Nolan v Nolan

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7568 of 2001

MOSCA GAI JINX MARGARET ELLERY NOLAN	Plaintiff
v
LADY MARY NOLAN (both in her personal capacity and as Executrix of the Estate of Sir Sidney Nolan, deceased) & SOTHEBY’S AUSTRALIA PTY LTD (ACN 004 742 509)	Defendants

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JUDGE:	DODDS-STREETON J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26-29 November, 2-4, 6, 9-12, 16-19 December 2002
DATE OF JUDGMENT:	28 April 2003
CASE MAY BE CITED AS:	Nolan v Nolan
MEDIUM NEUTRAL CITATION:	[2003] VSC 121	Revised 6 May 2003

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BENEFICIARY standing to sue to enforce trustees’ right of action against third party for denial of title to trust assets – Exceptional circumstances justifying beneficiary’s right to recover, on trustees’ behalf, trust assets which were unascertained prior to trustees’ ceasing to act.

GIFT OF CHATTELS inter vivos - Where no deed or declaration of trust – Onus of proof – Intention to make a gift – Whether words of present gift necessary to manifest donative intention – Whether ex post facto admissions or expressions by donor sufficient to complete valid gift.

DELIVERY – Actual or constructive – Retraction of gift prior to delivery - Relevance of continuation of purported donor’s control – Delivery by prior possession in common establishments – Whether prior custody by cohabitant sufficient – Requirement for unambiguous act of delivery.

CLAIMS AGAINST DECEASED ESTATE – General requirement for scrutiny and caution – Particular circumstances dictating a cautious approach – Possible failure of claimant to bring forward relevant evidence – Likelihood of deception of deceased by claimant’s predecessor in title.

STATUS OF ART GALLERY EXHIBITION CATALOGUES – Not equivalent to register of title – Weight to be attributed.

ADMISSIBILITY OF STATEMENTS IN DOCUMENTS – Evidence Act 1958 (Vic) s.55(1) – Rationale and scope – s.55(4) - Meaning of “person interested” – “Complete absence of bias” or “substantial material interest” approach – Whether necessary that the proceedings in which it is sought to tender the evidence must be pending or anticipated - Meaning of “anticipated” – Section 55(9) - Factors relevant to exercise of discretion to reject statements.

ANCIENT DOCUMENTS – Whether exhibition catalogues ancient documents – Whether licences or loan agreements for art works ancient documents.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Vickery Q.C. with Mr M. Corrigan	Simon Parsons & Co
For the Defendant	Mr M. Dreyfus Q.C. with Mr M. Robins	Nathan Kuperholz

TABLE OF CONTENTS

A. The Proceeding.............................................................................................................................. 1

B. The Parties...................................................................................................................................... 1

C. Background to Claim.................................................................................................................... 1

D. Brief Outline of Facts.................................................................................................................... 3

E. The Situation of the Paintings.................................................................................................... 9

F. The Pleadings............................................................................................................................... 10

G. The Plaintiff’s Standing............................................................................................................. 16

H. Gifts of Chattels........................................................................................................................... 25

Intention to Make a Gift............................................................................................................. 27

I. Circumstances Relevant to Weight............................................................................................ 30

Claims against Deceased Estates.............................................................................................. 30

The Cynthia Nolan Papers......................................................................................................... 34

The Power Gallery Arrangements and the David Jones Art Gallery Exhibition............... 37

The Mollison Letters................................................................................................................... 39

Status of Exhibition Catalogues................................................................................................ 42

Letters of Cynthia to Jinx Nolan 1976....................................................................................... 46

J. Legislation and Principles Relevant to Admissibility........................................................... 48

(a) Evidence Act 1958 (Vic)........................................................................................................ 49

(b) Ancient Documents............................................................................................................... 62

The Documents................................................................................................................................. 65

Documents Relating to “Italian Crucifix” 1955...................................................................... 66

Document 1.1 - Redfern Gallery Catalogue 1955, with notations in handwriting.................. 66
Document 1.2 - Proposed exhibition checklist of paintings marked “Paintings Sidney Nolan for Helen Kapp, Wakefield Gallery” circa 1956.................................................................................................. 67
Document 1.3 - Letter dated 9 January 1956 from L. Somerville to Sidney Nolan.................. 68
Document 1.4 - Catalogue of Whitechapel Art Gallery, London, June to July, 1957............... 69

Whitechapel Gallery loan agreement...................................................................................... 71

Document 1.5 - A letter from J. Wood Palmer (of the Arts Council of Great Britain) to Sidney Nolan, dated 31 July 1957.................................................................................................................................. 72
Document 1.6 - Arts Council of Great Britain Loan Agreement dated 14 August 1957........ 72
Document 1.7 - Catalogue of the Arts Council of Great Britain Sidney Nolan Exhibition, 1957 73
Document 1.8 - Catalogue of the Art Gallery of New South Wales – Sidney Nolan Retrospective Exhibition of Paintings from 1937 to 1967 – Exhibitions in Australia from 13 September 1967 to 4 February 1968. 73
Document 1.9 - Letter of Hal Missingham to Sidney Nolan dated 13 January 1967............... 75
Document 1.10 - Letter from Sidney Nolan to Hal Missingham dated 28 April 1967............. 76
Document 1.11 - Letter from Sidney Nolan to Hal Missingham dated 21 January 1967......... 77
1.12 - Art Gallery of New South Wales original typescript notes with handwritten corrections for printer 78
Document 1.13 - Handwritten list headed “collection Cynthia Nolan”................................... 79
Document 1.14 – Statement by Elwyn Lynn of the Power Gallery of Contemporary Art, University of Sydney dated 21 November 1974.......................................................................................................... 80
Document 1.15 - David Jones Art Gallery Catalogue – “The Cynthia Nolan Collection of Paintings by Sidney Nolan” 7-20 July, 1975............................................................................................................ 82

Evidence of Ms Sloggett............................................................................................................. 83

Colin MacInnes; Book entitled Nolan....................................................................................... 84
Proposed Exhibition Checklist marked “Paintings Sidney Nolan for Helen Kapp, Wakefield Gallery” 85
Document 1.18 - Sidney Nolan diary notes, Monday 9 February 1959.................................. 85
Document 1.19 - Article – “Sidney Nolan – An Artist of the Antipodes” by Marie Seton in “The Painter and Sculptor” London, Summer, 1959........................................................................................... 85

Conclusion on Donative Intention - “Italian Crucifix” 1955................................................... 86

Documents Relating to “Hare in Trap” 1946............................................................................... 86

Document 2.1 - Handwritten list by Sidney Nolan submitted to be prepared for New Metropole, Folkestone, Exhibition in 1970.................................................................................................................... 86
Document 2.2 - Catalogue for the Arts Centre, New Metropole, Folkstone, Kent published for the Sidney Nolan Retrospective Exhibition 21^st February to 18^th April, 1970........................................... 88
Document 2.3 - Handwritten list of collection of paintings of Cynthia Nolan......................... 90
Statement of Elwyn Lynn of the Power Gallery of Contemporary Art, University of Sydney, 21 November 1924.......................................................................................................................................... 90
Document 2.4- Catalogue of David Jones Art Gallery “The Cynthia Nolan Collection of Paintings by Sidney Nolan”, 7-26 July, 1975........................................................................................................... 91

Conclusion on Donative Intention - “Hare in Trap” 1946........................................................ 91

3. Documents Relating to “Royal Hotel” 1948............................................................................ 91

Document 3.1 - Extract from Sidney Nolan’s Notebook 1974-1975........................................ 91
Document 3.2 - Catalogue for the Moderna Museet Sidney Nolan Exhibition in Stockholm 17 January-7 March, 1976....................................................................................................... 92
Document 3.3 - Letter of Sidney Nolan to Mr Phillip Von Schantz dated 12 October 1975... 93
Document 3.4 - Letter from Phillip Von Schantz to Lord Clark dated 20 November 1975...... 94
Document 3.5 - Letter of Phillip Von Schantz to Cynthia Nolan dated 10 December 1975.... 94
Document 3.6 - Sidney Nolan’s pocket diary for 14 January 1876.......................................... 95
Document 3.7 - Photograph (signed “S” on back) of Cynthia Nolan in Stockholm standing in front of poster advertising the Moderna Museet exhibition in 1976................................................................ 95
Document 3.8 - Letter from Cynthia Nolan to Phillip Von Schantz dated 27 November 1975 96
Document 3.9 - Letter from Cynthia Nolan to Phillip Von Schantz dated 14 December 1975 96
Document 3.10 - Letter of Phillip Von Schantz to Cynthia Nolan dated 27 November 1975.. 96

Conclusion on Donative Intention - “Royal Hotel” 1948......................................................... 97

The letter of Richard Cobden to Cynthia Nolan dated 11 June 1976/David Jones file.............. 97

Delivery.............................................................................................................................................. 98

Delivery in Common Establishments........................................................................................ 100

Conclusion....................................................................................................................................... 110

HER HONOUR:

A. The Proceeding

In this proceeding the plaintiff seeks a declaration that she is the full beneficial owner, and entitled to possession, of three paintings by the late Sir Sidney Nolan entitled “Hare in Trap” 1946, “Royal Hotel” 1948 and “Italian Crucifix” 1955. The plaintiff also seeks orders for delivery up of the paintings and damages pursuant to s.82 of the Trade Practices Act 1974 (Cth).

B. The Parties

The plaintiff, Ms Mosca Gai Jinx Margaret Ellery Nolan (usually known as “Jinx Nolan”) is the daughter of the late Cynthia Nolan (“Cynthia”) and the celebrated Australian artist, the late Sir Sidney Nolan (“Sidney Nolan”).

The first defendant, Mary, Lady Nolan, is the widow of Sidney Nolan, having been married to him from 28 January 1978 until his death on 28 November 1992.

The second defendant, Sotheby’s Australia Pty Ltd (“Sotheby’s”) is the auction house which was commissioned by Lady Nolan to auction on her behalf in Melbourne on 16 September 2001, a number of paintings by Sidney Nolan, including the three paintings the subject of this proceeding.

C. Background to Claim

The plaintiff claims title to, and delivery up of “Hare in Trap” 1946, “Royal Hotel” 1948 and “Italian Crucifix” 1955 by Sidney Nolan, in her capacity as a beneficiary of both the Australian and English wills of her mother, Cynthia, who died on 24 November 1976.

The plaintiff claims that the three paintings constituted assets of the estate of Cynthia, in that each painting was given to Cynthia by Sidney Nolan at a date prior to Cynthia’s death in 1976. It is common ground that the paintings, executed by Sidney Nolan were originally his absolute property.

It is also undisputed that Sidney Nolan gave a number of his paintings to his wife Cynthia during their marriage, which, upon her death, constituted assets of Cynthia’s English and Australian estates. Some of those paintings were distributed to Ms Jinx Nolan by the trustees of Cynthia’s English and Australian wills in 1985 and 1986 respectively. Sidney Nolan was aware of, and did not dispute, the trustees’ claim that those paintings constituted assets of Cynthia’s estate.

It is undisputed that the three paintings the subject of this proceeding were in the possession of Sidney Nolan from (at the latest) a date in 1976 until his death on 28 November 1992. Upon the death of Sidney Nolan, his widow, Lady Nolan, took possession of the paintings. Subject to the outcome of the present proceeding, Lady Nolan acquired title to the three paintings pursuant to the will of Sidney Nolan executed on 6 February 1978, under which she was sole beneficiary. The trustees of Cynthia’s estates and the plaintiff, Ms Jinx Nolan, have not, at any stage, been in possession of any of the three paintings.

The plaintiff contends, in essence, that she believed from a date prior to her mother’s death in 1976 that “Hare in Trap” 1946 had been the property of her mother, Cynthia, and hence constituted an asset of her mother’s estate, but she did not, until approximately September 2001, have proof of Cynthia’s entitlement.

The plaintiff claims that until recently, she believed that “Italian Crucifix” 1955 was identical to a painting entitled “Crucifixion” 1955 or “Crucifixion, South Italy” 1955, which had constituted an asset of Cynthia’s Australian estate, but had been sold by the trustees in 1983.

The plaintiff claims that she did not apprehend until approximately September 2001 that there were grounds to believe that the painting the subject of the present proceeding, entitled “Italian Crucifix” and sometimes entitled “Italian Crucifix, Puglia”, was also the property of Cynthia during her lifetime. Her confusion is said to have arisen because Sidney Nolan painted a number of paintings entitled, or sometimes entitled, “Italian Crucifix” or a closely related variant of that title. The painting in dispute which remained in the possession of Sidney Nolan, is of different dimensions to the painting of similar title, which was sold by the trustees of Cynthia’s Australian estate in 1983. The plaintiff contends that she only recently became aware that Cynthia had owned two paintings with a similar theme and title, only one of which was sold by the trustees of Cynthia’s Australian estate, while the other remained in the possession of Sidney Nolan after Cynthia’s death.

The plaintiff claims that she was not aware until shortly before the Sotheby’s sale in September 2001 that there was evidence to establish that “Royal Hotel” 1948 was the property of Cynthia.

The recently discovered information which the plaintiff claims alerted her to Cynthia’s entitlement, or to proof of Cynthia’s title, and on which she relies to establish her claim in this proceeding, was identified or assembled by Mr Geoffrey Smith, a senior curator at the National Gallery of Victoria, in the course of his preparation for the National Gallery’s projected exhibition of Sidney Nolan’s Australian Outback works, scheduled for 2003. Mr Smith had conducted research into the life and art of Sidney Nolan for some years. His research into the provenance of Nolan paintings, including those the subject of this proceeding, continued during 2002.

D. Brief Outline of Facts

Sidney Nolan was already an established artist when he married his second wife, Cynthia Hansen (née Reed), in 1948. Soon after the marriage, Sidney Nolan adopted Cynthia’s daughter, Jinx, who was then seven years of age.

In 1950 the Nolans travelled extensively in Europe and in 1953 they settled in England, in a residence situated at 79 Deodar Road, Putney.

Cynthia was closely involved in assisting Sidney Nolan with his work and in promoting his reputation. She was also the author of several books on themes based on her travels with Sidney Nolan.

It is undisputed that both Sidney Nolan and Cynthia Nolan owned Nolan paintings and made them available to various exhibitions.

During the course of the Nolans’ marriage, a number of exhibitions of Sidney Nolan’s works took place.

It is principally on documentation associated with certain of those exhibitions that the plaintiff bases her claim that Sidney Nolan made a gift of each of the three paintings to Cynthia. The plaintiff claims that:

(a)“Italian Crucifix” 1955 was first acknowledged as belonging to Cynthia in the catalogue for the Whitechapel Art Gallery Exhibition held in June and July 1957;
(b)“Hare in Trap” 1946 was first acknowledged as being in the collection of Cynthia in the catalogue for the New Metropole Gallery, Folkestone Exhibition held between 21 February and 18 April 1970;
(c)“Royal Hotel” 1948 was first acknowledged as belonging to Cynthia in the catalogue for the Moderna Museet Exhibition held in Stockholm between 17 January and 7 March 1976.

The plaintiff relies upon the catalogues, including the above, and other documents containing alleged acknowledgments of Cynthia’s ownership of the three paintings, in order to establish a valid gift. The catalogues and documents are discussed in detail below.

The plaintiff contends that Sidney Nolan participated in the preparation of the exhibition catalogues and in associated documents or correspondence. As such, it is asserted that acknowledgments contained therein constituted admissions, or proof of a valid gift of each of the three paintings by Sidney Nolan to Cynthia.

In 1958, Ms Jinx Nolan left England to attend boarding school in the United States. The United States has remained her permanent residence from that time up to the present. She nevertheless continued to visit her parents in England regularly and maintained her family bonds with both Cynthia and Sidney Nolan.

In 1974, Cynthia Nolan despatched 26 paintings to Australia pursuant to an alleged loan agreement dated 21 November 1974 between herself and the Power Gallery of Contemporary Art, University of Sydney, under the care of her friend or associate, the curator, Elwyn (Jack) Lynn. Those paintings included “Hare in Trap” 1946 and “Italian Crucifix” 1955. The paintings deposited with the Power Gallery were subsequently made available for the David Jones Art Gallery Exhibition held in Sydney in 1975. In 1976, Cynthia and Elwyn Lynn (on her behalf) offered some of the 26 paintings for sale to the National Gallery. The paintings offered for sale included “Hare in Trap” 1946. The National Gallery did not take the opportunity to purchase any of the paintings.

The plaintiff acknowledges that Sidney Nolan did not know, at the time, that the paintings had been despatched to Australia, of Cynthia’s arrangements with the Power Gallery or of the offer to sell some of the paintings to the National Gallery.

The plaintiff also conceded that Sidney Nolan did not know of, or consent to, the David Jones Art Gallery Exhibition in 1975 and was upset when he subsequently learnt of it.

It is undisputed that Cynthia maintained a separate “business” address, care of Mrs J. Griffin, 7 Sharples Street, Regents Park Road, London and required that her arrangements with the Power Gallery and the proposed sale of paintings be kept confidential.

There is also evidence that the alleged loan of paintings by Cynthia to the Power Gallery was in fact a private arrangement between Cynthia and Elwyn Lynn. That issue is discussed in detail below.

In 1976, Cynthia wrote at least two letters to Jinx Nolan in Boston. By a letter dated May 1976, Cynthia stated that she was considering sending “a few really good large … paintings” to Jinx Nolan in America and “‘Hare in Trap’ came to mind.” By a letter dated September 1976, Cynthia referred to her plan to send certain paintings to Jinx Nolan in Boston. The letter asserted that the paintings belonged to Cynthia, but urged that Sidney Nolan must not be informed, as he had apparently “given” paintings to Cynthia in the past, but had subsequently retracted or reclaimed such gifts and dealt with the paintings as his own.

On 24 November 1976, Cynthia committed suicide in London. Jinx Nolan was notified of her death and travelled to London immediately. Cynthia left two wills. By an English will executed on 13 February 1976 and an Australian will executed on 22 April 1976, each in very similar terms, she devised her estate to trustees on trust, broadly, for Jinx Nolan for life, with the remainder to the issue of Jinx Nolan or to certain heritage bodies. However, a “power of encroachment” permitted the trustees of the wills, in their absolute discretion, to pay the whole or any part of the capital of the estate to or for the benefit of Jinx Nolan.

Sidney Nolan was surprised and distressed to receive no benefit under either of Cynthia’s wills. Shortly after Cynthia’s death he began to reside at the home of the first defendant, Mary, Lady Nolan, then known as Mary Perceval, née Boyd.

On 6 February 1978 he married Mary Nolan.

Despite some strain and distress over the terms of Cynthia’s wills, Sidney Nolan maintained a relationship with Jinx Nolan until his death. They corresponded and Jinx Nolan visited, and stayed with, Sidney Nolan and Mary Nolan in their Whitehall flat. The topics of Cynthia’s wills and the benefits they conferred on Jinx Nolan were a source of tension, which occasionally resulted in emotional scenes. In 1978, after a disagreement with Sidney Nolan while staying as a guest in the Whitehall flat, Jinx Nolan left a note to Sidney Nolan which stated:

“Sid
Won’t stay this time
Am going to be rushing a bit.
I’ll be at Shepherds until late p.m. probably so might not be able to make the concert.
Sorry if there are feelings re possessions. I didn’t mean there to be, everything is yours as far as I’m concerned including anything at the warehouse or lawyers. I’ll probably be off tomorrow but will phone before I leave.
Love to Mary.
Love Jinx.
p.s. I made a couple of long distance phone calls (inland) think this should cover it.”

It is not disputed that following Cynthia’s death, the three paintings remained in Sidney Nolan’s possession until his death in 1992. “Hare in Trap” 1946 was displayed in the Nolans’ Whitehall flat for at least part of that time. Jinx Nolan, visited and stayed with Sidney Nolan and his third wife, Mary (now Lady Nolan) at their Whitehall residence on many occasions. She was aware that “Hare in Trap” 1946 was in Sidney Nolan’s possession. She believed, during Sidney Nolan’s lifetime, on the basis of the letter from Cynthia dated May 1976 that Cynthia had owned “Hare in Trap” but had no further proof of title. Further, she believed that “Italian Crucifix” 1955 had been owned by Cynthia, but had been sold by the Australian trustees of Cynthia’s will during the 1980s.

Jinx Nolan gave evidence that she was anxious to preserve her relationship with Sidney Nolan and generally avoided discussion of Cynthia’s wills or challenging him. She therefore, during Sidney Nolan’s lifetime, did not raise specific questions about paintings or the possibility that there was property remaining in Sidney Nolan’s possession which should have been included in her mother’s estate.

In 1985, Jinx Nolan received a number of paintings as a distribution in specie from Cynthia’s English estate. In 1986 she received a distribution of property, which apparently included some paintings, from Cynthia’s Australian estate.

Following Sidney Nolan’s death on 28 November 1992, Jinx Nolan, in 1994 and 1995, sought and obtained legal advice in relation to certain items which she believed to be assets of Cynthia’s estate, but which had remained in Sidney Nolan’s possession after Cynthia’s death.

Jinx Nolan obtained further legal advice and representation. She asserted a claim to certain furniture and other items from the Estate of Sidney Nolan. The claim was rejected. In the course of rejecting the claim, Diana Rawstron, a solicitor acting for the executors of the Estate of Sidney Nolan, by letter dated 10 February 1995 wrote to Jinx Nolan’s solicitor in the following terms:

“I put this on the record because I wish to make the point that the executors’ position is not to say that everything in Sir Sidney’s possession at the date of his death automatically belongs to the estate. If anything belonged to Cynthia, then it has been or will be returned to Ms Nolan. However, the position of the Chinese chairs, screen and carpet is that they belonged to Sir Sidney and therefore fell into his estate.
Finally, if Ms Nolan is able to produce compelling evidence to the contrary, for reasons you are aware of, it would be necessary to put the matter before the Inland Revenue.”

Although rejecting Jinx Nolan’s claim to furniture, the executors of the Estate of Sidney Nolan, with the approval of Lady Nolan, acknowledged that a painting by Sidney Nolan depicting a railway steam train, inscribed “Cynthia with love Sidney 1969” belonged to Jinx Nolan after it was discovered at a London art dealers in February, 1993. The painting was returned to Jinx Nolan.

In 1997, the executors of Sidney Nolan’s estate or Lady Nolan, instructed the London art dealer, Agnews, to sell a number of Nolan paintings, including the three paintings in dispute. The paintings were offered for sale by Agnews between 11 June and 25 July 1997 but were not sold. Ms Jinx Nolan became aware of the attempted sale. She sought further legal advice in relation to her claim to “Hare in Trap” 1946 and was advised that the evidence constituted by the letters of Cynthia to Jinx Nolan of May and September 1976 were insufficient to establish title.

In 2001, Mr Geoffrey Smith, in the course of research and preparation for a planned Nolan “Outback” Exhibition scheduled for 2003, made contact with both Lady Nolan and Ms Jinx Nolan. He visited Lady Nolan. Mr Smith entered into regular communication with Ms Jinx Nolan and in July 2001 visited her at her residence in Boston. Ms Nolan made her own records available to Mr Smith and apprised him of other possible sources of documents. In the course of his subsequent researches, Mr Smith located certain documents and catalogues which led him to believe that “Italian Crucifix” 1955 (which the plaintiff believed was the title of a painting which had belonged to Cynthia but had been sold by the Australian trustees) was in fact a different painting of similar title, which had also been given by Sidney Nolan to Cynthia. He formed the belief, on the basis of certain documents, that Cynthia had also owned “Hare in Trap” 1946 and “Royal Hotel” 1948.

In the course of his investigations and research, Mr Smith advised Ms Jinx Nolan of his findings and of his opinion that there was evidence of Cynthia’s ownership of “Hare in Trap” 1946, “Royal Hotel” 1948 and “Italian Crucifix” 1955 (which, unlike a painting of similar name, had not been sold by Cynthia’s Australian trustees).

In September 2001, Lady Nolan instructed Sotheby’s, the second defendant, to auction the three paintings in dispute. The plaintiff applied for an interlocutory injunction restraining the sale. The application for an interlocutory injunction was dismissed by Nathan J on 14 September 2001. The Sotheby’s auction took place on 16 September 2001. The three paintings were sold at auction. The purchasers of “Hare in Trap” 1946 and “Royal Hotel” 1948 have executed undertakings to abide the determination of the court in this proceeding. The sale of the third painting, “Italian Crucifix” 1955 was not completed and that painting has been returned to Sotheby’s by the purchaser.

E. The Situation of the Paintings

There is evidence that “Hare in Trap” 1946 was situated in England in the Nolans’ Putney residence at the date of Cynthia’s death on 24 November 1976. There is evidence that “Hare in Trap” 1946 and “Italian Crucifix” 1955 were both despatched to Australia at an unspecified date in 1974 and remained there, stored at the Power Gallery, Sydney, (save for when they were exhibited at the David Jones Art Gallery in Sydney between 7 July and 26 July 1975) until at least June 1976. At a later date in 1976 (which I find to be prior to Cynthia’s death on 24 November 1976) they were returned to England.

It is not disputed that “Hare in Trap” 1946 was also exhibited at the New Metropole Gallery, Folkstone, Kent, in April 1970. It is not disputed that “Italian Crucifix” 1955 was exhibited at the Redfern Gallery, London in 1955 and at the Art Gallery of New South Wales’ Sidney Nolan Retrospective Exhibition from 13 September 1967 to 4 February 1998. There is evidence to suggest that it may also have been exhibited at the Wakefield Gallery, London, in about 1956 and at the Whitechapel Art Gallery, London, from 12 June – 31 July 1957.

It is not disputed that “Royal Hotel” 1948 was transported to England at an unspecified date (probably in the 1950s) and was exhibited at the Moderna Museet in Stockholm in 1976.

Other than for the above, there is no evidence of where each of the three paintings was situated during the marriage of Sidney Nolan and Cynthia from the 1950s until Cynthia’s death in 1976. There is evidence that Sidney Nolan maintained a studio in London where paintings were kept. There is evidence that Nolan paintings were sometimes situated at the Nolan’s residence, and were sometimes loaned to exhibitions or stored. However, there is no evidence, other than as noted above, of where each of the three paintings was situated at any given time. There is no evidence of what level of control, custody or access Sidney Nolan conferred on Cynthia in relation to the three paintings prior to the alleged gifts, whether they were situated at the Nolans’ residence, in the studio, in storage, or elsewhere.

Such evidence, or the lack of it, may be relevant to the question whether the plaintiff has established that delivery, as distinct from donative intention or acknowledgment of ownership, was satisfied in relation to each of the three paintings.

F. The Pleadings

By statement of claim dated 13 September 2001 (filed immediately prior to the application for an interlocutory injunction restraining the auction of the three paintings by Sotheby’s) the plaintiff alleged that she is the sole beneficiary of the estate of Cynthia. The plaintiff also alleged that the first defendant is the executrix of the estate of Sidney Nolan.

The plaintiff alleges that at the date of Cynthia’s death, Cythia was the owner of, and entitled to possession of, various Sidney Nolan paintings, including “Hare in Trap 1946”, “Royal Hotel 1948” and “Italian Crucifixion 1955.”

The plaintiff alleges that the first defendant or her servants or agents are wrongfully in possession of and wrongfully detaining the three paintings.

The plaintiff pleads that the second defendant, Sotheby’s, acting on the instructions of the first defendant, is proposing to put on public exhibition the three paintings as from Thursday 13 September 2001 for the purpose of selling them on behalf of the first defendant by public auction on Sunday 16 December 2001, and has publicly advertised the three paintings for sale in a sales catalogue which has been distributed to the public.

The plaintiff pleads that the second defendant has made false and misleading representations in contravention of s.52 of the Trade Practices Act 1974 (Cth) by representing to the public that the sale of the three paintings is being undertaken on behalf of the true owner, with the capacity to pass good title. The plaintiff also alleges that the first defendant’s involvement in the second defendant’s contravention of s.52 constitutes a contravention of s.75B of the Trade Practices Act.

The plaintiff alleges that she has been wrongfully deprived of the three paintings and has suffered loss and damage. By amended statement of claim filed on 16 December 2002, the plaintiff withdrew the allegations that she is the sole beneficiary of the estate of Cynthia and that the first defendant is the executrix of the estate of Sidney Nolan. Further, the plaintiff pleads that as a beneficiary under constructive or implied trusts, of which the first defendant or the second defendant is trustee by reason of matters pleaded in the Reply, , the plaintiff is entitled to full beneficial ownership and possession of the three paintings.

The plaintiff claims a declaration that she is the full beneficial owner of, and entitled to possession of, the three paintings, an order against the defendants for delivery up, orders for an injunction restraining the defendants and their agents or servants from dealing with the paintings without the plaintiff’s consent, damages and costs.

By further amended defence dated 27 November 2002, the defendants deny that the first defendant ever has been or is the executrix of the estate of Sidney Nolan.

The defendants deny that, at the date of her death, Cynthia was the owner of and entitled to possession of the three paintings.

The defendants deny that the first defendant or her servants or agents are wrongfully in possession of or wrongfully detaining the paintings.

The defendants admit that that the instructions from the first defendant were given on behalf of the estate of the deceased, of which the first defendant is the sole beneficiary.

The defendants say that the sale of the three paintings occurred on 16 September 2001, and admit that the second defendant put the paintings on public exhibition for the purpose of sale on behalf of the first defendant, and that they advertised the sale in catalogues distributed to the public.

The defendants admit that the second defendant represented that it was selling the three paintings on behalf of the first defendant, and that the first defendant warranted that the estate of the deceased was the owner of the paintings but say that the second defendant made no representations or warranties as to ownership of the paintings. The defendants state that the representations were true and deny contravention of the Trade Practices Act.

The defendants say that the paintings are in the possession of the respective purchasers, other than “Italian Crucifix” 1955 which is in the possession of the first defendant.

The defendants allege that the plaintiff’s cause of action is statute barred by the operation of s.6 of the Limitations of Actions Act 1958 and/ or s.2 of the Limitation Act 1980 (UK).

Further, the defendants allege that at all material times from 1976 to 5 September 2001 the plaintiff has, by her conduct, represented herself as having no right, or title to or interest in the three paintings.

The defendants allege that the first defendant, induced by the representations and in the belief that Sidney Nolan had unfettered title to the paintings free of any claim by the plaintiff, acted to her detriment in that neither Sidney Nolan nor the first defendant sought to preserve evidence to refute the plaintiff’s claims. Accordingly, the plaintiff is estopped from asserting that she has any right or title to, or interest in, the paintings.

Further, the defendants claim that in 1993, when the plaintiff made a claim against the estate and the first defendant for the return of all personal property alleged to form part of the estate of Cynthia, the plaintiff knew that she might have a claim to the three paintings and elected to abandon or agreed to resolve the claim upon delivery of certain items of property, not including the three paintings.

The defendants say that the three paintings were sold at auction on 16 September 2001. The purchasers have undertaken not to sell their respective paintings until the hearing and determination of this action and have agreed to deliver up the paintings to the plaintiff upon demand, in the event that the plaintiff is successful.

The first defendant seeks declarations, including declarations that she was lawfully entitled to sell each of the paintings through the second defendant, that the estates of Cynthia in the United Kingdom and Australia were wound up and fully administered on or about 11 March and 31 October 1985 respectively, and that at no time did any of the executors ever get in the three paintings so that they formed part of the estate of Cynthia prior to completing the administration of the estate.

The defendants allege that s.29 of the Administration and Probate Act 1958 prohibits the plaintiff from maintaining the proceeding.

Further, the defendants say that, during the lifetime of Sidney Nolan, the plaintiff elected to abandon all claims which she may have to any property in the possession of the Sidney Nolan, or to give such property which she may have claimed through the estate of Cynthia, to Sidney Nolan absolutely.

By second amended reply filed on 6 December 2002 the plaintiff alleges that the first conversion of the three paintings occurred between 11 June and 25 July 1997 (when they were offered for sale at Agnews) and that prior to the plaintiff’s demands for delivery up on 5 September and 11 September 2001, there was no wrongful detention.

The plaintiff further pleads that pursuant to s.21 of the Limitations of Action Act 1958 (Vic) and s.21 of the Limitation of Actions Act 1980 (UK) no limitation period applies to the plaintiff, as she is a beneficiary of various constructive or implied trusts of which the defendants are the trustees.

The first constructive trust is pleaded to have arisen when the first defendant took possession of the paintings through the estate of Sidney Nolan, on the basis that Sidney Nolan already held them as a constructive trustee, having taken possession of them knowing that he was not entitled to full beneficial ownership.

It is pleaded that the second defendant holds the three paintings as a constructive trustee, as it was put on inquiry by facts that would indicate to a reasonable person that a breach of trust may have occurred, prior to the auction on 16 September 2001.

The second constructive trust pleaded in the second amended reply is said to have arisen:

“by the plaintiff permitting Sidney Nolan and then the first defendant to have possession of the paintings when she was mistaken as to the evidence available to prove true title, or as to true title.”

Further, it is pleaded that the second constructive trust arose “when the first defendant and/or the second defendant subsequently gained the requisite knowledge of the mistakes or were put on inquiry by facts which would indicate to a reasonable person that the mistakes had or may have been made by the plaintiff.”

Alternatively, it is pleaded that the second constructive trust arose when “the first defendant gained actual knowledge or was put on inquiry [by facts?] as would indicate to a reasonable person that a breach of trust had occurred by receipt of the paintings from Sidney Nolan’s estate, or is now put on inquiry as to breach of trust.”

The material facts relied on to establish the second constructive trust include an allegation that the three paintings comprised part of the residue of the estate of Cynthia.

As pleaded, a further precondition to the second constructive trust arising is the putting on inquiry of the first defendant [by facts?] which would indicate to a reasonable person that the mistakes or breach of trust had occurred or may have occurred.

In the alternative, it is pleaded that the second constructive trust arose when material now brought to the first defendant’s attention in the form of the Exhibition History put her on inquiry.

The third constructive trust is alleged to have arisen by reason of the first defendant declaring to the plaintiff that if any chattels belonged to Cynthia, and could be proven by evidence to have belonged to her, such chattels would be returned to the plaintiff. The third constructive trust is thus pleaded to have arisen on 10 February 1995, based on the letter of Diana Rawstron, solicitor for the estate of Sidney Nolan.

It is pleaded that the above term or obligation was departed from, in that the paintings were offered for sale at the Sotheby’s auction on 16 September 2001 without notice being given to the plaintiff in reasonable time to enable her to obtain the Proof, if it did exist. It is pleaded that the first defendant holds title to the paintings as a constructive trustee by reason of the above matters.

The plaintiff pleads that she did not have knowledge of all the relevant facts in relation to the ownership of the three paintings until shortly prior to the commencement of the proceeding and was not in a position to give informed consent to any abandonment or to undertake any election.

G. The Plaintiff’s Standing

A threshold question for determination in the proceeding is whether the plaintiff has standing to claim possession of the paintings or equitable entitlement pursuant to various constructive or implied trusts. If the plaintiff lacks standing, it will be unnecessary to determine whether the paintings were validly gifted to Cynthia and constituted assets of her estate, and, if so, whether the estate’s claim was barred pursuant to limitations of action legislation, estoppel, waiver or like equitable doctrines.

The plaintiff’s claim in this proceeding derives entirely from her status as a beneficiary under the two wills of her mother, Cynthia.

By her Australian will executed on 22 April 1976 Cynthia appointed Lily Lynn and Neil Robert Burns the executors and trustees of the will. By the Australian will, the estate was given, devised and bequeathed to the trustees to sell, pay debts and hold the residue of moneys and parts of the estate unsold upon trust for Jinx Nolan for life and thereafter for such of the children of Jinx Nolan as should survive her and attain the age of 21 years. In the event of no child of Jinx Nolan living to attain a vested interest, the trustees were to hold the residuary estate upon trust for the National Trust of Australia (NSW).

Clause 4 of the Australian will provides that:

“… notwithstanding the foregoing trusts, the trustees may at any time and from time to time in their absolute and uncontrolled discretion make payments of the whole or any part of the capital of my estate to or for the benefit of my said daughter Mosca Gai Jinx Margaret Ellery Nolan.” …

The trustees in 1984 sought counsel’s opinion on whether clause 4 was valid. By a memorandum dated 19 December 1984 John Garnsey of counsel stated his opinion that it conferred a valid power of “encroachment“, although conflicting authorities and uncertainty were noted. Mr Garnsey advised that the trustees should seek the directions of the Supreme Court in view of the uncertainty.

The trustees applied for directions as to whether the power in clause 4 was valid and whether they could properly distribute the whole, or any and what part of the residue of the estate to Ms Jinx Nolan, to the exclusion of the residuary beneficiaries or any one or more of them.

The matter was settled. The terms of the settlement are not before the court. The terms of any distribution to Ms Jinx Nolan are not before the court. It appears to be common ground that the distribution comprised all of the assets of Cynthia’s Australian estate which were then ascertained. I am unable to determine whether the Australian trustees exercised their discretion to distribute to Jinx Nolan the entirety of the estate, including any choses in action (such as the right to issue proceedings to recover property of the estate) or whether the trustees, pursuant to the power conferred on them, distributed only specified items of property to Jinx Nolan.

The English will of Cynthia Nolan executed on 13 February 1976 appointed Victor Thomas Hadley and Kathleen Evelyn Griffin executors and trustees.

The English will was in similar terms to the Australian will. By clause 3, it provided that the income of the residuary trust fund would be payable to Jinx Nolan during her lifetime but that the trustees had power, at their absolute discretion, at any time and from time to time, to pay, transfer or apply to or for the benefit of Jinx Nolan the whole or any part or parts of the residuary trust fund, in such manner as the trustees should in their absolute discretion think fit.

By a deed of appointment dated 11 March 1985 the trustees of the English will, pursuant to clause 3(e), determined that the residuary trust fund consisting of those items referred to in an annexed schedule should be held for Ms Jinx Nolan for her own use and benefit, absolutely freed from the trusts of the will. The schedule lists 12 nominated paintings, 11 small paintings, items of jewellery and money.

The schedule comprised the entire known residuary English estate of Cynthia, but it did not include the three paintings in dispute.

The plaintiff contends that, properly construed, the deed of appointment operated to transfer to her, free of the trusts, the entire residuary trust fund of Cynthia’s English estate, whatever it comprised. On that construction, the reference to the items in the schedule did not delimit the subject matter of the transfer but was simply an aid to identifying it. It is submitted that items which did constitute part of the residuary trust fund but were as yet unidentified due to mistake, would also be effectively transferred to Ms Jinx Nolan.

I do not accept that construction. The deed of appointment was made pursuant to the exercise of a discretion to transfer the whole or any part or parts of the residuary trust fund to Ms Jinx Nolan. The deed states that the “Residuary Trust Fund consisting of those items referred to in the Schedule” were to be held for Ms Jinx Nolan. It is not clear from the terms of the deed itself that the items listed constituted the whole of the residuary trust fund, although it is not disputed that, as a matter of fact, they did comprise the entirety of the assets then identified and known to be property of the estate.

I consider that the terms employed by the deed are apt to effect the transfer of only part of the estate. If the deed had been expressed to transfer the whole of the residuary trust fund, the schedule might then be viewed as merely descriptive, rather than delimiting and definitive.

I conclude that the deed of appointment dated 11 March 1985 was effective to transfer to Ms Jinx Nolan only those items listed in the schedule. Any items properly forming part of the residuary trust fund as at that date, but not then identified (including the three paintings in dispute if they constituted the property of Cynthia at the date of her death) were not transferred. It is a matter of speculation whether, had the trustees been aware of an entitlement of the estate of Cynthia to the three paintings, they would have formed an intention to transfer them and would have proceeded to do so. The attitude of the residuary beneficiary, the possibility of challenge to the disposition of the entire residuary trust fund, and the ultimate decision of the trustees in such circumstances, cannot be known.

I therefore conclude that if the three paintings then constituted assets of Cynthia’s English estate, they would remain such, subject to possible bars based on limitation of actions legislation and like doctrines. As assets of the estate, they would remain subject to the trusts. The trustees would have legal title, and standing to sue in relation to the three paintings. They would be entitled to sell or to retain the paintings and would be obliged to apply any resulting income for the benefit of Ms Jinx Nolan as life tenant. However, unless the trustees exercised their discretion under clause 3(e) of the English will, upon the death of Ms Jinx Nolan, and in the absence of her issue, the English National Trust would take.

The paintings in dispute were not recognised as Cynthia’s property at the date of her death and were therefore not included in inventories of either her English or Australian estate.

There is no evidence that “Royal Hotel” 1948 left England following the Nolans’ settlement there, other than for the Moderna Museet Exhibition in Stockholm in 1976. “Hare in Trap” 1946 and “Italian Crucifix” 1955 were despatched to Australia in 1974. They were stored at the Power Gallery, exhibited at the David Jones Art Gallery in July 1975 and subsequently returned to the Power Gallery. There is evidence that as at June 1976 “Hare in Trap” was still in Australia and that it was one of a number of paintings offered for inspection and sale to the National Gallery at that time.

However, Ms Jinx Nolan gave evidence that at the date of her mother’s death she went immediately to London and visited the Nolans’ Putney house, which had been sold, to clear out some possessions. Ms Jinx Nolan stated in cross‑examination that it was her consistent recollection that “Hare in Trap” 1946 was in the Putney house at the time of her mother’s death. Mr Vickery QC, senior counsel for the plaintiff, contended that Ms Jinx Nolan’s evidence on that issue should not be accepted as supporting the conclusion that “Hare in Trap” 1946 was in England at the date of Cynthia’s death, when viewed in the context of the questioning during cross-examination and its basis, as “the witness acceded to something which she should not perhaps have acceded to”.

I consider that Ms Jinx Nolan’s evidence that “Hare in Trap” 1946 was situated in the Putney house at the date of her mother’s death was clear and considered. It was not elicited by confusing or obscure questioning. The evidence should be accepted. I find that, on the balance of probabilities, “Hare in Trap” 1946 and “Royal Hotel” 1948 comprised assets of Cynthia’s English estate.

In relation to “Italian Crucifix” 1955, there is undisputed evidence that it was temporarily in Australia from 1974 until at least July 1975, as was the case with “Hare in Trap” 1946. On the balance of probabilities, I find that “Italian Crucifix” 1955 was returned to England at or about the same time as “Hare in Trap” 1946, arriving by the date of Cynthia’s death. It thus constituted an asset of Cynthia’s English estate.

The defendants, by further amended defence dated 27 November 2002, paragraph 30, plead that the estate of Cynthia in the United Kingdom was wound up and fully administered on or about 11 March 1985 and that the estate of Cynthia in Australia was wound up and fully administered on or about 31 October 1985. By paragraph 30(c), it is pleaded that at no time did the executors of the estates ever get in the three paintings, so that they formed part of the estate of Cynthia prior to completing the administration of that estate.

The plaintiff, by the second amended reply, (paragraph 24), admits the allegations in paragraph 30, save that the estate of Cynthia in Australia was wound up and fully administered on or about 31 October 1986.

On the last day of trial, Mr Corrigan, counsel for the plaintiff, in response to the defendants’ address in reply, submitted that the plaintiff’s admission in paragraph 24 of the further amended reply did not amount to an admission that the paintings never formed part of the estate, but simply an admission that the paintings did not form part of the ascertained or inventoried part of the estate. He sought to withdraw the admission if that construction were not accepted. That withdrawal was opposed.

I consider that the fundamental basis of the plaintiff’s claim, as pleaded, is that the three paintings did form part of Cynthia’s estate, albeit unascertained. The admission, taken in context, does not constitute an admission that the paintings never at any stage constituted assets of Cynthia’s estate.

On the basis that the three paintings were Cynthia’s property and assets of her estate, legal title would vest in the trustees. The right to possession would also vest in the trustees. Under the trusts of the wills, the plaintiff had an equitable life interest not in any particular asset but in the residuary estate constituting the proceeds of sale, together with any assets left unsold. There was also the possibility that the trustees would exercise their discretion in relation to particular assets or sums in her favour, pursuant to the power of “encroachment” conferred by the terms of the Australian and English wills respectively.

I find that the three paintings, if property of Cynthia at the date of her death, formed part of the English estate and title to the paintings was not transferred to the plaintiff by the deed of appointment dated 11 March 1985.

The plaintiff, by amended statement of claim filed 16 December 2002 seeks, inter alia, a declaration that she is the full beneficial owner, and entitled to possession, of the paintings, together with orders for delivery up to her of the paintings.

It is undisputed that the trustees of both the English and Australian wills ceased to act in the mid 1980s. Until recently, it was assumed that all property of the estate of Cynthia was distributed to the plaintiff. However, on the basis of my findings, the three paintings, if assets of Cynthia’s estate, remain subject to the trusts. The plaintiff would not be entitled to possession, or to full beneficial ownership. There is no evidence that any of Cynthia’s trustees has been approached and requested to initiate proceedings in relation to the paintings.

Prima facie, the English trustees would have legal title and the right to possession of the paintings (if they were assets of the estate). They would have standing to sue for the relief sought in this proceeding.[1]
[1]Young v Murphy [1960] 1 VR 279.

The alleged wrong in the present instance is a denial of title. As I have found that the plaintiff would have neither title nor an immediate right to possession to the three paintings, she would not, in the ordinary course, have standing to sue for the relief claimed.[2]
[2]MCC Proceeds Inc v Lehman Brothers International (Europe) “The Times”, London, 14 January 1998.

However, in exceptional circumstances, a beneficiary may sue to enforce the trustees’ right of action against third persons for injury to the trust property. In such circumstances, the trustees should be joined as defendants to the proceeding.

In Lamru Pty Ltd v Kation Pty Ltd[3] Cohen J permitted a beneficiary to sue on the trustees’ right of action, due to two exceptional circumstances. First, the trustees had considered that they had neither the obligation nor the power to sue and had indicated that the beneficiary himself should do so. Further, at the time of the hearing of the action, the trustees had completed the sale, distributed the proceeds and received their remuneration, and could be considered discharged. Having neither the status of trustee nor funds, they could not be expected to sue.
[3](1998) 44 NSWLR 432.

Cohen J relevantly stated:

“In most circumstances trustees are the proper plaintiffs in any claim involving rights or property of the trust. They can accordingly sue for any breach of or to enforce those rights. If they fail to take steps to enforce the rights of the trusts then the beneficiaries can bring proceedings against them for failure to carry out their duties. It used to be the almost invariable rule that the beneficiaries had only that right of action and could not commence any proceedings themselves. This strict rule has been modified over a long period of time. … It was said that the rule is that a beneficiary may sue in his own name only where the relief sought is in the equitable jurisdiction of the Court and even then only when the circumstances are exceptional. If they are not exceptional or if the proposed action is to be commenced in the common law jurisdiction the beneficiary’s only remedy is to sue the trustee for the execution of the trust. Where proceedings are brought by the beneficiary in the circumstances referred to, the trustee and other beneficiaries should be added as defendants. … “[4]

[4]Ibid, at 436.

His Honour referred to the decision of Finn J in Lidden Composite Buyers Ltd (1996) 67 FCR 560 and stated:

“That involved a claim by beneficiaries under a unit trust where it was said that the relief sought was variously under statute, at common law and in equity. His Honour considered (at 563) whether the claim could only be made in respect of equitable relief and he expressed the view that even if there were no authority he would have been inclined to the view that the relief sought under statute and at common law could be made where there is a Judicature Act system. His view was supported by a statement in Scott & Fratcher, The Law of Trusts, 4^th ed (1987-1991) as being the American view, which was supported by what had been said in the Privy Council in Vandepitte v Preferred Accident Insurance Corporation of New York. Finn J noted that a view to the like effect was contained in comments of the Privy Council in Hayim v Citibank NA [1987] AC 730 at 748. He accordingly stated that provided that the exceptional or special circumstances requirement of the rule is met, it is not necessary in a Judicature Act system that the relief be solely equitable.
…
I share the opinion of Finn J that the exceptional circumstances which permit a beneficiary to bring proceedings apply to claims in common law as well as those in equity. In the present case the trustees at various times suggested that they had no power to lease the warehouse. They were incorrect in that opinion but that is not presently relevant. Shortly before the time of the completion of the sale, on 4 March 1998, the solicitors for the plaintiff sought to have the trustees require that the first defendant account for 40 per cent of the mesne profits. That was the same date upon which the plaintiff’s notice of motion for mesne profits was filed. The solicitors for the trustees wrote in response, saying that their clients had no obligation or power under the existing orders to pursue the recovery of mesne profits from Nortex Co and that this should be done by the plaintiff. This attitude would in my opinion justify the finding of special circumstances but there is a further matter, and that is that the trustees have now completed the same and I assume that they distributed the proceeds and received their remuneration. If so, they would now be discharged from the trusts upon which they were appointed. They are no long trustees. This may not prevent them from bringing proceedings but without funds and with no existing status they could not be expected to do so. This adds to the circumstances which I consider to be exceptional or special so as to entitle the plaintiff to make a claim as to its share of mesne profits. The trustees have now been joined as defendants and they submit to any orders which may be made.”[5]

[5]Ibid, at 437 – 438.

In Re Atkinson,[6] Gillard J recognised that although a beneficiary of the residue of an unadministered estate has no proprietary interest in any particular asset of the estate, in circumstances where the trustees defaulted in their duty to get in the trust estate and to enforce the testator’s right, title or interest in relation to property, or were excused from bringing proceedings to do so, in the absence of any action by the personal representatives “the beneficiary has the right of remedy to assert the estate’s right of property”. His Honour emphasised that “the basis of such proceedings is that they are taken on behalf of the estate and if they are successful, they can only result in the lost property being restored to the estate for use in the due course of administration.”
[6][1971] VR 613.

In the present case, it is common ground that Cynthia’s English and Australian estates are wound up and fully administered save for the three paintings, if they are assets of the estates. The trustees of both the English and the Australian wills may be considered discharged.

It follows that exceptional circumstances exist which would justify the plaintiff as a beneficiary suing on the trustees’ right of action. However, the trustees have not been joined, so the proceeding is irregularly constituted. If I find that the paintings constitute assets of the estate of Cynthia, the plaintiff will be entitled to any relief or remedy only for the benefit of the testamentary trusts and not in her own right.

H. Gifts of Chattels

There are three recognised methods for making a valid gift of a chose in possession, such as a painting, inter vivos.

They are:       (a)       deed
(b)      declaration of trust
(c)       delivery.
In the present case, the plaintiff does not assert that a gift was effected by deed or declaration of trust. No deed has been identified or pleaded. Although various constructive trusts are pleaded, they are relevant only in reply to defences of limitations legislation and delay. They depend, for their effect, on the prior establishment of a valid gift to Cynthia by Sidney Nolan.

In establishing a valid gift of a chose in possession inter vivos, which is fundamental to her claim in this proceeding, the plaintiff encounters several significant hurdles represented by well-recognised principles and maxims applicable in this context.

First, it is well established that equity will not assist a volunteer. From that flows the equally venerable principle that equity will not complete an imperfect gift.

Secondly, possession is prima facie evidence of property. As Isaacs and Rich JJ observed in Russell v Wilson[7] -

“Possession in the relevant sense, is not merely evidence of absolute title; it confers a title of its own, which is sometimes called a ‘possessory title’. This possessory title is as good as the absolute title as against, it is usually said, every person except the absolute owner.”

[7](1923) 33 CLR 538.

Limitations of action legislation reflects the policy that lengthy possession must ultimately operate to preclude a remedy in relation to a title, “however clear and indisputable”, when a title holder comes “too late”. The legislation recognises the public’s interest in having “a certain fixed period, after which the possessor may know that the title and right cannot be called in question” in order to avoid an opening to “interminable litigation, exposing parties to be harassed by stale demands, after the witnesses of the facts are dead, and the evidence of the title lost”.[8]
[8]Per Sir Thomas Plummer MR in Marquis Chomondeley v Lord Clinton (1820) 2 Jac. E.W.I, 139-40; 37 ER 527.

In the present case, Sir Sidney Nolan and the first defendant, Lady Nolan, as his beneficiary, have successively been in continuous peaceable possession of the disputed paintings for an unbroken period of approximately 27 years. The “witnesses of the facts” of the alleged gift transactions are dead.

Thirdly, the plaintiff bears the onus of establishing the necessary elements of a gift of chattels effected by delivery. The presumption of advancement, or absolute gift, applies in favour of, inter alia, a wife who takes legal title to property for which a husband provided the purchase price.[9] In such circumstances, it is a rebuttable presumption that the husband intended to advance the wife by way of gift, rather than intending her to hold legal title as a resulting trustee, for himself. The plaintiff sought to rely on authority in which the presumption of advancement was approved. The present case, however, involves an alleged common law gift of chattels, to which presumptions of advancement or resulting trust are equally inapplicable.
[9]Calverley v Green (1984) 155 CLR 242.

The plaintiff also contended that the fact that Sidney Nolan made many undisputed gifts of his paintings to Cynthia demonstrated a propensity on his part to make such gifts, which should assist the plaintiff in the present case. In my opinion, the fact that Sidney Nolan made many gifts to Cynthia which he did not dispute during her life or after her death, is more consistent with the conclusion that he did not make gifts to his wife of those paintings he retained after her death. There is evidence that Sidney Nolan was upset by the terms of his wife’s wills, under which he took no benefit. Nevertheless, he made no attempt to challenge Cynthia’s estates’ entitlement to a considerable number of paintings. Such conduct suggests that Sidney Nolan “honoured” gifts and recognised them as binding.

The essential elements of a valid gift of a chattel inter vivos, in the absence of a deed of gift or a declaration of trust, are

(a)an intention to make a gift, usually expressed by words of present gift;
(b)intention on the part of the donee to accept the gift; and
(c)delivery.

Intention to Make a Gift

Donative intention is characteristically accompanied by words of gift which evince the intention and delineate the object and extent of the intended benefaction.[10]
[10]Per Stuart V.C., Howard v Fingall (1853) 22 LTOS 12.

The plaintiff in the present case, although reliant on a valid gift, is unable to produce any witnesses to the alleged gift transactions. Instead, reliance is placed on documents, the admissibility of which is largely disputed. Those documents, to the extent to which they contain admissible statements, must be approached not only with the degree of caution generally applicable to claims against a deceased estate, but with added caution based on circumstances peculiar to the present case, discussed in detail below.

Are Words of Gift Essential?

The documents on which the plaintiff relies contain statements which, even if admissible, do not amount to words of present gift by Sidney Nolan.

Many of the decided cases have involved undisputed “words of present gift”. It was submitted by the plaintiff that words of gift are not required provided that donative intention is established. The issue has not received detailed consideration in any of the authorities of which I am aware.

This method of effecting a gift of chattels is commonly characterised as “delivery”.[11]
[11]Crossley Vaines on Personal Property, London 1973 at 301, Fisher, S. “Commercial & Personal Property Law”, Butterworths, 1997 at 451.

In many of the cases, however, reference is made to a “parol gift” or a “gift by word of mouth”[12] The question arises whether words of gift are an essential constituent of this method. It is clearly established that donative intention and delivery are required. In most decided cases, words of gift have been undisputed or appear to have been assumed. Argument has centred on whether the requirement of delivery was satisfied. In re Cole, (a bankrupt) Ex parte The Trustees v Cole[13] the Court of Appeal appeared to assume that “words of gift” must be spoken. Words of gift had indisputably been spoken in that case, so the effect of the absence of words of gift was not addressed. Recently, in Horsley v Phillips Fine Art Auctioneers Pty Ltd,[14] Santow J expressly stated that oral words of gift with delivery were required.[15] The plaintiff’s submission, however, draws support from the observation of Mason CJ and McHugh J in their joint judgment in Corin v Patton[16] that “Just as a manifestation of intention plus sufficient acts of delivery are enough to complete a gift of chattels at common law, so should the doing of all necessary acts by the donor be sufficient to complete a gift in equity”.[17] Corin v Patton did not concern a gift of chattels, but a voluntary transfer of an interest in Torrens land. The observation is therefore obiter.
[12]In re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149 at 153.
[13][1964] Ch 175.
[14](1995) 7 BPR 14,360.
[15]Ibid, at 9.
[16](1989-1990) 169 CLR 540.
[17]Ibid, at 588.

If donative intention and delivery only are essential for a valid gift of chattels, that intention must nevertheless be made manifest and expressed with certainty. Words of present gift show “an intention to give over property to another, and not to retain it in the donor’s hands for any purpose, fiduciary or otherwise”.[18] Words of gift are usually necessary to achieve that certainty in relation to matters such as defining the extent of the benefit the donor intends to confer.
[18]Richards v Delbridge (1874) LR 18 Eq. 11 at 15 per Jessel, M.R.

Nevertheless, in my opinion, the better view, as expressed in the dictum in Corin v Patton, is that donative intention need not be manifested by words of gift. Although donative intention would normally be manifested, and its extent defined, by words, unusual circumstances may be imagined where other means fulfil those functions.

If a valid gift may be effected without words of gift in unusual cases, the putative donee who seeks to rely on alternative means of establishing donative intention, would bear the onus of proving the existence of a present, unequivocal donative intention, attended by the requisite certainty as to object, extent, and whether the gift would take immediate effect.

The question is relevant to the present case, because, in contrast to most decided cases, the plaintiff adduces no evidence of words of present gift. Rather, statements in the documents on which the plaintiff relies constitute, at their highest, ex post facto admissions or acknowledgments by Sidney Nolan, the alleged donor, that a particular painting belongs to Cynthia, is “Cynthia’s” or is part of “Cynthia’s collection”.

In my opinion, evidence that Sidney Nolan believed that he had made a gift to Cynthia of an absolute interest, which had already taken effect and which he did not desire to retract, would be capable of manifesting donative intention. A comparable case is that of Re Ridgeway,[19] in which the alleged donor apparently believed that he had made a gift of port to his children and thereafter acknowledged the port’s reputation as “Tom’s port” or “Alice’s port”. It was apparently accepted in Re Ridgeway that the putative donor intended to make a gift and believed that he had done so. That belief was found to be mistaken as a matter of law, because the essential requirement of delivery was not fulfilled. The port remained within the father’s possession in the cellar. The gift, although intended, was held to be incomplete and equity will not perfect an imperfect gift.
[19](1885) 15 QB 447.

Further, although a putative donor’s acquiescence in an ascription of ownership to the donee may, in my opinion, constitute evidence that donative intention existed at a particular time, it may be more equivocal than words of present gift. Where the donor or donee is available to give direct evidence of the matter, any ambiguity or doubt may be resolved. That is not possible in the present case.

A further problem which arises in the present case in relation to the plaintiff’s reliance on the alleged donor’s apparent acknowledgment of the alleged donee’s ownership is that, although delivery can precede, accompany or follow the gift, delivery must occur while the donative intention subsists. At any stage until delivery occurs, the donor can validly retract the gift.

The authorities establish that a promise to make a gift, or an expression of gift by words of future intention, however clear and unqualified, is not sufficient to establish a perfect gift. It follows that the donor’s expression of belief or conclusion that he or she has made a gift which has taken effect, so that property has passed to the intended donee, is equally insufficient. At best, it satisfies only the first requirement of a valid gift of chattels. It manifests donative intention. The second necessary element of delivery must also be satisfied in order to give complete effect to the donative intention. That is a question of law which the putative donor rarely addresses and would usually be unqualified to determine, when expressing a conclusion that property in the chattel had passed to the donee. Thus in Re Ridgeway,[20] the intending donor believed the gift of port complete, denominating it “Tom’s port”. In The National Trustees Executors & Agency Company Limited v O’Hea[21] the intending donor undoubtedly intended to make the gift of a coach and horses to his coachman, and believed it valid. In neither case was the intending donor’s conclusion correct. Delivery had not been effected and the intended gift failed.
[20]Ibid.
[21](1904) 29 BLR 814.

I. Circumstances Relevant to Weight
Claims against Deceased Estates

In the present case, both the alleged donor and the alleged donee are dead, the donee for nearly 30 years. In seeking to discharge the onus of establishing the necessary elements of a perfect gift, the plaintiff must rely on documents, rather than on oral testimony which may be tested by cross‑examination. Where the alleged donor is dead, the authorities require the claimant donee’s account of events to be approached with caution. Where both the alleged donor and donee are dead, and reliance is placed on documents, caution is particularly necessary.

In Re Garnett, Gandy v McCauly[22] Brett MR observed:
[22](1885) 31 Ch D 1 at 8, 9.

“The law is that when an attempt is made to charge a dead person in a matter, in which if he was alive he might have answered the charge, the evidence ought to be looked at with great care; the evidence ought to be thoroughly sifted and the mind of any judge who hears it ought to be, first of all, in a state of suspicion”.

He nevertheless noted that:

“… if, in the end the truthfulness of the witnesses is made perfectly clear and apparent, initial suspicion would yield to belief.”

In Thomas v The Times Book Co,[23] Plowman J applied the approach of Brett MR in a case where the poet, Dylan Thomas, had died shortly after allegedly making a gift of the manuscript of his poem “Under Milk Wood” to a BBC executive. Plowman J stated:

“ … [N]ot only in this case is the onus of proof on the defendants, but I am enjoined by authority to approach their story with suspicion, having regard to the fact that the other actor in this story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place.”[24]

[23][1960] 2 All ER 241.

[24]Ibid, at 244.

Plunkett v Bull[25] involved an action for debt against a deceased estate. Isaacs J noted that the plaintiff bore the burden of establishing “the original creation” of the deceased’s indebtedness and stated:

“..undoubtedly it is established in cases of this sort the Court scrutinizes very carefully a claim against the estate of a deceased person. It is not that the Court looks on the plaintiff’s claim with suspicion and as prima facie fraudulent, but it scrutinizes the evidence very carefully to see whether it is true or untrue.”[26]

[25](1915) 19 CLR 544.

[26]Ibid, at 548.

Recent decisions of this Court have reiterated the need for caution, if not suspicion, in determining claims made against the estate of a deceased person. In Stick-on Signs Pty Ltd v Sign Gear Ltd,[27] Osborn J observed the caveat of Isaacs J in Plunkett v Bull.[28]
[27][2002] VSC 320.
[28](1915) 19 CLR 544 at 548-9.

Similarly, Hansen J in Richardson v Armistead[29] stated that

“ … in such circumstances the self-interest of a claimant to give evidence favourable to his or her case is obvious … in such a case much caution is exercised before the evidence of the claimant is accepted.”[30]

[29][2000] VSC 551.

[30]Ibid, at para 36.

In Plunkett v Bull and Thomas v The Times Book Co, in contrast to the present case, one party to the alleged transaction was still alive and gave evidence which, although scrutinised with due caution, was believed and accepted by the trial judge.

In addition to the caution generally appropriate to claims against the estate of a deceased person, the defendants in the present case point to several additional circumstances which may independently dictate a cautious approach.

In particular, the defendants submit that many of the documents on which the plaintiff relies have been selectively produced from a source which was assembled and deposited surreptitiously, so that there can be no confidence that all relevant documents have been brought forward.

In Plunkett v Bull[31] Isaacs J cited with approval some observations of the Privy Council in Lachmi Parshad v Mararajah Narendro Kishore Singh Bahadur[32] in relation to the sufficiency of proof of claims against deceased estates. Lord Morris there stated:

“In an action brought to recover money against an executor, or as in this case, the heir, of a deceased person, it has always been considered necessary to establish as reasonably clear a case as the facts will admit of, to guard against the danger of false claims being brought against a person who is dead and thus “is not able to come forward and give an account for himself.”[33]

[31]Supra.

[32]LR 19 IA, 9.

[33]Ibid, at 9 – 10.

Isaacs J, in Plunkett v Bull, referred to the failure of the claimant in Lachmi Parshad “to bring forward evidence which he ought to have brought forward and which was available”[34] which had contributed to the Privy Council’s holding that a reasonably clear case was not established. Isaacs J observed that in Plunkett “it has not been suggested, and on the facts before us I do not see how it could be suggested, that any further evidence could be given or any further light thrown upon the case from the plaintiff’s side”.[35]
[34]Supra at 549.
[35]Ibid.

Many of the documents upon which the plaintiff relies in the present case are produced from an archive known as “The Cynthia Nolan Papers” which was given to the National Library of Australia by Cynthia in successive consignments during 1975 and 1976. Cynthia apparently deposited the papers in circumstances of some secrecy. She placed a 45 year restriction on public access to the Cynthia Nolan Papers.

The defendants further submit that Cynthia’s despatch of paintings to the Power Gallery of Contemporary Art, University of Sydney, in 1974, her arrangements with the curator, Elwyn (Jack) Lynn, and the exhibition at the David Jones Art Gallery in 1975, were concealed from Sidney Nolan and occurred without his consent, so that associated documents created by Cynthia or as a result of information she supplied should not be admitted, or alternatively, should be viewed with suspicion.

The defendants also submit that Cynthia’s conduct, as evidenced by her letters to Jinx Nolan dated May 1976 and September 1976, represents an additional ground for declining to admit documents on which the plaintiff seeks to rely.

The defendants further submit that information included in exhibition catalogues is of variable reliability, depending for its accuracy on the information supplied to the compiler.

I consider each of those matters in detail below.

The Cynthia Nolan Papers

Many of the documents on which the plaintiff seeks to rely in this proceeding are produced from a collection known as “the Cynthia Nolan Papers” held by the National Library of Australia. The Cynthia Nolan Papers consist of a considerable volume of papers related to Sidney Nolan, Cynthia and their circle, donated by Cynthia in successive consignments to the Australian National Library between 1975 and 1976. The last consignments were apparently received by the National Library shortly after Cynthia’s death in November 1976.

The defendants rely on several documents which, in their submission, establish that Cynthia donated and delivered the papers after having taken elaborate precautions to conceal her actions from Sidney Nolan. The defendants also contend that the documents on which the plaintiff relies have been produced erratically and selectively. They contend that, in the circumstances, the court can have no confidence that the plaintiff has brought forward all available evidence. It is submitted that that circumstance constitutes a ground for rejecting documentary evidence on which a claim against a deceased person’s estate is based.

Harman LJ held that there was no change in possession in Re Cole. He observed that “it is true that it may be doubtful who is in possession of the furniture and that you must look to the title.”[123]
[123]Ibid, at 190.

Pearson LJ, observed, “it has been established that oral words of gift or even written words of gift not embodied in a deed or will, are not sufficient to make an effective gift unless there has been or is delivery of possession to the donee. The basic idea is that there must be giving and taking, and if the donor retains possession, has not yet given and the donee has not yet taken”.

Pearson LJ also took the view that in the case of a husband and wife living together or other persons having a common establishment, the possession, as it would otherwise be doubtful, is attached by law to the title.[124]
[124]Ibid, at 192.

Pearson LJ concurred with Harman LJ and Pennycuick J in holding that applicable authority required delivery in the case of husband and wife within a common establishment, endorsing the statement in Bashall v Bashall[125] that in the case of delivery between spouses, “if the facts proved were equally consistent with the idea that he intended to deliver the thing to the wife so as to be her property, and with the idea that he intended to keep it as his own property then the wife failed to make out her case”.[126]
[125](1894) 11 TLR 152 at 153.
[126]Re Cole, supra, at 192.

As such, Pearson LJ observed that delivery must be an act which in itself shows an intention of the donor to transfer the chattel to the donee. “If the act is in itself equivocal – consistent equally with an intention of the husband to transfer the chattels to his wife or with an intention on his part to retain possession but give to her the use and enjoyment of the chattels as the wife – the act does not constitute delivery”.[127]
[127]Ibid.

His Lordship noted that in the case before him, there was no pre‑existing possession in the donee prior to any words of gift and the acts relied on, being equivocal in the relevant sense, did not satisfy the requirement of delivery.[128]
[128]Ibid.

If Lord Pearson’s approach be correct, although delivery is not merely evidence of intention to make a gift, but rather an integral component of the gift transaction, it is nevertheless necessary that the act of delivery unequivocally evidence the donor’s intention to transfer, and not retain, possession of the chattel in question.

Interestingly, Pennycuick J expressed himself as constrained by authority rather than persuaded as a matter of principle to hold that an act of delivery was required when one spouse spoke words of gift to the other spouse, who was already sharing the physical enjoyment of the relevant chattel.[129] His Honour’s approach appears to foreshadow that of Santow J in Horsley v Phillips Fine Arts Auctioneers Pty Ltd, discussed below.
[129]Ibid, at 193.

The peculiar problems posed by spouses or other cohabitants in a common establishment have received recent consideration in two Australian cases, which evince differing and perhaps irreconcilable approaches.

In Horsley v Phillips Fine Art Auctioneers Pty Ltd,[130] Santow J questioned the authority of Re Cole. His Honour held that where chattels are situated in a residence of which the intended donee is occupier or titleholder, and there is no shared control of the chattels, the chattels may be regarded as being in the pre‑existing possession, or at least the custody, of the donee, and subsequent words of gift may suffice to perfect the gift, without any requirement for the donor first to retake possession or to execute a deed. His Honour’s observations also evinced an expansive approach to delivery, suggesting that prior custody by a donee in a common establishment may suffice.
[130]BC 950 5362 SC NSW, Santow J, 31 July 1995, 5 September, 1995.

In Horsley v Phillips Fine Art Auctions Pty Ltd[131] a credit corporation which seized certain valuable household chattels as assignee of a bill of sale resisted a cross‑claim for conversion on the grounds that the cross-claimant had, inter alia, divested himself of that interest by joining with his brother in an effective gift of their half interests in the chattels to their mother, prior to the granting of the bill of sale from which the credit corporation purportedly derived title.
[131]Ibid.

The brothers (who held joint title to the chattels in question) occupied a very large mansion property with their parents. The cross‑claimant occupied a separate cottage and his brother, although residing within the main house with the parents, occupied a separate suite. Santow J held that the arrangement did not constitute a “common establishment”.

The relevant furniture was kept in those parts of the main house which were under the control of the parents, so that if the brothers used the rooms they did not do so “as co-possessors with their parents, but by leave of their parents; though no doubt their access was in practice untrammelled”.[132] Santow J accepted the cross-claimant’s evidence that the brothers “did unequivocally state to their mother that they were gifting the furniture to her and had the celebratory drink”.[133]
[132]Ibid, at 192.
[133]Ibid.

His Honour considered that the cross-claimant probably walked around the various items of furniture, but was unable to determine whether he was accompanied by his mother or brother, or, if his mother accompanied him, whether he placed his hand on the items, although he did not hand anything to his mother.

Santow J concluded that a valid gift of the chattels had been effected. In that context, he relied upon the principle that further delivery is unnecessary if the intended donee “already had possession or at the least custody of the chattels at the time of the words of gift”.[134]
[134]Horsley v Phillips Fine Art Auctioneers Pty Ltd, supra, at 10.

His Honour discussed the distinction between legal possession (animus possidendi and a degree of physical control sufficient to exclude strangers from interfering) and mere custody (de facto possession or mere physical control). He referred to Flinn v White[135] in which words of gift by a father to his daughter in relation to a piano, which remained throughout situated in the family home of which the father was occupier, were held to be ineffective, for want of pre-existing possession or custody in the donee, or a further act of delivery.
[135][1950] SASR 195.

Santow J questioned whether, although the daughter had “no more than a licence, revocable by the father at will” to use the piano, she did not in fact have custody. In his view, “status as a licensee, as such, need not be fatal; a licensee can have the degree of physical control required for custody”.[136] His Honour found, however, that the decision could, in any event, be justified by reference to onus. The daughter had not dispelled the implication of her having only limited access, a right to use the piano at the father’s pleasure, which was shared with at least one other family member. More directly relevant were Hislop v Hislop[137] and Re Cole which involved a purported gift between husband and wife residing together in the matrimonial home. Santow J considered the results in Hislop v Hislop and Re Cole were explicable because joint de facto control of the furniture, (based on being permitted to use and enjoy it) did not suffice to establish pre‑existing possession.
[136]Horsley v Phillips Fine Art Auctioneers Pty Ltd, supra, at 12.
[137][1950] WN Eng 125.

In Horsley v Phillips Fine Art Auctioneers Pty Ltd, Santow J held that the intended donee, the mother, had (jointly with her husband) physical control and therefore custody of the chattels. On one view, she also had exclusive possession of the house and therefore of the rooms in which they were situated. The fact that the mother had such custody or possession jointly with her husband was, in his view, irrelevant.

On Santow J’s findings, there was no joint custody or possession between the putative donors and donee. Although not deciding the question, Santow J was inclined to think that shared control between a putative donor and donee should not be fatal. He observed –

“This is especially where there is no suggestion of shared control between putative donor and donee. I do not need to decide whether the feature, absent here, should be fatal to an effectual gift, though I am inclined to think it should not be fatal.”[138]

[138]Horsley v Phillips Fine Art Auctioneers Pty Ltd, supra, at 15.

In Horsley v Phillips Fine Arts Auctioneers Pty Ltd, Santow J questioned the authority of Re Cole and Hislop v Hislop because the cases failed to deal with custody as a separate basis from possession. His Honour considered that, “They appear to have proceeded on an implicit, and I suggest, questionable assumption. That is, that where goods are in the shared use of the putative donor and donee, but where the putative donor has the superior right to those goods through ownership of the home in which kept [sic] that necessarily precludes a finding of custody on the part of the claimant donee”.[139]
[139]Ibid, at 12.

Santow J’s observation may suggest that the purported donors in Re Cole and Hislop v Hislop had de facto mixed possession, but a superior right to the goods, not because they had legal ownership of the goods, but because they had legal title to the house in which they were situated. However, the reference to “possession following title” in those cases related to the title to the chattels, not title to the residence in which they were situated.

Horsley v Phillips Fine Art Auctioneers Pty Ltd did not concern a common establishment or a situation of shared control and Santow J’s observations were therefore obiter dicta.

In Tudberry v Sutton,[140] a case decided after Horsley v Phillips Fine Art Auctioneers Pty Ltd, Judge McGill S.C. strongly reaffirmed the primacy of the requirement for an identifiable act of delivery. He considered that recognised exceptions based on prior possession or custody should not be extended. In Tudberry v Sutton, the deceased’s sister and her family resided in his house, visiting from interstate, while he was gravely ill in hospital. The sister gave evidence that her brother expressed an intention to make an immediate gift of a memento to her children (his niece and nephew). The sister selected and named two paintings in her brother’s house, informed him, and he appeared to nod assent. The sister then removed the paintings from the brother’s residence. The brother subsequently died.
[140](1998) 20 Qld Lawyer Reps 13.

Judge McGill S.C. held that there was no valid gift. He adverted to the necessity for the donor to give, rather than the donee to take, possession.[141] He questioned the status of Thomas v Times Book Co Ltd, which he identified as the only decision in which the taking of possession by the donee had been upheld. He considered that if it correctly decided that an effective delivery had occurred, such delivery was effective not because the donee took possession with consent, but because, on proper analysis, the custodian of the place where Thomas had mislaid the manuscript gave it to the donee in the capacity as the bailee of the donor. Nevertheless, Judge McGill S.C. concluded that, taken at face value, the decision in Thomas v Times Book Co Ltd is “simply wrong and is an example of a hard case making bad law”.[142]
[141]Ibid, at 15.
[142]Ibid. It is possible to view Thomas v Times Book Co Ltd as an example of constructive delivery by the donor, whose provision of information on the whereabouts of the mislaid manuscript conferred access on the donee to the extent possible in the circumstances.

Judge McGill S.C. considered that Santow J’s unqualified extension of prior possession to prior custody in any capacity at all in Horsley v Phillips Fine Art Auctioneers Pty Ltd failed to accord with the tenor of applicable authority and with the underlying governing principle that delivery is the formal step which effects the gift.

He considered that the only case where mere custody, as distinct from possession, is legitimately within the exception would be where the donee is in the degree of physical control that would otherwise require the donor first “to retake” the chattels.[143] That would have been the case in both Re Stoneham and Horsley v Phillips Fine Art Auctioneers Pty Ltd, as the donees were in exclusive occupation of the residences in which the chattels were situated. It would not be the case where the donor and donee occupied a common establishment and where there was only “such custody as is afforded by actual use from time to time”.[144] In such cases, mere words of gift unaccompanied by any further act of delivery would not suffice. Some manual or constructive act of delivery would be necessary “unless the donee already has ‘such a degree of possession that there would have to be re‑delivery before there could be delivery’.”[145] On that basis, Re Cole was correctly decided.
[143]Ibid, at 18.
[144]Ibid, at 19.
[145]Ibid.

In reiterating a preference for continued observance of the strict requirement of delivery, and confining the exception of pre‑existing possession to strict limits, Judge McGill S.C. noted “I suspect that part of the reason for the survival of the rule in its strict form has been a desire to prevent a deathbed gift inter vivos or donatio mortis causa from evading statutes which require wills to be made in a particular form, coupled with a general suspicion as to the genuineness of claims of oral gifts from persons who were either unable to dispute them (because they were dead) or happy to connive at them (because they were bankrupt). There is, however, in my opinion, no justification for relaxing these rules.[146]
[146]Ibid, at 17.

Judge McGill S.C. held that the temporary residence of the deceased’s sister as a guest in his house did not confer custody of the premises or the chattels therein, although the owner was temporarily absent. The exception did not apply, because re‑delivery to the donor was not necessary in order to complete the gift.[147]
[147]Ibid, at 19.

In my opinion, there is force in Judge McGill S.C.’s insistence on maintaining delivery as a pre-eminent independent requirement. In the absence of an unambiguous act, the enforcement of voluntary transfers against donors and their successors in title could produce unjust outcomes. That approach does, on occasion, result in the failure of some purported gifts which were genuinely intended. However, greater harm may result from undue relaxation of the delivery requirement, particularly in the context of common establishments. A proliferation of claims between cohabitants, trustees in bankruptcy and executors, together with increased uncertainty in the determination of such claims, may result. In my opinion, the principles expressed in The National Trustees Executors and Agency Company Limited and Re Cole should be maintained.

In the present case if, contrary to my findings, the relevant documents expressed Sidney Nolan’s clear donative intention or acknowledgment of Cynthia’s owernship, the plaintiff must also establish a delivery of the paintings.

There is no direct evidence of any act of delivery, whether manual or constructive, by Sidney Nolan to Cynthia.

In the present case, it is undisputed that Sidney Nolan and Cynthia occupied a common matrimonial home during the course of their marriage.

The question arises whether there is any basis on which the plaintiff can discharge the onus of establishing delivery.

As set out in paragraphs 43 to 46 above, there is no evidence that the paintings in dispute were situated in the Nolans’ matrimonial home during the course of their marriage.[148] Other than for the period from 1974 to mid 1976 (in relation to “Hare in Trap” 1946 and “Italian Crucifix” 1955) and the periods of the relevant exhibitions, there is no evidence as to where the paintings were situated.
[148]Mr Danziger-Miles’ evidence was to the effect that ‘Italian Crucifix’ 1955 was in the house at some stage, but no date was given.

Further, other than for the period from 1974 to mid 1976 there is no evidence of Cynthia’s level of access to, or power, rights of user and control over, any of the paintings in dispute.

Given such lacunae, the liberal approach of Santow J in Horsley v Phillips Fine Art Auctioneers Pty Ltd to pre-existing custody in a common establishment, even if extended, cannot assist the plaintiff to establish delivery in the present case.

There is no evidence that Cynthia was, at any stage, in possession of “Royal Hotel” 1948. There is evidence that Cynthia caused 26 paintings including “Hare in Trap” 1946 and “Italian Crucifix” 1955 to be despatched to Australia in 1974 and that she exercised control and dominion over “Hare in Trap” 1946 and (probably) “Italian Crucifix” 1955 until at least June 1976.

Cynthia at that time took possession of the paintings in question and assumed the rights of an owner in relation to them. There is no evidence that Sidney Nolan delivered possession to Cynthia. On the contrary, he did not know of, or consent to, her actions. If, contrary to the views expressed in Tudberry v Sutton, a valid delivery may be established by the donee’s taking possession with the knowledge and consent of the donor, that did not occur in the present case. Unauthorised appropriation by the purported donee could not constitute a valid delivery on any view. In the circumstances, the plaintiff has failed to establish the essential element of delivery.

Conclusion

In this proceeding, the cases for the plaintiff and the defendants have been clearly presented and well-argued. For the reasons set out above, in my opinion, the plaintiff has failed to establish the requisite elements of donative intention and delivery in relation to the three paintings. I conclude that a valid gift of the paintings to Cynthia, on which the plaintiff’s claim to relief in this proceeding depends, is not made out.

Given my finding that a valid gift of the three paintings is not established, it is unnecessary to consider the defences and the arguments in reply. In order to avoid undue delay, I shall not consider them comprehensively or in any detail. I observe, however, that had a gift of the paintings to Cynthia been established, in my opinion a defence based on the Limitation of Actions Act 1958 (Vic), at least, would have been made out.

I consider that Sidney Nolan’s conduct in assuming the rights of an owner in relation to the paintings from a date in late 1976 would have constituted conversion[149] and the right of action of Cynthia’s trustees would have been barred after the expiration of a six year period pursuant to the Limitation of Actions Act. I do not accept the plaintiff’s submission that, in such circumstances, Sidney Nolan would assume the status of a constructive trustee to whose conduct no limitation applies by virtue of s.21 of the Limitation of Actions Act. It is recognised that a donor who has completed all elements of a gift save for the transfer of legal title may be constituted a constructive trustee for the donee while the donor retains legal title.[150] However, the present case concerns an alleged gift of chattels. If a gift of chattels were complete and valid, the donor would necessarily be divested of legal title to the chattels. There is no legitimate role for a constructive trust in such circumstances and no precedent for it has been identified.
[149]Penfolds Wines Pty Ltd v Elliot (1946) CLR 204 at 229 – 230 per Dixon J.
[150]Re Rose [1952] Ch 499.

As the additional constructive trusts pleaded by the plaintiff are all predicated upon the primary constructive trust allegedly imposed on Sidney Nolan, I shall not consider them further.

In my opinion, the plaintiff’s claim must fail and the proceeding should be dismissed.

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[2003] VSC 121

28 April 2003