A Document is Torn – Intestacy, CPD & Revocation

The Document

On 1 March 1996, John Webster executed a document, prepared by the Clerk of the Court in Barcaldine acting as agent for the Public Trustee entitled “Instructions for Will Appointing Lionel Walsh sole executor and trustee”(“the document”) directing that his entire estate be divided equally among his siblings: Margaret Walsh, Robert Webster, and Ronald Webster.

Of the two attesting witnesses to the document, one cannot recall the circumstances of its execution. The other swears that John was “capable of making decisions”, “knew what he was doing” and recalls that John described the document as “his Will”. After the document was executed John gave it to Lionel who placed it into his office safe in an envelope.

The Break-in

On the morning of 6 June 2000, it was found that Lionel’s office had been broken into overnight. The office safe had been opened and documents from the safe had been scattered all over the floor. The document was found in the office torn. Lionel placed sticky tape on the tears and then posted the document to the Public Trustee in Rockhampton for safekeeping.

Intestacy

John died on 13 May 2013. On 24 May 2013, the Public Trustee advised that due to the fact the document had been torn it was necessary to apply for letters of administration on intestacy.

John was predeceased by his brother Robert Webster who had four children, two of which have renounced any interest in John’s estate, and the remaining two, Kim Webster-Coombes (“the respondent”) and Kerry Delahunty, are interested parties as beneficiaries under intestacy.

On 30 July 2013, Lionel instructed a solicitor to apply for letters of administration of the estate on the basis he had died intestate on 29 August 2013.

“…. There were cattle on one of the assets of the estate that were required to be sold because there is little feed and the waters are inadequate… some of the cattle must be mustered off the property quickly or they will die. We cannot shift them because they have John’s brand…”

The letters of administration were granted on 3 September 2013, the estate has yet to be fully administered.

CPD Seminar

Sometime following the grant of administration Lionel provided the solicitor with a copy of the document. In 2016, the solicitor attended a continuing professional development(CPD) seminar where the topic of “torn wills” arose. When the solicitor described how the Will had been torn he was informed that it could be the subject of an application for Probate as the deceased’s Last Will.

Following this the solicitor explained to Lionel they could bring an application for probate; however, Lionel was concerned about the costs of going to court with such a small estate. This discussion went on “for several years. Meanwhile, the solicitor was attending to matters regarding other family estates, including the estate of the grandmother, and the father of the respondents.

The Application

On 10 August 2020 Lionel sought orders that the grant of letters of administration be revoked, and Probate of the document be granted.

The issues to be determined in the application were:

1. is the document the Last Will and Testament of John Dyson Webster; if it is not, the grant of letters of administration would not be revoked.

2. if the document is a Will, was it revoked?

3. if the document is the Last Will and Testament of John Dyson Webster, is it appropriate under the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) to exercise the Courts discretion in favour of revoking the grant of letters of administration.

The respondent argues that the discretion ought not to be exercised as the applicant elected to pursue the grant of letters of administration and there has been a significant delay between John’s death in May 2013 and the bringing of the application on 10 August 2020.

The Decision

The Court accepted that the document was intended by John to constitute his Will and was not revoked. The grant of administration was made due to the mistaken advice that the Will could not be admitted to probate because it had been torn.

As the document is the Will of John Webster, and expresses his true testamentary intention, the Court considered it is appropriate to exercise the jurisdiction under s 6(1) of the Succession Act and r 642 of the UCPR to revoke the grant of letters of administration made on 3 September 2013 and admit the document to probate as the Last Will and Testament of the deceased.

Bankrupt, Family Provision, Chose in Action, Out of Time

In PERGOLETO v CHANDLER & ORS [2021] SASC 30 the applicant is one of the children of Antonia Pergoleto (“the deceased”) who died in August 2018. A grant of probate was made in March 2019 and the entire estate was distributed in accordance with the terms of the will.

The family members have been estranged for many years with the respondents becoming aware that the applicant was an undischarged bankrupt following commencement of proceedings. Although the applicant became a bankrupt on 1 June 2015 due to his lack of cooperation with his trustee in bankruptcy, the period of bankruptcy has been extended to eight years.

Initially the applicant was legally represented, but at the time of the proceedings was self-represented.

Time in which application can be made

An application under theInheritance (Family Provision) Act 1972 (“the Act”) made more than six months after the date of the grant of probate may prove difficult in respect of an extension of time as the entire estate has been fully distributed prior to the commencement of the action. The applicant commenced proceedings out of time on 20 November 2019.

An extension of time

Where there has been a final distribution of the estate, no order for provision can be made. As the court has no power to grant an extension of time and no beneficiary who has received a distribution would be vulnerable to either a proprietary or personal claim. Therefore a claim under the Act must be dismissed.

In the alternative the applicant sought other common law remedies in the event that the statutory claim is unsuccessful claiming that he was misled by the respondents, about progress of the grant of probate and the status of the distribution of the estate. The respondents deny those claims and submit the applicant knew the position in relation to the application for a grant of probate.

The interlocutory application seeking summary dismissal was set for argument on 2 March 2021. In early February, citing health reasons the applicant requested by email that the argument be adjourned. The respondents objected; the Court refused the application with the parties being notified on 9 February 2021 that the argument would proceed on 2 March. There was no attendance by the applicant.

The effect of bankruptcy

Additionally a bankrupts property (including a chose in action) vests in the trustee in bankruptcy therefore, it could be argued that the claim of the bankrupt under the Act would vest in the trustee as soon as it is acquired by the bankrupt. Thus, the question of whether a bankrupt retains the right to bring a claim under the Act may largely be academic. As once the property of a bankrupt vests in a trustee, the bankrupt no longer has standing in legal proceedings in respect of that property.

The Court accepted the submission that only the trustee can “agitate that question” and has choosen not to do so. Therefore the applicant has no standing to proceed with the causes of action in deceit or conspiracy to defraud. The respondent is entitled to summary dismissal in relation to the causes of action in deceit or conspiracy to defraud as well.

Executor, De facto, Family Provision, Devastivit

A devastavit means ‘to have laid waste’ defined legally as – a mismanagement of the estate by the deceased’s legal personal representatives

in squandering and misapplying the assets, contrary to the duty imposed on them”;

for which they shall answer out of their own pockets as far as they had, or might have had, assets of the deceased’.

Devastavit actions are usually brought against executors who have spent estate money extravagantly or misapplied estate assets.

Chronology

Olga Hart and James Ross lived together for about 20 years; separating ‘in or around 2003’. Neither Olga, nor James sought a property settlement under the Domestic Relationships Act 1993 (ACT), the Family Law Act 1975 (Cth), or by informal arrangement.

Olga made wills in 1996, 2009, 2015, 2016, and 2017. James claimed that in each of these wills he was named executor and was to receive a percentage of the value of Olga’s residential property upon her death.

The Trust

In December 2017, Olga suffered a heart attack and was diagnosed with stage four lung cancer in February 2018, in August 2018, she met with a solicitor who advised that a “no contest” clause in her will would be unenforceable however in the ACT if a deceased estate has no net value there would be no funds available for a family provision claim. Olga was advised to create an express trust and to write cheques to the trust to “exhaust” her estate.

On 29 August 2018, Olga as settlor, appointor and trustee established the Olga Hart Trust (“the Trust”); around this time Olga drew two cheques (the Cheques) totalling $1.2M  in favour of the Trust. Clause 10 of the Trust deed provided that upon Olga’s death her daughter Donna Gordon succeeded her as trustee.

Olga’s Last Will

On 5 September 2018, Olga prepared her final will (the Will) naming Donna as the sole executor and making a provision that James receive a cash sum of $200,000.00 but no property from the estate. James was not made aware of the existence of this will until after Olga’s death.

Following Olga’s death on September 30 2018 Donna became the trustee of the Trust. James filed a caveat on 18 October 2018  against the probate of Olga’s estate (the Estate). On 25 October, James was informed that the Estate had insufficient assets to pay the Cheques issued by Olga to the Trust, therefore any gifts and bequests in the Will would not be satisfied. However, if James agreed to abandon any rights against the Estate by 14 November 2018 he would be paid the bequest in the Will.

Relief sought

In commencing proceedings seeking declaratory relief and an order for provision under s 8 of the Family Provision Act 1969 (ACT) (Family Provision Act) James claimed, (and Donna denied) that following the separation he and Olga maintained a close relationship based upon mutual emotional and financial support. In the alternative, James sought damages for the tort of devastavit, and relief in equity against Donna in her own right; in her capacity as trustee of the Trust, and, in her capacity as Executor of the estate.

Donna was granted probate on 25 March 2019. In late April 2019 the Cheques were presented and dishonoured by a financial institution. The Cheques were dishonoured on 26 April 2019.

Issues before the Court

The issues for the Court to determine was does the Estate, have sufficient assets to make the bequests provided for in the Will?

If the answer is “No”, has the defendant, by presenting the Cheques: Laid waste to the estate giving rise to liability for devastavit ? Committed a fraud on the power? or; Breached her fiduciary duty?

Donna submitted and the Court agreed the Cheques, indorsed by Olga were held in her capacity as trustee of the Trust. Similarly, the Cheques were each a chose in action, and therefore property (or value) capable of being held on trust prior to Olga’s death. As such, all of her assets were held in the Trust under the control of the trustee, as prescribed under the terms of the Trust deed. Therefore, immediately before Olga’s death, the liabilities exceed the assets of the Estate.

In the Court’s analysis of the law and the facts of the case James claims for declaratory relief, damages for the tort of devastavit, relief in equity, and further provision pursuant to s 8 of the Family Provision Act all fail. Alternatively, the trustee has established a claim under the Cheques Act. Therefore the Estate has no positive value.

Lex Domicilli, Lex Situs & International Intestacy

In September 2010 KH died aged 63 in Kochi City, Japan leaving an estate in Japan valued at more than $1.2 million and three bank accounts (“moveable property”) in Queensland valued over $1.5 million. KH had never married and left no issue. His only sibling, a sister, had died in infancy. His father died in 1991 and his mother in 1999. KH had at least one maternal first cousin living in Japan at the time of his death.

KH was born in Japan and between 1986 and 1995 travelled regularly between Japan and Australia. He lived in Australia from 1997 to 1999 and returned to live in Japan in 1999. KH died without a will; the Japanese Rules of Succession (“the rules”) do not recognise first cousins; therefore the deceased’s estate in Japan was deemed to belong to the Japanese Treasury.

A Japanese solicitor appointed by the Japanese Family Court to administer the estate,( “the Japanese administrator”) engaged a Queensland solicitor to act on his behalf in administering the Australian estate.

In February 2013 the Public Trustee of Queensland (PTQ) was appointed as Administrator of the deceased’s Queensland estate. In Queensland first cousins are recognised as next of kin under Part 3 of the Succession Act1981 (Qld). (“the Act”)

In January 2017, the PTQ applied to the Court under s 134 of the Public Trustee Act 1978 (Qld) seeking advice as to whether it should distribute the Queensland estate of KH’s first cousin.

The issue before the Court was whether KH’s movable property in Queensland vested in the Japanese Treasury, under the Japanese Laws of Succession. As KH had property in Queensland it is necessary to consider Queensland law in circumstances where a person has died without a will but has left moveable property within the State.

The applicable succession law for the moveable property of a deceased estate is the lex domicilii. (law of the deceased person’s domicile); immovable property of a deceased person is dealt with under lex situs (the succession law of the jurisdiction where the immovable property is located)

However, in August 2014, the Japanese Family Court following submissions made by the Japanese administrator granted permission to exclude the movable property from the estate.

The effect of the decision was that the Japanese administrator has no interest in the Queensland Estate. The Court was satisfied that the PTQ should be advised and directed that he can distribute the Queensland Estate of the deceased to the persons entitled under Part 3 of the Act.

Aboriginal Objects, Defective title, Security for costs

In New South Wales Aboriginal objects are the property of the Crown, under s 5(1) of the  National Parks and Wildlife Act 1974 (NSW), (”the Act”) an “Aboriginal object” includes Aboriginal remains which would also be the property of the Crown (s 83). The Act imposes offences on individuals who ‘harm’ (which includes moving) these objects. The penalties for harming an Aboriginal site are up to $275,000 and one year’s imprisonment for individuals and $1.1 million for corporations.

A review of potential Aboriginal heritage issues should form part of a ‘due diligence process’ to ensure that Aboriginal sites are not damaged. Similarly, a purchaser finding that the property contains an aboriginal object may give them certain rights against the vendor including the right to rescind a contract for the sale of land for a ‘defect in title’.

The Case

A recent case involved the sale of land and a business near Byron Bay for a purchase price of $3 million. Following the exchange of contracts, the purchaser became aware of the Aboriginal significance of the land the subject of the sale, being the burial site of two Aboriginal elders of the Bundjalung tribe, Harry and Clara Bray. The Arakwal people of the Bundjalung Nation, are the custodians of Byron Bay. Archeological evidence suggests that Indigenous Australians have been living on the north coast of NSW for over 20,000 years. Harry Bray, the son of “King Bobby” of the Bumberline Tribe and the direct descendant of the Arakwal people, was a prominent Indigenous leader.

The reputed existence of the burial site gave rise to a broader dispute as to whether there were Aboriginal objects in or on the land, and if so, whether their existence constituted a defect in title. The vendor did not accept that there was a defect in title. However, the purchaser terminated the contract by notice on 25 September 2015. On 6 October 2015, the vendors responded, alleging that the purchasers’ notice repudiated the contract. The property was subsequently resold by the vendor on 29 November 2015 for $2.525 million.

At first instance, the Court held that ownership of the objects was never vested in the vendor therefore the presence of aboriginal objects on the land did not amount to a ‘defect in title’ as they were never intended to be transferred to the purchaser. The vendor was able to transfer clear title of the land to the purchaser, therfore the purchaser’s termination was invalid, and the purchasers deposit was forfeited to the vendor.

The Appeal

In allowing the appeal the Court found that there were “Aboriginal objects” on the land (in particular, the remains of two Aboriginal elders, Harry and Clara Bray, known as the King and Queen of the Bundjalung tribe; and a memorial stone and plaque recording their burial near the location); and that the presence of those objects was capable of constituting a defect in title. In those circumstances, the refusal of the vendors to address the purchasers’ objections constituted repudiation.

Alternatively, the vendor’s insistence on completion based on an invalid notice to complete, coupled with an invalid claim for default interest, would have also constituted repudiation.

Security for Costs

This decision has been appealed. With the vendor ordered to provide security in the sum of $40,000 for the purcaser’s costs of the appeal either by payment of that amount into Court or in such other form as the parties agree.

Intestacy, Inertia & Distribution

In 2018, Pamela Frimont became administrator of the estate of her father Albert Bruce Case, (‘the estate’)who had died intestate in 1968. Albert was survived by a widow Joyce and three children, Kenneth, Robert and Pamela (another daughter Sylvia had died as a child in 1944). Kenneth Case obtained Letters of Administration of Albert’s estate on 18 June 1968, but by the time of his death on 1 October 2003 Albert’s estate remained unadministered, and it’s major asset – land at Blaxland’s Ridge (“the Land”) had not been transmitted into his name as administrator. A property on the Land has been occupied by Pamela’s nephew Donald Case (”the property “) for more than a decade.

Albert’s Intestacy

In 1968 s 50(a) of the Wills, Probate and Administration Act 1898(NSW), provided that Joyce was entitled to a one-third share of the intestate estate. Joyce died in 1986, leaving a will appointing her son Robert executor and sole beneficiary of her estate. A grant of probate of Joyce’s estate included her right to the due administration of Albert’s estate, resulting in her one third interest in the land being transmitted to Robert.

In September, 2010, Donald and his wife Peggy, agreed to give up their present accommodation and move into the property on the Land and provide domestic services to Robert. Donald paid some amounts of Council rates but has otherwise never paid rent.

The Land must be sold as since Albert’s death, a number of beneficiaries of his intestate estate have died, and there are now six people – including Pamela and Robert – entitled to share in Albert’s estate.

In November 2018, Pamela’s solicitor wrote to Donald advising that she had decided to sell the land in order to finalise the estate. Subsequently, she has agreed to sell the land for $1.27 million, with vacant possession. Pamela then arranged for two written notices to be given to Donald to vacate, the first in November 2018 and the second in May 2019.

Donald’s Action

Donald submitted that s 119 of the Residential Tenancies Act provides the Supreme Court has no jurisdiction to obtain recovery of possession of residential premises subject to a residential tenancy agreement. In the alternative, Donald submitted that he occupies the premises from year to year, that such a tenancy is terminable on one month’s notice under s 127 of the Conveyancing Act 1919 (NSW), and that no such notice has been given.

The principal issue between the parties was whether or not Donald was entitled to possession of the land by virtue of a residential tenancy agreement (RTA) between the estate and himself. Section 13 of the Residential Tenancies Act 2010 (NSW) defines a tenancy agreement as

“an agreement under which a person grants to another person for value a right of occupation.”

Donald submitted there were three occasions when a RTA came into effect;

1. when he arranged with Robert to move in to the property in 2010.

2. when Robert died in 2011.

3. when the Pamela became the Administrator in 2018.

Estoppel

Donald submitted that by seeking possession Pamela had acted unconscionably and as Administrator, had encouraged him to believe an RTA was in force by accepting that he pay half the rates. There was no evidence to support this claim for estoppel.

In holding that Pamela had a right of possession the Court stated 

“when the present proceedings were commenced there was no residential tenancy agreement in place. The defendant has no right to remain on the land.”

The primary judge concluded that there could be no residential tenancy agreement with the administrator based merely upon Donald’s continuing occupation of the premises and payment of a fraction of the rates and charges of which the administrator was unaware.

Donald appealed the decision submitting the primary judge erred in failing to find that he had residential tenancy agreement.

The Appeal

In dismissing the appeal the NSW Court of Appeals held that

“under s 13, a residential tenancy agreement may be implied, the only matters relied upon here are the defendant’s occupation of the premises, and the fact that he paid amounts off the rates from time to time.”

Similarly If the payment of half the rates was part of an agreement in return for which he was given a right of occupation, Donald’s failure to pay amounts totalling half would mean only that he was in breach of that agreement. It would not, of itself, mean that there was no agreement or that he had not partly carried out any such obligation.

Sibling Co-Executors, Family Squabbles & Indemnity Costs

Giuseppina Condo died on 16 May 2020 survived by her five adult children. Although the relationship between the children was strained Giuseppina named two of her children, Maria (the plaintiff) and John (the defendant) executors of her estate in a Will dated 10 November 2016.

Around the same time, as the WIll was made Giuseppina appointed the plaintiff as her attorney, (including her medical attorney) with the defendant appointed as her alternate attorney. However, the defendant claimed he was only advised of this in 2019 further exacerbating the tensions between the plaintiff, the defendant and their siblings.

The defendant and the other children were unhappy with the plaintiff’s lack of transparency and communication regarding their mother’s care needs and medical condition. As a result, in January 2020, the defendant made an application to the Victorian Civil and Administrative Tribunal that had not been heard at the time of Giuseppina’s death

The Funeral

In Australia, a person’s wishes with respect to the disposal of their body are not legally binding. Provided it is not unlawful,wholly unreasonable or exercised in a way that prevents family and friends from reasonably and appropriately expressing affection for the deceased, the executor may dispose of the body in any manner they wish.

The defendant submitted that Giuseppina was a devout Catholic who wished for a traditional Italian service. However, he and two of his siblings were excluded from discussions at the aged care facility concerning the funeral arrangements which resulted in a substantial dispute between the siblings regarding Giuseppina’s funeral.

Notwithstanding this, on 23 June 2020, the plaintiff’s solicitors proposed that a joint funeral service take place. On 14 July 2020, the defendant’s solicitors extended this offer to include the dressing of the deceased as well as the selection of the casket and flower arrangements.

However, the plaintiff appears to have subsequently objected to that proposal; as a consequence, the deceased remained uninterred for more than two months after her death. The plaintiff commenced the proceeding.

Plaintiff’s application

In July 2020, the plaintiff sought orders giving her the right and responsibility to dispose of the body of the deceased in her sole discretion. In addition, the plaintiff asked the court to order that:

she directs how the funeral and burial be conducted and provide necessary instructions, to the exclusion of the defendant;

the funeral and burial service of the body be conducted as soon as practicable; and

the defendant pays the plaintiff’s costs on an indemnity basis.

The defendant sought orders that the dressing and viewing of the deceased be conducted by the plaintiffs funeral director and the funeral and burial be conducted by a funeral director chosen by the defendant.

Consideration

The court held that although the parties are the executors of a deceased estate, it is simply a dispute between siblings over the funeral and burial arrangements for the deceased. The plaintiff’s refusal to consult with her co-executor and at least two of her siblings on the funeral and burial arrangements and her refusal to accept what were fair compromises was unreasonable. 

The court found the defendant was amenable to the idea of a joint funeral and his offers remained open when the plaintiff’s solicitors asked the defendant’s solicitors to confirm whether he had instructions to accept service.

The Court ordered indemnity costs against the plaintiff as a result of the plaintiff’s unreasonable conduct in commencing such adversarial litigation when reasonable offers remained on the table, putting the estate at risk for costs of the proceeding.

Buried Cash & the Informal Will

In Victoria, for a will to be valid, it must be in writing and signed by the testator and witnessed by two or more people present at the same time; at least two of the witnesses must attest and sign the will in the presence of the testator (but not necessarily in the presence of each other).

However, s 9 of the Wills Act 1997 (the Act) provides that the Supreme Court may accept a document that reflects the testamentary wishes of the deceased but does not meet the formalities expressed in the Act (an Informal Will).

Additionally, the Court must be satisfied (on the balance of probabilities) that at the time the Informal Will was made the deceased had testamentary capacity and was not pressured or coerced into making it.

Marija Josipovic died in October 2015, leaving a handwritten will dated 11 September 2002 (‘the will’) appointing Maria Roscic and Mate Roscic as executors of the estate. Mate predeceased Marija and Maria has renounced probate. State Trustees(the plaintiff) has been authorised to apply for letters of administration with the will annexed under the Trustee Companies Act 1984.

The plaintiff discovered in Marija’s safety deposit box the certificate of title to her house and a document handwritten in Croatian and signed by Marija dated 12 September 2002 (‘the informal document’). The informal document directed her executors to recover $50000 buried in the backyard of her home and give $45,000 to Ilija Josipovic and keep $5,000 for their assistance. It also contained a burial direction, and a wish for Ilija Jospovic to use the money to build a monument.

The plaintiff followed the instructions and discovered $50,000 cash buried in the backyard of Marija’s home as described by the informal document.

The plaintiff submits that Marija intended the informal document to take effect as a testamentary document. Marija had signed the document, it was stored with her financial institution with other important items and was executed only a day after her will, thereby forming part of a broader course of action settling her testamentary affairs.

Although the plaintiff could not provide evidence in respect of Marija’s testamentary capacity at the time the will or the informal document was drafted. Medical evidence suggests that Marija had no cognitive deficit that would impair her capacity. Additionally, the written contents of the will support that Marija understood the nature of her assets and the effect of the document which correctly identified the amount of cash stored in the ground and its position, and directed her named executors to carry out her instructions for distribution of the cash.

Given the deceased prepared the document and made arrangements for it to be stored in her safe deposit box and there is no evidence to suggest the beneficiaries of the buried funds were aware of it, the Court was satisfied the deceased knew and approved of the informal document and it was not procured by undue influence.

The court accepted that Marija intended that the document the document would take effect, in conjunction with her will, upon her death; intending that the informal document take effect as a codicil to her will.

Statutory Wills

Luciano Paoli is 84 and made a will in 2007 – in late 2019 following changed financial circumstances he instructed solicitors to make a new Will. On 21 November 2019 Luciano’s solicitor prepared a draft Will based on Luciano’s final instructions, however, before that draft Will was executed Luciano suffered a stroke.

The Application 

Luciano’s wife Vlasta applied to the court pursuant to s 7 of the Wills Act 1936 (SA) (the Act) for the making of a statutory will reflecting the final instructions given by Luciano to his solicitor. 

The Court appointed a litigation guardian for Luciano.

Luciano and his wife Vlasta have been married for 39 years. There are no children of the marriage. Luciano has three children from an earlier marriage and is the stepfather of the Vlasta’s only child. 

Statutory Wills

Section 7 the Act, empowers the Supreme Court of South Australia to authorise a Will to be made on behalf of a person who lacks testamentary capacity, in situations where adults lose their legal capacity; or have never had testamentary capacity.

In doing so, the Court must be satisfied that: 

  • the proposed testator lacks testamentary capacity, and 
  • the proposed Will accurately reflects the likely testamentary intentions of the proposed testator, and 
  • it is reasonable in all the circumstances that the Order should be made.

The evidence provided in lost-capacity cases tends to be less problematic. As the Court has some indication whether the terms of the proposed Will reflect the likely testamentary intentions as the proposed testator was once able to give effect to their wishes and views.

The Application

An application supported by affidavit evidence must be served upon any person who may have an interest in the proceedings and will include any family members who would otherwise benefit under intestacy laws.

All of Luciano and Vlasta’s family members were served with proceedings and have had the benefit of legal advice; it was inferred they were content for the Court to make the proposed Will. Luciano had no contact or communication with one of his children for 30 years. After consideration, the Court dispensed with the need to serve proceedings upon her. 

The Decision

The Court was satisfied that the instructions Luciano gave to his solicitor in late 2019 for the making of a new will were reflected by the terms of the proposed will. The applicant established that it was reasonable in all the circumstances to make the orders sought. Although the estate is substantial, and the proposed Will leaves Luciano’s entire estate to Vlasta if she survives him. The Court was satisfied that would have been Luciano’s testamentary intention if he now had capacity. 

Bankruptcy and the Secret Trust

Maria Mammarella died on 18 October 2014; leaving a will dated 4 April 2014 appointing her daughter Marilena and Marilena’s husband, Donald, as joint executors and trustees. Maria left a one-fifth share in her estate to each of four other daughters Sylvia, Lucia, Lynette and Marilena; the remaining fifth share was left to her granddaughter Stephanie. (the share). 

Probate of Maria’s will was granted to the executors on 15 January 2015. The total net value of the estate was over one million dollars.

Bankruptcy

At the time Maria made her will Stephanie’s mother Rita was bankrupt; to be discharged on 24 December 2016. 

When a person is declared bankrupt, divisible property – including the bankrupt’s house, shares, vehicles (worth more than the threshold amount), vest in the bankrupt estate for the benefit of creditors.

Additionally, after-acquired property – including an interest in a deceased estate vests as soon as it is acquired by the bankrupt.

Rita (the plaintiff) claims that her daughter Stephanie (the defendant), received by the funds from the estate on trust for her. The alleged trust is said to have been a ‘secret trust’. 

Secret Trust

A secret trust arises when a testator tells a person (the donee) that they are to be given property on the testator’s death to hold on trust for a third party, to which the donee agrees. Despite its informality if the following elements are present a secret trust can be established and will be enforced by the court: 

• the intention of the testator to subject the donee to an obligation in favour of the beneficiary. 

• communication of that intention to the donee. 

• the acceptance of the obligation either expressly or by acquiescence. 

It is, therefore, a trust which the testator intends to create, that the court will enforce by requiring the donee to hold the property for the other’s benefit. 

Submissions

Rita submitted that she asked Maria to put her share into a trust with Stephanie until the period of bankruptcy was over as she was worried, she would lose her inheritance to creditors. 

Following the establishment of the alleged secret trust, the relationship between Rita and Stephanie deteriorated; with Stephanie obtaining a restraining order against her mother. 

Stephanie submitted that at no time did Maria indicate to her that a bequest had been made to her in the will and that it was to be held on trust for Rita and

“that the funds were to be given to my Mother once she had been discharged from bankruptcy.” 

Stephanie submitted that she assumed her mother was endeavouring to manipulate her into agreeing to her request

“I may have said to her, okay, but only to stop her pestering me.”

The court found that Rita failed to establish that Maria had an intention to impose any obligation on Stephanie at all; and was satisfied that there was no secret trust and that the bequest as made in the will was intended to be absolute.