[2014] QCA 308
Perpetual Trustee Co Limited v Fairlie-Cunninghame (1993) 32 NSWLR 377
Re K's Statutory Will (2017) 96 NSWLR 69
Source
Original judgment source is linked above.
Catchwords
[2014] QCA 308
Perpetual Trustee Co Limited v Fairlie-Cunninghame (1993) 32 NSWLR 377
Re K's Statutory Will (2017) 96 NSWLR 69
Judgment (3 paragraphs)
[1]
Solicitors:
Plaintiff: Keypoint Law
Defendant: NSW Trustee
File Number(s): 2022/00237285
[2]
Judgment
By a summons filed on 11 August 2022 the plaintiff applies to the Court under Part 2.2 Division 2 (sections 18-26) of the Succession Act 2006 NSW for:
1. A grant under section 19 of the Act of leave to make an application for an order under section 18 of the Act in respect of a protected person (within the meaning of section 38 of the NSW Trustee and Guardian Act 2009 NSW), a person said to lack testamentary capacity;
2. An order under section 18 authorising a will to be made for the protected person; and
3. An order, under section 18, approving as a will for the protected person, an instrument which, if made, would appoint the defendant, the NSW Trustee (presently the protected person's financial manager by virtue of an order made by the NSW Civil and Administrative Tribunal (NCAT), in its Guardianship Division, on 14 September 2020, pursuant to the Guardianship Act 1987 NSW) as executor and leave the whole of the protected person's estate to the plaintiff (a registered nurse and neighbour of the protected person; presently the guardian of the protected person pursuant to an order made on 30 April 2020 and confirmed on 29 September 2020 by the Guardianship Division of NCAT).
The fact that a person is a "protected person" within the meaning of section 38 of the NSW Trustee and Guardian Act 2009 is not, of itself, proof of a lack of testamentary capacity: Perpetual Trustee Co Limited v Fairlie-Cunninghame (1993) 32 NSWLR 377. A person may be incapable of managing his or her affairs and still have the capacity necessary to make a will.
The protected person is a 92 year old widow on the verge of death. She is presently in palliative care at St Vincent's Hospital in Sydney. The evidence before the Court includes a short report dated 8 August 2022, from a doctor at the Hospital specialising in geriatric medicine, to the effect that she is an inpatient under his care "with delirium on background moderate dementia". Based on that diagnosis the report asserts that the protected person "currently does not have capacity to make any financial, medical and accommodation decisions nor ability to change her will".
The protected person's husband died in July 2020, aged 98 years, leaving a will dated 29 August 1999 which left the whole of his estate to the protected person.
On the evidence presently available, the protected person appears to have made a mirror will on 29 August 1999, leaving the whole of her estate to her husband, a will of no practical effect since his death.
The protected person's estate, including her inheritance under her late husband's will, has an estimated value of about $7.2 million.
The major asset of the estate is a property at North Bondi comprising (on the one title) the former family home of the protected person and her husband and an adjoining rental property.
The evidence presently before the Court establishes the following facts:
1. The protected person has no children of her own.
2. The husband of the protected person died without issue.
3. The protected person has no siblings.
4. The protected person's husband had one sibling, a sister now deceased.
5. The protected person made a will dated 29 August 1999 in terms that mirrored the will of her husband, of the same date, giving the whole of her estate to him.
6. On 7 February 2020, on the application of a neighbour, NCAT made interim financial management orders in favour of the NSW Trustee (for three months) in respect of both the protected person and her husband, and adjourned the neighbour's application for guardianship orders. Those orders were made on an application for the NSW Trustee to be appointed financial manager and for the Public Guardian to be appointed guardian.
7. On 30 April 2020 NCAT appointed the tenant of the protected person and her husband as the protected person's financial manager and, on the plaintiff's application, appointed her as guardian of the protected person for 12 months. From the time of the appointment of a financial manager for her (pursuant to the Guardianship Act 1987) the protected person's estate became subject to protected estate management under the NSW Trustee and Guardian Act 2009.
8. On 30 July 2020 the protected person's husband died.
9. In early September 2020 each of the plaintiff and the tenant applied to NCAT for a revocation of the protective orders made in favour of the other. On 7 September 2020 the plaintiff applied for a review of the financial management order made in favour of the tenant. On 9 or 10 September 2020, the tenant applied for a review of the guardianship order in favour of the plaintiff.
10. On 14 September 2020 NCAT revoked the financial management order made in favour of the tenant and committed management of the protected person's estate to the NSW Trustee. A reason for the change of manager was that the Tribunal perceived that the tenant had an unacceptable conflict between his interests (under a purported will dated 5 December 2018 of the protected person's husband) and his duty as the financial manager of the protected person's estate. The providence of the 2018 will was doubtful and, if valid, it operated in favour of the tenant as principal beneficiary and to the detriment of the protected person.
11. On 29 September 2020 NCAT confirmed the plaintiff's appointment (pursuant to orders made on 30 April 2020) as the protected person's guardian.
12. On 24 September 2021, at the nursing home where the protected person was then resident, in the presence of the plaintiff and a member of the staff of the nursing home, the protected person is said by the plaintiff to have executed a single page, handwritten document, dated 24 September 2021, in the nature of a will (ostensibly an "informal will" of the type that might be admitted to probate under section 8 of the Succession Act 2006) in which the protected person purported to appoint the NSW Trustee as her executor and to give her whole estate to the plaintiff. The document was signed by the protected person in the presence of the plaintiff and the nursing home staff member, but not signed by either of them. Their evidence is that the protected person dictated the informal will and the plaintiff wrote down precisely the words as dictated.
13. On 19 November 2021 the protected person is said by the plaintiff to have signed a single page document of that date (according to the plaintiff, dictated by the protected person and written by her as dictated) disclaiming any intention that the tenant have any interest in her estate.
14. On 29 July 2022 Hallen J approved (in proceedings numbered 2021/00238391 in the Probate List) a settlement which provided for the NSW Trustee to be granted letters of administration in the estate of the protected person's husband (with his will dated 29 August 1999 attached), passing over the disputed will of 5 December 2018, but making provision for a payment of $250,000 to the tenant, who agreed to vacate the rental property that adjoins the protected person's former family home. A formal grant has yet to issue from the Registry pending resolution of a requisition process.
15. If the protected person dies without a court-authorised will (in the vernacular, a "statutory will") and the informal will dated 24 September 2021 is not admitted to probate, the likelihood is that the protected person will die intestate and that, under Chapter 4 of the Succession Act, her estate will pass to the State for want of a beneficiary.
On the evidence before the Court, as a neighbour of the protected person, the plaintiff was a good friend to the protected person before the protected person became a resident of a nursing home, and she has continued as a good friend since that time.
As evidenced by the course of proceedings in NCAT, the plaintiff actively resisted what she (on reasonable grounds) perceived to be attempts by the protected person's tenant, for his own personal benefit, to assume control of the affairs of the protected person with a view to acquisition of the property of the protected person and her husband at North Bondi.
Although it can be accepted that the plaintiff was, and remains, genuinely interested in the welfare of the protected person as a paramount consideration, the evidence lends itself to a finding that she may also have been active in her own interests.
On 8 October 2020 (shortly after NCAT appointed the NSW Trustee to manage the protected person's estate instead of the protected person's tenant and, on a separate occasion, confirmed the plaintiff's appointment as the protected person's guardian) the plaintiff made a representation to the NSW Trustee, in its capacity as the protected person's financial manager, for funding to enable the protected person to make a will. The representation was based on a statement that the protected person had requested that she make a will following the death of her husband in July 2020.
The NSW Trustee approved funding. That led to the plaintiff, on notice to the NSW Trustee, retaining solicitors (Bartier Perry) for the purpose of taking instructions from the protected person (then a nursing home resident) for the preparation of a will.
Between 19 October 2020 and 16 February 2021 or thereabouts Bartier Perry made several unsuccessful attempts to persuade the protected person to execute a will. She consistently declined, even when warned that her will dated 29 August 1999 was no longer effective and that, if she dies intestate, her estate could pass to the State. Bartier Perry appears never to have obtained instructions to prepare a will in any terms.
File notes in the Bartier Perry file record various statements by the protected person to the effect that, after the death of her husband, she had no family and did not know to whom she might leave her estate. At one point (on 2 December 2020) she said that she did not know whether she wanted to leave anything to her neighbours and (in a separate comment) that she did not know who she could "trust".
The file notes (for example, on 1 and 4 December 2020) record occasional interaction between the plaintiff and the protected person as the plaintiff encouraged the protected person to make a will. They also record (for example, on 22 October 2020 and 4 November 2020) a growing antagonism by the protected person towards her tenant, a state of mind consistent with her discovery (no later than 14 September 2020) of the will dated 5 December 2018 that the tenant had, without notice to her, arranged for her husband to execute in his favour.
The file notes record that on various occasions (including 22 October 2020 and 3 and 4 November 2020) the protected person had drawn to her attention the possibility that her intestate estate would be likely to pass to the State. A fair inference from the various file notes read together is that, although the protected person did not want this to happen, she was not greatly troubled by it. When pressed on 4 November 2020 to make a will to prevent her estate passing to "the government" she is recorded to have said, verbatim: "I'll do something when I feel up to it and if it's too late then it can just go to the government."
A file note dated 22 October 2020 suggests that the protected person had turned her mind to the possibility of testamentary gifts to charities, but could not think of any charity she wanted to name as a beneficiary.
A file note dated 27 October 2020 records the following exchange between the Bartier Perry solicitor and the protected person:
"I [the solicitor] asked her [the protected person] if there was anyone who might expect to receive from her estate and she said jokingly 'everyone' implying that people wanting to take [sic]. But she said she has no other family and she can't think of anyone else at the moment.
She said that she still needs to think about it. I explained to her the importance of having an up to date will in place because if she doesn't, her wishes won't be met and she said 'yes it will go to the government then, I realise that'. I said given her age it is important that she looks into this sooner rather than later in case she passes away or loses capacity. She said she understands that her wishes 'won't be carried out' and that 'I wish I could say to you I want this, this and this, but I just can't as I don't know.'"
The same file note contains passing references to both the plaintiff and the protected person's tenant. It also records a statement by the solicitor to the effect that, although, in his assessment, the protected person had testamentary capacity she appeared still to be grieving the loss of her husband and, for that reason, unable to think about things like a will for herself.
About seven months after Bartier Perry closed their file the plaintiff says (and she is corroborated in this by a member of the staff of the protected person's nursing home) that the protected person dictated, and she transcribed, the handwritten informal will that purports to leave the whole of the protected person's estate to the plaintiff.
If that is correct, why is a statutory will necessary? And what would be the effect of the Court authorising the making of a statutory will to the same effect as the informal will? There is no apparent necessity for a statutory will save, possibly, to minimise opportunities for a competing claimant or, more likely, in this case, the State to challenge the "validity" of the informal will.
Upon an application for admission of the informal will to probate, the application for grant of representation would have to be advertised to the public at large whereas, in the context of an urgent application for a statutory will, the practical reality is that the means for advertising the application are confined by the nature and timing of the application.
Evidence adduced in support of the application for a statutory will includes evidence corroborating the plaintiff's evidence that she has a close relationship with the protected person and has for some time rendered assistance to the protected person.
The tenor of this evidence is that, in the absence of any competing claims on the bounty of the protected person, the plaintiff would be a worthy recipient of the protected person's estate. That is not, however, the test to be applied by the Court upon assessment of an application for a statutory will.
Section 18(1) of the Succession Act provides, inter alia, that the Court "may, on application by any person, make an order authorising" a will to be made "in specific terms approved by the Court, on behalf of the person who lacks testamentary capacity".
Section 19(1) of the Act provides that "[a] person must obtain the leave of the Court to make an application to the Court for an order under section 18".
Section19(2) provides that "[in] applying for leave, the person must (unless the Court otherwise directs) give the Court" information on a range of topics.
Section 20(1) provides that on hearing an application for leave the Court may:
1. give leave and allow the application for leave to proceed as an application for an order under section 18; and
2. if satisfied of the matters set out in section 22, make the order.
Section 22 is of critical importance. It is in the following terms:
"22 Court must be satisfied about certain matters
The Court must refuse leave to make an application for an order under section 18 unless the Court is satisfied that -
(a) there is reason to believe that the person in relation to whom the order is sought is, or is reasonably likely to be, incapable of making a will, and
(b) the proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity, and
(c) it is or may be appropriate for the order to be made, and
(d) the applicant for leave is an appropriate person to make the application, and
(e) adequate steps have been taken to allow representation, as the Court considers appropriate, of persons with a legitimate 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 the order is sought."
Section 21 provides that, in considering an application for an order under section 18, the Court may have regard to any information given to it in support of an application for leave and may inform itself of any other matter in any manner it sees fit, not being bound by the rules of evidence.
Sections 23-26 inclusive deal with topics not presently material: a requirement that a statutory will be signed by a registrar of the Court and sealed with the seal of the Court (section 23); arrangements for retention of a statutory will (section 24); separate representation of a person to whom a statutory will is sought to be made (section 25); and recognition of statutory wills made outside NSW (section 26).
Adopting the reasoning of the Queensland Court of Appeal in GAU v GAV [2016] 1 Qd R 1; [2014] QCA 308 at [39]-[52], as adapted to NSW in Re K's Statutory Will (2017) 96 NSWLR 69; [2017] NSWSC 1711 at [21], I make the following observations about the requirement in section 19(1) of the Succession Act that there be a grant of leave to make a statutory will application:
1. The leave requirement is a composite of requirement for leave in section 19(1) and the constraint on granting leave in section 22.
2. There is nothing in the text or context of section 22 that limits the role of the leave application to screening out vexatious or un-meritorious claims.
3. The power to grant leave is given to the Court to be exercised, or not exercised, at discretion, but in accordance with the provisions of the Act. Section 22 imposes a substantial constraint upon the exercise of the discretionary power to grant leave. The Court may exercise the power to grant leave only if it is satisfied of each of the five matters listed in the section. Unless so satisfied, the Court may not grant leave.
4. The discretionary power to grant leave is distinctly separate from the discretionary power conferred under section 18.
5. The scope of section 22(c) is to be discerned against that background and by reference to the words of the provision itself. The Court needs to be satisfied that an order under section 18 is, or may be, appropriate, and no more. The Court need not be satisfied that such an order is appropriate; satisfaction that it may be appropriate will suffice.
6. Both discretionary powers (that is, the powers conferred by section 18 and section 19) are contained in a Division of the Act which confers a jurisdiction which is protective in nature and is informed by the protective jurisdiction historically exercised by the Court over persons without testamentary capacity; that jurisdiction is purposive, the purpose being, at its highest level of abstraction, protection of a person in need of protection. So grounded, the jurisdiction is broad in scope and flexible in nature. Its guiding principle is that whatever is done, or not done, for or on behalf of the person in need of protection must be for the benefit, and in the interests, of that person.
7. The Court undertakes the inquiry with regard to the information provided to it pursuant to section 19 in circumstances in which that information is designed to allow the Court to be placed in a position to make broad evaluative judgements about the personal, and family, circumstances of the person in respect of whom a will is sought to be made.
8. The assessment made at the leave stage of the appropriateness of making an order under section 18 is made objectively with reference to the matters given to the Court pursuant to section 19, and such other matters as the Court considers relevant. Importantly, it is undertaken with conscious regard for the fact that that making an order under section 18 is an exercise of jurisdiction which is protective in nature and informed by what is for the benefit, and an interest, of the person who requires protection.
But for the "informal will" dated 24 September 2021 upon which the plaintiff relies as evidence of the protected person's testamentary intentions in her favour, there is no evidence to support a finding that the statutory will proposed by the plaintiff (to paraphrase section 22(b)) is, or is reasonably likely to be, one that would have been made by the protected person if she had testamentary capacity.
The contents of the Bartier Perry file confirm a reluctance on the part of the protected person to make any will, including a will that favoured a neighbour such as the plaintiff, and a preparedness to die intestate even if that meant that "the Government" took the benefit of her estate.
At my invitation, a solicitor from the NSW Trustee on 12 August 2022 attended upon the protected person in hospital to see whether she was capable of engagement in conversation about her estate. Not much can be taken from the transcript of that attendance because the protected person was physically too weak to engage actively. Nevertheless, the transcript includes the following exchange (edited to omit the protected person's name):
"Solicitor: … Do you have any wishes with regard to your estate?
Protected person: Appeared confused - non-responsive.
Solicitor: Your guardian Patricia Wills is applying to the Court to have a will made for you.
Protected person: Non-responsive.
Solicitor: Do you wish for Ms Wills to receive your estate?
Protected person: Opens eyes.
No … um … well I am not sure …
Solicitor: Without a will, your estate might pass to the Crown if there are no relatives.
Protected person: No answer - eyes remain closed.
Solicitor: Can you hear me now …?
Protected person: No answer.
Solicitor: Can you tell me who you wish to leave your estate to?
Protected person: Opens eyes. Can I leave it to you?
By this time [the protected person] looks increasingly
confused.
Solicitor: No … I'm from NSW Trustee.
After a few minutes
Solicitor: Ok … I will go now.
Protected person: Partially opens eyes.
Ok love."
For all the confusion displayed by the protected person during the NSW Trustee's solicitor's interview with her, she appears to have had some consciousness of what was being asked of her, and her responses were consistent with her disinclination to make a will when invited by Bartier Perry to do so.
The medical report of St Vincent's Hospital dated 8 August 2022 is consistent with the possibility that any "current" incapacity to make a will discerned at that time was a function of the protected person's delirium rather than an immutable lack of testamentary capacity. Nevertheless, it is sufficient to satisfy me that (in terms of section 22(a) of the Succession Act) "there is reason to believe that" the protected person "is, or is reasonably likely to be, incapable of making a will".
That does not mean, however, that there is no utility in taking into consideration any "current" expression of her views. One of the topics required, by section 19(2)(e) of the Succession Act, to be addressed by an applicant for leave to apply for a statutory will is "any evidence available to the applicant of the … wishes" of the person "on whose behalf" (to paraphrase section 18(1)) a court-authorised will is sought to be made.
Viewing the evidence as a whole, I am not satisfied (as section 22(b) of the Succession Act requires that I must be) that the proposed statutory will "is, or is reasonably likely to be", one that would have been made by the protected person if she had testamentary capacity. Over a substantial period of time (albeit several months before she has said to have executed an informal will) she deliberately resisted invitations made to her by Bartier Perry and the plaintiff to make a will. Despite her weakened state, there remains an echo of that resistance in her conversation with the solicitor from the office of the NSW Trustee on 12 August 2022.
Whatever may have been her capacity and state of mind on 24 September 2021 (when the plaintiff contends that she dictated and signed an informal will), I am not satisfied that, if possessed of testamentary capacity, she would now, or at any foreseeable future time, make a will leaving her entire estate to the plaintiff.
Nor am I satisfied that it "is or may be appropriate" (within the meaning of section 22(c)) for an order to be made authorising the proposed statutory will in circumstances in which the forensic object of the application for a statutory will, viewed objectively, is to pre-empt any challenge to the informal will ostensibly made in favour of the plaintiff.
The present proceedings are not an appropriate vehicle for testing the "validity" of the informal will. The occasion for that is on an application for its admission to probate. The evidence relied upon by the plaintiff in support of the informal will has not been tested forensically in the current proceedings in circumstances in which there is no contradictor with an interest in objecting to the instrument, and the time frame within which the Court has been required to make a decision has not permitted full inquiries to be made. The appropriate time to test the provenance of the informal will is upon an application for its admission to probate if and when the protected person dies.
In the meantime, the absence of a representative of the State (the State having been given no notice of the proceedings) is, by virtue of section 22(e) of the Succession Act, an impediment to the plaintiff's application for a grant of leave under section 19. On the evidence currently before the Court, if the protected person dies intestate, her estate is likely to pass to the State under section 136 of the Evidence Act 1995 NSW for want of any person entitled to it under Chapter 4 of the Act.
In my opinion, the State is a "person with a legitimate interest" in the plaintiff's application within the meaning of section 22(e). Section 21 of the Interpretation Act 1987 NSW defines a "person" as including a "body politic". Section 136 of the Succession Act recognises the State's interest in an intestate estate to which no other person is entitled. In a case such as the present, there is also a public interest in the State being available as a contradictor.
If, upon the death of the protected person, the informal will is propounded, it may be necessary or appropriate that the State be given specific notice of the application for probate or administration. With the benefit of specific notice, the State might decide not to challenge admission of the will to probate. It might, on the other hand, take the view that it should put the plaintiff to proof of her contention that the informal will is the last expression of testamentary intentions of a free and capable testatrix. Such an approach might be thought to be in the public interest because (by analogy with principles governing proof of a formal will in probate) the informal will was prepared and executed in circumstances sufficiently "suspicious" to require affirmative proof (such as section 8 of the Succession Act implicitly requires in any event) that the protected person "knew and approved" the contents of the instrument as a will. At all material times, the plaintiff was the protected person's guardian and, as a neighbour, a person who provided care and assistance for the protected person. She was in a fiduciary relationship with the protected person.
Even if the protected person is found to have died intestate, leaving no person entitled to her intestate estate, it would be open to the plaintiff to make an application to the State (under section 137 of the Succession Act) for a waiver of the State's rights in her favour as a person who claims to have "a just or moral claim on the intestate".
Be that as it may, in my opinion, it is not appropriate that the Court grant leave to the plaintiff to apply for a statutory will in terms which, in substance, do no more or less than legitimise an informal will which she says the protected person executed in her favour. It is not apparent to me that the plaintiff's application in any material way is for the benefit, and in the interests, of the protected person when viewed in light of the informal will and her anticipated death.
I am not satisfied of the matters for which section 22(b), (c) and (e) provide. The plaintiff's application for leave to apply for a statutory will must be refused. Accordingly, I propose to order that the summons be dismissed.
As the NSW Trustee (in its capacity as financial manager of the protected person) authorised the plaintiff's application to the Court, I propose to order, further, that the costs of both parties be paid out of the estate of the protected person on the indemnity basis. This is in conformity with the practice, upon an exercise of protective jurisdiction, that orders for costs are made by reference to the question of what is the proper order in all the circumstances of the case and not, routinely, by reference to the ordinary rule of civil litigation that costs follow the event.
Subject to allowing interested persons an opportunity to object, I propose to order that the exhibits in evidence before the Court be entrusted to the NSW Trustee (in its capacity as financial manager of the protected person and as the executor named in her informal will) for safekeeping. They are likely to be required if an application for admission of the informal will to probate is made and, more especially, if contested.
Orders and notations to the following effect are made in disposition of the proceedings (with editorial adaption to anonymize the protected person):
NOTE the summons filed on 11 August 2022.
NOTE the affidavits in support of the summons.
ORDER that the documents marked for identification as MFI 2, 3, 4, 5, 6 and 7 be admitted into evidence as exhibits bearing the same identifiers.
NOTE the orders made by the Court in disposition of the proceedings numbered 2021/00238391.
NOTE the written submissions of the plaintiff respectively marked for identification as MFI P1 and MFI P8.
ORDER that the summons be dismissed.
ORDER that the costs of the proceedings be paid out of the estate of [the protected person] on the indemnity basis.
ORDER, subject to further order, that the exhibits be delivered to the NSW Trustee (as the financial manager of [the protected person] and as the executor named in the testamentary document dated 24 September 2021) for safe keeping.
RESERVE to the entities who produced documents in response to orders made on 11 August 2022 liberty to apply for the return to them of documents produced to the Court by them.
ORDER that the NSW Trustee provide a copy of these orders to those entities.
ORDER that these orders be entered forthwith.
[3]
Amendments
18 August 2022 - Typographical corrections at [45] and [52]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 August 2022