UK High Court & a Testators wishes

Maudlin Bascoe died in August 2015, a few days before her 97th birthday. She had emigrated to the United Kingdom from Jamaica in the 1960s and worked as a seamstress in London. Maudlin had four children and eight grandchildren. Her son Gresford Williams died in October 2004, her daughter Beverley Smith, died in March 2017. Her surviving children are her son Bradford Barnaby and daughter, Patricia Johnson.

In 1988 Maudlin instructed a solicitor Alphonso Wynter to make a new Will replacing a previous one made with another firm of solicitors; this was updated in 1992 with Maudlin leaving pecuniary legacies to members of her family, including £10,000 to Patricia.

In January 2002 Maudlin transferred a share in her home to her son Gresford. In July 2003 Maudlin instructed Alphonso to redraft her will, leaving Gresford £109,000, Bradford £75,000 and Beverley and Patricia, £4,000; later increased to £10,000 each. This will wasn’t executed.

However, it included the following EXPLANATORY NOTE:

“…Beverley and Patricia, have shown very little care and concern for me in my later years and in particular, they have both been rude, unpleasant and in some instances physically violent and abusive towards me and have verbally expressed their lack of care and concern with such statements as ‘you should be placed in a home and dead in there’. I, therefore, have no desire that they should benefit from my estate over and beyond the legacies I have made in this will.”

In April 2005 Alphonso wrote to Maudlin regarding her instructions for a new Will concerned that her “instructions are far from clear and if you require, I will again attempt to take clear instructions from you with a view to updating your will so that it accords with your wishes”.

The differences compared to the draft 2003 will include Bradford replacing Gresford as executor, some alterations in the amounts of and individuals who were to receive pecuniary legacies and the reduction in Patricia’s legacy to £100, Beverley’s to £500, with all of Maudlin’s assets bequeathed to Bradford.

Maudlin’s surviving son Bradford Barnaby is the First Claimant, co-executor and residuary beneficiary of her estate.

Alphonso Wynter, the Second Claimant was Maudlin’s solicitor for nearly 20 years before she died. He is the co-executor and draftsman of her wills from 1988-2005.

Maudlin’s surviving daughter, Patricia Johnson, is the Defendant.

Bradford and Alphonso sought probate of the 2005 Will with the acknowledgment that Maudlin had changed her mind several times in the period before the Will was executed.

Patricia claimed that her mother lacked testamentary capacity, knowledge, and approval of the will’s terms; and that Bradford had improperly caused the 2005 will to be made through undue influence and forgery.

The High Court held that there were strong presumptions in favour of the Wills validity. It was rational and was read to Maudlin who had testamentary capacity at the time. It was properly executed and the evidence of the witnesses could not be impugned.

Similarly, the Court dismissed Patricia’s claim of forgery in the will’s execution as it would have required the collusion of all three independent witnesses.

In upholding the 2005 Will the Court concluded that Patricia’s evidence was contradictory, self-serving and deliberately misleading and had come “nowhere near” establishing a basis for any proper challenge.

The Sad Demise of Albert Trott

Albert Edwin Trott was born on 6 February 1873 in Collingwood, to Adolphus a West Indies-born accountant, and his English wife Mary Ann. Albert named one of the Wisden Cricketers of the Year in 1899 is one of the few players to have represented two countries in Tests – Australia & England

Albert and his older brother Harry played their first test together for Australia in Adelaide in 1894-95 (after Albert had played just three first-class matches for Victoria), Albert took 8 wickets for 43 runs in the second innings and was not out twice (38 and 72) the only all-rounder in the history of Test Cricket to make over 100 runs and take eight wickets on debut: that the press claimed ‘hounded England to abject defeat’ Australia winning the match by 382 runs. In his three Tests for Australia, he averaged 102.5 runs.

Harry captained the 1896 team to England and the 4-1 home Test series of 1897-98. Oddly Albert was omitted from the 1896 touring team but arranged passage on the same ship as his brother seeking to further his career as a professional cricketer in England; securing work as a groundsman at Lords as he waited to qualify for Middlesex.

Albert played in England during the northern summer and for East Melbourne following the English season. In 1897 he married Jessie Rice, in Melbourne sailing first-class (paid for by MCC) for England three days after the ceremony.  The following summer Albert played for the Wanderers in Johannesburg.

The following English summer Albert took 8 for 83 for Middlesex against Nottinghamshire; 10 for 49 against Oxfordshire and 10 for 19 against a Devonshire Park XII playing for the MCC.

Albert was selected to play for England and between December 1898 and April 1899, made 23 runs at 5.75 and took 17 wickets at 11.64 in two matches against the South Africa national cricket team which retrospectively were awarded Test status; Albert is one of only fourteen players to have played test cricket for two countries and the last cricketer to have played for both England and Australia.

Albert was considered the finest all-round cricketer of his day. A spin bowler with a variety of deliveries ensuring batsmen rarely faced the same ball twice in an over; a dynamic fielder in the outfield who would slide into the ball, pick up and throw in one action; while common today in the late 1800’s it was ahead of its time. Albert regularly turned matches for Middlesex with his powerful hitting, ‘sprinkled with blows that remain part of cricket legend’ using a bat, at least half a pound heavier than most players at the time; making 1175 runs and taking 239 wickets in 1889, and 1337 runs and 211 wickets in 1890.

Australia toured England in 1889 with Albert becaming the only man known to have hit a ball over the pavilion at Lord’s, as the ball was dispatched heavenwards, Albert was observed putting a hand to his forehead and peering with amused delight as the ball cleared the Lords Pavilion roof bouncing on the reverse slope, struck a chimney pot, and toppled down into a garden on the other side.

However, Alberts form declined from 1901 or 1902, his weight increased, he lost mobility, did not have the change of pace bowling that was so effective in his early years. Alberts bowling returns fell from 176 in 1901 to 133 in 1902 and 105 in 1903; he had one great bowling spell left: in his benefit game in 1907 he destroyed Somerset’s second innings with four wickets in four balls and then took another hat-trick, becoming the first bowler in the history of First-Class cricket to claim two hat-tricks in one innings and the only one to do so at Lord’s but unfortunately shortening the match at a time when people were prepared to attend in their thousands, prompting him to ruefully comment that he had ’Bowled himself into the poorhouse’. Retiring as a county player in 1910, Albert became an umpire.

In July 1914 Albert was admitted to hospital due to a heart condition, complicated by nephralgia. After eight days Albert discharged himself, his cab fare home was paid by a hospital orderly.

On his return he requested his landlady Mrs Crowhurst get him sleeping medication from a chemist; the pharmacist refused the request, in anguish Trott reportedly said, “I can never go through another night.”

That afternoon, Albert made a will on the back of a laundry ticket,  leaving his clothes and £4 in cash to Mrs Crowhurst and some photographs to a friend in Australia. Following this, he shot himself with a pistol.

Will unClear and equivocal – applying Fell & Fell

If a Will has a mistake in it, in most cases the Courts will do what they can to correct the error. When it comes to interpreting the uncertainty of a provision in a will, Isaacs J in Fell v Fell (1922) 31 CLR 268 at 273, held the meaning of a will was to be discovered from the plain meaning of the words and sentences it contains aided only by such extrinsic evidence as necessary.

“[a] necessary inference is one the probability of which is so strong that a contrary intention cannot reasonably be supposed.”

The Case

The Will of William Jamieson, who died on 4th August 1920, stated:—

”This is the last will and testament of me William Jamieson at present residing at ‘ Ormiston ’ Kirribilli North Sydney New South Wales I give devise and bequeath unto John H. F. Jeffrey Marguerite, Jeffrey John D. Fell, Hugh Mackinley Fell, Robert A. Fell, Masie Fell, Helen Fell, Jessie Donald Smith, Struan Smith, M. M. Lovegrove, Joseph M. Berry, and hereby appoint David Fell Equitable Build­ings George Street Sydney & Donald Smith dentist 159 Macquarie Street Sydney executors of this my will”

David Fell and Donald Smith obtained a grant of probate and then applied to the Supreme Court of New South Wales for the determination of the following questions:

(1) Whether upon the true construction of the will the defendants and the other persons mentioned as beneficiaries in the will are entitled to partici­pate in the estate of the testator.

(2) Whether upon the true construction of the will there is an intestacy in the estate of the testator.

John Fell and Jessie Smith, two of the beneficiaries submitted that William had frequently said that so far as he knew he had no living relatives.

The Supreme Court held that following the true construction of the will the beneficiaries were not entitled to the estate of the testator, therefore William was intestate; referring the matter to the Master in Equity to inquire as to Williams next-of-kin.

John Fell and Jessie Smith appealed to the High Court which upheld the appeal and declared that the named beneficiaries were entitled to equal shares of the estate.

Isaacs J set out 10 principles to follow when faced with the task of construing a will; noting inter alia that the bare nomination of an executor is sufficient to make a valid will, as it is presumed the nominated executor will be entitled to use the estate assets to pay the estate debts and testamentary expenses and will be entitled to the residue unless the words of the will clearly express the executor holds the residue for beneficiaries.

In using the words “give devise and bequeath”, Isaacs J held the Will sufficiently indicates an intention to give the whole of the estate to the eleven named beneficiaries in equal shares.

Williams’ declaration that the document is his last will and testament, appoints executors and reflects his testamentary intentions; coupled with the presumption against intestacy, takes the case out of conjecture and implies the testator intended to dispose of the whole of his property to the named beneficiaries

Healesville Sanctuary – Whats in a name?

Lady Winifred Iris Evelyn MacKenzie left a will dated 4 April 1966 and codicil dated 14 February 1969 (‘the will’) establishing the Sir Colin and Lady MacKenzie Trust Fund –  a charitable trust (‘the trust’); the income of the trust was to be applied one third in favour of the committee administering the Sir Colin MacKenzie Sanctuary (‘the gift to the sanctuary’) upon the condition that its name never be altered from the ‘Sir Colin MacKenzie Sanctuary’; and two thirds for the provision of prizes and grants for studies in comparative anatomy (‘the gift for anatomical studies’)

Sir Colin Mackenzie, was an Australian anatomist, benefactor, museum administrator and director who died in 1938; the ‘Sir Colin MacKenzie Sanctuary’ is best known as the Healesville Sanctuary. Lady MacKenzie died on 21 February 1972.

The trustee of the trust (‘the trustee’) sought answers to the following questions concerning the administration of the trust:

(a) whether the name of the Sir Colin MacKenzie Sanctuary has been altered from the ‘Sir Colin MacKenzie Sanctuary’;

(b) whether the result of any such alteration is that the gift has lapsed; and

(c) if so, how funds gifted to the sanctuary ought to be applied.

Since the early 1980s, the sanctuary has been commonly known as ‘Healesville Sanctuary’; this name is used for advertising and promotional purposes. Between June 2002 and February 2014 the name of the sanctuary was altered from the ‘Sir Colin MacKenzie Sanctuary’ to the ‘Sir Colin MacKenzie Zoological Park’. Importantly the Board registered the name ‘Sir Colin MacKenzie Zoological Park’ as a deductible gift recipient in July 2000, but no such registration was made for the name ‘Sir Colin MacKenzie Sanctuary’. In June 2002 the registration of the name ‘Sir Colin MacKenzie Sanctuary’ lapsed; it was re-registered in February 2014.

The second issue is whether the alteration of the name of the sanctuary was contrary to the condition imposed by the will. If so, the gift will be said to have lapsed.

Had the name been altered

In construing the intention of the testator the Court should give regard to the text of the will only, and not speculate as to the testator’s broader intentions by reference to extrinsic evidence. A condition of the will clearly and unambiguously imposes a condition that the name of the sanctuary never be altered from the ‘Sir Colin MacKenzie Sanctuary’  the alteration of the name of the sanctuary from the ‘Sir Colin MacKenzie Sanctuary’ was a breach of the condition imposed the will. Accordingly, the gift to the sanctuary has lapsed when the name ‘Sir Colin MacKenzie Sanctuary’ ceased to be registered on 27 June 2002.

The will directs that, if the name of the sanctuary is altered, the funds which comprise the gift to the sanctuary become a part of the gift for anatomical studies.

Clause 3(ii)(B) of the deceased’s will provides that the allocation of prizes and grants shall be decided by the committee.  In September 2010 the Court declared that the gift in clause 3(ii)(B) could no longer be carried out according to the direction in the will and authorised the trustee to administer the gift for anatomical studies cy près.

Cy-Pres Scheme

A “Cy- Près Scheme” occurs where the charitable purposes for which a charitable trust has been established cannot be carried out. The term “cy-près ” is an English translation of the Norman French term “cy-pre comme possible”, meaning “as near as possible”. The Supreme Court may settle a scheme to modify the stated purposes in order to give effect to the charitable purposes.

The cy près scheme also altered the composition of the committee for the allocation of prizes and grants.

(i) The Vice-Chancellor for the time being of the University of Melbourne or his/her delegate;

(ii) The Vice-Chancellor for the time being of Australian National University or his/her delegate;

(iii) A representative of the National Health and Medical Research Council or any successor to that organisation;

(iv) One other person of experience in the particular branch of science with which the Committee may be dealing from time to time such person to be co-opted by the Committee; and

(v) A representative of my Trustees.

In July 2011, the National Health and Medical Research Council informed the trustee that they did not intend to provide a representative to sit on the committee due to a perceived conflict of interest.

Amended Scheme

The trustee submitted and the Court accepted that the original specified purposes of the gift can no longer be carried out or be carried out according to the directions given, to avoid further costs and potential erosion of trust capital if another committee member is unwilling or unable to provide a representative in the future. the Court ordered that the cy près scheme which allows the trustee to appoint new members of the committee on its motion:

lf a representative listed in subparagraphs (i) to (iii) above is unable or unwilling to be, or to appoint a delegate to be, a member of the Committee, then my Trustees may appoint a substitute for that delegate or representative, having regard to the necessary scientific research expertise and independence required for the role to be performed.

Ruling

The Court ordered that the gift to the sanctuary according to clause 3(ii)(A) of the will lapsed on 27 June 2002. The funds gifted are to be applied as part of the gift for anatomical studies according to clause 3(ii)(B).

However, as the gift for anatomical studies according to clause 3(ii)(B) can no longer be carried out following the varied directions of the will approved on 8 September 2010, the Court approved the proposed cy près scheme submitted by the trustee

Equitable Set Off ? Not so fast.

Elias Dimitrakakis was born in Greece and emigrated to Australia in 1960; with his wife and their five young children following the next year. During his life, he and his wife accumulated significant assets, in both Australia and Greece. Elias and his wife returned to Greece in their later years, travelling back to Australia for periods.

Elias’s wife died in Australia in 2008. He returned to Greece with his son Vassilos around June 2010 and died there in December 2012.

In a Will (“the Will”) Elias made in May 2000 his daughter Georgia was named executrix of her father’s estate, obtaining a grant of probate of the Will in February 2015.

Georgia refused to distribute two parcels of real estate given to her brother Vassilos through the Will; submitting that the estate had suffered loss and damage of at least $3,949,000; as executrix Georgia has

 ‘chosen to delay transferring Vassilio’s share in properties to him, as I believe that he owes the estate approximately $1.3m which is well in excess of the values of the properties the Estate owes him’.

Georgia alleged that Vassilos appropriated money and property from their father either unconscionably or in breach of fiduciary duty.

Vassilios submits that the bank accounts in question were joint accounts and that the real estate transfers were gifts made by Elias in full possession of his faculties.

Georgia relied upon Cherry v Boultbee (1839) 4 My & Cr 442 and the equitable principle of set-off to justify her decision as executrix to retain the gifts of the two interests in real estate that were gifted by Elias to Vassilos; the remedies sought when applied to estate administration can be seen as mechanisms to ensure that a beneficiary who owes money to an estate does not receive more than his or her fair share.

Equity will allow a set-off where it would be unconscionable to allow one party to insist on its legal right without first accommodating the other’s countervailing legal right.

The rule in Cherry v Boultbee  is an illustration of a fundamental principle of equity that a person who seeks equity must do equity:

‘where a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, they cannot be allowed so to participate unless and until they fulfilled their duty to contribute.’

If applied in this case Georgia’s refusal to distribute the gifts of real estate to Vassilos pending determination of the claim by the Estate against him will be affirmed

The Court considered that Cherry v Boultbee cannot apply in respect of a specific gift of property or chattels. Based on these cases, and the basis of the argument in this application only, the Court did not consider that Georgia was justified in withholding the gifts of real estate; ordering their transfer to Vassilos.

Mugabe; Liberation, Despotism, Intestacy

Robert Mugabe who ended white-minority rule in Zimbabwe and improved access to education and health services for the country’s poor black majority, before resorting to fear and repression to govern died in a Singapore hospital aged 95 on September 6.

Following extensive inquiries, Lawyers for the Mugabe family were unable to locate Mugabe’s will.

Mugabe was born on 21 February 1924; in Rhodesia in 1960, his political activism earned him a 10-year prison term for “subversive speech”, after which he fled to neighbouring Mozambique to lead the guerrilla forces of the Zimbabwe African National Union (Zanu) – in a protracted war against Ian Smith’s government that left 27,000 dead.

In 1973, while still incarcerated, he was named the president of the Zimbabwe African National Union (Zanu); on his release, he directed guerrilla raids into Rhodesia from Mozambique.

The Lancaster House Agreement in 1979 ended Rhodesian white-minority rule, resulting in the newly independent Republic of Zimbabwe with Mugabe securing an overwhelming victory in the republic’s first election in 1980.

At independence, Zimbabwe was one of Africas most promising countries however the position was weakened through economic mismanagement by Mugabe and his party, Zanu-PF, who held power mostly through the use of terror by security forces.

In 2000 as the economy faltered, Mugabe seized land from white owners, and in 2008, used violent militias to silence his political opponents during an election famously declaring that only God could remove him from office.

In November 2017, the military seized control of a public broadcaster announcing that Mugabe would be held under house arrest. In the days following, people swept the streets to demand the resignation of Mugabe, Vice President Emmerson Mnangagwa replaced Mugabe a week later.

Mugabe’s legacy for many Zimbabweans will be economic mismanagement and increasingly tyrannical rule rather than liberation. Millions fled the country to escape decades of hyperinflation and crackdowns on dissidents.

In the event that a person dies intestate Zimbabwean law provides that the heirs to an intestate deceased person’s estate are their children and the surviving spouse.

Last week the Mugabe family agreed and a court in Zimbabwe appointed his daughter Bona Chikore to identify assets left in order for them to be distributed to his beneficiaries.

It has been reported that Mugabe and his family amassed as much as $1 billion, during his 37 years in power. In October Bona provided the Master of the High Court with a modest portfolio of properties that her father owned as a part of a $10 million estate.

What happens when a Person entitled to letters of administration of intestate estate lives outside of NSW.

Irene de Wild (“the deceased”), died on the South Coast of New South Wales, on 26 September 2017, aged 74 years, leaving about $118,000 in bank accounts in New South Wales; Irene was survived by her husband, Hermanus (“the Applicant”), a resident of New Zealand.

Hermanus commenced preparations to apply for a grant of administration; however, he discovered a will dated 19 September 2017 ( “the proposed Will”) prepared by Irene which, made some provision for him, but favoured her brother, Ian (“the defendant”).

The Applicant’s solicitor (Anthony J Fondacaro), investigated the circumstances surrounding the making of the proposed will; after making inquiries of an attesting witness and procuring the Hospital’s clinical notes for examination Fondacaro found that Irene was unlikely to have had testamentary capacity at the time she executed the document or to have known and approved of its contents.

Ian formally acknowledged that the will was invalid, and consented that Hermanus should be granted administration of the deceased’s estate.

Upon an application of the rules of intestacy for which Chapter 4 of the Succession Act 2006 NSW provides, the whole of the deceased’s estate would pass to Hermanus as her widower.

In January 2018 the Hermanus published formal notice of his intention to apply for letters of administration of the deceased’s estate; In July 2019 Hermanus filed a summons seeking the following orders:

’…that letters of administration be granted to him, as the spouse of the deceased, for the administration of her estate as an intestate estate; and

… that the purported will of the deceased dated 19 September 2017 be passed over and declared invalid on the basis that the deceased lacked testamentary capacity to execute the will and/or because she did not know and approve of the contents of the will.’

Although the Court can make a grant to a non-resident, generally for the protection of those who are or may be, beneficiaries or creditors of a deceased estate it

‘prefers to have estates administered by somebody who is present in the jurisdiction, able personally to attend to his or her duties within the jurisdiction and, by reason of his or her presence in the jurisdiction, amenable to court orders designed to enforce obligations attending a grant of probate or administration’

The Court confirmed that as Hermanus was resident outside New South Wales the Registry was unable to grant letters of administration to him, and was required to appoint an attorney in NSW to whom the Registry could, upon the Attorney’s application, grant letters of administration.

In response Hermanus filed an amended summons in which:

(i) the “plaintiff” is described as “Anthony James Fondacaro as attorney for Hermanus de Wild”; and

(ii) the application for a grant of administration seeks an order to the effect “that letters of administration of the Estate [of the Deceased] be granted to the plaintiff in his capacity as attorney for the spouse of the deceased who is living outside the jurisdiction, the deceased having died intestate”; and

(iii) an affidavit affirmed by Anthony Fondacaro annexing a copy of an “enduring power of attorney” executed by the applicant in favour of Mr Fondacaro is expressed to be

limited to authorising and directing my attorney to act on my behalf in respect of the estate of my late wife, Irene Anne de Wild (the ‘estate’), including, but not limited to, obtaining a grant of letters of administration of the estate, conducting legal proceedings on my behalf in respect of the estate and completing the administration of the estate”.

Exception? Unquestionably, Indubitably; Chorley!

Luigi Borazio (the “testator”), died in February 2007, leaving his widow (and third wife) Rosa a life interest and the chattels in their family home in Blacktown plus $10,000. Rosa was to pay all outgoings. The balance of the estate was given to the testator’s four daughters by his first wife equally. Rosa commenced a claim under the Family Provision Act 1982 submitting that Luigi did not make adequate provision for her in his last will. The Court dismissed her claim.

Janet Pentelow, a barrister, was engaged to appear by Bell Lawyers in the matter; a dispute arose between Pentelow and Bell as to the payment of Ms Pentelow’s fees, leading to recovery proceedings. Although initially unsuccessful, on appeal the New South Wales Supreme Court ordered that Bell Lawyers pay Ms Pentelow’s professional costs for the Local and Supreme Court proceedings.

Pentelow subsequently forwarded a memorandum of costs to Bell pursuant to the Supreme Court’s costs orders, which included sums for costs incurred on her own behalf and the provision of legal services Pentelow provided in the Local Court and Supreme Court proceedings. Although Pentelow was represented by a solicitor in the Local Court proceeding, and by solicitors and senior counsel in the Supreme Court proceeding, she had undertaken preparatory legal work and had attended court on a number of occasions.

Generally, a litigant may recover as costs their solicitor’s fees but not for the value of their time spent in litigation. Under an exception to the general rule, commonly referred to as “the Chorley exception” a solicitor may recover costs for their own time, as a litigant in person who has some professional skill in respect of the time spent exercising that skill.

In London Scottish Benefit Society v Chorley (1884) 13 QBD 872 the English Court of Appeal held that a litigant in person who was a solicitor was entitled on taxation to the same costs as if he had employed a solicitor, even though he had undertaken the tasks himself, therefore, employing another solicitor was unnecessary. Chorley is based on purely pragmatic grounds that where there has been a measurable expenditure of professional skill and labour by the solicitor, that would otherwise have been completed by another employed solicitor that, if successful, could be recovered.

Bell refused to pay the costs claimed for the work personally undertaken by Pentelow. A costs assessor rejected Pentelow’s claim for the costs of the work she had performed and that decision was affirmed on appeal before the Review Panel and the District Court of New South Wales.

Pentelow sought judicial review of the decision of the District Court in the Court of Appeal of the Supreme Court of New South Wales. The Court of Appeal, by majority, held that Pentelow was entitled to rely upon the Chorley Exception notwithstanding that she was a barrister and not a solicitor.

The New South Wales Court of Appeal held that the Chorley Exception extends to barristers as well as solicitors as admission to practice law is uniform for both barristers and solicitors under the Legal Profession Act 2004 (NSW). The self-represented work performed by solicitors and barristers is similar; the Chorley Exception applies where an otherwise eligible costs applicant performed legal work themselves, such as drafting pleadings and affidavits, as prescribed in the New South Wales Bar Association Barristers’ Conduct Rules.

Bell Lawyers appealed to the High Court; which unanimously held that the Chorley exception should not be extended to the benefit of barristers. Further, a majority of the Court held that the Chorley exception should not be recognised as part of the common law of Australia because it is an anomaly that represents an affront to the fundamental value of equality of all persons before the law and cannot be justified by the considerations of policy said to support it. In addition, the anomalous nature of the Chorley exception is inconsistent with the statutory definition of “costs” in s 3(1) of the Civil Procedure Act 2005 (NSW).

Family provision -An Annuity may not be Adequate

In a recent decision, the New South Wales Court of Appeal had to decide whether the annuity given by the deceased to his widow (‘the Appellant’) under his will was adequate to provide for the appellant’s proper maintenance and advancement in life.

An annuity pays you a guaranteed income for a period of time of your choice; you can choose whether you want to receive payments for the rest of your life, or for a fixed number of years. An annuity provides certainty, as you know how much income you’ll receive and the length of time it will last.

Geoffrey Steinmetz married his second wife Gayle in late 2011, following a long de facto relationship that had begun in 1988. The couple were financially independent during their marriage, however, Geoffrey paid for their mutual entertainment, holiday and household expenses. Gayle had provided full-time care for Geoffrey over a period of 15 years, during which he had suffered ill health.

Geoffrey made his last Will in hospital prior to a life-threatening operation in September 2016 (the ‘Will’); his son-in-law, a solicitor, took instructions and drafted a Will appointing Geoffrey’s two children from his first marriage as the executors and trustees. The Will left Gayle with all of Geoffrey’s personal items including the contents of his house and an annuity of $52,000 per annum (paid quarterly) for the remainder of her life (the ‘Annuity’). His two children were left the residue of the estate. The Will replaced one made 2013, which had provided more generously for Gayle.

When Geoffrey died his estate was valued at approximately $6.8 million.

Following Geoffrey’s death , Gayle (the ‘Applicant’) made a family provision claim under s59 of the Succession Act 2006 (NSW), submitting that the provision under the Will was inadequate for her proper maintenance, education or advancement in life and that although her assets were valued at around $700,000 she was living frugally.

A lower court dismissed Gayle’s application holding that the Annuity provided adequate provision for her proper maintenance by enabling her to continue to live in her home with an expected annual surplus of approximately $34,000.

“She will not have the benefits, the security, the holidays, the comforts and the additional financial advantages that she enjoyed during her relationship with the deceased. But as a matter of law, should she be entitled to expect more?”

Gayle appealed this decision.

The full bench of the Supreme Court of NSW unanimously set aside the lower court’s order, noting adequate provision had not been made for Gayle. In considering the particular circumstances of the case, the Court accounted for ‘the size of the estate, any competing claims, the applicant’s conduct and the applicant’s relationship with the deceased’ including Gayle’s role as Geoffrey’s primary carer over many years, the size of the estate which was large enough to meet all competing claims, as well as Gayle’s desire to relocate for better medical treatment for her own health care.

The Court ordered that a provision of $1,750,000 be set aside for Gayle in lieu of the Annuity (annuity payments made up until the appeal regarded as interim maintenance) finding, that she was capable of managing her own affairs, and therefore it was not appropriate for her to be reliant on quarterly payments made by Geoffrey’s children in their role as Executors & Trustees of Geoffrey’s estate. Importantly the ‘historical..tensions’ between Gayle and at least one of Geoffrey’s children could be exacerbated if she were obliged to have an ongoing relationship with them due to their responsibility for payment of the Annuity.

 

Phone Message, Audio recording ruled as Informal Will

In January 2017 G aged 35 died following a self-inflicted gun-shot to his head; he was survived by his wife, and two children, aged 8 and 11 years. G was a qualified pilot who owned an aviation business, through which he provided helicopters for mustering and feral animal control.

In the years before his death, G had been involved in several legal disputes concerning the conduct of his business. The stress of those legal disputes impacted on his home life. On the day of his death, his wife J left the family home with her children travelling by way of a police station where she sought a domestic violence order. G took his life later that afternoon.

G’s estate was valued in excess of $1.6 million and comprised his interest in the aviation business, the family home and a small superannuation account. In addition to those assets, G held two life insurance policies with a combined value of $6,000,000. The nominated beneficiary, in each policy, was J.

G had made a will in February 2011 appointing  J as executor and sole beneficiary in the event she survived him by 30 days. Shortly before his death, G called a friend and left a voice mail message asking that his two children receive his life insurance policy in equal shares and that all of his assets should go to his wife. During the recording of that message, G was distressed.

G’s friend retrieved the message and called him; after speaking for some time G ended the call, the friend called G back at 5.24 pm, there was no answer. The friend left a message asking that G call him.

G recorded another message on a mini tape recorder stating his full name and the date and stating  “This is my last Will to be the final one over anything else I’ve got written” He repeated that “every single asset I own” was left to his wife and six million dollar life insurance policy split in two for his son, and daughter, three million dollars each.”

The time at which this recording was made is not known. However, during the recording there can be heard a telephone ringing in the background, consistent with the friend’s attempts to call G back at 5.24 pm.

J sought a declaration, pursuant to Section 18 of the Succession Act 1981 (Qld) (“the Act”), that part of G’s recorded message dictated shortly before his death, forms his last Will and Testament; seeking a grant of letters of administration with that Will, to be made appointing J as administrator. Alternatively, that Probate be granted on the February 2011 Will, with J appointed executor.

Following consideration of the circumstances, the court was satisfied that in making the recorded conversation, G intended that J receive all of the assets of his estate. As the proceeds of the life insurance policies are not assets of his estate, G clearly stated his position in respect of every asset in his estate.

The Court was satisfied that notwithstanding the legal error G made regarding the ability to dispose of the proceeds of the life insurance policies G had the requisite testamentary capacity.  G’s recorded conversation contained a rational, logical disposition of his assets, that nothing in its contents or the surrounding circumstances have given rise to a doubt, sufficient to call into question the existence of the relevant testamentary capacity at the time the recorded conversation was made.