O'Neill v O'Neill
[2020] NZHC 2988
•13 November 2020
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2019-419-000062
[2020] NZHC 2988
IN THE MATTER of the estate of LARRY MICHAEL O’NEILL UNDER
Part 27 and Rule 27.6 of the High Court Rules 2016
BETWEEN
JUDITH ANNE O’NEILL
Plaintiff
AND
DAVID MICHAEL O’NEILL
Defendant
CIV-2020-419-000126 IN THE MATTER
of an application under the Family Protection Act 1995 and an application
under Part 18 of the High Court Rules 2016
BETWEEN
DAVID MICHAEL O’NEILL, MARTIN TIMOTHY O’NEILL and PHILIPPA SUSAN DENNIS
Applicants
AND
JUDITH ANNE O’NEILL
Respondent
Hearing: 19 – 21 and 27 October 2020 Counsel:
PJ Dale QC and LT Meys for Plaintiff/Respondent PJ Morgan QC for Defendant/Applicants
Judgment:
13 November 2020
JUDGMENT OF DOWNS J
This judgment was delivered by me on Friday, 13 November 2020 at 11 am pursuant to r 11.5 of the
High Court Rules.
Registrar/Deputy Registrar
O’NEILL v O’NEILL [2020] NZHC 2988 [13 November 2020]
Table of Contents
A will dispute [1]
Some dynamics [5]
Background [9]
Testamentary capacity [15]
Undue influence [40]
Analysis [49]
The claim under the Family Protection Act 1955 [67]
Analysis [73]
Conclusion [88]
Two evidence rulings during the trial [89]
Orders [93]
Costs [94]
A will dispute
[1] Disputes about wills can be bruising. Family members are often pitted against each other. Sometimes, everyone feels aggrieved. This case is no different. Larry O’Neill died 15 August 2016, aged 84. Larry has three adult children from his first marriage: David, Martin and Philippa. Larry and his first wife separated in 1979. Later that year, Larry and Judith commenced a relationship that endured for the 37 years until Larry’s death. The couple married in 1999.
[2] Larry was a very experienced solicitor. One of his practise areas was wills. Larry encouraged clients to update their wills every five years. Larry heeded his own advice; he made wills in 2002, 2007 and 2012.
[3] Larry and Judith were tenants in common of their Hamilton home, meaning, each owned a divisible half-share. Larry’s half-share is the only asset of significance in his estate. Larry’s 2002 will left that half-share to David, Martin and Philippa once Judith died. But, his later wills leave the half-share outright to Judith; she does not have a mere life interest as she did under the 2002 will. Therein lies the problem.
[4] David, Martin and Philippa learned of the later wills after Larry’s death. They say Larry lacked testamentary capacity when he made the 2012 will; and both of the
later wills are the product of Judith’s undue influence.1 Judith says Larry was mentally alert until his death and freely chose to leave her his half-share. David, Martin and Philippa say even if this is correct, Larry breached his moral duty to provide for them. They claim under the Family Protection Act 1955. Judith says Larry had good reasons for doing what he did, at least some of which he reduced to writing.
Some dynamics
[5] Much contextual evidence was adduced, spanning almost 40 years. As might be expected, witnesses perceived the same events differently. Two interrelated examples are illustrative. On 12 January 2014, Judith telephoned Philippa to report Larry’s eye examination. Judith says Philippa implied she was not looking after Larry: “Philippa’s tone was accusatory”. Judith says she told Philippa the family had not acknowledged her efforts as Larry’s caregiver, only for Philippa to claim the battery on her phone was dying. Philippa says Judith raised her voice “considerably and I actually demanded that she stop shouting at me”. Philippa says she did not question the adequacy of Judith’s care and is “sorry” Judith believes otherwise.
[6] This prompted a “family meeting” the next month. Judith says during it, David’s wife told her, “you can stay in [the] house as long as you like”. David acknowledges his wife said this but responds Judith has misconstrued what was meant; the remark was not intended as commentary on the children’s expected inheritance.
[7] Other dynamics sharpen these conflicts. As a witness, Judith tended to be lyrical. For example, Judith recounted the children’s “joyless response” when she married Larry; Larry being “dismayed and troubled” by their actions; and subsequent “hostile legal confrontations”. David and Philippa tended to be definitive, including when circumspection might better reflect the vagaries of the human condition. A modest example is when David described an aspect of Judith’s testimony as “absolute rubbish”. Philippa described another as “blatant lying”. A more significant example arises in relation to their (and Martin’s) claim of undue influence. Despite competing possibilities, David said he was quite “sure” Larry wanted to leave his share
1 David, Martin and Phillipa also challenged Larry’s testamentary capacity in relation to the 2007 will, and that it was executed. A signed copy cannot be found. Mr Morgan QC abandoned these challenges during the hearing.
of the home to them. Under cross-examination, David and Philippa said Larry “must” have been the victim of undue influence, for, to their minds, nothing else could explain Larry’s change in position following his 2002 will.
[8] Another dynamic is this. Trust, if ever present, vanished quickly after Larry’s death. David, an experienced barrister, wrote—using his own letterhead—to promote the apparently obvious virtue of Judith’s capitulation.2 Having suggested Judith settle for a life interest in Larry’s half-share despite the 2012 will, David reminded Judith of her obligation to pay for all outgoings; keep the home in good repair; and insured to its “full insurable value”. This outcome, David said in his letter, would not affect Judith “in any way whatsoever whilst she is alive”.
Background
[9] As observed, Larry and Judith began seeing each other in 1979 after Larry and his first wife separated. Judith’s husband died seven years earlier. Larry and Judith married in 1999. They bought a section in Hamilton that year and, in 2000, built a home on that section. Both contributed financially. Judith still lives in the home. Larry’s half-share of it is the only asset of significance in his estate.
[10] In 2003, Jonathon, Judith’s 39-year-old son died. Judith has two other adult children from her first marriage: Phillip and Louise. Phillip is now 60; Louise, 55. Larry’s children—David, Martin and Philippa—are 62, 60, and 59 respectively.
[11] Larry was a partner in O’Neill Allen Clark. In 2000, that firm merged with Norris Ward McKinnon. Larry then became an employee (aged 68). Between 2004 and his retirement in 2008, Larry worked part-time for Jonathon Webb, another Hamilton solicitor.
[12] Larry’s 2002 will coincides with his employment at Norris Ward McKinnon; his 2007 will with his employment by Mr Webb. Larry’s 2012 will was prepared by Brian Braatvedt, whom Larry and Judith first consulted 25 May 2012. Larry and
2 On 29 November 2016. By agreement, the common bundle contained some without prejudice correspondence.
Judith had consulted Kevin Booth two weeks earlier. Again, David, Martin and Philippa were ignorant of these later wills until after Larry’s death.
[13] Judith was a teacher. She worked part time until at least 2012, when she was 76. Judith is now 84.
[14] Larry suffered a minor stroke in 1999 (when he was 67). This compromised his peripheral vision, so he could not drive. Other health matters I come to. So too remaining facts. All are best discussed in the context of legal issues.
Testamentary capacity
[15] Testamentary capacity refers to the mental ability of a will-maker to understand and make, or change, a valid will. When a lack of testamentary capacity is raised as “a tenable issue”, the person seeking to prove the will’s validity must establish it is more likely than not the will-maker had testamentary capacity.3 Stripped to its essentials, testamentary capacity requires the will-maker understand:4
(a)He or she is making a will.
(b)The effect of doing so.
(c)The property being disposed.
(d)Any moral claims he or she ought respect; for example, in relation to a spouse, partner or children.
[16] Testamentary capacity “does not require a sound and disposing mind and memory in the highest degree; otherwise, very few could make testaments at all”.5 Nor must the will-maker “possess such capacity to the same extent as previously”.6 But, the will-maker must understand the matters at [15].
3 Bishop v O’Dea (1999) 18 FRNZ 492 (CA).
4 At 494.
5 Loosley v Powell [2018] NZCA 3, [2018] 2 NZLR 618 at [7].
6 At [8].
[17] Mr Morgan argues the tenable issue threshold is crossed in relation to the 2012 will because of the evidence summarised below.
[18] David says Larry’s part-time employment as a solicitor ended March 2008, in part because he understood Larry was “getting too forgetful”. The will, of course, was made four years later.
[19] Philippa is now an executive, but she used to be a nurse. Philippa says Larry occasionally stayed with her in Auckland between 2008 and 2013. She would also occasionally visit Larry in Hamilton in the same period. These things “stuck” in her mind about Larry’s later years:
(a)His forgetfulness was the most dominant thing. He would repeat the same question every couple of minutes. This got worse if he was concerned or stressed about a particular point.
(b)He would forget a conversation within minutes and then ask the same question.
(c)He liked to please and did not like confrontation at all. Over the last 3-4 years prior to his death I noted a tendency by Judi to nag Dad to a point where he submitted and would agree with her. I found this very sad. Prior to his stroke in 1999, he would not have tolerated this.
(d)Whenever he was outside his normal environment (at the house at River Elm), he would need complete guidance and direction on just about everything. Being in different surroundings stressed him. This would occur even if we were at a café. As an example: I would need my son, Simon, to show him where the bathroom was.
(e)When he was at home in his familiar surroundings, he coped with basic duties, general care and small tasks that were set for him by Judi. When he was in his familiar environment, he wasn’t stressed. Judi always had a board on the dining room table with notes on it for him as a reminder. This was a comfort to Dad so he knew when she would be home, whether someone was coming to pick him up for an outing or if the cleaner was coming etc.
(f)... he was often confused about where the children were from a school or university perspective. He could not remember their ages and therefore couldn’t remember where they were up to from an education viewpoint.
(g)I found that I could instruct Dad to write a message in a card and hang out washing but this was something he would never do of his own initiative.
[20] Dr Mark Vaughan was Larry’s general practitioner from May 2012 until late 2015. Larry was also a longstanding patient at Dr Vaughan’s practice, where other doctors saw him. Dr Vaughan says Larry was occasionally confused about his medication; and his short-term memory sometimes good, sometimes poor. Medical records confirm these observations.7 Entries in these records say Larry had “difficulty” following instructions in October 2013 and was “withdrawn” after a fall in December 2014. An entry on the 29th of that month refers to “cognitive dysfunction”.
[21] The next item requires explanation. In late 2003, Martin, a civil engineer, managed a project in Queenstown. Fourteen luxury apartments were to be built. The project failed in 2008 or 2009, during the global financial crisis. Larry contributed— and lost—$50,000. Martin says his father later asked him to repay the $50,000 “loan”. Martin says this surprised him as his father helped draft the investors’ agreement (for which Larry did not bill anyone). David says their father frequently raised the issue of a “loan”, and he became tired of explaining the correct position to Larry. A solicitor in relation to the project, David Nielsen, testified. He said Larry was an investor, not a lender: this was “not a loan and never has been a loan”. David, Martin and Philippa say this sequence is evidence of Larry’s confusion; memory decline in his later years; or both.
[22] Doubt attaches to whether this evidence, taken together, raises a tenable issue about capacity vis-à-vis the 2012 will. On one view, it suggests no more than Larry was getting old, particularly when it is remembered Larry had poor eyesight, which could explain apparent confusion. But, even if the evidence does raise a tenable issue, I am satisfied Judith has established Larry had testamentary capacity when he made his 2012 will.
[23] Larry was examined by a consultant psychiatrist on 5 June 2008 after he suffered a fall late May that year. Dr Alison Stearn’s report says:
7 For example, entries for 8 April 2009 and 7 March 2011 refer to short-term memory problems.
Mental State Examination:
He was a very pleasant man. Both his appearance and that of the house were immaculate. His speech was of normal amount and volume. He was moving all four limbs. He looked in reasonable general good health. His mood was objectively and subjectively euthymic. There was no evidence of depression or excessive irritability. There were no suicidal ideas and no thoughts of harm to others. There were no psychotic symptoms. On general conversation his memory appeared to be good and there were no obvious word finding difficulties. On Mini Mental State Examination he scored 29/30, having lost one point in delayed recall. He has very good recall of recent events in his personal life and those in the general news. Regarding his insight, he felt there wasn’t anything particularly wrong with him.
[24] Dr Stearn said she observed “no behavioural or psychological symptoms of dementia”. She added, Larry’s “current presentation would not meet a diagnosis of delirium or dementia”.
[25] Dr Vaughan—whom I referred to earlier—said Larry was “in stable health” in May 2012; there were no hospital admissions around this time. Dr Vaughan said Larry “retained the ability to understand information relevant to a particular decision concerning his health and appreciate[d] the reasonably foreseeable consequences of a decision or lack of a decision”. Dr Vaughan said, “Larry often questioned his treatment rather than being acquiescent”; and he appeared “circumspect in matters pertaining to his care and … consistently challenged reasons for medical treatments or interventions”. These observations were not challenged in cross-examination.8
[26]I asked Dr Vaughan how Larry was with him. He said:
He was a very affable, courteous gentleman. He conveyed a strong sense of independence, he would not willingly just accept recommendations at face value over matters relating to his treatment but carefully liked to consider options and make a decision either of his own accord or following discussions with his wife to weigh up decisions.
[27] Dr Julian O’Sullivan is in the same practice as Dr Vaughan. Dr O’Sullivan was Larry’s general practitioner from 22 January 2016 until his death in August that
8 I drew this to Mr Morgan’s attention in chambers (at 10.30 am on day two of the trial), noting s 92 of the Evidence Act 2006. Mr Morgan said he had made a “deliberate decision” not to cross- examine further because testamentary capacity and capacity to give informed consent in relation to medical matters are different concepts. True, but when a lawyer has concerns about a client’s testamentary capacity, they usually rely on a medical expert to assess this before going further. In other words, lawyers normally look to doctors, psychologists or psychiatrists on this issue, on the assumption medicine or a related discipline is informative.
year. Dr O’Sullivan said Larry was “capable of making decisions regarding his health and welfare on 9 August 2016, and … prepared to go against medical advice if this did not coincide with his wishes”. Dr O’Sullivan’s evidence was read by agreement.
[28] So, three medical experts between June 2008 and August 2016 believed Larry competent to make decisions about his welfare; and suffered no significant cognitive problems.
[29] The expert evidence accords with testimony given by friends of Larry and Judith. For example, Janice Blewden said she saw Larry regularly until November 2012. She said Larry enjoyed “wide ranging discussions about local, national, and global affairs” to which he “enthusiastically contributed”, and it was “ludicrous for anyone to suggest … Larry became mentally unfit to make decisions”.
[30] The Queenstown “loan” is not evidence of a lack of capacity, for Larry was not the only person who struggled to comprehend the nature of the transaction(s). Peter Grant, a chartered accountant, was also an investor. On 5 February 2014, Mr Grant wrote to Mr Nielsen. Mr Grant said, “although none of the funds were considered a loan the accounting was something of a mystery”. He complained some of the money should have been treated as an advance to the company, but was instead treated as a loan to Martin, something Martin had said was for “tax purposes”. Mr Grant appeared to lament relying on Martin; “this was rather naïve—and imprudent to say the least”. He concluded, “I might add that despite repeated requests, Martin did not tell us what the final outcome was” in relation to the Queenstown project.
[31] This brings me to Brian Braatvedt, the solicitor who drafted Larry’s 2012 will. Mr Braatvedt’s practice areas include commercial matters, conveyancing and wills. Mr Braatvedt has “a lot of older clients making wills”. Mr Braatvedt spent approximately 40 minutes with Larry and Judith taking their instructions. Mr Braatvedt said Larry did most of the talking and was “quite lucid, very pleasant, a gentlemanly sort of fellow, I had met him once before … maybe 15 years before and I found him to be very pleasant to deal with”. Mr Braatvedt said he saw no evidence
of either confusion or forgetfulness on Larry’s part, and believed Larry had testamentary capacity.
[32] Mr Morgan explored with Mr Braatvedt what inquiries he made of Larry to ensure this was so. Mr Braatvedt accepted he made none. However, Mr Braatvedt said he knew the 2007 will already left Larry’s half-share in the home to Judith, and the proposed will did this too. Mr Braatvedt reiterated, “I had no red flag from my perspective as to testamentary capacity at all”, and Larry “seemed fine”.
[33] I asked Mr Braatvedt what practice, if any, he adopted for a client of Larry’s apparent age in relation to testamentary capacity. He said:
If the previous will that the client brought in was significantly different then obviously I would go into some detail and ask a series of questions to try and establish whether in fact the client knew exactly what they were talking about, but in this case the will that was presented to me, the main point of the consultation was in relation to the half-share that he had already gifted, so I didn’t think there was any issue there at all.
[34] Judith said when Larry later signed the 2012 will, Mr Braatvedt joked he needed to demonstrate “due understanding”, to which Larry laughed. Mr Braatvedt did not refer to this exchange, but it is consistent with his evidence Larry was “quite lucid” and “seemed fine”. Moreover, Mr Braatvedt knew Larry was a retired solicitor. This type of exchange is readily imaginable in this setting. I do not doubt it occurred.
[35] To this should be added a detail: Larry changed two things in the draft 2012 will. He amended his description from “Legal Consultant” to “Retired Solicitor”. And, he amended cl 6. This read:
In making this Will, I have been mindful of the fact that my children are all currently in their 50s and are financially well off, have established careers and significant assets of their own, and that in the circumstances they will have no need to look to my estate for any maintenance and support upon my death.
Larry changed “I have been mindful” to “I am mindful”. These changes were cosmetic only but imply presence of mind.
[36] Dorothy Bodgers gave similar evidence to Mr Braatvedt. Ms Bodgers is a solicitor too. Judith said Larry wanted her to see another lawyer about her will,
because it was more than five years since she had made one and so she could obtain independent legal advice. Judith and Larry saw Ms Bodgers in late February 2014 (approximately 20 months after Larry made his 2012 will). Ms Bodgers prepared a draft will for Judith, and a draft will for Larry too. Larry did not persevere with his draft. In this context, Mr Dale asked Ms Bodgers of her impression of Larry. This exchange followed:
A. Well he was a really lovely man, he was very gentlemanly, he, he just, yeah he was polite and gentlemanly and engaged in a sort of, you know, as –
Q. Did you have concerns about any signs of confusion?
A. No, certainly not. I mean I remember that there were stories told and there was, we laughed about some things because they’ve got good stories to tell and yeah, the meeting did last at least an hour because I just remember it was quite a good exchange, yeah.
Q. To shortcut, were there any red flags of anything about Mr O’Neill that gave rise to any cause for concern on your part?
A. No.
[37] For completeness, in cross-examination, Mr Morgan established Ms Bodgers could not recall whether she asked Larry if an investment portfolio called “Fairfield” still existed. This proposed gift to David, Martin and Philippa had little, if any, value by 2014, hence Mr Morgan’s submission Larry did not really understand his intended dispositions.9 However, Ms Bodgers said the discussion with her was “all about the house”; she prepared a draft will based on Larry’s 2012 will; and it was “highly likely” her draft reflected “an assumption” the Fairfield portfolio was still to go to the children (as it does under the 2012 will).
[38] Mr Morgan also argued the facts are like Loosley v Powell.10 I disagree. Unlike Larry, the will-maker in that case changed her will while very unwell. Moreover, in that case, the change “had no objectively rational basis”.11 Here, the change is consistent with Larry’s 2007 will, and for reasons explained in the next section of the judgment, good reasons existed for both.
9 The portfolio’s balance was $7,200 in 2012.
10 Loosley v Powell, above n 5.
11 At [108](e).
[39] My conclusion about testamentary capacity is not finely balanced. The medical experts considered Larry competent. The lawyers who drafted wills had no concerns about testamentary capacity. As observed, Larry’s amendment of the draft 2012 will implies presence of mind. Friends spoke of Larry’s active engagement in conversation and other activities until very late in his life. Clearly, Larry had testamentary capacity when he made his final will in 2012 in terms of the test articulated at [15]. Indeed, given Ms Bodgers’ 2014 observations and the evidence of Drs Vaughan and O’Sullivan, this might have endured until death.
Undue influence
[40] Principle was affirmed by the Court of Appeal in Green v Green.12 Transposed to this case: David, Martin and Philippa must prove on the balance of probabilities Judith’s influence led to the change about Larry’s half-share in the later wills, and that influence was undue; meaning, Larry did not freely exercise independent choice. Circumstantial evidence can establish undue influence. Proof of unconscionability or impropriety on Judith’s part is not required.
[41] A party alleging undue influence may rely on an evidential presumption of influence if they establish a relationship of influence; and the transaction “calls for explanation”.13 More about this soon.
[42] David, Martin and Phillipa stress the change in position between Larry’s 2002 will and his later wills. (As will be recalled, under the 2002 will, Judith had a life interest only in the half-share.) This change lies at the heart of the children’s undue influence claim. David says his father told him he and Judith were tenants in common so each could give their half-share to their children. David says in 2002 his father showed him that will and asked him if he thought it fair. David showed a colleague, then told his father it was.14 David says his father often expressed dismay at family acrimony over wills; and told him wills should treat everyone fairly.
12 Green v Green [2016] NZCA 486, [2017] 2 NZLR 321.
13 Stephen Kós “Undue Influence” in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) at [22.6.2](2).
14 David kept a copy of the 2002 will.
[43] David, Martin and Phillipa argue their claim engages the evidential presumption mentioned. They observe Larry’s eyesight meant he was reliant on Judith to take him everywhere. If Larry needed to see a doctor, for example, Judith would drive him. She would also attend the consultation. Judith was also responsible for maintaining their home; its extensive gardens (on a steep site); the couple’s (active) social calendar; and what may be described as daily household administration, in relation to which, Larry appears to have been passive. Larry became increasingly dependent on Judith, a proposition she accepted in cross-examination.
[44] David, Martin and Phillipa contend a relationship of influence existed because of this dependence. The children also contend Larry’s change in position in relation to his half-share calls for explanation, especially as Larry had previously been so concerned his will be fair; see [42]. On this argument, the evidential presumption of undue influence is engaged.
[45] David, Martin and Phillipa do not rely exclusively on the presumption; they also contend circumstantial evidence of undue influence exists. All three say their father did not like confrontation. This became more pronounced after 1999, when Larry had a minor stroke. All three also say Larry sought to please Judith. An alleged example arises in 2008 when Larry and Judith bought a BMW car.15 The children essentially say this was foolish as Larry and Judith already had a good car, a Ford Mondeo, but little cash or income. David says Larry told him Judith wanted a smaller car with an easier turning circle. Phillipa also says Judith tended to “nag” her father during his last years. To this must be added the evidence of Kevin Booth.
[46] Although Mr Braatvedt drafted the 2012 will, Larry and Judith went first to Mr Booth. Mr Booth, a very experienced solicitor, says the couple saw him on 9 May 2012. Mr Booth knew Larry well, and regarded him as a friend. Mr Booth also knew David, whom he considered a “a good acquaintance”.
[47] Mr Booth said it quickly became clear Judith wanted each half-share to be left to the other spouse. Mr Booth said he believed Larry could not freely speak his mind; and was being “manipulated” by Judith. Mr Booth said Judith “begrudgingly”
15 Another concerned renovations to the home in 2007 and 2008.
accepted he should draft wills leaving a life interest only in each share—or risk a contested will.16 Larry and Judith did not return to Mr Booth. Mr Booth believes this was because the advice he gave was “not what [Judith] wanted to hear and when she couldn’t manipulate me, she went elsewhere”.
[48] As observed, Larry and Judith then went to Mr Braatvedt on 25 May 2012. The children note during the consultation with him, Judith asked whether the half-share could be transferred to her before Larry died. Mr Braatvedt discouraged this as a drastic step, and Judith (and Larry) accepted his advice.
Analysis
[49] The application of undue influence to spouses has, as Stephen Kós QC observes extra-judicially, “always proved difficult for the Courts”.17 The same is true of the presumption of undue influence. Much of the problem is that marriage presupposes a relationship of trust and confidence, the very state said to risk undue influence.
[50] The problem is acute in this case. Larry’s dependency on Judith and her care of and love for Larry could also explain why Larry might freely choose to change his will in recognition of Judith’s care, love and devotion, which everyone agrees—David, Martin and Philippa included—are beyond doubt.
[51] Evidence supports this view. Judith said Larry arrived home 13 December 2007 with his 2007 will already executed.18 This surprised her; Judith had not earlier raised with Larry what should happen to his half-share of the home. Judith said in the years that followed, Larry repeatedly said she would outlive him, and he would provide for her. Judith described this as Larry’s “mantra”.
16 Mr Dale made no formal objection to Mr Booth’s evidence. However, Mr Dale invited me to set aside speculative aspects.
17 Kós, above n 13, at [22.7.2].
18 Mr Morgan asked Judith why she remembered the date. Judith said it coincided with Larry’s announcement they were going to Queenstown to see Martin’s development, and her sister coming to New Zealand from Australia for a family reunion. The sister had terminal cancer.
[52] Larry was working part-time as a solicitor for Jonathon Webb when the 2007 will was made. It is intituled, “Jon Webb, Solicitor, Hamilton”. Mr Webb’s evidence was read by agreement. Mr Webb said he has no recollection of this will; nor does anyone else in his firm. It is therefore likely Larry drafted the will himself while at work, a proposition endorsed by both Mr Dale and Mr Morgan when closing.
[53] Larry had reason to believe Judith would outlive him. In March 2004, he was diagnosed with prostate cancer. Judith says the urologist was “blunt”: he gave Larry a life expectancy of around five years depending on medication.19 (Larry’s death certificate includes cancer as a possible, secondary cause.)
[54] Taken together, these circumstances provide an explanation for Larry’s change of position in late 2007 in relation to his half-share of the home. Other circumstances support Larry’s maintenance of that position in 2012. Judith’s health suffered between 2007 and 2012. In 2008, she broke her arm in a fall. She later had shingles and recurring respiratory infections. Unsurprisingly, Judith’s ability to do everything became harder as she aged. Larry’s health deteriorated further. He fell when Judith did, and suffered temporary confusion. He required a pacemaker in 2008. Larry stopped work the same year. Money appears to have become tight. Larry had no private superannuation. The only asset of significance was and remains the home.
[55] What then of the presumption of undue influence, and that claim more generally? If the presumption applies, it is rebutted. And, the claim of undue influence fails. I find by the time of his 2007 will, Larry considered Judith had a greater claim to—and need for—his half-share share than David, Martin and Phillipa, hence Larry’s decision to change his will. I find that decision freely made. It reflected Larry’s love for and devotion to Judith, in recognition of her care of, love for, and devotion to him. The circumstances described at [50]–[54] explain this finding. I also find Larry affirmed his 2007 decision in 2012—again freely—by which time his and Judith’s needs were even greater. The circumstances at [54] explain this finding too.
[56] In closing, Mr Morgan argued material aspects of Judith’s evidence lacked credibility, citing in part Mr Booth’s evidence. This is not really a credibility case
19 Judith said the cancer affected Larry physically, not mentally.
though. I have little doubt each witness believed what they were saying, including the children and Mr Booth. Rather, this is a case about competing interpretations of events, a point I signalled early in the judgment. In any case, my conclusions about undue influence are consistent with the post-will evidence of Ms Bodgers.
[57] Ms Bodgers said in 2014, Larry and Judith “had a real bone of contention” about a lack of support from Larry’s children. She said the couple gave her not only a copy of Larry’s 2012 will, but a handwritten document signed by Larry dated 16 December 2012. It reads:
Statement of Larry O’Neill on present and future care arising out of medical conditions.
1. Since 1999 Judy has been my sole caregiver organising ongoing consultations with doctors and specialists. See attached list from Dr Charleson.
2. Judy has been responsible for organising all matters relating to our home and extensive gardens.
3. Social activities centred around the home are organised solely by Judy.
4. Since my retirement Judy has maintained an essential teaching income as an on-call teacher.
5. In the last six years Judy has had to deal with her own significant health problems. These include facial shingles, fractured arm and a debilitating digestive condition.
6. I now require care on a daily basis. For this Judy will require support and practical assistance from my children.
[58] Ms Bodgers said Larry and Judith told her this support had not been forthcoming. Ms Bodgers made a handwritten note of the consultation. Under the heading “Larry”, she recorded the pacemaker was to cost $26,000; “none of the children would contribute”; and Larry had “no sense of obligation” to them.20
[59] Ms Bodgers said Larry spoke about David and Philippa. Larry was aware she knew David, “a local lawyer”. In relation to Philippa, Ms Bodgers recorded “very wealthy/qualified/lives in Auckland”. Ms Bodgers said she was “pretty sure” Judith spoke about Martin, in relation to whom Ms Bodgers recorded, “lent $50,000 15 years
20 It appears Larry decided to wait (briefly) for the public health system. I assume the pacemaker was inserted without cost to him.
ago” and “in Indonesia, phoned twice in two years”. Ms Bodgers also recorded, “Larry doesn’t want to benefit children; they all very financially secure and last 15 years medical issues no actual support”.21 Ms Bodgers dispelled the proposition the grievance was Judith’s alone. She said Larry “was certainly on the same page as [Judith] … agreeing and sort of talking about those incidents”.
[60] On 4 February 2014 and 1 August 2015, Larry signed letters similar to that given to Ms Bodgers.
[61] David, Martin and Philippa believe Judith is behind these letters, even though they are in Larry’s hand. They think it very odd Larry signed “L M O’Neill”, not “Dad” or something less formal. Several points suggest Larry wrote this correspondence freely. Least significantly, Larry wrote to a grandson on 10 March 2013. He signed, “Larry O’Neill (Grandad)”.22 It is unlikely Larry was writing as Dad, and more likely he was writing as a retired solicitor. The letters seek to convey obligations approaching legal ones, or at least obligations with a strong moral content. This probably explains the correspondence’s rather cold tone, and its direct, formal language. None of the letters contains any hint of Judith’s lyricism. Most obviously, there is no evidence—only surmise—Judith unduly influenced Larry to make this correspondence.
[62] This leaves one or two loose ends. Mr Booth’s testimony does not advance the claim for undue influence once his opinions are tempered by the totality of the record, and speculation set aside. Judith’s recollection of the consultation differs from Mr Booth. Irrespective of who said what, she and Larry were upset by Mr Booth. Given Mr Booth’s candour, that is unsurprising. Mr Booth did not make a file note or any form of contemporaneous record of the consultation. So, he is reliant on memory; more particularly, memory of impression. Mr Booth is not wholly independent either: Larry was a friend; David a close acquaintance. Most importantly, Mr Booth said he was unaware of the 2007 will. It follows Mr Booth was unaware of the circumstances surrounding its making, and equally unaware that Larry’s later testamentary intentions
21 Ms Bodgers said the couple’s “sense of grievance” did not dominate the meeting “because a lot of subjects were covered”.
22 The children consider this letter suspicious too because they received a copy.
remained consistent. In short, Mr Booth’s (firmly held) impressions lacked the benefit of context.
[63] The alleged circumstantial evidence of undue influence is very much a dual- edged sword. Complaints of “nagging” suggest the person being nagged is capable of resistance and resisting. Everyone agreed Larry could be stubborn. Moreover, the examples which emerged do not concern. Larry is not the only husband whose wife has discouraged consumption of a second or third glass of wine. Larry’s and Judith’s purchase of the BMW upset the children; David, for example, said he was “incredulous” about this. However, Judith was driving Larry everywhere because of his poor eyesight. That Judith wanted (an admittedly expensive) smaller car is not obvious evidence of undue influence, particularly when the children appeared to view this as expenditure of their money.
[64]This leaves one piece of evidence. David said:
Another time, and I can’t remember the date, I remember talking to Dad over the phone. He seemed to be irritated by something and I asked him what was wrong. He told me that Judi had suggested to him that he should leave his half of the house to her. He told me that wasn’t going to happen. I said jokingly, that it didn’t worry me so long as she left her half of the house to us.
[65] Mr Dale did not challenge David about this, perhaps by oversight.23 So, I do not have the benefit of challenge or response. This evidence provides some support for the claim of undue influence, but Mr Morgan placed no great reliance on it. He mentioned it once in closing, and briefly.24
[66] David did not say when the conversation occurred, nor connect it to any event. David did not identify any other topic in the conversation either. This lack of context deprives the evidence of the probative value it might otherwise have enjoyed.
The claim under the Family Protection Act 1955
[67] The Family Protection Act allows a defined class of affected persons— including the children of the deceased—to seek provision from the estate for their
23 Evidence Act 2006, s 92. David’s brief contains 142 paragraphs.
24 Closing submission at para 7.13.
“proper maintenance and support”.25 The statute has attracted a great deal of case law since its enactment in the middle of last century. Unsurprisingly then, applicable principle is settled and well known. I adopt Randerson J’s helpful summary in Vincent v Lewis:26
a) The test is whether, objectively considered, there has been a breach of moral duty by [the deceased] judged by the standards of a wise and just [will-maker].
b) Moral duty is a composite expression which is not restricted to mere financial need but includes moral and ethical considerations.
c) Whether there has been such a breach is to be assessed in all the circumstances of the case including changing social attitudes.
d) The size of the estate and any other moral claims on [it] are relevant considerations.
e) It is not sufficient merely to show unfairness. It must be shown in a broad sense that the applicant has need of maintenance and support.
f) Mere disparity in the treatment of beneficiaries is not sufficient to establish a claim.
g) If a breach of moral duty is established, it is not for the court to be generous with the testator’s property beyond ordering such provision as is sufficient to repair the breach.
h) The court’s power does not extend to rewriting a will because of a perception it is unfair.
i) Although the relationship of parent and child is important and carries with it a moral obligation reflected in the Family Protection Act, it is nevertheless an obligation largely defined by the relationship which actually exists between parent and child during their joint lives.
[68] Bill Patterson observes “it is well established that a breach or otherwise of moral duty is to be measured having regard to the situation as it existed at the death of the [will-maker]”.27 He adds, if the Court is satisfied of a breach at the time of death, it may consider “subsequent events in determining what orders should be made to satisfy that need or whether any award remain appropriate”.28
25 Family Protection Act 1955, s 4(1).
26 Vincent v Lewis [2006] NZFLR 812 (HC) at [81].
27 WM Patterson Law of Family Protection and Testamentary Promises (4th ed, LexisNexis, Wellington, 2013) at p 45.
28 At p 45.
[69] David, Martin and Philippa contend Larry breached his moral duty to them as his children. David and Philippa acknowledge when Larry died in 2016, their circumstances largely accorded with the terms of cl 6 of Larry’s operative (2012) will: “financially well off … established careers and significant assets of their own”. Consequently, David and Philippa seek what is known as a recognition award.
[70] Such awards have their genesis in the 2000 decision of the Full Court of Appeal in Williams v Aucutt.29 The Court held the term “support”—from the statutory phrase, “proper maintenance and support”—is an additional and wider term than maintenance, and one connoting provision of comfort. It followed an award may be appropriate to avoid, for example, “a justifiable sense of exclusion from participation in the family estate”.30 Patterson says this type of award ultimately rests on the claimant’s need “for recognition as … part of the deceased’s family”.31
[71] Martin, a qualified engineer, contends his financial position differs from his siblings, and because of this, he should receive a greater proportion of Larry’s estate. When the Queenstown project failed in 2007 and 2008, Martin was the sole guarantor. Martin says he was left “destitute, insolvent and unemployed”.32 Martin says unlike David and Philippa, he has no significant assets or savings, something that has remained unchanged since Larry’s death. Martin and his wife and family rent a home in Bali, where they have lived for many years. David and Phillipa agree Martin should receive a greater share of the estate because of his lesser circumstances.
[72] Judith emphasises the modesty of Larry’s estate; his strong moral duty to her; Larry’s unequivocal testamentary intentions; practical difficulties of an award; and the children’s independence as adults, and financially. Mr Dale observes the children’s solicitors said they would supply more information about Martin’s financial position before the trial, and this was never provided. He argues little is really known about Martin’s financial position even though the children carry the onus of proof.
29 Williams v Aucutt [2000] 2 NZLR 479 (CA).
30 At [52].
31 Patterson, above n 277, at p 29 (emphasis added).
32 Martin’s affidavit at [53]. Martin was not bankrupted. He remained offshore.
Analysis
[73] The children’s claim is not without force. Larry unquestionably owed a moral duty to David, Martin and Philippa as his children, and several factors support the proposition he breached this.
[74] First, David, Martin and Philippa are hurt by Larry’s decision, especially as they believed they would be provided for (it will be recalled Larry showed David his 2002 will and asked for comment).
[75]Second, each child had a long, loving relationship with their father.
[76] Third, the statutory concept (of support) extends to provision of “comfort”. A recognition award could be made here, albeit by a contingent order once the home is sold.33 So, provision for Judith is not necessarily incompatible with provision for the children.
[77] Fourth, Martin’s financial position is weaker than his siblings. Larry did not make this distinction when he died (or when he made the 2012 will). Indeed, Larry appears to have misapprehended Martin had “significant assets” of his own. Whether Martin has enjoyed a successful career or is financially well off—the other matters identified by Larry in cl 6 of his 2012 will—are open to doubt.
[78] But, other factors count against establishment of a breach of a moral duty by Larry in relation to the children.
[79] First, the size of the estate. Larry’s half-share of the home is the only significant asset. The home has a rateable value of $780,000. This figure is likely out of date as Hamilton house prices are rising, and no one adduced a registered valuation. But, if the home is worth say, $1,000,000, Larry’s half-share is confined to $500,000.
[80] Second, Larry’s pre-eminent moral duty was to Judith. He and she loved each other very much. They were married for 17 years and in a relationship for 37. Judith
33 Williams v Aucutt, above n 29, at [52].
was Larry’s primary caregiver from 1999, when the stroke affected his eyesight. As observed, from then, Larry could not drive. Judith’s care of Larry was excellent, despite her own health difficulties in later years. As already noted, Judith was responsible for maintaining the home; its extensive gardens; the couple’s social calendar; and daily household administration. Looking back further, Judith contributed financially to the purchase of the home and established its gardens.
[81] Third, Judith’s financial interests. Retirement homes can be costly. Relatedly, Judith has no means to meet an award unless the home is sold.
[82] Fourth, to find for David, Martin and Philippa would be to dramatically rewrite Larry’s will. It would return everyone to the 2002 will, a will Larry twice repudiated in the 14 years before his death.
[83] Fifth, the children enjoyed the many benefits of Larry’s parenting.34 These endure. The children are now mature, independent adults, each with their own family. David and Philippa have successful careers: David as a barrister and Philippa as an executive. Both were well off when Larry died. They remain so. David earns more than $600,000 per annum. He is mortgage-free; has a holiday home; an investment property; an investment fund; and shares in companies owning two commercial realties.35 Philippa earns $277,000 per annum and has substantial equity in her home in St Heliers. She has retirement savings of more than $500,000 and owns shares worth $190,000.
[84] Sixth, although Martin’s financial position is appreciably weaker than his siblings, he is not destitute. Martin is a qualified professional, with an income. His cost of living in Indonesia is almost certainly cheaper than here.36
[85] Ultimately, I am not persuaded Larry breached his moral duty to the children. I consider decisive the modesty of the estate; Larry’s primary duty to Judith; and her
34 This is not to imply their mother did not play an equally important role. In this case, I am necessarily concerned with Larry.
35 The holiday home and investment property have small mortgages. The other investments have associated debts too.
36 I do not overlook the possibility of Martin returning to New Zealand with his wife and family.
needs. I acknowledge the recognition award case law, and that adult children not in financial need sometimes receive up to 10 per cent of an estate.37 However, every case under the Family Protection Act turns on its facts. Richardson P made the same point in Williams v Aucutt, as did Blanchard J writing separately.38 Those here count against an award.39
[86] I make explicit what was implicit: I do not consider Martin’s position warrants distinction. Martin is an independent adult who enjoyed the benefits of an excellent upbringing. Moreover, imprecision about Martin’s financial position reflects the evidence; more particularly, lack of detailed evidence about his finances. That Martin is without significant assets (such as a home) is clear. So too the fact Martin suffered financially during the global financial crisis. Beyond this, I know little.
[87] Mr Dale made this point in cross-examination. He put to Martin no detailed financial information had been forthcoming about what had happened “from 2008 until January 2017”. Martin replied, “What would you like to know”? In terms of the statute, the children have not demonstrated Larry breached a moral duty to Martin vis-à-vis “proper maintenance and support”.
Conclusion
[88] Judith has established Larry’s 2012 will was made with testamentary capacity. The children have not established the 2012 and 2007 wills were the product of undue influence, or their claim under the Family Protection Act.
Two evidence rulings during the trial
[89] Mr Dale objected to a paragraph in a letter from Mr Nielsen in the common bundle.40 The letter said Mr Nielsen understood the Queenstown development was an investment, not a loan. Mr Dale expressed concern the passage was hearsay. Nothing
37 Chambers v Chambers [2016] NZHC 583 at [114]. For earlier unfavourable commentary, see Richard Sutton and Nicola Peart “Testamentary Claims by Adult Children – The Agony of the ‘Wise and Just Testator’” (2003) 10 Otago LR 385.
38 Williams v Aucutt, above n 29, at [52] and [69].
39 Mr Dale did not expressly assert the children did anything to disentitle themselves of an award, though some of his cross-examination could be conceived this way. I place no weight on possible disentitlement.
40 At 345.
further need be recorded as Mr Nielsen gave the same evidence without objection; the proper characterisation of the Queenstown development is unimportant to the determination of the case; and Mr Dale advanced his objection accordingly.
[90] Mr Dale also objected to Mr Morgan’s re-examination of Martin. Some context is needed. During cross-examination (by Zoom to Indonesia), Martin held up a one-page table that appeared to contain information about his income in recent years. The document was not in the bundle; an exhibit; or otherwise heralded. I heard counsel in chambers. Mr Dale did not object to the document being received in evidence.
[91] Cross-examination then resumed. Mr Dale questioned Martin why the document had not been made available earlier but did not explore what it recorded or meant. In re-examination, Mr Morgan asked Martin to explain the document. Mr Dale objected to this line of questioning.
[92] I upheld the objection because Mr Dale had not explored content during cross- examination, so Mr Morgan’s proposed questioning was not about a matter “arising”.41 Moreover, the children’s solicitors had told Mr Dale they would provide more information about Martin’s financial position before the trial began. This information was never provided. To have allowed re-examination about content would have been, in these circumstances, unfair to the prosecution of Judith’s case.
Orders
[93]Probate is granted in relation to Larry’s 2012 will.
[94]The children’s claims are dismissed.
Costs
[95] Judith would normally be entitled to costs, but I gather she is legally aided. In any event, agreement about costs is (strongly) encouraged. If the parties do not agree, they may file memoranda of not more than seven pages:
41 Evidence Act 2006, s 97.
(a)Judith by 4 December 2020.
(b)David, Martin and Philippa by 18 December 2020.
……………………………..
Downs J
Solicitors/Counsel:
Neilsons Lawyers Ltd, Auckland. Nielsen Law, Hamilton.
PJ Dale QC, Auckland.
PJ Morgan QC, Hamilton.
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