Inheritance (Family and Dependants Provision) Act 1972

1 COMMISSIONER JOHNSON QC: The plaintiffs are the executors named in the will of Edmund Francis Fletcher ("the deceased"). The will was executed on 30 May 1997 ("the will"). A codicil, which is undated, was executed by the deceased on or about 13 February 1998 ("the codicil"). The plaintiffs seek an order that the Court pronounce for the force and validity of the will and codicil in solemn form of law

2 The first, second and fourth named defendants are a son and two of the daughters of the deceased. Each of them is a beneficiary under the will and is entitled to share in the distribution of the deceased's estate in the event of him having died intestate. The third named defendant is the daughter of Anne Fletcher, a daughter of the deceased, and is entitled to a share in the distribution of the estate in the event of the deceased having died intestate.

3 The deceased was a psychiatrist, survived by four adult children, namely Edmund, Lyn, John and Andrea. He died on 29 June 1999. An uncontested application for probate of the will and codicil was made by the executors but refused by a Registrar on 11 August 2000. The deceased's death certificate gives as the cause of death "Pneumonia (5 days), Dementia (years)". That led the Registrar to requisition, inter alia, evidence of testamentary capacity. The evidence provided in response, which consisted substantially of medical opinion, was considered by the Registrar to inadequately address the elements of the legal test of testamentary capacity. The reports identified the deceased as suffering from Lewy body dementia which, unlike progressive Alzheimer's dementia, is said to be episodic in the sense that it is fluctuating in its severity. In view of that diagnosis and because of the size of the estate, the uneven distribution of the estate among the deceased's children, and the absence of any input from any interested party, the Registrar declined to make an uncontested grant of probate.

4 These proceedings were then commenced. Prior to the hearing the defendants were provided with copies of the additional evidence to be adduced by the plaintiffs. At the commencement of the hearing the defendants sought, and were granted, leave to withdraw. Notwithstanding the absence of any contradictor, in view of the earlier decision of the Registrar counsel for the plaintiffs took care to ensure that all relevant evidence was put before the Court in order to discharge the burden of establishing testamentary capacity.

5 Before dealing with the evidence, I will briefly state the relevant legal principles.

6 The standard of proof required of the proponent of a will is the ordinary civil standard of proof: see Bailey v Bailey [1924] HCA 21; (1924) 34 CLR 558 per Isaacs JA at 570 - 571. A residual doubt is not enough to defeat the plaintiff's claim for probate unless it is thought by the Court to be substantial enough to preclude a belief that the document propounded is the will of a testator who possessed sound mind, memory and understanding at the time of its execution: see Worth v Clasohm & Anor [1952] HCA 67; (1953) 86 CLR 439 at 453.

7 A duly executed will, rational on its face, is presumed in the absence of evidence to the contrary to be that of a person of competent understanding: see In the Estate of Griffith, unreported; CA 40495/94 (NSW); 7 June 1995 per Gleeson CJ, Kirby P and Handley JA at 5. In this case, there is evidence that the deceased was suffering from dementia, a medical condition affecting mental capacity. However, to displace a prima facie case of capacity and due execution, mere proof of serious illness is not sufficient. There must be clear evidence that the illness of the testator so affected his mental faculties as to make them unequal to the task of disposing of his property: see Bailey v Bailey, above, at 571 - 572.

8 The classic statement of testamentary capacity can be found in Banks v Goodfellow (1870) LR 5 QB 549 where Cockburn CJ said at 565:

"It is essential to the exercise of such a power [disposition by the execution of a will] 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 delusions 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."

9 See also Maurier v Weschler [2001] NSWSC 4 at 39.

10 To comply with the requirement that the testator understands the extent of the property of which he is disposing, it is not necessary to establish that the testator recollected each and every item of property he or she possessed: Shaw v Crichton, unreported; SCt of NSW (Bryson J); SC113127/92; 22 July 1994.

11 In the absence of an appreciable delay between the giving of instructions and the execution of the will, the principal inquiry as to testamentary capacity will be directed to the time when the instructions were given: Perera v Perera [1901] AC 354. The courts' approach to the question was set out in Parker v Felgate (1883) 8 PD 171 at 173 in the following terms:

"If a person has given instructions to a solicitor to make a will and the solicitor prepares it in accordance with those instructions, all that is necessary to make a good will, if executed by the testator, is that he should be able to think thus far, 'I gave my solicitor instructions to prepare a will making a certain disposition of my property. I have no doubt that he has given effect to my intention, and I accept the document which is put before me as carrying it out.'"

12 As Knox CJ and Starke J observed in Bailey v Bailey at 567, all that is required at the time of the signing of the will is that the testator's mind and memory is sufficiently sound to enable him to know and to understand the business in which he was engaged at the time he executed his will.

13 I turn now to consider the evidence put before the Court to establish the validity of the will and the codicil.

14 Both the will and the codicil were prepared by John Saleeba, a partner in the legal firm, Clayton Utz, who has practised as a solicitor since 1977. He stated that the deceased made an appointment to see him in early 1997 to prepare a new will. A consultation took place in the week leading up to 30 April 1997. The deceased provided Mr Saleeba with a copy of his will dated 11 April 1996 on which he had written some handwritten amendments. Mr Saleeba said that he queried the deceased about his assets and was told that he held assets in his own capacity and that he had some assets that were in his family trust. Mr Saleeba explained to the deceased that the trust 'had a life of its own', information which Mr Saleeba considered the deceased clearly comprehended.

15 There was a degree of uncertainty on the deceased's part as to which assets were owned in his own name and which assets were held by the family trust. Mr Saleeba considered that it was not unusual in his experience for people to have asset structures which they do not entirely understand. The deceased did make clear to Mr Saleeba that he had substantial assets and authorised him to speak with his accountant, Graham Saggers, to obtain details as to which legal entity owned which assets and also as to their value. It is important to note that the authorities do not require a testator to be aware of every item of property forming the estate. Nor is it the case that an inability to differentiate between personal and trust property is determinative, or even indicative, of lack of capacity. It is, as Mr Saleeba observes, not uncommon for people to have difficulty identifying, without recourse to records, property which is held personally and that which is owned by the family trust.

16 Mr Saleeba stated that the deceased told him that he was divorced and had four children. He provided Mr Saleeba with reasons for not providing equally for his children under his will. Those reasons were incorporated into the will. Mr Saleeba said that he explained to the deceased the consequences of the Inheritance (Family and Dependants Provision) Act 1972. The deceased appeared to understand the consequences and he expressed a belief that his will probably would be disputed. Mr Saleeba states:

"I had no reason to doubt that Dr Fletcher was competent to give proper instructions to make a Will. He appeared to be aware of the people to be considered as possible beneficiaries and he appeared to be aware that his estate would consist of substantial assets."

17 A draft will was prepared by Mr Saleeba together with a Deed of Appointment for the family trust. The draft will was sent to the accountant, Mr Saggers. It is significant to note Mr Saleeba's evidence that the deceased rang him to discuss the draft on several occasions before a final draft was couriered to Mr Saggers. Mr Saleeba was not present when the will was executed, but the duly signed Deed of Appointment was returned to him for stamping and was dated 30 May 1997.

18 The will appointed Andrew Martin and Ronald William Cannon as executors and the deceased's son, John Fletcher, as an alternate executor. A specific bequest was made to the deceased's son, Edmund, in the following terms:

"(a) to my son Edmund who I have only seen briefly on two occasions in the last 20 years and who has over that time shown no interest in me and neither has he shown any expectation for me to have an interest in him the sum of Five Thousand Dollars ($5,000)."

19 A specific bequest was also made to the deceased's daughter, Lynette, in the following terms:

"(b) to my daughter Lynette Fletcher-Jones with whom I have had very few contacts over the last 20 years and whose one child, a son, I have seen once on his 21st birthday and not since, the sum of Five Thousand Dollars ($5,000)."

20 Neither Edmund nor Lynette is further provided for under the will. It is unnecessary to refer in detail to the balance of the will other than to observe that the deceased's son, John, and his daughter, Andrea, are the principal beneficiaries of the estate. The only other provision which is relevant for present purposes is the specific bequest of $30,000 to be divided between whichever of the executors prove the will.

21 Mr Saleeba stated that he next spoke to the deceased on 8 February 1998 when the deceased and Mr Saggers came to see him. The deceased gave instructions for his son, John, and for Mr Saggers to be appointed as additional executors. The expressed reason for their inclusion was the deceased's concern as to the age of Mr Cannon and Mr Martin. Mr Saleeba stated that he discussed this alteration with the deceased who expressed himself to be quite clear that Mr Saggers and John Fletcher were to be entitled to share in the $30,000 with the other executors. The deceased considered this money to be a payment to them for acting as executors. The codicil was subsequently prepared and posted to Mr Saggers for execution by the deceased. Mr Saleeba was also instructed to prepare an Enduring Power of Attorney. He explained to the deceased how a power of attorney worked and the deceased identified Mr Saggers and his son, John, as his attorneys. The power of attorney was prepared at the time and the deceased took three copies of it away with him.

22 During this consultation there was further discussion between Mr Saleeba and the deceased regarding a loan and its effect on the estate. According to Mr Saleeba, the deceased appeared to exhibit an understanding of his trust, family company and bank accounts, but again did not appear to have a detailed knowledge of which entity owned which assets. In relation to the deceased's capacity at that time, Mr Saleeba states:

"Dr Fletcher was in good spirits at that meeting and we had a personal and an entirely lucid discussion. Although Dr Fletcher was possibly a little bit more frail physically than when I saw him the previous year, there was no noticeable change in his mental ability during that time. I had no reason to doubt that Dr Fletcher was competent to give proper instructions and understood what he was doing."

23 Mr Saleeba again saw the deceased in September 1998. The deceased told him that his son was worried that he could not look after his own affairs. He wanted to alter his will by changing the weighting of the residuary estate between his son, John, and his daughter, Andrea. He also wanted to remove his son as one of the executors.

24 In contrast to the earlier occasions on which Mr Saleeba had taken instructions from the deceased, Mr Saleeba found it difficult to get the deceased to answer questions. He said that the deceased's conversations were rambling and he was "hard to pin down". Mr Saleeba stated that these tendencies were not noticeable at his earlier meetings with the deceased.

25 Although he prepared the will in accordance with the instructions given to him and sent it to Mr Saggers, Mr Saleeba advised Mr Saggers that he needed to make sure that the deceased had testamentary capacity to sign the will. Mr Saleeba was told that the deceased was going to be assessed shortly. Mr Saleeba was subsequently advised that the deceased did not have capacity and he told Mr Saggers that the deceased should not sign the most recently prepared will.

26 Graham Saggers was the deceased's accountant from 1993 until the time of his death. Throughout that time he worked closely with him and was in contact with him daily. Mr Saggers stated that the deceased always insisted on knowing exactly what his financial position was and always knew exactly what assets he controlled. However, although the deceased was aware that some assets were held personally and some by his family trust, he never expressed any concern about which assets were owned by which. Mr Saggers formed the impression that the deceased simply regarded all of the assets as being his own.

27 On 29 May 1997 Mr Saggers received from Mr Saleeba the deceased's will. The deceased attended Mr Saggers' office the next day and he was given the will to read. Once he read the will, Mr Saggers explained the terms of it to him, clause by clause. He asked the deceased if that was what he intended and he said that it was. He also discussed with him the reasons behind the uneven distribution of his estate between his children and the bequest to the executors. The will was signed by the deceased on 30 May 1997 in the presence of Mr Saggers and his bookkeeper, Nell Thomas.

28 According to Mr Saggers, on the day that he executed his will, the deceased did not say anything or behave in any manner that suggested to Mr Saggers that he may not have understood what he was doing at that time. Mr Saggers said he had no reason to doubt that the deceased clearly understood that he was signing a will and that he fully understood the effect of his will.

29 Mr Saggers also gave evidence in regard to the preparation and execution of the codicil. He stated that he was advised by the deceased that he wished to change his will to appoint his son, John, and Mr Saggers as additional executors because they were much younger than the executors nominated in the will. Mr Saggers attended with the deceased at Mr Saleeba's office. On 10 February 1998 Mr Saggers received from Mr Saleeba the codicil and the power of attorney. Shortly after receiving the documents he went to the deceased's house. The deceased had a visitor at the time, a fellow psychiatrist called Dr Neville Hills. According to Mr Saggers, when he told Dr Hills that he wanted the deceased to sign a power of attorney, Dr Hills said to him that it would be fine for him to do so. However, as the deceased was obviously busy, Mr Saggers decided to return later. He did so a day or so later. Mr Saggers collected the deceased and took him back to his office. He read the codicil and the power of attorney to the deceased and explained to him the terms of both. Mr Saggers stated that the deceased appeared to clearly understand the consequences of the documents.

30 The codicil and the power of attorney were then signed by the deceased in the presence of Mr Saggers and two witnesses, Peter Poncini and Barry Haydon. Mr Poncini was an employee of Mr Saggers and Mr Haydon an accountant who worked nearby.

31 Mr Saggers stated that he and John Fletcher did not use the power of attorney until December 1998 when the deceased's health rapidly deteriorated.

32 Ms Thomas not only witnessed the will but, as an employee of Mr Saggers from 1988 to 2002, she often had contact with the deceased and was able to comment on his understanding of his affairs. She said that she witnessed the deceased signing documents on numerous occasions and, until late 1998, he always gave her the impression that he knew exactly what he was signing. According to Ms Thomas, if the deceased did not understand something, he always asked questions. At the time of signing his will, the deceased did not show any signs of not knowing what he was doing and there was nothing in his conduct to raise any suspicions on her part. However, she observed his condition change dramatically from late 1998. She said that from that time on he often telephoned her at the office in an agitated manner and his conversations began to roam from one topic to another. He began to ramble and was often incoherent she described his condition as deteriorating very quickly.

33 Mr Poncini, who witnessed the codicil and the power of attorney, worked for Mr Saggers from August 1997 to December 1998. He helped prepare the deceased's taxation documents and saw the deceased quite regularly. Mr Poncini recalled the occasion on which the codicil was signed. He said that he was called into Mr Saggers' office and, although he cannot recall exactly what was said, the deceased appeared to be happy with what had been explained to him and had no difficulty in understanding it.

34 Mr Poncini expressed the following view of the deceased based on his dealing with him from August 1997 to December 1998:

"... I gained the impression that he would not have signed any document if he was not happy with its contents or did not fully understand it. He always wanted documents to be explained to him. He always asked questions about anything he did not understand. For instance, we always had to explain what bills were being paid and Mr Saggers always showed him the bills that were being paid before Dr Fletcher would sign any cheques."

35 As with other witnesses, Mr Poncini noted the deterioration in the deceased's condition later in 1998. He said that by December 1998 the deceased, although still quite astute, had started to become very forgetful.

36 Mr Haydon, the second of the witnesses to the codicil and the power of attorney, recalled the occasion but could not recall the deceased saying anything. Mr Haydon stated that he understood the importance of a testator being able to understand the consequences of signing a will and expressed the view that he had no concerns about the deceased's mental competence. Although I accept Mr Haydon's evidence, I do not attach too much weight to it. It is essentially negative in character; that in the time he was in the deceased's presence nothing was done or said which caused him to doubt the deceased's capacity. However, such evidence is of particularly limited weight in view of a lack of prior knowledge of the deceased, the very short time he was with the deceased and the absence of any direct conversation with him. It was, of course, necessary to call Mr Haydon in order to ensure that no conflicting observation was made by him, or different opinion held by him, as to the deceased's capacity.

37 The final witness called was Dr Hills, who is an experienced, qualified psychiatrist, who has for many years been involved in the treatment of the elderly. He was a colleague of the deceased and saw him on 10 February 1998, three days before the codicil was signed. In his evidence, Dr Hills expressed the opinion that, at that time, the deceased may have been suffering from Lewy body dementia. He further stated that it was possible that he was in the early stages of the condition in May 1997 when the will was signed. Dr Hills described Lewy body dementia as the third most common form of dementia. It has a combination of features which include episodes of lucidity, some degree of difficulty with gait and mobility, occasional hallucinations and the presence of dementia. The condition tends to fluctuate significantly and the degree of memory impairment is not as severe as with Alzheimer's disease.

38 Notwithstanding his opinion that the deceased was probably suffering from Lewy body dementia at the time he saw him on 10 February 1998, Dr Hills considered the deceased to be able at that time to make choices as to what he wanted and did not want and felt that he was competent.

39 In his evidence, Dr Hill adopted the opinion expressed by him to the plaintiff's solicitors that, based on the witness statements provided to him, it was reasonable to assume that the deceased was experiencing periods of lucidity at the time the will and the codicil were executed and that it was more probable than not that he appreciated what he was doing. The statements on which that opinion was based did not include those of Mr Saleeba and Mr Saggers. The additional statements, which were subsequently provided to Dr Hill, were said by him to reinforce his opinion.

40 I am satisfied on the whole of the evidence that, even if the deceased was suffering from Lewy body dementia at the time he executed his will and the codicil, he did not lack testamentary capacity. I have no hesitation in accepting the evidence of Mr Saleeba. Any practitioner, particularly one of Mr Saleeba's experience, would necessarily be attuned to issues affecting a testator's capacity and would be mindful of whether a client was exhibiting behaviour which might call his or her capacity into question. Mr Saleeba's account of both occasions on which he took instructions from the deceased, together with the telephone conversations with him regarding the draft will, is consistent with the conclusion drawn by Mr Saleeba that the deceased was lucid, was aware of the extent of his estate and of those to whom he should give consideration in disposing of his estate. Whilst it is not for the Court on an application of this type to determine the merits of the dispositions made by the deceased, it is significant that the deceased was able to give reasonable explanations for the uneven distribution of his estate between his children.

41 Mr Saleeba's ability to identify the marked deterioration in the deceased's condition in December 1998, and the fact that he then raised the issue of testamentary capacity, supports the accuracy of his observations on the earlier occasions. Indeed, three other witnesses confirmed the contrast between the deceased's condition prior to February 1998 and his condition in December 1998.

42 In view of the short time lapses between the taking of instructions and the execution of the will and the codicil, it would in most cases be open to rely on the evidence of the taking of the instructions to determine testamentary capacity. However, as the condition of Lewy body dementia is variable, it is also necessary to consider the deceased's condition at the time he signed the will and the codicil to see if it meets the relevant test for testamentary capacity: see Parker v Felgate, above, and Bailey v Bailey, above.

43 The evidence of those witnesses present on the two separate occasions on which the will and the codicil were signed is consistent with the conclusion that the deceased had the requisite testamentary capacity. Mr Saggers explained the terms of the will to the deceased who confirmed that it accorded with his intentions. The deceased was also able to discuss with Mr Saggers the reasons for the uneven distribution between his children and the bequest to the executors. I accept Mr Saggers evidence that he had no reason to doubt that the deceased clearly understood that he was signing a will and that he understood its effect. That evidence is supported by the evidence of Ms Thomas who had regular contact with the deceased and found nothing in his conduct to raise suspicion on her part.

44 As to the signing of the codicil, Mr Saggers explained the terms of the codicil and the power of attorney to the deceased who appeared to clearly understand the consequences of both documents. Neither of the witnesses to the codicil identified anything in the deceased's behaviour which would raise concerns about his mental capacity.

45 The finding of testamentary capacity which I consider is open on the evidence of these witnesses is reinforced by the evidence of Dr Hills. The opinion of Dr Hills that it is more probable than not that the deceased appreciated what he was doing in signing the will and the codicil is based on Dr Hills' knowledge of the deceased, his knowledge of Lewy body dementia and an appreciation of the deceased's behaviour on each relevant occasion based on statements from the witnesses.

46 For these reasons, I find that the deceased was of sound mind and knew and approved of the contents of the will and the codicil at the time of their execution. I therefore pronounce for the force and validity of the will of Edmund Francis Fletcher dated 30 May 1997, and the codicil dated 13 February 1998, in solemn form.