Lecture 4 NATURE OF A WILL

Characteristics of a Will:

SA06 s3 will extends to a codicil and any other testamentary disposition A codicil an addition or amendment to a will. TO BE VALID: o formalities as to writing, execution and attestation. o testamentary capacity, knows and approves of contents of will. o Deal with property or appoint executors in order to be admitted to probate. o Not revoked. A will is always able to be revoked notwithstanding it is expressed to be irrevocable; Vyniors Case, or that the testator has contracted not to revoke the will. Will has no effect until Ts death i.e. T is free to deal with property during lifetime NWS it forms a gift under their will i.e. will is the aggregate of all unrevoked testamentary writings; Douglas-Menzies v Umphelby. Thus, a later will does not revoke an earlier will unless it: o Expressly does so through a revocation clause; or o Impliedly does so where the later will is inconsistent with the terms of the earlier will.

Codicils: An amendment must comply with the formalities of a will (unless dispensed with). A codicil is read with the will as both documents constitute one will. But a codicil is construed so as to interfere with as little as possible with the will; Cookson v Hancock (1836).

Testamentary and Inter Vivos Transactions:

A testamentary disposition takes effect on the death of the testator. Must comply with the formalities under SA. BUT property merely passing upon death does not make it testamentary o Must have been a voluntary transmission on death of property which, up to the time of death, belonged absolutely and indefeasibly to the deceased; Russell v Scott (1936).1 An inter vivos disposition takes effect from the time that it is made or depends upon some event other than the donors death for it to take effect. It does not require compliance with SA. (Rebuttable) presumption: document that appears testamentary on its face is testamentary. Rebuttal: maker did not intend for it to operate as will.
1

Facts: An aunt and nephew held a joint bank account, which she alone operated during her life. She intended the nephew to have the account by right of survivorship on her death. When she died, her estate claimed that fund belonged to her on a resulting trust. Issue: joint bank account = a resulting trust? Did, upon the death of a testator, the money in the bank account became part of her estate OR the property of the co-owner (nephew); oral declaration = a valid will? Was the money in a bank account immediately vested to a nephew a valid testamentary disposition? NTS: No presumption of advancement between an aunt and nephew. Onus on nephew, even though he was the legal owner. Held: inter vivos disposition nephew took half the balance of the account. Presumption of a resulting trust BUT it was overridden here by clear implications of her conduct she clearly intended that she benefit the money while she lived, but that he should have it when she died. Thus, you can disprove the presumption of resulting trust on the facts of the case. At 450-451 (Dixon & Evatt JJ).

Lecture 4 NATURE OF A WILL

Likewise, if not prima facie testamentary, may be admitted to probate if it shown compliance with formalities AND intended to be testamentary; Kings Proctor v Daines (1830).

Moneys Deposited into a Joint Account o Confers interest immediately, death not required to consummate gift; Russell v Scott (1936). Voluntary Settlements Postponing Possession or Vesting o E.g. to A for my life, and thereafter to B. immediate effect but merely postpone possession/vesting until after the settlor's death. Nominations o E.g. the policyholder under a life insurance or super policy nominates a person to benefit upon the policyholders death. o Nominations are either categorized as: a contract to create an inter vivos trust of future property; McFadden v Public Trustee [1981] OR a contract to pay money on the happening of a future event; Baird v Baird [1990]. In the case of a statutory superannuation scheme, then the nomination creates a statutory obligation as to the payment of benefits that is not testamentary; Superannuation Industry (Supervision) Act 1993 (Cth), section 59(1A).

Donatio Mortis Causa:

depends on death to operate but is not testamentary. There are 3 elements: (Sen v Headley) 1) Contemplation of death. 2) The gift is conditional on death. The donee then receives an absolute and complete title it does not form apart of donors deceased estate*, either at law or equity. *cf Strong v Bird rule below. BUT conditional, so donor can recover and revoke the gift 3) Delivery of the gift with intent to surrender ownership. documents which are the indicia of title such as a share certificate; Public Trustee v Bussell (1993) But there is doubt as to whether there can be a valid Donatio over Torrens title land; Bayliss v Public Trustee (1988) c.f. Sen v Headley [1991]2 (did not follow Bayliss) Tawil v Public Trustee of NSW : bank passbooks = indicia of title BUT a bank statement was not. Hodgson CJ in Eq: handing over of car keys sufficient to create a donatio.

The Rule in Strong v Bird (1874) (gift is definite)

The elements of this rule stated in Cope v Keene (1968) (Kitto J). Testator: o makes a purported immediate gift of specific property. o intended as immediate gift but fails on formalities.

English CA: title deeds to unregistered freehold property could form the subject matter of a dmc. Facts; the key was to a locked box containing the title deeds to the house. Held; the gift of the keys to the box was an effective delivery of the title deeds. In turn the title deeds were, as one would expect, essential indicia of the title to the real estate. The delivery and the subsequent death of the testator were sufficient to create a trust obligation on the legal personal representatives of the testator as regards the real estate itself. Clearly this was unregistered and not Torrens title land so the decision could be distinguishable on that basis from the Australian cases just mentioned. However it is also clear that the Court of Appeal proceeded on a different basis using the notion of creation of a trust on the legal personal representatives as fundamental to the construction of the donees rights.

Lecture 4 NATURE OF A WILL o at the time of death still intended the gift be treated as effectively given to the intended donee. o leaves a will appointing, as executor, the intended donee.
If the above is satisfied, equity will perfect the gift. This is on the basis that: o The executor could have sued the testator for the gift. o The executor cannot sue himself or herself. o The executor has no choice over his or her appointment and should not be required to renounce probate in order to sue for the gift. Forms part of the estate but passes to the executor. Therefore available under family provision legislation and to creditors of the estate; Blackett v Darcy [2005] NSWSC 65 at [38]. C.f. Donatio mortis causa. The rule applies to realty as well as personalty; Benjamin v Leicher (1998) 45 NSWLR 389. Blackett v Darcy [2005]:Young CJ (Eq) Limited to cases donee executor receives the beneficial interest in the gift; does not apply where the gift is of a bare legal interest.

Conditional Wills:

Whole will conditional upon the happening of a specified event. Q of construction: o Whether the will is in fact conditional upon that event OR o the event is a mere reason for making the will; In the Goods of Spratt [1897]. Will is inoperative if the condition is not fulfilled; In the Goods of Hugo (1877).

Joint Wills:

One document contains the will of 2+ persons. Each time one dies, the document is admitted to probate IRO that person.

Mutual Wills:

o 2 persons (usually spouses) make wills in substantially identical terms. o There is a legally binding obligation between those persons that that neither party will revoke their will
without the consent or at least notice to the other. A legally binding obligation is essential; Osborne v Estate of Osborne [2001]. o The mere fact that the two wills are identical is not enough; Birmingham v Renfrew (1937); Baird v Smee [2000]; Hussey v Bauer [2011]. Need not prove every term of the mutual agreement. o Enough if there is sufficient evidence of so much of an agreement that supports a legally binding obligation to impose an equitable obligation; Walters v Olins [2008]. If solely RE: testamentary disposition of land, must be in writing; s.54A CA1919; Horton v Jones (1935). o BUT if a promise to leave land or personalty (cf. specific interest in land) then writing is not required; Birmingham v Renfrew. A breach of the agreement by revocation of their will by A: o during the lifetime of B damages. o after the death of B (Eq) constructive trust in favour of B under the mutual will; Dufour v Pereira (1769).

Lecture 4 NATURE OF A WILL o This operates as a floating obligation of the assets of the survivor which crystallises into a trust upon the
assets of the survivor on the death of that person; Barns v Barns (2003). C.f. Walters v Olins [2008] where a declaration in support of a mutual wills agreement was made during the lifetime of the surviving party to the agreement. Will is always revocable BUT equity will intervene in the case of mutual wills as the act of A in revoking will without notice to B or after Bs death constitutes fraud; Birmingham v Renfrew. Often, court will have to infer that the parties intended to enter into legally binding relations. o BUT must be clear and satisfactory evidence of the agreement; Walters v Olins [2008] o The court will act cautiously in this regard; Fry v Densham-Smith [2010]. o Relevant to consider: (Albrow v Cunningham [2000]) To how many people the statement was made Statement in writing Consideration The number of times the statement was made Language used Context in which promise was made The nature of the relationship between the parties Certainty Disposal of property by the survivor breach of agreement could be restrained by injunction in the lifetime of the survivor; Walters v Olins [2008]. An inter vivos transaction (even if intended to defeat the promise) NOT a breach UNLESS: o it is, in substance, a testamentary transaction; Palmer v Bank of NSW (1975); Barns v Barns (2003); Maria Vittoria Fazari as executrix of the estate of Domenico Antonio Cosentino (dec) v Cosentino [2010]. o The transferee continued to live in it and pay the rates and charges and, if done with intent to defeat the agreement, is sufficient to constitute a breach; Bauer v Hussey [2010]. Forms part of the testator's estate at death, so available under family provision legislation; Barns v Barns (2003).

Testamentary Contracts:

In writing if they deal solely with an interest in land. The benefit due is part of the estate on death and is available for an order under the Act; Barns v Barns (2003) (HC). Contracts to leave certain property by will. Inter vivos disposal of property breach damages ONLY IF the intended B is AWARE of the breach. o Damages < value of property, by reason of acceleration of the benefit and may now have to be discounted to allow for the potential of a Family Provision Act claim on death that would reduce the estate; Barns v Barns (2003). Equitable relief (i.e. injunction, available against TP in receipt of that property, provided they are not a purchaser BFFVWoN; Synge v Synge [1894]. Contracts to make a will. Distinguish between: 1. a contract to leave a SPECIFIC GIFT and

Lecture 4 NATURE OF A WILL intended B can claim as a creditor in the estate if there are insufficient assets to meet the gift, or
the testator has otherwise disposed of the gift; Schaefer v Schumann [1972].

2. a contract to leave the WHOLE OR A SPECIFIED SHARE or legacy of the testators property. Intended B is at the risk that the testator will dissipate the estate during lifetime or the estate
will be insolvent; Palmer v Bank of NSW (1975). However the testator cannot enter into other transactions which defeats the promise, as the promise is that the only testamentary transaction is a will in favour of the promisee; Palmer v Bank of NSW. NB: T and intended B can always covenant that the testator will not dispose of all or some of his or her property inter vivos. Contracts not to revoke a will. T always free to revoke their will but may commit a breach of contract if revocation occurs, thus leading to damages and possible equitable remedies; Synge v Synge. A contract not to revoke is not breached if revocation occurs by operation of law, e.g. marriage s.12 of the Succession Act. See Re: Marsland; Lloyds Bank Ltd v Marsland [1939]. o BUT if the promise can be construed as a promise to leave property by will in any event, then revocation by operation of law will constitute a breach; Robinson v Ommanney (1883).

Estoppel:

Even in the absence of a contract, a testator may be estopped equity could impose a constructive trust over the estate in the hands of TP. Need to show: 1) promise was made; 2) intended to be relied upon; 3) was in fact relied upon; and 4) an unconscionable result would arise if the promise to leave property was not made good in light of the detriment sustained; Gillett v Holt [2001]. o Gillett v Holt [2001]: an express promise made by a person to leave their property upon death to another may give rise to an estoppel if a disposal of property inter vivos due to a change of their mind would in the circumstances be unconscionable. o The representation need not be a precise and clear statement. Enough that it was reasonable for the representee to rely upon those statements and conduct and there was in fact reliance. Reasonable? objective test. Once this occurs a proprietary estoppel is established. It does not matter that the representor did not intend the statement to be relied upon or did foresee the particular act of reliance; Thorner v Major [2009] 1 WLR 776. Must be certainty as to the property BUT not necessary that the property remain fixed over time sufficient that the property is identifiable; Thorner v Major [2009]. There must be evidence of representations by T for proprietary estoppel to be established against him.; Hampson v Hampson [2010] NSWCA.

Delegation:

No longer applies to a Will of a person who dies after 1.03.08. SA2006, s 44:

Lecture 4 NATURE OF A WILL

A power or a trust to dispose of property, created by will, is not void on the ground that it is a delegation of the testators power to make a will, if the same power or trust would be valid if made by the testator by instrument during his or her lifetime. If the testator died before 1.03.08, T could not delegate to another his testamentary powers the non-delegation rule. o Exception: WRT charitable gifts; Chichester Diocesan Fund v Simpson [1944]. o Exception: non-charitable gifts where there is a gift of a power of appointment in the will. A power of appointment must be distinguished from a trust. Trust: T holds property on trust to divide it among a certain class of persons. Thus T is compelled to carry out the trust. A power of appointment: merely gives the holder of the power the right to select possible Bs either with or without limitation. The holder cannot be compelled to exercise the power and if not exercised B gets nothing. There are 3 types of powers of appointment: 1. General A general power allows the holder to appoint anyone including him or herself. A general power is valid as it amounts to complete ownership of the testators property by the person holding the power; Tatham v Huxtable (1950) 81 CLR 639. It is permissible to give the power to Ts of a valid pre existing trust where those Ts have power to distribute to the world at large; Gregory v Hudson (1998) 45 NSWLR 300. 2. Special A special power only allows appointment from a limited class of persons. A special power is valid only if the class of Bs from the appointment is sufficiently defined and ascertainable; Tatham v Huxtable and Chichester Diocesan Fund v Simpson. 3. Hybrid A hybrid power allows appointment of any person except named exceptions. A hybrid power is not valid in NSW (but valid in the UK) as neither general as to amount to ownership and too uncertain as to the class of persons who can benefit; Horan v James [1982] 2 NSWLR 376. But this decision has been doubted in Gregory v Hudson.

Exceptions in equity to the rule against assisting volunteer Morris v Handley (NSWSC, Young J) Equity will assist a volunteer in these cases: 1. Fully completed trust or a resulting trust: Ackroyd v Smithson (1780); Corin v Patton (1990). 2. Donatio mortis causa: Duffield v Elwes (1827). 3. In the expectation engendered by the purported donor, volunteer spends money on property: see Dillwyn v Llewelyn (1862). 4. The principle does not apply where the contest is not between the donor and the volunteer, but between two volunteers or the volunteer and a third party: Holt v Bishop of Winchester (1694). 5. The rule in Strong v Bird (1874).

Lecture 4 NATURE OF A WILL

6. Where a volunteer has a power which he wishes to exercise and does as much as he can to exercise but is thwarted by circumstances from exercising it in due form: see Montague v Bath (1693), where the Court said that if a person has a power which can only be exercised in front of four Privy Councillors and the principals sent him to Jamaica where there are no Privy Councillors, equity will allow the person to exercise the power informally even though he is a volunteer. 7. When declining to do so would be against the conscience of the defendant, who would be taking advantage of his own wrong; see Gilbert's Lex Pretoria at page 306.