PAHLOW-SILADY v SILADI

Court of Appeal (NSW)|1997-03-18|Before: Gleeson CJ, Powell JA, Santow J, Mason P

These proceedings were commenced on 9 June 1993 when there was filed on behalf of the Appellant a Summons in which she sought the grant to her of Letters of Administration of the Estate of the deceased.

Thereafter, in compliance with the provisions of the Rules (SCR Pt78 Div SB) there was served upon the Respondent a Notice to Affected Person (Form 106F), following which the Respondent entered an appearance in the proceedings (SCR Pt76 134H), and thereby became a party to the proceedings for so much of the proceedings as related to the Court declaring whether it was satisfied under s18A of the Act that the deceased intended that the "Statutory Declaration" should constitute his will (SCR Pt78 1341).

On the hearing before Santow J the evidence consisted of two Affidavits which had been sworn by the Appellant, which Affidavits were supplemented by the Appellant's oral evidence and the Affidavit which had been sworn by Mr Dominic. Each of the Appellant and Mr Dominic was cross-examined.

At the conclusion of the Appellant's oral evidence, counsel then appearing for the Appellant sought to tender the Memorandum and Articles of Association of the Company. Counsel then appearing for the Respondent objected to the tender of the Memorandum and Articles of Association upon the grounds:

that the Appellant had not discovered the document, an objection which, given the nature of the hearing before Santow J, I find puzzling;

that the Memorandum and Articles of Association would not be of any probative value as far as the proceedings were concerned;

that there was no evidence that the deceased was familiar with the terms of the Memorandum and Articles, a submission which, given the fact that the deceased had been one of the corporators of the Company, I find surprising.

"In these matters it is, of course, open to the Court, based on the Court's determination of what the interests of justice require, to permit material of that sort to be included. But I am satisfied on the material before me that the interests of justice are better served by excluding it."

Before turning to record what appear to be the essential elements in his Honour's Judgment, it is convenient to set out the provisions of s18A of the Act which provisions are as follows:

"18A (1) A document purporting to embody the testamentary intentions of a deceased person, even though it has not been executed in accordance with the formal requirements of this Act, constitutes a will of the deceased person, an amendment of such a will or the revocation of such a will if the court is satisfied that the deceased person intended the document to constitute his or her will, an amendment of his or her will or the revocation of his or her will.

(2) In forming its view, the court may have regard (in addition to the document) to any other evidence relating to the manner of execution or testamentary intention of the deceased person, including evidence (whether admissible before the commencement of this section or otherwise) of statements made by the deceased person."

In the light of what I have earlier written as to the possibility that Santow J was misled as to, or misunderstood the evidence as to, the make-up of the deceased's Estate and, in particular, the nature and value of the deceased's assets which would be affected by the "Statutory Declaration" if it were held to operate as a will, it is as well to record that, at the commencement of his Honour's Judgment, when dealing with the "Background", Santow J wrote (A/B 44,41):

"Stephen Silady ('Mr Silady') died on 4 August 1991 without children. He was not legally trained but was an engineer by training. The Plaintiff in these proceedings is his wife. She would take on an intestacy. The Defendant is his brother John Siladi. Mr Silady left an estate worth about $1,964,618.60.

Mr Silady was described as an 'astute businessman' as is evident from the assets he left on his death. Mr Silady was, among other things, a champion boomerang thrower. This is how he and his wife met. She worked for him from before her marriage as his secretary in the business referred to below. He was also a director of and ran, with his brothers, the family engineering and manufacturing company Derwent Thermostats Pty Ltd. He owned 668 shares in that company or a one-third share. These are valued at $112,010.24. His brothers Anthony and John Silady (sic) owned the balance, also working in the business.

Those shares are the principal object of contention of this case. They are, as can be seen, well short of his total assets, though significant."

If, for the moment, one leaves to one side what would be the effect, in law, of the provisions of "Statutory Declaration" in so far as they relate to the deceased's shares in the Company and the deceased's interest in Derwent Properties, it will be seen that the value of those assets as recorded in the Affidavit of Assets and Liabilities is, not $112,010.24 - or 5.7% of the total value of the estate - but

$355,742.24 - or 18.1% of the total value of the assets in the Estate - the latter figure not being apparent to me even during the course of the hearing of the appeal and only becoming apparent to me after I had an opportunity to consider at leisure the contents of the Affidavit of Assets and Liabilities. What would have been his Honour's reaction if he had appreciated that the assets which might be affected were not, as he thought, but a small proportion of the deceased's assets, is difficult to know.

The burden of Santow J's Judgment is to be found in the following passages (A/B 50-S1) which appear at the end of his Honour's Judgment: -

"Thus it was logical enough for the 1983 document to deal not only with dispositions on death, but also with the future conduct of the business in the contingency of illness and mental incapacity. The primary thrust of the document is directed at the former. Indeed the reference to illness and mental incapacity simply trigger a transfer to John Siladi of 'the conduct of the deceased', share of the business, whilst only rent in those circumstances is to be paid to the deceased as half owner during the duration of illness or incapacity. Thus I am satisfied that this feature did not preclude evincement (sic) of testamentary intention nor prevent the document pro tanto operating as a will, if otherwise saved by s18A of the Act.

It might be said that because in 1964 Mr Silady had made a will in the conventional way, he must have been aware of what a formal will required. He could thus on this argument not have intended the statutory declaration to operate as such, when it quite obviously differed in form and execution from a conventional will. While that is a consideration that has some weight, it is not self-evident that a lay-man who did sign a formal will some nineteen years earlier would recall the formalities that then attended the process or would necessarily assume, even if they were recalled, that these formalities were essential to validity.

Finally, although conventional testamentary language was not used, there is to be found the crucial dispositions expressed to take effect on death. The earlier cases cited demonstrate that it is the latter feature which is generally determinative of a testamentary intention. In weighing up the indications to which I have earlier referred as to whether the 1983 document embodied the testamentary intentions of the deceased and was intended to operate as his will I am, on the balance of probabilities, satisfied that the 1983 document was intended by the deceased to constitute his will after severing the non-testamentary portion. In so doing I have had regard to such limited extrinsic evidence as is available regarding the testamentary intentions of the deceased including statements made by him.

Accordingly I am satisfied that those provisions of the 1983 declaration which could operate prior to death were severable from the testamentary dispositions. Thus I do not consider this a fatal impediment to the application of s18A to the 1983 document."

In the Notice of Appeal filed on behalf of the Appellant, the grounds of appeal were, to say the least, less than happily expressed. However, in the Written Submissions which were filed on behalf of the Appellant the substantial grounds of appeal were reduced to two, they being:

that his Honour erred in rejecting the tender of the Company's Memorandum and Articles of Association; and 2. that his Honour erred in holding that the "Statutory Declaration" embodied the testamentary intentions of the deceased and that the deceased intended the "Statutory Declaration" to constitute his will.

So far as the first ground is concerned, the submission - thoroughly confused though the manner of its being advanced was - appeared to be that, as the provisions of Article 6 of the Company's Articles of Association - so it was said

precluded the transfer of a deceased member's shares to (inter alia) that deceased member's brother, so much of the "Statutory Declaration" as appeared to be directed toward transferring the deceased's shares in the Company to the Respondent would have been ineffective, a matter which was relevant to the question whether the "Statutory Declaration" embodied the testamentary intentions of the deceased, and the further question whether the deceased intended the "Statutory Declaration" to be his will.

So far as the second matter is concerned, the submission - again, advanced in a thoroughly confused and confusing fashion - appeared to be that, given the circumstances which gave rise to the drafting of the "Statutory Declaration"; the fact that the drafting of the "Statutory Declaration" was undertaken by the Appellant of her own initiative and not at the request of the deceased; and the fact that the deceased gave no instructions as to, and had no input to, the terms of the "Statutory Declaration', it could not be held that the document "embodied the testamentary intentions of the deceased", and, still less, that the deceased intended the "Statutory Declaration" to constitute his will - the "Statutory Declaration", so it seemed to be suggested, did not more than reflect what were then the deceased's wishes if there were to be some family dispute as to the conduct of the businesses in either of the events referred to in it.

Although counsel who had appeared for the Respondent on the hearing before Santow J had objected to the tender of the Company's Articles of Association, and although counsel who appeared for the Respondent on the hearing of the appeal, at first, opposed the reception into evidence of the Company's Articles of Association, in the end counsel for the Respondent, in the course of his oral submissions, took the course of tendering the Articles of Association for the purposes, as I understood them, of demonstrating, first, that Article 6 did not have the effect contended for by the Appellant, and, second, of demonstrating that, that being so, the hearing before Santow J did not miscarry when his Honour rejected the tender at the hearing.

So far as the second matter was concerned, the submission was that, having regard to the totality of the evidence and, in particular, the evidence of Mr Dominic that the deceased had told him that "(he had) fixed things up so that if anything (happened) to (him) then the business (would go) to (his) brother John", it was clearly open to Santow J to find that to the extent to which it dealt with what was to occur in the event of his death, the "Statutory Declaration" embodied the deceased's testamentary intentions, and that the deceased intended that, to the same extent, it should constitute his will.

Despite the fact that, during the course of the hearing of the appeal, each of the Chief Justice (Transcript p23) and I (Transcript p22) expressed our respective concerns at the fact that Santow J appeared, either, not to have had complete and accurate information as to what appeared to be matters of some significance, or, that he misunderstood what was the true position in relation to those matters, and, further, that it appeared that this Court might still not be in possession of complete and accurate information as to those matters, both counsel appeared to resist the suggestion that the matter might need to be remitted to the Probate Division for rehearing, and, rather, submitted that the material which was before the Court was sufficient to enable the Court to determine the questions arising on the appeal in favour of their respective clients.

In In the Estate of William Frederick Masters!) I wrote (inter alia):

"As I have, on a number of occasions (see, for example, The Application of Brown (1991) NSWLR 535; The Application of Kencalco 23rd October 1991 (unreported); Clothier v Rampling 9th December 1991 (unreported); Recent Developments in New South Wales in the Law Relating to Wills 67 ALJ 24, 38-39) sought to record, it is my view - and neither Mr Hill nor Mr Butcher sought to submit the contrary - that the questions arising on applications such as this are essentially questions of fact, the particular questions of fact being: -

does that document purport to record the testamentary intentions of the relevant deceased?

does the evidence satisfy the Court that, either, at the time of the relevant document being brought into being, or, at some other time, the relevant deceased, by some act or words, demonstrated that it was her, or his, then intention that the subject document should, operate as her, or his, will?

The only qualification - if qualification it be - which I have more meetly made to that often stated view is that, if the Court be satisfied that there once was a document which can no longer be found, then, so long as what might be called the presumption of destruction animo revocandi ought to be regarded as having been rebutted, it would be open to the Court, in an appropriate case, to make a declaration pursuant to the provisions of s18A of the Act in relation to that document (Whiteley v Clune: The Estate of Brett Whiteley 13th May 1993 (as yet unreported))."

Although the conclusion to which I then came as to one, but not as to the others, of the documents then being propounded was, by majority (Kirby P, Priestley JA; Mahoney JA (as he then was) diss), overruled by this Court in In the Estate of Masters (deceased)? I do not understand that any of the then members of the Court dissented from the view which I had recorded at first instance. In the course of his Judgment? Priestley JA wrote:

"Powell J stated that in the application of this section the questions arising are essentially questions of fact, the particular questions of fact being whether there is a document, whether that documents purports to record the testamentary intentions of the deceased and whether it was the intention of the deceased that the document should operate as his or her will.

This seems to me to be an appropriate way of understanding the section."

If, as seems to be accepted, the questions to be determined upon an application such as this are questions of fact, then, as it seems to me, it follows that, in any case in which the Court has been misled as to, or has misapprehended, or misunderstood, what are, the material facts, the hearing of the application will, in all probability, have miscarried, so that the result of that hearing ought to be set aside. While it may be that, in many such cases, an appellate court, on determining what were the true facts, would be in a position to make that order which ought to have been made at first instance, in the present case, I remain to be persuaded that, even now, this Court is in possession of all the relevant facts

in this regard it is sufficient to point out that the effect of the death of the deceased upon the partnership between his brother Anthony and himself is not [mown. This being so, it seems to me that, rather than endeavour to determine

25 June 1993 (unreported)
(1994) 33 NSWLR 446
supra at 466

this application for itself, the better course for the Court to adopt is to remit the matter to the Probate Division for re-hearing. However, as it may be that that view is not shared by other members of the Court, it is as well that I express what would be my view if the other members of the Court are of the view that the application should be determined upon the basis of such material as is now before the Court.

In the event supposed, I would not be satisfied that the "Statutory Declaration" embodied the testamentary intentions of the deceased, or that it was the deceased's intention that, insofar as it dealt with matters consequent upon his death, the "Statutory Declaration" should, without more, constitute his will.

My views thus stated are not dictated by the facts that the document is headed "Statutory Declaration" nor that it commences with the words "I... do hereby solemnly declare...", for, while the form of a document the subject of an application such as this is a matter to be considered by the Court on the application, it is by no means determinative of the result of such an application; merely by way of example, I record that in The Estate of John David Madzay+ Theld that a letter written by the deceased, when in hospital, to his mother, which letter read in part:

"Tf I survive, I will do my best to serve Jehovah, however, if I do not survive, my desire is that Robynne Bell runs the business (sic), not Joy. This letter evokes my previous Will and Testament and gives you, being my mother the full estate of my home, bank accounts, cars and all belongings not Joy or Donald as previously indicated. I am potting everything in trust for you, to decide for yourself, who, if anyone, is deserving at all, in this country.

I want you to know, that i (sic) love you very much and thank you for your loyal support during this unhappy time in my life. I have expressed my desire to Robynne, my faithful! (sic) friend, that if things don't turn out right during the operation, my wish is that my body be cremated as indicated and dictated in my previous will. Then its up to Jehovah, but I sure love him, I never left him. I only hope that I see you in the resurrection." was intended by the deceased to constitute his will, which will he intended to revoke his prior will and to dispose of the whole of his estate.

The matters which lead me to the view which I have recorded above are:

the "Statutory Declaration" appears to have followed from some informal discussion between the deceased and the Appellant as to matters which, at that time, appear to have been causing some tension between the deceased and his brother Anthony in the running of the "family business";

the "Statutory Declaration" was not drafted at the request of the deceased, but was drafted by the Appellant of her own initiative;

the deceased appears to have had no input, whatsoever, into the drafting, or the content, of the "Statutory Declaration";

it would appear that, in drafting the "Statutory Declaration", the Appellant relied entirely on her own understanding of the deceased's business affairs, which understanding, it would appear, was, at best, incomplete;

the drafting and the execution of the "Statutory Declaration" appear to have been very casual acts, undertaken on the spur of the moment, and occupying very little time, on what appears to have been a Saturday afternoon or evening at home.

Given that the "Statutory Declaration" was drafted, and executed, in such circumstances, and in such a casual manner, I find it difficult to accept, either, that the "Statutory Declaration" represented the considered testamentary intentions of the deceased, and, still less, that it was the deceased's intention that, in so far as it dealt with matters consequent upon his death, the "Statutory Declaration" should, without more, constitute his will. On the contrary, it seem to me that the "Statutory Declaration" was intended to be no more than a record of what were the deceased's then wishes.

In the result, the orders which I would favour are: - 1. ORDER that the appeal be allowed.

ORDER that the Orders made by Santow J on 8 February 1995 be set aside.

ORDER that, insofar as they deal with the question of the application of s18A of the Wills Probate and Administration Act 1898 to the document entitled "Statutory Declaration" and executed by the deceased on 9 April 1983, the proceedings be remitted to the Probate Division for re-hearing.

In the event that the other members of the Court are of the view that the matter ought not to be remitted as I have suggested, the Orders which I would propose are:

ORDER that the Orders made by Santow J on 8 February | 99S be set aside.

DECLARE that the Court is not satisfied that the deceased intended that the document entitled "Statutory Declaration" executed by him on 9 April 1983 constitute his will.

ORDER that, subject to compliance with the Rules of Court, Letters of Administration of the Estate of the Deceased be granted to the Appellant.

REMIT the matter to the Registrar to complete the Grant.

ORDER that within 7 days of this day the parchment of the existing Letters of Administration c.t.a. be returned to the Registry for cancellation.

Since the present appears to be one of those cases in which it might properly be said that the deceased has, or the Appellant, as the one entitled either on intestacy or to the residuary estate, in any event, has, been the cause of the litigation, it seems to me that this is one of those cases in which, even if it be held that the Appellant is entitled to the whole of the Estate on intestacy, the costs of the Respondent might properly be ordered to be paid out of the Estate of the deceased (see, for example, In the Estate of Paul Francis

Hodges deceased; Shorter v Nodges5). I would propose that, whatever be the fate of the appeal, there should be made a further order:

ORDER that the costs of each of the Appellant and the Respondent of the hearing before Santow J and of the appeal be paid, or retained, as the case may be, out of the Estate of the deceased.

ORDER that the Orders made by Santow J on 8 February 1995 be set aside.

ORDER that insofar as they deal with the questions of the application of s18A of the Wills Probate and Administration Act 1898 to the document entitled "Statutory Declaration" and executed by the deceased on 9 April 1983, the proceedings be remitted to the Probate Division for rehearing.

ORDER that the costs of each of the Appellant and the Respondent of the hearing before Santow J and of the appeal be paid, or retained, as the case may be, out of the Estate of the deceased.

5 Counsel for the Appellant: JA Jobson Solicitors for the Appellant: DG Stuart (Penrith) Counsel for the Respondent: DL Davies SC 10 Solicitors for the Respondent: O'Connor Filewood & Co (Hunters Hill)

See also Re Berger [1990] Ch 118 at 129-30 per Mustill LJ. Accordingly, a document in the form of a deed may be considered a will if its terms and manner of execution reveal a testamentary intention. It will be admitted to probate if executed as a will (Morgan (1866) LR 1 P & D 214; In the Estate of Pearce (1894) 4 BC(NSW) 60; Milnes) but treated as void if not (Re Carile (1920) VLR 263). On a similar principle, a document in the form of a letter has been admitted to probate: see eg Bathern [1941] SASR 266. It must be executed with the formalities of a will (Baker v Simes (1902) 21 NZLR 184) except in jurisdictions (like New South Wales, since the enactment of s18A) where unattested holograph wills may be accepted in certain situations (Re Stobie Estate [1942] 3 WWR 414). See generally Williams on Wills 7th ed, 1995, pp111-3.

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Judgment (68 paragraphs)

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Cases Cited (6)