Rowe v Sudholz

Case [2019] QSC 306

SUPREME COURT OF QUEENSLAND

CITATION:

Rowe v Sudholz [2019] QSC 306

PARTIES:

JUSTIN JOHN ROWE AND VIKKI MAREE ROWE

(applicants)

v
KATHRYN LAURA SUDHOLZ

(respondent)

FILE NO:

5529 of 2019

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

13 December 2019

DELIVERED AT:

Brisbane

HEARING DATE:

28 and 29 November 2019

JUDGE:

Applegarth J

ORDERS:

A solemn form grant of the will dated 18 August 2016 should be made to the applicants.

CATCHWORDS:

SUCCESSION – MAKING OF A WILL – TESTAMENTARY CAPACITY – SOUNDNESS OF MIND, MEMORY AND UNDERSTANDING – GENERALLY – where the testator made three wills in the two years before his death – where the testator’s last will, made two months before his death, increased the amount gifted to the respondent from $500,000 to $1.5 million – where the applicants were appointed executors in all three wills – where the applicants seek orders declaring against the force and validity of the last two wills and in favour of the third-last will – where the respondent seeks to uphold the validity of the last will, or alternatively, the second-last will – where the testator experienced physical and cognitive decline and suffered from dementia in the last years of his life – where the parties agree the testator had testamentary capacity at the time of making his third-last will  – whether the testator had testamentary capacity at the time of making his last or second-last will

Ashkettle v Gwinnett [2013] EWHC 2125 (Ch), cited
Bailey v Bailey (1924) 34 CLR 558; [1924] HCA 21, cited
Banks v Goodfellow (1870) LR 5 QB 549, cited
Boyse v Rossborough (1857) 6 HL Cas 1; (1857) 10 ER 1192, cited
Brown v Guss [2014] VSC 251, cited
Craig-Bridges v NSW Trustee & Guardian [2017] NSWCA 197, cited
Drivas v Jakopovic [2019] NSWCA 218, cited
Frizzo v Frizzo [2011] QCA 308, applied
Frizzo v Frizzo [2011] QSC 107, applied
Hamill v Wright [2018] QSC 197, cited
Nicholson v Knaggs [2009] VSC 64, cited
Parker v Felgate (1883) 8 PD 171, cited
Pates v Craig [1995] NSWSC 87, cited
Re Crookes Estate (Unreported, Supreme Court of New South Wales, Young J, 14 December 1994), cited
Re Key [2010] 1 WLR 2020; [2010] EWHC 408 (Ch), cited

Revie v Druitt [2005] NSWSC 902, cited
Ruskey-Fleming v Cook [2013] QSC 142, cited

Veall v Veall (2015) 46 VR 123; [2015] VSCA 60, cited
Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197, cited

COUNSEL:

J Otto for the applicants

C Brewer and P Coore for the respondent

SOLICITORS:

McCullough Robertson Lawyers for the applicants

Fox and Thomas for the respondent

  1. A few months before he died, the testator changed his will to increase the amount gifted to a friend from $500,000 to $1.5 million.  He was suffering from cognitive impairment attributable to dementia and was in a poor state of health…

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Details
AGLC
Rowe v Sudholz [2019] QSC 306
Case
[2019] QSC 306
Decision Date

CaseChat Overview and Summary

The case of Rowe v Sudholz involves a dispute over the validity of the wills made by the deceased, Norman Alfred Hottes. The applicants, Justin and Vikki Rowe, seek orders declaring against the force and validity of the last two wills made by the deceased and in favour of the third-last will. The respondent, Kathryn Sudholz, seeks to uphold the validity of the last will or, alternatively, the second-last will. The central legal issue before the court was whether the deceased had testamentary capacity at the time of making his last or second-last will. The court found that the deceased did possess testamentary capacity when he made the will dated 18 August 2016. The reasoning of the court was based on the evidence of lay witnesses, contemporaneous notes, and medical records. The court found that although the deceased experienced physical and cognitive decline and suffered from dementia in the last years of his life, he was not so affected by dementia, depression, or any other condition as to make him unequal to the task of disposing of his property. The court concluded that the deceased possessed testamentary capacity when he made the will dated 18 August 2016. Therefore, the court made a solemn form grant of the will dated 18 August 2016 to the applicants. The court also made an order for the parties' costs to be paid out of the estate on an indemnity basis.

Orders

Orders of the court

A solemn form grant of the will dated 18 August 2016 should be made to the applicants.

Background

Background to the litigation

If not, did he have testamentary capacity when he made the previous will on 18 August 2016?Background Norman Alfred Hottes died on 26 January 2018, aged 87 years. In the final years of his life he developed a number of chronic medical conditions. He increasingly relied upon his neighbours, Justin and Vikki Rowe, for assistance. Norm[1] lived alone on a property at Goondiwindi. Justin and Vikki helped Norm in many ways. For example, Vikki took him to medical appointments out of town. After Norm’s bookkeeper retired in 2015, Vikki assisted him with his bookkeeping. Justin and Vikki helped him with problems he had with tenants at commercial sheds that he ended up selling in 2013 and 2014. In 2013, Norm appointed Justin and Vikki under an enduring power of attorney to be his attorneys for financial and personal/health matters. By a will dated 26 February 2016, Norm appointed them to be his executors and gave the whole of his estate to them.[1]It is convenient to refer to the parties by their first names, and this coincides with reference to them by their first names in much of the evidence and submissions. Norm’s health was in decline, and he was hospitalised between late February and early June 2016. Because of his cognitive and physical state he was unable to return to live in his home. After being discharged from hospital he lived in a nursing home at Millmerran. This was an unhappy period in his life. He did not like living away from Goondiwindi and was depressed. He was upset when Justin and Vikki went on a long-planned overseas trip in July-August 2016. He changed his will in August 2016. His will dated 18 August 2016 gave a pecuniary legacy of $500,000 to a friend, Kathryn Sudholz, who I will refer to as Kathy. The remainder of his estate was given to Justin and Vikki. In early September 2016 a room became available in a nursing home in Goondiwindi, Kaloma, and Norm moved there. Over the following year Norm’s physical and mental health continued to decline. He was visited by friends. Their evidence assists in determining his testamentary capacity at different times. So do the contemporaneous notes kept by Vikki and (to a lesser account) Justin. The voluminous contemporaneous medical records also shed light on his condition and behaviour. The accounts of independent witnesses and the contemporaneous documents indicate that, at various times in the last year of his life, Norm made repeated false claims about being grossly overcharged to live at Kaloma, despite assurances he received that this was not the case. While he exhibited a good memory for things in the distant past, his discussions with friends became more general in the last months of his life. For example, when his accountant and tax adviser, Mr Herden, would visit, they mostly made “small talk”, discussing the weather, Norm’s health and how he was finding living at Kaloma. When his financial planner, Mr Carlson, visited him in late 2017, Mr Carlson doubted whether Norm would have been able to understand recent transactions which had been undertaken on his behalf. According to Mr Carlson, in around November 2017 Norm was lucid and detailed about matter sin his distant past, but less lucid about present happenings. Mr Carlson referred in his evidence to Norm’s “vagueness” at this stage.

Evidence

Evidence Before The Court

Norm said, “You and Justin are getting more than Kathy” and “you are getting about $2 million, is that right?” Vikki said she did not know. She asked him what he was doing with the house, and he said it was for Vikki and Justin and was worth about $800,000. Vikki said, “Probably not in the condition it is in now”. Vikki asked whether he had discussed with Kathy what he was leaving her in the will, and he said he had. She asked if Kathy knew he had done a will and that she was in the will, and he said she did. He said he could not really remember what he had put in the will. Vikki said she was concerned that he could not remember what he had put in the will, and he said he thought he did equal shares. He said Lachlan had visited him twice and he came with his daughter.Assessment of lay evidence The foregoing chronology is drawn principally from the evidence of lay witnesses, including contemporaneous notes recorded by Vikki and Justin (the reliability of which was not challenged) and from contemporaneous medical records. Vikki and Justin also gave affidavit and oral evidence, and I found them to be honest and reliable witnesses. I was also assisted by evidence of witnesses who spoke to and observed Norm in 2016 and 2017. These included persons who had a professional relationship with him over many years and who developed a friendship with him, namely Tim Herden. Save for a period between June 2013 and February 2014, Tim acted as Norm’s accountant from 1997 until his death. He regularly saw Norm when he lived in Goondiwindi, when Norm was at the Millmerran Nursing Home and when he moved to Kaloma. I also benefited from the evidence of Don Carlson who worked for Morgans and advised Norm about his investments. I also was assisted by the evidence of Mr Keri Brown, who was involved in the transport industry, shared a friendship with Norm and visited him twice at the Millmerran Nursing Home in mid-2016 and at least six times at Kaloma. Some consistent themes emerged from the evidence of these witnesses. One was that, as time progressed, their discussions with Norm became more general. For example, Mr Herden visited on 11 December 2017 and remarked that their discussions around this time became more general. Rather than discuss financial matters, which Norm had a good grasp of earlier in 2017, their discussion consisted of small talk about the weather and such things. Don Carlson, who saw Norm about every six to eight weeks after Norm moved to Kaloma, gave evidence about Norm’s condition in about November 2017. Whereas in June 2016 Norm was able to discuss with Don the tax advantages of transferring money out of the superannuation fund as a tax free transaction and give approval to the transfer, by November 2017 Don thought it would be “a bit much” to talk to Norm about his investments. By this time, Norm spoke quietly and with difficulty. Norm “switched on” when he was recalling his early life and past events. As Mr Carlson said, Norm was “far more lucid about these past events than present happenings”. On this last occasion that Don saw him, probably in November 2017, he did not go through Norm’s portfolio with him because of a “vagueness” he observed in Norm. Don doubted whether Norm would have been able to understand the detail.

Decision

Reasons for decision

Norm’s mental faculties were affected by a dementing illness which rendered him incapable of caring for himself. Norm was also depressed by his circumstances in August 2016. However, these matters are not sufficient in the light of all of the evidence to conclude that he lacked testamentary capacity. I am satisfied, on the balance of probabilities, that he was not so affected by dementia, depression or any other condition as to make him unequal to the task of disposing of his property. I am satisfied that he possessed testamentary capacity when he made the 18 August 2016 will.Conclusion and orders A solemn form grant of the will dated 18 August 2016 should be made to the applicants. I will hear the parties, if required, on the question of costs. My provisional view is that the application was properly brought and that the respondent has enjoyed a substantial measure of success. There is no apparent reason to deprive either party of their costs. In the circumstances, my provisional view is that an order should be made for the parties’ costs to be paid out of the estate on an indemnity basis. However, I will hear submissions, if requested.

Ratio Decidendi

Legal Principle Established

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