Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 Hearing dates: 13 September 2012 Decision date: 18 December 2012 Before: Campbell JA at [1]
Bergin CJ in Eq at [114]
Sackville AJA at [115]Decision: Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: SUCCESSION - where person entitled to assert equitable defence in protection of disputed property has died intestate while under the protection of the NSW Trustee and Guardian - estate bona vacantia - administrator of deceased estate able to assert defence available to deceased in his lifetime - whether Crown entitled to bona vacantia property can enforce a defence belonging to intestate deceased - whether Crown takes title as successor or by statute - question not necessary to resolve where disputed property held at all relevant times by administrator of deceased estate
EVIDENCE - onus of proof - balance of probabilities - party bearing the onus must present enough evidence to enable the court to feel actual persuasion that a particular fact is so - where asserted fact is supported by only one piece of evidence - evidence sufficient on its own to support finding of relevant intention - whether a sufficient basis in surrounding circumstances to overcome evidence
WORDS AND PHRASES - "bona vacantia"Legislation Cited: Administration of Estates Act 1925
Evidence Act 1995
Interpretation Act 1987
NSW Trustee and Guardian Act 2009
Probate and Administration Act 1898
Public Trustee Act 1913
Statute of Distributions 1670
Succession Act 2006Cases Cited: Allcard v Skinner (1887) 36 ChD 145
Andrews v Hogan (1952) 86 CLR 223
Application des Gaz SA v Falks Veritas Ltd [1974] 1 Ch 381
Attorney General of Ontario v Mercer (1883) 8 AC 767
British General Insurance Co Ltd v AG [1945] LJCCR 113
Brown v The NSW Trustee & Guardian [2011] NSWSC 1203
Calverley v Green (1984) 155 CLR 242
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC [2007] FCAFC 132; (2007) 162 FCR 466
Delaforce v Simpson-Cook [2010] NSWCA 84
Dyke v Walford (1846) 5 Moore PC 434; 13 ER 557
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
Giumelli v Giumelli (1999) 196 CLR 101
Helton v Allen (1940) 63 CLR 691
Hunt v Barlow [2000] NSWSC 324
In re Barnett's Trusts [1902] 1 Ch 847
In re Mitchell deceased; Hatton v Jones [1954] Ch 525
In re Usines de Melle and Firmin Boinot's Patent (1954) 91 CLR 42
In the estate of Hanley [1942] P 33
In the Estate of Maldonado; State of Spain v Treasury Solicitor [1954] P 223
In the estate of Musurus, deceased [1936] 2 All ER 1666
Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur [1891] UKPC 42; (1891) LR 19 Ind App 9
Nelson v Nelson (1995) 184 CLR 538
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Partridge v McIntosh & Sons (1933) 49 CLR 453
Plunkett v Bull (1915) 19 CLR 544
R v Galli [2001] NSWCCA 504; (2001) 127 A Crim R 493
Re Wells, Swinburne-Hanham v Howard [1933] Ch 29
Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262
Waddell v Waddell [2012] NSWCA 214Texts Cited: Cross on Evidence, 8th Australian edition (2010) LexisNexis
Ing, Bona Vacantia, (1971) Butterworths, London
Spencer Bower and Handley, Res Judicata, 4th ed (2009) LexisNexis
Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 17th ed (1993) Sweet & Maxwell
Young, Croft & Smith, On Equity (2009) Thomson ReutersCategory: Principal judgment Parties: Felicity Anne Brown (Appellant)
The NSW Trustee & Guardian (First Respondent)
The State of New South Wales (Second Respondent)Representation: Counsel:
D Ash (Appellant)
A Hill; M Pringle (First Respondent)
Solicitors:
Burt & Allen Lawyers (Appellant)
Crown Solicitors Office (Respondents)
File Number(s): 2010/313444 Decision under appeal
- Citation:
- Brown v The NSW Trustee & Guardian [2011] NSWSC 1203
- Date of Decision:
- 2011-09-23 00:00:00
- Before:
- Brereton J
- File Number(s):
- 2010/313444
Judgment
CAMPBELL JA:
Nature of the Appeal
The Appellant, Mrs Felicity Brown, is the executrix of the estate of the late Ian Berwick Gammidge ("Ian"). She is also the sole beneficiary under Ian's will.
Ian had one child only, John Berwick Gammidge ("John"). John died, intestate, on 29 January 2009, aged 48. The First Respondent is the administrator of John's estate.
The State of New South Wales was joined as second defendant in the court below, and has been joined as a Second Respondent in the appeal. It took no active part in either the hearing in the court below, or in the appeal. Its joinder might be explained by the fact that John left no next-of-kin who would become entitled to his estate pursuant to s 61B(1)-(6) Probate and Administration Act 1898 ("P & A Act"). Once administration of John's estate has been completed the State will be entitled to John's estate pursuant to s 61B(7) P & A Act.
At the time of his death, John was the registered proprietor of Real Property Act 1900 land in Mosman, on which his home was erected. The Appellant brought proceedings in the Equity Division of the Supreme Court of New South Wales against the Respondents, contending (so far as is now relevant) that John had held the Mosman land on trust for Ian, and that the First Respondent held it on trust for the Appellant in her capacity as Ian's executrix. In the court below, Brereton J dismissed those proceedings: Brown v The NSW Trustee & Guardian [2011] NSWSC 1203. So far as now relevant, his Honour did so on the basis that he was not satisfied that John had held the land for Ian on either an express trust or a resulting trust. Alternatively, he held that any claim that there might have been that the Mosman house was held on trust was now defeated by confirmation, or estoppel.
The Appellant appeals against both those aspects of the decision below. Mr D Ash appeared for the Appellant. Mr A Hill and Ms M Pringle appeared for the First Respondent.
I have concluded that it should have been held that, at the time John acquired the Mosman land, he held it on trust for Ian. However, I have concluded that his Honour was correct in holding that any claim that there might have been that the Mosman house was held on trust was now defeated by confirmation or estoppel. On the way to that conclusion I have considered two novel arguments that Mr Ash raised. One concerns the effect of no grant of administration of John's estate having been obtained at the time of the proceedings in the court below. The other concerns the effect, on the availability of equitable defences, of the State eventually becoming entitled to John's net estate.
The Facts
There was no dispute about the relevant primary facts. At all relevant times, Ian lived in England. In 2000, Ian was aged 84. He owned a house called West Heath Cottage in Pirbright, Surrey, United Kingdom. His other substantial asset was a portfolio of shares that were held and managed for him by SG Banking. He was entitled to both a governmental pension, and an occupational pension. By September 2000, Ian had moved into sheltered accommodation. He had had several falls, and was no longer able to look after himself. His wife was still alive, but was in a nursing home suffering from dementia.
John had lived in Australia since about 1981. He worked as a stockbroker.
The Appellant is a niece of Ian. She and her brother Patrick Gammidge are the only children of Ian's only sibling. The Appellant has at all relevant times before this litigation began lived in England.
In September 2000, John travelled to England, at Ian's request. Ian asked John and the Appellant to look after the sale of his house. He said to them:
"I know I am never going to be able to move back home again so I would like you two to get an estate agent in and get the house sold. Split the money between you. I don't need it. My pension easily covers all my outgoings here."
He also said to them:
"I want you to sort out the house contents for me. There are a lot of things that have been in the family for years and I don't want them sold. You can share them out between you two and Patrick. I know there are some things that he would like to have."
John took exception to the Appellant being involved in the sale and distribution. Without the Appellant's knowledge, John engaged a solicitor, Mr Murphy, on behalf of Ian to deal with the sale. Mr Murphy's file was in evidence, but no evidence was called from Mr Murphy. In circumstances where both Ian and John are now dead, that means that findings about the basis upon which the Surrey house was sold, and the proceeds of sale were disposed of, must be made from the fairly sparse documents that are in evidence.
The first file note of Mr Murphy is dated 23 October 2000. It says:
"John Gammidge telephoned when he said his father had gone into a retirement home in March and they had now secured a buyer for the property at West Heath Cottage Pirbright.
He confirmed that his father's christian name was Ian and the sale price agreed was £465,000.00 with a private buyer.
...
He said that his father had the title deeds to the property and I said that I would forward to him 2 forms for completing and he could bring the forms back to me together with the Deeds so I could then issue a contract."
The evidence did not elucidate the contents of the "two forms for completing". As a contract was subsequently prepared and completed, Ian must have made the title deeds available for that purpose.
On 5 December 2000, Mr Murphy made a handwritten note, as follows:
"Telephoned John Gammidge when I confirmed to him that his letter/contract etc was ready for collection.
He asked if it was possible for the net proceeds to be paid to him into his a/c in Australia as his father wants to buy a house out there which he will do in his name. (His father doesn't want to leave the country yet while wife is still alive).
I said we would need written instructions from his father and his a/c details and that this could be arranged.
He asked if we could draw up letter for father just to sign - I said this would be okay."
Mr Murphy prepared such a letter, as follows:
"Dear Mr Murphy,
Re: MY SALE OF WEST HEATH COTTAGE
Please accept this letter of my formal instructions for you to pay the net proceeds of sale to my son John Gammidge directly into his account in Australia."
Ian signed it. The letter is undated, but Ian probably signed it prior to 13 December 2000.
On 13 December 2000, Mr Murphy wrote to John, confirming that contracts had been exchanged on 8 December 2000, and requesting details of John's bank account "in order that I may arrange to telegraph the net sale proceeds to your account in accordance with your father's instructions". The sale was completed on 19 December 2000. The net proceeds, amounting to £462,445.99 were paid by cheque to John that day.
For some years John had been in a de facto relationship with Ms Jeanette McLellan. John transmitted the money to Sydney, to enable Ms McLellan to carry out the purchase of the Mosman house. There is no basis in the evidence for concluding that the Mosman house had been identified at the time the sale proceeds of the Surrey house were paid to John. The transfer of the Mosman house to John is dated 5 April 2001.
John's mother died on 2 May 2001.
The primary judge found:
"John remained in England until about September 2002. In January 2001, Ian instructed his stockbrokers to transfer his valuable share portfolio, worth in the order of £350,000 (equivalent to about $1 million (AUD) at the time), to John, but upon terms that Ian would remain entitled to the income during his life time. ... Ian pursued this transaction notwithstanding advice from stockbrokers that there were more efficacious ways of implementing it, and the arrangement that he would remain entitled to the income appears to have been an oral one between him and John."
John continued to make the income from the share portfolio available to Ian for the remainder of Ian's life.
In September 2002, John returned to Australia. At that time he was mentally ill, and suffering from cognitive difficulties associated with alcoholism. Ms McLellan applied to the Guardianship Tribunal for orders for his financial management and guardianship.
Ian engaged Sydney solicitors, Messrs Burt & Allen, to act for him in connection with the Guardianship Tribunal proceedings. On 10 December 2002, those solicitors lodged with the Guardianship Tribunal a request for Ian to be joined as party. The form by which that application was made stated:
"What are your concerns for the welfare of the person the application is about?
For the health & wellbeing and to secure the assets of my son to provide for long term medical and live in treatment for him.
Are there other reasons why you should be joined as a party?
I am the father, am 86 years of age and have no financial interest in the matter other [than] to ensure my son's best interests are protected." (Handwritten answers in form italicised)
The primary judge made the following findings at [11]-[12]:
"On 11 December 2002 an officer of the Guardianship Tribunal spoke to Ian, who said that he did not recall signing and sending a letter to Mr Burt authorising him to act and that Felicity was dealing with the issues regarding his son's finances, but also that he had no objection to Ms McClellan's [sic] application, though requesting that Felicity be contacted regarding it.
Having been informed of that conversation - including a statement attributed to Ian to the effect 'I'm a bit senile' (when saying he had no recollection of signing the authority to Mr Burt) - Felicity responded on 18 December that she had spoken to Ian's GP, who was writing a letter stating that he was definitely not senile. On 17 December 2002, Doctor Bishop in Surrey certified:
'In my opinion the above named [Ian Gammidge] is of sound mind and does not suffer from senile dementia. He suffers from a normal degree of forgetfulness only to be expected in an 80 year old, particularly when woken from sleep by a telephone call in the middle of the night.'"
It was someone from Mr Burt's office who informed the Appellant about the conversation that the officer of the Tribunal had had with Ian. In the email dated 11 December 2002 that gave the Appellant that information, it was also stated:
"We repeat, it is clear in the writer's mind that Ms McLellan wishes to have the share portfolio for John's benefit and presumably stay in the house and preserve it."
A report prepared for the Guardianship Tribunal dated 23 December 2002 shows that at that time John was an inpatient at the Royal Rehabilitation Centre at Ryde. The report says that it was being contemplated that "there may be a need for his home in Mosman to be sold, if it is not possible for him to return to live there". That report contained information attributed to Ms McLellan:
"[John] owns a house in Mosman and has no other assets in Australia, except for a Commonwealth Bank account with approximately $300.00 ... [S]he believes there is a portfolio of shares and 20,000 pounds (UK) held for Mr Gammidge by a stockbroking firm in England. ... [T]he portfolio of shares belonged to [Ian] but was put into [John's] name to avoid death duties ... [T]he money held by the stockbroking firm belonged to [John].
...
[John] has accumulated various debts in relation to the property at Mosman and that she has borrowed money to pay the rates and other bills in relation to the house, as she is not currently employed ... [John] is not receiving a disability pension and has no income at present."
That report also stated:
"On 19 December 2002, [the Appellant] confirmed that shares owned by [Ian] were put into his son's name for safekeeping when [Ian] was very ill some time ago. [The Appellant] advised that [Ian] needs the income from the shares for his day to day needs and it appears that [Ian] is currently receiving the income from the share portfolio.
[The Appellant] reported that [Ian] is considering taking legal action in the UK courts to have the share portfolio placed back into his own name, but she advised that they will await the Tribunal's decision, before deciding what course to take."
Over succeeding years the Appellant continued to indicate that she was considering bringing action to recover the share portfolio. However, neither in this conversation on 19 December 2002, nor subsequently until 21 September 2010, when the Statement of Claim that commenced the proceedings from which this appeal was brought was filed, did she raise any doubt about John's ownership of the Mosman house.
It was also on 19 December 2002 that Ian made a will in Surrey appointing the Appellant and Mr Murphy as his executors and trustees. It provided for the residue of his estate, after payment of executorship expenses and inheritance tax, to be paid to the Appellant, and if she predeceased him, to her children. By about this time, Ian had appointed the Appellant as his attorney, under an enduring power of attorney.
On 24 December 2002, the Guardianship Tribunal appointed the Public Guardian as John's guardian for a period of twelve months, and committed his estate to the Protective Commissioner for management, with a review to occur in twelve months.
At the date of this interim order in December 2002, John's estate consisted of the Mosman house, some shares in the UK, and around $2,500 cash in a bank account. The Office of the Protective Commissioner ("the Commissioner") subsequently ascertained that John also had cash of approximately £45,000 in an account with English brokers called Finn & Co. A listing of John's assets as at 3 October 2003 shows them as comprising the Mosman house, nearly $10,000 in a trust account of the Commissioner, the funds in the account with Finn & Co, and certain shares. Those shares were nearly all in overseas companies, though there were some shares that appear to be in Australian companies. The total value of the shares (including the possibly Australian shares) was approximately $455,300.
On 24 February 2003, the Commissioner wrote to Ian, saying inter alia:
"I understand that you generously provided John with funds to purchase his residence at Mosman almost two years ago. Similarly there is a large portfolio of shares that you settled upon John from which the income remains your property. Who else can we contact in order to obtain fuller details of these arrangements and what other significant persons should we be contacting in order better to manage John's affairs?"
The Appellant instructed London solicitors, Calvert Smith & Sutcliffe, to act on behalf of Ian concerning that request. Calvert Smith replied, on 21 July 2003, to the Commissioner's letter of 24 February 2003, saying that they had been requested by the Appellant:
"... to look into the circumstances whereby [Ian's] portfolio of shares were transferred to his son, John, with [Ian] continuing to receive dividend income therefrom. We confess that we are having some difficulty in ascertaining the full facts from the brokers but hope to be able to report to you fully concerning this within the near future.
...
From our point of view as solicitors for [Ian], we are extremely concerned [about] the purported gift because, as a direct result of this, our client has incurred a significant capital gains tax liability which he is unable to pay ..."
The Commissioner replied to Calvert Smith on 31 July 2003, saying:
"Currently [John] does not receive any income in Australia as it is believed that he has substantial investments overseas, which precludes him from being eligible for any Social Security benefits.
...
At this time this Office has been unable to make any decisions about these investments, as we have not been provided with any details of [John's] portfolio, despite our requests."
The letter requested information concerning the portfolio.
On 13 August 2003, Calvert Smith wrote to the Commissioner, saying that they had had the opportunity to speak to the brokers regarding the portfolio and hoped to respond to the letter of 31 July shortly. On 29 September 2003, Calvert Smith wrote a lengthy considered reply to the request. Like the primary judge, I will set it out in full. The italics in the letter were added by the primary judge:
"We write further to our letter of 13th August 2003 and are now able to report to you in detail concerning your client's portfolio of shares currently held by J M Finn & Co, brokers.
As you are aware, we are instructed by [John']s father, [Ian], via his attorney [the Appellant]. We enclose a certified copy of the enduring power of attorney for noting in your records.
The background to the matter is that around two years ago, when [Ian] was aged 84, he was in the process of selling his home and moving into sheltered accommodation. His assets at that stage comprised his home, valued at £463,300, and the share portfolio in question, at the time held by S G Banking, valued at £255,605,52. His income comprised his State pension, an Occupational pension and the dividend income from the portfolio of shares.
[John] was at that time living in Australia but came to the UK to support his father with the move.
Before turning to the gift of the shareholdings I would like to draw to your attention circumstances regarding the sale of [Ian's] property. The house was sold on 20th December 2000 and the net proceeds of sale of £462,445.99 were sent to [John's] bank account in Australia. His explanation to the solicitors was that his father wished to purchase a property in Australia. The solicitors prepared a note for [Ian] to sign confirming this and [John] obtained his father's signature to this. [Ian] has no recollection of signing the document. At no time did the solicitors visit [Ian] personally in hospital, or speak with him, and the file suggests that they had no knowledge of the seriousness of his illness at that time.
It is our opinion that the solicitors instructed in the sale of the property were possibly negligent in not obtaining [Ian's] instructions in person. We do not know, as [Ian] has no memory of these events, whether he intended to gift the proceeds of sale of his home to his son John. That said, [Ian] would not wish to pursue any claim for return of the property from his son or any claim for negligence against the solicitors, as his own health is extremely frail and he would be unable to withstand the rigours of a complicated court case. In addition, he would have no desire to bring any action against his son, for whom he cares very much.
At the time the transfer was made, being 7 th February 2001, [Ian] was recovering from the serious illness which had hospitalised him in late 2000. Although [Ian] now has no recollection as to the transfer of shares, there is no suggestion that at the time he was lacking in mental capacity.
As the shares were held in a nominee account, all that was required to process the transfer was a simple note signed by [Ian]. A note was prepared by S G Banking for [Ian] as an example of the type of document they required and [Ian] in fact signed the draft. Michael Mould [from S G Banking] visited [Ian] before the document was signed and, at that time, formed the opinion that [Ian] had the mental capacity to make the decision to transfer the portfolio. We have examined [Ian's] hospital and GP records for this period, which tend to support this view.
As regards the capital gains tax consequences of the transfer of shares; Mr Mould drew this to [Ian's] attention and [Ian] confirmed that he and his son John had spoken to Ian's accountant regarding this. Mr Mould therefore felt that [Ian] had received separate advice concerning this. We have also spoken with [Ian's] accountant, who confirms that transfer of the entire portfolio was discussed and he advised against this, as the capital gains tax consequences would be severe. The accountant advised a graduated transfer of shares over a period of years from father to son, in order to gain maximum benefit from the annual CGT allowance.
We questioned David Higham regarding the fact that the dividends continued to be paid to Ian, rather than to John, and were advised that this was a verbal understanding at the time between father and son, and another was recorded on paper with S G Investments.
David Higham has advised us that he is willing to write to you directly should you so wish.
In acting on [Ian's] behalf, we have two areas of concern, namely:
1. That the dividend income should continue to be paid to [Ian] in pursuance of their verbal agreement made at the time of the transfer of the shares. The dividend income forms a major part of [Ian's] income, the remainder being made up by his State pension and Occupational pension.
Our original intention had been to try and reverse the gift of shares entirely, as it is possible that [Ian] will need to access the share capital in the future. At present he is in sheltered accommodation and his income is sufficient to pay the fees and to cover his needs. However, if his health deteriorates to such an extent that he needs to move to a nursing home then the fees will be considerably higher and he may have insufficient resources for this. However, we have found nothing to suggest during our investigations that [Ian] was lacking in capacity at the time he made the gift to his son, nor that he was placed under any duress at that time. We do not therefore now feel that it is appropriate to try and reclaim the gift of shares.
There is, however, a very real problem which may occur if [Ian] needs to move into nursing care, as the balance of fees will need to be met by the local authority. At that time the local authority has the right to look back into any gifts made during the five year period prior to the claim on local authority funds. They have power to revoke such gifts in circumstances where they feel the gift was made in order to divest a person of their assets. In other words, they may claim back the entire portfolio, which would, in turn, leave your client financially worse off.
2. The other concern we have is in regard to the CGT bill. As advised, our client has no resources other than the income already stated and this is only enough to meet his immediate needs. We do not at this stage know the size of the capital gains tax bill but will let you have this information as soon as it is to hand. [The Appellant] is instructing [Ian's] accountant to complete the tax return and the accountant will also calculate the capital gains tax liability.
If [Ian] cannot pay the capital gains tax bill the Inland Revenue may accept payment over a number of years in instalments but, in the event of [Ian's] death, there could be insufficient funds in his estate to pay the balance of the bill.
It is therefore possible that [Ian] could either be declared bankrupt by the Inland Revenue or his attorney, [the Appellant], may file for bankruptcy on his behalf. In these circumstances his trustee in bankruptcy may be able to reverse the gift of the shares from father to son in order to pay the outstanding capital gains tax bill.
We have spoken to [the Appellant] concerning all these possibilities and she, in turn, has spoken with [Ian]; all are anxious to avoid any unpleasantness, or ongoing legal wrangles, while recognising the very real need to deal with payment of the capital gains tax liability and to ensure [Ian's] continued financial security.
We are, however, also aware that the portfolio may be needed to provide an income for John, and that you will be concerned to ensure that this is done.
We feel that John has an obligation to continue providing Ian with an income from the share dividends for the rest of Ian's life, and that any income John needs should be provided by selling the house in Mosman which, by all accounts, is a large detached property in a very expensive area in the city, and buying a smaller, or suitable, property, which would leave a substantial amount of money for John's living expenses.
In respect of [Ian's] capital gains tax liability; we would be grateful if you would consider meeting this liability when it occurs from the sale of some of the investments in order to avoid any likelihood of [Ian] being made bankrupt.
We look forward to hearing from you in the near future."
In December 2003 and January 2004, the Guardianship Tribunal held further hearings to review its orders of 24 December 2002. Mr Burt obtained leave to appear on behalf of Ian at these hearings.
By a letter dated 17 December 2003, Mr Burt reported to the Appellant concerning a hearing at the Guardianship Tribunal on 10 December 2003:
"[John] has indicated that from his point of view all of the monies given to him by his father are now his and he has absolute control over the monies. He did however and perhaps carefully so said to the Tribunal that if his father ever needed money he only need ask for it. That in itself is a very ambiguous statement and still leaves Ian in the unfortunate position that should he require further finance for his lifestyle which can only increase as he gets older or his physical condition deteriorates he will be at his son's beck and call.
We believe that it may be in Ian's best interest if we maintain our stance that the financial management of John's finance be left with the Protective Commissioners Office on a permanent basis.
This would have the tactical advantage of us dealing with the Protective Commissioners Office who would be more amenable to settling the issue of Ian's claim rather than with John who will have no inclination to settle the claim at all."
On 21 January 2004, the Guardianship Tribunal delivered its decision concerning the review of the orders it had made relating to John. It reappointed the Public Guardian for two years, and confirmed the financial management order, so that it would operate indefinitely. The reasons for decision record:
"He had a house at Mosman and valuable share holdings in the United Kingdom. There were issues about the ownership of the shares in the United Kingdom and who was entitled to the income from those shares. That income was currently being paid to [John's] father, [Ian]."
It noted:
"There were also complex issues to be addressed in relation to [John's] affairs:
- [John's] former de facto partner, Ms McLellan, was pursuing a de facto property settlement;
- There continued to be major issue to be resolved in relation to the shares in the United Kingdom."
In July 2005, the Commissioner, on John's behalf, settled a claim that Ms McLellan had made for a property adjustment order. It paid her $47,500, and costs of $4,000.
Ian died on 9 October 2005. The High Court of Justice at Winchester granted probate of his 2002 will to the Appellant, with liberty to prove reserved to Mr Murphy, on 25 April 2006.
On 6 March 2006, the Appellant and her brother Patrick attended on an officer of the Commissioner. They informed that officer that, in 2000, John:
"... had come back and obtained a POA [power of attorney]. He had sold the family home in Pirbright and the contents and the proceeds had 'disappeared'. It was at the time that the Mosman property had been bought.
It was said that the father's shares had been transferred to John and that the father had been left penniless. The father had chosen to do nothing about it. There was no information and no knowledge of any trust."
The officer recorded a concern that the Appellant and Ms Brown expressed:
"There were concerns held, mainly due to the lack of information provided by this office and [sic] that John was being over serviced. In this latter regard it was the fear that once the money had been spent that he would be given back to the family to care for. I was able to re-assure them in this regard."
Following Ian's death, Mr Murphy, acting for the Appellant as administratrix of Ian's estate, obtained payment from the Commissioner of inheritance tax that became payable by John on Ian's death. A file note of the Commissioner records advice received "that it is properly payable by the client on those inter vivos gifts he received from his now deceased father who was a United Kingdom resident". The Commissioner paid the tax, of approximately $109,000, in the course of 2006. Some of John's English shares were sold to raise that money. During the time that the Commissioner was managing John's affairs, John was unable to obtain a disability pension or any form of income support or assistance from Centrelink because the value of his assets exceeded the limits of the relevant asset test.
As mentioned earlier, John died intestate on 29 January 2009. He had lived in the Mosman house, with some assistance provided by the Commissioner, until his death. The Commissioner sold some of the UK shares to obtain funds to pay for services that John required to remain in the Mosman house. Outgoings related to the house had been paid from his assets. His assets at the time of his death were the Mosman house, about $22,000 held by the Commissioner, and money and shares in England valued at about $186,000. Because he died domiciled in New South Wales the whole of his personalty, and his New South Wales realty passes in accordance with the New South Wales laws concerning intestacy. Because when John died he had no spouse, and no relatives closer than cousins, his estate passes to the Crown.
On 16 September 2010, the probate of Ian's estate that the English High Court had granted to the Appellant was resealed in the Supreme Court of New South Wales. Mr Murphy either acted on Ian's probate or to obtain an extract of it to facilitate the reseal, or both.
As mentioned earlier, the Statement of Claim to commence the proceedings in the court below was filed on 21 September 2010. That was the first occasion on which it had been alleged that the Mosman house was held on trust for Ian. At that time John remained the sole registered proprietor of the Mosman house. No grant of representation of his estate had been taken out at that time: letters of administration were granted to the First Respondent on 3 February 2011, a date that was before the hearing in the court below.
Non-Issues
At the hearing in the court below the Appellant claimed an entitlement to the Mosman property on various bases, including:
- That John was Ian's agent in selling the Surrey house, and had acted in breach of his fiduciary duty in transferring the net proceeds to himself.
- That the sale of the Surrey property was procured by John unconscientiously taking advantage of Ian when Ian's ability to make a proper judgment as to what was in his best interests was impaired.
- That the sale of the property was procured by undue influence.
- That John was estopped from denying that the Mosman house belonged beneficially to Ian because John represented to Ian, by Ian's agent Mr Murphy, that if the sale proceeds of Surrey house were paid to John, Ian would retain a beneficial interest in a house purchased in Australia with them.
The judge rejected each of those contentions. They are not pressed on this appeal.
Express or Resulting Trust?
The primary judge rejected a submission that the circumstances in which John received the proceeds of sale of the Surrey house gave rise to either an express or a resulting trust, capable of enforcement against the Mosman house.
The property that John received was money. In the absence of evidence beyond that Ian authorised the money to be paid to him, John would have legal title to that money. John's legal title would be the only relevant title unless there was some factual basis for contending that someone else had equitable rights concerning the money. If John purchased the Mosman house with his own money, he would hold it without Ian having any equitable rights concerning it. That situation would not be a case of a purchase of property in the name of A with the purchase price being provided by B, the sort of situation in which the competing presumptions of advancement and resulting trust operate: Nelson v Nelson (1995) 184 CLR 538 at 547. However in its practical effect Ian's payment of the money to John, that he used some months later to buy the Mosman house, is quite similar to Ian paying the purchase price of the Mosman house. In the latter situation in which it would be presumed, in the absence of other evidence, that the purchase price provided by a father for a property in the name of his son had been provided by way of advancement. It is no surprise that the same result is reached, so far as title to the Mosman house is concerned, in the situation where Ian gave John money, that John later used to buy the Mosman house, and in the situation there would have been if Ian had provided the purchase price of the house.
The onus would be on the Appellant to satisfy the court on the balance of probabilities that John received the sale proceeds on the basis that he would hold the house purchased with those proceeds on trust for Ian. To satisfy an onus of proof on the balance of probabilities is not simply a matter of asking whether the evidence supporting that conclusion has greater weight than any opposing evidence. As well, both under the common law and also under s 140 Evidence Act 1995, the evidence must be enough to enable the court to feel actual persuasion that a particular fact is so: Helton v Allen (1940) 63 CLR 691 at 712; Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 at [136]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC [2007] FCAFC 132; (2007) 162 FCR 466 at [31]; R v Galli [2001] NSWCCA 504; (2001) 127 A Crim R 493 at [55]; Nguyen v Cosmopolitan Homes [2008] NSWCA 246, McDougall J at [55], McColl and Bell JJA agreeing. I respectfully agree with the observation in Cross on Evidence, 8th Australian edition (2010) LexisNexis [9130] and footnote 184 that "according to ALRC 26 [998], the provision does not require actual belief; but that is not what the language says". What s 140(1) says is:
"In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities." (emphasis added).
It is perfectly possible for there to be a scrap of evidence that favours one contention, and no countervailing evidence, but for the judge to not regard the scrap of evidence as enough to persuade him or her that the contention is correct.
However, in the present case the judge correctly recognised that, if one took the note of 5 December 2000 (extracted at [16] above) on its own it supported a conclusion that the money was transferred to John with an intention that a house in Australia would be purchased by John, in John's name, but beneficially for Ian. Every occasion on which "he" or "him" appears in that note is a reference to John.
The judge went on to say, at [26]:
"However, the 5 December note could only be a very small part of the circumstances informing an analysis of the December transaction. It records what John told the solicitor, at one moment in time. There is, I accept, a reasonable inference that that was sourced in a conversation with Ian, but it does not follow that that was the only, or the last, relevant conversation with Ian. Nor can it be assumed that it spells out the ultimate terms on which the funds were advanced to John."
It is uncontroversial that the evidence is such that this Court is in as good a position as the trial judge to reach factual conclusions.
Mr Ash submits that here the judge has posed the wrong question, by presuming that a trust could be found only as a result of conversations between John and Ian. Mr Ash submits that, rather, it is communications, either direct or indirect, between Mr Murphy and Ian that should have been enquired into.
I do not accept that the judge has overlooked relevant communications between Mr Murphy and Ian. He specifically referred to and took into account, the undated instructions in writing that Ian signed.
The primary judge gave, at [26]-[28], the following reasons for not regarding the 5 December note as leading to the conclusion that the property was held on trust:
"First, the instructions in writing signed by Ian were not limited in any such way; they simply authorised the payment of net sale proceeds 'to my son John Gammidge directly into his account in Australia', unconditionally. Secondly, the October conversation deposed to by Felicity, in which she attributes to Ian instructions to her and John to sell his property and divide the proceeds between them, is inconsistent with an intention on Ian's behalf to retain a beneficial interest in the proceeds. Thirdly, the practically contemporaneous transaction concerning his shareholdings in early 2001 confirms that while interested in retaining an income, he was divesting himself of his capital assets. Fourthly, the statement - sourced in either Ian or Felicity in the 12 December 2002 application to be joined to the Guardianship Tribunal proceedings - is inconsistent with any claim or belief on Ian's behalf that the Mosman property, though purchased in John's name, was beneficially Ian's. Fifthly, the letter of September 2003 is equivocal when it comes to Ian's December 2000 state of mind, recording:
'Ian Gammidge has no memory of these events, whether he intended to gift the proceeds of sale of his home to his son John.'
Sixthly, and to my mind most importantly, it would be a grave mistake to approach analysis of this transaction on the basis that what little is now known of it, is all that there was to it. There must have been further conversations and dealings between John and Ian surrounding, at least, the execution of the December instructions concerning the proceeds of sale. It is apparent, from Felicity's evidence, that John took exception to the proposal that she be involved in the sale and distribution of the property. What further discussions took place between John and Ian on that topic. to which she was not privy, are simply unknown. That does not mean to say that there were none. In my view, it is inescapable that there must have been. While Felicity says that she believes that this is the kind of thing Ian would have mentioned to her, if the result was that she was to be "cut out" of a benefit of which she by then had some expectation, it is not at all unlikely that the benefactor would have remained silent to her on the subject.
It is also important to bear in mind that the September 2003 letter was written in circumstances where Felicity had the conduct of Ian's affairs for relevant purposes and, it might be inferred, was not less than diligent in pursuing the possibility of finding bases on which the 2000 transactions might be vitiated. The 2006 conversation with the Office of the Protective Commission creates the impression that, despite Felicity's best efforts, Ian had chosen to do nothing about the share portfolio. All that supports an inference, which I draw, that for his own reasons and despite at least some encouragement on the part of Felicity, Ian decided that it was best to leave things as they were. This is of significance for reasons to be discussed later in this judgment but, for present purposes, one very good explanation is that the transaction was not other than in accordance with Ian's contemporaneous intention. The fact that he might say in September 2003 that he had no memory of the events could well be a convenient means of avoiding having to explain to Felicity what he had done by way of favouring John over her.
In any event, bearing in mind the contrary indications - particularly the December 2002 statement that he had no financial interest, the December 2000 instructions to pay the proceeds to John unconstrained by any condition, and the October 2000 conversation which evinced no intention to retain a beneficial interest, coupled with the contemporaneous disposition of his share portfolio - I am unpersuaded that the 5 December file note contains the terms upon which Ian ultimately authorised the advance of the proceeds of sale of the Surrey cottage to John."
I accept Mr Ash's submission that the matters to which the primary judge referred are not sufficient to displace the conclusion that would otherwise be drawn from the note of 5 December 2000. I will consider those matters seriatim.
The undated letter of instructions concerning the proceeds, that Ian signed, is not inconsistent with the contemplated house in Australia being beneficially Ian's house. The obtaining of such written instructions was referred to in the 5 December 2000 note, in a context where those instructions were a means of enabling the house in Australia to be purchased, in John's name but for Ian. Mr Murphy was retained to act only concerning the Surrey conveyancing transaction, not concerning any proposed trust. It is a usual incident of a solicitor's task, when acting for a vendor in a conveyancing transaction, to arrange that the net purchase price is paid to the vendor or as the vendor directs. There was no occasion for Mr Murphy to record in the instruction letter the purpose for which Ian was authorising the money to be paid to John.
I agree with the primary judge that the October 2000 conversation ([11] above) is inconsistent with an intention on Ian's behalf to retain a beneficial interest in the proceeds of sale of the house. However, I would infer that between October 2000 and December 2000 Ian had changed his mind about what he wanted to do with the proceeds of sale. There is no basis in the evidence for treating the 5 December 2000 note as not accurately expressing Ian's intentions concerning those proceeds, as at that date, and John's understanding of and willingness to implement Ian's intentions.
Ian's action in disposing of his share portfolio in early 2001 is consistent with him wanting to have that portfolio out of his name, but the arrangement concerning the income of the shares shows that the transfer was not an out and out gift. His reservation of the right to receive the income was of considerable financial importance to him, as it appears, from the 29 September 2003 letter, that the dividend income formed a major part of Ian's income. There is no inconsistency between Ian having the share portfolio taken out of his name, while reserving one type of interest in it, and his having the house proceeds taken out of his name, on the basis that he would have a different type of interest in the product of those proceeds. Ian's transfer of the share portfolio to John, on the basis of an undocumented understanding that Ian would have the income from the shares, shows his willingness to place great faith in John so far as important financial matters were concerned.
The statements made in Ian's December 2002 application to be joined as a party in the Guardianship Tribunal proceedings ([24] above), taken by themselves, are a fairly clear statement that, by that time, Ian was not asserting any financial interest of his own in John's assets. From the mere fact that he made the statement, one can draw no conclusion about whether it had been his intention all along that John should have the entire proceeds of sale beneficially, or whether Ian had changed his mind about the proceeds of sale of the Surrey house being used to purchase a house in Australia in John's name but for Ian. The note of 5 December 2000 shows that Ian did not want to leave the UK while his wife was still alive, but by December 2002 his wife had been dead for over 18 months. His remaining in England after her death is at the least consistent with him having had a change of mind.
The judge is correct in saying that the letter of September 2003 ([36] above) is equivocal when it comes to Ian's December 2000 state of mind. Being equivocal, it does not tend to displace the inference that would otherwise be drawn from the 5 December 2000 file note about what Ian's intentions were in December 2000.
I would accept that there must have been further conversations and dealings between John and Ian concerning the proceeds of sale. However, whatever those discussions might have been, it is speculation what their content was.
The judge rightly drew attention at [3] to the nature of the evidence concerning the December 2000 transaction:
"... both principals are deceased. Thus the two people who could best inform the court of what happened are unavailable. While Felicity has some knowledge of the circumstances, she was on the periphery of the transaction then. Her knowledge is plainly incomplete and much of it, derived subsequently, appears to be of a hearsay character. The solicitor who acted on the transaction was not called, although the contents of his file were available. They are, themselves, relatively sparse. The relevant evidence falls into two categories. The first is such direct evidence as is available pertaining to the December 2000 transaction, and the second is evidence emanating from subsequent inquiries into it, largely as a result of proceedings in the NSW Guardianship Tribunal concerning John."
It is elementary that in a claim based on communications with a deceased person, the court treats uncorroborated evidence of such communications with considerable caution, and is entitled to regard as of particular significance any failure of the claimant to bring forward corroborative evidence which was, or ought to have been, available: Plunkett v Bull (1915) 19 CLR 544; Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 789; Hunt v Barlow [2000] NSWSC 324 at [5]-[8] per Bryson J; Cross on Evidence at [15150]. Ultimately, though, the question remains whether the claim has been made out on the balance of probabilities. The high degree of suspicion that Lord Morris showed in Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur [1891] UKPC 42; (1891) LR 19 Ind App 9 to the absence of possible corroborating witnesses is a function of the highly suspicious and unlikely character of the claim of the plaintiff in that case, internal inconsistencies in the evidence, and allegations of forgery. It does not stand for a principle that all possible corroborating witnesses must always be called in a claim against a deceased estate. In the present case, the file note of 5 December 2000 records a clear admission by John that is against his interest. The admission was made only two weeks before John received the money. It is a significant enough piece of evidence, if it is considered by itself, to establish that John received the money on the basis that he would use it to buy a house for Ian. No submission was made by the First Respondent that the absence of evidence from Mr Murphy should in any way count against the Appellant. No submission was put that the terms of the 5 December 2000 file note were insufficiently precise to give rise to a trust, or that, if it gave rise to a trust, it was anything other than a trust of the entire beneficial interest in the money advanced.
In my view there was insufficient basis to overcome the conclusion that the judge drew from the 5 December 2000 note considered on its own. In my view, the proper conclusion from the evidence as a whole is that when John received the proceeds of sale of the Surrey house he received them on trust to buy a house in Australia for Ian. When that is an express trust of money, there is no requirement of writing, like s 23C Conveyancing Act 1919 would impose if there were an express trust of land. The effect of that trust is that when John used the money, some months later, to buy the Mosman house there is a situation where Ian's money is used to buy a house in the name of John. In that situation a presumption of advancement would arise, unless it was rebutted by evidence of the actual intention of the parent who provided the money: Nelson v Nelson at 547. The note of 5 December is sufficient evidence to rebut that presumption.
The primary judge rejected a submission that there was a resulting trust of the Mosman property, in accordance with Calverley v Green (1984) 155 CLR 242, by reason of Ian having provided the purchase money for the Mosman property. The primary judge held that the presumption of advancement between parent and child would operate, rather than any presumption or resulting trust. He held that the presumption of advancement had not been rebutted by evidence of a contrary intention on Ian's part.
Mr Ash submits that the presumption of advancement should be found to have been rebutted, and thus that there is a resulting trust for Ian.
In Nelson v Nelson, at 547-548, Deane and Gummow JJ said:
"Where the presumption of advancement is rebutted, the trust which then is enforced is a resulting trust, not an express trust. The trust thus is outside the operation of the requirement for writing in s 7 of the Statute of Frauds 1677 (Eng) and its modern Australian equivalents. Accordingly, oral evidence is admissible to rebut the presumption of gift and thus to affirm the operation of the presumption of resulting trust. Professor Scott deals with the matter as follows:
'This reasoning is somewhat artificial; but trusts arising where the evidence shows an intention to create a trust when land is purchased in the name of a relative were considered to be resulting trusts before the enactment of the Statute of Frauds, and that statute expressly excepts resulting trusts from its operation.'" (citations omitted)
That reasoning is applicable to this case. When the Mosman house was purchased, John held it on a resulting trust for Ian.
Estoppel or Acquiescence
The pleaded defence of the First Respondent raised as a defence estoppel or acquiescence arising from the letter of 29 September 2003. However, the case was conducted both below and on the appeal on the basis that a wider range of conduct than that letter was relied upon as the basis for defeating any trust that might otherwise exist. When there was no realistic prospect of obtaining any additional evidence concerning any of those matters, beyond that which had been put before the court, Mr Ash was right to adopt that course.
The Judgment Below
The primary judge did not give separate consideration to the separate equitable doctrines that were relied on in defence. He quoted the remarks of Lindley LJ in Allcard v Skinner (1887) 36 ChD 145 at 189:
"Whether the plaintiff's conduct amounts in point of law to acquiescence or laches, or whether it amounts to an election not to avoid a voidable transaction, or whether it amounts to a ratification or a confirmation of her gifts, are questions of mere words which it is needless to discuss. In my judgment it would not be fair or right to the defendant to compel her now to restore the money sought to be recovered by this appeal. Nor, in my opinion, would such a result be in conformity with sound common legal or equitable principles."
The primary judge made findings concerning the facts that he held gave rise to an equitable defence:
"The evidence establishes no attempt to impugn the transaction for just on ten years from its inception. But there is much more than that. There is, in the 10 December 2002 document, a disavowal, on the part of Ian, of any financial interest in John's estate. There is evidence of a deliberate decision not to take steps to impugn the transaction, notwithstanding knowledge that there might be an entitlement to do so, in the letter of 29 September 2003 and (specifically in relation to the share transaction) in the file note of 6 March 2006."
...
While Ian and his attorney made no claim for a decade, various detriments were incurred, and parties conducted their affairs, on the basis that the transaction was a valid one. John was disqualified from receipt of various pensions and entitlements, because of the assets which he apparently owned. His de facto spouse's property claim was settled by a payment which almost certainly could not have been made had John not owned the assets comprised by the house and the share portfolio. Ian made the December 2002 will exclusively in favour of Felicity, without any provision for John, a course which it is most unlikely he would have taken had he not been of the view that he had already made substantial provision for his son. Ultimately, John died, depriving his estate of any evidence that he could have given in answer to the claim."
Mr Ash submitted that there were two distinct reasons why the judge was incorrect in holding that there was a total equitable defence. The first is that, even if it were open to the First Defendant to assert any equitable defences that John could have relied on in his lifetime, even in his lifetime John would not have had a complete equitable defence to a claim to enforce the trust. The second is that it is not open to the First Respondent to assert any equitable defence that John could have asserted in his lifetime.
Estoppel Available as a Defence to John?
Mr Ash submitted that the letter of 29 September 2003 should be understood by paying close attention to the reasons that were given in its sixth paragraph (those reasons being italicised by the primary judge). Ian's lack of memory, concern about his own health, and affection for his son provide, Mr Ash submits, no basis for treating that letter as anything other than a statement that Ian personally would not bring an action against John. It left open the possibility, Mr Ash submits, of a claim being brought by Ian's executor after John's death.
In my view, that is not the message that an ordinary user of English would derive from the letter. The letter identified two areas of concern that Calvert Smith had, and the true beneficial ownership of the house was not one of them. Indeed, the letter specifically suggested that John sell the house, buy a cheaper property, and use the remaining proceeds of sale for his living expenses. Consuming part of the capital of the house in that way would be inconsistent with a claim later being brought that the house was held on trust for Ian. It would also be inconsistent with Ian's statement in December 2002 that he had "no financial interest in the matter" - if he was reserving the right for his estate to claim an interest after John's death he would have an interest in the nature of a reversion. Further, if any claim were to be brought after the death of John that might, as things appeared to be in September 2003, be many years into the future - John was aged only forty eight when he died, there is no trace in the evidence of anyone expressing a concern about John's possible premature death. There is no plausible reason why Ian would want to reserve, for his estate, an interest that might fall into possession such a long time into the future. Particularly is that so when Mr Ash accepts that John would be free to consume as much of the capital of the Mosman house as he needed, so that it was quite indeterminate what the reserved interest would be
Ian's conduct from December 2002 amounted, in my view, to a representation that he was making no claim to an interest in the house. That is the sort of representation concerning his own proprietary rights that is capable of giving rise to a proprietary estoppel. The hearing of the Guardianship Tribunal in December 2002 was an occasion that called for Ian or the Appellant to make known any claim that they had concerning John's property, as the Tribunal would make its orders, and if a financial management order was made would thereafter administer John's estate, taking into account what it understood to be John's property. Ian's application to be joined specifically said he had no such financial interest. Mr Burt attended the hearing on Ian's behalf, and put forward no claim concerning the house. I would infer that by the time of John's death he (or the Commissioner on his behalf) had organised his life for many years on the basis that the Mosman house was his. He had paid all the outgoings; had not sold the house and moved into cheaper accommodation but rather had chosen to use his other assets to live on; had settled the claim brought by Ms McLellan (inevitably on the basis that took into account what assets he regarded himself as owning and any contribution she had made towards those assets); and paid the English capital gains tax bill (itself calculated by reference to the amount of inter vivos gifts Ian had given him).
Mr Ash submits that even if any estoppel that is now available to the First Respondent depended upon any detriment that John had suffered (as Mr Ash submits it does not) the level of the detriment is insufficient to defeat the claim. He points, by way of example, to the limited monetary amounts involved in settling Ms McLellan's claim, and paying the English capital gains tax. I do not agree. The acts that were done on the basis of John's understanding that the house was his operate to create an equity which bound Ian to make good John's expectation: Giumelli v Giumelli (1999) 196 CLR 101 at [35]-[36]; Delaforce v Simpson-Cook [2010] NSWCA 84 at [3]-[4], [63]-[72]. As I said in Waddell v Waddell [2012] NSWCA 214 at [54], with the agreement of Allsop P and Sackville AJA:
"There is the authority of Lord Walker in Thorner v Major [2009] UKHL 18; (2009) 1 WLR 776 at [57], Lord Neuberger in Thorner at [101], Hoffmann LJ in Walton v Walton [1994] (Court of Appeal of England and Wales, 14 April 1994, unreported) and this Court in Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 at [81] and Evans v Evans [2011] NSWCA 92 at [108] for the proposition that:
'... equitable estoppel [by contrast with contract] ... does not look forward into the future [it] looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.'"
The judge was right to take into account not only matters of reliance by John, but also the fact that Ian had made the 2002 Will exclusively in favour of the Appellant without any provision for John. The 2002 Will was made on 19 December, less than a fortnight after Ian had told the Guardianship Tribunal that he had no financial interest in seeking to be represented there, wanted to secure John's assets, and wanted to ensure that John's best interests were protected. The affectionate and caring terms in which Ian's attitude to John was expressed in Calvert Smith's letter of 29 September 2003 leave no room for hypothesising that John was not a beneficiary under Ian's will because Ian had had a rift from him, or had ceased to want to provide for him. The only reasonable inference is that John was excluded from Ian's will because Ian was of the view that he had already provided for him, in the form of the shares and the house proceeds. The circumstances in which Ian made the will he did are matters that, looking backwards from just before John died, assist in reaching the conclusion that it would be unconscionable for Ian's executor to go back on the representation that the Mosman house was entirely John's. By a time immediately before John's death, the course of John's life had come to be set on the basis that the Mosman house was his, in a way that could not be unscrambled. If the matter were being determined just before John died, John would have had a total defence to any attempt by Ian to enforce the trust that once existed.
No Entitlement for First Respondent to Assert Equitable Defence Because No Grant When Litigation Began?
Mr Ash submits that the First Respondent cannot assert an equitable defence that John could have asserted in his lifetime because, at the time the Appellant began the litigation the First Respondent had no grant of administration, and had only the limited role of a repository of title pursuant to s 61 P & A Act.
Section 61 P & A Act at the time of John's death provided:
"From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person's estate, the real and personal estate of such deceased person shall be deemed to be vested in the Public Trustee in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England."
The NSW Trustee and Guardian Act 2009 ("NSW Trustee Act") commenced on 1 July 2009. Section 4 NSW Trustee Act repealed the Public Trustee Act 1913. Section 5 constituted the corporation called the NSW Trustee and Guardian ("NSW Trustee"), which is the First Respondent in this appeal, and was the first defendant in the court below. Under clause 3(1)(d) of Schedule 1 to that Act, any reference in a previous Act to the Public Trustee is to be read as a reference to the NSW Trustee. Under clause 11 of Schedule 1 of the NSW Trustee Act, the NSW Trustee was taken for all purposes to be a continuation of the former Public Trustee. Thus, from 1 July 2009, John's rights concerning the Mosman property were vested in the First Respondent pursuant to s 61 P & A Act. That was still the situation when the Appellant began the litigation in September 2010.
Mr Ash has reminded us that in Andrews v Hogan (1952) 86 CLR 223 at 233 Dixon CJ contemplated (but did not decide) the possibility that even though the Public Trustee could be served with a notice to quit leased real estate that was deemed to be vested in him under s 61, "as a mere repository of the estate" the Public Trustee did not have the capacity to appear in and defend an action. Fullagar J, at 250-251, thought it "may very well be that he has no active duties".
Any discussion of the extent of the powers of the Public Trustee or the NSW Trustee under s 61 P & A Act, would need to take into account the discussion in Dyke v Walford (1846) 5 Moore PC 434; 13 ER 557 of the role that the Ordinary played in administration of intestate estates in England. However, in my view it is not necessary to ascertain the scope of the powers and authorities of the Public Trustee, or the NSW Trustee, under s 61. What mattered, by the time the hearing below occurred and the judgment appealed against was given, was that by then there had been a grant of letters of administration. The question for the primary judge to determine was whether the Mosman land (or its proceeds of sale) were subject to the trust for which the Appellant contended. That is a question that was to be determined as at the date that the primary judge gave judgment, not as at the date that the statement of claim was filed: Application des Gaz SA v Falks Veritas Ltd [1974] 1 Ch 381 at 392, 399, 400.
Section 44(1) P & A Act as at the date of the grant provided:
"Upon the grant of ... administration of the estate of any person dying after the passing of this Act, all real and personal estate which any such person dies seised or possessed of or entitled to in New South Wales, shall as from the death of such person pass to and become vested in the ... administrator for all the person's estate and interest therein in the manner following, that is to say:
...
(b) On intestacy in the administrator.
..."
In other words, once the letters of administration were granted, the title of the First Respondent to the Mosman property related back to the time of John's death. An administrator of a deceased estate is a privy of the deceased, and can assert any estoppel that the deceased could have asserted: Partridge v McIntosh & Sons (1933) 49 CLR 453 at 463; Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 17th ed (1993) Sweet & Maxwell at 892; Spencer Bower and Handley, Res Judicata, 4th ed (2009) LexisNexis [9.38]; Young, Croft & Smith, On Equity (2009) Thomson Reuters [12.120]. Thus there was no bar, by virtue of not having had a grant at the time the litigation began, to the First Respondent asserting whatever equitable defences John could have asserted.
No Entitlement for First Respondent to Assert Equitable Defence Because Crown Will Take as Bona Vacantia?
Alternatively, Mr Ash submits that the fact that Crown will take John's net estate as bona vacantia has the effect that the First Respondent cannot assert an equitable defence that would have been open to John in his lifetime. At the time of John's death, distribution of intestate estates occurred under s 61B P & A Act. Section 61B(1) provided:
"Where a person dies wholly intestate, the real and personal estate of that person shall, subject to the payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate, be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section."
Sections 61B(2)-(6) set out various types of beneficiaries to whom the estate was to be distributed, in various different contingencies depending upon whether the intestate left a spouse, or left particular types of relative. None of ss 61B(2)-(6) applied to John. Section 61B(7) provided:
"In default of any person taking an interest under subsections (2) to (6), the estate shall belong to the Crown as bona vacantia, and in place of any right to escheat."
Mr Ash points out, uncontroversially, that "estoppel ... is only a personal matter, between the particular parties": Partridge v McIntosh & Sons Ltd at 462 per Starke J. He accepts that estoppel can bind a privy or a successor in title of someone who could assert the estoppel. However, he submits that that when the Crown obtains property of an intestate as bona vacantia the Crown does not take as a privy or successor in title. He submits that, if the Crown had become the registered proprietor of the land as a consequence of the administration of the estate being completed, or had received the net proceeds of the estate if the Mosman house had been sold in the course of administration (as is in fact the case) and Appellant laid claim to those assets, the Crown would not be able to assert any estoppel that John could have asserted in his lifetime. He submits that the First Respondent could not be in any better position.
At the outset, I reject the submission that whether First Respondent can assert any equitable defences that were open to John depends upon whether, once administration of the estate is complete and any net proceeds have been transferred to the Crown, the Crown would also be able to assert those defences. The Appellant has sued the First Respondent, and her entitlements are to be decided by reference to the defences that the First Respondent can assert.
In any event, though, I do not accept that, even if the Mosman property, or the fund representing its proceeds, were to be transferred to the Crown, it would not be possible for the Crown to defend any claim that it held that property on trust for the Appellant by relying on the estoppel that was open to John. Explaining why that is so requires some consideration of how the Crown acquires its title to property of an intestate who dies without a spouse or next of kin.
Under the common law, the right of the Crown to receive personalty that was bona vacantia was an aspect of the Royal prerogative. It depended upon the property in question being ownerless: In the estate of Musurus, deceased [1936] 2 All ER 1666 at 1668; In re Usines de Melle and Firmin Boinot's Patent (1954) 91 CLR 42 at 48-9 per Fullagar J; British General Insurance Co Ltd v AG [1945] LJCCR 113 at 121 per Judge Wethered; Re Wells, Swinburne-Hanham v Howard [1933] Ch 29 at 55 per Romer LJ.
In Dyke v Walford, the Right Hon T Pemberton Leigh, (later Lord Kingsdown), delivering the advice of the Privy Council spoke, at 495-496, 580 of: "the right of the Crown to 'bona vacantia;' to property which has no other owner". He said, at 496, 580 that that right "was vested in the Crown, as one of its 'jura regalia,'". He also said, at 498, 581:
"... the right to goods belonging to persons dying intestate, without leaving husband, or widow, and without kindred, was vested in the King, in right of His Crown".
In Attorney General of Ontario v Mercer (1883) 8 AC 767, Lord Selborne said, as a considered dictum in the speech in a Privy Council appeal from Canada that concerned whether revenues arising from escheat accrued to the Dominion government or the government of the Province in which the land was located:
"The subject was discussed, with much fullness of learning, in Dyke v Walford 5 Moore, PC 434, where a Crown grant of jura regalia, belonging to the county palatine of Lancaster, was held to pass the right to bona vacantia. 'That it is a jus' (said Mr. Ellis, in his able argument, ibid, p. 480), 'is indisputable; it must also be regale; for the Crown holds it generally through England by Royal prerogative, and it goes to the successor of the Crown, not to the heir or personal representative of the Sovereign. It stands on the same footing as the right to escheats, to the land between high and low water mark, to felons' goods, to treasure trove, and other analogous rights.' With this statement of the law their Lordships agree, and they consider it to have been, in substance, affirmed by the judgment of Her Majesty in Council in that case."
That the Crown does not take bona vacantia, under the general law, by way of succession is illustrated by two cases upon which Mr Ash relied.
In re Barnett's Trusts [1902] 1 Ch 847 concerned a legacy given under the will of an Englishman to two life annuitants, and then to an Austrian resident. The Austrian predeceased the last of the life annuitants, and died intestate and with no spouse or relative to whom his estate might pass under Austrian law. The fund in question was located in England. The case was decided on the basis that the Austrian legatee was domiciled in Austria, and that succession to moveables in his estate should be governed by the law of his domicile. Under the Austrian laws governing disposition of moveables after death if there was no spouse or relative who took under the Austrian law, "the succession is confiscated as heirless property" by a State official (849). Kekewich J held that the fund passed to the English Crown as bona vacantia. He said, at 857, that the relevant Austrian governmental official:
"...does not represent the deceased at all, except that by our law he is put in his place to defend actions by creditors or by persons claiming the estate against him. But he does not in any other sense represent the deceased. He does not claim through the persona of the deceased. He claims what is termed the 'glans caduca,' not the acorn on the tree, but the acorn which has fallen on to the ground from the tree. There is no possibility of getting at this property through the deceased. It is because there is no one who can claim through the deceased that the Crown steps in and takes the property. The Crown takes it because it is, as it is described in the cases, bona vacantia. It is property which no one claims - property at large - there is no succession. The Crown does not claim it by succession at all, but because there is no succession."
He said, at 858, that in the relevant Austrian law:
... the word does not mean 'confiscated' in the sense of taking by way of penalty. It is taken, or assumed by the State, as its own property. What the Code says is that it is confiscated as heirless property - that is, as property which we call in England bona vacantia. It is property to which there is no heir, because neither country admits the right of the passing traveller, and therefore the property must fall to the Crown as a matter of right in the exercise of its sovereign power."
He said, at 858-859, that the relevant Austrian law:
"... seems to me to be precisely on the lines of our law as to bona vacantia. When there is no heir, some paramount authority steps in and claims it, not as against any one, but because there is no one to claim it at all."
In In the Estate of Maldonado; State of Spain v Treasury Solicitor [1954] P 223, a Spanish subject domiciled and resident in Spain died intestate, leaving no next of kin. The deceased left personal property in England. The relevant Spanish legislation governing intestate succession said: "In default of persons having the right to inherit in accordance with the provisions of the foregoing sections the State shall inherit ..." (226). The Court of Appeal held that the Spanish law governing intestacy differed in a critical respect from the Austrian law that had been considered in Barnett, in that the Spanish State was a true successor of the deceased. For that reason, their Lordships held that the property did not pass to the English Crown as bona vacantia: 244-245. Evershed MR said, at 245:
"If by the law of Spain it is possible to limit or define the individuals who can claim to be successors, namely, individuals having some connexion by blood or marriage with the deceased, I can see no reason why, in default of there being such an individual, the law of Spain should not nominate or constitute as heir any person or corporation, including the State itself. The idea of succession doubtless imports some notion of continuity, for example, continuity of title; but I see no reason why this conception should be inapplicable to the State which is constituted successor by its own laws."
At the time that In re Barnett's Trusts was decided it was the Statute of Distributions 1670 that gave next of kin of an intestate rights of succession to property in relation to which the intestacy existed. However, the right of the Crown to receive assets in an intestate's estate that were bona vacantia arose under the general law, not under any statute. In England, the Administration of Estates Act 1925 assimilated the manner of devolution of real estate upon death to that of personal estate; limited the classes of blood relatives who could take on intestacy; and made express provisions, in s 46, for the Crown (or the Duchy of Lancaster or the Duke of Cornwall for the time being, as the case may be) to take the residuary estate of an intestate that was not disposed of under other provisions of that Act to a spouse or blood relative. Section 46 of that Act provided that the Crown (or the Duchy of Lancaster or the Duke of Cornwall) would take the residuary estate as "bona vacantia, and in lieu of any right to escheat". It is the 1925 English Act that provided the model for s 61B(7) P & A Act.
There is a question, that so far as my researches have gone, is not completely resolved in English law, about whether the introduction of the 1925 English Act had the effect that thereafter the Crown acquired by succession, under a statutory right created by the 1925 legislation, rather than by virtue of the prerogative, property of an intestate that did not pass to a spouse or blood relative.
In re Mitchell deceased; Hatton v Jones [1954] Ch 525 concerned a will under which a man left assets to his wife, and (in substance) if she predeceased him to whoever would have taken her estate if she had died intestate and without having married. The wife predeceased the testator. She was illegitimate, so her mother was not one of the next of kin under the statute. Wynn-Parry J held that the Crown took the property, not by virtue of a prerogative right, but because the 1925 English Act provided for the property passing to the Crown. He said, at 528-9:
"As Mr. Buckley pointed out in his argument, section 46 falls under Part IV, headed "Distribution of Residuary Estates," and is preceded by section 45 by which, inter alia, the right of the Crown to take by escheat is abolished. Then comes section 46, which from its form appears to me to be designed to set out in subsection (1) a complete and exhaustive code as to how the residuary estate of an intestate is to be distributed. There are six subparagraphs to subsection (1), and they proceed on the basis of dealing with the nearest relations in the first place, and, as they progress, with more and more remote relations. Then at the end subparagraph (vi) provides: 'In default of any person taking an absolute interest under the foregoing provisions, the residuary estate of the intestate shall belong to the Crown or to the Duchy of Lancaster or to the Duke of Cornwall for the time being, as the case may be, as bona vacantia, and in lieu of any right to escheat.' Those last words 'as bona vacantia' appear to me to be merely descriptive and fit in with the scheme of the subsection, which is only to bring the Crown in at the very end of what I have described as a complete and exhaustive code.
By section 57 it is expressly provided that the Crown is to be bound by this Act. Where, therefore, I find a subsection setting out a complete and exhaustive code, I think that the true view must be that the Crown takes directly under the statutory provision in section 46 (1) (vi), and not by any prerogative right under which, but for the statute to which the Crown submits, it would otherwise have taken."
Mitchell is to be contrasted with In the estate of Hanley [1942] P 33. Hanley concerned a testatrix who left a will that bequeathed certain legacies, but did not appoint an executor of dispose of the residue of her estate. The Crown sought a grant of letters of administration, on the basis of its entitlement to the residuary estate as bona vacantia. The relevant probate rules set out a list of the order in which different categories of people were entitled to a grant of probate or administration with the Will annexed. Relevantly, that list included:
(4) ... where the residue is not wholly disposed of, the persons entitled upon an intestacy ...
(6) legatees or devisees, or creditors ...
(8) the Crown:
The questions at issue was whether the Crown was entitled, by virtue of being the person entitled upon an intestacy, to obtain a grant without first citing legatees, devisees, or creditors. Goddard LJ (Duparcq LJ agreeing), held that the Crown was required to cite the creditors, devisees and legatees. He said, at 36:
"If the will had left the money direct to the Crown, as some testators have been known to do, the Crown would obviously have come in under the fourth heading as the ultimate residuary legatee of the testator but, if the Crown takes the estate by virtue of its right to bona vacantia, I do not think it can be said that it is a person entitled upon an intestacy within the meaning of the rule. The Administration of Estates Act, 1925, s 46, sub-s 1 (vi), provides in express terms that the residuary estate of a person dying in the circumstances therein specified goes to the Crown as bona vacantia, and that, I think, must be the matter that the framers of the rule had in mind when they placed the Crown at the bottom of the list."
That aspect of the decision in In the Estate of Hanley was followed by Barnard J, the first instance judge in In the Estate of Maldonado at 232. That aspect of the decision of Barnard J was not referred to when Maldonado was considered in the Court of Appeal.
Ing, Bona Vacantia, (1971) Butterworths, London, at 46, comments:
"... on the wording of the rule, the decision of the Court of Appeal appears to have been correct. However the comments of Goddard LJ were hardly necessary for the decision, and it is submitted that those of Wynn-Parry J in re Mitchell represent the correct view."
Williams, Mortimer and Sunnucks op cit at 265, states:
"If an intestate dies without leaving a spouse, issue or the relatives set out above the Crown, the Duchy of Lancaster or the Duke of Cornwall, as the case may be, are entitled to his estate, by statute and not by the prerogative right."
The authors cite Re Mitchell for the last proposition.
A similar argument would be available in New South Wales, that the entitlement of the Crown under s 61B(7) P & A Act was by way of succession under the statutory right created by s 61B(7), not by way of the prerogative. Such an argument could gain support from s 61B appearing in a Division of the P & A Act that is entitled "Distribution of Intestate Estates", and that s 61B is itself entitled "Succession to Real and Personal Property on Intestacy". Under s 35 Interpretation Act 1987 the heading to the Division is part of the P & A Act, and for that reason an available aid to construction of s 61B(7). Under s 34 Interpretation Act the heading to s 61B is available as extrinsic material, if it is capable of assisting in ascertaining the meaning of s 61B(7). If on its proper construction s 61B(7) had the effect that the State will eventually acquire the fund now representing the Mosman property pursuant to a statutory right of succession under s 61B(7), the State would then be a privy of John, and so entitled to assert any equitable defences that John could have asserted.
However, I do not propose to decide whether the State would acquire the property under such a statutory right of succession. Even if the State will acquire the property by virtue of the prerogative, it will do so by virtue of the property having been ownerless. Deciding whether the property was ownerless requires an examination of the situation as at a time before the Crown acquires any title. Before the Crown acquires any rights of property in the fund representing the Mosman property, that fund was held by the First Respondent. The First Respondent was able to assert all the equitable defences that John could have asserted.
For completeness I should mention that, now, distribution of deceased estates on intestacy is governed by Chapter 4 of the Succession Act 2006. That Chapter sets out rules for the distribution of estates on intestacy that are different in some respects to the provisions that had applied under the P & A Act. In particular, the provision that carries out a similar function to that which had formerly been carried out by s 61B(7) P & A Act is s 136. It provides:
"If an intestate dies leaving no person who is entitled to the intestate estate, the State is entitled to the whole of the intestate estate."
Regardless of whether s 61B(1)(7) P & A Act conferred a statutory right of succession on the State, the new s 136 might possibly give the State a statutory right of succession, that does not depend upon the law relating to bona vacantia. However, the provisions of the Succession Act relating to distribution on intestacy did not commence until 1 March 2010, after the date of John's death.
Orders
I propose that the appeal be dismissed, with costs.
BERGIN CJ IN EQ: I agree with Campbell JA.
SACKVILLE AJA: I agree with the orders proposed by Campbell JA and, subject to one qualification, with his Honour's reasons. The qualification relates to the appellant's submission based on the Crown's entitlement to take the net estate of the late John Gammidge as bona vacantia pursuant to s 61B(7) of the Probate and Administration Act 1898 ("P&A Act") (see at [90] above). Section 61B(7) is reproduced in Campbell JA's reasons (at [91]). As his Honour notes (at [113]), s 61B(7) of the P&A Act has now been repealed and replaced by s 136 of the Succession Act 2006, but s 61B(7) was in force at the relevant dates.
In her statement of claim the appellant, the executrix of the estate of the late Ian Gammidge, sought a declaration that the Trustee holds the whole of the land of which John Gammidge was the registered proprietor at his death ("the Property") on trust for the appellant. The same relief was sought in the notice of appeal filed by the appellant. However, she subsequently filed an amended notice of appeal to take account of the sale of the Property, which apparently occurred after the primary Judge delivered judgment. The amended notice of appeal seeks a declaration that the Trustee holds the net proceeds of sale of the Property in trust for the appellant. Nothing turns on the fact of the sale of the Property.
The appellant's claim for the relief she sought required her to succeed on two issues:
(a) that John Gammidge acquired the legal estate in the Property in 2000 on trust for his father, Ian Gammidge; and
(b) that Ian Gammidge and the appellant, as his successor in title, were not estopped or otherwise precluded from asserting the existence of the trust against John Gammidge and the Trustee, as the legal personal representative of John Gammidge's estate.
The State of New South Wales ("the State") was joined as a defendant in the proceedings because (as the primary Judge records at [2] of his reasons) it was said to be:
"the sole beneficiary of John's New South Wales estate, he having died intestate, with no next-of-kin entitled to take upon intestacy".
The appellant sought no relief against the State. Nor was any issue raised in the pleadings or in argument before the primary Judge as to whether the appellant could enforce any interest in the Property held by Ian Gammidge or his estate against the State. In particular, no issue was raised as to whether the appellant could enforce Ian Gammidge's equitable interest in the Property against the State, assuming the appellant succeeded on issue (a) but failed on issue (b). Presumably for this reason, the State entered a submitting appearance and did not seek to be heard, either at trial or on the appeal. It was content to allow the Trustee to defend the appellant's claim, the Trustee and the State having apparently the same interest in resisting the appellant's claim.
The primary Judge rejected the appellant's contention that John Gammidge held the Property on trust for Ian Gammidge. In any event, so his Honour found, the appellant was estopped or otherwise precluded from enforcing her claim to an equitable interest in the Property against the Trustee. It appears that no argument was put to the primary Judge that the Trustee could not succeed in the estoppel defence because the State, which takes John Gammidge's estate as bona vacantia, is not truly a successor in title to John Gammidge or his estate.
It is not now open to the appellant to assert, in effect, that even if she is estopped from enforcing the trust against the Trustee, she can enforce her claim to an equitable interest in the Property against the State. The appellant's argument has been presented in answer to the Trustee's estoppel defence and is said not to involve the State directly. However, the contention prejudices the interests of the State, which takes John Gammidge's net estate as bona vacantia. That is because the argument depends on the appellant demonstrating that the State cannot rely on the estoppel defence which his Honour held was available to the Trustee.
The argument sought to be advanced on the appeal should have been pleaded and raised at the trial. Had that occurred, the State's interests would have been seen not to be identical to those of the Trustee. The likelihood, therefore, is that the State would have played an active part in the proceedings in order to protect its separate interest in the Property.
In these circumstances, in my opinion it is neither necessary nor appropriate to address the appellant's argument based on the nature of the Crown's interest when it takes an estate as bona vacantia.
**********
- AGLC
- Brown v New South Wales Trustee and Guardian [2012] NSWCA 431
- Case
- [2012] NSWCA 431
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether John held the Mosman land on trust for Ian, and if so, whether any such trust claim was defeated by confirmation or estoppel. Additionally, the court considered novel arguments concerning the effect of no grant of administration of John's estate at the time of the proceedings and the impact on equitable defences when the State of New South Wales was eventually entitled to John's net estate as bona vacantia.
The court found that at the time John acquired the Mosman land, he held it on trust for Ian. However, it also concluded that the primary judge was correct in holding that any claim that the property was held on trust was defeated by confirmation or estoppel. The court reasoned that the onus was on the appellant to satisfy the court on the balance of probabilities that John held the property on trust for Ian, requiring evidence sufficient to enable the court to feel actual persuasion of the asserted fact. While a note dated 5 December 2000, on its own, supported the conclusion that the money was transferred to John with the intention of purchasing a house for Ian, the surrounding circumstances, including written instructions signed by Ian, did not provide a sufficient basis to overcome the defence of confirmation or estoppel. The court also considered and rejected the arguments concerning the effect of the absence of a grant of administration and the State's entitlement to the estate.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by: BERGIN CJ
The State of New South Wales was joined as second defendant in the court below, and has been joined as a Second Respondent in the appeal. It took no active part in either the hearing in the court below, or in the appeal. Its joinder might be explained by the fact that John left no next-of-kin who would become entitled to his estate pursuant to s 61B(1)-(6) Probate and Administration Act 1898 ("P & A Act"). Once administration of John's estate has been completed the State will be entitled to John's estate pursuant to s 61B(7) P & A Act. At the time of his death, John was the registered proprietor of Real Property Act 1900 land in Mosman, on which his home was erected. The Appellant brought proceedings in the Equity Division of the Supreme Court of New South Wales against the Respondents, contending (so far as is now relevant) that John had held the Mosman land on trust for Ian, and that the First Respondent held it on trust for the Appellant in her capacity as Ian's executrix. In the court below, Brereton J dismissed those proceedings: Brown v The NSW Trustee & Guardian [2011] NSWSC 1203. So far as now relevant, his Honour did so on the basis that he was not satisfied that John had held the land for Ian on either an express trust or a resulting trust. Alternatively, he held that any claim that there might have been that the Mosman house was held on trust was now defeated by confirmation, or estoppel. The Appellant appeals against both those aspects of the decision below. Mr D Ash appeared for the Appellant. Mr A Hill and Ms M Pringle appeared for the First Respondent. I have concluded that it should have been held that, at the time John acquired the Mosman land, he held it on trust for Ian. However, I have concluded that his Honour was correct in holding that any claim that there might have been that the Mosman house was held on trust was now defeated by confirmation or estoppel. On the way to that conclusion I have considered two novel arguments that Mr Ash raised. One concerns the effect of no grant of administration of John's estate having been obtained at the time of the proceedings in the court below. The other concerns the effect, on the availability of equitable defences, of the State eventually becoming entitled to John's net estate. There was no dispute about the relevant primary facts. At all relevant times, Ian lived in England. In 2000, Ian was aged 84. He owned a house called West Heath Cottage in Pirbright, Surrey, United Kingdom. His other substantial asset was a portfolio of shares that were held and managed for him by SG Banking. He was entitled to both a governmental pension, and an occupational pension. By September 2000, Ian had moved into sheltered accommodation. He had had several falls, and was no longer able to look after himself. His wife was still alive, but was in a nursing home suffering from dementia. John had lived in Australia since about 1981. He worked as a stockbroker. The Appellant is a niece of Ian. She and her brother Patrick Gammidge are the only children of Ian's only sibling. The Appellant has at all relevant times before this litigation began lived in England.