Haggarty v Wood [2013] QSC 327

[1] JACKSON J: The plaintiff applies to add further plaintiffs and to further amend the claim and statement of claim. The defendant resists the application to amend and applies to strike out the existing amended statement of claim.

[2] The underlying dispute is over the estate of John Haggarty (also known as Jack Haggarty) who died on 10 August 2012. There are three sets of dispositions on which the claims and proposed claims turn.

[3] First, on 13 November 2006, Jack Haggarty transferred his share in J Haggarty & Co Pty Ltd ("the company") to "John Haggarty" and the defendant, Joan Wood, jointly. Secondly, in or about March 2007, Jack Haggarty transferred a half interest in the land described as Lot 9 on RP 85417 to the defendant.[1] Thirdly, Jack Haggarty made his last will on 26 March 2010, leaving the whole of his real and personal estate to the defendant.[2]

[4] The plaintiff, whose name is also John Haggarty, is Jack Haggarty's son. The essence of his case is that some of the dispositions and the will were made by Jack Haggarty contrary to family arrangements made before Jack Haggarty met the defendant.

[5] Another relevant background fact is that the company used to be the holder of five parcels of land described as Lot 3 on RP 85417, Lot 1 on RP 85417, Lot 4 on RP 85417, Lot 6 on RP 85417 and Lot 5 on RP 85417 ("the five parcels"). In broad terms, the alleged family arrangement was that Jack Haggarty and his wife Irene Haggarty agreed that each of their five grandchildren would receive one of the five parcels and that the arrangement would be carried out by leaving the relevant assets under their wills to the plaintiff and his sister, Beverley Ann de Witt.

[6] On 2 May 1991, Jack Haggarty and Irene Haggarty executed wills under which the whole of the real and personal estate of each of them was left to the other absolutely with a gift over in the event of the other predeceasing the testator. In each case the gift over was made to the plaintiff and his sister as tenants in common in equal shares. Those wills were consistent with the alleged family arrangement.

[7] Irene Haggarty died in 1997. On 17 December 1997, Jack Haggarty made a further will. That will devised the land described as Lot 6 on Plan 803326 to the Ipswich Pistol Club Inc[3] but otherwise left his real and personal estate equally to the plaintiff and his sister. That will was also consistent with the alleged family arrangement.

[8] Jack Haggarty made further wills on 26 February 2004, 6 July 2006, 16 October 2006 and 11 July 2008. As stated above, his last will was made on 26 March 2010.

Cross applications and the proposed statement of claim

[9] On 18 July 2013, the plaintiff's claim as originally filed was informally amended by an amended statement of claim filed on that day. On 25 July 2013, the defendant applied to strike out the amended statement of claim and for judgment in the proceeding. On 20 September 2013, the defendant's application to strike out the amended statement of claim was adjourned with a direction that the plaintiff have leave to file and serve a further amended statement of claim.

[10] In the result, on 21 October 2013, the further amended statement of claim was delivered, not filed. On 30 October 2013, the plaintiff and Jack Haggarty's five grandchildren filed an application for an order that they be added as parties to the proceeding as second plaintiffs and consequential appropriate orders.

[11] Thus, the pleading upon which the parties pressed their arguments on the defendant's strike out application and on the plaintiff's application to amend became the proposed further amended statement of claim ("FASOC").

[12] Broadly speaking, the FASOC sets up four claims:

(a) firstly, a claim for a declaration that the defendant holds the shares in the company on constructive trust for the plaintiff's benefit to the extent of his contributions to the assets of the company;

(b) secondly, a claim based on breach of an alleged "testamentary contract" made between Jack Haggarty and Irene Haggarty that they would leave each of the grandchildren a single parcel of land from the five parcels held by the company. The relief sought is a declaration that the defendant holds the shares in the company on constructive trust for the grandchildren;

(c) thirdly, a claim that Jack Haggarty's wills made on 26 March 2010, 11 July 2008, 16 October 2006, 6 July 2006 and 26 February 2004 are void because of the defendant's undue influence; and

(d) fourthly, a claim that the defendant holds all assets of Jack Haggarty on trust to be administered according to his 1997 will.

[13] No point was taken by the defendant as to the constitution of the proceeding as to parties. However, the description of the proceeding and the claims made set out above show that the second and third claims, at least, should be claims made against Jack Haggarty's estate represented by his executor. That is not the defendant.

[14] Further, as the four parcels of land that were sold were the company's property, it is not immediately apparent how the defendant is the proper defendant to a claim for a constructive trust as to the proceeds of sale.[4] Again that point was not taken by the defendant.

[15] The defendant's first contention was that the FASOC does not disclose a reasonable cause of action for the claim based on breach of contract because no enforceable testamentary contract is alleged.

[16] The defendant's second contention is that the FASOC does not plead a factual basis capable of supporting a claim of undue influence by the defendant in the making of Jack Haggarty's last will.

[17] The agreement alleged in par 2A(h) of the FASOC is that "[p]rior to ... meeting ... the defendant ... the testator [Jack Haggarty] ... had agreed with his late wife ... for the [grandchildren] to each receive a single parcel of land from the company's land parcels ... [and] ... that he would, as the sole shareholder of the company, make and maintain provision by his will for the land parcels to be left to [the plaintiff] and Beverly de Witt so as to distribute the land parcels to each of [the grandchildren]".

[18] The alleged agreement is defined as the "testamentary contract" in the FASOC. It is also referred to in par 3(f) and par 5(b) of the FASOC. As pleaded, the only parties to the testamentary contract were Jack and Irene Haggarty. The basis upon which the plaintiff and the grandchildren seek relief on the testamentary contract must be that it was made for their benefit.[5]

[19] So pleaded, the alleged contract is challenged by the defendant because it is not as alleged an agreement for mutual wills and there is no allegation of any consideration moving from Irene Haggarty.

[20] The defendant contends that because there is no agreement alleged between Jack and Irene Haggarty not to revoke their wills, there is no enforceable agreement for mutual wills.[6] As Dixon J said in Birmingham v Renfrew,[7] a contract for mutual wills operates to create a specifically enforceable obligation and (subject to the principles of equity) to impose a constructive trust upon the terms of the will which the survivor contractually undertook would be his last will, which attaches the obligation to the property. An agreement not to revoke the will is a necessary material fact which must be pleaded in a case of a contract for mutual wills.

[21] Faced with that challenge, counsel for the plaintiff and the grandchildren pointed to the allegations of work done by them for Jack Haggarty's benefit in par 1 and par 1A of the FASOC. I also notice the allegation made in the particulars under par 2A(h) as to statements alleged to have been made by Jack and Irene Haggarty to the plaintiff and the grandchildren that they recognised their efforts in running and managing the properties and that each of the grandchildren would receive one of the parcels.

[22] However, there is no allegation of any fact constituting consideration moving from Irene Haggarty to Jack Haggarty to support the alleged testamentary contract. Consideration is a necessary material fact to support a cause of action based upon a contract.[8]

[23] It follows, in my view, that the defendant's challenge to the FASOC to the extent that it alleges breach of the testamentary contract is well made.

[24] I note that there is no allegation of any entitlement or claim by way of proprietary or equitable estoppel on the part of the grandchildren. Although the plaintiff referred to Riches v Hogben,[9] that was in support of the contention that an informal family arrangement may still constitute a contract where the facts support an intention to create legal relations,[10] not as an answer to the need to identify consideration for the alleged contract on the footing that the family arrangement pleaded supports a claim of proprietory or equitable estoppel.[11] There is no allegation in the FASOC of unconscientious or unconscionable conduct by Jack Haggarty by changing his will at any time.

[25] Paragraph 5(a) of the FASOC alleges that "(i) in the premises pleaded above ... the defendant ... influenced the testator unduly ... (and) acted unconscionably ...". Further, par 5(e) alleges that "... in the premises pleaded above ... [Jack Haggarty's] will was overborne by the conduct of the defendant ...". The premises are not precisely identified but would appear to include the allegations made in paragraphs 2A(a), 2A(c)-(e), 3(d)-(e), 3B(f) and 4(c)-(f).

[26] The thrust of the defendant's challenge is that while the matters alleged might sufficiently plead facts for undue influence in a court of equity in connection with an inter vivos transaction, they are not sufficient for a pleading of undue influence in the making of a will. The defendant also relied upon the allegations in par 3C of the FASOC that on 26 February 2004 the plaintiff and the defendant with Jack Haggarty attended upon a solicitor, that Jack Haggarty and the defendant then met with the solicitor to the exclusion of plaintiff and that at or after the meeting Jack Haggarty executed the will of that date.

[27] There is no dispute between the parties that there is a difference between the legal requirements to set aside a will otherwise validly executed for undue influence ("testamentary undue influence") and the legal requirements to set aside an inter vivos transaction in equity for undue influence. That is trite law. The FASOC recognises as much by the express allegation in par 5(e) that Jack Haggarty's will was overborne by the conduct of the defendant.

[28] In Trustee for the Salvation Army (NSW) Property Trust & Anor v Becker & Anor,[12] Ipp JA summarised testamentary undue influence thus:

"Undue influence, in a probate context, is constituted by conduct that overbears the will of the testatrix so that she makes the will without intending and desiring the disposition made thereby. The circumstances must be such that the disposition is not regarded as the free and voluntary act of the testatrix. The volition of the testatrix must be overpowered so that her mind does not accompany her act in making the will. The point was put succinctly in Wingrove v Wingrove (1885) 11 PD 81 by Hannen P (at 82):

'[i]t is only when the will of a person who becomes a testator is coerced into doing that which he or she does not desire to do that it is undue influence'.

See also Hall v Hall (1868) LR 1 P & D 481 where Sir J P Wilde, at 482, described undue influence as the overpowering of the volition without convincing the judgment.

The basic point is that, to prove undue influence, it must be shown that the testatrix did not intend and desire the disposition. It must be shown that she has been coerced into making it. See, generally, Boyse v Rossborough; Buckley v Maddocks [1891] NSWLawRp 72; (1891) 12 LR (NSW) Eq 277 at 282 per Stephen J; Winter v Crichton; Estate of Galieh."

[29] The question for decision resolves to whether there is enough in the facts pleaded in the FASOC to conclude to the required standard on an application of this kind that if those facts were proved a finding at trial could be made of testamentary undue influence.

[30] The proceeding seeks declaratory relief as to invalidity due to testamentary undue influence applying to no less than five apparently regularly executed wills over a period of almost six years by a man who is not alleged to have lacked testamentary capacity. For an unexplained reason only three of the wills are actually challenged in the body of the FASOC although the claim for relief refers to all of the wills executed after 1997. As previously mentioned, the proceeding is unusually constituted. The ordinary practice is that the executor would propound the last validly executed will and an interested party who wished to challenge the validity of the will for testamentary undue influence would lodge a general caveat.[13] The question of undue influence would be raised in a solemn form proceeding, possibly with a claim for proof of another will alleged to be valid.

[31] UCPR 149 provides that a pleading "must... contain a statement of all material facts on which the party relies...". UCPR 150(1) provides that some matters "must be specifically pleaded", including "...undue influence ...[or] that a testator did not know and approve of the contents of a will ...[or] that a will was not properly made...". UCPR 150(2) provides that "also, any fact from which any of ...[those] matters is claimed to be an inference must be specifically pleaded."

[32] In Berzins & Anor v Russo & Anor,[14] Lunn M considered an application to strike out a pleading of testamentary undue influence under a cognate pleading rule to UCPR 171. The pleading in that case included the following:

"The second defendant against the will of the deceased, isolated the deceased from his only child, the first defendant, and from his only grandchild his grandson Dario, from his only brother Falks Broders and from his cousin and property manager Dedzis Broders in Latvia. She did not allow the deceased to see any of them alone; and accordingly:

(b) she removed privacy, intimacy and a close personal relationship of the deceased from his family, thus alienating the deceased from the abovenamed persons ...

(c) she destroyed the deceased's independent way of thinking;

(d) she caused the deceased to mistrust Dedzis Broders;

(e) she severed the deceased from their advice and counsel; and

The deceased recognized the second defendant's influence upon him but was unable to resist it.

The deceased became feeble and lost his ability to exercise his own will or to resist the will of the second defendant"

[33] Lunn J struck out the pleading and observed:

"Some of the pleading quoted is no more than statements of conclusions drawn from unstated material facts. Those material facts must be pleaded: Seven Network Ltd v News Ltd [2003] FCA 388; Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228; (1985) 7 FCR 109; H Stanke & Sons v O'Meara (2007) 97 SASR 450 at [91]."[15]

[34] Summarising, para 2A of the FASOC alleges the extent of Jack Haggerty's reliance on the plaintiff and poor health as at 2002, when he met the defendant. Jack Haggarty was then aged 86 years. Paragraph 3 alleges that the defendant "knew or ought to have known" from 2002 of Jack Haggarty's wealth, reliance on the plaintiff, poor health and vulnerability to "external influences." Paragraph 3A alleges that the defendant "knew or ought to have known" of the plaintiff's expectation (curiously) under the 26 February 2004 will, of the plaintiff's work in contributing to the company's assets, of the grandchildren's work for Jack and Irene Haggarty, and of the family arrangements for Jack Haggarty's will.

[35] Paragraphs 3B, 3C and 4 of the FASOC allege:

"3B From on or about August 2002 until the testator's death on 10 August 2012 the defendant was, in the premises pleaded above, able to and did influenced the testator unduly so as to secure a direct benefit for herself, in particular in with the effect that the testator:

(a) revoked his 1997 will and executed a fresh will which:

(i) reduced the first plaintiff's interest in the testator's estate;

(i) did not give effect to the agreement reached between the testator and his late wife as pleaded above;

(c) terminated longstanding arrangements that he and the company had in place with bankers, solicitors and accountants;

(iii) sell the company's real estate assets, including

1. Lot 3 on RP85417;
2. Lot 1 on PR85417;
3. Lot 4 on RP85417;
4. Lot 6 on RP85417; and
5. Lot 5 on RP85417

which the testator had agreed, by the testamentary contract, to leave the second plaintiffs;

(iv) arrange and/or facilitate the transfer of 50% of Lot 9 RP85471 to the defendant for natural love and affection in or about March 2007;

(v) act on his behalf and on the company' behalf in all dealings with the testator's and the company's accountants, legal representatives and bankers;

(f) had little if any contact with his family, including the plaintiffs after mid July 2006;

(g) withdrew from his long standing associations with:

(h) the defendant and the first plaintiff attended the office of Kevin Steed, solicitor, with the testator;

(i) the testator and the defendant met with Mr Steed to the exclusion of the first plaintiff;

(j) after or during the meeting between Mr Steed, the defendant and the testator, the testator executed his will dated 26 February 2004:

1. revoke his previous Will of 1997;
2. leave 50% of the residual estate and the Company to the defendant;

(ii) which failed to give effect to the testamentary contract.

(a) became the testator's attorney, by power of attorney;

(c) had access to the company's financial accounts and records;

(d) terminated the long standing arrangements that had been in place between the company and:

(b) arranged for the testator's health needs to be managed by a new medical team (check) [sic].

(i) the testator's daughter, Beverley had recently died;

(ii) the testator was becoming more vulnerable to external influences, and relevantly, the defendant's influence.

(d) excluded each of the plaintiffs from attending family gatherings, including the testator's birthday celebrations;

(e) refused to provide to the first and/or second plaintiffs, information regarding the testator's health;

(f) failed to inform the plaintiffs of the testator's hospitalisation prior to the testator's death."

[36] Paragraph 5(a) then alleges that the defendant "influenced [Jack Haggarty] unduly" and para 5(e) alleges that "his wills executed on 26 March 2010, 16 October 2006 and 26 February 2004 do not record... [Jack Haggarty's] intention...".

[37] The pleading is devoid of the facts from which the inference is to be drawn that Jack Haggarty was coerced into making any of his wills or that his "will was overborne" or his volition was overpowered. The alleged facts say little more than that Jack Haggarty was reliant upon the defendant, that the defendant greatly influenced Jack Haggarty and that she did so knowing that the contents of his wills was contrary to his prior intentions and family arrangements.

[38] In my view, the facts alleged are not a sufficient pleading of the material facts and facts required to be pleaded under UCPR 150(2) on a question of testamentary undue influence in executing a will.

[39] It follows, in my view, that the defendant's challenge to the FASOC to the extent that it alleges facts in support of the claim for a declaration that the execution of each of the wills by Jack Haggarty after 1997 was made under the defendant's undue influence is also well made.

[1] The existing claim seeks relief by way of transfer of Lot 9, but the proposed amendments to the statement of claim abandon that claim. It is accordingly unnecessary to consider the application of s 49 of the Succession Act 1981 (Qld) or cognisant principles in relation to the plaintiff's standing to bring that claim.

[2] There are a number of earlier wills which the plaintiff also challenges.

[3] From the particulars under para 3 of the FASOC, it may be that Jack Haggarty transferred Lot 6 to the club in the late 1990s.

[5] However, there is no reliance on s 55 of the Property Law Act 1974 (Qld) pleaded, or allegation of acceptance by the beneficiaries as required under that section.

[6] Hussey & Anor v Bauer & Ors [2011] QCA 91 at [29].

[7] [1937] HCA 52; (1937) 57 CLR 666 at 683.

[8] Cooke v Rickman [1911] 2 KB 1125 at 1130. Moynihan et al (editors), Court Forms, Precedents & Pleadings Qld, Lexis Nexis, at [18,005] say: "A necessary allegation in the statement of claim is that the agreement sued on, or for breach of which some remedy is sought, was supported by consideration and the consideration should be described."

[9] (1985) 2 Qd R 292.

[11] See Riches v Hogben at 300-302; Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at [35]; Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387.

[12] [2007] NSWCA 136 at [63]- [64]. See also Tobin v Ezekiel [2012] NSWCA 285 at [25]- [68].

[13] Azzopardi v Smart (1992) 27 NSWLR 232.

[14] [2008] SASC 192.