EKI (Statutory Will)
[2010] TASGAB 12
•12 July 2010
GUARDIANSHIP AND ADMINISTRATION BOARD
HOBART
Application for a Statutory Will for EKI by her administrator, the Public Trustee
Neutral citation: EKI (Statutory Will) [2010] TASGAB 12
REASONS FOR DECISION
Anita Smith (President)
Kim Barker (Member)
William Downie (Member)
Hearing date: 2 July 2010
Statutory Will – purpose of proposed will to recover a debt from former administrator - application lacked requisite statutory declaration – meaning of ‘purported will’ – whether a testamentary instrument signed by the proposed testator when she was incapable of understanding its effect is a ‘purported will’ – difference between an instrument being capable of being admitted to probate and being a ‘purported will’
Wills Act 2008 section 10, 30, 31, 32, 33
Guardianship and Administration Act 1995 section 11, 81
EKI (hereafter referred to as “the proposed testator”) is a 93 year old widow who lives in an Aged Care Facility in Hobart. As a consequence of her advanced dementia she has been the subject of an administration order since 11 June 2003. Her current administrator, the Public Trustee, has applied for the execution of a statutory will for her to ensure that a debt owed by a former administrator, NX, to her estate is acknowledged in the proposed testator’s will. As the motivation for the application arose from the history of the administration of this estate, it is necessary to set out that history in some detail.
History of the estate
Shortly after the proposed testator had been widowed, on 11 June 2003 the Victorian Civil and Administrative Tribunal (VCAT) appointed the proposed testator’s niece, NX, as her guardian (in effect to 11 June 2004) and administrator (in effect to 11 June 2006). In September 2003 the proposed testator was moved to Tasmania. The VCAT order was recognised as a Tasmanian order pursuant to section 81 of the Guardianship and Administration Act 1995 (‘the Act’) on 13 May 2004.
The administrator’s first annual report to the Board, on 17 June 2004, showed an estate with a value of $578,951.02. The second annual report, on 21 June 2005, showed its value as $587, 793.66.
On 22 August 2005, solicitors for the administrator wrote to the Board seeking approval for NX to use approximately $100,000.00 of the proposed testator’s funds to assist with the purchase of a residential property. Noting:
“It is intended that the investment will remain in EKI’s name with the title reflecting registered ownership of a part share in EKI’s name.”
The request also stated:
“Our client holds a Will signed by EKI and believes this is her last Will. The Will leaves all of EKI’s Estate to her sister, CD, our client, and our client’s sister KH.”
This “will” is referred to later in this decision as an “informal note”. The Board treated this request as an application for Advice and Direction by an administrator.
That application was supported by a submission by NX confirming the above arrangement and stating:
“I have received advice from my solicitor, Jim Oakley, regarding her will and he has advised me that he does not see any problems in formalising the will by application, when he is administering her Estate.”
On 6 September 2005 the Board’s Investigation Officer requested a copy of the will, which was supplied prior to the hearing. The application was heard on 15 September 2005 and granted in the following terms:
“The Board hereby gives approval for the administrator, NX to invest up to $100,000.00 from the represented person’s estate in the purchase of real estate in Tasmania subject to the following conditions:
that the administrator will contribute the balance of funds required for the purchase.
that the title will reflect their ownership as tenants in common in the proportions of the funds provided.
that a satisfactory building inspection report and an independent valuation is provided to the Board, prior to entering into a contract for purchase.
that the administrator will reside in the property and pay all expenses relating to the purchase and mortgage repayments, rates, insurance and maintenance.”On 24 May 2006 the administrator supplied her annual report. This disclosed the value of the estate as $597,177.63 and noted the proposed testator’s investment in the property subsequently purchased at Tolman’s Hill as $110,000.00.
On 8 June 2006 the Board reviewed the administration order prior to its expiry. The order was renewed with the following direction:
“That pursuant to S.63(4) of the Act the administrator is to report to the Board within 21 days upon the transactions and advice leading to the extension of the represented person’s investment in the administrator’s property from $100,000.00 to $110,000.00 and to explain why that exercise of the administrator’s powers was in good faith and done with reasonable care.”
Such report was received by the Board on 16 June 2006. The report was accompanied by a copy of the certificate of title which showed that the proposed testator held 2914 of 10,000 undivided shares and NX held 7086 of 10,000 undivided shares. The purchase cost was $377, 500.00. Because the represented person’s share had been adequately represented, the Board did not disallow the unapproved $10,000.00 investment.
The next annual report was received from NX on 22 June 2007. This report disclosed that after discussions between NX, her sister and an accountant, it was decided to transfer $70,000.00 from the proposed testator’s estate to NX and KH’s mother’s estate with some idea of a taxation benefit to the proposed testator’s estate. This transfer was in the nature of a gift, but it had not been approved by the Board as required in section 58 of the Act.
The Board requested verifying statements and financial information from NX and then instructed the Public Trustee to undertake an audit of the estate pursuant to section 63 of the Act. The audit report was received on 7 August 2007 and a hearing, to consider whether NX had acted in good faith and with reasonable care and to review the order, was convened on 6 September 2007.
The Public Trustee was appointed as the administrator for the proposed testator at that review. In addition to that appointment, the Board found:
“After an audit by the Public Trustee and a hearing to consider whether certain items mentioned in the audit report should be disallowed, the Board was satisfied that in making the following expenditures made between 13th May 2004 and today in the exercise or purported exercise of the former administrator’s powers the former administrator did not act in good faith or with reasonable care:
Body corporate fees dated 31 July 2006 of $797.84 and rates dated 14 December 2006 of $450.00
Legal fees expended for the benefit of the former administrator during her family law proceedings on 10 December 2004 and 14 July 2005 to a total of $1017.91
A loan of $528 to the former administrator’s mother dated 23 September 2004
A gift of $72,000 to the former administrator’s mother dated 1 August 2006
Such motor vehicle expenses as cannot be verified in the discretion of the new administrator as being a reasonable expense of the represented person’s estate.Total disallowance: $73, 793.75 (sic) plus unverified motor vehicle expenses.
The Board disallows those expenses and declares that the former administrator is personally liable to the represented person for the amount of the expenditure.
The Board hereby authorises the new administrator to enter into an agreement with the former administrator for the reimbursement of those expenditures on such terms as it deems reasonable.
Such terms may include but are not limited to entering into an agreement with the former administrator on behalf of the represented person to the effect that such moneys as are still outstanding from the estate may be deducted from the former administrator’s anticipated share of the represented person’s estate under her Will or an intestacy.
Pursuant to section 63(6) of the Act, the Board declares that the former administrator is personally responsible for the costs of the audit undertaken by the Public Trustee.
The Board notes the application by the former administrator for reimbursement of her legal expenses in attending the review hearing from the represented person’s estate. The Board considers that it is just in all the circumstances that the former administrator bears her own costs for the attendance.”
On 27 June 2008, the Public Trustee notified the Board in a Request for Advice and Direction that NX had, at the time of purchase, secured a mortgage over the jointly owned property and that this mortgage had included the proposed testator as co-mortgagor. Until this point, it had been assumed that NX was the sole mortgagor. The Public Trustee also noted that NX remained in arrears with respect to rates and body corporate fees. The Public Trustee confirmed that $72,000.00 had been repaid to the estate, but an amount of $9348.03 remained outstanding.
The Public Trustee supplied its annual report as administrator on 3 September 2008 noting the value of the estate was $755,538.72 which included $9348.03 as “Loans made to family members”.
The Public Trustee’s application for advice and direction was heard on 10 October 2008. The outcome of that hearing was the following list of directions:
“1. That the administrator notify NX in writing within 28 days of
(a) intention and possible legal action available to the administrator to extinguish the liability under the mortgage on the property (s.56(2)(g) Guardianship and Administration Act 1995) and
(b) inviting NX to attend mediation no later than a further 28 days.
2.That the administrator report to the Board within 3 months of any decision made.
3.That the administrator take immediate steps to recover the sum of $9348.03 from NX.
4.That the administrator make all reasonable enquiries as to the whereabouts of the represented person’s will including enquiries of Stedman Cameron Lawyers.
AND Further The Board approves expenditure from the represented person’s estate to engage private solicitors”
On 17 December 2008 the Public Trustee reported that following mediation:
·The NX’s son would pay $110,000.00 to purchase the proposed testator’s share of the property at Tolman’s Hill.
·The amount of NX’s debt to the estate at $9348.03 was disputed.
·Discussion about whether the “informal note” (previously produced as “the will”) was a valid will lead to an admission by NX that the proposed testator lacked capacity at the time that it was drawn up.
·That the Public Trustee believed it was in the best interests of the estate to avoid litigation about the $9348.03 debt and litigation about the validity of the will by applying for a statutory will to secure repayment of NX’s debt.
The Board approved the Public Trustee’s proposed course of action on 22 December 2008.
The value of the estate on 31 July 2009 was $723, 497.80.
The “Informal Note”
On the 12th March 2003 the proposed testator and her husband attended an appointment at the offices of Stedman Cameron Lawyers. On that date the proposed testator signed a file note presumably reflecting discussions held during that appointment. Only three months later, she was declared by VCAT to be unable by reason of her disability to make reasonable judgments about her person and circumstances and estate. It was not disputed by any party at the hearing on 2 July 2010 that the proposed testator had lacked that ability on 12th March 2003.
The file note was accompanied by correspondence from Stedman Cameron Lawyers (not produced until the preliminary hearing on 7 May 2009 by NX) expressing their doubts as to her capacity to understand the document that she had signed, but nonetheless stating that they would be “evidence of your testamentary intentions”. This is the same will relied upon at the time of NX’s application for the investment of $100,000.00 from the estate into the jointly owned property.
The ‘informal note’ is handwritten on a pre-printed Stedman Cameron Lawyers file record sheet and provides as follows:
“This is the last will of EKI of XXXX.
1.I appoint my husband CMJI as my executor and sole beneficiary if she (sic) survives me for 30 days.
2. If my husband dies before (?) or does not survive me for 30 days then
(a) I appoint EFX of XXXX to be my executor.
(b) I give my estate to my sister CD and my nieces KH and NX jointly.
(c)I direct that my executor be paid 5% of the value of my estate at commission.
Signed by EKI on 12.03.2003”
The handwriting of the body of the text and the signature are different, suggesting that a solicitor wrote the terms and the proposed testator signed it. The proposed testator survived her husband and her sister, CD, meaning the only purported beneficiaries of the “informal note” would now be NX and KH.
The process of the application
The Public Trustee submitted an application for the execution of a statutory will on 8 January 2009. On 1 March 2009 the Wills Act 2008 commenced and repealed the Wills Act 1992. Usually amendment of legislation includes transition provisions for existing applications, but no transition was provided for by Parliament. Therefore on 26 March 2009, the Public Trustee re-submitted the application together with a medical report by Dr Geoff Chapman dated 4 March 2009. Perhaps because of the timing of the application, falling between two pieces of legislation, aspects of the application were materially deficient.
The requirements of an application are specified in section 32 of the Wills Act 2008:
“32. Application for a statutory will
(1)In applying to the Board for a statutory will under this Division, the applicant must, subject to the Board's discretion, furnish to the Board –
(a) a written statement of the general nature of the application and the reasons for making it, including the grounds on which it is alleged that the person for whom the will is proposed to be made lacks testamentary capacity; and
(b) an estimate, so far as the applicant is aware of it, of the size and character of the estate of the proposed testator; and
(c) a proposal nominating the persons who should benefit under the proposed will and the extent to which each person nominated should share in the estate; and
(d) any evidence, so far as it is available, relating to the wishes of the proposed testator; and
(e) evidence of the likelihood of the proposed testator acquiring or regaining capacity to make a will at any future time; and
(f) a statutory declaration stating that it is the applicant's belief that the proposed testator has not made a will or any purported will and setting out the reasons for that belief; and
(g) any evidence of the interests, so far as they are known to the applicant, or can be discovered with reasonable diligence, of any person who would be entitled to receive any part of the estate of the proposed testator if the proposed testator were to die intestate; and
(h) any evidence of any facts indicating the likelihood, so far as they are known to the applicant, or can be discovered with reasonable diligence, of an application being made under the Testator’s Family Maintenance Act 1912; and
(i) any evidence of the circumstances, so far as they are known to the applicant, or can be discovered with reasonable diligence, of any person for whom the proposed testator might reasonably be expected to make provision under a will; and
(j) a reference to any disposition for a body, whether charitable or not, or for a charitable purpose that the proposed testator might reasonably be expected to give or make by will; and
(k) any other facts that the applicant considers to be relevant to the application.(2) An application under subsection (1) is to be lodged with the registrar of the Board.”
The only persons mentioned in the application for the purposes of section 32(1)(c) and (g) were NX, her sister KH and an incomplete reference to a Mr KH, brother of the proposed testator.
The application was listed for a preliminary hearing on 7 May 2009. However, the re-submitted application was not accompanied by a statutory declaration as required by section 32(1)(f) of the Wills Act 2008. The application was adjourned to enable the Public Trustee to seek legal advice particularly upon the question of whether, as applicants, they could make the requisite declaration that there was no purported will in light of the “informal note.”
On 16 November 2009, the Public Trustee submitted a copy of counsel’s opinion regarding whether the “informal note” constituted a “purported will”. On 28 January 2010 the Public Trustee submitted a statutory declaration declared by Carole Ann Whitehead, Client Account Manager, which stated:
“On the 12th March 2003 EKI and her husband attended the offices of Stedman Cameron Lawyers for a Will appointment.
On the 12th March 2003 EKI signed documents which Stedman Cameron Lawyers purports to be a testamentary document which can be used as a will for the purpose of submission to the Supreme Court and evidence as to testamentary intentions.
On the 5th October 2009 the Public Trustee sought Counsel Michael O’Farrell’s advice regarding whether the Informal Will is capable of being admitted to probate.
On the 11th November 2009 the Public Trustee received an opinion from Mr Michael O’Farrell. A copy of this opinion is annexed hereto and marked with the letter “A”.
Based on this opinion it is The Public Trustee’s view that the Informal Will is incapable of being admitted to probate.”
On 17 March 2010 the Board sought further information from the Public Trustee regarding the reference to KH and requesting any advice of other known family members for the purposes of section 32(1)(c) and (g) of the Act. On 4 May 2010 the Public Trustee informed the Board that KH’s widow, MH, had survived him and provided contact details for the surviving children of the late KH:
EKH
NKH
QBH
QEH
BMC
IMN
The Board appointed one of the Board members, Mr Grant Kingston, as an independent investigator in this application. Mr Kingston contacted each of the abovenamed persons apart from MH and reported upon their views of the application. According to Mr Kingston’s report the members of the H family were supportive of the making of a statutory will which reflected the terms of an intestacy but for the deduction of the debt owed to the estate by NX. They were not supportive of making a statutory will which reflected the terms of the “informal note” but for the deduction of the debt owed to the estate by NX.
The matter was listed for hearing on 2 July 2010. Notices of hearing were sent to the proposed testator, the Public Trustee, NX, KH, EKH, NKH, QBH, QEH, BMC and IMN.
Because it was thought for a significant period of the history outlined in this statement of reasons that KH and NX were the only surviving relatives of the proposed testator, the application had been described in two ways. Firstly the application sought to have the statutory will reflect the circumstances of an intestacy, secondly the application sought to have the statutory will reflect the provisions in the “informal note”. Prior to receiving details of other family members, the outcome would have appeared to be the same either way. However once the Board became aware of the other family members, the outcomes were potentially remarkably different.
The hearing
The hearing was attended by NX, KH, QEH, Carole Whitehead (Client Account Manager) and Rebecca Ladd (Solicitor) of the Public Trustee, and Lee Perry (Investigation Officer for the Board).
At the hearing the Board noted that the statutory declaration by the applicant did not state that it was the applicant’s belief that the proposed testator has not made a will or any purported will, but rather stated:
“… it is The Public Trustee’s view that the Informal Will is incapable of being admitted to probate”.
The applicant indicated that the declaration had been the product of a request for advice from counsel as they did not believe it appropriate to declare that there was no purported will in light of the “informal note”.
Mr O’Farrell’s opinion was extremely helpful to the Board. He suggested that it was open to the Board to take into account the undisputed evidence that the proposed testator lacked capacity at the time of signing the “informal note” and conclude that the “informal note” does not therefore constitute a purported will. Mr O’Farrell’s opinion considered the interaction of sections 10, 30, 31 and 32 of the Wills Act 2008. Section 30(4) states:
“The Board may not make an order under subsection (1) unless it is satisfied, after making such enquiries as it considers reasonable, that the person has not made a will or any purported will.” (emphasis added).
Mr O’Farrell’s opinion did not address section 33(c) of the Act which states:
“The Board must not make an order authorising the making of a will for a proposed testator unless it is satisfied –
… (c) following such enquiries as are reasonable, that the proposed testator has not made a will or any purported will; …” (emphasis added)However his opinion would possibly be the same regarding this provision.
The applicant indicated that it would not object to the Board dismissing the application because the application did not meet the requirements of section 32(1)(f) of the Wills Act 2008. QEH urged the Board to determine the application and to overlook the lack of compliance with section 32(1)(f) of the Act as a technical issue.
Conclusion
The term “purported will” is not defined in the Act, however the “informal note” was created in circumstances where some parties were attempting to make a will for the proposed testator. Since its creation, other parties have relied upon it as evidence of the intention of the proposed testator towards the distribution of the estate. The “informal note” had been referred to on a number of occasions as the proposed testator’s will in various proceedings before the Board. Indeed the applicant’s statutory declaration refers to it as an “Informal Will”. It is expressed to be a testamentary intention and has the tenor or sense of such a document, for instance it could not be confused with a different kind of intention, such as an inter vivos gift or the creation of a trust. In the Board’s view, the fact that it would most likely not be admitted to probate does not alter its nature as a purported will.
The Board considers that the application is critically non-complaint with the requirements of section 32(1)(f) of the Wills Act 2008. The permission in section 11(2)(a) of the Guardianship and Administration Act 1995 for the Board to act without regard to technicalities and legal forms could not extend to proceeding where the basis of the application could not be established. The Board’s jurisdiction in the area of making statutory wills is clearly limited to circumstances where there is no will or no purported will. Where there is a will or a purported will only the Supreme Court has jurisdiction to make a statutory will.
Although it was not necessary to decide, because the application was non-compliant, the Board would not have been satisfied of that for the purposes of section 33(c) that there was no purported will.
During the hearing, NX stated that her financial position has changed and that she is now able to repay the loan to the Public Trustee. She did not say whether the debt amount is still disputed. If NX repays the debt now, it will not be necessary for the Public Trustee to apply to the Supreme Court for the making of a statutory will. Alternatively, if NX continues to dispute the debt, the Public Trustee may proceed with legal action for the recovery of the debt.
The application is dismissed.
Anita Smith Kim Barker William Downie
PRESIDENT MEMBER MEMBER
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