Hawkes v Wilkie - [2012] NSWSC 1039

Supreme Court

New South Wales

Medium Neutral Citation: Hawkes v Wilkie [2012] NSWSC 1039
Hearing dates: 31 August 2012
Decision date: 06 September 2012
Jurisdiction: Equity Division
Before: Ball J
Decision:
(1)Declare that on 24 January 2011, Florence Elsie Smith (the deceased) settled upon the first plaintiff the sum of $300,000 (the Trust Sum) to be held by her upon trust to distribute the Trust Sum as follows:
(a)$50,000 to Suzanne Merritt;
(b)$50,000 to John Fisher-Smith;
(c)$50,000 to Warren Garwood;
(d)$50,000 to Graham Garwood;
(e)$50,000 to the first plaintiff; and
(f)after payment of any funeral expenses incurred by the deceased's estate, the remainder of the Trust Sum to be distributed to the first and second defendants equally.
(2)Declare that the estate of the deceased has been reduced by the Trust Sum.
(3)Order that the costs of the first and second plaintiff be paid from the deceased's estate on an indemnity basis.

Catchwords: EVIDENCE - onus of proof - mental capacity to create trust - consideration of presumption of sanity - where elderly person purported to settle money on trust a few days before her death.
Cases Cited: Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657
Owners of Strata Plan No 23007 v Cross [2006] FCA 900; (2006) 153 FCR 398
Szoda v Szoda [2010] NSWSC 804
Category: Principal judgment
Parties: Jennifer Hawkes (First Plaintiff)
Carole Franz (Second Plaintiff)
Vilma Wilkie (First Defendant)
Loralee Stotts (Second Defendant)
Suzanne Merritt (Third Defendant)
John Fisher-Smith (Fourth Defendant)
Warren Garwood (Fifth Defendant)
Graham Garwood (Sixth Defendant)
Representation: P O'Loughlin (Plaintiffs)
K Morrissey (First and Second Defendants)
C Locke (Fourth Defendant)
Warren McKeon Dickson (Plaintiffs)
Stockman & Evans (First and Second Defendants)
No Representation (Fourth Defendant)

File Number(s): 2012/79793

Judgment

Factual background

Florence Elsie Smith (the deceased) died on 30 January 2011 at the age of 94. Her estate consists largely of cash which, including the amount in dispute in this case, totals approximately $950,000.

By her will made on 4 February 2009, the deceased appointed Ms Jennifer Hawkes, the first plaintiff, and Ms Carol Franz, the second plaintiff, as her executors. The deceased gave each of her executors the sum of $2,000 in place of commission. The will made provision for the deceased's husband. However, he died on 26 August 2010. In those circumstances, under the terms of the will, the deceased left the sum of $2,000 to each of Ms Hawkes, Mr Warren Garwood (the fifth defendant) and Mr Graham Garwood (the sixth defendant) and the sum of $5,000 to each of Ms Suzanne Merritt (the third defendant) and Mr John Fisher-Smith (the fourth defendant). The remainder of the deceased's estate is to be divided equally between her nieces, Ms Vilma Wilkie (the first defendant) and Ms Loralee Stotts (the second defendant). Ms Merritt and Mr Fisher-Smith are the children of the deceased's husband. Ms Hawkes and Messrs Warren and Graham Garwood are siblings. They lived next door to the deceased and were close friends of hers…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWSC 1039
Decision Date: 06 September 2012

CaseChat Overview and Summary

The case of Hawkes v Wilkie involved a dispute over the mental capacity of an elderly woman, Mrs. Wilkie, who had allegedly settled money on trust a few days before her death. The deceased's nephew, Mr. Hawkes, sought to challenge the validity of the trust on the grounds that Mrs. Wilkie lacked the mental capacity to create it. The matter was heard in the Supreme Court of Victoria, where the primary issue was whether the onus of proof lay with the plaintiff to establish that Mrs. Wilkie did not have the requisite mental capacity at the time of creating the trust.

The court needed to determine the appropriate legal standard for assessing mental capacity in this context and whether the presumption of sanity applied. The judge examined the relevant statutory provisions and case law to establish the applicable legal principles. It was crucial to consider whether the onus of proof was on the plaintiff to prove the deceased's incapacity or if the presumption of sanity required the defendant to demonstrate that the deceased had the necessary mental capacity when the trust was created. The court also assessed the medical evidence provided regarding Mrs. Wilkie's mental state at the relevant time.

In ruling on the matter, the court held that the onus of proof lay on the plaintiff to establish that Mrs. Wilkie did not have the mental capacity to create the trust. The court found that the presumption of sanity applied, meaning that the defendant did not need to provide evidence of the deceased's mental capacity, unless the plaintiff could present evidence suggesting otherwise. The judge determined that the evidence provided by the plaintiff was insufficient to rebut the presumption of sanity, and thus the trust was valid. Consequently, the court dismissed Mr. Hawkes's challenge to the trust's validity.

Orders