1 Wills for Minors: Ss16 and 17 of the Act

The Succession Act 2006 (NSW) (Act) gives the court power to make wills on behalf of two classes of people:

1. Minors; and

2. Those who lack testamentary capacity.

This paper will briefly look at the statutory framework and the relevant cases for both classes.

1 Wills for Minors: ss 16 and 17 of the Act

i. The law

A minor is a person under the age of 18 years. See s 3 of the Act and s 21 of the Interpretation Act 1987 NSW. Generally, a minor cannot make, alter or revoke a will unless an exception applies under s 5(2) of the Act. Those exceptions are:

 the will is made, altered or revoked in contemplation of marriage and the marriage takes place;

 the minor is married; or

 the minor can revoke a will made in contemplation or after a marriage.

Section 16 of the Act allows for a minor or a person on behalf of the minor to make an application for the court to make or alter a will in specific terms approved by the court. This provision, therefore, provides further exception to the rule that a minor cannot make a will.

Critically in these applications, there needs to be evidence of the following:

 the minor understands the nature and effect of the proposed will or alteration or revocation of the will or part of the will and the extent of the property disposed of by the will;

 the proposed will or alteration or revocation of the will or part of the will relevantly reflects the intentions of the minor; and

 it is reasonable in all the circumstances that the order should be made.

These provisions were probably influenced by the decision of Young J in Application of M (2000) 50 NSWLR 401 dealing with an application under section 6A of the Probate Administration Act 1898 (NSW). In that case, a grandmother had left a large estate to a minor, M, including a farm, a unit and a sum of cash. The minor was raised by his grandparents and upon their death, by his Aunt. He had never met his father and had intermittent contact with his mother. In ordering that a court authorised will should be made, leaving a legacy to M’s mother and the residue to M's cousins who had been raised with him, Young J said:

“8 There have been two instances in the past, so far as records of the Probate Office disclose, where orders have been made under s 6A, though neither is reported. One is noted in an article by Powell J in (1993) 67 ALJ 25 at 27.

1 Court Authorised Wills 9 It is to be noted that a minor who is married may make a will. Thus, the test that must be applied to a minor who is unmarried cannot be very high because a married minor may make a will without supervision. Thus there is no public policy reason why an unmarried minor may not also make a will if he or she is fully aware of what the consequences of making a will are.

10 Accordingly, there must be evidence as to what is the understanding of the minor involved. The Court must be satisfied that the minor understands the nature of making a will and also that what is in the proposed will (under s 6A the terms of the will must be disclosed to the Court) is a free and voluntary disposition and not, on the evidence before the Court, unduly influenced by the beneficiaries or those who have guardianship of the minor.

11 The Court should not lightly make an order under s 6A. There should ordinarily be a reason put forward as to why a particular minor should make a will. This point will not often arise as, ordinarily, people do not spend money on an application to the Court unless there is a good reason for doing so. There may be some situations where the Court will make an order under s 6A where there is no particular reason for doing so, but that will be a rarity. In the case referred to in the Australian Law Journal, some grounds were shown for making an order. In the present case there are also grounds for making an order. The minor has substantial property and if the property passes under intestacy, there will be an undeserved windfall to the minor's biological parents to the detriment of what is his real family.

12 Accordingly, the present case is a proper case for granting leave to the plaintiff to make a will in terms of the document which has been placed before the Court in evidence and I so order.”

In the article referred to by Young J in paragraph 8 above (“Recent Developments in New South Wales in the Law Relating to Wills” (1993) 67 ALJ 25), Powell J discusses an unreported case in which (at 27):

“The applicant was a street kid not quite 18 years of age. She had to undertake surgery the prospects of survival were no better than 50/50. She wished to make a will leaving her small estate ($2000.00) to a friend who had helped care for her "in the squat" she had been living in.” ii. Evidence

An application under s 16 of the Act should be commenced by way of summons with a draft copy of the proposed will annexed and supported by the following:

 an affidavit from the minor;

 an affidavit from an independent solicitor;

 an affidavit from any guardian; and

 an affidavit from any trustee.

The evidence should establish the following:

2 Court Authorised Wills  That the minor understands what a will is and the effect the will being made will have.

o Minor and the independent solicitor.

 That the minor understands the nature and size of their estate.

o Minor, trustee and independent solicitor.

 Provide a clear reason why the particular minor should make a will. In the Application of M, ibid at 407, Young J said that the court "should not make lightly an order". The evidence should deal with why intestacy would not be a suitable outcome.

o Minor, guardian, trustee and independent solicitor.

 Any influence on the minor should be put before the court.

o Minor, guardian, trustee and independent solicitor.

2 Wills for those without capacity: ss 18-26 of the Act

Section 18 of the Act provides the court with the power to make an order authorising a will to be made, altered or revoked on behalf of a person who lacks testamentary capacity.

The person must still be alive. This is very important for solicitors who are dealing with a case where the testator may be gravely ill.

Section 19(1) requires leave of the court to bring an application under s 18 of the Act. In order to obtain leave, s 19(2) provides that the court should be provided with the following information:

(a) a written statement of the general nature of the application and the reasons for making it,

(b) satisfactory evidence of the lack of testamentary capacity of the person in relation to whom an order under section 18 is sought,

(c) a reasonable estimate, formed from the evidence available to the applicant, of the size and character of the estate of the person in relation to whom an order under section 18 is sought,

(d) a draft of the proposed will, alteration or revocation for which the applicant is seeking the Court’s approval,

(e) any evidence available to the applicant of the person’s wishes,

(f) any evidence available to the applicant of the likelihood of the person acquiring or regaining testamentary capacity,

(g) any evidence available to the applicant of the terms of any will previously made by the person,

(h) any evidence available to the applicant, or that can be discovered with reasonable diligence, of any persons who might be entitled to claim on the intestacy of the person, 3 Court Authorised Wills (i) any evidence available to the applicant of the likelihood of an application being made under Chapter 3 of this Act in respect of the property of the person,

(j) any evidence available to the applicant, or that can be discovered with reasonable diligence, of the circumstances of any person for whom provision might reasonably be expected to be made by will by the person,

(k) any evidence available to the applicant of a gift for a charitable or other purpose that the person might reasonably be expected to make by will,

(l) any other facts of which the applicant is aware that are relevant to the application

The court must refuse leave to make an order under s 22 of the Act unless the court is satisfied that:

(a) there is reason to believe that the person in relation to whom the order is sought is, or is reasonably likely to be, incapable of making a will, and

(b) the proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity, and

(c) it is or may be appropriate for the order to be made, and

(d) the applicant for leave is an appropriate person to make the application, and

(e) adequate steps have been taken to allow representation of all persons with a legitimate interest in the application, including persons who have reason to expect a gift or benefit from the estate of the person in relation to whom the order is sought.

Section 20 allows for the application for leave and the application for an order to proceed at the same time. This has the effect that in some cases the application for leave and the order will be made at the same time. In other cases, the application for leave may be heard and then the matter will be adjourned for more information to be obtained.

The court may want the person who lacks capacity to have independent representation. The court may take into consideration any matter it sees fit and is not bound by the rules of evidence. The will must be in writing and signed by the registrar. .

Ii Cases

Currently, the only cases in NSW are:

a. Re Fenwick; Application of JR Fenwick; Re “Charles”(2009) 76 NSWLR 22

The first statutory will cases under the Act involving two separate matters determined by Palmer J which laid the foundations which nearly all cases have referred to. The key principles can be summarised as follows.

Testamentary capacity

In order for the court to grant leave to proceed with an application under the Act, the court must be satisfied that the person to whom the application relates “is, or is reasonably likely to be, incapable of making a will”(s 22(a) of the Act). However, to make a final order, the court must find that the person lacks testamentary capacity. 4 Court Authorised Wills The test of testamentary capacity is still the test in Banks v Goodfellow (1870) LR 5 QB 549. The evidence required was set out by Palmer J in Re Fenwick (at 127-135):

(i) Ideally a specialist professional that agrees to be bound by the rules of expert witnesses code of conduct and the report deals directly with each of the elements enunciated in Banks v Goodfellow;

(ii) The next best evidence if time doesn’t allow would be the treating practitioner who deals with the elements of Banks v Goodfellow;

(iii) The worst evidence and that which would be treated with the utmost suspicion would be uncorroborated evidence of a person who would benefit under the will or codicil.

The evidence will be considered as a whole. In Zorbas v Sidiropoulous - Estate of Kriezis [2008] NSWSC 1041 (3 October 2008), the court indicate that applications should be supported not only by expert evidence, but, if possible, by lay evidence as well.

The test for a s 18 order under the Act is the court must be satisfied on the balance of probabilities, as set out in Bringshaw v Bringshaw (1938) 60 CLR 336 which means the court “must feel an actual persuasion of its occurrence or existence before it can be found” at 361-362 per Dixon J.

The court will take the matter into its own hand to determine the best interest of the incapacitated person. The court may insist on meeting the person who is affected by the order, including taking steps to hold the hearing at a venue where that person resides.

Is, or is reasonably likely to be, a will that would have been made by the person if he or she had testamentary capacity

It may be very easy to determine what a person who has lost capacity may have done with their estate. However, the same cannot be said of a person who has never had capacity. For that reason, Palmer J explained “reasonably likely” in this context as follows (at 54 [151]-[152]):

“’Reasonably’ can, of course, mean ‘in accordance with reason’, as in the phrase ‘acting reasonably in all the circumstances’. It can also be used to lessen the intensity of an adjective. For example, if I were asked: ‘Is this action necessary’, the answer ‘it is necessary’ would be stronger than ‘it is reasonably necessary’. The second answer conveys that there is some latitude, or margin of judgment, available whereas the first answer does not.

In the same way, if the Court were required to find whether a certain result is ‘likely’ for the purposes of s 22(b), it would have to make its judgment in a ‘yes or no’ or ‘black or white’ fashion. However, if the Court were asked whether the result is ‘reasonably likely’, it does not have to be persuaded of likelihood to the same degree. It may answer ‘yes’ if it considers that there is a fairly good chance that the result is likely. Alternatively, it may answer ‘yes’ if it recognises that other reasonable people could regard the result as likely, even if the Court itself would differ. Thus ‘reasonably likely’ can mean ‘a fairly good chance that it is likely’ or ‘some reasonable people could think that it is likely’ or ‘some reasonable 5 Court Authorised Wills people could think that there is a fairly good chance that it is likely’. Such are the nuances of the English language.” [emphasis added]

Palmer J identified three categories of capacity cases:

1. Lost capacity

“The easiest case is a lost capacity case where the incapacitated person is adult, has formed family and other personal relationships, has made a valid will before testamentary incapacity occurred, and is now said to have expressed some testamentary intention in relation to the circumstances sufficient to warrant an application for a statutory codicil or new will” (at 54-55 [154])

2. Nil capacity

“A search for any degree of subjective intention is impossible in a nil capacity case, where the person has been born with mental infirmity or has lost testamentary capacity well before ever being able to develop any notion of testamentary disposition. Nevertheless, the statutory will-making power is available in such a case: s 18(4).

As, in the absence of a statutory will, the person in a nil capacity case must inevitably die intestate, I do not think that the Court starts with the meaningless question: would this particular person have chosen to make a will if he or she had attained testamentary capacity? Rather, I think that the Court must start from the position that, if there are assets of any significance in the minor’s estate, it should authorise some kind of statutory will unless it is satisfied that what would occur on intestacy would provide adequately for all the reasonable claims on the estate” (at 57 [171]-[172])

3. Pre-empted capacity case

“In this category the incapacitated person is still a minor but has lost testamentary capacity at an age at which he or she had formed relationships and had, or could reasonably be expected to have had, a fairly good understanding of will-making, intestacy and their consequences. An archetypical example of a ‘pre-empted capacity’ case is that of the sixteen or seventeen year old who suffers severe and permanent brain injury in a motor vehicle accident and is subsequently awarded a large sum in damages. There is already one application for a statutory will in such a case pending in this Court and there will, I am sure, be many more.” (at 58 [177])

Family provision consideration

Further, in an application under s 18 of the Act, the court must also consider any potential family provision claims. The court takes this approach to prevent needless litigation and to obtain the just quick and cheap resolution of the real issue in the proceedings under s 56 of the Civil Procedure Act 2005 (NSW). In considering this issue, Palmer J said (at 60 [193]-[194]):

6 Court Authorised Wills “Section 19(2)(i) requires the Court to consider whether the proposed statutory will would accommodate a person who would have a successful claim under the family provision legislation, now Ch 3 of the Succession Act in respect of persons dying on or after 1 March 2009.

It would produce needless and wasteful litigation to authorise a statutory will which was bound to provoke a successful claim under the family provision legislation. In such a case, to grant leave under s 19(1) or to make a final order under s 18 would not be appropriate, within the meaning of s 22(c). The policy of the law is to quell disputes, not to create them.”

b. AB v CB [2009] NSWSC 680

A pre-empted capacity application by a mother concerning her severely incapacitated daughter (the first defendant). The father of the first defendant had nothing to do with the girl for many years. Palmer J found that there was a fairly good chance that had the first defendant had capacity she would have left her entire estate to her mother.

c. Application by Peter Leslie Kelso [2010] NSWSC 357

An application by a solicitor on behalf of a woman who had lost capacity and was about to die (the woman was in a coma and life support had been turned off). The woman had come to Australia and married. Her husband had abused her and this had contributed to her injuries. Her estate was comprised of an award of $9,000 from a victims’ compensation claim. The court ordered that: the solicitor be the executor; that half of the estate go to a women’s shelter where the woman had sought refuge and that half of the estate go to a person described as “China Mum”. The solicitor received his costs on the indemnity basis out of the estate.

d. Re Estate of Crawley [2010] NSWSC 618

A 93 year-old woman had lost capacity. A will she had made resulted in much of her estate passing to the Crown on the rules of intestacy. The applicant was the woman’s attorney appointed since 1997. The court found it was unlikely that the woman would have wanted her estate to pass to the Crown. The court ordered that a legacy be given to a charity and that the residue of the estate pass to the attorney who was also to be the executor.

e. Application of Sultana [2010] NSWSC 915

This case concerned a man with Down’s Syndrome who was in his forties and had nil capacity. He had always lived with his mother and sister who looked after him. The court made a will leaving everything to the mother if she survived and then to the sister, excluding the father.

f. Application of Wosif Elayoubi [2010] NSWSC 1004

This was an application by the brother of a person with nil capacity (Kaled) who was about to die. There had been a settlement of a personal injury case in the sum of $5,000,000. The father had remarried and substantially abandoned the family. The mother had solely looked after Kaled. The

7 Court Authorised Wills court ordered that $1,000,000 was to be put into trust for the father, the residue was to go to the mother, with a gift over to the applicant.

g. Re Will of Jane [2011] NSWSC 624

The applicant brought an application seeking that a will be made gifting himself his mother’s entire estate to the exclusion of the other two siblings. The plaintiff’s application was dismissed as the will was not one which the mother would reasonably have made.

h. Hausfeld v Hausfeld & Anor [2012] NSWSC 989

This was an application by Gregory Hausfield, one of three siblings, in respect of his father’s estate. The reason for the proceedings was that the applicant was facing possible bankruptcy as a result of proceedings in the Federal Court. The applicant wanted his share of his father’s estate to go to his wife to avoid any potential creditors. Leave to make the application was refused. Justice White said at [13]:

“The policy of the law is that people should pay their debts so far as they are able. It is not that they be sheltered in the way proposed.”

If leave had been granted, the court indicated that it would have given the potential creditors an opportunity to be heard.

i. Estate of S [2012] NSWSC 1281

This was an application by a daughter in law (the son had died) in relation to “S” a 96 year-old woman. The only child alive, a daughter (D), supported the application.

5. Briefly, by way of background, I note as follows. S was married to F, who predeceased her in 1982. They had two children, P, who died in 1994, and D. The plaintiff (L) was P's second wife and together they had one child, A1. (P had two children from a prior marriage, namely A2 and A3, both of whom are adults.) D has two children (K and SH). The approximate value of S's current estate is $776,000.00. 6. S made a will on 25 June 1955 under which she appointed F her sole executor and beneficiary but, in the event that F did not survive her (which transpired to be the case), she appointed Permanent Trustee Co of New South Wales as executor and left her estate (after payment of debts, funeral and testamentary expenses) to such of her children as attained the age of 21 (and, if more than one, as tenants in common in equal shares)

In 1999 S instructed new solicitors to prepare a will and power of attorney which was never signed. There was evidence that S told L that she was part of the will.

Result: L was appointed as executrix; provision was made for legacies of $10,000 to each of A2 and A3; and the residue of S's estate would be left as to one-third to L and the remaining two-thirds to D

j. Scott v Scott [2012] NSWSC 1541

A case with three sets of proceedings encompassing applications under the Act, the Powers of Attorney Act2003 (NSW) and the NSW Trustee and Guardian Act 2009 (NSW). 8 Court Authorised Wills This case raised an interesting issue regarding the rules of evidence as the rules do not apply in statutory will cases. Paragraphs 33-37 of the judgment provide guidance on the role of the solicitor acting in these types of proceedings.

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