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.

Cy-Pres and the 13th Amendment

I have posted before about the equitable remedies available to courts where  a specific gift within a Will fails; in the instance that no provision exists in the Will for dealing with the residue of the estate, that portion of the Will is treated as if it did not exist and would be distributed as if the deceased died “intestate”.

In most jurisdictions where this occurs, the court can step in and establish a scheme known as a cy près scheme by which a failed gift is constituted a valid charitable trust, and is distributed to an alternate charitable beneficiary that is as closely aligned to the deceased’s intentions as possible.

  • Cy-pres is a doctrine which is applied when the strict terms of a will cannot be carried out and is subject to certain conditions;
  • the testator must exhibit in their will a general charitable intention.
  • there must be impracticability in the fulfilment of the charitable intention of the testator.
  • the condition of the gift that causes the impracticability must not be an essential term of the bequest.

Abolition

Abolition, was the movement seeking to end slavery in the United States; active both before and during the American Civil War.

Francis Jackson, a Real estate developer and Boston City Councillor was born into an abolitionist family that included siblings Edmund, George, Stephen, Lucretia, and politician William Jackson, who was also against slavery.

Jackson sheltered fugitive slaves in Boston and was involved with the trial of Anthony Burns who had escaped from slavery in 1853 and reached Boston. In 1854 Burns was captured under the Fugitive Slave Act of 1850 and tried in court. Bostonians fiercely resisted the Fugitive Slave Act, and the case attracted national publicity. Federal troops were employed to ensure Burns was transported without interference to a ship headed back to Virginia post-trial.

In his will, Jackson established a Trust to assist among other groups abolitionist’s to

“create a public sentiment that will put an end to negro slavery in this country”.

admonishing the State of  Massachusetts:

“Disregarding the self-evident declaration of 1776, repeated in her own constitution of 1780, that ‘all men are born free and equal,’ Massachusetts has since, in the face of those solemn declarations, deliberately entered into a conspiracy with other states, to aid in enslaving millions of innocent persons”

Four years after Francis Jackson’s death Slavery was abolished in the United States through the 13th Amendment. His brother Edmund Jackson led the call to unwind the anti-slavery trust. However,  in Jackson v. Phillips the Court disagreed and ordered that to best fulfil Jackson’s wishes a cy-pres scheme should be established

“to promote the education, support and interests of the freedmen, lately slaves, in those states in which slavery had been so abolished”.

 

Main Residence CGT exemption & the Executor

CGT does not apply to the testator’s main residence if:

  1. It is sold within two years; whether or not it is used as a main residence or to produce income during the two-year period.
  2. From the deceased’s death until it is sold, the dwelling is not used to produce income and is the main residence of one or more of the spouse of the deceased immediately before the deceased’s death; or an individual who had a right to occupy the dwelling under the deceased’s will or as a beneficiary, you dispose of the dwelling.

A dwelling is considered to be your main residence from the time you acquire your ownership interest in it if you move in as soon as practicable after that time.

Earlier this year the Commissioner of Taxation extended the time that executors may dispose of the deceased’s main residence and still claim the main residence CGT exemption.

The “safe harbour” decision will assist executors where administration of an estate is delayed due to circumstances beyond their control such as lengthy family provision applications or extensive searches for beneficiaries, that result in delays carrying out their duty to dispose of the deceased’s property.

CGT Safe Harbour Rules

Executors have been granted an additional 18 months to dispose of the property, and will now have up to 42 months to settle the sale of a deceased’s main residence and still claim the exemption without having to seek the Commissioner’s approval if during the first two years post-death, over 12 months was spent addressing one or more of the following circumstances:

• a challenge to the ownership of the property or validity of the Will

• delays in disposal due to a life or other equitable interest

• the complexity of the administration of the estate

• a delay or termination in settlement of the disposal following circumstances beyond the executor’s control.

• The dwelling was listed for sale as soon as practicable after the above circumstances were resolved.

• Settlement occurred within 12 months of listing the dwelling for sale.

And disposal has not been delayed by:

• waiting for a pickup in the property market

• delay due to renovations to improve the sale price

• organising the sale was inconvenient for the executor

• unexplained periods of inactivity during the administration process.

• The extension of time required is no more than 18 months.

• What does this mean for executors?

The commission assumes that If the above conditions are satisfied, the executor is entitled to extend the two-year time limit up to an additional 18 months.

It is important that executors maintain sufficient records to prove they have met the above conditions, should they be called on for a compliance check by the ATO.

It is also important to note that the Commissioner has confirmed it will not entertain even a small delay beyond two years where no relevant circumstances are present.

Intestacy, Defacto & the Factual Matrix

In order for a Court to determine whether two people are in a de facto relationship it may require detailed affidavit evidence (including investigations of telephone and bank records) when assessing the nature and extent of the relationship.

Shirley Gardner died intestate in 2017. Her marriage in 1998 had voided her last known will dated 10 October 1989.

Shirley’s husband predeceased her; similarly, her only child predeceased her.

In 2018 Jose Bernengo claimed that he was Shirley’s surviving de facto spouse and sought letters of administration and a declaration that and was entitled to the whole of the estate.

Jose submitted that he and Shirley had been in a de facto relationship (that they had kept largely secret from the outside world – including members of Shirley’s family) for approximately 10 years up until the time of her death.

Jose split his time between Shirley’s home in Cammeray and his own country property in Rylstone, NSW. However, he spent more time at Cammeray than he did in Rylstone.

Both Shirley’s step-daughter and her neighbour corroborated Jose’s evidence regarding the nature and duration of the relationship.

Shirley’s nephew Edward filed a cross-claim seeking letters of administration and a declaration that Shirley’s other nieces and nephews (and grand-nieces and grand-nephews) were entitled to the whole estate.

Edward submitted that Shirley and Jose were only friends; had not displayed affection towards each other at family events, and although agreeing Jose occasionally stayed at Shirley’s home in Cammeray it was not as often as Jose submitted.

Edward relied upon evidence from hospital admissions where Shirley stated she lived alone.

Edward submitted that in a conversation he had with Shirley she claimed that she “tolerated” Jose as evidence that a relationship between his Aunt and Jose didn’t exist.

Edwards evidence was corroborated by a number of the other nieces and nephews, as well as other family relations and friends.

The Court believed that although superficially a number of these factors suggested that Shirley and Jose had not been in a de facto relationship there was much strongly supportive evidence that they were in a de facto relationship for at least 2 years before Shirley’s death.

The Court ordered that Jose was Shirley’s surviving spouse and was entitled to the entirety of her estate and granted him letters of administration.