A Daughter’s Application

[2023] NSWSC 219

Supreme Court

New South Wales

Medium Neutral Citation:

A Daughter’s Application [2023] NSWSC 219

Hearing dates:

31 January 2023

Date of orders:

31 January 2023

Decision date:

15 March 2023

Jurisdiction:

Equity - Duty List

Before:

Slattery J

Decision:

Leave granted to make a statutory will under the Succession Act 2006. Orders made approving the terms of the will set out in Annexure A [not published].

Catchwords:

EQUITY – Statutory wills, Succession Act, s 18, 19, 20, 22 – loss of capacity – beneficiaries – urgent application in Equity duty list seeking leave to apply for an order authorising a will to be made on behalf of a person who is intestate and who it is contended lacks testamentary capacity (“the proposed testator”) – the plaintiff is the daughter of the proposed testator – under the proposed will the plaintiff would receive the largest share of the estate, with the balance divided between the proposed testator’s husband and her grandchildren – whether the proposed will is, or is reasonably likely, to be one that would be made by the proposed testator, if she had capacity – whether the information required to be provided to the Court by Succession Act, s 22 for leave to make the application has been satisfied – whether the Court should exercise the jurisdiction conferred by Succession Act 2006, s 18.

Legislation Cited:

Succession Act 2006, ss 18-26

Cases Cited:

Banks v Foodfellow (1870) LR 5 QB 549

Re Fenwick (2009) 76 NSWLR 22

Small v Phillips (No 2) [2019] NSWCA 268

Category:

Consequential orders

Parties:

Plaintiff: Daughter
First defendant: Mother
Second defendant: Father

Representation:

Counsel:
Plaintiff: H. Morrison

Solicitors:
Plaintiff: M. Henley, HWL Ebsworth Lawyers
Related party: J. McCarthy for NSW Trustee and Guardian
Related party: J. Kosmin, Kosmin & Associates

File Number(s):

2023/11985

Publication restriction:

No

Judgment

1. By her Summons filed 12 January 2023, the plaintiff applies for orders that the Court make a statutory will for her mother. The evidence satisfies the Court that the plaintiff’s mother lacks capacity to make a will. Although this proceeding is not brought in the Court’s protective jurisdiction, the Court will not identify any family members but will describe them all by reference to their relationship to the plaintiff’s mother.

2. The daughter’s application was brought under Division 2 of Pt 2.2 of the Succession Act2006 (“the Act”) on an urgent basis in the Equity duty list. The mother’s health has rapidly deteriorated, and her life is at risk. The mother had never made a will and absent any statutory will being made for her, she would die intestate, with her estate passing entirely to her husband.

3. The daughter proposes that a statutory will be made in the form that provides for the whole of the mother’s estate to pass to her trustee to be divided in shares, with:

1. the plaintiff/daughter receiving 40% of the net estate;

2. the mother’s husband receiving 15% of the net estate; and

3. each of the daughter’s three children, the mother’s grandchildren, receiving 15% of the net estate.

4. The Court is satisfied of the matters required by s 22 of the Act and has decided to approve the application under s 18 of the Act for the following reasons. These reasons commence with a factual narrative which represents the Court’s findings based on the affidavit evidence of the daughter, the husband, the daughter’s solicitor, Ms Jennifer Vuu, and medical evidence.

5. The hearing of this matter took place in the duty list on 31 January 2023. The Court had the benefit of an efficiently presented application which allowed the Court to make orders that same day. The Court indicated that it would publish reasons later. These are those reasons. The plaintiff was represented on 31 January by Mr H Morrison of counsel, instructed by Mr M Henley of HWL Ebsworth Lawyers.

From the People’s Republic of China to Australia

6. The mother was born 1954 and is 68 years of age. She married her husband in China in 1980, and had one child in 1981, the plaintiff.

7. The mother practised as an accountant in the People’s Republic of China (“PRC”) until 1981 but gave up her career to care for the plaintiff and allow her husband to devote time to his business and to support that business with her accounting skills.

8. In 1998, the mother and her husband decided to send the plaintiff to Australia to further her education and give her the best opportunity in life that they could provide. The plaintiff was then 16 years old and in year 10 in the PRC. She commenced her studies in year 11 in Australia. From the time the daughter relocated to Australia, the mother visited Australia at least once a year for periods of approximately three months to spend time with her.

The Mother’s Relationship with the Plaintiff

9. The mother dedicated herself to providing opportunities for advancement in life to the daughter, both in material terms and in emotional and family support. The mother’s support to the daughter and in turn to the grandchildren has continued throughout the daughter’s life. It is clear from the evidence that the mother and the plaintiff have a deep connection and affection for one another. The plaintiff says, and the Court accepts, that she and her mother were always very close during her childhood, having been raised by her for 16 years, and they always remained in close touch whilst she was studying and living in Australia.

10. When the plaintiff relocated to Australia, she recalls suffering because she was away from her mother. She remembers that her mother would often cry when they spoke over the telephone, as she missed her dearly. On more than one of these occasions the mother told the plaintiff on the telephone that “although we [the mother and the husband, the plaintiff’s parents] are not by your side, we fully support you. If you have any problems, please let us know and we will face it together”.

11. Once the plaintiff/daughter completed her senior schooling, she attended the University of New South Wales to commence tertiary studies in computer science, graduating in 2004. The daughter continued her studies and completed a master’s degree in the same field at the University of Technology in 2011.

12. The plaintiff attributes her love for reading and learning to her mother’s encouragement to pursue a good education. Throughout the plaintiff’s study abroad, her mother was always caring, supportive and in touch by telephone, email, and other means. The mother was also generous in her financial support to her daughter, including for living costs, education costs, and both purchasing and contributing to real property.

13. Once the daughter entered the workforce in 2005, her mother would encourage her to “eat good, nutritious food” so she could “have energy to do good work”, “work hard and have good work ethic”. The same year, the mother purchased the plaintiff a two-bedroom apartment close to the inner city for $382,000, so her daughter could be closer to her workplace. At the time of the purchase, the mother said to the plaintiff, “we wanted to buy this apartment for you, and we feel comfortable that you have your own home while living overseas”.

14. The mother had close focus on plans for a future family life which closely connected the mother in PRC with her daughter in Australia. The mother told the plaintiff that she wished that the family should live together again as much as possible, once the plaintiff was married and had children. The mother wanted to assist the plaintiff with the challenges of caring for children. Taking a long view of a culturally cultivated family future, the mother bought a piano worth $20,000 as a gift to her unborn, future grandchildren, even before the plaintiff had met her own husband. And the mother hired a private piano tutor to teach her daughter to play, so the daughter could teach the mother’s future grandchildren the piano.

15. In 2008, the plaintiff’s mother bought the plaintiff a five-bedroom property in Hurstville for $1,080,000. The mother paid the full purchase price for this property. In 2011, when the plaintiff married, her mother paid for all her $40,000 in wedding expenses and gifted her an additional nuptial gift of $20,000.

16. In 2013, after the birth of the mother’s first grandchild, the mother bought the plaintiff a third property in Chatswood for $1,740,000, meeting the full cost of the purchase. The mother visited Australia for 11 months to assist the plaintiff care for the first grandchild.

17. The plaintiff recalls that the mother cared passionately about family and the prospect of leaving a legacy for her grandchildren to be passed down through the generations. When the mother’s second grandchild was born in 2014, she and her husband purchased a one-kilogram limited-edition Chinese zodiac gold bar in China for $70,000.00. Since then, the mother has purchased eight Chinese zodiac gold bars of similar type. The mother said to the plaintiff that she wished to purchase all 12 Chinese zodiacs to pass onto the plaintiff’s children and to future generations.

18. In 2015, the mother encouraged the plaintiff to purchase more real property in Sydney. She assisted the plaintiff to acquire a property in Ultimo, funding the purchase deposit of $400,000. The same year on one of the mother’s biannual visits to Australia, she researched the Australian secondary education system, and the differences between public, private and selective schooling in Australia.

19. The plaintiff’s mother encouraged the plaintiff to purchase yet another property but this time within an area close to a private school, where the plaintiff wanted to send her children. The mother promised to pay for her grandchildren’s tuition fees right through until their graduation from university. After deliberating over the best school for her children, the plaintiff purchased a property in the northern Sydney suburb of Turramurra, as the mother took the view that the area was close to high-quality private schools. The mother paid the deposit of $555,000 for this purchase. The mother and her husband have now paid for their grandchildren’s entire future private school fees in advance.

20. In 2016, the mother helped the plaintiff purchase a sixth property in Ultimo for investment purposes, funding the full purchase price of $1,550,000.00.

The Mother’s Declining Health

21. In 2013, age of 59, the mother was diagnosed with early signs of dementia. At the time of the diagnosis, the mother was living in the PRC and was unable to travel to Australia unaccompanied. She ultimately came to Australia with the assistance of her husband, as she was determined to spend time with the plaintiff and her grandchildren, whilst she could.

22. The plaintiff says, and the Court accepts, that she had always considered her mother to be the backbone of their happy family unit and that her mother had been extraordinarily generous in her support to the plaintiff throughout her life. So, when the mother’s health began to rapidly deteriorate in 2017 the plaintiff strongly advocated to her father for the mother to relocate to Australia permanently so that the plaintiff could care for her.

23. This plan was carried out. In March 2018, the mother moved into the plaintiff’s home in Chatswood, where she presently lives. The plaintiff recalls how joyful her mother was on her arrival in Australia, seeing the plaintiff, the plaintiff’s children and meeting her third grandchild, for the first time. Sadly, the mother’s dementia worsened soon after her arrival. The plaintiff soon became the mother’s guardian and financial manager of her mother’s estate pursuant to orders made by the NSW Civil and Administrative Tribunal.

24. The plaintiff’s care for her mother now consumes most of her days. The plaintiff dedicates 70 hours a week to caring for her mother as her primary carer. This tiring vocation restricts the plaintiff from working in her profession.

25. The evidence of the mother’s general practitioner, Dr Edmund Wong She is that the mother suffers from advanced Alzheimer’s dementia and that her cognitive impairment is progressively worsening. The Court accepts all Dr Wong’s evidence as to the mother’s present health and capacity.

26. The mother suffers from epilepsy, type 2 diabetes, hypertension, hypothyroidism, hypercholesterolaemia and depression. She is unable to undertake basic activities of daily living and the plaintiff must manage all of her high-level needs, including arranging and accompanying her to all her medical and specialist appointments, administering her medication, and assisting her with mobility and personal hygiene. This care extends to cooking, feeding, bathing, toileting and dressing her mother daily. Her capacity for verbal and non-verbal communication is poor.

27. On 30 December 2022, the mother was admitted to the emergency department of Royal North Shore Hospital, exhibiting symptoms of fever. She was discharged with medication the same day for a suspected infection. On 2 January 2023, the plaintiff called an ambulance for her mother. She was displaying seizure activity, a high pulse rate and high blood sugar levels. The mother was admitted to and subsequently discharged from the Royal North Shore Hospital on 5 January 2023 after several days being cared for on the ward.

28. The daughter has observed changes in her mother’s behaviour and habits since her discharge on 5 January 2023. Her appetite has decreased as has her water intake, and hours of sleep. These symptoms, in conjunction with the mother’s existing medical conditions are the reason for the plaintiff’s urgent application to the Court.

29. The mother has never expressly stated any testamentary wishes to her daughter. The mother’s husband in his affidavit states that the mother had said to him, in Mandarin and translated to the English language, that “when I pass, I want all that I own to go to [the daughter] and to her children”. Neither the plaintiff, the mother’s husband, the family’s professional advisers nor the NSW Trustee & Guardian are aware of the existence of any will made by the mother. Some of the evidence suggests that in Chinese culture will making is not a universally accepted convention.

30. Dr Wong She is of the opinion that the mother does not have and is unlikely to ever regain requisite capacity to make a will. Further, Dr Chanaka Wijeratne, a Consultant Psychiatrist who specialises in neurogenerative disorders and severe mood disorders, gives the opinion in a report of 13 January 2023, and following the legal test regarding testamentary capacity described in Banks v Goodfellow (1870) LR 5 QB 549 [565]:

1. the mother is not capable of comprehending the nature of the act of making a will;

2. the mother is not capable of comprehending the effect of a will;

3. the mother is not capable of comprehending the consequences in relation to her ownership in certain properties that she owns as a joint tenant if she predeceases her husband, contrasted with the situation where her husband predeceases the mother;

4. the mother is not capable of comprehending and appreciating the potential beneficiaries who have respective claims on her estate;

5. the mother is not capable of reflecting upon and weighing up or assessing the respective claims of the potential beneficiaries on her estate;

6. the antidepressant and the antiepileptic medication being administered by the mother may further impair the mother’s cognition and therefore testamentary capacity; and

7. the mother’s inability to eat and drink has resulted in dehydration and subsequent elevation of her serum sodium level. These additional factors may exacerbate her sensorium.

31. If the mother dies intestate, and is survived by her husband, the plaintiff and the grandchildren, the mother’s estate will pass to her husband under the statutory rules of intestacy in New South Wales.

The Mother’s Estate

32. The most recent private manager accounts approved by NSW Trustee disclose the following assets in the mother’s estate as of 2 September 2022:

1. [address not published] Ultimo property - 50% interest as joint tenant, valued at $1,450,000;

2. [address not published] Chatswood - 20% interest as a tenant in common, valued at $860,000;

3. [address not published] Castlereagh Street, Sydney - 50% interest as a tenant in common, valued at $1,100,000.

4. [address not published] Pitt Street, Sydney - 50% interest as a tenant in common, valued at $425,000;

5. [address not published] Hurstville NSW 2220 - 33.3% interest as a tenant in common, valued at $2,550,000;

6. Commonwealth Bank Account - Joint - $41.79.

33. The mother is reported to received rental income of $45,728 per annum from these properties.

Terms of the Proposed Will

34. The will the plaintiff proposes appoints the plaintiff as executor with substitutionary appointments to her nephew and accountant. It does not contain any specific gifts or legacies. It gives the whole of the mother’s estate to her trustee to be divided in shares, with:

1. the plaintiff receiving 40% of the net estate;

2. the mother’s husband receiving 15% of the net estate; and

3. each of the three grandchildren receiving 15% of the net estate;

35. The proposed will contains various substitutionary provisions and some standard trustee powers and provisions. It is not necessary to set out in detail any of these provisions beyond the short description.

Applicable Legal Principles

36. Part 2.2, Division 2 of the Act, makes provision for Court authorised wills (otherwise known as “statutory wills”) for persons who do not have testamentary capacity.

37. Section 18 of the Act empowers the Court, on application by any person, to make an order authorising a will to be made, or a will to be altered, in specific terms approved by the Court, on behalf of a person who lacks testamentary capacity. A person in respect of whom an order is sought must be alive when the application is made: s 18(3).

38. Section 19 of the Act provides that a person must obtain leave of the Court to bring an application for a statutory will. Section 19(2) lists the information that needs to be provided to the Court in support of an application for a grant of leave.

1. 19(2)(a) – written statement of the general nature of the application and the reasons for making it

2. 19(2)(b) – evidence of lack of testamentary capacity

3. 19(2)(c) – estimate of the size and character of the estate

4. 19(2)(d) – draft proposed will

5. 19(2)(e) - evidence of the person’s wishes

6. 19(2)(f) – likelihood of regaining testamentary capacity

7. 19(2)(g) – previous wills

8. 19(2)(h) – persons entitled on intestacy

9. 19(2)(i) – possible family provision claims

10. 19(2)(j) – persons for whom provision might be expected to be made

11. 19(2)(k) – evidence of any charitable gifts that might be expected to be made

39. All the s 19(2) information has been provided to the Court’s satisfaction in these proceedings. The narrative above covers that material. There is no evidence of any family provision claims that might be made against the mother’s estate. The question of charitable gifts is dealt with below.

40. The question of leave and the substantive question about the making of a will are typically heard simultaneously, as is provided for in the Act, s 20(1). But the determination is a two-staged procedure, and the question of leave and the question of whether an order should be made are different questions: see Small v Phillips (No 2) [2019] NSWCA 268. Whilst the Court “may” make an order (s 18(1)) and “may” grant leave (s 20(1)), the s 22 factors must be met as a prerequisite to any grant of leave: Small v Phillips (No 2) [2019] NSWCA 268 at [179].

41. Section 22 of the Act requires that the Court refuse leave to make an application for an order under s 18, unless the Court is satisfied of the following matters:

1. 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

2. 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

1. it is or may be appropriate for the order to be made, and

2. the applicant for leave is an appropriate person to make the application, and

3. 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.

42. The principles that apply in the exercise of the Court’s discretion under Part 2.2, Division 2 of the Act are well established and are discussed in Re Fenwick (2009) 76 NSWLR 22; [2009] NSWSC 530 and Small v Phillips (No 2) [2019] NSWCA 268 and need no further elaboration in these reasons.

Consideration

43. Section 22(a) of the Act is satisfied. The medical evidence confirms that there is reason to believe the mother is presently incapable of making a will. This conclusion is well supported by the evidence of Dr Wong and Dr Wijeratne. It is also supported by the mother’s recent medical history including her admission to Royal North Shore Hospital commencing on 30 December and her decline since then. There seems no realistic possibility that she will become capable of making a will based on her medical history.

44. Section 22(b) of the Act is also satisfied. The proposed will is reasonably likely to be one that would have been made by the mother, if she had testamentary capacity. The will is well balanced to reflect the differing family claims upon the mother’s testamentary bounty.

45. First, the strong bond that exists between the plaintiff and her mother is clearly demonstrated on the evidence. A substantial bequest, leaving 40 per cent of the estate for the plaintiff is appropriate to reflect that strong primary bond.

46. Next, as to the mother’s husband, a bequest of 15 per cent of the estate is appropriate. At first that may seem to be a relatively small portion of the estate. But the husband’s affidavit evidence shows that he is independently wealthy and has substantial assets. His wealth should be considered as a relevant factor in deciding an appropriate provision him. It is sufficient for present purposes to say that the evidence supports the conclusion that his own estate is considerably larger than that of the mother. He has no financial need of a bequest from her, other than in demonstration of her affection for him. By every account in the evidence the mother and her husband have a warm and affectionate relationship. Taking all those circumstances together, a gift of 15 per cent of the mother’s net estate to her husband is appropriate.

47. Finally, the gift to each of the mother’s three grandchildren of 15 per cent of the net estate, adding up to a total of 45 per cent of the estate and representing the balance of the estate after 55 per cent of it is given to the plaintiff and the mother’s husband, is appropriate in the circumstances.

48. The mother had a close, warm, and affectionate relationship with each of her grandchildren. She wanted the best for the grandchildren throughout their lives. The themes of her discussions with the plaintiff and her grandchildren, involved her giving them something to set themselves up in life. And there is no reason to divide the remaining 45 per cent of the mother’s estate other than equally among her three grandchildren. There is no suggestion that the mother had any intention to benefit one grandchild over another.

49. Moreover, the allocation of the remaining 45 per cent of the estate wholly to the grandchildren is appropriate, as the evidence demonstrates that the mother had no other clearly articulated interests in charitable or other causes. There is therefore no compelling reason to consider that the mother would have had a belief that her estate should be given outside the family. The provision of the disposition of the whole of her estate in the manner proposed is therefore appropriate.

50. The Court is also satisfied in relation to s 22(c), (d) and (e) of the Act. The circumstances clearly make this an appropriate case for an order to be made. The plaintiff is the logical person to make the application. The Court is satisfied that adequate steps have been taken to allow the representation of persons with a legitimate interest in the application, and who have reason to expect a gift from the mother. The husband’s affidavit evidence supports the application. The interests of the mother’s three grandchildren have been heard through the plaintiff and they are well provided for in the proposed will.

Conclusion and Orders

51. For these reasons the Court will make the orders as proposed under s 18 of the Act. The Court makes the following orders and directions:

1. Join the mother as the first defendant and the husband as the second defendant in these proceedings.

2. Order, pursuant to s 19 of the Succession Act 2006 (“the Act”), that the plaintiff be granted leave to make an application for an order under s 18 of the Act on behalf of the first defendant.

3. Order, pursuant to s 18 of the Act, that a will be authorised to be made on behalf of the first defendant in terms of the draft will provided by the plaintiff (marked as Exhibit “A”) [Annexure A not published].

4. Order that the Registrar be authorised and directed to sign, and seal with a seal of the Court, pursuant to s 23 of the Act, a will in the terms of the draft will provided by the plaintiff.

5. Order that the costs of these proceedings of the plaintiff, the second defendant, and the NSW Trustee and Guardian be paid out of the estate of the first defendant on the indemnity basis.

6. Reserve to any person with a sufficient interest liberty to apply in this matter.

7. Order that these orders be entered forthwith.

8. ANNEXURE A [not published]

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Decision last updated: 15 March 2023