Hoffmann v Waters - [2007] SASC 273

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Matter of ADAM TROY WATERS
HOFFMANN v WATERS
[2007] SASC 273
Judgment of The Honourable Justice Debelle
20 July 2007
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - THE MAKING OF A WILL - TESTAMENTARY CAPACITY
Statutory wills - application for court to make order authorising the making of a will on behalf of person lacking testamentary capacity – whether persons lacks testamentary capacity – intended testator has had little contact and communication with father – proposed will excludes interest of father - likely intention of the intended testator – whether costs of the application should be paid out of the estate of the intended testator.
Administration and Probate Act 1919 s 72(I), s 72(J); Inheritance (Family Provision) Act 1972 s 6; Mental Health Act 1959 (UK); Mental Health Act 1983 (UK) s 95, s 96, s97; Wills Act 1936 s 7, referred to.
Banks v Goodfellow (1870) LR 5 QB 549; Boulton v Sanders (2004) 9 VR 495; In the Will of Wilson (1897) 23 VLR 197; re C [1991] 3 All ER 866; re D(J) [1982] Ch 237, applied.
Boulton v Sanders (No 2) [2003] VSC 409; Bryant v Blake (2004) 237 LSJS 23; Hill v Hill (No 2) [2001] VSC 135; Monger v Taylor [2000] VSC 304; re HMF (1976) Ch 33; State Trustees Ltd v Hayden (2002) 4 VR 229; Timbury v Coffee (1941) 66 CLR 277, considered.

HOFFMANN v WATERS
[2007] SASC 273
Testamentary Causes Jurisdiction

DEBELLE J. Where a person lacks testamentary capacity, the court may, pursuant to s 7 of the Wills Act 1936, make an order authorising the making of the will on behalf of that person. On 17 July, I heard an application pursuant to s 7 on behalf of a person who has severe intellectual disabilities. I made an order authorising the making of a will. I said I would later publish reasons for the order. These are the reasons.
The application was made by the mother of Adam Troy Waters, who I will refer to as “Adam”. Adam is aged 31 years. He was born on 15 January 1975. His parents were married. There were three children to the marriage. Adam is the eldest child. Another son was born in 1977 and a daughter in 1980.
In 1978, when only three years old, Adam was struck by a motor car. He suffered serious head and brain injuries. He is now intellectually disabled. He has impaired speech development. The medical evidence is that he is unable to express himself but is able to respond to some questions with a single word.
By his father as next friend, Adam instituted an action in this court claiming damages. On 8 August 1986, he recovered judgment in the sum of $492,893.49 and costs. Public Trustee was appointed manager of his estate pursuant to the Aged and Infirm Persons’ Property Act 1940. The order also restricted Adam’s testamentary capacity by permitting him to make a will only with the consent and in the presence of Public Trustee.
In 1988, Adam’s parents separated. They were divorced in 1990. The decree nisi became absolute on 10 April 1990. On 19 May 1989, by order of the Family Court of Australia, Adam’s mother was granted guardianship and custody of the three children of the marriage.
Adam’s father discharged his obligations in respect of maintenance for the three children of the marriage by a payment of $20 in each week for each of Adam’s siblings but made no payment for Adam. He visited the children on a regular basis until 1994. He did not on any occasion have any of the children to stay with him overnight. Since 1994, contact between Adam’s father and the three children has been intermittent.
In 1994, Adam’s mother suffered a breakdown. For the next 10 years Adam was placed in care at Anglicare. While in care, his mother visited him and took him on outings on a weekly basis subject to the vicissitudes of her own health. If unable to visit him, she contacted him by telephone. Since December 2004, Adam’s mother has been his full-time carer.
Public Trustee continues to manage Adam’s estate. According to Public Trustee, the value of the estate at 13 July 2007 is $797,496.34. The assets of his estate are cash, units in an investment trust, the house property in which he resides with his mother, and a motor car. The car is used to take Adam to Comrec Australia at Elizabeth Downs four days in each week.
Adam’s mother has applied for an order pursuant to s 7 of the Wills Act authorising the making of a will on Adam’s behalf. Notice of the application has been given to Adam’s father, to his brother and sister, to the Public Advocate and to Public Trustee. The Registrar of Probates appointed Ms McEwin, a solicitor, to be guardian ad litem on behalf of Adam. Adam’s father stated through his solicitor that he did not wish to be heard on the application and would abide the order of the Court. Adam’s siblings did not enter an appearance. However, they were present in court on the hearing of the application. In answer to questions from me, each consented to the application. The Public Advocate appeared at the hearing and supported the application. Public Trustee and Ms McEwin, as guardian ad litem, did not oppose the application.
Permission to make the Application
Section 7(1) of the Wills Act provides that an application may be made only if the applicant obtains the permission of the Court to do so. This requirement has been included to provide a process by which to screen out baseless or unmeritorious applications and, in particular, baseless claims that a person lacks testamentary capacity: Monger v Taylor [2000] VSC 304 at [22]; Boulton v Sanders (2004) 9 VR 495 at [11]; Bryant v Blake (2004) 237 LSJS 23 at [25]. The application for leave can be heard at the same time as the substantive application. As is apparent from the reasons which follow, Adam at present lacks and there is no likelihood that he will ever have testamentary capacity. He has a substantial estate. These are good reasons to grant permission to make the application.
Questions to be Determined
Subsection (3) of s 7 of the Wills Act provides the matters upon which the Court must be satisfied before making an order pursuant to s 7. Subsection (4) lists matters which the Court must take into account when determining whether an order should be made. Section 7(3) and (4) are in these terms:
(3)     Before making an order under this section, the Court must be satisfied that –
(a)     the person lacks testamentary capacity; and
(b)     the proposed will, alteration or revocation would accurately reflect the likely intentions of the person if he or she had testamentary capacity; and
(c)     it is reasonable in all the circumstances that the order should be made.
(4)In considering an application for an order under this section, the Court must take into account the following matters:
(a)     any evidence relation to the wishes of the person;
(b)     the likelihood of the person acquiring or regaining testamentary capacity;
(c)     the terms of any will previously made by the person;
(d)     the interests of –
(i)    the beneficiaries under any will previously made by the person;
(ii)any person who would be entitled to receive any part of the estate of the person if the person were to die intestate;
(iii)any person who would be entitled to claim the benefit of the Inheritance (Family Provision) Act 1972 in relation to the estate of the person if the person were to die;
(iv)any other person who has cared for or provided emotional support to the person;
(e)     any gift for a charitable or other purpose the person might reasonably be expected to give by a will;
(f)    the likely size of the estate;
(g)     any other matter that the Court considers to be relevant.
Section 7(12) defines “testamentary capacity” to mean the capacity to make a will. A note to that definition states:
The cause of incapacity to make a will may arise from mental incapacity or from physical incapacity to communicate testamentary intentions.
A person has testamentary capacity, that is to say, a person is capable of making a will if that person is of sound mind, memory and understanding at the time of signing the will. What constitutes testamentary capacity was explained by Cockburn CJ in Banks v Goodfellow (1870) LR 5 QB 549 at 565:
It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.
As Hood J noted in In the Will of Wilson (1897) 23 VLR 197 at 199, the person must, therefore, have
·sufficient mental capacity to understand what he is doing, that is to say, that he is by will giving his property to particular persons;
·have the capacity to realise the extent of his real and personal property he is dealing with by the will; and
·sufficient mental capacity to understand and weigh the claims which naturally ought to press upon him.
In order that a person should rightly understand these matters, it is essential that his mind should be free to act in a natural, regular and ordinary manner. In the Will of Wilson was approved by Dixon J in Timbury v Coffee (1941) 66 CLR 277 at 283.
I am satisfied that Adam presently lacks testamentary capacity and that there is no likelihood that he will ever acquire testamentary capacity. The medical evidence establishes that he was severely injured and has never had any understanding of any of the issues relevant to the making of a will. He does not understand the concept of a will and is not able to provide instructions as to how his estate should be distributed.
The Proposed Will
The proposed will appoints Adam’s brother and sister as executors and trustees. Each is willing to act in that capacity. The will gives Adam’s estate to his trustees upon trust to pay his debts and to hold the residue on trust for his mother provided that she survives him by 28 days. If she does not survive him, the residue of the estate is to pass to such of Adam’s brother and sister as survive him and if both survive in equal shares as tenants in common. There is a substitution clause by which the children of each sibling may take the share of the deceased parent if that parent should die before Adam.
The Likely Intention of the Testator
In the discussion which follows, I will refer to a person who lacks testamentary capacity as the “intended testator”.
Section 7(3)(b) requires the Court to be satisfied that the proposed will would accurately reflect the likely intentions of the intended testator. By what process is the Court to determine provisions which would “accurately reflect the likely intentions” of the intended testator? The terms of s 7(4) provide little guidance to the Court on that question especially in the case of an intended testator who has never made a will and who has never had the mental or intellectual capacity to consider how he would like to distribute his estate.
Since 1969, Courts of Protection in England have been invested with the power to authorise the making of wills on behalf of those who lack mental capacity to do so: see ss 95 to 97 of the Mental Health Act 1983 (UK) and its predecessor the Mental Health Act 1959. Section 95 requires the court to make “provision for other persons or purposes for whom or which the patient might be expected to provide if he were not mentally disordered”. In re D(J) [1982] Ch 237 at 243-244 Sir Robert Megarry V-C stated some guidelines. Sir Robert was then dealing with a person who had made a will some 20 years earlier and who was suffering from senile dementia. Notwithstanding the different factual situation, some guidance is provided by the principles he outlined.
1It is to be assumed the patient is having a brief lucid interval at the time when the will is made.
2It is to be assumed that during the lucid interval the patient has a full knowledge of the past and a full realisation that as soon as the will is executed he or she will lapse into the actual mental state that previously existed with the prognosis as it actually is.
3It is the actual patient who has to be considered, not a hypothetical patient. The Court is not concerned with the patient on the Clapham omnibus. That is because the will is to be made by the Court and so by an impartial entity skilled in the law rather than the actual patient whose views while still of a sound disposing mind might be idiosyncratic and far from impartial. The Court must, therefore, take the intended testator as he or she was before losing testamentary capacity. Explaining this principle Megarry V-C said:
But subject to all due allowances, I think that the Court may seek to make the will which the actual patient, acting reasonably, would have made if notionally restored to full mental capacity, memory and foresight. If I may adapt Dr Johnson’s words, used for another purpose, the Court is to do for the patient what the patient would fairly do for himself, if he could.
4During the hypothetical lucid interval the patient is to be envisaged as being advised by competent solicitors who will draw to his or her attention the matters which a testator should bear in mind.
5In all normal cases the patient is to be envisaged as making a broad brush to the claims on his bounty rather than an accountant’s pen. Megarry V-C added (at 244):
There will be nothing like a balance sheet or profit and loss account. There may be many to whom the patient feels morally indebted; and some of that moral indebtedness may be readily expressible in terms of money, and some of it may not. But when giving legacies all shares of residue few testators are likely to reckon up in terms of cash the value of the hospitality and gifts that he has received from his friends and relations, and then seek to make some form of testamentary repayment, even if his estate is large enough for this. Instead, there is likely to be some general recognition of outstanding kindnesses by some gift which in quantum may bear very little relation to the cost or value of those kindnesses.
In re C [1991] 3 All ER 866 the application was to make a will for a person born with a severe mental disability. She had an estate of £1.6 million. Hoffmann J said that in forming a view of what might be expected by an intended testator who has never enjoyed a rational mind, the court must assume that the patient would have been a normal decent person who would have acted in accordance with contemporary standards of morality. He said (at 870):
I recognise the difficulty in forming a view of what might have been expected from a person who has never enjoyed a rational mind. But I think that in those circumstances the court must assume that she would have been a normal decent person, acting in accordance with contemporary standards of morality. In the absence of actual evidence to the contrary, no less should be assumed of any person and in this case there is nothing to displace such an assumption. A person in the position of Miss C, looking back over her life, would in my view have been influenced by two principle considerations. First, that she had spent the whole of her life in the care of the community, as embodied in the national health service, the hospital and voluntary mental health charities like the Friends of the Hospital and the Citizen Advocacy Alliance. Secondly, that she had derived her fortune from being a child of a family. She would therefore in my view have felt moral obligations to show recognition to the community and to her family. Once one has arrived at the conclusion that the disposition of her property would have been guided by these principles, I do not think it is necessary for the court to be satisfied that the patient would definitely have chosen one particular way of giving effect to them rather than another. A distribution which can be rationally justified as a way of giving effect to these principles would in my view be a provision which the patient ‘might be expected to provide’, even though a somewhat different distribution could also be described. The court cannot of course indulge its own whims in these matters. The gifts and will it makes for the patient ‘might be expected to provide’. But I observe that the statute, recognising the difficulty of arriving at any certainty in these matters, says ‘might’ rather than ‘would be expected to provide’. In matters of detail, there must be a range of choices which would be equally valid.
The proportions in which a person in the position of Miss C would wish to give effect to these two principles must depend upon all the circumstances, including her relations with her family, the services which have been rendered to her by strangers and the size of her fortune. Miss C’s estate is relatively large and this enables her to satisfy in full the claims of both community and family. I think that she would have recognised that although none of her family had ever been to see her, this was not an account of any lack of feeling on their part. None of them appear to have known of her existence. Taking her family as a whole, therefore, I think that she would have wished to distribute her estate equally between them and the community.
Section 7 of the Wills Act does not include the expression “might have been expected to provide” as appears in the legislation in the United Kingdom. Notwithstanding the absence of that expression, it is manifestly clear that is an appropriate factor to consider. It is a factor which is directly relevant to the question whether the proposed will would accurately reflect the likely intention of the intended testator. I respectfully agree with Dodds-Stretton JA in Boulton v Sanders at [54] that care should be taken in applying the English decisions which are grounded on a different statutory provision. However, in many cases such as this, where the person who lacks testamentary capacity has never been able to comprehend what is involved in making a will, it will be especially difficult, if not quite realistic, for the Court to be able to determine what his likely intentions are. In other cases, it might be less difficult to determine the likely intention of the person who lacks testamentary capacity. In State Trustees Ltd v Hayden (2002) 4 VR 229 Mandie J applied the principles in re D(J) and in re C. Each case will depend on its own facts and circumstances. In this present case, it is appropriate to apply the approach in England.
It is relevant to note the disposition of Adam’s estate if he were to die intestate without having married. In that event, his estate would be divided equally between his father and mother or such of them as survive him. If neither survived him, his estate would be equally divided between his brother and sister. See s 72(I) and s 72(J) of the Administration and Probate Act 1919.
Adam’s father has only infrequently communicated with him since 1994. His mother has cared for him except for the period of 10 years when she was recovering from her mental breakdown. She continues to care for him and is his full-time carer. Ms McEwin, as Adam’s guardian ad litem, expresses the view that her observations are that Adam’s mother is devoted to her son and that Adam is happy and well cared for at home. There is no evidence that Adam’s life expectancy has been shortened by the injuries to his brain. In the ordinary course, it is unlikely that he will die before his mother and father.

The will that is proposed is of a kind that one would reasonably expect would be made by a young man whose mother has cared for him and who has had little contact with his father. Similarly, the provision by which Adam’s siblings will take if Adam survives his mother is the kind of provision commonly made in circumstances such as these. It might be added that, if Adam were to predecease his mother, she would have a stronger claim to his estate than his father. In reaching this conclusion, I have considered whether Adam’s father would be entitled to a share of his estate under the Inheritance (Family Provision) Act 1972. While he has provided a measure of financial support for his son, he has not cared for his son in the same manner nor to the same extent as Adam’s mother and has had no contact with him for more than 12 years. I do not think that he has a claim: see s 6 of the Inheritance (Family Provision) Act.
I have had regard to all of the factors prescribed by s 7(4). I do not believe that there is any other factor which requires consideration. I am satisfied that the will proposed by Adam’s mother is a will which is suitable for the Court to authorise.
Costs
Section 7(8) of the Wills Act provides:
In determining an application under this section, the courts may make such incidental orders relating to costs or other matters as it thinks fit.
This provision clearly invests the Court with a wide discretion as to costs. The Wills Act does not provide any guidance as to the kind of order that should be made. In cases in the testamentary causes jurisdiction, the ordinary rule is the costs of contending parties will follow the event. One exception to that rule is where the litigation has been occasioned by the conduct of the testator in which the case the costs of parties are paid out of the residue of the estate of the testator.
A number of competing considerations bear upon what order should be made as to costs on an application under s 7. Where a will already exists, the contending parties are either seeking a benefit from the estate or are seeking to protect an existing benefit from the estate under the existing will: Hill v Hill (No 2) [2001] VSC 135 at [9]. In such a case any order for costs might follow the event. In Victoria, costs followed the event in Hill v Hill (No 2) and in Boulton v Sanders (No 2) [2003] VSC 409.
In a case like the present, where no will exists and the will is proposed on behalf of a person who has never had testamentary capacity, a number of interests might properly be before the court. It is desirable that all relevant interests are before the court: re HMF (1976) Ch 33 at 38. I agree with Byrne J in Hill v Hill (No 2) at [10] that it would be a matter for regret if those persons were dissuaded from providing assistance to the court for fear that they might be obliged to do so at their own expense.
In England, subject to the overriding discretion of the court, the costs of a successful applicant and the cost of other interested parties are paid on a common fund basis out of the patient’s estate. The costs of the Official Solicitor are paid on a solicitor and own client basis out of the patient’s estate. This practice might be affected by the fact that the assets of a patient under the Mental Health Act 1983 (UK) are subject to the control of the court.
In my view, there is a strong argument that, since parties are seeking to advance individual interests, each party should bear his own costs. Such an order was made in Monger v Taylor. That consideration must be weighed against the fact that there is a public interest in a person being able to make a will so as to enable the orderly disposition of his assets on death. So, where the applicant is the guardian of the person who lacks testamentary capacity, there might be good reason to allow the applicant to recover his costs out of the estate of the person who lacked testamentary capacity. Another relevant factor is that the estate might be small or, as in this case, be intended to provide for the maintenance, well-being and support of the person who lacks testamentary capacity. In either case, it would be entirely inappropriate for the estate to be depleted by the costs of an application under s 7. Plainly, careful consideration must be given to the issue of costs. The order as to costs will depend upon the individual facts and circumstances of each case.
In this case, the parties have adopted a realistic attitude as to costs. Adam’s father very properly does not seek an order for costs and neither does the Public Advocate or Public Trustee. The only applications for costs were made by Adam’s mother as applicant and by Adam as the defendant. The application under s 7 was made by Adam’s mother as his carer. It was a genuine application and, although she benefits under the proposed will, it appears to have been made with proper altruism. Plainly, it is proper that Adam’s costs be paid out of the estate.
Law Reform
There is a real question whether the obligation to obtain the permission of the Court to make an application pursuant to s 7 is an otiose and unnecessary step. As noted in paragraph 10, the need to obtain leave is a process intended to screen out frivolous or vexatious or unmeritorious claims. However, no application will have any prospects of success unless the applicant is able to establish that the person for whom the Court is to authorise a will lacks testamentary capacity. Lack of testamentary capacity signifies an inability to form an intention as to how to dispose of one’s estate. It signifies mental incapacity, not physical incapacity. Generally speaking, it is a fact which will have to be established by evidence of a neurologist. The fact that it is necessary to establish lack of testamentary capacity is a sufficient safeguard to prevent frivolous, vexatious or unmeritorious applications. In its report, Wills for Persons Lacking Will-Making Capacity (1992) LRC 68, the New South Wales Law Reform Commission said at paragraph 2.14 that permission to make an application should be required to screen out applications by relatives who might bring an application to ascertain what provision, if any, the person who is the subject of the application has made for them in a will. The cost of making an application are relatively substantial. If an applicant brings a frivolous, vexatious or unmeritorious claim, those costs will be payable by the applicant who will be subject to the risk of paying the costs on an indemnity basis. That is, I suggest, a sufficient disincentive.
I suggest this reform because the cost of an application for permission to make an application under s 7 adds an unnecessary cost burden on what is already an expensive process.
In a number of cases, applications are made under s 7 on behalf of persons who have received damages for severe brain injuries sustained in a motor vehicle or other accident and who will never have testamentary capacity. The general rule is that the costs will be paid out of the estate of that person. The liability to costs could result in a significant depletion of an estate which is intended to provide for the well-being of the person who lacks testamentary capacity. It is desirable to keep the costs to a minimum. For that reason, it is desirable to delete the requirement for permission to bring an application.
Consideration should also be given to amending the terms of s 7(3) to amend the requirement that the Court must be satisfied that the proposed will would accurately reflect the likely intention of the person lacking testamentary capacity. That is a wholly unrealistic requirement. In this respect, it is relevant to note that the Probate Users Committee of the Supreme Court of Victoria has recommended that the Wills Act in Victoria be amended along the lines of the legislation in the United Kingdom.
Conclusion
For these reasons, I made the following orders:
1The plaintiff be and is hereby permitted to make this application.
2The Court approves and authorises the making of a will on behalf of the defendant in the terms of the copy will annexed hereto.
3The will be signed by the Registrar of Probates in the presence of Public Trustee and be sealed with the seal of the Court.
4The will be retained by the Registrar of Probates and not be withdrawn from the deposit with the Registrar of Probates by or on behalf of the defendant unless by an Order of the Court made under Section 7(11) of the Wills Act 1936.
5The costs of and incidental to this application and order be taxed as between solicitor and client or agreed between the solicitors for the parties and Public Trustee and paid by Public Trustee from funds held by Public Trustee for the defendant.