Pahlow-Silady v Siladi

Supreme Court of NSW|1999-08-26|Before: Bergin J, Santow J, Gleeson CJ, Mason P, Powell JA, Mr J

New South Wales Supreme Court CITATION : Pahlow-Silady v Siladi [1999] NSWSC 890 CURRENT JURISDICTION : Equity Division Probate List FILE NUMBER(S) : 109172/1993 HEARING DATE(S) : 26 August 1999 JUDGMENT DATE : 3 September 1999

Pauline Mary Pahlow-Silady (Plaintiff) PARTIES : John Siladi (Defendant) Estate of Stephen Silady JUDGMENT OF : Bergin J

COUNSEL : B Coles QC/J Jobson (Plaintiff) P Jacobson QC/A Bulley (Defendant) SOLICITORS : DG Stuart (Plaintiff) O'Connor Filewood & Co (Defendant) CATCHWORDS : Whether statutory declaration constituted the deceased's will pursuant to s18A of the Wills, Probate and Administration Act (NSW) 1898. ACTS CITED : Wills, Probate and Administration Act (NSW) 1898 In the Estate of Masters (deceased); Hill v Plummer; Plummer v Hill (1994) 33 NSWLR 445; CASES CITED : Pahlow-Silady v Siladi (Supreme Court of NSW, unreported 21 November 1994, Santow J); Pahlow-Silady v Siladi (Court of Appeal, unreported 22 April 1997, Gleeson CJ, Mason P and Powell JA). DECISION : Statutory declaration constituted deceased's will

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

109172/93 - PAULINE MARY PAHLOW-SILADY v JOHN SILADI Estate of STEPHEN SIDADY JUDGMENT

1 The plaintiff made application for a grant of Letters of Administration of the Estate of the late Stephen Silady (the deceased) by summons filed on 9 June 1993. 2 The matter was heard by Santow J on 6 July 1994 when the issue for determination was whether a statutory declaration made by the deceased on 9 April 1983 constituted his valid will pursuant to s18A of the Wills, Probate and Administration Act NSW (1898) (the Act). 3 The terms of the statutory declaration are as follows: Statutory Declaration I, STEPHEN SILADY, Company Director, of 152 Greville Street Chatswood West, in the state of New South Wales, do hereby solemnly declare that in the event of my death, my one-third share in the business of Derwent Thermostats Pty Ltd and Derwent Controls, 27 Higginbotham Road, Gladesville, is to be given to my brother, John Siladi, to be kept operating as a going concern and a family business. In the event of my illness and mental incapacity rendering me incapable of conducting the business, my share of the business is to be conducted by my brother, John Siladi, and in the event of his illness, mental incapacity or death, by my brother Anthony Siladi, and his two sons Edward Siladi and John Siladi as a going concern and a family business. In the event of my death, my half-share in the business of Derwent Properties is to be given to my brother John Siladi, including rents accrued and owing at that date by Derwent Thermostats Pty Ltd or others. In the event of my illness or mental incapacity, my half share of the rent of the premises, 27 Higginbotham Road, Gladesville, to be paid to me as half owner, for the duration of such illness or incapacity per calendar month. Signed 'Stephen Silady' 9/4/83 Witnessed: 'Pauline Silady' 9/4/83 4 Santow J delivered his judgment on 21 November 1994. He found that pursuant to s18A of the Act the statutory declaration constituted the deceased's will. Because the statutory declaration dealt with only part of the deceased's estate administration with the will dated 9 April 1983 was granted to the plaintiff, the widow of the deceased. Santow J's judgment was the subject of a successful appeal (Court of Appeal unreported 22 April 1997. Gleeson CJ, Mason P (dissenting) and Powell JA). The Court of Appeal set aside His honour's orders and made the following order: 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 rehearing. 5 This remitted matter was heard by me on 26 August 1999 when Mr Coles QC, leading Mr J Jobson of counsel, appeared for the plaintiff and Mr Jacobson QC, leading Mr Bulley of counsel, appeared for the defendant. 6 After the plaintiff's evidence was read Mr Jacobson QC made application for an adjournment of the proceedings to enable the defendant to pursue a further line of inquiry that had been identified on the perusal of documents that had been unearthed as a result of a subpoena that had been served on the defendant by the plaintiff. That line of inquiry related to whether there had ever been a partnership agreement executed between the deceased and any of his brothers. This was a matter identified in the judgment of the Court of Appeal in the appeal in this matter some 2 years ago and in the circumstances I declined the application. 7 This matter had been adjourned once before on the application of the plaintiff's representatives because the plaintiff was unavailable to be cross examined because of ill health. The plaintiff was once again too ill to attend for cross examination in the proceedings before me but no application for adjournment was made on the basis of such inability. No objection was taken to the reading of the plaintiff's affidavits or to the tender of the transcript of the plaintiff's evidence before Santow J on 6 July 1994.

The Business and the Corporate structure 8 The deceased and his brothers Anthony and John were born in Yugoslavia. The Siladi family immigrated from Yugoslavia to Australia some time prior to 1945. In 1945 Anthony Siladi, commenced a small tool making and engineering business at 58 Derwent Lane, Glebe. By 1948 the business had expanded to the point that a partner was required. The deceased, who was Anthony's elder brother, commenced working in the business and on 14 October 1948 the company known as Derwent Tool, Engineering and Plastic Co Pty Ltd was incorporated to operate the business. 9 Two further directors were appointed to the company. They were Bessie Patterson Henrics and Eileen Joyce Richardson. In 1954 the directors decided to purchase a property at 27 Higginbotham Road Gladesville which at that time was a vacant block of land. 10 Resolutions to the following effect were agreed to: 8.1 Title to the land would vest to each director as tenant in common in one quarter equal share and correspondingly, each director was to enter into a mortgage in favour of the Commonwealth Bank of Australia. 8.2 The payment of the balance of the purchase price and any further capital works on the land were to be met by the company through the mortgage executed by the directors. The capital works included the cost of constructing a factory, fixtures and associated machinery and equipment required in the business of the company including the costs of annual maintenance and repairs. 8.3 The initial monetary contributions made by the directors and the interest thereof was to be recouped by the directors in the way of "rent". The rent was to be determined by the company each year and paid into an account to be opened at the Commonwealth Bank which was called the "Derwent Properties" account. 8.4 The Derwent Properties account was also to be used for the purposes of securing bank overdrafts and as a record of the mortgage repayments. 11 In the 1950's the youngest of the three brothers, John Siladi, who held an engineering degree, was employed as a fitter and turner with the company. In 1960 John began to experiment in his own time with certain thermostat controls, controlling temperature and electricity flows. By mid 1961 John had convinced his brothers, Anthony and the deceased, of the market potential for thermostat controls. 12 Although it is clear from the evidence that John Siladi spent time and effort working on the thermostat "controls" and convincing his brothers that there was a market for them, the word "controls" did not find its way into the new name of the Company. 13 In 1961 the deceased informed John: "We are into thermostats now and we are going to call our new company Derwent Thermostats Pty Ltd". 14 The company changed its name to Derwent Thermostats Pty Ltd by special resolution passed on 4 May 1961. 15 From 1961 until 1975/76 John Siladi was employed as the Derwent Thermostats Pty Ltd project manager. 16 In 1975 the deceased had a conversation with Anthony Siladi in which he said: "We should have got John in as a partner a long time ago. We've worked together well and that is the way it must be from now on. I think its time John became a co-director and we will share the profits as brothers and the business has got to be kept that way.

Anthony Siladi then said to the deceased: "I could not agree more but how is this going to affect your wife and mine? John is not married but we are."

The deceased then replied: "No, I do not want our wives involved. We built the business up as brothers and its going to stay that way." 17 John Siladi was appointed as a co-director of Derwent Thermostats Pty Ltd in 1975. Thereafter both the profits and the burdens and responsibilities of the company were shared equally between each of the three brothers. Each brother held 668 shares in Derwent Thermostat Pty Ltd. The evidence disclosed that the shared responsibilities included: · staff and management matters; · the identification and development of markets and marketing techniques; · supervision of production lines including the performances and training of employees; · the maintenance of product standards; · contracts and the maintenance of products sold; and · the development and implementing of company policies and monitoring these to adapt to altered conditions in the market. 18 On 12 August 1980 the mortgage on the factory site at 27 Higginbotham Road Gladesville had been fully paid. The two directors, Bessie Patterson Henrics and Eileen Joyce Richardson resigned as directors. The title to the land previously held by those two directors was transferred to Anthony and the deceased. 19 From 12 August 1980 the deceased became the "half-owner" of the property at 27 Higginbotham Road, Gladesville and collected half the rent paid into the Derwent Properties account by Derwent Thermostats Pty Ltd. 20 The evidence disclosed that by 1982 the three brothers had developed a close working relationship based on experiences with each other and the company itself. However, Anthony Siladi gave evidence that he recalled disagreements with the deceased over money.

The Plaintiff and the deceased 21 The plaintiff first met the deceased in 1949 when she commenced to work for him as his secretary in the business at Glebe. The plaintiff composed and typed all the deceased's correspondence. The deceased was a champion boomerang thrower and had created a boomerang moulding die. The plaintiff was a writer and was preparing research on the boomerang. This shared interest led to their courtship and they married on 1 July 1967. 22 The plaintiff said that the deceased was a very busy and astute businessman. She described his "wonderful" way of spelling phonetically and claimed that he had been too busy to learn how to spell other than phonetically. 23 After their marriage the plaintiff continued to act as the deceased's secretary and her duties extended to "co-running" a business known as Derwent Book Co which was the publisher of The Complete Australian Boomerang Book (2nd Edition). Although there is some evidence that by 1982 the deceased and the plaintiff had succeeded in developing a successful commercial venture selling Aboriginal artefacts it formed no part of the deceased's estate.

Statutory Declaration 24 The plaintiff was of the view that the deceased was very loyal to both of his brothers, Anthony and John, however in 1983 there had been a disagreement between the deceased and Anthony because Anthony was a bit of a "spendthrift with money". The deceased discussed with the plaintiff that it was his intention, "at that stage" that John "would have his controlling interest rather than Tony, because Tony spends too much money". 25 The plaintiff said that on 9 April 1983 she was a bit bored and so she went upstairs and typed the statutory declaration. She composed it herself. Prior to the composition of the statutory declaration the plaintiff discussed with the deceased "his position in the family company Derwent Thermostats Pty Ltd as to how the eventualities of his illness, mental incapacity or death might affect his position". 26 The only evidence in relation to the deceased's health as at 1983 was that he had some vascular trouble and although he died in 1991 as a result of a massive stroke whilst at work, his capacity to work as at 1983 was apparently unaffected. 27 The plaintiff did not recall discussing the document with the deceased after she typed it but she recalled him signing the document. It is clear that she witnessed it on the same day that the deceased signed it. After it was signed the plaintiff put it upstairs in her writing desk. The document was never mentioned again in any conversation between the plaintiff and the deceased. 28 Mr Rudolph Dominic first met the deceased in 1957 when he commenced working with the company at Glebe. He was employed with the company for fourteen and half years until 1971 when the business relocated from Glebe to the property at Gladesville. At the time of the relocation Mr Dominic decided not to continue with his employment with the company and travelled overseas for approximately three months. He took up employment elsewhere on his return from overseas. 29 Mr Dominic kept up social contact with the brothers and would visit the factory at Gladesville on Friday or Saturday. He would see the deceased and John "perhaps once a week and even more frequently on occasions". 30 In about 1985 he had a discussion with the deceased about wills. He said he recalled the conversation came about because his mother had recently died and there had been problems with her estate. The deceased said to him: "I have fixed things up so that if anything happens to me then the business goes to my brother John. Don't say anything about this to John".

1964 Will 31 Prior to the deceased's marriage to the plaintiff he made a will on 25 July 1964. In that will the deceased appointed John Siladi as the sole executor and if he pre-deceased him then Anthony Siladi. He bequeathed two parcels of real estate to the plaintiff together with a half share in his shares in Email Limited and deposits with various institutions. The other half share in the moneys and shares went to the deceased's siblings and mother and to Anthony's children. 32 The residue of the estate went to John Siladi and if he pre-deceased to his brother Anthony, if he pre-deceased to another brother George, if he pre-deceased to his sister Frances, if she pre-deceased to his mother Maria and then to the children of Anthony. This will was revoked by the deceased's marriage to the plaintiff on 1 July 1967.

The deceased's estate 33 The deceased's estate consists of five parcels of real estate valued as at 9 June 1993 at $1.325 million. The plaintiff's evidence was that as at 1983 the deceased's real property, except for the Gladesville property, was in the plaintiff's name to protect them against loss in the event of any financial trouble with the business or possible consequential bankruptcy. 34 The one half share as tenant in common of the property at 27 Higginbotham Road, Gladesville was estimated to be worth $150,000. The furniture, watches and jewellery was estimated at a value of $25,100. The money in the deceased's house, current accounts and banks or financial institutions on deposit was $344,987.73. Superannuation and long service leave amounted to $26,943.63. Motor vehicles were valued at $2,700 and a taxation credit of $2,640. 35 Additionally shares in companies were listed as: 668 shares of $2 each in Derwent Thermostats Pty Ltd @ $167.68 per share $112,010.24

Debts due to the estate were listed as: Amount owing by Derwent Thermostats Pty Ltd under loan account $32,830.00; and;

Interest in partnership was listed as; One-half share in partnership "Derwent Properties" between Anthony Siladi and Stephen Silady excluding value of interest in partnership real estate 27 Higginbotham Road, Gladesville $93,732.

The total estimated or known value of the estate as at 9 June 1993 was $1,964,618.60.

The Law 36 Section 18A of the Act provides: (1) A document purporting to embody the testamentary intentions of a deceased person, even though it has not been executed in accordance with the final 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 intentions of the deceased person, including evidence (whether admissible before the commencement of this section or otherwise) of statements made by the deceased person. 37 This section was introduced into the Act by Act No 17 of 1989 consequent upon the New South Wales Law Reform Commission Report Wills-Execution and Revocation, LRC 47 (1986). 38 There is no issue between the parties that for the statutory declaration to constitute the deceased's will: 1. it must be in documentary form;

it must embody the testamentary intentions of the deceased; and

it must be intended to take legal effect as a will. 39 As Mahoney JA said in In the Estate of Masters (deceased); Hill v Plummer; Plummer v Hill (1994) 33 NSWLR 445 at 455: "What is to be determined in respect of the document propounded under s18A is whether, assuming it to embody the testamentary intentions of the deceased, it was intended by the deceased as his testamentary act in the law, that is, to have present operation as a will." 40 His Honour went on to make an observation which is applicable to the present case. His Honour said also at 455 - 456: "This distinction is plain in concept. But the application of it may give rise to difficulty. Particularly is this so where the person whose intention is to be analysed is a lay person not fully familiar with the nature of a will or with the way in which the law in this regard operates. If, for example, the deceased were asked whether his intention was that the document brought into being should 'constitute his will', he might be unable to answer the question precisely because he did not understand, in the relevant respects, what a will is." 41 It is clear in this case that the first matter, documentary form, has been satisfied. The real issues between the parties are whether the statutory declaration embodied the testamentary intentions of the deceased and whether it was intended to take legal effect as a will.

Testamentary Intention 42 The defendant relied upon the following portions of the statutory declaration in support of the submission that it embodied the deceased's testamentary intentions: I, Stephen Silady, Company Director of 162 Greville Street, Chatswood West in the state of New South Wales do hereby solemnly declare that in the event of my death, my one-third share in the business of Derwent Thermostats Pty Ltd and Derwent Controls, 27 Higginbotham Road, Gladesville, is to be given to my brother, John Siladi, to be kept operating as a going concern and a family business. In the event of my death, my half share in the business of Derwent Properties is to be given to my brother John Siladi, including rents accrued and owing at that date by Derwent Thermostats Pty Ltd or others. 43 The defendant submits that these are sufficiently clear statements of an embodiment of the deceased's testamentary intentions as to the way in which his share in Derwent Thermostats Pty Ltd and his interest in Derwent Properties were to pass. 44 It was submitted that the fact that the statutory declaration also referred to an intended regime in circumstances in which the deceased may have become ill or incapacitated should not detract from the testamentary nature of the declaration. Mr Jacobson QC submitted that the defendant could not do better than to respectfully adopt the following portion of the learned President's judgment in the appeal in this matter (p 12): "In my view, the statutory declaration is a document which purports to embody the 'testamentary intentions' of the deceased and, at the same time, to satisfy the court that the deceased intended the document 'to constitute his…will'. The required standard of proof is the civil standard. The fact that the document was prepared in the form of the statutory declaration in which the deceased did 'solemnly declare' his wishes in a document that was signed by him, witnessed by his wife, and handed to his wife for safekeeping all support this conclusion. The evidence of Mr Dominic tends in the same direction: it is admissible pursuant to s18A(2). That the statutory declaration is testamentary, at least in part, and reveals an intention, at least in part, that the deceased intended that it should 'constitute his…will is indicated by the dispositions 'in the event of my death' of the deceased's one-third share in the business of Derwent Thermostats Pty Ltd and Derwent Controls and of his half share in the business of Derwent Properties, in each case in favour of the deceased's brother John Siladi. In my view these matters tend firmly in favour of the document having a testamentary as distinct from a merely precatory intent, and they support Santow J's conclusion that he was also satisfied that the deceased intended the document to constitute his will." 45 This statement of the learned President refers to both issues of testamentary intention and the intention to constitute a will but I have extracted it under this issue for ease of reference. However I am conscious of Mr Coles QC's caution that I should not be allured to the conclusion that the deceased intended the document to constitute his will simply by a seemingly testamentary statement in a document. 46 Mr Coles QC submitted that the statutory declaration was a document with the dominant purpose of meeting the exigencies of the moment. He submitted it found its origin or genesis in some subsisting but seemly not protracted or long lasting dispute between the deceased and his brother Anthony. 47 Mr Coles QC made the point that there was a paucity of evidence in relation to the "disagreement" between the deceased and Anthony and that the evidence that was given by Anthony was a most oblique account of such disagreement. It was simply that Anthony Siladi recalled that he had disagreements with the deceased about money. It was submitted that there was no evidence about Anthony's "habit" of being a spendthrift, nor was there any evidence that the disagreement persisted beyond or was likely to persist beyond 1983. 48 It was further submitted that I would be satisfied that this was not an instrument made in contemplation of a present need to order testamentary affairs but more to deal with immediate operational concerns about the day to day conduct of the business in the event of the deceased's illness and/or incapacity. 49 The statutory declaration certainly deals in part with the deceased's desires as to what was to happen in the event that he became too ill or incapacitated to remain involved in the business. However this is a statutory declaration in which the deceased solemnly declared his intentions as to what should happen upon his death. The solemn declarations that in the event of the deceased's death his one-third share in the business of Derwent Thermostats Pty Ltd and Derwent Controls and his half share in the business of Derwent Properties were to "be given to" his brother John Siladi in my view are clearly an embodiment of the deceased's testamentary intentions. 50 I therefore conclude on the balance of probabilities that the first two issues in respect of the application of s18A of the Act are satisfied. The real issue in this case is whether the deceased intended this document to constitute his will.

Intention to constitute his will 51 Mr Coles QC submitted that the statutory declaration was a transitory measure to deal with the exigencies of the moment. He submitted it could be, although not necessarily had to be, categorised as a stopgap measure for the duration of the commercial disagreement the deceased was having with his brother Anthony. 52 Other circumstances relied upon in support of the submission that this was a document not intended to constitute the deceased's will but more to accommodate present operational concerns were as follows: · the plaintiff prepared this document of her own volition; · although there was discussion between the deceased and the plaintiff prior to the preparation of the statutory declaration it was the plaintiff who composed the document; · there was no discussion about its contents with the deceased after it was composed; and · the deceased signed it at home in the plaintiff's presence probably whilst listening to Parliament on the radio. 53 These circumstances are contrasted to the formal and careful approach to the making of the 1964 will. It is clear that on that occasion a solicitor was instructed and it was submitted that the inference is that the deceased gave instructions for a detailed and complex arrangement for the dispositions expressed to take effect on his death. It is submitted that with that experience an occasion so lacking in formality as was the execution of a statutory declaration in the circumstances outlined above would tend to suggest that the deceased did not intend the declaration to constitute his will. 54 I would regard Mr Coles QC's submission as more persuasive if the deceased had simply written the contents out or simply signed a piece of paper with these statements in it. But this was a statutory declaration with a witness and notwithstanding Mr Coles caution I am of the view that I should weigh this factor in the balance when deciding this issue. 55 Mr Coles QC submitted that other features which militate against a finding that the statutory declaration was intended to constitute his will are as follows: · if the deceased did not know that his 1964 will had been revoked he would not have intended to replace it with a statutory declaration making the same disposition. That is that the business would pass to his brother John; · if the deceased did know that his marriage had revoked his 1964 will he would have made a much more formal will consistent with his experience in 1964. Presumably consistently with that experience he would have dealt comprehensively with all of his estate with careful consideration as to how his assets were to be allocated; · he disposed of so little of his property; · on the assumption that testators do not intend to die intestate a finding that the deceased intended this document to constitute his will (in the knowledge that his 1964 will had been revoked) would amount to a finding that he intended to leave his wife to the mercies of the law of intestacy; and · the Company's Articles of Association prohibited a transfer of the deceased's shares to his brother. 56 The statutory declaration does not make the same disposition in respect of the deceased's brother John as was made in the 1964 will. As Justice Santow pointed out in his judgment (21 November 1994 unreported p 9-10): "Whilst both the 1964 will and the 1983 document preferred John Siladi over Anthony Siladi so far as the business was concerned, the 1964 will provided a gift over to Anthony if John pre-deceased and then a gift over for George if Anthony pre-deceased - with further gifts over for the next generation if John and Anthony pre-deceased. However the 1983 document leaves Anthony and George out altogether so far as any gift over is concerned should John pre-decease. This perhaps reflects some circumspection concerning Anthony because he was then thought of "as a bit of a spendthrift with money". 57 A further point of relevance is that the 1964 will was made at a time when John was not a co-director or shareholder. This did not occur until 1975. After 1975 John held one third of the shares in the company Derwent Thermostats Pty Ltd with the deceased and Anthony each holding one third of the shares. 58 Mr Coles QC submitted that the terms of the conversation between the deceased and Mr Dominic are consistent with the deceased referring to the 1964 will and would therefore not support the contention that the deceased intended the statutory declaration to constitute his will. I disagree. The conversation occurred approximately two years after the statutory declaration was made. The conversation referred only to the fact that if anything happened to the deceased John was to get the business. Mr Dominic was not cross examined. There was no evidence from Mr Dominic that the deceased mentioned any of the other brothers. 59 If the deceased had been referring to the 1964 will in the conversation with Mr Dominic one might have expected him to tell Mr Dominic that his brother John was to get much more than the business. If the 1964 will had been on his mind he would have known that John was to get the residuary of his estate after the division of the shares and money and the two parcels of land going to the plaintiff. It was the statutory declaration that gave John the deceased's share of the business. 60 Contrary to Mr Coles QC's submission I regard this conversation as some evidence that the "commercial disagreement" about money and/or the deceased's opinion that Anthony was a "bit of a spendthrift" did persist beyond 1983. 61 I am satisfied on the balance of probabilities that the conversation with Mr Dominic was a conversation in which the deceased was referring to the dispositions referred to in the statutory declaration in 1983 and is evidence in favour of a finding that the deceased intended it to constitute his will. 62 Some of the other matters relied upon by Mr Coles QC can be dealt with together. Put shortly they are encompassed by the submission that the deceased would not have intended the statutory declaration to operate as his will in the circumstances where he made provision for such a small amount of his estate, failed to make any provision for his wife and was aware of the formalities of will making from his experience in 1964. 63 In dealing with these arguments I am assisted by the approach adopted by the learned President in the appeal in this matter. The fact of the matter is that the deceased did only deal with part of his estate in the statutory declaration. I agree with the learned President that a rational explanation for such an approach is that the deceased was concerned about the break up of the family business in the event of his death or serious illness. 64 The deceased may not have realised that his 1964 will had been revoked by his marriage or if he did he may have intended to deal with his remaining assets on another occasion. The plaintiff's evidence was that as at 1983 the majority of the deceased's real property had already been transferred into her name and it is not clear how much was in term deposits and bank accounts at that time. As the learned President said the deceased may well have thought that all the assets of any value were covered by the arrangement with the plaintiff and by the statutory declaration. 65 Mr Coles QC also relied upon the prohibition on the transfer of the shares in the Articles of Association in support of the submission that the deceased would not have intended the statutory declaration to constitute his will. Had the deceased called a meeting after he made the statutory declaration to change the Articles of Association to accommodate such a transfer then it is submitted I would be satisfied that the deceased intended the statutory declaration to constitute his will. However he did not do this. 66 These Articles were agreed to in 1948. Although Article 6 is relied upon for this submission Article 5 is also important. The Articles provide as follows: "5". Notwithstanding anything contained in these Articles or in Table 'A' a share may be transferred by a member selected by the transferor but save as by these Articles expressly provided no shares shall be transferred to a person who is not a member so long as any member or any person selected by the directors as one whom it is desirable in the interest of the Company to admit to membership is willing to purchase the same within a period of one month at the value fixed by the intending transferor. If any such shares are not purchased within a period of one month by any member or any person selected by the directors then the intending transferor shall be at liberty to sell them to any person at the same or at a greater value but if such intending transferor is desirous of transferring the shares at any lesser value then they shall first be offered at such lesser value in accordance with the provisions of this Article. 6. Any shares may be transferred by a member to any other member or to any son, daughter, grandson, grand-daughter, or other issue; son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife, husband, sister-in-law, brother-in-law, or cousin of a member and any share of a deceased member may be transferred by his executors or administrators to any son, daughter, grandson, grand-daughter, or other issue; son-in-law, daughter-in-law, widow, widower, sister-in-law, brother-in-law or cousin of such deceased member (to whom such deceased member may have specifically bequeathed the same) and shares standing in the name of the trustees of the will of any deceased member may be transferred upon any change of trustees to the trustee for the time being of such will." 67 Mr Coles QC relied upon the observations made by Powell JA in the appeal in this matter and Mr Jacobson QC relied upon the observations of Mason P in the appeal in this matter. In considering each party's submission I have also had regard to the observations made by Mason P and Powell JA. In the circumstances of the evidence before me I am assisted by the following approach adopted by the learned President (p 16): The deceased may never have read Article 6; if he had, or had it in contemplation in 1983, he may (probably with good cause) have formed a view that, when read with Article 5, Article 6 did not restrict the capacity to transmit the shares in the family company to a fellow member; the deceased may have been ignorant of the law; the deceased may (with good cause) have formed the view that Article 6 would not have impeded his legal personal representative from holding the deceased's shares in trust for his brother John; the deceased may have thought it likely that the surviving brothers would have been prepared to waive the possible effect of Article 6 and, by amending the Articles or otherwise, to permit John to become registered in accordance with the deceased's "testamentary" wishes. 68 I have weighed this matter carefully but I am of the view that the existence of Article 6 viewed with all the other factors to which I have had regard does not persuade me that the deceased did not intend the statutory declaration to constitute his will. 69 There are two other matters with which I should deal in relation to this final issue. They are the references to Derwent Controls and Derwent Properties in the statutory declaration. Mr Coles QC once again relied upon the observations made by Powell JA in the appeal in the matter on these topics. He also referred me to the judgment of the Chief Justice in particular to the following (p 2): "There may have been a good reason why the deceased would have intended to deal, in a testamentary fashion, with that property separately from all his other assets. Before reaching a conclusion about that, however, I would want to be sure that I understood the nature of the property in question, and the family and commercial background against which the Statutory Declaration was prepared. That would include the terms of any relevant partnership agreement, and the structure of any relevant corporation. It would be dangerous to make a judgment about whether the document constituted a will, by virtue of s18A of the Wills, Probate & Administration Act 1898 without appreciating what the deceased's understanding would have been of the nature of the property to which he was referring. To take an example not directly related to the central issue in the present case, what did the deceased have in mind when he said that, in the event of illness rendering him incapable of conducting the business, his share of the business was to be conducted by John Siladi? The meaning of that statement or direction is obscure, and in the absence of reasonably clear evidence as to the nature of the asset or assets to which the deceased was referring it is difficult to reach any confident conclusion as to what he had intended." 70 Powell JA analysed the problems in greater detail particularly at pp 5 - 8 of His honour's judgment which I need not extract here. From the premise of this careful analysis Mr Coles QC submitted that notwithstanding the additional evidence before me that had not been before the Court previously I would not be able to conclude with any confidence what property the deceased was purporting to deal with in the statutory declaration. It was further submitted that in such circumstances I could not be satisfied that the deceased intended the statutory declaration to constitute his will. 71 Not unexpectedly Mr Coles QC focused upon the reference to Derwent Controls in the statutory declaration. There is no evidence that there was such an entity. Certainly there was evidence that John Siladi worked on the thermostat controls and that they were profitable. However the words "Derwent Controls" do not appear in the company name. Mr Jacobson QC conceded that there was no evidence in relation to that entity and as he called no witness to give evidence about it Mr Coles QC submitted that no witness could have given any evidence of assistance to the defendant on that topic. 72 In the circumstances I am of the view that there was no such formal entity or business name. However I am satisfied on the evidence of the development of the business that the reference to Derwent Controls is on the balance of probabilities a reference to the business of manufacturing and selling the thermostat controls which was conducted by the company Derwent Thermostats Pty Ltd. 73 I am not aware of any more detail of the "partnership" of Derwent Properties than that contained in the evidence of the Siladi brothers to which I have already referred and in the plaintiff's affidavit of assets and liabilities to which I have also made reference. Mr Coles QC made the submission consistently with the observations made by Powell JA in the appeal in this matter that I am not in a position to know whether or not there was a written partnership agreement or whether the partnership dissolved on the death of one of the partners. 74 He made the point that there is a world of difference between a disposition of a business as a going concern and a disposition of a purported interest in a business which is not really a going concern but an unliquidated distributable share in a wound up trading concern. 75 I am of the view on all the evidence before me that in signing this statutory declaration the deceased intended that on his death his brother, John, was to have his shares in the company and his share of the Derwent Properties account and his half interest in the Gladesville property. 76 Although the deceased may not have turned his mind to the distinctions and differences to which Mr Coles QC took me in detail, I am of the view that these circumstances do not detract from the view that I have reached which is that I am comfortably satisfied on the balance of probabilities that the deceased intended the statutory declaration to operate as his will. 77 The parties are to bring in short minutes of order to finalise this matter after I hear any application that is made in relation to costs.

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