Risk Watch: Solicitors’ duties when making wills – By Grant Feary

Solicitors’ duties when making wills: Lessons from Moloney v Hayward

GRANT FEARY, LEGAL RISK COUNSEL, LAW CLAIMS

In late July this year the Supreme Court handed down an important judgment which should be carefully considered by all practitioners who deal in any way with Wills & Estates matters. The case is Moloney v Hayward [2022] SASC 79 (McMillan AJ). It deals with a number of key issues for Wills and Estates practitioners, being: • testamentary capacity; • knowledge and approval of the contents of wills; • undue influence; • conflict of interest; and • rectification.

This article will only deal with solicitors’ duties and testamentary capacity. The particular question of when to seek medical evidence as to testamentary capacity and Moloney v Hayward is dealt with in an excellent article by Kym Jackson in the September 2022 edition of The Last Testament.

THE FACTS

The testator (EP) died on 7 April, 2018 aged 95 years. He had, over a number of years, made a series of wills, the last of which was executed on 15 February, 2018—some weeks before his death. He had given instructions as to this will in 2017.

The applicant (EJ) was EP’s only son. EJ sought to have the 2018 will admitted to Probate. The 2018 will provided for EJ to acquire a part of the Moloney family farm (known as “Brewers”) for $2 million, which was approximately half the market value as at the date of EP’s death.

The respondents, who were the four surviving daughters of EP, disputed that EP had capacity to make the 2018 will and also alleged that EJ had exercised undue influence over EP when EP made the 2018 will. The daughters contended that an earlier will, made in 2012, should be admitted to Probate, subject to an issue of rectification. EJ agreed that if the 2012 will was to be admitted to Probate it should be rectified as proposed.

The daughters’ case was that their father always intended that “Brewers”, or its market value would be inherited by them. EP held other farming land and that land, being the bulk of the farm, would be inherited by “the male line” (i.e. EJ and his son) while preserving some inheritance for “the female line” (i.e. through the daughters being provided with “Brewers” or its full value).

EJ said that EP’s intentions with respect to “Brewers” changed over time and that the 2018 will was his father’s final settled view.

McMillan AJ found that EP did not have testamentary capacity when he gave instructions for his last will in 2017, nor when he signed it in early 2018. The judgment contains a useful summary of the applicable principles when considering testamentary capacity (see paras [271][277]) and sets out in detail considerations applicable to the duties of solicitors (see paras [278]-[282]).

Critical factors were as follows: • the duty upon a solicitor for taking instructions is always a heavy one; • where the solicitor is drafting a will and there is any possibility that the testator’s capacity might later be questioned, the solicitor should ask questions, the answers to which will establish whether or not each of the requirements for capacity laid down in Banks v Goodfellow is satisfied; • it follows that the solicitor taking instructions for a will must have the

Banks v Goodfellow tests (see para [271]) in the front of her or his mind; • a solicitor taking instructions for a will has a duty to ensure that the person giving instructions has testamentary capacity and is giving the instructions freely and voluntarily and that the effect of the will is understood; • in carrying out that duty, solicitors must take reasonable steps to satisfy themselves that a testator has testamentary capacity at the relevant time; • where a testator is elderly, it is generally considered prudent that a medical opinion be obtained as to the testator’s medical condition and whether any such conditions may affect the testamentary capacity of a testator.

Further, it was said that a solicitor’s duties when taking instructions for a client vary depending on the circumstances. The Court endorsed the summary of the matters for solicitors to consider when retained to prepare wills for elderly clients in particular set out by Kunc J in Ryan v Dalton [2017] NSWSC 1007 which are as follows: 1. The client should always be interviewed alone. If an interpreter is required, ideally the interpreter should not be a family member or proposed beneficiary. 2. A solicitor should always consider capacity and the possibility of undue influence, if only to dismiss it in most cases. 3. In all cases instructions should be sought by non-leading questions such as: Who are your family members?

What are your assets? To whom do you want to leave your assets? Why have you chosen to do it that way?

The questions and answers should be carefully recorded in a file note. 4. In case of anyone a. over 70; b. being cared for by someone; c. who resides in a nursing home or similar facility; or d. about whom for any other reason the solicitor might have concern about capacity, the solicitor should ask the client and their carer or a care manager in the home or facility whether there is any reason to be concerned about capacity including as a result of any diagnosis, behaviour, medication or the like. Again, full file notes should be kept recording the information which the solicitor obtained, and from whom, in answer to such inquiries. 5. Where there is any doubt about a client’s capacity, then the process set out in sub-paragraph (3) above should be repeated when presenting the draft will to the client for execution.

The practice of simply reading the provisions to a client and seeking his or her assent should be avoided.

It was emphasised that in the many cases that come before the Court, the evidence of the solicitor will be critical. For that reason, it is essential that solicitors make full and contemporaneous file notes of their attendances on the client and any other persons and that those file notes be retained indefinitely.

The weight to be given to a solicitor’s evidence will depend on his or her experience, training, and understanding of the test of testamentary capacity; his or her ability to make an assessment of capacity taken with the quality of the assessment made, as appears from any contemporaneous notes and records; his or her knowledge of and familiarity with the will-maker, including the age and state of health of the will-maker; his or her independence; the will-maker’s presentation to the solicitor; and whether there are any “red flags” suggesting a possible challenge to capacity. It will also depend on the level of enquiry and discussion on the part of the lawyer and with the deceased (see paras [282]-[283]).

Her Honour was critical of the lawyer who drew EP’s will in a number of respects, however in respect of testamentary capacity it was found that, due to the lawyer’s close family connections with both the testator and the beneficiaries, it should have been evident to him that the 2018 will would likely be controversial and that he should not have been acting. Her Honour said

“Had he removed himself as the deceased’s solicitor, it would have been likely that an independent solicitor would have been retained and that solicitor would have obtained a medical opinion from a medical practitioner regarding the testamentary capacity of the deceased at the relevant time.” [para 291]

Further, it was found that “[gi]ven the deceased’s age, his long-standing health and medical issues, it was important for [the solicitor] to follow the type of process for obtaining instructions for elderly clients set out in Ryan v Dalton.” [para 298]

If it ever be thought that it was “easy” to take instructions for a will, this case makes it clear that that is not the case and that fine judgements (e.g. as to capacity) often need to be made and that vigilance needs to be exercised at all times.