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Which case won?

Can the relatives be cut out of a will and everything left to the neighbours instead? Which case won?
17 Nov | Which Case Won

Can the relatives be cut out of a will and everything left to the neighbours instead? Which case won?

by Ian Graham, Forster

The Facts

Niece named sole beneficiary under aunt’s will

In 1996 an elderly aunt made a will, in which she left $100,000 to each of her sisters, and the rest of her estate to her niece.

The sisters pre-deceased the aunt, making the niece the sole beneficiary of the aunt’s estate, should she die.

The aunt also had one other niece and two nephews.

Aunt diagnosed with dementia

In December 2004, the aunt was admitted to hospital with a bowel obstruction.

At the time of her hospitalisation, the aunt had not seen her nieces and nephews in many years. Nor had she ever had a close relationship with them.

However, the nieces and nephews re-emerged during her hospitalisation.

While in hospital, the aunt was under the care of a geriatrician who diagnosed her with moderately severe dementia.

Guardianship Tribunal appoints guardian and financial manager for aunt

The aunt’s niece applied to the Guardianship Tribunal, seeking orders for the appointment of guardians and a financial manager for her aunt.

The Tribunal granted the application, appointing the niece as guardian, along with another niece and nephew.

The niece’s son-in-law was appointed financial manager.

In February 2004, the aunt was discharged to a nursing home against her wishes, and lost access to and control of her money.

Aunt revokes previous will and makes new will in favour of neighbours

The aunt was angry about the Guardianship Tribunal’s decision.

She was also furious with her niece, as she blamed her for losing access to her money and for moving her into a nursing home.

She also suspected her niece’s true motive was to protect her inheritance under the 1996 will, now worth over $12.5 million.

In March 2005, the aunt made a handwritten will revoking all previous wills and gave instructions to a solicitor, resulting in an informal testamentary document.

In April 2005, she made a will that was duly witnessed and revoked all prior wills.

In the new will, she named Mr and Mrs G as her beneficiaries. They were a married couple who lived next door to the aunt.

Mr G subsequently predeceased the aunt, leaving Mrs G as the sole beneficiary of the aunt’s will.

Aunt dies and argument ensues over which will should be granted probate

On 17 September 2009, at the age of 95, the aunt died.

Mrs G applied to the Supreme Court of NSW for a grant of probate in relation to the April 2005 will.

The niece defended this application, seeking a grant of probate in relation to the 1996 will. She argued that her aunt did not have testamentary capacity to revoke her 1996 will. Nor did she have testamentary capacity to make the April 2005 will in favour of Mrs G.

The principal issue for the court to decide was whether the aunt had testamentary capacity.

casea
The case for the niece
  • In order for my aunt to validly revoke her 1996 will and make the 2005 will, it is a legal requirement that she had the mental, or testamentary, capacity to do so.
  • My aunt was unwell with dementia at the time she took these actions.
  • For some years before her admission to hospital in 2004, my aunt had not attended to her taxation obligations. She owed personal tax of $174,000 and company tax of $128,000.
  • On my aunt’s admission to hospital, the ambulance officer noted that she presented with weight loss and hadn’t eaten for 12 days.
  • In hospital, she gave the year as 1994 and could not remember the name of the Prime Minister or the year she was born.
  • The geriatrician whose care she was under said that her conversations were disjointed, irrational and at times irrelevant to the questions asked.
  • After much time spent with my aunt, he concluded that she had a marked impairment of the frontal lobe executive function, the area that would be specifically required for testamentary capacity. He said she was suffering from advanced dementia, needed 24-hour care, and that the best solution would be a good nursing home.
  • When my aunt left hospital, Mr and Mrs G took unfair advantage of her diminished mental state, even procuring the services of the solicitor who drafted the 2005 will in their favour.
  • My aunt’s concerning behaviour is what prompted me to seek the appointment of a guardian. Instead of seeing me as acting in her best interests though, my aunt believed that I was attempting to improperly obtain her assets for myself. The geriatrician said he considered that my aunt had a delusional paranoid belief that I was involved in a conspiracy to steal her title deeds, her mail and her money.
  • The Guardianship Tribunal also noted my aunt’s poor mental state, noting that her presentation there was consistent with medical evidence that she could be paranoid and suspicious.
  • Given the above, my aunt clearly did not have the requisite testamentary capacity to revoke her will and make a new one.
  • Accordingly, the court should issue a grant of probate authorising the executor of the 1996 will to deal with my aunt’s estate in accordance with her wishes in that will.
caseb
The case for Mrs G
  • My husband and I cared for our neighbour, the aunt, when her family showed no interest in her. By 2004, they hadn’t seen her in over 12 years. We would regularly check on her and help her with her shopping. In fact, I was the one who called the ambulance when she was unwell in 2004.
  • Notwithstanding what the geriatrician said, the aunt did not have severe dementia. According to a neurologist who also examined her, her symptoms could be explained by a vitamin B12 deficiency and temporary sensory impairments suffered in hospital. The aunt also had very poor vision and was somewhat deaf, which according to the neurologist, would cause disorientation when out of her familiar environment.
  • The neurologist also performed a variety of diagnostic tests on the aunt. These included a Frontal Assessment Battery, which consists of tasks found to be sensitive to impaired frontal lobe functioning. The aunt scored 17/18, which is normal.
  • Nor was the aunt delusional in thinking that her niece had ulterior motives. While the aunt was in hospital, her niece ransacked her house, removing important documents, including title deeds and a copy of the aunt’s 1996 will. The niece only applied to the Guardianship Tribunal after this theft, because she discovered that she was the sole beneficiary of the 1996 will and stood to inherit $12.5 million dollars.
  • The niece’s son-in-law, who was appointed as financial manager by the Guardianship Tribunal, was actually abusing his position and taking the aunt’s money. He left her without adequate funds, preventing her from writing cheques as she was accustomed to. He also charged her professional fees for his services, which is something he had advised the Tribunal he would not do.
  • The son-in-law also improperly used the aunt’s money, transferring her assets into his own name, including a bank account. He then gave his wife and daughter a debit card to this account, which they used for their own purposes, including buying Max Brenner Chocolates and alcohol from Liquorland.
  • The aunt’s decision to revoke her 1996 will was clearly not driven by dementia, but rather by her justifiable anger towards her niece. It was also entirely reasonable that she would choose to leave her property to me in her 2005 will, given that she had no real connection with her nieces and nephews.
  • The court should conclude that the aunt had testamentary capacity to revoke her 1996 will and to make the 2005 will. It should issue a grant of probate authorising the executor of the 2005 will to deal with the aunt’s estate in accordance with her wishes in that will.

So, which case won?

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Expert commentary on the court's decision

Ian GrahamLawyer
“The case provides a cautionary tale to those hoping to take a cut of from a wealthy relative’s estate. In particular, attempts to undermine belief in a testator’s testamentary capacity through allegations of ‘paranoia’ and ‘delusions’ must be substantiated, as the court will carefully consider the motivations and the conduct of the claimant.”
Supreme Court finds in favour of Mrs G

In Gray v Hart & Ors [2012] NSWSC 1435, the Supreme Court of NSW found in favour of the neighbour, Mrs Gray, awarding the entire estate of the deceased aunt, Mrs Harris, to her.

The court found that Mrs Harris had testamentary capacity to revoke her 1996 will that named her niece, Coralie Hart, as beneficiary and to make a new will in favour of the Grays.

Test for determining testamentary capacity

The onus was on Mrs Gray to show that Mrs Harris had testamentary capacity to revoke the 1996 will and to make the 2005 will.

The test to be applied in assessing testamentary capacity was as set out in Banks v Goodfellow (1870) LR 5 QB 549.

First, Mrs Gray had to establish that Mrs Harris understood the nature of the act of making a will and the effect of making a will.

Second, she had to establish that Mrs Harris understood, at least in general terms, the nature and extent of the property of which she was disposing.

Third, she had to establish that Mrs Harris was aware of those who might reasonably be thought to have a claim upon her testamentary bounty and the basis for and nature of such claims.

Finally, she had to establish that Mrs Harris had the ability to evaluate and discriminate between the respective strengths of the claims of such persons.

Differing expert opinions on aunt’s testamentary capacity

The views of whether Mrs Harris had testamentary capacity diverged considerably between the hospital geriatrician, Dr Beveridge, the neurologist, Professor Watson, and neuropsychologist, Ms Roberts.

The court also considered the evidence of the solicitors who took Mrs Harris’s instructions for her will, and for her largely unsuccessfully application to revoke the Guardianship Tribunal’s orders.

Court critical of actions of niece and her son-in-law

The court found Coralie Hart to be an unsatisfactory witness, with numerous inconsistencies between her evidence in cross-examination and her affidavit evidence. It also found her conduct in removing documents from Mrs Harris’s house without authority to be discreditable.

The court also found that Mrs Hart’s son-in-law, Mr Swindells, was instrumental in bringing the applications to the Tribunal. Further, his motive for doing so was to obtain control of Mrs Harris’s finances to protect his mother-in-law’s inheritance.

The court also noted that in the time period between closing Mrs Harris’s cheque account in March 2005 and late May 2005, Mr Swindells did not provide Mrs Harris with any of her money. Instead she had to borrow money from Mr and Mrs Gray for essentials.

Court rejects geriatrician’s view that aunt was delusional

If a testator is suffering from a delusion at the time of making their will, this would prevent them from satisfying the testamentary capacity test in Banks v Goodfellow.

For the purposes of testamentary capacity, the courts have defined a delusion as “a fixed an incorrigible false belief which [the testatrix] could not be reasoned out of” (Bull v Fulton (1942) 66 CLR 295 at 339). A false belief is not automatically delusional.

Dr Beveridge concluded that Mrs Harris suffered from the delusion of “paranoid ideation regarding family members”, as he believed her relatives to be acting in her best interests.

The court disagreed with Dr Beveridge, finding that Mrs Harris’s beliefs were not unreasonable beliefs to hold. Whether her beliefs were mistaken or not, it was not an irrational view, and Dr Beveridge’s conclusion that it showed paranoia, was therefore unfounded.

Furthermore, the evidence showed that some of Mrs Harris’s suspicions were not only rational, but also correct. For example, her estate was in fact misapplied under Mr Swindells’ financial management, with spending at an array of establishments, such as Lululemon, Witchery and David Jones, while Mrs Harris was bedridden following a stroke in 2017.

Court accepts neurologist’s evidence of testamentary capacity

The court ultimately preferred the evidence of Professor Watson and Ms Roberts to that of Dr Beveridge.

The court agreed with Professor Watson’s opinion that the geriatric medicine staff at the hospital were fixed on a particular diagnostic model – namely dementia.

Dr Beveridge had not accurately assessed the cause of Mrs Harris’s apparent incapacity while in hospital. Her incapacity was due not to dementia, but rather to being deficient in vitamin B12, not being provided with adequate nutrition and suffering from sensory deprivations, including very poor vision and being somewhat deaf.

The court also accepted Professor Watson’s evidence that none of Mrs Harris’s medical conditions, nor her general mental condition, was likely to have affected her ability to understand the nature of the act of making a will, or its effect.

Nor would these conditions affect her ability to understand the extent of the property of which she was disposing, her ability to identify the claims which she sought to consider, or her ability to evaluate and discriminate between the strength of these claims.

Cautionary tale for those seeking to take advantage of a wealthy relative’s estate

This case provides a cautionary tale to those hoping to take a cut from a wealthy relative’s estate.

In particular, attempts to undermine belief in a testator’s testamentary capacity through allegations of “paranoia” and “delusions” must be substantiated, as the court will carefully consider the motivations and the conduct of the claimants.

It is also a reminder that not including a person in a will due to beliefs held in regard to their motivations, or because of poor behaviour, will not necessarily be grounds for a court to render a will void.

Age related feebleness not synonymous with lacking testamentary capacity

This case also highlights that just because someone is less sharp in their old age than they used to be, it doesn’t mean that they lack testamentary capacity.

As the court quoted Kirby P saying in Estate of Griffith:

In judging the question of testamentary capacity the courts do not overlook the fact that many wills are made by people of advanced years. In such people, slowness, illness, feebleness and eccentricity will sometimes be apparent – more so than in most persons of younger age. But these are not ordinarily sufficient, if proved, to disentitle the testator of the right to dispose of his or her property by will… Were the rule to be otherwise, so many wills would be liable to be set aside for want of testamentary capacity that the fundamental principle of our law would be undermined and the expectations of testators unreasonably destroyed.

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.
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