Estate of George Aeneas McDonald; Howard v The Sydney Children's Hospital Network

Supreme Court of NSW|2015-07-01|Before: White J

Solicitors: McCooe & McCooe (Plaintiff) Mills Oakley Lawyers (1st and 2nd Defendants) File Number(s): 2013/350649

Background

Mr McDonald was born on 29 August 1920. He did not marry. He had no children and his only brother predeceased him. He lived alone. He was interested in the doings of neighbours on the Greenwich peninsula. He was friendly with children in the neighbourhood and was described as being an "uncle" figure to them. He was a regular attendant at the local Presbyterian church. He worked as a volunteer at what was then the Royal Alexandra Hospital for Children at Camperdown from 1992 and continued to work as a volunteer when the hospital was moved to Westmead in 1995. He worked in the fundraising office of the Children's Hospital at Westmead as a volunteer and assisted at the hospital's annual Teddy Bears' Picnic and was involved in some individual fundraising for the hospital. In 2006 the fundraising staff of the hospital purchased a plaque in Mr McDonald's name for the children's playground and in 2007 the staff presented him with a 15-year service certificate and pin. He was a regular donor to the Children's Hospital making gifts often in an amount of $10 or $20 and sometimes up to or over $100.

Early wills

Mr McDonald was a client of the firm of solicitors known as Mackenzie Russell & Co. Mr Nigel Mackenzie Russell of that firm first met Mr McDonald in about the late 1960s or early 1970s. Mr McDonald had been a client of his father's practice for many years. Mr Russell prepared a will that was made by Mr McDonald on 8 August 1975. The will appointed Mr Russell as his executor. He left his estate to persons by the name of Hewitt. On 14 March 1990 Mr McDonald made a codicil to that will that was again prepared by Mackenzie Russell & Co. By the codicil Mr McDonald made specific gifts of items of personal property, such as ballet tickets, a typewriter etcetera. He made a gift to the Salvation Army of all of his clothes, furniture and household effects. Otherwise he confirmed his will of 8 August 1975.

Relations with the Howards

Mr David and Mrs Lisa Howard moved to Greenwich in December 1992. Mr McDonald was a neighbour. He lived directly across a laneway at the back of their house. Mr McDonald became a good friend of the Howards and their children and remained so until his death on 14 November 2013. Mr McDonald was a daily visitor to their house and spent a good portion of each afternoon with Mrs Lisa Howard. The Howard children would play on Mr McDonalds' trampoline in his backyard. Mr McDonald would visit the Howard's house daily, standing in the kitchen and talking to Mrs Howard as she prepared dinner. He watched television with the Howard children and played with their pets. He took the Howard children on outings such as on regular trips to the zoo and sometimes picked them up after school. When the Howards were away he would let himself into their house to feed their cat, look after the house, water the garden and so on. Mr McDonald used public transport. As he got older he had some falls and Mrs Howard would leave work (she worked in Mr Howard's dental surgery) to look after his needs. She took him to the doctor. She took him shopping. They were good friends and companions. She helped with his washing and with some household chores. Mr Howard and his son Jack did handyman jobs around Mr McDonald's house. Every day Mr McDonald would spend an hour with Mrs Howard in the kitchen talking while she prepared dinner. He was quiet and shy and quite secretive. He served in World War II and when asked by the Howards what he had done in the War said that there was nothing much to tell and that he had worked in the signal section as a clerk at South Head. They subsequently ascertained that he had been on active service in New Guinea. He had retired in 1981. A medical record of the Burns Bay Medical Centre which Mr McDonald attended records that he had never married but "Has fantastic neighbours that watch out for him, involved with his care at times".

1999 will

Mr McDonald made a new will on 20 September 1999. It was prepared for him by Mr Russell. The will contained a number of specific legacies to individuals such as a gift of ballet tickets to one couple; a typewriter, stereo system, records and record cabinet to another person; cameras, binoculars, photo albums and the like to another; and the trampoline to Mr and Mrs Howard. The will repeated the specific gift to the Salvation Army of Mr McDonald's clothes, household furniture and household effects. He told Mr Russell that he wanted to give the trampoline to the Howards because their children were always playing on it. Apart from these specific gifts, Mr McDonald left his estate to the Royal Alexandra Hospital for Children known as the New Children's Hospital Westmead and to World Vision Australia in equal shares. He told Mr Russell that he had been a volunteer worker at the Children's Hospital for many years; that he enjoyed the work; that he liked working for children and seeing that they were looked after. He gave no specific explanation for the gift to World Vision Australia.
During the course of Mr McDonald's meeting with Mr Russell in which he gave instructions for the 1999 will Mr McDonald also instructed Mr Russell to prepare a general power of attorney appointing Mr Howard as his attorney. A power of attorney was prepared and executed by Mr McDonald, but he told Mr Russell to hold onto the original power of attorney for the time being and keep it in safekeeping. He did not tell Mr Howard that he had appointed Mr Howard as his attorney.

Proposal for inter vivos gift of house

Mr Howard deposed that in June 2000 Mr McDonald said to him words to the effect of, "David, I'd like to leave this house to Lisa and your family". Mr McDonald told Mr Howard that his only real income was his pension. Mr Howard understood, possibly having been told by Mr McDonald, that the pension was the Veterans Affairs pension. Mr Howard deposed that after thinking the matter over he said to Mr McDonald words to the effect: "George it's very kind of you to want to leave the house to our family but would it not be better to make some arrangement now where you could transfer the house to us and you could have the house for the rest of your life and be paid an income by us. I would be quite happy to pay you at least $10,000 a year for the rest of your life".
Mr Howard told Mr McDonald that he should get legal advice and he asked his solicitors, McCooe & McCooe, to prepare a letter to Mr McDonald's solicitor.
Mr McDonald introduced the matter to Mr Russell in a curious way. He said to Mr Russell words to the effect: "Mrs Howard had a dream that I gave the house to her. She told me about the dream and has suggested that Mr and Mrs Howard own my house and that I remain living in the house and that they pay me some money every year."
Mr Russell advised Mr McDonald to ask the Howards to put the proposal in writing and to talk to a solicitor.
On 6 July 2000 McCooe & McCooe wrote to Mackenzie Russell & Co as follows: "We act for David Robertson Howard and Lisa Gai Howard of [yyy] Greenwich. Your client Mr McDonald is a neighbour and on friendly terms with our clients. Your client has indicated a desire to benefit our clients['] family and there have been some discussions relevant to an arrangement whereby your client would effectively gift his home at Greenwich to our clients upon certain conditions. We have discussed a possible arrangement with our clients and have been instructed to write to you setting out our clients' proposal, specifically - 1. Your client will transfer property [xxx] Greenwich to our clients for no consideration but subject to a legal life estate in his favour 2. As life tenant, your client would be liable to pay all outgoings in relation to the property including rates, insurance and maintenance 3. For the balance of your client's life time our clients will pay to your client an annual allowance of $10,000.00 indexed annually to a figure equal to the CPI plus 1%, the date of adjustment to be 1 July in each year 4. Our clients' obligations in relation to the annual financial arrangement is [sic] to be secured by way of a mortgage or charge over Mr Howard's farm at Rylstone which is unencumbered and presently has a value somewhat in excess of $200,000.00. Should our client at any time wish to sell this property, a further security is to be offered which is to be real estate in which our clients' equity is not less than $100,000.00 5. Upon your client's death and termination of the life estate, our clients are required to make within one year thereof a gift of $20,000.00 to the New Children's Hospital 6. All stamp duty, valuation fees and your reasonable costs to be borne by Mr and Mrs Howard."
After Mr Russell received the above letter from McCooe & McCooe he met with Mr McDonald who repeated the statement that Mrs Howard had had a dream that he had given the house to her and that was how the offer had come about. Understandably, Mr Russell cautioned Mr McDonald against the proposal. He said to Mr McDonald words to the effect: "If you want to keep your independence, don't be a part of this. If you accept this proposal or anything similar to it, you would be subservient to the Howards for the rest of your life. You can't simply change your mind if you no longer like the arrangement."
Mr McDonald accepted that advice. Mr Russell confirmed his advice to Mr McDonald in writing. Mr Russell said, amongst other things: "You have asked me how I feel about the proposal. I must say I feel very uneasy and uncomfortable learning about the transaction that is proposed. I know that parties like yourself and the Howards, and lawyers especially, try and take precautions to cover us for future unforeseen eventualities. It is impossible to cover every unforeseen event in the future, but in your case where you propose to give up so much, my concern for dealing with these unforeseen future events is greatest. There is other means of assisting you with obtaining finance to carry out emergency repairs to your property and to provide some extra ready cash. In such instances, you would remain as the absolute owner unfettered by the rights or benefits of others. We need to explore this in more detail with more input from you. Another factor that concerns me is you are dramatically changing the objects of your Will if you proceed with this proposal. It is wonderful that you have neighbours of whom you are very fond and who reciprocate the friendship. However, I would be failing in my duty to you if I did not encourage you to tread very slowly and carefully on the path you propose. My conservative opinion is that you should remain absolute owner of the property … at all times, unless you have sold the property and you are purchasing elsewhere. … … Unfortunately, because of the discussions that you have probably held with the Howards, you may now feel under some degree of obligation to go ahead no matter what I say. I am concerned that you have been put in this situation with your neighbours, of being in discussions that are very sensitive and may even affect your future relationship with them. You are about 80 years of age. As I mentioned this afternoon, when our elderly clients are in negotiations to do the sort of thing that you are planning, it is the lawyer's duty to his client and the client's family, to ensure that there is no undue influence exercised by the person or persons with whom the client is dealing. Once you have read these comments, I would appreciate talking to you again with a view to exploring other avenues of achieving your aim to: 1. carry out repairs on the house; 2. secure some extra income; and 3. provide some benefits for the Howards."
Mr McDonald accepted this advice and the proposal did not proceed. It appears that Mr McDonald did not further consult Mr Russell with a view to exploring other avenues of achieving the three aims referred to in Mr Russell's letter.

Continuation of good relationship with the Howards

In the years that followed relations between Mr McDonald and the Howards remained very good. In 2009 he had a heart valve repair procedure carried out and was in Longueville Hospital for rehabilitation for eight weeks. Mrs Howard took the newspaper to him every morning and picked up his washing and went back every afternoon with the children and delivered him clean washing. She adopted the same routine when he was admitted for another operation a few years later. From about 2007 Mrs Howard accompanied Mr McDonald to all of his doctor's appointments. From about mid 2011 Mr McDonald did not go out without Mrs Howard except for a short walk to church on Sundays. Every Wednesday she drove him to an appointment with his physiotherapist and picked him up and then drove to pick up one of the Howard children from school. Mr McDonald had a number of falls. Mrs Howard arranged a Vital Call system. He did not ever use it, but called Mrs Howard. Mrs Howard recalled that after Mr McDonald had had heart surgery (she recalled it was 2008, but the medical records suggest it was 2009) his health began to deteriorate and he gave her a list of people to contact in the event of his death.
Mr McDonald telephoned Mr Russell on 7 September 2006 and gave instructions that in his funeral notice he requested that there be no flowers, but that donations be made to the Children's Hospital and that cheques be sent to the Westmead fundraising department.

2011 will

On 17 November 2011 Mr McDonald telephoned Mr Russell and said words to the effect that he wanted to make a new will. Mr Russell attended Mr McDonald's house on Saturday, 19 November 2011. Mr Russell noticed no change in Mr McDonald's mental acuity, but he appeared to be physically troubled by his legs which were suppurating and bandaged. Mr McDonald had a copy of the 1999 will. He gave instructions to Mr Russell about changes he wanted to make, all of which were confined to the specific gifts in clause 3 of the 1999 will. Clause 3(a) of the 1999 will was a gift of any ballet tickets that Mr McDonald might hold at his death. He said that that clause should be cancelled. Clause 3(b) was a gift to an Emily Patterson of a typewriter, stereo system, records and record cabinet. Mr McDonald gave instructions to Mr Russell to cancel the gift of the typewriter, stereo system, records and record cabinet and substitute three coffee tables.
Clause 3(c) was a gift of cameras, binoculars, photo albums, slides and projector to a Nola Krollig. Mr McDonald said that clause should be deleted. Clause 3(d) was the gift to Mr and Mrs Howard of the trampoline. He instructed Mr Russell to add the stereo, records and record cabinet to that gift and to leave the trampoline to Annabel and Lillian Howard (two of Mr and Mrs Howard's children). He said that the gift to the Salvation Army of his clothes, household furniture and household effects should remain the same. He said that all other clauses of the will were to remain in force.
Mr Russell said to Mr McDonald words to the effect, "You know what you are doing with the residue?" and he said words to the effect "Yes. No change there." Mr Russell said to Mr McDonald that as the changes were limited he suggested that he do a codicil to the existing will rather than a completely new will. Mr McDonald agreed. Mr Russell prepared the codicil.
On 22 November 2011 Mr McDonald executed the codicil to the will of 20 September 1999. The codicil provided: "1. I amend clause 3 by i. omitting and deleting sub clauses (a) and (c); ii. substituting the words in sub clause (b) 'my typewriter, stereo system, records and record cabinet' with the words 'my three (3) coffee tables'; iii. substituting the word in sub clause (d) 'trampoline' with the words 'stereo records and record cabinet'; iv. adding sub clause (f) 'To Annabel Howard and Lillian Howard my trampoline'. 2. In all other respects I confirm my will dated 20th September 1999."
It is significant that notwithstanding the continued closeness of Mr McDonald's relationship with the Howards, and in particular with Mrs Howard, in November 2011 he did not consider that he should leave the bulk of his estate to any of the Howards.
Mr McDonald's physical condition continued to decline. By about July 2012 he stopped coming to the Howards' home on a daily basis because the steps were too much for him. Instead, Mrs Howard visited him and brought the Howard family pets (of whom Mr McDonald was fond) with her. By about November 2012 Mr McDonald became incontinent which was a source of great embarrassment to him. Mrs Howard helped him to clean up.
Mrs Lisa Howard deposed that at one time Mr McDonald had told her that he was leaving his estate to Westmead Hospital and on another occasion, that she thought was probably at least 10 years before his death, that is, before November 2003, he said that he would like to make David Howard his executor. After speaking to her husband Mrs Howard told Mr McDonald that David Howard would only be too happy to be the executor of his will. Mrs Howard was not cross-examined. Mr McDonald did not make any will prior to 7 June 2013 appointing David Howard as his executor although he had executed a power of attorney appointing David Howard as his attorney. It may be inferred that at some time in the early 2000s he was contemplating making a new will and appointing David Howard as his executor under such a will. But he did not do so.

Instructions for and execution of the 7 June 2013 will

Mr David Howard deposed that in early May 2013 he was at Mr McDonald's house carrying out a minor repair and as he was leaving there was a conversation that lasted maybe five to 10 minutes. He deposed that the conversation was as follows: "George said, 'David I want to leave my estate to Lisa.' I said, 'Is that definitely what you want George, leaving everything to Lisa?' He said, 'Yes.' I said, 'Well are you sure about it? Do you mean everything to Lisa including the house?' He said, 'Yes.' I said, 'Well, do you still want to leave anything to the Children's Hospital?' He said, 'Yes.' I said 'How much?' He said, 'Not sure.' I said, 'Well what about $20,000?' He said, 'Yes.' I said, 'Anything else?' He said, 'Yes I want to leave some money to the Church.' I knew that George worshipped at the Presbyterian Church in Greenwich Road and had a long association with the Church and I assumed that he was talking about the local Presbyterian Church in Greenwich Road. I said, 'Well, how much George? $5,000? $10,000?' He said, '$5,000.' I said, 'Are you definitely sure on this?' He said 'Yes' I said, 'Do you want me to organise it?' He said, 'Yes' I got up to leave. He stopped me and he said, 'David I want this kept quiet until after my funeral especially from Lisa.' I said, 'Why, George?' He mumbled something about 'embarrassment'. I said, 'Alright I'll arrange it.'"
Rather than arranging a new will for Mr McDonald by consulting Mr McDonald's solicitor, Mr Howard, who was a dentist with no qualifications in law, took it upon himself to prepare a new will. Mr Howard explained this as follows: "I spoke to Bob Stone who is a friend of mine and who manages my farm at Rylstone. Some time earlier Bob had given me a book which he had written which was called 'For my Family - A Legacy for Future Generations'. The book contained a chapter on Wills and contained a Will kit. I also researched Wills on the Internet. I had also administered the Will of my brother-in-law Darren Matterson. Darren had died and appointed me as his executor. His Will was written out on a piece of notepaper. I didn't consider contacting George's solicitor or any other solicitor because I was of the belief that the preparation of a Will was not a difficult task. I did not specifically ask George if he wanted me to be the executor because I had always assumed that I was executor of his existing Will."
Mr Howard typed up the will himself. He prepared two copies. The document (omitting the parties' addresses) provided as follows: "This is the last Will and Testament of myself, George A McDonald of [xxx] Greenwich in the State of NSW I revoke all Wills and other Documents of Testamentary intent previously made by me; this is my last Will and Testament. I appoint David Howard of [yyy] Greenwich to be the Executor and Trustee of my Will I give the whole of my Estate to Lisa Howard of [yyy] Greenwich NSW after my just debts, funeral and Testamentary expenses are paid. I would request that Lisa donate $5000 to the John Taylor Memorial Presbyterian Church Greenwich and $20000 to the Childrens Hospital Westmead. Dated this …………day of …………..in the year two thousand ……………… Witness signature……………………………..Name…………………………… Address……………………………………………………………………………. Witness Signature…………………………..Name……………………………… Address……………………………………………………………………………. Signed by the Testator as his Last Will and Testament in the presence of both of us present at the same time at his request and in the presence of each other have hereuntosubscribed our names as attesting witnesses. George McDonald"
This document did not conform with Mr McDonald's instructions to Mr Howard that he wanted to leave $20,000 to the Children's Hospital and $5,000 to the church. Instead, clause 3 left the whole of the net estate to Mrs Lisa Howard, coupled with a non-binding request that she make a gift of two sums to the church and the hospital. Mr Howard did not explain why he drew this part of the will in the way he did.
Robert Stone was a friend of David Howard's and managed the Howards' farm at Rylstone. David Howard arranged for the will to be signed on the morning of Friday, 7 June 2013. He told Mr McDonald that Lisa Howard would be away that morning. He had spoken to Mr Stone who had told him that he would be down in Sydney to do some business. He arranged for his son Jack and for Mr Stone to witness the will. Mr Howard did not provide a copy of the will he had prepared to Mr McDonald in advance of the time arranged for signing the will, and Mr McDonald did not ask for it.
On the morning of Friday, 7 June 2013 Mr Howard, his son Jack, and Mr Stone went to Mr McDonald's house. Mr Howard laid two copies of the will he had prepared on the kitchen table. One of the copies was in front of Mr McDonald and one was in front of Mr Howard. Mr McDonald took his reading glasses out of his top pocket and looked down at the will which was on the table. Mr McDonald was flanked by Mr Howard to his left and Mr Stone to his right and Jack Howard stood to the left of his father. They were all standing. Mr Howard read the will aloud, clearly and fairly slowly. When he had finished he turned to Mr McDonald and said, "George, are you happy with that? Is it OK?" Mr McDonald said, "Yes." Mr Stone noticed Mr McDonald's nodding an approval as the will was read. After the will was read and Mr McDonald said that he was happy with it, Mr Howard said that he should sign both copies and Mr Stone and Jack Howard would witness his signature. As Mr McDonald was about to sign the first copy he said that "I don't want Lisa to know about this, OK?" or words to that effect. Jack Howard recalled his saying "Lisa must not know anything about this until I am gone. Is that clear?" Jack Howard recalled that after the will was signed he said to Mr McDonald "This will be life-changing for Mum" to which comment Mr McDonald nodded.
Consistent evidence about these events was given by Mr Howard, Jack Howard and Robert Stone. Mr Howard was asked whether after Mr McDonald's death he discussed what had happened on the occasion of Mr McDonald's executing his will with his son Jack. He said he did not believe so. He was asked whether he had discussed it with Mr Stone and denied having done so. Mr Stone was less sure. When asked whether, after Mr McDonald's death, he had discussed with Mr Howard what happened on the occasion that Mr McDonald signed the will on 7 June, he said that he could not recall and was not sure. He said that he did not recall discussing the contents of his affidavit with Mr Howard when he was preparing the affidavit, but could have done so.
Jack Howard was also asked whether, after Mr McDonald died, he discussed what had happened on the occasion of Mr McDonald's signing the will with his father. He said that he did have such a discussion. He agreed that his memory of what occurred on the day had been refreshed by his conversations with his father. But he said what was set out in his affidavit was his own independent recollection, not what his father had told him had happened on the day. When pressed, Jack Howard back-tracked on his admission of having discussed the signing of the will with his father. When asked how many times he had discussed what had happened with his father he said "We didn't discuss what happened, as such" and that what was discussed was "The whole logistics of what was happening, not on the day". He said that his affidavit was his own account that had not been discussed with his father.
Thus whilst each witness said that he prepared his affidavit as to the events of 7 June 2013 based on his own recollection and without assistance, it is on the cards that before preparing their affidavits Mr Stone and Jack Howard had discussed the events of that day with David Howard. Careful scrutiny of these witnesses' evidence is required both because Mr McDonald is dead (Plunkett v Bull (1915) 19 CLR 544 at 548-549 per Isaacs J) and because of the suspicious circumstances (see para [45] below). Nonetheless, a finding that the three witnesses colluded to tell a false story would be serious and unwarranted. I do not reject their evidence. Importantly, I accept that Mr McDonald read the will and it was read aloud to him before he signed it.
Both copies of the will were signed by Mr McDonald and his signature was attested by Mr Stone and Jack Howard. By mistake Mr Stone inserted the date of 8 June on one copy of the will, and Jack Howard then inserted the same date on the second copy of the will. This is not material.

Later events

Mr McDonald's condition declined and he was admitted to Greenwich Hospital in mid October 2013. He was told that he was too feeble to go home. His condition worsened. On 4 November 2013 Mrs Lisa Howard telephoned Mr Russell. She did so at the suggestion of Mr McDonald's Minister who suggested that she contact Mr Russell to see if Mr McDonald had any funeral requests. Mr Russell attended on Mr McDonald at Greenwich Hospital on 6 November 2013 and took with him a number of documents which he considered Mr McDonald might need or wish to discuss these, included a partially completed appointment of enduring guardian form and a form of enduring power of attorney, together with the power of attorney by which Mr McDonald had appointed David Howard as his attorney in 1999 and a copy of the 1999 will and the 2011 codicil. Communication was difficult because even with hearing aids Mr McDonald was quite deaf and Mr Russell needed to speak very loudly to communicate with him. The wide door to his room was open and it was not possible for Mr Russell to discuss Mr McDonald's affairs privately with him. During the course of the conversation Mr McDonald did not raise any issue in relation to his will and did not say anything to him about wanting to make a new will or any change to his testamentary arrangements. Mr Russell explained the concept of an appointment of an enduring guardian. He was satisfied from his conversation that Mr McDonald had the capacity to sign an appointment of enduring guardian. Mr McDonald said that he wanted to appoint Mrs Lisa Howard as his guardian and the form was completed accordingly. Mr McDonald signed the form and Mr Russell witnessed it. That day Mr Russell wrote to Mr and Mrs Howard enclosing three copies of Mr McDonald's appointment of Mrs Howard as his enduring guardian. He also forwarded three copies of the general power of attorney given by Mr McDonald in 1999 appointing Mr Howard as his attorney.
Mr McDonald died in the early hours of 14 November 2013. Mrs Lisa Howard rang Mr Russell that morning to discuss funeral arrangements. At that time she was unaware of the will signed by Mr Howard in June. She told Mr Russell that her husband wanted to speak to him, but he indicated that as he would probably be at the house the next day, it probably would not be necessary. Later that morning Mr David Howard telephoned Mr Russell. Mr Russell's contemporaneous file note of the conversation, which I accept as accurate, was as follows: "10.45am attending David Howard who identified himself as husband of Lisa Howard, the friend of George McDonald who died this morning. David requested an appointment to meet tomorrow here at my office to discuss George's affairs - I said I had mentioned to Lisa this morning that I was proposing to call out to visit the property tomorrow in my capacity as George's executor under his will. David said 'well, what I want to come and see you about was, George made a new will six months ago appointing me his executor and leaving substantially all his estate to my wife'. I said this sounds alarming to me who has been his solicitor for the last 30 years and my father before me who acted over the preceding 30 or so years. David said 'George was a private person and he wanted this to be private and asked me to make the new will'. I asked 'did George get a solicitor instructed to do it; no said David he asked me to do it and I looked up how to do it and prepared it for him'. No further detail was offered nor did I ask where/how did he look it up. David was sounding a bit edgy, uncertain, shaky, tentative in telling me this. David said I want to discuss this with you tomorrow. I said 'no, you need to instruct a solicitor to write to me promptly, as this is a dramatic change in George McDonald's affairs'. I said 'last week your wife phoned me to let me know that George was in hospital at Greenwich Hospital, Palliative care, and he would like to see me, and I visited on Wednesday morning to see him. It was to deal with Enduring Guardianship. He made no mention of there being a new will, yet he was his usual bright, alert and witty self. David said 'he (George) wanted me not to mention this to his wife Lisa, only tell her after the funeral service has been conducted'. We concluded the conversation with again my repeating that he should speak urgently to a solicitor and I could not see him tomorrow because of this."
I do not think anything adverse to the plaintiff should be drawn from Mr Russell's conclusion that David Howard sounded "edgy, uncertain, shaky [and] tentative".

Extent of doubt as to knowledge and approval

As noted above it was common ground that there were suspicious circumstances surrounding the execution of the will and the onus is on the plaintiff to dispel the suspicion in order to demonstrate that the deceased knew and approved of the contents of the will, or to put it another way, that the will truly reflected his wishes.
It is not itself a suspicious circumstance that Mr McDonald should have decided to leave his estate to Mrs Howard. The closeness of his relations with his neighbour makes that a perfectly rational gift, particularly in the absence of any relative with a claim on his testamentary bounty. Nor is it suspicious that he should have decided to leave his estate to Mrs Howard having previously decided to leave the estate to charity. A change of mind is not itself suspicious, particularly as every passing year may have strengthened the bond of friendship, and that bond would have been further strengthened by the additional care shown by Mrs Howard in the period up to the making of the will as Mr McDonald's physical infirmity increased. I accept that Mr McDonald did tell Mr Howard that he wanted to leave his estate to Mrs Howard, that the will was put down on the table for him to read as Mr Howard read it out, and that he did signify his assent to its provisions orally and by gesture as well as by signing it.
But there are, nonetheless, grounds for suspicion that Mr McDonald might not have weighed the claims of charities on his testamentary bounty to which he had given effect in previous wills. Thus, his initial instruction to Mr Howard was that he wanted to leave all of his estate to Mrs Howard, but when asked "Well, do you still want to leave anything to the Children's Hospital?" he said "Yes", which was inconsistent with what he had just said, namely that he wanted to leave everything to her. He was then asked a leading question as to whether he wished to leave $20,000 to the Children's Hospital. There is no evidence that he weighed the fact that under his existing will he had left the Children's Hospital half of the residue of his estate. There is no evidence that he considered afresh whether World Vision Australia had any claim on his testamentary bounty or whether he considered that the Salvation Army should be given his household effects as had been a consistent provision in three previous testamentary dispositions. The possibility that Mr McDonald did not consider or weigh those claims is enhanced by the fact that he was not given a copy of the will to read and consider before he signed it. Nor was he provided with one of the two documents that was signed, or a photocopy of either of them, which is itself a suspicious circumstance.

Suspicious circumstances: relevant principles

For the will to be admitted to probate, it is not enough for the plaintiff to show that the deceased had testamentary capacity and the will was duly executed. The Court must also be satisfied that the testator "knew and approved" of the contents of the will. This time-honoured phrase means that the Court must be satisfied that the will expresses the "real" intention or the "true" will of the testator (Fulton v Andrew (1875) LR 7 HL 448 at 461; Fuller v Strum [2001] EWCA Civ 1879; [2002] 1 WLR 1097 at [59]; Gill v Woodall [2010] EWCA Civ 1430; [2011] Ch 380 at [14]; In the Estate of Osment [1914] P 129 at 132, cited with approval in Nock v Austin (1918) 25 CLR 519 at 524).
A statement often quoted is that of Baron Parke giving the advice of the Privy Council in Barry v Butlin (1838) 2 Moo PC 480 at 482-483; 12 ER 1089 at 1090: "The rules of law according to which cases of this nature are to be decided, do not admit of any dispute, so far as they are necessary to the determination of the present Appeal … These rules are two; the first that the onus probandi lies in every case upon the party propounding a Will; and he must satisfy the conscience of the Court that the instrument so propounded is the last Will of a free and capable testator. The second is, that if a party writes or prepares a Will, under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the Court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased."
In some circumstances, the need for vigilance can mean that the Court should not be satisfied with evidence that the will was explained to the testator who expressed his or her understanding of the will and agreement with it (e.g. Tyrell v Painton [1894] P 151; McKinnon v Voigt [1998] 3 VR 543 at 559 per Tadgell JA; Vernon v Watson [2002] NSWSC 600 at [3])). In Wintle v Nye [1959] 1 WLR 284 Viscount Simons said (at 291) that: "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."
The degree of suspicion in this case is not of the latter kind. There was a rational explanation for the deceased's wishing to leave his estate (subject to two small legacies) to Mrs Howard. Moreover, one of the attesting witnesses was not a family member. It is true that Mr Stone manages a farming property on behalf of Mr and Mrs Howard. His background was a sergeant of police until 1985 after which he conducted a number of small businesses. I do not consider that I should reject the evidence of Mr Howard as to the instructions he was given by the deceased, nor the evidence of Mr Howard, Jack Howard and Mr Stone as to the reading and execution of the will.
In Wintle v Nye Lord Reid, applying or adopting the language of Sir J P Wilde (later Lord Penzance) in Atter v Atkinson (1869) LR 1 P & D 665 at 668, said that the evidence must be calculated (that is, sufficient) to exclude all doubt, or perhaps all reasonable doubt, that the effect of the will was brought home to the mind of the testatrix (at 296). But the testator's knowledge and approval of the will is a fact to be determined on the balance of probabilities, not beyond all doubt or all reasonable doubt (Evidence Act 1995 (NSW) s 140; Church v Mason [2013] NSWCA 481 at [46]; Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR at [48]). Whilst the Court must be "vigilant and jealous" in examining the evidence in support of the will, proof that the document executed by the testator is his will represented his "true will" must be determined on the balance of probabilities but having regard to the nature of the subject matter of the proceeding.
In Atter v Atkinson Sir J P Wilde's directions to the jury included a statement that if the jury were satisfied that the testatrix read the contents of the document then she must be taken to have known and approved of its contents. He said (at 670) that: "If, being of sound mind and capacity she read this residuary clause, the fact that she afterwards put her signature to it is conclusive to shew that she knew and approved of its contents."
Although the House of Lords rejected the width of that proposition in Fulton v Andrew, there is nonetheless a "grave and strong presumption" of knowledge and approval where the will has been read over to a competent testator before the will is signed (Gill v Woodall at [14]-[17]). The use of the word "presumption" in this area should perhaps be avoided. There are enough presumptions as it is. The strength of the inference of knowledge and approval that arises from the reading over of the will to the testator can depend on the complexity of the will. Thus in Tobin v Ezekiel and in Church v Mason it was found that the testator knew and approved of the contents of the will, notwithstanding the existence of suspicious circumstances where the will was read over to the testator before signature. In both cases the wills were in simple terms. This can be contrasted with Fulton v Andrew where the suspicious circumstances were not dispelled. There the testator's instructions to the solicitor, at least on one reading, had been that the executors should hold the residue of the estate on trust for certain children. The residuary clause simply left the residue of the estate to the executors. The House of Lords held that the jury was perfectly entitled to be satisfied that although the will was read over, a discrepancy between the instructions and the terms of the will was not brought to the attention of the testator and hence the jury's finding that the testator did not know and approve of the terms of the residuary clause was unexceptionable.
In Fulton v Andrew Lord Hatherley said (at 472) that there was an onus cast on those who take for their own benefit, after having been instrumental in preparing or obtaining a will, of showing the "righteousness of the transaction". I suspect that Lord Hatherley meant what he said. He used the same expression Lord Eldon had used in Gibson v Jeyes (1801) 6 Ves Jun 266 at 276; 31 ER 1044 at 1049 in speaking of a transaction of sale and purchase between an attorney and his client. However, later cases have established that the supposed requirement only means that the Court must be satisfied that the deceased did know and approve of the contents of the will and that what must be dispelled is any suspicion that the willmaker did not understand what the will provided for (Nock v Austin at 524, 525, 528; Vernon v Watson at [2]-[9]; Fuller v Strum at [33], [65], [78]).
In Hoff v Atherton [2004] EWCA Civ 1554; [2005] WTLR 99 Chadwick LJ said (at [62]-[64]): "62. … the requirements of testamentary capacity and knowledge and approval are conceptually distinct. A finding of capacity to understand is, of course, a prerequisite to a finding of knowledge and approval. A testator cannot be said to know and approve the contents of his will unless he is able to, and does, understand what he is doing and its effect. It is not enough that he knows what is written in the document which he signs. But if testamentary capacity - the ability to understand what is being done and its effect - is established, then it is open to the court to infer that a testator who does know what is written in the document which he signs does, in fact, understand what he is doing. And, where there is nothing to excite suspicion, the court may infer (without more) that a testator who signs a document as his will does know its contents. It would be surprising if he did not. 63. Whether those are inferences which should be drawn depends, of course, on the facts of the particular case. The fact that a beneficiary has been concerned in the instructions for, and preparation of, the will excites suspicion that the testator may not know the contents of the document which he signs - or may not know the whole of those contents. The degree of suspicion - and the evidence needed to dispel that suspicion - were considered by this Court in Fuller v Strum [2001] EWCA Civ 1879, paragraphs [32]-[36], [73], [77], [2002] 1 WLR 1097, 1107C- 1109A, 1122A-C, 1122G-1123C. 64. Further, it 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."
Of particular significance in this case is his Lordship's suggestion at [64] that to establish knowledge and approval of the will a Court might need to be satisfied 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". Peter Gibson LJ said (at [49]) that: "… I do not doubt that in some circumstances the court will rightly insist on evidence that the testator had the earlier testamentary dispositions in mind in order to test whether he truly intended to make the new dispositions under the new Will. However, in the present case, having regard to the absence of any relations and of other claimants on Mrs. Krol's bounty other than the Claimants and Mrs. Atherton, I do not accept that that is necessary in order to establish knowledge and approval."
In Estate of Stanley William Church [2012] NSWSC 1489 I did not decide whether the observations of Chadwick LJ in Hoff v Atherton at [64] represented the law in this State. I understand his Lordship to say that where there are suspicious circumstances, and evidence of a failing mind, then to establish that the deceased not only knew of the contents of the will, but approved of the contents, evidence may be required that the deceased was not only capable of weighing the claims to which he or she might be expected to give effect, but did so.
I did not need to decide this question in Estate of Stanley William Church because the evidence in that case was that the deceased had in fact weighed the only claims on his estate, which were those of his half-brother and half-sister. The Court of Appeal dismissed the appeal ([2013] NSWCA 481). In doing so, Meagher JA, with whose reasons Barrett and Emmett JJA agreed, noted that events of the day before the will was signed "… showed Stanley to have been conscious of his brother's existence and claim upon his bounty at the time he made the will."
His Honour continued: "Those facts, taken with the events of the following day when he signed the will which had been read aloud, were sufficient to establish affirmatively that he knew and approved of its contents." (at [38])
Thus, the Court of Appeal also did not need to decide, and did not decide, whether it was necessary in order to show that the testator knew and approved of the contents of the will that he had in fact weighed his brother's claim on his testamentary bounty. Because the evidence indicated that he had done so, the issue did not need to be decided.
No case was cited and my researches have not found a case in which it has been held that a will was not validly made because although a capable testator knew the contents of the will and understood the nature and extent of the gifts in the will, it was not established that he had given due consideration to other claims on his testamentary bounty or his previous testamentary dispositions.
In Atter v Atkinson Sir J P Wilde's directions to the jury included a direction that: "If testatrix knew and understood that the will gave all the rest of her property beyond the legacies to Mr Atter, it is not necessary she should have understood or appreciated how large a sum the rest or residue would amount to." (at 671)
There was no adverse comment on this particular direction in Fulton v Andrew. However, in Wintle v Nye Lord Reid said (at 296) that: "… it was at least possible to doubt whether the testatrix had any real understanding of the magnitude of her estate in spite of the fact that figures had been shown to her, and whether she was not thinking of putting the respondent in a position to look after her sister Millie - in effect making him a trustee - rather than of conferring a large personal benefit on him."
This does not mean that his Lordship considered the will was invalid merely because the testatrix lacked any real understanding of the magnitude of her estate. It might be thought that if she did not understand the nature and extent of her estate despite being shown it, the will would have failed for lack of testamentary capacity. But that was not an issue. Her lack of understanding of the magnitude of her estate meant that she did not appreciate how much would pass under the residuary gift to her solicitor/executor. This, coupled with the doubt that the testator understood that the executor would receive the residuary estate not as trustee, but beneficially, meant that the Court could not be satisfied that she understood the effect of the will she signed.
Proof of testamentary capacity requires proof that the testator was capable of evaluating the claims on his testamentary bounty, but it is not a general requirement of a valid will that the testator actually made such an evaluation (King v Hudson [2009] NSWSC 1013 at [51]; Dickman v Holley [2013] NSWSC 18 at [159]). It is sometimes said that to have testamentary capacity the testator or testatrix must, amongst other things, be aware of those who might reasonably be thought to have claims on his or her bounty and the basis for and nature of those claims, as well as having the ability to evaluate and discriminate between the respective strengths of the claims (Read v Carmody (New South Wales Court of Appeal, 23 July 1998, unreported, BC9803374 at 2-3); Norris v Tuppen [1999] VSC 228 at [330]; Veall v Veall [2015] VSCA 60 at [203]). But in determining testamentary capacity the critical question is not whether the will-maker did in fact bring to mind those who might reasonably be thought to have claims upon his or her bounty, but whether he or she had the ability to do so. The classic passage in the judgment of Cockburn CJ in Banks v Goodfellow (1870) 5 LR QB 549 at 565 is that: "It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties - that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made."
It is the ability to comprehend and appreciate claims to which effect ought to be given that is critical in determining capacity, not its exercise. In Harwood v Baker (1840) 3 Moo PC 282; 13 ER 117 Erskine J, when delivering the advice of the Judicial Committee said (at 290-291, 120): "But their Lordships are of opinion, that in order to constitute a sound disposing mind, a Testator must not only be able to understand that he is by his Will giving the whole of his property to one object of his regard; but that he must also have capacity to comprehend the extent of his property, and the nature of the claims of others, whom, by his Will, he is excluding from all participation in that property; and that the protection of the law is in no cases more needed, than it is in those where the mind has been too much enfeebled to comprehend more objects than one, and most especially when that one object may be so forced upon the attention of the invalid, as to shut out all others that might require consideration; and therefore, the question which their Lordships propose to decide in this case, is not whether Mr Baker knew when he was giving all his property to his wife, and excluding all his other relations from any share in it, but whether he was at that time capable of recollecting who those relations were, of understanding their respective claims upon his regard and bounty, and of deliberately forming an intelligent purpose of excluding them from any share of his property. If he had not the capacity required, the propriety of the disposition made by the Will is a matter of no importance. If he had it, the injustice of the exclusion would not affect the validity of the disposition, though the justice or injustice might cast some light upon the question as to his capacity."
In Simon v Byford [2014] EWCA Civ 280; [2014] WTLR 1097 Lewison LJ, with whom McFarlane and Sullivan LJJ agreed, made the same point, that is, that capacity depends on the potential to understand and is not to be equated with a test of memory (at [40]-[41]).
Because a capable testator can make a valid will notwithstanding that he does not evaluate the strength of the claims on his testamentary bounty, it does not appear to me that in all cases where there are suspicious circumstances that require the Court to be satisfied that the testator did know and approve the contents of the will, that requires proof not only that the testator knew that he was leaving his estate in the way for which the will provided, but that he had weighed all the claims on his testamentary bounty. Nor did Chadwick LJ so decide in Hoff v Atherton.
In the present case, I am satisfied that Mr McDonald understood that subject to gifts to be made to the two charities, all of his estate would be given to Mrs Howard. I am not satisfied that in deciding that he should leave the bulk of his estate to Mrs Howard he considered his prior wills, or that he weighed the claims of the Children's Hospital and World Vision, for which he had previously made generous provision, or the Salvation Army to whom he had previously given his household effects. But I do not think it necessary that he should have done so in order to have made a valid will.
In Simon v Byford Lewison LJ said (at [47]): "When we move on to knowledge and approval what we are looking for is actual knowledge and approval of the contents of the will. But it is important to bear in mind that it is knowledge and approval of the actual will that count: not knowledge and approval of other potential dispositions. Testamentary capacity includes the ability to make choices, whereas knowledge and approval requires no more than the ability to understand and approve choices that have already been made. That is why knowledge and approval can be found even in a case in which the testator lacks testamentary capacity at the date when the will is executed."
Chadwick LJ's observations in Hoff v Atherton at [64] were prefaced upon there being evidence of a failing mind. Where testamentary capacity is in issue, the Court has to decide one way or the other whether the testator has or lacks capacity. Nonetheless, it is no doubt correct that there are degrees of capacity and notwithstanding that it is found that a testator has testamentary capacity, the degree of capacity can be relevant to deciding whether or not the testator knows and approves of the contents of the will so that the Court can be satisfied that the Will represents the testator's true will. This is consistent with the approach taken in earlier decisions of the Prerogative Court (Billinghurst v Vickers (1810) 1 Phill Ecc 187 at 193-194; 161 ER 956 at 958-959; Ingram v Wyatt (1828) 1 Hagg Ecc 384 at 400-404, 412, 414-415, 428-429; 162 ER 621 at 626-627, 630, 631 and 635).
I accept that if it is shown that a testator of doubtful capacity has indeed weighed the claims on his testamentary bounty that could tend to show that the will represented his intentions, and the converse may also be true.
There was no evidence in this case that Mr McDonald had a failing mind as distinct from a failing body.
The strength of the inference that a testator knows and approves of the contents of the will where it has been read by or read over to him depends upon the complexity of the will. In the present case, it must have been clear to Mr McDonald that the will left his estate to Mrs Howard, subject to the provision made for the Greenwich Presbyterian Church and the Westmead Children's Hospital.

Rectification

It might not have been apparent to Mr McDonald that the request stated in clause 3 of the will to Mrs Howard to make donations to those charities might not be binding on her. There was no evidence one way or the other as to whether Mrs Howard intended to honour Mr McDonald's request. It would be surprising if she did not. But this is a case in which the will as drawn did not give effect to Mr McDonald's instructions to Mr Howard that $5,000 should be left to his local church and $20,000 to the Children's Hospital.
The plaintiff amended his statement of claim to seek a grant of probate of the will as rectified by deleting the words "would request that Lisa donate" and substituting in lieu thereof the words "give legacies of". Section 27(1) of the Succession Act 2006 (NSW) provides: "27 Court may rectify a will (cf WPA 29A) (1) The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied the will does not carry out the testator's intentions because: (a) a clerical error was made, or (b) the will does not give effect to the testator's instructions."
I am satisfied that the will does not give effect to Mr McDonald's instructions.
For these reasons there will be a grant of probate in solemn form of the will dated 8 June 2013 and an order pursuant to s 27(1) of the Succession Act that that will be rectified in the way indicated above.
An extension of time is necessary for the rectification application. It is appropriate to grant that extension.

Costs

Mr McDonald's decision to ask Mr Howard, the husband of the intended principal beneficiary, to prepare a will rather than consulting his solicitor, created the suspicious circumstances that gave rise to this litigation. That is to say, the litigation is the fault of the testator, and, I might add, of Mr Howard. No costs order is sought against Mr Howard, and consistent with principle, the costs of the first and second defendants should be paid out of the estate, even though they were unsuccessful (Re Estate of Hodges (dec'd); Shorter v Hodges (1988) 14 NSWLR 698 at 709; Gray v Hart; Estate of Harris (No 2) [2012] NSWSC 1562; (2012) 10 ASTLR 379 at [19]).

Conclusion

For these reasons I make the following orders:
Order that subject to due compliance with the Rules of Court, probate of the will dated 8 June 2013 of George Aeneas McDonald late of Greenwich, in the State of New South Wales, as rectified in accordance with order 2 below, be granted to the plaintiff in solemn form.
Order pursuant to s 27(1) of the Succession Act 2006 (NSW) that the said will be rectified by deleting the words "would request that Lisa donate" appearing in the second and third lines of clause 3, and substituting in lieu thereof the words "give legacies of".
Order that the time for making the application to rectify the will be extended pursuant to s 27(3) of the Act.
Order that the matter be remitted to the Registrar to complete the grant.
Order that the plaintiff's costs on the indemnity basis and the defendants' costs on the ordinary basis be paid out of the estate. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 October 2015

(Evidence Act 1995(NSW)s 140

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