In normal circumstances, a person must have testamentary capacity in order to make a valid will. They must understand what it means to make a will, know the assets they possess and are intending to leave to others, and appreciate the people who could make a claim on the estate and the moral obligation they owe them.
However, issues arise where a person has lost this capacity but has an estate which upon their death will be distributed in a way that would be contrary to their wishes and not in their interest if a prior will or the laws of intestacy were applied. In NSW, in such circumstances, another person may make an application to the NSW Supreme Court to have a will made, revoked or altered on behalf of the person who lacks capacity as long as they are still alive.
How to Apply
In order for the Court to make any statutory will, the applicant must obtain the leave of the Court in accordance with section 19 of the Succession Act 2006 (NSW). Section 19(2) sets out a substantial list of information that the applicant must provide the Court (unless the Court directs otherwise) which includes evidence of the person’s lack of capacity, a reasonable estimate of the size of the estate, any available information about the person’s wishes, and a draft of the proposed will, alteration or revocation.
If leave is refused by the Court, that is the end of the matter. However, if leave is granted, as there is usually little further information the Court needs to hear to determine the nature and type of the statutory will that ought to be made, pursuant to section 20 of the Succession Act 2006 (NSW), the Court may proceed to deal with the remaining issues without the need of a second hearing.
When Will Leave be Granted?
Rather than listing circumstances in which leave will be granted, section 22 of the Succession Act 2006 (NSW) sets out five (5) matters the Court must be satisfied with or else leave must be refused. They are:
There is reason to believe the relevant person is or is reasonably likely to be incapable of making a will;
The proposed will, alteration or revocation is or is reasonably likely to be one that would have been made by the relevant person if they had capacity;
It is or may be appropriate for the order to be made;
The applicant for leave is an appropriate person to make the application; and
Adequate steps have been taken to allow representation of persons with a legitimate interest in the application.
Given some of these requirements are more difficult to understand than others, we shall now turn to the two most ambiguous upon which most decisions under these provisions turn.
The Proposed Will, Alteration or Revocation is or is Reasonably Likely to be One That Would Have Been Made by the Relevant Person if They Had Capacity
This requirement is difficult to apply as it turns on the unclear phrase ‘reasonably likely’ and thus must be evaluated in light of a number of decisions which have applied it. The meaning of ‘reasonably likely’ has been considered in a number of decisions in New South Wales Courts. In Re: Fenwick; Application of JR Fenwick [2009] 76 NSWLR 22, Palmer J adjudicated that the phrase meant a “fairly good chance that the result is likely”. Whilst in Re: Will of Jane [2011] NSWSC 624, Hallen AsJ remarked that the phrase required an event to be above a mere possibility, but not quite as high as more likely than not. The New South Wales Court of Appeal considered the phrase for the first time in Small v Phillips No. 2 [2019] NSWCA 268 and Emmet AJA suggested that the use of ‘reasonably’ indicates a degree of uncertainty which goes beyond likelihood, and a ‘margin for judgement’ in considering the incapacitated party’s intentions.
It Is or May be Appropriate for the Order to be Made
This criterion was also afforded some discussion in Small v Phillips. At first instance, the Primary Judge had relied on ambiguity as to the value of the estate, and whether the incapacitated person had any will in place, as reasons to not make an order. However, the Court of Appeal did not agree that these were valid reasons. The Queensland Court of Appeal in GAU v GAV [2016] 1QdR1 ruled that an application brought to vary the terms of a will and remove gifts bequeathed to the testator’s son’s ex-wife did not make the application inappropriate, as it was a change that she would have made herself if she had capacity. Although the precise definition is currently unclear, as the jurisdiction develops more guidance as to what an appropriate reason for an order to be made will come to light.
The jurisdiction afforded to the Supreme Court to make statutory wills is an important development in the Australian legal landscape, as previously where a person had lost capacity there was not a great deal that could be done. As the area is still developing it is important to consider getting legal advice to assist you with these issues if you are experiencing them.
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