Ford v Simes

36 The appellant's purpose in seeking leave to adduce this additional evidence was to challenge the whole basis on which the trial proceeded (and the judgment was delivered) that the estate had been fully distributed. The fact that the estate had been fully distributed meant that the appellant was required to establish that there were other special circumstances justifying the making of an order designating the distributed estate as notional estate under s 28(5)(d) of the Act. If the appellant had been able to show that the estate had not been fully distributed then this burden of proof would not have been imposed on him. 37 The respondent claimed that her duties as executor were completed by 20 June 2004. The correctness of that submission is questionable because of the apparent need for the executrix to attend to the filing of tax returns in respect of the rental income that would have been received in respect of the properties. However the respondent's solicitors believed that the respondent's executorial duties were completed by 20 June 2004 and they advised the respondent that when the Transmission Application was registered the properties were transferred into her "sole name" as "beneficiary".

38 The so-called "additional evidence" would raise the issue of what an executor/sole beneficiary is required to do in respect of the transfer of real property to himself or herself. On the one hand there is the proposition that when the executorial duties have been completed, the executor/beneficiary is required to make a declaration in registrable form that the real property is no longer held as executor or executrix but as beneficiary. Section 11(1) of the Trustee Act 1925 (NSW) provides:

(1) If any property is vested in any person as executor of a will under which the person is the trustee of the property or is beneficially entitled thereto, such person may, at any time after all the executorial duties with respect to the property have been duly performed, declare by registered instrument in writing that he or she has ceased to hold the property as executor and that he or she holds the same as trustee or as beneficiary, as the case may be. 39 On the other hand there is the proposition that when the executor is the sole beneficiary such a declaration or separate transaction is not necessary. The respondent submitted that the equitable estate in the properties merged with the co-extensive legal estate held by the respondent/executrix on 20 June 2004 when her executorial duties were completed. It was submitted that such a merger is not contingent upon the registration of a declaration made under s 11(1) of the Trustee Act. In support of this proposition the appellant relied upon a passage in The Law of Real Property in New South Wales 4th Edition AC Millard, BA Helmore, where the learned authors stated the proposition that "where an executor is also beneficially entitled under the will to any property it was doubtful whether he should, after fulfilling executorial duties, execute an acknowledgement or conveyance in favour of himself". The learned authors said at page 136 fn 112:

In an article in the Weekly Notes Covers, vol, XI., No 39, (sic) the opinion was expressed that an executor-devisee should execute a conveyance or transfer to himself, or sign and register an acknowledgement to himself. A Victorian case, Hosken v Danaher (1911), V.L.R. 214, was referred to. But from a logical point of view it is difficult to understand why this should be so. The object of the acknowledgment or conveyance is to vest in the person entitled under the will, the legal estate which is in the executor by virtue of sec. 44 of the Wills, etc., Act. In the case of an executor-beneficiary the legal estate is already vested in him and on completion of the executorial functions he holds, by virtue of s. 47, on trust for himself, and one would imagine that the equitable estate would merge in the co-extensive legal estate. Upon examination it appears that Hosken v. Danaher was a case relating to land under the Victorian Land Transfer Act, 1890 (corresponding to our Real Property Act, 1900). An administrator, who was registered as proprietor of the land as such, obtained an assignment and release from the beneficiaries of their interests in favour of himself, and lodged it, together with a transfer from himself as administrator to himself in his personal capacity, with the Registrar of Titles. The Registrar refused to register the transfer. The Court ( Madden, C.J., and a'Beckett , J. - Hood , J., dissentiente ) held that the transfer should be registered; but from their judgments it appears clear that the judges were considering, not the passing of the legal estate, but merely the effect of the transfer as an appropriate means under the Land Transfer Act of giving the administrator, as beneficial owner, a clear certificate of title. See per Madden, C.J., at pp. 224, 225, per a'Beckett, J., at pp. 226, 227, and cf. per Hood , J., at p. 221. 40 Hodge v Griffiths [1940] Ch 260 was a case in which the deceased's husband, the plaintiff, was the sole beneficiary and joint executor and trustee of the deceased's Will with the defendant, Mr Griffiths. The gift to the plaintiff of the real property in the estate was conditional upon him paying to his sister-in-law £2 per week during her life. In the event that the plaintiff sold the properties he was required to invest £2,000 and pay the income from that investment to his sister-in-law for her life and after her death to her children. The applicable statute, Administration of Estates Act 1925 (UK), provided that a written assent to the vesting of a legal estate was required to be in writing and signed by the personal representative naming the person in whose favour it was given. The plaintiff had not signed an assent. The plaintiff brought proceedings to determine whether in the event of the acceptance of the gift, the Will imposed on him a personal liability to pay his sister-in-law the sums mentioned in the Will. 41 Farwell J concluded that there was a personal liability upon the plaintiff to pay his sister-in-law the sums mentioned in the Will if he chose to accept the gift but that it was open to the plaintiff to disclaim the gift and thereupon he would have ceased to have been under any personal liability. There was then a question as to whether the plaintiff was in a position to disclaim the devise. Farwell J said at 264-265:

It is said in the first instance that here the property can never have vested in the plaintiff as beneficiary or devisee because there had been no written assent, and that under the Administration of Estates Act, 1925, s 36, sub-s. 4, such an assent is necessary. In my judgment this is not the true view. No doubt under the Act if a vendor is selling as beneficial owner taking under a will, the purchaser is entitled to require a written assent in order that he may be satisfied as to the title; and the Act gives him the right to demand it, but in a case of this sort the position is not the same. The legal estate in the property is vested in the plaintiff as legal personal representative and there is therefore no difficulty with regard to that. His equitable interest as devisee depends upon equities and upon whether or not he has done acts which must be treated as amounting to sufficient evidence of assent so as to make it impossible for him now to say that he has never accepted this gift.

There is sufficient evidence, in my judgment, to show quite plainly that he did accept this devise and has in fact treated himself as the owner in equity of the property, as distinguished from ownership as legal personal representative. 42 In Re Thorne v Sherson's Contract [1920] V.L.R. 50 was a case in which the deceased had left his property to his widow and also appointed her as sole executrix. The widow obtained probate and died intestate. The administrator of her estate conveyed the land in question and there were subsequent changes in ownership of the land. A subsequent purchaser claimed that the legal estate had been outstanding since the widow's death because she only held the land as executrix of the deceased and that it never passed to her in her own right as devisee, and therefore never passed to her administrator. Mann J said at 54-55:

Now, in the ordinary case, where the executor and the devisee are different persons, it would appear to be necessary, in order to vest the legal title in the devisee, that there should be a conveyance by the executor to the devisee: In the Will of Allan [1912] V.L.R. 286.

In the present case, the executrix and the devisee being one and the same person, is there anything in the common or statute law requiring that for purposes of conveyancing the two sources of title should be kept distinct after the grant of probate?…It has never been held, so far as I can find, that it is necessary for an executor-devisee to convey to a trustee to his (the executor's) own use, in order to rid himself of the character of an executor, or to enable him or his representatives to make a complete title under the will. 43 His Honour concluded that there was nothing in the Administration and Probate Act 1915 (Vic) to prevent the legal and equitable estates in the lands in question, "which united in" the widow from the grant of Probate of the deceased's Will passing upon her death to an administrator of her estate. 44 The 6th Edition of Millard includes the following at page 135:

Where an executor is also beneficially entitled as devisee under the will to any real estate, having regard to the fact that the legal estate is already vested in him by virtue of the Wills, &c., Act, it is questionable whether any form of assurance is necessary to vest it in him as beneficiary. Quite a controversy has raged on this point, and many authorities favour the view that a conveyance or acknowledgement is necessary. The present editor takes the view that, as the executor-beneficiary already has the legal estate vested in him, on completion of executorial duties he holds, by virtue of section 47 of the Wills, &c., Act, on trust for himself, and his equitable estate as beneficiary merges in his co-extensive legal estate. Consequently it is a matter of evidence only as to whether executorial duties are fulfilled or not. 45 The editor referred to In Re Thorne v Sherson's Contract and Hodge v Griffiths as support for his view. In the present case Senior Counsel for the respondent embraced the above-mentioned proposition that the respondent, as executrix, could hold the property on trust for herself but abandoned that proposition during submissions. The "controversy" to which reference was made in this passage from Millard included competing views of practitioners published in the Australian Law Journal. 46 A contrary view was expressed by a reviewer (SA Thompson) in the Australian Law Journal ((1930) 4 ALJ 185) who said: It is difficult to see how, in the case of realty, merger could operate without some definitive act on the part of the executor establishing the executorial duties had been fulfilled.

Certainly, for the purposes of proving title to land, a conveyance or acknowledgement, or some registered equivalent such as the declaration now provided for in s 11 of the Trustee Act, 1925, would be much more satisfactory than a mere assent, which might be no more than an inference drawn from the executor's conduct.

47 In reply (appearing at p 258 of the same volume) Mr BA Helmore said that whilst personalty had always required some evidence of assent it was "unnecessary" in relation to realty. Mr Helmore submitted that merger would automatically follow in relation to realty by virtue of s 47 of the Probate Administration Act 1898 (NSW), but agreed that an executor could utilise the procedure under s 11 of the Trustee Act, but that such a document would be evidentiary only, and not translative.

48 In Re Heberley (Deceased) [1971] NZLR 325 the New Zealand Court of Appeal (North P, Turner and Haslam JJ) considered an appeal from a judgment in which the Trial Judge had ordered provision for two grandchildren of a testator under the Family Protection Act 1955 (NZ). One of the appellant's grounds of appeal was that the estate had been completely, or almost completely, distributed and that no effective order for provision (or no order for more than $200) could be made. The executor sole beneficiary had become registered proprietor of the relevant real property on an application for transmission in consequence of the death of his co-executor and co-trustee. He had not executed a memorandum of transfer and remained on the title at the time of trial by reason of the application for transmission. 49 Turner J said at 333:

I have noticed that in his well-known work on the Land Transfer Act at p 282 Mr E C Adams observes that "the better practice is for the executor or administrator to transfer to himself as beneficiary"; but he seems to me careful not to say that this course is necessary . And Mr Baalman in his Commentary on the Torrens System in New South Wales (1951) refers at p 327 (while discussing the section in the New South Wales Statute which enables a registered proprietor to transfer to himself) to the enactment of the section, as validating: "…the practice of an executor transferring to himself land of which he is also the beneficiary, in the mistaken belief that it is the only proper way to remove a Registrar-General's caveat …"

Once an executor-trustee has effectively assented to his own devise or legacy and has finally conveyed to all other beneficiaries everything appropriated to any of them under the transaction in which the assent is given, in my opinion he is functus officio as trustee of the property affected by the trust, and the beneficial and legal estates of the property appropriated to himself vest completely in him. A man cannot be trustee for himself alone. He may be trustee for himself with others, but once his duties to those others have been finally and completely discharged, and he is left with no obligations under the trust but to himself, that trust disappears - Lewin on Trusts 16 th ed 4; Re Cook, Beck v Grant [1948] Ch 212; [1948] 1 All ER 231; Re Annett (Supra) . (emphasis Turner J) 50 The appellant accepted that on the application for the Court to receive additional evidence, it is usual for three conditions to be satisfied. The first is that the additional evidence must be appropriately credible. There is no issue that the Transmission Application would satisfy that condition. 51 The second condition is that the proposed evidence would give rise to a high probability of a different judgment or order: Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 at 444; Foley v Ellis [2008] NSWCA 288 per Basten JA at [7]. If the evidence were available the Court could reasonably take the view that s 11 of the Trustee Act is merely permissive and not mandatory for the properties to have vested in the respondent beneficially. In the state of the competing views outlined in the authorities referred to above, I am satisfied that the appellant has not satisfied this condition. He has not shown that it is highly probable that there would have been no need to establish special circumstances pursuant to s 28(5)(d) of the Act.

52 In any event the appellant had difficulties with the third condition that ordinarily it must be shown that even with the exercise of reasonable diligence, the evidence would not have been available for use at the trial. The additional evidence was available after the evidence had concluded but before the delivery of judgment. The expression "at the trial" means at any stage of the proceedings when evidence might be received: McIntosh v Williams [1976] 2 NSWLR 237 per Samuels J.A. at 258. The evidence was available at the trial. The appellant made a deliberate decision to hold the evidence of the Transmission Application back from the Trial Judge, thus encouraging a judgment to be delivered on the basis that the estate had been fully distributed. The appellant did not call any evidence in support of his application before this Court to explain why he chose not to make application before the Trial Judge to re-open his case. In all those circumstances leave was refused. Grounds of Appeal 53 As a consequence of the refusal to grant leave to adduce additional evidence, the appellant sought leave to amend his Notice of Appeal to claim that the Trial Judge erred in failing to find the existence of other special circumstances. That leave was granted subject to the respondent being provided with the opportunity to address any additional matters by reason of the late amendment, an opportunity the respondent did not need to take up. The grounds of appeal as argued were, therefore, that the Trial Judge erred:

1. In failing to find special circumstances pursuant to s 28(5)(d) of the Act. 2. In finding (if that is what he did) the appellant had no (financial) need.

3. In finding the appellant had not satisfied the first limb of Singer v Berghouse at 209.

4. In not ordering provision in favour of the appellant.

54 The appellant accepts that he must show that the Trial Judge's decision has miscarried: Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134 at 147; Mulcahy v Weldon [2002] NSWCA 206.

55 Ground 1: Although the Trial Judge did not explicitly follow the steps outlined in the Act of firstly deciding whether provision ought be made before moving to consider whether to make an order designating property as notional estate, no complaint was made about that matter. His Honour referred to the matters in s 27 of the Act that had to be considered in determining whether to make an order designating property as notional estate and, although not explicitly stated, concluded that the substantial justice and merits involved in the appellant's case did not warrant such an order being made. The appellant accepted that a reasonable reading of the Judgment was that his Honour concluded that the appellant may have a case, but not a very strong case for provision; and that the absence of a strong case contributed to the finding of a lack of special circumstances. Although the Trial Judge did not consider each of the claimed special circumstances individually, he did summarize the effect of them, concluding that they "played at the heartstrings". However his Honour was satisfied that the appellant's unilateral abandonment of the deceased, when weighed in the balance, meant that the appellant failed to establish "special circumstances" within the meaning of that expression in s 28(5)(d) of the Act.

56 In respect of the principles in House v The King (1936) 55 CLR 499 at 504-505, the appellant did not submit that his Honour fell into error in taking into account the abandonment of the relationship in concluding that there were no special circumstances, but rather submitted that no reasonable tribunal could reach such a conclusion. The appellant submitted that having found that: the deceased knew nothing about the criminality for which the appellant was incarcerated; there was no prejudice in extending the time pursuant to s 16 of the Act; inferentially that the appellant was a lame duck; the estate was large enough to make provision for the appellant; there was no actual prejudice to the respondent; and not having found that the appellant had no need, there were circumstances sufficient to justify a finding of special circumstances. 57 Counsel for the appellant accepted that the Trial Judge's finding that the appellant abandoned the relationship with the deceased was decisive in reaching the conclusion that the appellant failed to establish special circumstances under s 28(5)(d) of the Act. The appellant submitted that estrangement does not mean that an applicant automatically fails in an application for provision and accordingly it should not mean that an applicant fails to establish special circumstances. In this regard reliance was placed on a number of authorities in which the claimant and the deceased were estranged. 58 Acrimony or estrangement does not necessarily destroy the bonds of parental ties (see Diver v Neal [2009] NSWCA 54 at [27]). The nature of the estrangement and the underlying reason for it is relevant to an application under the Act: Palmer v Dolman; Dolman v Palmer at [88]-[94]. 59 In Wheatley v Wheatley [2006] NSWCA 262, the Court of Appeal increased the amount awarded to the claimant appellant from $78,000 to $168,000. Although the relationship between claimant and deceased was a very hostile one, Bryson JA (with whom Santow & McColl JJA agreed) found that this hostility by the testator went beyond that of the reasonable or hypothetical testator (In re Allardice, Allardice v Allardice (1910) 29 NZLR 959 at 972-973). 60 Bryson JA found that the testatrix was of "an extremely difficult personality" (at [32]) and that: "her disposition and state of mind were far from those of the wise and just testatrix who is brought into consideration for the purposes of family provision legislation." (at [18]). Despite the fact that the relationship between the claimant and deceased was a very rancorous one, and there had been no personal contact for 13 years, there had been continuing telephone communication between them, albeit infrequently.

61 The claimant appellant in Wheatley was an invalid, and following a heart attack, was on a disability support pension and suffered from an anxiety disorder. Bryson JA described his home as "in a state of decay, disrepair and dereliction" (at [11]). Whereas, in contrast, the estate was amply capable of absorbing his claim. Noting these difficulties, Bryson JA said (at [21]): "Mr Wheatley was not in a position to make a good discharge of filial duty: in their own way, his shortcomings enhance his claim". 62 Thus, the nature of his situation in life and the personality of the deceased went some way to explaining the appellant's acrimonious relationship with her. It was material that the deceased was not entirely blameless in the breakdown of the relationship and that some communication was still ongoing between the deceased and claimant. 63 In Foley v Ellis, the appellant claimant was estranged from her deceased mother for four years prior to her mother's death. Nevertheless, there had been sporadic and brief telephone contact during that period (see Sackville AJA at [104]). The estrangement was the culmination of Family Court proceedings in which custody of the appellant's children had been opposed not only by her husband but also by the deceased. Although it could not be said that the claimant was blameless in the breakdown of her relationship with her mother, Sackville AJA acknowledged that it was the product of trauma experienced by the claimant, which was at least understandable in the circumstances (see [47]-[48] and [104]-[105]). Indeed, his Honour went on to say at [111]:

As regrettable and as destructive as the Family Court proceedings might have been, blame for them cannot be laid wholly at the appellant's door, as a reading of Lawrie J's judgment demonstrates.

64 In Diver v Neal the claimant successfully challenged the adequacy of the bequest of $20,000 under the Will and was awarded $60,000 by the Court of Appeal. The relationship between the claimant, who was the step-daughter of the deceased, though somewhat distant or strained, could not be described as acrimonious. Basten JA held at [33]:

This was not, as might be inferred from [the Trial Judge's] reasoning, an ephemeral relationship abandoned long ago by mutual indifference or persuasion. It was a long-standing relationship, the terms of which evolved, no doubt with some weakening of the bonds, as circumstances took them apart. 65 In the last 18 months of the deceased's life, the claimant ceased to have any contact with the deceased (per Basten JA at [49]). The deceased wrote three reasons, signed on the day of his Will, as to why the claimant should not be entitled to any more than what was provided for, all three of which related to the plaintiff's failure to keep in contact with him, and not any hostility or rancour in their relationship. Indeed, the fact that the deceased had left the claimant $20,000 by his Will, provided an acknowledgment by him that there was an ongoing relationship between them (per Basten JA at [31]). 66 In Palmer v Dolman; Dolman v Palmer, the claimant was the daughter of the deceased. She had originally been left out of her father's Will and her claim was dismissed by Macready M (as his Honour then was) by virtue of failing the jurisdictional requirements of s 9(2) of the Act. The Court of Appeal, in finding that the claimant did satisfy s 9(2), awarded her $655,000, from the estate (which, not including legal costs, amounted to between $4-$5 million). 67 Immediately prior to his death, the deceased made a statutory declaration in which he said:

I have made no provision in my will for my daughter Fiona Dolman for reasons including that she has made no contact with me, that is she has not visited me until very recently and has shown no interest in my welfare, even though she is aware that I have been ill in hospital. 68 In accepting that the claimant appellant did nonetheless satisfy the jurisdictional requirement, the Court considered the nature and underlying reason for the claimant's estrangement from her father. The deceased separated from his wife when the claimant was 12 years old and divorced in 1991. The claimant went to live with her mother but the deceased kept in contact with the claimant by sending cards to her. Sometime in 1993 or 1994 the claimant wrote to the deceased, indicating that she wanted nothing more to do with him and not to contact her anymore. Other than one incident where she chanced upon him whilst driving but did not stop, the claimant never saw the deceased until immediately prior to his death. 69 Ipp JA (with whom Tobias and Basten JJA agreed) was satisfied that the claimant was fearful of her father. She regarded him as demanding, critical, unpredictable and said that she felt she was never good enough for him (see Ipp JA at [92]-[95]). Thus the nature of the estrangement was one arising from insecurity or fear. In analysing the underlying cause for this breakdown, Ipp JA drew attention to the parsimonious attitude of the deceased to the claimant's needs when she was a child, namely, that he paid $25 per week by way of child support in circumstances where her financial needs were dire whereas he was financially comfortable (see Ipp JA at [96]-[100]). Like in Foley v Ellis, the Court could understand the underlying reasons for the estrangement and recognised that the deceased was by no means blameless.

70 In these proceedings, there was no claim or submission by the appellant that his Honour had failed to give sufficient reasons for his conclusions. As the passage from Campbell J's judgment in Cetojevic v Cetojevic makes clear, the appellant was obliged to establish circumstances beyond the ordinary circumstances. He was required to establish something "special". The Trial Judge accepted that his circumstances played at the heartstrings but clearly concluded that they did not amount to "special circumstances" because there had been a deliberate abandonment by the appellant of his relationship with the deceased. The present case is distinguishable from those cases relied upon by the appellant in that this was a unilateral abandonment of a father for 14 years from when he was aged 76 until he died at aged 90 with a single abusive encounter in that period. 71 It is one thing to make provision for a child, even an adult, where the Court is able to better balance the obligations of the testator with the adequacy of the provision made by the testator. However in my view it is very important for the maintenance of the integrity of the process in these types of applications that this Court acknowledge once again the entitlement of testators, in certain circumstances, to make no provision for children: The Pontifical Society for the Propagation of the Faith and Saint Charles Seminary, Perth v Scales (1961) 107 CLR 9. This is particularly so in respect of children who treat their parents callously, by withholding without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility. 72 It is obvious that if the estrangement from the testator is explicable, as was the case in the authorities referred to above, a claimant may still achieve an order for provision under the Act. However there will be cases in which the estrangement is such that a testator is entitled to make no provision for an estranged child. This is one of them. The deceased spent the last 14 years of his life without any assistance from the appellant; without any communication (except the abusive encounter) from the appellant; and without the benefit of the love from a child whom he had nurtured and financially assisted during his formative years. 73 These observations are made in the context of the exercise of a discretion as to whether provision "ought" be made. The Trial Judge was considering the abandonment of the relationship as a factor in determining whether the appellant had established "special circumstances". As I have said earlier it was not suggested that the consideration of this factor in this exercise was inappropriate, but rather that no tribunal could reasonably have reached the conclusion that special circumstances had not been established. The Trial Judge was entitled to conclude that the unilateral abandonment of the deceased, when weighed in the balance, meant that the appellant had failed to establish "other special circumstances" under s 28(5)(d) of the Act. Even if it had not been necessary for the appellant to establish special circumstances, his unilateral abandonment of the deceased would have been a factor to have been taken into account in deciding whether provision "ought" be made. In my view that abandonment would have been a decisive factor against the exercise of discretion in the appellant's favour. 74 This conclusion means that it is unnecessary for the other grounds of appeal to be considered. However I should say that as to Ground 2, I do not accept that the Trial Judge found that the appellant did not have a financial need, but rather that during the period of his incarceration he would not require access to funds for his day-to-day living.

1. Leave is granted under s 5 of the Felons (Civil Proceedings) Act to bring the appeal.
2. Leave to adduce additional evidence is refused.
3. Appeal is dismissed.

4. Appellant to pay the respondent's costs of the appeal, subject to any application for a different costs order to be made by the filing of a Notice of Motion within 14 days of today.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.