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- Unreported Judgment
SUPREME COURT OF QUEENSLAND
Re MTX  QSC 117
Supreme Court at Brisbane
DELIVERED EX TEMPORE ON:
31 March 2020
31 March 2020
SUCCESSION – MAKING OF A WILL – TESTAMENTARY CAPACITY – LOSS OR LACK OF CAPACITY AND STATUTORY WILLS – where the applicant seeks the making of a statutory will for his wife – where the wife has been diagnosed with Alzheimer’s dementia – where the couple have four children – where they have historically made corresponding wills in accordance with financial and tax planning advice – where, following such an advice, the applicant made an amendment to his will – where that amendment unintentionally resulted in his wife’s current will providing an inequitable outcome for the children – where he applicant’s wife does not now have capacity to amend her will – whether there is satisfactory evidence of lack of testamentary capacity – whether there is an estimate of the size and character of the relevant estate – whether there is a draft of the proposed will – whether there is evidence of the applicant’s wife’s wishes, and evidence provided in relation to the terms of any will previously made by her – whether there is evidence available in relation to whether there was a gift to a charitable or other purpose that would be reasonably expected to be made by her – whether the statutory will ought to be made in the terms sought
Succession Act 1981 (Qld), s 21, s 22, s 23, s 24, s 25
ADT v LRT  QSC 169, cited
Re APB; ex parte Sheehy  QSC 201, cited
Re Matsis; Charalambous v Charalambous & Ors  QSC 349, cited
L Nevison for the applicant
Short Punch & Greatorix Lawyers for the applicant
HER HONOUR (delivered ex tempore): This is an application for the making of a statutory will for the applicant’s wife. The relevant provisions are sections 21 to 25 of the Succession Act 1981 (Qld). Section 21 provides that:
“(1) The court may, on application, make an order authorising –
- (a)a will to be made or altered, in the terms stated by the court, on behalf of a person without testamentary capacity; or
- (b)a will or part of a will to be revoked on behalf of a person without testamentary capacity.
- (2)The court may make the order only if –
- (a)the person in relation to whom the order is sought lacks testamentary capacity; and
- (b)the person is alive when the order is made; and
- (c)the court has approved the proposed will, alteration or revocation
- (4)The court may make the order on the conditions the court considers appropriate.”
Pursuant to section 22, a person may apply for an order under section 21 only with the court’s leave, and section 22 provides that the court can hear an application for an order under section 21 with or immediately after the application for leave. The information required to be provided to the court is then set out in section 23. It provides the material that the court is required to consider. In particular, there must be satisfactory evidence of lack of testamentary capacity. There has to also be an estimate of the size and character of the person’s estate. There has to be a draft of the proposed will. There needs to be evidence of the person’s wishes, and there has to be evidence provided in relation to the terms of any will previously made by the person. There is also the requirement that there should be evidence available in relation to whether there was a gift to a charitable or other purpose that would be reasonably expected to be made by the person. There are other factors that are then set out in section 23 which must be addressed, but the items that I have mentioned are the more significant ones.
Pursuant to section 24, the court may only give leave under section 22 if the court is satisfied the applicant for leave is an appropriate person, adequate steps have been taken to allow representation of all persons with a proper interest in the application to be advised of the application, and that there are reasonable grounds for believing that the person does not have testamentary capacity.
By way of background, the affidavit material in support of the application, which I have read, indicates that the applicant is 90. He is in good health. He and his wife have been married for almost 68 years. She is currently 91 and was born in May 1928. The material indicates that she was diagnosed with Alzheimer’s dementia in 2015. The applicant is her attorney pursuant to an EPA dated 16 August 2016. He is her primary carer. They have four children who are surviving and who are financially independent, namely Daughter A, Daughter B, Son A and Son B. There was a further child who died in 2008 and left no issue.
The applicant and his wife currently reside at their home at Tallai. He provides everyday care. The affidavit material indicates that the applicant’s wife was initially diagnosed in 2015 with dementia by her general practitioner. That was confirmed by a geriatrician who has treated her since 2016. The indication is that she will never regain capacity for the purposes of making or amending her will. The applicant’s wife assisted on the farm and maintained the bookkeeping work. The family purchased a farm in the hinterlands in the early part of their marriage. The applicant’s wife, apart from doing the bookkeeping, left the commercial side of the farm to the applicant and it would seem placed absolute confidence in him to make the appropriate decisions in relation to property management, asset protection and succession planning. The material indicates that they currently jointly own a share portfolio which has an approximate value in excess of seven million dollars. They also have a residence in the hinterlands which has a value in the order of one million dollars. They hold assets in a number of entities forming part of a Group. The applicant is sole director and he and his wife have 30 shares.
The applicant’s wife made her last will on 28 April 2008. That will was made by Short Punch & Greatorix. They have been the solicitors for the applicant and his wife for over 40 years. At the time the applicant and his wife made corresponding wills and they had done that historically. Those wills date back to 1997, 2001, 2004, 2007 and 2008. I accept that the applicant’s wife had capacity to make the 2008 will, but she has not updated her will since then and now lacks capacity to do so. The applicant has updated his will numerous times; he made his last will on the 2nd of December 2019.
By his wife’s 2008 will, the applicant was appointed as sole executor and, in lieu of him surviving, a long-term financial advisor and friend of the couple was to act as executor, along with two of their children. By her 2008 will, the applicant’s wife made a number of gifts of shares. Firstly, if she predeceases the applicant, then her 75 shares in a particular entity go to Son B. If the applicant predeceases his wife, then she inherits 25 shares from his estate and the total 100 shares held by her are to be shared equally between Daughter A and Son B. The will provided that the applicant’s wife’s one share in another entity went to Son B and that her 30 shares in another entity went to the other three children equally as tenants in common.
The applicant’s wife does not now have capacity to amend her will. However, the applicant has amended his will and considered the gifts made in his wife’s current will and tailored changes to make up for shortfalls in her 2008 will to ensure overall equality between the four surviving children. Each of their children utilised discretionary family trusts in the management of their affairs.
As Son B receives the wife’s one share in a particular entity, the applicant gifted Son B’s Family Trust two shares in that entity to equalise their shareholding between the four children. They therefore have three shares each. By the wife’s 2008 will, the other three children receive her 30 shares in a further entity, being 10 shares each. The applicant has therefore gifted five shares each to those three children’s respective family trusts and the balance of 15 shares to Son B’s Family Trust to equalise the shareholding between the children, namely, 15 shares each.
Consistent with conduct over the years with respect to the management of their affairs, the applicant engaged KPMG to provide financial and tax planning advice having regard to tax issues in relation to the gifts to the four children under his and his wife’s respective wills, and KPMG provided an opinion in writing dated 13 January 2020. That advice recommends that clause 8 of the wife’s 2008 will be amended to distribute her 30 shares in one entity to the trustees of Son A, Daughter A and Daughter B’s respective family discretionary trusts, as opposed to being an absolute gift to them directly. It would seem from that advice that by gifting to the discretionary trusts, the inheritance of the four children will be more flexible and more beneficial from the taxation perspective, provide greater tax planning flexibility and be more likely to maintain the value of the assets into their future for the benefit of future generations. The applicant has made the changes recommended by KPMG at clauses 5.2(a) and 8 of his will. And whilst the applicant has been able to give 15 shares in one entity to Son B’s Family Trust, his wife’s current will unintentionally results in an inequitable outcome for the other three children as a consequence of the gift of his wife’s shares in that entity to them directly. This, it would seem, is the crux of the reason to make the statutory will.
A copy of the proposed will for the applicant’s wife is exhibited to the applicant’s affidavit. I have read that affidavit. The evidence is that it was their routine practice to seek legal and financial advice when amending their wills and their practice was to structure their assets to ensure equality between their children and to plan for future generational ownership. The applicant’s wife was never overly concerned with the specific terms of the wills or structures. However, the discussions were always aimed at ensuring their family’s legacy was protected and maintained for the benefit of the children and grandchildren. The applicant avers that he believes that his wife, if she had the ability to do so, would accept the advice from KPMG and Short Punch & Greatorix and amend her will to mirror the amendments that he has made to his will to incorporate Son A, Daughter A and Daughter B’s respective discretionary trusts as beneficiaries in lieu of them personally and that his wife would be supportive of any measure which provided their children with greater financial benefit and asset protection. These arrangements are being made not to defeat any potential creditor, but it is clearly for the benefit of the children.
Whilst the applicant has made provision for charity in his will, his wife never had any specific provision for charities under her will. The persons directly affected by the will are the four children. They do not require personal financial support and remain as beneficiaries under the wife’s will. They also support this application for the making of the statutory will. I accept there is some urgency, given the applicant’s wife’s age, and I accept that the relevant case law is well-known. It has been set out in a number of decisions, most comprehensively by Applegarth J in Re APB; ex parte Sheehy  QSC 201. I am also aware of the considerations that were addressed by Flanagan J in ADT v LRT  QSC 169 where there were real issues concerned in that case. I also address the law in an earlier decision of Re Matsis; Charalambous v Charalambous & Ors  QSC 349. In that early case, the matter was unopposed and it was to ensure provisions were made for the benefit of the grandsons of Mr Matsis. There was discussion by Flanagan J in that case in relation to applications being made for the purpose of defeating creditors, and in the case before Flanagan J it was clear that the impetus for the use of the testamentary trust was the breakdown of a marriage and the attempt to place, beyond the property settlement in the Family Court, the assets that were being gifted to a son, and so the considerations were quite different.
Having considered the provisions of sections 21, 22, 23 and 24, I am satisfied that leave should be granted. I am satisfied there are good reasons for the application. I am satisfied there is evidence in relation to the applicant’s wife’s lack of testamentary capacity and that she will not regain capacity. I have evidence before me of the size and character of the estate. I have seen the draft will. The evidence is that the will is consistent with her previous wishes to ensure the children were treated on an equal footing. The prior will is in evidence. The proposed will is consistent. There is no evidence of any potential application provision under section 41 and there is no evidence that the applicant’s wife had made any previous gifts to charity. I am satisfied that the persons for whom provision might have been made have been considered and provided for and the persons entitled on intestacy have been considered and consent. I am also satisfied that the applicant is an appropriate person, that all persons with an interest have been served and that, in all of the circumstances, I am satisfied it is appropriate for an order to be made. The proposed will is not intended to defeat creditors or the interests of any party and it is pursued to ensure equality in the treatment of all four children.
I am therefore satisfied there should be orders made in the terms of the draft, initialled by me and placed with the file. I am also satisfied that it is in the interests of preserving confidentiality out of respect for the dignity and privacy of the applicant’s wife that a de-identification order should be made. So I am satisfied, therefore, there should be orders in terms of the draft, initialled by me and placed with the file.
- Published Case Name:
- Shortened Case Name:
 QSC 117
31 Mar 2020