Voges v Monaghan

[1954] HCA 63

High Court of Australia|1954-07-01|Before: Kitto JJ

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Court

High Court of Australia

Decision date

1954-07-01

Before

Kitto JJ

Source

Original judgment source is linked above.

Judgment (50 paragraphs)

[1]

High Court of Australia Dixon C.J. McTiernan, Webb, Fullagar and Kitto JJ. Voges v Monaghan [1954] HCA 63

[2]

ORDER Vary the judgment appealed from by substituting for the words upon trust where they occur in the first declaration the words subject to a trust. Subject to such variation dismiss the appeal with costs.

[3]

This appeal has caused me a great deal of difficulty, notwithstanding that it is in substance an appeal upon a question of fact and that the trial judge's disbelief of the defendant's testimony goes a long way towards disposing of her case. The principles governing the determination of appeals on questions of fact are in familiar use and are the subject of many authoritative statements, most of which recently in Paterson v. Paterson [1] we took occasion to collect. Consistently with them a reconsideration of the effect of the testimony of the defendant is hardly possible. But the root of the difficulty which I feel about the case is that I gravely suspect that the conclusion that has been reached is not in accord with the actual facts of the case. To make their respective cases it was necessary for the plaintiffs to establish a state of fact, the chief elements of which were that the testator had a definite intention that the defendant, as his executrix and universal legatee, should be bound to pay to each of them respectively three pounds a week during her lifetime, that this intention was communicated to the defendant during the testator's lifetime, that she expressly or impliedly undertook the obligation, that is either by agreement or acquiescence, and that on the faith of her carrying out his intention he made his will as it has been admitted to probate or left it unrevoked. As Viscount Sumner said in Blackwell v. Blackwell [2] : "The necessary elements, on which the question turns, are intention, communication, and acquiescence. The testator intends his absolute gift to be employed as he and not as the donee desires; he tells the proposed donee of this intention and, either by express promise or by the tacit promise, which is signified by acquiescence, the proposed donee encourages him to bequeath the money in the faith that his intentions will be carried out" [3] . But all these elements must be established to the reasonable satisfaction of the court. The evidence may be circumstantial or it may consist in admissions by the legatee upon whom it is sought to fix the trust, and the admissions may be express or by conduct or the proof may consist in both admissions and circumstantial evidence. When the issue is contested it will seldom include direct evidence of what passed between the testator and the legatee. But, in particular, the evidence must prove satisfactorily that the trust was ascertained and what it was. The present case is, to my mind, of a most peculiar kind. Immediately after the death of the testator the defendant appears to have been filled with anxiety to tell various people that the deceased had provided for them or made bequests to them of this or that article. Among statements of this sort made by her there are some strong expressions affecting the plaintiffs. For example, to the sister of the testator she wrote: "To Mrs. Answerth Mr. Gill has left £156 per annum to cease at her death". And to that plaintiff herself, she wrote: "I am sure you must have a contented feeling when you think what Mr. Gill's gift will mean". The trouble about all these statements is that they go too far; they would not naturally be understood as meaning that the defendant had succeeded to the estate, but had agreed with the testator to pay the annuities or either of them, and they were not so intended. Moreover, the same letter to the testator's sister speaks of a number of gifts of personal articles as made by the testator when it is almost apparent that the defendant is inventing for the testator various small specific bequests she might have wished he had made. The circumstances of the case as they appear in evidence seem altogether to lack background. You feel that you do not understand why the testator made the will he did, where the defendant really stood in relation to the testator, his wife, his household and his business, or what were the motives by which the various persons concerned were animated. Clearly enough commonplace explanations do not fit. To me it looks as if for some reason or other the testator thought that he could project his own control of his financial and business affairs beyond death through the defendant and that what he wished to do was to leave her in possession of all his assets completely confiding in her and feeling certain that she would meet the moral claims upon him of his wife and his relatives and his dependants just as he would have done, if living, and according to circumstances as from time to time they changed and developed and that otherwise she should have beneficial ownership and enjoyment. Why this should be so the complete absence of information giving reason and coherence to his conduct leaves me quite unable to guess. Nor do I understand precisely why she wished to represent that he had made actual bequests, including the two annuities, or, at all events, one of them. No doubt he discussed with her what was the proper thing to do about his wife and the plaintiffs and probably notes were made of his views. No doubt she built up a body of circumstantial evidence that can be used against her in the present case. For my part, I think that she cannot complain. She has no one but herself to thank for the conclusion which the Court has reached both here and below. But in spite of her statements and the course of conduct she has pursued I would not myself be satisfied that the testator placed her under any sufficiently ascertained trust in relation to the two plaintiffs or communicated to her an intention on his part that she must pay to either of them an annuity out of the estate during the life of the recipient and independently of her own discretion or the condition of the estate. Though not without hesitation I would reach the conclusion that the decision under appeal should not be allowed to stand.

[5]

I am of the opinion that this appeal should be dismissed. The evidence in the case is accurately and fully summed up by Barry J. in his reasons for judgment. The learned judge made a number of findings which establish the elements which Viscount Sumner said in Blackwell v. Blackwell [1] give rise to a secret trust. From these findings Barry J. proceeded to the conclusion that the testator imposed upon the appellant certain secret trusts in favour of the respondents respectively. Under those trusts each of them is entitled to receive as from the testator's death the sum of three pounds per week out of the estate left by him to the appellant. The findings of Barry J. are as follows: The testator informed the appellant of the contents of his will before he died: he intended that as from his death the appellant should provide moneys out of the estate for the maintenance of his widow and the upkeep of her household and pay out of the estate three pounds a week to Miss Monaghan and three pounds a week to Mrs. Answerth during their respective lives: the testator communicated to the appellant that he desired her to make such provisions for his widow, Miss Monaghan and Mrs. Answerth respectively, and she assured him that she would do so: and that it was on the faith of her assurance that the testator made the appellant his sole executrix and gave her the whole of his estate, or, at least, left unrevoked the will with its absolute gift of all his property to her. I have read the evidence both oral and documentary many times and, adopting what Barry J. said about the credibility of the witnesses, I am unable to dissent from any of his findings of fact. I think that each finding is an inference which may be properly drawn from the evidence. The appellant's answer to the evidence adduced for the respondents and the documentary evidence is not precisely that the testator's gift of the estate to her is absolute. Her evidence at the trial clearly involves that the testator made the gift to her upon the faith of some arrangement about the disposal of the estate or part of it. In the case of the respondents she did not say that they were entirely excluded from the arrangement. What she said in evidence was that the testator expressly said to her that what he desired was that the appellant would, subject to her own discretion, pay three pounds a week to Miss Monaghan for life or until she married and a similar amount to Mrs. Answerth for life. The crucial issue at the trial turned out to be whether the payment of the annuities was to be subject to the appellant's discretion and in the case of Miss Monaghan only during her spinsterhood. The issue was really not whether the testator informed the appellant that he wished Miss Monaghan and Mrs. Answerth to receive these annuities out of his estate after his death for, according to the appellant's own evidence, he did so desire, but whether these payments were to be subject to her discretion. Barry J. did not believe the appellant's evidence that the testator reposed a discretion in her or said that Miss Monaghan's annuity should be paid only as long as she remained unmarried. It was argued that from the rejection of this evidence there cannot be inferred the opposite, namely, that the appellant assumed the obligation to pay these annuities. That is true, but the proof of the trusts found by Barry J. does not depend upon dealing with the appellant's evidence in that way. The proof depends upon the oral evidence adduced for the respondents (upon which Barry J. acted), the documentary evidence and the admissions made by the appellant in the course of her evidence.

[15]

This evidence may appear to provide somewhat slender support for respondent Monaghan's claim. The evidence for respondent Answerth is stronger as it includes an admission by the appellant in a letter she wrote to the respondent Answerth's mother saying "To Mrs. Answerth Mr. Gill has left £156 per annum to cease on her death". However, with some hesitation, I think the evidence is also sufficient to support the respondent Monaghan's claim and the whole of the order. At all events I am not prepared to say that, even after allowing for the advantage his Honour had in seeing the witnesses, I would have reached a different conclusion. It is true that, when in January 1947 the solicitor for the appellant wrote to each respondent and said that the appellant was allowing the payment as a result of a "discretion suggested" to the appellant by the testator and also disclaimed any legal liability in the appellant to pay, neither respondent challenged this and continued to receive the payment from time to time without protest until the payment ceased in 1950 when, following re-assessment of income tax and penalties amounting to £19,550 and reducing the net value of the estate to £28,500, the appellant refused to make any further payments to the respondents. Even then the respondents did not institute legal proceedings against the appellant until December 1952. This attitude of the respondents certainly tended to weaken whatever case they had. Again the position of the estate as regards income tax, and the liability to re-assessments and penalties, must have been known to the testator and could well have induced him to make the payments to the respondents subject to the appellant's discretion. But in failing to challenge the assertions in the letter of January 1947 the respondents could have had in mind that after all it was only one person's word against another's, that the appellant's version might be accepted by a judge or jury, and that it might be throwing good money after bad to commence proceedings while the appellant was still paying the annuities. Again the further delay in instituting proceedings after payments were withheld could have been due to a doubt as to the effect on the mind of a judge or jury of the failure to challenge or protest at the outset. As to the likelihood that the testator would give the appellant a discretion to withhold payments to the respondents because of possible income tax developments, that likelihood would have been greater if the estate had not been so large, and if the amount left after meeting taxation demands was likely to be small, because, as far as we know, the testator owed little to the appellant and presumably would not have been ready to sacrifice for her benefit others having greater claims on him.

[18]

The case for the respondents was that the testator in his lifetime expressed to the appellant a wish that after his death each of the respondents should receive from his estate the sum of three pounds a week for life, and that it was in reliance upon an undertaking by the appellant to carry that wish into effect, the undertaking being either expressed or implied by conduct, that he left his estate to the appellant. The jurisdiction thus appealed to was that which the House of Lords confirmed in McCormick v. Grogan [1] . A passage in the judgment of Lord Davey in French v. French [2] contains probably as clear an exposition of the principle as is to be found in the books. "It is now well established," his Lordship said, "and has been settled since the time of Lord Hardwicke, that if a testator communicates in his lifetime to a proposed devisee or legatee that he has left him his property, and expresses a wish that the property should be disposed of in a particular manner, and the legatee or devisee by acquiescence, or even by silence, accepts that communication, and the testator dies without any repudiation, a trust is fastened upon his conscience, as it is said, and he cannot afterwards either appropriate the property to his own use or dispose of it otherwise than in accordance with the wishes which were thus communicated to him, and which he has accepted. My Lords, it is said that this jurisdiction is based upon fraud, and so it is, because if you once get to this, that it is a trust which is imposed upon the conscience of the legatee, then if the legatee betrays the confidence in reliance upon which the bequest was made to him, then it is what I should think everybody would consider a fraud, though I take the liberty to say that the moral turpitude of any particular case must vary infinitely according to the circumstances of the particular case. My Lords, the basis of it is of course that the testator has died, leaving the property by his will in a particular manner on the faith and in reliance upon an express or implied promise by the legatee to fulfil his wishes, and your Lordships will at once see that it makes no difference whatever whether the will be made before the communication to the legatee or afterwards, because, as was said, I think, by Turner V.C. in one of the cases which were cited, the presumption is that the testator would have revoked his will and made another disposition if he had not relied upon the promise, express or implied, made by the legatee to fulfil his wishes" [1] .

[23]

On the other hand the appellant, to whom the whole estate was bequeathed, was not related to the testator, and there is nothing in the evidence to suggest that he either was or considered himself to be under any obligation to make any provision for her. She was a married woman of about fifty-four with grown-up children, and she was living with her husband who was the manager of a wool and hide store. She first met the testator about 1926, and got to know him better during the depression when they were both members of a committee dispensing sustenance to people in need. At that time and continuously thereafter he allowed her to use a room over his chemist's shop for the purposes of social work of various kinds in which she engaged. Then she began to give him assistance in minor ways in connection with his business, and the extent of her participation in his affairs gradually increased. She apparently took over the task of checking the daily receipts of the business by reference to the cash register record; she helped with stock-taking; and she checked figures for his income tax returns. By the time he retired, about three years before his death, she had undoubtedly become very useful to him in the management of his affairs generally. Upon retirement he sold his business, but retained the freehold of the premises and the use of the upstairs room. In that room he thereafter kept his personal books and papers and interviewed people who desired to consult him about sick animals; and she for her part continued to use the room for her social work, and kept a key of the office and the shop. They were thus in constant contact with one another. She knew a good deal about his household affairs; she knew his wife, who used to come down to the office to see her and twice visited her home; she knew the respondent Miss Monaghan and her position in the home; and she knew the respondent Mrs. Answerth. There must have been some degree of friendship between the appellant and the testator, but she testified that they always addressed one another as Mrs. Voges and Mr. Gill.

[36]

After the testator's death the appellant continued to pay all Mrs. Gill's household accounts out of moneys she had received from the testator's estate. Some accounts were paid by her monthly, and those which were paid at the door, like the baker's bills, she provided for by giving Mrs. Gill what she considered she would want to pay them. Asked in cross-examination why she had made these payments, she gave as her sole reason that the testator asked her to look after Mrs. Gill, who was his wife and an elderly woman. She said she did not regard herself as under any obligation to make these payments, but she agreed that the accounts she paid were those which the testator had paid during his lifetime, so that in continuing to use money from his estate to pay them she was carrying on his estate just as when he was alive. In doing this she was doing exactly what she had said in a letter that the testator wished her to do. The letter, of which only an undated part is extant, was written to Mrs. Morris, a sister of the testator and the mother of the respondent Mrs. Answerth, in reply to a request by Mrs. Morris to be allowed to know the contents of the will. It was written a little over a month after the testator's death. In it the appellant stated her position to be that of executrix, and she did not add that she was universal legatee. The first significant passage in the letter was: "Mr. Gill's wishes are that his estate be carried on just as it was when he was with us all". Naturally enough, the respondents rely upon this passage, coupled with the appellant's actual conduct in meeting the outgoings of Mrs. Gill's household during the remainder of her life, as suggesting strongly that the appellant had been given the estate in order that she might apply it in carrying out wishes which the testator had expressed and which she had accepted as binding upon her. The appellant could not deny that she had written the passage, but she did deny that she had had any conversation with the testator about it. The next statement in the letter gives added weight to the suggestion. It was: "To Mrs. Answerth Mr. Gill has left £156 per annum to cease at her death" - words which it is very difficult to imagine being used by a woman of the appellant's obvious capabilities if she believed that the estate had come to her free from any obligation. Yet again she denied that she had had any conversation with the testator about the matter. She admitted in cross-examination, however, that apart from the fact that Miss Monaghan's annuity was to cease on her marriage there was no difference between the two respondents as regards the provision the testator made for them.

[40]

This was the first occasion on which it was ever asserted by or on behalf of the appellant that the payment of the respondents' annuities was a matter for discretion, or that the respondents had not an enforceable right to the annuities as testamentary gifts from the testator. The appellant, it is true, swore that from the beginning she had made it clear that the testator's wishes were subject to her discretion, and that in fact the testator had done no more than say: "this is a suggestion, subject to your discretion, that you could give her (Miss Monaghan) £3 a week and Ina Answerth could have the same". But the learned trial judge emphatically refused to believe her. She was, his Honour said, a woman of great energy and considerable ability and shrewdness, but she was alertly on the defensive from the time she took the oath. He was satisfied that she had not told the full story of her dealings with the testator; and her insistence that the testator had used the phrases "this is a suggestion" and "subject to your discretion" seemed to his Honour to proceed from the exigencies of her situation as defendant in the action rather than from her recollection of a conversation that had really taken place. His Honour, who had the advantage of seeing her in the witness box, said that he did not regard her as a truthful and candid witness. In the transcript of the appellant's evidence, and particularly of her cross-examination, it is easy to see much ground for this unfavourable view of her. The answers she gave in cross-examination about the alleged discretion and what she understood to be the position in which the testator was placing her were about as unsatisfactory as they well could have been. The true character of what had passed between the testator and herself seems clearly enough to have been brought out in the course of a few questions and answers which may be quoted: - "You believed in October, after this conversation, that you were going to be in control of Mr. Gill's estate? - Yes."

[46]

It must be conceded that the appellant's case on the issue which thus presented itself was not without some claims to credibility. If in truth the testator had desired to leave all his property to the appellant beneficially there were two things against which they may both have thought that it would be important to guard. One was the possibility that local scandal might be aroused if it should become known that he had left his estate to the appellant to the exclusion of his widow and others who had just expectations; and the possibility that this may have been in the testator's mind is suggested by the appellant's evidence that he told her not to employ Hamilton solicitors. The other danger was that the disposition might be wholly or partially upset by the courts in proceedings either challenging the validity of the will or claiming provision out of the estate for the widow under the Testator's Family Maintenance provisions of the Administration and Probate Acts; and again there is a suggestion in the evidence that something of the sort may have occurred to the appellant at least, for one of her first statements after revealing to Miss Monaghan that the widow was omitted from the will was to say she would have to do something for Mrs. Gill to keep her quiet. Perhaps they thought that these possibilities might make periodical payments to the respondents as desirable as the meeting of Mrs. Gill's household expenses during the remainder of her life. Or perhaps the testator's ill-health, having reached the stage at which, in the appellant's language, "he wasn't interested enough, or didn't feel he could be bothered with the business side of his affairs", made him unwilling to trouble his head with questions as to the disposition of his estate after his death, and led him to leave the whole matter to the appellant to do what she should think right. It is certainly not impossible that the testator may have intended, while mentioning some benefits which he thought the appellant might bestow for reasons either of kindness or of prudence, nevertheless to leave her completely free of all legally binding obligation. The question is whether the probabilities should be regarded as in favour of that view or against it when the evidence is considered in the light of the trial judge's opinions as to the credibility of the witnesses.