This happened to our clients in Queensland. The husband had three children to his first marriage and the wife two children to her first marriage. In 1985 they made mutual wills leaving the home which was in the wife’s name to her husband who was then to leave it to the five children in equal shares. The husband in turn left an investment property in his name for the wife to receive the income from that property for her life and after her death the investment property was also left to the five children. The verbal agreement between them at the time of making the Will was that neither would revoke their Wills in these terms after the death of the other. However, the agreement not to revoke was only verbal.
The husband died in 1992 without revoking his Will. In 1996 the wife transferred the home out of her name to her 2 daughters before she died leaving very little in her estate for the husband’s three children. The wife continued living in the home which she had transferred to her daughters and continued paying the rates and outgoings without paying any rent to her daughters. The wife died in 2007 at which time the transfer to her daughters of the home was discovered by the husband’s children. The husband’s three children objected. The wife’s daughters then sold the property transferred to them by their mother at which point we were consulted by the husband’s three children.
The verbal agreement
Although the agreement between the husband and wife was only verbal, it was enforceable if it could be proven. This was obviously difficult with so many years having passed. The first step was to see if the wife’s 1985 Will was consistent with the verbal agreement alleged by the 3 children of the husband. Although we had the husband’s 1985 Will we did not have the Wife’s 1985 Will. The husband’s children did not know the legal firm which had prepared the 1985 Will. This meant that we needed to make exhaustive enquiries throughout QLD with very many law firms in that State. Eventually, we did find the wife’s will which was consistent with our client’s understanding of the verbal agreement between their father and step mother. This discovery then justified taking the next step which was to obtain a freezing order requiring the proceeds of the home, transferred to the wife’s daughters, to be held in trust pending the outcome of the court case.
The next step was to prove that there had been a verbal agreement between the husband and wife as the mere fact of having made mutual wills is not enough to prove an agreement by the survivor not to revoke. As both husband and wife were deceased, this was the most challenging part of the case.
The husband’s children gave evidence that their father and stepmother had embarked on a trip throughout Queensland to visit them and to explain to each of them personally what the husband and wife had arranged and agreed between them concerning their Wills. This relied upon their memory of conversations which had taken place between the parents and our clients 21 years previously. The wife’s daughters disputed any such agreement and gave evidence that the husband and wife had never mentioned any such agreement to them. They also claimed that the evidence of our clients was rehearsed and did not reflect a true recollection of what had been said to them (if anything). The judge acknowledged that the visit to the husband’s children and not the children of the wife, may only have been because the husband’s children did not get on with their stepmother and the husband and wife might have simply been trying to smooth things over with those most likely to object to the arrangement. The judge rejected the submission that our clients’ evidence was rehearsed and not a genuine recollection. He noted that there were a number of inconsistencies which were not what would be expected if evidence was rehearsed. On the other hand he held that their evidence (inconsistencies notwithstanding) supported the common theme that there had been an agreement made between the husband and wife to leave the home and the investment property to all 5 children and that the survivor had agreed not to revoke their Will which reflected this agreement.
The next question was, what were the terms of that agreement. If it was only that the wife would leave her estate (whatever that happened to be at the date of her death) then she would have been free to do what she liked whilst she was alive. The court accepted however that the agreement specifically related to those particular properties the expectation being that the wife would live in the home until her death and derive an income from the investment property from which to live and then both properties would pass to the 5 children. This is in fact exactly what did happen. As mentioned, although the wife transferred the title of the home to her daughters she continued to treat it as her home until her death.
The result was that the daughters were ordered to pay to our client’s, our client’s share of the proceeds of sale of the home which had been frozen by the earlier court orders. The daughters also ended up relinquishing their share of the investment property to our client’s, in satisfaction of the costs order made against them in the court at first instance and the costs of the appeal.
If you wish to read more about this case the decision in the original hearing of the QLD Supreme Court can be located at https://www.queenslandjudgments.com.au/case/id/70328 and the Appeal to the QLD Court of Appeal at https://www.queenslandjudgments.com.au/case/id/73153.