Re Fletcher; ex parte Papaleo [2001] VSC 109 (1 May 2001)

Supreme Court of Victoria|2001-05-01|Before: Byrne J

WILLS - statutory will - likely intentions of will-maker - application for leave to commence proceeding - whether evidence of likely intention to change existing will. Wills Act 1997 ss. 21, 26.

On 11 April 2001 I heard and refused an application brought by Luigi Adrian Papaleo pursuant to s. 21(2) of the Wills Act 1997 for leave to apply for an order that the court authorise the making of a statutory will. The intended will-maker, Olive Mary Fletcher, is elderly and in extremely precarious health so that the matter was dealt with as a matter of urgency with reasons to be given later. These are my reasons.

Mrs Fletcher is a widow whose affairs were on 17 January 1994 placed in the hands of Mr Papaleo pursuant to the Guardianship and Administration Act 1986. At the same time, Mr Papaleo was appointed administrator of the affairs of her husband, William Percy Fletcher. A medical report of Dr Kefaladelis dated 7 December 1993 which is in evidence shows that, for some years previously Mrs Fletcher was confused and not coping with living alone. He diagnosed her condition in July of 1992 as that of moderately advanced Alzheimer's disease. I accept that she is now unable to make decisions about her affairs and that she does not have testamentary capacity.

In his affidavit dated 11 April 2001 Mr Papaleo swore that her physical condition had deteriorated recently so that she is unlikely to live beyond the Easter period. Accordingly, if an order for a statutory will is to be made, it must be made promptly[1]. Mrs Fletcher has two children John Barrie Spence Fletcher and Celia Diane Cox. She has made a will dated 4 March 1967 and a codicil dated 3 July 1970 the effect of which is that her two children were appointed executors and sole beneficiaries in equal shares of her estate after payment of expenses. The statement of assets produced by Mr Papaleo shows that her estate is presently valued at $259,155.46.

The reason for the present application is that the equality between the two children which appears to have been the objective of the will and codicil has been disturbed by two subsequent events. It is sought by this application to restore this equality.

On 28 November 1979 John Fletcher borrowed $14,000 from a Mrs Hall on terms that quarterly interest was payable at 12.5%. This loan was secured by a mortgage granted over a property owned by Mr and Mrs Fletcher at 21 Springfield Road, Boronia. When Mr Papaleo assumed the control of the affairs of Mr and Mrs Fletcher in early 1994 he made enquiry about this mortgage and discovered that the interest on the loan had been paid to the mortgagee by John Fletcher and his wife. Mr Papaleo observed that this is consistent with the information which he had received that John Fletcher and his wife had the benefit of the loan. Following his death on 28 July 1994 the interest of Mr Fletcher in this property passed to his widow. On 24 November 1995 Mr Papaleo made a formal demand for payment of the principal sum upon John Fletcher and his wife. The mortgagee sold the property in March 1997 receiving from the proceeds the principal, interest and costs totalling $17,361.42. The balance was presumably paid to Mr Papaleo as administrator.

The second event is two suggested loans totalling $47,000 made to the same persons. On 11 April 1993 Mrs Fletcher and her husband executed enduring powers of attorney in favour of their son, John Fletcher. On 14 March 1993 and 16 April 1993 cheques for $42,000 and $5,000 respectively were drawn on the joint bank account of Mr and Mrs Fletcher in favour of cash. The proceeds were used by John Fletcher for his own purposes. On Mr Fletcher's death his interest in this debt, too, passed to his widow.

On 22 February 1994 John Fletcher told Mr Papaleo that these withdrawals were with the consent of his parents; they were by way of loan to be repaid "at some stage". On 15 September 1995 Mr Papaleo made a formal demand of John Fletcher for repayment of this loan. In correspondence which followed, the solicitor for John Fletcher produced a copy of a letter to him apparently written by John Fletcher which stated as follows:

"The $47,000 referred to in the fax you sent was loan from my parents to be used by me to purchase an investment property in Rosebud. The money was to be interest free and was to be debited against my share of their estate when it was finally wound up. The loan was to balance up the two properties they purchased in Queensland, in half share with my sister. It also was in consideration of them living rent free for 15 years in the house we (Olive/Percy and June/John) jointly owned at Macrae. Over the time they lived in the Macrae house it did not produce any rental income."

The Olive/Percy there referred to may well be Mr and Mrs Fletcher and the June/John, John Fletcher and his wife.

On 8 October 1996 John Fletcher and his wife became bankrupts on their own applications. They were discharged on 9 October 1999. The consequence of this is, of course, that John Fletcher is released from his provable debts. A proof of debt was lodged in the bankruptcies on behalf of Mrs Fletcher and on 11 August 1999 the sum of $806.05 was received from the Official Receiver by way of dividend.

What is put in these circumstances is that, upon the administration of her estate following her death, the executors will be obliged to pay one half to each of the children as provided in the will notwithstanding that one of them, John Fletcher, has during his mother's life received benefits totalling about $63,555. This sum represents the total of $47,000 and $17,361.42 less $806.05 received.

I was told that the daughter, Mrs Cox, is aware that this application was being made but that no notice had been given to John Fletcher who is thought to be somewhere in the United States.

The task of a judge hearing an application for leave to apply under s. 21 of the Wills Act is to form a preliminary view of the prospects of success of the substantive application and to filter out those which are baseless[2].

In this case I formed the conclusion that the facts which I have outlined do not provide a basis for a statutory will to be authorised. It is clear enough that Mrs Fletcher lacks testamentary capacity. What is lacking is any sufficient indication of her likely intentions if she had testamentary capacity.

The legislation conferring the will-making power on the court came into force on 20 July 1998. It would seem that the statutory provision was enacted following a general review in Victoria of the law relating to wills and, in particular, the 1985 report of the Chief Justice's Law Reform Committee (Vic) "Wills for Mentally Disordered Persons". The recommendations in that report followed legislation conferring a like power on the Court of Protection in the United Kingdom[3]. Legislation to the same effect has been recommended but not enacted in New South Wales[4].

Section 26 of the Wills Act 1997 (Vic) requires that the court granting leave to bring an application be satisfied of three matters:

"(a) the person on whose behalf the will is to be made or revoked does not have testamentary capacity; and (b) the proposed will or revocation accurately reflects the likely intentions of the person, if he or she had testamentary capacity; and (c) it is reasonable in all the circumstances for the Court, by order, to authorise the making of the will or the revocation of the will for the person."

In the United Kingdom the statute contained no requirement such as that in part (b) of the Victorian s. 26. Decisions on English legislation which have been relied upon in this Court have been informed by the origins and context of s. 96(1)(e) of the Mental Health Act 1983 (UK) and its predecessor, s. 103(1)(dd) of the Mental Health Act 1959 (UK). Section 102 of the 1959 Act conferred on the court wide powers to deal with the property and affairs of a patient. The section provided, so far as is here relevant,

"(1) The judge may, with respect to the property and affairs of a patient, do or secure the doing of all such things as appear necessary or expedient - ... (b) for the maintenance or other benefit of members of the patient's family, (c) for making provision for other persons or purposes for whom or which the patient might be expected to provide if he were not mentally disordered,... (2) In the exercise of the powers conferred by this section regard shall be had first of all to the requirements of the patient... but subject to the foregoing provisions of this subsection the judge shall, in administering a patient's affairs, have regard to... the desirability of making provision for obligations of the patient notwithstanding that they may not be legally enforceable."

Section 103 was expressed as providing a mode of application of the powers conferred by s. 102. So far as is here relevant, s. 103 provides as follows:

"(1) Without prejudice to the generality of the foregoing section, the judge shall have power to make such orders and give such directions and authorities as he thinks fit for the purposes of that section, and in particular may for those purposes make orders or give directions or authorities for- ... (d) the settlement of any property of the patient, or the gift of any property of the patient to any such persons or for any such purposes as are mentioned in paragraphs (b) and (c) of subsection (1) of the foregoing section..."

A new paragraph (dd) was introduced in s. 103 by the Administration of Justice Act 1969 (UK) in the following terms:

"(dd) The execution for the patient of a will making any provision (whether by way of disposing of property or exercising a power or otherwise) which could be made by a will executed by the patient if he were not mentally disordered..."

The consequence of the structure of this legislation has been in England that the courts in exercising the will-making power must enquire whether the suggested will satisfied any of the objectives contained in s. 102(1) of the 1959 Act, which was re-enacted as s. 95 of the 1983 Act, and in particular s. 102(1)(b) or (c) which I have set out above[5]. In Re D(J)[6] Megarry V-C set out a number of considerations which he considered relevant:

"The first of the principles or factors which I think it is possible to discern is that it is to be assumed that the patient is having a brief lucid interval at the time when the will is made. The second is that during the lucid interval the patient has a full knowledge of the past, and a full realisation that as soon as the will is executed he or she will relapse into the actual mental state that previously existed, with the prognosis as it actually is. ... The third proposition is that it is the actual patient who has to be considered and not a hypothetical patient. One is not concerned with the patient on the Clapham omnibus. I say that because the will is being made by the court, and so by an impartial entity skilled in the law, rather than the actual patient, whose views while still of a sound disposing mind might be idiosyncratic and far from impartial. ...and I think that this provision governs the making of a will for the patient, and contemplates the particular patient: ... Before losing testamentary capacity the patient may have been a person with strong antipathies or deep affections for particular persons or causes, or with vigorous religious or political views; and of course the patient was then able to give effect to those views when making a will. I think that the court must take the patient as he or she was before losing testamentary capacity. No doubt allowance may be made for the passage of years since the patient was last at full capacity, for sometimes strong feelings mellow into indifference, and even family feuds evaporate. Furthermore, I do not think that the court should give effect to antipathies or affections of the patient which are beyond reason. But subject to all due allowances, I think that the court must seek to make the will which the actual patient, acting reasonably, would have made if notionally restored to full mental capacity, memory and foresight. ... Fourth, I think that during the hypothetical lucid interval the patient is to be envisaged as being advised by competent solicitors. The court will in fact be making the will, of course, and the court should not make a will on the assumption that the terms of the will are to be framed by someone who, for instance, knows nothing about lapse and ademption. Furthermore, as the court will be surveying the past and the future, the hypothetically lucid patient should be assumed to have a skilled solicitor to draw his or her attention to matters which a testator should bear in mind. ... Fifth, in all normal cases the patient is to be envisaged as taking a broad brush to the claims on his bounty, rather than an accountant's pen. There will be nothing like a balance sheet or profit and loss account. There may be many to whom the patient feels morally indebted; and some of that moral indebtedness may be readily expressible in terms of money, and some of it may not. But when giving legacies or shares of residue few testators are likely to reckon up in terms of cash the value of the hospitality and gifts that he has received from his friends and relations, and then seek to make some form of testamentary repayment, even if his estate is large enough for this. Instead, there is likely to be some general recognition of outstanding kindnesses by some gift which in quantum may bear very little relation to the cost or value of those kindnesses. Now I certainly do not say that these principles or factors are either exhaustive or very precise, nor am I altogether convinced that the notional lucid interval is the best way of expressing what the court has to do."[7]

As his Lordship pointed out, the above list is neither exhaustive nor does it cover every conceivable situation. In Re C (a patient)[8] Hoffmann J was faced with a case where the patient had suffered from birth from a severe mental disability. Accordingly, it was not possible to suppose the lucid moment envisaged by the Vice-Chancellor where the past was known to her and her affections or antipathies towards likely objects of her bounty were also known. His Lordship[9] observed, in reliance upon the Vice-Chancellor's third proposition set out in paragraph [18] above, that the will must reflect what the actual patient might be expected to make, not, if it be different, what some reasonable person in the patient's position would have done. Nevertheless, he concluded[10] that in the circumstances where the patient has never enjoyed a rational mind the jurisdiction should be exercised on the basis that "the court must assume that [the patient] would have been a normal decent person, acting in accordance with contemporary standards of morality" and then identify what objects such a patient would wish to benefit. His Lordship then supposed that such a patient would have made bequests by will to various charities to which it was thought she had an application and he authorised the making of a will accordingly. I express no view as to how such a case might be dealt with under the Wills Act 1997.

I mention these matters in order to highlight the considerations which might be considered relevant to the exercise of the power of the court insofar as it is concerned to remedy the testamentary incapacity of a will-maker. I have outlined the statutory circumstances in which the passage quoted from the judgment of the Vice-Chancellor above is to be found not, with respect, to cast any doubt upon the utility of his Lordship's observations to the task of a judge exercising jurisdiction under the Victorian Act[11]. Nevertheless, the solution in this State must be informed by the statute which I must interpret and apply to discover "the likely intentions of the person, if he or she had testamentary capacity" and then to authorise the making of a will which reflects and gives effect to these intentions. This statutory emphasis on the likely intentions of the will-maker is to be contrasted with the terminology of the United Kingdom statute which directs the inquiry as to the "persons or purposes for whom or which the patient might be expected to provide if he were not mentally disordered" and that the power should be exercised with a regard to the desirability of making provision for the obligations of the patient, including non-enforceable obligations. This means that the English courts have been ready to suppose a hypothetical set of circumstances in which the will-maker is presumed to find themself with testamentary capacity, and then to fashion a disposition of their assets which the court considers the will-maker might reasonably choose in these circumstances.[12] In Victoria the court must be satisfied in the assumed circumstances as to the likely intentions of the will-maker. The use by Parliament of the emphasised words means that there must be some indication as to what testamentary course it is probable that the will-maker would have in mind, assuming testamentary capacity.

A case such as the present illustrates the difficulties of the court's task. Testamentary incapacity is not an inability of a person to express or to record their intention as might be the case, for example, where an intellectually capable person is paralysed; it is not some legal incapacity such as minority. Indeed, the will-maker may be only too well able to express their wishes and to commit them to writing. The incapacity in question strikes at the ability of the person to form a testamentary intention. Where this is lacking, the court is obliged to discover what that intention might otherwise have been. Where the will-maker has had testamentary capacity, this will often be inferred from evidence of what the will-maker in a sufficiently lucid moment has said about their intention and by assuming that the intention so disclosed holds good at the date of the order[13]. In the present case, it would seem that this statement of intention is to be found in the will-maker's 1970 codicil. The interval between that date and the present is such that I would be reluctant to infer that the intention of dividing her estate into two equal portions has changed.

I express myself in this way because what must be put on behalf of the administrator is that, following the financial misadventures of John Fletcher, his mother would have insisted upon repayment of the money borrowed or that his share in her estate be diminished in order to restore the equality which she sought to achieve in her 1970 testament. Of this there is no evidence. It may be that this would be her reaction to the events which have occurred since that date. It may be that she would treat him as the prodigal son. It may be that there are other considerations, perhaps arising out of benefits conferred upon the daughter or otherwise, which may bear upon her intentions. I mention in passing that John Fletcher's letter to his solicitor contains a hint of this. Experience shows that people of sound mind do not alter their will even when subsequent events occur which change the effect of the existing testament. It is a serious step to make or to modify a will. It is not for me to impose upon Mrs Fletcher an intention which I think she might or ought to have. The section requires that I make a finding as to her supposed likely intentions. The application requires me to make a finding that her likely intentions are those set out in the proposed statutory will. This I am unable to do.

[2] See Monger v Taylor [2000] VSC 304 at [22] per Gillard J.

[3] See Mental Health Act 1983 s. 96(1)(e) which was originally enacted in 1969 as s. 103(1)(dd) of the Mental Health Act 1959.

[4] New South Wales Law Reform Commission, "Wills of Persons Lacking Will-Making Capacity" (1992 NSWLRC 68).

[5] See Re DML [1965] Ch 1133 at 1137, per Cross J; Re L (WJG) [1966] Ch 135; Re TB [1967] Ch 247; Re C [1991] 3 All ER 866 at 869, per Hoffmann J.

[6] [1982] Ch 237 at 243-4, a passage cited and applied by Gillard J in Monger v Taylor [2000] VSC 304 at [60].

[7] See also Re L(WJG) [1966] Ch 135 at 140, 143-5, per Cross J.

[11] In New Zealand where the power to authorise a statutory will is conferred without statutory guidelines as to the basis for its exercise, the Vice-Chancellor's guidelines have been described as exactly setting out the task of the court: Re Manzoni (a protected person); Kirwan v Public Trustee [1995] 2 NZLR 498 at 505, per Morris J. See Protection of Personal and Property Rights Act 1988 (NZ) s. 55.

[12] See, for example, Re DML [1965] Ch 1133 at 1138-9, per Cross J; Re L(WJG) [1966] Ch 135 at 144-5, per Cross J; Re TB [1967] Ch 247 at 253, per Ungoed-Thomas J; Re C (a patient) [1991] 3 All ER 866.

[13] As in Hill v Hill [2001] VSC 83.

Administration Act 1986

Mental Health Act 1983

Administration of Justice Act 1969

See Mental Health Act 1983

See Protection of Personal and Property Rights Act 1988

At a glance

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Judgment (43 paragraphs)

Legislation Cited (6)