Trustee for the Salvation Army (NSW) Property Trust v Becker
[2007] NSWCA 136
•15 June 2007
NEW SOUTH WALES COURT OF APPEAL
CITATION: Trustee for the Salvation Army (NSW) Property Trust & Anor v Becker & Anor [2007] NSWCA 136
This decision has been amended. Please see the end of the judgment for a list of the amendments.
FILE NUMBER(S):
40538/06
HEARING DATE(S): 14 & 15 May 2007
JUDGMENT DATE: 15 June 2007
PARTIES:
Trustee for the Salvation Army (NSW) Property Trust trading as the Salvation Army - 1st Appellant
The Australian Council of the Royal Flying Doctors Service of Australia - 2nd Appellant
Reginald Alfred Becker - 1st Respondent
Public Trustee of New South Wales - 2nd Respondent
JUDGMENT OF: Mason P Ipp JA McColl JA
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): 3332/03
LOWER COURT JUDICIAL OFFICER: Nicholas J
LOWER COURT DATE OF DECISION: 25 July 2006
LOWER COURT MEDIUM NEUTRAL CITATION:
Reginald Alfred Becker v Public Trustee of New South Wales & 2 Ors [2006] NSWSC 743
Reginald Alfred Becker v Public Trustee of New South Wales & 2 Ors [2006] NSWSC 1146
COUNSEL:
DE Grieve QC/ CJ Bevan/ E Young - Appellants
LJ Ellison SC/ J Wilcher - Respondents
SOLICITORS:
Mallesons Stephen Jaques - Appellants
Tress Cox Lawyers - 1st Respondent
Public Trustee of New South Wales - 2nd Respondent
CATCHWORDS:
SUCCESSION – wills, probate and administration – validity of a will – knowledge and approval of the will – whether the testatrix approved of the contents of her will – undue influence and fraud – whether such concepts must be pleaded separately – whether the testatrix was coerced into, and did not intend and desire, the impugned disposition – whether the principal beneficiary made a wilfully false statement to gain for herself a benefit under the will – whether there existed a ‘grand plan’ on the part of the principal beneficiary to acquire the primary asset in the will
COSTS – whether the circumstances of this case justified the departure from the ordinary rule regarding costs in probate proceedings, namely, that costs should follow the event – Calderbank offers – whether there existed an element of genuine compromise in certain Calderbank offers made to the charities – whether the charities acted reasonably in continuing the case after the Calderbank offer had been made – whether, generally speaking, there exists a role for offers of compromise in probate actions
LEGISLATION CITED:
CASES CITED:
Abalos v Australian Postal Commission (1990) 171 CLR 167
Barry v Butlin (1838) 2 Moo PC 480
Boyse v Rossborough (1857) 6 HLC 2
Bridgewater v Leahy (1998) 194 CLR 457
Buckley v Maddocks (1891) 12 LR (NSW) Eq 277
Burns
‘Elders and Testamentary Undue Influence in Australia’ (2005) 28(1) University of New South Wales Law Journal 145
Colgate Palmolive v Cussons (1993) 118 ALR 248
Craig v Lamoureux [1920] AC 349
Devries v Australian National Railways Commission (1993) 177 CLR 472
Estate Late Hazel Ruby Grounds
Page v Sedawie
Re [2005] NSWSC 1311
Fox v Percy (2003) 214 CLR 118
Hall v Hall (1868) LR 1 P & D 481
In the Estate of Fuld [1968] P 765
Kerridge
‘Wills Made in Suspicious Circumstances: The Problem of the Vulnerable Testator’ (2000) 59 Cambridge Law Journal 310
Leichhardt Municipal Council v Green [2004] NSWCA 341
Lowe v Guthrie [1909] AC 278
Miller v Jones [1999] NSWCA 467
Nock v Austin (1918) 25 CLR 419
Re Stott [1980] 1 All ER 259
Reginald Alfred Becker v Public Trustee of New South Wales & 2 ors [2006] NSWSC 743
Reginald Alfred Becker v Public Trustee of New South Wales & 2 ors [2006] NSWSC 1146
Revie v Druitt [2005] NSWSC 902
Ridge
‘Equitable Undue Influence and Wills’ (2004) 120 Law Quarterly Review 617
Riding v Hawkins (1889) 14 PD 56
Stanley v Mechler [2004] NSWSC 196
The Public Trustee v Mullane (Unreported
Supreme Court of New South Wales
Powell J
12 June 1992)
White v White & Cato (1862) 2 Sw & Tr 504
Williams v Goude (1821) 1 Hag Ecc 577
Wingrove v Wingrove (1885) 11 PD 81
Winter v Crichton
Estate of Galieh (1991) 23 NSWLR 116
DECISION:
1. Appeal dismissed. 2. Appellants to pay the costs of the appeal.
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
40538/06
MASON P
IPP JA
McCOLL JAFriday 15 June 2007
Trustee for the Salvation Army (NSW) Property Trust & Anor v Reginald Alfred Becker & Anor
Judgment
MASON P: I agree with Ipp JA.
IPP JA:
The claim and cross-claim and the issues on appeal
This appeal concerns the validity of a will executed by Miss Joyce Wilson on 21 February 2002. The will was signed in, or near, the suburb of Balmoral and was referred to throughout the proceedings as the Balmoral will. By the Balmoral will, Miss Wilson, a childless spinster, left her only substantial asset, a house at Mosman worth more than $1 million, to Ms Sandra Abel, a 54 year-old divorcee. Miss Wilson had been friendly with Ms Abel for some seven years.
Miss Wilson died on 30 March 2002 at the age of 80 years. She had only one surviving relative, a cousin who lived in England. She had had no relationship with her cousin.
On 23 January 2002 (that is, prior to the making of the Balmoral will), Miss Wilson had made a will (“the January will”) by which she appointed the Public Trustee her executor and left the whole of her estate to the Salvation Army and the Royal Flying Doctor Service of Australia (“the charities”) in equal shares. Miss Wilson told a witness that she had inherited the house from her father and he wanted her to give it to the charities.
Under the Balmoral will, Mr Reginald Alfred Becker, who had been a friend of Miss Wilson’s for about seven years, was appointed the executor of her estate. Mr Becker brought proceedings claiming an order for the grant of probate of the Balmoral will in solemn form. The charities opposed his claim and cross-claimed for the grant of probate of the January will.
The trial judge, Nicholas J, upheld Mr Becker’s claim and dismissed the cross-claim. His Honour ordered the charities to pay Mr Becker’s costs of the proceedings “up to 4.00 pm 30 June 2006 on the ordinary basis, and thereafter on the indemnity basis”: Reginald Alfred Becker v Public Trustee of New South Wales & 2 ors [2006] NSWSC 1146 at [63]. His Honour further ordered that, to the extent that Mr Becker’s costs were not wholly reimbursed in consequence of the costs order made against the charities, his costs on an indemnity basis be paid out of Miss Wilson’s estate. The charities appeal against his Honour’s decisions.
According to Nicholas J, the charities opposed the grant of probate of the Balmoral will on the following grounds: see Reginald Alfred Becker v Public Trustee of New South Wales & 2 ors [2006] NSWSC 743 at [2]:
“(1) that at the time [the Balmoral will] was signed and attested, Miss Wilson had not approved of its contents, and (2) that it was executed under undue influence”.
In the course of his Honour’s judgment, he made reference to allegations of fraud on the part of Ms Abel. This was necessary as, at trial, the charities contended that Ms Abel had induced Miss Wilson to execute the Balmoral will by fraudulently misrepresenting to her that, without her house, she (Ms Abel) would be “homeless” as she had no money and no means of supporting herself and her dependent children (of which there were then two). This allegation of fraud was not pleaded but was raised as part of written submissions, filed before evidence was led, by counsel then appearing at the trial for the charities. At trial, the charities’ case as regards fraud seems to have been presented primarily as supporting and forming part of the argument that Ms Abel unduly influenced Miss Wilson, and not as a separate defence to Mr Becker’s claim or a separate cause of action in the charities’ cross-claim. Towards the conclusion of his argument on appeal, Mr Grieve QC, who, with Mr Bevan and Mr E Young, appeared for the charities, submitted that the fraudulent misrepresentation alleged should be treated as a separate defence and cause of action. This was a change of position on his part.
Mr Ellison SC, who, together with Mr Wilcher, appeared for Mr Becker, accepted, in effect, that the charities could argue that the Balmoral will should be invalidated on the separate ground of fraud. In substance, he was content to support the judge’s findings that, in fact, there had been no fraud. I will follow suit, and accept that fraud may be so argued, but wish to make it clear that if a party seeks to rely on fraud in a probate suit, the fraud should be separately and properly pleaded, with due particularity.
Essentially, the issues raised on appeal in regard to undue influence and fraud are factual questions and the appeal, in substance, turns squarely on the principles laid down in Devries v Australian National Railways Commission (1993) 177 CLR 472, Abalos v Australian Postal Commission (1990) 171 CLR 167 and Fox v Percy (2003) 214 CLR 118. In regard to those principles, the charities contended only that the judge made findings inconsistent with incontrovertible facts or acted on glaringly improbable evidence.
The facts that were common ground or found by the trial judge
In 1995, Mr Becker, his wife and Miss Wilson were parishioners of the Baptist Church, Mosman. Miss Wilson was in poor health and was living alone at her house in Mosman. From 1995 to about July 2000 (when Miss Wilson was admitted to Royal North Shore Hospital), Mr Becker and his wife assisted Miss Wilson frequently with her banking and shopping and visited her at her home from time to time. Mr Becker did other chores for her and assisted her generally. Other members of the church visited Miss Wilson at her home.
In December 1995, Ms Abel, together with her two sons and a daughter, came to live in a rented flat at Cremorne. She, too, joined the Baptist Church, Mosman, and became a volunteer “frail age group person”. Mr Becker had encouraged members of the congregation to visit Miss Wilson, and, in response, Ms Abel began to visit her at her house in Mosman. They became friendly and Miss Abel became a regular visitor.
In July 2000, Ms Abel became so concerned that Miss Wilson was living alone and in poor health that she arranged for her to be taken by ambulance and admitted to Royal North Shore Hospital. Later, Miss Wilson was transferred to Greenwich Hospital and, on 16 October 2000, to the Harley Nursing Home in Cremorne (“Harley”), where she remained until she died. There she was under the care of a general practitioner, Dr Clifford Hing. As the judge observed, the conditions from which she suffered included asthma, ischaemic heart disease, congestive cardiac failure, diabetes, vascular disease, recurrent painful leg ulcers and back pain. Her mobility was limited and she needed a wheelchair.
On 31 July 2000, Miss Wilson gave the Public Trustee her general power of attorney. On the same day, she made a will appointing the Public Trustee the executor and trustee of her estate and giving her entire estate to the charities. This represented a testamentary change. On 1 December 1967, Miss Wilson had made a will on a newsagent’s will form which had been attested by her neighbours. By that will, the Public Trustee was appointed executor of her estate which she bequeathed to the Royal Institute for Deaf and Blind Children.
While at Harley, Miss Wilson had numerous regular visitors. These included Mr Becker and Ms Abel. Ms Abel visited about twice a week and on many occasions took Miss Wilson for outings, usually to Balmoral for meals at the Bathers Pavilion.
In about December 2000, Ms Abel told Miss Wilson that she and her two children were required to vacate the flat she was then renting. In early January 2001, Miss Wilson consented to Ms Abel and her two children moving into the house. Mr Becker confirmed with Miss Wilson that she wanted this to happen. On 8 February 2001, Miss Wilson advised the Public Trustee that Ms Abel would live in her house. In mid-February 2001, Ms Abel and the children moved in. Since then, Ms Abel has lived continuously in the house.
Ms Abel offered to pay rent to Miss Wilson, but this offer was declined. The term of Ms Abel’s occupancy was not discussed. Ms Abel suggested that she pay the rates, take Miss Wilson out for meals and buy her what she needed. Ms Abel accepted Miss Wilson’s suggestion. Over time, Ms Abel bought Miss Wilson orthopaedic shoes, a coat, dresses and other articles of clothing, as well as meals about once a week for about $50 at the Bathers Pavilion.
During 2001, Ms Abel took Miss Wilson out for several hours at a time, usually on Sundays for a late breakfast at the Bathers Pavilion. After breakfast, Ms Abel would push Miss Wilson along the promenade in her wheel chair. Occasionally, they went together to services at the Baptist Church. In September 2001, Ms Abel arranged a party at the Watermark Restaurant for Miss Wilson’s birthday. On Christmas Day 2001, Miss Wilson was the guest of Ms Abel and her family for several hours.
These were happy and pleasurable occasions for Miss Wilson. A close and affectionate relationship developed between Miss Wilson and Miss Abel. Miss Abel played a significant supportive role in Miss Wilson’s life. This was of special importance to Miss Wilson and she derived much comfort and pleasure from their relationship.
On many of their outings, Miss Wilson stated that she was worried about what would happen to Ms Abel when she, Miss Wilson, died. Miss Wilson said that she wanted Ms Abel to stay in the house after her death. When Ms Abel replied that she could look after herself and, having rented before, could rent again, Miss Wilson replied that renting was too expensive.
In January 2002, at Miss Wilson’s request, Ms Abel purchased a writing pad. On 21 January 2002, whilst visiting Miss Wilson, Ms Abel gave the writing pad to her. Towards the end of the visit, Miss Wilson said she wanted to write a letter to say that Ms Abel could have her house when she died. She then proceeded to write the following:
“To whom it may concern
In the advent [sic] of Joyce Pippa Wilson dying, the house at 28 Wyong Rd, Mosman is be [sic] given to Mrs Sandra Abel birthdate 2/12/48.
Witness Roma Corkanas
Signed and witnessed this 21st day of January 2002”The words below Miss Wilson’s signature were in Ms Abel’s handwriting. The witness, Ms Roma Corkanas, was a nurse at Harley.
Nicholas J accepted Ms Abel’s denial that she formulated the letter of 21 January 2002 or that she had influenced Miss Wilson to write it. Ms Abel did not think that the letter was a will, but a document that expressed Miss Wilson’s intentions.
On 22 January 2002, Ms Lea Cousins, the director of nursing at Harley, learnt that Miss Wilson had written the letter of 21 January 2002. She telephoned the Chatswood office of the Public Trustee and expressed her concern. On 23 January 2002, Mr Stephen Gaal and Miss Lisa Jones, officers of the Public Trustee, visited Miss Wilson at Harley. They reminded Miss Wilson of the will she had made on 31 July 2000 in which she had left her estate to the charities. They asked Miss Wilson whether she wished to give the house to Ms Abel instead. Options whereby Ms Abel could stay in the house were discussed.
In the course of this visit, Ms Abel executed the document referred to as the January will. This will had been prepared in the Public Trustee’s office prior to Mr Gaal and Miss Jones visiting Miss Wilson. They did not take with them any other form of will (despite learning through Ms Cousins that, the day before, Miss Wilson had signed the letter of 22 January 2002 expressing her intention that Ms Abel have the house).
For a period from late January 2002, Miss Wilson was not well enough to go out and Ms Abel continued to visit her at Harley. In mid-February 2002, Ms Abel resumed taking Miss Wilson out for periods limited to about two hours. On these occasions, Miss Wilson stated her concern that, after she died, Ms Abel and her children would have nowhere to live. Miss Wilson expressed her wish that Ms Abel should have the house.
In the course of Ms Abel’s visits and her outings between late January and 21 February 2002, Miss Wilson asked Ms Abel how she could give effect to her wish that Ms Abel should have the house. These conversations led Ms Abel to buy a “home will kit”.
On 21 February 2002, Ms Abel collected Miss Wilson from Harley and took her to the Bathers Pavilion. After lunch, they went to the esplanade. Miss Wilson sat in her wheelchair and Ms Abel on a bench nearby. Miss Wilson asked Ms Abel if she had the will kit and Ms Abel gave it to her. Miss Wilson browsed through the will kit and asked for a pen which Ms Abel gave her. She wrote on the will form attached to the will kit and as she proceeded to complete the form she read it to Ms Abel.
Clause 2 of the will form provided for the appointment of an executor. Miss Wilson asked Ms Abel whether Mr Becker would accept being an executor. Miss Wilson said that the Public Trustee charged a percentage to be an executor, but Mr Becker would not. Ms Abel said that she thought that Mr Becker would agree to be the executor. Miss Wilson thereupon wrote Mr Becker’s name, date of birth, and address in the space provided.
Miss Wilson read out clause 4 as she was writing it. This clause provided that the house be given to Ms Abel. When Miss Wilson came to clause 5 the following conversation took place:
“Miss Wilson: ‘Who should I give the residue to?’
Ms Abel:‘Please Joyce don’t ask me questions about what to write on your will. You write what you want.’
Miss Wilson: ‘I am going to give the residue to Reg Becker, Sandra Abel, the Flying Doctors and the Salvation Army equally.’
Ms Abel:‘Oh Joyce, I am embarrassed that you are giving so much to me.’
Miss Wilson: ‘This is what I want.’”
As Nicholas J pointed out, Miss Wilson made a number of corrections to the will form. This tended to show that she was applying her mind to what she was doing, understood what she was doing, and made deliberate decisions in filling in the form.
After she had finished writing, Miss Wilson read the instructions in the will kit as to signing in the presence of two witnesses. She and Ms Abel then discussed the witnessing of the will. Miss Wilson suggested they visit a Mrs Reid for this purpose on their way back to Harley. Mrs Reid was a friend of Ms Abel and a person known to Miss Wilson. When Miss Wilson and Ms Abel called on Mrs Reid she was not at home. It was then about 2.00 pm, the time for Miss Wilson’s return to Harley. Miss Wilson, however, wished to wait for Mrs Reid. The two women left Mrs Reid’s house, had coffee nearby and returned shortly before 3.00 pm. There they met Mrs Reid and another person, Mrs Sunjic. Mrs Sunjic was Mrs Reid’s housekeeper.
Mrs Reid and Mrs Sunjic each agreed to witness the signing of the will by Miss Wilson. Each watched Miss Wilson sign it while she sat on the passenger seat of Ms Abel’s car. Each then signed and wrote her name and address in the space provided. They described Miss Wilson’s health and condition as normal, and observed nothing unusual about her.
Ms Abel then drove Miss Wilson back to Harley. Miss Wilson handed the will to Ms Abel and asked her to give it to Mr Becker. According to Ms Abel she told Miss Wilson that if she wanted to change the will she should inform the nursing staff and they would then contact the Public Trustee. Nicholas J pointed out that this evidence was not challenged.
According to Ms Abel, when Miss Wilson arrived at Harley she was breathless, not confused, well and happy. The clinical notes of Harley record:
“In good spirits this morning. Out with Sandra to Balmoral for lunch. Returned to unit at 1500 hours very fatigued and breathless, lips cyanotic. Nebuliser and paracetamol given as chartered. Friend returned to unit at 2000 hours to drop off parking authority card. Stayed till 2045 hours.”
The “friend” referred to in the note was Ms Abel.
Miss Wilson kept a diary. Her diary entry for 21 February 2002 recorded that, after she returned from Balmoral that day, a friend, Miss Warren, came to see her (that is, in the early evening). Miss Warren said that she visited Miss Wilson on several occasions at about that time. She did not suggest that she noticed anything unusual about Miss Wilson’s health.
On 27 February 2002, Ms Abel arranged a breakfast party at the Watermark Restaurant to celebrate Mr Becker’s birthday. Miss Wilson participated in the occasion which she enjoyed. There was no evidence that the will was discussed.
On 6 March 2002, Mr Gaal and Miss Jones visited Miss Wilson at Harley. They informed her that the Mosman house was virtually uninhabitable. Miss Wilson agreed with their advice that the house was too dangerous to allow Ms Abel to continue to live there, and that it should be sold. She instructed them to seek vacant possession with a view to sale as soon as possible.
By letter dated 15 March 2002, the Public Trustee’s solicitor wrote to Ms Abel stating that it was necessary to sell the house and requesting her to vacate the premises. He also stated:
“Mrs [sic] Wilson is now very frail and does not wish you to contact her in respect of the house.”
Mr Gaal, in cross-examination, acknowledged that these words were written without instruction and should not have been in the letter. According to Mr Gaal, he knew that Miss Wilson appreciated the contact she had with Ms Abel. Ms Abel’s vacation of the premises was not pursued and she has continued to remain there.
On 30 March 2002, Miss Wilson died in her sleep of heart failure.
The trial judge’s approach to, and findings on, the crucial issues
The charities did not challenge Miss Wilson’s testamentary capacity. Mrs Reid and Mrs Sunjic proved that the Balmoral will was duly executed. These facts created a presumption that Miss Wilson knew of, and assented to, the contents of the Balmoral will: Nock v Austin (1918) 25 CLR 419. This presumption was capable of being rebutted and the charities, indeed, sought to rebut it.
Ms Abel was the only person present when the Balmoral will was prepared, although not when it was executed. Nicholas J observed that, because Ms Abel was the principal beneficiary, it was appropriate to evaluate her evidence with caution and vigilance. This amounted to applying the “suspicious circumstances” rule. His Honour referred to In the Estate of Fuld [1968] P 765 where Scarman J (at 698) expressed the rule as being one:
“… which calls upon the court not to grant probate without full and entire satisfaction that the instrument did express the real intentions of the deceased.”
In the circumstances of this case, the suspicion was that the will was made by reason of fraud or undue influence.
His Honour paid full and careful attention to the requirements expressed in Estate of Fuld. Mr Grieve candidly accepted that if the charities did not succeed in their arguments in relation to undue influence and fraud, the appeal would fail. Thus, the rebuttal of the presumption rested on the charities’ contention that there had been fraud or undue influence on the part of Ms Abel.
Mr Grieve rightly accepted that the charities’ case on appeal depended on the credibility findings of Nicholas J being overturned. In this regard, the judge observed:
“21For the charities it was submitted that Ms Abel was not a credible witness, and her evidence should be found to be generally unreliable. It was put that where objective evidence as to the circumstances of the making of the Balmoral will contradicted hers it should be preferred.
22I observed Ms Abel’s demeanour in the witness box, and have given close consideration to her affidavit and oral evidence with regard to the other evidence in the proceedings. I found her to have been an honest, straightforward and candid witness whose evidence should be generally accepted. In particular, I accept her account of her relationship with Miss Wilson, and as to the circumstances of the making of the Balmoral will to which she adhered during the course of extensive cross-examination. Indeed, there was ample corroboration of her evidence as to the close relationship which existed between her and Miss Wilson form Mr Becker, Mrs Mawson, and Mrs Reid, as well as from the records in the clinical notes and in Miss Wilson’s diary of visits and outings. It was neither challenged nor contradicted. With regard to her cross-examination about the Balmoral will, the general impression I gained was that once an answer was given the quite proper forensic decision was made not to pursue the question further. I am satisfied that her account of the making of the will was consistent with the probabilities.”
His Honour referred to what he described as “peripheral incidents” where there was competing evidence. His Honour did not regard the conflicts that so arose as being of significance.
Nicholas J observed that the very structure and contents of the will, including Miss Wilson’s corrections, demonstrated that she understood what was required to make a will and was able to make the choices necessary for its proper completion. He said (at [67]):
“[t]he structure of the will is rational, simple, and not difficult to follow, and it is understandable that, given her relationship with them, she would wish to benefit Mr Becker and Mr Abel, as well as the charities.”
His Honour said that there was no evidence that, at the relevant time, Miss Wilson was in a state of confusion or distress by reason of her illnesses. The judge relied on the evidence of Dr David Bell, a neuropsychiatrist, which supported this finding.
His Honour referred to evidence, which the charities denied, of words spoken at various times by Miss Wilson to various witnesses and said:
“78In my opinion none of the statements attributed to Miss Wilson on the occasions prior to making the Balmoral will proves that Ms Abel represented to her that she and her children would be homeless and impecunious after her death if the house was not left to her. However else the terms of each may be reasonably understood (in context, where provided), each statement is simply incapable of supporting an inference that Ms Abel made the alleged representation on or about the occasion Miss Wilson’s statement was made, or at all. In my opinion her statements to others of her concern for Ms Able reinforce Ms Abel’s evidence, earlier referred to (paras 29, 32), that Miss Wilson often told her that she worried about what would happen after she died, and that she wanted Ms Abel to have the house. The submissions on behalf of the charities on this issue are rejected.”
His Honour concluded that there was ample evidence that established that Miss Wilson approved of the contents of the Balmoral will and which dispelled any reasonable suspicion which might arise out of Ms Abel’s relationship with her.
About a month before Miss Wilson died, Mrs Mawson, a friend whom Miss Wilson had known for 60 years, visited her at Harley. According to Mrs Mawson, whose evidence Nicholas J accepted, Miss Wilson was crying at the time. The following conversation took place (see [2006] NSWSC 743 at [61]-[62]):
“Mrs Mawson: ‘What’s wrong? Why are you crying?’
Miss Wilson: ‘Sandra forced me to sign a will leaving her my home. I didn’t want to do it. I wanted to leave the will as it was.’
Mrs Mawson: ‘What do you mean? What did she do?’
Miss Wilson: ‘Sandra cried and told me that she and her children would be on the street if I didn’t leave the house to her. What can I do?’
62On 30 March 2002 Mr Beck and Ms Abel visited Mrs Mawson to discuss arrangements for Miss Wilson’s funeral. Mrs Mawson’s evidence, which I accept, was that she had the following conversation with Ms Abel:
Mrs Mawson: ‘Why did you do it Sandra? Why did you make Joyce change her will?’
Ms Abel: ‘Don’t be stupid.’
Mrs Mawson: ‘I found her crying and she said: ‘Sandra’s taking my house and I don’t know what to do about it.’”
In dealing with the conversation with Mrs Mawson, his Honour said:
“80Under cross-examination Ms Abel denied, a number of times, that she encouraged Miss Wilson to think that she would have nowhere to live if she was not given the house, and denied ever making such a suggestion to her. She denied making the alleged representation. Although it was put that her denials should be rejected as false, nothing was referred to which would justify me doing so. She was not shaken in cross-examination. I have found her evidence, generally, should be accepted. I find it improbable that Ms Abel made the statement attributed to her by Miss Wilson. In any event, left to choose between the tested evidence of Ms Abel and the untested statement of Miss Wilson, I prefer Ms Abel’s evidence.
81Support for this conclusion is derived from the absence of evidence of any similar expression of concern or complaint thereafter. Had she in truth come to realise or believe that the Balmoral will was not what she wanted, she had many opportunities to raise the matter with people she trusted e.g., Mr Becker, the nursing staff, or representatives of the Public Trustee. Relevantly, Ms Abel had told Miss Wilson that if she wanted to change the will she should inform the nursing staff who would contact the Public Trustee. It is significant also, in my opinion, that the matter was not discussed on the occasion of the visit by Mr Gaal and Miss Jones to Miss Wilson at Harley on 6 March 2002 when instructions in respect of the house were given.
82Furthermore, Ms Abel gave evidence of her financial position and employment, that she was paying the outgoings for the house, and expenses on outings and other items for Miss Wilson. She was not questioned about her capacity to maintain herself and the children whether she lived in the house or not, or to rent accommodation. There was nothing which supports the likelihood that she would have falsely misrepresented to Miss Wilson that she was impecunious and/or would be homeless if not left the house.
83It follows that the submission that Ms Abel made the fraudulent misrepresentation alleged must be rejected. The case that Miss Wilson was improperly constrained by Ms Abel to leave her the house fails. Further, to the extent that Miss Wilson’s statement is evidence that she was forced to make the Balmoral will against her wishes it is inconsistent with, and outweighed by, the totality of the evidence of the circumstances in which it was made and my findings based upon it. Whatever inspired her to make the statement is a matter of speculation, but I find it to be untrue.
84Accordingly, I am satisfied that Miss Wilson’s statements to Mrs Mawson on an occasion sometime after 21 February 2002 provide no reasonable foundation for a suspicion in light of all the circumstances, that at the time of its execution Miss Wilson did not approve of the contents of the Balmoral will and had been constrained to give the house to Ms Abel against her wishes.”
The arguments advanced by the charities
The charities submitted that Ms Abel had “a grand plan” to acquire the Mosman house. They submitted that Ms Abel set about implementing this plan some twelve months before Miss Wilson died. Step one, they asserted, was the obtaining of possession of the Mosman property. Once this was achieved in February 2001:
“… the plan then involved Ms Abel over time instilling in Miss Wilson’s mind that she, Miss Wilson, was under some duty to leave the home to her, Ms Abel, for the reason that if she didn’t she would be evicted and rendered homeless.”
The charities submitted, “progressive indoctrination took place over a period of some twelve months”.
The charities relied substantially on the evidence of Mrs Mawson and submitted that it established both undue influence and fraud.
The charities submitted that, in the light of the evidence and other factual matters, Nicholas J erred in believing Ms Abel.
The charities submitted that the facts gave rise to inferences contrary to those that Nicholas J drew.
I refer below to the detail of the facts on which the charities relied when discussing the particular submissions he made.
The distinction between fraud and undue influence in probate cases and the need to plead fraud
As I have mentioned, there was some confusion between the issues of fraud and undue influence. It was by no means clear at trial whether the charities were asserting that the fraud was part of the undue influence or that it constituted a separate ground for challenging the will.
There are a number of nineteenth and early twentieth century cases that state or imply that probate undue influence and fraud are the same thing or are bound up with each other. In the great case of Barry v Butlin (1838) 2 Moo PC 480, which is still influential today, Parke B referred, at 491, to:
“[t]he undue influence, and the importunity which, if they are to defeat a will, must be of the nature of fraud or duress …”
In Boyse v Rossborough (1857) 6 HLC 2, the Earl of Halsbury LC said (at 48):
“[I]nfluence, in order to be undue within the meaning of any rule of law which would make it sufficient to vitiate a will, must be an influence exercised either by coercion or by fraud.”
Later his Lordship said that the acts that would constitute undue influence must be either coercion or fraud.
In Lowe v Guthrie [1909] AC 278, Lord James (at 283) accepted that undue influence was, “in other words”, fraud.
It is important, however, to appreciate that undue influence and fraud are two fundamentally different concepts.
Before identifying the principal difference, I would note that the equitable doctrine of undue influence does not apply to testamentary gifts: Boyce v Rossborough; Craig v Lamoureux [1920] AC 349; Winter v Crichton; Estate of Galieh (1991) 23 NSWLR 116. Importantly, probate undue influence differs from the equitable doctrine of undue influence under which the donor may fully intend and desire the transaction even though an inference of undue influence may arise: Bridgewater v Leahy (1998) 194 CLR 457 at 475 per Gaudron, Gummow and Kirby JJ.
Undue influence, in a probate context, is constituted by conduct that overbears the will of the testatrix so that she makes the will without intending and desiring the disposition made thereby. The circumstances must be such that the disposition is not regarded as the free and voluntary act of the testatrix. The volition of the testatrix must be overpowered so that her mind does not accompany her act in making the will. The point was put succinctly in Wingrove v Wingrove (1885) 11 PD 81 by Hannen P (at 82):
“[i]t is only when the will of a person who becomes a testator is coerced into doing that which he or she does not desire to do that it is undue influence”.
See also Hall v Hall (1868) LR 1 P & D 481 where Sir J P Wilde, at 482, described undue influence as the overpowering of the volition without convincing the judgment.
The basic point is that, to prove undue influence, it must be shown that the testatrix did not intend and desire the disposition. It must be shown that she has been coerced into making it. See, generally, Boyse v Rossborough; Buckley v Maddocks (1891) 12 LR (NSW) Eq 277 at 282 per Stephen J; Winter v Crichton; Estate of Galieh.
On the other hand, fraud, sufficient to result in the invalidation of a testamentary instrument, is concerned with misleading or deceptive conduct. With fraud, there is no overpowering of the volition, no coercion. Whereas undue influence coerces a testatrix, fraud misleads her.
Fraud embraces a wide category of conduct affecting testamentary disposition. Relevantly, as regards the present case, in The Public Trustee v Mullane (Unreported, Supreme Court of New South Wales, 12 June 1992), Powell J (at 15) gave the following example of fraud capable of invalidating a will:
“wilfully false statements, or the suppression of material facts, intended, either, to gain for oneself benefits under a will, or to prevent benefits being received by a natural object of the testator’s bounty.”
In White v White & Cato (1862) 2 Sw & Tr 504, Sir Cresswell Cresswell distinguished between undue influence and fraud. He observed that there had been a plea of undue influence in the case but no clear plea of fraud. He is reported, at 506, as having said to counsel:
“If you intend to charge the plaintiff with having obtained the execution of this will by instilling into the mind of the deceased false and delusive notions respecting the conduct of the defendant, this is tantamount to a charge of fraud, and you should have placed on the record a plea charging her with having obtained it by fraud.”
In Riding v Hawkins (1889) 14 PD 56, the court distinguished between undue influence and fraud and required fraud to be separately pleaded.
There are suggestions in In the Estate of Fuld (at 672) and Re Stott [1980] 1 All ER 259 that it may not be necessary to make positive allegations of fraud in probate cases. I disagree with that approach. It is contrary to the modern notion of justice as well as the surprise rule. Consistent with the modern attitude to allegations of fraud, generally, in probate actions fraud must be explicitly pleaded.
The elements of probate undue influence
There has been much academic criticism in recent times of the law relating to challenges to wills made by old and frail testators: see Kerridge, ‘Wills Made in Suspicious Circumstances: The Problem of the Vulnerable Testator’ (2000) 59 Cambridge Law Journal 310; Ridge, ‘Equitable Undue Influence and Wills’ (2004) 120 Law Quarterly Review 617; and Burns, ‘Elders and Testamentary Undue Influence in Australia’ (2005) 28(1) University of New South Wales Law Journal 145. The nub of the criticism is that the law does not provide adequate protection to those affected by a vulnerable testator who is coerced or tricked into making a will. While I recognise that there is force in this view, this is not the case for embarking upon an inquiry into how the law might be changed, even if it were open for this Court, as an intermediate appellate court, to undertake such a task (which I doubt). For the reasons set out below, the primary findings of fact are unassailable and, even if the tests for setting aside wills were to be relaxed in the way that some have suggested, the result, in my view, inevitably, would be the same.
It is, however, appropriate to say something about the elements of probate undue influence and the way in which undue influence of this kind is required to be proved.
As Ms Ridge points out in her article, ‘Equitable Undue Influence and Wills’ (op cit at 628), “a strong theme in the case law on probate undue influence is the social acceptability of lobbying testators for bounty”. An early example of this is Williams v Goude (1821) 1 Hag Ecc 577 where Sir John Nicholl said (at 581):
“The influence to vitiate an act must amount to force and coercion destroying free agency – it must not be the influence of affection and attachment – it must not be the mere desire of gratifying the wishes of another; for that would be a very strong ground in support of a testamentary act: further, there must be proof that the act was obtained by this coercion – by importunity which could not be resisted: that it was done merely for the sake of peace, so that the motive was tantamount to force and fear.”
Another example is Hall v Hall (1868) LR 1 P & D 481 where Sir JP Wilde said (at 482):
“To make a good will, a man must be a free agent; but all influences are not unlawful. Persuasion, appeals to the affections or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like – these are all legitimate, and may be fairly pressed on a testator.”
As was said in Craig v Lamoureux (at 357) by Viscount Haldane, when observing that there was no reason why particular parties may not put their claims before a testatrix and ask for their recognition:
“[t]he persuasion must of course stop short of coercion, and the testamentary disposition must be made with comprehension of what is being done”.
See also Miller v Jones [1999] NSWCA 467 (at [28]) per Beazley JA and Revie v Druitt [2005] NSWSC 902 (at [51]) per Windeyer J.
In Craig v Lamoureux, Viscount Haldane (at 357) set out the requirements of proving probate undue influence as follows:
“As was said in the House of Lords when Boyse v Rossborough [(1856) 6 HLC 2 (at 49)] was decided, in order to set aside the will of a person of sound mind, it is not sufficient to show that the circumstances attending its execution are consistent with the hypothesis of its having been obtained by undue influence. It must be shown that they are inconsistent with a contrary hypothesis. Undue influence, in order to render a will void, must be an influence which can justly be described by a person looking at the matter judicially to have caused the execution of a paper pretending to express a testator’s mind, but which really does not express his mind, but something else which he did not really mean.”
Mrs Mawson’s evidence
In considering the charities’ arguments, I shall deal with that based on Mrs Mawson’s evidence first, as it was the main plank of their contentions. Mrs Mawson’s evidence was the only evidence that tended to establish, directly, that Ms Abel coerced Miss Wilson and suborned her will.
I accept that the conversation with Miss Wilson, to which Mrs Mawson referred, took place shortly after Miss Wilson had signed the Balmoral will. I reiterate that Nicholas J accepted Mrs Mawson’s account of that conversation.
In view of the importance of this conversation, I shall repeat the essential parts of it. Mrs Mawson said that she found Miss Wilson crying and, upon inquiry, Miss Wilson stated that Ms Abel had forced her to sign the will leaving her the Mosman property. Miss Wilson said:
“I didn’t want to do it. I wanted to leave the will as it was.”
When Mrs Mawson asked what Miss Wilson meant and specifically inquired what Ms Abel had done, Miss Wilson said that Ms Abel had cried and told her “that she and her children would be on the street if I didn’t leave the house to her”. Miss Wilson asked: “[w]hat can I do?” There is no evidence as to any reply that Mrs Mawson gave as to this question.
Ms Abel denied making the statements attributed to her by Miss Wilson. His Honour said (at [80]), “left to choose between the tested evidence of Ms Abel and the untested statement of Miss Wilson, I prefer Ms Abel’s evidence”. This issue was very much a matter for the trial judge.
Nicholas J stated that it was improbable that Ms Abel made the statement attributed to her. His Honour found Ms Abel to be a credible and trustworthy witness. He observed that she was not shaken in cross-examination. He pointed out that Ms Abel was not questioned about her capacity to maintain herself and the children, whether she lived in the house or not, or to rent accommodation. His Honour accepted Ms Abel’s testimony that she was paying the outgoings for the house and also Miss Wilson’s expenses when they went on outing and when she purchased other items for Miss Wilson. His Honour accepted Ms Abel’s testimony, in effect, that she was not impecunious and would not have been homeless had Miss Wilson not left her the house. Having regard to his Honour’s assessment of Ms Abel’s character and credibility as a witness, he regarded it as improbable that she would have lied about her situation to Miss Wilson. This, again, was essentially a matter for his Honour’s decision as trial judge and he has not been shown to have erred in this respect.
There are other matters that support his Honour’s conclusion.
The question that Miss Wilson posed to Mrs Mawson, namely, “[w]hat can I do?” was put in the present tense. It is not apparent from the evidence whether Miss Wilson was putting a genuine question to Mrs Mawson or whether she was asking a rhetorical question to which she was not seeking an answer. It may be that the words were meant to indicate an acceptance by Miss Wilson of what had occurred. This would amount to a deliberate and independent decision by Miss Wilson. The fact that Mrs Mawson did not testify that she (Mrs Mawson) responded to the question suggests that she did not think that it called for an answer and supports the inference that the question was rhetorical.
It is not without significance that, either in late 2000 or early 2001, Ms Abel said to Ms Elizabeth Wyndham, a health worker:
“I want to sell my home but Sandra has to live in it and I don’t want Sandra to be homeless. Sandra told me she has no money and didn’t know where she was going to live. What can I do?”
This statement is similar to the statement Miss Wilson made to Mrs Mawson. As subsequent circumstances establish, Miss Wilson’s statement to Ms Wyndham could not be regarded as a complaint by her that she had been coerced into letting Ms Abel live in her house. Miss Wilson was merely explaining the decision she had made. The statement to Mrs Mawson can readily be understood in the same way. It does not satisfy the requirements of proof of probate undue influence.
Miss Wilson was not an ingénue when it came to making wills. She had made her 1967 will using a home will kit. She had made the January will and must have realised that it overrode the informal will. She made the Balmoral will soon after the January will and there is a strong inference that she knew that it would override the January will. Yet, she made no further attempt to make a will after she made the Balmoral will.
Miss Wilson had many opportunities after she signed the Balmoral will to express to persons whom she trusted any complaints she might have had about the making of that will. She also had many opportunities to ask such persons to assist her to make a new will. Persons who fell into this category included Mr Becker, the nursing staff, Dr Hing, and the representatives of the Public Trustee. A particularly opportune moment was the visit by Mr Gaal and Ms Jones to Miss Wilson at Harley in March 2002 when she gave instructions for the vacation of the house. But she did not then even mention the Balmoral will. Although she was fearful that the condition of the house might give rise to some liability on her part and, perhaps, danger to Ms Abel and her children, she said nothing about not being satisfied with the Balmoral will.
All these circumstances, when taken together, render his Honour’s findings concerning the conversation with Mrs Mawson unassailable.
The failure of the attack on the judge’s findings regarding the conversation with Mrs Mawson is virtually dispositive of the appeal. But I shall go on to deal with the other points made on behalf of the charities.
The making of the Balmoral will
The charities argued that the circumstances surrounding the making of the Balmoral will are indicative of undue influence being exercised by Ms Abel. Mr Grieve referred to the fact that Ms Abel did not have her spectacles with her when she read the form of will that Ms Abel had given her. He pointed to the facts that the will was made over a period of some seventeen minutes, that it was executed about one hour after completion, that it was made with Ms Abel’s assistance, that there was no evidence to explain Miss Wilson’s change of mind since making the January will, and that Miss Wilson was under the false impression that Ms Abel would be homeless if she was not able to live in the house.
The judge took into account all these matters. None is convincing.
Miss Wilson was able to read without her spectacles. Significant parts of the will were written in Miss Wilson’s hand and without any prompting from Ms Abel. The will was a simple document and there is nothing sinister in the fact that it took only seventeen minutes to make. Nor is it sinister that it was executed about one hour after completion. The point is simply that one hour went by before the witnesses were available. This was all cogently explained in evidence that the judge accepted and was entitled to accept.
The fact that the Balmoral will was made with the assistance of the principal beneficiary was a cause for suspicion, but the judge found (as he was entitled to do) that, having considered all the circumstances and seen and heard the witnesses, that suspicion was allayed. His Honour took into account the fact that the will was signed before two independent witnesses. Neither testified that there was anything untoward in the circumstances under which it was signed, or in Miss Wilson’s physical or mental condition at the time. As I have indicated, the proposition that Ms Abel misled Miss Wilson about her financial position and ability to obtain a home was not made out.
Mr Grieve sought to make a point of the fact that it was initially contemplated that waiters at the Bathers Pavilion would witness the Balmoral will; nevertheless, Ms Abel persuaded Miss Wilson to have the will witnessed by Mrs Reid and Mrs Sunjic. According to Ms Abel, taking the will to the waiters to have it witnessed would have caused embarrassment. I do not find this explanation to be inherently incredible or suspicious in any way.
Miss Wilson’s physical and mental condition
The charities laid stress on Miss Wilson’s physical condition, generally, and, in particular, her condition immediately on her arrival back at the nursing home at 3.00 pm after having executed the will. They also suggested that she was probably confused at the time she made the will (although, as I have noted, they did not challenge her testamentary capacity).
On the evidence, however, there appears to have been nothing wrong with Miss Wilson, mentally, at the time she made the Balmoral will. She appears to have been a person who knew her own mind and could assert herself when necessary. Her alert mental state at the time is apparent from a letter that she wrote on 19 March 2002 to two friends. The letter is chatty, detailed, coherent and, apparently, the product of a person who was in full possession of her faculties. The letter described a number of events in her life that had occurred in the recent past, including the reading of a book that she said she found very interesting. All of these matters tend to confirm that there was nothing wrong with her acuity. There was other evidence to similar effect.
As regards Miss Wilson’s physical condition, a number of points may be made. I have referred to the evidence of Mrs Reid and Mrs Sunjic in this regard. While Miss Wilson had been away from the nursing home for some hours at the time she signed the will, this was not particularly unusual. Several persons on other occasions had observed her when she had been away from the nursing home for similar periods, but there was no evidence that such an absence affected her deleteriously.
Miss Wilson suffered from hypoxia that might (but would not necessarily) cause confusion. There was, however, no evidence of confusion on the part of Miss Wilson at the time she signed the will. She was certainly breathless when she returned to the nursing home, but it does not follow that she was confused. There was no evidence from any person who saw her at the nursing home on her return that she was confused in any way.
His Honour said, in this regard:
“72in evaluating Miss Wilson’s condition I took into account that the clinical notes also recorded that prior to the outing she was in good spirits. There was no evidence of deterioration during the outing. I also gave weight to the observations of those who were with her on the day, namely Ms Abel and the attesting witnesses who said her condition was normal. I am satisfied the evidence as to the circumstances referred to in the submission does not provide a basis for doubt that Miss Wilson was well able to, and did in fact, approve her will at the time of its execution.”
In my view, no basis exists for coming to a conclusion different to that expressed by the judge.
The informal will
The charities submitted that there were conflicts between Mr Guo, an assistant nurse employed at Harley Nursing Home, and Ms Abel as to what had occurred when the informal will was signed. The principal conflict was said to be whether Miss Wilson signed the document before Ms Abel entered Miss Wilson’s room at Harley, or, as Ms Abel said, Miss Wilson signed the document when Mr Guo was in the room. I do not think that, in fact, there was a conflict. It is apparent from the document itself that Miss Wilson signed it twice. The evidence is reconcilable on the basis that Miss Wilson signed the document before Mr Guo came into the room and signed it again when he was in the room.
The charities pointed out that the informal will was, substantially, to the same effect as the Balmoral will and was prepared in Ms Abel’s presence alone on paper she provided. Nevertheless, Miss Wilson revoked the informal will two days later when signing the January will. The charities argued that Miss Wilson’s change of mind in making the January will (after, in their submission, Miss Wilson was prevailed upon to make the informal will) showed that Miss Wilson was again prevailed upon by Ms Abel in making the Balmoral will.
This argument is, again, based entirely on speculation. The proposition that Ms Abel prevailed on Miss Wilson in regard to the informal will or the Balmoral will is not based upon any substantive evidence.
There is ample testimony that Miss Wilson often discussed, with various persons, how she should dispose of her estate. She seemed to change her mind frequently. The making of the Balmoral will so soon after the January will was consistent with Miss Wilson’s conduct, generally, both in regard to her changing her mind soon after she made the informal will and in the various conversations when she appeared to vacillate between leaving her house to Ms Abel and leaving it to the charities. The matters relied on by the charities, in this regard, are not persuasive.
Grumbles about Ms Abel and concerns about her financial position
Several witnesses gave evidence of statements made to them by Miss Wilson in which she grumbled about Ms Abel being in the house and not paying rent. Nothing turns on this evidence. It merely indicates that, from time to time, Miss Wilson had different feelings about Ms Abel being in the house. There is other evidence that Miss Wilson was quite happy for Ms Abel to be in the house with her children.
The judge detailed statements made by Miss Wilson to several people at various times when she expressed concern about Ms Abel’s position should she leave the Mosman property or have to pay rent. None of these statements detract from the findings his Honour made. The contents of the statements do not come near establishing that, in making the Balmoral will, Ms Wilson’s will was overborne or that she was defrauded.
Moreover, much of the evidence as to the dates when these statements were made was vague and, in regard to some of them, no specific date was given. Generally, as regards all of the statements, there was insufficient evidence to link any of them sufficiently closely to 21 February 2002 to allow any of them to be regarded as having any influence on Miss Wilson’s decision to make the Balmoral will. They support neither the allegation of fraud nor that of undue influence.
Delay in giving the will to Mr Becker
The charities made some point of the fact that Ms Abel did not hand the Balmoral will to Mr Becker until after Miss Wilson had died. Mr Becker was overseas for part of the period between the making of the will and Miss Wilson’s death. According to Ms Abel, she did try on occasions to speak to Mr Becker and give him the will but she did not succeed. I am not persuaded that the omission to give Mr Becker the will immediately leads to an inference of a kind for which the charities contended.
The charities submitted that Ms Abel did not give the will to Mr Becker because she thought it probable that, should she do so, Mr Becker would have informed the Public Trustee and a repeat of the events of 23 January 2002 would have taken place. The judge was satisfied that Ms Abel’s omission was not caused by any underlying motive on her part. Even if the charities’ submissions in this regard were to be accepted, they would not get near establishing undue influence or fraud.
The letter of 14 March 2001
Ms Abel wrote a letter to the Public Trustee dated 14 March 2001 in which she set out certain defects in the house that had been repaired and asserted that the house was safe for human habitation. The letter also set out the payments she made for rates, Miss Wilson’s clothing and other items, and Miss Wilson’s outings. The date of this letter was plainly erroneous as it must have been written in 2002 and not 2001.
Some argument was raised as to whether the letter was written before or after a letter dated 15 March 2002 written to Ms Abel by the solicitor for the Public Trustee requesting her to make arrangements to vacate the house. These arguments were used as a further attack on Ms Abel’s credibility, but Mr Grieve only went so far as to suggest that, if the letter was written after receipt of the Public Trustee’s letter, the content of Ms Abel’s letter would be “surprising”.
It seems to me that, on the probabilities, the only error in the letter was writing the year as 2001 and not 2002. Irrespective of whether the letter was written before or after the letter from the Public Trustee, the letter does not detract from the veracity of Ms Abel’s evidence.
The charities submitted that, had Ms Abel believed that the Balmoral will was a true and voluntary expression of Miss Wilson’s testamentary intention, she would have written to the Public Trustee advising him that there was no point in requiring Ms Abel to vacate the premises. According to the charities, Ms Abel should have pointed out that Miss Wilson “could well pass on within a matter of months” and that she, Miss Wilson, had left Ms Abel the house in her will.
There are two answers to this submission. The first is that Ms Abel might well have believed, were she to write such a letter, the Public Trustee would attempt to persuade Miss Wilson to change her will, make the Public Trustee the executor, and leave all her assets to the charities. Such a reason for not mentioning the existence of the will would not support the charities’ case. The second answer is that Ms Abel may simply not have wished to write to the Public Trustee in the terms suggested as that might have caused Miss Wilson serious offence.
Ms Abel’s conduct after the informal will was signed
On 19 January 2002, Ms Abel asked staff at Harley to contact her if anything happened to Miss Wilson because she believed that Miss Wilson was “going downhill”. Although the charities suggested that an adverse inference should be drawn from this conduct on the part of Ms Abel, the argument is without substance.
When Ms Hargreaves, a nurse at Harley, learned that Miss Wilson had signed the informal will, she informed the Public Trustee. As I have mentioned, this led to Mr Gaal and Ms Jones calling upon Miss Wilson on 23 January 2002. According to the evidence of Mr Gaal, Miss Wilson said to him and Ms Jones:
“I don’t want Sandra to be able to live there for the rest of her life but I don’t want her to be forced to move out straight away when I die. I want her to be able to continue to live there for a while until she finds somewhere else to live.”
Mr Gaal replied:
“If you leave your house to the charities then, in the normal course of events, the property will not be sold for say some three to four months after your death and Sandra would be able to continue to live there until it is sold. However you could provide in your will for Sandra to live there for longer if you want, say six or twelve months or even for a number of years if you wish.”
According to Mr Gaal, Miss Wilson replied:
“A few months would be satisfactory.”
Mr Gaal explained to Miss Wilson that that meant that the Public Trustee needed to update her will because the informal will “might mean that the house will go to Sandra and not to the charities”. Miss Wilson observed that she wished the house to go to the charities “because they do a lot of good work for a lot of people”.
None of this evidence establishes that Miss Wilson was coerced or defrauded into making the Balmoral will. She may simply have changed her mind later, after giving the issue due consideration.
While Mr Gaal and Ms Jones were with Miss Wilson, Ms Abel, coincidentally, called at the nursing home. A sign had been placed on Miss Wilson’s door which read “Carer in attendance – please knock and wait”. Ms Abel ignored the sign and entered the room. Thereafter, Miss Wilson told the Director of Nursing, Lea Cousins, that she thought that Ms Abel was upset with her because she thought that she would have to move out of the house. Ms Abel testified that when she came to visit Miss Wilson on this occasion she saw that the doors to Miss Wilson’s room were closed. Eventually, she found the doors open and entered. She said that Ms Cousins had, earlier, told her that Miss Wilson was with the doctor. The charities submitted that this evidence was fabricated by Ms Abel. Under cross examination, however, Ms Cousins said that when Ms Abel arrived she told Ms Abel that she should not enter Miss Wilson’s room without checking with the nursing staff “because she was being attended”. Ms Abel may well have thought that Miss Wilson was being attended by a doctor. The so-called conflict between Ms Cousins and Ms Abel is insignificant and capable of reconciliation. There is nothing in this point.
When Ms Abel entered the room, she remarked to Miss Wilson that the doctor had been with her for a long time. According to Ms Abel, Miss Wilson put her finger to her lips and said to her:
“They told me not to tell you. It was not the doctor. It was the Public Trustee. But they told me not to tell you. I am sorry but they said I can’t let you have the house because it’s worth one million dollars and I have only known you for five years. They are the law, and I have to do what they tell me. I would be breaking the law. I can’t break the law.”
The charities submitted that this evidence, too, was fabricated by Ms Abel. The judge accepted Ms Abel’s evidence on this aspect and there is nothing in the principles that govern appeals on fact that would entitle this Court to uphold the submission that the evidence given by Ms Abel, in this regard, was false.
Other arguments raised by the charities
There were other grounds on which the charities challenged his Honour’s credibility findings. They were peripheral and did not constitute evidence that could support an arguable case in accordance with the principles in Devries, Abalos and Fox v Percy. I shall deal with the more important of these.
The charities contended that Ms Abel, had she been bona fide, would have taken Miss Wilson to a solicitor to have her will drawn and made. In fact, Ms Abel attempted to do this (perhaps without much effort) but she was unable to find a solicitor who would see Miss Wilson at an appropriate time and place. This is a point that is notionally capable of weighing with a trial judge, but it is not of significance on appeal when an attempt is made to overturn factual findings in accordance with established principle.
Nicholas J found that Miss Wilson invited Ms Abel and the children to move to the Mosman house. There was uncontradicted evidence that Ms Abel and her children moved into the house at the request of the minister of the Mosman Baptist Church. The charities sought to make some point of this conflict but I am unable to see how it advances their case. Indeed, the evidence as to the minister’s request is inconsistent with the theory of the so-called “grand plan” for which the charities contended.
At one point, Mr Grieve submitted that once Miss Wilson had signed the informal will, Ms Abel stopped taking Miss Wilson out on excursions. This, I think, was in support of the argument that Ms Abel was kind to Miss Wilson solely for the purpose of persuading her to make a will in the terms of the Balmoral will. The evidence, however, shows for a period after the informal will was made, the nursing home staff did not wish Miss Wilson to leave the home. When they were satisfied that Miss Wilson’s condition was improved, Ms Abel again took Miss Wilson on outings.
The argument that there was a grand plan, as contended for by the charities, was based solely upon speculative inferences and never put to Ms Abel. These inferences were, at best, hypothetical possibilities. The conduct of Ms Abel on which the charities relied was open to other reasonably possible inferences, all based on the notion that Ms Abel was acting in good faith, without any improper motive, and with the purpose of helping Miss Wilson. It has not been established that his Honour erred in regard to this issue.
Costs
Nicholas J rightly pointed out that, subject to two well-recognised exceptions, the basic rule in probate actions was that, ordinarily, costs follow the event: [2006] NSWSC 1146 at [12]. His Honour referred to Re Estate Late Hazel Ruby Grounds; Page v Sedawie [2005] NSWSC 1311, where Campbell J described (at [30]) the exceptions as being where the testator had been the cause of the litigation and where “the circumstances led reasonably to an investigation concerning the testator’s will”.
The charities unsuccessfully opposed the grant of probate on all grounds. His Honour rejected the charities’ argument that Miss Wilson and Ms Abel caused the litigation. His Honour was not persuaded that the circumstances reasonably justified an investigation concerning the Balmoral will. His Honour (at [42]) found, further, that the charities had failed to demonstrate that there were grounds for contesting the will “on the ground of undue influence, an essential component of which was Ms Abel’s fraudulent conduct”. After a careful discussion of all the issues, his Honour held that the circumstances of the case did not justify departure from the ordinary rule that the costs should follow the event. I am unable to discern any error in his Honour’s reasoning.
His Honour then turned to the question of whether costs should be paid on an indemnity basis. Mr Becker claimed indemnity costs on the ground that the charities had failed to accept offers of compromise contained in certain Calderbank offers. His Honour rejected Mr Becker’s arguments save in regard to a Calderbank offer made on 28 June 2006. His Honour dealt with this offer as follows:
“57The Calderbank offer of 28 June 2006 proposed settlement of the whole proceedings, with orders that probate of the Balmoral will be granted to the plaintiff, that his costs on an indemnity basis be paid out of the estate, and that the costs of the charities in the sum of $100,000.00 be paid out of the estate with interest on so much of the costs which were unpaid more than four months after the orders were made. The offer was made during the third day of the trial. It was open until 4pm 30 June 2006, by which time the evidence of Mrs Mawson, the plaintiff, Ms Abel, the attesting witnesses, and others including Public Trustee officers had been taken. It was rejected.
58In my opinion, having regard to the circumstances in which it was made, the plaintiff’s offer was an offer of a real and genuine compromise. It offered a substantial sum towards the charities’ costs out of the estate which, if accepted, would have resulted in an outcome more favourable to them than they in fact obtained.
…
60In all the circumstances, I am satisfied that in failing to accept the Calderbank offer of 28 June 2006, and in maintaining their opposition to the plaintiff’s claim thereafter the charities acted unreasonably in that they unduly prolonged the case. Such circumstances provide ample grounds to justify departure from the usual rule and to make an order for indemnity costs (Colgate Palmolive v Cussons (1993) 118 ALR 248; Leichhardt para 48). The appropriate order is that the charities pay the plaintiff’s costs on an indemnity basis from the time the offer expired, otherwise on the ordinary basis.
61For these reasons I propose to order the charities to pay the plaintiff’s costs of the proceedings up to 4pm 30 June 2006 on the ordinary basis, and thereafter on an indemnity basis.”
As regards the order for indemnity costs, the charities submitted that there was no element of compromise in the Calderbank offer on which his Honour relied. Further, the charities submitted that Calderbank offers should not operate in probate litigation.
In my view, the offer of 28 June 2006 proposed a genuine compromise. The benefit offered was that the charities’ costs, up to $100,000, be paid out of the estate, together with interest. This was not an offer that amounted to a capitulation. In my view, his Honour was correct to hold that it was a genuine offer of compromise.
His Honour also had regard to the reasonableness of the conduct of the charities in continuing the case after the offer had been made. His Honour pointed out (at [59]) that the offer had been made during the third day of the trial and the charities:
“… were well positioned to assess prospects with regard to the substantial body of tested evidence already before the court, including that of Ms Abel which, in large measure, was left unchallenged and uncontradicted.”
I respectfully agree with the judge that, had the charities carried out a reasonable evaluation of the strengths and weaknesses of their case at that time, it would have become clear “that they were without any reliable evidence to prove the grounds upon which their opposition was based”: at [59].
In my view, the judge made no error of principle, as submitted by the charities.
In my view, there is a role for offers of compromise in probate proceedings: see Stanley v Mechler [2004] NSWSC 196. The Calderbank offer of 28 June 2006 demonstrates that, under some circumstances, appropriate offers of compromise may be made.
In my view, no error was made by his Honour in his determination of the appropriate costs orders.
In my opinion, the appeal should be dismissed.
As regards the costs of the appeal, I would order the charities to pay the costs of the appeal. That is the ordinary rule where a party unsuccessfully alleges fraud or undue influence: Kerridge, op cit at 319. I see no warrant for ordering that their costs come out of the estate.
McCOLL JA: I agree with Ipp JA.
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