heirs & successes

Executors are responsible for administering the deceased’s estate in line with the terms of the will. They have a fiduciary relationship with the estate and are legally bound to act in the beneficiaries’ interests

Additionally, the Trustee Act 2000 provides that executors exercise such care and skill as is reasonable in the circumstances.

Generally, the executor has a year to ensure that assets and liabilities are properly identified and that all taxes, debts, and administration costs are settled before any distribution takes place. If any are overlooked, then the executor is personally liable: s25 of the Administration of Estates Act 1925.

Additionally, beneficiaries are entitled to interest on any outstanding legacies if the executor takes longer than a year to administer the estate.

Background

In Totton & Anor v Totton [2022] EWHC 2304 (Ch) and Totton & Anor v Totton [2022] EWHC 2345 (Ch) Hollie Totton and Daniel Washer (the “Claimants“) are the grandchildren of Hazel Totton (the “Deceased“). Mark Totton (the “Defendant “) is the Claimant’s uncle and the sole executor and trustee of the estate.

The Deceased died on 25 July 2019 leaving three pecuniary legacies of £10,000 each with the balance of the estate being split between the Executor and the Claimants.

The executor received a grant of probate in November 2019; selling the property comprising the bulk of the estate for £425,000 in April 2020.

The Claimants wished to terminate the trust and receive their share of the estate.

On several occasions, the claimants made attempts to contact the executor requesting information regarding the assets of the estate and their distribution. The executor didn’t responded to any of the claimant’s requests.

The court order

On 10 March 2022, following an application from the claimants the Court made an order under Part 64.2 of the Civil Procedure Rules that the defendant provide a full inventory warning that

‘Wrongful refusal to provide the information is contempt of court and may render the respondent liable to be imprisoned, fined or to have his assets seized.’

The Court also granted a freezing injunction in favour of the claimants.

The defendant did not comply with the order and on 31 August 2022, the Court held that the defendant had breached, and remained in breach of the Order.

Contempt

The reason the court gave the executor a four-month custodial sentence for the

“serious, contumacious flouting of orders of the court

include:

• The claimants had not received their share of the estate for over three years and over two years after the principal asset was sold.

• There was no evidence that the defendant had acted under pressure from third parties to commit the breaches of the Order.

• The defendant did nothing to remedy the position; the breaches were serious.

• The defendant deliberately failed to comply with his duties as an executor.

• The defendant was solely responsible for the breach of the Order. (he had not, for example, engaged solicitors to deal with the administration).

• The defendant made no effort to cooperate or mitigate his position.

The court applied the principles set out in Solicitors Regulation Authority v Soophia Khan & ors [2022] EWHC 45 (Ch) where a solicitor was sentenced to six months imprisonment for failing to comply with two court orders to provide court documents to her regulator following intervention into her law practice.

At his sentencing, the defendant admitted that he had breached the order and had

“buried his head in the sand and received a number of envelopes which he just left unopened’

concerning the proceedings. The court reduced the sentence by one month to reflect the defendant’s admission and apology to the Court and ordered he pay the claimant’s costs.

In most instances where two or more people take an interest in land, they must register whether they hold as joint tenants or tenants in common. Additionally, if they register as tenants in common they must state the share each person holds.

The interest of a deceased joint tenant passes to the surviving joint tenant(s) via a right of survivorship. Essentially, a joint tenant cannot transfer an interest in the land through a will unless all other joint tenants predecease them.

Tenancy in common occurs in circumstances where two or more people own an asset in defined shares which may or may not be equal.

The interest of a tenant in common forms part of their estate and can be transferred according to their will; the tenancy continues, with a new tenant in common. If a tenant in common dies without a will, their estate is distributed under the rules of intestacy

Background

Catherine Whitty and her husband, Mario Caruso, were the registered joint tenants of their marital home. Mario borrowed money to purchase the property from his brothers and sister-in-law. At the same time, he and Catherine signed a deed appointing Mario as her agent if a ‘trigger event’ were to occur. The deed also gave Catherine a right of first refusal.

One ‘trigger event’, was a default by Mario in making payments owing under the loan agreement with his siblings. Under the arrangements between the parties, if Mario were to die, the amount he had borrowed from his siblings would become immediately payable, and his estate would obtain the right to sell the marital property with Catherine having a right of first refusal.

These matters indicate an intention that the parties would hold the marital property as tenants in common, rather than as joint tenants. Catherine and Mario intended that Mario would retain an interest in the marital property after his death. Accordingly, notwithstanding their registration as joint tenants, in equity, the parties are to be treated as tenants in common.

The deed

The arrangement set out in the deed makes sense if the parties are tenants in common. Mario’s estate would be entitled to half the sale proceeds to repay its liabilities, and the right of first refusal would allow Catherine to purchase Mario’s interest in the marital home from his estate.

However, as joint tenants, Mario’s estate ceases to have any interest in the marital property as by right of survivorship it would be held by Catherine absolutely. Similarly, Catherine’s right of first refusal, with the deed anticipating that Mario’s estate would act as Catherine’s agent offering to sell the property that she would already own.

Mario died intestate unexpectedly after falling into arrears under the loan agreement.

The matter

In Re Caruso [2022] VSC 242 the administrator ad litem sought to address whether equity should treat Mario and Catherine as tenants in common, rather than as joint tenants.

Although Catherine and Mario agreed to have their interests recorded in the register as joint tenants, they will be treated as tenants in common, in equity, if there is

‘a course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.’

Corin v Patton (1990) 169 CLR 540,547

Mario’s estate had insufficient assets to pay the money owed to his siblings. His siblings submit that Mario and Catherine held the marital property in equity as tenants in common. If correct, that would mean that Mario’s estate’s half interest would then be available to meet the estate’s obligations to his siblings.

Catherine, on the other hand, contends that the marital property hers absolutely due to the right of survivorship. Mario’s siblings will not be able to recover the moneys owed to them out of the proceeds of any sale of the marital property.

The decision

The Court noted that, whilst equity favours tenancies in common, that principle does not apply in the circumstances of a matrimonial relationship at [4]. The fact that Catherine and Mario contributed different amounts to the purchase price of the property is no reason to consider that they intended anything other than a joint tenancy.

Similarly, if the court were to conclude that the parties held the marital property as tenants in common, then they would hold it in equal shares, even though they had contributed different amounts to the purchase price.

The Court held that read in context the deed reveals an intention that Mario retain an interest in the home after his death and this was consistent with owning the property as tenants in common. Accordingly, in equity, the parties were to be treated as tenants in common, notwithstanding their registration as joint tenants at [9].

The relevant right that Mario obtained under the deed was a contractual right to sell the marital property in certain circumstances. It did not amount to an interest in the property itself and did not differ in any relevant way from Catherine’s interest in the property.

Melville William Gooley (“the deceased”) died on 23 December 2017 aged 92 years, leaving a will dated 1 February 2010 probate of which was granted to the defendant, his son and the father of the plaintiff, on 13 May 2021.

The defendant remains engaged in legal proceedings with his sisters who had managed the deceased’s financial affairs; no distributions had been made from the estate. The estate has an estimated value of about $28 million, with the residuary estate having a value of approximately $16.98 million.

Sean Gooley (“the plaintiff”) is an adult grandson of the deceased and the only child of the defendant’s first marriage. In Estate Gooley, Deceased [2022] NSWSC 734 the plaintiff made an application for family provision under Chapter 3 of the Succession Act 2006.

The Court held the plaintiff’s long-term drug addiction and the breakdown of his parent’s marriage left him dependent upon the deceased for emotional, if not also financial, support.

Time limit

Although a family provision claim must be filed with the court within 12 months of the deceased’s date of death, the Court didn’t consider it a significant problem that the plaintiff had not applied to extend that time limit under s58(2) of the Succession Act.

The Court held that s90 of the Civil Procedure Act 2005 and rule 36.1 of the Uniform Civil Procedure Rules 2005 each empower the Court, in any event, to make such orders as the nature of a case might require. UCPR rule 36.1 provides the Court with the power to make such orders

“whether or not a claim for relief extending to that … order is included in any originating process or notice of motion.

[2022] NSWSC 734 at 65

The Courts discretion

The Court has broad discretion to determine the strength of the applicant’s claim. However, the onus lies on the applicant to establish sufficient cause. It will be for the court to determine the strength of the applicant’s claim. What constitutes “sufficient cause” depends on all the circumstances of the particular case, unconstrained by any rigid formulae.

The principles governing the exercise of discretion include:

• the reason(s) for the lateness of the claim
• whether beneficiaries under the Will would be unacceptably prejudiced if time were to be extended;
• whether there has been any unconscionable conduct by either side; and,
• what is the strength of the claim made by the party seeking an extension of time.

Uncertainty in the administration of the deceased’s estate, the estate’s size and the ongoing court action has led to a lack of its distribution which heavily favours granting an extension of time.

Additionally, no party to the proceedings has engaged in any form of unconscionable conduct, and there is sufficient strength in the plaintiff’s case for the family provision order offered by the defendant

The background

The plaintiff must establish factors that warrant the making of his application for a family provision order under s 59(1)(b) of the Succession Act 2006 that once proven will give the applicant the status of

“a person who would generally be regarded as a natural object of testamentary recognition by the deceased

Re Fulop Deceased (1987) 8 NSWLR 679 at 681.

The Court accepted that the relationship between the plaintiff and the deceased was stronger than the ordinary relationship between a grandparent and a grandchild. The plaintiff looked to the deceased as a surrogate father and remained in contact with him as an adult. The plaintiff was the only grandchild of the deceased who spoke at the deceased’s funeral.

Similarly, the court accepted that any misgivings the deceased had about the plaintiff’s drug addiction, did not completely absolve the deceased from a moral duty to make provision for the plaintiff in his will.

The Court held it was inadequate that the deceased made no testamentary provision for the plaintiff even though he continued to recognise him as his grandchild. The “factors which warrant the making” of the plaintiff’s application for a family provision order under s59(1)(b) are his relationship with the deceased, coupled with his poverty and the need for special assistance due to his long-term drug addiction.

The decision

The Supreme Court has a discretion to make an order that a person’s estate be subject to management if it is satisfied that the person is incapable of managing their affairs under s 41(1) of the NSW Trustee and Guardian Act 2009 (NSW).

The Court held that the plaintiff is a person incapable of managing his affairs within the meaning of section 41 of the NSW Trustee and Guardian Act 2009: CJ v AKJ[2015] NSWSC 498 at [27]– [42]. He is barely employable; dependent upon a disability pension; living in public housing and without substantial prospects. The plaintiff has few substantive assets.

Additionally, the plaintiff is unaccustomed to dealing with large sums of money; and likely, if funded, liable to be exploited and the defendant fears, buy drugs exposing himself to the risk of an overdose.

The defendant has made a series of offers that the estate would pay the costs of an inpatient rehabilitation programme, nominated by the defendant for up to six months. The plaintiff believes that such offers of rehabilitation assistance are impractical because they have not been accompanied by financial support, or somewhere to live, following the completion of a rehabilitation programme.

The Court held that the plaintiff’s belief that he should receive a legacy sufficient to acquire a residence of his own, with financial support beyond that was utterly unrealistic and, reflected his drug-fuelled envy of the material success of the defendant’s second family.

Acting on the defendant’s proposal that the plaintiff undertakes a rehabilitation programme the Court ordered provision be made for the plaintiff out of the estate of $250,000; $130,000 be set aside for the plaintiff’s participation in a process of rehabilitation, independent of the defendant, with other $120,000 available to provide for the plaintiff’s general maintenance, education or advancement in life.

If the plaintiff establishes his sobriety, he can apply for a declaration that he is capable of managing his affairs and seek an order that the management orders affecting him be discharged under s 86 of the NSW Trustee and Guardian Act 2009 NSW.

The Court allowed the plaintiff an opportunity to obtain independent legal advice concerning the orders and the implications for his public housing and disability pension before pronouncing the orders.

 

 

 

In South Australia, where a will last known to be held by a testator before their death, cannot be found the Supreme Court presumes that the testator intended to revoke the will.

If the executor is seeking to administer the estate according to the lost will, they must rebut the presumption it has been revoked by proving that the deceased intended the copy of the document to be their final will.

Probate on lost will

Rule 69 of Probate Rules 2015 provides for grants in respect of copied wills. Applications are supported by an affidavit providing:

• the due execution of the will;

• its existence after the death of the testator; or

• following the testators death the will cannot be found evidence as rebuts a presumption of its revocation by the testator; and

• the accuracy of the copy or other evidence of the contents of the will,

• the consent in writing to the application by all persons who may be prejudiced by the grant.

In the Estate of Lisa Karen Hall (Deceased)[2011] SASC 117 at [15] the Supreme Court set out the applicable principles for the admission of a copy of a missing will to probate:

• that there is evidence of the terms of the original will;
• that the original will existed;

• that the original will was duly executed; or,
• satisfies the legislative requirements to be admitted to probate as an informal will;

• that the copy will is an accurate and complete copy of the original will;

• that thorough searches have been conducted to find the original will,including publishing advertisements regarding the missing original will;

• that the original will revoked all pre-existing wills;

• the circumstances surrounding the absence of the original will;

• that all persons prejudiced by the application, if it is granted, have capacity and have consented to the application; and

• that the presumption of revocation does not arise or has been rebutted.

Background

Colin Brown (the deceased) died on 29 December 2018 aged 82 years. The deceased was survived, inter alia, by the appellant, his nephew, David Brown.

David claims that he was always close to his uncle, but had become closer to him in the last 10 years of his life helping him more with ordinary everyday tasks his uncle struggled with.

The main asset of the deceased’s estate was a residential property. In July 2014, the deceased made a will (the 2014 Will) leaving the residential property to The Scout Association of Australia, South Australia Branch Inc – the respondent.

On 12 April 2016, the deceased told the appellant he had changed his will and that the appellant would receive the residential property and all its contents. Concerned about the 2014 Will, the appellant made a note of the discussion with the appellant and they both signed at the bottom of the 2016 note.

On 21 January 2018, the appellant and the deceased argued about the terms of the deceased’s will. The appellant submitted that following the argument, he had taken the deceased to the deceased’s solicitors’ office.

However, the solicitor had no file notes recording that the deceased attended his office on 21 January 2018. Additionally the deceased wrote to the appellant on 12 February 2018, stating:

Today I have another appointment with my solicitor and I write you to tell you that my will has not been changed or altered – you will still inherit my home and all contents on my death.

Notably, the primary judge found that the deceased did not meet with his solicitor to seek advice or provide instructions on either date holding that while the 2016 note and the letter of 12 February 2018 appear to represent a contrary intention, the judge found that the deceased made those representations to deceive the appellant as to his testamentary intentions.

The appeal

The appellant contended that the 2016 note effectively revoked the will by operation of s 12(3) of the Wills Act. The appellant also challenged the judge’s costs order.

A testator may revoke an earlier will under s22 of the Wills Act 1936 by:

• marrying or entering a registered relationship;

• implication, when the terms of a later will contradict the terms of an earlier one; this can lead to uncertainty, however and is usually expressed by including a revocation clause in the later Will, for example:

I revoke all former Wills and Testamentary dispositions and declare this to be my Last Will and Testament

• If the testator destroys the will, or asks someone else to do it, with the intention of revoking the will;

The court held the 2016 note did not satisfy the formalities required for this revocation under s 22 of the Wills Act 1936 (SA).

The Decision

In dismissing the appeal the Court held that although the appellant accepted that its origins lay in misrepresentations by the deceased, by the time proceedings were instituted, the appellant knew or had the means to know, that there was almost no evidential basis to support the existence of a lost will.

In ordering the appellant pay the respondent’s costs the Court agreed with the primary judge that it was unreasonable in the circumstances to have instituted the proceedings.

Sections 65 and 67 of the Administration and Probate Act 1919 (SA) concern the interests of vulnerable beneficiaries of administered estates who lack capacity.

Under s 65 the court seeks to protect a beneficiary who lacks capacity by directing the administrator to convey the beneficiaries property to the Public Trustee.

Section 67 of the Act provides that the Court may relieve the administrator from the obligation under s 65 if satisfied that it is “beneficial or expedient so to do”

Background

Clayton Lang (”the deceased”) died in the Kangaroo Island bushfires on 3 January 2020 survived by his two children.

The deceased left a will dated 26 August 2010 appointing his wife and mother of the children, as executor and trustee. If she was unable or unwilling to act, the deceased named his parents Richard and Helen as substitute executors if they were willing and able to act.

At the date of his death, the deceased and his spouse were divorced; under s 20A(1)(b) of the Wills Act 1936 if the testator’s marriage ends after making a will the appointment of a former spouse as executor, trustee or guardian is revoked.

The deceased’s father Richard also died in the Kangaroo Island bushfires on 3 January 2020. The circumstances of the death of both the deceased and his father make it impossible to determine the order of death between them.

Under s 20A(1)(a) of the Wills Act, the divorce left the children as sole beneficiaries of the deceased’s estate under the will.

The deceased’s mother Helen was granted letters of administration with the will annexed on 15 September 2020 (the administratrix).

In the Estate of Lang (Deceased) [2022] SASC 112

On 4 April 2022, the administratrix brought an application under s 67 of the Administration and Probate Act 1919 that she not be bound by the requirements of s 65 of the Act to pay the benefit share and interest of the children in the deceased’s estate to the Public Trustee.

On 5 April 2022, following the Court’s direction under s 69 of the Act the administratrix engaged in and concluded litigation on behalf of the estate in both the Supreme Court of South Australia and the Federal Circuit and Family Court of Australia reducing the net estate available for the benefit of the children of approximately $800,000 of which half is retained by a company.

The administratrix is the sole director and secretary of the company and holds the shares in the company on trust for the children.

Subsequently, the brother of the deceased’s former spouse and the uncle of the children, applied to the Court that the children be joined to the proceedings and that he be appointed the children’s litigation guardian. The administratrix opposed the application.

Following communication from the Public Trustee, the Court granted the administratrix an order that the Public Trustee be joined to the interlocutory application brought by the uncle and the application under s67 of the Act.

The Court didn’t doubt the uncle’s sincerity and selflessness in making the application, however, stressed the matter concerned an application under s 67 of the Act that the administratix be relieved of the obligation to comply with s 65 of the Act.

Similarly, the Public Trustee submitted that there was no basis to justify the joinder of the children to the application under s 67 of the Act.

The administratrix submitted after taking the advice of a suitably qualified advisor that the anticipated charges of the accounting and financial advice are likely to be substantially less than those charged by the Public Trustee.

The Court accepted that these factors supported making an order relieving the administratrix of the obligation to pay the children’s interest in the estate to the Public Trustee.

Notably the Public Trustee did not oppose the Court making the order sought under s 67 of the Act.

Trustees fiduciary duties

The Court was satisfied it would be beneficial to the children to have the funds from the deceased estate managed by the administratrix avoiding charges being incurred by the Public Trustee that it would be beneficial that the administratrix not be bound by s 65 of the Act.

Additionally, the Public Trustee continues to exercise oversight of the interests of beneficiaries lacking capacity following an order under s 67 of the Act. The Administratrix has advised the Court that in the future, she is prepared to provide information to address those concerns to protect the children’s interests.

In the future, the children have remedies under the Trustee Act 1936 (SA) and at common law, if they are concerned that as trustee the administratrix is failing to discharge her fiduciary duties

Accordingly, the Court ordered under s 67 of the Act dispensing with the obligation on the part of the administratrix to comply with the requirements of s 65 of the Act.

Costs

The administratrix seeks an order for costs incurred in dealing with the applications for the children to be joined to the proceedings to prevent the value of the estate from being depleted by those costs.

Attempts made by the uncle to ascertain information involving the administration of the estate were not addressed satisfactorily by the administratrix.

The Court accepts that the uncle’s application was motivated by a genuine concern for protecting the interests of the children. It is unlikely the depletion of the estate would be modest as a result of his application.

In these particular circumstances the Court declined to make an order that the uncle meet the administratrix’s costs.

Section 102 of the Succession Act 2006 (NSW) provides that an intestate is a person who dies, and either does not leave a will, or leaves a will, but does not dispose, effectively, by will, of all, or part, of their property.

When a deceased is domiciled in New South Wales at the time of their death, the law of New South Wales determines the succession to their intestate estate. Chapter 4 of the Succession Act 2006 (NSW) provides for distribution on intestacy, as at the date of the deceased’s death: Public Trustee v Kehagias [2009] NSWSC 972, per McLaughlin AsJ, at [11].

• The deceased’s spouse is entitled to the whole estate, as long as the deceased is not also survived by any children from a previous relationship.

• If there is no spouse, the deceased’s children are entitled to the whole estate in equal shares.

• If there is no spouse or children, the deceased’s surviving parents are entitled to the whole estate (in equal shares).

• If there is no spouse, child or parent, the deceased’s surviving siblings are entitled to the whole estate.

• If a sibling of the deceased has died, leaving any surviving children, then those nephews and nieces of the deceased are entitled to the share of the estate that would have gone to their parent (and so forth until the entitlement is exhausted).

• If the deceased has no spouse, child, parent, or sibling, the deceased’s surviving grandparents are entitled to the whole estate in equal shares.

• If the deceased has no spouse, child, parent, sibling or grandparent, the deceased’s surviving aunts and uncles are entitled to the whole estate in equal shares.

• If an aunt or uncle of the deceased has died, leaving any surviving children, then the cousins of the deceased are entitled to the share of the estate that would have gone to the cousins parent.

• The intestacy rules do not allow the estate to be distributed to anyone more remote than a first cousin of the deceased.

• Where there is no next of kin the estate is described as ‘bona vacantia and the State takes the assets.

While the State has entitlement it may distribute the assets to anyone with a ‘moral claim’ to the assets such as a person who was dependent on the deceased at the time of death.

The matter

In the Application by Peter John Clark (Estate of John Andrew Wardell) [2022] NSWSC 798 the deceased died, intestate, on 4 June 2020. The first Plaintiff, the uncle of the deceased, filed a Summons for Administration on 15 April 2022, seeking a general grant of letters of administration to him, and an order that the administration bond be dispensed with together with some affidavits in support.

On 7 May 2021, a deputy Registrar in Probate issued a requisition noting that the first Plaintiff appeared to have no beneficial interest in the estate, and, that unless special circumstances were shown to justify the Court exercising its discretion to make a grant,

“the application in its present form will be rejected”.

[2022] NSWSC 798 at [2]

Additionally in the absence of special circumstances, even the consent of the next-of-kin cannot be treated as a sufficient ground to support the application: [2022] NSWSC 798 at [2]

The deputy Registrar also pointed out that

“each class of persons in Chapter 4 of the Succession Act who would have a higher priority must be shown not to exist, or to have predeceased the [intestate] before the next class can be considered…”

[2022] NSWSC 798 at [3]

On 20 April 2022, responding to the requisition, the Plaintiffs’ solicitors sent an amended summons adding his solicitor as a second Plaintiff, and sought, to protect the assets of the estate pending delay in making a general grant – grant of administration ad colligenda bona defuncti – as well as a final grant of letters of administration to the second Plaintiff only.

The decision

Having regard to all of the evidence, the court was satisfied that there is no utility in continuing any further searches concerning the identity of the deceased’s father, and any of his next of kin who may have survived him.

The court held the chances of ascertaining the identity of the deceased’s father and the identity of any remoter next of kin, may be properly characterised as remote, if not impossible.

Applying Chapter 4 of the Act, it appears that the first Plaintiff, as the deceased’s mother’s brother is the only person entitled to the estate of the deceased under the rules of intestacy.

Benjamin order

The first plaintiff sought a Benjamin order sub submitting there is uncertainty about a factual matter relevant to the distribution of the deceased estate the Court may, in certain circumstances, make an order that the executor or administrator is at liberty to distribute on some particular factual basis. It is this type of order that is termed “a Benjamin order”

In the circumstances, the court was prepared to make a Benjamin order that the first Plaintiff, subject to the terms of the Benjamin order, is entitled to the whole of the deceased’s intestate estate under the rules of intestacy, and is entitled to a grant of administration alone.

Costs

The court held that as the first plaintiff has established a beneficial interest in the estate, and has no need to have a second administrator appointed; costs of the proceedings may be paid on an indemnity basis, out of the estate of the deceased.

Section 102 of the Succession Act 2006 (NSW) provides that an intestate is a person who dies, and either does not leave a will, or leaves a will, but does not dispose, effectively, by will, of all, or part, of their property

When a deceased is domiciled in New South Wales at the time of their death, the law of New South Wales determines the succession to their intestate estate. Chapter 4 of the Succession Act 2006 (NSW) provides for distribution on intestacy, as at the date of the deceased’s death: Public Trustee v Kehagias [2009] NSWSC 972, per McLaughlin AsJ, at [11].

• The deceased’s spouse is entitled to the whole estate, as long as the deceased is not also survived by any children from a previous relationship.

• If there is no spouse, the deceased’s children are entitled to the whole estate in equal shares.

• If there is no spouse or children, the deceased’s surviving parents are entitled to the whole estate (in equal shares).

• If there is no spouse, child or parent, the deceased’s surviving siblings are entitled to the whole estate.

• If a sibling of the deceased has died, leaving any surviving children, then those nephews and nieces of the deceased are entitled to the share of the estate that would have gone to their parent (and so forth until the entitlement is exhausted).

• If the deceased has no spouse, child, parent, or sibling, the deceased’s surviving grandparents are entitled to the whole estate in equal shares.

• If the deceased has no spouse, child, parent, sibling or grandparent, the deceased’s surviving aunts and uncles are entitled to the whole estate in equal shares.

• If an aunt or uncle of the deceased has died, leaving any surviving children, then the cousins of the deceased are entitled to the share of the estate that would have gone to the cousins parent.

• The intestacy rules do not allow the estate to be distributed to anyone more remote than a first cousin of the deceased.

• Where there is no next of kin the estate is described as ‘bona vacantia and the State takes the assets.

While the State has entitlement it may distribute the assets to anyone with a ‘moral claim’ to the assets such as a person who was dependent on the deceased at the time of death.

The matter

In the Application by Peter John Clark (Estate of John Andrew Wardell) [2022] NSWSC 798 the deceased died, intestate, on 4 June 2020. The first Plaintiff, the uncle of the deceased, filed a Summons for Administration on 15 April 2022, seeking a general grant of letters of administration to him, and an order that the administration bond be dispensed with together with some affidavits in support.

On 7 May 2021, a deputy Registrar in Probate issued a requisition noting that the first Plaintiff appeared to have no beneficial interest in the estate, and, that unless special circumstances were shown to justify the Court exercising its discretion to make a grant,

“the application in its present form will be rejected”.

[2022] NSWSC 798 at [2]

Additionally in the absence of special circumstances, even the consent of the next-of-kin cannot be treated as a sufficient ground to support the application: [2022] NSWSC 798 at [2]

The deputy Registrar also pointed out that

“each class of persons in Chapter 4 of the Succession Act who would have a higher priority must be shown not to exist, or to have predeceased the [intestate] before the next class can be considered…”

[2022] NSWSC 798 at [3]

On 20 April 2022, responding to the requisition, the Plaintiffs’ solicitors sent an amended summons adding himself as the second Plaintiff, and sought, to protect the assets of the estate pending delay in making a general grant – grant of administration ad colligenda bona defuncti – as well as a final grant of letters of administration to the second Plaintiff only.

The decision

Having regard to all of the evidence, the court was satisfied that there is no utility in continuing any further searches concerning the identity of the deceased’s estranged father, and any of his next of kin who may have survived him.

The court held the chances of ascertaining the identity of the deceased’s father and the identity of any remoter next of kin, may be appropriately characterised as remote, if not impossible.

Applying Chapter 4 of the Act, it appears that the first Plaintiff, as the deceased’s mother’s brother is the only person entitled to the estate of the deceased under the rules of intestacy.

Benjamin order

The first plaintiff sought a Benjamin order submitting there is uncertainty about a factual matter relevant to the distribution of the deceased estate. The Court may, in certain circumstances, make an order that the executor or administrator is at liberty to distribute the estate. It is this type of order is known as “a Benjamin order”

In the circumstances, the court was prepared to make a Benjamin order that the first Plaintiff, subject to the terms of the Benjamin order, is entitled to the whole of the deceased’s intestate estate under the rules of intestacy, and is entitled to a grant of administration alone.

Costs

The court held that as the first plaintiff has established a beneficial interest in the estate, and has no need to have a second administrator appointed; costs of the proceedings may be paid on an indemnity basis, out of the estate of the deceased.

Bona vacantia is the Crown’s statutory right to the property of an intestate when no relatives are entitled to it. In most jurisdictions when the intestate is not survived by a spouse or partner, lineal descendants, including but not limited to their children, parents or remoter eligible relatives, the State or Territory is entitled to the intestate’s estate by bona vacantia

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.

Duchy of Lancaster

The Duchy of Lancaster valued recently at £652.8 million provides income to the reigning monarch. Incorporating over 45,000 acres in Lancashire, Yorkshire, Cheshire, Staffordshire and Lincolnshire, with extensive retail and commercial holdings that generate most of the duchy’s income. The duchy holds office space on London’s Strand which includes the land for the hotel, Savoy. In 2021/22, the Queen received approximately £21.98 million from the Duchy.

History

Won by Henry III after the Barons’ War and given to his son Edmund in 1265. It wasn’t until the Great Charter of the Duchy in 1399 that Henry IV specified that the inheritance of the Duchies of Cornwall and Lancaster should be held separately from all other Crown possessions, and should descend to Henry’s male heir.

In 1461 Edward IV incorporated the inheritance under the title of the Duchy of Lancaster, and stipulated that it be held separate from other inheritances by him and his heirs, but would however be inherited with the Crown, to which it was forfeited on the attainder of Henry VI.

The Crown Lands Act 1702 decreed that the Sovereign should only receive income and not capital from the Duchy.

In 1760 the Duchy’s separate identity preserved it from being surrendered with the Crown Estate in exchange for the civil list. It is thought that the reason the Duchy wasn’t surrendered was that at the time it returned meagre annual profits.

Intestate estates

If someone dies intestate without known beneficiaries, their property passes to the Crown or the Duchies of Cornwall or Lancaster as bona vacantia. Similarly, assets held by a company at its dissolution, pass to the Crown or Duchies as bona vacantia where they are not held on trust.

Bona vacantia originated under the Royal Prerogative and in some respects, this remains the position although the right to bona vacantia is now based on statute: Administration of Estates Act 1925 and the Companies Act 2006.

Where a company is wound up, disclaimed freehold property situated in the Duchies of Cornwall or Lancaster will normally escheat to the Duchy. Additionally, freehold property owned by a foreign dissolved company may also escheat to the Duchies.

Unlike other estates, bona vacancies operates to the advantage of the Duke in the Duchy of Lancaster rather than the Crown. Proceeds from bona vacantia are divided between the three Lord-Lieutenants of Merseyside, Greater Manchester and Lancashire who receive an allocation annually from the Lancaster Benevolent Fund to support charities and other benevolent organisations within their County.

An executor of an estate must have legal capacity. Rule 5.03 of the Supreme Court (Administration and Probate) Rules 2015 empowers the Court to grant letters of administration durante minore aetate appointing an administrator in circumstances where the nominated executor is not 18.

Grants cannot be made to persons who are under 18, grants must be made to their guardians for the minor’s use and benefit until they are 18 – -subject to any limitations or conditions the Registrar thinks fit. A minor aged 12 years or more may elect a guardian, otherwise, the Registrar may assign a guardian.

A minor above the age of 12 may elect the appointee, or the Court may assign an administrator known as a grant durante minore aetate. The Registrar will not assign a guardian unless satisfied that the proposed guardian is ready and able to undertake the guardianship. A grant durante minore aetate continues until the designated executor turns 18 and obtains a grant.

The deceased died in March 2017. At the time of his death, he lived in Monaco. Although he had made several wills, he made an informal will in April 2014.

The deceased is survived by his son, who lives in Italy with his mother. The deceased was in a domestic relationship with his son’s mother from 2006 until around September 2014. In November 2016, they were parties to property orders made by the Family Court of Australia.

The mother, as the guardian of the minor beneficiary, is entitled to a grant of administration. However, she lived out of Victoria. The mother instructed a firm of solicitors in Melbourne (the Plaintiff’s) to act on her behalf.

The Court was satisfied that the plaintiffs had standing to bring an application for a limited grant as the mother’s attorney as it was not practicable for her to make an application on her son’s behalf.

As a minor is the principal beneficiary and could not consent, another beneficiary had not provided consent, and as the value of the estate exceeded $1 million, the Court appointed counsel as contradictor to represent the son’s interest. The appointment of a contradictor is a method ensuring all parties’ interests are considered when approval of a settlement is sought.

In final submissions, the contradictor was concerned with the form of the grant and the plaintiffs’ standing in making the application but generally agreed that the informal document be admitted to probate.

On 23 August 2022, the Registrar of Probates ordered letters of administration with the will annexed to the plaintiffs limited for the partial use and benefit of the minor child of the deceased until he attains the age of eighteen and applies for and obtains a grant.

 

In New South Wales, the Surrogacy Act 2010 provides that a surrogacy arrangement must not be commercial and payment may only be made to cover the expenses related to the pregnancy: s 5. The surrogate must not be genetically related to the child and intended parents and surrogates are permitted to advertise so long as they have not paid a fee for the advertising.

Section 12(1) of the Surrogacy Act empowers the Court, following an application made under Pt 3 of the Act, to

‘make a parentage order in relation to a child of a surrogacy arrangement.’

Section 12(2) of the Surrogacy Act states that the purpose of a parentage order

‘is to transfer the parentage of a child of a surrogacy arrangement’,

Section 5 of the Surrogacy Act defines surrogacy arrangement.

The case

In A v X; Re Z [2022] NSWSC 971 A is the proposed mother and B, is the proposed father under the parentage orders. They were married in 2016.

Background

The plaintiffs are the biological parents of Z, having provided the egg and sperm used to create the embryo implanted into X in February 2021. X is the birth mother of Z and Y is the birth mother’s partner. They were married in 2014.

In June 2020 the parties executed a pre-conception surrogacy agreement under s 24 of the Surrogacy Act. Before that, each of A, B, X and Y, underwent counselling and received independent legal advice under s 35 and s 36 of the Surrogacy Act.

The implantation procedure took place in February 2021. X was informed the procedure had been successful, and that she was pregnant with Z. The 26-week ultrasound showed that there was a complication.

Having discussed Z’s prognosis and anticipated quality of life, A, B, X and Y jointly decided to medically terminate the pregnancy. Z was delivered stillborn on 6 September 2021 and registered by X and Y on 22 November 2021, under s 12(3)(b) and s 13(1) of the Births, Deaths and Marriages Registration Act 1996 (Vic).

Although the embryonic implantation procedure occurred in New South Wales, X and Y’s usual place of residence is Victoria with Z’s stillbirth occurring there.

Unlike, the Births, Deaths and Marriages Registration Act 1995 or the Family Law Act 1975 which extend the definition of child to encompass a stillborn child the Surrogacy Act does not provide a standalone definition of the term child. Instead, the phrase child of a surrogacy arrangement is:

a reference to a child born as a result of a surrogacy arrangement or who is the subject of a surrogacy arrangement.

S4(2) Surrogacy Act

A deposed that it was always the parties’ intention that Z was to be her and B’s child, and that this has not changed in light of her death. Similar sentiments were conveyed by B, X and Y. The parties requested that the Court make the parentage order sought by the plaintiffs, notwithstanding that several statutory preconditions to doing so have not been complied with.

The decision

As this case was novel the court held that at common law, legal rights and personality are predicated upon a live birth:

live birth, aside from catalysing the child’s legal rights and personhood, is the marker of a child’s independent existence in the eyes of the law

Z was not a child born as a result of a surrogacy arrangement as born does not permit judicial reading-in of the term stillborn which is enough to conclude in this case that Z, does not fit the description of a child who is the subject of a surrogacy arrangement.

Further, the Court held that in exercising its discretion to make parentage orders A and B could not satisfy the mandatory precondition in s 22(1) of the Surrogacy Act that a parentage order

is in the best interests of the child.

Additionally, there was arguably no parental responsibility left to transfer from X and Y to A and B concerning Z under s 39(2)(b) of the Surrogacy Act.

X and Y as Z’s birth parents were entitled and obliged to choose how to bury Z’s body following her stillbirth. X and Y arranged in consultation with A and B for Z to be buried in NSW, close to where A and B live.