Grace v Franke [2000] NSWSC 256

New South Wales Supreme Court

CITATION : Grace v Franke [2000] NSWSC 256 CURRENT JURISDICTION: Probate Division FILE NUMBER(S) : SC 101198 of 1999 HEARING DATE(S) : 8, 9 & 10 March 2000 JUDGMENT DATE : 4 April 2000

PARTIES : Neville Homes Grace v Coral Franke JUDGMENT OF : Master Macready at 1

COUNSEL : B. Skinner (P) C. Harris (D) SOLICITORS : Church & Grace (P) Conway MacCallum (D) CATCHWORDS : Succession. Wills Probate and Administration. Application for probate of codicil when testatrix suffered from an alleged delusion that a beneficiary under a will had stolen from the testatrix. - Held testatrix did not have testatmentary capacity. - Probate of codicil refused. CASES CITED : Re Griffith, Easter v Griffith NSWCA 7 June 1995 unreported at 10 - 13. DECISION : Paragraph 37

- 1 - THE SUPREME COURT OF NEW SOUTH WALES PROBATE DIVISION

MASTER MACREADY

Tuesday 4 April 2000.

101198 OF 1999 NEVILLE HOMES GRACE v CORAL FRANKE JUDGMENT 1 MASTER: In these proceedings the plaintiff seeks that probate be granted to him of the will dated 31 March 1998 and a codicil dated 26 May 1998 of the late Mae Louise Thomson. The defendant by a cross claim filed 7 May 1999 opposes the grant of probate of the codicil dated 26 May 1988 on the basis that at the time of making the codicil the testatrix lacked testamentary capacity. 2 Under the will made 31 March 1998 the testatrix gave one half of her estate to the defendant and the other half to be shared equally between her friends Geraldine Gallagher, Judy Harrison, Richard Fraser, Andrew Harper and Cynthia Rogan. The defendant had been a friend of many years standing of the testatrix and had looked after her for many years. Under the codicil made 26 May 1998 the testatrix revoked the bequest to the defendant and directed that that such one half share of the estate be paid equally to Geoffrey Gallus and Lois Gallus. 3 Although the testatrix was suffering from a mild form of dementia at the time she made her will in March 1998 there is no suggestion from either party or in the medical evidence that she did not have the appropriate testamentary capacity. The lack of testamentary capacity in this case focuses upon the time when the testatrix executed the codicil on 26 May 1998. In particular it was suggested in evidence and submissions that the testatrix was suffering at the time she made the codicil from a delusion that the defendant had stolen from her. The evidence in the case is clear that this fact did not happen. 4 It is useful to deal with some of the general history before turning more closely to the matters at issue. The testatrix was born in 1906. The testatrix and her husband had no children of their own and in 1980 she purchased a home unit at Oceana Apartments at Elizabeth Bay Road, Elizabeth Bay. The defendant owned a unit in that apartment block. 5 In May 1988 the testatrix's husband died and thereafter the defendant and her husband began to assist the testatrix with shopping, maintaining her car and similar matters. In 1990 the testatrix had some eye surgery as a result of which the defendant nursed her for a while and also helped when she had another accident in which her leg was caught in a bus door. The defendant would change dressings and generally attend to her. The defendant herself was a retired nurse having spent many years looking after older people in hospital. By 1994 the testatrix started to have more problems and would often fall over and would call upon the defendant for help. She fractured her left femur and was in hospital for a time. The defendant visited her there and attended to her washing. In July 1995 the testatrix made a will leaving the defendant half of her estate. The testatrix's difficulties with her health continued during 1995 and 1996 when she fractured her right femur. As a result of the decline in her health the testatrix was admitted to Maroubra Junction nursing home in October 1997. In November 1997 she gave the defendant a Power of Attorney and in December instructed the defendant to clean up and sell everything in her home unit. This involved a large amount of work on the part of the defendant. She had items which the testatrix wanted sold first inspected by a fine art dealer to see if they were of any special value which they were not. She then arranged for Lawsons Auctioneers to auction them. A full report of the auction was available. 6 On Christmas Day in December 1997 the defendant and her husband, no doubt at great personal inconvenience, acceded to the testatrix's demands to be transferred to the Edina Nursing Home at Waverley on that day. 7 On 2 February 1998 the defendant ascertained that apparently the testatrix was questioning the actions of the defendant in selling the various contents of the testatrix's home without consulting her first about her concerns. The defendant wrote to the testatrix complaining about this and offering to have her actions audited. On 13 February 1988 the testatrix wrote an apologetic letter. Apparently the testatrix and the defendant got over this difficulty which had arisen at this time. Thereafter the defendant continued to look after the testatrix's financial affairs including giving some instructions at the testatrix's request to Mr Brian McCarthy, solicitor, for a new will. Ultimately Mr Grace was contacted on 16 March 1998 by the testatrix concerning a new will and he visited her on 24 March 1998 to take instructions. On 31 March 1998 the will of the testatrix was executed. 8 Thereafter there was assistance from the defendant and her husband, for example, with the purchase of a mobile phone for the testatrix. By the end of April 1998, however, the testatrix was making comments to her treating doctors which referred the upset caused by the incidents at the beginning of February. The timing of matters thereafter assume some importance and it is worth noting that Dr Tedesco was the doctor who was treating the testatrix who by this stage had become difficult in the nursing home. On 17 April 1998 Dr Tedesco referred the testatrix to a Dr Draper an expert psychiatrist experienced in dealing with elderly patients for assessment of depression. Dr Draper was a senior staff specialist in pyschogeriatrics and has worked in that area for 14 years. On 23 April Dr Draper saw the testatrix and prescribed Zoloft an anti-depressant drug. On 11 May there was a further referral to Draper and on 12 May the testatrix was seen by Dr Tedesco. The testatrix was suffering from urinary problems and underwent a catheterisation. At this stage she was taken off Zoloft. On that day Mr Grace had also gone to see the testatrix concerning her will. He was warned by Dr Tedesco that the medication that the testatrix was taking made it unlikely that she would have the appropriate understanding in respect of the will. The defendant was away from Sydney between 7 and 13 May having gone on a holiday. When she returned on 14 May the testatrix accused her of having taken all her money and having spent it all on a trip to Germany. This was extremely upsetting to the defendant. On 14 May 1998 after the visit by the defendant to the testatrix, Dr Draper visited and noted the upset and the testatrix's condition. I will come back to the detail of his notes in respect of the conclusions he formed at that time. He thought it would be unwise for the testatrix to change her will at that stage. 9 On 19 May 1998 the defendant having thought about it for some time, wrote a letter to the testatrix in which she accused her of making wrong accusations in respect of matters that have been discussed. Dr Tedesco visited her on 19 May and he did not know about that letter. On 20 May the hospital notes record that the testatrix was upset by a "nasty" letter. On 26 May the testatrix was seen by Dr Tedesco. Unknown to him Mr Grace had visited and the codicil was executed on this day in the presence of Mr Grace and his partner. 10 On 10 June Dr Tedesco saw the testatrix again and on 11 June the testatrix was seen by Dr Draper, the psychiatrist. On 2 July there was notice served in respect of a Guardianship Tribunal application made by the defendant which application came on to be dealt with in due course. Given that a new attorney had been appointed by the testatrix the Board decided for this reason not to make an order. In due course the testatrix died on 10 January 1999. The defendant had no further contact with the testatrix after writing her letter of 19 May 1998. 11 It is useful to record the legal principles which are applicable to a case such as the present. There is no disagreement about these principles and a useful summary of them is set out in a judgment of Gleeson CJ with whom Handley JA agreed in Re Griffith, Easter v Griffith NSWCA 7 June 1995 unreported at 10 - 13. "Where the evidence in a suit for probate raises a doubt as to testamentary capacity, there rests upon the plaintiff the burden of satisfying the conscience of the court that the testatrix had such capacity at the relevant time. If, following a vigilant examination of the whole of the evidence, the doubt is felt to be substantial enough to preclude a belief that the testatrix was of sound mind, memory and understanding at the time of execution of the will, probate will not be granted ( Worth v Clasohm (1952) 86 CLR 439). This formulation of the onus of proof, well established by authority and not in dispute in the present case invites caution. The power freely to dispose of one's assets by will is an important right, and a determination that a person lacked (or, has not been shown to have possessed) a sound disposing mind, memory and understanding is a grave matter. Where a testatrix exhibits florid symptoms of psychotic disturbance, such a conclusion may be reached relatively easily. However, where, as in the present case, what is claimed is that a woman, who presented to the world an appearance of intelligence and rationality, had formed an aversion to her child so unfounded and unreasoning that it evidences an unsoundness of mind, the decision may be very difficult. This was the point made by Sir James Hannen in his charge to the jury in Boughton v Knight ([1873] LR 3 P and D 64 at 69). Nevertheless, difficult though its application may be in individual cases, the law treats as critical the distinction between mere antipathy, albeit unreasonable, towards one who has a claim and a judgment which is affected by a disorder of the mind. The traditionally accepted formula for determining testamentary capacity is that stated by Sir Alexander Cockburn CJ in Banks v Goodfellow ((1870) 5 QB 549, at 565): 'It is essential to the exercise of (testamentary) power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties - and that no insane delusions 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.' A detailed analysis of the manner in which the courts have approached the practical application of that formula, including the rules as to onus of proof, is to be found in the judgment of Powell J in Re Hodges, Shorter v Hodges (1988) 14 NSWLR 698. Mental infirmity of a kind which denies testamentary capacity does not necessarily involve 'insane delusions'. In Harwood v Barker (1840) 3 Moo PC 282, the testator was said to have a bodily disease affecting the brain and was greatly debilitated physically. He was said (at 285) not to have been suffering from any delusion, but was found not to have been in a state of mind to judge the propriety of his dispositions. (See also Batton Singh v Amirchand [1948] AC 161). Nevertheless, the courts have regularly discussed this subject in a manner which tends to focus upon the presence of delusions as the indicator of mental disorder. In Smith v Tebbitt (1867) LR 1 P and D 354, 398 at 402-3 Sir J P Wilde asserted that mental disease is always accompanied by the exhibition of thoughts and ideas that are false and unfounded, ie delusions. This approach is reflected in Cockburn CJ's formula quoted above. By a delusion is meant a 'fixed and incorrigible false belief which the victim could not be reasoned out of' ( Bull v Fulton (1942) 46 CLR 295 at 339). As Santow J observed, psychiatric knowledge has developed a great deal since those early formulations of the relevant legal principles. There is a degree of artificiality in seeking to force all manifestations of 'insanity' under the rubric of delusion. Where the existence of a material delusion can be shown, then the relevance of that to an issue as to a person's ability to comprehend and appreciate the claims upon his or her bounty may be clear and direct. For example, in Timbury v Coffee (1941) 66 CLR 277 an alcoholic testator suffered hallucinations and believed that his wife was unfaithful. This influenced his testamentary dispositions, which were held invalid. The attention paid to delusions is understandable, but the law must be sufficiently flexible to take account of developments in psychiatric understanding. The critical question, in a case such as the present, concerns mental capacity to comprehend and appreciate the claims upon one's bounty. Where an alleged delusion concerns a fact, or state of affairs bearing upon a judgment as to the moral claim one person has upon another's bounty, and the question of its falsity is capable of objective determination, the task of the court is relatively straightforward. However, there may be cases in which one person's estimation of another's claims may seem harsh and unwarranted, and perhaps even unnatural, but it is impossible to assign a reason for that, or to point to any false belief. Testamentary capacity is not reserved for people who are wise, or fair, or reasonable, or whose values conform to generally accepted community standards. A person may disinherit a child for reasons that would shock the conscience of most ordinary members of the community, but that does not make the will invalid. In this area of discourse the concept of delusion is not restricted to false beliefs about objective facts (such as a husband's belief that his wife is unfaithful). Delusion may also consist in, or involve, a value judgment where 'the judgment is so extreme as to defy credibility'. (See the definition in the Diagnostic and Statistical Manual of Mental Disorders, 3rd Ed, Revised (DSM-III-R), 1987, issued by the American Psychiatric Association and cited by M Spitzer, 'On Defining Delusions' (1990) Comprehensive Psychiatry, Vol 31, No 5 at 395). In practice, however, it may be much easier to characterise a belief about a matter of objective fact as irrational and the product of a disorder of the mind than it is to characterise a value judgment as so extreme as to warrant the description of a delusion. The scope for difference of opinion about the character of other people, in particular, is so wide that great care needs to be exercised before concluding that a harsh or unreasonable judgment of another amounts to a delusion." 12 The present case clearly concerns delusions under which the testatrix was said to be suffering at the time of making her codicil. It is necessary to first note the evidence called by each side on this aspect. 13 The plaintiff called no medical evidence but called both the Executor Mr Grace and his partner who gave evidence of their observations of the state of the testatrix at the time the will and codicil were executed. There was also evidence from attesting witnesses. The defendant for her part called evidence from two doctors. The first was Dr Tedesco who was the testatrix's treating general practitioner who had had some experience in the area. The second was from Dr Draper who as I have indicated earlier was called in by Dr Tedesco initially to treat the depression from which the testatrix was suffering. Both these doctors expressed the opinion that on 26 May she lacked the relevant testamentary capacity as a result of the delusions from which she was suffering. 14 It useful to first note the delusions which are the heart of the matter. They were referred to in several places in the evidence. The first concerned the incident in early February. The testatrix on that occasion accused the defendant of having "sold everything too cheaply. You should have advertised it and sold it from the unit or you should have gone to second hand shops and sold individual pieces at the best price you could get." This was not the ultimate delusion which the defendant relied upon but it perhaps led up to the final delusion. This is referred to by Dr Tedesco when on 12 May he recorded that the testatrix said, "Coral and Hans have taken my money and they have gone off to Germany". At that stage Coral and Hans were away on a holiday in Australia. When the defendant returned on 14 May the main statement made by the testatrix to the defendant was, "You have taken me down for everything I ever had and you've cleaned me out of all of my money and left me penniless". The matter was pursued further by Dr Tedesco on 19 May when he asked her, "What makes you think that Coral and Hans have taken your money and gone to Germany?'" The reply from the testatrix was, "It suddenly came to me. I worked it out and you see this knee, now I've had ligament damage." Importantly Dr Tedesco indicated that such thoughts of taking the testatrix's money had never been indicated prior to her being on Zoloft which she started on 23 April. On 26 May Dr Tedesco noted that the defendant said, "The night staff are acting under Coral's instructions to tie me down in bed." 15 Given the nature of the statements made by testatrix it is necessary to see whether there may be any basis in fact for her holding these beliefs. So far as the incidents in February are concerned, the matter really concerns something which is not central to the real delusion which had developed at the time of the execution of the codicil. In any event I note that the defendant appears to have taken necessary precautions such as having someone check the goods before they were auctioned to see if there might have been something of value. So far as the allegations that the defendant had taken her money the clear evidence before me is that this did not happen. Incidentally the defendant did not go to Germany with her husband as the testatrix believed. There was of course no suggestion in the evidence that in fact the defendant had given instructions to the night staff to tie down the testatrix in bed at night. The major delusion, namely, that the defendant had stolen all the testatrix's money clearly is material to the issue as to whether the testatrix had the ability to comprehend and appreciate the claims on her bounty. 16 In careful cross examination counsel for the plaintiff explored the basis of Dr Tedesco and Dr Draper's opinions and concentrated on the change of circumstances between 12 May and 11 June. 17 With regard to Dr Tedesco the point was brought out that he did not have appropriate psychiatric qualifications. Accordingly it was submitted that his evidence was limited in respect of the view which he expressed. He had, however, experience in the area and his observations of the testatrix are relevant to support Dr Draper's opinion. 18 So far as Dr Draper's conclusion was concerned, there were a number of criticisms of the reasoning process by which he arrived at the view that as 26 May the deceased lacked the testamentary capacity. It was suggested in submissions that given the events which had occurred between the 11th and 26th May that the reason for the change in the will was not because of any delusions but simply a natural reaction by the testator to actions taken by the defendant. These included:-