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[2022] VSC 702
General information, not legal advice.
Supreme Court of Victoria
2022-11-16
WALKER JA
Original judgment source is linked above.
WILLS & ESTATES - Appeal from decision of Associate Judge - Deceased made will and later made codicil - Registrar granted probate of will only, on basis of lack of testamentary capacity at time of codicil - Application for revocation of grant of probate of will - Whether appellant made out prima facie case to challenge grant of probate on basis that deceased had testamentary capacity at time of codicil - Whether judge erred in concluding no 'case for investigation' established as to deceased's testamentary capacity - Respondent challenged deceased's knowledge and approval of codicil - Whether judge erred in concluding prima facie case of lack of knowledge and approval of codicil - Appeal allowed in part.
PRACTICE & PROCEDURE - Application to adduce further evidence after hearing of appeal - Same evidence subject of same application before primary judge - No explanation for not seeking to adduce evidence at hearing of appeal - Where evidence can be adduced at trial - No prejudice in refusing application - Application refused.
Civil Procedure Act 2010, ss 7 and 9.
Gardiner v Hughes [No 2] [2019] VSCA 198; Veall v Veall [2015] VSCA 60; (2015) 46 VR 123, applied.
1 Brenda McPhee (also known as Wenda) died on 14 July 2018. She left a will dated 12 September 2002 and a codicil dated 30 September 2015. She was survived by her husband, Norman McPhee (from whom she was separated but not divorced), by two children from her first marriage, Timothy Ashley and Hanna Debae, and by her step-daughters from her second marriage, Lisa Lynch (the appellant), Julie Milosevic and Shelley McPhee.
2 By the will, Ms McPhee appointed Mr Ashley as her executor and trustee, bequeathed $300,000 to Mr McPhee and gave the residue of her estate to Ms Debae and to Mr Ashley's daughter, Lucy Ashley. At the time of Ms McPhee's death her estate was comprised of a one-half interest in a property in Research (valued at around $570,000), around $688,000 in Australian bank accounts and around $609,000 in bank accounts in the United Kingdom, together with liabilities of around $3,600.
3 By the codicil Ms McPhee appointed Mr Ashley and Ms Lynch as joint executors and devised her interest in the Research property to Ms Lynch. Ultimately, Ms Lynch renounced probate and Mr Ashley authorised Perpetual Trustees Company Limited (the respondent, 'Perpetual') to apply for probate.
4 Perpetual applied for probate of the will and codicil on 1 July 2020. In support of the application it filed an affidavit in which an employee of Perpetual, Mr Skilbeck, expressed the belief that the codicil was not a valid testamentary document because it appeared more likely than not that Ms McPhee lacked testamentary capacity at the time the codicil was executed. On that basis, on 16 November 2020 Perpetual amended its application to seek probate of the will only. On 19 November 2020, the Court granted probate of the will to Perpetual.
5 On 26 March 2021, Ms Lynch filed a summons seeking that the grant of probate of the will be revoked. While she sought revocation of the grant of probate of the will alone, she supported admission to probate of the will and codicil together. Her grounds for seeking revocation were that Ms McPhee had left a later valid testamentary document, the codicil, and that Ms McPhee had testamentary capacity at the time of executing the codicil. The particulars included reliance on statements by Ms McPhee's solicitor, Bruce Arthur, who had prepared and witnessed the codicil, and a conveyancer at his office, Linda Smith, who had also witnessed the codicil and taken instructions from Ms McPhee in relation to a transfer of the Research property. They said that they considered that Ms McPhee had testamentary capacity at the time she executed the codicil.
6 On 3 August 2021 a judicial registrar ordered that the proceeding be referred to a judge for a hearing as to whether Ms Lynch had established a prima facie case to challenge the grant of probate and whether Perpetual had prima facie grounds to object to any subsequent grant of probate of the will and codicil. Both parties filed evidence and submissions in advance of the hearing. Perpetual also filed a summons, after the conclusion of the hearing of the referred matter, seeking leave to adduce fresh evidence.
7 The matter was heard by an associate judge ('the judge'), who determined that Ms Lynch had not made out a prima facie case for challenging the grant of probate. His Honour further determined that, if he was wrong about Ms Lynch's prima facie case, Perpetual had demonstrated a prima facie case for objecting to the admission of the codicil to probate. His Honour dismissed Perpetual's application to adduce fresh evidence.[1]
8 Ms Lynch now appeals from the decision of the judge on 6 grounds:
Ground 1: the judge erred in finding that [Ms Lynch] [by] her grounds of objection dated 26 March 2022 (Grounds of Objection) did not establish a prima facie case for revocation of the grant of probate of the will dated 12 September 2002 of Brenda Blanch McPhee, deceased, in the sense that there was a 'case for investigation' or 'something to go on' that the deceased had testamentary capacity when she made her codicil dated 30 September 2015 (the Codicil).
The judge should have found that [Ms Lynch's] Grounds of Objection established a prima facie case for revocation, on the basis that there was a 'case for investigation' or 'something to go on' that the deceased had testamentary capacity when she made the Codicil.
Ground 2: the judge erred in approaching the matter (at [115], [116], [123], [129]) by applying the doctrine of suspicious circumstances, requiring [Ms Lynch] affirmatively to prove that the deceased had testamentary capacity when she made the Codicil, whereas at this interlocutory stage she only needed to establish a prima facie case that the deceased had testamentary capacity when she made the codicil.
The judge should have approached the matter by assessing whether the matters particularised in the Grounds of Objection, and in the evidence adduced by [Ms Lynch], raised a 'case for investigation' or 'something to go on' that the deceased had testamentary capacity when she made the Codicil.
Ground 3: the judge erred in approaching the matter as if at trial, by assessing whether the evidence adduced was likely to be sufficient at trial to result in the revocation of the grant of probate.
The judge should have approached the matter by assessing whether the matters particularised in the Grounds of Objection, and in the evidence adduced by [Ms Lynch], raised a 'case for investigation' or 'something to go on' that the deceased had testamentary capacity when she made the Codicil.
Ground 4: the judge erred in finding (at [126]) that the only evidence likely to be ... available from Mr Bruce Arthur, the solicitor who took the deceased's instructions for and witnessed the execution of the codicil, was a statement and file note filed by him in an earlier VCAT proceeding.
The judge should have proceeded on the basis that, if the matter proceeded to trial, [Ms Lynch] would have called Mr Arthur to attend to give evidence, and if Mr Arthur had refused to attend of his own volition, [Ms Lynch] would have issued a subpoena ordering Mr Arthur to attend to give evidence.
Ground 5: the judge erred in taking into account (at [121]) the evidence of the deceased's neighbours (John McBride, Sofie Laguna, Rachel Brown, Ivor and Maria Engleby) on the question whether the matters particularised in the Grounds of Objection, and in the evidence adduced by [Ms Lynch], raised a 'case for investigation' or 'something to go on' that the deceased had testamentary capacity when she made the Codicil.
The judge should have disregarded the evidence of the deceased's neighbour on the question of testamentary capacity, as to which their evidence was irrelevant or otherwise inadmissible.
Ground 6: the judge erred in finding (at [134]) that [Perpetual] had established a prima facie case that the deceased did not know and approve of the contents of the Codicil.
9 Ms Lynch also seeks an extension of time within which to file her notice of appeal. That application was not opposed. In those circumstances, I will grant the extension of time.
10 For the reasons that follow, I would allow the appeal on the basis of ground 1. I consider that Ms Lynch has made out a prima facie case for revocation, because there is a 'case for investigation' as to whether Ms McPhee had testamentary capacity at the time she executed the codicil. In light of that conclusion, it is not necessary for me to address grounds 2, 3, 4 and 5. I would dismiss ground 6 on the basis that the trial judge was correct to conclude that Perpetual had established a prima facie case that Ms McPhee did not know and approve of the contents of the codicil.
11 It is convenient to commence with a short chronology identifying key dates concerning Ms McPhee's medical history, together with key dates concerning the making and execution of the codicil.
(a) On 11 August 2015 Ms McPhee executed an enduring power of attorney concerning both medical and financial matters in favour of Ms Lynch. No evidence was adduced concerning the circumstances in which that power of attorney was executed.
(b) On 21 August 2015, Ms McPhee was admitted to the Austin Health Emergency Department following a fall. At that time she was aged 79. Hospital staff raised concerns about her possible cognitive impairment. Dr De Rooy conducted a Mini-Mental State Examination ('MMSE') of Ms McPhee, in which she scored 14/30. The date of this MMSE was later wrongly changed to 21 August 2016, a matter about which I will say more below. Dr De Rooy did not assess whether Ms McPhee had testamentary capacity.
(c) On 2 September 2015 Ms Lynch attended a meeting with Ms Linda Smith, the conveyancer at Bruce Arthur & Associates, for the purpose of transferring the whole of the Research property to her, using the power of attorney. Ms Smith declined to effectuate the transfer based on the power of attorney.
(d) On 7 September 2015 Ms McPhee attended a meeting with Ms Linda Smith concerning the Research property.
(e) On 9 September 2015 Ms McPhee and Ms Lynch attended a meeting with Ms Linda Smith where they discussed the Research property and the codicil. Mr Arthur also spoke with Ms McPhee alone, and he discussed with her the Research property and the codicil.
(f) On 20 September 2015, Ms McPhee's general practitioner, Dr Al-Zaini, referred her to Austin Health for a formal assessment.
(g) On 21 September 2015, Dr Bergin of Austin Health conducted another MMSE on Ms McPhee, in which she again scored 14/30. Dr Bergin did not assess whether Ms McPhee had testamentary capacity.
(h) On 23 September 2015, Ms McPhee was discharged from Austin Health and was referred to the Aged Care Assessment Service ('ACAS'). On 24 September 2015, ACAS arranged for a geriatrician to investigate and diagnose Ms McPhee's cognitive decline and to assess her capacity to make lifestyle and financial decisions.
(i) On 30 September 2015 Ms McPhee attended at Bruce Arthur & Associates to execute the codicil. She executed it in the presence of Mr Arthur and Ms Linda Smith; Ms Lynch was not present.
(j) On 1 December 2015 Ms McPhee was assessed by Dr Ariathianto who diagnosed the deceased with 'mixed Alzheimer's and vascular dementia with contribution from alcohol-related cognitive impairment and mood disorder'.
(k) On 9 December an Austin Health 'community progress note' recorded that Ms McPhee had 'no capacity to make decisions' for an enduring power of attorney, that there had been a clear diagnosis of dementia made by a geriatrician, and that she was 'too advanced for medication'.[2]
(l) In around September 2016, Ms McPhee moved into an aged care facility.
(m) On 9 January 2017 the Victorian Civil and Administrative Tribunal ('VCAT') appointed three limited guardians in relation to Ms McPhee: Ms Lynch, Ms Milosevic and Mr McPhee. Shortly afterwards, Mr Engleby, a former neighbour and friend of Ms McPhee's, instituted proceedings in VCAT to have the guardianship order revoked.
(n) On 17 February 2017 VCAT revoked the guardianship and financial power of attorney made in favour of Ms Lynch, on the basis that it was satisfied that Ms McPhee lacked capacity to make an enduring power of attorney and that the revocation was in Ms McPhee's best interests. VCAT appointed Mr Geoffrey Dillon, solicitor, as an independent administrator of the estate of Ms McPhee as a represented person.
(o) On 20 November 2017, Ms McPhee was assessed by neuropsychologist Dr Niu, who prepared a report dated 6 December 2017. Dr Niu assessed Ms McPhee's testamentary capacity and concluded that she did have testamentary capacity.
12 It is necessary to set out in some greater detail the evidence concerning Ms McPhee's medical history. This was set out in the affidavit of Ms Lucy Smith, which exhibited supporting documentation. The primary judge summarised the evidence as follows:
In particular, Ms Lucy Smith points to aspects of the Deceased's medical records, including:
(a) the Austin Health Emergency Department notes of 21 August 2015 that state the Deceased, 'has had multiple falls recently, in the context of worsening cognitive functioning';
(b) an Austin Health Community Progress note dated 9 December 2015 stating in relation to the Deceased's dementia, the Deceased was 'too advanced for any medications' and that she 'has not capacity to make decisions for EPOAs' [enduring power of attorneys]. The same note also states the Deceased did not require a referral to a memory clinic as the 'diagnosis of dementia is clear and made by a BECC [Bundoora Extended Care Centre] geriatrician';
(c) the Austin Health 'Community Episode' report dated 9 December 2015 which states that the Deceased had been:
[S]een by geriatrician Dr Yohannes Ariathianto who made a diagnosis of mixed dementia with a possible contribution from alcohol intake.
Christina said she is too advanced for any medications for AD.
(d) the Austin Health Emergency Continuation notes dated 20 September 2015 stating:
[D]aughters advise that [the Deceased] has a history of alcohol abuse..
her face has a mask like appearance..
failed driving test recently..
Both daughters are concerned about their mother's sudden physical deterioration + cognitive decline. They are concerned she may be at risk of injuring herself if she were to remain @ home alone.
(e) the Austin CATT - Core Medical Assessment Report and Discharge Summary dated 20 September 2015 stating:
[F]amily report subacute decline in cognition over last 6 months with confusion/memory impairment...Very tangential in conversation, difficulty answering direct questions and on several occasions forgot question mid conversation requiring prompting. Not oriented to place, year, month (October), date or day (Monday)... Needs formal assessment.
(f) the same report identified the Deceased had 'disorganised thinking, incoherence of speech' and identified the 'key issue' as 'confusion/cognitive decline';
(g) the MMSE of the Deceased by Dr Bergin dated 21 September 2015 showed a score of 14/30. This report notes the Deceased was unable to name the date, year, month, season, hospital/house number, ward/street name, suburb or state;
(h) the Austin Health Nutrition Assessment report dated 21 September 2015 recording the Deceased as having alcohol daily;
(i) the Austin Health Community Episode Consultation report dated 23 September 2015 stating:
6-12/12 of functional decline with cognitive impairment. Noticed by family: forgets important dates. Tangential in conversation. Prompting required. Not orientated to time, person, place. Needs formal assessment.
(j) Consultant Physician and Geriatrician, Dr Ariathianto's diagnosis of the Deceased on 1 December 2015 with:
Alzheimer's dementia and vascular dementia with contribution from alcohol-related cognitive impairment and mood disorder.
(k) Dr Ariathianto's report notes the Deceased has a:
[K]nown significant alcohol intake... cognitive decline since Christmas 2014 in the form of predominantly short-term memory loss... I suspect [the Deceased] lacks the capacity in making complex financial, medical and lifestyle decisions and is at risk of being taken advantage of financially.
Dr Ariathianto's diagnosis was made following:
An ACAS Assessment Outcome Report dated 24 November 2015 recommended 'investigation and diagnosis of cognitive decline, assessment of capacity to make lifestyle and financial decisions'; and
A home visit by Dr Ariathianto to assess the Deceased.
(l) Dr Niu's Neuropsychology Assessment Report dated 6 December 2017.[3]
13 Finally, it is necessary to set out the key aspects of Dr Niu's report, which was summarised by the primary judge as follows.
Dr Niu's report states that the neuropsychological assessment to characterise the Deceased's testamentary capacity was requested by Lisa to clarify the Deceased's wishes surrounding her assets as there were concerns surrounding her then cognitive functioning.
In a section entitled 'Relevant Medical and Health Information', Dr Niu makes reference to a letter dated 1 December 2015 by Consultant Physician and Geriatrician, Dr Ariathianto. Dr Niu's report states that in this letter, Dr Ariathianto:
(a) reported multiple causes of the Deceased's cognitive impairment and diagnosed her with probable mixed Alzheimer's dementia and vascular dementia with contribution from alcohol-related cognitive impairment and mood disorder; and
(b) was unable to complete an extensive objective cognitive assessment of the Deceased, however, he suspected the Deceased was lacking capacity in making complex financial, medical and lifestyle decisions and was at risk of being taken advantage of financially.
Dr Niu also noted that the Deceased had undergone a neuropsychological assessment by Dr Pangnadasa on 19 August 2016 [sic] while an inpatient at Austin Health. Dr Pangnadasa reported the Deceased:
[D]emonstrated poor insight and widespread cognitive impairment, suggestive of a dementia of Alzheimer's type.
Dr Pangnadasa also reported that the Deceased's decision-making capacity was likely to be compromised. Relevantly, Dr Niu's report refer[red] to the Austin Health discharge summary dated 16 August 2016 which listed an MMSE score of '14/30 in August 2016' [sic]. That MMSE was in fact carried out in August 2015, the month before the Deceased made her Codicil. This becomes critical to Perpetual Trustees' submissions, as discussed in paragraphs [86] and [121] below.
Dr Niu took a psychosocial history from the Deceased. The Deceased told Dr Niu that she was born in England and had first married at the age of 17. The Deceased said her first husband had died of cancer, leaving her with two children, Hanna and Timothy. Hanna has three children, Lucy, Elio and Sophie but the Deceased had little contact with them. The Deceased met her second husband, Norman while on holiday in Italy. The Deceased told Dr Niu that Norman had three children, Lisa, Julie and Shelley. The Deceased reported that Lisa did everything for her.
In relation to the Deceased's testamentary capacity, Dr Niu reported that the Deceased 'has sufficient testamentary capacity'. Dr Niu applied the Banks v Goodfellow test criteria and reported the following answers:
1. Does the testator know that the document is a Will?
[The Deceased] was generally able to portray a basic understanding of what constitutes a will.
2. Does the testator know their assets?
[The Deceased] was able to articulate her current asset, i.e. '[address], Reserve', but was unable to articulate how much the property was worth, and often referred to her solicitor, Norman or Lisa as 'sorting things' for her. In this regard, her knowledge of her assets may not be 'good enough', however, it should be noted that she has had a financial power of attorney since 2015, and currently, [an] administrator, who has been assisting her with her financial and/or legal circumstances.
3. Does the testator know to whom they owe a moral duty?
[The Deceased] was consistent regarding her wishes for her stepdaughter, Lisa, to receive her property. Whilst she required prompting about her family in England, she was consistent with regard to her wishes for her children (Hanna, Tim) to not receive the property. When queried about her previous neighbour, Ivor, she reported that whilst they were 'good friends' when they were neighbours, they were 'not that close' presently, and she did not want to give the property to him. She was steady with these wishes across both sessions of the assessment, stating that Lisa has 'always been there to look after' her. In all, [the Deceased] was consistent in her knowledge to whom she owed a moral duty.
Is the testator able to weigh up the claims of those people around them?
From a cognitive perspective, [the Deceased's] significant cognitive impairments including memory, working memory, reasoning and executive functioning will likely impede her ability to understand and to remember novel information in order to fully appreciate her options and to comprehend the consequences of her decisions. As such, she would conceivably find it difficult to weigh up the claims of the people around her effectively and efficiently without support from a trusted person.
5. Is the testator free from other delusions or mental defects?
Yes.
Ultimately, [the Deceased's] presentation suggests she has sufficient testamentary capacity - she provided reasonably accurate, sensible and consistent accounts of her current circumstances. Her wishes surrounding her estate should therefore be regarded as valid, as should her opinion regarding her family in England, given corroborative evidence indicating her lack of contact with them over the past two decades. Her reduced cognitive abilities suggest she will not be able to make complex decisions regarding her finances and/or legal circumstances.
[Emphasis in original]
I interpolate briefly to note that it can be readily assumed that reference to the 'Banks v Goodfellow test' is a reference to the 1871 decision of the High Court of England and Wales in Banks v Goodfellow which set out the requisite elements of testamentary capacity.[4]
14 It is finally necessary to set out in some greater detail the evidence of Mr Arthur and Ms Linda Smith concerning the circumstances in which they were consulted by Ms Lynch and Ms McPhee, the circumstances in which they took instructions in relation to the Research property and the codicil and the circumstances in which the codicil was executed.
15 Mr Arthur provided a witness statement in the VCAT proceeding, which was exhibited to Ms Hunter's affidavit. The key aspects of his witness statement were as follows:
16 A typed copy of Mr Arthur's contemporaneous file notes were also exhibited to Ms Hunter's affidavit. They recorded as follows:
September 9, 2015
Attending Brenda McPhee in relation to amendments to her Will as discussed with Linda. She wants to include Lisa Lynch as a co-executor and she wants to leave her interest in the [Research Property] to Lisa. Confirming that a one half share is to be transferred as discussed. Will and title to be obtained from Whitehead.
She has clear title and is transferring a half share to Lisa and she wants survivorship to Lisa's children if Lisa predeceases.
September 30, 2015
Attendance for the execution of the codicil.
October 30, 2015
Lisa Lynch rang to say that Jayne had been spelt without a Y in a few spots. Codicil was amended accordingly and Lisa advised.[6]
Mr Arthur's reference to 'Whitehead' was a reference to the law firm that had drawn up the deceased's will.
17 Ms Linda Smith also provided a witness statement in the VCAT proceeding, which was exhibited to Ms Hunter's affidavit. The key aspects of her witness statement were as follows:
18 A typed copy of Ms Linda Smith's contemporaneous file notes was also exhibited to Ms Hunter's affidavit. They were summarised by the judge as follows:
Ms Smith's file note dated 2 September 2015 records Lisa's attendance and request for Ms Smith to prepare a transfer of property from the Deceased to Lisa, relying on Lisa's powers of attorney. Ms Smith's note says she advised Lisa the firm would not do the transfer by power of attorney but would require the Deceased to 'sign and be able to understand what she was doing.' Ms Smith told Lisa she did not want to see Lisa and the Deceased together and that the Deceased would have to see Ms Smith alone so Ms Smith could make sure the Deceased 'understood the implications'.
Ms Smith's file note of the Deceased's attendance on 7 September 2015 notes that the Deceased owned the Research property where she lived alone, that the Deceased was separated from her husband and that she had independent means, including financial interests in England. Ms Smith noted that the Deceased had a stepdaughter, Lisa, a 'very financially independent' son and a family in England 'who she is basically estranged from'.
Ms Smith noted the reason for the Deceased's visit as being to transfer her house to Lisa, who she said looks after her, and with whom she had a very good relationship. The Deceased told Ms Smith she did not want her son to get her house after she dies. Ms Smith told the Deceased she was unhappy about transferring the whole house to Lisa, leaving the Deceased potentially homeless. Ms Smith advised the Deceased that she could leave the house to Lisa by codicil to her Will. This file note concluded:
I told her that she was to come back to see me with Lisa so that I can express my concerns re the Transfer of the whole house, also payment of stamp duty and family law consequences. I would also speak with Bruce about her Will and doing a codicil which in my view was the better way to go.
Ms Smith's file note dated 9 September 2015 states that Lisa and the Deceased attended upon her that day. Ms Smith noted she explained in detail to both Lisa and the Deceased that she was unhappy about transferring the whole property to Lisa without a tenancy in place for the Deceased. The Deceased:
[W]as adamant that Lisa deserved the house and she wanted to make sure she got the house because she does not communicate or speak with her son and there could be problems after she dies.
In relation to the Will Lisa did not want Brenda to change her will maybe just transfer half of the house at this stage and ... then the other half could be left to her by codicil.
During this consultation, Ms Smith left Lisa and the Deceased in her office and consulted with Mr Arthur, the principal lawyer. Mr Arthur advised Ms Smith that:
[T]he transfer of half share would be fine as long as I was satisfied Brenda knew what she was doing. He would do the codicil to the Will.
[W]ent back and told them that I was satisfied that [the Deceased] understood the implications and I would draw up the Transfer etc.
Ms Smith then drew up the transfer documents and witnessed the Deceased's signature.[8]
19 Perpetual relied upon affidavits sworn by several of Ms McPhee's neighbours or former neighbours: Mr Engleby, Mrs Engleby, Mr McBride, Ms Laguna and Ms Brown.[9] It is not necessary to set out their affidavits in full. The gist of their evidence was as follows:
(a) They each gave evidence of having observed Ms McPhee's behaviour, including that she smelled of alcohol and that she had experienced difficulties driving her car.
(b) They each gave opinion evidence that they were concerned about Ms McPhee's mental state.
(c) Mr Engleby gave opinion evidence concerning what he regarded as Ms Lynch's endeavours to exclude him from Ms McPhee's life so as to isolate Ms McPhee from her friends.
(d) They gave evidence of behaviour by Ms Lynch, and opinion evidence that they regarded such behaviour as controlling of Ms McPhee.
20 Ms Lynch denied much of the evidence given by the neighbours, and objected to the admission of their evidence. Those objections were not resolved by the primary judge, although his Honour had regard to some of the evidence given by the neighbours. Those objections were maintained by Ms Lynch on the appeal. I have not found it necessary to resolve those objections because I have not found it necessary to rely on the neighbours' evidence for the purposes of resolving the issues on the appeal.
Perpetual's application to adduce further evidence after the hearing
21 After the hearing of the appeal Perpetual filed an application to adduce further evidence, being material contained in and exhibited to the affidavit of its solicitor, Ms Angela Liaskos, sworn 21 October 2022. The documents exhibited included certified extracts of the Heidelberg Magistrates' Court Register dated 4 March 2022, showing that Ms Lynch had pleaded guilty to two criminal charges, including perjury and production of data with intent to commit a serious offence. There was no dispute that those charges related to documents used in the VCAT proceeding. The certified extracts record the orders of the Magistrates' Court, relevantly including no conviction. Perpetual submitted that this evidence was principally relevant to ground 6 of the appeal, namely whether Perpetual had made out a prima facie case concerning Ms McPhee's knowledge and approval of the codicil. Perpetual also submitted that the evidence was relevant to the issue of Ms McPhee's capacity, because Dr Niu's report was based in part on the proposition that the MMSE test had occurred in 2016, not 2015.
22 Perpetual also submitted that the further evidence was responsive to submissions made by counsel for Ms Lynch at the hearing of the appeal, in particular the submission that Ms Lynch did not accept that there was any 'deliberate falsification and deception', and that an allegation that she had procured the alteration of the medical record, and sworn the false affidavit, deliberately to serve her own purposes was 'scandalous'.
23 Ms Lynch resisted admission of the further evidence on the basis that the certified extracts were not admissible to prove her state of mind, by reason of s 91 of the Evidence Act 2008. She also submitted that the evidence was not relevant to a fact in issue in the proceeding.
24 I note that the further evidence had been the subject of an application to the judge after the conclusion of the hearing before him. His Honour had refused that application.[10] Notwithstanding the fact that the evidence was available to Perpetual at the time of the hearing of the appeal, it had not sought to adduce the evidence prior to or at the hearing of the appeal. No explanation has been provided to the Court as to why Perpetual had not sought to adduce the evidence at that time.
25 As I explain further below, I accept that Ms Lynch's conduct in relation to the falsification of the medical records is potentially relevant to the question whether the circumstances in which the codicil was executed raise a prima facie case of suspicious circumstances concerning her knowledge and approval of the codicil (which is the subject of ground 6 of the appeal). However, it does not appear to me that the further evidence is relevant to the question of capacity. While Dr Niu's report was provided on the basis that the MMSE test had occurred in 2016, not 2015, which was plainly wrong, I do not consider that the intention or state of mind of Ms Lynch in procuring the change of date is relevant to the impact of the incorrect evidence on the weight to be given to Dr Niu's report.
26 At the hearing of the application to rely on the further evidence the parties addressed issues concerning the construction and operation of s 91 of the Evidence Act, and its relationship to ss 92, 178 and 183 of that Act. Neither party referred to any authorities concerning the interpretation and operation of ss 91, 92, 178, and 183 in a case of this kind. The issues raised are complex and potentially of more general importance. It is less than desirable for the Court to be called upon to resolve them without full argument and assistance from the parties. Thus, were I to determine Ms Lynch's objection, I may well have had to seek further written submissions from the parties and conduct a further hearing.
27 In determining whether to permit Perpetual to rely upon the further evidence, I must seek to give effect to the overarching purpose in s 7 of the Civil Procedure Act 2010 ('CPA'), namely to 'facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'. In so doing, I must have regard to the objects set out in s 9 of the CPA, relevantly including the efficient conduct of the business of the Court, the efficient use of judicial resources, minimising delay, the degree to which each party has been timely in undertaking interlocutory steps, and any prejudice that may be suffered by a party as the consequence of my order in relation to the application to rely upon the further evidence.[11]
28 In light of those matters, I have determined that it is not appropriate to permit Perpetual to rely upon the further evidence for the purposes of this application. That is principally because of the lack of promptness in seeking to adduce the further evidence. I consider that the application to adduce further evidence ought to have been made at or before the hearing of the appeal, not after it had concluded. That is so even though I accept that the application was prompted by the submissions made by counsel for Ms Lynch. As noted, no explanation was given by Perpetual as to why the further evidence was not sought to be adduced prior to or at the hearing of the appeal, in circumstances where Perpetual had sought to adduce the further evidence before the primary judge and where its failure to seek to rely on it on the appeal was the subject of express comment by me at the hearing.
29 Further, for me now to permit Perpetual to adduce that evidence would require me to determine complex questions of statutory construction, potentially with the necessity of further written submissions and a further hearing; that is not an efficient use of the Court's resources and would occasion further delay. I also note, as did the primary judge,[12] that Perpetual will be able to seek to adduce this evidence at the trial of this matter; and if it does so, Ms Lynch's objections to the evidence can be dealt with at trial. Thus my decision not to permit Perpetual to rely on the further evidence for the purposes of the question whether it has a prima facie case will not occasion it any real prejudice; and to the extent that there is some slight prejudice, that is outweighed by the other matters to which I have referred.
30 Thus I refuse the application made by Perpetual to rely upon the evidence in the affidavit of Ms Liaskos dated 21 October 2022 for the purposes of this appeal.
31 I note that at the hearing of Perpetual's application to rely upon the further evidence Ms Lynch submitted that if Perpetual was unsuccessful then I should make an order that it pay her costs of the application, on the basis that costs should follow the event. Perpetual submitted that a determination of costs should await the outcome of the appeal. I will deal with the costs of the application at the time that I deal with the costs of the proceeding.
32 The trial judge commenced his consideration of whether Ms Lynch had made out a prima facie case as follows:
As the Deceased's Codicil was duly executed, it is presumed valid unless that presumption is displaced by circumstances giving rise to a suspicion that the Deceased lacked testamentary capacity or did not know and approve the contents of the Codicil.
Where the evidence casts doubt on the Deceased's testamentary capacity, the Court must decide against the validity of the Codicil unless Lisa proves affirmatively that the Deceased was of sound mind, memory and understanding at the time she gave instructions and executed her Codicil.
In this case, there is significant medical evidence proximate to the time she made her Codicil casting doubt on the Deceased's testamentary capacity. ... In summary, that evidence includes that the Deceased had suffered a noticeable cognitive decline in the six months prior to September 2015, that on examination she was not oriented to time, person or place, and that only nine days before executing her Codicil she scored 14/30 on the MMSE conducted by Dr Bergin.[13]
33 His Honour then referred in more detail to Dr Ariathianto's report of 1 December 2015 and to the Austin Health Community Progress Note dated 12 December 2015.[14]
The suspicion that the Deceased lacked testamentary capacity when she made her Codicil is compounded by the evidence of her neighbours. That evidence corroborates the Deceased's significant history of alcohol intake and confusion. While I agree that not all of this evidence relates to a time proximate to the Deceased's execution of her Codicil, the evidence of Mr Engleby and Ms Brown does recount their observations of the Deceased in 2015.
Added to this evidence is the fact that Lisa initiated the preparation of the Codicil and took a substantial benefit under it. In addition, the Codicil, while perhaps not rising to the level of being irrational, did represent a significant departure from the Will which had been in place since 2002.
Suspicious circumstances having been established, has Lisa propounded a prima facie case the Deceased had testamentary capacity? Lisa points primarily to the evidence of Mr Arthur and Ms Smith and also to the report of Dr Niu to satisfy the Court that the Deceased had testamentary capacity at the time of making her Codicil.[15]
35 In relation to the evidence of Mr Arthur and Ms Linda Smith, the judge observed as follows:
On its face, the evidence of Mr Arthur and Ms Smith appears to raise 'a case for investigation' that the Deceased had testamentary capacity at the relevant time, noting that what is required is something less than that required to ultimately prove the issue at trial. Both Mr Arthur and Ms Smith gave statements on 22 May 2018 (for use in the VCAT proceeding) by which they stated, in broadly identical terms, that they were each firmly of the opinion that the Deceased knew exactly what she was doing, that her instructions were clear, lucid and precise and that she was not under any duress to prepare and sign the Codicil. Both stated that at no time did either form a view that the Deceased was not in total and complete control of her faculties. The authorities make clear that evidence from the person who actually takes the instructions and witnesses a testamentary instrument is to be afforded significant weight.
The evidence of Mr Arthur is, however, not limited to the substance of his statement. It also includes his contemporaneous file notes which were exhibited to his statement. Lisa submitted that Mr Arthur was an experienced solicitor who was alive to the issue of the Deceased's capacity. Mr Arthur's file notes made on the day he took instructions for the Codicil and on the day the Codicil was executed make no reference to the issue of the Deceased's capacity. In my view, if he was indeed alive to that issue, one would expect some level of detail about what steps he took to ensure that the Deceased did in fact have testamentary capacity, or indeed a reference to testamentary capacity in his file notes when he attended on the Deceased. Neither Mr Arthur's statement nor his file notes contain any record of Mr Arthur making inquiries about or assessing the Deceased's testamentary capacity. Neither contain any reference to Mr Arthur conducting the Banks v Goodfellow test or seeking any medical records in relation to the Deceased. Neither contain any record of Mr Arthur or Ms Smith actually obtaining the Deceased's Will from Whitehead, the former solicitors. Neither record that Mr Arthur made any relevant searches to ascertain the Deceased's assets other than the Research property. The highest Mr Arthur is able to put the issue is when he says in his statement, prepared approximately two-and-a-half years after the events in question, that his opinion was that the Deceased knew exactly what she was doing, her instructions were clear and lucid, and that she was in total and complete control of her faculties. Without a basis for his opinion that the Deceased was in total and complete control of her faculties, and in light of the contemporaneous medical evidence, Mr Arthur's opinion does not rise above the level of speculation.
Further, it is relevant to note that when asked if Mr Arthur was willing to file an affidavit in this proceeding, he declined because he had already provided his full and complete evidence. In light of this statement Mr Arthur's statement and file notes are likely to be the only evidence available from him.[16]
36 In relation to Ms Linda Smith, the judge accepted that her evidence indicated that she was concerned to ensure that Ms McPhee knew and understood the implications of what she was doing; and that Ms Smith had carefully set out both her concerns about the transfer of the Research property and her advice that only half the property be transferred inter vivos. The judge then said this:
What is unclear is how Ms Smith satisfied herself that the Deceased understood that advice and had capacity to make the Codicil. I note that Ms Smith's file notes record that in relation to the Will, it was Lisa who:
[D]id not want Brenda to change her will maybe just transfer half of the house at this stage and ... then the other half could be left to her by codicil.
Ms Smith's opinion of the Deceased's state of mind at the time she gave instructions, also recorded approximately two-and-a-half years after the event, raises the same issues as the identical statements in Mr Arthur's statement. Without a clear basis for this opinion, it is difficult to give it much weight.[17]
37 In relation to Dr Niu's report, the judge said this:
As I apprehend it, the issue for Lisa in seeking to rely on Dr Niu's report is that it was prepared in December 2017, more than two years after the Deceased gave instructions and executed her Codicil. Additionally, Lisa has submitted that although the Deceased had been diagnosed with dementia in December 2015 by Dr Ariathianto, dementia gets worse over time, not better. While seemingly based in common experience or common sense, there is no evidence before the Court to support that submission. Put simply, there is no medical evidence before the Court from which the Court could conclude that the type of dementia the Deceased suffered from universally follows a linear degenerative path, such that if she had testamentary capacity in 2017 she must have had testamentary capacity at the time she made her Codicil in September 2015.
Additionally, while Dr Niu conducted the Banks v Goodfellow test, it is completely unclear how Dr Niu satisfied herself that the Deceased had in fact identified all her assets or the full suite of people to whom the Deceased may have owed a moral duty. Dr Niu records that the Deceased identified her home as her asset and that she wanted to give her home to Lisa. In fact, the Deceased had significant other assets that she did not mention to Dr Niu. The Deceased told Dr Niu she did not want Hanna or Timothy to get her home, but failed to mention that Hanna is a significant beneficiary under the terms of her Will. These matters, coupled with the concerns articulated by Dr Niu about the Deceased's 'significant cognitive impairments', raise significant questions about the reliability of Dr Niu's finding that the Deceased had testamentary capacity.[18]
38 The judge then concluded that, considering the whole of the evidence, he was not satisfied that Ms Lynch had established a prima facie case that Ms McPhee had testamentary capacity at the time she made her codicil.[19]
39 In relation to the question whether Perpetual had made out a prima facie case of lack of knowledge and approval, the judge said this:
In the event that I am incorrect and Lisa has demonstrated a prima facie case, I would have found that Perpetual Trustees has established a prima facie case to challenge the Codicil. The preponderance of medical evidence, particularly from September and December 2015, more than provides a case for investigation. That evidence points to the Deceased having significant cognitive issues immediately before executing the Codicil culminating in her diagnosis with mixed Alzheimer's and vascular dementia approximately eight weeks after executing the Codicil. The evidence of the Deceased's neighbours, Mr Engleby and Ms Brown, corroborates the Deceased's cognitive issues and alcohol use in 2015. This evidence goes to the Deceased's capacity to know and approve of the contents of the Codicil. Additionally, the absence of evidence from Mr Arthur or Ms Smith of the steps either took to confirm the Deceased's capacity to understand the effect of the Codicil also provides something to go on.[20]
40 There was no real dispute between the parties as to the relevant legal principles to be applied, although they disagreed as to the application of the principles in this particular case.
41 First, there was no dispute that this appeal is one by way of re-hearing; that is, it is necessary for the appellant to demonstrate a legal, factual or discretionary error by the judge in order to succeed on the appeal.[21]
42 Second, the parties accepted that the principles explained in Gardiner v Hughes [No 2][22] govern the resolution of the appeal. In that case the Court of Appeal explained what is meant by a 'prima facie case' in the context of the revocation of a will. The Court observed that the requirement that an applicant for revocation demonstrate a prima facie case applies 'in recognition of the significant consequences that flow from impeaching the validity of a will of which probate has been granted'.[23] The requirement does not apply automatically, and the stage, if any, at which a prima facie case must be demonstrated is governed by rules of court and any directions given by the court.[24] In the present case, such a direction was given by the judicial registrar and no challenge has been made to that direction.
43 In explaining the content of a requirement that an applicant demonstrate a prima facie case, the Court of Appeal said as follows:
The task for the party seeking to have a grant of probate revoked is therefore to show that there is a 'case for investigation' or 'something to go on'. Such a case will, by definition, not be frivolous or vexatious. However, mere speculation will not suffice. Decisions in New South Wales capture a similar notion using the expression 'reasonably arguable' or, perhaps less commonly, 'substantial issue to be tried'. Consistently with the notion of 'investigation', New South Wales authorities permit regard to be had to the evidence 'reasonably thought likely to be available'.
...
[I]t will not simply be a question of deciding whether an inference justifying revocation should be drawn from the facts relied upon, or which of two possible inferences is to be preferred. Those would be matters for trial. Nor is the true question even whether the inference sought to be relied on is available on the facts (although if that were so, there would be a prima facie case for investigation as to whether or not the inference should be drawn). There may be a case for investigation even if all the facts needed to justify the inference in question are not yet known or alleged, but there is enough to 'go on' to call for a trial. That will be the case if there is a reasonable explanation for the facts relied upon which, if shown to be correct, would justify revoking probate. Each case will of course depend on its particular facts. But in every case the onus rests on the party raising the doubt as to validity.[25]
44 The Court of Appeal also explained that, although the power to revoke a grant of probate is discretionary, that is because various discretionary considerations are relevant to whether the relief sought should be granted; it is not because the question whether a prima facie case is made out is itself an exercise of discretion. Thus, the Court observed, 'discretionary considerations are apt to be considered along with the prima facie case question, at a preliminary stage'. But the determination of whether a prima facie case exists involves 'the application of a legal test to alleged facts'; and in law there is but one answer to that question (even though reasonable minds may differ as to the answer). That is, there 'is either a prima facie case or there is not' - the question is 'not one that "tolerates a range of outcomes"'.[26]
45 It is thus not necessary for an applicant for revocation to establish error of the kind described in House v The King[27] in order successfully to impugn a decision as to whether a prima facie case has been shown. The question is instead whether the decision was right or wrong on the evidence and the applicable law at the time of the decision.[28]
46 The Court also confirmed that it is not necessary, in order to make out a prima facie case, for the applicant for revocation to provide affidavits in support of her application; and in Gardiner [No 2] itself, the case had proceeded simply on the basis of particulars.[29]
47 Later in the decision, the Court of Appeal explained the application of the prima facie case requirement as follows:
[A]pplication of the prima facie test did not require a determination whether or not the particulars, in isolation or taken together, justified an inference of testamentary incapacity.
Instead, the question was whether the allegations, assuming them to be true, called for further investigation as to the testamentary capacity of the deceased. If so, resolution of that question was a matter for trial. The fact that a particular allegation might, depending on the context, either support an inference of incapacity or not did not mean that the case did not warrant further investigation based on that allegation. That very process of investigation would determine whether or not the inference should be drawn.[30]
48 The Court, having undertaken a review of the particulars for itself, concluded that a case for investigation was made out. It concluded as follows:
It may prove at the trial ... that the proper inference is that the matters relied on, even taken together, do not warrant drawing the inference that Mr Gardiner lacked testamentary capacity. However, a trial would proceed on evidence, rather than particulars, and the nature of the case for revocation may itself change as a result of pre-trial steps. All that needs to, and can, be decided at this point is that the applicants have shown a prima facie case for trial.[31]
49 It is also appropriate to set out the relevant principles concerning testamentary capacity and knowledge and approval. Those principles were considered by the Court of Appeal in Veall v Veall.[32]
50 In Veall, Santamaria JA, with whom Beach and Kyrou JJA agreed, surveyed the authorities on the concepts of testamentary capacity and knowledge and approval as applicable at trial. Because the Court there was concerned with the analysis to be undertaken at trial, the judgment deals extensively with matters of onus (which may shift at various stages in the proceeding). For present purposes, the matters of onus considered in Veall are not relevant, because the only questions are whether the parties have made out their respective prima facie cases; that is, has Ms Lynch made out a prima facie case that Ms McPhee had testamentary capacity at the time the codicil was executed; and has Perpetual made out a prima facie case that there are suspicious circumstances that might suggest that Ms McPhee did not know and approve of the contents of the codicil? The onus of making out a prima facie case rests on the party asserting that case; but that onus is relatively easy to discharge, as is apparent from the decision in Gardiner [No 2]; and it is not necessary to consider the shifting of the onus that can occur at trial.
51 Relevantly for present purposes, Santamaria JA said as follows in Veall:
In Kantor v Vosahlo, Buchanan and Phillips JJA (with whom Ormiston JA agreed) said:
... a propounder must show that at the relevant time a testatrix knows what she is doing and the effect of her dispositions; she must know what estate she has to dispose of and what persons might have a claim upon her bounty.
The 'relevant time' is the time at which the will is executed. The ability of a testator to make a will may fluctuate. A testator who is aged and infirm may suffer from dementia or some other form of impairment. But, if such a testator has lucid intervals, the inquiry must be directed to whether the will was made in such an interval.
...
Once the propounder has proved that the testator had testamentary capacity and that the will was duly executed, a further presumption arises that the testator knew and approved the contents of the will. As with the presumption of testamentary capacity, the presumption of knowledge and approval can be displaced by circumstances giving rise to a suspicion that the testator might not have appreciated the contents of the will and approved them.
...
'Knowing and approving of the contents of one's will is traditional language for saying that the will "represented [one's] testamentary intentions"'. 'Testamentary capacity' and 'knowledge and approval' are distinct concepts. The former is a necessary but not a sufficient condition for the establishment of the latter. In Hoff v Atherton, Chadwick LJ said:
[I]t may well be that where there is evidence of a failing mind - and, a fortiori, where evidence of a failing mind is coupled with the fact that the beneficiary has been concerned in the instructions for the will - the court will require more than proof that the testator knew the contents of the document which he signed. If the court is to be satisfied that the testator did know and approve the contents of his will - that is to say, that he did understand what he was doing and its effect - it may require evidence that the effect of the document was explained, that the testator did know the extent of his property and that he did comprehend and appreciate the claims on his bounty to which he ought to give effect. But that is not because the court has doubts as to the testator's capacity to make a will. It is because the court accepts that the testator was able to understand what he was doing and its effect at the time when he signed the document, but needs to be satisfied that he did, in fact, know and approve the contents - in the wider sense to which I have referred.
The circumstances that arouse suspicion will vary. The fact that a beneficiary took part in the preparation of the will is only an obvious example of a circumstance creating suspicion. In Wintle v Nye, Viscount Simonds said:
It is not the law that in no circumstances can a solicitor or other person who has prepared a will for a testator take a benefit under it. But that fact creates a suspicion that must be removed by the person propounding the will. In all cases the court must be vigilant and jealous. The degree of suspicion will vary with the circumstances of the case. It may be slight and easily dispelled. It may, on the other hand, be so grave that it can hardly be removed.[33]
52 Later in the judgment, Santamaria J addressed the relevance of the fact that a will has been prepared by a solicitor, and said this:
A solicitor who prepares a will comes under professional duties to exercise proper care and attention. In the United Kingdom, there are several decisions that inform the duty of a solicitor when taking instructions from an infirm testator. In Kenward v Adams, and Re Simpson, Templeman J said that, where a solicitor is making a will for an old or infirm testator, the solicitor should ensure that the making of the will is witnessed by a medical practitioner who satisfies himself as to the capacity and understanding of the testator and makes a record of his examination and findings. Needless to say, this is a counsel of prudence that must be subject to the circumstances of the case. The exigencies of the situation may make it impracticable; nor would it need to be followed where, despite the age of the testator, he is obviously well and is proposing to make a will that distributes his estate in a manner which is uncontroversial. Where it is evident that a will may be controversial and a solicitor does not take elementary precautions, the court will have to look elsewhere if it is asked to determine capacity and knowledge and approval. In Ashkettle v Gwinnett, Christopher Pymont QC, sitting as a Deputy Judge in the Chancery Division, referred to the judgments of Mummery LJ and Sir Scott Baker in Hawes v Burgess to the effect that 'it is "a very strong thing" for a judge to find lack of testamentary capacity when the will has been prepared by an experienced and independent solicitor following a meeting with the testator, when it had been read through and explained to her and when the solicitor had formed the view that the testator was capable of understanding the will, the terms of which were not, on their face, inexplicable or irrational'. Nonetheless, he said:
I accept the wisdom of these comments though I observe that they do not go so far as to suggest that, in every case, the evidence of an experienced and independent solicitor will, without more, be conclusive. Any view the solicitor may have formed as to the testator's capacity must be shown to be based on a proper assessment and accurate information or it is worthless; and (as Mummery LJ acknowledges) the terms of the will may themselves suggest that the solicitor's assessment was not soundly based.[34]
Ground 1: has Ms Lynch made out a prima facie case for revocation of probate?
53 In summary, Ms Lynch submitted that the evidence of Mr Arthur and Ms Smith - the only evidence from persons who observed Ms McPhee give instructions for the codicil and who witnessed the execution of the codicil - clearly raised a 'case for investigation' as to whether Ms McPhee had testamentary capacity when she executed the codicil. Further, she submitted that her case was supported by Dr Niu's report, which was the only expert evidence specifically directed to Ms McPhee's testamentary capacity, as opposed to her mental capacity more generally. Ms Lynch submitted that the ultimate question concerning Ms McPhee's testamentary capacity is a matter for trial.
54 In contrast, Perpetual submitted that the primary judge had not erred in concluding that Ms Lynch had not made out a prima facie case. It submitted that the judge had 'carefully assessed all of the evidence before him', that there were contemporaneous documents relevant to the question of the deceased's testamentary capacity and that, 'on the balance of probabilities', they 'tend to show that the deceased lacked the requisite testamentary capacity'. Perpetual submitted that the evidence filed by Ms Lynch 'did not and [could not] change that conclusion even at the preliminary stage of the assessment by the Court'.
55 In light of the Court of Appeal's decision in Gardiner [No 2], the question arising under ground 1 is whether Ms Lynch has made out a prima facie case - that is, raised matters calling for investigation - that Ms McPhee had testamentary capacity at the time she executed the codicil. The question is not whether the medical evidence casts doubt on Ms McPhee's testamentary capacity (which it plainly does), or whether Ms Lynch has affirmatively proved that Ms McPhee was of sound mind, memory and understanding at the time she executed the codicil. That would be a question for trial, if a prima facie case is made out.
56 As observed earlier, I have concluded that Ms Lynch has raised a prima facie case, such that ground 1 is made out, and the judge erred in concluding otherwise.
57 I accept Perpetual's submission that the question of whether a prima facie case is made out falls to be evaluated by reference to both the grounds of objection (and the particulars thereto) and any evidence filed by the parties. That is because there may be cases where the strength of the evidence filed in response to an application for revocation is so overwhelming that it makes clear that, notwithstanding that the applicant has marshalled some evidence in support of his or her case, when that evidence is assessed in light of the responsive evidence it is plain that there is no prima facie case. Ms Lynch accepted as much in the course of oral argument. However, that evaluation must also proceed on the basis that the evidence filed by the parties may not reflect all of the evidence they might seek to rely on at trial. As the Court observed in Gardiner [No 2], the notion of 'investigation' permits regard to be had to the evidence 'reasonably thought likely to be available' at trial,[35] and additional evidence may emerge in the course of pre-trial steps.
58 In that regard, I note that the evidence filed by Ms Lynch was her own affidavit and affidavit evidence sworn by her solicitor, Ms Hunter. Ms Hunter's evidence included, as exhibits, a witness statement signed by Mr Arthur for the purpose of the VCAT proceeding; and a witness statement signed by Ms Linda Smith for the same purpose. Each of those statements also attached contemporaneous file notes from the time the codicil was prepared and executed. Ms Lynch did not seek to adduce direct evidence from those witnesses for the purposes of the prima facie case hearing. No objection was taken to her reliance on the hearsay evidence given by Ms Hunter. Similarly, although Perpetual adduced some direct evidence concerning Ms McPhee's circumstances from her neighbours, to the extent it relied upon medical evidence it did so by exhibiting various medical records to the affidavit of one of its employees, Ms Lucy Smith. Again, no objection was taken to that course. Nor were the deponents of any of the affidavits required for cross-examination. The reliance on hearsay evidence, and the lack of cross-examination, was consistent with the nature of the hearing as an interlocutory hearing directed to determination of a limited issue not requiring direct evidence: namely, whether a prima facie case was made out.
59 I do not consider it appropriate to determine whether Ms Lynch has made out a prima facie case on the assumption that Mr Arthur will give no further evidence about his interactions with Ms McPhee immediately prior to and at the time of execution of the codicil. Indeed, it would be surprising if, at trial, Ms Lynch did not call Mr Arthur to give evidence given that, as the primary judge observed, Mr Arthur's evidence as exhibited to Ms Hunter's affidavit was not itself given by way of affidavit, but by way of a signed witness statement that had been prepared for a different proceeding in VCAT.[36] As the parties accepted, that witness statement is unlikely to be admissible at trial as Mr Arthur's evidence in chief. And if he failed to give evidence, then it would seem unlikely that Ms Lynch's case could succeed. If Mr Arthur gives evidence at trial, then he might supplement the account he has already given. That is so even though, as Perpetual pointed out, Mr Arthur told Ms Hunter that he had already provided his 'full and complete evidence' in his VCAT statement and that he would not provide any further evidence 'at this time'. Plainly Mr Arthur was not there suggesting that he would not comply with a subpoena, if one were issued. I also note that, before the judge, Perpetual contended that Mr Arthur had failed to exercise due care and attention in preparing and witnessing the codicil. That may well prompt Mr Arthur to consider that he does have further evidence to give. Finally, it does not follow that, because Mr Arthur considered in 2021 that he had given 'full and complete evidence', that he had in fact given all evidence that may be relevant to Ms McPhee's testamentary capacity, which was not directly in issue in the VCAT proceeding. I also note that Mr Arthur would also potentially be subject to cross-examination at any trial.
60 Likewise, I do not consider it appropriate to determine the question whether Ms Lynch has made out a prima facie case based on the assumption that the medical evidence upon which Perpetual relies will not be supplemented at trial by direct evidence from Ms McPhee's treating doctors, who will also potentially be subject to cross-examination.
61 I turn now to the key question: has Ms Lynch made out a prima facie case that Ms McPhee had testamentary capacity in September 2015 when she gave instructions for, and executed, the codicil? It is important to note that, in answering that question, the focus is on Ms McPhee's capacity at the time at which she gave instructions to Mr Arthur and the time at which she executed the codicil. In my view the evidence concerning Ms Lynch's conduct (in particular her conduct after the execution of the codicil) is not relevant to this ground. (It is, however, relevant to ground 6, which I address later in these reasons.)
62 Bearing in mind the relatively low bar set by the prima facie case requirement - that there be a 'case for investigation', or material that provides 'something to go on'[37] - I consider that the evidence adduced by Ms Lynch, even when considered in light of the evidence adduced by Perpetual, compels the conclusion that she has made out a prima facie case.
63 Ms Lynch relied in particular upon the file notes and witness statement of Mr Arthur, the solicitor who had taken instructions from Ms McPhee, drawn up the codicil and witnessed her execute the codicil. That is important evidence in a case of this kind. Although it appears that Mr Arthur had not followed the 'counsel of prudence' referred to in Veall,[38] and ensured that the making of the codicil was witnessed by a medical practitioner who was satisfied as to Ms McPhee's capacity, nonetheless the material before the Court supports the proposition that Mr Arthur had turned his mind to whether Ms McPhee understood the instructions she was giving and the codicil she executed. Ms Linda Smith's file notes record a conversation she had with Mr Arthur in which he told her that she needed to be sure that Ms McPhee 'knew what she was doing'. It is unlikely that, having given that advice to Ms Smith, Mr Arthur failed to take that approach to Ms McPhee's execution of the codicil. As already noted, before the judge Perpetual alleged a failure to exercise due care and attention on Mr Arthur's part. That allegation cannot be tested at the prima facie case stage, in circumstances where the only evidence concerning Mr Arthur is given by way of the exhibiting of his file notes and witness statement to Ms Hunter's affidavit. It would be entirely inappropriate for a court to determine that question without Mr Arthur having an opportunity to respond to it. Rather than being resolved at the prima facie case stage, this would be a matter 'for investigation' at trial.
64 In addition, Mr Arthur gave evidence in the VCAT proceeding of his opinion as to Ms McPhee's testamentary capacity, in the statement exhibited to Ms Hunter's affidavit. While he did not set out in his file notes or in his witness statement a detailed basis for the opinion he expressed in the witness statement, I do not consider that that means that his evidence is to be given so little weight that it does not provide a matter calling for investigation. To the contrary, I consider that, considered in isolation, Mr Arthur's evidence establishes a prima facie case. That view is strengthened by the fact that Mr Arthur's evidence is supported by Ms Linda Smith's file notes and witness statement.
65 In that regard, I bear in mind the remarks from Veall, quoted above, that it is a 'very strong thing'[39] to find a lack of testamentary capacity in relation to a will prepared by an experienced and independent solicitor. There has been no suggestion that Mr Arthur was not experienced or independent. It seems clear that he met with Ms McPhee, on her own, to take instructions in relation to the preparation of the codicil. That meeting appears to have come about after Ms McPhee had been advised by Ms Linda Smith that, rather than transferring the Research property to Ms Lynch outright, she ought to transfer half the property and execute a codicil to her will. It appears that Ms McPhee accepted that advice. The codicil was also executed in Mr Arthur's presence, and he has stated that if he had had any reservations about Ms McPhee's capacity he would not have drawn and witnessed the codicil. I do not accept that I can or should infer that Mr Arthur did not have a copy of Ms McPhee's will; the drafting of the codicil, by reference to particular clauses in the will, suggests otherwise. In any event, that is not a matter to be determined at the prima facie case stage of the proceeding. Nor, in my view, were the terms of the codicil on their face irrational; Ms McPhee was choosing to leave a part of her relatively large estate to her step-daughter and the evidence is that she explained this to Mr Arthur as being 'a gesture of appreciation for all that Lisa [ie Ms Lynch] had done for her'. Ms McPhee's expression of her intention, in the absence of Ms Lynch, was also confirmed by Ms Linda Smith. Whether that explanation is plausible would be a matter to be tested at trial; it is not a matter for determination at the stage of assessing whether Ms Lynch has made out a prima facie case.
66 Of course none of those matters mean that Mr Arthur's evidence is conclusive as to Ms McPhee's testamentary capacity. Ultimately, his view as to Ms McPhee's capacity must be shown to have a proper basis. And his opinion may be contradicted by the medical evidence. But all that is a matter for trial; it is something to be investigated. It is not a matter to be demonstrated at the stage of determining whether there is a prima facie case warranting a trial.
67 The further question is whether the evidence filed by Perpetual - in particular, the medical evidence - is such that I should conclude that it negates any prima facie case raised by Mr Arthur's file notes and witness statement. There are two reasons why I do not think that the responsive evidence has that effect.
68 First, even accepting that Ms McPhee suffered from dementia from a point in time prior to the execution of the codicil, it is possible that she had 'lucid intervals' and thus had capacity at the time that she gave instructions for and executed the codicil.[40] Perpetual accepted as much in the course of oral argument. That is, Mr Arthur's expressed opinion as to Ms McPhee's testamentary capacity at the time she executed the codicil is not inherently or necessarily inconsistent with the medical evidence as it presently stands. The question whether Ms McPhee, if she had dementia, nonetheless had lucid intervals during which she had testamentary capacity, and had such an interval on the occasions she visited her solicitor, would be a matter that would be properly explored at trial; it does not fall to be resolved at the stage of determining whether there is a prima facie case.
69 Secondly, while the bulk of the medical evidence before this Court supports the proposition that Ms McPhee was suffering from dementia at the relevant times, Dr Niu's report provides some support for Ms Lynch's case. Perpetual submitted that Dr Niu's report was not proximate to the execution of the codicil and that it relied, in part, on false information, namely the date of the MMSE conducted by Dr Bergin. On the other hand, Ms Lynch submitted that Dr Niu's report was prepared after spending two-and-a-half hours with Ms McPhee; that it was the only report to have expressly addressed the requirements for capacity outlined in Banks v Goodfellow;[41] and that, having considered those requirements Dr Niu concluded that Ms McPhee had testamentary capacity. She also submitted that Dr Niu's report suggested that, if Ms McPhee had testamentary capacity in 2017, she 'may well have had' testamentary capacity in 2015, and that Dr Niu's report 'called for further investigation' into that question.
70 In my opinion, while Dr Niu's report does not establish that Ms McPhee had testamentary capacity in either 2015 or 2017, it nonetheless provides a further reason why the medical evidence, considered as a whole, does not mean Mr Arthur's evidence is to be put to one side. In that respect it supports Ms Lynch's contention that there is a case for investigation. That is so even though Dr Niu was told that the August 2015 MMSE had been done in 2016.
71 All of the medical evidence will no doubt be explored at trial and I should not be understood as suggesting that the medical evidence does not support a conclusion, on the balance of probabilities, that Ms McPhee lacked testamentary capacity at the relevant time. But again, that is a question for the trial judge; it is not the question to be answered at this stage of the proceeding. For present purposes, in my opinion the medical evidence considered as a whole is not such that it forecloses Ms McPhee's testamentary capacity at the relevant time as being a matter that calls for investigation, in light of the evidence about the circumstances in which she interacted with Mr Arthur and Ms Linda Smith and executed the codicil.
72 Perpetual also relied upon the evidence of Ms McPhee's neighbours, as corroborative of Ms McPhee's drinking and general decline, and thus as corroborating the medical evidence concerning her lack of testamentary capacity. Even if their evidence can be used in that manner (which Ms Lynch did not accept), I do not consider that, alone or in combination with the medical evidence, that evidence negates the effect of Mr Arthur's and Ms Linda Smith's evidence so as to rule out there being a case for investigation. Ultimately, the admissibility of the evidence given by Ms McPhee's neighbours will be a matter for trial; it is not necessary for me to determine that question for the purposes of this appeal.
73 It may be that, at trial, once all the evidence has been adduced and witnesses have been cross-examined, Ms Lynch will not be able to discharge her onus of proving Ms McPhee's testamentary capacity at the time Ms McPhee executed the codicil. But that is not a question it is necessary or appropriate for me to resolve on this appeal; it is a question for another day.
74 For these reasons, I consider that Ms Lynch has made out a prima facie case that Ms McPhee had testamentary capacity at the time she gave instructions for and executed the codicil. I will therefore allow ground 1 of the appeal. As already noted, it is thus not necessary to consider grounds 2, 3, 4 and 5, although some aspects of those grounds have necessarily been addressed in considering ground 1.
Ground 6: Has Perpetual made out a prima facie case of lack of knowledge and approval?
75 Ms Lynch submitted that the primary judge erred in concluding that Perpetual had made out a prima facie case that Ms McPhee lacked knowledge and approval of the codicil. She identified three specific errors in this regard:
(a) First, she submitted that the judge erred in taking the evidence of Mr Arthur or Ms Smith as lending any support to Perpetual's case. They both gave clear evidence that Ms McPhee was in control of her faculties and knew what she was doing when she made the codicil. To the extent that there are deficiencies in their evidence (which Ms Lynch denied), she submitted that such deficiencies could not count in favour of Perpetual's case - rather, they were matters for trial.
(b) Secondly, she submitted that the primary judge erred in relying on the evidence of Ms McPhee's neighbours, which had no direct bearing on the question whether the deceased knew what the codicil contained and approved of it.
(c) Thirdly, she submitted that the judge erred in concluding that the medical evidence provided a case for investigation that the deceased did not know and approve the codicil. She submitted that the medical evidence, while relevant to Ms McPhee's testamentary capacity, had 'no direct bearing on the question of knowledge and approval', and that it did not touch on the preparation or execution of the codicil.
76 In response, Perpetual submitted that the primary judge did not err in concluding that it had made out a prima facie case that Ms McPhee lacked knowledge and approval of the codicil. It pointed to the following matters that supported its prima facie case:
(a) Ms Lynch had prevented Ms McPhee from seeing her neighbours and friends, thus causing a degree of social exclusion;
(b) Ms McPhee's testamentary intentions as reflected in her will were long-held, and there was nothing to indicate why she made the change in the codicil;
(c) there was no explanation as to why Ms McPhee had made a bequest to Ms Lynch, but not to Ms Lynch's sister, who had also visited Ms McPhee from time to time;
(d) Ms Lynch had initially sought to use her power of attorney to transfer the whole of the Research property to herself; and
(e) the power of attorney had been made by a different law firm, close to the time the codicil was made, and at a time when Ms McPhee had been admitted to hospital after several falls.
77 Ground 6 concerns whether Perpetual has made out a prima facie case that Ms McPhee did not know and approve the contents of the codicil. For the reasons that follow, I consider that the judge did not err in concluding that Perpetual has made out a prima facie case; although I have reached that conclusion for somewhat different reasons from his Honour (I note that, because of his view on Ms Lynch's prima facie case, the judge did not have to determine this question and so addressed it only briefly).
78 Again bearing in mind the relatively low bar set by the prima facie case requirement - that there be a 'case for investigation', or material that provides 'something to go on'[42] - I consider that the material before the Court compels the conclusion that Perpetual has made out a prima facie case that Ms McPhee may not have had knowledge and approval of the codicil.
79 I pause to note that Ms Lynch submitted that the application of the prima facie case test to the question of whether the testator had knowledge and approval of the will is in substance the same as the question whether there are circumstances that excite the suspicion of the Court in relation to that question. I do not accept that submission. When the question of whether there are suspicious circumstances arises at trial, the onus is on the person alleging a lack of knowledge and capacity to prove the facts that give rise to the suspicious circumstances by way of admissible evidence.[43] In contrast, at the preliminary stage, where what is being assessed is whether there is a prima facie case, the person alleging lack of knowledge and approval is not required to prove the facts upon which they rely; they are simply required to point to matters that show a 'case for investigation'.[44]
80 I also note that, when the court is considering whether there are circumstances that excite the suspicion of the court, one such circumstance requiring 'particular vigilance'[45] is the involvement of a beneficiary in the preparation of the testamentary document.
81 In the present context, I consider that Perpetual has made out a prima facie case that there are circumstances associated with the giving of instructions for and the execution of the codicil that, taken together, excite the suspicion of the Court that Ms McPhee did not know and approve of the codicil. Those circumstances are as follows:
(a) Ms Lynch held an enduring power of attorney ('EPOA') in relation to Ms McPhee prepared by Cleeland & Stevens Solicitors. That had been executed in August 2015, around one month prior to the making of the codicil.
(b) Ms Lynch, rather than Ms McPhee, initiated the first contact with Bruce Arthur & Associates 'in relation to matters concerning' Ms McPhee. There was no explanation as to why Ms McPhee did not consult E Murray Whitehead, the solicitors that had drawn up her will and held a copy of it, in relation to the codicil. Nor was there any explanation as to why Ms McPhee had not consulted Cleeland & Stevens, the solicitors that she had more recently seen for the purposes of preparation of the EPOA.
(c) Ms Lynch initially attempted to utilise the EPOA to effect the transfer of the whole of the Research property to herself.
(d) On 2 September 2015, when Ms Lynch first raised with Ms Linda Smith the transfer of the whole of the Research property to herself, she did so in the absence of Ms McPhee.
(e) Ms Smith's contemporaneous file notes record that, when Ms Smith saw Ms McPhee alone on 7 September 2015, Ms McPhee told her that she had 'left all of her English assets to her son/family in England'. But this did not accurately reflect the contents of Ms McPhee's will.
(f) Ms Lynch attended with Ms McPhee on 9 September 2015 for further advice concerning the transfer of the property.
(g) The codicil was executed at a time when the medical evidence suggested that Ms McPhee was experiencing a cognitive decline and had had several falls.
(h) Dr Ariathianto diagnosed Ms McPhee with dementia not long after the execution of the codicil. For the purposes of determining knowledge and approval, a court will already have concluded that the testator had testamentary capacity. But, as Santamaria JA explained in Veall, the testator's 'feebleness of body or mind'[46] may be relevant to the question of knowledge and approval. Thus Dr Ariathianto's diagnosis, and the concerns he expressed to the effect that Ms McPhee was at risk of being taken advantage of financially, are relevant. It is plain from the authorities that to take this into account does not trespass into the separate question of undue influence (which has not, to date, been raised by Perpetual as a basis for not admitting the codicil to probate).
(i) Finally, it was accepted by both parties that Ms Lynch procured the alteration of Ms McPhee's medical records to incorrectly show that the MMSE was administered in 2016, rather than 2015, and that she gave incorrect evidence about this issue in her affidavit filed in the VCAT proceeding.[47] While this conduct occurred well after the codicil had been executed, there is no hard and fast rule that matters occurring after the execution of a testamentary document are irrelevant to whether there are suspicious circumstances. In the present case Ms Lynch's later conduct is connected with the validity of the codicil because it concerned the timing of an important piece of medical evidence relating to Ms McPhee's frail state at the time of execution of the codicil. For that reason I consider that it is appropriate to consider this evidence in determining whether Perpetual has made out a prima facie case in relation to Ms McPhee's knowledge and approval of the codicil. In my opinion Ms Lynch's conduct in this regard contributes to there being a case for investigation.
82 For these reasons, I consider that Perpetual has made out a prima facie case that Ms McPhee may have lacked knowledge and approval of the codicil.
83 In light of the above reasons, I would allow the appeal in relation to ground 1 and dismiss the appeal in relation to ground 6. I will hear from the parties as to the appropriate form of orders to give effect to these reasons and in relation to costs.
[1] Re McPhee; Perpetual Trustees Co Ltd v Lynch [2022] VSC 213, [132], [134], [139] ('Reasons').
[2] I note that some of the material, including Perpetual's submissions, asserts that the community progress note was made on 12 September 2015. It is clear from viewing the document that it was in fact created on 9 December 2015, but that whoever created it used the American style of date (month-day-year) at one point in the document; see also Reasons, [10(a)], [34].
[4] Reasons, [62]-[68] (citations omitted).
[11] See also the discussion of the relevance of case management factors in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 210-11 [90]-[93], 214-15 [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); [2009] HCA 27.
[21] Weber v Deakin University (2016) 51 VR 272, 279 [24]-[25] (Zammit J); [2016] VSC 147.
[22] [2019] VSCA 198 ('Gardiner [No 2]').
[23] Gardiner [No 2] [2019] VSCA 198, [39] (Kyrou, McLeish and T Forrest JJA), referring to Gardiner v Hughes (2017) 54 VR 394, 417 [93] (McLeish JA, Tate and Kyrou JJA agreeing at 396 [1]-[2]); [2017] VSCA 167. I note that the present case differs from Gardiner [No 2] in that it involves an application for revocation of probate based on the validity, rather than the invalidity, of a testamentary document. Nonetheless, the principles articulated in Gardiner [No 2] are applicable to the exercise the Court is required to undertake.
[24] Gardiner v Hughes (2017) 54 VR 394, 417 [93], 418 [95] (McLeish JA, Tate and Kyrou JJA agreeing at 396 [1]-[2]); [2017] VSCA 167.
[25] Gardiner [No 2] [2019] VSCA 198, [41]-[42] (Kyrou, McLeish and T Forrest JJA) (citations omitted).
[26] Gardiner [No 2] [2019] VSCA 198, [43], [46] (Kyrou, McLeish and T Forrest JJA).
[27] (1936) 55 CLR 499, 504-5 (Dixon, Evatt and McTiernan JJ); [1936] HCA 40.
[28] Gardiner [No 2] [2019] VSCA 198, [59] (Kyrou, McLeish and T Forrest JJA), citing Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194, 203 [12] (Gleeson CJ, Gaudron and Hayne JJ); [2000] HCA 47.
[29] Gardiner [No 2] [2019] VSCA 198, [40] (Kyrou, McLeish and T Forrest JJA). The Court further observed that the respondents had submitted before the primary judge that the absence of evidence was fatal to the applicants' case, but that the primary judge had not accepted that submission, and that no party sought to agitate that question on the appeal.
[30] Gardiner [No 2] [2019] VSCA 198, [79]-[80] (Kyrou, McLeish and T Forrest JJA) (emphasis added).
[31] Gardiner [No 2] [2019] VSCA 198, [98] (Kyrou, McLeish and T Forrest JJA).
[32] (2015) 46 VR 123; [2015] VSCA 60 ('Veall').
[33] [2015] VSCA 60; (2015) 46 VR 123, 174 [167], 174-5 [169], 175-6 [173]-[174]; [2015] VSCA 60 (emphasis added) (citations omitted).
[34] [2015] VSCA 60; (2015) 46 VR 123, 183-4 [192]; [2015] VSCA 60 (emphasis added) (citations omitted).
[35] [2019] VSCA 198, [41] (Kyrou, McLeish and T Forrest JJA).
[37] Gardiner [No 2] [2019] VSCA 198, [41] (Kyrou, McLeish and T Forrest JJA).
[38] [2015] VSCA 60; (2015) 46 VR 123, 183 [192] (Santamaria JA); [2015] VSCA 60.
[39] [2015] VSCA 60; (2015) 46 VR 123, 183 [192] (Santamaria JA); [2015] VSCA 60.
[40] As discussed in Veall [2015] VSCA 60; (2015) 46 VR 123, 174 [167] (Santamaria JA); [2015] VSCA 60.
[42] Gardiner [No 2] [2019] VSCA 198, [41] (Kyrou, McLeish and T Forrest JJA).
[43] See generally the discussion in Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757, 770-2 [44]-[47] (Meagher JA, Basten JA agreeing at 761 [1], Campbell JA agreeing at 764 [19]); [2012] NSWCA 285 ('Tobin').
[44] Gardiner [No 2] [2019] VSCA 198, [41] (Kyrou, McLeish and T Forrest JJA).
[45] Tobin [2012] NSWCA 285; (2012) 83 NSWLR 757, 771 [47] (Meagher JA, Basten JA agreeing at 761 [1], Campbell JA agreeing at 764 [19]); [2012] NSWCA 285.
[46] [2015] VSCA 60; (2015) 46 VR 123, 177 [175]; [2015] VSCA 60.
[47] As discussed above, I dismissed Perpetual's application to adduce further evidence in relation to this conduct after the conclusion of the hearing. I have thus not had regard to that further evidence in resolving ground 6.
Lynch
Perpetual Trustees Co Ltd [2022] VSC 702
(2015) 46 VR 123
(2009) 239 CLR 175
(2016) 51 VR 272
(2017) 54 VR 394
(1936) 55 CLR 499
(2000) 203 CLR 194
(2012) 83 NSWLR 757