Walker v Walker (No 2)
[2025] ACTSC 9
•03 February 2025
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Walker v Walker (No 2) |
Citation: | [2025] ACTSC 9 |
Hearing Date: | 4-5 September, 8 November 2023 |
Decision Date: | 03 February 2025 |
Before: | McWilliam J |
Decision: | The will the subject of a grant of probate, was found to be valid, the gift of transfer of real property was maintained, and family provision was made out of the will in favour of the plaintiff in the sum of $50,000. |
Catchwords: | SUCCESSION – testamentary capacity – family provision – where testator in cognitive decline – whether will invalid for lack of testamentary capacity or lack of knowledge and approval – where will provided widow with life interest in family home and three daughters with residual interest – whether failure to make proper provision out of the will for adult daughter SUCCESSION – family provision – claim by adult child for provision from deceased’s estate under Family Provision Act 1969 (ACT) – where proceedings not commenced within time – whether sufficient cause shown to extend time – where no prejudice as a result of the delay – where there is an arguable case for provision – extension of time granted – where will gave life interest in family home to wife – whether adequate provision made for plaintiff’s proper maintenance and advancement in life. EQUITY – undue influence – unconscionability – whether transfer of half interest in family home to second wife should be set aside – whether relationship of ascendancy of wife over husband – whether gift of half share of family home to wife of 25 years improvident – whether husband in position of special disadvantage – whether wife unconscientiously exploited special disadvantage. |
Legislation Cited: | Court Procedures Rules 2006 (ACT) Evidence Act 2011 (ACT) s 140(2) Family Provision Act 1969 (ACT) ss 7(1)(c), 8, 9, 11 Wills Act 1968 (ACT) ss 9, 11A, 21(b) |
Cases Cited: | 45 Flers Avenue Pty Limited v Morgan (1987) 5 ACLC 222 Armouti v Nenes [2022] ACTCA 3 Bailey v Bailey (1924) 34 CLR 558 Banks v Goodfellow (1870) LR 5 QB 549 Bassett v Bassett [2021] NSWCA 320 Bladwell v Davis [2004] NSWCA 170 Bool v Bool [1941] St R Qd 26 Boreham v Prince Henry Hospital (1955) 29 ALJ 179 Briginshaw v Briginshaw (1938) 60 CLR 336 Bull v Fulton (1942) 66 CLR 295 Goldsworthy v Brickell [1987] Ch 378 Golosky v Golosky (Unreported, Supreme Court of New South Wales Court of Appeal, Kirby P, Handley and Cripps JJA, 5 October 1993) Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915 Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915 In Re Allardice, Allardice v Allardice (1910) 29 NZLR 959 In the Estate of Gallagher [2022] ACTSC 324 In the Will of Wilson (1897) 23 VLR 197 Kantor v Vosahlo [2004] VSCA 235 Mayfield v Lloyd-Williams [2004] NSWSC 419 McCosker v McCosker (1957) 97 CLR 566 McKenzie v Topp [2004] VSC 90 Ng v Lau [2020] NSWSC 713 Nock v Austin (1918) 25 CLR 519 Plunkett v Bull (1915) 19 CLR 544 Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 Quek v Beggs (1990) 5 BPR [97405] 11,761 Re Estate of Griffith (deceased) (1995) 217 ALR 284 Re Estate of Hodges; Shorter v Hodges (1988) 14 NSWLR 698 Re Guskett (1947) VLR 28 Richardson v Richardson [2022] ACTSC 363; 20 ACTLR 37 Roberts v Stern [2017] ACTSC 182 Robertson v Barker [2021] NSWSC 1682 Romascu v Manolache [2011] NSWSC 1362 Ryan v Dalton; Estate of Ryan [2017] NSWSC 1007 Sayer v Sayer; Garbutt v Sayer [1999] NSWCA 340 Smith v Johnson [2015] NSWCA 297 Smith v Public Trustee of the Australian Capital Territory [2012] ACTSC 4; 6 ACTLR 126 Starr v Miller [2021] NSWSC 426 Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 276 CLR 1 Tarbes v Taleb [2023] NSWSC 565 Taylor v Farrugia [2009] NSWSC 801 Taylor v Farrugia [2009] NSWSC 801 Timbury v Coffee (1941) 66 CLR 277 Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 757 Veall v Veall [2015] VSCA 60; 46 VR 123 Verzar v Verzar [2014] NSWCA 45; 12 ASTLR 523 Vigolo v Bostin [2005] HCA 11; 221 CLR 191 Worth v Clasohm (1952) 86 CLR 439 Wu v Wu [2024] ACTCA 8 |
Parties: | Briohny June Walker ( Plaintiff) Janet Margaret Walker (First Defendant) Janet Margaret Walker in her capacity as executor of the Estate of Joseph Walker (Second Defendant) |
Representation: | Counsel G Blank ( Plaintiff) W Sharwood ( Defendants) |
| Solicitors Farrar Gesini Dunn ( Plaintiff) KJB Law ( Defendants) | |
File Numbers: | PRO 681 of 2020 SC 442 of 2021 |
McWILLIAM J:
Mr Joseph Walker died on 15 August 2019, aged 78. Eight months before he died, and in ill physical health and cognitive decline, he had on 19 December 2018 executed a will (the 2018 Will). By that document he gave his second wife a life interest in the family home they had shared together during their 25 years of marriage. Following a grant of probate on 14 September 2020, she is now the executor of the 2018 Will and the defendant in this proceeding.
Some months after executing the 2018 Will, the late Mr Walker also transferred a 50% share of the family home he solely owned to the defendant, which was registered with the Land Titles Office on 29 April 2019 (the Transfer).
The defendant is in her seventies and currently lives in the family home which was valued at $1.75 million as at 1 March 2023. Under the scheme of the 2018 Will and the Transfer, upon the defendant’s death or otherwise ceasing to reside in the house, the testator’s remaining half interest in the family home is to pass in equal shares to his three daughters from his first marriage, one of whom is the plaintiff in this proceeding.
The claims for resolution
The plaintiff’s challenge to the Will is based upon a contention that her father lacked testamentary capacity at the time he executed the 2018 Will, and separately, that he did not know of, and approve, its contents.
The plaintiff also challenges the Transfer on the basis that it was procured by the defendant’s undue influence and alternatively, by the defendant’s unconscionable conduct.
If the Court finds that the grant of probate in respect of the 2018 Will should be set aside and declares the 2018 Will invalid, the testator made two other informal wills, one in 2008, and an earlier will made in 2003. In each case, the informality arises from the will being witnessed by only one person when s 9 of the Wills Act 1968 (ACT) (Wills Act) requires two witnesses.
Depending on which will is found to be valid, there were also competing claims for family provision for resolution under the Family Provision Act 1969 (ACT) (FP Act). Each was filed outside the time limits stipulated in s 9 of the FP Act.
Issues for determination
The following issues arise for determination:
(a)In relation to the 2018 Will:
i.Whether the testator had testamentary capacity at the time it was executed (Issue 1);
ii.Whether the 2018 Will should be set aside on the basis that the testator did not know of and approve its contents (Issue 2);
iii.If the 2018 Will is not valid, whether a declaration of validity should be made under s 11A of the Wills Act 1968 (ACT) (Wills Act) in respect of previous informal wills made by the testator in 2008 and before that in 2003 (Issue 3);
(b)In respect of the Transfer:
i.Whether it was a product of undue influence (Issue 4); or
ii.Whether it was brought about by the defendant’s unconscionability (Issue 5);
(c)In respect of the parties’ competing claims for family provision:
i.Whether the Court should extend the time in which such claims may be brought (Issue 6);
ii.Whether proper provision under the will ultimately found to be operable was made for either the plaintiff or defendant (Issue 7); and
iii.If not, what provision should be made for the relevant party’s proper maintenance, education and advancement in life pursuant to s 8 of the FP Act (Issue 8).
Ultimately, I have found that the 2018 Will was the last valid will of the testator, that the Transfer was not tainted by either undue influence or unconscionability, and that the plaintiff’s family provision claim succeeds, but not to the extent that she sought.
The Wills
10. The 2018 Will created the following testamentary scheme (relevant to the events as they have come to pass, namely that both the defendant and the testator’s three daughters survived the testator):
(a)The defendant was appointed the primary executor.
(b)The defendant would take a life interest in the defendant’s interest in the family home, to enable her to continue living there as long as she wished.
(c)When she no longer lived or wished to live in the family home, the testator’s interest in the property or the proceeds of sale were to be divided between the testator’s three daughters, to be held in separate discretionary testamentary trusts.
(d)The testator’s furniture and household effects, motor vehicles and personal chattels were also gifted to the defendant.
(e)The residue of the estate was gifted to the defendant.
11. The 2018 Will was executed in circumstances where the testator owned 100% of the family home. However, it was envisaged that the defendant would transfer half of that interest to the defendant as tenants in common. The Transfer gave effect to that intention.
12. The 2018 Will also provided for the defendant to receive the testator’s superannuation. At the time, this was held in a self-managed superannuation fund with a joint balance of approximately $257,000, of which more than $210,000 was owned by the testator. However, that was separately achieved by a binding death benefit nomination in the defendant’s favour and the superannuation forms no part of this proceeding, other than informing the defendant’s financial position relevant to the competing family provision claims.
13. The residue of the estate was not sizeable. The defendant’s evidence was that there was $1,500 in a joint bank account when the testator died.
14. The 2018 Will was part of a larger scheme for dividing assets, in that the defendant had three children of her own when she married the testator. She executed a mirror will, which gave the testator a life interest in the family home and then her interest in the property was gifted to her three children. Ultimately then, the primary asset of the marriage was to be split six ways when both the defendant and the testator had died.
15. The terms of the 2018 Will differed substantially from two previous documents that had set out the testamentary intentions of the testator:
(a)An informal will dated 3 December 2003 prepared by Wood Fussell Solicitors (2003 Will), accompanied by a letter written by the deceased setting out his family circumstances and estate planning objectives dated 7 May 2003; and
(b)An informal will dated 4 May 2008 prepared by Wood Fussell Solicitors (2008 Will).
16. The 2003 Will and the 2008 Will contain identical terms, providing for the following:
(a)The deceased’s three daughters were appointed as executors;
(b)The deceased granted:
(i)The defendant a one-third share and a right to reside in the family home;
(ii)The defendant a half share in any other real property owned by the deceased, with the other half share to be divided equally between the testator’s three daughters; and
(iii)The residue of the estate was to be shared equally between the testator’s three daughters.
Issue 1: Did the testator lack testamentary capacity at the time he executed the 2018 Will?
17. The plaintiff contended that the 2018 Will was executed in suspicious circumstances and her father’s cognitive state had declined to the point where the Court could not be satisfied that he either had the capacity to make a will in December 2018 or that he knew and approved of the contents of the will.
Applicable principles in considering whether a person had testamentary capacity
18. The legal principles are well established and relevant examples of their application were provided by counsel for each party. According to the well-established formulation in Banks v Goodfellow (1870) LR 5 QB 549 (Banks v Goodfellow), testamentary capacity involves three things:
(a)The capacity to understand the nature of the act of making a will and its effects;
(b)The capacity to understand, at least in general terms, the extent of the property the subject of the will; and
(c)The capacity to comprehend moral claims of potential beneficiaries of the testator’s estate.
19. The above requirements were affirmed in Timbury v Coffee [1941] HCA 22; (1941) 66 CLR 277 (Timbury), with Dixon J (quoting Hood J in In the Will of Wilson (1897) 23 VLR 197 at 199) stating at 283:
Before a will can be upheld it must be shown that at the time of making it the testator had sufficient mental capacity to comprehend the nature of what he was doing, and its effects; that he was able to realize the extent and character of the property he was dealing with, and to weigh the claims which naturally ought to press upon him. In order that a man should rightly understand these various matters it is essential that his mind should be free to act in a natural, regular, and ordinary manner.
20. Further, to establish that the testator comprehended the effect of what he was doing, it must be proved that the testator knew and approved its contents at the time it was executed: Nock v Austin (1918) 25 CLR 519 (Nock) at 522, 528. Evidence relevant to testamentary capacity will also be relevant to knowledge and approval (dealt with separately below): Veall v Veall [2015] VSCA 60; 46 VR 123 (Veall) at [185].
21. Incapacity will only be established if it appears that age or illness has so affected the testator’s mental faculties as to make them unequal to the task of disposing of their property: Bailey v Bailey (1924) 34 CLR 558 at 570-572; Worth v Clasohm (1952) 86 CLR 439 (Worth) at 452-453.
The approach to assessing testamentary capacity
22. The starting point is that a duly executed will which is rational on its face is presumed to have been made by a person of competent understanding and is itself prima facie evidence of the same: Nock at 529.
23. The approach to the evidence was explained in Boreham v Prince Henry Hospital (1955) 29 ALJ 179 at 180:
The proper approach of the Court to the question whether a testator has testamentary capacity is clear. Although proof that a will was properly executed is prima facie evidence of testamentary capacity, where the evidence as a whole is sufficient to throw a doubt upon the testator’s competency, the Court must decide against the validity of the will unless it is satisfied affirmatively that he was of sound mind, memory and understanding when he executed it or, if instructions for the will preceded its execution, when the instructions were given.
24. Accordingly, if the evidence raises a doubt as to capacity, including by way of suspicious circumstances, the presumption is displaced. The propounder of the will (the defendant here) must then satisfy the court that the testator was of “sound disposing mind”: Nock at 528; Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 757 (Tobin) at [45] and the cases there-cited.
25. The authorities at times use the description of “suspicious circumstances”. The term includes circumstances of dishonesty or moral turpitude. However, it should be made clear the consideration is broader, in that it is simply whether the circumstances raise doubt about a testator’s capacity. If there is such a doubt, and the evidence as a whole does not resolve it, the court may be precluded from being affirmatively satisfied as to testamentary capacity: Worth at 453 and Bull v Fulton (1942) 66 CLR 295 (Bull) at 299, 341, each of which was cited in Tobin at [45].
The standard of proof required
26. The requirement to be affirmatively satisfied as to testamentary capacity and knowledge and approval is not to be understood as requiring any more than the satisfaction of the conventional civil standard of proof. As Dixon CJ explained in Worth at 453:
... that is not to say that he was required to answer the doubt by proof to the point of complete demonstration, or by proof beyond a reasonable doubt. The criminal standard of proof has no place in the trial of an issue as to testamentary capacity in a probate action. The effect of a doubt initially is to require a vigilant examination of the whole of the evidence which the parties place before the court; but, that examination having been made, a residual doubt is not enough to defeat the plaintiff’s claim for probate unless it is felt by the court to be substantial enough to preclude a belief that the document propounded is the will of a testatrix who possessed sound mind, memory and understanding at the time of its execution.
27. However, such statements draw attention to the cogency of the evidence required and, following Tobin at [48], the seriousness of whether a document is indeed a person’s last will means that any decision about whether the civil standard of proof is satisfied should be approached in accordance with Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 and s 140(2) of the Evidence Act 2011 (ACT).
The involvement of an independent solicitor
28. The fact that a will has been prepared by a solicitor and read to the testator is powerful evidence that it represents the testator’s intentions: Veall at [184]. However, any “view the solicitor may have formed as to the testator’s capacity must be shown to be based on a proper assessment and accurate information or it is worthless; and ... the terms of the will may themselves suggest that the solicitor’s assessment was not soundly based”: Veall at [210] and the authority there-cited.
29. In Veall, reference was also made at [192] to solicitors who prepare wills as coming under ‘professional duties to exercise proper care and attention.’ Santamaria JA (with whom Beach and Kyrou JJA agreed) stated there that if practicable, the solicitor should ensure that the making of the will is witnessed by a medical practitioner who takes steps to be satisfied as to the capacity and understanding of the testator and makes a record of any such examination and findings. The solicitor should also ensure:
(a)the will is prepared by an experienced and independent solicitor following a meeting with the testator, without any of the beneficiaries present or involved; and
(b)the will is read through and explained to testator, taking the time to form a view that the testator is capable of understanding the will, the terms of which are not, on their face, inexplicable or irrational.
30. The importance of the solicitor’s role in taking the elementary precautions to protect the integrity of a will in terms of proof of testamentary capacity was emphasised in Ryan v Dalton; Estate of Ryan [2017] NSWSC 1007 (Ryan) where Kunc J made a number of observations in an attempt to assist the profession at [106]-[108]:
106. Questions of testamentary capacity are necessarily fact sensitive. No rule or procedure will cover every case to avoid the possibility of litigation. Nevertheless, the effort involved in paying attention to questions of capacity at the time instructions for a will are taken and the will is executed (including, where necessary, obtaining an assessment of the client where it is thought one is called for) pales into insignificance with the expense, delay and anxiety caused by litigation after the testator’s death. Bearing that in mind, and without wishing in any way to derogate from, for example, the desirability of all solicitors being familiar with the guidelines, the recent experience of the Court suggests that proposing some basic rules of thumb (which, as such, are necessarily arbitrary) may be of assistance.
107.It seems to me that the following is at least a starting point for dealing with this increasingly prevalent issue:
(1) The client should always be interviewed alone. If an interpreter is required, ideally the interpreter should not be a family member or proposed beneficiary.
(2) A solicitor should always consider capacity and the possibility of undue influence, if only to dismiss it in most cases.
(3) In all cases instructions should be sought by non-leading questions such as: Who are your family members? What are your assets? To whom do you want to leave your assets? Why have you chosen to do it that way? The questions and answers should be carefully recorded in a file note.
(4) In case of anyone:
(a) over 70;
(b) being cared for by someone;
(c) who resides in a nursing home or similar facility; or
(d) about whom for any other reason the solicitor might have concern about capacity,
the solicitor should ask the client and their carer or a care manager in the home or facility whether there is any reason to be concerned about capacity including as a result of any diagnosis, behaviour, medication or the like. Again, full file notes should be kept recording the information which the solicitor obtained, and from whom, in answer to such inquiries.
(5) Where there is any doubt about a client’s capacity, then the process set out in sub-paragraph (3) above should be repeated when presenting the draft will to the client for execution. The practice of simply reading the provisions to a client and seeking his or her assent should be avoided.
108. I emphasise that the foregoing is offered only as suggested basic precautions which may identify problems which need to be addressed. In many cases which do come before the Court the evidence of the solicitor will be critical. For that reason, it is essential that solicitors make full, contemporaneous file notes of their attendances on the client and any other persons and retain those file notes indefinitely.
31. Consistent with Kunc J’s own emphasis in that last paragraph, these observations of basic precautions are not to be elevated into requirements that must be met before there will be sufficient evidence to affirmatively satisfy a court of testamentary capacity, but adherence to them may well foreclose disputes of the kind that has arisen in the present case. I have set out the recommendations made by Kunc J as I respectfully agree with them, and they are consistent with the precautions that were articulated in Veall. Where it is evident that a will may be controversial and a solicitor has not taken elementary precautions, the court will have to look elsewhere if it is asked to determine capacity and knowledge and approval: Veall at [192].
Elderly will-makers
32. Also relevant to the circumstances of the present case, the three components establishing testamentary capacity do not require a testator to possess full cognition all the time before a finding that a document constitutes a testator’s last will may be made. In Re Estate of Griffith (deceased) (1995) 217 ALR 284, Kirby P stated at 295:
In judging the question of testamentary capacity the courts do not overlook the fact that many wills are made by people of advanced years. In such people, slowness, illness, feebleness and eccentricity will sometimes be apparent – more so than in most persons of younger age. But these are not ordinarily sufficient, if proved, to disentitle the testator of the right to dispose of his or her property by will. … Nor will partial unsoundness of mind, which does not operate on the relevant capacities to appreciate the extent of and dispose of the estate, necessarily deprive the testator of testamentary capacity if it is shown that the will was signed during a lucid interval. ... Were the rule to be otherwise, so many wills would be liable to be set aside for want of testamentary capacity that the fundamental principle of our law would be undermined and the expectations of testators unreasonably destroyed.
33. The capacity of a testator may fluctuate. A testator who is aged and infirm may suffer from dementia or some other form of impairment. Evidence relevant to establishing a lack of capacity may include the exclusion of persons naturally having a claim on the testator’s bounty and extreme age or sickness: Re Estate of Hodges; Shorter v Hodges (1988) 14 NSWLR 698 at 706.
34. But, if such a testator has lucid intervals, the inquiry must be directed to whether the will was made in such an interval: Veall at [167], citing Kantor v Vosahlo [2004] VSCA 235 at [47].
It is not necessary that the testator has actually remembered, reflected and reasoned, only that he or she has the capacity to do so. However, as cases such as Starr v Miller [2021] NSWSC 426 (Starr) have pointed out at [421]-[422], the distinction may at times be artificial where the evidence relied upon to prove capacity is in the nature of what was said and done by the testator at the time of making the will. As Hallen J concluded in Starr at [457]:
Ultimately, whether the will-maker possessed the requisite capacity is a practical question which does not depend solely upon medical evidence but is to be determined, holistically, by reference to all of the facts established in the case: Boughton v Knight, at 67. It is a question determined on the balance of probabilities: Bailey v Bailey, at 570. It is not resolved by the blind application of rules or formulae: Frizzo v Frizzo, at [66]. The manner in which the deceased gave … instructions, the content of those instructions, the setting in which the instructions were given and the outcome of enquiries made by the solicitor acting in the matter, all assume importance: Nicholson v Knaggs at [41] (Vickery J).
36. Thus, the present assessment is directed to evidence of the testator’s capacity on 19 December 2018, and whether on that day the testator had the capacity to comprehend or understand that he was making a will and what legal effect it would have, to realise the extent of the property that fell within his estate, and to weigh the claims of the beneficiaries, being his second wife of 25 years and his three daughters from his first marriage.
What constitutes circumstances sufficient to raise a doubt about capacity?
37. The circumstances giving rise to doubt or suspicion may be many and varied: Tobin at [47]. Relevant circumstances are those relating to the preparation of the will in question and its intrinsic terms, as well any circumstances surrounding its preparation and execution: Ng v Lau [2020] NSWSC 713 at [81] and the case there-cited.
38. Where it appears from the evidence that the deceased suffered from any medical condition which is relevant to testamentary capacity, the onus is on the propounder of the will to show that the will-maker’s mental state did not influence the will: Bull at 299.
39. In Bool v Bool [1941] St R Qd 26, at 39 (cited in Starr at [448]), it was said:
A great change of testamentary disposition evidenced by a departure from other testamentary intentions long adhered to always requires explanation.
40. Without purporting to set out an exhaustive list, factors the court may consider, when determining whether circumstances that excite suspicion exist in a given case (drawing from Romascu v Manolache [2011] NSWSC 1362 at [205]), include:
(a)the circumstances surrounding the preparation of the propounded will;
(b)whether a beneficiary was instrumental in the preparation of the propounded will;
(c)the extent of the physical and mental impairment, if any, of the testator;
(d)whether the will in question constitutes a significant change from a prior will; and
(e)whether the propounded will, generally, seems to make testamentary sense.
The evidence here – is there a doubt, or are there suspicious circumstances?
41. Applying the above principles, the evidence here was sufficient to cast doubt on the execution of the 2018 Will, in the sense explained above.
42. At the time proximate to the giving of instructions for the will on 7 December 2018, and subsequent execution of the will on 19 December 2018, the evidence established the following:
(a)There was a great change of testamentary disposition evidenced in the difference between the intentions recorded in the 2018 Will and those expressed in the informal 2008 Will and the 2003 Will. The existence of those documents demonstrates that those testamentary intentions were long adhered to.
(b)The testator was in physical and cognitive decline and had been hospitalised on two separate occasions for a number of weeks in November 2018.
(c)Through age and illness, the testator had come to rely significantly on the defendant to care for him, including attending medical appointments with him and providing transport as he had been unable to drive for many years. The defendant cared for the testator, as she put it, “100% through all his ailments”.
(d)The defendant considered the testator’s cognitive decline was severe enough to warrant medical attention from 1 November 2017.
(e)The testator had suffered hallucinations, although not in a way that would be said to have affected the disposition of property.
(f)The testator had very low vitamin B12 levels, which the GP contemplated were contributing to his cognitive decline.
(g)Such cognitive decline was sufficient to warrant obtaining a CT scan on 14 February 2017 and referral in October 2018 by the testator’s general practitioner to Dr Paramadhathil, a geriatrician (parts of the referral are extracted below).
(h)The geriatrician reviewed the testator, and ordered an MRI of the brain, which showed significant white matter changes.
(i)On 27 November 2018, the testator had an episode in hospital, which may have lasted for 45 minutes and during which he suffered transient confusion, jumbled words and memory loss.
(j)The defendant initiated the engagement of a solicitor to prepare wills for herself and the testator on 30 November 2018 at 10.20am.
(k)Despite being actively involved in the testator’s care in the week during which instructions were given for the 2018 Will (including seeing the testator at midday on 30 November 2018 and reviewing the testator on 5 December 2018, two days before the testator attended upon the solicitor), the geriatrician was not told by either the testator or the defendant that the testator was in the process of executing a new will.
(l)The solicitor who took instructions in relation to the testator’s will on 7 December 2018 was not told about the cognitive decline of the testator, nor the involvement of a geriatrician, and did not take any steps herself to check or confirm the testator’s testamentary capacity.
(m)The solicitor further did not ensure that instructions for each will were given separately by the testator and the defendant.
(n)The testator told the solicitor that he did not have a prior will, when he had in fact executed two prior wills (albeit informal) and given a copy of one of them to the plaintiff for safe keeping.
(o)The defendant was the primary beneficiary of the 2018 Will and this represented a significant departure from previous wills the testator had signed.
(p)At the times the testator gave instructions and executed the 2018 Will, the defendant was present in the room with the solicitor.
(q)After executing the 2018 Will, in early to mid-2019, the defendant told a long-standing friend (Mr Dowling) confidentially that “Joe has dementia”, which I have taken as evidence of the defendant’s view that her husband was in cognitive decline, rather than any medical diagnosis of dementia.
43. When all of those matters are taken together, the circumstances are sufficient to raise a doubt about whether the testator had testamentary capacity at the relevant time (the giving of instructions and the execution) and thus displace the presumption.
44. It will be apparent from the established facts above that I have not accepted the defendant’s oral evidence in a number of respects. The defendant’s evidence in the witness box was at times evasive and at times non-responsive. When faced with medical records detailing what she had said to medical professionals, she was reluctant to accept that she had said anything negative about her husband’s cognitive decline. She deflected answering questions about her knowledge of the testator’s significant mental impairment issues by pointing to confusion or difficulty in knowing what was going on with testator’s other ailments and pain and emphasised that any memory loss was minor. Although she denied this when asked, I formed the view that she consciously sought to minimise the extent of the testator’s cognitive decline in the answers she gave under cross-examination.
45. Given the delay between hearing the evidence and the delivery of judgment, it should be recorded that that is a view which I formed and noted at the conclusion of the hearing and maintained upon reviewing the transcript of the evidence in its entirety, which has assisted in refreshing my memory of what occurred at the hearing.
46. One example is when the defendant was taken to the hospital notes dated 26 November 2018, which recorded, “new concerns of cognitive impairment”, and then expressly recorded that “the wife” gave the history, and further recorded, “wife has concerns with memory loss over past 1 year and rapid changes over just few months”.
47. When asked to confirm that is what she told the hospital staff on admission, the defendant’s answer was initially evasive, stating it was actually hard to work out what was going on because of her husband’s level of pain. When it was made clear to her that all that she was being asked to confirm was whether that was the information she gave the doctor at the time, the defendant said she really was not sure. She was reluctant to confirm that was her view at the time and instead repeated that she did not know what was going on, that the testator’s memory loss was “due to plants”, and that any memory loss was minor.
48. Another example was where she was asked whether part of the reason the testator was referred to a geriatrician was his memory loss and changes in cognition. Again, she was reluctant to confirm that this was one of the reasons, seeking to emphasise in her answer that “when you see a geriatrician, it’s for everything.”
49. However, the defendant had been present at the medical appointment with the testator’s GP, where the initial referral to the geriatrician was made. This is an extract of the referral dated 29 October 2018 to Dr Paramadhathil:
Thank you for seeing Joe aged 77. He is a retired CSIRO environmental scientist. He admits to decline in his memory, and he has had 3 probable TIAs in the last 12-18 months.
He admits to having trouble recalling the names of people and plants. His wife describes things as more severe than that. I did a MMSE on him in November 2017 and he scored 29/30 (lost one point on STM). He has had several brief neurological episodes which are probably TIAs. In one, he seemed vague and unable to talk or work the TV controller for about 4 minutes. In another, he had expressive dysphasia for about 1 minute. He had one episode where he had a visual hallucination, seeing a brown dog in the house. He is in sinus rhythm, CT brain showed deep white matter ischaemia, carotid dopplers were fine. He has had a couple of Holter monitors including a 3 day recording… and these did not show bradycardia or AF.
…
50. The referral went on to set out the physical ailments and medications the testator took (which were extensive). However, it is clear from the referral that the testator’s cognition was the primary reason for the referral.
51. The defendant was taken to clinical notes made by a hospital social worker where the worker recorded that the defendant had “noticed some changes to memory and personality of recent. Can be verbally aggressive”. The defendant accepted that had occurred. She was then taken to notes of where the social worker records discussing with the defendant a carer’s association and Dementia Australia. The defendant oscillated between stating that she could not recall that discussion happening, but then explaining that she probably would have rejected that suggestion because she could fully care for the testator. She then said she did not believe any conversation about respite care took place because the testator was not diagnosed with dementia.
52. The defendant purported to recall a conversation that she had with the testator about calling Dixons lawyers to make a will, which she said occurred as they were going down the steps as she left with the testator after he had been discharged from hospital on 30 November 2024. The lawyer’s file note of the telephone call indicated that in fact, the defendant had called her that morning, before the testator had been discharged. The file note was as follows:
File Note
30 November 2018
10.20am
T/A on [defendant] regarding her and husbands estate planning documents.
She informed me her and her husband do not have documents in place.
Her husband owns the house in his name only.
They have been married for 25 years. House burnt down in 2009 and they had to rebuild. All other assets are joint. They have both contributed to the property. She is concerned what happens when he passes.
Husband’s health is not great. He is currently in hospital, and unsure when he will be able to be discharged. He is 77. She is 67.
Janet sought advice from another local lawyer when her husband was in hospital regarding her estate plan, as she was very concerned that she had no plan in place. They want to use Dixon Advisory.
Social worker has also attended her husband’s bedside and recommends that her (sic) have a plan in place. Her husband she described as a procrastinator, and superstitious about will making.
Janet would like to attend an initial consultation with us to discuss both hers and her husband’s estate plan.
Best contact details …
53. The defendant’s evidence was that the other lawyer she saw was from “Gesini and Dunn”, that she spoke to a woman there and:
…she told me what I was entitled to. Then – that’s how all this falls into place. Then I went to Joe and I said, ‘the social worker wants us to make our wills,’ and he said, ‘We are going’ – and I said, ‘There is someone we could go to,’ and he said, ‘No, we’re going to Dixons.’ That was the end of the story.
54. When it was pointed out that none of that evidence was in the defendant’s affidavit, the defendant indicated that she did not think it was all that important. The difficulty with that evidence is that the defendant’s version in her affidavit painted a very different picture of what had occurred and sought to present the history as the attendance upon the solicitor at Dixon’s being all at the testator’s direction.
55. I also rejected the defendant’s evidence that she told the family friend, Mr Dowling, in early to mid-2019 that the testator had sleep apnoea rather than dementia. Her version of events was inconsistent with Mr Dowling’s evidence that she said to him “Joe has dementia but please don’t mention it”. It does not sit well with the medical evidence, which indicated that the testator had been managing sleep apnoea since October 2017 at the latest and that the cognitive decline was the more recent development being assessed. The defendant’s evidence also did not sit comfortably with the context in which Mr Dowling said the conversation occurred (which the defendant did not dispute) and the confidential context in which the information was imparted. She told Mr Dowling he was not to mention that fact, which he took as the defendant requesting him to keep the information confidential. Mr Dowling’s recollection of the conversation was more plausible given that context, and I therefore preferred his evidence over that of the defendant.
56. Even making allowances for what must have been a very difficult experience in having to sit in the witness box and answer questions about a man she plainly loved and for whom she was a most devoted carer, the defendant’s answers in these examples substantially eroded the confidence that could be placed in the defendant’s evidence more generally.
Has the defendant established testamentary capacity in respect of the 2018 Will?
57. The ‘scrutiny’ of the evidence discussed below deals first with the lay evidence, followed by the expert evidence, and then the documentary evidence.
The defendant’s evidence
58. The defendant gave evidence that it was “ridiculous” to suggest that the testator lacked the testamentary capacity to make a will. I have already dealt with the concerns I had about aspects of the defendant’s evidence. The concerns detailed above at [42] run contrary to the view forcefully expressed by the defendant. Other evidence given by the testator of short conversations she had with the testator where he said, “we will split it half-half” have been taken into account but approached with the caution for two reasons. First, there were internal inconsistencies in the defendant’s evidence about whether the testator was referring to the entire estate or only the family home. If the former, that is not the effect of the 2018 Will that the testator signed. Secondly, the authorities express considerable caution about such uncorroborated evidence. A detailed discussion is to be found in Robertson v Barker [2021] NSWSC 1682 at [134]-[144]. It suffices here to cite Plunkett v Bull (1915) 19 CLR 544 at 548-549 where Isaacs J wrote of the need for careful scrutiny of evidence of conversations involving a person subsequently deceased.
59. However, other aspects of the defendant’s evidence were relevant to providing an obvious basis for the significant change in the testator’s testamentary intentions from 2008 to 2018. The basis was that, during that period and as the testator’s health declined to the point where he required help with dressing, driving, medical appointments and numerous other daily challenges, the defendant loved and cared for her husband in a devoted partnership that many would envy.
Evidence of family friends
60. A number of family friends and former colleagues gave evidence, to the broad general effect that the testator was a person who continued to be engaged in his hobbies, social gatherings and intellectual conversations despite his declining health. However, none of that evidence grappled with the considerations required of the court in assessing testamentary capacity.
The medical evidence
61. In addition to the clinical records that have already been discussed, both the testator’s treating general practitioner, as well as the geriatrician, Dr Paramadhathil, gave affidavit evidence. They were not required for cross-examination.
62. The view of the general practitioner was that, whilst the deceased suffered a decline in his physical health from 2017, there was no indication to her of a corresponding decline in his mental health or his cognitive function. However, her evidence did not deal with any of the requirements for assessing testamentary capacity and therefore carries little weight in the present assessment.
63. The evidence of the geriatrician was more expansive in demonstrating an understanding of what was required by way of a medical assessment for testamentary capacity. He said that he had no independent recollection of the testator, that although he conducted tests as a screening tool, he did not assess testamentary capacity and that he was not asked to do so. He did not know that the testator was considering making a will. His view was as follows:
A person can conduct normal conversations with other people but still not have testamentary capacity. An assessment of testamentary capacity requires specific questions to be explored relating to a person’s testamentary intentions and an assessment of a patient’s comprehension of issues pertaining to wills.
64. The geriatrician gave further evidence that if he had been instructed to assess the testator for testamentary capacity, he would have explored issues in a non-leading way, specifically:
(a)Exploring his understanding of his assets;
(b)Exploring his family relationships; and
(c)Exploring and testing his reasoning ability and executive function in assessing what should happen to the testator’s estate.
65. Dr Paramadhathil expressly did not explore these matters with the testator.
The solicitor’s evidence
66. The solicitor who was engaged to prepare the wills for the testator and the defendant in December 2018 also gave evidence. The solicitor confirmed that she had been admitted as a solicitor at the end of 2017 and had worked for the firm engaged by the testator and defendant since October or November 2018. At the time that she acted for the testator, she was not what the authorities describe as an experienced lawyer. Nor was it apparent from the evidence that she was in any way supervised by an experienced lawyer.
67. Perhaps due to that inexperience, there was scant evidence as to the taking of instructions from the testator. There was certainly no file note in evidence of anything that was said or asked during the conference that occurred with the testator and the defendant on 7 December 2018.
68. The evidence included a document entitled Estate Planning Fact Finder, which the solicitor accepted was a template document sent to the testator and the defendant, prior to the appointment to take formal instructions on 7 December 2018. Accepting that there may have been some input into the document from the testator, the language of the document makes it clear that the defendant was the person who typed the information into the template document. It does not assist in demonstrating anything about the testator’s capacity.
69. With regard to what occurred at the appointment on 7 December 2018, the sum total of the affidavit evidence was contained in these lines taken from the solicitor’s affidavit:
Both Janet and Joseph Walker attended at the initial appointment. They indicated to me that they did not have Wills in place. I recall that during the appointment they were both engaged in the discussion regarding their assets and their family structure. Janet and Joseph Walker expressed their instructions regarding their estate planning documents to me verbally.
70. The solicitor was cross-examined and no further evidence was forthcoming about any questions that the solicitor asked the testator or anything the testator said that explained her view that the testator was “engaged”. She confirmed that the defendant was present the whole time with the testator, and that Mr Walker agreed they did not have wills in place.
71. In her affidavit, the solicitor said that there was nothing to suggest that there were any issues in relation to the capacity of either the defendant or the testator. However, under cross-examination, the solicitor confirmed:
(a)She did not know the testator had seen a geriatrician in relation to his health and specifically in relation to his memory and cognition; and
(b)She did not know the testator had prepared previous documents headed “Last Will and Testament” and she would have liked to have read those documents.
72. Following the initial meeting to take instructions, the solicitor sent a letter of advice on 11 December 2018 at 9.49am. Two days later, the defendant emailed the solicitor on behalf of herself and the testator, requesting a space the following week to sign everything and stating, “it all looks very satisfactory”.
73. The solicitor responded and indicated that there was a spot available on Wednesday 19 December 2018 at 2.30pm and that she would arrange for draft copies of the documents to be sent through for their approval prior to the meeting.
74. In relation to the signing of the wills at the appointment on 19 December 2018 (again with both the defendant and testator present together), the solicitor’s affidavit evidence was:
Before signing the documents, I went through each of the Wills that had been prepared for them both clause by clause to ensure they reflected their wishes and instructions, and to ensure that they both understood what they were signing.
75. The solicitor expanded upon this in her oral evidence, saying that the meeting lasted long enough for her to go through, in quite a bit of detail, the documents. She did not read out the words in the document. What she did was to go through each clause in the document, and to explain the document to both her clients (again together) in layman terms.
76. The solicitor rejected the suggestion that she asked them whether they understood the document, saying that it was not as simple as that. However, there was no evidence as to what steps the solicitor actually did take to ensure that the testator understood the draft will.
77. Again, there was no file note of what occurred at the execution of each of the wills on 19 December 2018. It is difficult to accept the solicitor’s evidence as to what she did when it was not corroborated by even the defendant. The defendant’s evidence was that the meeting with the solicitor on 19 December 2018 was a short meeting and lasted just enough time to sign the documents. I do not accept the solicitor’s evidence that she went through the wills clause by clause.
78. The solicitor concluded her affidavit evidence by referring to the test in Banks v Goodfellow, and stating that in her professional opinion, the testator had capacity to validly execute the 2018 Will. She deposed to the testator being able to recall the nature of his assets and specifically his primary asset, the family home. She said that he understood that he had obligations to both Janet and his children, the nature of the will and its effect. In addition, the testator was able to appreciate the benefits of a testamentary trust, describing the benefits of the trust with words to the effect of “protection from all those problems”.
79. Applying Veall and the authorities discussed above, that opinion has been shown to have been formed by a lawyer who was inexperienced at the time, without any proper enquiry and without a basis of any deliberate assessment. Her evidence makes it clear that she did not take the precautions outlined above in cases such as Veall and Ryan. There is nothing to support the solicitor’s view about the testator’s capacity, which on careful scrutiny amounts to no more than an ill-informed assumption made by the solicitor. To use the language in Veall at [210], this results in the solicitor’s evidence being worthless in any assessment of testamentary capacity.
80. Whether by accident or design, it is unfortunate that the geriatrician was not told by the defendant about the intended will, and further, that the lawyer was not told about any cognitive decline. The lawyer was clearly told that the testator was in declining health, but that matter does not seem to have caused any subsequent enquiry to have been made about the testator’s testamentary capacity.
81. I accept that the defendant may have genuinely believed she was assisting her husband to put his affairs in order before his mental decline reached a point where he was formally diagnosed with dementia or worse. However, the failure to disclose what were clearly concerns about her husband’s cognitive decline to the lawyer and that the making of a new will was imminent to the geriatrician deprived the professionals of taking important steps to protect the integrity of the 2018 Will and has actually worked against the defendant as the propounder of the 2018 Will in this case.
The change in testamentary disposition from the informal wills
82. Although the terms of the 2018 Will in question constitute a significant change from the prior wills that were signed by the testator, it is perhaps worth considering that in the previous wills, the testator envisaged the defendant receiving a one third share of the family home and half of any other real property owned by the testator, with his daughters receiving two thirds of the family home and half of any other real property. By the time the testator came to execute the 2018 Will, there was no other real property. Quite apart from the fact that another ten years of marriage had passed between the testator and the defendant between the making of the 2008 Will and the 2018 Will, and the fact that his daughters were ten years older and better positioned in life, and his wife was also ten years older, a rational explanation for changing the will includes the obvious fact that the nature of the testator’s envisaged estate had changed since the drafting of the informal wills. It appears from communications the testator had with his solicitor in 2003 and 2004 that the testator had previously owned other real property, as there is a reference to an apartment which was later sold. These are all available explanations for why the testator may have chosen to make significant changes in the 2018 Will.
The testator’s markings of the draft will establish capacity
83. The draft will sent to the testator is critical to both the resolution of whether the testator had testamentary capacity and whether he knew of and approved the contents of the will.
84. Following the taking of instructions and before the 2018 Will was executed, the solicitor sent to the defendant and the testator an advice, followed by their wills in draft form, along with the draft enduring power of attorney documents which were to be executed at the same time.
85. A number of handwritten markings are on the draft will and on the advice for the estate planning strategy. The defendant’s evidence was that those marks and writing were made by the testator prior to signing the 2018 Will. That is consistent with the changes and spelling corrections on the draft will being incorporated in the 2018 Will that was signed. The defendant was also not challenged on the handwriting being that of the testator and I accept her evidence in that regard.
86. Without going through each marking and explaining the location where each marking appears next to each clause of the draft will or advice, the markings collectively satisfy me of the following:
(a)The testator read the will in draft form and the advice accompanying it. That is evident from the number of markings, the fact that they are located throughout the documents and most significantly, their changing nature (lines, ticks, crosses, question marks and words). The will was not a document that the testator skim-read.
(b)The testator had the capacity to know that one of his daughter’s middle names had been omitted from the advice and from one location in the draft will and further, he knew what that daughter’s middle name was. He inserted her middle name at the relevant point in the draft will.
(c)The testator had the capacity to question clauses that he did not understand, as seen by the question marks in places on the document.
(d)The clauses that the testator questioned (by the placing of question marks) were, in my view, terms that were reasonable for a lay person to question, demonstrating an active engagement with the actual terms of the will. For example, clause 10 of the draft will proposed a life interest for the defendant, requiring the executors to hold the interest on trust in accordance with a schedule (which set out the terms of the life interest). However, by clause 5, the will named the defendant as the primary executor. The clause reads as the executor holding the interest in the home on trust for herself as the holder of the life interest (but ultimately on trust for the three daughters). It is understandable that a competent testator would query that wording.
(e)The testator had the capacity to weigh up whether to hold the family home asset as a joint tenant or as a tenant in common. This may be inferred from:
1․ the handwritten double lines next to the explanation of joint tenancy, indicating that the testator considered that option; and
2․ the writing of the word “yes” next to the option for the house to be held as tenants in common.
(f)The testator noted that the will shall include a right for the survivor to reside in the property, meaning that no child will receive their share of inheritance until the surviving spouse no longer wishes to make use of the right of residency clause, as seen from the marks next the clause of the advice explaining that term.
(g)The testator knew that in order for the residential home to pass as tenants in common with each of the testator and the defendant leaving their half to their own children, he would have to transfer half of the interest to his wife. That fact may be inferred from the handwritten tick next to the requirements for a stamp duty exemption explained in the advice (a matter that only arose if the testator decided to transfer half an interest in the family home to the defendant). In my view, that tick indicates that the testator understood the clause itself, as well as indicating that the testator believed he and the defendant were eligible for the stamp duty exemption (because they both resided at the property as their place of residence).
(h)The testator had the capacity to weigh up whether to include a testamentary trust for tax purposes, as indicated (again) by him placing a tick next to the recommendation of drafting the will to include discretionary testamentary trust. This is further confirmed by markings later in the advice, where the testator ticked the solicitors’ quote for the drafting of a will with testamentary trusts ($3,900), as opposed to the quote for the standard will without testamentary trusts, for which the solicitor quoted a lesser fee.
(i)The testator intellectually engaged with the individual terms of the discretionary trust that were set out, which may be seen from the handwritten ticks he placed against the each of the recommended terms of the trust. From this it may also be inferred that the testator believed he understood those terms and agreed with them, as in other places in the document, there were question marks or crosses. For example, in relation to the part of the advice which discussed a protective testamentary trust, the testator placed a cross, from which it may be justifiably inferred that he understood the contents of the aspect of the advice and did not wish to impose a preservation age in respect of a trust benefiting any of his adult children.
(j)The testator expressly ticked the strategy recommended in the advice, which included the will including the discretionary testamentary trust, the enduring power of attorney, the binding death benefit nomination, the application for a replacement certificate of title and the completion of the transfer of the certificate of title. Those marks demonstrate the testator had read the solicitor’s recommendation and agreed with the advice given.
(k)The testator also wrote some calculations of the various components of the fees estimated. The figures he wrote (namely $3,900 and $1,650) were expressly for the option that included the drafting of a will with a testamentary trust included and the replacement transfer. This is a further indicator that the testator had the capacity to understand that he was choosing between a standard will in simple format and a will which included a testamentary trust, and that he intended to choose the latter. The evidence is also indicative of an understanding that he was choosing an option which envisaged a scheme of transferring part of his title to the property to the defendant, referred to in earlier (g), as the $1,650 was expressly referable to the fee for obtaining a Replacement Certificate of Title and Transfer of Title.
87. I acknowledge that some of the handwriting is not quite discernible and that some of the handwriting is ambiguous in meaning (in particular, the words “all the children”, where the solicitor’s advice seeks further information as to who the testator would like to gift the estate to if everyone is deceased). However overall, the above markings are enough to affirmatively demonstrate that the testator:
(a)had the capacity to understand that he was preparing a will that had testamentary effect;
(b)knew who his potential beneficiaries were (his wife and children);
(c)appreciated the primary asset in his estate was the residence in which he and his wife lived;
(d)did not want the entirety of the family home to pass to the defendant through joint tenancy. He intended instead that the defendant become a tenant in common (which is consistent with the testator later signing a transfer of a 50% interest to that effect) and that he would then leave his interest to his children; and
(e)intended that following his wife having a life interest, his children be beneficiaries through a testamentary trust structure, not through a simple gift of the residue in their own right.
88. It is appreciated that these markings are on the draft will and advice, not the will itself, but the draft is substantially similar to the 2018 Will that was signed, and it will be recalled that the question is of capacity, not the exercise of it.
89. Accordingly, having examined the whole of the evidence with the vigilance required, the residual doubt that arises from the paucity of evidence demonstrating testamentary capacity at the relevant times (instruction and execution) – in particular the lack of any medical or legal assessment expressly dealing with that question – does not preclude the belief that the document propounded is the will of a testator who possessed sound mind, memory and understanding at the time of its execution. The evidence as a whole proves the essential considerations for capacity.
90. I am fortified in that finding because of a conversation that the plaintiff deposed to having with the testator and with one of her sisters in August 2019, four days before he died. He was asked about who was looking after his will. The testator said that “if it all goes sideways, all you girls are covered in trust…and you can get the money any time you like”. He was then asked whether Siobhan was his executor, and he said (my summary) that although he could not honestly remember, he thought that Siobhan and Janet were looking after his side of things. That discussion can only be a reference to the testator viewing the 2018 Will as constituting his last will, and as having provided for his three daughters by way of discretionary testamentary trusts.
Issue 2: Did the testator know of and approve the contents of the 2018 Will?
Applicable principles
91. The applicable principle was explained in Veall (referring to Tobin among other authorities) at [169]:
Once the propounder has proved that the testator had testamentary capacity and that the will was duly executed, a further presumption arises that the testator knew and approved the contents of the will. As with the presumption of testamentary capacity, the presumption of knowledge and approval can be displaced by circumstances giving rise to a suspicion that the testator might not have appreciated the contents of the will and approved them. The burden then shifts back on to the propounder, who must adduce affirmative proof that the testator knew and approved the contents of the will.
92. The Victorian Court of Appeal in Veall went on to state (at [172]) that the evidence sufficient to allay the court’s suspicion will depend on the circumstances that made the execution of the will suspicious. Proof that the will was read by or read to the testator before its execution may not be sufficient; nor will evidence that the will was explained to the testator: Veall at [176].
93. A similar statement (approved in Veall at [179]) was made in Tobin, where Meagher JA stated at 771-772:
Evidence that the testator gave instructions for the will or that it was read over by or to the testator is said to be ‘the most satisfactory evidence’ of actual knowledge of the contents of the will: Barry v Butlin ...; Gregson v Taylor ...; Re Fenwick ... What is sufficient to dispel the relevant doubt or suspicion will vary with the circumstances of the case; for example, in Wintle v Nye ... the relevant circumstances were described ... as being such as to impose ‘as heavy a burden as can be imagined’. Those circumstances may include the mental acuity and sophistication of the testator, the complexity of the will and the estate being disposed of, the exclusion or non-exclusion of persons naturally having a claim upon the testator, and whether there has been an opportunity in the preparation and execution of the will for reflection and independent advice. Particular vigilance is required where a person who played a part in the preparation of the will takes a substantial benefit under it. In those circumstances it is said that such a person has the onus of showing the righteousness of the transaction: Fulton v Andrew ...; Tyrrell v Painton ... That requires that it be affirmatively established that the testator knew the contents of the will and appreciated the effect of what he or she was doing so that it can be said that the will contains the real intention and reflects the true will of the testator: Tyrrell v Painton ...; Nock v Austin ...; Fuller v Strum ...; Dore v Billinghurst ...
The evidence here – is there a doubt, or are there suspicious circumstances?
94. The same issues that arose in respect of testamentary capacity arise in respect of whether the testator knew and approved the contents of the will. The defendant was the primary beneficiary of the 2018 Will and she played a significant part in its preparation. She made the initial appointment to see the solicitor. She filled out the Estate Planning Fact Finder document. She was present at the conference where instructions were given and when the 2018 Will was executed. When advice was received by the testator, it was received through the defendant, and the advice to the testator was not independent from that received by the defendant. The joint response to the solicitor confirming that the contents of the draft wills “all looks very satisfactory” came from the defendant.
95. The terms of the 2018 Will were complex, due to the testamentary trust and life interest structures. There were also the cognitive concerns evident in the medical records for the testator (discussed already) and again, there were no precautions taken to ensure not only that the testator was freely giving instructions to the solicitor, but that he understood the advice as to the terms of the will to be drafted, and that he approved of those terms.
96. Those matters are sufficient to give rise to a doubt about whether the testator knew and approved the contents of the 2018 Will.
Has the defendant established the testator’s knowledge and approval of the 2018 Will?
97. The resolution of this question broadly follows the same reasoning process as that taken in relation to testamentary capacity. Without repeating the discussion as to the gaps in the evidence and the lack of basic precautions taken, the facts that ultimately have persuaded me the testator knew and approved of the contents of the 2018 Will are:
(a)The testator was plainly a person who had attained a high level of intellectual sophistication.
(b)Although he was in declining physical and cognitive health, the medical evidence (including the GP’s evidence) and lay evidence of friends established that, as at December 2018, the testator retained a level of mental acuity.
(c)The estate being disposed of was not complex. The sole real estate asset was the family home. There were personal chattels and otherwise reference to the testator’s superannuation which was the subject of advice, the advice being to make the superannuation the subject of a binding death benefit nomination and thus exclude it from being included in the estate upon the testator’s death.
(d)In respect of the handwritten markings of the estate planning advice and draft will, having regard to the frequency of the markings, their nature and their location throughout the documents, they are sufficient to establish that the testator read over the 2018 Will in draft form and had sufficient opportunity to review it before he signed it.
(e)Further the markings are indicative of the testator knowing what the terms of the will contained, approving of the estate planning strategy recommended by the solicitor and approving of the terms of the will.
(f)Finally, although the solicitor’s evidence as to what occurred on 19 December 2018 did not assist with establishing testamentary capacity, I have given it some weight in proving that the testator approved of the contents of the will. I do not accept that the solicitor went through the draft will in some detail. In combination with the evidence given by the defendant, I consider it more likely that the solicitor relied on the testator reading the suite of documents in draft prior to attending to execute them and that the meeting was just to sign the documents. However, I do accept that the testator’s formal act of attending a solicitor’s office to sign a will that he had read in draft form, with the capacity to understand that is what he was doing (as I have found), even with his wife of 25 years in the room as a beneficiary, is relevant evidence of approval of the terms of the document.
98. Drawing those findings together, the testator read the terms of the will in draft form before it was signed, at some point between 11 December and 19 December 2018. The testator approved of the terms by the markings made on the draft and the fact that any changes to the solicitor were communicated, presumably through the defendant, although there was no direct evidence of that communication. That inference is drawn from the fact that the handwritten corrections appear in the final document. The testator then ultimately travelled to the solicitor’s office to sign the document. Taking the evidence as a whole, it has been established that the testator appreciated the effect of what he was doing, and I think it can fairly be said that the will contains his real intention and reflects his true will. Again, statements made shortly before the testator died are consistent with that finding.
99. The consequence of the findings in relation to Issues 1 and 2 is that the 2018 Will constitutes the last will and testament of the testator.
Issue 3: Should declarations of validity be made in respect of either the 2008 or 2003 testamentary documents?
Given the findings above in relation to Issues 1 and 2, it is unnecessary to deal with the earlier wills. The finding that the 2018 Will was valid revokes any earlier will: s 21(b)(i) of the Wills Act.
For completeness, I will briefly record that had I found to the contrary, and applying the legal principles discussed in In the Estate of Gallagher [2022] ACTSC 324 at [11]-[17], I would have been satisfied that the 2008 Will was a document which embodied the testator’s testamentary intentions and that the testator intended it to operate as his last will and testament at the time he executed it. But for the subsequent 2018 Will, I would have considered it appropriate to declare that the 2008 Will constituted the testator’s last will under s 11A of the Wills Act.
Issue 4: Was the Transfer the product of undue influence?
The plaintiff’s case was not argued on the basis of actual undue influence. It was that the defendant was in a position of influence over her husband, to such an extent that a presumption of undue influence arose at law in respect of the Transfer giving her half of the family home. The plaintiff submitted that the presumption was not rebutted because, among other things, the defendant did not ensure that her husband had access to independent legal advice when executing the Transfer.
Applicable principles
The principles underlying the doctrine of undue influence have been explained in detail in Wu v Wu [2024] ACTCA 8 (Wu) at [33]-[76] and without repeating them in full, those principles apply here. Wu was a case where the influence of a wife over her husband in respect of the transfer of the family home was similarly under consideration, although in that case, the transfer was to a third party, one of the couple’s daughters.
A husband and wife are not included in the established categories where undue influence will be presumed; something more must exist. As explained in Wu at [64]-[65]:
64․ In Saintclaire & Saintclaire [2015] FamCAFC 245 (Saintclaire) at [18], the Full Court of the Family Court of Australia adopted the following in Tulloch (deceased) v Braybon (No 2) [2010] NSWSC 650, (Tulloch)per Brereton J at [51] (emphases added):
A husband and a wife obviously are vis-a-vis each other in positions of trust and confidence and influence, but one does not ordinarily have over the other such authority as to make such relationships a presumed relationship of influence, nor (without more) a special relationship of influence. It is where the relationship is such that one party is seen or supposed to be in some way beholden, obliged, or disadvantaged in relation to the other, that such relationships are presumed or can be proved, and dominion or ascendancy is at least usually an important factor.
65․ Another way of putting that idea is that a husband/wife relationship is one where commonly each relies on the other to make many decisions for their benefit, either individually or collectively as a family unit. For example, in such relationships, one person may assume control of financial decision-making on a daily basis. Ordinarily, that fact does not, without more, create a special relationship of influence. Conversely, the fact that a person is in a spousal relationship does not ipso facto exclude the relationship from the application of the doctrine. There may be cases where a person in such a relationship is “in some way beholden, obliged, or disadvantaged” in relation to the other: Saintclaire at [18], citing Tulloch at [51]. However, the mere fact that one spouse may allow their affairs to be managed by the other for their personal convenience does not necessarily establish a relationship with the necessary ascendant quality.
In determining whether there was a presumption of undue influence created between the husband and wife, the court considers whether there was a relationship of trust and confidence where one achieved ascendancy and power over the other, and secondly, whether the party who has ceded the trust and confidence makes a gift so large, or enters into a transaction so improvident, as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary men act: Goldsworthy v Brickell [1987] Ch 378 at 401, cited in Wu at [68].
The court in Wu cited (at [70]) the following summary provided in Quek v Beggs (1990) 5 BPR [97405] 11,761 (Quek)at 11,764 – 11,765:
A donor (or if he or she is deceased, a representative of his or her estate) will prima facie be entitled to have a gift set aside on the ground of undue influence upon proof of:
(a) facts establishing that the gift was made by the donor as a result of undue influence of the donee; or
(b) facts that give rise to a presumption that the gift was so made, unless the donee rebuts the presumption in the manner mentioned below.
A presumption of undue influence arises if it is proved –
(a) that at the time the gift was made there existed a relationship between the donor and the donee of such a nature as to involve reliance, dependence or trust on the part of the donor resulting in an ascendancy on the part of the donee; and
(b) that the gift is so substantial, or so improvident, as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act: Allcard v Skinner [1887] UKLawRpCh 151; (1887) 36 Ch D 145 at 185; Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113 at 134-5; Yerkey v Jones [1939] HCA 3; (1939) 63 CLR 649 at 675; Goldsworthy at 400-1.
In such cases, “the Court interferes, not on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy, and to prevent the relations which existed between the parties and the influence arising therefrom being abused”: Allcard at 171...
However, the presumption may be rebutted. The applicable principle (see Wu at [71], citing Quek at 11,765) is that a donee may rebut the presumption of undue influence, when it arises, by proving that the donor:
(a)knew and understood what he or she was doing; and
(b)was acting independently of any influence arising from the ascendancy of the done.
Applying the principles to the evidence here
The evidence here has been discussed in detail in relation to other issues. It needs to establish that there was a relationship of ascendancy, that there was an improvident transaction, and that any consequent legal presumption was not rebutted. None of those three matters has been made out.
First, the evidence taken as a whole established that there was undoubtedly a relationship of trust and confidence, and that the testator relied and depended upon the defendant. That is, the evidence was consistent with the type of influence the authorities speak of as being obvious in a relationship of husband and wife, without being undue.
However, the evidence did not go so far as to establish the necessary quality of ascendancy in respect of the testator’s decision-making. It did not, for example, rise as high as demonstrating that the defendant dealt with all financial and property matters. The plaintiff’s unchallenged evidence was that her father managed his own financial affairs until 2018. The defendant’s evidence also referred to discovering things that the testator had done without her knowledge by way of financial gifts and support for his children. It did not establish that the testator abdicated his decision-making to his wife, or that he was so enthralled by her (or beholden to her) that he generally went along with any decision she made.
Secondly, even assuming the contrary to be the case, I would not have found that the Transfer was an improvident gift. Giving half an interest in the testator’s family home to his loving wife of 25 years – a person who had lived in the house with him for the duration of their marriage and contributed financially to its improvement – with a view to permitting the disposal of the asset equally to their collective children upon their deaths, was a gift that may reasonably be accounted for on the ground of the length of the marriage relationship and the recognition that the asset was now a product of their joint endeavour through life. There was some evidence about the quantum of the defendant’s financial contributions to the family home asset itself, which I accept. However, the contributions to a marriage are inevitably broader than that.
That the defendant was not in the position of the testator’s first wife (that is, she was not part of the testator’s life when the asset was originally purchased) does not result in the relationship and providence of the gift being viewed differently when it comes to a consideration of ordinary motives under which people act. Second in time does not mean second best. Without the defendant’s involvement in the care of the testator, he may well have been in a nursing home and the family home sold long ago. I accept that the Transfer was a substantial gift, but it was not so improvident as to give rise to the presumption. Although the gift was valuable, it was commensurate with recognising a genuine life partnership.
Thirdly, assuming that a finding was made to the contrary, namely that a presumption of undue influence did arise, I would have found that it was rebutted. It is true that the solicitor that gave advice was not truly independent, in the sense that she was jointly instructed by the testator and the defendant. However, it is not the case that the testator had no professional advice, and it was the solicitor who gave the advice about the Transfer as part of an overall succession planning scheme. It would be an unfortunate development if in order to guard against the risk of future allegations of undue influence by one against the other, a married couple had to see separate solicitors for advice on succession planning (as distinct from seeing the same solicitor privately in respect of confirming instructions for their will).
The testator acted upon that professional advice. In doing so, I have found that ultimately, he knew and understood what he was doing. In the circumstances of this case, the solicitor’s involvement was sufficient to ensure that the testator acted independently of any influence that may have arisen by the ascendancy of the recipient. It was in the testator’s interests to put his affairs in order and part of that process was ensuring that his wife was able to enjoy secure accommodation after he died.
Accordingly, the case on undue influence in respect of the Transfer has not been made out.
Issue 5: Was the Transfer brought about by the defendant’s unconscionable conduct?
The applicable principles were discussed in Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 276 CLR 1 (Stubbings) at [39]-[45], discussed in Wu at [108]-[109] and [122].
A finding of unconscionable conduct requires three elements to be established, although not as separate elements, with the assessment made by reference to a precise examination of the facts and scrutiny of the exact relationship giving rise to the claim in equity:
(a)A relationship that places one party at a “special disadvantage” vis-à-vis the other;
(b)Knowledge of that special disadvantage by the stronger party; and
(c)Unconscientious exploitation by the stronger party of the weaker party’s disadvantage.
Special disadvantage means something that “seriously affects the ability of the innocent party to make a judgment as to his [or her] own best interests”: Stubbings at [40] and the authority there-cited.
I have assumed without deciding that there was a special disadvantage in the extent of the testator’s significantly failing health and that the defendant knew of the testator’s special disadvantage or vulnerability. Considering how the willingness of the testator to execute the Transfer was produced, there may be an argument, for example, that the defendant knowingly took advantage of her husband’s weakness by failing to tell the solicitor the full story about the testator’s state of health. While that conduct (if deliberate) might be unsatisfactory, I do not think it constitutes unfair tactics or conduct that may be said to offend against good conscience. At best, the evidence established that the defendant galvanised the testator into action to meet with the solicitor. It need hardly be said that spouses spur each other on every day to better organise their affairs or attend to long-deferred tasks. When the legal advice that was given is considered, it was comprehensive enough in terms of options explored to remedy the testator’s disadvantage.
The lack of advice separate from the defendant is of course relevant because the testator’s conduct in divesting himself of half of his only significant asset may be viewed as a gift detrimental to the testator’s interests. It might be argued that the testator in fact required independent financial advice as well as independent legal advice.
However, similar to the reasoning in respect of undue influence (ordinary motives explaining the transaction and detriment not necessarily constituting improvidence), that is not the only way to view the Transfer.
First, the testator’s interest in residing in the property was protected in part by the terms of the mirror will that the defendant signed before the Transfer was executed, giving the testator a right of residence for life.
Second, the Transfer is not to be viewed in a vacuum, divorced from the context of the relationship of marriage, which was of significant duration. The execution of the Transfer resulted from the receipt of professional legal advice which was directed broadly to achieving ultimate equality across the whole blended family unit. In that regard, the testator and the defendant actually had a common interest.
Rather than a specially disadvantaged testator willingly entering into a detrimental financial transaction without independent advice such as to bring about concerns about unconscionability on the defendant, an alternative view is that all that the testator was doing, with professional assistance, was bringing his legal interests into line with his moral obligations to the entire family and in particular, his wife. The gift was part of the testator’s succession plan in providing for his wife. As will be seen in the reasons below with respect to the FP Act claim, the gift was consistent with the actions of a wise and just testator.
In all the circumstances, the fact that the testator, in significantly failing health, made a substantial gift of property to his wife without the benefit of separate financial and legal advice and the defendant knew these circumstances does not (in my view) amount to unconscientious exploitation of the testator’s disadvantage.
Issue 6: Should the Court extend the time in which to bring family provision claims?
In light of the findings above, the defendant’s family provision claim, which was brought defensively, largely falls away. In respect of the plaintiff’s claim, an application for family provision must be made within 6 months from, relevantly here, the grant of probate: s 9(1) of the FP Act. Probate was granted on 14 September 2020. The plaintiff commenced the present proceeding on 20 October 2021, supporting the originating application by an affidavit affirmed by her on 19 October 2021. The plaintiff is therefore out of time by approximately 6 months. One of the orders sought in that application was an extension of time.
The power to extend time under s 9(2) of the FP Act is discretionary. The plaintiff bears the onus of showing sufficient cause for an extension of time to be granted. Matters to be considered include the strength of the applicant’s case for provision, the explanation for why the application was not made within time, whether any beneficiaries whose interests might be affected by the making of an order would be prejudiced and whether there has been any conduct of the applicant or the beneficiaries whose interests might be affected that, having regard to its consequences, might justify the grant or refusal of the application to extend time: Verzar v Verzar [2014] NSWCA 45; 12 ASTLR 523 at [25], see also Smith v Public Trustee of the Australian Capital Territory [2012] ACTSC 4; 6 ACTLR 126 at [16] and Roberts v Stern [2017] ACTSC 182 at [12] in this jurisdiction. It is necessary to satisfy the court that the circumstances are such as to make it unjust for the plaintiff to be penalised for bringing an application for family provision out of time.
Moreover, as the plaintiff is seeking an indulgence, the application for an extension of time should be made promptly: Re Guskett (1947) VLR 212 at 214 per Herring CJ.
There was no issue that the plaintiff is eligible under s 7(1)(c) of the FP Act to apply for family provision as a daughter of the deceased. Given the terms of the 2018 Will, the plaintiff has been left with no immediate provision, which by itself would suggest that there is a case for family provision to be made. Although there was no explanation for the delay, the estate had not been distributed and there was no apparent prejudice to the beneficiaries. Taking all those matters into account, it is appropriate to extend the time in which to bring an application. Had it been necessary to separately consider the defendant’s claim (rather than to consider its substance as part of the plaintiff’s application), it would follow that an extension of time would also have been granted in respect of the defendant’s application.
Issue 7: Is adequate provision for the plaintiff’s proper maintenance, education or advancement in life available under the 2018 Will?
The plaintiff’s application is to be considered under s 8 of the FP Act, which is in the following terms:
8Family provision orders
(1)On application by a person entitled, under section 7, to apply for provision out of the estate of a deceased person, the Supreme Court may order that the provision as that court thinks fit be made for the applicant out of the estate.
(2)The Supreme Court shall only make an order under subsection (1) if satisfied, in consideration of the criteria set out in subsection (3), that as at the date of the order, adequate provision for the proper maintenance, education or advancement in life of the applicant is not available—
(a) under the will of the deceased; or
(b) if the deceased died intestate—under the law applicable to that intestacy; or
(c) under that will and that law combined.
(3)The criteria for the Supreme Court’s decision under subsection (2) in relation to the deceased and the applicant are as follows:
(a)the character and conduct of the applicant;
(b)the nature and duration of the relationship between the applicant and the deceased;
(c)any financial and non-financial contributions made directly or indirectly by or on behalf of either or both the applicant and the deceased to the acquisition, conservation or improvement of any of the property or financial resources of either or both persons;
(d)any contributions (including any in the capacity of homemaker or parent) by either the applicant or the deceased to the welfare of the other, or of any child of either person;
(e)the income, property and financial resources of the applicant and the deceased;
(f)the physical and mental capacity of the applicant, and the deceased (during his or her life), for appropriate gainful employment;
(g)the financial needs and obligations of the applicant and the deceased (during the life of the deceased);
(h)the responsibilities of either the applicant or the deceased (during his or her life) to support any other person;
(i)the terms of any order made under the Domestic Relationships Act 1994, section 15 with respect to the property of the applicant or the deceased;
(j)any payments made to either the applicant or the deceased by the other, under an order of the court or otherwise, in respect of the maintenance of the other person or any child of the other person;
(k)any other matter the court considers relevant.
…
Taking the words of the legislation, the court assesses what is ‘adequate’ provision under a will for a claimant’s ‘proper maintenance, education and advancement’ in the particular circumstances of the case. The question of adequacy falls to be determined “as at the date of the order”; that is, having regard to facts as they exist at the time of the hearing, not at the time of the death.
I have previously set out the principles relevant to a claim for family provision in detail in Armouti v Nenes [2022] ACTCA 3 at [70]-[98] (Armouti), including the concept of what is ‘proper’, the focus on the discharge of the testator’s moral duty by making adequate provision for the plaintiff concerned, the importance of preserving testamentary freedom, and claims made by adult children, as to which there are no special rules and no special need is required before a claim may be made. Although I dissented in the ultimate result, the principles themselves were not the subject of controversy and have since been applied in cases such as Richardson v Richardson [2022] ACTSC 363; 20 ACTLR 37 at [106]. The same principles have also been set out at appellate level in Bassett v Bassett [2021] NSWCA 320 (Bassett) at [78]-[89], which included reference to McCosker v McCosker (1957) 97 CLR 566 at 571–572 (McCosker), where Dixon CJ and Williams J explained (emphasis added):
The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v. Perpetual Trustee Co. (Ltd.) (1938) 55 WN (N.S.W) 38, at p. 39 the word ‘proper’ in this collocation of words is of considerable importance. It means ‘proper’ in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent.
The significance of the emphasised words is to explain first, that ‘proper’ takes into account the competing claims of all beneficiaries and their relative urgency, and second, that the court’s intervention is governed by considering whether there has been a breach of the testator’s moral duty having regard to all the circumstances.
As stated in Vigolo v Bostin [2005] HCA 11; 221 CLR 191per Callinan and Heydon JJ, at [122]:
... Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances ... The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.
Having cited the above passage, the NSW Court of Appeal in Bassett went on at [86] to state:
Vigolo is also significant because three of the five justices (Gleeson CJ, Callinan and Heydon JJ) supported the continuing utility in this field of discourse of notions of moral obligation and duty. Thus, Gleeson CJ (at [25]) observed that:
“In explaining the purpose of testator's family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text.”
See also Callinan and Heydon JJ at [121], cf Gummow and Hayne JJ at [63]–[73].
An order for provision is not to be exercised according to “idiosyncratic notions of what is thought to be fair or in such a way as to transgress, unnecessarily upon the [deceased’s] freedom of testation”: McKenzie v Topp [2004] VSC 90 at [63] per Nettle J; and Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19 per Dixon CJ.
The considerations in the present case
In this case, a number of the mandatory considerations may be dealt with briefly. There was clearly a strong relationship of love and support between the plaintiff and her father. He supported her in her adult life through various ad hoc gifts and when she was living overseas. He had intended to help her with paying for her further studies, but he died before that occurred. She assisted in caring for him and supporting him through his health difficulties. There is no disentitling conduct.
The plaintiff does not have responsibilities to support any other person. There are no court orders affecting the application, nor any maintenance obligations in respect of the plaintiff or the testator.
The plaintiff is an Area Manager for Apprenticeship Careers Australia. She receives a net income of approximately $70,000 a year. There are some Telstra Group Limited shares owned jointly by the plaintiff and her sisters, which the testator owned. Their value as at August 2023 was $4,592. Whatever the present value, it is not substantial enough to feature in the current considerations.
The plaintiff’s husband is an IT Quality Assurance Manager, with a gross annual income of $170,000. He also owns three cars, collectively valued at approximately $200,000. The expenses for maintaining those vehicles are approximately $1,300 per month.
The plaintiff had savings of around $48,000 as at the date of hearing, although part of those funds was provided by her sisters to assist with legal fees being incurred in these proceedings, which are yet to be paid and which on the evidence before the court far exceed that amount.
The plaintiff owns a residential property jointly with her husband valued at over half a million dollars, but which is encumbered by a mortgage of just over $300,000.
The plaintiff has a thyroid problem although it appears to be manageable with surgery, which will be expensive but was an option which the plaintiff was still considering due to the risks associated with it. Also in evidence was the fact that her husband was involved in a motor vehicle accident, which affects his mobility. He requires treatment and therapy on a monthly basis although he did receive a compensation settlement for such expenses. There are no dependants, although the possibility of children remains within the couple’s contemplation.
Two other relevant considerations are the competing claims of other beneficiaries, and the nature of the testamentary scheme devised by the testator. I have addressed those together because the main competing claim is that of the defendant and it is interlinked with the testamentary scheme devised by the testator to provide for her.
In that regard, the life interest in the family home that was given to the defendant under the will has meant that all the funds to which the testator’s daughters would have received from their father’s estate are essentially tied up in one asset for an unknown period of time. I have generally borne in mind appellate decisions such as Golosky v Golosky (Unreported, Supreme Court of New South Wales Court of Appeal, Kirby P, Handley and Cripps JJA, 5 October 1993) (Golosky) dealing with principles applying to provision made for a widow, and other general guides such as that the court will make more ample provision for a widow than in the case of children, if the children are physically and mentally able to maintain and support themselves: Sayer v Sayer; Garbutt v Sayer [1999] NSWCA 340 (Sayer) at [8] (per Sheller JA, with whom Davies AJA agreed), citing In Re Allardice, Allardice v Allardice (1910) 29 NZLR 959 . Without confining the necessarily fact-dependent exercise of discretion by rules of general application (a point made clear in Bladwell v Davis [2004] NSWCA 170 at [12]-[19] referring to both Golosky and Sayer), it suffices to state that the defendant has a clear competing interest in maintaining the life interest given to her under the 2018 Will.
The defendant did not disclose her true financial position, including that she had recently re-partnered. I have taken into account the fact that originally, the defendant’s competing family provision claim was not intended to be determined at the same time as the issues concerning testamentary capacity which explains the lack of full disclosure. While she was understandably reluctant to discuss the current relationship in the witness box, it emerged the defendant’s new partner has sold his own home for $900,000 and was living with the defendant in the family home and equally enjoying the benefit of the defendant’s life interest in that home, given to her by the testator. As discussed in Tarbes v Taleb [2023] NSWSC 565 at [280]-[283], while the defendant here was entitled not to raise her own competing financial resources and needs and simply look to the court not to disregard the testator’s freedom of testamentary disposition, the result is that the court may proceed effectively on the basis that she does not contend her financial circumstances are such as to reduce or limit what might be assessed as proper provision for the plaintiff.
That is not to say that the court may ignore considerations about the defendant’s present age, her lack of ability to derive an income now from working and anticipated extra expenses to maintain the defendant’s health in the later years of their life. Those matters still feed into what may be proper in terms of assessing the testator’s moral duty to ensure his spouse continues to have access to secure accommodation and an ability to live after he dies. But where a spouse subsequently re-partners, that informs the overall assessment of the extent of that moral duty.
A further consideration is that the evidence before the court established that the family home is of considerable size and value. There was some evidence before the court of appropriate alternative accommodation for the defendant, were the house to be sold. In assessing accommodation needs, (including in this case where the competing claim involves accommodation in the form of a life interest) it is important to be mindful of the distinction between what a person desires and what a person needs (see, for example, Smith v Johnson [2015] NSWCA 297 at [85]). The defendant did not assert that she needed such a large asset. The desire to remain in the home was more because of the defendant’s age and emotional attachment to the family home, which I accept may make the vacation of the property more difficult for the defendant. However, in the event that the defendant loses the life interest, she would of course have the proceeds of sale of her own interest in the asset. It must be remembered that such interest was itself a gift of considerable value, which the testator gave to her while he was alive as expressly part of his overall scheme of provision for her.
The court is also bound to take account of the discretionary trust that has been created as the means by which the testator fulfilled his duty to make provision for the plaintiff, consistent with the principle that, in considering what provision ought to be made for the proper maintenance and advancement in life of the plaintiff, the legal edifice cannot be ignored: Mayfield v Lloyd-Williams [2004] NSWSC 419 at [69] per White J as his honour then was, citing 45 Flers Avenue Pty Limited v Morgan (1987) 5 ACLC 222 at 225. However, as cases such as those discussed in Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915 (Hedman) at [180]-[192] make clear, while discretionary trusts are a financial resource, they are viewed as a contingent benefit which a party may reasonably expect would be available to supply a financial need or deficiency. In Hedman at [184], Hallen J referred to Taylor v Farrugia [2009] NSWSC 801 whereBrereton J stated at [62]:
Provision for eligible persons may be inadequate or improper in form as well as, or as distinct from, in quantum. Thus, provision which is dependent upon the exercise of a discretion by the trustee of a discretionary trust will often, though not invariably, be inadequate or improper [Re WTN (NSWSC, Unreported, 3/7/59, McLelland CJ in Eq; referred to in [1959] 33 ALJ 240; Gregory v Hudson (No 2) (New South Wales Supreme Court, Young J, 18 September 1997, unreported.
The authorities I have drawn upon are largely taken from New South Wales but the legislation and principles insofar as they operate on the facts of this case are materially indistinguishable from the principles applying in this jurisdiction.
The testamentary scheme devised by the testator here does not actually meet that description, of a resource that may reasonably be expected to be available to the plaintiff, not only because of the discretionary nature of the trust, but because of the life interest provision to which any testamentary trust is subject. The defendant is currently 73 and in relatively good health. If that continues for many years to come, then the testator’s three daughters may not be able to access any of the benefit intended for them for years, possibly for decades. Although in his dying days, the testator told two of his daughters that the money for them was in trusts and they could access it anytime they liked, their interests are currently subject largely to the choices of the defendant as to how long she wishes to remain in the property.
Further, the execution of the binding death benefit nomination in favour of the defendant may have been viewed as prudent from a tax perspective and as providing an income for the defendant in circumstances where her ability to earn was greatly reduced do to her age. However, the scheme that was devised, including carving the superannuation out of the estate, deprived the daughters of access to any sum of money in the reasonably foreseeable future, and the defendant’s circumstances have changed somewhat since the death of the testator.
Taking into account all the above considerations, although the testator’s testamentary scheme is plainly understandable from a tax perspective and to be accorded due respect, the practical effect of it amounts to provision for the testator’s daughters that was not proper in terms of its form. The consequence is a finding that adequate provision for the proper maintenance, education or advancement of the plaintiff is not available under the terms of the 2018 Will.
Issue 8: What provision ought to be made?
The plaintiff sought an advance on her ultimate inheritance of $200,000. Recalling that the court’s intervention is limited to the extent to which a testator is viewed to have failed in his moral duty, an adjustment of that quantum is not warranted having regard to the plaintiff’s circumstances as disclosed in the evidence. The appropriate adjustment is to require a lump sum of $50,000 to be paid to the plaintiff, with such sum to be accounted for as an interest accruing advance on any distribution of the proceeds of sale of the family home. That sum is what I consider to be the minimum extent necessary to fulfil the objects of the FP Act (namely “adequate provision”) – an amount sufficient to advance the plaintiff generally, either if she undergoes the surgery contemplated or otherwise to assist the plaintiff with her costs of living (maintenance), and/or to reimburse her for the cost she incurred in the continuance of her education.
By way of explanation for applying interest, in making an order for provision, the court shall specify the amount and nature of the provision, and may specify such conditions, restrictions and limitations subject to which the provision is to be made that the Supreme Court thinks fit to impose: s 11 of the FP Act. A requirement for interest to be deducted as well as the advance of $50,000 is to take account of the fact that the plaintiff is receiving part of her inheritance in a different form and earlier than her siblings. The result will be that when the distribution is made, the testator’s other two children will each receive a little more than the plaintiff. I am mindful that it is not the court’s role to endeavour to create a fair disposition of the deceased’s estate, but where the testator’s testamentary scheme includes a fair distribution between his daughters, in my view, the court should endeavour to broadly maintain that scheme when making provision.
Thus, when the house is sold, the amount to be deducted from the plaintiff’s share of the proceeds will be $50,000 plus a sum of interest. The interest rate will be the post-judgment rate under the Court Procedures Rules 2006 (ACT).
Orders
I will defer making final orders. For the adjustment to the terms of the 2018 Will to be made to give effect to a lump sum of $50,000 by way of provision for the plaintiff, this may mean that the family home must be sold. Given what has been disclosed by the parties in terms of the disproportionate costs that have been incurred, that consequence may have been inevitable.
However, the defendant as executor may decide to fund the provision in a different way in order to continuing living in the home or even to buy out the residual interest. The parties requested an opportunity to reflect upon the orders to be made to give effect to the reasons and dispose of the proceedings and I will accede to that course. The question of costs will also be addressed when making final orders. To give the parties the opportunity to reflect on the reasons, to take advice and then communicate their positions to each other, I will allow a number of weeks before the making of final orders.
For the above reasons, the following orders are made:
(1)On or before 28 February 2025, the parties are directed to bring in agreed or competing short minutes of order to give effect to the reasons, and to file any further evidence on the question of costs.
(2)The matter is listed on 7 March at 9.45am for any further hearing and the making of final orders.
| I certify that the preceding one hundred and fifty-nine [159] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam Associate: Date: |
26
4