Stott v Lyons[2006] QSC 228

SUPREME COURT OF QUEENSLAND

[1] MULLINS J:  The applicant is the widow of Patrick John Stott (“the deceased”) who died on 7 October 2005.  The respondents are the executors of the deceased’s last will and codicil (executed on 15 and 29 September 2005) (“the September wills”) in respect of which they obtained a grant of probate in common form that was sealed on 5 December 2005.  The first named respondent, Mr Lyons, was the deceased’s solicitor, friend and business partner.  The second named respondent, Mr Stott, is the deceased’s brother. 

[2] On 16 May 2006 Fryberg J dismissed an application by the applicant that sought a direction pursuant to r 640(1) of the UCPR that the respondents deposit the grant of probate of the September wills in the registry and that Mr TC Whitney be directed to commence a proceeding claiming a grant of probate in solemn form of the September wills and other consequential orders. 

[3] The applicant has not appealed the decision of Fryberg J, but by application filed on 29 May 2006 seeks an order pursuant to r 668(1)(b) of the UCPR that the order made by Fryberg J on 16 May 2006 be set aside.      

Background facts

[4] The deceased was a successful property developer.  From 2001 the applicant worked in a Thai restaurant conducted by Diamond Moon Pty Ltd (“Diamond Moon”) which was a company associated with the deceased.  The deceased and the applicant commenced a relationship in or about December 2001.  The applicant separated from his first wife (“Mrs Stott”) in March 2003.  The applicant and Mrs Stott had four daughters (“the beneficiaries”) who are the primary beneficiaries under the testamentary trust created in the September wills and who appear on this application in support of the respondents.   The deceased was diagnosed with leukaemia in September 2003.  Mrs Stott filed an application in the Family Court in January 2005 to finalise property matters between the deceased and her.  The deceased instructed solicitor Mr Gordon Harris to act on his behalf in relation to the property proceedings brought by Mrs Stott.

[5] In April 2005 the deceased underwent a bone marrow transplant.  The applicant and the deceased were married on 7 August 2005, which was a few days before the applicant found out that the bone marrow transplant had been unsuccessful.  On 19 August 2005 the deceased was prescribed the drug Interferon by his treating doctor, Dr Durrant. 

[6] The deceased attended on Mr Lyons at his office on 23 August 2005.  Mr Lyons took instructions for a will from the deceased that he wished to leave his estate to his four daughters in equal shares and that Mrs Stott would be more than adequately looked after as a result of the family law property redistribution.  Mr Lyons prepared the will (which was only a little over a page long) immediately and organised for a staff member to be the second witness to the execution of the will with Mr Lyons.  Mr Lyons then conferred with the applicant and the deceased about other business.  A business contract for the sale of the business from Diamond Moon to the applicant was then signed by the deceased on behalf of Diamond Moon and the applicant.   At the same meeting a lease of the freehold from which the restaurant was conducted was executed by the deceased on behalf of another company of which he was the director, PJS Property Group Pty Ltd (“PJS”), in favour of the applicant.  The deceased also instructed Mr Lyons to prepare transfers on behalf of PJS of the house property at 65 Anning Avenue, Caloundra and the freehold from which the restaurant was conducted which the deceased signed as the director of PJS and requested Mr Lyons to hold.  The transfer of the Anning Avenue property was in favour of the applicant and the transfer of the restaurant freehold property was in favour of Mr Lyons as trustee for the deceased’s daughters.

[7] After this will was signed, Mr Lyons had misgivings about having witnessed it, in view of the fact that he was named as the executor.  Mr Lyons then organised for the deceased to re-execute a will in the same form in front of two witnesses, excluding Mr Lyons.  That occurred on 25 August 2005.  I will refer to the wills executed by the deceased on 23 and 25 August 2005 as “the August wills”.

[8] Mr Lyons deposed to having a conversation with the deceased in early September 2005 in which the deceased told Mr Lyons that it had been suggested to him that he should leave his estate to a testamentary trust under which his daughters would be the beneficiaries.  Mr Lyons prepared a will to carry out these instructions and arranged for the deceased to see him on 12 September 2005.  This will was witnessed by Mr Lyons and one of his employees.  Mr Lyons again had misgivings after this will was signed about having been a witness.  He then organised for another copy of the will to be printed in identical terms to that which had been executed on 12 September 2005 and that was signed by the deceased on 15 September 2005 in the presence of two witnesses.  On that occasion the deceased on behalf of PJS executed a fresh transfer of the fee simple of the property at 65 Anning Avenue to the applicant and a fresh transfer of the restaurant freehold to Mr Lyons as trustee (for the deceased’s daughters).  Mr Lyons had these transfers reprinted and re-executed, as when they were signed by the deceased on 23 August 2005 Mr Lyons had witnessed that execution which was unnecessary and he took the opportunity to have the transfers re-executed when the deceased returned to his office.  Subsequent to 15 September 2005 the deceased instructed Mr Lyons that he did not wish to proceed with the contract for the sale of the restaurant business from Diamond Moon to the applicant, he had arranged with his accountant for the shares in Diamond Moon to be transferred the applicant and that the business contract was to be terminated.  On or after 15 September 2005 the deceased also instructed Mr Lyons to destroy all wills which he had made prior to 15 September 2005 to avoid confusion about which was his last will.  Mr Lyons carried out those instructions.

[9] On 25 September 2005 the deceased gave Mr Lyons instructions that he wanted to add his brother as an executor to his will.  Mr Lyons prepared a codicil and took it to the deceased who was in hospital on 29 September 2005.  Mr Harris and Mr Lyons were the witnesses to the execution of the codicil.  That codicil together with the will executed on 15 September 2005 comprise the September wills.  On the same occasion that the codicil was signed by the deceased, Mr Harris took instructions from the deceased in relation to his family law proceeding. That is referred to in the letter that Mr Harris wrote to the deceased on 30 September 2005, although the letter does not distinguish between those instructions which were given on 29 September 2005 and those which had been given by the deceased in earlier telephone calls. 

[10] Extensive affidavits on behalf of the applicant, the respondents and the beneficiaries were filed for the purpose of the application that was heard on 16 May 2006.  I do not propose to summarise the entirety of their contents.  It is sufficient to say that the applicant’s case based on the affidavits on which she relied was that the deceased was throughout August 2005 until his death a seriously ill man and that his relative capacity was no different between the making of the August wills and the making of the September wills.  The affidavits relied on by the respondents and the beneficiaries portray a man who was ill from the time he married the applicant, but who remained alert and capable of making decisions in relation to the disposition of his estate at least up until the signing of the codicil on 29 September 2005.      

Decision of Fryberg J

[11] Fryberg J relied on r 640(2) to dispose of the application made under r 640(1) of the UCPR on the basis that the applicant had not shown that she had an interest in the administration of the deceased’s estate, or a reasonable prospect of establishing an interest in the administration of the estate.  Fryberg J found that the applicant needed to show that she was a person who would take upon an intestacy which required her to show that not only would the respondents fail in proving the September wills, but that there was a reasonable prospect of a finding that the August wills were invalid.

[12] Fryberg J found that the evidence of the applicant and Mr Butler (who was a friend of the deceased) put together suggested that the depression from which the deceased suffered after commencing on Interferon did not have any substantial onset until 27 August 2005 which was after the August wills were executed.  Fryberg J also noted that was confirmed by the evidence of Dr Durrant who had seen the deceased frequently throughout August and September 2005 and observed him to present and behave as “astute, lucid and aware of what was going on around him”.  Fryberg J also referred to the evidence of Dr Durrant that the deceased remained mentally acute and aware until the last two days of his life and that Dr Durrant did prescribe an anti-depressant for the deceased on 30 August 2005. 

[13] On all the evidence, Fryberg J came to the conclusion that the applicant did not have a reasonable prospect of demonstrating that on an application for probate in solemn form of the August wills, a proponent of those wills would not be able to satisfy the requirements necessary to obtain probate of the August wills.  Although it was not necessary because of the basis on which Fryberg J disposed of the application, he made the observation that the evidence regarding the absence of capacity of the testator and absence of knowledge or approval of the September wills seemed “quite flimsy” and “shadowy”. 

Hearing of this application

[14] The solicitors for the respondents had endeavoured to obtain a statement from Mr Harris for the purpose of the application that was heard on 16 May 2006, as Mr Harris was one of the attesting witnesses to the codicil executed on 29 September 2005.  The applicant’s solicitors had also sought an affidavit from Mr Harris.  Mr Harris had sent a letter to the solicitors for both the applicant and the respondents on 28 April 2006 advising that he would only give an affidavit, if he were released from the confidentiality and legal professional privilege and duties imposed on him and required the written consent of the respondents as executors and the applicant as the possible future administrator.  After that letter was received by the respondents’ solicitors, they endeavoured to speak to Mr Harris to arrange an appointment to take a statement from him, but he was not prepared to do so.

[15] For the purpose of the current application, Mr Harris swore an affidavit on 26 May 2006 that was filed on 29 May 2006.  He stated that on 24 May 2006 he was shown an affidavit of Mr Lyons sworn on 8 May 2006 (which was filed on 10 May 2006) and he was concerned that the matters deposed to by Mr Lyons as to the deceased’s instruction regarding the contents of the will executed on 23 August 2005 conflicted with what the deceased had told him in a conversation later that same day.  The passages of that affidavit that were relied on to support the application to set aside the order made by Fryberg J were:

“12.On 23 August 2005 I rang Pat on his mobile telephone, which was the normal way I contacted him.  On the same day Pat returned my call and I discussed with him his health and he told me that the prognosis was not very good as the leukaemia had returned.  I have checked my telephone records.  I am able to confirm that I phoned Pat at 12.27 pm on that day.

13. During this conversation he also told me that he had redrafted his will and from the conversation I believed it had happened earlier that day.  He told me that Dao was to get his home at 65 Anning Avenue and the Thai restaurant.  Prue was to get everything else.  I could tell from his conversation that Pat was a bit down, however he was coherent and clear in his conversation with me.
14. In the same conversation I then explained to Pat the provisions of section 81 of the Family Law Act 1975 which require as far as practical a complete separation of the financial affairs between Prue and himself.  I told him the will defeated the purpose of the family law action and suggested he needed to put in place a testamentary trust for the children from his part of the property settlement.
15. He then indicated to me, apparently in response to my advice, that he needed to change his Will to give Prue 50%, Dao her share and the balance of his estate to his children by way of a testamentary trust.  He said that he needed to think about it.  I suggested that he contact an expert in estate planning and gave him the name of a person I knew.  Pat did not appear, from what he was telling me, confident or certain about his testamentary plans.  I did not speak again with Pat about his will until 13 September 2005.
16. On 13 September 2005 I attended Pat’s residence at 65 Anning Avenue, Caloundra.  I waited about one hour for Pat to leave the bedroom to see me in the lounge room.  I remember that Pat’s sister was there, I no longer recall her name.  I spoke with her whilst I was waiting for Pat.
17. Pat told me he was feeling terrible and I could see he had great difficulty in moving and he was hunched over.  I helped Pat to sit down.  We sat together on his lounge.  I had documents which I needed Pat to sign and on handing them to him he asked me to read them and tell him what they were about.  He told me that he had great difficulty in reading or even watching a movie on TV.
18. I then discussed his Will with him.  He said to me that he was signing a new will soon and that this would give 50% of the estate to Prue, Dao would get 65 Anning Avenue, the property at Mission Beach and the Thai restaurant and the rest of the estate would be tied up in a testamentary trust for the kids.”

[16] Mr Harris had made a diary note dated 23 August 2005 which he exhibited to his affidavit filed on 29 May 2006.  That diary note stated:

STOTT

23/8/05

10 minutes

Rang Pat

- Discussed with him his health.

- The prognosis is not very good.  The leukaemia has returned.

- he has re drafted his will – Dao gets his house (65 Anning) and the Restaurant

- Prue gets everything else.

- Needs a trust for the kids

- defeats whole purpose

  - don’t think Court will like that

- needs to change will

- Pru 50%

- Dao – her share

- Kids – the rest

Testamentary trust for the kids

- needs to think about it

- an expert in trust –

- will contact him if necessary

- get back to me

[17] Mr Harris was not required for cross-examination at the hearing on 15 June 2006.  During the course of submissions at this hearing, I expressed reservations about the content of Mr Harris’ affidavit including the manner in which he set out his recollection of conversations with the deceased and the omission of other observations that Mr Harris was in a position to make, such as his failure to record his observations of the deceased at the time that the deceased made the codicil on 29 September 2005 and gave further instructions to Mr Harris in relation to his family law proceeding.  It was also apparent that Mr Harris’ evidence of conversations which he had with the deceased on 23 August and 13 September 2005 about the contents of the deceased’s wills had to be considered in the context that Mr Harris was not the solicitor engaged by the deceased to draw his will.  It was a reasonable inference that the deceased was advising Mr Harris on 23 August 2005 about what he was doing in relation to his will (and other transactions) as that was relevant to the negotiations being undertaken on the deceased’s behalf by Mr Harris with respect to the family law dispute with Mrs Stott.

[18] Submissions were made on behalf of the applicants and the respondents respectively as to what interpretation should be given to Mr Harris’ diary note dated 23 August 2005 and his affidavit.  The interpretations differed.  This was not assisted by Mr Harris’ failure to set out his recollection of what the deceased said to him in direct speech.  It was also not assisted by the ambiguities in what was disclosed in the affidavit.  One example is found in paragraph 13 of the affidavit.  It is not clear from what is recorded in that paragraph as “He told me that Dao was to get his home at 65 Anning Avenue and the Thai restaurant” whether Mr Harris was saying that the deceased said that he had given the applicant his property at Anning Avenue and the Thai restarant under his will or whether the deceased was telling Mr Harris of the transactions that he had effected, apart from his will.  In view of the fact that the house at Anning Avenue was owned by PJS and the restaurant business was owned by Diamond Moon, Mr Mullins of Senior Counsel for the applicant conceded that it was an interpretation that was open to be given to what Mr Harris had recorded that the deceased was informing him of transactions other than those provided for in his will.  Similar comments can be made about what Mr Harris has set out in paragraph 18 of his affidavit about what the deceased said to Mr Harris on 13 September 2005 in relation to the will that “he was signing … soon”. 

[19] I therefore expressed concern during the hearing of this application that Mr Harris’ evidence on the critical issues had been presented in a way as to leave it open to differing interpretations as to what he was saying the deceased said about the content of his August wills and the September wills.  I therefore raised with the parties whether the opportunity should be given for a further affidavit to be obtained by the applicant from Mr Harris and for the respondents and the beneficiaries to have the opportunity to cross-examine him.  The applicant through her Counsel indicated a willingness to take the opportunity to adduce further evidence from Mr Harris.    

[20] At the conclusion of the hearing on 15 June 2006, I therefore directed that the applicant file and serve a further affidavit of Mr Harris that dealt with the same matters that were covered in his affidavit filed on 29 May 2006, but in a form which complied with the requirements for evidence-in-chief, and adjourned the hearing to continue before me on 21 August 2006. 

[21] The applicant did not file a further affidavit of Mr Harris.  The parties therefore consented to the matter being decided by me on the material that was before me on the hearing on 15 June 2006, without the need for a further appearance on 21 August 2006.  The parties therefore agreed to orders being made by consent (which were made on 18 August 2006) vacating the directions that I had made on 15 June 2006, vacating the further hearing date of 21 August 2006, ordering that the applicant pay the costs of the respondents and the beneficiaries occasioned by the adjournment of the application of 15 June 2006 and the directions for further hearing on 21 August 2006 and making the letter from the solicitors for each of the parties addressed to my Associate dated 15 August 2006 exhibit 5 for the purpose of the application.  This letter contains an acknowledgment on behalf of the applicant that it is open to draw the inference from the failure of the applicant to file a further affidavit as directed from Mr Harris that the further evidence which Mr Harris could have given by way of clarification of his earlier affidavit would not have assisted the applicant.

Jurisdiction under r 668 UCPR

[22] The jurisdiction conferred by r 668(1)(b) of the UCPR allows the court to exercise its discretion to set aside an order that has been made by the court in the circumstances that are covered by that provision.  Rule 668 is the re-enactment of O45 r 1 of the Rules of the Supreme Court 1900.  It has been given an expansive operation:  KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 QdR 13, 20.  The expression in r 668(1)(b) “would have entitled” encompasses the possibility of obtaining the relevant relief and is not limited to an absolute right to relief:  Rankin v Agen Biomedical Ltd [1999] 2 QdR 435, 437-438[9].

[23] The first issue is what are the relevant facts for the purpose of considering the application of r 668(1)(b).  The applicant seeks to characterise her interpretation of Mr Harris’ evidence as the relevant facts.  The applicant asserts that the relevant facts discovered by her since 16 May 2006 are that in a telephone conversation between the deceased and Mr Harris on the afternoon of 23 August 2005, the deceased told Mr Harris he had made a will earlier that day containing provisions reflecting a dispositive intent which prima facie conflicted with and was contrary to the instructions for and contents of the August wills and that a similar conversation occurred on 13 September 2005 in relation to the contents of the will executed on 12 September 2005 which was contrary to the content of the will executed on 12 September 2005. 

[24] It is not appropriate to treat one possible interpretation of an affidavit which contains ambiguities as constituting the relevant facts, particularly in view of the inference that the parties have agreed can be drawn from the failure of the applicant to take advantage of the opportunity to seek a further affidavit from Mr Harris to address the criticisms that were made about his evidence at the hearing on 15 June 2006.  What has occurred since the judgment of Fryberg J is that Mr Harris’ affidavit has been procured and filed.  In the circumstances it is the provision of the evidence of Mr Harris as set out in that affidavit (rather than any particular interpretation of it) that constitutes the relevant facts for the purpose of considering the application of r 668(1)(b).     

[25] The next issue for determination on this application is whether Mr Harris’ evidence found in his affidavit filed on 29 May 2006 falls within the category of facts described in r 668(1)(b) of the UCPR.  Another way of asking that question is whether the outcome of the hearing of the application would have been different if Mr Harris’ affidavit had been available for that hearing.

[26] It was always going to be difficult for the applicant to succeed on the application under r 640, because she not only had to show that there was a reasonable prospect of the respondents failing to prove the wills made on 12 and 15 September 2005 in solemn form, but that there was a reasonable prospect of the respondents being unable to prove the relatively straightforward wills made on 23 and 25 August 2005 in solemn form.  It was conceded on the applicant’s behalf on the hearing of this application that she had a heavy onus to discharge in order to obtain an order setting aside the order made on 16 May 2006.

[27] Mr Harris’ evidence (even with its deficiencies) is particularly relevant on the issues of whether the deceased had knowledge of and approved the contents of his wills made respectively on 23 August and 12 September 2005.  Even though it requires scrutiny because of its ambiguities and the fact that during the same period Mr Harris was able to take instructions from the deceased in relation to his family law proceeding, it cannot be rejected on a summary determination of the issues on this application.  It does have to be weighed, however, with the other evidence that was adduced before Fryberg J.  The preponderance of that evidence strongly supported the dismissal of the applicant’s application.  I am therefore not satisfied that the applicant has shown that, taking into account Mr Harris’ evidence, there is a reasonable prospect that the respondents would fail in proving either the August wills, the will of 12 September 2005 or the September wills in solemn form.

[28] The applicant has therefore failed at the threshold in showing that Mr Harris’ evidence constitutes facts for the purpose of r 668(1)(b) of the UCPR, as she cannot show that the Harris’ evidence would have entitled her to a different order on the application under r 640.  It is therefore unnecessary to consider the discretionary issues relevant to granting relief under r 668(2).

     Order

[29] It follows that the order which should be made is that the application filed on 29 May 2006 is dismissed. 

[30] As the applicant has been unsuccessful, she should pay at least the costs of the respondents.  I will hear submissions from all the parties, however, before making any orders as to costs.