Prince Estate Announces New Album

In April 2016 Prince Rogers Nelson died aged 57 at his home, in suburban Minneapolis Minnesota. Estimates of his estate range from $150 million to $300 million.

On the second anniversary of Prince’s death his estate has released an original recording of ‘Nothing Compares 2 U and launched two new websites – the retrospective Prince Discography annotated, and the fan focussed Prince2Me.

The estate announced that on September 28 a new Prince Album will be released which will comprise a set of songs created at the same time.

There are also plans for the release of a Prince memoir at the end of the year. The artist delivered 50 pages of handwritten work to a publisher before his death in 2016.

Prince’s previous executors Bremer Trust, struck a global agreement with the superstar’s former record company Warner Bros Record however Prince had entered a deal with Jay-Z’s music streaming site TIDAL a month before his death.

Comerica Bank & Trust, which replaced Bremer as administrator of the estate the day after the Universal deal was signed asked the Court to rescind the deal to avoid litigation, as it “cannot unequivocally assure” the court that the two contracts do not conflict.

Three of Prince’s half siblings Sharon, Norrine and John R. Nelson were upset that Comerica removed the contents of Prince’s vault from his Paisley Park studio complex in Minnesota without their permission and shipped the materials to California and filed a motion to remove Comerica Bank & Trust as estate executor. Comerica has said the company discussed the move with the heirs.

Courts ordered an investigation into the nullified $31 million deal between the Prince estate and Universal Music Group. The deal comprised all of Prince’s music not under contract to Warner Music as well as the contents of his “vault” reportedly containing thousands of unreleased recordings. The deal was rescinded following the investigation of Warner’s claims it held the rights to some of the recordings included in the Universal deal due to expiration dates of Warner’s rights over them.

TIDAL claimed that the deal included the streaming rights to Prince’s entire back catalogue and exclusive rights to his latest release HITnRUN; as well as an additional unreleased full-length studio album and exclusive streaming rights to Prince’s previously released catalogue; in November 2015, Prince pulled his entire catalogue from all other streaming services.

However, the Prince estate questioned the validity of Prince’s agreement with Tidal. During the legal battle, Prince’s catalogue returned to all major streaming services.

The estate charged TIDAL with streaming Prince content illegally, and demanded specific documents be shown. TIDAL refused, saying these documents were confidential. The dispute was settled in April with all parties satisfied.

Two days after a Minnesota judge said it was in the best interest of the estate to end litigation and allow the deal to go forward. It was announced that a new album of previously unreleased music from Prince’s storied Vault would debut on TIDAL in 2019.

“I’m very pleased this is resolved, and we get to honour the relationship between Prince and Tidal with this album. We look forward to fans hearing the new music and experiencing the genius of Prince.”

The album will stream exclusively on Tidal for 14 days and will be available for download seven days after its debut. That will be followed by a global physical release by the Prince estate.

Jay-Z is working with the Prince estate to select songs for the new album.

There are also plans for the release of a Prince memoir at the end of the year. The artist delivered 50 pages of handwritten work to a publisher before his death in 2016.

Comerica and its lawyers have already collected at least $5.9 million in fees and expenses, and the lawyers for Sharon Norrine and John wrote “There is legitimate concern that at the end of the Estate’s administration there will be little, if anything left to pass on to the Heirs,” the $5.9 million doesn’t include a pending request for nearly $2.9 million in fees and expenses for Comerica and its lawyers.

The Carver County District Court has admonished everyone to keep spending under control, writing that the estate “is not an unlimited resource!”

It is worth noting that although Prince didn’t leave a Will and his assets were controlled by a trust the fact that he didn’t leave a clear direction for how his estate would be distributed following his death.

Reg Grundy, Rich List & A Nominal Estate

Reg Grundy died in Bermuda (his place of domicile) on 6 May 2016, aged 93 years, leaving a will dated 21 January 2011 and sufficient property in NSW to ground the jurisdiction of the Court to admit the will to probate.

In 2015, Reg’s wealth was estimated as being $809 million, a figure largely stemming from the $320 million sale of Grundy’s company to Pearson Television in 1995.

Reg had one a daughter from his first marriage. She changed her name by deed poll in 2000, to her present name, Viola La Valette. She has been known as Robin Grundy.

There was a degree of estrangement between Reg and Viola, which he referred to in his autobiography

“The loss of my daughter is the greatest heartbreak in my life. I have lost a daughter and gained a wife who is the light of my life. If only the three of us could have lived happily ever after.”

Joy Chambers-Grundy is Reg’s widow, executor and, having survived him by 30 days, takes “the remainder” (the residue) of his estate after provision of a lifetime annuity of $US250000 granted in favour of Viola and payment of his just debts, funeral and testamentary expenses.

The limited provision made for his daughter in his will may be due to his disappointment with Viola’s treatment of him and his belief that she was unreliable in her handling of property and in need of protection.

In April 2017 Viola applied, for a grant of family provision relief in respect of the estate, or notional estate, of the deceased.

Generally speaking a Family Provision Claim is made in a jurisdiction where the deceased lived at the date of their death, or owned assets in that jurisdiction, or both.

In most Jurisdictions legislation governs who can bring a claim against a persons estate. Generally speaking this is:

  • The deceased’s spouse, a person living in a de facto relationship with the deceased at the time of death, a person living in a close personal relationship (such as a volunteer carer) with the deceased when the deceased died;
  • The deceased’s child;
  • The deceased’s former spouse;
  • A person who was:
  • Dependent (wholly or partly) on the deceased at a particular time (this may include a former de facto spouse, parent, sibling, or step-child; and
  • A grandchild of the deceased, or a member of the household of the deceased;

and

  • believe they have been left without adequate provision for the proper maintenance, education or advancement in life.

The Court takes a number of factors into account: the applicant’s financial position, relationship with the deceased, the size of the estate and the deceased’s relationship with other persons who are eligible to make a claim.

Adequate provision is unique and therefore difficult to define.

The Court considers a broad range of factors, as the definition of adequate provision is unique to each circumstance brought before the court.

Joy was reticent to provide Viola with a copy of her father’s will claiming that Reg had died without assets. Correspondence from the estates solicitors stated;

Dr Grundy died without any assets in his sole name, so that his estate owned no assets upon deathTherefore, Dr Grundy‘s Last Will will not be submitted for probate in the Supreme Court of Bermuda.”

In April 2017  Viola’s solicitors requested that Joy provide them with the information identified in that paragraph, they declined the request responding:

“As ought to have been clear from our letter of 12 April 2017:

(a) Dr Grundy died domiciled in Bermuda and left no estate whether in Bermuda or elsewhere;

(b) the law of New South Wales is irrelevant and the Courts of New South Wales have no jurisdiction;

(c) we do not now have, and nor will we be seeking, any instructions to accept service of any misconceived proceedings that your client should care to issue in New South Wales.

Viola’s solicitors noted the Bermuda lawyers’ statement and invited them to address the question of notional estate, both generally and by specific reference to particular items of property located in New South Wales, which they contend constitutes the notional estate.

Notional estate orders are orders issued by the Court which are intended to make available for family provision orders assets that are no longer part of the estate of a deceased person because they have been distributed either before or after the deceased’s death (either with or without the intention of defeating applications for family provision).

Notional estate provisions brought to the forefront the distinction of ‘estate versus notional estate’ that had been implicit in the decisions on the legislation prior to the introduction of the Family Provision Act 1982(NSW). It made explicit in the legislation that ‘estate’ and ‘notional estate’ were different. Things subject to contracts (like mutual wills) were not within the definition of ‘estate’. To bring such property within the legislation required now the application of the complex procedures and definitions of ‘notional estate’. This requires a particular kind of transaction, an absence of relevant consideration, a defined time frame in which the transaction took effect and a range of other matters to be considered before property can be designated as notional estate and made the subject of an order for family provision under the Act.

Joy submitted that if the case were hashed out in open court, it would cause embarrassment, resentment and prurient media attention, which her husband never wanted and specifically avoided. Similarly the exact size of the estate shouldn’t be of relevance to the case.

However the court disagreed, and gave Viola leave to determine the wealth of her father included granting access to her father’s will and NSW properties for the purposes of valuing them.

The court also ordered he news organisation that published a rich list that estimated Reg’s wealth at $809 million release the documents that the calculation was based on to Viola. Joy disputes this figure claiming the estate had a net value of “not less than about $214 million”

 

Jones v Westcomb – What’s 300 years?

 

Politicians and media commentators often criticise judges who disagree with the idea that the judiciary should observe strict black-letter law by labelling them “judicial activists”.  An independent judiciary, and respect for the role of Courts and tribunals, is fundamental to the rule of law.

One of the distinguishing features of the general law is that judges decide cases according to the doctrine of precedent – essentially that cases involving the same material facts must be decided in the same way.

The doctrine of precedent serves the political ideal of the rule of law; according to that ideal, courts among other institutions of state, should strive to ensure that the law is developed and applied in a consistent and predictable manner, so that citizens may order their affairs with confidence as to their rights and duties.

Recently the Queensland Supreme Court applied a rule formulated in 1711. It strikes me that a profession that is painted by some as activist stretches back 300 years in order to construe a will makers intention.

Hannes Kähler died on 5 November 2016 at the age of 72, never having married and without issue. Hannes had three siblings who pre-deceased him Jorst, Gesine and Steffen. Only Steffen had children, Maike, Tim and Anne. Steffen’s widow, Frauke the mother of Maike, Tim and Anne survived him.

Hannes’ parents had issue from other marriages, making those children Hannes’ stepbrothers and sisters. Antje and Hans-Gerd survived Hannes and are still alive. Jochen pre-deceased the testator and left no issue. Anne-Kathrin pre-deceased Hannes, and left two children who are still alive, Julia and Laura.

In November 2016, Hannes nephew Tim found a family tree prepared by Hannes with some handwritten notes written in German at the bottom and Hannes’ Australian Passport.

Tim did not find a Will but he did find a receipt for documents from a firm of solicitors that Hannes had deposited documents with in 1994 included a document described as “Will dated 15 January 1984”. Anne received a scanned certified copy of that document. Which was described as

Original handwritten document, which purports to be a Will, dated 15 January 1984;

 “MY WILL DATED 15TH JANUARY 1984

I, Hannes KAHLER, nominate as my sole beneficiary my brother, Mr. Steffen KAEHLER, of 52 Walkleys Road, Valley View, Adelaide, provided that he is not separated or divorced from his wife, Frauke Edith, nee BROLL, in which case my beneficiaries in equal shares shall be their children MAIKE, ANNE and Tim KAEHLER (3).

Townsville, the 15th of January 1984. H Káhler

My assets to date:

– Strata Title, Unit 4, 29 Stagpole St., West End (C/T in Safebox C’wealth Trad. Bank, Hermit Park)

– Cheque A/C and others with above Bank

– Superannuation Qld. Electricity Generating Board (to be Qld. Electricity Commission)

– Contents of above Home Unit

H Káhler 15/1/84.”

Hannes signature appeared at the end of each paragraph, and it was consistent with Hannes’ signature on his passport, a copy of which was deposited by Hannes with the handwritten document.

The court was satisfied that the document was an informal will as on the balance of probabilities that although it fails to comply with the formal requirements of a Will under the Succession Act it state Hannes testamentary intentions. The document is in his handwriting and titled as “my Will”, is dated and signed, and states the assets then available for distribution on his death. Although it does not appoint an executor, the document identifies the beneficiaries to whom his property is to be disposed upon his death.

The court was satisfied that Hannes never intended the document to be a draft will to be formally executed at a later date. It was deposited in safe custody with a firm of solicitors who gave him a receipt describing the document as a Will. The court believed Hannes intended the handwritten document to be his Will.

The informal will named Hannes’ brother Steffen as sole beneficiary,

‘provided that he is not separated or divorced from his wife, Frauke … in which case my beneficiaries in equal shares shall be their children’.   

At Hannes’ death although Steffen was dead he had not separated or divorced Frauke.

In determining whether there was an intestacy or the gift over took effect, the Court applied the rule in – Jones v Westcomb((1711) Prec Ch 316)

In Jones v Westcomb, a man made a will in favour of his wife for life and then after her death to the child with whom she was then pregnant, but if such child died before twenty-one, then the wife would be the beneficiary. However the wife was not pregnant at the relevant time.

Given that the testator willed, if his child died before 21, that the gift to the child should go to his wife; a fortiori(from the stronger argument)he would have intended that the gift over to her take effect, had he known at the time of the devise that she was not pregnant.

Where a testator has provided for the determination of an estate in any of two or more events, and has then given a gift over expressly to take place in one only of those events, the court will, in the absence of any indication to the contrary, imply, by way of necessary implication, an intention on the part of the testator that the gift over shall take effect, not merely in the specified event, but on the happening of any of the events which were to determine the previous estate.

In Hannes’ informal will, the real contingency for the gift over provision to apply was that Steffen was not living with his wife at the time of the testator’s death was satisfied by reason of Steffen’s death. The gift over to his children therefore took effect.

Predeceased issue & Contrary Intention

Issue are defined as a person’s children, (and if the children are deceased) grandchildren and (if the grandchildren predecease the intestate) great-grandchildren.

The High Court of Australia has found that the use of issue in a will means children and includes all lineal descendants of every degree.  “Issue” implies successive generations of parent and child relationships. It is not limited to “children” alone, although it may include them along with remoter descendants.

  Legislation has been passed with regard to  the interpretation of the provisions in wills when a beneficiary who is issue of the will-maker has predeceased the will-maker. The legislation also says that where there is a contrary intention in the will, the statutory rules may not apply.

Jean Longmore  (“the testatrix”) died on 10 May 2016. She and her late husband, Noel, had four children: Wayne, Kathleen, Robert and Roseanna. Noel and her son Robert predeceased her. His wife Beryl and his son Duncan survived Robert.

Probate of her will dated 27 February 1980.  was granted on 13 December 2016 to Roseanna, the sole survivor of the two substitute executors under the will. The will relevantly provided as follows

“3. I GIVE the whole of my Estate to my said husband for his own use and benefit absolutely provided he survives me for a period of thirty days.

4. IN THE EVENT of my said husband not so surviving me for the said period of thirty days I give the whole of my Estate equally between such of my children as survive me in equal shares as tenants in common.”

Jeans son Robert had died in 1983. Probate of his last will dated 20 March 1980 was granted to the executor appointed by that will. Robert’s will provided:

“3. I GIVE the whole of my Estate to be divided equally between my wife BERYL EDNA LONGMORE and my son DUNCAN WALTER JOHN LONGMORE .

4. IN THE EVENT of my said wife not surviving me I give the whole of my Estate to my said son DUNCAN WALTER JOHN LONGMORE.” 

As the Will was made prior to 1 March 2008 The Wills, Probate and Administration Act 1898 (“the WPA Act”), which was repealed by Succession Act 2006, applies to Jean’s will.

Section 29 of the WPA Act provides

“Gifts to children or other issue who leave issue living at the testator’s death shall not lapse… but shall take effect as if the death of such person had happened immediately after the death of the testator, unless a contrary intention appears by the will.”

The point in issue is whether the words in the will, “between such of my children as survive me in equal shares as tenants in common”, constitute a contrary intention, so as to negative the operation of WPA Act, s 29.

If s29 of the WPA Act,  is applied to clause 4 of the testatrix’s will, the gift of a one quarter share of the estate would not lapse and that portion of the estate would pass to the executor of Robert’s estate, and would be dealt with under Robert’s will.

Roseanna as executor sought a determination from the court as to whether “a contrary intention appears” which would prevent the application of s 29 WPA Act to clause 4 of Jean’s will.

If the court found contrary intention and the consequent non-application of s 29 would permit the gift to Robert to lapse and Robert’s share of Jean’s estate would pass to her other surviving children under her will.

The court believed by the construction of clause 4 the testatrix wished to benefit by those words only her surviving children and not their children.

“to those of my children [who are named] as shall survive me for a period of thirty (30) days and if more than one in equal shares”

As such Roseanna is entitled to distribute Jeans estate without regard to the interests of Robert (“predeceased issue”) or any persons beneficially entitled to Robert’s estate.

 

 

 

 

A Relocatable Home can be a Castle but it doesn’t make it Real Property

Tom Finch died on 1 May 2014. Probate of his last Will dated 29 October 2012 was granted to the executors Gregory Finch, Joy Bazley and Michelle Jeffress on 3 December 2014. Clause 4 of the Will provided:

I give the following: 

(a) Any real property owned by me at the time of my death to my Daughter JOY MAREE BAZLEY; 

(b) Any car owned by me at the time of my death to MICHELLE KAY JEFFRESS; 

(c) My massage chair to KEVIN ZISKIE; 

(d) Any jewellery owned by me at the time of my death to THELMA BLUTCHER and SHIRLEY GAGE. 

In about 2007 Tom and his wife Thelma purchased a relocatable home at an estate called Golden Crest Manors. Following Thelma’s death in October 2011 Tom continued to live in the relocatable home until 2013 when he moved into a retirement village/nursing home unit that he leased up to his death.

At the time of Tom’s death his estate had two significant assets: the relocatable home, and an exit entitlement payable to the estate under the retirement village unit lease. These have been converted to cash that is held on term deposit.

Following disputes between the executors in April 2017 Joy brought an application for the appointment of an independent administrator. Further Joy indicated her intention to bring an application for rectification of Clause 4(a) which left real property to her however Tom was not the registered proprietor of any real property at the time of his death or at the time when he gave instructions for his Will.

Joy gave evidence that after Thelma died, Tom said on a number of occasions, words to the effect,

“Joy, I want you to have a home of your own. Your brothers Greg and Stuart both have their own homes. I understand you want to live in Brisbane. That is fine by me, but I want you to have my Nerang home when I die. You don’t have to live here. You can sell it and use the money to buy your own place in Brisbane.

To rectify the Will the Court must be satisfied on the balance of probabilities that Tom did not want to leave Joy his real property as he had none at the time he made his Wills in 2011 or 2012; but clearly wanted Joy to receive the gift of the relocatable home under the Will.

The pivotal issue the Court had to address whether the Will as executed carries out the intentions of the deceased

If it is alleged that the will does not carry out the deceased’s intentions, the court engages in a four stage process:

(1) has a clerical error been made?

(2) does the will fail to give effect to the deceased’s instructions?

(3) if either or both of the above has occurred, has this caused the will not to carry out the deceased’s intentions?

(4) if so, then the court may make an order to rectify a will to carry out the deceased’s intentions.”

The Court was satisfied that the Will did not carry out the deceased’s intentions because it does not give effect to the deceased’s instructions. Tom did not intend to leave Joy his real property as he did not possess any at the time he made the Wills in 2011 or 2012. Furthermore the Court accepted evidence that Tom believed that the 2011 Will he signed had left the ‘house’ to Joy because he told her shortly afterwards that that was what he had done.

Accordingly deleting the word “Any real property owned by me at the date of my death” and inserting in lieu the words “My house” rectify clause 4(a) of the Will of October 2012.

The Court held that on the proper construction of the Will the Tom’s relocatable home passes under the gift in clause 4(a) of the Will.

 

 

 

Equity follows the Law

 

Following yesterday’s post I was asked about the basis of equitable estoppel; essentially it is to protect a person from the detriment that would otherwise flow from her change of position in reliance of the assumption if such assumption or expectation were resiled from.

For example if Donald represents to James that he will make a will in James favour. In reliance on that representation James acts to his own detriment. Donald then fails to make a will in the form represented.

“The law will not permit an unconscionable – or more accurately, unconscientious – departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party’s detriment if the assumption be not adhered to for the purposes of the litigation.”  (Waltons Stores (Interstate) Limited v Maher (1988)170 CLR 394, 444.)

The party creating the assumption or expectation is estopped from enforcing her strict legal rights or from not undertaking a certain position where it would be unconscionable to do so.

Proprietary estoppel which is an equitable estoppel dealing with expectations of legal relationship in relation to land are summarised as follows

“…[T]o establish an equitable estoppel, it is necessary for a plaintiff to prove that

(1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship;

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

 (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation;

 (4) the defendant knew or intended him to do so;

 (5) the plaintiff’s 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.”  (Waltons Stores (Interstate) Limited v Maher (1988)170 CLR 387, 428.)

Proprietary estoppel is based on the inducement of an assumption by the legal titleholder, which leads to the relying party suffering a detriment. For proprietary estoppel to arise, the following conditions must be fulfilled:

  1. The legal title owner must have requested or allowed the relying party to expend money on the land;
  2. The legal title owner must have created or encouraged an assumption that the relying party would be entitled to remain in the land; and
  3. The relying party must have suffered a detriment from relying on this assumption.

In a recent Australian case Margaret Mahoney died leaving two sons and four daughters. In her Will, she left her farm property to one son Graham and left the rest of her estate equally between her other five children. On the same day Margaret executed her Will, she transferred without payment the farm property, in consideration of ‘natural love and affection’ and in 2007 transferred the livestock and chattels to Brian.

Graham  claimed there was a “common understanding” within the family that, on the death of their mother, he and his brother Brian  would receive the farm, livestock and chattels with the residue of the estate, comprising money, being given to the four girls.

On this basis, Graham claimed that Brian held the farm, livestock and chattels on trust for him as one half or share thereof (‘the common intention trust’) and was estopped from denying his entitlement.

Alternatively, Graham claims the transfer of the farm, the livestock and chattels to the Brian was unconscionable or procured by undue influence; as a result Margaret was rendered incapable of carrying out the common understanding and exercising her freedom of testamentary disposition, in particular, her right to change her testamentary intentions at any time before her death.

Following the requirements for proprietary estoppel the Court found as follows:

  1. Margaret made a promise to Graham that when she died she would confer an interest in the farm, the livestock and chattels to him;
  2. Graham acted in reliance on that promise in working without wages on the farm for at least 20 years, in entering into the business partnership with Brian to ensure a continued stream of income for his parents and, when that partnership ceased and he could no longer work on the farm with Brian in doing contract shearing work to support his family with Margaret’s blessing;
  3. Graham acted reasonably in so relying on the promise made to him by Margaret;
  4. Margaret knew or intended that Graham would rely on her promise and would thereby act in the manner referred to above;
  5. Graham suffered detriment as a consequence of the Margaret’s failure to adhere to her promise.

Alternatively, the Court also found that the transfer was unconscionable and procured by undue influence.

Graham was therefore successful in his claim, and the Court ordered transfer of half of the farm property, the chattels and the livestock to him.

In relation to estoppel the High Court has set out the following principles:

  1. in Australia, there is no presumption of detrimental reliance: the onus always remains on the plaintiff;
  2. in determining whether the promise or assumption induced the plaintiff, it is sufficient that the promise or assumption be a significant factor or contributing cause of the action undertaken by the plaintiff; and
  3. where performance of the promise is not appropriate, then unless reasons are provided otherwise, the Court will generally grant relief which reflects the value of the promise.

I apologise if todays post seems  academic.  Equitable remedies have developed by courts for hundreds of years to provide more flexible responses than possible in common law.   In most cases Equitable remedies are granted only where common law remedies are inadequate.

 

 

 

 

 

 

Estate Planning & Broken Promises

 

Elizabeth Cowper-Smith died in 2010, her Husband Arthur predeceased her leaving three surviving children: Gloria, Max and Nathan.

In 1992 Elizabeth and Arthur explained to their children shortly before his death that they would leave the estate to their children in equal shares to avoid any disputes. However the relationship between Gloria and her brothers became difficult, as Elizabeth grew older.

Gloria and Nathan fell out when Nathan moved back home in 2000. After visits with Gloria however, Nathan noticed that Elizabeth would become agitated and concerned that Nathan intended to take her house.

In early 2001, Nathan received two letters from Gloria stating he was no longer welcome to live with her and should move out. When he returned from an overseas trip in 2001, he found the locks changed, and broke in to retrieve his belongings. Gloria had the police escort him out.

In March 2001, Elizabeth’s Brother in law, David  (a retired lawyer) contacted a lawyer suggesting that Elizabeth’s will be changed to leave everything to Gloria. In 2002, the lawyer prepared Elizabeth’s last will, in which Elizabeth left her estate to her three children equally.

Gloria had provided initial instructions to the lawyer, and was present for much of the initial meeting. Importantly the lawyer did not confirm or clarify Elizabeth’s intentions with respect to the passing of her assets when the last will and testament was prepared and signed.

Elizabeth converted title of her home into a joint tenancy with Gloria, and created a Trust naming Gloria as trustee of the residence and her investments. The Trust provided that upon Elizabeth’s death, the residence and investments would become Gloria’s property leaving Elizabeth’s estate devoid of any significant assets.

Although Elizabeth received advice from her Brother in law, and two other lawyers she should have carefully considered that proceeding with this course of action, without any rational reason, might be found after her death not to be just and fair to her sons.

In 2005 Elizabeth’s health deteriorated; Gloria asked Max to be their mothers fulltime carer and he moved from England giving up his employment income, his cottage lease, his contacts with his children and his social life,into their mothers home in Canada, after Gloria promised that he would be able to live in Elizabeth’s home permanently and acquire Gloria’s one-third interest in the property.

Nathan discovered Gloria’s joint ownership of the Home in 2005. Gloria assured that the arrangement was to simplify the administration of the Estate and that he and Max would still each receive a one-third share. Max received a similar assurance in 2009 when he learned that Gloria’s name was on title.

Eight months after Elizabeth’s death, Gloria informed her brothers that she would put the house on the market, although Max was still living there. Gloria maintained that the residence and investments were hers absolutely and did not form part of Elizabeth’s estate.

Although Elizabeth had obtained advice from two different lawyers, as well as her brother-in-law who was a retired lawyer, the Court found the presumption of undue influence was not rebutted as neither lawyer “gave Elizabeth the type of ‘informed advice’ that is required when there is a concern about undue influence.

The trial judge found that a presumption of undue influence arose from the relationship between Elizabeth and Gloria, and that Gloria had not rebutted this presumption.

The factors considered in relation to a presumption of undue influence include:

  1. full, free, and informed thought of the donor;
  2. lack of actual or opportunity to influence;
  3. receipt or opportunity for receipt of independent legal advice; and
  4. donor knowledge and appreciation of decisions.

As to whether Gloria had rebutted the presumption, the judge focused on the legal advice to determine whether Elizabeth had “full, free, and informed thought” with respect to the transactions involving the residence and investments.

The judge held that Elizabeth’s true intentions were reflected in her 2002 will. In the result, the trial judge concluded that Gloria held the residence and investments in trust for the estate, to be divided equally among the three siblings.

David and Gloria had provided false information to the lawyer who drafted Elizabeth’s will prior to their initial meeting which was not confirmed or verified with Elizabeth. Gloria had provided initial instructions to the lawyer, and had been present for much of the initial meeting. Lastly, the lawyer did not confirm or clarify Elizabeth’s intentions with respect to the passing of her assets when the last will and testament was prepared and signed.

A resulting trust was therefore established whereby Gloria was deemed to be holding the residence and investments in trust for the estate, to be divided equally among Elizabeth and Arthur’s children.

On appeal, Gloria did not challenge the presumption of undue influence but argued that the legal advice Elizabeth received was adequate to rebut the presumption.

The Court of Appeal agreed with the trial judge’s finding with respect to undue influence and resulting trust, and referred to the following factors regarding legal advice in undue influence cases:

  1. the party benefitting from the transaction is also present at the time of advice or execution;
  2. the lawyer was engaged by or took instructions from alleged influencer;
  3. where the transfer or all of substantially all assets exists, the lawyer was aware of that fact, and discussed the financial implications of the same;
  4. the lawyer enquired as to whether the donor discussed the transaction with the other family members who would otherwise have benefited; and
  5. the lawyer discussed less risky options to achieve the same objectives.

The Court held that Elizabeth should have carefully considered proceeding with this course of action, which in the absence of any rational reasons, might be found after her death not to be just and fair to the respondents”

The Court of Appeal was split on the issue of proprietary estoppel. The majority found that because Gloria held no interest in the property at the time she made assurances to Max, proprietary estoppel could not arise. Max appealed on this issue.

The Supreme Court held that: “Equity enforces promises that the law does not” that proprietary estoppel operates to enforce Gloria’s promise; explaining that an equity arises where:

  1. A representation or assurance is made to the claimant, on the basis of which the claimant expects that he will enjoy some right or benefit over the property;
  2. The claimant relies on that expectation by doing or refraining from doing something, and his reliance is reasonable in all the circumstances; and
  3. The claimant suffers detriment as a result of his reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on her word.

When the party responsible for the representation or assurance possesses an interest in the property sufficient to fulfil the claimants’ expectation, the Court found that proprietary estoppel may give effect to the equity by making the representation or assurance binding.

The Supreme Court’s decision expands the scope of proprietary estoppel in two ways:

  1. the fact that Gloria did not have an interest in the property at the time Max relied on her promise was not fatal to his claim. The equity arose not at the time Gloria received her one-third entitlement to the property but at the time the assurances were made to Max.
  2. that once the elements of proprietary estoppel are established, the Court has wide discretion to effect an appropriate remedy in the circumstances of the particular case.

The Supreme Court directed Gloria, in her capacity as trustee of the Estate, to transfer her one-third interest in the property directly to Max in circumstances where the siblings only held an interest in the residue of the estate, and not a specific interest in the property.