Frizzell v Frizzell

[1995] QCA 381

IN THE COURT OF APPEAL	[1995] QCA 381
SUPREME COURT OF QUEENSLAND
Appeal No. 186 of 1994.
Brisbane
[Frizzell v. Frizzell]
BETWEEN:

GLEN GEOFFREY MALCOLM FRIZZELL

Appellant

AND:

RUBY FRIZZELL

Respondent

___________________________________________________________________

Macrossan C.J.
Pincus J.A.

Thomas J.

___________________________________________________________________

Judgment delivered 29/08/95

Judgment of the Court

___________________________________________________________________

APPEAL DISMISSED WITH COSTS
___________________________________________________________________

CATCHWORDS: UNDUE INFLUENCE AND UNCONSCIONABILITY - whether onus on donee to show lease was the voluntary act of an independent and fully informed person

APPEALS - limited role of Court of Appeal in dealing with factual findings largely based on the primary judge’s impressions as to credibility of witnesses

Counsel:	Mr P A Keane Q.C. with him Mr N B McGregor for the appellant. Mr J G Crowley Q.C. with him Mr D C Rangiah for the respondent.
Solicitors:	Robertson Foster for the appellant. Quinlan Miller and Treston as town agents for Cleary and Lee for the respondent.

Hearing date:8 February 1995.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 186 of 1994.

Brisbane

Before Macrossan C.J.
Pincus J.A.
Thomas J.

[Frizzell v. Frizzell]

BETWEEN:

GLEN GEOFFREY MALCOLM FRIZZELL

Appellant

AND:

RUBY FRIZZELL

Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 29/08/1995

This is an appeal from a judgment of the District Court dismissing an action which

was brought to set aside a lease. The date of execution of the lease was 30 August 1984

and the lessor died in October 1987. The grounds upon which it was sought to attack the

lease were undue influence and unconscionability, particularly the former; in view of the

lapse of time since the transaction was entered into, and the subsequent death of one of

the parties, it was to be expected that there might be difficulty in ascertaining accurately the

circumstances in which the lease was executed, and that has proved to be so.

The persons most directly concerned with the transaction were the deceased, who will be called in these reasons Mrs Frizzell, her daughter-in-law Mrs Jill Frizzell, her son Harold, Jill's husband, and Mr Neil Alexander O'Sullivan, the solicitor who effected the

transaction. Of these four persons only three were available to be called and one of those,

Harold, was not called. No other witness had any direct knowledge of the way in which the

lease came into existence, so that the trial judge rightly treated the evidence of Jill and that

of O'Sullivan as of particular importance. Acting on their evidence, his Honour rejected the

claim that the lease had been procured by undue influence.

In this Court, counsel for the appellant did not contend that there was any basis upon

which we could upset his Honour's views as to credit, and more particularly, did not contend

that the evidence of Jill and that of O'Sullivan favourable to the respondent was of such a

character as to be incapable of acceptance. It is perhaps unnecessary to say so, but the

concession implicit in the submissions made for the appellant, that the Court cannot

interfere with the judge's view that the evidence of Jill and that of O'Sullivan was worthy of

acceptance, was properly made. Sometimes appellants, and even their counsel, overlook

the strictly limited role of this Court in dealing with attacks on factual findings which are

largely based on the primary judge's impressions as to the credibility of the witnesses.

Here, there were no circumstances which could have warranted our dealing with the case

in a way which involved rejection of the evidence which his Honour accepted - there were,

for example, no documents which falsified the thrust of that evidence, nor was the evidence,

on the face of it, improbable.

The basis of the appeal then was essentially a legal one, namely that the primary

judge made the wrong approach to the case. It was argued that he should have held that

the relationship between the parties to the lease was such that, if it were shown that the

lease was disadvantageous to Mrs Frizzell, then there was an onus thrown upon Jill, who gained a benefit under the lease, to justify it; further, it was submitted that the evidence was

insufficient to discharge that onus.

Mrs Frizzell had three children, one of whom died many years ago. The others are

Glen the appellant, and Harold, the husband of Jill the respondent. On the evidence, Glen's

financial position was, at the time of the events in issue, substantially better than Harold's.

It was said that Harold has had the misfortune to have had little in the way of financial

resources when the lease in question was granted; he and his wife seem to have been

then dependent almost entirely upon pensions. There is also evidence that each of Glen

and Harold has been a dutiful son in giving assistance to Mrs Frizzell when she was in need

of it. However, when the lease was granted in 1984, Harold and Jill had been living with

Mrs Frizzell in her home for over a year. On the evidence given by Jill, who impressed the

primary judge, she and her husband treated Mrs Frizzell, who was 90 years of age and ill

at the time of execution of the lease, in a kindly fashion and Jill in particular made herself

responsible for some rather onerous nursing duties. These facts are material as making

it more plausible that Mrs Frizzell could have decided especially to benefit Jill and Harold

- i.e. on the basis that they were looking after her at the time and had no resources of their

own. On the other hand, there is no reason to think that Glen was other than a fitting object

of beneficence on his mother's part.

The evidence dealt with events in the lives of the parties at a time well before the

immediately relevant issues arose; for example, there was some detail of Harold's

business career and the reason for his being in an unsatisfactory financial position in 1983

and 1984. It does not appear to be necessary to deal with these aspects in order to

decide the appeal, and it is convenient to begin an account of events in mid-1983 when, as has been mentioned, Mrs Frizzell took Harold and Jill into her home. From that time on,

according to Jill, the three lived happily together and there was a relationship between them

of trust and love. It is not in dispute that Jill cared for Mrs Frizzell in a physical sense, and

although Glen in his evidence tended to suggest that such work as was done by Jill was no

more than due recompense for the benefit of living rent free, it is not impossible that Mrs

Frizzell thought she was being looked after affectionately and felt some gratitude for that.

Some indication of Mrs Frizzell's capacity to handle business at that stage is able to be

derived from the evidence of Mr A C Robertson, a retired share broker who dealt with Mrs

Frizzell for some years and in particular in 1983 and 1984. This witness gave evidence

that Mrs Frizzell was very interested in her shares, but that by 1984 she was unwell and not

"anything like her former ability". Mr Robertson said that he obtained instructions in relation

to share transactions from Harold and Jill on behalf of Mrs Frizzell in 1984 and this was

relied on on behalf of the appellant as showing a condition of dependence upon them.

When asked whether Mrs Frizzell had a sharp mind, Mr Robertson said that she was "clear

enough", but "very easy to persuade".

On 1 March 1984 Mrs Frizzell made a will giving a life interest in her house to Harold

and Jill, followed by a life interest to Glen and his wife June; apart from that, the estate went

to grandchildren. But shortly after that Glen took his mother to a trustee company in

Toowoomba and she made a will making quite different provision, under a will dated 20

March 1984. Apart from some minor gifts to grandchildren the estate was to go to Glen.

Glen gave evidence that Mrs Frizzell said that she had been forced to change her

will, but the judge had reservations about the correctness of that statement. A Mr Broderick

from the trustee company told his Honour that he questioned Mrs Frizzell as to why she was

favouring Glen rather than Harold, but she was "adamant that she wanted to favour Glen". Mr Broderick pointed out that the way in which this was done was by, in effect, re-executing

a will made previously by Mrs Frizzell with the same company, but that one of the provisions

in the previous will turned out to be unsuitable. He said that fact was pointed out by Mrs

Frizzell and the will altered accordingly. Certainly Mr Broderick's evidence is hard to

reconcile with any idea that the will in favour of Glen was one executed under pressure from

him, and if it was, as appears, made using the testatrix's independent judgment, it is not

easy to understand her having shortly before that made quite different provision for the

disposition of her estate, including a substantial benefit to Harold and Jill.

According to an affidavit by Harold, made in other proceedings, but put in evidence

in these, when he found out about the will just mentioned - that of 20 March 1984 - he:

"...obtained legal advice about leasing the house [of Mrs Frizzell] and I asked the deceased to lease that property to my wife...and deceased agreed to do that".

Mr O'Sullivan said that on 4 April 1984 - about a fortnight after execution of the will in favour

of Glen - Harold and his mother came to see him and he was told that she was concerned

that Jill be able to stay in the house; "...she didn't want the daughter-in-law to be able to be

put out of the house". Mr O'Sullivan's opinion was that Mrs Frizzell made "positive

contributions to what she wanted done". He came to the conclusion that the parties should

have time to think about the matter and that he would not hurry. It was in fact not until

August, some four months later, that the lease was executed. In the meantime, other

relevant events occurred. On 18 April 1984 Mr O'Sullivan received from Harold an

inventory of furniture and other chattels in the house; they were to be included in the lease.

At that stage it was contemplated that Harold would be one of the lessees, but, apparently

because of his parlous financial position, that did not occur. On 4 May 1984 Harold wrote

to Mr O'Sullivan again, making suggestions or giving instructions about the way the rental provisions of the lease were to be formulated and giving certain other information. This

second letter urged haste and mentioned that the writer expected "the doctor to vouch for

my mother's capability to sign the lease...".

These documents give support to the notion that Harold at least was exerting

pressure to obtain the lease. As has been mentioned, he gave no evidence, and that

subject is further discussed below.

On 12 June 1984 Mr O'Sullivan saw Mrs Frizzell again, on her own, because he had

then decided what was the best way of handling the matter; he advised her to become a

joint lessee. During that interview Mrs Frizzell told Mr O'Sullivan of her reason for wanting

the lease, namely that she "wanted the daughter-in-law to have a roof over her head". Mr

O'Sulllivan says that he discussed the effect of the lease and its consequences with his

client.

Ten days later Mr O'Sullivan sent a draft of the lease, not to Mrs Frizzell, but to Jill

and Harold, and on 2 August 1984 the lease was executed in his office. Again, he says he

explained the effect of the lease to Mrs Frizzell. The lease had to be re-executed on 30

August 1984 and five days later Mrs Frizzell was admitted to a nursing home where it was

observed that she seemed "confused".

Some of the account given above is to be found in the reasons of the primary judge,

but it is necessary to deal further with those reasons because it is their content which gives

rise to the appellant's complaint. The judge found that Mr O'Sullivan acted "appropriately

and responsibly" and observed nothing which would cause him concern. His Honour pointed out that Mr O'Sullivan "took time with the various steps towards the fulfilment of the

lease, which process provided ample scope for the effects of undue influence or

unconscionable conduct to emerge if they existed". He accepted Mr O'Sullivan's evidence

"in effect, that such effects did not so emerge".

His Honour concluded that there was no undue influence and no unconscionable

conduct "applying the principles which are fully set out in written submissions...". The judge

took the view that the reason why the will of 20 March 1984 in favour of Glen was made was

simply a change of heart. He found that Harold had sought to persuade Mrs Frizzell to

"provide an interest in the house".

As to the failure to call Harold, the judge said: "I should add that the failure by the

plaintiff to call Harold to give evidence should in the circumstances of this case give rise

to a Jones v. Dunkel inference" (emphasis added). It was common ground that the judge

meant "defendant". His Honour went on to make comment on the effect of Harold's letters.

It may seem odd that with no explanation Harold was not called and yet the appellant

failed. The absence of Harold from the witness box must have made the appellant's task

easier. But in the result the judge accepted Jill's evidence and that of Mr O'Sullivan and

declined to find that there was any undue influence exerted, so that for the purposes of this

appeal, the respondent's failure to call Harold becomes of no present significance; that

failure might have caused, but did not cause, the judge to reject the respondent's

assertions. His Honour accepted Jill as an impressive witness and that is of obvious

importance in determining the fate of this appeal.

Jill said that the rental was based on "affordability", meaning the ability of herself
and her husband to pay, that the purpose of the lease was to enable the two of them to live

in the house for the rest of their lives, that her mother-in-law was quite happy to go to the

nursing home, that the old lady was not easily influenced, that the reason for obtaining the

lease was "that if a lease was registered over the property...you couldn't be put out by

Glen", and that it was Mrs Frizzell who came up with the original idea of having a lease. It

need not be assumed, in favour of the respondent, that all these allegations were accepted

as being precisely accurate, but the appellant is faced with a position that the judge has

plainly regarded Jill's account of the matter as substantially true.

It has been mentioned above that the appellant's principal attack on the judgment

has to do with the judge's approach; it was argued that the circumstances were such that

there fell on the respondent an onus of showing that the lease was the voluntary act of an

independent and fully informed person. In support of this, much was made of gaps in Mr

O'Sullivan's information; it seems clear that there were such gaps in that he did not know

of the recent will in favour of Glen, or of the intention that Mrs Frizzell would go into a nursing

home. As has been noted, she did so very shortly after the lease was re-executed.

Counsel for the appellant contended that it was necessary to show that, to use the words

of Dixon J in Johnson v. Buttress (1936) 56 C.L.R. 113 at 134, "the gift was the

independent and well-understood act of a man in a position to exercise a free judgment

based on information as full as that of the donee".

Here, of course, there was a transaction for consideration not a gift; but a

transaction at a substantial under-value is plainly within the principle: see for example

National Westminster Bank Plc v. Morgan [1985] A.C. 686 at 704.

Acceptance of the appellant's principal submission would involve the Court in

adopting the view that there was such a relationship between Harold and Jill on the one

hand and Mrs Frizzell on the other, that the former could be said to exercise dominion over

her - or if not that, have such an influence over her that there was reason to think that she

was unlikely to be able to exercise her own judgment in the matter. Secondly, for the

appellant to succeed on this argument, it would be necessary for the appellant to show that

there is an undetermined question in the case, namely whether Mrs Frizzell did in truth

decide to grant the lease on the basis of her own well informed judgment.

As to the first point, it must be said in favour of the appellant that there is substance

in the contention that Harold and Jill had substantial influence over the steps Mrs Frizzell

was likely to take in such matters. As has been pointed out, Harold's affidavit and the

correspondence he had with the solicitor tends to support that, but the most potent reason

for thinking that Mrs Frizzell was likely to be influenced by Harold and Jill is the fact that

(leaving earlier dispositions out of consideration) within a matter of weeks - from 1 March

to 4 April 1984 she made a will giving a life interest to Harold and Jill, made a further will

leaving substantially her whole estate to Glen and then reverted to the position that Harold

and Jill should have the right to continue to live in the house. If one leaves the oral evidence

out of account there would be strong ground for an inference that, because of her age and

infirmity, Mrs Frizzell was simply acting in accordance with the desires of the child who last

had the opportunity to influence her.

But the other possibility is that she was torn between two inconsistent desires,

uncertain what to do and therefore prone to changes of mind. The drift of Jill's evidence

was that, although the three occupants of Mrs Frizzell's house had a close relationship and trusted one another, Mrs Frizzell was quite able to understand what she was doing and to

discuss it rationally with others; that view of her state of mind receives support from the

evidence of Mr O'Sullivan and, to a lesser extent, that of Mr Robertson the share broker.

With respect to the question whether Mrs Frizzell made her own well informed

decision in the matter, the appellant undoubtedly has on his side the fact that the form of

the transaction did not make a great deal of sense, given that the lessor had passed her

90th year; the prospect of her living on for 25 years in the house was fanciful, if not

impossible. Then, as counsel for the appellant pointed out, there is nothing in the lease to

oblige Jill to continue to look after the old lady, as the parties intended.

Nevertheless, and although Mr O'Sullivan might have advised a transaction in a

different form, had he known more about the background of the problem, on the evidence

of Jill, which must be taken to have been accepted on this point, what was done was in

substance in accordance with Mrs Frizzell's desires; she wished to give Harold and Jill

some security with respect to their occupancy of the house. That she could have achieved

this most simply by making a further will giving them a life interest is evident enough, but

it is at least implicit in the judge's reasons that he was not prepared to infer either that the

relationship which Jill and Harold had with Mrs Frizzell was such as to give them substantial

power over her actions, or to infer that the lease was executed because of the exercise of

that power, rather than as a matter of Mrs Frizzell’s own choice.

Although the case is by no means an easy one, and this Court's task might have been rendered simpler if the findings of fact made below were comprehensive, the better view appears to be that the grant of a new trial on the ground put forward could not be

justified, for the reasons already given; in particular, the apparent acceptance of Jill's

evidence sufficiently conveys that the judge regarded Mrs Frizzell as capable of making her

own decision about the lease and as having done so, not uninfluenced by Jill and Harold's

desires, but not over-borne by their solicitations either.

It was argued that, as an alternative, the Court might order a new trial to determine

the question of unconscionability, decided against the appellant below. It is difficult to see

why that should be done. What Mrs Frizzell did was unfair to her only in the sense that it

gave an interest in property to her daughter-in-law at an undervalue. But it must have been

evident to her that she had reached a stage in her life at which her property must, in one

way or another, soon pass to others. It is true that the transaction she entered into gave her

limited protection, but in the events which happened, namely that she soon went into a

nursing home, that was of no great consequence. If there was any unfairness about the

matter it was unfairness to Glen; but a disposition inter vivos made by an elderly person

can always be seen to disadvantage those with expectations under a will.

The appeal is dismissed with costs.