Thynne v Sheringham

Thynne v Sheringham concerned a dispute between a surviving spouse and the sons of her deceased husband regarding their entitlement to property. The sons alleged that their father and stepmother had entered into a mutual wills agreement, whereby the surviving spouse was to hold the property, or its proceeds of sale, for their benefit. The surviving spouse, however, had sold the property and used the proceeds for her own purposes, leading to the sons seeking to establish a trust over the property and lodge a caveat. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether a mutual wills agreement had been established, and if so, what was the nature of the equitable obligation imposed on the surviving spouse. Specifically, the court had to determine whether the surviving spouse's power to expend the proceeds of sale for her own needs was compatible with the existence of a trust in favour of the sons, and whether this equitable obligation gave the sons a caveatable interest in the land.

The Court of Appeal affirmed the decision of the primary judge, finding that a mutual wills agreement had been established. The court held that the trust arose at the time of the testator's death, creating a floating obligation on the surviving spouse to preserve the property or its proceeds for the beneficiaries. This obligation crystallised upon the surviving spouse's repudiation of the agreement by selling the property and expending the proceeds. The court concluded that this equitable obligation constituted a caveatable interest in the land, as it represented a proprietary claim that could be enforced against the property.

The Court of Appeal granted the applicant leave to appeal but ultimately dismissed the appeal, ordering the appellant to pay the respondent’s costs.