Supreme Court Practice Note and NSWCA clarifies assumptions in wills and estates law
BY DANIELA FAGGIONATO AND CAITLIN WATSON – AUG 02, 2024 8:45 AM AEST
Snapshot
- The new NSW Supreme Court Practice Note SC Eq 7 intends to facilitate ‘the just, quick, and cheap disposal of proceedings’ by discouraging disproportionate legal costs being incurred and increasing registrar involvement.
- A recent NSW Court of Appeal decision appears to put speculation that the equitable assumption of presumed undue influence can apply to probate matters to bed.
- Wills and estates practitioners can mitigate risk by following this article’s best practice tips.
With the introduction of the new Practice Note SC Eq 7 – Probate and Family Provision List Practice Note (‘Practice Note’), practice for wills and estates litigators has become more streamlined, with an intention to minimise costs in case management. The Practice Note, issued on 13 June 2024, applies to:
- all family provision applications under the Family Provision Act 1982 (NSW) and chapter 3 of the Succession Act 2006 (NSW) (at [3]); and
- ‘contentious’ probate proceedings (at [3]).
- the list is now to be managed by a registrar, who can refer matters to judges where appropriate and make consent orders in chambers (at [7], [9] and [22]); and
- solicitors based outside of greater Sydney can appear remotely in the list (at [42]).
- provides that ‘orders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the net distributable value of the estate ( excluding costs of the proceedings) is less than $1 million’ (at [40]); and
- specifies that, ‘in probate matters, no presumption with respect to the making of an order for costs arises by reason only of the fact that the testator was the cause of the litigation or because the circumstances led reasonably to an investigation concerning the testator’s Will’ (at [41]). We understand the Court to mean that the parties should not assume that their costs will be met by the estate.
Alexakis concerned the $27 million estate of Mr McClure who died without direct dependants. He was in hospital receiving treatment from Dr Alexakis for diabetes and prostate cancer prior to his death. Dr Alexakis also provided him with treatment at his home. Mr McClure updated his will with a solicitor to leave 90 per cent of the residue of his estate to Dr Alexakis. This was challenged by the other beneficiaries. The appeal directly concerned:
- failing to apply a presumption of undue influence in circumstances where a testator in poor health left a substantial gift to his treating physician; and
- failing to apply general equitable principles relating to unconscionable conduct.
The Court definitively set out three applicable principles for practitioners:
- The onus of proving undue influence in probate, as distinct from in equity, is on those seeking to impugn a will on that No presumption of undue influence arises in probate.
- The onus on the proponent of a will to prove that a testator knew and approved of the contents of that will, which arises if there are suspicious circumstances, does not also require the proponent disprove undue influence. The authorities have consistently imposed the onus of proof of undue influence on the opponent to probate of a will.
- General equitable principles relating to unconscionable conduct ought not apply to testamentary Gere is a necessary distinction between inter vivos transactions and gifts, and testamentary gifts.
These principles mean there is no need for parties to disprove equitable presumptions in probate matters where the key witness, the testator, is not available. Gleeson JA specifically noted:
‘To allow a collateral challenge after the grant of probate to gifts under a will on the ground of undue influence is likely to promote and encourage litigation in probate matters by disappointed claimants, including speculative and nuisance litigation, at significant cost to the parties and the deceased’s estate, often disproportionate to the value of the estate’ (at [8]).
Practice tips for practitioners when drafting wills for testators include:
- Take file notes of conferences and Note who was present at conferences, any perceived influence issues and your assessment of the testator’s capacity to provide instructions. Particularly note if your advice is not accepted by the testator.
- Send a cover email or letter to confirm your advice to the client, noting their This is particularly important if:
- you advised against a course adopted by the testator; or
- the will contains what may be perceived to be an error but is included on the testator’s express instructions.
- If there are unusual or unexpected changes, these should be carefully documented in a file note or letter.
- If a likely disappointed beneficiary is identified, consider advising the testator to make a statement of explanation to keep with the will. This may be admissible pursuant to section 100 of the Succession Act 2006 (NSW).
- Consider preparing fact sheets to provide general guidance to clients on matters such as who can sit in meetings and translation issues.
Practice tips for practitioners instructed in estate litigation include:
- Consider whether there are any unexplained or suspicious circumstances when the will was These could include last minute changes, any indication of elder abuse (isolating the testator, for example) or involving a new lawyer without a cogent reason.
- Adopt a careful assessment process with disgruntled In some circumstances, claims are too speculative or based on a sense of moral wrong, rather than a well- substantiated cause of action.
- Advise clients of potential adverse costs consequences in your costs disclosure in line with the costs guidance in the new Practice Note.
This article originally appeared on lsj.com.au