State Trustees Limited v Do & Nguyen [2011] VSC 45

1 State Trustees Limited is the administrator of the estate of Lydia Aukland under the Guardianship and Administration Act 1986. It seeks leave to make an application under s 21(2) of the Wills Act 1997 for the court to authorise the making of a will on her behalf under s 21(1) and in terms specified in a draft which has been produced to the court. It also seeks the court's authorisation for that will to be made.

2 By the provisions of Division 2 of Part 3 of the Wills Act, the court may make an order authorising a will to be made in specific terms approved by the court on behalf of a person who does not have testamentary capacity.[1] Leave to make the application must first be obtained.[2] An order may not be made if the person is deceased.[3] In considering the application for leave and authorisation, the court may have regard to information which is given to it in support of the application for leave, may inform itself in any manner it sees fit and is not bound by the rules of evidence.[4] The application for leave and authorisation may be heard together.[5] Those entitled to appear at the application include the person's administrator and any person with a genuine interest in the matter.[6]

3 Before granting leave to apply, the court must be satisfied that the person on whose behalf the will is to be made 'does not have testamentary capacity', the proposed will 'reflects what the intentions of the person would be likely to be, or what the intentions of the person might reasonably be expected to be' and it is reasonable in all the circumstances for the court to authorise the making of the will.[7] As those conditions must be satisfied before the court can grant leave under s 21(2), the power of the court under s 21(1) to authorise the making of the will shares that predicate.

4 In proceedings for an application for leave to apply, the court is empowered to request the applicant to give it certain specified information.[8] The specified information is a statement of the general nature of the application and the reasons for making it,[9] a reasonable estimate of the size of the estate,[10] a draft of the proposed will,[11] evidence of the wishes of the person,[12] evidence of any likelihood of the person acquiring or regaining testamentary capacity,[13] evidence of previous wills,[14] evidence of the likelihood of potential applications under Part IV of the Administration and Probate Act 1958,[15] evidence of any person for whom provision might reasonably be expected to be made under the will,[16] evidence of any person who might be entitled to claim on intestacy,[17] evidence of any gift for charity or other purpose,[18] and any other available evidence relevant to the application.[19]

5 In giving leave and authority, the court may make any necessary related orders or directions. That might include orders for the service of the application on interested persons, as occurred in the present case. It might include granting leave for the amendment of the application, or the joinder of parties, as also occurred in this case.

6 The evidence and other information filed by State Trustees addresses all of the specified requirements. This has enabled me to be satisfied that the court should grant the leave sought and authorise the making of the will on her behalf in the terms now requested.

7 As to Ms Aukland's estate,[20] it consists of funds in the amount of some $700,000.

8 As to the question of capacity,[21] it is clear from the medical evidence that Ms Aukland does not have testamentary capacity. She is aged 88 years and suffering from dementia. Although she is otherwise in reasonable health for her age, she is not of sound mind.

9 As to whether it is otherwise reasonable for the court to grant leave and authorise the making of the will,[22] State Trustees is making the application for leave on Ms Aukland's behalf in her best interests as the administrator of her estate. Ms Aukland has made eight wills since 1989, the earlier ones being of doubtful validity and the latter ones being of undoubted invalidity. The last will is based on a false legal assumption which will defeat the main expressed intention of that will. It is possible and appropriate to save Ms Aukland's estate from total or substantial intestacy and the court should do so.

10 As to Ms Aukland's intentions,[23] the Wills Act was amended by the Wills Amendment Act 2007 to give somewhat more scope to the court to authorise the making of wills on behalf of people lacking testamentary capacity. The Act previously required the court to be satisfied that the proposed will 'accurately reflects the likely intentions of the person'.[24] Now it requires the court to be satisfied that the proposed will 'reflects what the intentions of the person would be likely to be, or what the intentions of the person might reasonably be expected to be'.[25]

11 The significance of the amendment is that the court is no longer required to be satisfied that the proposed will would 'accurately' reflect the person's likely intentions. It is sufficient for the court to be satisfied that it would reflect their 'likely' or 'reasonably ... expected' intentions. In that regard, the nature of the specified information[26] illuminates the scope of the court's function. A broad-brush approach is required, for otherwise the beneficial purpose of the function might be defeated.

12 Turning to Ms Aukland's 'likely' or 'reasonably ... expected' intentions, these are best revealed by the terms of her previous wills. With all their difficulties, it is possible to identify a mind with an intention at work in these wills. The wills, read with the relationship evidence, show Ms Aukland to be focussed on her family, her godson and her two neighbours. Without going into the details, the wills so read tend to favour those persons.

13 As to the defendants Hao Hon Do and Hong Nguyen, this husband and wife were neighbours of Ms Aukland and she became very attached to them. She made substantial gifts to them and their family, which led to litigation being commenced against them by State Trustees on her behalf. That litigation was settled on the basis that they would repay a certain amount and State Trustees would include their interests (calculated at 12.5% of the estate) in the present application. After considering the relationship evidence concerning them, I think that share does represent Ms Aukland's likely intentions.

14 Next there is the godson, Gregory Hlasko. In her several wills, Ms Aukland has made various and inconsistent provision for him. That provision understandably decreased after 2004 when she gave him $100,000 to pay off his mortgage. But the terms of her wills, and the relationship evidence, persuade me she is still likely to have intended to make provision for him in her will, also in the amount of 12.5%.

15 That brings me to Ms Aukland's family. They would be the persons who might be entitled to claim on intestacy[27] or make application for further and better provision.[28] Therefore, the court directed State Trustees to identify who the family were. Its best endeavours have revealed that she has a living sister, Olga Arevkova, and had a brother who died leaving a son, Youri Silkhomlinov, who is still living. But the evidence does not support a definite finding that Ms Aukland has no other siblings. Ms Aukland has no partner and no children.

16 On the evidence, I am satisfied that Ms Aukland's likely intentions would have been to leave the balance of her estate to her siblings who survive her or to their surviving issue if they do not. I am satisfied that, beyond her siblings and their issue, there are no other family members who would likely have come within the scope of her testamentary bounty.

17 However, it is necessary to take into account Ms Arevkova's special needs. She is very poor, lives in Belarus and is in ill-health. The evidence as to her personal circumstances, and the strength of the relationship between the two, persuade me that Ms Aukland would likely have intended to make additional provision for her, besides that share which she would get as a sister. I think a separate disposition of 12.5% would represent that intention. In that regard, I have taken into account Ms Arevkova's right to make a claim for further and better provision.[29] On my suggestion, State Trustees sought leave to amend the application along those lines and have produced a new draft will. The jurisdiction[30] of the court, on application by leave, is to authorise the making of a will in proposed terms, and not itself to write that will. This does not prevent the court from making appropriate remarks about what it might authorise and the applicant from seeking to amend their application accordingly.

18 Now to the residual estate of 62.5%. Consistently with Ms Aukland's likely intentions as I have found them to be, the will proposed by State Trustees would have the residual estate go equally to her surviving siblings (specifically including Ms Arevkova, to remove any doubt) or to the surviving issue of her non-surviving siblings (which would include Youri Sukhomlinov). In that regard, I have taken into account the claims which those siblings (and their children) might have on intestacy.[31]

19 The proposed will also would also make two modest pecuniary legacies to two charities,[32] as well as making provision for Ms Aukland's cremation, which reflects the consistent terms of her previous wills and her apparent wishes when lucid.

20 I earlier referred to a false legal assumption in Ms Aukland's last will. That occurred because she had earlier made a puzzling gift to a solicitor. Quite unknown to the solicitor concerned, Ms Aukland executed a transfer of her house in the solicitor's favour. What Ms Aukland had in mind, the court does not know. She was not related to the solicitor and had no particular relationship with her. But the transfer never took place. When the solicitor was told of the gift, she very honourably renounced it. The property was subsequently sold and the proceeds now form part of the estate. The false assumption is that the transfer took place.

21 State Trustees has tried and failed to find the solicitor and give her notice of these proceedings. I do not see this as an impediment to granting leave to apply and authorising the making of the will. On no view could the solicitor fall within the likely scope Ms Aukland's testamentary bounty. Ms Aukland's generosity towards the solicitor was the product of her poor state of mind and cannot be reflected in my findings about her likely testamentary intentions.

22 In the circumstances, I will make orders granting leave to State Trustees to make application for authorisation of the making of a will on Ms Aukland's behalf in the terms of the final amended draft, and authorising the making of that will. In accordance with the Wills Act,[33] the authorising orders will require the will to be signed by the registrar of probates, to be sealed with the seal of the court and to be deposited with that registrar.

[1] Section 21(1).

[2] Section 21(2).

[3] Section 21(3).

[4] Sections 22 and 27(1).

[5] Section 27(2).

[6] Section 29.

[7] Section 26(a),(b) and (c).

[8] Section 28(a)-(k).

[9] Section 28(a).

[10] Section 28(b).

[11] Section 28(c).

[12] Section 28(d).

[13] Section 28(e).

[14] Section 28(f).

[15] Section 28(g).

[16] Section 28(h).

[17] Section 28(i).

[18] Section 28(j).

[19] Section 28(k).

[20] Section 28(b).

[21] Section 26(a).

[22] Section 26(c).

[23] Section 26(a).

[24] Former s 26(b).

[25] Section 26(b) as amended.

[26] See s 28(a)-(k).

[27] Section 28(i).

[28] Section 28(g).

[29] See section 28(g).

[30] Section 21(1) and (2).

[31] See section 28(g) of the Wills Act 1997 and s 52(1)(f) of the Administration and Probate Act 1958.

[32] See section 28(j).

[33] Section 25(1) and (3).