Whether undue influence affects a will in New South Wales was helpfully considered in Tobin v Ezekiel; Estate of Lily Ezekiel [2011] NSWSC 81, by Brereton J.

His Honour held at [40] ( omitting citations):

“…In the law of wills, undue influence is equivalent to coercion, by actual force or threats — but not by appeals to sentiments of affection, gratitude, pity or ties of kindred, which may legitimately be pressed on a testator. Influence generally in the form of persuasion or moral pressure to favour a person by will, whatever its degree, is not invalidating in probate unless it produces a will contrary to the will of the testator … There must be an overpowering of the testator’s volition… As Sir John Nicholl said in Williams, formerly Cook v Goude and Bennett (1828) 1 Hag Ecc 577 (at 581):

The influence to vitiate an act must amount to force and coercion destroying free agency — it must not be the influence of affection and attachment — it must not be the mere desire of gratifying the wishes of another, for that would be a very strong ground in support of a testamentary act. Further, there must be proof that the act was obtained by this coercion — by importunity which could not be resisted: that it was done merely for the sake of peace, so that the motive was tantamount to force and fear.”

His Honour further held at [41] (omitting citations):

“The burden of proving undue influence is borne by those impugning the will … What must be proved is actual coercion of the mind as to produce an act contrary to the will of the testator …. It is insufficient to show power or opportunity to overbear the testator’s will; it must be shown that that power was exercised, and that it was by means of its exercise that the will was produced …”

The essence of undue influence is coercion of the will so that the testator does that which he or she does not desire to do.

It is not undue influence if the testator voluntarily succumbs to improper or immoral influences.

It must be proved that coercion has in fact happened and not that a person is merely in the position to coerce the testator.

In many cases there is not direct evidence of undue influence, but rather, inferences of it. In such cases, undue influence must be more probably than not, the true explanation for the will.  In other words, “in order to set aside the will of a person of sound mind, it is not sufficient to show that the circumstances attending its execution are consistent with the hypothesis of its having been attained by undue influence. It must be shown that they are inconsistent with a contrary hypothesis.”: Boyse v Rossborough (1856) 6 HLC 2 (at 49).

Some circumstances that might lead to an inference of undue influence include the following:

• Radical changes in an otherwise long settled testamentary intention;
• The involvement of beneficiaries in procuring a will under which they benefit, reinforced by any unwillingness by them to tell the truth about that involvement;
• A malleability of persons of old age and with dementia to influence of others, especially caregivers.

I am happy to consider whether you have a claim to challenge a will on the basis that it was affected by undue influence. 

If you are an executor named in a will, and there is an assertion that the will is bad because of undue influence, I am also happy to to advise you.

Please call me on 1300 856 434, or email me at justin@conomylegal.com to request an initial consultation.

It is essential to validity of a will that, at the time it was made, the person making it had “testamentary capacity”.

In 1870, the test was stated in Banks v Goodfellow (1870) LR 5 QB 549, [565] by Cockburn CJ as follows:

“It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties — that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which if the mind had been sound, would not have been made.”

More recently, Rich ACJ in Timbury v Coffee (1941) 66 CLR 277 at 280; 15 ALJR 159b held that the person making a will:

“must know what he is about, have sense and knowledge of what he is doing and the effect his disposition will have, knowledge of what his property was, and who those persons were that then were the objects of his bounty.”

This test has been broadly applied by the courts to the extent that they generally say that the standard of knowledge required of the person making a will, in understanding the nature and effects of their will, is wide, and operates at a general level of understanding only.

Whether the test is satisfied in a given case is often a complex enquiry of the facts and the medical evidence available.

Often, due to dementia, someone may not have the ability to be able to properly comprehend and appreciate the claims they ought to give effect to at the time of making a will late in life.  Hence, the notes of the solicitor who takes the instructions for the will are often of great significance in recording whether there has been any discussion as to these matters with the deceased, in the course of giving instruction for a will.

In Tobin v Ezekiel; Estate of Lily Ezekiel [2011] NSWSC 81, Brereton J held at [25]:

“Extreme age, or grave illness, displaces a prima facie case of testamentary capacity only if the testator’s mental capacities are shown to have been so affected as to make him or her unequal to the task of disposing of his or her estate…”

I am happy to consider whether you have a claim to challenge a will because of a lack of testamentary capacity. 

If you are an executor named in a will, and there is an assertion that the will is bad because of a lack of testamentary capacity, I am also happy to to advise you.

Please call me on 1300 431 895, or email me at justin@conomylegal.com to request an initial consultation.

In many cases where undue influence is alleged, even if it is not fully made out, the facts might be sufficiently suspicious to cast on the person alleging the will is valid an onus to remove such suspicion by clear and affirmative proof of knowledge and approval by the testator of the will.

The principle relating to suspicious circumstances was stated by a’Beckett J in In re Nickson, deceased [1916] VLR 274 at 281:

“There is one rule which has always been laid down by the Courts having to deal with wills, and that is that a person who is instrumental in the framing of a will, and who obtains a bounty by that will, is placed in a different position from other ordinary legatees, who are not called upon to substantiate the truth and honesty of the transaction as regards their legacies. It is enough in their case that the will is read over to the testatrix, and that she was of sound mind and memory and capable of comprehending it. But there is a further onus upon those who take for their own benefit after having been instrumental in preparing or obtaining a will. They have thrown upon them the onus of showing the righteousness of the transaction: Fulton v Andrews [1875] LR 7 HL 448.”

In Tobin v Ezekiel; Estate of Lily Ezekiel [2011] NSWSC 81, Brereton J considered this from [96] to [112].

In Tobin, counsel for the persons challenging will put their argument as follows:

“In this case, we submit, that if it is necessary to go further than raise a suspicion such that we must identify about what the suspicion is of, we describe it as follows — that the Will was secured by an influence which was not physically coercive (and may not even have been fraudulent in the classic sense), but which was beyond lobbying and was undue in that it had the effect by coercive conduct, of overpowering the volition of the Testatrix. Put specifically Lily was in a controlled and emotionally oppressive and abusive relationship with her son Albert, such that she would comply with his wishes to leave her Estate as he chose and contrary to the way that she had chosen in the past and would have chosen if acting of her own volition.” [96]

His Honour held at [97]:

“This raises for consideration the relationship between “knowledge and approval”, which the proponent of a will must establish (albeit, absent suspicious circumstance, aided by a presumption), and “undue influence”, a defence to be made out by an opponent.”

The proponent of a will bears the onus of establishing that the testator knew and approved the contents of the will.

Ordinarily, knowledge and approval is inferred from proof of testamentary capacity and due execution – generally, a capable testator’s due execution of a will that is rational on its face is sufficient evidence of his or her knowledge and approval of its contents: Re Hodges;; Shorter v Hodgers (1988) 14 NSWLR 698.

However, “where there are “suspicious circumstances” — typically, but no means uniquely, where a beneficiary is involved in giving instructions for the will — there is no such presumption, and the proponent must remove suspicion by affirmatively proving, “by clear and satisfactory proof”, that the testator knew and approved the contents of the will, so as to “judicially satisfy the Court that it contains the real intention of the testator”. This is a heavy onus …”: [98]

His Honour held at [101]:

“That the concept of “knowledge and approval” is concerned with the contents of the will, and that the relevant suspicion must be one that they do not accord with the testator’s intention, appears from many authoritative statements of what a proponent must prove when suspicious circumstances are raised. …”

I am happy to consider whether you have a claim to challenge a will on the grounds of suspicious circumstances, or that there was a failure by the testator to approve its contents.

If you are an executor named in a will, and there is an assertion that the will is bad because of suspicious circumstances, I am also happy to to advise you.
Please call me on 1300 431 895, or email me at justin@conomylegal.com to request an initial consultation.

On 4 August 2016, White J gave some guidance in relation to circumstances in which particulars should be sought, and when pleading should be struck out: In the matter of Cougar Mining Group Pty Ltd [2016] NSWSC 1050.

In determining the matter, his Honour made the following observation, which appears to be lost on many litigation practitioners still:

“Pleadings play an important function in identifying the issues in the proceedings and the case that the defendants are required to meet. In general, I am not sympathetic to applications to strike out pleadings. Nor am I sympathetic to wide-ranging requests for particulars. In Verner v Giannaros [2016] NSWSC 242 I referred to what Martin CJ said in Barclay Mowlem Construction Pty Limited v Dampier Port Authority [2006] WASC 281 (at [7]), namely that:

“… provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and appraising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.”

The case concerned proceedings that had been commenced by summons, that had already been pleaded and then re-pleaded a number of times. His Honour dealt with the third or fourth “evolution” of the pleading,  but, given that the defendants were seeking costs incurred in the proceedings to date as having been wasted, his Honour found it necessary to  consider how the pleading had evolved: [4]

The defendants were seeking orders that the plaintiff provide additional particulars of certain paragraphs of the pleading, and that numerous other paragraphs be struck out: [1]

After a thorough analysis of the pleading, His honour concluded at [50]:

“This pleading singularly fails to meet the objects of the pleading. It does not enable the defendants to know the case they have to meet”

 And then at [54]:

“The defendants are not in a position on the present state of the pleadings to know what case they have to meet. I think this is a deplorable state of affairs. Contrary to the submissions made by counsel for the plaintiff it is not a state of affairs attributable to the defendants.”

In relation to a criticism made by the plaintiff of the defendants’ request for particulars, his Honour held at [57]:

“…. It is true that they were extensive but I think they were justified, having regard to the deficiencies of the pleading. Having said that, I would not in any way seek to encourage solicitors or counsel embarking upon detailed requests for particulars. But in this case it was and remains unclear exactly what it is that the plaintiffs are contending for.”

His Honour then struck out the pleading, with liberty given to the plaintiff to re-plead.  He also ordered that the plaintiff pay the defendants’ costs of their multiple appearances, including of the motion to strike out the pleading, as well as the costs thrown away by reason of the filing of the pleading. That costs order was made payable forthwith pursuant to r 42.7 of the Uniform Civil Procedure Rules, on the basis that his Honour found “reason to fear that having regard to the way the plaintiff has conducted its case to date that the resolution of these proceedings might take some time”: [62].

 

This case is illustrative of the fact that courts are becoming less and less tolerant of wide ranging request for particulars, and to inadequate pleadings – influenced no doubt by the imperatives of the “just, cheap and quick”  approach to litigation now in vogue.

On 19 August 2016, in Mizuho Bank Ltd -v- Mark Anthony Ackroyd [2016] NSWSC 1148, Hammerschlag J considered  the operation of section 440J of the Corporations Act 2001 (Cth), which provides that “During the administration of a company… a guarantee of a liability of the company cannot be enforced, as against… a director of the company… except with the leave of the Court …”

Proceedings had been begun by a creditor against the guarantor of a debtor company on a guarantee,  and the next month, the debtor company appointed an administrator: [2]-[3].

The guarantor argued that no leave of the court had been granted for the creditor to proceed against the guarantor under section 440J,  and that such leave was required in order to enforce a guarantee of a liability of a company in administration: [6].

The creditor argued that the section had no application to proceedings begun before the administration commenced. Alternatively, it sought leave to proceed in the event it was wrong: [7]. It argued that, consistently with an earlier Queensland case (Bank of Western Australia Limited v Clift (2010) 80 ACSR 163; [2010] QSC 366), that the continuation of proceedings begun before the commencement of the administration did not not amount to the enforcement of a guaranteed liability within the meaning of the section, and hence, did not prevent the creditor continuing those guarantee proceedings: [13]-[15].

As noted by his Honour at [15], in Clift, Wilson J had held that there was a distinction between:

• “establishing a liability or right on the one hand, and enforcing it on the other”: (Holt v AEG Electric Co [1918] 1 Ch 320); and
• “enforcing remedies, including extra curial remedies, and the institution of legal proceedings and their continuance up to judgment”: (Fraser v Deputy Commissioner of Taxation (1996) 69 FCR 99).

The guarantor argued that the finding in Clift was unopposed, and was clearly wrong.  He argued that the ordinary meaning of “enforce”, “ in the context of a liability under a guarantee, includes both the bringing and furthering of legal proceedings against a guarantor.”: [19]-[20].

Hammerschlag J  agreed with the approach in Clift: [23], holding at [31]:

“The defendant’s submission is that where s 440J(1)(a) refers to enforcement, this includes both beginning and proceeding with curial proceedings on the guarantee. A difficulty standing in the way of this submission is that if it is correct, there is no logical or rational reason to specifically embargo the beginning of proceedings in s 440J(1)(b) (as distinct from continuing them). Another is that there is no rational reason why the legislature would provide specifically for beginning proceedings, but leave continuing them to be covered by a general term. To my mind, the specific inclusion of the embargo against beginning proceedings indicates that continuing them is not embargoed.”

His Honour held at [33]:

“…The opening words of s 440J(1)(b) are an indication, and are consistent with the notion that legal proceedings are not to be considered as enforcement.”

His Honour observed at [39]:

“If the defendant’s construction is correct, s 440J(1) will stop the continuation of proceedings on a guarantee, but will not stop execution of a judgment on the guarantee already obtained against the director guarantor. There does not seem to be any sensible reason for such a distinction.”

Yesterday, the Court Of Appeal of the Supreme Court of New South Wales had the occasion to consider issue estoppel in Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213.

The main judgment was given by Meagher JA (with whom Leeming JA and Simpson JA agreed).

While the substantive proceedings the subject of the appeal (i.e. workers compensation) are of no relevance to my practice, the summary of law provided by the judgment at [22] to [25] and [33] to [35] in relation to issue estoppel is helpful more broadly.

Omitting case references, that summary can be further condensed to the following:

• with res judicata, the very right or cause of action in the former proceedings has passed into judgment, so that it has merged and no longer has an independent existence.
• with issue estoppel, in the second proceeding, a state of fact or law is alleged (or denied), the existence of which is a matter necessarily decided by the prior judgment;
• an issue estoppel precludes the parties and their privies “from contending to the contrary of that point… which having been once distinctly put in issue by them… has been, on such issue joined, solemnly found against them.”
• an issue estoppel can apply to judgments and orders made by consent.
• in relation to factual questions, an issue estoppel applies only to what are described as “ultimate” facts, and does not extend to “mere evidentiary facts”.
• “An ultimate fact may be found by the Court or tribunal, or admitted or agreed between the parties for the purpose of determining the matter directly in issue”.
• for an issue estoppel to arise, it is necessary that the first decision was “final”.

In this case, it was accepted that former decision was capable of giving rise to an issue estoppel: [27],  and it was argued by the appellant that the respondent was “precluded from contesting in later proceedings in the Commission concerning a claim for permanent impairment … that she had fully recovered”:[33]

Meagher JA held at [34] and [35]:

“not all final decisions of ultimate issues by subordinate tribunals are binding as issue estoppels….

That is because … the issue estoppel extends to such matters as are necessarily determined only if the court or tribunal “has jurisdiction to determine these matters for all purposes between the parties, ie, jurisdiction to determine them directly and immediately as well as merely incidentally”. Whereas that will ordinarily be the position in relation to a superior court, it is not necessarily so in relation to inferior courts or tribunals with limited jurisdiction.”

At [39] to [51] there is then consideration of the relevant statutory scheme under the Workers Compensation Act 1987 (NSW),  which was important in the context of this appeal.

At [51], Meagher JA held that “it is critical to the appellant’s success in the appeal that the issue estoppel prevented a medical dispute from arising.”

His honour then held that the issue estoppel contended for did not arise: [56].

 

 

 

Applications to pay by instalments Rule 37.2 of the Uniform Civil Procedure Rules 2005 (NSW) makes provision for the making of an instalment order in respect of a judgment debt.  The rule is rather…

Source: Applications to pay judgment debts by instalments in commercial litigation – relevant considerations; applications to set aside statutory demands – the Graywinter principle

In a decision on 29 July 2016, Keira Holdings Pty Ltd -v- Broadcast Australia Pty Ltd [2016] NSWSC 1140, Hammerschlag J made a lump sum costs order in favour of the defendant in the amount of $700,000,  relying on the power conferred by section 98(4)(c)  of the Civil Procedure Act 2005 (NSW) to make an order that the party to whom costs are to be paid is entitled to a specified gross sum instead of assessed costs.

In Keira, there was evidence from costs assessors that the defendants could expect to receive on an assessment on the indemnity basis (which was the relevant order the court at previously made)  of  $901,315.94. In circumstances where the defendant was only seeking $700,000, his Honour was prepared to make such an order.

At [6] his Honour held that he was satisfied that:

“… this is an appropriate case for a lump sum costs order to be made and that the sum of $700,000 is more than a fair assessment of the amount which the defendant would be expected to receive were there to be some other assessment.”

These orders are becoming more frequent –  particularly in commercial cases.

Another recent example is the order made by Davies J in Stankovic v State of NSW (No. 2) [2016] NSWSC 335, decided on 7 April 2016.

In Stankovic, Davies J made a lump-sum order in the sum of $18,122,  following the summary dismissal the plaintiff’s proceedings.

At [8]  his Honour noted the submission of the defendants that:

“…the purpose of the Rule was to avoid expense, delay and the aggravation of a costs assessment process. The probable inability of a party to pay a costs order is an important consideration for the making of a lump sum costs order so that the other party is not put to wasted time and expense of the costs assessment process.”

At [11]  his Honour referred to Harrison & Anor v Schipp [2002] NSWCA 213 (decided under an earlier equivalent provision to section 98(4)) where Giles JA held at [21]and [22]:

“…The power conferred … is not confined, and may be exercised whenever the circumstances warrant its exercise. It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment.

Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson at 124, the gross sum “can only be fixed broadly having regard to the information before the Court”; in Hadid v Lenfest Communications Inc at [35] it was said that the evidence enabled fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates”. The approach taken to estimate costs must be logical, fair and reasonable (Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at [27]). The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA).”

His Honour applied a discount of 20% to the total costs incurred by the defendants: [17]

Such an order should be considered in an appropriate case.

Have you been left out of a will? Have you been left less than you consider you should have been left in a will? Are you an executor of a will, facing a challenge to the will by a person claiming t…

Source: Left out of a will? Defending a will?

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