Application of Mary-Anne Lukic

HIS HONOUR: This is an application under s 19 of the Succession Act 2006 (NSW) for leave to apply for an order under s 18 of that Act authorising the making of a will for a person who lacks testamentary capacity. If leave is given the plaintiff seeks an order under s 18 that the Court authorise the making of a new will for that person. I will call the person for whom the Court is asked to make a new will, Hanna.

Hanna was born in 1922 and is currently aged 93. She was admitted to a nursing home on 5 June 2013 and resides in a dementia specific unit. I am satisfied from the report of Professor Richard Lindley, a professor of geriatric medicine, that Hanna lacks testamentary capacity. Professor Lindley says that her lack of testamentary capacity is very clear and unambiguous.

Hanna made a will as recently as 30 April 2011. At the time she made her will she was married to her husband Cecil. They had no children. She and Cecil made mirror wills in which each left their property to their spouse if their spouse survived them with a gift over in the same terms if their spouse did not survive. Cecil died on 1 May 2012.

Hanna's will relevantly provides:

Ms Mary-Anne Julieanna Romaine Lukic (to whom I will refer without disrespect as Mary-Anne) was the daughter of Mrs Mary-Anne Joybell Ivoreen Andreopoulos (to whom I shall refer without disrespect as Ivoreen). Ivoreen died on 22 January 2013 aged 56. Mrs Irene Mihopoulos (to whom I will refer without disrespect as Irene) is currently aged 68. Under the current will Irene will be entitled to the entirety of Hanna's estate if she survives Hanna. If she does not survive Hanna then the estate would pass on intestacy. It appears that Hanna's closest relative is a niece, Karin Scholz, who lives in Germany. Hanna is of German origin. She emigrated to Australia after the Second World War.

Mary-Anne is the plaintiff. She is also Hanna's attorney under an enduring power of attorney given on 30 April 2011, being the same day as that on which Hanna made her will.

Mary-Anne proposed that a new will be made for Hanna that would provide for Mary-Anne to be the executor provided that if she predeceased Hanna that Irene would be appointed executor in her stead. She proposed that the new will would revoke all previous wills and that the balance of the estate, after payment of debts, funeral and testamentary expenses, would be paid to herself and Irene in equal shares with the proviso that if either of those beneficiaries predeceased Hanna or died within one month of Hanna's death, leaving a child or children surviving her, then that child or children should take, and if more than one in equal shares, the share to which his or her or their parent would have taken had the parent survived Hanna.

Irene deposed on 25 March 2015 that she did not want to waste time, energy and money arguing with Mary-Anne over Hanna's estate and she was trying hard to reach a reasonable agreement. She acknowledged that the Court could reject any proposal that she and Mary-Anne might reach if the Court were not convinced that the proposal was appropriate.

She deposed in her affidavit of 25 March 2015 that if Hanna's will of 30 April 2011 were changed to include Mary-Anne as a beneficiary, then she believed that her two children should also be included as potential beneficiaries if she were to predecease Hanna. She deposed that her children had been neighbours and friends with Hanna for many years. Irene and Hanna had been neighbours.

In a second affidavit made on 25 June 2015, that is to say, last Thursday, Irene deposed that she was stressed about the prospect of having to give evidence in Court and had therefore reached an agreement with Mary-Anne for both of them to ask the Court to approve, and to make an order for the Registrar to sign, a will in terms of a document that had been agreed. She deposed that she believed she and Mary-Anne had both had to compromise to reach their agreement.

Irene and Mary-Anne have made a deed on 8 June 2015 in which they recorded their agreement in principle on a number of issues. That agreement was reached in order to have a proposed will for Hanna, that was attached to the deed, approved by the Court. Thus both Mary-Anne and Irene approached the Court on common ground for an order approving the making of a new will by Hanna.

The will now proposed differs in some respects from that previously proposed by Mary-Anne. It is proposed that Mary-Anne and Irene be appointed as joint executors of Hanna's estate with a proviso that if Irene predeceases Hanna, or is unable or unwilling to act, then her son be appointed in her place.

The proposed will contains the same proposed clause for the disposition of the balance of Hanna's estate after payment of debts, funeral and testamentary expenses, namely, that the estate be divided between Mary-Anne and Irene in equal shares, but if either of them predeceases Hanna, or dies within one month of Hanna's death, then that person's share of the estate would pass to her child or children.

As the parties recognise, the question of whether the conditions for the making of a new will for Hanna are satisfied is not to be determined by the parties' agreement. It is open to the parties to make an agreement as to how they might share an estate to which either or both of them might become entitled. It is not open to the parties by their own agreement to make a new will for Hanna.

Under s 22(b) of the Succession Act the Court must be satisfied that the proposed will is or is reasonably likely to be one that would have been made by Hanna if she had testamentary capacity. When she made her will on 30 April 2011 Hanna was 89. It is not suggested that she then lacked testamentary capacity. In any event that is not an issue in this proceeding. The will Hanna made on 30 April 2011 dealt with the contingency that has occurred, namely, the prior death of her husband and the prior death of one of the beneficiaries named in clause 6.

From the face of the will, it appears that when she made her will, Hanna did not then intend to leave the share of the estate that Ivoreen would have received had she survived Hanna to Ivoreen's daughter Mary-Anne. That is because the will expressly provides that, if Ivoreen did not survive Hanna, then the estate was to pass to Irene.

Hanna's will did not deal with the contingency of all of the named beneficiaries predeceasing her. The question raised by that contingency is whether Hanna would have wished her estate in that event to pass to the children of her friends, Ivoreen and Irene, or whether she would have wanted her estate to pass to her niece Karin Scholz.

It appears from a letter written by Ms Scholz on 24 October 2014 to Mary-Anne's solicitor that she, although living in Germany, has remained on good terms with her aunt and has remained in contact with her.

Ms Scholz wrote that she had called the nursing home several times to ask about how Hanna was in order to find out more. She had spoken to her aunt, who had told her that she had a nice room and was happy and enjoyed the food. Ms Scholz wrote that sometimes when she called, Hanna seemed a little confused and disoriented, but at other times was able to hold a normal conversation, and she remembered Hanna asking about Mrs Scholz’s husband. On one occasion communication had to be assisted through a nurse.

Ms Scholz wrote that, after Cecil's death, Hanna had asked her to move to Australia and live with her, but she and her husband were not able to comply with that request. Her husband had been ill and could not undertake such a long flight.

It appears that Hanna had appointed Karin Scholz as her attorney to deal with property that Hanna had owned in Germany. On 6 February 1994 Hanna signed an authority that authorised Ms Scholz to transfer the title of land owned by Hanna in Petershagen in Germany to herself and excluded a limitation on such a transfer contained in the German Civil Code.

Mary-Anne deposed to a conversation occurring in 2010 at which she was present on and off. The conversation was between her parents (that is, Ivoreen and her father Phillip Andreopoulos), Hanna and Cecil. She recalls Cecil saying that he and Hanna had made wills years before leaving everything to the RSPCA, and she recalls their saying that they would like to leave all of their property to Ivoreen. She also heard them say that they would like Ivoreen to have their power of attorney and to be their guardian.

She deposed that Cecil asked whether she would mind being an executor of Cecil's and Hanna's will along with her mother, and she agreed to that. Mary-Anne deposed that, a few days before 30 April 2011, she had a conversation with her mother in which her mother said to her:

Mary-Anne said that of course she would help, and her mother said, "Well let[']s go over and speak to them."

She deposed that she and her mother and father went to Cecil and Hanna's house in Kingsgrove on 29 April 2011, that is, the day before the wills and powers of attorney were signed. On the way over, Ivoreen told Mary-Anne that, "If you are willing to get more active I will ask if they mind if you get my share from their estate."

Mary-Anne says that, when they arrived, there was a discussion with Hanna and Cecil, and Hanna said, "Well, why don't we put her on the will if she’s willing to assist; whoever does the work is entitled." Cecil agreed.

Mary-Anne then deposed that her mother said words to this effect: "Time is money, lawyers charge like a wounded bull in a China shop." Cecil said, "If it’s going to cost more to get them to change it after it[‘]s ready to be signed, we’ll just leave it as is." Her mother said:

Cecil and Hanna said “That’ll be fine, at least she can help out with that. Mary is already an executor on the will."

The following day, Mary-Anne and her parents went back to Hanna and Cecil's home to meet with the solicitor, Mr Leo Giampietro. She deposed that, when they arrived, her mother told her that, "They are adding you to the Power of Attorney and enduring guardianship." She did not recall anything in particular being said on the day, but recalled Hanna and Cecil signing the documents.

Mr Phillip Andreopoulos gave evidence to similar effect. He deposed that, sometime in 2010, probably about October 2010, he was on a visit with Ivoreen to Hanna and Cecil's house, and that Mary-Anne was also there, and that the question of a will for Cecil and Hanna came up.

He deposed that Hanna said to Ivoreen:

Ivoreen then said, “It would good if you could include Irene in the Will because she’s been helping out and it’s only fair." Hanna then said, "Oh that’d be okay", and Cecil said, "Okay Ivoreen if that’s what you want." Hanna then said, "Whoever takes care of us is entitled to it."

Mr Phillip Andreopoulos deposed that, a day or so before the wills were signed, he and Mary-Anne and Ivoreen went to see Hanna and Cecil. He said that Ivoreen brought up the issue of the wills and said, "Would it be all right, Hanna, if Mary-Anne could take my half share you are leaving to me in your Will?"

He deposed that Hanna said, "Why don't we put her on the will Ivoreen?" And Ivoreen said, "Okay but time is money, solicitors charge like a bull in a China shop. If we go to change the Will at this late stage it’s going to cost money."

He deposed that Cecil said, "We should just leave it as it is then." And Hanna said, "Yes, if it will cost money." And Ivoreen said, "Ok, I will deal with it when it comes the time [sic]. Would you mind if Mary-Anne is added as Power of Attorney and Enduring Guardian." And Cecil said that of course that would be okay.

In the nature of things, there was no contradictory evidence. Ivoreen, of course, is dead, Hanna lacks capacity, and Cecil is also dead.

In those circumstances, the evidence of these discussions must be scrutinised very carefully. It is not that the Court looks on such evidence with suspicion and as prima facie fraudulent, but it does acknowledge that, where a person with a clear interest in the matter gives evidence of such conversations with people who are no longer in a position to respond, the evidence is to be scrutinised very carefully. See, for example, Plunkett v Bull (1915) 19 CLR 544 at 548-549; and Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur (1891) LR 19 Ind App 9, where Lord Morris said that:

Hanna's and Cecil's wills of 30 April 2011 were prepared by Mr Giampietro. He did not give evidence. It appears that, on about 23 October 2014, he had had a telephone conference with Mary-Anne's solicitor, Mr Kirby, and with counsel. As a result of that telephone conference, a draft affidavit was prepared and forwarded to Mr Giampietro.

The draft affidavit was sent to Mr Giampietro under a cover of a letter from Mr Kirby of 11 November 2014 in which he asked for Mr Giampietro's review and comments. He was asked to give the matter his urgent attention, and questions were raised about the possibility of there being further documents.

Using her power of attorney, Mary-Anne had given an authority for Mr Giampietro to produce his files relating to Hanna to her solicitor. Some documents were received, but apart from the names and addresses, the documents received do not include anything in the nature of a file note of Mr Giampietro's attendance on Hanna and Cecil.

The draft affidavit which I infer reflects comments made by Mr Giampietro in his telephone conference said that he specifically recalled being told to draw the will so that the survivor of the two proposed beneficiaries was to receive the estate; that he recalled mentioning to them the possibility that the will might fail if both proposed beneficiaries died; and that he was told that that was unlikely, and that his clients wanted simple wills.

On these applications, the Court is not bound by the rules of evidence (Succession Act, s 21(c)). Nonetheless, little weight can be attributed to the statements apparently made by Mr Giampietro.

I was told that he was not prepared to complete an affidavit. No satisfactory reason was given as to why a subpoena was not issued to Mr Giampietro to attend to give evidence.

In this respect, it is relevant that s 22 provides that the Court must refuse leave for the making of an application for an order under s 18 unless it is satisfied, amongst other things, that the proposed will is or is reasonably likely to be one that would have been made by the person if he or she had testamentary capacity. Clearly evidence of the instructions given by Hanna and by Cecil to Mr Giampietro in April 2011 would be highly material to that issue.

Sections 18, 19 and 22 relevantly provide:

In relation to the matter in s 19(2)(c), it appears that Hanna's estate currently comprises a sum of about $47,000, or at least did so in November last year, and real property estimated to be to the value of about $1 million.

In relation to the matter in s 19(2)(g), it appears that, apart from her will of 30 April 2011, Hanna may have made an earlier will in favour of the RSPCA. Other relevant evidence required by s 19 has been provided, including evidence by Phillip Andreopoulos of Hanna and Cecil's generosity to charities.

I am satisfied that the requirements of s 19(2) are satisfied. Nonetheless, leave cannot be given unless the matters in s 22 are satisfied.

As is customary in such applications, the question of leave and the question of whether an order should be made under s 18 have been dealt with concurrently.

The critical question is whether s 22(b) is satisfied, and in particular, whether I am satisfied that the proposed will is one that it is reasonably likely Hanna would make if she had testamentary capacity. The phrase "reasonably likely" was considered by Palmer J in Re Fenwick [2009] NSWSC 530; (2009) 76 NSWLR 22.

His Honour noted the wide variety of cases that might arise under ss 18 and 19. His Honour noted that the expression "reasonably likely" might have a number of meanings. His Honour said:

This acknowledges the different classes of case in which an issue under ss 18 and 19 can arise. There can be a gulf of difference between, for example, making a will for a seriously disabled child who has received a large damages award, and making a will for a person who has made a previous will but has since lost testamentary capacity.

In relation to a person who has lost capacity, Palmer J observed:

In Re Will of Jane [2011] NSWSC 624 Hallen AsJ (as his Honour then was) said:

As I have said this is not a case in which there has been a material change of circumstances since Hanna lost testamentary capacity. I use the expression ‘material change of circumstance’ to refer to a case that is not dealt with by her existing will. Her will caters for the eventuality which has happened.

Although Hanna was apparently not unwilling to include Mary-Anne as a beneficiary, at least if she were prepared to look after her, there is no evidence that when it came to the making of her will she did not intend what the will provided for, namely, that if her husband predeceased her and if one of Ivoreen or Irene predeceased her then the survivor of Ivoreen and Irene would take. In effect, the plaintiff seeks rectification of that will before Hanna's death. But the evidence falls far short of what would be required for rectification.

If Irene were also to predecease Hanna then the question would arise who Hanna would wish to inherit her estate. I am not satisfied that Hanna would prefer the interest of her friend's children over the ties of her niece and closest relative whom she has benefitted in the past and with whom she had a continued relationship.

For these reasons s 22(b) is not satisfied and I order that the claim for relief in the summons be dismissed.

The question then is what costs order, if any, should be made. Only Mary-Anne and Irene were represented at the hearing. As I have said they ultimately put forward a joint position. Prima facie costs should follow the event but the Court has a discretion under s 98 of the Civil Procedure Act 2005 (NSW) to make a different costs order.

The application was primarily brought for Mary-Anne's benefit. But had the joint approach been successful, then Irene's children would also potentially have benefitted and Irene would have become a joint executrix. Because both parties put forward that joint position which, if accepted, would have been for the benefit of them both, but which has failed, I think it appropriate to make no order as to the costs of Irene. I also consider that I should make no order as to Mary-Anne's costs with the intention that she bear her own costs.

It appears from the correspondence that Mary-Anne took the view that the costs of this litigation could be funded from Hanna's estate. No doubt she considered that in bringing the application she was acting in Hanna's best interests in seeking the Court's authority for the making of a will that she considered Hanna would now make if Hanna had capacity.

I have not accepted that argument, but I think I can assume that that was Mary-Anne's rationale for using Hanna's estate to fund the costs of the litigation. Nonetheless the application was made for her, that is, Mary-Anne's, personal benefit. The Power of Attorney given by Hanna on 30 April 2011 appointed Cecil, Ivoreen and Mary-Anne as her attorneys.

Mary-Anne is the sole surviving attorney.

The Power of Attorney was in the form then prescribed by regulations under the Powers of Attorney Act 2003 (NSW) and hence was a "prescribed power of attorney" within the meaning of Pt 2 of that Act. Section 12 of the Powers of Attorney Act provides:

Schedule 3 to the Powers of Attorney Act prescribed expressions that could be used for the purposes of s 12(1) authorising an attorney to confer on himself or herself the kinds of benefits specified by Schedule 3 for that expression.

The prescribed expressions in Schedule 3 were incorporated in the form that was used on 30 April 2011 but the relevant part, namely Pt 2, authorising the conferral of benefits on the attorney was struck out. Accordingly, I do not consider that Mary-Anne was entitled in the exercise of her powers as an attorney to use the moneys that belonged to Hanna to pay for the costs of this application that was brought for Mary-Anne's benefit.

Accordingly, I order that there be no order as to the plaintiff's costs to the intent that she bear her costs personally and without recourse to the estate of the person described in these reasons as Hanna.