Important new VSCA decision on Capacity
BY JAMES D. CATLIN · MAY 3, 2015
The decision as to the presence of testamentary capacity was overturned.
The considered opinions of lawyers as to the existence of capacity can and will be discounted in certain circumstances including them not being appraised of medical evidence or evidence relevant to capacity generally.
VEALL v VEALL [2015] VSCA 60 (16 April 2015) decision of Santamaria, Beach and Kyrou JJA
Summary: – Part 1.
The decision as to the presence of testamentary capacity overturned.
The considered opinions of lawyers as to the existence of capacity can and will be discounted in certain circumstances including them not being appraised of medical evidence or evidence relevant to capacity generally.
Cogent medical evidence is to be preferred over that of lay witnesses even though the latter had extensive interaction with a testator.
The ‘golden rule’ of ensuring a will was witnessed by a medical practitioner had not been observed.
Medical evidence combined with unusual and mistaken key elements of the last will be sufficient to establish lack of capacity and in particular the capacity to evaluate the relative claims in the testator’s bounty.
The decision is also important guidance on the standards of solicitors in will execution. That is dealt with in another case note.
Veall v Veall (“Veall”) was an appeal from a decision of trial judge Ginnane J. that the last will of the deceased not be admitted to probate because the testator did not have knowledge or approval of its contents. By a notice of contention testamentary capacity of the testator was also being reviewed. The Court of Appeal reversed the finding as to capacity making it unnecessary to determine whether knowledge and approval of the will was affirmatively established but gave reasons on that subject as well. The decision on knowledge and approval of the will and the important contemporary guidance on the standards of solicitors in will execution is dealt with in another case note
Is trite law that the test of capacity is generally that a testator knows what he or she is doing, the effect of his or her dispositions, the extent of his or her estate and the persons who might have a claim upon his/her bounty.[1] Also that a duly executed will creates a presumption of capacity.[2] The more vexed question for lawyers is the quality of evidence necessary to establish ‘doubt’[3] as to capacity and thereby to shift the onus of proof back to the propounder of the will and ultimately the point at which capacity is on balance found to be absent. In other words Is the bar high or low ?
Veall provides important contemporary guidance on how evidence of capacity should be assessed. The last exposition on the principles by the Court was over 10 years ago in Kantor & Anor v Vosahlo [2004] VSCA 235.
Some Background
Keith Veall had three children two by the first marriage and one by the second. By serendipitous circumstances a trust enuring largely to the benefit of his second wife and third child held and partly distributed the bulk of his wealth in sums of over $12 million. His eldest child worked assiduously to try and correct what appeared to be a dramatic asymmetry in the distribution of the father’s wealth during life and afterward. Extraordinary lengths were gone to including a family court proceeding against the deceased’s wife even though they were still living together harmoniously.[4] On the other hand there was evidence that the deceased wished his children to benefit equally from his wealth and the eldest son’s assessment of the prospective inequality required significant action if those wishes were to be met. There were several preceding wills in July 2007 October 2008 October 2009 and September 2010 before the final one in final made 10 December 2010.
The last will “departed significantly from the previous wills”[5] and these differences were an important basis for the conclusion that the deceased did not approve or know of the contents. Critically, the last will completely excluded the deceased’s third child, bequeathed two private shot guns to the first two children even though it was the third child’s children that had been lovingly trained in their use and had been promised them. Further the last will bequeathed significant assets from a trust which had been sold three years previously and awarded an executor’s commission of 5%.
The medical evidence as to the testator’s various disabilities was significant but stood in sharp contrast to statements by friends, carers and lawyers involved with the testator making as to his having more than adequate testamentary capacity. The deceased was 90 years old, had a failing memory was diagnosed by least one doctor with the beginnings of dementia. In particular the specialist Geriatrician had diagnosed (retrospectively) the deceased as lacking capacity. The deceased was also “very deaf” and could not or would not use hearing aids. The trial judge held the medical evidence demonstrated “significant cognitive impairment”.[6] The lawyers swearing to the deceased’s capacity included three solicitors and two barristers.
Analysis
The Court of Appeal noted that many factual findings by the trial judge were properly open to him[7] to make but nevertheless concluded that the trial judge erred in ruling that the propounders of the will had discharged their onus as to capacity. The trial judge had found the evidence of eight independent witnesses as to the testator’s capacity to be compelling. Santamaria JA in his judgement concluded that the testator’s “..confusion at the time meant that he had lost the ability to evaluate and discriminate between the respective strengths..”[8] of the claims on the estate. Also that the testator lacked the “..stamina necessary to evaluate those who had claims upon his bounty and thus capacity to make any rational determination..”[9].
Importantly, the Court of Appeal did not deviate from the trial judge’s assessment of the medical evidence. Instead it focused on the contradictory nature of what the deceased was saying to one side of his family as opposed to another. He appeared to be in agreement with everything his son wanted including a Family Court property settlement with the deceased’s wife to access large sums of money locked up in a trust. On the other hand his family court affidavit deposing to his marriage being “over” entirely contradicted the fact that his wife was showering and dressing him each morning and dining with him each evening.[10] Significantly his assets in his family court affidavits differed from those in his will. The difference was not insignificant. The will purported to bequeath assets in a trust namely shares worth millions of dollars which had already been disposed of back in 2007.
The Court of Appeal did not closely analyze or delineate particular diagnostic matters of importance in the medical evidence. Indeed it held “the greater part of the evidence relates to circumstances that were said to have meant that ‘suspicious circumstances’ surrounded the making of the will”[11]. Rather it discounted the weight given the non-medical evidence for capacity, in particular that of the lawyers and thereby re-prioritised the medical evidence. The trial judge ruled the evidence of the barristers provided “strong support” for the conclusion of capacity. In particular the evidence of all the lawyers was discounted on the basis that the medical evidence of the testator’s condition was “probably not communicated to them”[12] despite recognition of authority to the effect that the contemporary evidence of the lawyers as to capacity is normally given significant weight.[13] The Court also noted that it had more evidence than was ever available to them” (the lawyers).
There is much authority for the proposition that retrospective expert opinion on capacity will always be given secondary weight to the evidence of treating doctors and people with continual and contemporary interaction with the deceased, ie Windeyer J in Revie v Druitt [2005] NSWSC 902 at [34]. The arguable significance of this decision is guidance on the importance of scrutiny of lay witnesses. Santamaria AJ reasoned:
“.. It is also necessary to consider the evidence of his friends and carers, which the trial judge accurately described as “independent”. The evidence is highly relevant and it was open to the judge to consider it “most compelling”. But, despite its independence, it should not have been treated as decisive..
The test for testamentary capacity is, with respect, more exacting than that applied by the trial judge”.[14]
This decision indicates the difficulties in making a judgement about the likely prospects of a court finding on capacity or the lack of it. The testator had the assistance of at least five lawyers some of whom were taking instructions on a family court proceeding. By definition the informal view of each as to capacity – assuming a roughly equivalent test for the ability to give instructions in litigation – was wrong.
It also provides contemporary guidance on the nature of the onus on the propounders of a will once doubt has been established as to competency. The court restated that the evidentiary standard remains simply that of on the balance of probabilities and emphasised the decision of Kantor on the point.[15] It also noted the decision of Fuller v Strum as the flexibility of the Briganshaw approach. In Fuller the court said:
“In all cases the court must be vigilant and jealous. The degree of suspicion will vary with the circumstances of the case. It may be slight and easily dispelled. It may, on the other hand, be so grave that it can hardly be removed. In the present case the circumstances were such as to impose on the respondent as heavy a burden as can well be imagined.”
It can be assumed that the VSCA regarded the circumstances in Veall as being at the grave end of the scale and were thus imposing a higher level of scrutiny.
The extent to which the trial judge’s finding is reasonable, logical and predictable yet found to be wrong highlights the arguably most important aspect of this judgement. The Court of Appeal noted that these cases often turn on their facts and this decision highlights the difficulty of accurately predicting the likely outcome on a set of facts.
As indicated the asymmetry in prospective distributions in gifts between the children was absolutely contrary to what the testator always said he hoped for. Accordingly, the exclusion of the third child from the will was entirely logical and even appropriate as she had already received large distributions from a trust and was to receive more. The trial judge had not unreasonably opined: “Elderly people may have good days and bad days of mental cognition, as well as days of varying capacity. People of a great age may have testamentary capacity even if they have dementia in its early stages”.[357] That is likely to remain a bench mark according as it does with fundamental premise in personal injuries law that injured people have “good days and bad days”. Further, although the Court of Appeal paid considerable attention to the evidence of the solicitor who took instructions for the final will[16] and who’s evidence and conduct was sub-standard, the trial judge had not given said solicitor’s evidence as to capacity much weight.
The appeal judgement was ultimately based in on the testator’s incapacity to address the task of adjusting bequests to reflect past and future distributions[17] and is a useful guide to how non-medical evidence can be used to prevent capacity being established. It more important significance however is a close analysis of the circumstances in which a lawyers opinion as to capacity will be given decisive weight in the absence of observance of the gold rule and a medical witness verifying capacity.[18]
[1] Kantor v Vosahlo [2004] VSCA 235 was the authority cited by the VSCA at [167] for this proposition. There are many others
[2] The VSCA cited Tobin v Ezekiel [2012] NSWCA 285 among others
[3] Through suspicious circumstances or otherwise see decision at [168], [193]
[4] The deceased told his wife to ignore them [220]
[5] At [4]
[6] At [260] VSC 2014 at [38]
[7] Ie at [211]
[8] St [203]
[9] At [209]
[10] At [208]
[11] At [5]
[12] At [210]
[13] “This is powerful evidence which cannot be lightly disregarded” at [210] and also at [192] citing Harls v Burgess
[14] At [211]
[15] At [[183] citing Kantor at [58]
[16] VSCA [67, 106, 110, 113-115]
[17] At [203]
[18] Referring at [192] to Templeman J’s in judgements including Re Simpson (1977) 121 SJ 224