Ocalewicz v Joyce
[2012] NSWSC 1163
•28 September 2012
Supreme Court
New South Wales
Medium Neutral Citation: Ocalewicz v Joyce [2012] NSWSC 1163 Hearing dates: 12 September 2012 Decision date: 28 September 2012 Jurisdiction: Equity Division Before: Macready AsJ Decision: I propose to set aside the grant of probate in common form and I direct the parties to bring in short minutes to give effect to these reasons
Catchwords: TESTAMENTARY CAPACITY - whether order of South Australian Guardianship Board prohibiting deceased from making a will has effect in New South Wales such that grant of probate should be revoked - full faith and credit provision - s 185 Evidence Act (Cth) - in the alternative, whether the deceased lacked testamentary capacity as a matter of fact Legislation Cited: Crimes Act 1900
Evidence Act 1995 (Cth)
Guardianship Act 1987
Guardianship and Administration Act 1993 (SA)
Guardianship Regulation 2010
Judiciary Act 1903 (Cth)
Succession Act 2006
The ConstitutionCases Cited: An Alleged Incapable Person FCC and the Protected Estates Act 1983, Re (1990) 19 NSWLR 541
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 394
Brandy v HREOC (1995) 183 CLR 245
DEF and the Protected Estates Act 1993, Re [2005] NSWSC 534
EMG v Guardianship and Administration Board of Victoria [1999] NSWSC 501
Harris v Harris [1947] VLR 44
Hernando; Hernando v Sawtell, Re (1884) 27 Ch D 284
Kable v New South Wales [2012] NSWCA 243
PQR and the Protected Estates Act 1983, Re [2005] NSWSC 729
Sweedman v Transport Accident Commission [2006] HCA 8; (2006) 224 ALR 625
Virginie-Pitel v Campbell; Campbell v Virginie-Pitel [2010] NSWSC 1440Texts Cited: Certoma, The Law of Succession in New South Wales, 4th ed
Nygh's Conflict of Law in Australia, 8th ed
Odgers, Uniform Evidence Law
Victorian Law Reform Commission, Guardianship: Final Report 24, April 2012Category: Principal judgment Parties: Mischa Ocalewicz (Plaintiff)
Luise Joyce (Defendant)Representation: M Pesman with S Neumueller (Plaintiff)
L Ellison SC (Defendant)
C P White & Hetherington (Plaintiff)
Roberts Mann Solicitors (Defendant)
File Number(s): 2011/148679
Judgment
These proceedings, which were commenced by statement of claim filed on 6 May 2011, are ones in which the plaintiff seeks an order revoking a grant of probate to the defendant in respect of the will of his late grandfather. The defendant is a daughter of the deceased and an aunt of the plaintiff.
Background facts
The deceased Michael Ocalewicz died on 25 May 2010 aged 87. Probate of the deceased's will dated 6 August 2008 was granted to the defendant in common form on 23 August 2010.
The deceased's wife Anna Ocalewicz died in July 2007. There were two children of the marriage, the defendant Luise Joyce who was born in 1945 and Lana Ocalewicz who was born in 1958. Each of Lana and Luise have two children. Lana is the mother of the plaintiff and his brother Kiefer Jones. The defendant Luise is the mother of Rosina and Samuel Puchala. I will adopt the practice of the parties in referring to the various parties by their first names.
There are two wills of the deceased:
(a) A will dated 21 June 2000 which appointed Lana and Rosina as executors. In the events that have happened, the effect of that will is a pecuniary legacy of $40,000 to Lana and a division of the residue between the four grandchildren (expressed as one part to the plaintiff and Kiefer and one part to Rosina and Samuel). It was made in South Australia;
(b) A second will dated 6 August 2008 which appointed the defendant as executor. In the events that have happened, the effect of that will is a division of the estate between the defendant as to 80% and Lana as to 20%. It was made in New South Wales.
The deceased's estate has an approximate value of $1,037,788.85 comprising:
(i) Bank accounts$12,781.85
(ii) Insurance policy$10,087
(iii) AMP shares$2,920
(iv) Motor vehicle$12,000
(v) Real estate$1,000,000
The real estate is situated in South Australia and the other assets are situated in New South Wales where the deceased was domiciled for some years prior to his death.
The plaintiff's claims
The plaintiff submits that he is entitled to relief on two bases:
(a) The deceased did not have capacity as a matter of law, there being an order of the South Australian Guardianship Board made on 12 May 2008 that the deceased was not to make any will without the consent of the Public Trustee; and
(b) The deceased did not have capacity when he made the second will dated 6 August 2008 in any event.
A further pleaded basis (undue influence) is not pressed. I will deal with the first submission.
Effect of the order of the South Australian Guardianship Board
In the early part of 2008, the defendant made applications in both New South Wales and South Australia that she be appointed the guardian of the deceased. The application in South Australia was supported by medical evidence, which included specific statements to the effect that the deceased lacked testamentary capacity.
Clearly that evidence was the basis for Order 4 made by the Guardianship Board on 12 May 2008. That order was in the following terms:
"THAT the protected person shall not make any will or other testamentary disposition after this date except in the presence of, and with the consent of, the Public Trustee."
The source of the Board's power to make that order was section 56 of the Guardianship and Administration Act 1993 (SA). That section is in the following terms:
"56-Restriction of testamentary capacity of protected person
(1) The Board may direct that any testamentary provisions by a protected person be made only after compliance with such precautions as the Board thinks fit to direct.
(2) If, after the Board has given a direction under subsection (1), the protected person makes a testamentary provision otherwise than in accordance with that direction, the testamentary provision is ineffectual.
(3) Except as provided by subsection (2), nothing in this section affects the law relating to testamentary dispositions."
The defendant was aware of the order at the time she took her father to see Mr Mann to make the second will on 5 August 2008. It is clear that the condition imposed by the Board was not satisfied.
The defendant asserts by paragraph 4 of the defence that the second will is valid because the effect of the section is not to remove testamentary capacity and has no effect where the deceased was domiciled in New South Wales.
It was the submission of the plaintiff that as the bulk of the estate of the deceased is represented by the real property in South Australia and is thus an immovable, the capacity of the deceased to dispose of the Property by will is governed by the lex situs, that is, the law of South Australia. See Re Hernando; Hernando v Sawtell (1884) 27 Ch D 284; Nygh's Conflict of Law in Australia 8th ed at [38.8]; Certoma The Law of Succession in New South Wales 4th ed at [2.50].
It was submitted that the effect of the Order and s 56 was to remove the capacity of the deceased unless certain directions were met. They were not. It was said that this did not require an enquiry into the deceased's capacity in fact, and was not relevantly different to provisions such as section 5 of the Succession Act 2006 (NSW) which invalidates wills made by minors (with some limited exceptions).
An alternative route to the same outcome, it was submitted, is provided by the "full faith and credit" provision contained in s 185 of the Evidence Act 1995 (Cth).
On the first point, as there are some movables in New South Wales and the deceased was domiciled here both at the time of making the will and at the time of his death then his capacity to make a will disposing of that movable property is determined by the law of his domicile. As the present proceedings are to set aside the New South Wales grant of probate if one looked simply to the law in New South Wales then arguably one would have no regard to the South Australian order. It matters not that the preponderance of property is in South Australia. No doubt when it came to the question of resealing the grant in South Australia the application of the law of the situs of the property, namely South Australia, may well lead that court to refuse to reseal the grant.
The more important point is whether this court in determining the matter must have regard to the South Australian provisions as a result of s 185 of the Evidence Act (Cth). That section is in the following terms:
"Faith and credit to be given to documents properly authenticated.
All public acts, records and judicial proceedings of a State or Territory that are proved or authenticated in accordance with this Act are to be given in every court, and in every public office in Australia, such faith and credit as they have by law or usage in the courts and public offices of that State or Territory.
Note: The NSW Act has no equivalent provision for section 185."
A similar provision exists in the Commonwealth of Australia Constitution Act (The Constitution), namely s 118. However the plaintiff did not seek to rely on that section at the hearing given that notice had not been given to the Attorney-General as required by s 78B of the Judiciary Act 1903 (Cth).
Section 185 of the Evidence Act (Cth) applies by its terms in all State and Territory courts: Odgers, "Uniform Evidence Law", at [1.5.240]; Re DEF and the Protected Estates Act 1983 [2005] NSWSC 534.
The order of the South Australian Board has been proved before me in accordance with s 157 of the Evidence Act (Cth). However it is not immediately clear whether the proceedings before the Guardianship Board amounted to "judicial proceedings" for the purpose of s 185. The plaintiff submitted correctly that the Guardianship Board falls within the definition of "Australian court" contained in the Dictionary to the Evidence Act (Cth), which defines the terms to mean, amongst other things, "a person or body authorised by an Australian law, or by consent of parties, to hear, receive and examine evidence". It does not follow from this that the Board's proceedings are "judicial proceedings".
The effect of s 185 was considered in detail by Campbell J in Re DEF. His Honour considered the effect of s 185 of the Evidence Act (Cth) at length by reference to past cases and as it is a very clear explanation I will include his Honour's analysis in these reasons:
"48 The meaning of "full faith and credit" has been explained by Deane J in Breavington v Godleman (1988) 169 CLR 41 at 129:
"To give full faith and credit to something does not, as a matter of ordinary language, mean merely to acknowledge the fact that it exists. Thus, to give full faith and credit to a person's word does not mean merely to accept the fact that the person says something. It means to accept and act upon the content of what he says. To give full faith and credit to a judgment means, as a matter of ordinary language, not only to recognise its existence but, while it stands, to accept and abide by its contents ..."
49 The effect of the full faith and credit provisions on the recognition in one State of an order made in another State has been expounded in a series of decisions. Posner v Collector for Interstate Destitute Persons (Victoria) (1946) 74 CLR 461 concerned a maintenance order made in a Western Australian Court of summary jurisdiction against a defendant. That defendant had never been served with notice of the proceedings, although the Magistrate had been led to believe that service had occurred. An attempt was made to enforce the order in Victoria, and objection was taken that the order was a nullity because the proceedings had not been served. All the judges in the High Court held that it was not a nullity. As well, Dixon J (the only Justice in the High Court to consider this particular question) at 479 said:
"Further, under s 18 of the State and Territorial Laws and Records Recognition Act 1901-1928 (Cth) the Victorian magistrate was bound to give to the Western Australian order such faith and credit as it has by law or usage in Western Australia, that is assuming that the order was proved as required by that Act."
It is noteworthy that Dixon J considered section 18 Recognition Act 1901 sufficient to achieve that purpose, without reliance upon section 118 Constitution.
50 Harris v Harris [1947] VLR 44 concerned whether a divorce decree pronounced by the NSW Supreme Court should be recognised in Victoria. Fullagar J found that the NSW court lacked jurisdiction to make the divorce decree because the petitioner was not domiciled in NSW. However, the decree was one, which would have been recognised as valid in NSW notwithstanding that lack of jurisdiction. On the common law principles for recognition of foreign judgments, it would not be recognised in Victoria because it was made outside jurisdiction. However, Fullagar J held that it should be recognised pursuant to section 18 Recognition Act 1901.
51 His Honour examined the American case law on the full faith and credit provision in the United States Constitution, and recognised that the course of United States authority had sometimes permitted the court of one State to refuse to recognise a court order of another State on the ground that it was made without jurisdiction. His Honour saw some basis for distinguishing the American Constitutional provision concerning full faith and credit from the Australian provision, but did not need to decide whether there was actually a difference in application of the two provisions. His Honour decided the case by reference to section 18 Recognition Act 1901, saying, at 59:
"I have said that I prefer to rest my decision on the Act rather than on the Constitution. The two may mean the same thing, as is held in the United States, or either may be wider or narrower than the other. But the one is a broad general pronouncement or direction such as one would expect to find in a Constitution, and such as may be expected to be the subject of much argument and much difference of opinion, fluctuating perhaps from time to time as social and political conditions change. The other seems to me to be a specific and precise direction to me to accord to a judgment given in New South Wales the same effect as that judgment would receive in the Courts of New South Wales. I have already expressed my opinion that that judgment conclusively determines a status in and for New South Wales, and, in my opinion, the meaning of the Act is that it conclusively determines a status in and for Victoria and every other State of the Commonwealth.
It seems necessary only to add that a judgment of an inferior Court of a State, being open to challenge "at home" for want of jurisdiction, would seem to be equally open to challenge on that ground in a "sister state"."
52 In the Estate of Searle, Deceased [1963] SASR 303 concerned whether a person who was the natural child of a testatrix, but who had been adopted pursuant to an order of the Supreme Court of NSW, counted as a child of the testatrix for the purpose of a gift in the testatrix's will. The problem arose because the child had been domiciled in South Australia at the time of making the adoption order (though the adopting parents were domiciled in NSW), and there was a question about whether the NSW court had jurisdiction to make such an order. Chamberlain J, at 309, referred to section 118 of the Constitution, section 18 of the Recognition Act 1901 and Harris v Harris [1947] VLR 44, and said:
"The order of adoption in this case was made in a judicial proceeding in the State of New South Wales, and there is no doubt that it would operate in that State to deprive the respondent of a claim to be regarded as a child of the testatrix for any purpose except intestate succession, and I see no reason why it should not be given the same effect in this State."
53 In G v G (1986) 64 ALR 273; (1985) 10 FamLR 718 McLelland J dealt with an order which had been made by the Supreme Court of Queensland concerning custody of a child. The order was clearly within jurisdiction. An application was made to the New South Wales Supreme Court to make a different order. McLelland J held that the case before him did not involve questions like those in Harris v Harris [1947] VLR 44, because the Supreme Court of Queensland clearly had jurisdiction. His Honour decided the case on the principle that a custody order was inherently an interim order, and so the New South Wales court had its own jurisdiction to make a different order. Concerning section 118 Constitution and section 18 Recognition Act 1901, his Honour said, at 276 of ALR, 719 of FamLR:
"In my opinion the Constitutional and statutory provisions to which I have referred require this Court to treat the Queensland order ... as having the same degree of finality and conclusiveness (but no more) as that order would have in Queensland."
54 Bond Brewing Holdings Ltd v Crawford (1989) 1 WAR 517 arose when the Victorian Supreme Court had made an ex parte order appointing receivers and managers of Bond Brewing Holdings Ltd and various of its subsidiaries. On the day that order was made, Bond Brewing Holdings and those subsidiaries applied to the Supreme Court of Western Australia for an order restraining the receivers from acting until a further application could be made to the Supreme Court of Victoria. The Western Australian court was approached, it seems, because that court was accessible to the plaintiffs owing to the time difference between Victoria and Western Australia. Ipp J refused to grant the plaintiffs relief. Ipp J referred, at 528, to Harris v Harris [1947] VLR 44, and the statement by Fullagar J at 59 that section 18 Recognition Act 1901 was "... a specified and precise direction to me to accord to a judgment given in New South Wales the same effect as that judgment would receive in the courts of New South Wales." Ipp J said, at 528, "With great respect I consider that I should follow that approach particularly in this day and age in Australia."
55 Rowe v Silverstein (1996) 1 VR 509 arose when the Supreme Court of New South Wales had, by interlocutory injunction, prohibited a mortgagee of land from disbursing money which he received as mortgagee pursuant to certain mortgages. An application was made to the Supreme Court of Victoria, at a time before the New South Wales proceedings were concluded, seeking permission to disburse part of the proceeds of the mortgage. Batt J declined that relief, holding that the New South Wales interlocutory injunction should be recognised, pursuant to section 118 Constitution. His Honour said, at 511:
"Even if the New South Wales order were made without jurisdiction - and I do not think that is the case - it is clear from Harris v Harris [1947] VLR 44 and Bond Brewing Holdings Ltd v Crawford (1989) 1 WAR 517 that full faith and credit, that is, recognition, is to be accorded by me to the New South Wales order."
56 His Honour proceeded on the basis of section 118 Constitution alone, notwithstanding that Harris v Harris [1947] VLR 44 and Bond Brewing Holdings v Crawford (1989) 1 WAR 517 were based on section 18 Recognition Act 1901 because he was aware of the repeal of section 18 Recognition Act 1901, but counsel had not been able to inform him of any section which had replaced it. His Honour said, at 511-512:
"The one matter that troubled me was the interlocutory nature of the order in New South Wales and whether the common law exceptions to the recognition of foreign judgments were applicable under s 118. Harris v Harris and Bond Brewing are authority for the proposition that the exception based on want of jurisdiction and the exception based on denial of natural justice, if that be different, are not imported into s 118. One would therefore think that none of the exceptions, save possibly that of fraud, is imported into s 118."
57 In Evans v Strachan (1999) 167 ALR 159 the Tasmanian Supreme Court was asked to exercise a power arising under Tasmanian legislation to make an order restricting the movement of a fisherman who had committed numerous offences against fishing legislation. Some of those offences had resulted in convictions, and penalties, in Victoria. The fisherman argued that he was being subjected to double jeopardy by having an additional penalty imposed on him in Tasmania. In considering that argument, Slicer J said, at 168 that by virtue of section 118 "[T]he Victorian convictions are to be regarded in the same manner as if they were Tasmanian convictions."
58 I conclude that there is ample and longstanding authority leading to the conclusion that it is the effect of section 185 Evidence Act 1995 (Cth) that an order of the Supreme Court of Queensland, proved as required by that Act, is treated by all Australian courts as having the same status and effects as the courts of Queensland would accord to that order."
His Honour went on to consider recent Dicta in the High Court and decided that they supported the correctness of Harris v Harris [1947] VLR 44.
In Re PQR and the Protected Estates Act 1983 [2005] NSWSC 729 Campbell J considered the matter again and held that the orders of the ACT Guardianship and Management of Property Tribunal "are entitled to full faith and credit throughout Australia" and relied on his own decision in Re DEF and the Protected Estates Act 1993 to support that proposition. Campbell J therefore gave full faith and credit to the orders made by the Tribunal in the ACT and as a result revoked an order in New South Wales, which had no further effect. However, his Honour did not specify whether he was relying on s 118 of the Constitution or s 185 of the Evidence Act (Cth) in reaching his decision. Given his reliance on Re DEF, it seems that Campbell J was extending the application of s 185 to give full faith and credit to an order of the ACT Tribunal.
The hearing before the South Australia Board was certainly a proceeding, however the question remains whether it amounted to "judicial proceedings". That term is not defined in the Evidence Act (Cth). The Encyclopedic Australian Legal Dictionary defines "judicial proceedings" as a "Proceeding instituted in a competent court of law to seek relief, remedy, or redress" and "judicial" as:
"A description of that which emanates from a judge or judges when exercising the power to determine liability or otherwise affect the legal rights of subjects through the application of law to particular facts and circumstances."
Although not applicable to the present proceedings, "Judicial proceedings" is defined in s 31 of the Crimes Act 1914 (Cth) to mean:
"(a) a proceeding in or before a court; or
(b) a proceeding:
(i) before a body, or a person, acting under a law of the Commonwealth, of a State or of a Territory; and
(ii) in which evidence may be taken on oath."
The Crimes Act 1900 (NSW) also contains a similar definition in s 311 whereby "'judicial proceeding' means a proceeding in or before a judicial tribunal in which evidence may be taken on oath". In Brandy v HREOC (1995) 183 CLR 245, "judicial determination" was defined as "an enforceable decision reached by applying the relevant principles of law to the facts as found".
It is clear that inferior tribunals (of which the Board is one, despite its name) can exercise judicial power in some circumstances. See for example Kable v New South Wales [2012] NSWCA 243 at [140]. In that case the Court of Appeal referred to the possibility that the scope of judicial power can arguably be broader in State jurisdiction, where the doctrine of the separation of powers has a lesser operation than under the federal Constitution (at [141]).
In Bass v Permanent Trustee Co Ltd (1999) 198 CLR 344 the majority of the High Court (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) said at [56] that:
"Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process. And that requires that the parties be given an opportunity to present their evidence and to challenge the evidence led against them. It is contrary to the judicial process and no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case." (citations omitted)
Section 14 of the Guardianship and Administration Act (SA) gives the South Australian Board the power to summon witnesses and to "require any person to make an oath or affirmation to answer truthfully all questions put by a member of the Board, or a person assisting or appearing before the Board, relating to a matter before the Board". The Act also relevantly contains the following:
(a) The Board must include the President or a Deputy President (s 6) and the President and Deputy Presidents must be a magistrate, a legal practitioner of not less than five years' standing or a person who has retired from judicial or magisterial office (s 7);
(b) The Board has the power to summons persons before the Board and require a person to answer any question before the Board and it is an offence to refuse to answer a relevant question when required by the Board (s 14);
(c) Counsel may appear before the Board (s 14);
(d) Hearings before the Board are to be open, unless the Board orders otherwise (s 14);
(e) The Board must give reasonable notice of the time and place of the hearing of the proceedings to the applicant and the person to whom the proceedings relate, as well as to other persons. The Board must give the applicant and the person to whom the proceedings relate a reasonable opportunity to call or give evidence, to examine or cross-examine witnesses and to make submissions to the Board (s 14);
(f) On making any decision or order under the Act the Board must give the person affected a written statement outlining the effect of the decision or order and his or her rights of appeal against the decision or order (s 55);
(g) Appeals and review of the decisions and orders of the Board by the District and Supreme Courts of South Australia are provided for in Part 6.
Section 12 of the Act provides for decisions of the Board and its constitution by different members of the board. The section is as follows:
12-Decisions of Board
(1) In proceedings before the Board under this Act or any other Act-
(a) if the Board is constituted of 2 or more members (1 of whom is the President or a Deputy President)-
(i) the President or Deputy President will preside; and
(ii) any question of law or procedure will be determined by the President or Deputy President; and
(iii) any other question will be determined by unanimous or majority decision of the members;
(b) if the Board is constituted of 2 or more panel members-
(i) the President or a Deputy President will nominate 1 of the members to preside; and
(ii) any question of law that arises must be referred to the President or a Deputy President for decision (and a decision made on the reference is a decision of the Board); and
(iii) any other question will be determined by unanimous or majority decision of the members;
(c) if the Board is constituted of a panel member sitting alone-any question of law that arises must be referred to the President or a Deputy President for decision (and a decision made on the reference is a decision of the Board).
(2) If the Board when constituted of 2 or more members is unable to reach a decision on a question (other than a question of law or procedure) before the Board, the decision of the presiding member will prevail as the decision of the Board.
(3) The Board must act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms and is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.
Of importance is subsection (3). The fact that it is not bound by the rules of evidence would not be sufficient to make the proceedings non-judicial. The ability to inform itself on any matter in such manner as it thinks fit obviously is subject to particular provisions of section 14 and in particular section 14(6)(a).
In EMG v Guardianship and Administration Board of Victoria [1999] NSWSC 501, Young J (as his Honour the was) said, without deciding the issue, that proceedings before the Victorian Guardianship Board were not judicial proceedings:
"[21] Counsel submit that the full faith and credit provisions are not applicable in this area because what happened before the Guardianship Board in Victoria was not a judicial proceeding within the meaning of s118 of the Constitution. Although I do not know of any case directly in point, the answer would appear to be that the proceedings are not judicial proceedings and this view is reinforced by the decision of Powell J in Re an Alleged Incapable Person FCC and the Protected Estates Act 1983 (1990) 19 NSWLR 541." (emphasis added)
However the decision in Re an Alleged Incapable Person FCC and the Protected Estates Act 1983 (1990) 19 NSWLR 541 was not followed by Campbell J in Re DEF. His Honour determined that the case was wrong in principle and said at [76]:
"[T]he full faith and credit provisions are ones that play an extremely important role in creating and maintaining an integrated system for administration of the law in Australia ... Having decisions of the courts of one State or Territory accorded the same effect in courts and public offices throughout Australia as they are accorded in the State or Territory of the court that pronounced the decision is a very important part of that integrated system. It would be undesirable to allow the exception of indeterminate width which Re FCC creates to the full operation of full faith and credit to continue to be recognised when it detracts from the integration of the system of administration of the law, and is in my view wrong in principle. In those circumstances, it is preferable to give this advice on the basis of what seems to me to be correct principle, and to decline to follow Re FCC."
It is clear that the applicant before the South Australian Board sought relief in the form of an order pursuant to s 56 of the Guardianship and Administration Act (SA) and that the order was granted by the Board, constituted in part by a legally trained decision-maker. Furthermore the Board was entitled to take evidence on oath and, in reaching its decision in this case, applied the terms of the South Australian Act. The orders made (and subsequently reviewed and amended) were enforceable in South Australia and determined the rights of the applicant and of other persons, including, relevantly, the deceased.
In my view s 185 operates on an order by the South Australian Board to give its order full force and effect throughout Australia. In reaching this decision I am mindful of the "basic propositions" put forward by Callinan J in Sweedman v Transport Accident Commission [2006] HCA 8; (2006) 224 ALR 625, whereby the legislation of one Australian state may have legal consequences for persons in others but that the polity of a state will have the primary responsibility for, and hegemony over the people, institutions, lands and activities within its boundaries. If it were otherwise, then the borders of the states and statehood would be meaningless (at [101]). However given the terms of s 185 and the decisions of Campbell J in Re DEF and Re PQR I consider that s 185 applies in this case so that I must give "full faith and credit" to the order of the South Australian Board.
This means that I must apply the terms of that order to the application before me. The Guardianship and Administration Act (SA) is clear that the making of the deceased's second will has no effect given the order made by the Board. In those circumstances the grant should be set aside. I will however turn to deal with the alternative case of whether there was a lack of capacity as demonstrated by the evidence before me.
Reciprocal arrangements
Recently, the Victorian Law Reform Commission delivered a report outlining the interstate operation of guardianship orders (VLRC, Guardianship: Final Report 24, April 2012). Relevantly, the report, despite focussing on Victorian law, notes that there is a need to enact uniform guardianship legislation to ensure that orders made in one state relating to substituted decision-making are automatically recognised throughout Australia (at 580-581).
The South Australian and New South Wales statutes relating to guardianship go some way to providing for reciprocal recognition of guardianship orders. For example, the Guardianship and Administration Act (SA) provides for reciprocal guardianship arrangements and reciprocal administration powers with certain states (ss 34 and 48). However, these are not directly relevant in this case. Similarly the Guardianship Act 1987 (NSW) provides for the recognition of guardians under South Australian law (s 48B; Guardianship Regulation 2010, reg 16), however those provisions required an application to be made by the guardian of the deceased to the Guardianship Tribunal in this state. This has not occurred.
This case highlights the importance of implementing reciprocal, or uniform, guardianship legislation throughout the states and territories of Australia that provides for automatic recognition of interstate orders.
The factual incapacity
In Virginie-Pitel v Campbell; Campbell v Virginie-Pitel [2010] NSWSC 1440 Slattery J summarised the principles applicable in these terms:
"37 The law that applies to the revocation of grant of probate in common form may be clearly stated. The Court has a discretion to revoke grants of probate and letters of administration which are valid until they are set aside in exercise of that discretion: Ex Parte Keegan (1907) 7 SR (NSW) 565. There are a number of common circumstances in which a grant of probate may be revoked: where a false suggestion has occurred, whether fraudulently or ignorance of the truth which obscures a defect in title of the grant (such as for example where the testatrix does not know and approve certain words which appeared in the will, Re Fenwick (deceased) [1972] VR 646; where the will has been discovered after a grant of letters of administration or a later will after a grant of probate, Re Estate of Wilson (1991) 24 NSWLR 334; where executors or administrators become incapable of acting, Bates v Messner (1967) 67 SR (NSW) 187; where it appears to the Court that a grant of probate or administration ought not to have been granted or that it contains an error, if the Court is satisfied that the grant would be revoked at the instance of a party interested. The executor under a revoked grant is still bound to account, and to pay and transfer money and property received in his or her capacity as executor and to be appropriately reimbursed by a subsequent executor: Probate and Administration Act 1898, ss 40D and 90.
...
40 The case put against the 2004 will was a narrow one. The evidence of Associate Professor Carmelle Peisah defined the issues. Associate Professor Peisah has a doctorate in medicine from the University of New South Wales, is conjoint Associate Professor at the University of New South Wales, and a professional member of the Guardianship Tribunal. She is the New South Wales Medical Board's nominated psychiatrist on the Board's impaired registrants program and a consultant psychiatrist for the eastern area health service aged care psychiatry practice area. Associate Professor Peisah's evidence was opposed by lay evidence called on behalf of the first and second defendants Suzanne and Julie. Associate Professor Peisah was asked to subject to psychiatric analysis the elements of Edith Fulton's testamentary capacity in accordance with the classic passage from Banks v Goodfellow (1870) LR 5 QB 549 at 545
"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."
41 The applicable onus of proof has been explained in Bailey v Bailey (1924) HCA 21; (1924) 34 CLR 558 and Estate of Hodges (Deceased); Shorter v Hodges (1988) 14 NSWLR 698.
42 Where a doubt as to testamentary capacity is raised satisfying the evidentiary onus on the defendant, the onus passes to the propounder of the will to satisfy the Court that the will being propounded is valid; but this does not mean that a doubt is enough; the doubt must be such that the Court considers it sufficient, as a Court of conscience, to prevent it finding for the will propounded: Worth v Clasohm [1952] HCA 67; (1952) 86 CLR 439 and Re Estate of Hodges (Deceased); Shorter v Hodges (1988) 14 NSWLR 698.
43 A cautious approach to cases such as the present one is invited by authority. The reason for this was explained by Gleeson CJ in Re Estate of Griffith (Deceased); Easter v Griffith (1995) 217 ALR 284, at 290:
'This formulation of the onus of proof, well established by authority and not in dispute in the present case, invites caution. The power freely to dispose of one's assets by will is an important right, and a determination that a person lacked (or, has not been shown to have possessed) a sound disposing mind, memory and understanding is a grave matter. Where a testatrix exhibits florid symptoms of psychotic disturbance, such a conclusion may be reached relatively easily. However where, as in the present case, what is claimed is that the woman who presented to the world an appearance of intelligence and rationality, had formed an aversion to her child so unfounded and unreasoning that if the evidence of an unsound mind, the decision may be very difficult.'"
The deceased's second will was executed in the presence of an experienced solicitor, Mr Mann, and a psychiatrist, Dr Maguire, on 6 August 2008. Mr Mann had seen the deceased on 26 March 2008, 5 August 2008 and on the day of the signing of the will. He took careful notes of his discussions with the deceased and gave evidence of these discussions. Dr Maguire saw the deceased for about 30 minutes on 6 August and concluded that the deceased had testamentary capacity. Unfortunately he was given nothing of the extensive medical evidence which had been produced over the years leading up to the making of the second will. It is convenient to firstly deal with the various items of medical evidence which played a part in the Guardianship Board's hearing in South Australia.
The first available report is one of 9 November 2004 by Dr Woodford. The history given was a gradual progressing of forgetfulness over the previous year. It was noted that the deceased had reached the stage of occasionally forgetting the names of family members and had developed delusions over the past three months, thinking that his wife had taken a lover. He had recently moved from Adelaide to Sydney to live with his daughter, as his wife could no longer cope with him. His Mini Mental State score was 20/30. It was suggested that he had Alzheimer's disease.
The next report was by Jane McAuliffe, a clinical neuro-psychologist, who assessed the deceased on 22 October 2007. Dr McAuliffe noted his presentation in these terms:
"Mr. Ocalewicz was disoriented in time apart from being able to identify the day of the week. There were contradictions in his biographical details and these factors had to be clarified by his daughter. Some of the contradictions may have been related to comprehension difficulties although this was not felt to entirely account for the errors eg. he denied having grandchildren and, although he does have four grandchildren they are fully grown and no longer 'children'. However, later in the interview he stated that he had one grandchild. He was unable to give the names of any political figures and could not give the dates of WWII. His response to a majority of questions relating to dates of personal or world events was 'about 66 or 67'."
She addressed the specific issues relating to wills in these terms:
"Understanding of specific issues relating to Wills: On direct questioning Mr. Ocalewicz was unable to give evidence of a sound comprehension of issues relating to his will. The information he gave was contradictory at times and differed considerably from that provided by his daughter. He believed that his will was made within the past two years but Lana stated that his will was made over 10 years ago, prior to the estrangement from his late wife. He stated that his daughter Lana was the executor but was unable to give an explanation of what this meant. Mr. Ocalewicz said that his will provided that his estate would go to his daughters but this differed from Lana's description of matters. He was unable to give an indication of the value and content of his estate. When asked about the purpose of a will he stated that it was so 'you don't get cheated'. At no time during the discussion of the will did Mr. Ocalewicz allude to the complications that were outlined by his daughter, nor to having had a joint will with his late wife, his estrangement from her or her recent death."
Her conclusions as to his testamentary capacity were as follows:
"In relation to Mr. Ocalewicz's testamentary capacity he was unable to give any convincing indication of a sound understanding of wills in general or the specifics in relation to his own will. The issues relating to his late wife's will and his will appear to be complicated and apparent family conflict is present in relation to this. At no time did he give any indication of being aware of this. There were contradictions in the information he supplied in relation to existing family members and a lack of knowledge regarding his estate. In conjunction with significant generalized cognitive dysfunction this strongly suggests that Mr. Ocalewicz does not have testamentary capacity."
Four days later, on 26 October 2007, the deceased was reviewed by Dr P Funnell, a senior staff specialist. He said:
"The main issue which Lana raised today, as you yourself noted in your referral, was Mr. Ocalewicz's ability to attest to a will. In this regard, Jane McAuliffe did not regard, on the basis of her testing, that he demonstrated adequate testamentary capacity, especially given that issues relating to his wife's death earlier this year have resulted in somewhat complicated and conflicted affairs related to her estate.
On my own assessment, I came to the same conclusion. Mr. Ocalewicz was unable to adequately describe the nature and purpose of a Will, the contents of his Will, the nature of his estate or likely beneficiaries. He could not name the executors of the Will, or comprehend the significance of this role. He seemed to understand that assets related to his estate would need to be divided amongst living relatives, but he could give no clear idea with regard to how this should be undertaken, or whether this process involved dispute or conflict within his family."
He then went on to suggest that the deceased take Aricept medication and apparently the deceased did start this course of medication. The deceased was seen again by Dr Funnell on 27 March and he noted that the medication had resulted in an improved Mini Mental State examination.
On 20 August 2008 Dr Funnell wrote to the Crown Solicitor repeating the matters set out above but noted that he had not been able to review the deceased's testamentary capacity because of his return to Adelaide. He confirmed his previous expressions of opinion on the matter.
In a report from Dr Shu Feng of 28 October 2008 it was noted that the deceased was taking Aricept medication and that his Mini Mental Score was 19/30.
Mr Mann swore his affidavit on 1 November 2011 and as what he says requires some analysis, I will set out the relevant portions of his evidence. In respect of the deceased's first attendance on 26 March 2008 he said the following:
"4.I cannot recall the precise words of my conversations with the Deceased. I made contemporaneous notes of my attendance with him and have recorded his responses to my questions. The Deceased told me "I want to make a new will. My wife died about a year ago aged 88. I have two daughters one 40 and one 42, they are both married."
5.The Deceased said to me "I live with my daughter Luise Joyce. I have my own room in the house. Luise looks after me. She does my washing, cooking and ironing. I am Polish. I came to Australia after the war. I worked building the roads. I built the first road to Port Augusta. I made a will many years ago when my wife was alive. I have two daughters and four grandchildren. When my wife was alive she wanted to make provision for the grandchildren. I believe the grandchildren have to make their own way. They should get jobs for themselves."
6.I asked the Deceased "What are your assets?" He replied "I have a house at Uralda South Australia". I asked him "How do you spell that?" He took a pen and wrote that name on the back of my notes. He then said "This is small country town and there are no street numbers. I don't know how much it would worth today. The house is 4 or 5 years old. I have the block next door." I said "What other assets do you have?" He replied "Bank account with Commonwealth Bank. I get a pension. I think I have about $4,000.00 in the bank but I'm not sure. Luise has Power of Attorney and she looks after my money." I said "Do you have a car?" He replied "I don't have a car." I said "Do you have any shares or insurances?" He replied "I don't have any shares or insurances."
7.When I am proposing to take instructions from an elderly person, particularly in circumstances where capacity may be an issue it is my practice to ask the client questions that are directed to the capacity test set out in Banks v Goodfellow. I had already discussed his assets and he appeared to know these. He answered my questions about this without hesitation or prompting by me.
8.I said to the Deceased "You want to make a will, what do you understand a will to be?" He replied "I know what a will means. When I pass away it will say where my things are to go". He replied "What do you want to say in your will?" He replied "I would like to leave more to Luise. I think my younger daughter should get something too. She is still young and can keep working. Luise will look after me in my old age. I am 88 now. I would like Luise to get 80% and Lana 20%." I said "What if one of them dies before you?" He replied "If either of them should died before me their share should go to their children."
9.I then said "Michael would you like me to draw you up a will that leaves 80% of your property to Luise and 20% to Lana?" He replied "Yes." At that point the attendance ended. I had spent approximately 30 minutes with the Deceased. It was my observations that although he had a noticeable accent, his English was quite good. He did not ask me to repeat my questions and his responses came in English without much hesitation. I noted that he appeared bright and seemed to be interested in my questions.
10.From my observations with the Deceased I had formed a preliminary view that he had the capacity to make a will. Because of his age and the possibility of affection by dementia, I recommended that he be assessed by a psychiatrist before making his new will. I spoke to the Deceased's daughter in this regard and I agreed to arrange an appointment with a psychiatrist for this purpose. My conversation with her took place in the hallway of my office. The Deceased and his son-in-law were also present at this time. To assist me in the preparations of the will I asked for full names of his daughters. To the best of my recollection, Luise Joyce gave me their full names, which I wrote at the end of my notes."
In paragraph [5] what was reported by the deceased was accurate. In paragraph [6] the answers to the last two questions were inaccurate. In paragraph [8], the instructions were that if either Luise or Lana died their share should go to their children. This did not happen in the actual will in respect of Luise. The terms of the will were as follows:
"1.I revoke all prior Wills and testamentary dispositions.
2.I appoint my daughter LUISE JOYCE as my executrix and trustee.
3.I give the whole of my estate as follows;
i.As to eighty percent (80%) thereof my daughter the said LUISE JOYCE absolutely provided that if my said daughter does not survive me then I give the share of my estate to which she would otherwise have been entitled to her husband JOHN JOYCE absolutely and;
ii.As to the remaining twenty percent (20%) thereof for my daughter LANA OCALEWICZ absolutely provided that is my said daughter does not survive me then I give the share of my estate to which she would otherwise have been entitled to such of the children of the said LANA OCALEWICZ as shall be living at my death and attain the age of eighteen (18) years and if more than one in equal shares."
In respect of the attendance on 5 August Mr Mann gave the following evidence:
"12.On 5 August 2008 I had a further attendance with the Deceased at my office. He had come with his daughter Luise and her husband John. I spoke to the Deceased in my room. Mr and Mrs Joyce remained outside. I cannot recollect the precise words spoken during out attendance but I took notes of responses the Deceased made to my questions. The Deceased said "I live with my older daughter Luise at Mt Tomah along with her husband. Nobody else. I am 85. I was born in 1922 in Poland. I have two daughters Luise is the older and the younger is Lana. Her full name is Svetlana. She lives in South Australia. I think she had been living in my house at Uralda South Australia. The house doesn't have a house number. I can't remember the road name. It is in the hills to the east of Adelaide." I asked him "Tell me a bit about yourself." He said "My wife Anna were married in Germany after the war. I went through several marriage ceremonies with her in Germany in DiJsseldorf and some other countries. They wouldn't give a marriage certificate. I was an international refugee as was my wife. We moved from country to country and without a marriage certificate we had to go through the ceremony at other places. We finally got a certificate and had this when we came to Australia. Luise was born in Germany. Lana was born in Australia. My wife died last year but I can't remember the date. Luise doesn't have any children. Lana had a son Mischa and at least one daughter. I am not sure but I think there are four altogether (referring to grandchildren). My wife arranged my last will.
13.We then had a conversation to the following effect;
I said: "So what is a will?"
He said: "It is where my property goes."
I said: "What has to happen?"
He said: "I have to be dead. It is what will happen to my property when I pass away. I won't be here any more." (I recall the deceased laughing at this remark) "I have a will at the moment which I signed after she (referring to his wife) arranged it for me. I can't remember what it said. She asked me to sign it and I did."
I said: "What property do you own?"
He said: " I own a property is Uralda South Australia. I built a house 4 or 5 years ago. My wife was still alive, I think there are several acres and could be more than one block. I get a Centerlink pension. It goes into my bank account with the Commonwealth Bank. My daughter takes money out of the bank for me."
I said: Do you own anything else?"
He said: "I have got a car. I have only just got it back from my daughter. My wife bought the car a few years ago. She gave it to me. She bought herself a car which she used herself and this came to me when she died. My daughter may still have the other one."
14.The Deceased also said:
"Lana tried to look after me. She put me in a home and left me there. She didn't come and visit me. Luise came and took me out and took me to Mt Tomah. I still live with her."
"My younger daughter tried to get my house away from me. I don't think she did. The house is still in my name. I didn't agree to give it to her. When my wife died last year she had half the house and when my wife died it was all mine. My daughter tried to get the house away from me. I don't know why. She tried to cheat me out of my house. It is my house not hers. I built it. She tried to rob me whilst still I am living. Where is her money, she gets double my money. No good."
"I want to make a will for the time being. When I do I want the older daughter to get most of the estate. The young one to get something but not as much as the other. 80% to Luise and 20% to Lana.
I said: "Luise doesn't have children. If she dies before you, you will need to leave her share to someone else otherwise Lana will get it."
He said: "John is a good man. He takes me round."
I said: "Would you like to leave it to John, that is, Luise's share?"
He said: "Yes" He then said "For Lana, if she dies before me, it can go to her children."
15.I then made notes of the client's full particulars and the shares in the will.
I said: "80% to Luise and 20% to Lana?"
He said: "Even though Lana has done wrong, I still want her to get some part of my estate."
In respect of paragraph [12] it is notable that when invited to give a history he did not talk about any matters after the end of the war. This indicates a short-term memory problem. At the end of that paragraph he is quite in error in respect of the grandchildren: Luise did have two children and Lana had two sons. This is to be contrasted with the fact that when the first will was made he could clearly set out the relevant grandchildren. In respect of paragraph [14] there is no evidence to suggest that the events set out in that paragraph were correct and accordingly I must conclude that the deceased was wrong in this belief. Once again, when discussing Luise's children, presumably from the previous answer, the deceased did not point out that the solicitor was in error when he said Luise had no children.
Mr Mann also gave evidence of the execution of the will at Dr Maguire's rooms after Dr Maguire had seen the deceased for about 30 minutes.
I have already indicated that Dr Maguire, a consultant psychiatrist, did not have access to any documentation apart from his letter of instructions. He described his interview in these terms:
"Assessment of testamentary capacity
When I asked Mr Ocalewicz if he was aware of the purpose of his visit to me, he indicated that he was not. I told him I was seeing him to determine if he was capable of making a Will and he indicated that he was agreeable to this process.
By way of background, Mr Ocalewicz told me he was born in Poland but did not know the of name of his village. He had a sister older than him who died in the War and two other brothers with whom he lost contact after the War.
He came to Australia some time after the war and married. The family lived in South Australia and he worked as a grader driver building new roads. He was vague about any other work history.
He has lived in a number of places in South Australia and mentioned a house in Keswick.
He believes he has never suffered any serious injuries during his life but recalled having an operation "through the chest" that he thought related to a heart problem - "a long time ago".
Mr Ocalewicz and his wife had two daughters, Luisa and Lana. He thought he had two grandsons, one from each daughter, and was not aware of any other grandchildren.
His wife became ill herself and he said she died last year. Prior to that, when she was unable to look after him, his youngest daughter, Lana, took him in. However, she did not want to look after him and put him in a nursing home. At that point, his older daughter came and took him to live with her family and she has looked after him ever since. He was not happy living in the nursing home.
In terms of his current health, Mr Ocalewicz reported his appetite is good and he sleeps well. He is generally feeling well within himself and has not been suffering from any chest pain. He acknowledged being "a bit tired" at times because of "age". In the past he enjoyed doing carpentry as an interest but feels physically unable to do it any more."
Once again it is notable that there is nothing given of recent times and the statement about the grandchildren was plainly wrong. On his examination of the deceased the doctor noted that his Mini Mental State examination was 11/30, indicating a degree of cognitive impairment consistent with moderate dementia.
The doctor's assessment of the deceased's testamentary capacity and his opinion was as follows:
"When I asked Mr Ocalewicz if he understood what it meant to make a Will he replied, "Who I leave my property".
When I enquired about the nature of his property, he advised me has a house on some land somewhere in the Adelaide Hills. He was not sure of the area and did not believe he owned any other properties at this point.
When I asked about any children or grandchildren, he told me he was living with his elder daughter, Luisa, her husband and Mr Ocalewicz's grandson, Sammy. He also has a younger daughter, Lana, and thought she had a son as well but did not recall his name.
When I later spoke with Luisa, she advised me that she also has a daughter and her sister Lana has two sons rather than one.
I asked Mr Ocalewicz what he intended to do with his property. He advised me he was leaving it all to Luisa. When I enquired why he did not intend to leave anything to his younger daughter, he said that he could not leave the house to both of them. I enquired why he could not sell the property and leave the money to both of them. He replied that the money would be not enough for each of them to buy a home. When I suggested they might be able to use that money for a deposit on a house and pay it off he expressed some concern that the money might "get spent".
Mr Ocalewicz then reported that his younger daughter did not want to look after him after his wife died. She did not want to wash his clothes, and put him in a nursing home. He added that he had decided to leave his property to his older daughter as she took him out of the nursing home and was prepared to look after him. He said that he was not angry with younger daughter but he just wanted to leave his property to Luisa.
I was present when Mr Ocalewicz's solicitor, Mr John Mann, read him the contents of a Will that was prepared on 5 August 2008 following a meeting with Mr Ocalewicz and also based on the contents of an earlier meeting. In this Will Mr Ocalewicz indicated he wished to leave 80% of his estate to his daughter, Luisa, and in the event that she died before him, her share to be passed on to her husband. He wished to leave the remaining 20% to his daughter, Lana. Mr Mann noted that Mr Ocalewicz had just advised me that he was going to leave everything to Luisa and Mr Ocalewicz indicated he now wanted to leave only 80% to her and the remainder to Lana.
Mr Mann repeated the division of the property and Mr Ocalewicz again stated that he wished to proceed with the division as quoted in the Will. He also repeated the issue that Luisa had taken him out of the nursing home and was looking after him and that he also still wanted to leave something to Lana.
OPINION
Based on my examination of him, I believe Mr Ocalewicz is suffering from Dementia with significant cognitive impairment.
However, there was no indication that he was suffering from an anxiety disorder, mood disorder or psychotic illness.
It is my opinion that Mr Ocalewicz has testamentary capacity in that he is capable of satisfying Banks -v- Goodfellow on the basis that:
(a)He was aware of the nature of a Will and its consequences;
(b)He was aware of the nature and extent of his property although not its detail;
(c)He was aware of the names of his close relatives although he was unaware of the existence of two of his grandchildren;
(d)He was not aware of anyone having a formal claim on his property;
(e)There was no indication of a mental disorder or abnormal state of mind that was distorting his feelings or judgment relevant to making a Will. His primary motivation in leaving the bulk of his estate to his daughter, Luisa, was her willingness to care for him. This attitude was not based on any abnormality of mind."
Once again there is confusion about the grandchildren and the deceased gave two contrary views about what he wished to do with his estate. The deceased was aware of the nature of a will and its consequences. He knew of some of the assets, which he had. I would not place a great deal of weight on the fact that he did not remember that he had some small number of shares or a car, particularly as he had not been driving for a while. What is important, however, is the fact that at this stage in his life the deceased was not able to recall with any accuracy the names of those relatives who had some claim on his bounty. The suggestion that the medication had been improving his Mini Mental State is not borne out by the examination reported by Dr Maguire.
In my view the deceased lacked testamentary capacity. In these circumstances I propose to set aside the grant of probate in common form and I direct the parties to bring in short minutes to give effect to these reasons.
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Decision last updated: 28 September 2012
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