Public Trust v Bucknell

[2023] NZHC 1465

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-110

[2023] NZHC 1465

IN THE MATTER

of the Estate of Gabrielle Ellen Balch

BETWEEN

PUBLIC TRUST

Applicant

AND

RUTH ELIZABETH BALCH BUCKNELL

First Respondent

AND

PUBLIC TRUST as administrator of the Estate of HELEN MAREE LYE

Second Respondent

AND

JILLIAN KAYE BALCH

Third Respondent

Hearing:	On the papers
Judgment:	13 June 2023

JUDGMENT OF HARLAND J

Introduction

[1]                  This judgment concerns an application by the Public Trust for a grant of probate in solemn form. It concerns the estate of Gabrielle Balch (“Mrs Balch”) and, specifically, which of her two last known Wills should be admitted to probate. The Public Trust is the intended executor of Mrs Balch’s last two Wills.

PUBLIC TRUST v BUCKNELL [2023] NZHC 1465 [13 June 2023]

[2]                  There is also an application without notice for orders dispensing with service of the substantive application on the respondents as all have consented to it.1 I grant the application for orders dispensing with service.

[3]I now address the application for the grant of probate in solemn form.

Background

[4]                  Mrs Balch died on 10 August 2022 aged 94. At the time of her death, she was living in dementia level rest home care, where she had been since December 2017.

[5]                  The estimated value of her estate is $1,000,000.00, comprising of bank accounts and term deposits with ANZ, Westpac and BNZ banks, and a managed fund portfolio invested by the Public Trust.

[6]                  Mrs Balch’s last known Will is dated 24 February 2016 (“the 2016 Will”). Her previous known Will was dated 18 January 2005 (“the 2005 Will”). Both Wills:

(a)appoint the Public Trust as executor;

(b)leave the residue to her husband if he survived her by 30 days;

(c)contain further gifts of residue that leave an equal third share to each of her surviving children; and

(d)set out substitution clauses if any of the surviving children have pre- deceased her.

[7]                  The only point of difference between the two Wills is in one of the substitution clauses. In the 2005 Will, if Mrs Balch’s daughter Ruth had pre-deceased her, then Ruth’s children would share equally in her part of the estate. In comparison, in the 2016 Will, one of Ruth’s sons, Jesse Bucknell, had passed away and his name was replaced with Mrs Balch’s great-grandson, Carter Bucknell.

1      Affidavit of Richard Sam Hocking, sworn 10 March 2023, Exhibit 1.

[8]                  Mrs Balch’s husband pre-deceased her, and one of her children, Helen Lye, died on 18 December 2022. Because this was after Mrs Balch had died, Helen’s estate is entitled to receive her share. The Public Trust is the administrator of Helen’s estate and is a respondent alongside Mrs Balch’s two surviving children. Her three children survived her, therefore, the substitution clauses in both Wills are not invoked. However, the change outlined at [7] is a logical change to the 2016 Will.

[9]                  Because dementia was noted on the death certificate, the Public Trust had to determine whether Mrs Balch had the requisite testamentary capacity at the time of executing her last Will. The Public Trust obtained an expert retrospective assessment of testamentary capacity from Dr Cheung. This assessment notes that concerns were first raised about the possibility of Mrs Balch suffering from dementia in November 2012. She was assessed as having a cognitive impairment of mild severity at that time, and further tests in December 2016 and September 2017 showed this had increased to moderate severity. The assessment notes that Mrs Balch was moved into rest home level residential care in September 2017, treated under the Mental Health Act in December 2017, and subsequently moved into dementia level rest home care.

[10]              The assessment concludes that it was more than likely Mrs Balch had mild to moderate dementia on 24 February 2016 and therefore the presumption of capacity regarding the 2016 Will could not be applied. The assessment further concluded there was insufficient medical evidence to determine whether she had testamentary capacity at the time of signing the 2016 Will.

The application

[11]              Based on the results of the expert assessment of Mrs Balch’s testamentary capacity, the Public Trust now makes an application in solemn form under r 27.6(2) of the High Court Rules (“the Rules”).

[12]              Counsel for the Public Trust submits both Wills were drafted and executed by its staff who are competent and well-versed in dealing with Wills and elderly clients. No concerns were recorded in respect of Mrs Balch’s capacity at the time either Will was drafted and signed.

[13]                The outcome of the estate distribution is the same under either Will and the respondents have provided consent forms for this application. Therefore, the Public Trust seeks an order on the papers that this Court make a grant of probate in solemn form of the Will dated 24 February 2016 or of the Will dated 18 January 2005. It also seeks an order for the costs of and incidental to this proceeding.

Analysis

Testamentary capacity

[14]              The question for this Court is which of Mrs Balch’s two Wills should be probated as the last valid Will. The elements of testamentary capacity are summarised in the classic statement in Banks v Goodfellow:2

As to the testator’s capacity, he must, in the language of the law, have a sound and disposing mind and memory. In other words, he ought to be capable of making his will with an understanding of the nature of the business in which he is engaged, a recollection of the property he means to dispose of, of the persons who are the objects of his bounty, and the manner in which it is to be distributed between them…

[15]              In other words, the testator “must be of sound mind, memory and understanding”.3 In Woodward v Smith, it was stated:4

(2)       It is essential to the exercise of such power that a testator:

…

[iii] be free of any disorder of the mind which would poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties; …

(emphasis added)

[16]              In probate proceedings, testamentary capacity does not have to be established unless there is some evidence raising the lack of capacity as an issue, whereby the onus is then on those seeking probate of the Will to satisfy the Court the testator did have testamentary capacity.5 I must therefore be satisfied, on the balance of

2      Banks v Goodfellow (1870) LR 5 QB 549 at 567, [1861-73] All ER Rep 47 at 57.

3      Re Rhodes (dec’d) HC Wellington CP25/02, 7 March 2002 at [38].

4      Woodward v Smith [2009] NZCA 215 at [19].

5      Public Trust v Dollimore [2018] NZHC 3316 at [8], citing Bishop v O’Dea CA 120/99, 20 October 1999 at [7].

probabilities, that Mrs Balch had the requisite testamentary capacity at the time she executed the 2016 Will.6

[17]              Mrs Balch’s testamentary capacity is plainly an issue here. Mrs Balch had dementia of a mild to moderate severity at the time of the 2016 Will and Dr Cheung, in the expert assessment, was unable to apply the presumption of testamentary capacity. Her scoring on the Montreal Cognitive Assessment, out of a score of 30, decreased from 26 in 2012 to 23 in 2015, 18 in 2016, and 14 in 2017. This shows a steady decline in her mental capacity over the period in which the 2016 Will occurred and, although Mrs Balch was not in rest home care at the time of the 2016 Will, she was moved into dementia level rest home care by the end of 2017.

[18]              Dr Cheung did note in his conclusion that it would be critical to check with the person who prepared the 2016 Will whether they documented any reasons for the change that was made. The Public Trust has provided this information, that being a response to a previous beneficiary passing away. I note also the submission from the Public Trust that witnesses to the 2016 Will did not raise or record any concerns about Mrs Balch’s capacity at the time the 2016 Will was signed.

[19]              Despite this, in Dr Cheung’s assessment, he states the concerns Mrs Balch’s family had in November 2012, which included repeatedly asking the same question and difficulty in understanding or following instructions and conversations. By October 2016, these concerns were ongoing, although not “significantly worse” than the year before. I find these difficulties indicate Mrs Balch’s capacity to understand aspects of her day-to-day life was compromised as a result of her dementia in the years prior to the 2016 Will. It is likely this progressed by the time she made the change to her Will, albeit a logical one, in 2016.

[20]              Given the presumption of testamentary capacity is not applicable here, the onus is thus on the Public Trust to satisfy this Court Mrs Balch had such capacity. The Public Trust have adopted a neutral approach in this matter and left it a matter for this Court to determine.

6 At [95].

[21]              Based on Dr Cheung’s expert assessment, I find it is more probable than not that Mrs Balch was not of “sound mind, memory and understanding” to the standard required at the time of the 2016 Will. This is particularly so given that this assessment forms the majority of the evidence before this Court, and that all parties wish to avoid incurring any further costs in these proceedings. Relying upon that assessment, I cannot be satisfied Mrs Balch had the requisite testamentary capacity in 2016. Therefore, the 2016 Will is invalid and the 2005 Will is Mrs Balch’s last valid Will.

Costs

[22]              The executor’s task is to seek probate and allow the Court to decide which Will is Mrs Balch’s last valid Will:7

It is the duty of an executor of any will which he believes may be the valid last will of the testator to propound it and to take all proper steps to prove its validity. It is not his duty to decide, in any doubtful case, whether or not he should do so, it being the function of the Court to resolve such doubt. If he is not prepared to propound a will which appoints him executor he should renounce his right as such. If a person is named as executor in more than one will and he is uncertain which is the last valid will he should propound each one, as alternatives.

[23] I accept it was reasonable for the Public Trust to take the view that Mrs Balch’s testamentary capacity was an issue for the reasons outlined at [17]. The Public Trust has taken a neutral approach to this matter. It has placed the two Wills before the Court on the basis of Mrs Balch’s capacity issue. This aligns with the view of Simon France J in Public Trust v Dollimore, where he held that all Wills should be advanced to enable the Court to determine which one should be probated, and that an executor should not take an adversarial stance.8 In that case, the Public Trust was awarded only one third of its actual costs due to the approach it had taken.

[24]              In comparison, I consider all expenditure in relation to this matter has been properly incurred by the Public Trust. I am satisfied that the costs for this proceeding should be met from the estate of Mrs Balch.

7      Re Young, Hobbs v Christchurch City [1968] NZLR 1178 at 1179; see also, Re Watson [2014] NZHC 874 at [10]-[13].

8      Public Trust v Dollimore [2019] NZHC 607 at [34] and [38].

Conclusion

[25]I make the following orders:

(a)a grant of probate in solemn form of the Will of Gabrielle Ellen Balch dated 18 January 2005; and

(b)the costs of this proceeding are to be met from the estate of Gabrielle Ellen Balch.

Harland J