Testamentary capacity and the dispensing power – Re Spencer (deceased) [2014] QSC 276

Re Spencer (deceased) [2014] QSC 276 contains an interesting examination of the intersection between the dispensing power (in Queensland, s.18 of the Succession Act 1981 (Qld)) and the requirement for testamentary capacity.

An application was made by a trustee company, as executor named in the 1991 will of William Spencer, deceased (Mr Spencer), for probate of that will, under which the beneficiaries were two of Mr Spencer’s first cousins once removed.

A cross-application was made by Mr Spencer’s first cousin (Mr Bell) for the Court to exercise the dispensing power under s.18 in respect of an unsigned document dated 13 August 2013, and to admit that document to probate. That document was a draft will prepared by Mr Spencer’s solicitor (Mr Potts), which was in very simple terms: it appointed Mr Potts as executor and provided for the whole of the estate to pass to Mr Bell.

Mr Spencer had engaged Mr Potts on 29 May 2013, to prepare an EPA and will. The EPA was prepared and signed but the will was not, as Mr Potts was, in accordance with his firm’s policy, not prepared to act as executor. Mr Spencer said he would think further about the choice of executor. On 9 August, Mr Potts received a telephone call from Mr Spencer, who was at hospital and had been diagnosed with terminal cancer. He said he needed a new will in the terms of what they had discussed “last time”. Mr Potts reiterated his concerns about being executor, but agreed to be executor.

On 10 August, a conversation took place at the hospital between Mr Spencer, Mr Bell and Mr Bell’s wife, in which Mr Spencer expressed informal desires (precatory words) to Mr Bell about what he wanted him to do with his estate.

On 12 August, Mr Bell phoned Mr Potts, leaving a message that Mr Spencer wanted his will to be drawn up.

On 13 August, Mr Potts called the hospital and spoke to Mr Spencer. He asked whether Mr Spencer wanted the same will as he had wanted on 9 August. Mr Spencer, whose voice was weak, said that he did.

Mr Potts drew up the will in accordance with the instructions given to him. He arrived at he hospital at 4pm on 13 August. Mr Spencer appeared to be in pain and had difficulty talking. Mr Potts read the will to him and said “Bill, is this your will” to which Mr Spencer gave a “grunting yes”. (Mr Potts’s evidence, when asked whether he thought Mr Spencer understood the will when he read it over to him, was: “My impression was from the response which I got which was a mere yes. I thought that was enough – for me to believe that he was likely to have understood that I was his solicitor and I was there for the will and he understood it was the will that we’d spoken about in the morning.”) Mr Spencer put his hand out but Mt Potts was unsure whether he would be able to sign, given how much pain he seemed to be in and how weak he seemed.

Mr Potts asked a shift doctor to perform a capacity test. Mr Spencer got some of the answers right and some wrong. The doctor looked at Mr Potts and shook his head and said no, and advised him to come back the next morning.

On the morning of 14 August, the doctor informed Mr Potts by telephone that Mr Spencer was still too drowsy. Later that day, Mr Spencer died. He was 79 years of age.

Dalton J was satisfied, on the evidence, that Mr Spencer had testamentary capacity as at 29 May. While Mr Potts had not conducted any formal examaintion of Mr Spencer with reference to the elements of the Banks v Goodfellow test, it was clear that Mr Spencer’s affairs, and the terms for his will, were very simple. Her Honour referred to Bailey v Bailey (1924) 34 CLR 558 at 570, per Isaacs J: the quantum of evidence necessary to establish testamentary capacity must always depend on the circumstances of each case because the degree of vigilance to be exercised by the Court varies with the circumstances. Her Honour was also satisfied that Mr Spencer had capacity as at 9 August, but not at the time of Mr Potts’ visit to the hospital on the afternoon of 13 August.

In considering the operation of s.18 and the three conditions outlined in Hatsatouris v Hatsatouris [2001] NSWCA 408, her Honour observed that the circumstances which may fall within s.18 are many and varied and that each case will depend upon its own facts.

The first two of the Hatsatouris requirements were met. In relation to the third, her Honour noted the intersection between the operation of s.18 and the requirement for testamentary capacity (at [57]):

“Section 18(2) of the Succession Act does not require that the person with testamentary intent have full testamentary capacity at the time of the intention mentioned at s.18(2). It does occur that sometimes both questions are raised in the same proceeding and are dealt with as distinct questions within that proceeding. In a case where the deceased person suffers from some longstanding impairment which affects capacity, the decision about testamentary capacity will often determine the outcome of the s.18 application. Sometimes, however, both questions will be determined independently, e.g., documents produced shortly before a suicide.”

Her Honour found as follows (at [59]):

“Here, Mr Spencer had testamentary capacity at the time he gave instructions to Mr Potts as to the content of the will he wanted Mr Potts to prepare. By the time it was brought to him for execution, Mr Spencer had lost that testamentary capacity, whether through the progress of his illness or because he was under the influence of pain-relieving drugs. However, at the time of Mr Potts’ visit to the hospital Mr Spencer was not beyond forming intention. He knew who Mr Potts was. He acknowledged the contents of a very simple will and put out his hand to sign it. Had he signed it in accordance with the requirements of s.10 of the Succession Act, I would admit the will to probate under the principle in Parker v Felgate (1883) 8 PD 171.” (Under that principle, where a competent testator gives instructions to a solicitor for the preparation of a will, and the solicitor prepares a will in accordance with those instructions, and the testator’s capacity then declines, the will may be admitted to probate if the testator understands that he or she previously gave instructions for a will and that he or she is executing a will made in accordance with those instructions.)

Accordingly, it was found that the requirements of s.18(2) were satisfied. Orders were made declaring the unsigned document dated 13 August 2013 to be the last will of Mr Spence, and that probate of that unsigned will be granted to Mr Potts as executor.

The judgment is accessible here.