JW v John Siganto as Litigation Guardian for AW and CW [2015] QSC 300

SUCCESSION - MAKING OF A WILL - TESTAMENTARY CAPACITY - LOSS OR LACK OF CAPACITY AND STATUTORY WILLS - where application made under s 21 and 22 of the Succession Act 1981 (Qld) for a court authorised will - where the applicant seeks a statutory will to be made on behalf of the proposed testator, his son - where the proposed testator suffered serious injuries as a result of a near fatal accident in 2005 - where a claim was bought for damages on the proposed testator's behalf and sanctioned by the court - where the applicant and his wife have been the sole carers of the proposed testator since the accident - where the value of the property beneficially owned by the proposed testator has grown significantly since the accident - where the proposed testator has two young children - whether the applicant is the appropriate person - whether the proposed testator lacks testamentary capacity - whether the proposed statutory will is or may be a will that the proposed testator would make if he were to have testamentary capacity

Acts Interpretation Act 1954 (Qld), s 32DA

Succession Act 1981 (Qld), s 5AA, s 21, s 22, s 23, s 24, s 35, s 41, Sch 2

Dovedeen Pty Ltd & Anor v GK [2013] QCA 116

Lawrie v Hwang [2013] QSC 289

McKay v McKay [2011] QSC 230

Re JT [2014] QSC 163

Re Keane [2011] QSC 49

Re Matsis; Charalambous v Charalambous [2012] QSC 349 Sadler v Eggmolesse [2013] QSC 40

SPM v LWA [2013] QSC 138

Van der Meulen v Van der Meulen & Anor [2014] QSC 33

[1] MCMEEKIN J: The applicant applies for leave under s 22 of the Succession Act 1981 (Qld) (the Act) to bring a further application under s 21 of the Act for an order authorising a Will to be made on behalf of his son, RJW. In order to distinguish between the various members of the W family I shall use their Christian names.

[2] RW has no testamentary capacity, no current Will and no real or even remote prospect of regaining capacity.

[3] The power of the court to make a statutory will is derived from Section 21 of the Act which provides:

"21 Court may authorise a will to be made, altered or revoked for person without testamentary capacity

(1) The court may, on application, make an order authorising -

(a) a will to be made ... in the terms stated by the court, on behalf of a person without testamentary capacity; or

(a) the person in relation to whom the order is sought lacks testamentary capacity; and

(b) the person is alive when the order is made; and

(c) the court has approved the proposed will, alteration or revocation.

(3) For the order, the court may make or give any necessary related orders or directions.

(4) The court may make the order on the conditions the court considers appropriate.

(5) The court may order that costs in relation to either or both of the following be paid out of the person's assets -

(a) an application for an order under this section;

(b) an application for leave under section 22.

(6) To remove any doubt, it is declared that an order under this section does not make, alter or revoke a will or dispose of any property.

person without testamentary capacity includes a minor.

[4] This power can only be exercised if leave is granted under s 22 of the Act which provides:

"22 Leave to apply for s 21 order

(1) A person may apply for an order under section 21 only with the court's leave.

(2) The court may give leave on the conditions the court considers appropriate.

(3) The court may hear an application for an order under section 21 with or immediately after the application for leave to make the application."

[5] Section 23 details the information that must be provided to the court upon hearing an application for leave under s 22 unless otherwise provided:

"23 Information required by court in support of application for leave

a) a written statement of the general nature of the application to be made by the applicant under section 21 and the reasons for making it;

(b) satisfactory evidence of the lack of testamentary capacity of the person in relation to whom an order under section 21 is sought;

(c) any evidence available to the applicant, or that can be discovered with reasonable diligence, of the likelihood of the person acquiring or regaining testamentary capacity;

(d) a reasonable estimate, formed from the evidence available to the applicant, of the size and character of the person's estate;

(e) a draft of the proposed will, alteration or revocation in relation to which the order is sought;

(f) any evidence available to the applicant of the person's wishes;

(g) any evidence available to the applicant of the terms of any will previously made by the person;

(h) any evidence available to the applicant of the likelihood of an application being made under section 41 in relation to the person;

(i) any evidence available to the applicant of a gift for a charitable or other purpose that the person might reasonably be expected to give by will;

(j) any evidence available to the applicant, or that can be discovered with reasonable diligence, of the circumstances of a person for whom provision might reasonably be expected to be made by a will by the person in relation to whom the order is sought;

(k) any evidence available to the applicant, or that can be discovered with reasonable diligence, of any persons who might be entitled to claim on intestacy;

(l) any other facts of which the applicant is aware that are relevant to the application."

[6] Section 24 particularises the matters of which the court must be satisfied of before granting leave under s 22 as follows:

"24 Information required by court in support of application for leave

(a) the applicant for leave is an appropriate person to make the application;

(b) adequate steps have been taken to allow representation of all persons with a proper interest in the application, including persons who have reason to expect a gift or benefit from the estate of the person in relation to whom an order under section 21 is sought;

(c) there are reasonable grounds for believing that the person does not have testamentary capacity;

(d) the proposed will ... is or may be a will ... that the person would make if the person were to have testamentary capacity;

(e) it is or may be appropriate for an order to be made under section 21 in relation to the person."

[7] RW was born on 1 March 1985 to the applicant, JW, and his wife KW. RW has one sister, TW who is three years his senior. RW has two children. His son, AW, is 13 years old, born 27 August 2002. His daughter, CW, is 10 years old, born 4 May 2005.

[8] RW is now 30 years old. On 6 December 2005, at the age of 20, he was involved in a near fatal accident. RW sustained major injuries which left him with severe permanent physical, intellectual, cognitive, behavioural and communication deficiencies. As a result, RW requires around-the-clock assistance.

[9] A claim was brought for damages on RW's behalf in respect of those injuries and settled with the sanction of the Court. KW and the Perpetual Trustee Company Limited (Perpetual) were appointed as joint administrators of the settlement sum of $5,200,000. The award reflected a total loss of any earning capacity and the need for constant and around-the-clock supervision and care for RW.

[10] That around-the-clock supervision and care has been provided by the applicant and KW. They have had minimal assistance from a paid carer, Michael Miller. This has come at a cost to them. The applicant gave up his employment at Queensland Rail on 22 September 2009 having worked there for 32 years. KW ceased working too following the accident. The applicant attests that the care of RW is now the centre of his and KW's lives.

[11] Because of their personal devotion to RW's care the significant costs that the award allowed for in the way of the provision of daily care have not been incurred. This has had the result that, with investments, the value of the property beneficially owned by RW has grown and is now over $9,000,000.00.

[12] Prior to the accident, from his age of 17, RW was involved in a de facto relationship with one TP. She is the mother of RW's two children. They did not marry. The applicant attests that this relationship broke down permanently shortly after the accident. TP is now involved, and has been involved for some years, in another relationship and has two further children. While TP initially had the care of AW and CW, in July 2009 they were removed from her care. TP was not considered a fit mother by the relevant authorities. The children were eventually placed into the care of the applicant and KW in August 2009 and have remained in their sole care since. On 23 November 2011 a long term child protection order was put in place formalising this arrangement. The applicant attests that TP now has very little to do with AW and CW. The last contact she made was a short phone call to CW on 4 May 2015 for her birthday.

[13] If RW were to die before any order is made under this application he would die intestate having not made a will prior to the accident. The intestacy rules (see s 35 and Sch 2 of the Act) would mean that his estate would devolve to AW and CW in equal shares. As the sole beneficial recipients of his substantial estate they would succeed fully and without restriction when each reached the age of 18 years.

[14] Aside from being concerned about his own capacity to support the family financially should RW die intestate, the applicant fears that AW and CW will not have reached sufficient maturity to handle the financial benefit and burden of what presently might be a considerable sum of money at eighteen years of age.

[15] The applicant has submitted a draft of the proposed statutory Will. The proposed will provides for:

(b) the appointment of Perpetual as executor and trustee with David French of Capricorn Investment Partners and then Matthew Hayes of Shanahan Swaffield Partners as sequential executors in default.

(c) a gift of RW's household contents to the applicant and KW;

(d) a gift of 20% of RW's residuary estate equally to the applicant and KW;

(e) a gift of 5% to TW and in case of her predeceasing RW, to her son; and

(f) a gift of 37.5% of RW's residuary estate each to AW and CW to be held on trust for the children until they reach the age of 25.

Is the applicant the Appropriate Person? - Section 24(a)

[16] I turn first to the matters of which I must be satisfied before granting leave under s 24 of the Act.

[17] Consideration of s 24(a) is important in this case as the applicant will benefit significantly if the proposed will is made. Obviously some caution is justified in these circumstances but that is not a disqualifying factor. As Ann Lyons J has observed that feature will often be present in these cases: Lawrie v Hwang [2013] QSC 289 at [24]; and see McKay v McKay [2011] QSC 230 where the applicant/husband was considered to be the appropriate person to bring the application even though he was to take the whole of the estate in circumstances very similar to those here.

[18] The matters that show that the applicant is an appropriate person to make the application are these:

(a) the applicant is in the best position to put the relevant information before the court;

(b) since the accident the applicant has dedicated his life to caring for RW and his children and at a considerable sacrifice;

(c) because of his and KW's efforts there exists a substantial estate - without their efforts the estate almost certainly would have been significantly depleted;

(d) the court can have considerable confidence that the applicant will use his best endeavours to provide security and care to RW and to his grandchildren;

(e) that the applicant takes under the proposed will seems entirely justified.

Are all persons who may have an interest represented? - Section 24(b)

[19] I must be satisfied that adequate steps have been taken to allow representation of all persons with a proper interest in the application including those who have reason to expect a gift or benefit from the estate (see s 24(b) of the Act). An associated issue is the likelihood of an application being made under section 41of the Act (see s 23(h) of the Act). The issue here concerns principally the position of TP. She has not been served. The children's interests are protected by the involvement of Mr Siganto, an independent solicitor, as litigation guardian.

[20] Section 41 of the Act gives the Court power to make adequate provision for the proper maintenance and support of the deceased person's spouse, child or dependent if a person dies testate or intestate, if such a provision is not made. Determining whether TP is a "proper person" for the purposes of s 24(b) is at least in part informed by examining whether she would qualify for the purposes of a s 41 application. She does not appear to be, in any sense, a dependent. Nor is she a "spouse". To qualify as a "spouse" TP must satisfy the requirements of s 5AA of the Act and she cannot - she and RW have not lived together as a couple on a genuine domestic basis for a continuous period of at least 2 years, assuming RW died today: see s 5AA(2)(b)(ii).

[21] There is no doubt that TP was RW's de facto partner as defined - see s 32DA of the Acts Interpretation Act 1954 (Qld) - for a number of years and in turn his "spouse" (for the purposes of the Act) before their relationship ended sometime between the date of the accident and when her new relationship commenced some four months later. That was the situation in 2005. Had the relationship been maintained TP would have become entitled on RW's death under the intestacy rules to a significant portion of RW's estate - $150,000, the household chattels and one-third of the residuary: s 35(1) and Sch 2 of the Act. But that situation is now long gone and I can see no reason to think it will be revived.

[22] TP appears entirely disconnected from RW's family including from her children with whom she has had next to no contact since she they were removed from her custody on 13 July 2009.

[23] The 10 year hiatus in TP's relationship with RW, her evident unconcern about his care or welfare, and her minimal involvement with their children justify the decision not to serve her. There are no grounds for concluding that TP is a person with a proper interest in the estate nor could she have any reason to expect a gift or benefit from RW's estate following his death.

[24] The applicant and RW's respite carer attest that there has been some improvement in RW's condition over the past eight years. While upon leaving hospital some twelve months after the accident RW was completely unresponsive to communication from others. In the last 4 to 5 years he has begun to respond to interaction from others, making noises to communicate. He has regained a sense of humour smiling and laughing appropriately with the family and towards television programs.

[25] That said, it is clear from the sworn evidence, including the updated report of Dr Forker dated 16 February 2015, that RW will never regain capacity for the purposes of independently creating a Will. There seems no room for doubt on that question in this case.

Approval and "that the person would make" - Section 24(d)

[26] I must be satisfied that "the proposed will ... is or may be a will ... that the person would make if the person were to have testamentary capacity".

[27] A number of cases have examined the appropriate approach to applying the generally expressed discretionary power in s 21 of the Act and provisions conferring similar powers in other States: Re Keane [2011] QSC 49 per Daubney J; McKay v McKay [2011] QSC 230 at [79] per Ann Lyons J; Re Matsis; Charalambous v Charalambous [2012] QSC 349 per Ann Lyons J; Lawrie v Hwang [2013] QSC 289 per Ann Lyons J; Re JT [2014] QSC 163 per Ann Lyons J; Sadler v Eggmolesse [2013] QSC 40 per Atkinson J; Van der Meulen v Van der Meulen & Anor [2014] QSC 33 per Jackson J. There is little point to examining the differing factual situations and the resulting exercise of the discretion. As Jackson J observed in Van der Muelen:

"In my view, there is no definitive principle to be applied here. In the application of a general discretion of this kind, against the background of the statutory qualifying factors, it is of no assistance to articulate factors which influence or decide this particular case as though they have a legal significance beyond the exercise of the discretion in the particular circumstance."[1]

[28] The beneficiaries under the Will suggest themselves. The Will makes provision for RW's mother and father who have provided full time care for him and his children; by its terms it makes some provision for TW with whom RW had a close relationship before the accident, who has continued as a loving presence in RW's post-accident life, and who provides some care for the children and support for his parents. Principally of course the Will makes substantial provision for the children by way of separate testamentary trusts which can be used to benefit each of them and their children. The size of the estate presently is such that the children will be well off despite the gifts to other family members.

[29] In determining the terms of the Will that is proposed the applicant obtained advice from a solicitor who has practiced exclusively in the area of wills and estate for over 14 years, a Mr Frederic Smith. Mr Smith advised on the testamentary trusts that appear in the Will. There are two advantages in the trusts. The first is that the trusts allow children to gain certain taxation advantages. The second is that the trusts ensure that the children will have guidance on how to manage such a large sum of money, as presently seems might come to them, from the co-trustee, Perpetual, in this case in the period from the age of 18 to 25 years, if they were to inherit before reaching the age of 25.[2] Mr Smith explained that the terms that he had drafted were commonly used in situations of this type.

[30] From RW's perspective there is good sense in these provisions.

[31] He rewards his parents who have given up so much to care for him and who have taken on the responsibility of caring for his children. They will continue to care for them. If RW dies while the children continue in their minority it is his parents who will no doubt provide a home for them.

[32] The Will makes a modest provision for RW's sister. She has provided ongoing support for his parents and his children.

[33] Given the children's young ages, the prospect that RW could die well before they have the maturity to properly manage significant sums of money, the taxation advantages, and the availability of experienced and independent managers during that period, the imposition of the trusts proposed is a sensible decision.

[34] Finally, given the evidence about the troubled nature of their relationship prior to the accident, her subsequent abandonment of the relationship, and more recently the virtual abandonment of her children, I am confident that RW would not have wanted any provision to be made for TP in his will.

[35] Section 23 details the information which is required by the Court in support of the application for leave. Each matter mentioned, so far as relevant here, has been addressed in the material filed in support of the application.

[36] I note particularly that the applicant attests that he and his wife diligently searched RW's personal effects, both at the house he and TP were sharing prior to the accident and their own house for any document that appeared to contain RW's testamentary intentions, to no avail. Given RW's youth, good health and modest financial status at the time of the accident I am satisfied that no such document exists. These factors also speak to the lack of evidence of any charitable or other gift that could reasonably have been in RW's contemplation.

[37] There is evidence before me which confirms that Perpetual, the present co-administrator of the settlement sum and proposed executor and trustee of the estate, are aware of the application.

[38] Subsequent to the hearing counsel for the applicant, Mr Arnold, raised the issue of non-publication.

[39] The matter before the Court involves the financial affairs of a family of a severely disabled person. Such affairs are not normally revealed to public gaze. As well the testamentary arrangements here concern the affairs, inter alia, of children with some years left of their minority. Extensive personal information about the testator including medical and financial records have been disclosed. If the testator's identity was published, it would markedly increase the potential for someone to take advantage of this information and his vulnerability. The importance of maintaining the privacy of young children due to their obvious vulnerabilities is well recognised. In this case RW's children are set to potentially inherit significant sums of money and as such they require protection.

[40] RW is within the parens patriae jurisdiction of this Court. The children too.

[41] While the principles of open justice are important[3] they must give way at times to other considerations. In the circumstances that pertain here it is well recognised that there is an exception to the usual rule: SPM v LWA [2013] QSC 138 per Henry J; Re: JT [2014] QSC 163, [41] per Ann Lyons J.

[42] But for his disability RW's privacy and that of his family would have been respected. No different rule should now be invoked. That can be achieved by anonymising these reasons and sealing up the affidavits.

[43] The application was, with respect, well prepared. I am satisfied that I have all the information before me as required under s 23 and that the requirements of s 24 have been proved. It is therefore appropriate to grant leave to make the application for a s 21 order and, having done so, to make the order.

[44] The order will be in terms of the draft provided, initialled by me and placed with the papers.

(a) that the affidavits filed in these proceedings be placed in a sealed envelope marked not to be opened save by order of a Court or a judge;

(b) that in any publication of these reasons the names of the various persons mentioned be not identifiable.

[3] See Dovedeen Pty Ltd & Anor v GK [2013] QCA 116 at [34] - [37] per Fraser JA.