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Ross v Gordon

Ross v Gordon

Case [2022] ACTCA 21 10 May 2022

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:	Ross v Gordon
Citation:	[2022] ACTCA 21
Hearing Date:	2 November 2021
DecisionDate:	10 May 2022
Before:	Mossop J, Rangiah J and McWilliam AJ
Decision:	See [76]
Catchwords:	APPEAL – TRUSTS AND ESTATES – Cheques written by testator to a trust that exceeded anticipated value of estate – not presented prior to death – whether liability created through operation of the Cheques Act 1986 (Cth) – consideration is an underlying assumption of the Cheques Act 1986 (Cth) – no consideration as deceased provided cheques as a gift to trust – no liability created by the holding of cheques – appeal allowed – proceedings remitted to the Supreme Court for determination in accordance with these reasons – costs to form part of Supreme Court proceedings
Legislation Cited:	Bills of Exchange Act 1882 (UK) Bills of Exchange Act 1909 (Cth) Cheques Act 1986 (Cth), ss 3(1), 6, 10, 17(1), 25, 30, 35, 36, 40, 50, 58, 59, 60(1), 61, 71, 74, 76, 88, 90 Family Provision Act 1969 (ACT) Wills Act 1968 (ACT), s 12B
Cases Cited:	Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 Blackett v Darcy [2005] NSWSC 65; 62 NSWLR 392 Chan v Zacharia (1984) 154 CLR 178 Hewitt v Kaye (1868) LR 6 Eq 198 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Parsons v The Queen [1999] HCA 1; 195 CLR 619 Perpetual Trustees Australia Ltd v Heperu Pty Ltd [2009] NSWCA 84; 76 NSWLR 195 Re Swinburne [1926] 1 Ch 38 Ross v Gordon [2021] ACTSC 41 Sidney Raper Pty. Ltd. v Commonwealth Trading Bank of Australia [1975] 2 NSWLR 227 T Choithram International SA v Pagarani [2001] 1 WLR 1 Walsh & Ors v Hoag & Bosch Pty. Ltd. [1977] VR 178 Xu v Wang [2019] VSC 269; 58 VR 536
Texts Cited:	Brian Conrick, The Law of Negotiable Instruments in Australia (Butterworths, 2^nd ed, 1989) Paul Finn, Fiduciary Obligations (The Federation Press, republication, 2016) Stephen Janes, David Liebhold and Paul Studdert, Wills, Probate and Administration in New South Wales (Lawbook Co, 2^nd ed, 2020) Thomson Reuters, Laws of Australia, vol 36
Parties:	James Young Ross ( Appellant) Donna Maree Gordon (First Respondent) Donna Maree Gordon as trustee of the Olga Hart Trust (Second Respondent) Donna Maree Gordon as executor of the estate of Olga Hart (Third Respondent)
Representation:	Counsel T Crispin ( Appellant) W Sharwood with K Weir (Respondents)
Solicitors Ray Swift Moutrage & Associates ( Appellant) Tim Sharman Solicitors (Respondents)
File Number:	ACTCA 19 of 2021
Decision under appeal:	Court/Tribunal: Supreme Court of the ACT Before: Justice Loukas-Karlsson Date of Decision: 24 March 2021 Case Title: Ross v Gordon Citation: [2021] ACTSC 41

THE COURT:

Introduction

Prior to her death, the deceased, Olga Hart, established the Olga Hart Trust. She wrote three cheques totalling $1,200,500 to the Olga Hart Trust. The amount of…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Ross v Gordon

Details

AGLC: Ross v Gordon [2022] ACTCA 21
Case: [2022] ACTCA 21
Decision Date

CaseChat Overview and Summary

The appeal concerned the estate of the late Olga Hart, who, prior to her death, drew three cheques totalling $1,200,500 in favour of the Olga Hart Trust, of which she was also the trustee. These cheques were not presented before her death and were subsequently dishonoured. The appellant, James Ross, a former de facto partner of the deceased, made a claim for family provision under the *Family Provision Act 1969* (ACT). The primary judge had found that the estate had no net assets due to the liability created by the cheques, rendering the family provision claim futile, although she also contingently assessed and dismissed the claim. The appellant appealed this decision to the Supreme Court of the Australian Capital Territory.

The central legal issues before the Full Court were whether the cheques drawn by the deceased created a legally enforceable liability against her estate, and consequently, whether the estate possessed any net assets from which the appellant's family provision claim could be satisfied. This involved determining the operation of the *Cheques Act 1986* (Cth) in circumstances where cheques were gifted by a drawer to a trust of which the drawer was also the trustee, and whether such an arrangement constituted consideration for the cheques. The court also considered, in light of the primary judge's findings, whether the executor had committed devastavit or a fraud on the power, and the implications for the family provision claim.

The Full Court allowed the appeal, holding that consideration is a fundamental assumption underlying the *Cheques Act 1986* (Cth). In this case, the deceased provided the cheques as a gift to the Trust, and there was no consideration moving from the Trust to the deceased. Therefore, the holding of the cheques did not create a liability for the deceased's estate. The Court reasoned that the *Cheques Act* does not operate to create a liability in the absence of consideration, distinguishing the situation from a completed gift of a chose in action. Consequently, the estate was not depleted by the cheques, and the primary judge's conclusion that there were no net assets was erroneous. The proceedings were remitted to the Supreme Court for determination in accordance with these reasons, with costs to form part of those proceedings.

Orders