Court guidance on Statutory Wills following changes to the Succession Act

An important change introduced into New South Wales by the Succession Act 2006 (NSW) was the power given to the Supreme Court to authorise a will to be made, altered or revoked for a person without testamentary capacity.  Such wills authorised by the Court are often referred to as Statutory Wills.

There have been some recent Court decisions which give clear guidance on the interpretation of the relevant Statutory Will provisions of the Succession Act 2006 (NSW) (sections 18-26) and the Court practice and procedure relating to Statutory Wills.

Fenwick, Re: Application of J.R. Fenwick & Re Charles [2009] NSWSC 530

These were the first two cases in which the Court had to consider and apply the Statutory Will provisions of the Succession Act 2006 (NSW).  Both cases were heard by Justice Palmer who delivered an important judgment that will be the starting point for any person considering an application to the Supreme Court for a Statutory Will for a person without testamentary capacity.

The first case of Re Fenwick: Application of J.R. Fenwick involved Robert Fenwick a 60 year old man who lacked testamentary capacity but who had made a will about ten years before he suffered a severe head injury at work.  The application was made by Robert's elder brother.  The application sought an order authorising a codicil to Robert's last will so as to avoid the possibility of an intestacy and Robert's estate passing to the NSW Crown as bona vacantia.  The elder brother was Robert's private financial manager and full time carer.

The Court considered the elder brother was an appropriate person to make the application.  Justice Palmer was satisfied on the evidence that the only possible person who would be entitled to take on intestacy did not wish to contest the Statutory Will application.  Leave was granted to allow the application to proceed, the application was heard at the same time and the Court approved the terms of the codicil that provided for a substitute executor and substitute "fall back" beneficiaries in the event of certain family members predeceasing Robert.  The Court also ordered that the costs of the proceedings be paid out of Robert's estate on the solicitor/client basis.

The second case of Re Charles involved an 11 year old boy who suffered severe and irreversible brain damage at the age of four months.  The child 'Charles' (the name given to the minor child to protect his real identity) received a compensation award of $50,000.  Charles was under the care of the Minister for Community Services because of his family circumstances.  The compensation amount of $50,000 was held by the NSW Public Trustee on trust for Charles until he attained the age of 18 years.

The application relating to Charles was made by the Minister for Community Services.  The Minister sought an order authorising a Statutory Will for Charles so as to avoid Charles' estate passing to his parents on intestacy.  The parents were suspected of having caused the injuries to Charles - the injuries were consistent with "Shaken Baby Syndrome".  The proposed Statutory Will for Charles would leave his estate to his sister with substitutional provision for two charities which care for disabled children if his sister did not survive him.

There was clear evidence from the Crown Solicitor that Charles' parents had been informed of the application, were aware of the hearing date and did not wish to be heard in respect of the application.  Justice Palmer was satisfied Charles never had, and never would have, testamentary capacity.  Leave was granted to allow the application to proceed, the application was heard at the same time and the Court approved the terms of the proposed Statutory Will for Charles.  The Court also ordered that the costs of the proceedings be paid out of Charles' estate on the solicitor/client basis.

The judgment of Justice Palmer is important because it:

• examined the history and problems with Statutory Will provisions in other jurisdictions;
• reviewed the relevant NSW Law Reform Commission Report that led to the introduction of the Statutory Will provisions in NSW and examined the relevant provisions; classified Statutory Will applications into the following categories and discussed the proper approach to each type of case:
  
  "lost capacity" cases - where a person having made a will loses testamentary capacity;
  "nil capacity" cases - where a person never had testamentary capacity because of mental infirmity from a very young age;
  "pre-empted capacity" cases - where a person who was still a minor and therefore lacked testamentary capacity was still able to form relationships and express reasonable wishes about property before losing testamentary capacity;
  
  
• provided guidance on the interpretation of the relevant provisions including the meaning of the important words "reasonably likely" used in section 22(b);
• provided guidance about the evidence required to prove testamentary incapacity; and
• provided guidance on the Court practice and procedure in Statutory Will applications.

Jones v Sherlock [2009] NSWSC 246

This case involved a Statutory Will application that did not proceed.  The case highlights the risk that in appropriate cases, the costs of such applications will be borne personally by the person bringing the application and will not be paid out of the incapacitated person's assets.

The case involved a mother seeking a Statutory Will for her son Nicholas who is an incapable person.  Importantly, the proposed Statutory Will would substantially duplicate what would happen if Nicholas died intestate - his estate would be left to his natural mother and adoptive father.

Notice of the Statutory Will application was given to Mr Sherlock who is Nicholas' natural father.  Mr Sherlock intervened and was joined as a defendant.  In the course of the proceedings it appears Mr Sherlock learned for the first time that an adoption order had been made in respect of Nicholas, which had the effect of removing Mr Sherlock's parental rights and authorities.  Notice to Mr Sherlock of the adoption application was dispensed with when the adoption order was made in relation to Nicholas.

The mother sought the Court's leave to discontinue her Statutory Will proceedings.  The Court granted her that leave.  However, the Court ordered the mother to pay Mr Sherlock's costs of the proceedings.  This was because the will duplicated the intestacy position and more significantly, the Court felt the mother's decision to discontinue the Statutory Will application proceedings totally vindicated Mr Sherlock's intervention in the proceedings.

Author: Gerard Basha