Hayes v Hayes HC Gisborne CIV 2007-416-7 [2007] NZHC 1985 (10 August 2007)

Last Updated: 29 December 2012

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

_{CIV 2007-416-000007}

IN THE MATTER OF the Estate of Elizabeth Hanson Hayes

(deceased)

BETWEEN MARTA HAYES Applicant

AND JUDITH MARIAN HAYES Respondent

Hearing: 31 July and 1 August 2007

Appearances: M Hayes in Person

J M Hayes Guerin in Person

R Collins as Amicus

Judgment: 10 August 2007 at 12 noon

_{JUDGMENT OF VENNING J}

This judgment was delivered by me on 10 August 2007 at 12 noon, pursuant to Rule 540(4) of the

High Court Rules.

Registrar/Deputy Registrar

Date...............

Solicitors: Elvidge & Partners, Napier

Copy to: M Hayes, Gisborne

J Hayes Guerin, Gisborne

HAYES V HAYES HC GIS CIV 2007-416-000007 10 August 2007

[1] This is a proceeding under s 61 of the Administration Act 1969 concerning the will made by the deceased Elizabeth Hanson Hayes on 11 July 2006. The deceased died at Gisborne on or about 13 January 2007. She had two daughters, Marta and Judith. The will named Judith as trustee and executor. On 9 February

2007 Marta lodged a caveat against any application for probate of the will by Judith. An order nisi was granted. This hearing under s 61(d) of the Administration Act

1969 was for Marta to show cause why the order nisi should not be made absolute.

Brief factual background

[2] At the date of her death the deceased was 92 years old. In July 2005 when aged 90 she suffered a stroke. She was later diagnosed with expressive aphasia as a consequence of the stroke. Following her discharge from hospital the deceased was in the care of her daughter Judith. She lived with Judith and her husband Richard Guerin until her death.

[3] Prior to the stroke the deceased had lived with her daughter Marta. While living with Marta she had executed a power of attorney in Marta’s favour and had also made a will on 6 May 2005 with the Public Trust. In the May 2005 will she provided for the appointment of Marta as her executor and trustee and gave her residual estate to Marta absolutely. She made no provision for Judith but left a note with the Public Trust to record that:

The Family Protection Act has been explained to me. I have not included Judith in my will as she has adequate resources for her support and it leaves me free to help the other members of the family.

[4] Shortly after moving to live with Judith after her stroke, the deceased made a power of attorney in Judith’s favour on 10 August 2005. She also revoked the former power of attorney in Marta’s favour.

[5] Following the stroke both Marta and Judith made application for orders appointing a property manager and welfare guardian for the deceased. The deceased

was seen by a practitioner from the Kaiti Medical Centre, Dr James on 2 August

2005 in order to determine her competency to sign legal documents. At the time Dr James concluded in a report to Judith’s solicitor Dr Bunbury that he did not consider that she was able to give competent consent.

[6] The deceased was later seen on two occasions, 8 September 2005 and 23

May 2006 by Dr Gouse, a consultant psychiatrist with the Tairawhiti District Health

Board.

[7] When the applications came before the Family Court at Gisborne on 14 June

2006 Ms Judith Hayes withdrew her applications for the appointment of a property manager and welfare guardian. Marta’s two applications to revoke the power of attorney in Judith’s favour were struck out and the Judge also dismissed Marta’s applications for orders to appoint a welfare guardian and property manager for the deceased under the Protection of Personal and Property Rights Act 1988. In her reasons, the District Court Judge relied on Dr Gouse’s evidence, with which Dr James agreed, that the deceased:

... had the capacity to understand the nature and foresee the consequences in respect of matters relating to her personal care and welfare, and has the capacity to communicate decisions in respect of such matters.

[8] Subsequently, on 23 June 2006, Judith took the deceased to see Dr Bunbury at Egan and Kite to discuss a revision of the deceased’s will. Dr Bunbury was unable to obtain instructions from the deceased on that day.

[9] On or about 10 July 2006 Judith contacted Dr Bunbury to advise that the deceased had again been talking to her about making a will and had said that she now wanted to leave everything to her two daughters. Dr Bunbury prepared a will to that effect. He and his secretary Ms Pollock attended the deceased and had the will executed the next day, 11 July 2006. It is that will which is the subject of this hearing.

[10] Marta has represented herself throughout these proceedings. In addition to filing the caveat, she has also sought a grant of probate in solemn form of the will dated 6 May 2005. As was explained in an earlier minute of the Court that was premature. The first issue is whether it is necessary for an application in solemn form for the later will.

[11] Judith was initially represented by Dr Bunbury of Egan and Kite. However, when it became apparent that the challenge by Marta would be maintained Dr Bunbury was required to swear an affidavit as to the circumstances leading to execution of the will as he had witnessed it. As a consequence Dr Bunbury had to withdraw as counsel. Since that date Judith has represented herself as well although using Egan and Kite as an address for service.

[12] Once it became apparent that both Marta and Judith were to represent themselves and given the legal issues involved the Court appointed Mr Collins as amicus curiae to assist the Court. Mr Collins assisted the Court by arranging witnesses, leading evidence, cross-examining certain witnesses and making submissions on the legal issues.

[13] The file has been the subject of a number of call-overs and conferences before this hearing. An order nisi was initially made by Associate Judge Gendall on

28 February 2007. On 24 April 2007 Stevens J noted that it was not possible to proceed with the scheduled hearing that day as Marta had only just filed her affidavits. Stevens J directed that the matter be called again on 15 May and that the order nisi extend until that date.

[14] On 15 May 2007 the matter came before Randerson J who allocated the fixture for 31 July and extended the order nisi until that date.

[15] There then followed a number of pre-trial conferences to ready the matter for hearing during the course of which Dr Bunbury was directed to file an affidavit and then withdrew and Mr Collins was appointed as amicus.

[16] At a hearing under s 61(d) the Court may order:

i) that the order nisi be made absolute or discharged; or

2. that the application for administration be made in solemn form.
   

[17] The issue is whether the caveator can raise sufficient to show that a full inquiry should be made. In Van Der Kaap v Wilson and Ors CA97/04 14 June 2005 the Court of Appeal confirmed:

[34] ... [O]n the return of an order nisi, the High Court usually decides whether the caveator has raised sufficient to show that a full enquiry should be made, see Re Nissenbaum [1939] NZLR 94 and Re Payne (1989) 2 PRNZ

432. For this reason the conventional course is for the caveator to provide such evidence as is readily available to support the caveat and for those propounding the will either to submit to a requirement to proceed in solemn form or alternatively to deny that the caveator has raised enough to prevent the order nisi being made absolute. The High Court does not usually resolve genuinely disputed issues of fact under s 61.

See also: Puru v Puru CIV 2006-404-002491 HC Auckland 28 February 2007

Rodney Hansen J.

[18] In the decision of Van Der Kaap the Court of Appeal heard an appeal from a decision under s 61 where the High Court had made absolute an order nisi, following a full hearing on the basis of the affidavits and additional viva voce evidence. The Court of Appeal observed that the process followed was unusual and that it had led to “what was in effect a mini trial or summary trial”. While observing that the process in that case was unusual the Court was prepared to uphold the result because there had been detailed evidence including cross-examination given in respect of all the matters of concern as would have been the case on an application for probate in solemn form: para [36].

[19] For the reasons that follow that is not the situation in the present case. While there has been rather more evidence on a number of issues than would normally be

the case on a hearing to show cause, there is a substantial and important gap in the evidence.

The evidence

[20] For the caveator, Marta, affidavits were filed by:

• Marta herself (four in total);

• Dr Robert Wolfe;

• Cath Hunter – a clinical psychologist;

• Dorothy Burgess – a member of the Royal New Zealand Foundation of the

Blind;

• Geoff Smythe – president of the Alzheimers Society Gisborne Inc.

[21] At the outset of the hearing Marta sought to file a further affidavit from a Peter Sheridan, a friend and neighbour of hers since March 2006. I declined to accept the affidavit. It was filed outside the time provided by the Court for the filing of affidavits and the only passages in it that could be relevant to this proceeding were two paragraphs in which Mr Sheridan expressed his opinion evidence as to the deceased’s capacity. Mr Sheridan was not qualified to provide such an opinion. I take no account of that affidavit.

[22] Before he stood aside as counsel Dr Bunbury had given notice that Dr Wolfe was required for cross-examination and also submitted Cath Hunter’s affidavit should not be read. The Court directed that Ms Hunter was to be available for cross- examination. She was not. Nor was Dr Wolfe available for cross-examination. Rule 508(3) applies. The affidavits of Dr Robert Wolfe and Cath Hunter are not to be used as evidence except by special leave.

[23] I decline to grant special leave to read Dr Robert Wolfe’s affidavit. Dr Wolfe is based in the United States of America. He proffers an opinion that the deceased did not have testamentary capacity on 11 July 2006 but does so entirely on the basis of information provided to him by other parties. His affidavit also contains matters which deal with issues not directly relevant to the matter before the Court and show that he has adopted a partisan approach.

[24] Ms Cath Hunter is a registered clinical psychologist. She lives at Napier. Her evidence is potentially important. However, her evidence suffers from her reliance in part upon Dr James’ assessment of the deceased. In his oral evidence Dr James resiled somewhat from his earlier opinion based on the assessment that he had carried out on the deceased. In his evidence Dr James explained his reasons for departing from his earlier conclusion. In the circumstances Ms Cath Hunter’s evidence is of limited assistance based as it is on Dr James’ earlier assessment. Further, Marta was not able to offer a reasonable explanation as to why Ms Hunter was not available to give evidence. I decline to read Ms Hunter’s affidavit for the purpose of this proceeding.

[25] The evidence of Ms Burgess and Geoff Smythe was not in issue. They were not required for cross-examination. I have read and considered their evidence. I have also read and considered Marta’s evidence. Marta was of course available for cross-examination and was questioned by both Mr Collins and Judith.

[26] There are a number of passages in Marta’s affidavits that are inadmissible. At times Marta refers in her affidavits to irrelevant and inflammatory matters. I have declined to read or take account of those objectionable passages of her affidavits but I have considered the balance of her affidavits where the evidence is relevant to the matters in issue.

[27] For the respondent Judith did not herself swear an affidavit and chose not to give evidence. The following affidavits were filed by Judith:

• Dr Gouse;

• Ms Pollock;

• Ms Keach – a caregiver for the deceased.

[28] In addition Dr James, who had sworn an affidavit in the earlier Family Court proceedings also gave direct viva voce evidence.

The issues

[29] The focus of the parties in this hearing has been on the issue of the testamentary capacity of the deceased as at 11 July 2006. As Mr Collins pointed out, however, there is also the related and important issue of whether the deceased was arguably under the undue influence of Judith at the time she executed the will on 11

July 2006.

Testamentary Capacity

[30] When testamentary capacity is in issue it must be demonstrated that at the time the will was made the maker of the will had sufficient understanding:

1. that she was making a will and the effect of doing so (the nature of the act and its effects);
   

b) of the extent of the property being disposed of; and

100. of the moral claims to which she ought to give effect when making the testamentary dispositions.
     

See Bishop v O’Dea and Others (unreported CA120/99, 20 October 1999).

[31] Undue influence does not, in this context, amount to improper or wrongful conduct. As was observed by Rodney Hansen J in Puru v Puru:

Undue influence relates to impairment of judgment rather than to improper conduct on the part of the person possessing influence – Carey v Norton [1998] 1 NZLR 661; (1997) 16 FRNZ 686. The burden of proving that influence was in fact exercised is on the party alleging undue influence – Craig v Lamoureux [1920] AC 349 (PC). However, where the person who has prepared a will takes the benefit of it, the rule in Barry v Butlin (1838) 2

Moo PCC 480 applies to cast on the proponent of the will the onus of showing “the righteousness of the transaction” – see Fulton v Andrew (1875) LR 7 HL 448 at 471-472 where Lord Hatherley said:

There is one rule which has always been laid down by the Courts having to deal with wills, and that is, that a person who is instrumental in the framing of a will, as these two persons undoubtedly were, and who obtains a bounty by that will, is placed in a different position from other ordinary legatees who are not called upon to substantiate the truth and honesty of the transaction as regards their legacies. It is enough in their case that the will was read over to the testator and that he was of sound mind and memory and capable of comprehending it. But there is a farther onus upon those who take for their own benefit, after having been instrumental in preparing or obtaining a will. They have thrown upon them the onus of shewing the righteousness of the transaction.

See also the discussion in Tanner v Public Trustee [1973] NZLR 68 (CA).

Decision

[32] After reviewing the authorities, and considering the admissible evidence before the Court I have come to the view that in this case Marta, the caveator, has satisfied the onus on her that there is a seriously arguable question as to the validity of the will dated 11 July 2006, both on the issue of testamentary capacity and the issue of undue influence so that a full inquiry should be made. Judith as the proponent of the will must apply for probate in solemn form. In the circumstances I neither consider it necessary, nor particularly helpful to the Court that may subsequently hear such application to set out my reasons for coming to that view in great detail. It is sufficient to identify a number of matters which have led me to that conclusion.

[33] In Dr Gouse’s opinion, following the stroke the deceased suffered in July

2005, she had “lost her executive ability other than in the home where she is staying, where she can find her way around the house and communicate her own immediate needs”. Dr Gouse accepted the definition put to him that executive ability in this sense is “the ability to plan, organise and make judgments”. As at 8 September 2005 then it is very arguable that the deceased would not have had testamentary capacity as she had no ability to plan or make judgments outside her daily living situation. At the time Dr Gouse also diagnosed the deceased with vascular dementia.

[34] While Dr Gouse considered that the deceased’s condition had improved when he examined her again on 23 May 2006 he accepted that her condition could fluctuate from time to time.

[35] As at 23 June 2006, some one month after Dr Gouse had seen the deceased for the last time and less than three weeks before execution of the will, the deceased’s condition was such that Dr Bunbury was unable to obtain instructions from her for the purpose of preparing a will. Dr Bunbury said that at the time:

The [deceased] appeared to be disoriented by her surroundings, and I was not able to ascertain whether or not she wanted to make a will.

[36] There is the evidence of Dr Bunbury that when he later saw the deceased on

11 July he was satisfied she understood the will had the effect of sharing her estate equally between her two daughters. He said in answer to a question from the Court that:

... she said very clearly I want it [property] shared equally between my daughters and I was able to hear what she was saying. She was very clear in the way she spoke and that is how I came to that understanding.

[37] However the file note dictated on the day Dr Bunbury recorded the matter in a slightly different way:

Judith read and explained the will to [the deceased], noted revoking prior wills, appointing Judith trustee and after paying funeral debts (if any) the balance was left in equal shares to Marta and equal shares to Judy. Mum said “in equal shares”, “let’s do it”.

[38] There was evidence that the deceased was able to repeat or parrot phrases she had heard. Her reference to “in equal shares” as recorded in the file note may have been such repetition.

[39] Next, Dr Gouse accepted that he was not specifically asked to consider the issue of testamentary capacity at any time. Despite that, he said that in his view, testamentary capacity hinged on four things:

• has a person got free will (as opposed to being psychotic or delusional);

• do they have an idea of what they want to give away;

• do they know that they have property, (i.e. whether they have $20,000 or

$100,000); and

• are they aware of moral obligations they may owe to one or more of their children.
  

[40] It was however apparent from his evidence that while Dr Gouse considered those issues generally with the deceased, he did so from the point of view of assessing her vulnerability. Importantly, he confirmed that he did not have any specific discussion about the extent of the deceased’s estate with her.

[41] There was no evidence that the deceased was aware of the extent of her estate. Dr Bunbury did not say that he discussed the extent of the deceased’s estate with her on 11 July. Judith has not given evidence. As the matter stands there is simply a lack of evidence as to whether the deceased was fully aware of the extent of her estate at the time she made her last will.

[42] Finally, on the issue of testamentary capacity, the deceased’s generally frail condition in July 2006 is relevant. If not blind, she could not see to read. While not completely deaf, she had real difficulty with hearing. She still suffered from expressive dysphasia.

[43] In addition there is an issue as to whether there has been undue influence in the present case. Interestingly, when the deceased was with Marta, she made a will in Marta’s favour and also executed a power of attorney in her favour. But that changed after the deceased went to live with Judith and her husband. When living with Judith the deceased executed a power of attorney in favour of Judith and then made the will in issue. One could draw an inference the deceased made decisions to favour one daughter or the other based on her dependence on them which was determined by her living arrangements at the time.

[44] The will of 6 May 2005 left everything to Marta. Shortly after making that will the deceased suffered a stroke. When discharged from hospital she was in Judith’s care. While the evidence is that she was well cared for and happy and content in Judith’s care, nevertheless she was in day to day contact with Judith and undoubtedly dependent upon her.

[45] Next, it was Judith who contacted Dr Bunbury in June 2006 to have the deceased’s will redrawn. At the time Dr Bunbury was the solicitor for Judith and her husband. Dr Bunbury was not the deceased’s solicitor although he had acted on the sale of a property held in both her and Judith’s name.

[46] Although Dr Bunbury was unable to take instructions from the deceased on

23 June, he nevertheless accepted instructions from Judith on 10 July to prepare a will on behalf of the deceased without confirming the instructions with the deceased first. He then attended the deceased at Judith’s home the next day. It appears that he and Ms Pollock attended for at most 20 minutes. Judith was present throughout the whole time that Dr Bunbury and Ms Pollock attended the deceased. In fact Dr Bunbury relied on Judith to sit beside the deceased and communicate the terms of the will to the deceased.

[47] In summary, the deceased was aged 92, vulnerable and reliant on Judith for her care. While she was unable to communicate with Dr Bunbury on 23 June and appeared disoriented at the time, within three weeks she placed her mark on a will prepared by Judith’s solicitor on Judith’s instruction. While on its face the will treats Judith and Marta equally, it does alter the earlier will in Marta’s favour made shortly

before her stroke. The earlier will was made by the Public Trust and provided a reason for not making provision for Judith.

[48] On the evidence before the Court and, significantly, in the absence of evidence from Judith on the issue there is an arguable case that the will was made in circumstances of undue influence as that phrase is used at law. For that reason also probate should be applied for in solemn form.

Result

[49] Application for probate of the last will of the deceased dated 11 July 2006 is to be made in solemn form. While that will to a degree require a rehearing of certain of the issues that were heard before this Court it will also involve further evidence particularly from Judith. It may also enable the evidence of Doctors Gouse and James to be peer reviewed, particularly by an experienced clinical psychologist given the medical condition of the deceased.

[50] I anticipate that in those proceedings Marta will bring a counterclaim for the probate of the will of 6 May 2005 in solemn form so that all issues can be resolved in the one proceeding. This was the procedure contemplated by Barker J in Re Payne (1989) 2 PRNZ 432.

Costs

[51] The parties are unrepresented. Mr Collins was appointed amicus by the Court. At the time of the appointment by the Court I indicated that an order may be made requiring the costs of the amicus to be paid from the estate. Judith did not oppose such order. Marta did oppose Mr Collins’ costs as amicus being paid from the estate. However, Mr Collins’ involvement was necessary. There have been difficult legal and practical issues in this case which Mr Collins has attended to. Without his assistance the hearing could have been substantially longer and have lacked the necessary focus. There is no public interest in these proceedings. The parties should bear Mr Collins’ costs. I make an order under s 99A(1)(b) of the

Judicature Act 1908 for the payment of Mr Collins’ costs as amicus to be a charge on the estate. I leave the actual incidence of those costs between the parties to the Judge that hears the application for probate in solemn form.

Representation

[52] Finally I urge both Marta and Judith to obtain legal representation for the proceedings that will now follow. If advice had been taken and the parties had taken the Court’s encouragement to make an application for probate in solemn form this particular hearing would not have been necessary and the substantive proceedings would be well advanced by now. The substantive proceedings will also raise issues

_{of law that both parties will benefit from the assistance of legal advice on.}

Venning J