The High Court & the executrix’s costs

In an earlier post, we discussed the rather uncommon occurrence of appellate probate litigation in the Australian High Court. On 15 August this year, the Court unanimously held that Homayoun Nobarani had an interest in challenging the handwritten will made by the late Iris McLaren in 2013  (“the 2013 Will”) and was denied procedural fairness.  The denial of procedural fairness arose from altering the hearing, at short notice, from a hearing of the caveat motion to a trial of the claim for probate amounting to a “substantial wrong or miscarriage” because Homayoun was denied the possibility of a successful outcome.

The Court provided that Teresa could apply within 14 days that the costs of

  • the trial,
  • the appeal to the Court of Appeal of the Supreme Court of New South Wales and
  • the appeal to the High Court be paid out of the estate and on a trustee basis.

On 29 August 2018, Teresa brought an application. The general rule is that costs (including litigation expenses) properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate.

In this matter, the High Court held there was no suggestion that Teresa acted other than reasonably and properly in seeking and obtaining a grant of probate, and then resisted appeals seeking to set aside that grant of probate.  Notwithstanding that, on appeal to the High Court, the grant of probate was set aside due to a denial of procedural fairness at trial to Homayoun.

Homayoun objected to the order sought on the bases that

  • Teresa is the sole beneficiary of the estate according to the 2013 Will, and
  • Teresa failed to disclose that sometime between the trial and the appeal to the Court of Appeal, the estate was distributed to her; and that her solicitors pay the costs of the application on an indemnity basis.

Costs awarded on an indemnity basis are all costs, incurred by a party to litigation in undertaking proceedings provided they have not been unreasonably incurred or are not of an unreasonable amount and are usually awarded only in circumstances involving misconduct

The High Court believed that Teresa’s role as executrix and sole beneficiary under the 2013 Will does not detract from the reasonableness or the propriety of her actions, nor her defence of the appeal to the Court of Appeal and the appeal to the High Court as executrix; and  ordered that Teresa’s costs be paid from Iris’s estate.

Additionally, no order was made to restrain distribution of the estate by Teresa following the grant of probate after trial but while an appeal was pending.  That distribution was not improper. The High Court rejected Homayoun’s submission that it was a basis for an award of costs against Teresa’s solicitors personally.

 

 

Stieg Larsson’s posthumous legacy

Stieg Larsson who wrote the novel The Girl with the Dragon Tattoo (as part of the Millenium Trilogy); died in 2004 (before the novel was published) without a Will.

Stieg and Eva Gabrielsson, his companion of 32 years, and collaborator had never married, Swedish intestacy law did not recognize the relationship, therefore, she did not inherit the rights to his work or any part of his estate. Larsson’s estate including the literary estate was divided between his father, Erland and brother Joakim.

One reason given for Eva and Stieg not marrying was security reasons. As a journalist, Stieg covered extremist groups and received multiple death threats. Under Swedish marriage law, couples are required to publish their addresses at the date they marry therefore marrying would have been a security risk.

A literary executor manages the author’s copyright, decides the territories where books are sold, and who translates the books and manages the film rights.

Eva requested the rights to control Steig’s work in order that it be presented in the way he would have wanted. Steig had told Eva  “that he had 10 books in his head about Lisbeth Salander (the lead character in the Series),”: Eva claimed that Steig was estranged from his family,  that his father was more like a distant relative and Steig wasn’t aware that his brother was married or had children and that none of his work colleagues knew that Larsson had a brother.

The family argued that if Stieg had wanted Eva to inherit anything, he would have written an appropriate Will. Eva located a 1977 Will soon after Stieg’s death that left his estate to a branch of the Communist Workers League. It was not valid under Swedish succession law as it was unwitnessed.

Following a protracted dispute over the estate, a settlement was reached giving Eva title to the home she shared with Larsson and his personal effects but little else.

Stieg wrote an incomplete manuscript of another novel with the working title of God’s Revenge Eva is in possession of the notebook computer with the manuscript, which is reported to be 260 pages and about 70% complete but cannot publish the work as she does not own the rights to the work.  Steig had also sent emails to a friend with an outline for a further book in the series.

In December 2013, Steig’s publisher announced that a fourth Millennium book, “That Which Does Not Kill Us ” would be written by David Lagercrantz. The book was released with the English language title The Girl in the Spider’s Web.  Eva was critical of the decision as it did not make use of the unpublished material which in her possession.

Lagercrantz wrote the fifth book in the series The Man Who Hunted his Shadow (The Girl Who Takes an Eye for an Eye in English) published in September 2017

The only way that you can direct your assets after you die is if you create a valid will. Whilst Intestacy law directs your estate it may not do so in a way that reflects your wishes. Instead of leaving your family to manage your intestate estate – that could include protracted legal disputes make a will as part of planning for your future and give you and your loved one’s peace of mind.

 

 

​Family Provision & Translated Affidavits raises Judicial Concerns.

Radan Rogic married Ljubica Pacic in April 1989 after knowing her for five months. Radan was 31 and Ljubica was 42 years old. They divorced in December 1992. There were no children of the marriage and no property settlement.

In July 2015 Ljubica died aged 69. In the years between her divorce from Radan and her death, Radan had been married for 13 years, had two children, and was divorced. Radan and Ljubica were on amicable terms following their divorce with Radan one of several people providing care and support to Ljubica at the end of her life.

Ljubica made three wills after her divorce from Radan; he was neither a beneficiary nor the executor in any of those wills. Ljubica’s three wills left her estate to her family in the Serb Republic of Bosnia and Herzegovina (the “Serb Republic”).

In April 2015 Ljubica made her third and final will (the “2015 Will”), appointing Irene Samaan and Mile Gorgioski, as executors. The beneficiaries are Ljubica’s nieces and nephew in the Serb Republic. Probate of the 2015 Will has been granted to Irene and Mile.

Ljubica’s only substantial asset was her home at Canley Heights (the “Property”). She had purchased it subject to a mortgage in 1985. Radan claimed that when he married Ljubica in 1989, she told him that she still owed $12,000 on the mortgage over the Property.

Radan claims he gave Ljubica a lump sum of $7,000 or $7,500 and other funds, and thereafter his entire wages, which enabled Ljubica to repay the mortgage early and then be applied by her to meet their expenses as a married couple.

Second, Radan claimed that at the time of their divorce Ljubica told him “When I die, Radan you will inherit the home” (the “Alleged Representation”). In reliance on the Alleged Representation, he did not apply for a property settlement.

Radan claims that he is entitled either to the Property or to such interest in the Property as represents his contribution to the repayment of the mortgage.

The Court was not satisfied the number of his contributions or the Alleged Representation was made and therefore was unable to be satisfied with the facts Radan relied upon to make the claim. The only person who could corroborate Radan’s evidence is Ljubica ; there are no contemporaneous financial or other records; the relevant events took place more than twenty-five years ago; there are demonstrable inconsistencies in other parts of Radan’s testimony; and, there is no evidence that Radan ever mentioned his alleged entitlement to anyone until after Ljubica’s death.

Radan sought leave to make a claim for a family provision order under the Succession Act 2006 (NSW) (the “Act”) 11 months out of time; seeking an order that the limitation period be extended.

The Court held that as an ex-spouse Radan was able to bring a claim under the Act, however, it believed he demonstrated a barely sufficient basis to extend the time for the filing of his claim; and was not satisfied that there are factors warranting his application under the Act.

Although Radan is not well off and has some serious health issues. However, even if there were factors warranting, the Court is satisfied that this would have been a case where Ljubica’s clearly expressed testamentary wishes should be respected and would not have made a family provision order.

Importantly the Court raised concerns that Radan’s supporting affidavits were prepared and witnessed by Radan’s solicitor who speaks Serbian and English. The Solicitor took instructions from Radan in Serbian. He then translated those instructions himself into English and prepared their affidavits in English. He then read the affidavit back to the relevant witness in English and translated it back to them in Serbian to obtain their assent to its contents concluding with this statement:

“This affidavit has been read out to the deponent in English and translated into Serbian by the witness who speaks both Serbian and English. The deponent appeared to understand the content of the affidavit and subscribed the affidavit by signature in the presence of the witness.”

The Court made no suggestion that Radan’s solicitor acted unethically. However, it noted that during the course of oral evidence, at various times both witnesses (giving their evidence through an accredited interpreter) at various times said words to the effect that they did not understand or recognise “their words” in their respective affidavits.

An affidavit in English giving an account of a conversation will at least implicitly represent that the conversation was in English. If in fact, the conversation was in another language, then the affidavit is misleading (even if unintentionally so)

Further, a bilingual solicitor should not interpret the deponent’s evidence to produce an affidavit in English. Being bilingual is not the same thing as being an interpreter (spoken words) or translator (documents).

Interpreting and translating are highly skilled occupations, conducted by professionals adhering to a code of ethics with an emphasis on professional competence, accuracy and independence and following specialist tertiary study.

In assuming the role of interpreter or translator in their own matters (even where the solicitor is a professional interpreter) the solicitor could be placed in an invidious professional position leading to allegations of bias (both conscious or unconscious) being raised.

Importantly the Court advised legal practitioners that when preparing the affidavit evidence of a culturally or linguistically diverse (CALD) witness, bilingual solicitors should not interpret their clients’ affidavits into English. A qualified interpreter should be retained to interpret the deponent’s instructions into English. When the deponent is asked to swear or affirm their affidavit, an interpreter should translate the English version back to the deponent and the procedure set out in the Standards, which are intended to provide courts with guidance on engaging and working with interpreters to ensure procedural fairness for people with limited or no English proficiency and have been approved by the Council of Chief Justices of Australia and New Zealand.

 

 

 

 

 

Estrangement, Testamentary Intention, & Family Provision in the UK

Melita Jackson died in 2004 aged 70. She had been widowed in 1961 whilst pregnant with her daughter Heather. In 1978 when Heather was 17 she left home to live with her now husband, with whom she has five children. Melita did not approve of Heather’s boyfriend leading to an estrangement for the majority of the 26 years preceding Melita’s death in 2004.

Since 1978 Heather lived independently of her mother in straitened financial circumstances. Heather and her family received a net annual income of around £20,000 which consisted mainly of government benefits.

In her last Will of 2002, (“the Will”) Melita left the majority of her estate to a number of charities, and nothing for Heather. Instructing her executors to defend any claim brought by Heather on the estate.

The Will reflected Melita’s testamentary intention as expressed in previous Wills as early as 1984. Heather had been aware of this decision for many years and didn’t expect any benefit from Melita’s estate.

Heather brought a claim under the Inheritance (Provision for Family and Dependants) Act (“the Act”) against Melita’s estate for reasonable financial provision.

An award under the Act should reflect the individual circumstances of each case, by reference to the following factors:

  • The financial needs and resources of everyone involved.
  • What responsibilities and obligations the deceased had towards the applicant and to anyone else with a claim on the estate.
  • The size of the estate.
  • Whether anyone involved is disabled.
  • Any other matter the court thinks is relevant, for example, the conduct of any of the people involved.

In August the District Court found that the Will did not make reasonable financial provision for Heather and awarded her £50,000.

The Charities challenged the finding that there was any lack of reasonable provision. Heather appealed believing that the amount awarded was insufficient.

Both the appeal and cross-appeal were heard in October 2009, the Court of Appeal found for the charities on the grounds the District Court Judge had made errors of law and had not properly balanced the criteria for provision set out in the Act. Heather’s appeal was dismissed leaving her with nothing.

In 2011 the England & Wales Court of Appeal restored Heather’s £50,000 award.  Heather further argued that this amount would reduce her means-tested government benefits. The Court of Appeal awarded £143,000 to enable Heather to cover the purchase of her housing association house (plus reasonable costs) and structured payments to a maximum of £20,000 allowing her to retain her government benefits.

The charities appealed and on 15 March 2017, the Supreme Court unanimously allowed the appeal finding that the Act provides that adult children can bring a claim for reasonable provision, not to achieve a higher standard of living. The definition of reasonable provision will be

‘coloured by the nature of the relationship between mother and daughter.’

The Court affirmed the original decision to award £50,000 as the failure by Melita to make reasonable financial provision for Heather in her Will was due to their long period of estrangement.

Importantly the Supreme Court felt that the Court of Appeal had put too little weight on Melita’s testamentary freedom – a testator’s wishes contained within a Will should be respected.

In considering a claim under the Act a Court should not simply weigh-up the resources of the claimant and of the beneficiaries: instead, the exercise of considering whether reasonable provision has been made for the claimant should be with the testator’s wishes firmly in mind.

 

 

 

 

Proprietary Estoppel and the reluctant dairy farmer.

We have posted about proprietary estoppel claims being brought by relatives who believe they have acted in their detriment based on a promise that they will inherit a substantial portion of an estate. Historically such a claim has been brought following the death of the person that made the promise. In an English case currently before the courts, a Son has brought the claim against his parents during their lifetime as there is an indication that the promise that his parents made to him has not been honoured in their Wills.

Proprietary estoppel is a legal claim which may transfer rights if,

  • someone is given a clear assurance that they will acquire a right over property,
  • they reasonably rely on the assurance, and,
  • they act substantially to their detriment on the strength of the assurance, and
  • it would be unconscionable to go back on the assurance

If the court believes these elements are present the usual remedy will be that the property will be transferred to the claimant.

In England to establish an equitable estoppel, it is necessary for the plaintiff to prove that

1) they assumed that a particular legal relationship would exist between them and that the defendant would not be free to withdraw from that expected legal relationship;

2) the defendant has induced them to adopt that assumption or expectation;

3) they acted or abstained from acting in reliance on the assumption or expectation;

4) the defendant knew or intended them to do so;

5) their action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and

6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise

Recently Clive Shaw a 55-year-old from Lincolnshire in the United Kingdom has brought a proprietary estoppel claim against his parents Gillian and Walt after discovering that he had been left out of their Wills.

Clive claims that he had worked on his parents’ dairy farm from the age of seven forgoing other career opportunities based on his parents’ promise that he would inherit the family farm and business.

Following a falling out Gillian and Walt had drafted Wills that left the bulk of the estate to Clive’s sister Cheryl and nothing to him.

Gillian and Walt believe that Clive has not worked hard enough to deserve the family farm, was incapable of managing the farming business; and hated cows.

Cheryl gave evidence that Clive had frequently told family members he hated cows often referring to them as “stinking, horrible, rotten creatures”.

In his defence, Clive submitted to the Court that he said he “didn’t like” cows, not that he “hated them”.

Clive believes that the basis of the dispute is that Gillian often found fault with his girlfriends and she believes his current girlfriend is a ‘gold digger’.

Clive no longer works in the family business. He now operates a Truck hire business from the farm and lives in an onsite caravan.

The Court reserved its’ decision to a date yet to be determined.

 

 

 

 

 

 

Family Protection & the NZ High Court

Family provision legislation imposes a legal obligation on the Will maker to make proper provision for the support and maintenance of certain defined dependents.

Family Provision Legislation provides that the task of the court is to determine the extent of the provision made for the maintenance, education and advancement in life of the dependent if the Court believes it is inadequate, evaluate what provision, if any, would be adequate.

The purpose of Family provision Acts is not to provide for an equal share of an estate to an aggrieved party it is limited to the provision of adequate maintenance and support out of the deceased’s estate.

James Parker died in March 2014 leaving an estate of approximately $643,000 to his nephews David and Stephen (“the Nephews”) in equal shares.

James had been married in England to Anne but left her and their children Keith and Helen then aged 4 and 8 in 1968, immigrating to New Zealand in 1969. He had no contact with the children for 45 years and did not provide spousal maintenance or child support funds to Anne.

Helen, Keith and Anne relied solely on Government benefits and family assistance. The Court heard evidence from Keith and Helen that James left the family “penniless” that “simple things were not affordable”; and that the family “could never afford to go on trips out or a holiday”

James settled in Nelson in 1976 following extensive travel; his Parents, Sister, Brother-in-Law and two nephews relocated to Nelson shortly after James had settled there enjoying a close family relationship.

During the 1990’s both Keith and Helen started looking for their father. James was finally located in 2012 but did not wish to be contacted by Keith or Helen. In 2014 James changed his mind and exchanged letters with his children, although the Court found that this correspondence showed little interest by James in pursuing an ongoing relationship with his children. Helen discovered her father had died following an internet search when she had not heard from him for a period of time.

In 2017 Keith and Helen sought an order under s4 Family Protection Act 1955. The Court found that as James had been solely responsible for the estrangement, had not supported Keith and Helen financially or emotionally since they were young and they had suffered as a result. James had breached the moral duty in not providing for his children that a “wise and just testator” in his position would have.

After considering the relative positions of Keith and Helen the awarded them $175,000 and $100,000 respectively. The balance of the estate of $368,000 was to go to the nephews equally.

The nephews appealed believing that the amount awarded to both Keith and Helen was plainly wrong, arguing that the proper value of the award to Keith and Helen should be 8-10% of the estate (roughly $64,300.)

The New Zealand High Court was not satisfied either award was plainly wrong for the Following reasons:

James’ primary duty was to make provision for his children. This duty took priority over any duty he may have had to his nephews.

 The provision made to Keith and Helen in the particular circumstances of the case and having regard to similar cases were not unduly generous.

James estate although not large was sufficient and was not burdened by applications from others with a moral claim against the testator. Similarly, as the Nephews hadn’t given evidence as to their financial position, the Family Court was entitled to proceed on the basis they did not require maintenance or support.

Helen’s financial circumstances could only be described as modest. Keith’s were worse.

Finally, neither award seems out of step with those made in comparable cases.

In other posts regarding Family provision, we have outlined the Court’s role to place itself in the position of the Will maker and having taken the facts and circumstances into account decide if the Will maker has breached their moral duty toward their dependents. Importantly the moral duty of the Will maker has been defined as the actions society reasonably expects of a person in the circumstances, by reference to contemporary community standards.

 

 

Manslaughter & the Conditional Forfeiture Rule

I have posted before about the forfeiture rule, which is a principle that prevents a person from benefiting from their wrongful conduct and can be described as a fundamental principle of justice. At its heart is the notion that it would be unconscionable to allow a killer to enjoy an unjust enrichment.

Courts permit no dilution of the rule and therefore the forfeiture rule applies following being convicted of murder or manslaughter regardless of the facts of the case. In New South Wales legislation was passed to amend the rule to take account of the variety of circumstances in which a homicide may occur.

Wendy Robinson and Scott Settree are the only children of Donald and Margaret Settree.

In December 2014 Scott shot his parents at close range following a minor domestic dispute with his father, Donald. The dispute escalated from an argument to a physical assault by Scott on his father; a demand by his mother Margaret that he leave the family home; followed by Scott shooting Margaret and then Donald in quick succession using a shotgun he kept in his bedroom.

On trial for the murder of his parents, the Court determined that Scott was not guilty of murder by reason of mental illness, ordering that Scott be detained in a correctional facility or at such other place as determined by the Mental Health Review Tribunal until released by due process of law.

Donald and Margaret left reciprocal Wills (often called mirror Wills) dated 23 February 1993 which provided that the whole of each estate passes to their children in equal shares as tenants in common.

The combined value of Donald and Margaret’s estates (including superannuation and life insurance entitlements) was in the order of $2,000,000.

Each will contained an express provision that, if either of the plaintiff or the defendant were to predecease their parents leaving children (that is, grandchildren of the deceased parents), then the grandchildren would, in equal shares, take the share which would have passed to their parent.

Wendy has two adult sons, respectively born in February 1996 and April 1997. Scott had no children.

Wendy applied under section 11 of the Forfeiture Act 1995 NSW, for orders that the “forfeiture rule” apply to her brother, in the administration of the deceased estates of their parents, each of whom was shot dead by the defendant, without lawful justification, on 3 December 2014.

The Forfeiture Act 1995 defines the “forfeiture rule” as

“the unwritten rule of public policy that in certain circumstances precludes a person who has unlawfully killed another person from acquiring a benefit in consequence of the killing”.

Courts have held that the forfeiture rule applies to cases of murder and manslaughter, but not in the case of a person found not guilty of murder on the ground of mental illness.  The rule applies to intestate estates as well as those governed by a will.

In cases where an unlawful killing that does not constitute murder the Forfeiture Act empowers the Court if satisfied that that “justice” so requires:

  1. to make a “forfeiture modification order” to modify the effect of the forfeiture rule where it otherwise applies (sections 5-6); and
  2. to make a “forfeiture application order” where a person who has killed another person has been found not guilty of murder by reason of mental illness (section 11).

In all cases, where the Court has applied section 11 a major factor in its application has been revulsion attending a perception that the person who committed the actions causing a violent or unnatural death should reap a financial benefit from those actions.

In applying these various matters, in all the circumstances of the case, the Court was satisfied that justice requires that the forfeiture rule, in some form, be applied to Scott as if he had been found guilty of the murder of his parents.

Owing to Scott’s experience of mental illness, and the absence of criminal responsibility for the deaths of his parents, a primary factor in favour of the Court making an order of any type is the pre-meditated, violent and merciless character of the killings, reinforced by a lack of remorse.

The Court ordered that

  1. Scott is allowed provision for his maintenance, education and advancement in life in the sum of  $50,000 out of the estate of each of his parents (a total of $100,000) to be held on trust by the NSW Trustee (together with any interest accruing thereon pursuant to these orders)
  2. Pursuant to section 11 of the Forfeiture Act 1995 NSW, that the forfeiture rule apply to the defendant as if he had been found guilty of the murders of Margaret and Donald.