West v West
[2017] NZHC 3110
•13 December 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-002992 [2017] NZHC 3110
BETWEEN ALLAN JACK WEST
Plaintiff
AND
GEOFFREY ALLAN WEST First Defendant
DAVID JOHN CAMERON WEST Second Defendant
THE PARTNERS OF LANGLEY TWIGG LAW
Third Defendants
Hearing: 26-29 September and 27 November 2017 Counsel:
DW Grove for Plaintiff
DM Kerr for First and Second Defendants
CL Bryant and NZ Thomson for Third DefendantsJudgment:
13 December 2017
JUDGMENT OF DOWNS J
This judgment was delivered by me on Wednesday, 13 December 2017 at 3.30 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Vodanovich Law Ltd, Auckland.
Bannister & von Dadelszen, Auckland. Hesketh Henry, Auckland.
DW Grove, Auckland.
DM Kerr, Napier.
WEST v WEST [2017] NZHC 3110 [13 December 2017]
Table of Contents
Para No
The case [1] Background in brief [6] Unconscionable bargain? [18] Disability? [22] Undue influence? [49] Breach of fiduciary duty? [93] Negligence? [96] Conclusion [109] Late evidence [112] Costs [114]
The case
[1] Jack West is 95, albeit in excellent health for his age. Jack lives alone in rural Auckland on an 8.1 hectare property. In 2014 Jack transferred the property to his two adult sons, David and Geoffrey. David is 68; Geoffrey 67. David and Geoffrey paid nothing for the property, which is now worth approximately $1.9 million. However, Jack was to remain living at the property, David and Geoffrey were to meet Jack’s day-to-day “living requirements”, pay all expenses in relation to the property until Jack died, and be responsible for other matters too. Under the terms of Jack’s will before the transfer, David and Geoffrey would have inherited the property.
[2] Jack contends the property should be returned. He says its transfer constitutes an unconscionable bargain and is the product of undue influence, particularly in the absence of independent legal advice.1 Jack also contends the absence of legal advice involved negligence on the part of Mr Guy Wellwood, the solicitor acting on David and Geoffrey’s instructions. David and Geoffrey have also brought proceedings against Mr Wellwood’s firm, Langley Twigg. If the transfer is an unconscionable bargain or the result of undue influence, David and Geoffrey contend this reflects
Mr Wellwood’s negligence. Langley Twigg accepts Mr Wellwood should not have
acted for Jack and his sons, but denies causative negligence.
1 Breach of fiduciary duty is also alleged; see [93]–[95].
[3] Elements of this picture are arguably paradigmatic of an unconscionable bargain, undue influence or both. And yet—as will become apparent—there are significant contrary elements too. Jack is an intelligent former professional who “knows his own mind”. Jack was also the undisputed patriarch, whose wishes were frequently synonymous with instructions. And, Jack has a propensity for conflict in the event of disagreement, real or imagined. Sadly, he appears to enjoy it.
[4] Recent events help set the scene. Jack dismissed his barrister, Mr Grove, the week before closing submissions.2 He accused Mr Grove of, among other things, “callousness”, “attempting to force [Jack] to accept a shonky deal”, “threadbare” argument and “coercive verbals”. I granted Jack’s solicitor leave to withdraw at the same time: Jack accused him of “acting with prejudice and intolerance based on … age”, infringing his rights “as prescribed by the Bill of Rights Act and Human Rights Act”, engaging in “flagrant attempts to mislead”, and being “a party to bullying”.
[5] Jack’s closing submissions were unfortunate. For example, he referred to David as having developed “the remarkable skill of both talking and thinking with his mouth” since the age of two, Geoffrey’s “pretentious lifestyle and bloated vanity”, and both sons’ “massive false and misleading testimony”. Jack accused Geoffrey of hallucinating and creating a false record “comprised of a deluge of hatred”. And, Jack said he was in “Shell-shock” in consequence of his sons’ “plethora of perjury”. Similar observations need not be recorded.
Background in brief
[6] Jack has four children: David and Geoffrey, and Katherine and Elisabeth. Neither daughter played any part in the case. Elisabeth moved overseas many years ago, and she and Jack now have little if any contact. Katherine has experienced what were described as “difficulties”. Nothing in this judgment should be read as
expressing a view on their property rights.
2 Evidence was taken 26–29 September 2017. Mr Grove sought leave to amend the statement of claim on 29 September 2017. Closing submissions were given 27 November 2017. The third amended statement of claim was served on 5 October 2017, and so before Jack’s dismissal of
Mr Grove and Mr Vodanovich’s withdrawal. Jack was offered an audio-visual link (at a court nearer to his home) for closing submissions. He said the link needed to be at his home. I received Jack’s submissions in writing and excused his attendance. Jack said he was “not really interested in what the defendants have to say”.
[7] Jack was a successful dentist. Jack and his second wife bought the property in approximately 1982. Jack developed an apple orchard and later grew organic produce there. Jack and his third wife, Marion, separated in 2012. Jack was then 90. Marion’s departure meant Jack required some domestic help from his neighbour, Sally Palmer. Sally did so under the auspices of Veterans’ Affairs New Zealand, as Jack is a war veteran. Sally’s husband, Murray Palmer, grazed stock on Jack’s property. And their son, Laurence, now provides the domestic help Sally once provided after Jack and Sally had “a difference of opinion”.
[8] In 2005, 2007 and 2014, Jack and his sons discussed Jack’s wishes in relation to the property. At the moment, it is sufficient to observe Jack consistently expressed the view his sons should inherit the property on his death.
[9] As observed, Jack and Marion separated in 2012. In June 2013, Jack suffered a heart attack. A stent was placed in his right coronary artery. Medications were prescribed. Jack contends these had significant side effects operative at the time of, and proximate to, the transfer of the property in November 2014.
[10] The property was transferred from Jack to David and Geoffrey on
26 November 2014.3 Transfer was by sale and purchase agreement, in which the purchase price was forgiven in “consideration of [Jack’s] natural love and affection” for David and Geoffrey. Under the agreement, Jack was entitled to remain in occupation of the property “for as long as he wishes”. David and Geoffrey became responsible for:
(a) All outgoings in connection with the property.
(b) Jack’s day-to-day “living requirements”.
(c) Administration of Jack’s estate and related debt.
(d) Katherine’s “welfare”.
3 The transfer was registered on 6 December 2014.
(e) Assistance in “connection with education or health of any grandchild or great-grandchild” of Jack “on the terms of any understandings” given by him to David and Geoffrey.
[11] A caveat was prepared to protect Jack’s interests, particularly his entitlement to occupy the property.
[12] All was well for a year. Jack and his sons remained in contact. Both continued to visit. In August 2015, David and his wife, Pam, stayed with Jack for a week. However, matters deteriorated in November 2015 after Jack mistakenly sent David an email with an attachment that troubled David. Geoffrey had encountered not dissimilar material on Jack’s computers. Jack and Geoffrey argued. Jack sent emails to Geoffrey’s son suggesting Geoffrey had depression and other mental problems, including “narcissism” and “premature dementia”.
[13] On 19 November 2015 Geoffrey seized Jack’s computers. He was concerned at the nature of Jack’s communications. Geoffrey informed the Police about them, and about an unsecured firearm at the property. They attended.
[14] Matters deteriorated further. Jack instructed a new solicitor, Mr Luke Kemp, and revoked Geoffrey’s enduring power of attorney. Jack contacted Age Concern, alleging Geoffrey was trying to force him into a home. On 9 December 2015
Geoffrey’s solicitors wrote to Mr Kemp seeking Jack’s repayment of a 2008 loan of
$100,000. The letter offered to waive interest in the event of prompt repayment and said the funds would be held on trust should Jack become “in a situation of genuine need”.
[15] Meanwhile, Jack continued to press David to take his side. In an email of
12 December 2015, Jack told David that Geoffrey had “despised you all of your life”; now was David’s “chance to be the top dog”. When David declined to support Jack vis-à-vis Geoffrey, Jack sought to supplant David as owner with David’s wife, son or granddaughter.
[16] On 2 June 2016 Mr Kemp registered the caveat prepared in 2014. Three months later, Jack dispensed with Mr Kemp’s services in favour of Mr Vodanovich, citing breaches of “all ten Rules of Conduct and Client care, “self-righteousness”, “mule-like gormlessness”, “pretentious ‘research’”, “bung[ling]” his affairs and “dirt-bag lawyering”. Other allegations need not be cited.
[17] In November 2016, Jack issued these proceedings against David and Geoffrey.
Unconscionable bargain?
[18] The learned authors of Butler’s Equity and Trusts in New Zealand observe the law of unconscionable bargains seeks to “protect those who, through poverty, infirmity, need, ignorance, or some such disadvantage, are unable to determine whether particular transactions are in their own best interests”.4 Equity will set aside a transaction when a party knew, or ought to have known, of the other’s disadvantage and the stronger party has “actively exploited or passively accepted, a contractual benefit or advantage from the disadvantaged party”.5
[19] Curial assessment of whether the stronger party has obtained an unconscionable bargain is referable to totality of circumstance.6 The Court will examine the respective positions of the parties, the conduct of the stronger party and the substantive fairness of the resulting transaction.7 Inability of the disadvantaged party to make proper judgments as to what is in his or her own best interests is important.8
[20] Similar statements of principle appear in the Court of Appeal’s decision of
Gustav & Co Ltd v Macfield Ltd, which all counsel accepted as correct.9 There, Arnold J for the Court observed:10
4 James Every-Palmer “Unconscionable Bargains” in Andrew Butler (ed) Equity and Trusts in New
Zealand (2nd ed, Thomson Reuters, Wellington, 2009) at [23.1.1].
5 At [23.1.1].
6 Contractors Bonding Ltd v Snee [1992] 2 NZLR 157 (CA) at 174.
7 James Every-Palmer “Unconscionable Bargains”, above n 4, at [23.1.1].
8 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462.
9 Gustav & Co Ltd v Macfield Ltd [2007] NZCA 205.
10 At [30].
We do not propose to analyse these authorities in detail. Rather, we derive the following principles from them. The principles stated are not exhaustive, but are sufficient for the purposes of this case.
1Equity will intervene to relieve a party from the rigours of the common law in respect of an unconscionable bargain.
2This equitable jurisdiction is not intended to relieve parties from “hard” bargains or to save the foolish from their foolishness. Rather, the jurisdiction operates to protect those who enter into bargains when they are under a significant disability or disadvantage from exploitation.
3A qualifying disability or disadvantage does not arise simply from an inequality of bargaining power. Rather, it is a condition or characteristic which significantly diminishes a party’s ability to assess his or her best interests. It is an open-ended concept. Characteristics that are likely to constitute a qualifying disability or disadvantage are ignorance, lack of education, illness, age, mental or physical infirmity, stress or anxiety, but other characteristics may also qualify depending upon the circumstances of the case.
4If one party is under a qualifying disability or disadvantage (the weaker party), the focus shifts to the conduct of the other party (the stronger party). The essential question is whether in the particular circumstances it is unconscionable to permit the stronger party to take the benefit of the bargain.
5Before a finding of unconscionability will be made, the stronger party must know of the weaker party’s disability or disadvantage and must “take advantage of” that disability or disadvantage.
6The requisite knowledge may be that of the principal or an agent, and may be actual or constructive. Factors associated with the substance of a transaction (for example, a marked imbalance in consideration) or the way in which a transaction was concluded (for example, the failure of one party to receive independent advice in relation to a significant transaction) may lead to a finding that the stronger party had constructive knowledge. So, in the particular circumstances the stronger party may be put on enquiry, and in the absence of such enquiry, may be treated as if he or she knew of the disability or disadvantage.
7“Taking advantage of” (or victimisation) in this context encompasses both the active extraction and the passive acceptance of a benefit. Accordingly, as Tipping J said in Bowkett at 457, an unconscionable victimisation will occur where there are:
… circumstances which are either known or which ought to be known to the stronger party in which he has an obligation in equity to say to the weaker party: no, I cannot in all good conscience accept the benefit of this transaction in these circumstances either at all or unless you have full independent advice.
8If these conditions are met, the burden falls on the stronger party to show that the transaction was a fair and reasonable one and should therefore be upheld.
[21] As will be apparent, there is no “test” in this area, bright-line or otherwise. Instead, general principles prevail. This is consistent with equity’s fluidity as a means of preventing or correcting injustice. It follows, as the cases emphasise, regard must be had to all of the facts in light of the principles above.
Disability?
[22] Jack was 92 at the time of the transfer. Self-evidently he was elderly. Some elderly people are vulnerable, and especially so. However, the particular does not always follow the general. And, care must be taken to avoid stereotypes, especially as perceptions of what constitutes “old age” continue to evolve in an aging population. Jack had several infirmities consistent with his age. He required a hearing aid for deafness, occasional use of a walking stick and a rope to get out of a deflated water bed.
[23] This cause of action focused on the alleged effects of medications in the wake of Jack’s 2013 heart attack. Jack was prescribed various medications, including Beta Blockers and ACE Inhibitors. The statement of claim says these made Jack “very unwell, both mentally and physically”, including through:
a. Bradycardia attacks. b. Chronic cough.
c. Physical weakness. d. Extreme tiredness.
e. Mentally unwell including being melancholy, morose, lonely and having dire concerns of his impending death.
f. Depression.
[24] Jack said:
I became extremely weak physically, suffered frequent episodes of pre- syncope and a sense of impending death. My mental alertness fell away, especially over the first eight hours after ingesting the drugs. For most of that
period I would lie in my armchair, have extreme difficulty standing and depended on a walking stick, everywhere, to prevent falling.
[25] Jack said he stopped the medications in April 2016—18 months after the transfer of the property—and felt immediately better. Jack said his mental acuity improved; so too his physical and psychological well-being:
On 25 April 2016 I stopped the drugs on my own volition, the rope was removed, the walking stick made all but redundant, I am mentally alert at all times. When once mainly housebound, I again use my chainsaw, am all but independent with housework, and drive my small farm vehicle around the farm. For over a year my only symptoms come from residual wartime nerve damage and I have found most effective therapies to manage those while remaining in the most cheerful of moods.
[26] Murray and Laurence Palmer provided some support for this evidence. Murray Palmer said Jack was initially “in the best of spirits” after his heart attack, but then became physically weak and “mentally dull”. Mr Palmer said Jack “perked up” in the evening. Laurence Palmer gave similar evidence. Both said Jack changed once he stopped taking the medications.
[27] Dr Miller gave evidence for Jack. Dr Miller is not Jack’s general medical practitioner, and was not even sure who that was.11 Dr Miller first saw Jack on
21 September 2017, five days before trial.12 Dr Miller said Beta Blockers and ACE
Inhibitors have well recognised side effects including tiredness, fatigue, dizziness and pre-syncope—near fainting. Less common side effects include depression. Dr Miller said some of Jack’s statements to him “would fit” with depressive traits, though it would be “rash” of him to offer an “impression” of clinical depression, given his “short time” with Jack. Dr Miller said the drugs’ effects could well be “intermittent and episodic”, and influenced by lifestyle; for example, consumption of alcohol. Dr Miller agreed his “brief” had been to assess Jack’s fitness for attending court, not more.
[28] David and Geoffrey West gave evidence contrary to Jack’s: each said their father remained well despite his heart attack, particularly for his age. David has lived in the Hawkes Bay for many years, but spoke to Jack almost every night by telephone.
He would also visit. David said his father was, in 2014, in good physical and mental
11 Dr Tovey was Jack’s general practitioner; see [39].
12 West v West HC Auckland CIV-2016-404-002992, 25 September 2017 (Oral Ruling).
health. Geoffrey lived on the North Shore. He visited his father regularly and would help with chores. Geoffrey described Jack’s health this way:
In the early part of 2014 my father was still driving his car. It is a very low- slung model which he was able to enter and alight from quite easily. He very rarely wore his hearing aids, although he sometimes did at parties, and he was able to hear the phone ring whenever I would phone to catch up with him. He was able to carry on a normal conversation in person, too, albeit with slightly raised voices. He had recently passed the eyesight test to extend his driving licence and his self-driven visits to Westgate Shopping Mall, a round trip of over 50 kilometres, were not a problem. Upon reaching his destination his walking was aided by the use of a walking stick.
In 2014, therefore, for a man approaching 92 years of age, my father was able to be self-sufficient in cooking, bathing and transporting himself. I would say his mental acuity was exceptional for a man his age.
[29] The parties attacked each other’s witnesses as being interested in the outcome, and in conflict on related and unrelated matters. For example, Murray Palmer said Geoffrey never showed any interest in the property, deliberately released Mr Palmer’s stock, and had sought to ostracise Jack from the Palmers’ support.13 Geoffrey said the Palmers enjoyed a hot and cold relationship with Jack, frequently annoying him only to then socialise together; and the Palmers’ testimony reflected little more than their self-interest in being able to use some of the property as they liked, as they had done for many years when Jack was the owner. Not inconsiderable evidence was devoted to tit-for-tat allegations, which, at times, risked overshadowing the real issues.
[30] I considered these points and associated evidence unhelpful. It is sufficient to observe no witness of fact was truly independent, and I approached my task with this firmly in mind. What then of disability?
[31] I am wholly satisfied Jack was not under disability in 2014, or thereafter. I find Jack remained capable of assessing his best interests, albeit he might have occasionally experienced some of the symptoms described by Dr Miller. More
particularly, I conclude Jack’s testimony on this topic was materially inaccurate;
13 For example, Mr Grove highlighted on 2 May 2016 the sons, through their solicitors, prohibited the Palmers from entering the property other than in accordance with their contractual obligations with Veterans’ Affairs. Geoffrey and David responded Vector was cutting trees on the property, they could be liable if someone was injured, and hence the need to restrict access.
likewise, the lesser evidence given by Murray and Laurence Palmer. Eight reasons unite these conclusions.
[32] First, Jack has a penchant for medical jargon. His evidence was peppered with medical terms: “palpating” the “left vagus nerve”, “bradycardia”, “right coronary artery”, “epigastric pain”, “presyncope” and “visceral angioedema” are examples only. To give another example, when Jack sought an audio-visual link to his home for closing submissions, he referred to a “thinly walled diverticular pouch in my sigmoid colon”, and “constant post-traumatic cervical vertigo” that elevated the risk of a fall with “high morbidity”. True, Jack is a retired dentist. However, I have no doubt Jack’s frequent offerings of medical terminology were intended to persuade rather than inform. There is direct evidence to support this conclusion: Murray Palmer accepted in cross-examination Jack had “suggested some of the words, particularly the medical terms” for Mr Palmer’s brief of evidence.
[33] Second, much of Jack’s testimony about his health was based on retrospective self-diagnosis. Jack is an avid internet user who enjoys digital research. And, Jack tends to regard his medical expertise as both embracing and superior. Jack’s brief of evidence is illustrative. It makes clear he concluded the medications prescribed following his heart attack caused him to suffer disability for much of 2014. The brief also implies it was prepared with the benefit of his own (most likely digital) research:
11. Lisinopril is rated as the main causative agent for angioedema of the airway and viscera. Statistics suggest 20% of airway incidents are fatal. I experienced, in the early hours of that Anzac Day, an epigastric attack with pain so intense I could have welcomed death before it suddenly disappeared after 3 hours. I did not call St John, as admission to hospital would have put me at great risk of being “cut open”.
12. I knew that would be a mistake and chose not to expose myself to that risk.
13. A neuropathy, consequent of my wartime injuries, caused significant random bradycardia episodes from 1945 onwards. Beta blockers also produce bradycardia. My heart rate frequently fell to life-threatening rates and at those times my brain would be starved of oxygen. My mood would often be of “wanting to die”.
14. Even worse was the impact of the drug Lisinopril, designed to suppress the hormone, adrenaline, our “fight or flight” hormone. With that “instinct” gone its effect is confused decision making and inability to concentrate.
15. Medical documentation of these dire side-effects is profuse and evidence suggests that for between 10% and 15% of users the adverse outcomes are severe.
[34] Third, Jack did not complain he was unwell in this period to either Geoffrey or David, with each of whom he was then close. Neither considered him unwell either. It will be recalled David and Jack spoke almost daily on the phone, and Geoffrey visited regularly. If Jack had been as he described, I am quite satisfied both sons would have sought prompt medical attention. To recapitulate, he and they were close until November 2015, and so until well after the transfer of Jack’s property.
[35] To pause here, Mr Grove cross-examined Geoffrey about diary entries in which Geoffrey described Jack as lonely, lethargic, melancholy, or as having slept until well into the day. Jack contended these provided material support for his evidence, particularly as to disability.
[36] Geoffrey, who is also a retired dentist, is a record keeper. From 15 July 2013— and hence before any significant event in relation to this case—Geoffrey began making comprehensive diary entries in relation to his father. Jack had been married three times, and Geoffrey was worried history may repeat itself in some way, especially as he believed Jack was drinking more than he should. Geoffrey had related reservations about the Palmers’ intentions. Hence the diary. The entries between
16 February and 11 March 2014 comprise an example of Geoffrey’s record keeping (readers will note reference to loneliness on the 11th). AJW refers to Jack, DW is David and GW is Geoffrey:
16/2/14—No parties this weekend. [AJW] has lodged complaint today with
Police Complaints Authority via email re. “plod” visiting him.
18/2/14—[AJW] rang about 4pm. Talked about Brendan McC etc. Came home from dentist to find Harry dead. DW rang 7-45pm. Palmers over
drinking with AJW.
19/2/14—DW called. AJW buggered after party last night. Slept most of day.
SP buried cat. McG coming back in Oct—called AJW. SP says she has done weeding. GW to check.
20/2/14—GW to Muriwai. Firewood. MP showed up quickly. SP
chainsawing elsewhere on farm—must think I am grabbing all the wood. Weed-eating Decided to stay the night. No evidence of SP “weeding”.
AJW rang and invited the palmers over for a drink as he had a guest (me).
Seemed to spook them and they declined. Another email to Megan
Fairley. Dinner of lamb chops.
21/2/14—Out at 7-30am doing firewood. Could hear SP operating c/saw from
9-00am. Too hot so left at 11-30am. Away south for 10 days—told AJW. He seemed to appreciate me staying over. (I expect other tractor to
disappear while I am away) Cleaned out spoutings. Took photos of
dreadful state of shower and AJW’s bathroom.
27/2/14—Party night with Palmers. Was on 5th drink when DW rang at
8-15pm.
28/2/14—Slept most of the day. Flounder at 7-30pm and then going to bed.
1/3/14—Cole, wife and kids arrived at Muriwai. Got a lecture about not calling first. Kade has moved out of house and Laury has moved in.
5/3/14—GW took AJW to Dental luncheon. Picked up at 11am after helping
to dress him. Shopping Highbury 3pm on way home.
8/3/14—AJW rang this morning. Just wanted to chat about rugby, Palembang, memoires etc. LONELY. DW rang tonight. Party with the Palmers! AJW rang him 4-5 times last night. Lonely. Wanted to know when DW next up and for how long. Wants to jack DW up with Delwyn. Obviously had too much to drink!
11/3/14—GW to Muriwai. Cleaned out small lean-to shed by chiller to put 4 ute-loads of firewood in. Spoke to AJW on deck when I arrived. Seemed
lonely and wanted to talk. Said “fight with St Johns and HDC nearly over”.—suspect he may have had another visit from the police but
whatever, he is going to let it lie. (However when I finished work and went inside he was in the middle of another long email. (Had “character assassination” up on thesaurus screen). Mowed all lawns and right upd/way to lemon tree. No evidence of SP doing any gardening. (She used to mow the lawn). Chatted inside with AJW again. (About war, what he
was paid, salt intake, his father, old bank managers, Rincoln, Debreceny, Ken Porter).
[37] Entries of this nature do not advance Jack’s case. Geoffrey’s diary makes it clear Jack was remarkably independent, alert and active for his age. He socialised regularly, went to the Palmers for drinks (which Jack described as “partying”), stayed up late on his computers, corresponded into the early hours—and then frequently slept in. References to tiredness and lethargy need to be understood in this context; so too occasional references to Jack being melancholy or morose. Or, as Geoffrey said in evidence:
Some mornings when I went to visit my father, and it’s noted in my diary, he would be a little lethargic but he would’ve been up on the computer all night so my father didn’t live by the normal circadian rhythm, for somebody his age, his sleep patterns vary and it’s well known that the older we get, our sleep patterns become irregular. He would tell me that he’s been up – we would actually receive emails generated by him at 1.00 or 2.00 in the morning and so it would be understandable at 10.00 or 11.00 in the morning, he may be getting some recovered sleep. Occasionally that happened, I’d arrive at his place at 10 o’clock in the morning and he would actually sometimes still be in bed listening to the radio. So his sleep patterns and physical ability did vary from time to time and I’m best witness to that because I was there an awful lot of the time rather than the Palmers.
[38] The obvious should not be overlooked either: occasional loneliness or anxiety about death is not unheard of in the elderly.
[39] Fourth, Jack never sought advice from his general practitioner, Dr Tovey, about the alleged symptoms, nor complained to Dr Tovey of them. That Jack seems to have seen Dr Tovey irregularly also implies he was well. Jack did see Dr Tovey on 10 April
2015, as Geoffrey took him and recorded the event. Geoffrey’s diary entry is silent on symptoms of alleged disability; it refers to a “check-up, eye test, flu injection”, and Dr Tovey being “concerned (only) about weight gain”.14 On the face of the entry, the visit appears to have been routine.
[40] When cross-examined on this topic, Jack initially suggested the entry was less than accurate: “Geoff’s … creative ability is much better than mine”. However, Jack then accepted he had not raised the issue with Dr Tovey, albeit because he had not then drawn a link between his symptoms and medications. But even on this argument, Jack did not complain about any of the alleged symptoms to his own doctor. In cross-examination, Jack said he raised or attempted to raise the symptoms on approximately three occasions, with a doctor or doctors at North Shore Hospital. This evidence is unsupported by anything in the record; Jack did not adduce any of his medical records in evidence.15 And, Dr Miller’s testimony was advanced without reference to Jack’s general practitioner’s notes.
[41] Fifth, while the Palmers’ evidence provided some support for Jack’s account, their evidence also suffered blemishes:
(a) Murray Palmer accepted Jack “suggested some of the words, particularly the medical terms” for his brief of evidence. Unsurprisingly, Mr Palmer did not know what some meant; for example, “visceral angioedema”.
(b)Murray Palmer’s evidence softened. His brief of evidence implied Jack had grave difficulty with simple tasks such as getting out of bed and
14 The diary entry says Dr Tovey ordered a CT scan because of this.
15 I was told some medical records were discovered, including those from North Shore Hospital.
walking. In cross-examination, Mr Palmer accepted Jack’s use of a walking stick was no more than “occasional”, and Jack still cooked for himself.
(c) Aspects of the Palmers’ evidence were based exclusively on Jack’s self-reporting. Murray Palmer referred to Jack suffering a “total physical breakdown” in 1994. In cross-examination, Mr Palmer accepted he knew nothing about this beyond what he had been told by Jack. Laurence Palmer’s brief of evidence said, “It’s my view that the pills were causing [Jack] enormous problems.” Laurence agreed in cross-examination he did not know “anything about” the pills.
(d)Murray Palmer timed the change in Jack’s health by reference to a conversation in which Jack said he felt better since he had stopped taking his medications. Mr Palmer could not identify when the conversation occurred or link the apparent change to an independent event. The same conversation confirms Jack’s diagnosis as his own; see [25]. Mr Palmer said Jack had “read something online … that medication … he was on had side effects for some people and so he decided to stop taking it...”.
(e) Murray Palmer agreed Jack “perked up” and was “brighter” in the evenings. He also agreed this was while Jack drank wine with them.
[42] Sixth, it was common ground at trial—presumably because it was self-evident—Jack is a particularly forceful individual who speaks his mind, often acerbically, or worse. Murray Palmer described him as “strong willed”, someone who is not afraid to “call a spade a spade”, and “someone who knows what he wants”. Geoffrey and David both referred to Jack’s propensity for unfortunate correspondence, both within the family and beyond. For the moment, it is sufficient to observe if Jack had been unwell from the middle of 2013 until early 2016, it is highly likely to the point of near certainty he would have communicated this unequivocally—and repeatedly—during this period.
[43] Seventh, Jack’s prolific correspondence demonstrates his acuity was not affected by medication or indeed, anything else in this period. Any number of examples could be cited; what follows is a brief selection only from May 2013, the month before Jack suffered a heart attack, to May 2016, the month after Jack stopped taking heart medications:
(a) On 9 May 2013 Jack emailed his sons to complain about his ongoing dispute with Veterans’ Affairs. Jack wanted more paid home help. Jack told Geoffrey and David the claims panel had engaged “in a rort” and was “both invalid and illegally constituted”. Jack asked Geoffrey and David to certify he remained legally competent to apply for a higher pension, informing them if that’s what Veterans’ Affairs wanted, “that’s what they’ll get”.
(b)On 20 February 2014 Jack sent an email to the St John’s Ambulance Service, which he copied to the Health and Disabilities Commissioner. The email concerned a dispute between Jack and St John’s. Jack spent two days in hospital in August 2013 after nearly fainting. He was dissatisfied with St John’s service. In the email, Jack accused an identified St John’s officer of having “sneaked off to the Police, [and] suckering that entity into paying me a visit”. Jack described himself as a “person of great restraint, courtesy and discretion”, whereas a second identified St John’s officer was “untrustworthy and unpredictable”, a “loose cannon” and “time bomb”. Jack also referred to that officer’s “malignant narcissism [being] as conspicuous as a greyhound’s kidneys”.16
(c) On 5 August 2014 Jack sent an email to David in relation to a concern Murray Palmer was taking wood from the property and selling it as firewood on Trade Me. Jack referred to Murray as “VERY defensive when I told him I would go for a shofty”. He invited David to remind
him about Murray when he was next up; Jack offered to give David
16 St John’s Ambulance Service responded by email on 14 April 2014.
information he “may need in the future”. Jack acknowledged he might have wrongly accused Laurence of taking “liberties” in relation to the wood. Jack said he would take Laurence “under my wing”, offering to “bribe Laurence with more wood, but under my rules”. Jack concluded he was “pretty sure Murray is the culprit”.
(d)On 30 September 2014 Jack sent an email to his nephew in relation to whom he was both “disappointed” and “disgusted”. The lengthy email referred extensively to family matters, including a “madly jealous nana” who had “destroyed the family” with “the support of our maniac legal system”. The email concluded by Jack inviting the nephew to come to the property at 3 pm on Friday 17 October 2014 when Geoffrey and David would both be there; and with reference to Hamlet: “This, above all, to thine own self be true, and it must follow, as the night, the day, thou canst not be, be falst any man”.
(e) On 9 October 2014 Jack sent his nephew a similar email to that above.
In this message, Jack invited his nephew to go and “get a vasectomy ... just in case you meet another woman who is not as smart as [M]. Narcissism is hereditary and I don’t need any greatgrandchildren with your disease!”.
(f) On 24 November 2014 Jack sent an email to the Health and Disabilities Commissioner about the Commissioner’s alleged “failure to conduct faithful investigation into and to deliver a rational decision concerning my complaints against St John Ambulance and sundry staff”. Jack accused the Commissioner of “factual errors”, “biased and negligent omissions”, and “manipulative and evasive correspondence”. Jack said he would “nominate your many violations of due process, natural justice and even common law”. Jack identified 12 points in relation to which he demanded a response. The email concluded by inviting the Commissioner not to “palm me off onto your sidekicks again; they write more piffle than do you. Answers and reasons, please, for your own actions and inactions”.
(g)On 8 December 2014 Jack sent an email to a grandson in relation to whom Jack now had to “close the door”. Jack said his grandson had “robbed our house like [a] crook”.
(h)On 13 October 2015 Jack sent an email to David, in which he referred to his dispute with the nephew above. Jack described his nephew of taking it upon himself “to revise history, despite his utter ignorance of all material evidence, most still on record”. The email discussed the nephew’s “arrogant smear” of Jack based on “the words of the woman who lied to and cheated her own sons as she had done to her husband, her in-laws and a wide range of others in the community, over her lifetime”. Jack described himself as “always acting with honour and restraint” and “with absorbing whatever blows life” may deal him.
(i)On 2 April 2016 Jack sent an email to Mr Kemp, the solicitor he had retained in early December 2015, copied to Mr Wellwood and others, in which he set out why the property should be returned to him. In the
three-page email, Jack said the transfer was tainted by “undue influence”, “unconscionable dealing”, “exploitation” and “verbal falsehood”. Jack described Geoffrey as being in a “psychotic rage”, and David as having failed to protect him from Geoffrey’s “destruction and vindictive abuse”. Jack described David as the “chief liar and instigator of false accusations against Mr and Mrs Palmer”, who “retired to the sidelines when Geoff rioted”. The email concluded, “Negotiations are now open”.
(j)On 17 May 2016 Jack responded to an email from David the same evening. David said he had arranged for an electrician to come to the property to fix a light and any other electrical matters requiring attention. Jack told David the electrician would not be able to call him as Spark had cut off the phone, in turn because David and “your idiot brother” had let “the rats run free”. The email ended, “Being a pair of bastards will cost you”.
[44] As will be apparent, Jack’s correspondence did not change: that sent while supposedly under disability is no different from that sent before Jack suffered a heart attack, or after cessation of heart medications.
[45] Eighth, by early December 2015 Jack had retained a solicitor, Mr Kemp, in relation to the transfer. And by then, Jack had already protested, strongly, about it. This continued into 2016; see, for example his email at [43](i). Jack said he stopped his heart medications on 25 April 2016, hence five months after first asserting the property should be returned. Consequently, it is awkward to contend medications left Jack with diminished capacity to assess his own interests when the same medications did not prevent him from robustly advocating for the property’s return to a newly instructed lawyer, Geoffrey, David and several others.
[46] The pleadings (prepared by Mr Grove) do not assert disability through more general circumstance; for example, a combination of old age, ill-health because of that, vulnerability through living alone including but not limited to loneliness, and related circumstance.17 However, Mr Kerr for Geoffrey and David responsibly accepted disability in this context could arise through the cumulative effect of otherwise mundane matters. Equally, however, Mr Kerr rightly emphasised whatever the cause of disability, the result must be the same: diminution or impairment of a person’s ability to assess his or her best interests.
[47] I am satisfied the result would be the same even if the case had been approached on the basis disability arose from totality of circumstance. As at 2014,
Jack was still driving, growing vegetables, cooking for himself (he still does), getting
17 In Round v Round [2017] NZHC 428, the High Court took judicial notice of a paper published by the International Psychogeriatric Association setting out the risk factors for undue influence (Pesiah et al, The wills of older people: risk factors for undue influences (2008)). Risk factors may include:
(a) A relationship with the influencer which creates an opportunity.
(b) Social isolation of the impaired person.
(c) Family conflict.
(d) Physical or psychological dependency on a carer.(e) Physical disabilities that isolate the influenced party.
(f) Emotional vulnerability arising from loneliness, ill health, fear of abandonment.
(g) Personality disorders that result in a significant disturbance of social relationships or excessive dependency.
(h) Substance abuse.
(i) Mental disorder.
his own firewood and living independently, albeit with some help from the Palmers and his two sons, particularly Geoffrey. More importantly, as discussed earlier, Jack’s email correspondence demonstrates he could assess, assert and protect his own position throughout the relevant period. Dr Miller examined Jack on 21 September
2017. Dr Miller described Jack as then “fully capable to make his own decisions”. I find the position no different from 2013 on. The preponderance of evidence demonstrates an elderly man in excellent health for his age, and one who was fully capable of discerning and advancing his own interests—frequently combatively.
[48] It follows Jack was not under a disability before, during or after the property’s transfer. So, no issue arises of knowledge of disability, actual or otherwise. This conclusion is sufficient to dispose of the unconscionable bargain claim. However, because Jack did not have independent legal advice, and because the transfer must also be assessed vis-à-vis the alternative claim of undue influence, I also consider, for completeness, whether David and Geoffrey took advantage of Jack. These questions are factually interrelated in any event. But first, something about the law of undue influence.
Undue influence?
[49] The equitable concepts of undue influence and unconscionable bargain are similar but distinct. Richardson J helpfully distinguished the two in Contractors Bonding Ltd v Snee:18
… a plea of undue influence attacks the sufficiency of consent; a plea that a bargain is unconscionable invokes relief against an unfair advantage gained by an unconscientious use of power by a stronger party against a weaker.
[50] Applicable principle was identified by the Court of Appeal in Green v Green.19
Transposed to this case:
(a) Jack must prove on the balance of probabilities his sons’ influence led to the transaction, and that influence was undue: that is, not the product
of free exercise of independent will.
18 Contractors Bonding Ltd v Snee [1992] 2 NZLR 157 (CA) at 165.
19 Green v Green [2016] NZCA 486, [2017] 2 NZLR 321.
(b)Alternatively, if Jack establishes a relationship of influence, meaning, he reposed trust and confidence in his sons, particularly in relation to the management of his financial affairs, and if the transaction “calls for explanation”, the law presumes the transfer was the product of undue influence. This presumption, if engaged, is rebuttable.
(c) There is no requirement for Geoffrey, David or both, to have acted unconscionably or in bad faith, or for any pressure by one, other or both to have been wrongful or improper. The focus remains on the alleged impairment of Jack’s free will.
[51] I start with (b), as it affects the onus of proof. Jack has satisfied me a relationship of influence existed with his sons. My reasons here can be brief.
[52] Both sons held enduring powers of attorney. Geoffrey knew the PIN for his father’s bank accounts. Each son, on occasions, conveyed Jack’s legal instructions to solicitors of their own. In 2013 and 2014, Jack’s correspondence referred to his sons as his executors and attorneys. In the same period, Jack sought their input in relation to his plans for disposal of his estate. Jack’s other correspondence reveals his sons’ support as important. For example, he copied much of his correspondence to them, seemingly for their approval. (I acknowledge Jack appears to have adopted a generous view about who might have been interested in his commentaries.) It is clear until November 2015, Jack and his sons were close. Geoffrey visited regularly. David visited when he could (from the Hawke’s Bay), and called Jack almost daily. There was mutual affection and trust.
[53] However, Jack has not satisfied me the transfer calls for an explanation in the sense that phrase is understood. In Willis v Thompson, Moore J referred to an article
by Stephen Kós QC, as he then was:20
Secondly, the requirement that the transaction also “call for explanation” should not be invested with too much mystique. It simply defines a modest threshold of scepticism that must be crossed before the onus shifts. All that is
20 Willis v Thompson [2017] NZHC 1645, [2017] NZAR 1448 at [109] referring to Stephen Kós QC “Undue Influence” in Equity and Trusts in New Zealand, above n 4, at [22.6.2(2)].
required is that the transaction “is not readily explicable by the relationship of the parties”. Something must seem to be amiss, calling for explanation. Typically the transaction will in fact be a gift. If that gift in all its aspects appears the product of the natural warmth and affection underlying the relationship, the onus does not move. But if a question is left as to whether the gift is not the product of a healthy relationship, but rather the abuse of an unhealthy relationship, then the onus will transfer.
[54] True, the transfer of Jack’s land and chattels to Geoffrey and David meant he could not deal with those in the event of disagreement, or if Jack later decided to make different testamentary arrangements. Jack was also vulnerable if his sons failed to comply with their obligations. However, nothing is “amiss” in the sense described by Stephen Kós.
[55] First, Jack wanted to live at the property until his death. But, he did not want the responsibilities of ownership. Given his age, that position made sense.
[56] Second, the transfer did not affect Jack’s daily life. His war pension more than covered his living expenses. And, he had $130,000 in the bank.
[57] Third, David and Geoffrey became responsible for all outgoings in relation to the property, and Jack’s day to day “living requirements”. They were also responsible for the administration of Jack’s estate, related debt, Katherine’s welfare and assistance for the grandchildren “on the terms of any understandings” given by Jack to David and Geoffrey. Jack maintained influence in family affairs, but divested himself of responsibility for them.
[58] Fourth, Jack had the benefit of an enforceable agreement, protected by a caveat. Subsequent events show Jack could assert his interests through that mechanism.
[59] Fifth, Jack had intended for Geoffrey and David to be his final beneficiaries since at least 2007. The relationship was one of mutual trust and affection. In a sense, the arrangement brought forward what would otherwise happen when Jack died.
[60] Sixth, Jack considered, not unreasonably, he did not have long to live. He had expressed concerns his will might be challenged by WINZ, his daughter Elisabeth, and possibly his former wife, Marion.
[61] Seventh, Jack’s accountant supported the transfer as a useful winding up of his business affairs.
[62] In summary, the transfer and associated arrangements appear to have been the product of a relationship of mutual trust and affection, and constituted an associated early tidying up of Jack’s affairs. It follows the onus of proof remains on Jack to establish his sons’ influence led to the transfer, and their influence was undue in the sense described earlier. As foreshadowed at [48], these issues and whether David and Geoffrey took advantage of Jack—an outstanding element of the failed unconscionable bargain claim—are interrelated on the facts.
[63] The idea to transfer the property to Geoffrey and David was Jack’s own. On
31 March 2014 he sent an email to David, copied to Geoffrey and Geoffrey’s wife, in which he invited “serious thought about the now outdated will” and to “make enough time to discuss it with me” when David next visited. Jack was concerned “rapidly advancing state interference is turning many wills upside down”. He was also concerned Katherine was on the “dole”, WINZ may interfere, or Katherine may “blow” her inheritance. In cross-examination, Jack accepted this reflected his thinking in early 2014.
[64] On 6 September 2014, David emailed Jack to say he had booked flights for the weekend of 17 October 2014 to discuss arrangements in relation to the property. David suggested his father “start collating some of your wishes ... so that between now and the 17th we can check out any implications, legal, tax, personal etc that could occur”. The email concluded by David observing he and Geoffrey “want to be certain … we cover all your wishes and needs”. It was sent at 2.06 pm.
[65] Jack replied within two hours. At 3.47 pm he responded:
Easy. I wish to unload all of my property but with the right to occupy the house, in peace till I die. I want to retain some sort of lien on it or some of it
to meet any extraordinary costs for more intensive care, if required, if I don’t go quickly. I want to make a few special bequests and instructions so will need my present will to check on. I would like to sort it by Xmas if possible. I qualify for a rates rebate this year so that needs looking at.
It is the practicality and wisdom of this idea that needs some thought and if there are no risks for my end of life wellbeing, it could work out fine. As you know I [won’t] leave Kate any cash but I want her welfare guaranteed. That she is a beneficiary must be carefully taken into account as I don’t want WINZ poking their noses in.
Hoots is another special case to be negotiated through.
There will be masses of notes to take as there are special features on the farm you should know about, too.
...
[66] Jack accepted he told Geoffrey and David at the October meeting he wanted to transfer the property to them so he would not have to deal with its maintenance or outgoings, provided he continued to live there. Jack also accepted he instructed David that weekend to engage Mr Wellwood of Langley Twigg to prepare the paperwork.21
Mr Wellwood had acted for David for many years, and met Jack. Mr Wellwood had drafted a will for Jack in 2007. And like Jack, he was interested in World War II.
[67] David engaged Mr Wellwood accordingly. It is common ground Jack did not deal with Mr Wellwood; David did. He and Mr Wellwood flew to Auckland on
26 November 2014 so the documents could be signed at Jack’s property, including a revised will. Geoffrey was present. So too a Justice of the Peace to witness Jack’s signature to the will.
[68] Mr Grove cross-examined to the effect the papers did not reflect Jack’s instructions. Jack said as much in testimony. Jack also said he did not receive any of the papers before the November meeting. More particularly, Jack said that day he felt: “This is a trap … and it’s pretty intimidating”. Jack said he signed the documents in the absence of a genuine choice, having only then appreciated Geoffrey and David had “set up … a trap” in relation to his property. Jack said he told Mr Wellwood not to
bother explaining the documents as he knew he’d been “ambushed”; “I thought let’s
21 Jack later said he expected Mr Wellwood to come to the property to take his instructions. This aspect is inconsistent with the evidence of David, Geoffrey and Mr Wellwood. And, related circumstance.
sign the damn thing and get them out of here”. Unsurprisingly, Jack put these pieces of evidence at the heart of his claim for undue influence.
[69] I am satisfied Jack’s testimony on these matters is at best inaccurate for seven reasons.
[70] First, it is clear Jack received the papers before the meeting. David said he sent them to Jack by courier, and relayed Jack’s observations to Mr Wellwood. That evidence is consistent with Mr Wellwood’s, who said the changes requested by David were expressed as emanating from Jack. Langley Twigg’s file supports the evidence of both witnesses, for, various corrections were made, including the removal of a legacy for Elisabeth and the addition of grandchildren to the group for whom David and Geoffrey were to be responsible vis-à-vis education and health.
[71] It is almost certain Jack asked for these changes. He considered Elisabeth no longer worthy of a legacy after contact between the pair ended. Conversely, Jack was particularly fond of a granddaughter. Furthermore, David said he saw the documents on Jack’s computer sideboard when he and Mr Wellwood arrived on 26 November
2014. Geoffrey said he had earlier seen the documents in a similar place. And Jack accepted he had, on occasions, been sent courier packages by David (albeit not containing documents).
[72] Broader circumstance is also relevant. It is inherently unlikely David would fly Mr Wellwood to Auckland unless his father was content with the arrangements. Everyone was conscious Jack could be forceful. If he disagreed, time, effort and money would have been wasted.
[73] Second, the papers prepared by Mr Wellwood reflected Jack’s intentions in relation to the property. Materially, Jack accepted as much in cross-examination, albeit he said the arrangements were incomplete in two respects: they did not provide for ongoing management of the farm by the Palmers, or for renovations to the home.22
Both alleged omissions are explained by the evidence.
22 Jack also said in cross-examination his original intention had been to give Murray Palmer a right of first refusal, as he had told Jack he could borrow money from a relative to buy the property. However, Mr Palmer said he was never able to buy the property and did not want to. I consider
[74] The 2007 will prepared by Mr Wellwood afforded discretion to allow Murray Palmer to continue to farm some of the property “for a reasonable period” after Jack’s death in recognition of his “care and friendship”. David and Geoffrey said at the October meeting, Jack did not want this provision to endure. That testimony accords with circumstance. It will be recalled in or about August Jack had accused Murray Palmer of removing wood from the property and selling it, without permission, on Trade Me. Mr Wellwood said David told him in November Jack wanted to remove provision for the Palmers, as Jack had fallen out with them.
[75] Moreover, Geoffrey, David, Jack and Mr Wellwood went for a drive around the property on 26 November. It was common ground the Palmers’ apparent mismanagement of the property was a topic of discussion. Finally, Jack accepted in cross-examination this provision did not need to be reduced to writing.
[76] Jack also said the papers were silent on renovations to his house, which his sons had agreed should be made. It is clear from Geoffrey’s diary Jack had referred to this topic in the weeks leading up to 26 November 2014. David knew of it too. However, in evidence, both sons accepted they were responsible for renovating the house. And, both had been in discussion with Jack about this in November 2015 when the relationship soured.
[77] I find Jack was content with this topic not being reduced to writing either. Jack trusted his sons to complete the work, which would add to the value of what was now their property. More importantly, it is clear Geoffrey and David wanted to renovate the home to ensure their father was comfortable there. For example, Geoffrey’s diary records he took photographs “of the dreadful state of the shower and … bathroom” on
21 February 2014. (He cleaned the guttering the same day.)
[78] Third, Jack’s contact with Mr Wellwood in the balance of 2014 is inconsistent with Jack having perceived him as party to an “ambush”:
Jack mistaken on this issue given Mr Palmer’s evidence and other evidence the property was to go to Geoffrey and David when Jack died.
(a) Mr Wellwood called Jack in the week after 26 November 2014. The conversation is notable for being unremarkable; Jack said nothing to suggest he was troubled by events of 26 November.
(b)On 19 December 2014 Jack sent Mr Wellwood an email which he copied to David, Geoffrey and others. The two-page message described aspects of the war in the Pacific, including the bombing of Hiroshima and battle for Okinawa. The email was obviously written mindful of Mr Wellwood’s interest in this unfortunate period.
[79] Fourth, Jack’s evidence he did not let Mr Wellwood explain the documents to him is inconsistent with Mr Wellwood’s later preparation of a caveat. To elaborate, Mr Wellwood said he explained the documents to Jack clause by clause, and while doing so, recommended Jack put a caveat on the property. On 22 December 2014
Mr Wellwood sent a caveat to David for Jack to sign. The covering email asked David to tell his father “I have enjoyed his stories … he has emailed”, a reference presumably to Jack’s email of 19 December 2014 described above.
[80] Fifth, Jack did not raise any concern about the transfer—with anyone—until a year later. Jack remained a prolific correspondent in this period, and as discussed earlier, was anything but shy about asserting his rights. I consider it inconceivable Jack said or did nothing for 12 months believing he had been victimised by his sons— especially given Jack’s reaction to lesser infelicities. Two pieces of evidence buttress this conclusion:
(a) When Jack received a rates bill for the property in early August 2015, he wrote an email to the Auckland Council, addressed “Dear Len”. The email, which was clearly light-hearted, invited Mr Brown to “provide proof” Jack owned the land, “as to the best of my knowledge, I disposed of it to new owners over six months ago”. Jack copied the email to Geoffrey, David and Mr Wellwood. It is beyond argument everyone was still on the best of terms, as Mr Wellwood replied by extending Jack birthday congratulations, to whom he referred as “the great man”.
(b) Jack was cross-examined about an email he sent to a friend on
5 December 2015, in which he discussed the transfer. It was put to Jack the email said nothing about having been “hoodwinked … or pressured” by his sons in relation to the property. Jack’s response was telling. He said: “Well I wouldn’t say that because I knew it wasn’t correct. I wouldn’t say that they – I don’t say things that are not accurate”.
[81] Sixth, I am satisfied Jack was legally competent and not under anyone’s influence when he signed the documents on 26 November 2014. I am equally satisfied Jack proceeded with the transfer because he wanted to—as its architect. Jack had raised the topic in March that year. When later asked to outline his thoughts, he immediately did so.23 The transfer reflected Jack’s intentions, and was largely consistent with his earlier will, in which Geoffrey and David were the final beneficiaries.
[82] Unsurprisingly then, Geoffrey, David and Mr Wellwood said the occasion was a happy one. The group enjoyed lunch together and then toured the property. Jack accepted in cross-examination he had “probably” joked Geoffrey and David were his new “landlords”. This remark captures the true mood of the occasion, and is, in turn, consistent with Jack’s jocular email to the Auckland Council in 2015.
[83] Mr Wellwood, who had significant experience with elderly clients, said Jack’s mental and physical condition was “remarkable” for his age. This accords with my assessment of Jack, who gave evidence in person on 26 and 27 September 2017. I accept also as accurate Mr Wellwood’s testimony Jack appeared “full of energy,
mentally alert, and aware of our reason for being there”.24
23 Jack’s thinking was not fixed. Geoffrey’s diary implies Jack also entertained the idea of selling part of the property (it comprises two titles) to raise funds to pay for his needs. However, Jack’s overarching goals never changed: he did not want to leave the property, but also wanted to ensure he had sufficient money available to be cared for—there. And, Jack was worried about attacks to his will, in relation to which his sons were the ultimate beneficiaries.
24 Jack said he felt particularly unwell this day. I reject also this evidence for the reasons described at [32]–[48].
[84] Mr Wellwood said he would not have proceeded with the transaction if he considered Jack did not understand it. This too I accept. As may be recalled, Jack had sent an email to the Health and Disabilities Commissioner on 24 November 2014, and so two days earlier; see [43](f). Whatever else may be said about this communication two things stand out: Jack was unquestionably then capable of asserting his rights, and, in command of his faculties. Both remained true at trial.
[85] Seventh, events of November 2015 and beyond reveal this claim was brought for reasons divorced from genuine concerns about the transfer. On 7 November 2015
Geoffrey and David visited Jack to discuss renovations. David said he raised with Jack an email mistakenly sent by Jack approximately 10 days earlier. David said the email had an attachment, which he described in detail. It need not be recorded here. David said his father explained the attachment, which David destroyed with the assistance of someone familiar with information technology. Geoffrey said he was not surprised by what David had seen, as he had encountered not dissimilar material some weeks earlier. Jack described David’s and Geoffrey’s evidence on this topic as “fabrication”.
[86] I am satisfied that is not the position. David’s evidence on this topic was detailed, and the evidence of each son tended to support the other. However, the significance of this chapter is not whether Jack was in possession of anything, but rather the events to which it gave rise.
[87] As to these, on 10 November 2015 Geoffrey and Jack had what Geoffrey described as “a major argument” about this and other matters. Jack then emailed Geoffrey’s son on 13 and 18 November suggesting Geoffrey had depression and other mental problems, including “narcissism” and “premature dementia”. Hence Geoffrey’s decision to remove Jack’s computers on 19 November 2015, and inform the Police about an unsecured firearm he encountered in the process.
[88] Only after all these events did Jack contend the property should be returned. But even then, Jack’s initial stance was that David should remain an owner, not Geoffrey. In Jack’s words, this was David’s chance to be the “top dog”; see [15].
However, when David did not support Jack vis-à-vis Geoffrey, David too was considered to have done wrong. Then came these claims.
[89] Jack’s correspondence in this period is illustrative. On 5 and 6 December 2015
Jack wrote to a friend complaining Geoffrey was engaging in “elder abuse” by attempting to “fit [him] up”, removing his computers and engineering “a plot” to put him in a rest home. Jack said David had not (then) been misled by Geoffrey’s “lies”. On 21 December that year Jack emailed David to “make sure” Geoffrey returned Jack’s computers; “If he doesn’t, you will ‘go down’ with him.”
[90] On 10 January 2016 Jack emailed a Member of Parliament saying he was the victim of “an attempted coup … to deprive me of my independent living”. Geoffrey was identified as the “lead perpetrator”; David as having “abetted” him. Both were accused of making “preparations to sell the farm”. The recipient was entreated “to discourage exploitation of the aged”.
[91] Ironically, there is no evidence Geoffrey or David wanted to place Jack in a rest home or sell the property. In my view both had—and still have—great affection for their father.
[92] To recapitulate, Jack was not under disability or taken advantage of by Geoffrey and David. Their influence did not lead to the transfer, or compromise Jack’s free will. The claims for undue influence and unconscionable bargain fail.
Breach of fiduciary duty?
[93] A third cause of action, breach of fiduciary duty, is also brought. It is particularised this way:
Particulars:
a. The First and Second Defendants held Power of Attorneys for the
Plaintiff.
b. The First and Second Defendants were two of the children of the Plaintiff and were in discussions with him in 2014 in relation to his estate.
c. The First and Second were in communications with the Plaintiff and were aware of his physical and mental vulnerable position.
d. The First and Second Defendants were the Plaintiff’s agent in relation to the provision of instructions to the Third Defendant regarding his property and his estate.
[94] This action is without merit. True, Geoffrey and David held enduring powers of attorney in relation to the property. However, they did not exercise those powers when the property was transferred to them, and their fiduciary duties as attorneys attached only to the exercise of those powers.25
[95] The particulars at (b) add nothing, and those at (c) I have already rejected in relation to the unconscionable bargain and undue influence actions. It is not clear what (d) adds, if anything.
Negligence?
[96] This leaves Jack’s claim for negligence against Langley Twigg.26 It was common ground Mr Wellwood did not tell David, Geoffrey or Jack he should not act for all three parties given the potential conflicts of interest. Langley Twigg made a formal admission it failed to seek Jack’s informed consent to act for everyone, and
Mr Wellwood accepted in evidence he should have told David and Geoffrey he should not act for their father as well.
[97] Mr Wellwood said as a practitioner of considerable experience in a small town, he was conscious conflicts of interest could readily arise; people often know each other and there are few lawyers. And, he said he told David that Jack should have separate representation. David responded his father would not see anyone else. While I accept this conversation occurred, Mr Wellwood did not go far enough. He accepted as much. So too Langley Twigg.
[98] These concessions were proper. Jack is elderly, capacity is a fundamental consideration, and Jack’s interests were far from co-terminus with those of his sons. Jack should have been told, unequivocally, to obtain independent legal advice to
protect his position. He was not.
25 Vernon v Public Trust [2016] NZCA 388, ]2016] NZAR 1375, [2016] NZFLR 578.
26 The sons’ claim against Langley Twigg was conditional on Jack’s success against them. For completeness, I dismiss it.
[99] It was also common ground the real issue was causation: what would Jack have done with independent advice? And, what would that advice have been? Expert evidence from three senior practitioners was adduced by consent. One expert,
Mr Timothy Jones of Glaister Ennor, said he would have advised Jack against the transfer absent substantial variation. Mr Jones considered the transaction left Jack vulnerable if his sons breached the agreement. He expressed a second concern: Jack could no longer make testamentary provision for others by reference to the property.
[100] Counter-factuals are inherently problematical. They require special care in a forensic setting, particularly when a party is allegedly vulnerable through age and other factors. And unrepresented. However, I am satisfied it is much more likely than not Langley Twigg’s negligence did not cause Jack loss as Jack would have insisted, even with the benefit of independent—and contrary—legal advice, on either the transaction proceeding as it did or absent material change. In short, Jack’s claim for negligence fails for want of causative loss.
[101] First, it is clear Jack dislikes lawyers and the legal system more generally. Geoffrey said his father was “contemptuous” of lawyers; David was more direct. He said Jack “hated” them. Jack offered a different perspective, saying his various remarks merely reflected an absence of “political correctness”. I accept his sons’ evidence. Two examples should suffice.
[102] In 2005 Jack wrote a two-page letter to a solicitor. Jack described him as “a dodgy devil”, and implied he had stolen funds from a trust and received stolen property. Jack referred to his own divorce proceedings in the 1970s and bemoaned the failings of his “procession of counsel”, none of whom had properly advanced Jack’s case. Jack contrasted their efforts with his own forensic skill, saying the Judge had described him as “generous” and “honourable”. Jack said the lawyer representing his estranged wife had opened her case with “a liberal serving of his snooty scorn”, but Jack responded with “precedent in an English case in 1923”. Jack said his wife’s lawyer left the court “with lightning speed”, leaving Jack with a 100 percent record “as an advocate”. The letter referred also to “salaried judicial boffins”, who hoped for settlement as a means of reducing their workload.
[103] Fast-forward to 30 September 2014, when Jack complained to his nephew in an email how Jack’s first wife had destroyed the family “with the support of our maniac legal system”. More recent events are also illustrative, namely Jack’s dismissal of Mr Kemp, Mr Grove and Mr Vodanovich and his related allegations of misconduct against all three; see [4] and [16].
[104] Second, Jack has declined legal advice or acted in its absence on matters of importance:
(a) As will be apparent from the letter above, Jack represented himself in the divorce proceedings in the Supreme Court in the 1970s. The case went to a hearing, and took a long time. Geoffrey was summonsed as a witness. He was then only a teenager.
(b) In 1983 Jack sold his dental practice to Geoffrey for approximately
$88,000, a not inconsiderable sum then. Jack saw no need for lawyers to be involved.
(c) When Mr Grove and Mr Vodanovich withdrew after the close of evidence, Ms Bryant raised the possibility of amicus curiae. I concluded this would be undesirable, as it would necessitate an adjournment.27 I also considered it unlikely amicus curiae would enjoy Jack’s confidence. Mr West later agreed, observing that person “would get under his feet”.
(d)Under cross-examination, Jack said he would not have needed legal advice about the transfer if he had seen the papers beforehand. I have already found Jack received the documents before 26 November 2014 and suggested changes—which Mr Wellwood made.
[105] Third, unlike other lawyers, Jack liked Mr Wellwood; he considered
Mr Wellwood a “very pleasant fellow”. Both shared an interest in World War II. And, Mr Wellwood had, it will be recalled, prepared Jack’s will in 2007. Consequently,
27 West v West HC Auckland CIV-2016-404-002992, 17 November 2017 (Minute (No 2)).
Jack’s idiosyncratic preferences meant Mr Wellwood’s approach was likely to be welcomed, especially in the face of contrary legal advice from a “stranger”.
[106] Fourth, similar analysis follows because Jack was the transaction’s architect; see [81]. Again, given his idiosyncrasies, contrary advice was most unlikely to have been accepted. It is possible, albeit unlikely, Jack was anxious about absence of provision for the Palmers. However, unsurprisingly, none of the expert witnesses suggested they should be provided for.
[107] Fifth, Jack essentially acknowledged the force of these points. In cross-examination, Jack agreed he would have acted in accordance with independent legal advice only if that advice reflected his own thinking. And, when asked to explain how the transaction should have been different, Jack identified only the points addressed earlier at [73]. Again, the transaction reflected his intentions, which would not have been shifted by independent advice.
[108] To recapitulate, independent advice would not have affected the calculus. Its absence constituted negligence, but not negligence causative of loss.
Conclusion
[109] While Jack’s claim exhibits hallmarks of an unconscionable bargain and undue influence, these are superficial only. Jack was not under disability or his sons’ influence—and they did not take advantage of him. Moreover, their influence did not lead to the transfer or compromise Jack’s free will. Independent legal advice would not have changed the course of history.
[110] Sadly, this claim was brought for reasons divorced from genuine concerns about the transfer. Rather, events of November 2015 and beyond led Jack to excommunicate Geoffrey as his son, and then David when he would not side with Jack. David testified with obvious emotion about Jack’s “path of destruction” since then, and his father’s apparent enjoyment of it all. That evidence accords with my assessment.
[111] All causes of action fail, and are dismissed.
Late evidence
[112] Jack appended what appeared to be statements from other family members to his closing submissions. Mr Kerr objected to the late reception of this evidence.
[113] I did not consider these statements because the witnesses could have been called at trial but were not; much of the proposed evidence lacked relevance and some of it was scandalous; and grave doubt attaches to the identity of the statements’ author(s). Much of the language is consistent with Jack’s; for example, “Words cannot express how repulsive [X] is to me ... He is perverted toxic and controlling.”
Costs
[114] I will deal with costs on the papers in the New Year. Submissions must not exceed five pages. Langley Twigg is to file and serve its submissions by 5 pm Friday
2 February; Geoffrey and David theirs by 5 pm Friday 9 February; and Jack his by
5 pm Friday 16 February 2018.
……………………………..
Downs J
8
6
1