Dennerly v Craig

[2021] NZHC 2605

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-601317

[2021] NZHC 2605

IN THE MATTER OF

the estate of Jeffrey Ronald Clay

BETWEEN

ALISON VALERIE DENNERLY

Applicant

AND

ANDREA FIONA CRAIG, KATHERINE LOUISE HART and VANESSA JANE FREYA LE PROU

Caveators

Hearing:	10 May 2021
Counsel:	K G Davenport QC and A E Isaacs for applicant P J Radich and S A Wadworth for caveators
Judgment:	30 September 2021

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 30 September 2021 at 3.30pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:

Davenports Law, Auckland for applicant Radich Law, Blenheim for caveators

DENNERLY v CRAIG [2021] NZHC 2605 [30 September 2021]

Introduction – direction to show cause under s 61, Administration Act 1969  [1] The question for determination  [6]

No dispute about the material facts  [9]

Preliminary issue – has the caveat lapsed?  [13]

Background  [24]

Property acquisitions  [26]

The 2006 wills – 28 March 2006  [30]

Jeff ’s and Fiona’s ill-health  [34]

Fiona’s 2016 will – 12 May 2016  [36]

Fiona’s death – 26 February 2018  [40]

Jeff ’s second will – 1 May 2018  [43]

Sale of Matarangi property and distribution of proceeds  [45]

Jeff ’s purchase of the Aria Bay apartment  [46]

G’s explanations for the Matarangi sale and distribution  [49]

The legal issues that arise in the proceeding  [54]

Principles governing the challenge based on lack of testamentary capacity  [64]

Principles governing the challenge based on undue influence  [69]

The evidence  [71]
Jeff’s capacity – the dementia issue  [76]

The evidence on behalf of the caveators  [77]

The evidence supporting the conclusion that Jeff had testamentary capacity in May 2018        [83]

The evidence of Jeff ’s legal advisers, G and M  [89]

G’s wife, L  [99]

Medical evidence  [107]

Discussion on capacity  [117]

The allegation of undue influence  [123]

Decision  [127]

Order  [129]

Costs  [130]

Introduction – direction to show cause under s 61, Administration Act 1969

[1]        Jeffrey Robert Clay (Jeff) died at Auckland on 26 December 2019 aged 80. His wife Fiona had died in February 2018.

[2]        Jeff and Fiona had executed mirror wills in 2006 (the 2006 wills) in which Jeff’s daughters and Fiona’s three adult nieces Andrea, Katherine and Vanessa (Fiona’s nieces or the caveators) were the residuary beneficiaries of the estates under the wills.

[3]        Jeff’s last will, dated 1 May 2018 (Jeff’s second will), is uncomplicated. He appointed his solicitor, G,1 as his sole executor and, after two specific bequests and the payment of debts, left the rest of his approximately $1.1 million estate to be divided

1      I have found it necessary in this judgment to criticise the quality of the solicitor’s work in some respects, and to be critical of the conduct of his wife (who worked in the solicitor’s practice at material times) in other respects. Because they have had no opportunity to respond to such criticisms and their identity is immaterial to the outcome of the judgment, I have chosen not to identify them and to anonymise their names and that of the practice.

equally among his three adult daughters, Dianne, Alison and Jennifer. Jeff’s second will, however, made no testamentary provision for Fiona’s nieces.

[4]An application for probate was made by G on 29 January 2020.

[5]        On 3 February 2020, a caveat under s 60 of the Administration Act 1969 (the Act) was lodged on behalf of Fiona’s nieces who are the daughters of her twin sister, Felicity Roberts. An order nisi for the grant of administration to G under s 61 of the Act was made on 23 December 2020, directing the caveators to “show cause” why the order nisi should not be made absolute.

The question for determination

[6]        On its face, Jeff’s second will complies with the requirements for a valid will specified in s 11 of the Wills Act 2007. Fiona’s nieces oppose the making of the order nisi absolute. They wish to argue that the second will is invalid on the grounds that, at the time he executed the will on 1 May 2018:

(a)Jeff was suffering from dementia and lacked testamentary capacity; and

(b)Jeff’s daughter Alison exercised undue influence over him.

[7]        I am required to decide only whether the caveators have shown there is sufficient cause for declining to make the order nisi absolute. They seek an order under s 61(d)(ii) of the Act that the application for administration be made in solemn form so that the Court would undertake a full inquiry into the circumstances of the preparation and execution of Jeff’s second will. If that order is made, the Court would hear evidence and determine whether Jeff’s second will is valid.

[8]          I accept that the threshold for a caveator to show cause under s 61 is low and that the Court will not usually resolve genuinely disputed questions of fact at this stage.2 In this case, the caveators have produced a substantial body of affidavit and documentary evidence, to which the applicant has responded in kind. On a superficial

2      Van der Kaap v Wilson CA97/04, 14 June 2005 at [34], citing Re Nissenbaum [1939] NZLR 94 and Re Payne (1989) 2 PRNZ 432.

view, it would be enough to say that, having regard to the evidence in its present state, there is a dispute about Jeff’s testamentary capacity and arguable undue influence by Alison. But while the inferences to be drawn from the evidence and, in particular, the conclusions about the primary questions of Jeff’s testamentary capacity and undue influence are disputed, the factual underpinning for those conclusions is not much in contest.

No dispute about the material facts

[9]        After a careful analysis of what has been said on both sides, both in evidence and the submissions of counsel, I am satisfied that there is no genuine dispute about the material facts. On the crucial question of Jeff’s testamentary capacity, the Court is unlikely to receive materially different evidence from that which has been filed. Much of the evidence, both on behalf of the caveators and the applicant, is evidence of the witnesses’ experiences in Jeff’s company and their impressions, and in some cases conclusions, about his conduct and his state of mind. Such evidence is necessarily coloured by perspective. What a loving daughter might see in the failing health and mental faculties of a loved father reflects a different point of view from that of a more distant relative having less frequent contact and not being engaged as intimately with the subject’s life. I do not suggest that any of the witnesses have been less than truthful in their recollection but, on both sides, it is to be expected that in giving evidence of their impressions the witnesses might tend to underplay or overplay the significance of events, incidents and conversations, depending on their perspective.

[10]      There appears to have been full disclosure of all material documents without the need for formal discovery, so the fuller processes of an ordinary proceeding are unlikely to uncover anything that will add to the relevant evidential pool. Significantly, the objective evidence of medical practitioners and lawyers contained in medical notes, reports, correspondence and affidavits is not likely to alter materially at a full hearing under cross-examination. It is true that the caveators might be able to produce evidence from an expert witness based upon what he or she has read in the medical notes and other evidence. But inevitably the views of such an expert are likely to carry less weight than those contemporary expressions of opinion by medical and

legal practitioners who knew Jeff and who formed contemporary views and made contemporary decisions at relevant times.

[11]      Given the volume of helpful material now before the Court, I consider that I am as well placed as I would be following a full hearing to determine whether Jeff lacked testamentary capacity on 1 May 2018. Moreover, in regard to undue influence, the caveators have done no more than point to Alison’s relationship with Jeff; her attendance with her elderly father at material times when he was giving instructions to and receiving advice from his lawyer and the fact that she stands to benefit from Jeff’s decision not to include Fiona’s nieces among his residuary beneficiaries. There is nothing in the affidavit evidence of the lawyers who attended on Jeff to take material instructions about property transactions and his will that assists the caveators and, with full disclosure of their files having been made, nothing to indicate that other evidence is available.

[12]      For the reasons discussed more fully below, I have concluded that the low threshold for requiring probate to proceed in solemn form or to prevent the order nisi being made absolute has not been reached by the caveators.

Preliminary issue – has the caveat lapsed?

[13]      A preliminary question was raised at the hearing about whether the caveat lodged in February 2020 had lapsed on 4 February 2021, meaning that Fiona’s nieces lacked standing and there was no impediment to making the order nisi absolute.

[14]      The legislative framework for objections to the granting of administration of a will is contained in ss 60 and 61 of the Administration Act 1969. So far as is relevant, they read as follows:

60Caveat may be lodged

(1)Any person may lodge with the Registrar a caveat against any application for administration at any time previous to the granting of administration...

(2)Every such caveat shall, unless application for administration is sooner made, lapse upon the expiration of 1 year from the date of the lodging of the caveat.

(3)       ...

(4) Nothing in this  section shall prevent any person who has lodged a  caveat from lodging a subsequent caveat, whether or not any caveat previously lodged has lapsed or been withdrawn.

61Where a caveat lodged, court may grant order nisi

In every case where a caveat has been lodged and has neither lapsed nor been withdrawn, the following provisions shall apply:

(a)The Court may, upon application on behalf of the person applying for administration, supported by affidavits upon which, if there had been no caveat, administration would have been granted, may make one or other of the following orders:

(i)In any case where the Court is satisfied that the caveat has been or may have been lodged vexatiously or frivolously, an order for the discharge of the caveat or for security for costs; or

(ii)In any other case, an order nisi for the grant of administration to the person applying, which order nisi shall name a time and place for showing cause against the same, and the Court may enlarge any such order from time to time:

…

(d)… if on the day named in the order nisi or on the day to which the order is enlarged, … the caveator appears, the hearing shall be conducted in the same manner as nearly as may be as in an ordinary action, and the Court may order—

(i)that the order nisi be made absolute or discharged; or

(ii)that the application for administration be made in solemn form,—

and any order made under subparagraph (i) or subparagraph

(ii) may be with or without costs, as may be just, and, if the Court so directs, those costs may be paid out of the estate:

(e)At any hearing under paragraph (d), the parties may, subject to the rules, verify their cases in whole or in part by affidavit, but so that the deponent in every such affidavit shall, on the application of the opposite party, be subject to be cross- examined by or on behalf of the opposite party orally in open court, and after cross-examination may be re-examined orally in open court by or on behalf of the party by whom the affidavit was filed….

[15]      In this proceeding, the application by G for probate that had been filed on    29 January 2020 could not be pursued following the registration of a caveat on behalf

of Fiona’s nieces on 3 February 2020. On 23 December 2020, Alison obtained an order nisi under s 61(a)(ii) of the Act and Fiona’s nieces were directed to show cause, by 25 March 2021, why the order should not be made absolute. That date was enlarged to 10 May 2021.

[16]      Relying on what she says is the significant difference between an order nisi and the making of a final order or order absolute under s 61(d), Ms Davenport QC argues that Alison’s application for an order nisi under s 61 was not an application for administration.  Counsel submitted  that, as  a  consequence,  the  caveat  lodged  on 3 February 2020 had expired on 4 February 2021 by operation of s 60(2). Counsel submitted that the application for administration was not made prior to that date but had been made after it, on 5 May 2021, when Alison applied for letters of administration with will annexed, following the renunciation by G as executor of Jeff’s will of his right and title to probate and execution.

[17]I do not accept that argument.

[18]Section 5(1) provides that the High Court has:

… jurisdiction and authority in relation to the granting and revoking of probate of wills and letters of administration with or without a will annexed of the estates of deceased persons, and in regard to the hearing and determining of proceedings relating to testamentary matters and matters relating to the estates of deceased persons.

[19]      That provision incorporates the various types of application for administration of a deceased estate that might be made, reflecting the broad definition of “administration” in s 2(1) of the Act:

Administration means probate of the will of a deceased person, and includes letters of administration of the estate of a deceased person, granted with or without a will annexed, for general, special, or limited purposes, and in the case of a trustee corporation includes an order to administer and an election to administer.

[20]      A caveat against any application for administration may be made at any time before the granting of administration.3 It follows that a caveat may be lodged either

3      Administration Act 1969, s 60(1).

before any application for administration or after the making of an application but before the making of an order.

[21]      The evident purpose of s 60(2) providing for the lapse of a caveat is to ensure that a caveat does not stand in the way of appropriate orders for the administration of a deceased estate if the caveator’s claims are not pursued with reasonable diligence. The reference in s 60(2) to “application for administration” indicates that the application may take any one of the forms contemplated by the Act.

[22]      In the present case, Alison’s application for administration by obtaining a grant of letters of administration with will annexed was filed on 14 December 2020, within a year from the date of the lodging of the caveat on 3 February 2020. In any event, out of abundant caution, a further caveat was lodged by Fiona’s nieces during the hearing on 10 May 2021. As I have explained, I do not consider that was necessary in order to preserve their rights as caveators to oppose the making of an order absolute. The lapsing provision in s 60(2) did not take effect.

[23]I now describe the background facts.

Background

[24]      Jeff Clay had a varied working life that included a period as a taxi driver. Latterly he had been a mechanical engineer heading the lighthouse maintenance division of the Ministry of Transport. After the closing of that division, Jeff started a company which contracted his services back to the Ministry. He was the designer, patent-holder and manufacturer of polyurethane buoys used in marine industries. Jeff is described as having been a very intelligent, qualified mechanic and self-taught marine engineer. By the descriptions of the members of his family, I have an impression of him as a colourful, outgoing character who enjoyed socialising with his family and friends. He had a forceful personality – Fiona’s twin Felicity describes it as “domineering” – and was the driving force in his marriage with Fiona.

[25]      Notwithstanding his marriage to Valerie, the mother of his daughters, Jeff began a long-term relationship in the early to mid-1970s with Fiona, the woman who became his second wife. Fiona’s first marriage ended in 1974; she had no children.

Property acquisitions

[26]      In November 1979, Fiona purchased a two-bedroomed unit at Camrose Place, Glenfield, a property that was registered in her name. It appears that, although Fiona assumed responsibility for payment of a loan or loans in respect of that property, at least initially, Jeff made a contribution to the deposit.

[27]      Jeff and Valerie separated in 1982. Jeff boarded with friends for a while and later moved to live with Fiona in Camrose Place. In December 1985, Jeff bought a property at 17 Capricorn Place, Browns Bay with the proceeds of the sale of his former matrimonial home. Fiona and Jeff were married there on 17 October 1987. Notwithstanding that Fiona remained the owner of her property in Camrose Place, the couple appear to have treated the Capricorn Place property as their principal home for the duration of their marriage.

[28]      In February 1995, Jeff and Fiona bought a property at 108 Goldfields Drive, Matarangi (the Matarangi property) in partnership with Fiona’s brother Jock and his wife Usha. After Jeff and Fiona bought out Jock and Usha in September 1996, they lived between the Matarangi property and Capricorn Place for some years. Towards the end of Fiona’s life, they spent more time living in the Capricorn Place property. Jeff and Fiona held the title to the Matarangi property as joint tenants, meaning that sole ownership would automatically pass to the survivor if it was owned by them at the time the first of them died.

[29]      The evidence describing the relationship between Fiona and Jeff at that time and subsequently persuades me that their assets, like their lives, were fully merged by the time they purchased the Matarangi property, if not earlier.

The 2006 wills – 28 March 2006

[30]      On 28 March 2006, Fiona and Jeff executed the 2006 wills. They had been prepared by their solicitor, G, for whom Fiona worked at material times as a legal executive. The wills were poorly drafted. They provided principally that the survivor of the couple would be appointed sole executor and receive the entire estate of the

deceased spouse. The wills also directed that, if the will-maker was predeceased by their spouse, there would be specific legacies and that:

(a)until the death of the survivor or the earlier sale of the Matarangi property (described as the Termination Date), the survivor would have the use, occupation, income and benefit of the will-maker’s share of the Matarangi property; and

(b)the will-maker’s share of the Matarangi property would, on the Termination Date, form part of the will-maker’s residuary estate which would be divided into six equal parts and distributed to Jeff’s three daughters and Fiona’s nieces.

[31]      I return to the terms of the 2006 wills below, but it seems to be clear that, if either of the wills had become operative, the life interest provisions relating to the Matarangi property would have failed because:

(a)if the will-maker was the first to die, the property would be excluded from the deceased’s estate because it would pass to the survivor automatically; and

(b)if the will-maker was the surviving spouse, the purported gift to the other of a life interest in the property would be irrelevant.

[32]      I infer, however, that when the 2006 wills were executed Jeff and Fiona shared a common intention that the residuary estate of the survivor of them, however comprised, would be divided equally between Jeff’s three daughters and Fiona’s nieces.

[33]In March 2006, Jeff’s and Fiona’s assets included:

(a)the Camrose Place property, held in Fiona’s name;

(b)the Capricorn Place property, held in Jeff’s name; and

(c)the Matarangi property, held in their joint names.

Jeff ’s and Fiona’s ill-health

[34]      From the mid to late-2000s, Fiona was unwell. In 2006, she had a femoral artery bypass in her right leg. In 2014, while undergoing preparation for a femoral artery bypass in her left leg, Fiona was diagnosed with throat cancer. Despite surgery, the disease was subsequently declared to be incurable. She endured a great deal of pain and discomfort over the four years until she succumbed to the disease. Jeff was a loving companion who was distressed by her condition, particularly during the last few months of Fiona’s life.

[35]      In July 2015, Jeff was diagnosed as having dementia that was later attributed to Alzheimer’s disease. He had a CT scan in September 2015 which revealed generalised cerebral atrophy and cerebella degeneration causing forgetfulness and some cognitive impairment. He was prescribed Donepezil, a standard medication for improving mental function. Fiona was caring and supportive of Jeff; she attended to the payment of bills and undertook most of the day-to-day housekeeping and cooking responsibilities while she was well enough to do so. Jeff’s condition, however, did not inhibit him from enjoying the company of his friends on fishing trips and other social occasions and from participating fully in family activities with Fiona, his daughters and their families.

Fiona’s 2016 will – 12 May 2016

[36]      In early 2016, Jeff and Fiona arranged to travel to Honolulu for a holiday with Felicity and her husband Martin. On 9 May 2016, Fiona sent an email to an employee of G’s practice with whom she had worked informing her that she wished to change her will. She said she did not think that Jeff could handle the undertakings of an executor. Fiona said she wanted to include legacies of:

(a)her gold sovereign and two sapphire and diamond rings to her stepdaughter, Jennifer;

(b)her car to Jennifer’s daughter Jessica;

(c)$10,000 each to Jessica and Jennifer’s son Callum; and

(d)other personal belongings to her twin, Felicity.

[37]She said:

The rest of the will as is. Just send me an email saying it is ready and I’ll call in and sign it before we go [to Honolulu]. I don’t want Jeff to know that I have changed it.

[38]      Fiona executed the new will on 12 May 2016 (Fiona’s 2016 will), without Jeff’s knowledge. G was appointed sole executor and the legacies Fiona had specified were included. By this time, the Camrose Place property had been sold.4 It appears that the net proceeds of sale became a general fund that Jeff and Fiona used for day-to-day living expenses and to meet the costs of Fiona’s cancer treatment.

[39]      Unlike Fiona’s 2006 will, her 2016 will made no provision for Jeff other than purporting to gift to him a life interest in Fiona’s share of the Matarangi property, in terms similar but not identical to those in Fiona’s 2006 will. The residue of the estate was to be distributed to Jeff’s daughters and Fiona’s nieces in equal shares, as her 2006 will provided. Although the couple’s other major asset, the Capricorn Place property, remained in Jeff’s sole name, Fiona would almost certainly have had a right to a half share in it as matrimonial property.5 Her share, however, never crystallised.

Fiona’s death – 26 February 2018

[40]      Fiona died on 26 February 2018. G deposes that the value of Fiona’s estate at the time of her death was less than $15,000; no application for probate of her will was made. That is not surprising. When she died, Fiona had little or no property other than personal effects and property that she owned jointly with Jeff; namely, their savings or cash; family chattels and the Capricorn Place and Matarangi properties which the couple still owned. There is no evidence that, at least during the latter half

4      The title to the property shows that the transfer to the purchasers was registered on 20 February 2015.

5      Property (Relationships) Act 1976, s 11.

of their marriage, either Fiona or Jeff owned any assets that would have been regarded as separate property under the Property (Relationships) Act 1976.

[41]      It seems Fiona eventually recognised that, as Jeff would be likely to survive her, there would be no estate assets from which her monetary bequests could be made without Jeff’s agreement; all of the assets – including money in bank accounts or placed on deposit – would belong to him as the surviving joint owner. On 13 February 2018, just over two weeks before she died, Fiona prepared this note:

I, Fiona Clay, have paid Twenty thousand dollars ($20,000.00) to the [redacted] Trust account.

I authorise and irrevocably instruct [redacted] to pay these funds in equal amounts to Callum Daly and Jessica Daly.

[42]      The note is signed by Fiona and, as a witness, by G’s wife who was employed in the practice as a legal secretary. The money was paid as directed, those gifts reflecting the legacies to Jessica and Callum in Fiona’s 2016 will. I infer, therefore, that the $10,000 was paid to each of Jessica and Callum pre-emptively, just prior to Fiona’s death, because Fiona had access to funds she owned jointly with Jeff and over which she had sufficient authority and control to make the payments.

Jeff ’s second will – 1 May 2018

[43]      According to Jeff’s daughters, Jeff was upset to learn after Fiona’s death that she had changed her will arrangements by making no provision for him in her 2016 will other than the purported gift of a life interest in her half-share of the Matarangi property. His concern may have been misplaced because, as I have found, all of Fiona’s property was jointly owned with Jeff by 2016 and he would inherit her interest in it by survivorship.

[44]      On 1 May 2018, Jeff executed his second will. He was the sole owner of the Matarangi and Capricorn Place properties at that time. Jeff made a bequest of particular personal property to his daughters and granted the legacy of $15,000 to his granddaughter, Jessica, in lieu of her forgoing her right to Fiona’s Suzuki Swift; it had been left to Jessica in Fiona’s 2016 will but never given to her. Jeff divided the balance

of his estate into three equal parts to be distributed to his three daughters or their survivors.

Sale of Matarangi property and distribution of proceeds

[45]      Fiona’s interest in the Matarangi property passed to Jeff by survivorship when she died in 2018 so that it never formed part of her estate. Nevertheless, when the Matarangi property was sold in December 2018, G allocated half of the $502,913.88 net proceeds of sale to Jeff and half to “Estate F Clay”. The half share of $251,456.94 was then disbursed by six payments of $41,909.48 to each of Jeff’s daughters and Fiona’s nieces out of the account in the name of Fiona’s estate. It is not obvious on the face of the transactions why G made the distribution instead of simply accounting to Jeff for the whole of the sale proceeds.

Jeff ’s purchase of the Aria Bay apartment

[46]      After Jeff received the half share of the sale proceeds from the Matarangi property, he continued to live independently in his home in Capricorn Place but, according to his daughters, he was lonely and began to find independent living difficult. In early May 2019, Jeff was approved by the proprietors of the Aria Bay Retirement Village as being a suitable candidate for independent living within the complex. In July 2019 he sold the Capricorn Place property and moved to an apartment in the Aria Bay village once the sale was settled the following month. The proceeds of the sale and what was left of the funds Jeff had received from the sale of the Matarangi property were insufficient to meet the cost of purchasing the Aria Bay apartment and two of Jeff’s daughters lent him a total of $112,000 to complete the purchase.  Jeff  continued  to  live  in  the  retirement  village  until  his  death  on   26 December 2020.

[47]      After Fiona’s death, Fiona’s sister Felicity had written to G, on about 4 or     5 May 2018, “with a sense of uneasiness for Fiona’s Will and her wishes”. She said in her letter that Fiona had told her that Jeff’s daughters and Felicity’s three daughters were beneficiaries of “Fiona’s & Jeff’s Wills jointly”. She said that Jeff was in a very vulnerable situation with his health (particularly his Alzheimer’s) “to be taken advantage of financially or being influenced into altering their [sic] joint Will or not

honouring Fiona’s wishes”. Felicity said that she was concerned for Jeff’s daughters and her daughters and felt a bit uneasy that her daughters could be disadvantaged as beneficiaries going forward from Fiona’s passing away. There is no evidence that Felicity spoke to Jeff about the matter; she says she did not know, until after she sent her letter to G, that Jeff had executed a new will only days earlier.

[48]G did not reply to the letter, although it seems he showed it to his wife, L.

G’s explanations for the Matarangi sale and distribution

[49]      After the caveat under s 60(1) of the Act was lodged on behalf of Fiona’s nieces, the lawyers for the parties exchanged views about the issues over Jeff’s will. G was asked by Jeff’s lawyers:

(a)why, since Fiona’s share of the Matarangi property passed to Jeff by survivorship on her death, a half share of the proceeds from the sale of the property was nonetheless distributed equally amongst Fiona’s six stepdaughters and nieces;

(b)why the agreement for sale and purchase and the agency agreement for the sale of the Matarangi property had been signed by G as executor for Fiona’s estate;

(c)what advice G had given Jeff regarding “Fiona’s imperfect gift of a life interest in the property which they owned as tenants in common [sic]”; and

(d)whether someone else acted for Jeff in the conveyancing to avoid a conflict of interest and whether Jeff received any independent legal advice?

[50]      Although there is no copy of the Matarangi sale and purchase agreement before the Court that bears Jeff’s signature,6 he signed a client authority and instruction form authorising G to complete the transaction, made a statutory declaration for the transmission of the property by survivorship and completed a Land Transfer Tax Statement under ss 78 and 79 of the Land Transfer Act 2017. The title to the property records that the transmission to Jeff as survivor was registered immediately before the discharge of the mortgage and the transfer of the property to the purchasers.

[51]In answer to the questions raised, G said:

(a)Neither he nor his firm were involved in the purchase of the Matarangi property and he had no idea what Jeff’s and Fiona’s strategy or intentions were at the time of that purchase.

(b)When Fiona died, he explained to Jeff that the procedure was that the title had to be updated by the registration of a survivorship transmission and that he would be the sole registered proprietor or owner.

(c)He advised Jeff on “the technical position” regarding the difference between joint tenancy and tenancy in common and the implications of each option.

(d)Jeff confirmed to him that, notwithstanding “the technical position” regarding the title, he and Fiona had always intended that 50 per cent of the net sale proceeds from the Matarangi property would be distributed to “Fiona’s six stepdaughters and nieces”. G said that was what happened.

(e)He signed the agreement for sale and purchase of the Matarangi property as executor of Fiona’s estate because, at the time the sale agreement was presented, the title was still in the names of both Jeff and Fiona.

6      The copy of the sale and purchase agreement before the Court contains G’s signature as sole executor of Fiona’s estate; as Fiona was a joint owner with Jeff, G would have had authority to sign the agreement on behalf of both owners.

(f)No one else acted for Jeff and he was not aware that Jeff had obtained any independent legal advice.

(g)There was no “conflict of interest and nothing contentious or untoward at the time”.

[52]      No further evidence could be available at a full hearing to confirm that Jeff understood what G describes as “the technical position” and that he directed or approved of the disposition of a half-share of the sale proceeds from the Matarangi property in the way in which it was carried out by G.7 It is fair to say, however, that G’s account of his advice and instructions appears to be at odds with the reaction of Jeff to the disposition as described by his daughters, including those of Dianne and Alison who attended meetings with Jeff at the time he gave instructions to his lawyers for an enduring power of attorney and a new will in 2018. And it is not easy to reconcile Jeff’s approval of the disposition of the Matarangi proceeds with the difficulty Jeff had in completing the purchase of his apartment in the Aria Bay retirement village around six months later without having to borrow substantial sums from two of his daughters.

[53]      I do not consider, however, that it is necessary to resolve that issue in this proceeding. If G’s account of his instructions from Jeff is accurate, it demonstrates Jeff’s intention to make at least some provision for Fiona’s nieces at the end of 2018. But, in any event, Fiona’s nieces received some recognition from the disposition of an asset part-owned by Fiona at the time of her death.

The legal issues that arise in the proceeding

[54]Challenges to the provisions of wills generally fall into one of two categories:

(a)a challenge to the validity of the will founded upon the circumstances in which the testamentary document was created; and

7      Apparently, G made no file note about having given such advice.

(b)challenges founded on the nature of the provisions in a valid will which may be said to amount to a breach of duty.

[55]       Often, a proceeding will involve challenges in both categories.8 In this proceeding, Fiona’s nieces wish to challenge the validity of Jeff’s second will on the grounds that, at the time he executed it, he lacked testamentary capacity due to his dementia and was under Alison’s undue influence. Any challenge based on an alleged failure by Jeff to fulfil an obligation to make proper provision for Fiona’s nieces in his second will would be made only if the will is held to be valid.

[56]      Fiona’s nieces have no standing to make claims against Jeff’s estate under the Family Protection Act 1955,9 and they do not suggest there is any basis for a claim under the Law Reform (Testamentary Promises) Act 1949.10 It has not been necessary for Fiona’s nieces to articulate grounds for a claim or claims against the estate if the will is held to be valid. The only discernible basis for arguing that provision for the nieces should have been made by Jeff in his second will is that Jeff was obliged, as the surviving spouse of his marriage to Fiona, to leave his residuary estate equally to his daughters and Fiona’s nieces.

[57]      In the correspondence between the parties’ lawyers following the lodging of the caveat, the solicitors for Fiona’s nieces maintained that Fiona and Jeff had signed “mutual wills” in 2006 making provision to that effect. It is said that Jeff was obliged not to alter an agreement between Fiona and him that, once they were both dead, what was left of their combined assets would be distributed equally between Jeff’s daughters and Fiona’s nieces. The argument would be, I assume, that the irrevocably binding agreement would mean that half of Jeff’s residuary estate would be subject to a constructive trust in favour Fiona’s nieces.11 Reaching a concluded view about that claim would be necessary if Jeff’s will is declared to be valid and probate is granted.

8      See, for example, Rule v Rule [2016] NZHC 3160 in which a will was challenged on the grounds of lack of testamentary capacity and undue influence in the making of the will, and (under the Family Protection Act 1955) a breach of the moral duty to make provision for the proper maintenance and support of children.

9      Family Protection Act 1955, s 3(1).

10 Law Reform (Testamentary Promises) Act 1949, s 3(1).

11 See, generally, Lindsay Breach Nevill’s Law of Trusts, Wills and Administration (13th ed, LexisNexis, Wellington, 2018) at [4.4].

[58]       If provisions in a will, or departures from provisions in a former will, can be shown to be unfair or unreasonable or contrary to an obvious duty, those qualities may indicate a lack of testamentary capacity or an overbearing and inappropriate influence on the will-maker. It follows that evidence about:

(a)Fiona’s and Jeff’s intentions in making their 2006 wills;

(b)whether there is an arguable case that they entered a binding agreement that the survivor of them would leave their residuary estate to Jeff’s daughters and Fiona’s nieces; and

(c)the nature of the relationships between Jeff and Fiona’s nieces,

may be relevant to deciding whether the Court should undertake a full inquiry into the validity of Jeff’s second will.

[59]      I am satisfied, however, that there is no basis on the evidence for claiming that Jeff and Fiona’s 2006 wills were binding mutual wills such as might have been recognised in s 30 of the Wills Act 2007, had that Act applied. The defining characteristic of mutual wills properly so called is a promise, intended by the parties to be binding, not to revoke the will at any time during the other’s lifetime or not to revoke after the other’s death. The obligation is sometimes qualified by a condition that the revocation may not occur secretly.12 The promise not to revoke (or not to deal with property in an inconsistent manner) may be express or may be implied from what the parties have said and done, including of the terms of the two wills. There must be more than mere consultation and coordination between the will-makers and more than a mere agreement or arrangement between them that they will proceed to make their respective wills in a particular way.13

[60]      Although there is evidence that Fiona told Felicity and G’s wife L that Jeff and she had agreed that the survivor of them would leave their estate to Jeff’s daughters

12     Lewis v Cotton [2001] 2 NZLR 21 (CA) at [43].

13     At [46]

and Fiona’s nieces, as they did in 2006, that is not sufficient to establish a binding agreement that the survivor would not depart from that arrangement.

[61]      Nothing in the 2006 wills themselves gives rise to any inference that Fiona and Jeff believed they were entering into binding obligations. Moreover, it is clear from the fact that Fiona executed her 2016 will, without Jeff’s knowledge, that she did not consider herself to be bound in that way, even though the provision for the residuary beneficiaries was similar to that in her 2006 will.

[62]      There is no evidence that, however Fiona and Jeff may have seen the position in 2006 when they owned three reasonably valuable residential properties, the survivor of them would be bound to implement the agreement to divide the residuary estate equally, irrespective of the circumstances in the future.

[63]      Taking the caveators’ case at its highest, the most that can be said is that there is a clearly arguable case that Fiona and Jeff agreed that their circumstances in 2006 justified the equal division of the survivor’s estate between Jeff’s daughters and Fiona’s nieces.

Principles governing the challenge based on lack of testamentary capacity

[64]      Put simply, the case for the caveators is focused on Jeff’s decision in May 2018 to depart from the testamentary disposition he made in 2006 and make no provision in his second will for Fiona’s nieces to share in his residuary estate. I turn first to identify the principles to be applied to determining whether there is a sufficient basis for an inquiry about Jeff’s capacity to make a will that reflected that decision.

[65]I have relied on these principles:14

(a)If there is evidence that raises Jeff’s lack of capacity as a tenable issue, the onus of satisfying the Court that Jeff did have testamentary capacity rests on those who seek probate of the will.

14 Relying on the summary of Tipping J delivering the judgment of the Court of Appeal in Bishop v O’Dea (1999) 18 FRNZ 492 at [3]-[6] and the summaries of Winkelmann J in Green v Green [2015] NZHC 1218 at [89]-[91] and [98]-[99].

(b)That onus must be discharged on the balance of probabilities.

(c)Whether the onus has been discharged will depend, amongst other things, upon the strength of the evidence suggesting lack of capacity.

(d)For Jeff to have had the capacity to make the decision that is challenged, he needed to have the capacity to understand:

(i)that he was making a will and the effect of doing so;

(ii)the claims of Fiona’s nieces as potential beneficiaries; and

(iii)the extent of the property disposed of to his daughters to the exclusion of Fiona’s nieces.

(e)The inquiry is into Jeff’s capacity to understand rather than his actual understanding. If there is evidence of actual understanding, then that would prove the requisite capacity. The Court must look at all the evidence to see what inferences can properly be drawn as to capacity. Such evidence may relate to the circumstances of the execution of the will and also to prior and subsequent events.

(f)If the will is rational on its face, it is for those questioning capacity to establish a tenable case that capacity was lacking.

(g)Where a will has been professionally prepared and the lawyer has formed the view that the will-maker has capacity, the Court should not too readily overturn that view.

[66]      I accept that unsoundness of mind arising from supervening physical infirmity or the decay of advancing age may cause incapacity. But:15

15     Woodward v Smith [2009] NZCA 215.

(a)although a will-maker’s mental powers or acuity may be reduced below ordinary standards, there may be sufficient intelligence nevertheless to understand and appreciate the testamentary act in its different bearings so that the power to make a will remains; and

(b)it is enough if the mental faculties retain sufficient strength fully to comprehend the testamentary act undertaken.

[67]      Physical disability and the need for assistance in the carrying out of even routine daily tasks is relevant only to the extent that those conditions may be caused by unsoundness of mind. Moreover, the capacity to dispose of property by will may not require the same acuity as the management of a business or conducting other transactions such as making contracts for the purchase or sale of property. The ability to engage in such other transactions is likely to indicate positively the will-maker’s capacity to make the decisions about the disposition of property upon death.

[68]      In that regard, the size and nature of the estate and the straightforwardness of the decisions made in determining the terms of the will are highly relevant. A complex web of trust arrangements and dispositions to charities, grandchildren and non-family beneficiaries is likely to require greater capacity for understanding and decision- making than a simple decision to exclude a family member or a group of family members from the benefits of the estate. In the absence of a failure to make adequate provision for a potential beneficiary to whom an obvious duty is owed, there is no principled basis for concluding that a will-maker lacked testamentary capacity merely because they made a decision or decisions that might be regarded by some observers as unfair.

Principles governing the challenge based on undue influence

[69]      Prior to executing his second will, Jeff discussed the 2006 wills and his testamentary wishes in the light of Fiona’s death with his daughters and with G. It is important to say at the outset of the discussion of the applicable principles that the key question, in determining whether Jeff was subjected to undue influence in making his second will, is whether, because of pressure or coercion from Alison, Jeff signed a will in terms that did not represent his own wishes. Advice, even if it amounts to advocacy

or persuasion to a point of view, will not amount to undue influence if a will-maker’s wishes have not been overborne and they make a will of their own free judgment in the terms they wanted.16

[70]I summarise the other relevant principles:17

(a)The onus of proof lies upon whomever claims undue influence. The standard of proof is the balance of probabilities.

(b)In the absence of direct evidence of coercion, as in this case, the question is whether undue influence is to be inferred from all the surrounding circumstances, with particular emphasis upon the result of the will and the circumstances in which it was executed.

(c)It is not enough to show that  a person who benefited from the will had the means and opportunity to unduly influence the will-maker. The Court must be satisfied both that the power to influence was exercised and that the will would not have resulted but for that exercise.

(d)Evidence that the will was prepared by an independent solicitor who conferred with and advised the will-maker in private is evidence that may be taken into account in determining whether undue influence is proved.

The evidence

[71]      The application of those principles to the issues of testamentary capacity and undue influence focuses attention, first, on the nature of Jeff’s disability with dementia

16 Hayden v Simeti HC Auckland P 1042/92, 14 May 1993.

17 Green v Green, above n 14, at [100]–[101], approved by the Court of Appeal in Green v Green [2016] NZCA 486 at [35]. Winkelmann J noted that the principles she summarised had been adopted from Royal Bank of Scotland v Etridge [2002] 2 AC 773 (HL), approved by the Court of Appeal in Hogan v Commercial Factors Ltd [2006] 3 NZLR 618 (CA) at [36]. See also Fisher J in Hayden v Simeti, above n 16 at 12.

and the effect on his decision-making capabilities and, second, on the nature of his relationship with Alison and her actions at the time the will was prepared and executed.

[72]      Counsel for Alison objected to parts of the evidence adduced by affidavit on behalf of the caveators which, it was argued, amounted to inadmissible evidence on the grounds of irrelevance, hearsay, inadmissible opinion evidence, matters of submission, and breach of legal professional privilege.

[73]      The fundamental principle in determining questions of admissibility of evidence is that relevant evidence is admissible, subject to other legislative provisions.18 Evidence is relevant if it tends to prove or disprove anything that is of consequence to the determination of the proceeding.19 Rulings on the objections, therefore, would need to be addressed line by line against the background of the issues to be determined in this judgment.

[74]      But I have borne in mind that the inadmissibility of some portions of the evidence that clearly offended against the rules of evidence was conceded, and that considerable licence was taken by both sides regarding the general principle that:20

A witness may state an opinion in evidence in a proceeding if that opinion is necessary to enable the witness to communicate, or the fact-finder to understand, what the witness saw, heard, or otherwise perceived.

[75]      Given the conclusions I have reached after considering all of the evidence, including that which is challenged by Ms Davenport, I do not need to make formal rulings, except in regard to one category of objection. I deal separately below with the objections to parts of the evidence related to text messages exchanged between G’s wife and Felicity. So far as the remainder of the disputed evidence is concerned, I have ignored that which is plainly irrelevant or founded on unreliable hearsay, such as unsupported assertions that Jeff was tight with money. In other respects, however, it is sufficient to comment on the weight to be attached to the opinions and observations of the witnesses about Jeff’s behaviour at material times.

18     Evidence Act 2006, s 7(1) and (2).

19     Section 7(3).

20     Section 24.

Jeff’s capacity – the dementia issue

[76]      The caveators’ challenge to Jeff’s testamentary capacity is founded on evidence of his dementia or, more accurately, the witnesses’ observations about his forgetfulness and the need for him to receive assistance with daily routines that required an element of recollection or attentiveness. As indicated above at [35], it is common ground that Jeff was diagnosed with dementia in mid-2015.

The evidence on behalf of the caveators

[77]      Felicity says that, by the time Martin and she accompanied Fiona and Jeff to Hawaii in 2016, Jeff’s dementia had progressed markedly and that on that trip someone had to be with him constantly or he would wander off and get lost. He had to be supervised in his daily self-cares and, even then, there were problems. Although her evidence is often vague about the timing of her observations relative to the date of Jeff’s second will, Felicity says the matters on which she bases her opinion that Jeff was showing signs of dementia are these:

(a)Significant memory loss became increasingly evident in that Jeff could not remember recent events but could remember distant events, including childhood events.

(b)Jeff’s medicine-taking was unreliable, his eating patterns were disjointed, and he required supervision to ensure that he did things that had to be done each day.

(c)Jeff’s conversation was “one-sided” in that he would talk about what was in his mind even if that did not link up with what others were saying.

(d)Jeff displayed a mixture of determined independence and also being easily influenced and directed; sometimes he would be difficult and uncooperative, moody and seemingly depressed, although at other times he would have heightened enthusiasm for something.

[78]      Felicity says she saw a lot of Jeff when she was caring for Fiona and in the time leading up to Fiona’s death and that she found Jeff to be very noticeably afflicted with dementia.

[79]      Darryl Sinclair, the son of Fiona’s and Felicity’s brother Jock, purchased a property in Capricorn Place about three houses down from the house where Jeff and Fiona were living and developed quite a close relationship with them. His wife and he then bought a property in Matarangi where he saw Jeff and Fiona frequently, particularly when Jeff and Fiona were spending a good deal of time in Matarangi and Darryl and his wife were living there permanently. He says that over the last 10 years of Jeff’s life, he noticed Jeff showing signs of what he describes as “diminishing mental capacity”, including “endless repetition of the same stories”; forgetfulness such as forgetting where he parked his car or taking twice as long as usual making a trip between Auckland and Matarangi. He said during the last 12 months of Jeff’s life he would sometimes turn up at Matarangi without any food, adequate clothing or medication; that his short-term memory was poor but he had a vivid memory of his childhood and events many years ago; or he would talk about a boat he had once owned as if it was still in his possession.

[80]      I find that it is unnecessary for me to draw any final conclusions about the implications of what is said by Jeff’s daughters to have been a breakdown in Jeff’s and Fiona’s relationships with Darryl Sinclair. It is sufficient to note that Jennifer and her sisters depose that Darryl and Fiona apparently fell out because Fiona refused to see him one day when he tried to visit and she was feeling too unwell to see him. They say Darryl had nothing to do with Jeff or Fiona from sometime in mid- to late 2017 until he attended Fiona’s funeral in 2018, refusing her requests and Jennifer’s husband Matt’s pleas to visit Fiona one more time before she died. It is alleged this so upset Jeff that he refused to have anything to do with Darryl and never saw him again other than at Fiona’s funeral.

[81]      Weighed against the volume of evidence from Jeff’s daughters and his lawyers about Jeff’s mental capacity at the time of his second will in May 2018, and the support for those views in the medical records and the evidence of Jeff’s ability to manage the purchase of his Aria Bay apartment in mid-2019, I am able to hold that Darryl’s

evidence to the contrary is less cogent without determining whether the criticism of his credibility is valid.

[82]      Matthew Irving is an occupational therapist who rented a flat on the ground floor of the Capricorn Place property for about three years up to March 2018. He said that he became very good friends with Fiona and Jeff and got to know them both well. As an occupational therapist he considers that he has a good understanding of the problems for patients with cognitive problems and expressed the opinion that Jeff displayed significant cognitive defects due to his dementia. Partly relying on Fiona’s statements to him and his own observation he says that Fiona was “a massive support for Jeff”, cooking all his meals, organising and issuing medication, prompting him for daily tasks and would manage the finances and complete all of the domestic activity. He describes Jeff having decreasing recall and problem-solving ability, leaving taps running or not recalling recent conversations and being repetitive, misplacing belongings and missing meals.

The evidence supporting the conclusion that Jeff had testamentary capacity in May 2018

[83]      Jeff’s daughters were very close to their father and Fiona and they had frequent and close engagement with them from the time Jeff separated from their mother Valerie in the early 1980s until the end of Jeff’s and Fiona’s lives more than 30 years later. Their observations of Jeff’s active life leading up to Fiona’s death in February 2018, and during the following nearly three years until his own death in December 2020, provides anecdotal support for the conclusions of Jeff’s legal and medical advisers about his cognitive ability at around May 2018 when Jeff decided to make a new will that contained no provision for Fiona’s nieces.

[84]      I am satisfied on the collective evidence of Dianne, Alison and Jennifer that from before Fiona’s death until his own, Jeff’s mild cognitive impairment meant that his short-term memory was poor; that his mind might wander and that he needed occasional reminders about and assistance with household chores. But I am left in no doubt that his language skills, reasoning and judgment, and his decision-making capacity, were still intact up to the time of his death. He never advanced to full-blown Alzheimer’s dementia and led a full and active life, with assistance, despite poor

physical health that included heart problems, a hernia and the renal cancer that was the cause of his death.

[85]      Members of Jeff’s family recall how much strain Jeff was under as Fiona’s health failed progressively over the last few months of her life. They say that Jeff’s demeanour improved markedly once she was gone; the intense pressure he had been under lifted after Fiona’s death and he had the freedom to focus on himself again. That may explain Felicity’s observations of Jeff’s demeanour during the few months leading up to Fiona’s death.

[86]      After Fiona’s death, Jeff remained living independently at the Capricorn Place property until February 2019, receiving daily assistance from a home-care service provider and his daughters. When he decided to move into an independent unit at Aria Bay retirement village, Jeff met with a real estate agent in April 2019 over the sale of the Capricorn Place property. The agent, Shona Jurlina, knew Jeff well as a close family friend over many years. She recorded that when she met Jeff to discuss the marketing of the home, they talked about a plan to improve the presentation by de-cluttering and cleaning it. She says that at all stages of the marketing, Jeff was completely “onto it” and made many decisions on the budget for marketing, the advertising, and the reserve prior to the auction. These were always his own decisions. She said Jeff listened carefully to all feedback from buyers when they went over the marketing reports during the campaign and, even though his daughters supported him, he always made the decisions. On auction day, in about July 2019, he attended in person, re-negotiated a price increase and was extremely happy with the sale price outcome.

[87]      Jeff is described by his daughters as being very active during the nearly three years he survived after Fiona’s death:

·selling two houses and a boat

·buying an independent living apartment

·caring for his cat, including taking it to the vet

·going out of his apartment every day for grocery and clothes shopping

·arranging his own dentist visits

·managing his daily diabetes regime by diet and using test kits

·going to cafés and restaurants

·driving every day, sometimes long distances, without having an accident

·going to the Puhoi pub for lunch or to Long Bay Beach for a walk

·visiting art galleries, museums, the World Press photo exhibition, MOTAT and sculpture gardens

·going fishing

·visiting his daughters and seven grandchildren.

[88]      Dianne says Jeff had a great depth of knowledge, especially history, and was a great conversationalist. He still loved finding out how things worked, and “he had a great appreciation for beauty in all things; architecture, art, a summer’s day at the beach”.

The evidence of Jeff ’s legal advisers, G and M

[89]      While the anecdotal evidence from Jeff’s family about his lifestyle and ability to manage his affairs in 2018 and 2019 is instructive, it comes from perspectives that are not wholly objective. The evidence is supported, however, by evidence from Jeff’s solicitor, G, and M, a solicitor employed by G’s firm.

[90]      M claims some expertise in the area of trusts, estate administration and estate planning, having over 30 years’ experience with G’s firm and before that as a solicitor employed by the Public Trust since 1989.

[91]      In January 2018, Fiona and Jeff asked Jennifer to accept an enduring power of attorney (EPA) to enable her to look after Jeff’s money and property once Fiona had passed away because Fiona had always run the finances during their marriage. Jennifer was also asked to hold an EPA for Jeff’s health and well-being. The documents were signed at G’s firm on 18 January 2018 after Jeff had been interviewed by M to ensure that Jeff was fully aware and capable of signing the documents.      M signed a written confirmation that he had advised Jeff and he endorsed the EPA as having been the person who had explained to Jeff the nature and effect of the document. M certified that he had no reason to suspect that Jeff was or may have been mentally incapable at the time he signed it.

[92]      M says that he was mindful of the requirement that a donor signing a property EPA was deemed mentally incapable in relation to property if not “wholly competent” to manage their own property affairs and he believed that Jeff was competent in that regard. He discussed with Jeff whether he wanted to enable the Family Court to authorise his attorney to make a will for him when he was no longer capable of understanding the nature and effect of what he was doing; who might have a claim to his estate; what he was disposing of and how he was disposing of it. Jeff declined to give his attorney this power. M notes that the second will was signed only four months later in May 2018.

[93]      Jennifer says that, in mid-2019 when Jeff completed the sale and purchase agreement on his Aria Bay apartment, G was aware that Jennifer held the EPAs but considered that it was unnecessary to involve her because Jeff had sufficient decision- making capacity.

[94]      Dianne recalls that, when Jeff was executing his EPA, he asked G for a copy of his will. After G explained to him what the term “residue of estate” meant, Jeff immediately wrote on the back of his will that this was not what he intended; he wanted to leave his estate to his children and grandchildren. Jeff then arranged with G to change his will.

[95]      G says he has over 40 years’ experience in practice and that wills and estate planning is a significant part of his practice. Jeff was G’s client for approximately

14 years up to his death in December 2020. He knew Jeff well and Fiona was employed by the firm as a legal executive for a number of years. He was aware that Jeff had attended on M to execute EPAs and says that, after Fiona’s death, the firm was instructed by Jeff to assist him to update his will. G observes that a lot had changed for Jeff since he executed his former will in 2006, including Fiona’s death, and Jeff set out his wishes for his new will. G’s time sheet records that they met twice in April 2018 for one hour and one hour 42 minutes respectively. Although the notes record Alison having attended both meetings with Jeff, Dianne recalls that she attended one of them in which Jeff and G discussed matters for over an hour. At the end of the meeting she recalls G saying to Jeff, “I think you’re doing the right thing”. Alison accompanied her father to the second meeting but says she was asked to step outside while G discussed the will alone with Jeff. After that meeting, G sent a draft will to Jeff by an email to Alison, who replied on 26 April 2018, saying:

I printed off a copy of the will for dad and gave it to him yesterday. He had a really good read through it, and is happy with the draft. He would like to go ahead with finalizing his will please.

[96]      G says that when Jeff attended on 1 May 2018 he appeared to G as he always had, with a sound mind and reasonable memory. Jeff indicated to G that he had “recently” been diagnosed with early onset dementia but that he had been coping well despite this. This diagnosis surprised G who says Jeff did not demonstrate any issue with his memory and joked with G about it. G says he certainly did not detect any lack of understanding or clarity on Jeff’s part and he felt comfortable that Jeff was fully in control of his faculties. G says that, although Jeff was elderly, he clearly understood that he was changing his will and why; he understood the property he was disposing of and also clearly understood who he was leaving his property to and why. G says that nothing about Jeff’s testamentary wishes struck him as being unreasonable or unusual given his knowledge of G’s affairs; Jeff was essentially paying his debts and then leaving his estate to his daughters.

[97]      G says that there is nothing on his file not previously disclosed that might be relevant to Jeff’s testamentary capacity or which might necessitate disclosure.

[98]      Neither G’s evidence nor his file notes indicate what, if anything, Jeff said to G about his decision not to include Fiona’s nieces as beneficiaries of his residuary

estate. Nor does G record anything to suggest that Jeff’s decisions about his will were influenced by, much less dictated by, anything done or said by Alison.

G’s wife, L

[99]      G’s wife, L, deposes that she became close friends with Fiona after they had worked together for a number of years in G’s practice. She says she met Jeff “numerous times, more specifically at the time leading to Fiona’s death at her residential care”. She says:

3.One time when I saw Jeffrey Clay at the care facility I was concerned that he seemed quite vacant. I was not sure whether his apparent confusion was caused by his stress at Fiona’s poor condition and her imminent death. When I saw him shortly after at Fiona’s funeral he seemed a lot better.

4.I was asked to witness Jeffrey Clay sign his will on 18 January 2018. At the time because of my recent experiences with Jeff (as outlined in the previous paragraph) I raised my concern about Jeffrey with my husband [G]. He asked me to wait while he interviewed Jeffrey to investigate his capacity. I was not present in the room during that interview but was called in to witness the will subsequently being signed.

[100]    Unwisely, and in breach of her obligations of confidentiality as an employee of Jeff’s solicitor, L volunteered information by text message to Felicity in January 2020 expressing concern about the provisions of Jeff’s will. She does not explain in her affidavit why she felt it was appropriate to disclose her opinions to Felicity, although she acknowledges that she did not have the consent of the beneficiaries nor G, as executor of Jeff’s will, to make the disclosure and that she regrets having done so. L does not deny that the observations in her text messages accurately recorded her views.

[101]    The evidence was objected to on the ground that it amounted to a breach of privilege.

[102]    The text messages reveal a co-operative approach by L to assisting Felicity with a potential challenge to Jeff’s will on the grounds of Jeff’s testamentary capacity. Those that were not the subject of agreement between counsel about inadmissibility read:

1.13pm, 31 January 2020 – L to Felicity

… you need to get on to it You need to ring [G] and talk to him. It’s not as if you haven’t expressed this before The only contentious thing is Fi changed hers but I believe that was because Jeff was concern [sic] he wouldn’t have enough to live ON Do it. Get in touch with [G]

Try not to get me in to [trouble] but I don’t care about that I bought it up when he changed his Will

Let’s face it, he didn’t have all his mental faculties about him then!!!!

1.16   pm, 31 January 2020 – L to Felicity

Will done after Fiona passed away

Yes one of the girls was with her. Not sure her name

And I [sic] you ask me… his memory stuff had well and truly suspect by then. It was before Fiona died.

1.17   pm, 31 January 2020 – L to Felicity

I’m going to ask something where here that you might like to think about … when I meet you at the nursing facility that Fiona was in… I’m pretty sure Jeffs memory and actions were … hmmm .. indicative of not being totally aware of all that was going on around and his memory had started to go quite badly. I didn’t think he should be driving at all and am not sure he even knew what Fiona was doing there It may be something to consider in your conversations with you [sic] Legal advisor whether he was with it enough to make such decisions I’m sure he would have been easily lead [sic] I just know that Fiona often talked of your girls and how she was leaving them her Estate!!! I think Jeff was very controlling of her and she talked about it with Vicki snd [sic] I one day when she’d finished work and went out for lunch and he kept asking how much longer she’d be!!!

Good luck.

Love and hugs

[103]    I accept Mr Radich’s proposition that the text messages sent by L are not subject to solicitor-client privilege in that they amount only to observations by L of Jeff’s demeanour, conduct and apparent mental faculties. One part of the text message sent at 1.17pm on 31 January 2020, if affirmed by L, would arguably be relevant in the same way that the observations of Felicity, Darryl Sinclair, Matthew Irving and Jeff’s daughters are relevant as opinion evidence that “is necessary to enable the witness to communicate, or the fact-finder to understand, what the witness saw, heard, or otherwise perceived”:21

I’m pretty sure Jeffs memory and actions were … hmmm .. indicative of not being totally aware of all that was going on around and his memory had started to go quite badly.

21     Evidence Act 2006, s 24.

[104]    But most of the content of the three messages – to the extent that it is decipherable – is gossipy and speculative, without any foundation for it having been laid. The statements do not assist to explain what L saw, heard or perceived in the s 24 sense. I rule that the following statements are inadmissible, and I disregard them:

(a)“I believe that was because Jeff was concern [sic] he wouldn’t have enough to live ON”

(b)“Let’s face it, he didn’t have all his mental faculties about him then!!!!”

(c)“… his memory stuff had well and truly suspect by then”

(d)“I didn’t think he should be driving at all and am not sure he even knew what Fiona was doing there”

(e)“I’m sure he would have been easily lead [sic]”

[105]    L’s affidavit evidence goes no further than identifying that, shortly before his wife’s death, Jeff was “vacant” and apparently confused with his wife in a care facility.

[106]    Evidence that is more relevant and reliable, and from which proper inferences may be drawn, is the objective, contemporary evidence about Jeff’s medical condition and his cognitive ability that is available from the extensive medical notes and needs assessment reports produced to the Court.

Medical evidence

[107]    An assessment of Jeff by the Older Adults Service of the Waitemata District Health Board dated 26 June 2017 records that:

Mr Clay’s wife has noticed that he can get quite forgetful, especially when he is stressed, but has not had any episodes where he has left the stove on or forgot about the cooking he has been doing. Mr Clay also reports that he can become quite absent-minded, eg. he had forgotten his hearing aids and glasses today, before he came into clinic. He reports that his memory gets worse when he is stressed, especially as his wife is currently undergoing radiation therapy for throat cancer and with her operation in the past, he reports that he does get more forgetful. Mr Clay and his wife deny any unusual behaviour, or inappropriate behaviour and he denies any auditory or visual hallucinations.

He denies any tremors or shakes, suggestive of parkinsonism. He denies any sleep disturbances.

[108]Under the heading “Impression”, the notes read:

Cognitive impairment, consistent with Alzheimer’s disease, unlikely to be Lewy body dementia; currently coping well with current supports in place.

[109]    A needs assessment completed on 30 January 2018 includes the following relevant identified needs:

Set up and supervision if needed to complete personal care tasks, including: showering/washing, drying, un/dressing, grooming and personal hygiene.

Medications dispensed and given as prescribed, Effective symptom management and pain control.

Assistance to maintain adequate fluid & fluid intake, Assistance with meal preparation for main meals.

Assistance with essential grocery shopping tasks – you are currently driving still – suggested setting up menu planner … prompting to complete tasks as required, Support and prompting around memory/cognition issues.

To be given time to respond in conversation and to express yourself, Support with communication due to hearing impairment.

[110]    The services to be provided included 12 hours per week from Geneva Northlink.

[111]    The medical notes for a consultation with Dr Reinecke, Jeff’s general practitioner, on 10 April 2018 record that he was coping at home and driving, that his outdoor experiences were interactive, that he was still reading, fishing and walking. As to driving, he was noted as recognising road signs and giving an appropriate response. The notes record that Jeff’s family often drove with him and that he was driving well, including “trips to the bach”. So far as the activities of daily living are concerned, no concerns were recorded with showering, dressing, toileting, transferring, grooming and communication. The notes record difficulty with meal preparation and difficulty using the microwave. Carers usually heated or prepared food for Jeff during the week and family were concerned about support in the weekend. A note suggests “moderate cognitive impairment”. Dr Reinecke noted no concerns about driving. As to cognitive/perceptual/emotional matters, the notes read:

… slowed thinking, decreased attention, anxiety – if not taking medications or eating well can have issues.

[112]    A further needs assessment report dated 5 June 2018 records the same identified needs as those that had been identified in January 2018. The only differences were the poignant deletions of references to the provision of support for Fiona as Jeff’s carer and to Jeff and Fiona expressing the wish that they should live as independently as possible.

[113]    The serviced apartment at Aria Bay village that Jeff intended to purchase in mid-2019 was in the independent living part of complex which also offers dedicated dementia care and support facilities. The health assessment form completed prior to Jeff’s purchasing the apartment at Aria Bay village included a question about cognitive impairment and memory loss. The form records Alzheimer’s dementia and a MoCA score of 12/30. Dr Reinecke’s medical notes dated 19 June 2018 show that Jeff’s MoCA score was 15. They record that he was cooking himself two poached eggs and two pieces of toast for breakfast and would either go out for lunch or have a sandwich, and that he was having home care help with evening meals.

[114]    On 27 September 2019, Jeff attended the Auckland Hospital oncology clinic. The hospital notes show that he was still making his own decisions over his cancer treatment at that time. After discussing the diagnosis, the doctor says:

Unfortunately Jeffrey’s renal cell carcinoma is metastatic and therefore incurable. He would like to take a best supportive care approach to his cancer which is very reasonable. … Jeffrey does not want to do anything that may upset his current good quality of life. We have talked in general terms about prognosis which could be measure [sic] in months rather than years. … Jeffrey is in agreement with the referral to the Hospice Team.

Jeffrey has led a colourful life with many connections with the ocean working as a light house engineer. He looks forward to spending as much time at the beach, fishing and with his family in his remaining time.

[115]    That evidence suggests that, even 16 months after Jeff made his second will, he was capable of making an important decision about the type of medical care he should receive for a terminal illness.

[116]    I note that a steady decline in Jeff’s cognitive ability is discernible in the medical notes but there is nothing to suggest that he did not have the capacity, in May 2018, to understand the implications of, and implement, a very simple decision not to make provision in his will for three daughters of his deceased wife’s twin sister with whom he appears to have had no active relationship and whom he rarely saw.

Discussion on capacity

[117]    I am wholly satisfied on the affidavit evidence, supported by the exhibits and particularly the medical reports, that although Jeff was undoubtedly suffering mild to moderate dementia when he gave G his will instructions and executed his will on     1 May 2018, he was more than capable of understanding the size and nature of his estate, of considering how he wished to dispose of it and of recognising the relevant issues about any potential beneficiaries. There was no complexity to the matters he had to decide.

[118]    The evidence does not address directly the basis on which Jeff decided not to replicate the provision for Fiona’s nieces as residuary beneficiaries. It is noteworthy that Dianne’s evidence establishes that Jeff addressed the question of his residuary estate directly and there is nothing unusual in his decision not to make any provision for the nieces with whom he does not appear to have had a relationship of any significance.

[119]    It may well be that Felicity and her daughters had an expectation, based on Fiona’s statements and the terms of her will, that half of the residue of the combined assets Fiona and Jeff accumulated during their 40-year relationship would be divided equally between what might have been seen as Jeff’s family and Fiona’s family. There is no principle of law nor a moral or philosophical reason why that should be the case. The evidence more than satisfies me that, in reality, Jeff’s and Fiona’s close family comprised Jeff’s daughters, their partners and their children, notably Callum and Jessica, who, like their mother, Jennifer, were particularly close to Fiona. Although it may have seemed appropriate to Fiona and Jeff in 2006 to divide the residue equally between the daughters and the nieces, and Fiona elected to maintain that position in

her 2016 will, there is nothing in the evidence to indicate that Jeff and Fiona intended to bind themselves irrevocably to that arrangement.

[120]    I accept that Fiona may have expected Jeff to make a similar disposition if he changed his will after her death. But Fiona’s expectations, in the absence of a binding agreement, do not create any duty on Jeff that is so obvious that the Court should conclude that his 2018 will was such an aberration as to compel an inference that he must have lacked testamentary capacity or been under undue influence.

[121]    Most significantly, Jeff’s circumstances had changed by 2018 in that Fiona was no longer alive. Fiona and he had disposed of assets in order to support themselves. Moreover, those closest to Jeff and with whom Jeff shared his life on an almost daily basis were his three loving daughters and their families. There is no evidence that Jeff had any relationship with Fiona’s nieces. None of them provided any evidence about one. None of them attended his funeral.

[122]    There is no reason to think that it was unusual that he should favour disposition to his daughters over sharing his remaining assets with Fiona’s three nieces.

The allegation of undue influence

[123]I can deal with the allegation of undue influence briefly. It has no foundation.

[124]    The proposition on behalf of the caveators seems to be that because Jeff was enfeebled and he departed from the arrangement that he had with Fiona to divide his residuary estate equally between his daughters and Fiona’s nieces, that must have occurred because he was pressured by Alison. But Alison, and Dianne for that matter, did no more than would be expected of dutiful and loving daughters caring for an elderly parent. They facilitated his attendance on his solicitors after he had indicated a wish to change the will arrangements made in 2006. He consulted his solicitor and had discussions with him in private and in confidence, in the absence of his daughters, and made a decision that is, in my view, entirely understandable.

[125]    Felicity appears to adhere to a view that Fiona and Jeff were members of two families and that equity requires that, after they had both died, their estate should be

divided between the two families. That is a tenable view and it seems that Fiona may have shared it. But it is equally tenable for Jeff to have taken the view that, after Fiona’s death, the assets that they had accumulated jointly over 40 years of a loving relationship were his to dispose of after his death as he wished.

[126]    The evidence falls well short of establishing any tenable case that Jeff’s will was overborne and I do not consider that a full hearing would be likely to produce evidence compelling the Court to come to a different view.

Decision

[127]In summary, therefore, I conclude:

(a)Although Jeff’s dementia affected his short-term memory, there is no tenable argument that he lacked the capacity to make a straightforward decision about the provisions of a simple will.

(b)Jeff demonstrated his ability to make rational, independent decisions in 2018 and 2019 by selling and buying property and making a key decision about the nature of medical treatment for a terminal illness.

(c)Medical notes and other information available from objective healthcare providers do not indicate that Jeff had any difficulty making reasoned decisions at relevant times.

(d)Jeff’s legal advisers, one of whom had known him for many years, considered him capable of understanding the nature and extent of his estate and of making decisions about its disposition.

(e)The evidence about Alison’s involvement with the making of Jeff’s 2018 will goes no further than providing evidence of opportunity.

[128]    I am satisfied that the caveators have failed to establish a tenable case that Jeff lacked the capacity to make his 2018 will or that the will did not represent the exercise of his own free judgment. In my view, there is no prospect that a fuller enquiry will

persuade the Court to reach a different conclusion. The caveators have failed to show cause why the order nisi made on 23 December 2020 should not be made absolute.

Order

[129]I direct that the order nisi be made absolute accordingly.

Costs

[130]    The applicant is entitled to costs on a category 2B basis. Counsel are invited to confer and endeavour to reach agreement. In the absence of agreement, however, I direct that the applicant shall file and serve a memorandum as to costs no later than 21 October 2021. The caveators shall have until 11 November 2021 to file a memorandum in response. Costs shall then be determined on the papers unless the Court directs otherwise.

Toogood J