Re Thomson
[2015] VSC 370
•31 July 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROBATE LIST
S CI 2015 02988
| DAVID LUCAS (in his capacity as executor of the estate of KENNETH JEFFREY THOMSON, deceased) | Plaintiff |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 17 July 2015 |
DATE OF JUDGMENT: | 31 July 2015 |
CASE MAY BE CITED AS: | Re Thomson |
MEDIUM NEUTRAL CITATION: | [2015] VSC 370 |
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EVIDENCE — Where superannuation fund established by deed — Where trust deed updated by supplementary deed — Supplementary trust deed lost — Where subsequent trust deed updated lost trust deed is an unsigned copy deed — Where plaintiff seeks unsigned copy trust deed, alternatively, the original trust deed, be declared the operative trust deed — Application of presumption of regularity
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B Wright | McDonald Murholme |
HER HONOUR:
The Ken Thomson Superannuation Fund (‘the Fund’) was created by a deed dated 18 June 1986 (‘the 1986 Deed’). It was updated by a supplementary deed in approximately 1990 (‘the 1990 Deed’). The 1990 Deed has apparently been lost. It was then updated again by a deed dated 25 June 2000 (‘the 2000 Deed’). The only copy of the 2000 Deed in the plaintiff’s possession is unsigned.
Kenneth Jeffrey Thomson (‘the deceased’) died on 13 July 2014, aged 89 years. The plaintiff is the executor of the deceased’s estate. By originating motion filed 11 June 2015, the plaintiff seeks declarations and orders in relation to the Fund as follows:
(a) the 2000 Deed be declared the operative deed of the Fund or, alternatively, that the 1986 Deed be declared the operative deed;
(b) the property of the Fund be vested in the plaintiff in his capacity as the legal personal representative of the estate of Kenneth Jeffrey Thomson; and
(c) the Fund be wound up, with the associated costs to come out of the deceased’s estate.
The financial records of the Fund indicate that, since at least 2007, the deceased had been the sole member and beneficiary of the Fund.[1] His wife, Mrs Thomson, had been nominated as a beneficiary, though this was not a binding death nomination. Mrs Thomson died on 4 April 2015, aged 94 years.
The presumption of regularity – the 2000 Deed
[1]See exhibit DL-5.
The plaintiff submits that the presumption of regularity should be applied to render the 2000 Deed operative, even though a signed copy cannot be located. He cites the remarks of Wilcox and Marshall JJ in Kingham v Sutton,[2] in which their Honours stated:
As Wigmore, in Evidence in Trials at Common Law Vol 9, reveals at para 2534, the presumption of regularity is:
...more often mentioned than enforced; and its scope as a real presumption is indefinite and hardly capable of reduction to rules.
It may be said that most of the instances of its application are found attended by several conditions; first, that the matter is more or less in the past and incapable of easily procured evidence; second, that it involves a mere formality or detail of required procedure in the routine of a litigation or of a public officer's action; third, that it involves to some extent the security of apparently vested rights so that the presumption will serve to prevent an unwholesome uncertainty; and finally, that the circumstances of the particular case add some element of probability.[3]
[2][2002] FCA 506 [59].
[3]See also Harris v Knight (1890) 50 PD 170, 179 (Lindley LJ).
The plaintiff notes that although the 1986 Deed identified the trustees as the deceased and Mr Rodney Reeve Crane, the 2000 Deed identifies the deceased and his wife as the only trustees. The latter two individuals, or their respective administrators/representatives, have been the only trustees approving the Fund’s financial statements and reports from at least 1 July 2006 to 30 July 2013, the date of the last approved report. The plaintiff submits that those approvals took place in reliance on the formality that the unsigned copy of the 2000 Deed was identical to the signed copy. No documents have been located in relation to the fate of Mr Crane’s trusteeship or his current whereabouts.
The plaintiff notes also that the Commonwealth Bank of Australia (‘CBA’) has previously accepted the 2000 Deed as providing authority to handle the Fund’s accounts. As at 8 April 2015, the Fund has trust property in two accounts with the CBA amounting to approximately $1, 247,000.
Article 7.19 of the 2000 Deed makes provision to terminate and wind up the Fund in the event of, inter alia, the ‘death or prior termination of membership of the last Member or Dependant entitled to benefits from the Fund’. The plaintiff submits that this event has occurred, and that Article 7.20 therefore applies. Article 7.20 provides, in summary, that in the event that the fund is wound up due to the death of the last Member in the absence of a Designated Beneficiary in circumstances where the Fund still has remaining assets, a death benefit equal to the amount remaining in the Fund will be payable in accordance with the terms of Article 5.8. Article 5.8 provides, relevantly, that where a legal personal representative exists and there is no designated beneficiary (as here) then the death benefit is to be paid to the estate of the member.
As such, the plaintiff argues that the Fund should be terminated and the property of the Fund vested in the plaintiff in his capacity as legal personal representative of the deceased.
The 1986 Deed
In the alternative, the plaintiff argues for the 1986 Deed as the operative deed, as no copy of the 1990 Deed can be located. The 1986 Deed differs from the 2000 Deed in relation to, inter alia, the winding up of the Fund and the identification of the trustees.
Article 6.19 of the 1986 Deed provides for four different scenarios in which the Fund is to be wound up, none of which, in the plaintiff’s submission, apply to the facts of this case. One scenario provides for the winding up of the Fund ‘by resolution of the Principal Employer to permanently cease contributing to the Fund’, but although a Principal Employer was defined in the recital as Fern Tree Gully Timber & Joinery Pty Ltd, a company of which the Deceased had been the director and majority shareholder, no evidence exists of any resolution of the required type having been made.
The supplementary 2000 Deed defines Mrs Thomson as trustee, but the 1986 document does not do so. Under the terms of Article 6.1 and 6.2 of the latter instrument, the number of trustees was to be at least two, unless the trustee was an incorporated company. On 29 June 2011, VCAT appointed administrators to the deceased’s affairs, whereupon he ceased to be a trustee, in accordance with Article 6.4 of the 1986 Deed. As such, the plaintiff submits, if the 1986 Deed is the operative deed then either (1) there was no trustee after 2011 or (2) Mrs Thomson was the sole trustee, in breach of Article 6.1. It is submitted that in any event, the Fund should be terminated as there are currently no trustees to administer it, and that the Fund’s property should be vested in the plaintiff in his capacity as the legal personal representative of the deceased.
Can the presumption of regularity be relied upon to render the unsigned 2000 Deed operative?
In Cross on Evidence the presumption of regularity is described as ‘a rebuttable presumption establishing due appointment and capacity to act’ (‘omnia praesumuntur rite et solemniter esse acta’).[4] It has also been expressed thus: ‘[w]here an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act’.[5] The principle was also stated by Lindley LJ in Harris v Knight: [6]
The maxim, “Omnia praesumuntur rite esse acta,” is an expression, in a short form, of a reasonable probability, and of the propriety in point of law of acting on such probability. The maxim expresses an inference which may reasonably be drawn when an intention to do some formal act is established; when the evidence is consistent with that intention having been carried in effect in a proper way; but when the actual observance of all due formalities can only be inferred as a matter of probability. The maxim is not wanted where such observance is proved, nor has it any place where such observance is disproved. The maxim only comes into operation where there is no proof one way or the other; but where it is more probable that what was intended to be done was done as it ought to have been done to render it valid; rather than that it was done in some other manner which would defeat the intention proved to exist, and would render what is proved to have been done of no effect.
[4]At [1175].
[5]Knox County v Ninth National Bank 147 US 91 (1893), 1, quoted in McLean Bros & Regg v Grice (1906) 4 CLR 835, 850.
[6](1890) 15 PD 170, 179–180.
The presumption is based on inference from probabilities,[7] and on policy considerations of public and commercial convenience for the smooth operation of business.[8] Although of general application in both criminal and civil proceedings,[9] it is mainly applied to matters of public law.[10]
[7]Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506, 514.
[8]Morris v Kanssen [1946] AC 459, 475; Hardess v Beaumont [1953] VLR 315, 320.
[9]R v Brewer (1942) 66 CLR 535, 548.
[10]Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154, 164.
There does not appear to be any case law that deals specifically with the scenario in this application, but there are cases that deal with the application of the presumption in situations where correct execution or certification of documents was an issue. The following cases provide some assistance in determining this unusual application.
The first case is Re Spitzer; Ex parte Weltrans Agency Establishment.[11] The case is an example of the Court being unwilling to apply the presumption in a novel way; that is, in a manner unsupported by previous authority.
[11](1979) 25 ALR 447.
The case involved a creditor’s petition based on a debtor’s non-compliance with a bankruptcy notice, with a question arising as to the authority of the creditor’s agent to sign the petition. Lockhart J of the Federal Court held that the presumption would not apply to prove execution by a corporation of a power of attorney, or to prove authorisation to a signatory to sign a bankruptcy petition. His Honour said:
Mr McEwen, who appeared for the petitioning creditor, submitted that the petitioning creditor had established actual authority of Mr Harris to sign the petition. He relied, in particular, upon the maxim omnia praesumuntur rite esse acta. That rule presumes that the necessary formal requisites to certain acts or offices have been complied with. For instance, in some instances acting in public office is taken as evidence of due appointment. Mr McEwen was not able to refer me to any case directly in point where the maxim was applied in relation to the execution by a corporation of a power of attorney. There are cases where the rule was applied, entitling an outsider to a corporation, dealing with the corporation, to assume that all internal regulations of the corporation had been complied with and where everything appeared to be regular so far as it could be checked from public documents. Those cases do not, in my opinion, apply to this case.
The next case is Kingham v Sutton, relied on by the plaintiff, where the Federal Court considered the application of the presumption in an industrial law context. A question arose as to whether it was necessary to verify the legitimacy of all the signatures on a petition of union members requesting a referendum in order for that petition to be valid. In considering whether the presumption of regularity could be applied to verify the legitimacy of the signatures, Wilcox and Marshall JJ made the following remarks:
We do not think the presumption of regularity applies to a case such as this. If it did apply, it would be rebutted, in relation to many sheets of the petition, by their form and the evidence of the circumstances surrounding their execution.
The essence of the presumption of regularity is that "official appointments were duly made and that official acts were duly performed"; see G D Nokes, An Introduction to Evidence, 2nd ed 1956 at 64. The presumption is rebuttable and "may be displaced by a contrary inference from additional facts however established". (see Nokes at 61). A fact such as the lack of a system of checking or verifying the signatures on the petition against the names of financial members supports such a contrary inference.
As Wigmore, in Evidence in Trials at Common Law Vol 9, reveals at para 2534, the presumption of regularity is:
...more often mentioned than enforced; and its scope as a real presumption is indefinite and hardly capable of reduction to rules.
It may be said that most of the instances of its application are found attended by several conditions; first, that the matter is more or less in the past and incapable of easily procured evidence; second, that it involves a mere formality or detail of required procedure in the routine of a litigation or of a public officer's action; third, that it involves to some extent the security of apparently vested rights so that the presumption will serve to prevent an unwholesome uncertainty; and finally, that the circumstances of the particular case add some element of probability.
Accepting, for instant purposes, the neutrality of the final consideration and the irrelevance of the second and third considerations, it can be seen that the first is controversial in the appeal. However, the better view is that the issue was capable, and remains capable, of being resolved by evidence which was procured in respect of 458 people who were in the same position as the 1257 whose signatures are in dispute. The 1257 at all material times were financial members of the organisation. The appellants were four State Branch secretaries of the organisation. The vast majority of administrative work associated with the enrolment of members and their continued financial position occurs at the Branch level. If the 458 signatures were capable of verification why not the 1257?
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The presumption of regularity has a limited place in the area of industrial law to which s 209 of the Act applies. The whole point of an applicant seeking to enforce an obligation on a respondent to perform and observe the rules is to seek that something which should have been done under the rules is in fact done. If the presumption of regularity was applied too readily to this area of the law, it would tend to immunise from challenge anything done under alleged authority. [12]
[12][2002] FCA 506 [57]–[60], [62].
In any event, as Lord Simonds said in Morris v Kanssen:[13]
It is a rule designed for the protection of those who are entitled to assume, just because they cannot know, that the person with whom they deal has the authority which he claims. This is clearly shown by the fact that the rule cannot be involved if the condition is no longer satisfied, that is, if he who would invoke it is put upon his inquiries. He cannot presume in his own favour that things are rightly done if inquiry that he ought to make would tell him that they were wrongly done.
In this case, it is the appellants who seek to invoke the presumption of regularity. They are not people who "cannot know".
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We do not doubt there may be circumstances in which it is appropriate to apply the presumption of regularity to industrial affairs. For the purposes of this appeal, it is not necessary to attempt any general statement about those circumstances. It is sufficient to say it obviously cannot apply to a situation where the evidence demonstrates a lack of regularity. [14]
[13][1946] AC 459 at 475.
[14]Ibid [57]-[66] (emphasis added).
Kingham demonstrates that there will be areas of law in which, as a matter of policy, the presumption cannot be too readily applied. It also emphasises the obvious point that evidence of irregularity will prevent the operation of the presumption. For example, in R v Grosert,[15] Vasta J refused to apply the presumption of regularity to a will in circumstances where positive evidence existed that the requirements of s 9 of the Succession Act1981-1983 (Qld) had not been complied with, that is, the will in question had been signed by the testator, but there was evidence that the signing had not taken place before the requisite two witnesses.
[15][1985] 1 Qd R 513.
In Sutherland v Woods,[16] Hallen AsJ (as he then was) applied the presumption and stated that he would infer, as a matter of probability, that all of the documents associated with the creation of a superannuation fund had been signed, where all relevant parties had arranged their affairs on the basis that the creation of the fund was valid.
[16][2011] NSWSC 13.
In Burnside v Mulgrew; Re the Estate of Grabrovaz,[17] Brereton J of the New South Wales Supreme Court considered a dispute as to whether a testator’s signature on a will was genuine, in circumstances where forgery was alleged. His Honour considered a number of cases in which the presumption of regularity had been applied in order to establish the fact of due execution of a will, and said:
All of these were cases in which there was an issue as to compliance with the formal requirements for execution. Not one of them was a case in which whether the testator had or had not in fact signed the Will was in issue. It is consistent with the role of the presumption of regularity in wider circumstances that it should apply in cases where what is in question is compliance with formal requirements, but not where there is a substantive issue as to whether the signature on the Will is that of the testator at all. That is also consistent with the fundamental principle, referred to in Re Eger, that the proponent of a Will bears the onus of proving that the signature on a Will is that of the testator. Where the issue is whether or not the Will is that of the testator, the presumption of regularity will not avail the proponent on that issue.[18]
[17][2007] NSWSC 550.
[18]Ibid [25].
Inasmuch as Burnside v Mulgrew is relevant to the plaintiff’s application, it supports the plaintiff’s submission that the presumption ought to apply as there is no allegation of fraud or similar misconduct involved in the loss of the documents.
Consideration
The application of the presumption to this case would be such that the fact of the approval of the Fund’s financial statements and reports by the deceased and his wife should be taken to mean that the necessary prior act, that is, the signing of the 2000 Deed that made them both trustees of the Fund, must have taken place or be probable that the 2000 Deed was duly executed.
In my view, the presumption of regularity ought be applied to render the 2000 Deed operative. First, based on the financial records provided, it seems reasonable to assume that all relevant parties believed the 2000 Deed was effective. The existence of the signed 1986 Deed also lends probative weight to the contention that an executed copy of the 2000 Deed can be presumed to exist, as the latter document was supplemental to an instrument already in existence. No fraud is alleged and there is no evidence of irregularity. Although no cases were located in which the presumption was applied to a situation of precisely this nature, I consider that the circumstances here are unusual and specific enough such that no general policy concerns need prevent the presumption’s application.
I consider that the application of the test set out in Kingham v Sutton also supports the conclusion that the presumption ought to apply. The matter is some fifteen years in the past, and it seems unlikely that evidence could now be procured that would determine the issue of the execution of the relevant document. In the case of the missing 2000 Deed, the plaintiff has caused all reasonable efforts to locate the document. The application of the presumption would prevent the ‘unwholesome uncertainty’ referred to by Wilcox and Marshall JJ as to the manner in which the estate is to be disposed. Finally, the circumstances set out by the plaintiff add a degree of probability that there has been reliance upon regularity of the 2000 Deed in the creation of the financial records and the CBA was been willing to rely upon the unsigned document.
Finally, and most compellingly, if the validity of the 2000 Deed were not established then the alternative submitted by the plaintiff – reliance upon the 1986 Deed – would most probably lead to the same result. The application of the presumption would, therefore, remove the need for the plaintiff to engage in a re-assessment of the financial materials, while achieving the very same outcome as that which could be expected.
Orders
Subject to any further submissions of the plaintiff, I will order:
(a) The operative trust deed of the Ken Thomson Superannuation Fund is the trust deed dated 25 June 2000.
(b) The property of the Ken Thomson Superannuation Fund be vested in David Lucas in his capacity as the legal personal representative of the estate of Kenneth Jeffrey Thomson, deceased.
(c) The Commonwealth Bank of Australia (ACN 123 123 124) pay to David Lucas in his capacity as legal personal representative of the estate of Kenneth Jeffrey Thomson, deceased, the balance of monies held in the Ken Thomson Superannuation Fund in accounts 3108 10638261 and 3108 50193156.
(d) The Ken Thomson Superannuation Fund be wound up.
(e) The costs of this proceeding be paid out of the estate of Kenneth Jeffrey Thomson deceased.
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