Characteristics of a will

  • Definition of a will extends to codicils (additions/supplements that explain, modify or revoke a will or part thereof) and other testamentary dispositions: Succession Act 2006 s 3.
  • Originally wills were for realty (land and buildings) and testaments for personal property.
  • A valid will must:
    • comply with formalities of writing, execution and attestation,
    • be made by a person with testamentary capacity who knows and approves the contents of the wil,
    • deal with property or appoint executors in order to be admitted to probate, and
    • not have been revoked.
  • A will is always revocable even if expressed to be irrevocable or the testator has contracted not to revoke it: Vyniors Case (1609) 77 ER 597.
  • A will is ambulatory — it has no effect until the testator’s death:
    • Testator remains free to deal with property during lifetime regardless of whether it is gifted under the will.
    • A beneficiary who dies before the testator receives nothing.
  • A will is unitary — it is the aggregate of all unrevoked testamentary writings: Douglas-Menzies v Umphelby [1908] AC 224, 233.
  • A later will does not revoke an earlier will unless:
    • it contains an express revocation clause, or
    • it is inconsistent with the terms of an earlier will.

Codicils

  • Codicils are amendments or additions to a will and must comply with the same formalities unless dispensed with.
  • A codicil is read with the will as if both constitute one will:
    • Codicils are construed to interfere as little as possible with the will: Cookson v Hancock (1836) 40 ER 770.

Testamentary and inter vivos transactions

  • Testamentary dispositions take effect upon the death of the testator and must comply with the formalities in the Succession Act.
  • Inter vivos dispositions take effect when they are made or by reference to some event other than the donor’s death — there is no need for compliance with the Succession Act.
  • Not all property that passes on death is testamentary — testamentary dispositions are the voluntary transmission of property on death that belonged absolutely and indefeasibly to the deceased: Russell v Scott (1936) 55 CLR 440, 454.
  • There is a rebuttable presumption that a document that is prima facie testamentary is testamentary.
  • A document that is not prima facie testamentary may be admitted if it complies with formalities and and is demonstrated to be intended to be testamentary: Kings Proctor v Daines (1830) 162 ER 1136.
  • Moneys deposited into a joint account confers an interest immediately and does not require death to consummate the gift: Russell v Scott (1936) 55 CLR 440.
  • Voluntary settlements postponing possession or vesting (to A until my death, and then to B) take effect immediately but postpone possession/vesting until after death.
  • Nominations of a benefit (eg nominee of a life insurance or superannuation policy) are categorised as a contract to create an inter vivos trust of future property: McFadden v Public Trustee [1981] 1 NSWLR 15.
    • They may also be categorised as a contract to pay money on the occurence of a future event: Baird v Baird [1990] 2 WLR 1412.
    • Statutory superannuation schemes create a non-testamentary statutory obligation to pay the nominee: Superannuation Industry (Supervision) Act 1993 (Cth) s 59(1A).

Donatio mortis causa

  • A Donatio mortis causa is a hybrid gift that is not testamentary but requires death to operate, with three elements:
    • contemplation of death,
    • a gift conditional on death, and
    • delivery of the gift with intent to part with dominion over it.
  • The donee receives an absolute and complete title only on death occurring.
  • Once the gift takes effect by death, the gift cannot pass to the estate.
  • The donor may recover and revoke the gift prior to death.
  • Delivery can be of documents that are the indicia of title (eg a share certificate): Public Trustee v Bussell (1993) 30 NSWLR 111.
  • There is doubt as to whether there can be a valid donatio mortis causa over Torrens title land: Bayliss v Public Trustee (1988) 12 NSWLR 540; Sen v Headley [1991] Ch 425.
  • The doctrine applies to bank passbooks as indicia of title, but not bank statements, while handing over car keys may be sufficient: Tawil v Public Trustee of NSW (Unreported, Supreme Court of New South Wales Equity Division, Hodgson CJ, 1 July 1988).

The rule in Strong v Bird (1874) LR 18 Eq 315

  • Elements of the rule were stated by Kitto J in Cope v Keene (1968) 118 CLR 1, 8:
    • the testator makes a purported immediate gift,
    • they intended it to be an immediate gift,
    • it fails to comply with legal requisites,
    • the testator at time of death still intended the gift to be treated as effectively given to the intended donee, and
    • the testator leaves a will appointing the intended donee as executor.
  • Where the conditions are met, equity will perfect the gift on the basis that:
    • the executor could have sued the testator for the gift,
    • the executor cannot sue themselves, and
    • the executor has no choice over their appointment and should not be required to renounce probate in order to sue for the gift.
  • The gift remains part of the estate but passes to the executor, and is therefore available under family provision legislation and to creditors of the estate: Blackett v Darcy [2005] NSWSC 65 [38].
  • Rule applies to realty and personalty: Benjamin v Leicher (1998) 45 NSWLR 389.
  • The rule appears limited to cases where the donee receives the beneficial interest in the gift — it does not apply where the gift is over a bare legal interest: Blackett v Darcy [2005] NSWSC 65 [37] (Young CJ in Eq).

Conditional wills

  • Conditional wills depend upon the happening of a specified event.
  • It is a question of construction as to whether the will is conditional upon that event or whether the event is merely the reason for making the will: In the Goods of Spratt [1897] P 28, 30.
  • If the condition is not fulfilled, the will is inoperative including any revocation clause: In the Goods of Hugo (1877) 2 PD 73.

Joint wills

  • Joint wills contain the will of two or more persons.
  • Each time a person dies, the document is admitted to probate in respect of that person.

Mutual wills

  • Two persons (usually spouses) make wills in substantially identical terms.
  • There is a legally binding obligation between the persons that neither will revoke their will without the consent of (or at least giving notice to) the other.
    • A legally binding obligation is essential: Osborne v Estate of Osborne [2001] VSCA 228 [18].
    • Merely being identical is not enough: Birmingham v Renfrew (1937) 57 CLR 666 (Latham CJ).
    • See also Baird v Smee [2000] NSWCA 253; Hussey v Bauer [2011] QCA 91.
  • It is not essential that every term of the mutual agreement be proved.
    • It is enough if there is sufficient evidence to support a legally binding obligation that can lay the foundation for the imposition of an equitable obligation: Walters v Olins [2008] EWCA Civ 782 [41].
  • If the agreement relates solely to the disposition of land it must be evidenced in writing: Conveyancing Act 1919 s 54A; Horton v Jones (1935) 53 CLR 474.
    • Writing is not required if the agreement relates to all property (realty or personalty, and non-specific): Birmingham v Renfrew (1937) 57 CLR 666.
  • A breach of the agreement by one party during the lifetime of the other by revocation of the will gives rise to an action for damages.
  • A breach by revocation after death will give rise to equitable relief by way of a constructive trust in favour of the party who was to benefit under the mutual will: Dufour v Pereira (1769) 21 ER 332, 333.
    • This operates as a floating obligation of the assets of the survivor that crystallises into a trust upon the assets of the survivor on the death of that person: Barns v Barns (2003) 214 CLR 169, 199 [85].
    • A declaration in support of a mutual wills agreement was made during the lifetime of the surviving party to the agreement in Walters v Olins [2008] EWCA Civ 782 [42].
  • Equity will intervene to prevent revocation of a mutual will as revocation without notice or after the other’s death constitutes fraud: Birmingham v Renfrew (1937) 57 CLR 666, 683, 688 (Dixon J).
  • Revocation of a gift or will by operation of law will not necessarily amount to a breach of the mutual with agreement: Berk v Estate of Berk [2012] NSWSC 1589.
    • In the case of a divorce, it will be a question of whether the divorce was intended to revoke the gift in favour of the former spouse.
  • The court will in many cases need to infer that the parties intended to enter into legally binding relations.
    • There must be clear and satisfactory evidence of the agreement: Walters v Olins [2008] EWCA Civ 782 [36].
    • The court will act cautiously: Fry v Densham-Smith [2010] EWCA Civ 1410.
    • The factors mentioned in Albrow v Cunningham [2000] NSWSC 103 will be considered:
      • the number of people to which the statement was made,
      • whether there is a statement in writing,
      • the consideration offered for the promise,
      • the number of times the statement was made,
      • the language used by the parties,
      • the context in which the promise was made,
      • the nature of the relationship between the parties, and
      • the certainty of the terms.
  • Disposal of property by the survivor of a mutual will may constitute a breach of the agreement and could be restrained by an injunction during their lifetime: Walters v Olins [2008] EWCA Civ 782 [42].
    • Not all promises that support mutual wills contain promises that the survivor will not dispose of the estate — often the intention of the parties is that the survivor should be able to enjoy the property in their lifetime: Birmingham v Renfrew (1937) 57 CLR 666, 689 (Dixon J).
  • An inter vivos transaction will not be a breach of the mutual will agreement (even if it is intended to defeat the promise) unless the transaction is in substance testamentary: Palmer v Bank of NSW (1975) 133 CLR 150, 159 (Berwick CJ); Barns v Barns (2003) 214 CLR 169; Fazari as executrix of the estate of Cosentino v Cosentino [2010] WASC 40.
  • To transfer a property inter vivos but continue to live in it and pay rates and charges is sufficient to constitute a breach of a mutual will agreement if done with intent to defeat the agreement: Bauer v Hussey [2010] QSC 269 [32].
  • Property the subject of a mutual will remains available for the making of an order under family provision legislation as it is still part of the testator’s estate at death: Barns v Barns (2003) 214 CLR 169.

Testamentary contracts

  • Testamentary contracts are subject to the requirement if writing if they deal solely with an interest in land and are otherwise subject to the law of contract.
  • The previous position was that these contracts were outside of the estate and were to be regarded in the same way as debts (and not subject to an order under the Family Provision Act): Schaefer v Schumann [1972] AC 572.
  • The current position is that the benefit due is part of the estate on death and is available for an order under the Family Provision Act: Barns v Barns (2003) 214 CLR 169.

Contracts to leave certain property by will

  • If the testator disposes of property in their lifetime, there is a beach of contract giving rise to damages if the intended beneficiary is aware of the breach.
  • The damages will be less than the value of the property by reason of acceleration of the benefit and may need to be discounted to allow for a possible Family Provision Act claim on death that would redue the estate: Barns v Barns (2003) 214 CLR 169, 207 [110].
  • Equitable relief may be available against a third party recipient, unless they are a bona fide purchaser for value without notice: Synge v Synge [1894] 1 QB 466.

Contracts to make a will

  • Contracts to leave a specific gift allow the intended beneficiary to claim as a creditor in the estate if there are insufficient assets to meet the gift or the testator has otherwise disposed of it: Schaefer v Schumann [1972] AC 572.
  • Contracts to leave the whole or a specified share or legacy of the testator’s property place the beneficiary at risk of the testator dissipating the estate during their lifetime, or that the estate will be insolvent — the promise is to leave the estate as it is at the testator’s death: Palmer v Bank of NSW (1975) 133 CLR 150.
  • The testator cannot enter into other testamentary transactions or transactions to the same effect that would defeat the promise — the promise is that the only testamentary transaction is a will in favour of the promisee: Palmer v Bank of NSW (1975) 133 CLR 150, 159 (Barwick CJ).
  • The testator and beneficiary can covenant not to dispose of some or all of their property inter vivos.

Contracts not to revoke a will

  • Testators are free to revoke their wills, but may be in breach of contract if they do, leading to damages and posible equitable remedies: Synge v Synge [1894] 1 QB 466.
  • A contract not to revoke is not breached if revocation occurs by operation of law — eg marriage: Succession Act s 12; Re Marshland; Lloyds Bank Ltd v Marsland [1939] Ch 820.
  • If the promise can be construed as a promise to leave property by will in any event, then revocation by operation of law will constitute a breach of contract: Robinson v Ommanney (1883) 23 Ch D 285.

Estoppel

  • In the absence of a contract a testator may be estopped from leaving some or all of the estate by will to a third party contrary to a representation made to the intended beneficiary.
    • Equity could impose a constructive trust over the estate in the hands of the third party.
  • Establishing an estoppel requires an unconscionable detriment if the promise to leave property was not made good where the promise was both intended to be an actually relied upon: Gillet v Holt [2001] Ch 210.
  • An express promise made to leave property upon death may give rise to an estoppel if the person changes their mind before death in contravention of their representation, and the change of mind would in the circumstances be unconscionable: Gillet v Holt [2001] Ch 210.
  • A representation to leave property upon death does not need to be precise and clear: as long as it was reasonable for the representee to rely and act upon it.
    • Reasonableness will be judged on an objective basis, and once this occurs a proprietary estoppel is established.
    • It is irrelevant that the representor did not intend or foresee reliance: Thorner v Major [2009] 1 WLR 776.
    • There must be an actual representation, whether arising expressly or by implication, and must not be a self-generated expectation derived from a family relationship or perceived obligation: Savage v Rogers [2014] NSWSC 41.
  • There must be certainty as to the property subject of the proprietary estoppel it is not necessary that the property remains fixed over time — it is enough that it is identifiable: Thorner v Major [2009] 1 WLR 776.
  • Proprietary estoppels may be established against a testator:
    • There must be evidence of representations by the testator and not a third party such as a deceased parent who was the prior owner: Hampson v Hampson [2010] NSWCA 359.
    • A representation will not bind a third party unless they were knowingly party to the conduct that defeats the representation: Bryna Pty Ltd v Wallerstein [2014] QSC 29.
  • There must be actual reliance upon the representation and evidence that a person changes their position by such reliance (if they would have acted that way regardless, there is no estoppel): Stone v Stone [2014] NSWSC 1655.
  • Estoppel has been recognised in NSW is respect of a representation made by a testator to their son concerning a portion of rural property: Waddell v Waddell [2012] NSWCA 214.
    • See also Delaforce v Simpson-Cook (2010) 78 NSWLR 483; Quinn v Bryant [2012] NSWCA 377.

Delegation

  • ‘A power or a trust to dispose of property, created by a will, is not void on the ground that it is a delegation of the testator’s power to make a will, if the same power or trust would be valid if made by the testator by instrument during his or her lifetime’: Succession Act 2006 (NSW) s 44.
    • A power or trust that would be valid inter vivos is now valid if created by a will.
    • This applies after 1 March 2008.
  • Prior to 1 March 2008, a testator could not generally delegate their testamentary powers.
    • There is an exception to the non-delegation rule for charitable gifts. Chichester Diocesan Fund v Simpson [1944] AC 341.
      • The exception applies where there is a gift of a power of appointment in the will.
      • Power of appointment is distinguished from a trust:
        • In a trust, the trustee holds the property to divide it among a certain class of persons — they are compelled to carry out the trust.
        • A power of appointment merely gives the holder of the power the right to select possible beneficiaries (with or without limitation) and cannot be compelled to exercise the power (thus, the beneficiaries could get nothing).
      • Three types of powers of appointment:
        • A general power allows the holder to appoint anyone (including themselves).
          • Valid because it amounts to complete ownership of the testator’s property by the person with the power: Tatham v Huxtable (1950) 81 CLR 639.
          • It is permissible to give the power to the trustees of a valid pre-existing trust where those trustees have the power to distribute to the world at large: Gregory v Hudson (1998) 45 NSWLR 300.
        • A special power only allows appointment from a limited class of persons.
          • Only valid if the class of persons is sufficiently defined and ascertainable: Tatham v Huxtable (1950) 81 CLR 639; Chichester Diocesan Fund v Simpson [1944] AC 341.
        • A hybrid power allows appointment of any person apart from named exceptions.
          • Hybrid powers are presently not valid in NSW, but are valid in the UK.
          • They are too vague and uncertain to be valid: Horan v James [1982] 2 NSWLR 376.
            • This decision has been doubted (but not overturned): Gregory v Hundson (1998) 45 NSWLR 300.