In Peacock v Knox [2025] NSWCA 160, the NSW Court of Appeal recently heard a dispute. It was over the estate of Mrs Eva Easton (the deceased). She passed away in 2021 aged 89. She left no known relatives. The dispute centred on two wills—one made in 2019 and a later one made in 2020—each naming different beneficiaries.
In 2019, the deceased appointed her friend, Mrs Isabella Peacock (the appellant), as her attorney and guardian. She made a Will leaving her entire estate to her. The two had been close since 2004 and had formed a strong friendship by 2009. Nevertheless, their relationship deteriorated in 2020 during the COVID-19 pandemic. The appellant refused to get a flu vaccination required for visiting aged care residents. This upset the deceased, who then reportedly stopped speaking with her.
Later that year, issues arose with the payment of care facility bills. As a result, the staff at Maranatha Lodge arranged for solicitor Mr Geoffrey Knox (the respondent) to visit the deceased. During this visit, the deceased gave instructions for a new Will. The respondent prepared the 2020 Will. It named him as an executor. It left the entire estate to the Sydney Opera House Trust. The deceased signed the Will in November 2020 with both the respondent and another solicitor. According to the respondent, the deceased understood the contents of the Will. She affirmed she wanted her estate to go to the Opera House.
In Knox v Peacock [2024] NSWSC 976, the appellant challenged the validity of the 2020 Will. She argued that the deceased lacked testamentary capacity. The appellant also claimed that the deceased did not know or approve of its contents. She also claimed there was a binding promise that the 2019 Will would stay in place. Yet, she did not pursue these other claims by the end of the hearing. The respondent presented compelling direct evidence. This included the deceased’s GP and nursing staff from Maranatha. They testified that the deceased had stated she didn’t want the appellant to “get anything.” Expert evidence from a neurologist suggested the deceased had vascular dementia. The expert expressed that the deceased not have been capable of making reasoned decisions. This was at the time of the 2020 Will.
The trial judge admitted the 2020 Will to probate. The judge found that the deceased had the capacity to make a valid Will. The judge did not separately consider if the deceased knew the 2020 Will’s contents. Approval of these contents was a key issue raised on appeal.
On appeal, the appellant challenged the trial judge’s factual findings. The appellant raised concerns that the trial judge had neglected to handle knowledge and approval properly. Submitting a revival of the 2019 Will if the 2020 Will is found invalid. Hmelnitsky J had earlier observed that questions around the deceased’s capacity in 2020 arise. These questions also cast doubt on her 2019 Will. This was a point the appellant had not addressed with fresh evidence. The appellant also disputed the personal costs order made against her, arguing that the probate exception should have applied.
The Court of Appeal ultimately dismissed the appeal. It upheld Hmelnitsky J’s conclusions on testamentary capacity. The court declined to revisit the costs decision. The case serves as a reminder that even a minor falling out can change testamentary intentions significantly. Evidence of capacity, knowledge, and approval remains central to validating later Wills.
The respondent is a solicitor. They are one of the executors named in the deceased’s 2020 Will. They applied for probate of that Will. The Sydney Opera House Trust was the sole beneficiary. The appellant, who was the sole beneficiary under the deceased’s prior 2019 Will, contested the validity of the 2020 Will. She filed a cross-claim seeking probate in solemn form of the 2019 Will.
The deceased passed away in 2021 at the age of 89. There were no known surviving relatives. She had formed a close friendship with the appellant between 2004 and 2009. After a fall in 2017, she moved into high-needs care at Maranatha Lodge. In 2019, her earlier close friends and former beneficiaries under an earlier Will moved interstate. As a result, the deceased appointed the appellant as her attorney and guardian. Around the same time, she executed the 2019 Will naming the appellant as the sole beneficiary. From April 2019, the appellant took on the significant responsibility of assisting her with managing her finances.
In March 2020, after the onset of the COVID-19 pandemic, the appellant stopped visiting the deceased in person at Maranatha. She refused to obtain the influenza vaccination required for visitation. The deceased became upset and stopped communicating with her. The primary judge found this significantly affected their relationship. It ultimately led to a breakdown in their communication.
Concerns arose in 2020 about the prompt payment of Maranatha’s fees. As a result, a staff member arranged for the respondent to visit the deceased on 22 September 2020. The respondent did not initially know the meeting’s purpose. Yet, during the meeting, the deceased gave instructions to create a new Will. The respondent prepared the new Will. The deceased signed it on 19 November 2020. This occurred in the presence of the respondent and a solicitor from his firm. Under the 2020 Will, the respondent was appointed executor, and the Sydney Opera House Trust was the sole beneficiary. Before signing, the respondent read the Will to the deceased. The respondent confirmed her intentions. She expressed approval that her estate should go to the Trust.
At trial, the appellant challenged the 2020 Will. They argued the deceased lacked testamentary capacity. The deceased did not know or approve of its contents. Pleading claims in contract and promissory estoppel, but did not pursue these at the hearing. Evidence came from lay witnesses. This includes the respondent, the deceased’s GP, and a Maranatha staff member, Ms Flannery. They submitted that the deceased had explicitly stated she did not want the appellant to inherit her estate. The parties also relied on expert evidence from Dr Lonie. He concluded that, due to vascular dementia, the deceased lacked the ability to reason. She was incapable of assessing competing claims on her estate.
“…in Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197 Young JA (with Bergin CJ in Eq agreeing) said at [89]-[91]:
“In a probate suit, the vital evidence is very often not given by medical experts, but is given by experienced lay observers. I have said more than once in deciding probate cases at first instance, that the most valuable evidence is usually given by the experienced solicitor who witnessed the Will as opposed to a very highly qualified psychiatrist whose evidence is based not on any personal observation of the testator, but who has reasoned their opinion from medical and hospital notes.
Furthermore, it is not true to say that the evidence of lay people as to another person’s condition of health is valueless.” Knox v Peacock [2024] NSWSC 976 at 183
Despite this, Hmelnitsky J found that the deceased had testamentary capacity when she made the 2020 Will and granted probate. The judge did not separately decide the issue of knowledge and approval. He also observed that if the Court invalidated the 2020 Will for want of capacity, the evidence would raise doubts. These doubts concerned the deceased’s capacity to execute the 2019 Will. The appellant did not resolve such doubts on the evidence.
In Peacock v Knox [2025] NSWCA 160, the NSW Court of Appeal dismissed an appeal. The appeal challenged the validity of a 2020 Will made by the deceased. The court confirmed the findings of the primary judge. The Will was valid despite concerns around her cognitive condition. The Court (Ward P, Adamson and Ball JJA) held:
- Testamentary Capacity Upheld
The Court found no error in Hmelnitsky J’s conclusion. The deceased had testamentary capacity to execute the 2020 Will. Although the deceased had vascular dementia Hmelnitsky J had appropriately weighed the evidence, including lay witness accounts. Relying on them to support findings about the deceased’s intention to change her Will. The evidence also supported the findings concerning the breakdown of the deceased’s relationship with the appellant. Hmelnitsky J accepted the deceased’s decision to disinherit the appellant was rational. Deciding to leave her estate to the Sydney Opera House Trust deliberately.
- Correct Legal Test Applied
The trial judge had correctly applied the test from Banks v Goodfellow. Confirming that testamentary capacity does not need total cognitive clarity. It was enough that the deceased understood the nature of making a Will and the extent of her property. Additionally, the deceased comprehended the effect of disinheriting the appellant. Earlier naming the appellant as sole beneficiary in her 2019 Will.
- Knowledge and Approval of the Will
The deceased’s age and mental condition raised concerns. It was necessary to consider whether she truly knew and approved the 2020 Will. The Court agreed that this issue was not separately dealt with by Hmelnitsky J. Still, the evidence of her solicitor, the respondent, was found adequate. The solicitor had drafted and read the Will aloud to her. This was enough to prove that she did understand and approve its contents.
- Validity of the 2019 Will
The appellant sought to have the 2019 Will admitted if the 2020 Will failed. But, the Court of Appeal accepted Hmelnitsky J’s observation. Any doubts about the deceased’s capacity in 2020 raise concerns about testamentary capacity in 2019. The appellant was alerted to this risk early in the trial. They did not lead further evidence on the deceased’s condition at the earlier date.
- Costs Followed the Event
The Court also upheld the costs order against the appellant. The probate costs exception—where challengers aren’t penalised for bringing reasonable concerns before the Court—was not applied here. The Court found that the appellant’s decision to pursue the litigation to finality was beyond what is considered reasonable. This included pursuing abandoned different claims under the circumstances.
Takeaway:
This decision reinforces that cognitive impairment alone does not negate testamentary capacity. This is true provided the testator meets the Banks v Goodfellow criteria. It also highlights the importance of direct evidence of testamentary intention. Pursuing Will disputes without strong medical or legal evidence is risky, particularly when costs are at stake.
On appeal, the appellant challenged Hmelnitsky J’s findings on testamentary capacity. She also challenged various evidentiary rulings. Additionally, she argued against his failure to consider knowledge and approval separately. The appellant also objected to Hmelnitsky J’s personal costs order against her. The respondents argued that if the Court found capacity, knowledge, and approval should follow.
The Court of Appeal dismissed the appeal. It held that the primary judge had not erred in his findings of fact. He correctly admitted and weighed the evidence of the deceased’s GP and Ms Flannery. The judge also correctly determined that testamentary capacity existed. The judge should have expressly considered knowledge and approval. But, the Court was satisfied with the respondent’s evidence, given his experience as a solicitor. It was enough to prove that the deceased knew and approved of the 2020 Will.
The Court of Appeal accepted Hmelnitsky J’s remarks about the 2019 Will. Even without submitting a challenge to that Will, there was unresolved doubt about the deceased’s capacity in 2019. This doubt precluded a grant of probate in its favour. Lastly, the Court found no error in the ruling on costs. The appellant pursued litigation to its finality. Abandoning some claims only at the end of the hearing. Thus, the probate exception to personal costs liability did not apply.
The legal principles surrounding costs in estate-related litigation are complex. They particularly focus on cases where litigants, like appellants or beneficiaries, start proceedings. These proceedings can result in costs awarded against them. It references case law including Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572. Other cases include Warton v Yeo [2015] NSWCA 115, and Buckton v Buckton [1907] 2 Ch 406. These cases pinpoint scenarios where costs should be paid by the estate or personally by the parties. The payment depends on the nature of the litigation. The Court generally considers whether proceedings fall into certain categories. These categories can involve will interpretation, beneficiary-initiated claims, or adversarial disputes. Each has different implications for cost indemnity.
Situations when an executor supports a particular construction. In these instances, they bear the costs personally. These situations are likened to the third category of adversarial litigation. Ultimately, it explains that the court’s assessment of reasonableness in pursuing litigation influences the decision on cost orders. The court considers estate impact and evidence of capacity in this assessment. An example is provided where the court found the appellant’s actions unreasonable.