Dickman v Holley; Estate of Simpson

Judgment 1HIS HONOUR: The NSW Trustee and Guardian seeks judicial advice in relation to a deceased estate of which it is the administrator and an estate of which it is the financial manager. Part of the advice sought is as to whether it would be justified in bringing or not bringing proceedings against third parties for the recovery of moneys. That advice will be private advice and will not be published. Other advice sought relates to doubts the NSW Trustee and Guardian has concerning the validity of the will it is administering. Parts of the advice on that matter will be redacted in the published copy of these reasons.

Advice in relation to Estate of GA 2GA died on 29 March 2006. On 19 February 2009 probate was granted to AC of GA's will dated 23 July 2003. AC was the sole beneficiary of GA's estate. On 23 March 2011 letters of administration of the estate were granted to the NSW Trustee and Guardian. The NSW Trustee and Guardian was appointed administrator due to the incapacity of AC. 3The principal asset of GA's estate was his 70 per cent interest in a property in Darvall Road, West Ryde ("the West Ryde property"). That property was co-owned by GA and a Mrs Helena Stimpson in the proportions of 70 per cent and 30 per cent. Mrs Stimpson died in 1999. The NSW Trustee and Guardian seeks judicial advice as to whether it should further investigate the validity of the will of GA dated 23 July 2003 and as to whether it should institute proceedings against MC (the son of AC) [removed]. 4GA made a will dated 5 August 1998 by which he left his 70 per cent interest in the West Ryde property to Mrs Stimpson. There was no gift over in the event she predeceased him. Mrs Stimpson's daughter made a statutory declaration on 24 January 2000 that her mother had told her "four or five years ago" that she had a copy of GA's will naming her as his sole beneficiary. It is possible that GA made an earlier will, but no such will has been located. There is no evidence that anyone other than Mrs Stimpson was a beneficiary under a will made by GA prior to 2000. 5In a statutory declaration forming part of a caveat lodged by AC dated 31 August 2004, AC declared that he was the beneficiary under a will of GA dated 12 December 1999. The NSW Trustee and Guardian does not have a copy of that will. 6Probate in common form was granted for GA's will dated 23 July 2003. That will revokes all previous wills. GA left all his real and personal property to AC. The will provided for a gift over of real estate to AC's children if AC predeceased GA. 7The will is purportedly witnessed by a Deborah Cooper and a Keith Williams. For the reasons in the statement of facts, there is good reason to believe that Keith Williams does not exist, but is an alias [removed]. The NSW Trustee and Guardian raises two concerns about the validity of the 2003 will. The first is whether it was duly attested by two witnesses. The second is whether GA had capacity to make the will. A third potential cause of invalidity mentioned in counsel's advice is whether the will was procured by fraud. 8The fact that there appears to be no such person as Keith Williams and that [removed] does not indicate that the will was obtained by fraud. There seems no reason to doubt that AC was a friend of GA. After Mrs Stimpson's death it does not appear that there was anyone closer to GA who might have expected to inherit his property. The statement of facts contains no indication that GA has any relatives. He came to Australia many years ago as a refugee from Europe. 9It appears that GA's signature to the will was witnessed by two witnesses. I am not aware of any authority that a will is invalid if one of the attesting witnesses uses a false name. [removed]. Even if the will was not properly attested, the document purports to be a will and would be admitted to probate pursuant to s 18A of the Probate and Administration Act assuming that GA had capacity to make a will. 10The matters referred to in the statement of facts raise doubts as to GA's capacity to make the will of 23 July 2003. GA was admitted to a nursing home at Ryde in September 2003. According to a report provided to the Guardianship Tribunal dated 20 July 2004 an Aged Care Application and Approval Form dated 11 September 2003 listed dementia as one of the conditions affecting GA. It appears from the same report that GA's general practitioner, Dr Guy Davies, was of the view that as at September 2003 GA was unable to give instructions about anything. A tenant at the West Ryde property reported that GA was increasingly confused before going into a nursing home in September 2003. According to a letter written by Dr Davies dated 1 July 2004 GA had had progressive memory loss for the last four years (that is since 2000), and in 2002 he had a score of 22 out of 30 in a standard mini mental state examination. Dr Davies said that GA had suffered a progressive decline from 2002. 11Most of the material that the NSW Trustee has concerning GA's mental capacity in July 2003 is second-hand. It is not known whether any primary health records are still available. A mini mental state examination is essentially a screening tool. A single score of 22 out of 30 in 2002 would not provide an adequate basis on which to make an assessment of GA's testamentary capacity. Nor is testamentary capacity to be equated with an ability to manage one's own affairs. A person may be unable to manage his or her financial affairs, yet still have testamentary capacity. Nor does a diagnosis of dementia necessarily mean that a person lacks testamentary capacity. The question rather would be whether the degree of dementia was such that GA lacked testamentary capacity. Typically in such cases a loss of capacity arises because the person is unable to weigh the merits of competing claims on his or her testamentary bounty. Evidence is commonly given in probate cases that it is this ability that is most easily lost where dementia erodes the executive functioning of a will-maker's frontal lobe. The materials available to the NSW Trustee do not indicate any assessment of the extent to which GA's dementia affected his testamentary capacity. 12So far as appears, if GA lacked capacity to make the 2003 will, there is one of two possibilities: either, he made an earlier will in December 1999 referred to at [5] above, or he died intestate. So far as appears, in the latter case, his estate would pass to the State of New South Wales. If GA's estate passed to the State, it would be a matter for the Minister to determine whether or not the State's rights should be waived wholly or partly in favour of AC being the person for whom GA might reasonably be expected to have made provision. 13In Re Levy (deceased) [1953] VLR 652, the Public Trustee of Victoria had obtained a grant of probate in common form of the will of a testatrix whose capacity was in doubt. It appeared that the Public Trustee sought security from subsequent challenges to the will and possible liability to beneficiaries under an earlier will if it distributed the estate pursuant to the grant in common form (at 659). Sholl J gave judicial advice to the effect that the Public Trustee should apply for a grant of the will in solemn form so as to bind the persons interested under an intestacy or under an earlier will (at 658, 659). His Honour distinguished In the goods of Chamberlain (1867) LR 1 P & D 316 where Sir J P Wilde (later Lord Penzance) held that it was not competent for an executor who had obtained probate in common form to take proceedings for the issue of a citation calling upon the next of kin to propound the will in solemn form or show cause why the probate should not be revoked. In Re Levy (deceased), Sholl J said that whilst such a proceeding would be hostile to the will, and inconsistent with the position of the executor, that would not be the case if the executor himself sought a grant of probate in solemn form. This was so even though the executor need only prove due execution of the will leaving it to the party who challenged the validity of the will on grounds of incapacity to raise the issue of incapacity which would then be defended by those who took under the will (at 660-661). 14In the present case, GA's estate has been substantially distributed to AC for whom the NSW Trustee acts as financial manager. If the will is invalid and if there is no earlier will of which AC was the beneficiary, the NSW Trustee and Guardian would be protected from any personal liability to the State of New South Wales by s 40D(2) of the Probate and Administration Act. That section provides that an executor is not liable for any money or property paid or transferred in good faith under the probate or administration before revocation of the grant of probate. In Dickman v Holley; Estate of Simpson [2013] NSWSC 18, I held that notice of a claim would not preclude the application of the section (at [184]-[192]). In the present case there is not even notice of a claim. 15In Re Levy (deceased), Sholl J considered whether it would be sufficient merely for the Public Trustee to communicate to persons interested under the earlier will of the matters referred to in his report to the Court. His Honour concluded that that course would not afford sufficient protection to the Public Trustee in that case (at 655-656). That is not this case. The NSW Trustee and Guardian does not need protection from a claim that might be brought by the State of New South Wales or from anyone else. The NSW Trustee and Guardian is also the financial manager of AC's estate. It would not be in his interests for remaining moneys in the estate to be spent on the commencement of a suit for a grant of probate in solemn form, the purpose of which would be to raise an issue about the capacity of GA when he made his 2003 will. Whilst there is some doubt as to GA's testamentary capacity as at July 2003, there is no clear evidence that he lacked testamentary capacity. The lapse of time is likely to mean that available evidence would have been lost. 16In contrast to the position that obtained in Re Levy (deceased), it would not be appropriate in this case for the NSW Trustee and Guardian to institute proceedings for a grant of probate in solemn form of a will. I do not consider that it ought to expend any further moneys of the estate in investigating circumstances relevant to the validity of the will, unless it is apprised of a challenge to the will. The NSW Trustee would be justified in providing to the Minister administering the Probate and Administration Act the materials relevant to the question of validity of the will that were set out in the statement of facts together with counsel's opinion and these (unredacted) reasons. It would then be a matter for the Minister to decide whether or not proceedings should be instituted for a revocation of the grant. If such proceedings were unsuccessful, the estate would be entitled to its costs. Having regard to the lapse of time, the fact that it is problematic whether any finding would be made against the validity of the will, the possibility of there being an earlier will also in favour of AC, and the fact that AC appears in any event to be a proper object of GA's testamentary bounty who might be entitled to a favourable exercise of the Minister's discretion, are all matters that make it unlikely that any proceedings would be brought by the State of New South Wales to revoke the grant, even assuming that if the grant were revoked, any moneys could be recovered from the managed estate of AC. 17The NSW Trustee and Guardian would be justified in continuing to administer GA's estate, and continuing to administer AC's estate as his financial manager, on the assumption that the will of GA is valid and that no proceedings are likely to be commenced for a revocation of the grant, unless and until it receives notice to the contrary. 18[Paras 18-34 removed]