Which case won?

The case for the deceased’s children
  • There was an inequality in the relationship between our father and Mr A, due to Mr A’s stronger position. Mr A relied on this to exercise undue influence on our father to transfer ownership of the farm to Mr A’s sons.
  • As Mr A admits, from the time our father went to live permanently on the farm, his reliance on Mr and Mrs A was substantial. Almost all his social contact was with or through them. His physical needs in terms of transport, shopping, meal preparation and the like depended on them.
  • With respect to the property transaction, Mr and Mrs A had the benefit of advice of their lawyers and financial advisors. Not only that, but our father also dealt with their lawyers and financial advisors. At no point did anyone suggest that he should get independent legal or financial advice.
  • Our father saw a geriatrician to undergo an assessment regarding his capacity to make the transfer. Although on his first visit the geriatrician thought that our father’s mild cognitive impairment did not impair his decision making, by the second visit, the doctor found that our father’s cognitive function had significantly deteriorated.
  • Our father had no reason to disinherit us. Although we all lived in different states, we still phoned each other regularly and saw each other when we could. For example, our father spent Christmas 2003 in Brisbane with one of us. Another of us visited him in May 2006 and took him out to lunch and one of us visited him a few times in the retirement home in the last year of his life.
  • Mr A made seeing our father more difficult, as he told our father not to let us come to the farm. Mr A also knew that our father had not told us about his intention to transfer the property, but said nothing. Presumably, he wanted to keep us away from our father so that he could maximise his influence over him.
  • Given that our father was induced to transfer the farm to Mr A’s sons by the undue influence of Mr A, the court must order that the farm be transferred to the executors of our father’s estate.
The case for Mr A’s sons, as owners of the farm
  • It is not surprising that the deceased transferred the farm to us, because our parents looked after him for nearly 20 years. He depended heavily on them for transport, shopping and meal preparation.
  • His relationship with us was like that of family. He came to our family gatherings and went on outings and holidays with my parents.
  • We created a community together, between us, the deceased and his friends. We all supported each other.
  • The care that our parents gave the deceased was the kind of care that a loving child would give an aging parent, not a sinister plan to exercise undue influence over his estate planning.
  • It’s true that on his second visit to the geriatrician, the deceased’s cognitive capacity had deteriorated. However, his capacity was fine on the first visit, which took place after the final will and power of attorney had been executed. On that first visit, the geriatrician was of the opinion that the deceased “had sufficient capacity for the validity of his will dated 11 March 2004 and sufficient business acumen to transfer his property to [Mr A’s sons]”.
  • Our father did the right thing by urging the deceased to get his own financial and legal advice, but the deceased, who was quite headstrong, chose not to do so.
  • Further, as the evidence shows, the deceased had an intention from at least May 2002 to disinherit his children. This was well before the property transfer occurred.
  • Since the deceased transferred the farm to us free of any undue influence, the court must reject the application by the deceased’s children to have us transfer the farm to the estate.

So, which case won?

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Expert commentary on the court's decision

Olivia Galvin
Olivia GalvinParalegal
“As happened here, when Bill Affoo failed to ensure that Ted Blair had obtained independent legal advice, an attorney’s failure to consider carefully their responsibilities before entering into a transaction with the principal may expose them to litigation.”
Queensland Supreme Court decides in favour of deceased’s children

In the case of Baker & Ors v Affoo & Ors [2014] OSC 46, the Supreme Court of Queensland ruled in favour of the deceased’s children, Marguerite Baker, Charles Baker and Roger Baker. 

The court found that the defendants, Shaune and Christopher Affoo, had not discharged their onus to rebut the presumption of undue influence.

Presumption of undue influence under Powers of Attorney Act

Under section 87 of the Queensland Powers of Attorney Act 1998, in a transaction between a principal and attorney under an enduring power of attorney, there is a presumption in the principal’s favour that the principal was induced to enter the transaction by the attorney’s undue influence.

In the case before the court, the deceased, Ted Blair, was the principal and Mr A, Bill Affoo, was the attorney.

As principal and attorney, they entered into the transaction to transfer Mr Blair’s farm to Mr Affoo’s children, Shaune and Christopher, to be held on trust for Mr Affoo.

Accordingly, in order to succeed with their case, Shaune and Christopher had to rebut the presumption that Mr Blair was induced to enter the property transaction by Mr Affoo’s undue influence. 

The court found that Shaune and Christopher had failed to do so.

Neighbour’s sons fail to rebut presumption of undue influence

In refusing to accept that Shaune and Christopher had discharged their onus to rebut the presumption of undue influence, the court made the following remarks. 

There is just no evidence that independent advice was given to Ted, notwithstanding that the Affoos received legal and accounting advice throughout the relevant period to protect their interests. Bill says he urged Ted to get his own advice but Ted refused to do so. I do not accept that evidence. It is not otherwise supported. 

But against the objective facts, the attempt took on an unreal aspect. At the time of the transfers, Ted was 89, recently widowed, and without other close by emotional supports, except for Bill and Rhonda. He was already physically dependent upon them and that was increasing. He was probably aware that his short term memory was failing or had failed. His concern was to live out his days on the farm. His hope and intention, in doing so, were to persuade Bill and Rhonda, as close friends, to continue and increase their support for him. 

In those circumstances, for Bill to take a gift of a large amount from Ted was on its face unconscientious because Bill was in a position where great confidence was reposed in him by Ted. Bill, with the benefit of legal advice as well as financial advice, ought to have realised that it was necessary to establish that Teds decision was made with the benefit of independent advice. That Ted was doing it apparently without telling his children made that even more important. 

Court defers decision on whether provision to be made under Succession Act

Having ordered that the farm be transferred to the executors of Mr Blair’s estate, the court turned its mind to Marguerite, Charles and Roger’s claim for provision under section 41 of the Queensland Succession Act 1981. 

The court found that no evidence had been provided by the executors to establish the value of the farm or the impact of that on the value of the estate as a whole.  

Nor had Marguerite, Charles or Roger provided evidence as to the extent of their ongoing needs, so that the court could determine whether they had been left without adequate provision. 

Rather than make a decision with insufficient evidence, the court issued a direction for the filing of further evidence by the parties.  

Importance of understanding one’s duties under power of attorney

With powers of attorney, it is important to ensure that both the attorney and the principal fully understand their duties and responsibilities. If in doubt, seek independent legal advice. 

As happened here, when Bill Affoo failed to ensure that Ted Blair had obtained independent legal advice, an attorney’s failure to consider carefully their responsibilities before entering into a transaction with the principal may expose them to litigation.

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.

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