Re Munro

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS,EQUITY AND PROBATE LIST

S CI 2018 04390

IN THE MATTER of the estate of ALAN GROWNDS MUNRO (deceased)

PATRICIA MARGARET MUNRO and ALAN JOHN CLARKE	Plaintiffs
v
BRENT FRASER MUNRO	Caveator

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	6 September 2018
DATE OF JUDGMENT:	4 December 2018
CASE MAY BE CITED AS:	Re Munro
MEDIUM NEUTRAL CITATION:	[2018] VSC 747

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PROBATE – Caveat objecting to grant of probate lodged with Registrar of Probates – Caveator filed grounds of objection with particulars – Grounds alleging executors’ conflict of interest and duty, lack of testator’s testamentary capacity and testator did not know and approve the contents of his will – Whether caveator has a real prospect of success on grounds of objection – Supreme Court (Administration and Probate) Rules 2014, r 8.08(a)(iii).

PRACTICE AND PROCEDURE – Plaintiffs seek summary dismissal of caveat – Whether defendants have no real prospect of success – Whether discretion should be exercised to allow matter to proceed to trial – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27 – Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 – Re Demediuk [2016] VSC 587 – Civil Procedure Act, ss 62, 63(1), 64.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J L Smith	Marsh & Maher Richmond Bennison
For the Caveator	Mr J Rizzi	Portfolio Law Pty Ltd

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Affidavits............................................................................................................................................. 2

Background......................................................................................................................................... 3

Caveat grounds................................................................................................................................... 5

Applicable Law................................................................................................................................... 7

Summary judgment...................................................................................................................... 7
Principles governing caveats.................................................................................................... 11
Passing over executors............................................................................................................... 12
Testamentary capacity................................................................................................................ 17
Deceased must know and approve of the contents of the will............................................ 20

Prior Wills.......................................................................................................................................... 21

Is there a case to pass over the executors?.................................................................................... 23

Broadbeach property.................................................................................................................. 26
Munro Pension Plan................................................................................................................... 27
Ivanhoe property......................................................................................................................... 30
Eaglemont property.................................................................................................................... 31
Munro Taxi Services................................................................................................................... 35
Taxi licence compensation......................................................................................................... 37
Loan by the deceased to Combined Panels Pty Ltd.............................................................. 39
Passing over the executors - conclusion.................................................................................. 39

Is there a case that the deceased lacked testamentary capacity?.............................................. 40

Is there a case that the deceased did not know and approve the contents of the will?...... 46

Conclusion......................................................................................................................................... 49

HIS HONOUR:

Introduction

These reasons concern an application by the plaintiffs to summarily dismiss a caveat lodged by Brent Fraser Munro (Caveator) against any grant of representation to the plaintiffs of the Will and Estate of Alan Grownds Munro (deceased), his father. The plaintiffs are the deceased’s widow, Patricia Margaret Munro (Patricia) and an old friend of the deceased (and of Patricia), Alan John Clarke (Alan Clarke).

The caveat was lodged on 6 March 2018. On 19 March 2018 the plaintiffs filed an originating motion for a grant of probate to them of the will of the deceased. On 18 April 2018 the Caveator lodged his grounds of objection, with particulars. On 24 April 2018 the Caveator issued a summons for directions as required by r 8.07(1) of the Supreme Court (Administration and Probate) Rules 2014 (Vic) (Probate Rules). The summons was to be before the Court on 1 June 2018, but was adjourned because of short service on the plaintiffs. In the meantime the plaintiffs filed affidavits, the purpose of which was to place evidence before the court to rebut the Caveator’s grounds of objection.

The proceeding came on for directions before Zammit J on 22 June 2018 when the plaintiffs applied to strike out the Caveator’s grounds and particulars of objection to the grant of probate to the plaintiffs. A written submission was filed in support of the application to strike out the grounds of the Caveat as not having a proper basis.[1] Patricia and Alan made affidavits in support of the application, meeting the grounds with evidence to negative them. The Caveator objected that the application should be made properly, by summons, so that the Caveator could see the basis of the application. Consequently on 3 July 2018 the plaintiffs issued a summons which, in substance, sought a summary dismissal of the grounds of objection (in substance a dismissal of the caveat) pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (CPA).[2] The summons also sought the striking out of each of the Caveator’s grounds and particulars of objection.
[1]Plaintiffs’ Brief Submissions for 22 June 2018 dated 21 June 2018.
[2]A mistaken reference which should have been a reference to s 62 of the CPA.

On 5 July 2018, Zammit J made orders pursuant to r 59.07 of the Rules requiring the plaintiffs to file and serve any further affidavits by 9 August 2018, for the Caveator to file and serve any affidavits by 23 August 2018 and for each party to file outlines of submission by 30 August 2018.[3]
[3]That order also purports to refer the hearing and determination of the plaintiffs’ summons for summary dismissal to me pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules). I note that no such referral is necessary and if it were it would seem more appropriate to have made it pursuant to r 1.07 of the Probate Rules.

The caveat advances three grounds, supported by particulars, against the grant of probate to the plaintiffs as executors appointed by the will of the deceased:

(a) that they be passed over as executors because of conflicts of duty and interest;

(b) that the deceased lacked testamentary capacity during the period shortly before or at the time of execution of the will;

(c) that the deceased did not know and approve of the contents of the will.

In respect of the summary dismissal application, the essential question is whether there is no real prospect of the Caveator establishing his grounds of objection to the grant of representation to the plaintiffs.

Affidavits

In addition to their joint affidavit filed in support of the application for a grant of representation,[4] the plaintiffs rely upon affidavits sworn by Patricia Margaret Munro,[5] Craig Alan Munro,[6] Michele McCallum[7] and Alan John Clarke.[8] The Caveator relies upon the affidavit of Robert Martin Munro, the son of the Caveator.[9] The Caveator has not filed any affidavit in support of his caveat. Robert’s affidavit contains much that is objectionable as irrelevant, matters of opinion or belief without proper grounds, and speculation. There were a great many objections by the plaintiffs to much of the evidence in Robert’s affidavit. I proposed, and the parties agreed, that I should ignore those passages I consider inadmissible rather than go through the affidavit line by line striking through the offending parts. It must be observed, however, that much of Robert’s affidavit is to do with his own relationship with the deceased. There is precious little of a relevant factual nature concerning the Caveator.
[4]Affidavit of the plaintiffs sworn 13 and 15 March 2018.
[5]Sworn 15 June 2018 (Patricia’s first affidavit) and 6 September 2018 (Patricia’s second affidavit).
[6]Sworn 15 June 2018 (Craig’s affidavit).
[7]Sworn 5 September 2018 (Michele’s affidavit).
[8]Sworn 29 August 2018 (Alan’s affidavit).
[9]Sworn 29 August 2018 (Robert’s affidavit).

On the day of the hearing, after the plaintiff’s Counsel had made his submissions to me (they were based substantially on the written Outline of Submissions filed on 4 September 2018 of which the Caveator had notice), Counsel for the Caveator applied to call the Caveator to give viva voce evidence as to the basis of his grounds. There had been no earlier warning of such an application. The Caveator had ample time since the orders of 5 July 2018 to put material on affidavit as ordered. After some discussion as to the absence of any reason why no affidavit had been filed by the Caveator, Counsel withdrew the application.[10]
[10]Transcript of Proceedings, Munro v Munro, Supreme Court of Victoria, S PRB 2018 04390, Associate Justice Derham, 6 September 2018), 51 (Transcript of Proceedings).

Background

The deceased was born in 1921 and died on 10 November 2017 at the age of 95. He first married Dawn Forbes, with whom he had two children, Brent Fraser Munro (Brent), who is the Caveator, and Lindy Louise Kreun (Lindy). Dawn died in about 1963. In September 1968 the deceased and Patricia Margaret Munro (Patricia) married. The deceased and Patricia were thus married for about 49 years. Patricia was born on 4 December 1942 and was thus about 20 years younger than the Deceased. She is currently 76 years old. Craig Alan Munro was born to the deceased and Patricia on 13 August 1970.

By his last Will the deceased appointed the plaintiffs to be the executors and trustees of his estate. He gave all his right, title and interest in a property situate at and known as Unit 3901, The Oracle, 1 Oracle Boulevard, Broadbeach, Queensland (Broadbeach Property) to Patricia. He gave to each of his son Brent and his daughter Lindy one taxi licence plate or cash to the value thereof. He gave to Craig all his right title and interest in the property situate at and known as 78 The Eyrie, Eaglemont, Victoria (Eaglemont Property) and forgave him from having to repay the Estate any monies owed by him. He gave $25,000 to each of his grandchildren (Robert Stanley Munro, Dean Alan Munro, Benjamin Craig Munro and Emily Munro). He then left the rest and residue of his Estate upon trust for his wife Patricia.

The deceased had been an Australian Cycling Champion and rode all over the world. He returned to Melbourne in 1951 and worked in his father's taxi business, becoming a co-director of Munro Taxi Service Pty Ltd (Munro Taxi Service).

Throughout the deceased's and Patricia's life together, their primary source of income was through taxi licences that the deceased owned and operated.[11] The deceased would assign the taxi licence to drivers. He had attended a mechanics course and would sometimes do repairs on taxis himself. According to Patricia's first affidavit, the deceased lived an incredibly fast life. He loved fast boats and had a private pilot's licence. He would fly small planes and built a hangar at Essendon Airport in which to keep them. He had flown in air safaris in the United States, New Zealand, Norfolk Island, Canada and Alaska. He and Patricia had mutual hobbies, including golf and travelling. They took extensive golfing trips together to the United States, Maui and New Zealand. They also travelled extensively together to many places, including a three month road trip through the United States of America and, in August 2014, a two week cruise from Amsterdam to Budapest.
[11]Presumably this included income derived through Munro Taxi Services operation of taxi licences.

Alan was diagnosed with Sundowners type dementia in or about April 2015. Patricia cared for him and ensured that he took all his medication.

There is little or nothing in the estate of the deceased, unless, as the Caveator would like to establish, the assets disposed of by the deceased during his life were so disposed of under the influence of Patricia, or a certain property registered in his name but claimed (and accepted by the plaintiffs) to be beneficially owned by Craig, are found to be a part of his estate.

Caveat grounds

By the caveat dated 18 April 2018, Brent objects to probate of the will of the deceased being granted to the plaintiffs on the following grounds:

(a) the first plaintiff, Patricia Margaret Munro, should be passed over as the executor of the will due to her conflict of interest in having received substantial benefits from the deceased inter vivos, in circumstances that require careful examination. The particulars given are summarised as follows:

(i) in relation to the Broadbeach Property, which had been sold before the death of the deceased, the proceeds of its sale do not appear in the inventory of assets and liabilities filed with the plaintiffs' probate application;

(ii) in relation to the property at 6 Nyorie Court, Ivanhoe (Ivanhoe Property), it was purchased by the deceased on 26 May 1968, on 25 July 2012 the deceased signed a transfer of it from his sole name into the joint names of Patricia and himself. The consideration for the transfer was 'natural love and affection'. The effect of the transfer was to gift the Ivanhoe Property to Patricia who became the sole registered proprietor on 15 January 2018. Patricia is benefited by the transfer and is not in a position to investigate how it occurred;

(iii) in relation to the Eaglemont Property, the deceased purchased it on 6 November 2003 in his sole name for $800,000. Clause 6 of the will gifts the property to Craig and forgives him from having to repay the deceased any money he owes the deceased. Craig claims an equitable interest in the Eaglemont Property. Notwithstanding clause 6 of the will and Craig's foreshadowed equitable claim, on 19 May 2017 Craig lodged a caveat on the title to the property as a purchaser pursuant to a contract of sale dated 6 November 2004. As Patricia is Craig's mother she is not in a position to defend the deceased's proprietary interest in the Eaglemont Property;

(iv)the deceased had owned and operated a successful taxi business through Munro Taxi Service. Brent, Lindy and Craig each owned 100 of 300 ordinary shares in that company. In 2007, Munro Taxi Service was wound up and neither Brent nor Lindy received any consideration for their shares;

(v) the deceased was historically a wealthy man yet the inventory of assets and liabilities suggests the deceased died with only the Eaglemont Property registered in his name. To properly administer the estate of the deceased, the missing proceeds from the sale of the Broadbeach Property, the transfer of the Ivanhoe Property, the purchase of the Eaglemont Property and the winding up of Munro Taxi Service must be investigated. All these transactions occurred when the deceased was elderly and it is likely that the transactions have reduced the residuary estate of the deceased. If Patricia remains as executor the transactions will not be investigated or determined because of the obvious conflict of interest on her part. The second plaintiff, Alan Clarke has a close personal relationship with Patricia which suggests that he is also likely to be effected by Patricia's conflict. He should also be passed over as executor;

(b) the deceased lacked testamentary capacity during the period shortly before or at the time of execution of the will. The particulars given are:

The only cause of death listed on the deceased's death certificate is Alzheimer's Disease. The death certificate suggests he was suffering from that disease for two years. The caveator will give evidence that suggests that the deceased was in cognitive decline for many years prior to his death. The will was made approximately two years before the deceased died.

(c) the deceased did not know and approve the contents of the will. The particulars given are that the following circumstances ought to excite the suspicion of the Court:

(i) when the will was made the deceased was aged and infirm and suffering from dementia;

(ii) when the will was made the deceased was blind, and the attestation clause of the will does not suggest that the will was read over to the deceased;

(iii) the last will departs radically from the deceased's penultimate will in that it makes less provision for the Caveator and Lindy;

(iv) when the deceased signed the last will he was 93, vulnerable and affected by Alzheimer's disease. He was declining both physically and mentally;

(v) the will was changed to favour Patricia and she was a person that possessed great influence and authority over the deceased at the relevant time;

(vi) the will was made by Adams McGuire Sier, who are not the deceased's usual solicitors;

(vii) the Caveator refers to and repeats the particulars in relation to the first two grounds.

Applicable Law
Summary judgment

There is no doubt, and it was not contended to the contrary, that the CPA and the Rules relating to applications for summary judgment apply to probate proceedings.[12]
[12]See O 22, pt 2, of the Rules and r 1.05 of the Probate Rules; See also Van Wyk v Albon [2011] VSC 120; Re Demediuk [2016] VSC 587; Gardiner v Hughes [2017] VSCA 167.

The application in this case is an example of the application of the CPA and the Rules to a probate proceeding in which application is made for a grant of probate and resisted by a caveator. A caveat will expire 30 days after the Registrar gives notice to the caveator that an application for a grant of probate has been filed unless within that period the caveator serves on the plaintiffs and files with the Registrar a statement of the grounds of objection to the making of the grant.[13]
[13]Probate Rules, r 8.03(3)(a).

The caveat procedure has the effect of initiating proof of the deceased's will in solemn form. That traditionally involved all of the evidence being given orally, but it is now usual for that evidence to be the subject of affidavits, in addition to the standard affidavit filed in support of the application made in common form. The grounds of objection set out in the caveat and their particulars are the rough equivalent of a pleading in a writ proceeding. Where, as here, there is a challenge to an application for a grant of probate by a caveator, the plaintiffs are effectively in the position of defendants in responding to the grounds of objection filed by the defendants.[14]
[14]Re Demediuk [2016] VSC 587, [13].

When a caveator's grounds and particulars are challenged by the applicants for probate under the procedure in the CPA it is incumbent upon the caveator to support its particulars by evidence, including by reference to undisputed documents discovered or revealed by the estate of the deceased. This follows from the nature of the procedure under the CPA and the Rules made to regulate applications for summary dismissal.[15]
[15]Rules 22.04 and 22.05 of the Rules made applicable by r 1.05 of the Probate Rules.

In the context of an application for revocation of a grant, McLeish JA said in Gardiner v Hughes:[16]

Probate courts have often required a party challenging a grant of probate to show a prima facie case at an early stage of proceedings, in recognition of the significant implications of upsetting a grant.[17] However, such a requirement does not apply automatically and the stage, if any, in a proceeding dealing with an application for revocation at which the applicant may be required to establish a prima facie case for revocation, or a real prospect of success, is governed by rules of court and such directions as the court may make consistent with the CPA.[18]

[16][2017] VSCA 167.

[17]Re Seymour [1934] VLR 136; In Re Devoy: Fitzgerald v Fitzgerald [1943] St R Qd 137; In Re Gillard [1949] VLR 378; Re Egan (deceased) [1963] VR 318; Poulos v Pellicer In the Estate of Culina [2004] NSWSC 504; Tobin v Ezekiel (2012) 83 NSWLR 757; Estate Cockell; Cole v Paisley [2016] NSWSC 349.

[18]Re Seymour [1934] VLR 136; Re Egan (deceased) [1963] VR 318; Tobin v Ezekiel (2012) 83 NSWLR 757; Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786.

Part 4.4 of the CPA sets out the test for summary judgment: a court may give summary judgment if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, has no real prospect of success (s 63).

This liberalises the rules governing summary judgment in Victoria, so that it is easier to dispose of unmeritorious claims or defences summarily. The Court of Appeal has stated that the test:

[S]hould be construed as one of whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success; that the 'real chance of success' test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent's case is not 'hopeless' or 'bound to fail', it does not have a real prospect of succeeding.[19]

[19]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 [29] (Warren CJ, Nettle JA (Neave JA agreeing)).

The test must be applied according to its own terms and not according to considerations of whether the proceeding is 'hopeless' or 'bound to fail'. To adopt 'an unduly constrained, historical approach to the construction of s 63 would 'subvert the purpose of the provision'.[20]
[20]Ibid [25] (Warren CJ, Nettle JA (Neave JA agreeing)).

Courts must, however, continue to exercise the power to terminate proceedings summarily with caution. Courts should therefore only exercise the power if it is clear that there is no real question to be tried. This is so irrespective of whether an application for summary judgment is made on the basis that: the pleadings do not disclose a reasonable cause of action, and no amendment could cure this error; or the action is frivolous, vexatious or an abuse of process; or the application for summary judgment is supported by evidence.[21]
[21]Ibid [35] (Warren CJ, Nettle JA (Neave JA agreeing)).

The power to give summary judgment must be exercised in accordance with the overarching purpose of the Act and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence.[22]
[22]Ibid [42] (Neave JA).

These principles were confirmed by the Court of Appeal in Mandie v Memart Nominees Pty Ltd[23] where Kyrou, Ferguson and McLeish JJA observed:

According to Lysaght: a prospect which is not 'real' is 'fanciful'; although the 'no real prospect of success' test in s 63(1) of the CP Act is more liberal than the common law test of 'hopeless' or 'bound to fail', there may not be much difference between them in practice; and, properly understood, a real question to be tried is one which realistically might result in the respondent to an application for summary judgment succeeding in the proceeding. [Footnote omitted].

[23][2016] VSCA 4, [45].

A court will more readily hold that the summary judgment provisions of the CPA will be satisfied when the resolution of a dispute depends on a question of law, rather than on a question of fact.[24] Where the prospects of success at trial involve a consideration of the evidentiary foundation of the claim, as opposed to the adequacy of a pleading, it is desirable that there should be a full trial of the claims.[25]
[24]Mutton v Baker [2014] VSCA 43, [19]; Re Demediuk [2016] VSC 587, [18].
[25]Manderson M&F Consulting (A Firm) v Incitec Picot Ltd (2011) 35 VR 98; Re Demediuk [2016] VSC 587, [18].

If there is no real prospect of success, a court may nevertheless allow a matter to proceed to trial if:

(a) it is not in the interests of justice to summarily dispose of the proceeding (s 64(a)); or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate (s 64(b)).

Whether a proceeding should be allowed to go to a full hearing on the merits must be determined according to the circumstances of each case.[26]
[26]Barber v State of Victoria [2012] VSC 554, [15].

In Re Demediuk[27] McMillan J applied pt 4.4 of the CPA to caveat proceedings that challenged an application for a grant of probate of a will. Although the challenge to the grant of probate was not dismissed summarily, the decision confirms the applicability of the relevant provisions of the CPA to proceedings in the probate jurisdiction of the Court.
[27][2016] VSC 587, [12]-[18].

Principles governing caveats

The lodging of a caveat is authorised by s 58 of the Administration and Probate Act 1958 (Vic) (A & P Act). That section provides that a person may lodge a caveat in accordance with the Rules of the Supreme Court against the making of a grant. The relevant rules are found in O 8 of the Probate Rules. For present purposes the relevant rule is r 8.06, which sets out the grounds 'which may be stated' in the caveat. The specified grounds do not include two of those advanced in this case, namely the ground that the executors should be passed over and the ground that the testator did not know and approve the contents of the will. The rule does not prevent other appropriate grounds being stated. The ground that the testator did not know and approve the contents of the will is common and is often advanced in tandem with the ground that the testator lacked testamentary capacity during the period shortly before and at the time of execution of the will.

A caveator must file particulars to establish not only that they have standing to lodge the caveat, but also a prima facie case before the application can proceed. Standing is usually established by the caveator having a beneficial interest in the deceased's final will or under the penultimate will or the intestacy provisions where there is no penultimate will.[28] In this case there is no dispute as to standing as the Caveator is a beneficiary under the will of the deceased, and his penultimate will (and the prior wills should that become relevant), and his rights (including his right to commence a family provision claim under pt IV of the A&P Act) may be affected by the outcome of the proceeding.[29]
[28]Re Przychodski [2016] VSC 781, [17].
[29]Re Kouvakas; Lucas v Konakas [2014] NSWSC 786 [212]-[216]; Re Przychodski [2016] VSC 781m [17].

The particulars given must set out a sufficient factual basis for the grounds of objection. This will define the questions for trial in a way similar to the function of pleadings and enable the propounder of the last will to understand the case put against the making of a grant with precision and particularity and avoid surprise at the trial.[30]
[30]Re Przychodski [2016] VSC 781, [19].

In Re Przychodski[31] McMillan J summarised some principles regarding the provision of proper and adequate grounds for caveats in the following terms:[32]

The Court in its probate jurisdiction has an inquisitorial role that requires a greater supervision and control of proceedings than adversarial common law proceedings.[33] The primary function of the Court in exercising its probate jurisdiction is to make grants of representation. Caveats act as a mechanism for notice from the Court to a party interested in an estate that an application for a grant of representation has been made in respect of a deceased estate.
The caveat procedure exists to ensure that estates are administered in an orderly manner and that any issues arising before a grant of representation is made can be investigated and dealt with by the Court. This ensures that any grant gives effect to the final valid testamentary wishes of the deceased or the intestacy provisions and title to any real or personal property owned by the deceased at the date of their death passes in accordance with these wishes or provisions. All participants in a proceeding must be mindful that the purpose of the probate jurisdiction is ensuring that the testamentary intentions of a deceased person are carried out and the beneficiaries receive what is due to them.[34]
[31][2016] VSC 781.
[32]Ibid [14]-[15].
[33]See, e.g., Re Fuld [1965] P 405, 409F-411B; Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786 (16 July 2014) [264] (Lindsay J).
[34]In the Goods of William Loveday [1900] P 154, 155–156. Applied in In the Goods of Galbraith [1951] P 422. See also, Bull v Fulton [1942] HCA 13; (1942) 66 CLR 295, 337; Estate Wight: Wight v Robinson [2013] NSWSC 1229 (30 August 2013) [17]–[20]; Re Kouvakas; Lucas v Konakas [2014] NSWSC 786 (16 July 2014) [211]; Estate Cockell; Cole v Paisley [2016] NSWSC 349 (4 April 2016) [52].

Passing over executors

There is no express power conferred on the Court by the A & P Act to pass over an executor or executors. Rule 5.02 of the Probate Rules, however, refers to applications for a grant of representation under 'peculiar circumstances'. It may be that the power to pass over is a concomitant of the power of the Court to grant representation under peculiar circumstances.[35] In any event, this Court's jurisdiction in Victoria is unlimited[36] and its probate jurisdiction pursuant to the A & P Act[37] and the Supreme Court Act 1986 (Vic)[38] is broad and brings with it an inherent power necessary to the effective exercise of the jurisdiction granted.[39] That power extends to prevent steps being taken that would lead to injustice[40] or render the grant inefficacious. This is expressed in different ways depending on the circumstances. Another way of expressing the power is that it is a power to maintain the authority of the court and to prevent its processes from being obstructed and abused.[41] Where an application for a grant of probate is made to an executor appointed by a deceased's will and the circumstances show that the executor is liable to be removed, passing over that executor will prevent the grant leading to injustice or being rendered inefficacious, obstructed or abused.
[35]LexisNexis Butterworths, Wills Probate and Administration Service Victoria, Vol 1 (at Service 57) [28,150].
[36]Constitution Act 1975 (Vic) s 85.
[37]A&P Act, particularly ss 6 and 34.
[38]Supreme Court Act 1986 (Vic) s 17.
[39]Keramianakis v Regional Publishers Pty Ltd (200( 237 CLR 268, 280, [36]; [2009] HCA 18.
[40]Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909, 977 (Lord Diplock).
[41]NH v Director of Public Prosecutions for the State of South Australia (2016) 260 CLR 546, [69], referring to Master Jacob, ‘The Inherent Jurisdiction of the Court’ (1970) 23 Current Legal Problems 23,27.

Where the Court exercises the power to pass over a named executor, it does so having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate.[42] The consequence is that either the other named executors will receive a grant of representation or letters of administration with the will annexed will be granted to someone else.[43]
[42]Re Estate of Crane [2005] SASC 379, [24] (Re Crane), citing In the Goods of William Loveday [1900] P 154, 156, a case concerning the revocation of a grant.
[43]LexisNexis Butterworths, Wills Probate and Administration Service Victoria, Vol 1 (at Service 57) [28,150].

In Uniting Church inAustralia Property Trust (NSW) v Millane[44] Windeyer J, considered an application by two nominated executors for an order, in effect, that the third nominated executor be passed over. The third nominated executor, the defendant, applied to strike out the application. The plaintiffs' application was based on the allegation that the defendant was involved in an inter vivos property transaction with the deceased under which he received a benefit in circumstances alleged to involve unconscionable conduct by him towards the deceased. It was said by the plaintiffs that it would not be possible to commence proceedings against the defendant on behalf of the estate without his consent, which he would be unlikely to give. The plaintiffs relied on the inherent jurisdiction of the court. Justice Windeyer said that the application to pass over the defendant was bound to fail. He said that pleaded misconduct was very different from proved misconduct and that it was undesirable for the administration of estates to be delayed by having to determine in prior proceedings, or perhaps the same proceedings, disputed claims of unconscionable conduct. He noted that if the defendant was to misconduct himself then he could be removed. If he did not consent to the bringing of proceedings, the Court could allow proceedings to be brought. In ordinary circumstances, the proper course is to assume that a named executor will act properly and not to have some prior determination of proceedings which will properly arise in the administration of the estate of the deceased person. His Honour noted that:

Thus the fact that there could be some conflict of interest does not in itself justify passing over a named executor who wishes to take a grant. Many executors named and appointed have some conflict such as being a debtor to the estate. That does not justify their being passed over.[45]

[44][2002] NSWSC 1070; see also Re Crane [2005] SASC 379, [30], where Besanko J summarises the effect of the decision.

[45][2002] NSWSC 1070, [8].

It is clearly established that the Court will not readily pass over a named executor and, in general, a person named as executor is entitled to a grant of probate.[46] There are a number of circumstances in which the Courts of probate have passed over an executor or revoked a grant of probate, including where the executor was of bad character;[47] where the executor has neglected her duties;[48] where the executor has intermeddled in the estate and refused to take a grant;[49] where the executor was absent abroad;[50] where the executor was suffering from ill health;[51] where the executor was of unsound mind;[52] where the executor was not competent to take probate;[53] where the executor had disappeared;[54] and where the estate was insolvent.[55]
[46]Re Crane [2005] SASC 379, [24].
[47]Re S [1968] P 302; Re Crane [2005] SASC 379, [25].
[48]Re Potticary [1927] P 202; Re Crane [2005] SASC 379, [25].
[49]Re Biggs [1066] P 118; Re Crane [2005] SASC 379, [25].
[50]Re William Taylor [1892] P 90; Re Crane [2005] SASC 379, [25].
[51]Re Galbraith [1951] P 422; Re Crane [2005][
[52]Re Atherton [1892] P 104; Re Crane [2005] SASC 379, [25].
[53]Re Stewart (1875) LR 3 P & D 244; Re Crane [2005] SASC 379, [25].
[54]Re Sawtell (1862) 2 Sw & Tr 448; Re Crane [2005] SASC 379, [25].Re Leguia; Ex parte Ashworth [1934] P 80; Re Crane [2005] SASC 379, [25].
[55]

In Re Crane[56] the plaintiff (David) and defendant (Kevin) were two brothers who were the named executors under their father's will. David applied for the defendant to be passed over on the basis that there was a conflict of interest and duty arising from disputes concerning the ownership of three significant assets.
[56][2005] SASC 379.

Until shortly before this death, the deceased was the owner of four shops at Mount Barker in South Australia and a caravan. Kevin asserted that six days before he died, the deceased sold the Mount Barker shops to him for the sum of $100. This was supported by a receipt signed by the deceased and a bank deposit. The evidence was that the net value of the shops after taking into account a mortgage was about $200,000.00. At about the same time as the purported sale of the shops, Kevin asserted that the deceased sold him the caravan for the sum of $100.00.

David asserted that the sales was legally ineffective on the grounds that at the relevant time the testator lacked the requisite capacity. It was also anticipated by Besanko J, understandably, that David would also assert that the transactions were legally ineffective on the ground of undue influence or unconscionable conduct on the part of Kevin. There was also a third asset in dispute, a debt of $150,000.00 owed by Kevin to the deceased in respect of an earlier sale of a dwelling and shop. Kevin asserted that was a gift. He had sold the dwelling and shop for $250,000.00.

Justice Besanko noted that in considering whether it was an appropriate case to exercise the jurisdiction to pass over Kevin, he must have regard to the following propositions:

(a) that the guiding principle is the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate;

(b) that, in general, the named executor is entitled to a grant of probate;

(c) that, in the ordinary case, a potential conflict of interest will not be sufficient to justify the exercise of the jurisdiction.

He found that the case was different from that of an executor who has some conflict by reason of being a debtor to the estate. Kevin made it clear that he maintained that the transactions involving the Mount Barker Shops and the caravan were legally effective and that he owed no money to the estate. There was every reason to think that he would continue to maintain that position until a Court determined otherwise. If made an executor it was likely that he would not consent to the estate asserting rights in relation to the three assets. In that event, an application to the Court for the estate to bring or defend proceedings would be almost inevitable.

Whilst Besanko J emphasised that he was not determining the merits of the claims, he nevertheless reached the conclusion that the claims required careful investigation, and litigation in relation to one or more claims was likely. In the particular circumstances the order to pass over Kevin was made. The nature of the dispute explains the result.

In Mataska v Browne,[57] McMillan J made an order passing over an executor due to her conflict of interest in having received a valuable property from her deceased mother inter vivos in circumstances that required careful examination where her sister had not been provided for in the will. That sister was appointed limited administrator to investigate the inter vivos transaction in circumstances where she had a prima facie claim pursuant to pt IV of the A & P Act to provision out of the deceased's estate.
[57][2013] VSC 62.

There is an analogy between the circumstances in which an executor may be removed pursuant to the power in s 34 of the A & P Act and the circumstances in which an executor may be passed over for a grant of representation. Justice Ashley noted in Monty Financial Services Ltd v Delmo[58] (an application under s 34 of the A & P Act to remove an executor to whom a grant had been made) that the testators selection of an executor should not 'lightly' be set aside and should not be disregarded except for serious reason. He noted it was a relevant matter both when a question of passing over an executor arises and also when removal of an executor is under consideration.
[58][1996] 1 VR 65, 75 (Monty v Delmo).

Monty v Delmo was a case based on an alleged conflict in the executor between his duty as executor and his interest as a creditor of the estate of the deceased. Justice Ashley reviewed the authorities relevant to the construction of s 34 of the A & P Act, and the powers of the court, statutory and inherent, to remove trustees, and concluded that unfitness to act as executor within the meaning of s 34 comprehends a situation in which an executor has a conflict of duty and interest in carrying out his executorial duties.[59] Since the decision in Monty v Delmo, the principles expounded by Ashley J have been followed or referred to with approval by other single judges in the Supreme Court[60] and by the Court of Appeal.[61] In Fysh v Coote Ormiston JA said of the reasons of Ashley J in Monty v Delmo:[62]

…Ashley, J. describes in careful and well reasoned terms the nature of the Court's jurisdiction and the factors which are relevant to the exercise of its discretion under the section. His Honour gives compelling reasons why an executor's conflict of duty and interest of a kind likely to affect the efficient and satisfactory administration of the estate is a proper basis for removing an executor and substituting another.

[59]Monto v Delmo [1996] 1 VR 65, 82.

[60]Morgan v Morgan [2000] VSC 445, (Beach J) [21]; Tuohey v Tuohey [2002] VSC 180 (McDonald J), particularly at paragraph [56].

[61]Fysh v Coote [2000] VSCA 150 (particularly Ormiston JA); Dimos v Skaftouros (2004) 9 VR 584.

[62][2000] VSCA 150, [20] (Batt and Chrnov JJA agreeing).

As Ashley J observed in Monty v Delmo, it is not every conflict of duty and interest which should result in removal of an executor:

The intention of the testator that the executor be a particular person should not lightly be set aside - whether before or after grant. Again, the will itself may show that the testator was aware that his or her executor would face a potential conflict of duty and interest. In such a case - as may arise, for example, where an executor is also one of the beneficiaries - it would not be right without more, to remove the executor.[63]
[63]Monty v Delmo [1996] 1 VR 65, 83.

Testamentary capacity

There are many judicial statements of what amounts to testamentary capacity. Perhaps the most famous of them is by Cockburn CJ in Banks v Goodfellow.[64] What that decision establishes is that it is essential to the exercise of the power to dispose of one's assets by will to understand the nature of the act and its effects, the extent of the property to be disposed of, to understand and appreciate the claims to which the testator ought to give effect and not to be affected by any disorder of the mind which affects these matters.
[64](1870) LR 5 QB 549, 565-7.

Justice Windeyer observed, however, in Kerr v Badran,[65] that it is necessary to bear in mind the differences between life in 1870 and life now, in particular the fact that:
[65][2004] NSWSC 735, [49].

(a) life expectancy in 1870 was probably less than 60 years where it is now at least 80 years;

(b) young people can be expected to have a more accurate understanding of the value of money than older people;

(c) younger people are less likely to suffer memory loss;

(d) 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;

(e) many people have handed over management of share portfolios and even real estate investments to their advisors. They may well understand that they have assets of a particular kind but at the same time may not have a proper understanding of their value. They may, nevertheless, be able to distribute those assets by wills. Knowing the extent of one's estate does not necessarily mean knowing each particular asset or its value.

Justice McMillan observed in Brown v Guss[66] that the Court should look:

… not to the testator's actual understanding of their precise financial situation, but to their capacity to understand the nature of their assets, the extent of their assets, how they wish those assets to be divided, and who they should consider when dividing those assets. Making a will is not an exercise in memorisation, but in disposition. It is the soundness of the testator's ability to dispose that concerns this Court.[67]

[66][2014] VSC 251.

[67]Ibid [345].

It is accepted that there are degrees of unsoundness of mind which do not affect the capacity of the testator to exercise the power to make a will. In Bailey v Bailey,[68] Knox CJ and Starke J, after referring to the principles in Banks v Goodfellow, quoted from that case and from Boughton & Marston v Knight[69] as follows:

The testator's "memory may be very imperfect; it may be greatly impaired by age or disease; he may not be able at all times to recollect the names, the persons, or the families of those with whom he had been intimately acquainted; may at times ask idle questions, and repeat those which had before been asked and answered, and yet his understanding may be sufficiently sound for many of the ordinary transactions of life. He may not have sufficient strength of memory and vigour of intellect to make and to digest all the parts of a contract, and yet be competent to direct the distribution of his property by will. This is a subject which he may possibly have thought of, and there is probably no person who has not arranged such a disposition in his mind before he committed it to writing. The question is not so much what was the degree of memory possessed by the testator? as this: Had he a disposing memory? was he capable of recollecting the property he was about to bequeath; the manner of distributing it; and the objects of his bounty? To sum up the whole in the most simple and intelligible form, were his mind and memory sufficiently sound to enable him to know and to understand the business in which he was engaged at the time he executed his will?"[70] It is "a practical question, one in which the good sense of men of the world is called into action, and … it does not depend solely on scientific or legal definition".[71]

[68](1924) 34 CLR 558, 566, noting that Knox CJ and Starke J dissented in the result.

[69](1873) LR 3 P & D 64.

[70](1870) LR 5 QB 549, 568.

[71]Boughton & Marstan v Knight (1873) LR 3 P & D 64, 67.

In Bailey v Bailey, Isaacs J, with whom Gavan Duffy and Rich JJ agreed, stated 12 propositions, all of which remain good law. He begins with the onus of proof burdening the propounder of the will and ends with the primacy of the day of instructions for the will over the day of execution, if the former precedes the latter. Propositions 6 and 7 are important to this case. They amount to this: the quantum of evidence sufficient to prove a will depends upon the circumstances of each case. That is because of the degree of vigilance to be exercised by the court varies with the circumstances. Those circumstances include the complexity of the will, whether it contains apparently irrational provisions for the exclusion of persons naturally having a claim upon the bounty of the testator, the age of the testator and his health and the person responsible for the preparation of the will having the motive and the opportunity to exercise undue influence to his or her own benefit.[72] Proposition 8 is that:

Once the propounder establishes a prima facie case of sound mind, memory and understanding with reference to the particular will, for capacity may be either absolute or relative, then the onus probandi lies upon the party impeaching the will to show that it ought not to be admitted to proof.[73]
[72]Bailey v Bailey (1924) 34 CLR 558, 570-2.
[73]Ibid 571.

Deceased must know and approve of the contents of the will

A testator must not only possess testamentary capacity, he must also know and approve the contents of his will. Knowing and approving of the contents of one's will is traditional language for saying that the will 'represented [one's] testamentary intentions'.[74] 'Testamentary capacity' and 'knowledge and approval' are distinct concepts. The former is a necessary but not a sufficient condition for the establishment of the latter.[75]
[74]Veall v Veall [2015] VSCA 60, [173] (Santamaria JA, with whom Beach and Kyrou JJA agreed) (Veall), citing Gill v Woodall [2011] Ch 380, 387 [14] (Lord Neuberger of Abbotsbury MR, quoting Chadwick LJ in Fuller v Strum [2002] 1 WLR 1097, [59]). See also Greaves v Stolkin [2013] EWCA 1140, [67]–[73] (Newey J).
[75]Veall [2015] VSCA 60, [173] citing Hoff v Atherton [2005] WTLR 99 [62].

Knowledge and approval is presumed from the fact of due execution of a will by a person who has testamentary capacity.[76] In Nock v Austin, Isaacs J summarised the law in this way:[77]
[76]Nock v Austin (1918) 25 CLR 519, 528.
[77]Ibid.

(a) in general, where there appears no circumstances exciting suspicion that the will may not have been fully known to and approved by the testator, the mere proof of his capacity and of the fact of due execution creates an assumption that he knew of and assented to its contents;

(b) where any such suspicious circumstances exist, the assumption does not arise, and the proponents have the burden of removing the suspicion by proving affirmatively by clear and satisfactory proof that the testator knew and approved of the contents of the will;

(c) if in such a case the conscience of the tribunal, whose function it is to determine the fact upon a careful and accurate consideration of all the evidence on both sides, is not judicially satisfied that the will does contain the real intention of the testator, the Court is bound to pronounce its opinion that the will is not entitled to probate;

(d) the circumstance that a party who takes a benefit wrote or prepared the will is one which should generally arouse suspicion and call for the vigilant and anxious examination by the Court of the evidence as to the testator's appreciation and approval of the contents of the will;

(e) but the rule does not go further than requiring vigilance in seeing that the case is fully proved. It does not introduce a disqualification;

(f) nor does the rule require as a matter of law any particular species of proof to satisfy the onus; and

(g) the doctrine that suspicion must be cleared away does not create 'a screen' behind which fraud or dishonesty may be relied on without distinctly charging it.

Prior Wills

The deceased made a number of prior wills. They are all exhibits to Patricia's first affidavit.[78] The dates of those wills and the substantive dispositions made by them (ignoring personal chattels and dispositions of residue if Patricia does not survive the deceased) are as follows:
[78]Exhibit PM-2 to Patricia’s first affidavit.

(a) will made 7 May 2004: one taxi licence to Brent, $50,000 to each of the deceased's grandsons, Robert and Dean, $50,000 to Lindy, $5,000 to each of two Godsons (Lincoln Kleak and Andrew Kleak) his airplane and cars and the Eaglemont Property to Craig with the residue to Patricia;

(b) will made 8 July 2009: one taxi licence to Brent, $100,000 each to his four grandchildren, Robert, Dean, Emily and Benjamin, $100,000 to Lindy, $5,000 to each of his two Godsons, his airplane and cars and the Eaglemont Property to Craig with the residue to Patricia;

(c) will made 6 May 2011: one taxi licence to Brent or cash to the value thereof plus $35,000, one taxi licence and his cars to Craig together with the Eaglemont Property which he declares was Craig's property and he has held on trust for him, $150,000 to Lindy (noting she had little contact), $50,000 to each of two grandchildren, Robert and Dean(noting the lesser provision because he had paid their private education, $300,000 to each of his grandchildren Benjamin and Emily, $5,000 each to his two Godsons with the residue to Patricia;

(d) will made 30 January 2013: one taxi licence to Brent or cash to the value thereof plus $35,000, one taxi licence and his cars to Craig together with the Eaglemont Property which he declares was Craig's property and he has held on trust for him, $200,000 to Lindy (noting that she has had little contact and had been disrespectful and argumentative), $25,000 to each of his grandchildren Robert and Dean (noting the lesser provision because he had paid their private education at Bendigo Grammar School), $300,000 to his grandchildren Benjamin and Emily and $5,000 to each of his two Godsons with the residue to Patricia; and

(e) will made 8 May 2014: three taxi licences to Brent or cash to the value thereof plus $35,000, three taxi licences and his cars to Craig plus the Eaglemont Property, which he declares was Craig's property paid by him and for which he merely assisted him to finance but which Craig has paid for and which he has held on trust for him, and forgiveness of any debts, $200,000 to Lindy (noting that she has had little contact and been disrespectful and argumentative), $25,000 to each of his grandsons Robert and Dean (with the same notation as the previous will) and $300,000 to each of Benjamin and Emily with the residue to Patricia.

It is notable that in all of his wills the deceased left the Eaglemont Property to Craig and the residue of his estate on trust for Patricia.

Is there a case to pass over the executors?

The basis advanced by the Caveator for passing over the executors depends upon an alleged conflict of duty and interest by Patricia, and a close association between Patricia and her co-executor Alan Clarke. Patricia's conflict of her duty and interest arises from her duty to well and truly collect and administer the estate of the deceased versus her personal interest in not investigating several transactions that either benefited her or her son Craig towards the later stages of the deceased's life. The basis of the claim that Patricia is an a position of conflict is broadly as follows:

(a) the deceased was historically a very wealthy man yet the inventory of assets and liabilities filed with the plaintiffs' application for probate suggests that the deceased died with only the property known as the Eaglemont Property;

(b) the Caveator's case theory is that Patricia caused some of the assets of the deceased to be moved from the deceased's personal name into assets that would either pass to her by survivorship upon the death of the deceased or would otherwise fall outside the estates. The transactions that caused the movement of these assets 'may have been' the product of undue influence or unconscionable conduct and therefore have the potential to be set aside;

(c) the Caveator contends that Patricia caused these movements of assets to defeat any entitlement that the Caveator or Lindy may have to commence a claim against the estate under pt IV of the A & P Act;

(d) if the transactions were made to defeat the Caveator and Lindy's potential statutory entitlements for family provision, those transactions may be liable to be set aside on the principle stated in Earl of Chesterfield v Janssen;[79] and

(e) if the Caveator's passing over application is successful, an application for a grant of administration will be made by either himself or a suitably qualified independent administrator so that the suspicious transactions can be investigated.

[79](1751) 2 Ves Sen, 125, 126; (1751) 28 ER 82, 100, referred to in Roderick Pitt Meagher, John Dyson Heydon and Mark Leeming, Equity: doctrines and remedies (LexisNexis Butterworths, 4th ed, 2002) 453.

These matters are such, the Caveator submitted, that the Court should exercise its discretion to allow the matter to proceed pursuant to s 64 of the CPA.

The Caveator alleges that there are suspicious transactions requiring investigation. They are:

(a) the purchase and sale of the Broadbeach property and the payment a part of the proceeds of the sale of that property to the Munro Pension Plan;

(b) the transfer of the Ivanhoe property into the joint names of the deceased and Patricia and whether that was affected by the undue influence of Patricia;

(c) whether the Eaglemont Property is both legally and beneficially owned by the deceased or whether Craig is the equitable owner;

(d) that the deceased owned and operated a successful taxi business through Munro Taxi Service. Lindy and Craig each owned 100 of the 300 ordinary shares issues in the capital of that company. In 2007 Munro Taxi Services was wound up and neither the Caveator nor Lindy received any consideration for their shares;

(e) on 14 February 2018 (that is after the deceased died), Patricia received $100,000 on behalf of the estate from the Department of Economic Development, Jobs, Transport and Resources (Department) as part of its Fairness Fund (established pursuant to the taxi industry reform undertaken in 2017), and instead of depositing that sum into the account in the name of the deceased, she deposited into her joint account with the deceased. These funds must be returned to the estate;

(f) the Caveator has discovered a loan agreement between the deceased and a company controlled by Craig called Combined Panels Pty Ltd for $180,000 dating from February 2013. The loan does not appear in the inventory of assets and liabilities.

The evidence given by Robert in support of these matters is very weak. The evidence given by Patricia, Craig, Alan Clarke and Michelle McCallum (Craig's former partner), however, establish facts that show there is no call for any further investigation. There is no proper basis for any of the matters alleged to give rise to a conflict between interest and duty on the part of the plaintiffs. In arriving at this assessment, I set out below the facts relating to the sale of the Broadbeach property, the payment of a part of the proceeds of that sale into the Munro Pension Plan, what became of those funds, the transfer of the Ivanhoe property to Patricia, the purchase of the Eaglemont property in the name of the deceased on trust for Craig, the winding up of Munro Taxi Service and the payment of taxi licence compensation. In considering these matters a number of matters need to be borne in mind:

(a) that Patricia was the deceased's wife of 49 years;

(b) that there is no evidence of disharmony between them;

(c) the evidence referred to below as to the testamentary capacity of the deceased, in particular in relation to the periods before April 2015, show that there is no reason to think he lacked testamentary capacity at the time he gave instructions for the will nor when he executed it;

(d) the evidence given by Alan Clarke that deposes to his long friendship with the deceased and that he considers it an honour to be executor of the estate of the deceased. He swears that he believes he does not have any conflict of interest and that if made executor he will be dedicated to acting fairly and according to the deceased's wishes. In short, having regard to the mere assertion by Robert on behalf of the Caveator that Alan Clarke is in some unstated way tainted by his long close personal relationship with Patricia, there is no evidence to contradict the evidence given by Alan Clarke that he is not in any position of conflict and will carry out the duties of executor and trustee faithfully and properly (see [122] below as to the evidence given by Alan Clarke).

Broadbeach property

The Broadbeach property was purchased in February 2015 for the sum of $1,825,000. It was purchased in the names of the deceased, as to 7/10's and Craig as to 3/10's, as tenants in common. The deceased borrowed from the National Australia Bank Ltd (NAB) to fund the purchase price. In about December 2016, the Broadbeach property was sold for $1,850,000. $360,979 of the net proceeds of sale were transferred to the P M Munro Pension Plan (Munro Pension Plan) (and subsequently, some of those funds were transferred to the joint account between the deceased and Patricia and used to pay off a mortgage over the Ivanhoe property).

It is not known whether Craig contributed to the purchase price, but the inference is that he did not, as none of the proceeds of the sale were paid to him. It is inevitable that to sell the property Craig had to sign or authorise the signing of the transfer to the purchaser, so his consent or acquiescence in the way the net sale proceeds were dealt with is strongly to be inferred. It is likely that the deceased or Patricia, or both, contributed to the purchase price as common experience tells that it is unlikely the NAB lent 100% of the purchase price. It is likely that the proceeds of the sale that went into the Munro Pension Plan is, indirectly, the product of funds contributed to the purchase by one or other, or both, of the deceased and Patricia.

The plaintiffs have made the usual affidavit in support of their application for probate in which they undertake to properly administer the estate in accordance with law. In submissions made at the hearing, Counsel for the plaintiffs accepted, in open Court, that some thought by the executors needs to be given to how the net sale proceeds of the Broadbeach property is dealt with, and some action may need to be taken either to affirm it as correct or to say that the net sale proceeds should not have gone into the Munro Pension Plan.[80] That may be so, but other evidence supports the proposition that those proceeds went, ultimately, to pay off the mortgage over the Ivanhoe property and thus to provide a secure place of living for both the deceased and Patricia. This is the very thing that a wise and just testator should have done.
[80]Transcript of Proceedings, 23-24.

I am not satisfied that the facts exposed in relation to the Broadbeach property, which are in the main facts revealed by Patricia voluntarily, give rise to a basis to pass over her, or Alan Clarke, as an executor of the will of the deceased. There is a matter to be investigated, but there is no reason to think that the executors will not do so appropriately.

Munro Pension Plan

In Robert's affidavit he deposes that, based on information the deceased told him at an unspecified time, Patricia has more than $1,300,000.00 in superannuation and the deceased had several million. There was no mention of superannuation in Patricia's first affidavit. The implication is that Patricia is hiding vast sums.

The evidence given in Patricia's second affidavit explains the situation adequately, in my view. The Munro Pension Plan is a superannuation fund the sole member of which is Patricia. The deceased was co-trustee of it with Patricia. There is no other trust or superannuation fund of which the deceased was appointor, trustee (including director of a trustee company), beneficiary or discretionary object.

Patricia's second affidavit gives evidence, supported by her bank statements and a Member Statement for the Munro Pension Plan, that there is little remaining of the wealth of the deceased derived from owning and leasing taxis. Patricia's superannuation is modest and she swears the deceased had none at the date of his death. The moneys paid into the Munro Pension Plan from the sale of the Broadbeach property, together with moneys from the Taxi Services Commission (TSC) for transition assistance arising from the cancellation of taxi licences held by the Munro Pension Plan and moneys from the joint account of the deceased and Patricia, went towards discharging a debt of $600,000.00 owing by the deceased to NAB which was secured by a mortgage over the Ivanhoe property. That debt was incurred to purchase taxi licences in 2005 in the name of the deceased and Patricia as trustees for the Munro Pension Plan.

The Caveator submits, however, that the transactions resulting in the discharge of the mortgage over the Ivanhoe property derived from both the sale of the Broadbeach property and receipts of transition assistance from the TSC, occurred shortly before the death of the deceased in circumstances where it is unlikely that he had the capacity to affect them. The critical events are:

(a) the proceeds of the sale of the Broadbeach property were paid to the Munro Pension Plan on 23 December 2016;

(b) the receipt of $350,000 from the TSC was paid into the Munro Pension Plan on 6 September 2017 (and this sum was in fact payable to the Munro Pension Plan for licences it held);

(c) $500,000 was transferred from the Munro Pension Plan into the joint account between the deceased and Patricia on 12 October 2017; and

(d) $600,000 was transferred from the joint account to the NAB mortgage account relating to the Ivanhoe property on 12 October 2017.

Counsel for the Caveator submitted that the funds used to pay off the NAB mortgage may have been the deceased's personal moneys, ultimately, and they went to pay off a mortgage that was clearly to benefit Patricia. Although Patricia's evidence is that the deceased was relieved that the money would clear the debt on the Ivanhoe property, Counsel for the Caveator submitted that this occurred a month before the deceased died, when he was on his way to the nursing home (so to speak), clearly having been diagnosed with dementia (nearly) two years earlier. The question arises whether or not he had any understanding at all of this transaction to pay off the NAB mortgage? Counsel submitted that although the money, if it fell into residue, was left to Patricia under the will, she took the decision a month before he died to perform a significant transaction that has now resulted in no money being left in this estate.

It was submitted that this gave rise to an obvious conflict. Whether or not these transactions can be overturned is a secondary issue. The first issue is should Patricia be passed over? And is there a reasonable prospect of the Caveator succeeding in that application? The Caveator submitted that there clearly was such a reasonable prospect.

There are a number of responses to these submissions. First, the only money that may be traceable to the deceased is the net proceeds of the sale of the Broadbeach property, if the inference is drawn that the deceased contributed money to that purchase which flowed through to the proceeds of its sale, which may or may not be the case. The other moneys were derived from the Munro Pension Plan controlled by both the deceased and Patricia, as trustees, but beneficially belonging to Patricia, and from the joint account. Patricia was, prima facie, entitled to the benefit of the moneys standing to the credit of the Munro Pension Plan. As joint proprietor of the joint account, Patricia was entitled to deploy the moneys standing to its credit as she wished. Thus the substance of the submission that Patricia used the deceased's money to pay off the NAB mortgage and thus depleted what might have passed into his estate is, at best, speculative and on the present facts has no proper basis.

Second, that such conflict as arises from these facts is not of a kind that should justify passing over named executors who wish to take a grant. An unsubstantiated allegation of misconduct, or a suspicion of such misconduct, is very different from proved misconduct. As Windeyer J said in Uniting Church in Australia Property Trust (NSW) v Millane[81] it is undesirable for the administration of estates to be delayed by having to determine in prior proceedings, or perhaps the same proceedings, disputed claims. If the plaintiff's misconducts themselves then they can be removed. If they do not consent to the bringing of proceedings, the Court can allow proceedings to be brought. In ordinary circumstances, the proper course is to assume that a named executor will act properly and not to have some prior determination of proceedings which will properly arise in the administration of the estate of the deceased person.
[81][2002] NSWSC 1070; See also Re Crane [2005] SASC 379, [30], where Besanko J summarises the effect of the decision.

Ivanhoe property

When Patricia met the deceased, he was the sole proprietor of the property at 4 Nyorie Court, Ivanhoe, Victoria (Ivanhoe Property). That property was their home throughout their lives and Patricia continues to live there. In about July 2012 the deceased told Patricia that his former solicitor suggested to him that he should transfer the property into their joint names, so that if anything happened to the deceased, Patricia would be secure in the home and protected. The deceased told Patricia that he agreed with the solicitor and the decision was made to transfer the property from the deceased to the deceased and Patricia as joint tenants. This was undertaken on 25 July 2012 and the consideration stated was 'natural love and affection'. When Patricia enquired why the property could not be transferred into her sole name at that time, she was told by the deceased's solicitor that there was a loan of $600,000 secured against the Ivanhoe property and this prevented it being transferred into her sole name. It was a loan, Patricia was told by the deceased, to buy taxi licences. At the time of the transfer, Patricia swears that the deceased was healthy (for his age) and had no difficulties with his memory or mental state. She believes that he was in a clear frame of mind when he made his decision to make the transfer.

The Caveator contends that there is a matter to be investigated, notwithstanding the tolerably clear evidence referred to above. He raises the questions who gave the advice? Was the advice written? If so where is it? He also contends that the transfer to their joint names is a gift to Patricia, and asks why did it take from the time of their marriage in 1968 to the time of the transfer in 2012 to do this? He contends it could raise an issue of equitable undue influence, Johnson v Buttress[82] style undue influence, where one party occupies a position naturally involving an ascendancy or influence over the other and the presumption arises that when that person takes a gift, it is incumbent upon that person to show that it cannot be ascribed in the quality of their relationship, and it's a shifting onus in that case.
[82](1936) 56 CLR 113.

The Court of Appeal has recently referred to the distinction between undue influence with respect to inter vivos transactions and what is necessary to establish 'undue influence' with respect to testamentary transactions. The former is a doctrine of equity; the latter is traced back to the ecclesiastical jurisdiction.[83] Undue influence, in a probate context, is constituted by conduct that overbears the will of the testatrix so that he makes the will without intending and desiring the disposition made thereby. The circumstances must be such that the disposition is not regarded as the free and voluntary act of the testator. The volition of the testator must be overpowered so that his mind does not accompany his act in making the will. To prove undue influence in a case such as this, it must be shown that the testator did not intend and desire the disposition. It must be shown that he has been coerced into making it.[84] There is no such evidence, or even a hint of it.
[83]Montalto v Sala [2016] VSCA 240, [25] – [27] (Montalto); Trustee for the Salvation Army (NSW) Property Trust t/as the Salvation Army v Becker [2007] NSWCA 136, [70]–[76] (Trustee for the Salvation Army).
[84]Wingrove v Wingrove (1885) 11 PD 81, 82–3; Trustee for the Salvation Army [2007] NSWCA 136, [63]–[64]; Hall v Hall (1868) LR 1 P & D 481, 482; Tobin v Ezekiel (2012) 83 NSWLR 757, 770; Montalto [2016] VSCA 240, [26]-[27].

Any assessment of the evidence of advice given and received about the Ivanhoe property must be judged, as I have said, against fact that Patricia was a spouse of 49 years. The transfer to the joint names of the deceased and Patricia is in accordance with what one would expect of such a long standing and apparently harmonious marriage. If it had not happened, the likelihood is that in a contested pt IV proceeding brought by Patricia against the estate, she would receive the property.

There is no basis whatever to question, or investigate, this transaction.

Eaglemont property

The Eaglemont property was purchased at auction on 30 August 2003 by Craig. He paid the deposit payable under the contract that he signed on that day. He attended the auction with his then partner, Michelle McCallum, two friends and Patricia. The deceased did not attend. After he had signed the contract he spoke with the deceased and his conveyancer about protecting his assets. He says he knew his relationship with Michelle was not going to last. At the time, a person was threatening to sue him on another issue. He wanted to ensure his assets were protected from any claims against him. He was told by the conveyancer that the house could be transferred into the deceased's name at settlement, even though it was beneficially Craig's.

Settlement of the purchase of the property occurred on 5 November 2003 and the deceased was subsequently registered on title on 6 November 2003. It was subject to a mortgage to the NAB. Craig deposes that in order to pay the balance of the purchase price at settlement, he obtained a Homeside Reducible Mortgage Loan for the amount of approximately $725,000. Craig gives evidence that he spoke often with the deceased about the Eaglemont property and the agreement and common intention they had that the deceased would hold it on trust for Craig. The agreement was Craig would pay off all the monies due under the mortgage and that ownership of the property would be transferred to him upon the death of the deceased. This agreement is reflected in the various wills made by the deceased referred to above.

From the settlement date, Craig has paid all the mortgage payments and all the expenses relating to the Eaglemont property. The deceased did not financially contribute to it in any way. In June 2006, the NAB mortgage loan was refinanced with a NAB fixed rate home loan National Choice Package for $820,000. The loan was in the name of the deceased, but Craig paid the monies due under it. Craig produces evidence of the payments made. He also paid all rates and taxes associated with the property. Craig lives in the Eaglemont property with his family.

Patricia agrees with Craig's recollection of the events regarding the Eaglemont property, its purchase and the fact that the deceased has never contributed financially to it. She states that she made the affidavit of executor and verified the inventory of assets as including the Eaglemont property because it was in the deceased's name and so she thought it should be included, even though she had always understood that it was Craig's house.

Michelle McCallum makes an affidavit in support of the facts deposed to by Craig in his affidavit. She confirms attending the auction at which the Eaglemont property was purchased by Craig. She witnessed Craig sign the contract of sale as purchaser solely in his name. She says that the property was always Craig's house and that he paid the mortgage. She moved into the property with Craig in November 2003, and subsequently broke up with him in about February 2004.

Robert deposes to his belief that Craig did not have the financial capacity to buy the Eaglemont property and needed to obtain funds from the deceased. The only basis for this assertion is an example of a loan agreement between the deceased and Craig, as director of Combined Panels Pty Ltd, dated 5 February 2013 pursuant to which Craig borrowed $180,000 for a period of 28 months. Interest at the rate of 7 per cent was payable on the loan. He notes that the loan does not appear in the inventory of assets and liabilities prepared by the plaintiffs.

Robert also points to the fact that Craig lodged a caveat on the title to the Eaglemont property on 19 May 2017, before the deceased died, claiming a freehold estate as purchaser under a contract with the deceased dated 6 November 2004. Craig's evidence pointed to the deceased holding title to the Eaglemont property on a resulting, implied or constructive trust, within the meaning of s 53 of the Property Law Act 1958 (Vic) (PLA). Counsel for the Caveator submitted that the claim in the caveat is inconsistent with the property being held on such a trust, and in any event it could not arise from the facts, referring to Calverley v Green[85] and Baumgartner v Baumgartner[86] as authority for the proposition that contributions to the purchase price rather than contributions to the mortgage payments is determinative of the existence of a resulting trust, but without developing the submission.
[85](1984) 155 CLR 242.
[86](1987) 164 CLR 137.

The facts disclosed by Craig and Patricia show a classic resulting trust. Where a purchaser of property directs that it be transferred into the name of another and there is nothing to indicate that that person should take the property beneficially, the law presumes the purchaser intended to retain the beneficial interest which has not been disposed of. Resulting trusts do not need to be in, or evidenced by, writing as s 53(2) of the PLA exempts resulting, implied or constructive trusts from the requirement of writing signed by the party to be charged.[87]
[87]John Dyson Heydon and Mark Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [12-01], [12-10].

The deceased's prior wills made in 2011, 2013 and 2014 (see above at [56]) expressly declare the property to be held on trust for Craig. Counsel for the plaintiff's submitted that these declarations in writing signed by the testator were sufficient to satisfy the requirements of s 53(1) of the PLA. That submission was also not further developed.

So far as a constructive trust may be raised, although the High Court of Australia has authoritatively stated that the basis of constructive trusteeship in cases of contributions to property or a relationship rests in unconscionable conduct, Australian courts continue to entertain arguments, usually as an alternative to the argument based on unconscionable conduct, based on the previous approach of imposing a constructive trust according to the actual or inferred (but not imputed) common intention of the parties.[88] The relevant common intention may be derived from the evidence of express agreement or the making of admissions, or it can be inferred from, for example, the making of contributions to the cost of property, or meeting expenses in maintaining it.[89] The latter highlights that a common intention constructive trust may arise from an agreement or common intention arising after acquisition of the relevant property.[90]
[88]See for example Green v Green (1989) 17 NSWLR 343 (Gleeson CJ).
[89]Allen v Snyder [1977] 2 NSWLR 685, 690-1 (Glass JA), 698 (Samuels JA); Vedejs v Public Trustee [1985] VR 569, 572-3 (Nicholson J); Shepherd v Doolan [2005] NSWSC 42; [37], [38] (White J); Williams v Parris [2008] All ER (D) 235.
[90]Director of Public Prosecutions v Ali (No 2) [2010] VSC 503, [75] (Hargrave J). See generally LexisNexis Butterworths, Halsbury’s Laws of Australia, online edition, (at 20 April 2012), [430-640].

Robert's affidavit contains no admissible evidence as to the beneficial ownership of the Eaglemont property. It merely raises an argument that based upon an unsubstantiated belief that Craig could not afford to buy the property, then the deceased must have done so and therefore there is a matter to be investigated. But it is clear that Craig and his family live in the property. There is no indication of a dispute that Craig and his family are in possession of the Eaglemont property, and that Craig has been in possession of it since its acquisition. Patricia's evidence is that in the family it was always understood to be Craig's house. Craig's evidence as to the circumstances of its purchase and his payment of the deposit, mortgage repayments and all the rates and taxes applicable is substantiated by documentary evidence and is uncontroverted.

The Caveator gives no evidence and it is reasonable to expect that if there was any basis to the assertion in the caveat that the deceased held any beneficial interest in the property the Caveator would have made an affidavit giving the evidentiary basis. This leads to an inference that the Caveator's evidence would not have assisted his case.[91] There was no evidence or submission explaining why the Caveator has not given evidence in support of his caveat, nor any evidence or submission that the Caveator was not able, or available, to give evidence to support his caveat.
[91]Jones v Dunkel (1959) 101 CLR 298, 308, 312, 320-1.

In the final analysis, the Caveator rested his case on the proposition that the matter should be fully investigated and Craig cross-examined. There is just no point in this. There is nothing to suggest that there is any doubt about Craig's beneficial interest in the Eaglemont property.

There is therefore no proper basis for alleging a conflict between interest and duty in relation to the ownership of the Eaglemont property. It cannot, in the circumstances disclosed, be seriously contended by the Caveator that the executors, properly advised, would resist Craig's claim.

Munro Taxi Services

No evidence is given by Robert or the Caveator as to this company. The grounds assert that the Caveator and his sister did not receive any payments despite holding shareholdings in that company. There is no factual basis disclosed for that assertion, nor is there any basis for the submission that there is a risk that the winding up will not be investigated and thus there is a conflict of interest arises out of the winding up of the company. In short, there is no proper basis for alleging a conflict.

The evidence given by Patricia, based upon a search of the Company at the Australian Securities and Investments Commission (ASIC) and her own investigations, is that on 15 June 1962, the deceased's father (Ido Munro), the deceased and his sister, Olga Munro, incorporated Munro Taxi Service and became directors of it. Ido Munro owned four taxi licences before the company became incorporated. On 27 June 1962, the deceased became a shareholder of the company. He operated the company for over 20 years. His father died in the early 1970s and his shareholding was passed to the deceased. Patricia became the secretary of the company in 1969 and a director in 1974. Brent, Lindy and Craig were shareholders in the company as were the deceased and Patricia. Neither Brent, Lindy nor Craig ever worked for the company. Then in November 2004, the deceased transferred five taxi licences from the company to himself. Patricia has found documents that show the transfers were undertaken (and they bear her signature). As at the date of transfer, 22 November 2004, eight licences were held by the deceased and the company had been rented out to drivers. By 2017, the value of these licences had significantly dropped. On 25 May 2005, Alan purchased two more taxi licences from Silver Top Taxi Service in the name of A & P Munro ATF the Munro Pension Plan. As at 26 May 2005, these taxi licences were worth approximately $376,200 each. The Ivanhoe property was mortgaged to purchase these taxi licences.

On 7 June 2005 the company began the process of being wound up. Patricia was not involved in the decision making and has been unable to find documents relating to its winding up apart from those available through an ASIC search.

Patricia notes that Uber was introduced to the Melbourne market in about October 2012 with the effect of substantially reducing profits of the taxi industry as a whole. At the date of the deceased making his final will in February 2015, the taxi licences held were worth approximately $298,000 each on the secondary taxi licence market. In about September 2016 the deceased and Patricia were advised that changes in regulation of the taxi industry would have the practical effect of the taxi licences held by the deceased being virtually worthless.

The matter raised seems to only give rise to a claim by the Caveator and Lindy against the company, or its liquidator. There is nothing to suggest that there is the possibility of a claim of wrongdoing against the deceased and therefore against the estate of the deceased. In any event, it is likely to be too late to complain about any failure properly to compensate shareholders in the winding up, if that was the case. But there is no evidence on the point, and furthermore, what the company search of Munro Taxi Service shows is that whilst the Caveator and his sister had a 100 shares each out of 300, the deceased held many thousands of A class shares. In order to come to any conclusion about whether the Caveator and Lindy had any entitlement at all, one would need to know what the Constitution of the Company provided, if anything, in relation the disposition of its assets on a winding up and what the accounts of the company showed.

Taxi licence compensation

In August 2017, the deceased and Patricia were notified by the TSC that they were going to be paid $600,000 in compensation for the cancellation of 11 taxi licences under the transition assistance program established by the Victorian Government. The advices regarding these payments given by the TSC show that the holders of the various licences were Alan and Patricia Munro as trustees for the Munro Pension Plan and the deceased personally.[92]
[92]Exhibit PM-6 to Patricia’s first affidavit.

On 31 August 2017, Patricia, as trustee for the Munro Pension Plan, received the first instalment of $350,000 from the TSC. On 5 September 2017, the joint bank account of the deceased and Patricia received the second instalment of $250,000.[93] In fact the advices from the TSC show that what Patricia describes as the first instalment of $350,000 was in respect of two separate licence holder accounts held by the Munro Pension Plan whilst the second instalment was in respect of the licence holder account in the name of the deceased alone.
[93]Exhibit PM-7 to Patricia’s first affidavit.

Patricia swears that the deceased and she decided to use these receipts to pay the mortgage secured over the Ivanhoe property which had been borrowed to buy taxi licences. In the result, on 12 October 2017, the NAB mortgage over the Ivanhoe property was paid out in full and the account was closed.

After the death of the deceased, the Department of Economic Development, Jobs, Transport & Resources paid the sum of $100,000 to Patricia out of its Fairness Fund.[94] This money was paid into the joint account of AG & P Munro.
[94]In her first affidavit Patricia states that the money was provided to the deceased. However, the letter with which the payment was made was directed to Patricia alone.

It is clear from the evidence that the impact of competition in the taxi industry from ride-sharing services (Uber in particular) had a serious impact on the value of taxi licences. The introduction of Commercial Passenger Vehicle Industry Act 2017 (Vic) (CPVI Act), which was foreshadowed in August 2016, had a devastating effect on the value of perpetual taxi licences. It wiped out their value entirely. What was left was a right to participate in a transitional assistance scheme under which compensation payments were made to those who lost their taxi licences and the possibility of applying for further moneys in a Fairness Fund.

The proceeds of the transitional assistance were applied either to the Munro Pension Plan, as owner of licences, or the joint account of the deceased and Patricia, in the case of licences owned by the deceased. The only matter that gives rise to any suggestion that a conflict arises is the payment of the $100,000 by the Fairness Fund to Patricia. She deposed, as I have said, that it was a payment to the deceased, whereas the exhibited document with which the Department sent the funds was directed to her personally. The investigation of this matter is minor and does not warrant passing over Patricia, or for that matter, Alan Clarke. The executors are bound to give it proper consideration and the evidence leads to the conclusion that they will do so.

Loan by the deceased to Combined Panels Pty Ltd

Another matter to be investigated that is raised by the Caveator in Robert's affidavit, but not referred to in the grounds or particulars of the caveat, is a loan between the deceased and a company controlled by Craig called Combined Panels Pty Ltd for $180,000 dating from February 2013. The loan does not appear in the inventory of assets and liabilities.

Counsel for the Caveator submitted that it is another issue that bears out the conflict between interest and duty for Patricia, as an executor. She might have to investigate the existence of the loan where it involves her normal loyalty to her child, Craig, in opposition to the children of the deceased who are not her children. There is no mention of this loan in Patricia's second affidavit, an affidavit answering matters advanced in Robert's affidavit.

The observations of Ashley J in Monty v Delmo are apt to the situation disclosed by the loan agreement between the deceased and Combined Panels.[95] The intention of the testator that the executors be particular persons should not lightly be set aside. In this case, the will itself shows that the testator was aware that his or her executors would face a potential conflict of duty and interest. The forgiveness of loans to Craig is expressed in the will of the deceased.[96] Patricia, one of the executors, is also a beneficiary and the mother of Craig, whose debts to the deceased are forgiven. It would not be right without more, to pass over Patricia as an executor.
[95]Monty v Delmo [1996] 1 VR 65, 83.
[96]It would appear that the loan in question was made to Combined Panels Pty Ltd, so prima facie one would conclude that it was not forgiven by the testator.

The failure to reveal the debt, if it is a present debt to the estate of the deceased, in the inventory of assets and liabilities, is unexplained. That is not enough, in my view, to pass over Patricia as an executor. There is no basis at all to pass over Alan Clarke.

Passing over the executors - conclusion

In essence, the application to pass over the plaintiffs on the basis of a conflict of interest and duty depends on whether there is a case that the plaintiffs cannot be trusted to do what they have sworn to do, because of Patricia's and Craig's interest in the estate of the deceased. The plaintiffs submit she is able to discharge her role properly, all the more so because there is another and independent executor, Alan Clarke. Patricia has been open and frank with the Court. A good deal of the material relied on by the Caveator is derived from the disclosures Patricia has made. She has disclosed all the transactions to the Court, heard the evidence and submissions against her and knows what her role is as executor. She has a co-executor who, despite an unfounded accusation of partiality, has made a forthright affidavit in which he has satisfied me that he has no interest in the estate or in maintaining an interest of Patricia or Craig if it is not fully justified.

Is there a case that the deceased lacked testamentary capacity?

It is remarkable that the Caveator has given no evidence in support of his caveat. The evidence given by Robert is thin and unconvincing. In contrast, the evidence to support the capacity of the deceased at the time he made his will is substantial and convincing. True it is, that the solicitor's file note is brief and includes no details of the circumstances surrounding the execution of the will. But that is consistent with the solicitor's suspicions not being excited by anything unusual. And that this was likely to be so is confirmed by the very similarity in the general provisions of the last will of the deceased when compared with the penultimate will and earlier wills made by him. They are remarkably consistent in their general approach, varying in the main in minor details of the number of taxi licences to be given to either the caveator or to Craig, and a variation in the bequests to Lindy. The latter are clearly explained.

The Caveator maintained that:

(a) the deceased's death certificate shows that the cause of death was 'Alzheimer's Disease- 2 years';

(b) the inference is that it was not on the dot of two years that the Alzheimer's symptoms were occurring with a man in his mid-90s. That is enough to establish a prima facie case on capacity to warrant further investigation;

(c) the evidence really comes out in the discovery process, in particular with the discovery of medical evidence, and that the Patricia's evidence has 'cherry picked' the medical evidence. There is more that has not been disclosed.

The Caveator in his particulars states that he 'will give evidence that the deceased was in cognitive decline for many years prior to his death'. In his affidavit, Robert merely speculates as to the ability of the deceased to comprehend the impact on his financial position of the decline in the value of taxi licences from his observation of the deceased's short term memory after 2012.[97] There is no other evidence apart from that given by Patricia, and by her on information and belief from the deceased's medical practitioners, and by Alan Clarke.
[97]Robert’s affidavit, [9].

The plaintiffs rightly objected to the evidence of Robert as to the capacity of the deceased. It is vague and amounts to speculation. But even if some weight were given to that evidence, particularly having regard to the evidence of Patricia that the deceased suffered confusion for some two weeks in November 2014 and was diagnosed with possible dementia in April 2015, that does not point to testamentary incapacity at the time of giving instructions for, or signing, the will.

To adopt the language of Banks v Goodfellow,[98] as quoted in Bailey v Bailey,[99] the deceased's memory may have been imperfect; it may have been greatly impaired by age or disease; he may not be able at all times to recollect the names, the persons, or the families of those with whom he had been intimately acquainted; may at times ask idle questions, and repeat those which had before been asked and answered, and yet his understanding may be sufficiently sound for many of the ordinary transactions of life. The question is not so much what was the degree of memory possessed by the testator, as this: had he a disposing memory? Was he capable of recollecting the property he was about to bequeath; the manner of distributing it; and the objects of his bounty? To sum up the whole in the most simple and intelligible form, were his mind and memory sufficiently sound to enable him to know and to understand the business in which he was engaged at the time he executed his will? It is 'a practical question, one in which the good sense of men of the world is called into action, and … it does not depend solely on scientific or legal definition'.
[98](1870) LR 5 QB 549, 565-7.
[99](1924) 34 CLR 558, 566, noting that Knox CJ and Starke J dissented in the result.

The evidence is that in November 2014, the deceased developed acute confusion for a period of about one to two weeks. He saw his regular general practitioner, Dr Ken McHenry. Doctor McHenry recommended several investigations, including a CT scan of the deceased's brain but no cause of his confusion was revealed in the tests.

On 13 January 2015, the deceased went to see Dr McHenry to be examined for his capacity to change his will. Doctor McHenry reported to the solicitor (Mr Tony Lava of Glenister and Associates) that he (Dr McHenry) had performed a mini-mental assessment for which the deceased scored 25 (out of 30). He had deficits in his short term memory. He appeared, however, to have a good understanding of his current financial situation and the reasons for changing his will.

Patricia says that the deceased's usual solicitor (Mr Lava) was very unwell so they went instead to Adams Maguire Sier, Lawyers, in East Ivanhoe. The deceased attended these solicitors on 13 February 2015 to give instructions for a new will. Patricia went with him to their offices but sat outside in the waiting room during a substantive part of the meeting. She produces the solicitors file note of the attendance, which is brief. She says that by this time, the deceased's confusion was lifting and his memory had improved.

Patricia also produces a letter from Mr Maguire of Adams Maguire Sier dated 18 January 2015 with which that firm sent a draft of the will to the deceased. It explains that he does not see it necessary to 'make comment' as was done in the previous will in relation to the varying benefits received by children or grandchildren as those issues do not occur within the new will. He also 'confirms' that there is no need to mention any other specific assets as they will form part of the residue that passes to Patricia. It is a brief letter that only makes sense against a background of knowledge of previous wills and discussions that must have taken place at the time of the deceased giving instructions.

The last will of the deceased was signed by him on 24 February 2015. The deceased attended the solicitors with Patricia. Patricia sat outside when the deceased 'read and signed it'. The solicitors file note of the event states 'Alan understood the will and acknowledged that to me'.

Patricia produces a letter from Dr McHenry dated 8 May 2018. In that letter Dr McHenry says that he was the treating general practitioner for the deceased for at least 15 years before his admission to Dowell Court in October 2017. He had been generally well prior to November 2014 when he developed a one to two week history of acute confusion and reduced vision in his right eye. He was admitted to the Epworth Hospital and several investigations including a CT scan of the brain did not reveal a cause for his confusion. Subsequently, he was seen by a geriatrician, Dr Wee, on several occasions from December 2014. Initially he remained confused but subsequent review by Dr Wee on 27 February 2015 noted a significant improvement in his mental state. In addition, Dr McHenry records that he performed a mini-mental examination on 13 January 2015 in which the deceased scored 25 out of 30 and was able to state to him that he wished to make alterations to his will. Dr McHenry judged that he was able to understand the implications of these changes. Dr McHenry also records that the deceased had also been seen by his ophthalmologist, Dr Peter Meagher, in December 2014 and was found to have good vision in his left eye despite poor vision in his right eye due to a bleed. Unfortunately after a fall in April 2015 he again deteriorated and was diagnosed as possibly having Alzheimer's disease in May 2015 by Dr Wee, who commenced him on medication for this.

As the letter from the Dr McHenry states, the deceased was diagnosed with 'possible' dementia in or about May 2015. At that time, his dementia was categorised as 'Sundowners', meaning that he forgot things more in the evening than during the day. He was managed with Reminyl and Warfarin. To Patricia, he appeared to be well. His short term memory was affected, but his long term memory was fine. He would happily meet their friends and carry on conversations without any signs of confusion or forgetting.

The deceased's eyesight generally deteriorated as he got more elderly. He had worn glasses since 2011. On 16 December 2014, he attended Dr Peter Meagher's rooms in relation to his eye condition. Doctor Meagher was unable to provide a precise diagnosis but his provisional diagnosis at that time was of 'bilateral ischaemic optic neuropathy' (an eye bleed). The letter produced from Dr Peter Meagher dated 17 December 2014 shows that the vision in his right eye was 6/120 and in his left eye, 6/7.5, which shows relatively normal vision in his left eye. Patricia says that until his death, the deceased was able to read with his glasses and didn't appear to have any difficulty in getting around.

Alan Clarke also gives convincing evidence in support of the deceased's testamentary capacity, both before and after execution of the will. His evidence is to the following effect:

(a) he has reviewed Robert's affidavit and is concerned by, and does not agree with, the suggestion that he would be in a conflict of interest as executor due to his close personal relationship with Patricia;

(b) the deceased was a dear friend of his. They first met at Moomba in the 1950s and remained friends throughout their lives. He was the deceased's friend before and during his marriage to Dawn Forbes, her death, and his marriage to Patricia in 1968. He was the deceased's best man at his wedding to Patricia;

(c) he has always supported and been loyal to the deceased throughout their friendship. They talked with each other about many aspects of their lives, both business and personal;

(d) whilst it is correct that he became friendly with Patricia throughout her long marriage to the deceased, this was in the normal way that you'd become friendly with a close friend's wife;

(e) he was honoured when the deceased asked him to be executor in or about 2014. He happily agreed. On that occasion and on a number of subsequent occasions, the deceased spoke to him about the distribution of his assets on his death. He has read the deceased's will and the distribution contained in it accords with those discussions;

(f) he spent a lot of time with the deceased in his later years. In 2014, he and his wife, with Patricia and the deceased, went on a cruise from Amsterdam to Budapest. The deceased did not appear to have any difficulties with his memory or decision making at the time. The deceased was very alert and aware during the cruise and he did not notice anything different about the deceased's memory or behaviour;

(g) from his observations of the deceased, his mind remained strong, retentive and alert until about early 2016. He then observed that the deceased had short term memory issues. On major history issues, however, the deceased's recollection remained clear and detailed until about six months before his death in November 2016. He did not notice any change to the deceased's intentions or long term memory;

(h) up until the end of the deceased's life, he observed that the deceased was able to read with the help of his glasses;

(i) he does not believe he has any conflict of interest relating to the deceased's estate. If made executor of the estate, he will be dedicated to acting fairly and according to the deceased's wishes.

Counsel for the Caveator submitted that I should infer that the deceased's dementia commenced earlier than April 2015, as, in the nature of the condition, it does not happen overnight. It is a progressive disease. That may be so. It is a matter of human experience, a matter referred to in the authorities I have quoted above, that it is not so debilitating, so pervasive or incapacitating that in its early stages it precludes a proper appreciation of the matters a testator must know to make a valid will.

Having regard to all the evidence, and the lack of any admissible evidence from the Caveator to substantiate this ground of the caveat, I am satisfied that there is no proper basis to maintain opposition to the grant of representation to the plaintiffs on the ground of a want of testamentary capacity either at the time the deceased gave instructions or when he executed his will. There is no real prospect of the Caveator establishing a case, and there is no basis for the matter to go to trial, on the basis of a lack of testamentary capacity.

Is there a case that the deceased did not know and approve the contents of the will?

The particulars of this ground depend upon facts for which there is little or no support. It is said that when the will was made, the deceased was aged, infirm and suffering from dementia. That allegation is contradicted by the evidence given by Patricia and, on information and belief, by Dr McHenry, as well as by Alan Clarke. The letter from Dr McHenry is contemporaneous and was directed to the former solicitor of the deceased.

It is then said that when the will was made the deceased was blind and the attestation clause of the will does not suggest that the will was read over to the deceased. Once again, the evidence produced by Patricia, and on information and belief from the deceased's ophthalmologist, shows definitively that the deceased was not blind. Moreover at least in one eye, his vision was nearly normal.

It is then said that the last will departs 'radically' from the deceased's penultimate will in that it makes less provision for the Caveator and for Lindy. Under the deceased's last will, the Caveator and Lindy had one taxi licence plate, or cash to the value thereof, each. Under the penultimate will, the Caveator received three taxi licences or the equivalent cash, plus $35,000 and Lindy received $200,000. That is a significant but not a radical difference, given the explanation in relation to Lindy attached to the will.

It is then said that when the deceased signed the last will he was 93 years of age, vulnerable and affected by Alzheimer's disease. He was declining both physically and mentally. The will was changed to favour Patricia and she was a person that possessed great influence and authority over the deceased at that time. The matters to which reference is made in relation to the testamentary capacity of the deceased are relevant here and show that there is no basis for these assertions.

My examination of the terms of the will and the penultimate will and wills, and my account of them given above, reveals that there is no radical change, let alone any significant change in favour of Patricia. She has always received the residuary of the estate. True it is that Lindy lost her legacy of $200,000 but attached to the will is a statement explaining that change.[100] Moreover, in the wills made in 2011, 2013 and 2014 the deceased states that Lindy had little contact with him.
[100]Exhibit PM-1 to Patricia’s first affidavit.

Having regard to the fact that a medical report was obtained shortly before the will was made, that a later medical report by the same general practitioner provides further context concerning the deceased's cognitive condition and capacity at the time of making his will, that the deceased took independent advice and that the solicitor's file note has been disclosed, answers in a convincing and substantial way any suspicion that might be raised by the cause of death of the deceased and the very slight evidence given of his lack of testamentary capacity. The diagnosis of dementia was made after the making of the will, in April or May 2015.

The evidence, on information and belief, from Mr Maguire, who is one of the witnesses to the execution of the will, is in a file note he recorded at or about the time of execution. He states, simply 'Signed Will - Alan understood the will and acknowledged that to me'. That is a reasonable forecast that the solicitor will give evidence that either through the deceased reading the will, which is only two pages, or having it read to him, the deceased knew and approved the contents of the will.

Another particular of this ground is that the will was made by Adams McGuire Sier, who were not the deceased's usual solicitors. All the previous wills were made by Glenister & Associates. That issue has been found to be of significance in other cases and the Caveator relied particularly on Veall v Veall,[101] Brown v Guss[102] and Schrader-v-Schrader.[103] A testator's long term solicitor knows his testamentary wishes, him and his family, so a change of solicitor in and of itself has been found to be a suspicious circumstance.
[101][2015] VSCA 60, [199].
[102][2014] VSC 251, [376].
[103][2013] EWHC 466 (Ch), [90].

The change of solicitor was explained by Patricia as arising from the illness of the deceased's usual solicitor, Mr Lava (to whom the letter from Dr McHenry was directed). Further, the retention of a new solicitor by the deceased to prepare a will is not a matter which should necessarily arouse suspicion. The fact that a will has been prepared by a solicitor and read to the testator is powerful evidence that it represents the testator's intentions.[104]
[104]Veall [2015] VSCA 60, [184] (Santamaria JA).

In Veall, what troubled the trial judge, and on appeal Santamaria JA (with whom Beach and Kyrou JJA agreed), was not that the solicitor was new to the deceased. Rather, when called upon to give evidence the solicitor had not retained any note of making the will and had only made an affidavit of his recollection of the matter two and a half years later. He had been involved in the making of a previous will three months earlier, but could not recall doing so (his recollection was limited to the fact that he had witnessed it).[105] The solicitor's evidence was found to be unreliable.[106] There was also a medical report which suggested that the deceased was failing 'physically and mentally' and this was not brought to the solicitor's attention.[107] Veall was a case where the involvement of the solicitor was not enough to overcome the other suspicious circumstances, of which there were many. Indeed, his performance only compounded the propounder's difficulties.
[105]Veall [2015] VSCA 60, [199(8), (10)].
[106]See onwards from Veall [2015] VSCA 60, [65].
[107]Veall [2015] VSCA 60, [199(1), (9),].

In Brown v Guss, McMillan J was not so much concerned that there were new solicitors, but that interested parties were undeniably involved in the preparation and execution of the will, that the solicitors had been procured by those interested parties and there was a suspicion that the solicitors were probably acting as the instruments of those interested parties.

In Schrader v Schrader, the fact that a solicitor other than the usual solicitor was retained was one of six factors said by the defendant to arouse suspicion. The Court concluded that the factors relied on (or at least some of them) were capable of arousing the Court's vigilance.[108] In the final analysis it was a factor in the Court's conclusion that one of the testator's sons had unduly influenced the testator. It was he who had arranged for the new firm to prepare the challenged will and it was he who the Court found was likely to have been the source of the instruction to the new firm at the centre of the dispute (giving the testator's property to that son).[109]
[108]Schrader v Schrader [2013] EWHC 466 (Ch), [92].
[109]Ibid [97].

As Counsel for the plaintiffs submitted, each of these cases is distinguishable from the present case, in which the unchallenged evidence is that the reason the deceased went to another solicitor was that the deceased's usual solicitor was unwell.

Conclusion

The review of the evidence and the argument in support of grounds in the caveat shows that there is no real prospect of the Caveator succeeding in his objections to the grant of representation to the plaintiffs. In the result there is also no proper occasion for the Court to exercise its discretion given by s 64 of the CPA to order that the proceeding go to trial despite there being no real prospect of success. That is because there is nothing that points to dismissal of the caveat not being in the interests of justice and the dispute is not of such a nature that only a full hearing on the merits is appropriate. In my view this is a proper case for the caveat to be disposed of summarily.

Subject to there being some special factors presently unknown to me, the appropriate order is that the caveat be dismissed with costs.

[2018] VSC 747

4 December 2018