- Kay v Miller  QSC 185
- Lewis v Lewis  NSWCA 168
- Wylie v Wylie  QSC 210
- Masih v Masih  QSC 207
- Grant v Grant  NSWCA 181
- NSW Trustee & Guardian v Reid  NSWSC 1053
- Case 649701 (concerning Nulis Nominees (Australia) Limited)
Proper law for rectification of a will
Greg Miller and his partner, Jocelyn Villaneuva, died in a helicopter crash on 6 September 2019. The order of death could not be established. Greg was younger so was presumed to have died last (by virtue of Conveyancing Act 1919 (NSW), s 35). Greg’s will contained inconsistent provisions disposing of his estate. The executor sought rectification of his will. The first issue to be determined was the proper law to be applied to determine the application for rectification.
Greg resided in NSW, died in NSW, owned property in this state, and made his will here. However, he also owned property in Queensland, so his executor obtained a grant of probate from the Supreme Court of Queensland. The executor applied to the Queensland Court for rectification of the will. The Court observed that questions of construction of a will are generally determined according to the law of the testator’s domicile at the date of the will, unless there is evidence that the testator intended otherwise. The Court found no case law on the proper law for rectification of a will, but decided that it too should be the law of the testator’s domicile (Kay v Miller  QSC 185 (Brown J) at ). That law was NSW.
Clause 2 of Greg’s will appointed his executor. Clause 3 left his estate to Jocelyn.
Clause 4 stated that if Jocelyn didn’t survive him, the following provisions applied in lieu of clause 2. Clause 5 appointed a replacement executor. Clause 6 gave Greg’s estate to his relatives. There was an inconsistency in the will as both clauses 3 and 6 purported to dispose of Greg’s estate.
The Court considered the drafting solicitor’s evidence, and particularly his file note, to find that clause 4 should have referred to clauses 2 and 3. The Court considered that this was a clerical error as the ‘draughtsman has never really applied his minds to words introduced or omitted and never adverted to their significance and effect’ (at ). This allowed rectification pursuant to Succession Act 2006 (NSW), s 27.
The application had been made more than 12 months after Greg’s death. Accordingly, leave was needed to bring the application. The Court granted leave as Greg’s estate had not been distributed, there was no evidence of prejudice, and a satisfactory explanation for the delay was provided (at ).
Appellate decision on knowledge and approval, and severing a will
Pamela Lewis died in 2017 leaving a 2011 will and four codicils, and a 2014 will and two codicils. She was survived by four sons, including David and Peter. All the wills divided Pamela’s assets equally between her four sons with a share to her grandchildren. However, the 2014 will and codicils conferred powers on David to claw back amounts representing the costs of litigation from Peter, gave David control of the trustee, and entitled him to cause the trustee to alter the equal distribution of assets. The trial judge found that those provisions had in substance been drafted by David. Peter propounded the 2011 will and three of its codicils. David propounded the 2014 will and its codicils. At first instance, the Court found that Pamela had testamentary capacity, but had not been shown to have known and approved the clauses of the 2014 will and its codicils which conferred powers on David.
The appeal was unsuccessful but raised issues about the requirements for knowledge and approval, and the circumstances where a court would sever a will by admitting only part to probate.
Knowledge and approval: The Court stated that reading a will aloud to the testator is insufficient to establish the testator’s knowledge and approval (Lewis v Lewis  NSWCA 168 (Leeming JA; Meagher and Payne JJA agreeing) at –). In part this is because ‘[w]hether a testator is shown to have known and approved a will is a matter of substance’ (at ). Proof of knowledge and approval may require proof of the contents of the will as well as its legal effect, its general tenor, the gravamen of the will: ‘The probate court’s vigilant and jealous scrutiny will not greatly be allayed by demonstration that a capable testator whose knowledge and approval is in question knew the contents of the will but failed to understand its effect’ (at ). However, proof of the contents and legal effect may not be necessary in every case: ‘it will depend on the degree to which the circumstances are suspicious, the sophistication of the testator, the complexity of the will and the other facts of the case’ (at ).
Severance: The Court referred to but rejected the suggestion that ‘a court of probate could correct a legacy expressed in a will to be $5000 which was established to have been a transcription mistake for $500, but could not correct a legacy stated as $500 which was established to be a transcription mistake for $5000. Such a doctrine had little to commend itself’ (at ). The Court opined that traditional limitations on severing parts of a will derived from repealed wills legislation, and the limitations may not have survived legislation allowing rectification of wills (as we have had in NSW since 1989) (at ). In any event, it was not established that the parts severed were known and approved by the testator. More was not needed to support the severance.
Comments about the testator’s solicitor: The Court was critical of the actions of Pamela’s solicitor: ‘The solicitor … who provided the various testamentary instruments executed by the deceased and who witnessed the deceased’s execution, fell far short of the standards of proper practice when he caused his 89-year-old and vision-impaired client to execute documents which in large measure were drafted by David and were to David’s benefit’ (at [16(3)]). The Court was critical that the solicitor ‘made no meaningful attempt to document any steps he undertook to ensure that his client knew the effect of the will he was asking her to execute’ (at ). And further: ‘there is a regrettable absence of any sense of the need to ensure that his client knew what she was doing’ (at ).
Amendments to Foreign Acquisition and Takeovers Act (Cth)
The amendments to this Act commenced on 1 January 2021. They included the removal of the exemption for acquisitions pursuant to a will, so that a foreign person, who acquires an interest in Australian land or a substantial interest in securities in an Australian entity through a will, may be subject to the requirements for FIRB approval. My Victorian colleague, Mercia Chapman has alerted me to updated Guidance Notes released on 21 July 2021. These are available at https://firb.gov.au/guidance-notes.
FIRB Guidance Note 2 states that the point at which a foreign person is considered to have acquired an asset under a will is when the person acquires a legal interest on completion of administration of the will. The foreign person (who could be an Australian citizen) can seek FIRB approval within 30 days after acquiring a legal interest, in circumstances where the person was not certain that they would acquire that interest. The executor of a will generally does not need to seek FIRB approval to perform their executorial duties, as the vesting of interests with the executor following a death is covered by the exemption of devolution by operation of law.
The devolution by operation of law exemption extends to an interest acquired upon intestacy or pursuant to court orders, other than consent orders. Those interested in the intended application of the amendments should consider Examples 47 to 49 in the Guidance Notes. The position with objects of a discretionary trust is explained at Examples 15 and 16.
National framework for advance care planning documents
The Australian Government Department of Health has published a National Framework for Advance Care Planning Documents. The Framework is designed to support increased awareness and uptake of advance care planning, which would see more people in Australia preparing, using and maintaining advance care planning documents. The Framework builds on the National Framework for Advance Care Directives released in 2011. It can be found at www.health.gov.au/sites/default/files/documents/2021/06/national-framework-for-advance-care-planning-documents.pdf
A solicitor’s duty to prevent elder abuse
Three months before his death and six months after she came to live with him, Albert Wylie appointed his daughter, Yvette, as his attorney. One month before his death, he gave Yvette a half interest as joint tenant in his real property for ‘natural love and affection’. This meant that his major asset did not form part of his estate. Five days later, he made a new will which appointed Yvette as executor. After making small pecuniary legacies to a friend and his other surviving children, Wendy and Steven, he left the bulk of his estate to Yvette. Wendy and Steven argued that the transfer of the property was the consequence of undue influence or unconscionable conduct on the part of Yvette.
A solicitor visited Albert seven times in four months. The Court observed that, not only was Yvette present during the discussion about the transfer, but the solicitor was actually advising her. The solicitor raised with Albert and Yvette the question as to whether Yvette should obtain independent legal advice, but didn’t focus on ensuring Albert got independent legal advice. Yvette indicated that she wanted the solicitor to stamp the transfer for her. The Court said that the solicitor ‘was clearly not only giving advice to both the deceased and [Yvette], but she did not ensure that the deceased obtained important independent legal advice’ (Wylie v Wylie  QSC 210 (Lyons SJA) at –).
The Court referred to the solicitor’s evidence that the family were always present during the discussions and were never asked to leave the room. ‘Indeed, [the solicitor’s] extraordinary evidence was that it did not occur to her to do so’ (at ). This was so notwithstanding that the solicitor knew that Albert did not know what day it was, what was in his will, how much he had in his bank account and the changes he had made with his solicitor on her previous visit.
The Court explained that ‘the duty of a solicitor is to protect the donor against himself, and not merely against the personal influence of the donee, in the particular transaction… a solicitor does not discharge his duty by satisfying himself simply that the donor understands and wishes to carry out the particular transaction but must also be satisfied that the gift is “right and proper for the donor to make under all the circumstances”… if the solicitor was not so satisfied then the duty is to advise his client not to go on with the transaction, and to refuse to act further for him if they persist’ (at ).
Yvette could not rebut the legislative presumption of undue influence which operates in this situation in Queensland. Because Yvette had mortgaged the property, the Court did not set aside the transfer. It made a declaration that Yvette held the property on trust for the estate. A family provision order for equal division of the estate was made in favour of Albert’s other children. Yvette was ordered to account for $110,570 which she had already received, including $70,568 deducted from Albert’s account after his death.
Unfound will but no presumption of revocation
Prem Mani Masih made a will in 1993. It was retained by his solicitor and the client was given a copy. The solicitor sold the practice in 2008. In 2020 Masih died. The original will was not found in the safe custody documents held by the solicitors who acquired the practice. Despite enquiries it could not be found. An application was made for letters of administration on the basis of intestacy. The Court in Masih v Masih  QSC 207 (Wilson J) held that the presumption of revocation of a will where the original was not found did not apply as there was no evidence that Masih ever had possession of the original will (at ). He did not die intestate. The application was dismissed.
The appeal in Grant v Grant  NSWCA 181 has been dismissed. The lower court decision was noted in 72 LSJ November 2020 p100 under Liability of attorney and third party.
Construction of ‘my real estate’
Florrie Hurley died in 2005. By her last will she gave a life interest in her estate to her son, David, with residue to her sister, May, and brother-in-law, John, as joint tenants. John died in 2012. May died in June 2019. David died in July 2019. At David’s death, Florrie’s estate comprised real estate and money.
May’s will left ‘my real estate’ to Jennifer Reid and the residue to other beneficiaries. The matter for decision in NSW Trustee & Guardian v Reid  NSWSC 1053 (Ward CJ in Eq) was whether, on the basis that Florrie’s estate had vested at the time of May’s death, May’s estate comprised the real estate which was part of Florrie’s estate. The Court observed that at May’s death, May could not have called for the transfer of the real estate in Florrie’s estate to her (because the life tenant, David, was still alive). However, she had a vested remainder interest in the residue of Florrie’s estate (which as that time included the real estate) and by that time Florrie’s estate had been administered such that the real estate was held under the trusts for David for life and, on his death, for May (at ).
As a result, ‘the remainder interest in Florrie’s estate (which included the [real estate] and which had already vested in interest on the date of Florrie’s death) was undoubtedly an interest capable of being disposed of by May’s will. To the extent that the remainder interest comprised a right (exercisable on the life tenant’s death) to call for the transfer of the [real estate], in my opinion it falls within the generic description “all my real estate”’ (at ). Thus, on the proper construction of May’s will, the gift of ‘all my real estate’ included the interest of May’s estate in the real estate, held on trust for May’s estate under the trusts the subject of Florrie’s will, and did not fall into the residuary estate.
Not accepted non-lapsing nomination
The member joined the superannuation fund in 2008. He completed a non-lapsing binding nomination in favour of his then wife. Through an administrative error, that nomination was not accepted by the trustee of the fund. Thereafter, his annual statements recorded ‘no’ to a binding beneficiary nomination being received by the trustee. In 2011, the member and his wife divorced, thereafter the member re-partnered and had another child. The member died in 2018.
The member’s de facto spouse and his three children were all dependants by reason of the definition in the fund’s trust deed. The ex-wife was found to be a dependant in fact because she and the member had a joint business loan to which the member made monthly contributions, and which was secured over the former family home which the member and ex-wife owned as joint tenants.
The trustee declined to accept the non-lapsing nomination after the member’s death because the ex-wife was named as ‘spouse’, the member’s circumstances had changed in the interim, and he had not renewed a lapsing nomination he had made in favour of the ex-wife when it lapsed. AFCA considered that the trustee’s decision was fair and reasonable given doubt about the member’s wishes and the death benefit being already payable (Case 649701 (concerning Nulis Nominees (Australia) Limited)).
In the absence of a binding nomination the trustee needed to decide the persons who should receive the member’s death benefit of $1,231,000 and the amounts to be received. Based on the levels of dependency at the date of the member’s death, the trustee apportioned the death benefit between the de facto spouse and minor child (80 per cent), ex-wife (10 per cent) and the two adult children (5 per cent each). There was no application to alter the death benefit to the adult children, so AFCA was satisfied that the trustee’s decision was fair and reasonable in its operation in all the circumstances.
Blue Mountains Succession conference 2021
The conference has been deferred to 19-21 November 2021 because of the COVID-19 lockdown. Double vaccination is likely to be required.