Executor, Joint Tenancy, Survivorship & Power of Attorney

Maud Inch made a Will leaving her estate to her three children; she appointed two of her children, Cecil and Maud junior, as her executors. Her estate included real estate at Bondi Junction known as lot 2. Maud died in 1968; Cecil and Maud junior obtained probate and transmitted lot 2 to themselves as executors, and joint tenants; later Maud made Cecil her power of attorney. In September 2008 Maud junior executed a Will, using a printed “will form”naming her friend Aurera Valverde as executor.

Joint tenants have equal ownership and interest in the property and the right of survivorship; therefore if one of the joint tenants dies, the property will automatically pass to the surviving joint tenant regardless of any contrary intentions in the will of the deceased.

In September 2009 Cecil made a will appointing his wife Joycelyn his sole executor and beneficiary.

In October 2009 Cecil and Maud exchanged contracts to sell lot 2. Five weeks later, Maud junior died, Cecil completed the sale, by signing the transfer for himself and under Maude Junior’s power of attorney. Two weeks later, Cecil died. The proceeds of the sale were paid to Jocelyn (although probate was never obtained). Aurera brought proceedings against Jocelyn as executor of Cecil’s estate to recover part of the proceeds of the sale.

A power of attorney operates until the death of its grantor; the executor of the estate handles all financial and legal matters, according to the provisions of the will following the death of the grantor. An individual can designate a power of attorney to an attorney, family member or friend and also name that same person as the executor of the estate. Maud assigned power of attorney to Cecil, who represented her in life. When Maud named Aurera as executor of her estate in her will, Aurera represents her in death.

The Court held that the expression “joint tenancy” takes on a different meaning when used in the context of several holders of the office of executor of a deceased estate; in order to enable them to perform their executorial duties, the law gives them a joint interest in all estate assets; that joint interest differs from an ordinary joint tenancy because, not only are all the executors seized of the entire interest, but so is each one; it is a joint tenancy, but of a special kind: Union Bank of Australia v Harrison, Jones & Devlin Limited(1910) 11 CLR 492 at 520-521.

Although executors might be declared to be “joint tenants”, they are also and primarily executors; and the nature of their office does not, for example, permit them to sever their joint interest and to create a tenancy in common. Unless Cecil and Maud agreed to the contrary, the respective beneficial entitlements of Cecil and Maud junior to, or in respect of, Lot 2 were to be determined by reference to the will of Maud senior. Section 26(1) of the Conveyancing Act 1919 provided that those beneficial entitlements were held as tenants in common in equal shares. `

At the time contracts for Lot 2 were exchanged in September 2009, Cecil and Maud junior were joint tenants themselves and as beneficiaries under the will of Maud senior, as tenants in common in equal shares. With the passage of time, and in the absence of evidence about ongoing administration of the estate of Maud senior, it is more probable than not that, but for the controversial question whether “assent” requires the formality of registration under the Real Property Act, they held legal title as trustees for themselves rather than as executors of Maud senior’s estate.

Subject to the registration of the notice of her death (under the Real Property Act, section 101), Maud junior’s role as an executor or trustee of Lot 2 ended. As between Cecil and Maud junior’s estate, half, at the time of her death, Maud was entitled to a half share of the property as a tenant in common in equity, that entitlement continued to subsist despite her death, enforceable by her legal personal representative, Aurera subject to a grant of representation. Maud junior upon completion of the sale of Lot 2 Bondi Junction, by the contract of sale dated November 2009, was beneficially entitled to 40% of the net proceeds of the sale.

 

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