Re Maddock; Bailey v Maddock
[2022] VSC 346
•21 June 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2020 24528
IN THE MATTER of the estate of NORMAN WILLIAM MADDOCK, deceased
APPLICATION BY:
| MARCIA BAILEY | Plaintiff |
| -and- | |
| SHIRLEY TAYLOR MADDOCK (by her administrator AUSTRALIAN UNITY TRUSTEES LIMITED) | Defendant |
---
JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 15 March 2022 |
DATE OF JUDGMENT: | 21 June 2022 |
CASE MAY BE CITED AS: | Re Maddock; Bailey v Maddock |
MEDIUM NEUTRAL CITATION: | [2022] VSC 346 |
---
PROBATE – Whether deceased lacked testamentary capacity – Whether deceased understood the extent of the property of which he was disposing – Whether the deceased was able to comprehend and appreciate the claims to which he ought to give effect – Whether the medical evidence was sufficient to demonstrate that the deceased had testamentary capacity – Application dismissed – Banks v Goodfellow (1870) LR 5 QB 549.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Smith | Maurice Blackburn |
| For the Defendant | Ms A Bartfeld | KCL Law |
HER HONOUR:
Introduction
Norman William Maddock (‘the deceased’) died on 17 June 2020. The deceased was survived by his wife, Shirley Taylor Maddock (‘the defendant’) and two children: his son, Norman William Maddock, and step-daughter, Nellie Thelma O’Connor-Gunn.
The deceased first married in 1944. In 1955 the deceased purchased a property in Bentleigh East in which he commenced cohabitating with the defendant. They married in 1975.
Since 2013 the defendant suffered from dementia. Since 28 August 2018 she resided in an aged care facility, known as Warrawee Community (’Warrawee’). She died on 30 May 2022, aged 93 years.[1] Prior to her death, the defendant was represented by her administrator, Australian Unity Trustees Limited.
[1]The Court was notified of the defendant’s death on 31 May 2022, which had occurred the day prior.
After the defendant moved to Warrawee the deceased continued living in the Bentleigh East property until 1 October 2019, when he was admitted to Warrawee. He remained there until his death, aged 97 years.
Deceased’s recent wills
Anthony Naughton is a solicitor at Morley Naughton Pearn & Cook. He was admitted to practice in 1982 and practises in the area of wills and estates. In the 15 month period between October 2018 and January 2020, when the deceased was aged 95 or 96 years, Mr Naughton took instructions from the deceased, prepared and witnessed three wills, prepared and witnessed an enduring power of attorney and advised him in relation to an inter vivos transfer of the Bentleigh East property to Marcia Bailey (‘the plaintiff’).
The 2018 will
The deceased’s antepenultimate will was made on 24 October 2018 (‘the 2018 will’). Pursuant to the 2018 will, the deceased appointed his friends, Geoff Dixon, Jennifer Greenland and the plaintiff, as his executors. He left $25,000 to each of his executors, $180,000 to various charities, $600,000 to the defendant and the residue in the percentages of 20 per cent to his son, 20 per cent to his step daughter and 60 per cent to the Royal Children’s Hospital. The 2018 will was witnessed by Mr Naughton and his assistant.
The 2019 will
The deceased’s penultimate will was made on 10 October 2019 (‘the 2019 will’). In that will, the deceased made the following changes to the 2018 will: he appointed the plaintiff as his sole executor, bequeathed $75,000 to the plaintiff and reduced the legacy to the defendant from $600,000 to $300,000. The 2019 will was witnessed by Mr Naughton and the plaintiff.
The 2020 will
The deceased’s last will was made on 14 January 2020 (‘the 2020 will’). The 2020 will is in identical terms to the 2019 will, save that the Bentleigh East property is devised to the plaintiff and a new clause is added stating that the defendant has ‘advanced dementia and has very ample and sufficient monies for her needs’. The 2020 will was witnessed by Mr Naughton and the plaintiff’s partner, it would seem in the presence of the plaintiff.
Other proceedings commenced or foreshadowed by the defendant and the children
By writ filed on 17 December 2020 in proceeding S ECI 2020 04648 the defendant sought a declaration that the Bentleigh East property was held on trust for her benefit. The defendant also foreshadowed an application for further provision from the estate of the deceased, pursuant to Part IV of the Administration and Probate Act 1958 (Vic).
The children foreshadowed proceedings to seek a declaration that the deceased held assets registered in his name on trust for them, as well as applications pursuant to Part IV of the Administration and Probate Act 1958 (Vic).
Plaintiff’s application
By originating motion filed 30 July 2020, the plaintiff sought a grant of probate of the 2020 will.
The inventory of assets and liabilities disclosed an estate valued at $3,590,921 with the values of the Bentleigh East property being $1,000,000 and a holiday property in Rosebud being $350,000.[2]
[2]As at August 2021, the estate was estimated to have increased by approximately $660,000 said to be as a result of an increase in the value of the real property in the estate, with the major increase occurring with the Bentleigh East property.
Defendant’s objections to grant
On 14 July 2020 the defendant filed a caveat against the grant of probate of the 2020 will. By grounds of objection filed 1 September 2020 the defendant alleged that the deceased lacked testamentary capacity during the period shortly before or at the time of execution of the 2020 will and that the will was made in suspicious circumstances. Concerns were raised about the lack of contemporaneous medical reports that would confirm the deceased had testamentary capacity and there being no evidence of the steps taken by Mr Naughton to confirm the deceased had testamentary capacity at the time of making the will.
Deceased’s testamentary capacity
On 3 August 2020 the Registrar of Probates informed the then plaintiff’s solicitors, Morley Naughton Pearn & Cook, that medical evidence from the deceased’s treating medical practitioner should be filed to establish the deceased’s testamentary capacity at the time the will was executed, noting that the death certificate indicated that the deceased was diagnosed with ‘cerebrovascular disease 18 years’ yet the will had been executed only five months prior.
Plaintiff’s medical evidence
In response to the Registrar’s request, the plaintiff’s solicitors filed an affidavit sworn 17 August 2020 by the deceased’s treating general practitioner, Dr Andrew Batty, who works at the East Bentleigh Medical Group. Dr Batty deposed that he was the treating doctor for the deceased for approximately two years and managed his medical affairs during that time. He deposed that he had a consultation with the deceased on 30 December 2019. On that occasion, he considered the deceased was sufficiently in possession of his faculties to be able to make a testamentary decision and it appeared to him that the deceased was not confused or sufficiently affected by any degenerative mental condition to adversely affect his capacity to complete his will.
Dr Batty deposed that on 4 February 2020 he also attended on the deceased ‘to further assess his testamentary capacity’. On that occasion he performed a mini mental state examination on the deceased, although the deceased’s vision precluded him from completing the assessment. The deceased scored 24 out of 28 on the test. Dr Batty’s view was that a score of 24 out of 30 would indicate mild cognitive impairment. He noted that a score of 25 or 26 would indicate no significant cognitive impairment. Dr Batty concluded at the end of the test that the deceased had a good knowledge of his assets and to whom he would like to leave them, noting that the deceased specifically stated that he did not wish to leave anything to his children. Dr Batty exhibited his letter dated 4 February 2020 as a record of his attendance upon the deceased that day. Dr Batty deposed that he believed the deceased had capacity to make a will and oversee the management of his financial affairs at the time he saw the deceased before he executed his will on 14 January 2020 and at the time he conducted a cognitive test on him on 4 February 2020.
Defendant’s expert medical evidence
On 8 April 2021 the defendant filed an affidavit of Dr Karen Bird, neuropsychologist, that exhibited her report having considered the contents of the deceased’s medical files and will files, including hospital notes and medical assessments.
Dr Bird deposed that the deceased’s medical file from East Bentleigh Medical Group from 2010 onwards indicated the deceased had a long history of multiple heath conditions. At the time of making the 2020 will, the medical records show that the deceased suffered from poor health due to multiple longstanding health complications, which included type 2 diabetes mellitus, atrial fibrillation, ischaemic heart disease, osteoarthritis, gastroesophageal reflux disease, chronic renal failure, congestive heart failure and a recent stroke. The medical notes indicate that the deceased suffered from paranoid ideation, cognitive difficulties and low mood in October and November 2018.[3]
[3]The plaintiff was the informant on the deceased’s death certificate, which records the deceased’s health issues as: aspiration pneumonia (5 days), cerebrovascular accident (40 days), congestive cardiac failure (7 years), cerebrovascular disease (18 years), chronic kidney disease (20 years), type 2 diabetes mellitus (23 years), and hypertension (38 years).
Of particular relevance is Dr Bird’s detailed history of the deceased’s health from January 2019 onwards. In January 2019 the deceased became aggressive and accused his neighbours of stealing from him. An incident occurred on 25 January 2019 where the deceased made threats to harm the neighbours while he was in possession of a large knife. Subsequently he was diagnosed with psychotic disorder which, as a result of his debility and high falls risk, could not be treated with medication. The deceased’s mood difficulties continued and he had multiple falls. A comprehensive mental state examination on 31 January 2019 revealed that the deceased was alert and well oriented, having received a score of 26 out of 30 on the test, however, it also revealed he had limited insight into his care needs and poor judgment. He was diagnosed with a psychotic disorder and aged care placement was recommended.
On 20 September 2019 the deceased was admitted to hospital after having had multiple falls. He was subsequently discharged to Warrawee on 1 October 2019. His medical notes record declines in the deceased’s physical health and prominent symptoms of depression.
On 19 October 2019 he was assessed as having a high level of cognitive difficulties. On 20 October 2019 his mood was assessed as ‘sad, short tempered, agitated and moody’. In November 2019 he was noted as being unsteady in his gait and angry with staff regarding falls prevention strategies, having increased confusion and problems in following instructions, and lacking in insight into his difficulties. Between 21 and 27 November 2019 the deceased was in hospital with a chest infection and on discharge continued to experience ongoing debility. On 5 December 2019 Dr Batty recorded that the deceased ‘lacked insight as to his abilities’ and notes by staff at Warrawee showed that at times he was confused.
At 13 December 2019 Dr Batty diagnosed the deceased with post-traumatic stress disorder and neuro circulatory instability, amongst other ailments. He required regular assistance as a result of his mobility problems, incontinence and toileting issues.
On 14 December 2019 the deceased was admitted to hospital with a stroke causing left sided facial droop, left sided upper arm weakness, slurred speech and delirium. On 16 December 2019 he underwent a period of rehabilitation and treatment for pneumonia and then returned to Warrawee on 27 December 2019. Warrawee staff notes indicate that in the following days he had episodes of confusion, a number of falls and was unable to walk without supervision or transfer from his bed to a chair without assistance. Between 27 December 2019 and 10 January 2020 he expressed a wish to die on multiple occasions.
Warrawee staff notes described the deceased as happy and bright on 10 January 2020 and settled and thankful to staff on 13 January 2020. No notes were made as to the deceased’s mental or behavioural function on 14 January 2020.
On 15 January 2020 Warrawee staff notes indicated that Mr Maddock ‘may benefit from a visit from the psychologist’ and that his general practitioner had been asked to consider a mental health plan. The deceased expressed interest in being involved in activities, and records indicate that he subsequently engaged in group activities over the following days. In the Warrawee records of 17 January 2020, Dr Batty noted ‘mood ok today; has found it difficult to adjust to new environment’. On 20 January 2020 Dr Batty again attended on the deceased, with file notes indicating that Mr Maddock’s mood ‘seems OK’.
On 24 January 2020, the deceased was assessed according to the Cognitive Impairment Scale of the Psychogeriatric Assessment Scale by a registered nurse at Warrawee. The nurse recorded a score of 11. Dr Bird considered this score represents a very high level of cognitive impairment, with approximately 98 per cent of people aged over 70 scoring lower than 11.[4]
[4]Anthony Jorm and Andrew Mackinnon, Psychogeriatric Assessment Scales User Guide (4th ed, December 2016) available at: < type="1">
Between 25 January 2020 and 3 February 2020, the deceased continued to express a wish to die while at the same time expressing gratitude and appreciation for care of staff. On 29 January 2020, it was recorded that the deceased attended activities in the morning, but in the afternoon he was noted to have depression and low mood, that he was crying and feeling helpless.
Warrawee staff notes of 31 January 2020 indicated that the deceased was ‘pleasant and appropriate on all interactions’. On that date Dr Batty noted that he had been asked to review the deceased regarding his mental health. Dr Batty noted, ‘he is somewhat depressed re his physical status and the need to come into care; I am checking with DVA as to whether he is eligible for psychology services now he is in high care; try changing amitriptyline to mirtazapine for his mood-depression’.
On the morning of 4 February 2020, the deceased was described in Warrawee staff notes as being in a ‘negative’ mood and being verbally aggressive and abusive towards staff. Dr Batty examined the deceased for testamentary capacity on 4 February, making a record in his practice file notes in the afternoon.
On 8 February 2020, the Warrawee staff notes indicated that the deceased was saying that he wanted to die and that his presentation ‘fluctuates from cheerful and laughing to sad and upset about everything’. Warrawee staff notes of 9 February 2020 indicate that the deceased was refusing breakfast and all medication, saying he wanted to die and ‘wants normal food’.
On 13 February 2020, the Warrawee staff notes indicate that, contrary to a prior speech pathology recommendation made on 17 January 2020, the deceased had requested a normal consistency diet, which was reportedly approved by Dr Batty via telephone. Dr Batty was recorded as stating that ‘[the deceased] has an understanding of what is going on and his cognition level is such that he can understand information given to him regarding the risk of not following the recommended diet. [The deceased] can make an informed decision regarding this change’.
On 14 February 2020 Dr Batty completed a comprehensive medical assessment in which he noted that the deceased had, amongst other conditions, a principal diagnosis of cognitive impairment (2018), and noted his mood to be ‘variable’ and cognition to be ’sl [sic] impaired’.
Dr Bird summarised her opinion of the testamentary capacity of the deceased at the time of writing her report as follows:
[The deceased] was aged 97 at the time of making his Will on 14 January 2020. He required aged residential care due to impaired cognitive function, severely restricted motor function and physical debility. He had ongoing issues with depression and a documented history of paranoid delusions. He was separated from his wife due to her dementia and from his children due to his beliefs about their character.
File notes of assessments by his solicitor, Mr Naughton, and his GP, Dr Batty, regarding [the deceased’s] testamentary capacity failed to adequately address his knowledge of the nature and extent of his estate, his understanding of his obligation to provide for his wife, and his reasoning about his intended distribution of his estate. They did not adequately account for his fluctuating depression, his reduced cognitive abilities, his reduced functional abilities, or the possibility of underlying delusional beliefs driving his decisions. The potential for undue influence was not examined. Although specialist cognitive assessment was recommended by Dr Batty, no record of such examination was provided.
At the time of making [the 2020 will], it is very likely [the deceased] did not have testamentary capacity due to memory and executive function deficits, and a potentially high level of vulnerability to undue influence.
Further steps taken in the proceeding
On 27 July 2021 the plaintiff and the defendant attended an informal mediation that resolved, subject to the approval of the Court and agreement of the residuary beneficiaries. On 13 August 2021 the defendant and the residuary beneficiaries including the Royal Children’s Hospital attended a private mediation.
On 8 September 2021 the plaintiff and the defendant signed conditional terms of settlement, subject to the approval of the Court, pursuant to r 15.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). In seeking such approval, the defendant sought that the Court should adopt one of two possible approaches: the first approach was described as the global approach and the second was described as the two stage approach, with the defendant’s preference being the global approach. This approach sought the Court’s approval for both the procedural and substantive effect of the terms of settlement, with the steps necessary to obtain the grant of representation together with the consequential administration of the estate being considered simultaneously. The two stage approach was that approval be sought for the steps to be taken in obtaining a grant of representation and then for a further application to be made for approval of the agreement as to the distribution of the estate.
By email dated 6 October 2021 the Court informed the defendant’s solicitors that approval of the compromise could not occur until a grant of probate had been obtained and that once a grant had been obtained, the defendant should immediately file a summons for approval of the compromise in the probate proceeding and in the related trust proceeding. This was needed to be supported with an affidavit in order for the Court to consider the application of approval in the usual manner.
By email dated 27 October 2021 the solicitor for the defendant informed the Court that the plaintiff would authorise Australian Unity Trustees Limited to seek a grant of probate of ‘the will’. On 12 November 2021 Australian Unity Trustees Ltd filed a new application on behalf of the defendant (being proceeding S PRB 2021 19648) to obtain a grant of probate of the will dated 14 January 2020. This was the same will they had lodged a caveat against on 14 July 2020 in S PRB 2020 24528 on the grounds that the deceased lacked testamentary capacity and due to suspicious circumstances. This caveat was still extant at the time.
In accordance with this, the Court considered the application for a grant of probate of the 2020 will. On 16 November 2021 the Court informed the parties by email that there was insufficient evidence as to the testamentary capacity of the deceased at the date of the 2020 will. The Court required contemporaneous medical evidence to be filed along with an affidavit from Mr Naughton as to the steps he took to confirm that the deceased had testamentary capacity at the time of making the 2020 will. Following this email, on 23 December 2021 Australian Unity Trustees Limited filed a notice of discontinuance in proceeding S PRB 2021 19648.
Notwithstanding the requirement that the plaintiff provide contemporaneous medical evidence of the testamentary capacity of the deceased at the date of the 2020 will, the plaintiff did not file any further medical evidence.
Evidence of the deceased’s solicitor
On 15 March 2022 the plaintiff tendered a witness statement by Mr Naughton.
Mr Naughton described the deceased as a serial will-maker in his later life, often revising his will and making new wills. Mr Naughton’s general recollection of his conferences with the deceased was that he gave Mr Naughton a copy of his most recent will and instructed him on the required amendments. Mr Naughton was aware that before he acted for the deceased, at least four other solicitors in the area where he practiced had made wills for the deceased.
Mr Naughton was familiar with the deceased’s background. He described the deceased as a difficult and troubled man, having served in the war and been a prisoner of war in Crete before managing to escape. Mr Naughton described the deceased as a very tenacious person who became angry if he did not get his own way. When that happened he would shout and bang his fist on the desk to make his point. On many occasions the deceased told Mr Naughton how disappointed he was with his son and step-daughter and basically said that he hated them. Mr Naughton was also aware that the deceased engaged solicitors to set aside VCAT orders made on 2 February 2018 appointing an administrator to manage the deceased’s affairs.
As well as preparing the deceased’s last three wills, Mr Naughton also prepared a power of attorney for the deceased appointing the plaintiff as his power of attorney and took instructions from and advised him on an inter vivos transfer of his Bentleigh East property to the plaintiff.
When the deceased instructed Mr Naughton to prepare the 2018 will, he informed Mr Naughton that the defendant’s health was declining but she insisted that she did not want to go into aged care.[5] The deceased wanted to abide her wishes and make sure that she had sufficient funds to pay for an aged care facility bond and her maintenance. Mr Naughton suggested to the deceased that rather than the defendant having a life interest in his estate, she should receive sufficient funds for a bond and living expenses. After discussion, the amount of $600,000 was considered to be sufficient by the deceased and Mr Naughton. The deceased also discussed removing his children as beneficiaries of his estate. After discussion with Mr Naughton the deceased accepted that the children should remain as beneficiaries, but expressed that their percentage amount was to be reduced to the minimum amount. An amount of 20 per cent of the residue of the estate was subsequently decided upon for each child.
[5]Mr Naughton did not provide a date for when he took instructions for the 2018 will. The defendant moved to Warrawee on 28 August 2018 so it is assumed that instructions were given prior to that date. The 2018 will was not signed by the deceased until 24 October 2018.
The deceased gave instructions to Mr Naughton for the 2019 will in or around October 2019, approximately one year after the 2018 will. At the time he gave instructions, the deceased was living at his Bentleigh East home but was about to be admitted to Warrawee.[6] The deceased told Mr Naughton that the defendant now had an administrator managing her affairs and he had been in negotiations with the administrator to pay a certain amount for her care, as all their assets were in his name. Mr Naughton was not told the amount paid for the bond but considered that it would have been approximately $500,000. On the basis that the defendant’s aged care fees had been paid and a sum paid to her administrator, the deceased instructed Mr Naughton to reduce the legacy of $600,000 to the defendant to $300,000. The deceased’s view was that amount was more than adequate to cover her needs as she had late stage dementia, and was unlikely to leave Warrawee or have any substantial financial needs. From his relationship with the deceased, Mr Naughton knew that the deceased’s assets comprised his two real properties, shares and term deposits. The deceased told Mr Naughton that his estate was worth $6 million. On 1 October 2019, shortly after giving those instructions, the deceased moved to live at Warrawee. The deceased signed the 2019 will on 10 October 2019 in the presence of Mr Naughton and the plaintiff and they witnessed the deceased’s signature.
[6]As the deceased moved to Warrawee on 1 October 2019, it is likely that Mr Naughton received instructions for the 2019 will before 1 October 2019.
Mr Naughton stated that a few days later the deceased instructed him, he believes by telephone, to draw a power of attorney appointing the plaintiff as his power of attorney. Mr Naughton understood that the deceased needed a power of attorney as a prerequisite to his staying permanently at Warrawee. Mr Naughton stated that previously he had often asked the deceased if he could prepare a power of attorney for him, but the deceased continually refused due to his mistrust in handing over any sort of authority to other people.
Mr Naughton attended at Warrawee when the power of attorney was signed by the deceased and the plaintiff. Mr Naughton stated that this was the first time Mr Naughton met the plaintiff. Mr Naughton explained the power of attorney to the deceased, who then indicated to Mr Naughton that it accorded with his wishes and the deceased signed the document. The plaintiff signed her acceptance of the power and Mr Naughton witnessed their signatures. As the power of attorney is dated 10 October 2019 it would appear that it was signed at the same time that the 2019 will was signed, hence, the first time Mr Naughton met the plaintiff also corresponded with the signing of the 2019 will.
Mr Naughton stated that on or about 10 December 2019, the deceased telephoned him stating that he wished to give his Bentleigh East property to the plaintiff. Mr Naughton advised him that he needed the Certificate of Title, the rates notice and a valuation of the property. He also told the deceased that as it was a gift during his lifetime, the deceased must pay stamp duty of over $65,000. The deceased immediately responded that the plaintiff would have to pay for the stamp duty. Mr Naughton told the deceased that such a gift was serious. The deceased told Mr Naughton that he did not want his children to get the Bentleigh East property and he wanted to look after the plaintiff. Mr Naughton told the deceased that he would send him a letter of advice on the issue. Mr Naughton annexed a brief diary note of the call to his witness statement. Mr Naughton’s brief file note of his telephone discussion with the deceased is undated.
On 14 December 2019 Mr Naughton sent a letter to the deceased. This was annexed to his witness statement. Although not referred to in his witness statement, Mr Naughton’s letter refers to the deceased’s instructions and two telephone conversations with the deceased. The letter also includes a reference to the plaintiff having taken the original Certificate of Title for the Bentleigh East property to Mr Naughton and that the plaintiff had stated to him that she would pay the stamp duty of approximately $70,000. In his letter to the deceased Mr Naughton stated that he had some concern about the transaction and it would be a requirement that the deceased obtain a letter from his general practitioner or gerontologist that he had the mental capacity to make the decision to give the family home to a friend. Mr Naughton also noted that the deceased could predecease the defendant and there would be litigation by the defendant and the children ‘to dispute the will’ and a letter from a doctor would be crucial to defend any litigation. Mr Naughton reiterated that the transfer was a very serious transaction and that Mr Naughton needed to be sure that the deceased ‘can make this decision and acknowledge our advice’.
After the date of this letter, Mr Naughton’s office closed for the year-end holidays and it re-opened on about 7 January 2020.
On 7 January 2020 Mr Naughton received a telephone message at his office that the deceased was in the cafe across the road. Mr Naughton went outside to the deceased, who was with the plaintiff. The plaintiff had brought him there. The deceased spoke with Mr Naughton, with the main topic of discussion being the transfer of the Bentleigh East property to the plaintiff. The deceased told him that his son and step-daughter continued to cause him problems, despite the fact he had now been admitted to Warrawee. As it was his first day back at his office, Mr Naughton promised to commence the preparation of the transfer of land. Mr Naughton described the deceased as a demanding client with a forceful personality. The deceased wanted to know what the cost of the transfer would be and how long it would take to be finalised. Mr Naughton asked the deceased again about the deceased’s reasons for the transfer. The deceased stated that at this stage of his life he did not want his son and step-daughter to get his house and that the plaintiff was totally deserving and he felt she was like a daughter to him, with the deceased becoming emotional explaining this to Mr Naughton. Mr Naughton stated that he sensed that the deceased’s life had changed since the move to Warrawee, although he believed that the deceased’s mental faculties and determination were strong. Mr Naughton had no doubt that the deceased meant what he said and although he did not know the plaintiff, he could see they were friends. Mr Naughton stated that he did not believe there was any duress or pressure on the deceased or that his mental state had deteriorated. He felt that the deceased came to see him without an appointment to make sure that Mr Naughton would carry out his wishes. Mr Naughton promised to write a letter to the deceased acknowledging his instructions and told him he would see him in a few days in his room at Warrawee. Mr Naughton did not exhibit any notes of this conversation to his witness statement.
On 10 January 2020 Mr Naughton prepared a letter to the deceased, also dated 10 January 2020, and arranged to see him at four o’clock in the afternoon at Warrawee. The plaintiff and her partner, Bruce, were present at the meeting. Mr Naughton read the letter to the deceased, in their presence. The letter noted that the deceased had had some time to think about the transfer of the Bentleigh East property to the plaintiff and that Mr Naughton understood the deceased wished to proceed with it. The letter then set out various reasons for advising against the transfer. He also informed the deceased that the defendant had lodged caveats on the Bentleigh East property and the Rosebud property. Mr Naughton’s notes of the meeting also refer to a mix up with the plaintiff having brought the wrong title to Mr Naughton. His notes record ‘they knew’ there was a caveat on the Rosebud property as a letter about it had been received by them. Mr Naughton’s notes record that he explained it, presumably meaning the caveat. In his witness statement Mr Naughton stated that the deceased was quite upset that a caveat could stop the transfer of the Bentleigh East property to the plaintiff. Mr Naughton said he would undertake a title search of the Bentleigh East property. The deceased told Mr Naughton that if he could not do a transfer of the Bentleigh East property, he would leave it to the plaintiff in his will. Mr Naughton’s file note records ‘Norm cd redo his will’ and his belief that the deceased’s mental capacity ‘is OK’.
The 2020 will
Mr Naughton’s evidence concerning the 2020 will is set out in his witness statement in his own words as follows:
Taking will instructions
48. Norman called me on 13 January 2020 and said he urgently wanted a new Will. I told him that there was a caveat on his property lodged by Australian Unity on behalf of Shirley and he could not transfer the house to Marcia as he wished. He wanted everything the same except Marcia would get his home at … Bentleigh East. I asked him to again explain his reasons and tell me his assets. He said that he wanted Marcia to receive the house because she deserved it. She was like a daughter to him. He didn’t want it to go his son and step-daughter. He told me his assets were two houses, shares, term deposits with Commonwealth Bank of Australia and his Aged Care bond. I said I could prepare the Will and see him the next day at his Aged Care room. He said what would I charge him and I said about $300. He said okay to these fees; Norman would make out that my fees were high and I told him they were reasonable and fair, Norman was mentally alert. I said he must have mental capacity and get a letter from his doctor. I said ‘Is there any pressure on you to do this from Marcia?’ and he said ‘Tony of course NOT! I make my own decisions’. I advised him that Shirley and his son Norman Jnr and his step-daughter Nellie could dispute the Will and have litigation and he clearly understood that and acknowledged it. He accepted that litigation was a possibility. Norman left me with absolutely no doubt that he was his usual self and there was no duress or lack of mental capacity. I would not have proceeded with this Will if I felt that Norman was being pressured by Marcia or he was mentally incompetent or suffering from insane delusions. He simply wanted to give his treasured home to a dear friend and at the same time achieve his long-standing objective of his son Norman Jnr and step-daughter Nellie not getting the benefit of the house. It was not my business to make any judgment on my client. I knew Norman’s style and personality and I knew he was being consistent with his values and beliefs. I said 1 [sic] would see him tomorrow for signing the Will.
Mr Naughton’s diary notes of this conversation with the deceased record as follows:
T/I Mr Norm Maddock
he called me
Re: New Will
he wants new will ASAP
if he can’t transfer his place at
Brown’s Road Bentleigh East to Marcia Bailey
due to caveat, then he wants
to leave house to her in his Will.
I said this is very serious.
‘Are you absolutely sure?’
He said Yes, I am.
I want her to get my home
And Not my son & step daughter
I sd I can do this if he wants to.
I sd they may dispute Will & he sd
he doesn’t care.
I sd he should have letter from doctor.
I sd I would go to Wawaree [sic]
for signing tomorrow.
I said the legal fees about
$400 because of home visit.
I asked him to Repeat the
instructions.
He did so.
I am satisfied that he wants
to do this.
I said I would not do such a
will unless he had full proper mental
capacity and he has a good reason.
He sd Marcia Bailey is a wonderful
caring person and been a true friend for
20 years and she deserves this.
Mr Naughton’s evidence continues:
49. Following his instruction to do so I drafted the [2020] will of the Deceased which he signed on the 14th January 2020…
50. On 14 January 2021, I attend Warrawee with the 14 January 2020 final Will of the Deceased. The Will was signed at that appointment, without any change.
51. At the time I attended the appointment, as was my habit, I ascertained the assets and liabilities of the Deceased which were:
(a) His share portfolio;
(b) His real property in Browns Road. [sic] Bentleigh;
(c) His property in Rosebud;
(d) His funds in the Commonwealth Bank; and
(e) His accommodation bond at Warrawee.
52. I was very aware of the fact of this will had a very important change in it in that it left his [Bentleigh East property] to his friend Marcia. I was also very aware of the fact that Marcia was neither his wife nor his child.
53. Because of those matters I read the Will carefully to the Deceased and ascertained that each clause met with his instructions and followed his intentions. I advised him that Shirley and his son Norman Jnr and his step-daughter Nellie could dispute the Will and have litigation and he clearly understood that and acknowledged it. He accepted that litigation was a possibility.
54. I have had many years of going to Aged Care places, hospital, clients’ homes, cafes and dealing with very elderly and frail people and those nearly at the end of their lives. I do know the tests for mental capacity and have had situations where clients cannot make Wills due to incapacity. I was aware of my legal duties and responsibilities. I was very pleased that Norman was alert and in a good mood. He could talk coherently.
55. Norman could have a conversation. He could look at me and understand aid [sic] acknowledge the questions I had. If I had sensed incapacity or duress by Marcia, I would not have allowed the Will to be signed.
56. When I arrived, Marcia was present in the room with the Deceased. Marcia was present when I read through the Will and asked the Deceased if it accorded with his intention. The Deceased replied ‘yes’ or words to that effect. I then said we needed another witness and Marcia left the room to find one. She came back a short while later and said the staff were not allowed to be a witness as it was against company policy.
57. Bruce Todman (‘Bruce’), Marcia’s partner then arrived. I understand that he regularly or almost daily visited the Deceased and this was in the course of a normal visit to the Deceased.
58. After Bruce arrived, he agreed to be the second witness, after which the Deceased signed the Will in my presence and then we each signed as witnesses, me going first.
59. Following the meeting that the Will was executed, I went home and made s [sic] file note of what occurred. I did this to make sure that I had a proper record of what occurred at the Will signing appointment.
Mr Naughton annexed a copy of the signed 2020 will and his file note dated 14 January 2020 to his witness statement, with the file note reading as follows:
TN attended at Warrawee
Community Aged Care. 4pm
Norm was alert and
pleased to see me.
I had will prepared and
covering letter.
I asked him to tell me what
he wanted again. He sd he wanted
to leave [the Bentleigh East property]
to his friend Marcia
Bailey. He sd this three times.
He had told me he wanted to
transfer it to Marcia in December 2019
and I knew his wishes. But
that can’t be done due to
caveat and I had reservations.
He said he didn’t want
his son Norman and step
daughter to receive this. And
he cares about his wife Shirley
but she doesn’t need it.
She has dementia He likes
Marcia very much, like a
daughter, she is very good to
him and cares for him and
he trusts her and she is going
through Divorce and she would
live there and keep the house.
He said all this to me.
I had conversation with Norm.
I said he has good mental capacity
to make this will.
By letter dated 17 January 2020 to the deceased, Mr Naughton enclosed a copy of the 2020 will as signed and suggested that the deceased see a geriatrician to ensure that there was a record of his capacity. Mr Naughton stated that he was aware that the deceased saw Dr Batty for the purpose of obtaining a medical report, referring to Dr Batty’s report dated 4 February 2020.
Applicable principles
The primary function of the Court in exercising its probate jurisdiction is to make grants of probate or grants of letters of administration. The Court has the power to determine a deceased’s valid testamentary dispositions.[7] It will not make a grant on the basis that the parties have agreed on such a course.[8] All of the evidence before the Court must be considered so that it can be satisfied of fulfilling the purpose of the probate jurisdiction of ‘ensuring that the testamentary intentions of a deceased person are carried out and the beneficiaries receive what is due to them’.[9]
[7]Goods of Watts (1837) 1 Curt 594, 595, 163 ER 208; Will of Podger [1957] VR 275, 278 (O’Bryan J); Dowling v St Vincent De Paul Society of Victoria Inc [2003] VSC 454, [31] (Nettle J); Robinson v Jones (No 3) [2015] VSC 508, [29].
[8]Goods of Watts (n 9) 595; Will of Podger (n 9) 278; Re Grey Smith [1978] VR 596, 601 (Murphy J); Re Irving [2003] VSC 351, [23] (Kellam J).
[9]Re Przychodski [2016] VSC 781, [15].
Where a will is rational on its face and duly executed, there is a presumption that the deceased had testamentary capacity.[10] Where there are circumstances that raise a suspicion that the deceased lacked testamentary capacity, the force of the presumption is reduced. A propounder of a will must satisfy the Court on the balance of probabilities that the relevant will is valid,[11] that is, it must be proved that the testator had ‘testamentary capacity and knew and approved the contents of the will at the time of its execution’.[12]
[10]Gornall v Masen (1887) 12 PD 142 (Butt J); Palin v Ponting [1930] P 185, 188 (Bateson J).
[11]Re Tang (2017) 52 VR 786, 807 [85] (Kyrou and McLeish JJA); Giarrusso v Veca [2015] VSCA 214, [27] (Garde AJA, with whom Beach JA agreed).
[12]Veall v Veall (2015) 46 VR 123, 173 [166] (Santamaria JA, with whom Beach and Kyrou JJA agreed).
The test for determining whether a testator had power to make a will was set out in Banks v Goodfellow by Cockburn CJ as follows:[13]
It is essential to the exercise of [a testamentary] 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.
[13](1870) LR 5 QB 549, 565.
Testamentary capacity of a testator is assessed regarding the particular will being propounded. While the test of capacity is the same, the application of the test will vary according to the complexity and the officiousness or inofficiousness of the will.[14]
[14]Gray v Hart [2012] NSWSC 1435, [346] (White J).
In Manning v Hughes; Estate of Ludewig,[15] White J referred to the practical application of the test in Banks v Goodfellow in situations where a testator’s capacity might later be questioned, summarised in Hutley’s Australian Wills Precedents as follows:[16]
Where the solicitor is drafting a will and there is any possibility that the testator’s capacity might later be questioned, the solicitor should ask questions the answers to which will establish whether or not each of the requirements for capacity laid down in Banks v Goodfellow is satisfied. It follows that the solicitor taking instructions for a will must have the Banks v Goodfellow tests at the front of her or his mind.
[15][2010] NSWSC 226, [47].
[16]Charles Rowland, Hutley’s Australian Wills Precedents (LexisNexis Butterworths, 7th ed, 2009) [1.14].
A solicitor taking instructions for a will has a duty to ensure that the person giving instructions has testamentary capacity and is giving the instructions freely and voluntarily.[17] In carrying out that duty solicitors must take reasonable steps to satisfy themselves that testators have testamentary capacity at the relevant time.
[17]Petrovski v Nasev; Estate of Janakievska [2011] NSWSC 1275 (Hallam J).
Where a testator is elderly, it is generally considered prudent that a medical opinion be obtained as to the testator’s medical condition and whether any such conditions may affect the testamentary capacity of a testator.[18]
[18]See, for example, Fradgley v Pocklington (No 2) [2011] QSC 355, [28] (Mullins J).
In considering testamentary capacity the Court may request evidence as to the steps taken by a solicitor to confirm that a deceased person had testamentary capacity. The weight to be given to a solicitor’s evidence will depend on his or her experience, training, and understanding of the test of testamentary capacity; his or her ability to make an assessment of capacity taken with the quality of the assessment made, as appears from any contemporaneous notes and records; his or her knowledge of and familiarity with the will-maker, including the age and state of health of the will-maker; his or her independence; the will-maker’s presentation to the solicitor; and whether there are any ‘red flags’ suggesting a possible challenge to capacity. It will also depend on ‘the level of enquiry and discussion on the part of the lawyer of and with the deceased’.[19]
[19]Loosley v Powell [2018] 2 NZLR 618, 632 [51] (Asher J).
The issue before the Court is to determine whether the deceased had testamentary capacity when he executed the 2020 will. The focus of the Court’s inquiry is whether the deceased suffered from any medical or health issues that affected his testamentary capacity to make the 2020 will and the circumstances that produced the 2020 will.
Consideration
Evidence of Dr Batty
The plaintiff did not file any further contemporaneous medical evidence of the deceased’s testamentary capacity as at the date of signing the 2020 will. Dr Batty’s conclusions as to the deceased’s testamentary capacity rely on his consultation with the deceased on 30 December 2019 and his attendance on the deceased on 4 February 2020. Notably, Dr Batty did not attend on the deceased on 13 January 2020, the day the deceased gave instructions by telephone to Mr Naughton for the 2020 will. This is despite Mr Naughton telling the deceased in their telephone conversation on 13 January 2020 when the deceased provided instructions for the 2020 will that he ‘must have mental capacity and get a letter from his doctor’.
Dr Batty deposed that from his consultation with the deceased on 30 December 2019, he concluded that the deceased was sufficiently in possession of his faculties to be able to make a testamentary decision and it appeared to him that the deceased was not confused or sufficiently affected by any degenerative mental condition in order to adversely affect his capacity to complete his will.
In coming to this conclusion Dr Batty did not address the test for testamentary capacity, nor did he explain how the consultation on 30 December 2019 allowed him to conclude that the deceased had testamentary capacity on 14 January 2020. Further, Dr Batty did not appear to consider how the deceased’s recent medical history may have impacted his testamentary capacity. Dr Batty’s consultation with the deceased on 30 December 2019 took place approximately two weeks after the deceased’s stroke on 14 December 2019, after which he was admitted to hospital, before undertaking a period of rehabilitation as well as treatment for pneumonia. When the deceased returned to Warrawee on 27 December 2019, he had a number of falls and was unable to walk or transfer from his bed to a chair without support.
There is no reference in the Warrawee staff notes to suggest that the deceased attended a consultation with Dr Batty on 30 December 2019.
Dr Batty did not attend on the deceased on 14 January 2020, being the date at which the deceased signed the 2020 will. The Warrawee staff notes between 10 and 15 January 2020 described the deceased as happy and bright on 10 January and settled and thankful to staff on 13 January. The Warrawee staff notes do not mention anything concerning the deceased’s mental or behavioural function on 14 January 2020.
They do record that Dr Batty attended on the deceased on 20 January 2020 with his notes indicating that the deceased’s mood ‘seems OK’. As at this date, the deceased had been told by Mr Naughton on 13 January 2020 that he should get a letter from his doctor regarding his mental capacity, and he also should have received Mr Naughton’s letter dated 17 January 2020 advising him to see a geriatrician so that the deceased had a record of his capacity.
On 24 January 2020 the Warrawee staff notes record that the deceased completed a cognitive impairment test conducted by a registered nurse at Warrawee. He achieved a score of 11, which according to Dr Bird represents a very high level of cognitive impairment. Between 25 January 2020 and 3 February 2020 the deceased’s moods varied, with depression being mentioned in the Warrawee staff notes.
On 31 January 2020 the Warrawee staff notes record that Dr Batty had been asked to review the deceased regarding his mental health. The Warrawee staff notes record that on 4 February 2020 the deceased was in a ‘negative’ mood, being verbally aggressive and abusive towards staff and that Dr Batty examined the deceased for testamentary capacity.
From his examination Dr Batty concluded that the deceased’s mini mental state examination indicated mild cognitive impairment, that the deceased had a good knowledge of his assets and to whom he would like to leave them and that he did not wish to leave anything to his children. Dr Batty deposed that he believed that the deceased had capacity to make a will and oversee the management of his financial affairs when he saw the deceased ‘before he executed‘ the 2020 will and at the time he conducted the cognitive test on the deceased on 4 February 2020.
Dr Batty’s conclusions fail to consider all matters relevant to the test for testamentary capacity. Some information is provided, such as that the deceased had a good knowledge of his assets and to whom he would like to leave them, but he fails to address the reasons for those conclusions. Dr Batty does not provide any basis for his conclusion that the deceased had a good knowledge of his assets. Dr Batty’s statement that the deceased did not wish to leave anything to his children is contrary to the deceased’s most recent statement to Mr Naughton that he did not want his children to get the benefit of the Bentleigh East property, and also contrary to the children’s provision in each of the three wills, as they were to receive 20 per cent of the residue of his estate under each of these wills.
Dr Batty’s report does not address whether the deceased comprehended the effect of the significant change in the distribution of his estate made by the 2020 will, that is, by devising the Bentleigh East property to the plaintiff, the residue of the estate was effectively reduced by $1 million. It is also not clear from the report whether the deceased comprehended and appreciated the claims to which he ought to give effect in relation to the defendant and his children.
As the deceased’s treating doctor in the period that each of the 2018 will, the 2019 will and the 2020 will were made, Dr Batty would or should have been aware of the deceased’s significant health issues, including bouts of depression, history of paranoid delusions and reduced cognitive abilities. He makes no reference to the cognitive impairment test undertaken by staff at Warrawee on 24 January 2020, the results of which suggested that the deceased had a very high level of cognitive impairment, or to his other long standing health and capacity issues.
Due to a number of limitations, the affidavit as to testamentary capacity from Dr Batty on its own is insufficient to satisfy the Court that the deceased had testamentary capacity at the time of signing the 2020 will. It was on this basis that the Court requested contemporaneous medical evidence.
Evidence of Mr Naughton
Mr Naughton was satisfied that the deceased had testamentary capacity on 13 January 2020 when he gave instructions to Mr Naughton for the 2020 will and on 14 January 2020 when the deceased signed the 2020 will.
Mr Naughton’s affidavit provides details of his dealings with the deceased in respect of the 2018 will, the 2019 will and the 2020 will, his enduring power of attorney and his proposed inter vivos transfer of the Bentleigh East property to the plaintiff.
Mr Naughton’s witness statement does not record any enquiries made by him of the deceased regarding the deceased’s recent medical history, nor did he appear to make any enquiries of the deceased of any recent cognitive or functional testing. Had he done so he would have known that the deceased suffered a stroke some weeks before making the 2020 will. Had he made enquiries of the deceased after the 2020 will was signed but before Dr Batty’s attendance on the deceased on 4 February 2020, he might have found out the results of the deceased’s cognitive assessment on 24 January 2020 at Warrawee, which suggested he suffered from a very high level of cognitive impairment.
Mr Naughton was aware that the deceased was a demanding client with a forceful personality, who would become angry if he did not get his own way. Given that Mr Naughton was aware of the deceased’s advanced age, the involvement of the plaintiff in witnessing the 2019 will, her involvement in the proposed inter vivos transfer and the significant changes made by the 2020 will, he ought to have been alert to satisfy himself by reference to the relevant test so that he could attest to the testamentary capacity of the deceased in respect of the 2020 will.
Given the risk that the deceased’s testamentary capacity would later be questioned, which seems to have been appreciated by Mr Naughton as he advised the deceased to obtain medical evidence as to his testamentary capacity, and that the defendant and their children could dispute the 2020 will, Mr Naughton should have had the test for testamentary capacity at the front of his mind, including the need to ascertain information which would have informed him as to the deceased’s capacity.
Mr Naughton was aware from taking instructions for the 2018 will that the deceased wished to exclude his children from his will and leave the defendant an amount sufficient to pay for an aged care facility bond and her maintenance. In the 2018 will this amount was $600,000, although it was subsequently reduced to $300,000 in the 2019 will. The deceased accepted Mr Naughton’s advice that the children should be included as beneficiaries in the 2018 will, which provided that they were each to receive a 20 per cent share of the residue of the estate.
Mr Naughton was first informed of the deceased’s significant change to the distribution of his assets by the deceased’s telephone call on 10 December 2019. In that call the deceased instructed Mr Naughton that he wanted the Bentleigh East property to be transferred inter vivos to the plaintiff for no consideration. As a result of these instructions, Mr Naughton sent the deceased a letter dated 14 December 2019 where he, inter alia, advised that a letter should be obtained from the deceased’s general practitioner or gerontologist that he had mental capacity to decide to give the Bentleigh East property to his friend. He noted that if the deceased predeceased the defendant, there could be litigation by the defendant and his children ‘to dispute the will’. Given that the instructions at this stage were for an inter vivos transfer, this advice is confusing, as the proposed transfer would not give rise to a dispute regarding the then extant 2019 will. At the time of the deceased’s instructions for the inter vivos transfer and the 2020 will, the deceased’s strong view was that the plaintiff deserved the Bentleigh East property and he did not want the children to get the benefit of it.
The catalyst for the 2020 will was Mr Naughton’s letter of advice to the deceased on Friday, 10 January 2020 concerning the proposed inter vivos transfer of the Bentleigh East property to the plaintiff. Having received advice that the defendant’s caveat on the title of the Bentleigh East property prevented the transfer, the deceased instructed Mr Naughton that he wanted to leave the Bentleigh East property to the plaintiff by his will. In Mr Naughton’s file note of this meeting, he recorded his belief that the deceased’s mental capacity ‘is OK’, although no specifics are set out to support this belief.
Consistent with the description of the deceased’s personality, the following business day on Monday, 13 January 2020 the deceased provided his instructions for the 2020 will in a telephone call to Mr Naughton, specifically that he wanted everything the same as in the 2019 will except that the plaintiff should get the Bentleigh East property. Mr Naughton asked the deceased to explain his reasons for the change and was told by the deceased that the plaintiff deserved the property and he did not want his children to receive it. He told Mr Naughton that he did not care if there was litigation as a result of the proposed change.
Mr Naughton stated that during the telephone call he asked the deceased what his assets were and that the deceased said his assets were his aged care bond, two houses, shares and term deposits. Mr Naughton’s file note of this call does not record whether the deceased identified his assets. There is also no mention in his affidavit or file note of whether he asked about the value of these assets or whether the values were given by the deceased. Mr Naughton only mentioned being given a value of the deceased’s assets in relation to taking instructions for the 2019 will. On that occasion, Mr Naughton stated that he knew from his relationship with the deceased that the deceased’s assets comprised his two real properties, shares and term deposits and that the deceased told him that his estate was worth $6 million. No details were mentioned as to how this value was made up. The only evidence of the value of the deceased’s assets is the inventory of assets and liabilities filed by the plaintiff. This records the value of the estate at $3,590,921 as at 21 July 2020.
When taking instructions for the 2020 will by telephone on 13 January 2020, Mr Naughton stated he was in no doubt that the deceased was his usual self and there was ‘no lack of mental capacity’ of the deceased. Mr Naughton does not set out the basis for his conclusion as to the deceased’s testamentary capacity during the telephone call. His file note of the call records that he told the deceased he would not do such a will unless the deceased had ‘full proper mental capacity and he had a good reason’. Mr Naughton told the deceased that the defendant and the children could dispute the will and the deceased acknowledged that litigation was a possibility. The only reason given by the deceased for making the 2020 will was that he wanted to leave the Bentleigh East property to the plaintiff as he liked her and he did not want his children to receive the Bentleigh East property. This contrasts with Dr Batty’s evidence that on 4 February 2020 the deceased told Dr Batty he did not wish to leave anything to his children.
When the deceased gave the instructions for the 2020 will it is not clear whether he was aware of the needs of either the defendant or his children or whether he had any knowledge of his obligations towards them.
Setting aside what was said by Mr Naughton in his witness statement and his file note of the deceased’s instructions, assessing testamentary capacity over a telephone call is highly problematic, particularly given circumstances such as those existing in the present case relating to the deceased’s health, age and documented long standing cognitive issues. It is unknown whether anyone was present with the deceased when he gave the instructions over the telephone. Given that the plaintiff visited the deceased regularly at Warrawee, was present to witness the 2019 will, was present when instructions and other attendances were made in regard to the proposed inter vivos transfer, was to benefit significantly by the proposed change to the will, and the plaintiff’s partner was believed to visit the deceased regularly or almost daily, it cannot be ruled out with any certainty that the deceased was not alone in his room when the deceased gave the instructions to Mr Naughton.
One day later, on 14 January 2020, Mr Naughton attended at Warrawee for the deceased to sign the 2020 will. The 2020 will is in identical terms to the 2019 will, save that the Bentleigh East property was devised to the plaintiff and it also included a new clause stating that the defendant has ‘advanced dementia and has very ample and sufficient monies for her needs’. Bearing in mind that the deceased’s instructions were that everything in the will should remain the same except that the plaintiff ‘would get his home at… Bentleigh East’, there is no evidence as to when or if the deceased instructed Mr Naughton to include the new clause in the 2020 will. Mr Naughton’s file note made after the 2020 will was signed records that the deceased ‘cares about his wife Shirley but she doesn’t need it’.
In his witness statement Mr Naughton stated that on this occasion he ascertained the assets and liabilities of the deceased, although this is not recorded in his file note of the meeting, and he does not refer to being given a value of the assets and liabilities. This means that the only statement as to the value of the deceased’s assets on 14 January 2020 is the $6 million given by the deceased to Mr Naughton for the 2019 will. This far exceeds the value of the estate of $3,590,921 given in the inventory of assets and liabilities and on that basis cannot be considered accurate.
While it is apparent that the deceased had knowledge of his actual assets, as opposed to their true value, it is clear that he did not fully comprehend or appreciate the need to provide properly for the defendant, in particular whether the amount of $300,000 could be considered proper provision for her. It appears from the discussions between the deceased and Mr Naughton in regards to the 2018 will and 2019 will that the legacy to the defendant related only to her basic care needs while she was in Warrawee, as opposed to proper provision, having regard to her age, her health, her being the deceased’s longstanding spouse, her contribution to the building up of the assets over their lengthy marriage and that all the matrimonial assets were registered only in the deceased’s name. This is reinforced by the inclusion of the new clause in the 2020 will, which despite the defendant having a reduced legacy from the 2018 will states that the defendant has ‘very ample and sufficient monies for her needs’. This disregards the fact that the defendant could have possibly benefitted from additional care or engagement in activities at Warrawee.
The effect of the distribution of the deceased’s assets under the 2020 will is best assessed by reference to the value of the assets in the estate. The only value is that set out in the inventory of $3,590,921. The Bentleigh East property is valued at $1,000,000 and the remaining assets are valued at $2,590,921. It should be noted that the value of the Bentleigh East property may be higher, given that Mr Naughton’s estimate of stamp duty payable on the proposed inter vivos transfer was $70,000. Using that amount for stamp duty, the value of the Bentleigh East property would be approximately $1,272,727.[20]
[20]This figure has been calculated using the State Revenue Office of Victoria’s Land Transfer (Stamp) Duty Calculator.
Whatever value is used for the Bentleigh East property, the distribution under the 2020 will substantially favours the plaintiff and depletes the residue of the estate by $1,000,000 to $1,272,727. In substance, the 2020 will provides a significant benefit of $1,000,000 to $1,272,727 to a person that the deceased owed no moral duty, to the detriment of the defendant and the deceased’s two adult children. Clearly the 2020 will fails to comprehend and appreciate the claims to which the deceased ought to have given effect in his testamentary intentions.
While Mr Naughton considered the deceased had testamentary capacity on 13 and 14 January 2020, he did not adequately address the reasons for his conclusions nor did he obtain any information concerning the deceased’s significant health issues given that he was aware of the deceased’s age and strong personality, the financial position of the defendant and the deceased’s heavy recent reliance on the plaintiff. Given the circumstances of the substantial change in the disposition of the deceased’s assets under the 2020 will, it would have been prudent for Mr Naughton to arrange for the deceased to be assessed for testamentary capacity by a proficient medical practitioner before the 2020 will was signed.
Mr Naughton should have been more suspicious of the plaintiff and her involvement in the proposed inter vivos transfer of the Bentleigh East property and the subsequent major change in her favour in the 2020 will. The plaintiff appeared to be heavily involved with the deceased in circumstances where the deceased was likely to be vulnerable or impressionable as a result of his circumstances and became dependant on her. She held the deceased’s power of attorney, was a witness to the 2019 will, attended on Mr Naughton to give him the title of the Bentleigh East property and told him she would pay the stamp duty on the inter vivos transfer, brought the deceased to Mr Naughton’s office on 7 January 2020 for him to speak again about the inter vivos transfer, was present, with her partner, at the meeting at Warrawee on 10 January 2020 and was present with her partner at the signing of the 2020 will on 14 January 2020. Although not required to be determined, the evidence suggests that the plaintiff was pushing the outcome of being given the Bentleigh East property by the deceased, whether by inter vivos transfer or in the 2020 will.
Conclusion
While the deceased had a general understanding of his assets, his understanding of the value of his assets was far beyond their actual value. He also failed to comprehend or appreciate the claims of the defendant and the two children on his estate on either 13 January 2020 when the deceased gave instructions for the 2020 will or 14 January 2020 when he signed the 2020 will.
Perhaps most significantly, given the deceased’s age and medical history, the medical evidence put forth by the plaintiff was insufficient to demonstrate on the balance of probabilities that the deceased had testamentary capacity.
The Court is satisfied that the deceased did not have testamentary capacity on 13 January 2020 when the deceased gave instructions for the 2020 will and when he signed the 2020 will on 14 January 2020.
Orders
The Court orders that the proceeding be dismissed.
Costs
On or before 18 July 2022 the parties are to file submissions as to the costs of the proceeding, including as to the quantum of their costs.
---
2
11
0