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Articles
A collection of articles written by ourselves to help our clients with various legal issues
What is Undue Influence in a claim against an Estate?
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The last will that was made by someone who has recently passed away must reflect their true intentions for where and how their property is to be distributed. In this context, undue influence can be a claim against a deceased person’s Estate when there has been pressure against the will-maker at the time the will was made. For an undue influence claim to be successful in court, that pressure must have coerced the will-maker to have made a different will than what they truly wanted.
In other words, would the will-maker have signed the resulting will if another person had not improperly pressured them in some way to do so.[1] However, not all influences or pressures on a will-maker will be considered undue, it depends upon the circumstances of the case.
The most frequent example of undue influence that we see is where a will-maker is heavily reliant or dependent on one person in their later years; and the will-maker is advised by that person what to do with their will or advised to take into consideration irrelevant factors. Successful claims for undue influence have varied from as much as physical abuse and violence against the will-maker to as little as failing to advise the will-maker other options may be available.
A court may also find undue influence is present even when the person placing pressure on the will-maker is not a beneficiary or stands nothing to gain by a change in the will.
What will a Court look for?
In order for a court to test whether a Will was made subject to undue influence a court will consider the following:[2]
1. The key question is whether, because of extraneous pressure from others, the will-maker has signed a will contrary to his or her own wishes.
2. Persuasion which has left the final choice to the will-maker is not undue influence. Where there is evidence of strong influence or pressure, the court will approach the question of the will-maker’s own wishes with suspicion. However, if satisfied that the will-maker’s own wishes have not been overborne, and that in the end he or she wanted the will in that form, the court must uphold the will. In those circumstances the ultimate source of the will is not the external pressures but the exercise of the will-maker’s own free judgment.
3. The onus of proof lies upon the proponent of undue influence. However direct evidence of undue influence is not to be expected. These cases usually turn upon the strength of the circumstantial evidence. The question is whether from all the surrounding circumstances, with particular emphasis upon the result of the will and the circumstances in which it was actually executed, undue influence is to be inferred.
4. For this purpose all circumstances bearing directly or indirectly upon the free will of the will-maker at the time of the execution are relevant. These include illness, pain and suffering, physical weakness and mental deterioration which falls short of testamentary incapacity. They also include any dependency a person has on others in legal, business, social, medical and/or domestic matters. One should view with special care any powerful need, obligation or vulnerability on the part of the deceased which others might be in a position to exploit.
5. However, it is not enough to show that others had the means and opportunity to unduly influence the deceased and that there has been a recent testamentary disposition in their favor. The court must be satisfied both that the power was exercised and that the will would not have resulted but for that exercise.
In taking into consideration all of the points above a court will determine whether undue influence is present on the will-maker at the time the will was made.
What happens to the Will?
If a court finds that a will is the result of undue influence, the latest will is invalid and the court is to grant probate of the next most recent will, if one exists. If no previous will exists, then the laws of Intestate Estates will apply.
How do I make a claim?
Claims can be made by beneficiaries who believe they have been ‘cut-out’ or disinherited from a will or any other person who fulfills the requirements set out in legislation (for example, children, grandchildren, parents, family members, charities, etc).
If probate of the will has not yet been granted you can lodge a caveat with the High Court preventing probate from being granted until your claim has been heard and the matter resolved. If probate has been granted then any claims must be made within 12 months of the date of probate being granted over the will.
As with any claim in court, there is risk that the court may not agree that there has been undue influence. Therefore, it is important to seek independent legal advice before you embark on such a claim; and this article should not be relied upon as legal advice.
McKenna King can advise you on the best way to protect your estate from a claim and/or how to bring a claim against an estate. If you would like advice on any matters regarding challenging or contesting an estate, please contact Fraser King and Rhiannon Scott to discuss your estate litigation matter.
[1] If you’re really interested in the legal stuff, the case Hall v Hall (1868) LR 1 P & D 481 (Prob) sets out a definition of undue influence as being “pressure of whatever character, whether acting on the fears or the hopes, if so exerted as to overpower the volition without convincing the judgment, is a species of restraint under which no valid will can be made. Importunity or threats, such as the testator has not the courage to resist, moral command asserted and yielded to for the sake of peace and quiet, or of escaping from distress of mind or social discomfort, these, if carried to a degree in which the free play of the testator’s judgment, discretion or wishes, is overborne, will constitute undue influence, though no force is either used or threatened”.
[2] Re Dudley (deceased) HC Auckland p1042/92, 14 May 1993 at 11 – 12.
What material will the court consider when determining the terms of a contract?
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Contracts can be made orally or in writing, or a combination of both. There are specific types of contracts that must be made in writing, such as contracts for the disposition of land. A common problem that leads to legal disputes is determining the essential terms of the contract. This article will discuss which material that the court will consider when determining those contractual terms.
Broadly speaking, the prerequisites to forming a contract are:
1. An offer and an acceptance;
2. An intention to be immediately and legally bound;
3. Certainty as to essential terms[1]; and
4. Valuable consideration is given.
Originally the courts looked solely at the plain and ordinary meaning of the words contained within the contract to determine the terms of the contract. The court looked at the exact words used and the ordinary meaning of those words in isolation – any factual background or subjective intention of the parties is irrelevant.
However, in recent years the court has started to consider other relevant facts to interpret and determine the terms of the contract. This is called the matrix of facts. Lord Hoffmann described the matrix of facts as:
“includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.”[2]
The courts began to inquire beyond the contract’s words to see what the circumstances were with reference to the words that were used, and the object that the person using them had in mind.[3]
One of the leading cases on contractual interpretation is Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd [2002] 2 NZLR 433, (2001) 7 NZBLC 103,477, 2001 WLA document called a Heads of Agreement was signed on behalf of Fletcher Challenge Energy Ltd and Electricity Corporation of New Zealand Ltd. The judges determined that the Heads of Agreement was valid and there was a binding contract for the sale and purchase of gas. The court looked at whether the negotiating parties intended the product of their negotiation (Heads of Agreement) to be immediately binding upon them, either conditionally or unconditionally. When looking into whether the Heads of Agreement was binding, the court stated that the established rule is that in interpreting a contract it is permissible to look to the factual matrix, but that evidence of negotiations and statements of subjective intention must be disregarded.
Another influential case that discusses contractual interpretation is that of Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5. Vector Gas Ltd entered into an informal agreement contained in an exchange of letters to supply gas to Bay of Plenty Energy Ltd at a price of $6.50 per gigajoule. The question arose whether or not this price included transmission costs.
§ Tipping J considered what a reasonable and properly informed third party would consider the parties intended the words of their contract to mean and stated that the court must be aware of the commercial or other context in which the contract was made and of all the facts and circumstances known to and likely to be operating on the parties’ minds.
§ Tipping J went on to state that the “appropriate contextual meaning, if disputed, will, almost invariably, involve consideration of facts and circumstances not apparent solely from the written contract. While displacement of an apparently plain and unambiguous meaning may well be difficult as a matter of proof, an absolute rule precluding any attempt would not be consistent either with principle or with modern authority.”
§ Wilson J found that “the general principle is that words of an enforceable commercial contract should be given their ordinary meaning in the context of the contract in which they appear, because the parties are presumed to have intended the words to be given that meaning. This general principle is however subject to three exceptions, which permit the consideration of evidence extrinsic to the contract to aid in its interpretation, and to the possibility of rectification.”
a) The first exception is that, if there is ambiguity within a contract because the words are not clear or because of internal conflict, resort can and indeed must be had to material outside the contract to resolve the ambiguity. The extrinsic material is objectively assessed;
b) The second exception is that if the meaning makes no commercial sense, it must yield to an interpretation which is commercially sensible;
c) The third exception is that a party asserting that the words of the contract should carry their ordinary meaning may be estopped by convention from doing so, if that would be a departure from the parties’ common understanding that the words were not to carry their ordinary meaning.
However, whether the matrix of facts is required to supplement the plain and ordinary meaning of a contract can be case dependent. For example, the case of Malthouse Ltd v Rangatira Ltd [2018] NZCA 621 concerned whether an implied term could be read into a contract. The court took into account the matrix of facts and found that it was not appropriate to depart from the natural meaning of the contractual words in that case. Further, in Technix Group Ltd v Fitzroy Engineering Group Ltd [2011] NZCA 17 the court held that the plain and ordinary meaning of the contract could not have been what the parties intended given it flouted commercial sense. So the contractual term containing the words “at any time during the lease” was modified to enable the option to purchase in a lease to be exercised and not frustrated by an attempted subsequent trigger of a pre-emptive right of purchase.
Conclusion
Initially the courts would not look past the plain and ordinary meaning of the language used within the contract. However, in more recent times, the courts have started looking at the surrounding facts – but only if there was ambiguity in the contract’s words. Then came cases such as Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd where the court considered material other than the written contract, however the court would not give weight to subjective evidence (what one party considered the situation to be at the time).
The court in Vector Gas Ltd v Bay of Plenty Energy Ltd confirmed that the wording of the contract is to be interpreted as it would be by a reasonable person with full knowledge of the circumstances in which the contract was made and that an objective approach was taken. The court in Vector Gas Ltd confirmed that the general principle is the plain and ordinary meaning, but there are three exceptions (ambiguity, the contract makes no commercial sense, the plain and ordinary meaning departs from the parties’ common understanding that the words were not to carry their ordinary meaning). This shows that there has been progress over the years and the court will consider the matrix of facts for reasons other than ambiguity, the court now considers the commercial context in which the agreement was made when interpreting a contract. When the courts are considering the evidence, that evidence must be reasonably relevant, and it must be objective.
If there is a dispute as to the contractual terms, the courts will consider whether the matrix of facts applies or whether the plain and ordinary meaning of the contract is to be given. If you would like any advice on the terms of your contract and what material the court will take into account, please contact McKenna King to discuss it further.
[1] A term is to be regarded by the parties as essential if one party maintains the position that there must be agreement upon it and manifests accordingly to the other party. Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd [2002] 2 NZLR 433, (2001) 7 NZBLC 103,477, 2001 WL
[2] Investors Compensation Scheme Ltd v West Brunswick Building Society [1998] 1 WLR 896.
[3] Prenn v Simmonds [1971] 1 WLR 1381 at pp 1384.
Challenging a Will - Who can make a claim for maintenance and support?
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Sometimes people do not include everyone in their family in their will, or they purposefully leave someone out. Just because you have not been included in a will does not mean that you will ‘miss out’ on inheritance.
If you have been ‘cut-out’ from a will or you think you should receive a greater share you can make a claim against the deceased’s estate. Such a claim is that the deceased has breach their moral obligation to provide for your maintenance and support – pursuant to section 4 of the Family Protection Act 1955. However, not everyone is eligible to make a claim. Legislation sets out what kind of people can make a claim. Legislation can also allow you to make a claim if the person died without a will.
Who does the legislation allow to make a claim?
Section 4 of the Family Protection Act 1995 lists who can make a claim. The most common types of people are widows, civil union partners, de facto partners, children (whether infant or adult), step-children, grandchildren, charities, and parents. A few of these are discussed below.
Widows, second wives, de facto partners and civil union partners
The duty owed to a surviving widow has always been considered paramount by courts. Although claims by spouses are rarer in modern times with sections 75 and 95 of the Property (Relationships) Act 1976 that allows a spouse to make a separate claim against the Estate that is usually larger than a claim under the Family Protection Act. The duty to the surviving spouse under the Family Protection Act has even been held to be the case in a short marriage of only 2 years (VS v LJS 7/3/08, Judge Flatley, FC Invercargill FAM-2007-025-749). De facto partners and civil union partners enjoy the same status as spouses, so their claim will also be paramount.
Recent developments in law, however, has somewhat limited the amount that can be claimed by widows. In Williams v Aucutt [2000] 2 NZLR 479 the court held that the widow was entitled to what was required for proper ‘maintenance’ and her entitlement to the ‘support’ that includes due recognition of her role in the family. This stance was supported in Wylie v Wylie (2003) 23 FRNZ 156 (CA) whereby the court stated:
“The law entitles Mrs Wylie to generous recognition of her long and effective contribution to the marriage and to the creation of the family assets. But even for an exemplary wife such as Mrs Wylie it limits her claim to the extent of deficiency in terms of the statutory moral and ethical standards considered by this Court in Williams v Aucutt”.
A second wife has not always enjoyed the paramount status accorded to a deceased’s first and only wife. The competing claims of children of the deceased’s first marriage have been held to be strong. However, in Clements v Clements [1995] NZFLR 544 (CA), the Court of Appeal held that a paramount duty was owed to a second wife over what was awarded to her and the deceased’s four children of his first marriage. The court stated the deceased’s primary duty was to his widow, who had supported him through illness.
Children and Step-Children
Children of the deceased have always been held to have strong claims to the estate, sometimes more important than those of spouses. In Flathaug v Weaver (2003) 22 FRNZ 1035 the Court stated:
“The relationship of parent and child has primacy in our society”.
This was reinforced in Fisher v Kirby [2012] NZCA 310 in adding that:
“when weighing the moral duty owed by a parent, the Court will ordinarily conclude that the duty to make adequate provision for the proper maintenance and support of one’s children should take priority over any duty to nieces and nephews.”
The current test of moral duty to children can also be found in Williams v Aucutt, mentioned above, and recognises that children are valued members of the family along with other social and ethical factors.
A court will assess any competing claim against the needs of the children. Therefore, it is often the case that infant children will have a stronger claim than that of adult children and direct descendants will have a stronger claim than step-children. The case of Fry v Fry [2014] NZHC 2256 held that direct blood-descendants have a greater claim than those who are not. However, the court will consider many factors before making a decision.
Grandchildren
The test for claims made by grandchildren is the same as for children but first the court must measure the need (if any) of grandchildren for provision in the light of the ability of their own parents to provide for them (Re Horton [1976] 1 NZLR 251 (CA)). This position was upheld in Fraser v O’Grady HC Auckland M262/96, 20 May 1997 in the court stating:
“it is often difficult for a grandchild to establish a claim where the grandchild's parent is a living child of the deceased. As a starting point one expects that the bounty for that particular family will filter down to the second generation via the first”.
Therefore, a claim made by a grandchild, whose own parents have already passed away will often be stronger than that whose parents are still living.
Parents
A parent’s ability to claim depends on that parent being maintained or there being no surviving spouse, partner or child of the deceased. Courts have recognised the importance of the parent-child relationship and the reciprocal obligations attached. In Re Covich (1994) 12 FRNZ 608, the Court made an award to the elderly mother of the deceased because she had assisted her unmarried son in his education expenses, and she was in potential need of funds for full time care.
Social and ethical factors may also influence the court. In Re Hunter (2000) 20 FRNZ 228 the mother was awarded the bulk of her son’s intestate estate because the duty was to her rather than his father who had denied paternity and made no financial contribution towards his son’s upbringing.
Making a Claim
If probate of the will has not yet been granted you can lodge a caveat with the High Court preventing probate from being granted until your claim has been heard and the matter resolved. If probate has been granted, any claims must be made within 12 months of the date of probate being granted.
Making a claim can be a stressful and complicated process. McKenna King can advise you on the best way to protect your estate from a claim and/or how to bring a claim against an estate. If you would like advice on any matters regarding challenging or contesting an estate or would like more information about drafting a will, please contact Fraser King and Rhiannon Scott to discuss your matter.
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