Hall v Carney
[2012] SASCFC 76
•21 June 2012
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
HALL v CARNEY & ORS
[2012] SASCFC 76
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Vanstone and The Honourable Justice Stanley)
21 June 2012
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - THE MAKING OF A WILL - TESTAMENTARY INSTRUMENTS - UNDUE INFLUENCE - CIRCUMSTANCES AROUSING SUSPICION
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - THE MAKING OF A WILL - TESTAMENTARY INSTRUMENTS - KNOWLEDGE AND APPROVAL OF CONTENTS - GENERALLY
SUCCESSION - EXECUTORS AND ADMINISTRATORS - PROCEEDINGS BY EXECUTORS OR ADMINISTRATORS
Appeal from the decision of a Judge of this Court pronouncing the force and validity of a will - the deceased duly executed a will on 17 November 2006 - where the will was in substantially different terms to previous wills executed by the deceased - whether suspicious circumstances arose which were sufficient to dispel the presumption of knowledge and approval - whether, in any event, the deceased knew and approved the contents of her will.
Held per Gray J (Vanstone and Stanley JJ agreeing): Appeal dismissed - suspicious circumstances arose, leading to the conclusion that the presumption of knowledge and approval did not arise - however, the trial Judge was correct in concluding that the deceased knew and approved the contents of her will.
Wills Act 1936 SA; Inheritance (Family Provision) Act 1972 (SA), referred to.
Roos v Karpenkow (1998) 71 SASR 497, considered.
HALL v CARNEY & ORS
[2012] SASCFC 76Full Court Gray, Vanstone and Stanley JJ
GRAY J.
This is an appeal from the decision of a Judge of this Court pronouncing the force and validity of a will.
The deceased, Kathleen Elliott, died in her 92nd year in January 2007. Mrs Elliott executed her last will on 17 November 2006. The will was prepared by solicitors and appointed her daughter, Vivienne Kathleen Carney, and two legal practitioners as her executors and trustees. All formalities under the Wills Act 1936 (SA) were complied with.
The executors sought a grant of probate of the will. However, Mrs Elliott’s son, Grantley Thomas Aubrey Hall, entered a caveat against the grant. The caveat was warned and an appearance was entered to that warning. As a consequence, the executors commenced the within proceedings seeking an order from the Court pronouncing the force and validity of the will in solemn form. Mrs Elliott’s husband, Geoffrey Gordon Elliott, was later added as a plaintiff in his capacity as a beneficiary. Accordingly, Mr Douglas, Vivienne and Mr Elliott are the plaintiffs in the within proceedings.
The substantive effect of the 17 November 2006 will is to leave a house property at Plympton South to Vivienne and to leave the residue to be divided equally between Mr Elliott, Grantley and Vivienne.
The trial Judge concluded that a presumption arose that Mrs Elliott knew and approved of the contents of her will. In reaching this conclusion, the Judge rejected the submission of Grantley that relevant circumstances of suspicion had arisen sufficient to dispel the presumption of knowledge and approval. The Judge also concluded that if the presumption did not arise he was satisfied on the evidence that, in any event, Mrs Elliott knew and approved the contents of the will of 17 November 2006.
On the appeal, Grantley submitted that the Judge had erred in concluding that the presumption of knowledge and approval arose and further erred in concluding that even without the aid of the presumption, the propounders of the will had made out their case that the will be admitted to probate in solemn form.
The Facts
Mrs Elliott was born in January 1915. In June 1940, she married Aubrey Hall. They had two boys, Grantley and Marcus. Vivienne was adopted by Mrs Elliott and Mr Hall soon after her birth in 1960. Marcus died in 1973. Aubrey Hall died in 1970. Mrs Elliott married Mr Elliott in 1976 and this marriage continued until her death. Following the death of her first husband, Mrs Elliott continued to conduct a dance studio business.
Vivienne was previously married and has two children who in November 2006 were aged nine and 11 years. Grantley has separated from his wife. He does not have any children.
In November 1999, Mrs Elliott purchased a property at Dawson Ave, Plympton South. She did this to provide accommodation for Vivienne and her two children, then aged two and four years. Vivienne was apparently in difficult financial circumstances. The property was purchased in Mrs Elliott’s name. Vivienne paid rent and some outgoings, and made some improvements. The property became the family home for Vivienne and her children. Grantley considered the purchase of the Plympton South property imprudent. He expressed his annoyance to Mrs Elliott in strong terms and this led to a period of prolonged estrangement.
Medical evidence established that Mrs Elliott was in good health until early December 2006, when metastic skeletal cancer was first diagnosed. Mrs Elliott was admitted to hospital where she remained until transferred to a hospice shortly before her death.
Testamentary Dispositions
Mrs Elliott made many wills during the course of her life. Of those in evidence, six were made between 1980 and September 2003. The trial Judge traced the history of those wills in some detail. The wills over this period provided for a modest legacy to Mr Elliott and a sharing of the balance of the estate between Vivienne and Grantley.
On 12 December 2005, Mrs Elliott made the first of four wills prepared by Caldicott & Co. From this time, Mr Douglas of Caldicott & Co became involved in Mrs Elliott’s testamentary affairs. The December 2005 will increased the legacy to Mr Elliott, devised the Plympton South property to Vivienne and made a bequest of shares and debentures to Grantley. At this time, it was thought that the shares and debentures were about of equal value to the Plympton South property. Shortly after making this will, Mrs Elliott received advice that the shares were of much greater value than she had previously understood. As a consequence, she wished to amend her will to ensure that her children shared her estate equally, as closely as possible.
On 17 January 2006, Mrs Elliott executed a further will. Apart from some specific bequests, the principal features of the will made on 17 January 2006 were: Mr Elliott was to receive a bequest of $150,000.00; Vivienne was to receive the property at Dawson Avenue; Grantley was to receive a pecuniary legacy equal to the value of the property at Dawson Avenue; Vivienne was to have an option to purchase the property at 247 Anzac Highway; Mr Elliott was to have a right of occupation in that property for 12 months after Mrs Elliott’s death; and Vivienne and Grantley were to share the residuary estate equally.
On the day following the execution of the will, Caldiocott & Co wrote to Mrs Elliott, drawing her attention to the fact that the legacy to her husband would diminish over time and “strongly” advising a regular review of her will. Six weeks later, Mrs Elliott instructed Caldicott & Co to prepare a further will increasing the legacy to Mr Elliott to $200,000.00. This will was subsequently executed on 21 March 2006.
On 18 October 2006, Mrs Elliott wrote to Caldicott & Co in the following terms:[1]
Re My Will – signed March 2006
My family is in a determined, unhappy state at this time and I am very worried!! They believe my approach to my Will is wrong and will not work satisfactorily!
I understand their viewpoint and am forced to cancel. My future?!!
I am sorry this has happened and must do better next time?!!
[Emphasis in original.]
On 20 October 2006, Mr Douglas, having received this letter, telephoned Mrs Elliott who informed him that she did not want to do anything about her will until she had spoken to her children. On 26 October 2006, Mrs Elliott left a message for Mr Douglas advising that she wanted to leave the will as is until she sorted out what she wanted to change.
[1] Carney & Ors v Hall [2011] SASC 207, [51].
On 17 November 2006, Mrs Elliott consulted Mr Douglas. Mr Elliott and Vivienne attended with Mrs Elliott. Mrs Elliott instructed Mr Douglas that she wished to leave an antique clock to Vivienne, to remove the pecuniary legacy to Mr Elliott and Grantley, and to include Mr Elliott as one of the residual beneficiaries. Mr Douglas informed Mrs Elliott that he considered it was a good idea making Mr Elliott a joint residual beneficiary as it made her will a lot fairer. Mr Douglas then inquired as to the removal of the legacy in favour of Grantley. Mrs Elliott responded that the initial purpose of the legacy was to ensure that Grantley received a share in the estate of equal value to that of Vivienne, but that was no longer necessary because Mrs Elliott considered that the Plympton South property for all intents and purposes already belonged to Vivienne. Mr Douglas then marked up the changes that Mrs Elliott had instructed be made and a new will was immediately prepared.
Mr Douglas, on the same occasion, had a further conversation with Mrs Elliott in the absence of Mr Elliott and Vivienne. He inquired whether Mrs Elliott was happy with the amendments to which Mrs Elliott responded in the affirmative. Mr Douglas then asked if anyone had forced her to change her mind and Mrs Elliott responded in the negative.
Mr Douglas then showed the proposed will to Mrs Elliott and explained the significance of the clauses. He explained that the proposed will was in substantially the same terms as her previous will but highlighted the changes that had been made, including the reference to the antique clock, removal of the legacies to Mr Elliott and Grantley, and the clause providing for Mr Elliott to be a residual beneficiary. Mr Douglas observed that Mrs Elliott had the proposed will in front of her as he went through it and that she appeared to read the document. Mrs Elliott instructed Mr Douglas that she wished to execute the proposed will. The will was duly executed later that day. On 20 November 2006, a copy of the will was sent to Mrs Elliott.
The Findings of the Trial Judge
The Judge heard evidence from Vivienne and Grantley. The Judge did not consider either to be entirely satisfactory witnesses. Ultimately he concluded that he should treat Vivienne’s evidence with some circumspection, although on matters critically at issue at trial he regarded her as generally reliable. The Judge concluded that Grantley had engaged in a degree of rationalisation and reconstruction probably resulting from introspection and self-absorption. The Judge considered that Grantley may well have been “seeing suspicion where none exist”.[2]
[2] Carney & Ors v Hall [2011] SASC 207, [75].
The Judge accepted the evidence of the other witnesses – Mr Douglas, Susan McDonald and Peter Chia – as reliable evidence.
Mr Elliott did not give evidence. The Judge considered that it was significant that Mr Elliott had not been called to give evidence and concluded that it was appropriate to draw the inference that any evidence that he may have given would not have assisted the plaintiffs’ case. The Judge further considered that his absence also allowed the inference that Mr Elliott had been pressuring his wife to be drawn with greater confidence.
It was Grantley’s case that the evidence gave rise to suspicion that Mrs Elliott had been subject to undue influence at the time she made her will of 17 November 2006. Attention was drawn to the radical departure effected by the will of 17 November 2006 from her earlier testamentary dispositions. In particular she had departed from providing an equal sharing of her estate between Grantley and Vivienne. There was a further change in the provision being made in favour of Mr Elliott. Instead of receiving a legacy, the 17 November 2006 will provided that he would share the residue with Grantley and Vivienne. The Judge agreed that these were very relevant matters when considering whether special circumstances existed.
Grantley submitted that the radical changes were brought about by pressure placed on Mrs Elliott by members of the family. It was said that this pressure gave rise to the suspicion that she had been unduly influenced by family members.
The Judge made the following findings about family pressure and persuasion being placed on Mrs Elliott:[3]
In my opinion, the circumstances reviewed above indicate that Mrs Elliott was subject to some pressure from her family in relation to her will. That pressure emanated at times from Mrs Carney, and at times from Mr Elliott. Mr Hall was not a source of such pressure, although I consider that the fact that he had distanced himself from his mother was a factor which contributed to the stress which his mother experienced in relation to the making of her will. I consider it likely, and so find, that Mrs Elliott was persuaded by members of her family to revoke the will which she had made at Public Trustee and to make instead a will through Caldicott & Co. I think it likely that Mr Elliott and Mrs Carney were, at least, the principal sources of that persuasion.
I also consider it likely, and so find, that both Mrs Carney and Mr Elliott were well aware of the terms of Mrs Elliott’s various wills, and of the effect of those terms. I am satisfied that Mrs Carney drew her mother’s attention to the advantage which the will made on 12 December 2005 would bestow on Mr Hall and, in effect, persuaded her to make the alterations which led to the will of 17 January 2006. Thereafter, I consider that Mr Elliott was the principal source of pressure on Mrs Elliott. I do not discount the possibility that Mrs Carney was also involved, perhaps because of her antipathy to Mr Hall. Nevertheless, my finding is that after March 2006 Mr Elliott did actively seek to persuade his wife to make greater provision for him in her will, and that it was that persuasion which led Mrs Elliott to revise her will on 17 November 2006.
[3] Carney & Ors v Hall [2011] SASC 207, [124]-[125].
The Judge concluded, however, that neither the evidence of the radical change made by the 17 November 2006 will, nor his findings of persuasion and pressure amounted to circumstances of suspicion sufficient to counter the presumption arising from due execution. The Judge concluded:[4]
There remains the question, however, of whether this amounts to evidence of suspicious circumstances in the sense referred to above. It is necessary to keep in mind that the circumstances to which Mr Hall points, even if suggestive of undue influence, must be capable of raising a suspicion that Mrs Elliott did not know or approve the terms of the Will.
In my opinion, the matters upon which Mr Hall relied do not have that effect. Evidence that Mrs Elliott was subject to some pressure or persuasion in relation to the Will falls well short of raising a suspicion that when Mrs Elliott acted in response to that pressure or persuasion, she did not know, and intend, what she was doing.
[4] Carney & Ors v Hall [2011] SASC 207, [126]-[127].
These conclusions, as I understand the Judge’s reasons, led to the application of the evidentiary presumption of knowledge and approval and on this basis the executors had established their case to propound the will of 17 November 2006.
The Alternative
The Judge then proceeded to address the evidence concerning Mrs Elliott’s knowledge and approval of her will on the assumption that he was wrong in his conclusion about the absence of suspicious circumstances. The Judge reached the conclusion that Mrs Elliott executed her will of 17 November 2006 in circumstances where she knew and approved its contents.
In reaching this conclusion, the Judge placed heavy reliance on the evidence of Mr Douglas, an experienced legal practitioner in the taking of instructions for the preparation of wills, including for the elderly. Mr Douglas considered Mrs Elliott to be articulate, forthright and a very impressive person. He had no doubt about her mental capacity. He saw no need to obtain a medical certificate of testamentary capacity. The Judge was satisfied that Mr Douglas had carefully explained the terms of the 17 November 2006 will to Mrs Elliott, drawing her attention to the changes and observing Mrs Elliott appearing to read the will as he went through it with her. The Judge made a specific finding that Mr Douglas had raised with her the question about her understanding and approval of the changes being effected by the will and that nobody had forced her to make any change. The Judge accepted Mr Douglas’ evidence without qualification.
The Judge also placed reliance on the evidence from Ms McDonald, an employed solicitor working with Caldicott & Co. Ms McDonald had taken instructions from Mrs Elliott in 2005 and 2006. On each occasion, Ms McDonald described Mrs Elliott as being mentally competent with no issue arising as to testamentary capacity. Mrs Elliott demonstrated through her preparation for the manner of giving instructions that she had an understanding and appreciation of relevant matters.
The evidence of Mr Douglas and Ms McDonald on the topic of Mrs Elliott’s testamentary capacity was supported by Dr Chia, Mrs Elliott’s general practitioner for some years. Most recently, Dr Chia had been consulted by Mrs Elliott on 11 December 2006. Dr Chia had no doubt about Mrs Elliott’s capacity to give instructions for her 17 November 2006 will.
The Appeal
A party propounding a will has to satisfy the court that the testator knew and approved the contents of the will. If an issue as to capacity arises, it is for the propounder to satisfy the court that at relevant times the testator had testamentary capacity. Over time, the courts accepted that once it was established that a testator had read over the will and was aware of and approved its contents, an evidentiary presumption arose that the testator knew of and assented to the contents of the will. This has become an accepted evidentiary presumption. It was also accepted that if circumstances of suspicion existed, the presumption would not arise and the court will be left to engage in the normal fact finding process.
In Roos v Karpenkow, Doyle CJ observed:[5]
[5] Roos v Karpenkow (1998) 71 SASR 497, 504-505.
The relevant principles are reasonably clear. They were stated authoritatively, for my purposes, by the High Court in Nock v Austin (1918) 25 CLR 519. Although the judgment of Isaacs J did not receive the assent of the other two members of the court, what his Honour said is not inconsistent with their judgment, and appears to me to be consistent with other cases of persuasive authority. I propose to set out the relevant statement of principles by his Honour, omitting from that statement all reference to authorities. His Honour said (at 528):
(1) In general, where there appears no circumstance exciting suspicion that the provisions of the instrument may not have been fully known to and approved by the testator, the mere proof of his capacity and of the fact of due execution of the instrument creates an assumption that he knew of and assented to its contents.
(2) Where any suspicious circumstances exist, the assumption does not arise, and the proponents have the burden of removing the suspicion by proving affirmatively by clear and satisfactory proof that the testator knew and approved of the contents of the document.
(3) If in such a case the conscience of the tribunal, whose function it is to determine the fact upon a careful and accurate consideration of all the evidence of both sides, is not judicially satisfied that the document does contain the real intention of the testator, the court is bound to pronounce its opinion that the instrument is not entitled to probate.
(4) The circumstance that a party who takes a benefit wrote or prepared the will is one which should generally arouse suspicion and call for the vigilant and anxious examination by the court of the evidence as to the testator's appreciation and approval of the contents of the will.
(5) But the rule does not go further than requiring vigilance in seeing that the case is fully proved. It does not introduce a disqualification.
(6) Nor does the rule require as a matter of law any particular species of proof to satisfy the onus.
(7) 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.
Doyle CJ then addressed the situation where suspicious circumstances arose and observed:[6]
[6] Roos v Karpenkow (1998) 71 SASR 497, 505-506.
If what are called suspicious circumstances are found to be present, what must the proponent of the will do to meet the requirements stated by Isaacs J?
In Barry v Butlin (1838) 2 Moo 480 at 482; 12 ER 1089 at 1090, Baron Parke said that a circumstance of suspicion:
... calls upon it [the court] to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased.
In Fulton v Andrew (1875) LR 7 HL 448 at 471-472, Lord Hatherley said, in words often referred to with approval, that when there are circumstances of suspicion, those who propound the will " ... have thrown upon them the onus of showing the righteousness of the transaction".
In Wintle v Nye [1959] 1 WLR 284 at 291; [1959] 1 All ER 552 at 557 Viscount Simonds said:
In all cases [of suspicion] the court must be vigilant and jealous. The degree of suspicion will vary with the circumstances of the case. It may be slight and easily dispelled. It may, on the other hand, be so grave that it can hardly be removed.
These statements are helpful, but in the end I consider that Isaacs J has adequately stated the position.
I must examine the evidence with care. I must bear in mind that when, as here, the only witnesses to the critical events are those who propound the will, their evidence and motives must be carefully scrutinised. I must pay careful attention to any circumstances of suspicion that do arise, and the suspicions that arise from them. It is not a question of whether Mr Karpenkow has made out a case of fraud or of undue influence, or a case that Mrs Hein did not know or approve of the contents of the will. If there are circumstances of suspicion, the onus that always rests upon the plaintiff to prove knowledge and approval will not be discharged unless the suspicion that arises from those circumstances is dispelled. In the end, I must be affirmatively satisfied, on the balance of probabilities, that this is the freely made will of Mrs Hein, and that she knew and understood what she was doing. While what is required is always proof on the balance of probabilities, the evidence required to dispel a suspicion will depend upon the nature and gravity of the suspicion. The fact that neither fraud or undue influence is pleaded does not mean that I can ignore the possibility of either fraud or undue influence being present. Any suspicion along those lines must be displaced: see Tyrrell v Painton [1894] P 151.
The above observations have guided my approach to the resolution of the issues arising on this appeal.
In the present proceedings there are two matters that, in my view, give rise to suspicious circumstances leading to the conclusion that the presumption of knowledge and approval does not arise. The two are related. Counsel for Grantley referred to the radical change in the testamentary dispositions of Mrs Elliott. Prior to November 2006, Mrs Elliott had always provided for, as near as practicable, an equal provision to Grantley and Vivienne. The will of 17 November 2006 represented a marked departure from this. On any view, the will provided an unequal division between Grantley and Vivienne. The benefits flowing from the will were disproportionately in favour of Vivienne. There is also the further change in the provision made in favour of Mr Elliott.
In the 19th edition of Williams, Mortimer and Sunnucks, Executors Administrators and Probate, the following appears:[7]
A radical departure from testamentary dispositions, long adhered to, requires explanation, especially if the person in whose favour the change is made possesses great influence and authority with the deceased and originates and conducts the whole transaction; and such facts may raise strong suspicion that the change was not the result of the free volition of the deceased. But that suspicion may be dissipated by proof of a change of circumstances since the earlier wills.
[Footnotes omitted.]
The radical changes to Mrs Elliott’s testamentary dispositions are to be considered having regard to the Judge’s earlier extracted findings of the existence of pressure and persuasion from family members. The substance of Grantley’s case was that Mrs Elliott was subjected to pressure and persuasion to change the terms of her will. To my mind, these considerations do give rise to circumstances of suspicion, calling on a need for the Court to consider all of the evidence and to make a finding without resort to the evidentiary presumption.
[7] Williams, Mortimer and Sunnucks, Executors, Administrators and Probate (Sweet & Maxwell Ltd, 19th ed, 2008) 195.
On appeal it was complained that the Judge had not adequately addressed the burden of proof on the executors to establish the real intentions of Mrs Elliott, or the fact that it was for the executors to dispel the suspicions that had arisen. It was said that, as a consequence, the Judge failed to apply the appropriate degree of scrutiny to the evidence and in particular, the Judge failed to give adequate weight to the fact that Mr Elliott did not give evidence when drawing inferences from the evidence.
I do not consider there is substance to these submissions. When addressing the evidence without regard to the presumption, it is clear that the Judge scrutinised the evidence closely and with care before making his findings.
It is important to record that Grantley did not advance a case of fraud or undue influence either at trial or on appeal. He argued that circumstances of suspicion arose and that the onus lay on the executors to expel that suspicion and to positively satisfy the Judge that Mrs Elliott knew and approved of the contents of her will.
During the course of the appeal, counsel made it plain that this was the case presented by the plaintiffs at trial. It was accepted that there had been a radical departure from earlier wills, but it was said that that departure was being effected by an elderly lady of full mental faculty who had testamentary capacity and it was being effected for reasons she considered to be sound.
Mr Douglas’ evidence satisfied the Judge that Mrs Elliott was mentally competent, did have testamentary capacity, understood the terms of the will of 17 November 2006 and understood the variations that were being effected by the will. Mr Douglas inquired specifically that the will as drawn reflected her wishes and that she had not been subjected to any inappropriate influence. Mr Douglas’ evidence, given as a solicitor with expertise dealing with succession matters, was not challenged. It is unsurprising that the Judge would accept and act on this evidence. The Judge also had regard to the evidence of Ms McDonald about the care taken by Mrs Elliott to prepare herself for the giving of instructions.
Mrs Elliott provided an explanation to her solicitors for the changes effected by her 17 November 2006 will. Her daughter and two young grandchildren had made the Plympton South property their home and Mrs Elliott considered that the property had become their home.
The changes to the position of Mr Elliott appear to be a direct result of advice given by Mr Douglas that there was a need to make further provision for Mr Elliott. When regard is had to Mr Elliott’s position generally on an intestacy or as a claimant under the Inheritance (Family Provision) Act 1972 (SA), it would appear that this was appropriate advice.
I consider that the findings made by the Judge of knowledge and approval were open on the evidence. The Judge undertook a close analysis of the evidence and set out in clear terms the basis of his findings. There was no suggestion that the Judge had made any error in approach to the assessment of the evidence. To my mind, not only did the evidence support the Judge’s findings made, but those findings were the correct findings. The evidence of Mr Douglas in particular made out a clear case of knowledge and approval.
Conclusion
I would dismiss the appeal.
VANSTONE J: I agree that the appeal should be dismissed, and with the reasons of Gray J.
STANLEY J: I would dismiss the appeal. I agree with the reasons of Gray J.
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