Can the relatives be cut out of a will and everything left to the neighbours instead?
Updated: 8 hours ago
Gray v Hart & Ors  NSWSC 1435 (27 November 2012)
Facts: Mrs Harris made a will appointing her niece, Coralie Hart, and a solicitor as her executors on 9 July 1996. Mrs Harris left $100,000 to each of her two sisters and the rest of her estate to her niece. Both sisters pre-deceased Mrs Harris, leaving the niece as the sole beneficiary of the estate should Mrs Harris pass away. In 2004, Mrs Harris was discharged to a nursing home and was admitted to hospital with a bowel obstruction. During her time in hospital, she was also diagnosed with moderately severe dementia. On 4 April 2005, Mrs Harris made a will that revoked all previous wills. In this new will, Mrs Harris named her next-door neighbours, Mr and Mrs Gray, as her beneficiaries. Mr Gray pre-deceased Mrs Harris, leaving Mrs Gray as the sole beneficiary. Mrs Harris passed away on 17 September 2009. Mrs Gray applied for grant of probate in relation to the April 2005 will. The niece defended this application and sought grant of probate in relation to the 1996 will.
Issue: Whether Mrs Harris had testamentary capacity to revoke her 1996 will and to make her April 2005 will.
Held: The Supreme Court of New South Wales held the April 2005 will valid and that Mrs Harris did have testamentary capacity to revoke her 1996 will and make a new will.
Reasoning: The onus lies on Mrs Gray to establish that Mrs Harris had the requisite testamentary capacity. This is because Mrs Gray is the person seeking to uphold the revocation of the 1996 will. Mrs Gray thus had to establish four criteria in accordance with the testamentary capacity test outlined in Banks v Goodfellow (1870) LR 5 QB 549. Firstly, that Mrs Harris understood that nature of the act of making a will and the effect of making a will. Secondly, that Mrs Harris understood, at least in general terms, the nature and extent of the property of which she was disposing. Thirdly, that Mrs Harris was aware of those who might be thought to have a claim upon her testamentary bounty. Lastly, that Mrs Harris had the ability to evaluate and discriminate between the respective strengths of the claims of such persons. The fact that Mrs Harris suffered from dementia was not sufficient in itself to provide a basis for lacked testamentary capacity.
Evidence from a geriatrician that Mrs Harris was delusional was rejected by the court. This was done so on the basis that delusion, for the purposes of testamentary capacity, is ‘a fixed and incorrigible false belief which could not be reasoned out of’ as per Bull v Fulton (1942) 66 CLR 295. Mrs Harris’ belief that her family members were not acting in her best interests and were ‘out to get her money’ was held to be a reasonable belief to hold and was not an irrational view.
Evidence from a neurologist that Mrs Harris does have testamentary capacity was accepted by the court. In 2005, Mrs Harris failed to recognise she had outstanding tax debts since 1999. Professor Watson said that Mrs Harris’ failure to lodge tax returns could not be attributed to dementia, unless the dementia was at least moderately severe (at 357). He further noted that if such failures were attributable to dementia then Mrs Harris’ would not have been able to attend to the payment of other bills such as council rates and her car registration, which she in fact continued to keep up with up to 2005. Her inaction did not mean she was suffering from dementia.
The court therefore did not accept the evidence that determined Mrs Harris to have dementia and consequently that Mrs Harris lacked capacity. Indeed, Mrs Harris had a vitamin B12 deficiency instead. The court thus accepted Professor Watson’s evidence that ‘none of Mrs Harris’ medical conditions, nor her general mental condition, was likely to have affected her ability to understand the nature of the act of making a will and its effect, nor to understand the extent of the property of which she was disposing, nor to identify to claims which she ought to consider, nor the value of the claims to which she ought to give effect’ (at 199).
Ultimately, Mrs Harris satisfied the essential conditions for will-making capacity as described in Banks v Goodfellow. Mrs Harris had the capacity to revoke her 1996 will that named her niece the beneficiary, and to make the April 2005 will that named her next-door neighbour, Mrs Gray, the beneficiary. The court found in favour of Mrs Gray and granted letters of administration to her.
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