Re Estates Croft, deceased

[2018] NSWSC 1303

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Re Estates Croft, deceased [2018] NSWSC 1303

Hearing dates:

7-10, 14-17 and 21 August 2018

Decision date:

19 October 2018

Jurisdiction:

Equity - Probate List

Before:

Lindsay J

Decision:

The latest will of each of June Croft and Warwick Croft should be admitted to probate. Neither will held invalid for a want of testamentary capacity.

Catchwords:

SUCCESSION – Contested probate – Testamentary capacity – Joint hearing of challenges to respective wills of a married couple – Where each will-maker suffered some form of mental illness - Testamentary capacity found to exist at time of execution of each will

 

SUCCESSION – Contested probate – Testamentary capacity – Whether deceased was able to comprehend and appreciate claims to which deceased ought to have given effect – Extent of knowledge of estate property required for testamentary capacity – Testatrix not actively involved in the operation of family business – Will a rational, measured response to testatrix’s perspective of family tensions – Testatrix found to have testamentary capacity

  SUCCESSION – Contested probate – Testamentary capacity – Whether deceased suffering from insane delusions that affected provisions of will – Where testator suffered from or hallucinations –– Will showed rational, measured response to testator’s perspective of family tensions – Testator found to have testamentary capacity

Legislation Cited:

Succession Act 2006 NSW
Real Property Act 1900 NSW
Family Provision Act

Cases Cited:

Banks v Goodfellow (1870) LR 5 QB, 549
Boughton v Knight (1873) LR 3 P&D 64
Bridgewater v Leahy (1998 194 CLR 457
Bull v Fulton (1942) 66 CLR 295
Carr v Homersham [2018] NSWCA 65
Easter v Griffith (1995) 217 ALR 284
Kerr v Badran [2004] NSWSC 735
Osborne v Smith (1960) 105 CLR 153
Re Estate Griffith (Dec’d); Easter v Griffith (1995) 217 ALR 284 ALR
Re Estate of Hodges ( 1988)14 NSWLR 698
Singh v Singh [2018] NSWCA 30
Smee v Smee (1879) 5 PD 84
Tobin v Ezekiel (2012) 83 NSWLR 757
Winter v Crichton (1991) 23 NSWLR 116
Worth v Clasohm (1952) 86 CLR 439
Zorbas v City Sidiropoulous (No. 2) [2009] NSWCA 197
Zorbas v Sidiropoulous (No. 2) [2009] NSWSC 197
Tobin v Ezekiel (2012) 83 NSWLR 757 at [44]; Woodley-Page v Symons (1987) 217 ALR 25

Texts Cited:

-

Category:

Principal judgment

Parties:

In Case No. 2016/00033995 (Estate of June Croft)
First Plaintiff: Anna Sanders
Second Plaintiff: David John Sanders
Defendant: Elisabeth Croft Elford

  In Case No. 2016/00048899 (Estate of Warwick Croft)
First Plaintiff: Anna Sanders
Second Plaintiff: David John Sanders
First Defendant: Leah Croft
Second Defendant: Esther Croft

Representation:

In Case No. 2016/00033995 (Estate of June Croft)
Counsel:
Plaintiffs: SY Reuben
Defendant: T Catanzariti

 

Solicitors:
Plaintiffs: Hunt & Hunt Lawyers
Defendant: Turnbull Hill Lawyers

 

In Case No. 2016/00048899 (Estate of Warwick Croft)
Counsel:
Plaintiffs: SY Reuben
Defendants: D Stewart

  Solicitors:
Plaintiffs: Hunt & Hunt Lawyers
Defendants: Matthews Dooley & Gibson

File Number(s):

2016/00033995 (Estate of June Croft)2016/00048899 (Estate of Warwick Croft)

Judgment

INTRODUCTION

1. An elderly, retired couple (June and Warwick Croft) long married but for many years living apart, in an unusual but stable domestic relationship, each experienced a decline in mental health, with dramatic consequences, in or about 2012-2013.

2. A fall, and hospitalisation, of the wife (on 23 December 2012), depriving her of the physical capacity for self-management, provided an occasion for a daughter (Leah), long resentful of her father, to intervene as a self-expressed “advocate” for her mother - shepherding her mother (discharged from hospital into the daughter’s care on 2 January 2013) to “take control” of her own finances.

3. In a practical sense, the daughter paved the way for the mother (through solicitors, Turnbull Hill Lawyers) effectively to declare an end to her marriage; to demand from her husband a division of matrimonial property (much of which was held in joint tenancy between husband and wife or separately owned); and to threaten proceedings in the Family Court of Australia for a formal property settlement.

4. The idea that his marriage had “irretrievably broken down”, and that his wife no longer valued their marriage, was beyond the immediate comprehension of the unsuspecting husband and father. He maintained a belief that his wife continued to adhere to their marital relationship, as did he.

5. In this unsettled state of affairs a family comprising the elderly couple and their six adult daughters split into two factions. One daughter (Anna), who worked in the family business in close consultation with the father, adhered to the father. The “advocate” (Leah) and a sister (Elisabeth) actively pressed a case for the mother, with the remaining three (Naomi, Ruth and Esther) loosely aligned with the mother but marginalised in terms of contemporaneous knowledge of events.

6. Instead of convening a family conference at which different perspectives could be shared, and conflicting narratives exposed to mature reflection, with competing claims to management of “family property” made the subject of informal negotiation, both wife and husband took to the law. Leah limited her father’s access to her mother, his wife. He retained solicitors (Hunt & Hunt Lawyers) to represent him. Correspondence between solicitors for the old couple became their only regular means of communication throughout 2013.

7. Hunt & Hunt’s first letter (dated 17 January 2013) was addressed to the Leah, reminding her of the duration of her parents’ marriage; protesting her exclusion of her father from contact with his wife, her mother; and requesting that arrangements be made for such contact, and consultations with the husband/father about ongoing care of the wife, to occur.

8. Leah was unresponsive, although she did speak to her father by telephone. Hunt & Hunt sent a follow-up letter dated 30 January 2013, unaware that Turnbull Hill Lawyers had prepared a letter dated 25 January 2013 addressed to the husband personally. Leah remained unresponsive.

9. Leah had retained Turnbull Hill Lawyers to act for her mother on 3 January 2018. Rebecca Flick of that office had conferred with the mother (in relation to family law questions) on 10 January 2013. On or about 25 January 2013 Turnbull Hill Lawyers sent their opening letter to the husband personally – advising him that there had been “an irreconcilable breakdown” in his relationship with his wife; inviting a property settlement without litigation; requesting information about property; and advising him to seek legal advice.

10. Hunt & Hunt’s response, by a letter dated 4 February 2013, invited Turnbull Hill Lawyers to obtain a medical certificate as to the wife’s current mental capacity, indicating at the same time that instructions were being obtained to respond in greater detail to Turnbull Hill Lawyers’ opening letter.

11. Further correspondence ensued, although Turnbull Hill Lawyers were resistant to a request for an early mediation.

12. This led to steps taken by or on behalf of the wife for: (a) execution by the wife (on 28 May 2013) of a will which excluded the husband and marginalised the daughter who supported him (Anna), favouring the remaining daughters; (b) execution by the wife on the same date (28 May 2013) of a Real Property Act “Transfer Severing Joint Tenancy” (subsequently registered as dealing number AH775405) in respect of the two real estate properties (the family home at Beecroft occupied by the husband, and a home unit at North Ryde occupied by the wife) held in co-ownership, notice of which Transfer was given to the husband by the Registrar General under cover of a letter dated 17 June 2013; and (c) commencement of Family Court property settlement proceedings, on 24 September 2013, by Leah as attorney and case manager for the wife.

13. It also led, in a reactive chain of events, to execution by the husband (on 11 October 2013) of a will which excluded the wife, favoured the supportive daughter (Anna), and marginalised all other daughters.

14. With the deaths of the older couple (the wife in January 2014, the husband two years later) all this led, in time, to hotly contested probate proceedings in which the factionalised daughters, on one side or the other, alleged that the wills respectively made by their parents (on 28 May and 11 October 2013) were invalid for a want of testamentary capacity.

15. Anna and her husband David propound Warwick’s will dated 11 October 2013. Elisabeth propounds June’s will dated 28 May 2013.

16. The two sets of probate proceedings – one referable to the estate of June, the other referable to the estate of Warwick – were, by order of the Court, heard together with evidence in each set of proceedings to be evidence in the other, so far as material.

17. In adversarial terms, Anna and her husband are alone on one side of the record; Elisabeth (separately represented) and Leah and Esther (jointly represented) are on the other. All six siblings (including Naomi and Ruth, not formally joined in the proceedings) have given evidence. All are bound by the outcome of the proceedings in accordance with the principle explained in Osborne v Smith (1960) 105 CLR 153 at 158-159.

18. Although named in June’s will dated 28 May 2013 as an executrix, Naomi renounced probate.

19. The parties are agreed that June’s estate has an estimated value of about $1.9 million; Warwick’s estate has an estimated value of about $3.2 million; and, consequently, their parents’ pool of assets has an estimated value of about $5.1 million.

20. Neither estate has been, or is expected to be, the subject of a claim for family provision relief under chapter 3 of the Succession Act 2006 NSW.

21. No party has sought to challenge the validity of June’s severance of the joint tenancies between her and Warwick in their co-ownership of the Beecroft and North Ryde properties. The effect of that is that it is agreed that half the value of each property is attributed to each estate, notwithstanding that June predeceased Warwick. In relation to each property, severance of the joint tenancy was recorded on the register maintained under the Real Property Act 1900 NSW.

PARTICULARS OF WILLS, ESTATES AND FAMILY

22. June Elizabeth Honeywood Croft (“June”) was born in June 1930 and died on 15 January 2014, aged 83 years, leaving:

1. a disputed will dated 28 May 2013;

2. a penultimate will dated 24 June 1975; and

3. an estate with an estimated value of about $1.9 million comprising a one half interest as a tenant in common in residential properties at Beecroft and North Ryde; shares, and a loan account in credit, in the family company Court House Service Station Pty Ltd; and cash at bank.

23. Warwick Croft (“Warwick”) was born in August 1930 and died on 4 January 2016, aged 85 years, leaving:

1. a disputed will dated 11 October 2013;

2. a penultimate will dated 26 May 2008; and

3. an estate with an estimated value of about $3.2 comprising a one half share as a tenant in common in the Beecroft and North Ryde properties; shares, and moneys owed by the company on a loan account and a long service leave account, in Court House Service Station Pty Ltd; shares in Croft Bros Pty Ltd and Fassifern Colliery Pty Ltd; and cash at bank.

24. Court House Service Station Pty Ltd is, and at all material times was, the owner of commercial premises at Newtown from which it conducts a retail business trading as “Cohoe Marine Products”. The business is a modest one. The land upon which it is conducted is the Croft family’s single most valuable asset, held through the company, jointly owned by Warwick and June.

25. June and Warwick were married in November 1953. Their marriage was never dissolved, and no application was ever made for its dissolution, although (within four months of June’s death) property settlement proceedings were commenced in the Family Court of Australia in June’s name.

26. Until June’s retirement from the Newtown business (in or about 2006) Warwick saw her most days, picking her up for work in the morning and dropping her home at night. After her retirement, their regular pattern was that Warwick would visit June at her residence (by that time, or thereabouts, the home unit at North Ryde) for a modest meal once a week.

27. Leah, and the sisters who supported her advocacy of June’s interests, regarded that level of contact, and Warwick’s close management of June’s funds, with dismissive contempt.

28. The North Ryde home unit was purchased in early 2007, at or about or shortly after the time of June’s retirement. At about the same time, in February 2007, June appointed Elisabeth and Leah as her enduring guardians and executed an enduring power of attorney in their favour.

29. Whatever the precise nature of the personal relationship between June and Warwick leading up to her hospitalisation on 23 December 2012, they appear consistently to have remained friends in a relationship which, despite their living apart, was, before mid-2012 or thereabouts, recognised within the family as a loving relationship. Theirs was not a lifestyle that would commend itself to everybody. Nevertheless, they appear to have reached an accommodation about their social arrangements.

30. With advancing age, and the onset of mental illness, their financial arrangements became an issue, at least from June’s perspective, at or about the time of June’s fall.

31. Predisposed against her father, and inclined to believe her parents’ marriage was such an empty farce as to be effectively at an end, Leah (with Elisabeth’s assistance in the conduct of company and title searches) set about isolating Warwick, retaining solicitors to act for June, and justifying all as fulfilment of an expressed desire on the part of June to control her own finances.

32. Leah’s predisposition against her father was not assisted by confidential “mother and daughter” conversations between her and June in 2012 in which, as Leah recalls, June expressed herself as having been offended by Warwick asking her whether she had sent prostitutes to him.

33. Warwick’s inappropriate question appears to have occurred at a time when he and June were both beginning a slide into dementia, and there may have been tensions between them as they negotiated terms of ongoing intimacy. In any event, reflecting on the fact that both her parents were “quite religious”, Leah appears to have been shocked by June’s account of Warwick’s reference to prostitutes, and she was herself vicariously offended.

34. A full appreciation of her parents’ slide into dementia was not then had by Leah. She was perhaps more judgemental of her father’s failings, and of her parents’ marriage generally, then she might have been with greater insight into their subjective circumstances.

35. Of the six children (all daughters) of the marriage between June and Warwick:

1. Elisabeth was born in January 1956 and is now aged 62 years.

2. Naomi was born in August 1957 and is now aged 61 years.

3. Leah was born in January 1959 and is now aged 59 years.

4. Ruth was born in June 1960 and is now aged 58 years.

5. Anna was born in September 1961 and is now aged 57 years.

6. Esther was born in December 1963 and is now aged 54 years.

36. Anna has worked in the Newtown business full-time since about 1992, gradually taking over management of the business from her parents. June retired from the business in or about 2006. Warwick retired from the business in 2010.

37. Anna’s active involvement in the business, to the practical exclusion of her siblings, appears to have been a major source of unarticulated friction between the siblings, and (from June’s perspective) a source of simmering friction between Anna and June. Anna was the administrative conduit through which Warwick saw to payment of expenses on behalf of June, and (in amounts apparently regarded by her as insufficient) provided June with spending money.

38. Another, more fundamental source of friction within the family (the exposed tip of an iceberg of discontent) was Warwick’s dedication to a hobby of racing pigeons conducted from the family home in Beecroft. The daughters who, in these proceedings, lined up against Anna continue to resent their father’s pursuit of his hobby, apparently at the expense of June’s health.

39. June suffered from a chronic lung condition attributed to her exposure to Warwick’s pigeons. It led her, on medical advice, to move out of the family home, ultimately settling in North Ryde. Warwick continued to live at Beecroft, alone, with his pigeons.

THE TERMS OF JUNE’S WILLS

40. June’s will dated 24 June 1975 provided as follows:

1. If (as happened) Warwick survived June, he was to be appointed sole executor and beneficiary of her estate.

2. If Warwick did not survive June, her sister-in-law Joan Stephenson was to be appointed executrix and trustee, with the whole of June’s estate directed towards her children.

41. June’s will dated 28 May 2013 provided as follows:

1. June expressed a wish for her remains to be cremated and for her ashes to be placed with those of her parents in the Rose Garden at Eastern Suburbs Crematorium.

2. Naomi and Elisabeth were appointed as executrices and trustees.

3. Particular items of June’s jewellery were given to each daughter, other than Leah [to whom an inter vivos gift of jewellery was made].

4. June’s shares in Court House Service Station Pty Ltd were given to her daughters (other than Anna) as tenants in common in equal shares.

5. The residue of June’s estate was given to all six daughters as tenants in common in equal shares.

42. Each of these wills is apparently rational, regular on its face and duly executed. Both wills were prepared, and witnessed, by a solicitor.

THE TERMS OF WARWICK’S WILLS

43. Warwick’s will dated 26 May 2008 provided as follows:

1. If June were to survive Warwick (which she did not), he appointed Leah and Esther as his executrices and trustees (with Elisabeth named as an alternate) and:

1. he gave his shares in Fassifern Colliery Pty Ltd and Croft Bros Pty Ltd [two companies inherited by him, with sentimental value attached] to his executrices on trust to hold the shares as a single holding for as long as practicable and to pay the income derived from them to June during her lifetime, with the shares passing to his six children on June’s death.

2. he gave his shares in Court House Service Station Pty limited to his executrices with a direction that they sell the company’s business and the Newtown land on the best terms practicable, with the proceeds of sale being divided between his six children.

3. he gave the residue of his estate to June.

2. If (as occurred) June did not survive Warwick:

1. he appointed Leah and Esther as his executrices (with Elisabeth named as an alternate).

2. he gave his shares in Fassifern Colliery Pty Ltd and Croft Bros Pty Ltd to his executrices to be held on trust for his six children, with a direction that this shareholding be as far as practicable retained in a single holding for as long as practicable.

3. he gave his shares in Court House Service Station Pty Ltd to his executrices with a direction that they dispose of the company’s business and the Newtown land on the best terms practicable and divide the proceeds of sale between his six children.

4. he gave the residue of his estate to his six children in equal shares.

44. Warwick’s will dated 11 October 2013 provided as follows:

1. Anna and her husband David were appointed as Warwick’s executors.

2. The sum of $40,000 was given to each of Warwick’s children other than Anna.

3. The residue of Warwick’s estate was given to Anna.

4. The will contained a declaration that Warwick had “made provision for my daughter [Anna] having regard to her commitment to maintain and continue to operate the business known as Cohoe Marine Products and also her support for me over many years”.

45. Each of these wills is apparently rational, regular on its face and duly executed. Both wills were prepared, and witnessed, by a solicitor.

TESTAMENTARY CAPACITY : THE LAW

46. All parties expressly limited the questions in dispute between them to:

1. whether June had testamentary capacity to make her will dated 28 May 2013, instructions for which were given by June to her succession law solicitor (Natalie Power) on 22 March and 28 May 2013.

2. whether Warwick had testamentary capacity to make his will dated 11 October 2013, instructions for which were given to his solicitor (Ian Miller) on 2 and 11 October 2013.

47. Although all parties explored the Croft family’s finances, affairs and relationships over an extended period before, and after, the date of each will under challenge – at times giving the impression of a case of broader ambit than a contest about testamentary capacity – all parties disclaimed a broader case. In particular, no party advanced a case of undue influence, in probate (Winter v Crichton (1991) 23 NSWLR 116 at 121-122) or in equity (Bridgewater v Leahy (1998) 194 CLR 457 at [62]-[63]).

48. All parties articulated their case (and the medico-legal experts from whom they adduced evidence explained their opinions) primarily by reference to the elements of testamentary capacity traditionally associated with the following extract from Banks v Goodfellow (1870) LR 5 QB, 549 at 565:

“It is essential to the exercise of [a power to make a will] 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 bringing about a disposal of it which, if the mind had been sound, would not have been made”.

49. Attention was also drawn to recent observations made by the Court of Appeal in Singh v Singh [2018] NSWCA 30 at [140]-145] and Carr v Homersham [2018] NSWCA 65 at [8] and [46], as well as a host of other authorities.

50. Reference was made to Bailey v Bailey (1924) 34 CLR 558 at 570 et seq and Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698 at 704-707 for convenient summaries of the principles governing onus of proof, presumptions and concerns about delusional states of mind; but:

1. reference was also made to recent observations of Basten JA (with whom Macfarlan and Leeming JJA agreed) in Carr v Homersham [2018] NSWCA 65 at [46]-[ 47]; and

2. the contest in the present proceedings travels beyond a presumption of capacity because the parties acknowledge that evidence demonstrates that each of June and Warwick, to a greater or lesser extent, suffered a mental illness in the critical period between, say, mid-2012 and late 2013, the primary question being whether at the critical dates in 2013 the requisite testamentary capacity in fact existed.

51. Having extracted a passage from Gleeson CJ’s judgment in Re Griffith (dec’d); Easter v Griffith (1995) 217 ALR 284 at 290, Basten JA made the following observations in Carr v Homersham [2018] NSWCA 65 at [46]-[47]:

“[46]   There is a ready temptation to reformulate [propositions about onus of proof in probate proceedings] in the language of presumptions and shifting burdens, and by reference to burdens of adducing evidence and burdens of proof. However, such complexity is unlikely to be helpful and may distract from a determination of what is in substance a purely factual issue, the resolution of which will turn on the nature of the particular matters raised, and by whom.

[47]   To speak of there being a ‘doubt’ as to testamentary capacity is to say little more than that a real issue has been raised on the evidence, which requires the resolution of the court. Unless such an issue has been raised, testamentary capacity need not be addressed; its existence will be presumed. Once the issue is raised, the court must resolve it; that must be done by a consideration of all the evidence and the inferences which may be drawn from it. It is true that the court must be affirmatively satisfied as to testamentary capacity, but in doing so, it should be alert to the fact that to find incapacity and thus invalidate a formally valid will is, in the words of Gleeson CJ, ‘ a grave matter ‘. A doubt which does not preclude the probability that the testator enjoyed testamentary capacity cannot warrant a finding of invalidity”.

52. The parties are agreed that that the ultimate question for the Court is whether, acting judicially, it is satisfied that a will propounded is the last will of a free and capable testator: Tobin v Ezekiel (2012) 83 NSWLR 757 at [44]; Woodley-Page v Symons (1987) 217 ALR 25 at 35.

53. The following extract from Worth v Clasohm (1952) 86 CLR 439 at 452-453 encapsulates the general character of the current proceedings:

“After anxious consideration of the whole case we are of opinion that there is no sufficient reason for denying that a testatrix who appeared to so many competent observers to be completely sane, and made a completely rational will, lacked a sound disposing mind. A doubt being raised as to the existence of testamentary capacity at the relevant time, there undoubtably rested upon the plaintiff [the propounder of the testatrix’s will] the burden of satisfying the conscience of the court that the testatrix retained her mental powers to the requisite extent. But that is not to say that he was required to answer the doubt by proof to the point of complete demonstration, or by proof beyond a reasonable doubt. The criminal standard of proof has no place in the trial of an issue as to testamentary capacity in a probate action. The effect of a doubt initially is to require a vigilant examination of the whole of the evidence which the parties placed before the court; but, that examination having been made, a residual doubt is not enough to defeat the plaintiff’s claim for probate unless it is felt by the court to be substantial enough to preclude a belief that the document propounded is the will of a testatrix who possessed sound mind, memory and understanding at the time of its execution….”

54. Particular reference was also made to the observations of Windeyer J in Kerr v Badran [2004] NSWSC 735 at [48]-[50] – affirmed by the Court of Appeal in Zorbas v Sidiropoulous (No. 2) [2009] NSWSC 197 at [64]-[65], [94] and [99] – about the need to allow latitude to older people in assessing their knowledge of their assets:

“… Older people living today may well be aware that they own substantial shareholdings or substantial real estate, but yet may not have an accurate understanding of the value of those assets, nor for that matter, the addresses of the real estate or the particular shareholdings which they have. Many people have handed over management of share portfolios and even real estate investments to advisors. They may be quite comfortable with what they have; they may understand that they have assets which can provide an acceptable income for them, but at the same time they may not have a proper understanding of the value of the assets which provide the income. They may however be well able to distribute those assets by will. I think that this needs to be kept in mind in 2004 when the requirement of knowing, ‘the extent’ of the estate is considered. This does not necessarily mean knowledge of each particular asset or knowledge of the value of that asset, or even a particular class of assets particularly when shares in private companies are part of the estate….”

55. In adopting those observations (set in broader observations by Windeyer J) in Zorbas v City Sidiropoulous (No. 2) [2009] NSWCA 197 at [65], Hodgson JA made the following observations which also bear upon the current proceedings:

“The criteria in Banks v Goodfellow are not matters that are directly medical questions, in a way that a question whether a person is suffering from cancer is a medical question. They are matters for common sense judicial judgement on the basis of the whole of the evidence. Medical evidence as to the medical condition of a deceased may of course be highly relevant, and may sometimes directly support or deny a capacity in the deceased to have understanding of the matters in the Banks v Goodfellow criteria. However, evidence of such understanding may come from non-expert witnesses. Indeed, perhaps the most compelling evidence of understanding would be reliable evidence (for example, a tape recording) of a detailed conversation with the deceased at this time of the will displaying understanding of the deceased’s assets, the deceased’s family and the effect of the will. It is extremely unlikely that medical evidence that the deceased did not understand these things would overcome the effect of evidence of such a conversation.”

56. In concurring with Hodgson JA, Young JA made the following observations of his own ([2009] NSWCA 197 at [94]):

“I should particularly note that I wholeheartedly endorse Hodgson JA’s adoption of the view of Windeyer J in Kerr v Badran [2004] NSWSC 735 at [49] that even though this court continues to accept the general authority of Banks v Goodfellow (1870) LR 5 QB 549, 567, insofar as that case asserts that a testator must be seen to have recollected the property he or she has to dispose of, it is not necessary that the testator know precisely the nature and worth of each and every asset in his or her portfolio”.

57. Bergin CJ in Eq concurred with Hodgson JA and with the additional reasons of Young JA: [2009] NSWCA 197 at [99].

58. A similar observation was made recently by the Court of Appeal in Carr v Homersham [2018] NSWCA 65 at [8] where Basten JA (with whom Macfarlan and Leeming JJA agreed) said: “No high level of precision is required to be demonstrated in relation to the testator’s knowledge of her property as at the date of execution of the will”.

59. On the significance or otherwise of delusions or the like from which a testator may have suffered, the following observations by Latham CJ in Bull v Fulton (1942) 66 CLR 295 at 299 may be taken as an authoritative guide:

“... where an insane delusion ‘has had, … or is calculated to have had, an influence on the testamentary disposition, it must be held to be fatal to its validity’(Banks v Goodfellow (1870) LR 5 QB at 561). The onus in such a case is on those supporting the will to show that the delusion did not influence the will (Boughton v Knight (1873) LR 3 P&D 64; Smee v Smee (1879) 5 PD 84 at 91; Bailey v Bailey (1924) 34 CLR 558 at 570, 571). This does not mean that a propounder must absolutely demonstrate this negative proposition. He must establish it according to the standard of proof required in civil cases. It will be sufficient for him to satisfy the court that it is a reasonable inference from the facts of a delusion proved to exist did not affect the disposition in question.”

60. If (which I doubt) it is necessary to define with precision what is meant by a “delusion”, I proceed upon an assumption that a delusion is a fixed and permanent belief in facts which do not exist and which the person who believes them cannot be reasoned out of: Bull v Fulton (1942) 66 CLR 295 at 339; Worth v Clasohm (1952) 86 CLR 439 at 449; Re Estate of Hodges (1988)14 NSWLR 698 at 706. Ultimately, however, particular terminology depends for meaning on context. In evidence adduced in these proceedings the word “delusion” was sometimes used interchangeably with “hallucination” or similar words of description.

61. Reference was also made to observations of Gleeson CJ (with whom Handley JA agreed) and Kirby P in Re Estate of Griffith (dec’d); Easter v Griffith (1995) 217 ALR 284.

62. In that case Gleeson CJ wrote the following (at 291):

“Where an alleged delusion concerns a fact, or state of affairs, bearing upon a judgement as to the moral claim one person has upon another’s bounty, and the question of its falsity is capable of objective determination, the task of the court is relatively straightforward. However, there may be cases in which one person’s estimation of another’s claims may seem harsh and unwarranted, and perhaps even unnatural, but it is impossible to assign a reason for that, or to point to any false belief. Testamentary capacity is not reserved for people who are wise, or fair, or reasonable, or whose values conform to generally accepted community standards. A person may disinherit a child for reasons that would shock the conscience of most ordinary members of the community, but that does not make the will invalid”.

63. In a judgment dissenting on the facts of the particular case, but not the legal principles to be applied, Kirby P wrote the following (at 295-296):

“In judging the will propounded, and the challenge to it, the court must consider all of the facts proved which are relevant to the testamentary capacity of the testator. It must not be deflected into a consideration of medical evidence, still less of jargon, as to whether particular conditions such as a ‘delusion’ or ‘paranoia’ have been established. Such evidence is only relevant as it throws light on the court’s responsibility to decide whether the testator has appreciated the extent of the property to be disposed of; realised the various calls for disposition to which consideration should be given; and was able to evaluate those calls to give effect to the resulting dispositions by the provisions of the will: see [Banks v Goodfellow (1870) LR 5 QB 549 at 557]. There is nothing excessively technical in any of these considerations. What the court is asked to do is to determine, on all the evidence, whether the purpose for which the law provides and protects testamentary freedom, the testator had the capacity to give effect to the legal privilege. Determining that question, courts must steadfastly resist the temptation to rewrite the wills of testators which they regard as unfair, unwise or harsh. The only warrant for courts to do that is to be found in the power that parliament, which has given, now, under the Family Provision Act. No wider legislative mandate has been given to the judges. They must not usurp it”.

TESTAMENTARY CAPACITY : ANALYSIS

Overview

64. It is not disputed that both June and Warwick at the time they executed their respective 2013 wills were suffering from some form of mental illness – perhaps characterised, albeit loosely, as “dementia” – but:

1. In relation to June, the major focus of attention is on:

1. whether she understood the extent of the property of which she was disposing; and

2. whether she was able to comprehend and appreciate the claims to which she ought to give effect.

2. In relation to Warwick, the major focus of attention is on whether (harbouring dark thoughts about June and his adversarial daughters from time to time, and experiencing hallucinations, if not delusions, about prostitutes, brothels and other things remote from his reality) he was able to comprehend and appreciate the claims to which he ought to give effect.

65. Evidence was adduced from family members about their respective encounters with June and Warwick in late 2012, and the greater part of 2013; but heavy emphasis was placed on the evidence of their respective solicitors (the family law lawyer Rebecca Flick and the probate lawyer Natalie Power for June; Ian Miller and his assistant Cheryl Po for Warwick) and the evidence of each side’s medico-legal experts (Associate Professor Tuly Rosenfeld, retained by Anna; and Dr Jane Loni, retained by Leah et al) drew attention to particular features of the evidence.

66. Of particular note in relation to an assessment of June’s testamentary capacity on 28 May 2013 is that, on her own initiative, on 27 May 2013 she wrote out in her own hand instructions for how, and why, she wanted her estate to be shared between her daughters.

67. Of particular note upon an assessment of Warwick’s testamentary capacity on 11 October 2013 is that, throughout a period extending from 2 October 2013 to 15 November 2013, he was engaged in a process of giving detailed instructions about his family, relationships and property to the family law solicitor (Cheryl Po) working under the supervision of his solicitor, Ian Hunt.

68. Each of the solicitors who took instructions from June or Warwick (whether in relation to family law proceedings or the preparation and execution of a will) was mindful of a need for caution in assessing his or her client’s capacity to give instructions, and each solicitor conscientiously endeavoured (albeit in a manner, perhaps, not beyond criticism) to be satisfied that the client possessed the requisite capacity. Each of them had to negotiate circumstances in which their client was living in a factionalised family; each of them took precautions to ensure that the voice heard, and acted upon, was the voice of the client.

69. Mr Miller also had broader experience of Warwick than a solicitor-client relationship. He and Warwick were neighbours, and they knew each other socially from regular contact at local church services. Warwick was a Baptist who regularly strayed into the local Anglican church for its Sunday evening service, where Mr Miller could be found as a parishioner.

70. Each of June and Warwick executed a will which was rationally responsive to personal experience of “family” in 2012/2013 (Warwick favouring Anna, June favouring their other daughters), yet not biased to the extent of excluding the less favoured daughters (Anna in the case of June, her sisters in the case of Warwick).

71. Although the wisdom of a threat or institution of formal family law proceedings in 2013 is open to doubt, and June might be thought to have lacked a full appreciation of her autonomy in financial matters (including about $50,000 in a term deposit in her name), her perception that she lacked control over her finances was not wholly unjustified. In a practical sense, she was dependent upon Warwick and Anna in the management of her finances. When told of June’s death in early 2014, Warwick is reported to have said, reflectively, that he should have given her more money.

72. Although Warwick might from time to time have overstepped the mark of propriety in his criticism of June and daughters other than Anna, his shock at being told that his marriage was allegedly no longer viable, his appreciation of Anna’s loyalty and assistance, and his perception of a need to execute a fresh will in response to steps taken, or likely to have been taken, by June were all understandable by standards of common behaviour.

73. The wills made in 2013 addressed facts subjectively assessed, but objectively verifiable from each will-maker’s perspective.

74. I am satisfied that each of the witnesses called to give evidence in these proceedings gave evidence honestly and to the best of his or her ability. Nevertheless, I approach all the evidence with a caution responsive to the facts that:

1. the central players (June and Warwick) are not available to explain themselves, or to refute evidence touching upon them.

2. each of the children of the deceased, and the members of their extended family who also gave evidence (Anna’s husband David, and their daughter Rebecca; Warwick’s brother-in-law, Darrell Stephenson; and Leah’s husband Peter) may have been affected in the giving of their evidence, subconsciously, by the family feud most graphically presented in evidence of tensions between Anna and Leah, each closely identified with a particular parent.

3. none of the four lawyers who gave evidence of personal contact with June and Warwick (Rebecca Flick and Natalie Power as solicitors for June; Ian Miller and Cheryl Po as solicitors for Warwick) claims medical expertise.

4. neither of the medico-legal witnesses who gave evidence (Associate Professor Rosenfeld and Dr Loni) had personal contact with June or Warwick.

75. The family members closest to the centre of events (Anna, her husband, their daughter; Leah, her husband; and Elisabeth) were perhaps too close to events to be wholly objective. Those more on the periphery (Mr Stephenson, Naomi, Ruth and Esther) were more measured in the evidence they gave.

75. Two observations can be made by way of illustration of this.

76. First, Anna and her husband strained to find innocent explanations for aberrant statements of Warwick that others, less identified with his interests, elevated to the status of a delusion; in the event, the fact that Warwick freely executed a will that made some provision (albeit not much) for each of his adversarial daughters, despite his angst about their perceived interference with his marriage, suggests that that he did not lack a capacity for objective reasoning in documenting his testamentary intentions.

77. Secondly, on the other hand, Esther was prepared to concede that, between the time she saw them in January/February 2012 and when she next saw them in July 2012, both Warwick and June had suffered a deterioration in their mental health.

78. She was also prepared to concede (as I apprehend may have been the case) that a failure on the part of all six of the daughters of Warwick and June to appreciate fully the fact and nature of that deterioration may have rendered them secondary victims of the dementia their parents suffered.

79. Each daughter appears to have acted on a comfortable assumption that she was “doing the right thing”, sustained by a failure to consult the whole family and by too high an opinion of what a resort to law can achieve.

June’s Testamentary Capacity

81. A problem with assessing June’s understanding of the extent of the property she was disposing of by her will is that, throughout the period between January 2013 (when Turnbull Hill lawyers were retained on her behalf) and 28 May 2013 (when her will was made), she was, to an extent not easily determined in retrospect, engaged with her daughters Leah and Elisabeth, and with her solicitors, in a process of discovery designed to crystallise everybody’s understanding of her property, hitherto managed by Warwick with the assistance of Anna.

82. Allowance must be made for the fact that, for several years before 2013, June was not directly or actively involved in management of her property. Inquiries had to be made about the nature and extent of her property on that account alone.

83. Within the office of Turnbull Hill Lawyers, Rebecca Flick (as a family law specialist) referred June to Natalie Power (who practised predominantly in wills and estates) on 12 March 2013. Ms Power interviewed June, first, on 22 March 2013 and, secondly, on 28 May 2013.

84. At the first interview she was given by June a two-page document (mostly typed, but with an end note in Leah’s handwriting) prepared by a Leah, she says, with June in close proximity; that document summarised personal details of June and her daughters, June’s property interests, June’s allocation of “keepsake jewellery” between her daughters; and contained sundry other information bearing upon the preparation of the will. It did not speak in detail about June’s intention as to distribution of her property generally, or identify any person as a prospective executor.

85. At the second interview, June gave to Ms Power a document (written in her own hand and authorship of which Leah disclaimed) in the following terms:

“27/5/13

I June Croft would like my shares in Court House Service Stn Pty Ltd to be left to five of my daughters in equal shares. There [sic] names are Elisabeth Elford, Naomi Bryant, Leah Croft, Ruth Croft and Esther Croft. I would like the rest of my Estate to be divided among my six daughters Elisabeth, Naomi, Leah, Ruth, Anna and Esther.

June”

86. After inquiry (including consultation with Dr Katrina Tiller) June’s solicitors were ultimately satisfied of her capacity to give instructions for the severance of joint tenancies, and the execution of a will. They were less confident about June’s mental capacity by the time, in September 2013, family court proceedings were commenced.

87. At the time June executed her will on 28 May 2013 Turnbull Hill had in their possession a medical report dated 9 May 2013 prepared by Dr Tiller, June’s general practitioner.

88. That report (the product not only of earlier contact but of an examination on 9 May 2013) included the following observations:

“Mrs Croft is elderly and frail. She suffers with a chronic lung condition requiring home and ambulatory oxygen and is on a number of medications. She suffers with mild cognitive memory loss that fluctuates on a daily basis. On Mini mental state examination today she scored 22/30, she scored 25/30 in February 2013 when she was less stressed. This will fluctuate with her degree of anxiety and she was anxious about the consultation today.

I believe Mrs Croft understands the nature and effects of making a will.

I don’t believe she understands the extent of the property to which she may be entitled, as she has become less able to manage monetary affairs herself. She is currently being fully cared for by her family, out of her independent living and is reliant on them to look after her. I don’t expect her to return to independent living. She will need to be cared for.

There is no evidence of disorder of her mind or delusion that would poison her feelings towards potential beneficiaries, pervert her sense of right, or prevent the exercise of her natural faculties. I do believe however because of her frail and declining cognitive functioning complex decisions regarding the value of money and property and what she is legally entitled to should be assisted by those with her power of attorney.”

89. Dr Tiller’s report did not address directly whether June had will making capacity at the time of examination, although that question was plainly within contemplation.

90. In her attendance upon June for the purpose of confirming June’s instructions and executing a will, Ms Power took care to interrogate June about her property, her family and her testamentary intentions.

91. In the light of this evidence, taken as a whole, I am satisfied that June had the requisite testamentary capacity to make her will dated 28 May 2013, and that that document is the last will of a free and capable testatrix.

92. Ongoing deterioration in June’s mental health throughout 2013, culminating in Leah’s institution of the Family Court proceedings commenced in September 2013, needs to be taken into account in assessing June’s capacity at the time she executed her will; but, taking a snapshot at that critical time, I am comfortably satisfied that June possessed the requisite capacity to make her will.

93. The form of the will; the manner of its preparation and execution; the fact and terms of June’s handwritten note of 27 May 2013; the measured rationality of the Will’s provisions from June’s perspective of tensions within her family; and the evidence of those (lay and legal) who observed her all point in the direction of a finding of testamentary capacity.

Warwick’s Testamentary Capacity

94. On an independent review of the facts, viewed from Warwick’s perspective of tensions within the family, substantially the same finding should be made about Warwick’s testamentary capacity at the time he executed his will dated 11 October 2013. I am satisfied that that will is the last will of a free and capable testator.

95. The form of the will; the manner of its preparation and execution; the measured rationality of its provisions from Warwick’s perspective; Mr Miller’s personal familiarity with Warwick over an extended period of time; Ms Po’s familiarity with Warwick during the course of preparation of his Family Court affidavit; and the evidence of Warwick’s brother-in-law Darrell Stephenson of regularity in Warwick’s behaviour all point in the direction of a finding of testamentary capacity.

96. I accept the evidence of Messrs Miller and Stephenson and Ms Po that Warwick presented himself to them as rational, without the aberrant behaviour observed by others, including counsel retained to act for Warwick in the unfolding family law disputation.

97. Warwick’s will is a rational, measured response to the domestic disharmony that had confronted him over the previous 11 months or so.

98. I accept that Warwick’s mental health deteriorated from about mid-2012 and that, between that time and when he made his will, he, from time to time, was prone to hallucinations about prostitutes, brothels and other things remote from his reality. A clear, documented illustration of such a thought pattern can be found in a telephone conversation between Warwick and his daughter Naomi on 30 January 2013.

99. In that conversation, as documented in a contemporaneous note and elaborated by Naomi in her affidavit, Warwick accused Naomi’s siblings of being “sluts, whores and prostitutes”; later in the conversation, he accused June of sending prostitutes to knock on his door and to ring his doorbell late at night.

100. Naomi’s evidence is that Warwick’s wild talk on this occasion was totally out of character for the man she knew as her father.

101. However: (a) Naomi’s account of the conversation makes it plain that Warwick’s allegations against June and his daughters were closely related to his complaint that his daughters had taken June away without consultation with him, and without making arrangements for him to be involved in caring for her; (b) Naomi deposed to having had no subsequent conversation with Warwick in which he used foul language of the type she encountered in their telephone conversation; and (c) unbeknown to Naomi, at the time of their telephone conversation Warwick had not long received the letter dated 25 January 2013 of Turnbull Hill Lawyers confronting him with their distressing allegation that there had been “an irreconcilable breakdown” in his marriage.

102. Warwick’s propensity to descend to gutter talk about his wife and adversarial daughters appears, at least in part, to have been a function of emotional stress associated with what appeared to him (not without grounds in objective reality) to be a threat to his domestic tranquillity orchestrated by Leah.

103. The evidence of Warwick’s brother-in-law, Darrell Stephenson, is important in establishing a different perspective of Warwick than that which (without critical information about the nature and depth of what Warwick was suffering) Naomi experienced in her dramatic telephone conversation with her father.

104. Mr Stephenson deposed to regular, day-to-day contact with Warwick following June’s discharge from hospital in December 2012, and he accompanied Warwick to Leah’s residence when, in February 2013,Warwick was allowed to visit June. He deposed to Warwick’s distress about the legal action taken against him, and of how it left Warwick upset, perplexed and worried. Nevertheless, he also deposed to Warwick routinely engaging in regular social activities without irregular behaviour.

105. Mr Stephenson observed, also, that throughout 2013 Warwick was living alone in the Beecroft property; he cooked his own food and was able to look after his own physical needs; he appeared able to manage his own financial affairs; and he continued to drive.

106. Warwick’s Family Court affidavit was sworn on 15 November 2013. His execution of it was witnessed by Ms Po, the solicitor charged with its preparation over the preceding six weeks or so. She deposed to her observations of Warwick in terms confirmatory of his capacity to provide detailed instructions to her.

107. The affidavit includes (in paragraph 61) the following statement by Warwick, which illustrates his perspective of family life during 2013:

“We [June and Warwick] maintained an ongoing and amicable relationship until December 2012. To date, June had [sic] never communicated to me personally about her intention to end our relationship and to divide the joint assets. I did not know that June considered the relationship had broken down irretrievably until I received a letter from her solicitors on around 25 January 2013. However, I do not believe that June has any intention to end our relationship. I believe that she wants to maintain the relationship and continue to see me. I believe that it was Leah’s intention to commence proceedings.”

108. A passing attempt was made to criticise the correctness of Warwick’s disclosure of his financial circumstances in his affidavit – an attempt to suggest that he was not perhaps in full command of his mental faculties – but that came to nothing of significance. The form and content of the affidavit is overwhelmingly inconsistent with any blanket attribution of incapacity to Warwick.

109. In the end, the lay evidence and the form and content of Warwick’s will provide confirmation that he possessed the requisite capacity to make his will.

The Forensic Medical Evidence

110. Re June. Drs Rosenfeld and Lonie agreed that June is likely to have understood the purpose and nature of a will at the time she executed her will, and that she is likely to have retained knowledge of her beneficiaries.

111. They also agreed that June was unlikely to have understood the complexity or precise value of her estate, or its constituent parts, at the time she executed the will, despite having some knowledge of her assets. This is not altogether surprising, however, given June’s retirement from the family business in 2006 and her practical dependency upon Warwick and Anna for management of her financial affairs.

112. The experts’ joint report contains a passage which records an agreement on the part of Drs Rosenfeld and Lonie that, as a result of her dementia, June is unlikely to have been able to weigh up, in a cognitive sense, the relevant issues in formulating her testamentary wishes at the time she executed her will. However, if I accept (as I do) that June’s handwritten note dated 27 May 2013 was a product of her own mind, that document, in my opinion, sufficiently demonstrates a capacity to comprehend and appreciate the claims on her bounty and to weigh up those claims in light of the facts as June had observed them through the lens of Leah.

113. The experts agreed that the medical evidence does not suggest that June was suffering from delusional thought patterns within the context of her dementia, or that her affections were poisoned as a result of delusional thoughts.

114. Satisfied that there are factual explanations sufficient to counterbalance the experts’ reservations about June’s capacity, I am comfortably satisfied in acceptance of the evidence of lay and legal witnesses that June had sufficient capacity to execute her will.

115. Re Warwick. Drs Rosenfeld and Lonie agreed that, at the time he executed his will, Warwick would have understood the nature of the act of making a will and its effects; and that he would have understood the extent of the property of which he was disposing.

116. Their disagreement focused upon whether Warwick would have been able to comprehend and appreciate the claims on his bounty without his affections being poisoned, and his sense of right being perverted, by the dementia from which, they agreed, he suffered.

117. Their disagreement focused, more particularly, upon the extent of Warwick’s cognitive impairment at the time he executed his will, accepting that: (a) there was likely to have been a variability in his cognitive ability at various times; and (b) his cognitive ability may have been affected, from time to time, by medication prescribed for him.

118. The forensic medicine, without the benefit of clinical examination of Warwick, is inconclusive. It directs attention back: (a) to the lay evidence of those (including his solicitors) who deposed to regular, rational, measured dealings with Warwick; (b) to the form and content of Warwick’s will; and (c) to the measured and reasoned character of the will as a response to the facts objectively observable from Warwick’s perspective.

119. Satisfied that there are factual explanations sufficient to counterbalance concerns about Warwick’s hallucinations and occasional wild talk, I am comfortably satisfied in acceptance of the evidence of lay and legal witnesses that Warwick had sufficient capacity to execute his will.

CONCLUSION

120. I am satisfied that the respective wills of June and Warwick are each the last will of a free and capable will-maker.

121. Accordingly, subject to allowing the parties an opportunity to make submissions about the form of the orders to be made, and costs, I propose to make orders to the effect of those here set out.

122. In the proceedings numbered 2016/00033995 relating to June’s estate, I propose to make orders to the following effect:

1. ORDER that probate of the will dated 28 May 2013 of June Elizabeth Honeywood Croft, who died on 15 January 2014, be granted to Elisabeth Croft Elford in solemn form.

2. ORDER that the proceedings be referred to the Registrar to complete the grant in accordance with the Probate Rules.

3. ORDER that the amended statement of claim filed on 26 August 2016 be dismissed.

123. In the proceedings numbered 2016/00048899 relating to Warwick’s estate, I propose to make orders to the following effect:

1. ORDER that probate of the will dated 11 October 2013 of Warwick Croft, who died on 4 January 2016, be granted to Anna Sanders and David John Sanders in solemn form.

2. ORDER that the proceedings be referred to the Registrar to complete the grant in accordance with the Probate Rules.

3. ORDER that the further amended statement of cross-claim filed on 13 September 2017 be dismissed.

124. I will entertain submissions about the costs of the proceedings.

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Amendments

07 February 2019 - .

Decision last updated: 07 February 2019