Szabo v Battye

[2006] NSWSC 1351

Supreme Court of NSW|2006-11-10|Before: Biscoe AJ, Santow J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2006-11-10

Before

Biscoe AJ, Santow J

Source

Original judgment source is linked above.

Judgment (148 paragraphs)

[1]

Background 5 The deceased was born in Hungary in 1915. In 1937 she married Karoly Szabo in Budapest. They had two sons: Charles, born in 1942 and Arthur, born in 1947. Following the 1956 Hungarian revolution, the family found refuge in Australia in 1957. In about 1961 the deceased and her husband separated and she purchased 21 Clanwilliam Street, Willoughby, where she lived to the end of her days. Subsequently she and her husband were divorced. Her Willoughby home was the only substantial asset in her estate and was sold for a little under $900,000. She worked as a cook, household help and cleaner until about 1980, for various families. She loved making tapestries, which filled her house, cooking and gardening. She was intelligent and strong willed. 6 The deceased's husband died intestate in 1989 aged 74 years. Arthur and Charles shared his estate equally. Charles and Arthur have been on bad terms for many years. Charles is a successful builder who owns five or six properties, including his home at Lane Cove where he has lived for many years. Arthur is a gardener who has lived for many years at his home in Baulkham Hills which is his only property.

[2]

The 1991 will, accompanying statement and power of attorney 7 On 23 July 1991 Charles took his mother to the offices of his solicitor, Mr John Denes of the firm of Denes Ebner. Mr Denes was fluent in Hungarian. Charles waited in the waiting room while his mother gave Mr Denes instructions. Mr Denes prepared, and she executed, the 1991 will, an accompanying statement and a power of attorney. 8 The 1991 will left the whole of her estate equally to Charles and Arthur and appointed Charles her executor. The will was some three and a half pages in length and is quite sophisticated compared with the one page wills which she subsequently executed in 1999, 2002 and 2003, which were prepared by another solicitor. 9 Accompanying the 1991 will was the following statement signed by the deceased: This is a Statement accompanying my Will of even date and is signed by me on this 23rd day of July, One thousand nine hundred and ninety-one.

[4]

My other son Charles Szabo has at all times helped me with the repair and maintenance of my house and did this free of charge without ever accepting any payment in return. Whenever I asked my son Arpad for help with the house I have on each occasion paid him for his assistance. I have considered both of my sons situation as at the date of signing of my Will and although I consider that my son Charles Szabo has in the past been more helpful to me than Arpad Szabo, I have come to the conclusion that in order to be fair to both of my sons my assets would be divided in equal shares between them. 10 Her power of attorney dated 23 July 1991 appointed Charles her attorney if, whenever and so long as she should be incapacitated by illness from attending to her affairs. 11 Mr Denes gave the following evidence which I accept. The deceased's English was limited and so they conversed in the Hungarian language when they spoke. He had no independent recollection of taking instructions for the drawing of the will, the accompanying statement, or the power of attorney. In accordance with his practice, he would have excluded from the room, when taking instructions and having the will executed, all persons other than the testatrix and attesting witnesses. Further, he would have read over, and if necessary explained, the provisions of the will, the statement and the power of attorney to her before she executed them. It was not his practice to question a testator as to their mental capacity unless he had a doubt about their answers because such answers were not coherent, or did not fit into the frame of what they were instructing him to do. 12 Charles' evidence, which I accept, is that when the deceased came out of Mr Denes' office she said to him that she had made it "50:50" for him and Arthur and that they never again discussed the division of her assets under that will. The 1991 will and accompanying statement were placed in Charles' safe custody packet at his bank and, according to Charles, he forgot they were there until about 2005. Revocation of the 1991 power of attorney 13 In 1999 the deceased telephoned Mr Denes and asked him to arrange for the power of attorney to be revoked. On 27 August 1999 Mr Denes wrote a letter to the deceased enclosing a copy of the 1991 power of attorney, a notice of revocation and a notice to Charles. 14 On 17 September 1999 Mr Denes wrote to the deceased about the revocation of the power of attorney and her relationship with Charles, from whom he had also received instructions: Re: Mr Charles Szabo

[23]

After the making of the 1999 will she invited me around to see some tapestries at her house in Clanwilliam Street, Willoughby. I was there for about an hour and I recall she gave me some fruit from her garden. Sometime after that she would call in to see me and give me a plastic bag of fruit, or another tapestry. 23 Mr Battye's oral evidence included the following, which I accept. He has made hundreds of wills and his practice when making wills was substantially similar to that of Mr Denes. Mr Denes' evidence, which I accept, was that his practice when having a will executed was to exclude from the room all persons other than the testator or testatrix and attesting witnesses and to read over and, if necessary, explain the provisions of the will. When Mr Battye drafted the 1999 will Arthur went outside. It was Mr Battye's general practice to ask a relative to leave the office. Mr Battye deposed that on that occasion the deceased appeared quite alert and bright and indicated she wanted a new, simple will. She said her jewellery was gone. Because of her very broken English, he had to use very truncated direct sentences and sometimes rephrase them to get appropriate instructions. When she said the jewellery was gone, he gave her several alternatives and she said it had been sold. She said that Charles owed her money which was a recurring pattern over the time he knew her. He did not inquire into this. The instructions given on that occasion were so brief and to the point that Mr Battye immediately prepared the will on his computer. He explained "the legalese", such as it was, in this short will. He was satisfied that he had adequate instructions and that the will reflected those instructions. The instructions were difficult to get clear and he took some time to satisfy himself that he had got it right. His impression was that the deceased was of strong native intelligence and certainly knew what she wanted. He gave her a copy of the printed will. He had no one else in the office who could witness it. She took the original will away and brought it back, duly executed, shortly afterwards. 24 I accept Mr Battye's evidence notwithstanding an attack on his credit which I address later.

[40]

34 Mr Battye gave the following affidavit evidence concerning execution of the 2003 will: 10. On the occasion of the third will in 2003 I had moved to my new office at the present address. Here I had set the office up differently. It is a three storey terrace style office with reception and a kitchenette and storage on the ground floor. It has a couple of uncomfortable waiting chairs. I conduct my practice on the basis that people can come straight in and see me unless I already have a client with me. People generally do not wait, they either come up to the second level or come back later. On the second level is an open plan office in which there are computer stations and I have a half partitioned off client table area for taking instructions. On the third level is accounting and storage. 11. When she visited me in August, 2003 to make a third will with me Mrs Szabo was able to come up a flight of stairs to my table/office to see me. I observed that she was a little withdrawn on this occasion compared with the two previous occasions (looking tired about the eyes) but she was alert and showed no signs of forgetfulness or other signs of diminished mental capacity such as wandering attention. I saw no need to have her tested for testamentary capacity as she was clearly capable of making a will. The Second Defendant accompanied her but either waited downstairs or went outside. He did not sit near her while I took instructions for the will. If he was sitting downstairs he may have been able to hear something of what was said. At no time in my dealings with Mrs Szabo did the Second Defendant make any attempt in my presence to influence his mother or me in relation to her Will. 12. Mrs Szabo said to me: " I am annoyed about the failure of my son Charles to pay the debt of $30,000.00 he owes. " Mrs Szabo was a bit withdrawn on this occasion when she made the third will in 2003 but in my observations this did not appear to diminish her testamentary capacity. She said to me: " I wish to make a change to my Will to be more fair because Charles has failed to repay the loan of $30,000.00 ". As she gave the instructions I typed out the will in accordance with those instructions. Apart from telling me she wished to leave the Chesterfield lounge to her son Arthur and the tapestries and contents of her home to Charles she said words to the effect: " As to the rest of my Estate including my home I wish to give two-thirds to my son Arthur and one-third to my son Charles ". She was sitting at the table opposite me. I went through the will with her line by line telling her what it said. She appeared to be reading it at the same time and she was able to ask any questions if she did not understand it. I do not recall her asking about it. After reading it she expressed general satisfaction with it and said that she was ready to sign it. 13. Once she was ready I called my then secretary/typist Michelle Yip over and Mrs Szabo signed the will in front of us both in a steady hand. She then paid me $50 and left the will in my custody before thanking me and leaving with the Second Defendant. 14. I have no doubt that the will as drawn expressed her wishes at the time she made it. 15. I witnessed the will as there was no-one else around to do it. I realised that I could not take any benefit under the will but I never intended to take any commission from a pensioner.

[46]

40 Michelle Lewis, Mr Battye's paralegal and secretary, gave the following evidence concerning the circumstances of the execution of the 2003 will in an affidavit on which she was not cross-examined: 1. On the 19th August 2003 I was a legal secretary/paralegal employed by the First Defendant Chris Battye at his office at Suite 18 47 Neridah Street Chatswood 2067. On that day the deceased Irene Szabo attended at the office of the First Defendant and was accompanied by her son Arthur Szabo. She came upstairs to Mr Battye's office area which was on the first floor. She was able to get there unassisted by anyone although she supported herself on the hand railing. 2. The first floor was open plan and Mr Battye's desk was partly separated from the area where I sat by a chest-high padded office partition. Mrs Szabo wanted to make a new will. She spoke to Mr Battye for a few minutes. I do not recall what was said but I can recall Arthur Szabo being involved in the conversation. When he spoke to his mother it was in a deferential tone. I do not recall Arthur Szabo speaking in an authoritarian or badgering tone to his mother. Their relationship appeared to be one of mutual respect. Mr Arthur Szabo let her take her time to give instructions for the will. 3. After the instructions had been taken Mr Battye handed me a photocopy of Mrs Szabo's previous will with the alterations handwritten on it. While I was in the process of taking the handwritten instructions and walking back to my desk I recall a discussion in which Mrs Szabo indicated that she was unhappy about something relating to money and her son Charles. She looked very displeased at something when this was discussed. She was discussing it with Arthur Szabo in Hungarian. She had a document which was handwritten in a language I do not understand and which I understand to be the document written by Mrs Szabo. Annexed hereto and marked ' A ' is a copy of that document. 4. I then typed the new will and took it over to Mr Battye. I stayed in the immediate vicinity of Mr Battye and Mrs Szabo while Mr Battye explained the will to her. He explained the will while holding it so she could read it and pointing to the relevant clauses. While Mrs Szabo did not speak perfect English she spoke it well enough to get by. She appeared to understand the will. She may have asked some questions regarding the will. After this process she indicated that she was ready to sign the new will and she then signed it. I was watching as she signed it, Mr Battye then witnessed it and then I witnessed it. We were at all times within one another's presence. To the best of my recollection at the time that the will was being signed Mr Arthur Szabo was absent from the first floor having either gone down to the ground floor reception area or gone outside of the building altogether. 5. Throughout the period of the instructions for the will and the signing Mrs Szabo seemed alert. She seemed very sure of what she was doing and she knew it involved her property.

[48]

42 It was submitted for Charles that the circumstances attending the 2003 will were unsatisfactory for the following reasons: (a) first, Mr Battye failed to check with a doctor or any independent person as to the deceased's testamentary capacity despite knowing that: (i) the deceased had been hospitalised since the last will was made. Mr Battye's evidence, which I accept, was that it did not occur to him to have her state of mental health or testamentary capacity checked as there were no signs of lack of awareness or other mental problems; (ii) the deceased had difficulty in negotiating stairs, pausing on them and pointing to her heart. Mr Battye did not accept the suggestion put to him in cross-examination that she had been struggling up the stairs, but agreed she had some physical difficulty and looked more frail than she had previously. (iii) as Mr Battye agreed, the deceased had black circles under her eyes and was withdrawn. I do not accept that he should have checked with a doctor or an independent person as to the deceased's testamentary capacity. (b) secondly, Mr Battye should have sent the deceased away to think about the change to her will, given that she was changing it from 50/50. I do not accept that he had such an obligation in the circumstances; (c) thirdly, Mr Battye failed to inquire as to the underlying reasons for that significant change and whether those reasons were rational given that he knew that the deceased had strong feelings regarding the unpaid loan from Charles. I do not accept that Mr Battye was obliged to make that inquiry in the circumstances. He went through the will with the deceased line by line telling her what it said. After reading it she expressed general satisfaction and said she was ready to sign it, and she did so in a steady hand; (d) fourthly, it was pointed out that Mr Battye failed to take a note of her instructions. I do not accept the submission. His evidence was that it was not his practice to make a lengthy note, especially when the will was simple and that he assumed that he threw out any notes he had after the will was executed. (e) finally, it was submitted that Mr Battye acted as if a slave to his client's instructions. I do not accept this submission. 43 Despite these criticisms, I do not think that the circumstances surrounding the execution of the 2003 will were unsatisfactory, or so unsatisfactory as to lead to a conclusion that the deceased did not know and approve of the will.

[59]

54 A number of matters were said to strain credulity in relation to Arthur's evidence. First, it was said that it was no coincidence that the revocation of the power of attorney in 1999 was coincidental with the drawing of a new will. Arthur gave evidence, which I accept, that the deceased was looking for her earlier will, could not find it and did not explain why she was changing her power of attorney, and that he did not ask her why. He denied the suggestions in cross-examination (a) that he was "in [his] mother's ear… persuading [her] mother to make a will that was more generous to [him]"; (b) that he wanted to find the prior will and that was why he telephoned Mr Denes; (c) that he encouraged his mother to revoke the power of attorney; (d) that he assisted her with the revocation of the power of attorney; and (e) that he made a call to Mr Battye so he could attend to the alteration of the will. I accept his denials. Moreover, given that the 1999 will essentially divided the estate equally between the sons, it was not in fact more generous to Arthur. Secondly, it was submitted that it strains credulity that when Arthur read the note accompanying the 2002 will, that he was not especially upset about it. This refers to a question that was put to him in cross-examination as to whether that annoyed him, and his answer that he was not annoyed. I do not regard this as a significant point. The next matter said to strain credulity concerned Arthur's evidence that the deceased told him on a number of occasions "I lent moneys to Charles to help him with the purchase of some properties. These loans are to be repaid and Charles signed an Acknowledgement that he borrowed such money from me… I asked Charles many times to repay the money. When I showed him the Acknowledgement he ripped it up and said to me 'this is not worth anything'". I accept Arthur's evidence. The next matter said to strain credulity was Arthur's evidence that his mother told him she believed her diamond ring was being worn by Charles' wife. Arthur gave evidence that there was a ring missing from her place five or six years before she died, that this went out of his mind, and then some 12 months before his mother died for some reason she brought it back up again and said that she had seen the ring on the hand of Charles' wife. I accept Arthur's evidence. Next, there was a criticism about Arthur's evidence that he changed the locks on his mother's front door when she came home from hospital in 2003 because she felt that there were things missing from her house and that she mentioned his brother in that context. I accept Arthur's evidence.

[65]

60 In relation to the more usual situation where a question of testamentary capacity arises, Cockburn CJ said at 566: It may be here not unimportant to advert to the law relating to unsoundness of mind arising from another cause - namely, from want of intelligence occasioned by defective organization, or by supervening physical infirmity or the decay of advancing age, as distinguished from mental derangement, such defect of intelligence being equally a cause of incapacity. In these cases it is admitted on all hands that though the mental power may be reduced below the ordinary standard, yet if there be sufficient intelligence to understand and appreciate the testamentary act in its different bearings, the power to make a will remains… 61 Cockburn CJ approved (at 566 - 567) the following passage from an American case: … he ought to be capable of making his will with an understanding of the nature of the business in which he is engaged, a recollection of the property he means to dispose of, of the persons who are the objects of his bounty, and the manner in which it is to be distributed between them. It is not necessary that he should view his will with the eye of a lawyer, and comprehend its provisions in their legal form. It is sufficient if he has such a mind and memory as will enable him to understand the elements of which it is composed, and the disposition of his property in its simple forms. In deciding upon the capacity of the testator to make his will, it is the soundness of the mind, and not the particular state of the bodily health, that is to be attended to; the latter may be in a state of extreme imbecility, and yet he may possess sufficient understanding to direct how his property shall be disposed of; his capacity may be perfect to dispose of his property by will, and yet very inadequate to the management of other business, as, for instance, to make contracts for the purchase or sale of property. For, most men, at different periods of their lives, have meditated upon the subject of the disposition of their property by will, and when called upon to have their intentions committed to writing, they find much less difficulty in declaring their intentions than they could in comprehending business in some measure new. Cockburn CJ also approved (at 567) the following passage from another American case: By the terms " a sound and disposing mind and memory " it has not been understood that a testator must possess these qualities of the mind in the highest degree; otherwise, very few could make testaments at all; neither has it been understood that he must possess them in as great a degree as he may have formerly done; for even this would disable most men in the decline of life; the mind may have been in some degree debilitated, the memory may have become in some degree enfeebled; and yet there may be enough left clearly to discern and discreetly to judge, of all those things, and all those circumstances, which enter into the nature of a rational, fair and just testament. But if they have so far failed as that these cannot be discerned and judged of, then he cannot be said to be of sound and disposing mind and memory.

[102]

89 Dr Sharon Reutens, a neuropsychiatrist and psychogeriatrician, was asked in March 2006 to provide her opinion as to whether the deceased had testamentary capacity when she made her last will in August 2003. The documents with which she was provided included medical records, clinical notes, most of the affidavits in these proceedings and Arthur's verified statement and answer to interrogatories. Dr Reutens considered that the deceased's score on the RUDAS test administered in September 2003 should have been 22/30 not 23/30, and said that a score of 22 or less is suggestive of dementia. Dr Reutens concluded that in August 2003 the deceased was suffering from several disorders of the mind: depression; paranoid delusional disorder, which primarily consisted of Charles and his wife stealing from her; and cognitive impairment, which possibly reached the criteria for dementia of mild severity. As a result of those disorders, particularly the "probable" paranoid delusions (in relation to stolen items) she was unable to fully comprehend the true extent and nature of her estate and to accurately evaluate and discriminate between the relative strengths and weaknesses of the claims of her potential beneficiaries. On the other hand, I note the following question and answer in Dr Reuten's report: Q. Is it likely that as at August 2003 that any cognitive impairment was present which may have compromised the deceased's understanding of the nature of making a Will? A. No, it is very unlikely that such old knowledge (ie the nature of a will) is lost until the patient is in a very advanced stage of dementia. Mrs Szabo was not in an advanced state of dementia. 90 Dr Reutens provided a further report. There she said that she had seen the affidavit of Dr Rowland (see below) and now conceded that she was in error in stating in her first report that the deceased had failed the RUDAS test. Dr Reutens now conceded that the deceased scored 23/30, which would not categorise her as suffering from dementia - although Dr Reutens nevertheless added that she "might" still have had dementia or cognitive impairment. Dr Reutens said that she did not believe the deceased had testamentary capacity in August 2003 because her delusions concerning her son poisoned her affections towards him, impacting on her ability to accurately evaluate and discriminate between the relative strengths and weaknesses of the claims of her potential beneficiaries. Because the deceased believed that items that she had previously stated as having been sold were stolen from her, she was unable to fully comprehend the true extent and nature of her assets.

[107]

95 Katalin Nagy provided the deceased with almost daily home help services from October 2003 to January 2004. She is fluent in Hungarian. She said that she spent many entertaining hours chatting with the deceased in Hungarian. The deceased told her many interesting things about her earlier life in Hungary and how the family ended up in Australia. They discussed food and recipes. The deceased remembered the recipes to many Hungarian sweets and gave Ms Nagy hints and shortcuts for preparing traditional Hungarian food. The deceased exhibited a sense of humour. The deceased made herself understood in English. Her English speaking neighbours sometimes dropped in and they spoke together in English. Ms Nagy was not asked to translate. For Christmas 2003, the deceased insisted that she show Ms Nagy how to make a special Hungarian walnut Christmas cake that she wanted to make for Arthur. On numerous occasions Ms Nagy saw Arthur. He would come with groceries or medication, looked after the garden and do any jobs that were needed around the house. Arthur and Ms Nagy were in constant contact and regularly discussed his mother's needs. She saw Charles only once when he came to the door and roughly handed his mother a package without speaking to or looking at her. Ms Nagy was shocked that a son could be as cold and unfeeling as he was on this occasion. The deceased was visibly upset. The next morning she still seemed upset and Ms Nagy asked her if she wanted to talk about Charles' visit. The deceased told her that when Charles' father died, Charles found a large sum of money under the house, that she told him it should be split three ways between Charles, Arthur and her; that Charles said he did not want to give Arthur a share, and that she told Charles he must consider it a loan from Arthur. Over the years, she had asked Charles many times to repay the loan but he always refused. She was very unhappy and distressed as she thought it was not fair, after all Charles had five houses and owed her other money. The deceased told Ms Nagy that she saw Charles' wife wearing some jewellery that originally belonged to the deceased and that some jewellery had not been returned to her. Ms Nagy found the deceased to be mentally sharp and extremely alert. She appeared to be normal and mentally stable, spoke fluently and recalled details easily. She found the deceased's conversation interesting, stimulating and entertaining.