Turk v Turk

[2021] NZHC 1269

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2019-485-614819

[2021] NZHC 1269

IN THE MATTER

of the Estate of JOHANNES GERARDUS TURK

BETWEEN

GERARDUS JOHANNES TURK AND

JACQUELINE ROBINSON as Executors Plaintiffs

AND

RONALD ADRIANUS TURK

First Defendant

GERARDUS JOHANNES TURK AND

JACQUELINE ROBINSON as Beneficiaries Second Defendants

CIV-2021-485-156

BETWEEN

RONALD ADRIANUS TURK
Applicant

AND

THOMAS CHARLES MONTAGUE, GERARDUS JOHANNES TURKS, AND

JACQUELINE ROBINSON, as Executors of the Estate of Johannes Gerardus Turk

Respondents

Hearing:

21 April 2021

Counsel:

J K Mahuta-Coyle for Gerardus Johannes Turk and Jacqueline Robinson as Executors

A S Butler and K H Lawrence for Ronald Adrianus Turk P W Michalik for Gerardus Johannes Turk and Jacqueline Robinson as Beneficiaries

Judgment (Results):

21 April 2021

Judgment(Reasons):

1 June 2021

TURK AND ROBINSON v TURK AND ORS [2021] NZHC 1269 [1 June 2021]

REASONS JUDGMENT OF ELLIS J

[1]    On 21 April 2021 I issued a “results” judgment granting probate in solemn form in respect of the will of Johannes Gerardus Turk (John) dated 23 December 2014.1 I also made a number of ancillary orders and directions.

[2]This judgment briefly sets out my reasons for the grant of probate.

Background

[3]John and his wife had six children.

[4]    In 2008 there was a car crash that caused the death of John’s wife and caused him to suffer a serious head injury.

[5]    John died on 21 September 2019. He executed his last will in December 2014. The named executors are John’s son Gerardus (Gerald), his daughter Ms Jacqueline Robinson, and a lawyer, Mr Montague.

[6]    The 2014 will contained a significant change from John’s earlier wills, of which there  were 10 dating back to 29 June 1990 (the penultimate one  was dated  23 May 2012). In particular, the 2014 excluded his son Ronald in a number of respects, including as a residuary beneficiary of the estate. Ronald’s children are also excluded from any entitlement.

[7]    The will acknowledged that Ron remained contractually entitled to a number of shares in Turk’s Poultry Farm Ltd (TPFL).

[8]    Ron lodged a caveat against John’s estate, claiming that John lacked testamentary capacity when cutting him out. The Court made an order nisi for the grant of administration to the executors. But on 30 June 2020, Cull J declined to make the order absolute. On the basis of the evidence filed, she found that there was a

1      Turk v Montague [2021] NZHC 856.

tenable issue about whether Ron lacked testamentary capacity.2 She ordered that the application for probate be made in solemn form, with a fully contested hearing to follow.

[9]    Just before that hearing was to take place, as a result of mediation, the parties agreed that the application could be dealt with by way of formal proof. Although Ron no longer opposed the grant of probate, the question of John’s testamentary capacity remained unresolved.

[10]   On the basis of the evidence (which included evidence filed after Cull J’s decision), I was satisfied on the balance of probabilities that the requisite capacity existed at the time John made the December 2014 will. This judgment sets out the reasons for that view.3

The testamentary capacity threshold

[11]   The long-established principles relating to testamentary capacity were reiterated by the Court of Appeal in Woodward v Smith:4

(1)        Because it involves moral responsibility, the possession of the intellectual and moral faculties common to our nature is essential to the validity of a will.

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

(i)understands the nature of the act and its effects; and also the extent of the property of which he is disposing;

(ii)is able to comprehend and appreciate the claims to which he ought to give effect;

(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; that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.

(3)        Unsoundness of mind arising from want of intelligence caused by defective organization, or by supervening physical infirmity or the decay of

2      Turk v Turk [2020] NZHC 1495.

3      Ferreira v Stockinger [2015] NZHC 2916 at [34]–[36].

4      Woodward v Smith [2009] NZCA 215, reaffirmed more recently in Loosely v Powell [2018] NZCA 73.

advancing age, as distinguished from mental derangement is equally cause of incapacity. But

(i)though the mental power may be reduced below the ordinary standard, yet if there be sufficient intelligence to understand and appreciate the testamentary act in its different bearings, the power to make a will remains.

(ii)It is enough if the mental faculties retain sufficient strength fully to comprehend the testamentary act about to be done.

(4)        It is not necessary that the testator should view his will with the eye of a lawyer, and comprehend its provisions in their legal form. It is sufficient if he has such a mind and memory as will enable him to understand the elements of which it is composed, and the disposition of his property in its simple forms.

(5)        In deciding upon the capacity of the testator to make his will, it is the soundness of the mind, and not the particular state of the bodily health, that is to be attended to. The latter may be in a state of extreme weakness, feebleness or debility and yet he may have enough understanding to direct how his property shall be disposed of; his capacity may be perfect to dispose of his property by will, and yet very inadequate to the management of other business, as, for instance, to make contracts for the purchase or sale of property.

(6)        A testator who has reflected over the years on how his property should be disposed of by will is likely to find it less difficult to express his testamentary intentions than to understand some new business.

(7)        Testamentary capacity does not require a sound and disposing mind and memory in the highest degree; otherwise, very few could make testaments at all.

(8)        Nor must the testator possess such capacity to the same extent as previously. His mind may have been in some degree weakened, his memory may have become in some degree enfeebled; and yet there may be enough left clearly to understand and make a sound assessment of all those things, and all those circumstances, which enter into the nature of a rational, fair, and just testament.

(9)But if that standard is not met, he will lack capacity.

This case

[12]   In her caveat decision Cull J said that Ron’s evidence had raised doubts in her mind about John’s capacity because:

(a)John’s wills between 1990 and 2012 were generally consistent, whereas the 2014 will involved significant change;

(b)John’s head injury in 2008 caused cognitive defects that were supported by medical records from 2012–2015, and enduring powers of attorney (EPOA) were activated from 2008;

(c)John’s mood swings and actions were irrational in a commercial context;

(d)by 2017 John was suffering from dementia; and

(e)the 2014 medical certificate (which concluded that John did have capacity) lacked detail.

[13]   Each of these reasons are threaded into competing narratives about John’s behaviour and decisions in the lead-up to amending his will in 2014. The backdrop of these narratives is a long-standing business conflict between John and Gerald on the one hand, and Ron and other management on the other. The merits of either side of that conflict need not be determined. The focus must remain on whether John possessed testamentary capacity at the time of amending his will in 2014.

The evidence

Ron’s narrative

[14]   The thrust of Ron’s evidence is that John lost cognitive function as a result of the 2008 crash, and that it then declined further due to stress and age. An enduring power of attorney (EPOA) for John was executed after the crash, with Gerald as attorney—Ron says that this alone is evidence of a cognitive impairment. Ron’s evidence notes that John no longer made decisions for TPFL after the accident, and that he was “unable to perform complex tasks at TPFL and was allocated various simple tasks and duties”.

[15]   John was upset with the direction and governance of TPFL, including the engagement of consultants and the changes that followed. Ron says that John became increasingly distressed and increasingly unable to “regulate himself or his actions or reactions”. Ron’s evidence points to a number of instances where John had yelled at

employees or himself, leading to staff complaints. All of this, Ron says, constituted a “marked change” from John’s behaviour before the crash. And the 2014 change to his will, disinheriting Ron, was part of this cognitive decline and itself was evidence that John lacked testamentary capacity at the time.

[16]   Ron’s evidence was supported by an affidavit from Mr Kopruch, a management consultant engaged by Ron. He describes John as angry, frustrated, and confused and confirms he was only given simple tasks. He deposed that John was hostile to him for being German.

The executors’ narrative

[17]    The executors reject the notion that John suffered a cognitive decline after the crash and say that John substantially recovered from his brain injury. The EPOA constituted standard practice in the circumstances following the crash, and John had resumed managing his own affairs by the time he returned to work in 2009. The executors say that John’s changed behaviour can be entirely explained by unrelenting business conflicts between him and Ron, who, John believed, was mismanaging TPFL. They say that John had expressed these complaints and concerns even before the 2008 crash. And rather than John being “unable to perform complex tasks” at TPFL, he was prevented from performing them, by Ron.

[18]   So, the executors say, John was effectively side-lined in the management of a company that he had founded, and of which he remained the majority shareholder. He was forced simply to watch it operate—in his opinion—poorly. He had tried to have Ron removed as director of TPFL but had not succeeded. John’s amendment to the will in 2014 was the culmination of years of conflict between him and Ron. It was driven by hurt and frustration but was rational in the circumstances.

[19]   In addition, the executors explain that John’s emotional behaviour was consistent with his character, particularly given his continued and growing frustrations. His hostility towards Mr Kopruch was because he had old-fashioned business ideas that did not include engaging expensive consultants, who (John thought) were “all talk and fine ideas”, but ultimately unproductive.

[20]   As well, Mr Montague gives specific evidence about his professional dealings with John and, in particular, around executing the 2014 will. He says:

(a)He had done legal work for John over many years, and often heard complaints about Ron, including before the 2008 crash. For example, John did not like it that Ron had his own separate business interests that conflicted with TPFL.

(b)John did not think Ron had what it took to run TPFL as CEO. He felt he was treated with disrespect, despite being a 76 per cent shareholder.

(c)John told him he regretted having signed the agreement ultimately giving Ron a majority  shareholding  and  wanted  to  terminate  it.  Mr Montague had advised John that he was bound by the agreement.

(d)He had no doubt about testamentary capacity in 2014, and would not have proceeded if he had thought otherwise. John gave detailed, specific and completely coherent instructions, which were consistent with how John had told him he felt about Ron over the years.

(e)He had mistakenly failed to include a clause that explained that John considered the majority shares left to Ron to be a substantial testamentary gift.

(f)Despite being given several cautions, John was adamant about his decision.

Medical evidence

[21]   The medical records after the crash in 2008 confirm that John suffered a brain injury. The hospital discharge summary (dated a few weeks after the crash) records that he was experiencing some decreased cognition. There are notes that John struggled with calculations, sequencing, and word finding during his time in hospital. John was not to drive, and he was apparently not to be involved in business decision-

making. It records that the EPOA was to apply, and that John’s family would support him. I return to this later.

[22]   In 2014, there was a specific medical assessment of John’s testamentary capacity by Dr Sutton. It seems that this followed a recommendation by John’s lawyer, Mr Montague, after John had expressed his intention to amend his will. Dr Sutton’s certificate is brief. It states:

Johannes Turk, was seen and examined by me on 06 Nov 2014. He does exhibit the occasionally hesitant speech patterns of an octogenarian, but is well oriented and cognitively intact. In my opinion, Mr Turk, is mentally competent for managing his legal and business affairs.

[23]   Next, there are later hospital records from 2015 when John was admitted for chest pain, vomiting, and possible delirium; the notes say: “general decline in function over last year – now mostly sits in chair and watches TV”. Another from 2017 records “severe dementia”, without further elaboration.

[24]   But there is also a new affidavit containing the expert evidence of Dr Robinson, who reviewed John’s medical history with a view to assessing his cognitive impairment or decline. It is this evidence that I consider tips the balance here.

[25]   Overall, Dr Robinson’s evidence supports Dr Sutton’s 2014 assessment. He notes that:

(a)John signed a Do Not Resuscitate Order on 5 July 2017, which indicated the hospital’s belief at the time that John was mentally competent;

(b)it was standard medical practice in 2008 to activate any existing EPOA after a significant head injury;

(c)on 28 May 2009, John underwent a neuropsychological assessment that, in summary, stated: “Mr Turk is currently capable of making decisions about his will” (which is consistent with Gerald’s evidence that John resumed managing his own affairs in 2009); and

(d)the 2017 record of “severe dementia” does not contain an indication of what testing, if any, was undertaken and was, in any event, several years after the execution of the 2014 will.

[26]Dr Robinson’s evidence concludes:

For these reasons, my conclusion is that nothing among the medical information provided, gives rise to any serious question that the deceased suffered from cognitive decline in December 2014.

Discussion

[27]   I reiterate that I need not and do not determine whether John was right in believing that Ron had mismanaged TPFL. But based on the narrative evidence, I think it is fair to say that TPFL’s increasingly precarious financial position was a sufficiently rational basis for John’s perception that the company was suffering from management problems. And, in turn, that belief potentially provides a rational explanation for aspects of John’s behaviour, as time went on. TPFL was a company that John had established and was both financially and emotionally invested in. In my view, his upset at its decline does not, without more, constitute compelling evidence of diminished or diminishing capacity.

[28]   The medical evidence does not cause me to alter that view. Whatever may have been the position in 2017 (and as Dr Robinson points out, there is little by way of detail on that front), I do not consider there is any real medical support for a finding of a material lack of capacity in December 2014. While I acknowledge that, following the crash, John may have been a little slower or less acute than he had been, that does not suffice. Both Mr Montague’s evidence and the 2014 medical certificate clearly indicate that John well understood:

(a)what he was doing and what the effect of the new will would be; and

(b)the extent of the relevant property of which he was disposing.

[29]   I place little weight on the argument that the change in the 2014 will somehow, itself, pointed to a lack of capacity or understanding. As I have said—and regardless

of who was at fault for TPFL’s decline—John had a rational reason for making the change.5

[30]   In short, I was satisfied that probate ought to be granted in solemn form, and I made an order in my results judgment accordingly.6

Rebecca Ellis J

Solicitors:

Todd Whitehouse, Levin

Greg Kelly Law Limited, Wellington Taverner Keys & Co, Carterton

5      Loosely v Powell [2018] NZCA 73 at [31]–[35].

6      Turk v Montague, above n 1, at [4].