Aretha Franklin’s estate has a new Administrator

Aretha Franklin described as The Queen of Soul, won 18 Grammy Awards and had more than 100 singles on the Billboard charts; at the time of her death, it was reported that Aretha had not left a will or established a trust. Aretha’s estate could be worth millions of dollars; as it contains not just her music catalogue but also clothing, memorabilia and rights to her likeness.

The estate is currently in negotiations for a TV series and movie about Aretha’s life. The Internal Revenue Service is currently auditing Aretha’s tax returns after claiming more than $6 million in taxes Detroit renamed a city-owned outdoor music amphitheatre after Aretha. At the unveiling the Mayor claimed “This daughter of Detroit has a permanent memorial,

Under Michigan law, the assets of an unmarried person who dies without a will are divided equally among their children. Aretha had been married and divorced twice.

Following her death, her four sons filed a document listing themselves as interested parties in her estate stating that Aretha “…died intestate and after exercising reasonable diligence, I am unaware of any unrevoked testamentary instrument relating to property located in this state as defined.” Aretha’s niece Sabrina Owens asked the court to appoint her, (and Aretha’s Sons agreed, that Sabrina should act) as personal representative of the estate.

Earlier this week Judge Jennifer Callaghan of the Oakland County Probate Court chose Reginald M. Turner, president-elect of the American Bar Association, as temporary caretaker of Aretha Franklin’s disputed estate

Turner responsibilities will include completing negotiations for a television series starting in May and a motion picture in October.

Turner a longtime friend of Aretha replaces Sabrina Owens, who resigned as executor, citing the disagreements among the family members. Mr. Turner was recommended by lawyers for Kecalf Franklin, 49, the singer’s youngest son.

Sabrina had a close relationship with Aretha, particularly toward the end of her life — she accompanied Aretha to doctor’s appointments and, helped arrange her memorial service.

Sabrina accepted the role of executor “under two important conditions”: that “no fractured relationships” develop in the family, and that disagreements did not end up in court — “both of which,” she wrote, “have occurred.”

Sabrina discovered two handwritten wills from 2010; one states that a previous will from decades earlier is “no good” the other is 11 pages long and is signed by a notary.

Sabrina discovered a further will, dated March 2014, located in a notebook found under living room cushions; although difficult to read the document sets aside various assets for family members, including her sons and grandchildren, in this document, Aretha states she wants her son Kecalf Franklin, to serve as personal representative of the estate.

However, the wills appeared to be disorganized and look more like rough drafts; words are crossed out and the documents contain notes in the margins and arrows.

David Bennett, who was Aretha’s lawyer for more than 40 years, sought clarification that the Wills were legal under Michigan law. A statement from the estate said two sons object to the wills. Michigan law gives great weight to the wishes if they are a clear and convincing expression of the deceased’s wishes.

Arethas sons are still in continuing Court action over who controls the rights to her image and music and how her assets should be distributed.

It is not uncommon for people to die intestate, as I have posted Prince, Billie Holliday, and Kurt Cobain died intestate, however, given Aretha’s legacy, business acumen, and long illness it is surprising that she didn’t make better arrangements for the control of her legacy.

Beneficiaries CGT main residence exemption has been modified

Capital Gains Tax (CGT) applies to the capital gain made on the disposal of any asset, with a number of specific exemptions, the most significant one being the family home. If you leave a property to family or friends, and you’re entitled to the main residence exemption, it will still apply. However, if you’re not entitled to the main residence exemption – or you’re entitled to only a partial exemption – CGT will apply.

The CGT main residence exemption means that if you are the beneficiary of a residential property under a Will (depending on the use of the property by both you and the deceased) you may not have to pay CGT on any capital gain made after you sell or dispose of the inherited property.

As the beneficiary of Australian residential property from a foreign resident of six years or less at the time of their death, the main residence exemption is available to the beneficiary; except where it is inherited by a foreign resident (any CGT was accounted for in the deceased’s “date of death” tax return); or tax-advantaged entity such as a church or charity, the trustee of a complying super fund, approved deposit fund or pooled super trust.

The main residence exemption on CGT for foreign residents for tax purposes has recently been amended; from the deceased’s date of death Australian residents will continue to be able to accrue an entitlement to a concession, foreign residents will be unable to do so.

 The CGT main residence exemption can only be claimed by Foreign residents for tax purposes who held property prior to 7:30pm (AEST) on 9 May 2017 for disposals that meet the following requirements:

  • you, your spouse, or your child under 18, had a terminal medical condition
  • your spouse, or your child under 18, died
  • the CGT event involved the distribution of assets between you and your spouse as a result of your divorce, separation or similar maintenance agreements.

and occur prior to 30 June 2020.

As a corollary, disposals that happen from 1 July 2020 are no longer entitled to the CGT main residence exemption unless they occur within a continuous period of six years of the individual becoming a foreign resident for tax purposes

Similarly, for property acquired following 7:29pm (AEST) 9 May 2017 the CGT main residence exemption no longer applies to disposals from that date unless the listed life events occur within a continuous period of six years of the individual becoming a foreign resident for tax purposes.

Therefore when the foreign resident beneficiary disposes of the property, they may receive a partial concession on CGT based on the testator’s cost base up until the date of their death, however, no concession applies from the testator’s date of death.

Where a foreign resident is a beneficiary under a foreign resident’s Will; the beneficiary and trustee of the estate will not be entitled to the main residence exemption accrued by the deceased.

Any beneficiary who is not entitled to the exemption will be taxed on the full CGT amount; the cost base is calculated from the date of purchase in determining CGT for a property purchased by the deceased after 20 September 1985.

If a beneficiary inherits a dwelling and later sells it they may be exempt from CGT depending on the date the deceased acquired the property, when they died, if the property has been used to produce income (such as rent) and whether the deceased was an Australian resident at the time of death.

If a beneficiary is not exempt, or only partly exempt,  the cost base of the dwelling must be calculated to work out the capital gain. The cost base may be the value of the dwelling when the deceased acquired it or the value when they died, depending on where the beneficiary lives. The same exemptions apply if a CGT event happens to the trustee of a deceased estate.

If you inherit an Australian residential property from a deceased person who had been a foreign resident for more than six years at the time of their death, any main residence exemption that the deceased person may have accrued for that dwelling is not available to you as the beneficiary. This means you may have to pay CGT when you sell or dispose of the property.

If you inherit an Australian residential property and you have been a foreign resident for more than six years when you sell or dispose of the property, you can’t claim the main residence exemption for your ownership period.

What does this mean?

Foreign residents who acquired their main residence before 9 May 2017 and do not satisfy the new criteria for an exemption,have until 30 June 2020 to dispose of their main residence and apply the full main residence exemption will be liable for the full amount of CGT for any capital gain made.

Succession to Property – Conflict of Laws

Distribution of property of an intestate estate at common law depends upon whether that property is classified as a movable or an immovable asset. Succession to movable property is determined by where the deceased lived (lex domicilii); succession to immovable property is determined by its location (lex situs) – the transfer of title to the property is dependent upon and varies with the location of the property, where there is a conflict of laws.

The enactment of the Hague Convention on the Conflict of Laws Relating to the Form of Testamentary Dispositions, (adopted in New South Wales in 1986) altered the old common law choice of law rule concerning the validity of a will. But it did not affect the more general rule that succession to immovable property is determined by the lex situs.

A recent matter is unusual as the deceased died more than a century ago and all of his descendants were, and are, foreign residents. These proceedings concern proceeds from the sale of the share of a property acquired between 1865 and 1874 in New South Wales owned by the deceased and others as tenants in common that was sold in 2011.

John Meyerfeld was born in 1839 in Treysa, in the Electorate of Hesse then a member state of the German Confederation. John emigrated to the then Colony of New South Wales in 1865; becoming naturalised in 1874.

John married Jenny Lippmann in 1886; they had a son, Kurt and two daughters, Alice and Edith. Around 1882 he returned to Europe and died in Berlin in 1907.

In 1889 John made a will, (”the Will”) leaving provision for his wife and children. The Will was modified by two codicils made in October and November 1896. John named his wife, his brother Julius, and Hermann Bamberg of Berlin executors.

The Will and codicils complied with German law. However, in 1907, New South Wales law required that a formally valid Will had to be witnessed by two witnesses, the will did not meet this requirement it was therefore not valid under New South Wales law.

In New South Wales the Succession Act expressly provides that where succession takes place according to New South Wales law, the applicable law is that which prevailed as at the date of the decedent’s death.

The Succession Act 2006 (”the Act”) empowers the New South Wales Supreme Court to grant probate of a document created following the commencement of the Act that reflects the testamentary intentions of its maker but not the formal requirements. However under New South Wales law in 1907, on intestacy his widow, Jenny received one-third of the estate with the remaining two-thirds being divided among his surviving three children in equal shares.

John’s son Kurt died unmarried with no children in 1912 at the age of 29; it appears he died intestate. In December 1912 Hermann obtained probate of the Will and two codicils in England. Under New South Wales law in 1912, Kurts share of his father’s estate passed on intestacy to his mother, Jenny. Leaving her with five-ninths of the deceased’s share; Alice and Edith, holding the other four-ninths.

Jenny died in 1925 in Berlin. Her last will was made in compliance with German law but didn’t meet the formal requirements under New South Wales law. Accordingly, under the then New South Wales intestacy provisions, Jenny’s interest in John’s share of the property passed to Alice and Edith.

Edith Meyerfeld was born in March 1894, had two daughters, Ellen and Alice Mosenthal. She married Albert Julius Mosenthal in Germany. Edith died in February 1973 her last will, made in 1967 in England where the rules would have complied with the law of New South Wales leaving:

”….all residue of my estate whatsoever and wheresoever” to Ellen and Alice.

Alice married and had four children. Alice died intestate in November 2001 her estate passed to her four children in equal shares under New South Wales law.

Ellen died in London in June 2013. In January 2014 probate was granted on her will in England to her children Oliver and Clare as executors of the Will. The Supreme Court of NSW accepted that as probate was granted to Ellen’s Will it complied with English formal requirements, as a corollary it would also have complied with New South Wales formal requirements.
In September 2014 the New South Wales Trustee & Guardian( “the Trustee”) obtained a grant of letters of administration of John’s unadministered estate in New South Wales and published a notice of its intention to distribute the estate. Following genealogical searches, the Trustee was in contact with some of the Johns descendants and sought the Court’s direction to distribute the fund to those entitled to it.

The application before the Court is a Re Benjamin application; deriving its name from the case of Re: Benjamin; Neville v Benjamin and is an order made by the court for the distribution of assets on death when it is uncertain whether a beneficiary is alive.

John, Jenny, Ellen and Alice and two of their three children had died before the property was sold. At the time of each of those deaths the property was a share in a piece of land, it’s sale, the effect of which was to convert the property into a sum of money held by the trustees for the benefit of the owner or owners.

Based on this evidence, the Trustee sought the Court’s direction authorising it to distribute the proceeds of the New South Wales property as follows:

(a) a one-half share to the executors of the estate of the son of Alice Meyerfeld ;
(b) a one-quarter share to the executors of the estate of the older daughter of Edith Meyerfeld;
(c) a one-sixteenth share to each the heirs of the younger daughter of Edith Meyerfeld.

Money substituted for an immovable by the lex situs is subject to the same rights as the immovable, but, when an immovable is sold under a disposition made by the owner or in consequence of a dealing with it by the owner, the rights to which it was subject as an immovable do not affect its proceeds unless kept alive against them by the will of parties or by the lex situs.

Applying this principle following the sale of the property, the Court held the sale was pursuant to Section 66G(1) of the Conveyancing Act 1919 (NSW) and the proceeds of the sale met the description of “monies substituted for an immovable by the lex situs” and should be treated as immovable and succession to those proceeds is governed by the law of New South Wales.

Bona Vacantia, Benevolence and the Duchy of Cornwall

Prince Charles as Duke of Cornwall is the largest private landowner in England. The Duchy of Cornwall, run as a private estate consists of 135,000 acres, spread across 23 counties; the land and its assets ( which include The Oval cricket ground in London) were worth over £1billion in the last financial year. The Duchy is not a corporation and therefore not subject to Corporation tax

The Duchy of Cornwall was created in 1337 by Edward III, as a personal endowment for his eldest son and presumptive heir Edward of Woodstock (often referred to as the Black Prince). In the ensuing seven centuries, its lands and revenues have belonged to the male heir to the throne.

The Duke of Cornwall is the beneficiary of a number of the Duchy’s ancient provisions; he

• owns 60% of the Cornish foreshore and the bed (”fundus”) of navigable rivers.

• has the right of wreck to ships wrecked in Cornish waters that remain unclaimed at the end of one year.

• has the right to ”royal fish” deemed ”uniquely suited for the monarch’s use” including whale, sturgeon and porpoises.

Similarly, when a resident of the Duchy dies intestate with no surviving relatives the intestate estate passes bona vacantia to the Duchy of Cornwall. Bona vacantia is the Crown’s statutory right to the property of an intestate. If the legislated order for relatives has been exhausted then the State is entitled to the estate of the intestate.

Prince Charles himself does not keep the money, instead after retaining some in reserve in case of any future claims the balance is donated to the Duke of Cornwall’s Benevolent Fund, which has donated in excess of £850,000 over the past seven years for the benefit of local communities in the South West of England.

The Crown is legally exempt from taxes; the Queen does not pay income taxes, and certain portions of the Prince of Wales’s income (including that from the Duchy of Cornwall) is also exempt. However, the Queen and the Prince of Wales make voluntary payments in lieu of tax (plus income tax on the Duchy’s surplus).

In modern society, the reduction in the size of the average family and the higher incidence of single-child families the possibility of an intestate estate passing to the state or territory is now more likely than it once was.

In most Australian jurisdictions there is a provision that where no statutory relatives are entitled, the Crown may, out of a bona vacantia estate, provide for dependents, whether kindred or not, of the intestate and any other persons for whom the intestate might reasonably have been expected to make provision.

In NSW, for example, the State is entitled to the whole of the intestate estate where the intestate dies leaving no person entitled to the estate. However, a written application can be made to the Crown Solicitor for the waiver of the State’s rights to an intestate estate.

Radiant Child Jean-Michel Basquiat

Jean-Michel Basquiat arguably the most celebrated American painter of the Neo-Expressionist art movement; best known for his primitive style and collaboration with Andy Warhol was born in Brooklyn, in December 1960; the second of four children of Matilde a Puerto Rican and Gérard a Haitian-American. His brother Max died before Jean-Michel was born, his two sisters: Lisane, and Jeaine, were born in 1964 and 1967.

Jean-Michel began drawing at an early age on sheets of paper Gérard brought home from the office. Matilde strongly encouraged to pursue artistic talents taking him to art museums in New York City.

At age 8, Jean-Michel was hit by a car, suffering various internal injuries, along with a broken arm. While hospitalised Jean-Michel received a copy of Gray’s Anatomy from Matilde making a lasting impression and influencing his later work.

His parents eventually separated, and he and his sisters lived with their father in Puerto Rico between 1974 to 1976. Matilde was institutionalised when Jean-Michel was 13 and was frequently hospitalized for the rest of her life.

As a teenager due to his mother’s illness and turbulence at home Jean-Michel ran away. After sleeping rough he was arrested and returned to Gérard’s care within a week.

”l had very few friends. There was nobody I could trust. I left home when I was fifteen. I lived in Washington Square Park.”

At 17 Jean-Michel dropped out of High School to attend an alternative high school in Manhattan; furious Gérard kicked him out of home. Jean-Michel stayed with friends in Brooklyn supporting himself selling T-shirts and homemade postcards. He first attracted attention for his graffiti under the name “SAMO” (for “same old shit”) in New York City.

Lacking formal training, Jean-Michel created highly expressionistic work that mixed graffiti with Abstract Expressionism; addressing his personal angst through stylised self-portraits alluding to African American cultural icons.

Around 1980 a group of artists including Keith Haring and Kenny Scharf held the Times Square Show in an abandoned massage parlour. A wall covered with the spray paint and brushwork of SAMO received favourable notices in the press and Jean-Michels started selling his paintings out of his apartment.

In 1981, Artforum published an article “The Radiant Child” by critic René Ricard cementing his breakthrough as an artist, along with his participation in the exhibition “New York / New Wave” in the P.S.1. 

He collaborated with David Bowie and Andy Warhol resulting in a combined show of their work in the mid-’80s. Jean-Michel died intestate aged 27 of a heroin overdose in August 1988 in New York City.

Gérard was named administrator of the estate; as Jean-Michel had no will, his parents split the estate. Matilde died in 2009 although she and Gérard were separated for more than 30 years, they never got a divorce. After her death, Gérard became the executor of her estate, which predominantly consisted of Jean-Michel’s artwork. Matilda’s estate was initially valued at $5 million, but was later appraised by Sotheby’s at $37 million.

After his son’s death, Gérard resolved Jean Michel’s tax issues and promoted his legacy. Exercising tight control ofbhis son’s copyrights, and stewarding an authentication committee that reviewed art purported to be by Jean- Michel.

Jean-Michel’s friend and fellow artist Kenny Scharf said that Jean-Michel felt that a big part of his unhappiness had to do with his father. Gérard didn’t approve of his lifestyle in SoHo, and shunned the artist’s friends. Ironically Gérard’s posthumous management of the estate is very different from his role as an absentee father who had little to do with Jean-Michel’s career as an artist.

Gerard Basquiat passed away in 2013 with an estate estimated at $45 million largely composed of Jean-Michel’s art. Gérard named Jean-Michel’s sisters administrators of his esreat leaving Lisane a painting of Jean-Michel by Andy Warhol. Gérard left his other daughter Jeanine a portrait of himself that Warhol also painted.

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.


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.