In my practice, I have been engaged on valuation matters which, on occasion despite the efforts of all those involved, go to trial to have a trial judge settle for the parties. Most trials are expensive and the actual outcome is not always certain, no matter how strong one side of the matter or case might be. It has been my experience that even if one happens to be on the “winning” side or appears to have won more than lost, the costs of litigation cannot be fully recovered for one reason or another.

In a recent decision of the Ontario Court Seguin v. Pearson, 2018 ONCA 355, it appears that the non-recoverability of litigation costs is extended to estate litigation, even if one appears to win the case, sort of…

This was a Court of Appeal case in which Ms. Seguin asked the Court of Appeal to set aside the dismissal of her action to invalidate her father’s two most recent wills and to set aside an inter vivos transfer of his house into joint tenancy with Ms. Pearson. Ms. Seguin alleged that her father’s actions were the product of undue influence.

The Court of Appeal did agree that the trial judge erred in his articulation of the test for undue influence applicable to testamentary gifts. More specifically, the Court pointed out the trial judge erroneously applied the test for undue influence for inter vivos transfers to testamentary gifts.  The test for undue influence for testamentary gifts involves a determination of outright and overpowering coercion in making the gift.

Nevertheless, while the Court of Appeal agreed with Ms. Seguin on points of law, it determined the application of the appropriate test for undue influence would not have changed the trial judge’s assessment of the fact evidence. There was no substantive evidence of undue influence, in the trial judge’s determination and the Court of Appeal found no legal reason to reverse the trial judge’s determination.

In addition, Ms. Seguin sought leave to appeal the trial judge’s determination of costs, arguing that the trial judge erred in failing to order that all of the appellant’s trial costs be paid from her father’s estate. The Court of Appeal disagreed with Ms. Seguin. The Court of Appeal agreed with the trial judge that he had the discretion to order the payment of all he appellant’s costs from her father’s estate. The trial judge determined that it would be unfair to do so. Ms. Seguin was entirely unsuccessful at trial and payment of her costs from the estate would effectively leave Ms. Pearson with nothing. The Court of Appeal saw no reason to disagree with the trial judge’s discretion in this regard.

Happy Reading.