Halse v Lawrey
[2023] NZHC 223
•17 February 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2021-485-614164
[2023] NZHC 223
IN THE ESTATE of HAROLD STANLEY SMITH of
Auckland, Retired (deceased)
BETWEEN
GRAEME WILLIAM HALSE
Applicant/Executor
AND
CARA EMILY LAWREY
Caveator
RICHARD HAROLD SMITH
Interested Party
Hearing: 8 February 2023 (Heard at Auckland) Appearances:
D Grove for the Applicant/Executor G D Pearson for the Caveator
L W Dixon and W S Gatting for the Interested Party
Judgment:
17 February 2023
JUDGMENT OF HARVEY J
This judgment is delivered by me on 17 February 2023 at 4 pm pursuant to r 11.5 of the High Court Rules.
.....................................................
Registrar / Deputy Registrar
Solicitors:
LegalFocus Limited, Nelson (G Pearson) Foy & Halse, Auckland (G Halse)
Patterson Hopkins, Auckland (L Dixon and W Gatting)
Counsel:
Daniel Grove, Auckland
Re. SMITH H S ESTATE [2023] NZHC 223 [17 February 2023]
Introduction
[1] Harold Stanley Smith died on 11 October 2021 aged 79. He was unmarried, was not in any other form of domestic relationship when he died and left a will dated 20 July 2021. He named his son Richard Smith and his solicitor Graeme Halse his executors and trustees. He also gave his whole estate to Richard.1
[2] A decade earlier, the deceased made a will dated 1 July 2011 through a firm of solicitors in Lower Hutt arranged for him by his granddaughter, Cara Lawrey. Ms Lawrey is the daughter of Mr Smith and is a lawyer. By that earlier will, the deceased left his estate as to 40 per cent equally divided between his two sons Mr Smith and Bruce Tamblyn, with the balance to be distributed equally amongst his grandchildren.
[3] On 14 October 2021, three days after the deceased’s death, Ms Lawrey lodged a caveat against probate. Following that, on 18 March 2022, Mr Halse applied for an order nisi requiring Ms Lawrey to show cause why probate should not be granted. That order nisi was issued on 21 April 2022. Ms Lawrey as caveator, and her siblings, with support from Mr Tamblyn, now challenge the validity of the deceased’s last will, raising questions over testamentary capacity and undue influence.
[4] In a joint memorandum of counsel dated 23 September 2022, the parties confirmed that the preliminary issue before the Court is whether the caveator can establish cause not to make the order nisi absolute. Should that occur, it is agreed that the matter will go to a hearing in an application made in solemn form. The issue for determination is whether a full inquiry should be made.
Ms Lawrey’s submissions
[5] Mr Pearson submitted that the affidavits filed in support of the caveat establish that a full inquiry is necessary as there are questions to determine regarding testamentary capacity and undue influence. Added to that, counsel contended that given the fact that a live inquiry is in train regarding an allegation of elder abuse, it is
1 For clarity Harold Smith will be referred to as the deceased and Richard Smith as Mr Smith.
appropriate that the Court embark upon a full inquiry into the events surrounding the completion of the will by the deceased.
[6] In addition, Mr Pearson argued that there was ample evidence in the affidavits of Mr Smith’s abusive conduct and disrespectful behaviour toward his family and the deceased. Added to that, Ms Lawrey claimed that the deceased had suffered from neglect despite relying on Mr Smith. Moreover, Mr Smith’s abusive conduct towards the deceased is corroborated by the evidence of Ms Lawrey’s siblings Emily, Karen and Maurice, according to counsel. Mention is also made of Mr Smith’s lack of care and responsibility when his father died and this is corroborated by Emily’s evidence.
[7] Counsel submitted that the deceased’s previous will provided that the residue of the estate as to 40 per cent would be divided equally between Mr Smith and Mr Tamblyn. The remaining 60 per cent was to be divided equally between the deceased’s six grandchildren. In contrast, Mr Pearson contended, under the current will the estate is left solely to Mr Smith. Counsel argued that in such circumstances, where a police inquiry is underway over allegations of elder abuse, that Mr Smith facilitated the procuring of the new will and by that device is to receive all of the estate of the exclusion of his brother and his own children, justified a full inquiry.
[8] In addition, Mr Pearson contended that the assertion by the executors that the deceased change his will as he wished to leave all of his estate to his eldest son “in accordance with Fijian tradition” does not bar a further inquiry. Counsel also underscored that there was no evidence of what this “Fijian tradition” was, its parameters and content; it was entirely an assertion on the part of Mr Halse.
[9] Mr Pearson submitted that the affidavits from Mr Halse and two of his staff members raised more questions than they provide definitive answers. Tellingly, accordingly to counsel, that evidence does not engage with the claims of elder abuse but do confirm that it was Mr Smith who initiated the instructions for the new will. Counsel contended that the issue of the asserted Fijian tradition is a matter that Mr Halse should be cross-examined over. In any event, Mr Pearson argued that in the absence of further evidence, the Court can only speculate whether Mr Halse explored sufficiently the reasons for the significant change in the deceased’s will. Counsel also
submitted that the observations of the legal staff as to mental capacity must be considered in light of their lack of relevant qualifications to make any such assessment.
[10] In this context, Mr Pearson argued that the affidavit of Dr Ralph highlighted a complex medical history for the deceased. She described the relationship between the deceased and Mr Smith very differently from that of other witnesses. Accordingly, it is necessary that Dr Ralph be cross-examined so that the weight of her evidence can be properly assessed in the context of these proceedings and the claims of lack of capacity and undue influence.
[11] Mr Pearson submitted that the threshold as to whether a proper inquiry should be undertaken is not high. In short, counsel argued that testamentary capacity remains a tenable issue given the change of mind, the grave medical circumstances surrounding the final will and the evidence of disordered thinking regarding Mr Smith’s attitude towards the deceased and treatment of him. Accordingly, Mr Pearson submitted that a factual inquiry is necessary.
[12] Regarding the claim of undue influence, counsel contended that Ms Lawrey has direct knowledge of the deceased’s circumstances. At the heart of the undue influence doctrine, according to Mr Pearson, is the impairment of the testator’s free will, which does not require impropriety, malevolent intent or unconscionable conduct. The threshold for establishing undue influence is where circumstances raise a more probable inference in favour of what is alleged and not after the evidence on the question has been evaluated as a whole. For all of these reasons, Mr Pearson argued that there is sufficient before the court to require a full inquiry as sought by Ms Lawrey and the rest of her family.
Mr Halse’s submissions
[13] Mr Grove submitted that Mr Halse filed detailed evidence as to his dealings with the deceased highlighting that his firm, Foy & Halse, was approached by Mr Smith on 2 June 2021 concerning a will and enduring powers of attorney. These were required, according to Mr Smith, because the deceased was then in hospital with breathing issues.
[14] Mr Grove referred to Mr Halse’s evidence during the period 9 June 2021 through to the signing of the will. He referred in particular to a meeting held on 16 July 2021 with the deceased. Counsel contended that Mr Halse, in arranging the meeting, sought to be satisfied that the deceased was competent to understand the nature of the enduring powers of attorney as well as confirmation as to his new will and how his estate would be left, “in accordance with the Fijian tradition” to Mr Smith solely. Mr Halse’s evidence also confirmed that he had drawn to the deceased’s attention the risks of a challenge to the will under the Family Protection Act 1955.
[15] More importantly, Mr Grove underscored Mr Halse’s evidence that when asked about his previous will, the deceased explained that he “did not feel comfortable” with that version. According to Mr Halse, the deceased told him his granddaughter, Ms Lawrey, herself a lawyer, had taken him to complete a will with solicitors in Lower Hutt. He did not have a copy of that will but recalled that provision had been made for his grandchildren as well as his sons. In addition, Mr Grove highlighted Mr Halse’s evidence that there appeared to be nothing out of the ordinary regarding the deceased’s demeanour to suggest he felt undue pressure from his son.
[16] Further, Mr Grove argued that there is no evidence that the deceased lacked capacity. On the contrary, he contended that the evidence of the deceased’s GP confirmed that he met the tests for testamentary capacity. In addition, Mr Grove argued that the three solicitors who had met with the deceased did not consider there was any question of undue influence, a view echoed by his GP. In short, while Ms Lawrey and her family are disappointed by the will they could have pursued a claim under the Family Protection Act but decided against that option.
[17] On the question of costs, Mr Grove submitted that Mr Halse’s participation was entirely necessary and therefore his costs should be paid for from the estate.
Mr Smith’s submissions
[18] Mr Dixon submitted that the law is settled that the Court’s function at this point of the process is not to determine the validity of the will, but whether a claimant has demonstrated a sufficient cause to justify a full inquiry in solemn form proceedings. Failing that, the order nisi must be made absolute.
[19] In addition, counsel accepted that while there is a lower threshold than what would be required to satisfy the Court on the balance of probabilities, it nonetheless required an evidential foundation based on admissible evidence. Consequently, this excluded assertion, speculation and hearsay—more so when such material is inconsistent with contemporaneous documentary evidence. In any case, Mr Dixon argued that the grounds relied on by the caveator must be discerned from the evidence and counsel’s submission, which appear to rely on claims of lack of testamentary capacity and undue influence, he contended.
[20] Regarding the claim of elder abuse, which was denied, Mr Dixon submitted that this is not a ground for an application for probate in solemn form.
[21] As to the deceased’s declining health, this was first evidenced by a fall in August 2020 when he was not found for about 36 hours. According to the medical evidence, in July 2020 the deceased weighed 92 kg and by January 2021, six months later, his weight had fallen to 83 kgs. Counsel contended that unexplained weight loss can be symptomatic of underlying illness rather than neglect. In any case, so concerned was Dr Ralph that she referred the deceased to specialists for their examination. That occurred on 1 April 2021 when the deceased saw Dr Jennifer Weo, a geriatrician, who reported on 15 April 2021. She observed that the deceased had lost 12 kg in eight months. He underwent a cognitive assessment and scored 27 out of 30 with the result that cognitive decline and dementia were not listed as concerns.
[22] Following that, on 16 May 2021 before a CT scan could be completed, Mr Dixon submitted that the deceased had another fall and was found to be seriously unwell on admission to hospital. By that stage his weight had fallen to 79–89 kg and he appeared to be suffering from a respiratory infection. Scans confirmed fluid on the lungs but despite this there was no evidence he was cognitively impaired. Indeed, as counsel set out in paragraphs 19 to 20 of his submissions, the deceased’s cognitive presentation revealed no concerns and he was found to be “alert” and “oriented” on multiple occasions.
[23] However, counsel highlighted that the medical evidence also confirmed that the deceased was suffering from various illnesses as set out in a report dated 18 June
2021. In addition, Mr Dixon argued that the deceased’s weight loss continued while he was in hospital, which also underscored, again, that his deteriorating physical condition concerned underlying illness rather than neglect. Further, subsequent medical reports did not identify cognitive decline. Then, according to counsel, between the deceased’s discharge from hospital on 28 June 2021 and an appointment with Dr Yeo on 12 August 2021, he gained over four and a half kilograms in weight. This is evidence, Mr Dixon highlighted, that the deceased was responding positively to Mr Smith’s care and is therefore inconsistent with the claims of abuse or neglect.
[24] Counsel submitted that the deceased had another fall around 19 September 2021, following which an ambulance was called five days later. Mr Dixon confirmed his client accepted that the deceased was in a very poor condition being cachexic and dehydrated. Despite this, counsel argued that this condition was as a result of his very poor health generally and due to the fact that the deceased’s limited community support had discontinued following the latest Covid-19 lockdown in Auckland. Despite his physical condition, Mr Dixon emphasised that the deceased’s cognition was intact since the admission notes of 27 September 2021 described him as being oriented to place, day of the week and address. A day later, a further assessment confirmed that the deceased appeared alert and able to follow instructions given. The patient at risk record nursing notes of 29 September 2021, twelve days before the deceased died, described him as being alert and oriented.
[25] The deceased passed away on 11 October 2021. Almost a year later, Dr Ralph’s affidavit annexing a report dated 14 September 2022 which was consistent with the earlier evidence regarding the deceased’s underlying illness, contrasted with his cognitive abilities. Importantly, counsel highlighted that Dr Ralph had no concerns with the deceased’s cognition on 6 July or 16 August 2021. His last will was made on 20 July 2021, between those appointments.
[26] Mr Smith’s evidence, according to counsel, is that the deceased’s will was entirely his own initiative. He rejected the suggestion that he influenced or coerced the deceased into making that will. Mr Dixon also pointed to the evidence of Mr Halse and his staff who also supported Mr Smith’s position that his father made up his own mind about the will without his influence or interference. Further, there is the
reference by Ms Diaconescu, the support worker, who confirmed that on a visit to the deceased’s home on 5 August 2021, several weeks after the will had been signed, the deceased confirmed that he had completed a new will, leaving everything to Mr Smith and that he was content with that arrangement. According to counsel, it is significant that the deceased told Ms Diaconescu that he was happy with his new will when Mr Smith was not present.
[27] Mr Dixon highlighted that the bare assertions of the deceased’s granddaughter and other members of her family can be seen in stark contrast to the evidence of the medical practitioners and the care worker. Accordingly, Mr Dixon argued that the deceased had capacity to conclude his final will in the manner that he decided, consistent, it was said, with Fijian traditions.
[28] As to the claim of undue influence, counsel submitted that the onus is on the claimant making the allegations to provide the evidence in support of that argument.
[29] Mr Dixon also submitted that Ms Lawrey and her family have had little actual in person contact with the deceased for many years. He contended that Ms Lawrey last saw the deceased in March 2019 even though she would send him text messages. She claimed she lived with the deceased between 2015 and 2016. Her sibling, Verna Smith, moved to Melbourne in 2012 and has lived there ever since. She does not say when she last saw the deceased. Another sibling, Mary Smith, confirmed she moved to Western Australia in 2010 and saw the deceased in 2015 and 2017. She would call and message on his birthday and for Christmas. Her brother Richard Smith Jnr lives in Perth and he confirmed that he was “terrible” at keeping in contact with family. Mr Smith Jnr also claimed that he would see the deceased whenever he was back in New Zealand, without saying exactly when.
[30] In short, Mr Dixon argued that while the deceased loved his grandchildren, he did not have an unusually close relationship with them. They were not dependent on him and were not involved in his care, according to counsel. Over time, their relationship would grow more distant as they grew older and moved to establish their own lives.
[31] As for the deceased’s son, Mr Tamblyn, Mr Dixon submitted that he has lived in Washington State since 1997. He did not say when he last saw the deceased. The short point, according to counsel, is that Mr Tamblyn, like his nieces and nephew, did not have a particularly close relationship with the deceased. Given that most of them lived away from Auckland, inevitably, their relationships were nothing out of the ordinary. Their own evidence confirmed that their contact with the deceased was sporadic and intermittent at best. Mr Dixon submitted these circumstances explain why the deceased felt disquiet about the earlier will and sought to amend his dispositions.
[32] In any event, Mr Dixon submitted that the evidence does not support the claims of a lack of testamentary capacity or undue influence.
Legal framework and principles
[33] At this stage in the proceeding, the onus is on the caveator to show why the order nisi should not be made absolute. In other words, they must satisfy the Court there are grounds for a full inquiry.2 The threshold for satisfying that onus is low.3 The caveator should provide such evidence as is readily available to support the caveat they have laid.4 The High Court does not usually resolve factual disputes at this stage,5 and if such a dispute arises the Court will normally order the application for administration to proceed in solemn form.6
[34] The caveator’s action relies on lack of testamentary capacity and undue influence. If there is evidence raising lack of testamentary capacity as a tenable issue, the onus of satisfying the Court that the will maker had testamentary capacity is for those who seek probate of the will.7 The onus must be discharged on the balance of probabilities.8 Those seeking probate will need to establish that the will maker had
2 Jurisich v Harris [2016] NZHC 525 at [7].
3 At [7].
4 Van Der Kaap v Wilson CA97/04, 30 May 2005 at [35].
5 At [35].
6 Turk v Turk [2020] NZHC 1495.
7 Public Trustee v Bick [1973] 1 NZLR 301.
8 Watkins v Public Trustee [1960] NZLR 326 (CA).
sufficient understanding of three core elements.9 First, that they were making a will and the effect of doing so; secondly, the extent of the property being disposed of; thirdly, the moral claims they ought to give effect to when making dispositions. The will maker must also be free from any disorder of the mind or delusion which has influenced the will-making.
[35] In relation to undue influence, the burden of proof rests on the person seeking to establish undue influence and must be satisfied on the balance of probabilities.10 Undue influence means mental coercion to make a will in particular terms and goes beyond persuasion.11 However, it does not require impropriety, malevolent intent or unconscionable conduct.12 There must be positive proof that the coercion overpowered the volition of the will maker.13 Circumstances bearing on the free will of the will maker at the time of execution are relevant, including illness, pain and suffering, physical weakness, mental deterioration, and dependency upon others in legal, business, social, medical and/or domestic matters.14 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.15
Discussion
[36] In summary, I accept that it is at least arguable for Ms Lawrey to raise concerns over testamentary capacity and undue influence. I am satisfied that a full inquiry should be held. When he became seriously ill, the evidence confirms that the deceased was largely reliant on Mr Smith. That dependency increased over time as the deceased’s health declined. Mr Smith himself acknowledged that he was not the best caregiver all of the time he lived with the deceased. From time to time, the evidence also confirms that the deceased would be left to his own devices, not necessarily for long periods, but without the daily oversight that might be appropriate for someone
9 Banks v Goodfellow (1870) LR 5 QB 549; Woodward v Smith [2009] NZCA 215; and Loosley v Powell [2014] NZCA 3.
10 Green v Green [2016] NZCA 486.
11 Hall v Hall (1868) LR 1 P&D 481.
12 Green v Green, above n 10, at [40].
13 Craig v Lamoureux [1920] AC 349 (PC).
14 Re Dudley (dec’d) HC Auckland P1042/92, 14 May 1993.
15 Dennerly v Craig [2021] NZHC 2605 at [70].
with his declining state of health. Certainly, being left on at least one occasion for 36 hours could hardly be seen as consistent with the minimum standards required for appropriate care, notwithstanding the deceased’s mobility.
[37] The counterpoint to that is the independent medical evidence that on numerous occasions confirmed there were no queries, let alone concerns, over the deceased’s cognition. On the contrary, and during the crucial period when the will was made, it appears at first blush, unlikely that the deceased lacked capacity. Even so, I accept Mr Pearson’s submission that, taking into account all relevant circumstances, counsel should have the opportunity to cross-examine the medical specialists, the care worker, if she can be located and Mr Smith. As stated above, where the caveator’s evidence is disputed the Court normally orders the application to proceed in solemn form.16
[38] In any event, as I intimated at the hearing, an individual may retain testamentary capacity while still being subject to undue influence. In the absence of an audio visual recording of the deceased’s daily interactions with Mr Smith, it is difficult to see how that influence might have been manifest. It is not unknown for caregivers and close relatives to apply subtle, passive-aggressive and even nefarious influence in the absence of other witnesses with the result that the will maker has been subject to undue influence. The difficulty for Ms Lawrey is proving, on the balance of probabilities, that such misconduct occurred. That said, as foreshadowed, I accept Mr Pearson’s submission that, given the circumstances, the change in the earlier will, and taking account of the relationships set out in the evidence, counsel should have the opportunity to explore these issues with the deponents at a hearing.
[39] I also observe that, without the benefit of further submissions and in the absence of the examination of the witnesses, the claim of lack of testamentary capacity may be challenging to prove. Put another way, while I have accepted that Ms Lawrey through her counsel should be given the opportunity to explore these issues at a full inquiry, on its face at least, the medical evidence does appear to suggest that the deceased did possess testamentary capacity when the will was made.
16 Turk v Turk, above n 6; and Van Der Kaap v Wilson, above n 4, at [34].
[40] One final point. Again, by way of observation, it was not clear why the claims of Mr Smith’s poor relationships with his children and brother was relevant to the present application and the claims of lack of testamentary capacity and undue influence. The references to allegations concerning Mr Smith’s conduct towards the deceased were understandable. Its relevance may become clearer at the next hearing.
Decision
[41]The caveator’s show cause action is successful.
[42] Under s 61(d)(ii) of the Administration Act 1969, I direct the executors under the will to make an application for probate in solemn form.
[43]A fixture for the inquiry hearing should now be scheduled.
[44] I consider that Mr Halse’s legal costs should be paid from the estate. If the parties take a different view, they have one month from the date of this judgment to file submissions on the point.
Harvey J
6
1