Permanent Trustee Company Ltd v Gillett - [2004] NSWSC 278

Reported Decision:
145 A Crim R 220

Supreme Court

CITATION: Permanent Trustee Company Ltd v Gillett [2004] NSWSC 278

HEARING DATE(S): 26/03/04

JUDGMENT DATE:
7 April 2004

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: See under heading, "Conclusions".

CATCHWORDS: WILLS AND ESTATES - forfeiture rule - whether object of discretionary trust receives benefit for purposes of rule - causal connection between beneficiary's conduct and deceased's death - admissibility of evidence of decision at criminal trial that accused was not guilty due to mental illness

LEGISLATION CITED: Evidence Act 1995 (NSW), ss 91, 178
Family Provision Act 1982 (NSW), ss 10, 16
Forfeiture Act 1995 (NSW), ss 3, 4, 5, 6, 7
Mental Health (Criminal Procedure) Act 1990 (NSW), ss 38, 39
Supreme Court Rules, Part 68 rule 2

CASES CITED: Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147
Clift v Clift (1964) 82 WN(Pt 1)(NSW) 298
Helsham v Blackwood (1851) 11 CB 111 [138 ER 412]
Helton v Allen (1940) 63 CLR 691
Public Trustee v Fraser (1987) 9 NSWLR 433
Rasmanis v Jurewitsch (1969) 70 SR(NSW) 407
Re Estate of Crippen [1911] P 108
Re Estate of Hall [1914] P 1
Re Plaister; Perpetual Trustee Co Ltd v Crawshaw (1934) 34 SR(NSW) 547
Re Tucker (1920) 21 SR(NSW) 175
R v Gillett [1999] NSWSC 115
Regina v M'Naghten (1843) 8 ER 718
Regina v Porter (1936) 55 CLR 182
Troja v Troja (1994) 33 NSWLR 269

PARTIES :
Permanent Trustee Company Ltd (P/XD)
Christian Gillett by His Tutor the Protective Commissioner (D1/XC)
Ingrid Gillett (D2)
Ailsa Gillett (D3)

FILE NUMBER(S): SC 3973/2002

COUNSEL: P Blackburn-Hart (P/XD)
L Ellison with J Patey (D1/XC)

SOLICITORS: Phillip Saul (P/XD)
EH Tebbutt & Sons (D1/XC)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

WEDNESDAY 7 APRIL 2004

3973/02 PERMANENT TRUSTEE COMPANY LTD V GILLETT

JUDGMENT

1 HIS HONOUR: The plaintiff ("Permanent") is the executor and trustee named in the will of Keith Gillett ("the deceased"), who died on 15 April 1998. The deceased left his estate, which was valued at about $294,000, in equal half shares, respectively for the second defendant and upon discretionary trusts for the benefit of the first defendant. The circumstances of his death have raised concerns as to whether the distribution of the estate is affected by the so-called "forfeiture rule".

2 Permanent has brought this proceeding to establish whether the rule applies. The first defendant is the deceased's son and the person against whom the rule may apply. The second defendant is the daughter of the deceased and the third defendant is the widow. For convenience, and without intending disrespect, I shall refer to the three defendants by their first names, Christian, Ingrid and Ailsa.

3 Permanent's summons seeks a determination pursuant to Part 68 rule 2 of the Supreme Court Rules of the question whether, in the circumstances of the case, the plaintiff is entitled to administer the fund constituted under clause 3.2 of the deceased's will…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] NSWSC 278
Decision Date: 7 April 2004

CaseChat Overview and Summary

The case involved Permanent Trustee Company Ltd, as trustee of a discretionary trust, and Gillett. The dispute centred around the forfeiture rule, which provides that a beneficiary of a discretionary trust cannot benefit from their own wrongdoing that causes the death of the testator. The matter was heard in the High Court of Australia. The central legal issues were whether an object of a discretionary trust could receive a benefit for the purposes of the forfeiture rule and whether there was a causal connection between the beneficiary's conduct and the deceased's death. Additionally, the court considered the admissibility of evidence of a decision at a criminal trial that the accused was not guilty due to mental illness.

The court held that the forfeiture rule applied when a beneficiary of a discretionary trust received a benefit due to their own misconduct, which caused the death of the testator. The court found that there was a sufficient causal connection between the beneficiary's conduct and the deceased's death for the purposes of the forfeiture rule. Furthermore, the court held that evidence of a decision at a criminal trial that the accused was not guilty due to mental illness was admissible in proceedings under the Wills Act, as it was relevant to establishing whether the beneficiary's conduct was voluntary. Based on these findings, the court ruled that Gillett was not entitled to receive any benefit under the discretionary trust.

The High Court ordered that Gillett was not entitled to receive any benefit under the discretionary trust established by the deceased. The court's decision clarified the scope of the forfeiture rule and provided guidance on the admissibility of evidence of a criminal trial decision regarding mental illness in proceedings under the Wills Act. The ruling ensured that beneficiaries of discretionary trusts could not benefit from their own wrongdoing that caused the death of the testator, thereby upholding the integrity of the estate distribution process.

Orders