Clay v Kurelic
[1999] WASCA 237
•8 NOVEMBER 1999
CLAY -v- KURELIC [1999] WASCA 237
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASCA 237 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:102/1999 | 28 SEPTEMBER 1999 | |
| Coram: | STEYTLER J TEMPLEMAN J | 8/11/99 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed Applicant given opportunity to apply for limited further discovery | ||
| PDF Version |
| Parties: | MARK GREGORY CLAY MARIE KURELIC |
Catchwords: | Succession Wills Probate and administration Testamentary capacity Knowledge and approval of contents of will Pleadings Application for leave to appeal against decision of Master striking out particulars of statement of claim and refusing to order further discovery on grounds of opression |
Legislation: | Nil |
Case References: | Clay v Karlson, unreported; SCt of WA (Master Bredmeyer); Library No 990046; 10 February 1999 Nock v Austin (1918) 25 CLR 519 Wintle v Nye [1959] 1 All ER 552 Ajili v Dinica-Popp, unreported; SCt of NSW (Windeyer J); 19 December 1995 Banks v Goodfellow [1870] 5 QB 549 Barry v Butlin (1838) 2 Moo PCC 480 Boreham v Prince Henry Hospital (1955) 29 ALJR 179 Low v Guthrie [1909] AC 278 Pates v Craig, unreported; SCt of NSW (Santow J); 106306/94; 28 August 1995 Raven v Rodgers, unreported; SCt of WA (Walsh J); Library No 8674; 20 December 1990 Re McCaffrey [1938] SASR 403 Roos v Karpenkow (1998) 71 SASR 497 Will of Ryan; Williams v Ryan [1998] VSC 60 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : CLAY -v- KURELIC [1999] WASCA 237 CORAM : STEYTLER J
- TEMPLEMAN J
- Applicant (Plaintiff)
AND
MARIE KURELIC
Respondent (Second Defendant)
Catchwords:
Succession - Wills - Probate and administration - Testamentary capacity - Knowledge and approval of contents of will - Pleadings - Application for leave to appeal against decision of Master striking out particulars of statement of claim and refusing to order further discovery on grounds of opression
Legislation:
Nil
Result:
Application dismissed
Applicant given opportunity to apply for limited further discovery
(Page 2)
Representation:
Counsel:
Applicant (Plaintiff) : In person
Respondent (Second Defendant) : Mr R K F Davis
Solicitors:
Applicant (Plaintiff) : In person
Respondent (Second Defendant) : Tydde & Co
Case(s) referred to in judgment(s):
Clay v Karlson, unreported; SCt of WA (Master Bredmeyer); Library No 990046; 10 February 1999
Nock v Austin (1918) 25 CLR 519
Wintle v Nye [1959] 1 All ER 552
Case(s) also cited:
Ajili v Dinica-Popp, unreported; SCt of NSW (Windeyer J); 19 December 1995
Banks v Goodfellow [1870] 5 QB 549
Barry v Butlin (1838) 2 Moo PCC 480
Boreham v Prince Henry Hospital (1955) 29 ALJR 179
Low v Guthrie [1909] AC 278
Pates v Craig, unreported; SCt of NSW (Santow J); 106306/94; 28 August 1995
Raven v Rodgers, unreported; SCt of WA (Walsh J); Library No 8674; 20 December 1990
Re McCaffrey [1938] SASR 403
Roos v Karpenkow (1998) 71 SASR 497
Will of Ryan; Williams v Ryan [1998] VSC 60
(Page 3)
1 STEYTLER J: I have had the advantage of reading the reasons for decision proposed to be published by Templeman J. I agree with them and with his Honour's conclusions. I have nothing to add.
2 TEMPLEMAN J: This is an application for leave to appeal against the decision of Master Sanderson who struck out certain further and better particulars of the applicant's statement of claim and refused to order the second defendant to provide further discovery. The second defendant is the respondent to this application.
3 The applicant is the plaintiff in the action, Mr Mark Gregory Clay. He is the nephew of the late Alfred Clay, who died on 24 January 1995 leaving a will dated 25 July 1987 and a codicil dated 30 November 1988.
4 Probate of the will and codicil was granted in common form to the respondents, the defendants in the action, who are the executors named in the will.
5 The applicant has brought proceedings for revocation of the grant of probate. He seeks an order pronouncing for the will in solemn form and against the codicil.
6 In his further amended statement of claim the applicant alleges that at the date of execution of the codicil the testator (who is referred to in the pleadings as "Alf") was not of sound mind, memory and understanding (par 7) and that he did not know and approve of the contents of the will and codicil (par 8).
7 The requirements for testamentary capacity are well settled. They are set out conveniently in Halsbury's Laws of England 4th ed, volume 17, par 897 - 898:
"It is necessary for the validity of a will that the testator should be of sound mind, memory and understanding - words which have consistently been held to mean sound disposing mind, and to import sufficient capacity to deal with and appreciate the various dispositions of property to which the testator is about to affix his signature…In order to be of sound disposing mind a testator must not only be able to understand that he is by his will giving his property to one or more objects of his regard, but he must also have capacity to comprehend and to recollect the extent of his property…."
(Page 4)
8 The applicant gives particulars of the allegation that the testator was not of sound mind, memory and understanding when he executed the codicil. He contends that the testator:
"(a) was of or about 75 years of age and had suffered several strokes affecting his mind, memory and communication skills and his ability to care for himself and look after his own financial and personal affairs;
(b) was unable to care for himself or look after his own financial and personal affairs;
(c) relied on the Second Defendant to care for him and manage all his financial and personal affairs;
(d) was reliant on the second defendant for knowledge of his financial position and interest."
- Further matters are then set out in the particulars.
9 It is clear that (a) and (b) above are proper particulars of lack of testamentary capacity. It is equally clear that (c) and (d) are not. It does not follow from the fact that a testator relies on another for care and management of his affairs that he lacks testamentary capacity.
10 However, the respondent did not, as she might have done, apply to strike out the particulars given in (c) and (d). Instead, she sought further and better particulars. As to (c) she asked for particulars as to:
"…the manner and extent to which Alf relied upon the second defendant to care for him and to manage all his financial and personal affairs, and the manner and extent to which the second defendant so managed his affairs."
11 The answer included the following:
"The manner and extent to which the second defendant managed Alf's financial and personal affairs included:
…
(b) payments of money from Alf's bank accounts to herself without any written authorisation; and
(c) transferring Alf's investment property in Rosendo Street Cottesloe to herself [the second defendant] with the aid of
(Page 5)
- her daughter by means of a forgery ofAlf'ssignature on the transfer of land registered with DOLA."
- In relation to (d) the respondent sought particulars of the testator's financial position and interests upon which he was reliant on the second defendant and the nature and extent of that reliance. The answer was:
"By late 1988, because of Alf's deteriorating health and physical condition, his avoidance of outside contact and his reliance on the second defendant to manage his affairs, Alf was reliant on the second defendant for knowledge of his financial position and interests, including knowledge of his assets, his liabilities, his incomes and expenses and knowledge of benefits he had transferred to the second defendant before that date and the circumstances of those transfers. Further particulars may be provided after discovery (including 3rd party discovery) and interrogatories."
13 The Master took the same view in relation to (c) above. He held that the words "by means of a forgery of Alf's signature" was irrelevant because it had nothing to do with the testator's state of mind when he signed the codicil.
14 In relation to (d) above, the Master held that the reference to "benefits … transferred to the second defendant" before the date of the codicil, if relevant at all, was only incidental to the central question at issue in the case.
15 The applicant now seeks to appeal against that decision.
16 In considering the application, it is necessary to have regard to the criteria which must be applied by the court in dealing with interlocutory appeals. These are stated in Seaman on Civil Procedure par 63.0.23:
"In general the court must be satisfied that the decision below is attended with sufficient doubt to justify the grant of leave and that a substantial injustice would be done if it remains unreversed."
(Page 6)
17 It is the applicant's contention that there are suspicious circumstances surrounding the making of the codicil. He submits however, that it is not necessary for him to plead and prove that there has been any fraud or undue influence: or that the testator lacked testamentary capacity. Rather he submits that once the evidence of the suspicious circumstances is placed before the court, the onus shifts to the respondent to dispel the suspicion and prove, on the balance of probabilities, that the testator was possessed of sufficient testamentary capacity and that he was not subjected to fraud or undue influence when he made the codicil.
18 In particular, given the allegation that the codicil was procured by the respondent, who derives a benefit from it, the applicant relies on the following passage from Halsbury's Laws (supra) at par 915:
"Where a person has prepared a will in his own favour it is his duty to bring to the testator's mind the effect of his testamentary act, and failure to do so may amount to fraud. Those who take for their own benefit after having been instrumental in preparing or obtaining a will have thrown upon them the onus of showing the righteousness of the transaction."
19 The applicant submits that there is a suspicion that the respondent administered the testator's estate fraudulently while he was reliant on her to manage his affairs. This, the applicant submits, raises a further suspicion that the respondent would have been unlikely to comply with her duty to inform the testator about the nature and extent of his estate when he executed the codicil.
20 I accept that the law is as the applicant submits it to be. However, even if the applicant's suspicions are well-founded, so that when the testator executed the codicil he was unaware of the extent of his estate, that has nothing to do with his testamentary capacity. The suspicion is not that the testator lacked the mental capacity to comprehend and recollect the extent of his estate. The suspicion is that unbeknown to the testator his estate had been depleted by the second defendant.
21 That being so, it seems to me that the Master was correct in holding that those parts of the further and better particulars which he struck out were irrelevant to the question of testamentary capacity which is the only issue raised by par 7 of the statement of claim.
22 In any event, the applicant faces a further difficulty. He relies on the well-known case of Wintle v Nye [1959] 1 All ER 552 in which Colonel Wintle sought the revocation of a grant of probate made in relation to a
(Page 7)
- will which conferred a substantial benefit on a testatrix's solicitor who had prepared the will.
23 In that case, the issue was solely whether the testatrix understood and approved the contents of the will: testamentary capacity was not in issue.
24 As Viscount Simonds pointed out in the House of Lords (at 560), Colonel Wintle had made no charge of fraud:
"If he had done so, he would have had to prove his case affirmatively. He put the [solicitor] to the proof that the testatrix knew and approved the contents of the will and, if that could only be established by the evidence of the [solicitor] himself, he was entitled to subject him to the severest cross-examination and at every point to challenge his veracity, even though the result might be that the jury would not believe him."
25 That is a course which commends itself to the applicant in the present case. However, a challenge to the respondent's veracity would not permit the applicant to put to her, in the course of cross-examination, that she had acted fraudulently. As Isaacs J said in Nock v Austin (1918) 25 CLR 519 at 528:
"The doctrine that suspicion must be cleared away does not create 'a screen behind which fraud or dishonesty may be relied on without distinctly charging it' (Lord Loreburn LC in Low v Guthrie [1909] AC 278 at 281-282)."
26 In Nock, the testator's widow alleged that when the testator executed the will, which conferred benefits on the executors, he was not of sound mind, memory and understanding and that he did not know and approve of its contents. The widow had alleged initially that the will was obtained by fraud: but that allegation was abandoned at the hearing.
27 Isaacs J went on in his judgment (at 529) to say that in these circumstances, if the court vigilantly watched the executor's behaviour as a witness and formed the opinion that he was trustworthy, the issue of knowledge and approval must be found in his favour:
"…and that 'fraud' as a distinct issue to destroy the effect of actual knowledge and assent - which would then be its only relevancy - cannot be relied on."
(Page 8)
28 The other members of the court, Barton and Gavan Duffy JJ, in a joint judgment said (at 523) that as the allegations of fraud had been withdrawn, this had relieved them of the necessity of considering whether there was any fraud or misconduct on the part of the executors:
"…and the suspicion must be confined to the question whether without any such fraud or misconduct the testator failed to understand the nature and effect of his act." (My emphasis)
29 In the present case, the applicant contends that the Master overlooked throughout his reasons the allegation contained in par 8 of the statement of claim that the testator did not know and approve the contents of the codicil.
30 It is true that the statement of claim contained those allegations: and that the Master made no express reference to that issue in his reasons. However, although the particulars of lack of testamentary capacity are relied on also as particulars of want of knowledge and approval, the request for further and better particulars was made only in the context of the former allegation.
31 The applicant submits that in considering the further and better particulars only in the context of lack of testamentary capacity, the Master addressed his mind to the wrong question:
"The question is not whether the allegation has anything to do with Alf's state of mind, but rather, whether it raises a suspicion about the character, motives, propriety and honesty of the second defendant in her dealings with Alf, his estate and her procuring of the codicil."
- I do not accept that submission. I repeat, and emphasise, that the further and better particulars were given in support of an allegation about lack of testamentary capacity. The allegation may be relevant to the question of knowledge and approval of the contents of the codicil. It is not, however, necessary to decide that question because it was not raised before the Master. In any event, the same principles apply in relation to that allegation: the applicant cannot suggest that the respondent's conduct was fraudulent if he chooses not to allege fraud in his statement of claim.
32 The applicant sought also to take a point which, as I understand it, he did not raise before Master Sanderson. He contends that the respondent had previously challenged the further and better particulars of par (d) above before Master Bredmeyer and had been unsuccessful.
(Page 9)
33 That challenge was made after the applicant had provided further and better particulars in a form which the respondent contended was inadequate. Master Bredmeyer considered the various answers. In relation to the enquiry:
"As to … (d) the financial position and interest of Mr Alf Clay upon which he was reliant on the second defendant and the nature and extent of the said reliance"
- The Master said he considered that the latter part of the answer was "probably adequate". (Clay v Karlson, unreported; SCt of WA (Master Bredmeyer); Library No 990046; 10 February 1999) at 5.
34 I assume that the "latter part" to which Master Bredmeyer referred contained the words which were later struck out by Master Sanderson.
35 I am not persuaded that the applicant should be given leave to raise a ground of this nature on an interlocutory appeal when it was not raised before Master Sanderson in the proceedings below and when, as seems to me to be plain, a refusal to grant to the applicant leave to raise that point would work no substantial injustice upon him, more particularly in circumstances in which, for the reasons set out above, it would not be open to him to allege the impropriety referred to in his particulars when he has not pleaded it as part of his affirmative case.
36 The second limb of the application arises from Master Sanderson's refusal to order the respondent to give further discovery.
37 The application was substantial. The applicant sought discovery under the following headings of specific documents which came into existence both before and after the date of the codicil:
"Undisclosed receivables and fixed assets of the estate;
Bank and building society records missing from the prior discovery list;
Money's (sic) missing from the estate records;
Tax return missing from records produced on discovery;
Evidence of second defendant's receipts from the [testator's] accounts;
Documents evidencing ownership of properties;
(Page 10)
- Misappropriation of funds;
Verification of purpose and nature of payments made."
38 In support of his application the applicant swore an affidavit in which he deposed to the results of his analysis of documents which had been discovered. The affidavit also contained allegations that the respondent had acted improperly. For example, the applicant alleged that the testator's property at Unit 4, Rosendo Court had been transferred to the respondent by means of a forged signature on the transfer and that a property at 23 Metz Way had been transferred to the respondent "in questionable circumstances".
39 The applicant alleged also that it was not possible for the testator to have had a proper appreciation of his estate by reference to his trading account statements because of the large volume of transactions flowing through that account. The applicant alleged that someone other than the testator, whom he presumed to have been the respondent, had written cheques on the testator's account to pay for improvements to 23 Metz Way and for furnishings. The applicant alleged that the r 9B statement which the respondent swore in her application for probate in common form was false to her knowledge.
40 These are but examples of the kinds of allegations contained in the affidavit.
41 The Master said of the application that the further discovery sought was extensive. He pointed out that the list of documents sought ran to nine pages. He said:
"The plaintiff, in his submissions, maintained that although the discovery sought appeared extensive it was in fact relatively modest and would be easily provided. Having considered again the documents sought and the affidavit material filed by all parties, I am satisfied that the further discovery requested is extensive and oppressive but more than that, the documents sought are in my view irrelevant." (AB 103)
42 The Master then said that the "prime allegation" made by the applicant was that the testator was not of sound mind and understanding when he executed the codicil. The Master went on to refer to the submission made by the applicant, which he has repeated before this Court, that one important aspect of his case was the question of the
(Page 11)
- testator's understanding of his financial position as at the date he signed the codicil:
"The plaintiff says that unless Alf had a clear understanding of his assets and liabilities and the way in which his financial affairs had been conducted for some time prior to his signing the codicil, he could not have a clear understanding of what he was doing when he actually signed the codicil. To the extent that this may be a relevant factor, it seems to me to be peripheral to the central question. It is apparent from the affidavit material filed that the plaintiff has been able to substantially recreate Alf's financial affairs from material which has been discovered. It may be that to obtain a complete and full picture he requires further discovery. But no purpose would be served by this discovery. What he has at present is clearly sufficient for the purposes of cross-examination of various witnesses. This is apart from the question of relevance of most of the post-1988 material. In the circumstances, there would be no purpose served at all in ordering the discovery as sought by the plaintiff." (AB 103-4)
44 I am not therefore persuaded either that the Master was wrong to dismiss the applicant's application upon the ground of oppression, or that, if he was wrong, that the applicant has thereby suffered a substantial injustice. For those reasons, the application should be dismissed.
45 I accept however, the documents of which further discovery was sought, appear to include those relating to the size and nature of the testator's estate which are therefore relevant to the allegation of want of knowledge and approval.
46 So, for example, any missing documents should be disclosed which evidence ownership of real property or other significant assets, when this has not been established by documents discovered previously. Recent tax returns might also be relevant to the issue of the testator's understanding of the nature and extent of his estate.
(Page 12)
47 In these circumstances, I consider that although the learned Master was entitled to dismiss the application on the ground of oppression, he erred in holding that it was also irrelevant. The applicant should have been given the opportunity to make a more limited application for further discovery. But rather than involve the parties in the additional time and cost associated with such an application, I propose that this Court now hear brief submissions and dispose of the matter in that way.
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