Articles Relating to Will Disputes

Ademption. In NSW Trustee & Guardian v Bensley & Ors [2012] NSWSC 655 White J considered the question as to whether a gift of property fails because the deceased did not own that property at the time of her death:

1. The plaintiff is the executor of the will of Dawn Bensley who died on 19 July 2011. The deceased left a will dated 30 September 2009. By that will she gave certain pecuniary legacies. She also made a gift of her property in [xxx xxxxxx], Hornsby (“the Hornsby property”) to her niece, Glynis Bensley. She directed that the residue of her estate be divided between two nieces, Glynis Bensley and Claire Connolly, and her brother, Patrick Bensley.

2. By its summons the plaintiff seeks a declaration as to whether the gift of the Hornsby property to Glynis Bensley has been adeemed.

3. On 5 March 1998 the deceased appointed the Public Trustee as her attorney. The power of attorney was expressed to be a general power that was to continue to be effective, notwithstanding that after its execution Miss Bensley might suffer loss of capacity. The authority conferred on the Public Trustee was that provided for in the then s 163B of the Conveyancing Act 1919.

4. By 5 March 2010 Miss Bensley, then aged 88 years, was diagnosed as having severe dementia. She was offered permanent placement at the Warrigal Care Bundanoon Aged Care Home and subsequently took up residence there.

5. The NSW Trustee and Guardian (which is the successor of the Public Trustee) decided to sell Miss Bensley’s Hornsby property. It appears that the property was sold on 26 November 2010 and the sale was completed on 23 December 2010. I infer that the sale price was $470,000.

6. Part of the proceeds of sale was used to pay an accommodation bond at the Warrigal Care Bundanoon Aged Care Home.

7. Following Miss Bensley’s death, there has been a refund of the bond, or part of it, which has been paid to the plaintiff and deposited to the estate account.

8. The balance of the proceeds of the Hornsby property can be identified. The question is whether the gift of the Hornsby property to Glynis Bensley fails because the deceased did not own that property at her death, or whether Glynis Bensley inherits the traceable proceeds of sale of that property.

9. This question has recently been considered by the Court of Appeal (RL v NSW Trustee and Guardian [2012] NSWCA 39). The leading judgment was given by Campbell JA. Young JA and Sackville AJA generally agreed with his Honour’s reasons. Campbell JA reviewed the authorities. It is unnecessary for me to consider the earlier authorities. I need only apply the conclusion of the Court of Appeal. Campbell JA concluded (at [173]) that subject to any statutory provision to the contrary:

“… the only circumstance in which it is legitimate for the proceeds of sale of a specifically given item of property to pass to the intended donee of that property, other than where the sale has been effected without authority or in some other fashion wrongfully, is where the specifically given asset has not been changed in substance.”

10. His Honour also said (at [183]):

“Absent matters such as dishonest dealings, a principal is bound by the acts of his attorney within the scope of the authority conferred, even if the principal has no intention to carry out the specific act that the attorney has carried out. This is no different to the way in which an incapable person is bound by acts, performed with proper legal authority, of whoever is administering his or her affairs, whether that administration is occurring under a court or Guardianship Tribunal management order or an enduring power of attorney.”

11. At [186] his Honour said:

“When one is considering whether the disposition of an asset of an incapable person has adeemed a specific gift made by that person’s will, there is no legitimate basis of principle on which a disposition effected pursuant to an enduring power of attorney should operate in any different way to a disposition effected pursuant to the authority of the court, or of the NSW Trustee. Re Viertel[[1996] QSC 66;[1997] 1 Qd R 110] did not consider the whole of the well-established line of English cases that show that the disposition of an asset of an incapable person in accordance with the court order results in an ademption of a specific gift of that asset.”

12. There are various statutory provisions that can affect the operation of this principle. None is relevant in the present case. Section 83 of the NSW Trustee and Guardianship Act 2009 does not apply because the deceased was not “a managed person” within the meaning of that Act and the sale was not a disposition or other dealing with property under that Act. Section 48 of the Protected Estates Act 1983 does not apply for like reasons. Section 22 of the Powers of Attorney Act 2003 does not apply. That Act applies to powers of attorney created by an instrument executed on or after the commencement of section 6. The date of commencement of that section was 16 February 2004. The power of attorney pursuant to which the property was sold was created on 5 March 1998.

13. The proceeds of sale of the property are a change of the asset in substance. At the testatrix’s death the Hornsby property was not an asset of the estate. Accordingly, the gift of the Hornsby property fails by ademption. The proceeds of sale of the property are to be dealt with as part of the residue of the estate….

Same sex and de facto relationships – a brief history of legislative reforms in NSW. This is an extract from A Bride in Her Every-Day Clothes: Same Sex Relationship Recognition in NSW by Jenni Millbank and Kathy Sant, The Sydney Law Review, June, 2000, 22 Sydney L. Rev. 181:

In NSW in 1996, amendments to criminal procedural legislation (to permit victim impact statements) and new victims’ compensation legislation both used a definition of a family victim as ‘the victim’s de facto spouse, or partner of the same sex, who has cohabited with the victim for at least two years.’

In 1998 amendments to workers compensation legislation introduced an un-gendered definition of de facto partners which required, ‘a mutual commitment to a shared life’ in a ‘genuine and continuing’ cohabiting relationship.

In 1999, NSW became the first state in Australia to enact comprehensive reform covering same sex relationships in a wide range of laws. Unlike the ACT Domestic Relationships Act 1994, the NSW Government chose to cover same sex couples and other forms of close relationship separately, rather than simply including same sex couples within a general non-couple based category.

The Property (Relationships) Legislation Amendment Act 1999 amended the existing definition of de facto spouse to include same sex cohabiting couples in the state based statutory property division regime. It also amended numerous other areas of NSW law, most notably those concerning family provision, intestacy, accident compensation, stamp duty and decision-making in illness and after death. As a secondary change the Act introduced the concept of ‘domestic relationships’ for the first time into NSW laws. This was intended to cover some other forms of close relationships in a smaller number of NSW laws, notably those concerning statutory property division, family provision, bail, and stamp duty. The Act also somewhat confusingly renamed the De Facto Relationships Act 1984 as the Property (Relationships) Act 1984.

The former definition of de facto partner was:

• (a) in relation to a man, a woman who is living or has lived with a man as his wife on a bona fide domestic basis although not married to him; and
• (b) in relation to a woman, a man who is living or has lived with the woman as her husband on a bona fide domestic basis although not married to her.

The definition of de facto relationship in the amended laws is now:

A relationship between two adult persons:

• (a) who live together as a couple, and
• (b) who are not married to one another or related by family.

The new definition represents a clean break with traditional definitions of partners which rest upon a comparison to marriage or use marriage as the central reference point. At the heart of the new definition is the need to live ‘as a couple’. Gone are such terms as ‘marriage-like’, ‘as his wife’ or ‘as her husband’ and the frequently convoluted explanations of how one could be not married yet married. The Attorney-General’s Second Reading Speech made clear that the new non-gendered definition of de facto spouse was specifically intended to include lesbian and gay couples. The remarks of the Attorney-General also suggest that incorporation of the term ‘as a couple’ was not intended to alter considerably the nature of the inquiry undertaken by a court to determine the existence of a relationship, nor alter the application of prior case law on property division under the Act.