Smith v O'Neill
[2014] NSWSC 1119
•21 August 2014
Supreme Court
New South Wales
Medium Neutral Citation: Smith v O'Neill [2014] NSWSC 1119 Hearing dates: 16, 17 July 2014 Decision date: 21 August 2014 Jurisdiction: Equity Division Before: Hallen J Decision: (a) Orders, with effect from the date of these orders, that Probate in common form of the Will dated 18 May 2012 made by Vera Smith (also known as Sue Smith) ("the deceased") granted on 28 May 2013 be revoked.
(b) Orders that the Registrar cancel the original Probate document delivered by the Defendant and retained in the court file.
(c) Declares that the court is satisfied that the document dated 18 May 2012 ("the May 2012 Will") purports to state the testamentary intentions of the deceased, and that it has not been executed in accordance with Part 2.1 of the Succession Act 2006.
(d) Declares that the court is satisfied that the May 2012 Will forms the deceased's Will and that the deceased intended it to form her Will.
(e) Orders, subject to compliance with the rules of court, that Probate, in solemn form, of the May 2012 Will, be granted to the Defendant.
(f) Orders that the matter be remitted to the Registrar to otherwise complete the grant.
(g) Orders that the balance of the further amended Statement of Claim be dismissed.
(h) Orders that the balance of the Cross-Claim be dismissed.
(i) Orders that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.
(i) Invites the parties to make submissions on costs within 7 days following the delivery of reasons for judgment and the issue of costs shall then be determined.
Catchwords: SUCCESSION - Wills probate and administration - Revocation of grant of Probate in common form - Whether Will executed in accordance with Part 2.1 of the Succession Act 2006 - Not so executed - Whether court satisfied that Will forms the deceased's Will and that she intended it to form her Will - Gift to solicitor in Will - Another solicitor, a friend and colleague of solicitor/beneficiary, takes instructions from deceased - Suspicious circumstances - Whether deceased knew and approved of the terms of the Will Legislation Cited: Births Deaths and Marriages Registration Act 1995 (NSW)
Civil Procedure Act 2005 (NSW)
Corporations Law 1989 (Cth) (Repealed)
Evidence Act 1995 (NSW)
Interpretation Act 1987 (NSW)
New South Wales Professional Conduct and Practice Rules (Solicitors' Rules) 2013
Probate and Administration Act 1898 (NSW)
Revised Professional Conduct and Practice Rules 1995 (Repealed)
Succession Act 2006 (NSW)
Supreme Court Rules 1970 (NSW)Cases Cited: Barry v Butlin (1838) 2 Moo PC 480; 12 ER 1089
Bates v Messner (1967) 67 SR (NSW) 187
Belcastro v Belcastro [2004] WASC 111
Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398
Easter v Griffith (1995) 217 ALR 284
Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786
Estate of Peter Brock [2007] VSC 415; (2007) 1 ASTLR 127
Estate of Williams, Deceased (1984) 36 SASR 423
Fuller v Strum [2002] 1WLR 1097
Hoff v Atherton [2004] EWCA Civ 1554; [2005] WTLR 99
In re Munn [1943] SASR 304
In re Nickson [1916] VLR 274
In re R (Deceased) [1950] 2 All ER 117
In the Estate of Knibbs, Deceased; Flay v Trueman [1962] 2 All ER 829; [1962] 1 WLR 852
In the Estate of Margaret, Deceased, [2012] NSWSC 1490
In the Estate of O'Dell [2010] NSWSC 678
In the Estate of Stewart (Supreme Court (NSW), Cohen J, 12 April 1996, unrep)
In the Will and Codicil of Callow [1918] VLR 406
In the Will of Morgan [1950] VLR 335
In the Will of England (1900) 22 ALT 86
In the Will of Lobarto Shields v Caratozzolo (1991) 6 WAR 1
Jolley v Jarvis [1964] P 262; [1964] 1 All ER 596
Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd [1994] FCA 1059; (1994) 51 FCR 446
Kerr v Badran [2004] NSWSC 735
Kuhl v Liebcheschel [1933] SASR 394
Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353
Mavrideros v Mack [1998] NSWCA 286; 45 NSWLR 80
Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (A Firm) [1979] 1 Ch 384
Nock v Austin [1918] HCA 73; (1918) 25 CLR 519
Oakes v Uzzell [1932] P 19; (1931) 100 LPJ 99
Palin v Ponting [1930] P 185
Perrins v Holland [2009] EWHC 1945 (Ch)
Ramage v Waclaw (1988) 12 NSWLR 84
Re Application of Brown; Estate of Springfield (1991) 23 NSWLR 535
Re Broad; Smith v Draeger [1901] 2 Ch 86
Re Estate of Kiepas (Deceased); Twemlow v Kiepas [2004] NSWSC 452
Re Estate of Masters (Deceased); Hill v Plummer (1994) 33 NSWLR 446
Re Levy [1953] VLR 652
Romano v Romano [2003] NSWSC 436
Szmulewicz v Recht [2011] VSC 368
The Estate of Kevin John Hines v Hines [1999] WASC 111
The Estate of Silady (Supreme Court (NSW), Santow J, 21 November 1994, unrep)
The Public Trustee v Commins; The Estate of Gwendolyn Myrtle Wray (Supreme Court (NSW), Powell J, 19 June 1992, unrep)
Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757
Tsagouris v Bellairs [2010] SASC 147
Vernon v Watson; Estate Clarice Isabel Quigley, Deceased [2002] NSWSC 600
Wintle v Nye [1959] 1 WLR 284
Wood v Smith [1993] Ch 90; [1992] 3 All ER 556
Yazbek v Yazbek [2012] NSWSC 594Texts Cited: Professor A H Oosterhoff, "Testamentary Capacity, Suspicious Circumstances and Undue Influence" (1999) 18 The Estates, Trust and Pension Journal 369 Category: Principal judgment Parties: Ian Russell Smith (first Plaintiff)
Norman Joseph Smith (second Plaintiff)
Gary Mervyn John O'Neill (Defendant)Representation: Counsel:
Ms C Smith (Plaintiffs)
Ms R Kako (Defendant)
Solicitors:
Somerville Laundry Lomax (Plaintiffs)
O'Neills Law (Defendant)
File Number(s): 2013/217455
Judgment
The Claims
HIS HONOUR: This judgment relates to contested Probate proceedings in which the first Plaintiff, Ian Russell Smith, in a further amended Statement of Claim filed 24 June 2014, seeks revocation of the grant of Probate of a Will dated 18 May 2012, ("the May 2012 Will") (Ex. D2), made by his aunt, Vera Smith (also known as Sue Smith) ("the deceased"). This court granted Probate in common form of the May 2012 Will on 28 May 2013 (Ex. D1).
In addition, the first Plaintiff sought a declaration that an earlier Will, made by the deceased on 23 March 2012 ("the March 2012 Will") (Ex. P1) is the last valid Will of the deceased. (He did not seek a grant of administration of the March 2012 Will in the pleading.)
The first Plaintiff also sought an order that the Defendant "account to the estate for any benefit he receives under the May 2012 Will, an order for damages and/or equitable damages" and an order that the costs of the application be paid by the Defendant. However, those claims for relief were not pressed at the final hearing of the proceedings.
At the commencement of the hearing, the first Plaintiff sought leave to join his brother, Norman Joseph Smith, who is a beneficiary named in the March 2012 Will, as an additional Plaintiff. Norman has consented to the joinder and counsel for the Defendant did not oppose the joinder. Accordingly, I made an order that he be joined as the second Plaintiff.
The Defendant named in the further amended Statement of Claim is Gary Mervyn John O'Neill, who had been the deceased's solicitor from about 2009, and the solicitor for her partner and carer, Laurence Hugh McKeown, for many years before that.
The Defendant is also the executor appointed, and a beneficiary named, in the May 2012 Will. The Plaintiffs asserted that the Defendant's interest thereunder "equates to approximately 9 per cent of the estate left by the deceased". I shall return to the precise terms of each Will made by the deceased and to the specific bequest made to the Defendant later in these reasons.
Following a discussion with the Bench, at the commencement of the hearing, regarding the failure of any party to seek a grant of administration of the March 2012 Will, should that be necessary, counsel for the Plaintiffs indicated that the Plaintiffs would seek additional relief, namely an order that letters of administration with the March 2012 Will annexed, be granted to the second Plaintiff.
The Defendant, who was also named as the sole executor of the March 2012 Will, stated that, in the event the May 2012 Will is not found to be the last valid Will of the deceased, he would renounce Probate of the March 2012 Will, with the result that it was proper for the grant to be made to the second Plaintiff.
In the circumstances, I made the following notation:
"Grant leave to the Plaintiffs to further amend the further amended Statement of Claim by the addition of a claim for an order that letters of administration with the Will dated 23 March 2012 of Vera Smith (also known as Sue Smith) annexed be granted to Norman Joseph Smith."
Without objection, the Plaintiffs, on the second day of the hearing, filed a second further amended Statement of Claim in which this claim for relief and the name of the second Plaintiff was added. There were no amendments to the allegations of fact pleaded.
The Background Facts
The following facts are uncontroversial or they have been clearly established by the evidence.
The deceased died on 13 November 2012, aged 90 years.
The deceased's Death Certificate, registered under the Births Deaths and Marriages Registration Act 1995 (NSW), reveals the cause(s) of death, as "(I) Severe pneumonia; (II) Chronic obstructive pulmonary disease and congestive cardiac failure". Her occupation is described as "Bank Officer". The "Informant" identified on the Death Certificate is the Defendant.
The deceased died leaving property in New South Wales.
The deceased was never married and never had any children.
The deceased had been in a long-term relationship with Mr McKeown, but he died in March 2009. He left a Will made in December 2008, in which he left the whole of his estate, which included 750 shares in the Commonwealth Bank of Australia, to the deceased. There is no dispute that, in July 2009, the deceased sold 50 of those shares, leaving her, at the date of the May 2012 Will, and at the date of death, with 700 shares. As will be read shortly, it is the 700 shares in the Commonwealth Bank of Australia that are at the centre of the dispute in these proceedings.
The deceased had four siblings, Harold, Aub, Ray and Nina. Each of them predeceased her. Each of the Plaintiffs is a son of Harold and, therefore, a nephew of the deceased. The first Plaintiff was born in June 1951 and is currently aged 63 years. The second Plaintiff was born in November 1944 and is currently aged 69 years.
The first Plaintiff lived with, and cared for, the deceased for about 4 years prior to her death. He had known the deceased for the whole of his life and stated that he had a close relationship with her. The first Plaintiff sought and obtained a carer's pension in respect of the deceased.
The deceased's estate, at the date of death, according to the Inventory of Property, lodged by the Defendant when applying for Probate, had an estimated gross value of $453,557. The estate was said to consist of real estate at Tweed Heads ($385,000), shares in public companies ($66,557) and furniture and effects ($2,000).
There was no evidence, before the second day of the hearing, about the current nature and value of the deceased's estate. On the second day of the hearing, however, I was informed, from the bar table, without objection, that there had been no distribution of any part of the deceased's estate. In particular, the first Plaintiff continues to reside in the real estate at Tweed Heads. That real estate has a current value of about $400,000. The shares in the Commonwealth Bank of Australia, which are also held in specie, as at 17 July 2014, had a value of $56,945 ($81.35 per share). There was, also, approximately $12,000 held in a bank account as well as furniture and personal effects, with an estimated value of $2,000.
The estimated current gross value of the estate is, therefore, $470,945. The value of the Commonwealth Bank of Australia shares (as at 17 July 2014) made up about 12.1 per cent of the value of the estate property.
Other Formal Matters
As stated previously, the Defendant produced the original Probate document and original May 2012 Will to the court (Ex. D1) and it will be retained with the court papers (as contemplated by Supreme Court Rules 1970 (NSW) ("SCR"), Part 78, rule 49).
There is no evidence that either Plaintiff caused notice of his intended application to be published in a newspaper circulating in the district where the deceased resided at the date of her death. However, it would appear that all persons who are, or who may be, affected by the determination of the question, namely, which is the last valid Will of the deceased, are parties to, or are aware of, the proceedings.
In this regard, the Defendant's solicitor, Mr H I Berhofer, contacted May Kremmer, a friend of the deceased, who was a beneficiary named in the March 2012 Will, as to 100 shares in the Commonwealth Bank of Australia, by telephone. She stated to him that she was aware of the hearing date ("as I have kept in touch with the family"), and that she did not wish to seek independent legal advice about her rights.
This was, undoubtedly, an appropriate response bearing in mind the value of those 100 shares. In any event, I am satisfied that the Plaintiffs have the same interest as Ms Kremmer, since they are propounding the March 2012 Will.
Division 6 of Part 78 of the SCR "applies to proceedings on an application for the grant of Probate or administration in relation to a will that comprises, or includes, an informal testamentary document". "Informal testamentary document" is defined in Part 78, Rule 1 of the SCR, as meaning "a document that (together with any amendments to it) purports to embody a deceased person's testamentary intentions, being a document that has not been duly executed".
Part 78, Rule 42 of the SCR provides:
"(1) The plaintiff must serve notice of the application ('a prescribed notice') on each person whose interests may be affected by the Court's decision as to the deceased's intentions in relation to the informal testamentary document.
(2) Subrule (1) does not require a prescribed notice to be served:
(a) on the caveator under any caveat in force in respect of the informal testamentary document, or
(b) on any person who has consented to the grant of probate or administration to the plaintiff.
(3) Any consent referred to in subrule (2) (b) must be filed by the plaintiff.
(4) If the person whose interests are affected is a person under legal incapacity:
(a) subrule (2) (b) does not apply, and
(b) if the person has no tutor, service of a prescribed notice does not take effect until a tutor is appointed.
(5) The Court may dispense with compliance with subrule (1) on any of the following grounds:
(a) that the person affected cannot readily be ascertained,
(b) that the person affected, though ascertained, cannot readily be found,
(c) that it would be expedient to do so (having regard to all the circumstances, including the amount at stake and the degree of difficulty of the point to be determined) so as to save expense."
There is no evidence of the prescribed notice having been served on persons whose interests may be affected by the court's decision as to the deceased's intentions in relation to the May 2012 Will. However, as stated, the principal beneficiaries appeared at the hearing and I am satisfied that Ms Kremmer does not wish to obtain independent legal advice or otherwise participate in the proceedings. Accordingly, I am satisfied that each is well aware of the proceedings.
In all the circumstances, I propose to dispense with service of the prescribed notice on Ms Kremmer upon the basis that it is expedient to do so having regard to all the circumstances, including the amount at stake, the degree of difficulty of the point to be determined, because her interests are aligned with those of the Plaintiffs, and so as to save further expense.
The Pleadings
In the pleadings, the Plaintiffs asserted, in summary, that the May 2012 Will was not duly executed in that it was not signed in the presence of both of the attesting witnesses. In addition, they asserted that the deceased did not know and approve the May 2012 Will and that "any presumption to that effect is displaced by the suspicious circumstances rule". They also asserted a breach of fiduciary duty owed by the Defendant to the deceased and a breach of retainer. (Although, initially, in earlier pleadings, the first Plaintiff had alleged that the deceased lacked testamentary capacity, that allegation was not included in the further amended Statement of Claim or in the second further amended Statement of Claim.)
The Plaintiffs asserted that the following factors constituted "suspicious circumstances":
"(1) The deceased was aged, in ill health and severely sight-impaired, making her a vulnerable person;
(2) The Defendant had been the deceased's solicitor for less than three years before the making of the gift;
(3) The Defendant attended upon the deceased more often than was reasonably necessary to manage the deceased's affairs, without invitation, and brought her flowers;
(4) The Defendant did not decline to act on drawing of the Will, despite a conflict of interest;
(5) The person to whom the Defendant referred the deceased for advice was a long-time friend and former practice partner of the Defendant;
(6) The Last Will was drafted by the Defendant's firm, not by the person to whom the defendant had referred the deceased for advice;
(7) The Will was not read to the Deceased in the presence of any other witness;
(8) The Will was not properly executed;
(9) The person who, at the request of the Defendant, gave advice to the deceased rendered an account addressed to the Defendant and not to the deceased."
The Plaintiffs asserted that a fiduciary relationship existed between the deceased and the Defendant by virtue of the fact that "[t]he Defendant had been the deceased's solicitor since around 2009". (There was no reference, in the second further amended Statement of Claim, to the Power of Attorney or Appointment of Enduring Guardian signed by the deceased in favour of the Defendant, although reference thereto was made in the Plaintiffs' submissions, to which I shall return.)
The Plaintiffs then asserted a breach of fiduciary duty because:
"In the course of, and pursuant to, his fiduciary relationship with the deceased, the Defendant drafted, or caused to be drafted, a Will under which he took a substantial benefit from the deceased."
The Plaintiffs also asserted that "[i]n or around 2009, the Defendant and the deceased entered into a retainer agreement ... for the provision of legal services by the Defendant to the deceased". They said that:
"It was an implied term of the Retainer that the Defendant would comply with his obligations under the NSW Law Society's Revised Professional Conduct and Practice Rules 1995 which commenced on 11 December 1995."
And that:
"The Defendant did not comply with his obligations under the Solicitor's Rules."
Specific reference was then made to Rule 11.2.2 of the NSW Law Society's Revised Professional Conduct and Practice Rules 1995, it being asserted that the Defendant, in breach thereof, "did not decline to act on instructions from the deceased to draw a Will under which the Defendant would receive a substantial benefit".
The Defendant, at the hearing, relied upon a second further amended Defence dated 10 July 2014, leave for the filing of which was granted, without opposition, at the commencement of the hearing. In that document, the Defendant made a number of admissions. For example, he admitted that he had previously acted for the deceased, but denied that he was the deceased's solicitor "at or about the time she made [the May 2012 Will]". He added that any retainer that he had with the deceased in 2009, "was limited to its scope and duration, it was not an ongoing retainer and specifically, that the Defendant was not retained by the Deceased to prepare and [he] did not prepare [the May 2012 Will]".
The Defendant also admitted that he was in a fiduciary relationship with the deceased, but not because of any relationship of solicitor and client, but "by reason of him holding a power of attorney for the deceased" at or about the time she made the May 2012 Will.
The matters raised will be dealt with later in these reasons.
The Defendant filed a Cross-Claim on 7 March 2014, in which he sought an order that Probate in solemn form of the May 2012 Will be granted to him; alternatively, and in the event that the May 2012 Will had not been duly executed, a declaration, pursuant to s 8 of the Succession Act 2006 (NSW) ("the Act"), that the May 2012 Will formed the Will of the deceased and a grant of Probate, in solemn form, of that document; and an order that his costs be paid by the first Plaintiff.
The first Plaintiff filed a defence to the Cross-Claim on 31 March 2014 denying that the Defendant was entitled to the relief sought.
(I mention that neither party raised the question, whether, if the court found that the deceased did not know and approve of part of the May 2012 Will (Clause 3), it had power to omit from that Will the words of which she did not know or approve, leaving a blank space in the Probate copy. In these circumstances, that question does not arise.)
The Deceased's Wills
The deceased made a number of Wills during her lifetime. I shall refer to the last five Wills, in reverse date order, even though only the last two Wills are the subject of the dispute between the parties.
The May 2012 Will, relevantly, provided for:
(i) the revocation of all prior wills and other testamentary dispositions;
(ii) the appointment of the Defendant as the executor of the deceased's Will and the trustee of her estate;
(iii) a specific bequest to the Defendant of "all shares which I hold in the Commonwealth Bank of Australia for his sole use and benefit absolutely";
(iv) a devise of the Tweed Heads property, together with the contents thereof, upon trust, "to permit my pet cat Marmalade to reside therein until its death" and "to permit my nephew Ian Richard [sic] Smith to reside in the said property and to care for my pet cat Marmalade in the property until its death", he to pay all outgoings thereon; and, upon the death of Marmalade, for Ian Richard [sic] Smith to receive the property, together with its contents, for his sole use and benefit absolutely;
(v) a bequest of the proceeds of an identified Commonwealth Bank of Australia account to Norman Joseph Smith for his sole use and benefit absolutely;
(vi) a bequest of the rest and residue of the deceased's estate to Ian Richard [sic] Smith absolutely.
(There is no dispute that the person wrongly named in the May 2012 Will is the Plaintiff.)
The May 2012 Will contained an attestation Clause in the following terms:
"SIGNED by the Testatrix the said VERA SMITH (ALSO KNOWN AS SUE SMITH) as and for her last Will and Testament in the presence of us both present at the same time who at her request in her sight and presence and in the sight and presence of each other have hereunto subscribed our names as attesting witnesses."
The May 2012 Will bears the signature of the deceased, of Malcolm Ion Chalmers and of Mardi Knight. (I shall refer to the circumstances surrounding the execution of the May 2012 Will by each of them later in these reasons.)
The March 2012 Will, which was duly executed by the deceased, relevantly, provided for:
(i) the revocation of all prior wills and other testamentary dispositions;
(ii) the appointment of the Defendant as the executor and trustee of the Will;
(iii) a specific bequest, to May Kremmer, of "one hundred (100) of my shares in the Commonwealth Bank of Australia for her sole use and benefit absolutely";
(iv) a devise of the Tweed Heads property, together with the contents thereof, upon trust, "to permit my pet cat Marmalade to reside therein until its death" and "to permit my nephew Ian Richard [sic] Smith to reside in the said property and to care for my pet cat Marmalade in the property until its death", him paying all outgoings thereon; and, upon the death of Marmalade, for Ian Richard [sic] Smith to receive the property, together with its contents, for his sole use and benefit absolutely;
(v) a bequest of the proceeds of an identified Commonwealth Bank of Australia account to Norman Joseph Smith for his sole use and benefit absolutely;
(vi) a bequest of the rest and residue of the deceased's estate to Ian Richard [sic] Smith absolutely.
There is no dispute about the validity of the March 2012 Will. It is simply asserted by the Defendant that it was revoked by the May 2012 Will.
The deceased made a Will on 26 August 2010 ("the August 2010 Will") (Ex. P2), duly executed by her, which, relevantly, provided for:
(i) the revocation of all prior wills and other testamentary dispositions;
(ii) the appointment of the Defendant as the executor and trustee of the Will;
(iii) a specific bequest, to May Kremmer, of "all shares which I hold in the Commonwealth Bank of Australia for her sole use and benefit absolutely";
(iv) a devise of the Tweed Heads property, together with the contents thereof, upon trust, "to permit my pet cat Marmalade to reside therein until its death" and "to permit my nephew Ian Richard [sic] Smith to reside in the said property and to care for my pet cat Marmalade in the property until its death", him paying all outgoings thereon; and, upon the death of Marmalade, for Ian Richard [sic] Smith to receive the property, together with its contents, for his sole use and benefit absolutely;
(v) a bequest of the rest and residue of the deceased's estate to Ian Richard [sic] Smith absolutely.
There is no dispute about the validity of the August 2010 Will. It is clear that it was revoked by the March 2012 Will.
The deceased made a Will on 15 July 2009 ("the July 2009 Will") (Ex. P3), duly executed by her, which, relevantly, provided for:
(i) the revocation of all prior wills and other testamentary dispositions;
(ii) the appointment of the Defendant as the executor and trustee of the Will;
(iii) a specific bequest of $25,000 to her nephew Harold Robert Smith;
(iv) a specific bequest of $25,000 to Kay Brooks;
(v) a specific bequest of $25,000 to her nephew, Ian Richard [sic] Smith;
(vi) the balance of the funds divided equally between The Royal Society for the Prevention of Cruelty to Animals (NSW Branch) and The Australian Cancer Research Foundation.
There is no dispute about the validity of the July 2009 Will. It is clear that it was revoked by the August 2010 Will.
The deceased made a Will on 31 August 2008 ("the August 2008 Will") (Ex. P4), duly executed by her, in which she appointed Mr McKeown as executor and trustee and left him the whole of her estate for his own use and benefit absolutely. (In the event that he did not survive the deceased by 30 days, the Defendant was appointed executor and trustee.)
There is no dispute about the validity of the August 2008 Will. It is clear that it was revoked by the July 2009 Will.
The Relationship between the Defendant and the Deceased
The deceased and the Defendant met in 1997. He was then the solicitor looking after the affairs of Mr McKeown. After Mr McKeown's death in 2009, he says that the deceased became increasingly reliant upon him for advice and assistance.
The Defendant held the deceased's Power of Attorney at the date of her death. The Power of Attorney was made on 15 July 2009 and signed by the Defendant on 20 July 2009. He was also appointed as her enduring guardian, pursuant to an Appointment of Enduring Guardian signed by the deceased on 15 July 2009 and by the Defendant on 20 July 2009.
The deceased engaged the Defendant, at various times, as her solicitor. At other times, he attended upon her in relation to some monetary transaction, including handing to her funds withdrawn from her account, at her request, to pay utility or other bills, or to provide her with cash for personal living purposes, which she had requested he withdraw for her. He also visited her socially.
There is, in evidence, a document dated 21 June 2010, headed "Standard Costs Disclosure" between the deceased and the Defendant "about the costs of my/our legal services and your rights, as required by the Legal Profession Act 2004". For work done acting as the deceased's Attorney, an hourly rate of $200, plus 10% GST was to able be charged. There were other (higher) rates able to be charged for other work. The estimate of work to be done, and fees to be charged, as the deceased's Attorney was $5,200 per year, calculated at the rate of one hour every second week.
The Defendant's evidence, which seemed not to be disputed, was that he did not ever render a Tax Invoice or charge fees for any of the visits, or for other time, and work, associated with attending to the requests made by the deceased of him as a result of his visits. His firm did, however, charge for the preparation of any Will that was prepared for the deceased.
The Defendant says that he did not charge the deceased for the work that he did (other than in respect of the Wills drafted by his firm) because their relationship had developed into a friendship. He gave evidence that he "had formed an extremely strong relationship and bond with the deceased ... [and] became extremely fond of her and had a deep friendship with her". During cross-examination, he said: "I was a long term friend and she became a very dear friend to me".
The Defendant also gave evidence, which I accept, that "[d]uring the later stages of [the deceased's] life, [he] spent considerable time in arranging care for [the deceased], both at home and in the Amaroo Nursing facility". It was also the Defendant who organised the funeral service for the deceased.
I shall not set out all of the assistance provided to the deceased by the Defendant before and after May 2012. He has provided a schedule of dates of his visits (31 in all) to the deceased between 15 July 2009 and 25 October 2012. Of course, he had known her for a much longer period even though he did not act for her throughout that period. The deceased's view of the Defendant is demonstrated by the fact that she appointed him as her Attorney not long after the death of Mr McKeown.
The first Plaintiff, in an affidavit sworn 2 December 2013, gave the following evidence:
"I knew that the Defendant ... was [the deceased's] solicitor, because I would take [the deceased] to his office when she was alive and would also pay bills to [the Defendant] for services rendered to [the deceased].
From the time I became [the deceased's] carer, [the Defendant] would often come around to [the deceased's] house without notice and always bring flowers.
When I first moved in with [the deceased], the Defendant told me that if [the deceased] went into hospital, I was to call the Defendant immediately and let him know. He gave me his mobile number so I could contact him after hours.
I found it unusual that he would visit so often with no apparent professional reason and that he would bring flowers so often.
...
In the last few months of [the deceased's] life while she was still living at home, the Defendant would visit about once per week."
I am satisfied that the Defendant provided assistance to the deceased and he appears to have done so as her Attorney, but also as he regarded her as a friend. I note that, on occasions, he would liaise with the first Plaintiff about what he (the Defendant) was doing in relation to the deceased. In this regard, he does not appear to have been acting surreptitiously or in a manner suggestive of ingratiating himself to her.
Overall, I accept that the Defendant gave an honest account of his relationship and dealings with the deceased.
The Relationship between the Defendant and Mr Chalmers
The Defendant also had a relationship with Malcolm Ion Chalmers, the solicitor who took instructions from the deceased about the May 2012 Will. The Defendant described him as "a friend and colleague". He had worked with Mr Chalmers in a legal practice in Palm Beach and was, for two years during the early 1980s, in partnership with him at that practice.
The Defendant described Mr Chalmers as "a very experienced Solicitor in the areas of taking Will instructions and assessing a testator's mental capacity"
Mr Chalmers gave evidence that he had been admitted as a solicitor in New South Wales in August 1988 and as a solicitor in Queensland in March 1981. He described himself as having "considerable and extensive experience in attending nursing homes, retirement homes and villages and private residences and taking instructions for, and subsequently preparing, wills, for elderly clients.
Mr Chalmers stated that he told the deceased about his relationship with the Defendant in the following terms: "[The Defendant] and I have a long friendship and background in the legal profession and we both come from the Northern Rivers area originally".
The Defendant and Mr Chalmers had also worked together as members of the Board of Surfing, Queensland. Mr Chalmers says that he also disclosed that information to the deceased.
Overall, I accept that the Defendant and Mr Chalmers each gave an honest account of his relationship and dealings with the other. I also accept that Mr Chalmers informed the deceased of his friendship with the Defendant as he asserted.
The preparation and execution of the May 2012 Will
I commence by noting that there is a diary note, dated 9 May 2011 (about one year before the May 2012 Will) prepared by the Defendant, which is in the following terms:
"I attended upon [the deceased] at approximately 1.40 pm to approximately 2.45pm.
I went through the matter of her Will with her and she was adamant that Ian was to get the house but Ian could not sell the house until such time as Marmalade the cat died.
It was then that he could obtain the house in his own name.
She also mentioned to me that she would like me to have half of the shares in the Commonwealth Bank. I informed her that I would not take those instructions but if she wanted to leave something then I would have someone from my Office come down to see her and get those instructions but I said it was not necessary.
Again she was adamant that I should be left something and I said that it was a matter for her.
She seemed in bright spirits, mentally alert and was turning 90 in January 2012.
She also informs me that she goes to the Bank regularly herself and draws the funds out rather than placing the burden on me."
It appears that the alteration of the deceased's Will to provide any shares to the Defendant by Will did not proceed further until the events of May 2012. (Of course, the March 2012 Will was made in the intervening period, without giving effect to the conversation recounted in the diary note.)
The Defendant gave evidence that, in May 2012, the deceased "expressed to me her desire to bequeath to me her Commonwealth Bank shares in appreciation of everything I had done for her as her attorney and friend". The first time she did so was on 10 May 2012 whilst he was visiting her in hospital where she had been admitted because of back pain.
There is in evidence, a diary note, dated 15 May 2012, prepared by the Defendant, which included the following passages:
"... She informed me that I should have the shares and I said to her that I could not take instructions and I could not do that.
She was adamant that I would take them and I said I would speak to GD [Graeme Delaney] and see what he thought."
He gave the following evidence about what subsequently ensued:
"21. On 15th May 2012, I saw [the deceased] at her house. I called in to check on her welfare knowing that she was discharged from Hospital on the Friday 11th May 2012. Whilst I was there, she said to me: '...I want you to have my Commonwealth Bank shares as you have been so good to me. Without you, I don't know what I would have done'. I said: 'I cannot take instructions from you on that and I am not prepared to do so...'. [The deceased] again said: '...I want you to have those Commonwealth Bank shares. You have done a lot for me'. I said to her: 'I will discuss the matter with Graeme Delaney at work to see what he thinks'...
22. I discussed this matter with another solicitor in my office, namely, Mr Graeme Delaney, and we both agreed that as I was already the Executor of her last Will and a potential beneficiary given [the deceased's] advice, that it would not be prudent or proper for anyone from my office to take those instructions from her.
23. As a result of that decision, I contacted a colleague who I knew was a very experienced Solicitor in drafting wills, Mr Malcolm Chalmers. Later that day, 15th May 2012, I phoned Mr Chalmers and said to him: 'Mal, I have a dear old client who wants to leave some Commonwealth Bank shares to me in her Will and it would not be ethical or appropriate for either me to do it or for Graeme from this Office to do it. I wonder if you would be good enough to take instructions in relation to that.' As a result of that, Mal said to me, 'Yes I will. Where does she live? Would you please give me some details?' I then, on 16th May 2012, caused an email to be sent to Mr Chalmers with the details and instructions...
24. I directed my Secretary to provide Mr Chalmers with a copy of [the deceased's] previous Will dated 23 March 2012. This was provided in Word format attached to the email ... so that the document could be actively worked in and amended."
As indicated, the Defendant directed his secretary to provide Mr Chalmers with a copy of the deceased's March 2012 Will. He states that he "informed Mr Chalmers of [the deceased's] advices to me and my concerns and asked him to ensure when taking instructions from [the deceased] that she was not acting from any position of being influenced and that he should form his own opinion of her mental capacity to give instructions for and execute a Will".
Mr Chalmers, subsequently, attended upon the deceased on the afternoon of 17 May 2012, for the purpose of taking instructions in relation to the May 2012 Will, including in relation to the gift of the Commonwealth Bank shares.
In an affidavit, sworn 31 October 2013, Mr Chalmers gives evidence that the deceased "was aware of the contents of her previous Will and advised me that she only wanted to make one change to that Will, that being to take out her friend, May Kremmer, as the beneficiary of the quantity of Commonwealth Bank shares that [the deceased] owned and leave those shares to [the Defendant]".
Mr Chalmers went on to say:
"15. ... I discussed the situation with her and she confirmed with me that she had been under no undue influence to do so and had made the decision of her own volition. She mentioned that her friend, May, had more than enough to sustain her and that she wanted to reward [the Defendant] for his continuing ongoing support as her Power of Attorney.
16. During this time... she was very definite about her intentions.
17. There were minor issues in relation to the memory of people's names but I had no doubts about her cognitive ability or that the decision she had made to change her Will was hers and hers alone ...
18. I went through the contents of her previous Will with her and she said that, apart from the above requested change, to leave it as it was ...
...
20. ... She confirmed that she did not want any other changes to her Will bar changing the bequest of the shares from her friend, May Kremmer, to [the Defendant]. ...
...
23. On 18th May 2012 at approximately 3:00 p.m. I again attended [the deceased's] residence. ...
...
25. I then explained to [the deceased] that, in accordance with her instructions, a new Will had been prepared and the only change from her previous Will was that [the Defendant] was now to be the beneficiary of the Commonwealth Bank shares in lieu of May Kremmer and that everything else in the Will was the same as before.
26. She confirmed with me that they were her wishes so I read the Will to her in full after which she agreed that that was what she wanted and she commented that she was glad to have it sorted out.
...
33. The thrust of her instructions to me made it evident that... [the Defendant] be given the benefit of the Commonwealth Bank shares as an expression of her gratitude...
...
39. [The deceased] expressed to me that [the Defendant] was a big factor in her ongoing survival and wanted to reward him accordingly.
40. She informed me that [the Defendant] had been her Attorney for two or three years and that, as she had no family of her own, it was her choice to leave her estate as she saw fit. She was very definite about this and wanted it attended to promptly."
Although parts of Mr Chalmers' affidavit referred to could be read as leading to a view that the deceased wished to leave, to the Defendant, the 100 shares that she had bequeathed to Ms Kremmer in the March 2012 Will, the copy of that Will, with notations contemporaneously made by Mr Chalmers, satisfies me that the affidavit was simply inelegantly worded. The relevant Clause (Clause 3) of the March 2012 Will has the words "MAY KREMMER" and number and words "one hundred (100) shares" crossed out and the word "JOE" inserted above the name and the word and numbers "ALL 4-500" above the reference to shares, inserted in handwriting. (It was not disputed, at the hearing, that the deceased referred to the Defendant colloquially as "Joe".)
In a later affidavit, sworn 14 March 2014, Mr Chalmers deposed to having had the following conversation with the deceased on 17 May 2012:
"[The deceased] said words to the effect, 'I want to change my Will so that I leave all my Commonwealth Bank shares to [the Defendant] as he has been of great assistance to me and is more than just a friend'. I said words to the effect, 'Well, in this Will there is one hundred shares, how many do you have?'. She said words to the effect, 'Four to five hundred I think'."
In his final affidavit, sworn 8 July 2014, Mr Chalmers gave the following details to supplement his previous evidence concerning the deceased being "definite about her intention" to bequeath her Commonwealth Bank shares to the Defendant:
"I said to [the deceased] 'are you sure you want to leave May [Kremmer] out of the Will?' I was keen to understand from [the deceased] the reason she was excluding May from her Will and whether her reason was rational. I said to [the deceased] 'by giving all the shares to [the Defendant], there will be no shares passing to [the first Plaintiff].' [The deceased] said 'Yes, that's what I want. [The first Plaintiff] gets the house.'"
There was some time spent, during the cross-examination of Mr Chalmers, questioning him on whether he had made clear, to the deceased, that she was bequeathing all of her Commonwealth Bank shares to the Defendant, as opposed to making a gift of 100 shares.
Mr Chalmers admitted that he did not know, on 17 May 2012, or at any time, that the deceased, in fact, owned 700 shares in the Commonwealth Bank. Nor did he know the value of the shares held by the deceased, either independently, or as a proportion of the overall estate.
He confirmed, however, that, in his opinion, "she made it quite clear [that] she wanted all her shares to go to [the Defendant], all of them". This opinion was supported by a diary note dated 17 May 2012 (Ex. D5), in which Mr Chalmers had stated:
"She has lived in [the] house 17 years and was referred to Joe [the Defendant] by a friend. He is her P/A - doesn't know what she would do without him. She wanted to make only one change in her will - Take Mary Kremmer out and leave all CBA shares to Joe. Discussed no undue influence and ramifications. May [Kremmer] has more than enough and wants to reward Joe for his ongoing support."
An exchange occurred between Bench and bar regarding whether it is necessary for a testator to know exactly the nature of the assets being gifted in a Will. In this case, as I shall later note, if I am satisfied that the deceased understood that all of her shares in the Commonwealth Bank were to be bequeathed to the Defendant, it is unnecessary for the Defendant to prove, additionally, that she understood that there were 700 shares the subject of the bequest.
In this respect, I also consider it relevant that the Will was read, in full, to the deceased. (I shall return to this issue later in these reasons.)
Mr Chalmers also gave evidence that he explained that "there was nothing wrong with a bequest to one's Attorney but given that [the Defendant] was her Attorney and also her solicitor that the Law and the ethics of the Legal Profession required that someone independent take the instructions in relation to the preparation of the Will". The deceased responded that the situation resembled some of the strict rules that applied, then, in banking transactions as compared with when she had worked in a bank.
Mr Chalmers reported that the deceased had made a Will the following afternoon (18 May 2012) and, subsequently, provided a copy of the Diary Notes that he had made to the Defendant.
The first Plaintiff confirmed that Mr Chalmers had, in fact, met with the deceased on both 17 and 18 May 2012.
There is no dispute that someone in the Defendant's firm typed out the draft Will that was subsequently signed as the May 2012 Will.
The Defendant received an email from Mr Chalmers on 20 May 2012 "confirming the fact that he attended on [the deceased], formed the opinion that she had testamentary capacity to give the instructions, that she gave those instructions of her own volition and under no influence from any other person to change her Will and that the Will had been executed on 18th May 2012".
On 24 May 2012, the Defendant's secretary collected the original May 2012 Will from Mr Chalmers. Subsequently, she received a Tax invoice, under cover of a letter dated 13 June 2012. Ironically, the first Plaintiff paid the Tax invoice (for $220), at the Defendant's office and at the deceased's request.
When the Defendant next visited the deceased, on 9 August 2012, she said to him: "I saw Mal and signed my new Will ...".
The first Plaintiff says that he did not know the contents of the new Will but it is clear that he did know that the deceased had signed a Will on 18 May 2012. In fact, he had asked Ms Knight (said to be one of the attesting witnesses) whether she was aware that she had signed a Will. (There was some cross-examination of the first Plaintiff about the conversation with Ms Knight following Mr Chalmers leaving but nothing much turns on this. I am satisfied that he had such a conversation with Ms Knight and it is the subject of the conversation, rather than the precise words used by him, which is important.)
Medical Evidence regarding the Deceased
I have earlier referred to the causes of death identified in the deceased's Death Certificate. Otherwise, there was not much evidence concerning the medical condition of the deceased.
Part of Ex. P8 is a letter, dated 13 July 2013, from Dr Graeme Burger, the deceased's treating practitioner, to the Defendant. The letter, relevantly, is in the following terms:
"I do thank you for your request for information regarding [the] competence of [the deceased] when she wrote her will on 18.5.2012.
This is not an easy question to answer.
She had no discussions with me at that time around the subject of making or changing her will...
She was virtually bed-bound at that time although able to mobilise with the help of 2 people to sit in her recliner chair, she was severely sight impaired [and] unable to read or watch television... she spoke in short, simple sentences...
She was aware that her property was of considerable value, she stated a million dollars...
She was oriented in time, person and place. She understood what possessions she owned. As to whether she had the ability to fully comprehend the implications of her will and whether it was made as a fully considered and logical document, I am not able to offer a definitive opinion.
As to the question of legal competence, I feel that the occupational therapist (Ms Barbara Underwood - phone [number included], fax [number included], address PO Box [number included], New Brighton NSW), who saw her and assessed her at that time, might be in a position to offer a more exact opinion."
The Defendant gave evidence that, at the time the deceased made the May 2012 Will, he had informed Mr Chalmers that Dr Burger was to be contacted if Mr Chalmers had "any doubts whatsoever" about "[the deceased's] mental capacity to give Will instructions and execute a Will".
In the email sent to Mr Chalmers on 16 May 2012, the Defendant wrote the following:
"Could I ask you to do the following:
1. Contact Dr Graham Berger [sic] and ascertain [the deceased's] mental capacity;
2. If you are satisfied through your enquiry with Dr Berger [sic], then I would ask that you attend upon [the deceased] ... and have her sign a new Will."
Mr Chalmers accepted that he did not contact Dr Burger.
During Mr Chalmers' cross-examination, the following exchange took place:
"Q. Do you now accept Mr O'Neil [sic] asked you to [contact Dr Burger]?
A. He did.
Q. Did you do that?
A. No.
Q. Why not?
A. It is not my policy to contact the doctor. I have always thought, under testamentary capacity, it is a matter for the Court and a solicitor should take instructions first to ascertain whether a person has the capacity or not. My policy has always been if I have any concerns that is when I contact the doctor
Q. Did you tell Mr O'Neil [sic] that?
A. No I didn't."
In this respect, the Defendant said that he told Mr Chalmers that, ultimately, "he should form his own opinion as to [the deceased's] mental capacity".
There was no evidence in the proceedings of Ms Underwood, the deceased's occupational therapist, to whom reference was made in Dr Burger's letter.
Ms Mardi Knight is identified on the May 2012 Will as one of the attesting witnesses of the deceased's signature on that Will. She is, and has been, since about 2011, employed by Uniting Care Aging - North Coast Region, as an assistant in nursing ("AIN"). She was assigned to the primary care of the deceased between October 2011 and the date of her death. She would attend upon the deceased for approximately seven hours per week, over five days.
Ms Knight describes the deceased, in May 2012, as not bed-ridden, but requiring assistance to move from her bed, as somewhat "frail", and "usually alert, unless she was experiencing pain", when she would become confused and her cognition levels would deteriorate. Whilst the deceased was not totally blind, she did have what Ms Knight described as a "high level sight defect". Ms Knight says that the deceased, nevertheless, maintained an "awareness of things around her".
The Defendant accepted that the deceased was "partially blind" but said that he had observed her reading with the aid of a magnifying glass.
The Execution of the May 2012 Will - Formal Requirements
I note that s 6 of the Act provides:
"A will is not valid unless:
(a) it is in writing and signed by the testator or by some other person in the presence of and at the direction of the testator, and
(b) the signature is made or acknowledged by the testator in the presence of 2 or more witnesses present at the same time, and
(c) at least 2 of those witnesses attest and sign the will in the presence of the testator (but not necessarily in the presence of each other)."
Whether the May 2012 Will, in fact, was properly executed in accordance with the formal requirements set out in the Act, subject to what is said below, was at issue between the parties in the proceedings (until the second day of the hearing).
There is no dispute that the deceased signed the original of the May 2012 Will. While Ms Knight said that she only "assumed" that the signature was that of the deceased, I am, nevertheless, satisfied that the deceased did sign the Will. Mr Chalmers confirms that he observed her doing so and there was no challenge to this aspect of his evidence.
The issue about due execution raised by the Plaintiffs related to the circumstances surrounding the witnessing, and attestation, by the attesting witnesses, being Mr Chalmers and Ms Knight, of the deceased's signature on the May 2012 Will.
Each of the attesting witnesses provided affidavit evidence in relation to his, and her, recollection, respectively, of the events. They were both, also, cross-examined at the hearing. (Ms Knight had also made a written statement and a statutory declaration in relation to events surrounding the execution of the May 2012 Will, both of which are dated 17 December 2012. A copy of each of those documents was tendered, respectively, as Ex. P5 and Ex. P6 in the proceedings.)
Although there was some criticism made of the evidence of each of the witnesses, so far as it related to the circumstances of the execution of the May 2012 Will, I am satisfied that each, respectively, was endeavouring to give his, and her, best recollection of the events that occurred.
There was some dispute about some of the other events that occurred on 17 and 18 May 2012. However, it is unnecessary to decide, except, perhaps, on one matter, whose recollection about those events is better, or which of the witnesses I should believe, where the evidence is in conflict. (The extent to which even that one matter is still at issue is addressed later in these reasons.)
The one matter that, initially, required determination was whether Ms Knight actually observed the deceased sign the May 2012 Will. She said, in her affidavit, and maintained, at the hearing, that she did not see the deceased sign, as she was not present with Mr Chalmers and the deceased when the deceased signed. Mr Chalmers had said, in his affidavits, that she was present and had the opportunity to observe the deceased sign the Will.
However, the evidence concerning the circumstances of each of the witnesses signing the May 2012 Will goes very much to resolving the question whether it was duly executed. On this topic, the evidence of each was essentially the same. Ms Knight gave the following evidence, in answers to some questions from the Bench (T43 - T44):
"Q. I think you said that you signed the document at the kitchen bench?
A. Correct.
Q. How far is it do you think from where you were standing when you signed the document to where the deceased was sitting?
A. Around the corner.
Q. In metres, would it be more than three or four metres?
A. Probably from me to her.
Q. To the barrister?
A. Yes.
Q. We agree it's about five metres or so; is that about right Ms Smith?
SMITH: Four metres.
HIS HONOUR: Four metres or so.
Q. From where you were standing when you signed the document; could you see [the deceased]?
A. No.
Q. Is that because there was a corner?
A. Yes.
Q. You also said that you knew it was her signature. Had you seen her sign documents before?
A. No. I assumed it was her signature.
Q. At any time after you signed the document, did the deceased say anything to you about her having signed the document?
A. No.
Q. Did she subsequently say anything to you about having signed the document?
A. No."
Mr Chalmers gave the following evidence in answer to some questions from the Bench (at T71 - T72):
"Q. As I understand what you have said today and in your affidavits is that you spoke with Ms Knight upon your arrival?
A. Upon my arrival, that is correct.
Q. You then spoke with the deceased?
A. Yes, that is correct.
Q. Could you tell me then what was the sequence of events?
A. After that, I went to the door and called Mardi Knight in and said 'I am ready for you now' [and] she came in.
Q. Just a second; yes?
A. She came inside and I went to the side of [the deceased] and placed the Will on the tray and got her to sign, pointed with my finger and then, after she had signed that, that is when I said to Mardi Knight 'you will have to go into the kitchen' and I went into the kitchen. I didn't let her read it, I flicked it through, I signed second because it is always my policy to sign second so I can double check the witness has not missed a page and, at that particular point in time, two other people arrived as I have referred to in my notes.
Q. So they arrived before Ms Knight had signed?
A. No after, just as I was finishing tidying up and putting it all together.
Q. You signed second, then what happened?
A. That is when the other people arrived.
Q. Sorry you have not told me when Ms Knight signed?
A. She signed first and I followed her.
Q. I see. I think you agreed with Ms Smith that the deceased was not immediately there, is that right?
A. Technically, no she wasn't, no.
Q. And she was sitting where she had been when you signed and when Ms Knight signed?
A. That is correct.
Q. Are you able to tell me how far away the deceased was when you and or when Ms Knight and then you signed?
A. Would have been three metres I suppose, two to three metres. Look, it wasn't a great distance, she could hear us talking and everything. Probably three metres.
Q. And it is difficult for me to see the room but was she right there in your presence or was she in another part of the house?
A. Well she couldn't see us, I accept that, yes.
Q. Do I take it you could not see her either?
A. No."
I am satisfied that, by the last answer, Mr Chalmers meant that he could not see the deceased either at the time that Ms Knight signed, or when he signed, the May 2012 Will. In those circumstances, even if the deceased's signature was made by the deceased in the presence of both Mr Chalmers and Ms Knight who were present at the same time, those two witnesses did not attest and sign the May 2012 Will in the presence of the deceased.
At the beginning of the second day of the hearing, Ms R Kako, counsel for the Defendant, conceded that the evidence from the previous day raised a real question regarding whether Ms Knight had actually observed the deceased sign the Will and, also, whether Ms Knight and/or Mr Chalmers each made her, and his, signature in the deceased's presence. The transcript (at T82-83) records:
"KAKO: On the point of presence, I have looked at the authority overnight there. There's a question about what it means to be present and when the deceased had an opportunity to see what was happening had she chosen to. In the light of the evidence that fell yesterday, we don't press the point as [to whether] it was or [was] not... in her presence.
HIS HONOUR: That means that you have to proceed under section 8.
KAKO: Yes."
The concession in the above passage was well made: In the Will and Codicil of Callow [1918] VLR 406; In the Will of Morgan [1950] VicLawRp 58; [1950] VLR 335.
If the concession had been made earlier, there would have been some savings in costs, time and resources. For example, it would probably have been unnecessary to cross-examine Ms Knight. I mention this as a timely reminder of s 56 of the Civil Procedure Act 2005 (NSW), which promotes the just, quick and cheap resolution of the real issues in the proceedings.
(I should also mention that Ms Knight stated to the first Plaintiff shortly after Mr Chalmers left the house on 18 May 2012, and to the court, that she did not know that what she was signing was a Will. I have no reason to doubt her evidence in this regard, which is, to some extent, corroborated by Mr Chalmers, who admits that he did not identify it as a Will to her. However, nothing turns on this because there is nothing in the legislation that requires either of the attesting witnesses to know that the document he or she attested and signed is a Will.)
The first Plaintiff's Evidence
There was one aspect of the first Plaintiff's oral evidence that I have found significant. During cross-examination, he was asked questions about a complaint that had been made to the Law Society of Queensland about Mr Chalmers' conduct. (The statement made by the first Plaintiff in support of the complaint, which was in writing, was tendered as Ex. D6 in the proceedings. I shall return to this document shortly.)
The following passage of evidence then occurred in cross-examination:
"Q. And you had thought that [the deceased] understood what those meetings were about on both days?
A. Yes.
Q. That is what you told the Queensland Law Society?
A. Yes.
Q. In July 2013, what is your answer?
A. Yes. If it is written down that is what I said.
...
Q. You instructed your lawyers to change the case to allege that [the deceased] didn't know and approve the contents of her will made on 18 May 2012?
A. That is right.
Q. But nothing had changed between the time you gave the statement to the Queensland Law Society and when you instructed your lawyers about your reasons for believing that [the deceased] would have understood what she was doing on 18 May 2012?
A. On the will she knew what she was doing. She knew what she was doing.
Q. You did know or she did know?
A. She did know. She knew what she was doing on that day.
Q. On 18 May?
A. Yes.
Q. The reason why you brought these proceedings was because you wanted Mr O'Neill and Mr Chalmers punished in some way?
A. No, no.
Q. You and your brothers want to see Mr Chalmers punished in some way?
A. For not doing her will correctly, yes.
Q. And you accept, don't you, it was Mr Chalmers who made her will, that 18 May will?
A. I didn't make that decision..."
In Ex. D6, the first Plaintiff had acknowledged that he overheard the Defendant, on one of his visits to the deceased's home, telling the deceased that he could not do a new Will for her because he held her Power of Attorney but that he would get another solicitor to do the Will. Then, about one week later, the deceased informed the first Plaintiff that a solicitor was coming to visit her that day. He observed someone, who he subsequently came to know as Mr Chalmers, attend upon, and speak to, the deceased. After he left, the deceased mentioned to the first Plaintiff that the solicitor would be back the next day.
The Submissions
The Plaintiffs' submissions can be summarised as follows:
(a) The Plaintiffs have standing to bring the claim. This is because the Defendant, as the executor named in the May 2012 Will and the deceased's personal representative, "has failed to act in [the deceased's] best interests, and the best interests of all of the beneficiaries". This is sufficient to constitute "'special circumstances' ... as outlined in Ramage v Waclaw (1988) 12 NSWLR 84".
(b) The deceased did not know and approve of the contents of the May 2012 Will. Any presumption of knowledge and approval is displaced, in this case, by lack of due execution and by the special circumstances outlined in the pleadings.
(c) The onus, thereby, shifts to the Defendant "to affirmatively prove that [the deceased] knew and approved the contents of the [May 2012 Will]".
(d) There is "insufficient certainty" to satisfy the court that the May 2012 Will expresses the deceased's actual testamentary intentions and that the deceased "understood the actual effect of what she was doing".
(e) The Defendant breached the fiduciary duty owed to the deceased by virtue of his position as her solicitor, Attorney appointed under a Power of Attorney, and Enduring Guardian, by causing a Will under which he took a substantial benefit to be drafted.
(f) The Defendant breached an implied term of his retainer with the deceased, which retainer is evidenced by a Costs Agreement entered into in 2009, by taking a substantial benefit under the May 2012 Will in breach of the Revised Professional Conduct and Practice Rules 1995.
The Defendant's submissions can be summarised as follows:
(a) "The Defendant does not admit there are 'special circumstances' within the authority of Ramage v Waclaw (1988) 12 NSWLR 84 to justify the [first] Plaintiff having filed the Summons".
(b) The deceased "had a long held desire (at least from May 2011) to give [the Defendant] initially some, and later, all, of her Commonwealth Bank of Australia shares." This desire was understandable given the friendship between the deceased and the Defendant, the assistance that had been provided by the Defendant to the deceased during the last few years of her life and the fact that, at the time the deceased made the May 2012 Will, "she was unmarried, unpartnered and had no children".
(c) The Defendant "declined to personally accept any instructions" in relation to drafting the May 2012 Will and, in this respect, the deceased was independently advised by Mr Chalmers. Mr Chalmers "disclosed the relevant history and relationship between he and [the Defendant] to [the deceased]".
(d) The grant of Probate in common form, made on 28 May 2013, of the May 2012 Will to the Defendant "carries a presumption of validity ... as does the production of an apparently rational Will duly executed".
(e) There are no suspicious circumstances surrounding the deceased's knowledge and approval of the May 2012 Will. Any suspicious circumstances that might be raised give way to the fact that "the evidence adduced by the Defendant is sufficient to satisfy the court of the 'righteousness of the transaction' in that respect. The court can comfortably find the deceased knew and approved of the contents of her Will".
(f) There was no breach of fiduciary duty by the Defendant and, even in the event that there was, "the Plaintiff[s] ha[ve] adduced no evidence of loss or damage to the estate".
(g) There was no retainer between the Defendant and the deceased at the time she made the May 2012 Will. The Costs Agreement relied upon, in this respect, by the Plaintiffs does "not evidence a retainer". As there is no retainer, there can be no breach. In the event that there is found to be a retainer, there is no breach thereof. In the event that there is found to be a breach, "the Plaintiff[s] ha[ve] adduced no evidence of loss or damage to the estate".
(h) If the May 2012 Will was not properly executed, it should be admitted, pursuant to s 8 of the Act, as a document not executed, or witnessed in conformity with the formal requirements of s 6(1) of the Act, which the deceased "intended ... to be her testamentary act ... to have present operation as a Will: Re Estate of Masters (Deceased); Hill v Plummer (1994) 33 NSWLR 446, at 455."
The Law
Although I have set out some of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions.
Wills can be proved in two ways; being a grant in common form or a grant in solemn form. A grant, in either form, is a judicial act, and becomes an order of the court: Kuhl v Liebcheschel [1933] SASR 394, at 398. In the case of a grant in common form, the grant is revocable. The grant, in this respect, is not conclusive, and any person whose interest is adversely affected by the grant remains entitled to have the Will proved in solemn form: Jolley v Jarvis [1964] P 262; [1964] 1 All ER 596, at 272; In the Will of England (1900) 22 ALT 86; Re Levy [1953] VLR 652; Tsagouris v Bellairs [2010] SASC 147, at [35].
Lindsay J, in Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786, at [63], has added:
"The absence of the words 'in solemn form' is not necessarily indicative of a grant in common form: Mortimer v David; Estate Dawn Audrey Day, deceased [2005] NSWSC 1166 at [28]. A grant made, on notice to all interested persons, after hearing evidence bearing on the validity of a will, could aptly be described as a grant 'in solemn form' notwithstanding the absence of those words in the instrument of grant. The difference between common and solemn form grants is more than merely formulaic."
In order to obtain a grant of Probate in solemn form, the party propounding the relevant Will, is required to call at least one of the attesting witnesses to prove due execution: In re Munn [1943] SASR 304; Oakes v Uzzell [1932] P 19; (1931) 100 LPJ 99. The evidence of the attesting witness may be given by affidavit: Palin v Ponting [1930] P 185.
The jurisdiction of the Supreme Court to grant probate was confirmed by s 33 of the Probate and Administration Act 1898 (NSW). That jurisdiction includes the jurisdiction to revoke a grant of probate: Bates v Messner (1967) 67 SR (NSW) 187; Mavrideros v Mack [1998] NSWCA 286; 45 NSWLR 80.
Section 4(1) of the Act defines "Will" as including "a codicil and any other testamentary disposition".
In the case of a grant in solemn form (with exceptions concerning fraud, discovery of a later Will, or mistake in making the original grant), the grant of Probate is said to be irrevocable. Or, as was put in Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757 by Campbell JA, at [7]:
"The situation is rather that a grant in solemn form is binding on the parties to the probate suit in which it was granted, on anyone who has been cited to see the proceedings, and also on anyone of full capacity who has an interest and knows of the proceedings but chooses not to intervene: Osborne v Smith (1960) 105 CLR 153; Williams, Mortimer and Sunnucks, op cit p 270."
Lindsay J has comprehensively dealt with the distinctions, and provided an admirable historical analysis of the difference between common form and solemn form grants and the circumstances in which each type of grant may be revoked in Estate Kouvakas; Lucas v Konakas. It is not necessary to repeat the conclusions to which he came in this case, since the Defendant has, in effect, joined in seeking an order for the revocation of the grant in common form and has sought a grant in solemn form of the May 2012 Will.
In my view, subject to the proportionality of costs, to which I shall later refer, it is appropriate to determine the question of which is the last valid Will of the deceased and make a grant of Probate in solemn form.
Section 8 of the Act
In view of the acceptance of the conclusion that the May 2012 Will was not duly executed, and as the deceased died in 2012, these proceedings are governed by s 8 of the Act, rather than by s 18A of the Probate and Administration Act. Section 8 applies to wills whether made before, on, or after, 1 March 2008, if the deceased died on, or after, that date: Schedule 1, Clause 3(3) of the Act.
Section 8 of the Act provides:
"(1) This section applies to a document, or part of a document, that:
(a) purports to state the testamentary intentions of a deceased person, and
(b) has not been executed in accordance with this Part.
(2) The document, or part of the document, forms:
(a) the deceased person's will - if the Court is satisfied that the person intended it to form his or her will, or
(b) an alteration to the deceased person's will - if the Court is satisfied that the person intended it to form an alteration to his or her will, or
(c) a full or partial revocation of the deceased person's will - if the Court is satisfied that the person intended it to be a full or partial revocation of his or her will.
(3) In making a decision under subsection (2), the Court may, in addition to the document or part, have regard to:
(a) any evidence relating to the manner in which the document or part was executed, and
(b) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person.
(4) Subsection (3) does not limit the matters that the Court may have regard to in making a decision under subsection (2).
(5) This section applies to a document whether it came into existence within or outside the State."
The Act does not comprehensively define a Will. As noted above, s 3(1) of the Act simply defines "Will" as including "a codicil and any other testamentary disposition". It is not necessary that the document said to be a Will should assume any particular form, or be couched in language technically appropriate to its testamentary character. It is sufficient if it is intended to dispose of property, or of rights of the deceased, in a disposition that is to take effect upon death, but, until then, is not to take effect but is to be revocable.
Although usual, it is not legally essential to find a clear statement identifying the document as a Will: Romano v Romano [2003] NSWSC 436, per Bryson J, at [6] - [8]. In this case, however, the May 2012 Will was clearly described as such.
It will be observed that s 8(3) permits a wider enquiry than the analysis of the form and content of the subject document. The sub-section enables the court to consider evidence of the manner in which the document was executed as well as the deceased's testamentary intentions and statements made by her or him. Those necessarily contemplate sources extraneous to the subject document itself.
It has been noted by Slattery J in Yazbek v Yazbek [2012] NSWSC 594:
"[77] There is no substantive difference between Succession Act, s 8 and its legislative predecessor Probate and Administration Act1898 (NSW), s 18A. Since the commencement of Succession Act, s 8 this Court has continued to apply the cases considering the requirements of Probate and Administration Act1898 (NSW), s18A: cf Bell v Crewes [2011] NSWSC 1159 at [23] per White J; Stone & Drabsch v Pinniger [2011] NSWSC 795 per Nicholas J; National Australia Trustees Ltd v Fazey; The Estate of Nancy Elaine Lees [2011] NSWSC 559 at [16] - [17] per Windeyer AJ; Vincent Zang v Deborah Middleton [2011] NSWSC 881; The Estate of Keith Joseph Cook [2011] NSWSC 881 at [7] per Slattery J; Cornish v O'Dell; In the Estate of O'Dell [2010] NSWSC 678 per Slattery J; Estate of Johnston [2010] NSWSC 382 at [5] per Slattery J.
[78] The requirements for execution under Probate and Administration Act, s 18A and therefore Succession Act, s 8 are well established: (a) there must be a document; (b) which purports to state the testamentary intentions of the deceased; and, (c) which the deceased intended to form his will. These principles are discussed in Estate of Masters (1994) 33 NSWLR 446 per Kirby P and Hatsatouris v Hatsatouris [2001] NSWCA 408, at [56] per Powell JA and the cases described in the previous paragraph."
In ReEstate of Masters (Deceased); Hill v Plummer (1994) 33 NSWLR 446, Mahoney JA, at 462, wrote:
"Secondly, s18A should, as I have indicated, be given a beneficial application. There are, in the history of this branch of the law, many cases in which the intention of the deceased has not been able to be given effect. That is an evil which should be remedied as far as may be. It may be understood why the legislature decided not to give testamentary effect merely to any statement of testamentary wishes, however casually stated and even if it was not contemplated that legal results would follow. The consequences of that as far as concerns proof and otherwise, can well be imagined. But the benefits of the change should not be withheld by requiring too rigid a manner of proof that what was put in a document should have legal effect. If a document is on its face such as contemplates legal effect, ordinarily it should be given effect unless - as in this case - there are contexts or circumstances that lead to the contrary conclusion."
(While Mahoney JA dissented in the result of that case, the majority did not disagree with his Honour's exposition of the law, which seems no different in principle to those propositions of law articulated by the majority.)
Even earlier, in speaking of the similar legislation in Western Australia, Nicholson J, in In the Will of Lobarto Shields v Caratozzolo (1991) 6 WAR 1, at 8, observed:
"The plain and natural meaning of s (32) read in conjunction with s 8 permits it to be applied (where the evidence permits it) to validate a document unsigned by the testator."
Slattery J, in In the Estate of O'Dell [2010] NSWSC 678, at [33], wrote that the "Succession Act s 8 should not be applied with too stringent a requirement of proof that a propounded document otherwise clearly embodying the testamentary intentions of the deceased does constitute his will", citing Kirby P in Re Estate of Masters (Deceased); Hill v Plummer. The section is curative of any technical non compliance with the part of the Act dealing with execution. This should not be taken to mean, however, that the statutory formalities enshrined in the Act are to be unduly relegated in importance: Belcastro v Belcastro [2004] WASC 111, at [6]; Estate of Peter Brock [2007] VSC 415; (2007) 1 ASTLR 127, at [20].
In Re Estate of Masters (Deceased); Hill v Plummer, Priestley JA, at 466, wrote that the particular questions for determination, are "essentially questions of fact".
The burden of proof of all issues relating to s 8 is on the party propounding the informal document and is to be satisfied on the balance of probabilities. In deciding whether it is so satisfied, without limiting the matters that may be taken into account, the court is required to take into account that these are Probate proceedings (the nature of the cause of action); that the size of the estate is substantial, but not large (the nature of the subject matter of the proceeding); and the difference between the two documents, being the March 2012 Will, propounded by the Plaintiffs, and the May 2012 Will, propounded by the Defendant (the gravity of the matters alleged): s 140 Evidence Act1995 (NSW).
In this regard, however, there can be no doubt, and the parties agreed, or accepted, in the present case, that the May 2012 Will:
(i) Was a "document", within the meaning given to the term by Interpretation Act1987 (NSW), s 21, which includes (a) anything on which there is writing, or (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them.
(ii) Was not executed, or witnessed, in conformity with the formal requirements of s 6(1) of the Act. (Execution "is the validation of a document by going through the formalities required by law for that purpose": Estate of Williams, Deceased (1984) 36 SASR 423, at 425.)
(iii) Purported to state the testamentary intentions of the deceased.
In regard to the last matter, reference should be made to Re Broad; Smith v Draeger [1901] 2 Ch 86, at 91 - 92, in which Kekewich J, in dealing with a marriage settlement which provided that property should be disposed of as the wife should direct, or appoint, by deed, will or codicil, or any writing in the nature of or "purporting to be a will" or codicil, said:
"What is the meaning of the expression 'purporting to be' a will or codicil? ... [T]he question here is whether a document which is in form and substance a will, but which, because it was not duly executed as such, fails to be a will, in the legal sense, is or is not a document which 'purports', to be a will... This document... is on the face of it a disposition of property made in contemplation of death, and it only fails to be a will because the maker of it did not comply with the requirement of the Wills Act that the witnesses should be present when she signed it. I think, therefore, that I must hold that this document... is one which 'purports' to be a will."
In Kalamunda Meat Wholesalers Pty Ltd v Reg Russell & Sons Pty Ltd [1994] FCA 1059; (1994) 51 FCR 446, at 452, Hill J, in dealing with the (now repealed) Corporations Law 1989 (Cth), said:
"The word 'purport' is defined relevantly in the Macquarie Dictionary (2nd Rev Ed) as:- '1. To profess or claim: 'a document purporting to be official'. 2. To convey to the mind as the meaning or thing intended; express; imply.'"
In Re The Estate of Masters (Deceased); Hill v Plummer, Priestley JA pointed out, at 469, that:
"A document in which a person says what that person intends shall be done with [his/her] property upon death seems to me to be a document which embodies the testamentary intentions of that person."
In Yazbek v Yazbek, Slattery J said, at [83]:
"Testamentary intentions are an expression of what a person wants to happen to his or her property upon death: Re Trethewey [2002] VSC 83 at [16] per Beach J. In the context of informal wills 'a document in which a person says what that person intends shall be done with that person's property upon death seems... to be a document which embodies the testamentary intentions of that person': Re Estate of Masters (1994) 33 NSWLR 446 at 469 per Priestley JA. Furthermore, although dissenting in the decision, Mahoney JA defined testamentary intentions as 'how property is to pass or be disposed of after... death': Re Estate of Masters (1994) 33 NSWLR 446 at 455 per Mahoney JA."
As outlined above, reference was also made, in the pleadings and during the proceedings, to sections of the code regulating solicitors' conduct. The code operative at the time the May 2012 will was made was the Revised Professional Conduct and Practice Rules 1995. (That has now been replaced by the New South Wales Professional Conduct and Practice Rules (Solicitors' Rules) 2013, although there has been no significant change to the provisions relevant to this case: see Rule 12 of the New South Wales Professional Conduct and Practice Rules (Solicitors' Rules) 2013.)
Rule 11 of the Revised Professional Conduct and Practice Rules 1995 was as follows:
"11. Receiving a benefit under a will or other instrument
11.1 A practitioner who receives instructions from a person to draw a Will appointing the practitioner an Executor must inform that person in writing before the client signs the Will-
11.1.1 of any entitlement of the practitioner or of a practitioner who is the attorney of the nominated executor to claim commission;
11.1.2 of the inclusion in the Will of any provision entitling the practitioner or of a practitioner who is the attorney of the nominated executor, or the practitioner's firm, to charge professional fees in relation to the administration of the Estate, and;
11.1.3 if the practitioner has an entitlement to claim commission, that the person could appoint as Executor a person who might make no claim for commission.
11.2 A practitioner who receives instructions from a person to -
11.2.1 draw a will under which the practitioner or an associate will, or may, receive a substantial benefit other than any proper entitlement to commission (if the practitioner is also to be appointed executor) and the reasonable professional fees of the practitioner or the practitioner's firm; or
11.2.2 draws any other instrument under which the practitioner or an associate will, or may, receive a substantial benefit in addition to the practitioner's reasonable remuneration, including that payable under a conditional costs agreement, must decline to act on those instructions and offer to refer the person, for advice, to another practitioner who is not an associate of the practitioner, unless the person instructing the practitioner is either:
11.2.3 a member of the practitioner's immediate family; or
11.2.4 a practitioner, or a member of the immediate family of a practitioner, who is a partner, employer, or employee, of the practitioner.
11.3 For the benefit of this rule:
'substantial benefit' means a benefit which has a substantial value relative to the financial resources and assets of the person intending to bestow the benefit."
Relevantly, the Rules defined "associate" as:
"(a) a partner, employee, or agent, of the practitioner;
(b) a corporation or partnership in which the practitioner has a significant beneficial interest;
(c) in the case of a solicitor corporation, a subsidiary corporation;
(d) a member of the practitioner's immediate family."
Determination
As I have stated, in view of the concession made by counsel for the Defendant concerning the execution of the May 2012 Will, and in any event, I am satisfied that it was not duly executed in accordance with the Act. In those circumstances, I turn to whether I am satisfied that it is a document to which s 8 of the Act applies.
It is clear that the instructions for the May 2012 Will were given, directly, by the deceased to Mr Chalmers. On each occasion that he took instructions from her, no one else was present with them. In particular, the Defendant was not present.
There is no suggestion that the deceased had any difficulty conversing with Mr Chalmers, or that she was otherwise than fully aware of the reason for him being present. The evidence of the first Plaintiff confirms that this was so.
The Defendant's duty to the deceased, as her solicitor, was to ensure that her true testamentary wishes were faithfully carried out. This he endeavoured to do by the involvement of Mr Chalmers. There is no suggestion that the Defendant procured the May 2012 Will by fraud. It is to be remembered, also, that there remains no assertion by the Plaintiffs of undue influence. Any such assertion, previously made, was abandoned.
In all the circumstances, I am satisfied that the May 2012 Will purported to state the testamentary intentions of the deceased; that it had not been executed in accordance with the Act; and that the deceased intended the May 2012 Will to form her Will. Accordingly, it is a document to which s 8 of the Act applies.
I am satisfied that this is not a case in which the solicitor who is to receive a significant bequest under a Will actually prepared the Will for the deceased. Nor is it a case in which another solicitor simply nominally acted for the deceased, in preparing a will in accordance with instructions given to him, not by the deceased herself, but by the solicitor/beneficiary.
Mr Chalmers took instructions from the deceased and drafted the May 2012 Will in accordance with the instructions that he had been given by her on 17 May 2012. On 18 May 2012, he read the contents of the Will to her. Whilst this is not, necessarily, conclusive, he did appreciate, because of the bequest made to the Defendant, that the deceased needed to know, and to understand, the contents of the Will and to approve of them. (I note that there was really no challenge to his evidence about the nature of the conversations that he had with the deceased.)
The giving of the instructions for the making of a Will by someone having testamentary capacity is evidence that the deceased knew of the terms of the Will that was to be prepared for her signature. That she then signed it, following its contents being read to her, also supports her knowledge and approval of its contents.
The first Plaintiff does not suggest that the deceased was not alert and appropriate in her level of presentation and understanding. To the contrary, he accepts that she "knew what she was doing". Indeed, there is no really no evidence of any indication given by the deceased to Mr Chalmers of any lack of understanding or lack of approval of the contents of the May 2012 Will.
In addition, there is no evidence to even suggest that the deceased was a person who was easily led or who was susceptible to pressure. She was "always ... very private about financial affairs". Furthermore, the first Plaintiff said that she made clear that she "would not have anyone near her when she was making a will... other than the people that needed to be there" (T117).
Furthermore, the terms of the May 2012 Will were, and the only significant change made from the March 2012 Will was, relatively simple. Its provisions are clearly expressed. There is no reason to doubt the deceased's capacity to have grasped their plain meaning.
It is important to note, also, that the amendments made to the last three Wills of the deceased related to the disposition of the shares, or some of them, held by the deceased in the Commonwealth Bank. Otherwise, the terms of these Wills demonstrated a relatively consistent pattern.
It is almost impossible to think, bearing in mind the terms of the last three Wills of the deceased, that, in relation to the bequest of the shares, the deceased did not understand the difference between leaving "100 shares" to the Defendant and leaving him "all of the shares".
As stated above, it is clear that the deceased knew that she was making a will. She demonstrated a conscious decision to make it, and, in my view, she knew of, and approved, its terms. I am also satisfied that Mr Chalmers read the draft of the May 2012 Will to her and that she appeared to understand it. There is no sufficient basis to find his evidence, in this regard, unreliable or incredible.
I am also satisfied that the bequest made to the Defendant by the deceased of all of the shares was an exercise of her right to do as she pleased with her own property. The uncontroverted evidence is that she regarded the bequest as a deserved reward for all that the Defendant had done, and was doing, for her. This reason had been expressed to the Defendant more than once and repeated by her to Mr Chalmers. The reason, which reflected other evidence in the case, was well capable of justifying the decision the deceased made as both rational and considered.
As Gleeson CJ wrote, in Easter v Griffith (1995) 217 ALR 284, at 290, "the power freely to dispose of one's assets by will is an important right, and a determination that a person lacked (or has not been shown to have possessed) a sound disposing mind, memory and understanding is a grave matter".
In relation to the submission regarding the deceased's recollection about the number of shares that she held in the Commonwealth Bank, I note the following passage in Kerr v Badran [2004] NSWSC 735, per Windeyer J, at [49]:
"In dealing with the Banks v Goodfellow test it is, I think, necessary to bear in mind the differences between life in 1870 and life in 1995. The average expectation of life for reasonably affluent people in England in 1870 was probably less than 60 years and for others less well off under 50 years: the average life expectation of males in Australia in 1995 was 75 years. Younger people can be expected to have a more accurate understanding of the value of money than older people. Younger people are less likely to suffer memory loss. When there were fewer deaths at advanced age, problems which arise with age, such as dementia, were less common. In England in 1870, if you had property it was likely to be land or bonds or shares in railway companies or government backed enterprises. Investment in ordinary companies was far less common than now. Older people living today may well be aware that they own substantial shareholdings or substantial real estate, but yet may not have an accurate understanding of the value of those assets, nor for that matter, the addresses of the real estate or the particular shareholdings which they have. Many people have handed over management of share portfolios and even real estate investments to advisers. They may be quite comfortable with what they have; they may understand that they have assets which can provide an acceptable income for them, but at the same time they may not have a proper understanding of the value of the assets which provide the income. They may however be well able to distribute those assets by will. I think that this needs to be kept in mind in 2004 when the requirement of knowing 'the extent' of the estate is considered. This does not necessarily mean knowledge of each particular asset or knowledge of the value of that asset, or even a particular class of assets particularly when shares in private companies are part of the estate. What is required is the bringing of the principle to bear on existing circumstances in modern life."
The bequest in the May 2012 Will was not one encouraged by the Defendant as evidenced by the delay between the first time she first raised the idea of making a bequest to him of half the shares, and when the May 2012 Will was signed. Nor is there any suggestion that the Defendant, at any time, before or after her first conversation on this topic, may have sought to persuade her to that course.
Nor was the bequest of such a value that one would consider, on that basis alone, that greater suspicion is raised. Nor was it submitted that Mr Chalmers encouraged the bequest on either occasion that he conferred with the deceased.
In determining whether there was knowledge and approval, the court engages in an holistic exercise based on the evaluation of all of the evidence. Even if, in this case, one starts with initial suspicions, including that the Defendant, who was the solicitor for, and Attorney of, the deceased, received a benefit under the May 2012 Will, without the deceased, who was of advanced age, having been medically examined, in circumstances where the May 2012 Will was not duly executed, and where Mr Chalmers, the solicitor who took instructions, was well known to, and a close friend of, the Defendant, having read and heard all of the evidence, including the evidence of the first Plaintiff, and after subjecting the evidence of the Defendant and Mr Chalmers (in particular), to a vigilant and jealous examination, all of the suspicions have been dispelled to my satisfaction.
In my view, the grounds of suspicion elucidated in the pleadings, separately and cumulatively, have been answered. The Defendant has affirmatively established, to my satisfaction, on the balance of probabilities, that the May 2012 Will represents the true wishes of the deceased. A finding that the deceased knew and approved the May 2012 Will must follow.
It is probably unnecessary to deal with the submission that the Defendant acted in breach of his retainer and that he breached his duty as a fiduciary. However, as the Plaintiffs made some submissions, I shall deal with each briefly.
Before one can consider whether there has been a breach of the Defendant's retainer, the scope of that retainer, the duties that were owed by him by reference to the scope of the retainer, and that the solicitor accepted the retainer must be established: Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398, at 418.
In this regard, the first Plaintiff seemed to rely upon the Costs Disclosure provided by the Defendant's firm to the deceased and by her reference to the Defendant as "my solicitor", to establish a general retainer. However, I note that in Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (A Firm) [1979] 1 Ch 384 at 402:
"There is no such thing as a general retainer in that sense. The expression 'my solicitor' is as meaningless as the expression 'my tailor' or 'my bookmaker' in establishing any general duty apart from that arising out of a particular matter in which his services are retained."
In this case, it has not been established that the deceased retained the Defendant to draft a Will for her that contained the bequest of the Commonwealth Bank shares to him. She asked him, on a number of occasions to do so, but he declined. I have earlier referred to the evidence on this topic.
Also, I should mention, again, Rule 11 of the Solicitor's Rules. It seems to me that the purpose of the Rule is to ensure that a testator or testatrix is given full information and advice about a gift to be made to his or her solicitor by his or her Will.
(I shall assume, without deciding, that the bequest of "all my shares in the Commonwealth Bank" was a "substantial benefit".)
In this case, in accordance with Rule 11 of the Solicitor's Rules, the Defendant did decline to act on the deceased's instructions and offered to, and in the events that happened, did, in fact, refer her to another practitioner for advice. (I note that Mr Chalmers does not fall within the definition of "associate" for the purposes of Rule 11.)
Thus, even if it were established that there was a retainer, the evidence reveals that the Defendant declined to accept it, and that, properly, he explained the reasons to the deceased for not accepting the retainer. The first Plaintiff acknowledged that he had heard the explanation given for the Defendant not being able to draft the Will explained to the deceased and the reasons why Mr Chalmers conferred with the deceased.
In my view, the allegation of breach of retainer fails.
Finally, I deal with the allegation that there was a breach of fiduciary duty by the Defendant. It was submitted that the deceased reposed trust and confidence in the Defendant. He was, therefore, in a fiduciary position vis-à-vis the deceased. There was really no dispute about either of these matters. However, it is then necessary for the first Plaintiff to identify the particular obligations owed to the deceased and establish the acts and omissions that amounted to the Defendant's failure to discharge those obligations: Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449, per Brennan CJ, Gaudron, McHugh and Gummow JJ, at 464.
I have set out, above, the pleadings on this issue.
In my view, none of the acts or omissions relied upon are established. Even if they were, I am satisfied that the deceased intended to make the bequest of all her Commonwealth Bank shares to the Defendant, and, in this regard, she gave fully informed consent to Mr Chalmers, who had told her about his friendship and previous professional association with the Defendant, to prepare the May 2012 Will, which was to contain that bequest.
The first Plaintiff relied upon Szmulewicz v Recht [2011] VSC 368, a case very different to the circumstances of the present case. In that case, there was a clause in a Will entitling executors to charge, in addition to professional fees, commission equal to 3.5% of the gross capital value of the estate and 5% of the income received by the executors. One of the two executors was a solicitor who took instructions for the Will and supervised its execution and whose partner drafted the Will. I do not consider that this case assists the first Plaintiff
In this case, the Defendant did not draft the May 2012 Will for the deceased. He declined to do so and referred the matter to Mr Chalmers, who saw the deceased on two different occasions and was satisfied that she wished to make the bequest to the Defendant. I have also found that she knew and approved of the bequest.
Accordingly, the allegation that the Defendant was in breach of his fiduciary duties to the deceased also fails.
Costs
It is to be remembered in this case that the real issue concerned the bequest of all the shares in the Commonwealth Bank owned by the deceased at the date of her death. The first Plaintiff would have been entitled to 600 of those shares, which would have fallen into residue, if the March 2012 Will was found to be the last valid Will of the deceased. Ms Kremmer would have been entitled to the other 100 shares.
It follows that it is the value of the 600 shares, at the date of hearing, at issue. That value was $48,810. It was this amount that each of the first Plaintiff had to gain by victory in the proceedings. The Defendant had slightly more to gain.
If there is to be a further argument about the costs of the proceedings, undoubtedly, even greater costs will be incurred. Neither party, to date, appears to have seriously considered the object of resolving the issues between them in such a way that the cost to them was proportionate to the importance and complexity of the subject matter in dispute. I have no doubt that the costs of the proceedings will far exceed the amount in issue with the result that it is likely to be a pyrrhic victory at best. The determination of costs should proceed as expeditiously and efficiently as possible.
I would encourage the parties to not incur further costs by further argument on that topic. Agreement should, if possible, be reached. However, if they wish to argue about costs, I shall hear the further argument at a mutually convenient time.
In the circumstances, the court:
(a) Orders, with effect from the date of these orders, that Probate in common form of the Will dated 18 May 2012 made by Vera Smith (also known as Sue Smith) ("the deceased") granted on 28 May 2013 be revoked.
(b) Orders that the Registrar cancel the original Probate document, delivered by the Defendant and retained in the court file.
(c) Declares that the court is satisfied that the document dated 18 May 2012 ("the May 2012 Will") purports to state the testamentary intentions of the deceased, and that it has not been executed in accordance with Part 2.1 of the Succession Act 2006.
(d) Declares that the court is satisfied that the May 2012 Will forms the deceased's Will and that the deceased intended it to form her Will.
(e) Orders, subject to compliance with the rules of court, that Probate, in solemn form, of the May 2012 Will be granted to the Defendant.
(f) Orders that the matter be remitted to the Registrar to complete the grant.
(g) Orders that the balance of the further amended Statement of Claim be dismissed.
(h) Orders that the balance of the Cross-Claim be dismissed.
(i) Invites the parties to make submissions on costs within 7 days following the delivery of reasons for judgment and the issue of costs shall then be determined.
(j) Orders that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.
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Decision last updated: 29 August 2014
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