Wills and Probate Case update

Transcription

1 19 December 2014 Wills and Probate Case update Carol McOmish Barrister Nathan McOmish Barrister Owen Dixon Chambers 205 William Street Melbourne Vic 3000 DX 94 Melbourne Vic P: F: By Carol McOmish & Nathan McOmish Construction/Charities Re Coulson [2014] VSC 353 There was an ambiguity in the description of an entity named as a beneficiary in the will. McMillan J, in construing the will in order to determine the identity of the intended beneficiary, had recourse to s, 22A(1) of the Wills Act 1958 (as the will in question pre dated the Wills Act 1997) and was able to take into account evidence of acts, facts, and circumstances touching the testator s intentions but not evidence of statements by the testator as to her intentions. The terms of the will, coupled with extrinsic evidence, led her Honour to the conclusion that the testator had intended to make her gift to a similarly named entity. That entity however had been wound up after the will was made but before the testator died and then reincarnated as another similarly named entity. The issue was then whether or not the gift had lapsed. Her Honour accepted that the entity was a charity, as it was an organisation devoted to the advancement of religion, and its activities, which were open to the public, provided a public benefit to its members and the public generally.

2 PAGE 2 OF 19 Her Honour first considered the threshold question of whether the organisation had ceased to exist, and, after reviewing the authorities, concluded that when it comes to charities, a simple dissolution and reincorporation may not result in the charity ceasing to exist If the charity organisation continues its work through a new body corporate. Her Honour held that the organisation had not truly ceased to exist but rather metamorphosed into another organisation, as the objects and purposes of the organisations showed that the work of the original organisation had been continued, and the testator s personal papers revealed her continued involvement after the original organisation had been wound up. Her Honour concluded that the gift had not lapsed. As the charity had not ceased to exist, it being merely the mechanics by which the organisation operated that had changed, there was no need for a cy-près scheme. Her Honour however went on to consider that, if she were wrong, the gift was in any case saved by exceptions (A) and (C) in Re Tyrie and s. 2(1)(a)(ii) of the Charities Act 1978 (i.e. the cy-prés doctrine), as she considered that there were factors supporting the common law and statutory requirement of a general charitable intention rather than a particular charitable intention in order to apply a gift cy-près. Melba Support Services Inc v Bell [2014] VSC 425 The testator had died in 1982 and left a share in her residuary estate on trust for a charitable entity to be paid to it in the trustees discretion and to be used for such charitable and other purposes as it in its absolute discretion thinks fit after her intellectually disabled daughter s death, provided that the intellectually disabled daughter resided in a specified nursing home run by the entity. Capital and income were otherwise to be applied for the daughter during her lifetime and after her death any undistributed capital and income were to be paid to the testator s son or to his children surviving the daughter if he predeceased the daughter. The proceeding concerned how undistributed capital and income were to be distributed after the daughter s death, the nursing home having closed in 1997 and the daughter having then moved to other accommodation administered by the entity. The deceased had incorrectly named the entity in the will, however the misdescription was minimal. McMillan J concluded that the entity had not ceased to exist, as the testator had intended to refer to an entity that provided support services and assistance

3 PAGE 3 OF 19 for individuals with disabilities, and the plaintiff had become that entity and had continued the work along the same lines. Her Honour however formed a preliminary view that a cy-près order was not available because the correct construction of the will was that there was a gift over in the event that the daughter no longer resided in the nursing home when she died, and the doctrine of cy-près was only applicable where a charitable trust could not be performed and funds held on trust would otherwise fail. Her Honour then sought submissions on whether the plaintiff might in any event be entitled to the undistributed capital and income in accordance with the principles considered in Re Coulson whereby an entity that had existed under another name continued to exist by way of a successor institution. The Plaintiff however did not seek an interpretation of the will that established a right to the undistributed income and capital by arguing that the nursing home survived its closure in some fashion, but instead submitted that a cy-près order was appropriate as the will evinced a general charitable intention. Her Honour was not satisfied that the will evinced a general charitable intention (as, inter alia, there was a gift over specified in the will and the testator left a gift dependent on her daughter living in a specific home run by the plaintiff and not to the plaintiff simpliciter) and held that the undistributed capital and income be paid to the estate of the testator s son (he having predeceased the daughter), or to the beneficiaries thereof. Trust Company (Aus) Ltd (as Trustee of The Estate of Healy (dec'd)) v Edwards [2014] VSC 257 The remainder interest in income under a trust in a will made by a testator who died in 1958 was left to two boys orphanages for the purpose of furthering the education of boys. The orphanages had ceased to exist in 1997 and the trustee brought a cy-près proceeding. The daughter of the last life tenant brought a separate proceeding seeking her appointment as a trustee of the trust and filed an appearance in the cy-près proceeding. All parties (the trustee, the daughter, and the Attorney General) agreed that the will exhibited a general charitable intention, that the trust could not be carried out in accordance with the spirit of the gift as there were no longer any orphanages in Victoria, and that an order that the trust under the will be applied cy-près was appropriate. Each party however presented different cy-près schemes to the Court.

4 PAGE 4 OF 19 There was an issue as to whether the Court had jurisdiction to hear the application, as probate had been granted in New South Wales. Daly AsJ was of the view that there was jurisdiction, as an expansive approach to jurisdiction was consistent with the authorities relating to applications to vary a trust, and as there was a substantial connection between the trust and Victoria and the connection with New South Wales was historical. There was no dispute about the applicable law as to how a gift is to be applied cy-près, i.e., that the Court is obliged to order or sanction a scheme which applies the gift in a manner as close as possible to the testator's original general intention. Her Honour was of the view that, although the Court may take into account extrinsic evidence of intention, the best evidence of intention was the terms of the will, and that the significance of any extrinsic evidence would generally be limited where there was a clear intention in the terms of the will or to resolving any ambiguities. Her Honour accepted in general terms the scheme proposed by the trustee (but required that it be more closely prescribed to give effect to the testator s intentions as best as possible), being of the view that the fact that it was a successor organisation carrying out substantially similar functions weighed in favour of constructing or sanctioning a scheme involving that successor organisation. The application for appointment as a trustee was opposed by the trustee. Her Honour did not consider it necessary or expedient under s. 48 of the Trustee Act to appoint the daughter as a co trustee, particularly given the existence of a professional trustee and the limitation of the trustee s role to investment and administration of capital. Powers and duties of trustees/executors Hodge v De Pasquale [2014] VSC 413 An executor had settled a Part IV claim at mediation on the advice of counsel. The settlement amount came out of the share of the residuary beneficiary, who had been invited to the mediation but had not attended and who had not been consulted as to the settlement (although she had been advised before the mediation that her entitlement under the will might be affected by the claim). The residuary beneficiary disputed the settlement and the payment of the settlement amount pursuant to terms of settlement. Questions to be determined by the Court were whether the compromise of the Part IV claim and payment of settlement funds were made in excess of the executor s power or

5 PAGE 5 OF 19 in breach of her duties as trustee, and whether the Part IV claimant was liable to repay the settlement sum to the estate or whether the residuary beneficiary was entitled to be indemnified from the trust. The source of the power of a trustee to compromise was identified as s. 19(1)(f) of the Trustee Act 1958, and the case raised questions as to whether the section empowered an executor to give effect to the compromise of a Part IV claim by paying provision from an estate, and, if not, what the source of power to pay such provision was. McMillan J noted that the enactment of the statutory power of compromise predated the introduction of testator s family maintenance legislation, and that it codified common law administrative powers in relation to claims against assets of an estate, or claims made by an estate to certain assets. Her Honour also noted that family provision orders cannot simply be made by consent, as the Court has to be satisfied that the compromise satisfies the statutory requirements, and parties cannot confer on the Court a wider jurisdiction than is conferred by the legislation. Her Honour also noted that an order in a Part IV claim alters the beneficial entitlements under the trust, that there is clear authority that, at common law, a trustee cannot unilaterally vary or re-arrange the terms of a trust, that the Court may only do so in very limited circumstances, and that although the statutory power to a trustee to compromise is to be read broadly there can be no intention in the statute to grant power to trustees to vary the beneficial interests in a trust without the consent of the beneficiaries affected or an order of the Court. Her Honour considered that the obligations of an executor remain the same under Part IV of the Administration and Probate Act, which is a statutory modification of the rule that neither a trustee nor a Court may vary the beneficial interests under a trust except in certain specific circumstances. Her Honour concluded that an executor may settle a Part IV claim without the consent of beneficiaries affected, but must then seek orders from the Court giving effect to the settlement, and therefore held that the executor had the power to agree to compromise the Part IV claim but did not have the power to pay anything from the estate to the Part IV claimant without an order from the Court and so the money paid out of the estate was therefore paid out in breach of trust. Her Honour went on to hold that the Part IV claimant was not liable to pay the funds that she had received back to the estate (she having had no notice of the residuary beneficiary s lack of consent to the settlement) and that the executor was liable to do so,

6 PAGE 6 OF 19 as the decision to give effect to the compromise was beyond the powers conferred by s. 19 of the Trustee Act and that the good faith protection did not extend to acts that did not fall within s. 19. Further, her Honour considered that she should not exercise the discretion granted to the Court under s. 67 of the Trustee Act to excuse a trustee for liability when acting honestly and reasonably. Her Honour was of the view that more than merely acting honestly is required in order to be considered to have acted in good faith, trustees being required to exercise an active rather than a passive discretion. Her Honour considered that the executor had acted in a position of conflict (her own interests under the will had not been affected by the settlement), and that she had not properly considered the residuary beneficiary s interests. The executor was ordered to personally reimburse the estate for the settlement amount, The executor s submissions that the amount should be reduced as had the claim not settled the estate would have been put to the expense of defending the claim were not accepted, her Honour being of the view that the claim was weak and would most likely have failed and an order would have been made that the Part IV claimant pay the estate s costs. IMO the Will and Estate of Peter Robert Nelson Peers, deceased [2014] VSC 500 An application by an executor for directions and determination by the Court as to whether she, as a co-executor acting without the consent of the other executors, was entitled to be indemnified from the estate in respect of repairs and maintenance carried out on a property in which the estate held a 50% interest, and whether she had been entitled to bring a proceeding to review the costs of the estate solicitors that had been issued and settled. Daly AsJ noted that there is some inconsistency in recent Victorian authorities as to the question of whether an executor of an estate, as opposed to a trustee of trust property, is entitled to act unilaterally in carrying out their duties in administering the estate. Her Honour stated that in any case a matter critical to the directions the court might give would be the benefit or the potential benefit to the estate of the expenses incurred or the proposed course of conduct, and that, as the party seeking to invoke the jurisdiction of the Court, the applicant executor bore the onus of persuasion in that regard. Her Honour was of the view, on the facts, that the estate had been benefitted, and ordered that the applicant be reimbursed from the estate, but only to the extent that she had not been reimbursed by third parties already.

7 PAGE 7 OF 19 As to the proceeding, Her Honour noted that the court was not bound to investigate the evidence and make a finding as to whether the proposed proceeding would be successful, but was however required to make an assessment as to whether the proposed proceeding was justified, taking into account the prospects of success, the potential of the litigation to deplete the assets of the estate, the costs thrown away should the action be unsuccessful, and what might be gained should the action succeed. In her Honour s view the evidence before the court was insufficient to persuade her that the proceeding was justified, there being no evidence of legal advice regarding the prospects of success and no evidence of an opinion from a costs consultant, and it being unclear on the evidence how the estate solicitors could have administered the estate any differently or more economically given the degree of disputation between the applicant and the co-executors. Testator s Family Maintenance Baxter v Baxter [2014] VSC 377 A claim for further provision by an adult son, who sought an increased amount of $400,000 from his father s estate instead of his legacy of $50,000. The balance of the estate had been left to the children of another surviving son and the stepdaughter of the other surviving son. The value of the estate at trial was approximately $740,000. There was a family farm that was a substantial enterprise that was controlled by the plaintiff s brothers and their families. Much of the family wealth had been transferred to family trusts and to the other sons and their families in the deceased s lifetime. There were two family trusts with a combined value of approximately $6 million. The plaintiff s brothers and their families were income and capital beneficiaries of both trusts and the plaintiff was an income beneficiary of the smaller family trust that had assets of approximately $1 million. The Plaintiff, aged 64, had only received a legacy of $50,000 from his mother s estate of approximately $2.32 million, the balance having gone to the other sons and their families and one of the family trusts. He had received benefits from his parents during their lifetimes, which he had put towards a deposit on his home. The home, jointly owned with his partner, was worth approximately $1.1 million but needed renovations estimated to cost $110,000-$150,000. The plaintiff had a superannuation entitlement of $495,000, and an investment property worth approximately $270,000. He and his partner

8 PAGE 8 OF 19 were retired and his income from pensions, superannuation, and rent, of approximately $62,000 generally covered his expenses. He had health concerns due to cancer, presently responding well to treatment but affecting his level of fitness and physical strength and likely to cause expense if surgery proved necessary. McMillan J took into account factors such as a warm and loving relationship between the plaintiff and the deceased, the middling size of the estate due to the transfer of most of the wealth of the deceased during his lifetime, the lack of competing claims, and the plaintiff s lack of a financial buffer against future financial contingencies. After having regard to the balance between freedom of testation and the moral requirement to make proper provision for an adult child, her Honour was of the view that the provision of $50,000 was inadequate. The plaintiff was awarded $350,000 inclusive of his legacy, made up of the legacy, $200,000 for investment purposes, $50,000 for either renovations or home change, and $50,000 for any contingencies relating to health deterioration. Davies v Davies [2014] VSC 248 An application by grandchildren aged 17 and 15. Their father had predeceased his mother, the deceased. He suicided after suffering from multiple sclerosis for many years. The deceased left seven earlier wills and three codicils, in which she left gifts over to grandchildren. The last will, made 2 months after the death of the plaintiffs father, left legacies of $10,000 to each of the plaintiffs and their half sister and left the residuary estate to the deceased s surviving son, with gifts over to the plaintiffs and their half sister. At trial the estate was worth approximately $2.9 million, after allowing for a deduction of $370,000 in relation to the settlement of a Part IV claim made by the plaintiffs mother. After paying off her mortgages on her home from her settlement monies she had a balance of $120,000. She was working part time earning approximately $30,000 net per annum and had a modest superannuation entitlement. There was a possibility that plaintiffs, who had significant emotional and psychological issues due to their father s illness, depression, and various suicide attempts, might require ongoing therapy for the rest of their lives. They had had a happy and normal relationship as between grandparent and grandchildren overall during their childhood, but not a special or dependent relationship.

9 PAGE 9 OF 19 The son who inherited the estate had stopped work in order to care for the deceased His financial resources were good. He would receive the balance of the estate after whatever further provision was made for the plaintiffs, he owned his home and had no debt, was retired, had modest superannuation and savings, and owned the deceased's art collection, valued at nearly $46,000, but owed $43,000 for its storage costs. He conceded that the deceased had a responsibility to make provision for the plaintiffs and that the distribution under the will did not make adequate provision for them, and McMillan J considered that in the circumstances of the case that the concession was properly made. In assessing quantum of provision her Honour considered significant factors to be the large size of the estate, the fact of the plaintiffs psychological issues having arisen primarily from the illness and early demise of their father, and the plaintiffs having lost the immediate and continuing support of their father and what inheritance or financial support he might have fairly expected from the deceased for his future needs and those of his family. The plaintiffs were awarded $400,000 each by way of further provision for their immediate and long-term financial security and for unknown future contingencies, to be held on trust for their benefit until each of them attained the age of 28 years. Hartnett & Hartnett v Taylor & Ors [2014] VSC 427 The deceased left a property worth $330,000 and other assets worth $80,000. In her will she left a right to reside in her home, worth $330,000, to her sister. On termination of the right to reside the home was to be sold and $200,000 of the sale proceeds was left to the sister and the balance was left to the deceased s grandson. The two plaintiffs were the deceased s adult daughters, who had been specifically excluded in the will, made one month prior to death. Both plaintiffs were in poor financial situations and in need of support. Both had had a close and loving relationship with the deceased but had become estranged from her towards the end of her life due to her alcoholism. The sister had lived in the home for many years, claimed to have spent money improving it, and had never paid rent. She had received money from the deceased in the months preceding her death, benefitted from an insurance policy she had taken out over her life, and an investment property she jointly owned with her. She largely lived on a carers pension and was responsible for the care of her two disabled stepsisters. She claimed

10 PAGE 10 OF 19 that it would be difficult for her to find rental accommodation if she were forced to move. At the commencement of the trial Sifris J dismissed an application by the sister for an extension of time to be joined as a plaintiff to the proceeding so that the home could be transferred to her absolutely. Her claim was weak, her explanation that she was unaware of her right to make a Part IV claim until she changed solicitors shortly prior to the commencement of the trial did not explain her lengthy delay, and there was the potential for real prejudice if her application was granted, as the application was not opposed by the estate and the deceased s grandson had not been separately represented throughout the proceeding. His Honour found that the deceased clearly had a moral obligation to support the plaintiffs and that they were clearly in need of support, and that the evidence did not support a finding that that the plaintiffs were responsible for the estrangement, either at all, or to such an extent that it would preclude them from making a claim. The plaintiffs were each awarded one third of the estate. In Hartnett & Hartnett v Taylor & Ors (Costs) [2014] VSC 501 Sifris J awarded the plaintiffs indemnity costs from the estate. The reason was that the defendants had sought to blame the deceased s alcohol dependence on the plaintiffs estrangement from her, despite their own medical evidence that the deceased had had alcohol dependence for the last 9 years of her life. His Honour ordered that the sister, who had been separately represented as a defendant, bear her own costs. Reasons were that there was no longer any basis for separate representation after dismissal of the application for joinder at the outset of the trial, that the benefits the sister received as a beneficiary were not sufficient to warrant separate representation given the size of the estate and the nature of the dispositions in the will, and that and it was appropriate and in the interests of all beneficiaries to leave the task of upholding the will to the defendants. Briggs v Mantz [2014] VSC 281 The deceased left her residuary estate equally between her only son and his four children, her only grandchildren. The Plaintiff sought 90% of the estate, estimated at approximately $800,000 at trial but estimated to be reduced by up to $200,000 in total legal costs if those costs were to be borne by the estate.

11 PAGE 11 OF 19 The Plaintiff was aged 70. He had been very close to his parents, and they had provided him with significant financial and other assistance, including a deposit on a house and paying his family s bills. He had visited the deceased every day when she was in a nursing home. He was reliant on a pension and also did some part time construction work. He lived in the deceased s home and had no assets. The four grandchildren had close and loving relationships with the deceased, described as quasi-parental. Now in their 40s, they all had competing financial needs of some sort. Two of the grandchildren offered their 20% share of the estate to assist the Plaintiff. McMillan J again stated the importance of the Briginshaw standard and s140(2) of the Evidence Act in Part IV claims, and that given that the Court cannot hear evidence from the deceased a substantial burden is placed upon an applicant to prove their case. The Plaintiff s claim failed. Her Honour found that he was unable to establish his financial position. He did not give any evidence as to his living expenses. He could not explain debts in his name. He was unable to explain how he spent $100,000 that he received as part of a property settlement in He did not have a clue what he earned as a stevedore between 2000 and He could not explain what he did with a $22,000 superannuation payout in Her Honour noted that he was unable to explain what he had done with an estimated $639,000 over a ten-year period. He said he spent money on the deceased, but could not identify what that might have been, apart from buying her a bed. Her Honour considered that the plaintiff was a spendthrift who essentially put himself first and others filled the role of the deceased s carer once she needed care and that he was financially irresponsible and disrespectful to the deceased, demonstrated by allowing his friend to live in the deceased s home rent-free after she moved into aged care. Her Honour also found against the plaintiff s submission that the natural order should be that a child inherits from the parent and that child in turn benefits his or her children. Briggs v Mantz (No 2) [2014] VSC 487 The defendant sought an order that the plaintiff pay the defendant s costs on an indemnity basis from the date of the second of three offers, and otherwise on a standard basis. The first offer was made prior to the issuing of proceedings, after proceedings had been foreshadowed by the plaintiff. It offered $50,000 in addition to the plaintiff s 20% share

12 PAGE 12 OF 19 under the deceased s will. It was accompanied by an open letter that set out the problems with the plaintiff s claim and the consequences that might follow. The offer was not accepted by the plaintiff. The second offer, of $400,000 inclusive of costs with the plaintiff to vacate within 28 days of acceptance, was made five days after the commencement of proceedings. The offer was rejected by the plaintiff in a counter-offer of $50,000 to each beneficiary plus costs, which would entitle the plaintiff to ownership of the deceased s home. The third offer, of $420,000 inclusive of costs, was made three weeks prior to the trial commencing. It represented 58% of the estate. It expired 2 days prior to the trial without being accepted by the plaintiff. McMillan J re-stated the general principles concerning costs in Part IV claims, concluding that: When a plaintiff embarks on a Part IV claim, he or she can no longer assume an entitlement to have costs paid out of the estate, nor can a plaintiff assume that he or she will not be ordered to pay the costs out of the estate. As to indemnity costs orders in Part IV litigation, her Honour referred the recent judgment in Bates v Cooke (No2) [2014] NSWSC 1322 concerning indemnity costs in an unsuccessful TFM claim where an offer of compromise has been refused, and considered that the principles set out by Kunc J therein applied with equal force in Victoria (i.e. that the characteristics of family provision litigation suggest an even stronger public policy basis for the encouragement of settling litigation that might apply in other types of case because, inter alia, the fund is fixed and risks being substantially depleted, the jurisdiction is redistributive rather than punitive or compensatory, the litigants are natural persons unused to litigation and suffering emotional strain, and costs need to be proportional in what are often modest estates). Her Honour found that the letter accompanying the first offer was an exemplar of what should occur in making an offer to an opposing side in a Part IV claim, it covering the issues to be determined, the reasons for the offer, steps in the litigation, costs, and costs consequences. Her Honour also found that the monetary value of the vacation of the property could be assessed in terms of rent. Her Honour held that it was unreasonable for the plaintiff to have rejected the second offer. Her Honour considered that it was a generous offer, that the plaintiff knew his own

13 PAGE 13 OF 19 financial circumstances, chose to ignore the risks outlined in the defendant s letter accompanying the first offer, and must now be responsible for his own conduct, and that it would not be just for the estate to be deprived of its costs in successfully defending the proceeding. Her Honour ordered indemnity costs from the date the second offer was rejected, as to order the estate to pay its own costs irrespective of the result would give parties little incentive to make appropriate decisions about the prospects of success and the proportionality of costs. Feehan v Toomey [2014] VSC 488 The deceased was survived by eight of her nine children. She left her estate (approximately $830,000) equally between her surviving children, with gifts over to their children. Her penultimate will left her estate equally between her nine children, with gifts over to their children. The unsuccessful plaintiff was an adult daughter of the child that pre-deceased. She sought a 1/9 share of the estate. Her claim was based on financial need (a net income of $51,000 per year, combined with the expenses of rent and raising two children), her attempts to build a relationship with the deceased that had been rebuffed, and the deceased s recognition of responsibility by including a gift over in her penultimate will. She submitted that she should have been treated equally with the grandchildren of the surviving children, all of whom were entitled to a gift over of their parent s share. The plaintiff relied on three cases involving grandchildren, being Petrucci v Fields, MacEwan Shaw v Shaw, and Day v Raudino in support of the submission that the deceased had a responsibility to provide. McMillan J considered that: Claims made under Pt IV are fact-specific, and to attempt to extract principles of general application from cases in which the factual scenario is very different from the case to be determined can be misleading. In my view, the most reliable principle to be extracted from the three cases relied on by the plaintiff is that stated by Mandie J in Petrucci v Fields: grandchildren can neither be 'ruled in' nor 'ruled out' until all the facts are examined. After reviewing the evidence McMillan J concluded that the plaintiff had had next to no relationship with the deceased, the evidence of her financial position, although not properly supported by documentation, was relevant but it remained for the plaintiff to establish why her financial need should be cast on the deceased s estate, that gifts over

14 PAGE 14 OF 19 to other grandchildren in the last will did not establish a responsibility to provide for the plaintiff as no evidence was led as to their relationships with the deceased and in any event they too received no distribution under the will as their parents had survived, and that to rely on the provisions of the deceased s penultimate will as evidence of recognition by the deceased of her moral responsibility towards the plaintiff was mere conjecture as there was no evidence as to reasons why the will was changed. In the course of the judgment her Honour made a short observation on the manner of giving evidence in Part IV trials: Prior to trial, I indicated to the parties that my preliminary view was that the evidence should be led viva voce rather than by affidavit, and that was ultimately how the matter proceeded. In Pt IV matters, as in probate proceedings, it is often the most appropriate manner to conduct a trial, for two reasons. First, as the deceased cannot give evidence, and as a finding that the deceased has abused their testamentary freedom is a serious allegation, evidence must be considered in accordance with the principles in s 140 of the Evidence Act 2008 and in Briginshaw v Briginshaw. In such cases, as a trial judge, it is of great assistance to be able to listen to the parties talk about their experiences and, in particular, their relationship with the deceased. Secondly, in my experience, affidavits filed prior to trial often contain much objectionable material, in particular opinion evidence by family members that expresses conclusions about the relationships between plaintiffs and testators rather than observations of conduct and events. Unless objections are discussed and agreed prior to trial, it is inefficient to waste court time debating the probity of such evidence. Although each matter will be different, practitioners should bear those considerations in mind in preparing Pt IV matters for trial. Her Honour also made a short observation on the citation of authority in Part IV proceedings: The general principles applicable in such cases are set out in a small number of famous authorities that establish the questions to be answered by the court. The focus of the parties in Pt IV matters should be on the factors set out in s 91(4)(e)- (p), and on the particular facts of the application presently before the court. A simple search on an online database will very often produce far more material than is relevant or than can sensibly be applied, and it does not assist the court to hand up reams of printed authorities. Care should be taken to ensure that cases are cited only where they are relevant.

15 PAGE 15 OF 19 Keating v Jenson [2014] VSC 433 The deceased, a widow with no children or dependents, left a $1.9 million estate. Apart from 13 small bequests totalling $60,000, the estate was left to the Williamstown Hospital and the Anti-Cancer Council. The plaintiffs were the nephew and great-nephew of the deceased. The defendant bought an unsuccessful application for summary judgment. The nephew had had a close relationship with the deceased, from spending much time with her in his youth, through to attending her 90 th birthday at a nursing home and delivering the eulogy at her funeral. Now aged 73, he owned his own home worth $350,000, lived on a pension, and had been diagnosed with prostate cancer. The great nephew had been left a legacy of $5,000 in the will. His relationship with the deceased was mainly through his father, the nephew, although it did grow over time. Now 47, he was in a parlous financial state. The defendants made extensive reference to cases in which the courts have considered claims by nephews and nieces, in particular to Napolitano v State Trustees and Jackson v Newns where claims by nephews were summarily dismissed. Derham AsJ however noted that all of the authorities in the area turn on their own facts, and that determining whether the jurisdictional threshold has been established must be approached on a case by case basis. His Honour distinguished Newns and Napolitano on three grounds, as in those cases: the plaintiffs had significant financial resources of their own and had already benefitted from the estate in a substantial way; the facts were quite distinct, including that the relationship was vicarious (through the deceased s wife); and all of the evidence that could be called was before the Court, whereas in this case the plaintiff was unaware of what claims the charities had over the estate, and the defendant was yet to file his affidavit material. His Honour considered relevant factors in the proceeding to be the possibility that the deceased did not appreciate the true size of her estate, the size of the estate, the lack of any evidence in relation to the competing claims of the charities, and the large

16 PAGE 16 OF 19 proportion of the estate left to the charities. Those factors led his Honour to consider that there was a matter to be investigated at trial, concluding that: At this point, it is true to say that the plaintiffs' case is weak, and may even fail. However, the authorities to which I have referred show that the power to dismiss summarily must be exercised with caution and in accordance with the overarching purpose under the CPA, taking into account the fact that, if granted, the plaintiffs will be deprived of the chance to pursue their claim. The forfeiture rule Re Edwards; State Trustees Ltd v Edwards [2014] VSC 392 State Trustees Ltd sought directions from the Court as to how to distribute estate assets in circumstances where the primary beneficiary had killed the deceased. The primary beneficiary was the wife of the deceased. The deceased had become increasingly violent towards her and had repeatedly threatened to kill her, and she had fatally stabbed him after grabbing the knife that he was coming towards her with from him. She pleaded guilty to and was convicted of defensive homicide (killing someone in circumstances that would otherwise constitute murder but at the time holding a genuine but unreasonable belief that that conduct was necessary to defend herself or another from really serious injury or death). The submission for the wife was not that the forfeiture rule did not apply to defensive homicide, but that the Court had discretion not to apply the rule and that that discretion ought to be exercised in the circumstances of the case. Much argument was directed to whether the Court had a discretionary power to apply the forfeiture rule, or was bound to apply the rule inflexibly. McMillan J noted that although some judges had considered that the rule should apply inflexibly, there had been cases in Victoria and elsewhere in which judges had held that there is discretion and that the High Court had not answered the question definitively. Her Honour referred to the discretionary approach to the rule taken in Victoria in Re Keitley and MIliankos v Miliankos, where the Court assessed moral culpability, and to the inflexible application of the rule in Re Soukup, applying the New South Wales Court of Appeal decision in Troja v Troja. Her Honour was of the view that while the rule is based on a principle of public policy it is a particular principle, being the abhorrence of the notion that one may profit from killing another, and that it was therefore logical that the rule should not be able to be modified

17 PAGE 17 OF 19 by an individual judge to accord with what the judge thought was fair in all the circumstances of a particular case. Having concluded that that there is no discretion not to apply the rule, her Honour considered the acts causing death to which the rule attaches. Her Honour said that: In my view, Troja and Re Soukup are clear authorities for the proposition that the forfeiture rule will apply in all cases of voluntary manslaughter, viz, where the elements of murder are present, but for some reason the culpability of the offender is reduced. The rule laid down in the Australian authorities therefore appears to be that, at the least, a person who kills another person by a deliberate and unlawful act forfeits any benefit arising as a direct result of that act. Her Honour, mindful that the crime of defensive homicide carried the same maximum penalty as that of manslaughter and that the wife killed the deceased with an intention to kill him, or at least to cause him really serious injury, concluded that there was no discretion to grant relief from the forfeiture rule on the basis of the wife s tragic circumstances and very low moral culpability. Her Honour rejected submissions that a constructive trust be imposed for the benefit of beneficiaries to be determined by the Court, it being in her view inappropriate to impose a constructive trust as such an approach amounts to determining the beneficiary or beneficiaries on the basis of unstructured judicial discretion, which has no place in the law of constructive trusts in Australia. There was then an issue as to how the will was to be construed given the forfeiture of the wife s interest in the estate and a gift over provision in the will designed to operate in the event that the wife failed to survive the deceased. Her Honour noted the general rule that that a gift over upon a contingency will not take effect unless that exact contingency occurs, and considered whether the gift over could be saved by the rule in Jones v Westcomb (an exception to the general rule that provides that, in certain circumstances, although the precise contingency has not occurred, the gift over will nonetheless take effect). Her Honour, after a comprehensive review of the authorities on the rule in Jones v Westcomb, considered that, in accordance with the general principles of will construction, the Court may only give effect to the rule when satisfied, based on the will itself in the light of admissible extrinsic evidence, that the testator must have intended that the gift over cover the contingency that actually occurred.

18 PAGE 18 OF 19 There were three gifts over, and her Honour said: In respect of each gift over the question is, if the deceased had been asked whether the gift over should operate in circumstances where Mrs Edwards survived him but forfeited her entitlement by killing the deceased, would he have said: A fortiori the gift over should take effect? Her Honour was not satisfied of an a fortiori intention on the part of the deceased that the gifts over were to operate in circumstances where his wife had murdered him. The estate fell on intestacy, from which the wife was barred from benefitting. Costs Fanning v Fanning [2014] VSC 370 Judgment had been delivered in Re Fanning [2014] VSC 222 in respect of a question concerning the exercise of an option by the defendant. In a postscript to the judgment McMillan J had expressed concern that the unsuccessful defendant had raised no more evidence than a bare assertion and that there were real questions as to why the case was run at all, and said that: Legal practitioners must always bear in mind their duty to the Court and their overarching obligations under the Civil Procedure Act Their task is to advise their clients, not merely to act as the client's mouthpiece. I do not propose in this case to undertake any investigation of the advice given by Bernard's solicitor and counsel. However, arguing a case as unsupported by the evidence as this case was, put simply, is a waste of the Court's valuable time and resources. In addition to costs orders sought against the defendant, the plaintiffs sought orders against the defendant s former solicitor and counsel that they pay costs ordered by the Court to them and indemnify the defendant in respect of any costs ordered by the Court to be paid by him to the plaintiffs. The defendant supported the application for costs against the solicitor and counsel. McMillan J dismissed the application for costs orders against the solicitor and counsel and subject to further submissions considered that appropriate orders would be that the solicitor s and counsel s costs of and incidental to the application be paid by the plaintiffs on a standard basis and that the plaintiffs and the defendant bear their own costs.

19 PAGE 19 OF 19 Factors that led to the positive outcome for the solicitor and barrister included that the solicitor had been concerned with the sufficiency of the documentary evidence and had warned the defendant of his concern, that her Honour considered that the defendant s case was not manifestly hopeless but was rather a weak case with the possibility of some prospects of success but the defendant s credit at trial had been a significant issue, and that her Honour was satisfied on the evidence that the solicitor and barrister were acting on the defendant s instructions at all times. Her Honour concluded that it was a weak case and that the running of a weak case did not justify making costs orders against legal representatives. ************************