See Hyland v Hyland (1971) 18 FLR 461 (NSWCA) and the Domicile Act 1982 (Cth) s 10.
13 The question is a question of fact. A person who has left the State for the purpose of work with family remaining in the State is in one plight. The Court would need to consider whether that person intended to stay in the new State indefinitely. However, where one has a case of a person selling up his residence in New South Wales and buying a new residence in Queensland indicating that he intends living in Queensland, then even though he was only in Queensland as a permanent resident for two weeks, there is sufficient evidence to find that on the balance of probabilities he had acquired a domicile of choice in Queensland as at the date of his death and I so find.
14 (2) In Balajan v Nikitin (1994) 35 NSWLR 51, Windeyer J held that despite the claim in s 11 of the Family Provision Act 1982, there was no jurisdiction in a New South Wales court to make an order under that Act affecting immovable property outside New South Wales where the deceased was domiciled out of New South Wales.
15 The nexus with New South Wales in the instant case is stronger than in Balajan. However, in that case Windeyer J plainly said at p 61 that the only possible nexus could be property in the jurisdiction or domicile of the deceased in the jurisdiction at the date of death, though cf Master McLaughlin in Beffer v Steed 17.12. 1996, unreported BC 9606094.
16 In the instant case the Court is limited to the New South Wales personalty owned by the deceased at his death and the property into which it has been converted since then.
17 Mr Wilson for the Trustee said as to the problems caused by the Queensland domicile he did not want to "win on this point". Unfortunately, he cannot avoid winning the case on this point and it is a great shame that this point was not put into prominence earlier so that the proceedings could have been brought under the Queensland Act in Queensland and then perhaps cross-vested to this Court so that the one Court could deal with all the deceased's property.
18 It should be noted that under the Queensland Succession Act 1981, s 41(8), applications may be made for the family provision if filed within nine months from the date of death of the deceased with a provision for the court to extend time in proper cases. The Queensland statute does not permit resource to notional property.
19 (3) The evidence on the question of the cheque was given by the defendant. She says that when the deceased was in hospital in January 2002, he said to her, "I am worried about the money in the bank. There is about 1.2 million. Take the money out of the bank and hang onto it. I am running out of time. I want the money from the sale of Chapel Street which is due to go into the bank this week taken out for you and the boys." The deceased said, "Ring the bank and ask them to send me forms to arrange to have all our names put onto the account as well, just in case something happens before we get a chance to draw the money out." The defendant said the bank where the signatures were held was a branch of the St George Bank in Sydney and the nearest branch to where the parties were living was at Kippa Ring about an hour's drive away from Bribie Island. She says that on about 25 January her father said that it would be best for a new account to be opened into which the money could be put. The defendant and Carrington went to the Bribie Island branch of the Commonwealth Bank and opened a joint account.
20 Later that month the deceased said, "Write a cheque and clear the money out of the bank". The defendant says that on 2 February 2002, the deceased drew a cheque in favour of Carrington and herself in the sum of $650,000. He had previously said, "That money from the sale of the house is going in this week. You'll have to get that out. Get the forms from the bank I want you to have a home. I want Allan to have a home and I want Cary to have a home. I want you to own the properties in the three names. It will be your home but if you want to sell you will have to get the permission of your brothers." On 5 February, that is, one day after the deceased's death, the defendant and Carrington deposited the cheque for $650,000 into their Commonwealth Bank account at Bribie Island. The cheque was paid. The money was transferred into an interest bearing deposit with the Commonwealth Bank on 20 March 2002. Since then part of it has been used to purchase two properties in Robina in the Gold Coast hinterland which have been placed in the names of the male plaintiff, the defendant and Carrington as tenants-in-common.
21 Although these facts will be dealt with in greater detail under heading (4) of these reasons, I should note that Allan is a person suffering from schizophrenia who has appeared by his tutor. The defendant and a friend of the defendant's, the tutor Sandra Brennan, have cared for Allan for some time. What was contemplated was that the $650,000 would be used to buy a home which would be in the control of the defendant but on condition that she looked after her brothers, particularly Allan. It would seem from the discussion during argument that the prevailing view amongst counsel was that the condition was a Gill v Gill (1921) 21 SR (NSW) 400 type condition, that is, not a condition of forfeiture but one that if not fulfilled, could be invoked by at least Allan to gain equitable relief against his sister.
22 However, the question is whether the $650,000 cheque was an imperfect gift so that despite the innocent error of the bank in honouring it, the $650,000 still forms part of the estate. It was agreed between counsel at the beginning of the case (that is at a time before the domicile question was raised), that if it became necessary to deal with notional property, the $650,000 should be treated as notional property.
23 However, by parity of reasoning with Re Keene (1967) 86 WN (NSW) (Pt 1) 317 at 319 (approved on appeal by the High Court as Cope v Keene (1968) 118 CLR 1), as the cheque had not been cleared as at the date of death, it formed part of the actual estate able to be affected by an order under the Family Provision Act 1982; see Barns v Barns (2003) 214 CLR 169.
24 The principal authorities at least at first sight appear to be unanimous that a gift of a cheque, if not presented before the date of death of the deceased, is an incomplete gift and equity will not assist the donee to recover the payment; see eg Hewitt v Kaye (1868) LR 6 Eq 198 at 200; Re Beak's Estate (1872) LR 13 Eq 489 at 491 and Re Swinburne [1926] 1 Ch 38 at 41. This, however is not the full story.
25 The present is not a case of donatio mortis causa. It is either an out and out gift or not. There is an article by a Mr Winder, an English barrister, Requisites for Transference as Donatio Mortis Causa in (1940) 4 The Conveyancer and Property Lawyer (NS) 382. At 413, Mr Winder says that cases where a banker pays in ignorance of the death of an intending donor have never been decided, but there is a line in the judgment of Lord Loughbrough LC in Tate v Hilbert (1793) 2 Ves 111, 118; 30 ER 548, 551 that if a banker pays a cheque before being appraised of the death of the drawer, "I am inclined to think, no court would have taken it from her".
26 I must pay regard to the fact that whilst the inherent nature of a cheque has not changed from when the cases I have cited were decided in the second half of the 19th century, in practice there are now more commercial attributes of a cheque which makes E M Pollock MR's statement in Re Swinburne that a cheque is "merely a mandate or authority in the hands of the holder of the cheque to go into the bank and get the money from it", now rather inadequate. The Cheques Act 1986 (Cth) makes it clear that the mere drawing of a cheque is not an assignment of funds (s 88) but a cheque is an unconditional order in writing (s 10) and the Act makes the financial institution compellable to pay it.
27 Under s 90 of the Cheques Act there must be notice of the drawer's death to the financial institution, and even then a cheque that is received by the financial institution within ten days of notice of the customer's death which has not been countermanded by the executor or a beneficiary, is able to be paid. This would seem to me to reinforce Lord Loughbrough's dictum in Tate's case.
28 Furthermore, cheques are now regarded in the community as being almost equivalent to cash. For instance in George v Cluning (1979) 28 ALR 57 at 62, Mason J said:
"… The practice of giving and accepting personal cheques in payment of debts and liabilities is now so widespread that there is a general expectation on the part of persons making payments that a personal cheque, given in payment of a debt or liability, will be accepted unless the payee objects before or at the time of receipt that the cheque does not constitute legal tender. …"
29 It may well be today that if parties behave in a way that they intend the cheque to constitute payment or a gift, that one may have to read down utterances in some of the older cases.
30 This would be consistent with the approach taken by the Privy Council in T Choithram International SA v Pagaroni [2001] 1 WLR 1, where Lord Browne-Wilkinson said, when giving the judgment of the Board at p 11:
"… It is necessary to make an analysis of the rules of equity as to complete gifts. Although equity will not aid a volunteer, it will not strive officiously to defeat a gift".
31 It must always be remembered that the rule that equity does not assist a volunteer is not a complete statement of the law and is only relevant if the donee requires the assistance of a court of equity in order to gain the property. Where the donee has gained the property (at least where he or she has not done so illegally), then there is usually no equity in the donor to recover back the monies; see Djordjevic v Djordjevic, Simos J [1999] NSWSC 1223, [103]; BC 9909152. No-one has submitted that any common law restitutionary action is available to the estate.
32 Before departing from this point I must deal with the rule in Strong v Bird (1874) LR 18 Eq 315. To state it in an oversimplified form, the rule in Strong v Bird is that if a testator intends to make a gift but does not make a complete gift before his or her death and still has the intention of making the gift at the time of death and appoints the donee his executor, then equity will assist the donee; see Re James [1935] Ch 449 and Cope v Keene (1968) 118 CLR 1.
33 There are two objections going to why the rule in Strong v Bird does not apply to this case.
34 First, the payment was made not just to the defendant as executor but to Carrington and herself jointly. The principle applies where the debtor or donee constituted one of the executors of the testator: Re Pink [1912] 2 Ch 528, 535. Does it apply where there are two donees and only one is appointed an executor? I do not know of any authority on this point (though the fact situation occurred in Anning v Anning (1907) 4 CLR 1049 which was not a Strong v Bird case). On first principles, it would seem to me that one always treats a joint gift as a gift of the whole to each of the joint donees, though as between themselves they will be liable to make contribution to each other. Accordingly the rule in Strong v Bird should apply, provided all other relevant factors are favourable.
35 The second matter is that there is some suggestion in Newfoundland that where the donee is to hold the gift on trust the rule in Strong v Bird does not apply; see Re Halley (1959) 43 MPR 79 (Maritime Provinces Reports). The decision in Re Halley is cited in Meagher, Gummow and Lehane 4th ed [29-035] with approval and the reasoning of Winter J is unassailable, that is, that Strong v Bird only applies where the beneficial interest is given to the person who is made the executor.
36 However, in the instant case the beneficial interest does pass to the executor (and Carrington), but subject to a Gill v Gill equitable condition.
37 My view is that the rule in Strong v Bird should not in this 21st century be extended at all. There is a comment made in a footnote by Gummow J to his judgment in Hill v Van Erp (1997) 188 CLR 159 at 228, footnote 304, which Meagher, Gummow and Lehane read as expressing the probability that the High Court will review Strong v Bird. I am bound to apply it, but as I say, it seems to me the prevailing view is that it is an anomalous rule and should not be extended. As Re Halley does not apply it where the donee is a mere trustee, in my view it would be appropriate not to apply it where there is a Gill v Gill condition so that the whole beneficial interest is not taken by the donee in a real sense.
38 In any event, as Kitto J pointed out in Cope v Keene (1968) 118 CLR 1 at 9, even if the rule in Strong v Bird does apply the property still forms part of the estate. The donee has an equitable claim against the estate, but this might be defeated by a claim under the Family Provision Act 1982; see Barns v Barns (2003) 214 CLR 169.
39 It should be noted that Diane Skapinker in her essay on Equitable Assignments in Parkinson Principles of Equity 2nd ed (Law Book Co, Sydney, 2003) p 482 points out that if a donor manifests an intention to assign legal property and takes all steps towards an effective legal assignment that only he or she is capable of taking, then equity may consider it inequitable to allow the donor subsequently to refuse to perfect the gift and that in some cases this principle will prevail over equity's disinclination to assist volunteers (p 482).
40 (4) Allan's claim. The facts are that Allan was born in 1964 and is now 41 years of age. He was diagnosed with schizophrenia in 1986 and since then has been on a disability pension. His current pension is $238.25 per week. He is currently living in a property at 25 Eugenia Circuit Robina, Queensland. This was one of the properties that was purchased out of the $650,000, the title to which is in the names of Carrington, the defendant and this plaintiff as tenants-in-common. He also owns in the same way a property at 18 Eugenia Circuit as a one-third owner as tenant-in-common with his brother and sister. He has about $31,000 capital held on trust for him by the New South Wales Dust Diseases Board. His income only just covers his expenses. At present, Allan is well looked after by the defendant and her friend Ms Sandra Brennan. They spend about 12 hours a day caring for him. A/Professor Petchkovsky , the Director of the Psychotherapy Programme at the Gold Coast Hospital Robina Campus, has said that Allan's periods of independent living can only be sustained because of his sister. He would need care of at least $24.50 an hour for 12 hours a day for the rest of his life if he is to be outside an institution, but the probabilities are that over the next ten years he will deteriorate to the point where he will need full time care. If he goes into full time care in Queensland then currently, as he has more than $27,000 worth of assets, he would need to pay a capital guarantee of about $150,000.
41 Evidence was presented on behalf of Allan from a Ms Bell who put herself forward as a rehabilitation consultant. I find her evidence of virtually no use. Although she had said she had read the Code of Conduct for Expert Witnesses her material showed very great bias towards putting forward the maximum claim for Allan and she had completely ignored the report of A/Professor Petchkovsky. She was putting forward figures at the rate of $452 a week for full time care for the rest of Allan's life.
42 I am not at the moment dealing with a claim for personal injury as a result of negligence.
43 If I were trying such a case it may well be that proper compensatory damages would be 3 or 4 million dollars. What I am doing is to ask myself what in all the circumstances would be proper provision for a person who is either going to be cared for by his relatives or else in institutions and that in the light of all his other calls on his bounty what provision would the community have expected the testator to have made for Allan.
44 There is no doubt, and everyone acknowledges this, that Allan's claim is paramount.
45 Mr Locke says that the estate which I have assumed to be approximately $700,000 would be wholly absorbed in partially meeting Allan's needs. Indeed he says that the notional estate should also be used for that purpose.
46 Mr Locke further says that I should not assume that Ann Darcy and Sandra Brennan would be able to look after Allan for very much longer and that accordingly the best care for him would be home care at, according to Ms Bell's figures, $452 a week. Mr Wilson for the defendant on the other hand says that the testator's plan was to provide accommodation for Allan and to prove a home for him by having real estate purchased which would be managed by Ann Darcy and Carrington and in which Allan would have a legal interest, and that he would be cared for by his family, and that the probabilities are that this will continue for at least another five years. At the end of the five years, or at least in 10 years' time, it will just be impossible for Allan's condition to be able to be treated at home and he will have to go into full time care at which stage his $150,000 can be met by the sale of one of the Robina properties in which Allan has an interest.
47 If I were to do nothing, assuming that only slight or no adjustment were made for the female plaintiffs, Allan would receive in addition to the $216,000 he had already received from the $650,000 cheque a further sum of $240,000.
48 I have not been favoured with any material to show how this capital sum would affect Allan's pension. However, as any order being made under the Act would have to increase this sum rather than decrease it, the same problems would apply one way or the other.
49 I believe as I have already hinted, that the probabilities are that family connections will be sufficiently strong and the amount of income from the estate sufficiently large to provide Allan in-home care in the next five years or so without making any adjustment. After that, Allan's health will be such that he will go into permanent care, that will involve a deposit which can be paid out of his capital assets. This is not a case where provision should be made for full time nursing care for the rest of his life at home.
50 Accordingly, if I had jurisdiction I would dismiss Allan's application, but as it was appropriate for it to be made, I would order that the costs be paid out of the estate.
51 (5) Lorraine's claim. Lorraine is a single woman without dependants who lives at Cooks Gap about 35 kilometres out of Mudgee. Her assets are her home valued at $75,000, a motor vehicle worth $3,000 and three cows valued at $1,500. She was left a legacy of $30,000 under the will and she still has $22,000 left of this. It was wise for her to put aside this sum in case she has to pay her own legal costs or other expenses after this case has finished.
52 She says that she owes a friend, Maria, $40,000. She said this in the witness box, but her evidence contains no corroboration. She says that Maria would give her gifts of money over a long period of time and would also pay her bankcard bills for her. One would have thought at the very least I would have had a copy of the bankcard bills and an affidavit from Maria as to what amount had been lent, or at least verifying the amount. I would also need to have some assurance that the alleged loans, presumably being loans repayable on demand, were not more than six years old. In the absence of this material, even though there is no contradictory evidence (there could not be any because it is all a matter known only to Lorraine Blackett and Maria), the amount of any legal debt must be very rubbery.
53 When challenged, Mr McGrath did the best he could by saying that the fact that some monies were owing to Maria was not put in issue during cross examination and that judges would get upset with barristers if they spent time putting forward details of peripheral matters. The answer to this last submission is that it is a matter for counsel using their professional expertise to assess what matters need to be put before the court and in what detail and that it is clear that where there is a rather nebulous claim being made by a client, that Judges almost always look for some corroborative detail.
54 Lorraine says that her accommodation is of a poor standard. This is doubtless true. She is living in a prefabricated one-bedroom unit. She has no town water, gas or electricity, no sewerage, no septic system. Her water comes from a gravity-fed tank filled from a bore by a very old windmill. She has a disability pension of $238.25 per week which is wholly used for food for herself and her pet greyhounds. She says if it were not for Maria she would not be able to carry on her daily living.
55 She asks for some $400,000. Basically this is made up of $160,000 to complete her house, $40,000 to repay Maria, $150,000 for contingencies and $50,000 for a new generator, water tank and to install the electricity. What might be thought to be essential items of comfort on my calculations would be approximately $41,000.
56 Lorraine Blackett's health is not too wonderful, but there is no need to delve into detail.
57 There was little contact between the deceased and Lorraine prior to about 1999 when the deceased was ill. The defendant notified Lorraine to inform her that her father was to have an operation from which he was not expected to survive. After discharge from hospital the defendant said the deceased said to her, "I have heard from Lorraine. She rang me but she was often drunk when she rang. We had some arguments over the phone over money on different occasions." He appeared upset. The deceased said, "Lorraine first started hassling me for money about a year ago to get false teeth. I gave her approximately $2,000 for her new teeth. Then she asked me for money for electricity and heating." He asked the defendant what she thought he should do about Lorraine. He said, "I am angry with Lorraine, as she is so greedy and blatant about her intentions. She said 'I will need $20,000 instead of the $8,000 for the electricity." He said he told Lorraine he could not afford it. He said he told Lorraine she could have $8,000 cash for electricity and she would have to come up with the rest. The defendant said, "Dad why don't you just give her the $20,000 if it's stressing you so much. She is your daughter!" to which the deceased replied, "No, because she would only drink it all up at the hotel and she would want more money when I'm gone."
58 Lorraine says that the deceased did visit her in hospital in 1983 when she was having an operation for cervical cancer. She said his second wife Margaret did not like her at all. Margaret passed away in 1998 and the deceased started to get in touch with her more. She denied that she was given anything more than $500 for her denture bill with the deceased saying he would go halves with her over it. She said that the deceased did say that he would pay to get the power on but later changed his mind. She denies hassling him for money.
59 She stayed with her father for about two weeks prior to taking a job as a jillaroo about 30 years ago. She visited him in hospital in 1999, but at no stage was she financially dependent on him since she left school.
60 Another strange thing about the evidence was that although the evidence of the defendant which was not objected to, was that the deceased formed the view that Lorraine was often drunk and if he gave her too much money she would only drink it, not one word is said in denial of this in Lorraine's affidavit. Again, this was endeavoured to be explained away on the basis that counsel don't like irritating judges by giving them too much detail. However, the point was not a minor one and I would have expected there to be at least a denial.
61 Mr McGrath sought to justify his approach by reference to Hughes v National Trustees etc Ltd (1979) 143 CLR 134 especially at 138. In that case it is true that Barwick CJ said that failure to deny the testator's assertion was not an admission, but he went on to say that "it would be strange … if the tribunal of fact did not probe the evidence to elicit an applicant's evidence as to the asserted facts". The applicant here declined even to comment.
62 The case is a borderline one because Lorraine is not in good health; she is not earning much income; she is in very humble accommodation; she does not have what most Australians living in the city would have thought were the basic necessities; she is the daughter of a man who died with an estate of between $713,000 and $1.35 million depending on how one looks at it. On the other hand, as is conceded, her brother Allan has a claim of greater priority and she has had minimal contact with her father over a long period of time and her dependency is very slight.
63 I believe that despite what Mr Wilson has said about lack of contact that the community would expect in the circumstances a testator to have provided Lorraine with at least sufficient funds to give her the basic necessities of life, which on my calculations from the evidence is about $42,000. She has spent $8,000 of the $30,000 she has already received and it appears not to have been spent wastefully. Accordingly, increasing her legacy from $30,000 to $50,000 would enable her to provide for the basic necessities of water, electricity and a septic tank and I do not consider that an increase of $20,000 (plus costs which would be capped at an extra $20,000) would detrimentally affect Allan.
64 (6) Jocelyn Goninan. The facts in Jocelyn Goninan's case are not far removed from those of Lorraine Blackett. Mrs Goninan is married but her husband is on a disability pension of $195.20 per week and she herself receives a partner's allowance of $175.75 per week. She owns a half interest in a home at 1355 Springs Road, Cooks Gap, the whole property being worth about $120,000, some motor vehicles valued at $13,000 and a small amount of shares. She owes a debt of $5,000 on her vehicles. She has $16,000 left of her legacy of $30,000. Her income, together with that of her husband, is just adequate, but she will need dental work and new glasses. She also seeks about $250,000. She wants to add an extra room to her house. She wants $20,000 for dental work; $20,000 for a car; $2,000 for a holiday and $100,000 for contingencies. Again, she is very weak on detail, especially so far as the dental work is concerned.
65 Again there was minimal contact between the deceased and Jocelyn between 1984 and 1999. However, he did send her a Christmas card and a cheque for $300 for Christmas in 2000. She did visit him in hospital in 1999. She was never financially dependent on the deceased during her adult life. She said she once asked him for a loan of $1,000 for a fortnight and he said he could not afford it.
66 I should say that although the deceased died with an estate and notional estate of over one million dollars, he came into his money late in life because of a dust diseases claim and the sale of his house at Rockdale which he had used, it would seem, as a boarding house.
67 There are not sufficient funds in the estate without prejudicing Allan to give the this plaintiff very much, if anything. However, it seems to me that although there are some respects in which her case is stronger and some respects in which it is weaker than Lorraine's, a wise and just testator would have treated them both equally. Again, I would increase the legacy to $50,000 with costs capped at $20,000.
68 I do not consider that the extra $80,000 being paid out to the female plaintiffs will detrimentally affect Allan's position as the principal person whom the testator should have had in mind.
69 (7) I should make some observations about the value of the estate and costs.
70 It is the duty of the executor to supply the Court with full information as to the value of the estate. I do not have that in the instant case. At one stage I considered that I should order that the executor file accounts in the usual probate form. That is, a full account of her stewardship both as to capital and as to income. She has not properly accounted in any piece of paper that I have seen for the income that has been earned by the estate. I have no up-to-date figures as to the real value of the Bribie Island property in which the testator lived for a couple of days before his hospitalisation prior to death. I have no proper figures for the income tax that has been paid or was payable on the estate. I have no figures as to what capital gains tax might be payable on a distribution as it was not made within 18 months of death. I have no split-up between the legal costs of administration and the legal costs of the defendant in defending these proceedings.
71 I did not, in the end, take this course because the evidence quite clearly showed that, so far as the female plaintiffs were concerned, the only ones who would really be affected, the evidence did not justify more than making a nominal order if that, and I did not want to incur unnecessary expense. However, I repeat as I have many times over the last 20 years, that the Court does expect full and proper information about the size of the estate. It is only then that it can properly make an assessment of how the testator should have made provision for the various persons who had claims against the estate.
72 The other matter that I must mention is costs. In accordance with the practice, each solicitor handed up at the beginning of the case an estimate as to costs. The solicitor for the female plaintiffs said that the costs to 27 January were $35,000 including filing fees, counsel's fees and court fees of $11,700 and that he estimated for a two day hearing, a total of $56,300. The solicitor for Allan puts his costs at $42,150, of which $23,650 are disbursements including counsel's fees.
73 The defendant's costs are estimated at $118,000, but it is not at all clear as to how much of this is a statement of the costs of administration and how much is the cost of the proceedings. Certainly, if even half of that sum was claimed to be costs in the proceedings, I would not be willing to make an order out of the estate for the costs without sending the matter to a costs assessor or getting some actual evidence as to what was done because a defendant's case where all the beneficiaries are close members of a family should not incur costs anywhere near $100,000 and expect them to be paid out of the estate. It would be a different matter if only the defendant and Carrington were the beneficiaries, but where part of the costs are to be paid out of the monies that would pass to a schizophrenic son, the Court must be very careful.
74 I would thus not be prepared to make an open ended order for costs of the defendant. She is entitled to costs on the indemnity basis, but in view of the sparse information on the state of the estate, it seems hard to justify costs more than 50% higher than the female plaintiffs. That 50% barrier would be $85,000. I will allow a further 15% for error, but, unless I have better material, I would cap the defendant's costs and fees at $100,000.
75 I will set out the form of the orders and then stand the matter over to a time convenient for counsel to take in formal minutes of the order. However, if everybody consents I will take in a consent order sent to my Associate by mail or DX.
76 In 5472/02: