Perpetual Trust Limited v Heath

[2024] NZHC 1734

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2024-485-601788

[2024] NZHC 1734

IN THE MATTER

the estate of Graeme Grattan Johnstone

BETWEEN

PERPETUAL TRUST LIMITED

Applicant

AND

SUZANNE MARGARET HEATH, ROBYN ANNE HUGHES, NICOLA JAYNE CURRIE,

CHRISTOPHER MICHAEL MAGUIRE, CRAIG GRATTAN MAGURIE MICHAEL JAMES MAGUIRE and

PENELOPE JANE CUMMING

Caveators

Hearing:	24 June 2024 (By way of telephone conference)
Appearances:	G M Cairns for Applicant D R Tobin for Caveators
Judgment:	27 June 2024

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 27 June 2024 at 11 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE JOHNSTONE [2024] NZHC 1734 [27 June 2024]

[1]    Mr Graeme Grattan Johnstone (the deceased) died on 22 January 2023 aged 92. His last known will was dated 10 February 2017 (the 2017 will). It appointed his brother in law, Alan Keith Familton, and his nephew, Christopher Maguire, as the executors and trustees of his will.

[2]    Mr Familton died during the  will  maker’s  lifetime.  The  other  executor, Mr Maguire renounced probate of the will on 25 January 2023. He subsequently, along with six other caveators, lodged a caveat against the grant of probate.

[3]Under the 2017 will the deceased makes the following bequests:

(a)A gift of $10,000 to his sister, Helen Margaret Familton (Helen), with a gift over to her three daughters if she predeceased him. She died on 18 February 2017, eight days after the will was executed, suffering from dementia.

(b)A gift of $1,000 to his goddaughter Judith Velicias if she is living at the date of his death.

(c)A gift of all articles of personal wear or adornment (including jewellery or watches) and all articles of household use or ornament which he owns at his death to Helen and her three daughters, Suzanne Heath, Robyn Hughes and Nicola Currie as “tenants in common in equal shares”.

(d)A gift of $30,000 equally to his niece Robyn and her husband, David, as “tenants in common in equal shares”.

(e)The balance of his estate is gifted to the following charities:

(i)the Salvation Army;

(ii)the Life Flight Trust;

(iii)the Starship Foundation; and

(iv)St John Ambulance

… “as tenants in common in equal shares”.

[4]His prior will executed on 29 February 2008 makes the following bequests:

(a)A gift of $10,000  to  his  sister  Helen  with  a  gift  over  to  her  three daughters if she predeceases him.

(b)A gift of $1,000 to his goddaughter Judith Velicias if she is living at the date of his death.

(c)A gift of all articles of personal wear or adornment (including jewellery or watches) and all articles of household use or ornament which he owns at his death equally to his sisters Helen and Judith Maguire (Judith).

(d)It gifts the residue of his estate after payment of debts, funeral expenses and testamentary expenses to be divided equally between his sisters Helen and Judith should they survive him, as tenants in common in equal shares, but with a gift over of their share to their respective children should either of them pre-decease him.

[5]    The caveators assert that there is a question to be answered as to whether the deceased had testamentary capacity when the 2017 will was executed. In asserting that they rely on the affidavit evidence of two family members, Robyn Hughes (Robyn), Helen’s daughter  and  Christopher  Maguire  (Chris),  one  of  Judith’s  four children.

[6]    Chris sets out the family relationships, including his relationship with the deceased, his uncle. He attests to a good relationship with his uncle, as was the deceased’s relationship with his other nieces and nephews.

[7]    Chris also sets out the various health issues which his uncle suffered from in the last 20 or so years of his life. He notes, in particular, that in 2016 and 2017 (close

to when he made his second will), the deceased lost both his sisters in quick succession and was quite sick and admitted to hospital twice with a painful right hand.

[8]    Chris annexes the death certificate of the deceased which showed he eventually died of pneumonia and frailty. However, it also records that the deceased suffered from vascular dementia caused by diabetes, hypertension, and atrial fibrillation. He says his uncle told him about his diabetes diagnosis in 2011 and expressed concern at the time about the link between that and dementia, something his uncle’s mother and sister Helen suffered from.

[9]    When the deceased was admitted to hospital in 2018, he undertook a cognitive assessment test, called a MOCA, where he scored 12 out of 30 which Chris understands to be indicative of dementia. Chris’ evidence is however that memory issues were presenting themselves well before 2018 and he gives examples of what he considers to be memory lapses or poor decision making prior to 2018.

[10]   Finally, Chris comments on what he describes as the “drastic change” between the 2017 will and the 2008 will. While he acknowledges that the major beneficiaries of the 2017 will are “worthy charities”, he says his uncle did not have a long or close relationship with any of these charities and by implication, was surprised that the will could change so markedly from the 2008 will.

[11]   Robyn, the deceased’s niece, outlines in her affidavit some of the support and assistance which she and her family gave her uncle in the years, particularly from early 2008 onwards. She continued to have contact with her uncle right up until his death in January 2023. She confirms her cousin Chris’ account of the various physical health issues that her uncle suffered from and the increasing difficulties he had managing at home on his own, including his ability to manage cooking and cleaning. She also notes that from around 2015 he appeared to be making inappropriate or unnecessary purchases, including from mail order catalogues, some of which were never opened.

[12]   Robyn recounts a specific instance of taking her uncle on a flight from Wellington to Christchurch to inter his younger sister Judith’s ashes in the family plot, in January 2017, and of him behaving quite inappropriately with a flight attendant.

His behaviour was sufficiently inappropriate that she felt the need to apologise on his behalf.

[13]   Her evidence is that from early 2017, her uncle was having major difficulty with his memory and his recall of dates were quite muddled. She also noted that he did not appear to understand that his sister, Robyn’s mother, had died which she found upsetting because her mother had been such a major part of his life.

[14]   She then recalls a particular problem in 2019 which she considered was indicative of her uncle’s declining mental health. She said he was a keen traveller and liked to travel to warm places. However, he arranged a trip to Singapore and when he got there, he was refused entry as he was unable to tell the immigration officials why he was there, where he was staying, or who he was. He also could not provide names or contact details for next of kin. He was therefore put on a flight back to Sydney, during which he soiled himself three times and was hospitalised on arriving. He then missed the flight back to Wellington and was located by police in Sydney and taken to the airport the following day. She said he had little or no recall of what had happened and no awareness of the distress he had caused.

[15]   The evidence filed to date is largely anecdotal. Nevertheless, there is some medical support for the deponents’ concerns given the death certificate records a diagnosis of vascular dementia. Of course, that does not demonstrate that the deceased was suffering from dementia at the time he executed the 2017 will, nor, even if he did, that it was sufficient to have caused him to lack testamentary capacity. However, it plainly raises concerns as to whether the testator had testamentary capacity and counsel for the caveators, Mr Tobin, submits that in the circumstances it would be unsafe to proceed without further enquiry.

Legal principles applying

[16]   Under s 61(d) of the Administration Act 1969 the Court may order that an order nisi be made absolute or discharged, or, alternatively, that the application for administration should be made in solemn form. The onus is on the caveator to “show cause” as to why the applicant should not administer the estate in accordance with the will. This simply requires the caveator to show sufficient reasons as to why, without

that further enquiry, the applicant should not administer the estate. Put another way, the caveator must present sufficient evidence to establish an element of doubt.1

[17]   The following principles have been regularly held to apply at a “show cause” hearing:2

(a)the onus is on the caveator to show why the order nisi should not be made absolute;

(b)to discharge the onus, the caveator has to raise sufficient grounds to establish either that the order nisi should be discharged or that a full enquiry is appropriate;

(c)the threshold for satisfying the Court that there are grounds for a full enquiry is low;

(d)the practice of the Court in a show cause hearing is not to decide the ultimate issue as to the validity of the will;

(e)the Court does not usually resolve disputed facts at a show cause hearing. Rather, if the caveator’s evidence is disputed, the Court normally orders the application for administration to proceed in solemn form; and

(f)if a caveator does not raise sufficient grounds to establish that a full enquiry should made into the matters raised by the caveator, the order nisi will usually be made absolute.

Discussion

[18]   Mr Cairns, for the applicant, submits that the caveators have not produced any evidence to rebut the normal presumption of competency and testamentary freedom that the deceased had at the time the last will was executed. He points out that the

1      Van der Kaap v Wilson CA97/04, 14 June 2005.

2      Re Antoniadis [2023] NZHC 775 at [19].

applicant filed for an order nisi after having reviewed the available medical evidence and forming the view that there was insufficient evidence to rebut the prevailing presumptions. That medical evidence was disclosed to the caveators prior to the applicant filing its application.

[19]Furthermore, the applicant submits that the affidavits filed by the caveators:

(a)contain irrelevant and speculative evidence and seek to adduce evidence relating to the deceased’s cognitive capacity after his last will was executed;

(b)contain medical evidence which is selective; and

(c)have not produced any evidence that shows cause against the testamentary freedom that the deceased held when he sought advice on and executed his last will through a professional legal advisor, nor have they advanced any evidence against the professional legal advisor.

[20]   I accept that the evidence presented to date falls short of demonstrating that the testator lacked testamentary capacity at the time he executed the 2017 will. Furthermore, no evidence is presented regarding what steps the legal advisor who prepared the will took to satisfy themselves that the deceased had testamentary capacity at that time. However, there is some evidence to suggest a diagnosis of dementia prior to the execution of the 2017 will and certainly clear evidence of dementia in the period subsequent to executing this will. There is also a disconnect between the ongoing support that various family members continued to give the deceased, right up until his death, and the deceased’s decision to largely, if not entirely, write them out of the will.

[21]   I am satisfied that the evidence to date raises sufficient questions regarding the deceased’s testamentary capacity to warrant further enquiry, including, as the applicant suggests, obtaining an expert retrospective medical opinion on the deceased’s testamentary capacity at the time the last will was executed. Evidence may also need

to be obtained from the legal adviser who prepared the 2017 will regarding the deceased’s testamentary capacity at that time.

[22]   It may be that that further evidence addresses the concerns raised by the caveators, or it may confirm the need for a formal determination as to testamentary capacity.

Conclusion

[23]Given the combination of:

(a)the deceased’s diagnosis of dementia;

(b)the deponents observations as to his increasing cognitive difficulties and poor decision making; along with

(c)the significant, and at this point unexplained, change to the beneficiaries of his will,

I am satisfied that the threshold on the caveators to raise sufficient grounds to warrant a full enquiry has been met.

[24]   Accordingly, at the telephone conference on 24 June 2024, I made the following directions:

(a)that the Court direct the applicant to file an application under s 61(d)(ii) of the Administration Act 1969 in solemn form to put all available evidence before the Court;

(b)that the applicant obtain an expert retrospective medical opinion to review and opine on the deceased’s testamentary capacity at the time the last will was executed to provide expert evidence to the Court; and

(c)that service be effected on:

(i)the caveators; and

(ii)the affected parties under the deceased’s last will being:

(a)  the Salvation Army New Zealand, a registered charity (CC37312) having its registered office at 202–204 Cuba Street, Te Aro, Wellington;

(b)  St John NZ Limited, a registered charity (CC43678) having its registered office at  St  John Ambulance Headquarters, 2 Harrison Road, Mt Wellington, Auckland;

(c)  the Starship Foundation, a registered charity (CC24272) having its registered office at 111 Grafton Road, Grafton,

Auckland; and

(d)  the Life Flight Trust, a registered charity (CC24283) having its registered office at 17 George Bolt Street, Rongatai, Wellington.

[25]   I also direct that the applicant is to advise the Court when all those steps are taken, in order that a case management conference is then scheduled to put in place a timetable for the exchange of any pleadings, evidence and submissions.

Costs

[26]   Costs are reserved until the application for probate in solemn form is determined.

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt Wilkinson Rodgers Lawyers, Dunedin