Re Gillam
[2016] VSC 5
•21 January 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROBATE LIST
S CI 2015 06539
IN THE MATTER of the last will and testament of MURNA PHOEBE GILLAM
- and –
IN THE MATTER of section 21 of the Wills Act 1997
| IAN MORRISON WHITE as attorney for MURNA PHOEBE GILLAM, propositus | Plaintiff |
| v | |
| NOEL WILBUR GILLAM | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 January 2016 |
DATE OF JUDGMENT: | 21 January 2016 |
CASE MAY BE CITED AS: | Re Gillam |
MEDIUM NEUTRAL CITATION: | [2016] VSC 5 |
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WILLS & ESTATES — Court authorisation for the making of a statutory will — Propositus lacks testamentary capacity — Where applicant is the attorney for the propositus — Where proposed statutory will seeks to exclude husband — Where propositus and husband have entered into a matrimonial property settlement but are not legally separated — Wills Act 1997, ss 21, 21A, 21B —Supreme Court (Miscellaneous Civil Proceedings) Rules 2008, O 17 —Re Fenwick [2009] NSWSC 530— Saunders v Pedemont [2012] VSC 574 — Bailey v Richardson [2015] VSC 255
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Newton | Russell Kennedy |
| For the Defendant | Mr M McKenzie | James Hopper & Associates |
HER HONOUR:
Introduction
The plaintiff, as the attorney of his mother, Murna Phoebe Gillam (‘Mrs Gillam’), filed an urgent application pursuant s 21 of the Wills Act 1997 (‘the Act’) seeking orders for the making of a statutory will on her behalf (‘the proposed will’).
Mrs Gillam is now aged 92 years. She married her first husband and they had two children. Her first husband died in 1963. In April 1976 she married the defendant. She has no children from her second marriage. She now suffers from dementia and lacks testamentary capacity. She is not expected to live for much longer.
The proposed will appoints the plaintiff and his brother as the executors of Mrs Gillam’s will and trustees of her estate. It provides for a legacy of $30,000 to her step daughter (the defendant’s daughter), legacies of $20,000 each to her six grandchildren and legacies of $20,000 each to her six step-grandchildren (the defendant’s grandchildren). It then provides for certain of her chattels and effects to pass to her two sons, her personal chattels and effects of a domestic nature or use to her husband and the remaining personal chattels and effects to her sons. The residue of her estate is to be paid to her two sons equally between them.
The proposed will does not include any provision for the defendant. He submits that the application should be dismissed on the grounds that the plaintiff has failed to establish her case for the authorisation of a statutory will.
If the plaintiff’s application fails, the defendant will benefit under Mrs Gillam’s last will dated 11 July 2011 (‘the 2011 will’) which provides a life interest to him in the matrimonial home, being an apartment in Canterbury then registered in her name only, (‘the Canterbury property’) and one third of the residue of the estate.
The defendant submits that it is not reasonable in all the circumstances for orders to be made authorising the proposed will. He submits that Mrs Gillam should make provision for the defendant from her existing assets, which would occur under her 2011 will. The basis of this submission is that they have been married for almost 40 years.
He further submits that, pursuant to s 21A of the Act, the plaintiff has failed to provide certain evidence as required by that section. In this regard, the defendant submits the plaintiff has failed to provide evidence as to the likelihood of competing claims being made by Mrs Gillam’s sons or others, nor has she provided any evidence of her sons’ financial circumstances. It was submitted that this means the Court has no evidence upon which to evaluate the competing strengths of the claims of the sons or others that may be made against Mrs Gillam’s estate and is unable to weigh up those claims.
Factual background
Since the 2011 will was executed, the Canterbury property has been transferred to the defendant. This has come about as a result of the resolution of certain events and disputes between the parties set out below.
On 22 September 2011, some months after the execution of her 2011 will, Mrs Gillam transferred a half interest in the Canterbury property to the defendant. The plaintiff’s evidence was that the transfer was to give the defendant a greater sense of security about his place of residence, as well as to ease tension that had developed between them over their financial affairs.
In 2015 the plaintiff issued a proceeding in the County Court on behalf of Mrs Gillam seeking a freezing order in relation to the defendant’s bank accounts. This was because the plaintiff was concerned that the defendant had transferred substantial funds from Mrs Gillam’s bank accounts into his name. The defendant denied any wrongdoing. The application was resolved by undertakings given by both the plaintiff and the defendant not to diminish or encumber certain assets, other than to pay ordinary living expenses.
In July 2015, the defendant filed proceedings in the Federal Circuit Court of Australia seeking orders for a just and equitable property settlement under Part VIII of the Family Law Act 1975 (Cth). This proceeding was settled with final orders signed on 16 November 2015. Orders were made on the basis that the financial relationship between the parties was finalised, including any liability to provide future maintenance for the defendant and to avoid further proceedings between them. After the financial settlement, the defendant did not support Mrs Gillam financially. For all intents and purposes, as a result of the financial settlement, Mrs Gillam and the defendant were separated financially.
The effect of the settlement was that Mrs Gillam’s remaining half share of the Canterbury property was to be transferred to the defendant, funds of $550,000 were to be retained by the defendant, Mrs Gillam retained her property at Fairhaven, each of Mrs Gillam and the defendant’s share portfolios were retained by them, loans to members of the defendant’s family were retained by the defendant and loans owing by members of Mrs Gillam’s family were retained by her.
The settlement resulted in a division of matrimonial assets between them on the basis of approximately 53/47 per cent in favour of Mrs Gillam. In monetary value, Mrs Gillam’s share has a value of approximately $1.986 million and the defendant’s share has a value of approximately $1.730 million.
Plaintiff’s submissions
The plaintiff submits that a person who has just entered into a financial settlement that has divided the assets between the parties would want to make a will to exclude the other party, particularly where, as a result of the financial settlement, the defendant received substantial assets that are sufficient to provide for his ongoing maintenance and support.
He further submits that this is even more likely where the marriage was a second marriage for both parties and where both had children from earlier marriages. With the death of Mrs Gillam imminent, unless a new will is made, there is a significant risk that the majority of the matrimonial assets would pass to the defendant and his family.
The plaintiff also relies on the pattern of gifts made in Mrs Gillam’s three wills over the period 2005 to 2011. In her wills made during that period, which were made when she had testamentary capacity, almost all of the matrimonial assets were in her name. In those wills, Mrs Gillam did not make provision for the defendant in the equivalent sum of what he received under the matrimonial property settlement.
Her will dated 5 December 2005 appointed her two sons and the defendant as her executors and trustees. It provided for legacies to her grandchildren and great grandchildren, her step daughter and to her step grandchildren. She then made specific bequests of certain items to her two sons and the residue of her estate was then to be divided in to three parts: one part was left to her son, another part was left to her other son and the third part was to be held on trust for the defendant for life, with him being entitled to remain in occupation in Mrs Gillam’s home in North Balwyn (where she and the defendant then resided) for one year or for such longer period as her trustees agreed, with the defendant responsible for the payment of outgoings. On the death of the defendant, the third part was left to her two sons in equal shares.
Her will dated 8 July 2009 appointed her two sons and the defendant as her executors and trustees. It provided for legacies to her grandchildren and her step grandchildren. She then made specific bequests of certain items to her two sons and the residue of her estate was then to be divided in to three parts: one part was left to her son, another part was left to her other son and the third part was left to the defendant with him having an option to acquire Mrs Gillam’s Canterbury property (where she and the defendant then resided) as part of his part of the residue.
Her 2011 will appointed her two sons and the defendant as her executors and trustees. It provides for a legacy of $30,000 to her step daughter, legacies of $20,000 each to her six grandchildren and legacies of $20,000 each to her six step-grandchildren. It then provides for certain of her chattels and effects to pass to her two sons, her personal chattels and effects of a domestic nature or use to her husband and the remaining personal chattels and effects to her sons. It then provides for a life interest to the defendant in her Canterbury property, subject to certain conditions, and upon the death of the defendant, the interest in the property or its proceeds passes to her two sons in equal shares. The residue of her estate to be paid to her two sons and the defendant equally between them.
Section 21B
Pursuant to s 21B of the Act, before making an order authorising the making of the proposed will, the Court must be satisfied of three matters, namely that:
(a) Mrs Gillam does not have testamentary capacity;
(b) the proposed will reflects what the intentions of Mrs Gillam would be likely to be, or what the intentions of Mrs Gillam might reasonably be expected to be, if she had testamentary capacity; and
(c) it is reasonable in all the circumstances for the Court, by order, to authorise the making of the will for Mrs Gillam.
Mrs Gillam’s testamentary capacity – s 21B(a)
For a person to have testamentary capacity, he or she must have sufficient mental capacity to comprehend the nature and effects of a will, be able to realise the extent and character of his or her estate and be able to weigh the claims that may be made on his or her estate.
The defendant accepts that Mrs Gillam no longer has testamentary capacity. Her dementia has been evident since about 2012 and is now advanced. She now lives with her son, Peter White, and his family and they have cared for her at their home since 5 November 2014. She requires constant nursing and a number of people have been engaged to assist with her nursing. The defendant visits Mrs Gillam regularly each week.
Mrs Gillam’s testamentary intentions – s 21B(b)
The second matter of which the Court must be satisfied is that the proposed will reflects what Mrs Gillam’s intentions would be likely to be, or what the intentions of Mrs Gillam might reasonably be expected to be, if Mrs Gillam had testamentary capacity.
The test is not whether the proposed will would be preferable to the result on an intestacy or to an existing will. The Court does not engage in an exercise of comparing the proposed will to what will happen if the Court declines to exercise its jurisdiction under s 21, and deciding which alternative the incapacitated person would prefer.
Mrs Gillam’s three wills assist the court in determining what her intentions would be likely to be, or what her intentions might reasonably be expected to be, if she had testamentary capacity.
The first limb of s 21B(b) focuses on what will Mrs Gillam would be likely to make, if she had testamentary capacity.
The evidence of what her testamentary intentions were when she did have capacity is contained in her three wills executed prior to her dementia becoming evident in 2012. It is not disputed that Mrs Gillam had testamentary capacity when those wills were executed by her.
These three wills establish that she did not ever leave the defendant a substantial part of her estate. Under her three wills, Mrs Gillam did not ever leave the defendant anything close to the equivalent sum he received under the financial settlement. Her 2011 will is the most generous will to the defendant. It gave him a life interest in the Canterbury property and one third of the residue of the estate. This will was made when Mrs Gillam was the owner of the Canterbury property. Some months after it was made, Mrs Gillam transferred one half of the Canterbury property to the defendant. Then, as a result of the financial settlement, the defendant became the sole proprietor of the property.
If Mrs Gillam had testamentary capacity, I am satisfied that after the financial settlement with the defendant, her intentions would likely be for her to continue to provide for the legacies to her grandchildren, step daughter and step grandchildren and to leave the residue of her estate to her two sons equally.
Under the second limb to s 21B(b), the Court may be satisfied that the proposed will reflects what the intentions of Mrs Gillam might reasonably be expected to be, if Mrs Gillam had testamentary capacity.
The second limb to s 21B(b) will be met if the Court is satisfied on the balance of probabilities that the proposed will reflects what Mrs Gillam’s intentions would be likely to be, or what her intentions might reasonably be expected to be, or that there was a fairly good chance that it reflected what her intentions might be, or that some reasonable people could think that it reflected what might be her intentions, or that some reasonable people could think that there was a fairly good chance that it reflected what might be her intentions, if she had testamentary capacity.[1]
[1]Applying the principles stated by Palmer J: Re Fenwick [2009] NSWSC 530 (12 June 2009) [150]–[153]. See also, Saunders v Pedemont [2012] VSC 574 (28 November 2012) [93] (Habersberger J); Bailey v Richardson [2015] VSC 255 (5 June 2015) [170] (McMillan J).
The nature of the second limb of s 21B(b) is that various forms of a proposed will may meet the test. In the circumstances of the financial settlement between Mrs Gillam and the defendant, I am satisfied on the balance of probabilities that the proposed will reflects what Mrs Gillam’s likely intentions might reasonably be expected to be, if she had testamentary capacity.
Reasonable in all the circumstances – s 21B(c)
The defendant’s submission concerning a failure of the plaintiff to provide evidence of all the matters set out in s 21A of the Act is not sustainable. The section provides that those matters must be before the Court ’if required by the Court’. The section provides a check list of information that is not exhaustive nor rigid. What the Court will require on an application under s 21 of the Act is a matter of discretionary assessment, as indicated by those words.
The defendant’s submission concerning an evaluation of potential Part IV claims against Mrs Gillam’s estate is also not sustainable. The cases relating to the authorisation of statutory wills establish that whilst the likelihood of a Part IV claim may be something for the Court to consider, the Court’s task in the s 21 application is different from its task in a Part IV application.[2]
[2]Saunders v Pedemont [2012] VSC 574 (28 November 2012) [114] (Habersberger J) referring to Hill v Hill [2001] VSC 83 (28 March 2001) [14] (Byrne J).
In my view, it is reasonable in all the circumstances to make orders authorising the making of the proposed will.
Conclusions
Having regard to the importance and gravity of the issues involved in this application, I am satisfied on the balance in relation to each of the three matters under s 21B of the Act. The Court’s discretionary jurisdiction under s 21(1) is therefore enlivened.
I have considered all the relevant matters in the context of the three s 21B matters. There are no further relevant considerations in this matter, and no reasons why the Court should not exercise its discretion to make orders authorising the making of the proposed will.
Orders
The following matters and order will be made:
Other Matters
A.The Court is satisfied that Murna Phoebe Gillam, the person on whose behalf a will is to be made, does not have testamentary capacity.
B.The Court is satisfied the proposed will reflects what the intentions of Murna Phoebe Gillam would be likely to be, or what her intentions might reasonably be expected to be, if she had testamentary capacity.
C.The Court is satisfied that it is reasonable in all the circumstances to make an order authorising the making of the proposed will for Murna Phoebe Gillam.
The Court Orders That:
1.The Court authorises the making of a will, in the terms of the draft will annexed to this order, on behalf of Murna Phoebe Gillam, she being a person who does not have testamentary capacity.
2.The said will be signed by the Registrar of Probates and sealed with the seal of the Court.
3.The executed will be deposited with the Registrar of Probates pursuant to s 5A of the Administration and Probate Act 1958.
4.Costs be reserved.
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