Hunter v McKinnon No. Scciv-68-2051

HUNTER v McKINNON
[2002] SASC 13
Civil

MULLIGHAN J This is an application made by Andrew Stafford Hunter (“the applicant”) on 23^rd April 2001 to vary a protection order made by a Deputy Master on 20^th February 1969. That order was made with respect to the whole of the estate of the late Donald Charles McKinnon (“Mr McKinnon”) who was born on 18^th March 1947 pursuant to s 7 of the Aged and Infirm Person’s Property Act 1940.
Mr McKinnon was, from an early age, mentally handicapped having developed schizophrenia in 1965 from which he never recovered. His mental handicap was substantial. It is unnecessary for present purposes to describe the extent of it in any detail. It is sufficient to say that he was unreliable and incapable of taking any responsibility. He was inclined to wander away from home and suffered paranoia and from hallucinations. He required constant care and supervision and was totally incapable of managing his own affairs including financial matters.
He was the illegitimate son of Dorothy Jean McKinnon (“Ms McKinnon”) late of Mount Gambier who died a spinster on 14^th February 1956.
Through inheritance, Mr McKinnon became relatively wealthy. The late Catherine Reid was a sister of Ms McKinnon and she married William James Reid. The respondent, Heather Mary Moody, is the only child of that marriage.
Mr McKinnon lived with his mother, Mr Reid and Mrs Reid until her death in June 1948 and Ms Moody for some years. Upon the death of Ms McKinnon, she left, by her last will, all of her estate to Mr McKinnon. He lived for a time in Mount Gambier with his mother before her death and the grandmother of Ms Moody. He returned to live with Mr Reid in October 1963.
Mr Reid made the application for the protection order and pursuant to the order he was appointed manager to take control of, and manage, the whole of Mr McKinnon’s estate.
On the application of Mr Reid, the protection order was varied by the same Deputy Master on 24^th April 1969 in respects which are irrelevant to the issues raised by the present application. On 24^th March 1983, upon the application of Mr Reid, a Master of the Court appointed Donald Ross Hunter and Elizabeth Mary Hunter as managers of the whole of the estate of Mr McKinnon and Mr Reid’s position as manager ceased upon his filing of a satisfactory statement and account. At that time, he was aged 82 years and was unable to continue to satisfactorily discharge all of his duties as manager as he was, from time to time, under care in hospital. Mr and Mrs Hunter are the parents of the present applicant.
Paragraph 7 of the protection order made on 20^th February 1969 is as follows:
“7.That the protected person do not hereafter make any will or testamentary disposition except with the consent and in the presence of Public Trustee.”
Public Trustee was notified of the order on 25^th February 1969 and received a copy of the order on 3^rd March 1969.
That paragraph of the order was not altered or varied in any way by the orders of 24^th April 1969 or 24^th March 1983. The firm of solicitors then known as Messrs J.L.S. and H.K. Treloar acted for Mr Reid as agents for Messrs Brown and Aston, his solicitors in Mount Gambier, when the protection order was made and subsequently.
On 9^th November 1970 Mr Reid, by letter, requested Public Trustee to arrange an appointment on 16^th November 1970 for Mr McKinnon to make his will with Public Trustee. Mr Reid expressed the wish that the will be executed on the same day. Mr McKinnon and Mr Reid attended at the Office of Public Trustee in Adelaide on the appointed day and instructions were given to a wills officer employed by the Public Trustee for a will. The instructions are set out in a pro forma document of the Public Trustee and were signed by Mr McKinnon. At the foot of the first page, the following appears:
“Send will to the Manager ANZ Banking Group at Mount Gambier for execution.”
Thereafter follows the signature of Mr McKinnon. The instructions given were to dispose of the whole of his estate to the applicant.
A last will and testament was prepared in accordance with those instructions. The applicant, who was then aged about six years was named as the sole beneficiary. On 2^nd December 1970 the will was sent with a letter under the title of Deputy Public Trustee to the Manager of the Australia and New Zealand Banking Group Ltd at Mount Gambier. He was informed by that letter that the will had been forwarded to him “so that it may be executed in the presence of yourself and another officer”. He was also informed that Mr McKinnon was unable to visit the Offices of Public Trustee in the near future which appears to have been the reason for seeking his assistance. An officer of Public Trustee wrote to Mr McKinnon under the hand of Deputy Public Trustee on the same day informing him that the will had been sent to the Bank Manager and directing him to contact him to make arrangements to execute the will.
Mr McKinnon attended at the office of the Bank Manager and executed the will in his presence and that of another person whom I assume was an employee of the Bank. The executed will, together with a certificate of execution, was sent by the Bank Manager to Public Trustee on 7^th December 1970. The certificate was signed by the Bank Manager and included the statement that Mr McKinnon had notified him that the will expressed “his present testamentary wishes” and that he appeared “to be of sound disposing mind …”. Public Trustee acknowledged receipt of the will by letters each dated 10^th December 1970. In this will the applicant is named as the sole beneficiary.
On 11^th December 1970 Mr L H Treloar, solicitor, a member of the firm of Messrs J.L.S & H.K. Treloar, was notified by Public Trustee that the will was invalid. There is a note of that conversation in the records of Public Trustee which reads as follows:
“I rang Mr. L.H. Treloar. He is agent for Brown and Aston. He will contact his principals and advise them will is invalid and will explain procedure to be followed and will ask for P.P. to be brought to Adelaide so that further consideration can be given as to whether P.P. is of testamentary capacity with a view to preparing a will for him. He will also take up the question of nomination of an auditor.
signature? (indecipherable) 11.12.80”
“P.P” means “protected person” and refers to Mr McKinnon.
On 26^th February 1971 Public Trustee received a letter from Mr Treloar confirming that Mr Treloar had written to the Mount Gambier solicitors on 21^st December 1970 “concerning the fact that the will had not been made in accordance with the protection order”. It was suggested that Mr McKinnon make a new will “in accordance with the terms of the protection order”.
Public Trustee arranged for Mr McKinnon to be interviewed by Mr Treloar and Mr Wilkins, the Deputy Public Trustee, on 30^th June 1972. Mr Reid accompanied Mr McKinnon. Notes made by Mr Treloar indicate that Mr Reid told him that he felt that Mr McKinnon probably had the capacity to make a will. Mr Treloar said that he needed to interview Mr McKinnon separately. Mr Reid agreed and the interview proceeded in the presence of Mr Wilkins.
Mr Treloar questioned Mr McKinnon about various simple matters and I set out the salient features of the interview as revealed by the notes. Mr McKinnon could say his full name and spell his surname. He correctly stated his address, age and date of birth. He said he lived with Mr Reid whom he described as an uncle and said that he did not know who were his relatives, except that he had an uncle in Port Lincoln by the name of Bob McKinnon. He said he did not have any brothers or sisters. He did not know what was a will and said that he had never made a will. He said he did not know if he had any money or assets. He correctly named his mother and said that he did not know what had happened to her money. He described Charles Hector McKinnon as an uncle and said that he had died and his will was “with Elders”. He said that he did not know what happened to the property of his uncle and that Mr Reid gave him money but he did not know if Mr Reid was holding money on his behalf. He said he did not care who has his money.
Mr McKinnon said that the applicant was Don Hunter’s boy and was no relation. He said he saw the applicant at weekends and he was a boy under the age of 10 years. Again when asked, he said that he did not know what was a will.
The note of Mr Treloar continues:
“Although Donald appeared to understand the questions put to him and was able to give answers to the questions he seemed to have no idea about financial affairs or about general day to day matters.
He did not seem to have an understanding of three of the basic requirements of a person making a will :
1.He did not appear to understand what a will was or the nature or effect of a will. Nor did he remember that he had made a previous will.
2.He did not have any idea what his assets consisted of.
3.He did not appear to have any real understanding of what persons might have a claim on his estate or who should benefit if he had any assets.
He did not appear to be agitated or upset and apart from the questions abovementioned there was general conversation with him. Donald was then taken out of the room.”
Mr Treloar then conferred with Mr Wilkins and told him that he did not consider that Mr McKinnon had capacity to make a will. Mr Wilkins agreed. They called in Mr Reid and advised him accordingly giving their reasons. Mr Reid contested some of those reasons saying that the reason he could not have answered some of the questions was probably because he was in the room alone with Mr Treloar and Mr Wilkins. Mr McKinnon was brought into the room again and Mr Reid was present. Mr McKinnon again said that he did not know what was a will or what were his assets. He did not remember having made a will and said that he did not have any close friends. He said that his mother had made a will “with Elders”. He was asked what he would like to happen to any money he might own. He said he was not sure and then said “Give it to Andrew Hunter I suppose”. He said he played football with the applicant. When he was asked if he knew in what way the property could be given to the applicant, he said “By will”. He was asked if he knew if he had any money to give and said “No”. He said he had a life interest in the property at Drumfern and that he received his money from Mr Reid. He said he did not know if Mr Reid was holding any money for him.
When asked if he was frightened of Mr Treloar in any way he laughed and said “No”. He said that he did not know what was the month of the year.
Mr Treloar again told Mr Reid that in his opinion Mr McKinnon did not have testamentary capacity at that time and that if he thought that Mr McKinnon would be better in his own environment, it would be advisable for his own doctor, Dr Moore, to test his capacity at Mount Gambier. Mr Treloar said that if Dr Moore was of the opinion that he did have capacity, Mr Reid should confer with Mr Aston of Messrs Brown and Aston and consideration could be given to what further action should be taken.
The note concludes as follows:
“We pointed out the problems which could be caused by the existing will and indicated that we felt that it would be highly desirable that something be done about the matter now rather than later on.”
On 10^th August 1972 Mr Treloar wrote to the Public Trustee about these interviews and mentioned the advice which had been given to Mr Reid. The letter concludes:
“In a recent letter to us, Mr Aston informed us that he has discussed the matter with Mr Reid who proposes to make another effort to have Donald make a will and he will contact us further concerning the matter in due course.”
No further action was taken by Mr Reid, the subsequent managers, Mr Hunter or Mrs Hunter or anyone else on behalf of Mr McKinnon. He died on 21st May 1999 never having married or without issue. There is no other document purporting to be a will.
The applicant seeks one of the following orders:
1.for the recall, setting aside or revocation of paragraph 7 of the protection order, or
2.varying that paragraph nunc pro tunc by inserting after the words “Public Trustee”, the words “or pursuant to a request made by Public Trustee that the will be executed other than in the presence of Public Trustee”.
It is necessary to say a little more about the family. Ms McKinnon, Ms Reid, Alexander Robert McKinnon and Hector Charles McKinnon were the children of the late Dora McKinnon. Donald Ross Hunter is the son of a brother of Mr Reid. Mr Hunter and Mrs Hunter have four children, Gary Hunter and Jennifer Hunter whom they adopted, the applicant and James Stafford Hunter. The applicant is not a blood relative of Mr McKinnon.
Alexander Robert McKinnon had three children, Graham John McKinnon, Nola Hollitt and Catherine Jane Griss. They, and Mrs Moody, are first cousins of Mr McKinnon. They are his next of kin. If the will purported to have been made by Mr McKinnon remains ineffectual, they will inherit his estate as he will have died intestate. They are respondents to this application.
Mention was made in the note of Mr Treloar of the property known as Drumfern which is situate in the State of Victoria. It was owned by uncles of Ms McKinnon. Upon their deaths, she and her sister, Mrs Reid, inherited the property in equal shares. In about late 1947, Mr Reid, Mrs Reid, Mrs Moody, Mr McKinnon and his mother and grandmother moved to the property. Mrs Reid died intestate with the consequence that Mr Reid owned one-third of a half share in the property and Mrs Moody owned two-thirds of that interest. Mrs Moody continued to live at the property and undertook most of the housework as well as farm work. Mr Reid assumed the management of the property.
About a year after the death of Mrs Reid, part of the Drumfern property was sold and a dwelling house was purchased in Mount Gambier for Mr McKinnon, his mother and his grandmother. It was registered in the name of Ms McKinnon. When she died, Mr McKinnon was aged about eight years. He inherited the estate of his mother which included a one-half interest in Drumfern. The property was leased by Mr Reid. In 1962 Mr McKinnon returned to live at Drumfern.
Mrs Moody had married in November 1963 and left Drumfern. Mr McKinnon and Mr Reid continued to live at the property until about 1970. Mrs Moody and her husband returned to Drumfern in about 1967 and built a house on the property which they occupied.
When Mr Reid left Drumfern, he purchased a house in Mount Gambier from Mrs Hunter, the mother of the applicant. Thereafter Ms Moody leased the that part of Drumfern which was owned by Mr Reid and Mr McKinnon.
Mrs Moody has deposed in an affidavit in these proceedings as to various property transactions involving Mr Reid and the estate of Mr McKinnon which have favoured the applicant. Also, upon his death, Mr Reid left most of his estate to the applicant. These transactions are of no relevance to the present application and it is unnecessary to relate the substantial benefits which Mr Reid provided for the applicant. Also, the allegation that the applicant is the illegitimate son of Mr Reid is irrelevant for present purposes. It is not as yet proved and I have no regard to that allegation. According to Ms Moody, soon after Mr Hunter and Mrs Hunter became the managers of the estate of the deceased on 24^th March 1983 Mr McKinnon was placed in institutionalised care in Adelaide for a number of years and later returned to live in Mount Gambier in a home for disabled persons.
None of these matters are relevant to issues to be resolved on this application. I only mention them in order to say that I have not had regard to them.
I now turn to the basis of the application.
Section 29(1) of the Act provides:
“29(1)The Court may direct in any case that any testamentary provision by a protected person after the making of a protection order shall be made only after such precautions as the court thinks fit to direct, and any testamentary provision made otherwise than as the court shall so direct shall be ineffectual for all purposes.”
It may be seen that the purported last will and testament of the deceased is ineffectual for all purposes as it was not made in accordance with paragraph 7 of the protection order. The power to make either of the orders sought by the applicant is said to be found in R 3.04(5) and R 84.12 of the Supreme Court Rules 1987. Rule 3.04 provides general powers of the Court and includes:
“3.04The Court shall have power to act at any time to give effect to the purpose of these Rules and, without limiting the generality of this power, it may in any case in which it thinks it is just to do so:
(f)Correct or revoke any order, correct, revoke or vary any order by subsequent order.”
Rule 84.12 provides:
“84.12The Court may vary or set aside a judgment or order at any time if the justice of the case so requires.”
The first submission made by Mr Roder, who appeared for the applicant, is that an order should be made revoking paragraph 7 of the protection order because there was no evidence before the Deputy Master as to the appropriateness or otherwise of that order.
The submission that there is no factual basis to support that part of the order is rejected. Dr Moore, a medical practitioner in Mount Gambier, deposed in an affidavit dated 17^th December 1968 filed in support of the application for the protection order that he had known the deceased for a period of at least ten years and had last attended him on 21^st August 1968. He went on to depose as follows:
“3.The respondent who is 21 years of age developed schizophrenia in 1965 and was treated in the Mount Gambier Hospital and in the Glenside Mental Hospital Adelaide. He has never recovered from this illness and requires regular medication. He is quite unreliable and is incapable of taking any responsibility. He is inclined to wander away from home and he sometimes imagines that his relations are plotting against him and he has expressed a fear of being poisoned. He has suffered from hallucinations and heard imaginary voices. He needs constant supervision and attention which will be required indefinitely.
4.The respondent’s mental condition is such that he is quite incapable of managing his own affairs and it is most unlikely that he will ever recover sufficiently to be able to do so.
5.In my opinion it would be in the best interests of the respondent that a protection order should be made pursuant to the Aged and Infirm Persons Property Act 1940-1965.”
Reference has been made to the opinions expressed by Mr Treloar and Mr Wilkins some 18 months after the protection order was made and to the responses of Mr McKinnon to questions asked of him by Mr Treloar. Mr Treloar was an experienced legal practitioner in matters of this nature even nearly 30 years ago when he saw Mr McKinnon. Whilst his opinion about the capacity of Mr McKinnon to make a will is not decisive it is a matter of considerable weight. The responses of Mr McKinnon to Mr Treloar during the interview on 30th June 1972 indicate lack of capacity to make a will. The evidence placed before me on this application establishes that Mr McKinnon had a long-standing and constant mental illness and had been in close care and supervision probably since he developed schizophrenia in 1965. His need for care and supervision existed before and after the making of the protection order. There is no suggestion of his having episodes of responsibility and clear thinking.
The Deputy Master made the protection order upon the application of Mr Reid who obviously considered it to be necessary. Mr Reid had legal advice from Mr Aston at the time. In his affidavit sworn on 7th February 1969 in support of the application for the protection order, he deposed that Mr McKinnon had lived with him since 1956 except for a period of two weeks when Mr McKinnon was in Cleland Receiving Home. He said that Mr McKinnon had been mentally retarded since an early age. He went to school until the age of nine years when his teacher said he could not be taught any more. He could talk and read a little. He could do some farming work but was inclined not to finish jobs and to wander off. He could purchase items at a shop but had no idea of the value of money. It was necessary to give him four tranquillisers a day or he would walk off or talk to himself and become agitated. He had not benefited from treatment. He also deposed to having accepted the opinion of Dr Moore which I have mentioned.

Also, Mr Reid deposed in this affidavit that he was desirous that the Court should restrict the testamentary capacity in precisely the manner contained in paragraph 7 of the order.
It is significant that after Mr Reid, as the manager of the South Australian estate of Mr McKinnon, had been informed that the purported will was invalid and had received the advice and suggestion from Mr Treloar, nothing further was done about Mr McKinnon making a will. It is reasonable to infer that either Mr Reid accepted that Mr McKinnon lacked capacity to make a will or that when seeking advice he accepted that the Court would preserve paragraph 7 of the order.
I do not regard the certificate signed by the Bank Manager as indicating to the contrary. There is no evidence to suggest that he knew Mr McKinnon, that he carried out any inquiry as to his testamentary capacity or his state of mental health or that he was aware of matters relevant to testamentary capacity. The contents of this certificate could not prevail over the clear evidence of Dr Moore and Mr Treloar and the inference to be drawn from the fact that Mr Reid who was his carer sought the order restricting the capacity to make a will. Also, there is no evidence to suggest that the Bank Manager made any inquiry as to whether the deceased understood the document which was presented to him.
In my view the evidence clearly establishes that at the time the order was made, not only was the protection order desirable but the limitation of the testamentary power of the deceased was fully justified.
Legislation in New Zealand in the same terms as s 29(1) was considered in Re F [1976] 1 NZLR 383. Somers J observed that to circumscribe testamentary power is a serious step and it does not follow that circumstances requiring a protection order necessarily involve the need for testamentary restraint. He went on to say at 384:
“The precautions are intended to be directed, as I think, to two matters. First to ensure the testament is the expression of the testator’s own will; second, that he has the relevant capacity at the time he makes it: see Re K [1937] NZLR 224, 226.”
I respectfully agree with those observations.
In the present case Mr McKinnon made no provision for his next of kin even though he had inherited his property from family members. That is not a matter which necessarily reflects upon the two matters mentioned by Somers J in Re F but they are relevant. However, his mental incapacity clearly established the need to limit his testamentary power.
It is submitted by the applicant that paragraph 7 of the protection order should be varied as proposed so that the execution of the document in the presence of the Bank Manager at the request of the Office of Public Trustee becomes sufficient. It was argued that the Bank Manager could be seen as the agent of Public Trustee for the purpose of execution of a will by the deceased. Furthermore, it was argued that in the circumstances execution of the document was only the executory part of the transaction as Public Trustee has taken instructions for, and prepared, the will.
I reject those arguments. The effect of the order is plain. The Court had decided on the evidence that precautions must be laid down and observed before Mr McKinnon could make a valid will. Those precautions were specified. Public Trustee had to consent and the will had to be made in his presence. These functions could be exercised by Public Trustee, and perhaps Deputy Public Trustee in certain circumstances, but not by anyone else and for good reason. Public Trustee was obliged to make judgments for himself and could employ whatever experts he considered necessary for that purpose. What he could not do was delegate those functions to anyone else except perhaps Deputy Public Trustee. He had to be satisfied that the instructions for the will accorded with Mr McKinnon’s own wishes and that he had relevant capacity. At the time of execution of the document, he also had to be satisfied that Mr McKinnon understood the document.
Regrettably, Public Trustee did not undertake any of these responsibilities probably due to his not being aware that Mr Reid had made the appointment for Mr McKinnon and the purpose of the appointment as the matter was handled by a junior officer.
The Bank Manager could not be seen as an agent of Public Trustee as he could not discharge the function of Public Trustee as laid down by the Court.
There was considerable argument as to whether the Court is now empowered to make either of the orders proposed by the applicant and as to whether R 3.04(f) and R 84.12 can have any application.
The respondents submitted that the Court had no jurisdiction to make either of the orders sought. Section 11(3) of the Act provides as follows:
“Subject as hereinafter provided in this subsection, a protection order shall be determined by the death of the protected person. If for any special reason the court thinks it desirable so to do, the court may direct that the protection order shall remain in force for any period not exceeding two months after the death of the protected person but in any such case and notwithstanding the direction of the court, the protection order shall be determined if grant of probate of the will or administration of the estate of the protected person is granted by the court pursuant to the Administration and Probate Act 1919-1937.”
The Court did make a direction pursuant to that sub-section. Paragraph 4 of the protection order provides that the order remain in force until the expiry of a period of two calendar months after the date of death of Mr McKinnon or until a grant of probate of the will or of the administration of his estate was made by the Court whichever event first occurred.
It may be seen that the protection order by operation of the statute and the terms of the order ceased at the expiration of two calendar months from the death of Mr McKinnon. It is submitted by the respondents that there is no jurisdiction in the Court to vary an order which has been determined.
It is further submitted that R 3.04(f) and R 84.12 exist to assist the Court to ascertain, declare and enforce substantive rights of parties and that they do not authorize the Court to alter substantive rights. On the death of Mr McKinnon his entire estate would eventually be shared by the respondents as next of kin as the purported will is ineffectual and he died intestate. The applicant has no substantive right which can displace the substantive rights of the respondents. It is submitted that no rule of procedure can be used to divert the respondents of their interests in the estate.
The respondents also submitted that this application is an abuse of the process of the Court due to the delay since Mr Reid was informed that the purported will was invalid. They further submitted that the applicant has no standing to bring the application by virtue of s 22(1) of the Act which provides that proceedings remain open for application to be made from time to time by the manager, the protected person, Public Trustee or any relative of the protected person or by any person interested in the estate.
It is not necessary for present purposes to decide the question of jurisdiction or the reach of R 3.04(f) and R 84.12. Even if there is jurisdiction to make either of the orders sought and the discretion under the Rules may be exercised, the application lacks merit and I would decline to exercise the discretion in favour of the applicant for the following reasons. Also it is unnecessary to consider the contention that the application is an abuse of process of the Court or that the applicant has no standing because, as I say, I would not make either order even if these contentions of the respondents should be rejected.
The Court was specifically asked to make the order set out in paragraph 7 by Mr Reid who was well aware of the circumstances of Mr McKinnon. There was good reason to make the order to protect Mr McKinnon’s estate. The obligations conferred upon Public Trustee could not be discharged by anyone else except perhaps his Deputy. There is no evidence to suggest that the Bank Manager purported to discharge these obligations and in any event he could be regarded as the agent of Public Trustee and could not discharge those obligations. Mr Reid knew soon after the execution of the purported will that it was not a valid will. He chose to do nothing about having Mr McKinnon execute a valid will pursuant to paragraph 7 of the order. Likewise the subsequent managers, Mr and Mrs Hunter, did not take any steps for Mr McKinnon to execute a valid will if he was capable of doing so.
It was submitted on behalf of the applicant that the making of either of the orders sought would not necessarily exclude the respondents from sharing the estate of Mr McKinnon as Public Trustee would have to establish that Mr McKinnon had testamentary capacity when the purported will was made. The respondents would be heard upon that matter if they so wished. I do not regard that matter as significant. They should not be required to be involved in legal proceedings unless the will is effectual. It is not effectual unless one of the orders sought is made and there is no sound basis to make either of them.
In my view there is no reason to conclude that “it is just” (R 3.04) that, or that “the justice of the case” (R84.12) requires, either of the orders to be made. On the contrary, either of the orders would, in my opinion, be contrary to the justice of the matter.
The application is dismissed.

[2002] SASC 13

25 January 2002