In the Estate of Carluen - [2022] NTSC 80

CITATION:In the Estate of Carluen [2022] NTSC 80
PARTIES:IN THE ESTATE OF CARLUEN
ON REFERENCE from the Registrar of the Supreme Court of the Northern Territory

TITLE OF COURT: SUPREME COURT OF THE
NORTHERN TERRITORY

JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:2022-02106-SC
DELIVERED: 7 October 2022

JUDGMENT OF: Brownhill J

Collins v Marinovich (2021) 8 QR 235, applied.
Doe d Cross v Cross (1846) 8 QB 714; Fletcher v Fletcher (1844) 4 Hare 67; In the Goods of Morgan (1866) LR 1 PD 214; In the Goods of Robinson (1867) LR 1 P&D 384; Re Anziani; Herbert v Christopherson [1930] 1 Ch 407; Re Bubnich; Marian v Bubnich [1965] WAR 138; Re Leung Wai Jing [2004] 1 HKC 453; Re White (1987) 38 DLR (4th) 631; Thorncroft v Lashmar (1862) 164 ER 1083; Wolfe v Wolfe [1902] 2 IR 246, referred to.

G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths,
1^st ed, 2013)
Administration and Probate Act 1969 (NT) ss 17, 22, 61
Evidence (National Uniform Legislation) Act 2011 (NT) s 140
Succession Act 2006 (NSW) s 113
Wills Act 2000 (NT) ss 3, 6, 8, 10, 11, 12, 34, 45, 46

REPRESENTATION:

Solicitors:
Applicant:Kelly & Partners
Judgment category classification:    C
Judgment ID Number:  Bro2211
Number of pages:  17

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
In the Estate of Carluen [2022] NTSC 80

No. 2022-02106-SC
BETWEEN

IN THE ESTATE OF CARLUEN

ON REFERENCE FROM THE REGISTRAR OF THE SUPREME COURT OF THE NORTHERN TERRITORY

CORAM: BROWNHILL J
REASONS FOR ORDERS
(Delivered 7 October 2022)

The issue in this matter is whether an agreement executed by the deceased and his wife in the Philippines which provided for both inter vivos and testamentary dispositions of his property constitutes his will. If not, he died intestate. If so, he failed to appoint an executor, so a subsidiary issue arises as to whom administration should be granted.
Background
The Registrar referred this matter (‘the reference’) under s 17(2)(c) of the Administration and Probate Act 1969 (NT) (‘APA’).
The deceased, Antonio Marquez Carluen, died on 25 August 2020.
At the time of his death, he was married to Paulina Calbay Mercado (‘Ms Mercado’) and they resided together in the Northern Territory. They were married on 30 September 2018. The deceased had two adult children from a previous marriage, Constantine Anthony David Carluen and Christine Bernadette David Carluen, who both live in New South Wales.
The deceased left an estate with a net value of $431,348.13, which comprised assets in the Northern Territory and New South Wales.
On 22 August 2022, Ms Mercado applied to this Court for administration of the estate on the basis that the deceased died without a valid will. It appears that, if he was intestate, she will be the sole beneficiary of the deceased’s estate.[1]
On 27 February 2019, the deceased and Ms Mercado executed a written document, headed ‘Agreement’ (‘the Agreement’). The Agreement provides that the deceased and Ms Mercado agreed that:
(a)if they get divorced within three years of their marriage, Ms Mercado would be entitled to $10,000 from the deceased as ‘alimony or share in their joint assets’ (clause 1);
(b)if they get divorced after three years of their marriage, Ms Mercado would be entitled to 30% of the net assets of the deceased (clause 2);
(c)if the deceased dies, Ms Mercado is entitled to 30% of the net assets of the deceased (clause 3);
(d)in the event of the deceased’s death, his two children, Mr Carluen and Ms Carluen, are to have 40% and 30% respectively of the net assets of the deceased (clause 4).
The Agreement was signed by the deceased and Ms Mercado in the presence of two witnesses and a Notary Public in Quezon City, Manila, Philippines.
In her affidavit in support of her application for administration, Ms Mercado stated that she and the deceased entered into the Agreement which is ‘on the subject of the division of marital assets in the event that we divorce or the deceased passes away’. She said it had come to her attention that the Agreement is not a valid will. She does not know of any other document that expresses the deceased’s testamentary intentions so she believes that the deceased did not leave a will.
The issue for determination on the reference is whether the Agreement is a will within the Wills Act 2000 (NT). If not, the estate would be administered pursuant to the laws of intestacy.[2]
Agreement was executed in the Philippines
An issue arises as to the operation of the Wills Act because the Agreement was executed in the Philippines.
Section 46(1) of the Wills Act provides that a will is properly executed if its execution conforms to the internal law in force (relevantly) in the place: (a) where it was executed; or (b) that was the testator’s domicile or habitual residence either at the time the will was executed or at the testator’s death. ‘Internal law’ is defined to mean the law applying in a case where no question of the law in force in any other place arises (s 45). That is, ‘internal law’ means the law that would apply in a case where no question of law in force in any other place arose.[3]
At the time of his death, the deceased lived in the Northern Territory. Consequently, whether the Agreement comprises a validly executed will can be determined by reference to the law in force in the Northern Territory, namely, the Wills Act.
Characteristics of a will
The Wills Act defines the term ‘will’ to include a codicil or any other testamentary disposition (s 3). A testamentary disposition is a disposition that will take effect only at the death of the maker.[4]
Generally speaking, a document that meets the required formalities may constitute a will whether or not the document describes itself as a will.[5] If there is proof, whether in the document itself or from clear extrinsic evidence, that it was the author’s intention to thereby convey the benefits that would have been conveyed had it been considered a will, and that death was the event that would give effect to it, then whatever the document’s form, it may be admitted to probate as a will.[6] Under this principle, various documents including a deed have been held to take effect as a will.[7]
Clauses 3 and 4 are clearly intended to operate on his death. However, the operation of clauses 1 and 2 are not prefaced on the death of the deceased, but on the divorce of the deceased and Ms Mercado.
In Collins v Marinovich (2021) 8 QR 235, the deceased had lent money to the plaintiff which was secured by a mortgage over the plaintiff’s property. The mortgage was registered. Two clauses in the mortgage provided that the debt would be forgiven on the deceased’s death. There was then a dispute between them as to the loan. The deceased subsequently executed a will, leaving the benefit of the debt and the mortgage to another person. After the deceased’s death, the plaintiff asserted that, in accordance with the clauses in the mortgage, the debt was forgiven and her obligations under the mortgage were at an end. The beneficiary under the will asserted to the contrary and that the plaintiff was obliged to repay the debt. The issue was whether the clauses in the mortgage were a testamentary disposition which could be severed from the mortgage and overridden by the deceased’s will. Ryan J held they could not. Her Honour undertook an extensive review of texts and authorities and set out the principles which they established, including the following:
(a)The authorities distinguished between a document in testamentary or purported testamentary form and documents not in testamentary form.[8] Distinctions were drawn between documents which described themselves as wills or had as their main object a disposition of property upon death and documents such as deeds, leases, partnership agreements and other documents.
(b)In deciding whether a document which is not in testamentary form is testamentary, it is necessary to consider the substance or main object of the document.[9]
(c)If the provisions of a document not in testamentary form are irrevocable, then the document is not of testamentary character.[10]
(d)If a document which is not in testamentary form is intended to take effect immediately upon its execution, and does not require for its consummation the death of the alleged testator, then it is not testamentary.[11]
(e)If a document which is not in testamentary form delivers immediate benefits to both parties to it, then it is not testamentary.[12]
(f)If a document is clearly divisible into two parts – one intended to take effect during the life of its author and the other intended to take effect after his or her death – then the second part of the document may be treated as a will, particularly if the second part concerns the main object of the document[13] or expressly states that it is intended to operate as a will.[14]
(g)Where a testator has executed a deed dealing with his property during life and after death, a provision of the deed which is intended to operate only after death may be treated as a testamentary disposition.[15]
(h)A disposition of a manifestly testamentary character in a document duly executed as a will ought to be admitted to proof as a testamentary act, even if the remainder of the document is not of testamentary character.[16]
The Agreement does not describe itself as a will. Nor does it contain any reference to a will. The recitals refer to the fact that the deceased and Ms Mercado were married on 30 September 2018, state that it is subject to the laws of Australia ‘on Property Relations of husband and wife’, and states the parties ‘desire to have their property relations as stated’ in the Agreement. Of the four operative clauses, two relate to what is to occur on divorce and two relate to what is to occur on the deceased’s death. The Agreement cannot be characterised in substance as a testamentary document. Its main object was twofold, namely to prescribe Ms Mercado’s entitlements to the deceased’s assets if they were to be divorced and Ms Mercado’s and the deceased’s children’s entitlements if he were to die. It was (for the reasons explained below), duly executed as a will.
There is no express provision dealing with revocation in the Agreement. However, it is not a deed and the identification of consideration from both parties is not straight forward. Given the conclusions below, the revocability of the deceased’s promises under clauses 1 and 2 of the Agreement need not be finally determined.
The Agreement was intended to take effect immediately upon its execution, at least as regards clauses 1 and 2. The Agreement conveyed benefits both ways. Ms Mercado was given the benefit of the entitlements to the $10,000 or share of the deceased’s net assets and the deceased was given the benefit that Ms Mercado’s share of his net assets would be confined to those prescribed by the Agreement. Those benefits were not of immediate effect, however, because they were contingent upon the parties’ divorce or the deceased’s death.
Importantly, it seems to me that the Agreement is clearly divisible into two parts: the provisions regarding divorce intended to take effect during the life of the deceased, and the provisions regarding entitlements to his net assets intended to take effect after his death. The second part of the Agreement does concern its main object and those clauses are clearly intended to operate only after the deceased’s death. I also consider it relevant that those clauses refer to the deceased’s ‘net assets’ rather than any specific property, leaving the deceased free to deal with his assets as he saw fit during his lifetime, which is consistent with the character of those clauses as testamentary, i.e. a declaration of the testator’s intention which leaves the testator free to dispose of or otherwise deal inter vivos with the property to which a will refers.[17] I also consider it relevant that the deceased did not execute any other document as his will, which confirms his intention that the Agreement set out his testamentary intentions.
Those clauses effect a disposition of a manifestly testamentary character and, for the reasons referred to below, are in a document duly executed as a will. Consequently, the disposition ought to be admitted to proof as a testamentary act, even though the remainder of the Agreement is not of testamentary character.
Agreement duly executed as a will
The Wills Act provides that a will is not valid unless: (a) it is in writing and (relevantly) signed by the testator; (b) the signature is made by the testator in the presence of two or more witnesses present at the same time; and (c) at least two of those witnesses attest and sign the will in the presence of the testator (s 8(1)). It is not necessary for the two witnesses to attest and sign the will in the presence of each other (s 8(2)). The signature of the testator: (a) must be made with the intention of executing the will; and (b) is not required to be made at the foot of the will (s 8(3)). It is not necessary for a will to have an attestation clause (s 8(4)).
The Agreement is in writing and signed by the deceased. In her Affidavit, Ms Mercado attests that she and the deceased entered into the Agreement on 27 February 2019. The requirement in s 8(1)(a) is satisfied.
As to the requirements in s 8(1)(b) and (c), I am satisfied the deceased signed the Agreement in the presence of the two witnesses whose signatures appear on the Agreement, and that they signed the Agreement in the presence of the deceased, for the following reasons. First, there are two signatures on the Agreement in the spaces next to the word ‘witnesses’, which follow after the signatures of the deceased and Ms Mercado. The use of that term, and the location of their signatures, indicates that they witnessed the deceased and Ms Mercado sign the Agreement. Secondly, the signature clause of the Agreement states that it was signed by the deceased and Ms Mercado on a date inserted by a stamp which, although difficult to read, appears to show ‘Feb 27 2019’. Thirdly, the Agreement sets out, under the heading ‘acknowledgement’, the following:
BEFORE ME, a Notary Public for and in Quezon this Feb 27 2019…, personally came and appeared:
Name Identification card
Antonio M Carluen
Paulina Lorna C Mercado
known to me to be the same persons who executed the foregoing instrument and they acknowledged to me that the same is their own free and voluntary act and deed.
This instrument consists of two (2) pages, including this page, signed by the parties and their witnesses on each and every page hereof.
WITNESS MY HAND AND SEAL
[signature]
Notary Public
Notary Public for Quezon City
…
This acknowledgement indicates that the Notary Public was satisfied that the Agreement had been signed by the deceased and Ms Mercado and the two witnesses, and suggests that they did so in the presence of the Notary Public. It is a reasonable inference, and I find on the balance of probabilities,[18] that the deceased and Ms Mercado and the two witnesses all signed the Agreement in the presence of the Notary Public on 27 February 2019.
As to the requirement that the witnesses ‘attest and sign’ the will, but noting there is no requirement for an attestation clause, attestation simply means the mental act of witnessing the testator’s signing of the will.[19] For the reasons already set out, I consider that requirement to be satisfied.
There is no information about the witnesses’ capacity to be witnesses. Any person competent to be a witness in civil proceedings, including a minor presumably, is competent to be a witness to a will.[20] Given the acknowledgement by the Notary Public, it is a reasonable inference, and I find on the balance of probabilities, that the witnesses were competent to be witnesses (and not blind contrary to s 11).
As to the requirement in s 8(3)(a), that the signature of the testator must be made with the intention of executing the will, for the reasons set out above, clauses 3 and 4 of the Agreement effect a disposition of a manifestly testamentary character. I am satisfied that the deceased signed the Agreement with the intention of executing that testamentary disposition. I consider the requirement of s 8(3)(a) is satisfied.
Finally, the two witnesses to the Agreement are not any of the three named beneficiaries to the testamentary dispositions. Consequently, there is no issue with the operation of s 12 of the Wills Act.
Application of s 10 of the Wills Act
The Wills Act provides that if the Court is satisfied that a deceased person intended a document that purports to embody the testamentary intentions of the deceased person (but which is not executed in the manner required by the Wills Act) to constitute his or her will, the document constitutes the will of the deceased person (s 10(2)). In forming this view, the Court may have regard (in addition to the document) to any evidence relating to the manner of execution or the testamentary intentions of the deceased, including evidence of statements made by the deceased (s 10(3)). This applies to a document whether it came into existence in or outside the Northern Territory (s 10(4)).
Given the conclusions that the Agreement has been duly executed as a will and is clearly divisible into the testamentary and the non-testamentary parts, it is unnecessary to consider the operation of s 10.
No executor nominated in the Agreement
There is no provision in the Agreement for the appointment of a person as the executor of the will.
The APA provides (relevantly) that the Court may, in any case where a person dies leaving a will, but without having appointed an executor thereof, if it thinks it necessary or convenient, appoint some person to be the administrator of the deceased’s estate, upon his or her giving such security (if any) as the Court directs (s 33(b)).
The basic principle is that the right to administration ‘follows interest’, that is, the person who has the greatest interest as a beneficiary in the estate, whether under the will or under the rules of intestacy, is normally entitled to the grant.[21] Where the testator has failed to nominate an executor, administration is usually granted to the person with the greatest interest.[22] Here, that person is the deceased’s son, Mr Carluen, who is entitled to 40% of the net assets.
However, the Court’s choice of administrator is not confined to a particular class of person and it retains a discretion because the appointment of an administrator is directed to the due and proper administration of the estate.[23]
Here, the applicant for administration is Ms Mercado, the deceased’s wife. She resides in the Northern Territory. She is entitled to 30% of the net assets. There is no reason to think that, if she had been appointed as executor under the will, she would have been ‘passed over’ by the court for incapacity, lack of ability or some genuine concern as to her bona fides.[24]
As part of her application, she properly disclosed the existence of the Agreement and this history of her application. Ms Mercado’s seeking distribution of the estate under the laws of intestacy is explained on the basis that it had come to her attention that the Agreement is not a valid will. That understanding was founded upon the rejection by the New South Wales Supreme Court of an application by Mr Carluen for administration of the deceased’s estate. That application was refused on the basis that the Agreement was not a valid will and Mr Carluen was not entitled, under the rules of intestacy to any distribution of the deceased’s estate. Ms Mercado has attested that she agreed to Mr Carluen’s application and it is apparent that she only made her application to this Court upon the refusal by the New South Wales Supreme Court of Mr Carluen’s application and the Probate Registrar’s suggestion that Ms Mercado apply for administration as the spouse of the deceased and the person entitled to the whole of his estate under the laws of intestacy. As set out above, I have reached a different conclusion to the Probate Registrar of the Supreme Court of New South Wales.

In my view, the due and proper administration of the deceased’s estate requires that administration be granted to Ms Mercado. I take that view because she is an appropriate person to administer the deceased’s estate and a grant to her would avoid further costs and delays associated with a further application by Mr Carluen.
The grant to Ms Mercado should be administration cum testamento annexo, that is, administration with the will annexed. Her obligation will be to administer the estate of the deceased in accordance with his testamentary disposition as set out in clauses 3 and 4 of the Agreement.
I do not consider there to be any need for Ms Mercado to give a surety or administration bond.
Orders
Paulina Calbay Mercado is appointed administrator of the estate of the deceased.
Ms Mercado is granted administration cum testamento annexo to administer the deceased’s estate in accordance with clauses 3 and 4 of the Agreement.

-----------------------------------------

[1] She relies on item 2(1)(a), Part 1, Schedule 6 of the APA to establish she is entitled to all of the assets in the Northern Territory (valued at approximately $11,960), and on s 113 of the Succession Act 2006 (NSW) to establish she is entitled to all of the assets in New South Wales (valued at approximately $419,388.13).

[2] The Court may grant administration of the estate of an intestate person to their spouse (s 22(1)(a), APA). An ‘intestate’ is (relevantly) a deceased person who does not leave a will (s 61, APA).

[3] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013), [22.16].

[4] Ibid, [1.1].

[5] Ibid, [1.8].

[6] Ibid.

[7] Ibid, citing In the Goods of Morgan (1866) LR 1 PD 214.

[8] Collins v Marinovich (2021) 8 QR 235 at [89].

[9] Ibid at [90(a)], citing In the Goods of Robinson (1867) LR 1 P&D 384; Doe d Cross v Cross (1846) 8 QB 714; 115 ER 1041.

[10] Ibid at [90(b)], citing In the Goods of Robinson (1867) LR 1 P&D 384.

[11] Ibid at [90(c)], citing In the Goods of Robinson (1867) LR 1 P&D 384; Fletcher v Fletcher (1844) 4 Hare 67; 67 ER 564.

[12] Ibid at [90(d)], citing Re Bubnich; Marian v Bubnich [1965] WAR 138.

[13] Ibid at [90(i)], citing Doe d Cross v Cross (1846) 8 QB 714; 115 ER 1041; Thorncroft v Lashmar (1862) 164 ER 1083.

[14] Ibid, citing Re Anziani; Herbert v Christopherson [1930] 1 Ch 407.

[15] Ibid at [90(j)], citing Re White (1987) 38 DLR (4^th) 631.

[16] Ibid at [90(k)], citing Wolfe v Wolfe [1902] 2 IR 246; Re Leung Wai Jing [2004] 1 HKC 453.

[17] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013), [1.2].

[18] I note the requirements of s 140 of the Evidence (National Uniform Legislation) Act 2011 (NT) that, 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, taking into account the nature of the cause of action, the nature of the subject matter of the proceeding and the gravity of the matters alleged. In effect, the Briginshaw test is applied. See G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013), [4.47].

[19] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013), [4.15].

[20] Ibid, [4.14].

[21] Ibid, [10.23].

[22] Ibid.

[23] Ibid, [10.24].

[24] Ibid.