Mulhall v Kelly - [2006] VSC 407

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 8988 of 2006

IN THE MATTER of the estate of JOAN PATRICIA WATERTON, deceased.

BETWEEN:

LISA JESSICA MULHALL	Plaintiff
- and -
TIMOTHY DAVID KELLY (who is sued as executor of the estate of JOAN PATRICIA WATERTON, deceased)	Defendant

---

JUDGE:	Kaye J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 November 2006
DATE OF JUDGMENT:	3 November 2006
CASE MAY BE CITED AS:	Mulhall v Kelly
MEDIUM NEUTRAL CITATION:	[2006] VSC 407

---

WILLS – Ademption – Whether devise of property adeemed by a sale by attorney – Testatrix incapacitated and ignorant of sale – Gift held not to be adeemed – Re Viertel [1997] 1 Qd R 110 followed.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S. Newton	Carew Counsel
For the Defendant	Mr R. Boaden

HIS HONOUR:

The defendant is the executor of the Will of Joan Patricia Waterton, who died on 2 March 2006. The plaintiff is the daughter of Mrs Waterton. By clause 3(b)(iii) of her Will dated 21 November 1990 the deceased gave her residential unit at 4/258 Williams Road, Toorak, which she owned at the date of the Will, to the plaintiff. By paragraph 4 of her Will the deceased directed that the residue of her estate be held on trust to pay the income to the plaintiff for her life and after her death to distribute the capital amongst her children who survive her.

Subsequent to the making of the Will the deceased developed dementia and in 2001 the deceased moved into a nursing home. On 2 October 1999 the deceased had appointed the plaintiff her attorney under power. In order to pay the bond of $237,000 required by the nursing home, the plaintiff sold the deceased’s unit. The net proceeds of the sale were used to pay the accommodation bond, and the balance, over the course of the ensuing five years, were used to meet the deceased’s recurrent costs of living. By the date of the death of the deceased those funds had been exhausted and the plaintiff had commenced to meet the deceased’s living costs out of her own resources. Since the date of death of the deceased the nursing home bond has been repaid to the defendant as the executor of the Will.

In these proceedings the plaintiff seeks a declaration that the gift to her of the unit was not adeemed by the sale by her as attorney under power of the deceased. The matter has come before me on a summons issued on behalf of the plaintiff.

The question which arises is whether the sale of the unit by the plaintiff on behalf of the defendant caused the testamentary gift of the unit to her to be adeemed, so that the proceeds of the nursing home bond form part of the residue of the estate. The classic statement of the doctrine of ademption is that of Cozens‑Hardy MR in Re Slater, Slater v Slater

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mulhall v Kelly

Details

AGLC: Mulhall v Kelly [2006] VSC 407
Case: [2006] VSC 407
Decision Date: 3 November 2006

CaseChat Overview and Summary

The matter of Mulhall v Kelly arose in the Queensland Supreme Court, where the dispute centred on the interpretation of a will and whether a particular devise had been adeemed by a sale conducted by an attorney. The testatrix, who was incapacitated and unaware of the sale, left property to certain beneficiaries, but the validity of this gift was challenged in light of the sale. The court was tasked with determining whether the sale by the attorney resulted in the ademption of the devised property, thus rendering the gift ineffective.

The primary legal issue was whether the sale of the property by the attorney constituted an ademption of the devised property under the will. This required the court to examine the relevant provisions of the will, the authority of the attorney, and the testatrix's knowledge and capacity at the time of the sale. The court also needed to consider whether the sale, in light of the testatrix's incapacity and lack of knowledge, should nullify the intended gift. The precedent set in Re Viertel [1997] 1 Qd R 110 was cited as a guiding principle in this regard.

The court concluded that the gift was not adeemed by the sale because the testatrix was incapacitated and unaware of the sale when she executed the will. The court emphasised the importance of the testatrix's knowledge and capacity at the time of the sale and held that since she was not aware of the sale, the gift remained valid. The court followed the reasoning in Re Viertel, which established that ademption requires the testatrix to be aware of the sale and the sale to occur with her knowledge and consent. Given the testatrix's incapacity and lack of knowledge, the gift remained effective.

The final orders of the court confirmed that the devised property was not adeemed by the sale conducted by the attorney. The beneficiaries were entitled to receive the property as per the terms of the will, and the sale did not affect the validity of the gift. The court's decision ensured that the intentions of the testatrix were respected, and her incapacitated state did not invalidate her clear intentions as expressed in the will.

Orders