior Court of Justice decision in which the trial judge dismissed her action to invalidate her father's two most recent wills, under which the respondent is the principal beneficiary, and to set aside an inter vivos transfer of his house into joint tenancy with the respondent.

Mr. Paterson, the testator and father of the appellant, had three daughters. Mr. Paterson met the respondent, lived together in a common law relationship, separated and then reconciled years later. At the time of Mr. Paterson's death, the respondent was his common law spouse. Mr. Paterson changed his will under which the respondent was the residual beneficiary of all his property after specific bequests to his three daughters.

Specifically, the appellant argued that the trial judge erred in finding that the respondent had not exercised undue influence over her father. The appellant submitted that the relationship between her father and the respondent gave rise to a presumption of undue influence that the respondent failed to rebut. Finally, the appellant argued that the trial judge failed to consider some evidence and misapprehended other relevant evidence.

Applicable Tests for Undue Influence

In Ontario (and formerly in British Columbia), the applicable test for undue influence applicable to testamentary gifts is that found in Vout v. Hay, [1995] 2 S.C.R. 876 (S.C.C.) at paras. 77-78:

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 providing undue influence on a balance of probabilities.

As discussed below, British Columbia legislation has changed the onus in certain circumstances.

The applicable test for undue influence applicable to inter vivos transfers, which are gifts made to persons while they are alive, is that found in Banton v. Banton (1998), 164 D.L.R. (4th) 176 (Ont. Gen. Div.) at p. 209:

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.

The Ontario Court of Appeal Findings

The Court of Appeal found that the trial judge...