NZ GUARDIAN TRUST CO LTD v MORRIS [2019] NZHC 1469

NZ GUARDIAN TRUST CO LTD v MORRIS [2019] NZHC 1469 [26 June 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-002581[2019] NZHC 1469IN THE MATTER of an application for an order of probate insolemn form in the estate of GINA ETHELARMSTRONGBETWEEN THE NEW ZEALAND GUARDIANTRUST COMPANY LIMITEDPlaintiffAND PATSY MORRISFirst DefendantCAROLYN CHRISTINA WILSONSecond DefendantLEISHA MAREE CAIRNSThird DefendantMEGAN GWENDOLINE WAHOFourth DefendantHearing: 26 June 2019Appearances: AWJ Johnson for the PlaintiffNo appearance by or on behalf of the DefendantsJudgment: 26 June 2019JUDGMENT OF WOOLFORD JSolicitors: Martelli McKegg, Auckland[1] Gina Ethel Armstrong died on 26 April 2017 aged 82 years (the deceased). Theplaintiff, the New Zealand Guardian Trust Company Limited, is named as thedeceased's executor and trustee in a will executed by her on 23 July 2001. The plaintiffnow makes application for an order that probate of the will dated 23 July 2001 begranted in solemn form with the company appointed as executor and trustee. Probatein solemn form is sought because the deceased signed a later will, dated 17 August2016. The plaintiff alleges that the deceased lacked testamentary capacity at the timeshe signed the later will.Parties[2] The plaintiff is named as executor and trustee in the earlier will. The firstdefendant is the sole beneficiary under the earlier will. She is described as a friend ofthe deceased. The second defendant is the sole beneficiary under the later will. Shewas the deceased's carer for a number of years. The third and fourth defendants arenamed as executors and trustees in the later will.Formal proof[3] The plaintiff's application is not opposed. The first defendant has filed a noticeof appearance reserving rights in which she states that she does not oppose theplaintiff's claim, but appears in order to reserve her rights in the event that anotherperson becomes a party to the proceeding, or that a party takes a step in the proceedingthat is against her interests.[4] The second and fourth defendants were unable to be located and, accordingly,the Court directed that service on them be dispensed with, but that the documents bebrought to their attention by serving them on the third defendant (including an orderfor substituted service), and by means of a public notice placed in the New ZealandHerald. The third defendant was served with the proceedings. The second, third andfourth defendants have subsequently taken no steps in the proceedings.[5] On 14 March 2019, the third defendant emailed the plaintiff's solicitor stating:Thank you for your time and speaking with me on Tuesday night. Asdiscussed I am emailing to let you know that I have received the courtdocuments and we will not be opposing anything.We were always acting to honour Gina's wishes who, though she was not ablood relative, was very loved, is missed and part of our family for well overten years.Affidavit evidence[6] Lynetty Nyamadzawo was formerly employed by the plaintiff and was theclient manager for the deceased for around two or three years. During her time asclient manager she was in contact with the deceased quite frequently. She looked afterthe deceased's finances, paying bills and providing her with pocket money. Most ofthe time the deceased was bedbound, but was communicating closely with the seconddefendant, who was her caregiver.[7] The deceased was admitted to hospital on 15 August 2016. Ms Nyamadzawovisited her on 19 August 2016 in hospital to deliver her some flowers. On asking thedeceased about how she had been, she started talking about a nice young man who thesecond and fourth defendant came with, who had asked her to sign a document to saythat they were her family. Ms Nyamadzawo asked the deceased what the documentwas, but she was not really sure. She said she did not know much about the document,but she looked at it and signed it. Ms Nyamadzawo ascertained that the deceased hadin fact signed a will. Ms Nyamadzawo then made inquiry of the duty nurses on 17August 2016, the day the deceased signed the later will. The nurses confirmed that onthat day the second defendant came with a gentlemen, but that they were in thedeceased's room with a closed door, so they did not know if she was signing anything.They did not recall seeing the fourth defendant at the same time, but recalled hercoming in a little later on. They also confirmed that the deceased was very unwell andon oxygen since she had been admitted. It was their view that she should not besigning anything legal as she was seriously unwell. They also mentioned that they didnot even know whether the deceased had capacity as she did not make sense most ofthe time.[8] Dr Jane Elizabeth Casey is a consultant psychiatrist and a psychogeriatrician.In a comprehensive report, Dr Casey described the deceased as an unmarried womanwho had lived an uncomplicated life up until her death aged 82 in 2017. There wasevidence of probable pre-existing borderline intelligence with superimposed cognitiveimpairment and multiple medical problems. There was evidence of establishedcognitive impairment of a moderate degree in November 2012. She noted that thedeceased was an anxious-dependent personality type who had a fragile emotional andmental state, with a predisposition to psychotic decompensation when under stress.[9] Dr Casey notes that on 15 August 2016, the deceased was admitted to AucklandHospital very unwell with Type 2 respiratory failure. She had symptoms of asignificant Delirium through much of this admission with the records notingfluctuation in attention, reduced level of consciousness, memory impairment andanxiety, from 16 August through until the day before discharge on 23 August 2016.There was no evidence in the clinical records that that the doctors or nurses were madeaware that the deceased was asked to review and sign a legal document.[10] Dr Casey notes that the later will was a significant change to the earlier willand that the deceased was a fragile person who was medically unwell with an acuteconfusion superimposed upon established cognitive impairment. Dr Casey is of theview that the concept of a lucid interval or fluctuating capacity is a possibility,however, the deceased had established cognitive impairment of a moderate degree.Dr Casey is of the opinion that it is highly improbable that there would have been aperiod of lucidity that would have restored her to the cognitive state necessary for thecomprehension, reasoning and appreciation of the consequences of the decisionmaking with a revision of a will. In her expert opinion, the deceased was not of soundmind and would not have been able to demonstrate the mental capability to understandand make a sound assessment of the issues and circumstances at the time of the laterwill on 17 August 2016. Thus on the grounds of probability, the deceased would nothave had testamentary capacity.Discussion[11] Nothing has been brought to the Court's attention that raise any doubt as to thedeceased having testamentary capacity at the time of the earlier will dated 23 July2001. In the normal course of events, that will would have been the subject of aprobate application in common form. The memorandum of Ms Atchison filed in theproceeding confirms to the Court that the affidavit for obtaining grant of probate,affidavit proving death and copy of will, would be sufficient for such purpose.[12] The primary question for the Court is therefore whether the deceased hadtestamentary capacity at the time of executing the later will on 17 August 2016. Thetest in relation to testamentary capacity is not contentious. In the recent High Courtdecision Public Trust v Dollimore,1 Simon France J stated:Testamentary incapacity[7] I adopt the following statement from Woodward v Smith, noting theprinciples were recently affirmed in Loosley v Powell where the Courtobserved they were guiding propositions rather than a formula. TheWoodward passage reads:(1) Because it involves moral responsibility, the possession of theintellectual and moral faculties common to our nature isessential 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; andalso the extent of the property of which he isdisposing;[ii] is able to comprehend and appreciate the claims towhich he ought to give effect;[iii] be free of any disorder of the mind which wouldpoison his affections, pervert his sense of right, orprevent the exercise of his natural faculties; that noinsane delusion shall influence his will in disposingof his property and bring about a disposal of it which,if the mind had been sound, would not have beenmade.(3) Unsoundness of mind arising from want of intelligencecaused by defective organization, or by supervening physicalinfirmity or the decay of advancing age, as distinguished frommental derangement is equally cause of incapacity. But:[i] though the mental power may be reduced below theordinary standard, yet if there be sufficientintelligence to understand and appreciate thetestamentary act in its different bearings, the power tomake a will remains.[ii] it is enough if the mental faculties retain sufficientstrength fully to comprehend the testamentary actabout to be done.(4) It is not necessary that the testator should view his will withthe eye of a lawyer, and comprehend its provisions in their1 Public Trust v Dollimore [2018] NZHC 3316 at [7] – [8].legal form. It is sufficient if he has such a mind and memoryas will enable him to understand the elements of which it iscomposed, and the disposition of his property in its simpleforms.(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 ofthe bodily health, that is to be attended to. The latter may bein a state of extreme weakness, feebleness or debility and yethe may have enough understanding to direct how his propertyshall be disposed of; his capacity may be perfect to dispose ofhis property by will, and yet very inadequate to themanagement of other business, as, for instance, to makecontracts for the purchase or sale of property.(6) A testator who has reflected over the years on how hisproperty should be disposed of by will is likely to find it lessdifficult to express his testamentary intentions than tounderstand some new business.(7) Testamentary capacity does not require a sound and disposingmind and memory in the highest degree; otherwise, very fewcould make testaments at all.(8) Nor must the testator possess such capacity to the same extentas previously. His mind may have been in some degreeweakened, his memory may have become in some degreeenfeebled; and yet there may be enough left clearly tounderstand and make a sound assessment of all those things,and all those circumstances, which enter into the nature of arational, fair, and just testament.(9) But if that standard is not met, he will lack capacity.[8] On several occasions during the hearing, the so-called presumption ofcapacity, and the burden of proof were raised. This focus no doubt reflects arecognition that the case could be seen as finely balanced. It is accordinglyconvenient to cite a statement of the principles as given by Tipping J in Bishopv O'Dea. The last two paragraphs are repetitive of Woodward, but helpful tothe issues in the present case:[1] In probate proceedings those propounding the will do nothave to establish that the maker of the will had testamentarycapacity, unless there is some evidence raising lack ofcapacity as a tenable issue. In the absence of such evidence,the maker of a will apparently rational on its face, will bepresumed to have testamentary capacity: Re White [1951]NZLR 393 (CA) and Peters v Morris (CA99/85: judgment 19May 1987).[2] If there is evidence which raises lack of capacity as a tenableissue, the onus of satisfying the Court that the maker of thewill did have testamentary capacity rests on those who seekprobate of the will: Public Trustee v Bick [1973] 1 NZLR 301and Peters v Morris (supra).[3] That onus must be discharged on the balance of probabilities:Watkins v Public Trustee [1960] NZLR 326 (CA). Whetherthe onus has been discharged will depend, amongst otherthings, upon the strength of the evidence suggesting lack ofcapacity.[4] In order to establish capacity, when in issue, those seekingprobate must demonstrate the maker of the will had sufficientunderstanding of three things:(a) that he or she was making a will and the effect ofdoing so ("the nature of the act and its effects")(b) the extent of the property being disposed of(c) the moral claims to which he or she ought to giveeffect when making the testamentary dispositions.These three matters derive from the leading authority ofBanks v Goodfellow (1870) LR 5 QB 549 as cited by thisCourt in Ranby v Hooker (Court of Appeal, Wellington, CA172/96, 16 September 1997) and in Peters v Morris (supra).[5] If incapacity before the making of the will has beenestablished, those seeking probate must show the will wasmade after recovery or during a lucid interval. In such a casethe will is regarded with particular distrust and there is, in thefirst instance, a strong presumption against it, particularly if itdisplays lack of moral responsibility in the nature of thedispositions: 4 Halsbury's Laws of England, Vol 17 at para904.[13] Dr Casey's report annexed to her affidavit is comprehensive and reviews allavailable medical reports from Auckland City Hospital from 25 April 2016 – 21 April2017, being immediately prior to her death, together with mental health records from6 September 2012 – 20 December 2013. In addition, she had access to file notes,letters, emails and other documents.[14] I am of the view that, on balance, the deceased would not have the testamentarycapacity on 17 August 2016 to be in a position to execute a will on that date. She hada prior history of impairment. She was very unwell whilst in hospital. She was undermedication and, a few days later, she was unable to explain the nature or the extent ofthe document she had signed.[15] There will, accordingly, be an order that probate of the will dated 23 July 2001be granted in solemn form with the New Zealand Guardian Trust Company Limitedappointed as executor and trustee. Costs of this application are to be met from thedeceased's estate.________________________________Woolford J